2024-05-13 SB Packet - Released - Laserfiche WebLink

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"�``' Town of Lexington -�� �" � ��. � LAND USE HOUSING AND DEVELOPMENT DEPARTMENT �W�=� � � > > �`r �e� .�� �,•,"` Carol M. Kowalski,AICP,ICMA-CM TeL (781)698-4561 Assistant Town Manager for Developinent Cell: (781)860-2219 �°1s�P�.Urp,��p,��r��G�bm=a��, m��r�ae p� MEMO TO: Select Board, Jim Malloy FROM: Carol Kowalski DATE: May 2, 2024 RE: May 13 Select Soard discussion, Waiving fees as source of affordable unit buy-down funds Cc: Affordable Housing Trust; Liz Rust, Director, Regional Housing Services Office; This memo is provided to assist the Affordable Housing Trust,the Select Board and the Town Manager in considering a policy of waiving a portion of fees in order to buy-down a portion of developers' costs to a)produce an additional affordable unit in new multi-family developments, or b) deepen the affordability of required affordable units in new multi-family developments, or c) create a 2-bedroom affordable unit from a required 1-bedroom affordable unit, or a 3-bedroom from a 2-bedroom affordable unit, in multi-family developments. The Affordable Housing Trust adopted a policy September 28, 2023 (attached) to use Trust funds for buy-downs. An additional source of funds for buy-downs is fee-waivers, such as Building permit fees. Consideration could be given to: 1) Waiving the pro-rata portion of Building and other permit fees of an affordable unit 2) Waiving fees of all the affordable units in the development 3) Waiving all fees in the development up to a given maximum(e.g., $100,000) to achieve the additional affordability. Waiving the pro-rata portion of development fees for a single unit would likely yield $10-20,000 thousand dollars—not enough to sufficiently offset the developer's loss to achieve additional affordability on its own. Waiving fees for the affordable units in developments with 5-10 affordable units, ar waiving all fees for all units in the development up to a given maximum, could potentially yield$50,000-$100,00. This could be more effective in negotiating the additional affordability with a developer for an additional unit, deeper affordability, or the difference between a 1-bedroom and a 2-bedroom (or a 3-bedroom and a 2-bedroom) affordable unit. Examples: Using Building Permit fees as examples, the following are all of Lexington's current Building Permit and related fees: Building Permit Fees: Valuation shall be the estimated value of construction as determined by the Building Commissioner. Town, County, State or Federal buildings are exempt from fees. Buildin�permit fees, Multi-family $15 per$1,000 of the value of construction as determined by the Building Commissioner. Multi-family Sheet metal&Mechanical permit fees,Multi-family $15 per$1,000 Plumbing and Gas permit Fees, Multi-family $150 for the first Fixture plus$15 for each additional fixture 1