Assembly Row Development Deadlock Underscores Affordable Housing Debate

SOMERVILLE, MA – A meeting of the Somerville Planning Board came down to the wire Thursday as a last-second continuance pushed a much-debated affordable housing decision to next month. Federal Realty, the developer behind a planned apartment complex at Assembly Row, is seeking to waive the city's affordable housing requirement.

The developer agreed to come back to the issue at a May 18 meeting after board members were deadlocked on a decision and the chair was poised to submit the deciding vote, Ward 5 Alderman Mark Niedergang said.

Federal Realty first proposed a master planned unit development for two blocks of Assembly 10 years ago. According to Niedergang, that development consists of a commercial building and a 500-unit apartment complex.

But those plans have stalled as Federal Realty seeks to waive the city's requirement that 20 percent of the complex be allotted for affordable housing units. The Somerville Board of Aldermen raised the affordable housing requirement for a building with more than 18 units from 12.5 percent to 20 percent last year. Under city law, the developer behind an area that is master planned may petition the Planning Board for a waiver if the zoning changes.

"They're doing what they have every right to do," Niedergang, who has been outspoken against granting the waiver, said.

But Federal Realty faces an uphill battle in currying public support. Niedergang told Patch he's received "hundreds of emails" from residents opposing the waiver, and 75 people attended a Planning Board hearing earlier this month.

And if the waiver is approved, Somerville would miss out on 37 units of affordable housing, according to Niedergang.

"People just don't feel that the Planning Board should grant the waiver," Niedergang said. "Lots of people want to live here and want to stay here."

It's emblematic of a harsh reality in Somerville and other greater Boston communities, where longtime residents of once working-class neighborhoods struggle to keep up with the rising cost of living. Niedergang said the idea behind raising the affordable housing requirement was that as housing prices rose, so were developers' profits.

"We don't want to lose the mixed-income aspect of the city," Niedergang said. "[Developers] are making a lot of money because housing prices are going up. They should share that with the community."

The changing demographics of Somerville and communities like it is an issue that Patrick McMahon, director of development at Federal Realty, said the company understands.

"We're very sympathetic to the affordable housing crisis," McMahon said. "It's a crisis for the region."

According to McMahon, the original public benefits package Federal Realty and the City of Somerville agreed upon more than a decade ago has contributed a great deal to the city's development. Under the $240 million deal, $15 million went to the Assembly Row T stop, $4.2 million went to the design and construction of Baxter Park, $2 million was used for the Ten Hills sewer replacement and other projects around the city were funded by the benefits package.

The largest portion – a little over $117 million – benefited infrastructure, open space and environmental initiatives.

McMahon said if the company was to make the same investment today, it would still commit the $240 million but would have to discount the valuation of the land or not contribute as much to one of the projects, such as construction of the T or a state park.

To subsidize the difference between 12.5 percent and 20 percent, McMahon said the developer would either need rent to increase dramatically or construction costs to decrease. Until then, Federal Realty is on hold.

"We're certainly not giving the city an ultimatum," he said. "We're not going anywhere. We either need to secure the waiver or one of those market trends to happen."

McMahon said Federal Realty has worked closely with the Board of Aldermen, including when the affordable housing requirement was changed. The waiver, according to McMahon, was intended to be a "vehicle" to solve for the developer's inability to unravel a public benefits package that was already in place.

"We have an open dialogue with Mark and [Ward 1 Alderman] Matt McLaughlin," McMahon said. "We're sympathetic to their push for more affordable housing."

The Planning Board will likely decide whether or not to grant the waiver at the May 18 meeting.

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