Housing Development Incentive Program (HDIP) Fact Sheet

Data provided to MassINC by DHCD as result of public records request
October 26, 2021

Bottom Line: The HDIP program is oversubscribed, with $57 million in applications pending in pipeline. This represents 41 housing projects totaling 2,276 units of housing and $706.6 million dollars of investment in Gateway Cities that could move forward immediately with adequate program funding. At the current funding rate of $10M per year, these projects may be delayed for up to 5 years and there is no funding at all available for new projects until 2027.

Policy Recommendation: Allocate at least $30 million of ARPA or budget surplus funds to clear the HDIP backlog. Going forward, increase the $10 million cap per year to $30 million.

From 2014 to this year, the HDIP program administered by DHCD has awarded $42.8 million to 35 real estate projects creating 2,028 units of housing and representing $557 million of investment in Gateway Cities. This represents a return on the state’s investment of 12 to 1. With adequate funding, HDIP could produce 10-15% of the 10,000 housing units needed to achieve the state’s annual multifamily housing production goal each year.
For comparison, the Baker Administration allocated $136 million in state and federal affordable housing tax credits this year for 28 projects in 21 communities to create 1,526 new rental units (1,346 of them affordable) and leveraging about $310 million in additional equity. Both programs are key tools in the toolbox for solving our housing shortage.
The HDIP program was created to help catalyze private housing development in Gateway Cities where market conditions create real barriers. Currently, most large new projects in these communities need state and federal affordable housing subsidies which may require hundreds of thousands of dollars per unit. On top of an existing housing stock that is already older and in many cases deteriorated, it is no wonder that poverty and racial segregation continue to be concentrated in Gateway Cities.

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