As of September 11, 2014 TOWN OF DANVERS Affordable Housing Production Plan Prepared By: LDS Consulting Group, LLC 233 Needham Street Newton, MA 02464 617-454-1144 1| P ag e L DS C ons ul ti ng G r oup, L LC Table of Contents Glossary of Terms ......................................................................................................................................... 4 Section 1: Executive Summary ................................................................................................................... 7 Danvers Affordable Housing Trust ........................................................................................................ 7 Methodology .............................................................................................................................................. 7 Definitions .................................................................................................................................................. 8 Acknowledgements .................................................................................................................................. 9 Section 2: Summary of Key Findings ....................................................................................................... 10 Community and Demographics ............................................................................................................ 10 Housing .................................................................................................................................................... 11 Subsidized Housing Inventory and Affordable Housing Supply .................................................... 11 Affordability Gap .................................................................................................................................... 13 Stakeholder Interviews ........................................................................................................................... 13 Zoning ....................................................................................................................................................... 14 Constraints ............................................................................................................................................... 14 Demand for Housing .............................................................................................................................. 15 Section 3: Demographic Analysis............................................................................................................. 18 Community Description ......................................................................................................................... 18 Transportation ......................................................................................................................................... 20 Health Care .............................................................................................................................................. 20 Senior Services ......................................................................................................................................... 20 Veterans Services ..................................................................................................................................... 21 Methodology ............................................................................................................................................ 22 Population ................................................................................................................................................ 22 Age Distribution ...................................................................................................................................... 24 Race ........................................................................................................................................................... 26 Households .............................................................................................................................................. 26 Household Type and Size ...................................................................................................................... 27 Household Size ........................................................................................................................................ 28 Family Growth ......................................................................................................................................... 28 Household Income .................................................................................................................................. 29 Rent Burdened ......................................................................................................................................... 30 Housing Cost Burden ............................................................................................................................. 31 Poverty ...................................................................................................................................................... 32 Education .................................................................................................................................................. 33 Employment ............................................................................................................................................. 34 Commute to Work ................................................................................................................................... 35 Unemployment ........................................................................................................................................ 36 Section 4: Housing Characteristics ........................................................................................................... 39 Housing Units .......................................................................................................................................... 39 Age and Condition .................................................................................................................................. 39 Housing Type .......................................................................................................................................... 40 Housing Tenure ....................................................................................................................................... 40 2| P ag e L DS C ons ul ti ng G r oup, L LC Building Permit History ......................................................................................................................... 41 Vacancy ..................................................................................................................................................... 42 Assessed Valuation ................................................................................................................................. 43 Tax Rate and Tax Bills............................................................................................................................. 44 Municipal Services/Cost ......................................................................................................................... 46 Section 5: Affordable Housing Inventory ............................................................................................... 48 Affordable Housing Defined ................................................................................................................. 48 Chapter 40B .............................................................................................................................................. 49 Subsidized Housing Inventory .............................................................................................................. 49 Affordable Rental Housing .................................................................................................................... 50 State Public Housing ............................................................................................................................... 51 Federal Public Housing .......................................................................................................................... 52 Public Housing in Danvers .................................................................................................................... 52 Existing Private Affordable Rental Housing ....................................................................................... 53 Planned Affordable Rental Housing .................................................................................................... 57 Market-Rate Rental Housing ................................................................................................................. 59 Affordable Homeownership .................................................................................................................. 60 Planned Affordable Ownership Housing ............................................................................................ 60 Market-Rate Ownership Housing Pricing and Sales Analysis ......................................................... 62 Multiple Listing Service ......................................................................................................................... 64 Foreclosure Data ...................................................................................................................................... 67 Section 6: Stakeholder Interviews ............................................................................................................ 70 Section 7: Demand Analysis ..................................................................................................................... 73 Affordability Gap .................................................................................................................................... 73 Homeownership .................................................................................................................................. 73 Rental .................................................................................................................................................... 75 Section 8: Zoning Review .......................................................................................................................... 80 Section 9: Funding Mechanisms For Affordable Housing ................................................................... 84 HOME Funds ....................................................................................................................................... 84 Section 10: Constraints on Future Development ................................................................................... 86 Section 11: Affordable Housing Goals .................................................................................................... 88 Housing Unit Growth Analysis ............................................................................................................ 88 Danvers Housing Production Program ............................................................................................... 89 Section 12: Implementation Strategies ..................................................................................................... 91 Educational Strategies ............................................................................................................................ 91 Zoning and Planning Strategies ............................................................................................................ 93 Housing Inventory Preservation Strategies ......................................................................................... 95 Housing Production Strategies .............................................................................................................. 95 Short Term Action Plan .......................................................................................................................... 99 Appendix A: Subsidized Housing Inventory ....................................................................................... 102 Appendix B- Danvers Subsidized Housing Units Map ....................................................................... 103 Appendix C- Map Showing EFLA Units ............................................................................................... 104 References ................................................................................................................................................... 105 3 | Pag e L DS C ons ul ti ng G r oup, L LC Glossary of Terms ACS – American Community Survey – a survey prepared and conducted by the US Census that estimates population, housing, social, and economic statistics in the years between the decennial censuses. Affordable Housing – Housing with costs at or below 30% of a household’s annual income. AMI – Area Median Income - Midpoint in the family-income range for a metropolitan statistical area or for the non-metro parts of a state. CDBG – Community Development Block Grant – Block grants that fund activities such as affordable housing, anti-poverty programs, and infrastructure development. Block grants are sums of money granted by the federal government to a regional government with only general provisions as to the way it is to be spent. Chapter 40B – A state statute, which enables local Zoning Boards of Appeals to approve affordable housing developments under flexible rules if at least 20-25% of the units have long-term affordability restrictions. Also known as the Comprehensive Permit Law. CPA – Community Preservation Act CPC- Community Preservation Committee- DAHT- Danvers Affordable Housing Trust – made up of 7 trust members and staffed by Susan Fletcher, successor to the Danvers Affordable Housing Committee DHAT- Danvers Housing Assistance Trust- now dissolved Deed Rider - Addendum to a deed that guarantees affordability status for a unit through future sales. DHCD – Department of Housing and Community Development Esri – Data source that projects statistics such as population, income, and households based on US Census data EFLA - Extended Family Living Area FMR - Fair Market Rent - Gross rent estimates. They include the shelter rent plus the cost of all tenant-paid utilities, except telephones, cable or satellite television service, and internet service. 4| P ag e L DS C ons ul ti ng G r oup, L LC HOME funds - Formula grants to States and localities that communities use - often in partnership with local nonprofit groups - to fund a wide range of activities that build, buy, and/or rehabilitate affordable housing for rent or homeownership or provide direct rental assistance to low-income people. Household vs. family – According to the US Census, a family is a group of related individuals including a householder and at least one more person. A household is a group of individuals that may or may not be related with one head of household. A household may include only one family. HUD – Department of Housing and Urban Development Inclusionary zoning - Planning ordinances that require a share of new construction to be designated as affordable for households with low to moderate incomes. Low-income vs. very low-income – Low-income households are those households making at or below 50-80% of the Area Median Income. Very low-income households are those households making below 50% Area Median Income Median Income – A central point in a sample of household incomes where half of the income range is above the median point and half of the income range is below the median point. MLS – Multiple Listing Service Rent Burdened – Households that are paying more than 30% of their annual income towards rent. Severely rent burdened households are those households paying more than 50% of their annual income towards rent. Section 8 – Program through which the government authorizes housing assistance payments to private landlords in order to provide housing for low-income households. SHI - Subsidized Housing Inventory – A listing of all units within the state that receive federal or state-level subsidies and have the appropriate paperwork filed to be considered affordable under Massachusetts Laws. Stakeholder – an individual, group of individuals, or organization with an interest in the issue at hand. Subsidized Housing - Housing for moderate to low income individuals and households supported by government funding. Households pay 1/3 of their income towards rent and the government pays the remainder. The Warren Group – Data source that provides housing sales and building permit data from Banker and Tradesman based on individual municipality’s registry of deeds. 5 | Pag e L DS C ons ul ti ng G r oup, L LC ZBA – Zoning Board of Appeals 6 | Pag e L DS C ons ul ti ng G r oup, L LC Section 1: Executive Summary The Town of Danvers hired LDS Consulting Group, LLC (LDS) with a goal to not only identify the supply and demand for affordable housing in Danvers but to also provide a strategic plan to assist the Town in determining how it should best direct and leverage its resources to meet the Towns’ affordable housing needs. LDS has created an Affordable Housing Needs Assessment and Affordable Housing Production Plan (Plan) for submission to the Massachusetts Department of Housing and Community Development (DHCD). Dufresne-Henry, Inc. prepared a Community Development Plan – Housing & Economic Development Strategy in June 2004 and LDS prepared a Study on Housing Needs in Downtown Danvers in Downtown in June 2010. Since these studies, the Town of Danvers has created the Danvers Affordable Housing Trust (DAHT). Danvers Affordable Housing Trust The Town of Danvers Affordable Housing Trust (“DAHT”) was established in 2013. The general purpose of an affordable housing trust, as stated in Massachusetts General Law, is to create and preserve of affordable housing for the benefit of low and moderate-income households. This action by Town Meeting authorized the Board of Selectmen to appoint a Board of Trustees of the DAHT, which was required to include no less than five (5) trustees, at least one (1) of whom is also a current member of the Board of Selectmen. The following Trustees were appointed by the Board of Selectmen and the Trustees elected members to various board positions as noted: Gardner Trask, Chairman, Carla King, Vice Chairman, Sally Calhoun, Treasurer, Tish Lentine, Clerk, John Alden, Donald Gates and Charles Desmond. The Trust is staffed by Susan Fletcher, Assistant Director of Planning & Human Services. Methodology LDS reviewed existing studies and plans. Demographic and housing data for the town of Danvers and surrounding communities (the “Study Area”) were obtained by reviewing the latest Census data, including American Community Survey Data (“ACS”), local assessment information, Esri Reports and other sources. Esri projects trends in population, households and other matters in five-year increments. Using this demographic data, LDS then compared Danvers to its neighboring towns as well as Essex County and the Commonwealth of Massachusetts. The ACS is a nationwide survey designed to provide communities with a fresh look at how they are changing. It is a critical element in the Census Bureau’s reengineered decennial census program. The ACS collects and produces population and housing information every year instead of every 10 years. However, the data sample is significantly smaller than the summary field data collected in the regular census and therefore, in smaller municipalities, there are larger margins of error. 7 | P age LDS also examined the housing inventory for the Town of Danvers. This was done by reviewing past studies and interviewing local officials and property managers. The Multiple Listings Service, Warren Group and other sources were also used to understand the historic and current housing market. In addition to creating a housing inventory, LDS has provided an overview of the Town of Danvers Zoning Bylaw and local initiatives that promote and fund affordable housing in Danvers. This information was gathered through interviews with local officials, a review of the Zoning Bylaw and other research. We also included a summary of the potential constraints on future development. LDS interviewed Danvers officials and examined past studies to obtain this information. All of this research took place in September and October of 2013, and therefore the information that is contained in this plan is based on that specific point in time. All of the information was then used to develop affordable housing goals and implementation strategies for the Town of Danvers. This report is reflective of the data, market conditions and conclusions considered at this point and time. The information furnished by others is believed to be reliable. However, no warranty is given for its accuracy. The report, or a copy thereof, may not be used for any purposes other than those set forth herein without the written consent of the author, and in any event, only with the proper written qualifications and only in its entirety. We have reported our findings in summary form in Section 2, and matters are explained in more detail in the sections that follow. Definitions According to the United States Census, a family includes a householder and one or more people living in the same household who are related to the householder by birth, marriage, or adoption. All people in a household who are related to the householder are regarded as members of his or her family. A family household may contain people not related to the householder, but those people are not included as part of the householder’s family in census tabulations. Thus, the number of family households is equal to the number of families, but family households may include more members than do families. A household can contain only one family for purposes of census tabulations. Not all households contain families since a household may comprise a group of unrelated people or one person living alone. According to the United States Census, a household refers to all individuals who live in the same dwelling. Household types are arranged into two groups: family households and nonfamily households. A family household contains at least two persons -- the householder and at least one other person related to the householder by birth, marriage, or adoption -- and is categorized into three types: married couple; female householder with no spouse present; and male householder with no spouse present. A nonfamily household may contain only one person -- the householder -- or additional persons who are not relatives of the householder. Nonfamily 8 | P age households may be classified as either female nonfamily or male nonfamily households. For each year, the total number of households is the sum of the five mutually exclusive household types. By census definition, householders must be at least 15 years of age. Acknowledgements We would like to thank the members of The Trust, as well as Town Planning staff Kate Day, Susan Fletcher and Karen Nelson. They helped us gather information from various Town Departments and answered many questions. We could not have accomplished this Plan without their time and dedication. We also want to acknowledge the efforts of the Town of Danvers Council on Aging, Assessors Department, Building Department, Veterans Services and Department of Public Works. 9 | P age Section 2: Summary of Key Findings Community and Demographics Danvers is a suburban community in Northeastern Massachusetts, approximately 17 miles north of Boston. The Town of Danvers is mostly residential, with a busy downtown and several pockets of commercial and industrial areas. It has seen steady growth in regards to population and households in the last two decades, which can be attributed to the desirable amenities and community services in and around Danvers, access to highways and quality schools and location in close proximity to public transportation. As of the 2010 Census, Danvers had a population of 26,493, an increase of 5.1% since 2000. The western section of the town saw the highest relative population increase at 6.4% from 2000-2010. This population increase was higher than that of Essex County and Massachusetts, as well as higher than two of the neighboring communities and may be attributed to approximately 1,000 new rental housing units added during this decade. Danvers also has the third highest density (people per square mile) of the surrounding communities. In terms of population growth by age group, the population in Danvers is getting older - residents over the age of 65 have had the highest relative population increase, while young professionals age 20- 34 and very young children saw the highest relative decreases. The number of new households has kept pace with and actually exceeded population growth because households have become smaller. The average household size was 2.53 in 2000, and 2.42 in in 2010, less than that of Essex County or Massachusetts. Additionally, one-person households in Danvers increased from 27% of all households to 29%, and two-person households increased from 32% to 33% of all households from 2000 to 2010. This may reflect the number of new smaller rental units, the aging population as well national trends that families are having fewer children, and waiting longer to have them. Danvers is not racially or ethnically diverse, with 98% of the population identifying as White. Many of Danvers’ residents are well educated professionals, as 65% went on to higher education after high school and 49% earned a Bachelor’s degree or higher. The median household income increased 29% from 2000 to 2010 to $75,310, which ranks in the middle when compared to incomes in surrounding communities, but is higher than the county or state. Households in the northeastern section of the Town had the highest relative increase in median income during this time. The majority of households, 80%, earn less than $100,000 annually; however, the number of households with incomes at $150,000 or more increased significantly from 2000 to 2010. Approximately 42% of renter households in Danvers paid more than 30% of their income towards rent in 2010, and approximately 37% of homeowners in Danvers paid more than 30% of their income towards housing costs, and are therefore considered rent/housing cost burdened - an indicator of demand for more affordable housing. Poverty rates in Danvers tend to be lower than in surrounding communities, but the percentage of families living at or below the poverty 10 | P age