Business

Battles over housing, development, and jobs? It’s Somerville, of course.

Somerville, Massachusetts -- 5/8/2017 - Rubble from a construction site in Assembly Square. (Jessica Rinaldi/Globe Staff) Topic: 02somerville Reporter:
Jessica Rinaldi/Globe Staff
Rubble from a construction site in Somerville’s Assembly Square.

Somerville has emerged as Boston’s equivalent of Brooklyn — a blue-collar city transformed by young professionals and new development, but maintaining pockets of its funky, low-rent past.

Now, many here are trying to keep that balance and prevent Somerville — already the most densely populated city in New England — from being overtaken by high-cost housing. The result is a fight over two of the biggest developments the city has ever seen.

One battlefield is the huge Assembly Row complex, where some neighbors and some aldermen back a new municipal rule requiring that 20 percent of new housing in the city be set aside at affordable rents.

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The other battlefield is Union Square, where activists want the city to mandate even more housing and job benefits from the developers tapped to remake the commercial hub.

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The debate in both places is over just how much a changing city can demand of builders without scaring them off.

Versions of that question are being asked all over the region, in Boston neighborhoods such as Jamaica Plain and Dorchester, where city officials are writing new zoning rules to allow for more development, and in Quincy and Malden, where a surge of construction is transforming traditionally blue-collar neighborhoods.

Local officials should remember they have a strong hand to play in this development boom, said Marc Draisen, executive director of the Metropolitan Area Planning Council, and that now is the time to play it.

“I’d be wary of what developers say they can’t do,” said Draisen, whose group often advocates for more construction and affordable housing. “You shouldn’t ask for too much. But you shouldn’t ask for too little, either.”

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That’s the debate in Somerville. The city of about 80,000 has changed rapidly in recent years. Investors have scooped up and rehabbed close-packed three-deckers and two-family homes. Foodie joints and fancy gyms have sprouted among the auto shops and ethnic restaurants. The already dense city has added 3,000 residents in five years, and rents have climbed 20 percent.

City officials have set an ambitious goal to absorb the growth: 6,000 new housing units by 2030, which would expand Somerville’s housing stock by more than one-sixth. And last year the Board of Aldermen mandated that 20 percent of units in most new buildings be offered with affordable rents, the highest such requirement in the state.

“We want to grow, pretty aggressively,” said the city’s planning director, George Proakis. “And we want to do it in a way that’s consistent with our values.”

That’s being tested at one of the biggest apartment projects in Somerville. Federal Realty Investment Trust, which is building the 67-acre Assembly Row complex between Interstate 93 and the Mystic River, wants the city to waive the new 20 percent requirement on a 500-unit building it’s planning there.

The company argues that Somerville’s previous 12.5 percent affordable-housing rule should apply, because it was in force when Assembly Row was approved a decade ago. Requiring 20 percent, or 37 more subsidized units, would throw the apartment building’s $250 million budget out of whack, said Patrick McMahon, director of development at Federal Realty.

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“We’ve already locked in the costs,” McMahon said. “Either rents would have to rise or construction costs would have to decrease dramatically for us to be able to make it work.”

At 20 percent, McMahon said, Federal Realty would probably have to put the building on ice for awhile.

Some in Somerville are skeptical of Federal Realty’s fretting.

Alderman Matt McLaughlin, whose East Somerville ward includes Assembly Row, sees longtime residents being pushed out of his neighborhood by rising rents. Federal Realty, he noted, is a national developer that reported $249 million in profit last year and should be able to afford the additional subsidized units.

“If this project can’t go forward, so be it,” McLaughlin said. “We don’t need any more luxury units. We have thousands of luxury units. We need more affordable housing.”

But the city will never build the housing it needs — of any kind — if it scares off developers with too many requirements, said Stephen Mackey, president of the Somerville Chamber of Commerce. He urged the Planning Board, which deadlocked on Federal Realty’s request in April and is set to vote again Thursday, to consider the message that a “no” vote would send.

Somerville, Massachusetts -- 5/8/2017 - A man unchains his bike in Union Square. (Jessica Rinaldi/Globe Staff) Topic: 02somerville Reporter:
Jessica Rinaldi/Globe Staff
Soimerville’s Union Square is a nexus over the question of development and housing.

“We’re talking about 37 units here, and yes every unit is important,” Mackey said. “But we’re going to need Federal Realty and a lot of other developers to build a lot more.”

The debate is playing out in a slightly different form in Union Square, where the city wants to build 2.3 million square feet of housing and office space, capitalizing on the coming extension of the MBTA’s Green Line. There, the developer is more agreeable to providing community benefits; the question is how many.

The development team picked by Somerville to run the job, a partnership between Chicago-based Magellan Development and Mesirow Financial called US2, has agreed to a long menu of public benefits: street and sewer improvements and $5.5 million for the Green Line, new parks, and job training for Somerville residents — all contingent on the passage of new zoning that aldermen will consider later in May. And US2 officials have no qualms with the new 20 percent affordable housing rule. They want to make sure the new Union Square has room for the people who live there today, said US2 president Greg Karczewski.

As for further benefits, US2 is willing to negotiate with the neighbors, Karczewski said, but additional concessions could require trade-offs.

“Locking in all of these variables right now gives us predictability,” Karczewski said. “If it’s moving around and changing it makes it a lot harder to do and plan business.”

But Union Square is already changing fast — partly in anticipation of the redevelopment and the new Green Line station — with rents rising and longtime businesses being pushed out. That has a group of activists, known as Union United, pushing the city and US2 to provide even more protections for residents and existing businesses, including requiring as much as 40 percent of housing in the project be permanently affordable.

“We definitely feel a lot of pressure,” said Karen Narefsky, who helped organize Union United, which staged a protest Friday at US2’s Union Square office. “There are folks in our coalition who are getting displaced.”

City officials should stick to their guns, said McLaughlin, and demand all the public benefits they can get while Somerville is hot. He remembers warnings that requiring 20 percent affordable housing would squelch development. But every week he meets new builders pitching projects in his ward.

“Over and over we’re told we can’t do this. And then we do it, and everything is fine,” McLaughlin said. “The only regret I have is that we didn’t do more.”

SOMERVILLE, MA - 5/12/2017: -Members of the Union Square community will gathered Friday morning entered the US2 offices to demand a meeting with US2 president Greg Karczewski and ask him to commit to fulfilling the developer's promise to negotiate a community benefits agreement that has real resources behind it. Union United will occupy US2's offices and demand that the community's voices be heard. This is a peaceful event to raise awareness, sing songs and tell stories. (David L Ryan/Globe Staff Photo) SECTION: BUSINESS TOPIC 06somerville
David L. Ryan/Globe Staff
People from the Union Square area went to the offices of US2 last week to press the case for community benefits as the developer remakes the square.

Tim Logan can be reached at tim.logan@globe.com. Follow him on Twitter at @bytimlogan.Adam Vaccaro can be reached at adam.vaccaro@globe.com.