BRA PowerPoint Example

INCLUSIONARY DEVELOPMENT POLICY December 8, 2015

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

December 8, 2015 3

1 What is Boston’s Inclusionary Development Policy?


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


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?


December 8, 2015 6



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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7


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

December 8, 2015 8

2 History


December 8, 2015 9

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


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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


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 at 50% of price differential ($200,000 floor)

Cash Out Rental 15% of total multiplied by $52,000 per unit




History Summary Table

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

December 8, 2015 13

IDP HISTORY STATUS AND OUTCOMES OF THE IDP SINCE 2000


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

December 8, 2015 14

3 2015 IDP Process


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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


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4 2015 Inclusionary Development Policy


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)



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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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


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



20

2015 Zones


21

City Council District Overlay


22

State Representative District Overlay


23

State Senate District Overlay

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


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)



Cash Out Rental $3,351,600 $2,646,000 $1,470,000

*As of right

December 8, 2015 26

5 IDP Implementation


IDP IMPLEMENTATION 2015

December 8, 2015


December 8, 2015 28

6 Next Steps


December 8, 2015 29

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


QUESTIONS

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