THOMAS GLEASON
Developers stymied

The state’s so-called anti-snob zoning law was under attack once again last week when regulators held a public hearing in Boston to discuss changes proposed to help communities better deal with housing development.

Some supporters of Chapter 40B argued that the proposed modifications would threaten housing production, while opponents said the changes didn’t go far enough to protect communities from unmanageable growth and development.

At least one state leader argued that if the law isn’t radically altered, it should be repealed.

“It should be scrapped,” said Rep. Philip Travis, D-Rehoboth.

At issue were changes ordered by Gov. Jane Swift that would give communities a break from housing developments proposed under Chapter 40B if they increase their housing supply by 0.75 percent each year or if they develop specific housing plans. Swift vetoed a bill this past summer that included a measure that would have allowed communities to reject a housing development proposal if they had demonstrated that they had increased their affordable housing stock by half a percent.

Travis said in the rural towns he represents – Swansea, Seekonk and Rehoboth – local leaders have carefully thought out zoning and developed plans to control growth. But developers coming in with 40B proposals are not subject to those rules.

“That is thrown to the wind,” he said, referring to zoning and other building regulations.

Chapter 40B has been continually criticized by community leaders who feel that developers are abusing the law to build dense projects that overburden local services. The law permits developers to practically bypass local zoning and regulations in communities where less than 10 percent of the housing stock is considered affordable. In return, the developers must set aside 25 percent of the housing in the development for lower-income households.

Housing advocates maintain that the law has been the key vehicle in getting more housing units constructed in communities that have been less than welcoming when it comes to development. Only 28 communities in Massachusetts – or about 8 percent of the state’s 351 cities and towns – have met the 10 percent affordable housing threshold.

“In many places in this state there is no debate about affordable housing, but a debate about development in general,” said Thomas Gleason, executive director of MassHousing, a quasi-public authority that provided more than $562 million in housing loans last year.

“Many developers have been stymied in their attempts to build … because many communities have embraced no-growth policies. So developers turn to 40B as their recourse,” he said.

Gleason said he understands that some communities try to slow growth because of concerns about how it will affect local services like water and sewer. But he said many towns “overestimate the impact that affordable housing development will have on their ability to deliver these services.”

“To be fair, many developers underestimate the impact that their developments will have on towns. Somewhere in the middle is the balance that DHCD and these regulations strive to achieve,” he said.

The Department of Housing and Community Development held the hearing last Monday and will end its public comment period today (Oct. 28).

DHCD will consider all the comments and will file the final version of the regulation with the Secretary of State’s Office. DHCD does not have a set deadline on when the agency will file the final regulation.

‘The Right Direction’

Travis said he is working with Rep. Harriett L. Stanley, D-Merrimac, a vocal critic of 40B, to sponsor legislation next year that would either change the law or eliminate it. Stanley, who was not at last week’s hearing, submitted a five-page letter signed by Travis and eight other legislators.

“Many of us feel that the proposed regulatory changes would have some unintended consequences of their own,” the lawmakers noted in the letter. “Taken as a whole, DHCD’s proposed changes move in the right direction, but do not address many of the underlying problems associated with Chapter 40B.”

In the letter, the legislators reference several changes, including one that has to do with the operation of the Federal Home Loan Bank of Boston’s New England Fund. The New England Fund, which has been a major funding source for 40B projects in Massachusetts, was suspended in August after DHCD demanded that the bank provide greater oversight over NEF-financed projects. The suspension came after years of complaints that member banks were loosely issuing the approval letters without properly researching the housing proposals.

Under the proposed 40B changes, DHCD or an entity authorized by that agency would have to issue site approval letters for NEF-funded projects according to guidelines issued by DHCD. But according to the legislators, those DHCD guidelines are non-existent.

“The regulation is meant to provide accountability to an area [New England Fund] … that has gone without oversight for four years. While that oversight is sorely needed, detail of exactly what the regulation will require is not available since DHCD has not produced the guidelines referenced in the proposed regulatory change,” according to the letter.

Providing more oversight for NEF projects would create another layer of bureaucracy and require more taxpayer dollars, said Sen. Susan C. Fargo, D-Lincoln. Fargo said that there have been “many abuses under the guise of affordable housing.” As an example, she pointed to developers who inflate land acquisition and development costs to build larger projects and increase their project margins. She cited a developer in Lexington who said his land acquisition costs were going to be $3.7 million when an independent appraiser assessed the same land for $1.7 million.

Examples like that show the 40B debate is not really about affordable housing, critics contend.

“It’s about local control of land use, and it’s about making money for developers,” said Fargo.

Others urged regulators to be more lenient toward communities that have done more for housing, allowing them to say no to a 40B proposal if they’ve increased their housing supply by half a percent, for example, while holding towns and cities with less affordable housing to a higher annual threshold.

Homebuilders, on the other hand, don’t support lowering the threshold at all.

“It significantly slows down the production of housing,” said Benjamin Fierro III, counsel to the Home Builder Association of Massachusetts and a partner at Lynch & Fierro in Boston.

Several people testified that they supported 40B changes that would allow communities to count accessory apartments, units for the mentally retarded and mentally ill and locally subsidized units as affordable.