“Inclusionary Zoning” Housing Advances

An aldermanic committee unanimously recommended approval of a plan to require developers to set aside affordable apartments in new and rehabbed complexes — bringing one of the Elicker Administration’s long-in-the-works legislative priorities closer to a final vote.

That was the outcome of Tuesday night’s Board of Alders Legislation Committee meeting, which was held online via Zoom and YouTube Live.

The committee voted unanimously in support of the Elicker Administration’s proposed ​“inclusionary zoning” (aka ​“IZ”) law.

If approved by the full Board of Alders, the local zoning change would require new and significantly rehabbed apartment buildings citywide to set aside a certain percentage of units at rents affordable to tenants earning no more than 50 percent of the area median income (AMI).

The proposal has sparked heated debate across two Legislation Committee hearings, a City Plan Commission hearing, and amongst the city’s Affordable Housing Commission about whether it is one of the most progressive land-use updates in the nation, or too generous to developers and too stingy to low-income renters, or a marginal bill that will likely have little impact on New Haven’s housing market, or a potentially catastrophic example of bureaucratic overreach.

Ultimately, the committee alders on Tuesday night sided with the Elicker Administration and the roughly dozen people who spoke up in support of the bill as a key tool in the city’s affordable-housing toolbox.

“I think we’re moving in the right direction,” Dwight Alder Frank Douglass said before the committee voted unanimously in support. He said discussions about affordable housing in the city have been pretty ​“bleak” in recent years. Proposals like provide some cause for hope, he said.

Board of Alders Majority Leader and Amity/Beaver Hills Alder Richard Furlow agreed: ​“We’re making a very bold step.”

As currently written, the proposed law would require new buildings with 10 or more apartments in the downtown ​“Core” area to set aside 10 percent of units at 50 percent AMI and another 5 percent for tenants with federal Section 8 rental subsidies.

In the downtown-adjacent ​“Strong” areas, new buildings with 10 or more apartments would have to set aside 5 percent of units at 50 percent AMI. In the rest of the city, new buildings with 75 or more apartments would have to set aside 5 percent of units at 50 percent AMI.

And on land that the city sells to a developer, new buildings with 10 or more apartments would have to set aside 20 percent of units at 50 percent AMI. 

The law would allow developers to opt out of creating mandated affordable housing by paying ​“in-lieu” fees into a city-managed affordable housing trust fund. They will also be able to take advantage of a slew of city-offered incentives accompanying this proposal, including density bonuses and tax abatements.

The new law would not apply to developments that are already under construction, that have won some administrative approval from public agency like the City Plan Commission, or that have already been submitted to such a body for consideration. 

At the end of Tuesday night’s public hearing, Legislation Committee Chair and East Rock Alder Charles Decker urged his colleagues to work with the Elicker Administration in the coming weeks to tweak the proposed law’s math to increase the affordable set-aside percentages in each of those geographically organized ​“tiers.”

While the committee alders did not vote on any particular amendment Tuesday night, Decker said he’d like to see 30 percent affordability required on publicly owned land, 20 percent in the ​“core” zone, and 10 percent in the ​“strong” zone. He said he’d also like to see the entirety of Science Park included in the ​“strong” zone.

“I think the core of the proposal is very strong,” Decker said. ​“I think it is very good. I think we need to figure out the technical aspect with city staff about getting affordability up” in the various tiers defined by the new proposed zoning map.

Westville Alder Adam Marchand agreed: ​“We should aim to raise the bar a little bit more, if we can,” he said. ​“I think we should aim to be a little bit more ambitious in terms of affordability.”

After winning recommended approvals from the City Plan Commission and the Legislation Committee, the IZ proposal now advances to the full Board of Alders for further debate and a potential final vote.

Public Debate: Incremental Step; Too Little; Too Far

Much as during the Legislation Committee’s first public hearing on the IZ bill in early November, over a dozen members of the public turned out to praise the bill as a positive if incremental step towards promoting more affordable housing during the city’s market-rate apartment boom.

Others criticized the proposal for not going far enough in requiring greater affordable set-asides at deeper income restrictions. 

And one developer called in to warn that the bill as currently constructed might scare off investors entirely and lead to the drying up of an otherwise hot housing market.

“I think our city really needs inclusionary zoning to prevent further segregation of downtown and to create more affordable units within the areas that are seeing significant developer interest, like Wooster Square, like Long Wharf,” city Affordable Housing Commissioner Elias Estabrook said. ​“I think inclusionary zoning is an important way to get market rate developers to really contribute, to chip in, and not just ignore the” city’s need for more affordable housing.

West Hills resident and New Haven native Lynnelle Schmidt said the proposed IZ bill should ​“help us rein in runaway housing costs and prevent more working people from being pushed out” of the city by ever-rising rents. As a working mother with one child and another on the way, she said she can hardly afford city rents as they currently stand — and she’d rather not live in megalandlord-owned properties that are often ​“unsafe, unhealthy, and not maintained.”

Dixwell resident Nicole Neely said new luxury apartment complexes like the Winchester Lofts are ​“very beautiful,” but virtually impossible to afford for most people who live in the neighborhood. ​“I pay taxes. I work hard. We deserve neighborhoods with good jobs, quality affordable housing, and services and businesses geared toward our community,” she added. Passing the IZ bill ​“will send a message that we matter and that the city is listening to our cries against gentrification and displacement.”

Jewell White described moving to West Haven with her son after getting divorced and no longer being able to afford a place to live in her home city of New Haven. ​“I just wish there was more affordable housing, safe housing options for people like myself who want to do right.”

Weighing in in opposition to the IZ bill, community organizer Kerry Ellington said that the 5 percent affordable set-asides in the Tier 2 area — which includes parts of Dwight, Dixwell, Newhallville, the Hill, and Fair Haven — is way too low and might contribute to tenant displacement. ​“This plan incentivizes new construction to be 95 percent unaffordable,” she said. ​“This plan will erode away the fabric” of communities in Dixwell and Fair Haven. ​“The percentage of affordability needs to be extremely deeper.”

And Darren Seid, a New York City-based developer whose company Epimoni is building hundreds of new market-rate apartments on Olive Street and Fair Street in Wooster Square, cautioned the alders not to go ahead with a plan that might discourage further investment in New Haven.

He said he is a ​“big supporter” of inclusionary zoning in general. But ​“it must be done in a manner hat continues to keep investment rolling into the city. … If done improperly, it can dry up the investment in the city, therefore nullifying all of the hard work done by so many people.” He encouraged the alders to get more ​“development input” to make this IZ proposal ​“actually sustainable for the city.”

What About The In-Lieu Payments? What If Tenant Gets A Raise?

After the public hearing section of the meeting concluded, alders quizzed City Plan Director Aicha Woods, city Assistant Corporation Counsel Michael Pinto, and city-hired consultant Steven Reilly on some of the bureaucratic details and policy-minded intentions of the proposal.

How exactly are the in-lieu payments supposed to work? Decker asked. If the goal of the proposal is to increase the number of affordable units in town, ​“we don’t want to make the option of paying instead too attractive because we want units, we want apartments.”

Woods said that the in-lieu payments would go directly into an ​“affordable housing dedicated account or trust fund,” which in turn would be managed by the city’s Livable City Initiative (LCI) and would support ​“affordable housing in other projects” across the city.

Pinto said that the in-lieu payments are set at a high enough level to deter developers from using them simply because they don’t want to build affordable housing. He said the payment requirements come ​“very close to doubling the per-unit cost to construct” the building in question.

The in-lieu fees per unit would be between $210,000 and $225,000 for the ​“core” submarket, and between $168,000 and $176,000 for everywhere else in the city.

What would happen if an income-eligible tenant living in one of the deed-restricted affordable units gets a $20,000 raise at work? Decker asked. Does their lease not get renewed? Is their apartment no longer counted towards the development’s mandated affordable set-aside?

Reilly said that if a tenant gets a raise, ​“we don’t want to penalize that.” Instead, they would be able to ​“go up to 140 percent of the allowable AMI” for one of the deed-restricted affordable units. ​“That provides additional leeway in terms of making sure that you’re not evicting a tenant because they got a raise.”

“We’ve heard very little so far” at both the City Plan Commission and the Legislation Committee hearings from developers and their attorneys, Marchand said. What have they been saying to city staff about this proposed IZ law?

Woods said that some of the concerns she’s heard are in line with what Seid said in his public testimony Tuesday night. ​“I think there’s definitely excitement about the New Haven market and concerns that something might dampen that excitement,” she said. ​“More developers will come to where development is happening. If there is a dampening due to a perception that it’s not feasible to do a project, that will also discourage other developers who may be considering” building in New Haven.

City Deputy Economic Development Administrator Steve Fontana said that he has heard a wide range of responses from developers –some of whom are ​“intrigued” by the idea of working within an IZ law, some of whom are ​“deeply ambivalent,” and some of whom have serious reservations. ​“I can say unequivocally that they are not all in favor of it,” he said. ​“Generally speaking, they’re uncertain how it will work and how it will affect projects.” Nevertheless, he said, city staff thinks that the proposal on the table is both ​“coherent” and ​“sensible.”

And how exactly does the city plan on enforcing these rules to make sure that developers who reap the various city incentives, like tax abatements, provide the promised deed-restricted affordable units? Fair Haven Heights Alder Rosa Ferraro-Santana asked.

Woods said that LCI currently has ​“annual reporting forms for all projects that have any city subsidy in them.” Developers who participate in the IZ program would have to submit a similar compliance form to the city every year.

If LCI or the City Plan Department or the Building Department finds that a developer is violating the terms of the IZ agreement, she said, ​“the developer would receive some notification about that. It would put their ongoing tax benefits at risk if they’re not in compliance.”