Housing Advisory: SJC Rules That Chapter 40B Allows Commercial Use within Affordable Housing Developments

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DECEMBER 17, 2007 Boston Washington New York Stamford Los Angeles Palo Alto San Diego London www.mintz.com One Financial Center Boston, Massachusetts 02111 617 542 6000 617 542 2241 fax 701 Pennsylvania Avenue, N.W. Washington, D.C. 20004 202 434 7300 202 434 7400 fax 666 Third Avenue New York, New York 10017 212 935 3000 212 983 3115 fax 707 Summer Street Stamford, Connecticut 06901 203 658 1700 203 658 1701 fax 2029 Century Park East Los Angeles, California 90067 310 586 3200 310 586 3202 fax 1400 Page Mill Road Palo Alto, California 94304 650 251 7700 650 251 7739 fax 9255 Towne Centre Drive San Diego, California 92121 858 320 3000 858 320 3001 fax The Rectory 9 Ironmonger Lane London EC2V 8EY England +44 (0) 20 7726 4000 +44 (0) 20 7726 0055 fax	SJC Rules That Chapter 40B Allows Commercial Use within an Affordable Housing Development Affirming the “flexibility” that the legislature built in to Chapter 40B, the Supreme Judicial Court has ruled that a comprehensive permit can authorize not only housing, but in the some cases “incidental commercial uses” in a housing development. In Jepson v. Zoning Board of Appeals of Ipswich, two abutters challenged the board’s decision to grant a comprehensive permit to a development because one of its two structures, which violated setback requirements of Ipswich’s zoning bylaw, contained ground-floor commercial uses. While acknowledging that Chapter 40B gave the board the power to waive setback violations for housing, the abutters claimed that the board lacked the authority under Chapter 40B to waive local dimensional requirements for the commercial component. Instead, they argued, the developers had to obtain a variance of those requirements. The Supreme Judicial Court disagreed. The court first noted that this mixed-use structure was located in a commercial zone, where the commercial uses proposed by the developer—a day care center, a bank and a coffee shop—would be permitted as of right. Nothing in Chapter 40B expressly prohibits the inclusion of incidental commercial uses “to complement an affordable housing development,” in a zone where such uses are permitted, the court added. Furthermore, the court said, the legislature took into account that developers of affordable housing need to generate a reasonable economic return on their investment, pointing to the developer’s right to appeal conditions attached to the permit if they rendered the project uneconomic. Granting developers comprehensive permits containing dimensional waivers which cover the commercial as well as the residential components of a mixed-use development would further the legislative purpose “that developers of affordable housing need to generate a reasonable economic return on their investment.” This is welcome news to developers who envision modern structures that encompass more than simply residential units, and towns that welcome modern planning concepts such as smart growth and mixed-use development. The decision also benefits the residents of these developments, who will have commercial services literally at their doorsteps. But Jepson leaves two central questions unanswered. First, can a comprehensive permit also waive bylaw use provisions by allowing construction of a mixed-use development in a residential zoning district? Here the court was careful to note, more than once, that the mixed-use structure was in a commercial zoning district, so the court did not need to face that question. And, second, if only “incidental commercial uses” can be authorized by comprehensive permit, how much commercial development is “incidental”? Justice Greaney, the author of the Jepson opinion, mused about this topic at oral argument, but his opinion leaves that issue to be resolved in future cases. * * * * * If you would like to discuss this or other matters concerning subsidized housing, please contact any member of Mintz Levin’s Housing Practice Group listed below. Daniel O. Gaquin Group Co-Chair (Real Estate) 617.348.3098 \| DGaquin@mintz.com Marilyn Newman Group Co-Chair (Environmental) 617.348.1774 \| MNewman@mintz.com Paul D. Wilson Group Co-Chair (Litigation) 617.348.1760 \| PWilson@mintz.com Dean Atkins 617.348.1853 \| DAtkins@mintz.com Allan Caggiano 617.348.1705 \| ACaggiano@mintz.com Jonathan M. Cosco 617.348.4727 \| JCosco@mintz.com Nicholas C. Cramb 617.348.1740 \| NCramb@mintz.com May Y. Low 617.348.1837 \| MYLow@mintz.com Jeffrey A. Moerdler 212.692.6881 \| JMoerdler@mintz.com Gabriel Schnitzler 617.348.3099 \| GSchnitzler@mintz.com Noah C. Shaw 617.348.1795 \| NShaw@mintz.com Jennifer Sulla 617.348.3092 \| JSulla@mintz.com Benjamin B. Tymann 617.210.6853 \| BTymann@mintz.com Copyright © 2007 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. The above has been sent as a service by the law firm of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. and may be considered an advertisement or solicitation under federal law. The distribution list is maintained at Mintz Levin’s main office, located at One Financial Center, Boston, Massachusetts 02111. If you no longer wish to receive electronic mailings from the firm, please notify our marketing department by going to www.mintz.com/unsubscribe.cfm.