May 14, 2007 |
2007-R-0379 | |
COMPARISON OF SSB 1057 AND MASSACHUSETTS' SMART GROWTH ZONING AND HOUSING PRODUCTION ACT | ||
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By: John Rappa, Principal Analyst | ||
You asked us to compare sSB 1057, An Act Establishing a Program for Housing and Economic Growth and Massachusetts' Smart Growth Zoning and Housing Production Act (Mass. Gen. Laws ch. 40R and 40S) on which the bill was modeled.
As Table 1 shows, sSB 1057 and the Massachusetts law are very similar. Both address the way zoning regulations affect the cost and supply of housing by offering financial incentives to towns that voluntarily designate zones where developers can build more units per acre than the zoning regulations normally allow if they agree to make some of the units affordable to low- and moderate-income people.
The bill and the law offer generally the same incentives. Both provide grants for establishing zones, issuing building permits for units constructed in them, and educating the children who reside in the units. But the bill also provides planning and technical assistance grants, low-interest infrastructure loans, and rent subsidies. The bill and the law also differ with respect to the grant amounts.
As Table 2 shows, the bill and the law fund the incentives differently. sSB 1057 authorizes the quasi-public Connecticut Health and Educational Facilities Authority to issue bonds and requires the state to back them by making payments to the authority. It also appropriates General Fund revenues. In both cases, the bill specifies the amount that
may be spent for different purposes. The Massachusetts law requires the state to fund the incentives with General Fund revenue and the proceeds from the sale of state surplus property, but does not specify the amounts that may be spent for different purposes.
The bill and the law require the state to reimburse towns for some of the costs they incur to educate the children who reside in the new units. In tying these reimbursements to the production of new units, they seem to be addressing a generally held belief that towns try to control education spending through zoning, especially by reducing the number of housing units that can be built per acre and increasing the minimum required lot size.
Table 1: Development Scheme
Planning Eligible Projects | |
sSB 1057 |
Massachusetts Chapters 40R and 40S |
Incentive Housing Developments (IHDs): • Residential only or residential and compatible nonresidential uses • Mixed income: at least 20% of units affordable to low- and moderate-income people for at least 30 years |
Project: • Residential only or combination residential and nonresidential uses • In projects with more than 12 units, 20% of units must be affordable to low- and moderate-income people for at least 30 years |
Providing Technical Assistance | |
• Grants to towns for developing appropriate zoning regulations and design standards • Grants to nonprofit housing developers for developing technical capacity |
No grants |
Proposing Zones | |
Incentive Housing Zones (IHZs): • Overlay existing zone where supporting infrastructure already exists • Housing allowed as a matter of right • Minimum densities: o 6 units/acre for single-family detached o 10 units/acre for duplex or town houses o 20 units/acre for multifamily o Higher minimum may be required to increase density over underlying zone by 25% • Each zone cannot exceed 10% of town's land area; all zones combined cannot exceed 25% of that area • Reasonable design standards permitted • May encompass existing or proposed historic district • OPM approves zones and annually certifies their status |
Smart Growth Zoning Districts: • Superimposed on existing district where supporting infrastructure already exists • Housing allowed as matter of right • Minimum densities allowable densities: o 20 units/acre for multifamily o 8 units/acre for single-family detached o 12 units/acre for two- and three family dwellings • Each district cannot exceed 15% of town's land area; all districts combined cannot exceed 25% of that area • Reasonable design standards permitted • May encompass existing or proposed historic district • Department of Housing and Community Development approves districts and performs annual certifications |
Approving Zones | |
• $ 2,000 grant for each unit that can be built in zone • Town must repay grants if it repeals zone or hinders their development |
Grant based on maximum number of units that can be built in district: • $ 10,000 for up to 20 units • $ 75,000 for 21-100 units • $ 200,000 for 101-200 units • $ 350,000 for 201-500 • $ 600,000 for 501 or more units Grants must be repaid after three years if no construction has been started in the district |
Developing Zone's Infrastructure | |
Low-interest loans for developing infrastructure supporting IHZ |
No loans |
Constructing Units | |
• $ 2,000 grant to town for each IHD building permit issued • Town must repay grant if it repeals zone or hinders their development |
$ 3,000 grant to town for each building permit issued in zone |
Occupying Units | |
• 30-year subsidies for IHD units rented to low-income people |
No subsidies |
Funding Education | |
• Formula-derived annual reimbursements to towns for some of the costs they incur to educate children residing in IHDs • Town must repay reimbursement if it repeals zone or hinders their development |
• Formula-derived annual reimbursements to towns for some of the costs they incur to educate children residing in housing built in districts |
Table 2: Funding Scheme
Funding Source |
sSB 1057 |
Massachusetts Chapters 40R and 40S |
Appropriations |
$ 128 million: • $ 60 million in FY 07 surplus for grants and infrastructure loans • $ 68 million over 29 years for grants and OPM administrative costs |
Unspecified amount for education cost reimbursement grants starting in FY 08 |
Bonds |
$ 2. 330 billion in Connecticut Health and Education Authority bonds in two series: • Up to $ 355 million until FY 23 for zone adoption and building permit grants • Up to $ 2. 330 billion until FY 52 for rent subsidies and education cost reimbursements |
Not applicable |
Sale of surplus state property |
Not applicable |
Proceeds from the sale of surplus state property; amount over $ 25,000 must go into fund established for paying district adopting and building permit grants. |
JR: ts