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Thursday, May 25, 2017

The Housing Watch…The Most Potentially Potent Footnote in Affordable Housing


By Robert M. Ruzzo
By all accounts, the so-called “GLAM Test” under Massachusetts General Laws Chapter 40B (“Chapter 40B,” the “Affordable Housing” Law, or the “Comprehensive Permit Law”), one of the
hottest topics in affordable housing over the past few years, is going to continue to attract attention in the coming months.  As affordable housing aficionados know, the “General Land Area Minimum” (hence, “GLAM”) test is one of three safe harbors provided for under the Affordable Housing Law.  Under Chapter 40B, this safe harbor exists when “low or moderate income housing exists… on sites comprising 1.5% or more of the total land area zoned for residential, commercial or industrial use.”
For years, this safe harbor was relatively unknown, particularly when compared to the widely recognized “10% test” under the statute.  Two years ago, even the Housing Appeals Committee (“HAC”) had to concede in Newton Zoning Board of Appeals v. Dinosaur Row LLC that:  “the General Land Area Minimum is a complex measure, which has not been addressed extensively during the 45 year history of the Comprehensive Permit Law.”  The third Chapter 40B safe harbor, the Annual Land Area Minimum, remains a veritable affordable housing “Sasquatch,” whose existence is alleged, but as yet remains unverified.
After an extensive internal review, the Department of Housing and Community Development (“DHCD”) published “Draft Guidelines for Calculating General Land Area Minimum” (the “GLAM Guidelines”) on its website on Friday, May 5, 2017.  The GLAM Guidelines are intended to provide straightforward assistance to municipalities.  In addition to the eight pages of guidance, which includes a new definition of “Group Home,” the GLAM Guidelines were accompanied by two appendices.  Appendix A consists of twelve pages of technical instructions, while Appendix B walks through an “Example Calculation,” complete with illustrations.  DHCD will be accepting written comments on the GLAM Guidelines (including the appendices) through July 5, 2017.
The publication of these eagerly anticipated GLAM Guidelines provides an appropriate opportunity to step back and reflect upon some of the larger issues surrounding the Affordable Housing law, and the statutory safe harbors in particular.
As noted recently in a cogent presentation by the Massachusetts Housing Partnership (“MHP”) at a meeting of the CHAPA Housing Production Committee, Chapter 40B has been the vehicle for the production of more than 70,000 housing units since 1969.  The future, however, is not as bright in MHP’s view, because the potential for “new 40B development is diminishing relative to projected housing need.”
Why?  According to MHP the “gap” (between projected housing need and the remaining Chapter 40B housing development potential) “is greatest in Metro Boston where 26 communities have permitted enough subsidizing housing” to cross the 10% safe harbor threshold.  According to MHP, the remaining development potential under Chapter 40B in the Metropolitan Area Planning Commission region is approximately 21,000 units.
Of course, under the 2007 Boothroyd v. Zoning Board of Appeals of Amherst decision, a municipality may nonetheless elect to grant a Comprehensive Permit even if it has satisfied the 10% test.  But that is a pretty thin reed to grasp in our current housing affordability wind tunnel.
To make your affordable housing day even brighter, a number of the ten communities identified by MHP as having the “most remaining Chapter 40B Development Potential” in the Metro Boston area are among the very communities that have recently asserted the GLAM safe harbor (Arlington, Newton, and Waltham).  For these municipalities and others similarly situated, however, an underappreciated danger lurks behind the assertion of the GLAM safe harbor based upon current Subsidized Housing Inventory (“SHI”) counting methodology. Such arguments may run headlong into the most potentially potent footnote in all of affordable housing.  
First, some full disclosure.  Your correspondent has previously suggested that the treatment of rental developments under the GLAM test may no longer make sense in era of smart growth and concentrated development.  Remember that under current SHI practice, rental housing and ownership units are treated very differently.  Assuming all other requirements to gain listing on the SHI have been met, all units in a rental housing development are counted on the SHI, while homeownership developments are counted only on a proportionate basis. The HAC politely questioned this approach as early as 2003, in footnote 6 of Arbor Hill Holdings Limited Partnership v. Weymouth Board of Appeals, stating “it would seem anomalous to count all of a very large [rental] lot containing only a very small number of affordable units.”  
But footnote 6 in Arbor Hill pales in comparison to the suggestion of the Supreme Judicial Court in footnote 12 of Zoning Board of Appeals of Sunderland v. Sugarbush Meadow, LLC, 464 Mass. 166, 178 (2013).  There, the SJC expressly left open the issue of how counting should be performed for SHI purposes, declaring:  “we need not address whether the inclusion of non-subsidized housing units in the SHI is permissible under the act…(emphasis added).”  Thus, the issue of SHI counting methodology under the 10% test remains an open question, as far as the SJC is concerned.
Certainly any counting methodology employed by DHCD over many years would be entitled to a great deal of deference.  Nonetheless, a judicial rebuke to such a long-standing regulatory practice would not be without recent precedent. As development lawyers learned back in 2007 in the Chapter 91 context, the SJC is not hesitant to let it be known that “the principle of according weight to an agency’s discretion” is “one of deference, not abdication” stating further that “this court will not hesitate to overrule agency interpretations of statutes or rules when those interpretations are arbitrary or unreasonable.”  Moot v. Department of Environmental Protection, 448 Mass. 340, 346 (2007).
By aggressively asserting the GLAM safe harbor, a municipality may raise the entire issue of SHI counting methodology before the state’s highest court for the first time.  So as we enter upon the “Summer of GLAM” remember, it may be time to re-examine the most important footnote in affordable housing as well.
“The Housing Watch” is a regular column from Bob Ruzzo,  senior counsel in the Boston office of Holland & Knight LLP.  He possesses a wealth of public, quasi-public and private sector experience in affordable housing, transportation, real estate, transit-oriented development, public private partnerships, land use planning and environmental impact analysis. Bob is also a former general counsel of both the Massachusetts Turnpike Authority and the Massachusetts Housing Finance Agency; he also served as chief real estate officer for the turnpike and as deputy director of MassHousing.”  Bob can be contacted by email at robert.ruzzo@hklaw.com.

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