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October 24, 2007... Yesterday, Sen. Richard T. Moore, D-Uxbridge, delivered testimony before the Joint Committee on Housing in support of legislation he filed that would, among other things, increase the required amount of affordable unites in a 40B development from 25 to 33 percent. 

“To solve Massachusetts’s affordable housing problem, the state, municipalities, and housing developers must work together,” testified Moore. “This is something that Chapter 40 B, in its present form, does not do. It pits communities against developers and destroys the partnership we need to build a stronger, more affordable Massachusetts.”

The text of Sen. Moore's testimony:

Testimony of Senator Richard T. Moore before the 
Joint Committee on Housing in support of S. 767, An Act Reforming MGL Chapter 40B.

There is little debate that Massachusetts needs more affordable housing. Countless constituents contact legislative offices looking for less expensive homes and report, after report cite housing costs as one of Massachusetts’s largest impediments to economic growth. Many will claim that these facts make Chapter 40B an invaluable housing creation tool. These claims are wrong. To solve Massachusetts’s affordable housing problem, the state, municipalities, and housing developers must work together. This is something that Chapter 40 B, in its present form, does not do. It pits communities against developers and destroys the partnership we need to build a stronger, more affordable Massachusetts.

Senate Bill 767 and an amendment I outline below, would revise Chapter 40B to promote the partnerships needed to solve Massachusetts’s affordable housing problem. These proposals would close the loopholes developers use to exploit Chapter 40B and would help towns properly oversee the permitting and construction of a Chapter 40B development. These changes would bring the statute more inline with its original legislative intent and would make the entire 40B process less acrimonious and more able to truly promote affordable housing. 

Briefly, my proposed reforms would:

1) Require direct public financial subsidies for 40B projects. This subsidy would bring more oversight from state and federal agencies and subsequently reduce the abuses of the law that have occurred. 

2) Increase the percentage of required affordable housing in a 40B developments from 20-25% to 33%. In the last 3 years 30% of all new construction has been proposed under 40B. This leaves little doubt as to the profitability of these developments and illustrates that developers can afford to build more affordable units in each project.

3) Limit the profits of 40B developments. The law was initially drafted to limit the profits of these developments to 20%. However, in recent years, developers have found ways to inflate project costs beyond their actual investment. This would bill would limit developers to seeking 20% profit on only their actual investment. 

4) Limit the waivers a developer can seek under Chapter 40B to density and lot area requirements. Lot size and density restrictions are widely seen as the major impediments to affordable housing. This would allow developers to seek waivers for these requirements while keeping other local regulation such as sewer connection regulations and use zoning.

Finally, I have included additional language that would strengthen the technical support available to communities having to oversee the permitting and construction of a Chapter 40B development. Presently, communities can apply for a modest sum of money through the Massachusetts Housing Partnership. This money is to help a municipality review a developer's permit proposal. However, the permitting process is but the first step in a 40B development. The Zoning Board of Appeals is also must make sure that the developer adheres to the comprehensive permit and is ultimately responsible for ensuring that other town boards properly inspect a project. Volunteer Zoning Boards of Appears are very unlikely to have the technical engineering expertise to carryout this type of oversight. An expanded technical assistance program would give cities and towns the money they need to oversee the project during construction and its final cost certification. It would allow the community to contract with skilled engineers to ensure that developers are adhering to the comprehensive project the town approved, to ensure that the project is being built to code, and, when all is said and done, to ensure that developers are truly only realizing a 20% profit on their projects. 

Affordable housing is extremely important to our state’s quality of life and economic prosperity. It is of such importance that our Commonwealth must promote it in a manner that draws together housing developers and community leaders. Chapter 40 B, as it is currently drafted, fails in this very important mission and I look forward to working with the Committee to change this. 

Thank you.

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