Monday, October 23, 2017

Position: Affordability and Housing

THE NEED:

Affordability tops most people’s worry list. It means something different to different people. Some people live on only $40,000 a year and have trouble paying for water or tax bills, even as their property is worth almost $1 million. Younger people may have two degrees and high earning potential, but they still struggle with student loan debt and have no way to get into the market. Low-income renters face the most struggles.
  • Displacement: Data on housing show that people’s fears are real. Based on data compiled two years ago, almost 80 percent of households in Somerville will need to move if their housing situation changes (their lease ends, their rent increases, they outgrow their space, or they need to sell their home). That means, we can expect to see a huge shift in who lives in Somerville, and that’s destabilizing for the fabric of the community. The odds have gotten even worse since the City released that data, though there has been softening of the rental market in recent months.   
  • Declining housing stability: While the rate of home ownership has remained relatively stable for the last 50 years at around 32 percent, historically, families have lived together in units in multi-family buildings. Now, more buildings are owned by absentee landlords. The percent of residents between the ages of 18 to 34 has grown to almost half of the population. Many people I’ve met while door knocking, especially seniors, have talked about a decline in the feeling of community. They believe that it’s because of an increase in residents who stay for just a few years and because of fewer children. The younger people I've talked to are worried about getting a toe-hold in the market. Having such a large population of young adults, while good for attracting certain employers, means that most of these people will not be able to stay if they want a different living arrangement for the next stage of their live, such as ownership or a family-friendly unit. It's like a five-lane highway converging to a one-lane road. If we keep building small high-end apartments and if only young adults can find space to rent in the older housing stock, we are building this transiency and lack of commitment into our population.  Young renters will have no way to get involved in Somerville's future, because they won't be able to be part of that future when they "settle down."
  • Additional household burdens: Finally, additional burdens handicap household finances. The cost of city services, fees and fines has increased, as has costs of transit, childcare, and healthcare. Meanwhile, wages for some have fallen. Immigrant families without residency status are experiencing more stress and destabilizing forces as they fear or experience deportation of family members. Many people are experiencing increased hardship.
    As we try to address affordability pressures, there are five groups that I believe warrant special focus, given their unique needs:
  • Families with children: Children are almost twice as likely as other residents to be living in poverty. Families generally make less money and have more expenses, unique housing needs, and more dependence on municipal/district services. They face much more housing discrimination. The population of children in Somerville has continued to shrink over the last 30 years, and Somerville currently has one of the smallest percentages of children among larger communities (only Cambridge is lower). The vast majority of Somerville School students will face displacement pressure in coming years.  If we want to retain children, especially any low-income children, we will need to create and preserve housing with families in mind. Our goal should be to do AS MUCH preservation, protections, and production of affordable units as possible in the face of our growing economy.
  • Seniors: Many seniors I've talked to may be ready to leave their home, because of issues with maintenance or mobility (I know from door knocking how many houses are atop many, many steps!). Or, perhaps they worry about social isolation. Most want to, however, stay in their own neighborhood with their same social network. I believe we need to focus on housing for seniors that allows them to stay in their own neighborhoods.
  • Middle-income households: While we need to create more low-income housing, we also need to have a special focus on middle-income households. They need less support, but do need some subsidy and technical assistance. Middle-income households and families are a key part of creating a strong community. This includes employees of the City, the Schools, non-profits, and smaller businesses.
  • Artists, artisans, and small business owners: This is another group of residents that has contributed to the character of Somerville. We need to look at models of housing that enable artists and entrepreneurs of all types to live and use business space in Somerville.
  • Owner occupants: In order to create stable blocks where residents live together for more than a few years and residents can be assured of their housing stability, I believe we need to increase our percentage ownership or permanently affordable housing units. For this reason, any of the policy plans should have special accommodations for owner occupants. Also, if we do not limit new opportunities to owner occupants (e.g. development of accessory units), properties will become even more desirable and profitable to developers, who will almost always outbid owner occupants. If that happens, it will have the opposite effect on creating an affordable and stable housing market.
POLICY GOALS:

There are no easy answers to address the above-listed points of pain. Everything we do will require the best possible technical, legal, and analytical work. Equally important, it will require a community discussion in which people can share their stories and understand one-another’s needs, combined with a call to action from all corners. It will be hard, but if we don’t make these hard choices, our demographics will look like those of wealthier suburban neighbor communities within a decade or two.

Here are the tools we should explore and then implement in some form:

  • Tax deferral: The City and State law currently permits residents who meet certain age and income requirements to delay paying their taxes at a 3 percent interest rate. Very few people, however, are aware of this program. I believe that we should carry out an aggressive advertisement of the program, such as by using a third-party company that can sign up interested residents. As part of tax bills, the City could send a statement on the estimated value of the home and annual appreciation (similar to a pension statement) so that residents are able to see how much their home will be worth at sale even after settling deferred taxes. The City should also work with local banks to create a loan program for owners who do not meet the age/income requirements so that they too may tap into their extraordinary gains in housing values. We should also explore offering owners an opportunity to permanently deed restrict their property (so that the property would become part of the inclusionary housing stock after they sold it or passed on) in exchange for tax forgiveness.
  • Regulation of smaller developments: While larger, new developments need to pay for a number of community benefits (inclusionary housing, a proposed CBA and infrastructure payment), smaller developments and rehabs currently do not require owners to pay for any community benefits.  I believe we need to regulate smaller developments and rehabs so that those developments are required to build (or pay into a fund to build) affordable housing and to contribute to community benefit funds. Some have proposed a higher inclusionary (IZ) housing percentage, which I support. However, I think it’s important to move increased regulation of the smaller developments forward in conjunction to any change in IZ percentages. If that doesn’t happen, I believe there will be increased pressure on speculative development activities that fall outside of the ones currently regulated by the inclusionary housing law. For example, I’m thinking of an old building of about 20 units where a lot of Somerville Public Schools students live. If/as the IZ percentage increases for new construction, it may create an incentive for developers to buy and gut rehab that building because current law doesn’t obligate them to build any affordable units. If/when that happens, all the low-income tenants will be displaced. There are a number of ways that the community benefit requirements could be applied to smaller development, and this should be spelled out in the code so as to leave no room for negotiation. They could be required to pay into the Affordable Housing Trust Fund according to an as-yet undetermined formula. Or, they could create one middle-income inclusionary housing unit, with a subsidy required that matches the payment to the Trust Fund. As mentioned above, with every new housing policy, owner occupants should be given special consideration. Thus, a resident owner of a triple decker should be able to renovate without payment into a community benefit fund.
  • Implementation of Sustainable Neighborhood Working Group (SNWG) recommendations: The SNWG met for more than a year to hammer out detailed recommendations on affordability published in May of 2016. However, few of the report’s recommendation have been implemented. This is in part due to a lack of staffing in the housing office, which needs to change. Those recommendations include some of the ideas mentioned here, but also the following: work with universities so that they house their students, centralize our affordable housing waiting lists, create a housing assistance center (that would work to ensure landlords and tenants know rights and responsibilities, and to identify and track tenants at risk of displacement), and other ideas of varying level of difficulty to implement. The report had planned as a next step for a detailed implementation plan, however, we have heard little in terms of updates and progress made. We need a living, evolving plan that we pursue with urgency and for which we track and report on progress made. 
  • Right of First Refusal (ROFR) Program: The Sustainable Neighborhoods Working Group recommended that the City pursue a ROFR program. This program is modeled after Washington DC’s First Right program, and Rep Provost has currently proposed as a State law that would enable communities like Somerville to adopt the program without a home rule petition. The model permits tenants to have the first option to purchase their unit. Tenants can also assign their right to purchase to a third party, such as a non-profit developer or the city. That non-profit can use subsidies to develop the housing into limited equity ownership opportunities or permanently affordable rental units. The benefits of this program include: currently affordable units (that are below market rate because they are in older buildings) can remain affordable and tenants do not need to leave; middle- and even higher-income buyers have a better chance of purchasing a unit rather than competing with developers; it promotes ownership even for low- and moderate-income households; and it creates affordable units in traditional buildings and neighborhoods. Note that the program requires a source of local subsidy, such as more funding for the affordable housing trust fund from a transfer fee and/or payments from smaller developers.
  • Community Stabilization or Transfer fee: I currently participate in a task force that is analyzing options for how to implement a community stabilization fee. This fee, if implemented, will require some sellers or buyers to pay a small percent of their total sales price into the Affordable Housing Trust Fund. That funding would then be used to support subsidies, such as those used for the 100 Homes program of for the creation of limited equity ownership opportunities through a First Right program. Much needs to be considered as this proposal gets reviewed. Property sales or transfers to family members will be need to be exempted. Also, many homeowners are very frustrated by fines and fees, and will be very opposed to a new fee. If the proposal moves forward, I believe we should enable owner occupants to waive or reduce their transfer fee payment if the property is sold to a current tenant, to an owner occupant or to a resident who earns less than the average income. Also, I believe that funding from the transfer fee should help pay for more senior housing and to help expand a low- or  no-interest tax deferral program.
  • Municipal marketplace: Another idea to explore in addition to the First Right program (or if that program proves too difficult to implement) is a municipal marketplace. The City or a third party non-profit developer would maintain a clearinghouse of residential properties in Somerville. If an owner sells via the marketplace, their transfer fee will be waived. Only owner occupants may purchase from the marketplace. This could be built into the functions of a housing assistance office and could also take over the sale and transfer of a future pipeline of deed restricted units.
  • Producing of housing in the right places and at the right scale: The recent YIMBY (Yes In My Backyard) advocacy has given voice to a new strand of housing activism. The YIMBY approach argues that because the region needs an additional 430,000 housing units to meet demand, we should discourage NIMBYism. NIMBYism stands for “Not in My BackYard” and it refers to when neighborhoods or communities shut out higher density housing. While I think this approach is an important perspective, it does need context and refinement. The voices of neighbors and abutters must always be considered. When we live in such close quarters, people feel very powerless when they have no influence over any major project (buildings, streets, parks, etc.) that’s just feet or yards away from their front porch. That said, I support higher density construction in the transformative districts, like Boynton Yards and the Inner Belt, where there are few residential neighbors. In all cases, higher density within the same building envelope should be tied to other benefits, often more affordable units and/or in some cases other community benefits, like shared public indoor or outdoor space. Also, we should consider the pros and cons of enabling development of some accessory units, such as basements and exterior buildings (garages, carriage houses) into living spaces. These, as well, should be granted with affordability incentives and only if the accessory or primary home can be designated as an enforceable car-free unit (see below). The development and use of accessory units should be limited to owner occupied properties. I don’t think that Somerville can take the burden of building too much more density, but if we can do higher density successfully and with community buy-in, it can help other communities see that smart growth can work.
  • Car-free status: One of the key barriers to higher density is worries about increased parking and traffic congestion. I support the creation of a permanently “car-free” property status that would will owner occupants to develop accessory units without increasing car traffic and parking problems in neighborhoods. In a property that elects to adopt this status, current and future owners and tenants will be unable to acquire a parking permit, create a curb cut, or add pavement in their yards. City planners have said that legally this is possible.
  • Live/work space & creative models: Artists and artisans are a critical part of our community. They do not make much money and often have special needs for workspace. Places like Brickbottom, Artisans Asylum, Greentown, and Canopy provide models of shared workspace. I believe we need to continue to test models of shared live and work spaces that meet the needs of artists and artisans, and others, like entrepreneurs and non-profit employees or managers.
  • Air BnBs: While door knocking, many residents express frustrations with Air BnBs. They felt that the properties hurt the quality of life in the neighborhood. While renting a room or renting a whole property on occasion can help owner occupants pay their mortgage, I believe that we should prohibit whole-unit, not-owner-occupied AirBnB (or similar) rentals. Cambridge recently passed an ordinance that we can use as a model.
  • Citywide zoning: The City currently is soliciting feedback on a zoning overhaul. The overhaul provides updates to the patchwork of amendments that makes up its current code. Once passed, it will require less scrutiny of some kinds of renovations and development projects, and more scrutiny of other types. Most importantly, however, it provides a superstructure onto which additional housing policies can be build using municipal code (under the jurisdiction of the Board of Aldermen) and City Policy. We need to give the proposed zoning a final round of careful critiques and reviews, and then move ahead so that additional rules can be added via zoning law, ordinances, and municipal policy.
  • Neighborhood design and incentives for family friendly new housing models: I believe that we need to work hard at preserving affordability in our traditional neighborhoods, which I think are ideal for families with kids. I do think, though, that when new neighborhoods get designed, we need to plan intentionally for all walks of life in our new neighborhoods. When we build out a new neighborhood, like the Inner Belt, its housing and amenities should reflect the composition that we hope for the city, including people of different income levels, children, seniors, and people requiring supportive services. It should include ownership opportunities, and not just rental. Neighborhood amenities will need to include childcare, grocery stories, parks, and schools
  • Advocacy for pressure on other communities: As we know, housing is a regional problem requiring solution at higher level of government. While YIMBY argues for building higher density locally, I believe we need a YIYBY (Yes in YOUR Backyard) strategy as well. We need our Governor and State legislature to take leadership in creating incentives and mandates so that higher income, suburban communities must build more high density housing. I will also continue to work on lobbying for changes to the State’s education accountability and funding formula. Both penalize communities that serve low-income families, rather than rewarding and providing more support to them, enforcing what amounts to an institutionalized classism and racism.

CONNECTIONS TO OTHER ISSUES: (Coming soon for some issues...):
  • Transit: As mentioned above, creating parking for new development adds to the cost of units. While many households do need a car, some can go without or with one fewer if they have good transit and employment within reach of the transit. There does, though, need to be an enforcement mechanism. Go to the LIVABLE STREETS section for more ideas related to transit.
  • Community safety net: Housing is part of a household’s total cost burden. While we work on the cost of housing, we can also address the other household costs, such as transit, out-of-school time, and city fines/fees. Go to COMMUNITY INSTIUTIONS, SAFETY NET, AND CONNECTIONS for more ideas (coming soon!).
  • Transparency: Residents have expressed a lot of frustration with the decision made by the Planning Board in the Federal Reality IZ waiver case. I believe that we need to revamp the City’s powerful boards, including their scope, appointment process, and methods of soliciting public comment. If elected, I will work with the administration and colleagues to launch a process to review the boards. In the meantime, however, the Board of Alderman approves candidates for Boards, and I will use that authority to work with colleagues to vet candidates in a transparent and rigorous process. Go to the TRANSPARENCY, DATA, AND EMPOWERING NEIGHBORHOODS section for more thoughts.
  • Open space: Thoughtfully designed open space can relieve the need for private open space. As we build out areas like Union Square, we can think about how open space affects the design of neighboring housing. See OPEN SPACE for more thoughts.
    Small carbon footprint: Energy efficient, small households with one or no cars have a small carbon footprint at the same time that they are more affordable. See ENVIRONMENTAL ISSUES for more thoughts (coming soon!)
  • Empathy and community building: Implementing these and other policy initiatives requires a community conversation. Some require sacrifices. We need to continue to build relationships and exchange stories that help us make decisions together. Go to the TRANSPARENCY, DATA, AND EMPOWERING NEIGHBORHOODS section for more thoughts.
  • Employment and business development: Having access to stable employment, particularly in close proximity to Somerville, helps households pay for housing costs. We need to support small businesses and non-profits such as by subsidizing their business AND personal household costs. Municipal employees also should have access to special housing programs. See BUSINESS DEVELOPMENT ISSUES for more thoughts. (coming soon!)

WITH APPRECIATION:

The following people provided feedback on and additions to these policy ideas. Fred Berman, Alex Bob, Cory Mian, and David Tisel. In addition, Canopy.City hosted a brainstorming session on housing preferences and models. Ideas from attendees of that meeting helped inform these policy goals.

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