Committee Report CR-1

The Housing Committee held a public hearing on September 30, 2014 beginning at 3:07 p.m. in the Basement Conference Room at 831 Massachusetts Avenue.

The purpose of the hearing was to conduct a public meeting with the Community Development Department to provide updates on inclusionary zoning, linkage, the Nexus Study, the three expiring use buildings (Briston Arms, the Close Building and Fresh Pond Apartments) that the City is working to preserve and preferences for affordable housing waitlists.

Present at the hearing were Councillor E. Denise Simmons, Chair of the Committee, Councillor Marc C. McGovern, Brian Murphy, Assistant City Manager, Chris Cotter, Housing Director, Cassie Arnaud, Linda Prosnitz and Anna Dolmatch, Housing Project Planners, Community Development Department (CDD), Mike Connolly, Aide to Councillor Carlone, Pamela Rosario-Perez, Aide to Vice Mayor Benzan, Neal Alpert, Aide to Councillor Simmons, and Paula M. Crane, Deputy City Clerk.

Also present were Nancy Ryan, Cheryl-Ann Pizza-Zeoli, Elaine DeRosa, Richard Krushnic, Sheila Dillon, Shelley Rieman, Peter Crawley, J. Hannon, Esther Hanig, James Williamson, Beverly Sealey, Inez Salisman, Terry Dumas, Michael Johnston, Cambridge Housing Authority (CHA), and Hasson Rashid.

Councillor Simmons stated the agenda for the hearing (Attachment A).  She noted that this meeting is a follow-up of the most recent Housing Committee meeting conducted in July.  She stated that the Community Development Department will provide updates on inclusionary zoning, linkage, the Nexus Study, the three expiring use buildings (Briston Arms, the Close Building and Fresh Pond Apartments) that the City is working to preserve, and preferences for CDD affordable housing waitlists.  She stated that there have been many solid discussions in the committee over the course of the past several months.  She stated her hope that this meeting will help resolve some longstanding questions and the groundwork will be laid for this committee to start offering policy recommendations to the City Council in the coming months.  She stated that on October 21, 2014 she will be hosting a Cambridge Tenants Town Meeting at the Cambridge Senior Center and noted that flyers are available (Attachment B) for interested persons.  She stated that this upcoming meeting will focus on the experience of tenants to get a better "lay of the land," a better sense of their rights and responsibilities as tenants in affordable housing, and for these tenants to report their concerns directly to civic leaders.  Councillor Simmons stated that while this Cambridge Tenants Town Meeting will not be a formal meeting of the Housing Committee, she does expect to be informed by what is learned and the results will be shared with her colleagues.  She noted that City leaders and members of the State delegation will be invited to attend.

Councillor Simmons noted that Councillor Carlone has notified her that he is unable to attend this evening's meeting due to illness.

Councillor Simmons stated that she would have the Community Development Department present their information first, followed by comments from her colleagues on the City Council, followed by public comment. She then invited the staff of the Community Development Department to introduce themselves to those present. After introductions, Chris Cotter stated that as it relates to expiring use buildings, the City still does not have final notice of the disposition of the Briston Arms.  He stated that he expects the formal notice to be received soon.  He stated that while we understand it will be a preservation purchase, there is no official notice of the purchaser.

Mr. Cotter stated that the city had received notice that the seller has elected to sell the Briston Arms to a preservation purchaser.  He noted that at the last meeting this property was offered for sale to all interested buyers, which could include preservation and market rate buyers who might look to transition the units to market-rate apartments after restrictions expire in 2018.  He stated that CDD understood that Homeowner's Rehab was looking at this building with the hope of preservation.  He stated that currently this property is at the point where the seller has selected a buyer.  He noted that the information regarding the purchase is not public at this point.  He stated that CDD has received notice from the seller about the property being purchased by a preservation buyer.  The preservation buyer is not Homeowner's Rehab and it is not a Cambridge-based preservation purchaser.  He stated that notice was sent out under the requirements of 40T, and the next step would be notice sent under similar requirements to all interested parties outlining the terms for a request for exemption, because this property is going to be sold in a transaction that will preserve affordability.  Mr. Cotter stated that CDD does expect that the purchaser will be requesting funding from the Affordable Housing Trust.  He stated that this is a positive update at this point, particularly given the uncertainty around the future of this property discussed at the last meeting.  He stated that this will be a new process for CDD as they will be working with a new entity doing preservation.  He noted that CDD will begin to look at financial and funding needs, proposed scope for rehab, rents, and other issues that will be of interest to tenants.  He noted that tenants will be notified, but at this point there is not a lot of information that can be shared.  He advised that CDD expects to have good things to report moving forward as it begins to work with the selected buyer.

Councillor Simmons inquired of Mr. Cotter if there is a closing date set for this property.  Chris Cotter responded that the agreements are still unfolding so he is not able to answer that question at this time.

Brian Murphy stated that HRI would have been the first choice of the City to purchase this property, but he noted that it is far better to have a preservation preserver purchase as opposed to a buyer who might look at a transition to market-rate housing.  He stated that CDD will work to ensure that affordability is extended and noted that it is the purchaser's intent to continue to existing affordability.

Chris Cotter stated that, as it relates to the Close Building, CDD is continuing to look at this building.  He stated that Just A Start is the general partner in that building and that everything runs through them as they control the ownership entity at this time.  He stated that JAS is exploring and has discussed with CDD strategies, options and ideas for this property.  JAS is also working with its investor partners in the ownership entity in researching opportunities.  Mr. Cotter noted that the maturity day for this building is in a couple of years.

Councillor Simmons stated the maturity date for Briston Arms 4 years, the Close Building is 2017 and the Fresh Pond Apartments is December 31, 2020.   Mr. Cotter stated that the Fresh Pond Apartments is of most concern to CDD, given the number of affordable units at that site.  He noted that the affordability at this site was already extended once in 2000.  He stated that this is a significant property with many affordable units.  He affirmed that CDD has been in communication with the owner, who is committed to affordable housing.  He stated that the owner of this property has indicated they would like to look at preservation opportunities when the time is right.  Mr. Cotter stated that CDD will continue to stay in touch and monitor the situation with this property.  He noted that CDD will be speaking with the tenant association at the site in early October to make clear that CDD is aware of this issue.

Regarding extension of affordability, Councillor McGovern asked what that means.  Mr. Cotter responded that extension of affordability depends on funding sources but it would typically mean an extension of affordability for 50 years, if not permanent affordability.  He noted that this depends on funding sources that can be used.

As it relates to inclusionary zoning, Chris Cotter stated that the City Council wanted to look at opportunities to increase the ratio of affordable units through the inclusionary process and consider how larger affordable units might be created.  He stated that the inclusionary rate is 15% but requires "like for like" units in which the affordable components mirror the market component.  When looking at reviewing compliance, CDD will look at unit size, location, and bedroom size to ensure that they have an affordable component that reflects the market component.  He noted that CDD agrees with this idea of ensuring the ratio reflects the need and seeing if larger units could be created.  He stated that CDD has been talking with legal and policy experts to find out how best to do this, whether with action by the Affordable Housing Trust, zoning change to the inclusionary provisions of the Zoning Ordinance, or through a new Nexus Study in place to reestablish the basis.  They have come to the conclusion that the best course of action is to get a Nexus Study to reexamine the inclusionary requirements.  He noted that the city needs to be aware of legal requirements to ensure that any changes to the ordinance consider the legal basis for imposing requirements, to ensure that the ordinance would not be vulnerable to any potential legal challenge.  CDD will look at the impact of market rate development on affordable housing.  They will also look at impacts of affordability on middle income households and the density bonus, which allows for two market units for each affordable unit, to test if that is the right number at this point.  He stated that more current economic data needs to be looked at.  CDD will ask the Affordable Housing Trust for funds to undertake a Nexus Study for the inclusionary ordinance.  They will then work quickly to get a team on board and get the study underway.

Councillor Simmons summarized her understanding that the CDD's recommendation around inclusionary zoning is that the City should conduct a Nexus Study before making any changes.  She then asked how long this study will take. She stated that some of her great concern is that opportunities to create more affordable housing units are slipping away from the City while we are pondering the questions of how to best move forward.  She stated that the City Council has to make a decision for the increase.  She stated that the City Council asked for a full written explanation and response from CDD.  Mr. Cotter stated that CDD does not know how long the study will take until the consultant team is identified.  The expectation is that the study will take 6-8 months, with results coming sometime in the middle of next year.  He stated that CDD will work with the identified team to compress the time in which the study is done so they can obtain recommendations sooner.  Mr. Cotter stated that the question of raising the ratio has to be looked at within the limits of what requirements can be imposed on property owners.  CDD is well-aware of how successful this provision has been in creating affordable units and wants to be careful in suggesting changes to be sure this successful program is improved in a manner that acknowledges the legal basis for the requirements.

Councillor Simmons asked if changing the inclusionary percentage would impact North Point at all.  Her concern is that waiting on the study may lead to missed opportunities in creating more affordable units.  She asked for a clarification of what buildings are in play now that would or would not be affected if changes to the inclusionary percentage were made before the study is completed.  Mr. Cotter stated that this is a fair question and they will look at the applicability of the permits in place.  The Law Department would also need to be involved in the discussion.  Councillor Simmons stated that there is a lot of development in North Point and questioned if North Point falls under the current percentage.  Mr. Cotter stated that it may be.  Brian Murphy stated that North Point will be coming before the City Council in the fall regarding the subject of parking for its retail, and this question could be considered at that time if the City Council so desired.  Councillor Simmons stated that if there is leverage to increase the affordable market share, that is a good thing.

Likewise, regarding the Courthouse, Brian Murphy stated that if the Planning Board were to grant a special permit, the expectation is that the developer would come before the City Council to get parking on the site of the City's parking garage.  He noted that this would be another opportunity for the City Council to have a conversation with a developer regarding the inclusionary or incentive provisions as they apply to that project.

Councillor McGovern stated that this is one of the most important issues facing the City of Cambridge.  He stated that there are so many people who do not qualify for support but still cannot afford to live in Cambridge.  He asked about the possibility of a tiered system in which a larger building would have a higher number of inclusionary units and a smaller development would stay at the 15% ratio.  Mr. Cotter answered that CDD had discussed and would consider if such a tiered requirement might be possible and how such a requirement might work.  He stated that it could be similar to the incentive zoning ordinance.  He noted the consultant will be asked to look at this.  Brian Murphy stated that it is important to also look at middle income units.

Councillor McGovern noted the importance of striking a balance.  He noted that the City needs to be careful about raising the inclusionary zoning requirement, because the City could end up with nothing if they make the requirement so high that developers conclude that this makes it less attractive to build in Cambridge.  He stated that he would like this number to be as high as possible while still allowing developers to build their projects.  He noted the legitimate concern of people as it relates to a Nexus Study.  He stated that whatever is going to be done needs to be fast tracked.  He urged CDD to come to the City Council for support if necessary.  Councillor Simmons pondered whether adding additional staff in the CDD would help move this process along more quickly, and she stated that if the CDD felt the job could be done more quickly with additional staff, the CDD should let the City Council know this. Brian Murphy stated that in terms of staffing, CDD is currently advertising for a new 2-year contract position.  As it relates to the inclusionary zoning piece for the Nexus Study, Mr. Murphy stated that it is about putting out an RFP, hiring a consultant, and moving forward from there.  He stated that it may make sense to pivot to the incentive study when working on the incentive piece of the conversation.

Councillor Mazen stated that there are some disincentives to making housing.  He stated that a lot of money can be made with lab space, more so than with developing housing.  Mr. Murphy stated that in the Zoning Code there is higher FAR [Floor Area Ratio] for housing than for office.  He stated that there is a greater financial incentive for developers to build lab or office space, rather than housing.  He stated that this could be adjusted.  He noted that any site being developed for residential use is going for market housing rather than affordable housing.  He noted that these are things that the City Council may want to consider.  Councillor Mazen stated that real affordable housing hasn't been built from the ground up in years.  Mr. Murphy responded that this relates to market cycles.  Mr. Murphy noted that it is important to remember how important inclusionary zoning has been in bringing affordable housing online.

Chris Cotter stated that inclusionary zoning is a moderate income program which is designed for moderate income households.  He stated that the local area median income is a higher figure than federal income standards for most affordable programs.  He stated that they are often able to create deeper affordability to lower income families.  He stated that the City works with affordable housing providers to develop more deeply affordable housing such as the 40-unit Temple Place which will be affordable to families of less than 50% median.

Brian Murphy stated that the expectation for the incentive nexus study is that recommendation should come before the City Council in January. Councillor Simmons again asked if the City is missing opportunities to create affordable housing while waiting for recommendations from the study.  She asked if the City changed the percentage without the nexus study, is it possible that this could hurt the City.  Mr. Murphy stated that he would defer that question to the Law Department.  He did note, however, that initial discussions suggest that a wiser course of action would be to wait until the nexus study is complete before changing the percentage.

ORDERED: That the City Manager be and hereby is requested to ask the Law Department to issue a determination on whether the City Council can raise linkage fees for inclusionary zoning prior to the conclusion of the Nexus Study without jeopardizing the City Council's ability to further adjust the linkage fees following the Nexus Study's conclusion; and be it further

ORDERED: That the City Manager be and hereby is requested to report the Law Department's findings back to the City Council in a timely manner.

Councillor Mazen stated that he would like to ensure that while the Nexus Study is being undertaken, the City looks toward a study to expand the extent of the funding as well as the amount.  Brian Murphy stated that this would be within the scope of the study.

Councillor Mazen stated that he would like to confirm the timeframe in which the City Council would receive the recommendations of the study.  Brian Murphy stated that he will keep the City Council apprised of all developments for the Nexus Study.  He stated that this study will take place as quickly as possible.  Councillor Mazen stated that having a timeframe in place allows the City Council to stay true to the goal of moving as quickly as possible on this matter.  Councillor Simmons stated that she is thinking about forming a working group around this issue but she would like to give it more thought.

Regarding the issue of residency requirements, Mr. Murphy stated that CDD has a preference system in place which advantages applicants in certain categories.  He stated that based on these points it would determine where one falls in the sequence of placement for affordable units.  He stated that the criteria in place have real implications.  He stated that there is a preference for emergency need but it is narrowly defined.  He stated that CDD is looking at the criteria and discussing with the Affordable Housing Trust to determine where modifications should be made, and if such modifications should be across the board.  One issue that has arisen is the issue of who should be served.  He stated that feedback from the City Council and the community would be helpful when looking at this criteria.

Councillor Simmons noted the importance of looking at policies because situations change. She mentioned, as an example, the case of a longtime Cambridge resident who moves to a neighboring community for a year to care for an ailing parent, and, when looking to move back to Cambridge, she is no longer considered "a Cambridge resident."  She stated that situations like this are problematic, as the current policies treat someone with no previous ties to Cambridge and someone with deep ties who has only been gone for a brief period as the same situation when they apply for housing. She stated that there is a blind spot in the policy and that the City Council may want to make changes when looking at overhauling the system.

Councillor Simmons stated that she received written communications from Sylvia Barnes and Jan Devereux and asked that these communications be made part of the record.  (Attachments C and D).

Nancy Ryan stated that she appreciates the request of a formal request to the Law Department.  She stated that she is confused about the Nexus Study.  She noted that she has read the previous Nexus Study and it is specific to incentive zoning.  She stated that it is her understanding that this is what the Nexus Study is, which is a look at the rate in current times.  She stated that she has never heard of a Nexus Study on residential requirements.  She asked for clarity and stated that she would like to be able to see the RFP for the study.

Richard Krushnic stated that an additional funding source should be part of the general discussion.  He stated that the City of Cambridge can afford things like no other.  He stated that the City should spend general revenue funds of the city to create affordable housing.

Cheryl-Ann Pizza Zeoli stated that there are a lot of tradeoffs to making changes to the policies.  When looking at demographic changes, the group that has been lost is families in the 50-80 AMI range.  We need to be careful that we have that in mind.  She stated that she would be concerned about bumping people in the 50-80 range without voucher or subsidy.

Sheila Dillon, Briston Arms, stated that the feeling of residents is one of tension.  She stated that literature via mail is a good thing.  She noted that there is a feeling of concern that condominiums are changing the architecture of North Cambridge.

James Williamson stated that he worries about the repeated opportunities for developers to make windfall profits.  He questioned if there is a better way to do affordable housing for people not to come back and make windfall profits.  He would like to see what MIT is doing to help alleviate the pressure that their place in the community is helping to generate.  He questioned when MIT will start housing their graduate students and noted that currently they are only housing 39%.  He stated that this is a huge number and that is a whole other dimension to the affordable housing conversation.  He does not understand how incentive payments for commercial development work.  He asked how the City develops an analysis of determining the "sweet spot?"  He noted that it is important to have all discussions transparent.  He stated that claims made by developers should happen in Cambridge in a much more transparent way.

Beverly Sealey stated that she lives at Briston Arms.  She stated that she has not heard what effect expiring use buildings will have on senior citizens.  She stated that she is concerned about tenants being very nervous.  She stated that there is no communication between the management and the tenants at Briston Arms.  She stated that she is unclear of what the Nexus Study will consist of.  She asked what questions will be asked.  She stated that human beings need housing and shelter.

Sylvia Barnes stated that she was pleased to hear the idea of preference to people who have lived in the city for a long time and then have had to move.  She stated that it is sad when people from the community cannot stay in the city.

Hasson Rashid read from a written communication (Attachment E).  He stated that what is being planned to address the category of poor people's rights to affordable, decent housing in the City of Cambridge.  He questioned the housing issues that relate to homelessness and low income renters that are currently unaddressed.  He questioned what the local City government and administration measures are being planned to address the category of poor people as it relates to affordable housing.

Mike Johnston, CHA, clarified that as it relates to CHA residency preference, if a person is displaced and living in Cambridge and can show that the last permanent residence is Cambridge, they would still be given residency preference.

Marc Levy, Cambridge Day, questioned why these issues were not combined into a single Nexus Study and concerned why it took so long for the Nexus Study when the RFP had a date of May 2014. Additionally, he submitted further questions to the committee (Attachment F).

Brian Murphy stated that the study on commercial properties is ongoing.  Chris Cotter stated that the name of the consultant team is Karl Seidman and Associates.  They are heading up the nexus study related to the incentive ordinance.  He stated that a similar study for the inclusionary ordinance is upcoming which will look at residential development.  The RFP is currently being worked on which is the same process that was used for the incentive study.  He stated that the Affordable Housing Trust will be asked to commit funds to commence this study.  Once the funds are in place, consultants will be identified.

Chris Cotter stated that when the City originally looked at adopting inclusionary provisions, the City commissioned a study to establish the basis for the inclusionary requirement.  That study was known as the Inclusionary Rationale Study.  That study came back that the inclusionary ratio be set at 15% given the need for affordable housing then and the impact of new housing development on housing affordability in the city.  This was important to have as the basis for implementing the mandatory inclusionary requirement.  That is being now updated to look at the current needs.  He stated that CDD will look at ways to get the study done as efficiently as possible.  He noted that the 2002 Nexus Study for the incentive ordinance took approximately two years.

Councillor Simmons stated that as the City Council moves to put together policies to maintain diversity in the City it is important that if a Nexus Study is the way to go, it must happen as quickly as possible.  She reiterated that if CDD needs more support to get this study done in a timely manner, the City Council should be made aware by the CDD.

ORDERED: That the City Manager be and hereby is requested to ask the Community Development Department to issue a report to the City Council providing a timeline of the inclusionary zoning Nexus Study outlining what work has already been done, what work is currently being conducted, and the date by which the City Council can expect this study to conclude and policy recommendations can be made; and be it further

ORDERED: That the City Manager be and hereby is requested to report the Community Development Department's findings back to the City Council no later than the City Council meeting scheduled for November 24, 2014.

Brian Murphy stated that he will speak with City Manager Rossi to make clear how important it is to the City Council that the inclusionary Nexus Study takes place as expeditiously as possible.

Ms. Sealey stated that she appreciates the response of the City to move at a fast pace.  She stated that she grew up in Putnam Gardens, currently lives in Briston Arms, and wants to remain in Cambridge.

Brian Murphy explained that sometimes in a preservation purchase, you can take market units to see if there are ways of increasing affordability.  He stated that CDD will work with the new purchaser to see if there are market tenants that can be moved to affordable units.  The other piece is to urge people to sit down with employees of the Housing Division so that they can understand options.  Mr. Cotter stated that CDD will look at Briston Arms to gauge the impact on tenants, what the new owner going to do with tenants, improvements and building need, etc.  He encouraged Ms. Sealey to speak with Elaine DeRosa and Cheryl-Ann Pizza-Zeoli as both CEOC and ACT have been good resources for tenants in similar situations.

Brian Murphy added that CDD is working with the Human Services Department to investigate a new pool of funding for homeless housing with some services to see where there may be the opportunity to better serve that population.

Councillor Simmons stated that the issue of 40T will be discussed at the Tenant Town Meeting.  She thanked all the participants for their attendance at the meeting.