Home Construction Huh?

Here is another Boston.com article on housing, once again blaming communities and zoning for the lack of housing construction. It is actually quite pathetic how they took some simple, national statistics, and twisted the results.

Let's start with the basic numbers, drawn from the Boston Herald story, new housing sales fell to an annualized figure of 309,000 housing units. This level was lower even than the previous record low in 1981. At the same time, annualized new housing starts (from the Boston.com article) stood at 466,000 units. Thereby housing starts outpaced demand by 157,000 homes, or almost 51%. The Herald article goes on to point out that new home inventory would take 13.3 months to exhaust. Essentially meaning that current supply has far outstripped demand.

The Boston.com article goes on to note the "boom" states of Florida, Arizona and California have been so hard hit by the recession that there are large numbers of subdivision and condo ghost towns. These are clear examples of the reckless speculation in the housing market in recent years.

If you look at the Case-Shiller data I provided here, you can see that the Boston region housing market has not been hit as hard as other parts of the country. In fact, the Herald even notes that the Northeast was the only part of the country to see increases in new home sales.

Now, one could look at all this data and conclude that the northeast in general, and the Boston region in particular, has been preserved by slower housing growth. But, even though noting the foreclosure ghost towns in the once booming (read over built) states, the article on Boston.com once again finds fault with local land use policies.

The Boston Globe and Boston.com writers need to change their mantra. They should read the New Yorker article I wrote about in my previous post, they should read some of the real estate foreclosure stories from San Diego or elsewhere in California. If Massachusetts were in the same dire straits as some of the boom regions, would they be blaming the overbuilt environment and collapse of the housing market on a lack of local leadership on land use?

Rather than looking at lots available for construction or other surrogates for the ability to build housing, the Boston Globe and Boston.com writers continue to focus on the issuance of building permits. A recent review I conducted of other planners across the state illustrate thousands of approved housing units languishing as builders have not proceeded to construction.

Over the past few years the Globe has also been full of stories about housing developers who promised the world to communities to get projects approved with visions of large profits dancing in their heads, and then had to return to the towns to ask that the conditions the developers offered to begin with, be removed.

The relative stability of the Boston region's housing market is illustrative of smart land use decisions by both community officials and the region's builders. And, unlike the Boston.com conclusion, the number of projects with valid local approvals and the lack of builder's languishing in bankruptcy, like in San Diego, will leave the region well positioned for both short and long term economic recovery.

Florida's Foreclosure Disaster - A Message For Us

Just finished reading this story from the New Yorker Magazine. Then went onto Windows Live Maps and traced the latest aerial photos of State Road 54 in the Tampa area. The two-dimensional aerials are really telling, illustrating numerous empty subdivisions. Land stripped, roads put into place, some construction completed. Just totally amazing.

Pictured above is one area adjacent to State Road 54 which illustrates a new subdivision (center on the picture), an unfinished subdivision (to the left of the new subdivision) and an unfinished commercial plaza (on the right edge).

While we may not have had the rampant speculation and flipping of properties that is reported in the article, some areas of Massachusetts have experienced a rapid run-up of property values as the second home market brought in piles of outside cash to the housing market.

Then, as I thought more about it, there is some level of housing speculation involved with pursuing Chapter 40B developments over traditional land development. Albeit these projects have certain limits, there is clearly a profit to be made or those in the business would not be seeking approval of these developments.

Why do I believe that Chapter 40B projects fall into the land speculation side of the equation? Well basically, a traditional subdivision can be laid out, and then delayed until market conditions will support building the housing. Or, the housing can be custom built for particular buyers. Not a lot of risk, except perhaps for the value of putting in the infrastructure. A Chapter 40B project on the other hand is issued by way of a "comprehensive permit." These permits generally have strings attached, by the community - say it must be used within a particular time period - or the funding agency - which requires the funds be drawn down within a particular fiscal year. Either of these force construction to advance even if the market cannot support the amount of housing being proposed. Below is a one such development. To activate the permit, the road has been put in and land clearing begun.

This site is less dramatic than many others that are out there. I read regularly the postings to the egroup Reform40B. This group lists many half built projects that have stalled across the state. These projects do not provide the promised housing, either for those needing affordable homes, of for the general labor market.

These shortcomings illustrate the problems with supply-side considerations when thinking about the relationship between housing and the economy in general. It argues that the state housing programs need to be re-thought. We need more focused housing programs, not as many projects spread haphazardly through-out the state to meet the 10% rule in every community, but to ensure that regions are meeting their true needs, this includes protection of open space and focusing jobs and housing in areas served with appropriate infrastructure. While 2 acre lot sizes are not justified across the board, I firmly believe that certain areas should be pushed to open space protection zoning and agricultural protection zoning with lot sizes that are appropriate to ensure that the state does not lose its farms and open areas to ill-thought-out housing programs.

As a closing thought in this post, is it appropriate to build affordable housing in an area not served by public transit, then increase the gasoline tax to a level that is harmful to these people who must live in this remotely located affordable housing? Is our tax policy consistent with our housing policy? Or are we making it necessary for the working poor to support the transportation services made available to the high end jobs located in downtown Boston?

The Massachusetts Gasoline Tax Proposal

The governor has just proposed to increase the Massachusetts Gasoline Tax. Putting on my Transportation Planner hat for a while, I can see pros and con's to this proposal. Obviously, there is a need to ensure that alternatives to the automobile are properly funded. The gasoline tax has always and should continue to serve this purpose. However, is it appropriate to use the gasoline tax as the primary source of revenue to replace tolls? That is a harder argument to swallow.

The tolls on the turnpike, the tunnels and the bridges pay for the debt service and maintenance of a key set of facilities in the heart of Boston. Specifically speaking, the Central Artery and Tunnels. For years these facilities sucked up the major portion of the federal roadway dollars destined to the state. As with many who do not use these facilities on a daily basis, it is hard to understand the argument that these facilities need to be paid for by people driving through Dalton or Cummington.

It is my personal belief that unless there are measures put into place to ensure that the revenue from the gasoline tax is returned in equal portion to the commuter sheds paying the taxes, there will continue to be an unfair redistribution of income from some of the less served areas of the state in favor of the areas with greater levels of transportation facilities. For instance, the Cape Cod Regional Transit Authority does not have the financial resources to ensure that even the public transit needs of people simply trying to travel around the two densest communities on the Cape, Barnstable and Yarmouth, have adequate opportunities to forgo the car, let alone make it possible for people living in the other communities served by the authority could make such a choice.

Clearly, this will lead to more vehicle miles per capita being traveled in suburban or rural areas, where transportation choices are the most limited. A fair mechanism is needed to return gasoline taxes to these areas to increase the choices that are available.

Here are a few thoughts on what I think could make the proposal more fair.

Parking Taxes - The Boston/Cambridge Parking Freeze really isn't. The freeze only affects public parking, forcing up the costs of people who may have an occasional need to travel to the city, while not truly discouraging employee parking. A parking tax of perhaps $2 per day levied on ALL (public and private) parking spaces within the core of the Boston Metropolitan Region should be instituted. This tax revenue should be dedicated to the MBTA.

Tolls - The governor wants to avoid toll increases on the Turnpike, tunnels and bridges leading into Boston, while at the same time suggesting that new toll facilities should be explored at the major entry points to the state. There are a number of problems with this logic. First, the toll facilities are ones which have parallel mass transit services. Metrowest, one of the noisier areas when it comes to tolls, has rail service and, from Route 128 on in, rapid transit services. There are similar services to the other areas affected by the existing tolls. If one of the goals is to reduce traffic congestion in the city, spreading the cost of maintaining these core transportation services to the hinterlands of the state, should not come with the added impact of promoting more automobile travel in the most congested portion of the state. The entire concept of congestion pricing would argue for increasing tolls, at least during the morning and afternoon rush hours. Secondly, adding tolls at certain border crossings need to be approached with due care. Would the economies of Lawrence of Haverhill or Lowell be adversely affected by tolls on Interstate 93 or Route 3 at the borders? Will we be telling potential visitors to stay home, that we do not want their shopping or tourist dollars? Will we be punishing workers in our state, especially in border communities, who were able to find more affordable housing in adjacent states? Will we be telling our own residents who may work in bordering states that it is time for them to leave? Tolls on our borders will have major image impacts, most of which will be negative.

Gasoline Taxes - Yes, a gasoline tax hike is necessary and inevitable. The tax, however, should be balanced with the other forms of transportation revenue and not be a sole revenue source. When the gasoline tax goes up, there will be impacts through-out the economy. Disposable income of residents will be reduced as people will have to spend a greater portion of their income on gasoline. When gasoline prices jumped to $4 per gallon over the last few months, other, discretionary spending was reduced. Gasoline prices will also impact other consumer products. Basic staples will cost more as transportation costs increase. Overall, consumer spending capabilities will decrease, especially in areas of the state where there are few alternatives to the automobile.

Some will argue that we need to spend our way out of this recession. That is most definitely true. However, we need to use care in how we generate the revenue to meet this crisis. If we generate the revenue in a fashion that simply takes other funds away from our residents, we need to fully understand whether there is a net benefit. Will the expenditures triggered by increasing transportation revenues (whether through the proposed gasoline tax or a balance or revenue options) off-set the lost spending capability of those who have to pay the new taxes? If not, then the proposal will be a drag on the economy, as opposed to the push that we are seeking. Unfortunately, the state needs a balanced budget and in order to support transportation bonds that could increase immediate spending above the immediate tax revenues generated, we will need to raise additional revenue. I just hope we can see real balance in both how the revenue is generated and in how the revenues are distributed across the state.

Land Use Partnership Act and, quite possibly, Community Planning Act Level Playing Field Idea

In my last post I suggested I had some ideas on how to level the playing field for the development review process. The idea follows upon some concepts raised in the Land Use Partnership Act and the Community Planning Act as well as a variety of streamlined permitting reports, including that written by the MAPC. The idea would be to provide a common project development process whether you are going to be seeking Site Plan Review, Special Permit Review, Subdivision Approval, or an Approval Not Required Plan. The last possibly being no longer needed in reality.

My idea would be to revise Chapter 40A Section 6, specifically the second, fifth and sixth paragraphs. The process currently creates a situation where a person wanting to do something with their land could undertake a significant investment, only to have the rug pulled out from underneath him or her, especially in the Special Permit process. Here is where I would borrow a little from LUPA:

Step One in the development process would be to allow for a filing of a Letter of Development Intent, as called for in LUPA. The Letter would allow the developer with a 12 month window within which to complete site analysis and prepare plans for a development project. The filing would protect that parcel of land from a zoning change during that twelve month time period. I would, to protect the towns against speculation, limit the filing of a Letter of Development Intent to no more than one such letter in any 24 month time period. The idea provides a developer with expectations, and protection from a zoning proposal being petitioned as soon as people see the surveyors on the land.

The application would have to be filed within the 12 month window provided by the Letter of Intent.

Step Two would deal with the life of the approval. Here, I would suggest keeping, generally, the same approval life as we presently have, with a few changes. The changes suggest compromises that benefit both the community and the applicant. The idea would be that all approvals are good for a two year time period that is renewable under the original terms as long as substantial progress is being made on implementing the project that has been approved. Substantial progress would need to be determined as part of the renewal process and should include consideration of market conditions.

Obviously, this needs some discussion and fleshing out. It provides better development anticipation, creates similar paths for all developments, and provides an understandable process for the life of a project, while not leaving un-built projects protected forever.

Land Use Partnership Act - Random Thoughts on How to Fix It - Zoning Freezes

The Land Use Partnership Act suggests that the permitting process at the local level is broken.  Unfortunately, the document has several areas where the concept of plan approval, the granting of special permits, and the issuance of building permits are interchanged.  In this post I am going to address the issue of the freeze discussion found in Section I 6, specifically the replacement of the fifth paragraph of the existing Chapter 40A Section 6.

I have had discussions which suggest the proposed is intended to shorten the grandfathering time period for subdivisions.  At a minimum the section is so confusing that it is quite difficult to see, especially with adding an additional step.  If the goal is to only provide zoning protection to a plan that is already filed, let's simply do that.

As it was explained to me, the letter of intent gets filed before first notice, that sustains the zoning freeze.  That part I see.  The first unclear aspect for me is related to plan filing.  I interpret part of this to suggest the freeze is for an extended period - the eight year reference related to the letter filing.  In another location it suggests that a preliminary plan or definitive plan must be filed before the vote on the amendment.

A second confusion is, the reading of the portion of the amendment related to the letter of intent, suggests that protections could be made for a project on a parcel that does not need to be subdivided.  However, this is not followed up on, and the next paragraph of Chapter 40A Section 6 is not touched.

I will address how Section I subsections 5 and 6 (and the untouched ANR paragraph) could all be tied together in my next post.  That will be one that should generate significant discussion -as it would expand some protections for land owners, provide a more level playing field in the permitting process, while also providing some greater limitations on grandfathering as well. 

First, lets address how to change the existing Chapter 40A Section 6 fifth paragraph to meet what has been proposed.  I would suggest we get rid of the confusion created by adding the additional step of the letter of intent.  Either of the following would meet that goal:

Replace the fifth paragraph of Section 6 of Chapter 40A with the following:

If a definitive plan, or a preliminary plan followed within seven months by a definitive plan, is submitted to a planning board for approval under the subdivision control law, and written notice of such submission has been given to the city or town clerk the development described in such definitive or preliminary plan shall be governed by the applicable provisions of the zoning ordinance or by-law, if any, in effect at the time of such submittal, for a vesting period that ends eight years from the date of such written notice of submission; provided that the development described in such written notice shall be subject to subsequent amendment of the zoning ordinance or by-law, if the first notice thereof was posted prior to such written notice of submission, before the effective date of ordinance or by-law, the land shown on such plan shall be governed by the applicable provisions of the zoning ordinance or by-law, if any, in effect at the time of the first such submission while such plan or plans are being processed under the subdivision control law, and, if such definitive plan or an amendment thereof is finally approved, for eight years from the date of the endorsement of such approval, except in the case where such plan was submitted or submitted and approved before January first, nineteen hundred and seventy-six, for seven years from the date of the endorsement of such approval. Whether such period is eight years or seven years, it shall be extended by a period equal to the time which a city or town imposes or has imposed upon it by a state, a federal agency or a court, a moratorium on construction, the issuance of permits or utility connections.

Or even simpler to strike the words illustrated from said paragraph:

If a definitive plan, or a preliminary plan followed within seven months by a definitive plan, is submitted to a planning board for approval under the subdivision control law, and written notice of such submission has been given to the city or town clerk before the effective date of ordinance or by-law, the land shown on such plan shall be governed by the applicable provisions of the zoning ordinance or by-law, if any, in effect at the time of the first such submission; provided that the development described in such written notice shall be subject to subsequent amendment of the zoning ordinance or by-law, if the first notice thereof was posted prior to such written notice of submission, while such plan or plans are being processed under the subdivision control law, and, if such definitive plan or an amendment thereof is finally approved, for eight years from the date of the endorsement of such approval, except in the case where such plan was submitted or submitted and approved before January first, nineteen hundred and seventy-six, for seven years from the date of the endorsement of such approval. Whether such period is eight years or seven years, it shall be extended by a period equal to the time which a city or town imposes or has imposed upon it by a state, a federal agency or a court, a moratorium on construction, the issuance of permits or utility connections.

I will admit, that I am just as suspicious of how a process can be abused as the next guy.  I honestly can see a property owner filing a letter of intent with the Planning Board and Town Clerk immediately after each town meeting, at the same time the submit a letter requesting to be notified of any zoning changes being posted.  Thus, with the letter of intent, the sophisticated developer would be given a far more advantageous position than the typical property owner.  Is this really what we want to be proposing? 

Land Use Partnership Act - Random Thoughts on Changes

Yesterday I received an email with the following query:

"I have reviewed LUPA a number of times via my work here .... My understanding is that the annual target in LUPA is .5% per year over 10 years year. Your posts reference 1% per year. Did this change or are you referencing a different requirement?"

While Section II of the proposed statute is NOT my primary focus for fixing this legislation, the exchange illustrated the amount of grey area within the proposal. And, as we all know at the local level, grey areas in regulations always take the most anti-community interpretation when they wind up in court.

The issue is, that the questioner's read of the legislation is that a certified plan community must only meet a 0.5% annual growth figure. This is taken from the definition of the "Housing Target Number" in combination with the number of years the plan will be approved for (10 years).

• "Housing target number” shall mean a number equal to five percent (5%) of the total number of year-round housing units enumerated for the municipality in the latest available United States census as of the date on which the plan was submitted to the regional planning agency. "

I get the 1% figure from the restrictions that Section II 7 (b) place on certified plan communities:

• (b) Following the municipality’s effective date, a zoning ordinance or by-law that limits the number of new housing units within residential development districts for which building permits may be issued in any twelve month period to an amount equal to or greater than one-fifth of the housing target number (but in no event less than ten new housing units) shall not be declared exclusionary or otherwise against public policy.

If you look at II 7 (b), it requires that a growth limitation by-law be consistent with public policy. That public policy calls for 1/5th of the housing target number (5%) be accomplished in any 12 month time period. So, 1/5th of 5% is 1%, this means that to adopt a growth limitation by-law you must allow for a 1% annual growth. To me it is inconceivable that the housing to be built in a non-growth cap community would be set to a number that is lower than the "public policy" figure in II 7 (b).

Taking the sender's comments to represent what was intended by the drafters of the legislation, a position I personally believe is hard to support based upon the supporting documents on the state site and the recent MHP housing study that the Globe published and I reported on here, The following changes would make Section II far more pallatable. I would propose adding the wording in bold and deleting the wording that appears in red.

“Housing target number” shall mean a number equal to five percent (5%) of the total number of year-round housing units enumerated for the municipality in the latest available United States census as of the date on which the plan was submitted to the regional planning agency to be achieved over the ten year life of the certified plan.

This clearly establishes the target as being an annual average of 0.5% housing permit issuance, achievable in many more communities than my current interpretation.

(b) Following the municipality’s effective date, a zoning ordinance or by-law that limits the number of new housing units within residential development districts for which building permits may be issued in any twelve month period to an amount equal to or greater than one-fifth of the pro-rata annual housing target number (but in no event less than ten new housing units) shall not be declared exclusionary or otherwise against public policy.

This may, again benefit far more communities than the current proposal. It essentially establishes that a housing cap community would need to provide for an annual building permit issuance of 0.1%. Previously I picked on Worcester and Alford as housing examples, so I will do that again. The 0.1% housing growth would require a minimum of 70 housing permits to be issued in Worcester under a growth cap, as opposed to the 350 permits under the 0.5% interpretation, or 704 permits under the 1% interpretation. In Alford, the numbers would be a bit different. Alford has 173 year round housing units. The 1% interpretation per year would require essentially ten housing units per year. While 1% per year is 2 housing units the minimum number under II 7 (b) is set at 10 housing units, over the life of a certified plan Alford would have to issue building permits for 100 new housing units - 57.8% growth. Under the 0.5% interpretation, there is still that II 7 (b) limit of a minimum of 10 housing units, so while the 0.5% interpretation would require just 1 housing unit, there is still the issue that "public policy" is established at a minimum of 10 housing building permits annually. My proposal would eliminate the 10 building permit minimum, it would result in a community such as Alford to have to provide, perhaps as little as 2 housing units over a ten year time period, but given the focus on concentrated development, protecting open areas, etc., this may actually be supportive of public policy. Even with this, we would need to figure out how a building moratoria - currently a very legal option for a short term "catch your breath" time period - fits into this equation.

(d) If at any time more than two years after the municipality’s effective date the total number of housing units for which building permits have been applied for within the residential development districts since the municipality’s effective date is greater than the housing target number (adjusted pro rata for the number of years since the municipality’s effective date), but the total number of housing units for which building permits have been issued within the residential development districts is less than the pro rata housing target number, then the provisions of this subsection shall be in effect. During such time period, any applications for building permits or other local land use permits for residential development within such residential development districts shall deemed constructively approved if not acted upon within 180 days after receipt of permit applications. In addition, an application received under this section shall be subject only to those conditions that are necessary to ensure substantial compliance of the proposed development project with applicable laws and regulations; and it may be denied only on the grounds that: (i) the proposed development project does not substantially comply with applicable laws and regulations, or (ii) the applicant failed to submit information and fees required by applicable laws and regulations and necessary for an adequate and timely review of the development project. The foregoing provisions shall no longer be in effect once the total number of housing units for which building permits have been issued within such residential development districts equals or exceed the pro rata housing target number.

Finally, I would suggest deleting Section II 7 (d) altogether. It essentially penalizes communities for circumstances that are completely out of a community's control. Whether a community issues 0.5% or 1% of its year round housing units in new building permits is really irrelevant to the discussion at this point. IF a community is meeting the housing target number requirements for building permit issuance, WHY should it be penalized? In my own opinion, if a community does not have any permit limitation device in place, there should be rewards for that community. On the flip side, if a community needs to limit growth due to the need to provide water or sewer or school improvements, public policy should be to direct public spending to address those needs, not to make them less eligible for the discretionary spending, THAT would allow them to remove the limitation.

Something to think about - The Messages We Send

So, driving down Route 6 the other day I saw a bumper sticker "Don't Hassle Me, I'm Local." It was located on one of our local contractor's vehicles. It really got me to wondering, is our local economy so strong that the local contractor's can afford to chase off business?

The fact is, the Cape is a tourist economy. We need them, probably more than they need us. It may be time for everyone to tone down the anti-tourist rhetoric and recognize that tourists are our cash cow.

When you arrive in Hawaii, you are greeted with a lei. When you arrive on the Cape you see stickers that say "Since they call it tourist season, why can't we shoot'em?"

The Massachusetts Office of Tourism reports that dollar spent on a non-business hotel stay there is an additional $3.52 spent in the local economy. This adds up into the hundreds of millions of dollars spent in the local economy. Our beaches are clearly our greatest resource, bringing significant amounts of money. If we do not work to keep those expenditures here on the Cape, and make the tourist feel welcome, then we may as well hand them tourist brochures for the Jersey Shore, Myrtle Beach, or Virginia Beach.

Clinton once said "it's the economy stupid." We on the Cape need to realize that our economy relies heavily on the tourists and that we should not be shoeing them away.

The Land Use Partnership Act - Where to From Here?

Yesterday I met with two representatives of the Massachusetts Permit Regulatory Office. They genuinely seemed interested in accepting recommendations on the proposed Land Use Partnership Act.

Given I have probably been the most outspoken person on this particular proposal, I will start to give my thoughts on what should be changed and what should just be deleted. I really want to encourage other planners out there to feed my you ideas, either publicly or anonymously, however, you feel like being involved. I will do my best to try to incorporate your thoughts.

I think the comments need to be tied directly to what they are suggesting should be changed, I do not think, at this time, their proposal should be laden down with new ideas. As planners, we need to take control of the Planning and Zoning Acts ourselves, and not look to tie too much of our desires onto other legislative proposals.

Just my thoughts. Your opinions are greatly appreciated.