Repeal 40B – The Worst Financial Scandal in 20 Years

Please VOTE YES on QUESTION 2 and repeal the state law known as 40B, which allows comprehensive permits for low/moderate-income units. 40B allows developers to override local zoning bylaws and wetlands regulations if they set aside 20 – 25% of the houses as “affordable”. This takes development control away from towns and gives it to developers and the Department of Housing and Community Development (DHCD), the state agency that oversees 40B projects.

Loopholes and lack of oversight have allowed developers to abuse the law for financial benefit at the expense of host towns. Inspector General (IG) Gregory Sullivan (head of the state agency to prevent and detect fraud, waste, and abuse in government) has issued over 25 letters and reports on the problems and abuses of 40B. He calls 40B “the worst financial scandal in the last 20 years”, a “pig fest”, “developer welfare”, “a major, expensive example of mismanagement in government,” and “one of the biggest abuses in state history”.

40B developers are supposed to refund excess profit to the host community, however, the IG’s office has found fraudulent expenses and hidden profits that have led to the theft of millions of dollars from towns across the Commonwealth. An IG audit of seven 40B projects found $4 to $5 million that should have been returned to the local towns. The IG estimates that state-wide, developers have defrauded towns of over $100 million – money that towns could have used to provide housing and services for people who the 40B proponents say they are supposedly helping.

The developer-backed group that wants to keep 40B wants voters to believe that issues raised by the IG have been resolved. Don’t believe it. The IG determined that the solutions recommended by DHCD are “all inadequate and in fact make the situation worse rather than better.” Current regulations still allow developers and their bankers to determine profits and the size of 40B projects, and developers are still allowed to use their own accountant for profit certifications rather than allowing the host town to choose the accountant as recommended by the IG. This is “dead wrong” according to the IG. A 12/21/2009 letter from the IG states that regulatory reforms proposed by DHCD “legalize the excess profit-taking my Office has previously identified and strips municipalities of the rights necessary to protect their interest.”

DHCD has a record of deciding in favor of developers 80% of the time, and have made regulations worse. Heavy lobbying from special interest groups have prevented the legislature from acting on any of the 66 bills (in the last session) designed to reform 40B. None of the candidates for governor have the courage to stand up to the pro-development lobby. Therefore, it is up to the people to take matters into their own hands and do what the state government should have done a long time ago – VOTE YES on Question 2 and repeal 40B so it can be replaced by a new law that puts people over profits.

3 Comments

  • Bmpski
    October 25, 2010 - 7:53 pm | Permalink

    Our dream house has turned into a nightmare as a result of a so called Friendly 40B. The town boards and elected officials have put their own self interest ahead of a small contingent of abutters for the sake of creating a 37 affordable housing unit as to get closer to the required 10% affordable housing stock. 40B will enable the unit to be built on a very small parcel of land less than 100 feet from abutting residential properties. Since the town has no public water or sewage the massive septic system compromises surrounding properties private well water. 40B is a corrupt law and directly impacts the safety and wellbeing of Massachusetts tax payers.

    Please Vote Yes on Question 2 and repeal this corrupt law!

  • Rptinbos
    October 29, 2010 - 2:24 am | Permalink

    Vote No on 2. We need affordable housing and multifamily housing of many types out here in the Suburbs, and 40B is almost the only way to do that. Building single family housing on larger and larger lots is a total regional disaster, eating up land and forcing people further out from work and services. Yet it’s nearly impossible to get towns to do anything else. (With some exceptions, of course, but those towns have mostly gone over the 10% level or are coming close.) As for builders making profits, this is America folks. That’s how nearly everything gets done, by encouraging investment with the potential of profit. This seems to be a mostly conservative blog site, so why are you folks opposed to builders making money? Builders don’t make public policy, they just implement it. Would you prefer public housing in your neighborhood? (I’ve never seen an anti-40B person ask for public housing, please.)

  • Darin
    October 31, 2010 - 9:32 pm | Permalink

    The “worst financial scandal” in 20 years!? That’s laughable and it makes people who are still making up their minds about Question 2, not take your message seriously.

    When people think worst financial scandal in the last twenty years they think, ENRON, TYCO, Jack Abramoff, Bernie Madoff, Charlie Baker’s handling of the Big Dig, sub-primes loans and derivatives trading — not this.

    You may not like the law but that does not mean that is corrupt – just because you don’t like it.

    It helps build more affordable housing in the state, we all know we need that – plus it helps our economy. In the next 10 years, 50000 new jobs will be created by the construction this law encourages.

    Vote NO on Question 2, this Tuesday and keep the affordable housing law in place for seniors and working families who make up the backbone of this great state.

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