[Zac Bears]: 2-321 subcommittee on zoning planning and development meeting notice Wednesday, March 22nd, 2023 at 6pm meeting is now called to order. Mr. Clerk, please call the roll.
[Adam Hurtubise]: Councilor Collins. Present. Councilor Knight. Councilor Knight is absent. Chairman Bears.
[Zac Bears]: Present. Two present, one absent. The meeting is called to order. There will be a meeting of the Medford City Council subcommittee on zoning planning and development on Wednesday, March 22nd, 2023 at 6pm in the Medford City Council Chamber on the second floor of Medford City Hall and via Zoom. The purpose of this meeting is to discuss the condo conversion ordinance paper 22-321. The subcommittee has invited Building Commissioner Bill Forty, Director of Planning, Development and Sustainability, Alicia Hunt, to attend this meeting. For further information, aids and accommodations, contact the city clerk at 781-393-2425. Sincerely yours, Zach Baer, Subcommittee Chair. So welcome everyone today. We are talking about a proposal to enact a condominium conversion ordinance here in the city of Medford. Before we start, I just want to say that when we reviewed the records, we saw that this was actually referred to the subcommittee on housing. So, if we need to make any sort of adjustment and maybe put a resolution on the agenda or something we may have to do that but we felt like a most two of us are on both committees. This may well be the better committee for it to be on. And we can have the discussion today on the item. And if the council wants to send it back to housing or whatever else, then that's the prerogative of the body, but we don't foresee making any final decisions today. So we can still have that conversation. So with that, I'm going to turn it over to the lead sponsor of the item, Councilor Collins.
[Kit Collins]: Thank you, Vice President Bears. I wanted to begin by just doing a brief overview of condo conversion ordinances as I understand them for the purpose of context for people in this room and anybody tuning in from home. So, you know, the what and why of why we're having this discussion here today. So to start with, you know, condo conversions in general, What are we talking about here? Why do they happen? What we're seeing is, I mean, what we've been seeing really since the 80s, and this is when Massachusetts at the state level started regulating the conversion of rental units into condominiums, seeing a shortage of rental units that was being exacerbated by converting these to condo forms of ownership. The state actually framed this as a public emergency when it published its regulation of this in the, chapter 527 in 1983. But the phenomenon that we're dealing with here really hasn't changed, and I think it's been picking up steam actually in communities such as ours in recent years. There is a profit motive to converting rental units to condo forms of ownership. It greatly increases their resale value. It's a good way for owners and developers to capitalize on the property value of their holdings. So why regulate this? Developers stand to benefit very greatly from turning rental units into condos. Meanwhile, communities in our region, like I said, continue to have this drastic under supply of rental units. This can contribute to the forces of gentrification, which we're already seeing in our community and many others around us. It contributes to economic segregation as not everybody can afford to own their own home. And so contributing or converting more rental units into owner occupier forms of property, speculative properties is harmful to our harmful to the plurality and diversity of our community. So this is just a way for the community to derive benefits from condo conversions, because developers are deriving benefits from them. It's a way to infuse tenants stability measures into these conversions when they do happen through requirements like relocation payments, housing search assistance for the tenants that are displaced, and through other measures like payments into municipal affordable housing funds. Like I mentioned, we're really not inventing the wheel here. There are a lot of other communities in the greater Boston region that have local condo conversion ordinances that are either more specific or more strict than the floor that the state law provides. There's a whole laundry list I provided for tonight, just five that we could look at in more detail that I think kind of create a sampling of directions that local communities similar to ours in certain ways have gone with. They include Somerville, Boston, New Bedford, Marlboro, and Lexington. Thank you, Bill. One other thing that I want to mention before we start getting into the weeds is that these ordinances are tailored to target for-profit developers or flippers, colloquially, not people who are converting with the intent to transfer their properties to a relative and there are specific safeguards worked into all of the example ordinances that I researched to make sure that this is not something that's going to create an undue hardship for somebody who wants to turn their rental into a condo for a relative to live in or for themselves to occupy. Really, it's targeting the people who are driving profit, the people or rather the commercial entities that are deriving profit from the value of our community. So I want to just pause there after that kind of lengthy introduction for any preliminary questions or comments from my fellow subcommittee member or others in the room.
[Zac Bears]: Yeah, no, I'm all good. I'm happy to continue. Either, you know, look through some of these or look through a tentative sample or hear from the planning director, building commissioner, wherever you want to go with it.
[Kit Collins]: Great, thank you. Unless there's other folks want to jump in right now, I'm happy to just kind of proceed with going through, walking us through the typical structure of condo conversion ordinances, touching a little bit on the state statute, and then maybe we can get into the weeds a little bit and comparing some of these other local examples.
[Zac Bears]: Trying to share my screen. You can go ahead while I work on it.
[Kit Collins]: Okay, great. So I think I'll start with just a really quick rundown kind of going broad specifics. We'll start with what the state says about condo conversions. So like I said, there's this state statute that was enacted 40 years ago. that does the same thing as the local ordinances also do. It regulates how condo conversions happen and it requires certain conditions when they do happen. The main tenants are, and I'm below this section right now. No, you're good. Oh, you know what? Sorry, I'm reading from the document that I didn't share with you. So I'll just gloss through this really quickly, and then we'll bring it back to the local ordinances. So the state statute sets up requirements for notice to tenants when an owner has an intent to convert their property into a condo. The required notice is one year for tenants, but two years, and this is notice, two years of notice. I'm sorry, let me start again. So for the state statute and for all the local ordinances that we're going to look at, tenants are grouped into two categories. One is protected tenants. And in all the examples we're gonna look at, that means tenants that are elderly, disabled, or low or moderate income. And so the state statute, the conditions are formulated the same way. Owners with an intent to convert must give tenants in that protected class, two years notice before they have to vacate with an additional two years if they can't find comparable rental housing in the same city for all other tenants that aren't elderly disabled or lower moderate income, they have one year to vacate. Just some other quick facts on the state statute. Buildings with less than four units are exempt, so it's only buildings with four units or more. It wouldn't be a triplex. The state sets up a limit on rent increases during the notice period, so this is the period in between when the tenant learns that their rental is being converted into a condo and when they have to vacate during that period, they'll remain a tenant and the landlord is not allowed to raise their rents for that time by more than either the consumer price index or by 10%, whichever is greater. This is a measure to try to avoid or try to make it so landlords can't use a pretext for evicting a tenant earlier than the expiration of the notice period. Just some others, and these will show up in the local ordinances as well. Tenants are afforded the first right of refusal, also known as the right to purchase, on either the same or more favorable terms as those which will be extended to the general public when the condo is put up for sale. Another stability measure in the state statute is relocation payments That's a payment of $1,000 to tenants in that protected class and a payment of $750 to all other tenants. So essentially that's saying you're being displaced by this conversion to compensate you, the owner is required to pay you this amount. And it's a higher amount for those tenants in protected classes than it is for all other tenants. And then the state also sets up penalties for violating this ordinance, which are by and large followed in all of the local ordinances that we're going to look at. So that was all the regulatory floor set out on the state level. And I'll just quickly gloss over the typical structure, the typical outline of many of the local condo conversion ordinances in Massachusetts. I think there's in the ballpark of 12 to 15 of cities that have these in general. Vice President Bears, if you don't mind heading back to that document, thank you. Great, that's perfect. Just so that we can all look at the same thing. So this is, in looking at, like I said, about five examples from various communities in Eastern Massachusetts, they all tend to follow this typical structure. And of course, some ordinances have some sections and not others, but in general, they all contain, you know, title or purpose. definitions, these are the standard things we see in almost all city ordinances, and then all of the requirements to go forward with a condo conversion. So that's those notice requirements and again that's the notice and the length of notice that you need to give to tenants that will be displaced. Maybe there's differential conditions for occupied units versus unoccupied units. Maybe if the unit doesn't have a tenant in it, that could expedite the process for the owner. Conditions for protected tenants, if there's a difference there. Conditions on renting units while a conversion is going on or during a notice period. Dealing with evictions during a conversion, if owners can do that, and if so, when the process they have to go through. Many of them touch on tenant first refusal. Some of them touch on city right to purchase or the city's designee right to purchase, relocation payments and relocation assistance to tenants, extension or modification of the rental agreement during the notice period. In some cities, the number of conversions that an owner can do in a building or per calendar year is limited. There's also requirements on what renovations may take place during a notice period, or if renovations are taking place, what sort of the experience of the tenant during that process, and the tenant's right to vacate during the notice period. Finally, or well, not quite finally, but it feels like it should be finally already. Some of these ordinances establish a specific review board to oversee this process. Not all of them do. Some of them delegate existing city departments to oversee condo conversions. Some of them set forth a specific permitting process. Some of them set forth waivers or conditions under which other requirements can be skipped. And we'll touch on that when we look through the individual ordinances and compare them. Applicability, I mean, an example of that would be Under the state statute, it's not applicable to buildings under four units. Effective date, severability, and penalties. And again, these are all things that are common to ordinances on many topics. So that is the basic kind of bone structure of most of the local condo conversion ordinances, including the five that we can compare for our discussion tonight. I'll just pause there in case there's any comments or questions so far.
[Zac Bears]: Great. Would the next thing be actually comparing these different categories. Across there could be pause there and maybe just I think at this point here from. Commissioner 40 director hunt just on general thoughts around a condo ordinance if that's a good if you either you have them or. I just want to get us to in the weeds before.
[Alicia Hunt]: sort of see the good and the bad, and I will tell you that this is not something we've really dug into one thing that I. looked at was what is our housing production plan say on this and it's kind of it's basically silent on the topic of condo conversions. There is a lot of data there if anybody wants to know about what are the prices sale prices of houses versus condos and what are the rentals on apartments, just to understand how that all compares some of the pros and cons I actually had the opportunity. to talk to our interim assessor briefly before this and just sort of get a snapshot idea on it. And she just did want to, she advised me to remember that when you do condo conversions, that is good for municipal budgets because that is new growth and that is usually those units are improved and there's improvements and the sales and now you're adding to your tax levy. And when you restrict that, that's not happening. but that does have to be balanced against the need for more affordable housing and the very strong understanding that we do not have both enough affordable housing in the city that is deed restricted affordable housing and we don't have enough housing. It is just affordable by the people who live here in the city. People are getting priced out, they're getting forced out and that is very true. And then to remember there are options around putting deed restrictions and to allowing that and they're incentivizing that that it might be for an individual who owns a two-family house and they want to retire, maybe there's an option for them to condoize and put a deed restriction on the unit they're going to continue to live on. Those are just some ideas that could occur. I just kind of wanted to think in those big picture way as you're kind of getting into the details. I have with me, Lily is one of the graduate students working in my office, and she did some research. She was familiar with the Somerville Condo Conversion Ordinance, and they did a report on the results, because they've had Condo Conversion Ordinance for quite a long time. And I have not had a chance to read that report, but Lily has, if it's helpful at any point, because that's somebody looking back and saying, how did this work in a community? And I think that is helpful for us. We are very much like Somerville was a short while ago. And we don't want to see people being forced out. We also don't want to take away from people their retirement incomes and how do we balance that? And I think I heard that in some of what you were talking about when you target at the developers who are flipping the properties and making a bundle and leaving. versus the homeowner who actually, I talked to a Medford resident who was trying to figure out, what do I do with the two family? I want to sell it to my daughter so that she can start to have equity, but I want to keep living here. How do I do that? Do we do that or do I sell the whole building and the both of us move out of Medford? Those are real conversations that people have in Medford. And I just want to bring up that that is real. and that is going on here. So just food for thought. We really haven't gotten into the weeds on this yet. Although Lily has more than I do in the weeds.
[Zac Bears]: Do we have, just before you sit down, Alicia, sorry. Do we have any data on condo conversions in Medford?
[Alicia Hunt]: I do not.
[Zac Bears]: Okay.
[Alicia Hunt]: It's conceivable to me that that might be something the assessor might have, but we've never asked for it.
[Adam Hurtubise]: Yes, yeah, Building Commissioner.
[MCM00001654_SPEAKER_16]: Hi everyone. Yeah, I guess I would say maybe briefly that some of the research I did on Somerville's particularly kind of focused on outcomes so it seemed like they were deciding like what kind of outcomes they wanted and tailoring their ordinance to fit that. And just a couple of highlights from their report. They updated their condo conversion ordinance to include stronger tenant protections in 2019, and it went into effect for financial year 2020. So they have a couple years of data from before and after, and there were a couple of broad trends. They didn't have any permits that they denied. Some of them were conditionally approved, sort of indicating that the owners were following through on these new obligations. They also had a greater number of condo conversions by owner occupants, as opposed to developers. So those were two kind of interesting data points there.
[Bill Forte]: Great, thank you. Thank you, Mr. Chairman. So, I can. I don't have a lot of working experience with this ordinance. In fact, I've never had to enforce this in any city or town that I've worked in. But I can give you just a little bit of an idea on construction trends and tendencies where buildings might be renovated. It's been my experience as code enforcement that what I find is that when a person can take a non-conforming four-family, knock it down, and build four units. That's when you will find that those units will be sold separately. I can tell you from a builder's standpoint that taking over a two or a three-family with floors one on top of the other and converting them into condos doesn't It doesn't happen as often as you would think anyways. A lot of times when a property has been substantially renovated, usually it's not for condominium purposes. And I can tell you that in converting to condominiums, it creates all kinds of problems. The first thing, obviously, is the fire separation between units. That's a one hour fire separation. Sound attenuation is a big deal. It can become an encumbrance on a title. If you have a condo that does not sound attenuated now it's in the state building code right now that you have to sound attenuation between units, whether that be horizontal or vertical. I would just tell you that it's a hassle to divide up a property into title to separate title on an existing building that otherwise is not really stripped down to the bones and kind of rebuild you know to build a sound attenuated assembly requires a double wall it's almost like a party wall and it would really, it has a tendency to be difficult. So I would say that on your average, and this is just, you know what I'm gathering from what I see here Medford what I've seen in Waltham and, and certainly what I've seen in Newton is that when a person buys a two or three family, it's likely that that property will will remain rental only because rents are very high. I don't see, you know, as long as rent markets stay high. It's almost more profitable for a builder to buy a property converted and get, you know, $3,030 $500 a unit, you know, for something that's substantially got a lot of room, you know, number of bedrooms, all that stuff kind of plays into into, you know, the plan. It's all financial, no matter what, you know, nobody buys a property, so they can make it look nice. They buy a property to make profit. And, you know, given the fact that, you know, we have Tufts University, we have the, you know, we have high speed transit, all of those things kind of play a factor. I saw a lot of condo conversion in Waltham, but it was only after a builder was able to not only take down an existing house, but build four units and, you know, each condo unit having, you know, 3000 plus square feet, you know, that's a pretty good size condo. That's the size of a single family home. And they were marketing out at over a million dollars, you know, those are the kinds of big conversions that I saw because the zoning ordinance was liberal. You know here, you're, you're kind of limited to the amount of space property that you have in an average single family residence, you know, multifamily residence district you know you're seven to 10,000 square feet. I don't see a lot of this conversion going on right now. Although there is no reporting requirement in my department at the time, it's very, what happens is if somebody wants to renovate a property, what we would have to do is divide it up into two separate building permits and issue two building permits, and then therefore two separate certificates of occupancy. Obviously, if you're gonna divide a property, you would want your own certificate of occupancy for your own fitness of your own unit. We have not seen hardly any of that. So I don't see it as being, huge problem here in the city. However, you know, notwithstanding any of that information. I think that maybe maybe two family or less should probably be taken out of the equation. Because if you do have a two family and a builder decides that they do want to convert it. Um, you know, that's creating two single family homes and you know that that does help with the growth of the residential market. I think when you get into, you know, like we have this big 40 be coming up 350 units, you know, that might be something that you want to restrict, you know, even buildings with 50 units 25 units 10 units, those, those foreseeably are, you know, could be something that I think But I think that there should be a minimum threshold here of what qualifies and maybe even up to a three family. The only reason I say that is because the one and two family dwelling code is its own standalone code in the state building code. And I very rarely see two families being converted to condos, unless the building has been demolished and rebuilt. So I just thought I would give you that insight anyways.
[Zac Bears]: Thank you, Commissioner. That's really helpful. And yeah, I guess just my only question is just on, and then I'll, Councilor Collins, if you have questions too, feel free to ask. Do you, is it kind of just, when you say, you know, since there's a specific process where you'd have to pull the two building permits and the two certificates, you really would, you would notice, you know, any time that that happens in your office and that's kind of what you're drawing on when you say that?
[Bill Forte]: Yeah, I would think so, yeah. So if you have a separate, if you have a separate property ownership, let's just say, to make it simple, a duplex, right? Obviously it's one lot, but it's two separate units. They actually, the assessor's office would assign it two different parcels. So it would be divided by parcel, you know, very similar to, you know, when you have an address at say at a, you know, at a strip mall. You would have a number of addresses that really aren't in the database, a lot of times will will change that database to make sure that it, you know, it aligns with the number that's actually on the building, whereas it doesn't necessarily have it in there so we do happen to really. see what happens to parcels and when there's a conflict we can issue a building permit for, you know, I can say honestly that I have not, I'm sure that if I asked my staff they're going to tell me that they really don't see a lot of this going on, especially in the one and two and three family. I can't really speak to the history of, you know, the, of the city itself. But I'm just guessing by trends and things that I've learned over the period of time that I don't see that this is something that under the one or two family threshold should probably be regulated, because we see a lot of that kind of renovation, but again, not separate ownership.
[Zac Bears]: Yeah, thanks for that. Yeah, and I think too on that, I mean, I haven't experienced all of it directly, but through what I've read, we had a lot of new condo construction in the 80s. There's actually a moratorium in the city for a little while that passed, I think, by ballot initiative. A lot of the later, newer construction is really apartments, you know, of similar scale as apartments now. I'm guessing that's kind of around what you're talking about around market-driven factors and rents being high. But we did have a pretty big, you know, building new building and Middlesex have that is condos that is, you know, it's I don't know how many units is maybe, maybe it's a couple buildings, but I don't know 2030 40 units. And so I could just seeing that there was still, you know, that's built in the past five years, seeing that there was demand for that I could see, you know, the 10 to 25 unit range buildings that are really old apartments may be going in that direction or station landing, I think is separate ownership.
[Bill Forte]: Is that too? Yeah.
[Zac Bears]: Yeah. Okay. Yeah. So that's great context. Thank you. Back to you.
[Kit Collins]: Thank you. Yeah, I appreciate that. That's really helpful context and I think we have the opportunity to like, look at Well, I was going to say the other communities that have enacted these local condo conversion ordinances have taken them in a lot of different directions, they're actually like fairly. Some of the differences are fairly minute, but I think that they indicate ways that we could try to tweak and tailor this to make this a medford specific ordinance, which I think is always what we're trying to do. Whether it's a housing measure or something else to say you know what are. Yes, what's the snapshot for right now? What do we know about the trends in this community? Also, what can we reasonably forecast about the future over the next two, five, 20 years? I know one of my big questions going into this and one of my reasons I was interested in exploring it was we have this green line now. And I know that there's a lot of interesting economic circumstances going on with construction in general, which are maybe influencing what's being built or not right now. But I think it would be, helpful to get that perspective into this conversation of, can we expect that to be a driving factor between building in general in Medford in the next five years, renovations to apartments or possibly condo conversion? Just how can that inform our perspective? And how can that inform which of these measures feel appropriate or feel less important if we're looking to create a version of that for our community? So that expert perspective is very helpful as always. And I think that also following up with our interim assessor to get that data will be a really great ingredient to our next discussion in addition to whatever else comes out of our comparison. Are folks ready?
[Zac Bears]: Alicia, when did you check in with Alan about this? Oh, okay, okay, okay, good. No, no, yeah, I just know that we have a new chief assessor coming in. Got it. I just didn't, I don't know what the transition timeline is on that and who we should ask or what's, you know, I would maybe hold off and ask the new assessor not to get anything lost by us. I don't know if Ellen has some sort of bridge period there, so.
[Alicia Hunt]: And if what you're looking for is just straight up data, the assistant assessor, Jared, has been very helpful about being able to, if it's information that he can just get out of the system, he's very helpful.
[Bill Forte]: Great. Mr. Chair, so I think maybe to help this committee with this, what I can do is I can take a sampling over the last, maybe I can go back since the beginning of citizen serve to see where we've had corner conversion permits, or even if the guys have institutional knowledge about when they've divided up a parcel, they might be able to come up with a few. So I can certainly dig that information up for you and get an idea as to what, if there's any trends at all. You know, we've had a pretty good economic time.
[Zac Bears]: Although there's been a pandemic there's also been a pretty good surge of real estate so yeah, so we should be able to take good sampling out of the last two years I would think, that'd be great and then I'm interested in kind of the frequency piece and also the geography pieces and hitting different parts of the city in different ways and how often is it happening in general, because I do, I could, you know, I know in Somerville, they saw kind of, I mean, I'd have to look at the data here, but anecdotally, I know a few people who had to leave or ended up renting, you know, they're renting a unit in a three-family in a triple-decker that they're renting, but they're renting the middle condo. It's like a very strange kind of thing where you have that. It's like, they're renting a condo in a triple-decker. It's, you know, to me, it's just kind of circular loop.
[Bill Forte]: Yeah, there's nothing really to say to that separate ownership does not necessarily mean that it's not being rented out either. Exactly. You know, I mean, that ownership is one thing, obviously, but not every single unit that's being sold is for a single family to settle down or you know, a professional couple to not have to drive or whatever it might be, there's a whole race of scenarios that that may, you know, and I think it speaks to both sides of the problem, right?
[Zac Bears]: One, maybe you're not taking rental unit off the market. But if you have to do the fire code improvement, you have to do the sound improvement, you're, you're, you're, you know, developing into sell as condos. You know, I'll just, I won't say the number, but what my friends are paying is, you know, 20, 30% more than when you look back on the history of the rent history of the property before it went condo, you know, so it really pushes up that, you know, renting out a condo that gets converted. I mean, you know, I mean, it makes sense because the people put a lot of money into it to do that for things I didn't know about until you mentioned some specific things that need to happen, but. I mean, it may still be a rental unit, but it's 20% more expensive just because it's a condo in the same building on the same lot. And that's kind of, I think that to me is what I would like to try to not have become a trend.
[Bill Forte]: And one would hope that there wouldn't be a dance studio on the floor above, right?
[Zac Bears]: Great. Well, thank you. I appreciate that. I think both of those sets of data will really help. I'll turn it back over to you.
[Kit Collins]: Great, thank you. Are we feeling ready to get into the weeds a little bit and, you know, sort of illustrate some of these differences amongst local ordinances?
[Zac Bears]: Yeah, I think if you, I'll share it. If you want to highlight some differences, but maybe even at least give your thoughts on what are the, you know, I think the point, so sorry, I forgot your name. Lily, my apologies. I was like, it's Elle, but I don't want to say the wrong one. That Lily was saying, like, maybe highlight the ones where different mechanisms might help us target outcomes would be helpful for me to just hear from, since you've done a little bit more research on this than I have, I would like to hear where you're thinking. This one, you know, it could be helpful versus this one really goes after certain things that we're trying to look at.
[Kit Collins]: Yeah, absolutely. I think there are some clear mechanisms in here that are sort of more worthy of highlighting. than others, absolutely. Yeah, why don't we, if you don't mind pulling up that spreadsheet. I don't know, I'm a visual person, so I have to put things into a landscape page if I'm gonna understand them. That's okay too.
[Zac Bears]: Oh, is it too small?
[Unidentified]: Okay.
[Kit Collins]: Okay. Yeah. And I'll say it out loud when we scroll down a page or something like that. Okay.
[Zac Bears]: And I asked just cause that's helpful feedback as we look at improvements to this chamber for having meetings like this and doing stuff like this. Okay. Thanks.
[Kit Collins]: Good to know. Okay, so we're on the page that's titled comparison five local examples. So with this, I just threw together five of the again, I think it's like 12 to 15 municipalities and in Massachusetts, it could be more that have a local condo conversion ordinance. I was trying to pick a selection of communities that are neighboring Medford in the Metro North region, you know, have certain similar demographic similarities, but maybe aren't as proximate, and then others that I thought, you know, kind of might mirror us in terms of municipal capacity, in terms of the scale and the ambitiousness of their ordinance. So just going top to bottom, like I said, there's a common structure that all of these ordinances follow, and the title and purpose is not really important, except that I do think it's interesting that in several of Oh, sorry. So the cities that we're going to be looking at specifically are Somerville, Boston, Marlboro, New Bedford, and Lexington, left to right. And I do think it is interesting that like the state statute, most of these cities, except for Boston and Marlboro, specifically call out in their purpose sections at the top of the ordinance, a declaration of emergency or a statement of emergency. regarding the scarcity of rentals in those communities. So I just think that's an interesting bit of context to see how other communities are framing that in the actual language of their ordinance. So I think one of the, most of the requirements prescribed under this ordinance target the experience of the tenant that's living in a unit that is being converted into a condo. So a lot of these requirements, that's the mechanism that's trying to affect or improve that tenant's experience. Because if this were a completely unregulated system, and of course that's not the case because we have that state statute setting the floor, this could be a situation where a owner says, hey, by the way, you have to get out because this is going to be a condo soon. So this first requirement, notice period, and if you can't hear me, just wave at me because the fan just came on in the chambers and I can't hear myself. This seeks to say, this seeks to create a runway for tenants so that they have a longer amount of time to adjust to the fact that they have to move out because their rental is becoming a condo. Here I'll skip down a couple rows because where do I have this so all of these ordinances. identify protected tenants as tenants that are elderly, disabled, or low or moderate income. So when I'm referring to protected tenants, it's tenants in those three categories. So in Somerville, you can see protected tenants are given five years before they have to vacate after the owner notifies them that they have an intent to convert. All other tenants are given just one year. to vacate, all of the other cities follow a similar structure where protected tenants are given some amount of longer time than all other tenants, a longer runway. Except for Lexington, where the notice period isn't specified, but a condition of the conversion license, which is promulgated by the board, is part of the board's decision on whether or not that owner will be issued a conversion license in the first place. I think I'm going to skip past a couple of these that seem a little bit less substantial, but renting units during a conversion, I think, is one that think could be relevant in a community like ours, or at least useful to articulate. Many of the ordinances are silent on this, but Somerville and Boston specify that. So if you have a unit where there's an intent to convert and the previous tenant moves out, so now the unit is vacant, perhaps the owner wants to have a tenant to fill that void because they're still perhaps going through the conversion permitting process perhaps they're still planning the renovation. They can rent it out to a new tenant, while the conversion permit processes and is ongoing, while they're working through that process. Those prospective those new tenants won't be entitled to the protections of this ordinance like they won't get the five year notice period if there's a relocation payment if there's relocation assistance, they're not automatically entitled to that if they move in when it's already known that the conversion is going on. They are informed that the conversion is already gone is going on, if the owner fails to or neglects to inform them that their rental unit will become a condo, then they will become protected and entitled to any of the other benefits such as relocation payment or an extended notice period. I think that's one that we might want to consider, it might not be necessary, but I think it's another window into a lever that some of these ordinances include for making sure that tenants are really considered and protected during this process. Eviction during conversion, this is kind of the main thrust of the ordinance. This is present in the state statute as well. Essentially, the ordinance is seeking to make sure that tenants can't be evicted to make renovation or rehabilitation or conversion easier for the owner. And there's also prohibitions on kind of inventing pretexts so that tenants can be evicted sooner. So eviction is prohibited until that notice period expires, whether that's one year or five years or other, depending on the city. And just for context, one exception here, and I'm on page number three, I immediately forgot to mention we were shifting pages. In Lexington, the Condo Conversion Board issues licenses for an eviction. So that's another way that that city regulates and modulates the protection of tenants from eviction by saying, if you want to evict a tenant, you actually have to get a license to do that. So now we're getting on to tenant first right of refusal and city slash designee right to purchase, which, you know, speaking just for myself, are two areas that I'd like us to look really closely at. In all of these cities, except for Lexington, tenants have some first right of refusal. So that means if a condo conversion is going on and it's going to be put up for sale as opposed to an owner converting it into a condo and then they're going to convey it to a relative or if they're going to occupy it themselves. If it is going to be put up for sale, tenants have the first, they have the first bite at the apple. They have the right to purchase their unit, the unit that they lived in on the same terms or more favorable terms that would be offered to the general public. There's different sort of right to purchase periods for different cities. Sometimes it's, you know, Somerville's is 120 days for most tenants and 180 days for protected tenants. In Boston, it's 90 days. But that is something that is actually also present in the state statute. And I think Lexington doesn't get specific. on tenant first right of refusal, so it would revert back to the floor provided by the state statute. And then, interestingly, this is at the bottom of page three, some ordinances designate that the city has a right to purchase or the city's designee has a right to purchase if the tenant does not want to exercise their right of first refusal. Not every city does this, Boston doesn't do this, New Bedford doesn't do this. And I think this is something that we might really want to look at, especially since it looks like we might very soon have an affordable housing trust. Just a couple examples of how This plays out in a couple other cities. In Somerville, again, this is after a tenant has said, no, thank you, I don't wanna exercise my right of first refusal. The city or its designee can purchase that unit and maintain it in perpetuity as affordable housing. And again, there's an exception for if the newly converted condo is conveyed to a relative. In Marlborough, there isn't a specific city right to purchase, but there are conditions for some requirements of the ordinance being waived entirely. And one condition for waiving ordinance requirements is set payments or bonding to their affordable housing fund or affordable housing trust. So that's not a city right to purchase, but it's another way of enforcing that affordable housing and perpetuity, whether that's compensation or actual unit is being afforded to the city. Similarly, in Lexington, the conversion license is conditioned on 10 to 20% of the units that are being converted being offered to the Housing Authority, the Housing Assistance Board, or any other entity, which could be a city-designated nonprofit, that will hold them as permanently affordable units. So these are some different mechanisms, some different ways of making sure that the city has an opportunity to get some affordable housing out of condo conversions. So kind of going, moving on to page four here, and this is going back to the tenant stability, tenant experience side of things, relocation payments. I think that these are kind of integral to the tenant experience. of the ordinance and this is something that I would like for us to discuss further, and relocation assistance which goes hand in hand with that. So these are compensation that owners must pay to tenants that are displaced by condo conversion to offset, you know, supposedly to offset the cost of moving since their rental is being converted into a condo that will be put up for sale. And for all of these, these are all conditioned on, these would not apply if in any city where the tenant takes the owner up on their right to purchase. So these are just for tenants that are moving out. There's a pretty big range here. So the state sets the floor at $1,000 in a relocation payment for protected tenants and $750 for all other tenants. Some cities go a lot higher. In Boston, it's $15,000 for protected tenants and $10,000 for all other tenants. In Somerville, it's $10,000 for protected tenants and $6,000 for all other tenants. And Somerville also has a stipulation that the dollar amount should be annually adjusted according to the Consumer Price Index, which I think is a great idea to include no matter what dollar amount we might decide on should we go forward with this idea. In Lexington, I just want to note because this is a much more flexible way of doing this, the dollar amount for relocation payments to tenants isn't specified, but the conversion licenses given to owners are subject to conditions, which include some public conditions such as how bad is our housing shortage right now. but also on the reasonable arrangements that the owners propose and agree to, to alleviate the hardship of tenants affected by the proposed conversion. So that essentially sets the owner and the city and the tenant up for a discussion, if not a negotiation, as opposed to prescribing a specific dollar amount. So that's another approach. relocation assistance, so that's not monetary compensation, but that requires that the owner help tenants find comparable new housing within the same municipality. For a lot of these cities it's for protected tenants only. And I'm actually scanning to see. Yeah, in none of these examples does that extend to all tenants. It's extended to only protected tenants. And in Boston and Marlborough, it's explicitly stated that if appropriate new housing can't be found, then the notice period can be extended for up to two additional years. So that's again, lengthening the runways. Think if it's too hard, if we can't find you a new place to move into, then you can live here for another two years. Really quickly, this is sort of a blanket one across all municipalities that we looked at, the extension of the rental agreement. So this is saying during that notice period, during that runway, when tenants know that their rental is being converted into a condo and they're still living in that unit for the time being, this is again, a way to make sure that owners are not finding pretext to evict their tenants sooner by capping rent increases. So in all of these examples, During that notice period when the tenant is still living in the unit, rent cannot be increased by more than the consumer price index or 10%, whichever is less. Okay, just a few more to go over here. At the bottom of this page, sum, so in this sample size, Marlborough is the only city that sets a limit on the number of units that can be converted to condos in any building per calendar year. It says no more than 25, no more than 25% of units can be converted in any given year. I don't know if that is something that would be super relevant to our community given the type of this construction that we've, that type of this renovation that we've been seeing so far. I think it's something that's sort of interesting to consider when we look at, as we continue to dig into the data of what units are being converted into condos and which aren't. And similarly, another more flexible way to do this, again, comes from Lexington, where there isn't a cap specified, but the conversion licenses are conditioned on those questions of how bad is our rental shortage currently, and the conversion board can make a determination on whether to approve a conversion license or not based on the need for rental housing in the community. I want to skip down here to the second half of page five. I think this will be something interesting for us to consider, the establishment of a review board that kind of oversees this process. And in different communities, the review board has more or less authority or an involvement with condo conversions and the experience of both owners and tenants during that process. Most of, so Somerville, New Bedford and Lexington, in their ordinances, a condo review board is established by this ordinance. In Boston and in Marlborough, that isn't the case. There are other existing city departments that are named and delegated as having different parts in the process. Maybe they do the conversion permits. They do the conversion licenses. If there's an eviction license, they might handle that. and the responsibilities are kind of spread around. In different cities, and this extends down to the next page, there are different levels of responsibilities afforded to these different departments, whether it's a review board or an existing city department. For example, not surprisingly, Boston does a lot, because Boston is big and has a big budget. The Office of Housing Stability is responsible for establishing the process for conversion plans, approving or waiving, developing that entire system. The Inspectional Services Department promulgates policies for the conversion permitting process. The Office of Housing Stability is actually tasked with contacting current tenants and all recent tenants in a proposed condo conversion to determine if they're eligible for benefits under this ordinance. So they'll actually do outreach to any tenant that conceivably might've been affected. and then get back in touch with the landlord to make sure that conversion plan is set up for any tenants that are eligible. And the Inspectional Services Department submits an annual report to the City Council on, you know, kind of in the line of the report that we heard about from Somerville, kind of an overview of how is this going? What are the outcomes of this ordinance? How is implementation going? For another example, in New Bedford, the Condo Review Board monitors conversions. If somebody is claiming protected tenant status, it will verify that that's true. It's also tasked with doing public awareness programming around the existence of this ordinance and maintaining data and statistics around this. And I mentioned that I think this will be an interesting question for us to consider because Well, I think this has come up in some other recent ordinances that we've talked about that where maybe other examples existed where there was a specific board or commission set up to oversee it. And we look at Wedford and we say, I don't know how much slack in the system we have for supporting a new department. Maybe the suggested tasks and responsibilities are outside the scope of what we would ask a volunteer commission to do. in Somerville, I believe that their condo cooperative review board is at least largely volunteer or perhaps it's stipended, but these aren't members of city staff, they're residents. And I think that we'll have to take a clear eyed look at what could we ask a review board to do that they could actually accomplish, especially since a lot of this is going to be fairly technical. So I'm scrolling down to page six. Permitting process. I don't think that's super interesting. The waivers and applicability. I think is something that we might wanna look at, especially based on some of the comments that we just heard from city staff around the particularities of Medford in specific, who in our community is contemplating condo conversion? How often is that a developer? How often is that an owner occupier? That's considering household finances in part of the equation. And I think our decisions around under what circumstances are requirements of this ordinance waived or parts of this ordinance are waived and what buildings are applicable or not, that could pertain to building size. You know, we already talked about, you know, perhaps buildings, you know, units three and under, there's a question there as to how appropriate that is. And I think another, topic that the question of wave ability could lead us into is, you know, in what ways do we want this to be a lever for trying to create affordable housing or at least funding for affordable housing. When for profit condo conversion is happening, maybe there's a lever that we can pull, such as the system that Marlboro has set up where waiving parts of this ordinance can happen if certain conditions are met and those includes payments to the Affordable Housing Trust, increased payments to tenants if they've lived in the unit past certain thresholds or longevity bonuses to tenants. If the condos meet an owner occupancy threshold, I think it's if more than 70% of the newly converted condos will be occupied by those owners, then they don't have to be subject to the requirements of this ordinance. So those are ways to say, okay, maybe this ordinance creates some onerous requirements on people who want to convert rentals to condos, but if you can demonstrate that it's for the purposes of owner occupation, if you can commit to paying into affordable housing in the community, if you can compensate your tenants that are being displaced at a higher degree, then we can make this easier for you. And I think that that's a lever that we might want to look at for for both of those reasons for the kind of general public interest in terms of affordable housing increasing affordable housing in the community being for the for the general public interest and also for private interest in terms of owner occupiers that might want to convert into a condo and for the private interest of tenants that are being displaced.
[Zac Bears]: Great, thank you, Councilor Collins. That was a lot of information.
[Kit Collins]: Probably too much, sorry.
[Zac Bears]: No, no, no. It was just quite a bit of information, but I think we can see at least everything and the differences between what these five cities have done. I mean, we don't exactly know why, but I think we can start to at least infer why some did some things and some did others. I thought that the 25%, only 25% of units in a structure can be converted a year seemed pretty targeted by Marlborough. So for whatever reason, they passed that. sure they had something in mind. I heard kind of at least one or two places we want to go from here. One was getting some more data and potentially some anecdotal contextual thoughts from our building department staff as offered by the commissioner. Reaching out to the assessor's office to see what kind of data and information that they have as well that can inform this. And Bill, did CitizenServe go into effect, what, 2020 or 2021?
[Bill Forte]: Yeah, I believe it was 2021.
[Zac Bears]: OK. So maybe the assessor might be able to go back a little further, and we can kind of cross-check those two sets of data. I think this other thought around what are the outcomes we're trying to achieve could potentially be a next step here, but that's just what I've heard. Interested in what you're thinking and where you'd like to go from here.
[Kit Collins]: Yeah, I was thinking along the same lines. I think that the process that I would like to see for this ordinance is a start with desired outcomes and kind of work backwards from there. If we start with, here's what we're trying to protect against, here's what we're trying to encourage, here are the incentives we'd potentially like to bake in if we can, here's who this is targeted at, here's what's not targeted at, and from there we can start, I think, or like one option is to look at some of these other municipalities and say, where is the example language that captures what we're trying to capture and what can we look at as a next jumping off point and say, okay, perhaps we're trying to include incentives for paying into an affordable housing fund or an affordable housing trust, What are some ways to frame that? How would that fit in? Maybe we're trying to make sure that owner occupiers are exempted. How can we encapsulate that? So I think from my perspective, brainstorming that list of key topics or key outcomes and going from there would be a great way to move this forward and start whittling.
[Zac Bears]: Great. Lily, if I could. go to your experience really quickly, or at least the research that you've done so far. You mentioned that when you were doing your review, and if you wouldn't mind coming to the podium, just so that when you say something, people on Zoom can hear you. You mentioned that it seemed like a lot of communities kind of looked at outcomes and then tailored ordinances around those outcomes. Do you have an example of how those processes worked or what those kind of target outcomes were?
[MCM00001654_SPEAKER_16]: Sure, I think so I only looked at several I sort of looked at yesterday, but I think one of their biggest desired outcomes was greater protection for tenants and kind of ability to connect the tenants to new housing. So one of the ways they specifically did this was to increase the payments really to kind of bring that in line to what was what is realistic to expect when looking for new housing. in Somerville. So really the goal there was to try as much as possible to keep people in their communities, give people time to look for new housing. And I believe there, I don't remember the details, but there may have been an incentive for the property owners to help connect tenants with new housing and actually offer assistance in that way, rather than simply just offering the payments. So that's kind of one example of like, they really had something very specific, giving people time to find a way to stay in their communities.
[Zac Bears]: Great. Thank you so much. Any motions?
[Adam Hurtubise]: Sorry, I'm syncing.
[Zac Bears]: I have two, but I can't make them.
[Kit Collins]: Oh, because I'm the only other one here.
[Zac Bears]: Oh, thanks. Yeah, I mean, my two thoughts for one, just request data and any other information from the building department and the assessor's office. And the other one being, I mean, I don't want to put work on any city departments around the brainstorming of outcomes. But I was thinking something around that.
[Kit Collins]: I mean, I was gonna say, I feel like that's a kind of easy discussion to have because I feel like there's probably a lot of outcomes that our city staff would like to wish for tenants and owner occupiers since we've heard so many, sorry, I keep smacking my mic, since we've heard a lot of them in this discussion already. I think if there's maybe to not create undue work, I would love to circulate the documents and I can put this in the form of a motion from our meeting tonight, among relevant city staff, just to ask maybe not necessarily for any type of in depth close read at this point because this is really just the beginning of the discussion, but asking for different departments feedback on outcomes to avoid outcomes to focus on, and maybe an example of that would be Like Lily just said, the experience of the tenants, so an outcome would be making sure that tenants can remain in the community. Maybe another outcome is protecting owner occupiers or streamlining the process for owner occupiers, just to get that sort of top line bullet points, staff perspective on what we should be focusing on.
[Zac Bears]: So maybe something to the effect of in, you know, share documents with city departments and invite any department and members of the subcommittee to submit goals that they think this ordinance could achieve and potential negative consequences that we should avoid. So sure, I just want to make sure the clerk has it.
[MCM00001654_SPEAKER_16]: I just wanted to add that I'd be happy to reach out to other communities. and get both updated reports if they have formal reports, and also kind of ask them if they have anything to report about how their ordinances are going. Is there anything they would change? So I'm happy to do that. And also to look at our own housing production plan and comprehensive plan with an eye to sort of seeing where this might fit in.
[Zac Bears]: Okay, great.
[Adam Hurtubise]: I have council calls for the circulatory documents and subcommittee members that don't have city employees for feedback and comments.
[Zac Bears]: Yeah, I'd say for feedback on Um. Goals the potential ordinance could help achieve. And potential negative consequences. Any ordinance should avoid. And then could we add the building department to the first motion? Sorry, not the building, but the planning department. Sorry.
[Adam Hurtubise]: Okay. The vice president request data and other information from the building department, PDS and the assessor's office.
[Zac Bears]: Yep, great.
[Adam Hurtubise]: Second from Councilor Collins. I'm giving you a second on Councilor Collins' motion.
[Zac Bears]: The only option. Correct. So on those two motions, or on the motion of, on my motion seconded by Councilor Collins, all those in favor? Aye. Aye. Opposed? The motion passes. On the motion of Councilor Collins, seconded by me. All those in favor? Aye. Aye. Opposed? No. Motion passes. So those two motions have passed. Is there anything anyone else would want to say at this time before we close out? Seeing none in the room, anyone on Zoom, if you would like to speak, please raise your hand. Seeing none, are there any motions on the floor?
[Kit Collins]: Motion to adjourn.
[Zac Bears]: On the motion of Councilor Collins to adjourn, seconded by me. All those in favour? Aye. Motion passes. Meeting is adjourned.
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