The Massachusetts Supreme Judicial Court recently issued a decision that affirmed the Housing Appeals Committee’s (HAC) jurisdiction to “review conditions imposed on an affordable housing project considered ‘uneconomic’ even without those conditions.
The case involved a developer that proposed a 90-unit housing development in Milton, Mass that included 23 affordable units. Milton’s Zoning Board of Appeals granted a comprehensive permit, but added 60 conditions and reduced the size of the project by more than half. When the developer appealed the ZBA’s decision, the HAC struck the conditions finding that they made the project, already deemed uneconomic, “significantly more uneconomic.”
Pierce Atwood real estate and land use partner Donald R. Pinto, Jr. stated, “It’s not uncommon for a developer to propose a project for which the return on total cost (ROTC) falls below the Department of Housing and Community Development (DHCD) guidelines that define a ‘reasonable return.’ One of my recent clients is a nonprofit that builds 100% affordable projects, and their starting ROTC, before the local zoning board imposes conditions, is razor thin — often below 1%.”
Don added, “While HAC has applied the ‘significantly more uneconomic’ test to such projects for more than a decade, zoning boards continue to challenge it. The SJC [held] that HAC had ample authority to create this test to fill a critical gap in the statutory and regulatory regime, [and] this decision should streamline Chapter 40B litigation by taking one potentially contested issue off the table.”
The complete article by Eric Berkman appears in the July 29, 2022 edition of Massachusetts Lawyers Weekly.