Stamford zoning board faces challenge: $13M in lieu of 47 units in new development

On Jan. 22, the Stamford Zoning Board will face a thorny decision regarding new apartments slated for a pair of seven-story multifamily properties to be built at 100 and 101 Clinton Ave.

The city’s regulations require developers to designate 10% of newly built units in housing developments with at least 10 units as below market rate (BMR) units to help increase the town’s affordable housing stock. Developers may instead opt for an in-lieu fee, paying into the Stamford Affordable Housing Trust Fund to offset the BMR units which will instead be offered at market rate.

In the case of the proposed development on Clinton Avenue, developers Carmel Partners are seeking to build 471 units on the properties in the heart of downtown Stamford, which are currently empty lots, but instead of including 47 BMR units they are offering to pay $12,953,280 directly into the fund in exchange for keeping every unit in the building at market rate.

Jason Klein, a partner at Carmody, Torrance, Sandak, Hennessey LLP represented Carmel Partners, the owners and developers of the site along the Rippowam River. Klein made the case that accepting the fee-in-lieu (FIL) donation was necessary for the zoning commissioners to approve if they want to make the biggest possible impact in addressing the ongoing housing crisis.

“We all know that housing affordability remains a significant challenge for too many residents across the state of Connecticut,” Klein said to the panel. “We’re in the middle of a housing crisis and we’re reminded of that on a regular basis.”

Klein cited statistics highlighting the need for more housing supply, particularly for residents with very low incomes. He pointed out that more than 11,000 renters in the city are either cost-burdened, spending more than 30% of their income on housing, or are severely cost-burdened and spending more than half of their income on housing – with half of those households making at least 70% below the area median income.

Klein compared a South End development which was slated to include seven BMR units which by paying the fee-in-lieu of $1.4 million was able to finance 17 apartments when nonprofits made use of the funds. Similarly, the 245 Atlantic development opted out of its BMR obligations to include 27 units for families making half of the area median income by paying $2.4 million into the city’s housing funds, which combined with $1.3 million in grant money yielded 53 units on Franklin Street priced for households earning between 25% and 35% of the area median.

Board member Jerry Bosak noted that switching to the fee-in-lieu model was a departure from what had originally been proposed.

“I sat on the board for a year,” Bosak reminded Klein. “So, what has changed? We had looked at and talked about these 47 units and it seemed like it was going to move forward. Now there’s no stomach for developing those BMR units. What changed? This is my issue from having sat on the board all this time. If you look back in the archives of the old meetings, it was all about offering these 47 units because they were downtown, it’s a great opportunity for these people in the BMR units, and we used that as kind of a showcase, and I was on board with it because of that. Now, you’re coming back to the board and saying, ‘We want to put it into the fee-in-lieu-of trust fund.’ So, I’m kind of betwixt and between on this, because I agree with what you’re saying and maybe the nonprofits can do it better but when this first came before us that was the showcase.”

Klein said that the past few months of market volatility had prompted the change, but that he would need to consult the client for further detail.

“Explain to me how nonprofits, even though they can only get 25% of a project funded through the housing fund they can build so many more units than your client can?” asked Zoning Board member William Morris.

Klein explained that nonprofit groups have comparative advantages in securing financing. They’re also able to get grants and avoid taxes that apply to for-profit developers. An emphasis on maximizing units provided over profit also contributes to a difference in approach that he allowed makes them better able to make headway in the housing crisis.

“There is often a commitment from the city up front to a lender or grantor” added Ralph Blessing, who as Land Use Bureau Chief and a member of both the Planning and Zoning and Stamford Affordable Housing Plan commissions seconded a number of Klein’s points. “It might also be easier to get money from the state for affordable housing projects.”

Asked why all funds aren’t simply directed to the trust fund instead of demanding any BMR units, Klein said that “It’s not cheap to write a fee-in-lieu check. It’s expensive to participate in the program, so when we come to this board with smaller more modest projects, a couple dozen townhomes, things of that nature, those folks can’t afford to make a fee-in-lieu payment.”

The zoning board discussed at length the timing of projects, with the significant contribution represented by the proposal leading to a discussion of fee-in-lieu structure in general, and the impact of delaying the availability of new units, especially given that no new affordable housing projects were in a “shovel ready position.”

Several representatives of nonprofits joined the public comment period to speak in favor of accepting the Carmel Partners proposal. Other private citizens weighed in to argue that BMR units are important tools for avoiding the over concentration of low-income families and making the amenities of expensive developments available to more of the population.

“I find myself in a very difficult position tonight,” said Cynthia Bowser, a Westside resident. “I’m very much in favor of deeply affordable housing but the Westside has served as a location for so many deeply affordable housing developments, and I think that the nonprofits need to talk to some of their renters or constituents to really get a feel of how people feel.”

In the end, the board voted 5-0 to accept the proposal, adding a significant windfall to the city’s affordable housing trust fund, which at the time of the meeting only had $500,000 in unallocated funds remaining.