Special Board of Aldermen 12-21-2021 Page 2
Thank you. So Kyle is going to be available to answer any questions that may arise. So if | may, Mr. Chair?
Chairman Tencza
Please.
Tim Cummings, Economic Development Director
Thank you. So just a couple of slides to help provide an overview and an orientation to the topic we're discussing this
evening and of course, we are here to ask for your favorable recommendation on Ordinance O-21-073.
So RKG, our planning consultant, performed a housing market analysis for us identifying challenges and needs that
was done over the last over the last couple of years. With that, they identified the idea of improving our existing
inclusionary zoning bylaws that we have currently on the books just to update it to the current market needs. So they
made a recommendation that we improve our inclusionary zoning policy but to do that, we would first need to study
the financial climate and the policies that would go with it. So further study was done this past spring and into the
summer and this fall, we convened some working sessions with this body here, with the Board of Aldermen which
ultimately developed the language that got crafted and put into O-21-073.
So some of the findings that we found out in the housing study was, you know, Nashua is growing. The population is
getting more diverse. The income disparity is increasing. One and two bedroom homes are driving the growth.
Downtown should be a focus of housing and housing development to create a mixed use environment.
Predominantly, the housing stock is single family and we know that there is increasing demand, and increasing rents,
and housing costs are going up. The housing study came up with some high level identified findings to growth,
affordability, minimize displacement, try to improve housing in the downtown, and making sure we leverage the
existing resources was outlined in the study.
Then specifically, a strategy that | referenced just a second ago was the idea of updating our inclusionary zoning. We
will need to study various elements, which we did. What size of development? Do we want to apply the IZ to? Where
should the IZ be applied in the city? How many units should be set aside for the inclusionary zoning? These types of
questions we studied over the last six months or so. We've had a conversation on it. Ultimately, what ended up in the
ordinance before you this evening is what we discussed. So to do that type of study, we had to undertake the
financial feasibility process which we did some data collection to understand what the market conditions are,
developed some scenarios through in a pro forma, then looked at what type of strategies would be necessary to try to
get the policy goals that we've articulated, and then memorialize that all in a report.
So that was the work that we did to develop the inclusionary ordinance recommendations today. Of course what we
needed to do is balance the public and private interests. We wanted to make sure that we created a policy that was
revenue neutral and the biggest way to do that is to provide density bonuses for the inclusionary housing. Ultimately,
it led to this chart here - this table, which is the main thrust of the ordinance that's before you and it's what we
discussed previously. | will note that we're taking a phased approach, which if this ordinance is to be adopted,
January to June, you know, development with units less than 49 this would not take effect or be applicable. So it's
only for larger scale type of development up until July 1°". We felt that that was important to make sure we provided
some stability into the marketplace and that was a recommendation made by this body when we met with you earlier
in the fall.
So essentially what this table outlines is, you know, units that are less than 10 citywide would not have an inclusionary
component. Again when | say inclusionary mixtures so folks understand what I'm referencing, when we're talking
about setting aside a unit depending on where you are, the percentage changes, but a unit or couple units depending
on the size of the development to be dedicated as “affordable housing”. Affordable housing as we've defined it is 80%
of AMI. AMI stands for area median income and that is what we're hoping to try to do to get a mixed income approach
to development in an effort to achieve more affordability into the marketplace.
So again, units that are under 50, you would then start to see an inclusionary component. We're saying that 10%
would be set aside as “affordable” at 80% AMI. We are trying to actually have the affordable units constructed as
much as possible. We are not trying to have people pay us a payment in lieu of fee at this time under this scenario
when you're talking about ownership, but we are suggesting it through special exemption process at the rental units
starting at 10 units or more. There's a value associated of $37,000 per unit at rental and if it's an ownership model, it
would be 100,000 per unit or per lot. The density bonus is pretty much one for one. For every one affordable housing
unit you provide, you'd get an additional one housing unit to be constructed on top of what you were planning on
unless you're doing it in the downtown, then for every one affordable housing unit you'd be providing, you'd be given
the ability to construct two and a half units. So that's just a quick outline of the chart in front of you and what is
