Governor Baker Signs Economic Development Legislation
$626 million capital bill focuses on housing, business competitiveness, and community development; Most significant reforms to zoning in decades
BOSTON – Today, Governor Charlie Baker, Lt. Governor Karyn Polito, and Housing and Economic Development Secretary Mike Kennealy joined with legislators, municipal leaders, and other stakeholders in a virtual ceremonial signing of House, No. 5250, An Act Enabling Partnerships for Growth.
The new law provides a five-year roadmap backed by more than $626 million in capital authorizations and key policy provisions to support economic growth and improve housing stability across Massachusetts. In 2019, the Baker-Polito Administration announced a new economic development plan titled Partnerships for Growth: A plan to enable the Commonwealth's regions to build, connect and lead. The plan focused on four key pillars: responding to the housing crisis; building vibrant communities; supporting business competitiveness; and training a skilled workforce. The framework outlined in that plan guided the approach taken in the bill filed by the Governor in early March 2020.
“This new law provides tools needed to respond to both the challenges posed by COVID-19 as well as those that existed before the virus took hold, especially the housing crisis. We are pleased to implement these policy changes, especially the Housing Choice provisions we proposed more than three years ago to make it easier to increase production and zoning reforms in communities that want and need it,” said Governor Baker. “While we continue to make progress we still have much work to do in the months ahead to help businesses recover, get people back to work, and restore the Commonwealth’s economic vitality.”
“With gratitude to our partners in the Legislature, the many municipal leaders, and the business community that formed a broad coalition of support, today we have a law that reflects the urgency of the moment and that is also focused on driving the changes we need at the fundamental level going forward,” said Lt. Governor Polito. “I look forward to addressing key challenges including stabilizing the economy, strengthening our downtowns and town centers, and improving housing accessibility and affordability now and long after the pandemic has passed us.”
This economic development package builds on the Commonwealth’s dynamic business ecosystem, which is core to the continuing success of the Massachusetts economy. The bill directs capital dollars to support advanced manufacturing and targets new and emerging opportunities to further strengthen the economy’s foundation. The new law also dedicates key resources for micro-businesses and low-to-moderate income and minority entrepreneurs for starting or expanding a business, as well as grants to community development financial institutions and community development corporations with a focus on supporting women- and minority-owned businesses.
To continue to grow Massachusetts’ stock of housing, combat the long-standing housing crisis, and reenergize neighborhoods and communities, this bill provides significant funding for:
- Neighborhood Stabilization to return blighted or vacant units back to productive use, including in communities disproportionately affected by COVID-19;
- Transit-Oriented Housing Development to produce new, high-density, mixed-income housing near major transit nodes like Commuter Rail stations;
- Climate-Resilient Affordable Housing to build affordable, multi-family housing developments that are equipped to better respond to climate change and reduce greenhouse gas emissions;
- Underutilized Properties to help turn empty or underutilized locations into active commercial space, housing, or green or civic space;
- A Rural and Small Town Development Fund for community and infrastructure development needs in small towns and rural municipalities, to support projects with significant community impact; and,
- Regional and Community Assistance for planning initiatives undertaken by individual municipalities, joint cities or towns, or entire regions, to address shared goals related to community development, housing production or other issues of local and regional concern.
The new law also ushers in key changes necessary for increased housing production with targeted zoning reforms that better enable municipalities to adopt the zoning measures needed to meet the state’s housing needs. An expansive coalition of advocates, organizers, citizens, elected officials, and others worked alongside the Administration over the past few years to get these reforms across the finish line. Known as Housing Choice, the reforms remove the requirement for a two-thirds supermajority vote and allow cities and towns to adopt zoning best practices related to housing production by a simple majority vote.
“From the Berkshires to Cape Cod, the long-standing housing crisis, created by restrictive state zoning rules, has been slowing economic growth, driving up housing costs for families, and impacting the ability of companies to attract and retain talent,” said Secretary Kennealy. “We are thrilled that Housing Choice, the most significant zoning reform in decades, is now law, beginning the process of removing discriminatory barriers to housing, empowering cities and towns to build the housing they want and need, and moving us closer to our goal of 135,000 new units by 2025.”
“This legislation will help make Massachusetts’ cities and towns more affordable and welcoming to all, enabling new housing opportunities and unlocking growth and job opportunities for all of our communities,” said Salem Mayor Kim Driscoll. “In Salem it will finally, we hope, make possible long-sought after measures to expand our amount of affordable, accessible housing for Salem residents. I’m grateful to the Baker Administration for making this a priority and continuing to push for it over the past two years, and to the legislators who were partners in the effort to get this important work done for the people of our Commonwealth.”
"The Massachusetts Municipal Association applauds Governor Baker and his administration along with the leadership of the House and the Senate for their collective work to pass this critical legislation,” said Adam Chapdelaine, Arlington Town Manager and President of the Massachusetts Municipal Association. “Most notably, the MMA is grateful for the inclusion of the Housing Choice provision as the need for expanded housing opportunity has only grown more necessary during this pandemic."
“I am thrilled this legislation is now law so that we can double down on our efforts to boost to our economy as it recovers from the dire effects of COVID-19,” said Senate President Karen E. Spilka. “The Legislature recognized the need to be bold when addressing the challenges facing restaurants and small business owners, cultural attractions and other key sectors that will help keep our economy strong. I am particularly pleased this law includes the long sought-after housing production reforms that the Senate has supported for years. I look forward to working with the Administration and my colleagues in the House in ensuring these critical supports are distributed to those most in need.”
“This new law is a strong first step on our path to economic recovery from this pandemic,” said House Speaker Ronald J. Mariano. “This legislation provides immediate relief to those sectors of the economy hit hardest by the pandemic, while making key policy changes, particularly in housing, that will fuel future economic growth. I want to thank Chairman Michlewitz and the House conference committee members for their hard work on this legislation, and Senate President Spilka and our partners in the Senate for their commitment to passing a robust economic aid package.”
“The economic development bill will help the Commonwealth rebuild from the devastating effects that the COVID-19 pandemic has brought,” said Representative Aaron Michlewitz, Chair of the House Committee on Ways & Means, and lead negotiator for the House on the Conference Committee. “This legislation supports our travel and tourism industry in a number of different ways, especially for our struggling restaurants. It will also encourage the Commonwealth’s housing production needs by simplifying zoning laws, encourage job creation in rural areas, and authorizes over $626 million in targeted capital investments that will reach every corner of Massachusetts. I want to thank our partners in the Administration and my colleagues in the Legislature for their input and hard work on making this bill a reality.”
“Even before COVID-19, we knew how strong our Commonwealth was economically but also where we were falling short. We knew that despite this being a great state, people could not afford to live here, too many of our employers couldn’t find skilled employees, and too many of our residents couldn’t find high-paying work,” said Senator Eric P. Lesser, the lead negotiator for the Senate on the Conference Committee. “The heart of this legislation was about closing those gaps, and all of those issues went into hyper-drive as a result of COVID-19. This bill is going to plug needed gaps for struggling businesses to get them to the other side of recovery, help over one million student loan borrowers in Massachusetts with new consumer protections, and lay down the markers that we need to have a more equitable and far-reaching recovery into the future.”
With the simple majority threshold, municipalities that pursue rezoning efforts, including those enabling new housing near transit or in downtowns, would gain approval if they achieve more than 50 percent of the vote, as opposed to the current supermajority of more than two-thirds. Prior to this historic change in law, Massachusetts was one of only a few remaining states to require a supermajority to change local zoning.
Zoning changes that promote best practices for housing growth that would qualify for the simple majority threshold include:
- Building mixed-use, multi-family, and starter homes, and adopting 40R “Smart Growth” zoning in town centers and near transit.
- Allowing the development of accessory dwelling units, or “in-law” apartments.
- Approving Smart Growth or Starter Homes districts that put housing near existing activity centers.
- Granting increased density through a special permit process.
- Allowing for the transfer of development rights and enacting natural resource protection zoning.
- Reducing parking requirements and dimensional requirements, such as minimum lot sizes.
