Developers Smell Opportunity In Boston’s Suburbs As State Finalizes New Density Minimums
The years-long push to encourage more housing development in Boston’s suburbs took a major step forward this month.
Gov. Charlie Baker on Aug. 10 finalized the state’s rules for the new law that requires communities with transit stations to create multifamily zoning districts. The rules set a minimum number of multifamily units that each community must allow, and in total, they would add more than 280,000 units of development potential.
The ball is now in the courts of towns and cities to create the required zoning districts, and then it will be up to developers to start building new projects in a host of suburban communities that have historically been resistant to multifamily development.
Developers told Bisnow that they see the law as making it easier to build multifamily in these towns because they can pursue as-of-right projects, meaning they fit within the allowed zoning and don’t require lengthy processes to rezone properties. However, these developers are still waiting for the cities and towns to enact the zoning before diving into projects in new areas.
“As you go to more suburban parts of Massachusetts that haven't been at the forefront of planning committees, I think in towns that aggressively accept this bill and move on quickly, you'll see housing development there very, very quickly thereafter,” said Gary Kerr, managing director of U.S. East development at Greystar.
The MBTA Communities law, passed last year, applies to 175 towns and cities in the Greater Boston area, including those that have subway and commuter rail stations, plus some adjacent communities.
The state spent months crafting the rules that set specific unit minimums for each community, and the finalized version would trim away some requirements for small towns that don’t have train stations. The final rules reduced the minimum number of allowable units required across the 175 areas by 18% from 344,100 to 283,500, according to the Boston Globe.
The changes were made after the state received pushback from dozens of communities afraid of being overwhelmed by development, the Globe reported. For the small coastal town of Nahant, the initially proposed rules would have required it to allow a minimum of 750 units, potentially increasing its housing stock by 40%, but the final guidelines reduced it to 84 units.
While some communities saw reductions, the rules would still require thousands of new units to be allowed in many cities and towns in the Boston area. The rules require Cambridge to allow a minimum of more than 13,000 units. Somerville and Newton have minimums of more than 8,000 units, while Brookline, Malden, Lowell, Medford and Revere all have minimums over 6,000 units.
“Towns really can begin planning now about how they're going to get started on putting the new zoning in place to allow multifamily housing and putting us on a path to achieving our state's housing needs,” said Eric Shupin, director of policy at the Citizens’ Housing and Planning Association.
The state has a dire need for more housing. A report from nonprofit Up for Growth found that Massachusetts has a housing deficit of more than 108,000 homes, and its deficit increased by more than 100% from 2012 to 2019, the Boston Herald reported. Massachusetts Secretary of Housing and Economic Development Mike Kennealy in April said the state has a housing crisis and would need 200,000 new units to meet the need.
The pandemic led to a slowdown of multifamily construction in 2020, but the market has bounced back, and more than 19,000 units were underway in the Boston area as of June 30, according to Colliers' Q2 Multifamily Housing Report. The report highlighted the MBTA Communities law as a way to boost more housing in eastern and central Massachusetts communities.
“Over time, I think that potential is certainly there,” Colliers Research Director Jeff Myers said of the law’s ability to create thousands of new units.
The law requires rapid transit communities to put new zoning districts in place by Dec. 31, 2023. Towns with commuter rails and adjacent communities must put in place the districts by the end of 2024.
Procopio Cos. CEO Mike Procopio, an active multifamily developer in the Boston suburbs, said that while the impact won’t be immediate, he thinks it will eventually be substantial.
“I think this will ultimately prove to be more impactful than 40B, under which hundreds of thousands of units have been constructed,” he said.
A state statute enacted in 1969, 40B enabled local zoning boards of appeals to approve affordable housing developments if at least 20% to 25% of the units had long-term affordability restrictions, usually 30 years. The statute enabled some towns like Needham to surpass its 40B requirement and bring more affordable housing into the community.
Kent Gonzales, vice president at development firm Northland, said that the MBTA Communities law makes building in the suburbs easier by creating more as-of-right zoning districts.
"The special permit process is very discretionary; it's basically everything's negotiable,” he said. “Where an as-of-right process makes it more predictable for the developer as to what they can do."
Gonzales said that one flaw in the MBTA Communities law is that cities like Newton that have multiple stations are required to zone for thousands of units that they might not have the infrastructure to support.
“Most of this should have been focused more directly rather than with overarching percentages that they've imposed on different communities depending on the number of stations or the size of their community,” Gonzales said.
Developers say that the areas that will likely see the most activity will be gateway cities — communities with historically industrial economies that have increasingly faced challenges as a result of economic repositioning — and other commuter towns.
“I believe you’ll see many developers continuing to focus on gateway cities and locations further afield from the city, but likely still within Greater Boston’s 495 Corridor, as we tend to see that this is where the majority of Boston commuters live,” Procopio said.
In February, Procopio said at a Bisnow event that navigating the approval process to build multifamily development in suburban towns typically takes years, adding that “it’s absolutely absurd trying to get stuff done out there.” He said this law could change that.
“This requirement will streamline the process because, at a minimum, there will be some level of by-right zoning,” Procopio said.
Greater Boston Real Estate Board CEO Greg Vasil said he thinks that there needs to be more done to push certain communities to comply with the law.
“I think it's a good start, but I wonder if we need something more," Vasil said. "It's something that has more behind it, like a new type of 40B. Whereas communities have a number and if they don't reach the number, then developers come in and trump local zoning. A lot of communities don't like 40B, but it has been successful.”
Communities that fail to comply with the law won't be eligible for money from certain funds, including the Housing Choice Initiative, the Local Capital Projects Fund and the MassWorks Infrastructure program.
“The state also has to make sure that by putting pressure on these communities to increase the capacity and more housing, they also need to make sure that they're doing their part to upgrade and maintain that MBTA infrastructure so that we don't have all of this housing along these MBTA corridors and then start experiencing the challenges that we're having with the Green Line and the Orange Line,” Gonzales said.
CORRECTION, AUG. 31, 3:35 P.M. ET: A previous version of this story misspelled Jeff Myers' last name. This story has been updated.