Legislative Wrap-Up

Around 12:30AM on August 1, 2016, the Massachusetts Legislature wrapped up its work for the 2015 – 2016 legislative session. There was a flurry of activity in the final hours of the session. For the remainder of 2016, the Legislature will meet in informal session, but during those sessions bills need the unanimous approval of the limited number of members attending to be approved. Any member of the Legislature can prevent any bill from advancing simply by objecting.

This session NAIOP played offense and defense on a wide range of bills – with a number of significant victories. The following is an end-of session update on some of the bills NAIOP pursued this session:

Economic Development Bill Includes NAIOP Priorities
One of the final bills passed at the end of the session was the Economic Development Bill, H.4569 An Relative to Job Creation & Workforce Development. The bill included a number of provisions supported by NAIOP that will encourage economic activity in Massachusetts including:

  • Extends (from 6 months to 12 months) the period of time within which an applicant must begin construction following the issuance of a building permit or special permit or otherwise be subject to subsequent amendments to local ordinances. Extends (from 2 years to 3 years) the life of a special permit if construction has not commenced.
  • Increases the total number of projects allowed per community under the I-cubed program from 8 to 10 projects.
  • $45 million for the depleted Brownfields Redevelopment Fund.
  • Creates a new starter home program as part of Chapter 40R. Communities that establish a starter home district will be eligible for incentive payments from the state. The program encourages the production of densely located, smaller, single family homes, with a requirement that at least 20% of the homes in the district be affordable to and occupied by households with incomes at or below 100% of AMI.
  • $500 million for MassWorks, which gives municipalities and other public entities grants to support public infrastructure, economic development and job creation.
  • $15 million for a Site Readiness Fund, which will be administered by MassDevelopment and will promote site assembly, site assessment, pre-development permitting and other pre-development and marketing activities. These activities may enhance a site’s readiness for commercial, industrial or mixed-use development.
  • $15 million for an Innovation Infrastructure Fund, which will make grants and loans available to municipalities, private property owners, and business operations for design, construction and improvement of buildings and for equipment to spur innovation and entrepreneurship across the state, including co-working spaces, innovation centers, maker spaces, and artist spaces.
  • $45 million for the Transformative Development Initiative. The TDI Fund makes equity investments in major development projects in Gateway Cities. The fund also supports needed technical assistance for these municipalities.
  • $15 million for the Smart Growth Housing Trust Fund. This funds incentive payments to communities that create dense residential or mixed-use smart growth zoning districts in accordance with the Smart Growth Zoning Overlay District Act.
  • $25 million for the Workforce Housing Production Program.  The pilot program will supplement the Housing Development Incentive Program (HDIP) to encourage redevelopment of underutilized buildings in Gateway Cities.
  • Makes important reforms to the EDIP program
  • Reforms the Urban Center Housing Tax Increment Financing Zone (UCH-TIF), which authorizes cities and towns to utilize tax increment financing to encourage increased residential growth, affordable housing, and commercial growth.
  • Reforms the Housing Development Incentive Program (HDIP), which offers developers a state tax credit for substantially rehabilitating properties for lease or sale as multi-unit market rate housing in Gateway Cities, to now include new construction, as well as rehabilitation of existing structures. The bill further increases the maximum allowable credit under the program from 10% of qualifying expenses to 25% of qualifying expenses.

The Governor did veto a section of the bill opposed by NAIOP that would have created Community Benefit Districts. The proposed language created uncertainty and confusion and would have imposed fees on commercial, residential and non-profit property owners.  NAIOP applauds the Governor and the Legislature for their work on this very important bill.

Energy Bill – NAIOP Objections Removed, Commercial PACE Adopted
Another bill that emerged from conference committee on Sunday, July 31 was the energy bill, H.4568, An Act to Promote Energy Diversity. NAIOP was pleased that all of the sections the organization opposed were removed from the final bill. Those sections included: the Climate Adaptation Management Plan, which went well beyond planning and contained subjective and far reaching language that could have had extremely negative consequences for the Massachusetts economy; electric vehicle requirements as part of the building code; and mandatory energy inspections prior to the sale of a home and the creation and use of a mandatory energy score.  The legislature did adopt Commercial PACE, which is supported by NAIOP and creates a financing mechanism for energy efficiency improvements in commercial properties.

Zoning Legislation – Defeated
NAIOP was extremely pleased that the House did not take up the zoning bill that was passed by the Senate. S. 2311, An Act Promoting Housing and Sustainable Development, was supported by planners and environmental groups and strongly opposed by the real estate and business groups in the state, as well as the Mass Municipal Association. The legislation would have added expense and delay to the land development process in Massachusetts.

Wage Bill – Defeated
NAIOP and a coalition of business groups were also glad to see that the House did not support another problematic bill passed by the Senate, S.2207 An Act to Prevent Wage Theft and Promote Employer Accountability. The bill would have affected all businesses, including anyone involved in construction and development. It was a radical proposal that went far beyond what other states have done. It did not target wage cheaters. Instead, it would have targeted and punished the companies who contracted with them, even if the companies knew nothing or had no way of knowing about any wage violations.

Water Banking – Defeated
Finally, NAIOP brought together a coalition of organizations to defeat H. 657, An Act Providing for the Establishment of Sustainable Water Resource Funds. The bill would have provided communities with the authority to create water banks – essentially an impact fee that unfairly targeted new development and focused on environmental mitigation and water conservation measures rather than water infrastructure upgrades or capacity issues.

Special thanks to all NAIOP members who provided input and expertise on the wide range of issues NAIOP pursued this session. NAIOP will now begin drafting its legislative agenda for the 2017 – 2018 session by meeting with members to determine how to best advance the goals of the industry.

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