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Massachusetts Legislation to Boost ‘starter Home’ Stock Would Subsidize Construction

A proposal by Foxborough’s state senator that aims to help middle income families faced with the “nightmare” of trying to buy a home in the Bay State by subsidizing the production of so-called starter homes is one step closer to becoming law.

As heard by the Joint Committee on Housing last week, an “Act establishing the missing-middle starter home development and home ownership program” would create a new state managed program and “Starter Home Development Fund” to provide subsidies to housing developers building homes for families with incomes between 80% and 120% of the area median.

“For many working-class Massachusetts residents, the idea of buying a home on middle-income wages and achieving the American dream has turned into a nightmare,” state Sen. Paul Feeney said in a statement. “Even finding a home in today’s market that isn’t oversized and overpriced, especially for first time buyers has become nearly impossible.”

According to Feeney, it could take more than a decade for a family with “modest” expenses to save up the 20% down payment required to purchase an average priced Massachusetts home. Feeney says the state must take “bold and deliberate steps” to increase the supply of affordable houses in order to “make homeownership a reality for our ever-shrinking and missing-middle class.”

Feeney’s bill would allow a subsidy of up to 35% of construction costs for a starter home, defined by state law as a house that’s less than 1,850 square feet, and allow a developer to use remaining funds to lower the sale price for a buyer after constructing a starter home. The law would require the subsidy to stay with the home for 99 years to lower the cost for future buyers.

“We are at a critical time in the Commonwealth’s housing crisis, and we must act swiftly to address this gap in middle-class housing as young people and families contemplate their futures in Massachusetts. Buying a home should not be a luxury reserved for the wealthy, and I am eager to continue advocating for the needs of the ‘missing middle’ this legislative session,” Feeney said.

The bill would need to be taken up by the full Senate and approved by the House before it could be sent to Gov. Maura Healey for her signature.

Massachusetts is short of about 100,000 homes, according to a report by nonprofit Up for Growth from 2022. Boston alone accounted for more than 70,000 of those missing residences.

The state’s deficit of housing units needed to support the population rose by nearly 100% between 2012 and 2019, detailed in the organization’s 2022 Housing Underproduction in the United States report. That report showed that Massachusetts is 11th among states in terms of housing underproduction.

Source : BostonHerald