Committee of residents, experts, advocates, and industry professionals develop bold and innovative recommendations to address housing affordability

From a proposal to establish a 1 percent real estate transfer fee to the expansion of tenants purchase rights, the recommendations in a report released this week by the City of Somerville Sustainable Neighborhoods Working Group propose innovative new approaches for increasing  housing affordability for Somerville residents and families.

The 26-member Working Group, established by Mayor Joseph A. Curtatone as part of his Sustainable Neighborhoods Initiative, comprises community members with a wide range of experience and perspectives on housing affordability. They include affordable housing experts, resident stakeholders, community advocates, and finance and real estate professionals. Their clear and urgent directive from the Mayor was to review six proposals from the City and to develop and propose bold and innovative ideas that will support the City’s efforts to

• protect and preserve existing affordable housing,
• expand the City’s resources for creating more housing,
• address the need for middle-income housing for working families.

In transmitting the report on behalf of the Working Group, Co-Chairs Alderman Mark Niedergang and housing expert Dana LeWinter commented that, “It gives us great pleasure to report that SNWG members have worked creatively, constructively, and diligently to do exactly that.”

“Somerville must lead the way on housing affordability,” said Mayor Joseph A. Curtatone. “We are up against daunting market forces that are driving housing costs upward regionwide, and coming up with solutions is going to require innovative thinking and an all-hands-on-deck commitment from the community. I want to thank the Sustainable Neighborhoods Working  Group for putting such thoughtful and bold proposals before us. Our next steps are to devote City Hall’s resources to thoroughly analyzing these recommendations and getting extensive public input on them.”

Recommendations

The recommendations of the Working group are summarized below. The full report can be read or downloaded online atwww.somervillema.gov/snwg.  All items were fully recommended unless marked as a “qualified” recommendation or otherwise noted.

Resource Recommendations

• Real Estate Transfer Fee: Apply an approximately 1% fee on all real estate transactions (with exemptions for certain transactions) to support affordable housing efforts.
• Linkage Fee: Commission a Nexus study to determine an appropriate increase to the existing linkage fee, which is currently charged to larger developments to support affordable housing. Also index the linkage rate, reduce the threshold size of projects from 30,000 to 20,000 square feet, and charge a lower linkage rate to projects below 30,000 than those above.
• Short-term Rental Policies:  Form a ‘new economy’ task force. First task to be review of regulations for short-term rentals (such as Airbnb) that  remove units from the conventional  rental market. Levy lodging tax on short-term rentals once state law allows.
• Ch. 40R Smart Growth Zoning Overlay: (Qualified recommendation) Pursue a 40R overlay district only if the SomerVision housing goal is increased and commercial/open space goals can be achieved and if as-of-right development is allowed in transformative districts.
• District Improvement Financing (DIF) Set-Aside Policy for Affordable Housing: (Qualified recommendation) Explore policy for future DIFs for the construction of affordable housing. (A DIF involves the City borrowing money via bonds that will be paid off with future tax revenue generated by new development.)

Program Recommendations                                       

• SomerVision Housing Production Goals: (Qualified recommendation) Increase SomerVision Housing Goals, contingent upon OSPCD Planning and Zoning Division’s study on the physical feasibility of the increase and provided that SomerVision Jobs and Open Space Goals can still be met. Increased housing goals should be informed by related work currently being overseen by the Planning and Zoning Division and other data indicating the preponderance of need for family-sized housing and affordable housing.
• Affordable Housing Design Competition: Hold a community-driven competition for affordable housing proposals that emphasize energy efficiency, affordability, and family-sized units, as well as a combination of rental and homeownership units.
• Financial Support Program for Tenants in Inclusionary Units: To test an option for reducing eviction risk and possible displacement of residents in inclusionary units (affordable housing), launch a pilot program providing rental subsidies for up to six tenants. Pilot should use targeted funding to expand the existing tenancy stabilization program.
• Benevolent Property Owner Tax Credit: This proposal is not recommended as a citywide program due to projected administrative burden and fiscal impact. Some support was expressed for an alternative proposal: to explore a pilot “benevolent landlord” incentive program for landlords who hold rents below market by making a limited number of residential tax rebates available to them through a lottery process.
• Affordable Tenancy and Energy Efficiency Program: Launch a new program to provide forgivable loans to landlords for energy efficiency improvements in exchange for their agreement to accept affordable rent restrictions on their rental units.
• 100 Homes Initiative: Continue work on this program, which was initiated before SNWG meetings began. A joint program of the City and the Somerville Community Corporation, 100 Homes purchases properties that may otherwise go to speculators and renovates them to create permanently affordable rental units.
• Financial Support for Income Eligible Homeowners Facing Foreclosure: Explore further through the creation of a task force.
• Community Land Trusts: Found a task force to explore strategy further.

Policy Recommendations

• Right-to-Offer Program: Convene a task force to develop programs that would increase the opportunity and ability of tenants to purchase their units or buildings if offered for sale. Programs should govern all or most sales of tenant-occupied buildings or units.
• Condominium Conversion Ordinance: Explore updating of the City’s condo conversion ordinance. The Right-to-Offer Task Force should also assess this area.
• Zoning Overhaul: Support for several housing-related provisions in the proposed zoning overhaul was expressed:

o       Inclusionary Housing – Establish a 20% Inclusionary Housing Percentage citywide, pending results of the OSPCD-commissioned financial impact study currently underway.

o       Density Bonuses – Establish a new weighting structure to incentivize (from highest to lowest priority): affordable housing/unit size diversity, senior/disabled housing, artist space, and green space.

o       Accessory Structures – Allow properly constructed basement units in three-family homes as well as two-family homes; allow housing in above-ground accessory structures. Recommendation also calls for outreach to owners about home rehabilitation funds available from the City to bring basement units into compliance.

o       Cash-in-Lieu of Inclusionary Units – Continue special permitting requirement for cash-in-lieu payout, and increase pay-out ratio from current one-to-one to reflect cost of land acquisition.

o       Universal Waitlist Priorities – Include priorities; the Working Group supports that the City and universal waitlist consultant finalize the prioritization scheme.

o       Housing Types – Define “student housing” type to include “students and their families”.

• Targeted Funding for Lowest Income Households: Prioritize a percentage of housing funds for housing to serve extremely low-income households (i.e., below 30% Area Median Income.) Work with Somerville Housing Authority and Metropolitan Housing Partnership to increase Section 8 voucher usability within Somerville.
• Alternative Homeownership Models: Create a housing assistance center to provide technical assistance for residents considering joint purchases, cooperative housing, and other forms of ownership that expand affordability.

“These recommendations are the result of extensive deliberations by a committee of some of the smartest people in Somerville about housing and the dedicated work of our Housing Department staff.  But they are just the beginning: now the hard work begins to implement them and to help save our City and residents from wholesale gentrification and displacement,” said Co-Chair and Ward 5 Alderman Mark Niedergang.

Next Steps

Now that the recommendations are in hand, the Mayor has directed the City’s Housing division to swiftly commission analysis of the feasibility of proposals with potential fiscal impact and/or that will require legislative action, such as the proposed real estate transfer fee and Right-to-Offer program.

Once analysis is complete, the Working Group will be reconvened to review findings and develop priorities. With that feedback and input in place, City staff will then be tasked with preparing a detailed implementation plan that may require various forms of action, on the part of the Mayor, the Board of Aldermen, the administration, Somerville’s state delegation, and community members.

Going forward, the plan will direct ongoing efforts to realize the Mayor’s and Working Group’s goal of preserving Somerville as a community where housing opportunities are available and sustainable for families and individuals of diverse background and economic means.

An intensive 10-Month Process with 26 Members

 “The Recommendations Report is the result of extensive research, discussion and deliberation, conducted over 12 full SNWG meetings between February and November 2015. Between full SNI Working Group meetings, members also met a total of 22 times across the 3 working committees to develop 19 proposals to help address Somerville’s housing affordability crisis through resources, programs and policies for renters, homeowners and homebuyers that promote housing development, preserve existing affordable housing, and support residents,” wrote co-chairs Niedergang and LeWinter and Programs Committee Chair Irene Lew in their report transmittal letter. “Collectively, the proposals offer a comprehensive approach toward ensuring Somerville’s neighborhoods are accessible to families and individuals of diverse backgrounds and incomes, in a way that is sustainable over time.”

“Working Group members who contributed their talents, insights, and valuable time to the process included individuals with longstanding involvement in the city’s affordable housing efforts through organizations such as the Somerville Homeless Coalition, Somerville Community Corporation, and Somerville Affordable Housing Trust Fund. Other members have been actively involved in the city’s redevelopment efforts through their affiliations with organizations such as the Somerville Chamber of Commerce and the Union Square Civic Advisory Committee, among others. They each deserve individual mention,” said Housing Director Mike Feloney.

Working Group members include:

Mark Alston-Follansbee, Executive Director, Somerville Homeless Coalition

Jacinta Arena, Affordable housing advocate

Joseph Beckmann, Editor, MA Political Almanac; Union Square Civic Advisory Committee

Jamie Bemis, Master in City Planning Candidate, MIT

Fred Berman, Senior Associate, National Center on Family Homelessness

Natasha Burger, Realtor, Coldwell Banker Residential Brokerage

Mary Cassesso, CCO & President, CHA Foundation, Cambridge Health Alliance

Irma Flores, City of Somerville, Language Liaison

Kevin Gatlin, Senior Vice President, Winter Hill Bank

Kristin Haas, Housing Policy & Resource Specialist, Project Hope

Shaina Korman-Houston, Project Manager, Urban Edge Housing Dev. Corp.

Maude LaRoche, Family Engagement Coordinator, Prospect Hill Academy

Daniel LeBlanc, CEO, Somerville Community Corp.

Irene Lew, Research Assistant, Joint Center for Housing Studies, Harvard University

Dana LeWinter, Co-chair, Executive Director, MA Community & Banking Council

Stephen Mackey, President/CEO, Somerville Chamber of Commerce

Patrick McMahon, Director of Development, Federal Realty Investment Trust

Damian Musello, Owner, Greenhome Realty

Mark Niedergang, Co-chair, Alderman, Ward 5

Ann Marie Polaneczky, Project Manager, Shawmut Design and Construction

Peter Quinn, Principal, Peter Quinn Architects

Ellen Shachter, Senior Attorney, Cambridge & Somerville Legal Services

Tim Talun, Architect, Elkus Manfredi Architects

Thalia Tringo, President, Thalia Tringo Real Estate, Inc.

Peter Tsourianis, Steering Committee member, SomerVision

Kimberly Wells, Edward J. Collins, Jr. Center for Public Management

— City of Somerville