-: SJC 13221, Zoning Board of Appeals of Milton,
VHDHW Randolph Avenue, LLC.
-: Okay. Attorney Moore.
-: Good morning, Your Honor, may it please the Court.
Patrick Moore on behalf of the town of Milton
Zoning Board of Appeals.
My colleague Donna Mizrahi is with me.
Nearly every Chapter 40B application in the Commonwealth,
including the one at issue here is granted with conditions.
Chapter 40B gives HAC the ability
to review those conditions,
only when they render the project uneconomic.
Here, the proposed development was uneconomic
when it was proposed,
but HAC asserted jurisdiction, nonetheless
giving rise to three reversible errors.
The first is a jurisdictional error.
To give itself the authority to hear and resolve this case,
HAC stretched a regulatory framework
beyond the circumstances it was intended to address.
That gave rise to other issues,
including the second legal error.
HAC failed to define
when economic impact becomes significant,
and then when a condition is material
to that significant impact.
Instead, it impermissibly sat
as a sort of super Zoning Board of Appeals
and adjudicated each condition that was challenged,
giving rise to the third error, adjudicatory error.
Here, the HAC struck a condition
that would've imposed a loop roadway on the project
and replaced it with two other conditions.
-: Before you move- -: But-
-: ... to the roadway.
So I'm a little confused by the argument.
So the developer wants to go forward, even though,
I mean, these are slim profit margin cases, right?
I mean, this is not, you know, international place.
We're talking a about low income housing,
so they wanna go forward.
But then the town of Milton imposes more conditions,
substantially more conditions on the project
and that makes it, you know, not viable for them.
I'm avoiding the uneconomic for a second.
Isn't that clearly what the HAC, you know, can look at
because it prevents the creation of low income housing.
-: Possibly so Your Honor,
the question though is how?
(Justice coughing) Here DHCD
actually holds the regulatory authority
and it's exercised it,
and set a benchmark by which viability can be determined.
Here that benchmark is whether or not the conditions.
-: But you're going in the opposite direction of them.
I can see them, you know, saying, okay,
we're not gonna worry at high, high ends,
but you're going the opposite way.
It just seems counterintuitive to me.
And it seems reasonable
that if it becomes substantially more uneconomic,
meaning this developer was willing
to take a risk at this level, but not at a higher level.
Then HAC can come in here and say,
"No, we want low income housing here."
-: Two points, Your Honor, one very specific,
and one general about the scope of the statute.
The specific is that the essence of this case
really, is the benchmark.
How are these conditions considered
and against what are they compared?
Here HAC creates this concept
of significantly more uneconomic does not define it
and then proceeds to strike a number of conditions.
-: Though, isn't it kind of like the concept
that we create all the time about reasonableness mess
and that, that, you know, any vagueness
that might be suggested in such a standard
is filled in by the case law, which is what HAC does.
And it's not saying it's more economic
or the conditions make it slightly worse.
It's setting what arguably is a reasonableness standard.
It's not substantially more, it's a balanced approach.
Why is that something that HAC is unauthorized to do.
-: HAC doubtlessly has adjudicatory authority,
but that authority ends
where the regulations provide a clear answer.
Here DHCD has determined
that it should define uneconomic in a certain way.
And HAC has discarded that definition
in these handful of cases
that are becoming increasingly more frequent.
If DHCD recognized this issue, and it is an issue.
I think the only issue before the court
on which all parties agree
is that it is becoming increasingly frequent
for these developments to be uneconomic
under DHCD's regulations as they are proposed to towns.
DHCD could encounter those facts
and use the regulatory authority
that the legislature has given it
to address those circumstances
and actually set up a framework
by which each condition imposed by the municipality
can be assessed
to determine whether that condition
is thwarting the construction of affordable housing,
or is not.
It's important, I think for the court
to understand that Chapter 40B
is attempting to do generally speaking, two things
as courses through this court's decision in the area.
One, is to cast a balance between municipal discretion
and statewide incentivizing of affordable housing.
The second is to understand that developers
are only going to build these projects,
if they can make a reasonable return on them.
And here, what HAC has done
is basically create this concept
that sets aside municipal discretion, because-
-: But you're assuming, why would they want...
I mean, why would they lower their own profit?
I mean, are you suggesting
they're putting forward this project
so that you can reject it?
I mean, I just don't get it exactly.
I understand if they were,
if expecting higher rates of profit,
that's why we've set a fairly minimal rate
that they can recover, right?
But what you're doing is the opposite.
You're saying, well, if this developer is willing
to accept less than we allow,
then the town can impose
any kind of condition on it at once.
It seems backwards to me.
-: Under the current regulatory framework,
the answer to that is, yes, Your Honor.
And candidly, it took me a long period of time
to understand why it would be
that a developer would propose a development
that is considered to be uneconomic
under DHCD's regulations.
And the answer is actually baked into the regulations
and baked into DHCD's Guidelines.
The considerations that the developer makes
are not actually related
to what the annual return on total cost is,
which is how DHCD determines uneconomic.
The developer benefits from two things.
The first of which is a development fee.
The development fee here is significant
and it exceeds the 10% minimum
that's set forth in the regulations.
The second is the return
on the developer's equity in the project,
not the return on total cost,
but the return on the developers equity in the project.
So assume a 20% equity by the developer in the project
under the benchmark that was applicable in this case,
a 6.84% return,
anything below that was considered to be uneconomic.
It is almost impossible for a developer
in the first decade and beyond of this project
to achieve a return that is anywhere approaching that
because DHCD's Guidelines say,
"The developer each year can only get 10%
of its equity in the project as a dividend."
So the developers considerations,
which doubtlessly were front of mind for the legislature,
right, the legislature is guaranteeing to these developers,
a reasonable rate of return are not actually reflected
in the DHCD regulations or in the guidelines.
The reason being that both have fallen
basically into disrepair, or at least out of date.
No provision that is at issue before the court
in these guidelines
has been updated since the financial crisis.
Pardon me in the regulations.
The guidelines themselves were promulgated in 2014,
DHCD and the HAC are fully aware
that developers are coming to towns, including Milton,
which is granting a lot of 40B applications,
a point I'd like to return to in a moment.
And these circumstances are recurring.
And basically HAC has created this exception
to the existing regulations,
to the existing guidelines
and applied it without explaining what it's doing, right.
It has created this significantly more uneconomic concept.
And then in its decision, you will not find anywhere
in its decision or the handful of other times
that it has done this.
An explanation of what that means.
What is significantly more uneconomic.
-: Can Mr. Moore, I'd like to have the rewind button
and ask you a question much less interesting but important.
-: Please. -: It's the jurisdictional
issue that's your first issue
and that uneconomic is proposed,
whether that raises a jurisdictional issue
and the issue
suggested by the developers
is that you didn't raise that before HAC and it's waved.
So we sort of skipped all that
and went right to the interesting stuff.
But what about that?
-: A fair question, Your Honor.
And if I may address it in two ways,
one of which is the issues
that are appropriately before the court,
and then secondly, what resolving those issues would mean
for what the town's asking.
So there are three issues as I set them forth,
the jurisdictional issue,
the allegation of legal error
and the adjudicatory insufficiency.
The first jurisdictional issue, there is no doubt
that argument was not made before the HAC.
We are up here on an exception to the Waiver Rule
for issues that are jurisdictional,
which this court recognizes,
not just in the judicial context,
but also the administrative context.
I'd refer the court to the DOE case from 2010,
that sort of sets out a benchmark
as to win an issue is jurisdictional for an agency,
and when it's not.
And what DOE says is basically
has the legislature set a benchmark here
that empowers the agency
to hear certain cases and not hear others.
I've suggested that- -: But why would-
-: Pardon me Your Honor.
-: I see you raise an interesting issue
then we we dig deep into this,
there may be more complicated issues
relating to how much profit the developer is getting,
but why wouldn't the jurisdictional issue be.
This project was going forward as a low income housing
and Milton imposed really significant conditions on it.
I mean, dramatic there, you know,
it wasn't like, you know, plant some trees over here,
but it's cutting the number of units.
It's doing all kinds of things.
So it's clearly a HAC jurisdiction issue.
Now you may make a interesting profit argument
that requires us to dig into the merits,
but is that really a jurisdictional issue?
Any case that says something like that is jurisdictional,
because it seems to defeat the whole purpose
of the low income housing statute,
which is to promote it and make sure towns can't prevent it.
(Kafker chuckles)
because they don't like these things.
Now, Milton may be more sympathetic than other towns,
but we have a lot of obstructionist litigation on this.
-: Two answers to your question, Your Honor.
The first is that what is set up here
is two paths for the developer where anybody else affected
by Chapter 40B development to take.
One of them in section 21
is to go under 40A § 17,
a typical zoning appeal,
which was the subject of the first case
on this court's docket today.
And the other is in certain circumstances,
the HAC has the ability to exercise expeditious review
and those circumstances are delineated in the statute
and explicated by this court in the Woburn decision.
One is where the sought after permit is denied.
The other is where, the sought after permit is granted
in a way that is a de facto denial
on the words of this court
that developing the project is financially infeasible.
And that is a specific type of aggrievement.
General aggrievement gets you 40A section 17,
the specific type of aggrievement here
gets you before the HAC.
-: But this is exactly what the second one is
unless you're carving out an exception to that second one,
which is this uneconomic as proposed argument.
But it's clearly the conditions have made this
so that the developer doesn't wanna build it anymore.
-: I would suggest a slightly different angle on that,
Your Honor, because I'm not sure
that we're far away from each other,
but the question is to whom to attribute that deficiency?
DHCD has broad regulatory authority to define uneconomic.
It could certainly do so in a way
that would encompass this development,
but it has not done that.
And so HAC is bound by the regulatory system
that it is asked to apply by statute.
And that regulatory system does not say
that the conditions here render the project uneconomic.
If I may just in the remaining moments
to address Justice Lowi's question on Waiver.
If the jurisdictional issue is not before the court,
there is no doubt in my mind, I defer to opposing counsel
on whether they'll argue otherwise, but the legal issue,
the fact that HAC has created
this significantly more uneconomic standard
and then failed to define what that is,
and then failed to measure the conditions
against that standard.
Striking things that have neglect,
some have significant impact,
potentially depending on what that word means.
Others have negligible impact,
including a waiting area for school children for the bus,
nonetheless HAC struck all of those.
And that legal issue is appropriately before the court.
So is the subsidiary fact finding issue
as to the looped roadway.
If the court decides on those issues,
the appropriate action would be to reverse and remand,
and instruct the HAC
to actually define what it means by significant
to apply that standard in a way the town
has the ability to answer to during an adjudicatory.
-: And what does that look like in your estimation?
Is it another formula?
Is it because the math is not appropriate?
I'm, confused by what it is here .
What precisely it is that you're expecting HAC
or the department to do,
to make that clearer to the town
beyond the significantly more uneconomic standard.
-: It is a fair question, Your Honor.
A two part answer to that.
The easiest answer
is for the department to promulgate regulations,
that define what significantly more uneconomic means.
If this court views are to be within the HAC's authority.
-: That like 25% less profit.
I mean, doesn't everybody know that that... Yeah.
-: Possibly. -: Yeah
-: But that's not where they've chosen to define it.
-: No but- -: There is an existing
-: In this particular case, that's what happened, right?
All the conditions made it 25% less economic.
-: That is approximately so Your Honor,
and then what the HAC did
is what the appeals court in the Brookline case in 2011,
told that it could not do,
which is we've looked at all of these conditions.
We've determined that in the aggregate,
they make it significantly more on economic
without deciding what that means.
And then we're going to proceed to review all of them,
irrespective of whether each one has some material impact
on that significant financial condition.
And that the appeals court appeared in a 128 decision
has told the HAC, it cannot do that.
To further answer Your Honor's question, though,
it is possible to do this by regulation.
It would be possibly
if this court embraces the HAC's argument
to do it by adjudication,
but it needs to be done before there is a hearing.
So the town can actually defend its conditions
against a definite benchmark that exists,
not that is in the ether
and defined only in a post-trial decision,
which is what occurred in this case.
I understand I've gone over my time
and otherwise rest on my papers.
-: Okay. Thank you.
Okay, Attorney Goloboy.
-: Good morning Chief Justice, members of the court,
may it please the court,
Andrew Goloboy on behalf of HD/MW Randolph Avenue, LLC,
the developer below in the appeal (murmur) today.
We ask that the court affirm the Land Court judgment
and affirming the HACs decision.
-: How does the town know
what is significantly less economic?
Whatever the standard is.
-: Certainly Your Honor.
-: I think it's significantly more uneconomic.
-: Yes -: Is that right?
-: Significantly more uneconomic
is the standard imposed.
-: So how, if I'm on the town board,
do I know what that means?
-: Well, Your Honor, I think that's an interesting question
because I think it traces it's way through the statute
in section 20, where the definition of uneconomic appears
where it's a condition or set of factors
that lead to the developer,
not being able to obtain a reasonable rate
as defined by the subsidizing agency
with respect to the size and character.
That's a delegation to the subsidizing agency,
which then through the regulations
you get to the project eligibility letter
and the importance of that,
where they determine that- -: You're saying
the department's definition is irrelevant.
-: I'm getting to it
because I think- -: Okay.
(Wendlandt laughs) -: I apologize, Your Honor.
because I think they all line up
because the reasonable return is defined in the regulations
in subsection C and D come directly out of the statute
with respect to the condition or set of conditions
as determined by the Subsidizing Agency.
So you have the financial feasibility determination
that becomes the benchmark under C.
D, once again aligns with the definition
of an uneconomic in this statute
where it talks about size and character,
because D is if the board imposes a unit reduction
and it reduces the reasonable return you again have...
That becomes the economic benchmarking.
So that comes out of the statute,
but also subsection D when there's a unit reduction imposed
comes directly out of justice Marshalls
concurring opinion in Woburn,
where she employed the HAC or the DHCD
to include that type of language
in their definition of uneconomic or reasonable rate,
a reasonable return.
So the regulations absolutely set an economic benchmark
either at the financial feasibility determination
by the subsidizing agency in this case mass housing
or what the baseline is
when the permitting authority imposes the unit reduction
like here, where they went from 90 to 35.
The significantly more on economic test
imposed by the board which comes at
initially out of the decision in 2007
in the Cohasset Avalon case,
where there is an explanation where they say,
"We have a project that is below the guideline calculation,
but the developer wants to go forward.
So we're gonna establish
a significantly more on economic tests,
not just a little bit, because it's below the guideline."
And in that case, it was a reduction of 11 basis points.
And they said, "That's not significant."
And over time as cases have been developed,
they have reached conclusions where, you know,
it's 274 basis points or 167 basis points.
That's significant, as you said earlier,
it's similar to a reasonable standard.
Here, they reduce the profitability
by 162 basis points or 27.5%.
That's significant by any measure.
And they have a judicatory authority to make a policy,
which I think my brother
from the Attorney General's Office will focus more on,
but it's consistent with the statute and the regulations.
And as I certain in the brief,
I think it's a more generous standard to the board.
I think the HAC would be within its rights to say,
if they have reduced the ROTC below 5.88 to 5.87,
we would've met the threshold.
-: Really. -: I think it puts
a higher benchmark. -: That gets tough
because, you know, if there clearly is as Mr. Moore argued,
you wanna give the zoning board some room
to, you know, address the town's concerns.
And if you cut the margins so much, they can't do anything.
(Kafker coughs)
Then I start to see his point,
but here you may not have to go that far
because it's such a gigantic change in the project.
-: Exactly, Your Honor, and I have to bring it back
to the board's own language in there decision.
We unanimously vote not to approve the 90 unit development
and then they made up their own project.
They said, "We'll give you 35."
And imposed numerous additional conditions,
including the looped roadway,
which had no basis
and would be subject to a substantial evidence standard,
-: Over the loop. -: Which was strapped.
-: I mean, I can see the loop, you know,
you've got some set public safety issues, right.
You got fire trucks going in there.
That's the kind of thing towns care about, right?
-: Sure. But they have a burden of proof.
They have to show essentially
that the public safety outweighs
the regional needs for affordable housing.
And in this case, the evidence was, there's no local state
or federal statute requiring a looped roadway.
They don't require loop roadways
for nonsubsidised housing in town.
The testimony from HD/MW's experts
was that there were two areas with sufficient turn radiuses
within the development, including not just testimony,
but actual plans using calculations
for a 43 foot wide ladder truck.
So certainly there was substantial evidence
to support the decision to strike those conditions.
The fact that the HAC added conditions
for belt and suspenders
shouldn't be viewed as a negative thing.
If my brother's correct,
the remedy is this,
return to just striking the looped roadway,
not reinserting it.
The HAC made the proper finding
based off substantial evidence
to strike those conditions.
But if I can turn back to the main point
and I agree with Justice Kafker,
here where there was such a dramatic reduction in the RTC
because they imposed not only a unit reduction
of nearly two thirds,
but imposed five dozen other conditions.
That has to be significant when you dig into the economics
under any measure so much so
that at the HAC, the board didn't even...
Not only did they not argue, they didn't have jurisdiction.
They didn't submit a competing economic analysis.
They just argued that it's not significant.
They agreed that was the standard
significantly more uneconomic.
And they agreed that was a burden, a burden,
not a jurisdictional issue down there.
So it didn't come out of left field
the significantly more uneconomic.
They- -: So you arguing
that the standard here is also waived
because, I get your point on the jurisdiction issue.
I'm just trying to...
Do we have to wrestle with the standard issue or is...
-: I don't think so, Your Honor.
I think it's almost unfair
(Kafker coughs) for the board
at the HAC level to agree this is the standard.
Then when the Land Court, say,
"Hey, you didn't have jurisdiction.
You shouldn't have applied this standard."
And look, you guys didn't explain why you applied it."
When they agreed below this is the standard.
Why would the HAC have to explain a standard
that in their post hearing briefs,
the board agreed was the standard?
There'd be no reason for that explanation
to appear anywhere in a decision.
And also because it didn't come up in my brother's argument
on the jurisdictional front.
I think that issue is a sideshow with respect
because of the three bedroom issue.
-: Yeah, but aren't they right on the three bedroom issue.
I mean, aren't you being silly.
They basically have conceded the three bedroom point
and they conceded it, and they were prepared to concede it.
It's sort of like you're, we're not gonna take that
because that's harsh, you know,
(Kafker laughs)
it seems sort of silly, but...
-: I understand your point, Your Honor,
but the town has to live with the decision
and the conditions they impose, clearly-
-: But they don't say, "No three bedrooms."
They say they want more detail on one bedroom
and two bedroom.
And then, it's sort of like, "Let's make this easy,
they got rid of three bedrooms."
And that- -: But you would-
-: But then they said, "No, we didn't."
And then you say, "Well, we're not gonna accept that."
Just- -: Well, they didn't submit
any evidence to the HAC to that effect,
It's representation was made in their briefing.
They absolutely couldn't-
-: Be bound by those representations.
So can I ask you a different question?
So once a project is deemed significantly,
I'm gonna get this wrong again,
more on economic
then does HAC look at all conditions,
including the one, you know,
to make a bigger drop-off place for kids,
you know, waiting for the bus.
-: Yes, Your Honor.
And I think that comes directly out of the definition
on economic where it says,
"Factor or combination of factors."
And then in the regulations
in 57.07 won the scope of the hearings,
the conditions in the aggregate.
So you have to look in this case
where they invented their own project,
and this is how the HAC looked at it in their decision
and how it was brief below was
it's a reduction to 35 plus all these other conditions
in the aggregate that render it uneconomic.
And just for a moment,
I know my brother cited to the Brookline 128 decision.
When you read that decision,
the HAC did exactly
what Brookline said it was okay, in that case.
In that case, the appeals panel said,
"These conditions were considered in the economic analysis.
So it was fine for the court to strike."
You don't have to go individually one condition at a time,
say this condition adds $5,000 to the bottom line.
This condition adds $20,000
or else you could get to an absurd result
where all the conditions individually could survive
or the majority of them, but-
-: And they're out there. -: ... it doesn't work
in harmony where it's a slippery slope.
and the panel in Brookline agreed with that.
And here, obviously in the economic portion
of the decision from the HAC,
they referenced the loop roadway multiple times.
It's on page six and page eight of their decision
where that factored into the economic analysis.
-: It really would- -: But on the big picture,
aren't they right though?
I mean, it would be one thing if it was,
if were the synergistic effect of all of them
make it significantly more uneconomic.
But if there's 15 conditions
that have nothing to do with the analysis
and applying it to the standard,
why fiddle with those?
-: If they're not challenged on economic basis,
unless they either exceed their legal authority
or an impermissible condition, subsequent,
which the courts have said they can review.
I agree they can't be reviewed,
but the looped roadway was part of that analysis
because the looped roadway,
in addition to the reasons I said before,
how it's not required under any local state regulations,
you have turnaround areas
is the loop roadway doesn't fit with a 90 unit development.
The town knows it, you know, sort of a poison pill.
You know, you could do a 35 unit road development
with a loop road,
but it bears no relationship to the 90 unit development
and the standard,
which I think my brother asserts in his brief
really just as we have unfettered discretion
to install conditions that relate to safety concerns.
That's not the standard,
it's the local concern outweighing the regional need
for affordable housing.
That's a lofty standard.
Here, though Milton have touts
their love of affordable housing,
when we applied, they were at 4.4%.
Well below half of their requirement for any safe Harbor.
And this was met with hostility.
You read the board's initial decision.
The hearings war 11 nights
of allowing their butters to bash the project.
So I-
-: Isn't that what that's mostly what hearings are
that's not a big surprise. (Jury laughs)
-: I understand that, Your Honor.
I understand the-
-: But so I'm just... -: ... the feeling behind it.
-: Can I put...
I'd like to flesh out sort of the good guy, bad guy point.
So, and now they're at obviously not at 4.4%,
They at the sort of that desired number,
I can't remember, was it 10% or-
-: I don't believe they're still close to 10%.
They had a rush in the last few years
of several proposed developments.
I think one of which, one or two, they approved.
Other ones I think are working their way through,
but they're irrelevant for our analysis here,
you know, at the time we submitted
our application project eligible, they were at 4.4.
And you know, the case law dictates
that when you're below the 10% and here significantly below,
it's a presumption that the regional need
for affordable housing outweighs the concern.
So I... -: Okay.
-: Yep. I know I'm over time.
-: Yeah. Justice Kafker did he answer your question?
-: Nope. I'm happy.
Mm-hmm (affirmative). -: Okay. Thank you very much.
We're gonna- -: Thank you, Your Honor
-: ... move on to Attorney Furgang.
-: Good morning, Your Honors.
Samuel Furgang on behalf of the HAC.
I'd like to begin at the beginning if I may.
And that is the fact that the board had no objection to this
significantly more uneconomic standard at the hearing stage.
And that is why the committee ruled as it did,
because it had no reason to deal with the standard at all.
And if this court is inclined to go there,
I would respectfully request
if they're going to approve that standard.
Obviously, the committee has no objection,
but I think it would be unfair to the committee
to have the court opine on it,
not being the correct standard
when it didn't have the opportunity
to address that from the outset.
And when it was acceptable to the board
at the time that these voluminous,
lengthy drawn out hearings occurred.
That's the first thing.
The second thing is,
there's a reason why they didn't object to it,
I have suspect.
And that is because this existed for 15 years
and it hasn't been a problem.
-: 1,5.
-: 1,5. The first decision,
I think it's the Avalon case was in 2007.
So it may have been less than that
at the time of the hearings,
but as we speak here today, it's been 15 years
and it's worked because it's a clear standard,
it's explicable and it can be addressed by both parties
without any evidentiary difficulty, as was the case here.
There was a presentation on the overall cost of the project
under the ROTC standard.
There was a number,
there was a separate calculation of the cost
after the conditions were imposed.
There was another number.
The court looked at the difference between the two
and determined that the difference was significant.
And therefore it was entitled to go ahead
and strike conditions based on the local concern
and a need for affordable housing standard.
They did exactly what they were supposed to do
by the rule book and by the intent of the statute.
And there's no reason to go in there now
and change the standard
that has worked perfectly well all this time
and is completely in conformance
with the aim of the statute,
which is to foster the building of affordable housing
in areas where there is a dire shortage of them.
-: Nonetheless, if we were to go there
but we were to take your polite,
but I think, well taken point
that significantly more uneconomic would be better,
at least in the first instance defined
and grappled with by HAC.
What would the remedy look like here?
How would that do?
And that apply in this case.
-: Well, in this case,
I think it's a simple, reasonable standard.
You look at the numbers.
-: Not what the standard would be.
I'm taking your point that they live this every day.
They should take the first stab at.
How do we write, how does the opinion write?
-: I think, well, you can read our brief, Your Honor.
(Samuel laughs)
And that's where it is.
I would also say that the board,
their committee rather has addressed this before contrary
to the allegations by my learner opponent
in their reply brief in the Weiss Farm case,
which is in the chief brief of the board,
it appears at page 495, they do indeed.
In that case,
the board did contest the significantly uneconomic standard
and the board dealt with it
and in doing so,
they explained the reason why they reached that standard
in very similar terms to the way they are,
said in our brief.
And they indeed adverted to the regulations.
-: Sorry. What was that case?
It was the what? -: It's the Weiss Farm case.
The portion I'm referring to is at page 495
in the addendum of the zoning board's brief.
That's where they refer to the regulations.
The actual decision begins a little earlier than that,
but it's in their addendum.
So it's a case that they supply the court,
and in that case the board did contest the standard.
And therefore the committee was able to address that
and speak to it in some detail
and went through again, the history
explained the situation
we have the situation where the MROTC
is above the actual ROTC,
that the board, that the developer is willing to go forward
and the need to grapple with that situation
when the guidelines don't address it.
And that's the issue here.
The purpose of the statute and the regulations
is to deal with the situation
where a developer is able and willing to go forward.
And there are conditions imposed upon that developer.
-: Could you address...
Mr. Moore has a subtle response to that,
which I'm still catching up to, which is that the developer,
because of the intricacies of financing and other things,
the developer can still make a hefty profit
or the developers cut of this will not be impacted.
Do you follow that argument?
-: I can address it in two ways.
The first way is that it's a fascinating explanation
of macro and microeconomics to this court.
That is not a part of the record in any form whatsoever.
So it's pure speculation on my opponents part.
I'm happy to offer my own
macro and microeconomic speculation about why that is.
For example, if that (murmur) straight.
-: Having avoided those classes in college
(Samuel laughs)
and avoided law and economics,
the University of Chicago, which was a not easy.
Why don't you give me your two sentence or three paragraph
view of that. -: Sure.
The basic formulation is this, for whatever reason,
and it may be because interest rates are at a record low,
and therefore a business is willing to accept a low return
because there's no real, so it'll get a better return
for whatever reason, a developer in the last 10 years or so
has decided that they are willing
to go forward with a development.
Even though they'll be getting a lower rate of return
then what was a general industry standard
when the guidelines were produced?
So in that situation, as we find ourselves here today,
we have a developer who is ready and willing to go forward,
where the subsidizing agency mass housing has determined
that the project is financially feasible
so that they determine based on the proforma data,
that the rate of return is an achievable and acceptable one
that will allow the project to go forward.
In those circumstances, the committee has to say,
"Okay, if they're willing to go forward,
even though they're willing to accept a lower rate of return
than what we had once thought was the minimum,
what do we do?
How do we measure the impact of the conditions."
And the way they did it was they looked at the regulations.
They looked at the part C definition
and they noted,
"Okay, it seems that there's an alternative methodology
where the rate is high,
where the return is lower than what would expect.
And you can use the level at the performer, for example,
to show the rate of return is acceptable."
That's what the committee basically did.
They said, "Let's look at the rate of return as of today,
when we're all together, let's use that rate of return,
compare that to the rate of return with the conditions,
and we'll see what the difference is."
It's a workable rule.
It's one that is designed
to foster the creation of affordable housing.
And it was one that was uncontested in this case.
And it's one that should be allowed to continue.
And if it turns out that there are difficulties,
then the committee through...
And DHCD have the power to revise them if necessary.
But there hasn't been a need to do that
because here we have a situation where this project can work
and it can work as planned,
and the impediments placed upon them
were reviewed and found in several cases
to significantly reduce the cost, the return,
and therefore they were permitted to strike or modify them,
which is what they did.
It was A Textbook Application Of the Statutory Scheme
based upon an exhausting examination of the evidence
over many, many days,
subject to multiple challenges by the zoning board
reviewed by Judge Foster of the Land Court,
who also agreed that it was a proper approach to take.
And I respectfully requested the court,
allow them to continue with that work,
to carry out the very important role
of enabling the construction
of affordable housing in the state.