Exploring an Affordable Housing Overlay - Nov 7th, 2024

Public forum held via remote participation. Materials were available from https://www.arlingtonma.gov/Home/Components/Calendar/Event/35170/. About 70 people attended.

(Sarah Suarez, Assistant Planning Director) Ms. Suarez says that tonight's presentation will come from a citizen group that's working on public engagement for an Affordable Housing Overlay proposal. She outlines the agenda, and says the event will be recorded and posted on the town website for later viewing.

Arlington currently gets affordable housing from a number of sources. The Arlington Housing Authority (AHA) provides the largest share with 713 units which were built between 1940 and 1983. They also administer housing choice (aka Section 8) vouchers. The Housing Corporation of Arlington (HCA) has 151 units in their portfolio, with 43 more to be constructed at 10 Sunnyside Ave. We have 292 additional affordable units from Arlington's inclusionary zoning and Chapter 40B. That totals just over 1200.

Ms. Suarez says the need for affordable housing is much greater, though. Arlington has over 5500 cost-burdened households, so we're only meeting about 20% of that need. Many of our residents struggle with housing costs and are at risk of displacement. One in three residents earns below 80% of the area median income (AMI). There are long waitlists for affordable housing where hundreds apply for a small number of units.

Arlington's goals for producing more affordable housing are not new, and the issue has been planned for. The 2015 Master Plan had a section on affordable housing, and we've routinely used Community Preservation Act (CPA) and Community Development Block Grant (CDBG) funds for the purpose. Arlington produced a Fair Housing Action Plan in 2021 to encourage more fair housing choices. We adopted a Housing Production Plan in 2022, which focused on building and preservation, and it suggested allowing affordable housing to be built in all neighborhoods. Arlington's Affordable Housing Trust Fund (AHTF) is getting on its feet. The trust adopted a five-year action plan after conducting a survey in 2022. Of the 800 survey respondents, 75.5% felt that Arlington did not have enough affordable housing, and policy changes were the most popular strategy for addressing this.

94% of town meeting voted in favor of establishing the AHTF and 79% supported a home rule petition to establish a real estate transfer fee. The AHTF's five-year plan includes an action item for adopting a more predictable permitting process. In 2023, 74% of town meeting voted in favor of a resolution supporting an affordable housing overlay (AHO). The Select Board unanimously supported this resolution, affirming their support for an AHO as a tool.

The Affordable Housing Trust Fund organized a developer roundtable where they asked "what would you need to build in Arlington?". The responses fell into four categories: sites, funding, permitting, and alignment with/support from the community.

Ms. Suarez says that affordable housing is expensive to build. It typically takes $400--500k of subsidy per unit. Arlington can't do that on it's own, so we need state and federal funding.

(Erica Schwarz, HCA Executive Director) Ms. Schwarz shows a slide with three of HCA's recent developments: Capitol Square, Broadway/Downing Square, and Sunnyside Ave. 10 Sunnyside Ave will have a total cost of $33.5M; it's expensive, and the town has been vital in providing funding from various sources. This is essential for HCA. All of HCA's projects significantly leveraged town dollars for state and federal subsidies. Getting these subsidies is very competitive.

On average, Arlington has given $28k/unit of subsidy to HCA, which allowed them to leverage $428k/unit in other funding. Ms. Schwarz says that most affordable housing is subsidized through Low Income Housing Tax Credits (LIHTC), and HCA applies by going through the office of Housing and Liveable Communities. There are 1--2 rounds of funding each year, but the state has to prioritize because there's not enough money to go around. Each year, the state publishes a document called the Qualified Allocation Plan (QAP) which outlines their goals.

LIHTC funding always goes to projects that target the 60% AMI level or below. 13% of units have to be reserved for households at the 30% AMI level, and those are hard to finance. Another of the state's priorities is targeting the greatest need. That means funding projects that have more extremely low income (30% AMI) units, provide family housing in high-income areas, and projects that are in communities with less than 12% affordable housing. Arlington is a high-opportunity area, and we only have 6% affordable units.

The state wants to see local support and local funding before giving LIHTC awards. They also have high standards for quality and sustainability. Projects need to have at least 30--40 units, but 75 is a more typical size. The state looks at the financial strength of the development organization, whether the project has a reasonable cost, and whether the developer is a women- or minority-owned business. The state also limits the amount of fees developers can charge for doing a project.

Would a more streamlined permitting process help affordable housing developers? Yes -- speed, cost savings, and certainty are big benefits. Real estate development is hard, and affordable housing development is significantly harder. Being permitted is a pre-requisite to getting funded, and a faster process can prevent a builder from missing the annual funding cycle and having to wait another year.

Ms. Schwarz says that HCA will continue to develop in Arlington, but more certainty would be a game changer for other developers.

(Sanjay Newton, AHO Proponent) Mr. Newton is part of the citizen group that's been working on the affordable housing overlay proposal. He asks "What would an AHO do?". It would reduce costs, speed the permitting process, and provide a greater degree of certainty. The group followed several principals when putting the proposal together:

• There should be a high rate of affordability
• The income level should be as low as it's feasible to do
• The AHO should allow extra height and dimensional flexibility, to make it easier for projects to pencil out.
• There should be a by-right process with meaningful public review.

How much affordable housing could Arlington expect to see with an AHO? HCA currently does one project roughly every five years. Based on past LIHTC awards, we might do one every 2--3 years, which is roughly double the rate.

We proposing that 70% of units be affordable to households making 60% AMI (for rentals) or 70% for owner-occupied. Mr. Newton says these income limits align with LIHTC's requirements. LIHTC also requires at least 13% of units be set aside for households making 30% AMI.

Why require that 70% of the units be affordable, rather than 100%? One of the goals is to leave room for income mixing, and missing-middle or workforce housing. Income from the market rate units can help cross-subsidize the income-restricted ones. Allowing some market rate units can help prevent displacement. For example, it could help a non-profit convert an existing apartment building to affordable units without displacing over-income residents.

Mr. Newton says the AHO would apply to all business, residential, and industrial districts, but not the open space district. The height limits would be two stories higher than the underlying base zoning allows. To provide flexibility, the AHO would not impose limits on the number of dwellings per lot, floor area ratio, lot area per dwelling unit, and open space. The AHO would keep the requirements for setbacks, facades, environment regulations, stormwater management, accessibility, street trees, and the building code.

Ground floor commercial use would be required in the B3 and B5 districts. It would be allowed, but not required, in the other B or I districts.

Each project in the AHO would be required to provide 0.5 off-street parking spaces per unit. Aside from the environmental toll that parking takes, it's also cost burden to affordable housing developers. Mr. Newton says that 0.5 spaces is in line with HCA's parking utilization.

All AHO projects would be reviewed by the ARB, using site plan review for community input.

Mr. Newton closes with a summary of the AHO proposal:

• 70% of units income-restricted
• Affordable to 60% AMI for rentals and 70% for owner-occupied
• Mixed-use AHO projects are allowed in the B and I districts, but required in B3 and B5.
• +2 stories allowed over the base zoning
• Same setback and stepback requirements

(Sarah Suarez) Ms. Suarez says that we'll move into the question, answer, and comment section of the forum.

(Wynelle Evans, Orchard Place) Ms. Evans notes that the AHO would allow 4.5 stories in residential districts. She has a hard time imagining four stories on non-conforming lots. She asks how we're imagining four stories there.

(Sanjay Newton) Mr. Newton says that we need the ability to build larger buildings in order to get more affordable housing. Today, residential lots are redeveloped with single-family McMansions. He hopes those large buildings can contain more smaller units.

Mr. Newton takes a question from the chat, about the relationship between MBTA Communities and the AHO. He says that Arlington's MBTA Communities zoning only applies to a small number of residential parcels, and the AHO requires a much higher rate of affordable units.

(Chuck Carney, Kimball Rd) Mr. Carney thinks that the MBTA Communities act is also a tool for creating more affordable housing.

(Mr. Nathan) Mr. Nathan thinks we could meet both needs by looking at both overlays. He says the zoning has to change.

(Carl Wagner, Edgehill Rd) Mr. Wagner says he's concerned about the town making changes that people don't know about. He says that a private group has been working on this overlay and it will be the largest change that Arlington has ever seen, and it will allow 60' buildings in the residential districts. Mr. Wagner says the Redevelopment Board withdrew a set of zoning changes in 2019 because they felt more outreach was necessary. He say the proposal was developed by a private group. He thinks that's illegal, but acknowledges that Town Counsel says otherwise. Mr. Wagner says we want affordability but not 60' buildings. He doesn't want to give gifts to developers. He thinks this is wrong and immoral.

(Sanjay Newton) Mr. Newton agrees that the proposal was developed by a group of residents. The Planning Department sponsored this forum so people could come and have this conversation. A group of residents can make a proposal, but they can't make the decision by themselves. Any zoning change has to go to the Redevelopment Board for a hearing, and will be voted on by Town Meeting.

(? attending by phone) The caller says she's attending by phone and is frustrated that she can't see the presentation slides. She does lots of zoom calls, but couldn't get zoom to work for this meeting. She asks why this is a secret plan drawn up by a secret group. She says it will impact everyone and that Arlington has a small commercial tax base.

(Annie LaCourt, Chatham St) Ms. LaCourt has some questions about financing. She'd like to start by talking about what the phrase "pencil out" means. She asks if the question is "will rents cover costs?".

(Sanjay Newton) Mr. Newton answers in the affirmative.

(Annie LaCourt) Ms. LaCourt asks if a project like 10 Sunnyside Ave has to have positive cash flow on its own.

(Erica Schwarz) Ms. Schwarz answers in the affirmative. Each of HCA's properties has to generate a positive cash flow.

(Rebecca Gruber, Pleasant St) Ms. Gruber is struck by the sizes needed for these projects to pencil out -- 30--40 units. She's lived in Arlington for over 30 years and only knows of a small number of locations where that could happen. If sites turn over and we don't have an affordable housing overlay, then we're going to get expensive luxury units. Ms. Gruber doesn't think that will bring the kind of diversity that people in town say they want. She asks where these projects might be built.

(Sanjay Newton) Mr. Newton says there are different parts of town where this could work. Most of the R1--R3 districts don't have parcels that are large enough. He says the goal is to go from one affordable housing project every five years to one ever two or three. He also hopes an AHO can encourage some of the small-scale innovative development that HCA has done, like their Dorothy Rd ADU.

(Kristin Anderson, Upland Road West) Ms. Anderson says that our housing situation is ridiculous. She runs a business in Arlington heights, which means she lives and works in the same town. Ms. Anderson says that's unusual. She says there's only a small amount of space available for businesses, and that Arlington has been discouraging businesses for the last 50 years. She has two questions. First, how many square feet of business space are there in the B districts. Second, how many square feet of business space will the AHO protect. She's concerned about losing businesses and thinks protections for businesses are needed.

(Steve Revilak, Sunnyside Ave) Mr. Revilak would like to answer the earlier question about MBTA Communities zoning. He says that we expected the multifamily district to produce between 50 and 200 homes over the next ten years. That housing would be subject to our 15% affordability requirements and 15% of 200 is 30 units. However, the affordability requirements only apply to projects of six units or more.

To date, there has only been one multi-family project permitted through the MBTA Communities zoning. It had four units.

(JP Lewicke, Bay State Rd) Mr. Lewicke asks how many developers do this kind of work.

(Sanjay Newton) Mr. Newton says the HCA is the only one that's doing it in Arlington. He hopes we can attract others.

(Erica Schwarz) Ms. Schwarz says there are several non-profit affordable housing developers that work in the Boston area. Examples are POAH, 2Life Communities, and Community Builders. There are also for-profit companies that do some affordable housing development, like Boston Properties and Trinity Financial. She says they do a lot of work throughout the area.

(JP Lewicke) Mr. Lewicke says it's reassuring that there will be a gradual pace of change.

(Anton Rapetov, Mass Ave) Mr. Rapetov is happy people are doing this work, which he thinks is an improvement over the current status. He has a question about numbers. Earlier, he heard that 10 Sunnyside Ave would cost $33M for 47 units. He asks if that's the whole cost.

(Erica Schwarz) Ms. Schwarz says that's the total cost for the entire project. $33M for 47 units, all of which are affordable.

(John Hickman, Dothan St) Mr. Hickman has a comment about owner-occupied vs rental units. He thinks that ownership units are less targeted. He thinks we should be targeting rental units because they always have an income restriction, whereas owner-occupied units only have an income restriction at the time of sale.

(Sanjay Newton) Mr. Newton says the AMI percentage for owner-occupied units is higher because programs have found that the higher AMI is necessary for success.

(Rebecca Peterson, Florence Ave) Ms. Peterson thinks the height limit is too much for residential districts. She says it will block sun and prevent the enjoyment of property. She thinks that a parking requirement of 0.5 spaces/unit is a fantasy, and she didn't move to Arlington to live in a place like Davis Square.

(Grant Cook, Wollaston Ave) Mr. Cook asks if these projects require large lots, like thirty or forty thousand square feet.

(Sanjay Newton) Mr. Newton answers in the affirmative.

(Grant Cook) Mr. Cook says the Germaine-Lawrence campus is zoned R1, and if they left the property would become single-family homes. He says there are already tall buildings there. Mr. Cook asks if HCA could access that parcel if it were up for sale.

(Sanjay Newton) Mr. Newton says he doesn't know the specifics of that parcel. HCA has developed with 40B; the AHO would be a different process with more certainty.

(Grant Cook) Mr. Cook thinks that if we only want affordable housing that looks like single-family homes, then maybe we really don't want affordable housing after all.

(Marina Popova, Ridge St) Ms. Popova says she's unclear about what's happening with setbacks.

(Sanjay Newton) Mr. Newton says that setbacks and stepbacks aren't changing. But things like usable open space, FAR, and lot area per dwelling unit will not.

(Marina Popova) Ms. Popova asks if someone could combine lots to build an apartment building.

(Sanjay Newton) Mr. Newton says yes, lots can be combined. However, it might take more than two single-family lots to provide enough space for a 30--40 unit apartment.

(Marina Popova) Ms. Popova thinks that parking requirement of 0.5 spaces/dwelling is too little. She says that people will need cars, and asks why a half-space parking minimum was considered.

(Sanjay Newton) Mr. Newton says that when we require parking, an organization has no choice but to build it, even if that parking never gets used. It increases costs, reduces the amount of housing that can be built, and leads to projects that don't happen. Mr. Newton says the group worked with Erica Schwarz on the parking number, and that not every tenant has a car.

(Michele Nathan, Robin Hood Rd) Ms. Nathan says she's been in Arlington for five years, and she always feels like she's trying to play catch-up, which is very frustrating. She says there were a lot of details and concepts in the presentation and she wishes there were more time for questions. She says that in Winchester there are more working groups, it's more inclusive, and there are big meetings. In Arlington, it seems like you have to have been born here to understand what's going on. Ms. Nathan says she only lasted one year as a town meeting member due to the same frustration. She'd like to be involved but that always feels frustrating. She asks why it's so hard to jump in at the last minute, and if the town can be more inclusive.

(Sanjay Newton) Mr. Newton says that information about this meeting has been posted on the town website for several weeks.

(Michele Nathan) Ms. Nathan asks if the town could send emails to everyone.

(Sanjay Newton) Mr. Newton says he's not a town employee, so he can't send emails on behalf of the town.

(David Brecht, Norfolk Rd) Mr. Brecht has a question about what a five-story building would look like in Arlington heights. He lives on a hill, and says that a five-story building next to him would look like six stories. He thinks buildings that large need bigger lots, and that people don't want experiments being done on their neighborhoods.

(Susan Stamps, Grafton St) Ms. Stamps feels like she's educated about 40B and MBTA Communities. She asks how this is different. She understands that 40B can override local laws and asks if the overlay would be like that.

(Sanjay Newton) Mr. Newton says the main difference is the high level of affordability that 40B would require. MBTA Communities zoning only affected a small number of lots. That law was about housing in general, whereas the AHO is about affordable housing in particular. He says that affordable housing developers need sites, financing, and certainty in the permitting process. Zoning small pockets for affordable housing development will reduce the opportunity for sites to become available.

(Susan Stamps) Ms. Stamps is concerned that our commercial zones could be gobbled up by affordable housing development. She says that everyone is supportive of affordable housing. She thinks the concern is that people don't want big buildings in neighborhoods. She asks if someone would be able to, say, build a 15-story building on Beverly Rd.

(Sanjay Newton) Mr. Newton says no. The proposal is to allow two stories above the base zoning, so there's no place in town that would allow 15 stories.

(Susan Stamps) Ms. Stamps says it would be nice to open up the working group meetings.

(Andy Greenspon, Palmer St) Mr. Greenspon thanks Mr. Newton for a thorough presentation. Putting proposals like this together isn't an easy thing; they take lots of time and energy. He encourages people to provide feedback when this goes before the ARB, so we can turn it into a better proposal.

(Sanjay Newton) Mr. Newton says he looks forward to continuing the conversation as the process moves forward.

Meeting adjourned.