EG Backing Away from Fees in Lieu of Affordable Development

The Town Council is one step away from permanently removing language from the code of ordinances that provides multi-unit residential property developers a way to avoid building affordable units by paying a fee instead.

The move comes after the town’s fee structure, which offered developers a chance to pay about $200,000 per unit to avoid the affordable requirement, was struck down in court in 2014 after it was determined the fee constituted an illegal tax without the approval of the state legislature.

The alternative, according to Town Planner Lisa Bourbonnais, is a a fee in lieu of affordable development per unit of about $67,000 as provided by recently amended state laws.

The town’s Planning Board and the Affordable Housing Committee reviewed the issue and both concluded that adopting that fee structure would not be in the best interest of the town, primarily because the town might end up ceding local authority over where and how affordable housing would get built.

Bourbonnais explained that the fee would “put us in the housing business,” in the sense that the Affordable Housing Commission would be expected to put the fees into a trust to fund the construction of new affordable units. And if the town sat on the money and did not develop a plan after a certain period of time, Rhode Island Housing would end up controlling it.

The Town Council did receive opposition to the proposed removal of the fees in the form of a letter from lawyer William Landry, who represents Vistas on the Trail, a condo complex at 1404 South County Trail.

The owners of Vistas on The Trail want to build 17 additional condos in a mix of duplex, triplex and quadraplex structures on the 8.3 acre site.

Landry urged the town to leave the ordinance intact, though Bourbonnais noted that the Vistas on the Trail application is only at the preliminary plan review stage and will be heard at the Planning Board’s Oct. 21 meeting. And the application does not mention payments in lieu of affordable units, she said.

“I don’t think he has standing with the current project,” Bourbonnais said. “I was a little puzzled by that letter.”

Town Councilor Bill Stone said it sounded like Landry was advocating for something that “is not possible,” noting that leaving the code as-is would be in conflict with the court ruling striking down the fee structure.

Though the town is wary of entering the affordable housing business, East Greenwich has miles to go before it gets close to the state mandated 10 percent affordability goal. As it stands, just four-and-a-third percent of the town’s housing stock is classified as affordable, Bourbonnais said.

“We have a big gap,” she said.

In towns like East Greenwich, which enjoys high property values as compared to most of the rest of the state, meeting affordable housing goals is a constant challenge. Here, about 300 affordable units must be built without any additional non-affordable construction to meet the 10 percent mandate.

The Town Council will conduct a third and final reading of the ordinance change at its next meeting.