There is no denying it. We are in a housing crisis. Cambridge was once a city of opportunity where families could set down roots, save money, and maybe one day buy a home. It was a city of cultural and economic diversity. In recent years increased housing demand and a regional lack of supply have caused rents and home prices to soar. Yet for many, wages have remained flat, making it difficult to live in Cambridge with any sense of financial security. Cambridge is at a crossroads.
I am running for city council for many reasons-- my love for Cambridge, my connection to its diverse population of residents, the pride I feel in being a product of our community. I stand out from this year’s field of candidates, however, because of my significant and relevant experience in housing and tax policy. I have a professional background that no other person in this race can claim and I feel it is my responsibility to stand up for our community and lead.
As the former Deputy Legal Counsel for the Massachusetts Joint Committee on Revenue, I worked on policies to advance tax fairness and make investments in infrastructure and education. As the current Research Director & Legal Counsel for the Joint Committee on Housing, I work every day to produce housing policies that promote affordable and middle-income housing, as well as “smart growth”--the creation of sustainable, mixed-use communities to live, work and play. I also work with nonprofits to protect tenants from eviction and preserve affordable housing. Every week our office also hears from people across the state experiencing homelessness, and we do our best to connect them to services.
There is significant data supporting that Massachusetts is in a housing crisis. To meet demand, Greater Boston must produce nearly a half million units by 2040. Cambridge has contributed to this effort, but I believe we can do more. We’ve followed the lead of Somerville and Boston by increasing our affordable housing inclusionary requirement, increasing linkage requirements (fees paid by commercial developers to the City for affordable housing), dedicating Community Preservation Act funds to affordable housing, and rehabbing the entire public housing portfolio. But if we want to realize the fruits of inclusionary zoning and be a leader on affordable housing, we must not oppose the density and height that is required to make it work.
Below, I have submitted some ideas for you to consider. Some ideas are big and require regional buy-in, others are small and would provide only modest relief. But as a young person who rents, pays student loans and works in public service, any relief, however modest, can go a long way. The same goes for our single-parents and young families who are also barely able to afford to stay in Cambridge. Confronting our housing challenges requires transformative policy shifts as well as incremental change.
I do not claim to have all the answers. None of us can. But I do claim a responsibility to Cambridge. The pessimists will say we can’t fix the housing crisis. But I cannot stand by and watch our community fade. Here are some practical ideas that we can promote, advocate for, and implement. Please read my plan and contact me with feedback.
Let’s use Chapter 40R, the State’s Smart Growth Zoning and Housing Production Statute, to develop sustainable, multi-use neighborhoods at Alewife and Vail Court
Over the years the city has studied, rezoned, and set goals for Alewife and the 130 acre quadrangle along Concord Ave. The 2005 Concord-Alewife study identified a vision for the site as a transit-oriented, walkable neighborhood for people to live, work, play, and shop.
We could do the same on a smaller scale at Vail Court. Vail Court is the dilapidated 0.65-acre property just outside of Central Sq. on Bishop Allen Drive. The city recently took the site by eminent domain and The Affordable Housing Trust has begun community meetings to plan for how the property should be redeveloped.
Chapter 40R is a zoning tool used to create overlay districts that allow for greater density in locations that are well connected to transit and employment opportunities. Projects with more than 12 units must reserve at least 20% of the units as affordable for residents who earn 80% of the Area Median Income (AMI).
Boston recently celebrated a 40R groundbreaking at Olmstead Green. This new residential community will be a mix of rental, ownership, senior housing, and community facilities on 42.5 acres, 18 of which are developable.
40R is a desirable tool because it provides state money and insurance against increased school costs. 40R districts are entitled to three types of payments from the state’s Smart Growth Housing Trust Fund:
- A zoning incentive payment based on the estimated number of units zoned.
- A density bonus payment for each building permit issued.
- A state reimbursement for increased school costs attributed to the development.
Density at the Alewife Quadrangle comes with challenges. Accommodating growth in this area of Cambridge creates a new neighborhood, which will require municipal services and create additional traffic density that must be carefully managed. We must also plan for flood resilience and the impacts of climate change. The benefit of developing this site as a 40R is that it would give the city an advantage in accessing state Massworks funds to mitigate these challenges.
Let’s use the Massworks Infrastructure Fund to connect housing and transit
The Massworks fund supports construction, reconstruction and expansion of infrastructure for sewers, utilities, streets, roads, traffic signals, curb cuts, parking, pedestrians and bikes. 40R style developments have a Massworks funding priority so long as 25% of the development is affordable. We should take advantage of this opportunity for state support.
The 2016 Massworks funding round awarded Boston $3.4 million for infrastructure improvements around the Jackson Square MBTA station. These improvements included new pedestrian walkways and bike paths linked to the Orange Line station, a new public road, sewer line improvements, and a new 3,000 square foot community plaza. As a result, $62.6 million has been invested in the construction of two new mixed-income housing properties that will create 144 new housing units, including 72 affordable apartments, and 2,400 square feet of retail space.
As we plan for the development of the quadrangle, we should think critically about how we connect our housing to the MBTA, mitigate traffic congestion, and promote bike and pedestrian access to the rest of the city. Massworks could help unlock the potential of this site.
Let’s Use the Workforce Housing Tax Exemption to Encourage Middle-Income Housing Production
One of the challenges for affordability in Cambridge is reaching the middle-class, or, so-called “workforce housing.” This income band is typically priced for households that earn 100-120% Area Median Income (AMI). In Cambridge, that is roughly up to an annual income of $112,000 for a family of three.
The Massachusetts General Laws provide a menu of property tax exemptions that municipalities may adopt. One new exemption is a local option that allows municipalities to enter into an exemption agreement with a property owner who builds middle-income housing. The exemption would last for two years during construction. After construction, a municipality would be able to phase-out the exemption for up to three years (75%, 50%, 25%). Property owners would be required to certify their rental prices with the municipality annually. If an owner fails to certify, the municipality may place a lien on the property for the exempted amount established under the agreement.
Let’s Encourage Developers to make use of the MassHousing Workforce Housing Fund
The Massachusetts Housing Finance Agency (MassHousing) is the state’s affordable housing development bank. We should encourage developers to make use of the agency’s new $100 million middle income housing fund. This fund targets developments that build housing for households with incomes of 61%-120% of the Area Median Income (AMI). It should also be noted that at least 20% of the units in the development must be affordable to households earning at or below 80% AMI- the traditional standard for affordable housing.
Quincy recently celebrated MassHousing’s allocation of $37.2 million dollars towards a five-story development containing 140 apartments. Twenty percent of the apartments will be for people with very low incomes, 60% will be for people with moderate incomes, and the rest will be market-rate units.
As we develop Alewife, Vail Court, and even the Volpe site near Kendall, we should encourage developers to leverage this important state resource.
Let’s Advocate for a State Income Tax Credit for Below Market Rents of Unsubsidized Units
One challenge for the housing market in Greater Boston is that there isn’t enough “naturally occurring affordable” rental opportunities. You either qualify for subsidized housing or you can afford market rents, which are often set at luxury prices. This will continue to be a challenge until supply meets the regional demand. Until then, one idea could help incentivize landlords to offer below market rents that would mimic the “naturally occurring affordable” rent.
We should support the creation of a state income tax credit for individuals (not corporations) who rent their unsubsidized properties below market rate. This proposal would provide an income tax credit of $1,500 for each unit rented below market-rate. Market-rate would be determined by the “HOME rent limits” as determined by HUD. The credit would not be available for landlords who rent to family, and would be prorated by the number of months the unit is rented to a qualified tenant. This credit would not be refundable, but would be eligible to be carried over to subsequent years. To qualify, the property must be an unsubsidized 2-4 unit residential rental property.
Let’s Advocate for an Increase to the State Income Tax Deduction for Rent Paid and a Federal Tax Credit for Rent-Burdened Taxpayers
Nearly half of all Americans are financially burdened by the cost of housing. A household is considered cost-burdened if it pays more than 30% of income to housing. In 2015, the Joint Center for Housing Studies at Harvard University ranked the Boston/Cambridge region tenth for housing cost burden.
Here are two policies we should support to ease the burden:
- Our state tax deduction for rent paid hasn't increased since 2001. We should advocate to increase the deduction amount by adjusting for inflation, restrict eligibility to taxpayers who earn no more than 100% of the Area Median Income (AMI), and index the deduction to inflation for future growth.
- We should also support federal legislation that would create a tax credit for taxpayers who pay more than 30% of their income in rent.
Let’s work to preserve our affordable housing stock
Most of the state’s stock of affordable housing units was built in the 60s, 70s, and 80s. These properties are privately owned but were produced using state and/or federal housing resources. For instance, the 13A mortgage interest subsidy program required owners commit to maintaining the affordability of these properties for a defined period of time- 20 to 40 years. In exchange the owner paid 1% interest and the state subsidized the remaining amount. As owners pay off their mortgages, the low-income use restrictions on these projects now face elimination. I am committed to preserving these so-called “expiring use” units. I will work with property owners, preservation non-profits, residents, and community groups to stop displacement and find creative ways to finance the rehabilitation and modernization of our stock in Cambridge.
Let’s encourage the use of the Donation Tax Credit:
One recent development that I helped draft is the creation of the Donation Tax Credit for Affordable Housing. This tax credit can be awarded to owners of expiring use affordable housing who sell land to a non-profit at a below market price. The seller would use the state tax credit to offset their income tax bill for the year. Additionally, the seller would also leverage the federal deduction for charitable donations to lower their federal tax liability. This would allow for a preservation non-profit to compete with a market rate developer.
Let’s use City Funds for Preservation:
As one of the first municipalities to adopt the Community Preservation Act, we must continue to think strategically about how we can use these funds to support preservation of affordable housing. We also must continue to find innovative ways to use city funds to help finance preservation deals. One idea, for instance, is to advocate for tax parity between hotels and AirBnB and increasing the local option tax amount. Another idea is to draft a home rule petition for a luxury real estate transfer tax. (see below on both).
Let’s Support the Affordable Housing Bond Bill:
We must support the passage of a $1.4 billion housing bond bill in the state legislature that will allocate funds for preservation and rehabilitation of expiring use property and affordable housing production.
Let’s Advocate for Co-Op Enabling Legislation:
We should advocate for enabling legislation that would allow for the formation of housing co-ops. Essentially, this would provide a right of first refusal for tenants to purchase the property at fair market value before going to a third party developer. Moreover, tenants would be able to assign their rights to a nonprofit Community Development Corporation or preservation group. These groups could help with financing, securing tax credits, or stand in the shoes of the tenants to make use of the Donation Tax Credit. This could also be used as an important tool to fight against displacement of tenants from unsubsidized units.
Washington D.C. has a successful program, and we should explore the same in Massachusetts and Cambridge.
Let's create a luxury real estate Transfer tax
To reduce speculative real estate holdings we should consider a luxury real estate transfer tax. Somerville has a working group looking at this issue. A Nantucket home rule petition has gotten the attention of lawmakers and was reported out favorably from the Revenue Committee. The Nantucket bill could serve as a model.
The Nantucket bill would allow the municipality to impose a fee upon the transfer of any real property interest. The fee would be 0.5% of the sale price in excess of $2 million, paid to to town, and deposited into the Affordable Housing Trust. If the fee isn’t paid, the municipality may collect 14% interest plus penalties.
Let's support community scale housing for moderate density
As a general approach to housing, I believe in density and increasing supply. Density brings us diversity. Density allows for our inclusionary zoning to work. Density improves environmental sustainability, reduces sprawl and promotes walking, biking, and placemaking. Moreover, by accepting density we show the Greater Boston region that we are a leader in confronting our housing challenges, strengthening our leverage in encouraging density from our suburban neighbors.
I also understand that certain areas of the city may not be appropriate for density on a grand scale. A 500 unit or 250 unit building may not make sense in areas that are not as well serviced by the T, for example. But I still think we can do better.
Supporting programs like “Community-Scale Housing” could help accommodate density in these areas. This program would provide grants for developments of less than 20 units that do not make use of the Low-Income Housing Tax Credit. These developments are required to provide no less than 25% affordability at 80% AMI or no less than 50% affordability up to 110% AMI.
Let’s Measure Our Success
The Community Development Department should publish quarterly, semi-annual, or annual reports that look at the local housing market, population growth, and affordability. Reports on the success our inclusionary zoning requirement as well as a record of community benefits realized through developer negotiations should be outlined for policymakers and residents to measure our success and make adjustments.
Let’s consider increasing the room occupancy tax and advocate for its application to short term rentals
We should advocate for the state to tax short-term rentals like hotels and motels. In short, if it is run like a hotel or motel, it should be taxed as such.
Cambridge has the highest local option room occupancy excise allowed by law (6%), which is on top of the state excise (5.7%). Boston, however, is the only city that may establish a higher excise than other municipalities (6.5%).
The council should confer with the City Manager’s office to examine the revenue impact of a half percentage point increase, as well as any negative consequences from such an increase. Depending on the result of such study, the council should advocate for Cambridge to join Boston in taxing room occupancy at 6.5%.
Let’s demand a multifamily planning mandate in chapter 40A (the Zoning Act)
Cambridge should band together with our partners in the inner-core of Greater Boston to demand that more housing be built by our suburban neighbors. Nearly all housing in the past few years has been built in Cambridge, Boston, Somerville, Chelsea, and Everett.
We should advocate within the Massachusetts Municipal Association and the Democratic state party to back legislation that would require municipalities to plan and zone for at least one district where smart growth multifamily housing can proceed as-of-right. For too long, we’ve relied on Chapter 40B as the sole tool for suburban affordable housing development. Chapter 40B is a state statute, which enables local Zoning Boards of Appeals to approve affordable housing developments under flexible rules if at least 20-25% of the units have long-term affordability restrictions. Developers may utilize the 40B process if the municipality has less than 10% of its housing stock dedicated to affordable housing.
While 40B should be celebrated for its success in bringing affordability, diversity, and access to suburban schools, the circumstances of the housing crisis require our neighbors, particularly those positioned along transit lines, to plan for density, affordability, and smart growth. Our future depends on it.