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H 5487

An Act to establish a surcharge on specific residential development activities for the purpose of funding the creation of community housing

194th Legislature (2025-2026) Introduced by Michelle Ciccolo and 1 co-sponsor

Lexington imposes a per-square-foot surcharge on new single- or two-family homes built after demolitions to fund community housing via the Affordable Housing Trust Fund.

Bill reported favorably by committee and referred to the committee on House Steering, Policy and Scheduling
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Bill Summary · H 5487

Bill Summary: H 5487 (194th) – An Act to establish a surcharge on specific residential development activities for the purpose of funding the creation of community housing

Purpose and intent

  • Establish a local surcharge in the town of Lexington to fund the creation of community housing.
  • Target the loss of moderate-income housing tied to the demand for buildable parcels by applying a per-square-foot fee on certain new residential constructions.
  • Revenues are directed to Lexington’s Affordable Housing Trust Fund to support community housing initiatives.

Key provisions and changes

  • Imposition of surcharge

    • The surcharge applies to all new single- and two-family residential construction permits issued on parcels where an existing single- or two-family dwelling has been demolished to create one or more buildable lots.
    • The surcharge is calculated on a dollars-per-square-foot basis, applied to the total gross floor area of the permitted structure(s).
    • The surcharge does not apply to:
    • Permits for the creation of community housing (i.e., housing defined as community housing under law).
    • Permits for reconstruction where the new structure has the same or smaller gross floor area than the demolished/demolished structure.
    • The select board sets and annually adjusts the surcharge rate for inflation.
    • The rate may include additional requirements or exemptions as the select board adopts regulations to implement the surcharge.

  • Administration and study requirements

    • The town manager (or designee) must prepare a study at least every seven years to assess suitability, effect, and rate ranges, and to recommend changes to address changing demand for community housing.
    • The initial surcharge rate and its implementation must occur no later than eighteen months after the act’s effective date.
    • Periodic reporting is required toIdentify surcharge receipts and quantify outcomes of funded community housing projects.

  • Enforcement and funds

    • The building commissioner may not issue a certificate of occupancy for a building subject to the surcharge until the surcharge is paid.
    • All surcharge receipts are to be deposited into Lexington’s Affordable Housing Trust Fund (as per General Laws, ch. 44, § 55C).

  • Definitions

    • “Community housing” is defined as in section 2 of chapter 44B of the General Laws.
    • “Demolition” means demolition of more than 50% of the primary building’s shell.

  • Effective date

    • The act takes effect upon passage.

Who would be affected

  • Developers/Builders in Lexington:

    • Applicants for building permits for new single- or two-family homes on demolished parcels would pay the surcharge based on the new structure’s gross floor area (except where exempted).
    • Permits for new community housing and certain reconstruction projects may be exempt.

  • Town of Lexington:

    • Administration of the surcharge program, including setting rates, collecting fees, and reporting on fund use and housing outcomes.
    • Allocation of funds to the Lexington Affordable Housing Trust Fund.

  • Residents and community housing stakeholders:

    • Potential increase in housing supply and affordability outcomes funded by the surcharge, assuming effective use of the Trust Fund.

Timeline and procedural notes

  • The surcharge must be implemented within 18 months of the act’s effective date.
  • A study is required at least every seven years to evaluate the program.
  • Annual inflation adjustments to the surcharge rate are required.
  • The act was referred to the Revenue Committee and subsequently concurred by the Senate (as of action history).

Contextual considerations

  • The bill provides a locally tailored funding mechanism to support community housing through a defined surcharge on new residential development following demolition, with transparent oversight and periodic review.
  • Exemptions for community housing and certain reconstruction help balance affordability goals with development activity.
  • The success of the policy will depend on the initial rate setting, enforcement, and how effectively funds are deployed for community housing projects.

Compiled from official sources — confirm details with the bill’s official record.

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