Appeal of Town of Windham

THE STATE OF NEW HAMPSHIRE

SUPREME COURT

In Case No. 2021-0473, Appeal of Town of Windham, the
court on October 4, 2022, issued the following order:

Having considered the parties’ briefs, oral arguments, and the record on
appeal, we conclude that a formal written opinion is unnecessary in this case.
The petitioner, Town of Windham (Town), appeals an order of the Housing
Appeals Board (HAB) vacating and remanding a decision by the Town’s
planning board. The decision denied the request of the respondent, Ten Harris
Road, LLC, for a waiver of the workforce housing requirement set forth in the
Town’s zoning ordinance. The Town argues that the HAB erred by vacating
and remanding the decision to the board with instructions to address an
appropriate percentage of workforce housing for the proposed project. We
conclude that the HAB reasonably vacated the board’s denial of the waiver
request. However, we decline to review whether the HAB acted unlawfully or
otherwise exceeded the scope of its authority by remanding the matter with
instructions because the Town has not preserved that issue for our review and
the respondent has not appealed it. Accordingly, we affirm.

The following facts are supported by the record or are otherwise
undisputed. The respondent owns property located in the Town’s rural zoning
district. The property is approximately six acres and is improved by a single-
family residence. The respondent seeks to redevelop the property with a multi-
unit condominium complex comprised of a mix of workforce and market-rate
housing. In September 2020, the respondent submitted a site plan application
to the board proposing to develop sixteen single-family condominiums, which,
together with the existing single-family house, would result in seventeen total
units on the property. The respondent submitted the site plan application as a
workforce housing project under the Town’s zoning ordinance, which
authorizes the development of workforce housing in the rural district under
certain circumstances. See Windham, N.H., Zoning Ordinance § 619.3 (2020).

Relevant to the respondent’s site plan application, the Town’s ordinance
requires that, for any workforce housing project in the rural district, at least 50
percent of the units “must qualify as workforce housing.” Windham, N.H.,
Zoning Ordinance § 619.7.3.3 (2020); see also RSA 674:58, IV (2016) (defining
“workforce housing”). The ordinance provides that, “[i]f this percentage creates
a financial burden and makes the development not financially viable, a waiver
can be sought from the [board] to reduce this percentage.” Windham, N.H.,
Zoning Ordinance § 619.7.3.3 (2020). It further states that any “request for a
waiver must be accompanied by financial documentation justifying such waiver
request.” Id.

In its site plan application, the respondent proposed that four of the
seventeen units — or 23.5 percent of the total development — qualify as
workforce housing. Accordingly, the respondent requested a waiver of the 50
percent workforce housing requirement set forth in the Town’s ordinance. See
id. In support of its request, the respondent submitted a workforce feasibility
analysis from an independent engineering firm, which concluded that
developing 50 percent of the units as workforce housing would not be
financially feasible and would likely generate a financial loss of approximately
$130,000. The firm further concluded that a 25 percent rate would generate “a
positive bottom line.”1 In its application to the board, the respondent also
submitted a letter from a municipal planner citing the need for workforce
housing in Windham and explaining that 25 percent was within the “norm” of
workforce housing required by other communities in the state.

Between December 2020 and February 2021, the board conducted a
series of hearings and a site walk at which it discussed, among other things,
the respondent’s site plan application and accompanying waiver request.
During the hearings, board members expressed their disagreement with the
financial data set forth in the respondent’s workforce feasibility analysis
submitted as part of its application. The board also took issue with the
respondent’s failure to identify other variations at different percentages for the
feasibility of the project. The board did not retain a financial expert to review
the respondent’s workforce feasibility analysis, but, rather, requested that the
Town’s engineer review the report. Following his review, the engineer agreed
with the report’s conclusion that if the respondent is required to satisfy the 50
percent requirement the proposed development would not be financially
feasible.

Ultimately, the board denied the respondent’s waiver request,
concluding, inter alia, that the respondent’s financial information did not
support the request. Thereafter, the respondent appealed to the HAB, arguing
that the board’s decision to deny the waiver request was unlawful and
unreasonable. Specifically, the respondent argued, in part, that the board
erred by relying upon its own “personal knowledge” in rejecting the conclusions
set forth in the workforce feasibility analysis and determining that the reports
submitted by the respondent did not support granting the workforce housing
waiver.

In July 2021, the HAB issued an order vacating and remanding the
board’s decision. The HAB determined that the reports submitted by the

1 The 25% workforce housing rate was calculated based upon the proposed plan’s development of

16 new units, as opposed to 17 units which included the existing building on the property.

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respondent, as well as the Town engineer’s review, demonstrated “that at 50
percent the project would not be economically viable.” Further, the HAB
determined that the board’s members unreasonably disregarded the findings of
the reports submitted in support of the application based upon their own
personal knowledge. Accordingly, the HAB concluded that the board’s decision
to deny the respondent’s waiver request for a workforce housing percentage
reduction was unreasonable and inconsistent with RSA 674:58, III and the
Town’s ordinance. The HAB vacated the board’s denial of the waiver and
remanded the matter to the board with specific instructions that the board
“reconsider an appropriate workforce housing percentage” in light of both RSA
674:58 and the Town’s workforce housing ordinance.

The Town moved for rehearing, arguing that the HAB’s decision to
remand with specific instructions to address the issue of the appropriate
percentage of workforce housing was unlawful because the planning board
does not have authority to propose particular workforce housing percentages
as instructed by the HAB. Rather, in its view, the board may only reject or
accept percentages that the applicant has proposed. The HAB denied the
Town’s request for rehearing, finding that “[t]he Certified Record makes clear
that the 50% requirement could not be economically met and, rather than
investigate, adapt, recommend, or discuss a reasonable workforce housing
percentage . . ., the Town balked even after indicating that a lesser percentage
was probably needed.” This appeal followed.

When reviewing a planning board’s decision, the HAB must uphold the
decision unless there was an error of law or the HAB is persuaded by the
balance of probabilities that the decision was unreasonable. See RSA
677:6, :15, V (2016); RSA 679:9, II (Supp. 2021); see also RSA 679:9, I (Supp.
2021) (“Appeals to the [HAB] shall be consistent with appeals to the superior
court pursuant to RSA 677:4 through RSA 677:16.”). The party seeking to set
aside the board’s decision bears the burden of proving that the decision was
unlawful or unreasonable. RSA 677:6; see RSA 679:9, I. The HAB must treat
the planning board’s factual findings as prima facie lawful and reasonable. See
Trustees of Dartmouth Coll. v. Town of Hanover, 171 N.H. 497, 504 (2018); see
also RSA 677:6; RSA 679:9, I. The HAB’s review is not to determine whether it
agrees with the planning board’s findings, but, rather, whether there is
evidence in the record upon which the planning board could have reasonably
based its findings. See Trustees of Dartmouth Coll., 171 N.H. at 504.

Our review of the HAB’s decision is governed by RSA chapter 541. See
RSA 679:15 (Supp. 2021) (“Decisions of the [HAB] may be appealed to the
supreme court by any party in accordance with the provisions of RSA 541 as
from time to time amended.”). We will not set aside the HAB’s order unless we
are satisfied, by a clear preponderance of the evidence, that it is unjust or
unreasonable. See RSA 541:13 (2021).

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 On appeal, the Town argues that the HAB erred by vacating and
remanding the board’s decision to deny the respondent’s request to waive the
workforce housing requirement. Resolving this issue requires that we interpret
the language of the Town’s ordinance. The interpretation of an ordinance
presents a question of law, which we review de novo. Town of Carroll v. Rines, 164 N.H. 523, 526 (2013). We construe the words and phrases of an ordinance
according to the common and approved usage of the language. Id. When the
language of an ordinance is plain and unambiguous, we need not look beyond
the ordinance itself for further indications of legislative intent. Id.

As an initial matter, in its written order, the HAB concluded “that at 50
percent the project would not be economically viable.” We conclude that the
HAB’s determination was neither unjust nor unreasonable. The workforce
feasibility analysis submitted by the respondent in support of the waiver
request concluded that at a rate of 50 percent workforce housing the project
would result in a financial loss of approximately $130,000. At the request of
the board, the Town’s consulting engineer reviewed the workforce feasibility
analysis and opined that “the analysis effectively demonstrates [a] lack of
economic viability” if the development is subject to the 50 percent workforce
housing rate. The record does not include evidence that any members of the
board were so qualified to disregard the findings of both the workforce
feasibility analysis and the opinion of the Town’s consulting engineer. Indeed,
on appeal the Town appears to concede that the respondent satisfied its
burden of establishing that a 50 percent workforce housing rate was not
financially viable, stating “there appeared [to be] support [from the board] for
some number less than the 50% required.”

Nevertheless, the Town argues that the respondent failed to establish
that 23.5 percent workforce housing — the percentage the respondent
requested — was warranted under the circumstances. In the Town’s view,
under the ordinance an applicant bears the burden of demonstrating that its
requested percentage is warranted, and, if an applicant fails to satisfy that
burden, the board may deny the waiver request on that basis. The Town posits
that, in the event the board rejects the proposed percentage, it is under no duty
to “construct” or discuss an acceptable alternative. Consequently, the Town
argues that the HAB misconstrued the ordinance in vacating the planning
board’s denial of the waiver request and remanding the matter to the board
with instructions which, in the Town’s view, mandates that the board
“determine” the appropriate percentage of workforce housing.2

2 Contrary to the Town’s argument, the HAB did not instruct the board to sua sponte “determine”

the appropriate workforce housing percentage for the respondent’s project. Rather, the HAB
instructed the board to engage with the respondent and investigate, recommend or discuss a
reasonable workforce housing percentage.

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 Assuming without deciding that the record does not support the
respondent’s proposed 23.5 percent workforce housing request, we are
unpersuaded by the Town’s argument and conclude that the HAB acted
lawfully. The ordinance states, in relevant part: “If [the 50 percent threshold]
creates a financial burden and makes the development not financially viable, a
waiver can be sought from the [board] to reduce this percentage. The request
for a waiver must be accompanied by financial documentation justifying such
waiver request.” Windham, N.H., Zoning Ordinance § 619.7.3.3 (2020).

When read in isolation, the language of this ordinance could be
interpreted as placing the burden of identifying an appropriate workforce
housing percentage below 50 percent solely upon the applicant seeking a
waiver of the workforce housing requirement. See id. However, such an
interpretation of the ordinance’s language would produce an absurd result.
See Appeal of Morton, 158 N.H. 76, 82 (2008) (“We cannot interpret the
applicable rules and statutes to require such an absurd result.”). Specifically,
such an interpretation would require an applicant to submit a new application
requesting a different percentage of workforce housing each time the board
decides that the requested percentage is inappropriate or unwarranted under
the circumstances. Meanwhile, the board would have no obligation to engage
with the applicant or discuss a mutually acceptable percentage. Nor would the
applicant have the benefit of the board’s views on the project before it
submitted its next waiver request. This result would impose an onerous
burden on applicants in both time and financial resources, while relieving the
board of any obligation to express its views on what it might find appropriate
for the project under the circumstances.

Such a result would contravene the legislature’s clear intent of
encouraging the development of workforce housing throughout the state. See
RSA 672:1, III(e) (Supp. 2021). Indeed, the Town’s interpretation of the
ordinance is in direct tension with the legislature’s mandate that the
“[o]pportunity for development of [workforce housing] shall not be prohibited or
unreasonably discouraged by use of municipal planning and zoning powers or
by unreasonable interpretation of such powers.” Id. (emphasis added); see also
RSA 674:59, I (“In every municipality that exercises the power to adopt land
use ordinances and regulations, such ordinances and regulations shall provide
reasonable and realistic opportunities for the development of workforce
housing . . . .”).

Moreover, to accept the Town’s interpretation of the ordinance would
permit the board to engage in dilatory tactics that would contravene its duty to
assist citizens in the application process. See Richmond Co. v. City of Concord,
149 N.H. 312, 315 (2003) (noting that a planning board’s duty to provide
assistance to all its citizens is “aimed at preventing municipalities from
ignoring an application or otherwise engaging in dilatory tactics in order to
delay a project”). We therefore conclude that in light of the legislature’s

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mandate in RSA 672:1, III(e) and the board’s duty to assist applicants, the HAB
properly determined that the board erred by “completely denying the
[respondent’s] request for workforce housing percentage reduction” and, as a
result, remanding the matter to the board.

In further support of its argument that the applicant — not the board —
bears the sole burden of identifying an appropriate workforce housing
percentage, the Town cites Cherry v. Town of Hampton Falls, 150 N.H. 720
(2004). In that case, the applicants requested a special use permit to construct
a road within a wetland buffer area. Id. at 721. At the end of the hearing, the
board requested that the applicants reconsider the proposal to address the
scope of the wetland impact. Id. at 722. The applicants declined the request,
stating that the current plan presented the most viable option. Id. The
planning board denied the application because the applicants did not include a
feasible alternative to the proposed wetland impact. Id. The superior court
reversed the planning board and concluded that the applicants’ proposal did
not need to be perfect, just reasonable. Id. at 723. We reversed the superior
court and held that the planning board did not err by requiring the applicant to
propose a reasonable alternative. Id. at 724.

The Town argues that Cherry “governs this matter” and supports the
proposition that a planning board is not obligated to construct “its own version
of an application that was not before it.” In the Town’s view, our holding in
Cherry mandates that “when an applicant fails to satisfy underlying criteria for
approval, the appropriate action is to deny the application and require the
applicant to submit a new proposal which satisfies the criteria for approval.”
We disagree. Our holding in Cherry is distinguishable. First, the planning
board in Cherry actively engaged with the developer by requesting an
alternative road design that addressed the board’s concerns for the project’s
wetland impact. Id. at 722. Second, the board’s decision in that case involved
the scope of a wetland impact, id. at 722-24, whereas here the board’s decision
concerned the development of workforce housing. Thus, even if we were to
credit the Town’s reading of our holding in Cherry, that case is inapplicable to
our analysis here because the approval sought in Cherry did not include the
legislature’s specific protections for the development of workforce housing
previously discussed. See RSA 672:1, III(e). Accordingly, we decline to extend
our holding in Cherry to these circumstances and conclude that the HAB’s
decision vacating the board’s denial of the waiver request is neither unjust nor
unreasonable.

In the alternative, the Town argues that the HAB erred by exceeding the
scope of its review beyond its statutory authority in RSA 679:9 by remanding
with specific instructions. The Town acknowledges that it did not raise this
issue in its motion for rehearing. See RSA 541:4 (“[N]o ground not set forth [in
a motion for rehearing] shall be urged, relied on, or given any consideration by
the court, unless the court for good cause shown shall allow the appellant to

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specify additional grounds.”). Nevertheless, the Town argues that its argument
is preserved for our review because the question as to whether the HAB
exceeded the scope of its review concerns subject matter jurisdiction, which
may be raised at any time. See State v. Demesmin, 159 N.H. 595, 597 (2010).3

We disagree. “Subject matter jurisdiction is jurisdiction over the nature
of the case and the type of relief sought.” In re Guardianship of K.B., 172 N.H.
646, 648 (2019) (addressing the circuit court’s jurisdiction to modify another
state’s child-custody determination). Here, the Town does not argue to the
contrary — nor can it be disputed — that the HAB is vested with subject matter
jurisdiction to adjudicate the respondent’s appeal from the board’s decision
denying approval for a workforce housing development. See RSA 679:5, I(a).
Accordingly, the HAB’s decision to remand the case does not present a
question of subject matter jurisdiction. Because, as the Town concedes, it did
not raise the issue in its motion for rehearing, we decline to consider its
argument that the HAB’s order exceeded the scope of its review. See RSA
541:4.
Affirmed.

MACDONALD, C.J., and HICKS, BASSETT, HANTZ MARCONI, and
DONOVAN, JJ., concurred.

Timothy A. Gudas,
Clerk

3 The Town also contends that it could not argue the HAB exceeded the scope of its review in its

motion for rehearing because “the issue was not apparent until the Ruling on Rehearing was
entered.” We reject this argument because the HAB’s order on the motion for rehearing had no
bearing upon whether the HAB exceeded the scope of its review in its original order. Simply put,
we conclude that nothing precluded the Town from raising the issue in its motion for rehearing.

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