Mass. SJC Says Chapter 40B Doesn’t Authorize Override Of Municipally-Held Property Restriction

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In its recent decision in 135 Wells Avenue, LLC v. Housing Appeals Committee (pdf), the Massachusetts Supreme Judicial Court (SJC) confirmed that a property restriction held by a municipality cannot be overridden by the municipality’s zoning board of appeals – or by the state’s Housing Appeals Committee (HAC) – when acting on an application for a comprehensive permit under M.G.L. c. 40B.  Chapter 40B is the Massachusetts statute that promotes the construction of affordable housing.

In 2014, a developer, 135 Wells Avenue LLC, applied to the City of Newton Zoning Board of Appeals (ZBA) for a comprehensive permit to build a 334-unit residential development on a 6.3-acre lot in the city’s Wells Avenue Office Park. The lot is part of a larger parcel that is subject to a property restriction held by the city.  This restriction limits the permissible uses on that larger parcel to certain uses allowed in Newton’s limited manufacturing zoning district.  Residential uses are not allowed.  The developer argued that the ZBA had the authority under Chapter 40B to override the restriction and allow a residential use.  The ZBA determined it did not have that authority, and denied the application for a comprehensive permit.  The developer appealed to the HAC, which reached the same conclusion.  The developer then sought direct appellate review by the SJC, which agreed to hear the appeal.

The developer’s main argument was that, over the years, the city had treated the property restriction as the functional equivalent of a zoning regulation, which the city’s Board of Aldermen (now known as the City Council) regularly amended or waived upon request. In fact, the trial judge found that the Board of Aldermen had approved roughly 20 exceptions to the restriction, allowing a variety of uses such as retail, medical offices, a health club, a tennis facility, day care, schools, and a skating rink. As the trial judge put it, the developer “is making an ‘if it walks like a duck and quacks like a duck’ argument:  if the [a]ldermen act like a zoning board in waiving and amending the restrictions, they should be treated as one for the purposes of c. 40B . . . .”

The SJC did not find a duck. Instead, it found that the statutory authority that Chapter 40B grants to override local “permits and approvals” refers to “actions typically required by local permitting authorities with respect to height, site plan, size or shape or building materials.” That authority does not extend to the amendment of property restrictions.  In this respect 135 Wells Avenue is consistent with the SJC’s 2008 decision in Zoning Board of Appeals of Groton v. Housing Appeals Committee (pdf), in which the court held that the HAC does not have the power to force a municipality to relinquish a property interest.

The developer further argued that the property restriction is invalid because its original purpose – to assure that the restricted parcel was used for limited manufacturing uses – has been rendered moot. The SJC disagreed, finding that the restriction still provides valuable benefits to the city and remains enforceable despite the fact that (i) no manufacturing uses exist or ever existed on the restricted parcel, (ii) the original grantor long ago decided not to build a manufacturing facility there and long ago sold the property, and (iii) the parcel currently hosts a variety of non-manufacturing uses.  The SJC found sufficient value in the fact that the restricted parcel remains devoted to commercial uses and the restriction bars all residential uses.

135 Wells Avenue is fresh reminder that, despite the strong public policy in favor of affordable housing that underlies Chapter 40B, the extraordinary power the statute confers to override local land-use regulations doesn’t extend to actions that impair municipal (or private) property rights.