Introduction to Chapter 40B Subsidized Housing Inventory
Chapter 40B of the Massachusetts General Laws, also known as the Comprehensive Permit Law, is a statute aimed at promoting the development of affordable housing in the state. It provides a streamlined permitting process for developers to construct affordable housing units, often overriding local zoning restrictions. A crucial component of Chapter 40B is the Subsidized Housing Inventory (SHI), which is a list maintained by the Executive Office of Housing and Livable Communities (EOHLC). The SHI measures each municipality’s stock of SHI Eligible Housing—units that are affordable and meet specific criteria such as being subject to long-term affordability restrictions and affirmative fair marketing plans. Municipalities aim to have at least 10% of their total housing units on the SHI to meet statutory minima, thereby gaining greater control over comprehensive permit applications. The SHI helps track progress towards local affordable housing goals and ensures that municipalities are actively working to increase the availability of affordable housing.
It is important to note that the SHI fluctuates over time. When new housing units are built in a community, the percentage of SHI Eligible Housing can decrease. Additionally, historically, SHI units had expiration dates of 15 or 25 years, after which they were removed from the SHI list and go to market-rate units at the property owner’s discretion. The current standard for SHI expiration dates, however, is generally perpetual, ensuring long-term affordability.
Criteria for Counting SHI Percentage
1. Grounds for Upholding Board Decisions (760 CMR 56.03(1)):
a. Statutory Minima Achieved: Municipality meets or exceeds statutory minimums as outlined in 760 CMR 56.03(3).
b. Compliance with Housing Production Plan (HPP): Municipality's compliance with its approved HPP certified by Executive Office of Housing and Livable Communities (EOHLC) per 760 CMR 56.03(4).
c. Recent Progress: Municipality has made recent progress towards statutory minima in accordance with 760 CMR 56.03(5).
d. Large Project: The project is considered large as defined in 760 CMR 56.03(6).
e. Related Application: There has been a related application within the specified timeframe per 760 CMR 56.03(7).
2. Subsidized Housing Inventory (SHI) Eligibility (760 CMR 56.03(2)):
a. SHI Maintenance: EOHLC maintains the SHI to measure a municipality’s stock of SHI Eligible Housing.
b. Eligibility Criteria:
i. Units must be subject to a Use Restriction and an Affirmative Fair Marketing Plan.
ii. Units must satisfy EOHLC's guidelines.
c. Counting SHI Units: Units are eligible to be counted on the SHI at the earliest of:
i. Filing of permit/approval with the municipal clerk.
ii. Resolution of the last appeal by the Board.
iii. Issuance of the building permit.
iv. Issuance of the occupancy permit.
v. Occupation by an Income Eligible Household.
3. Time Lapses (760 CMR 56.03(2)(c)):
a. If over a year elapse between issuance of the Comprehensive Permit or zoning approval and issuance of the building permit, the units become ineligible until the building permit is issued.
b. If over 18 months elapse between issuance of building permits and occupancy permits, the units become ineligible until the occupancy permit is issued.
c. Permanent lapse of the Comprehensive Permit or zoning approval results in permanent ineligibility.
d. Phased projects must meet specific conditions to remain eligible.
4. Enforcement and Termination of Use Restrictions (760 CMR 56.03(2)(d)):
a. Use Restrictions must be enforced as specified.
b. Units become ineligible upon expiration or termination of the initial Use Restriction unless renewed.
5. Municipal Certification and Biennial Updates (760 CMR 56.03(2)(e) and (f)):
a. Municipalities must certify the number of SHI Eligible Housing units every two years.
b. EOHLC updates the SHI biennially or more frequently based on new information.
6. Computation of Statutory Minima (760 CMR 56.03(3)):
a. Housing Unit Minimum: Calculated using the latest SHI count and U.S. Census data.
b. General Land Area Minimum: Calculation of SHI Eligible Housing sites and exclusion of certain lands.
c. Annual Land Area Minimum: Calculation based on the commencement of construction and approved sites.
7. Housing Production Plans (HPP) (760 CMR 56.03(4)):
a. Plan Development: Must include a comprehensive housing needs assessment, affordable housing goals, and implementation strategies.
b. Certification: EOHLC certifies compliance based on annual SHI Eligible Housing unit increases.
8. Recent Progress Toward Housing Unit Minimum (760 CMR 56.03(5)):
a. Defined as the creation of SHI Eligible Housing units within the last 12 months equal to or greater than 2% of the total housing units.
9. Review of Large Projects (760 CMR 56.03(6)):
a. Defined based on the total number of housing units in the municipality and the size of the proposed project.
10. Related Applications (760 CMR 56.03(7)):
a. Specifies criteria for considering an application as related based on prior applications and the timeframe of their submission and resolution.
These criteria ensure that the SHI is accurately maintained and updated, reflecting a municipality’s efforts and progress towards meeting affordable housing goals, as overseen by EOHLC.
It is important to understand that the MBTA Communities Act (Chapter 40A §3A) and the Affordable Homes Act do not inherently provide “affordable” housing and will likely decrease a community’s SHI compliance. This means that growth could lead to more Chapter 40B projects in the future. The Chapter 40B statutory minimum of 10% is a constantly moving target as community growth occurs. It is also important to conduct your own due diligence, as Governor Maura Healey, her administration, and her surrogates have presented these as “affordable” housing statutes, which is not the case. Similar laws were implemented in California, which serves as the model for Massachusetts. However, these laws have not been effective in California. Increased densification has not led to lower housing costs for either rental or ownership.