Bar News - June 17, 2015
Municipal & Governmental Law: Local Application of New Hampshire’s Workforce Housing Act
By: Ben Frost
Seven years ago, the New Hampshire Legislature passed landmark legislation addressing the obligation of municipalities to provide the opportunity to develop affordable housing.
The Workforce Housing Act, RSA 674:58-61, took effect on Jan. 1, 2010, and was a rough codification of the Supreme Court’s decision in Britton v. Town of Chester (1991). In Britton, the Court determined that the state’s planning and zoning statutes called for every municipality to provide a reasonable and realistic opportunity for the development of affordable housing, and particularly for the development of multi-family structures. The Court also held that every municipality must provide for its “fair share” of the regional need for affordable housing.
Municipal inaction in response to Britton and rapidly increasing housing prices led the Legislature in 2008 to adopt the Workforce Housing Act (Chapter 299, Laws of 2008), which amended the planning and zoning statutes of the state by including the Court’s holding in Britton that all municipalities must provide reasonable and realistic opportunities for the development of workforce housing, including rental and multi-family housing.
Workforce housing must be allowed in a majority of land area where residential uses are permitted. Recognizing that some municipalities have already done what is necessary under this law, the existing housing stock of a community may be accounted for to determine if a municipality is providing its “fair share” of the regional need for workforce housing.
Since the adoption of the Workforce Housing Act, there have been several local decisions appealed to superior court, but none yet appealed to the Supreme Court. In some cases the municipality has prevailed, and in others, the developer. Notable among the latter group is Sun Coast Properties LLC v. the Town of Windham, which involved appeals of decisions by both the Windham planning board and zoning board of adjustment.
Sun Coast had filed an application with the Windham planning board for a 10-unit multi-family workforce housing development on 2.6 acres on Mammoth Road in the town’s Rural District. Sun Coast proposed that four of the units would be affordable, according to the terms of the state’s Workforce Housing Act. The act defines workforce housing as being affordable to purchase by a family earning the area’s median income, or to rent by a family earning 60 percent of the area’s median income. Although the Windham planning board had proposed zoning amendments twice in preceding years to address the law’s requirements, local voters had rejected those proposals.
Although the density of the proposal did not meet zoning standards, Sun Coast maintained that the planning board could approve the subdivision and site plan for five duplexes under the Workforce Housing Act, rather than seeking a variance from the zoning board. But as a precaution, Sun Coast applied for a variance. The ZBA denied the variance, and the planning board rejected Sun Coast’s application as incomplete for its failure to comply with the zoning ordinance.
In a consolidated appeal, the trial court first addressed the planning board’s refusal to accept jurisdiction and upheld the board’s decision, observing that it didn’t make sense for the planning board to review an application that clearly violated the zoning ordinance. The court also upheld the ZBA’s variance denial.
But that’s not the end of the story. Sun Coast had requested the builder’s remedy as relief to the decisions of the local boards. The court reviewed the overall conditions and actions of the town – that there was a substantial need for more workforce housing, as demonstrated by the regional planning commission’s housing needs assessment and as expressed by some board members and town staff; and that voters had twice rejected the planning board’s zoning proposals in response to the requirements of the state’s Workforce Housing Act.
Although it granted the builder’s remedy, the court nevertheless required Sun Coast to return to the planning board for subdivision approval, and it reduced the number of market-rate units in the development, thereby cutting into the developer’s profit. The planning board subsequently approved Sun Coast’s proposal. The project was built and the units have been sold.
This case recognizes that the builder’s remedy is alive and well in New Hampshire, but it also points out that even with such relief, the conditions imposed by the court may reduce a project’s financial viability. It also demonstrates the need for further education on the Workforce Housing Act – for local officials, builders, and lawyers. Finally, it shows how well-placed litigation can compel action: Windham’s voters ultimately approved a workforce housing ordinance a year after Sun Coast had been awarded the builder’s remedy in court.
Ben Frost is the director of legal and public affairs at New Hampshire Housing Finance Authority, where he coordinates federal and state legislative initiatives.