The panelists at the real estate event in Somerville were just about to call it a night when somebody finally raised the question on everyone’s minds.
Others stuck to the theme for that NAIOP Massachusetts event in July: the future potential for the Assembly Square area, already a shining example of the city’s boom times. But James Gray, a principal at architectural firm Stantec, broached a tougher topic: How will the new administration affect development in the city?
It’s the million-dollar question hanging over Somerville.
That’s how Patrick McMahon, an executive at Assembly developer Federal Realty Investment Trust, framed it as he responded to Gray. And McMahon couldn’t have summed up the situation more succinctly.
During the past decade, developers have cashed in on Somerville’s proximity to Boston and Cambridge, launching a wave of new housing, office, and lab space with the backing of Mayor Joe Curtatone. With the longtime mayor about to head off to lead the Northeast Clean Energy Council, developers are getting anxious that they may soon no longer have such a good friend in City Hall.
Four candidates face off to replace Curtatone on Tuesday in the preliminary election, with two emerging to compete in November. There are three progressives in the mix: City Councilors Will Mbah and Katjana Ballantyne, and Mary Cassesso, an executive at Cambridge Health Alliance. And there’s one self-described independent, local businessman Billy Tauro, who endorsed Donald Trump for president in 2016.
Developers have become a convenient target in the campaign — no surprise in a city wrestling with concerns about housing costs and displacement. After all, Somerville’s median home price has essentially doubled during the past decade — rising to $917,500 last year for single-family homes and $777,000 for condos, according to The Warren Group — as the once-blue-collar city has attracted waves of well-paid life science and tech workers.
Mbah and Ballantyne have disavowed donations from for-profit developers; Cassesso says she doesn’t want money from developers who do business in the city. Tauro wants to make life easier for them, but businesspeople don’t expect him to win over this liberal stronghold of a city, even if he makes it to the final round.
Somerville has become ground zero for construction unions battling to gain traction outside of Boston. Until now, project labor agreements for the most part have been missing from major projects in Somerville, unlike in Boston. Such agreements, known as PLAs, all but assure that the lion’s share of work on a project will go to union contractors, sometimes driving up costs but also raising the bar for wages and benefits. Pro-union factions, including Senator Bernie Sanders-aligned Our Revolution Somerville, have gained political influence, backing candidates who won a majority of seats on the City Council in 2017 and at times providing a counterpoint to Curtatone’s pro-development agenda.
The next administration will likely be far more amenable to union interests; Cassesso, Mbah, and Ballantyne all say they’d like to see PLAs for major projects in the city. Mbah, considered the most left-leaning of the three, says these agreements support good-paying union jobs and ensure the highest quality of construction work. Ballantyne offers similar reasons, saying PLAs represent an important way for Somerville to uphold progressive values, such as the fair treatment of workers.
Then there’s the issue of affordable housing requirements. In 2016, city councilors voted to mandate that 20 percent of units in larger new residential developments be income-restricted. (Cambridge has since joined Somerville at 20 percent, while Boston remains at 13 percent.) The following year, with Curtatone’s backing, city officials waived the new higher requirement for buildings at Federal Realty’s Assembly Row that had already been approved but not yet built, a move that sparked considerable controversy.
In all likelihood, it will be tougher for developers to get much of a pass in the future. Mbah has made it clear he wants to raise the top requirement above 20 percent; Cassesso says she is open to doing so if it doesn’t deter new housing construction, while Ballantyne says she is open to it if the community is supportive. The most likely next target: 25 percent.
The three progressive candidates also support bringing back rent control or rent stabilization in Somerville if the state Legislature would allow it — another stance frowned on by many developers.
From builders’ perspective, Curtatone is a tough act to follow.
He worked to shed the city’s “Slummerville” reputation and lessen its heavy reliance on residential taxes by broadening its commercial base. The city issued building permits for 8 million square feet of construction during the past decade, the equivalent of four John Hancock towers, and Curtatone helped attract a variety of private-sector employers to a city in desperate need of them, from clean-tech startups at Greentown Labs to big names such as Puma and Partners HealthCare (now known as Mass General Brigham). The mayor also pushed Federal Realty to subsidize the city’s first Orange Line station, at Assembly, and played a key role in ensuring the Green Line extension to Union Square and Tufts University will finally come to fruition.
The city’s breakneck pace of building will ultimately slow down, regardless of who sits in the mayor’s office, said Stephen Mackey, head of the Somerville Chamber of Commerce. But not yet. There’s room left to build at Assembly. Taller buildings are coming to Union Square. And a new Green Line stop should finally spark new construction in the Inner Belt industrial area.
It’s been challenging to handicap the mayor’s race.
Union organizers such as Rand Wilson fully expect one of the progressives to win, and the City Council to swing even further to the left. Wilson sees Somerville as becoming a more union-oriented community, both in construction and in broad support for unions as a way to address economic inequities in the city. PLAs could soon become a matter of course, as they are in Boston, and the affordable-housing requirements could increase.
It all sounds like more headaches for developers, right?
Well, at that NAIOP Massachusetts event in July, McMahon tried to sound enthusiastic. The candidates realize the need to expand Somerville’s commercial tax base, he said, to reduce the burden on residential taxpayers and create more jobs.
Not everyone in the development industry, though, shares McMahon’s optimism for what comes next at City Hall. Now, it’s the voters’ turn to try to answer that million-dollar question.