Author: Dilia Ramirez

Stepping Up: How Cities Are Working to Keep America’s Poorest Families Housed

Having a place to call home is a signature component of the American dream. But for far too many people, finding safe, decent, affordable housing is extremely stressful. The United States simply does not have enough affordable housing. And nationally, the situation is only getting worse.

This story is not about just counting homes. The affordable housing shortage has real consequences for families because millions of them pay more than they can afford to have a place to live, often at the expense of food, health care, and other necessities.

For extremely low-income families—those households earning no more than 30 percent of their area’s median family income—this pain is severe.

According to data from the Census Bureau and the US Department of Housing and Urban Development (HUD), only 28 of every 100 extremely low-income renter households in the United States were able to find decent, affordable homes in 2013. This stark decline from 2000, when 37 of every 100 could find housing, reflects both a loss of units and an increase in extremely low-income families.

Without federal housing assistance, the situation would be even worse: the share of families who could afford adequate housing in 2013 would have fallen to 5 percent.

The first federal programs to tackle housing affordability were created in the late 1930s. Over the next decades, those programs allocated resources to big cities with big needs.

Since the 1990s, however, federal resources devoted to housing extremely low-income renters have slowed. And growing cities—mainly in the south and west—have suffered.

The national picture could get bleaker. In recent years Congress has cut, and shown additional interest in trimming, federal spending for housing assistance programs.

The data’s message is clear. No matter where you look , federal programs are not enough. As a result, state and local governments must do everything they can to preserve existing affordable housing units while finding ways to produce more.

Counties around the country face their own challenges when addressing affordable housing needs. These variations exist, in large part, because counties have different federal, state, and local assets to work with. Both the tools and counties’ ability to wield them reflect particular histories, political climates, and levels of local engagement.

Suffolk and Travis Counties—homes to Boston and Austin—are very different. The most obvious difference is that Massachusetts is very supportive of affordable housing, while Texas is not. Another is that Boston benefits from its legacy of federal rental assistance, while Austin has experienced more recent growth and is unable to keep pace with rapidly increasing need. But both are using multilayered strategies—some proven, some promising—to tackle their local affordability challenges. And both are determined to face an increasingly daunting task.

1. The research used the household as the unit of analysis. “Household” and “family” are used interchangeably in this feature.

(Photo above) The Brooklyn borough of New York is shown in this Tuesday, April 20, 2010, aerial photo. Mayor Bill de Blasio has an ambitious plan to build or preserve 200,000 affordable housing units over the next 10 years for lower-income New Yorkers, a staggering number that would house more people than such cities as Atlanta or Minneapolis. Photo by Mark Lennihan/AP.

The Strength of a Legacy
On the border of the Boston neighborhoods of Roxbury and Dorchester, neatly tucked between the orange, red, and silver commuter train lines, sits a classic red-brick building accented with white windowpanes. Inside the Wilshire Apartments’ 29 units live 20 extremely low-income families who receive a federal housing subsidy known as Section 8 project-based rental assistance.

In Boston, this program helps families who generally earn less than 30 percent of the area’s median income—$29,550 for a four-person household in 2015—pay for rent and utilities. These families are typically much poorer than that: on average, Boston households receiving HUD programs had $16,261 in income in 2013.

If not for the efforts of Boston’s affordable housing community working in concert with dedicated local, state, and federal partners, the families living in the Wilshire Apartments would not be Section 8 beneficiaries. Instead, the building likely would have been snapped up on the open market years ago and converted into market-priced apartments that these families could never afford.

Building new properties in Boston that can meet affordable housing needs is difficult; construction is generally expensive, and vacant property is hard to find. Plus, this older, congested northeastern city has very tight zoning restrictions.

Aerial view of the Boston neighborhood of Roxbury in 1925. Photo courtesy of the Boston Public Library (CC BY-NC 2.0).

Thus, finding multilayered and creative strategies to keep existing housing affordable, reimagine it and the land it sits on, and expand it to serve more extremely low-income families have been central and persistent goals for the key housing players in the city and state.

To be sure, the county’s success to date is hard-earned and by no means accidental. Despite these efforts, nearly half of Suffolk’s extremely low-income families lack affordable housing.

RIGHT PLACE, RIGHT TIME
Thanks to the state’s deep commitment to affordable housing, Suffolk is the top-performing large American county when it comes to providing housing for extremely low-income families. Another four Massachusetts counties place in the top 10 large counties with the smallest affordable housing gaps.

Suffolk was able to provide affordable and adequate housing for nearly 51 percent of its 74,262 extremely low-income families in 2013. This share is almost double the national average, and it’s nearly 3 percentage points better than the county was able to perform in 2000.

This is definitely a good news/bad news kind of issue. It’s all relative. These five Massachusetts counties, including Suffolk County, are doing better than the rest of the country, but the fact is the best is still pretty poor.

Roger Herzog
Executive director, Community Economic Development Assistance Corporation (CEDAC)

The seeds of Massachusetts’s relatively strong performance were sown in the ’50s, ’60s, ’70s, and ’80s. During these four decades, the state became an early beneficiary of HUD’s programs, developed effective state-run platforms, and created CEDAC to help produce and preserve affordable housing.

Under HUD’s fledgling programs, the federal government offered financial incentives for developers to build affordable housing; in return, the developers committed to keeping that stock reasonably priced for several decades. Section 8 project-based assistance and federal low-income housing tax credits were critical resources added later to the state’s affordable housing toolkit.

Massachusetts also invested its own resources. It created state public housing and state housing voucher programs, both entirely distinguished from their federal counterparts. The state also crafted its own low-income housing tax credit program during the late ’90s. Massachusetts even put together state financing for affordable housing—similar to HUD’s Section 236 program—called Section 13A.

Boston Housing Authority map of Archdale Road Housing Development, circa 1950s. Photo courtesy of City of Boston Archives (CC BY-NC 2.0).

“The state has historically, and continues to, put money into affordable housing, into vouchers, and into state public housing, which isn’t the norm across the country,” said Rebecca Koepnick, director of neighborhoods and housing at the Boston Foundation.

Given these opportunities, many counties in Massachusetts, including Suffolk, went all in. During those early decades, Boston built as many as 40,000 units for low-income and extremely low-income households.

WAVES OF RISK
Though HUD’s programs and Massachusetts’s willingness to use them boosted the number of affordable housing units in Boston early on, before long a significant portion of this supply came under threat.

The deals struck by housing developers and HUD allowed developers to pay off their mortgages after 20 years and rent the units on the open market, with no further requirements to lease to low-income tenants.

By the late 1980s, many Boston neighborhoods—including those with HUD-subsidized units—had recovered from the economic stress of previous decades. Many developers were tempted to opt out of the HUD programs and rent to higher-paying middle-class tenants looking to move back into the city.

This temptation to opt out was assuaged with national measures that created new incentives for developers to stay committed to their deals with HUD. But Boston took it even further. This first crisis prompted the development of what has become a very strong network of organizations—such as CEDAC—working to preserve affordable housing in the capital city.

“The preservation interest was triggered, particularly, by the circumstances of high rents and programs running out of contract terms, such that the housing was at a risk,” said Amy Anthony, who was the secretary of the Massachusetts Executive Office of Communities and Development from 1983 to 1990. “We hit that sooner than most places, because we had such active early development on the private developer side in early federal programs.”

Anthony is the founder of the Preservation of Affordable Housing (POAH), a nonprofit developer working in nine states and the District of Columbia to preserve and improve affordable housing.

South Boston triple-deckers are seen in the foreground with the downtown Boston skyline looming in back, Wednesday, January 15, 2003. Photo by Elise Amendola/AP.

Nonprofits, together with smaller developers known as community development corporations, mission-driven for-profit developers, and some financial intermediaries, form a strong fabric of organizations working in Boston to buy at-risk properties, expand their capacity, and ultimately keep them affordable.
This is an amenity few other cities have, and it has been helping Boston since the first wave of risk crested.

A second wave of risk followed in the late 1990s, when a lot of housing units with HUD Section 8 project-based rental assistance came up against their agreement expiration dates. City and state officials, CEDAC, and the developers collaborated, strategized, organized tenants, and negotiated with private owners. As a result, much of the project-based housing stock was preserved using available public resources.

A third wave of risk is playing out now. Agreements are again approaching the limits of their 40-year mortgage terms, and Boston is again having to find ways to meet this challenge.

INNOVATING
With declining federal funds for public housing, the Boston Housing Authority is looking for support outside its normal ecosystem. Using a HUD program known as the Rental Assistance Demonstration, the authority is looking to lure more private-sector dollars into public housing.

“I am, quite frankly, very disappointed that the feds have taken a hike on funding [public housing],” said William McGonagle, administrator of the Boston Housing Authority. “Having said that, I would say that I am cautiously optimistic that through this vehicle we can … find ways to invest in public housing and maintain affordability over the long term.”

McGonagle also hopes to build in long-term affordable housing guarantees whenever public lands are leased to private builders looking to develop residential buildings.

Another asset that allows Boston to navigate this ever-perilous risk of losing affordable housing is an early warning system set up and managed by CEDAC.

The system is essentially a fine-tuned database that provides detailed information about all the publicly financed, privately owned affordable housing in Massachusetts. Using this information CEDAC, the state, Boston, tenant organizations, and developers can strategize about the best time to buy expiring affordable housing and preserve it.

Girma Bealy, a member of the Roxbury Tenants of Harvard, talks on his cell phone during a break between plenary sessions at the Housing Boston 2012 conference in Boston Friday, April 27, 2007. South Boston and the financial district, in the distance, are shrouded in fog and rain. Photo by Stephan Savoia/AP.

Boston has another thing going for it: the Massachusetts Department of Housing and Community Development, CEDAC, and the MacArthur Foundation in 2009 created a fund that provides bridge loans to affordable-housing buyers looking to preserve properties, so they can act quickly when the alarms go off and these properties come to market.

An additional edge: the state legislature in November 2009 passed a law known as Chapter 40T that—among other things—gives the state the “right of first refusal” when owners of affordable housing properties are selling them without a commitment to maintaining affordability. In other words, the state gets first dibs if it wants to preserve the affordable housing.

Chapter 40T’s presence was integral to preserving the Wilshire Apartments for extremely low-income families. The apartments are about to be renovated and upgraded, but their future as stable homes for those in need is secure going forward.

Policy tools and the savvy players in Massachusetts and Boston that figured out how to combine and use them have led to Suffolk’s relative success. This legacy of benefits was available to counties like Suffolk because they were population centers when public investment came online and was significantly greater than it is today. For cities and counties that have grown large since that time, it is a whole different ball of wax.

Reenvisioning Austin
Head southwest from Boston nearly 1,700 miles as the crow flies and you’ll arrive in Austin, a chic Texas city known for its artsy culture, funky vibe, and easy-going ways. But it’s also undergoing some turbulent growing pains that include rapidly escalating housing costs.

In 1965—the year HUD was created and around the time Massachusetts began hardwiring itself to take on affordable housing—Austin was a sleepy little state capital/college town with a modest population of 214,117. That number more than doubled between 1965 and 1990, and it has nearly doubled again since, reaching 865,504 in 2014.

Austin is now America’s 11th most populous city. And, as the fastest growing city in the United States, its migratory inflow isn’t expected to slow down anytime soon. Despite these patterns, until recently Austin didn’t see itself as a big city, with big-city issues to tackle. So it didn’t cultivate a strong network of developers, lenders, and other organizations devoted to preserving or building new affordable housing.

Nor was Austin large enough, or sufficiently motivated, to attract the federal support for affordable housing that more established cities like Boston received in the latter half of the 20th century.

Texas state politics do not support the creation of robust state programs that fund affordable housing projects or interventions in housing markets. In fact, in several cases, the state legislature took housing policy tools away from Austin.

We don’t feel the love at the state level. There is not a tremendous amount of support in the state budget for affordable housing.

Betsy Spencer
Director, City of Austin’s Neighborhood Housing and Community Development
But within important city offices, urgency is building to confront this issue head on. Mayor Steve Adler and every member of the city council, except one, ran in 2014 on a platform of keeping Austin affordable.

“If we don’t do this now, in the next couple of years, it’ll be too late,” Spencer added. “We’ll be San Francisco. Now is the time.”

A NEW DAY
As the recently sworn-in mayor took to the podium for his inaugural State of the City address on April 13, he knew it would be a pivotal moment for his administration—and for the policies he hopes will make Austin a more affordable place to live.

“We’ve got big-city economic pressures,” Adler told the audience. “If our artists, service workers, teachers, and longtime residents can’t afford to live here, we can’t be the Austin we’ve always intended to be. We have to make housing affordable for families at all income levels and at all stages of life.”

6th street in downtown Austin.

Indeed, Travis County, where Austin is seated, was able to provide housing for only 15 percent of its 48,057 extremely low-income renters in 2013—a rate 10 percentage points lower than the national average.

What’s more, an independent evaluator contracted by Austin released a report in 2014 showing the city needs at least 48,000 rental units dedicated to extremely low-income residents.

Clearly, both the city and the county have their work cut out for them.

HUD programs—such as public and Section 8 housing—and a federal housing tax credit program offer Austin some external support for its low-income residents.

But the city also has a few tools of its own.

The biggest to date are general obligation bonds authorized in 2006 and 2013 specifically to finance affordable housing projects. The $55 million raised in 2006 was leveraged into $200 million and used to build 3,417 units for residents that earn less than 50 percent of the area’s median income. The $65 million raised in 2013 is still being put to work.

Austin also has a slew of density bonus programs that aim to convince for-profit developers to include a certain percentage of affordable housing units in their projects. In exchange, developers receive permission to construct bigger buildings with more units.

In addition, a small housing trust fund contributes, and policymakers hope it will soon generate $1 million a year to spend on affordable housing. When the city sells property and it is redeveloped, 40 percent of the new property’s tax base goes into the fund. The recent redevelopment of the Seaholm Power Plant and the Mueller community are examples of this policy at work.

Austin’s housing authority distributes roughly 5,400 Section 8 vouchers, has an additional 1,000 affordable units to offer through a subsidiary, and is bringing several more buildings into the fold.

“We’ve got a ways to go,” said Michael Gerber, president and CEO of the Housing Authority of the City of Austin. “There is a lot of room to improve, but there are a lot of very fine minds in the nonprofit sector and among policy development organizations … that are also putting a lot of energy into this and that’s exciting.”

Austin has some good tools and some skilled craftspeople. But the city needs more.

“We will continue to employ bonds and incentive programs … but they are not nearly enough to meet a gap this size,” Mayor Adler added. “We must also harness Austin’s innovation to bring more resources to this issue.”

BOOTSTRAPPING

Zenobia Bechtol, 18, and her 7-month-old baby girl Cassandra play in the dining room of her mother’s apartment, where they live, Wednesday, December 14, 2011, in Austin, Texas. Photo by Erich Schlegel/AP.

Austin is rethinking the way it addresses affordable housing. Many of the city’s key players sit on a steering committee—spearheaded by HousingWorks Austin—to carry out one of Mayor Adler’s top ambitions: the establishment of a “strike fund” that would chip away at the problem by preserving 20,000 affordable units and building new units over the next 20 years.

The articulated aim of the fund is to seed it with about $1 million from the 2013 bond sales, then add $20 million to $30 million of private investment. From there, the fund would be managed and grown by a community development financial institution. Developers could use money from this fund to quickly enter Austin’s hot housing markets and snap up properties that could be preserved or used to build future affordable housing projects.

“We know that we need additional sources of funding,” said Mandy De Mayo, executive director of HousingWorks Austin and a steering committee member.

“We really need to do a better job of leveraging those funds with private capital.”
Steering committee member Elizabeth Mueller—a community and regional planning professor at the University of Texas—used a HUD sustainable communities grant to develop a metric that helps the city identify and prioritize transit corridors containing ’70s- and ’80s-era unsubsidized, old, and cheap housing units. Once identified they can be targeted for acquisition and preservation before they get too expensive.

Ann Howard—the executive director of the Ending Community Homelessness Coalition (ECHO)—believes that Austin already has the ingredients to generate more private capital investment for such ends.

We don’t [yet] have the mature philanthropic community that old cities have, [but] Austin is home to the largest venture capital–type programs in the state of Texas. So there is plenty of money here to help try these new models of funding, and we’ll just have to be able to harness that.

Ann Howard
Executive director, Ending Community Homelessness Coalition (ECHO)
ECHO has gotten off to a good start: it recently received a small subgrant from the Corporation for Supportive Housing to study the feasibility of using a “pay for success” transaction to develop supportive housing units and wraparound services for Austin’s homeless residents. These grants are financed through the Social Innovation Fund, a program of the Corporation for National and Community Service, and they include matched funding from other external funders.

The steering committee also believes that the key to attracting more capital is promoting the holistic benefits of affordable housing. If Austin can house low-income residents while reducing commute times, energy bills, trips to the hospital, or lost workdays, then overall cost-savings will occur, and social investment will follow.

“We have to talk about this in a broader way or we’re just not going to go anywhere,” Mueller said. “We have the attention of people who could really make some big things happen, but it hasn’t happened yet. As we say in Texas, we’re fixin’ to do it.”

A WAY FORWARD
In Austin and Boston, local players are using focused efforts, creativity, and coordination to make a difference. But these innovative actors cannot close the housing affordability gap using only local strategies and resources.

Building new units, as Austin is doing, is only part of the battle. Making new units affordable to the poorest families requires subsidies; rent income alone will never pay for these properties’ ongoing operating expenses. Even in a county like Suffolk—with its legacy of infrastructure and institutional knowledge, as well as a very supportive philanthropic community and state—the outcomes for extremely low-income families would be dismal without federal support.

Federal housing assistance remains a fundamentally critical element to closing the housing affordability gap. Without that support, the safe, decent, affordable housing that so many Americans dream of will always be out of reach.

SourceUrban Institute

Chapter 40T at 5; Meeting its Intended Purpose and Highlighting Tremendous Need

MassHousing and the Community Economic Development Assistance Corporation released a report entitled Chapter 40T at 5: A Retrospective Assessment of Massachusetts’ Expiring Use Preservation Law, which reviews the first five years of experience under the Massachusetts Affordable Housing Preservation Law, Chapter 40T. The report, prepared by housing consultant Emily Achtenberg, found that the law has basically been fulfilling its intended purpose to track the disposition of affordable housing projects and to give local and state government officials, as well as residents, an opportunity to purchase these projects and assure their preservation as affordable housing.

Among the report’s key findings were the following:

· DHCD Use of Right of First Refusal. Eight properties offered for sale that have triggered of DHCD’s Right of First Offer (ROFO) under 40T have been sold to qualified non-profit and for-profit purchasers, resulting in the long-term preservation of more than 1,0000 affordable units in some of the Commonwealth’s strongest housing markets. DHCD has created a process for affordable housing developers, both non-profit and for-profit, to qualify for this right to purchase project under the ROFR.

· Over 100 Projects Preserved. 10,000 units in more than 100 properties have been or are slated to be preserved by owners and purchasers who have pledged to keep them affordable in exchange for receiving a preliminary exemption from the 40T ROFR process. In the vast majority of these cases, owners and purchasers have promised to retain at least the same number of affordable units that existed prior to 40T.

· Final Reporting Needed. Projects that receive preliminary exemptions are not filing final reports with DHCD documenting that deals have closed in accordance with the owner’s applications. While there are no indications that there are any issues with these transactions, the report points to an area for additional follow-up by DHCD and project owners.

The report was presented at a recent forum held at MassHousing and co-sponsored by CEDAC and the Citizens Housing and Planning Association.

SourceNixon Peabody

Where Should Poor People Live?

When Peter Gagliardi first heard about an owner looking to sell an old farmhouse in this college town, he thought it seemed like an ideal place for an affordable housing complex. The property was across the street from a bus stop, near a bike path, and had access to two different sewer lines. What’s more, the city of Amherst, concerned with rising housing prices, had made a commitment to developing more affordable housing for residents in the town and region.
So Gagliardi’s nonprofit, HAPHousing, hired an architecture firm that would convert the farmhouse into 26 affordable units, a development that would blend into the bucolic landscape of ramshackle barns and rolling hills.
But when the plan for the development, called Butternut Farms, ended up in front of the community, opposition was vociferous.
“People basically said, ‘We’re in favor of affordable housing, but it shouldn’t be in a residential neighborhood,’” Gagliardi told me.
In a zoning meeting about the development, some people said their children had been bullied when they lived in rental developments and didn’t want that to happen again. Others said there would be too much traffic if the development was built. Still others worried that they would no longer be able to go into their backyards in their underwear. A young boy complained that the residents of the affordable-housing complex would run over the turtles that sometimes appeared in the neighborhood. Another resident complained that he used the property—which was private—to pick blueberries or race ATVs, and the development would put an end to all of that.
“Some of the things that were said were on the hateful side,” Gagliardi said. “It happens often, it’s the Not In My Backyard Syndrome.”
For more than a century, municipalities across the country have crafted zoning ordinances that seek to limit multi-family (read: affordable) housing within city limits. Such policies, known as exclusionary zoning, have led to increased racial and social segregation, which a growing body of work indicates limits educational and employment opportunities for low-income households.
But Massachusetts has a work-around: A state statute, called 40B, allows developers to get around exclusionary zoning and build affordable housing in communities where only a small percentage of units are considered affordable. (A few other states have similar policies.) The statute, passed in 1969 and upheld by the state’s Supreme Judicial Court in 1973, has led to the construction of 1,300 developments throughout the state, containing a total of 34,000 units of affordable housing, according to Citizens’ Housing and Planning Association, or CHAPA.
Projects built under 40B are almost always controversial: The statute was enacted in the first place because most communities outside of big cities didn’t permit multi-family housing, said Ann Verrilli, the director of research at CHAPA. Even with the statute, communities often spend millions of dollars in legal fees to try and stop the projects, Verrilli told me.
“There’s real resistance to change, resistance to development of any kind that may have school-aged kids,” she said.
Butternut Farms, in Amherst, took 10 years to build. (Alana Semuels)
The experience of developers trying to build affordable housing in Massachusetts takes on added significance now, as housing advocates wait for a decision on a landmark case in front of the Supreme Court that concerns where low-income housing projects are placed. The case, Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, arose when a nonprofit housing group sued Texas, arguing that the state primarily distributed tax credits for low-income housing projects in minority-dominated areas. Inclusive Communities argued that doing so perpetuated segregation and violated the Fair Housing Act, which was passed in 1968 to prevent landlords, municipalities, banks and other housing providers from discriminating on the basis of race. The Supreme Court case centers on whether this discrimination has to be intentional in order to be illegal, or whether the Fair Housing Act also seeks to prevent policies that may not be intentionally discriminatory, but that have a “disparate impact” on minorities.
Housing advocates say the parts of the Fair Housing Act being challenged in this case are important tools in ensuring the country does not become even more deeply segregated. As things are now, few states have policies in place that try and integrate communities or develop affordable housing in so-called “high opportunity” areas. And the process of bringing discrimination claims to court under the Fair Housing Act is a difficult and expensive one. The Supreme Court may yet make it even more difficult to build housing for poorer families in anywhere besides the poorest places.
“This decision will have a very profound impact on millions of Americans going forward at a time when we need every tool we can use in the arsenal of civil rights actions to make sure we live up to the aspiration of providing equal opportunity and ending discrimination in this country,” said Dennis Parker, the director of the Racial Justice Program at the ACLU, which filed an amicus brief on behalf of Inclusive Communities.
To be sure, there are reasons—besides pure racism—why a wealthy community might resist the placement of affordable housing within city limits. Many municipalities already have trouble funding schools. With more houses and families but not much more of a tax base, their budget problems could get even worse. The small Massachusetts town where I grew up, and where my brother is a public-school teacher, has been enmeshed in debate over a 40B proposal at the same time voters were asked to increase taxes so the town could continue funding schools at adequate levels.
But people who oppose 40B projects and other affordable housing developments often don’t have any complaints after the projects are built, according to research. A study out of Tufts University, “On The Ground: 40B Controversies Before and After” looked at some of the most controversial 40B projects in Massachusetts that were completed before June 2006. It found that the concerns of residents expressed before construction were usually not realized, and that controversy evaporated after construction wrapped up.
“This study provides significant evidence that the fears of new affordable housing development are far more myth than reality,” the study concluded.
Similarly, Princeton professor Douglas Massey studied an affordable housing development in Mount Laurel, New Jersey, that local residents had complained would lower home values, increase crime rates, and cause local taxes to rise.
He found that the development did none of those things. Many surrounding neighbors didn’t even know there was a housing project nearby.
“The market is going to work to de facto disadvantage lower-income residents.”
What’s more, the lives of residents in the housing development improved markedly after they moved to the affluent suburb. An increasing amount of data seems to show that location matters just as much as income in determining a child’s likelihood of escaping poverty. As I’ve written about before, children from low-income families who move to more affluent suburbs are more likely to graduate from high school, attend four-year colleges, and have jobs than their peers who stayed in the city. And cities that have made an effort to keep schools desegregated have enjoyed less race-based strife than peer cities.
Still, affluent cities and towns often resist low-income housing projects: Despite 40B in Massachusetts, many areas of the state are falling back into the same segregation patterns that the Fair Housing Act sought to remedy nearly 50 years ago. Recent research showed, for example, that the Boston metro area has more racially concentrated areas of affluence (census tracts where 90 percent is white and wealthy) than any of America’s 20 biggest cities.
There are few states or municipalities that have laws targeted at exclusionary zoning. Three states—Massachusetts, Rhode Island, New Jersey—have “exemplary interventions” to address exclusionary zoning, according to a paper by Rachel G. Bratt and Abigail Vladeck of Tufts University. Montgomery County Maryland also has a similar intervention. Other states, such as Oregon and Texas, prohibit mandatory inclusionary zoning requirements. In places that don’t strive to promote integration, segregation is likely to be prevalent.
“The market is going to work to de facto disadvantage lower-income residents,” Bratt told me. “The theory is that in order to deal with segregated patterns, you need to have proactive policies to deal with it.”
Many affordable housing units in the suburbs are a direct result of court cases, and even enforcement of those programs are lax. In 2009, Westchester County in New York signed a desegregation agreement and agreed to build and market hundreds of apartments for moderate-income minorities after a court found it had misled HUD by applying for funds that it said it would use to integrate housing, and then did the opposite. Four years later, the county had not complied with the provisions.
New Jersey is one of the few states that bars wealthy towns from excluding affordable housing, largely because of court decisions relating to the Mount Laurel case, but even those have been under attack. Governor Chris Christie attempted to disassemble the state agency overseeing affordable housing and wanted to allow municipalities to decide how much affordable housing to allow. A state appeals court blocked these attempts, but the instance points to the fact that affordable housing programs are being challenged in the few states that have them.
In Massachusetts, a group put an initiative on the ballot in 2010 that sought to repeal 40B. The coalition for repealing the law said that the statute “has destroyed communities in rural, suburban and urban neighborhoods alike, while lining the pockets of out-of-state speculators.”
“Some people just do not want low-income housing in their communities.”
The repeal effort failed, 58 percent to 42 percent, and Marc Draisen, the executive director of the Metropolitan Area Planning Council, a state planning group, says he thinks the law now has widespread support. But that doesn’t mean it has gotten any easier to build affordable housing.
Most developers don’t want to do mixed-income developments, and prefer to build market-rate buildings where they won’t have to face any community resistance or years of legal wrangling. That’s even in a state that’s seen by many as a leader in encouraging the construction of affordable housing in communities that don’t really want it.
“40B is a legal tool but it doesn’t eliminate prejudice,” Draisen told me. “Some people just do not want low-income housing in their communities.”
This prejudice won’t likely change soon, no matter what the Supreme Court decides in Texas v. Inclusive Communities. Housing advocates see some hope in an impending HUD rule, which may make it harder for communities to show this prejudice. HUD wants to stipulate that all areas receiving federal funds for low-income housing show that they are proactively promoting integration, housing experts say.
Still, the government currently lacks the resources to ensure that every community promotes integrated housing. It may be up to developers like Peter Gagliardi to continue to keep fighting to do so. And he can hold up Butternut Farms as an example of how it can work.
The development is located off a two-lane road near Hampshire College, a campus with rolling green hills, barns, and unobtrusive brick buildings. The 26 units blend right in: They are distributed in a few red barn-like structures and one yellow multi-family house, surrounded by trees and set back from the road, located up a sloping driveway.
Butternut Farms, from the road (Alana Semuels)
Gagliardi first set foot on this property in 2000. The homes opened to tenants in 2011. The intervening decade was threaded with court cases, appeals, and $150,000 worth of legal costs for HAP, despite pro bono legal assistance.
The project, which involved the construction of three detached buildings of eight units of housing each and renovating the farmhouse to include two new units, violated parts of Amherst’s zoning bylaws regarding parking and housing density in residential areas. But that’s the point of 40B—it allows developers to get around those laws if the housing they are building is affordable.
The local zoning board approved HAP’s application to build a 26-unit rental development in 2002, but neighbors immediately filed suit to annul the approval. When a Land Court judge upheld the permit, neighbors appealed. When the case went to the state Supreme Judicial Court, justices decided on behalf of HAP, in 2007.
“Our conclusion does not ‘needlessly infringe’ on the ‘settled property rights of abutters,’” the justices wrote. “Rather, our conclusion takes into account that the Legislature ‘has clearly delineated that point where local interests must yield to the general public need for housing.’”
A few weeks before the first tenants moved into the apartments in 2011, a rare tornado blew through nearby Springfield, destroying dozens of affordable housing units there.
“I pointed out the irony it took us 10 years to get 26 units built here, but at the same time, many times that number of units of affordable housing were destroyed in a brief time of a tornado,” Gagliardi said.
It’s a happy ending, but the problems that face Peter Gagliardi now face the nation. The country will have to grapple with how to house low-income residents in areas of opportunity, or bear more racial strife. After all, if Gagliardi had so much trouble in a liberal town in Massachusetts, a state with some of the strongest affordable-housing laws in the country, is there any reason to believe developers will be able to build affordable housing in affluent areas in the rest of the country, especially without the benefit of the Fair Housing Act?

SourceThe Atlantic

Affordable Senior Housing To Open In Roxbury

Officials tomorrow will celebrate the opening of Cooper House in Roxbury.
“We must continue to support affordable housing in our neighborhoods, with great projects like Cooper House in Roxbury,” Boston Mayor Martin Walsh said in a statement. “By investing in affordable housing for seniors, we are helping our residents to remain in and revitalize Boston’s neighborhoods.”
Walsh and Jamie Seagle, president of Rogerson Communities, will attend the ribbon-cutting ceremony for Cooper House, located at Walnut and Columbus Avenues. The building adds 37 new units of affordable elder housing to market and completes the renovation of what was a blighted three-acre parcel into an attractive block of housing that now includes four buildings, with a total of 161 low- income housing units.
The total cost of developing Cooper House was more than $10 million. Private contributions include grants from the Charles H. Farnsworth Charitable Trust, Bank of America N.A., Trustee, The Hyams Foundation and The Boston Foundation. On-going rental subsidy is provided by U.S. Department of Housing and Urban Development (HUD). Other funding for Cooper House included $5.7 million from HUD, $1.5 million in HOME funds from the city of Boston’s Department of Neighborhood Development, $400,000 from a HUD planning grant and $155,000from a CEDAC pre-development loan.
Cooper House is one of three original structures located on the historic site of the Home for Aged Couples overlooking Franklin Park in Egleston Square. Rogerson Communities took on the redevelopment plan for the buildings in 1999. A fourth building, Spencer House, is new construction developed by Rogerson Communities. Spencer House opened in 2007 with 46 units of affordable housing and a state of the art Adult Day Health Center.

SourceBanker & Tradesman

MassDevelopment Supports South Boston Affordable Veterans’ Housing Project

MassDevelopment has issued a $6.2 million tax-exempt bond on behalf of South Boston Veterans Housing LLC, a joint venture between Caritas Communities and the South Boston Neighborhood Development Corp. (South Boston NDC).
The organizations will use proceeds from the bond, purchased by Radius Bank, to build Patriot Homes, 24 new rental apartment units in South Boston for low-income veterans.
“The South Boston community has a long history of military service,” Donna Brown, executive director of the South Boston NDC, said in a statement. “South Boston NDC is thrilled to be starting construction on this important affordable housing for veterans, and we are grateful for the support of the city of Boston and many funders, including MassDevelopment, who have made this project possible.”
Patriot Homes is a two-phase project. During the first phase, South Boston Veterans Housing LLC will acquire the former D Street police station in South Boston and convert the building into 12 studio apartments. Renovations to the station will include office space for the South Boston Neighborhood Development Corp., a community group that seeks to preserve and create affordable housing. The second phase of the project includes construction of a building that will contain 12 apartment units – two one-bedroom units and 10 two-bedroom units. All 24 units of the Patriot Homes will be reserved for households earning no more than 50 percent of area median income.
MassDevelopment assisted the Department of Housing and Community Development with the approval of federal low-income housing tax credits, which provided approximately $3.9 million in equity for the project. MassDevelopment also provided $414,000 from the Brownfields Redevelopment Fund to assess and clean up contamination at the site.
“Patriot Homes will provide essential affordable housing opportunities for South Boston’s veteran community,” MassDevelopment President and CEO Marty Jones said in a statement. “MassDevelopment is proud to support Caritas Communities and the South Boston Neighborhood Development Corp. in their joint effort to supply our veterans with the homes they need and deserve.”

SourceBanker & Tradesman

Second Jackson Square Redevelopment Opens

Developers have finished work on Jackson Commons in Roxbury, making it the second building to be completed under the Jackson Square Redevelopment Master Plan.
Cambridge-based Prellwitz Chilinski Assoc. (PCA) worked closely with Urban Edge to design the renovation of Jackson Square’s 100 year-old Webb Manufacturing building, adding 37 mixed-income rental apartments as well as Urban Edge’s headquarters, a community learning center and retail space, all fully leased on opening day.
The Jackson Square Redevelopment Master Plan includes 360 units of housing and 80,000 square feet of retail, office space and community recreation facilities. Eight units are dedicated for homeless households, which will benefit from an on-site resource coordinator that will provide case management services to all building residents. Twenty-one units are dedicated for households below 60 percent of area median income (AMI), three below 80 percent AMI, and 5 below 110 percent AMI.
The Jackson Commons project is expected to receive a LEED Gold rating.

SourceBanker & Tradesman

Walsh Announces $39M For Affordable Housing In Boston

Boston Mayor Martin Walsh yesterday announced nearly $39 million to support affordable housing developments in Boston.
The funding will create or preserve 1,194 housing units and is made possible through $27 million in federal and local resources through the Department of Neighborhood Development (DND) and $11.7 million in linkage funds through Boston’s Neighborhood Housing Trust.
The development budgets for all proposals will total over $614 million of public and private investment in Boston, with the city’s investment representing 6 percent of the total capital needed. Many of the proposals are seeking additional support from the state.
Plans for the funds include: leveraging more than $575 million in public and private investment in neighborhoods, creating an estimated 1,200 construction jobs and setting aside 196 units for homeless or extremely low-income families.
Housing projects to receive founding include the following:
• 28 Affordable Units at Waverly Abby in Allston-Brighton for single parents and transitional living opportunities for at-risk youth and families.
• 80 total units – including 26 affordable units – at Ropewalk, Frontier Enterprise Inc. in Charlestown. Plans include redeveloping two historic buildings located in the Charlestown Navy Yard. Four thousand square feet of museum space will also be created.
• 39 units – including 33 affordable units – at Harmon Apartments in Dorchester. All units will be handicapped accessible with specialized technology and services that will allow those with neurological disabilities to continue to live independently.
“It is imperative that we continue to support affordable housing in our neighborhoods, and this funding will help many of our families in need of safe housing stay in their homes,” Walsh said in a statement. “By investing in housing, we are supporting economic development and creating jobs that will revitalize Boston’s neighborhoods for future generations.”

SourceBanker & Tradesman

Affordable Housing Advocates Excited, Wary As They Prepare For New Funding Source

Affordable housing advocates are gearing up to take advantage of a new source of funding, which they hope will be a long-term resource to help them build more housing for people with disabilities and extremely low incomes. But much work needs to be done by the agencies to prepare solid projects to be ready to go when funds become available, policy wonks warned today at a forum hosted by the Citizens Housing and Planning Association.
The federal Low Income Housing Trust Fund was created as part of the 2008 economic reforms; under the law, a small portion of the fees generated by the sale of Fannie Mae and Freddie Mac mortgages is to be put into the trust and distributed to each of the 50 states as a block grant. The creation of the trust fund was temporarily put on hold while Fannie and Freddie were getting back on their feet, but Mel Watt, director of the Federal Housing Finance Agency, authorized the launch of the program last year and the first grants are anticipated to be handed out next summer.
“My major message is, go buy a house with a conventional mortgage this year so you can up the funds available [from Fannie and Freddie] for the trust fund. You’ll be doing a service,” joked Shelia Crowley, president and CEO of the National Low Income Housing Coalition, a longtime advocate for the trust fund.
The vast majority of the funds are to be used to help create and operate rental housing for poor households and those with disabilities. Creating new housing for extremely low income households (those whose incomes are 20 percent or less of local median incomes) is an important priority for the agencies but had often proved a difficult goal to meet, since the gap between average rents in most area and what such households can afford is substantial. The Low Income Housing Trust Fund could be a crucial resource in meeting the goal, Crowley advised, since it is meant to be a permanent source of funds that won’t face the threat of cuts every year in the federal budget process, unlike most HUD programs.
“The process of getting federal funding for low-income housing is fundamentally broken because the appropriations process is broken. The best we’re going to do is prevent further loss,” said Crowley. “If we’re going to make any strides, we’re going to have to think outside the box.”
Crowley warned that having solid projects ready to go in the first year of the program will be crucial to ensuring its long-term success, since many in Congress are already skeptical of it. But, she said, the trust fund grants, especially in the beginning, will likely not be sufficient to fund large-scale projects on their own.
“We need to be thinking about how you all who know how to do housing development can come up with new and creative models to do this … the trust fund [should be] the flexible funds to bring those deals together,” she said.
Based on the coalition’s calculations, Massachusetts would be likely to receive about $13 million per year from the trust fund once the program is fully in gear. However, grants for the first year will almost certainly be less than half that. Final figures will not be available until early next year, since the amount of funding available will depend on the amount of fees generated by Fannie and Freddie in 2015.
States have wide latitude to use different programs to meet that goal. James Yates, senior associate at the Technical Assistance Collaborative, a nonprofit that analyzes housing policy, pointed to pilot programs in Pennsylvania, North Carolina, Maryland and Illinois as potential models for how to fund rental housing for extremely low income households and permanent supportive housing for people with disabilities. North Carolina, for example, established its own long-term capital fund to meet this goal, which was initially capitalized with about ten year’s worth of funding. This created a cushion to enable projects to go forward even if the state reduced that year’s funding, Yates said. Illinois and Maryland have worked in partnership with a private philanthropy, the Weinberg Foundation, to help create long-term capital funds of about $100,000 to $125,000 per unit, enabling the housing agencies to fund the subsidies necessary for the housing for 30 years.
But existing state programs can only provide limited guidance on how to use the trust fund money, Yates warned, since creating more such housing has proven so difficult relatively few attempts have been made. “The [extremely low income] challenge is pretty daunting for states. Vouchers can’t really meet that need,” Yates said. “Using trust dollars, using a variety of sources, to meet that need is something we encourage.”
In Massachusetts, the funds will be administered by the Department of Housing and Community Development (DHCD). Put on the spot by a question from the audience, Associate Director for the DHCD Kate Racer said that the agency had not yet come up with a formal plan for how it wants to allocate any trust funds it receives since the project has been held up so long with red tape.
“We’ve been talking about it a long time but have been waiting for it to get a lot more real,” she said, explaining that DHCD Director Crystal Kournegay will almost certainly invite various affordable housing groups to meet with the agency to offer their ideas for the funds, and the department also plans to consult with other states to see how they’re using the money. Many of DHCD’s existing programs would also be eligible to be supplemented with the funds, also. But Kournegay has made clear that she’s very much in favor of using some of the trust fund money for supportive housing.

SourceBanker & Tradesman

MassHousing, Dept. Of Housing And Community Development Award $13M To Affordable Housing Projects

MassHousing and the state Department of Housing and Community Development (DHCD) have closed on $13 million in Affordable Housing Trust Fund (AHTF) loans for affordable housing in six communities.
The AHTF financing will help create or preserve the affordability 670 rental apartments at 10 properties in Boston, Williamstown, Roxbury, Lowell, Springfield, Haverhill and Falmouth. The recipients include the following projects:
• $1.9 million for the 145 unit-RTH-Riverview development in Boston’s Longwood Medical Area. Roxbury Tenants of Harvard is building 60 units of affordable, rental housing for families and 85 homeownership condominiums, 43 of which will be affordable. The building will also include a 9,000-square-foot day care center on the first floor. DHCD is also providing $5 million from its housing finance programs.
• $1 million for the 40-unit Highland Woods in Williamstown. Berkshire Fund Inc. is building the units for seniors on land leased from Williams College. DHCD is providing $1.6 million from its housing finance programs.
• $1.7 million for the 102-unit Harrison Tower in Roxbury. Trinity Financial Inc. is refinancing and substantially rehabilitating the 40-year-old, 12-story building which is under long-term lease from the Boston Public Health Commission. DHCD is providing $1.7 million from its housing finance programs.
“The new wave of financing provided by the AHTF delivers a multi-faceted, multi-generational development approach that will facilitate revitalization in a wide range of communities for years to come,” Chrystal Kornegay, undersecretary for Housing and Community Development, said in a statement.
AHTF funds are available for rental, homeownership and mixed-use projects as well as housing for the disabled and homeless, but may be applied only to the affordable units. They are used primarily to support private housing projects that provide for the acquisition, construction or preservation of affordable housing. MassHousing and the Department of Housing and Community Development jointly administer the AHTF.

SourceBanker & Tradesman

Webster apartment developer ready to hand over senior center

The developer converting a former school into apartments for people 55 and older and a senior center will hand over the senior center to the town Wednesday for $1 per year for 40 years, a town official said.
Completed by Neighborhood of Affordable Housing of East Boston, the senior center is situated in the former gymnasium of the Sitkowski School at 29 Negus St. The former school is being converted into 66 units of affordable housing for adults age 55 and older.
The overall project is 99 percent complete, and Sitkowski School Apartments, which has 59 one-bedroom units and seven two-bedroom units with 12 different layouts, had 13 approved applications for move-ins as of late last week, town director of community development Carol Cyr said.
Building Inspector Theodore Tetreault III said the 85,000-square-foot building is about three weeks away from being issued a certificate of occupancy.
The contractor, Dellbrook Construction of Quincy, continues to work on walkways at the rear and side of the building, said Mr. Tetreault, who has issued a temporary occupancy permit.
After years of planning, the town selected Neighborhood of Affordable Housing to carry out the adaptive reuse project. Neighborhood of Affordable Housing made an $18.2 million investment, Ms. Cyr said.
The senior center, which has a 5,740-square-foot garden level and a 3,590-square-foot mezzanine, cost $1.2 million, she said.
Deborah Keefe, a former selectman credited by many for her continual behind-the-scenes work on the project, said the lease agreement for the senior center is for 40 years instead of 99 years because of banking restrictions.
Ms. Cyr said the financial and legal structures of the project were “an education beyond belief.”
Easements had to be given to Neighborhood of Affordable Housing, with the building connected to Town Hall.
The building served as both a high school and middle school and has been vacant since 2005. Ms. Keefe said she went to high school in the downtown building.
Dellbrook’s work over 13 months consisted of a substantial renovation to preserve original woodwork and repair and restore original wood floors. Each floor of the apartment building has a large communal lounge and laundry.
The project proponents will also seek a Leadership in Energy & Environmental Design silver certification.
In addition to the floors, the apartment building and its common areas will have original school closets, stairs, railings and subway tiles. Original portions of the bleachers were stripped, stained and restored for decorative features in both the center and apartment building.
Assessor Marc Becker said Neighborhood of Affordable Housing paid the town $150,000 for the building on Jan. 14.
It’s too early, he said, to estimate what the town would receive in residential property taxes from the project, given the various funding sources.
No one under 55 can live in the building, even if a spouse is, say 53, or if the registered occupant is taking care of his or her children or grandchildren.
Ms. Cyr said, “This isn’t really a good area for family housing. They have no place to go out and play. So this isn’t what we wanted here.”
Ms. Keefe credited the Redevelopment Authority for offering its services many years ago to see what could be done with the building.
Officials had considered using the school for municipal offices, but the costs for building it out for that purpose were too prohibitive, Ms. Keefe said.
At the time, selectmen gave the directive that the building should not be used for low-income housing, because the town has enough of it, and the board had a vision to enhance the downtown, she said.
Ms. Cyr said her office began putting together a request for proposals in March 2008, and after a year of organizing, opened bids in January 2009.
According to Ms. Keefe, the town received five “very good” proposals, but the review committee chose Neighborhood of Affordable Housing’s because the developer did the homework, visited the town and interviewed people.
“We wanted to see something done for the town in this building,” she said. “They bought onto that 100 percent.”
Ms. Cyr said, “We didn’t go for the best price on the building. We went for the best use for the town in the future.”
Ms. Cyr said Neighborhood of Affordable Housing had a leg up on other bidders because it was not looking for tax relief, while other bidders wanted tax increment financing or some sort of a buy-back.
Ms. Keefe said the town probably won’t hold an open house for the center until summer, because it still needs to outfit the center.
She said she hopes voters at the annual town meeting will designate about $120,000 from available money for furniture for the center.
“We don’t want to open the doors with no tables, chairs, lamps, office furniture,” she said.
The senior center has space designated for a health office, with the hope of contracting for the services of a podiatrist for seniors’ foot-care needs, as well as a small salon offering limited services to tap into the new market of residents.
Long term, the senior center, which has showers, is also set up to be an evacuation center.
“We need to talk about generators but that won’t happen right away,” Ms. Keefe said.
Meanwhile, Neighborhood of Affordable Housing’s goal is to finish the outside grounds by May 1, if weather allows.
All exterior features will be maintained or enhanced with the addition of new parking areas, landscape and streetscape improvements, according to the project description.
The project funding sources are: MassHousing ($1.75 million for permanent loan, $8.1 million for bridge loan, $2,006,047 for deferred payment loan and $1 million for affordable housing trust fund), Massachusetts Housing Investment Corp. ($6,078,013 for Federal LIHTC equity and $3,290,950 for federal historic tax credit equity), MAPFRE/Commerce ($1,691,000 for state historic tax credit equity), Selective Insurance ($2.7 million for State LIHTC equity), RBS Citizens ($10.1 million for construction loan), state Office of Housing and the Department of Housing and Community Development ($715,000 for HOME and $1 million for HSF) and Neighborhood of Affordable Housing ($355,173 for deferred fee).
WinnResidential, an arm of WinnCompanies, is managing the apartment building.

SourceWorcester Telegram & Gazette