A Deeper Look at Key City Initiatives for FY26

Affordable Housing

The City will continue to invest in affordable housing, a top priority of the City Council, in FY26. Over $48 million was allocated in the FY26 budget and other funding sources for affordable housing initiatives, including the construction of new affordable housing, inclusionary housing efforts, and affordable homeownership programs.

Since the adoption of the Affordable Housing Overlay (AHO) Zoning Ordinance, over 680 affordable units in ten developments are in progress or have completed AHO review. Notably, 62 new units of permanent supportive rental housing opened at 116 Norfolk Street in FY25, and construction continues in FY26 on several developments, including 52 New Street and the Jefferson Park Federal Public Housing. The FY26 budget also includes funding for affordable housing projects currently in the planning stages or set to begin construction soon, including at the former Lesley University Property at 1627 Massachusetts Avenue / 4 Mellon Street.

Additionally, construction on over 100 inclusionary housing rental units will continue in FY26. The City will continue to engage and support inclusionary housing residents and work in response to the Resident Experiences of Inclusion and Bias in Inclusionary Housing Study, which was completed in FY23.

The Department of Human Service Programs (DHSP) partners closely with both internal and external partners to support community members experiencing homelessness. In addition to $1 million for Municipal Supportive Housing Vouchers, DHSP will contribute $497,250 to these services in FY26, which include assistance with the housing search and housing applications, as well as funding for community meals and the shower program at the First Church Shelter. The City will also continue to offer homeownership education to residents and financial assistance to income-eligible homebuyers in FY26.

Anti-Racism and Equity Initiatives

The City remains dedicated to dismantling inequality and building an inclusive environment through its ongoing Antiracism, Diversity, Equity, and Inclusion (ADEI) strategy in FY26. These efforts involve the work and collaboration of departments citywide, including but not limited to the Office of Equity and Inclusion (OEI), and initiatives across the city are also pursued through an ADEI lens.

OEI takes the lead on many internal initiatives for City staff, including employee engagement and mandatory staff training. In FY25, they organized wellness events and culturally responsive events for Juneteenth, Hispanic/Latine Heritage Month, and other national observances, incorporating diverse perspectives into the planning process and drawing over 2,500 participants, including Cambridge employees and residents. Furthermore, OEI also worked with City departments to create Cambridge’s first Discrimination, Harassment, and Retaliation Policy and revised the Reasonable Accommodation Policy. This work ensures these policies, written in plain language, continue to foster safety and inclusivity in the workplace and comply with federal law. The FY26 budget also includes additional support for the Minority Business Enterprise Program, overseen by OEI, which requires a minimum of ten percent of the total bid or materials cost for construction contracts valued at $100,000 or more to be sourced from certified minority businesses, promoting economic opportunity and equity, a key priority of the City Council.

Other departments citywide are also leading antiracism and equity initiatives, including Human Service Programs, which is carrying out a Drop Everything and Learn initiative to eliminate racism in the department, and the Cambridge Public Library (CPL), which has formed a Library Antiracism, Equity, and Inclusion Committee. CPL is also expanding its Digital Equity Initiative, circulating over 230 Chromebooks and 95 mobile hotspots to support participation in the economy and society through equitable access to technology. Focused work is also underway in the Police Department, from the launching of the Procedural Justice Dashboard and the implementation of the Body Warn Cameras program to increased community engagement with residents, including youth, older adults, and the faith community.

The City also established its inaugural ADEI Council, consisting of 12 employees from across departments who work to advance progress toward equity and advise OEI in remaining responsive to city needs. This council will serve as a model for future ADEI efforts in the City in FY26 and beyond.

Open Spaces and Community Corridors and Squares

In FY26, the City will continue to invest in open space projects across Cambridge. These include the end of construction at the Peabody School Playground and Gold Star Mother’s Park, as well as the start of renovations to Rafferty Park in the Cambridge Highlands and Raymond Park in Neighborhood Nine. Additionally, the Danehy Park Capital Improvements Plan will be completed this fiscal year, and the City will begin community engagement efforts as planning for improvements to Hoyt Field and mid-Cambridge parks gets underway.

In addition, in efforts to engage in area-specific planning, the City will continue planning and zoning initiatives in Cambridge’s mixed-use corridors and squares—economic and community centers in the City. These plans include recommendations for zoning changes in the Cambridge Street corridor and Central Square, increased development in the Massachusetts Avenue corridor between Cambridge Common and Alewife Brook Parkway, and rezoning and housing and commercial development around the Alewife MBTA station and adjacent shopping center. Working groups continue to engage with the local community in each area as the City pursues broader goals of transit-oriented housing, pedestrian and bicycle safety, and sustainability throughout these spaces.

Preschool and Out-of-School Time Programs

In September 2024, enrollment began in preschool programs under the Cambridge Preschool Program (CPP), a joint effort of Cambridge Public Schools and the Cambridge Office of Early Childhood (OEC) and a long-term priority of the City Council. Over 800 Cambridge preschoolers were welcomed into the 23 preschool providers in Cambridge that are affiliated with the CPP. The OEC will work to expand this mixed-delivery program in FY26 to further provide access to high-quality education for Cambridge children, support early childhood educators, and incorporate family feedback for the upcoming CPP application cycle.

In addition, the Department of Human Service Programs (DHSP) continues to strive to increase access to out-of-school time programs, including high-quality after-school programs, that are affordable and accessible to Cambridge families. The Out-of-School Time Expansion Study, conducted in FY25, identified space-sharing, the inclusion of children with special needs, and workforce stabilization as important areas of focus for these programs.

As demand has increased, DHSP has added an additional 246 afterschool seats over the past two years, reducing the length of the waiting list for these programs. In FY26, DHSP will add additional seats at programs across the City and add additional full-time staff positions as well as a full-time Inclusion Specialist. DHSP has also prioritized and worked to expand outreach efforts, including to low-income families.

Sustainability and Climate Action

Progress toward decarbonization remains a crucial part of the City’s sustainability work. Created in FY25, the Office of Sustainability (OoS) leads these efforts, aligned with the City’s Net Zero Action Plan and the Building Energy Use Disclosure Ordinance (BEUDO). In FY26, OoS will continue developing community energy programs for residents and businesses and finalize and implement BEUDO regulations, all with the goal of saving energy and moving away from reliance on fossil fuels.

To better connect with community members in Cambridge and beyond on these efforts, OoS launched the Sustainable Cambridge web page in April 2025, available at www.cambridgema.gov/sustainable. The web page features a sustainability dashboard, a link to sign up for Sustainable Cambridge update emails, and information on recycling/composting, saving energy, and more.

Additionally, departments across the City are working together in FY26 to prepare for the increasingly variable effects of climate change, including hot summers and unpredictable winters. OoS is working to identify and direct resources toward people and places in need of priority support.

Transportation and Safe Streets

The FY26 budget funds several Department of Public Works (DPW) construction projects on Cambridge streets, including in the Port, on Massachusetts Avenue in Central Square, and on Massachusetts Avenue from Harvard Square north to the Cambridge-Arlington line. These projects are guided by the City’s commitment to Complete Streets—streets that safely accommodate all users, regardless of age or ability, including pedestrians, cyclists, motorists, and public transportation riders—and Vision Zero, the City’s initiative to eliminate all traffic fatalities and serious injuries. DPW projects also emphasize bicycle safety under the City Council’s Cycling Safety Ordinance, which requires the City to install a network of separated bicycle lanes across Cambridge.

Additionally, the City is expanding off-road pedestrian and bicyclist facilities, including Linear Park, the Grand Junction multi-use path, and a new path between Fresh Pond and Danehy Park. Together, these projects will increase safety and access to sustainable transportation by creating 2.8 miles of landscaped paths separated from traffic. The City will also install at least 150 bicycle parking racks and other facilities across Cambridge, primarily in key locations such as schools and business districts. In addition to the ongoing Safe Routes to School program, which provides Cambridge students with education on bike safety and training, the City will also launch a new class on micromobility in FY26.

Furthermore, as the MBTA enters the next phase of its Bus Network Redesign project, the Community Development Department will continue to work closely with the MBTA to improve transit access in Cambridge neighborhoods. The City will also conduct a new study on shuttle services in Cambridge in FY26.

FY26 Budget Prioritizes Financial Flexibility Amid Shifting Economic Environment

The FY26 budget was developed in the context of shifting macroeconomic trends and increasing economic uncertainty at the federal level. This, combined with the end to American Rescue Plan (ARPA) funding, led this budget process to prioritize safeguarding financial stability while protecting vulnerable residents. The FY26 budget continues to support the City’s operational needs while also ensuring financial flexibility in case of unexpected circumstances.

Currently, unfavorable macroeconomic trends are impacting both the local and national economy. The U.S. economy shrunk over the first quarter of 2025, consumer sentiment has decreased, and investment has slowed due to concern about tariffs. While Cambridge has had strong commercial development and increasing property values for years, the City’s commercial real estate market has slowed recently. These trends could increase the City’s reliance on property taxes for revenue. For these reasons, protecting financial flexibility is paramount to maintaining important City programs and initiatives and responding to future community needs. Following a series of meetings on this topic, the City Manager proposed a plan with the Finance Committee and City Council to moderate the growth of the City’s budget to preserve financial flexibility, while continuing to invest in important programs and services.

Additionally, the end to ARPA funding demonstrates a need for City investment in ongoing community programs. ARPA funding, intended to help communities recover economically from the COVID-19 pandemic, has funded various important City programs, from small business support to homeless support programs. Existing ARPA funds must be spent by the end of 2026, and no new funds will be allocated. Beyond ARPA funding, there are concerns surrounding other federal funds, including those that have already been allocated but may be affected by federal budget changes, executive orders, or litigation around grant conditions that are inconsistent with City polices and values.

In response to these concerns around federal funding and the changing economic conditions, the originally submitted FY26 budget was amended to include $1 million in funding for a Municipal Supportive Housing Voucher program. While separate from the FY26 budget, $5 million in total was appropriated for a Federal Grant Stabilization Fund, which can be drawn on in the event of potential funding cuts.

Throughout the year and budget process, the Budget Office is constantly making and revisiting projections for five years into the future. In this way, the City strives to prepare for shifts in the economic environment and unexpected situations that could arise. Furthermore, the City’s economic position is bolstered by years of reserve planning and efforts to make significant investments into the Cambridge community while saving money to prepare for unforeseen circumstances.

Despite the current economic conditions, the City remains dedicated to providing vital services and programming for the Cambridge community. The FY26 budget reflects this commitment while also furthering the financial resilience necessary to navigate uncertain economic times.