Frequently Asked Questions
Draft Housing Action Plan
Why do we need a Housing Action Plan?
The United States Housing Act of 1937 states “that the Federal Government cannot through its direct action alone provide for the housing of every American citizen, or even a majority of its citizens, but it is the responsibility of the Government to promote and protect the independent and collective actions of private citizens to develop housing and strengthen their own neighborhoods.” It also states that it is the policy of the United States, “to assist the several States and their political subdivisions to remedy the unsafe and unsanitary housing conditions and the acute shortage of decent, safe, and sanitary dwellings for families of lower income.”
The high housing costs in Massachusetts are causing many of our talented and educated workers to leave the state in record numbers. To help reverse this alarming trend, Governor Cellucci launched a series of initiatives to help cities and towns expand their housing opportunities. In January 2000, former Governor Paul Cellucci issued Executive Order 418, an initiative designed to provide cities and towns with the tools necessary to address the critical housing needs of the state. The order directs the heads of four Massachusetts agencies to establish a Housing Certification program and a Community Development Plan and to provide additional assistance to communities that are making a good faith effort to increase the supply of housing stock.
The Housing Certification Program requires production of housing units in accordance with an approved Planned Production Strategy. The Commonwealth Capital Grant Application scores municipalities on several planning aspects including housing production and an approved housing plan.
What is the definition of affordable housing used in the draft Housing Action Plan?
Since every housing subsidy program can have its own unique financial limits for eligibility, one set of numeric thresholds does not work. The definition used by the Housing Partnership is:
A wide variety of housing types that accommodate a diverse population, including growing families, senior citizens, persons and households with special needs, the homeless, single householders, and families whose children are of adult age and have left the household, with deed restrictions or other use restrictions limiting occupancy to income-eligible households: those households with an income usually not more than 110% of median income, as determined by the U.S. Department of Housing and Urban Development (HUD).
Is it a goal of the draft Housing Action Plan to ensure 40% of all future housing starts qualify as “affordable housing” under federal and/or state definitions?
NO. There are no percentage goals in this plan. The only affordable housing goal is 210 units over 5 years. This includes all varieties of affordable housing, eg. frail elderly, young family start-ups, etc. Please refer to page 14 of the draft Housing Action Plan.
If there are no percentage goals, how did the 40%fallacy become so prevalent?
The Housing Needs Analysis was conducted first as part of the E.O. 418 process. This work entailed looking at detailed 2000 federal census data comparing the number of households, their size and income levels to the number of housing units and their cost. This analysis showed that in 2000 39% of Framingham’s households qualified for federal affordable housing. It is important to note that this was a 29% increase from those eligible in 1990. These were critical indicators of the degree of need for more affordable housing but do not serve as the goal.
Is this draft Housing Action Plan really an affordable housing plan?
No, it addresses all housing as well as affordable housing. Framingham is the largest town in Massachusetts with a population of 67,000, but from 1990-2000, we permitted only 100 housing units per year. Several statewide reports (eg. Is an end to the Massachusetts housing crisis in sight?, Winners and Losers in the Massachusetts Housing Market: Recent Changes in Housing Demand, Supply and Affordability, Housing the Commonwealth's School-Age Children: The Implications for Multi-Family Housing Development for Municipal and School Expenditures, The Record on 40B: The Effectiveness of the Massachusetts Affordable Housing Zoning Law, The Faces of 40B: Profiles of Families in Affordable Housing, The Fiscal Impact of New Housing Development in Massachusetts: A Critical Analysis) have shown that Mass needs more housing in general to be constructed, in order to address a basic supply and demand problem. This supply shortage has grown so bad that it is having a major impact on housing vacancies and housing costs, this augmenting the affordable housing problems, as well. The draft plan addresses overall needs and then details specific types of affordable housing the Town needs, despite having met the magical 10% target set forth in Mass General Laws Chapter 40B when passed back in 1969 by the State Legislature.
Since the Town meets the Chapter 40B 10% target, why should the Town allow more to be constructed?
The Chapter 40B law was passed to help open the suburbs to those who otherwise could not afford to live there. The 10% target is merely that. It is not a statement of local need but rather a statement that all communities should have at least 10% of its housing affordable. It does not shut the gates to further affordable construction. In fact it sets forth provisions whereby the local ZBA can permit additional affordable housing if it meets identified unmet housing needs. The Housing Needs Analysis highlighted that there were many housing needs remaining despite being at 10%.
Does affordable housing pay property taxes?
It depends on who ultimately owns the project. There are 4 types of owners:
private (eg. Individual single family or multi family developer)
limited dividend corporation (eg. Private corporation restricted to 10-20% profit)
private non-profit (eg. Church or neighborhood corporation)
public non-profit (eg Housing Authority or public trust fund)
How a project is taxed depends on the ownership entity and what deed restrictions are placed on some or all of the units within that project and the length of time these restrictions are imposed. The simplest answer is that all private multi family entities pay taxes but the amount is tied to their degree of profit. Profit is restrained by the number of units with rental limitations and the extent of the limitation (very low income, low income or moderate income). Public and private nonprofit entities may make Payments In Lieu of Taxes (PILOT). The amount of the PILOT is open to negotiations. Even the Framingham Housing Authority pays a PILOT on all their units.
Has there been a fiscal impact analysis of the daft Housing Action Plan?
Since the draft plan only sets a goal of 210 units of a variety of housing types, spread all over town and over a 5 year timeframe, it was not seen as necessary. It should also be remembered that almost all affordable units pay some degree of taxes or pilots. (see question #6 above)
Framingham has been very pro-active recently in sponsoring major housing projects, eg., the Village at Danforth Farms PUD, the Arcade at Downtown Framingham, the Kendall Building mixed use development, conversion of Dennison Manufacturing to a housing project instead of an office complex, and JCHE Housing for the Elderly. Why are these projects ignored in the draft Housing Action Plan?
In the first draft of the plan these projects were deliberately not discussed in any detail, however, they were all alluded to in the Planned Housing Production chart (the most important page of the plan as it sets out the proposed numeric goals). In the second draft more discussion is provided regarding these local projects. Most importantly, in their present status none of these projects would be credited towards our housing production goals. The reason is that not one of these projects has a building permit yet. Some projects are tied up with legal appeals and others obtaining construction and permanent mortgage financing. If and when a building permit is issued, then the State will credit Framingham for these actions.