Developing Chapter 40B Affordable Housing

Chapter 40B Housing is a program created by the State of Massachusetts which allows developers to override local zoning bylaws in order to increase the number of affordable homes in municipalities where less than 10% of the housing is defined as affordable.

The goal 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 designed to permit the development of multifamily and affordable housing in suburban and rural parts of the state.

What Are the Qualifications for Chapter 40B Housing?

In order to qualify for Chapter 40B housing, at least 20-25% of any proposed development has to provide housing which serves households at or below 80% of the area’s median income. Such housing developments can be for rent or for sale as long as the affordable units are permanently restricted to remain affordable.

Since Chapter 40B went into effect, 56,000 units in over 1,000 developments have been created. Of those units, 30,000 units are reserved for households earning below 80% of the median income.

How Does Chapter 40B Differ for Housing Developers?

What distinguishes Chapter 40B housing from other affordable housing programs is that there is no “subsidy” or state budget allocation. Instead, the cost of the affordable units has to be absorbed by the developer as part of the overall project financing. The market rate units in the development must make up the difference as the affordable units must be sold or rented below market value.

Partner with NHS to Develop 40B Housing

If you are a developer seeking a 40B partner and/or a monitoring agency that has comprehensive knowledge about the guidelines and processes for the state and municipalities, please contact us to schedule an exploratory meeting. We’ll discuss what’s needed for compliance, with whom you need to connect, and how the process works.