By Benjamin Fierro III
Although Massachusetts has seen
an increase in housing production in the past several years, most of that
increase has consisted of multi-family housing. Single-family housing starts
continue to lag far behind what is needed to meet demand, especially for more
modestly priced new homes. In an effort to encourage the production of
affordable single-family homes, the state is launching a new program that
specifically promotes “starter homes.”
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| Benjamin Fierro III |
The Starter Home Program was included
in Governor Baker’s omnibus economic development bill that was enacted last
summer. Sections 37 through 54 of Chapter 219 of the Acts of 2016 amend G.L. c.
40R (the Smart Growth Zoning and Housing Production Act) to encourage
municipalities to adopt local zoning ordinances and bylaws that permit the
construction of smaller single-family homes (not exceeding 1,850 square feet of
heated living area) on smaller lots (not exceeding ¼ acre).
Chapter 40R and purpose of the Starter Home Program
The Legislature enacted Chapter
40R in 2004 to provide financial incentives for cities and towns to create
"smart growth zoning districts" for development of mixed-use and
higher density housing as a matter of right. While the law has had some
success, it has failed to spur single-family housing production.
The amendments to Chapter 40R
allow communities to take advantage of the law’s financial incentives to
facilitate the production of starter homes. It is targeted at suburban and
rural communities with large lot zoning that makes it uneconomic to produce
affordable single-family homes for young families.
State approval and local zoning
adoption
Before adopting a Starter Home
Zoning District, communities must apply to the Department of Housing and
Community Development (DHCD) for approval of the location of the proposed
district, the proposed zoning regulations and any design standards.
Like all zoning, Starter Home
Zoning Districts are adopted either through Town Meeting or City Council
approval. The ordinance or bylaw must include provisions to allow starter homes
to be developed either as-of-right or through a limited plan review process
akin to site plan review.
Financial Incentives
Upon DHCD review and local
adoption of a Starter Home Zoning District, communities become eligible for
payments from the Smart Growth Housing Trust Fund, as well as other financial
incentives. Three types of incentives are offered.
1. Production bonus payments: After DHCD approves the
district, the municipality receives a production bonus payment based on the
potential number of new housing units (the maximum number of units possible
under the 40R overlay zone minus the total number of units permissible under
the previous zoning) that can be constructed in the district. Payments range
from $10,000 for up to 20 units to as much as $600,000 for 501 or more units.
2. Bonus Payments: The community will also receive a bonus
payment of $3,000 for each new housing unit constructed in the district once a
building permit has been issued.
3. Funding Preference: DHCD, as well as the Executive Office
of Energy and Environmental Affairs, the Executive Office of Transportation and
the Executive Office of Administration and Finance, must give preference to
municipalities with an approved Starter Home Zoning District when awarding
discretionary grants.
Program requirements
A Starter Home Zoning District
must meet the following minimum requirements:
1. It must be located in an eligible location, i.e., an area
with the infrastructure, transportation access, existing underutilized
facilities, smart growth characteristics, and/or location that make it highly
suitable for a Smart Growth Zoning District or Starter Home Zoning District. A
“highly suitable location” may include without limitation areas near public
transit stations; areas of concentrated development, including town and city
centers, other existing commercial or rural village districts; or other areas
considered “highly suitable” for starter homes to be further defined in DHCD’s
amended regulations.
2. Housing density shall satisfy the following criteria:
(a) at least 4 units per acre of developable land area;
(b) smart growth principles of development must be emphasized,
such as cluster development and other forms that provide for common open space
usable for recreational activities, and/or the use of low-impact development
techniques; and
(c) at least 50% of the starter homes, excluding accessory
dwelling units, must contain 3 or more bedrooms.
3. At least 20% of the starter homes shall be affordable to
and occupied by individuals and families whose annual income is less than 100%
of the area median income, and shall be deed restricted for at least 30 years.
4. It shall be exempt from any moratorium or limitation on
the issuance of building permits for residential uses.
5. It shall be exempt from any municipal environmental or
health ordinances, bylaws or regulations that exceed applicable state
requirements, unless MassDEP has determined that specific local conditions
warrant imposition of more restrictive local standards, or the imposition of
such standards would not render infeasible the development contemplated under
the comprehensive housing plan, housing production plan or housing production
summary submitted as part of the application for such district.
6. It must comply with federal, state and local fair housing
laws.
7. A single district may not exceed 15% of the total land
area in the city or town. Upon request, DHCD may approve a larger land area if
such approval serves the goals and objectives of the law.
8. The combined land area of all approved districts may not
exceed 25% of the total land area in the city or town. DHCD may approve a
larger combined land area if such approval serves the goals and objectives of
the law.
A Starter Home Zoning District
ordinance or bylaw may include provisions to modify or eliminate the
dimensional standards contained in the underlying zoning in order to support
desired densities, mix of uses and physical character. Modified requirements
may be applied as of right throughout all or a portion of the district, or on a
project specific basis through the plan review process as provided in the
ordinance or bylaw.
A Starter Home Zoning District
ordinance or bylaw may also designate certain areas as dedicated perpetual open
space through the use of a conservation restriction, and the amount of such
open space will not be included as developable land within such district. For
developable land of under 50 acres, up to 10% may be designated as open space;
up to 20% is permitted for larger tracts of developable land.
Implementation
The Starter Home Program
provisions of Chapter 40R became effective January 1, 2017, but will not be
implemented until DHCD promulgates amendments to the current 40R regulations.
See 760 CMR 59.00. Those draft regulations are anticipated to be released in
the early spring for public comment.
Ben Fierro is a partner in the Boston law firm of Lynch & Fierro
LLP and served on the Department of Housing and Community Development’s Starter
Home Advisory Committee. He can be contacted by email at
bfierro@lynchfierro.com.
