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(The opinions and views expressed in the commentaries and letters to the Editor of The Somerville Times belong solely to the authors and do not reflect the views or opinions of The Somerville Times, its staff or publishers)
Somerville residents identify their greatest challenge as the struggle to pay escalating housing costs. Our city’s leaders describe this as a “housing crisis.” But since 2020, developers have built something like 3,000 new housing units.
These units remain beyond the means of people who live here. Indeed, planning staff acknowledges that, “Assembly Square has housing, but the units are largely rented by single occupants who only live in them during the workweek.” Add to that the units that are master-leased by sovereign governments for visiting students, businesspeople, diplomats, and healthcare tourists.
A moment’s reflection should suggest that any Somerville resident who can afford to pay $4,000-to-5,000 per month for a two-bedroom apartment is already living in one. So we are building homes for people who have never lived here, while driving up costs for people who do.
We do not have a “housing crisis.” We have an affordability crisis.
Last month city councilors heard that escalating housing costs are displacing Latinos, African Americans, and families. Between 2012 and 2022, the number of children living in Somerville declined by 18%. And “the for-sale home market is out of reach for households earning at or below 120% of the AMI in the city.” That is, $178,680.
The messenger was a consultant retained by the City to write its five-year housing needs assessment. Asked to make recommendations on the Inclusionary Zoning Ordinance (IZO), he reported that at present market-rate housing developers are not moving forward with projects, because investors are demanding even higher profit.
Somerville’s IZO requires that 20% of new housing units in a development of four or more be permanently affordable. The consultant recommended that the Council consider lowering this requirement to 10-to-15%.
Astonishingly, Strategic Planning and Community Development Director Tom Galligani encouraged councilors to consider incentivizing luxury-housing developers to build more of the same by giving them tax abatements.
The city’s comprehensive plan is supposed to guide land-use planning and zoning. It set a 2040 goal of 20% of Somerville housing stock being permanently affordable. When it was adopted five years ago, that figure was 9.7%. Today it is 8.9%.
Those who are creating and enforcing zoning policy here don’t seem to realize that 20% is a fraction. If we continually increase the 100% denominator, we will chase the 20% numerator until we have no more land to develop—all the faster when the 20% requirement applies to an ever-smaller fraction of new development.
These city officials appear to be influenced by a years-long campaign to persuade them—and residents—to misapply the neoclassical supply-and-demand principle to Somerville. But the market to which the principle rightly applies is the 5-million-person Metropolitan Statistical Area. Boston and Cambridge alone would have to build 750,000 units to house their workforce.
Moreover, the people who built our city and have since been priced out of it made it among the most desirable places to live in Greater Boston. Housing costs here are rising at a faster rate than in surrounding communities.
Boosting market-rate housing production here would not lower prices for generations, if then. But it would ensure that the city continually increases residential property taxes.
A corollary of Somerville’s densest-city-in-New-England status is that it has the least amount of remaining developable land. For sixty years we have solved other communities’ housing challenges by converting our commercial uses to residential ones and building more market-rate housing units.
This left us with a structural fiscal deficit. Housing pays 58% the tax rate that commercial properties pay and generates twice the municipal costs. But only 18.6% of Somerville’s property value is commercial, even though these properties pay 32.6% of the total tax levy.
So Somerville has never enjoyed the level of municipal services that surrounding cities do. And decades of deferred maintenance have brought every class of our infrastructure to the end of its useful life.
As debt service on must-do infrastructure investments increases, our unbalanced land-use pattern will put ever more pressure on residential taxes, and in turn, housing costs, cementing the city’s status as an affluent and increasingly childless and homogenous enclave.
In a related development, it now appears that McGrath Highway will become an at-grade boulevard. When it was built, it isolated the city’s poorest neighborhood. It reduced East Somerville neighbors’ quality of life, blighted their properties, undermined their safety, and damaged their neighborhood economy.
With the prospect of these burdens being lifted, displaced long-term residents are denied the benefits. While conversations about the highway’s redesigned green space and bike lanes are nice, focusing on how to deliver housing stability and home ownership to the dispossessed would appeal more to our sense of justice. Instead, we are enjoined to build more unaffordable housing.
Ultimately, there is virtually nothing that Somerville alone can do to counter the region’s formidable housing-market forces. Instead, we could work to fulfill SomerVision’s housing goal by permanently removing a portion of our housing stock from the inflationary spiral.
Paying for this—and to meet our city’s needs—would require zoning developable land that can reasonably host commercial development for that specified purpose, even though this moment in the economic cycle is producing little-to-no new commercial development. Waiting for renewed demand would require the foresight, courage, and discipline that our city’s leaders proved incapable of over the last 150 years but would better serve their constituents.
Or, we could keep building luxury housing for affluent people who don’t live here, and expect a different outcome.
Ben Baldwin, Executive Director
Somerville Community Land Trust
David Gibbs, Executive Director
Community Action Agency of Somerville
Gonzalo Puigbo, CEO
Somerville Community Corporation
Note: The views expressed are those of the authors and do not necessarily represent the positions of their respective employers.
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Bravo!
The claim that “Boosting market-rate housing production here would not lower prices for generations, if then.” is not supported. There have been a lot of research on this, and the bulk of it finds that market rate housing does help with housing affordability. The literature review below finds:
“our review of rigorous recent studies finds that: (a) increases in housing supply reduce rents or slow the growth in rents in the region; (b) in some circumstances, new construction also reduces rents or rent growth in the surrounding neighborhood; (c) while new supply is associated with measures of gentrification, it has not been shown to heighten displacement of lower income households; and (d) the chains of moves resulting from new supply free up both for-sale and rented dwelling units that are then occupied by households across the income spectrum, and provide higher income households with alternatives to the older units for which they might otherwise outbid lower income residents.”
https://www.tandfonline.com/doi/full/10.1080/10511482.2024.2418044
You can also look at what’s happened in specific places that have actually added a lot of housing. In Auckland, New Zealand:
“In this paper we investigate whether the increase in housing supply has generated a reduction in housing costs. To do so, we adopt a synthetic control method that compares rents in Auckland to a weighted average of rents from other urban areas that exhibit similar rental market outcomes to Auckland prior to the zoning reform. The weighted average, or “synthetic control”, provides an estimate of Auckland rents under the counterfactual of no upzoning reform. Six years after the policy was fully
implemented, rents for three bedroom dwellings in Auckland are between 26 and 33% less than those of the synthetic control, depending on model specification.”
https://www.auckland.ac.nz/assets/business/about/our-research/research-institutes-and-centres/Economic-Policy-Centre–EPC-/WP016%203.pdf
The same thing happened in Minneapolis:
https://www.pew.org/en/research-and-analysis/articles/2024/01/04/minneapolis-land-use-reforms-offer-a-blueprint-for-housing-affordability
“Minneapolis’ success in building new apartments has enabled the city to substantially add to its housing supply and keep rent growth low. Minneapolis increased its housing stock by 12% while rents grew by just 1%. Over the same period, the rest of Minnesota added only 4% to its housing stock while rents went up by 14%. ”
It’s true that housing is a regional issue, but other cities have been making reforms. Cambridge earlier this year reformed their zoning to allow for six story buildings on much of its residential land. Somerville should do it’s part. Saying “oh it’s a regional issue, so there’s no point for Somerville to try and build more housing” is like saying “well there’s no point in us trying to reduce our greenhouse gas emissions, because other places emit as well”. And of course the more market rate units you build, the more affordable you get through inclusionary zoning.
David has provided an excellent example of what the authors call the misapplication of the neoclassical supply-and-demand principle. The studies that he references are of entire housing markets.
At that level, the argument accurately explains metropolitan Boston’s obscene housing prices. Restrictive zoning has severely limited density, increasing land and construction costs. Unnecessarily onerous approval processes increase predevelopment and holding costs.
Somerville is a tiny fragment of the 2-million-unit regional market. Boston and Cambridge alone have eleven times the homes that Somerville has.
Few in Somerville seem to appreciate what a relatively tiny amount of developable land remains for us to balance our grossly unbalanced property-tax roll. We could fill up every bit of it with new housing and have no impact on housing prices, which are regional.
But that would ensure that we never have enough net municipal income to pay for what we need, while rising residential taxes permanently eliminated affordability. Somerville’s residential rate is already $10.91, while Cambridges is $6.67.
And our unbalanced land use means that Somerville has 0.5 jobs per working resident while Boston and Cambridge have closer to 2. Those cities employ our residents and produce net income on the workplaces, while we house their workers and produce net loss on the homes.
The policy question really comes down to the author’s last sentence.
I will try to explain why your greenhouse gas analogy fails, David. Somerville has already done so much to balance regional housing supply and demand that we are seriously unbalanced and hurting. We’ve built proportionately more housing than any other town. We’ve adopted every possible affordable housing measure and have been leaders in doing so.
We’ve built so much housing that we are broke. Providing city services to housing, costs more than the property taxes paid by the vast majority of Somerville homes. Most cities balance this with commercial properties that give them more taxes than costs. Somerville has done the opposite.
Cambridge is unbalanced in the opposite direction. Its commercial taxes pay for a higher level of city services, while its homeowners and landlords pay lower property taxes than those in Somerville pay. Cambridge is way overdue for the reforms that you mention. Somerville is way overdue for balanced development policy.
I’m not convinced by this argument that just because other cities exist that are bigger than Somerville, then there’s no point in Somerville making reforms to add housing to address housing affordability. Again it’s just like the climate change analogy. It’s like saying well our jurisdiction is only a small portion of global greenhouse gas emissions, so there’s no point in us doing anything to address the problem. It’s better to contribute to solving a problem, even if your actions alone do not completely solve the problem, rather than do nothing. Given that zoning determines how much market rate and affordable housing can/will be built, and that is determined at the municipal level, it is largely municipal policy that needs to change, although I would support more state level action as well.
Regarding the fiscal impact of new housing, my understanding is that the available evidence suggests that it is net positive. A fiscal analysis presented during a recent land use committee meeting found that a 30 unit apartment building would be fiscally net positive to the city by 25-28k annually:
https://somervillema.legistar.com/MeetingDetail.aspx?ID=1346331&GUID=54904FFE-8756-4F61-9554-86251C4BC29F&Search=
That analysis is discussed starting 1:19 into the meeting.
David,
The moral your climate change analogy forwards — everybody should do their part whatever their circumstances — reminds me of asking malnourished children to set an example for their obese neighbors by going on a diet.
As to the fiscal impact of housing, how does the impact of a 30-unit apartment building compare to a similarly sized building with upper-story commercial uses? I also wonder how much land Somerville has and how many net-positive 30-unity apartment buildings Somerville would need to build to be able to service its rising infrastructure costs?
1. The housing demand is regional. But, the affordable housing demand is also regional. Everybody needs to do their part.
2. I don’t think Somerville’s affordable percentage is going down. Somerville doesn’t put their inclusionary units on the state list. This is because that lets them prioritize local people for those units – the state wouldn’t let them do that if they put them on the list. That 8.9% number is probably low and should be rechecked.
3. Bill is wrong. Each new housing unit adds more to the tax base than it costs Somerville. There have been way too many studies that back this up, and there are three people in town that keep pushing this myth. I can’t believe we are still debating this. Housing adds more to tax base than it costs, and Somerville’s budget has increased considerably due to all the new housing growth.
4. Somerville is not broke. They added a lot of staff as the budget grew, mainly to support housing stability and equity programs. But the city is very well funded for its size.
5. The average tax bill for an owner occupant of an average house in Somerville is under $6000. That’s a real bargain compared to everyplace in the greater Boston area except for Cambridge. We need to stop comparing ourselves to just Cambridge. Compared to Malden, Medford, or just about anywhere else, Somerville is doing great.
6. Zoning Somerville to build commercial-only districts without housing will create boring office parks in the city. The backlog of overbuilt labs will take six years to clear. This is bad planning and it won’t create new opportunities. The great economic threat to the region is lack of housing.