Committee Report CR-1
The Housing Committee held a public meeting on July 9, 2014 beginning at 5:30 p.m. in the Basement Conference Room, 831 Massachusetts Avenue.
The purpose of the meeting was to discuss the Community Development Department's efforts to preserve expiring use buildings, and a discussion about inclusionary zoning and the Nexus study.
Present at the meeting were Councillor E. Denise Simmons, Chair of the Committee, Vice Mayor Dennis A. Benzan, Councillor Dennis J. Carlone, Councillor Marc C. McGovern, Councillor Craig Kelley, Richard C. Rossi, City Manager, Brian Murphy, Assistant City Manager for Community Development, Chris Cotter, Housing Director, Community Development Department (CDD), Ellen Semonoff, Assistant City Manager for Human Services, Mike Connolly, Aide to Councillor Carlone, Neal Alpert, Aide to Councillor Simmons and Paula M. Crane, Administrative Assistant, City Clerk's Office, Cassie Arnaud, Housing Planner, Anna Dolmatch, Housing Planner, Linda Prosnitz, Housing Planner.
Also present were Sheila Dillon, Victoria Bergland, Hasson Rashid, Kathy Watkins, Joseph Caparco, Alliance of Cambridge Tenants (ACT), Jan Devereux, Fresh Pond Residents Alliance, Michael Haran, Bill Tibbs, Florrie Darwin, Susan Schlesinger, Cheryl-Ann Pizza-Zeoli, Cambridge Affordable Housing Trust, Elaine DeRosa, CEOC, Andrew Spofford, Inez Salsman, Diane Hopson, Nancy Ryan, Esther Hanig, Gerald Bergman, Beverly Sealey, Lee Farris, Ellen Shachter, Susan Hegel, Susannah Deys, Peter Graham, Lauren Curry, Just-A-Start, William Smith, Jane Carbone, Peter Daly, Homeowners Rehab, Inc. (HRI), Lee Pedro, Gregory Russ, Executive Director, Michael Johnston, Terry Dumas, Cambridge Housing Authority, and Sherri Tucker.
Councillor Simmons convened the meeting and read the call of the meeting. She stated the agenda for the meeting (Attachment A) and asked that the Community Development Department then give a brief presentation regarding policies and practices of the department. She stated that because some of her colleagues have prior commitments she would give them the opportunity to speak early in the meeting.
Councillor McGovern stated that the most pressing issue facing the City of Cambridge is affordable housing. He stated that it is important to determine how best to keep people of all economic backgrounds in the city. He stated that when thinking about housing, it is important to incorporate the huge band of people and incomes, and to realize that what might constitute a decent living in other parts of the country might still be considered "struggling" in Cambridge. He stated that the three biggest areas to work on are raising the inclusionary zoning as high as possible without it resulting in developers not wanting to build anything, building on property that it is city-owned, and maintaining affordable housing.
Councillor Carlone stated that he personally has worked on 450 moderate/low income housing units. He stated that he has learned that land is everything. He noted that he was certain the Nexus study would be discussed later in the meeting, his belief that the City Council can control the Nexus study, and he then questioned if the City even needs said study. Councillor Carlone stated that he, along with Vice Mayor Benzan have proposed that parking lots be converted to affordable housing.
Councillor Simmons stated that the Alliance of Black Clergy is holding a vigil at 6:30 this evening in the wake of recent murder of Kensley David in Cambridge. She asked Vice Mayor Benzan if he would like to comment on the subject. Vice Mayor Benzan stated that he recently had the opportunity to spend some time with Mr. David's mother. He stated that during their conversation, the issue of housing and the difficulty of maintaining affordable housing arose. He stated that he would like to begin planning a mixed use development on building on City Lot #5, which is on the corner of Bishop Allen Drive and Norfolk Street. He stated that he would like to that site to be built with almost 100% affordable units. His hope is that the administration take a close look at this and noted that this lot should not be held hostage to a Master Planning process. He stated that he would like to see housing developed over the next year or so.
Mr. Rossi stated that the Community Development Department staff has worked closely with the Affordable Housing Trust to continue to try to preserve the diversity through affordable housing programs in Cambridge since the end of rent control. He noted that this was an easier task in the mid to late 1990s. He noted that some of the obstacles are the availability of sites, the cost of sites and the cost of trying to maintain affordability on expiring-use buildings. He stated that these are difficult problems even in a community such as Cambridge. Mr. Rossi stated that the price to develop affordable units is incredibly high. He stated that if the city is going to move forward in this regard it is imperative to move forward as a united community. This is a situation where all parties involved must realize and understand the full depth of the problem.
Councillor Simmons introduced Brian Murphy, and invited him to give an overview of affordable housing in Cambridge. Mr. Murphy provided an Affordable Housing Glossary (Attachment B) and Information Sheet (Attachment C) to the Committee. Mr. Murphy stated that CDD is very focused on expiring use preservation which is a critically important issue in the city. He stated that Briston Arms has been advertised for sale, and this is something the CDD is very concerned about. He stated the desire of the City Council to preserve the diversity of Cambridge by offering a range of programs to its residents. He stated that most of the programs offered are available to low and moderate income residents. He noted that these programs represent some of the ways in which lower income individuals and families have the ability to stay in Cambridge. Mr. Murphy noted the many partnerships in place with organizations such as the Cambridge Housing Authority, Just A Start, and Homeowner's Rehab, Inc. He noted that the Affordable Housing Trust allocates funding. Mr. Murphy then gave an overview on the demand for housing. He stated that over 9,000 people are on the waiting list of the Cambridge Housing Authority. He noted that this number does not reflect participants of the Section 8 voucher program.
Councillor Kelley asked about the 9,315 distinct applicant households on the Cambridge Housing Authority's waiting lists for housing. Mr. Murphy stated that the Cambridge Housing Authority has its own income eligibility criteria and wait lists, some of which have been closed for many years. He stated that the CHA often assists residents in inclusionary units, but that they are accessed through CDD with separate lists and with different eligibility criteria. Detailed data provided by CDD is from lists maintained by CDD.
Mr. Murphy stated that over the last several years, CDD has been very focused on expiring use preservation. He noted that many privately-owned affordable housing developments were built in the 1960s, 1970s and 1980s with affordability restrictions which ran for 30-40 years. He stated that without intervention, the affordable units at these properties are at risk of market-rate conversion when restrictions expire. He stated that since 2009, the City has helped preserve seven properties containing more than 424 affordable units which include the Cambridge Court Apartments, Bishop Allen/Norstin Apartments and Putnam Square/2 Mt. Auburn Street Apartments, and Chapman Arms.
Councillor Simmons asked Mr. Cotter where the upcoming expiring use buildings are located. Mr. Cotter stated that the three buildings that are of most immediate concern are Briston Arms, which consists of 105 affordable units; the Close Building, which consists of 61 units; and the Fresh Pond Apartments, which consists of 504 affordable units. As it relates to Briston Arms, Mr. Murphy stated that the financing restrictions are due to expire in a few years and at that point the owners could look to convert to market-rate housing. He stated that it is the hope that the owner sells this property to a purchaser who would preserve affordability. At this point, Councillor Simmons asked if the Community Development Department representatives could provide a definition of the 40T statute.
Mr. Murphy explained that 40T is a State statue that was passed five years ago. The Cambridge delegation was supportive of this statute, which now provides tools to housing at risk of losing its affordability. He stated that it is a "notice of sale" statue that gives the CDD the option to make the first offer for an expiring use building to preserve affordability, and that this statute allowed the City to preserve the affordability of buildings like Chapman Arms.
Mr. Cotter stated that the other side of preservation is the fiscal preservation. He noted that with CPA funds, the City has been in a position to assist a number of owners of affordable units in revitalizing existing housing. He stated that one of the best examples is the Lincoln Way development. He stated that with CPA funds they worked with the CHA and leveraged funds in order to demolish Lincoln Way and recreate a 70 unit development with state of the art, energy efficient units. This is a great example of revitalization which has preserved affordable housing.
Mr. Cotter stated that the City also assists in the creation of new affordable ownership and rental housing that is protected by long-term deed restrictions. He stated that strategies for creating new affordable housing include new construction, conversion of non-residential structures to affordable housing, and acquisition of market-rate housing. He cited examples of new construction as Port Landing (20 rental units), Temple Place Apartments (40 rental units) and Main Street Condominiums (10 homeownership units).
The discussion then shifted to what zoning tools the CDD has to work with. Mr. Cotter stated that the Inclusionary Zoning Ordinance, established in 1998, is one such tool, and it is a successful one. He stated that this zoning applies to residential developments of 10 units or greater and/or 10,000 square feet or greater. This ordinance required developers to set aside affordable units. He stated that there are 55 Inclusionary Zoning developments built or that are under construction, and that there are 10 more in the pipeline. He stated that there have been 767 affordable units (573 rental and 194 homeownership) created under Inclusionary Zoning and similar zoning requirements.
Mr. Cotter stated that the Housing Division of CDD administers City programs for first time homebuyers before, during and after their purchase. He stated that in addition to offering affordable homes for sale through a variety of City programs, the Housing Division provides homebuyer classes, one-on-one counseling, home improvement assistance and connection to resources to help families buy in Cambridge and stay in Cambridge. He stated that the Housing Division administers all rental units created through the Inclusionary Zoning Ordinance, as well as providing tenant assistance and referrals.
Councillor Simmons asked Mr. Cotter about residency requirements. She stated that many individuals and families have had to leave Cambridge due to the monetary difference in Section 8 vouchers versus market rates. She noted that people have moved out to salvage their Section 8 voucher (which would expire if they did not sign a lease in the specified timeframe), but then no longer have resident priority for housing in the City. Mr. Cotter stated that there are preferences in a many housing programs. He noted that the City of Cambridge preferences apply to inclusionary rental housing and homeownership. Preference is given to Cambridge residents and families with children under the age of 18, and additional preference for families with young children. He stated that for rental housing, preference is also given to applicants with emergency housing needs such as homelessness or a no fault eviction. Mr. Cotter stated that when speaking about preference for residents, it is defined very tightly, and that the City must be mindful of fair housing laws. He stated that it may make sense to expand the definition of preference and consider if there are changes that can be made within the preference criteria to support other city goals and programs. Some discussions worth having include whether the CDD should have preference categories for those who work in the city, for those who have CHA mobile vouchers, or those being priced out of the city.
Mr. Murphy stated that roughly 35% to 40% of Section 8 voucher holders are forced to go outside of the city because they cannot find an apartment in Cambridge. He stated that a Section 8 voucher holder only has four months time to find an apartment from the time the voucher is issued. He noted that the CHA has been a terrific partner in maintaining affordable buildings. He stated that with expiring use buildings, the deals are very complicated.
Vice Mayor Benzan asked about the feasibility of converting one lot to low income/moderate housing. Mr. Murphy stated that it there is a financial piece that must be considered. He stated that the City owns a series of lots. He stated that in some ways you need to consider how a developer might approach it. If a parcel is worth $1.5 million, that is $1.5 million equity that can go into an affordable housing transaction. For middle income housing, that need cannot be met with tax credits or typical housing subsidy sources which are limited in serving lower income households. He stated that CDD can analyze the opportunities and can then come back to the City Council with options. He stated that if the City Council's decision is to sell one of the parcels for affordable housing, it will then follow the land disposition process which can be very lengthy. Mr. Rossi added that the City wants to look at all options and does not want to rule out any possibility. He said that he wouldn't want to rule out selling land if it would end up as a better deal for the community, or would result in the greatest number of housing units.
Sheila Dillon stated that she is concerned because she lives at Briston Arms. She asked Mr. Murphy to explain the status of Briston Arms. Mr. Murphy stated that currently the affordability of Briston Arms is guaranteed until 2018. He affirmed that nothing can be done until that time. He stated that currently the building has been offered for sale. He stated that it is the CDD's hope that someone interested in preserving the buildings will be among the bidders. He stated that in the worst case scenario, where a non-preservation purchaser was selected, the state would have the right to match that offer. The ideal scenario would be that the purchaser would maintain affordability well beyond the current requirements. That is the first goal. He stated that the City will know more over the next several months as the City would expect to hear from the selected buyer. He stated that the City of Cambridge has been engaged, though it is challenged in not knowing many details of the offering. Mr. Cotter stated that representatives from CEOC and Cambridge and Somerville Legal Services are present at this meeting, and they can help tenants and advocate on their behalf as they have for tenants in other expiring use buildings.
Cheryl Ann Pizza-Zeoli, 1221 Cambridge Street, asked if Mass Housing could allow prepayment of the mortgage. Mr. Cotter stated that they will have to look into that. Ms. Pizza-Zeoli stated that she and Elaine DeRosa just met with a resident of Briston Arms who was in tears because she is afraid of what is going to happen to her building. As it relates to the Nexus Study, she stated that the City Council should remember that they can only raise the contribution rate for incentive zoning every three years. It makes sense to wait for the result of the Nexus Study, so make certain that the best decision with all the up-to-date information is made.
Nancy Ryan, 4 Ashburton Place, stated that she would like to know if there can be an explanation about what properties over 30,000 sq feet are not considered or have not contributed to incentive zoning. She stated that she is curious to know why the Inclusionary Zoning amount has not been increased. Mr. Cotter stated that certain permits currently require contributions under the incentive zoning ordinance, while other special permits have allowed certain buildings to not trigger that requirement. He said that he did not have a complete list in front of him that state which buildings have been excluded.
Gerald Bergman stated that the City Council should adopt certain principles that would maximize the affordability of housing in Cambridge. He stated that Cambridge should continue to use 80% of the Community Preservation Act for affordable housing. He stated that Cambridge should commit itself to maintaining all expiring use buildings for affordable housing. He stated that Cambridge should move immediately to adopt the recommendation of the 2002 Nexus Study. He stated that Cambridge should explore initiating a jobs linkage fee. He stated that Cambridge must be more creative and aggressive in its Inclusionary Zoning proposals. He stated that incentivizing housing for the middle class is the proper thing to do. He stated that as it relates to city-owned lots, the City must maximize the potential for low and moderate housing.
Susan Schlesinger stated that the Affordable Housing Trust cares about the issues being discussed tremendously, and it is important to keep in contact with the policy makers. She commented that hearing people talk about creating a larger pool of money is very exciting. She stated that the city needs to create a larger pool of money. She stated that incentive zoning was drawn narrowly because that was the only way to get it passed politically. She noted that federal money is shrinking and unless a bigger pool of money is created, more inclusionary housing, free city lots, and more affordable housing cannot happen. She noted that the Affordable Housing Trust is excited to work with the City Council.
Lee Farris asked why the incentive zoning rate has not been raised since 2002. She stated that she had read Ordinance Committee minutes from that time and she thinks the short summary of it is that then-Councillor Maher put the proposal into committee and it never came out again. The reasons were vague such as "it is not an opportune time" to move on this proposal. She stated that she is aware of the housing bubble but the time between 2002-2008 has been lost. She stated that there are many other possible ways that the City could look at increasing revenues for affordable housing, the ideas are too long to state at this meeting, but she would like to discuss them in the future. She stated that she looks forward to continuing dialogue to further discuss looking at viable options. Councillor Simmons stated that it is her goal is to set a housing agenda that the City Council can work on.
Ellen Shachter, Cambridge Somerville Legal Services, stated that she supports linkage around lots. She stated that the percentages for affordable housing are less than 15%. She stated that Inclusionary Zoning does not apply unless there are 10 or more units. She stated that the percentage should be higher and she would like to see an increase of affordable units to 20%. She noted that affordable units are critical for her clients. Cambridge should be looking at depth of affordability. She stated that people do not understand that the inclusionary program is not accessible to very low income people unless they have a voucher.
Susan Hegel, Cambridge Somerville Legal Services, thanked Councillor Simmons and City staff for convening this meeting. She noted that she has worked on the passage of 40T for over ten years and tried to fight against the state's recent change to the statute, which has weakened it somewhat. She stated that Briston Arms is an example of this recent change not working.
Peter Graham, 1035 Cambridge Street, Just A Start, thanked the City for its support for the work they do in partnership. He stated that as it relates to the Close Building, while it is expiring and will cost money, there is a unique role where Just A Start is engaged as a managing general partner because of activity that went on in the 1980s. He stated that Just A Start was able to step into a meaningful role and is engaged in the preservation plan. He affirmed that Just A Start has an open door policy.
William Smith, 24 Charles Place, Bronx, NY, asked what steps are being taken to preserve the affordable housing units in four years. Mr. Murphy stated that with expiring use buildings the City and its partners has had a good success rate of preserving buildings. He stated that it is imperative to keep the lines of communication open with owners, tenants and advocates. Additionally, he stated that the City and Affordable Housing Trust being aware of buildings at-risk and public and private resources available for preservation will help ensure a successful chance for preservation when the opportunity presents itself. The City resources are essential in leveraging other funds needed in a preservation transaction.
Peter Daly, Executive Director of Homeowners Rehab, Inc., thanked the committee for the meeting and stated that the challenges are greater than ever before. He stated that 40T conversations are better held when there is transparency. He emphasized that Cambridge prices have doubled but the incomes of people they are trying to help have not doubled. He stated that the federal government is bailing out. He noted that the State has been a great partner but we must look to ourselves to generate more resources. He noted that Cambridge is a wealthy community and we need to tap that wealth.
Greg Russ, 56 Churchill Avenue, Executive Director of the Cambridge Housing Authority, stated that when speaking about saved units, this is a unique collaboration and partnership with the City. He stated there is also a need to add units that are available to families. He stated that the need to create access to capital for investing in units that we have to preserve and figure out what to do with further cuts from the federal government. He stated that housing program funding is vulnerable. He stated that without money, we cannot subsidize.
Richard Krushnic, 20 Oak Street, encouraged the City and affordable housing advocates to start spending general revenues. He stated that it is a hard sell to do something like that. He stated that he works at the Boston Community Development Department. He stated that it has been a very important source of revenue, $30 or $40 million dollars currently.
Diane Hopson, resident of E. Cambridge, asked if the City has ever considered co-operatives. She stated that having Briston Arms become a 501C3 would preserve Briston Arms and prevent this from happening in the future. She stated that the Community Reinvestment Act is grants and money that they can offer for community development. She stated that this was passed in 1977. She stated that there are financial institutions that are waiting to be tapped into.
Councillor Kelley stated that one of the problems that the City has with Inclusionary Zoning is that it creates the type of units that are already being built, which tends to be studios and one family homes. He stated that as he understands smart growth housing, the goal is to build housing that doesn't bring in kids. He asked if the City is looking at a way of getting around that and how much discretion will be used before Cambridge runs afoul of state and federal law. Mr. Murphy stated that the City Council asked CDD to look into inclusionary zoning as it relates to square footage. He stated that CDD is trying to figure out if that would require a zoning change or if it could be done in another way. He noted that CDD is trying to come up with ideas to address this issue such as the possibility of a FAR bonus to people that build 2 and 3 bedroom units. He stated that we have also to find way to recalibrate the market so that a developer looks at it and deems that it is in their best interest to build 2 and 3 bedrooms. Mr. Cotter stated that CDD would like to have larger units in the inclusionary components. He noted that if the market is not building larger units, we are limiting supply of affordable housing units and putting more pressure on the existing supply of family-size units in the city. Mr. Cotter stated that it is important to consider fair housing regulations as they relate to preference. He stated that different criteria and models can be looked at if the City Council so desires.
Councillor Kelley stated that he has ongoing frustration with the lack of cohesive plan. He stated that without a plan, it makes for a difficult budget and without a budget it is difficult to say how to move forward. He stated that if there were goals with numbers attached the City Council could start talking about using general fund dollars. He stated that absent the numbers, it is a vague and challenging discussion. Councillor Simmons stated that there are many competing interests as it relates to things being asked for by the City Council. She stated the need for a working plan for housing. A piece of this work involved dialogue on preservation and maintenance. She stated that with a plan moving forward, funding can be allocated.
Councillor Kelley stated that Kennedy School would be a perfect place for a city/early childhood education program. He stated that the City Council is not giving CDD good marching orders. He stated that he would like to see a number for what it will cost. He stated that the City should have a plan to buy these buildings. He questioned how much money the City should be raising to put aside to purchase buildings. He stated his ongoing frustration with the lack of clarity. Mr. Murphy stated that some of it comes down to how comfortable we are as a community about how much social engineering we want to do and uncertainty regarding what opportunities present and the many variables that play into what funding might be needed from the city.
Councillor Simmons noted that the Committee has received communications via the City Clerk's Office from Beverly C. Sealey, Fred, Alliance of Cambridge Tenants and Gerald Bergman (Attachments D, E and F) and asked that these communications be made part of the minutes of the meeting.
Mr. Cotter stated that it is important to think about what type of community we want. Councillor Simmons stated that it is important to have a housing conversation that leads us to a plan. Councillor Kelley stated that CDD is getting mixed messages. Councillor Simmons stated that the goal of the Committee is to make sense out of that.
Mr. Cotter stated that the City has put out an RFP for the Nexus Study. He stated that there have been two proposals that are being reviewed which will be followed by a recommendation to the Purchasing Department. He stated that the City Council can expect a report back by early 2015.
Councillor Simmons asked about the recommendation to the City Council regarding inclusionary zoning. Mr. Cotter stated that CDD is looking at the inclusionary zoning and talking internally with other departments on how best to approach that. He stated that if there is need for an ordinance change and methodology changes, a new rationale study would likely be needed. Councillor Kelley stated that 15% bumps down to under 12%, when it is put into practice. Mr. Cotter indicated that to have 15% affordable housing be the actual outcome, the base requirement would need to be increased to roughly 23%. Mr. Cotter stated that CDD is aware that if we look at raising that requirement we will also need to consider the density bonus, which compensates developers for creating required affordable units.
Councillor Kelley asked if the City runs the risk of failure if studies are not undertaken. Mr. Cotter stated that you do get into the legal realm and you want to put something into place that can be defended if ever challenged. He noted that in addition to the policy goals, you need to also look at legal standards and justifications. Mr. Cotter stated that they are trying to move forward with the best approach. Councillor Simmons asked if it is possible to get that information within thirty days. Mr. Murphy stated that CDD will make its best effort.
Councillor Simmons stated that the discussion will be ongoing and that the long-term goal is a housing plan. She stated that the diversity is the goal but the City must be deliberate if we want economic growth as well as ethnic and economic diversity.