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Why Needham’s Neighborhood Housing Plan won't ever yield 3,296 new units

Why Needham’s Neighborhood Housing Plan won't ever yield 3,296 new units


By Max Woolf


Last October, Needham Town Meeting voted to adopt the more expansive Neighborhood Housing Plan (NHP) to comply with the state's MBTA Communities Act


The law mandates that 177 communities in eastern Massachusetts ease zoning restrictions making it easier to build housing near transit stations to address the regional housing crisis.


It is important to note that both compliance plans that originally went before Town Meeting required that ZERO homes would be built. The state mandate only required the town to encourage the creation of multifamily housing by simplifying the development process, not create any units.


The Neighborhood Housing Plan zoned for a capacity of 3,296 housing units; however, this number is theoretical. An independent analysis projects that only about 1,288 new homes would be built over the next decade and just 411 for the Base Compliance Plan.


How did the independent consultant whose analysis produced these numbers arrive at them? Using their public report, we can see how 1,288 new units are a reliable prediction while 3,296 new units are unlikely and, frankly, impossible.


Existing housing already accounts for many units.

First, there are 775 housing units currently in the areas covered by the Neighborhood Plan. Thus, the 3,296-unit figure is inflated because it includes existing homes. The actual number of potential new units is 775 lower at 2,521. 


Why only 1,288?

Now, we turn to the report, which deals with the remaining 2,521 units. Almost all parcels in the rezoned areas contain existing buildings that are already profitable or subdivided into many small lots. 


Developers need strong financial incentives to convince multiple owners to sell, tear down, or renovate existing properties. While both plans expand incentives by increasing allowable height or building footprint, even the Neighborhood Plan’s more expansive incentives are often insufficient.


For example, much of the commercial area on Chestnut Street includes single-story buildings that, under the NHP, could be redeveloped into new four-story multi-family buildings. But, for example, the two-story Village Square building at 266-310 Chestnut St, is unlikely to be redeveloped in either zoning plan. This building already generates steady income from tenants like Needham Physical Therapy, The Hairdressers, and others.


These facts, along with the high land costs, that a developer would have to make 12 percent of the units affordable, and the large size of the current building, make redevelopment unattractive. 


This property is NOT an outlier. When the consultants applied their "Propensity for Change Model" to all of the rezoned areas, it lowered the unit count to just 1,288. They found only certain properties—typically those with low current value—to be financially viable for redevelopment. For information on specific parcels, check out the Needhams Observer's excellent piece.


Change happens gradually

Even in areas where redevelopment might make financial sense, it won't happen any time soon. The report's modeling took place over a decade, reflecting the gradual pace of change and the financial realities of the local housing market.


Summary

While the Neighborhood Housing Plan approved by Town Meeting unlocks zoning for up to 3,296 units, the reality is far different. With over 700 units already in place, high land values, and hundreds of rent-paying tenets, only a portion of this capacity—about 1,288 new units—will likely materialize over the next decade.


Even though this projection falls under the state's 1,500-unit mandate, it is meaningful housing production. Meaningful for daycares whose teachers can now live in town, for retailers with hundreds of new customers living next door, and for the young families who earn just enough to afford an apartment here and would never have thought they could live in Needham. 


Meanwhile, The Base Plan, designed solely to bring Needham into compliance with the state mandate, is projected to deliver less than half the housing of the Neighborhood Plan. That means half as much housing for the folks mentioned above. The Neighborhood Plan is NOT Needham taking on the production of the burden for the region's housing crisis; it is Needham becoming a leader in sensible housing reform.


Sources:

RKG Analysis

https://www.needhamma.gov/DocumentCenter/View/46492/10-Fiscal-Impact-Analyses?bidId= 

https://www.needhamma.gov/DocumentCenter/View/45811/2024-04-26_Final-Report_Needham-MBTA 

https://www.needhamma.gov/DocumentCenter/View/46484/7-Multifamily-Housing-Visualizations?bidId= 

RKG Numbers

https://www.needhamma.gov/DocumentCenter/View/46490/12-Unit-Capacity-Analysis?bidId= 

Chestnut St Case Study

https://youtu.be/w5m_S8BxGSU?feature=shared&t=802 

Hillside Ave Case Study

https://youtu.be/aADBszPFNTI?feature=shared&t=551  

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