Reports About 40B

To date, the state Inspector General has concluded his investigation into fraud in 40B homeownership units.
An ongoing investigation of 40B rental properties exposes even more problems.

These reports are a scathing indictment of 40B abuses. Highlights include:

  • Almost all of the 40B projects audited during the investigation had millions in excess developer profits.
  • Despite millions of dollars owed to towns by developers, only $17,000 has been refunded!
  • New state-managed 40B reform efforts are making matters worse and encourage opaque financial reporting.
  • Beacon Hill allows developers and their bankers to determine profits and the size of 40B projects.

To watch the video of the Inspector General's testimony, Click Here

In late 2007, pro-40B lobby group Citizen's Housing & Planning Association (CHAPA) was forced to admit that disturbing trends in worsening affordability have been discovered by the national census:

As no suprise to us, rising housing costs continue to burden fellow residents of Massachusetts. Among the most troubling census statistics are:

  • The median cost of renting rose statewide by 20.5% between 2001 to 2006 (from $774 to $933)
  • While rents are rising, median renter incomes declined by 1.5%.
  • Almost half (49%) of Massachusetts renter households are now paying 30% or more of their income for housing in 2006 (a huge increase since 2001).
  • The percentage of renter households paying half or more of their income for housing rose from 17% to 24%.

This is particularly disturbing since Massachusetts already ranks 49th in national housing affordability. It appears our situation is only getting worse! Financial experts say households should never spend more than 30% of their income on housing costs. In Massachusetts, not only is that the standard of 40B, it seems that people simple aren't being given a fair chance at living here.

  • For homeowners, our costs rose twice as fast as our incomes between 2001 and 2006. This occurred at the same time that 40B projects drop up the price of house while developing projects at historic high rates.
  • Costs for families with mortgages rose from $1,468 to $1,965 and for those without mortgages, costs rose from $440 to $616.

Clearly, 40B is not synonymous with affordable housing. During the time period that these troubling trends have occurred, 40B developments have been produced at furious rates. People are finally catching on to the fact that 40B builds mostly unaffordable homes while doing nothing to help our affordable housing crisis.

In March 2007, the Citizen's Housing & Planning Association (CHAPA) published a report detailing the most recent statistics on 40B in Massachusetts since a major study was conducted in 2003.

  • Prior to 1999, 40B rental units had 81% of total units considered 'affordable' rental units. In 2006 it stood at 32.1%
  • Prior to 1999, 40B owner-occupied units had 33.6% of total units considered 'affordable'. In 2006 it stood at 26.6%
  • To make matters worse, 40B owner-occupied proposals in the pipeline have only 19.1% affordable units!

At a recent MIT housing conference, two experts were quoted as saying about 40B:

"There is alot of time & money expended to make this system work and get this housing produced and for better or worse, and I think worse, we've come to rely on 40B as our primary zoning vehicle for multi-family housing, which is really unfortunate."

"This is a statue that should be used as an exception when towns aren't doing a good job. It shouldn't be the thing that developers look to first, we have to close that loophole."

  • Most 40B developments since 1999 has been privately funded by the New England Fund (NEF), which opened the door to builders/developers not previously engaged in subsidized housing
  • Of the communities that achieved having 10% of their housing stock 'affordable', only half were accomplished because of 40B
  • Two thirds of additions to the affordable housing stock in the state since 2001 resulted from repair programs, new qualifying houses that serve the Dept. of Mental Health/Retardation and market rate units in rental developments for which the community gets credit on the inventory but which aren't affordable
  • The report concludes that it is difficult for 40B to serve the neediest households, since it targets those at the upper end of elibility (70-80% of median income)
  • A recent sampling of 40B rental units showed that 10-30% of tenants needed additional rent vouchers just to be able to afford to live in the "affordable" units.