SCC Board Letter on Proposed Inclusionary Zoning Waiver

May 18, 2017
SCC Board Letter on Proposed Inclusionary Zoning Waiver

Members of the Planning Board, 

5-18-17 – We are submitting this letter for the record in the case of Federal Realty Investment Trust’s request for a waiver of the 20% Inclusionary Housing requirement for its proposed 500-unit development that is the next phase of FRIT’s approved Planned Unit Development for Assembly Square.

As you know, the Somerville Community Corporation was the principal sponsor of the ordinance to increase Somerville’s Inclusionary Housing requirement to 20%, an ordinance change passed in 2016. The question of a waiver for the remaining housing for FRIT’s PUD was raised then, and is now formally requested by the Planning Board now. We were opposed to granting that waiver then and we remain opposed now. We believe that FRIT can and should meet the 20% affordability requirement, as passed in the 2016 ordinance change.

On Tuesday evening we learned that the developer continues to seek a waiver from the 20% requirement that now applies to all other projects in the city, but has proposed an added wrinkle to their request: The developer now requests to construct only half the 12.5% affordable units on site, justified only through a hasty and vague plan to fund additional units off site.

While we remain committed that the 20% inclusionary standard should be upheld, we understand the logic of seeking alternative solutions. However, we see three major – and precedent-setting – elements contained within the new waiver proposal submitted on Tuesday May 16:

  1. The proposal begins at the 12.5 Inclusionary Housing baseline, and reduces the on-site requirement in half, to 6.25%. To the best of our knowledge, this would be the first granting of a reduction in the on-site requirement by the Planning Board for any project and, in this case, it would be for the largest single housing development in Somerville since the Clarendon Hill Towers were built 50 years ago.
  2. We understand that the proposed $10.3 million payout for the off-site units is not based on the City’s ordinance formulas due to the recent discovery of problems with the formulas. Instead the payout is based on a proposal from FRIT that resulted in the consideration of the 100 Homes Initiative for the securing of alternative affordable units throughout Somerville’s neighborhoods. Whatever flaws exist in the formula need to be corrected so the Planning Board and the community can have a true calculation of the cost to provide off-site units through the Inclusionary program, against which alternatives such as 100 Homes can be compared. Again, there is no precedent for the Planning Board being asked to approve an off-site calculation as part of the permitting process and, as large as the $10.3 million figure is, it is very hard to know whether that figure is the right one, or even close.
  3. The alternative proposal indicates that the $10.3 million would result in 17 affordable units more than would be required in a 12.5% inclusionary calculation, by utilizing those funds through the 100 Homes program, operated by SCC in collaboration with the City of Somerville. SCC is pleased to collaborate in supplying the financial data from the 100 Homes program to the City, and we stand by the numbers we provided and that are accurately reflected in the proposal. However, we know well that 100 Homes can produce more affordable units with these dollars largely because the program acquires existing housing in Somerville rather than constructing new units of housing. We also should be clear that the numbers provided for 100 Homes represent today’s borrowing interest rates and acquisition costs, which could certainly increase.

We believe that each of the points we raise regarding the alternative proposal in front of you merits extensive and deliberative discussion – discussion that has not yet taken place in Somerville by the Planning Board, Board of Aldermen, or in the community-at-large. We stand ready and willing to participate fully in such discussions.

We continue to ask the Planning Board to reject FRIT’s waiver request and enforce the 20% Inclusionary Housing requirement on FRIT’s proposed new housing development. From that starting point, we would welcome and be interested in discussions about creative new ways to think about and meet Somerville’s affordable housing challenges and requirements. If the Planning Board chooses to examine the alternative proposal now in front of you, we respectfully request that you continue the matter so that the considerations we’ve raised, as well as others that the Planning Board and others may have, can be more fully vetted before the Planning Board renders its decision.

Sincerely,

Van Hardy, President
For the Somerville Community Corporation Board of Directors