P&Z Revises Affordable Housing Regulations

By Andrew Gorosko

The Planning and Zoning Commission (P&Z) has revised its zoning regulations on “affordable housing,” with the intention of making such housing more affordable.

Under the terms of the revised regulations, which were approved December 7, and which take effect December 18, the sale price of new affordable housing units for some eligible buyers would drop from approximately $146,600 to about $116,000. The rule changes apply to future privately developed affordable housing complexes, not existing housing.

The $116,000 purchase price assumes that the family applying for affordable housing has an annual income of $50,000, makes a 10 percent down payment on the unit, has 7.5 percent interest charges on its mortgage, and has a 30-year mortgage, according to Elizabeth Stocker, the town’s director of community development.

The P&Z’s changes to the town’s local affordable housing regulations bring the rules into conformance with recently revised state affordable housing regulations.

Although several local affordable housing complexes have been proposed in the past, only one housing complex containing affordable units has been built – Riverview Condominiums. Riverview is a 49-unit condominium complex which contains 13 affordable units, built on the site of a former sand and gravel mine, behind Sand Hill Plaza, off South Main Street in Botsford.   

 “Affordable housing” is a technical term used by the state Department of Housing. A complex set of formulas is used to calculate affordability, and who is eligible to acquire affordable housing, based on income. Various affordable housing regulations apply to the sale prices of new units, to the resale prices of existing units, and to rental prices. Affordable housing units are sold to buyers who meet income eligibility requirements at prices that are lower than prevailing market prices.

Affordable housing regulations provide real estate developers with a financial incentive to create affordable housing, known as a “density bonus.” Such a density bonus allows developers to build housing units at a higher construction density than normally allowed in a given land use zone, provided that a specified percentage of housing units is designated as “affordable housing.”

The town’s affordable housing regulations would require that the “affordable” units within a housing complex be of the same construction quality as market-rate units, and that affordable units have the same number of bedrooms as market-rate units.

The state’s regulations, however, do not require such equality between affordable units and market-rate units in terms of construction quality and number of bedrooms.

In seeking to develop housing complexes that include affordable units, developers may apply under the terms of the town’s regulations, under the state’s regulations, or may submit their own set of development regulations for endorsement by the municipality within which they are applying.

P&Z Comments

P&Z member Heidi Winslow said December 7 the town zoning regulations’ requirement for equality between affordable units and market-rate units, in terms of construction quality and the number of bedrooms in units, may prove difficult to enforce.

P&Z Chairman Daniel Fogliano noted that in the now-defunct Newtown Village proposal, the designated affordable units would have been smaller than market-rate units and would have had 11/2  bathrooms instead of 21/2 bathrooms. That proposal had called for the construction of 98 houses on a site in Sandy Hook near Exit 11 of Interstate 84. 

Physical disparities between affordable units and market-rate units within a housing complex would result in a social stigma for people living in affordable units, Ms Winslow said.

Resident Robert Hall of 5 Nettleton Avenue said it would be good to have such proportionality between market-rate and affordable units. 

It would prudent for developers to follow the P&Z’s suggestions regarding construction quality and unit size when developing housing complexes containing affordable housing, said P&Z member Lilla Dean. 

Ms Stocker told P&Z members that potential purchasers of affordable housing units should be cautious in buying such housing, considering the various conditions that are placed on such purchases.

In unanimously approving the town’s revised affordable housing regulations, P&Z members concurred that the changes “serve to strengthen Newtown’s commitment to promote choice and economic diversity in housing by encouraging the development of housing which will meet the housing needs of both low- and moderate-income households.”

The revised town regulations require that 30 percent of the units in an affected housing complex be set aside as affordable housing, compared to the previous 20 percent requirement. Also, the new rules would preserve the “affordable” status of the units for 40 years, instead of the previous 20 years.

 The new regulations require that at least 15 percent of the designated affordable units be set aside for persons and families whose income is at or below 60 percent of the area median income, and that the remainder of the affordable units be set aside for those people whose income is at or below 80 percent of the area median income.

The new regulations also change the definition of “median income,” so that the lesser of the “area median income” or the “state median income” is used in calculating local affordable housing prices.

The Borough Zoning Commission does not have zoning regulations on affordable housing.