What's Happening?
Old North Development (OND), led by Adam Siegel and Brendan Seaver, has filed a lawsuit against the City of Cambridge, Massachusetts, challenging the city's inclusionary housing ordinance and building permit fees. OND is seeking to replace a Walgreens
near Porter Square with a six-story, 71-unit apartment building. The city is reportedly withholding a building permit until OND agrees to permanently designate 20% of the development, or 14 units, as affordable housing. OND argues that this condition constitutes an unconstitutional taking of private property without compensation, as the project already complies with Cambridge's zoning rules 'as of right' and does not require any special permits or variances. This lawsuit marks the second such challenge to Cambridge's inclusionary housing requirement since December, with another developer, Columbia St. LLC, also contesting the 20% rule. The Massachusetts Attorney General’s Office has joined Cambridge in defending the requirement in the Columbia St. LLC case, citing potential implications for inclusionary housing rules statewide. Cambridge spokesperson Jeremy Warnick stated the city is reviewing OND's complaint.
Why It's Important?
This lawsuit has significant implications for urban development and affordable housing policies in Cambridge and potentially across Massachusetts. If OND's challenge is successful, it could undermine the ability of municipalities to enforce inclusionary zoning ordinances, which are crucial tools for increasing the supply of affordable housing in high-cost areas. The outcome could set a precedent that impacts how developers approach projects in cities with similar requirements, potentially leading to fewer affordable units being built or requiring cities to find alternative funding mechanisms. For developers, the case highlights the financial pressures and legal complexities associated with affordable housing mandates, as OND claims the stalled project is costing approximately $23,600 per week. The challenge to the building permit fee also raises questions about the appropriate scope of municipal fees, with OND arguing the $450,000 fee is an unauthorized tax rather than a legitimate cost recovery measure. The Massachusetts Attorney General's involvement in a similar case underscores the broader statewide interest in upholding inclusionary housing rules.
What's Next?
The lawsuit filed by OND 1740 Investors LLC is currently pending in Middlesex Superior Court. The city of Cambridge is reviewing the complaint, and it is expected that legal proceedings will continue to determine the constitutionality of the city's affordable housing requirement and the legality of its building permit fees. OND has expressed a willingness to negotiate a resolution with the city to keep the project on schedule, indicating a potential for out-of-court settlement discussions. However, given the Massachusetts Attorney General's involvement in a similar case, the city may be inclined to defend its ordinance vigorously to protect the integrity of its inclusionary housing policies. The court's decision will likely influence future development projects in Cambridge and could impact the enforcement of affordable housing mandates in other communities throughout Massachusetts. The resolution of the financing 'catch-22' involving Cambridge Savings Bank, which is hesitant to sign an agreement due to potential property value reduction, will also be a critical next step for the project's progression.
Beyond the Headlines
Beyond the immediate legal and financial implications, this case touches upon fundamental questions regarding property rights, municipal authority, and the public good. The developer's argument of an 'unconstitutional taking' without compensation pits private property interests against the city's efforts to address a pressing social need for affordable housing. The outcome could redefine the balance of power between developers and local governments in shaping urban landscapes and housing accessibility. Furthermore, the challenge to the building permit fee as an 'unauthorized tax' could prompt a broader re-evaluation of how municipalities fund public services and infrastructure through development charges. If such fees are deemed excessive, it could limit cities' revenue streams, potentially impacting their ability to invest in community improvements. The case also highlights the intricate financial mechanisms and risks involved in large-scale development, particularly when regulatory hurdles create delays and increase carrying costs, ultimately affecting the viability of projects and the availability of housing.
