Mayor Warren’s Planning Department floated some ideas last month designed to create more affordable housing in Newton through changes to the city’s inclusionary zoning policies. I’m hardly an expert on zoning but will try to explain it as best I can. I hope others who know more about this will jump in, correct me and expand on this.
Under Newton’s current inclusionary zoning rules, when a developer builds a housing project of more than two units that requires a special permit, 15 percent of that project has to be “affordable.” (Or the developer has to pay into an affordable housing fund.)
Since 1970, this requirement, (which was raised from 10 to 15 percent in 2003) has resulted in the creation of 147 affordable units.
This new proposal suggests changing the rules from “more than two units” to “one or more units” and suggests raising the affordable component on a sliding scale to as much as 25 percent (depending on the number of units) even if a special permit is not required.
In other words, even someone who is building a new single-family or two-family market-rate home would be required to contribute to creating new affordable housing units in Newton.
As the memo points out, Newton is not alone in considering an adjustment to its current inclusionary zoning. Boston (2015), Cambridge (2017), and Somerville (2017) have all amended their inclusionary housing provisions.
The Planning Department memo makes other recommendations as well and ends with this:
“….we are still at the beginning stages of exploring these proposed changes with city leadership, staff, committees, boards, and the community at large. We look forward to vetting these ideas and soliciting feedback from multiple stakeholders over the next few months as we work to create an ordinance that more effectively balances our City’s growing need for affordable housing units for populations at all income levels.”
How would this proposal affect new construction in the city? And what specific changes did Boston, Somerville, and Cambridge make? What has resulted from their changes?
I would think such a proposal would dramatically reduce tear-downs, and drive up the cost of any that are built. I believe this would substantially reduce the buyer pool for some older homes, and thus rob aging homeowners of the equity they’ve built over decades. I want more affordable housing in Newton. But I don’t want to create affordable housing at the expense of our older homeowners.
On the flip side of the coin, the Planning Department is on the right track with a sliding scale of “affordable” units in multi-unit developments. But they are simply aiming too low by capping the number of affordables at 25% of available units. Newton should have an established goal of 12% city-wide affordability. Getting to 12% would take two things. Strategically located, multi-unit developments, and squeezing every possible affordable unit out of developers. So why would the city want to cap a developer’s contribution at a 25% affordable rate? That number should be 33%.
Seems promising if the numbers work out, but I’m curious how 25% of the units can be affordable if you build a single family home?
Bryan: I think the Planning Department’s thought is that, like with fractional unit numbers in multi-family developments, the builder of a new home, single family or otherwise, would contribute funds that would be used to construct new affordable housing off-site.
I also heard that the contributions would amount to 25% of the home’s cost—so if you build a mansion, you will be contributing more than if you build a modest bungalow.
It’s an interesting idea. I’d like to see studies from other cities on how this works.
A 25% premium on all new house construction in newton sure sounds pretty onerous. I can’t say I’m very knowledgeable about real estate but I’d guess that would almost entirely stop construction of new single family homes in Newton… and consequently not raise much additional funding for affordable housing.
@Jerry: FYI, the proposal has a sliding scale. A single/two family home would be 15 percent. The 25 percent would apply to large, multi-unit developments.
BTW, I think there was a problem opening the link, I think it’s fixed now but please let us know if it isn’t.
Sounds like a good idea, as it stands now smaller houses that would normally be on the more affordable side get snapped up by developers who immediately tear down and replace them with $1.2m+ condos. It’s basically printing money for them at the expense of the city’s overall housing stock.
Besides the sliding scale on # of units I think it should also scale based on the size of construction – a 4,500+ sq ft house should be charged a higher percentage compared to one at 2,000 sq ft. The idea being to encourage construction of something -other- than the largest house that can legally be built on a lot.
I would prefer to see an approach that dis-incentivizes teardowns and provides incentives for transitioning one family homes into two. A senior would still get fair market value for their home. And the profit would come from improvements that would enable the two units combined to sell for more than the fair market value of the house being sold, plus any incentives that are offered.
It seems criminal not to mention wasteful that perfectly good homes that are potentially in reach for buyers get snatched up at inflated prices only to be torn down and replaced with homes that are less affordable. I counted at least 5 in my morning walk in Newton Center that have either been torn down or are slated for teardown.
“25%/ 15% of the home’s cost”. Good idea but at this time, difficult to assess!! When a developer applies for a building permit, he lists an approximate figure for the cost of the construction (the lower the figure, the lower the permit fee will be).
There is no follow up from the Planning Department: no accountability, no receipts of all the construction costs (and no manpower to do it).
Seems like a way for Newton to get affordable housing at the expense of newcomers and developers. If we want more affordable housing — and we should — we should tax incumbents directly.
Claire, how would the policy work? Who pays the homeowner fair market value? Who pays to convert the sfh into multiple units and after paying for the renovation how much would they be able to make a profit if constrained in what they can sell it for?
“It seems criminal not to mention wasteful that perfectly good homes that are potentially in reach for buyers get snatched up at inflated prices only to be torn down and replaced with homes that are less affordable.”
Are you expecting the city of Newton to subsidize the cost to homeowners to do the work their houses need to pass inspection? Do you know that the houses you pass would pass that inspection? The homeowners know how much work needs to be done on their home and selling their land saves them the money and the worry. Many of these homes are in disrepair and cannot be sold in that condition. The buyer would not be able to get a mortgage until the house passes inspection and has an appraisal.
Homeowners receive fair market value, inflated prices. The housing prices in Newton are inflated because it’s a desirable place to live. No home in Newton is affordable to most earners.
I like the village of small homes idea.
How is this working out for Cambridge and other places? Is there data? It sounds like a good idea.
Also, what does it mean when developers pay into the affordable housing fund? What is exactly done with this money? Is the city bidding in competition with developers to try to buy land and build affordable units or is there city owned land that is developed with the money? Or is the money used to subsidize units already on the market? Something else?
In other words how where these 147 units created? And is this a good record?
Interesting article. Posting it here but maybe there is a more recent relevant post
https://www.nytimes.com/2017/12/01/business/economy/single-family-home.html
What Mike Striar said.