Inclusionary Housing Policy
BYLAW: Inclusionary Housing Policy
DATE ADOPTED: 1985
PURPOSE OF BYLAW: Extracts from the housing element of the Lexington comprehensive plan.
INCLUSIONARY HOUSING POLICY
(Approved December 9, 1985)
(Income and Housing Cost Data Updated to 1998)
POLICY 4.10: In order to obtain a favorable recommendation, or where applicable, a favorable action, by the Planning Board, each new housing develop-ments which gains an increase in density greater than that previous-ly allowed by right in the zoning district in which it is located, shall provide affordable housing units, and shall comply with the policies in this plan.
Comment: COMPENSATORY BENEFIT: Where an action of the Town increases the value of a residential property, by permitting higher density for instance, or reduces an owner's or developer's expense, by granting a waiver or variance from normal standards, for instance, the Town should receive a benefit, such as some type of affordable housing, in return. Further, the Town should refrain from actions which increase value, or reduce expenses, unless it does receive such a benefit.
POLICY 4.11: Through controls on rental levels or the resale value, housing units should remain affordable for an indefinite period. The rental levels or resale value should be determined primarily by the abili-ty of target income groups to rent or purchase and only secondarily related to indices of inflation.
Comment: The Town must monitor sales and rentals: 1) to insure the acquisition price or rent levels of housing units remain affordable to target income groups, and 2) to avoid windfall profits to subse-quent occupants if inclusionary units (which are produced by some form of public assistance) were to be sold at then prevailing market rates.
FOR STUDY: The maximum annual increase allowed for the conversion of the Muzzey School was the original sale price of the condominium unit plus an annual allowance for appreciation of value equal to the increase in the Consumer Price Index for the Boston area or 4 per cent, whichever is less. Other methods of calculating the maximum annual increase in value should be analyzed. Some other indices might be: the annual increase in the wage component of the Consumer Price Index for the Boston metropolitan area, the percent-age increase in the median income for families in the Boston metro-politan area, the increase in the buyer's initial cash investment (not the resale value of the housing unit) in an alternative form of investment, such as a long term certificate of deposit.
POLICY 4.12 : A developer may use one of several alternatives for providing affordable housing units on or off the site. The following four alternatives are considered equivalent; no priority among them is implied by the listing.
% of all units Type of units provided
5% Low-income units donated (by gift) to the Lexington Housing Authority (L.H.A.); or
15% Low-income units purchased by L.H.A. at HUD allowable cost for Boston metropolitan area; or
25% Moderate income units to be purchased or rented by eligible households; or
40% Middle income units to be purchased by eligible households (Note: does not apply to rental units); or
After efforts to provide the type of housing units indicated above have proven fruitless, a developer may request that the Town allow the following:
100% Units not provided directly; financial contribution made to LEXHAB or L.H.A. in lieu of providing units equal to 3% of sales price of all units.
POLICY 4.13: PREFERENCE FOR FAMILY UNITS: Every effort shall be made to provide housing units for low-, moderate-, or upper moderate-income families.
Comment: The Town has fallen far short of meeting the targets set by the 1979 Town Meeting for the provision of family type units (target = 174, built = 26) while being much closer to the target for housing units for senior citizens (238 vs. 209).
POLICY 4.14: ALTERNATE LOCATION OF AFFORDABLE DWELLING UNITS: Some or all of the affordable dwelling units may be located on land other than the development tract if the affordable dwelling units are newly crea-ted and acceptable to the Town. The affordable dwelling units may be located in an existing structure provided their construction constitutes a net increase in the number of dwelling units in the structure.
POLICY 4.15: TIMING OF CONSTRUCTION: Building permits should not be issued for the construction of any dwelling unit in the second 50% of the market rate dwelling units, which are linked to affordable dwelling units, whether on the same site or elsewhere in town, until con-struction has begun on ALL the affordable dwelling units.
POLICY 4.16: COMMITMENTS TO SPECIFIC PLANS: At the initial concept plan stage, the developer shall submit plans showing the number of affordable housing units, their approximate sales price or rent level and the method of financing in the preliminary site development and use plan. The developer may also indicate alternate methods of provi-ding affordable housing units in the event the principal proposed method is not successful.
At the stage of the application to the Special Permit Granting Authority, which occurs after Town Meeting rezoning, the developer should submit specific data on sales prices or rent levels of affordable dwelling units, a calculation of affordability based on current economic data, all of which should be incorporated in the special permit. Where the affordable dwelling units are to be constructed under a federal or state subsidy program, a letter of commitment from the subsidizing agency should be included.
POLICY 4.17: LOCATION, APPEARANCE: When located in the same development with market-rate housing units, inclusionary units should be compatible with, and as nearly indistinguishable from, the market-rate units in terms of exterior appearance, and dispersed throughout the development.
Comment: In all likelihood, affordable housing units will be smaller in square feet and have fewer features than market rate units even with the same number of bedrooms.
OTHER POLICIES APPLICABLE TO HOUSING AFFORDABILITY AND DIVERSITY
2. DIVERSITY OBJECTIVE:
Encourage greater diversity of housing opportunities in Lexington to meet the needs of a changing and diversified population with respect to age groups, number of persons in a household, and income.
Types of housing units by age of occupants, size of household
Context: Lexington now has a mismatch between its housing characteristics and its demographic characteristics. According to the 1980 Census, Lexington had the highest percentage (89%) of single-family homes of any of the adjoining towns and cities, the lowest percentage (14%) of rental units in the housing stock, and a relatively high number of rooms per housing units (6.9). In contrast, the 1980 Census showed the shift away from families with children: 44% of the housing units were occupied by two people or less and 64% were occupied by three people or less. The median age of the population is one of the highest in the area.
The mismatch between the size of the housing units and the size of households presents a dilemma. Many of the people who live in small households want to continue to live in Lexington, but there are very few housing units suitable for smaller households in the town.
POLICY 2.1 : Provide greater choice in the type of housing units available to correspond to the varying needs of town residents in different stages of their life cycle. Encourage more units other than large single-family houses, less expensive units, more rental units and more accommodations specifically designed for senior citizens.
Type of housing units by size, type of structure
POLICY 2.2 : Encourage a greater diversity in the type of residential structures at different price levels, by permitting more two-family houses, town houses, apartment buildings and buildings specifically design-ed for senior citizens, each sited and designed to be compatible with nearby single-family homes, if any.
POLICY 2.3 : Encourage housing units suitable for small households (condominium units, apartments, congregate housing units, accessory apartments in large, single family homes), and units suitable for single-parent households.
POLICY 2.4: Encourage opportunities for shared living arrangements for the elderly and handicapped.
Types of housing unit by tenure
POLICY 2.5 : Increase the number of housing units (apartments, congregate hous-ing units) available for rental, in other than single-family houses.
POLICY 2.6 : Maintain at least the present number of multiple-family rental units while working to increase the overall supply of rental housing.
TERMINOLOGY: COMPREHENSIVE PLAN DEFINITIONS OF "AFFORDABILITY"
Affordable Housing: includes both subsidized housing, which usually results from state or federal grant programs, and other housing, usually oriented to moderate income families, which results from various public actions such as a direct grant, an interest rate below prevailing market rates, conveyance of property from the Town at less than the value for the "highest and best use", zoning action for a multi-family development in accordance with the Planning Board's "Inclusionary Housing Policy", a comprehensive permit, or other types of indirect assis-tance.
Affordable Housing Units: are those which may be purchased or rented by those who meet the guidelines for maximum annual income for a low-income, moderate-income, or upper moderate-income family or household, and whose expenditure for housing costs does not exceed 30% of the gross annual income of an owner and 28% of the gross annual income of a renter in the previous calendar year. Housing costs includes: 1) for owners - payments for principal and interest on a mortgage, real estate taxes, and condominium fees, if any, or 2) for renters - rent including heat, furnishings, if provided, but not utilities.
Households With Incomes Qualifying For Affordable Housing: The median annual income for Boston metropolitan area (PMSA) shall be used to determine the ranges of annual income for low-income, moderate-income, or upper moderate-income households. The income eligibility requirements of various state and federal programs for low- and moderate-income housing may differ from the comprehensive plan definition and may be used instead.
Low Income Household - below 50% of Boston SMSA median income
Moderate Income Household - 50 to 80% of Boston SMSA median income
Upper Moderate Income Household - 80 to 120% of Boston SMSA median income
Median income for the Boston metropolitan area: As calculated by the Regional Economist, Boston Office, U.S. Department of Housing and Urban Development and revised annually.
Mortgage Interest Rate: Affordability of housing for purchase is greatly influenced by changes in inte-rest rates and the length of the mortgage. In determining mortgage costs, the survey of mortgage rates of area lending institutions for fixed rate mortgages, as published monthly by The Boston Globe, will be used.
Equivalent Housing Cost, Retirement Housing: In the case of retired persons with limited annual income, living in a retirement home or other group quarters where other services are provided, an equivalent housing expense should be computed. When monthly charges, which may include other items such as meals, insurance, medical care and other support services, are assessed, the housing component of those charges should be identified. When an "endowment" or other escrow or investment accounts are required, for the purposes of this policy, that shall be considered to be equivalent to the sale price of a unit; a projected investment income from the "endowment" shall be calculated, based on the prevailing rate of return for a long term certificate of deposit, and that (lost) income shall be considered to be a housing cost.