BEFORE THE MBTA Communities Act was ever created, the headlines on affordable housing in Massachusetts were focused on another piece of state law, Chapter 40B, and its measuring stick — the Subsidized Housing Inventory.
The SHI is the state’s primary count of affordable housing units, and the Chapter 40B law uses it to ease housing production by allowing developers to bypass local zoning regulations restricting density in communities where less than 10 percent of housing stock is counted as affordable by the SHI.
On the surface, it seems straightforward. The SHI counts affordable housing units, and 40B makes it easier to build with greater density in communities where affordable housing is most needed. Earlier this year, however, Housing Navigator Massachusetts, which operates an online tool to help tenants find affordable housing options, and Boston Indicators presented new data that show the SHI overcounted the number of truly affordable units in the state by nearly 34,000.
This is true largely because the SHI counts all rental units in a development as affordable, even if only some of those units are, in fact, income-restricted. Have 40 market-rate units and ten income-restricted units in your complex? The SHI gives you credit for all 50.
The media coverage of the data highlighted the 34,000 unit overcount statewide – as it should. Thirty-four thousand fewer affordable units in a state amid an affordable housing crisis is big news.
But in many communities, the local story is even worse. Forty-two towns have technically met the threshold set forth by Chapter 40B but have delivered far less affordability than SHI numbers suggest, especially when considering what is “affordable” among these properties.
How many truly affordable units are there?
To answer this question, we created “adjusted” SHI counts for 280 Massachusetts municipalities represented in Housing Navigator Massachusetts data. Our adjusted counts include only below-market-rate units in rental properties if they are restricted to 80 percent of area median income or below. Instead of nearly 222,000 units counted by the official SHI, we found only about 188,000 units met our criteria for affordability.
How does this affect Chapter 40B?
Remember that the Chapter 40B law eases housing production by allowing developers to bypass local zoning regulations restricting density. The immediate, streamlining impact of 40B applies only in municipalities that do not yet have at least 10 percent of their housing stock included in the SHI.
Using the official yardstick, 69 municipalities in the state have achieved the 10 percent threshold. However, when we apply our criteria to count only truly affordable units, nearly two-thirds of those communities fall below the threshold.
The big story gets even more troubling when we parse out what qualifies as “affordable” in the SHI count. For these properties, affordability typically means rent is set to be affordable to a household making 80 percent of the area median income. In Greater Boston, this pricing corresponds to rents well above $2,400/month for a two-person household, where the income benchmark is above $72,000. It doesn’t adjust for a renter’s actual income, which means workers like early childcare and education administrators (average salary: $68,000 in 2022 according to the Bureau of Labor Statistics), paramedics ($63,000), and nursing assistants ($41,000) find these “affordable” units still represent a significant cost burden, along with thousands of other low- or moderate-income households.
Given this grim story, what do we do? We shouldn’t simply point fingers at the towns involved. They were given a regulatory framework, and they complied. Instead, let’s “manage forward” and realize a vision of Massachusetts where low- and moderate-income households can rent safe and available housing where they want to live. Here are four ideas to consider:
Include a “true” affordability count in the SHI that sets a benchmark and goal for the share of housing stock that is truly affordable.
Reference and plan around every municipality’s true affordability in the state’s upcoming Housing Production Plan and municipal plans.
Reward municipalities that meet a true affordability goal with other benefits.
Design new regulations and funding programs to build more housing with more affordability. We can stop counting one-bedroom and three-bedroom units as equal when one houses at least three times as many people. We can design heavy incentives to achieve true affordability for lower-income households. We can be nimble: perhaps those existing 40B buildings are opportunities to target local subsidies that deepen affordability.
In the end, the need for the Subsidized Housing Inventory and 40B to evolve should be no surprise. The housing market has changed dramatically since the 1969 introduction of Chapter 40B. Let’s learn from this example to design the future we want and need.
Jennifer Gilbert is the founder and executive director of Housing Navigator Massachusetts. Aja Kennedy is a research fellow at Boston Indicators, the research hub of the Boston Foundation.
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