on Jun 29, 2022

An Innovative Approach to Evaluating the Public and Private Benefits of Land Use Decisions

Written by Shuprotim Bhaumik and Alexander Meeks.

 

The Massachusetts Public Waterfront Act — “Chapter 91” — gives every state resident a legal right to access waterfront areas called tidelands. The Act defines specific requirements for land uses, building heights, and the siting of public open space in tidelands. The goal of these rules is to preserve public access to the waterfront.

In high-value real estate markets — such as Downtown Boston and Boston’s Seaport neighborhood — Chapter 91 requirements and real estate and economic development goals can come into conflict. On the one hand, waterfront tideland parcels offer access to high quality open space, provide opportunities for waterfront connectivity, permit water-dependent uses, and are the logical sites for resilient, green infrastructure. On the other, they provide significant opportunities for public fiscal return, enabling economic and housing development and private return on investment.

 

Under Chapter 91, if a property owner receives a waiver from the law to build bigger, higher, or otherwise reduce public access onsite, then the owner usually has to compensate the public for the public access it is removing. This compensation is called a “mitigation payment.” There is, however, no consistent or clear methodology or framework for negotiating such a payment. This lack of clarity can make waterfront development approvals and decision-making challenging and controversial.

 

To fill in this gap, the Conservation Law Foundation—an environmental advocacy organization based in New England—worked with HR&A to design the Massachusetts Tideland Development Calculator.

 

The Tideland Development Calculator estimates the additional land value unlocked by a project that reduces public access to tidelands compared to a Chapter 91-compliant project. The calculator suggests that this “land value premium” could be a source of financial compensation to the public that could support other public benefits, including alternative public access to the waterfront, water taxi stations, community spaces, public programming and/or coastal resilience infrastructure.

 

To assess the land value premium, the calculator creates two versions of the same project.

 

1. Proposed project.  The calculator allows the user to define a tideland site and a potential project on that site. Given regional market assumptions, the calculator estimates the ballpark land value of this proposed project.
2. Compliant comparison project.  The calculator compares the proposed project to a Chapter 91-compliant comparison project. The comparison project represents the legally achievable building scale onsite given Chapter 91 requirements. The compliant project is assumed to share the same proportional mix of uses as the proposed project.

The difference in value between the two projects (assuming the proposed project is taller or bulkier than the compliant project) is the “land value premium” – the total extra value generated by reducing public waterfront access.

 

By estimating the land value premium associated with relaxing Chapter 91 rules and limiting public access, the Calculator transparently sets the upper bound for negotiation about what amount of compensation is owed back to the public. The Calculator provides a framework for debating the private value at stake in Chapter 91 decisions and their economic and fiscal impacts. This information, which is usually not shared or agreed to, can serve as input to a more informed process of municipal harbor planning.

 

We invite you to play with the Calculator.  We welcome your suggestions as to how it could be made useful for your community and your land use debates.

 

This article is an abridged version of an article previously published on HR&A’s website and is a companion to an article published by The Conservation Law Foundation.  Both are part of a series of articles on the Massachusetts Tideland Calculator.