The debate: More affordable housing or have developers pay into trust fund?
The conversation includes voices from local housing nonprofits
STAMFORD — A developer’s delayed request to make an approximately $13 million payment instead of adding affordable units to their new downtown apartment complex sparked a familiar debate about the policy called “fee-in-lieu” on Monday night at the Stamford Zoning Board.
Land use officials want more for-profit developers to pay into the city’s Affordable Housing Trust Fund instead of building units on-site, saying the money will help nonprofits finance developments affordable to people with extremely low income. Some local politicians and land use activists are distrustful of the policy, even though they acknowledge the city badly needs more “deeply affordable” homes, as they’re called in the industry.
This time, however, the conversation also included voices from local housing nonprofits, which put fee-inlieu funds to use. They lined up to speak during a public hearing.
“On-site (below-marketrate) units (are) the least efficient way to create affordable housing that I have encountered in a 50-year career,” said Jonathan Gottlieb, who heads the development arm of Charter Oak Communities, Stamford’s housing authority. “It’s hard to imagine that we would still be doing this after all the knowledge that we’ve had about what works and what doesn’t.”
The board did not vote on the special permit to substitute fee-in-lieu for affordable units, asking for more information from New York developer Carmel Partners about their motives.
Carmel received the board’s approval in March 2023 to build a 471-unit apartment complex along the Rippowam River. Under the approved plan, called Clinton Apartments, 49 apartments were to be deed-restricted at a below-market-rate rent — 47 of them at 50 percent of the area’s median income, one at 65 percent and the other at 25 percent.
But Jason Klein of Carmody Torrance Sandak & Hennessey, the attorney representing the developer, said their calculus has changed.
“It’s a volatile financial market these past several months and in approving the fee-in-lieu, that really gives my client a greater menu of options when it comes to finalizing their financing to deliver this project,” said Klein.
Zoning Board Chair David Stein said he needed “more specifics,” calling Klein’s answer “ambiguous.”
“Flexibility and tools and options don’t mean a lot to me,” Stein said.
Stamford’s Below Market Rate program requires 10 percent of any new housing development with at least 10 units to be affordable to people who make at least 50 percent of the area’s median income. An AMI of 50 percent means single residents can make up to $60,000 per year and still qualify for the housing, according to federal data.
Fee-in-lieu payments are a one-time payment based on the median annual income for a Stamford family of four. The figure is scaled up or down depending on the board’s approved income level. However, the most common way developers satisfy the requirement, officials say, is by building units on-site.
Reflecting Stamford’s growth, the majority of the units built end up being studios and onebedroom apartments, city data says. Last year, the program’s rent limits were $1,349 for studios and $1,606 for one-bedroom apartments.
Both development skeptics and city officials agree that the city needs more affordable housing for people with extremely low income, having sparred over the issue in multiple meetings over the past year. But fee-inlieu still has its detractors — development critics argue that the policy allows for-profit developers to exclude tenants who can’t afford high market-rate rent.
Housing advocates say that the best way to bring down prices is to build more dense housing to satisfy Stamford’s high demand.
Earlier this month, the Planning Board voted to recommend a compromise for Carmel Partners’ Clinton Apartments: approving half of the requested fee-in-lieu payment while having the developer fulfill the other half with BMR units at an income level above 50 percent. The Zoning Board did not discuss the Planning Board’s recommendation at Monday’s meeting.
Instead, board members asked questions about how the fee-in-lieu program works.
William Morris asked why nonprofits are able to use the funds to build more units at deeper affordability levels. Racquel Smith-Anderson questioned how much funds the city needs to meet Mayor Caroline Simmons’ stated goal of creating or renovating 1,000 affordable homes by 2025. Gerald Bosak Jr. asked where and when the funds would become affordable housing.
Initially, Klein and city land use staff attempted to field the questions. Not all of the questions were answered, but some ended up getting emphatic answers later on from the leaders of local housing nonprofits.
“With on-site, we’re essentially abdicating our affordable housing policy to a private developer and we just take 10 percent of whatever they decide to build,” said Richard Freedman, an affordable housing developer who also chairs Stamford’s Board of Finance.
Freedman referenced one of his recent developments, the David Martin Apartments in Springdale, where $1.4 million of fee-in-lieu went toward 17 two- and three-bedroom apartments for families making between 30 and 45 percent of AMI.
Rafael Pagan, Pacific House’s vice president of housing development, said funders like the state Department of Housing, the Connecticut Housing Finance Authority, Federal Home Loan Bank and others “look very favorably” upon projects that already have funds in tow.
“You all have heard that there are a lot of people that are at risk of being evicted. Only this type of housing is going to really provide the kind of support that (is) necessary,” Pagan said.
Gottlieb, from the housing authority, said concerns over “when and where” obscure the institutional hurdles and funding challenges which are necessary to build housing at deep affordability levels.
“The financial package that we put together includes several low-income housing tax credits, state bond funds, and, of course, you can’t apply for those until the zoning is 100 percent in place. And you can’t apply for those until your design … is up to 90 percent complete,” Gottlieb said before listing five more procedural steps.
Deeply affordable housing is most helpful for “people who are invisible in the community,” Gottlieb said. He mentioned school bus drivers, retail workers and childcare workers, among others.
“It takes a really long time. And so I’m really worried about this argument about, ‘When can they be ready?’” he added. “It doesn’t turn into a building for a couple of years probably, but they always do turn into buildings.”
At the end of the hearing, the board closed discussion on the item. Stein requested that Klein provide details about the developer’s motive for fee-in-lieu by Monday.