1. 40B Post-Occupancy Responsibilities: An Overview October 2, 2015 Katharine Lacy, AICP

2. While there is typically a lot of attention paid to 40B developments as they are being proposed approved, and built, once they are occupied it is less clear who does what. While there is typically a lot of attention paid to 40B developments as they are being proposed approved and built, once they are occupied it is less clear who does what. 2

3. What is the Post Occupancy Period? Initial Phase: Project Substantially Complete Cost Examination and Certification Complete Long-Term: As long as deed-restricted, affordable units remain in place

4. Who are the Players ? Initial Phase only: The Developer The Subsidizing Agency Initial Phase and Long-Term: The Monitoring Agent Residents of Affordable Units The Municipality The Condo Association, HOA or Management Company

5. What are the Rules? M.G.L. Chapter 40B 760 CMR 56.00 DHCD’s Comprehensive Permit Guidelines

6. What are the Rules? ParticipantGuiding Documents DeveloperRegulatory Agreement Subsidizing AgencyRegulatory Agreement Monitoring AgentRegulatory Agreement Monitoring Services Agreement Affordable Housing Restriction (Deed Rider) Affordable Unit OccupantsAffordable Housing Restriction Lease Condo/HOA Management Company Condominium Documents Massachusetts Condominium Law Homeowner’s Association By-Laws Management Company Policies MunicipalityBuilding Code, City/Town Regulations and By- Laws

7. Subsidizing Agency Subsidizing Agency and Developer are identified in the Regulatory Agreement. DHCD (LIP) MassHousing Mass Housing Partnership (MHP) Mass Development FHLBB (Bank is the Subsidizing Agency)

8. Post Occupancy Responsibilities: Subsidizing Agency Limited Dividend Requirement Limits Developer profits on 40B Developments Process starts 90 days after “substantial completion” Involves Cost Examination and Cost Certification Process Process is different for homeownership and rental projects.

9. Post Occupancy Responsibilities: Subsidizing Agency Affordability Requirement Affirmative Fair Housing and Marketing 25% of the units are affordable Affordable units have eligible occupants Long Term Affordability Restriction in place

10. Term of Regulatory Agreement: Homeownership 40B “Initial Occupancy” All Affordable Units are occupied by eligible owners All Affordable Units secured with Long Term Affordability Restriction Affordability Monitoring Services Agreement has been put into place

11. Term of Regulatory Agreement Rental 40B Defined Term (Typically 30 Years) Annual Limited Dividend Certification Annual Income Certification Allows for appointment of successor to continue enforcement of Affordability Requirement

12. Post-Occupancy Responsibilities: Affordability Monitoring Agent Subsidizing Agency and Developer are identified in the Regulatory Agreement and Monitoring Services Agreement (if there is one). Rental 40B: Subsidizing Agencies=Monitoring Agent Homeownership 40B: DHCD is the Monitoring Agent for all LIP Projects MassHousing uses a network of 3 rd -party agents (CHAPA, RHSO. etc.)

13. Post-Occupancy Responsibilities: Affordability Monitoring Agent Homeownership 40B- Initial Sales Review the Affirmative Fair Housing Marketing Plan (AFHMP) – Identify necessary revisions and/or corrections. Recommend approval or disapproval to MassHousing; Monitor Initial Sales – Work closely with the Developer and/or their Lottery Agent to ensure that Affordable Units included in a 40B Project are sold to Income Eligible Households and are subject to a long-term Affordable Housing Restriction; Compliance-Determine substantive compliance with Affordability Requirement

14. Post-Occupancy Responsibilities: Affordability Monitoring Agent Homeownership-Supplemental Monitoring Services Monitor Resales - Ensure that all Resales (including those resulting from foreclosures) comply with 40B regulations, the terms of the Affordable Housing Restriction; and the AFHMP; Annual Reporting - Prepare and submit an Annual Compliance Report to the Subsidizing Agency and the Municipality regarding compliance of the Project with the Affordability Requirement; Supplemental Monitoring Services - Ensure ongoing compliance by Affordable Unit owners with Chapter 40B and the terms of the Affordable Housing Restriction, including requests for refinancing, capital improvements, leasing and resale.

15. Post-Occupancy Responsibilities: Affordability Monitoring Agent Rental 40B Annual resident recertification Income Household Size/Composition Review annual limited dividend distribution

16. Post-Occupancy Responsibilities: Affordable Unit Owner Read the Deed Rider! Contact the Monitoring Agent for -Resale -Capital Improvements -Refinancing

17. Post-Occupancy Responsibilities: Affordable Unit Tenant -Notify management company of change in status Income Household Size Occupancy -Respond to requests for annual recertification information

18. Role of Condominium Association -Enforce Rules of Condominium Association -Comply with Massachusetts Condominium Law Note: Condominium Fees and schedule of beneficial interest are established and reviewed by Subsidizing Agency to ensure affordability at initial sale. Changes to condo documents/condo fees are not regulated by Monitoring Agent or Subsidizing Agency.

19. Post Occupancy Responsibilities: Municipality Normal and Routine Regulations and Services: Building Code Health/Safety Regulations State Wetlands Protection Act Town By-Laws (noise, leash laws, parking) Affordable units assessed at “affordable” prices

20. Post Occupancy Responsibilities: Municipality 40B Homeownership Projects: -Municipality is notified of pending Resales and is eligible to purchase Affordable Units for resale through “Municipal Option” -Municipality is notified of pending Foreclosures and is eligible to purchase Affordable Units for resale through “Municipal Option”

21. Post Occupancy Responsibilities: Municipality 40B Rental Projects: -Plan for ongoing affordability at the end of the Term of the Regulatory Agreement (typically 30 years) in accordance with the provisions in the Comprehensive Permit.

22. Contact Info: Katharine Lacy, AICP MassHousing 1 Beacon Street Boston, MA 02108 1-617-854-1098 klacy@masshousing.com