SECTION XX.  Section 2 of chapter 40R of the General Laws, as so appearing, is hereby amended by inserting after the definition of “Approved smart growth zoning district” the following definition:

              “Approved starter home zoning district”, a starter home zoning district that has been adopted by a city or town and approved by the department in accordance with this chapter and the regulations of the department, so as to be eligible for the receipt of financial and other incentives. The department may revoke its approval if the obligations of the city or town are not met.

              SECTION XX.  Said section 2 of said chapter 40R, as so appearing, is hereby further amended by inserting after the definition of “Approving authority” the following definition:-

              “Area of concentrated development”, a center of commercial activity within a municipality, including town and city centers, other existing commercial districts in cities and towns, and existing rural village districts.

              SECTION XX. Said section 2 of said chapter 40R, as so appearing, is hereby further amended by striking out the definition of “Developable land area” and inserting in place thereof the following definition:-

              “Developable land area”, that area within an approved smart growth or starter home zoning district that can be feasibly developed into residential or mixed use development determined in accordance with regulations of the department. Developable land area shall not include: (1) land area that is already substantially developed, including existing parks and dedicated, perpetual open space within such substantially developed portion; (2) open space designated by the city or town as provided in section 6; or (3) areas exceeding one-half acre of contiguous land that are unsuitable for development because of topographic features or for environmental reasons, such as wetlands.

              It shall include the land area occupied by or associated with underutilized residential, commercial, industrial or institutional buildings or uses that have the potential to be recycled or converted into residential or mixed use developments as determined in accordance with regulations of the department.

              SECTION XX.  Said section 2 of said chapter 40R, as so appearing, is hereby further amended by striking out the definition of “Eligible locations” and inserting in place thereof the following definition:-

              “Eligible locations”, areas that by virtue of their infrastructure, transportation access, existing underutilized facilities, or location make highly suitable locations for residential or mixed use smart growth zoning districts or starter home zoning districts, including without limitation (1) areas near transit stations, including rapid transit, commuter rail and bus and ferry terminals; or (2) areas of concentrated development, including town and city centers, other existing commercial districts in cities and towns, and existing rural village districts.

              SECTION XX.  Said section 2 of said chapter 40R, as so appearing, is hereby further amended by striking the definitions of “Letter of eligibility” and “Mixed use development” and inserting in place thereof the following 4 definitions:-

              “Housing production plan”, an affordable housing plan adopted by a municipality and approved by the department in accordance with its regulations.

              “Housing production summary”, a detailed summary of the city or town’s: (1) affordable housing production history, (2) housing needs and housing demand assessment, (3) analysis of development constraints and capacity, (4) current housing goals and strategy for achieving those goals and (5) proposed locations for affordable housing production.

              “Letter of eligibility”, a letter to a city or town to be issued by the department within 60 days of receiving a complete and approvable application from a city or town for approval of a smart growth or starter home zoning district.

              “Mixed use development”, a development containing a mix of residential uses and non-residential uses, including, without limitation: commercial, institutional, industrial or other uses; all conceived, planned and integrated to create vibrant, workable, livable and attractive neighborhoods.

              SECTION XX.  Said section 2 of said chapter 40R, as so appearing, is hereby further amended by striking out the definition of “Project” and inserting in place thereof the following 2 definitions:-

              “Production bonus payment”, a one-time payment to a municipality from the Smart Growth Housing Trust Fund, established in section 35AA of chapter 10 for each housing unit of new construction that is created in a starter home zoning district pursuant to the starter home overlay provisions of the applicable zoning ordinance or by-law.             

              “Project”, a proposed residential or mixed-use development within a smart growth or starter home zoning district.

              SECTION XX.  Said section 2 of said chapter 40R, as so appearing, is hereby further amended by inserting after the definition of “Smart growth zoning district certificate of compliance” the following 3 definitions:-

              “Starter home”, a single family home not exceeding 1,850 square feet in heated living area; provided, however that nothing herein shall preclude a city or town from adopting a starter home zoning district that would permit construction on a single lot in a starter home zoning district of an accessory dwelling unit of 600 square feet or less on the same lot as a starter home.

              “Starter home zoning district'', a zoning district consisting of not less than 3 contiguous acres of developable land area, adopted by a city or town pursuant to this chapter, that is superimposed over 1 or more zoning districts in an eligible location, within which a developer may elect to either : (1) develop starter homes in accordance with requirements of the starter home zoning district ordinance or by-law or (2) develop a project in accordance with requirements of the underlying zoning district, and otherwise consistent with department guidance.

              “Starter home zoning district certificate of compliance”, a written certification by the department in accordance with section 7.

              SECTION XX.  Section 3 of said chapter 40R, as so appearing, is hereby amended by inserting, after the word “district”, in lines 2 and 7, the following words:-   or starter home zoning district.

              SECTION XX.  Said section 3 of said chapter 40R, as so appearing, is hereby further amended by inserting after the word “districts”, in line 15, the following words:-  or starter home zoning districts.

              SECTION XX.  Section 4 of said chapter 40R, as so appearing, is hereby amended by inserting after the word “growth”, in line 3,  the following words:-  or starter home.

              SECTION XX.  Said section 4 of said chapter 40R, as so appearing, is hereby further amended by inserting after the word “district”, in line 14,  the following words:- or starter home zoning district.

              SECTION XX.  Said chapter 40R is hereby amended by striking out sections 5 to 10, inclusive, as so appearing,  and inserting in place thereof the following 6 sections:-

              Section 5.  The chief executive of a city or town desiring to adopt a smart growth zoning district or starter home zoning district ordinance or by-law shall submit the necessary materials to the department for a preliminary determination of eligibility for approval. The information in the application shall:

              (a)               identify and describe the boundaries of the proposed smart growth zoning district or starter home zoning district;

              (b)               identify and describe the developable land area within the proposed smart growth zoning district or starter home zoning district;

              (c)               as to smart growth zoning districts only, identify and describe other residential development opportunities for infill housing and the residential re-use of existing buildings and underutilized buildings within already developed areas;

              (d)               include any comprehensive housing plan or housing production plan previously adopted by the city town or, if the city or town has no comprehensive housing plan or housing production plan, a housing production summary, as set forth in section 8;

              (e)               include a copy of the proposed smart growth district or starter home zoning district ordinance or by-law;

              (f)               by narrative and exhibits, establish the elements set forth in section 6.

              Section 6.  (a)               A proposed smart growth zoning district or starter home zoning district shall satisfy the following minimum requirements:

              (1)               Each proposed district shall be located in an eligible location.

              (2)               The zoning for each proposed smart growth zoning district shall provide for residential use to permit a mix of housing for families, individuals, persons with special needs and the elderly.

              (3)               Housing density in a proposed smart growth district shall be at least: 20 units per acre for multi-family housing on the developable land area, 8 units per acre for single-family homes on the developable land area, and 12 units per acre for 2 and 3 family buildings on the developable land area.  Housing density in a proposed starter home district shall satisfy the following criteria:  (a) the density shall be no less than 4 units per acre of developable land area; (b) the development shall emphasize smart growth principles of development, such as cluster development and other forms of development providing for common open space usable for passive or active recreational activities, or the use of low-impact development techniques; and (c) at least 50 per cent of the starter homes to be developed in a proposed starter home district, excluding accessory dwelling units, must contain 3 or more bedrooms.

              (4)               The zoning ordinance or by-law for each proposed smart growth zoning district shall provide that not less than 20 per cent of the residential units constructed in projects of more than 12 units shall be affordable housing and shall contain mechanisms to ensure that not less than 20 per cent of the total residential units constructed in each proposed district shall be affordable housing.

              (5)              The zoning ordinance or by-law for each proposed starter home zoning district shall provide that, as a condition of the increased density permitted in a starter home zoning district, the following affordability threshold must be met:

(i)At least 15 per cent of the housing units shall be affordable to occupants or families with incomes at or below 80 per cent of the median income for the area in which the city or town is located as defined by the United States Department of Housing and Urban Development (“AMI”); and

(ii)At least 25 per cent of the housing units assisted by the UCH-TIF agreement shall be affordable to occupants or families with incomes at or below 110 per cent of the AMI, including the 15 per cent referenced in subsection (1) above; and

(iii)The property shall satisfy the requirements of any existing inclusionary zoning ordinance, bylaw, or executive order in the city or town, under which the property owner is required to make a portion of the housing units affordable to low- or moderate-income households.

Provided further that the zoning ordinance or by-law for each proposed starter home district shall contain mechanisms to ensure that the required percentage of the total residential units constructed in each proposed starter home district shall meet such affordability requirements, including an affordable housing restriction, as defined in section 31 of chapter 184, that has a term of not less than 30 years.

              (6)               A proposed smart growth zoning district shall permit infill housing on existing vacant lots and shall allow the provision of additional housing units in existing buildings, consistent with neighborhood building and use patterns, building codes and fire and safety codes.

              (7)               A proposed smart growth zoning district or starter home zoning district shall not be subject to limitation of the issuance of building permits for residential uses or a local moratorium on the issuance of such permits.  In addition, a proposed starter home zoning district shall not be subject to any municipal environmental or health ordinances, bylaws or regulations that exceed applicable requirements of state law or regulation, unless the department of environmental protection has determined  that specific local conditions warrant imposition of more restrictive local standards, or  the imposition of such standards would not render infeasible the development contemplated under the comprehensive housing plan, housing production plan or housing production summary submitted as part of the application for such district.

              (8)               A proposed smart growth zoning district or starter home zoning district shall not impose restrictions on age or any other occupancy restrictions on the district as a whole. This shall not preclude the development of specific projects within a smart growth zoning district that may be exclusively for the elderly, the disabled or for assisted living. Not less than 25 per cent of the housing units in such a project within a smart growth zoning district shall be affordable housing, as defined in section 2.

              (9)               Housing in a smart growth zoning district or starter home zoning district shall comply with federal, state and local fair housing laws.

              (10)               A proposed smart growth zoning district or starter home zoning district may not exceed 15 per cent of the total land area in the city or town. Upon request, the department may approve a larger land area if such approval serves the goals and objectives of this chapter.

              (11)               The aggregate land area of all approved smart growth zoning districts and starter home zoning districts in the city or town may not exceed 25 per cent of the total land area in the city or town.  The department may approve a larger combined land area if the department determines that such approval serves the goals and objectives of this chapter.

              (12)               Housing density in any proposed district shall not over burden infrastructure as it exists or may be practicably upgraded in light of anticipated density and other uses to be retained in the district.

              (13)              A proposed smart growth zoning district or starter home zoning district ordinance or by-law shall define the manner of review by the approving authority in accordance with section 11 and shall specify the procedure for such review in accordance with regulations of the department.

              (b)               A city or town may modify or eliminate the dimensional standards contained in the underlying zoning in the smart growth zoning district or starter home zoning district ordinance or by-law in order to support desired densities, mix of uses and physical character. The standards that are subject to modification or waiver may include, but shall not be limited to; height, setbacks, lot coverage, parking ratios and locations and roadway design standards. Modified requirements may be applied as of right throughout all or a portion of the smart growth zoning district or starter home zoning district, or on a project specific basis through the smart growth zoning district or starter home zoning district plan review process as provided in the ordinance or by-law. A city or town may designate certain areas within a smart growth zoning district or starter home zoning district as dedicated perpetual open space through the use of a conservation restriction as defined in section 31 of chapter 184 or such other means as may be created by state law. The amount of such open space shall not be included as developable land area within the smart growth zoning district or starter home zoning district. Open space may include an amount of land equal to up to 10 per cent of what would otherwise be the developable land area if the developable land would be less than 50 acres, and 20 per cent of what would otherwise be the developable land area if the developable land area would be 50 acres or more.

              (c)               The zoning for a proposed smart growth zoning district may provide for mixed use development.

              (d)               A smart growth zoning district or starter home zoning district may encompass an existing historic district or districts. A city or town, with the approval of the department, may establish a historic district in an approved smart growth zoning district or starter home zoning district in accordance with chapter 40C, so long as the establishment of the historic district meets the requirements for such a historic district and does not render the city or town noncompliant with this chapter, as determined by the department. The historic districts may be coterminous or non-coterminous with the smart growth zoning district or starter home zoning district. Within any such historic district, the provisions and requirements of the historic district may apply to existing and proposed buildings.

              (e)               A city or town may require more affordability than required by this chapter, both in the percentage of units that must be affordable, and in the levels of income for which the affordable units must be accessible, provided, however, that affordability thresholds shall not unduly restrict opportunities for development.

              (f)               With respect to a city or town with a population of fewer than 10,000 persons, as determined by the most recent federal decennial census, for hardship shown, the department may, pursuant to regulations adopted under this chapter, approve zoning for a smart growth zoning district with lower densities than provided in this chapter, if the city or town satisfies the other requirements set forth in this section; provided, however, that such approval shall not be withdrawn solely because, in a future census, the population of the city or town exceeds 10,000 persons.

              (g)               Any amendment or repeal of a zoning ordinance or by-law affecting an approved smart growth zoning district or starter home zoning district shall not be effective without the written approval by the department. Each amendment or repeal shall be submitted to the department with an evaluation of the effect on the city or town's comprehensive housing plan or housing production plan, if any.  Amendments shall be approved only to the extent that the district remains in compliance with this chapter. If the department does not respond to a complete request for approval of an amendment or repeal within 60 days of receipt, the request shall be deemed approved.

              (h)               Nothing in this chapter shall affect a city or town's authority to amend its zoning ordinances or by-laws under chapter 40A, so long as the changes do not affect the smart growth zoning district or starter home zoning district.

              Section 7.  (a)  On or before October 1 of each year after the year of approval of a district by the department, the department shall send a smart growth zoning district certificate of compliance or starter home zoning district certificate of compliance, as applicable, to each city or town with an approved district. In order to receive such a certificate, the city or town shall verify within the time specified by the department that:

              (1)               the city or town has adopted and approved a smart growth zoning district or a starter home zoning district, as applicable;

              (2)               the certification has not been revoked by the department;

              (3)               the district is being developed in a manner that reasonably complies with the applicable minimum requirements set forth in section 6 for housing density and affordability;

              (4)               the approving authority has not unreasonably denied plans for projects, or has only denied plans for projects in a manner consistent with its smart growth zoning district ordinance or by-law or starter home zoning district ordinance or by-law, as applicable, the city or town's comprehensive housing plan, housing production plan, or the housing production summary submitted with the city or town’s initial application for approval by the department, as applicable, and this chapter.

              (b)               If the department is unable to certify compliance, the department shall hold a public hearing subject to chapter 30A. If the department concludes that the city or town is in material noncompliance with the requirements set forth in this section, the department may revoke certification. A revocation of certification shall be recorded with the registry of deeds or land court registry district for the county or district within which the city or town is located, indexed in the grantor index under the name of the city or town. Any revocation of certification or other sanctions imposed by the department shall not affect the validity of the smart growth zoning ordinance or by-law or starter home zoning district ordinance or by-law, as applicable, or the application of such ordinance or by-law to land, development or proposed development within the smart growth zoning district.

              Section 8.  A city or town shall submit to the department, concurrently with the city or town’s application for a letter of eligibility, either an existing comprehensive housing plan, an existing housing production plan, or a housing production summary.  The plan or summary shall include an estimate of the projected number of units of new construction that could be built in the proposed smart growth zoning district or starter home zoning district. If a city or town has already completed a comprehensive housing plan or housing production plan, the city or town shall submit with its application to the department a description of how the proposed smart growth zoning district or starter home zoning district relates to and will further the goals of its comprehensive housing plan or housing production plan, as well as an estimate of the projected number of units of new construction that could be built within the district.

              Section 9.  Each city or town with an approved smart growth zoning district or starter home zoning district shall be entitled to payments pursuant to this section.

              (a)               The commonwealth shall pay from the trust fund a zoning incentive payment, according to the following schedule:

              Projected Units of

              New Construction               Payment

              Up to 20                             $10,000

              21 to 100                             $75,000

              101 to 200                             $200,000

              201 to 500                            $350,000

              501 or more                             $600,000

              Subject to any conditions imposed by the department as a condition of approving a smart growth zoning district or starter home zoning district, the zoning incentive payment shall be payable upon confirmation of approval of the district by the department.  The projected number of units shall be based upon the zoning adopted in the smart growth zoning district or starter home zoning district, and consistent with either the city or town's comprehensive housing plan or housing production plan, if any, or the housing production summary submitted in accordance with section 8.

              (b)               The commonwealth shall pay from the trust fund a one-time density bonus payment to each city or town with an approved smart growth zoning district and a one-time production bonus payment to each city or town with an approved starter home zoning district. This payment shall be $3,000 for each housing unit of new construction created in the smart growth zoning district and $3,000 for each housing unit of new construction created in the starter home zoning district. The amount due shall be paid on a unit-by-unit basis in accordance with department regulations, upon submission by a city or town of proof of issuance of a building permit for a particular housing unit or units within the district.

              (c)               The executive office of environmental affairs, the executive office of transportation, the department of housing and community development and the secretary of administration and finance shall, when awarding discretionary funds, use a methodology of awarding such funds that favors cities or towns with approved smart growth zoning districts or starter home zoning districts and other approved zoning policies or initiatives that encourage increased affordable housing production in the commonwealth including, but not limited to, inclusionary zoning.

              Section 10.  A city or town may adopt, in accordance with the regulations of the department, design standards applicable to projects undergoing review by the approving authority, to ensure that the physical character of development within the smart growth zoning district or starter home zoning district is complementary to adjacent buildings and structures and is consistent with the city or town’s comprehensive housing plan or housing production plan, if any, and any applicable master plan or plans for the city or town. Such standards may address the scale and proportions of buildings, the alignment, the width and grade of streets and sidewalks, the type and location of infrastructure, the location of building and garage entrances, off-street parking, the protection of significant natural site features, the location and design of on-site open spaces, exterior signs and buffering in relation to adjacent properties. In a smart growth zoning district, the standards shall provide for high-density quality development consistent with the character of building types, streetscapes and other city or town features traditionally found in densely settled areas of the city or town or in the region of the city or town.

              A design standard shall not be adopted if it will add unreasonable costs to residential or mixed-use developments. A design standard shall not unreasonably impair the economic feasibility of proposed projects. The department may disapprove a request for the determination of eligibility for a smart growth zoning district or starter home zoning district on account of a design standard adding such unreasonable costs or unreasonably impairing such feasibility.

              SECTION XX.  Section 11 of said chapter 40R, as so appearing, is hereby amended by striking out, in line 2, the words “district zoning” and inserting in place thereof the following words:- zoning district or starter home zoning district.

              SECTION XX.  Said section 11 of said chapter 40R, as so appearing, is hereby further amended by inserting after the word “district”, in line 11, the following words:- or starter home zoning district.

              SECTION XX.  Said section 11 of said chapter 40R, as so appearing, is hereby further amended by inserting after the word “zoning”, in line 17, the following words:-  district or starter home zoning district.

              SECTION XX.  Said section 11 of said chapter 40R, as so appearing, is hereby further amended by inserting after the word “district”,  in lines 70, 74 and 128,  the following words:-  or starter home zoning district.

              SECTION XX.  Said chapter 40R is hereby amended by striking out section 12, as so appearing, and inserting in place thereof the following section:-

              Section 12.  The department shall be responsible for the administration, review, and reporting on the smart growth zoning district and starter home zoning district programs as provided in this chapter.  The department shall undertake or cause to be undertaken an annual review and the preparation of a report on the programs set forth in this chapter and may require data to be provided by cities and towns with smart growth zoning districts or starter home zoning districts.  The report shall be prepared on the basis of such data and shall be made available to the general public and submitted to the general court annually, not later than November 15 of each year, and shall cover the status of the program through the end of the prior fiscal year. The report shall identify and describe the status of cities and towns that are actively seeking letters of eligibility.  It shall identify approved smart growth zoning districts and starter home zoning districts and the amounts and anticipated timing of one-time density bonus payments and one-time production bonus payments during the prior and current fiscal year. It shall summarize the amount of land areas zoned for particular types of projects in both proposed and approved districts, the number of projects being reviewed by cities and towns under section 11, including the number and type of proposed residential units, the number of building permits issued, the number of completed housing units and their type, and it shall set out the one-time density bonus payments and one-time production bonus payments made to each city or town.  For the then current and the immediately succeeding fiscal years it shall make estimates for the: (i) number and size of proposed new districts; (ii) potential number of residential units to be allowed in new districts; and (iii) anticipated construction activity.

              SECTION XX.  Said chapter 40R is hereby further amended by striking out section 14, as so appearing, and inserting in place thereof the following section:-

              Section 14.  If, within 3 years, no construction has been started within the smart growth zoning district or starter home zoning district, the department shall require the cities and towns to repay to the department all monies paid to the city or town under this chapter for said smart growth zoning district or starter home zoning district.  Said 3 years shall commence on the date of the payment of the zoning incentive payment for said smart growth zoning district or starter home zoning district.  All monies repaid to the department under this section shall be returned to the trust fund.