2016 Gov’T Affairs Report GREATER BOSTON 2016 REAL ESTATE BOARD

GREATER BOSTON REAL ESTATE BOARD

2016 Gov’t Affairs Report GREATER BOSTON 2016 REAL ESTATE BOARD

GOVERNMENT AFFAIRS REPORT

1 2016 Gov’t Affairs Report GBREB is one association powering five divisions of over 11,000 members in Greater Boston.

A DIVISION OF THE GREATER BOSTON REAL ESTATE BOARD

400 Members of commercial brokerage community. CBA is the largest organization of commercial brokers in Mass, including leasing and sales professionals. Established as a division of GBREB in 2000.

550 members in the business of commercial real estate ﬁnance. REFA includes lending institutions and law ﬁrms. Established as a division of GBREB in 1988.

Founded in 1889 GBREB is the oldest Real Estate trade association in America. GBREB is one organization powering ﬁve divisions that provide education, networking, advocacy and philanthropy. GBREB members specialize in the development, management, and transactional aspects of real estate projects, both residential and commercial. GBREB is 650 members who ownand manage all aﬃliated with MAR, NAR, NAA, NMHC and BOMA commerial property types including International. thousands of square feetof space in Greater Boston

500 members who own and manage multi-family properties including the largest developers of rental properties in the nation. RHA includes owners & managers of more than 110,000 rental units statewide. Established as a division of GBREB in 1953

9,000 members of residential brokerage community. GBAR is the largest local board of the Massachusetts Association of REALTORS® and in New England

GBREB is affiliated with 5 organizations engaged in policymaking at the local, state and national level. Boston, MA Greater Boston Real Estate Board

Massachusetts Association of Realtors®

Washington, D.C. BOMA Internaltional National Apartment Association

National Multihousing Council

National Association of Realtors®

2 2016 Gov’t Affairs Report GBREB is one association powering five divisions of over 11,000 members in Greater Boston. ADVOCACY 2015-2016 GBREB Government Affairs Report

At the conclusion of the two year legislative cycle many of the bills threatening the real estate industry were defeated or not taken up before time expired. While GBREB secured several notable victories, it is likely many of the same issues will return in January of 2017.

During every two-year cycle, GBREB files new legislation and reconsiders bills that were not taken up before time expired. This session GBREB and MAR collaborated to file eight new bills focused on economic development and housing production.

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2015-2016 GBREB Legislation

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S.119, An Act Improving and address the duties of landlords and tenants. Housing Opportunities and the The duty to exterminate bedbugs will remain a Massachusetts Economy responsibility of the landlord, as it is in current Bill Sponsor: Senator Michael state law, however the bill would require cooper- Rodrigues (D-Westport) ation by the tenant. It is hoped this measure will The HOME Bill includes eighteen separate give the landlord and the exterminator a reason- sections designed to encourage smart growth able chance at success, eradicating the problem. development and housing affordability, streamline approval and review procedures, establish commonsense permitting reforms for business H.664 An Act Relative to Local and landowners, and encourage uniform wet- On-Site Sewage Disposal Systems lands and sewage disposal system regulations Bill Sponsor: Representative across the state. S119 is designed encourage Robert Fennell (D-Lynn) growth throughout the Commonwealth by taking H644 restores greater uniformity across several steps to address barriers to housing Massachusetts by establishing a DEP review and production and economic development. approval process of local sewage disposal systems regulations to ensure they are scientifically-based restrictions, necessary to protect unusual local S.1079, An Act to Allow resources and do not conflict with Title V. 2015-2016 GBREB Legislation Simple Majority Voting Bill Sponsor: Senator Jennifer Flanagan (D-Leominster) H.665 An Act Providing for S.1079 seeks to streamline the approval and More Efficient Wetlands review procedures for development by replacing Bill Sponsor: Representative the supermajority vote requirements with a Robert Fennell (D-Lynn) “majority of the members then in office” standard. H665 would restore uniformity across It would also establish that the granting of a Massachusetts by prohibiting local wet- variance or the reversal of any order or decision of lands requirements unless: (a) the local any administrative official would require a major- regulations are more restrictive ity vote of the members of the board then in office. than those established by state law; and (b) DEP approves the local regulations upon a finding that they are scientifically-based restric- S.1166, An Act Relative to tions, are necessary to protect unusual local Cimex Lectularius resources, and do not conflict with the State Bill Sponsor: Senator Wetlands Protection Act and DEP regulations. John Keenan (D-Quincy) GBREB once again filed legislation to help property owners mitigate bedbugs. The bill is designed H.665 An Act Providing for to increase public awareness and encourage early More Efficient Wetlands notification and cooperation between residents Bill Sponsor: Representative and owners. The legislation would require the Robert Fennell (D-Lynn) state Department of Public Health to create a H665 would restore uniformity across pamphlet explaining how to identify bed bugs, Massachusetts by prohibiting local wetlands outline preventative measures to avoid infestation, requirements unless: (a) the local regulations are

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more restrictive than those established by state amount established by the court that is sufficient law; and (b) DEP approves the local regulations to cover twice the estimated annual carrying upon a finding that they are scientifically-based costs of the property owner, plus an amount restrictions, are necessary to protect unusual sufficient to cover the defendant’s attorney’s fees. local resources, and do not conflict with the State Wetlands Protection Act and DEP regulations. H.1088 & H.1096, An Act Relative to Capital Relief in a Counterclaim H.1107, An Act to Expedite Bill Sponsors: Representatives Multifamily Housing Construction Edward Coppinger (D-West Roxbury) Bill Sponsor: Representative , Robert Fennell (D-Lynn) Kevin Honan (D-Brighton) Under current state law a residential tenant may H.1107 seeks to expedite multifamily construction withhold rent that is due by filing a counterclaim in three ways. First, by requiring that cities and in certain summary process actions alleging towns permit multifamily development by right on violations of the state sanitary code. Such cases at least 1.5% of the community’s developable land can be costly and time consuming. GBREB’s rent area that is suitable for multifamily residential. escrow legislation simply requires the tenant to The bill would also establish a minimum density prove that unpaid rent is being maintained in of 20 units per acre for by right multifamily devel- a bank account. In addition, the bill allows but opment. Second, by requiring that cluster devel- does not require that the court may order those opment be allowed by right in residential zoning funds to be maintained pending the conclusion districts, at the density permitted in the underlying of the case. The bill seeks to strike a balance zoning district. The bill also prohibits cities and to ensure equity and fairness to all parties. towns from requiring a “proof permit” plan in connection with a cluster development application. Third, by allowing the construction of in-law H.1847 & S.1102, An Act to Support apartments by requiring they be permitted by right the Equitable Utilization of Third Party in all single-family residential zoning districts. It Consultants in Land Use Determinations also prohibits zoning ordinances and by-laws from Bill Sponsors: Representative Bradley unreasonably regulating the location, dimensions, Jones (R-North Reading), Senator or design of an in-law apartment on a lot. Michael Rush (D-West Roxbury) These bills would require a list of certified consultants with expertise in one or more fields in H.1342, An Act to Streamline the Judicial which the municipal permitting boards reasonably Review of Local Land Use Decisions expect to need consultant services in reviewing Bill Sponsor: Representative applications be established. It would require Thomas Golden (D-Lowell) that the list of certified consultants contain The proposed legislation would require that not less than three consultants in each field. judicial review of any decision of a zoning board of appeals or any special permit granting authority be limited to a review of the record created H. 2857, An Act Relative to before that body. Also, similar to the bonding Energy Efficiency Education requirement used in MGL chapter 40R, this bill Bill Sponsor: Representative would require a non-municipal plaintiff seeking to Tacky Chan (D-Quincy) reverse approval of a project to post a bond in an GBREB re-introduced legislation to targets

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the needs of the commercial building sector by providing the education and training, including analytical tools, for those who are directly responsible for a building’s operations. The bill attempts to capture a portion of the existing energy efficiency funds for education and training focused to include some very specific and important topics, such as best energy use, efficiency practices, use of new technologies, use of metering, tracking, monitoring energy use, and economic analysis to support reduced energy use – all in the context of learning to save energy in an economical and cost effective way.

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state issues

Thousands of bills are filed at the State House every two years including appropriation bills and large omnibus bills containing policy changes in outside sections. GBREB tracks and testifies on hundreds of them, responding to issues of importance to the real estate industry and they advance through the legislative process. A portion of those efforts are highlighted.

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H.165, Licensing of Drain Cleaners time to comply and clarifying ambiguous lan- Bill Sponsor: Representative guage regarding mixed use buildings. GBREB Tacky Chan (D-Quincy) has raised similar concerns with H.2097. The legislation directs the Board of Examiner of Plumbers to make rules and regulations for the H.2513, Property Sales Restrictions licensing of drain cleaners including distinct Bill Sponsor: Representative classes of drain cleaners such as apprentice class Sean Garballey (D-Acton) and master’s class. It would also subject any GBREB opposed a bill to impose restrictions entity engaged in drain cleaning without a license on the sale of property by charitable organi- to be subject to civil administrative penalty. zations. H.2513 would give municipalities the GBREB objected to the bill as an added cost and option to purchase the sale of a property by a administrative burden for property managers charitable organization. Under the proposed who often must routinely respond to clogged bill a municipality would be given the option of drains on the weekend or after business hours. buying a property even if a non-profit decides Requiring property managers to obtain a license to keep the property but change its use. GBREB or schedule a time for licensed drain cleaner to testified in opposition to the bill out of con- come to the property will only add unnecessary cern it would delay sales transactions for four state issues time and expense to a standard maintenance task. months or more and give the municipality the right to enter onto the property and conduct Thousands of bills are filed at the State House every two years including appropriation bills environmental tests as if they were the owner. and large omnibus bills containing policy changes in outside sections. GBREB tracks and H.715, Development Restrictions, Zoning GBREB also objected to the government taking testifies on hundreds of them, responding to issues of importance to the real estate industry Bill Sponsor: Representative Jay of land by allowing a municipality the option to and they advance through the legislative process. A portion of those efforts are highlighted. Livingstone (D-Boston) purchase a non-profit’s property and assign to GBREB opposed H.715 to restrict any develop- another non-profit such as a conservation com- ment that casts a shadow over a broad swath of mission taking developable land off the books. Boston including the Charles River Esplanade, Christopher Columbus Park, Commonwealth Avenue Mall, Copley Square Park, Magazine H.2516, H.3300, Real Estate Transfer Tax Beach Park, or Back Bay Fens. In testimony before Bill Sponsor: Representative Committee, GBREB argued that the bill would Sean Garballey (D-Acton), stifle many important projects within the city Sara Peake (D-Provincetown) and noted projects are regulated by state law GBREB opposed a statewide real estate transfer and the Article 80 approval process in Boston. tax of ten cents per thousand dollars on all real estate sales. H.2516 is the first of two transfer tax bills GBREB opposed. The Second, H.3300 H.2097, Carbon Monoxide Detectors would allow the town of Provincetown to impose in Commercial Buildings a 0.5% real estate transfer tax payable by the Bill Sponsor: Representative buyer to raise money for Town’s general fund. Paul Brodeur (D-Melrose) GBREB opposed a statewide real estate transfer An amendment to the State Budget calling for tax of ten cents per thousand dollars on all real the installation of carbon monoxide detectors estate sales. H.2516 is the first of two transfer in all commercial buildings at the time of trans- tax bills GBREB opposed. The Second, H.3300 fer was adopted in the House but ultimately would allow the town of Provincetown to impose not included in the final budget. GBREB was a 0.5% real estate transfer tax payable by the successful in modifying the House language buyer to raise money for Town’s general fund. to give commercial building owners adequate 9 2016 Gov’t Affairs Report

H. 2542, Title V Tax Credit legislation. Among the numerous anti 40B bills for Homeowners GBREB opposed was a bill filed by the commu- Sponsor: Representative nity of Needham. GBREB opposed the bill as Steve Howitt (R-Seekonk) setting a bad precedent by allowing individual GBREB supported H.2542, An Act Relative to communities directly or inadvertently to carve Title V Income Tax Credit Reform. Current state out exceptions to 40B. The cumulative effect of law grants Massachusetts homeowners a 40% allowing municipalities to dictate development credit towards the cost of upgrades to their septic projects via state legislation undermines a level system with a maximum credit totaling $6,000. playing field across the Commonwealth. The largest tax credit that may be taken in any year is $1,500. The proposed legislation would H.2843, Uniform Statewide allow 40% of the cost up to $25,000 with a Building Code maximum credit of $10,000 and would allow Sponsor: David Vieria (R-Falmouth) for up to $4,000 to be claimed each year. GBREB supported H.2843 An Act Relative to the State Building Code. In testimony before the Joint Committee on State Administration H.2618, H.2621, H.2645, H.2648, and and Regulatory Oversight, GBREB expressed S.1614, Expansion of Hotel/Motel Tax support prohibiting local option building Sponsor: Representatives Michelwitz codes such as the stretch energy code. GBREB (D-Boston), Moran (D-Boston), Peake argued predictability is essential for real estate (D-Provincetown), & Senator Wolf (D-Harwich) development and allowing 351 communities to The legislature considered several bills to expand set their own standards, creates confusion for the application of the hotel/motel tax to include developers where projects may take several years. short term rentals including H.2618, H.2621, H.2645, H.2648, and S.1614. GBREB opposed the expansion of the hotel/motel tax to include private H.2957, Maintenance of Private Ways homes, condominiums and apartments rented Sponsor: Thomas Calter (D-Kingston) for tourist or transient purposes. In testimony GBREB supported legislation to address before the Joint Committee on Revenue, GBREB how privately owned roads and other amenities expressed numerous concerns with the expansion such as bridges or common bridge and rec- of the room occupancy tax including red tape reation areas are maintained. H.2957 sought and administrative burdens on owners, enforcement issues and increasing the cost of rentals.

H. 2744, Comprehensive Permits Sponsor: Denise Garlick (D-Needham) In recent years, efforts to undermine the comprehensive permit law have taken the form of home rule petitions filed by various municipalities hoping to use state legislation to block local projects. GBREB supports 40B as an important tool to create housing opportunities in suburban communities for people of limited means and opposes allowing municipalities to dictate 40B development projects via state

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to modernize the process for assessing and state level. GBREB supported the bill to allow collecting maintenance fees from owners and homeowners with loan modifications, short sales occupants of private ways. It simplifies how and foreclosures not liable for state taxes on debt property owners are notified of meetings regard- that is forgiven, as they would on regular income. ing issues concerning maintenance costs and repairs. H.2957 also establishes a mechanism H.3806, Copper Theft Prevention for property owners to form an owners associa- Sponsor: House Committee tion including the ability to establish a lien for on Ways & Means unpaid charges. The proposed bill also expanded GBREB continued to support legislation to regu- the scope of amenities covered by current late the sale of metal piping and wiring. The bill state law to include other common amenities seeks to establish a new system for the sale of such as private parks, recreational facilities scrap metal by identifying individuals who may beaches and privately owned utility lines. be illegally stripping copper piping and wiring from vacant homes. Thefts from vacant homes H.3770, Mortgage Forgiveness Debt negatively impact home values and may make a Relief and Debt Cancellation property ineligible for conventional financing. Sponsor: Joint Committee on Revenue In 2007 the federal government passed The H.4254, Streamlined Permitting Mortgage Debt Relief Act allowing homeowners Sponsor: Governor Baker to exclude income from the discharge of debt GBREB supported H.4254 to enable on their principal residence on their federal tax Massachusetts to receive federal delegation of return. GBREB supported legislation filed at the National Pollutant Discharge Elimination the request of the Massachusetts Association of System (“NPDES”). NPDES is a water quality REALTORS® to allow a similar exclusion on the program mandated by the federal government that

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includes permitting, compliance and enforcement S.1761 & S.2400, Energy Scoring activities relating to the discharge of pollutants. Sponsor: Senator Ben It would allow for increased efficiency in the Downing (D-Pittsfield) fee structure, number and complexity of per- GBREB strongly opposed a bill mandating that mits. The majority of states across the country every home, condominium and multifamily have this designation. Currently, only four states apartment with fewer than five units complete are not delegated including Massachusetts, an energy audit before it can be listed for sale. Idaho, New Hampshire, and New Mexico. The bill establishes new requirements on seller’s GBREB supports the practical implications agents to disclose the results of the audit and of this legislation to encourage a more inte- establish a home energy labeling system for grated and streamlined permitting process. residential property. Similar language was included as a section of a seventy-two page omnibus energy bill passed by the Senate. S. 840, Multifamily Housing Fees A version of the omnibus energy bill passed Sponsor: Representative Donald by the House did not include the language Humason (R-Westfield) and was ultimately struck from a conference GBREB supported two multifamily housing committee report. Current state law requires bills. The first, S.840 would amend GL 186:15B, home inspectors to provide consumers infor- the statute governing payments and security mation regarding home energy audits. deposits, to include application screening fees as another fee that landlords may charge tenants, S.2144, Zoning prior to the commencement of any tenancy. Sponsor: Senator Dan H. 1665 allows leases and rental agreements Wolf (D-Harwich) to impose interest or penalties for failure to The Senate advanced zoning legislation that pay rent 10 days after rent is due; current included several provisions GBREB opposed. statute allows for the imposition of interest Among the provisions GBREB opposed were or penalties 30 days after rent is due. requiring impact fees to be paid upon the

S.1006, Construction Retainage Sponsor: Senator Karen Spilka (D-Ashland) In 2014 a new law regulating private construction contracts over $3 million was adopted. Chapter 276 of the Acts of 2014 eliminated the right of parties to negotiate the terms involving project closeout and final payment. To try and restore balance to the process, GBREB supported S.1006. The bill preserves the 5% cap but exempts projects financed or supported in whole or in part by state or federal mortgage assistance, special taxing arrangements, tax credits, grants, issuance of bonds, loans, loan guarantees, and debt or equity assistance.

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beginning of construction, including site preparation work. Impact fees could to be used to make up deficiencies “exacerbated” by a new development without defining how and to what extent the new development impacts pre-existing deficiencies. S.2144 imposed mandatory inclusionary zoning without providing a density bonus or other incentives and eliminated approval not required plans. Lastly the bill reduced certainty for property owners by limiting how a project can be modified in response to market conditions and made it harder for landowners to qualify for a limited zoning freeze. Under current law the subdivision freeze provision applies to the “land shown on the plan” a protection eliminated by the bill. GBREB opposed the bill out of concern it will hinder housing production and economic development. Several other organizations also opposed the bill including MAR, NAIOP, HBAM, ICSC, AIM, and the Greater Boston Chamber of Commerce.

S.2207, Construction Liability Fines/Fees-Elevator Inspections Sponsor: Joint Committee on Labor GBREB supported several clarifications and Workforce Development to the elevator inspection process. GBREB opposed legislation that would make They included reducing the fines from $100 companies that contract with an entity who per day to $50 per day; reducing the $20,000 commits a wage theft violation jointly liable maximum fine to $5,000 and reducing the fines for any wages owed. S.2207 also makes for certain elevators located in owner occupied companies that contract with an entity that single family homes from $5,000 to $1,000. The commits a wage theft violation and who proposed language also clarifies that fines will knows or should have known liable for be calculated in accordance with existing state any penalties or fines associated with the law as defined by MGL 143 §65. The proposed wage theft violation. GBREB opposed the clarifications were adopted as outside sections of legislation out of concern that the proposed the state budget but vetoed by Governor Baker. legislation would unfairly burden compliant employers with liability for penalties and fines. In addition, GBREB opposed a stop work order provision for the non-payment of wages, a potentially very harmful provision for real estate development when time is of the essence. Had this bill been adopted owners would be at considerable risk despite having done nothing wrong. 13 2016 Gov’t Affairs Report

State Regulatory & Judicial Issues

GBREB advocacy extends to case law and state regulatory requirements. While no key judicial decisions were made in 2016, GBREB filed several amicus briefs before the Massachusetts Supreme Judicial Court in 2015.

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State Regulatory Transportation Reform GBREB joined with several business organizations in calling for the Governor and Legislature to act swiftly in addressing public transportation reforms. Among the many concerns raised by GRREB was developing a long term strategic and capital plan; overhauling procurement and maintenance practices so the system is safe and in a good state of repair; providing greater accountability and transparency for the MBTA’s governing practices; Court issued a ruling in the case of Monell v. Boston ensuring that the T balances its operating budget Pads, LLC. The case involved a group of employees without the need for increasing state assistance of a real estate office who believed they were not each year; and making customer service and com- independent contractors, but because of the exer- munication a priority. GBREB supported H.3347 cise and control that their office manager had over filed by Governor Baker which established of a them they should be considered employees of their five-member financial management control board company. In its decision, the court affirmed that real (FMCB) to oversee the Boston-area transit system for estate brokers and salespersons have the ability to three years. During the first year the FMCB focused affiliate as either independent contractors or employ- on improving the reliability of the T, with a focus on ees. The Greater Boston Real Estate Board along with customer service, bringing the operating budget into the Massachusetts Association of REALTORS® filed balance, accelerating capital spending on the T’s an amicus brief in support of the defendant-brokers. transportation assets and bringing long-term stability to the authority. Despite this progress the FCMB Town of Brookline, et al v. Mass has a very brief window of opportunity remaining Development Financing Agency-Residential to resolve performance issues plaguing the T. GBREB along with CHAPA filed an amicus brief in the case of the Town of Brookline vs. Mass State Judicial Issues Development Financing Agency. In October of Burbank Apartment’s Tenant 2013 Mass Development issued a project eligibil- Association vs. William Kargman ity letter (PEL) on a proposed 40B development GBREB filed an amicus brief in the case of Burbank known as the Residences of South Brookline. The Apartment’s Tenant Association vs. William town of Brookline filed suit in Norfolk Superior Kargman. Five other organizations joined with Court challenging the validity of the PEL. In GBREB including the Massachusetts Association September the Court dismissed the Town’s claim in of Realtors® National Apartment Association, its entirety, finding there is right to bring action to National Multifamily Housing Council, National challenge an eligibility letter. In a brief filed with Leased Housing Association and the National the court GBREB and CHAPA argued that the town Affordable Housing Management Association. The has no right to judicial review of the Eligibility case seeks to challenge a landlord’s withdrawal Letter. GBREB also argued that the PEL is just a from a Section 8 rental subsidy program upon preliminary step in the permitting process and to expiration of the landlords’ mortgage loan agree- find otherwise would frustrate the intent of 40B. ment; plaintiffs claim that withdrawal will result in At the end of September, the Appeals Court ruled unlawful discrimination against low-income tenants against the town and upheld that the issuance of and others in violation of state and federal law. an eligibility determination was not a judicial or quasi-judicial action, a point argued in GRBEB’s Monell v. Boston Pads, brief. The Massachusetts Supreme Judicial Court LLC-GBAR/Brokerage denied the towns appeal and will not take the case. In June the Massachusetts Supreme Judicial 15 2016 Gov’t Affairs Report GBREB is one association powering five divisions of over 11,000 members in Greater Boston