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What is 40B housing in Massachusetts?

40B housing refers to affordable housing developments that are created under Massachusetts General Law Chapter 40B. This law was enacted in 1969 to help address the shortage of affordable housing statewide by reducing barriers that often make it difficult to build affordable housing. The law promotes the production of affordable housing by enabling local Zoning Boards of Appeals to approve affordable housing developments under flexible rules if at least 20-25% of the units have long-term affordability restrictions.

What are the requirements for 40B housing?

There are several key requirements for 40B housing developments in Massachusetts:

  • At least 20-25% of the units must be income restricted and deed restricted for long term affordability. For rental units this generally means renting to households earning at or below 80% of the Area Median Income. For homeownership units, households earning up to 100% AMI are eligible.
  • The affordability restrictions must last in perpetuity (forever).
  • The development must obtain a letter from a subsidizing agency confirming that the project appears generally eligible for a housing subsidy under their program. This is called project eligibility letter.
  • The comprehensive permit application must demonstrate the need for affordable housing in the municipality.
  • The Zoning Board of Appeals reviews the comprehensive permit application under flexible rules. The town must approve the project if their concerns are addressed.
  • In communities below 10% affordable housing stock, developments with at least 25% affordable units qualify.
  • In communities above 10%, developments with at least 20% affordable units qualify.

Essentially, the law allows developers to bypass local zoning and other restrictions if the project contributes to the regional need for affordable housing. The “comprehensive permit” process established under 40B streamlines the approval process into a single local review.

What is the purpose and goal of 40B?

The purpose of 40B is to help address the shortage of affordable housing in Massachusetts by promoting the production of affordable units.

Specific goals include:

  • Encourage production of affordable housing in all communities throughout the state.
  • Provide affordable housing options to low and moderate income households who would otherwise have difficulty finding homes.
  • Reach a minimum threshold of 10% affordable housing in every community.

This law recognizes that high housing costs are pricing many residents out of communities, while some local restrictions make it difficult to build diverse housing options. The comprehensive permit process aims to balance local needs with the broader need for more affordable housing production.

How does the comprehensive permit process work?

The comprehensive permit process under 40B allows developers to apply to the local Zoning Board of Appeals for approval to build housing that meets the requirements of the law. Here is an overview of the 40B comprehensive permit process:

  1. Developer obtains site control of land for a proposed 40B development.
  2. Developer negotiates for a “project eligibility letter” from a subsidizing agency.
  3. Developer applies for a comprehensive permit to the ZBA with affordable housing qualifications.
  4. ZBA holds a public hearing within 30 days of receiving the application.
  5. ZBA reviews project under more flexible rules to approve if concerns are addressed.
  6. ZBA has 180 days to make a decision on the comprehensive permit.
  7. If approved, the comprehensive permit replaces the need for separate approvals (like variance, subdivision approval, etc).
  8. Appeals of the ZBA decision may be made in court.

This consolidated “one-stop” process replaces separate reviews by various local boards. The ZBA has more flexible standards to approve the project if it meets local concerns. The goal is to promote affordable housing by streamlining local barriers.

How is the 10% minimum calculated?

Chapter 40B establishes a goal for all towns and cities in Massachusetts to have a minimum of 10% of their housing stock affordable to low/moderate income households. The 10% minimum is calculated as:

  • Total # of low/moderate income housing units on Subsidized Housing Inventory (SHI)
  • Divided by total # of year-round housing units in latest census

So for example, if a town has 1,000 SHI eligible units, and 12,000 total year-round units, their percentage of affordable units would be 1,000/12,000 = 8.3%

The Subsidized Housing Inventory (SHI) is the official list compiled by DHCD to track each municipality’s percentage of affordable housing units. All affordable units must meet requirements to qualify for inclusion on the SHI.

What housing units qualify for the SHI?

There are specific requirements for an affordable unit to qualify for inclusion on the Subsidized Housing Inventory (SHI):

  • Unit must be deed restricted as affordable for income eligible households.
  • Affordability restrictions must be for minimum duration of 30 years.
  • Unit must be subject to an Affirmative Fair Housing Marketing Plan.
  • Project must meet all requirements of Department of Housing and Community Development.

Additionally, SHI eligible housing falls into one or more of the following project types:

  • Chapter 40B rental and ownership units
  • Rental units subsidized by state or federal programs
  • Homeownership units subsidized by state or federal programs
  • Rental units built through Local Initiative Program (LIP)
  • Accessory apartments approved by local zoning board
  • Group homes for adults with disabilities or long-term care needs

The SHI list is updated each year by DHCD based on reporting by project owners or subsidy agencies. Units must continue to meet affordability requirements to stay on the SHI.

How does being above or below 10% impact projects?

Whether a community is above or below the 10% state goal for affordable housing impacts the minimum affordability percentage required for 40B projects:

  • Below 10% – Developments must include at least 25% affordable units
  • Above 10% – Developments need only have 20% affordable units

Additionally, for communities below 10%:

  • Challenging the “local need” for affordable housing is very difficult
  • ZBA’s ability to deny comprehensive permit is limited
  • Cities/towns are at greater risk for approval of unwanted projects

Whereas when above 10%, communities have more power to shape development projects. However, all communities are subject to Chapter 40B considerations regardless of their percentage of affordable units.

What housing costs are considered affordable?

For rental units, the general standard is that monthly housing costs (rent and utilities) must not exceed 30% of monthly income for a household earning up to 80% of Area Median Income (AMI). Specific affordability standards are tied to the minimum incomes served by each housing subsidy program.

For homeownership units, the standard is housing costs (mortgage, insurance, property taxes, etc) must not exceed 30% of monthly income for households earning up to 100% AMI. The exact income limits vary by municipality and household size.

AMI levels are updated annually by the U.S. Department of Housing and Urban Development (HUD) for each metropolitan region. Municipal-specific AMI data can be found on the DHCD website.

How long do affordability restrictions last?

For rental units in a 40B development, affordability restrictions must be maintained in perpetuity – meaning forever. The units in the project must always remain affordable.

For homeownership units, the restrictions last for a term of years, generally 30-50 years from initial occupancy. After the term expires, units may convert to market-rate pricing.

Ensuring perpetual affordability is a key goal of Chapter 40B. Temporary affordability, while helpful in the short-term, does not provide a lasting stock of affordable housing options.

What housing types can be built under 40B?

A variety of residential development types can potentially qualify for approval under 40B rules. Some common examples include:

  • Apartment developments – either new construction or adaptive re-use
  • Single family subdivisions with a mix of market rate and affordable homes
  • Two- or three-family homes
  • Supportive housing for vulnerable groups like seniors, veterans, or disabled residents
  • Assisted living facilities, combining housing and services

40B does not specify permitted housing types. Multi-family developments tend to be more common, as increased density supports the cost of including affordable units. But single-family homes and other models can certainly comply, if local zoning allows. Communities may see 40B projects ranging from just a few units up to hundreds of units, with a wide variety of designs.

What qualifies a household for affordable housing?

Households must meet certain income limits to qualify for affordable rental or homeownership opportunities created under 40B. Key eligibility criteria include:

  • Income – Total household income must be below a specified % of Area Median Income (AMI). Examples: 60% AMI, 80% AMI, etc.
  • Assets – Many programs limit total assets to ensure units serve lower-income groups.
  • Occupancy – Most units require the household live there full-time as primary residence.
  • Citizenship – Proof of citizenship or legal permanent residency is typically required.

Income limits, asset limits, and other criteria vary based on specific housing program regulations. Developers work with subsidy agencies to set eligibility standards that align with the populations intended to be served within each community.

How are affordable rents and sales prices set?

Rents and home prices for 40B affordable units are set based on a formula tied to Area Median Income (AMI). The specific calculations include:

  • HUD publishes annual AMI estimates for each metro region, adjusted by household size.
  • Developer selects income level to target – e.g. 60% AMI.
  • Rents are set at 30% of monthly income at the target AMI level.
  • Home prices affordable at the AMI target using standard mortgage underwriting.

For example, if the AMI for a 4-person household is $100,000, 30% of the monthly income for a family at 60% AMI would equate to a monthly rent of $1,500.

Rents and prices must remain aligned with the appropriate % of AMI each year. Housing authorities publish updated AMI data annually.

What are examples of subsidizing agencies?

Subsidizing agencies play an important role in 40B developments by providing financing, subsidies, or project eligibility approvals. Some key examples of subsidizing agencies in Massachusetts include:

  • MassHousing
  • MassDevelopment
  • Department of Housing and Community Development (DHCD)
  • US Department of Housing and Urban Development (HUD)
  • Massachusetts Housing Partnership (MHP)
  • Community Economic Development Assistance Corp (CEDAC)
  • Regional Housing Agencies

These agencies administer a range of programs for affordable housing preservation, creation of new affordable units, and rental assistance. Many provide direct project subsides such as low-interest loans or grants. Their mission is to support increase affordable housing opportunities.

What are the benefits of 40B housing?

When implemented thoughtfully, 40B developments can provide many benefits to communities, developers, local government, and recipients of affordable units. Some key potential benefits include:

  • Increases supply of affordable housing options in communities
  • Helps low/moderate income households live in communities of opportunity
  • Promotes socioeconomic and racial diversity within towns
  • Provides housing choices for seniors, working families, and other groups
  • Allows developers to build in locations with high market demand
  • Streamlines permitting enables projects not feasible under conventional zoning
  • Municipalities can collect tax revenue while meeting housing goals
  • Creates opportunities for public-private partnerships on housing issues

When thoughtfully implemented, 40B developments can yield win-win solutions that meet the needs of multiple stakeholders. However, communities must be willing to listen to concerns, ensure local voices are heard, and work to shape projects responsibly.

What are potential concerns about 40B housing?

While intended to create more affordable housing, there are some frequent concerns raised by communities regarding 40B developments:

  • Too much control given to developers over local zoning
  • Potential over-development if projects are out-of-scale with neighborhood
  • Loss of open space and concerns about density
  • Increased traffic congestion and parking challenges
  • Strain on public infrastructure like roads, utilities, trash
  • Worry about impacts on school system from influx of new families
  • Fear that market rate housing prices may decrease
  • Concern about transient residents vs stable community

These concerns are understandable, though not always supported by facts or data. Still, the concerns are real for many existing residents. Responsible 40B development requires taking these worries seriously, engaging the community, and shaping projects to address legitimate issues.

How can communities influence 40B projects?

While the 40B process reduces local control, communities do have strategies to influence the outcome of comprehensive permit projects. Municipalities can shape 40B developments through:

  • Proactive planning and zoning reform to guide smart growth
  • Reasonable negotiations with developers on specific project concerns
  • Contribution of municipal site(s) and/or funds to improve affordability
  • Incentives for developers to increase affordability beyond minimums
  • Partnerships with non-profits to create desired affordable models
  • Intervention to purchase site and issue an alternative RFP
  • Pursuing legal appeals if approvals fail to meet key criteria

Communities achieve the best outcomes when they are informed, organized, and engaged in the process proactively, rather than reacting defensively. Municipalities can influence both the quantity and quality of local affordable housing.


Massachusetts Chapter 40B provides an important legal tool to expand affordable housing opportunities in communities across the state. The law reduces local barriers to building affordable units, enabling projects to meet regional needs. With thoughtful community engagement and responsible development practices, 40B can help create inclusive, diverse communities. Ongoing education and dialogue is critical so this controversial issue can achieve win-win solutions for all involved.