Housing, Part II

Solving the Rental Crisis

The Commonwealth of Massachusetts made a lot of progress with the passage of the Affordable Homes Act in 2024. In the last issue, I dealt with the advantages that seasonal community designation could have on the housing shortage in Berkshire County municipalities. In this issue, I'd like to address the question of rentals.

One of the provisions of the Affordable Homes Act is that it gives property owners the right to add an accessory dwelling unit. Another is the ability for towns to adopt a waiver of property taxes for landlords who rent their properties affordably.

Kudos to Egremont for adopting, and Great Barrington for proposing, the property tax waiver. It's a smart strategy to create rental incentives that have a relatively small impact on a town's budget. It's also a great way to create affordable rentals, when compared to new construction per unit costs.

I'd like to address a third piece of the rental puzzle: Section 8 vouchers. Section 8 vouchers make up the difference between what folks make and what they can afford in rent. They are much used in Massachusetts cities from Pittsfield to Boston, but less available to smaller Berkshire towns because of factors including the lack of available rental units. Hopefully, adoption of incentives can help to change that.

Landlords like Section 8 vouchers because they create certainty of rent payment. Renters benefit from the subsidy as they are only expected to pay 30% of their income for rent; the rest is subsidized by the voucher.

Availability is based on income, with those earning 50% or less of Area Median Income (AMI) qualifying. For a 1-person household, 50% of AMI in Berkshire County is around $38,000. For a family of four, incomes up to $55,000 qualify. To put this in perspective, a teacher's aide at a local public school makes around $30,000 per year.

Payments to landlords for a studio apartment max out at $953 per month. For a three bedroom, the maximum voucher amount is $1,754.

Massachusetts has about 140,000 vouchers available, or an average of 875 per state house district. South County's Berkshire 3rd district gets only a tiny fraction of this amount.

As we look at strategies to build units for full-time residents, we should be looking at ways to maximize housing availability for both rent and home ownership. Getting more Section 8 vouchers for this region is a critical strategy, especially when combined with supply-side strategies like ADUs and tax benefits and seasonal community strategies such as the ability to build on undersized lots for full-time residents only.

This is an area where help is critical, whether from our State House delegation or from our regional partners at Berkshire Regional Planning and 1Berkshire. Believe me, it will be a topic I plan to bring up in my conversations with them.

This is where a waiver of property taxes for landlords renting affordably can make a big difference. Let's say the taxes on a unit were $5,000 per year. That's over $400 per month in additional income to close the gap between market rents and affordable rents. Add to these subsidies the rental payment at 30% of income, and you are easily competing with market-based rents.

Our best shot at solving our housing crisis is to avail ourselves of every opportunity. We've been given a toolkit. Let's use it to reimagine housing in the Berkshires.

If anyone wants to talk about these issues, give me a call! 413-441-5231.

Section 8 vouchers, qualifying incomes at 50% AMI

Household size	Income limit
1 Person	$38,350
2 Persons	$43,800
3 Persons	$49,300
4 Persons	$54,750
5 Persons	$59,150
6 Persons	$63,550
7 Persons	$67,900
8 Persons	$72,300

 

Maximum monthly rent payments

Unit size	Landlord payment
Efficiency	$983
1 Bedroom	$1,104
2 Bedrooms	$1,451
3 Bedrooms	$1,754
4 Bedrooms	$2,008
5 Bedrooms	$2,197
6 Bedrooms	$2,386

These figures represent the maximum income levels to qualify and the maximum amounts that a Section 8 voucher will pay towards rent in Berkshire County.

 Municipal Finance 101: Smoothing

New Firehouse: The Inside Story

Some have asked me, with some trepidation, how we can plan to build a whole new firehouse without worrying about a negative impact on your taxes. Here's how.

A few months ago, Town Administrator Michael Canales was reviewing with me the impact of the borrowing for the new firehouse. At a cost of $5 million, that amounts to roughly $300k per year for 20 years. The Town of Stockbridge raises around $9.5 million from property taxes per year, so one would expect a roughly 3% increase in taxes to pay for it. Ouch. Luckily, not so fast.

My first question to Michael was to pull up the debt schedule for the town. Stockbridge will retire $350k in annual debt payments in 2032. So, that retirement of debt will reduce the tax burden by a similar amount, but not until 2032.

With an expense that is slated to begin in 2027, how do we pay $300k per year for four to five fiscal years that would keep us from having to raise taxes? The answer? Free cash.

I've always hated the term "free cash" because it certainly is not free. It is either previous tax money we raised from you in excess of what we needed, or it is unforeseen income that came to the town. In this case, it is the latter, namely the settlement funds from General Electric that was paid to the town, now roughly $2 million with the interest it has earned.

It took the two of us about a minute to agree that we would recommend to the Select Board and the voters that we use this money to subsidize the payment for the new firehouse until 2032 and then use the savings in the retired debt payments to pay for the balance of the 20-year note's annual payments going forward.

This concept is known as smoothing. You try to avoid a bumpy total budget where amounts go up and down each year. It gives the taxpayer at least some predictability as to what their burden will be absent a surprise assessment change.

With our aging population (average age here is in the low 60s), fast ambulance response times are critical to keeping all of us healthy. There's just more of a need than in the typical town in Massachusetts, where the average age is 39. If you know me, you know that I am at the same time laser focused on keeping the tax burden low, especially to those who are of modest means.

That's not to say that operationally, the new firehouse won't come with additional expenses. Mostly that's in the form of salaries. Select Board member Chuck Cardillo and Michael worked hard all year to cement the plan to split those costs with West Stockbridge. Brilliant work to lower those operating costs. Which brings me to my final point on good governance: trust the people in the room. The Select Board tasked these negotiations with Chuck and Michael. Michael kept me briefed, but this was their work. It's great when a good team can split up the work and assign it in ways that play to the strengths of each member. Kudos to Chuck for a job well done.

I hope the voters of Stockbridge and West Stockbridge will support these efforts at the May Town Meetings. They are a good deal for our towns and the right move at this moment in time.

PS: Believe me, it is not lost on me the irony that the GE money will go toward making the community safer. After all, this is compensation for the dumping of one of the worst known carcinogens into a river that weaves its way throughout the town. As Bill Shein of The Berkshire Argus pointed out, GE ran ads in 1997 downplaying the cancer-causing impacts of PCBs in The Berkshire Eagle in 1997. It was gaslighting then, and it's gaslighting now. At least some good will come of this money, and I can't think of a more appropriate way to use those proceeds than to invest in keeping our community safe.

 Stockbridge Mohican Commission

Soap Update: Mohican Soap in Stockbridge

Last June, I was featured in an article in the Milwaukee Journal-Sentinel regarding our area's reconciliation efforts with the indigenous tribe that was the Berkshires' first inhabitants, the Mohicans.

https://www.reader.rocks/journal-sentinel.pdf

The reporter, Frank Vaisvilas, mentioned in the story a man named Dennis Zack, the owner of Tribal Sun Soap in Wisconsin. His Mohican name is Tau-Tau-yah-com-no-wan. I reached out to him to see if he wanted to sell his soap in the Berkshires. He said yes! I then contacted Teresa O'Brient, owner of the Stockbridge Country Store. She said yes and placed an order.

The soaps arrived, and Teresa has been selling them out of her store. Pick up a bar or two! They make a great gift.

I personally hope that this will be the first of many economic interactions between the heirs of Wa'thatinik* and the people of the Berkshires. It's one of my goals for the new Stockbridge Mohican Commission. Please, support our local businesses and consider purchasing the products created by our Mohican friends.

*In the Mohican language, Wa'thatinik means "the land beyond the mountains." It was the Mohican term for the Berkshires for time immemorial before its settlement.

You can get Tribal Sun Soap at the Williams and Sons Country Store on Main Street in Stockbridge!