Diversity Task Group - Jan 13th, 2022

Meeting held via remote participation. Materials were available from https://www.arlingtonma.gov/Home/Components/Calendar/Event/27718/18.

These notes cover a subset of agenda items. I was mainly interested in the presentation on affordable housing.

Presentation and Discussion with Housing Plan Implementation Committee member and Arlington Housing Trust Fund Chair, Karen Kelleher

(Chair) DTG's chair prefaces this portion of the meeting by saying the affordable housing presentation is intended to be about learning, and answering questions. They indicate that it's not an opportunity for attendees to soapbox.

(Karen Kelleher) Ms. Kelleher says that affordable housing has a lot of complexity, and a lot to think about. There are a lot of details that one could easily get lost in. She considers herself an engaged citizen, but she's also a housing professional. Ms. Kelleher did a lot of work in Boston and wanted to understand this disparities and inequities that she saw. She worked for a law firm and then a non-profit called Community Builders. Ms. Kelleher went on to work for MassHousing, mostly on affordable housing preservation. She joined LISC three years ago, which is a local initiative support organization that's focused on low-income communities.

Ms. Kelleher would like to start by looking at some of the tools available, and at Arlington's current affordable housing inventory. First, there's the Arlington Housing Authority which has a significant inventory of low income housing, and also administers the Section 8 voucher program.

Arlington has an inclusionary zoning bylaw. Buildings with six dwellings or more must make 15% of them affordable.

Arlington adopted the Community Preservation Act (CPA). That means some of our taxes are dedicated to affordable housing, open space, and historic preservation.

Community development block grant (CDBG) funds are often used for affordable housing.

Arlington has an active community development corporation (CDC), the Housing Corporation of Arlington. They're a great asset to the town, although their capacity is limited.

Arlington has an affordable housing trust fund (AHTF). Ms. Kelleher is the chair of the trust fund's advisory board.

Town meeting passed a home rule petition to create a real estate transfer fee, which could potentially be a sustainable funding source for the AHTF. Since it's a home rule petition, the state legislature has to adopt it, and they haven't done this yet.

The last town meeting voted to allow accessory dwelling units (ADUs). ADUs aren't affordable housing per-say. They're smaller dwellings which tend to be less expensive as a result.

Arlington recently issued a fair housing active plan. The plan has a wealth of factual information, along with strategies to promote fair housing.

We're in the process of updating the town's Housing Production Plan. The Redevelopment Board discussed a draft of the new housing production plan a few weeks ago, and provided feedback. The consultant is reviewing their comments and will prevent revisions back to the board.

Finally, Arlington will receive a significant amount of ARPA funding, and some of that can be used for housing affordability.

(Attendee) An attendee asks about the percentage of the real estate transfer fee that was adopted by town meeting.

(Karen Kelleher) Ms. Kelleher explains that the home rule petition allowed for a range, which could go as high as 2% of the sale price, but would mostly likely be lower. If the state legislature adopts it, the transfer fee will be put on the ballot, and voters will have to adopt it. Less expensive sales would be excluded. Ms. Kelleher doesn't recall the specific exclusion amount, but believes it would be at least as high as the state median sale price. She notes that the real estate transfer fee is not popular with real estate professionals.

Ms. Kelleher goes on to provide an overview of Arlington's affordable housing inventory. We have around 1100 units of affordable housing, and most of this is owned by the Housing Authority. There is a property on Mill Street, which was constructed in 1982 under a Section 8-based contract. Both of these are heavily subsidized and serve low-income residents.

The Housing Corporation of Arlington has around 150 units, including 48 that were recently built at Downing Square and on Broadway. All of these are affordable. Sixteen of the 48 are reserved for extremely low income households and five are reserved for the formerly homeless.

40B and inclusionary zoning incentivize market rate developers to create affordable housing by offering permitting relief.

Public housing (owned by the Arlington Housing Authority) includes Winslow Towers, Chestnut Manor, Drake Village, Cusak Terrace, Menotomy Manor, and Drake Village.

(Attendee) An attendee asks what low income and extremely low income mean.

(Karen Kelleher) Ms. Kelleher says these terms have specific meanings, according to HUD programs that use them. They're based on a percentage of the area median income (AMI). Extremely low income is 30% of the area median income or lower. Very low income is 31--50% of the AMI. Low income is 51--80% of the AMI. 40B focuses on housing at the 80% AMI level. Other programs, like the low income housing tax credit focus on 60% AMI.

(Attendee) An attendee says that housing authority residents have much lower incomes than that. Last year, the average rent for a housing authority tenant was $485/month, which is based on 30% of their income. They say there's a difference between public housing, low income housing, and affordable housing. The Arlington Housing Authority administers Section 8 vouchers, and people who have these vouchers can use them anywhere.

(Karen Kelleher) Ms. Kelleher says there are also project-based Section 8 funds, where the federal government provides funds for constructing and operating housing.

Ms. Kelleher says that affordable housing is largely a math problem that doesn't work. The people who live in these buildings don't make enough money to pay for the building and operating costs. The apartments on Mill Street were built in 1982, but the HUD program that funded them has since ended.

The Housing Corporation of Arlington needed operating subsidies in order to provide extremely low income units in their Downing Square apartments. They received a grant from the Somerville Homeless Coalition (?) to do this.

Most housing authorities can't allocate more than 20% project-based Section 8 vouchers.

(Attendee) An attendee thinks that Section 8 vouchers are more valuable to a community than project-based ones. They say Arlington has had to negotiate with the owners of the Mill Street apartments every few years, to prevent the apartments from becoming market-rate. The attendee says that years ago, town meeting passed a resolution saying "no 40Bs", and asks if Ms. Kelleher was aware of that.

(Karen Kelleher) Ms. Kelleher says that two 40B projects have been built in town, and one of these was done by the Housing Corporation of Arlington. 40B uses a simplified permitting process. The state legislature passed the law in the late 1960's, and it's created over 60,000 housing units across the Commonwealth. About half of these are affordable. Ms. Kelleher says that 40B is controversial because communities that haven't met the thresholds in the law can lose some local control. She points out that there was a ballot referendum to repeal 40B in 2010, and nearly 2/3's of Arlington voters voted to keep the law.

The ZBA permitted two 40B projects this year: 1165R Mass Ave (which is behind the Mirak Hyundai dealership), and Thorndike Place (which is currently under appeal).

Arlington adopted inclusionary zoning in 2002 or so. It's been applied to six projects in total, and created around 58 affordable units. This was done without any subsidies from the town. Last year, there was a warrant article that proposed increasing the percentage of affordable units from 15% to 25%. But the real question is 25% of what. There are very few projects in town with more than six units.

The trustees for the affordable housing trust fund were appointed in September. They've produced a declaration of trust and are currently working on an action plan, which will be developed through a public engagement process.

Ms. Kelleher suggests looking at The Color of Law (book) and Segregated by Design (short documentary).

(Attendee) An attendee says they've read The Color of Law, and found it very informative. Especially the history of federal housing policy and the way we created segregated housing.

(Attendee) An attendee has a question about 40B and inclusionary zoning. They understand that 40B requires 25% of units to be affordable, and our inclusionary zoning only requires 15%. They ask why a developer would use 40B rather than our inclusionary zoning.

(Karen Kelleher) Ms. Kelleher says that inclusionary zoning is an imposition within the zoning code. 40B allows one to go outside what zoning normally allows. 40B also provides developers with a favorable avenue of appeal, via the state housing appeals committee.

(Attendee) An attendee has a comment about area median incomes. It's calculated based on family size. Our area median income is about $120k/year. 80% AMI is $66k/year for a family of one, and $95k/year for a family of four.

(Attendee) An attendee asks "Does Karen realize that ADUs aren't required to be affordable?" and "Does she think the name `Housing Trust Fund' would be more appropriate than `Affordable Housing Trust Fund', because the fund can be used for housing up to 100% of the area median income?"

(Karen Kelleher) Ms. Kelleher says there are no income restrictions on accessory dwelling units. They're mainly a way to create a different form of housing. She doesn't want to change the name of the affordable housing trust fund. Rather than worrying about the amount of flexibility the fund has, she'd rather focus on rolling up our sleeves and getting to work.

(Attendee) Attendee says that Cambridge recently permitted a project through their Affordable Housing Overlay ordinance, on 52 New Street. Most of the money for this project came from low income housing tax credits. They ask if Ms. Kelleher can explain what these are.

(Karen Kelleher) Ms. Kelleher says that low-income housing tax credits are a federal tool. These credits are given to states, and there are state agencies that allocate the money to build affordable housing. It's a critical source of funding. The credits go to private investors, and the housing is usually limited to 60% AMI, but the money can be used to help fund mixed-income development up to 100% AMI. The Housing Corporation of Arlington's Downing Square Project needed $24M for construction, and 40--50% of that came from low-income housing tax credits. Ms. Kelleher thinks that Arlington needs to go out and get more state and federal funds.

(Attendee) An attendee has a question about affordable housing ownership, and whether it can be used to build equity.

(Karen Kelleher) Ms. Kelleher says it's difficult to create ownership units, because there are so few subsidies available for that. It's the same math problem that doesn't work. She says that Minuteman Village has four affordable ownership units. When one of these ownership units is sold, it has to be sold with the same AMI restrictions. So, the owner doesn't necessarily build a lot of equity.

Ms. Kelleher says there's a new state program to increase affordable home ownership, but it's targeted towards lower income communities. It probably wouldn't be usable in Arlington, unless we have a census tract or two that qualifies.

(Attendee) An attendee says this has been a great housing summary. The Jim and Marjorie show on WGBH recently did a feature about a couple who are building 14 small apartments on a lot that previously contained a triple-decker. They'd be interested in extending this conversation to diversity and the mismatch between our housing and who lives here. On Broadway, there are a number of people who live alone in two-bedroom apartments. They hope we can find ways to allow more smaller, one-bedroom units.

(Attendee) An attendee says (via zoom chat) that Ms. Kelleher didn't talk about co-operative housing.

(Karen Kelleher) Ms. Kelleher acknowledges this. She didn't discuss co-operative housing because there's very little of it in Arlington.

(Attendee) An attendee says that a lot of the housing conversation focuses too much on developers. They ask how we can center low-income workers in this conversation.

(Karen Kelleher) Ms. Kelleher hopes we can do that.

(Attendee) An attendee recently met someone and talked with her about affordable housing. This person said the most important thing is simplifying the process for building affordable housing. They ask Ms. Kelleher for her thoughts, and whether Arlington can do better.

(Karen Kelleher) Ms. Kelleher agrees. Developers need a path to obtaining their permits, and the project has to be large enough to be feasible. Usually that means at least 30--40 units to make it work. We can use 40B in that way, but it would require multiple bodies in town to be on board. She thinks that developer will come if there's land, subsidies, and a path to permitting.

(Attendee) An attendee wants to know if Ms. Kelleher thinks that 40B -- which increases density -- is something that residents should be subject to.

(Karen Kelleher) Ms. Kelleher says 40B is a tool we can use.

(We're past time, so that's the end of the discussion.)