Can social housing help solve the Mass. housing crisis?

Massachusetts needs 125,000 to 200,000 more housing units to meet demand by 2030, according to a McKinsey & Company analysis commissioned by former Gov. Charlie Baker’s office in 2021. It’s a tall order, and often a contentious debate.

State Rep. Mike Connolly, who represents parts of Cambridge and Somerville, introduced legislation aimed at creating what’s sometimes called social housing: Government-funded mixed-income development, a sort of public housing that caters to a large variety of incomes.

“It was actually the original idea for public housing in the United States, and it offers a lot of advantages,” Connolly told GBH Morning Edition hosts Paris Alston and Jeremy Siegel. “If the public builds mixed-income housing, there is more money on the balance sheet and so that can allow for programs that are more sustainable and more scalable.”

In Connolly’s plan, Massachusetts would have a social housing fund that starts with about $100 million, raised through state-issued bonds, he said. MassHousing, the quasi-public agency responsible for affordable housing in the state, would provide financing to cities and towns looking to build social housing.

Connolly said social housing is one idea for meeting overwhelming demand in markets that have long had low rates of new construction and a close-to-stagnant number of units.

“These projects could target one third of the units for lower income residents, one third for more of the middle income and maybe one third for more of that market-rate or higher income type of tenants,” he said.

Once that housing is built and occupied, tenants would pay a rent in accordance with their income and the sum of money would return to the social housing fund, Connolly said. Then the state could use that money to build more housing.

This process is different from how Massachusetts funds affordable housing through rental vouchers or low-income housing tax credits.

“That kind of spending only flows in one direction, so we spend the money, it does something once and then the money's gone,” Connolly said. “But when the state acts as a developer of public housing, and in the case of social housing as a developer of mixed-income housing, the power is the state makes that investment and then over time that housing returns the investment to the state so that the fund can grow.”

Though there are not many examples of such developments in the U.S., Connolly pointed to Montgomery County, Maryland, where $50 million in public funds have been allocated for the development of almost 8,800 new housing units, 20 percent of which will be affordable to households making 50 percent of area median income or less.

“We need to think about multiple modes of housing production,” he said. “We can think about market rate housing production, we can think about the conventional affordable housing production that's driven by low-income housing tax credits. We can think about institutional housing production, we need our universities, MIT and Harvard, to produce more affordable graduate student housing. And finally, if we're really going to get to 200,000, we ought to be thinking about social housing production as well.”

Connolly’s bill had its first hearing Monday. He said he was hopeful about its future, and hoped to incorporate elements of Gov. Maura Healey’s newly created Green Bank to fund it.

“Certainly we're at the beginning of a conversation. This is a very new topic for many legislators and for many of us,” he said. “We're having some really productive conversations, not just with my legislative colleagues, but with housing officials in the city of Boston and in the city of Cambridge. And we're hopeful that this is an idea that can gain traction.”

Editor's note: This story has been updated to clarify the financing process for the housing program.