In a rare limitation on the broad scope of Massachusetts’ affordable housing law, the state’s top court ruled that amendments by a local board to municipally owned deed restrictions are not covered by the law.

In the case of 135 Wells Avenue, LLC v. Housing Appeals Committee et al, the Massachusetts Supreme Judicial Court considered in November whether the statute governing affordable housing, Mass. General Laws chapter 40B, § 21 (known as Chapter 40B), which allows local zoning boards to issue “permits or approvals” and dispense with local "requirements or regulations" encompasses the local board’s amendments of municipally owned deed restrictions. 478 Mass. 346 (Nov. 13, 2017).  The developer, Cabot, Cabot & Forbes, was blocked from developing a 334-unit affordable housing apartment complex because the City of Newton’s aldermen decided against amending a municipally owned negative easement that prohibited residential development on that parcel. Cabot then attempted to seek the needed amendment from Newton’s Zoning Board of Appeals (ZBA). Abiding by precedent, the Court held that Chapter 40B does not grant the ZBA authority to amend a municipally owned deed restriction, which is a property right; the power to do so rests solely with the City’s aldermen.

The Newton parcel in question is subject to a 99-year deed restriction originally recorded by the City in 1968. The deed restriction contains limits for building size, location, and use. It requires that any buildings on the parcel be for “certain, but not all, of the uses permitted in a limited manufacturing district.”  Since 1971, the aldermen had granted 20 amendments to the parcel’s deed restriction, allowing development for purposes outside of the enumerated limited manufacturing district uses.

In 2014, the plaintiffs purchased a 6.3-acre subparcel that is subject to the deed restriction in order to build the 334-unit apartment complex. In order to bypass the deed restriction requirements, Cabot asked the City aldermen for an amendment, which was denied.  The plaintiffs also asked the ZBA to “waive” the deed restriction purportedly under its Chapter 40B authority to issue “permits and approvals” otherwise normally granted by local agencies. The ZBA found that waiving or modifying the deed restriction was outside of its authority. On appeal, the Housing Appeals Committee (HAC) agreed. The developer again appealed, but was this time rebuffed by the Massachusetts Land Court, which held that neither the ZBA nor HAC had authority to require the city amend the deed restriction under Chapter 40B. The Supreme Judicial Court affirmed.

To streamline the permitting process so that citizens can readily benefit from affordable housing created under Chapter 40B, the statute empowers local zoning boards to issue “permits or approvals” that the Court has defined, functionally, as “authorizations given out by local permitting agencies, and the types of permissions that these agencies typically grant” whether related or unrelated to zoning. In 135 Wells Avenue, the Court rejected Cabot’s proposed expansion of this functional definition of “permits or approvals” to include the amendment of municipally owned deed restrictions relying on the “fundamental distinction between the disposition of a property right and the allowance of a permit or approval….” The Court found no difference between this case and an earlier decision where it had held that HAC could not require a local board to order a town to grant an access easement over town land pursuant to the board's power to grant “permits or approvals.”

Nor were prior amendments to the restrictive covenant the functional equivalent of “permits or approvals” because the aldermanic process followed in allowing these amendments mimicked the ZBA’s permit-granting procedures: an application to the aldermen, a review procedure, and the issuance of an authorization to use land in a certain manner. The Court held that, “the aldermen were not sitting as a local permitting authority when allowing the amendments pursuant to G. L. c. 40, § 3, [governing the power to hold, lease and convey property] and the amendments, which affected a real property interest held by the [C]ity, were not the same types of permissions as regulations concerning "`building construction and design, siting, zoning, health, safety, [or] environment.’" Finally, the Court applied its ruling to both positive and negative easements since, as to this issue of possible amendment by a local board, there was no valid differentiation between the two types of easements.