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The Impact of Chapter 40B: The 1969 Massachusetts Comprehensive Permit and Zoning Appeals Act

Presentation delivered by Dr. Sharon Krefetz.
The approach the Massachusetts statute uses to take aim at overcoming exclusionary zoning and increasing the supply of affordable housing in metropolitan areas outside the cities is to give "qualified developers" who are seeking to build (or willing to build) affordable housing a way of gaining entree to communities whose zoning ordinances make it difficult or impossible to build such housing in them, e.g., they don't allow any multi-family housing or they require very large minimum lot sizes. 40B offers communities an incentive to get affordable housing built: "If they do the right thing" they can get "a safe harbor" or immunity from the most controversial feature of the law, a possible state override of their local decision to deny a permit for the project. The specific features of 40B are that it:
  • Provides a simplified, streamlined procedure that "qualified developers"--the local housing authority, a non-profit organization, or a private developer with a government subsidy--can use when proposing a low-and moderate-income housing (LMIH) project. Such developers can use 40B to get a "fast track," one-stop approval process-they only need to apply to one local authority, the Zoning Board of Appeals (ZBA), for a Comprehensive Permit (CP) to build subsidized housing. Upon receiving a CP application, the ZBA is required to notify other local boards and hold a public hearing within 30 days. It must then grant or deny the Comprehensive Permit within 40 days of the hearing.

  • Grants developers the right to appeal adverse local decisions--either outright denials of permits or approvals with conditions attached that make the project "uneconomic"--to a special state body, the Housing Appeals Committee (HAC), which the legislation created. The HAC, whose five members are appointed by the Governor and the head of the state Department of Housing and Community Development, is authorized to conduct a hearing to determine whether the ZBA decision was "reasonable and consistent with local needs." If it determines that it was not, 40B empowers the Housing Appeals Committee to override the local ZBA decision and order the granting of a Comprehensive Permit to the developer.

  • Establishes standards for determining whether ZBA denials are "consistent with local needs," and in so doing effectively sets an affordable housing goal or "fair share quota" or "threshold" for all communities. 40B says that developers are not entitled to an HAC appeal and a ZBA denial will be allowed to stand if 10 per cent of a community's total housing stock consists of subsidized housing for low and moderate income households. This is the "safe harbor" provision for communities.
Chapter 40B also specifies that when an appeal of a ZBA denial or approval with "uneconomic" conditions is brought to the HAC, the burden of proof is on the local zoning board to demonstrate that there is "a valid health, safety, environmental, design, open space, or other local concern...that outweighs the regional housing need." This is a very significant requirement since historically the courts have given "presumptive validity" to local authorities' decisions in zoning cases.

The big question my research has been aimed at addressing is: After thirty-plus years, what has been the impact of the Massachusetts Comprehensive Permit and Zoning Appeals Act? I conducted a survey of CP applications received by Massachusetts cities and towns, and reviewed appeals made to the HAC, from 1970, when the statute went into effect, through 1999. I've also up-dated some of the data with estimates of activities during 2000.
  • Table 1 shows that, since 40B went into effect in 1970, at least 700 applications for Comprehensive Permits to build over 55,000 units of housing have been submitted to ZBAs in at least 223 cities and towns throughout Massachusetts (Figure 1)---that's about two-thirds of the 351 cities and towns in the state.

  • Table 2 shows that, as a direct result of 40B, low and moderate income housing has, in fact, been built in at least 175 cities and towns. More than 25,000 units of housing have been built with 375 Comprehensive Permits, and approximately 20,000 of these are affordable units.

  • Figure 2 shows that most of the CP housing developments are located in the suburbs of Boston and the state's other large cities, Worcester, Springfield, and Fall River, as well as on Cape Cod.
That 40B has directly resulted in the construction of affordable housing in approximately half of all municipalities in Massachusetts, and in most of this state's suburbs, suggests that it has, indeed, had quite a dramatic impact on the landscape. Indeed, I don't think it's an overstatement to say that 40B has profoundly altered the geography of affordable housing in Massachusetts. And I think it's safe to say that without the statute much less affordable housing would have been built in Massachusetts and the locations of such housing would have been far more limited, i.e., much more heavily concentrated in the cities and inner ring "suburbs." In fact, in 1972, nearly half of all Massachusetts communities had NO affordable housing units, whereas by 1997 only 15% lacked such housing. During this period, over 60% of the 119 towns that went from having no affordable housing to having some, had it built directly thru the Comprehensive Permit process. And other communities were "inspired" by 40B to build affordable housing.

40B was not an overnight success. Throughout the 1970s, proposals made in scores of communities to build affordable housing using its provisions almost invariably sparked tremendous controversy and considerable conflict. Many towns denied CP applications either outright or effectively, by granting them but with "uneconomic" conditions imposed on them. And when the HAC regularly overturned local decisions that got appealed, many towns took the HAC to court, to challenge its authority and/or its specific decision. Even though the Massachusetts courts upheld the constitutionality of the statute, and upheld every HAC decision that was appealed by a community, sometimes by dragging out the proceedings "communities lost the battle but won the war"--early on, a non-trivial amount of the housing that got approved never got built. And there were repeated attempts in the state legislature during this period to repeal or weaken the statute.

Since then, however, while the pattern has not been a simple linear progression, my research found that 40B has become much more accepted. One of the most striking changes I discovered, comparing patterns in the 1970s to those in the 1990s, which you can see in Table 3, is that:
  • Overall, opposition to 40B proposals by local communities has decreased substantially. Outright denials of CP applications have declined from 40% in the 1970s to 20% in the current decade; and there's been a significant rise in the granting of CPs with conditions (from 39% to 53%). Sometimes abutters do still get incensed and take their opposition to court--NIMBYism (not in my back yard) lives on, and affordable housing is still viewed by some as a LULU--a locally-unwanted land use.

  • Another very significant change over time, as Table 4 reveals, has been in the proportion of ZBA decisions overruled when appealed to the State Housing Appeals Committee. Overrulings decreased appreciably (from 46% in the 1970s to 23% in the 1990s), and the proportion of cases decided by "Stipulation," i.e., by a negotiated compromise between the parties, increased markedly (from 13% to 37%).

  • And, significantly, there's also been a major shift from housing proposed and built predominantly for the elderly. A majority of the projects buillt in the 1970s ( 56%) were for the elderly, whereas approximately three-quarters of the projects built in the 1990s were for families.
Over the years, local and state officials have been "educated" by and made accomodations to each other. It seems that more and more communities (though not all) have learned how to "live with affordable housing"--how to negotiate compromises with developers proposing it and how to set "reasonable conditions" that ensure that the housing that gets built doesn't overwhelm their community or alter the character of their town. They've learned that "reasonable" conditions can be placed on the developers, without resulting in an appeal to the HAC or, if appealed, without producing an override of their decision. Local ZBAs can make the projects more acceptable to local sensibilities, for example, by specifying certain landscaping features, types of lighting, fencing, parking locations, and so on that help the housing blend in. And as more and more of the housing projects have been built, it's become apparent that the housing can be attractive, can blend in with the surroundings, isn't an eyesore, and doesn't get inhabited by people who don't take care of their property or have unruly children.

State officials have learned that economic and political realities require them to cut local communities more slack to use the law in ways that are more palatable to local residents. They've also learned that more proposals for affordable housing are likely to get built if they help communities and developers work out compromises both sides can live with.

The significant shift from 40B housing being proposed and built mainly for the elderly to a majority of the housing proposed and built for families reflects a conscious effort on the part of state housing administrators and policy-makers and some important changes in the state's economic context, in suburban housing markets, and in political contexts in the 1980s. By the early 1980s, it was evident to housing activists that a disproportionate amount of elderly housing, but very little family housing, had been built through 40B. The considerably higher rate of acceptance by local communities of proposals for housing for the elderly throughout the 1970s presumably reflected positive images of the elderly vs. negative images of the families they feared would occupy the "subsidized housing."

As a corrective to this trend, in the mid-1980s, as the economy began booming, and housing prices began skyrocketing, Governor Dukakis's administration seized the opportunity to build political support for new state housing programs, largely aimed at providing housing for families. With more and more young families priced out of the homeownership market, and rental property vacancy rates low, the low and moderate income housing-production-oriented individuals in the Dukakis administration made the case that to continue to attract and retain industry the state needed to increase the supply of affordable housing for families. And they garnered political support for several important new state housing subsidy programs.

A serious economic downturn and housing slowdown in the late 1980s and early 1990s led to a change in the state's political regime, a resulting decline in state government activism in the affordable housing arena, as well as a sharp reduction in the amount of 40B activity and in the amount of affordable housing built in Massachusetts. However, as the economy began improving and housing prices began to soar, in the mid-to-late 1990s-with the median price of a home in Greater Boston up to around $300,000 (it's now nearly $500,000), there was also a growing local recognition of the need for affordable housing in many suburban communities. Many communities seemed especially receptive to the idea of getting more affordable housing created for those thought to be particularly "deserving," but priced out of the market, namely, for suburban born and bred young couples, and for town employees, such as teachers, police, and fire fighters, unable to live in the communities they were raised in or serve through their work for the municipality.

However, in the past couple of years, the booming housing market has led to growing local concerns about over-development,increased service burdens, and increased taxes in many communities in the Greater Boston area (which keeps spreading out farther and farther into once rural communities located along the major interstate hiways). And a backlash against 40B has been triggered by some developers who responded to the combination of a hot housing market and local zoning restrictions limiting their ability to build sizeable developments, by using 40B as a way of getting in on the action in "ripe for development" communities. A substantial increase in 40B proposals by private developers able to get loans from the Federal Home Loan Bank of Boston that qualify as "subsidies" to use for set-aside developments, with 75% market rate, and 25% subsidized affordable unit proposals and proposing to build some very large scale projects--of 300 or 400 houses, or condos, or apartments--sparked a slew of proposals in the state legislature seeking to weaken or modify 40B.

The House passed several modifications to the Act in 2001, which were mainly aimed at broadening the definition of what "counts" as affordable housing to make it easier to reach the 10% threshhold/safe harbor. The lock-in period for the affordable units was also increased to a minimum of 30 years, a way of dealing with the expiring use problem of many once-affordable units moving into the market-rate sector after the initial affordability restriction has ended. The Senate rejected some of the most problematic proposals, including counting Section 8 certificates.

Affordable housing advocates and the state Department of Housing and Community Development are currently working with legislators to propose changes to 40B to stave off the gutting of the statute and to address some of its weaknesses. Among the changes proposed are recognizing progress toward the 10% goal by allowing a ZBA to deny a CP (without a developer being able to appeal the denial) if the town has added 2% low and moderate income units in the past year, and allowing a denial for large-scale developments, defined as 300 or more units in towns with 7500 or more housing units, and defined by smaller numbers in towns with smaller amounts of housing.

There are the lessons to be learned from the Massachusetts experience. The statute has, over time, had substantial impact in increasing the supply and the location of affordable housing throughout metropolitan areas across Massachusetts. It has proven to be a useful tool to have in the toolkit for "opening up the suburbs." But it's a limited tool-other tools, including more state and federal subsidies to build affordable housing, and more aid to local governments to offset the increased costs of services to the occupants--especially education costs--are needed to address the critical need for more affordable housing, and particularly for housing that will provide greater mobility opportunities for lower-income households, and for minorities still largely concentrated in the central cities to gain improved access to employment and other benefits suburban locations offer.


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