You asked (1) for descriptions of Massachusetts and Illinois laws that attempt to promote affordable housing development and (2) what a Massachusetts report says about the effect of affordable housing and accompanying families (e. g. , services needed for children) on towns. You also asked for any studies linking lack of affordable housing to poor student performance and traffic congestion, which will be provided in a separate report.

SUMMARY

A 2004 Massachusetts law provides grants to municipalities for adopting special zoning districts that incorporate affordable housing as part of “smart growth” development.

A 2004 Illinois law requires towns that do not have least 10% of their housing units defined as affordable to develop an affordable housing plan, which must describe how the towns plan to increase the number of affordable units, among other things. Towns with at least 10% affordable housing are exempt from the law’s requirements.

An August 2003 report completed for the Citizens’ Housing and Planning Association (CHAPA) in Massachusetts, entitled, “Housing the Commonwealth’s School-Age Children–the Implications of Multi-Family Housing Development for Municipal and School Expenditures,” found that, in most instances, multi-family developments built in Massachusetts since 1990 did not significantly contribute to the rise in school enrollments that occurred across the state.

EFFORTS IN MASSACHUSETTS AND ILLINOIS

Massachusetts

In an effort to expand the supply of housing in Massachusetts, the state's legislature adopted Chapter 40R in 2004, which provides municipalities with grants for adopting special zoning districts and developing affordable housing.

The law’s purpose is to encourage smart growth and increase affordable housing production in the state and is administered by the Department of Housing and Community Development (DHCD). The law defines “smart growth” as:

a development principle that emphasizes mixing land uses, increases the availability of affordable housing by creating a range of housing opportunities in neighborhoods, takes advantage of compact design, fosters distinctive and attractive communities, preserves open space, farmland, natural beauty and critical environmental areas, strengthens existing communities, provides a variety of transportation choices, makes development decisions predictable, fair and cost effective and encourages community and stakeholder collaboration in development decisions (Mass. Gen. Laws 40R Sec. 1).

Under the law, municipalities can choose to create special smart-growth zoning districts that are (1) near transit stations; (2) areas of concentrated development, including city and town centers; or (3) vacant retail and commercial sites suitable for mixed-use projects (i. e. , affordable housing and businesses). The municipality must apply to the DHCD for approval of its smart growth district and must include a comprehensive plan outlining the housing it plans to build in the district to be eligible for grants. The law requires that at least 20% of the total residential units built in the districts are affordable.

When DHCD approves a smart-growth district, a municipality becomes eligible for incentive payments based on the housing it plans to build there. Payments range from $ 10,000 for 20 units or less to $ 600,000 for 501 or more units. If no construction begins in the district within three years of receipt of the incentive payment, the municipality must reimburse the state.

Municipalities with approved smart-growth districts (1) receive bonus payments of $ 3,000 for each unit of new housing receiving a building permit, and (2) become eligible for favorable treatment when state discretionary funding is disbursed, according to the Federal Home Loan Bank of Boston (FHLB) website. FHLB is cooperatively owned by more than 470 New England financial institutions and provides access to wholesale credit for members and other qualified borrowers, according to its website.

We have attached a copy of the law and the DHCD regulations (attachment 1).

Illinois

A 2004 Illinois law requires towns that do not have at least 10% of their year-round housing units designated as affordable to develop an affordable housing plan by April 1, 2005. The towns’ plans must:

1. state the total number of affordable housing units that are necessary to exempt the local government from the law’s requirements;

2. identify lands that are most appropriate for the construction of affordable housing and existing structures most appropriate for conversion to, or rehabilitation for, affordable housing;

3. include incentives that local governments may provide for the purpose of attracting affordable housing to their jurisdiction; and

4. include goals of (a) a minimum of 15% of all new development or redevelopment within the town that would be defined as affordable housing under the law, (b) a minimum 3% increase in the overall affordable housing within its jurisdiction, or (c) a minimum of a total of 10% affordable housing within its jurisdiction.

Under the law, within 60 days after the adoption of an affordable housing plan or revisions to its affordable housing plan, the local government must submit a copy of the plan to the Illinois Housing Development Authority.

The law makes towns that have not reached the 10% threshold subject to an affordable housing appeal procedure as of January 1, 2006. An affordable housing developer whose application a town denied, or approved with conditions that the developer considers to hinder his ability to develop affordable housing, may appeal to the State Housing Appeals Board. The law does not specify what the appeals board must do in the short run, other than keeping the information on file. However, by January 1, 2009, a developer who files an appeal may request the board render a decision on the matter, but the burden of proof to show the town acted unfairly is on him (Illinois PA 93-595).

Illinois’ procedure is similar to Connecticut’s affordable housing land use appeals procedure (CGS § 8-30g), except Connecticut does not require that towns under the 10% threshold develop an affordable housing plan and Connecticut law places the burden of proof on the town in such appeals cases. Connecticut’s affordable housing land use appeals procedure is a set of rules developers and courts must follow when a developer sues a municipality for rejecting a proposed housing project that would include a certain amount of affordable units. Under the procedure, municipalities must convince the court that they had to reject a developer’s project for three particular reasons or because it would place housing in an area zoned industrial only. Normally, as in Illinois, developers in land use appeals bear this burden. In both states, municipalities that meet this threshold are exempt from the appeal procedure.

We have attached a copy of the law (attachment 2).

CHAPA REPORT

The August 2003 report prepared for CHAPA found in most instances that multi-family developments built in Massachusetts since 1990 did not significantly contribute to the rise in school enrollments that occurred in many communities. The report states, “[n]ew single family homes and in some towns, a high rate of turnover in older single family homes, generated a majority of the state’s school enrollment growth. ” The

findings are based on case studies of multi-family housing in 41 cities and towns, most of which are located in eastern and central Massachusetts, according to the report. Connery Associates and Community Opportunities Group, Inc. , both Massachusetts-based planning and development firms, prepared the report.

CHAPA is a Massachusetts group representing various housing interests, including non-profit and for-profit developers, homeowners, tenants, bankers, and government officials and its mission is to encourage the production and preservation of affordable housing.

The report notes that fiscal impacts of new multi-family housing clearly hinge on whether developments include units that are large enough for family occupancy. However, a majority of newer developments in the case study tended to be “child proof,” that is, not big enough for families. Thus, it found, “[o]lder multi-family developments with apartments sized for family occupancy continue to house many children, in part because they offer one of the few choices available to lower-income families. ”

We have attached a copy of the report (attachment 3).

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