Q: What is the definition of “affordable housing?”
Affordable housing is defined by statute as housing that is affordable by people making 70% of the median income for a given area, adjusted for family size.  In order to be counted as “affordable” units toward the 10% mandated by Chapter 40B housing statute, however, the housing also has to be built utilizing state/federal subsidies and must be deed-restricted to remain affordable for a certain time period (5 years for rental and 15 years for owner-occupied units).

Q: Who is eligible to rent or purchase affordable housing?
In general, people making up to 80% of the median income for a given area are eligible.

Q: How much affordable housing does Chelmsford currently have?
Current estimates place Chelmsford's affordable housing stock at over 12%.  However, because Chapter 40B doesn't count units that aren't deed-restricted or subsidized, and doesn't count units in trailer parks, the percentage for purposes of Chapter 40B calculations is only something over 6%.

Q:  So, how many more units are required to reach the Chapter 40B target of 10% qualified units?
About 500.

Q:  How many units of new rental housing would be required if no units are “bought-down” or redeveloped?
500, because all newly constructed rental units are counted as long as 10% of the units are properly subsidized and deed-restricted.

Q: How many units of owner-occupied housing would have to be built in order to reach the 10% threshold?
2500 under current permitting trends.  That's because the town has only been requiring that 25% of the units be affordable in these projects, and unlike rental units, only the actual affordable units are counted in owner-occupied properties.  So, the town's housing stock would have to grow by some 20% to reach affordable targets under Chapter 40B, occupying virtually every inch of remaining buildable property in the town – as well as some lots that would be considered unbuildable were it not for special variances granted to projects that include “affordable” units.  In other words, the Chapter 40B law is cleverly constructed so that it is next to impossible to reach its target with owner-occupied units.  Yet the town keeps approving these types of projects one after the other.

Q:  How much does it cost to “buy down” and properly deed-restrict an existing unit of housing?
It depends on the individual unit, of course, and the overall shape that it's in.  The minimum cost is around $15,000 per rental unit, more for owner-occupied properties.  However, because the current director of the Chelmsford Housing Authority (CHA) has proven adept at getting matching funds from the state and federal government, it could be argued that the cost to the town can be as little as $7,000 to $8,000 per unit.  The additional cost to the town of buying down 500 additional units to reach 10%, would therefore be over $3,000,000. 

Q:  So, what's the least expensive way to reach 10% affordable housing?  What's the least damaging to the environment?  What requires the least reduction in open space?  And what will yield the lowest adverse impact on traffic, services and the property tax rates in town?
These factors – expense, open space, environmental degradation, quality of life, and taxes – turn out not to be mutually exclusive.  The approach that causes the lowest negative impact on each of these turns out to be buy-downs and redevelopment of existing properties.

For owner-occupied units, the impact of buying down and/or simply deed-restricting existing properties is even more positive than that for rental units.  Remember, if the town helps finance an affordable housing project, say by providing land (something that PCF strongly opposes) and that project has 25% affordable units, only those units are counted.  So only one quarter of the units that are constructed count toward the affordable total for the town.  However, every single unit that is bought down and/or deed-restricted counts 100% toward the total.

However, this low-growth, financially efficient strategy has been strongly opposed by developers and others who continue to insist that a good deal of new construction is necessary.  The current draft of the Affordable Housing Master Plan emphasizes new development as a way to provide more affordable housing. That strategy is not appropriate for Chelmsford at this time.

Q:  Why is it so important to have a Master Plan for Affordable Housing?
The Master Plan allows the town to better guide the nature of development, control the rate of development, and more precisely track the progress of affordable housing against the plan.

Very importantly, the plan shows how the town intends to provide affordable housing, and makes it easier to exclude developers who want to violate town policies for their own profit.  Specifically, when a developer wants to bypass local zoning restrictions under Chapter 40B, the comprehensive permitting process shifts to the state level.  If the town does not have a master plan, it is harder to consistently apply guidelines, and it is harder to convince the state Board of Appeals that a consistent set of guidelines is being applied.  The proposal to sell off Bentley Lane parcels for development underscores the need for a master plan with specific guidelines and specific limits on exceptions to current zoning restrictions and Conservation Commission guidelines.

Q:  Why wasn't a Master Plan created prior to 2005, when the current (still incomplete) draft was created?
No one demanded it.

Q:  Why is the Preserve Chelmsford's Future so concerned with low growth and 50% to 75% affordable requirement for new owner-occupied housing projects?
Chapter 40B provides for 25% affordable units as the minimum percentage to make the developer eligible through state intervention to gain exception to town zoning regulations and conservation commission guidelines.  But such intervention is only to be granted if local guidelines are thought to unnecessarily make the project financially unviable.

The 25% level is too low for several reasons.  First of all, since all new units are counted when calculating the total percentage of affordable housing, it would be very difficult at the minimum percentage for a town to ever reach the 10% total affordable housing goal without growing by 40% or more.  Secondly, profits at that level have been shown to be excessive.  Recent audits by the state's Inspector General of Chapter 40B developments have found that the developers are taking part in a “pigfest” (his words) with profits well over 20% for owner-occupied properties in almost all cases, and above 50% in some cases.  For developers making 50% profit, if the town were to triple the affordable units to 75% for any new housing projects that seek exemption from normal zoning requirements, then the potential impact on the town's loss of open space, environmentally sensitive areas, and overall quality of life (traffic, services, taxes) would be substantial.  Simple algebra tells us that developers would still make close to 20% profit at 75% affordable units and most likely more, since such projects come in for hefty subsidies from the housing authority, the town, the state, and the federal government.  It is not clear why local and state governments would feel that a developer of a $5,000,000 subsidized project needs to walk away with more than a million dollars in profit.

The above analysis assumes that the developer is building a preponderance of single-bedroom units, which are the most profitable.  Developers therefore typically fight efforts to include more two- and three-bedroom units.  The town could offer as a carrot a total affordable unit percentage closer to 50% in exchange for more two- and three-bedroom units.

Given the current situation in Chelmsford overall, and the number of building permits already outstanding, there is absolutely no justification for a threshold under 75% for new developments of single-bedroom units.

Q:  What is the role of the Community Preservation Act (CPA) fund as far as affordable housing in Chelmsford?
The CPA fund plays a critical role, both explicitly and implicitly, in implementing affordable housing strategy and in preserving Chelmsford's qualities as a community.  The strategy used for affordable housing (new construction versus redevelopment and buy downs of existing units) directly and greatly impacts the amount of loss of open space, loss of watershed, and the quality of life issues facing the community.  The CPA fund presents a good opportunity to limit the amount of new development that is needed.

The Affordable Housing strategy that clearly would produce the best result for the town and all of its residents, including those in affordable housing, would be a strategy of buy downs and redevelopment.  However, the issue of funding is problematic.  Although the total cost is much lower than for new development, funding is easier to get for new construction.  For example, it would only cost two or three million dollars to buy down enough existing stock to reach a 10% affordable housing goal.  In other words, the affordable housing dilemma could be completely resolved by a 3 million dollar investment.  By comparison, some 7 million dollars is being spent to build just 50 new units of senior rental housing.  That's because developers have funding sources of their own, as well as federal and state grants for new housing development that are enormous.

The Affordable Housing Implementation Committee needs to do what the consultants who helped create the Master Plan did not do.  They need to identify funding sources for buy-downs and redevelopment, and they need to precisely identify the role of the CPA fund in order to preserve our open spaces, watershed land, and quality of life.  They also need to remove the emphasis on growth and new development from the current plan, which consistently refers to “developing” rather than “providing” housing, and “production” rather than “provision” of new units.  The current draft states that “the donation of town-owned land for affordable housing development… is one of the most valuable contributions a town can make towards the goal of providing additional affordable housing.”  It is certainly a valuable contribution to the developers, but absolutely not to the the town's future or the quality of life for its residents.

Q: Exactly how much of the CPA fund can be used to provide affordable housing?
The CPA fund is specifically required to spend at least 10% of its funds on affordable housing, but the amount can be up to 80%. Therefore, if the town's voters approve the proposal for an additional surcharge on property taxes to further increment the CPA fund, the need for new construction to meet the need for affordable housing could be completely eliminated.  The total of the new proposed surcharge would be under $70/year for even the wealthiest households in Chelmsford, and under $35 for most homeowners.  The state currently matches the funds, so about a million dollars a year would become available for community environmental and historical preservation, and affordable housing.

Preserve Chelmsford's Future strongly advocates that the goal of providing affordable housing should not be used as a pretext for selling off town-owned land to help balance the budget.  The CPA should never be used to “buy” town land (i.e., transfer money to the town's general budget) which is then turned over for development of new units.  Such a strategy is unnecessary and undesirable.