SECTION 1.  Notwithstanding any general or special law to the contrary, in a city designated by the United States Department of Housing and Urban Development as a renewal community pursuant to the Community Renewal Tax Relief Act of 2000, Public Law 106-554, an eligible location pursuant to chapter 40R of the General Laws may include areas with 1 or more underlying zoning districts where the city has previously incorporated smart growth principles, whether by the superimposing of an overlay district or otherwise in such renewal communities.

SECTION 2.   A city designated by the United States Department of Housing and Urban Development as a renewal community which has a zoning ordinance or by-law that includes an overlay district  enacted after January 1, 2002, for the purpose of  incorporating smart growth principles may calculate units of new construction based on units in the underlying zoning district without regard to the overlay district in order to avoid any punitive effect upon the financial incentive to which the renewal community may be entitled under section 9 of chapter 40R of the General Laws. 

SECTION 3.  An application pursuant to chapter 40R of the General Laws to the department of housing and community development by a city designated as a renewal community shall provide verifying documentation of such designation.”