Posted on June 7, 2016
By Scott Van Voorhis
Banker & Tradesman Columnist
BOSTON, June 5, 2016 -- Study after study over the years has detailed the Bay State’s increasingly dire housing crisis, even as frustrated middle-class families have voted with their feet, bailing for less expensive states.
The good news is that after years of sticking its head in the sand, Beacon Hill is finally turning its attention to this large and growing crisis.
So what’s the bad news? The cure in a bill rapidly gaining momentum in the Senate could actually make things worse, with a number of “poison pills” that could kill housing proposals in a state starved for new homes of all types.
On the plus side, the proposal would force suburbs and towns across the state to open their doors to new apartment and condominium construction, taking aim at NIMBY zoning barriers that have made moderately priced, middle-class housing an endangered species. But the same proposal would also give local officials the power to level impact fees on new development and force developers to include subsidized, below-market units, in all their projects.
It would also require even small builders with two- or three-home subdivisions to go through a formal vetting process, potentially choking off one of the last sources of new single-family home construction in the suburbs.
“There are things that are poison pills,” said David Begelfer, chief executive of NAIOP Massachusetts, which represents developers across the state. “Unfortunately, at this time we cannot support the legislation as it is written. The good is outweighed by the negatives.”
Supporters contend the bill isn’t trying to please everyone. Rather, it calls upon all different interest groups, like local officials wary of state interference and homebuilders and developers frustrated by restrictive zoning rules, to each give up something in order to get a better functioning system in return, argued Andre Leroux, executive director of the Massachusetts Smart Growth Alliance, which is leading the push for the Senate bill.
And to its credit, the proposal includes a number of provisions that are sure to be a hit among builders and developers even as they are unpopular among local officials.
The bill, which could get voted on by the full Senate this week, would require each town, city and suburb to have at least one zoning district set aside for new condo and apartment buildings, free of restrictions aimed at turning away young families with children.
As many as 200 communities across the state haven’t approved a single new condo or apartment in the last decade, so this is badly needed.
Communities would also have to have a cluster development zone as well, in which homes can be built closer together and surrounded by green space that can be protected from future development.
And the proposal also mandates that suburbs and towns across the state have zoning that allows for in-law apartments or additions.
The bill would also extend the amount of time developers have on their building permits before they have to break ground and streamline the appeals process to try to weed out frivolous challenges to new projects.
This kind of zoning reform is crucial – if passed, it could start to open up more badly needed land and sites in the suburbs for new apartments, condos and even single-family homes in cluster developments.
“The zoning system is dysfunctional,” Leroux noted. “Everybody needs to give up a little piece of the dysfunction that works for them so we can get an overall better system.”
And Now For The Bad News
Yet if the Senate bill opens up more land for new housing, other provisions also could make it much more expensive to build, potentially counteracting the good parts.
While local officials have long yearned for impact fees, they can easily be used to kill unwanted projects if a community were so inclined by jacking up the potential cost until it is no longer feasible.
Requiring developers to include subsidized, below-market units in every project might work in Boston, but in the suburbs and small towns, where rents are lower, such mandates could makes some projects unbuildable.
Closing the loophole that allows small subdivisions to be built without a heavy-handed local review may sound like no big deal. But with the number of new single-family homes being built across Massachusetts on the slide for years now, as local communities subject every new subdivision to endless rounds of reviews, local builders say they can use all the help they can get.
The Massachusetts Smart Growth Alliance, Sen. Daniel Wolf (D-Harwich) and the other architects of Senate Bill 2144 get credit for listening to the concerns of the real estate industry and trying to be even-handed. But at the end of the day, there is a false fairness at work here.
It’s not just builders, developers and local officials who are doing the sacrificing; suburbs and towns across the state are required to either give something up or put up with things they don’t like or want. But this approach ignores the fact that one good reason we are in such a mess right now is that local officials too often have been holding most of the cards and the power here in Massachusetts, where “home rule” is the order of the day.
Our suburbs and towns have used their power to systematically block new housing, with the number of homes, condos and apartments under construction having declined steadily and precipitously since the 1980s. Instead of getting at the root of the problem – overweening municipal power – the proposal runs the risk of exacerbating it, giving local officials all sorts of new powers to play with.
The solution lies in curtailing local regulation, not heaping more red tape on already hard-pressed homebuilders and developers.
That said, there is a glimmer of hope – the Senate proposal has evolved over the last several weeks from something that was even more unbalanced. And if it passes the Senate, the House will weigh in and potentially even it out some more, with Gov. Charlie Baker, our no-nonsense governor, providing the final backstop.
So it’s hardly time to throw in the towel – there’s still a chance a half-decent zoning reform bill could get passed.
If that were to happen, it would be a big, big deal.
Stay tuned!