MBTA Act: A promising response to state’s housing crisis that needs teeth

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In 2021, the state passed G.L.c.40A, §3A, the MBTA Act, to address Massachusetts’ ongoing housing crisis. The MBTA Act is a promising solution, and with the addition of enforcement mechanisms, it has the power to materially contribute to solving the housing shortage.

Past failed efforts

Massachusetts has long struggled with problematically high housing prices. To combat this issue, in 1969, the Legislature introduced Chapter 40B, which provides a streamlined process to obtain building permits for developers who agree to make 25 percent of the new housing units “affordable.”

Some developers opted in, and Chapter 40B stimulated the construction of affordable housing units. Yet, that didn’t solve the problem; housing prices continued to increase, and zoning bylaws disfavoring multifamily housing persisted.

In 2004, the state passed Chapter 40R. Also known as the Smart Growth Zoning and Housing Production Act, Chapter 40R was another attempt at spurring affordable housing development.

Under Chapter 40R, each town or city situated in an “eligible location,” i.e., an area near a transit station or place of concentrated development, can elect to opt into the state’s program. Under the program, a municipality must vote on, and adopt, a Smart Growth Zoning District, or SGZD.

In a SGZD, the municipality must allow for primary residential uses as of right, meet minimum density requirements, and create a certain amount of affordable housing units. In exchange, the municipality receives financial rewards.

Since its passage in 2004, Chapter 40R has stimulated the construction of affordable housing units. However, like Chapter 40B, it hasn’t solved the housing problem. Housing costs hit a historic high this year, with the average cost of a single-family home in the commonwealth now at $600,000.

A novel approach

In 2021, Gov. Charlie Baker and the Legislature took a more “aggressive” approach and passed the MBTA Act. Inserted into the Massachusetts Zoning Act, the MBTA Act requires all 177 MBTA communities to have at least one zoning district of reasonable size where multi-family housing is permitted “as of right.”

“As of right” means that the construction and occupancy of multi-family housing may proceed without a special permit, variance, zoning amendment, waiver or other discretionary zoning approval. This is a strong mandate.

Generally, developers must obtain a special permit to develop multi-family housing units above certain density thresholds, which requires the developer to undergo a specific review process with board discretion and potential multi-year litigation.

Now, under the MBTA Act, all 177 MBTA communities must create at least one zoning district near their public transit system where a developer may build multi-family housing units with a minimum of 15 units per acre without going through a special permit process.

If an MBTA community fails to comply, the community will lose funding from the Housing Initiative, Local Capital Projects Fund, MassWorks or HousingWorks. The state’s position is that compliance is mandatory.

The MBTA Act is certainly a novel approach — and a departure from the incentivized- approaches of Chapters 40B and 40R. The MBTA Act’s mandate is intended to enable the development of multi-family housing where it is needed: near the public transit system. The act is promising, and it could make a material impact on the housing crisis. Advocates say more housing often leads to lower housing costs, simple supply and demand economics. However, the act needs “teeth.”

The ‘teeth’: private, public enforcement mechanisms

The Executive Office of Housing and Livable Communities is tasked with determining compliance with the act. Under the EOHLC’s guidelines, compliance is a two-step process.

First, each MBTA community that does not have a multi-family zoning district that complies with the act had to achieve “interim compliance” by Jan. 31, 2023. Interim compliance is met by submitting an Interim Compliance Action Plan that explains how the community plans to create a multi-family zoning district that complies with the act.

For example, Newton’s Interim Compliance Action Plan explains that the town has a proposed Village Center Overlay District that, if approved, would create a zoning district that meets the act’s requirements.

All MBTA communities, except Holden, submitted Interim Compliance Action Plans and achieved interim compliance by the deadline.

Next, MBTA communities must achieve “district compliance.” District compliance is met when an MBTA community adopts a multi-family zoning district that satisfies the EOHLC’s compliance guidelines. Compliance guidelines require that the zoning district: (1) permits multi-family housing “as of right,” (2) is of “reasonable size,” (3) meets “minimum gross density” requirements, (4) allows multi-family housing without age restrictions and is suitable for families with children, and (5) is located near a transit station.

District compliance must be achieved for rapid transit communities by Dec. 31, 2023; for commuter rail and adjacent communities by Dec. 31, 2024; and for small towns by Dec. 31, 2025.

The district compliance deadline for the 12 rapid transit communities has already passed. One community, Milton, did not achieve compliance. The other MBTA communities —commuter rail and adjacent communities and small towns — do not have to achieve district compliance for another one to two years.

However, some of these communities, such as Wrentham, are already seeing signs of growing resistance. Recognizing this, town officials sent a letter to Gov. Maura T. Healey asking for “a waiver or modifications” from some of the act’s requirements. Healey has not yet responded.

The AG’s untested legal theories, and the Superior Court’s decision, highlight the need for legislative change and the establishment of supplemental enforcement mechanisms to ensure compliance with the act.

Attorney General Andrea J. Campbell has mobilized. She is creating the “Housing Affordability Unit” to help oversee compliance and has already sued the town of Milton for its non-compliance. The AG petitioned the Supreme Judicial Court to take the case. The SJC agreed and will hear oral arguments in October. Although the AG is taking steps to ensure compliance, the viability of her legal claims against Milton and future non-compliant MBTA communities has yet to be adjudicated.

Under the current legal framework, one Superior Court judge has already ruled against private litigants seeking to enforce compliance with the act against unwitting communities. In CMHA v. Holden, the Central Massachusetts Housing Alliance and two residents of Westborough and Holden respectively, sued the town of Holden under G.L.c. 231A, §1, for Holden’s failure to submit an Interim Compliance Action Plan.

The plaintiffs sought a declaration from the court that compliance with the act is mandatory and that Holden cannot opt out of the act’s requirements. The court dismissed the plaintiffs’ claim for lack of standing.

Specifically, the court held that the plaintiffs alleged “general, indirect harm[s] that they, like many other individuals and organizations across Massachusetts, suffer from the lack of affordable housing in the state.” The court found such allegations were insufficient because the plaintiffs must show Holden’s failure to comply with the law caused them direct harm or injury.

The AG’s untested legal theories, and the Superior Court’s decision, highlight the need for legislative change and the establishment of supplemental enforcement mechanisms to ensure compliance with the act.

Under the Zoning Act, private litigants may continue to face an uphill battle trying to enforce the MBTA Act. Currently, to have standing, a plaintiff must be a “person aggrieved.” Under prevailing case law, this means that a plaintiff must demonstrate a special injury and be within the zone of interest intended to be protected by the statute.

A Superior Court judge in CMHA v. Holden found that a community housing organization and two residents were not persons aggrieved. The Legislature could adjust the Zoning Act and clarify standing where district compliance deadlines are not met or zoning districts provide only illusory “rights.”

In addition, the Legislature could enact a specific public enforcement mechanism allowing for injunctive relief.

For example, G.L.c. 93A, §4, gives the attorney general the power to bring an action for permanent injunction against businesses that engage in unfair or deceptive trade practices. Similarly, a public enforcement mechanism explicitly granting the AG the power to bring an action for mandatory injunction against non-conforming communities mandating compliance with the MBTA Act could be added to the Zoning Act.

Taken together, a private and public enforcement mechanism should enhance state-wide compliance with the MBTA Act. And state-wide compliance is crucial because the act is key to alleviating the housing shortage and boosting local economies.

Polar-opposite situations in Quincy and Braintree illustrate how multi-family housing can positively impact a community.

Tale of two cities

Since 2014, Quincy has completed or permitted more than 3,800 housing units. Many are multi-family units. For example, Ashlar Park, a 465-unit residential community, is opening soon. And NOVA Hancock, a new apartment complex with 215 units and retail stores, is opening in 2025.

Quincy’s approach to multi-family developments appears to be positively impacting its economy. Since 2014, the city has added millions of dollars to its local economy, its budget has increased, its financial stability and future growth projections have strengthened, and companies are moving to the city.

In contrast, before newly elected Mayor Erin Joyce, Braintree has opposed the development of multi-family units. Last year, the municipality’s residents rejected ZOM Living’s 495-unit apartment complex.

Project supporters argued that the development would have brought more residences and boosted the economy. They maintain that Braintree’s resistance to ZOM Living and multi-family residences is the reason Braintree is not seeing the type of growth and expansion Quincy is. And most importantly, it is why the city’s budget is tightening.

Quincy shows that multi-family developments can help address the housing shortage and boost the economy. What is happening in Quincy can happen across the state. With the right enforcement mechanisms, communities will comply with the MBTA Act’s multi-family requirement. In turn, the intended benefits of the MBTA Act will be realized.

Residents and members of the legal community have until April 24 to call their local representatives and encourage them to add enforcement mechanisms to the Zoning Act. A list of your local representatives can be found at this link.

Christopher J. Cunio is a partner in Hunton, Andrews, Kurth’s commercial litigation group in Boston. He handles complex commercial litigation, government investigations and business disputes. He can be contacted at [email protected]. Aidan Gross is an associate in the commercial litigation group in Miami. He can be contacted at [email protected]. Frank A. Marinelli practices at Marinelli Law Office in Braintree. He can be contacted at [email protected].