Commonwealth Housing Task Force Draft – For Final Review Confidential – Not for Distribution Zoning Overlay Districts & State Financing Recommendations June 20, 2003 (based on 6/13/03 and subsequent review)

6/20/2003Commonwealth Housing Task Force 2 The Current Situation  Corporations, educational institutions, medical centers and non-profits have difficulty attracting workers to Massachusetts.  Many of the State’s best young minds are leaving for areas with more affordable housing.  Future economic growth depends on housing at reasonable prices.  The unique quality of life in New England is threatened by accelerating sprawl.

6/20/2003Commonwealth Housing Task Force 3 The Problem and its Resolution  The shortfall in housing production results from insufficient land zoned for the development of apartments and single family homes on smaller lots.  Enough land needs to be zoned so that the private sector can efficiently increase production to meet the demand for new housing– when and where it is needed.  The zoned land should conform to Smart Growth principles.  More housing affordability is essential.

6/20/2003Commonwealth Housing Task Force 4 The Proposed Program  Provide incentives for to local communities that will yield sufficient land, zoned as-of-right, to accommodate increased production.  Require that developments with over 12 units have 20% of the units affordable to those at 80% of median income.  Increase State funding commitments to ensure the production of affordable units.

6/20/2003Commonwealth Housing Task Force 5 Overlay Zoning Districts  Currently allowed under state law. Every community in the State may, but will not be required, to participate.  Design standards set and enforced locally.  Overlay Districts must have no restrictions on occupancy, and allow at a minimum: Mixed Use. Single family development at 8 units per acre; Apartments at 20 units per acre. Infill on non-conforming lots. Accessory apartments in large homes.  Approval of Overlay Districts and monitoring by DHCD.

6/20/2003Commonwealth Housing Task Force 6 Smart Growth Locations  Overlay Zoning Districts in three locations will be eligible for incentives: 1.Transit / Commuter Rail Stations. 2.Town centers. 3.Underutilized industrial, commercial and institutional properties.

6/20/2003Commonwealth Housing Task Force 7 Proposed State Incentives  Density Bonus Payment of $1,000 to $3,000 per housing unit allowed by the zoning, paid when the Overlay District is enacted by the community.  For those public school students from new housing actually built in the Overlay District, the State’s Chapter 70 share of school costs will increase to 100%.  One for one relief from 40B based on the number of units allowed (not necessarily built) in the Overlay District (the units allowed must have the same affordability characteristics as 40B units, and the land must be reasonably available for sale).  Special priority for State spending of capital funds (schools, transportation, water, sewer, etc.).

6/20/2003Commonwealth Housing Task Force 8 Funding Strategy Components for Affordability  Maintain the level of the annual Bond Cap at $1.2 billion; dedicate 35% annually to housing.  Increase annual State outlays for housing to $140 million [double current expenditures].  Make Tax Increment Financing available for housing.  Sell surplus State property in the amount of $100 million per year. Place the funds in the State’s Affordable Housing Trust.

6/20/2003Commonwealth Housing Task Force 9 Projected Overlay Zoning Districts

6/20/2003Commonwealth Housing Task Force 10 Projected State Costs Overlay Zoning Districts

6/20/2003Commonwealth Housing Task Force 11 Estimated Net State Costs Overlay Zoning Districts

6/20/2003Commonwealth Housing Task Force 12 Summary of Costs Overlay Zoning Districts  Density Bonus Payments for Overlay Zoning Districts allowing 46,850 housing units are projected to cost approximately $10 million per year over ten years.  After 10 years in operation, the cumulative new state school costs for 31,000 new housing units in Overlay Districts would be approximately $60 million per year.  The current Chapter 70 school reimbursement budget is $3.0 billion. The cumulative costs after ten years will equal only 2.1% of the current budget. It will be significantly less in earlier years.  Increased State revenues from income and sales taxes on construction related wages and the purchase of materials from 70% of the new units built are estimated to average $30 million per year after the fifth year.

6/20/2003Commonwealth Housing Task Force 13 Anticipated Results  Substantial amounts of land zoned, as-of- right, for single family and apartment development, in Smart Growth locations,  plus additional State funds for affordability, will significantly improve basic housing conditions in Massachusetts.