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Building Affordable Homes - Obstacles & Options Read about... (Are you a developer interested in developing affordable homes? Contact Rhode Island Housing at 457-1234.) Obstacles that Delay Affordable Housing Rhode Island's Super-High Cost of Land Slow Permitting that Eats Up Profitability It doesn’t have to be this way. Quality projects and fast permitting are compatible, others have proved. In the rapidly growing vicinity of Dartmouth College, for example, permitting is now as quick as six weeks. It’s almost never more than a year. (But they have a secret: “pre-rated housing proposals.” For more information, See below.) Slow permitting makes affordable housing especially unattractive for commercial builders to attempt. Already-lean profit margins shrink while the clock runs and interest payments on the land purchase continue. Slow permitting is one reason big, expensive houses are so popular. “McMansions” are the only projects that yield enough profit so a developer can survive the long wait until a payday. Exclusionary Zoning Restrictions of this kind can include minimum lot-size requirements, floor area ratios, land use-intensity ratios, setback and yard requirements, minimum house-size requirements, ratios comparing number and types of housing units to land area, limits on units per acre and other means. Since the 1960s there has been a desire to control sprawl and “suburbanization” (translation: new developments full of kids and houses). Density became something of a dirty word, outside urban areas. In the 1970s towns like Foster passed large-lot minimum zoning requirements (4.6 acres). Among other reasons: a wish to “preserve the rural character of the town.” If that was the aim, it missed. The town is rapidly filling with houses, many modest (it’s all anyone can afford after buying the land), each on its own deep 4.6 acre lot with the required 300-foot frontage. It might not be intentional, but exclusionary zoning has a predictable result: it shuts out low- and moderate-income families from a community.
Building Affordable Homes: Proven Options That Help Build More Affordable Housing Smart Growth Principles Everyone from the U.S. Environmental Protection Agency (which sees a health benefit) to urban planners to small towns feeling the effects of encroaching sprawl have embraced Smart Growth principles. Key: the intelligent use of density. Smart Growth argues for compact residential centers that take advantage of existing infrastructure. It argues against sprawl and ever-longer commutes. And the Smart Growth movement is fiercely interested in preserving as much open space and character as possible. Which in many towns means entertaining ideas like cluster housing. Growth happens, of course, whether communities want it or not. The smart ones plan for it, and many rely on Smart Growth principles. Innovative Land Use that Breaks the Cookie-Cutter (and Preserves Open Space)
Sell the House, Lease the Land In a typical housing land trust, the nonprofit developer holds the land in perpetuity, selling structures but not the land beneath them. The homeowner leases the land through a long-term (usually 99-year) renewable lease. The land lease typically requires that the home be sold either back to the trust or to another lower-income household, and for an affordable price. In 2004, Rhode Island’s nonprofit Housing Network incorporated a statewide land trust. Seven Housing Network members, all nonprofit housing developers, already have land trusts of their own. For more information on the statewide Community Housing Land Trust, see www.housingnetworkri.org. Trade cluster development for open space Leading developers have already brought cluster development to Rhode Island. In Woodridge Estates, a development of 26 affordable homes opened in 2004 by Woonsocket Neighborhood Development Corporation, the use of cluster development permanently preserves seven out of ten acres of the wooded site as open space. For more information, see Glossary.
Good Ideas from Other Places Expedite the review process (a.k.a. comprehensive permitting) Rhode Island already does this. It’s an idea borrowed from Massachusetts. The Bay State found that so-called “comprehensive permitting” was a key means to overcoming unreasonable resistance to the construction of affordable housing.
Comprehensive permitting gives reputable affordable housing developers a second chance when local boards deny their proposals or load them up with costly demands.
In Rhode Island, we have the State Housing Appeals Board (SHAB). SHAB is the court of last resort for developers frustrated at the local level. If SHAB finds that, in fact, the developer’s proposal is consistent with the municipality’s approved affordable housing plan (among other criteria), the board can override the municipality’s objections and grant approval for the development to proceed. Inclusionary zoning in new development So-called “mandatory inclusionary zoning” requires developers to provide a percentage of affordable units (or payments in lieu). According to the National Association of Realtors, mandatory inclusionary zoning “is intended to create a private sector subsidy for the construction of affordable units, generally by distributing the cost of affordable units among market rate units.” Voluntary inclusionary zoning, on the other hand, offers incentives for developers to participate. Incentives such as density bonuses help offset the costs to the developer of building less-profitable affordable units. Pre-rated housing proposals A state-created housing trust fund Government-created housing trust funds became popular in the late 1980s. Many are funded through ongoing revenues from dedicated sources such as taxes, fees or loan repayments. Today, there are more than 350 housing trust funds in cities, counties and states. In Pennsylvania alone, 51 of 66 counties rely on County Housing Trust Funds to support homeownership for those below median income, senior housing, new development, “Brownfields for Housing,” maintenance and rehabilitation of older housing stock.
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