Cambridge Developer Sues City Over Inclusionary Zoning Policy

A local developer sued the city of Cambridge on Tuesday, asking a state court to rule the city’s Inclusionary Housing Ordinance illegal over its requirement that condominium developers sell a fifth of their square footage for significantly below market rates.

The lawsuit, filed in Massachusetts Land Court on behalf of Columbia St, LLC by the Pioneer New England Legal Foundation, challenges the IHO’s requirement for developers to sell 20 percent of condominium floor space below market prices or rent the same fraction of apartment space at levels that are capped based on tenants’ income.

The requirements place an unfair burden on developers to combat Cambridge’s affordable housing crisis, Columbia St claimed in the complaint.

“The ordinance violates the long-standing legal principle that government cannot force a small subset of the population to shoulder public burdens that fairness dictates should be borne by the public as a whole,” lawyers for the developer wrote.

Cambridge spokesperson Jeremy H. Warnick wrote in a statement that Cambridge disputes the allegations, saying that the challenged provisions are a valid exercise of the city’s authority and consistent with the requirements of both the state and federal constitutions.

The IHO, which was first passed in 1998, was amended in 2017 to require that one-fifth of the square footage in large projects be reserved for affordable units. For Columbia St’s condominium project, these units would be sold at 30 percent of the resident’s gross income to residents earning less than 90 percent of the area median income.

The outcome of the lawsuit could be a bellwether for the fate of affordable housing requirements in other municipalities. Cities around the country — including neighboring Somerville — have implemented similar policies in the past few decades.

Warnick praised the IHO in an email, writing that it has “become a model for other communities looking to create affordable housing for low and moderate-income residents and ensure the socioeconomic diversity of the community is reflected in new housing.”

Cambridge claims that requiring large developments to incorporate below market-rate housing has contributed to the construction of 1,100 new affordable units for families living under area median income.

But the suit claims that the requirement violates developers’ property rights by asking them to make costly contributions to the city in order to build within its boundaries.

“Such a covenant amounts to a requirement that Columbia convey directly to the City, for no compensation, valuable private property rights as a condition of obtaining a building permit,” Columbia St’s lawyers wrote.

The complaint cited recent Supreme Court decisions to argue that Cambridge may only require developers in the city to pay money or donate property for a special permit if the city can prove the development will exacerbate housing affordability issues. Columbia St’s lawyers argued that the condominiums it plans to build will alleviate the city’s affordable housing shortage instead of worsening it by increasing the square footage of housing available in Cambridge. The complaint does not include the number of units that will be created by the development.

The suit also argues that the ordinance puts a disproportionate financial burden on developers to remedy the housing crisis.

“Cambridge is unfairly singling out real estate developers to bear the cost of solving the city’s affordable housing problem,” Frank J. Bailey, president of the Pioneer New England Legal Foundation, wrote in an online statement.

Columbia St owns a property of 20 units comprising approximately 18,000 square feet in Inman Square. According to the suit, the state of the current construction renders it “economically unfeasible” without significant renovation.

The developers hope to conduct a $57 million development, sizing the property up to 89,500 gross square feet. According to the suit, the affordable units would go for approximately $275 per square foot as compared to the estimated market rate of $1,140 per square foot, amounting to $11.4 million in lost profits.

High property and rental costs in Cambridge have long been a source of alarm, with residents frequently citing housing affordability as a top concern — and the list of people waiting for income-restricted housing exceeding 20,000 people in 2022.

Beginning in 2018, the city set a goal to build 12,500 new units of housing by 2030. Five years out from the deadline, only 3,100 affordable units have been constructed.

Following the passage of the amendment to the IHO in 2017, Cambridge has worked towards further altering its zoning regulations to incentivize developments. This February, the city legalized multifamily zoning citywide, and the City Council is set to weigh whether to increase allowed heights for residential buildings along two major corridors beginning Monday.

—Staff writer Summer E. Rose can be reached at summer.rose@thecrimson.com. Follow her on X @summerellenrose.