The financial impact analysis of the proposed ‘40R’ affordable housing residential development in Rochester shows a net positive annual income for the town, news that developer Ken Steen happily shared during a public forum held May 8 to discuss the study’s findings.
According to consultant Judy Barrett, the conservative estimate for the steady annual revenue the 208-unit development will generate is $499,300 for the Town of Rochester. She estimates that the increase in demand for municipal services – police, fire, and schools – will cost the town an extra $352,000 a year, leaving a remaining positive net income of about $147,000 for the town.
The project will be one that is “revenue positive,” Barrett said. It’s able to pay for itself and will actually generate some surplus revenue.”
Barrett’s calculations included a review of the town’s financial status, history, revenue sources, demographics, and data collected from similar 40R developments in other towns in Massachusetts, including one in neighboring Lakeville, to develop a snapshot of how she expects the 40R to impact Rochester.
Barrett said she focused exclusively on police, fire, and schools in calculating her fiscal impact estimate, saying, “This study is clearly about school, police, and fire because those are the services that will be the most affected.” She called Rochester a “real well-run community” with relatively low debt service and spending that is inline with the size of the town.
“It looks good,” said Barrett. “[Rochester] is a town that can absorb some changes like this.”
The task of performing a technical analysis, Barrett said, is tricky since she is attempting to forecast the unknown situation of a development that has not yet been built. She started by looking back 10 years at the town’s spending habits, town growth, and how communities outside Rochester have been affected by 40R housing before determining that Rochester would experience a fiscal benefit from the development slated for the area of Routes 58 and 28 called Rochester Crossroads.
Barrett dispelled some of the myths she said are common with 40R projects, such as the belief that affordable housing developments are inherently negative; not true, said Barrett. And, of course a higher density residential development will increase the demand on police services – police calls will go up in number, she said, “But to think it becomes a crime problem is not the case.”
High-density residential zones are, according to Barrett, more beneficial to municipalities than more sparsely settled residential. Her academic research suggests, she said, “The more compact the development – the more efficient it is to serve,” in terms of services like police and fire.
Barrett anticipates the 40R will bring between 45 and 55 additional students to the town, but trends show that oftentimes those students are comprised of students already living in the town who move into the development, mostly due to the availability of affordable housing units and also through non-custodial parents who wish to stay close to their children post divorce.
Barrett said she was looking strictly at steady annual revenue for the town, not the 40R funds offered by the state as incentives for working with the project’s developer. She estimates around $50,000 a year from commercial taxes and $285,400 a year in residential taxes.
“State aid comes and goes,” Barrett said. “I always encourage my municipalities … to pay attention to what that project is going to generate, because anything else that you get from state aid is really just [not guaranteed.]”
Based on the 208 units, Barrett estimates the impact on the schools would be roughly $36,800 a year, and the impact on fire would be about $105,000.
“The number of calls is higher, but also servicing those calls can take more time,” Barrett said, “So I just budget as generously as I can on fire calls.”
Assuming 45-55 students, Barrett said the instructional impact would require an additional 1.1 teachers. Her cost impact included built-in services for special education, and she said she goes higher in her fiscal impact analyses.
Barrett’s estimate for EMS is about $377,400, which the revenue from those receipts should offset, still keeping it revenue positive.
State money under Chapter 40S, available only to 40R communities and not with 40B developments, would be offered if the additional students end up costing the town 52 percent more than the revenue the town receives from the 40R, Barrett said. Lakeville has received $353,000 in 40S funds, “And that’s pretty significant,” she said. Lunenburg has gotten $22,000, she said, and the amount is different depending on the town.
“If number of kids is higher, then you’re golden because you’re going to get that subsidy,” said Barrett.
Steen reiterated that the one-time incentives the 40R will bring to Rochester would total $974,000, plus about $135,000 in permitting fees.
As a 40B, there would be no incentive money, a point Planning Board Chairman Arnie Johnson wanted emphasized as voters are asked to approve an article for a Smart Growth Overlay District to accommodate the 40R project.
The 40R will bring Rochester’s state mandated ten percent affordable housing beyond that minimum, exceeding it by 29 units – more than enough to keep any 40B developers from moving into Rochester after the 2020 census.
Steen’s project will still have to go through the Planning Board Site Plan Review process, and Conservation Commission and Building Department processes as well, and there will also be a “local preference” on affordable units available first to Rochester residents – all things that would not happen with a 40B.
And these (40B projects) can be put anywhere in town,” said Johnson. “The town cannot deny a 40B until we meet the 10 percent affordable housing [minimum]. … Right now, as it stands, the entire town is wide open to a person coming in and putting a 40B in town anywhere. … If we meet the housing requirement … if this project does get approved,” Johnson said, then the town could deny a future 40B.
Town Meeting is scheduled for May 20 at 7:00 pm at Rochester Memorial School.
By Jean Perry