Chapter 40B housing is a Massachusetts state statute that enables certain kinds of affordable housing developments to be built by overriding local zoning bylaws. The law was passed in 1969 to assure that at least 10 percent of housing stock remains affordable. The goal of Chapter 40B is to allow working families and seniors to remain in their communities when they might otherwise be priced out of the conventional housing marketing. The statute was designed to permit the development of multifamily and affordable housing in suburban and rural parts of the state.
Who can take advantage of Chapter 40B Housing?
In order to qualify for Chapter 40B housing, at least 20-25% of any proposed development has to provide housing which serves households at or below 80% of the area’s median income. Such housing developments can be for rent or for sale as long as the affordable units are permanently restricted to remain affordable.
Since the Chapter 40B went into effect, 56,000 units in over 1,000 developments have been created. Of those units, 30,000 units are reserved for households earning below 80% of the median income.
How is Chapter 40B Housing different from other affordable housing programs?
What distinguishes Chapter 40B housing from other affordable housing programs is that there is no “subsidy” or state budget allocation. Instead, the cost of the affordable units has to be absorbed by the developer as part of the overall financing of the project. The market rate units in the development have to make up for the difference since the affordable units must be sold or rented below their market value.
Additionally, the statute places profit restrictions on developments built under Chapter 40B. If the profits exceed 20%, the developer must return its “surplus” profits to the community in order to further its affordable housing goals or the subsidizing agency.
SEB and Chapter 40B Housing
SEB has been on the forefront of Chapter 40B housing since the inception of the statute. Over the past forty years, SEB has been involved in the permitting and construction of over 9,000 housing units in over 100 different projects. They have represented both developers and communities in the negotiations leading to the permitting of a project, and in many cases providing technical assistance in securing financing. Involved in every stage of the process, SEB has led local workshops, produced materials for the Massachusetts Department of Housing & Community Development, testified at public hearings and before the Housing Appeals Committee, and administered housing lotteries for affordable units.
SEB has worked with 180 municipalities over the past forty years. No other consulting firm in the state has represented more developers seeking to use Chapter 40B to build new developments. SEB has also been involved in marketing more affordable units than any other lottery agent in the state. SEB’s experience and expertise are well recognized and the value SEB brings to its clients is evident in the number of 40B jobs for which SEB has been retained (200+).
SEB can secure sites, permits, financing, and affordable buyers or renters, and can ultimately make a complicated process work as effectively as possible.
Contact us today or call us at (617) 782-2300 to learn how SEB can help you build new homes in Massachusetts.
