A communication transmitted from Owen C. O'Riordan, Acting City Manager, relative to Awaiting Report Item Number 22-31, regarding funding received through the housing linkage program

C I T Y O F C A M B R I D G E Community Development Department 344 Broadway Cambridge, MA 02139 Voice: [phone removed] Fax: [phone removed] TTY: [phone removed] www.cambridgema.gov IRAM FAROOQ Assistant City Manager for Community Development SANDRA CLARKE Deputy Director Chief of Administration KHALIL MOGASSABI Deputy Director Chief Planner To: Owen O’Riordan, acting City Manager From: Iram Farooq, Assistant City Manager for Community Development Date: August 1, 2022 Re: Awaiting Report #22-31, Policy Order #O-86 dated May 9, 2022, regarding funding received through the housing linkage program In response to the above referenced Policy Order, we submit the following. Section 11.202 of the Zoning Ordinance (the ‘Incentive Zoning’ provisions) requires developers to contribute funding to the Affordable Housing Trust based on amount of non-residential building square footage they build. An amendment to the Incentive Zoning provisions in 2015, coupled with subsequent contribution rate amendments and CPI increases, significantly increased the housing contribution rate and greatly expanded the applicability so that the Incentive Zoning provisions now apply more broadly to large developments throughout the city. The Affordable Housing Trust received the first housing contribution under the updated Incentive Zoning provisions in FY2019. Since the adoption of the 2015 amendments, the Trust has received $44,366,047 through the Incentive Zoning provisions. A total of $6,426,630 in Incentive Zoning contributions were received under the original provisions from its inception in 1988 through the 2015 changes. Housing contributions since FY2019 are noted in Table 1 below. YEAR HOUSING CONTRIBUTION ($) FY2019 2,109,726 FY2020 6,568,355 FY2021 9,768,279 FY2022 25,919,687 TOTAL 44,366,047 Table 1: HOUSING CONTRIBUTIONS RECEIVED

2 Looking to the future, we have projected housing contribution funds that are expected over the coming years from developments that have received special permits. Incentive Zoning contributions are typically received at the time of certificate of occupancy when developments are completed. It is, therefore, challenging to estimate the precise timing and amounts of housing contribution, especially from projects in the early stages. There are many factors that impact how and when proposed developments move forward and when they are completed. We cannot fully anticipate or account for these but have discounted estimates for developments that are in the earlier phases of development to attempt to address them. In Table 2, we have included our estimates for developments that are now under construction, and more conservative estimates for developments where permitting approvals are in place but building permits have not yet been issued. We have not included estimated contributions for developments for which special permits have not been approved. YEAR HOUSING CONTRIBUTION* ($) FY2023 10,622,000 FY2024 30,353,000 FY2025 11,039,000 FY2026 13,240,000 TOTAL 65,254,000 Table 2: PROJECTED FUTURE HOUSING CONTRIBUTIONS *In FY24 and FY26, includes projected payments to the Affordable Housing Trust required by the First St Garage parking disposition agreement.