Cambridge Housing Committee Gets Sobering Economic Analysis on Multifamily Zoning Plan

CAMBRIDGE -- June 27, 2024, Cambridge Housing Committee hears that no current multifamily development scenario is financially feasible under today's market conditions. Development economics consultant Carl Seidman presented an analysis commissioned by the city finding that three modeled scenarios for small and mid-sized Cambridge projects, including two six-story options with inclusionary units, all fall below developer return thresholds before land costs are even considered, citing high construction costs, elevated interest rates, and weak investor capital markets. City Housing Director Chris Cotter reported that roughly 42 percent of residents in Cambridge's inclusionary units hold housing vouchers and more than 50 percent have incomes below 50 percent of Area Median Income. Developers Phil Terzis of Oak Tree Development, Adam Siegel of SGL Developments, and Stuart Rothman of First Cambridge Realty Corporation described discretionary permitting processes and last-minute regulatory changes as major barriers, with Rothman saying his firm had to abandon a Bishop Allen Drive project after a new resiliency law made its ground-floor plan financially unworkable. Staff said draft zoning language is expected at the September City Council meeting, with a goal of adoption by November or December.