INCLUSIONARY DEVELOPMENT POLICY December 8, 2015 AGENDA 1. What - - PowerPoint PPT Presentation

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INCLUSIONARY DEVELOPMENT POLICY December 8, 2015 AGENDA 1. What - - PowerPoint PPT Presentation

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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

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INCLUSIONARY DEVELOPMENT POLICY

December 8, 2015

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AGENDA

December 8, 2015 2

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

Inclusionary Development Policy

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December 8, 2015 3

1

What is Boston’s Inclusionary Development Policy?

Inclusionary Development Policy

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December 8, 2015 4

  • 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)

WHAT IS THE INCLUSIONARY DEVELOPMENT POLICY?

TODAY

Inclusionary Development Policy

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December 8, 2015 5

  • 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.

WHAT IS THE INCLUSIONARY DEVELOPMENT POLICY?

WHO IS TARGETED?

Inclusionary Development Policy

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December 8, 2015 6

WHAT IS THE INCLUSIONARY DEVELOPMENT POLICY?

WHO IS TARGETED?

Inclusionary Development Policy

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

Income Limits

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December 8, 2015 7

WHAT IS THE INCLUSIONARY DEVELOPMENT POLICY?

WHO IS TARGETED?

Presentation Title

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 4 $1,272 $1,526 $1,654 $1,781

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December 8, 2015 8

2

History

Inclusionary Development Policy

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  • 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

HISTORY

IDP Program

Inclusionary Development Policy

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December 8, 2015 10

  • 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

HISTORY

IDP Program – BRA Clarification Policies

Inclusionary Development Policy

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IDP HISTORY

IDP Component 2000 2003 2005 2006 On-Site 10% of total units 15% of market rate units 15% of market rate units 15% of market rate units Off Site 15% of total 15% of total 15% of total 15% of total Cash Out Condo 15% of total multiplied by $52,000 per unit 15% of total multiplied by $52,000 per unit 15% of total multiplied by $97,000 per unit 15% of total at 50% of price differential ($200,000 floor) Cash Out Rental 15% of total multiplied by $52,000 per unit 15% of total multiplied by $52,000 per unit 15% of total multiplied by $97,000 per unit 15% of total multiplied by $200,000 per unit

History Summary Table

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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 Cash Out Condo $364,000 $364,000 $679,000 15% of total at 50% of price differential ($200,000 floor) Cash Out Rental $364,000 $364,000 $679,000 $1,400,000

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December 8, 2015 13

IDP HISTORY

STATUS AND OUTCOMES OF THE IDP SINCE 2000

Inclusionary Development Policy

CURRENT STATUS Total New Units Afford New Units Afford New Owner Units Afford New Rental Units Low Income (<60% AMI) Middle Income (60%-120% AMI) TDC 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 REVENUES REVENUE COLLECTED $79,396,005 TO BE COLLECTED $39,411,093 TOTAL REVENUE COMMITMENT1 $118,807,098 REVENUE PIPELINE2 $22,011,354

Onsite/Offsite Component Cash in Lieu Component

1 Projects that have triggered IDP obligations by pulling a building permit 2 Projects BRA Board approved but not permitted

EXPENSES AWARDED $70,488,212 EXPENDED $33,986,034 UNEXPENDED AWARDS $36,502,178 OUTCOMES OF AWARDED PROJECTS NEW LOW INCOME (<60% AMI) 1,215 NEW MIDDLE-INCOME (60-120% AMI) 382 TOTAL NEW AFFORDABLE UNITS 1,597 TOTAL PROJECT COSTS $768,000,000

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3

2015 IDP Process

Inclusionary Development Policy

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December 8, 2015 15

  • 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)

2015 IDP PROCESS

STAKEHOLDER ENGAGEMENT

Inclusionary Development Policy

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4

2015 Inclusionary Development Policy

Inclusionary Development Policy

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2015 INCLUSIONARY DEVELOPMENT POLICY

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 Cash Out Condo 18% of total at 50% of price differential ($380,000 floor) 18% of total at 50% of price differential ($300,000 floor) 15% of total at 50% of price differential ($200,000 floor) Cash Out Rental 18% of total at $380,000 18% of total at $300,000 15% of total at $200,000

Summary Table

*As of right On-site/off-site combinations are allowed

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December 8, 2015 18

  • 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

WHAT CHANGES ARE BEING PROPOSED?

2015

Inclusionary Development Policy

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December 8, 2015 19

  • 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

WHAT CHANGES ARE BEING PROPOSED?

2015

Inclusionary Development Policy

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Inclusionary Development Policy

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2015 Zones

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Inclusionary Development Policy

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City Council District Overlay

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Inclusionary Development Policy

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State Representative District Overlay

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Inclusionary Development Policy

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State Senate District Overlay

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December 8, 2015 24

  • 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

DETERMINATION OF ZONES

2015

Inclusionary Development Policy

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EXAMPLE: 49 UNIT DEVELOPMENT

IDP Component Zone A Zone B Zone C On-Site 6.37 6.37 6.37 IDP Contribution $140,600 $111,000 $74,000 Off Site 8.82 = 9 8.82 = 9 7.35 Cash Out Condo 18% of total at 50% of price differential ($380,000 floor) 18% of total at 50% of price differential ($300,000 floor) 15% of total at 50% of price differential ($200,000 floor) Cash Out Rental $3,351,600 $2,646,000 $1,470,000

*As of right

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5

IDP Implementation

Inclusionary Development Policy

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IDP IMPLEMENTATION

2015

December 8, 2015 Inclusionary Development Policy

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6

Next Steps

Inclusionary Development Policy

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  • December 9, 2015: Mayor Martin J. Walsh signs the Executive Order: An Order Relative to Inclusionary

Development

  • December 10, 2015: BRA Board adopts and endorses the Executive Order and adopts the 2015

Inclusionary Development Policy

  • January 1, 2016: Implementation date
  • Presentations to stakeholders

NEXT STEPS

Inclusionary Development Policy

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QUESTIONS