ZONING BOARD OF APPEALS OF WELLESLEY vs. HOUSING APPEALS COMMITTEE & others. [Note 1]

ABRAMS, J. We granted the plaintiff's application for direct appellate review to determine whether a development, financed by the Massachusetts Housing Finance Agency (MHFA), which includes units that will be rented at fair market value, is low or moderate income housing within the meaning of G. L. c. 40B, Section 20. After hearing, the Housing Appeals Committee in the Department of Community Affairs (HAC) ordered the zoning board of appeals of the town of Wellesley (board) to grant a comprehensive permit for the construction of low or moderate income housing. [Note 2] See G. L. c. 40B, Sections 20-23. The board sought judicial review of HAC's determination that a comprehensive permit should issue. On cross motions for summary judgment (see Mass. R. Civ. P. 56 [a], [b], 365 Mass. 824 [1974]), a judge of the Superior Court declared that "the Legislature never intended that a proposed development be exclusively reserved for low and moderate income families to qualify as low and moderate income housing." He therefore determined that "this proposed development meets the requirements set forth in G. L. c. 40B, s. 20 and c. 708 of the Acts of 1966." He entered two judgments in favor of the defendants. We affirm the judgments.

The facts are as follows. On July 11, 1977, pursuant to G. L. c. 40B, Sections 20-23, Cedar Street Associates (Cedar Street), a limited dividend organization, applied for a comprehensive permit to build forty-eight units of low or moderate income housing. After a public hearing, the board, on November 10, 1977, granted Cedar Street a comprehensive permit to build thirty-six units, on condition that at

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least eighty per cent of the units be occupied by the elderly. In addition, the board required evidence, within twelve months, that Cedar Street had received the necessary financing. Later, the board granted Cedar Street's request for a four-month extension of this deadline.

Cedar Street obtained a loan from MHFA. The loan was made subject to several conditions. The development would have to provide only ten rent subsidized units for the elderly. In addition, the developer would have to include eight rent-subsidized units for families, and eighteen units for rental at market rates. Notified of these conditions, the board required Cedar Street to file a new application for a comprehensive permit.

On June 29, 1979, Cedar Street filed a second application. The board denied this application. The board found that the area of the proposed site was not equipped to provide the facilities necessary for a high density population; that the project was detrimental to the health and safety of the anticipated occupants and their neighbors; and that the planning objections incidental to the development outweighed the need for low or moderate income housing.

Pursuant to G. L. c. 40B, Section 22, Cedar Street appealed the board's decision to HAC. Cedar Street claimed that the board's decision was not reasonable and consistent with local needs, and asked HAC to direct the board to issue a comprehensive permit.

The board moved to dismiss the appeal on the ground that HAC lacked jurisdiction over the subject matter. The board argued that the development includes eighteen units to be rented at fair market value, and therefore is not low or moderate income housing within the meaning of G. L. c. 40B, Section 20. HAC denied the board's motion and ruled that since MHFA financed the project, the development is low or moderate income housing within the meaning of Section 20.

Reaching the merits, HAC held that the board's decision was not reasonable and consistent with local needs and directed the board to issue a comprehensive permit. HAC noted that basically the same planning objections had existed

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when the board granted Cedar Street's first application for a permit.

1. Low or moderate income housing. General Laws c. 40B, Section 20, inserted by St. 1969, c. 774, Section 1, defines low or moderate income housing as "housing subsidized by the federal or state government under any program to assist the construction of low or moderate income housing as defined in the applicable federal or state statute." Thus, low or moderate income housing must be subsidized under a program whose purpose is to aid the construction of low or moderate income housing as defined.

In Board of Appeals of Hanover v. Housing Appeals Comm., 363 Mass. 339 (1973), we recognized that the details of G. L. c. 40B, Sections 20-23, would have to be spelled out "in the first instance, by an agency charged with administration of the statute." Board of Appeals of Hanover, supra at 368 n.20, quoting Cleary v. Cardullo's, Inc., 347 Mass. 337, 344 (1964). Subsequently, the Department of Community Affairs promulgated regulations under the statute. These regulations provide that "[l]ow or moderate income housing shall include without limitation units of housing constructed under . . . MHFA Mortgage Loans . . . ." 760 Code Mass. Regs. 30.02 (i) (2) (1978).

Although administrative regulations are not binding on this court, we give great weight to a "reasonable construction of a regulatory statute adopted by the agency charged with [its] enforcement." School Comm. of Springfield v. Board of Educ., 362 Mass. 417, 441 n.22 (1972), quoting Investment Co. Inst. v. Camp, 401 U.S. 617, 626-627 (1971). See Board of Educ. v. Assessor of Worcester, 368 Mass. 511, 515-516 (1975); Amherst-Pelham Regional School comm. v. Department of Educ., 376 Mass. 480, 491-492 (1978). "[W]e must apply all rational presumptions in favor of the validity of the administrative action and not declare it void unless its provisions cannot by any reasonable construction be interpreted in harmony with the legislative mandate. Colella v. State Racing Comm'n [ 360 Mass. 152, 156-157

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(1971)]. Perkins v. Westwood, 226 Mass. 268 (1917)." Consolidated Cigar Corp. v. Department of Pub. Health, 372 Mass. 844, 855 (1977).

The Legislature established MHFA to provide mortgages to projects which "have promise of supplying well planned, well designed apartment units . . . for low income persons or families." St. 1966, c. 708, Section 5 (a). The intention of the Act "is to make available mortgage financing at favorable interest rates to housing projects in which [at least] one quarter of the tenants will be in the `low income' category and the other tenants will be of moderate income. . . . The saving in interest is to be applied in part . . . to making possible lower rentals to `low income' tenants, who may also receive the benefit of rent subsidies . . . ." Massachusetts Hous. Fin. Agency v. New England Merchants Nat'l Bank, 356 Mass. 202, 209 (1969).

The legislative history of St. 1966, c. 708, supports the view that MHFA was created to promote the construction of low or moderate income housing projects which also include units rented at fair market value. The Final Report of the Special Commission on Low-Income Housing, 1965 House Doc. No. 4040, recommended the creation of MHFA. The commission specifically suggested that MHFA require developers to reserve only a portion of their units for low income families. "By doing this, low-income families will be allowed to live in decent apartments, without identification, in close proximity to families of differing economic and social levels." 1965 House Doc. No. 4040, at 39. Thus, MHFA is a program whose purpose is to aid the construction of low or moderate income housing, although such projects may include units rented at fair market rates.

Further, subsidy is "[h]elp, aid, [or] assistance." The Oxford English Dictionary (vol. 10, 1933). See Webster's New Int'l Dictionary 2513 (2d ed. 1959). See also Charlesbank Apartments, Inc. v. Boston Rent Control Administration, 379 Mass. 635, 637 n.4 (1980). In Charlesbank Apartments, Inc., supra, we held that a Federal program that

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merely provided mortgage insurance was a subsidy under Boston's rent control ordinance. Similarly, we believe that a low interest mortgage from MHFA is a subsidy under G. L. c. 40B, Section 20. Housing financed by MHFA is subsidized under a State program whose purpose is to aid the construction of low or moderate income housing.

Consequently, we hold that the regulation promulgated by the Department of Community Affairs which includes MHFA financed projects within the definition of low or moderate income housing in G. L. c. 40B, Section 20, is reasonable and consistent with the statute. Thus HAC correctly determined that the Cedar Street development was within its jurisdiction.

2. Substantial evidence. Pursuant to G. L. c. 40B, Sections 20-23, a qualified builder [Note 3] wishing to build low or moderate income housing may file with a local board of appeals an application for a comprehensive permit instead of filing separate applications with each local agency having jurisdiction over the project. Rodgers, Snob Zoning in Massachusetts, 1970 Ann. Survey Mass. Law 487, 489. In deciding whether to issue a comprehensive permit, the local board must determine whether the project is "consistent with local needs." Board of Appeals of Hanover v. Housing Appeals Comm., 363 Mass. 339, 364 (1973).

If the board denies an application for a comprehensive permit, the developer may appeal to HAC. G. L. c. 40B, Section 22. Subsequent to the appeal, HAC will conduct a de novo review, to determine whether the board's decision is "reasonable and consistent with local needs." G. L. c. 40B, Section 23. See Board of Appeals of Hanover, supra at 369. To make this determination, HAC must decide whether the need for low or moderate income housing outweighs the valid planning objections to the proposal such as health, site, design, and space. G. L. c. 40B, Sections 20-23. See Board

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of Appeals of Hanover, supra at 363-368. If, after applying this standard, HAC finds that the decision of the board is not "reasonable and consistent with local needs," it may direct the board to issue a comprehensive permit. G. L. c. 40B, Section 23. Board of Appeals of Hanover, supra at 372-375. However, if a locality has met its minimum housing obligation, [Note 4] HAC may not order the board to issue a permit. Id. at 367. See Comment, Exclusionary Zoning: A Legislative Approach, 22 Syracuse L. Rev. 583, 592-594 (1971). The board claims that HAC's decision ordering the issuance of a comprehensive permit in this case is unsupported by substantial evidence as that term is used in G. L. c. 30A. The scope of judicial review is determined by G. L. c. 30A, Section 14. See G. L. c. 40B, Section 22.

The decision of HAC must be upheld if it is supported by substantial evidence. Substantial evidence is such evidence as a reasonable mind might accept as adequate to support a conclusion. G. L. c. 30A, Section 1 (6). "This does not permit a court to treat the proceeding as a trial de novo on the record which was before the administrative board. A court may not displace an administrative board's choice between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo. Universal Camera Corp. v. National Labor Relations Bd., 340 U.S. 474, 488 [1951]." Labor Relations Comm'n v. University Hosp., Inc., 359 Mass. 516, 521 (1971). See Southern Worcester County Regional Vocational School Dist. v. Labor Relations Comm'n, 377 Mass. 897,

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903 (1979); School Comm. of Wellesley v. Labor Relations Comm'n, 376 Mass. 112, 120 (1978).

The board concedes that Wellesley has not met its minimum housing obligation, [Note 5] and that there is an absolute need for more apartments that persons of low or moderate income can afford. Nevertheless, the board claims, contrary to the HAC decision, that its denial of the comprehensive permit was both reasonable and consistent with local needs. The board argues that because one half of the units in the development will be rented at market rates, the project's contribution to low and moderate income housing does not outweigh the planning objections incidental to the development. The board asserts that this project will result in a concentration of low or moderate income housing projects in one part of town. In addition, the board claims that the project will exacerbate traffic problems in the area being developed.

There is ample evidence to support HAC's conclusion that the board's action was not reasonable and consistent with local needs. Although similar planning objections had been raised, the board granted Cedar Street's first application for a comprehensive permit to build thirty-six units of subsidized housing, on the condition that at least eighty percent of the units be occupied by the elderly. Since the project at issue in this case includes rent-subsidized units and units rented at fair market rates, it does not greatly promote the concentration of low or moderate income families in one area. Moreover, HAC inspected the site, as did MHFA. We conclude that HAC's decision is supported by substantial evidence and therefore the judgments of the Superior Court must be affirmed.

Further, HAC applied the correct standard when it balanced the need for low or moderate income housing against

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the planning board's objections to the proposal. [Note 6] Although this development contains units rented at fair market rates, the entire project is low or moderate income housing. [Note 7] In reviewing a denial of a comprehensive permit to build low or moderate income housing, HAC must determine whether the board's decision was "consistent with local needs." [Note 8] Whenever HAC reviews the denial of a comprehensive permit, it must apply this statutory standard even if the project includes units rented at fair market rates.

Judgments affirmed.