Study Reveals Massachusetts’s Fair Share Housing Policy Counteracts Local Zoning Restrictions and Promotes Mobility to Higher-Advantaged Neighborhoods

A study published recently in Housing Policy Debate, “Can Fair Share Policies Expand Neighborhood Choice? Evidence From Bypassing Exclusionary Zoning Under Massachusetts Chapter 40B,” examines the impact of fair share housing policies on the production of affordable housing in neighborhoods that promote economic and social mobility and positive health outcomes. State-enacted fair share housing policies require all municipalities to take on a “fair share” of the state’s housing needs by maintaining some minimum level of the housing stock as affordable to a designated income group and offer ways to bypass local zoning restrictions to meet that requirement. The authors of the new study found that the “Massachusetts Chapter 40B” policy produces affordable housing units in neighborhoods that promote greater economic, social, and health outcomes than both the typical Massachusetts neighborhood and neighborhoods available to people who benefit from other subsidized housing programs. 

Massachusetts Chapter 40B (known as “40B”), the nation’s oldest fair share housing policy, requires that municipalities maintain at least 10% of their housing stock or 1.5% of their land area as affordable. In areas where less than 10% of the housing stock is affordable, developers can bypass existing local zoning regulations to build affordable housing; 40B streamlines permitting processes for developers who set aside 20% or 25% of units as affordable for people earning 50% and 80% of area median income (AMI), respectively. While 40B’s explicit goal is to overcome exclusionary zoning and expand the types of communities where low- and moderate-income households can afford to live, there are important questions about where 40B units are being built within a municipality. One major concern is whether 40B is being utilized to develop housing in less desirable areas within a municipality, such as in industrial zones or near highways, that would disadvantage 40B beneficiaries and be inconsistent with the policy’s goals.

The researchers created a novel dataset of geocoded addresses for nearly all (96%) affordable units permitted through 40B using public records from the December 2020 version of the Massachusetts Subsidized Housing Inventory (SHI) and public sources such as Google Maps and Zillow. The researchers linked 40B addresses to their corresponding 2010 census tract and designated any tract containing at least one 40B development as a “40B neighborhood.” The researchers incorporated neighborhood-level data from a variety of sources related to social mobility and health outcomes, including race/ethnicity, median household income, neighborhood-level poverty, educational attainment, school quality, social capital, family structure, commute times, incarceration rates, life expectancy, and the prevalence of vehicle and industrial pollutants. To compare 40B neighborhoods to the neighborhoods where beneficiaries of other major affordable housing programs reside, the authors repeated this process for the state’s Low-Income Housing Tax Credit (LIHTC), Housing Choice Voucher (HCV), and public housing programs using address data from HUD’s LIHTC Property Database and Assisted Housing query tool. To examine 40B’s ability to overcome local zoning exclusions, the authors relied on detailed spatial zoning data from MassGIS that generally does not reflect changes from 40B developments to measure baseline zoning in neighborhoods where 40B developments were eventually built.

The researchers first found that 40B neighborhoods are more affluent and had conditions more conducive to social mobility and positive health outcomes than the median Massachusetts neighborhood. For example, in 2010, the median household income of 40B neighborhoods was about $15,000 (or 22%) higher than that of the median Massachusetts neighborhood. The researchers also found higher proportions of households with college degrees, higher median home values, and greater ownership rates in 40B neighborhoods compared to the median neighborhood. Notably, the researchers found that third-grade math scores were 17% higher in school districts in 40B neighborhoods, and adults raised in 40B neighborhoods had 12% higher earnings in adulthood.

The authors found even greater differences in neighborhood conditions when comparing neighborhoods made available to lower-income households through 40B with neighborhoods available through other major housing programs. Affordable 40B units are located in much whiter, lower-poverty areas compared to units made available through other housing programs. The typical 40B neighborhood had a significantly higher AMI ($84,866) and lower percentage of people living below the poverty line (5%) relative to neighborhoods with units made available through HCV programs ($46,616 AMI and 18% living below the poverty line), LITHC programs ($36,665 AMI and 24% below the poverty line), and public housing programs ($32,160 AMI and 28% below the poverty line). Comparing 40B with other housing programs, the researchers also found differences for nearly all neighborhood characteristics affecting social mobility and health. Even when controlling for racial and income demographics, the researchers found 40B neighborhoods had substantially higher percentages of children living with two parents, better schools, lower teen birth rates, greater earnings for children in adulthood, and less exposure to pollutants, compared to neighborhoods with other affordable housing programs.

The researchers also found evidence that 40B neighborhoods are more likely than neighborhoods benefiting from other subsidized housing programs to be developed in areas with stricter zoning regulations. More than half of affordable 40B units were developed in areas previously zoned for single-family residences, compared to 21% of project-based HCV units, 18% of public housing units, and 15% of LIHTC units. Only 3% of 40B units were located in areas zoned primarily for multifamily housing, compared to about half of units made affordable through project-based HCVs, LIHTC, and public housing. The researchers found that relatively few 40B units (7%) were located within 100 miles of heavily trafficked roads or highways compared to 24% of all HCV units, 23% of public housing units, and 27% of LIHTC units. Notably, the researchers found that 40B units are more likely than units made affordable through other housing programs to be located in industrial zones, which raises concerns about exposure to pollutants. Although the researchers did not find significant differences between 40B neighborhoods and other neighborhoods in their exposure to the pollutants examined in this study, they caution that more research is needed to better understand the industrial zones and the potential health impacts for 40B beneficiaries.

The researchers conclude that Chapter 40B can help offer low-income households access to previously inaccessible neighborhoods with conditions that promote upward social mobility and better health outcomes – perhaps even more so than for many LIHTC, HCV, and public housing units. They recommend further research to learn more about households living in affordable 40B units and where they previously lived to better understand if and how 40B is facilitating desegregation and the opening of neighborhoods to those who have historically been excluded from them.

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