Affordable Housing Institute : US

As faithful blog readers know, among the American innovations I think should be on every global shopping list are both a strong role for local government in zoning and land use, and a structured approach to inclusionary zoning.  Massachusetts has long had both, through our particular statute, Chapter 40B:

 

For almost 40 years, Chapter 40B, a unique Massachusetts law, has allowed developers to circumvent local land-use regulations for housing projects that include subsidized units in communities that lack such housing.  Given well-documented restrictions that many communities impose on multifamily housing, Chapter 40B—officially known as Massachusetts Comprehensive Permit Law—has become the primary tool for building multi-family development projects in the state. 

 

Forty-bee: it’s everywhere you want to be!

 

This, in turn, has made the law extremely controversial and led to repeated but thus far unsuccessful attempts to either repeal or substantially modify it.

 

To begin with, a simple introduction:

 

 

Taken together, these two main provisions accelerate affordable housing in localities that cooperate, and can compel it over the objections of non-cooperating localities that fall below a 10% affordability threshold. 

 

This makes Chapter 40B extremely powerful, as it’s one of the handful of ways a locality’s grip on zoning may be broken – and broken by a motivated third party (namely, the out-of-town developer).

 

We want elderly housing

 

As journalist and Norton resident Bill Gouveia put it, about his home town:

 

Chapter 40B is despised by most area towns because it takes away their control. There are most definitely parts of the law that are unfair and distasteful.

But towns that have worked hard and made sure they have at least 10% affordable housing are exempt. Chapter 40B is a law they can avoid simply by doing what the law was intended to do – create affordable housing.

Almost everyone is in favor of affordable housing. But most don’t want to see it in their neighborhood. They always seem to think there is a “better place” for it.

 

Amid the rhetoric, there’s a role for data.  How has Chapter 40B worked?  Now we have valuable and intriguing statistics, by MIT DUSP professor (and AHI affiliate) Lynn Fisher. In her recently issued Harvard Kennedy School report, Reviewing Chapter 40B: What Gets Proposed, What Gets Approved, What Gets Appealed, and What Gets Built?

 

Adopting the radical strategy of actually looking at the evidence: Lynn Fisher, MIT

 

From the perspective of both players, town and developer, Chapter 40B is a pachinko machine: you drop your ball in the top, and it bounces through the process until eventually coming to rest.

 

It’s hard to get your property into the win pocket

 

We can know the machine by the way its various balls have bounced; indeed, in terms of understanding what the machine actually does as opposed to what its proponents and opponents variously say it does, following the bouncing ball is a better way to understand reality.

 

Where’s that win pocket again?

 

As Lynn’s report puts it:

 

Because Chapter 40B is so important for multi-family housing production and because 40B projects often are controversial, it is critical to understand how the law actually works in practice.  Which projects are built with little controversy; which are substantially delayed; and which never get built? How much time does the process take? How litigious is the process? What influence, if any, does the process have on the design and location of the projects that ultimately get built?

 

Until now, it has been impossible to answer such questions because no one had collected comprehensive data on both built and unbuilt projects. 

 

From a worm’s eye view, journalist and Norton resident Bill Gouveia put it this way about his home town’s experience with 40B:

 

How it looks to a locality?

 

It would be nice to think Norton achieved this goal [10% affordable housing – Ed.] out of a real desire to help its citizens live affordably. But the truth is Norton has greatly increased its level of affordable housing because of Chapter 40B, not despite it.

In other words, the bottom line is – this law works.

 

That’s unquestionably true from a policy and demographic perspective.  Just look at the results:

 

As a result of such construction, the number and type of communities that exceed the 10% threshold has grown and changed. 

 

Illustratively, in 1997 328 of the state’s 351 cities and towns did not meet the 10% threshold that would exempt them from HAC review.

 

In 1997, 7% of Massachusetts – 1 out of 15 communities – passed the 10% threshold, and most of those would have passed by virtue of having been large or old or poor. 

 

Chapter 40B: where it was in 1999

 

Moreover, most of the 23 communities that exceeded the 10% threshold were older cities that were home to the state’s poorest residents, such as Boston, Chelsea, Brockton, Lawrence, and Lowell. 

 

Fourteen out of fifteen communities statewide flunked.

 

F is for 40B

 

Chapter 40B remade our map:

 

By 2005, 39 communities and by 2008, 55 communities exceeded the 10% threshold. 

 

The 2005 success rate was 11% (half again as many qualifying communities) and the 2008 success was 16% (more than double). 

 

Many (but not all) the newer additions to the list were in the fast-growing areas between and adjacent to the region’s two ring highways I-95/128 and I-495 corridor, such as Andover, Canton, Framingham, and Marlborough.

 

The location of expanding-affordable communities is in some ways as significant as their existence.  Affordability was being driven into communities experiencing growth, the reverse of the economic enclaves and exclusion that tends to characterize locally-controlled development.  Affordable housing was and is being injected into the state’s growth areas.

 

But how?  Trends occur not in the abstract but in dozens – or, in our case, a dozen dozen – individual cities and towns throughout the state.

 

To fill this gap, in 2007 and 2008 we contacted officials in 144 cities and towns surrounding the city of Boston to explore their community’s experiences with the law between 1999 and 2005. 

 

We ultimately received responses from officials in all but two of those communities and information on 404 separate projects in 115 cities and towns [Shame on you, Sharon and Maynard! – Ed.].

 

First important point: she got a broad and exhaustive sampling.  There’s likely neither selection bias nor reporting bias in her figures.

 

And you can count on it!

 

Second point: 40B produces lots of volume:

 

Total 40B Units

 

Nearly 19,000 units of new housing obtained building permits resulting from 40B comprehensive permit applications in the study group. To put that number in perspective, we estimate (using tax assessor records) that 40B units represent over 25% of all housing production in the 144 towns in the study between 2000 and 2006.  

 

That’s all housing, including ownership.  The fraction of rental is even larger:

 

We also calculate that 46% of all new multifamily housing units, and nearly 70% of all rental housing units produced in the region are 40B units.

 

Whether by accident or evolutionary adaptation, Chapter 40B has gone from being an alternative vehicle to the principal crowbar by which NIMBYite communities are forced to accept affordable housing.  So the tale of 40B isn’t just the tale of one law, but of all affordable (nearly all of it rental) housing in the Commonwealth.

 

Take that, NIMBYism!

 

Over time, the law has become the major source of new, permanently subsidized housing in greater Boston.  The 2006 “Greater Boston Housing Report Card,” for example, estimated that between 2002 and 2005, over half of new subsidized units in greater Boston – and more than 70% of the subsidized units built outside of the city of Boston proper – were produced via the 40B process.  Consequently, the law has become increasingly controversial, particularly in communities where it has been used to build substantial amounts of new, relatively dense, multi-family housing.

 

While Lynn’s report doesn’t delve into motivations, I have always found the NIMBY responses hard to categorize.  Are they objecting to ‘those people’ in their midst?  Do they resist density just because, like Lord Wellington, they want to preserve their bucolic internet-enabled Dunkin-Donuts-banning hamlet?  Is this just nostalgia for an imagined nonexistent past?  I’m never quite sure, except that it’s often the communities most prideful of their progressiveness that are the most vociferous opponents.

 

What do you mean I’m not progressive!

 

 

[Continued tomorrow in Part 2]

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