REPORT TO THE
LENOX AFFORDABLE HOUSING COMMITTEE
June 20, 2012
Written by Connie Kruger, AICP
Through the DHCD Peer-to-Peer Program
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LENOX PEER-TO-PEER AFFORDABLE HOUSING REPORT
June 2012
Connie Kruger, AICP
Peer-to-Peer Consultant
INTRODUCTION
The Town of Lenox applied to the Massachusetts Department of Housing and Community
Development (DHCD) in the summer of 2011 for affordable housing technical assistance
through DHCD’s Peer-to-Peer Program. Town Planner, Mary Albertson, contacted Connie
Kruger to see if she was interested in providing services to the Town of Lenox. Ms. Kruger is
eligible to participate in the Peer-to-Peer Program because she is an appointed municipal official
serving on the Amherst Planning Board. Ms. Kruger has extensive professional experience in
affordable housing in Massachusetts. A contract was completed for services in early 2012. Ms.
Kruger attended an introductory meeting February 7, 2012, with the Lenox Affordable Housing
Committee (LAHC) and the Lenox Affordable Housing Trust (LAHT) to discuss affordable
housing issues in Lenox. Ms. Kruger received an e-mail from LHC member Deborah Burke
dated April 1, 2012, which further details the focus of Ms. Kruger’s assistance. The following
report is a response to the original scope of services in the Peer-to-Peer contract and the April 1,
2012 write-up from Ms. Burke. The LAHC reviewed the draft report at its meeting June 12,
2012, and made suggestions to Ms. Kruger for some minor changes for this final report.
SUMMARY
The following report is intended to assist the LAHC in focusing its efforts on the affordable
housing activities that are most likely to achieve the committee’s priority goals. The Lenox
Affordable Housing Committee is comprised of highly competent and dedicated members who
want to make a difference in the community. The reality of a volunteer board, even an
extremely active one, is limited by the amount of tasks that can realistically be undertaken at
one time so it is important that the committee focus its efforts on it’s highest priorities.
The following report presents a number of actions that may be pursued by the LAHC and lays
out some of the details each activity entails. After discussion with the LAHC, there is agreement
that the most important actions can be prioritized as:
="text-align:left;">homeownership development; and
e="text-align:left;">affordable housing in Lenox that will qualify for inclusion on the SHI” The
following is a list of strategies that either are appropriate for consideration or are
strategies that the LAHC has expressed interest in learning more about.
1. PRODUCTION of AFFORDABLE HOUSING
0000" style="font-family:Tahoma;font-size:8pt;color:#000000;">process. Using town land, when available, is a preferred strategy for producing
new affordable housing.
The Lenox Housing Trust is an important tool that can be used to acquire land
and/or buildings and then prepare a Request for Proposal (RFP) for a developer
to construct affordable housing in alignment with the goals of the Town.
-align:left;">Guidelines, which expands the marketing effort beyond Habitat’ traditional
church network.
The Central Berkshire Habitat for Humanity includes Lenox in its service area. I
have been told that a representative from Habitat met with the Lenox
Affordable Housing Committee and indicated that Habitat was focused on
Pittsfield. It is worth pursuing this in a follow-up meeting, perhaps including
Habitat Board members if necessary. If Lenox could provide a site for a Habitat
unit this could be a significant motivator for them to come to Lenox. Habitat
should be interested in donated or price reduced lots anywhere in its service
area. Local funds can also be available for site due diligence, pre-development
expenses, and subsidizing the construction.
Amherst has used CPA funds to support the construction of four Habitat homes
built by the Pioneer Valley Habitat for Humanity on land donated by Amherst
0" color="#000000" style="font-family:Tahoma;font-size:8pt;color:#000000;">housing in communities where there is local support and hopefully some local
financial assistance. Lenox can use CPA or LAHT funds to provide incentives to
both attract developers and increase the number of affordable units in a
development.
A reliable way to increase the number of affordable units on the SHI is through
the development of a rental development under Chapter 40B. The State counts
100% of the rental units in a development that meets the minimum threshold of
25% of the total number of units available for households earning under 80%
AMI. In a Ch. 40B home ownership development only the deed restricted
affordable units are counted for the SHI.
Under DHCD’ Local Initiative Project a developer could use the flexible zoning
allowed under Ch. 40B while working with the Town to obtain a “riendly 40B”permit—“riendly”refers to the fact that a LIP development requires the
approval of the Board of Selectmen in advance of the 40B permit being filed
with the ZBA. A minimum of 20-25% of the units must be affordable with the
remaining market rate units help carry the project financially. The LAHC can
encourage responsible developers to work with the LAHC in accord with local
criteria to submit a friendly 40B permit.
color="#000000" style="font-family:Tahoma-Bold;font-size:8pt;color:#000000;">Multi-Use Developments with CPA Funds
The Community Preservation Act (CPA) is a source of funds for affordable
housing development and it also allows the Town to invest in the acquisition
and development of property that meets more than one CPA allowed use—combining housing with historic preservation or housing with land conservation
or in some instances all three uses can be done successfully. Many
communities have prepared plans for sites where multiple CPA eligible uses are
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feasible. Multiple use projects have the benefit of increased public support and
increased levels of CPA funding.
sionary zoning has not been a big producer of affordable housing, but it’ a
good tool to guarantee a mix of incomes in new development projects without
needing to provide an external subsidy.
The Lenox Affordable Housing Committee could review the Lenox Zoning Bylaw
periodically to see if there may be other opportunities to create flexibility zoning
that encourages additional affordable housing production. There may be zoning
changes that would increase housing options, but these may not produce
housing that qualifies on the SHI. Examples of some of these changes may be
accessory dwelling units, converted dwellings, and mixed-use developments.
2. MORTGAGE ASSISTANCE PROGRAM FOR HOMEOWNERSHIP
Mortgage Assistance is a program that subsidizes the initial purchase price of a home
by buying down the price from its market price to an affordable level by providing a
sizeable down payment to write down the purchase price (this program is also referred
to as a “uy-down”program). In some programs closing costs are also eligible for
funds. Mortgage assistance programs work with existing homes and do not encounter
the resistance that developing new affordable housing often encounters. The
difference between market values and what a buyer, most typically a first-time buyer,
can afford to pay is the “ap”that is made up through the program.
In exchange for financial assistance in purchasing the home, the program places a
long-term affordability restriction on the housing unit keeping the price affordable upon
resale to the next qualified buyer. The affordable units created by this program must
meet the specific requirements of the LIP Local Action Units provisions in order to
qualify for inclusion on the SHI. Some communities have the capacity to administer a
mortgage assistance program in-house, but often it is contracted out to a non-profit in
the area that does home buyer counseling and other forms of homebuyer assistance.
The Berkshire Housing Development Corporation (BHDC) is a certified Home Buyer
Counseling Center and would be a good resource for informing the town about firsttime
buyer needs in the area and can suggest ways to structure the program. Staff
from their home buyer counseling program may be able to meet with the LHC and
discuss the experience they have had with finding homes for graduates of their first
time home buyer classes. BHDC is also a potential administering agency for this type of
program.
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Administrative responsibilities for running a mortgage assistance program include:
affirmatively marketing, income qualifying buyers, managing assistance funds, working
with the LIP program to qualify units for the SHI, and long term monitoring of the
resale of units.
Since affordable home ownership is a clearly stated need and strategy of the Lenox
2009 Housing Production Plan (HPP) a mortgage assistance program would be
consistent with that goal. However, the cost per unit of writing down a home for
purchase to an affordable level for a first time income eligible buyer can be high
depending on market prices in the area. Appendix A shows the allowed sales prices
under the Local Initiative Program.
First time homebuyers may be eligible for mortgages with favorable terms. Loan
the Massachusetts Housing Partnership (MHP) through its Soft Second mortgage
The Town of Sudbury, through the Sudbury Housing Office, administers the Sudbury
Home Preservation Program. The Sudbury Housing Trust provides funds of up to
$100,000 per unit and an additional $12,500 for inspections and repairs, to underwrite
the cost of home purchase. The Trust does not buy the property but matches eligible
The Chatham Housing Authority administers the Chatham Buy Down Program to assists
3. PURCHASE, REHABILITATION AND RESALE
A Purchase and Resale Program involves the purchase of modestly priced housing units,
completes any housing rehabilitation that is needed to bring the housing up to code
compliance at minimum and hopefully to an even high quality standard, and then
affirmatively markets the home at a below market price to an income-qualified buyer.
Typically only non-profits experienced in purchase and rehabilitation are willing to
assume the risks and complexities that come with this kind of program. This program
requires the services of a qualified rehabilitation specialist and the management of
licensed contractors to perform the rehabilitation work. By purchasing and holding the
property before sale to a qualified buyer the purchasing entity assumes liability for the
unit during this interim period. This is a program that works best in a community with
an existing rehabilitation program. This program also requires all of the administrative
responsibilities mentioned in the above description of the Mortgage Assistance program
plus the capacity to manage a housing rehabilitation component.
Both Berkshire Housing Development Corporation and Southern Berkshire Community
Development Corporation are potential partners to administer a purchase for resale
program and the LAHC may choose to discuss this option with these entities.
4. ACCESSORY DWELLING UNITS (ADUs)
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Accessory dwelling units may count on the SHI if they meet the criteria of rent
affordability and are affirmatively marketed. The LIP program also requires a Local
Project Administrator to provide oversight and do complete yearly rent verifications.
The requirement for open affirmatively marketing is often not acceptable to owners
with accessory dwelling units who often want the ability to select their own tenants
using their own criteria. If the ADU is already occupied, even if the tenant meets the
income criteria, the unit cannot be counted on the SHI.
In practice, communities have not found it feasible to deed restrict ADU. The Local
Initiative Program (LIP) is in charge of approving ADUs for inclusion on the SHI. Be
sure that all ADU program requirements comply with the LIP Guidelines. DHCD
strongly recommends that you speak to staff at the LIP program prior to finalizing a
program design, or completing a property purchase, if your expectation is that the unit
will be counted on the SHI.
5. EMPLOYER ASSISTED HOUSING
The Town of Lenox has identified a number of potential employers that may be
interested in participating in a employer assisted housing program, including Canyon
Ranch, Cranwell and Shakespeare and Company. These are typically done as
homeownership programs in areas that need reutilization, such as the Bell Hill
neighborhood near UMass Medical in Worcester. Employer assisted rental housing may
be attractive to employers where there is a strong seasonal demand for workers, such
as the Berkshires.
Lenox could provide financial incentives to work with some of the area’ larger
employers to provide “ork force”housing. Most employers would like these units to
be available to their own staff either exclusively or on a preference basis. However,
these units will not qualify for inclusion on the SHI if a preference is included for
employees. In general, employer assisted housing, that is housing restricted to one
particular group of people such as the employees of a particular organization, will not
qualify for inclusion on the SHI because it will not be affirmatively marketed.
It would be worthwhile to reach out to area employers and have on-going discussions
about their interest in participating in a shared housing agenda. These groups may
also have land resources that could be sold or donated to the town for affordable
housing purposes.
6. BUILDING ADMINISTRATIVE CAPACITY
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Sudbury, with technical assistance from the regional planning agency,
Metropolitan Area Planning Council, spent over a year ironing out the details of
an inter-town cooperative agreement. Their work can serve as a template for
other communities who want to share administrative and technical services for
affordable housing. Lenox, Great Barrington and Williamstown have all been
active participants in affordable housing initiatives. All three of these
communities have professional planners, have CPA funding and have created
Affordable Housing Trusts (Williamstown just approved their trust at the 2012
Annual Town meeting). Exploratory conversations can be entered in to starting
with these two communities.
e="Tahoma" size="+0" color="#000000" style="font-family:Tahoma;font-size:8pt;color:#000000;">local officials, including the 2-day Housing Institute offered annually for local
officials and community members on a range of affordable housing topics.
7. COMMUNITY EDUCATION
Community education on local affordable housing programs and projects should be an
activity of the LAHC. The Housing Committee members should be familiar enough with
the terms and concepts of affordable housing so that they can speak to the public with
confidence. This may take the form of an “levator speech”or be a written flyer or
brochure or materials posted on the town website. The Massachusetts Housing
Partnership periodically holds workshops on the topic of building community support for
affordable housing. I encourage members to participate in this type of training
opportunity when it is available. See Section III.. Building on Accomplishments and
Getting the Message Out for additional information on Community Education.
MHP and CHAPA have combined forces with the National Housing Conference/Center
for Housing Policy Toolbox to use web resources to help communities with a wide
resource that has really good information on ways to build public support for housing.
II. DECISION MAKING MATRIX—CTING ON OPPORTUNITY
The LAHC has asked for suggestions for ways to evaluate different strategies or actions
it may take. The committee has been “tuck”about what direction to go in and how to
prioritize activities. Some of this frustration exists because the downturn in the housing
market in general, and the change in some of the state housing program funding
criteria, which has meant that there are no immediate affordable housing development
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activities on the horizon. The Town was very supportive of the purchase of the
property for the homeownership project Saw Mill Brook, but project implementation is
delayed waiting for homeownership funds to once again become available from the
state.
It is important for the housing committee to be clear about what it perceives as the
housing needs of the community, the root causes of the housing needs and some
realistic strategies to address those needs. The 2009 Housing Production Plan lays out
some of the areas of need. A decision making around affordable housing activities may
not always follow a strictly rationale or scientific process because a number of variables
come in to play, so I need to caution the reader not to get to locked in to a matrix as
an absolute system for decision making but to see it as a guide. Decision making will
need to be guided by what are the priority community housing needs.
One axis of a matrix could contain the following criteria:
Housing Need: the program or project to be undertaken must meet the identified
housing need(s) of the community. Affordable home ownership has been identified as
one of these needs. Affordable family rental opportunities may be another. Special
needs housing has also been identified. The committee can go back through the need
section of the HPP and confirm that the data is still relevant.
Opportunity Factor: market or funding opportunities may present opportunities that
are worth acting on even if these may not be the absolute highest priority. The
committee needs a way to quickly and effectively evaluate opportunities when they
come up so that undue time is not spent on opportunities that are unrealistic.
Capacity: the ability of Lenox to provide administrative support or to engage partners
to assist in the management of the program or development initiative under
consideration. This can encompass the complexity of the program, the length of time
to accomplish program goals, qualifications for the SHI, opportunity to leverage other
funds and resources, and the financial and political risks associated with the activity.
Across the other axis the strategies presented in section III of this report can be listed,
and perhaps weighted after the committee examines and discusses them for alignment
with their housing needs and goals. These strategies can include: a mortgage
assistance program, working with Habitat for Humanity, Shared Housing Office, land
acquisition, housing rehabilitation, employer assisted housing, developer incentives for
inclusion of affordable units, identification of suitable 40B housing sites and a range of
public information and education activities.
III. BUILDING ON ACCOMPLISHMENTS AND GETTING THE MESSAGE OUT
Lenox has a highly skilled and extremely motivated housing committee and housing
trust (comprised essentially of the same members), but without a current housing
proposal to work on the members are struggling to stay energized. It is important for
the members to remember what has been accomplished and to communicate this
regularly to the larger community. Town meeting members and board and committee
members need to be aware of the good work that the housing committee already
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deserves credit for. This helps built credibility for the committee as it continues to build
funds for the Trust using CPA and other sources.
A starting point can be developing a flyer or brochure that lists past accomplishments.
Some of these are evident from going through the 2009 Lenox Affordable Housing
Production Plan:
:#000000;">which has a resource “cton’ Affordable Housing Milestones” which keeps an updated
list of accomplishments.
Working together on a brochure about the committee’ housing work is a good way to
describe what you do in a concise and attractive way. The language developed for the
brochure should be able to also give you the language to be used for a short “levator
speech”whereby each member can speak clearly and with confidence about what the
committee does and what its future vision is for Lenox. It may take a while to agree on
a clear statement about the committee, but the process of hammering this out should
bring the clarity that members are seeking about the mission of the committee. The
statement can stay general and positive.
Appendix B gives an example from Westport of a very simple way to represent housing
need in their community.
The housing committee can use the town website to post information it develops
describing its work, its mission and past accomplishments. There are many creative
ways to build visibility and support for local affordable housing efforts. Many
communities do an annual housing summit. This can include presentations, facilitated
discussion and even exhibits by area non-profit housing service and development
agencies. An event is a good opportunity for positive media coverage. The committee
could have a link from the town web site to an enhanced web page of there own.
Photos of existing and proposed affordable housing from the region can be included.
The Trust has funds that could be used to develop informational material. The Town of
Sudbury does a good job keeping current and helpful housing information on their
website Sudbury.ma.us/departments/CHO/ .
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IV. ACTIONS TO MOVE SAW MILL BROOK TOWARD DEVELOPMENT
The LAHC was very active in gaining town-wide support for contributing CPA funds for the
purchase of land for approximately 50 units of mixed-income ownership housing at the Saw Mill
Brook development sponsored by the Southern Berkshire Community Development Corporation.
The LAHC would like to be as proactive as possible to get this development funded and in to
construction.
Unfortunately, as a result of the financial recession and the downturn in the real estate market,
DHCD discontinued its funding support for affordable homeownership. This has left the Saw
Mill Brook housing development without the resources it needs to move forward. With an
improving real estate market and a new Undersecretary of DHCD, Aaron Gornstein, there have
been indications that the state may again start to fund homeownership. Lenox can
demonstrate a relatively healthy homeownership market. It would be a good time for housing
committee members from Lenox to write to Mr. Gornstein describing the Saw Mill Brook
proposal, the level of local support it has received, the local need for additional affordable
homeownership and ask that DHCD fund a homeownership program. Lenox could set up a
meeting with Mr. Gornstein to discuss their concerns. A follow-up from the town’ legislative
representatives might be useful at a later time but an initial letter and meeting is a good
starting place with an Undersecretary who has a record of being very committed to seeing
affordable housing across the Commonwealth.
V. UPDATING THE LENOX HOUSING PRODUCTION PLAN
Lenox has a Housing Production Plan (HPP) approved by DHCD in 2009. Lenox’ plan
expires in 2014 at the 5-year mark. The Lenox Housing Committee (LHC) wants to
know if the plan needs updating and if an amended HPP or a new HPP should be
prepared and submitted to DHCD. The current plan is still valid and there is no
compelling reason to update the HPP until there is a strategy or site that the Town
wants to act on that is not adequately covered in the 2009 HPP, at which time a plan
amendment can be submitted to DHCD.
The 2010 Federal Decennial Census has been completed and new data is available for the data
sections of the HPP, however, some of the more detailed housing data that the Census Bureau
puts out through the American Housing Survey has been delayed until late 2012. In general
Massachusetts communities have not shown significant changes between the 2000 and 2010
census. DHCD will consider the incorporation of new census data as a major change in the plan
and it will require a full review by DHCD equal to a 5-year plan renewal
looking ahead to updating the plan in 2013 for submission to DHCD in January 2014.
Some of the activities targeted in the 2009 HPP have already taken place and the LAHC should
keep a tally of what has already been accomplished. These include the passage of an
inclusionary zoning by law, the formation and initial funding of the Lenox Housing Trust, and
the purchase of the site for Saw Mill Brook housing.
VI. TRACKING KEY ECONOMIC AND MARKET INDICATORS
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The 2009 Lenox Affordable Housing Production Plan contains the main indicators that
illustrate housing need and describe the opportunities and challenges of the local
housing market. The indicators bulleted in the Executive Summary are very good
examples: no homes listed in MLS at affordable prices, percentage of Lenox owners
and renters facing cost burdens (paying more than 30% of income for housing) and
employees who cannot afford the cost of home ownership. These indices could easily
be updated and be tracked every couple of months.
A good source of sales information is the Multiple Listing Service (MLS). The MLS
provides information on the number of listings, prices and length of time units are listed
and is one way to keep a pulse on the local market. A realtor or other member on the
Lenox Affordable Housing Committee might be willing to take this on. Watching the
demand for public housing units in Lenox and the region, including the length of
waiting lists, is another important need indicator to keep track of. Most of Lenox’
existing assisted housing is for seniors so it may be difficult to ascertain what the need
is for subsidized family housing. Matching lower-income workers salaries with the
available affordable rental supply in the market is a way to determine if there are
adequate affordable rental opportunities in the Lenox housing market. Housing need
tends to correlate with the unemployment rate making this an indicator to watch the
number of children in the public schools qualifying for free or reduced meals is another
indicator to watch.
REPORT CONCLUSION
The Lenox Affordable Housing Committee and its companion organization, the Lenox Affordable
Housing Trust, have the potential to undertake a variety of housing activities. It will be up to
the committee members to decide which ones are best suited to the skills and interests of its
members, best match for community housing needs and are an appropriate match for available
resources.
This report presents some of the strategies that the Lenox Housing Committee may find
appropriate for further action. All of the strategies discussed have been successfully used in
Massachusetts communities that are generally comparable to Lenox. The report also attempts
to answer some specific questions that the LAHC has provided the project consultant.
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Appendix A LIP Purchase Price Example
The following chart (an electronic copy is available online at DHCD’ website:
www.mass.gov/dhcd) shows how DHCD calculates maximum sale price of a 3BR condominium unit
in the Boston Metropolitan Statistical Area in 2008:
Determining the Maximum Sale Price
(example)
Housing Cost
Maximum Sale Price $165,000
5% Down Payment $8,250
Mortgage $152,760
Interest Rate* 6.49%
Amortization 30 years
Monthly P&I Payments $989.74
Tax Rate $14.58
Monthly Property Tax $200
Monthly Hazard Insurance $55
Monthly PMI $102
Monthly HOA Fees (if applicable) $100
Monthly Housing Costs: $1,447
Household Income
# of Bedrooms 3
Presumed Household Size 4
70% of Area Median Income for a 4-
person household
$57,881/year
Maximum Allowable Housing Cost
(30% of Income)
$17,364/year
$1,447/month
Comments: Monthly housing costs cannot exceed 30% of the monthly
income of a household at 70% of the area median income.
*The interest rate is time-sensitive, approximately a quarter percent
above the latest prevailing fixed 30-year rate as listed on Freddie Mac’
interest rate survey. Here it is assumed that the Freddie Mac interest
rate is 6.58%.
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Appendix B
Excerpt from Westport Affordable Housing Trust Action Plan FY11-13 prepared by
Jennifer Goldson, JM Goldson community preservation + planing
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Appendix C
Resources
Department of Housing and Community Development
Housing Production Plan Program
Local Initiative Program
Massachusetts Housing Partnership
Citizen Housing and Planning Association
Housing Policy.org
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