Affordable housing law under fire

Saying that developers are abusing the affordable-housing law, state representatives from Groton and Billerica have filed bills to repeal the nearly 40-year-old act.

"We are one of the worst places in the United States for affordable housing, and this law has been on the books since 1969," said Representative Bill Greene, a Democrat from Billerica. "It's clearly not working."

Representative Robert Hargraves, a Groton Republican, said he wants "to see it repealed and completely rewritten."

"Affordable housing is necessary, but the law has been abused," Hargraves said.

The law, known as Chapter 40B, allows developers to bypass local zoning, when they promise to set aside at least 20 percent of the housing units for low- and moderate-income people. Income guidelines are set by the US Department of Housing and Urban Development.

In the past decade, as the amount of buildable land in Massachusetts has dwindled , developers have turned to 40B as a way to keep building. Most of the proposed developments have been built in the suburbs.

The law states that in communities that don't meet the state's affordable housing quotas, developers whose 40B projects are rejected by a town can appeal to a higher authority.

"All this law is doing is making developers rich and turning suburbs into cities," Greene said.

Suburban critics of the law say it has stripped communities of their decision-making.

But builders, and their bankers, lawyers, and consultants, argue that the law is necessary to create low-cost housing in a state with sky-high housing costs. And they have spent a lot of money to keep it on the books.

According to the secretary of state's office, from 1999 to 2004 developers spent $8.2 million to hire some of the state's most politically wired lobbyists. At the same time, more than 70 bills designed to amend or abolish Chapter 40B have stalled on Beacon Hill.

House Speaker Salvatore F. DiMasi said bills to change or eliminate Chapter 40B will be considered along with measures designed to increase the availability of affordable housing.

"Getting more shovels in the ground across Massachusetts and expanding housing opportunities to more of our residents has been and will continue to be one of our top priorities," DiMasi said.

Phillip Hailer, spokesman for the Department of Housing and Community Development, which administers the law, declined to comment on the legislation.

Eric Gedstad, spokesman for the Massachusetts Housing Finance Agency, a bank that lends money to most of these developers, also declined to comment.

Hargraves's supporters include Representatives Geoffrey Hall of Westford, Frank Hynes of Marshfield, Thomas Golden Jr. of Chelmsford, and George Peterson Jr. of Grafton.

Hargraves is especially concerned about the lack of oversight of the developers' financial records. There is a lesser-known component of the law that limits a developer to 20 percent profit on the project. Any excess money that is made is supposed to be handed back to the community in which the development is built and used to create more low-cost housing.

Last fall, state Inspector General Gregory Sullivan said developers whose projects had been audited had inflated expenses and deflated income to keep profits that ought to be handed back to communities.

Sullivan called the law "a pig fest." Hargraves said, "This thing has got to be cleaned up."

Christine McConville's email is cmcconville@globe.com.