The following was distributed earlier today as my weekly Substack newsletter on Lowell politics. If you’d like to receive this weekly update by email in the future, sign up here. 

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The Lowell City Council held a special meeting on Monday, August 28, 2023, to continue work on the proposed Accessory Dwelling Unit (ADU) zoning amendment. The Council devoted the full 3.5 hours of this meeting to ADUs and moved closer to final action on the proposal. Much of the time was spent offering, debating, and voting on various amendments. In the end, the Council referred the draft ordinance and all the enacted amendments to the city’s Law Department to draft a fresh version of the ordinance which would then return to the Council for a “first reading.” At that point, the Council typically refers the amended ordinance to a public hearing that would be at least two weeks in the future. At that meeting, people could again speak on the proposal, Councilors will debate it and perhaps even take a final vote on it.

From the earliest stages of this year-long debate, the Council has been divided with seven Councilors consistently backing ADUs and four consistently opposing them. That division persisted Monday, although in several instances, pro-ADU Councilors voted for amendments that would make ADUs harder to obtain in certain circumstances.

To review, at its July 25, 2023 meeting, the Council engaged in a lengthy debate on ADUs that included a number of amendments to the original proposal. Vesna Nuon made four amendments that all passed. They were:

• Require a special permit for any detached structure that was to become an ADU.
• Cap the number of ADUs per City Council District at five per year. (There was a question if this was legal but on Monday night the City Solicitor’s office report that it was).
• Limit the number of bedrooms in an ADU to two.
• Prohibit ADUs being used as “short term rentals” and have DPD define short term rental for purposes of this ordinance.

Voting YES on the Nuon amendments were Councilors John Drinkwater, Wayne Jenness, John Leahy, Vesna Nuon, Dan Rourke, Paul Yem, and Mayor Sokhary Chau.Voting NO on the Nuon amendments were Councilors Erik Gitschier, Rita Mercier, Corey Robinson, and Kim Scott.

Also at the July 25, 2023, meeting, Councilor Scott also proposed amendments.

The first would require that there be at least one off street parking space for each bedroom in the ADU. This amendment passed with nine Councilors voting YES and just Councilors Gitschier and Jenness voting NO.

Scott then moved to require any ADU with two bedrooms to undergo site plan review by the Planning Board. This amendment failed with four voting for it (Gitschier, Mercier, Robinson, and Scott) and the other seven voting against it.

Scott then proposed as her third amendment that an ADU could not be constructed on a “non-conforming lot” meaning a lot that did not meet current zoning requirements. This amendment failed by the same four YES, seven NO, result as the prior roll call.

Consequently, when Monday’s Council meeting began, the five amendments that passed on July 25, 2023, described above were already in place.

As for Monday night, here’s a rundown on the amendments that were proposed and voted on:

Rita Mercier proposed that all ADUs be required to go before the Planning Board for a special permit. This failed with four voting for it (Gitschier, Mercier, Robinson, and Scott) and seven voting against it (Jenness, Leahy, Nuon, Rourke, Yem, Chau, and Drinkwater).

Corey Robinson proposed that ADU applicants be required to agree that any rent they charged would be at least 30 percent below the fair market value rent for Lowell as established by the US Department of Housing and Urban Development. Robinson explained that since ADU backers frequently cited the need for more affordable housing in explaining their support for ADUs, he wanted them to formalize that stated desire by including it in the ordinance.

If this was intended to “call the bluff” of the pro-ADU councilors, it didn’t work out that way since two of them – Vesna Nuon and Dan Rourke – joined the four ADU opponents – Robinson, Mercier, Scott, and Gitschier – in voting YES on this amendment so it passed. (Voting against it were Councilors Jenness, Leahy, Yem, Drinkwater, and Mayor Chau).

One caveat on this amendment came from the city solicitor who cautioned that it might run afoul of the state’s prohibition on rent control. He added that even if it was legal, it would likely be enforceable only for six months. After that, it would be voluntary. However, the solicitor is to research this and report back at the next meeting. The solicitor summed things up by saying “It’s not impossible [to do this] but there may be some speed bumps along the way.”

Wayne Jenness noted that since the ADU proposal prohibited adding new electrical service for an ADU, he was concerned about situations where more total electricity was needed than was available to the existing household. Several councilors were of the opinion that as long as the property retained just one electrical meter, there was no limit on how much that service could be increased. Still, Jenness moved for the inclusion of explicit language that while no new utilities could be added, the existing utilities could be upgraded to service the ADU. This motion passed with ten councilors in favor and Councilor Mercier voting present.

Councilor Jenness next moved that the city solicitor prepare a vote for the Council to take that would initiate a home rule petition in the state legislature that would permit Lowell to offer a property tax reduction for ADUs similar to what was done by Salem, Massachusetts. He also asked for a report from the City Manager on the fiscal impact of such a proposal. After much discussion of the consequences of this proposal, the motion passed with seven voting YES (Jenness, Leahy, Nuon, Rourke, Yem, Chau, and Drinkwater) and four voting NO (Gitschier, Mercier, Robinson, and Scott).

Kim Scott noted that the city of Newton, which has allowed ADUs for two decades, recently amended its ordinance to increase the distance the ADU must be from the boundary line (i.e., “setback”) and proposed Lowell do the same. DPD explained that the Lowell ADU proposal has setbacks of 15 feet from the front boundary of the property, 5 feet from the side and rear boundaries, and 10 feet from the main house on the property” then asked which setbacks the motion referred to. Scott clarified that she wanted to increase the 5 foot side and rear setbacks and then made a motion that those setbacks be increased from the proposed 5 feet to 7.5 feet. This motion attracted one of the pro-ADU Councilors (John Leahy) but still failed with five voting YES (Leahy, Mercier, Robinson, Scott and Gitschier) and six voting NO (Jenness, Nuon, Rourke, Yem, Chau and Drinkwater).

Councilor Scott then made a motion for a report from the city solicitor on how the “owner-occupied” requirement would work when property was held in trust. This was an important issue to raise. Her colleagues apparently agreed because they voted unanimously for the motion.

Here is why this is so important: Each year, hundreds of Lowell homeowners put their homes into trusts, usually to protect the property from possible nursing home charges and to dictate who will own the property after the death of the occupant. Typically the homeowner continues to occupy the residence and to treat it as their own house. However, from a legal perspective, that’s not how it works.

The essence of a trust is divided ownership. The trustee is said to hold “legal title” to the property, while the beneficiary holds “beneficial title.” Put another way, the trustee owns the property solely for the benefit of the beneficiary. In the typical scenario, the homeowner is both the trustee and the beneficiary, however, there are always other, contingent beneficiaries. These might be the adult children of the homeowner who, according to the terms of the trust, will become the owners of the property upon the death of the primary beneficiary (i.e., the homeowner). If there’s only one trustee and one beneficiary and those are the same person, then the legal and beneficial titles merge and the trust terminates automatically. Consequently, there is always someone else involved in a trust.

This becomes an issue when it comes to the proposed ADU ordinance which mandates that the “owner” of the property also reside in the property to qualify for an ADU. So if the property is held in trust, who is the “owner” who must live there? The trustee or the beneficiary?

This issue arose in 2011 when the Massachusetts legislature updated the state’s homestead law. In Massachusetts, a homestead protects the family home from the laws of debt collection but it only applies to the property owner and their family who live in the property. Before 2011, it was unclear whether property in trust was eligible for homestead protection. The 2011 amendment said that it was and specified that the trustee has the legal authority to declare the homestead but the beneficiary is the person who must reside in the property as their primary residence.

Something similar might be appropriate when it comes to the owner-occupancy requirement for ADUs. The trustee of the trust would be the person who signed the application for a permit and all other legal documents, but it would be one or more beneficiaries of the trust who would have to live there (in either the main house or in the ADU) to meet the owner-occupant requirement.

This is an important clarification for another reason. There are countless types of trusts. While most that own single family homes are for estate planning, many other trust are used to limit liability for people in business. Today, limited liability corporations (LLCs) have become the preferred ownership vehicle for real estate investors, but it was always ownership by trusts that served the purpose before LLCs gained popularity. If the ADU trust rules provide a loophole for investors to exploit, they will take advantage of it, so it’s important for the Council to make and enforce clear limits on trust ownership.

But enough about trusts . . .

Corey Robinson then moved that if the ADU ordinance is eventually passed, the City Council must hold a formal review of its implementation after a year or upon the issuance of 16 permits for ADUs, whichever comes first. This motion passed unanimously.

Notably, at the July 30 marathon ADU meeting, Councilor Robinson made a similar motion only in July he called for a one year “sunset” provision that would automatically terminate the ADU ordinance unless the Council at that time affirmatively extended it; however, that motion was redrawn before any vote was taken.

This one year review that was adopted Monday is critically important. Hopefully, the city departments responsible for issuing permits for ADUs and the Planning Board that votes on special permits for ADUs keep detailed records about all ADU proposals, both those that are allowed and those that are denied. Thus far, Councilors have had to rely on their own intuition and on limited feedback from other communities that have adopted ADUs. Neither of those provide solid evidence for what might happen in Lowell. After a year, there should be some actual data about what is working in the ordinance and what is not. Perhaps there will be abuses that will lead to the ordinance being tightened, but it’s just as likely that some of the limitations that have been imposed now are unnecessary and could be rolled back in the future.

The final amendment of the night came from Mayor Sokhary Chau. After explaining that not only every neighborhood in the city is different, he said that every street is different. Citing concerns about parking, affordability, and density of existing housing, he moved that all ADUs proposed on lots of 7000 square feet or less be required to first obtain a special permit from the Planning Board before being approved.

This was a major twist since most of the lots in the older, denser sections of the city are on lots smaller than 7000 square feet. Prior attempts by anti-ADU Councilors to impose such a requirement for all ADUs (as opposed to just those for detached structure ADUs) have failed along the four councilors against ADUs and seven councilors in favor of ADUs split with Mayor Chau being opposed to these additional requirements.

However, when the roll was called, this motion passed unanimously. Several of the pro-ADU councilors explained that they would support this motion because it did still allow ADUs on lots of any size, albeit with a Planning Board special permit requirement; and because of the one-year review of the ordinance requirement that would allow this requirement to be removed if it proves unnecessary.

To say some Councilors voted for this “grudgingly” would be an understatement, but I suspect the Mayor had lobbied them in advance, advocating this strategically in an attempt to find some agreement among the entire Council but also from a sincere belief that already densely packed neighborhoods that suffer from too many cars and too little parking would be made worse by a flood of ADUs and the vehicles of their occupants.

With that, the clock struck 10 pm and the Council’s self-imposed deadline for meetings to end was reached. With seconds to spare, Councilor Rourke moved to refer the ordinance and amendments to the Law Department for drafting and then return it to the City Council at its next meeting for a first reading. This motion passed unanimously and the Council meeting adjourned.