In Massachusetts a 40B is a housing program, established in 1969, which allows developers to override local zoning by-laws in order to increase the density and stock of affordable housing in towns where less than 10% of the housing stock is defined as affordable under state guidelines. The goal of Chapter 40B is to allow working families and seniors to remain in their communities when they might otherwise be priced out of the conventional housing market. The statute was originally designed to permit the development of multifamily and affordable housing in suburban and rural parts of the state. There is no state subsidy for a Chapter 40B development. The developer absorbs the cost of the affordable units by spreading the financing across all of the units. Since Chapter 40B went into effect, 56,000 units in over 1,000 developments have been created across Massachusetts.
In order to qualify for Chapter 40B housing, at least 20-25% of the proposed development must be for households earning at, or below, 80% of the area median income (80% of AMI is currently $88,720 for a family of four on Nantucket) . The housing units can be for sale or for rent as long as the affordable units are permanently restricted to remain affordable in perpetuity.
In spite of the dedicated efforts of many people, and over many years, Nantucket’s designated affordable housing stock is only at 2.6%. Unfortunately much of our affordable housing does not count towards the 10% total, such as properties that are under the Housing Needs Covenant Program. Perhaps one unintended consequence of a 40B development is that every time a new one gets approved it makes it incrementally more difficult for Nantucket to achieve the 10% threshold because 75-80% of the units are at market rate. Since it is highly unlikely that Chapter 40B is going away, our only option is to work even harder to get to the 10% affordable housing threshold on Nantucket if we wish to better control the type of development on island in the future.