More Housing Alone Won't Solve Housing Crisis

Monday, January 21, 2019
David Tisel
Common Wealth Magazine

CHARLINE LAKE has not unpacked her boxes.

It has been more than a year since she moved to Arlington after her apartment building in Somerville’s Davis Square was sold. The new owner forced the tenants out by doubling the rent, harassing them with unannounced construction and utility shut-offs, and, finally, by serving no-fault eviction notices to the holdouts.

“The new owner wanted us out of there. It was just hell,” said Lake. “I mean there were people in the building who were very low income. Some disabled. Many had been there for a very long time. And it just felt like storm troopers were coming in.”

After 14 years of living at The Chadwick, Lake, now 73, searched for a new place in her neighborhood, and then in every other neighborhood on the Red Line in Cambridge and Somerville. But she could not find anything remotely affordable to rent for an amount she could pay with her retirement and social security income.

Lake’s story is not unique. Tenant displacement is unfortunately a regular occurrence in Greater Boston communities facing the pressures of unprecedented growth, change, and income inequality. Let’s take a look at what’s happening in Somerville, a community experiencing significant ongoing change.

Somerville is a city of renters, but increasingly not for renters. “In Somerville, fully two-thirds (67 percent) of households are renters, nearly half of whom (44 percent) experience what the Department of Housing and Urban Development calls a housing cost-burden, meaning that they pay more than 30 percent of their gross household income on housing expenses,” said a 2014 report from the Metropolitan Area Planning Council.

The median Somerville rent ($2,641, not including heat or utilities) represents 44 percent of the median household income of Somerville residents. A single tenant working full time at $15 an hour would not be able to pay the median rent in Somerville even if she paid no taxes and put 100 percent of her income towards rent.

In 2015, Somerville created a Sustainable Neighborhoods Working Group to study the housing conditions in the city and recommend policy solutions. The working group’s final report found that 74 percent of Somerville renters would not be able to afford to rent another apartment in the city if they had to leave their current apartment. Furthermore, the report noted, “the vast majority of low-income families, who in turn comprise the vast majority of Somerville Public School students, are at risk of displacement or extreme cost burden.”

Twenty-nine years after Massachusetts settled an air quality lawsuit by agreeing to build the Green Line extension as part of a remediation package, the project has finally begun construction and is expected to be complete in 2021. This project will bring rail transit to Union Square, East Somerville, Gilman Square, Magoun Square, and Ball Square. It is an important mobility improvement for the city and region but it has already had—and will continue to have—a drastic impact on the housing markets in these neighborhoods.

This will not be the first time that rail transit expansion changed the character of a Somerville neighborhood: in 1984, the MBTA Red Line station was opened at Davis Square, precipitating an increase in rents and home values in the decades since. The property value appreciation accelerated more when Massachusetts outlawed rent control after a statewide ballot initiative in 1994. Subsequent rent increases in nearby Cambridge increased demand for housing in Somerville. Few targeted actions were taken to create or preserve affordable housing in Davis Square, or to create any new housing near the new station. Today, Davis Square home values and rents are the highest in Somerville.

In a 2015 report, the Metropolitan Area Planning Council warned that neighborhoods near the planned Green Line extension stations would face similar challenges, projecting that between 740 and 810 lower-income households would become “newly cost burdened,” that condominium conversion of two- and three-unit homes would displace up to 475 renters, and that another 245 households in the Green Line extension corridor will face displacement from expiring affordability restrictions by 2020.

Without strengthening tenants’ rights and preserving affordable rental housing in neighborhoods around future stations, the Green Line extension will exacerbate tenant displacement in Somerville, and the improved mobility provided by this transit project won’t be enjoyed by many who badly need it.

Matt Levallee used to live at 410 Medford St. in Winter Hill, a short walk from the planned Lowell Street station. After living there for six years— “the longest I have ever lived in one address”—he was served a notice to quit by his landlord. “There was no communication before the notice to quit. There was an inspection from the bank three or four months before, but when I asked if the inspection would lead to a sale of the building, [the landlord] said no,” Levallee said.

Levallee scrambled to find a new place and ended up moving to Somerville’s far west side, to “a four-bedroom apartment with strangers.” Levallee was distressed. “The prospect of being displaced to a place farther away from my employment was disturbing and the prospect of being displaced from my friends was distressing. It was a small miracle that I managed to stay in the city,” he said. After Levallee was forced to leave, the owners sold the building at 410 Medford St., and his old one-bedroom apartment with an office is now a three-bedroom apartment “with much higher rent.”

Lake and Levallee are not outliers. Sadly, they are becoming the norm. Eddy Toussaint was an active member of Union United, the campaign for a community benefits agreement with the master developer of the area near the new Green Line station in Union Square, before he was displaced after a building sale. He shared his story in an open letter to Union United:

“The lease of our 2-bedroom apartment on Pleasant Avenue was terminated unexpectedly this spring due to the owner’s selling of the property…We very much wanted to be able to stay in Somerville or the surrounding areas. Regrettably, we couldn’t find an apartment in our favorite city of Somerville that met our budget and, having now moved, I can no longer participate in the proceedings and enriching discussions of a formidable organization like Union United.”

The common sense solution to the problem of housing affordability is to increase the supply of housing. Based on housing demand projections from the Metropolitan Area Planning Council, the Somerville Comprehensive Plan for 2010-2030 sets a housing production goal of 6,000 units by 2030 – 1,200 of which are to be permanently affordable. A regional plan to increase supply should be part of the solution to the regional affordability crunch. But building more housing alone is not the answer to the current crisis. Legal protections must be put into place to empower tenants and level the playing field.

Legal protections for tenants are not mentioned in Somerville’s comprehensive plan as tools to deal with housing affordability and tenant displacement. In this majority-renter city, why has the increase in rents and the displacement of long-term tenants not resulted in stronger tenant protections, and why has the solution offered by most governmental officials, city planners, and commentators been limited to increasing the supply of housing, rather than increasing supply and strengthening tenants’ rights to remain? This is not a dichotomy: we can, and need to do both.

The Legislature can provide significant help by passing enabling legislation for local communities to adopt Tenant Right to Purchase ordinances. Such ordinances would be based on the model established by Washington, D.C.’s Tenant Opportunity to Purchase Act (TOPA). TOPA was part of a larger tenant protection agenda that included rent control, just-cause eviction, and regulation of condominium conversion.

TOPA gives residential tenants a right of first refusal to purchase their building before it is sold to another buyer. In multifamily buildings, this is a right held in common, rather than individually. Tenants must create a tenant association, and the elected leadership of this tenant association decides if and how they want to exercise their collective right: they can purchase the building as a cooperative or condominium, or they can assign their right of first refusal to another developer. In the case of assignment of rights, the tenant association interviews multiple developers and chooses one with a plan favored by the tenant association leaders.

In the District of Columbia, tenants in the TOPA process receive technical assistance and financing support from the local government and aligned nonprofits. D.C.’s Department of Housing and Community Development provides low-cost, subordinated debt from its Housing Production Trust Fund for tenant associations to purchase their buildings as limited equity cooperatives. The district also provides grants to two nonprofits, the Latino Economic Development Center and Housing Counseling Services, to provide technical assistance and organizing support to TOPA tenant associations.

Data on TOPA outcomes, especially for the program’s first two decades, are hard to come by. However, a 2013 report from the district’s Fiscal Policy Institute found that TOPA and the city’s financing program helped to preserve nearly 1,400 units of affordable housing in 49 buildings between 2003 and 2013 with $130 million in total investment. The same report found that the average per unit development cost was $165,000, with $97,900 in public support per unit, which is lower than the per unit subsidy cost of building new affordable housing in D.C. The report also emphasized the importance of financing through the Housing Production Trust fund as well as technical assistance to make the tenant opportunity to purchase a real opportunity for low- to moderate-income tenants.

This year, Boston Mayor Marty Walsh is calling on the Legislature to pass enabling legislation that would allow municipalities to enact Tenant Right to Purchase ordinances. This legislation is based on the Washington, D.C., model, but it would only cover buildings of six or more units, so owners of small properties would be exempt. Mayor Joe Curtatone of Somerville is also a strong supporter of the Tenant Right to Purchase: he proposed a home rule petition, which is currently in the Legislative Matters Committee of the Somerville City Council.

The Tenant Right to Purchase is also an effective means of stabilizing neighborhoods and promoting homeownership in communities with softer housing markets, such as Massachusetts’ Gateway Cities. In these markets, tenants are more likely to be able to afford purchasing their homes outright without a subsidy. This can help maintain neighborhood cohesion and provide a wealth-building opportunity for first-time homeowners.

Given the rapidly escalating rents across Massachusetts, enacting enabling legislation for the Tenant Right to Purchase could give tenants, nonprofits, and municipalities a new tool to preserve affordable housing and prevent displacement. Empowering tenants and stabilizing communities ought to be a matter of urgent attention as our region continues to feel the pressure of rising income inequality, rising housing costs, and associated displacement. The problem is not theoretical, nor is it limited in scope. It’s time to act so that we can maintain social cohesion and provide tenants with a reasonable chance to remain in their chosen neighborhood.

Let’s not turn our backs on tenants like Amanda Gazin, who lived in her apartment at 131 Orchard Street for 36 years. Two months after the building was sold, she found a notice to quit on her door, requiring her to leave within a month. Gazin had been saving for a downpayment on a condominium, but had not been able to find anything in her price range in Somerville. Had it been an option, she said that she would have worked with her neighbors to pursue either the limited equity cooperative option or assignment of the right to purchase to a nonprofit.

“I was very sad because we had a kind of a nice community. A lot of us had lived there a long time. And we did help each other out. Four people had my keys and would let me in if I locked myself out, and they would feed my cats and I would do the same for them. So it was a community. And we lost it,” said Gazin. “I was sad and angry and depressed that this could happen—that good, ordinary people could have their lives totally ripped apart like that. I mean 36 years. We were tenants at will, but I mean really—36 years and one month’s notice? Was it legal? Yeah.”

It is time to recognize that building housing is only part of the solution to the social and economic justice issues spurred by gentrification. Without legal protections for renters, building more housing will not build a just city.

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