Late last month, the Joint Committee on Housing, on which I sit, held a hearing on proposed changes to Chapter 40B, our state’s so-called affordable housing law.

This hearing is quickly becoming a bi-annual tradition: a lengthy line of senators and representatives air their grievances, explaining how developers are taking advantage of giant loopholes in this well-meaning law and burying local communities and volunteer boards with these horrendous projects that do little but drain municipal resources.

And then “affordable housing advocates” get up and tell the panel how everything is fine and nothing needs to be changed. And then nothing is changed.

But as anyone living in my district knows, Chapter 40B has been an abject failure when it comes to providing true affordable housing for the region. As I told the Housing Committee during my testimony, the “B” in Chapter 40B stands for “broken.”

Regardless of its progressive origins, the truth is that Chapter 40B is a 38-year-old law that has been hijacked by some unscrupulous developers interested in little more than maximizing profits under the guise of providing for the common good.

Here are some facts about the impact Chapter 40B has had on affordable housing:

·        Although the number of housing units built under 40B have skyrocketed, the total number of affordable units in the state has decreases significantly

·        Prior to 1999, 36 percent of all units built under 40B were considered affordable. In 2006, that figure stood at 26.6 percent. 

·        Since 2003, cities and towns have produced an estimated 5,484 units of affordable housing. Over that same time, 40B projects have generated just 4,517 affordable units, but also resulted in an additional 20,000 market-rate units.

These figures come from Repeal 40B, a grassroots group trying to collect enough signatures to have a question placed on the 2008 state ballot allowing Massachusetts voters to decide whether the law should be eliminated from the books. The reason this group formed in the first place is because the Legislature has failed to address one of the most significant issues facing suburban communities today.

The House of Representatives, to their credit, did approve a bill in 2004 that made modest changes to the law, including increasing the type of housing that can be counted towards a community’s affordable housing stock. But like with so many other issues, the Senate shirked their responsibility to take the issue up and the bill subsequently died. 

How important of an issue is this to suburban communities? So far 40 towns have signed on to an initiative asking the Legislature to institute a moratorium on 40B projects.

One of the two 40B bills that I filed, Senate Bill 760, would do just that. It’s not just that 40B isn’t the solution to our affordable housing needs; it’s that the law is being blatantly abused.

State Inspector General Gregory Sullivan last year reviewed the financial paperwork of 10 randomly-selected projects and found significant problems with seven of them. We’re not talking about misplaced commas, or forgetting to carry a two. We’re talking about improperly inflated construction costs, hidden profits through sweetheart deals with friends and business partners, and other “accounting fictions,” as Sullivan put it. The most concerning part is that many of these problems were missed during a post-completion audit by a monitoring agent. Among the findings were that several of the projects had actually exceeded the 20 percent profit margin cap and owed the host communities hundreds of thousands of dollars.

“Based on our review to date, it has become clear to this Office that the cost certification and monitoring process is ‘broken,’” Sullivan wrote. “Our review has revealed that reported developer profits were routinely and substantially understated. The results, in many cases, were profit windfalls to the developers which deprived the respective municipalities of the excess profits that should have been paid.”

And in a recent interview with the State House News Service, Sullivan was quoted as saying the problems he has uncovered represent “the biggest scandal in state history.”

Changes are needed and until we in the Legislature do just that, I think it is unfair to ask our local communities to work under the current set of rules. 

I also have proposed Senate Bill 758, which would require all housing units built under Chapter 40B to be reserved as “affordable.” I think we need to ensure that developers have the common good at heart before they propose throwing a town’s zoning and building regulations out the window. Developers currently only have to set aside between 20 and 25 percent of the units built as affordable. That’s a terrible cost/benefit ratio for host communities who are being forced to provide costly municipal services to housing developments they have little control over, and receive minimal benefit from.

Only in Massachusetts can a development where 75 percent of the condos are sold for more than a half-million dollars be considered an “affordable housing development.”

No one doubts that we need more affordable housing, especially as median house prices continue to top $300,000. But Chapter 40B is not the answer. Evidence continues to mount that for every 40B project that lives up to the law’s lofty ideals, there are several others that are just bad for the residents of the commonwealth.

For more information on the effort to eliminate Chapter 40B, check out www.repeal40b.com