Department of Housing and Community Development (DHCD) Undersecretary Aaron Gornstein today joined representatives of Homeowners Rehab Inc. (HRI), Cambridge City Manager Richard Rossi, state and local officials to celebrate the completion of the Chapman Arms development in Cambridge. Chapman Arms was the first project completed under Chapter 40T, an effort by the Patrick Administration and Legislature to preserve affordable housing across the Commonwealth.
“Chapman Arms is an important step toward preserving our supply of affordable housing for citizens in the Commonwealth through innovative regulatory changes, like 40T,” said Undersecretary Gornstein. “DHCD was pleased to assist with this development that not only maintains affordable housing opportunities in the vibrant Harvard Square neighborhood, but stimulates local economic activity as well. We congratulate Homeowners Rehab, Inc., CEDAC, the City of Cambridge and the local, state and federal officials who have helped make this project a reality.”
Chapman Arms is a 50-unit building located in the heart of Harvard Square. It consists of 25 family housing units for low-income households that were at risk of expiring affordability, 25 market rate units and nearly 10,000 square feet of commercial space. Chapman Arms was the first project to take advantage of the crucial right of first offer mechanism. DHCD designated HRI as the developer of this property to preserve its affordability for the long term. HRI worked with Harvard University, the City of Cambridge and the existing residents to acquire the building in December 2011. DHCD supported the project with over $2.2 million in DHCD housing subsidies and federal Low Income Housing Tax Credits to preserve 25 units of affordable family housing for low-income households.
“We were truly pleased to be involved with the first 40T project and even more so to have it result in such a big success,” said HRI Executive Director Peter Daly. “With Chapman Arms and the many preservation projects that have followed, it has been clearly demonstrated that preservation works in our state. Thanks to the resources we received from the state, the City of Cambridge and others, the residents of Chapman have benefited from much needed capital improvements to their homes.”
The Community Economic Development Assistance Corporation (CEDAC), a quasi-public agency affiliated with DHCD, celebrated with HRI and the City of Cambridge the inaugural use of the Massachusetts Preservation Loan Fund and Chapter 40T to acquire the building. The Massachusetts Preservation Loan Fund (MPLF) was created with funding from MacArthur Foundation and DHCD to provide early stage financing to non-profit housing developers to help preserve affordability on thousands of units across the Commonwealth. To date, CEDAC has committed almost $20 million in MPLF predevelopment and acquisition loans to 36 projects to preserve more than 3,600 units of affordable housing throughout the state.
“Chapman Arms is a prime example demonstrating the importance of Chapter 40T, Massachusetts’ innovative expiring use law,” said CEDAC Executive Director Roger Herzog. “Homeowner’s Rehab (HRI) purchased this 50 unit project in Harvard Square in December 2011 with an $8 million acquisition loan from CEDAC, the first such preservation purchase through Chapter 40T’s right-of-offer provision. With tremendous leadership and assistance from DHCD and the City of Cambridge, HRI has now completed the renovations that will ensure that Chapman Arms remains quality affordable housing for many years to come.”
Much of the Commonwealth’s stock of affordable housing units built in the 1960s, 1970s and 1980s is facing the elimination of affordability restrictions when owners prepay their federally-subsidized mortgages, or opt out of their existing Section 8 rental subsidy contracts. In November 2009, Governor Deval Patrick signed “An Act Preserving Publicly Assisted Affordable Housing,” also known as 40T. This landmark legislation is helping preserve existing privately-owned affordable housing in Massachusetts. The legislation establishes notification provisions for tenants, a right of offer and right of first refusal for DHCD or its designee to purchase publicly assisted housing and modest tenant protections for projects with affordability restrictions that terminate. Chapter 40T has helped to preserve affordability in communities across the state, ensuring that families are able to stay in their homes and neighborhoods.
Because of Chapter 40T, since 2009, no project has lost affordability as a result of sale. Further, with the use of state resources, DHCD has helped to preserve more than 14,000 affordable units that were close to losing that status. DHCD has also processed 40T notices for 240 affordable housing projects with over 25,000 units of housing.
Overall, more than 130 affordable housing projects with 18,000 housing units have been preserved with state resources since 2007. An additional 12,000 housing units have been preserved through long-term Section 8 contract renewals through the U.S. Department of Housing and Urban Development (HUD) without state resources since 2007.
In addition to Chapman Arms, CEDAC worked with Just-A-Start Corporation to preserve the Bishop Allen Apartments in Cambridge and Preservation of Affordable Housing (POAH) in Boston to maintain affordability in six buildings across the Commonwealth. With these three initiatives alone, almost 1,000 affordable units were saved in some of the most expensive markets of the state.
“I am pleased to see that affordable housing will be preserved in Cambridge,” said Senator Sal DiDomenico. “It is important that low and middle-income families have opportunities to remain in the communities where they are from, and not to be displaced due to the rising cost of housing. The completion of the Chapman Arms development is a great step forward in ensuring widespread preservation of affordable housing throughout the Commonwealth.”
The Patrick Administration is dedicated to preserving and creating affordable housing throughout Massachusetts. Since 2007, the Administration has invested over $1 billion in state and federal resources to create 24,000 units of housing, of which approximately 22,000 are affordable. In Cambridge, since 2007, DHCD has invested more than $35 million to preserve or create 724 units of housing, 668 of which are affordable. Under the leadership of DHCD, the Administration created the Preservation Advisory Committee, which includes representatives of developers and owners, tenants, public agencies and other stakeholders, as well as the Preservation Interagency Working Group that includes state housing agencies and HUD regional staff.
“This is a great example of a successful public private partnership where residents helped lead the charge,” said Representative Marjorie Decker. “I am honored to have had the chance to help facilitate this important outcome providing security and affordability to Cambridge residents.”
One of DHCD’s quasi-public partners, CEDAC maintains a complete database of the privately-owned stock of publicly assisted affordable housing on in collaboration with DHCD and Massachusetts public lenders. This database now tracks over 1,500 projects with 134,000 housing units. CEDAC was created in 1978 to serve as a vital resource for organizations engaged in community economic development. CEDAC is a public-private, community development finance institution that provides technical assistance, pre-development lending and consulting services to non-profit organizations involved in housing development, workforce development, neighborhood economic development and capital improvements to child care facilities. CEDAC works with its state partners to focus resources in support of the non-profit development system for production of affordable housing. CEDAC is also active in national housing preservation policy research and development and is widely recognized as a leader in the non-profit community development industry.