Steve Kaiser comments on Novartis Petition - May 17, 2011

May 17,2011

To: Hugh Russell, Chairman, Cambridge Planning Board; Tim Toomey, Co-Chair, City Council Ordinance Committee; Sam Seidel, Co-Chair, City Council Ordinance Committee

From: Stephen H. Kaiser, PhD

Zoning Amendments and the Constitution

At the May 3, 2011 Public hearing before the Cambridge Planning Board, I addressed a zoning petition now undergoing review. My concerns are actually common to all four upzonings currently under consideration. Several other zoning petitions in recent years raise similar questions.

This concern is for any upzoning petition submitted by a landowner. Granting such a request increases the value of the land. A favorable decision by the City would constitute a grant or gift to a private party. This action would come from public officials with the primary responsibility to represent the common interest in our Commonwealth.

Any increase in land value gives the owner an instant profit should he choose to sell the land immediately. All the petitions share the primary purpose and benefit whereby increased value and profits for the landowners are a major consequence.

This result suggests favoritism and unfairness - a criticism arising from a common belief that governments should serve the public fairly and equally. A second criticism is that the exercise (and indeed zoning itself) is an imposition on the ideal of a free market economy. A government grant undermines the concept of free and open competition whereby governments do not interfere and act to favor any one party. Both criticisms come to the same conclusion - that the City in approving recent. upzonings has acted with unfairness and with favoritism -- without regard for possible corruption of government authority or for the ideal purity of the economic process.

My comments of May 3 went beyond a mere academic claim. I linked upzoning directly with the state Constitution, specifically Article 7 of the Declaration of Rights. Article 7 provides that:
"Government is instituted for the common good ... of the people; and not for the profit, honor, or private interest of any one man, family, or class of men."

I interpret "class of men" to include corporations, which I believe is a logical conclusion. The United States Constitution includes no reference to corporations, but the recent U.S. Supreme Court decision in Citizens United v. FEC found that, with regard to free speech rights, corporations should be treated the same as individuals. This controversial decision has placed directly before us the question of how corporations should be treated in terms of government constitutions.

The original Massachusetts Constitution does make specific reference to corporations in the preceding Article 6.
"No man, nor Corporation, or association of men, have any other title to obtain advantages, or particular or exclusive privileges, distinct from those of the Community, than those arising from consideration of services rendered to the public."

This language prevents unjust preferences by explicit reference to Corporations. While the state Constitution refers to the granting of "titles," it also sets limits on "advantages" and "privileges." The issue of advantages and privileges is inherent in requests for upzoning by local landowners. It is quite clear that the Constitution recognizes the potential for favoritism and has taken explicit action to forbid it for both individuals and Corporations.

I would also interpret the reference to "private interest" in Article 7 to include commercial developers, universities, other corporations and private non-profits. The effect of Article 7 is quite all-encompassing.

Article 7 sets two requirements -- that government is to serve the Common good, and that Government is not for the profit or other benefit of private factions. Matters of zoning are not mentioned in the state Constitution, but it is clear that special interest upzoning is within the realm of advantages, privileges and profit.

It is possible to structure upzoning to be consistent with Article 7, as long as it benefits all areas of the city, as has been claimed for City-wide rezoning. However, recent upzoning petitions have been closer to spot zoning than for a general public purpose. These petitions do not recognize the value of public benefits associated with existing zoning and instead may claim upzoning as both a public and private benefit. The truth is more divisive. We should be concerned about situations where zoning becomes a zero-sum game -- where the developer wins and the public interest loses.

The public benefits from existing zoning are numerous. Upzoning can bring about increased traffic, safety hazards, air pollution and noise, wind and shadow, detrimental aesthetics, street canyon effects, loss of historical values, and new buildings that are "dead" on the first floor. The City must consider this tradeoff.

The legal prohibitions against government-derived profits and benefits do not prevent individuals from seeking such benefits in normal commerce. Neither do these prohibitions make upzoning impossible. Linking Article 7 to upzoning means that upzoning can occur -- provided first that there is no profit or other private benefit associated with this government action. Second, the upzoning must provide a net benefit to the people ... to the general public and not to the special interests.

The limit on profits associated with Article 7 is not a partial one, such as a 10 percent reduction. Article 7 would appear to require a 100 percent reimbursement to the city 100 percent for the increased value of their property. In that way, there would be no profit and no conflict with Article 7.

There is a common practice today of developers sharing their benefits with other city inhabitants. This view is probably the origin of the $900,000 contribution by one Kendall Square developer to the City. However, as a general rule this contribution does not cover the entire profit, and may not even cover ten percent, with the form of the contribution taking various routes from source to destination.

I recall in past years that the concept of a Federal "windfall" profits tax was proposed, again with the idea of making a valid contribution back to the government to reflect one's good fortune. Webster's Dictionary defines "windfall" as an "unexpected, unearned or sudden gain." For upzoning actions, the result is probably expected, but critics would see the benefits as clearly unearned, and definitely sudden - the direct result of government approval.

An additional problem with upzoning occurs in areas where a public process has in prior years reached an agreement about the purposes and intensities of zoning. A good example is the ECaPS process in East Cambridge during 2001. This public process defines most clearly what is the Common good as required by Article 7. A mutual accord was reached on the substance of ECaPS and the results were codified as zoning. I would draw a simple analogy with contract law, whereby various parties agree on the content of the contract, but no single party can unilaterally make changes or undermine the agreement. Any upzoning must be seen as altering the agreement and the balance of the democratic process.

Please be aware that relative to Article 7 I am raising only the issue of zoning. I am aware that a host of other issues could surface ... such as special tax breaks (including Chapter 121A), subsidies, direct state government investments in businesses (such as Evergreen Solar), monopolies (such as sports stadiums and casinos), energy credits, logging on state lands, and other government benefits to selected private parties. These matters should be taken up at a different time, and in different forums.

My concern in this letter is limited to upzoning and Article 7 of the state Constitution. I wish to stay entirely focused on the zoning issue, as I believe the Planning Board and Ordinance Committee must do as well.

I believe that the issues I have raised are of considerable importance to City officials and the citizens. I hope that in various forums useful discussion and commentary can be generated. Case Law regarding Article 7 appears to be fairly thin, but from our local legal community we may be able to generate informal legal opinions.

A more formal process could be a request by the Legislature to the Supreme Judicial Court to respond to legal questions about the applicability of Article 7. Such a process was followed in 1981 in seeking an advisory opinion from the Court with respect to landlocked tidelands.

Another option could follow, in the event of an unsatisfactory discussion to the issues outlined above. Citizens have the right to make a court appeal and to seek direct SJC jurisdiction of the Article 7 issue.

Because of the concerns I see in respect to Article 7 of the Constitution, I must count myself in opposition to all upzonings currently proposed in the City of Cambridge by private entities.

Sincerely,
Stephen H. Kaiser, PhD
cc. Cambridge City Council