Affordable Housing

“If the City is to grow as it is projected to through 2030, development patterns will need to change to accommodate anyone other than the wealthiest consumers. Given the limited amount of available vacant land, a mix of moderate density (multi-unit) development will need to be considered to accommodate additional house-holds and allow for greater housing choice. That said, the City will not ‘build its way to affordability.’ The imbalance of demand and supply is so great that the City could not physically accommodate the development needed to affect pricing in a substantial manner. To this point, a combination of preservation and new construction will be necessary to ensure some level of price diversity within Newton.”  — Housing Needs Analysis and Strategic Recommendations, RKG Associates, June 2016.

Housing prices in Newton are off the charts. The median price for a single-family home in Newton is now estimated to be $1.19 million. The loss of smaller homes due to tear-downs and McMansions combined with limited supply of buildable land has made it more difficult for people to find affordable housing opportunities in this City. We have an increasing senior population and more young families want to move to the City to take advantage of our excellent school system and City services. In order for the City to address housing affordability, the City needs to step up and intervene – put forth policies and programs in place to assist with the preservation and creation of affordable housing opportunities. There are several tools and funding sources currently available that help create affordable housing opportunities.

Each have been instrumental in adding to our affordable housing inventory.

• Community Preservation Act – The Community Preservation Act (CPA) was adopted by Newton residents in 2001. The Act allows local communities to adopt a surcharge on property taxes – in Newton, it is a 1% surcharge and the City receives state matching funds for open space and recreation land, historic resources and affordable housing. As of August 2016, the Community Preservation funds have been used to “acquire or create 132 permanently affordable units, with 233 bedrooms.”

• Inclusionary Zoning Ordinance – The Inclusionary Zoning Ordinance requires residential developers who construct or build 6 or more units of housing to set aside a certain number as affordable to those earning no more than 80 percent of the area median income. In 2003, the Ordinance was amended to 1) increase the required percentage from 10% – 15% for those developments that are approved by special permit, 2) may be used for rentals or home ownership units, and 3) area median income may be 80% or less for rentals and up to 120% for home ownership units. Since its adoption, Inclusionary Zoning Ordinance funds have been used to create over 200 units of affordable housing.

• Accessory Apartments – The new accessory apartment ordinance allows for the creation of one accessory unit per lot in a home that has been in existence for at least 4 years where the property owner must occupy either the principal dwelling unit or the accessory apartment as their principal place of residence. The Apartment shall be a minimum of 250 Sq. feet and not more than 1,000 sq. ft or 40% of the total building size of the structure, whichever is less, or up to 1,500 sq. ft. by special permit. Detached accessory units are allowed by special permit and shall be a minimum of 250 sq. ft. and not more than 1,200 sq. ft. or 40% of the total building size of the structure, whichever is less. Both in 2009 and this past year, I supported amendments and expansion of the Accessory Apartment Ordinance to allow creation of more housing units within existing homes allowing current residents – particularly seniors, to remain in their homes, age in place and help provide additional income.

• Chapter 40B Development – Chapter 40B is a state law requiring cities and towns to have a minimum of 10% of their housing stock dedicated to “affordable housing” for low- and moderate-income individuals and families. The law provides for a permitting process that skips the local land use process where at least 25% of the proposed units in the development are restricted to families with incomes of less than 80% of the median and have rents or sale prices restricted to affordable levels for a period of at least 30 years AND the community has not met the 10% threshold or has not met the 1.5% land area requirement. The community can also have immunity from Chapter 40B developments if it submits a Housing Production Plan that is approved by the DHCD and the City meets the goals outlined in the Housing Production Plan.

Chapter 40B developments have been effective at increasing our affordable housing inventory. (Smaller scale developments such as those proposed by CAN-DO, the Myrtle Baptist Church project and the 192 Lexington Street projects were also created using Chapter 40B).

However, in rental developments built using Chapter 40B. all of the units built count toward a City’s subsidized housing inventory – including the market rate units and doesn’t effectively assist increasing a community’s truly affordable housing supply.

According to the City’s website: ‘Non-compliance with Chapter 40B makes a community vulnerable to developments that may not conform to the community’s larger land use goals. Compliance with 40B through the provision of affordable housing allows a community to regain control of its planning function.” This is why it is vital to ensure compliance with the law so that a local community can have control over the type and location of various developments. There are two ways a community can comply with Chapter 40B: 1) the community has reached 10% minimum requirement or 2) 1.5% of a community’s total land area zoned for residential, commercial, or industrial use has SHI affordable housing located on it. Currently, the City has claimed it has reached the 1.5% land area requirement and has asserted the safe harbor provision for the larger, dense housing projects.

What can we do to improve? A lot. As I’ve advocated over the years, the City needs to adopt a multi-pronged approach to address and meet the demand for affordable housing.

1. Continue to use of CPA funding to create affordable housing opportunities – including supporting non-profit development proposals that re-use and renovate existing housing stock while adding appropriately scaled density to existing neighborhoods throughout the City. I was an early sponsor and supporter of the adoption of the Community Preservation Act which has created a significant number of permanently affordable units throughout the City. Without CPA funds, many of our affordable housing projects would never have come to fruition.

2. Create Partnerships with the real estate community – to identify housing opportunities throughout the City and work with the Newton Housing Authority and non-profit developers to acquire these units and add them to our permanently affordable housing inventory.

3. Amend the Inclusionary Zoning Ordinance to require a proposed development to allocate 25% of its units towards affordable housing.

4. Create a municipal housing trust fund. Utilizing CPA funds and Inclusionary Zoning payments, a municipal housing trust fund can be created utilizing other funding sources as well including: negotiated developer fees, tax title sales, private donations, cell tower lease payments and the allocations from the general fund. A municipal housing trust can assist in the financing of affordable housing development, rehabilitate existing homes and convert them to affordable housing, increase affordability in new housing developments, preserve properties with expiring affordability restrictions, fund programs that assist low- and moderate- income homebuyers, develop more affordable housing initiatives.

5. Real Estate Excise tax – Consider a tax on real estate transfers to fund affordable housing. Lobby our State Representatives to allow for local option to impose a real estate transfer tax in order to fund a housing trust fund (see above) to create affordable housing opportunities.

6. Create a voluntary fund for City businesses – Model the City of Seattle’s plan to engage City business owners and non-profits to contribute to a voluntary fund to create affordable housing opportunities for their workers as well as others.

7. Protect displacement – As our City continues to evolve, gentrification and pressure on existing housing stock, can cause rent increases and displacement of low-income renters and homeowners. We need to develop policies and programs that assist existing homeowners and renters to stay in their homes and stay in our City. Newton currently has a Housing Rehabilitation Program which provides grants to qualifying homeowners to make repairs to their homes. This is a federally funded program which provides assistance (in the form of a zero interest loan due on the sale or transfer of the property or grant funding for hazard abatement or hoarding) to income-eligible homeowners, nonprofit affordable housing organizations and the Newton Housing Authority for single- and two-family homes and owner-occupied condo units or deed-restricted affordable units owned by a nonprofit or Newton Housing Authority. Increasing community outreach to make more aware of this program is definitely needed.

a. Reinstitute a Homebuyer Assistance Program: The City used to have a Homebuyer Assistance Program which provided downpayment assistance to low- and moderate – income households for purchasing a home in Newton in turn for restrictions to keep those homes affordable in perpetuity. Funded by the CPA, the program was put on hold in 2015 for restructuring but has not been reinstituted.
b. Create a Rental Assistance program that provides information on different programs that partner with financial institutions and other organizations to conduct outreach, provide counseling and assist in negotiating and restructuring loans where possible.

8. Commit to a 10-year plan that creates and preserves a certain number of affordable housing opportunities each year. Working with the community and City Planning staff, let’s work together to create a plan that will actually help Newton provide housing options for all. In 2014, I proposed the creation of a Housing Production Plan – which I believe this City should develop so that we can affirm our commitment to creating affordable housing opportunities throughout this City. I envision a plan that not only takes inventory of our existing housing supply, but also takes control of our development process, so that we as a community can determine where and how many units we should strive to create each and every year.

9. Demand more from developers. I advocated and obtained 6 additional affordable housing units in the Austin Street Project: I took a hard stance with the Austin Street Developer, my City Council colleagues and many housing advocates about the importance of making the project better than a Chapter 40B project – in terms of the number of affordable units offered as part of the development proposal. Because this was, and is, a public/private partnership, it is important to me that the City go above and beyond the number of affordable housing units than might normally be provided. I consistently pushed back and demanded that the project be better and asked for more affordable units – specifically 10. Although I did not get 10, I believed that the addition of 6 affordable units, was a clear improvement and voted to support the project. I didn’t have to. The Project had enough votes for successful passage before it came to me. It would have been easy for me to vote NO – given that my base of supporters was very much opposed to the project. But I voted YES because, for me, it was the right thing to do.

10. Preserve existing naturally affordable housing stock. In 2014, I proposed a temporary moratorium on tear-downs. I recognized then, and continue to recognize that we are fast losing any type of naturally affordable housing stock in this City. In the face of a lot of opposition from developers and homeowners – looking to cash out and make profits, I proposed the moratorium so the City could move forward quickly with Zoning Reform – which – 3 years later – continues on a very slow course. The problem is not simply the loss of these smaller sized homes – but is also what is allowed to be built in its place – which are not just a little more expensive – but a lot more expensive – making Newton less and less affordable.

I know, that together, we can create the kind of Newton we want and make Newton affordable for everyone.