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By Joseph A. Curtatone
Last week in Somerville, we hammered out a solution that will create new housing in Assembly Square and, ultimately, 80-93 new affordable housing units at Assembly and throughout the city. It marks a tangible result for people who care about expanding the amount of affordable housing in our community. Some people feel raw about that outcome because they wanted more, but the reality is the advocacy on this issue helped us achieve what we did.
Let me delve into the particulars: the crux of the issue was whether Federal Realty would build its new block with 12.5% of the 500 units being affordable (63), as had been our standard when we signed the agreements on Assembly Row years ago, or at 20% (100 affordable units) per the City’s new inclusionary zoning ordinance that we passed last year. The argument for the 20% was pretty straightforward: we need more affordable housing and Federal Realty stands to make a good chunk of money off this project.
Yet the developer had a strong case as well: we unilaterally changed the terms and conditions around which the original deal was struck, and Federal Realty has shown good faith in the past (including helping to fund the Assembly Row T stop and building a new waterfront park). Also, our new 20% inclusionary ordinance allows developers to build bonus units to offset the extra costs, but this developer cannot build those units under their state permit granted years ago. Because of that, Federal is the only developer in the city allowed to apply for a waiver on the new 20% rule. The ordinance itself recognizes Assembly Square is a special case.
The fundamental problem with denying Federal Realty’s waiver request comes down to a simple bird-in-hand situation: specifically 80+ in hand versus 100 in the bush. When costs suddenly rise significantly due to a change in requirements, a national development company like Federal can choose to invest in more lucrative projects, leaving this one to wait, potentially for years.
That’s not a threat from them; it’s just a business decision. Meanwhile, no affordable housing is being built, the City isn’t receiving the fees for the building permits ($3.5 million), no taxes are being collected on the new housing and the new residents aren’t spending their money in our local businesses. There was a very real chance this could have turned into a hollow victory where we get nothing.
What we needed was a concrete agreement that would generate more affordable units. So I had our planning staff crunch the numbers and we determined that, by leveraging the city’s 100 Homes program, we could use some of the Federal Realty money needed to construct affordable units to significantly increase the amount of affordable housing. We verified the figures with the Somerville Community Corporation (SCC), which is our community partner in the 100 Homes program, and asked Federal Realty if it was amenable to the idea.
The agreement we struck will build half of the new affordable units in the original proposal (6.25% or 31 units) on-site in Assembly Square. The value of the other half will be put toward acquiring housing to be converted into affordable units in our existing residential neighborhoods, anywhere from East Somerville to Davis Square. With cash from the program, our partners at SCC can compete against house flippers and buy and protect units that are close to schools, neighborhood squares, and the future Green Line stops. The great thing about 100 Homes is that it will also produce more family-sized units than a tower in Assembly Row.
Our estimate is we can increase the total to at least 80 affordable units, or 16%, and potentially 93 units (18.5%) or more. That’s far more than the 63 units at 12.5% or the 0 units had this project not been built. People said they wanted more than 12.5% and we found a way.
As a mayor, I try to help the most people I can as often as I can. Risking the 80+ affordable units we will be able to offer now would have been an irresponsible gamble that could have adversely impacted dozens of families.
In government, we don’t always get exactly what we wanted or what we originally planned. When Ikea pulled out of Assembly Square we figured out how to get the infrastructure built and ultimately the biggest employer in New England, Partners Health Care, built its headquarters there (where it now employs more than 4,000 people). When the Green Line extension ran into cost overruns, we made sure a scaled-down version still met our needs and now it’s moving toward the major construction phase.
We have to be creative and we have to be willing to work with people. And in the case of building affordable housing, we have to be willing to work with developers, because that’s who will be doing the actual construction. If we have an antagonistic and unpredictable development climate, we stand to get 20% of nothing.
Across metro Boston, we need 435,000 new housing units at every price point to meet pent up demand (to put that in perspective, that’s about 10 to 12 Somerville’s worth of housing stock). That’s what’s spiking the cost of living for everyone in this area. The only way we’re going to achieve some kind of normalcy is if every community builds both the market rate and affordable housing we need. Somerville is determined to build its share, and Assembly is one more step forward.
I want to thank the people who came out and advocated for more affordable housing. We need that kind of passion and involvement on every local issue, and it made a difference in this case. People called for something better and we burned the midnight oil trying to deliver it. This was a complex issue and we found a way to help significantly more families in our community. Good intentions are great. Good deeds are better.
We – and when I say we I mean everybody from the community advocates to Federal Realty to the staff at city hall – managed to do some good deeds here. Real people are going to get real help. It may not be perfect, but it’s good. Nobody gets to die perfect, but when I go I want people to say I did a lot of good. We did some good here, and it might be a model we can use in the future to do even better.
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All of these points have been rebuked many times, but I will quickly summarize here:
– The only tangible result is 31 affordable units at Assembly. Every other unit is an “if”, “when” or “maybe.” The 100 homes program launched in 2014. They have created 20 units since. Seems fair to assume it will be 2026 before the 90th unit is built. We need the maximum units possible at Assembly AND the 100 homes program.
– Rules change over 10+ years and businesses know it. The meat packers used to dump their waste into our water ways. We didn’t grandfather-in their polluting practices and let them destroy our city forever. 12.5% was not making our community affordable so we increased the standard just like we increase environmental standards. FRIT shouldn’t be grandfathered in either. The threat of improving standards is the only tool we have to keep them from speculating endlessly.
– The “agreement” was a backroom deal that did not have the chance to see the light of a public process. The Mayor is supposed to take the lead on many issues, but the waiver was supposed to be a public process and it was not because this deal would not have held up to public scrutiny.
– The deal was already made. The City openly admits to have balanced our budget on the $3.5 million permit fee. The planning board was threatened to either approve the waiver or be responsible for the cutting of necessary services. The planning board is meaningless and a public process is meaningless if the Mayor has already committed to a deal without approval. FRIT executives have literally donated thousands of dollars to the Mayor’s campaign for this very reason, to have his ear for backroom deals.
– We will not build our way out of a housing crisis. If we magically built 435,000 housing units in 2017 we would probably need another 435,000 in 2018 to house all of the builders and their families, all of the new teachers, cops, and public servants, all of the new food service workers and so on. The crisis is about inequity. Rich people can buy a house wherever they want. They are choosing Somerville right now because we are letting FRIT build luxury units at the cost of affordable ones. If we built affordable housing, poor people could stay and the rich people could choose somewhere else. It is that simple. Enough with the supply side economics BS.
– The struggle goes on, but everyone involved knows this was a boon for FRIT at the expense of those needing affordable housing now!
Mayor Joe,
You write: Last week in Somerville, WE HAMMERED OUT A SOLUTION that will create new housing in Assembly Square…
I appreciate the use of the word ‘hammer’ because it was a bloody blow to both the community at large and to those to whom affordable housing is a concern in particular.
That said, I wonder who this “WE” you speak of is? You and FRIT? It was certainly not a public process, rammed down our throats as it were by a planning board whose folksy musings were not at all assuaging to the crowded audience, many of whom had been at the previous hearings and watched the parade of Aldermen, citizens, SCC organizers and board members, and Our Revolution activists voice overwhelming opposition to the sweet deal that FRIT wanted for themselves.
I’m extraordinarily disappointed in your leadership in this matter.
“… we managed to do some good deeds here” shows how out of touch the mayor is with the community. This statement didn’t seem to be a reasoning for the decision but more so a way for the mayor to stroke his own ego about how great he is. The mayor needs to prove that he listens to the community, and so far he’s doing a pretty bad job at it.
There are plenty of ways to discourage people of color from moving into a neighborhood. In Southie in the 70’s, it was throwing bricks at school buses. In Assembly Row in 2017, it’s stuff like this . .
What a ridiculous statement ward 1 resident.
Hope all those losers are happy with themselves now they caused even less affordable units at assembly. They should have just kept their mouths shut and they would have had over 60 units right on site.
Seems like waiver was going to pass and they cut a deal for as much as they could get. It’s kind of funny reading comments about public contract negotiations from people who don’t sound like they could negotiate their way out of a wet paper bag. That’s a recipe for getting nothing done.
I was at this meeting and even the planning Director, Mr Proakis, said that it was understandable to see value in granting the waiver AND in denying it. If this was such a great deal as you say, I would imagine that your planning director would have been much more enthusiastic about it than he was.
I agree with Ian. Except for 31 on-site units, the rest are an “if” and a “maybe.” Planning board member Michael Capuano Jr said this too, he was the ONLY no vote and the only one who spoke against this last minute “deal” . We do not know if 10 million is enough to build the 49 other homes, even SCC who would get the money said they were not in favor of the so called deal.
It felt to everybody in the room that it was a half measure just to make sure FRIT did not sit on their hands. I am glad one member of the planning board did not want to rush this issue and voted his conscience.
Disappointed. Not addressed in the Mayors letter is the blatant classism inherent in this deal. 12-20% of potential integrated affordable housing slashed to 6%. Not In My BackYard. Go build your affordable housing somewhere else is what that says. Now the Mayor and the zba have stated thathat Assembly Row is not for families? I wonder who Lego, the playground, and the parks are for then? This message says we don’t want single or multiparty families here. Only the rich may apply. So much focus on how much money this one building will bring in… I value affordable integrated housing over $3 million dollars any day! The dangerous precedent this deal DID set Mr. Mayor is that it is clear you would rather sellout to developers than take the harder fight for social justice and inclusion. You had my vote, once. You’ve lost my confidence.
B, just some back of the napkin math, But if you are going to buy from existing housing stock a typical 3 unit building in Somerville is about 1M I would be surprised if they were about to get 30-35 units with 10M
The aldermen including Matt had an opportunity to vote out the waiver process. They did not…frit used it…frit was approved. Will scc be cashing that check?!? They opposed the waiver approval and sent more of their paid seat filllers. That check is blood money, no?
Do some of you wish to add to this discussion? 20% affordability is little
in itself. Does this mean that 80% is unaffordable? ‘Affordability’ based
upon the federal standard of up to 30% of income is no prize. So
affordable housing may be neither reasonable or cheap. The 30% of
income standard came with Reagan in 1981, and prior to this started
with 20%, and then moved to 25% of income. So when developers
complain about percentages of affordable housing, we do need to look
closely at what their real costs and profit margins are, and where they
have no incentive to be truthful. Federal and State laws do little to
discourage opportunism, and MA declined 34.4% in housing stock
availability in the last year, so gentrification is here to stay. But there
are other ways to confront the issues, and one being a Real Estate
Transfer Tax of 1% to create a trust fund for home buyers to borrow
money from. The Mayor and others are looking at this now. There are
other people who would increase the affordable housing percentage
from 20 to 25. But we do need to talk about what ‘affordable’ really
means, because housing should be affordable to all income levels
in the way it is, and not be a burden to any. Realtors are no angels
either, and in the way they can encourage landlords to rent out
apartments at high market rates. And we can see that when many of
the higher income yuppies are now complaining of hardships, that
this whole system of housing doesn’t work as it should. That housing
and shelter should be a reasonable expense is a given value which
has got lost in places like Somerville. Developers building more luxury
housing just adds to an equation that doesn’t work. So write in your
thoughts, because there’s plenty of issues to talk about.
Never reopen a deal once its negotiated. It’s a high risk move and it backfired big time here (assuming the intent really was to actually get to 20% affordable). Sure would be nice to have 12.5% of the affordable units on site.
Don’t hold your breath for the other promised units to get built somewhere else