Commonwealth Housing Task Force Quarterly Summary of Progress as of September 30, 2010 Note: in order to reduce the size of these reports, we have condensed the description of regular ongoing activities, and have moved much of the Chapter 40R update to Appendix I of this Report. For background, please visit www.tbf.org/chtf and click on “Quarterly Updates”. The Appendix follows at the end of this quarter’s Report. During the third Quarter of 2010, the Commonwealth Housing Task Force focused its efforts on: 1. The implementation and monitoring of Chapter 40R, including responding to cities and towns for requests for information about the program. 2. The call for an increase in state funding for affordability. 3. Strategic planning for new initiatives of the Task Force, including assuring that the benefits of new construction under 40R and other state programs are available to the widest range of households and businesses, work with the committee to focus on public housing, and work with other advocacy organizations to prevent the repeal of Chapter 40B. 4. An expansion in participation in the Task Force itself, including a focus on diversity; and 5. Seeking further financial support for the work of CHTF. Barry Bluestone, Eleanor White, and Ted Carman, working through the Dukakis Center for Urban and Regional Policy at Northeastern University, have carried out the staff work in coordination with active subcommittees and Boston Foundation staff. Housing Report Card 2010 about to be Released The Dukakis Center, under the direction of Barry Bluestone, has completed its Greater Boston Housing Report Card 2010 which is set for release on October 14 at The Boston Foundation. Please watch for details about this event. This year’s report pays special attention to the state of the Massachusetts economy, to the spurt in foreclosures in the summer of 2010, to concern over the possible repeal of Chapter 40B, and for the first time devotes an entire chapter to student housing for undergraduate and graduate students attending Greater Boston’s post-secondary educational institutions. The report suggests that last year’s report may have expressed unwarranted optimism about the long-term prospects for economic recovery and that the slowing of the national economy this summer and fall makes it difficult to forecast what might happen to the Greater Boston housing market later this year and into 2011. The report notes the sharp rise in foreclosure deeds and auctions beginning this spring and expresses concern that these could lead to renewed softening in home prices, Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 2 leaving even more families “underwater” with their mortgages worth more than the current value of their homes. Student enrollment in Greater Boston has increased sharply, particularly over the past three years, putting enormous pressure on local rental markets. The report suggests that an additional 45,000 post-secondary students in Greater Boston generated sufficient demand for rental apartments that rents remain near their all-time high despite overall weakness in the economy. Repeal of Chapter 40B—if Question 2 is successful on the November ballot-- according to the report (and discussed in detail below), would eliminate the most important Massachusetts law contributing to what affordable housing we have in the Commonwealth. Nearly 200 Chapter 40B projects would be placed in jeopardy, reducing the future stock of housing by over 9,000 units. We have talked in the Quarterly Reports throughout 2010 about the paradox of house prices falling, yet affordability also declining through the recession, with serious potential impacts upon the whole state economy.. On June 3, 2010, Professor Ed Glaeser of Harvard University authored an Op-Ed in the Boston Globe underscoring the degree to which lack of housing opportunities undercuts the Boston area’s ability to compete with other cities (he focuses on Atlanta) for much-needed new workers. On June 16, 2010, the State House News reported that the Census Bureau had announced that “Massachusetts had the fifth slowest rate of housing growth in the country over the past decade”, which will come as no surprise to CHTF members who have heard this refrain constantly both in CHTF Quarterly Reports and in Boston Foundation/Northeastern/CHAPA Housing Report Cards over the last several years. The passage and implementation of Chapters 40R and 40S were a direct response to this trend. Then, again, on June 20, 2010, the drumbeat continued with a Banker and Tradesman article predicting another housing price bubble in Greater Boston, due in part to the difficulty of generating housing construction. Barry Bluestone was quoted extensively in this piece. In further confirmation of this trend, on July 12, 2010, Banker and Tradesman wrote that “Boston ranked fourth in the country in rent growth in the second quarter, with effective rents edging up 1.8 percent to an average rent of $1,625 per month.” See this full article as Appendix II of this report. And, finally, Banker and Tradesman reported on an increase in the issuance of building permits in a story on August 2, 2010 (see the full story as Appendix III of this report); many of those units are for market-rate dwellings and the increase was attributed in part to developers’ fear of losing their permits if they didn’t act.. But much of this increase can also be attributed to the spike in rents. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 3 Campaign to Protect Chapter 40B The Campaign to Protect the Affordable Housing Law is working hard to defeat the initiative petition to repeal Ch. 40B. Question 2 on the November ballot will decide the fate of the Affordable Housing Law, also known as Chapter 40B or the Comprehensive Permit Statute. Repealing this law would remove a critical tool to produce affordable housing in the Commonwealth; it would weaken our economy and reduce the amount of affordable housing that could be built in the future. In addition to prospectively repealing the ability to use the Comprehensive Permit in the future, the text of the petition provides that developers that already received a comprehensive permit but do not have a building permit for at least one unit by January 1, 2011 would not be able to use their comprehensive permit. This impacts an estimated 12,000 housing units in advanced stages of planning. In view of the serious implications of a defeat of Chapter 40B, we believe that it is imperative to spread the word about the “Vote NO on 2” campaign. The University of Massachusetts Donahue Institute recently released a study on the economic benefits of the Chapter 40B. To sum up the report’s findings: In the last decade, nearly 22,000 homes have been built under the Massachusetts Affordable Housing Law. These new homes have resulted in almost 50,000 jobs and $9.25 billion in economic activity over the past ten years alone. Proposed construction of Chapter 40B homes and the resulting economic linkages is projected to result in total expenditures of $10.42 billion and 54,307 jobs in the coming years. “Chapter 40B has resulted in a significant economic benefit for Massachusetts and is achieving its goals of providing housing for low and middle income seniors and families, ” said Alan Clayton-Matthews, Professor at Northeastern University and principal researcher for the study The full study is available at: http://www.chapa.org/pdf/UMass40BReportFinal.pdf We recommend strongly that CHTF members visit www.protectaffordablehousing.org . The Affordable Housing Law, Ch. 40B, is responsible for 80% of affordable housing built in the last decade outside of the largest cities in Massachusetts. Without it, it will be extremely difficult to expand affordable housing opportunities for working families and seniors. Please contact firstname.lastname@example.org if you are interested in supporting the effort to Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 4 protect Chapter 40B. In addition, donations can be made to the campaign online at www.protectaffordablehousing.org. On May 3, 2010, Ted Carman, representing CHTF, presented testimony in support of Chapter 40B at a hearing before the Joint Committee on Housing in the State Legislature. The text of the 40B CHTF testimony was included in the last Quarterly Report but since it may prove helpful between now and the election on November 2, it is included again here as Appendix VI. We are pleased to report that all three candidates for Governor (Governor Deval Patrick, Treasurer Tim Cahill, and Charles Baker) have pledged support for Chapter 40B. On June 22, 2010, the Campaign to Protect the Affordable Housing Law held a rally at Fenway Park. With more than 300 in attendance to support 40B, the audience heard from David Friedman of the Boston Red Sox; Tripp Jones, Campaign Chairman; Paul Grogan of The Boston Foundation; Robyn D’Apolito, a resident of affordable housing; and former Governor Michael Dukakis. The Boston Business Journal carried a strong editorial in favor of Chapter 40B on July 16, 2010 (read it in full in Appendix IV of this report.). And the Boston Globe carried a story about Chapter 40B on September 15, 2010, included here as Appendix V. In the worst case scenario, over the next year the Commonwealth could face the elimination of both Chapter 40B and—through lack of funding-- the effective loss of Chapter 40R and 40S. The ability to meet the state’s need for more affordable housing would suffer a devastating setback that would almost surely harm our ability to retain and attract young working families and jobs. The long run consequences could be devastating. Other Programmatic Developments Compounding this problem is the loss of planning grant funds for 40R. During the last three years, DHCD has made critically-important planning grants to communities under the Priority Development Fund (PDF) program. Over $1,000,000 in planning grants has been disbursed, a good proportion going to communities for planning 40R districts. It is clear that many of these districts would not have been planned and passed without access to planning grants. (Similarly, in Connecticut, where the state has been giving out planning grants for Incentive Housing Zones, a number of communities there are moving forward with planning for zones under this program.) However, PDF funds are now almost fully depleted in Massachusetts and there is no current state source of planning money for communities adequate to fund the planning of a Chapter 40R district. This will dramatically reduce the number of communities able to actively pursue the creation of 40R Smart Growth Districts. However, we are very pleased that the Massachusetts Housing Partnership (MHP) has made planning grant funds available, targeted to 221 communities in the Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 5 Commonwealth, to assist in the planning of individual affordable housing developments. These funds could be very important to the effort to accelerate the number of construction starts in Chapter 40R districts, as well as facilitate the development of additional affordable housing for families outside of 40R districts. In the first round of applications under this new program (for which applications were due on April 30, 2010), MHP awarded over $2.6 million in private funds for small-scale family developments in Barnstable, Chelmsford, Hopkinton, and Sudbury. Applications for the second round of this funding were due to MHP by July 16, 2010. In addition, studies by the Dukakis Center at Northeastern University have demonstrated that over the next ten to twenty years, the preponderance of household growth in the Commonwealth will be in over-55 age cohorts, followed shortly by a need for housing for young households who are part of the “Millennial” generation of “echo boomers” – the children of the baby boomers. In this context it is important to remember that CHTF’s mission relates to increasing the supply of housing –both rental and ownership—for all income segments. In that connection, we are delighted that the Permit Extension Act of 2010 was passed as part of comprehensive economic development legislation. This bill would allow projects—many of them delayed as a result of the financial challenges of the recession-- an additional period of time in which to begin construction. The CHTF membership has previously voted to support passage of this bill. This legislation has also been a major priority of the National Association of Industrial and Office Properties (NAIOP), which worked hard for its passage. Thus, on July 31, 2010, the Legislature passed the Permit Extension Act as part of its omnibus Economic Development Bill (Section 173 of Senate Bill 2582). This act will provide a two-year extension to permits in effect or existence between August 15, 2008 and August 15, 2010. It applies to state and local permits with a few exceptions, unfortunately including 40B. It appears that the lack of protection for Chapter 40B permits was inserted into the bill at the final stages of the legislative process. Finally, we are also pleased to report a significant level of Federal Department of Housing and Urban Development (HUD) funding coming into Massachusetts. According to a HUD press release of August 12, 2010, Secretary Shaun Donovan announced that the Commonwealth of Massachusetts will receive more than $33.8 million to support community development and produce more affordable housing. .HUD's annual funding will also help find homes for individuals and families living on the streets, and provide permanent housing for individuals living with HIV/AIDS. And on September 8, 2010, HUD announced nearly $1 billion in Neighborhood Stabilization Program (NSP) formula allocations. These awards are the third round of funding under the NSP program, and follow investments of nearly $2 billion under NSP2 and almost $4 billion from the original NSP1 appropriation contained in the Housing and Economic Recovery Act of 2008. Massachusetts’ communities have been allocated almost $7.4 million of the third round of funding. Eligible activities under the program include land and property acquisition, demolition or rehabilitation of abandoned Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 6 properties, and downpayment and closing cost assistance to low- to moderate-income homebuyers (household incomes not exceeding 120 percent of area median income). In addition, grantees can create "land banks" to assemble, temporarily manage, and dispose of vacant land for the purpose of stabilizing neighborhoods and encouraging re-use or redevelopment of urban property. Implementing Smart Growth Zoning: Increasing Interest from Municipalities and Local Groups Chapters 40R and 40S have now been on the books for over four years. The programs have resulted in the passage of 33 Chapter 40R smart growth zoning districts in 31 municipalities, totaling approximately 12,032 zoned units supported by their communities, with continuing interest in many more. This recognizes the addition of one Chapter 40R district approval just since the last Quarterly Report. Approved 40R Districts are demonstrating the substantial opportunities for innovative planning built into the program, and as these Districts gain increasing attention, other cities and towns are recognizing the opportunity that 40R provides for both housing and economic development, as well as neighborhood revitalization. Please refer to Appendix I to this Report for the regular detailed update on progress under the Chapter 40R program. This is a reminder that CHAPA and MAPC issued a joint publication in October of 2009 analyzing 40R activity, including district adoption, development activity in approved 40R Districts, and the permitting process in 40R Districts relative to other forms of development in Massachusetts. CHTF staff participated in this effort as part of a diverse working group. The comprehensive report on the program includes an Appendix that describes each community’s Chapter 40R project in detail (as of that date of publication). The report, entitled “The Use of Chapter 40R in Massachusetts”, adds to the body of documentation about the Chapter 40R program. The report can be downloaded from the CHAPA website, www.chapa.org and then click on “View All CHAPA Publications.” In addition, a small working group, including representatives of CHTF, DHCD and others, has met several times under the direction of Jennifer Raitt of MAPC to discuss 40R issues, and the group plans to continue these discussions over the coming months. In the group, there is general consensus on support for adequate funding for 40R, for more PDF planning money, and for repealing the clawback/recapture provision in the 40R statute (discussed more fully later in this Report). We recently read with interest an article in www.citiwire.net of August 1, 2010 by Sam Newberg, a housing consultant based in Minneapolis (reproduced here as Appendix VII). The article focuses on NIMBYism directed against the production of rental housing. In thinking about this very on-target piece, we recognized that (beyond strong local and state leadership), two things are generally missing from the mix outside of Massachusetts: Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 7 1. An incentive for cities and towns to allow such housing. Chapter 40R includes both financial and non-financial incentives: up-front State cash bonuses, further cash bonuses upon the issuance of building permits, a school cost “insurance policy” through Chapter 40S, and more. AND 2. A concentrated effort to keep older rental housing in good repair so that it doesn’t poison the local view of such housing forever. In Massachusetts, since there has been such a high barrier to production of rental housing for more than 40 years, most rental housing has been built under the auspices of Chapter 40B (the Anti-Snob Zoning Act, now under serious attack) and financed by quasi-public agencies such as MassHousing and the Mass. Housing Partnership, which then invest significant time and effort in monitoring and management oversight. Those developments look almost as good 40 years after they were built as when they were new. MassHousing has throughout its history maintained management oversight as a major focus of the Agency and it has remained so to this day; these tens of thousands of rental affordable housing units can be shown to dubious local leaders as proof that rental housing need not decline over time and become a blight on the community. This approach is also being used in the effort to protect Chapter 40B. Other states have also taken notice of the results that 40R has produced. Enabling Legislation for “Incentive Housing Zones” was approved in Connecticut in June 2007, with substantial input from CHTF staff. The legislation was modeled on Massachusetts Chapter 40R. Called HOMEConnecticut, over 50 communities are moving forward with plans for Incentive Housing Zones and have applied for State Grants to plan the districts. The State of Connecticut appropriated $4,000,000 to fund initial planning and Incentive Payments, and several specific proposals are moving forward locally. On December 15, 2008 a “Smart Housing Incentives Act” bill was filed in the New Jersey legislature with bipartisan support. Commonwealth Housing Task Force staff also contributed substantively to this New Jersey initiative, further building on the success of 40R in Massachusetts. The bill does not include a provision for state funding for incentive payments, and in today’s economic climate, it is unlikely that the bill, even if passed, would result in significant rezoning efforts. However, it does represent a strong statement of support for the 40R policy objectives. Implementation of Chapter 40S: the School Cost “Insurance Policy”, Funding for both Chapters 40R and 40S, and a Proposed Technical Amendment to 40R The Massachusetts Department of Revenue (DOR) has recently issued an “Informational Guideline Release” for Chapter 40S, dated June 2010. It “informs communities with approved smart growth zoning districts of the reporting procedure to be followed in order to receive an annual state reimbursement for additional school costs Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 8 resulting from an increase in public school students living in developments within the zoning districts”. The release is at www.mass.gov/Ador/docs/dls/publ/igr/2010/igr10_301.pdf. The procedures allow a community to inform the State by September 15th of each year that it will not claim any reimbursement for the year, pursuant to which the detailed submissions to the State do not have to be made. This is helpful because many communities will not be eligible for reimbursement in any particular year, and in that case they will not be required to submit the information otherwise required. The Guideline Release sets forth the procedures to be followed each year in order to obtain reimbursement under Chapter 40S. This is a helpful addition to the overall administration of the Chapter 40R / Chapter 40S program. Previous Quarterly Reports have described in detail the provisions of Chapter 40S and the efforts to assure a reliable long-term source of funding for both Chapters 40R and 40S. Please refer to www.tbf.org/chtf and click on “Quarterly Updates” to review that discussion. The map below indicates the communities that have already implemented Chapter 40R and those in the process of doing so. The table following the map outlines the current funding sources and obligations for Chapter 40R. Status of Chapter 40R Payments and Obligations Initial Funds from sale of Surplus State Land $3,349,370 Appropriations - Transfers, October, 2007 $10,000,000 Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 9 Sales of Surplus State Property, 2007 $78,000 Sales of Surplus State Property, 2008 $7,772,440 Sales of Surplus State Property, 2009 $12,000,000 Sources of Funds $33,199,810 Less Transfer to General Fund, 2009 ($18,000,000) Net Sources $15,199,810 Less Payments and Obligations to Communities: ($13,260,000) Balance in Fund as of September 23, 2010 $1,939,810 In late October, 2009, a proposal surfaced to zero out the Smart Growth Housing Trust Fund in response to the serious financial crisis facing the Commonwealth. CHTF vigorously protested this proposal. Our thanks go particularly to Mary Jo Meisner and Jim Rooney (then) of the Boston Foundation, plus Ted Carman and the Co-Chairs for pulling this response together so quickly. In a compromise that was responsive to the overall budget challenge while reiterating the Legislature’s commitment to the program, a reduction to the Trust Fund was approved, but preserved nearly $4,000,000 in remaining funds to honor the obligations of the program. Going forward, the prospects for a renewed source of funding are somewhat hopeful thanks to a provision in the surplus state land bill filed by the Patrick Administration and currently pending before the Joint Committee on State Administration and the House Committee on Ways and Means (“An Act providing for disposition of surplus state real property based on smart growth land use policies”) to expedite the disposition of surplus state property according to smart growth principles. A significant majority of the proceeds from the disposition would be distributed to the Smart Growth Housing Trust Fund. Unfortunately that bill did not advance to passage before the end of the legislative session this year. As reported previously, identical legislation was filed by Rep. Kevin Honan (House 197) and Senator Harriette Chandler (Senate 86) to provide for a continuing and reliable source of funding of the Smart Growth Housing Trust Fund (refer to http://www.mass.gov/legis/bills/house/185/ht00pdf/ht00160.pdf.). The bills are similar to the legislative proposal included in the CHTF Quarterly Report of 6-30-07. They were referred to the Committee on Community Development and Small Business. We are very grateful to Rep. Honan and Sen. Chandler for their strong and continuing leadership on this legislative effort. Although the legislative process on these bills was not completed in the last session, passage of these bills would play a major part in instilling confidence in cities and towns about the 40R/S program, and we have been working to continue to pursue them. Ted Carman testified at a hearing in the legislature about this bill; his excellent testimony was included as an Appendix to the previous Quarterly Report. Refer to Appendix VIII of this Report for a recent Banker & Tradesman article about this bill. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 10 We have also had discussions with legislative and administration officials at their request about the desirability of a technical amendment to Chapter 40R. In the final stages of passing Chapter 40R in June of 2004, a provision was added to the bill requiring DHCD to recapture incentive payments made to localities if construction had not begun in a 40R Smart Growth Zoning District within 3 years of the initial bonus payment having been received by the locality. This provision runs contrary to one of the fundamental tenets of CHTF’s zoning proposal that led to 40R: that the goal is to create land zoned as-of-right for multifamily and single-family housing in smart growth locations, and further, to create an excess of zoned land for these purposes. Construction will then happen when the market responds to that zoning opportunity, which may be within 3 years, or may be much longer. The existing “clawback” provision has served as a disincentive to the passage of 40R in cities and towns, especially when the market softens, as in the recent recession. Further, in the current economic downturn, the lack of construction in a 40R district is rarely the fault of the city or town, and we do not believe that they should be penalized for something far beyond their control. We have suggested that repealing this provision would not only remove the disincentive to localities to participate in Chapter 40R, it would also make the program administratively easier for DHCD. Senator Harriette Chandler filed a bill, Senate 623, in the last session to correct this situation, and we are very grateful to her and her staff. Spreading the Word about Chapter 40R Barry Bluestone, Eleanor White, and Ted Carman continue to respond to requests for meetings, discussions, and presentation of material about Chapter 40R from planning officials, local elected officials, affordable housing advocates, realtors and others to assure widespread education about the benefits of Chapter 40R. Please visit the Boston Foundation/CHTF website, www.tbf.org/chtf and consult previous Quarterly Reports for a detailed description of this ongoing activity. We encourage you to regularly visit the CHTF website, and we welcome all comments and suggestions for improvement. The website serves as the central repository for documents, status reports and resource material on the Task Force itself, Chapter 40R, Chapter 40S, press coverage, and related matters. Dukakis Center staff, led by Barry Bluestone, is responsible along with Tim Gassert at the Boston Foundation for updating the CHTF website on a regular basis. Chapter 40R is often the subject of news and feature articles in the general press and other media. The topic has also continued to attract interest from trade and industry groups, and is regularly featured as a topic at various conferences and workshops. Funding and Legislation for Affordability Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 11 The CHTF, under the auspices of the Strategic Planning Committee led by Robert Beal, and in close cooperation with CHAPA, continues to focus on advocacy for state funding to support housing affordable to households at 80 percent of median income and below, especially for increases in funding for state public housing, the affordable housing trust fund, and the Massachusetts Rental Voucher Program. We will continue to develop recommendations for priority funding initiatives, and will assist where we can be helpful with Op-Ed articles, letters to legislators, and other forms of advocacy, in most cases through or in coordination with CHAPA. The FY’11 (the fiscal year beginning July 1, 2010) affordable housing programs were essentially level-funded at FY’10 levels. We await a supplemental budget to allocate federal FMAP funds that were approved by Congress to bolster Public Housing Operating Subsidies, the Massachusetts Rental Voucher Program and Residential Assistance for Families in Transition. Prior to adjourning on July 31, the Legislature did pass important Economic Development Legislation (mentioned earlier) that includes several housing provisions. The bill includes the following: • Removes an archaic State Low Income Housing Tax Credit (LIHTC) requirement that an investor in State LIHTC also has invested in Federal LIHTC. This change is designed to attract additional investors to the State LIHTC market. (See Sections, 116, 117, 123 and 124). • Grants two-year extensions beyond the original expiration date for permits granted between August 15, 2008 and August 15, 2010. Comprehensive Permits granted under Ch. 40B would not receive the benefit of the extension. (See Section 173). • Codifies a definition of Community Development Corporations under CH. 40H. (See Sections 86, 87, and 98). • Adjusts the Board of CEDAC to insert the Secretary of Housing and Economic Development as chair. (See Section 90). • The Legislature included several provisions to spur investment in Gateway Cities. These include: - Recapitalizes the Growth District Initiative with $50,000,000. The program would be paid for through general obligation bonds. (See Section 2B). - Creates a new $5,000,000 per year tax credit “Housing Development Incentive Program” for market-rate housing costs, codified as Ch. 40V. Developers and individuals conducting substantial rehabilitation of buildings to create housing with no more than 50 units, at least 80% of which must be market rate could apply to DHCD for tax credits to offset rehabilitation costs. In order for housing to qualify for the incentives, municipalities must designate areas of the municipalities to prioritize development and apply to DHCD. The municipality Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 12 must also give a 10% - 100% property tax break to homeowners living in the constructed units in order for the development to qualify for the market rate tax credits. The tax credits can only go to developments in municipalities that have median incomes and post-secondary degree attainment rates below Commonwealth averages. The cities must also have populations between 35,000 and 250,000 people. (See Sections 17, 105, and 129). • Revamps Tax Increment Financing system. (See Sections 75, 77 and 78). • Authorizes a new expedited permitting program, Ch. 43E, to speed up state permitting decisions. (Section 107). • Extends Brownfields environmental responses tax credits. (See Sections 113, 127, and 128). On July 28, 2010, the Legislature enacted An Act to Stabilize Neighborhoods by unanimous votes in both chambers. This bill is aimed at addressing various impacts of the foreclosure crisis. The Commonwealth experienced 7,431 foreclosures through the first six months of 2010 – this represents a 56.7% percent increase over the same time period in 2009. Thanks go to Speaker Robert DeLeo, Senate President Therese Murray, Chairman Charles Murphy, Chairman Steven Panagiotakos, Chairman Kevin Honan, Chairwoman Sue Tucker, and the entire Legislature for supporting this critical legislation. The bill includes the following provisions: · Delays a foreclosure by an additional sixty days if the financial institution neglects to consider a loan modification, · Provides eviction protections to tenants in foreclosed properties who are in good standing and continue to pay rent, · Requires counseling in order for a low income senior to receive a reverse mortgage. (This provision would take effect in August, 2012), · Creates a local option for municipalities to exclude nonprofits from property taxes during the term that the nonprofit rehabilitates a foreclosed home, and · Criminalizes mortgage fraud. The following bills did not advance to passage: House bill 197, which would fund the Smart Growth Housing Trust Fund by diverting the income taxes of residents living in Ch. 40R housing, has cleared the Community Development Committee and was in House Ways and Means but did not advance before the end of the session. This bill has been supported by CHTF since its first introduction in the legislature and would have a major effect upon the ability of Chapter 40R to be financially self-sustaining. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 13 Comprehensive Zoning Reform legislation has cleared the Committee on Municipalities and Regional Government and is before the Senate Committee on Ways and Means. The 77- page bill carries many provisions, including mandating that local zoning be consistent with planning, barring exclusionary zoning practices, authorizing impact fees for limited uses, rewriting Ch. 40A into clear statements, reforming vesting and grandfathering, and replacing the Approval Not Required process with a minor subdivision review process. The bill also creates the ability of communities to opt into defined planning and zoning benchmarks for housing in exchange for additional authority to regulate developments. CHTF was represented on the Governor’s Zoning Reform Task Force which debated many elements of this bill over the last two years. A detailed summary of the bill’s provisions is included in Appendix IX of this report. Legislation to promote innovative strategies in public housing filed by Rep. Sanchez and Sen. Chandler (http://www.mass.gov/legis/bills/house/186/ht01pdf/ht01237.pdf --(see comments about this bill in the section of this Report about the Public Housing Committee) received a hearing on April 28, 2009 and was reported favorably by the Housing Committee. The legislation, H. 4544, did not advance from the House Committee on Ways and Means. CHTF has been supportive of this legislation. Legislation to coordinate new supportive housing filed by Representative Honan and Senator Jehlen (http://www.mass.gov/legis/bills/house/186/ht01pdf/ht01222.pdf) received a hearing on November 10, 2009, and has been reported favorably out of Committee but did not advance from the House Committee on Ways and Means. CHTF has been supportive of this bill. Legislation to dedicate energy efficiency funding for improvements in affordable rental housing, filed by Representative Honan and Senator Tucker (http://www.mass.gov/legis/bills/senate/186/st01/st01546.htm), was referred to two Committees (Telecommunications, Utilities and Energy; and Housing) and has received hearings from both committees. The House bill was favorably advanced and was before the House Committee on Ways and Means, but did not advance before the end of the session. Legislation concerning Surplus Land disposition to fund the Smart Growth Zoning Trust Fund—see House 4790 and Conference Committee Report 4801. Members interested in supporting or learning more about these proposals should contact Eleanor White at email@example.com or Sean Caron at firstname.lastname@example.org. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 14 The Task Force awaits the release of the FY’11 capital budget. The Executive Office of Administration and Finance reduced the overall FY’10 capital budget because of the lack of revenue to support debt service payments. Funding for housing was reduced from $193 million in FY’09 to $168 million for FY’10, with large reductions made to the Housing Stabilization Fund and the Public Housing Modernization Fund. The FY’09 capital budget included a $20 million contribution from MassHousing that was not made available in FY’10. We encourage CHTF members to weigh in with A&F and urge Secretary Gonzalez to increase capital funding for housing to the $193 million funding amount allocated in FY’09. Retooling the Federal Low-Income Housing Tax Credit A broad-based coalition of approximately 175 local, state and national organizations continues to advocate for a consensus proposal to improve the Federal Low Income Housing Tax Credit and are advocating for its adoption with Congress and the Obama Administration. Recently, Senator Reid filed a new tax extenders bill, which once again includes a one-year extension of the 9% exchange program, funding for the National Affordable Housing Trust Fund, and extension of the New Markets Tax Credit. The fate of the bill is uncertain and may be taken up in a lame duck session after the November elections. Foreclosures and the “Stuck” Home Mortgage Market Members of CHTF have participated in meetings, discussions and forums related to the subprime lending/foreclosure crisis facing the state, and continue to support the excellent work of other organizations leading this effort. Among them are CHAPA, ULI (the Urban Land Institute), MACDC (the MA Association of Community Development Corporations), and HUD. As one example of this pioneering work, CHAPA, in collaboration with DHCD and a broad-based advisory committee, continues to implement a statewide foreclosed properties clearinghouse to facilitate the disposition of REO (Real Estate Owned) properties to non-profits, municipalities, owner-occupants, and responsible private investors. This is being done in coordination with the major lenders and servicers that own and manage foreclosed properties in Massachusetts. The program became fully operational on July 1, 2009, and it involves approximately 75 qualified purchasers and 39 municipalities. Since July 1 of last year, more than 120 housing units are in the process of being purchased for affordable housing or have already been closed. The Expanding Opportunities Committee Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 15 This committee, meeting since July of 2006, was formed to explore possible diversity initiatives, both to increase participation in CHTF by people of color and other underrepresented groups, and to assure that programs supported by CHTF will have a positive effect on social justice and equity issues. The committee is implementing an action agenda to enhance inclusiveness in housing in cities and towns throughout the state. In connection with this diversity initiative, please extend an invitation to colleagues you may know who would be interested in joining the Task Force. They can join the CHTF by sending their contact information to Eleanor White at email@example.com. Since the inception of the committee, we have been very pleased to have received “memberships” in CHTF from more than 75 people of color and from underrepresented professions. Please refer to the website, www.tbf/chtf and review previous Quarterly Reports for a general description of this committee, and for prior initiatives of the group. The most recent meeting of this committee included a presentation by Professor Barry Bluestone and graduate students Margaret Keaveny and Jessica Casey of the Dukakis Center at Northeastern University. As previously reported, the committee has been working on creating a guide to serve as a resource for Massachusetts communities seeking to be more welcoming of diverse populations, with a special emphasis on people of color, low-income people, and people with disabilities. Professor Bluestone and Ms. Keaveny agreed to take on the project, and began their work in early 2010.. Margaret has moved on to full-time work at the Crittendon Women’s Center, but Jessica Casey has ably replaced her. Barry Bluestone presented a PowerPoint presentation that summarizes the results of a statistical model the three researchers developed to test whether an increase in minority population in a municipality contributes to slower appreciation in home values, lower spending on students, or increases in crime. Using data from the 1980 and 2000 U.S. Census for virtually all the cities and towns in Massachusetts, they found that increases in minority population (up to at least 20 percent) has no discernable impact on any of these measures. Indeed, an increase in minority population appears to be correlated with a slight decline in crime rates and virtually no reduction in home price appreciation or student spending. The implication is that contrary to the fears that some residents have that welcoming a more diverse population into their communities will have adverse consequences, there is no evidence in Massachusetts for this occurring in the past. The Dukakis Center Staff is continuing to research the impact of expanding affordable housing on community well-being as measured by changes in median household income, changes in property values, changes in public school spending, and crime rates. The project will also investigate actions taken by other communities throughout the country to enhance community diversity. We are excited about the potential of this research to provide very real assistance to Massachusetts communities seeking to be more welcoming and more diverse. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 16 Once the content of the guide is developed, the Committee will be working to locate it on the CHTF website, with interactive, hands-on content. The Committee’s goal is to create a website that will offer the guide and other useful information, and also an online discussion forum to facilitate the sharing of ideas, successes and challenges of communities engaged in this effort. The Committee will work closely with Tim Gassert, the Boston Foundation webmaster, to provide content/updates to content, etc. We believe that this can develop into an extremely valuable resource for increasing the level of “welcome-ability” of communities throughout the state. We also hope that the website will prove to be a valuable resource for families searching for welcoming communities in which to settle, both those households already in Massachusetts and those moving to the Commonwealth from other states. Finally, the committee has begun work to develop a system by which companies involved in construction in 40R districts and other state-supported development can be recognized for diversity in their selection of subcontractors and supportive services. The subcommittee responsible for this project is researching the components that would support this recognition program. More details will follow as they are developed. All are welcome to join this committee; please send your contact information to both Barbara McDonald, committee member, at firstname.lastname@example.org and Maura Fogarty at the Boston Foundation, at Maura.Fogarty@tbf.org . Only those who have signed up for this committee will receive notices of future meetings. Comments about the agenda for the EO Committee should be addressed to Sarah Lamitie and Jacqueline Cooper, who are serving as co-chairs of the Committee. They can be reached at email@example.com (Sarah) and firstname.lastname@example.org (Jackie) respectively. Thanks to both Jackie and Sarah for their leadership of this effort, and to Boston Private Bank for providing the regular meeting space for this committee. The Public Housing Committee CHTF has lent strong advocacy support to the effort to significantly increase funding for state-assisted public housing development and management over the last year. Although current levels of funding are higher than at any point in almost 20 years, they are clearly inadequate to support either the needs of low-income households or of aging public housing buildings. Public housing programs represent the most efficient and effective means of providing housing for those at 50 percent of area median income and below, and include traditional public housing as well as demand-side voucher programs and major redevelopment efforts. This committee will be identifying programs and legislation that could benefit from CHTF support and will bring new program initiatives forward to CHTF. Charles Eisenberg, an affordable housing consultant with extensive experience with public housing, and Leslie Bos, former Director of the DHCD Mixed-Finance Program of public housing, served as co-chairs of this CHTF committee since its inception. Leslie has asked to step down as co-chair, and has moved to a new position at Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 17 the Massachusetts Housing Partnership, but promises to remain an active member of the committee, and we want to thank her for her leadership and commitment. We are very pleased that joining Charles as new co-chair is Jim Stockard, Curator of the Loeb Fellowship Program at the Harvard University Graduate School of Design. Jim has also been Chairman of the Cambridge Housing Authority for more than 25 years, and is a long-time affordable housing expert. Thanks, Jim! We also want to congratulate Amy Schectman (formerly Director of Public Housing and Rental Assistance at DHCD) on assuming her new position as Executive Director of Jewish Community Housing for the Elderly. With that transition, we are delighted to announce that Lizbeth Heyer, the new Acting Associate Director of Public Housing and Rental Assistance at DHCD, will be DHCD’s representative on the CHTF Public Housing Committee. Welcome, Lizbeth! As with all CHTF committees, membership is open to all. We particularly invite local public housing authority staff and board members, and members of community- based nonprofit organizations, to consider participating in this committee. As mentioned above, the Legislature essentially level-funded the state public housing program for FY’11 at $62.5 million. Meanwhile, numerous studies have indicated that the operating subsidy required just to match the Federal levels would be $110-$115 million. CHTF will continue to advocate vigorously for increases in this account. On the capital budget side, DHCD has identified public housing capital improvement projects needed to be done totaling up to $700 million. As part of its work, the Committee requested that the Commonwealth Housing Task Force support the Public Housing Innovations Bill. This bill is intended to give more flexibility to local housing authorities in the way they use the funds made available to them and in how they administer and manage their portfolios. It is conceived as a pilot program for ten authorities and mirrors many of the changes in the Federal Moving to Work program. A fact sheet summarizing the provisions of the bill was included in a previous Quarterly Report. CHTF membership agreed to support the bill, which, as indicated earlier in this report, did not advance to passage in the last session. The committee also learned that local housing authorities are taking advantage of HUD’s willingness to convert some State developments to Federal public housing. More than 3600 units have been converted to date. Continuing its efforts to increase the efficiency of public housing procurement procedures, the Public Housing Committee reviewed draft legislation prepared by Susan Cohen, Esq. that would provide relief to local housing authorities from some of the provisions of MGL Chapter 149 (the so-called “filed sub-bid law”) as they relate to public bidding and procurement. The Public Housing Committee last met on June 30, 2010 (and is meeting today, September 30, 2010, as this Report is going to press) and covered a number of critical issues. Their meeting summary of the June 30 meeting follows. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 18 Operating Subsidy Since public housing operating subsidy was level funded, the Committee recommended that the CHTF issue a statement supporting a long-term commitment to operating subsidy, while reminding the Governor that this level is inadequate. In particular, it was noted that the funding for emergency shelters was increased at the same time as there are vacant public housing units available that could be used for that purpose. The general belief is that either MRVP certificates or public housing placements are less expensive per client than supporting them in emergency shelters. Capital Funding Notwithstanding the current state financial problems, the Committee felt that CHTF should also reiterate its support for multi-year formula funding for capital improvements in State public housing. The suggestion was made that we recommend a pilot program whereby a flat rent structure (perhaps tiered) be allowed for vacant units for a period of time after they are occupied. The purpose is to provide a reliable income stream to support the renovation of these units so that they can be occupied again. While this approach is controversial, the Committee agreed that it should be discussed further. As a start, the Committee will be requesting information from DHCD as to how many vacant units require rehabilitation before they can be occupied. Federalization and Transforming Rental Assistance Between 3600 and 3800 state housing units have been converted to Federal public housing in Massachusetts under the ARRA (Federal stimulus) program. The Federal Transforming Rental Assistance (TRA) proposal faces significant Congressional opposition, but the Committee believes that the concept seems to make sense: to substitute project-based Section 8 vouchers for capital grants and Annual Contributions Contracts in Federal public housing. HUD believes that this would impose market discipline on the management of these projects while providing them with a means to tap private capital for renovation purposes. There was a strong sentiment in the Committee to encourage the CHTF to express support of TRA and advocate with the Commonwealth’s Senators and Congressmen. This led to a discussion of the feasibility of applying this concept to State public housing. Specifically, the feeling was that an expansion of project-based MRVP certificates for public housing properties could be used as a way to tap private capital sources. In both the case of Federal and any State program, provisions must allow tenants to be able to eventually acquire mobile vouchers so they can move if they so choose. Committee members also feel that some tie-in to social services (particularly for placement of previously homeless tenants) needs to be pursued. Finally, as part of this discussion it was also proposed that the Committee advocate for a State version of the rule changes related to the Moving to Work program. The Public Housing Committee will be preparing short briefing statements on all the issues where they believe that CHTF advocacy would be helpful. As in the past, we Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 19 will circulate these statements for comments before issuing any CHTF positions on these issues. Public Bidding Laws Returning to the issue of Ch. 149, there was a discussion of the Construction Manager (CM) at Risk alternative for public housing construction and rehabilitation.. It has many advantages but also several problems. It is limited to projects exceeding $5,000,000 and would not benefit smaller projects. In addition, CMs are still required to take the lowest “qualified” bidder through a public bidding process, although they can maintain more input into the process through “pre-qualifying.” Finally, the rigidity imposed by the sub-contract category descriptions leads to inefficiencies on site. It was agreed that the group would try to constitute a sub-committee to look into these and other issues related to Ch. 149 in the fall. CHTF members interested in signing up for this committee can reach Charles Eisenberg at 617-901-3378 or email@example.com , and Jim Stockard at (617) 495-5988 or firstname.lastname@example.org . Many thanks to MHP for providing the meeting space for this committee. Work with the Urban Land Institute on Public/Private Partnership Initiatives Eleanor White and Ted Carman have represented CHTF in a series of meetings and communications with the local chapter of the Urban Land Institute, particularly with the Public/Private Partnership Committee, chaired by Claude Lancome of Coast and Harbor Associates. The Committee is working on ways to participate with the Executive Office of Housing and Economic Development to promote residential and commercial development. The Committee’s interaction with EOHED has now focused on two activities. The first is working with them on improving and marketing the Permitting Collaborative. This is an informal group created by EOHED to streamline permitting of projects by getting all the state agencies with permitting jurisdiction in the same room to discuss a project. The second is working with the City of Gardner, potentially working with the City and the local hospital to help them to move a project forward that wasn’t progressing, or to assist with an effort to develop a Brownfields site. On October 1, 2010, the Committee will be sponsoring a program related to the proposed repeal of Chapter 40B. The program will address why affordable housing, and therefore the affordable housing law, is important to employers. The panelists will include Richard Holbrook, CEO of Eastern Bank, and Mark Thompson, CEO of Boston Private Bank. Aaron Gornstein, Executive Director of CHAPA, will be the initial speaker and will discuss the facts associated with the Chapter 40B. Charles Hewlett of RCLCO (Robert Charles Lesser and Company in Washington, DC) will then discuss the report his firm prepared showing how housing and transportation costs are Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 20 related in the Boston area. The program will be moderated by Claude Lancome, Chair of the Committee and Executive Vice President of Coast and Harbor Associates. CHTF members who may wish to attend meetings of this committee and contribute to its efforts should get in touch with the Committee Chair, Claude Lancome, at email@example.com . Litigation Involving Chapter 40R As reported previously, CHTF, through its Legislative/Legal Committee headed by Larry DiCara, is monitoring a lawsuit brought against the Town of Natick that asserts that the bond that is required to be posted in order to challenge a "smart growth" (Chapter 40R) project approved by the town's planning board is unconstitutional. The plaintiff, The Mills at Natick, has brought several lawsuits against the Town of Natick and others relating to the planning board's approval of permits for the construction of townhouses and apartments in the town's Chapter 40R Smart Growth Overlay District. Plaintiff has not yet posted the bond that is required by state law in order to challenge such projects, and has instead sought a declaration that the bond is an unconstitutional bar on access to the courts. The parties unsuccessfully attempted to reach agreement outside of court regarding all six lawsuits in the summer of 2009. CHTF believes that the bond requirement is constitutional and is an important part of the Chapter 40R statute. . The Town of Natick and the developer for the project were pleased at CHTF’s offer to provide legal support through our Legislative/Legal Committee. Kurt Mullen of the law firm of Nixon Peabody and Larry DiCara, Co-Chair of CHTF, Committee Chair, and also of Nixon Peabody, have provided pro bono assistance to the Town of Natick and the project developer on this matter. The requirement to post a bond is included in the Chapter 40R statute, and was intended by the Legislature to streamline the development process and discourage frivolous and NIMBY-driven lawsuits. Nixon Peabody believes that there is strong legal precedent to uphold the constitutionality of this requirement. In December 2009, the court hearing these lawsuits heard various motions brought by the parties, including a motion by the project developer to either require the plaintiff to post the bond required by Chapter 40R or to dismiss the lawsuit. The court took all motions under advisement and has not yet issued any rulings. In April, the court heard a motion by the developer concerning drainage rights associated with the project. Since then, progress on the lawsuits has been stayed, due in part to an administrative appeal concerning drainage rights and the developer’s filing in bankruptcy court of a petition to reorganize. We understand that the developer is working to address any drainage issues, the resolution of which has been delayed by the pending bankruptcy. We will be following this case closely. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 21 Members of the Task Force and others are also encouraged to forward ideas to firstname.lastname@example.org for other housing and development initiatives where the demonstrated effectiveness of CHTF may make a difference. We have been approached by various groups interested in transportation, energy, zoning and permitting issues, as well as the spectrum of affordability concerns, and will be reviewing the degree to which we can move into new areas. Participation in the foreclosure issue, the public housing committee, discussions about legislation expanding supportive housing and services, and our work with ULI are examples of response to such requests. Working with the State Administration Many members of CHTF have provided advice and guidance (both formally and informally) to the staff of Governor Deval Patrick, Secretary of Housing and Economic Development Greg Bialecki, and UnderSecretary Tina Brooks. We have been encouraged by Governor Patrick’s support of both 40R and 40S and the smart growth and affordable housing concepts underlying these initiatives, as well as his demonstrated support for increased funding for affordability, and his statements in support of retaining Chapter 40B. Clearly the state fiscal situation is still difficult, and we appreciate all efforts to prioritize affordable housing. As previously reported, Eleanor White represented the CHTF in a series of meetings of the Governor’s Zoning Reform Task Force. Chaired by Secretary Greg Bialecki, this group met for approximately 18 months to explore ways in which cities and towns can begin to connect planning and zoning in a more coherent way, with support from the Commonwealth, and focus more attention locally on facilitating the development of affordable housing. A summary of the comprehensive legislation filed in response to this Task Force’s work is included in this report as Appendix IX. As covered in detail elsewhere in this Report, we have also been working closely with staff of DHCD on initiatives relating to public housing, the American Recovery and Reinvestment Act, and fair housing. Finally, CHTF has been represented in a series of Stakeholders’ Meetings with the Secretary for Elder Affairs of the Commonwealth, Ann Hartstein. The group includes representation from more than 20 organizations and coalitions dealing with issues affecting older adults in the Commonwealth. While not directly tied to housing, Barry Bluestone has worked closely with Governor Patrick and with Secretary of Housing and Economic Development Greg Bialecki to develop the Massachusetts Growth Capital Corporation (MGCC), which was passed by the state legislature and signed into law by the Governor in July of 2010. The new law will provide growth capital to small and mid-sized firms in the Commonwealth, along with technical advice to assist companies in expanding their operations and employment. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 22 Barry Bluestone also helped establish the Governor’s Advanced Manufacturing Task Force, which is charged with providing the Governor and the legislature with recommendations for ways to help encourage the growth of manufacturing in the Commonwealth and assure it a well-trained workforce well into the future. Both of these economic development initiatives carry with them the promise of increased jobs—and a concomitant need for housing—in the future. Expansion of the Task Force and the Search for Resources We have been gratified again this Quarter with requests from many new people to participate in the Task Force, especially those interested in diversity initiatives and public housing. As we speak about Chapter 40R and about making communities more welcoming, we also are receiving requests from more elected and appointed local officials to get involved in the CHTF, and they are a most positive addition as well. As mentioned above, we are especially interested in increasing our representation of people of color on our email list, and in their active participation in committees and plenary meetings. The Boston Foundation, under the leadership of Paul Grogan and Mary Jo Meisner, continues to play the critical role of both convener and a major funder of the Commonwealth Housing Task Force. Finally, a committee of the Task Force, under the leadership of Paul Grogan and Mary Jo Meisner of the Boston Foundation; Jerry Rappaport, Jr., co-chair of CHTF; and Robert Beal, chair of the Strategic Planning Committee, continues the effort to raise the resources necessary to support the ongoing work as outlined above. Many thanks to the Boston Foundation, which continues to be our major financial supporter, to allow CHTF work to go forward without interruption. On June 24, 2010, the Boston Foundation Board voted support for CHTF for the next three years. We are particularly grateful for their ongoing confidence in CHTF and for their support during these difficult economic times. The staff is investigating other institutional sources of support, which are scarce, and financial contributions from the business community and individuals are always most appreciated. Also thank you to all of the CHTF participants for your continued enthusiasm and participation. Please send updates to your contact information to email@example.com . (In the event that you do not want to receive these Quarterly Reports and other information from CHTF, please ask us to remove you from the email list.) We welcome comments and suggestions. You can continue to reach Eleanor White at Housing Partners, Inc. (617-965-1065 before 4PM Boston time or firstname.lastname@example.org); Barry Bluestone at the Northeastern Dukakis Center for Urban and Regional Policy (617-373-8595 or email@example.com) ; and Ted Carman at Concord Square Development (617-482-1997 or firstname.lastname@example.org). Please note that email messages about CHTF will often be coming from Maura Fogarty at The Boston Foundation (email@example.com) so please include her email address in your list of allowed senders and do not delete her messages! Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 23 Respectfully submitted: Eleanor White, Barry Bluestone, Ted Carman October, 2010 (APPENDICES FOLLOW) Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 24 Appendix I to CHTF Quarterly Report 9-30-10 Update of Progress under Chapter 40R: Smart Growth Zoning and Housing Production Act The current housing market in Massachusetts appears to be strengthening, with home prices stabilizing or modestly increasing. Nonetheless, housing markets are just beginning to show more vigor, and it will be many months before the return of what we formerly considered normal. New home construction continues to be far below its past levels. In this environment, communities across Massachusetts continued to explore the adoption of Chapter 40R smart growth zoning districts during this period. As was the original intent of Chapter 40R, these districts and the expedited as-of-right permitting process they offer will make it possible to increase production rapidly once the economy and housing market strengthen, thus providing the opportunity for housing supply to keep up with demand when market conditions warrant. Other states—notably Connecticut and New Jersey—have also taken notice of the results that 40R has produced. Specific information is included in the body of this Report. As detailed in this Appendix, 51 cities and towns in the Commonwealth have either passed Chapter 40R districts, or are in some stage of consideration. Since 2006, in Massachusetts the towns of Belmont, Grafton, Lunenburg, Norwood, North Reading, Plymouth, Dartmouth, Lakeville, Natick, Amesbury, Kingston, Lynnfield, North Andover, Reading (two districts), Bridgewater, Easton, Westfield, Marblehead (two districts), Sharon, and the cities of Boston, Brockton, Chelsea, Chicopee, Easthampton, Haverhill, Holyoke, Lawrence, Lowell, Northampton, Fitchburg, and Pittsfield have all successfully had Chapter 40R applications approved by DHCD and have passed Chapter 40R districts. Among them, these 31 localities have provided zoning as-of-right for over 12,032 units of housing, at least 20 percent of which will be affordable to households earning less than 80% of the area median income. Within the 40R Districts, more than 1,300 building permits have already been issued. An additional 879 residential units have received Plan Approval from the permit granting authority, but have not yet applied for building permits due to other permitting (MEPA) and market conditions. Many more municipalities are actively exploring 40R. In addition to those having passed districts, 2 additional localities, Andoverand Weymouth, are actively seeking 40R Letters of Eligibility from DHCD. These communities represent the potential for more than 800 additional housing units. An additional 5 localities have applied for or received state Priority Development Fund planning grants to pursue 40R zoning, including: Amesbury (a second district), Dennis, Ludlow- Southampton (combined), and Norfolk. We are aware of interest in Chapter 40R in more than 15 other cities and towns, including: Attleboro, Bolton, Concord, Holden, Leicester, Medway, Nantucket, New Bedford, Newburyport, Norfolk, Northbridge, Somerville, Walpole, Waltham, and Weymouth/Rockland. Other cities and towns and local groups have expressed preliminary interest in the program. In addition, we believe that developers – both nonprofit and for-profit – will be exploring the use of Chapter 40R in partnership with localities once the economy begins to revive. 40R continues to Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 25 be regularly featured in conferences and seminars for real estate professionals. Over the past year, those have included sessions sponsored by the Urban Land Institute, the Ford Foundation, the Northeast Association of Realtors, the Massachusetts Association of Planning Directors, the UMass Citizen Planner Training Collaborative, the New England Chapter of the Congress for New Urbanism, the Commonwealth of Massachusetts, the LaWare Forum, Fitchburg State College, and the Real Estate Bar Association. It is also noteworthy that, with only three exceptions, every proposed 40R district that has been brought to a vote has received the required approval of 2/3 of the local governing body. This includes votes in smaller communities such as Lynnfield and Kingston in which 40R bylaws allowing significant growth were approved at Town Meetings with the largest attendance on record. We attribute this to the positive nature of the collaborative local process required to develop the 40R plan and most particularly the local municipality’s right to develop their own design standards. It appears that because so much input and cooperation is required locally to develop the district proposal, by the time the question is put to a vote, most stakeholders in the city or town have contributed ideas to the plan and are supportive of the concept. We also ask that you please let CHTF staff know where you have heard of particular interest in learning more about Chapters 40R and 40S (or where you believe that Chapter 40R would be especially beneficial to a city or town), and we will respond with outreach to those localities. Just send a message to firstname.lastname@example.org and we will follow up with the locality to offer support as may be needed. It will be helpful if you include the name of a contact person in the city or town with phone number and email address, but if you cannot provide that, just send the name of the city or town. The following table – prepared by Ted Carman – compares zoning adoption to date to the projections included in the original Commonwealth Housing Task Force Report in October 2003, Building on Our Heritage, adjusted forward to account for the time lapse between the adoption of 40R in June 2004 and 40S in November 2005: Year of Calendar Units Projected Total Units Zoned (Actual for 2006 Program Year to be Zoned in thru 2009 and Projected thereafter) 2003 Report 1 2006 0 2,883 2 2007 4,800 6,795 3 2008 9,700 9,693 4 2009 16,927 10,099 5 2010 21,767 10,099 plus an additional 1933 to date It is important to note that, because more than a dozen of the named cities and towns have not projected potential housing units and are therefore carried as “zero” in our database, the expected number of zoned units has the potential to increase, perhaps dramatically, in Year 6 and beyond. It is also true, however, that the weakened economy may have an impact on the degree to which communities will focus on this program in the year ahead, and their resources to do so will depend in part on the availability of state planning funds available through the Priority Development Fund grants. PDF technical assistance grant funds are almost exhausted and we will be advocating for additional funding for this purpose. In this time of fiscal stress, these funds often represent the only way many communities can find the resources to plan for smart growth. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 26 Please refer to the map below showing the distribution of these localities throughout the Commonwealth. We are particularly gratified that interest is being expressed by cities and towns of all sizes and types. As Smart Growth Zoning is increasingly highlighted at various planning, development and real estate conferences and seminars, and in trade publications, we expect this interest to grow. Our conversations with Regional Planning Agencies and others who regularly provide technical assistance to municipalities indicate that many more of them are now expressing interest in 40R. Unfortunately, we are also aware of a number of localities that, after careful consideration of 40R adoption, decided against pursuing a 40R District because of local leaders’ concern about the long-term stability of the funding source for 40R and 40S. This issue, which is under discussion in many cities and towns, must be satisfactorily resolved to enable smart growth zoning to realize its promise. We are working to assure that a stable funding source is available to support the program’s continued success in the future. Other states have also taken notice of the results that 40R has produced. Enabling Legislation for “Incentive Housing Zones” was approved in Connecticut in June 2007, with substantial input from CHTF Staff. The legislation was modeled on Massachusetts Chapter 40R. Called HOMEConnecticut, over 50 communities are moving forward with plans for Incentive Housing Zones and have applied for State Grants to plan the districts. The State of Connecticut appropriated $4,000,000 to fund initial planning and Incentive Payments. Several specific proposals are moving forward locally, although some momentum has been lost due to ongoing questions regarding the stability of the available Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 27 funding in light of the state’s fiscal situation. The program in Connecticut was described in detail in a previous Quarterly Report. On December 15, 2008 a “Smart Housing Incentives Act” bill was filed in the New Jersey legislature with bipartisan support. Commonwealth Housing Task Force staff also contributed substantively to this New Jersey initiative, further building on the success of 40R in Massachusetts. The bill does not include a provision for state funding for incentive payments, and in today’s economic climate, it is unlikely that the bill, even if passed, would result in significant rezoning efforts. However, it does represent a strong statement of support for the 40R policy objectives. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 28 Appendix II 9-30-10 Hub Rent Market Bucks Trend, Show Q2 Spike By Colleen M. Sullivan, Banker & Tradesman Staff Writer, July 12, 2010 New data from commercial real estate analysis firm Reis shows a spike in rents for the second quarter of the year, with Boston among the top metro areas nationwide seeing increases. Boston ranked fourth in the country in rent growth in the second quarter, with effective rents edging up 1.8 percent to an average rent of $1,625 per month. The upward tick is all the more striking, given the steady decrease in rents seen over the past few years. Yearly averages rents were still down slightly, with landlords asking about 0.2 percent less than last year and getting about 0.1 percent less. Nationwide, more than 44,000 units were absorbed, driving the first decrease in vacancy rates in two years, with vacancies dropping to 7.8 percent from 8 percent. Vacancy rates in the Boston metro area were considerably better, dropping 0.3 percent to 6.2 percent for the quarter. The numbers were strong enough for the Reis analysts to suggest that the market has reached its turning point. "The apartment sector may indeed have bottomed in the fourth quarter of 2009, and may be on the path to recovery," Victor Calanog, Reis research director, said in a statement. The bounty in Boston, however, doesn't seem to have extended to the rest of the state. Kevin Sears, broker/owner at Sears Real Estate in Springfield and president of the Massachusetts Association of Realtors, said the vacancy rate he's seeing is more consistent with the national average of 7.9 percent. "We're seeing our vacancies increase a little bit here, our delinquencies increase a little bit," he said. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 29 Appendix III 9-30-10 Banker & Tradesman Article Re: Building Permits in Massachusetts 8/2/10 Use ‘Em Or Lose ‘Em Permit Extension Act Hopes Drive June Building Permits Spike : Permits Up 150% Over May, 31% YTD Over 2009 By Colleen M. Sullivan, Banker & Tradesman Staff Writer , 08/02/10 Building permits issued in the Bay State were way up in June, surging to 1,351 from 526 in May, according to recently published figures from the U.S. Census Bureau. The numbers suggest an intriguing possibility: Developers may finally be getting off the sidelines. “I don’t know that it’s as much confidence as it is, [people are] tired of waiting. I see a lot of people that are just pulling the trigger,” said Walter Tomala, president of the Home Builders Association of Massachusetts. “A lot of people have gone through the permitting process, and if they don’t use ‘em, they’re going to lose them.” The figures were boosted by an increase in permitting for buildings of five or more units, which rose to 553 in June from 63 the previous month. The New Street Development, a recently permitted 224-unit development in East Boston, may have contributed substantially to that number. But it wasn’t only large apartment building which saw an increase in permits issued: Permits for two-unit dwellings increased to 26 from 16 last month, and permits for 3 and 4 unit dwellings increased to 89 from seven in May. Permits for single-family dwellings, which generally make up a substantial majority of all permits issued, were up 55 percent, to 683 in June from 440 in May. Compared to this time last year, total building permits were up 31.2 percent, with 4,264 issued through June 2010, compared to 3,249 through June 2009. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 30 An Outlier The numbers make Massachusetts an outlier. Nationwide, permits in June stood at a seasonally adjusted annual rate of 586,000, 2.1 percent above the revised May rate of 574,000, but 2.3 percent below the June 2009 figure of 600,000. Housing starts fell 5 percent in June, to 549,000, their lowest level since last October, from 578,000 in May. In Massachusetts, a push to extend permit expiration dates may help explain some of the increase in permitting. Last week, developers were hoping a proposal to extend deadlines for permits issued between 2008 and 2011 for three years would be attached to economic development plans lawmakers were tying to push through before the end of the legislative session on Saturday. The goal of the Permit Extension Act was to give developers who may have held back from breaking ground during the rough economic climate the ability to move forward with proposals, without going through the costly and time-consuming permitting process all over again. The fact the bill was being considered at all would make having a permit in hand even more valuable, and may have spurred some developers to move forward recently, said Rich Beal, vice-president of A.W. Perry Inc., a Boston real estate development firm. And, Beal added, with towns desperate for more revenue sources, the approval process for his firm has been much smoother sailing than usual. A potentially quicker process and more valuable permits may have been enough to push some developers off the fence, at least in the Bay State. “I think there are a lot of communities that have held their value well,” said Beal. “Builders are more optimistic about it, that if they put out some spec product that there’s going to be a market for it.” And that’s a welcome possibility. “Overall, the big picture, we’re still a considerable amount down,” said Tomala. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 31 Appendix IV 9-30-10 Boston Business Journal re: Chapter 40B, July 16, 2010 Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 32 Appendix V 9-30-10 Boston Globe September 15, 2010 Affordable-housing law called a big boon By Jenifer B. McKim, Globe Staff | September 15, 2010 The state’s contentious affordable-housing law, up for repeal by voters in the Nov. 2 state election, has generated more than $9.25 billion in construction and related spending over the past 10 years, according to a study scheduled to be released today by the University of Massachusetts Donahue Institute. The report, commissioned by a nonprofit group that supports the 1969 law known as Chapter 40B, also found that more than 21,000 housing units that are part of planned 40B developments would result in more than 54,300 jobs and another $10.42 billion in spending. Aaron Gornstein, executive director of the Citizens’ Housing and Planning Association, which commissioned the study, hopes its findings will help persuade voters to reject Question 2, one of three ballot initiatives this fall. “It demonstrates the significant economic impact that affordable housing has had in the Commonwealth,’’ Gornstein said. “It is one of the important reasons to make sure it does not get repealed.’’ The law allows builders to bypass certain zoning restrictions in municipalities where less than 10 percent of the housing stock is classified as affordable. To win the waivers, they must set aside 20 to 25 percent of the units in a development for residents who make less than the community’s median income and offer those homes at below-market rates. Opponents say the law allows developers to bully local officials into approving housing that violates building codes and inflates housing costs, because market-rate units are priced higher to subsidize so-called affordable homes. Jon Witten, a Duxbury lawyer and law professor, said the UMass study points out the obvious: that Chapter 40B is an economic engine that creates housing. But he added that many critics of the law are not opposed to development; they want an affordable-housing program that does not circumvent the best interests of communities. “When you erase all rules and regulations at the local level, the result will be housing’’ — but nothing more, said Witten, who teaches law and land-use planning at Boston College and Tufts University. “The majority of other states have found a far more efficient way of building affordable housing that doesn’t benefit only the developer.’’ Advocates of 40B say it has been key to providing much-needed affordable housing in a state where real estate has historically been more expensive than in most other regions. The UMass study is part of a growing campaign to fight the repeal, a movement that the law’s supporters say has the support of 1,000 people and organizations — including Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 33 political, environmental, and religious groups. This year, they have raised more than $524,000, of which about $185,000 has already been spent, including on private consultants, Web designers, and paid organizers. According to a State House News Service poll released last week, their efforts appear to be working. The survey of 400 voters found that 56 percent plan to vote against the repeal, with 36 percent in favor of it, and 10 percent undecided. Still, Gornstein said, “We are taking nothing for granted. There is nothing more important right now. It is the future of affordable housing.’’ The committee hoping to repeal the law has raised only $5,000, according to the most recent campaign reports. John Belskis, chairman of the Coalition to Repeal Chapter 40B, said opponents of the law are made up of residents in 284 communities. Supporters include developers, real estate brokers, and affordable-housing advocates who profit from special permitting allowed under 40B, Belskis said. “People are lining their pockets,’’ he said. “I call it the poor people’s industry.’’ Advocates of the law, however, say the study is one more reason to support a process that has created 80 percent of the affordable housing in smaller towns and cities over the past decade. Rachel Bratt, a professor of urban and environmental policy and planning at Tufts University who is studying affordable housing laws, said Massachusetts is seen as a model by many. “I’d argue what we have done here is pretty innovative, pretty bold, and very successful,’’ she said. The study found that 21,861 housing units, including 8,140 affordable homes, have been built since 2000, creating significant spending and nearly 48,000 jobs. Another 21,078 homes, including 6,119 classified as affordable, are in various stages of planning, the study said. The report’s authors said some of the housing might have been built without the law, but it’s likely the vast majority would never have broken ground. More than a third of rental housing built in the state over the past 10 years has been created through Chapter 40B, said Lindsay Koshgarian, a Donahue Institute research manager. Koshgarian also said the law does not inflate property costs because developers save money throughout a streamlined permitting process and affordable housing receives state and federal subsidies. “It is letting developers build affordable housing because they get to save money during the process,’’ she said. “Chapter 40B has been a major outlet for developers to be able to build housing in the state.’’ Jenifer B. McKim can be reached at email@example.com. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 34 Appendix VI 9-30-10 Testimony Presented by Ted Carman to Joint Committee on Housing In Support of Chapter 40B May 3, 2010 Statement to the Joint Committee on Housing Public Hearing to Consider the Petition to Repeal Chapter 40B May 3, 2010 The Commonwealth Housing Task Force urges the Committee to issue an unfavorable report on the Ballot Initiative Petition to repeal Chapter 40B. The Commonwealth Housing Task Force was organized in 2002 as a coalition of business leaders, housing advocates and other organizations committed to addressing the important housing needs of the Commonwealth. It has produced a number of studies resulting in significant housing legislation in the Smart Growth Housing area, including Chapter 40R and Chapter 40S. Working with the Dukakis Center for Urban and Regional Policy at Northeastern University, it has clearly identified the connection between high housing costs and reduced economic growth. Throughout the United States, the regions with the highest housing costs consistently show lower economic growth than other parts of the country. The cost of housing in Massachusetts ranks among the highest in the country. This high cost of housing will dampen economic recovery in the years ahead. In order to address this situation, the most important policy direction for the Commonwealth is to encourage the new construction and the rehabilitation of housing units in sufficient numbers so as to provide the housing needed by the workers that will be essential to a growing economy. Chapter 40B has a proven record of producing high quality housing of all types in communities across the Commonwealth. It is a crucial element in achieving the housing production needs in Massachusetts. The repeal of Chapter 40B will result in fewer housing units being built. Fewer housing units being built will increase the upward pressure on housing costs – just at the time when reasonably priced housing is needed to support new jobs and an expanding economy. Valued workers will migrate to other states, exacerbating population outflows. Companies will shift operations to other states where the cost of business is lower, or may choose to expand outside Massachusetts. For this reason, it is critical to retain Chapter 40B as a necessary tool for housing production for families that have a range of income levels. The Commonwealth Housing Task Force strongly urges the Committee to issue an unfavorable report on the Ballot Petition to repeal Chapter 40B. Respectfully submitted: The Co-Chairs of the Commonwealth Housing Task Force: Lawrence S. Di Cara, Eleanor White Partner President Nixon Peabody Housing Partners, Inc. Co-Chair Co-Chair Jerry Rappaport, Jr. Robert E. Smyth President Retired President & CEO New Boston Fund, Inc. Citizens Bank of Massachusetts Co-Chair Co-Chair Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 35 Appendix VII 9-30-10 Sam Newberg Article, www.citiwire.net Nimbyism on the Apartment Front: Danger Signals for Us All SAM NEWBERG --FOR RELEASE SUNDAY, AUGUST 1, 2010 CITIWIRE.NET “That site is going to sit vacant for a decade.” That was the comment made to me by a frustrated developer as we left a public hearing after the city council voted down his planned apartment project. Although this scene occurred in a suburb of the Twin Cities, it could have happened anywhere. Unfortunately, it’s replicated time and again across the country. This begs the larger question: if city after city continues to shoot down economically viable rental housing projects, where exactly we are going to accommodate the expected growth in this country in the coming decades? Furthermore, why are cash-strapped cities passing up economic development opportunities? I’m all for local decision-making, but the result of these decisions, multiplied across our metro areas, simply pushes more growth to the urban fringe — an ecologically and economically wasteful choice. The plan called for an attractive apartment building in a city that has seen little new rental housing in recent decades. The market study indicated that the project could “pencil out,” or be financially feasible. Furthermore, the site in question was located along a transit line and close to freeways and employment. Everything seemed to line up. The sticking point was leadership. Like so many other inner ring suburbs, this one has a stock of rental housing that averages 40 years old. They often suffer from functional obsolescence, plus increasing crime. Result: in the eyes of the suburb’s public and elected leaders, all rental housing has a bad reputation, and any new project is unacceptable — even with a willing developer, a good design, a market study that supports the project, and the absence of any request for public subsidy. The city council listened as the development team gave a presentation as to why it believed the project would succeed and bring a $20 million investment to the city, all at a time when revenue is badly needed. But the reaction? A steady stream of residents who, one-by-one, got up to oppose the project. Over a three-hour period, every single resident, save one, stood up to speak against the project. Sound familiar? All opposed were existing homeowners in the city and all were older than 50. One gentleman even reported that he not only owned a home in the city, but also several apartments. The fact that he kept his home in better shape than his rental properties was proof, he asserted, that rental housing is bad for the city! The lone person to spoke in favor of the project was about 30, a recent home buyer in the city. Reinvesting in this project would be good for the future finances and demographics Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 36 of the city, she said. One could tell she was having second thoughts about her home purchase as she explained how she’d formerly lived in a neighborhood where renters were embraced. But here, even as a homeowner, she was unable to meet new neighbors, the area seemingly unfriendly with shades drawn and nobody about. Something is out of balance. A recent Urban Land Institute publication, Housing in America, predicts the coming years’ demographic and economic trends will mean substantial demand for rental housing nationwide. But concurrently, millions of acres will become available for redevelopment on greyfields, often obsolete retail centers. More often than not, rental housing of some kind is an appropriate use for these sites. Developers and many city planning departments are there. But where’s the local leadership? Michael Carliner, visiting fellow at the Joint Center for Housing Studies at Harvard, is researching issues surrounding rental housing for a report scheduled for release later this year. He agrees that my story is not uncommon in suburbs (and sometimes core cities) across the country. “It is more common for suburbs to zone it out,” he says, referring to multifamily housing in general. “They don’t make it easy to develop it. These are very local decisions.” Local decisions, indeed, and I can sympathize with the city council’s perspective. Like those residents opposing the project, the council members were older, and remember building their home when the city was a growing suburb, everything was new and shiny, kids played in the parks, schools were full and crime was low. Now the kids have grown up and the homes need some renovations. The apartments built in the late ’60s for young baby boomers have become run down, and full of people the city founders don’t recognize. Crime festers. Even the old drive-thru on the drag is closed and falling down. (This is like a Bruce Springsteen song.) Multiply this scenario by the hundreds of American cities and suburbs that act against the welfare of their region and their city itself. One’s led to agonize: what is the future of our metro areas? I’m all for local decision-making and public process. But one has to fear for the future of our country when real estate development decisions are driven by an angry and vocal few. One thing is certain: if that lone 30-year-old woman in favor of the project wants to run for city council, I’ll contribute to her campaign. Sam Newberg is a Twin Cities-based writer and real estate consultant. His e-mail address is firstname.lastname@example.org. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 37 Appendix VIII 9-30-10 Banker & Tradesman Article re: Funding for Chapter 40R 3/8/10 Show Me the Money: Uncertain 40R Funding Has Towns Gun-Shy Tentative New Bill Seeks Stability, Permanence By Colleen M. Sullivan, Banker & Tradesman Staff Writer 03/08/10 Five years after its initial passage, the state’s Chapter 40R affordable housing statute has sparked interest in cities and towns statewide as a bulwark against its controversial cousin, Chapter 40B. But increasing worries about the stability of 40R’s funding mechanisms have discouraged many towns from adopting the measure. Now, supporters are attempting to reassure towns by passing a bill which would change the funding mechanism, diverting some state tax revenue produced by the new developments into the Smart Growth Fund, from which town incentive payments are drawn. But the bill’s prospects are uncertain – even as the potential repeal of Chapter 40B, the state’s other affordable housing statute, looms in November. A 40B repeal would leave 40R the only affordable housing statue left for developers seeking to build. Unlike 40B, which allows developers to override town zoning laws by including a certain percentage of affordable units in their development plans, 40R requires towns and cities to approve and participate in the development process. It also provides additional funding to towns to help cover infrastructure and planning costs. This funding was originally intended to come largely from the sale of surplus state land. But as sales dry up in a tough environment, and surplus land itself becomes scarce, proponents are advocating a new, more stable approach to funding the initiative. Cutting Down Sprawl The “smart growth” principles on which 40R is based are aimed at cutting down sprawl by encouraging new housing in areas where residents can walk to shops and/or offices. Requirements include having a specially designated, and zoned, smart growth district approved in a city or town that would allow for mixed commercial and residential development, proximity to mass transit and the construction of multi-family units. So far, 28 cities and towns throughout the state have had 40R developments approved, according to Bill Reyelt, Department of Housing and Community Development smart growth program coordinator. Another nine have received the go-ahead from DHCD and are waiting for local approval, while six more are at an earlier stage in the process. Towns which successfully adopt a 40R district are eligible for incentive funds from the state of up to $600,000, depending on the amount of units allowed. Once development is underway, additional incentive payments are available. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 38 So far, these incentives have been fully funded for all approved projects. But the Smart Growth Fund which pays for these incentives, the fund replenished through the sale of state lands, is dwindling – leaving many communities gun-shy about jumping into 40R. “We kept running into resistance from communities, who were saying, basically, ‘too often in the past we have seen the state tell us they would fund something and then we do what they tell us to do and they take the funds away,’” said Barry Bluestone, director of the Dukakis Center for Urban and Regional Policy at Northeastern University, and an architect of the law. “So [towns] want some type of mechanism which would assure [them] that if [they] develop a 40R, the funding would be there to pay the fees that the town has coming to it.” The new bill, currently before the Legislature’s Community Development Committee, would do just that. The bill creates a permanent funding source for the Smart Growth Housing Fund by redirecting state income tax revenue generated by 40R developments into the fund, until any anticipated incentive payments are fully covered. The bill is scheduled to be voted out of committee later this month, and has attracted the sponsorship of Rep. Kevin Honan, D-Boston, chair of the Joint Committee on Housing. But directly diverting state income taxes in such a way is highly unusual, and may prove unpopular at a time when state lawmakers are pinching every penny. Even in larger towns supportive of the increased zoning regulations the law brings, implementing 40R can sometimes be burdensome. Because the 40R process allows for more input in design plans, there are more opportunities for opponents to drag out the planning process. Natick created a 40R district in order to attract development to a former industrial site, according to Patrick Reffert, the town’s planner. But the site is currently embroiled in a legal battle between the developer and an abutter. “Here’s a project that you want to have happen, but the more it gets reviewed, the more it get susceptible to appeals,” Reffert told Banker & Tradesman. Had the project been a 40B project, Reffert would have been able to demand aid from the developer to help with the design plans. But under 40R, he said, “I had no help from anybody. It was more intensive than I had the ability to afford, time-wise.” According to a recent report by the Metropolitan Area Planning Council, almost 10,000 homes have been zoned in existing 40R districts – but only 1,200 have so far been built, a disparity partially intended by the law’s designers. “The goal was to ultimately help keep house prices from going through the roof again, by having a surplus of zoned land,” enticing future development to existing smart growth districts by cutting down on planning time, said Ted Carman, founder of Boston’s Concord Square Planning & Development and an architect of the 40R law. If more towns are to adopt 40R as the economy begins to recover, as advocates hope, a more permanent and reliable funding solution will need to be found. “Zoned land is not going to sit there unused,” said Eleanor White, president of Watertown affordable housing consultants Housing Partners Inc. “Any new program takes quite a while for people to figure out…I think it’s amazing that so many communities have figured out the value of this program.” Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 39 Appendix IX—9-30-10 Summary: Comprehensive Land Use Reform and Partnership Act Commonwealth of Massachusetts Joint Committee on Municipalities and Regional Government Comprehensive Land Use Reform and Partnership Act May 18, 2010 Overview of the bill: The bill proposes changes to three existing sections of Massachusetts General Law and creates one new chapter. Offers clarity and updating of Chapter 40A (The Zoning Act), Section 81D of Chapter 41(the master plan) and portions of Chapter 41 (The Subdivision Control Law). Creates a new statute in the Massachusetts General Laws, Chapter 40U, that offers additional powers, practices, and preferences to communities that “opt- in” to certain additional performance standards consistent with the state’s sustainable development principles Specific Provisions For All Communities. . Section 1. The Zoning Act (Chapter 40A) The bill reorganizes and consolidates Chapter 40A (the Zoning Act) going from 17 to 11 sections. Like topics are grouped for easier access. Presentation is in outline format with the use of reader-friendly headings. The bill leaves significant portions of the state’s zoning laws intact, while also providing substantive zoning updates to all communities. Among these changes are: o Construction and Purposes. The bill adds new language to clarify the construction and purposes of zoning in Massachusetts. The bill clearly reiterates the home rule powers of cities and towns -- while recognizing the legislature’s role in limiting the exercise of home rule authority in order to promote overriding state interests. The bill recognizes that legitimate property rights and constitutional principles should not be violated by local land use regulations. o Consistency. The bill requires that zoning ordinances and by-laws not be inconsistent with an adopted master plan under c. 41, § 81D. A seven year grace period is available to comply, and a city or town without a plan may instead adopt an existing regional plan. o Mansionization. Eliminates the prohibition on the regulation of maximum interior area of a single family dwelling o Exclusionary practices. A bar on exclusionary zoning practices has been added. o Vesting. The complete zoning freeze for subdivision plans has been modified to also include building and special permits, and standardized so all three approvals are treated similarly. Thus, a development project proposed in a building permit, special permit, or definitive subdivision plan duly applied for prior to the date of adoption of a zoning change will be governed by the zoning then in effect for a period of 2, 3, or 8 years, respectively. A minor subdivision will be treated as a definitive subdivision plan under this section, but with a 3 year zoning protection period. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 40 o Adoption of zoning bylaws. The two-thirds super majority vote remains the default to adopt or amend zoning ordinances or by-laws, but a lesser majority vote now may be prescribed in a zoning ordinance or by-law. Such a reduction in vote majority must itself be adopted by a two-thirds vote of the local legislative body, and the change shall not become effective until 6 months have elapsed after the vote. o Special Permits. The required vote majority necessary to approve a special permit now may be reduced by ordinance or by-law. The effective duration of a special permit is set at no shorter than three years (which matches the period of vested rights for a special permit described above). Finally, a process for the extension of a special permit is established. o Site Plan Review. A new sub-section places this common zoning approval within the Zoning Act for the first time, affirming that site plan review is a process for uses allowed by-right, distinct from discretionary uses subject to a special permit. A time limit of 95 days is set for the review, subject to mutually-agreed-upon extensions. Public hearings are optional. A site plan shall be approved if it meets the three stated criteria, although reasonable conditions and limitations may be imposed. An approved site plan shall have an effective duration of no shorter than two years. Consultant fees to assist the board in its review may be assessed of an applicant. A site plan, when required in conjunction with a discretionary review, such as special permit, shall be integrated into the processing of the application for the special permit and not made the subject of a separate proceeding. o Variances. The criteria for granting variances under the old statute were so narrowly drawn that a lawful variance was difficult to grant in Massachusetts. Consequently, some communities that adhered to the statute granted few if any variances, while others, ignoring the statute out of perceived necessity, granted many variances according to no set standards. This subsection seeks to find a middle ground by setting reasonable criteria for variances while still maintaining a community’s discretion to condition or deny a variance. The effective life of a variance is extended from one to two years before it lapses if not used, and the permissible extension increases from six months to one year. o Standard Procedures. Standard procedures for zoning applications, hearings, and decisions were organized and clarified from various sections of the old c. 40A. Unless otherwise indicated elsewhere in the Zoning Act these are the default procedures to be followed. o Inclusionary Zoning. The bill provides parameters for zoning measures that require the creation of affordable housing in development projects. It encompasses the wide array of such techniques used currently in the state. Subject to granting authority approval, off-site units, land dedication, or funds may also be provided in lieu of on-site dwelling units. Dedicated accounts may be set up for this purpose. Any dwelling units created under this statute must be price-restricted for no less than 30 years. Inclusionary zoning ordinances or by-laws may require all or a portion of the units created be eligible for inclusion on the community’s Subsidized Housing Inventory. o Development impact fee. The bill establishes that development impact fees are permissible if in accordance with this subsection, which is based upon a number of in-state and out-of-state models. Communities following the requirements of this subsection will have defensible impact fee ordnances or by-laws that are less prone to being overturned. Public capital facilities for which impact fees may be assessed are listed. Municipal expenses ineligible for the application of impact fees, such as maintenance or salaries, are also listed. Affordable housing subject to a restriction on sale price or rent is Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 41 exempt from being assessed an impact fee. The planning and study prerequisites to the adoption of an impact fee ordinance or bylaw are detailed, as is fiscal administration of an impact fee program. o Dispute Resolution. This new subsection sets out the procedure for a voluntary land use dispute resolution process utilizing a neutral facilitator to help resolve conflicts stemming from an application for a land use permit. o Mediation of land use appeals. A voluntary mediation process is allowed which stays an appeal for at least 180 days, and longer if extended. Section 2. Master Plans (amends Chapter 41 Section 81D) The bill proposes significant amendments to the section of law that requires municipalities to plan for their community’s future. Specifically, the revised Section: o Reiterates the existing requirement for communities to create a master plan, and states that plans should be updated or extended every ten years. o Reduces the number of required planning elements from nine to five as follows: goals and policies, housing, natural resources and energy, land use and zoning, and implementation. o Articulates six other, optional elements which may be added at the community’s discretion; certain of which are required in order to adopt a development impact fee ordinance or bylaw or to opt-in to the provisions of Chapter 40U (see below). o Requires a self assessment of consistency with an adopted regional plan. o Authorizes “partnership plans” described in new Section 40U. o Requires final adoption of a master plan and component by the local legislative body by a simple majority vote. o Requires a public hearing prior to vote on the master plan. o Encourages, but does not require certification by the regional planning agencies, unless the master plan includes a partnership plan, in which case certification is required. . Sections 3-18. Subdivision Control Law (amends Chapter 41) The bill makes selected amendments to the Subdivision Control Law: o Minor subdivisions. Allows, by local option, the replacement of approval not required (“ANR”) with a carefully crafted minor subdivision law. o Minor Lot Line Changes. Establishes a new, streamlined method for making minor lot line changes. o Parks and Playgrounds. Allows towns to require that parks and playgrounds not exceeding 5% of the subdivision’s area within the new neighborhood. o Consistency. Requires subdivision regulations not be inconsistent with master plans. o Roadway Width. Establishes a presumption that requirements for roadway widths of greater than 24 feet are excessive. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 42 o Appeals. Introduces standards for appellants of a decision by the planning board on subdivision approval. o Submittal of Plans. Establishes new submittal requirements for subdivision plans Provisions for Partnership Communities (Communities that “Opt In”). Section 19. Land Use Partnership Act (New Chapter 40U) The bill creates a new statute in the Massachusetts General Laws -- Chapter 40U, The Land Use Partnership Act -- that offers additional powers to “partnership communities” that, by local option, adopt a partnership plan and implementing regulations to satisfy additional performance standards consistent with the state’s sustainable development principles. o A process is established through which municipalities can become “partnership communities” by adopting partnership plans and implementing regulations that meet not only the basic requirements of Chapter 41 Section 81D but also additional performance standards. o The partnership plans and implementing regulations must receive certification of the regional planning agency, determining that they meet minimum standards and consistency. o For the first five years of the program, certification will be met if the municipality adopts a partnership plan and implementing regulations that satisfy the following. Subsequently, certification requirements may be set forth in regulations promulgated by an Interagency Planning Board. . Prompt and predictable permitting of commercial and industrial development within one or more economic development districts . Prompt and predictable permitting of residential development within one or more residential development districts that collectively can accommodate a number of new housing units equal to a housing target number equal to five percent of the total number of year round housing units in the community. . Prompt and predictable permitting of renewable or alternative energy generating facilities, renewable or alternative energy research and development facilities, or renewable and alternative energy manufacturing facilities within one or more zoning districts that are eligible locations. . A requirement for use of open space residential design for any development of 5 or more housing units in districts where the minimum lot area exceeds 40,000 square feet. . A requirement for low impact development techniques for any development that disturbs more than one acre of land o Once a city or town becomes a Partnership Community, that community shall enjoy, in addition to those powers enumerated to all cities and towns in Chapter 40A, the following additional powers: . Rate of development. The power to regulate the rate of development . Natural Resource Protection Zoning. The power to protect natural resources by limiting development densities in areas designated by the state or municipality as having important natural or cultural resource values. Commonwealth Housing Task Force Quarterly Report September 30, 2010 Page 43 . Vested Rights. The vesting period for a definitive subdivision plan would be reduced from eight years to four years. . Development Agreements. The power to enter into development agreements that function as a bona fide local land use regulation. . Development impact fees. Development impact fees authorized under Section 9F of Chapter 40A could be used to defray the costs of public elementary and secondary schools, libraries, municipal offices, affordable housing, and public safety facilities. . Priority for infrastructure funding. Partnership Communities would receive priority in the awarding of discretionary funds for local infrastructure improvements and other programs . Planning/technical assistance. It is intended that technical assistance grants be offered to municipalities to assist in the preparation of partnership plans and implementing regulations.
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