Section Review

Introduction

In Eli Sherman’s article “Affordable Housing Crisis in Massachusetts Contributing to Homelessness” (Fall River Herald News, Feb. 10, 2019), he explains that Massachusetts has been facing a worsening shortage of affordable housing for decades. Massachusetts has provided a recent estimate finding that over 45,000 people were experiencing homelessness within the commonwealth in 2023 (though Sherman believes that figure is likely “woefully undercounted”). Trea Lavery, in her article “Mass. Real Estate Prices Expected to Remain High in 2024” (MassLive.com, Dec. 31, 2023), states that overall for-sale housing price data at the close of 2023 showed that the median sale price for a single-family home in Massachusetts stood at $605,000, representing a 10% increase over the prior year.

Lavery points out that, overall, housing prices have grown more quickly than wages, forcing an ever-growing number of people out of the general housing market. According to one recent analysis from the National Low Income Housing Coalition, Massachusetts is short over 170,000 homes for extremely low-income renter households (those whose incomes are at or below the poverty level of 30% of area median income), though Jennifer Smith of the CommonWealth Beacon explains that some estimates of the shortfall are as high as 200,000 homes. At the same time, Smith says, the commonwealth is “bleeding early-career young people,” as high purchase prices and rental costs have caused net migration out of Massachusetts to increase by 1,100%. Needless to say, there has been no better time for the recently passed Massachusetts Affordable Homes Act (the “Act”) to arrive on the scene. While the Act has broader impacts on affordable housing developments by increasing the amount of funding for these projects, this article will focus primarily on the revisions to the commonwealth’s Zoning Act, codified at General Laws Chapter 40A, and the impacts of those changes. It will start by focusing on the allowance of accessory dwelling units as-of-right before shifting focus to changes to the zoning relief appeals process and attempts at increasing affordable housing opportunities for low-income veterans.

Revisions to Chapter 40A

a. Accessory Dwelling Units Now Permissible as-of-Right

Gov. Maura Healey signed the multi-billion-dollar Act into law in August of last year. The Act is, at its core, a housing bond bill — something the commonwealth passes every five years to govern housing investments, according to the Massachusetts Taxpayers Foundation (MTF). What stands out, MTF explains, is the amount of bonding authorized, as it is more than double that of the 2018 bond bill. The commonwealth, in its “Affordable Homes Act Fact Sheet,” explains that the bill features $2 billion to support “the repair, rehabilitation and modernization of over 43,000 state-aided public housing units.” While the Act primarily increases investment in the development of affordable housing units, it also has made uniform the patchwork of zoning bylaw and ordinance provisions across the commonwealth on the issue of accessory dwelling units (ADUs).

ADUs are additional residences accessory to single-family homes, which MTF states are often referred to as “in-law apartments.” The governor’s press release, “Governor Healey Signs Most Ambitious Legislation to Address Housing Costs in State History,” provides further details on ADUs: they are typically under 900 square feet in floor area, including sleeping, cooking and sanitary facilities. Such units are frequently found as apartments converted from old basements or attics, as well as backyard cottages, spaces over garages, or “bump-out” additions. According to Matt Walsh, a policy analyst at the Metropolitan Area Planning Council, prior to the Act, whether ADUs were allowed depended on municipal or local regulations and zoning laws. The Act, at Sections 7 and 8, now allows ADUs statewide as-of-right by inserting new text in Chapter 40A at Sections 1A and 3 defining ADUs and prohibiting municipalities from banning their construction in residential zones. As defined by the Act, ADUs are not required to be owner-occupied, allowing owners to rent out the additional space and generate additional income. The Act also does not require an additional parking space for ADUs if they are less than half a mile from access to “a commuter rail station, subway station, ferry terminal or bus station.” ADUs would accordingly be well suited to increasing the living space of a single-family home, allowing relatives to move in comfortably, or generating income for the owners by renting these units.

However, according to the Act, ADUs are still subject to reasonable regulations, including but not limited to: requirements set out in the State Environmental Code; site plan reviews; bulk and height restrictions; and prohibitions on short-term rentals. That said, Section 7 of the Act provides that “no municipality shall unreasonably restrict the creation or rental of an accessory dwelling unit that is not a short-term rental.” Essentially, municipalities are prohibited from restricting the creation of these units via unreasonable regulatory requirements. The Act also stipulates that owners seeking to construct more than one ADU on a lot must seek a special permit or variance.

Widespread development of ADUs would have the potential to make a significant impact on the commonwealth’s housing affordability crisis. By allowing owners of single-family properties to build additional housing, Healey’s press release predicts that the Act will lead to between 8,000 and 10,000 new housing units over the next five years. While this would not solve all of the problems in the housing market in Massachusetts, it would still account for nearly 5% of the aforementioned 200,000 units needed to remedy the crisis, and would give property owners greater flexibility in the use of their lots. The National Association of Realtors found that ADUs can also be an effective way to add value to a property, particularly in larger cities, where they can increase home values by up to 35%. Increasing the number of ADUs would thus have a three-pronged benefit, as they would increase the supply of housing, which would help alleviate the strained housing market; increase local tax revenue to support other public projects; and increase property values for owners. Should 8,000 to 10,000 such units be built in the next five years, ADUs could have an impact on the state’s retention of young people, as smaller, more affordable apartments are a critical component of keeping young professionals in an area.

b. Appeals of Zoning Relief Decisions: Bond Posting in Court’s Discretion with Increased Maximum Bond Amount

The Act also altered several portions of the zoning relief appeals process: at the pleading stage, plaintiffs on zoning relief appeals must “sufficiently allege and must plausibly demonstrate measurable injury, which is special and different to such plaintiff, to a private legal interest that will likely flow from the decision through credible evidence.” Thus, plaintiffs are required to show plausible, distinct injury with credible evidence when the complaint is filed and not later.

Section 12 of the Act also revised Section 17 of Chapter 40A to grant courts hearing an appeal of a zoning relief decision greater discretion in determining whether or not the plaintiff in such cases has to post an appeal bond. Chapter 40A previously required a showing of bad faith or malice in order to grant costs against a plaintiff. That requirement has been expressly removed, as Section 12 of the Act’s new language now provides, “[n]othing in this section shall require bad faith or malice of a plaintiff for the court to issue a bond under this section.” However, Section 13 of the Act still requires bad faith or malice to grant attorneys’ fees in such cases. The cap on bond amounts has also risen dramatically: prior versions of the law allowed a maximum of $50,000, whereas now they can be as high as $250,000, and extend not only to costs of litigation but to the reimbursement of expenses incurred by applicants as a result of the appeal.

c. Special Preference for Veterans in Affordable Housing Developments

The final major change to Chapter 40A comes from an entirely new Section 18 appended to the Zoning Act. This new section provides municipalities with the ability to enter into agreements with developers to provide a preference for veterans for up to 10% of the affordable units in a given project. Essentially, should a municipality decide to pursue these types of agreements, veterans must be given be given preference in the first 90 days of the application process. It would not require additional units to accommodate the agreement.

USA Facts states that, as of 2022, there were over 243,000 veterans in Massachusetts. However, over 6% of them, or about 15,000 people, were living below the poverty line. The Act’s preference would help alleviate these numbers without requiring additional housing to be built. However, it remains to be seen how frequently municipalities will pursue this option and how they will effect notice on the low-income veteran population in their areas.

Kevin A. Feeley  is an associate in Robinson+Cole’s Real Estate + Development group. Feeley works in a broad range of real estate and development matters, including disposition, acquisition, financing, leasing, permitting, land use, and planning policy for public and private clients.

Matthew J. Lawlor is the co-chair of Robinson+Cole’s Real Estate + Development group. His practice ranges from real estate disposition for public agencies, to affordable housing finance for major lenders, to development, permitting, land use, and planning policy matters for both public and private clients. He regularly represents public authorities and agencies, lenders, developers, nonprofit organizations, and commercial landlords and tenants.