Category: CEDAC

Massachusetts Housing Investment Corp. Provides $11.5M Financing for Allston Affordable Housing

Massachusetts Housing Investment Corp. (MHIC) and the Allston-Brighton Community Development Corp. (ABCDC) have finalized $11.5 million in financing for 235 units of affordable housing in Boston’s Allston neighborhood.

MHIC is providing an $11.5 million low-income housing tax credit investment to renovate the Commonwealth and Glenville Apartments; the investment is split between a multi-investor fund ($8.8 million) and Rockland Trust Bank ($2.6 million). Financing for the project also includes $25.7 million in construction and permanent loans from Boston Private, financed through tax exempt bonds issued by MassDevelopment.

The Commonwealth and Glenville Apartments are on 17 scattered properties, all on the same city block bounded by Commonwealth and Glenville avenues. Rehabilitation of the buildings will primarily include major masonry repairs, maintenance and structural repairs on all buildings; energy efficiency and safety upgrades; accessibility and common area enhancements; and new doors, kitchen and bathroom fixture replacement, and similar work as needed in individual units. Exterior improvements will include paving alleys and walkways. Work will begin in August and be completed in September 2016. The total development cost is $56 million.

The Commonwealth and Glenville Apartments buildings are more than 100 years old, and have been owned by two separate but related companies whose members include ABCDC and a corporation of elected tenant representatives, the Commonwealth Tenants Council. The properties originally were acquired and developed in 1998 using HUD financing that was prepaid by the owners in 2011 and 2013. As part of this refinancing, the current owners are selling the two projects to a single new LLC, which will undertake a rehabilitation program and ensure the rental apartments’ long-term affordability.

“In a community that has become very transitory, with even a studio apartment going for almost $2,000 in this neighborhood, keeping these units affordable for low- and moderate-income families is of paramount importance,” Carol Ridge-Martinez, executive director of ABCD, said in a statement. “Now that we have this financing in place, we can finally begin the renovations and we will be able to sustain affordability of these apartments for many more decades.”

SourceBanker & Tradesman

Cambridge Apartment Building To Undergo $45M Reno

The 154-unit Briston Arms Apartments in Cambridge will undergo improvements thanks to $45.1 million in MassHousing financing.

Preservation of Affordable Housing (POAH) of Boston has acquired Briston Arms and plans to extend the rental subsidies on 73 of the apartments. An additional 46 apartments will receive new rental assistance subsidies and 35 of the apartments will continue to be rented at market rates.

“Cambridge is one of the hottest real estate markets in the country right now,” MassHousing Executive Director Thomas R. Gleason said in a statement. “Thankfully POAH, which has an excellent track record of preserving quality affordable rental housing, has purchased the property and will keep it affordable for the residents.”

Among the improvements planned for Briston Arms are new windows, storm doors, roofing and siding as well as masonry repairs. The property will also be brought into compliance with current accessibility requirements.

The contractor will be NEI General Contracting and the architect is Davis Square Architects. The property manager will be POAH Communities. Work is expected to begin on the property in August.

SourceBanker & Tradesman

Foundation of recovery for veterans with new housing

Six years ago Will Hatley was homeless, struggling with substance abuse and suffering from post-traumatic stress disorder from his years in the Navy and a childhood marred by a tornado that killed his mother and baby sister.

Hatley overcame those obstacles with the help of the Edith Nourse Rogers Memorial Veterans Hospital, where he now works as a veteran peer specialist.

“When I came to the VA Bedford, I had a lot of baggage,” Hatley said. “I had bad credit, I didn’t have a job, I was suicidal. That’s why as a vocational rehab counselor I strive to take away these obstacles, these barriers, these hurdles, these roadblocks.”

For many veterans, one of those roadblocks is a lack of supportive, affordable housing.

On Monday, Hatley helped celebrate the groundbreaking at the Bedford VA hospital of a new housing complex featuring 70 affordable units for veterans.
The new residences will give priority to veterans age 55 and older, making it the first of its kind in the country.

It is expected to open in spring 2016, on a 4-acre parcel on the campus of the Bedford VA hospital.

Hospital Director Christine Croteau said the new facility would help fill a need in the community.

“This today is a great example of how partners in the community, private and federal and state partners, can come together to truly make sure our veterans want for nothing,” Croteau said.

Affordable veterans housing in Massachusetts has become more of a priority in recent years.

According to Roger Herzog, of the Community Economic Development Assistance Corporation, since 2012 Massachusetts has opened more than 1,500 units of permanent supportive housing serving some of the state’s most vulnerable populations, suffering from medical and mental disabilities and addictions. Of those 1,500 units, more than 425 were targeted toward veterans.

Earlier this month, the Varnum School in Lowell’s Centralville neighborhood was transformed from classroom space into 21 affordable units for veterans.
When Bedford Green opens, senior veterans will have the benefit of not just housing, but the full support of facilities at the hospital, just steps away.
But affordable housing isn’t the only area where the Bedford VA is seen as a leader.

U.S. Rep. Seth Moulton, himself a veteran of the U.S. Marines who served four tours in Iraq, said that Bedford was paving the way on issues like treating pain without an over-reliance on addictive opiates, prescribing just one-third the national average of opiate-based medications.

Housing and health care are examples of how the country should be taking care of the newest generation of veterans, the Salem Democrat said. Investing in the best care for veterans, he said, is “more than just a moral obligation, it’s a smart investment in America’s future.”

By supporting veterans, the VA would be helping to encourage future leaders, like those who were previously hailed as members of the Greatest Generation.

“It had as much to do with what the Greatest Generation did here at home, as what they did overseas,” Moulton said. “I believe the same can be said about the next generation of veterans, the generation coming out of Iraq and Afghanistan and for generations yet to come. But we’ve got to take care of them when they come back.”

Michael Mayo-Smith, network director for the VA New England Healthcare System, said that just as the VA had been a leader on universal health care, it could also pave the way for making sure all people are given access to affordable housing.

“We don’t think anybody who served their country should go without permanent housing, just like they don’t go without health care,” Mayo-Smith said.

SourceLowell Sun

Bedford VA to offer new housing opportunity for homeless vets

A cornerstone ceremony will be held at the Edith Nourse Rogers Memorial Veterans Hospital June 29 for Bedford Green, a housing development for homeless veterans that will be the first in the country offering independent living options for homeless vets age 55 and older.

The ceremony will be near the Patriot Golf Course located at Edith N. Rogers Memorial Veterans Hospital, 200 Springs Road in Bedford. It begins at 1 p.m. Monday, June 29.

“When they (Vietnam War veterans) returned home in the ’60s and ’70s, they were not greeted with the same level of support that exists today,” said Ken Link, chief of social work service for the Bedford VA. “It made them reticent to reach out for help due to earlier experiences that were not very positive.”

Link added it was this dynamic led to some vets of this era becoming chronically homeless.

One of the goals of the 70-unit building, which will be on four acres near the golf course on the Bedford VA’s campus, is to bring this group “back into the fold so they can see that there is a true effort on the part of state and local governments to support these vets in getting the resources and services necessary to integrate into the community and be successful in pursuing their goals whatever they may be,” said Link.

Bedford Green social workers will assist the senior vets in accessing the medical, psychological and vocational services available at the Bedford VA to address factors that may have contributed to their situation. Veterans who qualify to occupy the furnished, mostly one-bedroom apartments available by the spring of 2016 will pay rent based on a sliding scale up to one-third of the market value of the unit. No one will be turned away due to lack of funds.

Veterans can stay as long as they like provided they meet the requirements set by the U.S. Department of Housing and Urban Development and VA Supportive Housing Program, which issues the housing subsidies.

Finding safe and secure homes for vets to live in close proximity creates an environment with unique benefits, said Laurel Holland, the grants and per diem liaison at the Bedford VA.

“Vets derive a huge amount of healing by being around their cohort; that’s their family,” said Holland. “When they have community living and still have independence, it’s the best of all worlds.”

To provide that sense of community, governmental agencies and private donors such as The Home Depot Foundation, which granted the project $500,000, joined forces to pay for the $21 million development. The partnerships are a direct of the 2011 Building Utilization Review and Repurposing (BURR) Initiative to end homelessness for vets of all ages.

The 2014 estimate for homeless vets nationwide was just under 50,000. During that same time period in Massachusetts, the number of homeless veterans was estimated at nearly 1,300.

The BURR initiative allows for “third-party providers to finance, design, develop, maintain, operate housing on unused land or buildings on VA property,” according to the Department of Veterans Affairs. The VA retains ownership of the land, while community partners develop and operate the housing options.

In response to the initiative, the Bedford VA partnered with Peabody Properties, Windover Construction, the Affordable Housing Services Collaborative, Horsley Witten Group, The Architectural Team and New Ecology to develop and manage Bedford Green.

“Our goal is to allow people to age in place with grace,” said Betsy Collins, a senior project manager for Peabody Properties.

SourceBedford Minuteman - Wicked Local

Uxbridge affordable housing finances lined up

The proposed Virginia Blanchard Memorial Housing affordable and veterans’ housing development is on track with key tax credits and loans lined up, Harry Romasco of Uxbridge Housing Associates and president of Virginia Blanchard Memorial Housing told selectmen Monday.

The roughly $10 million project planned by the nonprofit housing organization would convert the historic 1873 Virginia A. Blanchard School, shuttered for several years, to a total of 25 units of one- , two- and three-bedroom apartments.
Mr. Romasco said, “Where we are is exactly where we need to be” to bring the money to the table from state, federal and private investors.

The nonprofit developers will negotiate the sale of the tax credits and any additional loans with investors.

The project received a commitment of more than $900,000 in federal historic tax credits from the National Park Service, which Mr. Romasco said was “the green light for getting it done.”

The Massachusetts Historical Commission awarded $600,000 in state historic tax credits and developers are anticipating an award of an additional $300,000 in July.

The Community Economic Development Assistance Corporation, a public-private partnership, approved an increase in the project’s loan funding to $150,000, from its previously approved $101,300, to be used to complete predevelopment work.

The biggest piece remaining is the nearly $8 million in low-income tax credits through the state Department of Housing and Community Development’s one-stop application. Mr. Romasco said he expected to hear from DHCD in July, but “We’ve been getting some indication that it looks good.”

Uxbridge Housing Associates, which separated the Blanchard project into a separate organization known as Virginia Blanchard Memorial Housing, had been invited to apply for the one-stop program last year but did not receive funding. Mr. Romasco and Jon Juhl, managing partner, said few projects succeed on the first or even second round.

If the state financing is approved in July, bid documents would go out in the fall and construction could start as early as the first quarter of 2016. The project would be completed in 2017 and be ready for occupancy during the first quarter of 2018.

Selectman Peter Baghdasarian, who initially proposed the idea of using the former Blanchard School for senior housing, criticized the $400,000 average cost of each unit.

SourceWorceter Telegram & Gazette

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