Affordable Housing Acquisition, Creation, and Conversion Program - Jul 25th, 2024
This meeting was an informational presentation by the Department of Planning and Community Development (DPCD) and the Affordable Housing Trust Fund (AHTF).
(Karen Kelleher, AHTF Chair) Ms. Kelleher says the Affordable Housing Trust Fund was formed by Town Meeting in 2020 and adopted a five-year plan in 2022. The plan has three main elements: preservation of existing affordable housing, building new affordable housing, and building the financial strength of the trust.
The Acquisition, Creation, and Conversion (ACC) program is intended to subsidize affordable housing, using existing units. For example, a landlord who's willing to put a deed restriction on one of their units, in exchange for the subsidy. The program is open to any property owner in Arlington.
Ms. Kelleher says that units must be deed restricted as affordable for at least 20 years. The subsidy is up to $250k unit. The subsidy can apply to units up to 100% of the area median income (AMI), but they'd like to see 60% AMI to less. The AHTF doesn't want to displace any existing tenants.
Interested property owners will have to submit an application, the Trust Fund will make funding recommendations, and the town will provide funds. This is a new program, and we're trying to figure out how to make it work as well as possible. Ms. Kelleher notes that the funds are a subsidy, and not a loan that needs to be repaid.
(Sarah Suarez, Assistant Planning Director) Ms. Suarez says the funds are coming from ARPA money. $3M of the town's ARPA funding was designated for affordable housing; that money needs to be allocated by the end of the year and spent by the end of 2026. The twenty-year deed restriction is an ARPA requirement, and the program is open to owners, developers, and non-profits. She's open to creative ideas, like creating affordable ADUs, restricting one of the units in a two-family home, or deed restricting existing units.
(Laura Wiener, AHTF) Ms. Wiener says that the main effect of a deed restriction is to limit rent. With a 60% AMI restriction, rents would be capped at 30% of the 60% income level, minus utility costs. Rents would increase when the Department of Housing and Urban Development (HUD) recalculates the income limits. There's an RFP on the town's website, and interested applicants should submit a letter of intent to DPCD by September 30, 2024.
What are the benefits of affordable housing? It allows existing residents to stay in their homes and maintains stability. It also benefits people who work in town, but can't afford to live here.
Affordable units can be occupied by tenants that are income-eligible, and vacancies must be filled via a lottery. The lottery ensures that tenant selection is fair. You can't use the subsidy to, say, provide an income-restricted unit to a member of your family.
Once the deed restriction is signed and recorded, it can't be removed. The affordability requirement will stay with the property if it's sold. Ms. Wiener says it's advisable to have an attorney review the deed restriction, and to inform your mortgage lender.
Ms. Wiener says it will be okay to take tenants with housing choice vouchers.
Now, on to questions and answers.
(Steve McKenna) Mr. McKenna asks about the case where a developer wants to add more than the 15% of affordable units that our zoning bylaw requires. What would determine if they'd qualify?
(Karen Kelleher) Ms. Kelleher says the developer would need to show a proposal for the amount of funding needed.
(Steve McKenna) Mr. McKenna asks about someone who owns an apartment building with several one-bedroom units. Would the subsidy be per-unit, or per building?
(Karen Kelleher) Ms. Kelleher says that $250k is the maximum subsidy per unit. There isn't a requirement for the number of bedrooms, but the applicant would have to provide financials for their proposal.
(Steve McKenna) Mr. McKenna asks if there are any requirements on the age of the units.
(Sarah Suarez) Ms. Suarez says the property must meet HUD's housing quality standards. The property should be safe, with working appliances.
(Steve McKenna) Mr. McKenna asks who would inspect the units.
(Sarah Suarez) Ms. Suarez says that inspections would likely be done by someone from DPCD, the AHTF, or Inspectional Services. There's a checklist on the town website.
(Karen Kelleher) Ms. Kelleher says we might also work with someone from the Arlington Housing Authority, since they have to do the same inspections for housing choice vouchers.
(John Hindmarsh) Mr. Hindmarsh asks if the $250k is a gift to the landlord, in exchange for the deed restriction.
(Karen Kelleher) Ms. Kelleher says she wouldn't characterize it as a gift. The intent is to subsidize the loss of revenue that comes with an affordability restriction. The subsidy will replace operating revenue, but not equity.
(Steve McKenna) Mr. McKenna asks about someone who has one affordable two-bedroom apartment. Could they use the subsidy to convert that into two one-bedroom units?
(Sarah Suarez) Ms. Suarez believes they'd look favorably on that, if the new apartment was in addition to existing affordable housing requirements.
(Steve McKenna) Mr. McKenna notes that different families have different housing needs. Some may need several bedrooms, while others just need one.
(Karen Kelleher) Ms. Kelleher says she can't speak to any zoning implications.
(Sarah Suarez) Ms. Suarez says that our zoning bylaw has a requirement that affordable units be eligible for inclusion on the state's subsidized housing inventory. That isn't a requirement for this program.
(Adler Bernadin) Mr. Bernadin asks if someone can be awarded before looking for a property. Could this be used to subsidize a property purchase?
(Karen Kelleher) Ms. Kelleher thinks the applicant would need to have a specific property in mind.
(Neal Mongold) Mr. Mongold has a question about the timing of funds. Suppose someone wanted to use this money for pre-development and acquisition costs. Would the funds be available as seed money, or only available after occupancy.
(Sarah Suarez) Ms. Suarez believes the funds could be made available as needed. For example, at closing time for a new property acquisition. It must be likely to result in a new affordable housing unit.
(Neal Mongold) Mr. Mongold asks if the money could be used to rehabilitate an existing unit.
(Karen Kelleher) Ms. Kelleher says that's likely to be okay, but it would have to be negotiated as part of the funding agreement. An applicant would need to show control of the site to be renovated.
(Sarah Suarez) Ms. Suarez says the town has to return unused ARPA money by January 1, 2025. She thinks that timing might be a challenge if there's new construction involved.
(Neal Mongold) Mr. Mongold asks about someone who needs zoning relief to construct an affordable unit.
(Laura Wiener) Ms. Wiener believes there is a preference for proposals that don't require zoning relief, given the timelines involved.
(Steve Revilak) Mr. Revilak says that special permits and variances generally take at least two months; there are advertising requirements before a hearing opens, and an appeal period after it ends. He agrees that the timeline could make that challenging.
(Neal Mongold) Mr. Mongold asks about ADA accessibility requirements.
(Karen Kelleher) Ms. Kelleher says that accessible apartments would be a preference, but it's not a requirement.
(Laura Frost) Ms. Frost is the head of the tenants association at 840 Mass Ave. She appreciates the work that's gone into putting this program together. Rent costs can be stressful for tenants. She asks who will take care of maintenance, if the deed-restricted unit is in an existing building.
(Sarah Suarez) Ms. Suarez says the deed restriction doesn't change ownership, and the owner would still be responsible for maintenance.
Meeting adjourned.