Each year on Cape Cod, as summer draws near and businesses prepare for the season, concerns around housing, labor supply, and the seasonal economy predictably move to center stage. News media, business and nonprofit leaders, local government officials, and neighbors all take part in the annual tradition, speculating whether there will be enough housing to satisfy summer staffing needs and, consequently, what effect this housing and labor dynamic will have on regional business success and customer experience.
Unlike previous years, however, this spring’s rhetoric is set against the backdrop of an extraordinary amount of state legislative activity in the areas of housing, labor, and the economy. The Chamber has been tracking several bills that have the potential to directly impact businesses and employers on the Cape – and shape conversation on these key issues for many summers to come.
Affordable Homes Act
What is it?
Filed in October 2023 by Governor Maura Healey, The Affordable Homes Act includes a 5-year, $4 billion capital spending plan combined with 28 policy initiatives designed to provide communities with a variety of tools to address housing needs. The bill has been called "historic" for its level of proposed investment in housing construction and preservation, housing-related infrastructure, and development incentives.
What action(s) has the Chamber taken?
The Chamber’s position on The Affordable Homes Act has been consistent since this legislation was introduced: Cape Cod communities, with their high seasonality, outdated infrastructure, and growing numbers of non-resident property owners, require unique solutions to address chronic housing needs. We are supportive of the proposed policy initiatives outlined in The Affordable Homes Act, particularly the Seasonal Community Designation, Real Estate Transfer Fee, and By-Right Multi-Family and ADU Zoning. With the right details, policies like a Real Estate Transfer Fee and a Seasonal Community Designation could provide Cape Cod with resources that don’t currently exist to address sorely needed “missing middle” and workforce housing needs.
Following the filing of this legislation, the Chamber has participated in monthly meetings as a member of the Affordable Homes Act Steering Committee, led by the state’s Office of Housing & Livable Communities. Over the last few months, the Chamber has been invited to participate in multiple state-level discussions on housing and the pending Affordable Homes Act legislation, most recently including a business leader roundtable in Worcester with Governor Healey, Lt. Governor Driscoll, Secretary Ed Augustus, and a Cape & Islands stakeholder meeting with Senate President Karen Spilka at the Massachusetts State House. We have also submitted testimony for each of the two hearings held on The Affordable Homes Act.
Why Should Businesses Pay Attention?
Massachusetts' future economic viability is directly tied to our ability to make housing more attainable. At stake with this legislation are a number of tools that are specifically targeted to address housing challenges in highly seasonal regions like Cape Cod, the Islands, and the Berkshires. Unfortunately, these tools are not seeing widespread support on Beacon Hill. The House Speaker recently commented that he does not see the transfer fee as a solution to the housing crisis statewide, and the Seasonal Designation has received minimal attention from legislators. Although certain strategies may not work for Boston or the state as a whole, for Cape Cod they could be a lifeline. It is important that lawmakers understand the value of piloting these policies in regions of the state where housing challenges are felt more acutely.
Municipal Empowerment Act
What is it?
The Municipal Empowerment Act was filed by the Governor in January of this year and contains a set of tools designed to help towns generate additional revenue while supporting the recruitment and retention of staff. In addition to a number of policy provisions, the bill offers an increase to the maximum rates for local lodging and meals tax and introduces a new 5% local option motor vehicle excise tax.
What action(s) has the Chamber taken?
The Cape Cod Chamber is opposed to the local option tax increases contained in the Municipal Empowerment Act and has submitted testimony to the state outlining this position.
For the Cape Cod region, raising taxes on our tourism, hospitality, and food businesses simply doesn’t make sense unless these funds are designated to reinvest in the businesses paying the tax, support year-round economic growth, and/or address big-picture, regional challenges – like housing and wastewater – that impact business viability. By fostering true economic vibrancy through needed infrastructure, community development initiatives, and business investment, we can increase the amount of revenue collected by towns without raising local option tax rates.
Why Should Businesses Pay Attention?
The Municipal Empowerment Act has been widely supported by municipal leaders around the state. If passed, each of the 351 cities and towns in Massachusetts could opt to raise up to 7% in occupancy tax from lodging businesses, another .25% in meals taxes from restaurants, and up to 5% in new motor vehicle excise taxes from any business operating a commercial fleet or company vehicles.
Mass Leads Act
What is it?
The Mass Leads Act is a comprehensive Economic Development Bond Bill filed by Governor Healey this spring. With a proposed $2.815 billion in capital spending authorizations and $675 million in tax credits, the bill is bigger than Massachusetts' last three economic development bond bills combined. This significant level of capital spending, paired with policy proposals targeted to climate tech and marine tech innovation, demonstrates the Healey-Driscoll Administration’s commitment to maintaining Massachusetts’ competitive edge for economic opportunities and workforce.
What action(s) has the Chamber taken?
The Chamber has submitted testimony that broadly supports the intentions of the Mass Leads Act, while requesting that additional attention be given to the state’s tourism economy. Tourism is the third largest industry in the Commonwealth, generating an estimated economic impact of $69 billion per year, yet Massachusetts ranks third lowest in the country for state investment in travel and tourism. The Mass Leads Act contains only modest investments in the travel and tourism sector, in the form of competitive grants. While the proposed grant funding would be a welcome one-time boost for regional tourism efforts, the scale and structure of this funding is unlikely to produce a significant return on investment, or pay dividends for our state long-term. Policy changes and ongoing, consistent investment are required to support the large-scale infrastructure projects and sustainable tourism initiatives Massachusetts needs.
Why Should Businesses Pay Attention?
Small Business advocates have recently argued that the economic development bill lacks a focus on Main Streets and small businesses, favoring large-scale investments in biotechnology, climate tech, AI, and other innovation areas. The Mass Leads Act is still working its way through the legislative process, with a little over a month and a half remaining until the end of session. This means there is still time to shape and adjust this legislation to fit the needs of Main Street and small business stakeholders.
__________________
Spring is a busy season, whether you’re in business or on Beacon Hill. At the same time lawmakers are considering these major legislative packages to support housing and economic development, Cape businesses are occupied, readying for the busy summer season. Rest assured, the Cape Cod Chamber is keeping our eye on the ball and advocating for policies and state spending solutions that take the unique needs of Cape businesses into account.
To keep you up to date on our efforts, we are introducing a new quarterly Policy E-News that will debut later this month. Sign up today to get the latest info on these and other policy developments that impact the Cape Cod business community.