Cambridge, Mass’ Adopts Citywide Affordable Housing Overlay—A National Model

This past October, the Cambridge City Council adopted a 100 percent affordable housing overlay (AHO) zone encompassing the entire 6. square mile city – the home of Harvard and MIT and a growing center of high-tech innovation.  What led the City Council to consider an AHO?

Alanna Mallon: As you might know, Cambridge and the Greater Boston area is number three in having the highest rents and housing costs in the entire country—it's only topped by San Francisco and New York City. For Cambridge, an average three bedroom is $2,900, although I would challenge you to find one for less than $3,200 a month. At the same time Cambridge—although it seems very wealthy, with Harvard and MIT, we've got the most innovative square miles in the world—13 percent of our residents are living below the federal poverty line. Forty-two percent of our residents are rent burdened, so their rent is over 30 percent of their annual income, and 20 percent are severely rent burdened, which means that over 50 percent of their annual income is spent on housing. 

The other thing is, when you look at the distribution of where affordable housing is, it's not equitably split across the city. Fifty percent of the affordable housing in the city is in four different neighborhoods, and less than 5 percent of the affordable housing is in four of the more wealthy neighborhoods. For us, when we looked at this affordable housing overlay idea, it was about more equitably  distributing affordable housing across the city, by doing a city wide overlay. In 2017, we had implemented our inclusionary zoning ordinance which meant that 20 percent of the square footage of all residential buildings over 10 units would be for affordable housing. It created a number of units for us which was wonderful, but it just was not creating enough. It was one tool in the toolbox and this seemed to be a really innovative approach to figuring out how to increase those affordable units across the city.

Share the city politics involved in winning council approval for a city-wide overlay zone?

It was a really challenging conversation, as much as housing conversations are. It's a very polarizing topic when you talk about creating housing stock. We have nine members on our city council, and I will let you know that it did not pass in my first term. Here in Massachusetts, you need a supermajority of any board, council, or town meeting to affect a zoning change, which means that we needed six votes out of our nine, and we only had five. 

So, we tabled it in my first term, and people ran on whether or not they were going to vote for the affordable housing overlay; it was that charged in the community. I went door to door campaigning, and literally every single person wanted to know whether or not I was voting for the affordable housing overlay or not. People really wanted me to explain it to them, because there was so much information out in the community, and it was so political that people just didn't know what to believe. It was a really challenging conversation and I think there was a lot of intersection around how zoning has historically been a tool to keep people out, and that this zoning was designed to be inclusive.

Elaborate on how an AHO actually works to incent an increase in the construction of permanently affordable housing in a City as dense as Cambridge. 

The mechanics are really simple. If you're in a residential neighborhood and the base zoning is 35 feet, you got an additional 10 feet and your FAR goes from either 0.5 or 1.0 to a max of 2.0. You need to create and maintain 30 percent open space and there are minimal setbacks, but they're written into the zoning. Then, along our commercial corridors and our business districts, you can go up to either 60 or 70 feet. 

That's the height and the density aspect of it, but the provision of the AHO that was really important was the streamlined process through the City’ special permit process. It's a design review not a discretionary review, which means it couldn't be legally challenged, and that was really important for our affordable housing builders who did not access land, because they were afraid of the legal challenge, the land carrying cost, and what that would do to their financing. This was a really integral part of this process and making sure that the AHO didn't just give the density bump for affordability, but also streamlined that permitting process, and made sure that there would not be legal challenges to affordable housing projects.

All of the developers need to conform with other existing zoning regulations, so the environmental impact implications still stand. In fact, we were going through a tree removal moratorium for a year and there was a time where we were going to exempt affordable housing projects. After it went through the whole process, we decided affordable housing builders actually cannot remove trees without paying into a fund. They do have to comply with all the other zoning that we have in the city.

Los Angeles is often characterized as a car centric city. As a result, many housing advocates have pressed to remove all required parking spaces, especially for ADUs and other affordable housing developers. Are parking requirements also a issue in Cambridge?

We do have parking requirements and parking minimums for new construction, although we've removed them for the affordable housing overlay; there are no parking minimums.

How does the elimination of parking requirements work when a snowstorm requires the plowing of Cambridge’s narrow streets?

Well, a lot of people don't have cars anymore. The city also provides garage parking for snow storms, but I will tell you that we have a large, affordable housing building that is being built right now with the zero parking near Kendall Square in Cambridge, right on Mass Ave. It was controversial, but at the end of the day, there's enough on-street neighborhood parking for folks who will need it. The cost was so significant to our affordable housing builders to build  that underground parking—it's $150,000 a parking spot and they weren't being utilized. They were creating this underground parking with a less than 40 percent utilization rate. 

Every single dollar counts when you're putting together an affordable housing financing package, and that's why it was so critical that we removed the discretionary review to ensure that they wouldn't be legally challenged and incur carrying costs and legal fees.

The city of Los Angeles, where The Planning Report is published, has a transit-oriented communities program that provides for density bonuses and incentives for affordable housing built near public transit; but neither the city nor other California cities have gone so far as to adopt permanent 100 percent affordability overlay zones. What provisions of the AHO rendered it palatable to a majority of your City Council?

I think it comes down to this conversation that we're all having about how adding more housing is going to drop the prices; that is one of the tools. But, even when we are adding a building with 100 units, and we have 20 affordable units, we still have 80 market rate units. The idea and the attraction for a lot of people was that we can now create a whole lot of affordable housing that's affordable in perpetuity and specifically targeted at residents who are making less than 100 percent of AMI—the majority of which are making less than 80 percent AMI. 

When you are sitting as an elected official, the phone calls that you get from residents who are being displaced—whose buildings were sold out from underneath them by an LLC—it's actually heartbreaking, because you have nowhere to put them. There is no available affordable housing for these folks, and these are folks that have lived in Cambridge their whole lives. Their children go to school here, and their entire support system is here. We're losing those people each and every day. Those families that are so critical to our community; they are our school nurses, firefighters, restaurant workers that we're losing each and every day because housing has become so unaffordable and we're just not building enough affordable housing.

It became imperative to really think about how we can help our affordable housing builders who are not accessing property right now because they are being beat out by LLCs who can go in with cash deals. We were seeing the numbers that our affordable housing builders just were not accessing land, and then the units weren't following along. Our affordable housing builders came to the table and talked about every single real estate deal that had fallen through over the past four years and those numbers are really striking for me especially, for somebody who has always a roster of 10 to 15 families on my list that I'm looking for housing for. To just sit there and listen to our affordable housing builders say they lost out on this place and that under the overlay it could have been 80 units, but under base zoning it could have been 20 units. 

Just hearing that those units had been lost was heartbreaking and for a lot of us who received those phone calls, it was a moral imperative for us to try to figure out how we can make sure that our affordable housing builders were accessing those land parcels to build those units.

You made a nod to the fact that sometimes increasing supply will reduce cost.  In the City of Cambridge today, where you have Pfizer, Moderna, and a growing array of tech companies in your 6.5-square-mile city, would adding 100 units under normal circumstances ever materially relieve the demand pressure for affordable housing?

I mean that's 100 families that are going to be having a roof over their heads. 

The community that sits right next to Kendall Square, East Cambridge, was the most affordable in the city. What is happening is, if we aren't creating market rate housing units, then the older, naturally occurring, affordable housing goes away, because there's huge competition for it. I am a proponent of building more housing units to satisfy some of the supply because we have not had enough housing units across the region to keep up with the population. 

For me, it's really heartbreaking to watch longtime East Cambridge residents who are living in Ms. Johnson's six-unit apartment building who died, all of the sudden get a notice on their door that they have to leave. They were paying $1,200 a month, and they're never going to find that in Cambridge; it's a real problem when it happens, and it happens all the time.

The Planning Report recently published an interview with the author of Sick City, UBC Professor Patrick Condon, in which he observed that adding density in Vancouver hasn't made housing more affordable, it's only served to inflate land values and exacerbate housing costs. He specifically points to your city, Cambridge, and the affordable housing overlay as a better model for disciplining land markets and correcting astronomical land values. Has Cambridge’s overlay zone, in the six months since adoption, impacted land values, and the building of affordable housing development?

I think it's a little early to tell as we are in the middle of a global pandemic. I will tell you anecdotally that we are hearing from our affordable housing builders that landowners who are selling are saying the affordable housing builders can afford to pay more because they are going to be able to build more because of this affordable housing overlay. It will be interesting to see how that works out over time. 

We are starting to see some projects come online from some of our affordable housing builders that are building within the affordable housing overlay. One of the projects is in a relatively new neighborhood that was going to be a self-storage unit, but we turned it down. Now, it's going to be over 80 units of affordable housing where prior to affordable housing overlay, it would have been half that. 

Interestingly, affordable housing builders here who already own property are now using the overlay to look at surface lots that are on their properties to actually redevelop into affordable housing units. It is still difficult to access land, and we have heard anecdotally that land prices are expected to be a little bit higher for affordable housing builders knowing that the zoning exists, but we built into the zoning an 18-month review period. Every 18 months after we adopted the zoning, there will be a review period and then a five-year full review looking back at what worked and what didn't. 

When we passed the zoning, we knew it wouldn't be perfect, but we needed to start. These review processes are going to be the ways that we can actually make those tweaks to make sure that it is doing the thing that we want it to do, which is making more land available for our affordable housing builders and building more units for them.

Comment on Professor Condon’s thesis about land value and how, by granting upzoning by an act of government, you're creating wealth for the landowner and if you don't capture the public benefit—there's no ripple for affordable housing. Would that be a fair reading of his thesis?

One of the things that Professor Condon and I talk about all the time is that here in Cambridge, we have a financial impact survey now of any potential upzoning, which looks at the benefit capture that they're getting on their side versus what they are providing to the city—additional taxes, affordable housing, and other community benefits—so that we can make a really informed decision about whether or not we should be providing the upzoning or not.

The city of Berkeley, like Cambridge, which has seen significant increases in land and housing prices, this past month directed their city manager and planning department to draft an affordable housing overlay (AHIO) modeled after Cambridge's. What lessons (positive and cautionary) should City’s like Berkeley take from Cambridge?

In terms of the process, my cautionary tale is to get out there early with as much information as they can about what it will do, what it won't do, what it can do, and what it can't do. What we ended up dealing with here in Cambridge was a huge disinformation campaign; I just felt like we're always playing defense. The best offense that they can play is providing enough information—the right information— to residents, so that they have it and it's simple. 

Keep it simple, get the information out early, and really talk to residents about why this is important and who it's going to be serving. I think that was the biggest hurdle for us. I wrote Op-Eds and Medium pieces, I put together infographics, and I did social media. It was a lot to try to combat against some of the information that was out there.

Th Planning Report has been a platform for a number of  the binary debates in California between YIMBY (or WIMBY), versus NIMBY interests. YIMBY’s have argued that blanket upzoning statewide is a necessary and bold policy and that local control is a racist impediment to more supply, with very little about the nuances of housing markets, the character of neighborhoods, the challenges of the pandemic and public health’s relationship to livabiity. Have those arguments been part of the threads that came up in Cambridge housing debates?

The character of the neighborhood and YIMBY versus NIMBY binary conversations definitely came up. I wrote a whole piece on affordable housing and the environment, and it's not a binary conversation. There isn't a lot of nuance when you talk about housing, there isn't. Professor Condon and I talk about how there should be more nuance in the conversation, but you're automatically listed as a this or a that. I can't speak for California, but in Massachusetts our suburbs are not creating the amount of housing that they need to to alleviate the pressure off the greater Boston area in places like Cambridge. We are creating a lot of housing; Newton is not creating a lot of housing; Brookline is not creating a lot of housing; Wellesley is not creating a lot of housing. 

One of the reasons they aren't is because of the super majority that is needed to pass zoning reform. And, this month, our governor is now signing a bill removing the super majority on zoning. That's something that he's wanted to do, and he's been attacked for that for being very pro-development, but at the end of the day we need to be creating more housing that's transit focused and can alleviate some of the pressure off of Boston, Somerville, and Cambridge. It's necessary, and it's taking a state-level intervention because none of these folks are passing any of their affordable housing projects. I can send you the latest one that's in Swampscott, where the governor of Massachusetts lives, and you would be pretty surprised at some of the things that people are saying.

Lastly, do you as a city councilmember have the opportunity to tap the talent at MIT and Harvard on matters of  homelessness, affordability, and sustainability? 

I just went to an MIT charrette, where their design school took on our public schools as post-COVID, what are we going do with our public schools to update for all of the things that COVID has brought about. We have nine elementary schools that probably could use $50 million worth of capital investment right and we can't do all of them, but the ventilation needs to be done.

MIT actually took this on as a project and I went to the final charrette to see it. We have these great resources at MIT and Harvard and they tend to like look elsewhere. I don't know if because they're situated here in Cambridge or if other communities look more interesting. We do have a great relationship with Harvard and MIT, but I think on the design side, it's not as cozy as you might think.