Local Zoning Board Caps Developer's Profits

Brian Lafferty, the developer, has proposed a 24 unit complex, Sunset Ridge, on a 15-acre site. According to Janet Collier, a representative of the town, the developer applied for a comprehensive permit. The permit allows a developer to bypass local zoning laws if the town has less than 10% affordable housing and the proposed development has at least 25% affordable housing. Collier tells GlobeSt.com that one of the conditions of approval from the zoning board of appeals is that the profits from the development would be capped at 12.4%.

Dick Heaton, chair of the zoning board of appeals, tells GlobeSt.com that any profits exceeding that amount would be used by the town to develop other affordable housing units. According to Heaton, the 12.4% is a standard developed by the National Association of Home Builders. It is the average profit for the top 25% of all builders in the country, he points out. Lafferty reportedly plans to appeal the decision.

The state's Department of Housing and Community Development allows developers up to 20% profit on developments with 25% affordable-housing components and Heaton acknowledges that 20% is the cap most frequently used by most towns. Going under that cap, as Bolton is trying to do, is "fairly new," he admits but he notes that Rehoboth, MA recently put a 12% cap on the profits a developer could get out of a affordable-housing development located there. That cap is currently in discussion.