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PRINTER'S NO. 522
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 529
Session of
2025
INTRODUCED BY PROKOPIAK, SANCHEZ, GIRAL, HILL-EVANS, KHAN,
SCHLOSSBERG, KENYATTA, DALEY, SHUSTERMAN, GREEN, MADDEN,
CEPEDA-FREYTIZ, CERRATO, HADDOCK AND BOYD, FEBRUARY 10, 2025
REFERRED TO COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT,
FEBRUARY 10, 2025
AN ACT
Amending Title 53 (Municipalities Generally) of the Pennsylvania
Consolidated Statutes, establishing the Smart Growth Zoning
and Housing Program and the Smart Growth Zoning District
Fund.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Title 53 of the Pennsylvania Consolidated
Statutes is amended by adding a chapter to read:
CHAPTER 63
SMART GROWTH ZONING AND HOUSING PROGRAM
Sec.
6301. Definitions.
6302. Smart Growth Zoning and Housing Program.
6303. Submission to department.
6304. Requirements.
6305. Certificate of compliance.
6306. Smart Growth Zoning District Fund.
6307. Other discretionary money.
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6308. Design standards.
6309. Approval of projects.
6310. Administration.
6311. Repayment.
§ 6301. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Approved smart growth zoning district." A smart growth
zoning district that has been adopted by a municipality and
approved by the department in accordance with this chapter and
the guidelines of the department, so as to be eligible for the
receipt of financial and other incentives.
"Attainable housing." Housing attainable to and occupied by
individuals and families whose annual income is equal to or less
than 120% of the areawide median income as determined by the
United States Department of Housing and Urban Development.
"Density bonus payment." A one-time payment to a
municipality from the Smart Growth Zoning District Fund or other
money authorized by the General Assembly for each housing unit
of new construction that is created in a smart growth zoning
district.
"Department." The Department of Community and Economic
Development of the Commonwealth.
"Developable land area." An area within an approved smart
growth zoning district that can be feasibly developed into
residential or mixed-use development determined in accordance
with guidelines of the department. The term does not include:
(1) Land area that is already substantially developed,
including existing parks and dedicated, perpetual open space
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within a substantially developed portion.
(2) Open space designated by the municipality as
provided in section 6304 (relating to requirements).
(3) Areas exceeding one-half acre of contiguous land
that are unsuitable for development because of topographic
features or for environmental reasons, such as wetlands.
"Duplex housing." A residential building with two dwelling
units separated by a horizontal or vertical wall.
"Dwelling unit." A single unit providing complete
independent living facilities for one or more individuals,
including permanent facilities for cooking, eating, living,
sanitation and sleeping.
"Eligible location." An area that, by virtue of the area's
infrastructure, transportation access, existing underutilized
facilities or location, makes the area a highly suitable
location for residential or mixed-use smart growth zoning
districts, including:
(1) Areas near transit stations, including rapid
transit, commuter rail and bus and ferry terminals.
(2) Areas of concentrated development, including town
and city centers and other existing commercial districts.
"Fund." The Smart Growth Zoning District Fund established
under section 6306(a) (relating to Smart Growth Zoning District
Fund).
"Housing production summary." A detailed summary of the
municipality's:
(1) Attainable housing production history.
(2) Housing needs and housing demand assessment.
(3) Analysis of development constraints and capacity.
(4) Current housing goals and strategy for achieving
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those goals.
(5) Proposed locations for attainable housing
production.
"Mixed-use development." A development containing a mix of
residential uses and nonresidential uses, including commercial,
institutional, industrial or other uses, all conceived, planned
and integrated to create vibrant, workable, livable and
attractive neighborhoods.
"Municipality." A city, borough, incorporated town or
township or home rule municipality.
"New construction." Construction of new housing units, the
substantial rehabilitation of existing buildings or the
conversion to residential use of existing buildings to create
additional housing units, to the extent that those units could
not have been constructed or converted without the smart growth
zoning district.
"Program." The Smart Growth Zoning and Housing Program
established under section 6302 (relating to Smart Growth Zoning
and Housing Program).
"Project." A proposed residential or mixed-use development
within a smart growth zoning district.
"Smart growth zoning district." A zoning district adopted by
a municipality under this chapter that replaces or is
superimposed over one or more zoning districts in an eligible
location, in accordance with section 6304.
"Triplex housing." A residential building with three
dwelling units separated by a horizontal or vertical wall.
§ 6302. Smart Growth Zoning and Housing Program.
(a) Establishment.--The Smart Growth Zoning and Housing
Program is established within the department for the purpose of
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distributing money to a municipality that has adopted by
ordinance an approved smart growth zoning district.
(b) Creation of district.--By ordinance, a municipality may
adopt a smart growth zoning district in an eligible location and
may include adjacent areas that are served by existing
infrastructure and utilities and that have safe pedestrian
access to at least one destination of frequent pedestrian use,
such as a school, civic facility, place of commercial or
business use, place of employment or recreation or transit
station. In a smart growth zoning district, a municipality shall
zone for primary residential use as of right and may also permit
business, commercial or other uses consistent with primary
residential use. A smart growth zoning district ordinance shall
be adopted by a majority vote of the governing body of the
municipality.
(c) Duties of department.--The department shall establish
guidelines necessary to implement and administer this chapter.
§ 6303. Submission to department.
(a) Application.--The department shall develop and prescribe
a method for a governing body of a municipality to submit to the
department the necessary materials for a determination of
approval for the program. The application must:
(1) Identify and describe the boundaries of the smart
growth zoning district.
(2) Identify and describe the developable land area
within the smart growth zoning district.
(3) Identify and describe other residential development
opportunities for infill housing and the residential reuse of
existing buildings and underutilized buildings within already
developed areas.
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(4) Include a housing production summary, which shall
include an estimate of the projected number of units of new
construction that could be built in the smart growth zoning
district.
(5) Include a copy of the smart growth zoning district
ordinance.
(6) By narrative and exhibits, establish the elements
under section 6304 (relating to requirements).
(b) Determination.--
(1) The department shall approve an application for the
program if the smart growth zoning district meets the
requirements under section 6304. If approved, the smart
growth zoning district shall be eligible for payments and
incentives under section 6306 (relating to Smart Growth
Zoning District Fund).
(2) If the department denies the application, the
department shall inform the applicant of the deficiencies in
the application. A governing body of a municipality may
reapply for approval after addressing any deficiencies in a
prior application.
(3) If the department does not make a determination on a
complete application within 60 days of receipt, the
application shall be deemed approved.
(c) Revocation.--The department may revoke approval if the
municipality fails to meet the minimum requirements for a smart
growth zoning district provided under section 6304.
§ 6304. Requirements.
(a) Minimum requirements.--A smart growth zoning district
shall satisfy the following minimum requirements:
(1) Each smart growth zoning district shall be located
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in an eligible location.
(2) The zoning for each smart growth zoning district
shall provide for residential use to permit a mix of housing
for families, individuals, persons with special needs and the
elderly.
(3) Housing density in a smart growth zoning district
shall be at least 20 units per acre for multifamily housing
on the developable land area, eight units per acre for
single-family homes on the developable land area and 12 units
per acre for duplex housing and triplex housing on the
developable land area.
(4) The ordinance for each smart growth zoning district
shall provide that not less than 20% of the residential units
constructed in projects of more than 12 units shall be
attainable housing and shall contain mechanisms to ensure
that not less than 20% of the total residential units
constructed in each smart growth zoning district shall be
attainable housing.
(5) A smart growth zoning district shall permit infill
housing on existing vacant lots and shall allow the provision
of additional housing units in existing buildings, consistent
with neighborhood building and use patterns, building codes
and fire and safety codes.
(6) A smart growth zoning district may not be subject to
limitation of the issuance of building permits for
residential uses or a local moratorium on the issuance of
such permits.
(7) A smart growth zoning district may not impose
restrictions on age or any other occupancy restrictions on
the district as a whole or any portion thereof or project
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therein. Applicants may pursue the development of specific
projects within a smart growth zoning district that are
exclusively for the elderly, the disabled or for assisted
living. The department shall adopt guidelines limiting the
percentage of units in the district that qualify the
municipality for density bonus payments under section 6306
(relating to Smart Growth Zoning District Fund) that may be
subject to restrictions that limit occupancy exclusively for
the elderly, the disabled or for assisted living. Not less
than 25% of the housing units in a project that limits
occupancy exclusively for the elderly, the disabled or for
assisted living within a smart growth zoning district shall
be attainable housing.
(8) Housing in a smart growth zoning district shall
comply with Federal, State and local fair housing laws.
(9) A smart growth zoning district may not exceed 15% of
the total land area in the municipality. Upon request, the
department may approve a larger land area if the approval
serves the goals and objectives of this chapter.
(10) The aggregate land area of all approved smart
growth zoning districts in the municipality may not exceed
25% of the total land area in the municipality. The
department may approve a larger combined land area if the
department determines that the approval serves the goals and
objectives of this chapter.
(11) Housing density in any smart growth zoning district
shall not overburden infrastructure as it exists or may be
practicably upgraded in light of anticipated density and
other uses to be retained in the district.
(12) A smart growth zoning district ordinance shall
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define the manner of review by the municipality in accordance
with section 6309 (relating to approval of projects) and
shall specify the procedure for review in accordance with
guidelines.
(b) Open space.--A smart growth zoning district ordinance
may modify or eliminate the municipality's dimensional standards
in order to support desired densities, mix of uses and physical
character. The standards that are subject to modification or
waiver may include height, setbacks, lot coverage, parking
ratios and locations and roadway design standards. Modified
requirements may be applied as of right throughout all or a
portion of the smart growth zoning district, or on a project-
specific basis through the smart growth zoning district plan
review process as provided in the ordinance. A municipality may
designate certain areas within a smart growth zoning district as
dedicated perpetual open space as defined in section 2(4) of the
act of January 19, 1968 (1967 P.L.992, No.442), entitled "An act
authorizing the Commonwealth of Pennsylvania and the local
government units thereof to preserve, acquire or hold land for
open space uses." The amount of open space shall not be included
as a developable land area within the smart growth zoning
district. Open space may include an amount of land equal to up
to 10% of what would otherwise be the developable land area if
the developable land area would be less than 50 acres and 20% of
what would otherwise be the developable land area if the
developable land area would be 50 acres or more.
(c) Mixed use.--The smart growth zoning district ordinance
may provide for mixed-use development subject to any limitations
that may be imposed by guidelines of the department.
(d) Historic district.--A smart growth zoning district may
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encompass an existing historic district. A municipality, with
the approval of the department, may establish a historic
district in an approved smart growth zoning district in
accordance with the act of June 13, 1961 (P.L.282, No 167),
entitled "An act authorizing counties, cities, boroughs,
incorporated towns and townships to create historic districts
within their geographic boundaries; providing for the
appointment of Boards of Historical Architectural Review;
empowering governing bodies of political subdivisions to protect
the distinctive historical character of these districts and to
regulate the erection, reconstruction, alteration, restoration,
demolition or razing of buildings within the historic
districts," as long as the establishment of the historic
district meets the requirements for a historic district and does
not render the municipality noncompliant with this chapter, as
determined by the department. The historic districts may be
coterminous or noncoterminous with the smart growth zoning
district. Within any historic district, the requirements of the
historic district may apply to existing and proposed buildings.
(e) Municipal requirements.--A municipality may require more
attainable housing than required by this chapter, both in the
percentage of units that must be attainable housing and in the
levels of income for which the attainable housing must be
accessible, provided that the thresholds may not unduly restrict
opportunities for development.
(f) Density requirement.--With respect to a municipality
with a population of fewer than 10,000, as determined by the
most recent Federal decennial census, for hardship shown, the
department may, in accordance with guidelines adopted under this
chapter, approve zoning for a smart growth zoning district with
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lower densities than provided in this chapter if the
municipality satisfies the other requirements under this
section. Approval may not be withdrawn solely because, in a
future census, the population of the municipality exceeds
10,000.
(g) Amendment or repeal of ordinance.--Any amendment or
repeal of a zoning ordinance affecting an approved smart growth
zoning district shall require the municipality to make the
payment required under section 6311(b) (relating to repayment).
Each amendment or repeal shall be submitted to the department
with an evaluation of the effect on the number of projected
units that will remain developable, if any, in relation to the
number of units that have been built and the number of units
that determined any corresponding zoning incentive payment paid
to the municipality.
(h) Authority.--Nothing in this chapter shall affect a
municipality's authority to amend its ordinances.
§ 6305. Certificate of compliance.
On or before October 1 of each year after the year of
approval of a smart growth zoning district by the department,
the department shall send a smart growth zoning district
certificate of compliance to each municipality with an approved
district. In order to receive a certificate, the municipality
shall verify within the time specified by the department that:
(1) The municipality has adopted an approved smart
growth zoning district ordinance.
(2) The certification has not been revoked by the
department.
(3) The smart growth zoning district is being developed
in a manner that reasonably complies with the applicable
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minimum requirements in section 6304 (relating to
requirements).
(4) The municipality has not unreasonably denied plans
for projects or has only denied plans for projects in a
manner consistent with the municipality's smart growth zoning
district ordinance and this chapter.
§ 6306. Smart Growth Zoning District Fund.
(a) Establishment and purpose of fund.--
(1) The Smart Growth Zoning District Fund is established
within the State Treasury to provide funding for the program.
(2) The General Assembly may appropriate money to the
fund from the General Fund for the purpose of awarding
incentives and bonus payments through the program.
(b) Payments generally.--
(1) Payments under this section shall be made subject to
available money appropriated by the General Assembly to the
fund.
(2) Money in the fund is appropriated on a continuing
basis to the department for the program.
(c) Zoning incentive payment.--
(1) Each municipality with an approved smart growth
zoning district shall be eligible for payments under the
program.
(2) The Commonwealth shall pay from the fund a zoning
incentive payment to municipalities with an approved smart
growth zoning district.
(3) The payments shall be made according to the
following schedule:
Projected Units of New
Construction Payment
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Up to 20 $10,000
21 to 100 $75,000
101 to 200 $200,000
201 to 500 $350,000
501 or more $600,000
(4) Subject to any conditions imposed by the department
as a condition of approving a smart growth zoning district,
the zoning incentive payment shall be payable upon
confirmation of approval of the smart growth zoning district
by the department. The projected number of units shall be
based upon the zoning adopted in the smart growth zoning
district.
(d) Density bonus payments.--
(1) The department shall pay from the fund a one-time
density bonus payment to each municipality with an approved
smart growth zoning district.
(2) The density bonus payment shall be $3,000 for each
unit of new construction created in the smart growth zoning
district.
(3) The amount due shall be paid on a unit-by-unit basis
in accordance with department guidelines, upon submission by
a municipality of proof of issuance of a building permit for
a particular housing unit or units within the district.
§ 6307. Other discretionary money.
When awarding discretionary money to municipalities regarding
smart growth and housing that is not paid through the fund, the
department, the Department of Environmental Protection and the
Department of Transportation shall use a methodology of awarding
money that favors municipalities with approved smart growth
zoning districts and other approved zoning policies or
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initiatives that encourage increased attainable housing
production in this Commonwealth, including inclusionary zoning.
§ 6308. Design standards.
(a) Adoption.--A municipality may adopt, in accordance with
program guidelines, design standards applicable to projects
undergoing review by the municipality to ensure that the
physical character of development within the smart growth zoning
district is complementary to adjacent buildings and structures.
The standards must provide for high-density quality development
consistent with the character of building types, streetscapes
and other municipality features traditionally found in densely
settled areas of the municipality or in the region of the
municipality.
(b) Restrictions.--
(1) A municipality may not adopt a design standard if
the design standard adds unreasonable costs to residential or
mixed-use developments.
(2) A design standard may not unreasonably impair the
economic feasibility of proposed projects.
(3) The department may disapprove a request for a smart
growth zoning district because of a design standard that adds
unreasonable costs or unreasonably impairs feasibility.
§ 6309. Approval of projects.
(a) Municipality approval.--A municipality may incorporate
provisions within the smart growth zoning district ordinance
that prescribe contents of an application for approval of a
project. The ordinance may require the applicant to pay for
reasonable consulting fees to provide peer review of the
applications for the benefit of the municipality, which may be
used only for expenses associated with the review of the
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development application by outside consultants. Any surplus
remaining after the completion of the review, including any
interest accrued, shall be returned to the applicant.
(b) Zoning.--
(1) An application to a municipality for approval under
a smart growth zoning district ordinance shall be governed by
the applicable zoning provisions in effect at the time of the
submission while the plan is being processed and pending any
appeal and for three years after approval.
(2) If an application is denied, the zoning provisions
in effect at the time of the application shall continue in
effect with respect to any further application filed within
two years after the date of the denial except as the
applicant may otherwise choose within that two-year period.
(c) Filing and hearing.--
(1) An applicant must file an application for approval
under this section with the municipal clerk or secretary.
(2) A copy of the application for approval under this
section, including the date of filing certified by the
municipal clerk or secretary, must be filed with the
municipality.
(3) The municipality shall hold a public hearing for
which proper notice has been given.
(4) (i) Within 120 days of the receipt of the
application for approval under this section by the
municipal clerk or secretary, the municipality shall make
a decision on the application.
(ii) Written notice of the decision under this
paragraph must be filed with the municipal clerk or
secretary.
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(iii) The required time limits for the action under
this paragraph may be extended by written agreement
between the applicant and the municipality.
(iv) Failure of the municipality to take action
within the 120-day period or extended time, if
applicable, shall be deemed to be an approval of the
plan.
(d) Notice and clarification.--
(1) The municipality shall issue to the applicant a copy
of the decision under subsection (c) that:
(i) Contains the name and address of the owner.
(ii) Identifies the land affected.
(iii) Identifies the plans that were the subject of
the decision.
(iv) Certifies that:
(A) A copy of the decision has been filed with
the municipal clerk or secretary.
(B) All plans referred to in the decision are on
file with the municipality.
(2) If 20 days have elapsed after the decision has been
filed in the office of the municipal clerk or secretary
without an appeal having been filed or if an appeal is
dismissed or denied, the municipal clerk or secretary shall
so certify on a copy of the decision.
(3) If the plan is approved by reason of the failure of
the municipality to timely act, the clerk shall make the
certification on a copy of the application.
(e) Conditions.--A municipality shall approve a project
under this section only as necessary to:
(1) ensure substantial compliance of the proposed
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project with the requirements of the smart growth zoning
district ordinance; or
(2) mitigate any extraordinary adverse impacts of the
project on nearby properties.
(f) Denial.--An application may be denied if:
(1) The project does not meet the conditions and
requirements under the smart growth zoning district
ordinance.
(2) The applicant failed to submit information and fees
required by the ordinance and necessary for an adequate and
timely review of the design of the project or potential
project impacts.
(3) It is not possible to adequately mitigate
extraordinary adverse project impacts on nearby properties by
means of suitable conditions.
(g) Appeals.--
(1) The court of common pleas in the county in which the
municipality is located shall hear an appeal of a decision
under this section by a party who is aggrieved by the
decision.
(2) An appeal under this subsection may be brought
within 20 days after the decision has been filed in the
office of the municipal clerk or secretary.
(3) Notice of the appeal under this subsection, with a
copy of the complaint, must be given to the municipal clerk
or secretary within the 20-day period under paragraph (2).
(4) Review shall be based on the record of information
and plans presented to the municipality.
(h) Validity.--A project approval shall remain valid and
shall run with the land indefinitely if construction on the land
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has commenced within two years after the decision is issued,
which time shall be extended by the time required to adjudicate
an appeal from the approval and if the project proponent is
actively pursuing other required permits for the project or
there is other good cause for the failure to commence
construction, or as may be provided in an approval for a
multiphase project.
§ 6310. Administration.
(a) Duties of department.--The department shall administer
the program and annually review and report on the program.
(b) Reports.--
(1) The department shall undertake or cause to be
undertaken an annual review and may require municipalities
with smart growth zoning districts to provide data for the
preparation of the annual report.
(2) Each annual report must:
(i) Be prepared on the basis of the data and made
available to the general public and submitted to the
General Assembly, not later than November 15 of each
year, and must cover the status of the program through
the end of the prior fiscal year.
(ii) Identify and describe the status of
municipalities that are actively seeking program
approval.
(iii) Identify approved smart growth zoning
districts and the amounts and anticipated timing of one-
time density bonus payments during the prior and current
fiscal year.
(iv) Summarize the amount of land areas zoned for
particular types of projects in both proposed and
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approved districts, the number of projects being reviewed
by municipalities under section 6309 (relating to
approval of projects), including the number and type of
proposed residential units, the number of building
permits issued and the number of completed housing units
and their type, and set out the one-time density bonus
payments made to each municipality.
(v) For the then-current and the immediately
succeeding fiscal years, make estimates for the:
(A) Number and size of proposed new districts.
(B) Potential number of residential units to be
allowed in new districts.
(C) Anticipated construction activity.
§ 6311. Repayment.
(a) Conditions.--
(1) If construction of an approved project has not been
started in the smart growth zoning district within the time
period under paragraph (2), the department shall require the
municipalities to repay to the department all money paid to
the municipality under this chapter for a smart growth zoning
district.
(2) Construction must begin within three years of the
date of the zoning incentive payment for the smart growth
zoning district. This period may be extended by the
department for good cause in accordance with the guidelines
of the department.
(b) Time.--
(1) Within 60 days of enacting an amendment or repeal of
an ordinance affecting an approved smart growth zoning
district in accordance with section 6304(g) (relating to
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requirements), the municipality shall repay to the department
any portion of the zoning incentive payment received in
excess of the zoning incentive payment that would have been
payable based on the sum of the number of units that have
been built and the number of units, if any, that will remain
developable under the smart growth zoning district.
(2) The department may include in the sum under
paragraph (1) any units that are developable in one or more
adopted smart growth zoning districts for which no zoning
incentive payment has been paid but for which the
municipality is nonetheless eligible if the associated units
would have the effect of replacing some or all of the units
that will no longer be developable as a result of the
proposed amendment or repeal.
(c) Source.--Money repaid to the department under this
section shall be credited to the funding source from which the
payment originated.
Section 2. This act shall take effect in one year.
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