[*PG509]THE COST OF DEVELOPING AFFORDABLE HOUSING: AT WHAT PRICE?
Abstract:It is not disputed that many of the nations cities, towns, and tribal reservations, and their current or would be residents, are facing an affordable housing crisis. At issue is how municipal governmentsthe level of government within which housing gets builtcan solve this crisis without exacerbating existing problems or creating new ones. This Article recommends the affordable housing problem be solved through a combination of time- and judicially-tested options and burden-sharing arrangements with the private sector, most notably through mandatory inclusionary-zoning requirements and the imposition of impact fees. It presents a critique of the approach taken by the Commonwealth of Massachusetts in its pursuit of affordable housing development. The Article recommends that states considering the Massachusetts cram-down methodology avoid the draconian and regressive tactics employed by the Massachusetts affordable housing statute. Rather, they should look to successful affordable housing programs employed by plan states.
Housing is a necessary of life.1
The Due Process Clause was intended to secure an individual from an abuse of power by government officials.2
[Due process] claims should, however, be limited to the truly irrationalfor example, a zoning boards decision made by flipping a coin, certainly an efficient method of decisionmaking, but one bearing no relationship whatever to the merits of the pending matter.3
The development of land, the rules governing land development, and the process undertaken in both instances is, and has always been, peppered with hostility, resentment, accusations of wrongdoing, and distrust of individual motives.4 This is also the case with the development of affordable housing.5
Although opposition to affordable housing developments historically has been associated with racial animus, expressed both overtly6 [*PG511]and subtly,7 this Article critiques a particular means of developing affordable housing as violative of fundamental due process protections and common sense.8
This critique is not directed at the fact that the affordable housing units have been constructed or the fact that the structures are occupied by needy residents. This Article does not contend that affordable housing development has any impact, positive or negative, on abutting or municipal property values.9 Thus, this article does not criticize the end result.
[*PG512] Rather, this Article argues that the means of producing affordable housing is as important as the resulting housing itself. To ensure an equitable resultto guarantee that the ends do justify the meansa municipal comprehensive plan and regulations consistent with that plan must guide the development of affordable housing.
A successful affordable housing program is, by definition, one that is consistent with the city or town or regional plan for growth and development.10 An unsuccessful affordable housing programbest exemplified by that found in Massachusettsis one that has no foundation in a plan or in planning principles.11 The result is that although the program may facilitate the construction of affordable housing units, its reliance upon an ends justifies the means methodology violates due process,12 ignores so-called smart growth principles,13 and clouds an otherwise clear and addressable problemthe need for more housing at sub-market prices.14
[*PG513] This Article analyzes Massachusettss Comprehensive Permit Statute, chapter 40B (Comprehensive Permit Statute or 40B), the nations leading ends justifies the means statute, and proposes a more progressive, defensible, and likely, more successful process for developing affordable housing not just in Massachusetts, but nationwide.15 Countless examples exist of statewide solutions to affordable housing development that link the need for affordable housing with other critical municipal concerns. These approaches respect due process guarantees and the logic of comprehensive plans and planning.
It has long been recognized that a plana comprehensive plan or a master planprovides state, regional, and municipal governments with a rational and predictable plan for growth, development, and resource allocation.16 The plan becomes the blueprint or, in California, the constitution, for land use and land development.17 In true plan states, regulatory enactments not in accord with the comprehensive plan are void ab initio.18 Thus, in a plan state, a city or town adopts a comprehensive plan consistent with either a state or regional plan (or both), and then tailors its regulatory program around the [*PG514]plan and the principles contained in the plan.19 The adopted regulations follow, and are consistent with, the plan.20
States that do not require planning consistency or linkage between regulatory enactments and an adopted plan could, for lack of a better term, be labeled non-plan states. Non-plan states rely on traditional rational basis presumptions to defend (or arguably excuse) local government actions. Thus, for example, the success of a challenge to a downzoning in a non-plan state is dependant upon the plaintiff demonstrating that the citys or towns action was arbitrary; a difficult hurdle given that there are no benchmarks for guiding the courts adjudication.
Consider the following hypothetical: the City of Jamesville is an incorporated municipality in a state with no comprehensive planning requirements. The state has enabled cities and towns to adopt zoning and traditional police power controls to protect public health, safety, and welfare. Jamesville recently adjusted its zoning ordinance to prohibit multifamily structures and require a minimum lot size of two acres for every single-family residential structure. Jamesville has adopted, many would argue, a zoning ordinance that is both exclusionary and orchestrated to erect barriers to moderate-income housing development.
A statewide nonprofit organization files for declaratory judgment claiming that Jamesvilles ordinance is exclusionary. The claim is a facial challenge21 and includes the argument that the Citys actions were ultra vires, arbitrary, and de facto exclusionary. Bowing to tradi[*PG515]tional principles of judicial deference to legislative22 and adjudicative23 actions, the likely outcome of a reviewing court, applying a rational basis standard of review,24 will be for the defendant-City. This outcome will likely occur despite the possibility that the two-acre zoning may in fact be exclusionary.
In its review, the court may demand some evidence that a two-acre minimum lot size and a prohibition on multifamily housing are necessary to fulfill the Citys police power objectives.25 However, absent a clear indication that the City violated equal protection26 or [*PG516]some other state constitutional guarantee,27 the challenge will fail and the ordinance will be upheld.
The fact that Jamesvilles rezoning efforts will succeed highlights both the inherent problem lurking within non-plan states as well as the irrationality of forcing non-plan states to succumb to legislative or judicial punishment for the failure of their respective cities and towns to respond properly to legislative mandates. This is land use laws most notorious Catch-22.
By virtue of the fact that the state has not adopted statewide planning or consistency requirements, cities and towns are arguably free to enact any regulation that is not preempted by or inconsistent with state or federal law. This laissez faire approach may work, unless and until the state concludes that issues of statewide importance are being overlooked and therefore require remedial action. Thus, in a non-plan state, needs of statewide importanceaffordable housing, power plants, telecommunication facilities, and others that transcend traditional municipal boundariesare difficult to address. There is no effective mechanism to encourage cities and towns to do the right thing with respect to accepting their share of undesirable land uses.28 A cram-down mechanism, either statutorily or judicially enforced, leads to irrational results.29
In a plan state, however, cities and towns can be forced to satisfy statewide concerns in accordance with a logical planning process.30 [*PG517]They can be entrusted to develop a schedule and a processa planfor how, where, and when the construction or placement of these mandatory facilities or uses is to occur. Plan states respect the logic of ensuring both horizontal consistency among the plans elements and vertical consistency between the plan itself and the regulations that implement the plan.31 As a result, plan states avoid the illogical result of requiring cities and towns to develop consistency between plans and regulations, only to have them voided if and when the state legislature deems it appropriate.
Finally, plan states create a process by which cities and towns develop a comprehensive plan, adopt regulations to enforce and implement the plan, and revise the plan on a regular and predictable basis. This process allows a court, reviewing either a facial or an as-applied attack to a regulation, to ensure first that the regulation was in accordance with the comprehensive plan.32 As noted previously, in some states, if the regulation is not in accordance with the plan, then it is void ab initio.33
The mandatory planning process ensures that cities and towns fulfill statewide, regional, and local concerns in a logical and predictable fashion. The mandatory plan is the most democratic means of ensuring, for example, that City A and Town B both have their fair share of affordable housing, appropriate amounts of open space, adequate commercial and industrially zoned property, and regionally ascertained coverage under the Telecommunications Act.34
[*PG518] If one removes the assurance that a comprehensive planning program provides, then cities and towns are left to fend for themselves with little or no statewide guidance or support. Although municipalities have the benefit of the presumption of validity in their actions, these actions are capable of reversal or suspension at anytime if the state legislature deems one issue more important than any other.35 And while it has always been true that the state legislature can remove any of the powers that it granted cities and towns,36 the fact is that these powers need never be removed in a plan state. Simply put, in a plan state, cities and towns do the states bidding, but in a predictable and logical fashion.37
For example, assume that the state legislature in a plan state adopts the following two statutes. First, the legislature passes a law stating that cities and towns that fail to have at least twenty percent of their land area protected as open space will lose a set percentage of state aid dollars every year. Second, the legislature passes a law requiring that cities and towns have at least twenty-five percent of their land area zoned for multifamily housing. In a plan state, these mandates can be satisfied by revisions to the local comprehensive plan and supporting land use regulations. In a non-plan state, however, compliance with these new laws is complicated and unguided. Which areas [*PG519]of the city should be preserved as open space? Which areas are best suited for multifamily development?
Now assume that the state mandate pertaining to open space noted above is revised to require that where the open space mandate has not been met, a State Open Space Appeals Committee will be authorized to hear appeals brought by any resident of the city or town complaining of its failure to comply with the twenty percent requirement. The Committee is empowered to issue an order granting the city or town 120 days to remedy its noncompliance by executing agreements with property owners to purchase, in fee or easement, real property for perpetual protection. If the municipality fails to comply with the Committees order, the statute empowers the Committee to purchase the land on the municipalitys behalf. The cost of the acquisition is thereafter deducted from annual state aid payments due the community.
The above-noted revision would wreak havoc in a non-plan state. What competing municipal concerns would have to be ignored while the Committees order was being enforced? Where would the community find the money to comply? What about the city or towns desperate need to expend funds on public services such as schools or housing for the elderly?
In this hypothetical, cities and towns in a plan state would fair much better. They could meet as a community to discuss how to revise their comprehensive plan, and then determine how to alter their land use regulations to ensure that all new developments set aside at least twenty percent of the locus as protected open space. They could adjust their zoning codes to raise minimum lot sizes, decrease building and lot coverage, increase setbacks, and tighten subdivision and wetland regulations. They could address the mandate in a comprehensive and logical fashion by addressing all the issues facing them, rather than in an ad hoc, cram-down basis.
Almost sixty years ago, in their now famous book Communitas,38 Paul and Percival Goodman publicized the illogical and regressive results that occur in states and local governments where plans are ignored or non-existent. With specific reference to the housing crisis then existing in New York City, they criticized the fact that the City was facing numerous competing interests without the vision to tackle [*PG520]them comprehensively.39 As discussed above, this failure and the attendant consequences best describes non-plan states, such as Massachusetts, today.
Common state-imposed requirements that pertain to all local governments within a state include school curriculum,40 water quality standards,41 and traffic regulations.42 Each requirement is perceived as a traditional function of the states police powers and local regulation is generally not tolerated.
A legislative mandate captures the essential relationship between the state and its subordinate corporations. This hierarchical relationship highlights the persistent tension between municipalities and their respective state governments and establishes the distinction between home rule43 and Dillons Rule44 jurisdictions.
In a pure home rule state, a city or town is free to protect the health, safety, welfare, and morals of its citizens provided that the local law does not conflict with state law,45 or act where the state has [*PG521]preempted local governments from acting.46 Save these two exceptions, cities and towns are free to act in furtherance of their plans, policies, and locally adopted goals and programs.47 An inherent conflict arises, however, where the legislature in a home rule state reduces or rescinds previously granted powers. The courts have resolved this conflict, stating that the sovereign that granted the powers may simply take them away.48
Absent imposition of a state mandate or preemptory language, however, the regulation of land uses enjoys the presumption of validity by a reviewing court.49 Thus, a city or town that adopts a zoning ordinance requiring 10,000 square feet per dwelling unit, or two acres per dwelling unit, is granted substantial deference by the judiciary if the ordinance is challenged.50
[*PG522] The reviewing court applies the rational basis standard.51 If the court concludes that the ordinance is not arbitrary or capricious, and was enacted to fulfill a legitimate governmental purpose, then the ordinance is valid and will stand.52 This rational basis standard ensures that courts will not interfere with, substitute their judgment for, or otherwise challenge actions taken by local legislative bodies seeking to protect health, safety, or welfare.53 Although some constraints are in place, courts are reluctant to reverse decisions made at the local level of government.54
Judicial deference for legislative acts stems from the constitutional requirement that the powers of the judicial, legislative, and executive branches of government remain separate and independent, precluding one branch from exercising the powers of another.55 This deference, in addition to their extensive regulatory powers, offers broad opportunities for local governments to regulate private property in the pursuit of protecting health, safety, and welfare.56
But this result is as it must be, given the fact that the federal government has never successfully regulated land at the local level,57 and the fact that only a small minority of states have been willing to entertain the idea of regulating private property at a statewide,58 or even [*PG523]regional, level.59 Although federal or statewide regulation of land use could lead to more comprehensive and successful management of the nations natural resources, the fact is that the federal government has shown little interest in this approach, and the majority of states see land use regulation as a local government issue.
That land use is most effectively managed at the largest scale practicable is a basic tenet of land use planning.60 Unfortunately, this principle clashes with the fact that it would be politically risky for a senator from Ohio to vote for land use regulations on land in Sarasota, Florida, or for a state representative from upstate New York to vote for land use controls over land on Long Island.61
The implications of the fact that land use is managed, perhaps by default, at the local level of government are significant. Local officials, by virtue of their proximity, both physically and politically, to the affected land are deemed to know best the appropriate regulations that should be applied to their respective landscapes.62 For example, a member of a city council would understand the need to rezone a portion of the city to a more or less intensive use, given his or her knowledge of the citys economic climate, infrastructure availability, and political support of the abutting neighborhood. Similarly, a member of a local planning board would know the importance of supporting a downzoning effort to protect the zone-of-contribution of the towns only source of drinking water.
[*PG524] These examples highlight why the majority of states grant broad authority to their cities and towns to regulate land use within their respective borders.63 When it comes to development of affordable housing, however, it is precisely because of such deferential treatment that federal,64 state, county, and even some local governments, as well as the private and the non-profit sectors, have called for dramatic remedial action.65 In some cases, the called-for actions have reversed, or sought to reverse, the presumption of validity afforded cities and towns by the rational basis test.66
Perceived as a root cause of the lack of affordable housing, land use regulations, including zoning and subdivision regulations, health codes, building and fire codes, and fee requirements are alleged to represent barriers to affordable housing.67 Examples of these allegations are numerous. A generalized example is as follows:68 Jamesvilles minimum lot size of 20,000 square feet per dwelling unit, coupled with the citys subdivision regulations, rules governing wastewater disposal, and impact fees, are targeted as contributing to the high costs of new residential construction. But for these regulatory barriers, critics argue, new home construction in Jamesville would be more vigorous and resulting sales prices lower than they are with the barriers in place.
The search for, and rooting out of, barriers to affordable housing has taken on an increased frenzy of late.69 The United States De[*PG525]partment of Housing and Urban Development has organized an extremely sophisticated Web site entitled Regulatory Barriers Clearinghouse.70 The National Association of Home Builders has published numerous documents on the subject.71 Several states have conducted barrier studies designed to identify and break down barriers to affordable housing.72
These efforts are probably well intentioned; affordable housing is a key concern facing the nations cities and towns. At issue, however, is how best to address the problem. One approach is to encourage and, if necessary, require cities and towns to develop affordable housing consistent with their respective comprehensive plans. This approach has been successfully used by several states throughout the country and could be readily adopted in all states.73 Another approach, and one that is receiving an increasingly receptive audience, seeks to emasculate local government efforts to manage and control local land use under a theory that local government regulations are barriers to affordable housing development.74
Legislative mandates directed toward the provision of affordable housing are common, but are more often expressed as desirable goals [*PG526]than as minimum standards or milestones.76 Two distinct exceptions to this generalized rule exist. One exception, in part the focus of this Symposium, is the New Jersey Supreme Courts holdings in the Mount Laurel cases.77 The second exception lies with the Anti-Snob Zoning Act,78 adopted by the Commonwealth of Massachusetts in 1969, and [*PG527]discussed in detail below. Massachusettss Comprehensive Permit Statute has remained unaltered since its adoption.79 The intended goal of 40B remains the same as it was thirty-four years ago: to require that no less than ten percent of the housing stock within every city and town be subsidized with or by a federal or state subsidy.80
Remembered as racist, at worst, and arrogant, at best, the nations most recent experiences with urban renewal and affordable housing development on a grand scale are thought of today as government intervention in urban affairs gone wrong.81 Yet, despite the disgraceful efforts of government central planners and the failure of the urban renewal programs, many vestiges of the flawed policies of urban renewal can be found within 40B.
[*PG528] For example, urban renewal programs repeatedly relied upon state and federal money to dismantle existing neighborhoods to make way for urban redevelopment.82 As we know, these programs did not eradicate slums or urban decline. In fact, they accomplished just the opposite. They destroyed the urban core, separated and segregated neighborhoods, and leveled urban history.83
The driving forces behind urban renewal programs were federal and state subsidies: cash and/or cash equivalents.84 These gifts rewarded developers with handsome discounts on land, mortgage insurance, grants of easements, abatements on real property taxes, and tax deductions.85 To avoid the appearance that developers would reap [*PG529]windfall profits, several programs enforced caps on the profits allowed the private sector. These so-called limited dividend programs are strikingly similar to the limitations imposed by the comprehensive permit program. The state and federal dollars used in the now-discredited urban renewal programs were financial or related subsidies that differed little from the subsidies used by 40B.86
In one of many ironies discussed in this Article, at least the failed urban renewal programs required the development of an urban renewal plan.87 In exchange for selling or renting twenty-five percent of [*PG530]the dwelling units in a development project at eighty percent of the median income for the community, 40B permits a developer of raw, under-developed, or previously-developed, land to force the approval of a development density unconstrained by any local rule, regulation, ordinance, or policy.88 Put another way, in exchange for offering twenty-five percent of the total number of dwelling units as affordable, no density restrictions are imposed, subdivision rules and regulations, health regulations, historic district requirements, and any and all other local rules or requirements can be waived by the local board of appeals. As far as the developer is concerned, the sky is literally the limit.
Thus, a parcel of land zoned two dwelling units to the acre can now contain twelve, fourteen, or forty units to the acre. A parcel prohibiting structures greater than forty feet in height can contain structures 100 feet in height. Structures otherwise required to be set back at least twenty feet from a neighboring sideline can now be constructed on the neighboring sideline. In short, the only applicable local regulations are those negotiated89 between the local review board and the applicant.90
[*PG531] In yet another ironic aspect of Comprehensive Permit Statute, a board of appeals can waive rules and regulations adopted locally,91 but regulations promulgated by the State, even if implemented locally, cannot be waived. Thus, the State Building Code,92 Wetlands Protection Act,93 Environmental Policy Act,94 and wastewater disposal regulations95 apply to comprehensive permit and market rate projects alike.
The illogic of this fact is maddening. On one hand, Massachusetts has promulgated minimum standards for the protection of public health and welfare¾including ground, surface, and drinking water supplies96 and wetland resources.97 On the other hand, the Comprehensive Permit Statute demands a one size fits all approach for the [*PG532]States 351 municipalities. Septic system regulations applicable in communities with geologic deposits of bedrock, for example, cannot be more restrictive than in communities with geologic deposits of sand and gravel.98 Wetland regulations in communities with extensive vernal pools and wildlife habitat cannot be more restrictive than in communities with limited and degraded wetland systems.99 Massachusettss cities and towns are treated as homogenous blobs: Falmouth is the same as Lowell; Lenox is the same as Worcester; Rockport is the same as Grafton.
Recognizing that cities and towns would rebel against this usurpation of local control, the Comprehensive Permit Statute created the Housing Appeals Committee (HAC),100 an administrative agency to which an applicant whose project was denied, or approved with too many conditions, could appeal.101 The HAC, through rules promulgated by the Department of Housing and Community Development,102 has overseen the appeal process with an unbending commitment to the intent of the statute. The Massachusetts courts have supported this relentless pursuit, deferring to the legislature and arguably demanding that it respond.103
[*PG533] In decision after decision, the HAC has dismissed local offers of proof or concerns regarding the extent of affordable housing already existing within the city,104 environmental impacts generated by the new development,105 traffic congestion and emergency access,106 storm-water runoff,107 visual impacts and property devaluation,108 school overcrowding,109 inconsistency with a locally adopted plan,110 [*PG534]impact on the municipalitys tax base,111 and water supply and water pressure limitations.112
Judicial support for the decisions of the HAC, and 40B in general, is perplexing given the Massachusetts Supreme Judicial Courts (SJC) decision in Vazza v. Board of Appeals of Brockton.113 In Vazza, the SJC noted:
Purchasers of real estate are entitled to rely on the applicable zoning ordinances or by-laws in determining the uses which may be made of the parcel they are buying . . . . For many persons, particularly those purchasing houses, this is the largest single investment in their lives. It is important that such purchasers be able to determine with reasonable accuracy, before making that investment, just what the appli[*PG535]cable zoning ordinances or by-laws are, and what uses they permit or prohibit.114
Moreover, the courts concern for the due process rightsthe ability to predict with some certainty the allowable uses on a parcel of landis noticeably absent in its support for 40B. The statute provides no reasonable accuracy, as was deemed so important in Vazza for property owners, neighborhoods, cities, or towns to determine what will happen on the parcel of land next door, down the street, or within the corporate boundaries. The comprehensive permit process is predictable only in its unpredictability. Any and all parcels of land are subject to it, at any time and at any density.
Perhaps injured by the publicity and attendant public outrage accompanying such decisions, the Department of Housing and Community Development has embarked on an aggressive campaign to soften the applicable regulations,115 and thereby attempt to check the groundswell seeking to repeal the statute.116 Due to the timidity of the Departments actions to date, it has been ineffective in reigning in the HAC.117
Before applying to the city or town, an applicant for a comprehensive permit118 is required to obtain a project eligibility letter119 in [*PG537]order to gain admission to the municipal board of appeals.120 The presumed purpose of this letter is to ensure that only bona fide applicants will be able to engage the board of appeals, and the board will not spend time reviewing a proposal that is unlikely to be realized.121
This gatekeeper strategy is theoretically a good one. Rogue applicants seeking nothing more than to develop on a parcel of marginal landland that heretofore had been deemed undevelopablewould be rejected and would not receive the eligibility ticket needed to apply for a comprehensive permit. Thus, the gatekeeper could be con[*PG538]sidered some sort of trustee with the host community as beneficiary, and the land subject to the comprehensive permit as corpus.
In fact, the SJC and the HAC have elevated the role of the gatekeeper to nothing short of trustee status. Because of the trust imputed to the subsidizing agency in its review of applications for project eligibility status, the SJC and the HAC have established the principle that a local government has extremely limited authority to review or comment upon the matters contained within the project eligibility approval.122 This point is worth restating. The SJC and the HAC presume that the subsidizing agency is professional, thorough, and diligent in its investigation of applications for project eligibility status. This implies that the agency has, among other things, investigated the parcel subject to the application, investigated the qualifications of the applicant, and ensures that the proposal is consistent with neighborhood characteristics.123
The importance of a thorough project-eligibility review, and perhaps a basis for the SJCs and the HACs blind reliance on the word of the subsidizing agency, is that once issued, the ticket becomes not just a ticket to the local board of appeals, but also to the HAC. And a ticket to the HAC almost always ensures a successful outcome for the applicant-developer.124
In practice, however, the gatekeeper is an illusion and the trustee is in breach. The process is a charade; one designed to lure the public into a belief that government agencies are watching out for the public interest. Whether the courts and the HAC understand the illusory effect of the project eligibility process as it is being abused is unclear. In fact, the gatekeeper responsible for issuing the majority of project eligibility letters, MassHousing, rejects any notion that it is obligated to comport with any rule or regulation promulgated by the Department of Housing and Community Development.125 Free, at least in its [*PG539]opinion, from any state oversight and responsibilities, the states largest producer of project eligibility letters believes it can issue admission tickets to any applicant, for any parcel of land, at arguably any density. Without the assurance that the applicant is a bona fide developer and that the land sought for development is appropriate for the density proposed, the comprehensive permit process, already chaotic and unpredictable, becomes intolerable.126 As currently applied, cities and towns cannot rely on the subsidy agents to weed out inappropriate applications and, at the same time, are estopped from doing so themselves.127
If the applicants 40B application is denied, he or she may take an appeal to the HAC, where victory is almost certain.128 If approved [*PG540]with too many conditions, then the applicant may likewise appeal, and victory is again almost certain.129
Through an elaborate system of regulations and strengthened by over thirty years of administrative decisions, the Comprehensive Permit Statute has, according to several commentators, produced approximately 25,000 units of affordable housing.130 But as noted previously, this Article does not attack the ends, but rather the means of 40B. That 1000, 25,000, or 100,000 housing units have been created under the statute is not relevant to this debate. Instead, the debate should focus on whether the means sought to accomplish the purported objective are constitutionally supportable and, if not, what alternate objectives exist. After all, if the means sought to accomplish the end result are unconstitutional or violate public policy,131 then the ultimate results are irrelevant.132
Local legislative actions intended to protect public health, safety, and welfare generally receive the deferential presumption of validity from a reviewing court.133 The presumption of validity is based, in part, on the belief that the legislative action is intended to protect public health, safety, and welfare. And although state legislative authority is far broader than that of local governments,134 statutes promulgated by state legislatures must nevertheless comport with fundamental principles of due process and related constitutional guarantees.135
[*PG542] Consider the following example: Jamesville, a medium-sized town in Massachusetts adopts a capital budget136 and a comprehensive plan. Less than ten percent of the towns housing stock qualifies as subsidized under 40B. The town, unfortunately, has little hope of withstanding an appeal of a local denial of a comprehensive permit. The fact that the capital budget indicates that the town has no financial ability to build a new school, wastewater treatment plant, or library within the next five years has, at best, limited evidentiary value before the HAC.137
Assuming that the HAC, in derogation of the local comprehensive plan and capital budget, grants the comprehensive permit, where do we find the public benefit? Is there a public benefit in eradicating the local planning process? Is there a public benefit in ignoring the will and votes of the local legislature? Is there a public benefit in creating and enforcing a statute that transforms all land parcels, large and small, vacant and developed, upland and wetland, flat or rocky, into developments of unlimited potential densities? Where is the public benefit in the chaos this statute creates?
Whatever benefits are passed on to the purchasers or renters of the dwelling units contained within a 40B development, they are dwarfed by the damage caused to due process and the publics sense of security in the land use system. Land development in the absence of predictable rules is anarchy.138 Although rules and regulations are constantly changing, their change is the result of a deliberative processdue process.
[*PG543] The Massachusetts statute, 40B, fails to comport with procedural and substantive due process. The statute, by its very definition, creates an unpredictable, and thus unfair, outcome. By suspending local rules and regulations, or at least allowing for the possibility that local rules and regulations will be suspended, the statute violates fundamental principles of fairness.
A legislative action can also lose its presumption of validity where the action creates a constitutional violation, including taking private property without compensation. Regulatory takingswhere government goes too far in regulating private propertyhave been the subject of numerous decisions.140 For now, however, I suggest that 40B not be viewed as constituting a regulatory taking, but rather a regulatory giving.
A theoretical regulatory taking argument could emerge from an inclusionary zoning program.141 The Comprehensive Permit Statute is the polar opposite of an inclusionary zoning program, however. Rather than take affordable housing units from the developer, it gives unlimited density bonuses to the developer.
A regulatory taking is an action by government that so deprives a landowner of economic value that the governments action is as if the land had been taken by eminent domain. A regulatory giving is the opposite of a regulatory taking. A giving is an action by government that grants unearned or uncompensated benefits to the private sector. The Comprehensive Permit Statute is a regulatory giving in that the applicant is givengiftedan unlimited development density and [*PG544]unlimited profit potential142 in exchange for a perceived public benefit. As takings jurisprudence weighs a variety of factors to evaluate whether governments actions have gone too far, so too can an evaluation of governmental givings.143
At issue is the giving, or the gift, of 40B. Recall that under 40B, the applicant need not obey local zoning regulations, including but not limited to: use, density, area, lot coverage, and frontage.144 An unlimited density bonus is gifted in exchange for the set-aside of one below-market dwelling unit for every four market-rate units proposed. Thus, a development of 100 dwelling units must contain at least twenty-five sold or rented at a rate no greater than eighty percent of median income. That twenty-five percent of the dwelling units must be sold or rented at a price below market rates does not transform the legislation into a permissible quid pro quo. The end result remains a gift. The donee-developer is the beneficiary of the gift. The donor-municipality and abutting property owners pay the cost.
The costs of the gift can be measured in several ways. First, the cost of new development not otherwise planned for, foreseeable, or quantifiable is imposed upon the community, regardless of infrastructure limitations. These costs include those related to education, pub[*PG545]lic safety, water and wastewater services, and so on. As previously discussed, the HAC has never accepted the cost burdens imposed by a 40B project as justification for permit denial.145 Conversely, limitations on infrastructure are seen as the communitys problem and must be addressed, regardless of the imposition of new development.146
Second, cities and towns develop long-range wastewater and water supply, open space, and building needs plans because it makes good sense to do so. These plans are virtually thrown out the window¾along with local zoning and subdivision regulations, among others¾in the face of a comprehensive permit. For example, the city or towns decision to defer extending wastewater service to a portion of the city or town until three years from today is reversed to accommodate the comprehensive permit.
Third, the cost of losing the publics trust, although not quantifiable, is certainly unpalatable. As long as the Comprehensive Permit Statute remains as is, no parcel of land, whether fully built upon, partially built upon, undeveloped, or historically considered undevelopable, is safe from a 40B application. This fact leaves the publiclandowners, tenants, and public officialsin a constant state of uncertainty. The public trust is eroded when government officials, in this case the board of appeals, are forced to elevate one development project in lieu of all other projects and issues. The erosion is a giving to the 40B applicant: his application has thrown municipal plans, programs, and reasonable goals and objectives to the wind.
Finally, a discussion of takings and givings raises questions of policy. One approach is that taken by Massachusetts. To stimulate housing production, developers, speculators, or anyone else are granted a permit to produce as many dwelling units as can be engineered on a parcel of land, provided twenty-five percent of the units be sold or rented at below-market prices. Another approach is that taken by many other states. To stimulate housing production, cities and towns must develop realistic and measurable plans and programs to ensure that dwelling units are built in accordance with the plan.
[*PG546] The policy question is not who should provide affordable housing. The answer to that question is clear that the private sector is the better provider. But the real question is, rather, how much control should be granted to the private sector in the pursuit of affordable housing development? The following discussion suggests that mandatory inclusionary zoning and/or impact fee requirements are appropriate and measured controls that ensure predictable development of affordable housing.
Given the controversy attendant with a statute that yields unpredictable results, it would seem that a solution to the Massachusetts affordable housing problem that avoided such controversies would be embraced by all concerned. Inclusionary zoning, which requires residential developers to provide affordable housing, represents one such solution.147 Mandatory inclusionary zoning, however, is not currently [*PG547]authorized in Massachusetts.148 Ironically, the same state that has pioneered a crude bludgeon to force cities and towns to accept affordable housing has prohibited those same cities and towns from developing affordable housing in a manner successfully used elsewhere. Common sense dictates that if inclusionary zoning were in existed in every suburban and rural community in the State, the placement of limitations on the use of restrictive zoning in the suburbsthe implied purpose of the Comprehensive Permit Statutewould be unnecessary.149
The requirement that a developer of land or a petitioner for an adjudicative permit set aside land, money, or things is a traditional and common practice.150 The validity of municipal exactions of land, money, or things, as required by legislation and adjudicative per[*PG548]mits, is well settled.151 It should be no surprise, therefore, that cities and towns seeking to increase the number of dwelling units sold or rented at below market rates would be attracted to the time-tested practice of exactionsquid pro quosin exchange for the grant of a development permit.152
Inclusionary zoningthe method of exacting on- or off-site dwelling units or fees-in-lieu-of the exactionin exchange for subdivision approval, approval of an adjudicative permit, or a variance, is a logical tool for increasing the stock of below-market rate housing within a particular development or the community at large.153 Inclu[*PG549]sionary zoning requirements are highly effective within rapidly growing suburban and rural communities, but can be tailored to work effectively in urban areas as well.154
Inclusionary zoning has a proven track record of success and is particularly well-suited for adoption by Massachusetts cities and towns given the ad hoc adjudication that accompanies Massachusetts land use regulation. Inclusionary zoning requirements could exact affordable dwellings, lots, fees-in-lieu-of, or a combination of the three, within every new subdivision created throughout Massachusetts.
Within a plan states suburban and rural communities, inclusionary zoning can ensure that the housing element and attendant goals are met by requiring that all new developmentsresidential and non-residentialexact a percentage of dwelling units or fees-in-lieu-of dwelling units. A percentage exaction ensures that new development does not continually force the municipality below the target goal. For example, if the housing plan calls for no less than fifteen percent of the total housing stock to meet affordable criteria, an inclusionary regulation would need to ensure that no less than fifteen percent of the dwelling units within a new subdivision meet the established affordability criteria.155
Within a non-plan state, such as Massachusetts, inclusionary zoning can also be effective, albeit less so than if the city or town had a comprehensive plan linking plan elements and regulations. The inclusionary requirement would be the same as in a plan state. The options include requiring the set-aside of land on-site, set-aside of land [*PG550]off-site, payment of fees in lieu of the set-aside, or a combination of the three.156 For example, a zoning ordinance could require that every subdivision plan containing five lots or more set one lot aside for sale to a moderate-income purchaser. In the alternative, the ordinance could allow the applicant to pay the equivalent of the lot set-aside requirement157 into a fund established for the purposes of developing affordable housing.
In urban and mostly developed cities and towns, inclusionary zoning requirements could exact affordable dwellings units or fees-in-lieu-of instead of requiring the construction of dwelling units158 as redevelopment or urban infill occurs. There are numerous examples of successful inclusionary zoning programs in the nations urban centers. Although many of these programs are often referred to as linkage or impact fee regulations, the end resultrequiring the development community to pay a fair-share cost for affordable housingremains the same.159
A statute that allows the private sector to demand a waiver of all locally adopted regulations for any land usehousing, agriculture, telecommunications, or wastewater treatment plantsis doomed to fail. That failure is due to the conflict between the broad grant of power from state to local governments and the States subsequent rescission of this power for specified items. The conflict does not lie with the rescission itself, as the power to rescind is not being challenged. Rather, the illogic lies with mandating that cities and towns perform certain activities or meet specified quotas without enabling the city or town to do so on a comprehensive basis. Cities and towns face numerous and inextricably linked challenges, providing affordable housing is but one of them.
The Massachusetts Comprehensive Permit Statute, 40B, must be repealed or reformed.160 Some aspects of the comprehensive permit statute could be left as is, if the locus that is subject to the application was identified in the city or towns comprehensive plan as a good candidate for an affordable housing development and was required to receive municipal approval before, rather than after, the issuance of financial support from a state or federal subsidizing agency. Similarly, the comprehensive permit process could be successfully used where local government approval is a condition precedent to the award of financial assistance or the issuance of a permit.161 Otherwise, the State must establish mandatory planning and consistency requirements, including the adoption of a housing element and the production of a specified percentage of low- and moderate-income housing. Cities and towns should be allowed to adopt mandatory inclusionary housing regulations, impact fees, and development agreements as they seek to accomplish the housing and other elements of their comprehensive plans.
[*PG552] In summary, a solution to the affordable housing crisis in Massachusetts requires the following:
First, Massachusetts must establish mandatory planning and regulatory consistency requirements162 similar to those adopted in California163 and Rhode Island.164
Second, it must articulate a statewide housing plan. The default plan in place is the requirement that every city or town have ten percent of its housing stock subsidized. This plan, as thirty-four years of history has shown, has failed. The State needs a true plan, not an arbitrarily arrived at quota.
Third, cities and towns should be given a time frame within which measurable progress toward achieving the state, regional, or municipal housing goals can be met. This time frame should be established as part of the housing element165 within the comprehensive plan.
[*PG553] Fourth, municipalities must be provided with appropriate enabling authority to exact impact fees, adopt mandatory inclusionary zoning regulations, and enter into development agreements in the fulfillment of their housing and other planning goals.166
Finally, if municipalities fail to achieve the mandated goals as established by the statewide plan and/or the goals established by the local comprehensive plan, then, and only then, should there be an option for abdication of local zoning regulations or appeals to an administrative agency with the power to reverse the local presumption of validity.