Governor signs diluted housing incentives
The fiscal 2005 state budget the governor signed into law on June 25 included a program that purports to provide incentives to communities that choose to develop housing in density-rich, “smart-growth” zoning districts.
The program was significantly altered from an earlier version passed by the Senate, however, and the MMA has raised several concerns about the new language.
Incentives included in the Senate plan were diluted in the final version. For example, the Senate version would have held communities harmless from any additional educational costs incurred due to new development inside of “smart growth zoning districts.” But the program included in the budget eliminates this incentive, instead creating a committee to study the issue further.
The housing program will provide communities with a density bonus payment of $3,000 per unit once a building permit is issued, but this amount will not be indexed to inflation, as the Senate had recommended.
The MMA and the Commonwealth Housing Task Force, which developed the concept for the housing incentive program last year, argue that the current proposal will not fulfill the original goal of creating more than 30,000 units of new housing in the state over the next 10 years because many of the incentives have been diluted and some new provisions will serve as disincentives.
For example, the adopted program directs cities and towns to repay incentive payments they have received for adopting a district if the housing units are not constructed in these districts within three years. Since the objective is to “overzone” land, the MMA maintains that placing sanctions on cities and towns that do not construct after three years runs counter to the plan’s objective.
The adopted program gives the Department of Housing and Community Development 30 days to review and approve districts, and if no action is taken by the DHCD in that time, the district will be deemed not approved. The MMA supports the original Senate language, which would have provided 15 days for review, and if the DHCD failed to act, the district would be deemed approved.
The MMA also argues that it will be very difficult to appeal a local decision to adopt a district under the terms of the housing incentive program as adopted. The plaintiff will have to post twice the bond amount to cover twice the estimated annual carrying cost of the property owner and to cover the developer’s attorney fees. This language runs counter to existing law protecting citizens from developers.
The MMA will continue to work closely with the Commonwealth Housing Task Force and the Legislature in order to improve the program and ensure that the goals of the program, constructing much needed housing, are carried out.
