What Massachusetts’ New Housing Law Means for Real Estate Investors
A New Window of Opportunity
In August 2024, Governor Maura Healey signed the Affordable Homes Act into law.
At $5.16 billion, it’s the largest housing investment the state has ever made.
This law does more than add funding — it shifts how Massachusetts approaches housing development. For real estate investors, it creates real pathways to take part in long-term growth, especially in cities that have seen decades of under building.
If you're in private equity, development, or considering a partnership with a local operator in Massachusetts, this is a moment worth paying attention to.
A Major Investment in Housing Production
The Affordable Homes Act sets a goal of creating, preserving, or rehabilitating 65,000 homes across the state in five years.
This isn’t a pilot program. The money is committed. The plan is in motion.
Here’s where some of the funding is going:
- $2 billion to upgrade over 43,000 public housing units
→ These improvements will likely open the door for infill and redevelopment opportunities around existing sites, especially in dense, urban neighborhoods. - $1.6 billion for new housing targeted at low- and moderate-income residents
→ These types of projects often come with stable returns supported by vouchers or other public subsidy programs. That kind of income stability can be attractive, especially in uncertain markets. - $200 million for climate-resilient and energy-efficient housing
→ For those investing in construction or renovation, this creates an opportunity to secure grants or incentives tied to building performance and long-term operating savings. - Broader access to state-owned land for housing
→ This change encourages more development on public parcels, especially near transit hubs and in higher-density areas where demand continues to outpace supply.
Policy Changes That Matter to Investors
In addition to the funding, the law includes 49 policy updates designed to reduce friction in the development process. A few are especially relevant if you're investing in residential real estate in Massachusetts.
1. ADUs Now Allowed by Right
One of the biggest changes: accessory dwelling units (ADUs) up to 900 square feet are now allowed by right on most single-family lots statewide.
That means no more zoning board hearings or neighborhood approvals. You can build an ADU without navigating a maze of local resistance.
This is expected to unlock 8,000 to 10,000 new units across the state.
For smaller investors, this matters. It creates a path to add value to existing properties, generate extra income, or provide more flexible housing options — whether for family, tenants, or short-term rental use.
2. Zoning and Permitting Reform
The law also pushes cities and towns to allow more multifamily housing, particularly near public transit and in areas that have historically limited density.
This is especially relevant in cities like Holyoke and Springfield, where we operate. These areas now have a clearer path to approvals and better access to technical and financial support from the state.
The zoning reforms make new development — or repositioning older buildings — far more achievable than in the past. And when you factor in the lower cost of entry in Western Mass compared to Boston, it becomes a compelling case for new investment.
3. Converting Vacant Commercial Buildings
There’s also new flexibility to convert empty office or retail spaces into housing.
That shift matters, especially in post-COVID downtowns where demand for commercial space is still lagging.
Investors looking for value can now acquire underused commercial assets, convert them to residential use, and potentially tap into tax credits or soft financing to do it. It's a straightforward path to reposition assets in neighborhoods that already have infrastructure and transit access.
Why This Law Creates Real Opportunity
Massachusetts has long been one of the hardest places to build housing. High land costs, slow permitting, and zoning restrictions made it difficult for even experienced developers to get deals off the ground.
This law marks a serious shift in direction. The state is putting money, policy, and public support behind the idea that we need to build more — and fast.
For investors, that shift unlocks several advantages.
1. A Better Entry Point into Supply-Constrained Markets
Cities like Holyoke and Springfield have long been overlooked in statewide housing plans. That’s changing.
These markets now benefit from:
- Relatively low acquisition prices
- Strong rental demand
- A large stock of underused buildings and vacant lots
- Eligibility for state funding and zoning support
If you're looking to invest in Massachusetts, but Boston’s price points don’t pencil out, this part of the state is worth another look.
2. Partnering with a Local Operator Can Make All the Difference
Here at Wollaston, we have a specific niche working in Western Massachusetts. We know how to work with housing authorities, inspectors, zoning boards, and neighborhood stakeholders.
We also manage our own in-house teams for construction and property maintenance, which helps us move quickly when opportunities arise — whether it’s a small ADU addition or a full renovation project.
If you're looking to invest but don’t want to navigate the day-to-day, partnering with a group that’s already on the ground gives you a major advantage.
3. Alignment with Long-Term Housing and ESG Goals
The law doesn’t just support housing. It also backs projects that improve building performance, reduce energy use, and expand housing access.
That makes it easier to align your portfolio with ESG goals, while also locking in long-term cash flow through state-backed subsidies or voucher programs.
What to Watch in 2025 and Beyond
As the Affordable Homes Act rolls out, we expect:
- New funding programs and grants to go live
- A rise in demand for sites near transit and job centers
- More capital — both public and private — flowing into smaller cities
Investors who get in early will be better positioned than those who wait for the dust to settle.
Next Steps if You’re Interested
If you’ve been thinking about:
- Adding real estate to your portfolio
- Getting exposure to Massachusetts markets
- Partnering with a local team that already has the systems in place
We’re actively sourcing deals and building out our pipeline under this new legislation.
Visit wollastonrei.com to learn more or join our investor list.
