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The Senate budget debate next week could determine how competitive Gateway Cities will be in the post-pandemic economy. At a key moment when housing and transportation investments could help make these communities more attractive for an age of remote work, the danger of missing out on the opening and backsliding is real.

Housing: Housing Development Incentive ProgramMassINC and economic development leaders have been banging the drum for years now that Gateway Cities are ready and able to build much of the housing supply that our state needs to stabilize prices. However, the only tool designed to unlock that investment is the Housing Development Incentive Program (HDIP), which is woefully underfunded and has a six-year backlog.

Sen. Eric Lesser has filed amendments#212and#213to address the issue. The first would triple the annual cap for the program from $10 million to $30 million, something that Gov. Baker has already proposed in his economic development bill. It would also raise the per-project limit from $2 million to $3 million to take into account rising costs since the program was established. Lessers second amendment would allocate $57 million in operating funds to address the existing backlog of HDIP projects waiting to be built.

Gateway City legislators made a valiant effort to pass similar amendments in the House budget debate, but unfortunately, they did not prevail. This may be because the House intends to follow Gov. Bakers lead and take the issue up in the economic development bill. However, the budget is a more favorable vehicle because it would increase the cap for FY 23, whereas changes in the economic development bill would not be effective until FY 24.

Fully funding the HDIP backlog would pump over $700 million in project investment into Gateway Cities even before accounting for permanent jobs, residents, and positive impact on local businesses. MassINC estimates that tripling the program on an ongoing basis would generate over 10,000 units of housing and nearly $4 billion in private investment over 10 years.

Transportation: Regional TransitGov. Bakers budget level-funds the regional transit authorities (RTAs) at $94 million, which in this inflationary environment means a significant cut. The problem is exacerbated when accounting for the driver shortage that has already forced service reductions at many agencies. The RTA Advocacy Coalition (RTAAC)recommendsproviding at least $7 million in additional base funding to compensate for the effects of inflation and provide the hiring incentives and workforce training needed to deliver full service.

Unfortunately, the House Ways and Means budget mirrored the Governors proposal. And despite more than half of the chamber signing on to amendments to boost the bottom line, they were not adopted in the final House budget.

Additionally, Amendment#857by Sen. Adam Hinds would meet a recommendation in the 2019 Report on RTA Performance and Funding to create a dedicated source of revenue for RTAs by carving out a portion of the proceeds from corporate excise taxesperhaps its the ultimate solution to this annual dance.

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Senate budget key to future of housing and transportation in Gateway Cities - massinc.org