Our last journal offered thoughts on how Governor Healey can position Gateway Cities to thrive in this post-pandemic era by increasing the Housing Development Incentive Program (HDIP), investing in regional transit, and lowering commuter rail fares. Now that the administration has unveiled its first budget, our readers will want to know, how did they do? The Governor went three-for-three, though she hit with less power on RTAs and commuter rail fares. Let’s take a quick walk through our plan again, highlighting areas where the Governor excelled, and reiterating why lower commuter rail fares are especially essential to the overall strategy.

Positioning Gateway Cities as economically integrated regional hubs
Many workers commute to Boston now just once or twice each week. This durable pattern makes it crystal clear that vibrant, walkable, and more affordable Gateway Cities with transit to Boston offer an attractive residential choice, especially to those thinking about leaving the state for lower cost of living, less congestion, and a higher quality of life. By helping Gateway Cities attract these households, and retain more of their current residents, who frequently move outward to surrounding communities, Massachusetts can foster more equitable, geographically balanced, and environmentally sustainable growth patterns.

A strategy to successfully accomplish this will weave together three core policy components, such that the whole provides far more impact than the sum of the parts:

#1 HDIP for Housing production.
The first piece is housing production. Gateway Cities cannot promote upward mobility and job opportunities without a variety of housing options, especially attractive apartments, both for those who are new to these communities as well as for existing residents that are looking to upgrade their quality of living. Gateway Cities outside of Greater Boston have built few new apartment buildings over the last several decades. As we’ve argued many times, by making the numbers work in markets where development expenses exceed revenues by relatively small margins, HDIP cost-effectively stimulates production of this much-needed housing.

In a tax reform bill accompanying H. 1, Governor Healey included language that would increase the cap on HDIP to $50 million in FY 24 to address a longstanding backlog, and then provide $30 million annually each year thereafter. These provisions would allow many highly desirable projects to move forward immediately. Equally important, they would give developers confidence that sufficient HDIP funding will be available to support future projects in a timely manner.

#2 RTAs for local mobility.
The second piece of the equation is local mobility. Even smaller cities require frequent and reliable local transit to support intense urban activity without choking on congestion. With the troubles of the MBTA casting a shadow over the entire state, Massachusetts has struggled to find sufficient funding for its regional transit authorities (RTA). This means they run only a handful of routes with limited service, especially on nights and weekends.

Drawing on funds from Question 1, Governor Healey’s budget acknowledges the central role of RTAs, and provides a step in the right direction. Base funding for RTAs would grow by nearly $6 million (about 6 percent over current levels) and agencies could also seek additional resources to expand service from a new $19 million grant program. While this new grant may be an appropriate way to surface the best opportunities for expanded service, RTAs will require predictable operating funds over the long-term to improve service quality, support transit-oriented development, and build ridership.

#3 Affordable and competitively priced commuter rail.
As we have also noted again and again, the expense of commuter rail makes it an unattractive option for commuters beyond Rt. 128. The current fare structure is especially egregious from a Gateway City economic justice perspective. The majority of residents in these communities simply can’t consider the train as a regular commuting option because it costs more to ride than a luxury car. This puts many jobs with decent pay out of reach. When South Coast Rail comes online later this year, this unconscionable reality will result in limited ridership on a line that connects three large population centers (Fall River, New Bedford, and Taunton) to Boston.

Governor Healey’s budget proposal includes $5 million for one-time expenses to explore a means-tested fare program. However, there is no other details or direction in the line-item or accompanying budget brief. And this appropriation was coldly received by the MBTA board of directors. The current board has shown extremely poor leadership on this issue since taking over from the fiscal control board, which made several attempts to draw attention to fare inequities and encouraged dialogue around potential solutions.

At a time when there should be more ridership than ever, commuter rail is struggling to recover to pre-pandemic levels. The agency’s leadership appears to believe this is the new normal, rather than a testament to the MBTA’s colossal management failures. Building ridership to support more frequent and faster service is essential to positioning Gateway Cities, and Massachusetts, for long-term growth. This begins with making the service a competitively priced choice for both those with means and those without. For the good of the Commonwealth, the Healey administration and the legislature must work together to ensure that the MBTA recognizes and addresses this imperative.

The Gateway Cities Innovation Institute strengthens connections across communities and helps Gateway City leaders advance a shared policy agenda. Click here to sign up for the biweekly Gateway Cities Journal to receive updates on current policy issues impacting Gateway Cities across the state.