40B: A Primer

 

On Thursday, December 16, the Arlington Redevelopment Board discussed the draft Arlington Housing Plan, a required update to our Housing Production Plan of 2016.  At the end of the evening they requested a “refined” draft from Barrett Planning Group, the consultant, which they expect to discuss at their January 24 meeting.  The draft leans heavily on 40B projects as a means to increase our supply of affordable housing, despite the fact that after over 50 years of 40B legislation, Massachusetts remains one of the least affordable housing markets in the country. 

The 40B statute, aka the Comprehensive Permit Law, was enacted in 1969 by the state of Massachusetts in the hope of increasing the supply of affordable housing.  In communities with little affordable housing—less than 10% of year-round housing or 1.5% of land area—it allows developers to bypass local zoning and environmental bylaws if 20-25% of a project’s units are designated as “affordable.”  That is usually defined as affordable for those making up to 80% Area Median Income (AMI).

40B was originally well intentioned, and was successful when used by churches and charities to provide housing for those with extremely low incomes.  In the late 1980s, the development industry lobbied to convince the Law's regulating agency, Department of Housing and Community Development, to allow 40B to also provide for ownership units.  This was accomplished without any formal Legislation, or debate, or recorded votes.  Even more concerning was the impact on the numbers of affordable rental units, which experienced a steady decline.  40B has been allowed to become a construction juggernaut masquerading as an “affordable” housing program. 
 
The Law requires 40B developers to return profits above the 20% allowed to the community for its own affordable housing programs.  But the Office of the Inspector General has produced reports describing lack of enforcement of this part of the Law, as well as detailing means by which developers extract profits beyond those allowed.  Audits showed that as much as $110 million of excess profits has never been returned.  Most municipalities lack the means to audit and enforce return of these profits, and Arlington is no exception.  Former State Inspector General Gregory Sullivan revealed that the developer for the Minuteman Village 40B project on Brattle Street has not paid to Arlington $500,000 of excess profits as required by law, well over a decade since it was completed.  Sullivan discusses other instances of 40B fraud in this article. 

Minuteman Village

40B PROS

• One of every four units in 40B projects must be “affordable” for moderate income residents (approximately $100,000 annual income for a family of 4).  
• The pros are terrific for developers.  40B developers reap handsome profits, and so do their consultants, lawyers, architects, planners, complicit “non-profits,” and the politicians whom they support.   

40B CONS

• 40B does nothing to provide housing for those of very low income, or those in danger of homelessness. 
• 40B allows builders to ignore zoning laws and demolish existing homes, businesses, and historic buildings.
• 40B builders can violate environmental safeguards.
• They can increase teardowns, with the accompanying release of embodied energy and other negative environmental consequences.
• They can build on existing open space needed for hazard mitigation and for recreation.
• Their increased density puts pressure on parks, playgrounds, and infrastructure. 
• It leads to increased residential taxes and overrides of tens of millions of dollars, causing displacement of existing residents who cannot keep up with these increases.
• The statute does not require perpetuity deed restrictions, resulting in affordability expiration and demand for more 40Bs.
• If unlimited 40B projects are allowed here, Arlington will become even more dense, congested, traffic-plagued, and urbanized.  New elementary schools, each costing between $50-$100 million, will have to be built.  (For every 10 households, there are approximately 3 Arlington public school students. So 80 new households would likely result in 24 new students, enough to fill one classroom. The 2015 McKibbon forecast, upon which we base our enrollment planning, does not account for a large growth in population.  The Census Bureau reports that our population has grown to 46,308.  The McKibbon study predicted that we would not reach that level until the 2030’s.)
• 40B ignores and distracts from the major advantages of the ideal Section 8 housing voucher affordability program, administered by the Arlington Housing Authority, with tremendous benefits for those of very low income.
• The success of AHA and Housing Corporation of Arlington in acquiring existing scattered-site properties and apartment buildings for renovation and use as affordable units would be threatened by competition from 40B developers.

The draft Arlington Housing Plan recommends increasing the residential density of Arlington, relying on an embrace of 40B housing to do so.  This, even though corruption endemic in the Massachusetts 40B industry is a leading cause of Massachusetts’s abysmal ranking in affordability, and its increasing numbers of homeless residents. 

 
Fortunately, the draft Plan also acknowledges that if we have reached 1.5% land area affordability we do not need a Housing Plan.  And with the approval of the Mirak and Mugar 40B projects, Arlington is now very close to the 1.5% land area requirement, giving it statutory safe harbor status from future 40B projects.

The Town’s Department of Planning and Community Development must now quickly work to certify the 1.5% General Land Area, as recommended in our Master Plan implementation goals.   The Select Board should require that the recommendation for more Arlington 40B projects be removed from the draft Arlington Housing Plan.