Statement on Affordable Housing for FY24 Budget Hearing

(Sent on December 11, 2022 in preparation for a Dec 15 hearing.)

Dear City Councilors and City Manager,

Every year, resident surveys reiterate that housing affordability is the #1 issue facing Cambridge. The waitlist for CHA affordable housing is over 20,000 names long. Over half of Cambridge renters - i.e. at least 40,000 people - are rent-burdened, meaning they spend more than 30% of income on market-rate rents. 

At the current pace of only a hundred or so new affordable homes per year, Cambridge is not on track to meet Envision Cambridge’s affordable housing production goals, let alone our full affordable housing needs.* And while the 20% Inclusionary Zoning program does contribute to the pace of affordable housing development, it does not produce deeply affordable housing. Deeper affordability requires state, federal, and local subsidies, which the Affordable Housing Trust helps catalyze.

Thank you to both the City Council and to the new City Manager for your commitment to a transparent, inclusive FY24 budget process. An organization’s budget is a reflection of its priorities. By putting the Affordable Housing Trust on a more stable and substantial funding stream, you have the opportunity to bring the city’s priorities in line with the priorities and needs of Cambridge residents. Previous administrations have funded affordable housing in an ad-hoc manner, making long-term planning more difficult and impeding the speedy and proactive acquisition of developable sites. Going forward, the city should commit to a clear and predictable framework for affordable housing spending. For instance, if the general practice were to allocate 10% of the city’s Operating Budget for affordable housing each year, the resulting $80M in FY23 could potentially have facilitated on the order of 400 new affordable homes in that year alone.

It will also be important to make sure that each dollar can create as much affordable housing as possible. Currently, the Trust tends to only fund opportunities which cost less than $200K per unit to the city (total costs are always much higher than $200K/unit, but much of the funding comes from external sources like state and federal agencies). Thanks to a number of factors including the spike in industry-wide construction costs, stronger environmental standards, limited tax-credit availability, and the growing price of land in Cambridge, it may be hard to stay within that limit going forward, especially for desegregation and diversification opportunities in more affluent neighborhoods, unless further steps are taken such as zoning changes to allow greater densities on a wider variety of sites.

At the end of the day, the primary way you can ensure that those most hurt by our housing shortage have access to affordable housing is to make it a budget priority.

Thank you,

The A Better Cambridge Board

*The Envision Cambridge goal was 12,500 new homes by 2030, 25% of which are affordable, meaning ~288 new affordable homes per year. According to the Cambridge Development Log, from 2019-2021 we believe the city has averaged only 122 affordable homes - including both new and renovated units - per year.