- Massachusetts spurred the production of affordable housing with its Comprehensive Permitting and Zoning Appeal Law and Smart Growth Zoning Overlay District Act, which streamline approval processes for local affordable housing permits and allow by-right development in smart growth locations, respectively.
- California’s parking reduction law allows developers to construct fewer parking spaces for affordable housing developments located within a half-mile of transit.
- California’s planning and zoning laws require local governments to adopt ordinances for accessory dwelling units to increase the supply of affordable housing in areas occupied predominantly by single-family homes.
Although the authority to regulate land use is delegated primarily to local governments, states have the constitutional authority to reduce or remove regulations that drive up housing costs, offer financial and technical support for local communities to zone for affordable housing, and empower municipalities to use their own resources
to create incentives for development. States can also help address community opposition to new housing developments and encourage regular assessments of housing needs at the local level.1 This article discusses efforts by Massachusetts and California to streamline permitting processes and ease restrictive zoning laws that hinder the development of affordable housing. More than any other state, Massachusetts has taken steps to supersede local development decisions and overcome neighborhood resistance to produce affordable housing.2 The state adopted legislation to remove requirements for affordable housing developers to secure multiple permits, allow by-right development, and increase density. California demonstrates how a state can support efforts that lower the cost of affordable housing construction and make implementing regulatory changes easier for local governments.3 California enacted legislation allowing fewer parking spaces in housing developments to increase affordability in areas close to public transit and promote the construction of accessory dwelling units (ADUs) in single-family and multifamily residential neighborhoods.
In the late 1960s, Massachusetts recognized the need to simplify approval processes for local permits for affordable housing and limit exclusionary zoning practices hindering the production of affordable housing in the suburbs, which are typically zoned for single-family residences.4 To this end, in 1969 Massachusetts enacted the Comprehensive Permit and Zoning Appeal Law (Chapter 40B), which encourages all cities to set aside at least 10 percent of their housing units as affordable. The law reduces barriers to affordable housing production by granting local zoning boards of appeal (ZBAs) the authority to approve housing developments if 20 to 25 percent of the units remain affordable for a period of 30 years to households with incomes at or below 80 percent of the area median income (AMI).5 As Rachel Heller, chief executive officer at the Citizens’ Housing and Planning Association, noted, the law supports mixed-income housing and the production of multifamily rental housing.6
Chapter 40B also simplifies the permitting process for developers by allowing them to apply to a single authority: the local ZBA. Qualified developers can appeal denials of housing permits to the state Housing Appeals Committee when less than 10 percent of the housing stock in a municipality is affordable.7 Once a municipality meets the 10 percent goal, however, it has the right to deny further applications for comprehensive permits under Chapter 40B. In this case, developers can still apply for a permit, but they cannot appeal the decision.8
Several years later, Massachusetts took additional steps to reduce the high cost of housing and address the restrictive zoning practices that kept housing out of reach for the state’s most vulnerable residents. In 2004, Massachusetts adopted the Smart Growth Zoning Overlay District Act (Chapter 40R), a voluntary program offering financial incentives to foster affordable housing production that was the first state-level program of its kind.9 According to Heller, the main goal of Chapter 40R was to spur “compact, smart growth development to meet the state’s housing needs while also preserving open spaces.”10 Chapter 40R eliminates the need for multiple permits by making compact, mixed-use developments allowable by right in smart growth locations.11 The legislation sets minimum densities for developable land at 8 units per acre zoned for single-family homes, 12 units per acre zoned for two- or three-family buildings, and 20 units per acre zoned for multifamily housing.12 Housing projects with 12 or more units in a smart growth district must make at least 20 percent of the units affordable to those earning up to 80 percent of AMI and maintain this standard for 30 years.13 In addition, 2016 revisions to Chapter 40R incorporate starter home districts of at least 4 units per acre with 20 percent or more affordable to households earning up to 100 percent of AMI.14 The law requires that Chapter 40R districts be in “highly suitable” areas with public transit, concentrated development, and amenities.15 The state allocates density bonus payments and production bonuses based on the number of housing units that will be produced, with the Smart Growth Housing Trust Fund as the funding source.16
A Chapter 40R project typically begins with a public hearing to gather community input on a developer’s proposal. Municipalities have three years to adopt a Chapter 40R district ordinance through a two-thirds majority vote by the local council. The state’s Department of Housing and Community Development (DHCD) can also request data from local municipalities for annual progress reports that explain trends in affordable housing production and projects awaiting approval. The law’s “claw-back” provision requires the community to repay incentives to the DHCD, which returns them to the trust fund, if housing construction has not begun within three years of approval.17
Under Chapter 40R, cities receive financial incentives for constructing affordable housing developments in smart growth districts such as Atlas Lofts in Chelsea, Massachusetts. The Neighborhood Developers
Heller notes that Chapter 40B has been the most successful tool in Massachusetts to reduce the state’s dire affordable housing shortage, producing more than 70,000 homes by forcing communities to think about how to meet the 10 percent goal.18 The program has produced far more affordable housing outside of major cities than would have been developed without it.19 As of September 2017, 65 communities reached the 10 percent goal and several more are continuing to make progress, with 39 communities between 8 and 9.99 percent and an additional 55 communities at 6 percent or higher. According to Heller, “75 percent of the state’s population lives in municipalities that are above 6 percent, and less than 1 percent of residents live in the 42 smaller communities that have zero subsidized housing.”20 Chapter 40R continues to build on these successful trends. Currently, 37 municipalities have approved 42 smart growth districts under Chapter 40R. Of these municipalities, seven have expanded their original districts.21 The success of Chapter 40B — most notably for establishing an appeals process at the state level for affordable housing developments — has made it a model for other states such as Rhode Island, Connecticut, and Illinois that are working to alleviate barriers to affordable housing production.22
Resident opposition to affordable housing development in the form of “not in my backyard” sentiments is a significant barrier for communities trying to satisfy the requirements of Chapter 40B. Common arguments are that affordable housing will increase school costs, traffic congestion, noise, pollution, and crime. Communities may also fear that Chapter 40B housing developments will cause property values to decline. Through archival research, site visits, and semistructured stakeholder interviews at four Chapter 40B housing developments, DeGenova et al. determined that these concerns were “unrealized” and “overstated.” Negotiation between municipalities and developers helped calm fears and improve the developments.23 According to Karki, such concerns can also motivate communities to pursue Chapter 40R to receive incentive payments while satisfying Chapter 40B’s 10 percent threshold.24
Tension can also arise when communities have not yet reached the 10 percent goal, giving a developer the ability to appeal permit denials to the state and proceed with a housing project. To alleviate this tension, the state encourages communities to create a housing production plan that identifies housing needs and strategies for future development. Communities that can show progress on implementing the plan have more leverage to approve or disapprove a planning proposal. Heller indicated that following through with the goals outlined in the housing production plan can make communities appeal-proof if they can show they have planned for development and made progress on those plans.25
Developers of Japantown Senior Apartments in San Jose, California, unbundled parking from overall development costs to meet GreenTRIP standards and further lower the cost of housing. Bernard Andre, courtesy of First Community Housing
Despite efforts to expedite the permitting process and adopt local ordinances, approval can be time consuming. One study that collected permit data from 144 towns between 1999 and 2005 found that ZBA approval took about 10 months, and the time needed to receive a building permit for a Chapter 40B project was about 2 years from the date the developer submitted the application.26 Achieving consensus through the local two-thirds vote can also delay the approval of 40R projects.27 Moreover, the state capital budget currently funds the Smart Growth Housing Trust Fund, but one constraint is that municipalities can spend the funds only on capital improvements rather than at their discretion.28 The voluntary nature of Chapter 40R also requires communities to be motivated to develop affordable housing.29
In 2017, Governor Charlie Baker announced the Housing Choice Initiative Program to grant municipalities additional incentives and technical assistance with the goal of constructing 135,000 new housing units by 2025. Along with the Housing Choice Initiative Program, the state legislature is considering a complementary piece of legislation, House Bill 4075, An Act to Promote Housing Choices, which allows municipalities to reduce restrictive zoning through a simple majority vote rather than the current supermajority two-thirds vote. The bill encourages municipalities to adopt zoning best practices, including the development of ADUs, increased density, Chapter 40R smart growth zoning districts, and reduced parking requirements. Communities that do so can receive Housing Choice Designation, which makes them eligible for financial benefits.30 Two additional bills addressing zoning barriers to housing production are currently under consideration by the state legislature. House Bill 673, An Act Relative to Housing Production, requires communities to zone for multifamily housing in smart growth locations and to allow, by right, ADUs and clusters of single-family homes that preserve surrounding open spaces.31 House Bill 2420, An Act Building for the Future of the Commonwealth, reforms the state’s planning, zoning, and permitting laws to expand housing choice in smart growth locations.32
In California, the supply of affordable housing is not keeping pace with population growth.33 Since 1969, California has required local municipalities to create a general plan every five or eight years that identifies current and future housing needs based on the state’s projections for household growth.34 Unlike population projections, which look at the number of individuals, household growth projections account for changes in household size, which make them more useful for identifying housing needs.35 Although California’s Regional Housing Needs Allocation process encourages local allocation of housing, it has not substantially closed the affordable housing gap.36 From 2009 to 2014, 467,000 units were added to the housing stock — not enough to accommodate the increase in the number of households (544,000).37
California has enacted several laws to address its shortage of affordable housing. In 2015, the state adopted its parking reduction law, which allows developers seeking a density bonus to request lower minimum parking requirements contingent on constructing affordable housing near transit.38 Meea Kang, director of the Council of Infill Builders and lead advocate for the law, explained that the projects she proposed typically required regulatory changes, and “parking made sense to reduce, especially if it was an infill project close to transit.”39
As a cosponsor of California’s parking reduction law, TransForm — a Bay Area transportation nonprofit organization — has supported policy discussions through its publicly accessible GreenTRIP Parking Database, which offers information such as rental costs, building characteristics, affordability, and parking occupancy.40 A 2015 GreenTRIP analysis found that at 68 affordable housing developments in the Bay Area, 31 percent of the 9,387 total parking spaces were empty at night. In 2015, construction costs for these spaces stood at approximately $139 million; nationally, the average construction cost per space was $24,000 for aboveground parking and $34,000 for underground parking.41 An underground space in San Francisco costs about $50,000.42 Parking costs are bundled with the cost of development, and additional parking drives up overall development costs, which can translate into higher housing costs per unit for residential properties.43 According to Williams et al., reducing unnecessary parking can lower development costs “by $20,000 to $50,000 per unit in high-cost areas.”44 This reduction can make it easier to construct affordable housing for seniors, people with special needs, and low-income households, who may be less likely to drive.45
The ministerial approval embedded in the parking reduction law bypasses the need for planning commissions to weigh in on local decisions, which can stall projects. For developers constructing housing within a half-mile of public transportation, the parking reduction law sets the minimum parking requirement at 0.5 spaces per unit for senior housing and 0.3 spaces per unit for special needs housing. The parking law encourages market-rate developments to provide affordable housing by requiring 0.5 spaces per bedroom for mixed-income housing with up to 20 percent of units for low-income households or 11 percent for very low-income households.46 Currently, California still requires two parking spaces per unit for a two-bedroom apartment, and municipalities have the freedom to increase this ratio, but if developers want to build affordable housing near transit, this law allows them to construct fewer parking spaces. The parking legislation speeds up the project approval process and has helped cities reach their affordable housing goals.47
California also sees the potential for ADUs to accommodate future population growth. ADUs are an innovative way to increase affordable housing supply in high amenity areas that are occupied primarily by single-family homes, which make up 56.4 percent of California’s total housing stock.48 An ADU is a secondary dwelling unit sometimes referred to as a “granny flat” or “in-law suite.” (See Evidence Matters, Summer 2017.) ADUs can be small studios or one-bedroom units in a detached, attached, or converted space within the main house such as a garage, first floor, or basement.49 Constructing an ADU is cheaper ($156,000 on average) than a single unit of affordable housing in a new development, averaging $332,000 statewide, $591,000 in San Francisco, and $372,000 in Los Angeles.50 The accessory units provide multipurpose, flexible housing arrangements such as short-term rentals, art studios, and housing for extended family. Karen Chapple, professor of city and regional planning at University of California at Berkeley, notes that flexible housing “allows the neighborhood to change quite quickly without changing built form.”51
Residents at Gish Family Apartments in San Jose, California, are close to light rail transit, which reduces traffic congestion and the need for parking. Bernard Andre, courtesy of First Community Housing
Effective January 2017, California enacted planning and zoning laws requiring local governments to adopt ADU ordinances.52 These laws reduce regulations to facilitate the development of ADUs in numerous ways, such as eliminating setback requirements for garage conversions, utility connection fees, and parking requirements for ADUs in a historic district, a half-mile from transit, or near a car share area. State laws also require ADUs to be located on lots zoned for single- or multifamily use. Detached ADUs can be no larger than 1,200 square feet. ADU requests in compliance can become permitted within 120 days of receipt of application, without the need for a public hearing.53
From 2015 to 2017, Los Angeles saw the largest jump in ADU applications of any California city, from 90 in 2015 to 1,980 in 2017. In addition, the number of applications in San Francisco was approximately 14 times larger in 2017 than in 2015, while Oakland saw about 8 times more applications during the same period.54 Currently, more than 100 cities in California have enacted ADU ordinances.55 Because many cities had already implemented ordinances before the new legislation, it is unclear whether the jump in permits can be attributed to the new state legislation or to previous city reforms. The biggest short-term impact, according to Chapple, has been increased awareness of the benefits of ADUs for homeowners and tenants.56
Several challenges remain, especially concerning preexisting, unpermitted ADUs; financing; and assessment. Rigid land use regulations have led to a large, informal housing market composed of unpermitted ADUs.57 Roughly 50,000 unpermitted accessory units are in Los Angeles alone.58 State building codes, which emphasize energy-efficiency standards meant for larger units, can be a barrier for homeowners trying to convert garages or construct new cottages.59 Cost remains the biggest barrier for homeowners looking to construct ADUs, particularly for low-income elderly residents, whose incomes in retirement may be too low to qualify for a mortgage. Traditional banks and credit unions are still developing loan financing tools for ADUs, but these financing mechanisms tend to favor high-income, high-equity households. Monitoring and evaluation also remains a challenge at the state level; cities are required to report the number of housing units constructed, but ADUs have not been part of that count.60
ADUs, such as this one in Menlo Park, California, can increase the supply of affordable housing while also providing financial benefits to homeowners. Home for All San Mateo County/21 Elements
In September 2017, California adopted sweeping housing legislation that, among other actions, provides incentives to local governments that develop affordable housing near transit and streamline processes for approving local projects.61 Senate Bill 831 builds on the success of previous ADU legislation by allowing a pending ADU application to be automatically approved if a local agency has not acted within 60 days. The existing laws leave cities to define transit options, however broad, within their local ordinances, but the latest bill eliminates this ambiguity by defining public transit as “a location, including, but not limited to, a bus stop or train station, where the public may access buses, trains, subways, and other forms of transportation that charge set fares, run on fixed routes, and are available to the public.”62 In addition, Assembly Bill 2890 amends existing ADU laws by proposing a state-mandated program to limit the land use restrictions that local municipalities can impose on ADUs.63
Efforts in Massachusetts and California demonstrate that state actions to reduce regulatory barriers can facilitate the development of affordable housing at the local level. In Massachusetts, Chapter 40B set the groundwork to spur the growth of affordable housing production, and decades later, Chapter 40R became the added incentive to help communities meet the 10 percent goal for affordable housing units.64 By revising parking regulations, California is helping developers and cities build affordable, higher-density housing near transit.65 California also demonstrates that ADUs can serve multiple purposes by helping homeowners generate additional income while filling the affordable housing gap. These laws can serve as models for other states looking to expand affordable housing by reducing regulatory barriers, and they grant residents more of what they desire — housing in affordable and walkable communities near transit and amenities.66
Stockton Williams, Lisa Sturtevant, and Rosemarie Hepner. 2017. “Yes In My Backyard: How States and Local Communities Can Find Common Ground in Expanding Housing Choice and Opportunity,” Urban Land Institute, Terwilliger Center for Housing, 4, 7.
Ibid., 14; Interview with Meea Kang, 8 February 2018.
Carolina K. Reid, Carol Galante, and Ashley F. Weinstein-Carnes. 2016. “Borrowing Innovation, Achieving Affordability: What We Can Learn From Massachusetts Chapter 40B,” University of California at Berkeley, Turner Center for Housing Innovation, 2; Interview with Rachel Heller, 7 February 2018.
Citizens' Housing and Planning Association. 2014. “Chapter 40B: The State's Affordable Housing Law”; General Court of the Commonwealth of Massachusetts. n.d. “Chapter 40B: Regional Planning” (malegislature.gov/Laws/GeneralLaws/PartI/TitleVII/Chapter40B). Accessed 26 January 2018; Interview with Rachel Heller.
Interview with Rachel Heller.
- Tej Kumar Karki. 2015. “Mandatory Versus Incentive-Based State Zoning Reform Policies for Affordable Housing in the United States: A Comparative Assessment,” Housing Policy Debate 25:2, 240; General Court of the Commonwealth of Massachusetts, “Chapter 40B: Regional Planning.”
- Reid et al., 3.
- Williams et al., 10–2.
- Interview with Rachel Heller.
Darcy Rollins. 2006. “An Overview of Chapters 40R and 40S: Massachusetts' Newest Housing Policies,” Policy Brief 06-1, New England Public Policy Center at the Federal Reserve Bank of Boston.
General Court of the Commonwealth of Massachusetts. n.d. “Chapter 40R: Smart Growth Zoning and Housing Production” (malegislature.gov/Laws/GeneralLaws/PartI/TitleVII/Chapter40R). Accessed 3 January 2018; State of Massachusetts. n.d. "Chapter 40R" (www.mass.gov/service-details/chapter-40-r). Accessed 2 January 2018; Interview with Rachel Heller.
The General Court of the Commonwealth of Massachusetts, Chapter 40R; Karki, 246.
Metropolitan Area Planning Council. n.d. “Chapter 40R: 2016 Changes”; Interview with Rachel Heller.
General Court of the Commonwealth of Massachusetts, “Chapter 40R: Smart Growth Zoning and Housing Production.”
Ibid.; Karki, 246; General Court of the Commonwealth of Massachusetts, “Chapter 40R: Smart Growth Zoning and Housing Production”; State of Massachusetts, “Chapter 40R.”
Interview with Rachel Heller.
Reid et al., 4; Interview with Rachel Heller.
Interview with Rachel Heller.
Carol Galante and Carolina Reid. n.d. “Expanding Housing Supply in California: A New Framework for State Land Use Regulation,” Center for California Real Estate, 6, 8.
Alexandra DeGenova, Brendan Goodwin, Shannon Moriarty, and Jeremy Robitaille. 2009. “On the Ground: 40B Developments Before and After,” Tufts University, iv–vi, 3, 30, 64.
- Karki, 247.
- Interview with Rachel Heller.
- Lynn Fisher. 2007. “Chapter 40B Permitting and Litigation: A report by the Housing Affordability Initiative,” MIT Center for Real Estate, ii, 12.
- Karki, 254.
- Interview with Rachel Heller.
- Karki, 254.
- Commonwealth of Massachusetts. 2017. “Baker-Polito Administration Announces New Housing Choice Initiative,” 11 December press release; Commonwealth of Massachusetts. 2018. “Baker-Polito Administration Testifies on Housing Choice Initiative,” 30 January press release.
- Commonwealth of Massachusetts. 2017. An Act Relative To Housing Production, House Bill No. 673, 2017–2018 Reg. Session (17 January); Rachel Heller. 2017. “Testimony,” Citizen's Housing and Planning Association, 20 June.
- Commonwealth of Massachusetts. 2017. An Act Building for the Future of the Commonwealth, House Bill No. 2420, 2017–2018 Reg. Session (19 January); Massachusetts Smart Growth Alliance. n.d. “An Act Building for the Future of the Commonwealth H.2420.”
- Jonathan Woetzel, Jan Mischke, Shannon Peloquin, Daniel Weisfield. 2016. “A Tool Kit to Close California's Housing Gap: 3.5 Million Homes by 2025,” McKinsey Global Institute, 2.
- Williams et al., 7.
- California Department of Housing and Community Development. 2018. “California's Housing Future: Challenges and Opportunities — Final Statewide Housing Assessment 2025.”
- Williams et al., 8.
- Woetzel et al., 2
- California State Legislature. 2015. An Act to Amend Section 65915 of the Government Code, Relating to Housing, Assembly Bill No. 744, 2015–2016 Reg. Session (9 October); Donna Kimura. 2015. “California Developers Win Parking Victory,” Affordable Housing Finance, 23 October; Williams et al., 13.
- Interview with Meea Kang.
- Stuart Cohen. 2015. “AB 744's Paradigm Shift — Affordable Homes Instead of Empty Parking Spaces," TransForum, 22 October; Interview with Ann Cheng, 5 February 2018; TransForm. n.d. “Our Approach" (www.transformca.org/landing-page/our-approach#Our Mission). Accessed 14 February 2018.
- California State Legislature. Senate Floor Analyses. 2015. An Act to Amend Section 65915 of the Government Code, Relating to Housing, Assembly Bill No. 744, 2015–2016 Reg. Session (9 October), 5–6.
- Donald C. Shoup. 1999. “The Trouble with Minimum Parking Requirements,” Transportation Research A:33, 549–74; Ryan Russo. 2001. “Rethinking Residential Parking: Myths and Facts,” Non-Profit Housing Association of Northern California.
- Williams et al., 14.
- Melanie Curry. 2015. “Bill to Reform Parking Minimums Passes CA Senate Transportation Committee," Streetsblog Cal, 10 July.
- California State Legislature 2015; Cohen; Interview with Meea Kang.
- Interview with Meea Kang.
- David Garcia. 2017. “ADU Update: Early Lessons and Impacts of California's State and Local Policy Changes,” 1–2.
- California Department of Housing and Community Development, 1.
- Garcia, 2.
- Interview with Karen Chapple, 5 February 2018.
- Garcia, 3.
- California State Legislature. 2016. An Act to Amend Sections 65582.1, 65583.1, 65589.4, 65852.150, 65852.2, and 66412.2 of the Government Code, Relating to Land Use, Senate Bill No. 1069, 2015–2016 Reg. Session (27 September); California State Legislature. 2016. An Act to Amend Section 65852.2 of the Government Code, Relating to Land Use, Assembly Bill No. 2299, 2015–2016 Reg. Session (27 September).
- Office of Senator Bob Wieckowski. 2018. “SB 831 Fact Sheet,” document provided by Karen Chapple.
- Interview with Karen Chapple; California Department of Housing and Community Development. 2018. “Accessory Dwelling Units (ADUs): Ordinances Received by HCD” (www.hcd.ca.gov/policy-research/docs/ordinances/jurisdiction-ordinances.xlsx). Accessed 12 February 2018.
- Interview with Karen Chapple.
- Karen Chapple, Jake Wegmann, Alison Nemirow, Colin Dentel-Post. 2011. “Yes in My Backyard: Mobilizing the Market for Secondary Units,” University of California at Berkeley, Center for Community Innovation, 6.
- Office of Senator Bob Wieckowski.
- Office of Senator Bob Wieckowski; Garcia, 6–7; Interview with Karen Chapple.
- Interview with Karen Chapple; Karen Chapple, Somaya Abdelgany, Alison Ecker, and Sonrisa Cooper. 2017. “A Solution on the Ground: Assessing the Feasibility of Second Units in Unincorporated San Mateo County,” University of California at Berkeley, Center for Community Innovation, 5, 12–3.
- State of California. 2017. “Governor Brown Signs Comprehensive Legislative Package to Increase State's Housing Supply and Affordability” (www.gov.ca.gov/news.php?id=19979). Accessed 23 January 2018.
- Interview with Karen Chapple; California State Legislature. 2018. An Act to Amend Sections 65585 and 65852.2, and to add Section 65852.21 to, and to add and repeal Section 65852.23 of, the Government Code, Relating to Land Use, Senate Bill No. 831, 2017-2018 Reg. Session (4 January).
- California State Legislature. 2018. An Act to Amend Sections 65852.2 and 65852.22 of the Government Code, and to Add Section 17921.2 to the Health and Safety Code, Relating to Land Use, Assembly Bill No. 2890, 2017–2018 Reg. Session (16 February); Interview with Karen Chapple.
- Interview with Rachel Heller.
- Interview with Meea Kang.
- Interview with Rachel Heller; Interview with Meea Kang.