Jehlen: Somerville adding 1,775 homes hasn’t kept rents from rising at three times inflation
Assembly Row construction in 2015, seen from East Somerville. (Photo: Todd Van Hoosear via Flickr)
Somerville has submitted a home rule petition to allow the city to regulate rents in buildings of three or more units not occupied by the owner. This essay is the first of two based on my testimony in favor of the bill to the state Legislature.
Right now, in Somerville and other communities, families are being displaced and neighborhoods disrupted by large rent increases coupled with stagnant and inadequate pay for many essential workers.
We often see exorbitant rent increases of $500 to $1,000 a month. These usually follow a property being sold for cash to a large multistate corporation, and are equivalent to an informal eviction. A recent report by the Metropolitan Area Planning Council, “Homes for Profit, Speculation and Investment in Greater Boston,” shows how prevalent this is. (A summary of that report is here.) The council found that potential homebuyers are frequently outbid by investors, who can pay cash with no conditions. These investors then raise rents dramatically, up to 100 percent, effectively evicting long-term tenants. Or, unless there is a lease in place, they simply evict them without cause. Data shows that since August 2022, eviction rates in Massachusetts have been higher than pre-pandemic, with nonpayment evictions up 58 percent.
The problem is worst in East Somerville, as in similar neighborhoods with high-density, lower prices and high shares of renters and immigrants. In East Somerville, more than half the triple-deckers and almost two-thirds of two-families were sold to investors.
Triple-deckers were traditionally a path to homeownership for working-class families. Now they – and single- and two-family homes – are each transformed into three luxury condos for well more than $1 million each, which would require an annual income of more than $225,000.
These homes are permanently changed into homes far beyond the means of middle-class families.
Last time I asked, there were 67 unhoused children in Somerville Public Schools; 20 in shelters and the rest doubled up, often one family per bedroom. The main cause of homelessness was rent increases. Many other families have left Somerville, often losing school connections and the ability to get to work.
Not all communities need rent stabilization
People in Massachusetts have less local control over decisions that affect their lives than in most states. They have to ask the Legislature for permission to change their taxes, their form of government, the number of liquor licenses and much more, including the ability to regulate rent increases.
Yet communities’ needs are very different. Not every community needs or wants rent stabilization, but we should give those that need it the opportunity for local decision-making.
When rent control authorization was repealed by a 1994 ballot question with 51 percent in favor, the communities that had it all voted to keep it – they were outvoted by residents of other communities.
Building more housing: Necessary, not sufficient
Building new units, especially affordable ones, is crucial, but it will be many years before increased housing production actually reduces rent burdens enough to make it possible for workers to live here. So far, while we are doing everything possible to increase new housing units – affordable and market rate – increased production has not lowered rents or stopped unaffordable increases.
Somerville, the most densely populated city in New England, has 20 percent inclusionary zoning, no single-family zoning and accessory dwelling units as of right. You can see Somerville’s increases in density at Assembly Row, with more than 1,400 new condos and apartments in several buildings of 20 or more stories. Union Square has two new buildings of 25 and six stories that will have 450 units, 87 of them affordable. Another 450 apartments in 24-story buildings are going up in Boynton Yards. The Clarendon Hill development will add 375 units as well as rebuilding a public housing project.
Despite that, in the past five years, average rent increased by 34 percent to 58 percent, or up to three times inflation. And from 2021 to 2022, the median sale price went up 44 percent.
Rent stabilization: Insufficient, but necessary
It will take a long time and a lot of money to build the 200,000 units we believe Massachusetts needs. Gov. Maura Healey’s proposed Affordable Homes Act will cost $4 billion and expects to produce 40,000 homes over the next five years.
In the meantime, as prices rise far faster than incomes, families lose homes, children lose familiar schools, workers lose jobs when they have to move and neighborhoods lose the social capital of connections.
Rent stabilization and other tools to slow the expansion of the speculative market are not a total cure for the housing crisis, but we need them now to stop the damage to many people and communities like ours.
Pat Jehlen is state Senator for the Second Middlesex District, which includes Somerville and Medford and parts of Cambridge and Winchester.
“ So far, while we are doing everything possible to increase new housing units, – affordable and market rate – increased production has not lowered rents or stopped unaffordable increases.”
There isn’t even an ounce of truth to this. We have done nothing significant to encourage increased housing production. 1775 new homes is a pathetic number that nobody should be proud of. Somerville and surrounding towns have housing production rates that are anywhere from 1/4 to 1/10 of leading cities. Look to a city like Austin who has seen far greater population growth and where rents have decreased over the past few years. Not just new construction/luxury rents are dropping, but older housing stock’s pricing has dropped 9% over the last year as well.
If we want to see prices drop we need to allow by right development of small/mid sized multi family buildings, eliminate parking minimums, reduce/eliminate minimum lot sizes, and much more.
Of course, in my opinion, we should also implement rent stabilization as well as build social housing. But neither of those will have a meaningful impact without abundant housing.
Ps: all of this also applies to retail construction which faces many of the same issues resulting in absurdly high commercial rents that make it difficult for local businesses to operate here.
Senator Jehlen is correct that neither more production nor rent regulation is enough, and I agree with that heartily.
However, I’m curious where Senator Jehlen plucked the 1,775 homes number from; Somerville’s own data states that developers built 2,191 homes between 2011–2020:
https://www.somervision2040.com/progress/
So let’s go with that larger number. Averaged out, that turns into 243 new homes per year between 2011 & 2020.
In a city of nearly 80,000 people, that’s simply not very many new homes being added every year.
In the same timeframe, Somerville has added 7,497 additional jobs, with an average of 833 per year.
Those new jobs are, in general, higher-paying, which means if the 7,497 new hires decide to live in Somerville (very likely, people enjoy short commutes), they’re going to displace thousands of people, since we’ve not built enough new homes for them.
Which is, of course, what’s happened, and what’s been happening.
I take specific issue with the Senator stating “…we are doing everything possible to increase new housing units…”.
We are not.
Somerville still restricts ~80% of its usable parcels to only allow up to 3 homes, and up until this past October 2023, we only allowed 2 homes by-right on each of those parcels.
Meanwhile, an overlapping ~80% of our land (think a mostly-overlapping Venn diagram) is within a ½ mile of transit, making them great locations for far more homes & retail than they currently allow.
If we _truly_ were doing “everything possible to increase new housing units” we’d have already increased what’s allowed on these parcels & would likely have seen far more homes built over the last 5 years, which is how long it’s been since we rewrote our entire zoning ordinance.
This also means that, since our Affordable Housing is created as part of any large-enough new building, we only get 20% of however much we allow. If we mostly don’t allow larger buildings, we don’t get much Affordable Housing.
Said another way: 20% of 0 is 0.
So the path to not only satisfy most folks’ needs, but also lower-income folks’ needs, is to allow _way_ more homes across the majority of the City of Somerville.
I’d appreciate seeing Senator Jehlen being clear-eyed about how little we’re actually doing in terms of allowing & fostering the building of much-needed new homes.
Some form of rent stabilization, with an exemption for new construction, makes sense for all of Massachusetts, not just Somerville. Rents are skyrocketing in Springfield and Worcester, as well as on the Cape, not just in Greater Boston.
That said, this supply skepticism is disappointing for a public official who should be working around the clock to increase supply to solve our housing crisis, not using her platform to spread doubt about the fact that building more homes is by far the single most important thing we can do to help ameliorate rent increases.
The Urban Institute recently published this report succinctly rebutting supply skepticism.
“Home prices and rents have gone up substantially over the past few years. Several factors have been blamed for these increases, but none of them fundamentally alters the supply-demand balance. Lower mortgage costs may entice the marginal renter to become a homeowner, but it does not change the supply-demand balance. The rise of the institutional single-family rental operator does not change the supply-demand balance. Developers who build high-end housing are not driving up home prices; they are creating additional units, which allows for filtering. The only solution to the supply shortage is more supply. The US needs a coherent federal policy to produce this. Although the lack of political will at the local level has contributed to driving up costs, these local policies can be countered by more aggressive federal policies.”
https://www.urban.org/research/publication/place-blame-where-it-belongs
Massachusetts probably needs closer to 300,000 more homes at this point, as the calculations are a few years old and the drivers of that calculation have gotten worse since then.
To generate tax revenue, Somerville made the decision to add significant amounts of new commercial/lab buildings at Assembly and Boynton—attracting many more well-paid workers. Yet Somerville built fewer new homes per capita than Cambridge or Boston. This dynamic is what results in displacement of existing residents and can lead to increased homelessness. If Somerville wants to stop displacement, it needs to legalize more height in much more of the City.
Finally, the MAPC study is seriously flawed. It counts all triple deckers purchased by an LLC as purchased by investors, but it is unusual for anyone with the money to buy a triple decker not to form an LLC to buy it and causes the analysis to confuse exactly the type of small owner-occupants we’ve always had with giant corporations. Given that level of inaccuracy, no valid conclusions can be drawn from that report.
Here’s another way to put Somerville’s housing construction in context. In 2010 there were 33,720 housing units in Somerville according to the 2010 Census:
https://www2.census.gov/library/publications/decennial/2010/cph-2/cph-2-23.pdf
And then according to the city of Somerville, 2,191 homes were built in the ten years from 2011 until the end of the year 2020:
https://www.somervision2040.com/progress/
So if we take the 2010 number of housing units (33,720) and add the number built between 2010 and 2020 (2,191) we get 35,911. Using those numbers, that means that the housing stock grew roughly 6.5% in Somerville between 2010 and 2020. Or alternatively, the 2020 Census found that Somerville had 36,269 housing units, which would mean that the housing stock in Somerville grew by about 7.5% over those ten years. During that same time, in the US according to the Census, the number of households grew by 9% nationwide:
https://www.pewresearch.org/short-reads/2021/10/12/u-s-household-growth-over-last-decade-was-the-lowest-ever-recorded/#:~:text=The%202020%20census%20counted%20126.8,counted%20in%20the%202010%20census.
So Somerville is not building homes at a rate that keeps up with national household growth. And that’s before you consider that Somerville should be building housing at a rate that is significantly faster than national household growth, because this area is thriving economically! There’s tons of job growth and economic opportunity here as Jeff aluded to. Both Somerville (see the earlier somervision link) and the greater Boston region are creating three jobs for every new home:
https://apps.bostonglobe.com/2023/10/special-projects/spotlight-boston-housing/milton-restrictive-zoning/
That’s a terrible ratio from a housing affordability standpoint. So once you put the number of new homes in context it’s clear that Somerville (and the entire region) is not building nearly enough housing.
And not an ounce of digital ink spent discussing what fuels the real, yet fabricated, housing crisis:
public transportation deficiency.
The systematic diversion of funding towards private modes of transport at the expense of a network of safe, reliable, fast and accessible ways for people to get to and from their work to their homes requires more and more people to need to demand a supply of homes in concentrated areas. And you will never build “homes” fast enough, no matter how YMBY we could all become.
I am YMBY for better public transport, the rest is crumbs off developers’ banquets
How many bus and subway fares could be paid by the $50MIL for bike speed lanes?
Following for comments on how similar the Somerville and Cambridge housing crises really are and how simple solutions are still needed for both.
“Somerville adding 1,775 homes hasn’t kept rents from rising at three times inflation”
This statement is like saying we threw a brick in the Grand Canyon and its still a big hole. Somerville’s zoning, despite the grand effort to rezone, was a big belly flop. Going to 20% inclusionary was also a mistake, one the state will no longer allow, not sure how Somerville justified it in December but their submission to the State was probably as padded as Cambridge’s. Obtuse regulations got these Cities into this mess, layering on more will not help anyone but politicians; but maybe that’s the point of it all.