The state’s Housing Appeals Committee must rule on a developer’s request to lift the age restriction at the Hanover apartment complex known as North Pointe.

The Massachusetts Housing Appeals Committee is considering a developer’s request to lift the age restriction at a 71-unit apartment complex in Hanover.

The developers, R. Richard Lincoln and Richard D. Matthews, sought the town’s permission to eliminate the age restriction at North Pointe late last year, but the Zoning Board of Appeals denied the request. The developer appealed to the state’s Housing Appeals Committee, arguing that the town’s refusal to eliminate the age restriction made the project economically unfeasible.

But attorneys representing the town in the case say the developer’s argument is flawed. And Hanover officials contend the developer pitched the age-restricted housing and used the comprehensive permitting process under the state’s Chapter 40B law to win initial approval of a much larger project than the town would have approved otherwise.

“They feel that’s an abuse of the 40B process,” said Robert Buckley, a senior partner at Boston-based Riemer & Braunstein who initially assisted the town.

Messages left with the developer’s property management firm were not returned by Banker & Tradesman’s press deadline.

Chapter 40B enables developers to bypass local zoning in communities where less than 10 percent of the housing is considered affordable. In exchange, developers must reserve 20 percent to 25 percent of the units for low- and moderate-income households.

North Pointe, located off Route 53, was built on a 3.8-acre parcel in a commercially zoned area. Hanover’s Zoning Board granted a comprehensive permit for the project in January 2003 because there isn’t a significant amount of rental units and age-restricted housing in the community, according to Dennis McKenna, a partner with Riemer & Braunstein who’s representing the town.

A total of 375 housing units, or 8.4 percent of Hanover’s housing stock, is considered affordable, according to the state’s tally.

With 40B rental developments, all of the units are counted as affordable, so with North Pointe, Hanover added 71 units to its affordable housing count.

“All in all, it looked very favorable from the town’s point of view,” McKenna said.

But only four months after tenants started moving in, the developers filed a notice of project change, requesting to convert the rentals into condominiums. The developers argued that they were having trouble renting the apartments and there wasn’t a sufficient market for the units. The developers have said that only about 30 to 35 units have been rented at any given time, according to McKenna. Monthly rents range from $1,375 for a one-bedroom apartment to $1,675 for a two-bedroom unit, according to North Pointe’s Web site.

Hanover’s appeals board wasn’t convinced by the developers’ claims and denied the request. McKenna said the town didn’t impose any condition on the project to make the project uneconomic.

“It was constructed and permitted exactly as the developer requested,” said McKenna. “The town said, ‘We’re not going to relieve you of a fundamental aspect of your project.'”

The developers appealed to the Housing Appeals Committee. During the appeals process, the developers filed a second notice of project change to remove the age restriction so they could market to a younger pool of consumers.

The developers eventually withdrew their appeal to convert the rental units into condos, but still sought to eliminate the age restriction. The Housing Appeals Committee heard the case in June.

It’s the first time that committee has heard a case like this, according to a spokesman from the state Department Housing and Community Development.

‘First Impression’

The case comes after an explosion in the development of so-called active-adult communities throughout Massachusetts in recent years. There were 150 active-adult communities in 93 communities in eastern and central Massachusetts either in existence or under construction, according to a 2005 study done for the Boston-based Citizens’ Housing and Planning Association. Those projects translated into more than 10,000 units and another 14,000 units were planned, proposed or in the permitting process during that time, the study showed.

Such projects have become popular because many communities have been less resistant to age-restricted housing. A number of communities, worried about education costs, have been more willing to approve active-adult communities because they generate fewer schoolchildren.

Some towns even created special zoning for age-restricted housing and offered various incentives, including density bonuses.

With the housing market slump, however, developers have had trouble selling units. In some cases, developers have sought permissions to remove the age restriction, and towns have complied.

But Buckley said it’s unfair to ask a community to absorb a project that’s different from what originally was approved and built.

The town of Hanover, for example, approved North Pointe after analyzing the impact the project would have on its local services.

“The town said, ‘We made a decision based upon one set of facts and we felt we could live with the impacts of the project,'” said Buckley. “We don’t have a chance now to alter the project to absorb the added impact.”

Buckley questioned why the developer is now arguing that the market for age-restricted housing is oversaturated.

“Our response is that before [they] built the project, [they] submitted data to support that there was a market. Why did it change so quickly?” he asked.

And Buckley said he wonders why the onsite septic system was designed and built to accommodate a non-age-restricted housing development. Buckley said the developer’s argument is that it was prudent to design the septic system in that manner, but the septic system design raised suspicions in the town that the developers always intended to change the occupancy of the development.

McKenna said it’s tough to predict the outcome of the case.

“The matter is a case of first impression, meaning that neither side has precedent to allow it to predict how the Housing Appeals Committee will rule,” he said.