We're pleased to share the publication of MassINC and P2 Advisors' Community Capital: A Study of the CDFI and CDC Ecosystem in Massachusetts. This new study explores small business lending services provided by federally certified Community Development Finance Institutions (CDFIs) and state certified Community Development Corporations (CDCs). It outlines the rich history of community finance institutions in the Commonwealth, as well as the opportunities for (and barriers to) their expansion. The report offers a cross-sector strategy to capitalize the community finance sector and grow the impact of CDFIs and CDCs in Massachusetts.

Please click here to read the full report.

On June 13^th, the Healey-Driscoll Administration released its Fiscal Year 2025-2029 Capital Investment Plan, along with its Fiscal Year 2025 Capital Budget. The Executive Office of Housing and Livable Communities (EOHLC) FY25 budget of just under $400 billion is an increase of 30% from FY24.  MACDC created this spreadsheet, which highlights the key line items in the FY25 Housing Budget, along with selected economic development programs.

In reviewing the spreadsheet, you can focus on columns b, c, and d- which compares the budget from Fiscal Years 2023 through 2025. Row 48 shows the totals for the private housing programs used by CDCs and other developers, while Row 49 pertains to the budget for public housing. For the private housing bond-funded programs, the FY25 amounts are 26% higher than the FY24 amounts, and almost a 59% increase from just two years ago! We appreciate the increase in capital spending on affordable housing by the Administration.

The one major disappointment was that, under the FY25 Economic Development Capital Budget, there is only $2.5 million to recapitalize the Brownfields Development Fund, despite the letter we sent in early April to the Governor requesting $10 million in FY25. Furthermore, the increased amounts for affordable housing occur in an environment of rising construction costs and increased demand for limited funding resources.

Nonetheless, the capital budget increases reflect the success of our collective and sustained advocacy. A significant reason is the access we have to Secretary Augustus, through quarterly meetings of the MACDC Board with the Secretary. We also advocate, on our own and in coalition with others, for increased funding levels for the bond-financed housing programs reflected in the capital budget to address the state’s affordable housing crisis. This advocacy has many manifestations: on Lobby Day, through CDC Donuts with Delegates meetings, through MACDC’s presence on Beacon Hill, and through mobilizing MACDC Members to contact their legislators in support of bills and budget items.

For questions about the FY25 Housing Capital Budget, feel free to reach out to Don Bianchi, MACDC’s Director of Housing, at donb@macdc.org.

The affordable housing crisis facing the commonwealth’s residents is pervasive and multi-dimensional. To address it in a comprehensive manner, we need to be persistent and prioritize the needs of our most vulnerable neighbors.   

Massachusetts is the third-most expensive state in which to rent, as the fair market rent for a two-bedroom apartment of $2,165 requires an annual household income of more than $86,000 to afford. The median home price is more than $600,000.

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The Community Investment Tax Credit:

A Report on Impact in 2022

Since its inception in 2014, the Massachusetts Community Investment Tax Credit (CITC) program has been an integral and reliable source of funding for Community Development Corporations (CDCs) across the state. In 2022, CDCs raised over $16 million to support their activities through this program.  The CITC program provides an avenue of fundraising for CDCs that allowed for the growth and adaptation of programs across the state in response to the most pressing needs of their communities. Below are a few of the most noteworthy ways in which CITC made a difference in 2022.

Every year CDCs commit themselves to gather data and report on the six main aspects of their work: community leader engagement; families supported; homes built or preserved, job opportunities created or preserved; small business entrepreneurs assisted; and funds invested by CDCs in local communities. This invaluable data provides a unique window on the multiple in which CDCs respond to the most pressing needs of their constituents.

In Calendar Year 2022 CDCs:

• Engaged 1,640 community leaders
• Created or preserved 1,476 homes
• Created or protected 6,100 jobs
• Provided technical or financial assistance to 1,846 entrepreneurs
• Provided some form of support to 84,265 families
• Invested more than $1.6 billion in the communities they serve

CDCs also measure their impact by tracking increases in their capacity in three main areas: staff growth; program expansion; and investment in infrastructure improvements.  CITC has contributed to increased CDC impact by making possible impressive growth in each of these areas.

Expanding Staff Capacity:

The ever-growing demand for CDC services stretches the capacity of CDC staff teams. New investments made possible by CITC have allowed many CDCs to expand staff capacity in response to expanded demand from community residents.  In 2022 89% of CDCs reported that they were able to expand their staffing. Because of the lack of restrictions on resources provided through CITC, CDCs are able to add staff in areas of highest need. The agility provided by CITC was particularly important during the difficult times of the pandemic, and it remains a key contribution of the program as agencies slowly resume traditional patterns of programming.

Expanding or Adding Programs:

CITC also allowed many CDCs to expand existing programs and, in some cases, add new programs in response to community needs. According to data collected for 2022, 70% of CDCs were able to either add additional programs to their repertoire or expand upon their existing programs in the face of growing needs in their communities. During the same period, more than two-thirds of CDC’s provided affordable housing in one manner or another, speaking to the ever-growing housing affordability crisis across the state.

Improving Technological, Physical, and Human Infrastructure:

In 2022 CDC's were able to make critical improvements in their technological, physical, and human infrastructure. It is this infrastructure that allows agencies to meet the needs of their community members. Although the pandemic has been declared over, the need for virtual counseling/coaching remains high, meaning that CDCs still need to be thinking about online security and related technical issues. In 2022, almost 40% of CDCs were able to invest in communications system upgrades to better serve their clients and community members. These upgrades have also supported the continuing professional development of their teams by allowing staff to take advantage of a wide range of training opportunities.

In addition, 31 CDCs expanded or added new community engagement activities in 2022, ranging from increased Board of Directors engagement and diversity to increased volunteerism and community outreach. When the legislation creating CITC was adopted in 2012, CDCs across the state knew that this program would open new opportunities to them and those they serve. The actual results of this unique initiative have, however, exceeded even their most optimistic expectations. As a program leveraging public and private support to address critical community needs, CITC strengthens a set of dynamic bedrock institutions whose collective mission is to ensure that all Massachusetts residents have an opportunity to thrive.

On June 27th eight individuals took a trip to the Hilltowns to learn about the health related work happening out of Hilltown CDC and in the surrounding communities. This was the second time the Health Equity Committee took a trip to learn hands-on about important work going on throughout the state. This trip was largely coordinated in collaboration with Joan Griswold who is Hilltown CDC’s Rural Public Health Project Manager – big thank you to Joan!

We began the day by meeting up for a weekly walk in Cummington. This walk used one of Hilltown CDC’s walkability maps that they designed with funding from DPH’s Community Health Fund. Hilltown CDC came up with 9 maps for walks around the Hilltowns and used the creation of these maps as a jumping off point for advocacy regarding creating more walkable areas (e.g., installing crosswalks). This advocacy is being funded by MassDOT’s Complete Streets program. This walk was open to the community but aimed at elderly Hilltown residents. While safe, much of the walk was in areas without sidewalks, making clear the need for such maps. If you’re interested, you can check out the walking map here. The walking maps project was funded via a grant from HRIA (Health Resources in Action) and it has allowed engagement with partners including, Healthy Hampshire, Walk Boston and MADOT to increase the safety for all modes in the Hilltowns. A small grant from American Walks has allowed us to walk in a couple of different Hilltowns who have created the maps. Hilltown CDC held these events to encourage anyone from the town, not just elders, to come out and walk!

We then met up at Hilltown CDC in Chesterfield where we chatted a bit about their work. Dave spoke about the ways in which the Hilltown CDC has been supporting small businesses. Here is an example of one of their recent projects.

Next, we took off for Sawyer farm in nearby Worthington MA where Hilltown CDC supports a Mobile Market where we met Hunt, Director of Community Programs and Hannah the farm manager, and Lincoln, the farm owner. This farm was very rural – think no cell phone service, let alone Broadband access. We learned that the majority of Mobile Market participants are SNAP recipients and that the Mobile Market is the only establishment within about a 30-mile radius that accepts SNAP benefits. The market also has the option for customers who can afford to supplement others’ groceries to “pay it forward” as part of their transaction. Hunt said this was a popular option and allowed the community to support one another. We learned that while much of the produce comes from the farm itself, they also source from other local farms, providing an important source of income for those farms. This week they will be kicking off a home delivery service which they emphasized is unique and not to be taken for granted in the Hilltowns. The home delivery service also allows for increased efficiency because the market workers can pick up produce from local farms while making deliveries. This is important because many of the local farms are small, meaning that otherwise picking up or dropping off small amounts of produce would not be efficient for either the market workers nor the farmers. They told us that 85-90% of the profits go directly to the farmers – which is significantly higher than other models.

Still on the farm, we next trekked up to the clover fields. The clover was being used as a cover crop for different vegetables. In addition to growing vegetables, the farm is engaged in doing trials around sustainable agricultural practices. While Lincoln explained that they have been experimenting with sustainable agriculture at Sawyer for a long time, they are now partnering with other farms to investigate what this could look like for different crops, in different regions, etc. in order to scale up this work. In order to do this work, they are partnering with various universities and an organic farming organization. Lincon showed us how they had different experimental and control patches of crops to better understand the best and most sustainable technology.

As we were leaving the farm, we learned that the next visitor coming up after us was State Representative Lindsay Sabadosa who represents part of Hampshire County. She had been invited to take a farm tour to better understand and communicate the importance of maintaining state earmarks for sustainable agriculture projects, like the one we were visiting.

After enjoying lunch together, participants went their separate ways, agreeing that we were able to learn so much hands-on that we could not have learned on Zoom!

Is there exciting health-related work going on in your community? Please email me at elanab@macdc.org if you’d like us to consider a health equity field trip to your area!

The Massachusetts Legislature is considering legislation (S. 1779 and H. 2724) to increase the $10 million state tax credit cap for the Housing Development Incentive Program (HDIP) to $57 million in FY2024, and then to $30 million per year thereafter. If enacted, this legislation will also increase the maximum State credit from $2 million to $5 million per project. MACDC believes that the highest priority for housing policy in Massachusetts is the production and preservation of affordable homes, both rental and homeownership. Before we consider expansion of the State tax credit for HDIP, we need to reform the program to ensure that all projects receiving these credits include affordable homes.

HDIP, established by M.G.L. Chapter 40V, caps affordability at not more than 20% of the units in a project. It provides two tax incentives to developers to undertake new construction or substantial rehabilitation of properties for lease or sale as multi-unit market rate housing:

· A local option real estate tax exemption from all or part of the increased property value resulting from the improvements; and

· State tax credits, currently up to $2 million per project, for Qualified Project Expenditures that are awarded through a rolling application process.

For context, in FY2023, the Baker Administration’s Capital Budget for affordable housing was just over $150 million—a significant amount, to be sure, but nowhere near what we need to meet our affordable housing needs in Massachusetts. MACDC supports the goal established by Citizens Housing and Planning Association (CHAPA), to create 40,000 affordable (publicly subsidized) homes, and an additional 20,000 homes that are deeply affordable, including homes affordable to households with housing vouchers and households with incomes below 30% of Area Median Income (AMI), by 2030. To reach this ambitious goal, we need to take advantage of every opportunity to create affordable housing.

A December 2022 Report by the Massachusetts Law Reform Institute (MLRI) shines light on the real impact of HDIP. According to the Report, as of August 2022, 61 HDIP projects (4,063 units) in 18 cities have received credit awards or reservations totaling $89.4 million. Most projects are 100% market rate and only 2% of the units overall are or will be affordable—but even those units, often targeted to households with incomes at or below 80% of AMI, are too expensive for the low-income residents facing the highest cost burdens.

We simply cannot afford to spend $30 million of our annual State housing dollars, equal to one-fifth of the current year’s housing capital budget, on market-rate housing. This is true whether we are talking about direct subsidy or tax credits. A strong case can be made to use a reformed HDIP to support housing in Gateway Cities with a mix of incomes.

Fortunately, there is legislation to do just that. S.870 by Senator Jamie Eldridge, “An Act to Improve the Housing Development Incentive Program,” would require at least 20% of the units in a HDIP Project to be permanently affordable to households with incomes below 50% AMI for rental units, and below 80% of AMI for homeownership units. It would also make other improvements to HDIP, such as requiring the Department of Housing and Community Development (DHCD) to publish and use an HDIP credit allocation plan for scoring and evaluating HDIP applications. Such a plan would be similar to the Qualified Allocation Plan (QAP) DHCD publishes to guide evaluation of projects using the Low-Income Housing Tax Credit.

Let’s make HDIP a true mixed-income program for Gateway Cities, before we consider spending more limited state dollars on a program that is not adequately addressing the crisis in housing affordability in Massachusetts.