SB 0454

SB 454-FN - AS INTRODUCED

AN ACT requiring reasonable and realistic opportunities for the development of family/workforce housing.

SPONSORS: Sen. Hollingworth, Dist 23

This bill creates a family/workforce housing chapter in the RSA and imposes certain requirements relative to the development of family/workforce housing.

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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

AN ACT requiring reasonable and realistic opportunities for the development of family/workforce housing.

Be it Enacted by the Senate and House of Representatives in General Court convened:

I. The state of New Hampshire is experiencing an acute shortage of housing that is affordable for a large number of working households. For low wage households and households on fixed incomes, this shortage creates an immediate and dangerous risk of homelessness.

II. The shortage of affordable family/workforce housing also threatens the state's capacity for economic growth by limiting the ability of workers to locate housing within a reasonable distance of their workplace.

III. Notwithstanding the severe unmet need for affordable family/workforce housing, many municipalities regard the creation of such housing, especially for families with children, as a serious financial burden. As a result, the creation of family/workforce housing that is vital to the well being of the people and state as a whole has been severely curtailed, and the free market has been prevented from responding to the state's housing shortage.

IV. It is necessary to encourage the private and non-profit sectors to address the critical shortage of affordable housing by reducing unnecessary regulatory barriers to the development of such housing.

V. The general welfare of the state requires that all but its poorest municipalities be required to plan for the accommodation of family/workforce housing and to ensure that their local land use ordinances make reasonable provisions therefor.

2 Master Plan Purpose and Description; Family/Workforce Housing. RSA 674:2, III is repealed and reenacted to read as follows:

III. A housing section that identifies existing housing resources and addresses the current and future need for family/workforce housing as defined in RSA 674-A:2, I. The housing needs identified shall include both the need for family/workforce housing within the municipality and a reasonable share of the regional need for such housing as identified in the regional housing needs assessment performed by the regional planning commission, pursuant to RSA 36:47, II. This section shall be updated within 6 months of the publication of the revised 5-year regional housing needs assessment published by the regional planning commission.

3 Regional Planning Commissions; Regional Housing Needs Assessment; Family/Workforce Housing. RSA 36:47, II is repealed and reenacted to read as follows:

II. For the purpose of assisting municipalities in complying with RSA 674:2, III, each regional planning commission shall compile a regional housing needs assessment which shall include an assessment of the regional need for family/workforce housing, as defined in RSA 674-A:2, I, which shall be developed in accordance with a methodology developed by the office of state planning in consultation with the New Hampshire housing finance authority. The regional housing needs assessment shall be updated every 5 years and made available to all municipalities in the planning region.

4 New Chapter; Family/Workforce Housing. Amend RSA by inserting after chapter 674 the following new chapter:

I. Except as provided in paragraph II of this section, every municipal land use ordinance shall provide reasonable and realistic opportunities for the development of family/workforce housing, as defined in RSA 674-A:2, I, for both families and individuals, consistent with the needs identified in the housing section of the master plan developed pursuant to RSA 674:2, III. In this chapter, the term "municipal land use ordinances" includes zoning, subdivision, site plan, growth management, impact fee, and other such municipal ordinances and by-laws. The collective impact of all such ordinances on a proposal for the development of family/workforce housing shall be considered in determining whether opportunities for the development of family/workforce housing are reasonable and realistic.

II. Notwithstanding the provisions of paragraph I, no municipality in which the equalized value per capita is in the lowest 25 percent of the municipalities in the state shall be subject to an obligation to provide reasonable opportunities for the creation of family/workforce housing. The determination as to which municipalities are in the lowest 25 percent of the state in equalized value per capita shall be made by the department of revenue administration.

674-A:2 Definitions. In this chapter, the terms set forth below shall have the following meanings:

I. "Family/workforce housing" means a housing unit which is affordable to a household with income of 80 percent or less of the median income of the region in which the housing is located, adjusted for the number of persons in the household.

II. "Multi-family housing" means a building or structure containing 3 or more dwelling units, each designed for occupancy by an individual household.

III. "Realistic opportunities for the development of family/workforce housing" means whether a person can develop economically viable family/workforce housing, as defined in RSA 674-A:2, I, within the framework of the municipality's land use regulations.

IV. "Reasonable opportunities for the development of family/workforce housing" means the amount of vacant, developable land on which family/workforce housing, as defined in RSA 674-A:2, I, is permitted; or in municipalities which are largely built up, the amount of property which is reasonably available for lawful development or redevelopment as family/workforce housing.

under any program to assist the creation of rental units which would be affordable to households at 80 percent or less of the median income of the county or metropolitan area in which the dwelling unit is located, as determined from time-to-time by the U.S. Department of Housing and Urban Development, adjusted for family size. As used in this paragraph, "affordable" means that the rent plus utilities for the dwelling unit does not exceed 30 percent of the income of a family earning 80 percent of the area median income. In order to qualify as family/workforce housing under this paragraph, the developer must make a binding commitment that such units will remain affordable for not less than 20 years.

(b) Any non-subsidized rental housing project in which the owner makes a legally-binding commitment for at least 15 years to maintain the rent in at least 25 percent of the dwelling units at no more than the fair market rent, adjusted for bedroom size for the county or metropolitan area in which the dwelling unit is located, as determined annually by the U.S. Department of Housing and Urban Development.

(1) Which is initially purchased by a family earning no more than 80 percent of the median income for a family of 4 for the county or metropolitan area, as published by HUD from time-to-time, where the total cost of mortgage principal and interest, property taxes, association fees and homeowner's insurance does not exceed 33 percent of the maximum allowed income of the purchaser. Calculation of housing costs shall be based on current taxes, a 30-year fixed rate mortgage, a 5 percent down payment, and prevailing mortgage rates within the area.

(2) For which deed restrictions or some other enforceable mechanism are in place requiring that the home be sold to a family earning no more than 80 percent of median income as set forth above for a period of not less than 15 years; or there is an equity-sharing arrangement by which a homeowner who sells the premises less than 15 years after purchasing it contributes a share of the equity in said home to a non-profit family/workforce housing development organization, in accordance with written standards promulgated by the New Hampshire housing finance authority.

(d) Manufactured housing, as defined in RSA 674:31, is placed in a manufactured housing park as defined in RSA 205-A:1.

(e) Rental units within a structure that is lawfully converted from a single family home to a structure containing 2 or more dwelling units.

VI. "In-law apartment" means a separate dwelling unit designed for occupancy by no more than 2 people created largely within an existing single family home which does not increase the overall size of the structure by more than 33 percent.

I. Any interested party who alleges that the housing section of a municipality's master plan fails to reasonably identify the need for family/workforce housing, as required by RSA 674:2, III, or that the municipality's land use regulations fail to comply with RSA 674-A:1, may bring an action for declaratory judgment in the superior court.

II. In determining whether a municipality's master plan reasonably identifies its need for family/workforce housing, the court shall consider all relevant data including, but not limited to:

(a) The most recent available data regarding housing costs, housing supply, and household income for the municipality and region from the United States Census.

(b) Data regarding housing supply and anticipated population growth generated by the office of state planning.

(d) Regional housing needs assessment developed by the appropriate regional planning commission pursuant to RSA 36:47, II.

(e) Data compiled by the department of employment security regarding anticipated job growth.

III. In determining whether a municipality is in compliance with RSA 674-A:1, the court shall consider the factors set forth in RSA 674-A:4, V.

IV. If the superior court rules that the housing section of the town's master plan does not reasonably identify the need for family/workforce housing as required by RSA 674:2, III or that the municipality's land use regulations fail to comply with RSA 674-A:1, it shall:

(a) Issue a declaratory judgment declaring that due to the municipality's failure to comply with RSA 674:2, III or RSA 674-A:1, in any petition brought pursuant to RSA 674-A:4, the municipality shall have the burden of proving one of the defenses set forth in RSA 674-A:4, VI and, if it fails to meet its burden, the plaintiff in such action shall be entitled to the relief set forth in RSA 674-A:4, VII or VIII.

(b) Award plaintiff reasonable attorney's fees and costs, including expert witnesses' fees.

V. If the court finds that the plaintiff's action is frivolous or not brought in good faith, it shall award reasonable attorney's fees to the municipality.

VI. In this section, the term "interested party" means a landowner in the municipality, a developer of residential real estate, or an entity, whether or not incorporated, which on a recurring basis engages in advocacy for family/workforce housing.

I. Notwithstanding the provisions of RSA 677:15 or any other provision of law, any person who proposes target housing, as defined in RSA 674-A:2, V, and whose proposal is denied or unreasonably delayed by the municipality, or is approved with conditions or restrictions which have a substantial adverse impact on the viability of the proposed family/workforce housing development, may bring an action in the superior court to obtain permission to develop the proposal, notwithstanding the failure of the proposal to comply with municipal land use ordinances, and for other relief set forth in this section, provided that such person alleges that any of the following has occurred:

(c) The municipality's master plan or land use ordinances have been declared unlawful in a declaratory judgment issued pursuant to RSA 674-A:3, IV.

II. A hearing on the merits shall be held within 6 months of the date on which the action was filed unless counsel for the parties agree to a later date, or the court so orders for good cause.

III. Notwithstanding the provisions of RSA 677:2 and 3, a person who brings an action pursuant to paragraph I of this section shall not be required to request a rehearing before the zoning board of adjustment, board of appeals, or local legislative body provided, however, that no less than 15 days prior to bringing such action, written notice of the person's intent to file is provided to the chairperson of the board of selectmen in a town, or the mayor of a city. Such notice shall be provided by certified mail.

IV. In trials held pursuant to paragraph I of this section, the plaintiff shall have the burden of proving the municipality's non-compliance with RSA 674-A:1, or RSA 674:2, III, unless, pursuant to RSA 674-A:3, IV, a declaratory judgment has issued against the municipality; in which case, the burden shall be on the municipality to prove the existence of one of the defenses set forth in paragraph VI of this section. If, subsequent to the issuance of a declaratory judgment against a municipality pursuant to RSA 674-A:3, IV, the municipality establishes that it has amended its master plan and/or land use ordinances or both so as to comply with RSA 674:2, III or RSA 674-A:1, judgment shall issue in favor of the municipality.

V. In determining whether a municipality is in compliance with RSA 674-A:1, I, the court shall consider the following factors:

(a) Whether multi-family and manufactured housing parks are permitted as of right.

(b) The amount of vacant developable land, in which manufactured housing parks and multi-family housing are permitted.

(d) The number of family/workforce housing units created in the municipality over the 5-year period immediately prior to the filing of the action pursuant to RSA 674-A:4.

(e) The number of family/workforce housing units created over the 5-year period immediately prior to filing the action pursuant to RSA 674-A:4, in the region defined by the jurisdiction of the regional planning commission in which the municipality is located.

(f) Whether the municipality has adopted minimum lot size, set-back, buffer, or other requirements designed to protect the environment which are more restrictive than similar state regulations.

(g) The extent to which opportunities for the creation of multi-family or manufactured housing are subject to municipal review under vague and subjective standards.

(h) Whether the municipality permits multi-family dwelling units which are destroyed by fire or natural causes to be replaced on a one-to-one basis.

(i) The extent to which the municipality permits the conversion of single-family homes to multi-family dwellings.

(j) The extent to which the municipality permits single family homeowners to create "in-law apartments."

(k) Any other factors that would explain why, notwithstanding reasonable opportunities for the creation of family/workforce housing, a reasonable number of such housing units have not been created.

VI. If the court finds, or in a prior proceeding pursuant to RSA 674-A:3 has found, that the municipality has failed to comply with RSA 674-A:1 or RSA 674:2, III, the court shall award plaintiff the remedies set forth in paragraph VII or VIII of this section, unless the municipality proves, by a preponderance of the evidence, one of the following defenses:

(a) Its decision rejecting or modifying plaintiff's proposal is necessary to protect substantial public interests in health or safety and that the public interests clearly outweigh the need for family/workforce housing.

(b) The proposed housing fails to comply with a statewide building code, if any, or relevant sections of the most recent edition of the International Building Code 2000, the International Mechanical Code 2000, the International Fire Prevention Code 2000, the International Residential Code 2000, the International Fuel Gas Code 2000, the International Plumbing Code 2000, the International Energy Conservation Code 2000, as published by the International Code Council, or the National Electric Code 1999.

(d) The proposed development would increase the number of year-round dwelling units in the municipality by more than 40 in a municipality with less than 2,000 year-round dwelling units or more than 2 percent in all other municipalities.

(e) The proposed development would be located in an area that is zoned for industrial use and which does not permit residential uses.

(f) The proposed development is located on property that has been designated by the state or federal government for historic preservation or environmental protection.

VII. If the court finds that the municipality has violated RSA 674-A:1, I and the defendant fails to establish one of the defenses set forth in RSA 674-A:4, V, the court shall issue a timely decision:

(a) Directing the municipality to issue the necessary permits to enable the plaintiff's project to proceed forthwith.

(b) Award costs, including experts' fees, and reasonable attorney's fees to the plaintiff.

(c) Award restitution in the amount of increased costs that have or will be incurred due to the delay in completing the project caused by the municipality.

(d) In the case of development which was unable to proceed due to the passage of time since the municipality's initial decision, award the plaintiff restitution of all reasonable expenses incurred in trying to develop the project, unless the court finds that the plaintiff did not act in good faith in abandoning the project.

VIII. If the court finds that the development, as proposed, threatens the public interest in health or safety, but that reasonable changes to the proposal could cure the threat, it shall issue a decision identifying the nature and extent of the health or safety problem and the nature of changes to the proposal that would be necessary to adequately deal with it and remand the matter to the municipality for further action consistent with the court's decision. The municipality shall take appropriate action on the remand within 60 days of the court's order. If the decision of the municipality that is challenged in the petition was based on the health or safety considerations cited in the court's decision, no attorney's fees or damages shall be awarded to the plaintiff.

IX. If the court finds that the plaintiff's action is frivolous or initiated in bath faith, it shall award costs and attorney's fees to the municipality.

I. An appeal of orders issued pursuant to RSA 674-A:4 shall be to the supreme court pursuant to the rules of such court.

II. If the supreme court declines to accept the appeal, or if the court affirms the superior court order, but the plaintiff in good faith abandons the proposed project due to factors which have arisen since the entry of the superior court order, the supreme court shall remand the case to the superior court to determine an appropriate award of restitution and attorney's fees pursuant to RSA 674-A:4, VII.

III. Attorney's fees shall be awarded to the municipality upon a finding that the plaintiff's appeal was frivolous or was not brought in good faith.

5 Inclusionary Zoning; Family/Workforce Housing. Amend RSA 674:21, IV(a) to read as follows:

(a) "Inclusionary zoning" means land use control regulations which provide a voluntary incentive or benefit to a property owner in order to induce the property owner to produce family/workforce housing [~~units which are affordable to persons or families of low and moderate income~~] or require that such housing units be included in any housing development that contains more than a specified number of total dwelling units inclusionary zoning includes, but is not limited to, density bonuses, growth control exemptions, and a streamlined application process.

6 New Paragraph; Office of State Planning; Family/Workforce Housing; Assistance to Municipalities and Regional Planning Commissions. Amend RSA 4-C:8 by inserting after paragraph IV the following new paragraph:

V. For the purpose of assisting municipalities to comply with RSA 674:2, III and 674-A:1, the office of state planning shall:

(a) At the request of a municipal planning board, review the municipality's master plan, review any other municipal land use regulations submitted by the municipality, and suggest changes in the documents submitted which would assist the municipality in meeting its obligations under RSA 674-A:1 or 674:2, III.

(b) Make available, upon request from a municipality, data produced or collected by the state or federal government in determining its need for family/workforce housing.

(c) Promulgate a model housing section of a master plan for municipalities of various sizes for guidance to municipal planning boards.

(d) Develop, in conjunction with the New Hampshire housing finance authority, a uniform methodology for the development of the regional housing needs assessment required by RSA 36:47, II.

AN ACT requiring reasonable and realistic opportunities for the development of family/workforce housing.

The Office of Legislative Budget Assistant is unable to complete a fiscal note for this bill as it is awaiting information from an agency.