OLR Bill Analysis

sHB 6880

AN ACT CONCERNING THE AFFORDABLE HOUSING LAND USE APPEALS PROCEDURE.

SUMMARY

This bill makes it easier for municipalities to qualify for a four-year exemption (i.e., moratorium) from the affordable housing land use appeals procedure (“procedure”) by (1) lowering the minimum number of housing unit-equivalent (HUE) points needed for a moratorium, (2) establishing “bonus points” for certain unit types, and (3) expanding the unit types that count toward the moratorium.

Additionally, the bill changes the definition of “median income” applicable to the incentive housing zone (IHZ) statutes, conforming it to the affordable housing land use appeals procedure statutes. An IHZ is an overlay zone allowing developers to build, as a matter of right, high-density housing close to existing or planned infrastructure. By law, the Department of Housing (DOH) may make grants to municipalities that adopt, or are working to adopt, IHZ regulations (CGS 8-13m et seq.).

The bill's changes are effective only from October 1, 2017 through September 30, 2022. On October 1, 2022, the affected provisions revert to their status as of September 30, 2017.

By law, the procedure is a set of rules requiring zoning and planning commissions to defend their decisions denying affordable housing developments (see BACKGROUND) or approving them with certain conditions. In traditional zoning appeals, the developer must convince the court that the municipality acted illegally, arbitrarily, or abused its discretion by rejecting his or her proposed development. The procedure instead places the burden of proof on municipalities. A developer cannot appeal under the procedure in a municipality (1) in which DOH determines at least 10% of the housing stock is affordable or (2) that obtains a four-year moratorium.

EFFECTIVE DATE: October 1, 2017, but the definition of “median income” does not apply to IHZs that DOH approves, or approves grants for, before October 1, 2017. The bill sunsets these changes on September 30, 2022.

MORATORIA

By law, a municipality is eligible for a four-year moratorium from the procedure each time it shows it has added a certain number of affordable housing units since the last decennial census. Newly built set-aside and assisted housing developments count toward the moratorium, as do units subject to certain deed restrictions. Moratoria are not applicable to certain assisted housing development proposals.

Lower HUE Points Requirement

Under current law, a municipality is eligible for a moratorium if it shows it has added affordable housing units, measured in HUE points, equaling the greater of (1) 2% of the housing stock, as of the last census or (2) 75 HUE points. The bill retains the 2% standard but lowers, from 75 to 50, the minimum number of HUE points municipalities need to qualify for a moratorium.

Incentive Housing Development (IHD) Units

The bill allows income-restricted (“restricted”) units in an IHD to count toward a moratorium and applies existing law's schedule of base points to them (see BACKGROUND). An IHD is a residential or mixed-use development located within an IHZ and in which at least 20% of the units are restricted.

By law, IHD units must be deed-restricted for at least 30 years, which is 10 years fewer than the minimum 40 year period that units other than assisted housing developments must generally be deed restricted for to qualify for HUE points under the law. (In practice, however, most assisted housing developments are also deed restricted for at least 40 years.)

Bonus HUE Points

By law, certain rental family units in set-aside developments are eligible for bonus HUE points. The bill makes three additional categories of units eligible for bonus HUE points. Bonus points are awarded on top of the base HUE points a unit receives.

The bill establishes a quarter-point bonus for restricted family units (1) with at least three bedrooms or (2) in an IHD. Restricted elderly units receive a half-point bonus, if at least 60% of the restricted units counted toward the moratorium are family units (i.e., elderly units do not receive a half-point bonus if they make up more than 40% of the restricted units counted toward the moratorium). Table 1 shows the bonus HUE points under current law and the bill.

Table 1: HUE Bonus Points

Unit Type

Bonus HUE Points (per unit)

Current Law

Bill

Owned or rented restricted family units in an IHD

No bonus

0.25 bonus

Owned or rented restricted family units with at least 3 bedrooms

No bonus

0.25 bonus

Owned or rented restricted elderly units, if at least 60% of restricted units used toward the moratorium are family units

No bonus

0.50 bonus

Rental family units in a set-aside development, if the developer applied for local approval before 07/16/1995

Bonus equal to 22% of the total points awarded to such development

No change

IHZ: DEFINITION OF MEDIAN INCOME

The bill conforms the definition of “median income” applicable to IHDs to the definition applicable to the affordable housing land use appeals procedure statutes. Under current law, restricted units in an IHD must be affordable to individuals earning 80% or less than the area median income (AMI). The bill instead requires restricted units in an IHD to be affordable to individuals earning 80% or less of the AMI or state median income (SMI), whichever is less. The new definition of “median income” does not apply to IHDs in IHZs that DOH approves, or approves grants for, before October 1, 2017.

BACKGROUND

Affordable Housing Developments

Under the procedure, “affordable housing development” means a housing development that is (1) assisted housing or (2) a set-aside development. “Assisted housing” means housing that receives government assistance to construct or rehabilitate low- and moderate- income housing or housing occupied by individuals receiving rental assistance (e.g., Section 8). A “set-aside development” is a development in which, for at least 40 years after initial occupancy, at least (1) 15% of the units are deed restricted to households earning 60% or less of the AMI or SMI, whichever is less and (2) 15% of the units are deed restricted to households earning 80% or less of the AMI or SMI, whichever is less.

Applicability of the Procedure

A municipality is subject to the procedure if it has not obtained a moratorium and less than 10% of its housing stock:

1. is assisted housing,

2. is currently financed by Connecticut Housing Finance Authority mortgages,

3. is subject to deeds and conditions restricting the sale or rental to low- and moderate-income people, or

4. consists of mobile homes or accessory apartments subject to similar deed restrictions.

Schedule of Base HUE Points

Base HUE points are weighted based on unit affordability, population served, and ownership type. Table 2 shows the types of units that count toward a moratorium and their HUE point value, as established in CGS 8-30g.

Table 2: Schedule of Base HUE Points

Unit Type

HUE Point Value (per unit)

Owned or rented market-rate unit in a set-aside development

0.25

Owned or rented elderly unit restricted to households earning no more than 80% of the median income

0.50

Owned family unit restricted to households earning no more than:

80% of median income

1.00

60% of median income

1.50

40% of median income

2.00

Rented family unit restricted to households earning no more than:

80% of median income

1.50

60% of median income

2.00

40% of median income

2.50

Related Bills

sSB 535, favorably reported by the Housing Committee, also makes changes to the affordable housing land use appeals procedure and an IHZ statute.

COMMITTEE ACTION

Housing Committee

Joint Favorable Substitute

Yea

10

Nay

3

(03/07/2017)