Housing Appeals Committee Further Expands Chapter 40B Safe Harbors

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Housing Appeals Committee Further Expands Chapter 40B Safe Harbors: In the Matter of Bourne Zoning Board of Appeals and Chase Developers, Inc., HAC No. 2008-11

Chapter 40B of the Massachusetts General Laws allows developers to seek comprehensive permits from local zoning boards for housing projects that include affordable housing. To ease municipal concerns that Chapter 40B unfairly limits local control over development decisions, the Department of Housing and Community Development (“DHCD”) issued regulations in 2003 that create certain “safe harbors” which allow municipalities to deny or place conditions on comprehensive permits without the threat of appeal.

In 2008, the DHCD further expanded these safe harbors. Specifically, under the new regulations, a municipality may qualify for a “planned production” safe harbor if the DHCD approves its Housing Production Plan and the city or town then approves new affordable housing units equal to 0.5% of its existing housing stock. Once a municipality approves a project that it believes qualifies for the planned production safe harbor, it must then apply to the DHCD for certification of compliance with its Housing Production Plan. Under the expanded regulations, a municipality that qualifies for this safe harbor is free to deny any Chapter 40B applications for the next 12 months. However, until a recent decision by the Housing Appeals Committee (“HAC”) in a matter involving the Town of Bourne, the DHCD’s regulations were unclear as to when the one-year safe harbor protection began to run – upon the municipality’s approval of the new housing project, or upon the DHCD’s certification that the municipality had approved sufficient affordable housing entitling it to protection?

Under the 2008 DHCD regulations, local zoning boards intending to claim a safe harbor are required to do so within 15 days of opening a public hearing on a comprehensive permit application. This gives the prospective developer an opportunity to appeal to the DHCD early in the permitting process for a determination of whether a municipality qualifies for a safe harbor. Either the developer or the municipality may then file an expedited interlocutory appeal of the DHCD’s decision to the HAC. The Bourne case was the first such appeal decided by the HAC.

When Chase Developers applied for a comprehensive permit on June 3, 2008, the Town of Bourne claimed protection under the planned production safe harbor because it had recently approved (on April 28, 2008) another development project that would create affordable housing sufficient to meet the 0.5% threshold. However, by the time Chase filed its application, the Town had not yet applied to the DHCD for certification of compliance with its previously-approved Housing Production Plan. Chase quickly invoked the new procedure to request a ruling from the DHCD that the Town was not entitled to the safe harbor protection. The DHCD agreed with the developer, and the Town appealed to the HAC. The HAC overturned the DHCD’s decision and ruled in favor of the Town. Bourne’s approval of the previous project, stated the HAC, effectively triggered the one-year protection. Thus, the Town could rely on the safe harbor provision to delay Chase Developers’ proposed Chapter 40B project, despite the fact that the Town had not yet asked the DHCD to certify compliance with its Housing Production Plan.

In rendering its decision, the HAC explained that the 12-month safe harbor protection becomes effective on the date a municipality achieves its numerical target. The HAC expressed little concern for a developer who might not know about a potential, yet unclaimed, planned production safe harbor when applying for its permit. Instead, the HAC reasoned that the developer would learn of the Town’s reliance on a safe harbor provision before extensive proceedings were conducted. The HAC also rejected the developer’s argument that the approved units that allowed the Town to meet its 0.5% threshold would not be developed within the year, noting that whether the units might lose their eligibility in 12 months had no bearing on their eligibility during that one-year period. 

As a result of the HAC’s decision in the Town of Bourne matter, municipalities need not await DHCD certification in order to enjoy the protection of the planned production safe harbor. Meanwhile, developers seeking to learn whether a municipality is protected under a planned production safe harbor can no longer safely rely on the DHCD’s published list of towns certified as having sufficient units under an approved Housing Production Plan. Instead, as part of their due diligence, they must also inquire whether a municipality has recently granted a comprehensive permit to a developer of affordable housing, but has not yet sought certification from the DHCD.