2024-02-08-AC-min - Laserfiche WebLink

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2/8/2024 AC Minutes 2 Ms. Tung stated that the first Special Residential District (SRD) application was received recently, which could provide an opportunity to buy down one or more units to make them affordable. Mr. Bartenstein asked if the dwelling units in the new properties mentioned in Ms. Tung’s memo- randum would be operated as rental units or offered for purchase by qualified people. Ms. Tung and Ms. Kowalski responded that the units on Mass Ave. and Woburn St. would be rentals. Mr. Bartenstein asked if the AHT had a long-range plan regarding the kinds of affordable housing to be created. Ms. Tung replied that the AHT is a financing entity only while operational decisions are in the hands of LexHAB. She continued that the AHT could investigate the possibility of doing buy downs in new construction done under the new MBTA Communities zoning bylaw, and could help to maintain the existing stock of affordable housing by subsidizing repairs or repurchasing af- fordable units. Mr. Parker asked for clarification of the term, “buy down”. Ms. Prosnitz stated that in SRD or MBTA zoning developments, projects will be built with 15% or 10% of the units being affordable, typically resulting in one affordable unit. A buy down by the AHT can improve the affordability of a unit by making it available to households with lower incomes, or it can convert a market-rate unit to an affordable unit. A buy-down would typically result in an affordable housing deed restriction on a unit rather than the purchase of a unit. Mr. Levine asked if a “buy down” was a one-time payment or a recurring payment. Ms. Prosnitz re- plied that it could work several ways, such as an up-front payment to the developer or as an annual rent subsidy to a tenant. While it would be subject to negotiation with the developer, she did not be- lieve it would result in an annual subsidy of the developer. Mr. Ahuja asked if agreements with developers would be in perpetuity, or at least for the life of the building. Ms. Prosnitz replied that there would be long-term deed restrictions on the affordable units, which, among other things, specify what happens if a building must be demolished, and also provide affordability protection for residents living in the units. Mr. Padaki stated his appreciation for the memorandum from Ms. Tung, which had answered some of his earlier questions. He asked about a $950,000 purchase, of which $550,000 was provided by the AHT, and he wanted to know how the remainder was funded. Ms. Tung replied that the remain- ing $400,000 came from LexHAB, which it received as pre-funding from the CPC in the prior year. Mr. Padaki asked about potential sources of revenue for the AHT other than CPA funds, such as state or federal grants, and the payments-in-lieu of taxes (PILOTs) from Brookhaven. Ms. Tung re- plied that there were no other sources besides the CPA and PILOTs at the moment, but under the SRD a developer may have the option to make a payment-in-lieu of building an affordable unit, which would flow to the AHT. There are two home-rule petitions pending in the state legislature that would impose a surcharge on large commercial property developments or residential redevelop- ments. A local option for a real estate transfer tax has been proposed that would generate fees for the AHT if Lexington adopted it. Mr. Parker asked if federal or state grants would be available. Ms. Tung replied that no federal grants were available for the AHT, but the Governor’s proposed housing bill might eventually make some funds available for affordable housing that intersect with the AHT’s work. Mr. Bartenstein asked about the amounts for the AHT in the CPC’s 5-year plan and also about the AHT’s views on how they will set such annual funding requests from the CPA in future years. The funding requests could fluctuate according to the projects in a near-term plan, or it could adopt a regular investment approach with relatively steady annual funding requests. The latter would allow