An article published in Housing Policy Debate, “Overriding Exclusion: Compliance with Subsidized Housing Incentives in the Massachusetts 40B Program,” reports that a Massachusetts policy of allowing subsidized-housing developers to appeal local land-use decisions has successfully encouraged the development of affordable housing. Between 1997 and 2017, the share of the state housing stock that was subsidized increased from 7.8% to 9.2%. In the Boston metropolitan area, the subsidized share of housing rose from 9.2% to 10.3%. The authors also found that race plays a role in slowing affordable development, with the whitest cities producing the least subsidized housing.
The Massachusetts 40B program, enacted in 1969, allows developers of subsidized housing to appeal project denials by local governments when less than 10% of the housing stock in the municipality is subsidized. At the time of passage, only Boston and two other communities in the state had subsidized housing greater than 10% of the housing stock. The prospect of a state review board overriding local control provides an incentive for communities to negotiate with subsidized housing developers.
Previous studies have found that the 40B program spurred affordable housing development: between 1969 and 1994, 20 cities brought their subsidized share over the 10% threshold, and 118 cities began building affordable housing. This article updates that assessment and analyzes the characteristics of housing-responsive communities. The authors analyzed housing production in Massachusetts since 1997, using the Massachusetts Department of Housing and Community Development’s online Subsidized Housing Inventory database, as well as data from the U.S. Census Bureau. The authors also conducted interviews with local officials about how cities meet 40B obligations.
Between 1997 and 2017, 58,975 subsidized homes were built in Massachusetts, including 37,417 homes in the Boston metropolitan area. In 1997, only 24 cities (6.8%) had met the program’s 10% threshold, and 56 cities had no subsidized housing at all. By 2017, 65 cities (18.5%) had met the threshold and only 42 cities (11.9%) lacked any subsidized housing. Furthermore, 235 communities (67%) increased the percentage of subsidized housing. Improvement was uneven, however: 35 communities (10%) made no progress and 81 communities (23%) lost subsidized housing as a percentage of the overall housing stock. The communities that passed the threshold in that time are concentrated within the Boston metropolitan area.
Given this uneven progress, the authors examined which community characteristics were related to development of affordable housing. They report a statistically significant association between population and subsidized-housing share, with larger cities producing more subsidized housing. The subsidized-housing share was also positively associated with the poverty rate: cities with lower poverty rates produced less subsidized housing. The racial makeup of the community also mattered: the larger the white population in a city was in 2017, the smaller the share of subsidized units. Cities with stronger fiscal situations (measured in terms of the ratio of total expenditures to local revenues) produced greater amounts of subsidized housing. Finally, they found that meeting the 10% goal had a slight negative effect on subsequent gains in the share of the subsidized-housing stock—that is, cities tended to slow development of affordable housing after meeting the 10% threshold that eliminated the prospect of a state review board override.
In interviews, the authors found that local officials were acutely aware of whether their city met the 10% threshold. Several officials expressed concern that the 2020 Census would push them under the threshold again. The 40B program was described as an unwelcome intrusion that permitted developers to override environmental concerns and “smart growth” principles. Some interviewees acknowledged that racial and socioeconomic prejudice motivated some resistance to affordable housing development in their communities.
The paper can be accessed here: https://bit.ly/3eH327J
For other recent scholarship on the Massachusetts affordable housing appeals system and how it compares with similar policies in the Northeast, see Memo, 3/30.