The fate of legislation to create a new Chapter 40Y of the General Laws – the Starter Home Zoning District Act – hangs in the balance as the State Senate and House of Representatives continues to negotiate the differences between competing economic development bills (H. 5034, S. 3030) passed by each branch. Without a compromise being agreed to before the end of the year, action on the Starter Home proposal will have to await the convening of a new Legislature in 2023.
Earlier this year, Gov. Baker filed an omnibus economic development bill that contained, among other provisions, amendments to Chapter 40R and the creation of a Chapter 40Y to increase the likelihood of success of the Starter Home Program championed by the HBRAMA. Chapter 40R, the Smart Growth Zoning and Housing Production Act, was amended in 2016 to extend the law’s financial incentives to cities and towns if they adopt an overlay zoning district that permits the development of smaller homes (not exceeding 1850 sq. ft. of heated living area) on smaller lots (at a density of no less than 4 units to an acre).
The problem with the current law, however, is that those homes must be located in a so-called “smart growth” location. That is largely the reason that no “starter home districts” have been created and no ‘starter homes” have been built. The enactment of Chapter 40Y would resolve many of the problems of the current law. No longer would a starter home zoning overlay district have to be located in a “smart growth location” approved by the state. Rather, an eligible starter home zoning overlay district would be any location that a community determines is appropriate.
Further, the current requirement that 20% of the units in a starter home development be affordable to individuals and families whose incomes do not exceed 80% of Area Median Income, would be reduced to 10% of the units at 110% of AMI, thereby making the economics of such a project more workable. And by creating an entirely new statute, the existing regulations governing starter homes can be rewritten to make them less burdensome for municipalities and less costly for developers.
Chapter 40Y is a priority of the HBRAMA and it will continue to lobby for its enactment into law until the very last day of the current legislative session.