Thomas Breen file photo
300-unit apartment complex under construction on Union Street in Wooster Square. Under new law, buildings like these would have to set aside affordable apts.
Thomas Breen photo
Legislation Committee Chair and East Rock Alder Charles Decker with City Plan Director Aicha Woods after Tuesday's vote.
Developers looking to partake in New Haven’s market-rate apartment boom will now be required to set aside a certain percentage of units at deed-restricted affordable rents, as the Board of Alders granted final approval to an “inclusionary zoning” law years in the making.
That was the outcome of Tuesday night’s latest in-person meeting of the full Board of Alders, which took place in the Aldermanic Chamber on the second floor of City Hall.
In a 25 – 1‑1 vote, alders overwhelmingly approved an amended version of one of the Elicker Administration’s top legislative priorities.
East Rock Alder Anna Festa cast the sole dissenting vote out of concerns about the bill’s tax breaks for developers. Quinnipiac Meadows Alder Gerald Antunes abstained.
The inclusionary zoning, or “IZ,” text and map amendment updates the city’s zoning code to 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). That federally defined income level currently shakes out to around $51,450 per year for a New Haven family of four.
In exchange for constructing those below-market-rent apartments, developers can wrack up a host of “incentives” — from 10-year local tax abatements to minimum parking waivers to permission to build smaller units than otherwise allowed by existing zoning law.
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How and where the IZ law’s affordable-set aside requirement is applied comes with plenty of caveats.
It is not retroactive to already constructed apartment buildings. It does not apply to any proposed developments already in some part of the city application pipeline. And it does not go into effect until Feb. 18.
It focuses its local legislative impact primarily on future 10-unit-plus apartment buildings in and around downtown. (See more below for a detailed breakdown of the law’s key provisions.)
Alders argued Tuesday night that the new rule allows the city to influence residential development in the direction of affordability more than any other local law in recent memory.
Thomas Breen photo
East Rock Alder Decker on Tuesday.
“Inclusionary zoning can create affordable housing that the market would not build on its own,” Legislation Committee Chair and East Rock Alder Charles Decker said Tuesday.
“It can increase the affordable housing supply, foster mixed-income development, and prevent future luxury developments in areas like Downtown and East Rock from becoming de facto gated communities.”
Downtown Alder Eli Sabin.
Downtown Alder Eli Sabin agreed: “I believe this is one of the most important pieces of legislation that the board has voted on in a number of years, at least since I’ve joined this body,” he said.
“This ordinance will make sure that in the core of our city, future growth and development will benefit everyone,” Sabin continued. “We will no longer have segregated luxury development. Instead we will have mixed-income development that will provide housing to the folks who need it most.”
Fair Haven Alder Jose Crespo.
This bill will certainly not solve all of New Haven’s affordable housing problems in one fell swoop, Fair Haven Alder Jose Crespo said. But it is “a step in the right direction. In Fair Haven, this should have happened yesterday.”
The city first seriously started considering an IZ law after the Affordable Housing Task Force recommended an IZ study as part of its January 2019 report. Soon after taking office, Mayor Justin Elicker tapped the City Plan Department to undertake such a study with the help of Harvard student researchers. The Elicker Administration then formally introduced a proposed IZ law in June 2021, leading to a host of public hearings and debates before the City Plan Commission and the Board of Alders Legislation Committee.
Supporters backed the bill as a necessary step towards boosting affordable housing supply at a time of surging market-rate and luxury development. Critics cautioned that too much government intervention in the housing market might stymie development altogether — or, on the other side of the spectrum, that the bill’s affordable set asides didn’t go far enough. And the ambivalent shrugged their shoulders at the likely marginal impact of IZ. (Click here for a previous article about that range of views on IZ among members of the city’s Affordable Housing Commission.)
What The Bill Does
The new “inclusionary zoning overlay,” with the "Core" area in dark gray and the "Strong" area in light gray.
The amended version of the IZ bill that alders approved Tuesday night is largely the same as the one that the Elicker Administration first introduced back in June 2021, and that won a favorable recommendation from the Legislation Committee in December.
Click here to read the full text of the final, approved bill.
Some of its key provisions include:
• New or significantly rehabbed buildings with 10 or more apartments in the downtown “Core” area must set aside 10 percent of units at 50 percent AMI and another 5 percent for tenants with federal Section 8 rental subsidies. (Significantly rehabbed refers to renovations that increase a relevant apartment building’s assessed value by more than 50 percent.)
• In the downtown-adjacent and Westville “Strong” areas, new or significantly rehabbed buildings with 10 or more apartments must set aside 5 percent of units at 50 percent AMI.
• In the rest of the city, new or significantly rehabbed buildings with 75 or more apartments must set aside 5 percent of units at 50 percent AMI.
• On publicly owned land that the city sells to a developer, new or significantly rehabbed buildings with 10 or more apartments must set aside 20 percent of units at 50 percent AMI.
• Developments exempted from this law include “prior approved” and “prior submitted” projects. Those refers to otherwise-eligible developments for which applications have already been submitted to the Board of Alders, City Plan Commission, Board of Zoning Appeals, or Office of Building Inspection and Enforcement prior to Feb. 18, 2022. Also exempted are student housing, dormitories, and rooming houses.
• The City Plan Commission must also “promulgate regulations to implement the intent and purposes” of the IZ law. Those regulations shall be compiled in a so-called “Inclusionary Zoning Monitoring and Procedures Manual,” and shall include guidelines around permitting and approvals, tenant selection and protections, and monitoring and enforcement. City Plan Director Aicha Woods told the Independent after Tuesday’s vote that her department has already begun putting such a manual together, and that the city plans to submit the proposed guidelines to the City Plan Commission for review in early February.
• The city and the alders must re-evaluate the IZ law two years after adoption “with a goal of increasing the affordable housing set aside required under this Ordinance” to 20 percent in the Core area, 10 percent in the Strong area, and 30 percent on publicly owned land. That re-evaluation must also include the goal of “expanding” the boundaries of the newly adopted inclusionary zoning map. (That is, to make the Core and Strong areas cover larger swaths of the city.)
The incentives and perks available to developers who comply with the city’s new IZ law, meanwhile, include:
• A 10-year tax abatement that cuts local property taxes by 30 percent for applicable apartment complexes in the Core market, and by 5 percent for applicable apartment complexes in the Strong market.
• A floor-area ratio (FAR) bonus of up to 25 percent above the permitted FAR in the underlying zone. FAR refers to a building’s total amount of usable floor area in relation to the size of the piece of land it stands on.
• No parking minimums, meaning that compliant residential developments are not required to build any on-site parking spaces.
• A density bonus that allows for a density of 600 square feet for the average gross floor area per dwelling unit. Most residential zones in the city have a gross floor area minimum of 1,000 square feet per unit.
Finally, developers can still buy their way out of the affordable-set aside requirement entirely.
Decker said on Tuesday that that so-called “in lieu of” fee is roughly $200,000 per unit in the Core market, and roughly $160,000 per unit in the Strong market.
The law itself defines the payment in-lieu fee as “based upon a tiered payment in-lieu system that will be reassessed every three years from the effective date of this Section’s adoption. The fees and any assessed premium is available in the New Haven Affordable Housing Manual and is on file with City Plan Department and the Livable City Initiative.”
Tax Break Debate
East Rock Alder Anna Festa (center) listening in during Tuesday's public caucus.
The only alder on Tuesday night to speak up critically of the IZ bill, and ultimately cast a vote against it, was East Rock’s Anna Festa.
She did so after quizzing city Assistant Corporation Counsel Michael Pinto during the Public Information Caucus before Tuesday’s meeting about the 10-year tax breaks included in the bill.
Can a developer take advantage of both the 10-year tax breaks included in the IZ bill as well as the seven-year tax assessment deferral program, which is open to all other large apartment buildings in the city, at the same time and for the same project? Festa asked.
They can, Pinto replied.
That means a developer can essentially stack the 10-year IZ tax break on top of a separate, concurrent seven-year tax assessment deferral for the same building.
Learning about the option of stacking local tax breaks on top of one another ultimately pushed Festa to vote against.
“I want to support this,” she said. “But you know what the developers are going to do. They’re going to increase the market-rate rents in order to make up for what they’re losing in affordable housing, and we in this city are giving them all these tax breaks between deferrals and abatements. So they’re getting both.”
That’s disturbing, she said, “because eventually we’re all going to need affordable housing if we continue on this tend of constantly giving developers breaks.”
Dixwell Alder Jeanette Morrison.
Dixwell Alder Jeanette Morrison responded that the tax breaks included in the IZ bill are necessary incentives for requiring private actors to build below-market rate apartments.
“We have to provide incentives in order to ask these people with their own money, who are building with their own money, to make sure that there’s affordable [housing] in there,” she said. “It has to work for them to.”
Ms Morrison you know very well that the so called incentives are just another way of dying you’re giving renters and developers benefits and taxing homeowners and other renters to pay for it.