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Thread: Percentage of multi-family units reserved for low/mod income?

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    Cyburbian SlaveToTheGrind's avatar
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    Percentage of multi-family units reserved for low/mod income?

    This time of year when it slows down a bit I look as the code and plan goals/projects for the coming year. With 1200 multi-family units approved in the last year, I know most of those if not all are beyond the reach of low/mod incomes. I'd like to see a change to our code which requires a certain percentage of high density units to be reserved for low/mod income residents. The owner can then work with the local housing authority to place residents from their two year waiting list into those units. Do you have a code which does what I am asking?

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    Cyburbian dvdneal's avatar
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    I've seen incentive programs that do this, but I'm not sure you could make a straight code to do it. Sounds to close to a taking to me.
    I don't pretend to understand Brannigan's Law. I merely enforce it.

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    Cyburbian
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    Quote Originally posted by dvdneal View post
    I've seen incentive programs that do this, but I'm not sure you could make a straight code to do it. Sounds to close to a taking to me.
    It's a taking if not carefully implemented.

    There's a little bit of popular confusion about what "mandatory" affordable housing means. Typically, affordable housing not built directly by the city as part of its housing authority is supplied by the market in exchange for specific incentives (tax credits, FAR bonuses, etc) tied to the amount of housing voluntarily provided and under specific housing programs, often subsidized or compensated by Federal or state agencies. This is what is usually meant by "voluntary" affordable housing.

    "Mandatory affordable housing".. sometimes called "Mandatory inclusionary housing" usually means that developers who seek variances or text changes in zoning must provide a minimum threshhold of affordable housing (say 20%), generally without incentive bonuses. If they want something from you (such as a text change or variance),you may be able to ask them to pay you for it, and that payment might be extracted through a mandatory inclusionary housing pledge from the beneficiary of the regulatory action, assuming you codified the "mandatory inclusionary" requirement. The term "mandatory" just means that they don't get a specific bonus or incentive associated with the amount of housing they provide, but merely that any amount of regulatory forbearance on the part of the city leads to the trigger of the mandatory requirement. This is generally not interpreted as a taking, because they are seeking to exceed or vary from their as-of-right rights on the lands in question. Once the affordable housing is built, I think there can be requirements that it becomes part of the base zoning of the site, so a subsequent owner of the site would not be able to dispense with the affordable housing already there.

    "Mandatory affordable housing" generally doesn't mean that developers who want to build something as-of-right (within their entitled rights under existing zoning on privately owned land) can somehow be required through a rezoning to provide affordable housing. If you rezone privately owned land to require them to provide affordable housing on it, then they may be able to argue that your mandate is a regulatory taking and, assuming the taking is legal at all, that they are entitled to compensation since the value of their land might be reduced, due to the cost on them of having to build the affordable housing. They could take you to court for an inverse condemnation, or just take you to court to block the proposed mandate on the grounds that it will, if it goes through, reduce the value of their property, all provided that you haven't negotiated suitable compensation already.

    There's another possibility.. which is to create a new zone that requires affordable housing, but apply that new zone only to land owned by the city or other government and which may be sold for private development in the future, or apply it only to lands owned by willing accomplices.. like community development corporations, housing not-for-profits or churches. They may be willing to accept your proposal if they get something in return.. such as expedited permitting, parking ratio reductions, etc. The cost they extract may be relatively low since they would've planned to provide affordable housing anyway, and your negotiations may be to increase the percentage they would otherwise have agreed to do or over adjustments to the distribution, size, design or quality of units and amenities. Such a rezoning would differ from a "voluntary" affordable housing program in that the mandate would apply to any subsequent owner of the land. Any subsequent private owner would already be aware of the requirement to provide affordable housing attached to them when acquiring the land, and the value of the land would already reflect that requirement. That may work, although I've only seen this done for BRAC sites, so there may be other issues when it's done outside of outright privatizations that I'm not aware of.
    Last edited by Cismontane; 24 Dec 2014 at 12:47 PM.

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    Cyburbian SlaveToTheGrind's avatar
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    My code only allows high density through a rezone to a planned development zone. Each PD is unique and no two are the same. There is no zone in place which allows high density residential outright. The purpose of the PD zone is to go from 4 units per acre single-family (most widely used single family zone) to generally 16+ units an acre. I would think legally, the council can require as part of the rezone and the PD regulations, to require a certain number of affordable units. After all, the rezone is giving them a density bonus above the current zone and the council does not have to grant a rezone request. The PD zone does not dictate a min/max density.

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    Cyburbian Masswich's avatar
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    This is a very common approach in New England. Most of the cities in the Boston area have an inclusionary housing requirement that kicks in once a project is over a certain size. Usually the way it works is that any use over a certain size is a conditional use (or by special permit) with the requirement that developing over that threshold require some affordable units.

    In these cases, the units are either managed by the owner of the building (in the case of rentals) or sold subject to deed restrictions The units are made available by lottery to those who can document their incomes as below the required levels. For rentals, the rent is 30% of that income level, and for condos, the sale price is based on what a mortgage at 30% of that income level can pay for, Upon vacancy or resale, the same process is done again. In the case of condos, the resale price is set based on what is affordable at that time, and the seller gets to keep any profit, which is usually limited since the income levels control the resale prices.

    It used to be that these requirements kicked in at 10 units, with 10% of the units having to be affordable. Usually there is a cashout provision that allows a developer to pay into a housing trust if the development is under a certain size (say 20 units)- and above that they just have to provide the units.

    More recently, with the housing market booming in Boston again, these requirements have become stronger. They kick in at 6-8 units in many cases now, and require 15-20% of units be affordable.

    If you want to see good "model" language - from which you can plug in your own numbers - look at Cambridge, Somerville, or Brookline.

    As for the issue of it being a regulatory taking, there are two responses. One is that you can always build fewer units by right, so it's a form of density bonus. The other is that smart cities conduct a housing study to document that producing market housing results in a need for more affordable housing, and that it is a form of mitigation.

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    Cyburbian Doberman's avatar
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    Not to jack this thread, but what are the criteria for meeting affordable housing?

    We have had some of the cities we serve that have talked about eliminating mobile homes at one point. If multifamily counts toward affordable here then that it's a misnomer because we have apartments renting for 1200s. Do unzoned areas count?

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    Super Moderator kjel's avatar
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    Quote Originally posted by Masswich View post
    This is a very common approach in New England. Most of the cities in the Boston area have an inclusionary housing requirement that kicks in once a project is over a certain size. Usually the way it works is that any use over a certain size is a conditional use (or by special permit) with the requirement that developing over that threshold require some affordable units.

    In these cases, the units are either managed by the owner of the building (in the case of rentals) or sold subject to deed restrictions The units are made available by lottery to those who can document their incomes as below the required levels. For rentals, the rent is 30% of that income level, and for condos, the sale price is based on what a mortgage at 30% of that income level can pay for, Upon vacancy or resale, the same process is done again. In the case of condos, the resale price is set based on what is affordable at that time, and the seller gets to keep any profit, which is usually limited since the income levels control the resale prices.

    It used to be that these requirements kicked in at 10 units, with 10% of the units having to be affordable. Usually there is a cashout provision that allows a developer to pay into a housing trust if the development is under a certain size (say 20 units)- and above that they just have to provide the units.

    More recently, with the housing market booming in Boston again, these requirements have become stronger. They kick in at 6-8 units in many cases now, and require 15-20% of units be affordable.

    If you want to see good "model" language - from which you can plug in your own numbers - look at Cambridge, Somerville, or Brookline.

    As for the issue of it being a regulatory taking, there are two responses. One is that you can always build fewer units by right, so it's a form of density bonus. The other is that smart cities conduct a housing study to document that producing market housing results in a need for more affordable housing, and that it is a form of mitigation.
    I was going to suggest looking at the Boston metro area because they do a pretty decent job with this. I am in NJ and the affordability levels, deed restrictions, and rent determinations for affordable units that are for rent/sale work pretty much in the same way.
    "He defended the cause of the poor and needy, and so all went well. Is that not what it means to know me?" Jeremiah 22:16

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    Cyburbian
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    Quote Originally posted by kjel View post
    I was going to suggest looking at the Boston metro area because they do a pretty decent job with this. I am in NJ and the affordability levels, deed restrictions, and rent determinations for affordable units that are for rent/sale work pretty much in the same way.
    In NY, the requirement only kicks in if you want an incentive bonus or, under mandatory inclusionary concepts now being concerned, if you do anything not As of Right. There are some special zoning districts that may have other rules, but there is no # of units trigger outside of these special cases I'm aware of. The city is looking to expand mandatory inclusionary, though, so this may change in the future. The main thing is to develop the programs in such as way so as not to trigger a taking.

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    Super Moderator kjel's avatar
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    Quote Originally posted by Cismontane View post
    In NY, the requirement only kicks in if you want an incentive bonus or, under mandatory inclusionary concepts now being concerned, if you do anything not As of Right. There are some special zoning districts that may have other rules, but there is no # of units trigger outside of these special cases I'm aware of. The city is looking to expand mandatory inclusionary, though, so this may change in the future. The main thing is to develop the programs in such as way so as not to trigger a taking.
    We have a complicated system named COAH. Since the current governor took office in 2009, he's done everything possible to dismantle it so not a whole lot has been happening these past 5 years. Before that the simplified regulations generally had 9 units triggering the need for an affordable unit but there were a multitude of ways to get around it through regional contribution agreements buying down the project's requirement by up to half with the funds going to a receiving municipality. The state supreme court recently ruled against the governor's efforts and declared that COAH had to be reconstituted, so we're in a holding pattern.
    "He defended the cause of the poor and needy, and so all went well. Is that not what it means to know me?" Jeremiah 22:16

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