40B, Part II - The Definition

We cannot hope to address this issue if we don't understand the problem, so I'm going to take a few posts to detail the necessary background...

What is 40B?

Some people believe that 40B and Section 8 - welfare housing - are synonymous. This is false. Section 8 is government-subsidized housing, intended for those who would not otherwise be able to put a roof over their heads. In many cases, Section 8 recipients either pay a nominal monthly "rent" or nothing at all.

Section 8 landlords can decide if they want to participate in the program. If they do, the state pays most or all of the rent based on local market rates. The state also pays to renovate the property should the tennant damage it.

40B, which IS NOT subsidized, refers to the state law that allows developers to bypass local zoning codes - particularly for density - if 20-25 percent (or more) of the units they build are "affordable." Affordable is defined as homes that are sold at a price that allows someone making less than 80 percent of the local median income to afford a mortgage to purchase the house.

Let me say that again - "AFFORD A MORTGAGE TO PURCHASE THE HOUSE."

This is perhaps the most important, but most often overlooked, part of 40B. As I noted, there is no subsidy. The homebuyer must afford the mortage and purchase the house. Like any of us, if they fail to make the payments, there will be a foreclosure.

Consider that to afford a "cheap" $350,000 house, someone would have to be making approximately $90,000 per year. If you're a firefighter making $50,000/year, that isn't going to happen. If your wife makes $25,000 as a receptionist, you still won't qualify.

This is why people between the ages of 18-35 are leaving Cape Cod in droves. Ever try to find a job making $90,000 around here? They are few and far between.

40B requires only 20-25 percent of the units to be affordable, so that the developer can be assured of a profit. Like it or not, we live in a capitalistic society and no one works for nothing. The other 75-80 percent of the units in a 40B are sold at a market rate to help offset the cost of the affordable units, which are sold below cost.

That said; the developer is limited to a 20 percent profit, so the state can be assured that there is no gouging. Profit in excess of 20 percent must be donated to the state to help fund further affordable housing development.