Somerville, MA · housing policy estimate
Today, new buildings in Somerville with 4 or more homes must rent or sell 20% of them at below-market prices. The City's own feasibility study found that at 20%, a typical new building earns less than investors require in four of the city's five areas, so many never get built. Our estimates use that study's numbers. Pick a lower requirement to see what the next 10 years could look like.
After subtracting what the sites pay today. Projects already in the pipeline finish under today's rule, so the lines don't split until year 5.
A lower requirement makes more buildings profitable, so more of them get built. But each building sets aside fewer affordable units, and that usually wins out.
In this model, cutting from 20% to about 15% costs few affordable homes. Below that, each point you cut costs more of them.
The new buildings would also pay more property tax than the sites they replace pay today.
The City's own numbers. Construction costs, rents, and the return investors need come from the feasibility study the City of Somerville commissioned from RKG Associates in June 2025. Read the study. We rebuilt the study's financial model, filling in three inputs it doesn't publish. Our version reproduces its published returns to within half a percentage point in four of its five areas of the city, and within about one point in the fifth (around Davis Square).
Which buildings get built. Using state parcel records and the city zoning map, we estimated how many homes zoning allows on sites likely to be redeveloped. For each of the study's five areas, the model checks whether a 15-unit and a 75-unit building would earn the 12.5% return the study says investors require. Sites differ, so it estimates the share of sites that pass rather than a yes or no. A lower requirement means more rent, so more sites pass.
Scale. Somerville completed about 330 new homes a year from 2013 to 2022, according to the study. We set the model so today's 20% rule produces that pace. Permits since 2019 have run a bit higher, about 370 a year. At that pace, every result here would be about 12% larger.
Range. The range comes from two other ways of estimating the response. One uses a 2026 study of California cities, which found that permits fall about 7.6% for each percentage point of a building's potential rent that the rule gives up. The other assumes sites differ less in profitability, so more of them pass together. Neither covers changes in interest rates or construction costs.
Timing. The study says construction takes about two years after approval, and approval takes months or longer. We assume three years in all, so projects already in the pipeline finish under today's rule and the change shows up in year 4.
Tax. We value each new building from the rent it collects, including the lower affordable rents, and apply Somerville's FY2026 residential rate ($10.98 per $1,000). We subtract what the site pays today. Buildings pay from the year after they open. Somerville already taxes up to its Proposition 2½ limit, and new construction raises that limit, so this is new revenue rather than a shift onto other taxpayers. All dollars are today's dollars. The budget comparison uses the City's FY2027 budget of $394M.
| 10-year totals | Keep 20% | Lower to 15% | California-study method | Less site variation |
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Sources: RKG Associates, Financial Feasibility Analysis, June 2025 · Kouchekinia, Inclusionary Zoning and Housing Supply, 2026 · Somerville FY27 budget · MassGIS parcels · Somerville zoning.