I just wanted to take a moment and update you on the 40B-related bills that I have filed for the 2009-2010 session.
I apologize in advance for the length of the post but hopefully you will find it informative.
An Act Relative to 40B Cost Certification — This bill was filed at the request of Inspector General Gregory Sullivan and would formally adopt many of the steps he has recommended to prevent future abuse of 40B. As you are aware, Inspector General Sullivan has determined that 40B developers may have defrauded our local cities and towns out of as much as $100 million by hiding profits and artificially inflating revenues. This bill would spell out a rigorous cost certification process, as well as strict penalties for those who abuse the law, or fail to comply.
An Act Relative to Affordable Housing Project Definitions — This bill would correct one of the biggest potential loopholes in the 40B law. Contrary to conventional wisdom, 40B does not require a minimum affordable component of between 20-25%. This requirement isn’t even found in DHCD regulations or guidelines. In fact, it’s set through financing agreements signed between bankers and developers and could hypothetically be changed AT ANY TIME.
This bill would change that by setting in law what percentage of an affordable development must be reserved for low and moderate-income residents.
DHCD’s latest regulations also now allow 40B developments to include commercial components. While rental units built above small storefronts may meet smart-growth development principles, there is nothing within the regulations that prevent developers from including a big-box retail store, or a megaplex movie theatre, as part of a 40B. This bill would limit the commercial component of 40Bs to 15% the total square footage of the residential segment.
Finally, we have seen a number of “affordable housing developments” feature market-rate units in excess of $500,000. As affordable housing advocates know, low and moderate-income families do not need a 2,500 square-foot home, and often struggle to keep up with expensive maintenance and utility bills. This bill places a cap on the size of affordable units at 1,000 square feet for a two-bedroom unit, and 1,200 square feet for a three-bedroom unit. It also says that projected monthly utility costs cannot exceed standards used by the local Habitat for Humanity chapter.
An Act relative to 40B project definitions — This bill is similar to the above bill, except that it increases the minimum affordable component to 35% for low-income developments, and 50% for moderate-income developments.
An Act relative to density of affordable housing projects – This bill would limit the allowable density of proposed 40Bs at 8 units an acre, or 4 times the underlying density, whichever is greater. Zoning boards have the option of waiving this limit ONLY if the developer agrees to a profit cap of 10%, or agrees to pay the town the corresponding amount of money for use in creating additional affordable units. This bill was filed in response to guideline changes made by DHCD last summer — without public notice — that increased the allowable density to between 8 and 160 units per acre.
An Act relative to subsidizing affordable housing — This would allow cities and towns to be allowed as a “subsidizing agency” under 40B. Under existing rules, if a town was to buy a piece of land with CPA money, and hire a non-profit organization to build a 100% affordable low-income development, those affordable units would not count towards the town’s Subsidized Housing Inventory count because the town did not use a federal or state subsidizing source.
An Act relative to affordable housing built near wetlands – Many of our communities have adopted wetlands bylaws that our tougher than state regulations. This is because all of our communities are unique and have different environmental areas that need to be protected. 40Bs, however, can ignore any local rule that is stricter than the state rule. This bill would change that. Projects unable to make a “reasonable rate of return” due to the local bylaws would be entitled to the minimum amount of relief needed to meet that requirement.
An Act realtive to the oversight of affordable housing developments — This bill would require DHCD to enforce all use restrictions, covenants, and conditions contained within a comprehensive permit once occupancy permits have been issued. State law is currently vague when it comes to, say, making sure that affordable units are actually occupied by low and moderate income residents.
An Act relative to affordable housing use restrictions — 40B guidelines, which can be amended without public notice, requires that renovated affordable units remain affordable for 15 years and that newly-built units remain affordable for 30 years. This bill would require that all affordable housing remain affordable in perpetuity. Zoning boards will have the option of waiving this restriction, provided that the use restriction isn’t for less than 30 years.
An Act relative to affordable housing built in historic districts — Many towns have gone through the process of designating official historic districts as a way of preserving their community’s heritage. This bill would require that any 40B proposed within an officially recognized historic district must undergo the requisite historic review process. A project cannot be rejected because of its location within an historic district, but the development must adhere to any design and construction conditions approved during this review. These conditions will not be appealable as “uneconomic.”
An Act relative to tracking affordable housing projects — This bill would require DHCD to compile and then regularly update a list of all proposed and built 40B projects. This currently is not being done.
I welcome your thoughts, comments, or questions on these bills. My office can be reached at 617-722-1646, or by Email at Robert.Hedlund@state.ma.us