City Faces Shortage of Affordable Housing

This winter, as Harvard students continue to stew over the randomization woes, a growing number of, low-income families are finding that the cost of Cambridge housing is just a bit beyond their reach.

As the city's housing market soars through the roof, it continues to chip away at Cambridge's supply of affordable apartments.

Although the crisis is plagued by a lack of adequate data, a recent memo from the city's community development director indicates that up to 2,326 units of Cambridge's estimated total inventory of 6,980 low-income housing units could potentially be lost by the year 2000.

While these numbers may be subject to question, there is little debate over their consequences.

As prices rise, tenants are being forced to leave their homes and find housing in nearby communities.

For business leaders, city officials and subsidized-housing residents alike, the trend is indelibly altering the character of their hometown.

"Without an active role by the government, the city will gentrify very, very quickly," says Roger Herzog, housing director for the city's Community Development Department (CDD).

"We are trying to preserve the diversity of this city," he says.

Weight Off Washington

Cambridge's housing crisis is defined by the growing demand for market-rate housing and the highly publicized demise of rent control.

But perhaps the most fundamental imbalance in the Cambridge market comes from a nation-wide shift of responsibility away from Capitol Hill and into City Hall.

"What you are seeing is an attempt to move more of the funding--particularly in low-income housing--from the federal level to the local level," said Jonathan Miller, chief of staff for U.S. Rep. Joseph P. Kennedy II (D-Mass.).

Kennedy is the ranking minority member of the House Housing and Community Opportunity Subcommittee and has actively fought recent cuts in the budget of the Department of Housing and Urban Development (HUD).

Miller said that since 1995 the Republican-led Congress has eliminated between $7 and $9 billion from programs supporting low-income housing.

But cuts from the 103rd Congress administration froze funding for numerous HUD programs, including expiring-use housing.

Under most expiring-use programs, private property owners secured low-interest loans from the federal government that allowed them to build and manage affordable housing.

Most expiring-use building were built in the 1970's and financed with 20-year leases.

Many of those leases are now coming up for renewal. With spending flat-lined, they are not being renewed. Landlords who once charged affordable rents are being forced to charge the market price.

In Cambridge there are currently seven expiring-use apartment buildings that include a total of 1,577 units.

Proposing to add 50,000 Section 8 certificates nationwide, the federal budget released by the Clinton administration last week offers some rest for those weary of fighting cuts in housing.

But considering the city of Cambridge alone had 860 Section 8 certificates and 2,450 families on the waiting list in 1995--before rent control was completely eliminated--few expect the Clinton proposal to solve effectively any problems.

"It's fair to say it's a drop in the bucket," Miller says.

Section 8 certificates entitle their holders to live in private housing, paying only what they can afford. The federal government covers the difference between rent paid by the tenant and the market rate charged by the landlord.

Growing Housing Demand

While Cambridge shares the problem of dwindling federal funds with many U.S. communities, its dilemma is distinguished by a unique set of circumstances. One of the most devastating blows to Cambridge's supply of low-income housing was the recent loss of rent control.

Eliminated by a state-wide referendum in 1994, rent-control regulations were gradually phased out over the past two years.

According to many involved with the city's low-income housing industry, rent control was the city's primary means of providing housing for the poor.

"The city gave up on every policy other than rent control," says Robert H. Kuehn Jr., president of Keen Development Corporation, a large firm that owns and manages low-income housing in Cambridge and other Bay State communities.

While the rent-control regime was often lampooned for supporting well-to-do tenants like former Cambridge Mayor Kenneth E. Reeves '72, it did allow low-income families to remain in Cambridge.

Some estimates indicate that more than 2,000 of the city's 14,000 to 16,000 residents formerly protected by rent control will be unable to afford higher rents.

One of the few studies attempting to gauge increases in rent caused by the elimination of rent control was put together last spring by two third-year Harvard Law School students working for Professor of Law Duncan M. Kennedy.

According to the Law School study, the median rent for studio and one-bedroom apartments increased by $375, or 79 percent, after rent control was eliminated.

While they anticipate drastic increases, city officials say that it is too early to quantitatively gauge the effects of rent control.

Alex Potente, a third-year law student doing a separate study of rent control's impact on the Cambridge area, calls the methodology used "quick and dirty."

Yet Potente acknowledges that the numbers may reflect an accurate representation of higher rents in the housing market as a whole--not those that come simply about as a result of rent control.

Potente noted that the city's rising demand for market-rate housing could contribute to such a high increase in rent. With its proximity to Boston, high-quality public schools, relatively low crime rates and growing number of swank watering holes, Cambridge is quickly becoming one of Boston's most desirable communities.

Most conclude that Cambridge's problem is not simply the number of units, but rather the number of affordable units.

"We think the supply of housing in general in Cambridge is increasing," Herzog says. "But most of it is market-rate housing.

A Finger In The Dike

As many of its longtime residents are being forced from their homes, the city is actively trying to pick up the pieces of a myriad of housing programs cast astray by the state and federal governments.

"The city is taking a very aggressive approach to using its resources to increase the supply of affordable housing at a time when forces outside of our control are trying to decrease the supply," Herzog says.

In recent weeks there has been a flurry of activity aimed at maintaining low-income housing in the city.

In a major victory for housing advocates, HUD recently announced a $15 million grant to Cambridge.

The money is allowing Just-A-Start Corp., a local non-profit organization, to purchase a 273-unit former expiring-use apartment building on Rindge Avenue.

Advocates of low-income housing also have proposed a new 1.5 percent fee on all sales of residential property and a major bond authorization, in order to fund the non-profit purchase of former rent-controlled buildings.

According to Kuehn, the city does not see the private sector as a plausible solution to the problem of low-income housing.

"If you're a private developer, they make your life miserable," Kuehn says. "I've worked in 23 communities in this state and Cambridge is dead last."

Kuehn says he would like to maintain a high level of affordable housing, but is unwilling to shoulder the full weight of Washington's departure from subsidizing low-income housing.

"With any encouragement, we to keep [our projects] affordable," Keuhn says. "But we are in no position to be a private philanthropy.

Under most expiring-use programs, private property owners secured low-interest loans from the federal government that allowed them to build and manage affordable housing.

Most expiring-use building were built in the 1970's and financed with 20-year leases.

Many of those leases are now coming up for renewal. With spending flat-lined, they are not being renewed. Landlords who once charged affordable rents are being forced to charge the market price.

In Cambridge there are currently seven expiring-use apartment buildings that include a total of 1,577 units.

Proposing to add 50,000 Section 8 certificates nationwide, the federal budget released by the Clinton administration last week offers some rest for those weary of fighting cuts in housing.

But considering the city of Cambridge alone had 860 Section 8 certificates and 2,450 families on the waiting list in 1995--before rent control was completely eliminated--few expect the Clinton proposal to solve effectively any problems.

"It's fair to say it's a drop in the bucket," Miller says.

Section 8 certificates entitle their holders to live in private housing, paying only what they can afford. The federal government covers the difference between rent paid by the tenant and the market rate charged by the landlord.

Growing Housing Demand

While Cambridge shares the problem of dwindling federal funds with many U.S. communities, its dilemma is distinguished by a unique set of circumstances. One of the most devastating blows to Cambridge's supply of low-income housing was the recent loss of rent control.

Eliminated by a state-wide referendum in 1994, rent-control regulations were gradually phased out over the past two years.

According to many involved with the city's low-income housing industry, rent control was the city's primary means of providing housing for the poor.

"The city gave up on every policy other than rent control," says Robert H. Kuehn Jr., president of Keen Development Corporation, a large firm that owns and manages low-income housing in Cambridge and other Bay State communities.

While the rent-control regime was often lampooned for supporting well-to-do tenants like former Cambridge Mayor Kenneth E. Reeves '72, it did allow low-income families to remain in Cambridge.

Some estimates indicate that more than 2,000 of the city's 14,000 to 16,000 residents formerly protected by rent control will be unable to afford higher rents.

One of the few studies attempting to gauge increases in rent caused by the elimination of rent control was put together last spring by two third-year Harvard Law School students working for Professor of Law Duncan M. Kennedy.

According to the Law School study, the median rent for studio and one-bedroom apartments increased by $375, or 79 percent, after rent control was eliminated.

While they anticipate drastic increases, city officials say that it is too early to quantitatively gauge the effects of rent control.

Alex Potente, a third-year law student doing a separate study of rent control's impact on the Cambridge area, calls the methodology used "quick and dirty."

Yet Potente acknowledges that the numbers may reflect an accurate representation of higher rents in the housing market as a whole--not those that come simply about as a result of rent control.

Potente noted that the city's rising demand for market-rate housing could contribute to such a high increase in rent. With its proximity to Boston, high-quality public schools, relatively low crime rates and growing number of swank watering holes, Cambridge is quickly becoming one of Boston's most desirable communities.

Most conclude that Cambridge's problem is not simply the number of units, but rather the number of affordable units.

"We think the supply of housing in general in Cambridge is increasing," Herzog says. "But most of it is market-rate housing.

A Finger In The Dike

As many of its longtime residents are being forced from their homes, the city is actively trying to pick up the pieces of a myriad of housing programs cast astray by the state and federal governments.

"The city is taking a very aggressive approach to using its resources to increase the supply of affordable housing at a time when forces outside of our control are trying to decrease the supply," Herzog says.

In recent weeks there has been a flurry of activity aimed at maintaining low-income housing in the city.

In a major victory for housing advocates, HUD recently announced a $15 million grant to Cambridge.

The money is allowing Just-A-Start Corp., a local non-profit organization, to purchase a 273-unit former expiring-use apartment building on Rindge Avenue.

Advocates of low-income housing also have proposed a new 1.5 percent fee on all sales of residential property and a major bond authorization, in order to fund the non-profit purchase of former rent-controlled buildings.

According to Kuehn, the city does not see the private sector as a plausible solution to the problem of low-income housing.

"If you're a private developer, they make your life miserable," Kuehn says. "I've worked in 23 communities in this state and Cambridge is dead last."

Kuehn says he would like to maintain a high level of affordable housing, but is unwilling to shoulder the full weight of Washington's departure from subsidizing low-income housing.

"With any encouragement, we to keep [our projects] affordable," Keuhn says. "But we are in no position to be a private philanthropy.