Governor Charlie Baker and Lieutenant Governor Karyn Polito just filed the administration’s Economic Development bill with $1 billion to be invested over the next five years into economic development, housing and job training across the Commonwealth.
A core principal of this legislation is to take various existing programs and make enhancements to them so that they become more widely used, more effective, recapitalized, and more user-friendly:
- MassWorks ($500 million proposed capital authorization): Reauthorizes a capital grant program that provides municipalities and other public entities with public infrastructure grants to support economic development and job creation.
- Brownfields Redevelopment Fund ($75 million proposed capital authorization): Moves funding for the state’s Brownfields Redevelopment Fund to the capital program, providing a reliable long-term funding stream for a fund that is the Commonwealth’s primary tool for facilitating the redevelopment of contaminated properties.
- Housing-Related Tax Increment Financing: Supports housing production in town centers by reforming a seldom-used local-only smart growth tax incentive program, removing onerous regulations, and allowing communities to set their own affordability requirements.
- Housing Development Incentive Program (HDIP) Reform: Supports the development of market-rate housing in Gateway Cities by allowing credits to support new construction, and by raising the formula that sets housing development incentives.
- I-Cubed Reform: Reforms the I-Cubed infrastructure program by removing unnecessary program requirements (such as eliminating the per-municipality cap on the number of projects that may participate and raising the aggregate limit of funds from the I-cubed program that may be used in any one municipality from 31% to 50%) building flexibility into the program, and aligning program requirements with the demonstrated project pipeline.
- Economic Development Incentive Program (EDIP) Reforms: Builds accountability in the state’s primary job-creation incentive program by strengthening the link between the issuance of tax credits, and job creation that would not otherwise occur; adds flexibility to the incentive program by eliminating obsolete formula-driven incentive categories, and by creating a new Extraordinary Development Opportunity designation.
In addition, the bill creates two important provisions:
- Site Readiness Fund ($25 million proposed capital authorization): Advances regional job creation by creating a new fund for site assembly and pre-development activities (including site assessment and cleanup) that support regionally significant commercial or industrial development opportunities.
- “Starter Home” Zoning: Incentivizes the creation of smaller, denser, and more affordable single-family homes by creating a new starter home option under the Chapter 40R smart growth housing program. These projects will also allow the municipality to be eligible for school reimbursements under Chapter 40S.
- Parking Management Districts: Aligns local parking policies with broader economic development priorities by enabling municipalities to opt into creating demand-based parking fees, and allowing parking fees to support capital improvements in designated districts, like downtowns.
In addition, there are new programs with a Massachusetts Innovation Initiative, Workforce Development, and Economic Competitiveness.
We are very supportive of the bill, which contains many of NAIOP’s priorities. This legislation will be one of NAIOP’s top priorities for the remainder of the legislative session.