Residents, legislators and Inspector General testify about 40B failures and abuses

On October 23, the Joint Committee on Housing held a hearing on 40B. The testimony offered by affordable housing advocates and legislators highlighted widespread abuse of and failures by 40B.

The state's Inspector General, Gregory Sullivan, offered a scathing indictment of 40B abuses by developers and state agencies. Quotes from the Inspector General's testimony include:

• "This 40B scandal represents the biggest abuse in state history in my opinion."
• "Five of the seven 40B projects sampled for financial review indicated that millions in excess profits were owed to towns. Our investigation has indicated that only $17,000 has been given back to towns."
• "State efforts to rectify developer abuses and excess profits are totally inadequate and will likely make matters worse."
• "State reforms let the developer pick the appraiser. That is dead wrong."
• "State regulations today say that developers and banks should determine profits and project size. That should never have happened and is the number one problem to be rectified. Would you buy a house if the seller mandated the price according to his own appraisal?"

Testimony was also given by a single mom who had been homeless and a recent college graduate. They testified that:

• Housing built by 40B is far too expensive and isn't helping the people who need it most
• New homes built by 40B have a median price of $400,000
• In the last few years, there was a 90% drop in the number of communities affordable to first-time homebuyers, at the same time that 40B was producing record high numbers of projects with record low percentages of affordable housing.
• How they resented developer lobbyists and staff from CHAPA snickering and smirking during their testimony to improve affordable housing.
• Beacon Hill "should be ashamed" of 40B's record and that "we can do better. We have better programs."
• Stop using 40B to force the development of upscale homes that we do not need and do not want. It is time for this state to start building some affordable housing instead.

Not surprisingly, developers and their lobbyists used tired innuendo and negative attacks to fight reformists and citizen input.

Even after the Inspector General reported that state reforms are "totally inadequate" and are likely to "make matters worse," these lobbyists still insisted that 40B was the state's "greatest tool."

• The Deputy Director of MassHousing called 40B "truly innovative" and said "the issue of oversight has been addressed." This claim is ridiculous coming from the "state's affordable housing bank" since it was this very agency that recently awarded $20 million in loans meant for affordable housing to a single, high-end luxury condominium complex!
• The Executive Director of the Massachusetts Housing Partnership claimed that 40B is "more necessary and more important now than at any point in our history." He also said that "local concerns have been addressed head on."
  In what might be the most outrageous statement of the day, he said "the comprehensive permit (40B) process is fundamentally fair."

Maybe neither of these gentlemen heard the Inspector General clearly when he described the problematic response by the state to rectify issues of financial abuse. He held up a document created by the Department of Housing & Community Development after his investigations that forces local zoning board members to sign away their right to legally challenge a 40B project and stating that profits would be determined by the developer and its bank. Beacon Hill and the developers think that their 40B reforms are working. Do you?

Click Here To Watch The Videotaped Testimony