Thomas Breen 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. Or not?
Uh oh.
That was the prevailing sentiment Wednesday night when City Plan Commissioners realized that — perhaps — the city’s new “inclusionary zoning” law may not do what it’s supposed to do.
City of New Haven
That revelation was at the center of a two-hour special meeting of the City Plan Commission. The virtual meeting took place online via Zoom.
The question that took up the bulk of Wednesday’s meeting: whether or not the “inclusionary zoning” (IZ) law that the Board of Alders passed on Jan. 18 will need to be rewritten, at least in part, to ensure that the actual text of the legislation allows the city to cap rents on deed-restricted affordable units to be included in new market-rate apartment complexes.
That was clearly the intent of the law, which had been in the works for years, and had recently completed several months of intensive review and public hearings before the City Plan Commission and the Board of Alders Legislation Committee.
But commissioners discovered Wednesday that the enabling language in the law itself is less clear than they had previously realized.
“Let’s just get the answers the best we are able, and stay calm,” Westville Alder and City Plan Commissioner Adam Marchand said towards the end of the meeting after the commissioners had spent over an hour parsing the passed law’s text.
“If we need to take a little bit more steps down this road [of amending the IZ law], then we’ll take them. And we’ll take them deliberately and with good intentions and with dispatch.”
That continued review will take place at the next scheduled special City Plan Commission meeting on Feb. 9.
New Site Plan Workflow
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Wednesday night's virtual City Plan Commission meeting.
So… what happened? And what’s the potential problem with the law?
The only item on Wednesday night’s agenda was the City Plan Commission’s planned review of a draft version of the so-called “Inclusionary Zoning Monitoring and Procedures Manual.”
That 27-page document describes in detail how the city plans to enforce the IZ law passed by the alders on Jan. 18.
In a bid to ensure that some kind of economic integration comes out of New Haven’s ongoing market-rate apartment boom, the years-in-the-making IZ legislation requires — at least in intent — 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). In exchange for complying with that law, developers can take advantage of incentives including tax breaks, density bonuses, and waived parking requirements.
The IZ law as adopted by the Board of Alders is slated to go into effect on Feb. 18.
As City Plan Director Aicha Woods noted at the top of the meeting, Wednesday night was an opportunity to discuss and review the IZ manual — not the IZ law itself.
“The legislation has been passed,” she said. “So tonight, we’re really focusing on the implementation, on how the city is going to bring the development applications through their process, and make sure that the affordable housing component is going to the people who qualify for it. We’re meeting tonight and asking you to adopt this [manual] as a framework for us to do our job.”
And so Woods walked the commissioners through the planned new workflow.
City images
Planned IZ application and enforcement workflows for new developments.
That would include having developers submit an “inclusionary zoning certificate application” to the city alongside all of the other more technical documents — related to soil erosion, stormwater management, heat reflectivity, etc… — that go into a typical site plan review.
The City Plan Commission would then review and vote to approve or reject the affordability plan as part of the overall site plan application.
Then the Livable City Initiative (LCI) would be the main city agency responsible for making sure that developers follow through on their affordable-set-aside commitments after an apartment building is actually constructed, open, and rented out to tenants.
The manual includes a section called “Calculating Affordable Rents,” which identifies specific rent caps for IZ-compliant local apartments. Those dollar amounts correspond to annual published calculations by the federal Department of Housing and Urban Development (HUD).
Click here to read the draft IZ manual in full, and here to read the text of the final, approved IZ bill.
"Absurd" Outcome?
IZ-unit rent caps, as defined in the draft manual.
After discussing at length a series of detailed and largely procedural concerns about the manual as submitted by local attorney Carolyn Kone, the commissioners took up the only other bit of public testimony sent in for Wednesday night’s public hearing: a half-page email written by East Rock resident Kevin McCarthy.
“The rent limits in the manual are reasonable and consistent with the ordinance’s stated purpose,” McCarthy’s email begins. “But there is NO provision in the ordinance to limit rents.
“The ordinance requires a specific portion of units to be reserved for households with incomes below 50% of Area Median Income. There is nothing in the ordinance that limits rents for the reserved units. I think the Board of Alders should have adopted rent limits like those in the manual. But the commission can’t do what the BOA failed to do.”
Oops.
City Assistant Corporation Counsel Michael Pinto took a first stab at rebutting McCarthy’s critique.
He said that the City Plan Commission is well within its rights to adopt an IZ manual that sets specific rent caps because of one sentence buried at the end of the new IZ law that states that the manual shall include “such other regulations … as may be necessary to effect the purposes of this ordinance.”
“Because we were designing this to be as flexible as possible,” Pinto said, “that clear direction by the Board of Alders to formulate the directions to implement” the IZ law allows the manual to set rental caps.
If the City Plan Commission were prohibited from doing that, he said, the result would be … well, “absurd.” That would mean that, per the newly passed law, the city could require developers to set aside a certain number of apartments for renters making 50 percent or less of the AMI — but the developers could still charge whatever they wanted in rent, well above what someone at that income level could afford.
“The result would be absurd and would defeat the entire purpose of the ordinance.”
City Plan Commissioner Carl Goldfield pushed back on that interpretation of the law.
“I am not convinced by Attorney Pinto’s argument that that very broad language at the end of the [ordinance] allows us or the City Plan Department to start to impose rent limits. … The Board of Alders needs to specifically authorize a rent cap on these units. It’s not within our purview or the purview of City Plan to do that.”
Marchand, too, was unconvinced by Pinto’s argument. He pointed to another section of the newly passed law that he said did give more explicit permission for the city to establish rental caps on IZ-compliant units. At least in some cases.
That section states that, in the downtown “Core Market”, applicable developments “must set aside not less than ten percent (10%) of the total number of dwelling units as Affordable Housing priced at fifty percent (50%) of AMI as defined by HUD” and an additional 5 percent of units for renters with Section 8 federal housing subsidies.
That word “priced” is some “key verbiage there,” Marchand said. “I take that to mean that’s the actual rent that can be charged.”
What is “a little bit unfortunate,” he continued, is that the very next sections of the law — which describe mandated affordable-unit set-asides in the downtown-adjacent “Strong Market” and citywide — do not even use the word “priced.”
Instead, that part of the law simply states that, for example, applicable developments in the Strong Market “must set aside not less than five percent (5%) of the total number of dwelling units as Affordable Housing for Low-Income Households.”
(In the Definitions section of the law, “Affordable Housing” is defined as “residential housing, which is restricted for occupancy by households that have a combined total annual income for all members that does not exceed a designated area median income (AMI) as defined by HUD.” And “Low-Income Household” is defines as “a household in which the combined total annual income for all members of a household does not exceed fifty percent (50%) of the area median income.”)
That absence of the word “priced” from those key sections of the law may be a “vulnerability or a problem with the ordinance language,” Marchand said. And may require a technical amendment by the Board of Alders.
Watch Out For Developer Lawsuits
Thomas Breen file photo
City Plan Commissioner Vice-Chair Ed Mattison (center) and Commissioner Adam Marchand (left).
City Plan Commission Vice-Chair Ed Mattison fleshed out the potential consequences of such a “vulnerability.”
“There’s a lot of money at stake. And when there’s a lot of money at stake, lawyers get hired,” he said.
He said the commission would be doing a disservice to the city if it signed off on a manual that may not be in compliance with the law it’s supposed to follow.
That’s because a developer could very well take the city to court and argue that the city has no legal right, per its own newly passed law, to enforce rent caps in IZ-compliant buildings.
“We’re giving developers ammunition to do things that we don’t think should happen,” Mattison said. “Some of my best friends are developers, but in truth, they have a different notion of the public interest than we do, and we could put the city in some jeopardy. It’s not worth it, in my opinion.”
Woods urged the commissioners to take into consideration the months’ worth of public hearings on the IZ law, which saw members of the public come out and testify in support of the city doing something to increase the supply of below-market rent apartments.
“We’ve been given a mandate by the Board of Alders to implement this affordable housing legislation that they just passed,” Woods added.
Markeshia Ricks file photo
Chair Radcliffe.
City Plan Commission Chair Leslie Radcliffe recognized that urgency for more affordable housing, and that implementation mandate from the Board of Alders.
And yet, she said, the commission should not sign off on a manual when existential questions about the underlying law remain unresolved.
“We’re not talking about changing the entire ordinance,” she said. “But there are some concerns that there are things in there that need to be better, and that we know need to be better, and that can be better.”
So the commissioners voted to continue their review of the proposed IZ manual during a new special meeting scheduled for Feb. 9. They gave city staff explicit instructions before then to take a look at the language of the underlying IZ law and to see if, per their analysis, the law does indeed allow for rental caps on affordable units.
If not, they said, the city staff should present on what kind of public review and noticing process needs to take place in order for the alders to apply a technical amendment to the law: Will it need to go again through the City Plan Commission, the Board of Alders Legislation Committee, and the full Board of Alders? Is there another route it could take? And will the alders have to extend that planned Feb. 18 start date for IZ?
"Thank You, Director Woods. Thank You, Director Woods"
Before the meeting concluded, the commissioners stressed that their concerns about the language of the IZ law did not take away from all of the hard work that city staff have spent over the past few years shepherding the law through the public hearing and approval process.
“I think we owe [Director Woods] a great debt,” Mattison said, alluding to how Mayor Justin Elicker recently announced that he will not be renewing her appointment as the head of City Plan. “Even if it takes a few weeks longer to happen, it’s really a magnificent way of moving the city forward. We owe her thanks for that, and I think she’ll be able to leave this position with the knowledge that she has really made an enormous difference for what happens to the city, for the better.”
Radcliffe agreed. “Thank you, Director Woods. Thank you, Director Woods. Thank you, Director Woods,” she said with a smile. And thanks to all of city staff who have support the City Plan Commission, Radcliffe continued. But, one more time for good measure, “Thank you, Director Woods.”
Kevin is correct that the City's Inclusionary Zoning policy does not limit the amount of rent that landlords can charge for Affordable Housing. However, New Haven's existing zoning regulations do provide such authority for limiting rents and utilities to 30 percent of tenant's household income. How is it possible that the people in charge of implementing the zoning ordinance not know this?