Why Should Arlington Have an Affordable Housing Trust Fund?

Text of Warrant Article 8: (To be considered at Special Town Meeting (Virtual), Mon. 11/16/20 at 8:00 p.m.)

“ARTICLE 8 ACCEPTANCE OF LEGISLATION/BYLAW AMENDMENT/ MUNICIPAL AFFORDABLE HOUSING TRUST FUND

To see if the Town will vote to accept Massachusetts General Laws c. 44 § 55C, to authorize the creation of a Municipal Affordable Housing Trust Fund to support the development of affordable housing in Arlington, establish a new bylaw for the administration of same; or take any action related thereto. (Inserted by the Select Board)”

What will it do? How will it work?

A Proactive Step to Address Housing Affordability. With a municipal affordable housing trust, Arlington will join more than 113 Massachusetts municipalities that have formed a housing trust fund to support a proactive strategy for building housing affordability. The Trust is a small step the Town can take to more proactively address the housing affordability crisis that challenges many of our current residents and makes Arlington increasingly inaccessible to new residents. Creating affordable housing can also be a strategy for maintaining or increasing diversity.

Ability to Act Quickly.
A primary benefit of a housing trust is to enable the Town to act quickly to support or participate in transactions that increase or preserve affordable housing in Arlington. Without a Trust, the Town does not have the flexibility or agility to act quickly. Following are some examples, though there are many other ways that trusts can and do advance housing affordability:
• Financing the acquisition and/or development of market properties for conversion to affordable housing by a nonprofit developer;
• Purchasing an existing affordable home to ensure resale to another low income buyer, or purchasing a market rate home to create an affordable homeownership opportunity;
• Providing flexible financing to increase the number of affordable units or reduce income levels in existing or new projects that include affordable housing.

Developing a Housing Trust Strategy Over Time.

The strategies to be pursued by the Trust would be set forth by the Trustees in a plan or proposal(s) they would lay out after they are appointed, most likely after/through a process of public engagement. The specific strategies are, deliberately, not part of the warrant article or the Bylaw proposed for adoption. This allows the Town the flexibility to set and modify the Town’s housing strategies over time, in a manner that is responsive to the public and its elected representatives. The Bylaw requires the strategy or plan, and most major Trust decisions, to be approved by the Select Board, and Town investments in the Trust would still require Town Meeting approval.

Funding the Affordable Housing Trust Fund.

Creating affordable housing requires substantial subsidy. The Trust’s ability to cause more affordable housing to be created or preserved in Arlington will be directly related to the availability of resources to fund it and leverage additional state and federal resources. The vote before the Special Town Meeting this fall will not provide any funding for the Trust.

While it is anticipated that the Trust might receive initial funding via a grant of Community Preservation Act funds from the CPA Committee, to increase our impact, more resources will be needed.

How Other Communities Fund Their Housing Trust Funds.

The Community Preservation Act is the most common source of funding, but the most impactful trusts tend to have a variety of funding sources that result in a steady flow of financial resources into the Trust. Other municipalities have tapped into a variety of additional sources, including inclusionary zoning payments, federal HOME funds, voluntary/negotiated developer payments, proceeds from sale of tax foreclosed or other Town-owned properties, cell tower payments, cannabis-related revenue, short-term rental fees, fees for managing housing lotteries, sale of bonds, general municipal funding, and private donations. Many also donate excess town property to their housing trust for sale and redevelopment as affordable or mixed income housing. More recently, a number of cities and towns have proposed home rule petitions that would allow them to impose a small fee on the transfer of real property to fund their housing trusts, and there is state legislation proposed to authorize cities and towns to impose such transfer fees without sending a Home Rule Petition to the state legislature.

Building Trust Resources Through a Transfer Fee.

The Housing Plan Implementation Committee originally recommended that Town Meeting adopt a bylaw creating a housing trust and create a funding source for it by voting to authorize the filing of a home rule petition to impose a modest real estate transfer fee. Although the Select Board elected to defer consideration of the transfer fee until 2021, such a fee is attractive to many, because it would be borne only by those selling their Arlington homes or properties, and because it provides a mechanism to capture a very small portion of the extraordinary equity increase that Arlington property owners have realized over many years due to regional market forces. The details of such a fee are important and merit further discussion, but it presents a promising potential revenue source to empower the Trust to be proactive.

The Process.

The article in front of the Special Town Meeting would start the process of creating a municipal affordable housing trust. Once approved by Town Meeting the Affordable Housing Trust Bylaw would be submitted to the Attorney General to certify its consistency with the state law governing housing trusts within 90 days. Once so certified, the Town Manager will appoint trustees, including at least one member of the Select Board. Once these appointments are confirmed by the Select Board, the Trustees themselves would lead the process of proposing an initial set of goals and strategies for the Trust to implement, after approval by the Select Board.

Financial Stability & Accountability.

The Trust will be governed by the MAHT law passed in 2005 that specifies powers and limitations for trusts of this type. The proposed Bylaw has been reviewed and modified pursuant to suggestions of the Finance Committee to ensure accountability and financial stability. The Trust will be managed by the Treasurer, will be audited annually, will have legal and practical limitations on its borrowing capacity, and will not have the power to pledge the full faith and credit of the Town.

To learn more about municipal affordable housing trusts, refer to the MHP Municipal Affordable Housing Trust Fund Guide, v.3

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This information was prepared by Karen Kelleher, Arlington Town Meeting Member, Precinct 5, Member, Arlington Housing Planning Implementation Committee and Executive Director, LISC Boston ( Local Initiative Support Corporation)

2020 TM Affordable housing Arlington Affordable Housing Article 8 Karen Kelleher MAHT town meeting Trust Fund Warrant article

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Housing

In Support of the Tenants of 840/846 Massachusetts Avenue

Equitable Arlington, along with City Life/Vida Urbana and the Harvard Legal Aid Bureau, supports the legacy tenants of 840/846 Massachusetts Avenue in their resistance to rent increases of up to 50%. We urge the buildings’ owner, Torrington Properties, to continue negotiating an agreement with the tenants rather than pursue legal action likely to end in housing court. If more gradual increases are incompatible with Torrington’s business plan, we hope to see the sale of the property to the Housing Corporation of Arlington or another buyer who is committed to keeping the existing tenants in their homes.

The property, whose two larger buildings date to 1940 and 1963, faces Arlington High School, within easy reach of shopping and transit. It occupies one of relatively few spots in Arlington where people can live without a car. (Equitable Arlington and the MBTA Communities plan seek to encourage exactly this kind of housing.) Many of the middle- and lower-income tenants have been there for decades, including teachers, musicians, and some Section 8 voucher recipients. Some are immigrants with limited English. Laura Frost, who has lived there for 20 years, describes the apartments as “unofficial,” and therefore legally unprotected, affordable housing. Erica Schwarz, executive director of the Housing Corporation of Arlington, concurs: “There are so few places where low-income tenants are in units that aren’t restricted.”

When Torrington Properties bought the buildings in 2019, it did not raise rents right away. Instead, the company pursued a familiar strategy of remodeling apartments when tenants moved out and then marketing them as “luxury” units. More recent arrivals are paying typical market rents. Of the longtime residents, several have left because they were worried about being pushed out to make way for more remodeling and steep rent increases, says Frost, who leads the tenants’ association. All have been tenants at will since Torrington bought the property, with their rents not rising but also not guaranteed by 12-month leases. In November 2022, she says, Torrington distributed a list of target rents for all of the units. A few months later, it informed legacy tenants, then about 20 in number, that they needed to either sign leases at the new rates or move out.

“Our position was never ‘You can’t raise rents ever,’” says Frost, who recognizes that Torrington can legally set rents at any level. Working with City Life/Vida Urbana, she hoped for an agreement for more gradual rent increases, like the one Torrington had just reached with tenants near Forest Hills in Boston. By last spring, however, negotiations had broken down. A rally she organized in September drew Reps. Garballey and Rogers. In February, Torrington sent the legacy tenants notices to quit. We are encouraged that negotiations have since resumed. At the same time, we support a more sustainable option for these tenants and anyone who lives there in the future, as well as Arlington as a whole: a commitment, perhaps by a new owner, to keeping some units affordable in the long term.

Schwarz, of the Housing Corporation of Arlington, has discussed purchasing the property from Torrington, which named a price she describes as “a few million dollars more” than HCA can offer. She has been exploring alternative ways to structure a purchase. This would include drawing on the Town of Arlington’s ARPA funds, as well as seeking mission-aligned equity partners for the project under a “mixed income” model. This would not displace any current tenants, but would, over time, provide a very high percentage of affordable units at a range of income levels, while also providing middle-income and market rate units.

Equitable Arlington supports common-sense reforms that allow for more housing options and tenant protections for current and future Arlington residents. We support increased funding for affordable housing, both through the Affordable Housing Trust Fund and state and federal subsidies, and a wider range of housing choice for every income level and every life stage. We also champion housing that is sustainable, equitable, and accessible, including locating additional housing near public transportation, all of which we believe will make Arlington an even more welcoming community.

Affordable housing Arlington Housing housing affordability

Written by Nicole Gustas March 17, 2024

The Gentrification of Arlington

(Comments presented to the Arlington Redevelopment Board and Select Board during a public hearing on Jan 13, 2020)

Steve Revilak, 111 Sunnyside Ave. In the interest of disclosure, I live in market rate housing that was built by a developer. Among Arlington residents, I’m not unusual in that regard.

At the end of December, a friend sent me an article that appeared on Redfin’s blog, which ranked the most competitive real estate markets in 2019. Out of 20 listings, three were neighborhoods in Arlington: East Arlington at #3, the Brattle Street Area at #5, and Arlington Center at #12. This is only one data point, but Redfin is a national realtor and works in markets all across the country. Arlington is a desirable place to live.

Housing costs have steadily increased over the last 20 years, modulo a brief reset during the economic recession of 2008. For example, the prior owner of my house purchased it for $151,000 is 1999. I purchased it for $359,000 in 2007 (when it was assessed at $287k). Today, it’s assessed at $501k, which is consistent with similar home sales from 2018.

The net effect: each year a new family moves to town, they have to have a more money (or be willing to spend more on housing) than a family who moved in the year before. With that in mind, I’d like to cite a few figures from the 2019 Town Survey:

Question 37: Indicate the number of years lived in Arlington. 59% of respondents indicated 15 years or less. Nearly 30% indicated five years or less. Despite the prices, people still move here.
Question 40: What was your annual household income in 2018. The most common response was “more than $200,000”, with over 28% answering that way. Nearly 71% of respondents indicated earning $100,000/year or more. Arlington’s median income is likely higher than HUD’s AMI for the Metro Boston area.
Question 41: What is the highest level of educated completed by a member of your household. Over 73% indicated having a masters degree or higher.

I don’t mean to knock people who’ve lived here 15 or fewer years, have advanced degrees, or have household earnings of $200,000 or more per year. I check every single one of those boxes myself. But I do want to point out that we are a highly educated and affluent community. Put another way, we have a population that matches the cost of our housing.

Twenty years of gentrification haven’t killed us: we’ve expanded town staff and services, we’re renovating public buildings, and we’re getting a new high school. Those are all good things, made possible because residents have the money to pay for them, and have been willing to do so.

We can absolutely keep the status quo we’ve had, but I want to recognize that the combination of the housing market and Arlington’s policies have created an economic barrier to living here. I see two issues: one is affordability, and the other is an imbalance between supply and demand.

There are a variety of things we could do, and I think we should consider all of them. I don’t see a viable way to relieve housing pressure that doesn’t involve more housing. And that’s what I hope we can do over the coming years: find ways to build more housing.

gentrification housing affordability

Written by Steve Revilak January 28, 2020

Arlington 2020: the Cost of Low-Density Housing

This is the second in a series of “Arlington 2020” articles. The first article looked at the number of one-, two-, and three-family homes and condominiums in Arlington, and how that housing stock has changed over time. This article will examine changes in the value of those properties. We’re going to look at “value” through the lens of property assessments, so we should start with an explanation of what property assessments are and how they’re used.

A property assessment is simply the Town Assessor’s best estimate of what a property is worth, based on market values. The assessor’s office inspects properties every ten years; during intervening years, assessments are adjusted based on sale prices of similar homes in a given tax neighborhood. For all practical purposes, assessed values tend to trail market values by two years. In my neighborhood, property assessments are spot on — my house was assessed at $501,000 in 2020; during 2018, sales of similar homes in the neighborhood ranged from $495,000 to $520,000.

Condominiums have a single assessed value, which includes land and buildings. Otherwise, assessed values are broken down into land value, building value, and yard items (e.g., a garage or a shed).

Assessed values are used to determine the tax rate. The assessors page on the town website has calculations in worksheet form, but for all practical purposes, it’s just a division problem. One takes the total tax levy and divides by the sum of all property assessments (in thousands of dollars), and that’s the tax rate. An individual’s taxes are the assessed value of their property (in thousands of dollars) multiplied by the tax rate. If an individual owns (say) 1% of the assessed value in town, that individual will pay 1% of the property tax levy.

The main point is that assessed values are based on market values, but with a two-year lag. Consequently, we can use them as a way to see how home prices have changed over time.

With that background information out of the way, we can look at some numbers. Here’s a graph of the median assessed values for condominiums, one-family, two-family, and three-family homes from 2013 through 2020. (the “median” is a value such that half of the assessments are above, and half are below).

Graph of Median assesed values by year and housing type

year	Condominium	Single Family	Two-family	Three-family
2013	$297,800	$472,850	$532,650	$581,600
2014	$300,150	$484,400	$530,000	$574,800
2015	$318,200	$507,900	$572,000	$616,300
2016	$351,050	$546,300	$623,150	$673,550
2017	$357,750	$581,200	$663,900	$714,800
2018	$395,400	$618,800	$732,100	$787,600
2019	$463,250	$701,550	$851,200	$897,500
2020	$473,100	$771,900	$944,000	$1,010,850
%change	58.87%	63.24%	77.23%	73.81%

As one would expect, two-family homes are worth more than single-family, and three-family are worth more than two. Condominiums have a lot of variety; they could be half of a duplex, or a single unit in an apartment building. But a general upward trend is clearly evident.

These values are straight out of the assessor’s database, and not adjusted for inflation. The Bureau of Labor Statistic’s inflation calculator shows 12% inflation between 2013 and 2020; the %change is pretty considerable, even if one deducts 12% for inflation.

Next, I’d like to dig further into the 1–3 family assessments, by breaking them down into the value of land vs the value of buildings, and showing how that’s changed over time.

Single-family homes:

year	Land value	Building value	Total assessed value
2013	$243,700	$226,300	$472,850
2014	$253,750	$227,050	$484,450
2015	$272,700	$229,900	$507,900
2016	$296,400	$243,950	$546,400
2017	$326,400	$246,400	$581,250
2018	$360,900	$248,100	$618,800
2019	$440,400	$250,400	$701,600
2020	$448,600	$316,300	$771,900
%change	84.08%	39.77%	63.24%

Two-family homes:

year	Land value	Building value	Total assessed value
2013	$202,500	$320,550	$532,650
2014	$212,250	$307,800	$530,000
2015	$256,400	$309,800	$572,000
2016	$262,500	$349,400	$623,150
2017	$307,000	$350,700	$663,900
2018	$352,500	$373,900	$732,100
2019	$478,300	$374,850	$851,700
2020	$454,500	$486,100	$944,000
%change	124.44%	51.65%	77.23%

Three-family homes:

year	Land value	Building value	Total assessed value
2013	$200,100	$377,900	$581,600
2014	$209,100	$364,100	$574,800
2015	$249,800	$366,550	$616,300
2016	$259,950	$412,350	$673,550
2017	$298,100	$412,500	$714,800
2018	$343,050	$438,800	$787,600
2019	$459,000	$440,100	$897,500
2020	$440,100	$578,450	$1,010,850
%change	119.94%	53.07%	73.81%

There are several things worth pointing out in these breakdowns.

First, note that the land and building values “jump” a bit between 2019–2020. 2020 was one of our full reassessment years, so I’m willing to attribute this to a periodic course correction. The total increase is generally linear, but the land/building composition has changed.

Second, the median land value for single-family homes is higher than the median building value, for all years between 2013–2020.

Third, most of the increases come from changes in land value. I believe this comes down to location, location, and location. Arlington has a well-respected public school system, and it’s close to universities and tech centers is Cambridge and Boston, and office parks in Lexington, Waltham, and Burlington. City amenities are close at hand.

So what does one do about our rising home prices, and in particular, the rising value of land? The first (and perhaps default) answer is to do nothing. Rising property values are a boon to homeowners who purchased a capital asset (i.e., a house) in the past, and have seen its value appreciate over time. The downside of doing nothing is that each year, increasing housing prices create an ever-increasing income threshold for new residents.

An alternative approach would be to allow more (and smaller) units to be built on each lot. This requires reconstruction or redevelopment, but it allows the cost of land to be amortized among several households. More units/lot means more people and more density, but it reduces the income threshold for buying in to Arlington. (Note that the per-unit cost for three-family homes is lower than the per-unit cost for two-family homes. Similarly, the per-unit cost for two-family homes is lower than the cost of a single-family home).

A third article will look at the distribution of housing prices in Arlington, and how the distribution varies by housing type.

Here is a spreadsheet of data shown in this post.

assessors data housing affordability

Written by Steve Revilak October 4, 2020

Show Your Support With a Free Yard Sign!

Written by Equitable Arlington September 7, 2023

Arlington & Exclusionary Zoning History

Written by Guest Writer August 5, 2019

Progressing the Cause of Affordable Housing

(Elliot L. is an 8th grader at the Ottoson Middle School)

In the middle of COVID-19, I started to notice a large construction project happening right down the street in our little neck of the woods by Thompson school. I simply assumed it was another apartment building, but after asking the adults of my community, I found it was much more impactful than that. Arlington was supporting a large affordable housing project to be established, along with plans of putting Arlington EATS, a food pantry, below it. This got the gears in my tiny sixth grade mind churning. I began asking questions like: how do you apply to live there? How much does it cost? Do the owners provide you with furniture? Of course, most of those questions were answered by my parents, and then quickly put in the back of my mind. However, the idea of affordable housing stuck with me, especially when you can see it from your front porch. Upon reaching the 8th grade, where I am now, I found myself and every student in my class presented with a year long project trying to make change in Arlington. This assignment, called the Civics Action Project, or CAP, guides students to choosing a local issue they wish to address.

The premise got me thinking. How can I help my community with our rising cost of living and need for affordable housing? Initially, the other students and I were overwhelmed by the magnitude of the issue, and had trouble thinking of a reachable solution.

Despite this, a small group of classmates and I were intrigued by a bill mentioned by Claire Ricker, Arlington’s director of Planning and Community Development, during an informational panel. Ms. Ricker talked about the MBTA Communities Act, a law requiring Arlington to create higher-density housing near the T. We knew we had found our goal, to raise awareness and support zoning for affordable housing as part of the act.

However, as our research continued, we learned of the real function of this legislation. The goal of the MBTA communities act is to build more compact middle income housing. This will make it so people like young adults and downsizers can come to live in this town, building their future and contributing to a diverse community. This is an essential step in the right direction for the town, but our strides need to be longer.

In order to support our goal, we still wanted to learn more about Arlington’s affordable housing needs. We wanted to promote those issues, as well as the missing middle housing we desperately need. Our group started by conducting a survey that we posted on Arlington forums, along with directly sending it to as many people as we could. 60 residents responded, and we then shared these results with Select Board member Len Diggins. Here are some of the most interesting results of this survey!

Many people in Arlington still struggle with home, food, and job insecurities.
The cost of living has made almost every family surveyed have to change their lifestyle in some way.
Over 1/3 of Arlington residents believe their salary is not enough to support their families.
87% of people think Arlington government is making a subpar effort at combating these issues.
When asked what they would like to see the town do, Arlington residents supported the idea of building more affordable housing and providing aid and support to local food distribution groups, such as Foodlink or Arlington EATS.
About half of residents have heard of and know about the MBTA communities act.

After the results of our survey, along with other actions taken to learn more about the MBTA communities act, my group and I came to a conclusion of our plan: In order to try and make a change in Arlington, we were going to spread the word to as many adults as we could in order to support both the higher-density housing the MBTA communities act is focused on, and lower cost housing. While these are separate things, our thinking is that the more people who can vote and hear about this, the more willing they will be to connect and support the different pieces of the puzzle to solve our housing issue. This is not just a one-time thing. The MBTA communities act is a planned, strategic opportunity to make Arlington a better place for the future. We hope with the information provided, you will also keep the cause of affordable housing progressing as well. Thank you for reading!

Arlington EATS Housing Corporation of Arlington MBTA Communities

Written by Elliot L July 12, 2023