Committee updates members on H.775, a rural finance bill with five housing incentives

The Committee on General & Housing met to discuss H.775, the rural finance bill designed to help developers build modest housing projects in small towns.

Mark, who opened the meeting, described H.775 as five related measures meant to lower costs and risks for small projects outside major population centers. He said the package includes a tax-stabilization pilot, changes to special-assessment financing, use of the treasurer's local-investment authority for low-interest loans, a prefabrication pilot involving Huntington Homes, and authority for the Department of Housing and Community Development (DHCD) to advance rehab funds to smaller landlords.

On the tax-stabilization pilot, the committee discussed a program targeted at up to 300 units in small towns (the transcript describes the towns as "5,000 or [sic]") and cited a maximum project size mentioned in the discussion of roughly 16 units. Under the pilot as described in the meeting, qualifying buildings would pay property taxes based on the pre-development level for a period described as 10 years, phasing to full tax liability by the end of that term. "For qualifying projects under this pilot program, the buildings that are built don't pay more property taxes than was originally paid... for the duration of the tax stabilization period, which is 10 years total," Mark said.

The committee also reviewed a change to how special-assessment districts are financed. Mark explained the bill contemplates situations where developers use revenue bonds backed by the development rather than the full faith and credit of the town; in such cases, the town-wide vote currently required for assessment-backed bonds would not apply because bondholders would look only to project revenues for repayment.

Members discussed the treasurer's local-investment authority, which the treasurer previously described as the ability to use a portion of the cash balance (referred to in the discussion as "10%") to make low-interest "soft" loans (on the order of 1–3 percent) to help finance affordable and senior housing. Mark said the treasurer and staff had met with Ways and Means and were generally supportive of a proposal to direct interest earnings to reimburse the Education Fund for impacts during the pilot period while allowing the program to operate.

Mark summarized a prefabrication pilot that would coordinate small developers' orders into bulk purchases through Huntington Homes. "If we can do bulk ordering, maybe we can get the price down," he said, and the bill would include a credit facility to guarantee Huntington Homes receives payment for factory-built units.

On rehab financing, Mark said the bill would let DHCD advance funds to small landlords to complete rehabs up front rather than requiring owners to front all costs and seek reimbursement later. The transcript mentioned repayment caps, but the dollar amounts reported in the meeting were not clear in the record and are therefore not specified here.

The committee discussed procedural next steps: Mark said staff, the Joint Fiscal Office (JFO), and legislative counsel would draft language to address Ways and Means' revenue concerns and to outline the temporary mechanism for reimbursing the Education Fund during the pilot. He said he hoped to have draft bill language returned to the committee in the coming weeks for formal consideration.

The meeting did not record any formal motions or votes on H.775 during this session; members agreed to continue drafting and return language for review.