2020-10-14-AC-STM#2-STM#3-rpt - Laserfiche WebLink

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(DRAFT V4) APPROPRIATION COMMITTEE 2020-2 AND 2020-3 SPECIAL TOWN MEETINGS 7 OCTOBER 2020 assumption is correct, the excise tax revenue would be under $50,000 per year, and possibly less than $10,000 while travel remains limited due to Covid-19. New regulations on short term rentals may also generate expenses related to enforcement,which would offset new revenue. If this article and Article 10 of STM 2020-3 are approved by Town Meeting, we expect that experience in the coming years will allow for good projections of revenue for future fiscal years. Our assumption is that the revenue would, at a minimum, offset any new expenses related to enforcement of the fee. The Committee recommends approval of this request(7-0). Article 2020-2.6 Authorize Special Legislation-Development Surcharge For Community Housing Funds Requested Funding Source Committee Recommendation None N/A Approve(7-0) This article requests authorization for the Select Board to petition the Massachusetts General Court to enact special legislation that would allow a targeted and measured surcharge on specific residential development. The revenue from the surcharge is intended to be used to mitigate the loss of moderate-income housing in Lexington by funding the creation of community housing to address identified housing gaps, such as the need for housing affordable to Lexington municipal and school employees. The residential housing market in Lexington has been strong for the past ten years due to the abundance of high-paying jobs in greater Boston area, proximity to cultural and historical attractions, high-performing Lexington public schools,and a high level of municipal services.With a declining number of buildable lots and an increasing rate of teardowns for existing old homes, residential houses for sale have tended to be- come bigger and more expensive, putting them out of reach for most low- and moderate-income buyers in the area. To mitigate the loss of moderate-incoming housing resulting from the high demand for buildable parcels of land, this article would request legislation to establish a residential linkage fee, "the community housing surcharge,"to be added to building permit fees for all new single- and two-family residential construction where an existing single- or two-family dwelling had been demolished. The Select Board would determine the rate of the community housing surcharge. That rate would apply on a per-square-foot basis depending on the certified total gross floor area of the structure or structures per- mitted by a building permit. The Select Board would evaluate and adjust the rate of the community housing surcharge for inflation annually. A revision to the surcharge policy and rates would be made, if necessary, every five years by the Select Board pursuant to a report from the Town Manager. The Select Board would be authorized to adopt additional requirements, exemptions, and regulations to implement or enforce the community housing surcharge. The Committee notes that the article does not specify a limit on the magnitude of the surcharge, but this could be amended by the Select Board. The building commissioner of the Town of Lexington would not issue a certificate of occupancy for a building until the applicable community housing surcharge required was paid in full. Alternatively, an ap- plicant intending to reside in the new home may opt to add the surcharge to the real estate taxes on the property with 0%interest. In this case,payment of the surcharge would not be required until the sale of the home to a third party. In addition, starting from the date of the certificate of occupancy and as long as the home is not sold, 20% of the original surcharge will be abated each year until the amount due on the 7