January 2021
Legislature Finally Enacts Housing Choices Bill!
In the early morning hours of January 5, the Massachusetts Legislature passed an omnibus economic development bill (H. 5250) that includes the Home Builders and Remodelers Association of Massachusetts' (HBRAMA) highest legislative priority – Gov. Baker’s Housing Choices Bill. The measure makes several important changes to the state’s Zoning Law (G.L. c. 40A), as well as to the Smart Growth Zoning and Housing Production Act (G.L. c. 40R) and the Smart Growth Zoning School Reimbursement Act (G.L. c. 40S). Its passage is a historic victory for the HBRAMA, which has formally supported Housing Choice, and whose local chapters and individual members have hosted events and testified before the Legislature in support of its passage.

The most notable feature of the law is the amendment to the Zoning Act that lowers the voting threshold from 2/3rds to a mere majority for the adoption of municipal zoning ordinances and bylaws that facilitate housing production. The following zoning ordinances and bylaws now only require a majority vote of a city council or town meeting:

  1. An amendment to a zoning ordinance or by-law to allow any of the following as of right: (a) multifamily housing or mixed-use development in an eligible location; (b) accessory dwelling units, whether within the principal dwelling or a detached structure on the same lot; or (c) open-space residential development;
  2. An amendment to a zoning ordinance or by-law to allow by special permit: (a) multi-family housing or mixed-use development in an eligible location; (b) an increase in the permissible density of population or intensity of a particular use in a proposed multi-family or mixed use development pursuant to section 9; (c) accessory dwelling units in a detached structure on the same lot; or (d) a diminution in the amount of parking required for residential or mixed-use development pursuant to section 9;
  3. Zoning ordinances or by-laws or amendments thereto that: (a) provide for TDR zoning or natural resource protection zoning in instances where the adoption of such zoning promotes concentration of development in areas that the municipality deems most appropriate for such development, but will not result in a diminution in the maximum number of housing units that could be developed within the municipality; or (b) modify regulations concerning the bulk and height of structures, yard sizes, lot area, setbacks, open space, parking and building coverage requirements to allow for additional housing units beyond what would otherwise be permitted under the existing zoning ordinance or by-law; and
  4. The adoption of a smart growth zoning district or starter home zoning district in accordance with section 3 of chapter 40R.
 
The bill also lowers the threshold for the approval of special permits from 2/3rds to a mere majority for the following:

  1. Multifamily housing that is located within 1/2 mile of a commuter rail station, subway station, ferry terminal or bus station; provided, that not less than 10 percent of the housing shall be affordable to and occupied by households whose annual income is less than 80 percent of the area wide median income as determined by the US Department of Housing and Urban Development and affordability is assured for a period of not less than 30 years through the use of an affordable housing restriction;
  2. Mixed-use development in centers of commercial activity within a municipality, including town and city centers, other commercial districts in cities and towns and rural village districts; provided, that not less than 10 percent of the housing shall be affordable to and occupied by households whose annual income is less than 80 percent of the area wide median income as determined by the US Department of Housing and Urban Development and affordability is assured for a period of not less than 30 years through the use of an affordable housing restriction; or
  3. A reduced parking space to residential unit ratio requirement, pursuant to this section; provided, that a reduction in the parking requirement will result in the production of additional housing units.

The bill also allows a judge of the Land Court or Superior Court to require a plaintiff in an action appealing a decision to approve a special permit, variance or site plan to post a surety or cash bond in an amount of not more than $50,000 to secure the payment of costs if the court finds that the harm to the defendant or to the public interest resulting from delays caused by the appeal outweighs the financial burden of the surety or cash bond on the plaintiffs.

Gov. Baker initially introduced the Housing Choices Bill in January 2018 with the goal of producing 135,000 new units of housing by 2025. It’s passage by the Legislature this week was the culmination of a sustained effort by Gov. Baker, Lt. Gov. Polito, Secretary of Housing and Economic Development Michael Kennealy and the lobbying efforts of the HBRAMA and other real estate organizations over the course of the past three years. It is the most important housing enactment since the passage of Chapter 40B in 1969.
Climate Change Bill Includes Net Zero Energy Stretch Code
Among the last minute enactments by the Legislature was the passage of an ambitious and far-reaching bill to reduce greenhouse gas emissions. Of concern to the HBRAMA is the inclusion of several provisions that would have the effect of increasing the cost of developing and building new housing. For that reason, the association has strongly urged Gov. Baker to veto S. 2995.

The sections S. 2995 of concern to the HBRAMA include:
  • SECTIONS 9, 10. Mandates unworkable emissions sub-limits for six high priority sectors of the economy, including commercial and industrial heating and cooling, residential heating and cooling, industrial processes and transportation;
  • SECTION 31. Directs the Department of Energy Resources to execute the development of a municipal opt-in "net zero stretch energy code" and definition of "net zero building" within one year, taking this process away from the Board of Building Regulations and Standards (BBRS), and therefore distancing important rulemaking from the trusted and recognized construction and building expertise of the BBRS;
  • SECTIONS 36 – 53 Mandates stringent new appliance and plumbing efficiency standards, including residential appliances and plumbing fixtures that strain against both affordability and market availability;
  • SECTIONS 55 – 60 Codifies environmental justice procedures for real estate development in an administratively burdensome and costly way that will delay residential and mixed-use projects requiring a state permit;
  • SECTIONS 64 – 67 Expands the membership of the BBRS for the purpose of diluting the influence of the building contractors, design professionals, municipal building officials, and the building trades; and
  • SECTION 68. Establishes term limits on the members of the BBRS, including the representative of the HBRAMA, and therefore further diluting the reasoned voice of building professionals and municipal officials.

Given the rapidly rising cost of lumber and other materials that are used to construct a new home, as well as escalating labor costs due to the scarcity of skilled tradespersons, the incremental additional expense of complying with a yet-to-be-defined “net zero stretch energy code” will surely exacerbate the growing housing affordability gap confronting most of the state’s residents. The substantial added upfront cost to a new home might well prove to be an economic barrier to homeownership for many, and the additional costs imposed on workforce rental projects, risk rendering uneconomical already marginal workforce rental projects in many ex-urban communities.

The HBRAMA expressed its concerns about the potential unintended impacts on housing production and affordability, and will continue to advocate with the Administration and the new Legislative session to develop and implement programs that could mitigate the financial impacts of a future net zero code.

A copy of the letter sent by HBRAMA President Matthew Anderson to Gov. Baker can be found here.

HBRAMA to Sponsor Bill to Extend Real Estate Permits and Approvals

One disappointment from the last legislative session was the failure of state lawmakers to include a new Permit Extension Act in the economic development bill it sent to the governor. The HBRAMA, together with NAIOP Massachusetts, the Commercial Real Estate Association, had advocated for a one-year extension of nearly all permits and approvals for real estate development that were in existence when Gov. Baker declared a state of emergency on March 10, 2020 due to the coronavirus pandemic.
Both organizations believed that the effects of the pandemic during the past year were even more devastating to housing and commercial real estate than the effects of the Great Recession and Credit Crisis of 2008-2009 that lead the passage of the original Permit Extension Act in 2010 (and then renewed for an additional two years in 2012). Consequently, the HBRAMA will join with NAIOP to sponsor a bill in the 2021-2022 legislative session that will extend for a period of 1 year any permit or approval for the development of real estate that was in existence during the period March 10, 2020 to March 10, 2022.

A copy of the draft bill can be found here.
Bill Relative to Construction Defects in Condominiums Defeated
For the third legislative session in a row, the HBRAMA and other organizations successfully thwarted a bill that would have significantly altered long-establish standards regarding the statute of limitations and statute of repose as they apply to condominiums.
The bill would have drastically expanded the time period of the statute of limitations by tolling the date that an action accrues until such date as a declarant (builder) relinquishes control of the condominium through its organization of unit owners (the “Declarant Control Termination Date”).

Under the proposed legislation, the six (6) year statute of repose applicable to a defect claim in the construction of the first phase of a large condominium project would not run until six years after the last unit in the last phase of the condominium is completed. Practically speaking, such an amendment to the statute of repose would add tremendous indefiniteness and lack of predictability to construction defect claims, with potentially drastic impacts to the ability to construct and finance large condominium projects.
A copy of the bill, H. 4605, can be found here.

Former Lawrence mayor selected to lead MassDevelopment

The MassDevelopment Board of Directors last month voted to hire former Lawrence Mayor Daniel Rivera as its new president and chief executive Officer. In October, MassDevelopment, the Commonwealth’s finance and economic development agency, announced that after three years as president and CEO, Lauren A. Liss would be stepping down from the position at the end of the calendar year.

Rivera joins MassDevelopment after serving as mayor of the City of Lawrence for seven years where he managed a $341 million operating budget, a $92 million Capital Improvement Plan, and oversaw approximately 3,500 employees. As Lawrence’s chief executive, Rivera led efforts to invest in infrastructure, attract hundreds of millions of dollars in private development, while also overseeing the creation of over 2,400 units of both affordable and market-rate housing.

MassDevelopment, the state’s finance and development agency, works with businesses, nonprofits, banks, and communities to stimulate economic growth across the Commonwealth. During FY2020, MassDevelopment financed or managed 341 projects generating investment of more than $2.69 billion in the Massachusetts economy. These projects are estimated to create or support 10,871 jobs and build or preserve 1,787 housing units.
Looking for continuing education hours for your CSL license? The new HBRAMA CSL education website features the latest in online and in-person educational offerings.
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