Cambridge boosts citywide inclusionary zoning requirement to 20%

Cambridge may be the first municipality in Massachusetts to require that 20 percent of large housing developments citywide be designated as affordable.

The City Council voted on April 3 to increase its inclusionary zoning requirement from 15 percent to 20 percent beginning on June 20, the first time the city’s inclusionary zoning provisions have been amended since they were adopted in 1998. The requirements apply to buildings with 10 or more units.

The new requirements place an emphasis on opportunities to create more family-sized affordable units, rather than just studios and one-bedroom units. Compliance is based on the percentage of affordable housing floor area within a development, rather than the number of affordable units, so developers may choose to include more family-sized units. Developments of 50,0000 square feet or larger are required to set aside at least 20 percent of the affordable floor area to units with at least three bedrooms.

Iram Farooq, assistant city manager for community development, said the City Council has been committed to the idea, as has the administration and the community as a whole.

“Whenever we do our biennial survey of residents, it always comes up when we ask people what their priorities are for Cambridge,” Farooq said. “For a while now, housing affordability has been one of the top priorities, and for the last seven years it’s definitely been the very top – the most important issue in Cambridge.”

The administration commissioned a study, completed in April 2016 by David Paul Rosen and Associates, that analyzed socio-economic diversity, demographics and the housing market, while undertaking an economic feasibility analysis of inclusionary housing standards. The study showed that more than one-third of Cambridge households are paying at least 30 percent of their total household income for housing, and one out of five households is paying at least 50 percent of its income for housing.

Farooq said the study was key in making the argument for a higher inclusionary zoning requirement, particularly when facing pushback from the development community.

She said the study “also analyzes the implications for lenders, so we weren’t creating a situation where it’s infeasible to develop.”

The amended zoning code also changes when a density bonus on the books is applied. Previously, the inclusionary zoning requirement was calculated before applying a density bonus of 30 percent, which used to net out to about 11 to 12 percent, Farooq said. Now, the density bonus will be applied before the inclusionary zoning requirement is calculated, ensuring that each project hits that 20 percent target.

The affordability ranges have also changed. Previously, both rental and homeownership affordability were defined by the same income guidelines. Now, affordability for homeownership will be defined as 100 percent of the area median income, while for rental units, it will target households with 50 to 80 percent of the area median income.

“We think of the spectrum as low- and moderate-income households … but we wanted to start to get into the middle-income range a little bit, particularly for homeownership,” Farooq said. “When you think about the continuum of housing, moving from, say, homeless, to public housing, to inclusionary housing, and then start to think about purchasing a home, it would be great to be able to support that and move that ladder. That’s really the goal here, is to start to have some impact on the middle.”

The new inclusionary zoning code also requires the administration to provide an annual report on the requirement to the City Council, and to undertake an analysis every five years to gauge how it’s working.