MassHousing and the Community Economic Development Assistance Corporation released a report entitled Chapter 40T at 5: A Retrospective Assessment of Massachusetts’ Expiring Use Preservation Law, which reviews the first five years of experience under the Massachusetts Affordable Housing Preservation Law, Chapter 40T. The report, prepared by housing consultant Emily Achtenberg, found that the law has basically been fulfilling its intended purpose to track the disposition of affordable housing projects and to give local and state government officials, as well as residents, an opportunity to purchase these projects and assure their preservation as affordable housing.
Among the report’s key findings were the following:
· DHCD Use of Right of First Refusal. Eight properties offered for sale that have triggered of DHCD’s Right of First Offer (ROFO) under 40T have been sold to qualified non-profit and for-profit purchasers, resulting in the long-term preservation of more than 1,0000 affordable units in some of the Commonwealth’s strongest housing markets. DHCD has created a process for affordable housing developers, both non-profit and for-profit, to qualify for this right to purchase project under the ROFR.
· Over 100 Projects Preserved. 10,000 units in more than 100 properties have been or are slated to be preserved by owners and purchasers who have pledged to keep them affordable in exchange for receiving a preliminary exemption from the 40T ROFR process. In the vast majority of these cases, owners and purchasers have promised to retain at least the same number of affordable units that existed prior to 40T.
· Final Reporting Needed. Projects that receive preliminary exemptions are not filing final reports with DHCD documenting that deals have closed in accordance with the owner’s applications. While there are no indications that there are any issues with these transactions, the report points to an area for additional follow-up by DHCD and project owners.
The report was presented at a recent forum held at MassHousing and co-sponsored by CEDAC and the Citizens Housing and Planning Association.