The underlying driver of the lack of affordability in Massachusetts is the need for 200,000 new homes to house the state’s low- and moderate-income households. Cambridge and Massachusetts have pursued many approaches to address this shortage. These include passing the Affordable Housing Overlay to enable more construction of 100 percent affordable housing and loosening residential zoning regulations to produce more inclusionary units and limit market-rate rent growth. We desperately need more tools to produce housing affordable to those with the lowest incomes, though, and to do it on a large scale and quickly.
If there is going to be significant new construction of affordable housing, it will come through government funding. The new housing will not be old-style public housing, as state-owned public housing has up to $8.5 billion in deferred maintenance that needs to be done and new federal public housing is prohibited by the Faircloth Amendment. All-affordable housing is being built through the Low Income Housing Tax Credit, but this funding is largely maxed out in Cambridge and nearby communities. We need a new tool in our toolbox, which makes this the right time to consider social housing.
What is social housing?
Social housing is an approach to building nonmarket mixed-income housing. It was pioneered in Vienna in the 1920s. How does it work? It is government-controlled or government-owned rental housing that includes market-rate and moderate- and low-income units. In particular, social housing would include at least 40 percent affordable units, a significant portion of which would be for very-low income households. The three core financial elements of social housing’s success are: low-interest loans from a government revolving fund; reinvestment of a portion of the income from the market-rate apartments subsidizing lower-income units; reinvestment of income beyond operating costs repaying any loans from the government and for investment in the next project.
What’s more, social housing is managed by the tenants and the community, not a government agency. Tenant management means that residents have democratic control of the housing they live in, through tenant councils. Community management means that the board overseeing the social housing development is made up of the community served by the housing. An example is Seattle’s social housing ordinance, in which the 13-person board is mostly renters who have experienced housing insecurity.
Does social housing exist in the United States?
The deepening housing crisis across the United States has sparked real interest in social housing, including in Maryland, Seattle, Chicago, Rhode Island and even here in Massachusetts.
Maryland first adopted this approach in Montgomery County. Its Housing Production Fund has helped develop more than 1,144 mixed-income units within five years.
Seattle’s voters recently approved the establishment of a social housing developer. Further, they approved an ongoing funding mechanism for it, a compensation tax on companies paying more than $1 million in wages to any single employee.
Rhode Island just approved a ballot referendum that allocated up to $10 million toward a public mixed-income housing developer, similar to that of Seattle.
Chicago’s city council created an independent nonprofit with the goal of developing social housing and funded it with $135 million from Chicago’s most recent housing bond.
Massachusetts has established revolving loan funds that indirectly could support social housing. The Boston Acquisition Fund is a revolving source for low-interest loans for affordable housing development. Massachusetts seeded $50 million in its new Momentum Fund, a revolving loan fund to support the development of mixed-income housing. Finally, most directly, Massachusetts included the establishment of a social housing pilot as part of its $275 million sustainable and green initiatives line item in the most recent Housing Bond bill.
What do we want?
The Cambridge Housing Justice Coalition believes it is time to bring social housing to the forefront of the conversation in Cambridge and take concrete steps to make it a reality.
Our concrete asks:
- The City Council should pass a policy order committing itself to advancing social housing in Cambridge in the model of Chicago, Seattle, Maryland, Rhode Island and many other places throughout the United States.
- The city should create a revolving loan fund for social housing. We recommend an initial size of at least $50 million, supported by bonding capacity. This would correspond to an annual commitment of somewhere between $3 million and $5 million, assuming 10- to 15-year bonds. This could allow Cambridge to create a pilot project of at least 100 units, with the majority set aside for low- and moderate-income households. Additional funding could come from the existing state pilot social housing funding.
- The city should explore a dedicated funding mechanism, using Seattle and Vienna as models, to support the ongoing construction of social housing.
Cambridge should discuss social housing now as a way to increase the construction of affordable housing. We encourage interested people to work with us and look forward to raising this idea in council candidate forums.
Kavish Gandhi, Trudi Goodman, Stephanie Guirand, Richard Krushnic
The writers are members of the Cambridge Housing Justice Coalition.
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Hard pass on turning all of Cambridge into central square.
If Cambridge is so expensive to build, why don’t you build on land that costs a quarter of what it costs here and is just about 30-40 miles from here? If your system is so wonderful, you can turn that into the next Cambridge and we can all come knocking on your orgs door to give us a chance to live there.
We can’t solve the housing crisis by building 30–40 miles away. Housing must be built *where the jobs are*. Cambridge keeps adding jobs without adding homes. That’s the root of the crisis.
If you work here, do you want a two-hour commute? If you live here, do you want more traffic from people forced to drive in every day?
We need realistic, practical solutions to real-world problems.