a report from Councilor E. Denise Simmons, Chair and Councilor Sumbul Siddiqui of the Housing Committee for a public hearing held on May 15, 2018 to discuss the development of an Affordable Housing Overlay District plan

Attachment A Housing Committee Hearing May 15, 2018 Call of Meeting: The purpose of this meeting to receive CDD updates on affordable housing production; development of an Affordable Housing Overlay District plan Inclusionary Zoning Draft Regulations & to ask CDD to advance the conversation on tenant protections. AGENDA 1) Updates from the Community Development Department • Update on the City Council 1,000 affordable unit goal from prior term • Update and considerations for changes to the criteria through which preference is given to certain housing applicants 2) Development of an Affordable Housing Overlay District Timeline 3) Tenant protections

Attachment B Opening Remarks from Councillor Siddiqui I am looking forward to the conversation today. We have two updates from the CDD: one on the goal of 1,000 affordable units by 2020, and an update on potential changes to applicant priority criteria for the city's affordable units. I'm also looking forward to discussing two goals laid out by the committee this term. An Affordable Housing Overlay District has been in conversation for some time, and my hope is that we can set a timeline for this and all leave with a shared understanding of how the process will proceed. The second goal, drawn from the Comprehensive Housing plan, focuses on tenant protections. This could include 1) tracking the number and causes of evictions in the city, I want to note it isn't as simple as have you ever been evicted, the better question is when and where you've lived and why you've left because you can be forced to move, whether because of a formal or an informal eviction, in the end it is about getting to the heart of anti-displacement, 2) other ideas from the City Council are additional funds for legal aid for housing-related cases (we currently fund four attorneys through the multi-service center), developing a Tenant Harassment Prevention Program, creating an online Landlord Watchlist to share info about housing law/code violations, a local condo conversion law, and thinking about how we help our Section 8 tenants.

Attachment C CITY OF CAMBRIDGE Community Development Department IRAM FAROOQ Assistant City Manager for Community Development MEMORANDUM SANDRA CLARKE To: Deputy Director Louis A DePasquale, City Manager Chief of Administration From: Iram Farooq, Assistant City Manager for Community Development Date: May 14, 2018 Re: Update on progress made toward the goal of creating 1,000 new affordable units In January 2015, the City Council asked CDD to report on the feasibility of having the City commit to creating 1,000 new affordable housing units by the end of the decade. In September 2015, we identified a number of strategies to increase the production of new affordable housing. These ideas came out of discussions with members of the Affordable Housing Trust and local affordable housing providers regarding the City's past successes in creating affordable housing and new ways to increase production. In that report, we noted that the goal of creating 1,000 new affordable units would be challenging, but that setting an ambitious goal could help further focus efforts on affordable housing creation and stimulate support for affordable housing throughout the community. This memo provides an update on the City's progress toward meeting that goal as well as an overview of specific actions taken by the City toward the Council's goal. NEW AFFORDABLE HOUSING PRODUCTION We are pleased to report that, looking at new City-funded affordable housing now underway and Inclusionary Housing production, we are making very significant progress toward meeting the ambitious 1,000-unit goal. The following table provides a summary of the affordable housing units completed, underway and in the pipeline: Total Affordable Housing Inclusionary City-Funded Creation: (1/1/2015 to Housing Housing present) 415 302 Affordable Housing Units 113 Completed 168 395 Affordable Housing Units 227 344 Broadway Under Development Cambridge, MA 02139 19+ TBD 19* Affordable Housing Units Voice: [phone removed] Under Review Fax: [phone removed] TTY: [phone removed] Total 829+ 548 281+ www.cambridgema.gov * inclusionary housing projects now under review

City-funded Affordable Housing Development After an intense focus on preserving properties with expiring affordability restrictions in the early part of this decade, the City and our affordable housing partners have focused efforts and resources on new housing development. We have seen 113 new affordable units created in the past 3 years, including: • Auburn Court: 9 new affordable rental units were built in 2017 in conjunction with renovations at this 77-unit Cambridgeport property; • Port Landing: 20 new affordable rental units on Harvard Street in the Port were completed in 2016; • Temple Place: 40 new affordable rental units in Central Square were completed in 2016. • Rindge Avenue: 14 new affordable SRO units for formerly homeless women were completed in 2015 in North Cambridge; • Cambridge Street: 10 new affordable units were created through the acquisition and conversion in 2015 of an existing market-rate building in East Cambridge; Briston Arms: 9 new affordable units have been created through conversion on turnover of former market-rate units to affordable housing since this 154-unit former expiring use property was preserved in 2015; • Cambridge Court: 9 new units of affordable senior housing have been created through conversion on turnover of former market-rate units to affordable housing since this 154-unit former expiring use property was preserved in 2012. • HomeBridge: 2 affordable homes have been purchased by first-time homebuyers since the expansion of the City's homebuyer assistance program in 2017; We have also assembled a robust pipeline of City-funded affordable housing development projects which will create additional new affordable units. New housing now under development includes: • Concord Highlands: City-funded acquisition and development of a property on Concord Avenue where construction will soon begin on 98 affordable rental units for very-low, low-, moderate-, and middle- income households, the largest all-affordable housing development undertaken in more than 30 years; Frost Terrace: City-funded purchase of a property at the corner of Massachusetts Avenue and Frost Terrace in Porter Square where a proposal to build 40 affordable rental units has been approved and funding has been requested from the state; • Linwood Court / Squirrel Brand Apartments: as part of recapitalizing these two properties to undertake needed repairs, a proposal to create 2

23 new affordable rental units has been approved and funding has been requested from the state; • Manning and Russell Apartments: Cambridge Housing Authority will be adding 6 new units in conjunction with renovations at Manning and will create another new unit through renovations underway at Russell Apartments; • Vail Court: following the City Council's approving the taking of the long- vacant Vail Court site, a planning process was begun by the City and Affordable Housing Trust to discuss how this property could address housing needs; while these efforts have been stalled by pending litigation, this site remains a great opportunity to create a significant amount of new affordable housing in Central Square once the planning process can move forward; • Other new sites: in addition to the new housing noted above, the City and affordable housing providers are actively assessing the feasibility of other opportunities to create new affordable housing at: • properties owned by affordable housing providers which could accommodate more units; • through acquisition and conversion of market-rate rental housing; and, • acquisition of other properties where new affordable housing can be built. In total, these City-funded housing developments are expected to produce more than 300 affordable units once complete. While we are optimistic that these City-funded developments will be successfully completed, there are a number of new challenges which make affordable housing development very difficult. While the City continues and increases its longstanding commitment to deeply subsidizing affordable housing development, access to other needed funding will be a significant factor which will impact the timing and success of our housing production efforts. All of the developments underway will rely on commitments of federal resources to generate private investment, which, combined with other public subsidy funding, will be needed to produce new affordable housing. While commitments are in place in some cases, and will hopefully soon be for others, the landscape for affordable housing funding is changing significantly and quickly, and access to scarce resources will become increasingly competitive. Changes in the tax code have reduced the yields from private investment in affordable housing, while continuing threats to federal housing funding and concern about the federal commitment to housing have made funders more cautious in making commitments. While we are pleased to report the progress made in creating new deeply affordable housing with City funding, we want to underscore the fact that the successful completion of these ambitious efforts will only happen with private investment and support from federal and state and partners. 3

Inclusionary Housing In addition to new City-funded affordable housing, a substantial number of affordable units are being created in market-rate inclusionary housing developments. In the past 3 years, 302 inclusionary units have been completed, with an additional 227 units now under construction. We have also begun to see inclusionary developments subject to the increased inclusionary provisions, which require affordable housing to be 20% of floor area in new buildings. We are currently reviewing plans for new inclusionary housing developments which are expected to begin construction in 2018 and will result in the creation of approximately 19 additional affordable units. Adding everything together, a total of 548 new affordable units have been or are expected to be created through Inclusionary by the end of 2020. AFFORDABLE HOUSING STRATEGIES When asked by the Council in 2015 to assess the feasibility of creating 1,000 new affordable units by the end of 2020, we noted that this would require more than doubling the City's historic affordable housing production levels. We outlined a range of measures which, in combination with existing or expanded commitments, would be needed to achieve this goal. Since that time, the City has adopted and implemented many of these ideas, greatly improving chances of reaching the 1,000-unit production goal. The following provides an overview of the ideas raised and progress made in implementing those ideas: ~ CPA Funding: the City has continued to allocate the maximum amount of CPA funds for affordable housing, continuing the practice begun in FY2001 of appropriating 80% of CPA funds to the Affordable Housing Trust through the most recent commitment of $10,056,000 in FY2018 and bringing the total investment of CPA funds in affordable housing to $144,256,000. Given the high cost to produce new affordable housing, coupled with financing challenges noted above, this local commitment remains critical. • Incentive Zoning: In September 2015, the City Council adopted zoning changes which expanded and strengthened the City's incentive zoning provisions while almost tripling the housing contribution rate for non- residential development. The housing contribution rate now stands at $14.95 per square foot. We will revisit the nexus study for incentive zoning in FY2019. ~ Identifying new City funding: The FY2018 City budget included $2,800,000 in new funding for the Affordable Housing Trust for the first time since the adoption of CPA in 2001. This commitment, representing 20% of budgeted 4

building permit fees, will continue in FY2019 with an increased allocation of $3,450,000 and is expected to continue in FY2020 and beyond, and will greatly assist in our efforts to expand affordable housing production in a time of uncertainty about other resources for affordable housing development. ~ Inclusionary Housing: In April 2017, the City Council adopted amendments to the City's Inclusionary Housing provisions which increased the affordable housing set-aside requirement from 11-12% of units to 20% of floor area. As inclusionary housing has become an increasingly productive component of the City's affordable housing development approach, the impact of expanding these provisions will be significant. • Publicly-owned land for affordable housing: As noted above, the City acquired Vail Court, a long-vacant and blighted property, for redevelopment as affordable housing. Consideration of other opportunities to create affordable housing on City and other publicly-owned land will continue. In addition to the accomplishments listed above, there were other ideas raised in 2015 which are still being explored as possible ways to enhance the City's affordable housing production capacity. The ideas noted below have all been discussed by the Envision Cambridge Housing Working Group which has also identified them as housing strategies to consider as the Envision process moves along: • Zoning for Affordable Housing: The idea of an affordable housing overlay has been discussed in several contexts, and there is continued interest in exploring the feasibility of creating new zoning standards for affordable housing development which would allow additional density, reduced parking and/or other relaxed dimensional standards for affordable housing. This idea is one of the strategies identified by the Envision Cambridge Housing Working Group, and will continue to be discussed in Envision process and will be an action item for CDD. • Streamlined permitting for Affordable Housing: Similar to the zoning overlay described above, there has been interest in exploring ways to create a streamlined process for the permitting of new affordable housing developments through zoning changes which would allow expeditious permitting for affordable housing. This idea is another one of the strategies identified by the Envision Housing Working Group, and will be considered further in the Envision process and will be an action item for CDD. • Working with institutions and employers to create housing to address demand from students, affiliates and employees: the impact of university affiliates and large employers can be significant, and 5

engaging institutions could help address this impact on the housing market. This has also been identified as an important action by the Envision Housing Working Group. • Exploring other creative ways to finance new development / identifying new funding sources: This is an increasingly critical need as continued threats and uncertainty in federal support for affordable housing challenges our ability to assemble a steady pipeline of all affordable developments. While the needs of individual developments will have to be considered case by case, the overall impact of identifying new sources of funding for affordable housing, such as new tax revenue from new short-term rentals or transfer fees on sales of large properties, would help as we adapt to an environment with fewer federal resources. Next Steps We will continue to work with housing developers to advance City-funded affordable and inclusionary housing production, and will continue to explore the viability of the remaining strategies which could most helpful with these production efforts. While we will continue to work to create new housing, we will also retain a priority focus on housing preservation needs to ensure the continued affordability and viability of the City's existing affordable stock. The preservation of the 504- unit Fresh Pond Apartments remains a priority goal. We will also continue to work with housing providers to protect and revitalize existing affordable housing. Conclusion The steps which have been taken in the last three years, including significant improvements to the Inclusionary Housing and Incentive Zoning provisions, a substantial increase in capital funding for affordable housing, and a commitment among our partners to aggressively pursue new development opportunities has helped us make considerable progress toward this affordable housing production goal. While it is still too early to determine whether we will meet the goal, there is no question that the concerted efforts of the City Council, City administration, residents, housing advocates, community groups, the Cambridge Housing Authority, affordable housing providers, private housing developers, other public funders, lenders, and investors have allowed for significant progress to-date and have positioned the City for success in pursuing this ambitious affordable housing production goal. 6

Attachment D COMMUNITY DEVELOPMENT DEPARTMENT May 14, 2018 CDD is developing regulations to apply to inclusionary housing pursuant to changes to the City's Inclusionary Housing provisions. Regulations will address program standards and procedures including those related to tenant and buyer selection preferences for inclusionary housing units. To assist with drafting regulations, CDD had prepared the questions below last year in order to frame considerations of possible changes so that regulations proposed would best advance the policy goals of the City Council related to selection preferences. In the last term the Housing Committee requested that the Affordable Housing Trust discuss these questions and make recommendations for updates to the resident selection preference policies. The Trust is close to completing its discussion of these questions, and will soon share their recommendations on what changes would be advisable in inclusionary housing regulations issued by the City. Once ready, proposed regulations will be promulgated by the City Manager and will be shared with the City Council, Affordable Housing Trust, housing partners and advocates. CDD will schedule public meeting(s) to hear comments, and will accept comments on proposed regulations for at least 30 days. Comments on proposed regulations will be considered as regulations are finalized. At the end of the public comment period, the final regulations will be promulgated by the City Manager. Note that all proposed changes to preference criteria will need to be reviewed to ensure compliance with fair housing laws and other applicable requirements. Resident Selection Preferences 1. Preference for Cambridge Residents CURRENT • preference is given to applicants who can document residency in Cambridge (by providing 2 of the following: current lease, utility bill, car registration, school registration); • secondary preference for applicants who work in Cambridge (i.e. applicants considered if all resident applicants have been considered) QUESTIONS • Should residency preference be expanded? i. Former residents (note: it can be very difficult to document and confirm former residency) 1. Applicants with CHA vouchers who live outside of Cambridge 2. Other former residents ii. Cambridge-based workers ili. City/School employees iv. Veterans • How best to address residents who cannot provide documentation to confirm residency? i. E.g. those who are doubled-up, living with family, homeless? • Should residency status be preserved once it has been determined? i. At the time of application? ii. Should households being involuntarily displaced be able to have residency certified for future applications? If so, for how long? ili. Should others who are moving out of community by choice? • Should residency preference apply to all units, or, if possible, might it be applied to less than all units to create a pathway for former residents to return to the city?

i. e.g. 70% of units have preference for residents, 30% have no residency preference 2. Preference for families with children CURRENT • Preference is given to applicants with children under 18. • Additional preference is given to applicants with children under 6. QUESTIONS • Should age preferences for families with children change? i. Should there continue to be additional preference for families with young If so, is the age of 6 appropriate to advantage families with younger children? 3. Preference for applicants facing emergency housing needs (rental housing only) CURRENT • Preference is given to applicants who are: i. facing a no-fault eviction; or ii. living in a property cited by the City for outstanding code violations; or ili. paying more than 50% of their income for rent; or iv. living in an overcrowded situations (more than two people per bedroom); or v. homeless. QUESTIONS • Are there other applicants who should be considered for emergency status? i. Eviction and/or displacement risk - and at what stage? ii. domestic violence ili. transitional housing programs iv. medical need (i.e. for elevator building) v. over-housed applicants (i.e. to free up larger units) • Are there current emergency criteria that should be changed or eliminated? i. code violations vs. life safety threats • Should all emergency needs be treated equally? • What documentation should be required to prove homelessness? i. Currently a letter from a shelter is requested; this is difficult for homeless families who do not qualify for family shelter. ii. It can be hard to determine last resident of homeless applicants (i.e. for residency preference) Preference Layering CURRENT • Residency preference is the most significant preference, meaning that preference is weighted more than preference for families with children and emergency need (4 Preference for families with children under 6 is next most heavily weighted (2 points), followed by families with children under 18 (1 point); • Emergency need (1 point) is not a prevailing preference for 2- and 3-bedroom units - emergency preference applicants are served when they have other preferences (residency, families with children) given current demand. QUESTIONS • Should there be changes in how the current preferences interact? i. Should emergency need be a more significant preference? Should all applicants with emergency needs be considered before other applicants? • Ahead of families with children Ahead of residents?