Affordable Housing Overlay Deconstructed (Part I)

When the debate over ending rent control dominated city politics in the early 1990s I had just moved to Cambridge from Manhattan, so I was not involved in that fever-pitched battle. Now, some twenty-five years later another housing debate is roiling local politics, and as vice mayor my email inbox is overflowing with messages from both supporters and opponents of the 100% Affordable Housing Overlay (AHO) zoning petition or “the Overlay.” 

Like the fight over rent control, the Overlay debate tends to pit renters against property owners, but this time around the renters are calling for de-regulation, casting “exclusionary” zoning as the enemy that must be vanquished. The way the debate has been framed by many of its most vocal and ardent supporters seems to have left no middle ground: by their estimation you are either all-in for the Overlay because you are on the side of people who have been priced out of Cambridge’s overheated housing market, or you are against it because you are a NIMBY property owner or worse. The distrust traces back to rent control having been repealed, leaving skant legal protections for tenants and a weak condo conversion ordinance that spurred many multi-family landlords to renovate and condo apartment buildings, thereby eliminating a significant portion of the rental stock affordable to low and moderate income residents and accelerating  gentrification and displacement across the city. The end of rent control coincided with deep cuts to the federal budget for public housing subsidies.

Amidst this fraught political climate, the Overlay is alternately described as a “modest proposal” (apparently without any of the irony in Jonathan Swift’s origination of that phrase) or a “radical” assault on property rights that will destroy the city’s neighborhoods. The reality lies somewhere in between, but after months of often-shrill debate and no shortage of snark on Twitter, culminating in two recent public hearings on the Overlay at the Planning Board (watch video) and the Council’s Ordinance Committee (watch video) that each ran for five hours and were continued for further discussion, the two sides appear unwilling or unable to look for a middle ground. On top of this, it’s a municipal election year, and the Overlay, which the City Council could vote on by the end of September, likely will be the deciding issue for many voters in November.

As the only incumbent councillor not seeking re-election this fall, I have the unique opportunity to look at the Overlay through a less directly political lens. That’s what I will try to do here. First I want to acknowledge that my personal perspective on the Overlay is shaped by my own background and life experiences, but the same can be said of everyone taking part in this debate. We all have our biases and blind spots and the best we can do is to admit that and challenge our own assumptions. I will state upfront the lens through which I view this discussion: I am white, I was born at the tail end of the Baby Boom, and I live in West Cambridge in a single-family attached house my husband and I bought in 1999 and could not afford to buy on today’s market. But I also see the Overlay through a lens shaped by my experiences over the past several years as a city councillor and neighborhood leader.

 The stated purpose of the Overlay zoning has won support among both “sides.” It is:

“To help affordable housing developers, using public funds, create new affordable units more quickly, more cost effectively, and in areas where there are fewer affordable housing options for residents. This will allow 100% affordable housing development to compete with market-rate development, creating more opportunities to build affordable housing in Cambridge.”

Broadly speaking, the zoning help the Overlay offers to affordable housing developers would come by relaxing density controls (allowing more units per lot), reducing dimensional standards (smaller setbacks), and decreasing open space and parking requirements in all zoning districts to create permanently subsidized housing for people earning up to 100% of the Area Median Income (AMI). Height would be allowed to increase somewhat, up to four floors (45-50’) in lower scale areas and up to seven floors (80’) along commercial corridors (see comparison charts). For one person the 2019 maximum allowed income is $79,350, for a couple it is $90,650, and for a family of four it is $113,300; however 80% of the rental units would be reserved for those earning less than 80% AMI (or 50% below 80% AMI if the units are developed as limited-equity ownership). For perspective, my salary as a city councillor ($83,591 in FY20) is about 105% AMI.

So what’s all the fuss about, and why has this “modest proposal” driven crowds of people to attend public hearings wearing stickers to signal their pro or con stance on the Overlay? 

As with any zoning change, especially one as complex and far-reaching as the Overlay, it’s critical to dig into the details and look for ways that well-intentioned changes could have unintended consequences. Fine-tuning the language of any ordinance in response to public comment and meeting debates is normally the collective job of the Planning Board, the Council and the staff at the Community Development Department, but in the case of the Overlay that iterative process has not yet happened, in part because the ordinance was drafted by CDD staff working closely with the very affordable housing developers who stand to benefit from it, and largely without council or public participation in formulating the details. Thus far, any challenge to the assumptions underpinning the Overlay has been portrayed as a challenge to its high-minded social goals or an attempt to kill it through “death by a thousand cuts.” For some, the stock response to suggestions for modifications calls to mind: My Overlay, Right or Wrong. I hadn’t heard the expression “virtue signaling” until it was used to characterize why categorical support for the Overlay has become a moral measure of one’s willingness to be welcoming to more people who are income-eligible to live in subsidized housing. 

Supporters insist that the overall impact would be modest even if the proposed density multiples over the base zoning are quite significant, since the number of projects is limited by the availability of public funding that can be leveraged toward the creation of affordable housing (see detailed explanation). This fiscal year Cambridge increased its taxpayer funding for affordable housing to $20M, which would support about 100 units annually, an incremental gain of 40 over the 60 or so produced on average up to now. This number does not include the inclusionary affordable units that come at no cost to taxpayers through the production of larger market-rate residential developments. Over 1,000 inclusionary units have been created since 1998 when the requirement first went into effect (and the inclusionary set-aside was 11.5% net in exchange for a density bonus of 30%). In 2015 the Council set a goal of producing 1,000 affordable units by 2030, and that number was for all kinds of affordable housing (both inclusionary units and units created by affordable developers). That goal since has been changed to 1,000 units by affordable developers. That would be in addition to the pipeline of new market development that now is required to dedicate 20% of its gross floor area for inclusionary units, and is expected to yield another 2,500 affordable units by 2030. Consideration of offering an additional density bonus for an additional percentage of affordable units (the so-called “super inclusionary” program) seems to have been put on the back burner during the Overlay debate but could resurface.

The key difference with the Overlay, though, is that affordable developments currently must go through a more rigorous permitting and design review (often through the state’s 40B program) than the non-binding Planning Board review being proposed and, most significantly, 40B permits can be appealed if neighbors remain strongly enough opposed. Together with prohibitive land costs, which the Overlay seeks to overcome by greatly increasing the number of units allowed on sites in all districts, the potential for a legal challenge has tended to limit the sites where affordable developers have succeeded in creating new housing to those that already have denser multifamily or mixed use development.

The local debate about the Overlay is taking place at a time when, nationally, zoning itself is under intense scrutiny, especially zoning that prohibits multi-family housing (see NYT article on single-family zoning reform). Up-zoning areas close to good transit (subway and light rail) has been an urbanist-smart growth principle for many years, but today’s YIMBY-led campaign to abolish single-family zoning layers racial justice onto housing policy. The ugly 20th century legacy of redlining and the denial of mortgages to African Americans has compounded this century’s growing income inequality with stark wealth inequality for people of color. Add to that cuts to federal and state funding for subsidized housing, the growing concentration of economic opportunity for millenials in a handful of US cities, and the lack of investment in transit from suburban neighborhoods to these urban job centers, and we have a profound imbalance in the supply of housing where younger workers want to live and mounting generational conflict and resentment. Of course, these structural problems are hardly unique to Cambridge, nor are they problems that Cambridge can solve without regional cooperation in permitting more multi-family housing, increased public investment in transit, more federal and state funding for affordable housing, and changes to tax policy and college tuition financing (to name a few).

Compared to most cities and towns, Cambridge is very densely built-out in the majority of its relatively compact land area (6.39 square miles with an average of 27.1 persons per acre). We do not have neighborhood-exclusive public schools, but instead assign students based on the “controlled choice” model that attempts to balance K-8 enrollment citywide by socio-economic factors. We spend a sizable portion of our $200+ million school budget on transportation to try to achieve this balance across a dozen elementary schools. Yet even with this effort and one of the highest per pupil spending rates in the state, the racial achievement gap persists.

There are some neighborhoods zoned as single family (the Brattle St area, Avon Hill, Coolidge Hill, Larches and the Divinity School area) and where lot sizes are larger. Together, the single family areas (Res A-1 and A-2 zones) represent only 8% of the city’s total land area (363 of 4564 total acres). Measured as a percentage of units, single family housing accounts for 6.9% of the 49,564 dwellings citywide. The next most restrictively zoned area (Res B) allows two-family housing and accounts for 13.7% of land area (627 acres). Accessory dwelling units, originally known as in-law apartments, are allowed in both single- and two-family houses with a special permit. Other dimensional standards (setbacks, lot area per dwelling unit, and floor area ratio) can mean that some smaller lots in other zoning districts effectively can only accommodate a single unit of housing, but the majority of the city’s land allows multi-family housing and the majority of residents live in multifamily housing. Minneapolis and other cities with much larger percentages of the land zoned as single family are changing their zoning to allow duplexes or triplexes, and Cambridge could certainly follow suit. Two other zoning changes to consider are: increasing the allowed FAR from 0.5 to 0.6 in Res B (where it was before the last downzoning) and eliminating minimum parking requirements (which is not the same as eliminating all parking). Over time smaller incremental changes like these would gradually increase the supply of market-rate housing, but would not produce more affordable (subsidized) units.

However what Minneapolis did in eliminating single family zoning is a much less dramatic change than what is being proposed in the Overlay, which conceivably could allow 15-20 affordable units on a large lot that previously had a single-family house, regardless of whether the location was close to public transit or near a neighborhood business district. Overlay supporters say such high multiples are necessary to enable affordable developers to make competitive bids in high-cost areas and to keep the land costs below $200K per unit (total development costs are estimated at about $500K/unit, which some assert could be better spent building more units on less valuable land). Overlay opponents have described it as a “sledgehammer” approach that could potentially result in buildings greatly out of scale with the ones around them. They say that in aiming to streamline the development process so that it is less risky and more predictable for affordable developers, the Overlay shifts all the unpredictability and risk onto a property owner who bought their homes with an expectation that the zoning would not change so dramatically they could suddenly be living next door to a large apartment building — and would have no say in its design or any ability to appeal the permit.

Some have questioned whether the Overlay can withstand legal challenge since it potentially violates the uniformity principle of state zoning law that requires that zoning within a district must be consistent across all uses; affordable housing is not a different use than other types of housing. The prospect of a protracted legal challenge and the divisions it would deepen should give us all incentive to try to find a middle ground. I sincerely want Cambridge to pass a law that we can be proud of, not only because it makes national headlines for being groundbreaking, but because it demonstrates that a community can reach consensus in the most divisive debate issue the city has faced in a generation.

Read Part II of this post for my suggestions for changes to the Overlay.

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Jan Devereux
City Councillor
Cambridge, MA