Q: What is Chapter 40B?
A: Chapter 40B is a Massachusetts state statute passed in 1969 that allows developers who include a certain percentage of affordable housing (25% for owner-occupied units) to appeal local zoning board denials or restrictions to the state Housing Appeals Committee (HAC). Appeals can be initiated when the developer has been denied a comprehensive permit by the ZBA or has been issued a permit with conditions that the developer claims would make the project uneconomic.

Under 40B, affordable housing is defined as units that can be afforded by households making 70% of the local median income (70% of Chelmsford's median income of $82,676 would be $57,873), have been subsidized by certain state or federal housing subsidy programs, and have long-term deed restrictions. Developers have successfully used Chapter 40B proposals to build over 700 developments across the state that are at variance with local zoning rules for density, conservation restrictions, and type of housing, but have provided little relief to the ongoing struggle to provide more affordable housing. PCF supports affordable housing percentages of greater than 25% (50% would be ideal) so that actual progress can be made for hard working families.

Q: What is the definition of “affordable housing?”
A: Affordable housing is defined by statute as housing that is affordable by people making 70% of the median income for a given area, adjusted for family size. In order to be counted as “affordable” units toward the 10% mandated by Chapter 40B housing statute, however, the housing also has to be built utilizing state/federal subsidies (including the LIP process and/or Community Preservation Act (CPA) funding) and must be deed-restricted to remain affordable for a certain time period (5 years for rental and 15 years for owner-occupied units).  PCF supports deed-restricting these units in perpetuity so that affordable housing stock remains affordable.

Q: Who is eligible to rent or purchase affordable housing?
A: In general, people making up to 80% of the median income for a given area are eligible (For Chelmsford, this would mean families making up to $66,140).

Q: How much affordable housing does Chelmsford currently have?
A: 6.80%

Q: So, how many more units are required to reach the Chapter 40B target of 10% qualified units?
A: 423 units, assuming no other market-rate units are built in town.

Q: How many units of new rental housing would be required if no units are “bought-down” or redeveloped?
A: 423, because all newly constructed rental units are counted as long as 20% of the units are properly subsidized and deed-restricted. State regulations allow for 20% of the units to be affordable if the affordable units are priced for low income households (50% of median income) otherwise 25% of the units would need to be affordable by moderate income households (80% of median income)

Q: How many units of owner-occupied housing would have to be built in order to reach the 10% threshold?
A: 1692 under current permitting trends. Chelmsford has only been requiring that 25% of the units be affordable in these projects, and unlike rental units, only the actual affordable units are counted in owner-occupied properties. So, the town’s housing stock would have to grow by around 13% to reach affordable targets under Chapter 40B. Once again, that assumes no other units are built at all.  PCF strongly supports requiring higher percentages of affordable housing.

Q: How much does it cost to “buy down” and properly deed-restrict an existing unit of housing?
A: It depends on the individual unit. The minimum cost is around $15,000 per rental unit, more for owner-occupied properties. However, because the current director of the Chelmsford Housing Authority (CHA) has proven adept at getting matching funds from the state and federal government, it could be argued that the cost to the town can be as little as $7,000 to $8,000 per unit. In that case, the cost to the town of buying down 423 additional units to reach 10% would be less than $3.5 million.

Q: So, what’s the least expensive way to reach 10% affordable housing? What’s the least damaging to the environment? What requires the least reduction in open space? And what will yield the lowest adverse impact on traffic, services and the property tax rates in town?
A: These goals – limiting expenses, preserving open space, reducing environmental degradation, maximizing quality of life, and minimizing taxes – turn out not to be mutually exclusive. The approach that causes the lowest negative impact on each of these is to buy-down and redevelop existing properties.

The current draft of the Affordable Housing Master Plan emphasizes new development as a way to provide more affordable housing. PCF believes that buy-downs and re-development would be highly beneficial to the town as a whole.

Q: Why is it so important to have a Master Plan for Affordable Housing?
A: The Master Plan allows the town to better guide development, control the rate of development, and more precisely track the progress of affordable housing against the plan.
Very importantly, the plan shows how the town intends to provide affordable housing, and makes it easier to exclude developers who want to violate town policies for their own profit. Specifically, when a developer wants to bypass local zoning restrictions under Chapter 40B, the comprehensive permitting process shifts to the state level. If the town does not have a master plan, it is harder to consistently apply guidelines, and it is harder to convince the Board of Appeals that a consistent set of guidelines is being applied.

Q: How can the Community Preservation Act (CPA) fund can be used to provide affordable housing?
A: The CPA fund is specifically required to spend at least 10% of its funds on affordable housing, but the amount can be up to 80%. As long as the state matches the funds, about a million dollars a year will become available for environmental and historical preservation, and affordable housing.