This is Part II of a two-part series on affordable housing in our community. Part I was published in our May issue.
By Ksenia Pryme
Affordable workforce housing has been a buzzword with many community organizations concerned with housing policy across the spectrum, from town planners and housing advocacy groups to business owners and real estate developers. The need is also recognized at the government level. Under 1969 Massachusetts General Laws Chapter 40B Section 20-23, the Commonwealth’s goal for all Massachusetts municipalities is to have 10 percent of housing units affordable to low/moderate income households. It is a moving target and to date all Cape towns are below the minimum threshold. The Cape Cod Commission, a regional planning and regulatory agency, promotes efficient land use and provides review assistance to the local towns. Tools include:
- Changing zoning bylaws to allow higher density in village centers and/or locations that are less environmentally sensitive and have greater infrastructure capacity.
- Preparing Housing Production Plans to serve as the basis for Local Comprehensive Plans that address each town’s housing needs and unique character.
The middle class market, a sector that is sometimes overlooked in housing programs, will certainly benefit from recent amendments to the Chapter 40R Smart Growth Housing Law, which is offered by the state to facilitate the production of “starter homes” – defined as smaller homes (maximum 1,850 square feet) on smaller lots (maximum .25 acre) that are affordable to young families and other entry-level buyers.
Municipalities can take advantage of the zoning incentives ranging from $10,000 to $600,000, depending on the size of the starter home zoning district, as well as housing production payments of $3,000 for each unit of housing built. The law requires that 20 percent of the units be set aside for sale to persons and families earning no more than 100 percent of AMI. There is also an open space requirement.
Development challenges
While the need and the benefits for buyers and local businesses are clear, and towns are allocating land for future buildout, one of the challenges that towns face when trying to increase housing diversity and affordability is attracting and retaining developers that are interested in supporting affordable housing.
One of the following two types of business groups may act as developers under Chapter 40B: Nonprofits/Public Agencies and For-Profit Limited Dividend Organizations.
Nonprofit organizations such as Housing Assistance Corporation, Community Development Partnership, and others are committed to leveraging various funding sources, such as low-income housing tax credit equity, Department of Housing and Community Development funds, Community Preservation Act monies, and any other available sources to fund affordable housing projects. Typically, 100 percent of the units developed by nonprofits are made affordable.
Chapter 40B provides incentives for a forprofit developer to add affordable units to their projects. First, a developer can take advantage of a streamlined “one-stop shop” Comprehensive Permit process, saving time and resources by submitting just one application instead of multiple. Secondly, the developer can offset his cost by applying for waivers from prescriptive municipal zoning requirements if a municipality has less than 10 percent of its housing qualifying as affordable and the developer commits at least 25 percent (or 20 percent in certain cases) of the new units to have long-term affordability restrictions. As a matter of fact, a number of recent developments wouldn’t have been possible at all if it wasn’t for the Chapter 40B provisions.
The challenge then becomes for the developers to plan a densely developed project that can comply with state building codes and health and environmental regulations while still leaving enough profit for the project to be economically feasible, given that increased land costs on the Cape require higher rental and sale prices with typical zoning.
Friendly 40B
Many find a good process to follow is to initiate an informal preliminary project review with potential stakeholders to introduce the project and seek input on how to make it more appealing to the community prior to developing technical drawings. Once it is apparent that the project will be supported by the town, it is important for the developer to work hand-in-hand with its consultants − which includes attorneys, architects, civil engineers, traffic and mechanical/electrical/plumbing engineers, and landscape architects − to put together a thoroughly developed 40B application submission.
Engineers and planners are involved in reviewing potential project sites to determine the buildout feasibility and regulatory hurdles involved with the proposed project. They also help the project fit the housing needs of the local communities while protecting valuable nearby environmental resources by implementing sustainable design practices. These include low impact development/green infrastructure strategies for stormwater management and innovative/alternative processes for wastewater treatment.
Done with proper planning and foresight, affordable developments are a sensible solution to meet the housing demands for Cape Cod’s workforce. Affordable housing not only creates homes, it creates jobs. According to the National Association of Home Builders, for every 100 affordable units that are built, 30 permanent jobs are created. Maintaining a diverse workforce on Cape Cod is a critical element to the growth and sustainability of local economy, and making the Cape an affordable choice will help encourage workers to put down roots in the community. Affordable housing is a basic tenet of a vibrant community.
Ksenia Pryme is a Marketing Coordinator for Coastal Engineering Company Inc. She can be reached at kpryme@coastalengineeringcompany.com or (508) 255-6511
