The Housing Development Incentive Program (HDIP), is a state tax credit program established as M.G.L., Chapter 40V, that provides Gateway Cities such as Lowell with financial and tax incentive tools to increase residential growth, expand diversity of housing stock, promote neighborhood stabilization, and ultimately generate local and regional economic development. The HDIP program provides two tax incentives to developers to undertake substantial rehabilitation of properties for lease or sale as multi-unit market rate housing:
A municipal real estate tax exemption on all or part of the increased property value resulting from improvements (the increment), and
State tax credits for Qualified Substantial Rehabilitation Expenditures (QSREs) that are awarded through a rolling application process.
In 2021, the Department of Housing & Community Development (DHCD) made some significant changes to the program making it more competitive. In response to those changes, the City of Lowell made an amendment to its Housing Development Plan to increase the real estate tax exemptions offered to developers who are not able to receive the full amount of state tax credits. The amended Plan was approved by both the State and the Lowell City Council in 2021.