The new proposal is just the most recent step in a process that reaches back almost a decade, culminating in the Master Plan (2015), the Housing Production Plan (2016) and the mixed-using zoning amendments of 2016. The Town has consistently proposed smart growth: more development along Arlington’s transit corridors to increase the tax base, stimulate local commerce, and provide more varied housing opportunities for everyone, including low and moderate income Arlingtonians. This year’s proposals are no head-long rush into change. Today’s debate is similar to the debate before Town Meeting three years ago. If anything, progress has been frustratingly slow. To realize the Master Plan’s vision of a vibrant Arlington with diverse housing types for a diverse population, we must stay the course on which we have been embarked for so long.
Related articles
Dave Weinstock, an Arlington resident interested in affordable housing wondered about the concept of “developer math”. The math involved in planning an affordable housing projects is a problem that needs to get solved in order to have anything built here in Arlington, or anywhere. This topic comes up frequently in community discussions about the need for more housing.
Questions are raised around:
- 1- Why build so many units vs. smaller buildings
- 2- Why parking is costly and inefficient use of land
- 3- Why can’t more affordable or all affordable units be built?
- 4- The cost of subsidizing affordable units and how that may translate to higher rental rates/costs, etc.
Dave found a great Architecture and Development firm in Atlanta (Kronberg Urbanists + Architects, based in Atlanta GA) that lays out a nice presentation, includes sample proformas, and real life scenarios that may help us understand this piece of the puzzle better when evaluating any project and how developers may be incented to build certain types of projects or do certain types of work.
Here is a link, reformatted to be within this website, to the presentation, showing the varieties of choices, costs, formulas and outcomes developers consider before deciding if the project can be built: https://equitable-arlington.org/developer-math_kua_071420/
Much of our hope for more affordable housing depends on the market forces of capitalism and the willingness of developers to build for good, not just for profit. But the developers must be able to cover their costs. Many communities are highly skeptical of developers, assuming the community will get tricked, the developer will get greedy and the promised housing will be a disappointment. Trust is needed. But so is verification. We all need to learn the developer math.
What are the math factors that a developer considers before deciding to build affordable housing?
Here is a link to the original presentation. https://www.kronbergua.com/post/mr-mu-let-s-talk-about-math
by Beth Elliott
I’m a member of the Affordable Housing Trust Fund Board and an attorney with over 15 years of practice in affordable housing law. Views expressed are my own, not those of the Trust.
The Town of Arlington and the Arlington Affordable Housing Trust Fund have created the Acquisition, Creation and Conversion (ACC) Program to provide a flexible source of funding for creating deed-restricted affordable housing in Arlington. Up to $250,000 is available per restricted unit, and the Town has dedicated federal ARPA funds to support the ACC Program.
ACC Program funds can be used to build new deed-restricted affordable units, whether rented or owned. ACC funds can only be used for existing units if the current tenants will not be displaced.
“Deed-Restricted” Is Important
“Deed-restricted” is the key component here. Housing that is “deed-restricted” as affordable housing is protected by a legally binding agreement that is recorded against the property in the registry of deeds. This agreement specifies the levels of affordability that must be maintained and for how long. It’s a public commitment to provide affordable housing that binds the current owner of the property as well as anyone else who buys the property while the restriction is in place. The ACC Program requires affordability for at least 20 years for rental units and in perpetuity for homeownership units. For rental properties, this means that tenants know that their units will remain affordable for the long term, even if their landlord changes.
Personally, I’m most excited about the potential to use the ACC Program to apply these protections to existing naturally occurring affordable housing in Arlington. For example, if an owner of an existing apartment building participates in the ACC Program, some or all of the apartment units will become deed-restricted affordable housing. Because ACC Program funds can only be used if the existing tenants aren’t displaced, this locks in deed-restricted affordability for the existing tenants. This innovative feature of the program is rare in my experience of affordable housing programs, and it has RFP potential to make meaningful change for existing tenants of naturally occurring affordable housing.
Get the Full Rules
In addition, the ACC Program can be combined with other funding sources, so there is great opportunity for owners to propose their own solutions. The Request for Proposals (RFP) issued for the ACC Program, available here, provides the full rules for participating in the program.
It’s New Year’s eve and I’m determined to get my third and final “Arlington 2020” article written and posted before 2021 rolls in. I’ve written these articles to paint a picture of Arlington’s housing stock, and how our housing costs have changed over time. The first article looked at the number of one-, two-, and three-family homes and condominiums in Arlington. The second article looked at how the costs of these homes has varied over time.
In this article, I’m going to look at the per-unit costs for our different housing types. The per-unit cost is just the assessed value, divided by the number of units. For condos and single-family homes, the unit cost is simply the assessed value. For two-family homes, it’s the assessed value divided by two. For a ten-unit apartment building, it’s the assessed value divided by ten. We’ll look at the price ranges within housing types, as well as the general differences between them.
The information here doesn’t include residential units from Arlington’s 76 mixed-use buildings. (My copy of the assessor’s data doesn’t distinguish between residential and commercial units in these buildings; I’ll try to say more about them in 2021.) It also omits units owned by the Arlington Housing Authority.
Condominiums
Condominiums provide the most variety and cost diversity. A condo can be half of a duplex, or part of a much larger multi-family building. The low end of the scale tends to be 500–600 square foot units that were built in the 1960’s; the high end tends to be more spacious new construction.
This graph is a histogram, as are the others in this article. The horizontal axis shows cost per unit, and the vertical axis shows the number of units in each particular cost band.
The per-unit price distribution is
| min | 1st quartile | median | mean | 3rd quartile | max |
| $92,600 | $344,450 | $473,100 | $500,086 | $640,850 | $1,241,000 |
Single-family homes
Single family homes are heavily concentrated around the $700,000 mark. There’s very little available for less than a half million dollars.
Per unit rice distribution:
| min | 1st quartile | median | mean | 3rd quartile | max |
| $103,700 | $679,900 | $771,900 | $825,172 | $908,750 | $3,232,700 |
The $103,700 single-family home deserves some explanation. The property straddles the border between Arlington and Lexington; it appears that the $103k assessed value reflects the portion that lies in Arlington.
Two-family Homes
Two-family homes are the bread and butter of East Arlington; they’re also common in the blocks off Mass ave near Brattle Square and the heights. Many of these homes are older and non-conforming, and they’re gradually being renovated and turned into condominiums.
As a reminder, these are costs per unit (as opposed to the cost of the entire two-family home).
Per unit price distribution:
| Min | 1st quartile | median | mean | 3rd quartile | max |
| $209,050 | $440,550 | $472,000 | $479,175 | $508,588 | $1,140,450 |
Three-family Homes
Unlike Dorchester and Somerville, three-family homes are not a staple of Arlington’s housing stock. But we have a few of them. Most were built between 1906 and 1930.
Per-unit price distribution:
| Min | 1st quartile | median | mean | 3rd quartile | max |
| $227,567 | $313,733 | $336,950 | $344,292 | $362,600 | $719,000 |
Small Apartments (4–8 units)
The majority of Arlington’s small apartment buildings were constructed during the first half of the 20th century. The most recent one dates from 1976.
Per-unit price distribution:
| Min | 1st quartile | median | mean | 3rd quartile | max |
| $154,950 | $202,950 | $227,775 | $231,619 | $255,775 | $403,875 |
Large Apartments (9+ units)
You’ll see three outliers in the per unit-cost distribution for large apartment buildings. These correspond to the newest apartment complexes in Arlington: The Legacy (2000), Brigham Square (2012), and Arlington 360 (2013).
Per-unit price distribution:
| Min | 1st quartile | median | mean | 3rd quartile | max |
| $117,013 | $141,383 | $153,006 | $195,789 | $170,973 | $474,631 |
All combined
Finally, we’ll put it all together in one picture, representing nineteen-thousand and some odd homes in town.
Per-unit price distribution:
| Min | 1st quartile | median | mean | 3rd quartile | max |
| $92,600 | $417,175 | $555,825 | $587,975 | $759,900 | $3,232,700 |
While there are lower-priced options available, a person coming to Arlington should expect to buy (or rent) a property that costs just shy of half a million dollars (or more).
Here is a spreadsheet with the cost distributions mentioned in this article.
The discussions on zoning have been confusing because while zoning covers ALL of Arlington’s land and the zoning bylaws for all Arlington’s zones are referenced, the key issues of greatest interest to Town Meeting are the discussions about increasing density. These discussions pertain ONLY to those properties currently zoned as R4-R7 and the B (Business) districts. These density related changes would affect only about 7% of Arlington’s land area. The map shows the specific zones that would potentially be affected. They lay along major transportation corridors.
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.