Derek Kopon

What do you think are the causes of Cambridge’s high-priced housing market?

The scarcity of affordably priced housing and rapid increase in real estate prices over the last 10-15 years is caused by a confluence of factors. The purchasing power of real wages of goods-producing workers relative to GDP has been declining since the US officially went off the gold standard at the end of the Bretton Woods system in 1971. In response to the 2008 financial crisis, the Federal Reserve and other central banks around the world have engaged in the most extreme monetary policy in history with interest rates at 0% for 6 years and over $2 Trillion of quantitative easing. These policies have distorted the economy, created price spikes and bubbles in real estate and other assets, and led to a historic wealth gap between the rich and the poor. Low interest rates drive up real estate prices by allowing purchasers to take on more debt to bid on homes. But they also affect the behavior of investors who are more likely to speculate on real estate when fixed income assets such as money market and bond funds are paying almost no return. This speculation further drives up asset prices, especially in a market such as Cambridge. It is well-established that more accommodative monetary policy drives up housing prices (see for example Williams, BIS papers 88, 2016, "Measuring the effects of monetary policy on house prices and the economy"). Additionally, weakening global currencies drive capital flight to real estate markets such as NYC and London. Doubtless we have experienced this same effect in Cambridge (June 12, 2012 Financial Times, "China's capital flight: to US real estate").

Superimposed on this macroeconomic environment, the Boston area, Cambridge specifically, has seen a boom in the pharmaceutical and tech industries, with a corresponding boom in commercial development. The high-paying jobs that come with these industries further skew the income distribution of the city, leading to hardship for low-income residents and students.

How have high housing prices affected Cambridge and the surrounding region?

High housing prices in Cambridge, along with other changes in the composition of the local economy, have undoubtedly changed the demographic composition of the city in every way imaginable. The rise of a high density tech hub, and the corresponding high-paying tech jobs that come with it, draw a demographic that is disproportionately young, highly educated, affluent, has fewer children, and is white/asian. Historically blue collar industries and neighborhoods are being displaced by the changing economy of the city. As Cambridge's population reaches its historic high, the increase in density will have impacts on livability, quality of life, traffic, noise, light pollution, air pollution such as ground-layer ozone, the tree canopy, etc. Our aging regional transportation infrastructure, long an embarrassment to the Boston area, is stretched to the breaking point. Leaders in Kendall square recently wrote to the governor declaring a transit "state of emergency," specifically citing the red line T cars that were operating at and sometimes over capacity (Boston Globe, 6/24/2019). The lack of prudent planning, maintenance, and upgrades to the municipal infrastructure of Cambridge and surrounding areas are matters of increasing concern to many residents. Many people who wish to raise their families in Cambridge are being displaced by the rising costs of living driven by the new economy, while simultaneously seeing almost no commensurate increase in the quality of city/regional services or infrastructure.

What housing options currently exist for low-income tenants who are not high on the affordable housing waitlists? How can Cambridge help them?

The housing options available will depend on the demographic of the tenant. Students and young people will likely make do with very small rooms and shared living situations. Low income families will have fewer options and will likely move outside the city at the expense of a correspondingly longer commute.

One important long term solution to these problems of displacement is a more efficient and modern regional transportation infrastructure that allows people freer movement. Going from Cambridge to a town even as close as Newton, for instance, is virtually impossible by public transit. A modern transportation infrastructure would give people faster and easier commutes while also providing geographic housing arbitrage, which would likely create a downward pressure on market rents.

In the shorter term, I support expanding the voucher program, such as implementing gap vouchers in order to help tenants at risk of displacement. These vouchers could bridge the gap between market rents and the section 8 voucher maximum. I also support some version of 2nd-generation rent stabilization along the lines of the German model, which will give long-term renters more economic stability.

How does new market-rate residential development affect the affordability of Cambridge? How does new affordable housing affect the affordability of Cambridge?

On average, I do not believe that any reasonable amount of market-rate development has any significant effect on the "affordability" of Cambridge. Some argue that market-rate development makes housing even less affordable by replacing older lower rent buildings with more desirable high-rent buildings ("luxury development", as they call it). Perhaps this is true on local scales in some neighborhoods. However, I believe the economy of capital flows driving much of regional housing prices is far larger than the economy of Cambridge. We are a little boat riding giant waves, and it is unlikely that local market-rate development will significantly impact affordability.

New affordable housing, such as that envisioned by the Affordable Housing Overlay would make housing more affordable for those fortunate enough to receive this housing and less affordable for everyone else. Replacing privately owned market-rate residential property with publicly subsidized rent-restricted housing will cause a decrease in tax revenue that will have to be shifted to the remaining market-rate residential and commercial taxpayers. Additionally, some market-rate housing may become more expensive if market bidders are competing with AHO bidders who may be at a competitive advantage from the relaxed zoning requirements. It is difficult to estimate how often this would occur, as the city has done no financial analysis of this.

What is the relationship between the twin crises of climate change and housing unaffordability? How can Cambridge address both?

The inability of people to move efficiently throughout the metropolitan area creates a steep gradient in housing prices. One need only compare the difference in market rents between Medford and Cambridge to see this affect. I am sure that a large percentage of tech workers in Kendall square are willing to pay very high rents in order to live in east or central Cambridge, or at least on the red line (which is operating at or over capacity). If they live further from the city, they will likely have to sit in an hour of traffic in order to get to work.

Anything we can do to modernize and expand our transportation infrastructure will relieve pressure on housing costs and decrease our greenhouse gas emissions. It is crazy that virtually the entire Boston area is gridlocked in traffic for several hours a day, with people sitting in large cars, usually one person to a car, with their motors running burning gas. We need an upgraded and expanded T system, an upgraded bus system, a contiguous network of protected bicycle lanes, more electric vehicle infrastructure, and better regional cooperation to address our transportation and housing needs.

What effects might more housing in Cambridge have on quality of life or the environment?

When it comes to municipal planning, the devil is in the details. We are a city with only 6 square miles of land. When we build more housing, which we must and should, we need to carefully consider all the important aspects of public health. Just to take one example, a recent study from London showed an inverse correlation between anti-depressant use and resident's proximity to urban trees (Landscape and Urban Planning, Vol 136, 2015). We have vacant lots in the city and parcels of land that are appropriate for redevelopment. Yet the major policy push of your group, the Affordable Housing Overlay, lacks any protections for trees at all, completely removing this and other public health/environmental/design considerations from the planning process around new development. Councilors backed by your group explicitly resisted adding these protections into this policy.

Putting in place public health considerations such as shielded night time lighting, tree protection, green space requirements, etc. does not mean that we will have to build less housing. It does mean, however, that we may need to plan more carefully and ask more from our developers. It also means that we must take a wholistic approach to city planning.

Do you support the Affordable Housing Overlay? Please explain.

No: Even if the AHO proposal was well-crafted, properly vetted, and presented to the public in a transparent and ethical manner, I would still be opposed to it on principle. The AHO creates a separate parallel set of residential zoning requirements that allow AH developers to save cost by cutting corners and building less desirable housing. If we believe in equity, then why does market-rate housing require a certain amount of green space and AH development less? Why does market housing require tree protections and design review, while AH does not? The AHO may be appropriate for a city with an abundance of land and a dearth of funding. But it is not appropriate for Cambridge, which has a dearth of land and is already one of the most densely settled cities in the country.

That having been said, the AHO is not a well-crafted, properly vetted policy. It is a sloppily written train wreck that has been rushed through an unsightly and embarrassing series of committee hearings, some of which have gone longer than 7 hours and have demonstrated quite clearly that this proposal is deeply flawed. The city has done no publicly available financial analysis of this proposal that would even predict how many units it would produce per year. This proposal is the opposite of intelligent and conscientious city planning. I think there are good reasons why no other city in the world has done anything like this. Certainly the greatest cities in the world (and also the cities with the most equitable housing policies) do not resort to developer-sponsored up-zoning proposals such as this.

The five city councilors who have steadfastly been pushing this proposal are also the same five councilors who take the most money from real estate developers and unions. This does not appear to be a coincidence, and it further delegitimizes what has been a travesty of a legislative process.

Would you support eliminating parking minimums for new housing development citywide? Please explain.

No: I myself do not own a car. As an environmentally-minded person who believes that too much time in cars or near traffic is detrimental to public health, I sympathize with the desire to encourage people to not own cars and to use public transit or zero-emission mobility. However, the reality is that a certain percentage of people will need to own a car. The elderly, those with disabilities, families with small children are all demographics that will benefit from having a vehicle (hopefully as fuel-efficient a vehicle as possible). By removing minimum parking requirements, we are not eliminating cars, we are simply moving those parked vehicles onto the street, where they will take up valuable street space and make it that much harder to install bike lanes.

Therefore, I would like the developers building housing to stop applying for variances and lobbying for zoning changes to avoid putting in a minimum number of parking spaces. Housing development should have a minimum number of parking spaces for those residents who would be at a significant disadvantage without a car.

I would support reducing the ratio of required parking per unit from 1 to some lower number, if data demonstrated that this lower number met the needs of the community.

Would you support abolishing these restrictions by establishing citywide minimum zoning that allows more multifamily housing? Please explain.

Generally: I have no fundamental problem with changing or relaxing the zoning code in single family areas. However, I do not believe that high density housing needs to be allowed by-right throughout the city. The city benefits from a diversity of housing, just as it benefits from a diversity of people. For most of my adult life, as a tech professional and academic, I lived in small 1-bedroom apartments, frequently in large buildings. However, I do not think that every person needs to live in such a dwelling during all stages of their life.

What measures in particular should Cambridge adopt to prevent tenant displacement?

I generally support most policies that would provide stability and security to the lives of renters. I support some form of 2nd-generation rent stabilization, such as what is in place in Germany (many other countries have different variations of this). This would likely require a home-rule petition, and I believe there is also proposed legislation at the state level that would provide a local option for some form of rent control. I support a gap voucher program, which would intend to bridge the gap between the section 8 voucher max and Cambridge market rents. I also support giving financial relocation assistance for tenants facing displacement through no-fault eviction. My understanding is this does not require a home rule petition.

What should the city do to increase walking, biking, and transit usage in Cambridge?

The city needs a contiguous network of protected bike lanes. You cannot get around right now safely on a bike, even/especially on the major corridors. Bike lanes in the door zone to the left of parked cars are not safe. Bike lanes need to be to the right of parked cars. I support more municipal underground parking, which will free up space on the street for more traffic calming infrastructure, curb extensions, raised crosswalks, and bike lanes.

What should the city do, if anything, to increase funding for housing affordability?

Similar to the voluntary scholarship contribution that residents are allowed to make when they pay their property taxes, we could set up a system of voluntary contribution that residents could contribute to that would be designated to help renters who are facing burdensome rent increases or displacement. We could also use some of this money that will be coming from the cannabis 3% local tax to pay for the gap voucher program or other programs designed to prevent tenant displacement.

What other steps should the city take, if any, to encourage and fund the development of more homes, including market-rate and affordable housing, in Cambridge?

I think the city and the City Council should be playing more small ball and trying to find areas of consensus. The Council essentially wasted most of the term on a flawed, sloppy, reckless, contentious city-wide zoning proposal that was a bad idea from the very beginning. How many units of housing could have been built if that time had been spent instead on identifying sites, perhaps with changes in zoning to those particular sites, where the vote would have been 9-0 and housing construction could be underway? There are potential sites all over the city. The city owns property where we could be building affordable housing. I think every member of the council would like to see the construction of more affordable housing. Many opportunities for consensus were wasted.

What other measures do you support that will affect housing or development in Cambridge, which you have not yet gotten a chance to talk about? (Optional)

I believe that at this point in history, we need to require all new development larger than 10,000 sqft be net-zero and have either solar on the roof, or a green roof. The cost of these features is small compared to overall development cost. I have no doubt that development in Cambridge will still be very profitable if these features are required. I also believe that we must continue our efforts to determine how best to achieve development in areas that will be prone to flooding in the decades to come. Climate models still seem to be under-predicting the rate of climate change. We should be ready for the extreme weather that will most likely be occurring with increasing frequency. While private developers and their financiers understandably make decisions based on the time scales of their discounted cash flows and rates of return, the role of the City Council should be to operate with consideration of a longer time scale and to plan wisely for the future.

Aside from housing and development issues, what are some major policy priorities that you hope to push for on the City Council?

I hope to push strongly for campaign finance reform and restrictions on ethically-conflicted money flowing into the campaign coffers of City Council candidates. Many residents of Cambridge, including myself, have lost faith in our City Council. I am concerned that the actions of our Councilors do not always represent the will or the values of the residents who they are obligated to represent. Regardless of whether or not you believe the AHO to be sound public policy, the reality is that there is a 1-to-1 correlation between how much union+developer money that a Councilor accepts and their support for this policy. That is unsightly at best, and unethical at worst. There is also a correlation between a Councilor's support for the AHO and what percentage of their campaign funding comes from outside of Cambridge. As one might cynically expect, those Councilors receiving a higher percentage of money from outside the city are stronger supporters of the AHO. Can any reasonable person thereby conclude that this policy is in the best interests of our city?

Reasonable people can disagree. A functioning democracy allows for that and is strengthened by a diversity of opinion. However, when the amounts of outside money flowing into both City Councilor campaign coffers and your ABC political action committee become so large as to distort our political process, then the system ceases to function and stops producing policy outcomes that are in the best interests of the residents of this city.

I hope that in pushing for campaign finance reform, we can produce a more civil and representative government that does truly solve our shared goals of housing equity and a just society.

What have you done to advance the goals you’ve described in your answers above in your own work? 

In recent years, I have advocated on a "very local" level for solar energy. I partnered with my neighbor to install a large system on our building. I encouraged my supervisor to put solar on his home and helped him pick out his panels. I lobbied for a nearby housing development to include solar on the roof (which I believe they are going to do, and I applaud them for doing so). I continue to advocate for neighbors and colleagues to go solar as much as possible.

I have also become involved over the last year in community groups and attended many Council meetings, urging our leaders to find real solutions to the problems of tenant displacement and housing, rather than continuing to push through the AHO proposal. At this point, the process does not seem to be producing anything except continued animosity. I believe this effort is more effectively spent on other proposals.