Report Excerpt:The ARB recognizes the need for more affordable housing in Arlington, but for the reasons stated below, believes that this proposal will not achieve that goal and may actually reduce the development of affordable housing in Arlington.
Section 8.2 of the Zoning Bylaw sets forth the affordable housing requirements for residential development in Arlington. Adopted by a vote of Town Meeting in 2001, the bylaw requires that 15% of any new residential development of six or more units (which is subject to Environmental Design Review) must be affordable to households earning 70% or 80% of Area Median Income (AMI) for rental units and ownership units, respectively. Housing units created through this measure must be affordable in perpetuity, built on site, and integrated into the development. To incentivize developers to build affordable units, the bylaw allows for reduced parking requirements. Since 2001, the bylaw has resulted in the development of 59 affordable housing units.
This Warrant Article seeks to raise Arlington’s affordable housing requirement for developments of six or more units from 15% to 25% without any corresponding changes to the incentive structure and without any supporting documentation that such a large increase would be viable in Arlington. At the Town’s current requirements, five market rate units cover the subsidy for the remaining affordable unit in a six unit development. Under the proposed amendment, the four market rate units would need to cover the subsidy. This is a significant change, and one that economic analysts for other communities have suggested could discourage private investment, particularly for smaller multi-unit projects, or even backfire, resulting in fewer affordable units being built.
For Arlington, where the inclusion of affordable housing for developments of six or more units is already mandatory, the appropriate balance between incentives and requirements must be sought. If a pro forma for a project does not balance out, the affordable housing requirement, special permit requirements, and other conditions can undermine a development or lead a developer to choose to build something sufficiently small to not require the development of affordable units. If developing affordable housing through inclusionary zoning is overly restrictive, it may be more practical for a developer to apply for a permit through the Comprehensive Permit process (Chapter 40B) than through local inclusionary zoning provisions, or not work in Arlington at all as there are significant costs (time and money) to pursue a Comprehensive Permit.
In short, Arlington’s affordable housing requirements need to provide meaningful benefits and incentives to offset developers’ revenue losses. A threshold set too high, especially when accompanied by an extensive review and permitting process, may actually incentivize developers to build elsewhere. The ARB also notes this Board and the Select Board adopted the existing Housing Production Plan (HPP) in 2016, which laid out housing needs and demand, the development constraints, capacity, and opportunities, and an implementation plan consisting of housing goals and strategies to achieve them. The Housing Production Plan (HPP) update has kicked off. The broad engagement envisioned as part of that process would enable the community to have wide ranging conversations about what housing production in Arlington might look like, how it could be implemented, and where it should be focused in the community. It is expected that the HPP Update will take a close look at the structure of Arlington’s inclusionary housing bylaw and provide recommendations on how to balance the thresholds, percentages, and incentives for produce affordable housing. That is the appropriate process to determine if the percentage of required affordable housing can be increased, and, if so, to what new percentage.