Town of Kittery, ME
York County
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Table of Contents
Table of Contents
[HISTORY: Adopted 10-26-2020 by Ord. No. 20-11. Amendments noted where applicable]
Recognizing that the market alone will not provide the range and diversity of housing types needed for a vibrant community, the Town of Kittery desires to encourage affordable housing for households of modest means and for all ages. The purpose of this chapter is to offer incentives to developers to include affordable housing, either for lease or sale, particularly in those zones that offer utilities and/or services, and to mitigate the impacts of market-rate housing development on the limited supply of land available for suitable housing. The Town looks to its comprehensive plan and finds that this chapter will assist in meeting housing goals and in promoting the public health, safety and welfare of its residents.
A. 
Affordable housing regulations are applicable only in zones which explicitly state so and as follows:
(1) 
All development involving three or more new dwelling units. The proposed dwelling units may be new construction, created through a change of use or created through a renovation, rehabilitation or remodel. Projects may not be phased or segmented to avoid compliance with these requirements.
(2) 
All major subdivisions, including those planned in phases, in all zones that create five or more lots. Minor subdivisions are exempt.
(3) 
All developments as described in Subsection A(1) and (2) above whether the dwelling units proposed are intended for sale or for lease.
B. 
Affordable housing regulations do not apply to hotels, motels, rooming houses, inns, bed and breakfasts, residential care facilities or elder care facilities.
A. 
For projects proposing five or more dwelling units, at least 10% of the units, rounded down to the nearest whole number, must be affordable housing units, as defined by this code. Any fractional unit obligation left after the rounding results in a proportional payment-in-lieu (see Subsection C below). For example, if 15 units are proposed, then one affordable unit is required plus 50% of a payment-in-lieu. If an additional affordable unit is offered for the fractional unit obligation, no payment-in-lieu is required.
B. 
The affordable housing units must remain affordable (via a recorded land use restriction, deed restriction or other legal instrument, a copy of which must be submitted to the Town prior to issuance of any building permits) for the longest term permitted under federal, state and local laws and ordinances, or 30 years, whichever is greater.
C. 
As an alternative to providing affordable housing units, projects may pay a fee in lieu of some or all of the units. In-lieu fees shall be paid into the Kittery Housing Reserve Fund, as ordained by the Kittery Town Council. The fee for affordable units not provided must be established by the Kittery Town Council in the schedule of fees.
D. 
If the developer prefers to provide a payment-in-lieu instead of the required affordable housing units, that proportional payment will be calculated based on the number of affordable housing units that are required plus any fractional unit obligation. Using the example above, if 15 units are proposed, the developer would provide 1.5 times the current rate set by the Town.
A. 
Required affordable housing may be located either on-site with any market rate dwelling units or off-site within areas appropriately zoned for residential use. For development proposed in the C-1, C-3, B-L and B-L1 zones, any off-site affordable housing must be located within one of those zones.
B. 
Off-site affordable housing may be new construction, a rehabilitation, remodel or renovation of an existing structure, or a change of use from nonresidential to residential.
C. 
Developers of market-rate units for sale who seek to provide the required affordable housing units off-site may opt to provide such dwelling units as rentals, subject to review and approval by the Planning Board.
A. 
Zoning districts having density incentives may be reviewed under the pertinent zone located in Chapter 16.3, Land Use Zone Regulations.
B. 
The Town will reduce the permitting costs for developments, including affordable housing as follows:
(1) 
For developments comprised of 10% to 15% affordable housing units: 10% off total permitting costs except for sewer connection fees.
(2) 
For developments comprised of 16% to 24% affordable housing units: 15% off total permitting costs except for sewer connection fees.
(3) 
For developments comprised of 25% and over affordable housing units: 20% off total permitting costs except for sewer connection fees.
A. 
Affordable housing units must be built in reasonable accordance with any market-rate units such that at minimum, for every five market rate units built, one affordable unit must be completed. All affordable housing units in a development must have received a certificate of occupancy before the final market rate unit receives such. If a development is proposed for five dwelling units, including one affordable unit, that affordable unit must be completed before the last market rate unit receives its certificate of occupancy.
B. 
When affordable housing units are part of a development which also includes market rate housing units, the outside appearance of affordable units must be similar to the market rate units and any affordable units must be integrated into the development as a whole. Affordable units cannot be confined to one building of a multiple building development except in the cases of cottage clusters, accessory dwelling units or two-family residences.
C. 
Affordable housing units need not be the same size as market rate housing units but the number of bedrooms in each such dwelling unit may not be less than 10% of the total number of market rate bedrooms in the development, rounded up when the fractional portion is .5 or more. For example, a five-unit multifamily dwelling with four market rate housing units of two bedrooms each would be required to provide one affordable housing unit with one bedroom.
(1) 
Studio dwelling units will be counted as a one-bedroom unit. In cases where a development is providing only studio apartments and one-bedroom apartments, the Planning Board has the authority to decide whether each required affordable housing unit will be a studio or one-bedroom unit.
D. 
Affordable housing units to be located off-site must be of comparable quality with the same number of bedrooms (see Subsection C above) as any new affordable housing units that would be created by the project on-site. The Town will not accept off-site units that are run-down or show signs of substantial wear or deterioration. This includes but is not limited to heating and cooling systems, plumbing, wiring, appliances, flooring, walls, counters, cabinets, and fixtures as well as roofing, siding, doors and windows.
A. 
Affordable housing units or lots that will be owner-occupied must be:
(1) 
Restricted to households having an income that does not exceed 120% of the area median income for the family size having the same number of persons as the subject household for the York-Kittery-South Berwick, Maine, Metro Fair Market Area (HMFA), as published by the U.S. Department of Housing and Urban Development as of the date of the buyer's application, and whose housing and utility costs do not exceed 30% of the household's annual gross income; and
(2) 
Maintained as affordable housing units through a land use restriction agreement with the Town of Kittery or its designee for a period no less than the maximum period permitted by Maine law or 30 years, whichever is longer.
B. 
Affordable housing units that will be leased must be:
(1) 
Restricted to households having an income that does not exceed 80% of the area median income for the family size having the same number of persons as the subject household for the York-Kittery-South Berwick, Maine, Metro Fair Market Area, as published by the U.S. Department of Housing and Urban Development as of the date of the household's application, and whose housing and utility costs do not exceed 30% of the household's annual gross income; and
(2) 
Maintained as affordable housing units through a land use restriction agreement with the Town of Kittery or its designee for a period no less than the maximum period permitted Maine law or 30 years, whichever is longer.
C. 
Subleasing of any leased affordable housing unit is not permitted. Leasing or renting, including short-term rentals, of any owner-occupied affordable housing unit is not permitted.
A. 
Affordable housing units must be actively marketed for sale or lease, as applicable, to eligible households, which active marketing must include, as a minimum, the following:
(1) 
The owner shall provide a notice of availability to the Town of intent to lease or sell an affordable housing unit. Such notice must be given at least 14 days prior to advertising the unit.
(2) 
The owner or their authorized representative shall provide an affidavit to the Town confirming that household eligibility requirements have been met upon successful sale or lease of an affordable housing unit. Any lease agreement must be in writing and provided to the Town upon request.
(3) 
A noneligible household may occupy an affordable housing unit if, despite active marketing, an eligible household is not available to lease the housing unit. If an affordable housing unit is being offered for lease, a noneligible household may occupy it under the following conditions:
(a) 
The housing unit must be marketed for 90 days after the Town's receipt of notice of availability.
(b) 
If no eligible household is found, a lease may be signed with a noneligible household 14 days after the Town is notified of the failure to lease, with the condition that the next housing unit that becomes available in the development must be offered as an affordable unit so that the affordable housing requirements for the development continue to be met.
(4) 
If, 120 days after the Town's receipt of notice of availability, the initial sale of an affordable housing unit by the developer has not occurred, a noneligible household may occupy it but that household may only lease the unit for one year from the developer thus preserving the affordable restrictions. The unit must again be offered for sale upon termination of the one-year lease. The lease may not be renewed. The Town must be notified of the failure to sell 14 days before the lease is signed and of the subsequent lease agreement within 30 days of such lease being signed.
B. 
Initial maximum sale pricing of new affordable units must be set as follows:
(1) 
Establish the target percentage of area median income level from the York-Kittery-South Berwick, Maine, Metro Fair market Area (HMFA), as published by the U.S. Department of Housing and Urban Development that the unit will be marketed to. For projects being funded privately, that number must be 110% of area median income. For projects that include state, federal or municipal funding, that number will be influenced by the stipulations attached to the funding.
(2) 
From the table below, determine the minimum household size based on the number of bedrooms in the unit.
1-bedroom or studio
2-bedroom
3-bedroom
4-bedroom
Minimum Household Size
1
2
3
4
(3) 
Calculate 30% of the gross median income based on the area median income from the York-Kittery-South Berwick, Maine, Metro Fair market Area (HMFA), as published by the U.S. Department of Housing and Urban Development for the minimum household size based on the number of bedrooms.
(a) 
For example: (Household's 110% AMI x .30)/12 = monthly income available for housing-related expenses.
(4) 
The amount obtained from the formula above must then have other housing-related expenses, such as mortgage insurance, real estate taxes, home insurance and any HOA/condominium fees removed. Mortgage insurance must be estimated similar to current rates utilized by the Federal Housing Administration unless otherwise agreed to by the Town or its designee. What remains after removing non-mortgage-related housing expenses is that portion of a household's monthly income which is available for a mortgage payment.
(5) 
The sale price will then be set based on a thirty-year fixed-rate mortgage with a minimum 3.5% down payment. Larger down payments will not change the maximum allowable sale price.
(6) 
No affordable housing unit may be sold for more than the maximum sale price.
C. 
Affordable housing units located in a development for which a homeowner association (HOA) or condominium association will be established must obtain the Town's review and approval of the draft budget and condominium/HOA documents. The Town or its designee may request quotes for costs such as replacement reserves and insurance. Fees will be shared proportionately based on the Town's tax assessment of the properties or if that information is not available, on the initial sales price of the units. Affordable units will be assessed with consideration given to the associated restrictions. The condominium/HOA fees may not increase more than 5% any given year and cannot exceed 15% within any five-year period without a supermajority 67% vote of the association. The Town may choose to have a consultant or the Town Attorney review the condominium/HOA documents, which fee is payable by the developer.
D. 
Maximum resale pricing of affordable units must be set as follows:
(1) 
Calculate the average percentage change in the area median income used for the initial pricing for the relevant minimum household size between the year of purchase and the present.
(2) 
Using that percentage number, calculate the new selling price. For example, if the average percentage change in area median income over the time the home was owned is 2% then: (original purchase price) * 1.02) = new selling price.
E. 
Monthly rental costs for affordable housing units will be set based on the following:
(1) 
Find the minimum household size based on the number of bedrooms from the table below:
1-bedroom or studio
2-bedroom
3-bedroom
4-bedroom
Minimum Household Size
1
2
3
4
(2) 
Use the formula below to calculate the monthly rent:
(a) 
0.30 x (annual income based on minimum household size/12) minus utilities = affordable rental unit rent.
F. 
The Town Manager or designee, with recommendation from the Affordable Housing Committee, may modify the requirements in § 16.12.8 as needed to advance Kittery's affordable housing goals and objectives.
A. 
Prior to submission of any plan for review by a Town land use board such as the Planning Board or Board of Appeals, the developer shall submit a Housing Plan to the Planning Department outlining the incentives sought, target median income percentage for the affordable units, proposed location of affordable housing and standards satisfied from this section.
B. 
The Town must review the plan and certify in writing that the development for which approval is sought, as described in the Housing Plan, is consistent with all applicable requirements of this section. If the plan does not meet the requirements, the Town must notify the developer and the project may not proceed to the applicable land use board.
C. 
In addition, all housing-related projects in the C-1 Zone must undergo master site plan review even if only one building is proposed. See Chapter 16.6.
D. 
Prior to the submittal of any development application for consideration by a Town land use board, a pre-application conference between the developer and the Town is required to discuss the application, site design and relevant requirements of the certified Housing Plan.
E. 
Prior to issuance of a building permit, a land use restriction agreement shall be executed between the Town Manager and the developer, in a form promulgated by the Town and approved by the Town Attorney, based on the Housing Plan, which land use restriction agreement sets forth the land use restrictions required by this section.
F. 
Prior to issuance of the certificate of occupancy for a development subject to this section, the developer shall provide the Town with a fully executed copy of the land use restriction agreement as recorded in the real property records maintained by the York County Registry of Deeds.