Nightmare at Newtowne Court

by Bill Cunningham

THURSDAY, APRIL 5, 2012—Is Cambridge’s largest family public housing development in MIT’s crosshairs?

That possibility has become a nightmare for many residents since March 14. That night a public meeting of the Central Square Advisory Committee viewed a slide showing half of Newtowne Court demolished and replaced by higher buildings facing Main Street between Portland and Windsor. That slide will be the center of attention when City officials appear at the Area Four Coalition meeting at the Pisani Center on Thursday evening, April 12.  (Click here to see the slide)

And this is only one element in a fateful convergence that also includes

• massive federal budget cutbacks and policy initiatives against public housing

• an ambitious plan by the Cambridge Housing Authority (CHA) to fill the funding gap

• a special commission appointed by the Governor to reorganize the way public housing is administered across the state

In response to these concerns, CHA Executive Director Greg Russ wrote today that “Any development proposal presented would need to convince Newtowne residents, the CHA, the City and the wider neighborhood that the proposed arrangement would be better than the current one for all parties involved.” (To read Russ’ complete statement click here   

March 14 was not the first appearance of the Newtowne nightmare. Late last fall planning consultants Goody Clancy displayed an architect's sketch at a Planning Board meeting showing the Main Street side of Newtowne Court replaced by a three-story "new urbanism" style structure, with retail and restaurants on the first floor. A note said this structure would "buffer the residential area from the busy commercial street" meaning Main Street. An architect explained that this was "just an idea."

The city council voted last year to ask for the City to do up a planning study of Kendall and Central squares. The City hired Goody Clancy to develop a “vision and plan” which they called “K2C2.” 

The Central Square Advisory Committee was appointed last fall by City Manager Robert Healy. Its job is “to advise city staff and a team of consultants in developing a vision and multidisciplinary plan for Central Square and the Transition Area along Main Street and Massachusetts Avenue between Central and Kendall Squares.” This committee began where another left off—the “Mayor’s Red Ribbon Commission on the Delights and Concerns of Central Square,” overseen last year by Councilor Ken Reeves.

Absolutely chilling

Area Four resident Jonathan King has a long history of involvement in policy struggles, notably against the B.U. Biolab and at MIT, where he works.  Recalling the March 14 hearing he wrote, “unlike the description of the activities of the prior Red Ribbon commission and their handsome giant booklet, this was clearly and explicitly a development proposal (as compared with an enhancement proposal). The development proposals presented ranged from building a low of 1,400 new units up to 2,100 new units (by lifting height and density limits). The open lots at Essex and Bishop Allen and Prospect and Bishop Allen are prime locations, as well as Newtowne Court. There was no mention of the impact of a 1,000-2,000 more vehicles in the dense Central Square area, nor of any possibilities of increasing public transit capacity. (If anything transit capacity in the years to come will be reduced).

“Absolutely chilling were the slides showing the demolition of half of Newtowne Court and replacement with denser, taller, upscale housing facing Novartis across Main St. This is the cold, corporate Kendall Square development model marching along Main Street to Central Square. At least a member of the Committee questioned whether any discussions had taken place with Newtowne Court representatives (or Area Four Coalition) and of course the answer was no.”

Before public comment began on March 14, Councilor Ken Reeves took the floor and asked that the slide be redisplayed showing an aerial schematic of Main Street from Central toward Kendall.

Councilor Reeves told the Members of the Advisory Commission and public present not to take what he was about to say as advocacy; he too was just talking about "ideas." He then pointed out that practically every parcel in Kendall and Central Squares and in between was either already built up or “already spoken for.” A glance at the slide would show the biggest space left for development was Newtowne Court; "and beyond that acres and acres more" of public housing (Washington Elms), only three stories high, with lots space in between the buildings. "That’s very valuable land," he said.

Then Reeves made reference to a meeting called by Councilor Marjorie Decker on January 31 between city councilors and CHA staff regarding the CHA's current "dispo" proposal to HUD for public housing throughout the city. Present at that January meeting were representatives of ACT, CEOC, and CASLS. Reeves recalled CHA Executive Director Greg Russ answering a question about the development potential of Newtowne Court—asked in light of the above-mentioned Planning Board sketch. Russ said he had not been approached by any developer but would be willing to talk to one who would commit to replacing lost units with units in some other location.

Just ideas or a trial balloon?

Reeves isn’t just talking through his hat. Once he championed the cause of tenants and was reviled by real estate lobbyists as the mayor who lived in a rent control apartment. But that was a long time ago; today he is a man who moves easily among real estate developers. Developers were well represented on the Red Ribbon Commission which he was instrumental in setting up.

Executive Director Greg Russ spoke at length about this matter at the CHA Board’s March 28 meeting. He reiterated his statement of January 31 that no developer had approached him. Indeed there is no evidence that any particular developer has any definite plan for the site. However the City apparently has spoken with someone at CHA. In remarks passed on to the Area Four email list earlier that day, city planner Iram Farooq wrote, “CDD [the Community Development Department] had a preliminary discussion with the CHA to inform them that this portion of Newtowne Court was included in the study area and to ensure that they did not see an immediate problem with the idea of exploring potential zoning recommendations at a conceptual level.” Farooq is the CDD’s point person for the “K2C2” public process.  

Farooq further explained that the CDD “would not support any proposal that resulted in reduction of affordable housing… the creation and preservation of which remains a priority for the City. The aim of the K2C2 project is to foster a vibrant Central Square, Kendall Square and Transition Area.” And she added, “The conceptual idea of additional density would allow for future infill development to create a retail edge along Main Street… along with opportunities to create additional housing, potentially including a mix of incomes to be added to existing Newtowne Court housing.” 

CDD and CHA agree that they would only accept development plans that resulted in no net loss of affordable “units.” The real question is: how and where do they want these “units” to be located? What is at stake is not units but land, very particular land that is vital to the particular communities that dwell in Area Four. On the other side is MIT-biotech’s insatiable appetite for expansion, the corporate landlords’ drive to maximize real estate revenues, and City Hall’s urge keep high-density development and its property-tax bonanza going for as long as possible.

The CHA dispo plan

The CHA, like housing authorities throughout the USA, faces a crisis with no clear exit: both the state and federal governments have made huge cuts in public housing programs and there is the prospect of even deeper cuts in the near future. Housing authorities are scrambling to find ways to meet this crisis. Many of their plans point straight to privatization. For example in Holyoke, the housing authority is planning to demolish a major development near the city center and selling off the site.

The CHA is trying to avoid that route by traveling part way along it. CHA’s plan has two main stages, based on federal (HUD) guidelines. 

The first stage is to get HUD permission for "dispo." Dispo means disposition, which means removing properties from the public housing stock. The CHA plan is not to dump their developments. They hope to keep the housing affordable by converting it to “project-based Section 8” housing. To facilitate this, CHA sells the developments to legal entities (“non-profit affiliates”) created and controlled by the CHA Board. CHA has promised to continue operating them under existing public housing policies—for tenants, that means the same rents and rights as before.

Why are they doing this at all, if nothing is going to change? Well, read on.

For this plan to work, CHA needs to get millions of dollars worth of new resources from Washington in the form of vouchers. So the second stage is to ask HUD to give CHA a pile of "tenant protection" vouchers to replace subsidies lost when the properties are no longer public housing. There is no guarantee that HUD will grant enough vouchers to cover all 2,108 apartments in the "dispo." In fact some CHA staff and one commissioner have expressed doubt that they will get that many vouchers; they may get far less than they need; it's possible they won't get any.

One reason for concern: lots of other housing authorities have the same idea and many are ahead of CHA on HUD’s waiting list. Furthermore, some politicians and officials will not be happy when they notice how housing authorities are trying to wiggle out of their planned executions by using voucher resources that were intended to go to private developers.

The project-based voucher: you can’t take it with you

Project-based vouchers do not belong to subsidized households; instead they are permanently attached to particular buildings. Large subsidized buildings owned by private landlords and nonprofits, including those built under "inclusionary zoning," need project-based vouchers to make their financing work. Almost invariably such housing involves state and federal "Low Income Housing Tax Credits” (LIHTC). Private investors get involved to take advantage of the LIHTC. Investors like to see a dependable revenue flow—and that's what the project-based vouchers guarantee. They usually come with long-term contracts, like 30 years. Since Wall Street invests in this stuff, it's the last thing any government will cut out of a housing budget.

What CHA hopes to do is to turn their developments into that sort of LIHTC housing. They have already done similar things with four developments: JFK on Essex Street, LBJ on Erie Street, Jackson Gardens at Prospect and Harvard, and Lincoln Way off Walden Street. These are operated as public housing, funded In part by public  housing operating subsidy, Technically they are owned by Limited Liability Companies (LLCs) and not by the CHA. But CHA controls the LLCs and still owns the land under the properties.

As long as a place like Newtowne Court is public housing it cannot get private money and you can't put vouchers into it. Once it is removed from public housing, you can bring in LIHTC investors and project-based vouchers. You can even mortgage it.

CHA says that if they don't get the vouchers they won't go ahead and exercise the right to dispose. At the request of residents, they put that in writing. If they only get enough vouchers to cover one or two developments, they say they won't do the others.

But in fact, what if CHA doesn't get enough vouchers to make their plan work? We're not just talking about Newtowne Court. We're talking about practically all the public housing left in the city. And we're talking about CHA raising some $300 million for capital and maintenance work in the face of the biggest budget cuts in HUD's history.

Newtowne Court is in good shape. Why propose it for dispo?

CHA is one of around 30 housing authorities in the USA that can make many of their own rules without getting special permission from HUD. So for example CHA could raise money from one development (like Newtowne Court) and use the proceeds to fund repairs on another (like Manning Apartments). That’s why the section 8 dispo option might be used at Newtowne first even though that development doesn’t have the most urgent needs. In fact it may be easier for CHA to attract investors to developments in better condition like Newtowne Court and Woodrow Wilson than to the places that need the most work, like Manning and Millers River.

The program under which CHA can do this is, for arcane reasons, called "Moving-To-Work" (MTW).

HUD has already granted CHA authority to take 275-400 of its existing tenant-based (mobile) vouchers and convert them to project-based vouchers attached to buildings that are now public housing. And CHA might do this to help make their plan work. But by the same token if the dispo-voucher plan doesn't work out, CHA might be tempted to make a deal based on the location value of Newtowne Court and use the cash raised to build a high-rise somewhere else for the 1:1 replacement. Indeed selling off some property was the worst-case option presented in her November memo to the Board of Commissioners by Margaret Donnelly Moran for the CHA Planning & Development Dept.

Governor’s commission comin’ at ya

This is a dangerous road that CHA is walking, but they don't feel that they have much choice. It’s a road that is being followed all over the country, not just here. (Just like urban renewal and the urban highway program happened all over the country 50 years ago.)

And there is yet another ball to keep our eye on! On January 25 the Governor set up a commission to look into public housing reform. (All public housing authorities like the CHA are chartered by the Commonwealth.) The ideas they are to consider include expediting mixed-income redevelopment of State-funded public housing and regionalizing the state's 250 local housing authorities. If that should happen, is it possible that "replacement units" offered for Newtowne Court and/or Washington Elms might not even be in Cambridge? 

The Governor’s commission will hold one public hearing for eastern Mass. It has been scheduled for April 27th at DHCD, 100 Cambridge Street, 2nd floor Conference Room A, from 1pm to 3pm. Mass. Union of Pubic Housing Tenants is calling for a large resident turnout. at 100 Cambridge Street in Boston on April 27. (See the calendar on the ACT home page for details) The commission has been given a short leash: it is supposed to report back to Governor Patrick by June 11. The Central Square Advisory Committee should be winding up its six month’s mandate around that same time.