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A New Bedford housing development is set to receive millions of dollars in tax credits from the state as part of a program to expand needed housing in Gateway Cities.
The Executive Office of Housing and Livable Communities awarded $2.5 million to a project on the 3.7 acre property at 4586 Acushnet Ave. The funding would enable the developer, local firm Couto Brothers Development, to begin construction on the 65-unit complex with a mixture of two-bedroom, single-bedroom, and studio housing. The building is 53,662 square feet in size. The New Bedford Zoning Board approved the project in July.
The Housing Development Incentive Program funding is a major win for the project and will enable construction to begin, hopefully near the end of spring 2026, according to Jason Couto, an owner of the development company.
“The HDIP grant was a push in the right direction,” said Couto, “but we’re not out of the woods just yet.”
In an email to The Light, Couto said that they are still in the process of raising the capital for the estimated $15 million project.
“The HDIP funds are essential to closing the financial gap on this project,” he said. “This is a market-rate development, not subsidized housing, and even at rents necessary to support the project, the redevelopment is not financially feasible given the acquisition cost, building condition, and overall development expenses.”
According to a project summary presented by the city’s Department of Housing and Community Development to the Tax Increment Financing Board, about 60% of the project can be debt financed.
The property has remained vacant since a nursing home that occupied it shut down. Local leaders said the HDIP would turn it into a property that contributes to New Bedford.
“Couto Brothers Development will transform a vacant former nursing home into 65 new rental units, breathing new life into this property and creating much-needed housing for our community,” said state Rep. Antonio F.D. Cabral in a recent Instagram post announcing the award. “This is exactly the kind of smart development we need — taking an underutilized building and converting it into homes for New Bedford residents.”
“This project aligns with the City’s housing plan, ‘Building New Bedford,’ as it will activate a vacant property, help drive down housing costs in Greater New Bedford, and expand the City’s tax base,” said Mayor Jon Mitchell in a news release.
The project is one of six awards for Gateway Cities announced Dec. 21 at the Acushnet Avenue property. Other recipients included projects in Brockton, Fall River, Hyannis, and Lowell. The EOHLC awarded a total of $15 million in this year’s round.
“Housing remains a top priority for our administration, and we’re working hard to build more homes across more communities at a faster pace,” said Lt. Gov. Kim Driscoll. “These awards continue to have a big impact in their communities while helping us lower costs across the state.”
Joshua Amaral, the city’s director of Housing and Community Development, said the move is a tangible demonstration of the progress the city has made in tackling the housing crisis.
“A little over a year ago, New Bedford had never received an HDIP award,” he said. “Now, this is our third.”
The average rent for a one-bedroom apartment in New Bedford is $1,470, according to Apartments.com. Though significantly lower than the statewide average of $2,500, it remains a challenge for a city with a more than 23% poverty rate and a median household income hovering at $53,583, according to Census Reporter.
Construction has not kept pace with demand as rent prices increased 27% in 2024. A report from the New Bedford Economic Development Council and MassINC published in January 2024 said municipalities in the Greater New Bedford area need to build 8,700 new units in the next 10 years to meet demand.
“The number for New Bedford is significant,” Amaral said, “and we need to work at it.”
He said that since the report there have been between 250 and 300 units completed in New Bedford and there are another 1,500 in the pipeline.
State Rep. Steven Ouellette, a Democrat whose district includes parts of New Bedford and Fall River, told The Light that though the units aren’t classified as affordable, the fact that more units would be available would put downward pressure on housing prices.
“The real advantage is more units equals generalized lower price stabilized units,” he said.
There will continue to be progress toward that, according to Ouellette, who said he expects more help from the state in 2026.
“The governor is very familiar with the South Coast; she has conversations with us a lot,” he said. “I think you’re going to see more coming down the line.”
Taxes and awards
The project already has a Tax Increment Exemption Agreement with the city. That means that the initial 2026 property value of about $5 million will be used to calculate taxes in the coming years.
According to the current agreement, the project will be 90% exempt on property taxes for the first fiscal year; an exemption rate reduced by 10% the next fiscal year. It will stay 80% exempt for the next three fiscal years before reducing at increments until it is at 10% exemption in the 10th year. Afterward, it will pay full tax.
According to city calculations, the development will pay almost $979,000 in taxes over the decade.
Amaral said that the $2.5 million will effectively function as a grant to help shave off the estimated $15 million construction costs. And Couto emphasized how crucial the money is.
“The HDIP award enables us to move forward with construction, bring the building up to modern code, and reinvest in a long-vacant property that otherwise would remain undeveloped,” Couto said. “Without the HDIP incentive, this project would not move ahead.”
HDIP
Established in 2010, the Housing Development Incentive Program is a tax incentive awarded through the Executive Office of Housing and Livable Communities to encourage the construction of new housing. It includes a local real estate tax exemption option on a part or all of the increased property value resulting from improvements on the site and state tax credits for qualified project expenditures.
The program is focused on Gateway Cities, Massachusetts cities that have a historically high proportion of immigrant residents with a population between 35,000 and 250,000 people, have a median household income below the state average, and a rate of educational attainment of at least a bachelor’s degree below the state average.
“HDIP is delivering real results for families and communities across the state. Through this program alone, our administration has supported projects that will produce nearly 3,000 new homes for residents living in our Gateway Cities,” Gov. Maura Healey said in a news release. “By increasing the funding for this program, we’re creating more housing to lower costs, revitalizing downtowns, and strengthening local economies.”
Amaral told The Light that the city expects to submit more projects to the program in the spring.
“We’re hoping to have a couple of projects,” he said. “We try to maximize every dollar and make it work for New Bedford.”
Contact Kevin G. Andrade at kandrade@newbedfordlight.org
