What are affordability restrictions?

Written by: Shelly Goehring, CPC Steering Committee

March 26, 2015: Housing affordability restrictions, often created through deed restrictions, are tools to assure housing is affordable for households at designated income levels. Restrictions generally focus on three areas: 1) price affordability, 2) buyer/renter eligibility and 3) occupancy and use guidelines. For example, a deed restriction will outline how to set the price of an affordable unit at the time of resale, the income limits that make buyers or renters eligible for the housing and generally specify that the unit must be owner occupied and used for affordable housing.

In Massachusetts, a restriction specifying the housing is available for households earning up to 80% of the area median income (AMI) is required for the unit to be included on the Subsidized Housing Inventory (SHI). [An exception to this is that all rental units in a Chapter 40B development can be included on the SHI, even market rate units.] The unit's availability must also be advertised using an Affirmation Fair Housing Marketing Plan, accepted by the MA Department of Housing and Community Development.

Most affordability restrictions are in place for a set period of time. When the restriction expires, the affordable unit can revert to a market rate unit. At this point, it would also be removed from the SHI. Some communities have used Community Preservation Act (CPA) funds to extend restrictions or even "buy down" market rate units. If a restriction, providing a community benefit, is placed on the unit and the housing is available only to households earning up to 100% AMI, then these are acceptable uses of CPA funds.

Today, many communities in MA prefer restrictions to be "in perpetuity" so that units remain on the SHI.

Shelly Goehring is the Community Preservation Program Manager at the Massachusetts Affordable Housing Alliance (MAHA).