Multifamily conversion in Somerville, MA

[Philip Vidal]

Hi folks - long time reader here.

My wife and I are scoping out a SF property in Somerville. It has the bones and sq ft to be converted into a multifamily though we have a limited understanding of the MF conversion process. Any thoughts or tips from anyone who has gone through this before in Somerville? Apologies if this info is posted elsewhere on the forums, I looked around but failed to find anything.

Thanks in advance!

[Adam Sankowski]

Hey @Lien Vuong Thanks for the kind words and vote of confidence! @Philip Vidal sorry that it took me a bit to post on here, busy week! So I have not gone through this process but I do own a 2 family in Somerville. We recently did an extensive renovation on it to create an Airbnb unit within it (more on that later) and during it I spent a lot of time in the planning office with our architect so I have a bit of insight. Plus, I have been watching this all like a hawk because the zoning is about to change in Somerville and its looking like a lot of people (myself including) will be able to build a small but decent sized single family house behind our main house if you have the proper lot size.

Lien is 100% correct that there is a TON going on in Somerville right now. I am no expert here but here's what (I think) I know :) She's also right that a lot of developers are in a holding pattern because no one knows what the final zoning changes will be. They have been trying to pass this for years and years and I think they finally have a version that might make it through. Also, I'm really interested what you learn when you went to city hall... please report back!

There are a few things to clarify here. The condo stuff is different than the zoning changes. The condo ordinance has already been passed and is in effect. I don't think this will effect you if you're looking to expand a single family into rental MF. The condo stuff is to put some rules into effect for the flippers. Basically its pretty strict in terms of displacing older tenants, or lower income tenants in order to create luxury (or any but luxury is what they are building) condo units. It gives the current tenants right of first refusal and stuff like that... Doesn't sound like that's what your trying to do though.  Here is all of the language of it, good luck figuring it out ha: https://www.somervillema.gov/sites/default/files/updated-draft-condominium-conversion-ordinance.pdf

Might be helpful to say that it looks like it will be very helpful to you if you can make this an owner occupied project as well although that is not required maybe?  In general it seems like Somerville is way friendlier to owner occupied things.  For example you can't Airbnb and you can't create one of these new cottage houses without it being owner occupied. Anyways, the condo ordinance stuff is for condos. The zoning changes are what you need to be concerned with. So here's the issue... will it pass? What will the final rules be? Its dangerous to buy without knowing but there also might be an opportunity here too since no one else is probably buying right now because its all unclear?!?

The newest version of the zoning changes is here: https://www.somervillezoning.c... and: http://3pb8cv933tuz26rfz3u13x1...

I have read every version that has come out and they wildly swing between one side to another. Half of that is appeasing voters and half of that is appeasing city councilors so that they will vote for it (I think they need 8 out of 11?) The big thing that will effect you is that in the latest version they are requiring any new construction or multi family units being added over 2 units to have the 3rd one be a tier 3 ADU or Affordable Dwelling Unit. So if you're turning a single family into a two family not a big deal BUT if you're going for a 3 family then one of them will have to be a Tier 3 ADU. There is a complicated formula to figure out the Tier 3 rate WAYYYYY at the end of the super long proposed zoning ordinance link above, but basically its about $2,500 for a 3 bedroom. Which is way below market but not horribly below. Also the price tracks to the median income of the area so it will automatically increase I believe? Way better than a tier 1 ADU, which big time developers have to put in, as that's like $900 for a 3 bed, yikes! That's what I paid in Allston for a bedroom in a crappy huge house in 1998! Also, everyone is freaking out over the ADU requirements and then if you read farther down there is a way to just pay into the Somerville affordable housing fund and avoid putting in an ADU. I'm sure its a bunch of $ but funny that they make it seem like they are all pro affordable housing when you know that every developer is just paying to opt out of it ha! I didn't run the numbers on that as it was way too much. Plus, $2,500 for a 3 bedroom still felt worth it to me.

There is a catch if you want to put a "cottage house" behind a main house as your way of creating a MF out of a single family (which would really just be 2 single families on the same lot). That has to be an ADU if rented and you can't even do it unless you are owner occupying some part of the property. And you can't just go and condoize and flip the cottage house as the sale price as to track to the same system as the ADU's.

Lien is correct that there are big changes happening to the FAR (Floor Area Ratios) but when I met with the planning department it seemed like it was all positive. For example, under the old building codes, if you added 500 square feet in the basement then that was 500 square feet that you're adding the overall property and they had this equation of lot size minus square footage equaling how many units you could have on a lot and how many square feet it can be. From my understanding under the new rules they are getting rid of counting that so you can add a ton of square footage in the basement and not have it count for anything, which can be really helpful to pack bedrooms into a unit.

Now, I read through most of the zoning proposal and I can't find any mention of FAR so far (ha!) all I could find is that you can't build or develop more than 60% of the lot. If that's true then you build exactly up to 60% and you pack as much as you can into that?  I don't know.  This is an area that when it passes I'm going to reach back out to my architect and pay him to set up a meeting with the zoning department to figure it all out. 

That's another thing that I would stress in all of this.  A good and connected architect in the city is worth their weight in gold.  I had so many questions when we were going to do our renovation and couldn't figure any of it out.  We hired an architect and he set up a meeting with zoning, which is like 3 dudes in their early 30's in a back office at city hall, and we got on Google Earth and they checked out our house and answered all of my questions.  The moral: ask around and find the best and most connected architect you can.  I emailed zoning a ton to try and go in myself and never heard back.  I hired the architect and we had a meeting scheduled 2 days later. 

The parking thing is something that I can't quite figure out... I know that they are requiring parking, but its unclear what you can do and can't.  They are requiring "green space" too but the way people seem to be getting around that is using porous pavers in units.  Somerville is more concerned with water run off than green space to be honest so they just don't want to see a ton of new blacktop coming into a new unit.  Also the parking rules are strict but you can go around them by being close to one of the new green line stops as they are considering (I believe) that your tenants can walk to transit.  There is a map somewhere (I think in the zoning link above) that shows the areas around the new green line stops and if you're in it you don't have to follow the parking rules, which I think is providing space for one car per unit added? 

Back to the ADU thing for a moment... I have signed up for a lot of the Somerville counselor's newsletters and I know that counselor at Large Stephanie Hirsch wants any additional units, even going from 1 unit to 2, to be an ADU. So will they change that to get her vote? Here is where the risk is, all of this could change at any moment until it is passed.

I will say that the current zoning code is crazy weird and has a ton of rules and loop holes so I'm not going to miss it. For example my house is right next to a school and we are 3 feet from the property line, not the 6 feet required, so we are a "non conforming lot" so we need a special permit for EVERYTHING, which involves a public hearing just to add a dormer. We gave up adding one during our recent renovation because they would require us to add green space to the unit in order to pass the special permit and then if we ever wanted to take the green space away when the zoning changed that would have been near impossible... so the current zoning blows and anything updated will be better! 

@Dan K. is also totally correct in that there are specialized lawyers who get the big projects through. There is a condo flipper finishing up a huge project on my street... he bought and filpped three houses on my street, all with the same design, and I know from the lot size that when I went to the planning department they told me there was no way to build that in Somerville but...boom... this guy built three of them so I don't know what he did or who he used but he did not get the same answers from zoning that I did! Even counselor Hirsch picked up on this and in her last newsletter talked about how she went to every public planning meeting and found that every major building project going through Somerville was represented by one of the same 3 lawyers (unfortunately she didn't mention who they were ha!)

So what should you do? If you find a smoking hot deal honestly I'd jump on it because the new rules should be favorable and having to charge a tier 3 ADU price isn't the worst and maybe make the one with the most beds the non-ADU one.

This is also a whole other post but Somerville just changed their Airbnb laws as well and, at least to me, they are very favorable. If you are an owner occupier you can rent "a room" in your house on Airbnb (as long as its owner occupied) and it doesn't count as a separate unit!  So we took our 2 family and created an Airbnb unit, making it basically a 3 family, with no issues at all.  In fact you're not allowed to rent a full separate unit on Airbnb. You can't rent out more than 250 square feet but what we did is take the 3rd floor in our house, turn it into "a room in our house" but added a bedroom and a kitchette. The only thing the code department didn't allow us to do is to put a stove up there but it has a separate entrance and everything. So basically let's say that you turn a 1 family into a 2 family. BUT... you can then ahead of time portion off a part of your unit into "a room in your house" (wink wink) for Airbnb. But this "room in your house" can basically be a studio apartment without a stove...  We are easily making 3-6x what market rent is with our Airbnb. Its crazy money. Plus since Somerville and Boston have cracked down so much, and will crack down even more with fines that are coming in January in Somerville, then you'll be one of the few with a legal Airbnb aka. a home with tourist usage permit.

Check out the Somerville Airbnb laws here: https://www.somervillema.gov/strshttps://www.somervillema.gov/sites/default/files/short-term-rental-guidelines.pdf (this the most useful document)

The process to create an Airbnb was super easy and the code department weren't pains at all. They made us add a hand rail and that's it and bam, basically a total other unit.  That's cash flowing more than I could ever imagine! 

Sorry that this info I've posted is so much and kinda all over the place but so is the zoning process right now :)  They should vote this month and pass it but they have been saying that for 4 years so who knows! Please reach out if you have any questions! I'm following this stuff non-stop cause I want to see if I can build or want to see what I can build in the future. Also please share what you learned by going to city hall?!?!?