By William C. Shelton

 (The opinions and views expressed in the commentaries of The Somerville Times belong solely to the authors of those commentaries and do not reflect the views or opinions of The Somerville Times, its staff or publishers)

In Somerville, we:

• Celebrate the diversity of our people, cultures, housing and economy.
• Foster the unique character of our residents, neighborhoods, hills and squares, and the strength of our community spirit…

That’s how the city’s elegant Comprehensive Plan begins. When its planners asked ‘Villens what they love best about their city, “Diversity” and “Community” were among the top responses.

But both are eroding as more and more of us can no longer afford to live here. The children of families who built the city we love, and people who have put down deep roots and given of themselves to this community, are being priced out.

Between the 2000 and 2010 censuses, Somerville’s population increased slightly in terms of racial and ethnic diversity, but that was at the expense of economic diversity. That is, more affluent nonwhite households displaced less affluent white and nonwhite households. There is now a mounting body of anecdotal evidence of declining racial and ethnic diversity, driven by gentrification.

Many seem indifferent to the resulting injuries to individuals, families, and the fabric of community. Or they murmur about the unfortunate-but-inevitable costs of “progress” or “change,” implying that the market itself is the highest moral authority. If you are one of them, you can stop reading now.

Among those who profess keen interest in minimizing displacement and maintaining diversity are our city’s leaders. If they are to achieve those objectives, they must get a lot more serious about what we imprecisely call “affordable housing.”

I say “imprecisely” because all housing is affordable to someone, and the best affordable housing program is a job that enables the worker to afford market-rate housing. If government has a fixed amount to spend, it will get more results from investing in the preparation and linkage of citizens for and to today’s jobs than from building affordable housing, simply because housing costs a lot more than training, economic development, and linkage activities.

If we are serious about affordable housing, then we must recognize that simply increasing housing supply will not appreciably reduce prices, as some suggest. Regional market demand is driving Somerville’s housing cost escalation. Moreover, a majority of our residential neighborhoods are already dense, yet under assault from developers’ who want to force outsized projects on them.

If we want to maintain our diversity and bonds of community, we must permanently remove some portion of our housing stock from the inflationary market cycle. All other “affordable housing policies” only temporarily postpone the inevitable, and even that, on an insignificant scale.

I’m not talking about public housing. There are other options.

In general, affordable housing subsidies that come from or through city government should also come with deed restrictions that ensure affordability in perpetuity. Landlords benefiting from such subsidies would be required to maintain rents within HUD’s or the city’s affordability guidelines.

Subsidized home buyers would be limited in the amount of equity that they could accumulate. They would enjoy benefits that accrue to homeowners, such as the mortgage interest deduction. And they would remain in their homes as long as they chose, making below-market mortgage payments. But to maintain affordability, they would not be able to make a killing when they sold out.

A successful example is limited equity coops, built by both for-profit and nonprofit developers. But the policy could be applied to almost any form of ownership.

Nor are we limited to building new developments. With a variation of land banking, we could buy and hold market-rate units. Housing price inflation would far outpace operating cost inflation, making some or all of the units affordable over time.

Where would we obtain the initial capital at a meaningful scale? If the city can burden taxpayers with a $25 million bond obligation to build infrastructure supporting high-priced housing in Assembly Square, we can issue affordable housing bonds that do not burden taxpayers.

A city or state issues such bonds to finance affordable housing development and/or to provide mortgages to affordable-housing landlords and developers. Their tax-exempt status lowers the bonds’ interest rate.

The debt is not paid off by tax revenues, but by the proceeds from sales by developers or mortgage payments by landlords and homeowners. Historically, these construction loans and mortgages have significantly lower default rates than those of market-rate projects. With interest rates low and gentrification high, now is the time to act.

Another bold financing move would be to establish a small anti-speculation transfer tax—say, one percent. It would not apply to a home’s sale price, but to the capital gain.

In the case of speculators looking to make a fast buck, it would impose a modest disincentive. In the case of people who have held their property long enough to cash out with a bundle, it would represent a small contribution to the community that, in large measure, created that value. In the case of people selling at a loss, it would have no impact.

In determining who is eligible for affordable housing, the criteria should be limited to need and, wherever possible, tenure in Somerville. A few years ago some city officials proposed setting aside a portion of Union Square affordable housing units for artists. Understandably, this evoked some resentment.

Artists merit affordable housing, not because their profession is elite or their presence is an amenity to the gentry, but because they, like farm workers, home health aids, and so many others, perform work that is essential to our wellbeing, but shamefully compensated. They all merit affordable housing.

As I suggested in my last column, we need to decide what we want our city to be. If we want to maintain the authenticity, diversity, cultural wealth, and community fabric that make Somerville special, we will have to act at a scale that makes a difference. If we aren’t willing to do so, then let’s drop the lip service to “affordability.”