TOWN OF HINGHAM & another [Note 1] vs. DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT.

IRELAND, J. In August, 2006, the town of Hingham and the zoning board of appeals of Hingham (collectively town) filed a complaint seeking a declaratory judgment (G.L. c. 231A) and a

Page 502

writ of mandamus (G.L. c. 249, § 5) against the defendant, the Department of Housing and Community Development (department). The town challenged the department's conclusion that only twenty-five per cent of the units in a residential building project the board approved would be counted toward the town's subsidized housing inventory (SHI). The department filed a motion to dismiss pursuant to Mass. R. Civ. P. 12(b)(1), 365 Mass. 754 (1974), for lack of subject matter jurisdiction. After a hearing, a Superior Court judge issued a memorandum of decision and order allowing the department's motion to dismiss. The town appealed, claiming that the judge erred in holding that no controversy exists between the town and the department; in determining that there was no final act by the department and that the town failed to exhaust its administrative remedies; and in not giving effect to the "streamlining" requirement of G.L. c. 40B. [Note 2] We granted the town's application for direct appellate review. Because we conclude that no final administrative action has been taken by the department, and that the town has failed to exhaust its administrative remedies, we affirm the Superior Court's judgment of dismissal for lack of subject matter jurisdiction.

Statutory and regulatory scheme. The Comprehensive Permit Act, G.L. c. 40B, §§ 20-23(Act), was designed to facilitate the construction of low or moderate income housing [Note 3] by removing local exclusionary zoning practices that would thwart their development. Zoning Bd. of Appeals of Wellesley v. Ardemore Apartments Ltd. Partnership, 436 Mass. 811, 814 (2002).

A key aspect of the Act's framework is the requirement that each municipality devote ten per cent of its housing units to low or moderate income housing. See G.L. c. 40B, § 20; Taylor v.

Page 503

Housing Appeals Comm., ante 149, 151 (2008). In order to encourage and expedite the construction of such housing, the Act "streamlines" the permitting process by allowing a developer who wants to construct low or moderate income housing to file a single application for a comprehensive permit with the local zoning board of appeals rather than seeking separate approval from each local board having jurisdiction over the project. Zoning Bd. of Appeals of Wellesley v. Ardemore Apartments Ltd. Partnership, supra at 815. See Standerwick v. Zoning Bd. of Appeals of Andover, 447 Mass. 20, 29 (2006). Municipalities may grant or deny such permits in light of their obligations under the Act to achieve the ten per cent statutory minimum. Although it is not clear in the record, statute, or regulations, it appears that the department is informed when a permit is granted.

The SHI, which is maintained by the department, is a tally of the number of low and moderate income housing in a locality of the Commonwealth. 760 Code Mass. Regs. § 31.04(1) (2004). It is updated biennially and is presumed to be accurate. Id. The department has promulgated standards to determine how low and moderate income units are counted in the SHI. [Note 4] Important to this case is the fact that there are no statutory or regulatory provisions that allow a town separately to appeal to the Superior Court, the department's calculation of the number of units that are included in a town's SHI. The Act does, however, allow a party, whose permit was denied, the opportunity to appeal from the local zoning board's decision to the department's housing appeals committee (HAC). G.L. c. 40B, § 22. A town may participate in that appeal. See 760 Code Mass. Regs. §§ 31.04(1)(a), 31.06(5) (2004).

Once a municipality has achieved the ten per cent statutory

Page 504

minimum the local zoning board of appeals may "deny comprehensive permits with impunity" and the HAC has no authority to order a local zoning board of appeal to issue a comprehensive permit. [Note 5] Taylor v. Housing Appeals Comm., supra at 151. See Zoning Bd. of Appeals of Wellesley v. Ardemore Apartments Ltd. Partnership, supra at 815. "However, the municipality's failure to meet its minimum housing obligations ... will provide compelling evidence that the regional need for housing does in fact outweigh the objections to the proposal." [Note 6] Board of Appeals of Hanover v. Housing Appeals Comm., 363 Mass. 339, 367 (1973).

Facts. We summarize the facts set forth in the complaint. [Note 7] In November, 2000, a developer, Hingham Campus, LLC, applied to the zoning board of appeals (board) for a comprehensive permit, in accordance with G.L. c. 40B, to build a continuing care retirement community called Linden Ponds. Linden Ponds is a phased project, that will contain 1,750 rental apartments, 192 assisted living units, and a 324-bed skilled nursing facility. All residents will have to pay a refundable entrance deposit and monthly fee. Entrance deposits range from $195,000 to $435,000 and monthly fees range from $1,252 to $2,230 depending on the size of the unit.

After public hearings held over several months, the board unanimously voted to grant the comprehensive permit. The comprehensive permit became final on September 18, 2001, when the written decision granting it was filed with the Hingham

Page 505

town clerk. 760 Code Mass. Regs. § 31.08(4)(2004). Despite the board's belief that all 1,750 of the Linden Ponds rental units should count toward the town's SHI, the town received a letter dated November 16, 2005, in which the department informed the town that it would only count twenty-five per cent of the units toward its SHI. [Note 8] As a result of the department's refusal to count all the units, the town has not fulfilled its ten per cent minimum affordable housing obligation and will be subject to additional G.L. c. 40B projects. The town requests a declaration that it is entitled to have all the units counted toward its SHI.

Discussion. 1. The purpose of declaratory judgment is "to afford relief from uncertainty and insecurity with respect to rights, duties, status and other legal relations." Massachusetts Ass'n of Indep. Ins. Agents & Brokers, Inc. v. Commissioner of Ins., 373 Mass. 290, 291 (1977), quoting G.L. c. 231A, § 9. However, in order for a court to provide declaratory relief, an actual controversy--that is, a controversy appropriate for judicial resolution--must exist. In the context of a dispute between an administrative agency and a party, there is no actual controversy in the absence of final agency action. See Samuels Pharmacy, Inc. v. Board of Registration in Pharmacy, 390 Mass. 583, 592 (1983). See also East Chop Tennis Club v. Massachusetts Comm'n Against Discrimination, 364 Mass. 444, 450 (1973) ("proceeding for declaratory relief in itself does not operate to suspend the ordinary requirement that a plaintiff exhaust his administrative remedies before seeking judicial relief"). Similarly, a general prerequisite for obtaining mandamus relief is that all available administrative remedies have been exhausted. See Karl V. Wolsey Co. v. Building Inspector of Bedford, 324 Mass. 419, 422 (1949).

Here, the town is challenging a nonfinal administrative ruling. The department's letter dated November 16, 2005, informing

Page 506

the town that it would only count twenty-five per cent of the Linden Ponds units toward the town's SHI, is not formally binding on the HAC. As discussed infra, the SHI calculation can be reviewed by the HAC in a later proceeding, when an applicant appeals from the denial of a comprehensive permit. [Note 9] Moreover, the HAC regulations explicitly state that the SHI merely carries a presumption of correctness and that a party, including a town, may introduce evidence to rebut the presumption at the later proceeding. 760 Code Mass. Regs. § 31.04(1)(a). If a party rebuts the SHI calculation, the HAC "shall on a case by case basis determine what housing or units of housing are low or moderate income housing." Id. Therefore, because there was no final or formal action by the department the town's declaratory action is premature. [Note 10] See Samuels Pharmacy, Inc. v. Board of Registration in Pharmacy, supra at 589-591 (no declaratory judgment where defendant sent plaintiffs informal notice of anticipated ruling in letter and plaintiffs had opportunity to object to ruling in subsequent formal proceeding).

The town also claims that, because an application for another comprehensive permit was pending before the board that called into question the board's affordable housing status, the judge erred when she held that no controversy existed. [Note 11] As has been stated, there is no actual controversy between a party and an

Page 507

administrative agency until the agency issues a final decision. See Samuels Pharmacy, Inc. v. Board of Registration in Pharmacy, supra at 592. See also Alliance, AFCME/SEIU, AFL-CIO v. Commonwealth, 427 Mass. 546, 549 (1998) (mandamus relief only where controversy concrete rather than remote or abstract). Thus, even with another G.L. c. 40B application pending, the town still is not entitled to a declaratory judgment or mandamus relief precisely because the application is still pending; it has not resulted in final action either by the town or by the department.

2. The town next contends that the judge erred in concluding that the town had failed to exhaust its administrative remedies. The town argues that it cannot exhaust its administrative remedies where none is provided independently to challenge an improper SHI calculation. It claims it has "no right to appeal the [SHI] calculations nor is there any hearing process established to hear disagreements" about the SHI. We disagree. The town has an administrative remedy that entails waiting until a decision by the board to deny a comprehensive permit is appealed by the applicant. [Note 12] G.L. c. 40B, § 22. Then the town may present any objections concerning the accuracy of the SHI at the HAC hearing. If the HAC rules against the town, it may appeal from that decision to the Superior Court pursuant to G.L. c. 30A. Id. [Note 13]

The town claims that it is unable to make important decisions

Page 508

about its affordable housing options because municipalities lack an independent avenue to appeal, that "substantively affects [its] rights regarding its ability to deny comprehensive permits" and "[i]n the event a developer fails to appeal a denial of a comprehensive permit ... the [municipality] cannot challenge the SHI." [Note 14] We disagree. A municipality is free to deny a comprehensive permit even if it has failed to meet its minimum low or moderate housing obligation as long as "the community's need for the low or moderate income housing is outweighed by valid planning objections ... such as health, site, [and] design." Zoning Bd. of Appeals of Greenfield v. Housing Appeals Comm., 15 Mass. App. Ct. 553, 557 (1983). Moreover, if a developer chooses not to contest the permit denial, then the municipality would have no need to challenge the SHI because it would not be harmed.

There are sound policy reasons for requiring exhaustion of administrative remedies. The HAC should be given the opportunity to address the issues raised by the town so as to "avoid the occurrence of untimely and piecemeal litigation." Gill v. Board of Registration of Psychologists, 399 Mass. 724, 727 (1987). "To permit judicial interference with the orderly administration by the [HAC] of matters entrusted to it by the Legislature before it has ... [made] a final decision, would in effect transfer to the courts the determination of questions which the Legislature has left ... to the [HAC], and would result in the substitution of the judgment of the court for that of the [HAC]." Saint Luke's Hosp. v. Labor Relations Comm'n,

Page 509

320 Mass. 467, 470 (1946). Moreover, "allowing the administrative process to run its course ... gives the administrative agency in question a full and fair opportunity to apply its expertise to the statutory scheme." Gill v. Board of Registration of Psychologists, supra at 727, quoting Assuncao's Case, 372 Mass. 6, 8 (1977).

3. Exceptions to the exhaustion requirement have been made when the administrative remedy is inadequate, "when important novel, or recurrent issues are at stake, when the decision has public significance, or when the case reduces to a question of law." Luchini v. Commissioner of Revenue, 436 Mass. 403, 405 (2002), quoting Space Bldg. Corp. v. Commissioner of Revenue, 413 Mass. 445, 448 (1992). See I.S.K. Con of New England v. Boston, 19 Mass. App. Ct. 327, 330 (1985). The town contends that the circumstances of this case warrant an exception to the exhaustion requirement because challenging the SHI presents a "novel and unique case" that is a matter of "particular public interest." The town's reliance on Kelleher v. Personnel Adm'r of the Dep't of Personnel Admin., 421 Mass. 382, 385 (1995), and Norfolk Elec., Inc. v. Fall River Hous. Auth., 417 Mass. 207, 210 (1994), is misplaced. Both of these cases granted an exception based on the fact that the case dealt with "purely legal questions," Kelleher v. Personnel Adm'r of the Dep't of Personnel Admin., supra, or had no "fact-finding function for the agency to perform." Norfolk Elec., Inc. v. Fall River Hous. Auth., supra. Here, the underlying issue is whether the department properly calculated the town's SHI, which is a factual question rather than a purely legal question that does not present a novel issue. This case is not one of the rare cases that warrants an exception to the exhaustion requirement.

The town further claims that the "unique hardship" placed on it due to the administrative agency's disregard for its guidelines as well as the "[t]own's inability to independently appeal augers in favor of not requiring exhaustion." The town's reliance on Globe Newspaper Co. v. Beacon Hill Architectural Comm'n, 421 Mass. 570, 588 (1996), does not help its argument. In that case, the court stated that "[l]itigants may challenge agency action as insufficient at law or unwarranted by the evidence in part based on agency deviance from the policies

Page 510

stated in its rules" (emphasis added). Id. As discussed supra, there has been no final or formal action taken by the department regarding the town's SHI calculation. Thus, we decline to extend this exhaustion exception to this case.

4. The town argues that the judge's decision failed to give effect to the streamlining mandate of G.L. c. 40B. It further asserts that the department's action will "severely chill" future applications pursuant to G.L. c. 40B because the only mechanism for a town to challenge a SHI calculation would be by denying permits and the developers would end up factoring these litigation costs into their projects. This, they argue, could make it uneconomic for the developer to build in the town. We disagree. If we adopt the town's position, the lengthy delays inherent in permitting independent litigation of the SHI calculations would itself chill G.L. c. 40B projects and impede the construction of low or moderate income housing, thus thwarting the purpose of G.L. c. 40B, which is "to promote affordable housing by minimizing lengthy and expensive delays." Standerwick v. Zoning Bd. of Appeals of Andover, 447 Mass. 20, 29 (2006). Moreover, there would be no limit on how often or when a town could file a complaint for a declaratory judgment or judicial review of a its SHI calculation.

Conclusion. For the reasons stated above, the judgment allowing the motion to dismiss is affirmed.

So ordered.