This 102 page document is the most recently revised set of recommendations by the Town of Arlington’s Redevelopment Board. The report takes into consideration the comments and information provided over the last few months’ public hearing process. It also incorporates a citizen petition which strengthens the case for increasing permanent affordable housing with the passage of these zoning related Articles. Town Meeting convenes on April 22, 2019.
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Thanks to so many of you who came out Monday evening for the demonstration in support of the MBTA Communities proposal before the Arlington Redevelopment Board meeting! Over 20 people were there – a substantial and notable showing, especially on such short notice. Paulette Schwarz took some photos of the demonstration early in the evening which she kindly shared with us.
by Andy Greenspon
Image credit: Henry Hudson Kitson, Public domain, via Wikimedia Commons
In 2023, Lexington was one of the first towns to comply with the State “MBTA Communities” law (MBTA-C) by adding 227 acres to several multifamily overlay zones. When discussing this proposal, it was estimated to possibly generate 400-800 units in 4-10 years. However, after receiving building permit applications for about 1,100 units in the first year (including 160 inclusionary affordable units), Lexington passed Article 2 at a Special Town Meeting recently, which decreased the amount of land in these zones to approximately 90 acres. What can Arlington learn from Lexington’s experience?
Overall, Lexington’s experience shows us that developers are willing and able to build multifamily housing on large lots that aren’t very built up, and that MBTA-C can be successful in adding new housing in some circumstances. However, Arlington has few if any large, sparsely-built parcels zoned to allow multifamily housing under MBTA-C. As such, Arlington is unlikely to add significant amounts of new housing or affordable housing as a result of the MBTA-C overlay passed at Town Meeting in fall of 2023.
Parcel Size and Existing Buildings
Many of the parcels in Lexington’s MBTA-C zone are multiple acres each, are underutilized, and contain older office space. In contrast, Arlington’s MBTA-C parcels are much smaller and mostly covered with existing buildings, typically residential.
The largest development approved under MBTA-C so far in Lexington is at 3-5 Militia Drive. This land is three very large parcels containing a couple older office buildings, a previous religious institution, and giant surface parking lots. Therefore, such a property was already primed for redevelopment and the large lots allowed for 292 units to be approved. These parcels are also within walking distance of Lexington Town Center and the Minuteman Bike path, so multi-family housing on this location is a great use.
In contrast, there are no similar parcels in Arlington in the MBTA-C zone with large surface parking lots and aged office space that could be redeveloped in such a manner. One of the few parcels in Arlington that is somewhat similar to the planned parcels for redevelopment in Lexington would be the Walgreens at 324 Massachusetts Ave, 1.5 acres with a surface parking lot. However, this parcel was specifically excluded from the MBTA-C overlay along with all other business parcels to avoid displacing any existing business space. And the parcel is unlikely to be redeveloped one way or another unless Walgreens chooses to close their business and sell the parcel to a developer.
In short, compared to Lexington, Arlington is “built out” insofar as almost every parcel is utilized in some manner with high lot coverage. The original Lexington MBTA-C zone contained many parcels with low lot coverage, large surface parking lots, and underutilized office space, all attributes that make such parcels more likely to be sold to a developer to construct housing if permitted by zoning.
Last, while 1,100 units have been permitted so far, this does not mean all these units will be constructed given current financial uncertainty in the economy and high interest rates. It will also take several years for these properties to be completed and prepared for occupancy. As such, the original estimate of 400-800 units in 4-10 years (an estimate that actually widely ranges from 40 units all the way to 200 units per year) may in fact not be that far off from the final numbers once buildings are completed. The parcels most primed for redevelopment were acquired and permitted first. Finally, it is not entirely clear how many more parcels would have been redeveloped in the next 5-10 years had the Lexington MBTA-C zoning not been reduced in size.
Development Potential in Arlington
Most privately owned lots in Arlington are less than ⅓ of an acre with many much smaller, significantly limiting the amount of new housing development on any single parcel. Almost all of these lots are covered by existing buildings, and some of those buildings are condominiums. Therefore, in order for a large new construction project to occur on such parcels in Arlington’s MBTA-C multifamily zone, all of the following would have to take place:
- a single owner would have to take control of multiple lots and/or condominiums, meaning that
- multiple existing property owners would have to want to sell at the same time, or else the new owner would have to take the time and risk to assemble the property slowly, and
- the new proposed development would have to be large and profitable enough to make up for the combined purchase prices of all the properties acquired.
Meanwhile, properties in Arlington generally turn over at a fairly slow and steady pace. This is in contrast to underused large commercial properties, whose owners are more eager to sell.
With simulation modeling performed on potential rate of redevelopment, the Arlington Redevelopment Board’s 2023 Report to Town Meeting on the MBTA-C proposal projected that 15–45 parcels could be redeveloped over the next ten years, for a net increase of 50–200 new units or 5–20 per year, far fewer than even the initial Lexington housing unit construction estimates at the time of passage of their initial MBTA-C zoning.
In fact, Arlington has seen even less than the low end estimate of 5 units per year so far since our MBTA-C zoning became effective. Only a single project has been permitted so far, which would turn an existing 2-unit building into 4 units, a potential net gain of 2 housing units.
Lessons
- There is strong regional demand for housing including for multifamily units.
- Developers are currently willing and able to build when lots are available, are zoned multifamily, and aren’t already full of other buildings.
- Arlington can’t expect anywhere near as many new units with our current zoning as Lexington saw, because our MBTA-C multifamily zones are almost exclusively made up of smaller and built-up lots.
- As a result, Arlington’s current zoning won’t add much housing or affordable housing to our community, and won’t noticeably increase our tax base either.
(DRAFT – 7/11/2019)
Overview
Arlington Planning Department officials report on options for the Town to mitigate the effects of housing demolitions and housing replacements in neighborhoods.
Evidence suggests that lack of appropriate regulatory policies have led to incidences of “mcmansions” and other issues that concern neighborhood residents. This study looks at the data, the policy and regulatory options for Arlington. It also looks at how comparable nearby communities have managed similar circumstances.
This 42 page report covers a great deal of data and analysis of homes by zoning district, gaps in the effectiveness of the current regulatory structure, affects on affordability in Arlington by zoning district, information on housing prices and sales, etc.
“Best practices” include descriptions of demolition delay, expansion of local historic districts, neighborhood conservation districts, design review standards and guidelines and possible revisions to the regulatory framework in Arlington. The report also includes interesting case examples of how comparable communities near Arlington handle these issues.
This report was presented to the Arlington Select Board on July 22.
Read the complete report and see the available data and tables.
Two weeks ago, I helped to organize a precinct meeting for residents and town meeting members. During the meeting, we got into a discussion about public open spaces, how the town funds their upkeep, and whether having more commercial tax revenue might provide additional funding for parks and recreation.
As I discussed in an earlier post, only about 5.6% of Arlington’s is zoned for commercial uses, and that limits the amount of commercial property tax revenue we can generate. Commercial property tax revenue is sometimes referred to as “CIP”, which stands for “Commercial, Industrial, and Personal”. Commercial and Industrial refer to property taxes on land and buildings that are respectively used for commercial and industrial uses. Personal tax is tax on the value of equipment that’s owned and used by a business for the purpose of carrying out whatever their business is. This could include things like desks, display fixtures, cooking equipment, fork lifts, and the like.
In 2020, Arlington’s CIP levy was 5.45%, meaning that 5.45% of our property tax revenue came from Commercial, Industrial, and Property tax revenue. Breaking this down further, 4.2% was commercial ($5,562,528 tax levy), 0.2% was industrial ($278,351 tax levy), and 1.1% was personal ($1,423,117 tax levy). The town’s total 2020 tax levy was $133,350,155. This data comes from MassDOR’s Division of Local Services, and I’ll provide more specific sources in the “References” section of this post.
A CIP levy of 5.45% is low (compared with other communities in the commonwealth), and occassionaly folks like to talk talk about how to raise it. Which is to say, we about how to raise the ratio of commercial to residential taxes. I moved to Arlington in 2007, when our CIP levy was 5.37%. This increased in subsequent years, peaking at 6.26% in 2013, and has been gradually decreasing since. Recall that 2008 was the year the housing market crashed, and the “great recession” began. The value of Arlington’s residential property fell, but the value of business properties was relatively stable in comparison. Thus, our CIP percentage got a boost for a couple of years.
Tax levies (the amount of tax collected) are a direct reflection of the tax basis (the assessed value of property). I’m going to shift from talking about the former to talking about the latter, because that will lead nicely to a discussion about property wealth. Which is to say, the aggregate value of property assessments in town.
Here’s a chart showing Arlington’s net CIP and residential property values, from 1983–2020, adjusted to 2020 dollars. (This is similar to the chart that appears on page 102 of Arlington’s Master plan, but for a longer period of time).
Generally speaking, the value of Arlington’s residential property has appreciated considerably, and there’s a widening gap between our residential and CIP assessments (in terms of raw dollars). Because the gap is so large, it’s helpful to see it on a log scale.
Viewed this way, the curvatures are generally similar, but residential property wealth is rising faster than business property wealth.
In summary, there are three reasons why our CIP is as low as it is: (1) a limited amount of land where one can run a business, (2) the value of residential property is appreciating faster than the value of business property, and (3) occasionally business properties are converted to residential (perhaps with the residential property being worth more than the former business property). That’s not to say we can’t improve the commercial tax base. We can, but we will have to think about what and where, and how to compete with a generally competitive residential market.
References
- MassDOR Division of Local Services reports
- DOR Query Tool for Municipal Property Assessments
- DOR Query Tool for Municipal Tax Levies
- Spreadsheet of Arlington Property Assessments, 1983–2020. Data obtained from MassDOR, with calculations added to adjust for inflation.
- Spreadsheet of Massachusetts Property assessments for 2020. Data obtained from MassDOR.
(Updated 7/2/2020, to add log scale graph and revise conclusion.)