By Drake Lucas
Staff writer
July 14, 2008 02:02 am METHUEN — The city will be keeping a closer eye on housing projects that fall under the state's Chapter 40B affordable-housing zoning law. Under the law, developers can skirt local zoning bylaws if they designate a certain percentage of the units as affordable. Another part of the law states that developers can only earn a 20 percent profit on the development. A five-member auditing commission will look at the five 40B developments in town to make sure they are following all regulations. Any profits that exceed the 20 percent cap go to the city and are placed in an affordable-housing trust fund. "Nobody is checking," said City Councilor Joseph Leone, who proposed establishing the commission. "We don't know if developers are adhering to the affordability guidelines; we don't know how much money they are making; we don't know how much it costs to build these places. These are all things we need to know." He said the problem with 40B projects is they receive a lot of attention while proceeding through the permitting process because they can be controversial, including Methuen's largest 40B project, Summit Place on Pie Hill. Four 40B developments have been built in the city and one is under construction. The Zoning Board of Appeals, which grants the permits, often goes back and forth with developers over a period of months, if not years. Neighbors sometimes protest and attend meetings. "As soon as they go up, everybody forgets about them and goes on to the next one," Leone said of the projects. "There should be just as much effort put into policing them after they go up as before." The five-member audit commission will be made up of Chief of Staff Matthew Kraunelis, Zoning Board member Laura Walta, Planning Board member Adam Hamel, certified public accountant Armen Derderian, and Economic and Community Development Director Karen Sawyer. George Xenakis, a liaison from the state inspector general's office, has also been appointed to guide the commission. Jack McCarthy, senior assistant inspector at the inspector general's office, said the department is encouraging local municipalities to take an active role in auditing 40B developments because of a lack of oversight. One outside organization used for auditing, the Citizen's Housing and Planning Association, has only reviewed a portion of the state's projects. McCarthy said that often, no one is looking into where the money goes. "Our office has asked the Department of Housing and Community Development to provide the adult supervision this program needs," McCarthy said. "Hopefully, they will follow our advice and put out regulations to guide developers, monitoring agencies and municipalities." The inspector general's office looked at 10 developments three years ago and found that five of the 10 overstated their profits, resulting in a possible $7 million that could have gone to the host communities. He said some of the cases have gone to court. Boxborough settled for $1.2 million after taking a developer to court for the $2.1 million it said was owed to the town. McCarthy said developers inflated land values and costs, and charged materials from other projects to the 40B project. This was done to make it appear the project cost more than it did so the developer could pocket a larger profit, he said. Community Development Director Karen Sawyer said she is not sure how much money, if any, is owed to Methuen by developers. She said the commission's role is not to go after anyone, but just to be sure the projects are proceeding successfully. "This is an extra effort to ensure compliance," she said. Mayor William Manzi also cautioned against the expectation that any money is owed to the city, but he said 40B laws do need stricter oversight after projects are built. "It's worth looking at these projects," he said. "We are trying to be vigilant as much as the law will allow."
—
Copyright © 1999-2008 cnhi, inc.