You asked us to summarize bills affecting the affordable housing land use appeals procedure that were introduced during the 1997, 1998, and 1999 legislative sessions.

SUMMARY

Legislators introduced at least 63 bills during the 1997, 1998, and 1999 sessions to amend or repeal the affordable housing land use appeals procedure, but enacted only two (PA 99-261 and SA 99-16). The procedure allows developers to appeal local decisions rejecting affordable housing projects to Superior Court. It differs from the conventional appeals procedure in three respects.

1. Developers can use the affordable housing land use appeals procedure only in towns with little or no affordable housing.

2. They must show that the project will contain affordable units.

3. Towns must defend their decisions regarding the project (i.e., bear the burden of proof).

Developers can use the procedure only in towns where less than 10% of the housing is affordable to low- and moderate-income people. The law defines this type of housing as units assisted with government funds, such as rent subsidized apartments and elderly public housing projects, and privately owned housing whose sale or rental is restricted by deed to low- and moderate-income people at prices they can afford. The law specifies a standard for determining this.

Table 1 shows the number of bills and amendments introduced during the period affecting different aspects of the procedure. Some changed more than one aspect, which explains why the table's total number of bills and amendments is greater than 63.

As the table shows, many would have exempted more towns from the procedure by allowing them to count more units toward their affordable housing stock (23) or lowering the threshold below 10% (6). Twelve bills dealt with the criteria a project had to meet before the developer could bring an appeal, and six shifted the burden of proof back to the developers. One bill substituted a special appeals board situated in the Department of Economic and Community Development (DECD) for the Superior Court.

Table 1: 1997-1999 Bills and Amendments Affecting Different Aspects of the Affordable Housing Land Use Appeals Procedure

	Number of Bills & Amendments Per Legislative Session
Aspect	1997	1998	1999	Total
Criteria for counting affordable units	9	7	7	23
Affordable housing stock threshold requirement	3	0	3	6
Affordable housing project criteria	5	3	4	12
Local process	0	1	2	3
Burden of proof	2	1	3	6
Court procedure	1	0	3	4
Moratoria on using the procedure	2	2	3	7
Evaluating the procedure	1	0	5	6
Repealing the procedure	3	0	3	6
Appeals Board	0	1	0	1
Total	26	15	33	74

COUNTING AFFORDABLE UNITS

Current Requirement

Developers can use the procedure only in a town where less than 10% of the total units are affordable to low- and moderate-income people. DECD annually tallies the number of affordable units in each town by counting those units that have been assisted with government funds and those that are subject to deeds restricting their sale or rental to prices that low- and moderate-income people can afford. These people earn 80% or less of the area median income, and they can afford a unit if it costs them no more than 30% of their income.

Expanding the Definition of Affordable Units

As noted above, a ratio determines if a developer can use the procedure in a specific town. The ratio is the relationship between the town's affordable units (i.e., the numerator) and its total housing stock (i.e., the denominator).

Some bills tried to make it easier for towns to reach the 10% threshold by counting more types of units as affordable (i.e., by increasing the numerator) (Attachment 1). HB 5343 (1999), required DECD to include privately owned, deed-restricted units if they were affordable to low- and moderate-income people. SB 821 (1997) took the same tack, but specifically included accessory apartments. An amendment to sHB 5236 (1998) required DECD to include any unit that was developed without government funds by a nonprofit organization.

HB 6462 (1997) took a different approach. It narrowed the definition of affordable housing to include only one- and two-family rental units that their landlords claim are affordable to low-and moderate-income people. In doing so, it would have excluded single family homes purchased with Connecticut Housing Finance Authority mortgages and state and federally funded elderly and multifamily projects.

Freezing or Narrowing the Base

Other bills allowed towns to reach the 10% threshold by freezing or narrowing the total number of housing units (Attachment 2). Regulations require DECD to calculate the base by annually adding the total number of units for which the town issued building permits to the total number of units reported in the last 10-year federal census. Both totals include affordable units. As a result, a town that does not meet the 10% threshold must authorize more affordable units than non-affordable ones or lose non affordable ones.

HB 6219 (1999) fixed the base at the total number of units reported in the last census without adding newly authorized units. An amendment to sHB 5455 (1998) took a similar approach. The underlying bill required DECD to exclude the market rate units in a project developed under the procedure when tallying the town's total units. In doing so, it allowed the town's share of affordable units to grow at a faster rate than the share of all other units.

Altering the Base

HB 6470 (1997) (see Attachment 3) combined many of the changes described above. It fixed the base, standardized the way DECD counts units, excluded newly developed affordable units from the base, and required group homes and other special needs housing to be added to the affordable housing total.

THRESHOLD REQUIREMENTS

As stated above, developers can use the procedure only in those towns where less than 10% of the units are affordable to low- and moderate-income people. In 1999, developers could use the procedure in 136 towns (see Attachment 4). Many bills sought to reduce the threshold, thus reducing the number of towns subject to the procedure (see Attachment 5).

Two bills reduced the threshold from 10% to 7% or 5%, respectively. HB 6461 (1997) kept the threshold at 10%, but exempted towns if at least 5% of their housing was affordable and met the following conditions:

1. the town has a plan to develop more affordable units,

2. it recently created affordable units at a reasonable rate for its size, and

3. the town can show that it is seriously trying to attract more affordable housing.

Two bills replaced the 10% threshold with several intermediate thresholds. HB 6470 (1997) allowed developers to use the procedure to appeal decisions rejecting proposed zone or density changes if less than 5% of the town's housing stock was affordable. They could not use the procedure if between 5% and 7% of the town's housing stock was affordable. But they could increase the density if it did not change the zone.

If the share of affordable units was between 7% and 10% of the town's housing stock, the bill required developers to comply with height, bulk, and side yard requirements. But it is not clear if this provision allowed them to increase the density as long as the project complied with these requirements.

HB 5159 (1999) allowed developers to use the procedures based on all towns achieving specific thresholds. It allowed developers to use the procedure only in towns where less than 3% of the units were affordable. It then raised the threshold to 5% only when all of the towns reached the 3% threshold. It raised the threshold to 7% and then to 9% when all of the towns reached the 5% and 7% thresholds, respectively.

SB 901 (1999) changed the basis for the threshold from the share of affordable units to the share of land that was developed and allowed developers to use the procedure only in towns where less than 90% of the land was developed.

AFFORDABLE HOUSING PROJECT CRITERIA

Current Requirement

As noted above, the procedure is available only in towns below the 10% threshold. But proposed projects must meet certain criteria before developers can actually use the procedure. They can automatically use it if a government agency is funding the project (presumably because these agencies only fund low- and moderate-income housing).

If the funding comes from private sources, developers must show that they intend to make at least 25% of the units affordable to people who earn 80% or less of the area or the state median income, whichever is less, for 30 years under a covenant or deed restriction. To meet this test, the units must cost these people no more than 30% of their income.

PA 99-361 (sHB 6834) requires developers receiving private funding to set aside some of the affordable units for people at the lower end of the income scale. It requires them to make at least 10% of the total units in a project affordable to very low-income people (i.e., people earning less than 60% of the area or the state's median income, whichever is less). And they must make enough other units affordable to low- and moderate-income people to reach the minimum 25% set-aside requirement. People in this range could have incomes ranging between 60% and 80% of the area or the state's median income.

Increasing or Capping the Set-aside Requirement

Some bills increased the set-aside requirement from 25% to 30% while one increased it to 50% (see Attachment 6). sHB 5455 (1998) kept the set-aside at 25% but required developers to make a portion of the units affordable to very low-income people. (As discussed above, PA 99-361 makes this change.) An amendment to this bill raised the set-aside to 30% and correspondingly increased the portion developers had to reserve for very low-income people.

The set-aside requirement is a percentage minimum requirement, which developers can exceed and still use the procedure. Some bills changed it to a numerical cap (25 units) and prohibited developers from exceeding it if they intend to use the procedure (Attachment 7).

Determining a Unit's Affordability

As discussed above, a unit is affordable under the law if it costs low and moderate-income people no more than 30% of their income. The unit can be a rental or ownership unit. SB 888 (1997) based affordability on the average price of units participating in two housing programs (see Attachment 8). It makes rental units affordable if they rent for less than the average rent of federally subsidized units in the nearest distressed municipality. (DECD designates distressed municipalities based on poverty, unemployment, and other criteria.) Likewise, ownership units are affordable if their sales prices do not exceed the average price of homes being purchased with state downpayment assistance in the nearest distressed municipality.

Two bills based affordability on the standard specified in CGS Sec. 8-39a (see Attachment 9). But the law already does this. CGS Sec. 8-30g (a) (1) specifies that units are affordable if they sell or rent at or below prices "which will preserve the units as affordable housing as defined in section 8-39a, for persons and families whose income is less than or equal to eighty percent of the area median income or eighty percent of the state median income, whichever is less...." Under CGS Sec. 8-39a, these people can afford the unit if it costs them no more than 30% of their income.

Other Requirements Concerning Affordable Housing Projects

Other bills required projects to meet more conditions before a developer could use the procedure (see Attachment 10). HB 5454 (1998) denied developers access to the procedure if the project was proposed on a site that was part of an earlier proposal that did not include affordable housing. The developer had to wait seven years from the date the earlier proposal was made before he could access the procedure. HB 6373 (1997) prohibited developers from using the procedure if they proposed a project in an area that excluded residential uses.

LOCAL AFFORDABLE HOUSING REVIEW PROCESS

The law does not specify a special process local land use commissions must follow when acting on a proposed affordable housing project or prevent them from requesting certain documents.

sHB 5455 (1997) allowed towns to require developers seeking zone changes to provide conceptual plans showing the total number of units they intended to build and their layout. It also allowed them to require developers to submit drafts of deeds containing the covenants and restrictions they intended to impose on the affordable units.

HB 6216 (1999) allowed planning and zoning commissions to consider additional factors when acting on proposed affordable housing projects. The law does not limit the factors commissions can consider, but specifies the criteria their decisions must meet in order to defeat an affordable housing appeal.

HB 6218 (1999) allowed civic organizations and individuals to play a role in formulating affordable housing proposals, but did not specify how.

Attachment 11 contains these bills.

BURDEN OF PROOF

Current Requirements

Towns bear the burden of proof when challenged under the procedure. To defeat the challenge, the record of their decision must have enough evidence to support it. The evidence must show one of two things:

1. (a) that the decision was necessary to protect substantial public interest in health, safety, or other matters which the town may legally consider; (b) that these interests clearly outweigh the need for affordable housing; and (c) that they cannot be protected by making reasonable changes to the project or

2. the project is receiving no public assistance and is located in an industrial zone that specifically prohibits residential uses.

Shifting the Burden of Proof

Several bills shifted the burden of proof to developers (see Attachment 12). HB 6467 did this and required them to meet the same test that towns currently have to meet in order to defeat an affordable housing appeal.

Other bills addressed the criteria for meeting the burden of proof (see Attachment 13). HB 5453 (1998) required the court to consider evidence in the record showing that the town's affordable housing needs are being met. The evidence may include data showing that unsubsidized homes and apartments are selling or renting at affordable prices.

Two 1999 proposed bills allowed towns to approve homes in areas zoned for industry. HB 5930 allowed towns to approve houses for people operating farms in these zones. (The law does not prevent towns from changing the zones to residential or allowing homes under a special permit.) HB 5931 likewise allowed towns to approve single family homes on individual lots in industrial zones.

COURT PROCEDURE

Current Requirements

The law requires the chief court administrator to assign affordable housing appeals to a small number of judges so that the court can develop a consistent body of expertise.

Assigning Judges

PA 99-261 (sHB 6834) narrows the requirement for assigning judges to hear affordable housing appeals (see Attachment 14). It requires the chief court administrator to assign the appeals to judges sitting in different geographic areas. And it requires these judges to hear the pretrial motions on the appeals. They must also hear those appeals that arise within their respective judicial districts, unless the chief court administrator requires otherwise.

Other Issues

HB 5219 (1997) and HB 5932 (1998) required developers to pay the town's cost of defending against an affordable housing appeal if the court upheld the town's decision. HB 6884 (1999) required greater public input during the appeals process. Attachment 15 contains these three bills.

MORATORIA

Current Requirement

Under the law, towns qualify for a one-time, one-year moratorium on affordable housing appeals if they complete a housing project under the Connecticut Housing Partnership Program or the Regional Fair Housing Compact. These programs offer incentives to towns that voluntarily promote affordable housing projects or address regional housing needs. A project completed under these programs must equal at least 1% of the town's housing stock, and the town must continue to participate in the programs after completing the project. DECD must certify the project's completion and publish a notice to that effect in the Connecticut Law Journal.

Broadening the Conditions for Obtaining a Moratorium and Extending the Moratorium Period

sHB 5455 (1998) allowed towns to obtain a moratorium if they completed an affordable housing project under any program or circumstance as long as they actively use their zoning regulations to promote housing choice and economic diversity throughout the town. It also allowed the town to obtain subsequent moratoria. A project still had to create affordable units equal to 1% of the town's housing stock, and DECD still had to certify the project's completion.

A proposed amendment to this bill granted towns a two-year moratorium after a developer completed such a project. The amendment dropped the requirement that towns had to actively use their zoning regulations to promote housing choice and opportunity.

HB 6470 extended the moratorium period to three years after a developer completed a qualifying project.

Attachment 16 contains these bills and the amendment.

Limiting the Conditions for Obtaining a Moratorium

HB 6464 (1997) and HB 5161 (1999) both granted three-year moratoria to towns with fewer than 35,000 people after a developer completed an affordable housing project with at least 150 units. HB 6451 (1999) imposed a one-year moratorium on a parcel that was the subject of an appeal under the procedure. Presumably, the moratorium would apply if the court rejected the appeal.

Instead of extending the moratorium period, HB 6449 (1999) eliminated it. Attachment 17 contains these bills.

EVALUATION THE PROCEDURE

At least six bills created task forces or blue ribbon commissions to evaluate the procedure and recommend appropriate changes (Attachment 18). sHB 6916 (SA 99-16) created the current commission.

REPEALING THE PROCEDURE

Attachment 19 contains six bills that repealed the procedure.

HOUSING APPEALS BOARD

HB 5571 (1998) created a three-member board to hear affordable housing appeals in place of the Superior Court, but retained the procedure and the requirements governing the appeals process (Attachment 20). The governor had to appoint the board, subject to the legislature's approval. The members served six-year terms. The bill specified other requirements governing the board's appointment and operations.

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