Small changes, big impact: Quiet state budget provisions could reshape housing development

A little-noticed set of amendments buried in the state's fiscal 2027 budget could be one of the most consequential changes to Massachusetts zoning law in decades. Land-use attorneys are already citing the new rules in front of local planning and zoning boards. Gov. Maura Healey signed the $63.4-billion budget July 9 with an emergency preamble, meaning the changes took effect immediately, instead of with a 90-day waiting period. Unlike the MBTA Communities Act, which drew widespread public attention and open defiance from local governments such as Holden, zoning changes implemented by the budget bill moved through the Legislature with comparatively little fanfare. "This is the most significant suite of amendments that I've seen in the zoning context,” said Joshua Lee Smith, a prominent land-use attorney at Worcester-based Bowditch & Dewey. State Sen. Michael Moore (D-Worcester), who voted for the budget along with the rest of the Senate, framed the state’s efforts as part of an evolving attempt to boost housing production. "We still have issues with accessibility and affordability,” Moore said. “We’re going to continue to look at different initiatives that we can try to expand our supply of housing." A new legal standard Until these changes, Massachusetts required applicants seeking a variance from zoning regulations to prove substantial hardship tied to a property's unique soil conditions, shape, or topography, a bar too high to clear for many projects. The new law replaces that test with a practical one, directing zoning boards to weigh the benefit and the value of housing production against any harm to a neighborhood's health, safety, or welfare. The law offers no fixed definition of practical difficulty, but its intent to lower the bar substantially below the old hardship threshold is clear, Smith said. The explicit reference to housing production sends a signal from the Legislature that residential projects should get special consideration under the new balancing test. “The Legislature is clearly signaling a more relaxed and developer friendly standard,” Smith said. “But local boards still have plenty of authority to deny relief if a project doesn’t make sense.” The change mirrors the old topography-based factors but now makes them optional criteria a board may weigh rather than requirements it must find, said Mark Borenstein, a land-use attorney in the Worcester office of Boston law firm Prince Lobel Tye. Worcester, which already applied variance rules more flexibly than some suburbs, may see less dramatic change than communities that have historically resisted housing approvals, Borenstein said. Already changing outcomes The law is affecting active cases, Smith and Borenstein said. Smith has argued the new standard before boards in at least three matters since July, and town counsels have generally briefed board members on the change, though officials are learning on the fly about how to apply it. The Worcester Zoning Board of Appeals applied the new criteria in approving a 209-unit project on Stafford Street, explicitly citing the housing-production benefit in its decision, Borenstein said. He expects the changes to have a bigger impact beyond Worcester, particularly in towns resistant to building more housing. “It's already being implemented,” he said. “We're already seeing some benefits, but I think you're going to see the most benefit in communities which have been a little bit more hesitant to approve additional housing.” The state budget created a new statewide pathway for residential-use variances, letting developers seek permission to build housing in districts that don't currently allow it. This bypasses the traditionally slower process of a town meeting vote or city council rezoning. Some of Smith’s clients are now pursuing use variances and rezoning petitions simultaneously to hedge their bets. The law doubled the lifespan of an approved variance from one year to two, extended possible extensions from six months to as long as two years, and lengthened the zoning freeze that shields an approved project from being blocked by a subsequent rule change from 12 to 24 months. “A lot of the amendments are aimed at preserving time, and time is money,” Smith said. “These changes are really aimed at keeping projects and developers in the game and encouraging housing production.” Legislative rationale Moore said the changes originated with colleagues who filed the provisions as budget amendments after the Legislature's $3-billion housing bond bill did not fully address the state's estimated shortfall of 200,000 homes. The goal is to increase supply and, in turn, ease costs enough to keep younger residents from leaving the state, Moore said. He cautioned that other pressures, including new tariffs affecting lumber imports from Canada, could offset some of the intended cost savings by driving up construction costs. He defended a measured, town-by-town approach to zoning changes over more sweeping proposals, such as a statewide 5,000-square-foot minimum lot size proposed by an upcoming ballot initiative, citing strain on local septic, water, and school infrastructure in some communities. “I am not for 351 cities and towns having the same lot sizes and the same zoning,” Moore said. “You have people that have built these communities that move for a certain lifestyle. Every community can't be a high-density community.” Additional zoning-related measures remain in play, including a pending provision allowing religious institutions to build multifamily housing by right on land they own, and a proposed 90-day deadline for site plan review decisions, Moore said. Both are included in a separate economic development bill, which could still be passed this year. Lawmakers changed the rules in 2025 so any bill in a conference committee can trigger a return to formal session, which opens the door for other pending legislation to be passed. Smith and Borenstein said further zoning changes are likely, including potential adjustments to parking requirements and minimum lot sizes. Both expect guidance from the Office of the Attorney General and the Executive Office of Housing and Livable Communities, as municipalities work through unresolved implementation questions, including whether the new rules apply retroactively to pending applications. Eric Casey is the managing editor at Worcester Business Journal, who primarily covers the real estate and banking & finance industries.