BERLIN — The Osprey Property Company and its 44-unit, 25-acre development proposed for Berlin cleared an early hurdle at the town sub-committee level.
The proposed Cannery Village development was reviewed favorably by the Planning Commission during a work session this week and will seek a preliminary site plan approval at next month’s meeting.
Cannery Village would be located at Cannery Way on Flower Street. It would be unlike anything Berlin currently has in terms of affordable housing options, Andrew Hanson, vice president of Osprey, told the commission Wednesday.
“We’re looking at this from a different perspective. Rather than having this be a typical ‘for sale’ community, we’re actually proposing this as a rent-to-own community,” said Hanson. “So for the first 15 years this community would actually be rented to folks and then they would have the opportunity to then purchase the home at the end of the 15 years. It’s a little bit unique.”
As affordable housing, Cannery would serve renters making up to 60-percent of the area’s Average Median Income (AMI). Rents would likely range from $350 to $950 depending on the number of bedrooms in the unit. Though the AMI shifts from year-to-year, Hanson expects that Cannery would cater to residents making an average of $25,000 to $45,000 per household.
What really makes the development unusual is that while renting residents will be building a type of credit towards buying the home. After Cannery has existed for 15 years, the homes will be available to buy with current renters’ mortgages adjusted based on how long they have rented their home. The homes would still be sold at a fair market price to avoid de-valuing the surrounding properties but the renters would be given “soft second” mortgages and custom payments based on the amount of time they have lived in their home.
Hanson summarized by saying that the longer the home is rented before buying the better the deal prospective homeowners will receive when the 15 years are up and the houses become purchasable.
A different version of Cannery Village already received approval by the Planning Commission back in 2008. Because of the huge gap in time and changes made to the development plan, Hanson was obligated to return for a new approval, but promised the commissioners that Osprey is not starting over from scratch but rather building from that previous idea.
“We tried to keep all of the progress that was made, comments that might have been generated from the town, the town’s engineer and the Planning Commission and basically, for lack of a better term, freshen it up,” he said.
Commissioner Pete Cosby admitted that he was excited about the project with its unusual rent-to-own mechanic but was also worried about how that would mesh with the affordable housing requirements. If people were renting a home with the end goal of buying it, Cosby wondered if they might feel pressured to keep their income low so as not to exceed the 60-percent AMI requirement and lose their lease.
“The people who are coming in here with the ultimate dream of buying their own house someday, they’re going to be incentivized not to increase their income or increase their productivity or their lives,” he said. “They’re going to be incentivized to keep their income low so they qualify in 16 years to buy the damn house.”
That shouldn’t be much of an issue, according to Hanson. The formula has some built in flexibility so that the second someone gets a raise at work they are not kicked out on the street.
“In theory you could go up to the maximum (AMI cap) but I think they also build in additional amounts,” he told Cosby.
There were also some aesthetic questions from the commission about the street width and architectural choices. Commissioner Ron Cascio had some problems with the stone facades proposed for the houses.
“It looks too ‘busy,’” he told Hanson.
Cascio likewise wondered why the street running through the development needed to be as wide as it was proposed, especially if street parking might not be allowed. Reducing the width of the street would also reduce the amount of impervious surface in the development, something that is always looked at when evaluating stormwater impact. Finally, both Cascio and Cosby felt that some kind of dedicated storage needs to be included in the design.
“You definitely need to address the storage situation or it will just be yards full of stuff,” said Cascio.
Hanson promised to brief the engineer and architect on the commission’s suggestions. He will return at their next meeting in April seeking a preliminary site plan approval. The Mayor and Council already indicated their support for Cannery Village and if the process runs smoothly, tenants could be moving in as soon as late 2016.