Inclusionary Housing Program

Developments that provide Affordable Dwelling Units (ADUs) under Section 12 of the December 12, 2019 zoning ordinance, must obtain required Housing Division documents to receive a Certificate of Zoning Compliance (CZC) and to receive a vertical/structural building permit (BP).

Certificate of Zoning Compliance

Developers must obtain an executed Certificate of Required Materials (CRM) from the Housing Division Director to fulfill Housing-related CZC requirements. Prior to a CRM being executed, developers must submit to the Inclusionary Housing Program:

• Project deed;
• Certification of Organization;
• Current project plans that include amenities (vehicle/bicycle parking, storage, etc.)
• An accurately completed Affordable Housing Acknowledgement (AHA) to be fully executed:
  
  • The identified “Developer” and address of business as it appears on the project deed and Secretary of State website

Once the above documentation is complete to the satisfaction of the Housing Division, a CRM will be executed and issued by the Housing Division Director.

Vertical/Structural Building Permit

Prior to pulling a building permit (BP), developers must have a fully executed Affordable Housing Implementation Plan (AHIP). Developers should provide notice, two- three months ahead of pulling the BP, allowing sufficient time to prepare and execute the AHIP. In absence of advance notice, the Housing Division may not be in position to review documents and materials and finalize an AHIP within a desired timeframe.

 To complete an AHIP developers must provide:

• Finalized project plans
• Schedule of Units

For projects under the December 12, 2019 Zoning Ordinance, Information regarding the Somerville Zoning Ordinance and the permitting process is available on the Somerville Zoning website. Refer to Section 12 "Development Benefits" for information regarding the process and requirements for the provision of Affordable Dwelling Units (ADUs).

Estimated Maximum Rents & Sales Pricing

Tables 1.a and 2.a show base rents and base sales prices for ADUs, respectively. Maximum rents and maximum sales prices are the base amounts provided, deducting applicable fees and utilities for which an occupant is responsible. Tables 1.b and 2.b show estimated maximum rents and sales pricing assuming fees and other applicable deductions.
 

Rents

Table 1.a: Estimated Base Rents Without Fees or Utility Deductions*

*Applicable tenant-paid fees and utilities are subtracted from base rents.
 

Table 1.b: Estimated Rents* with Assumed Fees** No Utilities Included***

*Final rents are based off actual project fees and applicable utility allowance deductions
**Rents described above assume $150 in applicable tenant-paid fees
***Rent figures include January 1, 2022 Somerville Housing Authority Utility Allowance Deductions for High Rise
w/ elevator, electric heating, electric cooking. Allowances based off actual projects will apply.
 

Sales Prices
 

Table 2.a: Estimated Base Sales Pricing Without Fees

Table 2.b: Estimated Maximum Sales Pricing With Assumed Fees*

*Fees include condominium fees, homeowners insurance, estimated private mortgage insurance, taxes, parking

Fractional Buyout

The Housing Division has a monthly subscription to the Warren Group Data and is receiving information on all units sold in Somerville . Below are average sales prices in Somerville for FY ’22. These figures are to provide estimates for the Fractional Buyout for an ownership or rental ADU. The actual payment will be calculated at the time the payment is due.

The fractional buyout for an ownership or rental ADU is calculated as (A*B) where:
i. A is the amount of ADUs not provided (.2, .4, .6 or .8); and
ii. B is the difference between the average sales price of comparable market-rate units sold within the city of Somerville over the previous twelve (12) months and the sale price of an ADU in the ownership or rental price tier that would have been provided.

The Inclusionary Zoning Ordinance for projects permitted under the May 6, 2016 update is available here.

Rents

• Base rents for apartments with affordability set at Tier R1 and Tier R2 levels are based off “LOW” and HIGH” HOME RENTS, respectively. HOME RENTS are established by the Department of Housing & Urban Development (HUD) and updated on an annual basis. HOME RENTS are available on HUD Exchange.

• Base rents for apartments with affordability set at Tier R3 are 30% of a household’s income at the time of an income certification.

• Finalized rents account for deductions for tenant-paid fees and utilities. Utility deductions are based off the Somerville Housing Authority Utility Allowance chart.
   

Tier R1 (<50% AMI): Base rent is the “LOW” HOME RENT. The final rent is the “LOW” HOME RENT and deducts applicable fees and tenant-paid utilities.

Tier R2 (51%-80% AMI): Base rent is the “HIGH” HOME RENT. The final rent is the “HIGH” HOME RENT and deducts applicable fees and tenant-paid utilities.

Tier R3 (81%-110% AMI): Base rent is 30% of a household’s annual gross income at the time an income certification is completed. The final rent is 30% of a household’s income and deducts applicable fees and tenant-paid utilities. Because rents at Tier R3 levels are proportional to a household’s income, rent may vary depending on whether a household’s gross income is closer to 81% AMI or 110% AMI. Below includes the ranges of annualized base rents for households comprised of one (1) through six (6) persons.

Tier R3 Monthly Gross Rent Ranges

Sales Pricing
The maximum sale price for an inclusionary unit shall be set at a level that allows a household at the designated Tier eighty (80) percent or one hundred ten (110) percent of Boston area median income, as the case may be, to pay no more than twenty-eight (28) percent of household income for housing costs. The maximum sales price shall be calculated as follows:

• Determine the maximum household size for an inclusionary unit based on one (1) person per bedroom (one (1) person in the case of a studio).

• Determine the maximum monthly income (MMI) for such household size, using income figures published annually by the U.S. Department of Housing and Urban Development (HUD) for households at eighty (80) percent and one hundred ten (110) percent of Boston area median income.

• Multiply MMI by twenty-eight (28) percent.

• Subtract the estimated cost of Private Mortgage Insurance (PMI), Real Estate Taxes (RET), Condominium Fees (CF), Homeowners Insurance (HI) if not included in the CF, and required parking fees (PF), if any, if not included in the CF, to arrive at a maximum monthly mortgage payment (MMP).

• Calculate a maximum mortgage loan (MML) based on the MMP, assuming a 30-year term and at the then current conventional interest rate.

• Multiple the MML by 1.03 to arrive at a Maximum Sales Price (MSP) based on a ninety-seven (97) percent MML.

Most Recent Initial Sales Pricing

Please see the link for a brief overview of the SPAUP policy, requirements, and process. Please review the policy below for complete details of the SPAUP policy and requirements.

Small Property Additional Unit Program (SPAUP) Training

Small Property Additional Unit Program (SPAUP) Policy - Housing Division Requirements 
Effective October 4, 2021 

3rd Unit Development- Neighborhood Residential (NR) & Urban Residential (UR) Districts 
Through the December 19, 2019 Zoning Ordinance, an owner of a two-family property in an NR or UR district may develop a third (3rd) unit on that same property so long as one of the units is affordable in perpetuity via an executed and recorded Affordable Housing Restriction. In the case of rental tenure, the Affordable Dwelling Unit (ADU) shall be restricted to households with an annual gross income at or below 110% of the Area Median Income (AMI). In the case of ownership tenure, the ADU will be restricted, upon initial sale and re-sale, to households with incomes not to exceed 140% AMI. 

The unit can be added by right if it is being added to the existing property. In the case of a backyard cottage, zoning requirements do apply. Property owners will also need to apply for a building permit.  Information on the process for securing a building permit is available at www.somervillezoning.com. 

Application Requirements 
Owners must complete an application to satisfy Housing Division requirements prior to requesting a Certificate of Zoning Compliance (CZC).  An application is comprised of a fully executed Affordable Housing Acknowledgement (AHA) and a signed Certification of Required Materials (COR). To initiate the application process, Owners must: 

1. Complete, sign and submit the AHA available on www.somervillezoning.com and complete the top portion of the COR; 
2. Submit a property deed;  
3. Submit floor plans of the proposed project; and  
4. If the property is owned by a company, corporation, LP, LLP, LLC, etc., please submit a current copy of the results produced when the entity’s name is entered into the corporate database of the Commonwealth of Massachusetts Secretary of State’s website: https://corp.sec.state.ma.us/corpweb/CorpSearch/CorpSearch.aspx. If the property is owned in a Trust, please submit a copy of the Declaration of Trust and include documentation as to the current Trustee(s). 

Upon review of the application and the above materials, the Housing Division Director shall complete execution of the AHA and sign the COR. 

To pull a structural building permit the Owner must have an executed Affordable Housing Implementation Plan (AHIP) to be signed by the Housing Division Director. The AHIP will memorialize which unit has been designated as an ADU and outline other requirements. Owners should allow for a minimum of two (2) months to complete an AHIP. 
 

Condo Conversion
Where an owner intends to convert an existing two-family property going through SPAUP to a condominium that will consist of the two existing units and the one newly created unit, the two existing units must undergo the Condominium Conversion process, which includes applying to the Condominium Review Board for approval to receive a Conversion Permit. New construction is exempt from the Condo Conversion Ordinance.

Note that there is a standard 12-month waiting period for a Conversion Permit to be granted, and applicants should plan accordingly (see §7-64 generally, and for some exceptions, §7-64(1)(a)(i-iii)).

Inspections 
Prior to the execution of an AHIP, an inspection of the property shall be conducted by Inspectional Services and Housing Division personnel (a City building inspector and a Housing staff member). A walkthrough including Housing staff member(s) will also be required ahead of Certificate of Occupancy issuance. 
 

Unit Selection 
The newly constructed third (3rd) unit shall be designated as the ADU.  However, the Housing Division reserves the right to designate an existing unit as the ADU. Consideration shall be given but is not limited to the following criteria below:  

• How representative the newly constructed unit is of the existing units in terms of the number of bedrooms within the units, the net sq. ft. of the units, the sq. ft. of the bedrooms, and the unit location/access to amenities. 
• The proportion of ADUs with two (2) or more bedrooms may exceed the proportion for corresponding market rate units for each tenure type. 
• The existing unit meets or will be renovated to meet Americans with Disabilities Act ( ADA) compliance requirements and/or has accessibility features that meet an existing need. Desirable features may include but are not limited to: wheelchair accessibility, appropriately-heighted fixtures, and modified safety features. 
  
  • An existing unit mirrors amenities in the new unit.  
• Any other reason that furthers the goal of stabilization or otherwise meets a need within the housing inventory.  

In the event that an existing unit is designated as an ADU, the existing unit must meet the following standards: 

• Housing Quality Standards  
• 521 CMR MAAB TYPE-1 kitchens and bathrooms 
• Energy Star standard appliances/utilities 
• Stretch Energy Code requirements 
• De-leaded or abatement of lead hazards 
• Minimum Housing Quality Standards for three-bedroom units per Section 12.7(c)(i) 
• Address all issues that may have come up on an inspection/walkthrough by City staff 
• Upgrades of unit finishes and appliances of similar quality of new unit 

In the event an existing unit was updated within the past six (6) months and verification is provided in the form of a report on the condition of the existing unit and any common areas and is certified by a qualified design professional (e.g. engineer, inspector, individual with LEED or Passive Housing certification, etc.), such verification shall be considered in determining whether further updates are necessary. 
 

Occupant Selection and Marketing 

All owners, whether or not they are investor-owners s or owner-occupants, are required to attend a Fair Housing Training prior to marketing an ADU through the Suffolk University Housing Discrimination Testing Program (HDTP) or other training program previously approved by the Housing Director. The name of the training seminar will be “Fair Housing training for the SPAUP.” The HDTP will provide each owner a certificate detailing that they successfully completed a fair housing training through their organization.  The certificate will be valid for five years. 

Investors shall have two (2) options for selecting tenants/buyers. 
 

Occupant Selection for Investor-owners 

1. An existing tenant household may be considered for the ADU, provided the household is income-eligible and is an appropriate household size for the bedroom type of the ADU, and in the case of homeownership, is a first-time homebuyer household that has completed or will complete a first time homebuyer training class prior to the closing. 
2. If the above option is not applicable, owners not residing on the property are required to select occupants for a third (3rd) unit ADU from the Consolidated Waitlist (CW). 

• In the event the CW is exhausted or otherwise unavailable, the Owner is required to follow the Fair Housing Marketing Plan (FHMP) requirements provided by the City when selecting a tenant or a buyer. A thirty (30) day application submission period will be established and all submitted applications will be entered into a lottery assisted by the City and compiled in a waitlist for the unit following then-current preferences. The Owner shall be responsible for maintaining the waitlist.  
  • The Owner is responsible for all costs associated with fulfilling the requirements of the FHMP, including the cost of any advertisements and maintaining a waitlist as necessary.   

• The owner shall select the first eligible tenant from either the CW or the lottery, and provide justification for rejecting any eligible tenant. 
• Income eligibility shall first be verified, and then credit/suitability screening shall occur next for rental opportunities. Credit/suitability screening criteria and an appeal process shall be reviewed and approved by City staff prior to marketing for rental opportunities. 
• Income eligibility, first time homebuyer status and completion of a first time homebuyer training course and a mortgage pre-approval for up to the purchase price shall be verified first for homeownership opportunities. An appeal process for income certifications shall be available for prospective purchasers. 
   

Owner-Occupant Tenant/Buyer Selection 
Owners claiming an owner-occupancy status must provide the Housing Division with verification of a current utility bill or a current federal income tax return (income figure on the tax return may be obscured; the address for which the filing was submitted and the owner’s name must be clear on the first page of the income tax return). Reviews shall be conducted annually as part of the monitoring and compliance process. In the event an owner occupant becomes an investor owner, upon a vacancy in the ADU in the case of a rental project, the investor owner shall comply with the two options above for investor owners to select a tenant. 

Owner-occupants have four (4) methods for occupant selection:  

1. Owner-occupants may rent or sell to an eligible household member within the third (3rd) degree of kinship. (https://heirbase.com/degrees_of_kinship_chart/)
   
   • A notarized affidavit attesting to the nature of the kinship must be provided. 
2. An existing tenant household may be considered for the ADU provided the household is income-eligible, and is an appropriate household size for the bedroom type of the ADU, and in the case of homeownership, is a first-time homebuyer household that has completed or will complete a first time homebuyer training class prior to the closing. 
3. Owner-occupants may elect to follow the Fair Housing Marketing Plan (FHMP) requirements provided by the City when selecting a tenant or a buyer for the third (3rd) ADU in lieu of selecting a tenant or buyer from the CW. A thirty (30) day application submission period will be designated, and all resulting applications must be compiled and split into corresponding pools based on existing City preferences in a waitlist for the unit that must be maintained by the owner or an appropriate 3rd party. 
   
   • Owner-occupants are responsible for payment of all costs associated with fulfilling the requirements of the FHMP, including the cost of any advertisements, and maintaining the waitlist. 
   • Develop a waitlist for the unit that is ranked and select a tenant from that list, starting with #1, and providing justification for any tenant that not selected.
   • Credit/suitability screening criteria and an appeal process shall be reviewed and approved by City staff prior to marketing for rental opportunities.
   • Income eligibility shall be determined first, prior to the owner initiating any credit/suitability screening. Income eligibility, first time homebuyer status and completion of a first time homebuyer training course and a mortgage pre-approval for up to the purchase price shall be verified first for homeownership opportunities. 
4. Owner-occupants may select a tenant from the Consolidated Waitlist.  

 
Income Eligibility 
“Annual Income” is defined under 24 CFR 5.609, or as shall be defined in any successor regulation, is the anticipated total income from all sources received by all members of the Family over the age of eighteen, including members who are temporarily absent. Without limiting the generality of the foregoing, Annual Income includes interest income from assets. Upon the completion 

Rental tenure 
For any existing or subsequent occupants of a rental ADU, income eligibility must be verified prior to execution of the lease and an affordable lease rider and income eligibility must be recertified on an annual basis. The Housing Division shall conduct the income certifications and re-certifications, except where the Owner owns other property in Somerville. In the event the Owner has title to other property in Somerville, at the discretion of the Housing Director, the Owner and/or their management agent shall conduct the income certifications/recertifications, and shall submit the income certifications to the Housing Division for review and approval prior to signing a lease and affordable lease rider. The income of a tenant in a 110% AMI unit may increase up to 120% of AMI after meeting the initial eligibility qualification to start at 110%.  Once a household’s income surpasses the maximum income at 120% AMI, they will no longer be eligible for the ADU and must vacate the unit upon the end of the current lease term. The rent shall be established by the Housing Division prior to the marketing of the ADU. 

Homeownership tenure 
In the case of ownership, income eligibility must be verified prior to a household receiving a Proceed Letter. A Buyer’s income shall not exceed 140% AMI upon initial sale or re-sale. The Housing Division shall conduct the income certification. Once determined income eligible, households shall not be re-certified unless there is a transfer in title. The sales price shall be established by the Housing Division prior to the marketing of the ADU. 
 
Enhanced Affordability 
Although the ordinance establishes income eligibility for the ADU at the 3rd tier (110% for rental, 140% for homeownership), at the Owner’s discretion and option, the owner may choose to rent at an amount affordable to a household below 110% AMI or sell at an amount affordable to a household below 140% AMI. 

• Upon the voluntary vacancy of the initial tenant, the AMI may adjust up to 110% (the 3rd tier) for initial occupancy, with the ability to increase household income up to 120% AMI before such a household is deemed over-income and shall be required to vacate the ADU. 

 
Compliance and Monitoring 
Occupants of an ADU, whether a rental or homeownership project, must meet annual monitoring requirements to ensure continued eligibility. The annual monitoring shall be conducted by Housing Division compliance and monitoring staff. Annual monitoring includes current verification of residency and in the case of a rental opportunity only, annual income re-certifications are to be completed prior to a lease renewal. For projects with rental tenure, a Monitoring and Compliance MOU shall be executed prior to marketing, which outlines roles and responsibilities. 
 
Unit Re-sale 
If an Owner wishes to re-sell the ADU, the Seller must provide written notice to the Housing Division at least six (6) months prior to the date a household desires to sell the unit to ensure sufficient time to establish a re-sale price, identify a Buyer, verify Buyer eligibility and for the closing to occur. The re-sale price shall be established by the Housing Division according to the calculations established in Article 12 of the Somerville Zoning Ordinance. The Seller may either locate an eligible buyer or opt to have the City market the unit and conduct a lottery to identify an eligible buyer. 

Per Somerville’s Zoning Ordinance, the Housing Director has the authority to establish quality standards for three-bedroom Affordable Dwelling Units (ADUs). These standards apply to all three-bedroom ADUs effective March 1, 2022.

Residential developments with thirty (30) or more units are required to provide 20% of the obligated ADUs as three-bedroom units, under Section 12.1.7 of the Somerville Zoning Ordinance.

Mayor Katjana Ballantyne and JMC/STM Union Square LLC are pleased to announce an Income-Restricted Rental Lottery for eighteen (18) income-restricted apartments for rent at 346 Union in Somerville’s Union Square Neighborhood available through the City of Somerville Inclusionary Housing Program. There are fifteen (15) studio apartments and three (3) 1-bedroom apartments, available for rent to income eligible households at below market rent through an application, lottery and income certification process.

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Mayor Katjana Ballantyne, in collaboration with SKEFFINGTON-SILVA PROPERTIES, LLC, is pleased to announce an income-restricted rental lottery for one (1) affordable rental units at 29 Alpine St. There is one (1) 2-bedroom unit at 29 Alpine St. that will be offered to households with an annual gross income between 81% MFI and 110% MFI.

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Mayor Katjana Ballantyne, in collaboration with 124 Highland Ave. LLC, is pleased to announce an income-restricted homeownership lottery for three (3) affordable condominium units at 124 Highland Ave. aka The Post. There is one (1) one-bedroom plus den and one (1) 2-bedroom that will be offered to households with an annual gross income at or below 80% Area Median Income (AMI) at price tier P1. There is one (1) 2-bedroom unit that will be offered to households with an annual gross income between 81% AMI and 110% AMI at price tier P2.

Applications may be completed online. Paper applications should be submitted to Maloney Properties at:

Maloney Properties, Inc.
Attn: The Post Lottery
27 Mica Lane, Wellesley, MA 02481
ThePost@MaloneyProperties.com

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The Mayor’s Office of Strategic Planning and Community Development (OSPCD) are pleased to announce the resale of two (2) deed-restricted condominium(s) to an income eligible, first-time homebuyer household at a below market price through the City’s Inclusionary Housing Program. There is one (1) 3-bedroom unit at 411 Norfolk St. Unit 2J that will be offered to households with an annual gross income between 81% AMI and 110% AMI and there is one (1) 1-bedroom unit at 432 Norfolk St. Unit 2E that will be offered to households with an annual gross income between 81% AMI and 110% AMI.

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Mayor Katjana Ballantyne, in collaboration with SKEFFINGTON-SILVA PROPERTIES, LLC, is pleased to announce an income-restricted rental lottery for two (2) affordable rental units at 126 Cross St. and 29 Alpine St. There is one (1) 4-bedroom unit at 126 Cross St. that will be offered to households with an annual gross income at or below 50% MFI and there is one (1) 2-bedroom unit at 29 Alpine St. that will be offered to households with an annual gross income between 81% MFI and 110% MFI.

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Mayor Katjana Ballantyne, in collaboration with 60 Cross Street Investment LLC and 109-11 Prospect Street Somerville LLC, is pleased to announce an income-restricted homeownership lottery for eleven (11) affordable condominium units between 60 Cross St. East (9 units) and 109 Prospect St (2 units). There is one (1) studio unit, two (2) 1-bedroom units, two (2) 2-bedroom units and one (1) 3-bedroom unit that will be offered to households with an annual gross income at or below 80% Area Median Income (AMI) at price tier P1. There is one (1) studio unit, two (2) 1-bedroom units and two (2) 2-bedroom units that will be offered to households with an annual gross income between 81% AMI and 110% AMI at price tier P2.

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Mayor Katjana Ballantyne and Wood Partners are pleased to announce a Rental Lottery for sixty-six (66) Income-Restricted Units at Alta Revolution, located at 290 Revolution Drive in Somerville, MA. The first units will be ready in December 2022. Alta Revolution is a 329 unit rental apartment complex located on 290 Revolution Drive in Assembly Row in Somerville. Twenty-five (25) of these apartments will be rented to households with incomes at or below 50% of the Area Median Income (AMI), twenty-five (25) different apartments will be rented to households with incomes between 50% and 80% AMI, and sixteen (16) different apartments will be rent to households with incomes between 80% and 110% AMI. The Waiting Lists will be established by lottery held on Oct 12, 2022.

Open application period is August 11th – September 12th at 2:00pm.

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Applications are available both online and in paper format. Online applications may be submitted here: Alta Revolution Lottery Application (jotform.com). For any questions about the online application or paper applications, please email AltaRevolution@sebhousing.com

Paper applications are available below:

• Application - English
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