The Housing Committee held a public hearing on January 13, 2015 beginning at 6:02 p.m. in the Sullivan Chamber.
The purpose of the hearing was to discuss the production of language for a city-wide affordable housing overlay district, to be considered by the City Council to identify areas in the city that would be best suited for an affordable housing overlay district.
Present at the hearing were Councillor E. Denise Simmons, Chair of the Committee, Vice Mayor Dennis A. Benzan, Councillor Dennis Carlone, Councillor Timothy J. Toomey, Jr., Councillor Nadeem Mazen, Councillor Leland Cheung, Brian Murphy, Assistant City Manager for Community Development, Chris Cotter, Housing Director, Community Development Department (CDD), Michael Connolly, Aide to Councillor Carlone, Councillor Mazen, Neal Alpert, Aide to Councillor Simmons, and Paula M. Crane, Deputy City Clerk.
Also present were Tom Stohlman, John Hawkinson, Jan Devereaux, Esther Hanig, Elaine DaRosa, CEOC, Hasson Rashid, ACT, Robert Winters, Peter Daly, HRI, Peter Graham, Just A Start, Lee Farris, and Reverend Diane Hopson.
Councillor Simmons convened the hearing and read an opening statement. (Attachment A). She advised the attendees of the agenda for the meeting (Attachment B).
Councillor Simmons then opened the meeting to public comment.
Hasson Rashid asked how the discussion has evolved and asked for some additional background information. Councillor Simmons explained that this meeting came about as a result of Policy Order #5 of October 20, 2014 (Attachment C) regarding producing language for a city-wide affordable housing overlay district. This Policy Order was adopted and referred the Housing Committee for further discussion.
Robert Winters, 366 Broadway, stated that the call of the meeting was vague regarding specific Affordable Housing Districts. He stated that as he had little background information on the call of the meeting, it was difficult to prepare public comment when one doesn't quite know what will be up for discussion.
Lee Farris stated that she did read the material from the CDD (Attachment D). She stated that there are a lot of good ideas, but one point that she would like discussed is the criteria that will be used to evaluate which ideas are the ones that the city wants to pursue. She stated the need to prioritize ideas. She said that there may be competing criteria. Ms. Farris stated that she would like to provide background to the committee on the Port Landing development. She stated that originally the developer, Sean Hope, proposed 28 units, which Area 4 supported. She stated that by the time the developer applied for a variance for the building, he was down to 20 units. She stated that this happened because an abutter objected to the additional height. Because Mr. Hope did not want to delay the project, he reduced the number of units. She stated that it is important for the city to think about where the developers are self-censoring themselves. She stated that perhaps there could be a simple change such as: "if a building is 100% affordable housing, then it can be one floor higher than the surrounding neighborhood buildings." She stated that she would like an overall housing policy for the city.
Esther Hanig stated that it is very important to expand stock of affordable housing. She noted that she is well aware of how extensive the need is and how limited the funds are.
Peter Daly applauded the committee for taking on this issue. He stated the need to think outside of the box. He stated that he is looking forward to pursuing different ideas.
Peter Graham stated that he welcomes the opportunity to have these discussions. He stated that he has been engaged with CDD regarding options. He noted that the city is at the beginning stages of this evolution.
Elaine DaRosa stated that even when there is money on the table, the process inhibits us. She stated that it is not always a money issue, it is confused thinking.
Jan Devereaux, 255 Lakeview, stated that the previous night's Roundtable Meeting was excellent. She stated that the city has not answered the question about growth policy regarding housing. She stated her hope that before the city looks at a zoning overlay there will be an inventory of all types of housing.
Councillor Simmons closed public comment.
Councillor Simmons stated that the Housing Committee has set as a goal to put together a housing policy for the City of Cambridge around affordability. She then asked Brian Murphy for a summary of the information provided by CDD.
Brian Murphy stated that this is the first pass at responding to the Policy Order #5 of October 20, 2014. He stated that it would be helpful to hear a conversation amongst City Councillors regarding tools that they are suggesting. He stated that there are a range of challenges to creating new affordable housing in Cambridge. He stated that the goal of the discussions being held both internally and with local developers of affordable housing has been to identify ideas for changes to the Zoning Ordinance which would make new development of affordable housing more feasible in the current market, and which would encourage the development of affordable housing developments throughout the city, particularly in areas where there are fewer existing affordable units. Mr. Murphy stated that part of the reason for including case study information is to provide us with a better sense of what can happen when a project runs into opposition. He stated that, for example, while Putnam Green has been successful, Temple Place has been a nightmare. He stated that cost in time, money and units due to opposition made an incredible difference in this project. He stated that advantageous bidding conditions were lost. He also noted that another critical piece is to provide greater certainty.
Chris Cotter stated that CDD has been talking about this matter internally with the Affordable Housing Trust and affordable housing developers since the adoption of Policy Order #5. He stated that they looked at case studies of the most recent new construction projects and at sites where they have not been successful in advancing affordable developments in the current market. He stated that they looked at zoning. He noted that the case studies show that there is a history of asking for some zoning relief for affordable developments, but greater relief would be needed in low-density areas. He noted that as it relates to the idea of a citywide overlay district, they have started to look at what would need to be included in that. He noted that there are zoning parameters and dimensional standards that will have a significant impact on development. He said that another limiting factor when looking at a site is parking and the high cost of putting parking underground. He stated that they have thought about what an overlay district would include. They have talked about ideas for citywide standards for affordable housing developments. He stated that if there were city standards, it would give an advantage to affordable housing developers and give them the ability to look at something denser to be able to obtain financing and necessary subsidy funds available for those units. He stated that currently they are going through a process wherein affordable housing developers have been asked to look at what zoning standards would have been needed in order to make affordable housing development feasible at certain sites that had been deemed infeasible, given zoning and/or cost and financing constraints, and that this process is currently ongoing.
Vice Mayor Benzan asked Mr. Cotter to define "overlay district." Chris Cotter responded that an overlay district would be on top of base zoning districts in different areas of the city and that new standards for affordable housing development could either apply to certain areas by overlay districts or be applied city-wide to encourage and facilitate affordable housing developments. He stressed that parking is an issue and often a determinate factor which could be considered in an overlay district or as a broader change in zoning. He stated that parking often becomes the most difficult part in making a project feasible. He noted that allowing multi-family and townhouse development city-wide may be beneficial. Mr. Cotter stated that provision 5.28.2 has worked but it is also something CDD will consider when looking at ideas for changes. Mr. Cotter added that when talking about affordability, it is also important to define what types of developments would be eligible for any zoning incentives, and to consider middle-income affordability.
Councillor Simmons then reiterated her understanding of the definition of overlay district for the committee and the attendees. She noted that an overlay district lays over existing zoning. Mr. Cotter added that it is in addition to base zoning requirements. Brian Murphy stated that this overlay district would allow for one set of rules when building market rate projects and another set of rules when building affordable units, which might also allow a permitting process that would not be subject to the same kind of approvals. He stated that the goal of these changes is to make it easier for affordable housing developers to bid on property for sale, knowing they can undertake the types of developments needed to support a competitive sale price, and knowing what type of development density could be approved on the site for an affordable development. He stated that it is not the case that non-profits are lacking deposit funding, but the question is how much can they afford to bid on a property when running numbers and competing with market-rate developers who can pay more for sites. He stated that because building affordable housing in Cambridge is more expensive than in any other place in the Commonwealth, state funding is difficult to obtain and often comes with concerns about total development costs.
Councillor Simmons stated that currently there are 7,000-9,000 people on the Cambridge Housing Authority's list that are awaiting affordable units. Since that list is currently closed, the need for affordable units is dire. She stated that time is ticking. She stated that she would like to see something citywide, not just in certain neighborhoods.
Councillor Cheung stated that Policy Order #5 came about as a result of the desire to have more affordable housing that is not geographically clustered. He stated that it makes sense to think about affordable housing in the entire city, and that the question is how to accomplish more citywide affordable housing. Brian Murphy stated that while looking at what can be done city-wide to advance housing goals, the focus is also looking at affordable housing in areas where there is currently very little of it. He stated that the city could look at affordable housing as it is in C1 and C1A areas with as-of-rights based on these areas. Chris Cotter added that CDD is looking at multifamily districts and the types of developments allowed under those development standards as a model for an overlay or city-wide affordable housing density standards. He noted that CDD is looking at what standards need to be based on where the market is so that affordable housing developers can compete in areas where they are currently unable to compete with market offers.
Vice Mayor Benzan asked if it is possible to build affordable housing in all parts of city as-of-right and in a way that is predictable to a developer. He noted that in recent years there have not been any new affordable housing developments. He stated that many of the projects have been tied up in court. He stated that a comment was made earlier in the meeting that the city does not have growth policy. He explained the importance of beginning with a growth policy. Vice Mayor Benzan stated that he is an advocate for building affordable units on lots 5 and 6 in Central Square and would like to see 1,000 additional affordable housing units over the next 3-5 years.
Brian Murphy responded that the question is how to pay for it, and what the total cost to the City would be for it. He stated that it comes down to what is the density in those parking lots. He stated that it is about tradeoffs, but a density bonus could be given. He noted that this should be based on underlying zoning. Chris Cotter stated that the city has to look at things differently if we want to see new all-affordable housing developments advanced. He noted that the primary focus of the City and its partners has been preservation of expiring use units over the last few years, and after many successes in these efforts, that staff are discussing how capacity could now be redirected toward pursuing new development of affordable units. He stated that it is important to look at how affordable housing projects can happen more quickly and how to keep the overall cost in line with funder requirements. He stated that while a good number of affordable units will come through the inclusionary program, the city would need to rely on the development of all- or mostly-affordable developments to add new affordable units to meet that goal. The city would need to consider the funding needed to do this, as well as zoning changes which would assist such a development goal given the timelines needed to produce new units successfully at that scale. Mr. Cotter stated that the cost per unit for new units is approximately $500,000. He stated that a lot of traditional housing sources are now very competitive and that the City would have to think creatively about how new development would be financed.
Vice Mayor Benzan stated that he has heard that affordable housing units can be built at a cost of $125,000 as opposed to $500,000. He stated that there is a misconception that the city is paying for inclusionary zoning units. Chris Cotter stated that the inclusionary ordinance has been successful beyond expectations. He noted that the number of units in the last 12-14 years is over 800 units completed or now moving through construction which would have otherwise cost several hundred million dollars to produce in city-funded developments. The only public funding for inclusionary zoning units is the cost of CDD staff time in overseeing the program.
As it relates to the parking requirement, Vice Mayor Benzan asked CDD for suggestions given the under-utilization of parking. Chris Cotter stated that they are looking at that and asking affordable housing developers for their input.
Councillor Carlone stated that he knows when there are inclusionary housing projects they can boost FAR if they supply half of that increase as affordable housing. He asked if the same rule applies if it is an affordable housing project. Chris Cotter answered in the affirmative. Councillor Carlone noted that there could be up to 30% increase in FAR. Chris Cotter stated that the ability to take advantage of the inclusionary density bonus for all-affordable developments is in place. Councillor Carlone stated that in the Planning Board hearing on the Volpe upzoning, at least two of the board members stated that upzoning should be 15% affordable plus 15% moderate. He stated that it is important to be aggressive with aggressively sized buildings.
Councillor Carlone stated that the optimum range would be no less than 40. He is thinking that residential districts will be tough. Chris Cotter stated that it depends on the site. He stated that homeownership is different than rental. Councillor Carlone stated that it seems to him that if it is affordable, one extra story can be worked in. As it relates to funding, Councillor Carlone commented that if we are serious about affordable housing as a city, we have to come up with the extra funding. He stated that it is important to design buildings with less of a block feel to them. Brian Murphy stated that the city has a good track record when you look at affordable housing projects. Councillor Carlone stated that the period of architecture is not the best even when it is a better building. That is where the premium comes in. He stated that it is difficult to get the sites that we are fighting for. He stated that the City has to bite the bullet. He stated that he agrees on proximity and you have to pay the premium. Councillor Carlone stated that he is pleased with the overview material supplied by CDD. He stated that the City Council has to come forth with the money.
Councillor Toomey stated that he has been outspoken on the issue of equal distribution of affordable housing across the city. He stated that he was in favor of rent control. He stated that there is no part of the city in which acquisition cost will not be an issue. He stated that Peter Daly mentioned that we must think out of the box. He commented that his feeling is that there are many parts of the city where there are huge houses on huge pieces of land. He questioned how to implement a program whereby benevolent homeowners could sell these properties to the city at a reduced rate. He stated that this is something to think about. He stated affordable housing has been a top goal of the City Council for as long as he can remember. Councillor Toomey asked CDD for a definition of affordable, working class, moderate, and middle-income. Brian Murphy stated that he would get that information to the committee.
Councillor Mazen asked about larger parcel/smaller housing sales and opportunities across the city. Brian Murphy responded that there is parcel in an area of the city that was 18,000 or 20,000 square feet. He said that it was redeveloped as 2-3 high end homes. He noted that this area could have supported 15-20 units of affordable housing but the zoning in place would not allow for that to happen without significant relief.
Councillor Mazen asked about being outbid for properties by someone paying cash. Chris Cotter stated that it is frustrating but due to permitting constraints there is often a permitting contingency in offers. If an affordable housing developer does not get permitting, the project is often not feasible. He stated that an offer from someone paying less without a contingency may be seen as a better offer. Mr. Cotter stated that access to cash is not always the issue. He stated that quick access to funds from the Affordable Housing Trust used to be a bigger advantage but housing agencies are now often being outbid by people with cash who can close quickly.
Councillor Mazen questioned if an affordable housing property pays for itself over time. Mr. Cotter stated that for rental income from affordable units is not sufficient to cover the cost of the project so that capital and operating subsidies are needed to make up the difference. Councillor Mazen stated that it would make sense to bond out a large chunk of money to increase latitude. Mr. Cotter stated that CDD has talked about this but the city has not needed to do this to date. This could be considered if there was a need in the future. Councillor Mazen stated that he would like this idea included in the topics to discuss moving forward.
Councillor Mazen inquired if, when discussing next steps, we are talking about hypothetical parcels. Chris Cotter responded in the affirmative and stated that these are based on recent sales to best gauge what the market is for these types of properties.
Councillor Mazen asked if there is a target population for Cambridge. Brian Murphy responded in the negative. He stated that the population in Cambridge is approximately 107,000. He stated that he will provide the committee more detailed information.
As it relates to Vail Court, Councillor Mazen stated that the update stands alone. He stated that he has had contact with the owners. He stated that this family does 40B and other developments in the state. He stated that the family is in litigation so they can't act on the Vail Court property. He stated that the owners want to create a really good project and that there is the potential for something good to happen. He stated that he wanted to share this information because he does not think this lot will provide housing if it goes through the land taking process. He stated that he is trying to work with the City Manager and the owners of this property. Brian Murphy stated that the Inspectional Services Department recently inspected the property and noted safety concerns. He noted that there may have been an issue of a squatter and it was important to ensure that the building is secure. Chris Cotter stated that he was present at the inspection and he spoke with the owner's representative who expressed interest in a dialogue. Councillor Mazen stated that he would be happy to set this meeting up.
Councillor Simmons stated that it is the goal of the City Council to keep people in the city. She stated that Vail Court has been sitting for a long time. Councillor Mazen said that if the city does an adverse taking, his gut is that we are trading one legal battle for another. Councillor Simmons stated that she wants to see something happen at that site. Councillor Toomey stated that the owners have never expressed any interest in working with the city. Vice Mayor Benzan stated that there is pending litigation but the owners are not prohibited from selling the land. He stated that the owners can enter into agreement to sell the land to the city. He stated that the property is blighted and it is unfair for the neighbors. He stated that he is interested in having a conversation with the owners.
Councillor Carlone added that the previous family representative came forth with a proposal approximately 10-12 years ago. He noted that it was a handsome project but was turned down by the Planning Board and BZA. Councillor Mazen stated that the owners want to do something cool with the property. He stated that anything that can be done in the meantime to make it a reasonable benefit to the community would be beneficial.
Councillor Simmons stated that she would like a timeline in the event that the city decides to create an overlay district.
When asked about the Tokyo Restaurant site by Councillor Simmons, Brian Murphy stated that Tokyo Restaurant was purchased by the neighboring car dealership.
Councillor Simmons and Vice Mayor Benzan asked what the quickest route would be to get 1,000 affordable housing units into the market. They questioned if it is quicker to obtain these units via inclusionary zoning or acquisition of land. Brian Murphy stated that it would be a combination of both. He stated that another piece of the conversation is to have a dialogue with Secretary Ash to discuss housing in Cambridge. Mr. Murphy noted that at the state level, they have a policy which sets limits for costs of affordable housing developments, which makes new affordable development in Cambridge challenging given the high cost of land and development here. The ability to work with the state would be a significant factor in achieving this as new affordable housing relies on leveraged state funds.
Vice Mayor Benzan asked about focusing on parcels that are available. He suggested that maybe the City needs to approach Harvard to give the city land. He asked how many of the 800 affordable units have been created through inclusionary zoning as opposed to acquisition of property. Chris Cotter stated that he will forward that information to the committee.
Councillor Mazen stated that he would like to have an understanding of how many parcels are available and what criteria would be used in the approach for these properties.
Councillor Carlone stated that it is important to build a community. This is why he thinks that this has to be a cooperative undertaking. He cited a United Nations study that says that great cities have 15% open space. It is more than housing. He contends that the City Council has to put forth a good amount of money that would increase yearly because CDD will need those funds to acquire land. He stated that if the City of Cambridge cannot do this given the economy, then no one can. Cambridge is in a lucky position with a low tax rate. He stated that this is an issue for the ballot. He thanked CDD for their efforts.
Councillor Simmons thanked all those present for their attendance and participation.
The hearing was adjourned 7:59 p.m. .
For the Committee,
Councillor E. Denise Simmons, Chair