Q: What is Chapter 40B?
Originally dubbed the "anti-snob zoning law," Chapter 40B is a Massachusetts state statute passed in 1969 which 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 feels that the local restrictions impose "uneconomic" conditions, that is, the development would be economically unfeasible.

Chapter 40B defines affordable housing as units which can be afforded by households making 70% of the local median income, 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 violate local zoning rules for density, conservation restrictions, and type of housing.

Q: Why are so many people angry about Chapter 40B? Hasn’t it created a lot of new affordable housing?
Firstly, Chapter 40B has not addressed the shortage of affordable housing. The amount of housing created by Chapter 40B is so small that its effect cannot be considered anything but inadequate. The law provides such a low baseline for affordable unit percentages that developers can avoid local zoning restrictions and profit handsomely, yet contribute little to the supply of affordable housing. Using statistics from the Citizens’ Housing and Planning Association, as of early 2007 less than 10,750 units of affordable housing had been created statewide in the 38 years from the law’s inception. That’s under 285 units per year. Overall, there is less affordable housing now than when the law was passed. In a recent report from the National Low Income Housing Coalition in Washington, DC documenting housing costs in every state, metro area, and county, Massachusetts housing was listed as the least affordable in the country. It’s estimated that at least 36,000 additional units are needed, three times the entire production of 40B over the last 38 years.

Secondly, Chapter 40B funding sources favor development over subsidies of existing units (the more cost-effective approach) and provides developers a mechanism for steamrolling local authorities to build where they want, when they want. Developers have successfully used the law to eradicate hundreds of thousands of acres of open space across the state over the objections of local zoning boards, while utilizing billions of dollars in taxpayer-financed subsidies. The more cost-effective approach of subsidizing, improving, and/or restricting existing properties would have cost little over 100 million (that’s "million," not "billion") dollars to provide the same number of units, without decimating open space and driving land prices sky high.

If one looks at the state’s 40B projects, they are virtually all high density, segregated developments – precisely the lack of integration that no one believes is good for the community or for the residents themselves. The benefits of inclusionary zoning are not being realized by the reality of high-density, segregated implementation of Chapter 40B housing. As of 2007 Chapter 40B has been responsible for approximately 30% of housing starts in Massachusetts over the preceding three years. That is literally ramming fast growth down peoples’ throats across the state.

Q: What’s the current status of legislative efforts to amend or repeal Chapter 40B?
There have been over a hundred bills introduced in the last 10 years to amend or repeal Chapter 40B, but there’s been no consensus on precise details and none of the bills have passed. Furthermore, trade associations for developers, realtors and banks have spent over 8 million dollars in that time to lobby and campaign against any changes. It is easy to tell who is really profiting from Chapter 40B, and it is not people who need affordable housing.

Chelmsford’s state representatives all support reform or repeal of Chapter 40B and one of the things that can be done for the longer term is to support their efforts. That can be done by contacting them with encouragement, contacting town officials to let them know they should formally support reform, and by contributing to the campaigns of pro-reform challengers of regressive state representatives during the election cycle. We hope to provide a comprehensive list of state representatives’ positions regarding Chapter 40B on this web site soon so you’ll know who to support (and who to help challenge).

Q: Why do affordable housing advocates resist efforts to amend Chapter 40B?
Resistance comes mostly from organizations which are not really affordable housing advocates. They’re development advocates. Several trade associations oppose any reforms that would slow down the "pigfest" (the word used recently by the state’s Inspector General after auditing hidden profits of Chapter 40B developers). The names of certain groups mask their true membership. For instance, the "Citizens’ Housing and Planning Association" (CHAPA) is composed primarily of developers, realty companies, bankers, property managers, architects and government housing officials. There are few if any "citizens." Their web site talks about "smart growth" but never about low growth or slow growth alternatives. "Smart growth" has become a euphemism for "fast growth."

Q: What about the 10% rule that lets towns off the hook regarding the Chapter 40B appeals process?
The statute provides that towns which are already providing 10% affordable units can escape the Chapter 40B rules for overriding local zoning restrictions. There are two problems with reaching that goal, however. First of all, the baseline for percentage affordable units to qualify for Chapter 40B exemptions is so low (25% for owner-occupied units) that a community would have to grow at least 50% to meet the 10% threshold. (New non-affordable units as well as existing units are counted when figuring the new affordable percentage.) Towns which have foolishly relied primarily on new development to provide affordable housing have seen excessive "smart growth" that has destroyed the essential qualities of the community and driven property taxes sky high. Chelmsford is in this category, having authorized more 40B developments than almost any similar-sized community (see http://www.chapa.org/pdf/40B_AppendixB.pdf for a listing).

The second problem is that only "subsidized" units count toward the 10% goal. Communities like Chelmsford which have unrestricted market-rate units that are affordable can’t have them counted. Chelmsford actually has approximately 12%+ affordable units, but the state only counts about half of them. Efforts to remedy this have so far failed.

The statistics are telling. Only 47 (out of 351) municipalities have reached the 10% threshold in the 38 years since Chapter 40B was enacted. Chapter 40B was not only crafted to guarantee a supply of land for development, it has also assured that there’s never going to be enough affordable housing until it’s repealed or amended. Governor Mitt Romney commissioned a task force to study the problem, and the task force came up with a number of common-sense recommendations. The Boston College Environmental Affairs Law Review stated in 2005 that "Massachusetts’ affordable housing crisis will only be solved if the State Legislature replaces 40B’s arbitrary housing quotas with new initiatives that create enough housing to meet demand." So far the task force recommendations have been largely ignored.

Q: If Chelmsford doesn’t meet the 10% threshold, then aren’t we helpless in light of the Housing Appeals Committee (HAC) appeal process available to developers?
Absolutely not. There are several things that can be done to guide affordable housing development in accordance with low growth strategies that are good for everyone:

1. Local zoning boards are free to require that projects have a greater number of affordable units than Chapter 40B requirements. This makes eminent sense for Chelmsford, where buildable land is at a premium and should not be given over to developers planning to provide minimum percentages of affordable units. Given the state Inspector General’s recent finding that developers are routinely making over 30% profit on Chapter 40B projects, and often over 50%, it makes perfect sense to reassess minimum percentage requirements and propose a baseline of 75% affordable units for any new developments in Chelmsford. Yet the Chelmsford Board of Selectmen recently approved (by a 3-to-2 vote) and sent to the Zoning Board of Appeals the 59-unit Hillside Gardens 40B proposal with the minimum 15 affordable units. This is not sensible policy for Chelmsford. There is nothing in state law that mandates developers should walk away with a million dollars profit on every 5 million dollar development.
   
   Because of all the truly affordable units already available, Chelmsford could reach formally subsidized affordable housing goals fairly quickly (within 5 or 6 years) without any new development at all. Yet local officials have been handing out 40B approvals at an alarming rate under the Local Initiative Process (LIP). The town should not provide 40B comprehensive building permits except in very rare circumstances, and if they are provided at all the number of affordable units should be between 50% and 75%.
   
   
2. Guidelines from the state housing authorities allow a town that has an approved master plan and that makes acceptable progress each year to be exempt from 40B requirements. In Chelmsford’’s case that means about 100 additional units a year. That can be done by "buying down" existing units as well as improving and restricting properties that are currently not counted. New development can be halted using this approach. Chelmsford has finally created a master plan draft that is approved by the state, a commendable step. However, the implementation details are not yet codified, and the draft plan is full of pro-growth, pro-development language and recommendations that need to be removed. The Master Plan Implementation Committee will need to be diligent in order to identify redevelopment opportunities and to adequately fund low-growth alternatives such as buy downs. See the Affordable Housing FAQ for some relevant details regarding funding via the Community Preservation Act and other sources.
   
   
3. Just because a developer disagrees with local zoning restrictions doesn’t mean the developer will win at the state level. A community like Chelmsford, which is acting in good faith to provide affordable housing, which has a master plan, and which acts reasonably in working out zoning restrictions, has an excellent chance of prevailing should the developer appeal. Statistics show that of cases taken to the level of an appeal, 69% were withdrawn, dismissed or settled prior to a decision, and only 26% were finally ruled in favor of the developer. Should a developer appeal an adverse local decision to the HAC, the town must show "a valid health, safety, environmental, design, open space, or other local concern… [that] outweighs the regional housing need." That leaves a lot of room for objection. In fact, legal precedents make it clear that "bona fide conditions that have sufficient evidentiary support and are properly crafted to address specific local concerns, should be upheld unless the developer can show that the conditions render the project uneconomic." (Massachusetts Law Links) There is no reason for Chelmsford’s Planning Board, Zoning Board of Appeals, Board of Selectmen or Town Manager to accede to any developer’s demands under the threat of appeal. At the very least, even if a developer does appeal, it will be clear moving forward that Chelmsford will aggressively fight unreasonable proposals.
   
   
4. Public hearings must be held within 30 days of a 40B application and typically go on for several months while concerns are explored and addressed. The subsidizing agency must consider the community’s comments when issuing a site approval letter. Citizen involvement is crucial in fighting unreasonable proposals. Part of the goal of Preserve Chelmsford’s Future is to make it easier for concerned citizens to be notified when applications are made, and to help individuals refine public comments for the hearings so that their concerns are adequately heard and addressed. It is very important that developers get the message that affordable unit percentages of 25% will not be tolerated. To get on PCF’s "activist" e-mail list for timely notifications, click here.
   
   
5. Set-aside percentages for new commercial development provide a number of advantages. Town officials who approve new commercial development without set-asides are ignoring the real costs to the town of new development and are foregoing a powerful tool in the creation of necessary affordable housing. The costs of providing direct services are typically not balanced by the new tax revenues. In addition there are costs of providing affordable housing for the lower-wage employees who want to live near their jobs. A set-aside fee would help balance the town’s budget by more correctly allocating costs, and would help provide the necessary affordable housing.
   
   Set-aside fees would make sense for high end residential developments as well, again because costs to the town of providing services is higher than the new tax revenues, and under 40B the town is mandated to provide additional affordable housing to balance off the new market-rate construction. A small set-aside fee of as little as 1% would enable provision of an affordable unit (via buydown or redevelopment) for every two or three new market-rate homes built. In short, set-aside fees should be implemented immediately for both commercial and high-end residential development.
   
   
6. All challenged projects that reach the HAC are subject to the Massachusetts Environment Policy Act. This Act requires that state actions that may impact the environment face public scrutiny. Whether the risk is exceeding sewage system capacity (a real problem in Chelmsford), water system capacity (a real problem in Chelmsford), degradation of wildlife habitat, or wetlands encroachment, if the development may cause "damage to the environment" then the developer must file a brief statement of the project’s environmental impacts in the form of an Environmental Notification Form (ENF). If the project is deemed by the Executive Office of Environmental Affairs (EOEA) to exceed allowable impact thresholds, the developer must then prepare a more elaborate report.
   
   The point is, public comment is allowed on the ENF, and those comments are taken into consideration by the EOEA. Major Chapter 40B projects, such as the ones that have been built in Chelmsford, generally require the filing of both an ENF and the more elaborate subsequent impact statement. The HAC has the power to reverse or modify its decisions based on any new environmental impact information unearthed in MEPA filings. The whole process is expensive and unpleasant for developers, regardless of the final ruling of the HAC. No developer in his right mind will brave organized, reasonable public opposition. That is why the "Local Initiative Process" (LIP) is so dangerous. LIP puts all negotiations in the hands of the Board of Selectmen, who in the past have issued Chapter 40B approvals at the minimum percentages allowed under statute. It needs to be made clear to the Board of Selectmen that the public will is to pursue low-growth alternatives such as buy-downs, and to require much higher percentages of affordable units for any 40B development project that is to move forward at all.
   
   
7. Under state law, projects situated near wetlands still require permits from local Conservation Commissions. 40B project are subject to imposition of mitigation or other conditions related to wetlands conservation. Unlike local zoning regulations, these "Orders of Conditions" can legitimately render the project "uneconomic." The state has explicitly empowered local Conservation Commissions to enforce the state’s Wetlands Protection Act. This provides Chelmsford the authority to veto developments sited near wetlands, and provides an opportunity to influence or stop the development outside of the 40B Zoning Board of Appeals process.
   
   
8. State regulations require the HAC to examine the details of a developer’s proposal relative to the details of the municipality’s master plan. Chelmsford’s master plan Implementation Committee should implement details such as a 75% percentage affordable unit requirement so that developers cannot challenge the imposition of such a requirement on their project as an arbitrary or capricious action by the town.
   
   
9. The Affordable Housing Master Plan is critically important. Without a master plan, towns cannot argue for permit denial by citing a proactive record even if they have one. But with a properly written master plan, the town can show a clear path that proactively provides affordable housing in a better way than the antagonistic developer.
   
   A good deal of the remaining open space is owned by the town. The town is under no obligation to provide this land for development, and in fact it should not. The fact that several acres were recently sold off for development in order to help balance the town’s financial deficit is a red flag. More recently, the Town Manager has committed funds to commission an "independent engineering analysis" to explore drainage issues in hopes of enabling development on town owned wetlands parcels on Bentley Lane. There are better ways of balancing the budget than eliminating open space, endangering the environment (particularly with respect to watershed) and eliminating future options for the town. There are better ways of providing affordable housing than building on town owned wetlands and destroying any possibility of coherent defense against future unwise 40B developments. To send this message loud and clear via petition to Chelmsford’s Board of Selectmen, Town Manager, and Planning Board click here.

Further notes:

A recent poll found that "citizens’ concerns over affordable housing rose to an unprecedented third place on their list of voting concerns for the 2004 election season." (Boston College Environmental Law Review)