The state’s Subsidized Housing Inventory (“SHI”) is a list of all low or moderate income housing in the state subsidized under any state or federal program to make it affordable. It is a carefully maintained legal construct that has important consequences for zoning appeals, but has its limitations as a data source. This post collects basic law and data about the SHI.
Legal Definition of the Subsidized Housing Inventory
The Subsidized Housing Inventory is a essentially a list of “low or moderate income housing,” but as discussed below it includes certain additional units.
“Low or moderate income housing” is defined in statute as:
any housing subsidized by the federal or state government under any program to assist the construction of low or moderate income housing as defined in the applicable federal or state statute, whether built or operated by any public agency or any nonprofit or limited dividend organization.
Mass General Laws Chapter 40B, Section 20
This broad definition is clarified by regulations and guidelines promulgated by the state’s Executive Office of Housing and Livable Communities.
First, the regulations define the term “subsidy” very broadly, to include essentially any form of assistance for construction or rehabilitation of housing. However, the definition does not include tenant based rental assistance like mobile Section 8 vouchers.
Subsidy – means assistance provided by a Subsidizing Agency to assist the construction or substantial rehabilitation of Low or Moderate Income Housing, including direct financial assistance; indirect financial assistance through insurance, guarantees, tax relief, or other means; and non-financial assistance, including in-kind assistance, technical assistance, and other supportive services. A leased housing, tenant-based rental assistance, or housing allowance program shall not be considered a Subsidy for the purposes of 760 CMR 56.00.
760 CMR 56.02
The regulations define Low or Moderate Income (“LMI”) Housing to include housing meeting any of the variety of definitions that a state or federal subsidizing agency might employ. (Note that the concept of “subsidizing agency” imports some supervision to assure that the housing is actually provided to low and moderate income people.)
Low or Moderate Income Housing – means any units of housing for which a Subsidizing Agency provides a Subsidy under any program to assist the construction or substantial rehabilitation of low or moderate income housing, as defined in the applicable federal or state statute or regulation, whether built or operated by any public agency or non-profit or Limited Dividend Organization. If the applicable statute or regulation of the Subsidizing Agency does not define low or moderate income housing, then it shall be defined as units of housing whose occupancy is restricted to an Income Eligible Household.
760 CMR 56.02
In case the subsidizing agency does not specify a definition of LMI, the definition of “Income Eligible Household” is used:
Income Eligible Household – means a household of one or more persons whose maximum income does not exceed 80% of the area median income, adjusted for household size, or as otherwise established by the Department in guidelines. For homeownership programs, the Subsidizing Agency may establish asset limitations for Income Eligible Households by statute, regulations, or guideline. In the absence of such provisions, Income Eligible Households shall be subject to asset and/or other financial limitations as defined by the Department in guidelines.
760 CMR 56.02
“SHI Eligible Housing” — housing that may be counted in the SHI — includes some housing in additional to LMI housing.
(a) any unit of Low or Moderate Income Housing;
(b) such other housing units in a Project as may be so defined under the Department’s guidelines; and
(c) any other housing unit as may be allowed under the Department’s guidelines, provided that such housing unit is subject to a Use Restriction and Affirmative Fair Marketing Plan, and regardless of whether or not such unit received a Subsidy
The most significant guideline that expands the SHI beyond LMI housing is the rule that allows all the units in a rental project to be counted if a portion are affordable.
In a rental or [assisted living facility] development, if at least 25% of units are to be occupied by Income Eligible Households earning 80% or less than the area median income, or alternatively, if at least 20% of units are to be occupied by households earning 50% or less of area median income, and meet all criteria outlined in Section 1, then all of the units in the rental development shall be eligible for inclusion on the SHI.
Guidelines, Page II-4
Maintenance of the Subsidized Housing Inventory
The subsidized housing inventory is compiled by the state’s Office of Housing and Livable Communities. However, the state depends on municipalities to apply to add new or rehabilitated units to the inventory. The application forms require the disclosure of the term of applicable income restrictions, so the state is able to track units as to which the restrictions are expiring and remove them from the inventory.
Mass General Laws Chapter 40B, Section 20 allows developers to seek comprehensive permits overriding local zoning in communities in which SHI eligible units comprise less than 10% of the total housing units counted by the last federal decennial census (subject to some other exceptions). The SHI eligible count is thus a number of consequence and is likely to be carefully maintained and to be scrutinized by many. The incentives for accurate maintenance are greatest for communities that are below or near the 10% minimum level.
Limitations of the SHI as a data source
It is tempting to use the SHI as a metric of the productivity of our affordable housing subsidies. However, as discussed below, the SHI legal construct has limitations that make it hard to use for policy analysis.
SHI Eligible Housing Units plus non-eligible units in projects containing SHI units — successive inventories, 2002-2023
Even presuming complete accuracy for the SHI, it is both over-inclusive and under-inclusive as a metric of the amount or growth of affordable housing in the state:
- The SHI excludes unsubsidized housing that may be affordable to LMI people. So, while the SHI continues to grow, it does not account for losses of unsubsidized affordable housing — the number of low rent units has actually declined (even with adjustment for inflation).
- Conversely, as noted above, in mixed-income subsidized projects the SHI includes even the rental units which are not affordable. Some of the growth in the SHI may reflect non-affordable units.
Additionally, the growth of the SHI is both over-inclusive and under-inclusive as a metric of total housing production resulting from subsidized programs. The growth in the SHI reflects both gains and losses that do not involve either the production or destruction of housing.
- The SHI loses units that become available for market occupancy when their affordability restrictions expire, but these units remain part of the total housing supply.
- Conversely, the SHI includes units that have been rehabilitated and subjected to affordability restrictions which were previously fully available for market occupancy. The conversion increases the SHI but does not increase the total housing supply.
The MAPC has noted the limitations of the SHI and called for a public database that would make transparent more of the information underlying the raw SHI.
One inference that does appear to be valid from the data in chart above is that during the period 2002 to 2023, the number of mixed-income ownership developments increased as a share of all subsidized housing. In these developments, only the affordable units count towards the SHI, but the total number of units is recorded; the ineligible units are shown in the orange bars in the chart above. As of the 2002 inventory, only 2.1% of all total development units in subsidized projects were not eligible for the SHI, but 39.6% of the net change in total development units from 2002 to 2023 is accounted for by ineligible units. Details appear in attached spreadsheet.