Massachusetts SJC Rules Town Cannot Bring Independent Challenge to DHCD Calculation of Subsidized Housing Inventory

Beveridge & Diamond, P.C. - Massachusetts Environmental, Land Use, and Real Estate Alert, September 2008

The Massachusetts Supreme Judicial Court recently barred a municipality from bringing an immediate court challenge to the Department of Housing and Community Development’s (“DHCD”) calculation of the subsidized housing inventory (“SHI”) outside of the appeal procedures established by Chapter 40B.  In Hingham v. Department of Housing and Community Development, 451 Mass. 510 (2008), the Town of Hingham sought a collateral challenge to a determination by DHCD that only 25 percent of the units in an approved residential building project should be counted toward the Town’s SHI.  Specifically, the Town sought declaratory relief to increase the SHI-approved percentage of affordable housing in the Town in order to enable the local board of appeals to deny another comprehensive permit application pending at the local level. 

The SHI is a critical measure under Chapter 40B of whether a municipality has achieved the statutorily imposed goal that 10 percent of its housing stock be affordable.  Once a municipality has reached that 10 percent threshold, it may deny a comprehensive permit application “with impunity” and the Housing Appeals Committee (“HAC”) has no authority overturn that decision.  If a municipality has not achieved the 10 percent minimum, then a local board seeking to deny a comprehensive permit bears the burden of demonstrating that a valid local concern supports the denial and that such concern outweighs the regional housing need.

In this case, the Town previously approved a project which included 1,750 apartments. Were all the apartment units included in the SHI, the Town’s total inventory of affordable housing would have exceeded the 10 percent threshold.  However, DHCD had informed the Town that only 25 percent of the units counted toward the SHI.  Faced with another chapter 40B application, the Town sought a declaratory judgment that it should be entitled to count all 1,750 apartment units of the earlier project toward its SHI.  The SJC determined, however, that the Town was prematurely seeking to challenge a nonfinal administrative ruling that was not formally binding on the HAC. 

The Court noted that Chapter 40B does not provide for a separate appeal of DHCD’s calculation of the SHI.  Rather, the statute allows the party whose permit is denied the opportunity to appeal to the HAC, and the Town may participate in that appeal and challenge the SHI calculation. While the Town argued it was left with no meaningful means of challenging the SHI, the Court concluded that the Town was required to wait for the board of appeals’ denial and the applicant’s appeal before the Town could challenge the SHI calculation before the HAC.  If the HAC ruled against the Town, it would have a further right of appeal to Superior Court.  The Court explained that to conclude otherwise would chill Chapter 40B projects and lengthen the delays inherent in permitting as municipalities pursued litigation challenging the SHI calculation.

For further information, contact Brian C. Levey at blevey@bdlaw.com or Krista L. Hawley at khawley@bdlaw.com.