In a memo released Thursday by the Cambridge Community Development Department (CDD), city officials recommended adjusting Cambridge’s inclusionary zoning requirement, which mandates that new residential developments of a certain size set aside 20 percent of their gross floor area for affordable housing units. The recommendations include temporarily lowering that percentage, providing tax abatements or allowing developers to contribute to the Affordable Housing Trust instead of including affordable units. All are designed to help kick start development by offering investors in projects better returns.
The memo was accompanied by a lengthy report from Boston consulting firm RKG Associates that modeled the impact of different policy proposals. Both highlight the importance of creating more affordable housing in the city as market rate housing grows, too.
The Community Development Department memo:
The CDD did not specify by how much the inclusionary zoning rate should be reduced. The RKG report said some parts of the city would be more sensitive to policy changes than others. A shift in rates would be unlikely to increase investor interest for large projects in West Cambridge, for instance.
The RKG report:
The city doesn’t recommend, however, reducing the requirement for projects in the C-1 residential district, by far the city’s largest, where buildings with inclusionary units are capped at six stories. It also warns against too large of a reduction in the inclusionary zoning percentage. “Setting the IHO [Inclusionary Housing Ordinance] percentage too low could have an impact on the goals of maintaining socioeconomic diversity and sustaining inclusive housing growth over time.”
Residents and policymakers have noted that there are some projects with inclusionary zoning units “in the pipeline” of the permitting process across the city. A crowd-sourced redevelopment tracker maintained by City Councillor Cathie Zusy suggests that about 15 percent of new non-subsidized units in the planning stages will be inclusionary. These mostly are part of very large projects.
The RKG report estimated that about 17 percent of units in projects built under inclusionary zoning rules between 2014 and 2024 were affordable. Those units, combined with units in subsidized all-affordable developments, meant 25 percent of new housing stock during the decade was considered affordable.
However, going forward nearly 35 percent of all new housing units would need to be affordable, RKG’s report said, if the city is to maintain its current level of socioeconomic diversity. It also said that prospective projects in the current market could be delayed by challenges in financing residential development.
The CDD will present the following policy changes to the Oct. 5 city council meeting:
This is a developing story and will be updated.
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So the whole thing has been nothing more than a cash grab for developers, neat. I wonder how many contribute to the campaigns of members on the council.
Easing the set-aside is pragmatic, not a giveaway. A 20% requirement on a project that never gets financed yields zero affordable units and zero homes.
Meanwhile, research keeps finding that new market-rate buildings ease rent pressure nearby. For example, This study found that new buildings lower nearby rents by 5 to 7 percent compared with locations slightly farther away or developed later, mainly because the buildings absorb many high-income households. https://research.upjohn.org/up_workingpapers/316/
Cambridge has a shortage, and we need to build.
Greed is a powerful force. There will never be enough for developers to enrich themselves and maximally extract from residents. No doubt a large proportion of support for the council and the MFH ordinances assumed that promotion of affordable housing would be connected to the policies. If that goes away, this becomes what it was all along… developers using the affordable housing as a trojan horse, while buying the city council for their own profits under our noses.