If the solutions were simple, there wouldn’t be problems.
This column is a companion to the WSBS (860AM, 94.1FM) radio show, It’s Not That Simple, on the air every other Friday at 9:05 a.m. Listen to the podcast here.
This is the final installment in a series of columns examining the housing shortage in Great Barrington.
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If housing is a basic human right, isn’t every decision that leads to creating or prohibiting housing a moral decision? Will you pay more taxes or rent out your house for less money to provide housing to others? Will you allow your neighborhood to change, allow more density, noise, traffic, in order to house others? Or are you waiting for a painless miracle solution?
For several months, It’s Not That Simple has been exploring the housing shortage in Great Barrington. We’ve looked at the scope of the problem, which is national, not just local, and we’ve looked at causes. In our last column we summarized the problem. Here’s a very brief summary of that summary: Not enough new housing is being created to meet demand.
And here’s a brief summary of the possible solutions to the housing crisis:
- Make housing a priority
- De-commodify housing; stop treating housing like all other “products,” relying on the free market and selling to the highest bidder, or like an investment product that can be securitized
- Commit to a major influx of federal and state dollars to build housing
- Make significant changes (reductions) to local administrative ability to thwart housing production
In other words, to solve the housing crisis we need to get serious, sidestep capitalism, increase taxes, and take away local control. Does anyone want to bet on that horse?
We want to tell you, optimistically, about the light at the end of the tunnel, about innovative, local initiatives elsewhere which we can apply here to solve the housing crisis. We want to, but we can’t. The housing crisis will not be solved locally. There are policies, programs, and zoning we can (and in some cases already have) put in place locally that will help nibble at the edges of the crisis, but all of the ideas we are about to suggest won’t create enough housing. Nevertheless, we persist.
We aren’t going to describe the affordable housing which has been and is being built by area nonprofits using state and federal dollars. Those efforts are impressive and they meet the solution criteria we set out above. But it isn’t enough. In this column we are highlighting ideas for town-sponsored housing creation.
With that depressing introduction, here we go…
American Rescue Plan Act (ARPA) Funds
The federal government is returning billions of dollars to state and local governments “…to help turn the tide on the pandemic [and] address its economic fallout…” The town of Great Barrington will receive a little over $2 million in ARPA funds, half of which has already been received and allocated. Of that first million, $850,000 has been targeted by the town for affordable housing. Exactly how that money will be spent has not been determined yet. A specific recommendation will come from town staff soon. There’s another million coming that’s uncommitted.
Affordable Housing Trust Fund
This town committee was created by Town Meeting to address the lack of housing affordable to low- and moderate-income households. The unique aspect of the Trust is the ability to act quickly. Usually, in order for the town to acquire property it requires a vote at Town Meeting. That means a seller has to be willing to hold the property until then. The Trust, once funded, can purchase land or homes quickly and set them up to be kept affordable in perpetuity.
But the Trust isn’t funded. They get money every year from the Community Preservation Act funds, enough to run a modest down payment assistance program (see below), but not enough to buy houses and property to get them off the commodity market. Are we willing to raise our real estate tax bills in order to fund the trust and slowly, very slowly, create affordable housing? So far the answer is no.
The Trust currently has several active projects:
- The Down Payment Assistance Program provides interest-free loans which don’t have to be repaid until the house is sold. Loans are given to buyers who can otherwise afford to make the monthly mortgage payments. These loans help buyers who have been unable to save for a down payment, or they can add to the down payment already saved, thus lowering monthly mortgage costs.
- 40 Grove Street is a single-family house that had fallen into disrepair and was taken by the town for non-payment of taxes. Rather than sell the property to the highest bidder, Town Meeting voted to give the property to the Trust. Through a partnership with Habitat for Humanity, work has already begun to renovate and repair the house and, with a deed restriction, keep it as an affordable unit. Habitat keeps costs down by using volunteer labor to do much of the work. Volunteer by contacting Habitat for Humanity.
- The Housatonic Homeownership Development is a lesson in the positive and negative aspects of the Trust and the town’s housing policy. The Trust was able to purchase a large parcel of undeveloped land in Housatonic, but only because the seller was willing to wait for Town Meeting approval. Since the town has never funded the Trust, one of the biggest advantages of having a trust, the ability to act quickly, is still just a dream. How many sellers will be willing to hold their property off the market, perhaps months, for an uncertain answer from Town Meeting? Habitat for Humanity is currently in the early design stage of developing 19 detached single-family homes using a land trust model (see Land Trust, below.) That’s the good news. Not such good news is that the land on which the units are being built could have held three times as many housing units by right under current zoning. The Trust had to weigh more homes against the almost certain delay that would have been caused by community opposition. In this case, the right to housing as many as 40 families lost out to the rights of people who already have a place to live in order to keep their neighborhood and their lifestyles from changing. (See INTS, March 29, 2022.)
Short-term Rental (STR) Community Impact Fee
State law allows a 3% fee to be added to STR stays, and that money can be dedicated to the Affordable Housing Trust so that it would have a steady stream of funding. It has been proposed to be included on the warrant for Town Meeting, where it needs a majority vote to be implemented locally. Town meeting is June 6 at 6 p.m. at Monument Mountain Regional High School. (This is not to be confused with warrant items restricting STR, which is a separate issue.)
Those are the local programs already in place. The following are ideas that have been presented to the selectboard but still need study and exploration.
Tax incentive or stipends to landlords, or buyout STRs
Some communities are paying landlords to keep rents affordable, either through tax deductions or a direct stipend. Property owners in the program receive the payment and then sign a lease with a local business, and that business sublets the apartment or home to employees. In other similar programs, communities are paying STR operators to convert to year-round rentals.
Town financing
One of the most expensive aspects of housing development is the cost of capital. Towns have the ability to borrow money at lower rates than developers. The town could then make that money available to developers in exchange for a commitment to keep sales price or rents lower. There are restrictions; in Massachusetts a town can’t lend money to someone to develop property the town doesn’t own. A possible workaround would be for the town to borrow the money to purchase the land and pay for the construction, and then rent the site to the developer/property manager for an amount that will pay back the loan. It could include an agreement to sell the property to the developer when the loan is paid off.
ADU tax increase deferral
Every residential district in Great Barrington allows, by right, two dwelling units plus an Accessory Dwelling Unit (ADU), creating up to three separate units on a single-family lot. But as soon as the project is finished, the value of the property, and the homeowner’s assessment, will increase dramatically. The town could defer the increase for some period of time, as long as the owner agrees to rent the new unit(s) year round. This would remove a significant disincentive to creating this infill housing. The town currently does this with commercial developments in exchange for creating jobs.
Land Trust
A land trust is a collection of homes built on commonly owned land. The homeowner owns the house but not the land under it. Deed restrictions are put on the homes, allowing some growth in value to flow to the homeowner, but limiting the resale price to an affordable figure. This is another way to get housing off the commodity market and keep it affordable forever.
Moratorium on special permit and site plan review
Eliminate site plan review and special permits for the kind of development we are trying to encourage: affordable and workforce housing. Both of those processes are easy targets for appeal, which can delay or derail a project. Under a moratorium, any developer proposing this type of housing at those prices would go directly to the building inspector who would make sure it fits with zoning. By eliminating these administrative reviews, we speed up the process but more importantly, we take uncertainty out of it. A few weeks ago we discussed a project that cost the developer $200,000 before he lost an appeal to a single neighbor who challenged the special permit. One neighbor’s rights took precedence over the will of the voters who passed the zoning that allowed the development, and over the rights of 47 families to have housing.
Second- and third-dwelling-unit development assistance
As noted above, every residential zone allows a second dwelling unit, plus an ADU, by right. But you’re a homeowner not a developer. You don’t know where to begin. You might not even know it is a possibility, and you certainly don’t know how much it is likely to cost or what the potential income would be.
This program would set up an office, either a town office or through a nonprofit, that would guide homeowners through the process of building additional dwelling units on their property, in exchange for an agreement to rent them year round. The experts would tell you if you can do it, how much it would cost, how to apply for the tax increase abatement, what boards you need to go to, and how much you are likely to make when finished. They could give you blueprints, names of local contractors, etc.
We’re here at this moment in time with this crisis on our hands. We got to this crisis because of the systems that are currently in place. Are we happy with the current situation? If not, don’t we have to change the systems that got us here?
We started out with the warning that we aren’t going to fix this locally. That doesn’t mean we should do nothing. Until this problem is tackled head-on by our leaders at the state and federal levels, we have a moral obligation to help house people who can’t afford housing any way we can.
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