Housing Supply Solutions in Massachusetts

The Massachusetts Mortgage Bankers Association (MMBA) is extremely concerned with the lack of affordable housing in Massachusetts. The number one issue facing employers right now is that housing is unaffordable.  It is making recruiting and retention of the workforce very difficult.  In order to keep the economy moving forward all of the state's leaders recognize that housing production needs to be ramped up.  Not just in Boston but more so in the cities and towns in the greater Boston area.   

Historically the state was creating about 30,000 new units per year.  In the last 10 years this figure has dropped by half.  As a result the state has experienced a severe shortage of new housing which has driven up prices. The average age of a first time buyer in Massachusetts has risen to 32 which is among the highest in the nation.  

Below are federal and state initiatives and programs that the MMBA has been involved with.   

Federal Affordable Housing Initiatives:

The MMBA has attended and supported the MBA National Advocacy Conference for many years and have developed relationships with our federal legislators. The lack of affordable housing has been a topic of conversation during many of our visits. Recently Senator Warren filed the American Housing and Economic Mobility Act of 2018 which the MMBA is currently reviewing and plans to submit commentary to Senator Warren's office.  

State Legislative Initiatives:

On December 11, 2017 Governor Charlie Baker filed legislation "An Act to Promote Housing Choices" which the MMBA strongly supported. Under this bill, cities and towns could adopt new local zoning standards by a simple majority vote, as opposed to a two thirds vote. This change would make it easier for municipalities to ease zoning laws that regulate multifamily housing development and parking, potentially resulting in a growth of the construction of new housing and the services they require. It is estimated that this initiative could spur significant housing production, and provide municipalities with tools and incentives to drive the creation of 135,000 new units by 2025.  

This bill has not yet passed and it is extremely doubtful that it will during 2018, because the Legislature is not in "formal" session.  Our legislators will continue to meet "informally" which means that only non-controversial items are taken up and that any one member of the House and Senate can object to any item. The Massachusetts Municipal Association and the Development/Real estate community are both supported the bill. Unfortunately the bill was bogged down by a small group of legislators who wanted to expand the bill and add items on which here was not consensus. MMBA is hopeful that this legislation will be refiled in 2019.  

The MMBA works closely with our other state associations including Massachusetts Bankers Association, the Massachusetts Realtor Association, The Real Estate Bar Association and the Cooperative Credit Union Association to advocate collectively on issues impacting affordable housing.       

CRA for Mortgage Lenders:

Massachusetts is the only state in the country where certain mortgage lenders are examined for compliance with the Mortgage Lender Community Investment (MLCI) regulation - also known as CRA for mortgage lenders. Mortgage lenders originating 50 or more HMDA reportable loans in Massachusetts are assessed on their record of meeting the credit needs of the Commonwealth, including low and moderate income neighborhoods and individuals when originating residential loans and acquiring loan portfolios within the Commonwealth. Regulations were first promulgated in 2007.

The Changing Patters XXIV annual report was issued in January 2018. This report is prepared for the Massachusetts Community & Banking Council (MCBC) and it analyzes HMDA data and provides information on patterns of mortgage lending in the City of Boston, in Greater Boston, in Massachusetts, and in thirty-six large cities and towns. One of the conclusions in the most recent report is that there has been steady improvement in the performance of Licensed Mortgage Lenders and in 2016 they out-performed Massachusetts banks and credit unions. http://mcbc.info/wp-content/uploads/2018/01/CP24ReportFinalJan2018.pdf  

Mortgage lenders are subject to a lending test which includes evaluating innovative or flexible lending products which benefit LMI borrowers and a service test which evaluates Community Development Services. Community Development Services include financial literacy education initiatives targeted to LMI individuals; first-time homebuyer initiatives; foreclosure prevention counseling; financial education for LMI individuals; and/or technical assistance to LMI community organizations serving affordable housing needs in a leadership capacity. Many of our non-profit organizations have reported a much higher participation by mortgage lenders since this regulation was implemented.

Affordable Housing Education for Realtors and Loan Originators:

Massachusetts was one of the four states to participate in the Homeownership Collaborative in partnership with the Mortgage Bankers Association, The National Housing Resource Center and the National Association of Realtors. As a result of the summit held in Brockton in June 2017, the MMBA has been working with the Massachusetts Association of Realtors to create a continuing education course for licensed real estate agents and mortgage loan originators that would go into detail on the affordable counseling process, available affordable loan products and the availability of down payment assistance for homebuyers. We hope to release this continuing education course in late 2018/early 2019.