Thursday, June 13, 2024

Construction on July 3 by Central Hill in Somerville. (Photo: Kate Wheatley)

A boom in construction in Somerville that’s coming to a bust has city councilors thinking about what’s next for affordable housing, including possibly matching a standard for putting up taller buildings that’s being considered in neighboring Cambridge.

There’s been a nationwide slowdown in construction caused by rising interest rates and inflation, and Somerville, like many communities in the Boston area, is also seeing receding demand in a yearslong call for life-sciences buildings to go up. Affordable housing is built into their funding formulas, including through “linkage” fees charged by the square foot.

“I’m worried that our market-rate and inclusionary-housing pipeline may be drying up. I’m worried that the gleaming new lab buildings opening up around our city won’t open with tenants,” said Tom Galligani, executive director of the Office of Strategic Planning and Community Development at the City Council meeting Thursday.

He noted that a laboratory construction project at 15 McGrath is now paused. It had been projected to generate $3 million to $4 million in tax revenue a year, and an additional $3 million in new housing linkage fees. He understands why the developers decided not to continue on schedule: It is unlikely they would be able to fully rent out the completed building. Another lab project at 350 Assembly Row has also been delayed, and two projects in Davis Square.

There are already buildings with stubbornly empty spaces, and increased availability in Cambridge’s Kendall Square means companies can choose to lease there, abandoning projects begun to add lab space when Kendall was impossible to crack. A post-pandemic shift to more working from home is a factor, because companies no longer need as much office space. Somerville also has higher taxes and permitting fees than some other municipalities.

Housing formulas and zoning

Galligani brought to the council an idea of encouraging residential construction by reducing an “inclusionary” housing requirement for affordable homes. The requirement is now for 20 percent of units in all new buildings with four or more dwelling units. The idea was one of around 20 generated by workshop participants that included developers, affordable-housing advocates and developers, city staff, elected officials and neighborhood advocates. The ideas were presented “in their raw form – without modification,” Galligani clarified later.

Councilor at large Willie Burnley Jr. said his constituents want the requirement to be higher, not lower.

A different kind of adjustment was asked about by councilor at large Jake Wilson: If changing the requirements from 20 percent of units to 20 percent of square footage would lead to more affordable two-, three- and four-bedroom units. “I’m generally not a fan of reducing affordable units, but I guess we do have a lack of affordable family units, and that is one approach I personally am willing to hear more about,” he said.

Councilor Matthew McLaughlin of Ward 1 said he doesn’t want to change the affordable-housing provisions, but does want to change zoning rules to allow taller buildings as of right, without needing special permissions – to six stories, matching a push in neighboring Cambridge. He pointed at Broadway as a good example of how this can work, as the street several new projects with a 20 percent inclusionary rate being built there.

Caring for vacant properties

Projects are stalled, he acknowledged, but pointed to the general decline in construction due to high interest rates as the issue, not the 20 percent inclusionary rate.

Whatever the cause, councilor J.T. Scott of Ward 2 was unhappy about the 15 McGrath project being paused, calling the site “a hole in the ground, and that is a problem.”

“I’m glad the city is starting to become concerned about holes in the ground. I think we all remember the infamous Teele Square pit. Far less known would be 10 Oak St., which has been literally a festering mosquito breeding septic pit as developer after developer screwed each other over and left the project, which was permitted to lay fallow,” Scott said.

Climate tech instead of biotech

The city did nothing anything to clean the site despite numerous resident complaints, and in general has not enforced a vacant-properties ordinance, Scott said, warning the city away from giving more tax breaks or special deals to developers that have had negative consequences in the past.

Council President Ben Ewen-Campen of Ward 3 asked if life-sciences space could be converted into climate-tech space, as developers are asking for zoning relief to build space for that, and the federal government is putting money into green-energy development.

Climate tech companies do not want to pay the going rental prices of life-sciences space, and also have different space needs, Galligani said.

This post was updated May 31, 2024, to show that inclusionary housing requirements kick in at four units in most zoning. It was updated June 4, 2024, to clarify that the idea of reducing the percentage of inclusionary housing was presented by Tom Galligani as a workshop participant}s idea, not proposed by him.