By Joe Creason

The Land Use Committee convened on Tuesday, October 19, to discuss a number of items on the agenda, some which had been discussed previously in a public hearing forum during an earlier committee meeting.

One such item was a request from the Mayor’s Office asking for the approval of amendments to the Zoning Ordinance for payments of Certificates of Occupancy. The issue had previously sparked a number of questions for Councilors.

“As an overview, having to make an upfront payment for a fractional buyout or an in-lieu payment can basically be a non-starter, especially for small and mid-sized developments, so they supported this in order to these projects financed and completed and then get the fractional payments at the certificate of occupancy,” said Land Use Committee Chair and Ward 3 Councilor Ben Ewen-Campen.

Ward 6 Councilor had a number of questions regarding the new system and how it will address the challenges which the Council has tried to manage through other strategies.

“We made the decision to the direction that we went back in 2017 having heard these concerns because we were very concerned about the delay in receiving the funds for affordable housing, if they were not to be forthcoming until a certificate of occupancy, particularly in the context of a project like Union Square,” Councilor Davis said.

While Davis noted the Administration’s view that the current approach is not working and needs to be adjusted, the councilor followed up on his line of questioning.

“Is it the case that the Union Square projects are well enough underway that there is funding in the affordable housing trust to do the necessary operations for affordable housing and make this change more palatable? That would make sense but I haven’t heard that particular argument made so far,” Davis said, “I want to make sure that we are conscious of the fact that we decided to go in a different direction so that we would get affordable housing money sooner when we made this decision initially so I would like to hear that this is no longer a concern and that going in this other direction would not impact our ability to develop affordable housing.”

According to Ewen-Campen, a fractional payment occurs when a building is permitted and the building has an odd number of units to factor into the proportional payment system by which the City then issues a certificate of occupancy. An example the councilor made was paying for 20 percent of a 23-unit building.

“Administratively its more effective for us to calculate the fractional payment when its due at certificate of occupancy, we have a better idea of what the development is going to be and that helps when we start pulling our market comps to calculate that payment,” said Inclusionary Housing Program Director at OSPCD Philip Crean.

Crean reiterated the fact that this ordinance should have a beneficial impact on smaller developers because of the heavy financial challenge that comes with making the fractional payment upon being granted a building permit versus a certificate of occupancy.

“The reason for that is construction lenders typically tie financing to issuance of a building permit so it creates a catch 22 for those developers we are looking to help,” Crean said.

According to Crean, the affordable housing trust is more well-funded now than it has been in the past. Receiving money at the issuance of a certificate of occupancy versus a building permit, will mean higher revenues for the Housing Division due to the factoring of market rate information while calculating payments as well as trends in housing.

The item was approved by the Land Use Committee and recommended to the full City Council.