By Erin Baldassari | The Cambridge Chronicle and Tab | November 28, 2012
As Baby Boomers age and the region continues to attract students and young professionals, the types of housing that renters and homeowners demand will change – and the pinch on housing in Cambridge will only tighten – according to a recent report on housing in the Greater Boston Area.
The report, by the Dukakis Center for Urban and Regional Policy at Northeastern University released Nov. 14, predicts the five-county region around Boston may need to double or triple its housing production to meet demand through 2020. Dukakis Center director and lead author of the report, Barry Bluestone, himself a Cambridge resident – said that the problem in Cambridge is particularly acute precisely because the city saw barely a blip in demand despite a housing crisis that crippled parts of the country.
“Home prices have fallen very little because of the tremendous demand for housing from young professionals and workers,” Bluestone said. “This is a hot market in real estate, even in a recession.”
According to the Cambridge Community Development Department, the median price for a one-bedroom apartment increased from around $1,400 to $2,000 a month from 2000 to 2011 – a 43 percent increase. For three-bedroom apartments, median rents increased from roughly $2,000 to $3,000, or 33 percent, in the same time period.
Across the region, slow housing production since 2005, a historically low vacancy rate (when compared to the national average), a strong and growing economy that is attracting new workers all conspire to drive up rents, the report argues.
While Bluestone admits that in Cambridge especially, rents and housing prices are not likely to decrease – barring natural or economic catastrophes – he argues that the rate of increase could be slowed if coupled with a commensurate increase in housing production.
“We can increase the amount of housing to the point where rents won’t come down, but they won’t rise as fast as they’ve been rising either,” Bluestone said.
Beyond building more housing across the board however, the report argues the region needs to build more of the kind of housing its changing population will want: “Fundamental structural changes in the age composition of the region’s population; in the income, wealth, and debt distribution of the region’s households; and in generational differences in consumer behavior will almost certainly alter the types of housing we will need over the next decade, as well as the places within the region where that housing will need to be located.”
Taller, denser, smarter.
Using demographic statistics from the Metropolitan Area Planning Council, Bluestone and his fellow researchers created projections to anticipate changes in demand. While the trends hold true for the entire region, some are already underway in Cambridge, which has seen a growth in population along with rising incomes, an aging Boomers’ population, and an influx of young professionals and workers.
What do young professionals have in common with aging Boomers? Both have shown a preference for alternative-living arrangements, including group homes and micro-unit developments, and living next to transit hubs, Bluestone said.
“Lots of Baby Boomers who fueled the suburban boom of the 60s and 70s are thinking about whether we want to keep their large five- or four-bedroom homes particularly as we age,” Bluestone said. “That will put tremendous pressure on the city for multi-family housing for seniors who want to age in place but not necessarily stay in the same home and are not ready for a nursing home.”
Cambridge Community Development Department (CDD) Housing Director Chris Cotter agrees. The recommendations are right in line with trends the city has also been studying both through its Kendall and Central Square Advisory Committees as part of the K2C2 Planning Study by consulting firm Goody Clancy and through its Silver Ribbon Committee, which is expected to release a report soon on the needs of the city’s swelling senior population.
Among the Central Square Advisory Committee’s draft recommendations, they call for eliminating barriers to so-called “micro-unit” apartments, or units that are between 250- and 500-square feet. The draft plans also call for heights up to 140 feet in Central Square and 160 feet at Lafayette Square Park with uses above 80 feet limited to housing only.
“The focus on denser communities and transit-oriented communities with people wanting to be in central cities – to me that’s reflected in a lot of what’s happened in Cambridge over the last few years, and that’s because Cambridge really is one of those types of communities,” Cotter said. “We’ve heard from a lot of people who are looking for different housing models, and it’s a discussion that’s happening in a lot of communities. If you look at the demographics, this is the right time to be talking about that.”
Who lives where?
But who exactly is going to live in those apartments and where is a concern of Bill Cunningham, an affordable housing advocate and representative of Newtowne Court residents on ACT’s 38-person board.
For Cunningham, the only way to control rising housing costs is rent control.
“You can’t control rising prices without putting a ceiling on costs,” Cunningham said. “The more subsidies you give, the higher the floor goes.”
Cambridge had rent control in place from the 1970s until 1994, when a state referendum eliminated the power of municipalities to keep the controls in place. Affordable housing advocates have argued that since then, Cambridge has lost its middle class because families can no longer afford to stay in town.
In a recent survey by CDD, Cotter said over 90 percent of middle-income families – defined as 80-100 percent of area median income or roughly $78,240-$117,360 in annual income for a family of four – cannot afford a three-bedroom home in Cambridge.
With federal and state subsidies dwindling, the report recognizes a decrease of over 50 percent of American Reinvestment and Recovery Act funds, along with a steady decline in state funds – meaning money to support affordable housing is coming from a shrinking pool. Middle-income housing rarely qualifies for federal or state assistance, which often caps qualification at 80 percent area median income, making that target all the more difficult to hit.
The solution Cotter sees however is a provision already in the city’s zoning called the Inclusionary Zoning Ordinance. Passed in 1998, the ordinance has helped create more than 450 units of affordable rental and ownership housing as new developments have cropped up across the city, according to CDD’s website.
The ordinance applies to new residential developments or buildings converted to residential use, which will create 10 or more new housing units or over 10,000 square feet of residential space and requires that 15 percent of the base units in the building be affordable.
“The clearest way to incent middle-income housing is to do it across the board so you have that there in the zoning and you’re ensuring that the offer for additional density is there for everyone to consider and take advantage of,” Cotter said.
The Central Square Advisory Committee is looking into offering density bonuses beyond what is allowed in the inclusionary zoning ordinance so long as “at least 20 percent of the bonus floor area approved be devoted permanently to middle-income housing.”
In addition, the committee is now considering a recommendation that would make the sale of the city’s parking lots contingent upon the creation of middle-income housing by prioritizing the sale to non-profit affordable housing developers, or requiring that at least 20 percent of all units developed under the allowed base density be permanently designed as middle-income units.
But Cunningham fears that won’t be enough to stop the atrophy of low- and middle-income families from leaving Cambridge. A small minority of units are built within each development as part of the inclusionary zoning ordinance, but the provision itself does little to preserve the affordable and middle-income housing that exists now in Cambridge.
“Building more housing is only part of it, the other part is the preservation of the affordable and middle-income housing that we have,” Cunningham said. “We have to start thinking of how to protect the residents who live here instead of building for people who have yet to even come to Cambridge.”
The Kendall Square Advisory Committee’s recommendations on housing in Kendall Square are now being vetted in the Planning Board. The Central Square Advisory Committee’s recommendations are scheduled to be finalized over two meetings this week.