HOUSING DEVELOPMENT INCENTIVE PROGRAM

M.G.L. pt. Part I, tit. Title VII, ch. c. 40V

in effect

M.G.L. c. 40V, § 1 Definitions

c. 40V, § 1. Definitions Section 1. As used in this chapter, the following words shall, unless the context clearly requires otherwise, have the following meanings:— [Definition of ''Certified housing development project'' effective for tax years beginning on or after January 1, 2017. See 2016, 219, Sec. 139.] ''Certified housing development project'', the new construction or substantial rehabilitation of a housing development project that has been approved by the department for participation in the housing development incentive program. ''Department'', the executive office of housing and livable communities. ''Gateway municipality'', gateway municipality as defined in section 3A of chapter 23A. ''Housing development incentive program'' or ''HDIP'', a program designed to promote increased residential growth, expanded diversity of housing supply, neighborhood stabilization, and economic development within housing development zones in gateway municipalities. ''Housing development project'', a multi-unit residential new construction or rehabilitation project that is located in a gateway municipality and once rehabilitated, shall contain at least 80 per cent market rate units. ''Housing development zone'' or ''HD zone'', a zone designated by a gateway municipality which shall be characterized by a need for multi-unit market rate residential properties. [Definition of ''Market rate residential unit'' effective for tax years beginning on or after January 1, 2017. See 2016, 219, Sec. 139.] ''Market rate residential unit'', a residential unit priced consistently with prevailing rents or sale prices in the municipality as determined based on criteria established by the department. [Definition of ''Qualified project expenditure'' effective for tax years beginning on or after January 1, 2017. See 2016, 219, Sec. 139.] ''Qualified project expenditure'', an expenditure directly related to the construction or substantial rehabilitation of a certified housing development project, including the cost of site assessment and remediation of hazardous materials, but excluding the purchase of the property, provided, however, that: (i) the department has certified that the proposed project meets the definition of certified housing development project; (ii) prior to construction, the department has certified that all or a portion of the project costs are for new construction or substantial rehabilitation; and (iii) after the construction of the project has been completed, the department has certified that the project has been completed in compliance with this chapter and the requirements and conditions of any prior certifications. ''Sponsors'', sponsors, as defined in section 25 of chapter 23B. ''Substantial rehabilitation'' and ''substantially rehabilitated'', the needed major redevelopment, repair and renovation of a property, including site assessment and remediation of hazardous materials, but, excluding the purchase of the property, as determined by the department.

M.G.L. c. 40V, § 2 Designation of gateway municipality as an HD Zone; contents of application

c. 40V, § 2. Designation of gateway municipality as an HD Zone; contents of application [Text of section applicable to tax years beginning on or after January 1, 2021. See 2020, 358, Sec. 104.] Section 2. The department may from time to time designate 1 or more areas of a gateway municipality as an HD Zone and take any and all actions necessary or appropriate to such a designation, upon receipt of a municipal application requesting such designation and representing in its application that the municipality, based on its own independent investigation, has determined that the area proposed for designation has a need for multi-unit residential properties. The application shall include a plan that shall include a description of the activities, public and private, contemplated for such zone as of the date of the adoption of the zone plan, including information as the department may require in written guidelines.

M.G.L. c. 40V, § 3 Approval of application for tax exemption for housing development project under Sec. 59 of chapter 59

c. 40V, § 3. Approval of application for tax exemption for housing development project under Sec. 59 of chapter 59 Section 3. Under section 5M of chapter 59, the department may approve a municipality's application for a tax exemption for a housing development project located within an approved housing development zone.

M.G.L. c. 40V, § 4 Criteria for eligibility to be a certified housing project; approval of certified housing development project designation

c. 40V, § 4. Criteria for eligibility to be a certified housing project; approval of certified housing development project designation Section 4. (a) A project may be eligible to be a certified housing development project under this chapter; provided, however, that the proposed project: (i) contains 2 or more residential units; provided, however, the project may be a mixed-use development that includes commercial uses in addition to residential units; [There is no clause (ii).] (iii) is located in a designated or proposed HD zone; (iv) contains at least 80 per cent market rate units upon completion of the new construction or rehabilitation, to be sold or leased; (v) has received from the municipality a property tax exemption under section 5M of chapter 59; and [Clause (vi) of subsection (a) effective for tax years beginning on or after January 1, 2017. See 2016, 219, Sec. 139.] (vi) involves either new construction or the substantial rehabilitation of an existing property. [Introductory paragraph of subsection (b) applicable for tax years beginning on or after January 1, 2021. See 2020, 358, Sec. 104.] (b) The department may from time to time certify 1 or more housing development projects, located in HD zones designated under section 2 as certified projects under this section and take any and all actions necessary or appropriate to such a designation, upon compliance with the following: (i) receipt of a project proposal for such a designation requesting such designation from the municipality, submitted in a timely manner, in such form and with such information as the department prescribes, supported by independently verifiable information and signed under the penalties of perjury by a person authorized to bind the sponsors; [Introductory paragraph of clause (ii) of subsection (b) applicable for tax years beginning on or after January 1, 2021. See 2020, 358, Sec. 104.] (ii) receipt of an agreement executed by the municipality that is approved by the department and contains a tax exemption under section 5M of chapter 59 and this section so long as the municipality has determined and incorporated in a formal written determination, based on the information submitted with the project proposal and such additional investigation as the municipality shall make, that the project as described in the proposal and all documentation submitted with the proposal: (A) is consistent with and can reasonably be expected to benefit significantly from the gateway municipality's plans relative to the project property tax exemption; [Subclause (B) of clause (ii) of subsection (b) effective for tax years beginning on or after January 1, 2017. See 2016, 219, Sec. 139.] (B) together with all other projects previously certified and located in the same project HD zone, shall not overburden the municipality's supporting resources; and (C) together with the municipal resources committed to the project, shall, if certified, have a reasonable chance of increasing residential growth, diversity of housing supply, supporting economic development and promoting neighborhood stabilization in 1 of the municipality's housing development zones of the municipality as advanced in the proposal; and [Clause (iii) of subsection (b) effective for tax years beginning on or after January 1, 2017. See 2016, 219, Sec. 139.] (iii) receipt with such written approval by the municipality of a request for a designation of the project as a certified housing development project for a specified number of years, which shall be not less than 5 years and not more than 20 years. (c) The department shall evaluate and either grant or deny any project proposal not later than 90 days from the date of its receipt of a complete project proposal and failure to do so by the department shall result in approval of such project for a term of 20 years. Approval of a project due to the department's failure to act within 90 days shall not constitute approval by the department of any tax incentives provided under chapter 62 or 63. (d) The department may impose a fee for the processing of applications for the certification of any project under this section. [First paragraph of subsection (e) applicable for tax years beginning on or after January 1, 2021. See 2020, 358, Sec. 104.] (e) The department shall review each pending project proposal and completed certified housing development project not less than once every 2 years. The certification of a project may be revoked by the department if: (i)(A) the municipality that approved the project proposal files a petition that satisfies the authorization requirements for a municipal application or the petition of the director of the department; and (B) the department determines, after an independent investigation, that representations made by the sponsors in its project proposal are materially different from the conduct of the sponsors subsequent to the certification and such difference is found to frustrate the public purposes that the certification was intended to advance; or (ii) the project no longer meets the criteria in this section. Upon revocation, the commonwealth and the municipality may bring a cause of action against the sponsors for the value of any economic benefit received by the sponsors prior to or subsequent to such revocation. Under this section, revocation shall take effect on the first day of the tax year in which the department determines that a material variance commenced. The commissioner of revenue may, as of the effective date of the revocation, disallow any credits, exemptions or other tax benefits allowed by the original certification under this section. The commissioner shall issue regulations to recapture the value of any credits, exemptions or other tax benefits allowed by the certification under this section. [Third paragraph of subsection (e) applicable for tax years beginning on or after January 1, 2021. See 2020, 358, Sec. 104.] Annually, on or before the first Wednesday in December, the department shall file a report detailing its findings of the review of all certified housing development projects that it evaluated in the prior fiscal year to the commissioner of revenue, to the joint committee on revenue and the joint committee on housing and community development. The report shall include, but not be limited to: (i) a list of municipalities with approved HD zones; (ii) a list of housing development projects that have received certification; (iii) information about each housing development project, including the site address, project sponsor, range of rents of the residential units, type of residential units, number of each type of residential unit, number of affordable rental units for persons whose income is not more than 60 per cent of the area median income and the number of affordable owner-occupied units for persons whose income is not more than 80 per cent of the area median income; and (iv) the total amount of qualified project expenditures for which a tax credit was issued or reserved pursuant to section 5 for each housing development project, the year the credit was issued and the completion or estimated completion year of the housing development project.

M.G.L. c. 40V, § 5 Award of tax credits to sponsor of a certified project

c. 40V, § 5. Award of tax credits to sponsor of a certified project [Introductory paragraph effective for tax years beginning on or after January 1, 2017. See 2016, 219, Sec. 139.] Section 5. The department may award tax credits available under subsection (q) of section 6 of chapter 62 or section 38BB of chapter 63 of not more than 25 per cent of the cost of qualified project expenditures allocable to the market rate units in a project, as determined by the department, to a sponsor of a certified housing development project. The amount and duration of the credit awarded shall be based on the following factors: (i) the need for residential development and diversity of housing supply in the gateway municipality; [Clauses (ii) and (iii) of the introductory paragraph effective for tax years beginning on or after January 1, 2017. See 2016, 219, Sec. 139.] (ii) the extent to which the certified housing development project will encourage residential development, expansion of diversity of housing supply, support neighborhood stabilization, and promote economic development in the zone; and (iii) the percentage of market rate units contained in the certified housing development project. [There is no subsection (a).] [Subsection (b) effective for tax years beginning on or after January 1, 2017. See 2016, 219, Sec. 139.] (b) The department may, limit any incentive or credit available to a certified housing development project under subsection (q) of section 6 of chapter 62 and section 38BB of chapter 63 to a dollar amount or in any other manner deemed appropriate by the department.

Source: Massachusetts General Court (malegislature.gov)URL: https://malegislature.gov/Laws/GeneralLaws/PartI/TitleVII/Chapter40VFetched: 10/20/2026