Friday, November 26, 2004
Can Carlisle lose its affordable units?
Earlier this month the Carlisle Board of Appeals (BOA) attached a rider to the deed for the affordable units at Laurel Hollow, the 40B development under construction at 302 Lowell Street, which changed the duration of affordability for the units. This brings to light the possibility that an affordable ownership unit may lose its affordable status and convert to a market rate unit. As Carlisle struggles to meet the state-mandated minimum of 175 affordable housing units (we have 18), is this deed rider a concern?
In October 2003, the BOA granted a comprehensive permit to developer Michael Kenny to build Laurel Hollow, an eight-unit development on a four-acre parcel, where two of the units qualify as affordable housing. A Massachusetts law known as Chapter 40B permits developers to build higher density housing than allowed under local zoning bylaws, as long as 25% of the units are affordable. These units may only be sold to "qualified buyers," those earning no more than 80% of the median income in the region, or approximately $60,000 per year.
Originally the deed stated that the units must remain affordable in perpetuity. The rider, added on advice of BOA counsel Richard Hucksam, states that once an eligible person buys one of the units and wants to sell it, there will be a search for a qualified buyer, by a monitoring agent. If a qualified buyer cannot be found in 90 days, the affordable unit may be sold at market rate, with the monetary difference given to the town to be put into their affordable housing fund. The town also has the right to purchase the property at the affordable price. Under some circumstances, the resale effort may be extended another 90 days, for a total of approximately six months.
Although The BOA considers this an unlikely situation, it is theoretically possible for an affordable unit at Laurel Hollow to lose its affordable status. Attorney Phyllis Zinicola, a member of the Carlisle Planning Board and the Benfield Task Force, recognizes this possibility but points out that it provides "a balance of the rights of the towns and the rights of the homeowners." She also believes that the monitoring agency, CHAPA (Citizens Housing and Planning Association.) is "a great organization with tremendous experience in locating affordable buyers."
But what if Murphy's Law prevails? If no qualified buyer is found, Carlisle has the right to purchase the unit before it reverts to market rate. However, it may have to do so very quickly. There may not be sufficient time to call a Town Meeting and Town election, which may be necessary if the town needs to bond the purchase.
Alternatively, if the unit is sold to a non-qualified buyer, the town will receive the difference between the affordable price and the market price. While in this real estate climate one would expect the monetary difference to be substantial, it is not clear that the seller must sell at true market value. Is it possible that the seller, who has little to gain, may unload the unit well below market value and the town may gain little?
Other 40B developments
As the market for million dollar homes slows, as the high density 40B project becomes financially more attractive, and as the state begins to play hardball on affordable housing, Massachusetts towns, like Carlisle, are attracting more developer-sponsored 40B projects. A comprehensive permit application for a 40B development off Maple Street, known as Carlisle Woods, is currently before the BOA. In addition, the Benfield Task Force is working to place up to 26 affordable units on the town-owned Benfield Land off South Street. (See page 1.) Will all 40B developments be required to carry the same deed rider as Laurel Hollow?
If they are affordable ownership units, Hucksam and the BOA believe they will. Says Hucksam, "It is difficult to say what requirements will be applied to future units. It appears likely that a similar project, subject to approval by MassHousing, would be subject to a similar deed rider pursuant to MassHousing requirements."
Attorney Greg Peterson, member of the Carlisle Conservation Foundation, is not sure that a rider of that form is mandatory. Peterson points out that deeds for affordable housing in Cambridge state only, "You must sell to a qualified buyer," making them affordable in perpetuity.
Zinicola suggests, "One way to avoid these issues [on the Benfield Land] is to have a rental project."
There is no consensus either on the magnitude of the threat nor the best solution for Carlisle at this time.
© 2004 The