Bipartisan Group of RTM Members Craft Resolution to Modify State Affordable Housing Statute 8-30g

Submitted by RTM members Debbie Appelbaum, Scott Kalb, Wynn McDaniel, Anthony Moor, Henry Orphys, Tara Restieri

By now most Greenwich residents have heard something about “8-30g buildings,” the new, large-scale housing projects that developers have proposed for many parts of town. They’ve prompted questions and conversation about affordable housing, Connecticut state law and local zoning regulations.

As elected members of your town government, we wanted to let you know that the Representative Town Meeting (RTM) will take up a bipartisan resolution we drafted for the March 14 RTM meeting, which recommends actions and state law amendments to better address the needs of vulnerable populations and development oversight in the Town of Greenwich.

Developers are using Connecticut state statute CGS 8-30g as a way to circumvent local planning and zoning guidelines. If built, their developments will affect our environment and our infrastructure for years to come. Our “sense of the meeting resolution” (SOMR) urges our town’s leaders to increase affordable housing, while also calling on our legislative delegation to work with the Governor and the legislature to grant relief from unfair and potentially harmful provisions of 8-30g.

This is a non-binding resolution, but it will send a strong message from the people of Greenwich to Hartford, and may prompt other towns throughout Connecticut to follow suit, since only 31 of the other 169 towns in our state have achieved affordable housing levels that exempt them from 8-30g. 

More than 150 Greenwich residents from all parts of town and representing the broad spectrum of political viewpoints signed the petition for this resolution.

Now we ask that you join in the effort as well. Please read the proposed resolution below. Then attend the RTM’s Zoom meeting on Monday, March 14th to voice your opinion, and write to the Town of Greenwich, our governor and our state legislators, so they know we want action on something that’s critical to our community’s future.

Debbie Appelbaum, Scott Kalb, Wynn McDaniel, Anthony Moor, Henry Orphys, Tara Restieri

Sense of the Meeting Resolution to amend Connecticut’s Affordable Housing Land Use Appeals Procedure (CGS § 8-30g) to better address the needs of vulnerable populations and development oversight in the Town of Greenwich

WHEREAS the State of Connecticut set an affordable housing goal of not less than 10% of a town’s housing units under CGS § 8-30g more than thirty years ago, and if a town has not met the 10% level, the local planning and zoning commission has very narrow grounds on which to amend or deny such projects;

WHEREAS 22% of Greenwich’s residents are Asset Limited, Income Constrained, Employed (ALICE), 21% of its public school students are eligible for free or reduced lunch, 34% of its residents are renters, and 7% of its residents fall below the poverty line;

WHEREAS the Town of Greenwich has 1,380 housing units, or 5.3% of relevant housing stock that qualifies as affordable under the conditions of CGS § 8-30g;

WHEREAS the Town of Greenwich has a number of affordable housing units that are not counted towards the 10% target of CGS § 8-30g because they are not deed restricted;

WHEREAS Greenwich Communities (previously known as the Greenwich Housing Authority), which manages 13 subsidized residential complexes, 225 section 8 (government subsidized) residences and a 40-bed facility for the aged, and has added 18 affordable units at the Armstrong Court property and 11 units at the Adams Garden property, is in the process of renovating the Armstrong Court buildings, which will include the addition of 42 new affordable units, and is planning to add 52 new senior units at Vinci Gardens, and is planning a complete redevelopment of the Quarry Knoll property to consist of at least 225 units;

WHEREAS the Town of Greenwich is currently developing an Affordable Housing Plan to address additional needs and has approved an Affordable Housing Trust Fund which is intended to support further development;

WHEREAS the Town of Greenwich had only received 8 applications under CGS § 8-30g in the past 29 years and now is reviewing 13 housing projects filed by developers under CGS § 8-30g in the past 14 months, with more expected this year, and that under CGS § 8-30g developers may construct buildings substantially in excess of Greenwich’s local zoning limits, as long as 30% or more of the units are deemed affordable;

WHEREAS the combined impact of these projects filed under CGS § 8-30g will have significant negative consequences for the environment and for town infrastructure as developers’ plans would require the clear-cutting of trees, an increase in the amount of impervious surfaces, and could overwhelm the capacity of Greenwich’s wastewater treatment plant, roadways, drainage systems, and schools; and

WHEREAS as of last year only 31 of the 169 towns in Connecticut had met CGS § 8-30g’s 10% target, indicating that the requirements of CGS § 8-30g make it difficult to achieve the affordable housing target of CGS § 8-30g; now therefore, be it

RESOLVED, that the Representative Town Meeting:

  1. urges Town leadership to increase efforts to develop and plan for the affordable housing needs of our Town; and
  2. urges the state delegation for the Town of Greenwich to work with the Governor and the legislature to amend CGS § 8-30g to
    a. cap the volume of CGS § 8-30g projects that must be considered concurrently by a municipality so that the effect of each project on the municipality can be determined before additional projects are evaluated;
    b. expand the list of criteria which local housing commissioners may use in an appeal proceeding defending their decision to amend or reject an affordable housing proposal to include issues such as incompatibility with a Town’s Plan of Conservation and Development (POCD), density, height, traffic, environmental and infrastructure impacts, drainage and sewerage;
    c. allow local municipalities to adopt policies that prioritize affordable housing development rather than allowing private developers to control such policies under CGS § 8-30g; and
    d. review and update CGS § 8-30g’s metrics to better reflect the intent of the original statute.

EXPLANATORY COMMENTS

This SOMR was prepared by a bipartisan group of RTM members to frame a consensus view on how to approach affordable housing and show support for our state delegation’s efforts in the matter.

ATTACHMENTS
Link to state statute CGS § 8-30g
https://portal.ct.gov/-/media/SOTS/regulations/Title_08/030gpdf.pdf?la=en

Link to Planning & Zoning FAQ from the Town of Greenwich (text copied below)
https://www.greenwichct.gov/1878/Greenwich-Affordable-Housing-Trust-Fund

Greenwich Affordable Housing Trust Fund

Background and FAQs

Q: Why is the Town of Greenwich seeking ways to increase its affordable housing stock?

  • Greenwich must increase the stock of affordable housing to meet State goals:
    • State Statute 8-30g requires 10% of each municipality’s housing stock qualify as “Affordable” to avoid penalties of 8-30g.
    • Additional significant penalties may apply in future to municipalities not in compliance with the State law.
  • Advocates argue additional low-income housing is good policy:
    • Seven percent of Greenwich residents earn less than the Federal Poverty Level. Another 22% earn less than the basic cost of living in the area. The United Way 2020 Needs Assessment for Greenwich cited affordable housing as the highest priority. The United Way of Greenwich report on housing in our town provides the data.
    • Greenwich housing prices are high enough to often preclude individuals who work in Town from living here.
  • Advocates argue Greenwich’s current level of low-income housing is unfair:
    • The largest Connecticut cities tend to have the highest proportion of affordable housing, a greater share in Greenwich spreads that burden.
    • This link containing municipal, county and state housing data profiles is a helpful basis for comparison.

Q: What is 8-30g? Why do developers use it?

  • 8-30g is a Connecticut state law that applies to any municipality which, like Greenwich, has less than 10% of its housing units classified as affordable.
    • The law seeks to encourage the development of more affordable housing units by allowing developers to disregard building size, setback and other zoning rules in new developments in which at least 30% of the units are set-aside as affordable. Greenwich has recently seen a number of projects proposed and under development using this rule.
    • Developers rely on the statute to build more market rate units to offset the profit lost from providing the 30% affordable.
    • Allowing developers to build with greatly reduced local control complicates town planning decisions and can impose considerable stress on municipal resources. A detailed explanation of 8-30g can be found here.

Q: How much affordable housing does Greenwich currently have? How much should we have?

  • About 5.3% (1,380 units) of Greenwich housing is considered affordable by the State, just over half the 10% goal.
  • Greenwich would need about 1,140 more affordable units to be at 10%.
    • If only 8-30g is used to increase affordable housing stock, each new development would only bring 30% affordable units.
    • The trust can be utilized to increase that ratio. 
    • Greenwich Communities developments can be up to 100% affordable.

Q: Is the Planning & Zoning Commission able to deny 8-30g applications?

  • In traditional land use appeals, the developer must convince the court that the municipality acted illegally, arbitrarily, or abused its discretion. The 8-30g statute instead places the burden of proof on municipalities.
  • An 8-30g qualifying project can be rejected only if it presents health, safety or other concerns which exceed a town’s need for affordable housing. The courts have not found favorably in regard to most other concerns raised by towns.
  • Projects cannot be rejected for:
    • Incompatibility with a Town’s Plan of Conservation and Development
    • Density
    • Traffic congestion
    • Height
    • Aesthetics
    • Concerns of neighbors or the community
    • Failure to comply with local zoning regulations

Q: Can Greenwich get a “Moratorium” on 8-30g projects before meeting the State’s 10% goal?

  • A municipality is eligible for a four-year moratorium each time it shows it has added affordable housing units, measured in Housing Unit-Equivalent (HUE) points, equaling the greater of 2% of the housing stock, as of the last census, or 75 HUE points.
  • Projects which are approved before effectiveness of a moratorium are allowed to continue.
  • It is unlikely Greenwich can qualify for such a moratorium in the next five years.
    • Greenwich currently has 35 HUE points and would need over 500 points to qualify.

Q: What is considered “Affordable Housing”?

  • Set-aside Development
    • Projects for which 30% of the units are set aside for low income renters:
      • Income of renters is based on State Median Income.
      • 15% of units restricted to 80% State Median Income.
      • 15% of units restricted to 60% State Median Income.
      • Rent can be no more than 30% of income thresholds. These restrictions must be maintained for 40 years.
      • This 30% counts as Affordable Housing for purposes of 8-30g.
  • Assisted Housing
    • Housing whose construction or rehabilitation receives government assistance. 
      • Only a small investment (potentially as small as $25,000) is requires to qualify a project as Assisted Housing.
    • Assisted Housing units qualify as Affordable Housing under 8-30g if they meet the following criteria:
      • Renters must earn less than Area Median Income (AMI).
        • AMI in the Greenwich area is currently about 150% of SMI.
      • Rent can be no more than 30% of AMI.
    • Assisted Housing offers developers significantly more flexibility than Set-Aside Developments:
      • There is no minimum percentage of units which must be low income.
      • Income thresholds to qualify is approximately 1.9 – 2.5x that of Set-Aside Developments.
      • Maximum rent is approximately 1.9 – 2.5x that of a Set-Aside Developments.
      • This increased flexibility allows projects more in line with existing building standards to make sense economically.
      • As an example, consider a project proposed under 8-30g which contains 100 units, 30 of which are Affordable:
        • The Affordable units have rent limited to 30% of SMI.
        • Assume the AHT offers to invest $100,000 in the project.
        • Now, on the Affordable units, the builder can charge 30% of AMI, which is approximately 50% higher than SMI.
        • Because of the enhanced economic (higher rent and $100,000 subsidy) to achieve its target profitability on 30 Affordable units the builder can reduce the size of the project from 100 units to 80 units.
        • The project has been reduced by 20 units with no reduction in Affordable units and only a modest investment by the Trust.

Q: What is not considered “Affordable Housing” under the State law?

  • Housing for dedicated workforces or individuals or provided by private schools for teachers or housing dedicated for municipal employees.
  • Housing rented at higher prices than prescribed limits.
  • Affordable housing which is not deed restricted.

Q: What is the Greenwich Affordable Housing Trust Fund Ordinance?

  • It’s an ordinance being proposed for a second reading at the Representative Town Meeting (RTM) on September 27, 2021. It is Item 4 on the call for that meeting and can be found here.

Q: Does Greenwich also have an Affordable Housing Trust Fund Declaration of Trust?

Q: What is the purpose of the Greenwich Affordable Housing Trust Fund?

  • The trust will provide financial support for developers who are willing to reduce the size or revise other features of a proposed development to align better with local zoning and the existing scale of neighborhoods.
  • The trust will also seek to subsidize the enhancements of or creation of affordability in existing buildings.
  • Where possible, the trust will work to widen geographical distribution of affordable housing.

Q: Why is the Housing Trust Fund being proposed as part of a plan to increase affordable housing stock in Greenwich?

  • The greatest impediment to affordable housing development in Greenwich, as in every community in the country, is simple economics. Rents and prices of housing must be low to qualify as “Affordable” under State statutes.
  • High land prices allow development only at much higher rents and housing prices.
  • While zoning incentives or mandates help drive some affordable development, the most direct and effective way of doing so is for the public and private sector to provide the missing funds necessary to make affordable development economically feasible.

Q: Why is a Housing Trust Fund being proposed now?

  • Developments under 8-30g are increasing.
  • Moreover, in recent years, legislative and public support in the State has been building for pressing towns to expand their affordable housing stock.
  • An unprecedented number of new legislative initiatives were put forward in 2020-21 CT General Assembly session to drive up affordable housing availability.
    • Many of the proposals went farther than 8-30g in depriving local municipalities of the power to manage and direct how housing that includes affordable units is developed.
    • One concept was to implement statewide real estate tax based on municipal affordable housing levels. The cost to Greenwich would have been roughly $30 million per year.
  • Establishing a housing trust fund is one effective first step for Greenwich to increase our affordable housing units and attempt to mitigate the impact of these state legislative initiatives on our community.

Q: Is the Housing Trust Fund consistent with the POCD?

  • The current Plan of Conservation and Development (POCD) has six priority ranked guiding principles.  The second of these is to Develop Housing Opportunities for the Future. This includes Affordable Housing:
    • Residential neighborhoods are the primary building block of the Town, comprising the majority of the land use and acting as the main setting for day-to-day life of most residents. These attractive neighborhoods feature homes integrated within the natural landscape with access to a variety of parks, recreational facilities, waterfront areas, cultural amenities, shopping areas, and community gathering spaces. The Plan focuses on being an “age friendly” community, generating affordable housing that blends seamlessly into the community, and ensuring that residents have more options to age in place, with the housing of their choice and with the comforts that are important to them.

Q: How do the awards work?

  • Awards may take the form of grants, low- or zero-interest long-term loans or other forms of economic subsidy.
    • These economic benefits can be traded for changes in the proposed projects which would make them more in line with Greenwich zoning regulations.
      • In addition, when the AHT invests in a project, the builder can use a regional (local) formula for setting the rent on Affordable Housing units, which would be materially higher than state-wide formulas. This is another economic benefit to a project working with the AHT.
      • The awards will be designed to maximize the units of low-cost housing per dollar invested while keeping the projects as consistent as possible with zoning requirement.
      • Here is how this might work:
        • A builder is considering a multi-family housing project
        • To make the project economically viable, it would have to violate several Greenwich zoning requirements
        • Larger overall development
        • Taller than normally allowed
        • More lot coverage and, thus, less green space
        • Material increases in local traffic
        • The builder is considering using 8-30g to be exempt from zoning requirements
        • The AHT offers the builders a $500,000 grant in exchange for reducing the scale of the project
        • The value of the grant plus the added revenue from higher rent allows the builder to scale back the project to be more in line with Greenwich zoning while still making a profit

Q: Can the trust really have an impact?

  • A grant of $55,000 from the Trust could enhance the affordability of an existing or proposed 1 bedroom apartment for a 40 year period so it can count toward the State goal of 10% Affordable Housing.
    • Based on the 1,140 additional units Greenwich needs to be in compliance with 8-30g, that would imply an aggregate cost of $62.7 million.
  • Allowing Trust-funded projects to use more favorable qualifying rents, the Trust can ensure projects provide the same number of Affordable Housing units while closely meeting current zoning requirements.
  • It is anticipated that other sources of funds or means of addressing this issue will be needed to fully comply with 8-30g.

Q: How would the money be distributed?

  • The Fund would award monies to those projects which best achieve the Town’s goals as articulated in the Greenwich Affordable Housing Plan (GAHP) which will be prepared with broad public input, approved by the Board of Selectmen (BOS) and Representative Town Meeting (RTM), and submitted to the State of CT Office of Policy and Management.
    • Every effort will be made to maximize the number of Affordable Housing units per dollar invested.
    • Every effort will be made to enhance geographic diversity of projects even though the authority to do so is very limited.
  • It is anticipated that whenever possible the funds would be awarded following a competitive process.
  • Whenever $2 million has been accumulated, a Notice of Funds Availability and request for proposals would be issued to the public inviting developers of all sorts to apply for support to specific projects.
  • Funds would be awarded to the project or projects that were determined to best assist the Town in achieving its affordable housing priorities as delineated in the GAHP. A key priority of the Plan will be to retain the as built scale of our community while providing a diversity of housing opportunities.

Q: Are there Affordable Housing Trust Funds in other places?

  •  Yes, In CT, there is no requirement to report municipal Trust Funds to a State agency, but we know at least 5 other towns in CT have funds. The information below from the Housing Trust Fund Project understates the total number of existing funds nationwide but is still useful:
    • “There are 118 city housing trust funds in thirty-four states, bolstered by another 186 jurisdictions participating in Massachusetts’ Community Preservation Act, and 296 communities certified in New Jersey by the Council on Affordable Housing – a total of 600 city housing trust funds.”
  • For a list of city housing trust funds and the agencies that administer them, click here
  • In 2020, housing trust fund revenues generated by cities exceeded $1 billion. The most common revenue source collected by city housing trust funds are developer fees – used by twenty-seven city housing trust funds and all jurisdictions in New Jersey. According to our 2016 Housing Trust Fund Survey Report, the average amount of public and private funds leveraged for every dollar invested in affordable housing by city housing trust funds is $6.00. The highest leveraged reported was $14.00 for individual trust funds. For a list of city housing trust fund revenue sources, click here.
  • Forty-seven states, the District of Columbia, and the territories of Guam and Puerto Rico have created sixty state housing trust funds. For a list of state housing trust funds and the agencies that administer them, click here. For more information, see the section of state-enabling legislation.

Q: How much money is expected to be involved?

  • The hope is that at least every other year the trust is able to deploy $2 million to $5 million.
  • The trust would, however, only be one part of Greenwich’s approach to increasing its affordable housing stock.
    • At an assumed subsidy of $55,000 per unit, the Trust could add about 20-45 Affordable Housing units per year.
    • Since Greenwich needs to add 1,140 Affordable Housing units, this would only be one piece of a holistic solution.

Q: Will the fund be accountable to the public?

  • Yes. All of its deliberations will be held publicly. It will prepare and file annual reports of its activities. There will be annual financial audits and funds will be in the custody of the Town Comptroller.

Q: Who would control the Housing Trust Fund?

  • The fund as proposed would be controlled by a seven-member board composed of Greenwich residents.
    • Director of Planning & Zoning Department
    • Chair of Planning & Zoning Commission
    • Two members of the public with a background/expertise in finance
    • One member of the public with legal expertise
    • Two additional at large members of the public
  • Members of the public shall be nominated by the Board of Selectmen (BOS) and appointed by the Representative Town Meeting (RTM).

Q: Will the Representative Town Meeting (RTM) have authority over the Trust’s funding of projects?

  • The RTM would approve or reject Trust funding in excess of $500,000 per project.
    • It’s important to note, however, that an 8-30g project will most likely go ahead even if the RTM does not endorse Trust contributions to it.
    • The main consequence of failure to approve Trust funding by the RTM could be a larger development more out of scale with existing development.

Q: Why is the approval limit by the RTM $500,000. Don’t other towns have lower levels of authority?

  • The $500,000 authority limit provides the Affordable Housing Trust the ability to act quickly and give developers more certainty on smaller opportunities.
  • A developer can go ahead with an 8-30g project regardless of Trust funding. An efficient streamlined approval process by the Trust will facilitate developer participation and increase the probability of projects more consistent with neighborhood scale, enhanced affordability and more generous green space.
  • Affordable Housing Trust involvement will not enable the Town to relocate or deny the development itself. The main goal is to retain some municipal control over the final outcome.
  • Unlike the trusts of other municipalities with lower limits for approval, the Trust will not currently be using municipal funds.
    • Approval of the Board of Estimate and Taxation (BET) and RTM would be required before municipal funds could be used in the Trust in the future.
    • A “fee in lieu’ of providing Affordable Housing in multi-family projects for developers could be used in the future to fund the Trust and would not be subject to BET or RTM review.
    • This is a State law and cannot be amended by Greenwich.

Q: How would this fund be different than Greenwich Communities, the Town’s housing authority?

  • The proposed Affordable Housing Trust Fund would not own or operate any properties, as Greenwich Communities does.
  • The fund would merely provide financing to support affordable properties.
  • Greenwich Communities is very likely to be one of the recipients of financial support from the trust fund.
    • For more information on Greenwich Communities and its properties, click here.

Q: How would a housing trust in Greenwich be funded?

  • As proposed, the Greenwich Housing Trust Fund will be supported only by private donations. Other municipalities usually have a fee system to enhance their Housing Trusts. For example, some have a surcharge on building permits or development fees; others enable a buyout from inclusionary zoning regulations.
  • Planning & Zoning will explore additional funding avenues if, over the next few years, private contributions do not yield significant balances. Any alternate funding proposal would be discussed in public hearings and subject to all relevant approvals.

Q: What if a developer goes bankrupt?

  • If this were to occur, there would be layers of capital between the developer and the Trust Fund which would replace the bankrupt developer with a qualified solvent one.

Q: Why did Greenwich use the Stamford Housing Trust Fund as the model for its proposed ordinance?

  • After reviewing other Trusts, we concluded the Stamford language was the most comprehensive of the CT ordinances.
  • We have modified our ordinance based on our specific needs, community feedback and RTM review.

Q: What else is Greenwich doing to increase its below market rate housing stock?

  • Greenwich is taking a multi-faceted approach to diversifying its housing offer.
    • Greenwich Communities, the local Housing Authority, makes ongoing investments to expand its housing inventory.
    • Greenwich Building Zone Regulations, section 6-110 requires that all multi-family developments over 4 units include below market priced units.
    • Since 1987, Greenwich has also expanded its housing diversity by allowing accessory dwelling units in single family zones. Please see the Greenwich Building Zone Regulations for Accessory Dwellings, section 6-99.
    • The Planning & Zoning Commission is working with the Board of Estimate and Taxation (BET) to develop other options for greater financial support for below market rate housing.
  • Residents who are concerned with compliance with State law may encourage changes of that law which consider the specific circumstance of Greenwich:
    • Subsidizing housing for local workers should be included in the definition of “affordable housing” even if the wages of local workers exceed state-based thresholds.
    • Units that are not deed-restricted but otherwise compliant with the definition of Affordable Housing should not be excluded.