State Roundup
Governor Files Bill to Address Foreclosure Crisis
On June 11, Governor Patrick filed An Act Implementing the Division of Banks Mortgage Summit Recommendations (H. 4085). The bill, referred to the Joint Committee on Financial Services, seeks to implement some of the recommendations that were made by the Mortgage Summit Group earlier this year. According to the Governor's letter to the Legislature, the bill:
- Criminalize mortgage fraud;
- Creates a centralized statewide foreclosure database of foreclosure activity;
- Mandates that mortgage holders file a 90-day notice of intent to floreclose with the homeowner and the Division of Banks; and
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Requires consumers to receive independent, 3rd party counseling (though it may be done by telephone) prior to obtaining certain variable rate mortgage loans and also requires that the consumer opt, in writing, for the adjustable rate loan.
The bill also codifies the prohibition against mortgage rescue schemes, based on emergency regulations recently promulgated by Attorney General Martha Coakley.
DHCD Announces Tax Credit and Other Funding Awards for 18 Rental Projects
On June 14, DHCD announced tax credit and state funding awards worth $80.5 million to support the development or preservation of 18 rental projects with a total of 805 units (including 767 affordable units) in 15 cities and towns. About 60% of the funding ($50.8 million) derives from the award of federal low income housing tax credits (LIHTC). The other funding sources ($29.8 million) include federal HOME funds and state bond program funds including the Affordable Housing Trust Fund (AHTF), the Housing Innovations Fund (HIF), the Housing Stabilization Fund (HSF), the Facilities Consolidation Fund (FCF) and Community Based Housing (CBH). The projects are located in Barnstable, Boston (3), Braintree, Chelsea, Greenfield, Haverhill, Malden, Mashpee, North Adams, Somerville (2), Springfield, West Boylston, Westford and Worcester.
State Supreme Court Upholds Use of Comprehensive Permits in Communities Over 10%
On June 14, the Massachusetts Supreme Judicial Court affirmed that towns may issue comprehensive permits even after they have passed the 10% threshold. The decision upheld the Amherst Zoning Board of Appeal's approval in 2002 of a comprehensive permit (CP) for Butternut Farm, a 26-unit rental project proposed by an area nonprofit developer, ending over five years of litigation by an abutter. The court found that the Chapter 40B statute was clearly written to permit zoning boards to issue CPs after they pass 10%, though it does not require zoning boards to do so. The full decision (John Boothroyd & others vs. Zoning Board of Appeals of Amherst & others) is available here.
CHAPA-Convened Working Group Issues Report on Expiring Use
CHAPA's expiring use working group recently completed its work. The group, composed of members with an interest and expertise in the area of preservation of affordable housing, was convened at the request of Senator Susan Tucker and Representative Kevin Honan, the co-chairs of the Joint Committee on Housing. It met four times over seven weeks and attempted to reach consensus on "policy-relevant" issues related to three bills before the Housing Committee. The group did not succeed in gaining consensus for a specific bill; however, its work should help clarify and focus the debate.The primary issues were regarding whether an owner who does not wish to continue affordability restrictions should be required to sell the property to a purchaser who will maintain the property as affordable (obligation to sell) versus having the owner provide a right of first refusal to a specific purchaser who would continue affordability restrictions in the event the owner wishes to sell a property. The group had in-depth discussions regarding each option, the characteristics that might make up one or the other, additional choices, such as eminent domain, and whether continuing the current approach but providing additional incentives to maintain affordability might make sense.You can download the report by clicking here.
MIT Study on Recent 40B Use and Approval Process
The Massachusetts Institute of Technology (MIT) Center for Real Estate has just completed a study of the characteristics of all 369 comprehensive permit (CP) applications filed in 96 Greater Boston cities and towns between 1999 and 2005, with a special focus on variations in the length of the approval process (from initial application to building permit). The study found that most projects were approved fairly quickly (78% received an initial ZBA approval, 12% were denied, 4% were withdrawn and 6% were still pending at the end of 2006). Excluding withdrawn and still pending applications, it found that 90% of the applications were ultimately approved (usually with modifications). Over two thirds (70%) were approved by the local zoning board of appeals after an average hearing time of 7 months and were not appealed to the state Housing Appeals Committee (HAC). Approvals appealed to the HAC (18%) and denials (12%) took 17 months longer on average to receive a CP.
In general, however, it took at least another year on average to receive a building permit after the CP was issued. The study suggested that litigation (at least 12% of the projects were subject to other litigation, including 30% of the projects appealed to the HAC) and recent softness in the housing market may explain some of the delay. The full report, with information by tenure on project sizes, filings by year, underlying zoning and approval time, is available on CHAPA's website and on the MIT web site.
Federal Roundup
Mark-up of HUD FY2008 Appropriations Bill Begins
The House Appropriations subcommittee on Transportation, Housing and Urban Development, and Related Agencies (THUD) marked up the FY2008 appropriations bill for HUD on June 11th. Full details have not yet been released, due to a debate over the funding to be allowed for member earmarks, but the National Low Income Housing Coalition (NLIHC) reports that the mark-up provides increases for some programs and level funding for others. Mark up by the full Appropriations Committee will not be scheduled until the earmark debate is settled.NLIHC reports that the subcommittee bill includes increases for Section 8 housing choice and project-based voucher renewals, public housing operating funds, HOPE VI and CDBG. It also includes funding for 4,000 incremental vouchers (3,000 for non-elderly disabled individuals and 1,000 for homeless veterans). Programs reported to be level-funded include HOME, the public housing capital fund, Section 202 housing for the elderly and Section 811 housing for persons with disabilities. NLIHC has posted currently known funding details on its web site. On the Senate side, the Senate THUD subcommittee is expected to mark up its FY2008 spending proposal on July 9. It will have slightly more funding to work with since its allocation from the Senate Appropriations Committee is $325 million above the $51.063 billion allocated on the House side and $3 million above the President's budget request.
State of the Nation's Housing Report Shows Affordability Problems are Pervasive
The Joint Center for Housing Studies at Harvard has just released its 2007 "State of the Nation's Housing" report. It shows that housing affordability "remains a pervasive problem". Despite record levels of housing production in recent years, and a recent softening in sales prices, the percentage of U.S. households spending more than 30% of their income on housing rose by almost 20% between 2001 and 2005 and the number who are "severely cost-burdened" (paying more than half their income for housing) rose by 23% (3.2 million households). Among households with incomes in the bottom quartile of the national income distribution (less than $23,000 a year), the percentage with severe cost burdens rose from 43% to 48% between 2001 and 2005. The percentage of households in the lowe! r-middle quartile of the national income ($23,000-$45,000) with severe cost burdens also rose, from 7% in 2001 to 10% in 2005, including over half of all renters. The full study is available online.
