Talk long enough to anyone about the high cost of housing in Massachusetts and the conversation usually gets around to the same illustration of just how tough things have gotten: In more and more places, not just the priciest ones, police officers, teachers, and other mainstays of municipal life can no longer afford to buy a home in the communities they serve.
That makes Jeff Convery the poster child for a housing market gone awry. The 37-year-old father of three grew up in Framingham and today teaches history at Framingham High School, from which he graduated in 1986. With two children still preschoolers at home, Convery’s wife, Barbie, is working only part-time, at night. On Convery’s teaching salary of about $50,000, plus his wife’s modest earnings, “prices are just far too high to afford a mortgage,” he says. The median sale price of a single-family house in Framingham over the first nine months of last year was $380,000, up nearly $18,000 from 2004. The Converys are now looking into a state-assisted program designed to address precisely their predicament. The Municipal Mortgage Program helps municipal workers buy homes with little or no down payment. For now, though, they’re stuck paying $1,400 a month in rent for a house in Framingham billed as a three-bedroom but which Jeff Convery says is closer to “two and a half.”
“It’s frustrating, but I don’t want it to sound like bellyaching, either,” says Convery. “I made a choice to start a family. I chose a profession, coming from a family of educators, that I knew wouldn’t be making a lot of money.” But Convery knows things are far different for him than they were for his father, a retired Framingham school principal who started out as a classroom teacher, was able to buy a comfortable home in the town where he taught, and raised six children there.
“People who play by the rules and get an education and get a job ought to be able to have a decent place to live,” says Clark Ziegler, executive director of the Massachusetts Housing Partnership, the statewide affordable housing agency that runs the mortgage program for municipal workers.
two blocks from the commuter rail station.
But many of those playing by the rules now find the door closed to the bedrock definition of the American dream. Four years ago, Nicolas Retsinas, director of Harvard’s Joint Center for Housing Studies, told CommonWealth that the inability of those like Convery to translate education and hard work into homeownership “threatens a fundamental social contract” (See “Anti-family values,” CW, Spring ’02).
Greater Boston home prices rose by roughly 10 percent or more each year for seven consecutive years to 2004, when the median price of a single-family home sold in the area was $376,000. In only 27 of the 161 cities and towns in Greater Boston could a family earning the median income in that community afford a house at the median price of homes sold there in 2004, down from 59 communities only a year earlier. The red-hot real estate market shows some signs of cooling, but the 3 percent price drop in the coming year predicted by some analysts won’t be enough to put many teachers and firefighters into homes.
“What’s fundamentally awry is the disconnect between housing markets and labor markets,” says Retsinas. It’s important to correct the mismatch between salaries and home prices, he says, “not just because it’s the right thing to do in terms of social equity, although I think it is, but [because] it relates to the larger functioning of our society and our economic competitiveness.”
Indeed, business leaders point to the high cost of housing as perhaps the single greatest threat to the Massachusetts economy, which depends heavily on human capital to drive its knowledge-based industries. “You try to recruit somebody from St. Louis—they can’t afford to live here,” says Stanley Lukowksi, CEO of Eastern Bank, who chairs a housing task force for the Greater Boston Chamber of Commerce. “We clearly have a marketplace in Massachusetts in which it has become very difficult for the people who [already] work for us to find reasonably affordable housing, let alone to find people to recruit from outside the area.”
And it hasn’t gotten that way by accident. Across the Greater Boston region, communities have used nearly every tool at their disposal to resist the pressure to build more housing, putting a squeeze on the supply pipeline that has helped drive the run-up in home prices (see “The price is (not) right,” page 99). Communities have markedly increased their lot-size requirements, so that new houses can only be built on one-, two-, even three-acre parcels of land in some communities. Many municipalities have used their regulatory powers to impose rules governing septic systems and wetlands that are far more stringent than those in state law. And 53 communities in Greater Boston now have some type of growth-control bylaw that simply caps the number of housing permits given out annually.
“We have a situation here not of market failure, but of regulatory failure,” says Greg Peterson, a Boston land-use attorney.
In recent years, consensus has been growing that in order to address the crisis of high-cost housing the state needs to address that regulatory failure in a way that will dramatically alter the pace and pattern of development. Voices from government, business, and the advocacy world all say that Massachusetts needs to produce far more housing in order to satisfy demand and temper torrid price appreciation. And in trying to meet that demand, they say, the state must reverse the development pattern produced by large-lot zoning, which is gobbling up land at a fierce rate and threatening the classic New England character of our cities and towns.
To hear state leaders tell it, they have such a plan, one that addresses the housing squeeze and the squeeze on open space all in one fell swoop. The only catch: It’s not clear that anybody is listening.
CATTLE RANCHER GOES GREEN
In out-of-state speeches, one of Mitt Romney’s leading laugh lines has been telling Republican crowds that, as the GOP governor of overwhelmingly Democratic Massachusetts, he sometimes feels like a cattle rancher at a vegetarian convention. But when it comes to growth and development, cattleman Romney has practically gone vegan.
On these issues, “smart growth” has emerged as the driving philosophy of the Romney administration. At practically every turn, administration officials tout the central tenets of the planning community’s answer to sprawl: concentrating development near transit stops, bringing residential development to city and town centers to mix with commercial uses, and building housing at greater density—a back-to-the-future embrace of the look and feel of older neighborhoods, which also spares from development land farther from city and town centers.
In mid-September, addressing a state-sponsored smart-growth conference in Worcester, Romney said that, while he’s “a big believer in the private sector,” it’s important to appreciate how the rules government sets for the market can have a dramatic impact, for good or bad, on the shape of private-sector development. To illustrate his point, Romney took the audience on mini-tour of US cities, with a running commentary he’s unlikely to be repeating on the out-of-state Republican fund-raising circuit.
Of downtown Salt Lake City, where he spent several years overseeing plans for the 2002 Winter Olympics, Romney said that with its highway-wide eight-lane roadways (designed, he said, to be able to turn around a covered wagon), the “sense of community” one might desire is “very hard to achieve.” The sprawling Houston area he described as “one strip mall after another”—a good place to shop, but not so much to live.
On the other hand, Romney said, Palo Alto, Calif., which was built under stringent zoning and design rules, right down to signage, has an allure—and a high-value commercial district—that businesses there surely appreciate today, even if they grumbled about the hoops they had to jump through to site their enterprises there. And Romney waxed almost poetic about the charm of Massachusetts city and town centers, sharing how he marvels each Monday morning at the elegant but tightly packed brownstones on Beacon Hill as he heads to the State House to start the work week.
Embracing that 19th-century image of Boston as a model of the way things should be, Romney has signed on to the newfangled smart-growth movement as the way to recapture that ideal and reverse the newer development patterns that threaten it. “I think there’s a growing consensus among legislators and community leaders that the vision which we call smart growth is the right vision for the Commonwealth,” Romney says in an interview.
The administration’s smart-growth vision took hold even before Romney took office, when he tapped Doug Foy, at the time head of the Conservation Law Foundation, to lead a new “super secretariat,” the Office for Commonwealth Development (See “The Sprawl Doctor,” CW, Spring ’03). The office oversees—and tries to integrate the actions of—three big arms of state government: the Executive Office of Transportation and Construction, the Executive Office of Environmental Affairs, and the Department of Housing and Community Development. Foy, who spent years advocating and litigating for smart growth through CLF, has seemed like a kid in a candy shop, using his sweeping authority to shape state policy, with Romney right behind him, ostensibly imposing parental restraint, but just as often, it seems, whispering to Foy to grab another fistful of sweets.
GETTING SMART
What exactly would this smart-growth ideal look like on a grand scale? Economist Edward Moscovitch recently set out to answer that question.
Moscovitch, who runs a Gloucester–based economic consulting firm, sought to quantify the impact of a sharp increase in housing production coupled with a dramatic reduction in the amount of land used per unit of housing. By roughly doubling production levels in the corridor between Route 128 and I-495, where much of the growth pressure in Massachusetts has occurred, Moscovitch projected that average home prices could be reduced over the next decade from roughly $400,000 to $314,000, in current dollars. Such a ramping up of production, according to Moscovitch, would not lead to an actual drop in prices. Rather, it would temper the rate of appreciation over time to a modest level, so that a $400,000 house, which would be expected to rise in value to approximately $600,000 by 2014 at current production levels, would instead be worth about $450,000 in 2014 in a market with a significantly larger supply of housing.
can’t afford a house there.
As for land use, Moscovitch said this doubling of housing production, if done with a return to the roughly quarter-acre lot sizes that characterize older neighborhoods, could be achieved using half the land that would be consumed even by today’s sluggish rate of production on the one-acre parcels typically used for new construction in these towns.
Perhaps his most surprising finding was that, despite the push toward greater lot-size requirements by many communities, there was very little premium paid by homebuyers for that added land. In Ipwsich, for example, his analysis of home sales since 2000 showed that for houses outside the town center, with lot sizes averaging about one acre, buyers paid only slightly more ($199 per square foot of finished space) for houses than in the densely built center ($191 per square foot), where lots average just one-quarter of an acre. In Andover, buyers actually paid a premium for houses near the center of town, where lots were less than half the size of those in the rest of town. Even in Ipswich, with its slight premium paid for more land, Moscovitch calculated that an additional acre on an already large lot adds only $9,600 to the price of a home.
“Why are we building homes on football fields if people aren’t actually paying more for the added acreage?” Moscovitch asked at a November forum where he presented the findings from the study, which was commissioned by the Massachusetts Housing Partnership and the Boston Foundation. The inescapable conclusion, he says, is that these are not market-driven patterns of development, but rather the products of regulations aimed at curtailing housing growth in general, and more modest-sized housing in particular.
“We’re achieving exactly the results we’d expect, given the policies we’re following,” he says.
NUMBERS GAME
Dramatically reducing land consumption while building enough more homes to tame the rapid run-up in prices may be worthy aims, but getting to them is another matter. When he took office in January 2003, Romney set a goal of doubling the number of housing permits issued annually in the state. The results so far fall well short of that mark. Total housing permits rose from 17,465 in 2002 to 22,477 in 2004. Administration officials have touted a much more dramatic increase in the subset of permits for multi-family housing, which indeed doubled, from 3,829 units in 2002 to 7,635 in 2004.
While certainly an improvement, these numbers hardly represent a rush of new housing, especially for families. Twenty-five percent of the housing units permitted in the in the Boston area during the three years from 2002 through 2004 came through the state’s anti-“snob zoning” law, known as Chapter 40B, or as part of age-restricted developments where occupancy will be limited to residents age 55 or older. In the region’s towns, as opposed to cities, that figure is 42 percent.
The 40B law has become one of the principal avenues for generating affordable housing in Massachusetts—and a flashpoint for suburban resistance to it. Under 40B, in cities and towns where less than 10 percent of the housing stock is deemed affordable by state standards, developers may skirt many of the zoning hurdles that communities use to review or restrict housing development. In exchange for streamlined approvals, the projects must set aside 25 percent of units as affordable for people earning not more than 80 percent of the median area income.
Local leaders across the region decry the law’s impact on municipalities that are ill-equipped to absorb large-scale developments, at the same time complaining that 40B projects can throw a wrench into efforts to plan rationally for growth. State officials counter that communities can avoid 40B projects if they provide for affordable housing voluntarily, since cities and towns below the 10 percent affordable housing threshold are now allowed to reject any unwanted 40B proposal if they are adding at least 0.75 percent annually toward the 10 percent goal.
Meanwhile, the rise of age-restricted housing has set off alarms among housing advocates who worry that communities are favoring projects for young singles and empty-nesters at the expense of housing for families. Last summer, the Citizens’ Housing and Planning Association, a statewide housing advocacy group, reported that more than 24,000 units of age-restricted housing had been built or permitted over the past five years, and that 30 communities had adopted specific zoning bylaws giving special consideration, such as added density, to age-restricted housing.
“It’s not just about increasing the supply. The question has to be asked, increasing the supply for whom, and where is the need greatest?” says Aaron Gornstein, executive director of CHAPA. “We’re still seeing a tremendous gap in meeting the housing needs of low- and middle-income families in this state.”
in Wakefield by promising
“no school children.”
At the root of the resistance to housing development is a web of factors, ranging from concerns over the loss of open space to worries about clogged roadways. Perhaps the biggest concern expressed by local officials, however, relates to schoolchildren and the drain they can cause on already strapped municipal budgets. Local officials say the added property tax from a new house—particularly anything short of the supersized “McMansions” that are currently in favor with many zoning boards—does not cover the added education costs that come with children in those homes. That claim lies at the root of the endless maneuvers by Massachusetts communities to keep out new residential development in general, but homes that could house schoolchildren in particular, moves that former state senator David Magnani once dubbed “vasectomy zoning.”
“Our housing policies, if you can call them policies, have become very anti-child,” says John Clifford, town administrator of Marshfield. “The general consensus is, any subdivision that could bring children to town will negatively impact the town’s finances. For a state that is losing population and losing younger population, that is a pretty damaging view.”
Says Kathy Bartolini, town planner in Framingham, “I joke that China at least has a one-child policy, because we don’t want any.”
Communities are acting in ways that are sound when it comes to the interests—and pocketbooks—of their own residents. But when bundled together, these prudent town-by-town decisions are making for a regional mess, say state officials, housing advocates, and conservation activists.
“There needs to be a system devised to steer them away from making those decisions,” says John Hamill, the chairman of Sovereign Bank New England, who chaired a recent commission examining the state of municipal finances in Massachusetts. “They’re making rational decisions that are hurting the Commonwealth.”
TOO SMART FOR THEIR OWN GOOD?
Whether it’s changing the equation to make families with schoolchildren seem like potential assets to a community, not liabilities, or promoting the expansion of downtown business districts instead of more strip malls on the periphery of town, state officials say the choices we make in the coming years will have enormous consequences for the state’s economic vitality and the preservation of the attractive qualities of Massachusetts communities. Doug Foy likens the task of changing behavior and development patterns that have set in over several decades to “turning a supertanker.” But he says communities have nonetheless begun nudging the ship’s nose in the right direction.
Apart from Chapter 40B, the state has little direct power over development decisions in Massachusetts communities. But those same communities look to state government to fund a wide array of local needs, and Foy is determined to get something in return for the goodies state government hands out. The centerpiece of that effort is a program called Commonwealth Capital. Under the initiative, now in its second year, communities that have made progress on various measures of smart-growth planning and development receive points in a scoring system used to determine the awarding of approximately $500 million in annual discretionary state funds for capital spending. These funds cover everything from municipal road and sewer projects to the acquisition and redevelopment of recreation or conservation lands. Points are awarded for changes such as allowing mixed-use residential and commercial development in downtown areas, as well as “inclusionary zoning” bylaws that require a portion of all new housing to be set aside as affordable.
“Short of having a legislative mandate that changes local home rule powers, this is an effort to say, well, you know the Commonwealth does have an agenda here,” says Foy. “We’d like to partner with you, but here is what you need to do to carry your load of the burden.”
Skeptics say the idea is right, but the scale is wrong. “It’s good to try to use the leverage,” says Gornstein, of the housing group CHAPA. “The question is, is it enough? We haven’t seen evidence of it. What’s missing from Doug’s pots of money is the big highway and road repair and bridge repair money. It’s missing local aid. It’s missing education funding.”
David Luberoff, executive director of Harvard’s Rapport Institute for Greater Boston, is even more blunt. “There’s just no evidence that it will have a tinker’s bit of influence on sprawl,” he says, adding that “the forces driving sprawl generally are so much greater” than the incentives available to entice communities to pursue less land-intensive development. “If you want to stop sprawl, sooner or later, you’ve got to regulate land use. And that’s been the third-rail issue that, for better or worse, no one has been willing to touch.”
While there has been no such move to regulate land use directly, the state is ratcheting up its oversight of land-use decisions involving 40B projects. Under new guidelines issued by the Department of Housing and Community Development, all 40B projects that do not involve the reuse of a building must be in a town center or near a transit stop, school, library, or retail or business center. Projects not meeting this criterion must satisfy at least five of nine “sustainable development principles,” which address such issues as density and environmental friendliness.
A central question in the debate over smart growth is whether the effort to steer development in this way will undercut the goal of increasing affordable housing production. A group of business leaders and housing advocates worry that the new guidelines could do just that, and they sent Romney a letter in the fall to make their point. “It is our strong belief that these new guidelines will significantly curtail the production of market rate and affordable housing, and therefore, will thwart your goal of substantially increasing housing production,” stated the letter.
“The smart-growth principles are spreading through every agency in the administration,” says David Begelfer, CEO of the Massachusetts chapter of the National Association of Industrial and Office Properties and one of the signers of the letter. “I think it’s a cancer. Central planning just didn’t quite work out for Russia, and I don’t think it’s going to work for Massachusetts. Smart growth is going to be no growth in some cases.”
State leaders insist that growing smart and promoting housing development is not an either-or proposition. The clamor from Begelfer and others, they say, is much ado about not much. “All this sky-is-falling stuff is nonsense,” says Foy. “These are very modest tweaks of the 40B criteria, which are essentially saying, ‘we’re not going to put the Commonwealth’s dollars in bad locations.’”
State officials say the vast majority of the 40B projects done in recent years would pass muster under the new guidelines, which will only weed out “sites that we probably shouldn’t have housing built on anyway,” says Thomas Gleason, executive director of MassHousing, the quasi-public state agency through which most 40B projects receive state financing.
“If it’s handled flexibly by the state, it should not penalize affordable housing developments,” acknowledges CHAPA’s Gornstein, who also signed the letter to Romney. “However, our concern is that you can interpret these guidelines in many different ways. One person’s smart-growth project is another person’s project that contributes to sprawl.”
‘GOLD STANDARD’
In Doug Foy’s mind the answer to sprawl and the housing crisis lies in getting back to the way things were, with a rebirth of “great town centers.” Foy insists that his Norman Rockwell-like vision, which he often defines by the yardstick of having new housing within walking distance of a local public library, is not misty-eyed nostalgia but a sensible vision for the state’s future.
In 2004, the Legislature jumped on the smart-growth bandwagon by passing a new zoning statute, Chapter 40R of the state’s General Laws, that promotes precisely the vision that Foy has been selling. Under 40R, which was modeled on the recommendations of the Commonwealth Housing Task Force (an ad hoc group of academic experts, business leaders, and housing advocates), communities receive incentive payments from the state in exchange for creating zoning districts that allow denser, mixed-use development near town centers and transit stations.
Commonwealth’s dollars in bad locations.”
The task force set a goal of 33,000 new housing units to be built in smart-growth districts over the next decade. Task force members say the new districts don’t have to spur the creation of many new residential units in any one community to bring the state’s housing market back into balance, putting prices on track to appreciate at the rate of inflation, not the double-digit increases of recent years.
“It’s like musical chairs,” says Boston developer Ted Carman, a member of the housing task force who was instrumental in drafting the 40R legislation. “You’ve got 100 people looking to sit down and there are only 99 chairs. Everyone knows it, so the value gets pushed way up. If there are 101 chairs, it’s easy.”
To conform to 40R—and qualify for state incentive monies—districts must allow single-family homes to be built at a density of at least eight homes per acre, or apartment or condominium complexes at a density of at least 20 units per acre. In addition, 20 percent of all units must be set aside as affordable housing. Communities are eligible to receive incentive payments ranging from $10,000 to $600,000, depending on the number of new housing units projected for the smart-growth district, plus an additional one-time bonus payment of $3,000 per unit at the time a building permit is issued.
In an interview with CommonWealth a year ago, Romney called 40R the “quintessential smart-growth strategy.”
“We are applying it. We are adopting it. And I think it’s going to be a huge benefit for generations,” said Romney (See “Meeting him halfway,” CW, Winter ’05). At about the same time, in December 2004, Foy, who calls 40R the “gold standard” for density in development of town centers, told The Boston Globe that it would be a good start if 20 to 50 communities adopted 40R over the next year.
A year later, however, it appears to be a standard that Massachusetts communities are hardly rushing forward to meet. As of December 2005, a year and half after 40R was signed into law, not a single city or town had yet approved a smart-growth district.
In fairness, regulations for 40R were only promulgated in March, and the process of adopting the new zoning districts, which will require the approval of town meeting in most cases, is arduous and time-consuming. But it’s not too soon to wonder whether 40R expects too much of municipalities, in terms of what they would have to accept—and what they would have to give up.
Kathy Bartolini, the planning director for Framingham, has been a champion of affordable housing for the large MetroWest town. Framingham has also been a leader in the movement to reclaim town centers as places not just to shop, but also to live, approving new zoning several years ago to allow residential development in the downtown business district. With all that, Framingham would seem a perfect candidate for the new 40R zoning. But Bartolini wants no part of it.
Her biggest objection is that once a smart-growth district is approved, any development proposal that conforms to 40R’s guidelines on density and affordable housing can be done “by right,” with the local community given very little say over what happens within the district’s boundaries. “It’s either their way or the highway,” says Bartolini. “I don’t know of too many communities that will even contemplate this.”
Daniel Fortier, the town planner in Dennis, has a similar reaction to the new zoning districts. Dennisport, one of the town’s five villages, is embarking on a major redevelopment effort that reflects many smart-growth principles. But Fortier worries that adopting 40R in Dennis could actually jeopardize the principles of good planning that the town is trying to follow.
Fortier says that under 40R’s density rules, for example, two commercial buildings on a main road near the Harwich town line could be replaced by up to 40 residential units, as of right, with no say on the part of the town. With residential rents in Dennis at about $1,200 for 1,000 square feet compared with about $700 for the same amount of commercial space, “if you could put 40 housing units in there, those two commercial buildings will be gone tomorrow,” he says. The town wants to bring more residential units into the Dennisport business district but wants to put them where they make the most sense, while preserving desirable commercial locations for business uses. “I want someone to come in and do it right, not just swoop in and make a quick buck,” says Fortier.
BIRD IN THE HAND
Because of the municipal apprehension over what would take shape in a 40R district, it seems likely that the first communities to adopt smart-growth districts will be those that already have a specific development on the table that fits 40R’s tight specifications. That’s exactly the case in the half-dozen or so communities that are actively weighing the adoption of 40R districts.
Plymouth’s Cordage Park, a one-and-a-half-million-square-foot waterfront industrial complex that was once home to the world’s largest rope manufacturer, is being redeveloped as a mixed-used site, with up to 500 residential units planned, along with commercial uses and a small amount of retail. The Plymouth commuter-rail stop is also located next to the property. Last summer, the town received a grant of $50,000 from the state’s Smart Growth Technical Assistance Program to hire a consultant to help map the potential benefits of designating the area as a smart-growth district.
In North Andover, officials are weighing a 40R district for the 160-acre site of the former Lucent Technologies facility there. In addition to leasing commercial space in the 1.8 million-square-foot Lucent building, Ozzy Properties, the local developer that acquired the site in 2003, wants to build 650 housing units on land abutting the former manufacturing plant. The town has formed a working group that is exploring the costs and benefits such a project would have on North Andover under the 40R zoning designation.
Not far from town leaders’ minds is the reality that housing could be proposed on the site under the anti-snob-zoning 40B statute, which would return to municipal coffers none of the incentive payments available for adoption of the new smart-growth zones. “It is a great idea that takes a lot of the sting of 40B away,” says Mark Coggiano, a North Andover selectman. The town stands to gain between $2 million and $2.5 million in incentive payments for full build-out of the 650 units. “It’s a one-time payment, but it’s $2 million that we wouldn’t have if this were a 40B,” says Coggiano.
But even Coggiano admits to a worry widely shared by municipal leaders: What if North Andover approves a smart-growth district and allows the new housing to be built, but the incentive payment isn’t there? Municipal leaders say they have come to be wary of promises from the state after watching the Legislature cut previously promised expenditures during tight budget times or simply because of a change in funding priorities. Communities view the promise of state payments with “justifiable skepticism,” says Clifford, the Marshfield town administrator.
That skepticism may be even more justified than local leaders think. The incentive payments for adopting 40R districts are to come from proceeds of the sale of surplus state property, deposited into a Smart Growth Trust Fund. However, as of mid-November, there was not yet any money in the fund. “In a totally technical sense, the funds are not in an account,” says Sarah Young, deputy director of the state Department of Housing and Community Development. But she says there will be money available as soon as pending real estate deals close. She calls the empty account “unfortunate, because it feeds the skepticism that municipalities are predisposed to have.”
State officials concede that the program has gotten off to a slower start than they had hoped. And Foy acknowledges that the number of housing units per acre required by the law is “probably a little too dense for some settings.” Even so, state leaders say that, with time, smart-growth zones will take hold. “Every day I hear about another community that’s interested and is calling our staff to get more information,” says Young, “Once the first community gets done, once they pass the zoning and it gets implemented, I think we’ll see a lot more interest.”
In October, Foy’s office announced a new resource to help communities along the smart-growth path. Anthony Flint, a longtime Boston Globe reporter who covered the growth-and-development beat, was brought on board as the state’s first “smart growth education director.” Flint says his job is primarily to “get the message out about what smart growth is” and help communities “if they want to move in these directions.”
GROWING MY WAY
Even if there hasn’t been quite the rush on the new smart-growth zones that Romney and Foy anticipated, more communities do seem to be gravitating toward smart growth on their own. In Natick, after developers sought a zoning variance for a small complex of townhouses along Route 27, “we discovered that smart growth was sort of happening without us,” Robert Foster, a member of the town’s planning board, declared at the September state conference on smart growth. “We decided we should run to the head of this parade and declare ourselves leaders.” (For more on development issues in Natick, see Town Meeting Monitor, page 33.)
In Westwood, the Boston real estate firm Cabot, Cabot, and Forbes is laying plans to develop a small village on 150 acres of land adjacent to the town’s commuter rail station. The project, which Cabot has dubbed Westwood Station to emphasize its transit-friendly location, will have a mix of housing, retail, and office space, and could ultimately include as many as 1,000 new residential units.
In Wakefield, a 136-unit condominium complex has sprouted two blocks from the town’s commuter rail station, with the town fully behind the project.
Still, not every community is embracing the call to “grow smart.” In Marshfield, residents have opposed the idea of rezoning the downtown area to allow residential development there. “I don’t think people want to live in a store over the pizza joint and smell cheese steak all night,” says anti-growth activist Joe Pecevich, who adds that downtown Marshfield suits him just fine as is. “I like it. It’s low-profile. It quiets down at night.”
Marshfield has been the scene of particularly bitter battles over development. The town spent four years and more than $300,000 unsuccessfully fighting a 40B project that will bring a 98-unit apartment complex to the site of a former drive-in theater. Despite the state urging for communities to take the initiative in planning and siting affordable housing so that they can fend off unwanted 40B projects, the idea hasn’t exactly taken hold in Marshfield. At town meeting last spring, residents voted to cut funds for a town housing coordinator whose job was to do just that sort of planning. In October, town meeting approved reinstatement of the $65,000-a-year position, but only by the slimmest of margins, 229 to 212, in a chaotic scene in the high school gymnasium, with opponents protesting that “yes” votes were being double-counted.
“Anyone who thinks you can block 40Bs from coming and don’t have to provide affordable housing—they’re nuts,” says Michael Maresco, a Marshfield selectman who supported reinstatement of the housing coordinator position. Of those who have battled against housing plans in town, he says, “They want to pull the drawbridge up and say, ‘I got mine.’ They didn’t come over on the Mayflower.”
Marshfield has gotten so expensive that only “CEO types” can afford the housing being built there, not “the teachers, fishermen, and guys banging nails,” says Jim Fitzgerald, a former selectman who gave up his seat last spring, in part because he was worn down by the housing battles. “We want people in the middle, but it’s not going to happen unless the town takes a proactive stance.”
Even in the places where towns are embracing smart-growth development, it’s not so much because communities are suddenly keen on more households with children moving in, but rather because they’ve been assured that such families won’t be part of the mix.
“When we were selling it at town meeting and at the planning board, a big point was that it’s definitely revenue-positive,” says Jeff Rhuda, business manager for Symes Associates, the developer of the Wakefield condo project. “It’s all one- and two-bedroom units, so no schoolchildren.”
Similarly, in a panel discussion titled “Selling Smart Growth” at the September statewide conference on smart growth, Joyce Moss, Westwood’s economic development director, said town officials have been able to sell residents on Westwood Station because the housing will consist largely of one- and two-bedroom units, targeting younger professionals without children and older empty-nesters. “Communities are not too crazy about families with children these days,” she said.
Perhaps the biggest smart-growth build-out being planned in the state—and one that will include housing for families—is the Tri-Town development now taking shape on the site of the former South Weymouth Naval Air Station. The 1,450-acre redevelopment, which extends across municipal boundaries to include not only Weymouth but also chunks of neighboring Abington and Rockland, will eventually include 2,855 housing units, 250 to 400 of which are slated to be single-family homes on modest-sized parcels.
“If you had said five years ago that a plan that included 2,800 housing units would be put forward, I’d say it wouldn’t have a chance,” says Weymouth Mayor David Madden. But the equation changed when with the project developer, California–based LNR Property Corp., agreed to assume the full share of municipal costs for educating all children in the new housing.
FINANCIAL EDUCATION
LNR’s decision to pick up the tab for educating children living in Tri-Town underscores the belief of many that the biggest obstacle to the new smart-growth districts relates to school costs. Communities already worried about the school costs associated with standard large-lot zoning would likely be more leery of zoning that allows more units per acre—and potentially more schoolchildren. The 40R legislation originally included a provision to address this by committing state funds to cover new education costs a community incurs in a smart-growth district, but the school-funding component was removed before final passage of the law in June 2004 as part of the fiscal 2005 state budget.
The school-funding adjunct to the smart-growth zoning law was reintroduced last year as a separate bill and, after winning unanimous approval in the House and Senate, signed into law by Romney in November. “We think this will remove one of the biggest barriers we have to getting zoning passed to permit higher-density housing,” says Sen. Harriette Chandler, a Worcester Democrat, who was the chief sponsor of new Chapter 40S law—which follows 40R in the alphabet soup line of state statutes governing zoning. (It could also prove to be something of a windfall for those who recently approved high-density development outside of the 40R label. The Tri-Town development, for example, is now exploring the rezoning of some of the project as a 40R district, something allowed under the law if it has been less than 12 months since a community made its zoning change. Tri-Town could be eligible for the one-time 40R bonus payments in addition to reimbursements under Chapter 40S.)
Ted Carman, the Commonwealth Housing Task force member and a principal architect of the 40S statute, says the school-cost payments are crucial if smart-growth districts are to be widely adopted and successful in producing significant new housing. He says the revenue-raising limits imposed by Proposition 21/2, combined with a school-funding formula that puts suburban communities on the hook for most of their own school costs, create an “extraordinarily perverse” set of financial incentives against new modest-priced housing in most Massachusetts communities. “And guess what?” he says. “They’ve all figured it out.”
With local school costs often consuming as much as half of a suburban community’s municipal budget, he says a $300,000 house that pays $4,500 in taxes, about $2,250 of which goes toward school funding, is a money loser for communities as soon as it has even one student living in it. With average per-pupil school costs in many suburban communities in the range of $8,000 to $9,000, only a fraction of which is picked up by the state, Carman says such towns would lose about $5,000 per child in the type of modest-priced housing envisioned for smart-growth zones.
Under the 40S statute, the state will make up the difference in additional net school costs in smart-growth zones, beyond the contribution of property taxes from those housing units. The Commonwealth Housing Task Force estimates that the annual school-cost subsidy would total about $35 million by 2014, an amount that the group emphasizes would total less than 1 percent of the projected total state education aid by that year.
Foy and others have suggested that the school-cost burden from new housing may not actually be nearly as great as the task force suggests. An analysis by the Executive Office of Administration and Finance of tax revenues from single-family homes built in 2000 showed that, in 170 of 215 Massachusetts communities studied, such revenue exceeded the incremental school-cost increase, while just 45 municipalities were net fiscal losers (See “Can housing plans pass inspection?” CW, Winter ’04).
It seems possible, however, that most towns came out ahead precisely because they have been following the sort of development policies that the state is fighting hard to change—those that generate only expensive homes build on large lots (which, in turn, generate property tax bills much higher than the $4,500 used in the example above). Denser development of modestly priced homes could well tip the financial equation against communities. For that reason, Chandler calls 40S “an insurance policy” that should give cities and towns the confidence to adopt smart-growth zoning.
“islands of success in a sea of failures.”
But Michael Hogan is one would-be developer who thinks the 40S insurance policy doesn’t provide enough coverage.
Hogan, a former mayor of Marlborough and director of the quasi-public state agency MassDevelopment, was hired two years ago as CEO of Wareham–based A.D. Makepeace. Makepeace, the world’s largest cranberry grower, is also the largest private landowner in eastern Massachusetts, controlling some 12,000 acres. Looking to diversify its holdings by developing housing, the company originally rolled out plans to build up to 6,000 homes on its land in Wareham, Plymouth, and Carver. Hogan was brought on board after the company’s aggressive development posture soured relations with the three communities. He is taking a slower, more diplomatic tack, a strategy he describes as “good theory applied in small doses.”
So far, it seems to be working. Plymouth recently gave the go-ahead for 65 houses, the initial phase of a 1,000-home plan employing a conservation-minded transfer-of-development rights approach. Under the scheme, Makepeace will agree to preserve as open space some of its land in the more remote sections of Plymouth bordering the Myles Standish State Forest in exchange for the right to build at greater densities than allowed by current zoning on land closer to the Cape Cod Canal.
But Hogan says any victories in getting housing built in eastern Massachusetts amount to “islands of success in a sea of failures.” And that, he says, is because of the way we fund our schools.
Makepeace recently commissioned research by a Denver–based consulting firm specializing in school finance issues. The report compared Massachusetts with 17 states, 15 of them regarded as “competitor” states with a significant presence of knowledge-based industries. Massachusetts relied more heavily on local funding of schools than 14 of the 17, with only New York and Pennsylvania in the same range as the Bay State, where local taxes account for nearly half (49.8 percent) of all dollars spent on public K-12 education. What’s more, that statewide average masks the far greater local share of school costs in suburban communities, which get much less state aid than high-poverty cities. In Plymouth, local taxes pay for 76 percent of school costs, making new housing with children an expensive proposition.
Because 40S only covers added school costs from housing built in new smart-growth districts, which many towns may not adopt and which are not necessarily the place where all new housing in the state should go anyway, Hogan says it is hardly the cure-all for resistance to new housing.
“Local government pays the majority of the freight for public education,” says Hogan. “Until we fix that, we’re never going to fix the housing situation.”
For different reasons, the assurances of school-cost reimbursement still leave Ziegler, head of the Massachusetts Housing Partnership, “kind of agnostic” about the state’s smart-growth zoning law. “I don’t think it’s a magic bullet, even with the education funding piece. It’s good to take it off the table,” he says of the school-cost issue. “But my experience is that the resistance [to new housing] comes from a much deeper place. You address one issue and people move on to another. You solve a traffic issue and it becomes schools. You solve schools and it becomes groundwater.”
HOME (OVER)RULE
So, Chapters 40R and 40S and other smart-growth policies notwithstanding, is there any real hope of spurring construction of reasonably priced housing for middle-class families?
“We just do not have the ability to build housing in Massachusetts, at least east of Worcester, that fits the median income buyer,” says Rhuda, the development manager for Beverly–based Symes Associates. “If we have 180 communities inside [I-]495 and 160 of them have decided they’re going to have two-acre zoning, who’s watching them? Who’s saying, ‘If you do that, this is the effect you’re going to have on the Commonwealth?’ That’s how we got into this mess.”
At the state smart-growth conference in September, which featured a considerable amount of preaching to the choir, Ziegler sounded a similarly discordant note. If we don’t “fundamentally rethink” the relationship between municipalities and the state “all the smart-growth policies in the world won’t make a difference,” said Ziegler. “The whole idea of local autonomy, which is as basic as it gets about Massachusetts government and New England, is almost fundamentally unsuited for making good housing decisions. The best tradition of New England—home rule —is also our worst enemy.”
Geoffrey Beckwith, executive director of the Massachusetts Municipal Association, says cities and towns have been scapegoated in the housing story, made to look like skinflinty NIMBYs when they are being pushed to accept more housing by the same leaders who have pulled back state support for local services.
“The simplistic answer is to say that communities need to change their zoning and create more housing,” says Beckwith. “They need to know they’re going to have the resources to do that, and they have no expectation that that will happen. The state is not a fiscal partner to cities and towns anymore,” he says, pointing to cuts in local aid that communities have had to absorb.
In November, the Massachusetts Taxpayers Foundation, a business-funded watchdog group, called for the restoration of that partnership by dedicating 40 percent of all annual state tax revenue to local aid payments. Such a scheme, a report from the group stated, would remove cities and towns from “the roller coaster of the state budget process” by ensuring that they don’t bear a disproportionate burden of cuts during tough fiscal times.
But a partnership cuts both ways. Perhaps what’s also needed is a new agreement that sets firm expectations of all communities in exchange for a more reliable stream of state funding. “We have to figure out a different social compact,” says Ziegler, raising the idea of a mandate, perhaps at least in the eastern half of the state, that communities allow for a certain percentage of housing growth each year, some of it affordable housing.
The politics of the situation do not seem particularly favorable to dramatic steps that would shake up the status quo, however. “People see home values going up 10 or 15 percent a year and they say, ‘I can live with this crisis,’” says David Begelfer, of the state’s industrial and commercial property owners association. “But they’re not looking down the road. No one is speaking from the bully pulpit saying, ‘this cannot go on because it’s going to affect our economy and all of our futures.’”
Even Romney wonders whether we may get to a point where some of the basic, time-honored structures of land-use control in Massachusetts will have to be put on the table. “There’s no question but that, if the 40R and 40S school financing proposals fail to stimulate adequate housing in the right places, people will begin to look at a more fundamental evaluation of local control,” he says.
It is, however, not a fight that he or any other state leader seems itching to have. “That’s been sacrosanct in our state for so long that starting there would be taking a giant leap,” says Romney.
Perhaps the patchwork of state smart-growth initiatives, designed to promote more housing production while reining in sprawl, will help patch back together the social contract that has taken such a beating during the last decade. If that happens, maybe high school history teacher Jeff Convery, an important part of the fabric of the Framingham community, could become a homeowner there, too. In the meantime, it’s hard to blame Convery for hoping that the rules of the game that have been so kind to the housing haves —and which the haves have fought so fiercely to protect—turn sharply in favor of the have-nots.
“We’re actually kind of hoping the bottom will drop out of this housing market,” he says.