Committee Report #2 – Feb 24, 2020

The Ordinance Committee will meet on Wed, Feb 12, 2020 at 5:30pm for a hearing on an order to amend section 11.202(b) of the zoning ordinance.

Called to Order at 5:30pm

Present: Carlone, Mallon, McGovern, Nolan, Siddiqui, Zondervan, Simmons (late), Sobrinho-Wheeler (late)

Councillor Marc McGovern 00:14
Good evening, everyone. A quorum of the Ordinance committee being present. I call tonight's meeting to order. The call of the meeting: The ordinance committee will meet for a hearing on an order to amend section 11.202 B of the zoning ordinance. We are being audio, and I believe we're on TV, audio and video recorded. Thank you everyone for being here. Real quickly, we're joined by my co-chair on the Ordinance committee Councillor Carlone, Mayor Siddiqui, Vice Mayor Mallon, Councillor Nolan, Councillor Zondervan and Councillor Sobrinho-Wheeler.

Councillor Marc McGovern 01:02
Just to sort of, sort of frame this a little bit this is a... this meeting is coming from a policy order that was filed. Councillor Zondervan was the lead, the lead sponsor to raise the current linkage fee to $19 and, and 10 cents per square foot. This is not the end of this conversation. We, when we heard from CDD previously, there is still a process that we need to go through to address the, the report itself and sort of where we're going to end up based on that report. But during that conversation, it became clear that we could take this interim step of raising the fee by a couple dollars, while we are moving forward and doing that other work. So, I don't want anyone to think that this is the end of this conversation. In fact, that is actually just the beginning of this conversation. And this is something that we felt that we could do quickly to try and generate more funds while this slightly longer process is going on. So, I don't want folks to, you know, to feel that this is the end game here. We are going to hear from the city that they're going to do a quick presentation on the Nexus study, sort of in general, just to frame kind of where we are, but then, and then we will move on to questions, comments and public comment. So, with that, Ms. Farooq, you got, you got the mic.

Iram Farooq, Assistant City Manager for Community Development 02:50
Thank, thank you, Mr. Chair.

Iram Farooq, Assistant City Manager for Community Development 02:53
I just wanted to mention that today, we have our housing team who worked on the Nexus study. Chris Cotter, Housing Director, and in Linda Prosnitz, who is our Housing Planner, managing the process we thought it would be helpful opportunity for the council to hear from our consultant, Karl Seidman as well, just to, to be able to expound a little bit on what are the... what was the process and the findings of the study. Of course, we have Jeff Roberts and Arthur Goldberg from the Law department as well. And last night, the planning board had their hearing on this, this zoning petition and made a positive recommendation on it with the further invocation to the council to think about the... whatever was the highest possible amount that could be ultimately established, because they did feel like an increase was good. They felt that this was probably the small increase, and particularly, particularly given that it doesn't include the $1 a year escalator that is recommended by the study. So, I'll leave it at that. Give it over to...

Councillor Marc McGovern 04:14
Let me interrupt for just one... just so because you know the call... And what we're amending is specific to the $19 and 10 cents. So just for my colleagues to when, when we hear this, we're really, I'm hoping that we don't get into a real in-depth conversation about the Nexus study specifically, because that's not really what the call of the meeting is. That and I want to make sure we stick to the call. So, Councillor Nolan.

Councillor Patricia Nolan 04:15
Thank you just a point of information to repeat I believe what you said early, which is there will be relatively soon at another meeting of the Committee on the Nexus study, which means that conversation will happen and it can be full-fledged and comprehensive This, therefore will be limited and can be limited to this without any. Okay.

Councillor Marc McGovern 05:04
Correct. Yes, I also, you know, if we didn't... if we wanted to have the conversation and what the whole next study it would have been advertised that way. We might have had more people, I think it's important that we, you know, stick to the call as the call is. So, but it is also important to understand the big picture as to why we're taking this interim step. But I just in terms of questions, let's try to keep the questions to the $19 and 10 cents and not get too deep in the weeds of the report since that's not what the call is.

Iram Farooq, Assistant City Manager for Community Development 05:32
So, in the interest of time, then maybe we just get Carl Seidman to do the presentation and then kick off the conference discussion if that's the will of the council. Thank you.

Councillor Marc McGovern 05:42
Sounds good.

Karl F. Seidman, Consultant 05:59
Thank you, city council members. I'll try and be quick, I realize you don't want to get into the full details of the study. But, you know, I know you're all familiar with the incentives zoning ordinance, established in 1988, amended in 2015 currently has a fee of $17 and 10 cents per square foot on all non-residential development over 30,000 square feet. You're also probably familiar with the 2015 Amendment, which raised the fee significantly and also expanded the application of the housing contributions to you know, all non-residential development essentially not tied to specific special permits. And just to show you the impact of those amendments, they have significantly increased the revenue. It's projected to bring in over $5.7 million a year over the next five years compared to, you know, something on the order of 5% of that in prior years. So, it has had the desired impact. In terms of this particular study. We analyze development and employment trends and impact since that's ultimately what's generating the impacts. The contribution is designed to address, looked at an option for job contributions and then made recommendations on a new contribution rates and policy changes. Just to quickly give you an overview of the recommendations, recommending to raise the current housing contribution rate by $6 through a $2 increase in an additional dollar increments, maintain a single city wide rate but also change the time period for the policy review from three years to five years since that seems to be two shorter time period to really observe impacts, and also recommending that in lieu of the jobs contribution, you might look to meet the housing, the job training needs through other funding sources that could come into play more quickly.

Karl F. Seidman, Consultant 08:24
So, I won't go into this. It's in the report, there's a very prescribed methodology that was used to estimate the impact of new development on affordable housing demand and the acquired subsidy. And just to summarize some of the key points. we're estimating that development over the next 10 years will be on the level of 5.8 million square feet and generate almost 15,000 jobs. And these jobs will create a demand for 722 units of new affordable housing across low income, moderate and middle income. And then working with the city staff, we made a number of assumptions about how that would break down between low income, moderate income, middle income ownership and rental units. And that's way down in this chart and in the report. And then, based on that need for housing, we estimated the required subsidy. So, to build the necessary rental housing, it would cost $284 million. The actual income that residents could contribute will only provide a little less than $43 million of capital to pay for those costs. So, there's a need for subsidy of $240 million to build 471 rental units. On the ownership side, the building the 251 ownership units would cost $157 million. The income that buyers could provide would cover $75 million of that so there'd be a required subsidy of a little more than $92 million. So, we add those together, we have a total development subsidy that's needed of $322.8 million. When we divide that by the expected level of new development, we get into a required subsidy per square foot $55 and 27 cents. However, we made some adjustment to that to reflect the fact that the Affordable Housing Trust has typically not covered the full subsidy. Other sources of funding of help pay for affordable housing. So based on recent experience, we apply Housing Trust Fund providing 43% of the subsidy for rental projects for low- and moderate-income residents. 73% of the subsidy for middle income rental and 100% of the subsidy for ownership housing.

Karl F. Seidman, Consultant 11:15
So, based on those figures and the ability to bring in another subsidy, we came to a final conclusion that housing contribution fee could be $33 and 34 cents. Let me talk briefly now about the job contribution. Since this is a new policy area, I just wanted to talk about the sort of rational Nexus for having a job contribution. And the basic logic here is that new development will create employment opportunities for Cambridge residents. But many residents may not be able to access those opportunities without education and training services and there may similar to housing the funding gap to provide those services and if there's a funding gap, then a job contribution is warranted. So, since the city doesn't currently have a policy of resident employment for new development, we sort of looked at this across a range of goals, from 10% to 50% of the new jobs at these development projects going to city residents. And we focused really on the jobs that would be accessible to lower moderate-income residents, the low and middle skill jobs as opposed to jobs that require a college education and pay a higher wage. So, we estimated that at 5900, low and middle skill jobs over 10 years that sort of represents the training demand. If your resident goal is 10%, you want to train 593 people for those jobs at 40%. You're going to train 2373 people for jobs. So that's sort of the demand side of occupational training. And then we looked at the supply side from all these providers who provide training to Cambridge residents and how many Cambridge residents do they train during the year. And that indicated that the current training system is training somewhere between 1080 and 1300 Cambridge residents over a 10-year period, and that's so that's the supply side of the equation. We also looked at the potential need or gap for funding for adult basic education and ESLL. And our conclusion there was that existing services are essentially meeting that need, we don't need to provide additional funding for that. So the final figures we came up with when we compare the demand with the existing supply, there is a funding gap once you get to a policy goal of employing 30% of Cambridge residents in the new jobs, and the amount of funding you need would be about between $4.7 million and $8.8 million dependent upon the goal and the level of supply. So that would translate into a housing contribution fee of between 82 cents and $1 and 51 cents.

Karl F. Seidman, Consultant 14:32
So, I'd say we also did work in a number of policy options such as changing the size threshold, varying the contribution rate, or use varying the contribution rate by geography. I think ultimately, the recommendation was to sort of stay with the existing policy environment. There are not many projects under the 30,000 square foot size threshold so there's not much impact in changing that. While impacts vary by use, the administrative complexity and the difficulty of knowing for sure how changes might, how uses might change over time argue for keeping a uniform rate by use. And there is a big difference between rents in West Cambridge and East Cambridge. But there was some concern of creating a sort of boundary where fees will be different, could have unintended consequences in terms of development. So, in terms of some context for setting your fee, this table summarizes that the fees and in other cities locally, Cambridge has the highest fee by a significant margin. It's still lower, at some level to places like Seattle and San Francisco, which on some level, you might think of as, as competitive cities to Cambridge for some of the industry's you're attracting. And then lastly, we gave some consideration to what impact the $33 and 34 cent fee could have on Cambridge's desirability, competitiveness as a location. And it would have an impact on commercial rents, increasing them by some... between two and a half to 4.3%. If the fee was paid totally by developers’ equity and not passed on to tenants, it could reduce returns by as much as 100 basis points. And I think the other consideration for Cambridge is you have, certainly East Cambridge has the highest rents in the region. And a large increase in the fee, you know, will further potentially impact those rents and, and make you know, Boston or some of your other locations particularly more attractive, and I think West Cambridge in particular, that could be a concern since your rents are considerably higher than some of the competing suburbs. So, I think these factors led me to recommend a final fee that's less than the 33, 34. And to come up with a fee that, you know, in the mid-20s, that would be implemented over time so that it's predictable and developers could plan for it. So, I'll stop there. I went through that quickly. I know, this really isn't the focus of your meeting.

Councillor Marc McGovern 17:32
Thank you. Way to summarize 100-page report in 15 minutes. So again, the call of this meeting is really about this interim increase to $19 and 10 cents. That was a policy order that was... Councillor Zondervan was the lead sponsor. I will... Councillor Zondervan do you want to talk about that order and why you filed?

Councillor Quinton Zondervan 17:59
Thank you, Mr. Chair and thank you for the presentation. So essentially, we reconstructed the timeline a little bit. Mayor Siddiqui in February 2018 filed a policy order requesting a timeline for this study that we just saw. And in March, we were told that it would be completed... would be initiated fall of 2018 and will take about six to eight months and ultimately, it was not delivered until December 2019. So, at that time in December, when we received the report, there had not been an update to the linkage fee other than the CPI adjustment since September 2018. So, we introduced this petition to... based on the recommendations, immediately increase it by $2. Just as recommended in the report. And so that petition is in front of us now. There's clearly appetite, I think in the community and on this council to increase it even further. And even in this report, that's noted. And personally, I would prefer that we go at least to the $34, if not, all the way to the $55 or higher. You know, it's, I mean, I appreciate this analysis and this report, but I don't think it really accounts for the full impact of commercial development in terms of gentrification and displacement that it causes in our city. So, it's really important that we get this right and that we mitigate those impacts. So that will take us some time to process this report and figure out what the right answer is. And so, the intent of this petition was to just very quickly increase it by a fairly non-controversial amount of $2, which would generate hundreds of thousands of dollars for affordable housing construction projects while we deliberate and the ultimate fee schedule. I do want to touch briefly on the planning board hearing last night, because the... first of all, there's different language that I think CDD proposed, as compared to the original policy order still achieve the same purpose. It's just textually different. So, I asked Dan to print out copies for everybody. So, we have that before us because I think we want to vote on that text rather than the original policy order. And then there was some discussion about whether we could increase it again, within three years. If we increase it now. And I had some discussion with the law department, and we can basically interpret that ruling as applying retroactively. And so, we can modify the, the ordinance and the fee at the same time when we're ready to do so. So, I hope we can pass this with a favorable recommendation and, and then get into the deeper discussion on what it should ultimately be. And one more thing is that we would also want to amend the date upon ordination so that it takes effect when we ordained it, because right now it says January 28. So probably it will be ordained in early March. So, we would just change the date at that time.

Councillor Marc McGovern 22:01
Okay, thank you, Councillor. So again, to my colleagues any, again, the call the meaning was to go to the $19 and 10 cents. I do have a... as you are doing your presentation, there were a lot of questions I had about the bigger picture, certainly around the job creation piece to I've been working with some folks I won't name at the moment because we don't have an agreement, but on putting money towards free... making Community College free for graduates of our high school. And Boston does that and part of the way Boston funds it is through their linkage fee. And so, you know, I'm curious as to... I have a lot of questions about that, because I think that's, you know, would be something that would be really beneficial and how we would do that, but I'm going to hold off on that until the later date. So, are there questions from the council? Councillor Nolan.

Councillor Patricia Nolan 23:03
Thank you. I understand we are just focused on this one section. And based on what Councillor Zondervan said it sounds like we might need to make sure that the language is exactly what the memo of the CDD is. I'm just curious as to whether we can amend it right now, understanding that is $2. But at least right now, instead of $19, and 10 cents to $20 and 10 cents to include an extra dollar right now, we are in the hottest time of development right now, whatever projects that can apply to the sooner the better. I know that, which we all know, that when the rate was raised just a few years ago, it clearly didn't have a, one iota of impact on the amount of development that happened in the city so that the sooner that we can get to a greater amount of linkage fees in my mind is the better and I recognize there's a range of opportunity for us in the future to change it, but it seems to me that I would like us to raise it even more, especially that it sounded like the planning board last night suggested that it could go up even higher than just the $2. So, I'd be curious as to if they had a specific recommendation for more than this $2 and whether we couldn't do it.

Councillor Marc McGovern 24:22
Mr. Roberts?

Jeffrey Roberts, Director of Zoning and Development 24:24
Thank you, Mr. Chair. I'll start just to summarize the planning board recommendation. They... I believe planning board expressed that they understood the intent of the city council to make the change to this rate now ultimately, expressing the opinion that they, they believe the rate should be as high as it's reasonable, deemed reasonable by the City Council to, to make it but also acknowledging the purpose of this effort is to establish a, an immediate increase and then continue to discuss future increases at some future time. I would caution that there is a zoning petition before the city council and ordinarily, there may be question... with any zoning petition, any amendments that are made would need to remain within the scope and it'll be the same, substantially the same as what was originally advertised as the zoning petition. So I would generally defer to my colleagues at the law department for advice on whether a change such as an amendment that would increase the rate during the hearing process would be seen as remaining within the bounds of the original petition or whether it might be considered something that would need to be then re-advertised for new hearings.

Councillor Patricia Nolan 26:07
Can we get that legal? Not right now?

Arthur Goldberg, Deputy City Solicitor 26:11
Mr. Chair, I think raising the $19 and 10 cents $1 would be within the original petition. I don't think that is such a dramatic change from what was advertised as to require a whole new process.

Councillor Patricia Nolan 26:31
Okay, and I propose that... I'm not sure how to propose it. But if I'd love to.

Councillor Marc McGovern 26:38
So Councillor Nolan is making an amendment to raise the fee to $20 and 10 cents per square foot. Discussion? Councillor Simmons.

Councillor E. Denise Simmons 26:50
I thank you. I just want to be clear, because we just got the planning board report and we've not read it yet. So, I guess my question is, and I think my colleague spoke to, but I wasn't trying to quite grasp the answer. So, if we went to $22 or say $24, would we be able within the discussion on the incentives zoning... Within that discussion, will we be able to still if there was an interest to go higher? I mean, I think it was 30... between 34 and 50. I don't have it in front of me. So, I just want to be sure what we do now. One does not lock us into doing something when we have a fuller discussion. And then I and then again to you, Mr. Chair. Did you say you believe or did not believe that if we did that, did vote to change it tonight. We, we could do that, or we could not do that because we are making some change that needed to be advertised. I wasn't clear. I just wanted to be sure about that.

Arthur Goldberg, Deputy City Solicitor 28:01
Through you, Mr. Chair. Gesundheit. I said that I believed you could go up to $20 and 10 cents without having to advertise this petition.

Councillor E. Denise Simmons 28:18
Okay. And then still in the discussion. Excuse me, through you Mr. Chair. And then if we ask me later, look at the fuller document, have a longer conversation about the workforce contribution and all those other little nuances. And the council's felt that maybe we should go up a little higher, we'd still be able to do that?

Arthur Goldberg, Deputy City Solicitor 28:42
I believe you could do that. Yes, because this that would be a separate zoning petition, and separately advertised and as Councillor Zondervan pointed out that to the extent there's less language in the ordinance now about there has to be a study no less than every three years from the previous amendment of the rate. To the extent that language was seen as limiting what the council could do its ordinance language so it can be amended by the Council, if the council so chooses.

Councillor E. Denise Simmons 29:23
And then my last question is more to my colleagues. So, I believe my colleague said 21 or 28?

Councillor Marc McGovern 29:30
Twenty.

Councillor E. Denise Simmons 29:31
Twenty. And I just wanted to hear from the rest of my colleagues. Is that about right? Is it still too low did we want to make it higher? So, before I sort of, if you will indulge your colleagues, before we kind of just jump into the $21 bandwagon, onto that bandwagon. I'm interested in hearing a little bit more from my esteemed colleagues, where they are on that. So, with that, Mr. Chair, I yield the floor.

Councillor Marc McGovern 30:00
Pleasure of the Council? Councillor Carlone.

Councillor Dennis Carlone 30:06
Thank you, Mr. Chair. I think the fear that Mr. Seidman mentioned about it affecting labs and offices in particular in West Cambridge in Alewife area actually doesn't bother me because I act... I believe we're over... We're encouraging too much of that kind of development, traffic-oriented development. If you look at the rents in East Cambridge, yeah, this might be average, but we're hearing rents over $100 a foot in new buildings. And the developer, I think, and we have an expert here, a couple experts here, will get that back over time and then some. So, I'm fine with it at 20. But if we want to entertain more, I think that's fine too. But the real, the real issue is what are we going to do in the next phase of this analysis? And this is a holding pattern that Councillor Zondervan brought forth that makes all the sense in the world, incrementally, incrementally increasing it is Councillor Nolan has suggested, I'm all for and knowing the market, as I do, certainly in East Cambridge, knowing the market. This will have absolutely minimal impact. I agree West Cambridge might be affected but as I said earlier, I think we're over developing the office and lab market in West Cambridge any way, given the transportation available. Thanks Mr. Chair.

Mayor Marc McGovern 32:01
Mayor Siddiqui.

Mayor Sumbul Siddiqui 32:02
Thank you, Mr. Chair. I think Mr. Roberts mentioned this earlier. Going back to the first paragraph on page two, I assume this was written by Mr. Roberts, but it says, I don't know who wrote it. But note that the text changes below are intended only to establish a new rate of 19.10 with ongoing adjustments made for CPI but without establishing any other future rate increases, because the petition does not explicitly state whether such increases are intended. It seems that to clarify Mr. Solicitor that you think it would be okay beyond 19.10 and if that is the case, it contradicts his language. But I think going to 20 that seems reasonable to me. With the... I think expectation a lot of us had that we, you know, we have a lot of questions. We do want to think about what that amount is. And that will require I think, some further discussion. I haven't read the report in a while and so I wasn't prepared to really go through and think about those numbers and think about that. I don't think any of us were, so I think I'm trying to 20, I think concert of Simmons asked. I'm fine with it.

Councillor Marc McGovern 33:29
Thank you. Pleasure of the Council? Councillor Sobrinho-Wheeler.

Councillor Jivan Sobrinho-Wheeler 33:31
Thank you. I would support Councillor Nolan's suggestion to go to $20.10 and which is dollar higher than was proposed and ultimately, I think we need to go much higher than that. I think we're all on the same page about that. And one of the... I had two questions. One was about the for... $1 annual increases and setting that tonight. I'm just a little confused if we all agree we're going to go and set it higher why we're deciding that tonight if it's just in case a meteor hits that we, we have that side or if there's some other reason there. And then the other question was about one of the slides in the presentation. It seems like all the other metropolitan areas outside Boston, break linkage down by zone or by use. And I'm just curious if there are different demographic or economic factors that go into that or why that isn't prevalent in Boston.

Councillor Marc McGovern 34:22
Who wants it?

Arthur Goldberg, Deputy City Solicitor 34:23
I could take part of it. Mr. Chair. I think if the council were tonight to go beyond the one year, the, the one change to the 19.10. If you were to go to other years, I think that would require another petition. And another advertised hearing, so I think that would go beyond what's before you tonight.

Councillor Jivan Sobrinho-Wheeler 34:50
If I could just follow up, I just think I'm not sure why we're including annual increases if the idea is to in the next couple weeks... Is that not part of the... It's not what we're considering tonight Okay, great. Thank you.

Councillor Marc McGovern 35:03
Pleasure of the Council? Councillor Zondervan.

Councillor Quinton Zondervan 35:08
Thank you, Mr. Chair. I feel like I'm in an auction. I think we should go as high as, as we can. But I think tonight, we should probably, I mean, I only propose $2 because I figured that will be quick and easy and non-controversial. And then we would buy ourselves enough time to have the deeper discussion about where it should ultimately end up. So, I think, you know, if there's appetite to go to 20, then by all means, let's do that. And then [sic] let's advance the petition and have the deeper discussion. I think we should probably vote first to adopt the amendments proposed by CDD and then amend it further to $20 and 10 cents.

Councillor Marc McGovern 35:58
So, just my, for my $2 and 10 cents in this comments. You know, I think one of the other reasons we went to, we went to 19.10. Also, because we felt it was a pretty quick and an easy thing to do, but also, that's what the recommendation was. So, I don't want to go too far above that tonight for just one is sort of to make sure we're on solid, you know, legal footing, I think 20 is fine. But if we were to go to 25, 26, 27 tonight, I think that's a different ballgame. And, and also, I mean, just in terms of fairness, I think if we had advertised this, that we were going to go to $25 or $26 or $27 per square foot, my guess is that the business community would be out here, people would want to come out and have that conversation. I don't think it's really fair, that we go too far beyond what we advertised. Because I don't think that's really you know, that's not what we, that's not what we said we were going to be discussing tonight. So, I want to be a little mindful of that. So, I think, I think the $20 and 10 cents is within that, within that range and is fine. So, I would certainly support that amendment. But I probably wouldn't go much higher than that tonight. But I do, you know, for folks in the... I hesitate to speak for my colleagues, but I think I feel pretty comfortable saying that nobody wants us to hang around and to linger that we want to have this discussion about going, increasing this fee even more, sooner rather than later. So, you know, I don't, I don't think that this is something that we're going to do this and then we're going to come back to this in eight months, or, you know, or seven or seven months, I think we're going to look to forward this conversation more quickly and get to another number, you know, in quick order. So, you know, at the end of the day 19.10, 20.10. If we amended this in three months, and it's 35 or whatever it ends up being, you know, that $1 difference isn't really going to make a big deal one way or the other, but I think... So, I'd be fine with that. But I think we need to... I wouldn't go much higher than that tonight. So... Councillor Mallon or Vice Mayor, sorry.

Vice Mayor Alanna Mallon 38:09
Point of information. Before we vote, are we going to be hearing from the public? I see some people here signed up.

Councillor Marc McGovern 38:17
Yeah. [sic] we have public comment. We can... We have a motion in front of us for the amendment. So, we have to sort of deal with that first, but yes, we will, we will go to public comment. So, there's... Councillor Nolan.

Councillor Patricia Nolan 38:35
Sorry, if I don't know the rules, if it makes more sense with this protocol for me to withdraw that to you from the public before we vote on it, I would be happy to do that. I don't know what makes most sense for all of you.

Councillor Marc McGovern 38:47
You can, you can do that. We also have, we also have to adopt the amended language from CDD. And then also Councillor Zondervan. You talked about taking out September 20, January 28, and putting in upon ordination. So, we do have another couple of the amendments floating around, but I think we can... I don't think any of those were formally made. So, I think we can hold off on voting on those until public comment. So, I guess we will go to public comments now. Please, when I call your name, come to the podium, state your name and your address, and you will have three minutes. Chris Schmidt followed by Alexandra Markiewicz.

39:32
Chris Schmidt, 17 Laurel Street. Thank you all for considering moving ahead with this. I really appreciate the work that went into the Nexus study and the numbers that we're seeing. It seems clear to me that there's some confusion among members of the council, among CDD, among the community about this moving with 19.10, now. I'm not going to really like sit here and nitpick over $1 or two here or there. I'm actually much more frustrated that I haven't seen any movement in the past two months on what comes next. You know, we've passed in December, sending this to Ordinance committee and there's no other committee hearings scheduled on the full Nexus study, as, as was pointed out by Councillor Zondervan. This was, you know, later than we expected. And I really hope that that can be scheduled. I know that everyone's here saying, we really want to get this done. But, but there's nothing on the schedule that I can see. So that, that's the biggest thing that I would say is like, you know, there's clearly an appetite from the members of the council, from the members of the community. And, and I know, the business community, as you said, is going to come here and tell us, you know, we'll never build a building again, in Cambridge, just as soon as you'd say it's going to be $34 or $2. They'll say that, but, you know, we really want to be having those conversations, because, you know, now we wasted or spent two months on this process. It's going to be another two to six to eight months before we get something else done. And we're going to be talking about an entire year of development that's not subject to, you know, a fuller rate. I'll also call out you know, just briefly, I think the Nexus study does a good job of analyzing, you know, a certain subset. You know, people who want to live in Cambridge because they get a new job here and would be low income or other things like that. But as Councillor Zondervan pointed out, does not accommodate for displacement and the many the other effects that the commercial businesses have. And that applies to jobs and to other things as well. I, I know I'm saying things you've all heard. I know that and I recognize that. The difference between $19 and $20 tonight makes much less difference to me, than the difference between $20 and $34. And that was the conversation I wish we were having tonight. So, thank you for your time, feel free, you know, please move forward in the expedient way. But the most important thing is not this 10%, 5% raise. It's, it's to talk about the 50% raise we should really be talking about. Thank you.

Councillor Marc McGovern 41:43
Thank you. Alexandra Markiewicz followed by Peter Williams.

41:51
Hi, Alexandra Markiewicz, 6Laurel Street, just here to lend my support number one to be against taking action where we can, so lend my support for passing the $20, I guess it is, fee tonight. But then echoing Chris's comments, moving quickly on understanding how we can raise that even further to somewhere where we're tangibly increasing opportunity for affordable housing, finding what is the point where we can optimize that. So, encourage folks to... encourage the members of the council to move forward on that. Thank you.

Councillor Marc McGovern 42:32
Thank you, Peter Williams followed by Larry Bluestone.

42:38
Hi, I'm Peter Williams, 35 Homer Avenue. I guess I don't really have a whole lot to add from what you've just heard. I'm really glad to see the energy for this kind of work, and the council here today. And, you know, I'd love to see things go up. I think, has been said before, you know, really $3 even this kind of $50 number that seems like something that's a could make a real difference. But the first step is what we're talking about tonight. And so, I just really want to voice my support for moving forward as expeditiously as we can. Thanks.

Councillor Marc McGovern 43:08
Thank you. Larry Bluestone.

43:13
Good evening, Larry Bluestone, 18 Centre Street. I just want to echo what everybody has said before me. I fully support the increase that is being proposed tonight. But I think we soon need to move on to the larger conversation of increasing the linkage fee considerably more than what has been recommended in the Nexus report. The one point I do want to make is that if we do discuss significant increases in the future, the jeopardy always couched in how developers will react to it. Developers have a much greater issue which is they have to rent their buildings to businesses. Businesses need to attract employees and those employees will not come if they cannot afford to live in the area. So, increases in linkage fees are going to be beneficial to developers, and I hope we consider that in the future. Thank you.

Councillor Marc McGovern 44:05
Thank you, Alan Sadun, followed by Carolyn Fuller.

44:12
Hi, Alan Sadun, 17 Pleasant Place. I know the call for this meeting is narrow. And as Councillor McGovern said, this is not the end of the process of understanding the Nexus study. And I support this amendment with reservations because it will raise some money for affordable housing and that's good. But I have reservations because I know that needed change can come very slowly, especially when temporary action has already been taken. I worry about the fact that, you know, we're now considering in late... other business an extension to the tree protection ordinance because action on permanent policy was slower than expected. I worry about the fact that to my knowledge; no further meeting has been scheduled yet to discuss further action on raising the linkage fee. So, I want to underscore the fact that our affordable housing linkage fee should be raised significantly higher than $20.10. That action on this issue should not get lost. The Nexus study as Councillor Zondervan noted does not account for displacement. The primary concern that motivated the modest recommendation of the Nexus study was regional competitiveness. But the forecasted impact on regional rents even in the worst-case scenario, is miniscule compared to the year over year increase in commercial rents caused by construction industry changes and the general intensification of commercial interest in Cambridge real estate. So, raising the linkage fee is really not what's going to make or break our regional competitiveness. I don't want to stray too far off the topic of this meetings call. So, I just want to reiterate my hope and request the subsequent study and discussion begins soon and proceed swiftly and boldly. Thank you.

Councillor Marc McGovern 45:40
Thank you, Carolyn Fuller, followed by William McAvinney.

45:45
Carolyn Fuller, 12 Douglas Street, and I just want to reiterate what everybody else says which means I support you passing the petition tonight. But I hope the $20... and I hope you take up discussion soon, very soon.

Councillor Marc McGovern 46:03
Thank you, Bill McAvinney.

46:07
Bill McAvinney, 12 Douglas street, Cambridge. I am here to support this passing. But I also am feeling like we are currently incentivizing commercial development over housing development. It's a little difficult to figure out what is the comparison between inclusionary zoning and linkage fee. But I did a sort of back of the napkin type approach to trying to do that. So, I figured while it's kind of obvious at 20% inclusionary, the rental, the other rental units in the building will be 25% additional to cover that 20... to cover the ones they're supporting. If there were no income from that, there is income from that. I took a guess that the average income of people in the affordable housing units is $60,000. I suspect that's really high. But 60,000 times 30% is 18,000 per year. I also guessed that well, I know that 2700 is the current median rental income in Cambridge, for new units, I suspect is higher. So, I guess 3000 are approximately 3000, 3000 times 12 is 36,000. So, 18,000 is half of 36,000. So, you could trigger roughly 50% less than the 25%. So that's 12 and a half percent. I've heard figures of a minimum of $400 for just construction costs on new, new construction. Twelve and a half percent of.... Where was I... Twelve and a half percent of $400 is $50. So that's kind of rough guess, of a minimum of what we are charging our housing developers. So, I think our commercial linkage fees should be much closer to that. Thank you.

Councillor Marc McGovern 48:12
Thank you. Jonathan Behrens followed by Lee Ferris.

Karl F. Seidman, Consultant 48:19
Jonathan Behrens, 115 Hampshire Streets. I'm going to echo the statements by everyone, pretty much everyone before me and say that this action is good, but we need much further action, hopefully soon after. Thank you.

Councillor Marc McGovern 48:33
Thank you. Lee Ferris.

48:38
Hi, Lee Ferris, 269 Norfolk Street. I am speaking for the Cambridge Residents Alliance. We strongly support this increase and $20 is certainly better than $19 and we would like it to go higher. And you certainly had strong support from the planning board last night, saying that it should go higher as well. And they said that they felt it was basically a political judgment for the City Council as to how high exactly it should go. So, they hand it off to you guys. I know you're not considering going higher tonight, but just for food for thought going forward. The planning board members noted that the study does not include the impact of the new jobs in the commercial buildings on existing rents in existing apartments. And they noted that the commercial buildings in effect displace building housing. And my observation, a little bit similar to Bill's is that Cambridge, it's not getting the right ratio of commercial to housing square footage per year. And it might be good for our bottom line of taxes, but it's not good for livability of the city. Our tax situation is quite good. So, I think we should, when we come back to the further consideration of, of increasing linkage further, we should think about that ratio of, of commercial to housing. I also want to address the ways that the report calculates... why it doesn't ask for 50... $55 per square foot. So, as I understood it, what the report does is subtract the amount of contribution that the Affordable Housing Trust Fund has been making. And they say that the Affordable Housing Trust Fund has contributed 43% to recent affordable housing developments, and so they project that forward. I don't think that that's the way we should calculate what we need because we just increased for the first time substantially the city revenue that is going to affordable housing last year. But that's still not enough. And if we presume that the trust is going to contribute 43% of everything going forward, we will never catch up, because I think we can count on the federal and state funds not continuing to provide the remainder at the level that we would need if we presume that we're going to continue to fund at the 43% rate. So, I think a lot of the calculations in the report, or the report may need to be revisited. Thank you.

Councillor Marc McGovern 51:42
Thank you. Is there anyone who did not sign up to speak who has been so inspired that they want to get up now?

Councillor Marc McGovern 51:51
Come on up, name, address.

51:53
So, Henry Wortis, 106 Berkshire Street. And I'm speaking for myself and also Our Revolution. We're strong supporters of this as a first step. And the only thing I would add beyond applause for what other people have already said, is that we're facing a deficit built up over the years in which there has been under investment in housing, affordable housing, that has resulted in displacement of many, many people. And in effect, those people have basically supported through their laws, the commercial development that has fueled the favorable tax rates that the rest of us have enjoyed. So, there's a lot to be made up and this is a welcome first step, but speed is also important because We've got decades to catch up on. Thank you very much.

Councillor Marc McGovern 53:04
Thank you.

Councillor Marc McGovern 53:05
On a motion by Councillor Zondervan to close public comment. All those in favor say aye. Those opposed nay. The ayes have it. Real quickly, just for the folks who talked about the timeline. And we certainly hear you just not to... Just to put it in a little bit in perspective, you know, we didn't run into a little bit of a problem where, when this came forward in December, we were switching, the council was switching over there was a change in the administration of the mayor's office. Committees were announced in the middle of January. We have been, Councillor Carlone and I have been meeting with CDD and with the mayor, to talk about all the other... there's a number of ordinances that are in front of us to make this happen. So, you know, there were a lot of... it's just some of it is a question of bad timing, but we, I will apologize, I'm taking my first vacation in two years with my kids next week. But when I come back, we have a meeting that Monday to really lay out a timeline for all of these pending issues. So, you will, this is going to happen, I promise you this is going to happen and it's going to be scheduled soon. So, with that, there are three amendments.

Councillor Marc McGovern 54:22
The first is to amend... is to amend 11.202 Section B amend by substitution with CDD language 11.202 Section B. All those in favor say aye. Those opposed nay. The ayes have it. The second amendment is an amendment by Councillor Zondervan to change January 28, 2022 to upon ordination, all those in favor say aye. Those opposed nay. The ayes have it. The third amendment by Councillor Nolan to change $19 and 10 cents to $20 and 10 cents. All those in favor say aye. Those opposed nay. The ayes have it. And then on a motion by Councillor Zondervan to send the amended language to the full city council with a favorable recommendation. All those in favor say aye. Those opposed nay. The ayes have it. I will entertain a motion to adjourn. On a motion by Councillor Simmons to adjourn. All those in favor say aye. Those opposed nay. The ayes have it. We are adjourned.

That section 11.202(b) of Article 11.000, entitled SPECIAL REGULATIONS, of the Zoning Ordinance of the City of Cambridge, be amended the table as follows: January 28, 2020 (Annual Adjustment) $19.10 per square foot
RESULT: REFERRED TO THE CITY COUNCIL WITH A FAVORABLE RECOMMENDATION

A communication was received from the Community Development Department regarding the Cambridge Incentive Zoning Nexus Study
RESULT: PLACED ON FILE

IN CITY COUNCIL
February 24, 2020
COUNCILLOR ZONDERVAN
MAYOR SIDDIQUI
COUNCILLOR CARLONE
COUNCILLOR MCGOVERN
ORDERED: That section 11.202(b) of Article 11.000, entitled SPECIAL REGULATIONS, of the Zoning Ordinance of the City of Cambridge, be amended the table as follows:

January 28, 2020 (Annual Adjustment)     $19.10 per square foot

On February 12, 2020 the Ordinance Committee voted to recommend that the City Council amend the petition entitled “Amendment to section 11.202(b) of the zoning ordinance” filed by Councillor Zondervan on December 16, 2019 as follows:

ORDERED: Delete the following text from the petition:

That section 11.202(b) of Article 11.000, entitled SPECIAL REGULATIONS, of the Zoning Ordinance of the City of Cambridge, be amended the table as follows:

January 28, 2020 (Annual Adjustment)     $19.10 per square foot

Insert the following text in its place:

ORDERED: That section 11.202(b) of Article 11.000, entitled SPECIAL REGULATIONS, of the Zoning Ordinance of the City of Cambridge, be amended by substitution with the following text:

(b) Housing Contribution Rate. The Housing Contribution Rate effective upon ordination shall be nineteen dollars and ten cents ($19.10) per square foot of Gross Floor Area devoted to the uses that qualify the new development as an Incentive Project. The effective rate shall be subject to annual escalation equal to annual percentage increases in the Consumer Price Index (CPI) Housing Index for Boston-Brockton-Nashua, MA-NH-ME-CT or similar index to reflect changes in dollar values over time; however, annual decreases in CPI shall not cause the contribution rate to be decreased. The table below is intended to administratively track changes to the Housing Contribution Rate as it is adjusted over time.