INC WUSIO NARY ZO NING ANALYSIS 9
These assumptions further impact potential revenue levels as well as overall construction
costs.
The following section details the individual assumptions used to run the model, and how those data
points were collected. As mentioned, RKG collected primary and secondary data about residential
development in Nashua. RKG also performed several interviews with local real estate professionals
to verify those findings. That said, the model was constructed to enable the city to customize the
proforma analysis through data overrides. This flexibility in modeling allowed RKG to perform
sensitivity analyses on incorporating inclusionary zoning. This effort informed RKG’s findings.
Income Tiers — To assess an inclusionary zoning policy, determinations regarding household income
are required. Table 2 details the 2020 HUD Area Median Income by household size for the City of
Nashua. Household income limits were used to calculate affordable rents in Nashua. Area median
incomes in Nashua are high due to the inclusion of communities in Hillsborough County, which have
significantly median higher incomes than the City of Nashua. The higher income limits affect
affordability because the affordability thresholds are higher due to the higher incomes. For the
modeling exercise, RKG used the 4-person household income as the default for conducting the
analysis.
Table 2. FY 2020 Income Limits Summary - Nashua, NH
Household Size
Income Level 1-Person 2-Person 3-Person 4-Person 5-Person 6-Person
30% of AMI $23,050 $26,350 $29,650 $32,900 $35,550 $38,200
40% of AMI $30,720 $35,080 $39,480 $43,840 $47,360 $50,880
504 of AMI $38,400 $43,850 $49,350 $54,800 $59,200 $63,600
60% of AMI $46,080 $52,620 $59,220 $65,760 $71,040 $76,320
654 of AMI $49,920 $57,005 $64,155 $71,240 $76,960 $82,680
70% of AMI $53,760 $61,390 $69,090 $76,720 $82,880 $89,040
80% of AMI $55,950 $63,950 $71,950 $79,900 $86,300 $92,700
100% of AMI $76,800 $87,700 $98,700 $109,600 $118,400 $127,200
110% of AMI $84,480 $96,470 $108,570 $120,560 $130,240 $139,920
1204 of AMI $92,160 $105,240 $118,440 $131,520 $142,080 $152,640
140% of AMI $107,520 $122,780 $138,180 $153,440 $165,760 $178,080
Source: HUD, RKG, 2021
Rent Thresholds — The model calculates potential gross income by applying the market rate threshold
to market rate units, and a rent threshold equivalent to 30% of gross income (utilities included) for
income-controlled units. The market rate rents were calculated through RKG research of current rent
levels for new apartments built in the city over the last five years. The affordable rents were calculated
based on the HUD AMI thresholds. Table 3 details the thresholds for each income level used in the
financial model. What can be seen from the table is that the market rate rent falls between 80% and
100% of AMI, indicating that the market is building affordable units without an inclusionary zoning
policy.
