In 2014, the Massachusetts Housing Finance Agency (“MassHousing”) issued a project eligibility letter to developer HD/MW Randolph Avenue, LLC (“HD/MW”) for a ninety unit, mixed-income residential development in Milton. The letter qualified HD/MW to apply to the Milton Zoning Board of Appeals (“ZBA”) for a comprehensive permit. Under the Massachusetts Comprehensive Permit Act, G.L.c. 40B, §§ 20-23 (“Act”), qualifying developers of affordable housing may apply to the local zoning board of appeals for a single, comprehensive permit. In 2015, the ZBA issued a permit for a thirty-five-unit development with over sixty restrictions. HD/MW appealed the decision to the Housing Appeals Committee (“HAC”). HAC, which sits within the Department of Housing and Community Development (“DHCD”), has been empowered by the Act to strike or modify any restrictions that would make a project “uneconomic” to pursue.
Here, the qualifying letter never stated the developer’s projected ROI. Thus, HAC calculated the ROI for HD/MW, and determined that the ROI fell below minimum reasonable return under DCHD’s regulations and guidelines. However, it also determined that the ROI under the ZBA’s permit was “significantly more uneconomic” than HD/MW’s original plan. HAC also determined that the ZBA did not provide sufficient evidence to show that its restrictions were consistent with local needs in Milton. Thus, HAC either struck down or modified the restrictions imposed on the project by the ZBA. The ZBA appealed the decision to the Land Court, and the Land Court affirmed HAC’s decision. The ZBA then applied to the Massachusetts Supreme Judicial Court for direct appellate review, which the SJC granted.
The SJC disagreed with the ZBA on all issues. The SJC determined that HAC was well within its authority to both use and continually develop the “significantly more uneconomic” standard at issue. Neither DCHD’s regulations nor guidelines adequately address the scenario in this case—a developer who received a qualifying letter to pursue a comprehensive permit for a project that was determined to be “uneconomic” after the letter has issued. However, the SJC stated, not only does HAC have authority to fill in this “gap” not addressed by the statute or corresponding regulations, but it has done so through its prior adjudications. The SJC determined that HAC’s application of the “significantly more uneconomic” standard in this case was consistent with those prior rulings. Therefore, the Court concluded that HAC’s use of the standard in this case was appropriate.
The ZBA also argued that the term “significantly” is so vague that HAC’s determination was arbitrary. The SJC disagreed. HAC calculated the ROI using its routine calculations and determined that the return under the ZBA’s permit was significantly less than under the original plan. This application was consistent with both the plain meaning of the term and the 10-year practice of HAC applying this standard to similar cases.
The ZBA’s final argument was that HAC did not issue sufficient findings to justify its modifications of its decision. Here, the SJC determined that the sixty-seven-page decision issued by HAC contained sufficient documentation for the SJC to conclude that HAC’s decision was supported by substantial evidence.