Building Opportunities in the Bay State
The Commonwealth of Massachusetts is addressing the housing crisis in a unique way that may allow certain property owners close to public transit the opportunity to construct multi-family housing where it may not have been previously permitted. The Economic Development Bond Bill of 2021 creates a new Section 3A in the Commonwealth’s Zoning Act, General Laws ch. 40A. In fact, 175 communities served by the Massachusetts Bay Transportation Authority (“MBTA”) are required to create at least one “district of reasonable size” where multi-family housing is permitted as of right. Communities that fail to comply with Section 3A will be ineligible for contributions from certain funding incentives provided by the Commonwealth. The requirements of Section 3A may vary depending on the type of MBTA community. MBTA communities are categorized by the different kinds of transit they have access to, including rapid transit, commuter rail, adjacent community, and adjacent small town.
Section 3A requires that a district of reasonable size:
- Have a minimum gross density of 15 units per acre (subject to additional limitations);
- Be located not more than .5 miles from a commuter rail station, subway station, ferry terminal or bus station, if applicable; and
- Provide housing suitable for families with children without any age restrictions.
Section 3A provides that the Department of Housing and Community Development(“DHCD”), in consultation with the Massachusetts Bay Transportation Authority and the Massachusetts Department of Transportation, shall issue guidelines to determine compliance with the new law. Those guidelines were released on August 22, 2022, and further defined the compliance principles.
At Least One District of Reasonable Size
To comply with Section 3A’s “reasonable size” requirement, multi-family districts must comprise at least 50 acres of land, or approximately one-tenth of the land area with .5 miles of a transit station. The district may not consist of a collection of small, non-contiguous acres of land. In fact, land consisting of less than 5 acres will not be counted towards the minimum size requirement. A multi-family zoning district should be a neighborhood-scale district, not a single development site on which the municipality is willing to permit a particular multi-family project. The minimum land area for each MBTA community has been determined as follows:
- In rapid transit communities, commuter rail communities, and adjacent communities, the minimum land area is 50 acres, or 1.5% of the developable land in the MBTA community, whichever is less. In some instances, a smaller minimum land area applies.
- In adjacent small towns, there is no minimum land area so long as the applicable minimum multi-family unit capacity and the minimum gross density are achieved.
In all MBTA communities, at least half of the multi-family zoning district land area must comprise contiguous lots of land.
Minimum Multi-Family Unit Capacity
DHCD will consider a reasonable multi-family unit capacity to be a specified percentage of the total number of housing units within the community, based on the type of community as follows: rapid transit, 25%; commuter rail, 15%; adjacent community, 10%; neighboring small town, 5%.
“As of Right” Multi-Family Housing
Multi-family housing must be allowed in the district without needing a special permit, variance, zoning amendment, waiver, or other discretionary approval. Site plan review is limited to imposing reasonable terms and conditions on the proposed use relating to vehicular access and circulation on a site, architectural design of a building, and screening of adjacent properties. The review must not make the project infeasible or impractical to proceed with if it is otherwise in compliance with dimensional regulations.
Other requirements that would not be permitted because they are deemed to be inconsistent with by-right use are:
- A requirement that multi-family housing meet higher energy efficiency standards than other uses.
- A requirement that a multi-family use achieves a third-party certification that is not required for other uses in the district.
- A requirement that multi-family use must be combined with commercial or other uses on the same lot or as part of a single project.
Mixed-use projects may be allowed by right in a multi-family zoning district if the multi-family housing is separately allowed as of right.
Section 3A does not expressly require or authorize that an MBTA community require affordable units in a multi-family housing project that is allowed as of right. However, the Department of Housing and Community Development will balance the public policy goal of increasing affordable housing production with the economic feasibility of constructing multi-family housing. Generally, affordable units will be allowed when:
- The units are eligible to be listed on the DHCD’s subsidized housing inventory.
- No more than 10 percent of the units in a project are required to be affordable.
- The family income cap is less than 80 percent of the area median income.
These rules are somewhat relaxed if the affordability requirement predates Section 3A or the district is reviewed by DHCD as a smart growth district or other zoning incentive program.
Suitability for Families With Children
The DHCD will deem a multi-family zoning district to comply with this requirement so long as the zoning district does not provide age restrictions, limit the size of the units, cap the number of bedrooms, the size of bedrooms, the number of occupants, or impose a minimum age of occupants.
Important Deadlines for MBTA Communities
Compliance is achieved when an MBTA community adopts a multi-family zoning district that meets all of the guidelines’ requirements and is certified by the Department of Housing and Community Development. Interim compliance is authorized by DHCD upon submission of an Action Plan deemed reasonable and will lead to district compliance in a timely manner.
The deadline to submit an Action Plan is 1/31/2023 for any community type. The deadline to submit a Compliance Application varies by community category: rapid transit, 12/31/2023; commuter rail, 12/31/2024; adjacent community, 12/31/2024; and adjacent small town, 12/31/2025.
Get in Early!
With the short timeframe for Massachusetts communities to develop their ordinances and by-laws to comply with Section 3A, it is important to consider properties that may benefit communities relative to the construction of multi-family housing and potential mixed-use development.
This alert should not be construed as legal advice or a legal opinion on any specific facts or circumstances. This alert is not intended to create, and receipt of it does not constitute a lawyer-client relationship. The contents are intended for general informational purposes only, and you are urged to consult your attorney concerning any particular situation and any specific legal question you may have. We are working diligently to remain well informed and up to date on information and advisements as they become available. As such, please contact us if you need help addressing any of the issues discussed in this alert or any other issues or concerns you may have relating to your business. We are ready to help guide you through these challenging times.
Unless expressly provided, this alert does not constitute written tax advice as described in 31 C.F.R. §10, et seq. and is not intended or written by us to be used and relied on as written tax advice for any purpose including, without limitation, the marketing of any transaction addressed herein. Any U.S. federal tax advice rendered by DarrowEverett LLP shall be conspicuously labeled as such, shall include a discussion of all relevant facts and circumstances, as well as of any representations, statements, findings, or agreements (including projections, financial forecasts, or appraisals) upon which we rely, applicable to transactions discussed therein in compliance with 31 C.F.R. §10.37, shall relate the applicable law and authorities to the facts, and shall set forth any applicable limits on the use of such advice.