INCLUSIONARY DEVELOPMENT POLICY December 8, 2015
AGENDA 1. What is the Inclusionary Development Policy? 2. History 3. 2015 Inclusionary Development Policy Process 4. 2015 Inclusionary Development Policy 5. Implementation 6. Next steps December 8, 2015 2 Inclusionary Development Policy
1 What is Boston’s Inclusionary Development Policy? December 8, 2015 3 Inclusionary Development Policy
WHAT IS THE INCLUSIONARY DEVELOPMENT POLICY? TODAY Boston’s IDP applies to any proposed residential project that has ten or more units And is financed by the City or built on any property owned by the City; Or requires zoning relief The IDP program in effect today requires that each project provide affordable units in an amount not less than fifteen percent (15%) of the number of market rate units in the project, or ~13.04% of total units Developers, with the approval of the BRA, can also meet their affordable housing obligations By building 15% of the units off-site; Or providing an Affordable Housing Contribution equal to the number of affordable units required for the project multiplied by the Affordable Housing Cost Factor ($200,000) December 8, 2015 4 Inclusionary Development Policy
WHAT IS THE INCLUSIONARY DEVELOPMENT POLICY? WHO IS TARGETED? The housing units provided through the IDP are targeted towards moderate to middle income households. Rental units are made available to households earning up to 70% of Area Median Income (AMI). Homeownership units are made available to households earning 80% and 100% of AMI. Half of the units for 80% AMI and the other half for 100% AMI households. December 8, 2015 5 Inclusionary Development Policy
WHAT IS THE INCLUSIONARY DEVELOPMENT POLICY? WHO IS TARGETED? Income Limits Household Size 70% AMI 75% AMI 80% AMI 90% AMI 100% AMI 1 $48,250 $51,700 $55,150 $62,050 $68,950 2 $55,150 $59,100 $63,050 $70,900 $78,800 3 $62,050 $66,500 $70,900 $79,800 $88,650 4 $68,950 $73,900 $78,800 $88,650 $98,500 5 $74,450 $79,800 $85,100 $95,750 $106,400 6 $80,000 $85,700 $91,400 $102,850 $114,250 December 8, 2015 6 Inclusionary Development Policy
WHAT IS THE INCLUSIONARY DEVELOPMENT POLICY? WHO IS TARGETED? Maximum Sales Price Bedrooms 80% AMI 90% AMI 100% AMI Studio $144.400 $166,600 $188,700 1 $173,900 $199,800 $225,700 2 $203,600 $233,000 $262,700 3 $233,000 $266,500 $299,700 4 $262,700 $299,700 $336,700 Maximum Affordable Rents Bedrooms 50% AMI 60% AMI 65% AMI 70% AMI Micro $686 $823 $892 $961 Studio $763 $915 $992 $1,068 1 $891 $1,068 $1,157 $1,246 2 $1,017 $1,221 $1,322 $1,424 3 $1,145 $1,374 $1,488 $1,602 December 8, 2015 4 $1,272 $1,526 $1,654 $1,781 Presentation Title 7
2 History December 8, 2015 8 Inclusionary Development Policy
HISTORY IDP Program February 2000: An Order Relative to Affordable Housing established by Executive Order October 2003: BRA adopts a temporary Inclusionary Development Demonstration Program February 2005: An Order Relative to the Affordable Housing Cost Factor established by Executive Order May 2006: An Order Relative to the Inclusionary Development Policy established by Executive Order September 2007: An Order Relative to the Inclusionary Development Policy’s Income Policy established by Executive Order December 8, 2015 9 Inclusionary Development Policy
HISTORY IDP Program – BRA Clarification Policies December 2004: BRA adopts the Affordable Housing Requirements policy July 2009: BRA adopts three policies: Guidance on Building Affordable Units On-Site Asset Policy for the Sale and Rental of Affordable Housing Units Inclusionary Development Policy Funding Guidelines June 2010: BRA adopts Inclusionary Development Program – Guidance for Developers January 2015: BRA adopts Enhancement and Changes to Affordable Housing Compliance and Monitoring December 8, 2015 10 Inclusionary Development Policy
IDP HISTORY History Summary Table IDP Component 2000 2003 2005 2006 15% of market rate 15% of market rate 15% of market rate On-Site 10% of total units units units units Off Site 15% of total 15% of total 15% of total 15% of total 15% of total at 50% of 15% of total multiplied 15% of total multiplied 15% of total multiplied Cash Out Condo price differential by $52,000 per unit by $52,000 per unit by $97,000 per unit ( $200,000 floor) 15% of total multiplied 15% of total multiplied 15% of total multiplied 15% of total multiplied Cash Out Rental by $52,000 per unit by $52,000 per unit by $97,000 per unit by $200,000 per unit
EXAMPLE: 49 UNIT DEVELOPMENT IDP Component 2000 2003 2005 2006 On-Site 4.9 6.39 6.39 6.39 Off Site 7.35 7.35 7.35 7.35 15% of total at 50% of Cash Out Condo $364,000 $364,000 $679,000 price differential ( $200,000 floor) Cash Out Rental $364,000 $364,000 $679,000 $1,400,000
IDP HISTORY STATUS AND OUTCOMES OF THE IDP SINCE 2000 Onsite/Offsite Component Afford New Owner Afford New Rental Low Income Middle Income (60%-120% CURRENT STATUS Total New Units Afford New Units TDC Units Units (<60% AMI) AMI) COMPLETE 13,612 1,496 521 974 93 1,403 $5,405,000,000 IN CONSTRUCTION 4,904 551 47 482 5 546 $2,320,000,000 TOTAL 18,516 2,047 568 1,456 98 1,949 $7,725,000,000 Cash in Lieu Component EXPENSES OUTCOMES OF AWARDED PROJECTS REVENUES AWARDED $70,488,212 REVENUE COLLECTED $79,396,005 NEW LOW INCOME (<60% AMI) 1,215 NEW MIDDLE-INCOME (60-120% AMI) 382 TO BE COLLECTED $39,411,093 EXPENDED $33,986,034 TOTAL REVENUE COMMITMENT 1 $118,807,098 TOTAL NEW AFFORDABLE UNITS 1,597 UNEXPENDED AWARDS $36,502,178 REVENUE PIPELINE 2 $22,011,354 TOTAL PROJECT COSTS $768,000,000 1 Projects that have triggered IDP obligations by pulling a building permit 2 Projects BRA Board approved but not permitted December 8, 2015 13 Inclusionary Development Policy
3 2015 IDP Process December 8, 2015 14 Inclusionary Development Policy
2015 IDP PROCESS STAKEHOLDER ENGAGEMENT Mayor’s Office/BRA/DND staff working sessions (December 2014 onwards) Independent consultant (June 2015) Housing advocates (May 2015 onwards) Development community (June 2015 onwards) December 8, 2015 15 Inclusionary Development Policy
4 2015 Inclusionary Development Policy December 8, 2015 16 Inclusionary Development Policy
2015 INCLUSIONARY DEVELOPMENT POLICY Summary Table IDP Component Zone A Zone B Zone C On-Site 13% of total units 13% of total units 13% of total units Off Site 18% of total in vicinity 18% of total in vicinity 15% of total in vicinity 18% of total at 50% of 18% of total at 50% of 15% of total at 50% of Cash Out Condo price differential price differential price differential ($380,000 floor) ($300,000 floor) ($200,000 floor) Cash Out Rental 18% of total at $380,000 18% of total at $300,000 15% of total at $200,000 On-site/off-site combinations are allowed * As of right
WHAT CHANGES ARE BEING PROPOSED? 2015 1. Create three geographic zones to determine IDP Contributions: Zone A, Zone B and Zone C 2. Increase IDP Contributions 3. Increase off-site requirements to 18% for Zone A and Zone B, 15% for Zone C 4. Increase IDP Contribution percentages to 18% in Zone A and Zone B 5. Allow for the possibility of up to 100% AMI for rentals in Zone C 6. Define off- site “Vicinity” as within a half -mile radius of the development regardless of Zone 7. Clarify that on-site requirements are 13% of total units December 8, 2015 18 Inclusionary Development Policy
WHAT CHANGES ARE BEING PROPOSED? 2015 8. Allow for off-site units to be provided through direct construction or rehabilitation of existing units 9. Specify payment schedules 10. Allow developers to pay IDP Contributions in one upfront present-value calculated lump sum 11. Emphasize that developers may not rent ownership units 12. Require that on-site affordable units be comparable to market-rate units 13. Require that off-site units must meet DND Affordable Housing Design and Construction Guidelines 14. Define units smaller than 450 SF as micro-units and mandate that they be sold or rented at 90% of studio AMI 15. Exempt projects that have over 40% of their units deed restricted December 8, 2015 19 Inclusionary Development Policy
2015 Zones Inclusionary Development Policy 20
City Council District Overlay Inclusionary Development Policy 21
State Representative District Overlay Inclusionary Development Policy 22
State Senate District Overlay Inclusionary Development Policy 23
DETERMINATION OF ZONES 2015 • Zones were determined by analyzing sales data supplied to DND by The Warren Group. • Sales data included property type, location, and living area. • Using BRA neighborhoods, as updated in March 2014, zones were designated based on city-wide sales from FY 2013 to FY 2015: Zone A: Median sales price falls in the top third of sales prices Zone B: Median sales price falls in the medium third of sales prices Zone C: Median sales price falls in the lower third of sales prices December 8, 2015 24 Inclusionary Development Policy
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