State Imposes New Minimum Home Size Policy for Chapter 40B Projects

Hill Law has obtained an unsigned “Interagency Agreement” dated January 17, 2014 purportedly between the Department of Housing and Community Development (“DHCD”) and four other housing subsidy agencies that provide financial assistance to residential development projects permitted under the state’s “comprehensive permitting” law known as Chapter 40B. Under the so-called “Agreement,” Chapter 40B developments approved with “project eligibility letters” after March 1, 2014 must provide one 3-bedroom unit for every 10 units built.  This requirement must be enforced by the subsidizing agency through the approval of the project, and execution of the regulatory agreement that typically follows the comprehensive permit.  

The rationale for this policy is the perception held by DHCD and others that Chapter 40B developers have intentionally steered away from larger-home proposals, as a concession to municipalities that are grappling with the financial impacts associated with the population growth facilitated by the state-mandated Chapter 40B.  The conventional wisdom is that projects that contain predominantly one- or two-bedroom units are less likely to attract families with children, and that units with young families are likely to cost the municipality more in municipal services than what would be generated through property tax revenue.  This policy is not unexpected - DHCD released a comprehensive fair housing report last year that suggested that policy changes would be made to encourage the growth of more family-oriented housing.