In its continuing exploration of ways to update Newton’s Inclusionary Zoning Ordinance and build more “affordable” units, the Zoning and Planning Committee met on April 14 to hear recommendations by the consultant, RKG Associates. The meeting was in response to requests from several City Council members to consider adding an “affordable” unit requirement or cash-in-lieu-of provision to projects of 4-6 units, thereby expanding the current requirement that projects with 7 or more units include a below-market-rate unit. In addition, Council members were interested in increasing the number of affordable units in larger developments.
In its presentation, RKG suggested that adding a unit requirement to Inclusionary Zoning might reduce the number of units that developers would be willing to build. As an alternative, they suggested cash payments in lieu of development, which would go into the Newton Housing Trust, for projects with 20 or fewer units. Presently, a cash payment can be made for projects of 7 to 9 units, and more than that would require affordable unit(s) unless exempt by special permit. RKG agreed the assumed TDC (total development cost) of an affordable unit should continue to be $650,000 when determining a cash payment. Affordable units would be targeted to people earning 80% or less of the Area Median Income (AMI). As examples, RKG offered the Cambridge and Somerville Housing Trusts, which they said were able to accomplish goals through developer cash payments and were also able to leverage additional money.
David Kalis, a member of the Zoning and Planning Committee, enthusiastically embraced the payment-in-lieu-of-development provision, responding that “the more cash we have, the more we can do.” He said that the payments would likely prevent smaller developments and were easier to manage administratively.
On the other side of the issue, Councilor Julia Malakie commented: “I couldn’t disagree more about enlarging the scope of the project that would allow payment in lieu of producing units. The surest way to get a unit is to get a unit.” Councilor Lisle Baker, Chair of the Zoning and Planning Committee, said that cash in lieu of development was likely to change “the nexus between money and development.” He, too, expressed concern that the cash option would reduce the number of affordable units.
Developers should be invited to the table, Councilor Susan Albright told the Committee. In her view, these were issues that should not be the sole purview of City Councilors. People with development experience should be included, she said.
Councilor Pam Wright stated that smaller projects in Newton – i.e., 35 units and under – were generally condominiums, not rentals. There would be lower costs associated with the marketing of the affordable units vs. rentals. The RKG calculations and presentation assumed that the units were rentals and the developers would have a larger cost managing the affordable units. This is a reason for offering a payment in lieu of affordable units up to a 20-unit project. Councilor Wright would prefer to have units on-site and integrated into the market-rate project. While she agreed that $650,000 per unit seemed to be the right number, she suggested that there was a different reality for developers building condos, selling them, and having no ongoing responsibility for the project.
RKG agreed with the Council about the 15% affordable factor for 80% AMI or less. They suggested, though, removing the 110% workforce housing requirement from larger projects. Those units are hard to rent since residents have an option of naturally affordable units in the community. The workforce housing number would then be calculated into affordable units and then added into the 15% for an increased percentage.
Facing the wide range of questions and concerns, RKG agreed to take the recommendations and subject them to a “myopic” review for the Committee’s consideration. Councilor John Oliver, who served as chair of the meeting, said that depending on the new recommendations, the Committee might be able to develop a new ordinance, subject to public comment and City Council approval.
See NewTV’s video of the meeting.