2013 Housing Score: Builders 2, Towns 0

Today I welcome guest contributor Peter Feuerbach of Rubin and Rudman, LLP.  Peter penned an article recently on the state of multi-family construction in Massachusetts.  Thanks Peter!

The stars continue to align for builders in 2013. As if low interest rates, pent-up demand, and the Governor’s plan for 10,000 new housing units per year were not enough of a tailwind, along comes the Supreme Judicial Court and issues not one but two decisions approving affordable housing developments.

The recent SJC decisions continue to recognize the importance of constructing affordable housing (rental or ownership) under the “comprehensive permit” law, Chapter 40B. The decisions also remind local boards to not deny a project based on unreasonable concerns, because improper reasons will be overturned.

1.  On January 8, the SJC ruled that the Town of Lunenburg had improperly denied a 146-unit condominium project. The SJC rejected the Town’s argument that the project would be inconsistent with the Town’s master plan, because the Town had not actually created any affordable units under that plan.

The SJC also held that the Town’s affordable housing stock for purposes of Chapter 40B consists of subsidized units with long-term affordability ensured by a deed restriction. Thus, low-cost market rate housing does not qualify as “affordable housing” under Chapter 40B.

2.  On January 14, the SJC held that the Town of Sunderland had improperly denied a 150-unit rental project. It was wrong for the Town to deny the project on the basis that the fire chief had alleged fire safety concerns (i.e., the Town did not have a ladder truck or a garage to store it in). The SJC determined that those concerns were not valid where the 3-story buildings would have an extensive, state-of-the-art sprinkler system, the Town had mutual aid from a neighboring town that owned a ladder truck, and the Town’s zoning bylaw allowed taller buildings than those proposed by the applicant.

Importantly, the SJC also ruled that the alleged “fiscal impact” of the project was not a lawful basis for denial. The Town had argued that the project would increase the school age population and necessitate an increase in the school budget; require hiring additional police officers and firefighters; and, create additional maintenance expenses for roads, sidewalks and drainage, all in excess of the tax revenue generated by the project.

The SJC rejected the Town’s argument, holding that a fiscal impact analysis is not permitted under Chapter 40B. The one limited exception is if the alleged inadequate municipal services were due solely to unusual topographical, environmental or other physical circumstances of the project, which did not exist in this case.

As a final exclamation point, the SJC ruled that the Town had improperly charged the applicant a $10,000 “filing fee”, ostensibly to pay for the Town’s attorney for general legal representation. Such burdensome “application fees” were prohibited under the affordable housing regulations.

3.  The affordable housing regulations of the Department of Housing and Community Development (DHCD) and the Housing Appeals Committee (HAC) support proactive municipal efforts to create housing (e.g., adoption of “smart growth” zoning overlay districts to create new housing “by right” under Chapter 40R, commitment of Community Preservation Act (CPA) funds to construct affordable housing, etc.). However, as the SJC recently indicated, the local efforts and plans will not be credited if they do not result in actual construction of affordable units.

In December 2012, I circulated a memo on the Governor’s housing plan and “5 Tips for Real Estate Development”. Please contact me if you would like a copy.

Please contact me if you or a colleague has any questions regarding comprehensive permits, Chapter 40B, real estate development, or construction issues.

I also post this “Alert” on my BLOG masslegalalerts.blogspot.com, which you can use if you want to comment on this Alert or other subjects on which I have written.

Peter Feuerbach, Esquire
617-330-7136

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Cute Video About a Parking Lot (Really)

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National Housing Market Update

I sit on the Board for the Builders Association of Greater Boston (BAGB), and have been a member of the Association for a number of years.  It’s interesting to learn from my fellow associates about the local home building industry, and also to hob knob with the local builders.  But as a member of BAGB, I am also automatically a member of the National Association of Home Builders, and I receive the monthly glossy magazine that they publish, appropriately titled “Builder”.   Aside from technical articles about HERS ratings and advances in plumbing, the magazine gives me a broader view of the health of the industry nationwide.

Here are some facts, figures and updates from the June edition of “Builder”.

  • In 2005, there were more than 73,000 active building companies in the U.S.  In 2011 there were fewer than 34,000, a decline of over 50%.  The average number of closings per year declined from 18 per builder in 2005 to 9 per builder in 2011.
  • Not surprisingly, the large production home builders such as Lennar, Hovanian, Toll Brothers and D.R. Horton take up the lion’s share of the largest markets.  These builders are not quite as active in New England as in southern and western markets.  For instance, the top 5 builders in the Houston market had 33% of the closings in 2011, and the top 5 builders in the Washington DC area market had 41.8% of the closings, while the top 5 builders in the Boston area market had only 25% of the closings.  Our market is dominated by smaller, local builders.
  • Despite the health of our local economy, eastern MA and southern NH (considered as one housing market), ranks 49 of 50 in a recent ranking of most active home building markets compiled by Hanley Wood Market Intelligence (#50 is Colorado Springs if you were wondering).  Our market had 1,436 closings in 2011.  The number 1 through 5 markets were:
  1. Houston/Sugar Land/Baytown, TX (17,158 closings)
  2. Dallas/Fort Worth/Arlington, TX (12,840 closings)
  3. New York/Northern New Jersey/Long Island (10,391 closings)
  4. Washington D.C./Arlington/Alexandria/MD/W.Va (9,270 closings)
  5. Phoenix/Mesa/Scottsdale, AZ (7,710 closings)
  • The very factor that keeps the large companies out of New England; the scarcity of large tracts of developable land and the onerous nature of our permitting environment, is the thing that has led to retention of housing values in our neighborhoods (my comment).
  • According to NAHB Chief Economist David Crowe, home remodeling has shown a bigger bounce back than new home construction.  Owners are motivated to improve their properties for their own use (as opposed to preparing for a sale), with kitchens and baths as the most popular upgrades.  Whole house renovations and large additions however, are still elusive.  This may be good news for residential landscape architects, for as soon as homeowners get through their backlog of interior renovations, outdoor living environments will surely get upgraded as well.  Anecdotally, I am seeing more inquiries for small scale landscape renovations.

 

The NAHB website has a link to a blog that is a great source of information for those who want to get into the weeds of the national housing market.

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James Taylor and the Lumber Truck

Last week we treated ourselves to a James Taylor concert at Tanglewood.  Although we have been to Tanglewood many times for classical performances, and despite my huge fandom of Sweet Baby James, I had never been to this now famous yearly event.  The place was filled like I had never seen it.  Folks camped out end to end, lawn to lawn.  It was a real festival atmosphere, and it took us a full hour just to exit the parking lot.

During the worst of the recession, business was pretty tough for us, and I would not have dreamed of spending $75 for three of us on such a luxury as going to see a concert.  I take it as a sign of economic recovery that 30,000 or so (my guess) would drive to Lenox for the evening (times three nights!) and shell out the dough to be crammed onto that lawn for several hours.  By the way, the concert was great except that too many people talked through the whole thing.

The concert event is anecdotal evidence of course, of an economic recovery.  We constantly search the news for additional signs of recovery, picking apart the data.  We are optimists in my family, choosing to ignore the naysayers and tell ourselves how much things are improving.

Here is another anecdotal story.  I remember in the depths, sometime in 2009 I think, I attended a networking dinner at the Builders Association of Greater Boston.  At the time, this was a group of folks mostly crying in their beers every time we go together, but it was therapeutic, you know?  Someone then excitedly informed our small group that on their way over, they had witnessed a truck driving down the Massachusetts Turnpike.  And can you imagine, it was filled with lumber!  It was like seeing a ghost.

Such was the state of the economy three and four years ago.  Since I am in a design and planning profession and at the leading edge of the economic cycle, my business started to tank in 2007 with the collapse of the condo market.  It really turned around for good in 2011, with many new design contracts coming in toward the end of the year.  Now I drive down the major roads and view one construction site after another; builders and developers racing to get their projects in the ground to beat the competition to market.  Retail, rental housing, subdivisions, or office space, there is plenty of activity.

Yet reports of a dead economy are still coming from my colleagues in the central part of the state where little is happening, so the news is mixed.  And I certainly am aware of pockets of despair throughout the rest of the country.  As I was driving toward Boston on the Pike the morning after the JT concert, I saw a truck filled with lumber, and my optimism was rekindled.

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Musings on the Interstate Highway System

We often visit downtown Boston and act like tourists.  Our usual routine is to drive downtown, park on one of the piers in the North End, eat Italian food and then stroll through Christopher Columbus Park, view the seals at the aquarium, circle through Quincy Marketplace, and then back to the car.  The place is packed.  With the removal of the elevated and maligned Central Artery, the sun now shines on large swaths of downtown.  People congregate in the new parks, ride the (temporary) carousel, play in the fountains and generally move easily across the lanes of slow traffic on the new surface artery.  It has become a place for children.  This begs the question, what if the elevated highway through Boston was never built?

I highly recommend the recently released book “The Big Roads” by Earl Swift.  Mr. Swift takes us on a journey through the history of the interstate highway system, mostly focusing on the people and the process of its development traced back to the invention of the auto.  The idea of a national system of highways (or is it a system of national highways?) long predates the Eisenhower administration.

The author takes a balanced and objective approach to his analysis of the highway system’s impacts on the landscape and our social fabric.  While smooth, fast and well maintained limited access highways clearly provided the economic engine that fueled the growth of the U.S. after World War II, they also gave us sprawl and edge cities, dramatically increased air pollution, and tore through city centers, displacing thousands of mostly lower class folks who did not have the power or money to fight city hall.

To me, this is the most interesting part of the story as it relates to land development.  The engineers charged with designing the system decided to route highways into and through city centers.  As construction progressed into the 1960’s, public opposition to this strategy grew as did so many other aspects of social activism of that decade.  We take it for granted today that great public works projects will be reviewed in a reasonably open public process, but the role of the highway engineer used to be all powerful in deciding routing and design.  With the advent of the environmental movement and the anti-war movement, the country began to question our own blind faith in government decision making.  As a result, the engineers for the first time had to hold public hearings to vet plans, and then they had to work alongside planners, landscape architects, urban designers and grass roots community activists to achieve consensus.

The result is a blessing and a curse for the designers of today.  While the idea of being able to design a public space without input from the local community is attractive, I readily admit that public comment and review has resulted in the betterment of certain projects I have been involved in.  That’s democracy at its finest.  If you only want to express yourself artistically in a vacuum, become an artist, not an architect.  Even Frank Gehry has to go though the Zoning Board of Appeals.  But I digress.

The removal and burial of the I-93 Central Artery, otherwise known as the “Big Dig”, through downtown Boston created a once in a lifetime opportunity for healing the fabric of the city, but the highway is still there (at great cost).   At the end of the book we are left to wonder if, in the 1950’s, the powers that be had decided to terminate the route at the north and south ends of downtown, what the social, economic and political impacts would have been for downtown and the inner suburbs.   San Fransisco is currently finding out.  After the Loma Prieta quake of ’89, they tore down the part of the Embarcadero Freeway that cut off downtown from the waterfront.

What would the impact have been on traffic flow throughout the Boston region?  Would 128, our inner loop highway, be a continuous parking lot, widened to 6 lanes in each direction (sounds like L.A.)?  Would the mass transit system be twice its current size, with fixed rail reaching far into the suburbs?  With no central artery highway, would downtown Boston have died in the 1960’s or thrived?

A more pertinent question for today is, can we mend the fabric of city centers by removing these intra-city highways, and what would the impact be on the movement of people and goods?  The creation of the Rose Kennedy Greenway over the buried artery is the beginning of a decades’ long experiment in city building.  I am excited to be living near that laboratory so I can observe the results.

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A Whale of a Good Time; Building a Natural Playground in Methuen

We have been working on a fun project in Methuen this year.  The Greater Lawrence Community Action Council (GLCAC) has built a new pre-school facility under the Head Start program.  Radner Design was called into action to design a ‘natural’ playground.  The natural playground movement has been around for a few years.  Conceptually, the idea is to limit the number of expensive factory manufactured play items and allow kids to dig in the dirt, get wet, roll down hills, play in sand and generally make a mess while using their imaginations and building strength.

Here is an early site plan for the play ground.  Features include a trike path, a hill for climbing up and rolling down, an old fashioned water pump that discharges to a stream, a rope swing that leads to an island, slides and climbing rocks, and a tunnel made of pussy willow whips weaved together.

Site Plan for a Natural Playground

Anne D’Errico, the Head Start Director, challenged me to ‘find my inner child’.  So I dug deep.  The genesis of the featured climbing piece was from my own childhood.  An undeveloped park near my house had this huge rock sticking out of the ground.  About 20’ long, 6’ wide and 4’ high (or so I remember), we called it the whale rock due to its shape.  Great for climbing right?  I wanted to replicate that rock for the kids.  The GLCAC hired Joe Montroy, a sculptor from New Hampshire to create his own version of the whale rock.

He came up with the idea of casting a solid aluminum piece of art.  Art you can climb on!  Here is a You Tube video showing the aluminum pour that happened just last week.  I am particularly happy that the artist utilized reclaimed aluminum; old engine parts and window frames, from a scrap yard.  I guess that makes it a ‘green’ whale.  Thanks to Max Thorpe who shot and edited this piece.

August 14, 2012 update:  here are some pictures of the completed project;

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Springfield Reborn?

For the past year, I have been working on an interesting series of projects in Springfield, MA.  Up until then, my only exposure to Springfield had been driving through on I-93, past the Basketball Hall of Fame on my way to Vermont, or whisking through on my way to Six Flags or the Big E. 

I knew something about the city.  Located astride the Connecticut River, it the largest metropolitan area in Western Massachusetts.  It was a former major manufacturing center, famously the home of Smith and Wesson and other arms and munitions producers.  Basketball was invented there and Dr. Seuss was born there.  Aside from those, I was ignorant.

Getting off the highway was eye-opening.  My project involved renovation of multiple apartment buildings in the City’s eastern neighborhood in proximity to the historic Springfield Armory.  Upon first arriving at the scene, I viewed a series of 4 and 5 story brick apartment blocks, built in the early 20th century to house factory workers.  If you squint, you would think “hip, urban neighborhood”.  The buildings are built close to the street line, forming a pleasing, well proportioned streetscape and sense of enclosure.  If they were in Boston, these apartments might be in the Fenway or Jamaican Plain and command $2-3k per month in rent.  Open your eyes wider and walk around a bit (but not alone, of course), and see a community ravaged by crime, drugs and despair.  The decay is stunning.  My client is the partnership of a developer and general contractor who buys, renovates, holds and manages these buildings, many of them already condemned by the City. 

Federal Street - Springfield, MA

Deteriorated Site Conditions

But now a developer is willing to invest in these neighborhoods.  Through mostly government financing but executed by private companies, resources are being brought to the neighborhood.  I think it is a terrific example of a public private partnership. 

Partial Site Plan - City View Commons

As I explore the area a bit further, I discover Forest Park, an historic neighborhood of fabulous Victorian homes within walking distance of downtown and adjacent to a huge city park.  I envision the captains of industry building these homes in the turn of the century, actively engaged in civic activities and supporting the cultural development of the city.  The neighborhood was even laid out in part by Frederick Law Olmstead, patron saint of Landscape Architecture. 

While some of the neighborhood is still in good condition, many of the houses are boarded up, abandoned and dilapidated.  Again, spin me around and drop me here without knowing I was in Springfield, and if I squint, I would swear I was in Chestnut Hill!  How does a city go from such prosper to such despair?  Obviously the decline in manufacturing has a great deal to do with it, followed by the flight of the middle class to the outer suburbs. 

While significant investment has come to the business district of the city, it seems to me that the neighborhoods close in to the downtown have been neglected.  Will the ongoing revitalization of downtown bring the middle class back to inner ring communities and foment a renaissance? 

The Urban Land Institute got involved in Springfield in 2006.  That year they landed in town and had a 5 day Charette to provide a vision and guidance for the City and neighborhoods.  The ULI Chief Executive recently gave a talk in which he described opportunities for development in inner ring suburbs.  The ULI report from 2006 and the talk given by Mr. Phillips just last month coincide in their call for reinvestment in inner ring neighborhoods.  Indeed, these communities are ripe for opportunity.  Let’s hope his crystal ball is accurate, as I see incredible potential for the “City of Homes”.

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