Solving the Massachusetts affordable housing crisis will not be possible unless we preserve existing housing as well as produce new homes. Given the housing production constraints Massachusetts faces, losing even one unit of our current affordable housing stock strains an already-overburdened system. Massachusetts is on the verge of losing thousands of units of affordable housing across the Commonwealth if the state does not move quickly to fix a problem decades in the making.
In the 1970s, the Commonwealth established the 13A program, an affordable rental development program modeled after a federal initiative. The MassHousing 13A mortgage program provided an interest rate write-down to 1 percent for developers of affordable rental housing. A subsidy from the state made up the difference between the 1 percent interest rate and the market interest rate at the time that the loan was originated. Through this mechanism, thousands of affordable housing units were created across Massachusetts.
But because of the way the program was financed, thousands of units are now at risk of conversion to market-rate rent: 4,200 in total, with 3,200 at higher risk. The mortgages developers used to produce this housing are reaching the end of their 40-year terms and, if the property owners decide to convert these apartments into market-rate homes, the families and individuals living in them could face much higher rents. It is worth noting that, over time, many of these units became home to elderly individuals.
The good news is that Massachusetts has a strong track record of preserving affordable housing in innovative, effective ways. In 2009, the Commonwealth passed Chapter 40T, a landmark law designed to help preserve a broad range of affordable units built with state or federal funding in the 1960s, 1970s, and 1980s. The law gave the state new tools to monitor and manage the Commonwealth’s affordable housing portfolio. These tools include expanded public notice requirements, a “right of first refusal” granted to the Massachusetts Department of Housing and Community Development (DHCD) if an affordable housing development is put on the market for sale, and new tenant protections when an owner terminates affordability. Additionally, the Commonwealth established the $150 million Massachusetts Preservation Loan Fund, managed by the Community Economic Development Assistance Corporation (CEDAC) and the Massachusetts Housing Investment Corporation (MHIC), for predevelopment and acquisition financing for preservation projects. This loan fund has helped to preserve almost 5,000 units across Massachusetts.
Chapter 40T has played a crucial role in maintaining affordable housing units. In June 2015, CEDAC, along with the Massachusetts Housing Finance Agency (MassHousing), issued an assessment of the effectiveness of Chapter 40T in preserving affordable housing. The report found that more than 11,000 units across Massachusetts have been preserved since the inception of 40T. Most importantly, no affordable developments have been lost to sale in the five years since Chapter 40T became law. The report showed that the law’s most innovative provision– DHCD’s right of first refusal – has worked effectively to help protect tenants while placing no undue burdens on owners. In short, the law is working to protect vulnerable families.
The Commonwealth does not have years to preserve the 13A properties – the mortgages for these buildings are already maturing. But Massachusetts can apply the same kind of creative thinking to this challenge as it has brought to other affordable housing properties at risk. One solution has already been proposed. State Representative Kevin Honan, House chairman of the Joint Committee on Housing and a champion of affordable housing for many years, has introduced a bill at the State House to allow for the use of up to $15 million in additional state low income housing tax credit to maintain the 13A properties. The tax credits will generate about $53 million in funding that can be used for acquisition and renovation of these properties. Rep. Honan’s legislation represents the single most important action that the state can make to preserve the housing units and protect the vulnerable residents.
Massachusetts has become a model state in both understanding the need for preservation and in finding innovative solutions to maintain affordable housing units. Preserving the Section 13A portfolio will be a huge challenge but failing to act will result in the loss of thousands of affordable units and impact families and elderly residents across the state. While there is a public cost to solving this problem through a preservation strategy, Massachusetts will face much larger costs from a failure to act now.
Roger Herzog is Executive Director of the Community Economic Development Assistance Corporation (CEDAC). Bill Brauner is CEDAC’s Director of Housing Preservation and Policy.
Author: Dilia Ramirez
Clive McFarlane: Affordable housing gains in Worcester hurt by neighboring towns
Earlier this week, the Worcester Regional Research Bureau published a brief indicating that only 46 of 351 Massachusetts communities have achieved a state guideline (Chapter 40B) requiring at least 10 percent of their housing to be qualified as affordable.
Indeed, while Worcester has 13.4 percent of its housing units qualifying as affordable, the Research Bureau points out that none of the surrounding towns comes close to the 10 percent threshold, with Shrewsbury, 6.2 percent, being the highest of the surrounding towns, and Boylston, 1.4 percent, the lowest.
Worcester’s compliance relative to its neighbors “forces questions about the responsibility of surrounding towns to accommodate low-income residents,” the Bureau noted, arguing that the Chapter 40B law is not working and asking questions such as whether it should be made mandatory, or amended to provide developers with incentives to build affordable housing.
The bureau’s brief is the latest acknowledgement of what some have labeled a Massachusetts affordable housing crisis, fueled by inadequate supply and high rental costs. According to the Citizen’s Housing and Planning Association, for example, Massachusetts ranks eighth in the country in income inequality and seventh as the least affordable state for renters.
Michael Kane, director of the Massachusetts Alliance of HUD Tenants, said only about one in four lower-income individuals who qualify for subsidized housing is getting it. Meanwhile, almost 30 percent of those who currently have subsidized housing are living in sub-standard accommodations, he said.
The squeeze is likely to get worse, he said, noting that according to the Community Economic Development Assistance Corporation, the low-income restrictions for many affordable units built in the 1960s through the 1980s are due to expire, creating the potential of significant losses in affordable housing units should owners decide to opt out of their subsidy contracts.
This is already happening in Worcester.
In 2010, Mountain Village, now the Fairways Apartments, converted 140 of its 200 affordable units into market-price rentals. The other 60 units are at risk of losing their low-income restrictions in 2019.
Also at risk in 2019 are 156 units at Stratton Hills and 70 at Matheson Apartments.
With the Fruit Sever Apartments complex now up for sale, another 132 affordable housing units at the complex could be in jeopardy, as the landlord has the option of selling the apartment complex to a buyer who will not preserve the affordable units.
For now, the potential sale of the Sever apartments has triggered the provision of a law giving the state the right of first refusal in buying the apartment complex, and the state has acted, finding a buyer in Community Builders, a nonprofit real estate developer that owns or manages apartments.
The developer has made an offer for Fruit Sever Apartments, which, if accepted, will preserve 132 affordable units.
Among those waiting anxiously on the outcome of the sale is Joel Dress, a resident of the apartments for nearly 20 years. His insecurity, however, began a long time ago.
Less than two months following his liver transplant surgery in November, Mr. Dress, then 57 years old, found himself facing eviction, partly, he said, based on charges that he wasn’t paying his rent on time, the first of the month.
But Mr. Dress, who had been actively involved in the apartment complex’s tenant association, fighting against rent increases and advocating for improvements in living accommodations, said he had for years been paying his rent on the second Wednesday of each month, which was the date he always received his Social Security check.
Mr. Dress was able to stave off eviction with the help of the Massachusetts HUD Tenants Association, which helps individuals in subsidized housing such as Mr. Dress resolve issues with their landlords. In this case, Mr. Dress was partnered with a local lawyer who helped him make the case that his landlord had not made adequate rent payment accommodations before moving to evict him.
His battle is not over, as he currently has a case in Worcester District Court against his landlord, but he and others like him are finding other allies in their struggle to find and keep affordable housing.
State Sen. Harriette Chandler has filed a bill that that would provide a number of tools to help municipalities create and maintain affordable housing units.
City Councilor Sarai Rivera is among those locally pushing for stronger protection of the rights of tenants living in subsidized housing, while speaking to the urgency of preserving affordable units that are at risk.
“Not only do we need more affordable housing units in the city, but we have to preserve the units that are currently available, and particularly units occupied by our elderly residents” she said.
It is too bad, however, that the gains Worcester made in providing affordable housing is being undermined by the less than adequate efforts of its neighbors to do their part.
Home Funders Launches Competition To Create Affordable Housing Solutions
Home Funders is sponsoring an Innovation Fund Competition to develop new strategies and solutions to increase the supply of affordable housing for extremely low-income (ELI) families.
The program is encouraging a wide range of stakeholders to take part in the initiative, including housing producers, municipalities, nonprofits, quasi-public agencies and others.
Home Funders plans to award prizes of $10,000 to $25,000 each to up to three organizations or teams that propose a well-crafted, innovative, feasible and sustainable solution to build, preserve or create access to housing units for ELI families. The goal of the competition is for the winning strategies to be implemented at a larger scale in regions across Massachusetts to increase long-term ELI affordable housing. According to Home Funders, the proposals should be pragmatic and replicable. Finalists will be selected from an advisory committee.
MassDevelopment announces $1 million loan to Springfield Technical Community
MassDevelopment has announced additional funding for Springfield Technical Community College Assistance Corporation and the Phoenix Public Charter Academy High School project.
MassDevelopment, the state’s economic development financing arm, provided a $1 million loan to Springfield Technical Community College Assistance Corporation. STCCAC developed, leases, and manages the Springfield Technology Park, which is across the street from Springfield Technical Community College, according to a news release.
The project includes parts of what was once Building 104 at the Springfield Armory, the building used to manufacture M1 Garand rifles during World War II.
At the park, STCCAC recently completed construction of Phoenix Public Charter Academy High School, which will serve at-risk students in grades nine through 12 who have been displaced from area public schools. The corporation converted a vacant building into a 31,000-square-foot school building. STCCAC used loan proceeds to complete the school’s renovation and prepare a nearby space for future occupancy.
In 2014, MassDevelopment provided a $3.1 million tax-exempt bond on behalf of STCCAC to begin construction of the high school.
“STCCAC’s redevelopment of the Springfield Technology Park has attracted dozens of companies and hundreds of workers to the area,” said MassDevelopment President and CEO Marty Jones. “MassDevelopment was pleased to assist STCCAC as it completed construction of the Phoenix Public Charter Academy High School, which will serve as a critical educational resource and a welcome addition to the park.”
Springfield Technical Community College and the Technology Park are at the site of the former Springfield Armory, the primary center for manufacturing U.S. military firearms from 1777 until it closed in 1968. Part of the park is now the Springfield Armory National Historic Site, featuring the world’s largest collection of historic U.S. firearms. STCCAC leases nearly 400,000 square feet of space in the park to roughly 40 companies, which employ about 800 workers. The U.S. Department of Commerce selected STCCAC as the sole national winner of the 2001 Excellence in Urban or Suburban Economic Development Award. STCCAC also received the International Economic Development Council’s 2002 Excellence in Economic Development Award.
Fighting For Affordability In The South End
Nonprofit community-building organization Inquilinos Boricuas En Accion (IBA) was formed in 1968 when urban renewal threatened the homes of longtime residents of Boston’s South End. Nearly a half-century later, housing pressures are as strong as ever, with luxury apartment and condominium development booming while waiting lists for affordable housing grow. Vanessa Calderon-Rosado joined IBA in 2003 as its chief operating officer. Now the CEO, she’s leading IBA’s bid to expand its management to nearby housing communities and refinancing its debt to improve its bargaining power acquiring additional properties.
Q: What’s the history of the 435-unit Villa Victoria property?
A: We were founded in 1968 and it was part of stopping the threat of displacement, given the urban renewal plans for this neighborhood. It had already happened in the West End, and it had started happening in what we today call the Ink Block development, which at the time was known as the New York streets. This part of the South End, designated as parcel 19 by the Boston Redevelopment Authority, was next. The primarily Puerto Rican community that lived in this parcel organized to stop the plans and as a result they created IBA to develop affordable housing for redevelopment of the parcel, along with commercial development and a number of services they recognized were needed. They also were a strong force for creation of the Blackstone (Innovation) School, the South End Community Health Center and the Blackstone Community Center. Villa Victoria was developed in phases starting in the early 1970s through the mid-1980s. Today we have 521 units of housing in our portfolio. We have developed about 1,000 units over 47 years. Some of them were turnkey developments to the Boston Housing Authority (BHA). Some of them were homeownership opportunities. Our portfolio is mostly in the South End, but we also have units in Lower Roxbury and Mattapan.
Q: How big is your waiting list right now?
A: The waiting list is really a very sad story. In fact, our waiting list right now is close to 12,000 individuals, which just underscores the need for affordable housing in the city. It tells you in a lifetime we will not be able to serve those families. It’s a staggering number. Our turnover is quite low. Our vacancy rate is very low as well. In terms of eligibility, our residents are low-income and very low-income. We have an aging-in-place component and a growing number of elders. Approximately 68 percent of our residents are Latinos and about 26 percent are Chinese.
Q: What are your plans for expanding your affordable portfolio?
A: There’s some property that abuts ours on West Newton Street and the BHA has put out a request for proposals for a total of 146 units. We presented to the BHA two weeks ago. There are two other bidders. We feel that we are the best-positioned developer for the property because of our location – across the street – where we have our program spaces with the art center and preschool program. That was one of our turnkey developments in the late 1970s. These units are a row of brownstones and it’s in a landmark historic district. The idea is to preserve them. Our plan is to rehab the units, HVAC systems, repoint the buildings and do inside renovations. And we’re looking at putting up solar panels. We contract with a security company and we take pride that our community is quite safe. We feel that extending our reach to West Newton Street will benefit the residents by creating a safer environment within the larger South End community. Also, we are a tenant-controlled organization – 51 percent of our board are residents – and those residents from West Newton will be able to run for the board if they want to be given a more direct voice.
Q: What are the income eligibility requirements?
A: Right now it’s $19,000 for a family of two and the rents are $600 to $800 a month in this neighborhood. A brownstone further up on this street would be $3 million.
Q: How is gentrification affecting South End in 2015?
A: That’s one of the biggest challenges. In this neighborhood, it’s extremely hard to acquire property that makes it feasible for development. We have been outbid by private developers who turned properties into luxury apartments and luxury condos. It is still part of our niche, however. We are refinancing part of our portfolio, which is financed through low-income tax credits. We have built great equity in those properties and we will reinvest it in renovations and to be more aggressive in terms of developing housing. If there’s an opportunity that comes along where we can bid a little higher to compete in the neighborhood, those are some things to look at. We’re also looking at our strategic business plan, whether we could densify Villa Victoria. We have already done a preliminary study for areas we feel we could we could build up on our property.
Q: How many additional units?
A: Anywhere from 40 to 70 units. We could build up, or use open spaces that are not currently used.
Q: As a member of Mayor Walsh’s transition task force, what progress do you see on the affordable housing front?
A: The Department of Neighborhood Development put together a housing task force that recommended 53,000 additional units of housing by 2030. The skeptic in me … says those are reports that go onto a shelf to collect dust. A couple of weeks ago, the mayor announced he is going to increase linkage payments and inclusionary development policy funds for development of affordable housing. So I think that is huge progress. The mayor hasn’t said what the new number will be (for the increase in payments). We don’t know what happens to those funds. They go into a black hole at the BRA. They are developing ways to track those funds and make sure they’re used for that purpose. That was a very strong recommendation that came out of the transition report, and it’s happening. I’m sure it’s not going to be enough. But we’ll see. We’ll advocate for more if it gets too low, or we’ll celebrate if it’s the right amount.
Calderon-Rosado’s Top Five Favorite Reads (In No Particular Order):
1. “Cien Años de Soledad,” by Gabriel García Márquez
2. “Lean In,” by Sheryl Sandberg
3. “From Good to Great,” by Jim Collins
4. “Don Quixote,” by Miguel de Cervantes Saavedra
5. “The Miraculous Journey of Edward Tulane,” by Kate DiCamillo
Chinatown’s Chauncy House Gets A $16M Facelift Via MassHousing
The Community Builders (TCB) of Boston have arranged for a financing package through MassHousing to renovate its historic affordable housing apartment complex in Chinatown.
The 12-story, 88-unit Chauncy House, located at 115 Chauncy St., will receive a $16.4 million financing package for renovations including window replacements, kitchen, bathroom and elevator upgrades, improved ventilation, replacement of the fire alarm system and replacement of hot water storage tanks. The building’s terra cotta façade will be power washed, patched and repaired. Additionally, five apartments will be upgraded to be fully accessible.
As a result of the MassHousing financing the Section 8 subsidy will be extended at least 15 years.
MassHousing’s financing includes a $9.2 million construction and permanent loan, and a $7.2 million bridge loan. Other financing sources for the transaction were the use of state and federal Historic Tax Credits and federal Low-Income Housing Tax Credits.
“We are excited to be able to preserve quality affordable housing in Chinatown, a dynamic neighborhood which is under significant development pressure. Now, with financing from MassHousing, the 88 families that call Chauncy House home will have an even better place to live,” TCB President and CEO Bart Mitchell said in a statement.
Chauncy House was built in 1922 as the Wendell Phillips Building and was converted from offices to housing in 1973. The building is listed in the National Register of Historic Places. It contains 22 studio and 66 one-bedroom apartments.
A charitable atmosphere at Lynn Child Care Center
Catholic Charities North expects that the $2.6 million renovation project of its Lynn Child Care Center that went on all summer, and that was completed last month, will create a more modern and child-friendly atmosphere.
“It is well-established through research that environments influence the architecture of a child’s developing brain, so having program spaces that facilitate positive experiences for children is critical,” said Early Education and Care Commissioner Tom Weber.
The refurbished Lynn Child Care Center on North Federal Street building held its grand re-opening earlier this week.
The renovations were funded and supported by the Rogers Family Fund in memory of former Catholic Charities North Director Gail Kirker Murray, Community Economic Development Assistance Corporation (CEDAC) and its affiliate, Children’s Investment Fund (CIF), and the state’s Early Education and Care and Out-of-School Time (EEOST) Capital Fund, which provided a $750,000 grant, as well as Catholic Charities.
Construction Management & Builders, Inc. completed the renovation with design support from BKA Architects, Inc. and financing from Eastern Bank.
“Our children need us now more than ever to help guide them and to foster programs and environments that enrich their lives,” said Catholic Charities Boston President Deborah Kincade Rambo.
“We are blessed with the extraordinary support of the many people and organizations that see the value in the important work of Catholic Charities and the Lynn Child Care Center,” she said.
The 12-week project started in May. Renovations to the 13,000 square-foot space were focused on increasing energy efficiency and improving the building’s comfort and functionality.
Better accessibility for those with disabilities was added to the space, including a new, limited-use and limited-application elevator. The building also now contains central air conditioning.
“The facility developments that have been completed through the Early Education and Care and Out-of-School Time Capital Fund grants are helping to modernize spaces, improve the efficiency of systems and provide better environments for the children that support their optimum growth and learning,” Weber said.
The renovated facility is currently serving 100 children from the communities of Lynn, Nahant and Saugus. 95 percent of the children in the program are receiving a form of public subsidy, the release says.
The Catholic Charities Lynn Child Care Center has been providing early education, care and out-of-school time services to children for more than 50 years.
In addition to its Child Care Center, Catholic Charities North has provided emergency food, housing, fuel and utility assistance to the poor and working poor for 90 years. It also offers a variety of programs such as education and career training, GED (General Education Development) classes, ESOL (English for Speakers of Other Languages) classes for refugees and immigrants, and parent support programs.
Catholic Charities is one of 10 organizations that received the capital grant from the EEOST Capital Grant Fund, which is meant to improve the quality of center-based child care facilities.
“We would like to extend our sincere thanks to the Massachusetts Department of Early Education and Care and CEDAC for their generous support, without which this renovation would not have been possible,” Rambo said.
“There is a growing understanding of the role that well-designed and well-equipped child care facilities play in high quality care and education,” said CEDAC Executive Director Roger Herzog.
“The Lynn Child Care Center is a great example of strengthening communities,” Herzog said. “We are happy to have supported it through the Early Education and Out of School Time Capital Fund.”
Charities celebrates reopening for renovated Lynn Child Care Center
Catholic Charites’ president joined community members and state and local officials for the Oct. 26 grand reopening of Catholic Charities Lynn Child Care Center, which recently underwent a $2.6 million renovation.
Among those on hand for the event were Thomas Weber, commissioner of the Massachusetts Department of Early Education and Care (EEC); Roger Herzog, executive director, Community Economic Development Assistance Corporation (CEDAC); Deborah Kincade Rambo, president of Catholic Charities of the Archdiocese of Boston; Judith Flanagan Kennedy, Mayor of Lynn; and State Representatives Brendan Crighton (D-Lynn) and Robert Fennel (D-Lynn).
“Our children need us now more than ever to help guide them and to foster programs and environments that enrich their lives,” said Rambo. “We are blessed with the extraordinary support of the many people and organizations that see the value in the important work of Catholic Charities and the Lynn Child Care Center. We would like to extend our sincere thanks to the Massachusetts Department of Early Education and Care and CEDAC for their generous support, without which this renovation would not have been possible.”
Catholic Charities’ Lynn Child Care Center has been providing early education and care as well as out-of-school time services for more than 50 years. The renovated site is currently serving 100 children from Lynn, Nahant, and Saugus, with 95 percent of the children in the program receiving some form of public subsidy.
The 13,000 square feet of space was renovated to provide a more modern and child-friendly atmosphere. The renovations were focused on increasing energy efficiency, improving the building’s comfort and functionality for both children and staff including the addition of central air conditioning, and providing better accessibility for persons with disabilities including the addition of an elevator.
“It is well established through research that environments influence the architecture of a child’s developing brain, so having program spaces that facilitate positive experiences for children is critical,” said Early Education and Care Commissioner Weber. “The facility developments that have been completed through the Early Education and Care and Out-of-School Time Capital Fund grants are helping to modernize spaces, improve the efficiency of systems, and provide better environments for the children that support their optimum growth and learning.”
The renovations were made possible through the support of the Rogers Family Fund in memory of former Catholic Charities North Director Gail Kirker Murray, CEDAC and its affiliate, Children’s Investment Fund (CIF), and a $750,000 grant from the state’s Early Education and Care and Out-of-School Time (EEOST) Capital Fund, as well as Catholic Charities. The renovation was completed by Construction Management and Builders, Inc. with design support from BKA Architects, Inc. and financing from Eastern Bank.
Catholic Charities is one of ten organizations that received capital grant awards totaling $7.45 million to improve or construct new program facilities from the EEOST Capital Grant Fund. The fund was created through a $1.4 billion Housing Bond Bill that passed in November 2013 with the goal of improving the quality of center-based child care facilities.
“There is a growing understanding of the role that well-designed and well-equipped child care facilities play in high quality care and education, ” said CEDAC executive director Roger Herzog. “The Lynn Child Care Center is a great example of strengthening communities. We are happy to have supported it through the Early Education and Out of School Time Capital Fund.”
Community members gather to celebrate Lynn Child Care Center renovations
Massachusetts Department of Early Education and Care Commissioner Thomas Weber and Community Economic Development Assistance Corporation Executive Director Roger Herzog joined Catholic Charities of the Archdiocese of Boston President Deborah Kincade Rambo, Lynn Mayor Judith Flanagan Kennedy, state Reps. Brendan Crighton and Robert Fennel, D-Lynn, and members of the community Oct. 26 to celebrate $2.6 million in renovations to the Lynn Child Care Center.
The renovations were made possible through the support of the Rogers Family Fund, in memory of former Catholic Charities North Director Gail Kirker Murray; CEDAC and its affiliate, Children’s Investment Fund; a $750,000 grant from the state’s Early Education and Care and Out-of-School Time Capital Fund; and Catholic Charities. The renovation was completed by Construction Management & Builders Inc., with design support from BKA Architects Inc. and financing from Eastern Bank.
Catholic Charities’ Lynn Child Care Center provided early education and care and out-of-school time services for more than 50 years. The renovated site serves 100 children from Lynn, Nahant and Saugus, with 95 percent of the children in the program receiving some form of public subsidy.
The 13,000-square-foot space was renovated to provide a modern and child-friendly atmosphere. The renovations were focused on increasing energy efficiency, improving the building’s comfort and functionality for children and staff, including the addition of central air conditioning and providing accessibility for persons with disabilities, including the addition of a Limited Use/Limited Application elevator.
Catholic Charities is one of 10 organizations that received capital grant awards totaling $7.45 million to improve or construct new program facilities from the EEOST Capital Grant Fund. The fund was created through a $1.4 billion Housing Bond Bill that passed in November 2013 with the goal of improving the quality of center-based child care facilities.
MassHousing Executive Director Re-elected President Of National Council Of State Housing Agencies
MassHousing Executive Director Thomas R. Gleason has been re-elected president of the board of directors of the National Council of State Housing Agencies (NCSHA).
Gleason brings 37 years of experience with affordable housing and has been executive director of MassHousing since 2001. He has previously worked as vice president and secretary/treasurer of the NCSHA board of directors and received an Impact Award from NCSHA in 2008 for his work on an affinity agreement with Fannie Mae.
Gleason is a member of Fannie Mae’s National Customer Advisory Board and a former member of Fannie Mae’s Affordable Housing Advisory Council. He also serves on the boards of the Massachusetts Housing Investment Corp., the Community Economic Development Assistance Corp. and as a member of the Mortgage Roundtable of the National Association of Home Builders.