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Pocket Neighborhood Zoning Q&A

This March, Lyme voters will be asked to approve an amendment to the zoning ordinance that would allow homes to be developed using the Pocket Neighborhood model. We believe Pocket Neighborhoods will make it possible to build new homes that are more moderately priced than Lyme has seen in many years, while increasing the tax base, and decreasing the effect on school taxes.

Q: What is a Pocket Neighborhood?
A: A Pocket Neighborhood is a type of planned development in which smaller residences are grouped around a courtyard or common house and garden. Pocket Neighborhoods make it easier to build smaller homes and are designed to promote a close-knit sense of community and neighborliness with an increased level of contact between people who live there. Architect Ross Chapin coined the term in the mid 90's.

Q: What are Lyme's voters being asked to approve?
A: This Pocket Neighborhood article would allow an owner or other developer to build a Pocket Neighborhood in a very limited part of Lyme, just past High Street to the Town Playing Fields, only on lots with frontage on Route 10 no more than one mile north of the north boundary of the Lyme Common District. The lots must have a "lot size" (computed by subtracting conservation overlays) greater than 15 acres. There are currently four parcels that qualify.

The major change? Pocket Neighborhood development would allow six homes where one single family or duplex home would currently be permitted. Specifically, Pocket Neighborhoods in Lyme would:

  • Permit six homes on each lot instead of the currently allowed single-family home or a duplex.
  • Use the existing rules for creating lots.
  • Retain the rules about building footprint, lot coverage, gross floor area, accessory buildings, driveways, etc. That means the development in a Pocket Neighborhood would be no larger than what would be allowed for single-family homes.
  • Require half the dwelling units to be 1100 square feet or smaller.
  • Allow the permitted footprint to be divided between multiple buildings, instead of requiring six units into one building as is currently permitted as a conversion, so owners can build homes that are in keeping with the character and scale of the Town of Lyme.
  • Require significant common space for the use of all residents.

Q: How will Pocket Neighborhoods benefit Lyme?
A: We see two primary benefits. Because homes built in Pocket Neighborhoods can be less expensive due to the ability to share land acquisition and infrastructure costs, Lyme will be more affordable for people we know — neighbors who want to stay in Lyme when downsizing, our children who want to move back to town, teachers and others who work here, but can't afford to live in town.

We also believe this form of development could help slow the growth of property taxes in town. See our questions about taxes and school children (below).

Q: Who would live in a Pocket Neighborhood?
A: Pocket Neighborhoods appeal to a mix of residents of all age ranges. The smaller dwelling units (1100 square feet or less) are attractive to empty nesters and others who want to downsize and reduce their environmental footprint. In fact, we expect all the homes will be smaller (thus less expensive) because residents have common shared space, which can help avoid duplication of guest rooms, workshops, etc.

Q: How will Pocket Neighborhoods affect property taxes?
A: Homes in Pocket Neighborhoods would be taxed at the same rate as other homes. The assessed value of building six new homes in a Pocket Neighborhood will increase the tax base much more than adding a single-family home to that same lot. In Lyme, new construction in the last three years in Lyme has added an average of $454,000 to the tax base for each new home built. Allowing six smaller homes on a lot, with prices ranging from $199K to $499K with an average of $300,000, would add $1.8 million to the tax base. At the current $25.46 tax rate, this leads to the tax revenues below:

Tax Base and Tax Revenue

Type of development Home
Value
Number of homes Addition to tax base Tax Revenue Comment
Single Family Home $454,000 1 $454,000 $11,559
Pocket Neighborhood $300,000 6 $1,800,000 $45,828 Almost four times the tax revenue as single family home

A Pocket Neighborhood would provide its own water, sewer and internal roads, and the requirement of frontage on Route 10 means the state pays for plowing and road maintenance. That means the impact on town services would be low, since nearly two-thirds of the town budget goes to road-related expenses.

Q: So, what about kids and school taxes?
A: School aged children do add to the cost of taxes. The Planning Board is concerned about any development that would bring more children into town. Lyme is not, however, calling for a halt to all new homes. The question for the Planning Board and the town is what type(s) of homes are best to allow? We believe Pocket Neighborhoods will generate tax revenue that exceeds the expected school expense.

There are two ways to reach an estimate of how many new students move to town: state based figures and Lyme's own experience. Using New Hampshire Housing Finance Authority (NHHFA) figures, new homes that have 4 bedrooms will add 1 new student; 3 bedrooms will generate 0.41 students, while smaller homes add 0.1 student. See, for example: http://www.nhhfa.org/assets/pdf/2012schoolenrollmentslides.pdf

We are working to improve our Lyme statistics, but we know now:

  • Recently-constructed homes in Lyme average almost 4 bedrooms per home
  • Lyme's overall average is 0.4 students per home (293 students in 750 homes)
  • One example of multiple clustered homes in Lyme is 85 Dartmouth College Highway. It has 17 residences; its current school-age population is two students.

Lyme's average per-student cost is $18,682, while the tax revenue generated by a median-cost new home is only $11,559. This means the tax revenue only covers 62% of the average per-student cost, leaving a deficit that must be made up from other sources.

On the other hand, a Pocket Neighborhood requires that half the new homes be small, making them less attractive to families with children. Using state averages, there would be 0.1 students for the three small units and 0.4 for the three remaining units. This yields 1.5 students for the six homes, while the taxes for those homes would generate $45,828, considerably more than the per-student expense for those children. Even if we use Lyme's 0.4 student-per-home ratio, one Pocket Neighborhood would have 2.4 students, still creating a small surplus.

School Costs vs. Tax Revenue

Type of development Number of students Cost for students Tax Revenue Surplus or loss Comment
Single Family Home 1 $18,682 $11,559 - $7,123 A loss - tax revenue doesn't cover cost per student
Pocket Neighborhood 1.5 (NHHFA) $28,023 $45,828 $17,805 This surplus can go to cover other town services
Pocket Neighborhood 2.4 (Lyme) $44,873 $45,828 $991 Small surplus available for town services

Q: Why six dwellings for a lot?
A: A long-standing provision of the current ordinance allows a building that has been in existence for at least five years to be converted into up to six dwellings. The Planning Board advances this "conversion option" as a good way to create less expensive housing. Permitting six homes on a lot is in keeping with the Lyme Ordinance and the desires of the Planning Board, expressed most recently in the Lyme Church newsletter.

Q: Has the conversion option been used in the past?
A: Not in recent memory. Dividing up existing large (and presumably expensive) homes does not seem to be a viable way to decrease the cost of homes in town. In theory, it would be possible to build a large home, and then convert it in five years. The “wait and convert” strategy ignores the economic disincentive of building a large structure, and waiting the required time.

Q: Why are you doing this?
A: The ordinance today permits us to break up the property we own into at least four parcels, each with a large home and a second unit. In fact, in past meetings, the Planning Board has encouraged us to do exactly this as the "highest and best" use of the land.

We want instead, to build in a way that reflects today's realities: fostering aging in place and community, while minimizing impacts on climate and energy use and the cost of building and staying in homes. We think this model of building is good for community and for the environment. Sharing common space, encouraging smaller homes, and clustering are all prudent alternatives to single family development — in Lyme and the larger world.

Q: What about parcels that could support more than one lot?
A: The parcel at 70 Orford Road (the Loch Lyme Lodge) has 98 undeveloped acres that could support four lots. Here is a comparison of the effect of those four lots being developed into either four single-family homes or a 24-home Pocket Neighborhood.

Tax Base and Tax Revenue - Four Homes vs. Pocket Neighborhood (24 homes)

Type of development Home
Value
Number of homes Addition to tax base Tax Revenue Comment
Single Family Home $454,000 4 $1,816,000 $46,235
Pocket Neighborhood $300,000 24 $7,200,000 $183,312 Almost four times the tax revenue as single family home

School Costs vs. Tax Revenue - Four Homes vs. Pocket Neighborhood (24 homes)

Type of development Number of students Cost for students Tax Revenue Surplus or loss Comment
Single Family Home 4 $74,728 $46,235 - $28,493 A loss - revenue doesn't cover cost per student
Pocket Neighborhood 6.0
(NHHFA)
$112,092 $183,312 $71,220 Surplus can go toward town services
Pocket Neighborhood 9.6
(Lyme)
$179,347
$183,312 $3,965 Small surplus can go to cover town services

Q: How many parcels in Lyme would this amendment apply to?
A: Four. Because the Pocket Neighborhood language only applies to larger lots (15-acre calculated lot size or more) the amendment would only apply to four existing lots in a limited part of Lyme (those with frontage on Route 10, within a mile north of the Lyme Common District - roughly, from High Street to the Town Playing Fields).

We have done detailed engineering studies for our parcel at 70 Orford Road, but not for the three other parcels. It is difficult to make accurate build-out projections, but a review of the town's conservation overlays for those other parcels indicates that 124 Orford Road might support one lot/6 homes; 35 Orford Road might support one lot/6 homes, and 42 Orford Road might support 4 lots/24 homes. We have spoken to the owner of these last two parcels, and it is her firm commitment not to develop these parcels at any time, so there would not be any effect for the foreseeable future.

Q: Couldn't other lots be merged to make suitable parcels?
A: This is possible, but those lots would need significant acreage to form a 15-acre (calculated) lot. The lots that could be merged have such high assessed values that development into a Pocket Neighborhood seems economically unviable.

Q: Does the Planning Board support this amendment?
A: No. We have been going to Planning Board meetings and asking for suggestions about how to address the cost/lack of diverse types of housing for some years. We met again with the Planning Board a number of times this year. The Board members who made statements on the subject all said that the housing inventory shows that there is no problem with housing costs in Lyme. Some concede there may be a problem with finding housing for older people interested in downsizing. It was our hope that the Planning Board would itself propose a change to the ordinance. They did not.

We drafted this language and brought it to the Planning Board, who held a public hearing on 26 January, at which they voted 5 to 0 not to recommend the amendment. They advanced three reasons: we think they are wrong on all counts.

  1. They expressed concern that this amendment would be Spot Zoning, which is defined as, "... the process of singling out a small parcel of land for a use classification totally different from that of the surrounding area for the benefit of the owner of such property and to the detriment of other owners." We do not believe this is spot zoning, because:
    • The amendment does not apply to a single parcel
    • This use is not "totally different from that of the surrounding area". In fact, it would be substantially similar to what already exists nearby. The preponderance of homes all along Route 10 north of town, and around Post Pond are on small lots. Existing homes are built on parcels that average just over three acres, which is denser that what this Pocket Neighborhood ordinance would allow.
    • This amendment would benefit the Town and not simply a single owner, as it would help meet the unmet part of our Master Plan that calls for a range of housing types.
  2. The language in the amendment about what part of Route 10 this applies to is confusing. Our intention was to allow Pocket Neighborhoods on Route 10 one mile north of the northern boundary of the Lyme Common District. If there is confusion about this, or any part of the language of this Article, the Planning Board could, immediately after the approval of the amendment, post a notice of intent to amend the ordinance so it better reflects the intent of the drafters and the Planning Board.
  3. It will bring too many children to town and negatively affect property taxes. We have addressed this misperception in our previous answers.

Q: What are the next steps?
A: The amendment will be discussed at Little Town Meeting at 7:00pm on Tuesday, 7 March. Voting by paper ballot occurs at Town Meeting the following week, Tuesday 14 March from 7:00am to 7:00pm. Voters who cannot vote in person may vote absentee on any proposed changes to the zoning ordinance.

From now until the March vote we are organizing house parties and informational sessions to let people learn more about the Pocket Neighborhood amendment and our plans for the Loch Lyme Lodge property.

Q: Where can I get more information?
A: There's more information on the web site - www.PinnacleProject.info - including the full text of the amendment. The primary contacts for Pinnacle Project are Rich Brown (84 Orford Road, 795-2525, This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) or Liz Ryan Cole (802-795-4124, This e-mail address is being protected from spambots. You need JavaScript enabled to view it )

Summary

Lyme is growing and needs a financially sustainable path forward. Demand for housing in the town keeps property values high; and several factors, driven by our zoning ordinance, increase that pressure by making it difficult, if not impossible, to increase housing stock without adding to the educational costs we face each year.

Pocket Neighborhoods make it financially feasible to build small homes, helping people remain in town. They encourage clustering, with nearby neighbors and a smaller impact on the land. Finally, those smaller homes mean fewer students in schools, while increasing the tax base more than does a single-family home on the same lot.

24 Feb 2017

 

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