Chapter 40R/Smart Growth Overlay Districts
Learn more about about 40R and Smart Growth below or contact Elena Eimert, Senior Planner, at eeimert@salem.com, or 978-619-5685.
MA Municipalities with 40R Districts (DHCD/EOHLC, 2019). Click to expand.
Called the “Smart Growth Zoning and Housing Production Act,” Chapter 40R of Massachusetts General Law was adopted in 2004. Chapter 40R creates incentives for municipalities to zone for dense, mixed-income, primarily residential development with smart growth characteristics. What is smart growth? It’s a planning approach that prioritizes sustainable development, mixed land uses, and mobility options, with the intention of creating dynamic and lively urban places. To that end, the 40R statute requires districts to include “a high percentage of affordable housing units, to be located near transit stations, in areas of concentrated development such as existing city and town centers, and in other highly suitable location,” (from Mass.gov).
A 40R or “Smart Growth” district involves the creation of a zoning overlay. Like with all zoning, the overlay creates the framework and standards for future development. This means that individual projects would not be subject to discretionary processes such as a special permit, variance, zoning amendment or other discretionary zoning approval, so long as they comply with the standards codified within the overlay zoning. Applications can only be denied by the permit granting authority on limited grounds. Projects permitted under 40R also have a prescribed appeals process.
This tool relates to Strategy 17 and 20 of the Housing Roadmap:
17. Consider rezoning options both city-wide and in transitional areas with accompanying considerations for transit to support denser development.
20. Leverage state and other public resources to assist in the creation and rehabilitation of housing
Benefits to the City include:
• One-time Zoning Incentive Payment (ZIP), depending on the net increase in as-of-right units allowed;
• A $3,000 per unit payment when building permits are issued;
• “School impact” reimbursement under a companion law (Chapter 40S);
• Higher state match for new school buildings;
• More favorable consideration when applying for discretionary grants from certain State agencies, including Environmental Affairs, Transportation, Housing agencies and Administration and Finance;
• Consideration of 40R zoning if city denies a project application under Chapter 40B.
Smart Growth Overlay Districts in Salem
The City of Salem is considering the establishment of a Smart Growth Overlay Districts at three locations within the City. The pages for each proposed subdistrict are linked below:
Frequently Asked Questions - 40R/Smart Growth Overlay Districts
This section will be periodically updated.
What is a 40R district?
It is a zoning overlay district enabled by the “Smart Growth Zoning and Housing Production Act,” Chapter 40R of Massachusetts General Law (MGL) that was adopted in 2004. It creates incentives for municipalities to zone for dense, mixed-income, primarily residential development with smart growth characteristics.
What is smart growth?
Smart Growth is a planning approach that prioritizes mix of building types and land uses, diverse housing and transportation options, with the intention of creating dynamic and lively urban places. Smart Growth America states that “Above all, smart growth is about helping every community become a more economically prosperous, socially equitable, and environmentally sustainable place to live, helping everyone flourish.”
What are the incentives of a 40R district?
There are two types of financial incentives. There is a one-time incentive payment after the Executive Office of Housing and Livable Communities (EOHLC) provides a final approval of the zoning ordinance. That amount ranges from $10,000 to $600,000 depending on the current land use of the district and the percentage of net new units that the zoning ordinance has potential to yield. This is called the Zoning Incentive Payment. The second financial incentive is a $3,000 payment for every bonus unit that gets a building permit.
There is also a companion law under (Chapter 40S) that provides “school cost insurance” as an additional incentive. Under it, if there is a gap in the average cost of educating the children from a 40R district and the funded generated by the development (through taxes and state school aid), then the city would be eligible to receive money from EOHLC to fill the gap.
The city gets more favorable consideration when applying for discretionary grants from certain state agencies.
What is a bonus unit?
A unit that is created above what the base zoning would allow. These must be net new units.
What are the requirements of a 40R district?
The ordinance must be in compliance with MGL Chapter 40R. There are several criteria, including but not limited to:
The zoning district must be within ½ mile of a transit station, or near commercial centers, in areas with existing infrastructure, or otherwise deemed highly suitable.
Local officials must certify that infrastructure (e.g., water, sewer, transportation) within the 40R overlay district is adequate to serve the projected growth or will be within five years.
The 40R overlay must allow housing to be built at 8 to 20 units per acre depending on the type of housing (multifamily is 20 units/acre).
The 40R district must require at least 20 percent of the units be affordable to households at 80% AMI. That is a minimum, it could allow for deeper affordability & a higher percentage of units.
Could the city create more than one district?
Yes. Each individual district cannot exceed 15% of the land area in Salem and the cumulative districts cannot exceed 25% of the total land area in Salem. In Salem 15% of the land area is 785 acres and 25% is 1,308 acres.
Is Salem considering more than one 40R district?
Salem is proposing an “umbrella” ordinance with individual subdistricts. The umbrella ordinance will include the purposes, definitions, process, and uses that will apply to all the subdistricts. Each subdistrict will be added to the Zoning Map, and each may include its own provisions for the types of uses allowed by right; dimensional, density, affordability, parking requirements; and design standards/guidelines.
What areas in the city are considering this?
The following Smart Growth Overlay Subdistricts are being considered:
A subdistrict is proposed to support an affordable housing development located at 56 Margin Street, 54 Margin Street, 7 High Street, 20 Endicott Street, and 24 Endicott Street. A public hearing on the preliminary application of this district has been scheduled for August 1, 2024, at 6pm at the Community Life Center. More details are available on the legal notice here. The draft preliminary application is available here. See more details on this proposal here.
A subdistrict to support an affordable housing redevelopment project of Salem State’s South Campus, located at 8, 11, 20-32 Harrison Road and 262 Loring Avenue. The preliminary application for this district has not been completed, as such, a preliminary hearing has not been scheduled for this subdistrict yet. See more details on this proposal here.
A subdistrict to support affordable housing at Shetland Park. The preliminary application for this district has not been completed, as such, a preliminary hearing has not been scheduled for this subdistrict yet. See more details on this proposal here.
Is a 40R considered spot zoning?
No. Spot zoning refers to a practice where a small, specific area is zoned solely for the economic benefit of the owner of the land without any legitimate legislative goal. A 40R district has specific state requirements for density, housing types and affordability that are consistent with local and state housing goals.
Where do the incentive payments go? Could they be redirected?
Payments go to the City’s General Fund and must be used for capital expenses. The municipality has the discretion on how to use the incentive funds. They can be allocated for various capital purposes related to the 40R district or for broader community needs.
Will the 40R impact the city’s compliance with Mass General Law Section 3A of MGL Chapter 40A?
No, the 40R district will not impact compliance with Section 3A. Section 3A requires MBTA communities to have a zoning ordinance that provides for at least 1 district of reasonable size in which multi-family housing is permitted as of right. The City of Salem’s B5 zoning district is in compliance with Section 3A. A 40R district (which is an optional overlay) will not impact the underlying B5 zoning district.
What are other permitting paths that would enable similar density and affordability percentages?
40B Comprehensive Permit
Zoning Amendment
What is the difference between Massachusetts General Law Chapter 40R and a Comprehensive Permit enabled under Massachusetts General Law Chapter 40B?
Chapter 40B and Chapter 40R are both Massachusetts laws that support affordable housing development.
A Comprehensive Permit (or 40B) Project is usually a developer-driven project that is NOT permitted under local zoning for both the proposed use and density. It is required to have 25% of the proposed units designated as "affordable housing units" for households earning up to 80% of the area median income. 40B projects are reviewed by the Zoning Board of Appeals and are exempt from all local zoning regulations. While a 40B project does increase the tax base of the city, it does not provide the municipality extra financial incentives.
A 40R is a locally adopted zoning overlay district that allows multifamily development through an as of right (site plan review) process. The municipality receives financial incentives from the state, via the Executive Office of Housing and Livable Communities (EOHLC), for adopting the ordinance and when bonus units are created. A 40R requires 20% of the housing units to be designated as affordable. A 40R district provides communities more control over the location, density, and design of these projects.
Who initiates a 40R ordinance?
The city must initiate the 40R ordinance through a preliminary application to EOHLC. A district could be created to attract development on sites where 40R density and affordability requirements align with local goals, or it could be created in collaboration with a developer to achieve specific affordable housing proposals.
What is the process to create a 40R district?
Adoption of a 40R zoning ordinance requires several steps outlined below and it has two approving bodies, EOHLC and the City Council.
The city will convene a public hearing to receive comments on a preliminary application with proposed zoning text and district boundaries.
The city will attach the comments from the public hearing to the preliminary application.
The city will review the comments from the public hearing and may revise the proposed ordinance in the preliminary application in response to the comments received at the public hearing. A summary of the revisions, if any, will be included in the preliminary application.
The city submits the preliminary application to EOHLC to make a preliminary determination on whether the district would be eligible for the financial incentives and the priorities for state expenditures set forth in section 9 of MGL Chapter 40R.
EOHLC has sixty (60) days to review the preliminary application and provide a letter to the city that determines whether the district is eligible, conditionally eligible, or not eligible. If it is eligible or conditionally eligible, the city may proceed with local adoption.
As shown below, adoption of a 40R district follows the same process as a 40A zoning amendment, the difference is it also layers in a state review.
A Joint Public Hearing with the City Council and Planning Board
Referral to the Planning Board for a recommendation
City Council vote on first passage
City Council vote on second passage
The city will request final approval from EOHLC
The above steps are a minimum. The city council could also layer in committee meetings.
After final approval from EOHLC, then development review applications may be submitted for review. The review process will consist of a planning board public hearing for a site plan review.
What happens if EOHLC does not respond to the preliminary application within the required 60 days?
If the EOHLC does not act upon a complete and approvable application within 60 days of receipt, the application shall be deemed approved.
What does the city do with the comments from the preliminary hearing?
Copies of any written comments received, and a summary of any oral comments, must be included as an attachment to the preliminary application to EOHLC. If the city revises the ordinance after the preliminary hearing, the city will need to summarize the modifications that are made in response to the comments received.
Could EOHLC deny an application?
Yes, if a district does not comply with MGL Chapter 40R, EOHLC would deny the application or grant a conditional approval, which can require changes or additional information. If the EOHLC denies the application, it will inform the city of the deficiencies in its submission. The city may re-apply for approval after addressing any deficiencies in a prior application.
What is the relationship between the requirements of inclusionary housing and a 40R district?
A 40R district requires 20 percent of the units to be affordable at 80 percent of the area median income, at minimum. However, individual subdistricts may require higher percentages of affordability and/or a deeper affordability. The 40R zoning district is an overlay that a developer may choose to use, or they may use the underlying zoning. If a developer chooses the 40R path, then the 40R affordability requirements would be in lieu of the underlying zoning, including inclusionary housing.
When will community members be able to provide public comments?
There are two phases of a 40R: 1. Adoption of the zoning district, and 2. Review of a project proposed within the zoning district. Both phases include multiple opportunities for public comment.
There are three separate public hearings throughout the two phases in addition to multiple City Council meetings. Two separate public hearings are held to obtain public comments on the zoning district. The first public hearing is on a preliminary application to EOHLC and the second is a joint public hearing with the City Council and the Planning Board.
After the zoning district is approved by the City Council, then the Planning Board must hold a public hearing to receive public comments on any proposed project within the district (as part of Site Plan Review). See the question above regarding the process for a step-by-step outline.
Will projects within a 40R district need to comply with the demolition delay ordinance?
Yes. The demolition delay ordinance is a requirement in the City of Salem Code of Ordinances, Division 4, Section 12-76. The requirements set forth in the code of ordinances will remain in effect.
Last updated 8/29/2024.
