Affordable Housing Overlay Deconstructed (Part III) (10 Responses)

No Butt to Bite (But It May Come Back to Bite Us)

On the evening of Tuesday, July 9th, the Planning Board met for the second time on the 100% Affordable Housing Overlay (AHO), and they failed to reach a consensus on how to guide the City Council in our continued deliberations on the petition. At the end of the four-hour hearing, the Chair (Catherine Preston Connolly) agreed to work with the CDD staff member who drafted the petition to summarize the Board’s areas of agreement and disagreement and to list their questions. (Listen to the recording of the meeting’s audio; the AHO discussion starts about 45 minutes in.)

The next Ordinance Committee meeting on the AHO has been scheduled for August 1st, and thus it appears that our deliberations will continue without clear guidance from the Planning Board. With the September 23rd deadline to take a vote before the petition expires fast approaching, the whole process is, in my opinion, a train wreck that no one seems willing or able to stop. 

Guided by the Chair, the Board focused on three broad questions: whether approval should be as-of-right, whether the AHO should be citywide, and whether it should have a sunset provisions. But they did not dig deep into the zoning details. One Planning Board member (Lou Bacci) came to the meeting with two pages of questions. The former Chair (Ted Cohen, a real estate attorney) said the petition was too wordy and repetitive, and he cited about 16 sections in the text that he called confusing or contradictory. There was no indication that the text will be substantially rewritten by staff before the next Ordinance Committee hearing. The process of offering and voting amendments on the committee floor is cumbersome — like nine film editors working on the same reel from nine different scripts. It’s not an efficient way to make meaningful changes to important legislation. And rather than working to refine the details, supporters caution about “letting the best be the enemy of the good” and insist on rushing the legislative process to conclusion.

If any developer had submitted a zoning petition that was so far from ready for ordination at this point in the process, we would advise them to withdraw it and substantially re-work and re-file it. This happens all the time; in fact it is rare that any zoning petition, particularly one as complex and unprecedented as the AHO, passes intact on the first go-round. Yet those who drafted this petition and its most vocal supporters have indicated it is not even an option to withdraw and re-file it. 

But it is an option for me, and withdrawing the petition is what I suggest be done before we chew up any more of our own and the public’s precious time trying to “make a silk purse out of a sow’s ear” to use an expression of my late mother’s. 

The fundamental and irreconcilable flaw is that the AHO is entirely premised on allowing affordable housing developers greater density as-of-right by changing the base zoning for subsidized housing, and without requiring AHO applications to undergo Planning Board review, as large special permit projects (over 20,000 or 50,000 sf depending on the district) would be under Article 19. We have been told that at least 20 units is the sweet spot for affordable developers in terms of lining up financing, so it seems likely that AHO buildings will be comparable in size and impact to some special permit projects. And they could be in residential neighborhoods where Article 19 projects are not allowed because of their size.

The AHO would create an entirely new class of non-conforming buildings citywide, when simply restoring residential zoning to where it was before the last citywide downzoning could create far more new housing in the stroke of a pen. In fact, this lack of zoning uniformity for the housing use category based solely on whether the residents qualify for public subsidies may not even be legal under state housing law, and is likely to prompt legal challenge; the Council asked the City Solicitor for an opinion on this question at the July 2nd Ordinance Committee hearing.

The AHO relaxes conventional density controls and offers form-based zoning as a check to assure site and contextual compatibility, yet it offers next-to-no guidance on what constitutes a good design or appropriate urban form for each context, and it absolves the developer of any accountability to respond to community comments and/or a binding design review. The only assurance we are given is that since the AHO projects would be funded by (mortgaged to) the City’s Affordable Housing Trust, the CDD staff would retain some leverage. But even that has not always proven sufficient in the current system. Planning Board members and numerous people involved in the most recent 40B process for the 40-unit Frost Terrace development have noted that a very weak design was presented to the Planning Board having already received CDD’s blessing. The Planning Board made suggestions that all parties agreed improved the design, and this came at the very end of a year-long community involvement process that happened because the developer wanted to reduce the risk of the project being appealed. All of the examples of good design for affordable buildings that are held up as assurance that the Trust’s design choices can be trusted went through a permitting process with at least some teeth. In the most memorable line of the July 9th meeting, Planning Board member Steve Cohen, a developer himself, quipped that in the AHO’s permissive framework, “There’s no butt to bite!” (I’ll refer to him as “SCohen” from now on to differentiate him from the Planning Board’s other Cohen, Ted.)

During the meeting SCohen and others cited many ways the AHO could come back to bite us without strong design guidelines and review and greater sensitivity to context. They challenged the assumption that AHO projects would only be done by three local developers funded by the Trust because that’s the way it has always worked up to now. They raised the possibility that a less stringent set of standards and by-right zoning could invite others into the market. For example (my own), there could be investors working under HUD’s new Opportunity Zone tax credit program eager to build AHO developments in Cambridge (two census tracts were designated for the program). Further, as relates to funding decisions, the Trust includes members whose organizations receive funding, a conflict that might raise eyebrows in other situations. Of course, they recuse themselves when their own projects are considered for funding, but might not eyebrows be raised if the Trust was perceived as trying to keep new competitors from sharing its limited funding pool? How would those decisions be made if the applicants included non-local developers? Can having a proven track record in our community legally be made a prerequisite for receiving the Trust’s funding?

SCohen’s fear that a new group of developers could enter and run amok prompted an attempt by the Chair to shut him down, but another member (Mary Flynn) agreed with his concern and wanted binding Planning Board design review to remain for projects over a certain size, an idea first suggested by Hugh Russell, who worried about the potential for buildings to be “incongruous.” “It’s scary,” he said in reference to the lack of design guidelines and controls.

Planning Board member Bacci described the AHO as a “unicorn” and asked why we would give an “experiment” less oversight. “It’s worrisome,” he said. SCohen asked over and over why the Planning Board would “voluntarily abdicate its responsibility” to ensure good design and to balance competing interests while venturing into the AHO’s “terra incognita.” Flynn also used the term “experiment” in stressing the need for a sunset provision and flexibility and discretion within the ordinance itself to modify the requirements along the way. “It’s not that easy to change zoning,” she said.

The references to “balance” and “judgment” were where SCohen’s comments were most compelling to me. To paraphrase him: “I feel very strongly about design. That’s something that this board has most to contribute to construction and development in the city. Why would we abdicate that responsibility? It would be a mistake for the city…. Affordable developers advocate for housing — that’s their job. We (the Planning Board) are not advocates. Our job is to listen to all of the advocates’ interests and to balance them. There aren’t any rules you can write about how to balance interests. But you put together a group of people with different backgrounds and skills–legal, design, construction, real estate development–like we have here, and we come up with what we believe to be an appropriate balance. This isn’t a simplistic process. There aren’t any illegitimate issues. They are all legitimate but they aren’t consistent. Our job is to weigh and balance them. We are the only entity that is intended and qualified to do that. For me, the primary issue is that there needs to be an appropriate body that reviews these applications and balances all of those inconsistent interests. It doesn’t have to be the Planning Board, but I’m not really sure what other entity is well-suited or qualified, so for now I’m nominating us…. Certainly the use may be as-of-right, but every site is unique and every neighborhood has different patterns of development. In one place maybe a 5’ setback would be appropriate but not on another lot or in another neighborhood. Trying to come up with one rule that applies to all disparate circumstances is not likely to come up with good outcomes that work fairly for all situations and neighborhoods. I hate to say it, but it takes judgment. This isn’t arithmetic where you just put the numbers together and you come up with an answer that no one can dispute…. The Planning Board should have the discretion to review to apply different setbacks and dimensional rules as appropriate to the site…. Rules that would apply to a proposal on Mass Ave or any of the major corridors might not be the same rules that are appropriate deep in a residential neighborhood. It might be easier, less work and more simplistic to come up with a set of rules that apply universally…but I do think we need general distinctions between commercial corridors and deep in a residential neighborhood…. In terms of considering a sunset clause, we’re not entirely sure how this thing is going to play out. Initially, we need a built in mechanism to revisit and formally review these rules at some point, maybe a year or two years. In terms of when the policy could actually sunset, we can’t be sure of when it has reached its goals, because we haven’t really discussed any goals for housing production other than the general goal of ‘let’s do more affordable housing.’ We should talk about what is our goal, what is the percentage or the number of affordable units that we’re looking for. In some neighborhoods, 35% of units are already affordable housing, and at the other extreme we have West Cambridge where it is only 1.3% of the units. One goal number for the whole city may not be appropriate, so if we want to spread this good civic duty of affordable housing around, we should talk about an appropriate strategy for doing that. All of this takes more thinking and discussion, and it might take a little longer than ‘yeah, this is a great idea, let’s do it.’ There are many other questions and issues we should discuss. We need a sunset clause that says sunset comes when we achieve the goal. So, how do we define the goals?” (You can listen to the bulk of his comments starting at the 1 hour-16 minute-34 second mark in the recording of the meeting.)

His caution against being “advocates” seemed directed at the two new associate Board members who each used their comments to talk about the affordable housing crisis, sounding to me like candidates for City Council. Neither offered substantive comments about the zoning language before the Board. One suggested the comments of about a dozen stalwart members of the public who waited three hours to speak for three minutes each were unrepresentative because other “marginalized people” don’t have time to attend public meetings. True, but the people who do attend and who stay until the bitter end often know something worth hearing about zoning, real estate markets, history, and design, and it is the Planning Board’s responsibility not only to hear them, but to listen.

Here’s another way the AHO could come back to bite us that has not been mentioned: there is nothing to prevent a developer from using 40B to apply for variances (known as “waivers” in 40B parlance) to go beyond the base zoning once it has been upzoned for any 100% affordable project through the AHO. And if market values continue to rise and the additional density allowed through the AHO is no longer sufficient for affordable developers to remain competitive, a developer could seek to remedy that by reverting to 40B and applying for waivers to further increase density. The BZA, which grants comprehensive permits for 40B projects, already has shown that it is predisposed toward approving 40B projects without conditions, even though Cambridge qualifies for “safe harbor” protection because we meet the 10% threshold (almost 15% of our housing stock is affordable). Safe harbor communities can impose conditions on 40B permits, and if the developer appeals to the state’s Housing Appeals Committee the BZA’s decision typically would be upheld unless it made the project “uneconomic” (that is, if the developer could show on a pro-forma that the project would no longer pencil out with the conditions imposed). A few years from now a developer could assert that the waivers are essential to counter higher market values than the AHO zoning anticipated. 

This is a hypothetical scenario, but the point is no one knows how the AHO could play out, as several of the Planning Board members stressed. Yet some AHO supporters seem very willing to risk unintended consequences and the backlash bad outcomes could provoke in the interest of having more certainty that developers will be able to produce about 100 units of affordable housing annually for the City’s $20 million annual commitment. About 60 units are being produced on average now, and it is the additional city funding (up to $20M from around $13M) that may be more decisive in increasing the yield by an estimated 40 units than passing the AHO, as currently drafted. The yield is a drop in the bucket compared to what could be produced with a comprehensive housing production plan and zoning that identifies sites, both public and private, where much larger amounts of housing could be built at less cost to taxpayers and without dividing the community as deeply as this proposal has. I believe the AHO will continue to sow distrust unless a serious effort is made to revise it to address these quality-control concerns. 

But we don’t have that housing plan or that consensus because most of this Council term has been eaten up debating a half-baked proposal that nibbles around the margins of a giant need. And that bites.

To reiterate some of the suggestions for improving the AHO that I made in my last post:

  1. Amend the Tree Protection Ordinance immediately so that affordable housing developments are no longer exempt from the Tree Protection Ordinance.
  2. Add a sunset provision and require annual progress reports to the Council. Most of the Planning Board members supported a sunset provision. A thousand units by 2030 is the goal that set this in motion; make that the target number to reach and don’t move the goalpost until it is reached. Then sunset the AHO and re-evaluate.
  3. Restore some control on density (FAR) so that AHO projects, especially those on large lots or on combined parcels, are not dramatically out of scale with their context. This is critical on smaller side streets in low-scale residential areas.
  4. Require separate structures for AHO developments over a certain size to break up massing, consistent with the neighborhood context.
  5. Increase the transitional buffers and step-down heights between taller AHO projects and small residential buildings.
  6. Clarify the requirements for units created below grade (especially if the first story starts at 4’ above grade, a measure that many have found confusing) and do not allow below-grade units to extend under the setbacks.
  7. Add protections for tenants earning up to 110% AMI who are displaced by AHO developments.
  8. Set a goal for producing a percentage of units for home ownership.
  9. Require minimum side and rear setbacks from existing abutting residential structures, not only from the property lines.
  10. Establish priorities in AHO lotteries for current Cambridge residents to the full legal extent permitted by funders. Seek Council input over how tenanting priorities are set and how the wait lists are managed.
  11. Require all AHO developers to submit a pro-forma for public review and limit profit to no more than the return allowed under 40B.
  12. If parking is to be reduced or even eliminated for proximity to transit, then measure the distance to transit (a subway entrance) by the walking route’s distance, not as the crow flies, and be cautious in considering bus lines as reliable transit, since bus frequency and stops are not under our direct control.

This is Part III of a series.

Read Part I here.

Read Part II here.

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    Jan Devereux
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