Leading up to the 2024 legislative session, advocates and legislators coined this year as “The Session of Housing.” Governor Moore introduced three bills aimed at encouraging affordable housing development, the most controversial of which was his density and land use bill (HB538/SB484). Below is an overview of HB538, as passed by the General Assembly and is awaiting the Governor’s signature.
HB538 – Land Use – Affordable Housing – Zoning Density and Permitting (Housing Expansion and Affordability Act of 2024)Establishes Historic Property Revitalization Director (page 3, line 18) – Establishes a new Historic Property Revitalization Director within the Department of Housing & Community Development. The Director is tasked with collecting & maintaining certain information from state agencies related to state-owned historic properties, working with other state partners to identify certain federal resources for redevelopment, and reporting to the General Assembly on the progress of their work.
Manufactured & Modular Housing (page 6, line 17) – Preempts a county or municipality from prohibiting manufactured or modular homes in zones that allow for single-family residential use or on certain sites currently or previously owned by the federal government.
State Density Bonuses – Establishes three distinct paths to one density bonus. Density bonuses cannot be stacked and are in addition to and applied after density authorized by a local government.
- Former State-Owned Properties Bonus (page 10, line 23), Projects that contain at least 25% affordability, on former state-owned campuses or certain current or former federally-owned land may not exceed the highest allowable density in a local jurisdictions’ residential zones or six units per gross acre.
- Three Quarter Miles of a Rail Station (page 12, line 22), Projects that contain at least 15% affordability and are within three quarters of a mile of a rail station shall receive a state density bonus of 30% on top of any density authorized by the local jurisdiction. Projects where a rail station may be on a college campus, where only a portion of the property is located within the three-quarters of a mile zone, or have been zoned for single-family use as of January 1st, 2024, are ineligible for the density bonus.
- Controlled by a Nonprofit Organization (Page 14, line 27): Projects where a nonprofit organization is a controlling entity and contain at least 25% affordable units shall receive a state density bonus of 30% on top of any density authorized by the local jurisdiction.
Unreasonable Standard(Page 10, line 14 & Page 16, line 13)– Establishes a new “unreasonable standard” for qualified projects where “A LOCAL JURISDICTION MAY NOT IMPOSE ANY UNREASONABLE LIMITATION OR REQUIREMENTS ON A QUALIFIED PROJECT” and where unreasonable is defined as “INCLUDES ANY LIMITATION OR REQUIREMENT THAT HAS AMOUNTS TO A DE FACTO DENIAL BY HAVING A SUBSTANTIAL ADVERSE IMPACT ON:
(1) THE VIABILITY OF AN AFFORDABLE HOUSING DEVELOPMENT IN A QUALIFIED PROJECT;
(2) THE DEGREE OF AFFORDABILITY OF AFFORDABLE DWELLING UNITS IN A QUALIFIED PROJECT; OR (3) THE ALLOWABLE DENSITY OR NUMBER OF UNITS OF THE QUALIFIED PROJECT.”
Limits on Public Hearings(Page 16, line 23)—Unless otherwise required by state law, local governing bodies and planning commissions are limited to two public hearings for qualified projects; historic district commissions, historic preservation commissions, and boards of appeals are limited to one public hearing for qualified projects.
Preserves Density in Agricultural & Conserved Areas (page 17, line 13) – Qualified projects cannot exceed the existing density authorized in agricultural & conserved areas.
Public Health Impact Assessment (page 17, line 21)—Before they may proceed, qualified projects in nonresidential zoned areas must submit a public health impact assessment to DHCD.
The bill is set to take effect January 1st, 2025.
General Assembly Amendment Highlights
Removal of Adequate Public Facilities Ordinance (APFO) Limitations—APFOs are a significant tool in ensuring that sufficient infrastructure is in place to support future development (e.g., sewer or school capacity). As introduced, HB 538 had a provision to limit a local government’s ability to enforce APFOs. The General Assembly struck this provision.
Addition of Modular Housing – Manufactured & modular housing are types of housing built offsite in a factory setting, which can be later assembled on site. As initially drafted, HB 538 included a provision limiting a local government’s ability to prohibit manufactured housing in single-family zoned areas. This was expanded to include modular housing.
Affordability Percentages Reduced—To qualify for a state density bonus, a project had to meet an affordability threshold of 25% or 50%, depending on the project. These percentages were reduced to 15% and 25%, respectively.
Formerly Owned State Campuses & Certain Federal Lands – While projects on formerly owned state campuses were in the initial legislation, this provision was amended in two significant ways. First, currently or formerly owned federal lands greater than 80 acres and which were former military reservations were included by the Senate. Second, the density bonus for these sites was altered to be “(I) THE HIGHEST ALLOWABLE DENSITY IN THE LOCAL JURISDICTION’S RESIDENTIAL ZONES; OR (II) SIX UNITS PER GROSS ACRE.”
