What is Chapter 40B?
Affordable housing and the state 10% mandate
The state of Massachusetts mandates that all communities maintain a 10% Subsidized Housing Inventory (SHI). This is the community’s stock of low- or moderate-income housing for the purposes of MGL Chapter 40B, the Comprehensive Permit Law (www.mass.gov, Chapter 40B Planning and Information). A community’s SHI includes 40B housing as well as many other types of housing.
“Affordable” is defined to mean a family income less than 80% of area median income (or AMI). For 2023, the 80% AMI for a 2-member household in Barnstable County is $77,400.
Chapter 40B
Chapter 40B (aka, Comprehensive Permit Law) is a law created in 1969 to address the shortage of affordable housing statewide by eliminating barriers created by local zoning and approval processes. In very simple terms, the law says that if a community has not yet met the 10% affordability goal, then zoning laws can be by-passed by the local Zoning Board of Appeals to create housing developments which have at least 20-25% affordable units. This has been the cause of controversy in many towns because it means that 40B projects can be built at locations or at a level of density that would otherwise not be allowed.
Moreover, and unfortunately, the economic climate of the last decade (and especially post-Covid) has motivated developers to exploit this law to maximize profit. In a project such as the one proposed in Dennis village, normal zoning would at best support 3 “luxury” homes on the given land area (approximately 2 acres). Under 40B, the same land is proposed to support 20 condos, 5 of which are affordable and 15 of which are “luxury”. When each “luxury” unit sells for $1M+ … do the math …
The 40B law includes numerous “safe harbor” provisions, which are conditions under which a town need not add new affordable units in a given year. For example, if a community adds 0.5% more affordable units in a year (relative to the entire number of units in the town), then they get a safe harbor for the following year. Another example is if a community has 10% SHI. Another safe harbor is the 1.5% General Land Area Minimum, which states that if 1.5% of a town’s buildable land area is used for affordable housing, then town retails local control over zoning, etc.
The maximum profit a developer can make on for-sale units in a 40B is 20%. Affordable units must remain affordable even if they are resold. However, with very few other restrictions, developers are able to circumvent the usual local regulations (zoning, historic, etc) if the project contains 20-25% affordable units.
Further Information
Official Massachusetts 40B website - https://www.mass.gov/chapter-40-b-planning-and-information
Wikipedia article about Chapter 40B - https://en.wikipedia.org/wiki/Massachusetts_Comprehensive_Permit_Act:_Chapter_40B
Critical view of 40B from a community group in Newton Village - http://www.newtonvillagesalliance.org/chapter-40b.html