[Massplanners] Fee in Lieu of Affordable Housing

[Maren Toohill]

All interesting ideas! This is a difficult policy issue.

The cost of developing 1 affordable unit is likely well over $300,000 for a developer, and arguably may be higher than that for a municipality. One issue to consider is whether your payment-in-lieu is high enough to allow your community to build the affordable units that the developer chooses not to build. Another issue is considering if a high payment-in-lieu will hinder development of much-needed housing units (both market-rate and deed-restricted affordable units).

Littleton calls for a payment-in-lieu that is two times the HUD income limits for a household of 4 (at 80% AMI). With the April 2024 HUD numbers for the Boston-Cambridge-etc. area, that puts Littleton’s fee-in-lieu at 2x$130,250 per unit. Littleton’s Inclusionary Housing Zoning Bylaw calls for 10% affordable units for any residential development over 6 units and allows for PILU for developments between 6 and 19 units. Littleton chose the policy direction of setting the payment-in-lieu high, thus pointing the developers in the direction of building the affordable units rather than opting for the payment.

Maren
Maren A. Toohill, AICP
Town Planner
978/540-2425
MToohill at littletonma.org<mailto:MToohill at littletonma.org>
Town of Littleton


From: MassPlanners <massplanners-bounces at masscptc.org> On Behalf Of Tozer, Jeanette via MassPlanners
Sent: Wednesday, April 17, 2024 11:49 AM
To: Williams, Kathleen <kwilliams at yarmouth.ma.us>; Mass Planners <massplanners at masscptc.org>
Subject: Re: [Massplanners] Fee in Lieu of Affordable Housing



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Hi Kathy,

The City of Worcester does not tie the fee in lieu to sale prices. The Inclusionary Zoning ordinance requires a cash payment that is equal to three percent (3%) of the total construction value of all building permits for the development, including trade permits.

Best,
Jeanette

Jeanette R. Tozer, AICP (she, her)
Affordable Housing Trust Fund Manager
Executive Office of Economic Development
City of Worcester | 455 Main Street, Worcester, MA 01608
P: 508-799-1400 x31438
E: tozerj at worcesterma.gov<mailto:tozerj at worcesterma.gov>
www.worcesterma.gov<http://www.worcesterma.gov/housing-neighborhood-development/affordable-housing-trust-fund>

From: MassPlanners <massplanners-bounces at masscptc.org<mailto:massplanners-bounces at masscptc.org>> On Behalf Of Williams, Kathleen via MassPlanners
Sent: Wednesday, April 17, 2024 11:30 AM
To: Mass Planners <massplanners at masscptc.org<mailto:massplanners at masscptc.org>>
Subject: [Massplanners] Fee in Lieu of Affordable Housing

Caution: This email came from outside the City of Worcester. Do not click on links or open attachments unless you are sure you recognize the sender and you know the contents are safe.

Hi All,
The Town of Yarmouth is looking to modify the way we calculate the cash payment for the Fee in Lieu of Affordable Housing.  I know this is a topic that has been discussed before and have looked at the more recent responses, but was wondering how others determine this calculation.

Yarmouth is looking at a way to calculate the difference in sale price between the market rate unit and an affordable unit and are proposing the following.

412.4.5 Fee in Lieu of Affordable Housing.  Calculation of cash payment.

For each affordable unit not provided within the locus of the development, the fee shall be the difference between the current Median Sale Price* and the affordable price calculated to be affordable by the Massachusetts Executive Office of Housing and Livable Communities (HLC) Local Initiative Program (LIP)** to a household of four earning no more than 80% of the Area Median Income as set by U.S. HUD on an annual basis for Barnstable County.
* The Median Sale Price is per the most current Warren Group data, adjusted for unit type, and where units in multi-family buildings of 3 or more units are considered condominium units.
** Housing units in multi-family buildings of 3 or more units are calculated as condominium units.

Thanks,
Kathy
----------------------------------------
Kathy Williams, P.E.
Yarmouth Town Planner
1146 Route 28
South Yarmouth, MA  02664-4492
(508) 398-2231 Ext 1276
kwilliams at yarmouth.ma.us<mailto:kwilliams at yarmouth.ma.us>


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