HNA Presentation 2021-Barrett v2 — File 213322

City of Somerville 2021 Housing Needs Assessment Main Findings & Recommendations 1

Background • The Somerville Zoning Ordinance (SZO) requires that a Needs Assessment and Financial Feasibility Analysis be done to determine the suitability and performance of the provisions of Article 12 for potential revision and improvement. • The Housing Needs Assessment Report “…focuses on housing affordability and the degree to which housing costs exceed what people in Somerville and the Boston Metro Area can pay.” 2

Project Team Consultants • Barrett Planning Group LLC • Community Circle City Housing Division Staff • Michael Feloney, OSPCD Housing Division Director • Bryant Gaspard, Program Specialist-Fair Housing, Inclusionary Housing, Operations Support (former) • Morena Zelaya, Housing Policy Coordinator 3

Methodology ● The Housing Needs Assessment (HNA) draws on data from public and private sources and interviews with many individuals and organizations familiar with the City. ● Barrett Planning Group reviewed rental listings for units in Somerville’s predominant form of housing – two-family to small multifamily buildings – as well as listings for larger projects- both modest, older properties and new, “luxury” product that has recently been added to Somerville’s housing inventory. 4

Demographic Profile: Population and Household Characteristics 5

Population Demographics ● The American Community Survey (ACS) estimates 80,906 residents making up 32,802 households. ● Percentage of people 18 to 34 years is nearly twice that of the state-wide percentage. ● Under-18 population is relatively small. ● The Metropolitan Area Planning Council (MAPC) estimates gain of 12,000 people by 2030. ○ Highest growth among 25–34-year-olds 6

Population Characteristics: Race, Ethnicity, and Immigration ● As percentage of total population: ○ Non-Latino Whites- 68.2% ○ Hispanic/Latino- 12.4% ○ Asian- 10.2% ○ Black- 5.6% ○ Two or More/Other- 3.8% ● 1/4th of total population is foreign- born. ● 30% of residents do not speak English at home. 7

Population Characteristics: Disability • Approximately 6,400 residents have disability o Defined as a physical or mental impairment that substantially limits at least one major life activity. • 23% poverty rate o 11.5% for the rest of the population • Median earnings only 46% of median earnings for population without disability. 8

Household Characteristics: Household Types, Tenure, Age, Size • Renters make up 66% of the 32,802 households. • 34% of all households and 43.5% of all renters are between 24-34 years old. • Average of 2.37 people per household. o 31% of households made up of non-relatives. o Neighborhood tracts with highest rates also have higher rates of overcrowding. • % of one-person households in rental housing about the same as % among city-wide households. o Different than state/metro, one-person households mostly in rental units. 9

Household Characteristics: College & Graduate Students ● Number of students living in Somerville has grown steadily over last 50 years. ● Tufts University is largest, and only, school that owns property in the city. ● University Accountability ordinance requires universities that own or lease property in Somerville to maintain directory of students and information on number of off campus students. ● Per 2020 Tufts Accountability Report ○ 1,339 students lived in Somerville ● Per Harvard 2000 Accountability Report ○ 1,392 students lived off- campus in Somerville. ● Stakeholders indicate student population has declined significantly during Covid-19 pandemic. 10

Household Characteristics: Household Income ● Over 40% of City’s households with incomes over $125,000/year. ○ 30 years ago it was only 15%. ● 16.8% of households with incomes below $30,000/year. ○ 30 years ago it was 22%. ● Census Bureau estimates 1,139 families, 8.2%, live below federal poverty threshold. ● Highest-income households are young families living around Porter and Davis Squares. ● Lowest-income households are women ≥ 65 who live alone. 11

Population Characteristics: Per Capita Income ●Significant differences between per capita income between White, non-Latino residents and minority residents. 12

Household Characteristics: Low-Income Households ● Per the 2013-2017 HUD Comprehensive Housing Affordability Strategy (CHAS) data, 37% of Somerville households have incomes below 80% of AMI ○ Majority of low-income households, 73%, are renters. ● CHAS data suggests lowest-income cohort shrinking. ○ Most growth in >100% AMI group. ● Increasingly difficult for low- and moderate-income renters to find affordable housing. 13

Household Characteristics: Low-Income Households Cont. ● Homeowner housing cost burden has decreased slightly. ● Increased among extremely low and very low-income renters. 14

Housing Supply & Demand Analysis 15

Analysis: Housing Supply & Age ●34,633 housing units with 32,802 households. ●Over 50% are 2–4-unit multi-family buildings. ●64% of all units built before 1940. 16 • 5% have been constructed since 2000. o Some of these new constructions resulted in tear downs of older units that were “naturally occurring” affordable units. • Environics Analytics estimates Somerville will grow to as many as 36,956 units housing, 38,589 households in next several years.

Analysis: Housing Size, Amenities, & Quality ● Housing units tend to be small. ● Over 64% of all units are between studios- two-bedroom units. ○ 72% of these units are renter- occupied. ● 52.4 percent have experienced at least one of four housing problems (versus 40.8 percent of families regionally): ○ Incomplete plumbing facilities and/or kitchen, more than one person per bedroom, or cost burden greater than 50 percent. ● Few units with 3+ bedrooms. Families with children crowd into 1-bedroom units. ○ Overcrowding has been estimated to be an issue in about 375 units, mainly rental units occupied by extremely low-income households. ● Larger units command higher rents. ● Condominiums generally larger, but space comes at a cost. ○ Average sale price is approximately $650/sqft 17

Analysis: Vacancy Information ● 1.9% vacancy rate per 2019 ACS . ● 1% homeownership vacancy rate. ● Rental vacancy rates could reach nearly 20% due to Covid-19 but data is changing rapidly. ● Less than 2% vacancy rate in renovated small properties. ● Nearly 900 units vacant due to other reasons such as foreclosure, short- term rentals, student housing, ○ Represents 49% of vacancies 18

Analysis: Rental Affordability Gap ● Average rents among differing types of properties show market has high-barrier for entry. ● Even some households about 100% AMI may have difficulty. 19

Analysis: Homeownership ● Somerville mainly renter-occupied. ● Demand for homeownership options has been steadily increasing. ● 1,130 rental units converted to condo between 2010-2017 ○ Total condo inventory increased by 787 units between 2015-2019 due to new construction & conversion. ○ 82% of all residential sales in 2017 were condos. ○ Median list price for condos in Feb 2020 was $699,00. ○ Evidence of SFDs redeveloped into condos. 20

Analysis: Affordable Housing Demand 21

Housing Policy 22

Inclusionary Zoning Ordinance As of April 2021, Somerville’s IZO had led to the creation of 310 affordable, occupied housing units • Purpose of IZO: o To create a stock of affordable housing that is available to qualifying households over the long-term. o To stabilize the cost of housing, including utilities, parking, and on-site amenities for households that are unable to afford market- rate housing prices without becoming cost burdened. o Targets Very-Low to Moderate income renter households. o Targets Low-Middle income owner households. • 2019 updates now require 20% inclusionary units for projects of 4 of more units. • Significant demand for affordable units at 50% AMI or below. 23

Somerville Affordable Housing Trust Fund • Can fund housing up to 110% AMI • Because of Community Preservation Act (CPA) SAHTF has invested ~$16M in housing assistance since 2015. • Other sources of funding include linkage & fractional payments paid by developers. o Fractional payments are required when inclusionary calculations yield less than whole number of units. 24

Perspectives, Takeaways, & Key Findings 25

Stakeholder Perspectives & Takeaways ● Most pressing needs are additional units, larger units, and units affordable below 80% AMI, especially for families. ● More affordable, small units to cater to students and young professionals. ● Shortage of accessible housing for people with disabilities. ● Older adults have difficulty aging in place. 26

Questions? 27