CPTC: The Next Chapter of 40B - 12/1/2020

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Training session conducted by the Montachusett Regional Planning Commission, in conjunction for the Citizen Planner Training Collaborative. Judi Barrett presents.

Mass DHCD updated their comprehensive permit regulations in 2008, which led MHP to update their 40B handbook. The new handbook was intended to address new regulations, and new case law.

40B projects can be some of the most challenging and the most rewarding to work on. In many towns, the Zoning Board of Appeals has no access to special counsel, are unfamiliar with site plan review, and have limited access to town staff and other boards.

Eligibility determination is the first step of the 40B process. It involves pre-qualification from a subsidizing agency. The subsidizing agency also does final approval once a comprehensive permit has been granted. Other elements of the process involve construction, occupancy, and post-occupancy oversight.

The main point of 40B is that every community should provide a share of a region's need for affordable housing. 40B was enacted in 1969, 1.5 years after the federal Fair Housing Act was passed. This was done to ensure there were fair housing options outside of urban areas.

The Massachusetts State Constitution was amended to allow home rule authority in 1966. Zoning is a local matter, but it cannot frustrate the state objective of having fair housing throughout the Commonwealth. Income limits are established by HUD, on a regional basis.

All local regulations are in scope of a comprehensive permit: zoning, subdivision control, local wetlands, historic districts, scenic roads, and so on. Developers must request waivers they feel they need, and these waivers must be granted before construction can begin.

Some things are not within the scope of a ZBA's comprehensive permit review: the impact on schools, fiscal impacts to the city or town, selection of tenants or home buyers, profit monitoring, or a marketing study. This is similar to a planning board's inability to turn down a subdivision application out of school capacity concerns.

Question: can the ZBA consider an applicant's track record? No. But the ZBA can address areas of concern by imposing conditions on the comprehensive permit.

Appeals of ZBA decisions are heard by the Housing Appeals Committee (HAC). They can uphold a decision, reject a decision, or send it back to the ZBA. Developers can appeal ZBA decisions to the HAC if the community has not met 40B's safe harbor thresholds.

When making decisions, the ZBA should consider whether it involves "local concerns" as defined by the statute and regulations. Health, safety, open space, and design impacts are all examples of local concerns. 40B tried to balance local concerns with the regional need for housing.

The subsidized housing inventory (SHI) is the set of units that count towards safe harbor requirement of 10% of year-round housing inventory. Units created through 40B or 40R will count here.

In a 40B project includes rental units restricted to 80% AMI or lower, then all units in the project count on the SHI. If a 40B creates owner occupied income-restricted units, then only the income-restricted ones count on the SHI.

There are other ways of adding to the subsidized housing inventory. These are generally called "Local Action Units". Examples include inclusionary zoning and CPA-funded affordable housing. We'll talk more about these later.

Things that will help a ZBA in the comprehensive permit process: a strong chair, support from town staff, MHP technical assistance, town counsel, and having good relationships with other boards, like the conservation commission, health board, planning board, and the design review board. Comprehensive permit training, peer review consultants, and neighborhood/developer meetings are also helpful.

Questions: what about concerns over rental vs owner-occupied units? Such concerns should be brought to the subsidizing agency. During this process, a community should stress what its local needs are and how its trying to meet them.

If zoning doesn't work for your housing needs, then those needs are unlikely to be met. Comprehensive permits are intended to address regional needs, not local ones.

Question: what about climate change? Developers must comply with state environmental laws.

During pre-qualification, a developer files an application with a subsidizing agency. MHP, Mass Housing, DHCD, and Mass Development are commonly used as subsidizing agencies. The pre-qualification application has to show a site plan, the proposed building, the number of units by type and size, a preliminary pro-forma, the type of applicant (e.g., non-profit), preliminary site development calculations, site coverage, and the subsidizing agency being used. The application will also contain a waiver list, and evidence of site control.

The subsidizing agency notifies local officials when they issue a letter of project eligibility. Local officials have 30 days to submit comments.

The subsidizing agency's findings include decisions about whether the project is generally eligible, whether the site is appropriate, and whether the building is appropriate for the site. It's a threshold determination with respect to whether the applicant can move forward. Subsidizing agencies often do appraisals, to verify what the site is worth.

A dedicated set of comprehensive permit regulations will help the ZBA in the hearing process. ZBAs should not assume that a regular special permit or variance application will be sufficient; there should be specific submittal requirements for comprehensive permits.

40B specifies three safe harbor thresholds. A community that meets any one of these can decline a 40B project without the applicant appealing to the HAC. The three thresholds are

  • having 10% of year-round housing on the SHI
  • having 1.5% of residential, commercial, and industrial-zoned land used for low-moderate income housing.
  • permitting 0.3% of developable residential, commercial, and industrial zoned land to low-middle income housing in a calendar year. The 0.3% refers to land disturbed by construction, and not the entire area taken up by the site.

Municipalities are allowed to do 40B projects after satisfying safe harbor thresholds.

There was a lot of housing built in the 1990s, and several communities found this pushed them out of safe harbor status. This led to a a new set of regulations that communities could use to retain safe-harbor: compliance with a DHCD-approved housing production plan, recent progress towards meeting safe-harbor thresholds (2% of new housing), and a large scale project cap.

40B deadlines are critical. Application materials must be distributed within seven days of receiving a project eligibility letter. The comprehensive permit hearing must be opened within 30 days; failure to do so will allow a developer to apply for constructive approval.

Assertions of safe harbor must be made within 15 days of opening the hearing; disputes over safe harbor are heard by the DHCD.

Comprehensive permit hearings must be closed within 180 days of being opened. This puts the burden of managing the process on the ZBA. Once the hearing is closed, the board has 40 days to file a decision, and the applicant has 20 days to appeal.

A comprehensive permit application should include: a preliminary site plan, preliminary architectural drawings, a report of existing site conditions, a building tabulation, any preliminary subdivision plans, a preliminary utility plan, the project eligibility letter, and a list of requested waivers.

When developing comprehensive permit regulations, a ZBA should think about the set of materials they'll need in order to make a decision.

During the comprehensive permit process, the ZBA administers local wetlands regulations, rather than the conservation commission. Members of the ZBA may not be familiar with these regulations, and they'd benefit from getting the conservation commission involved.

The ZBA should also get input from the police department, fire department, and public works.

As with other public hearings, the chair runs the meeting, and it helps when the chair explains the process and how it works. Judi suggests developing a set of public hearing protocols, and posting these at meetings.

40B permits allow less discretion than ordinary special permits. The chair should impose time limits, explain the applicable laws, and develop a schedule for the hearing.

Question: How can a board accept public comments during the COVID pandemic? Remote participation is a good option, particularly when boards have adapted to the technology. Applications like Zoom have a "raise hand" feature which works well for this purpose.

Question: What should a ZBA do if the application materials are wrong, or don't match conditions on the site? Always open the hearing in the time period required by law. A completeness review allows a board to address shortcomings in the application. Having a dedicated 40B submittal list should reduce the number of incomplete applications that a board receives. Boards should ask the applicant to provide missing materials or correct mistakes; it's very rare for a subsidizing agency to re-open an eligibility hearing. Also, don't put a lot of stock in preliminary pro-formas.

Question: what if the applicant tries to run out the clock? Ms. Barrett says that applicants will generally respond, eventually. When an applicant fails to address deficiencies, the board can compensate with permit conditions.

40B units become SHI-eligible when the ZBAs decision is filed with the town clerk. However, they'll come off the SHI if a building permit isn't issued within one year.

Regardless of whatever problems there are with the application, the ZBA should always open the hearing with 30 days of receiving the application.

Question: What about changes after the permit is approved? During construction, a developer may find that something they'd agreed to do is not feasible (e.g., due to soil conditions). In that case, a board should be prepared to negotiate. When the applicant returns, the board can only concern itself with the changes, and not the project as a whole.

The ZBA can request technical assistance and peer review, and this is paid for by the developer. The procurement process should be outlined in the board's rules and regulations. The board can request assistance in reviewing the application, but it cannot require the developer to perform new, unrelated studies.

Assistance from other boards matters, especially if peer review is involved. Working sessions -- where boards get into technical nitty-gritty -- are often helpful. Public education is also helpful.

It's helpful to get input from local housing trusts, if a community has them. Speaking to the housing production plan can also be useful.

Although working sessions are technical discussions, they're often held in a public forum. Some town counsels approve of these, and some do not. A ZBA should check with town counsel before scheduling any working sessions.

Applicants are responsible for identifying specific laws and making waiver requests. They should provide specific reasons for why a waiver is being sought. There is no need for a board to accept blanket waiver requests. There should be a process for considering post-permit waivers (e.g., for issues that only become apparent when construction drawings are being done).

Design is a valid local concern; density is not. The ZBA's goal should be to get the best project possible, not the smallest.

Try to identify issues with site access and circulation early in the process.

There is no such thing as an automatic pro-forma review. The board must review an application on qualitative terms. The pro-forma only comes into play when an applicant claims that conditions will make a project uneconomic. A ZBA can hire a consultant to peer review a pro-forma, but they should be prepared for the possibility of the consultant saying the applicant is right.

A town can request up to 70% of units for local preference occupants. Local preference means people who live or work in town, or families whose children attend public schools in town.

When making a decision, a ZBA can deny, approve as-is, or approve with conditions. If the ZBA denies an application, the developer can appeal to the housing appeals committee. The ZBA's decision should be structured something like the following:

  • Procedural history
  • Governing Law
  • Findings of fact
  • Decision
  • Conditions
  • Exhibits (e.g., the list of waivers granted)

There should be an ongoing monitoring agreement, for when the subsidizing agency's role is over.

There is a set of approvals after the permit has been issued, and these are handled by the subsidizing agency. The applicant must provide an affirmative fair housing marketing plan, plans for outreach and tenant selection, and post-occupancy monitoring.

A municipality can ask an applicant for money, to ensure that the building department has sufficient resources during construction.

Other plans that may matter in the process: Master Plan, Capital Improvement Plan, Municipal Facilities Plan, School Space Needs Plan, Library needs plan, and Open Space and Recreational plans.

Local action units (LAUs) create SHI units outside of comprehensive permits, and are part of a local initiative project. DHCD will often be the subsidizing agency. LAUs can come from density bonuses for affordable housing, or some other program that creates affordable housing where it would not have been created otherwise.

Communities have to be proactive in such programs, and they needs to be feasible, flexible, and fair. To be added to the SHI, LAUs must meet AMI limits, have an affirmative fair housing marking plan, a deed restriction on affordability, and a monitoring agreement. When considering these, DHCD will need evidence of a local action, a copy of the special permit decision, and evidence of affordability restrictions. Approvals are signed by DHCD, the municipality, and the developer.

Question: is it necessary to waive local regulations? This is the ZBA's decision. The ZBA should consider whether the local regulation outweighs the regional need for affordable housing. The ZBA should be fair and realistic. Waiver requests should be peer reviewed.

Question: What about the marketing plan? The marketing plan is reviewed by the subsidizing agency. It's not within the ZBA's jurisdiction.

Question: Can MGL Ch 43D expedited permits count towards the SHI? They can, if they enable the creation of affordable housing.