The City Council approved a linkage fee on large developments that would be used to create affordable housing in Watertown. The ordinance also spreads the fees into two payments and the City can consider offers of housing units or land in lieu of the fee.
Before they deliberated and voted, the Council heard from people advocating for changes to the proposed ordinance.
Charles River Regional Chamber President Greg Reibman, who represented multiple developers who do business in Watertown, asked to delay the start of the fees until 2024, and phase in the amount starting with $5.56 per sq. ft. starting in July 2024 and begin $11.12 per sq. ft. in July 2025. He added that costs of construction have increased and the economy has softened since the study recommending the fee was done, last year.
Several affordable housing advocates asked for the fee to be higher, and many said they want the funds to come in all at once. They asked for $15 per sq. ft., as had been suggested by Councilor Tony Palomba, which is lower than the maximum $18 allowed by the linkage fee home rule charter approved by the State Legislature. They argued that the price of housing construction, and of housing, have also increased and made affordable housing even more of a priority.
The fee is in the right place, said Assistant City Manager and Director of Community Development and Planning Steve Magoon, who added that it is “defensible” because it came out of the Nexus study into the impact of development on affordable housing.
“I think that we landed in the right place for our recommendation,” Magoon said. “The recommendations for fees and the process balances the issues in a way that I think, unfortunately, most people are unhappy with. In my business, if everyone is unhappy we probably struck the right place in the debate.”
The Nexus study recommended that 360 units of housing be created over the next 10 years to make up for the impact of the new developments. The study had a recommended range for the linkage fees from $9.44 to $11.12 per sq. ft. on commercial developments over 30,000 sq. ft., said Senior Planner Larry Field. The fee would increase annually based on inflation, and will be reviewed every five years by the Council.
Council Vice President Vincent Piccirilli approved of the proposal brought to the Council.
“A compromise has been proposed by the consultant and the economist that did the Nexus study, by the staff with comments from the Planning Board,” he said. “It is balanced, it is reasonable and is responsible. I will fully support this.”
Palomba said the idea for a linkage fee first came up at the City level at the Committee on Human Services four years ago. He thanked current and former Councilors, including former Councilor Susan Falkoff and current Councilor Caroline Bays for supporting the effort.
Palomba pushed to increase the linkage fee to $15, saying that the region is in a housing crisis. He added that he does not believe that the biotech industry has totally dried up, noting that multiple projects have been approved in Watertown and Boston over the past several months, with more proposed.
He also asked what the rules would be for offers of land or housing in lieu of the payment. Fields said that the City would have the option to refuse the offer and require payment.
Councilor Gardner wondered if it would be difficult to collect payments if they are made in two phases. Magoon said he would be comfortable that the City could keep track of the payments if there are only two, made a year apart. He would also be confident that the company would still be in business and able to pay. If it were spread over seven years, like in Boston, he would not be comfortable.
Councilor Emily Izzo noted that in other cities, such as Chelsea, the linkage fees are used in multiple areas besides affordable housing, including education, job training, and traffic and transportation impacts. She asked whether the ordinance could be amended to use the money for other needs.
City Manager George Proakis said he has seen other communities come back years later to change what the fees would be spent on. Magoon said that he expected in five years that affordable housing will still be a concern. Also, he said Watertown currently gets mitigation funds from projects to deal with traffic impacts directly associated with a particular development.
Council President Mark Siders backed the proposal and said that it has been a long time in coming.
Before the vote he said: “It’s pretty obvious we are going to have a linkage fee. It’s pretty obvious we are pretty late in the game, doing this very late in the game,” Sideris said. “We should have been considering doing this 6 or 8 years ago.”
He also acknowledged that the fees — along with changing economic — may change the math for developers, who may even decide not to go ahead with projects that have been permitted.
Palomba made a motion to raise the linkage fee to $15 per sq. ft., but no one seconded it. He then proposed Making the fee $12.50 per sq. ft., which required six votes to pass but got only four.
The Council unanimously approved the proposal from the City staff with the $11.12 per sq. ft. linkage fee that will be paid in two phases (half when they get a certificate of occupancy and half a year after the building has been occupied). The fee will increase annually on Jan. 1 based on the Consumer Price Index inflation. Also, the city can accept land or housing units in lieu of payment.