DHCD holds hearings on new 40B rules

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The Department of Housing and Community Development will hold public hearings during the week of Dec. 10 on new regulations for Chapter 40B, the state’s affordable housing law.

The DHCD is proposing to merge the current Local Initiative Program and 40B regulations into one complete and reformed set of regulations (760 CMR 56.00 et seq.).

The changes would affect 40B eligibility standards, design standards, cost certification, and planned production. They would also codify recent case law.

The MMA has expressed concerns that the proposed regulations do not go far enough to protect community interests and to create a level playing field within the 40B regulatory framework.

Read the MMA’s written response to the DHCD on the proposed regulations (136K PDF)

The regulations do not codify profit limitations advocated by the MMA, particularly in light of the finding by the Inspector General’s office that developers on several 40B projects have received huge profit windfalls at the expense of the host municipality because of a flawed cost-certification process.

At the Nov. 14 meeting of the MMA’s Policy Committee on Municipal and Regional Administration, members urged DHCD officials to address profit limitations in the final regulations.

The MMA is also concerned that the draft regulations codify certain state court and Housing Appeals Committee opinions that favor developer interest over those of municipalities.

The DHCD had indicated that any new regulations would allow more units to be counted toward the 40B affordable housing goal, but the regulations do not address such a change. Guidelines that correspond to calculating units on the 40B inventory would be amended to create a “pilot” program, whereby a select number of cities and towns would be allowed to count units made affordable to persons earning between 80 percent and 120 percent of area median income.

Many of the proposed regulatory changes have the potential to exacerbate criticism of Chapter 40B – evidenced by an initiative petition to repeal the law – and result in further litigation.

The new regulations would make some changes welcomed by local officials, however. These include a change to the number of units required under Planned Production to make it easier for municipalities to become 40B certified; and a requirement that a developer post a bond or surety held in escrow by DHCD until developer submits cost certification documents.

Written by Administrator