On February 8th, the Community Economic Development Assistance Corporation (CEDAC) was pleased to celebrate with its preservation partners the dedication of Chapman Arms, a 50-unit building located in Cambridge’s busy Harvard Square, as the first affordable housing to be preserved through the state’s right of first refusal – an important provision of the state’s innovative Chapter 40T law… Click here to read more. https://cedac.org/NewsletterAffHsngMay2012.html
Tag: 40T
Second Expiring-Use Development Preserved As Affordable Housing In Cambridge
Friday, April 13, 2012, 11:10am
Second Expiring-Use Development Preserved As Affordable Housing In Cambridge
By Colleen M. Sullivan
The former Norstin Apartments near Central Square in Cambridge will be preserved as affordable housing through an $8 million deal between the Community Economic Development Assistance Corporation (CEDAC), the city of Cambridge, and Cambridge-based housing non-profit Just A Start Corp.
The 4-story property lies between Bishop Allen Drive and Norfolk Street in Cambridge, has 32 two- and three-bedroom units, and will be renamed the Bishop Allen Apartments in the wake of the purchase. The city was particularly anxious to preserve it since demand for affordable housing with multi-bedroom units considerably outstrips supply, sources familiar with the project told Banker and Tradesman.
“[Cambridge] is really committed to making sure their affordable housing is preserved over the long-term,” Roger Herzog, CEDAC’s executive director, told Banker and Tradesman.
CEDAC provided a loan in the amount of $4.3 million. The Cambridge Affordable Housing Trust provided approximately $4,000,000. The city of Cambridge added additional funds to cover carrying costs and predevelopment expenses.
The apartments are the second expiring-use project to be preserved in Cambridge. Earlier this year, the city and CEDAC, along with Homeowner’s Rehab Inc. were also involved in a deal to preserve the Chapman Arms in Harvard Square.
Both deals demonstrate the impact of the 40T statute passed by the state in 2009, Herzog argues. The law gives the Department of Housing and Community Development (DHCD) the right of first refusal when a project that had been affordable housing is eligible to be sold or converted to market rate. The Chapman Arms project was the first where DHCD exercised that right.
“It’s two ways that 40T is working. In Chapman [Arms], we saw it work under the provision that allows DHCD to exercise a right of first refusal. In Norsten, we see an alternative approach,” said Herzog. The owners of the Bishop Allen buildings, aware that the city of Cambridge wanted to preserve the property as affordable housing, sought out the non-profit Just A Start himself and pitched the project to them.
Since putting it in Just A Start’s hands would preserve affordability, he was able to obtain an exemption from review of the sale by DHCD, Herzog said. “Either way, the project is preserved as affordable housing,” he added. “40T is making an impact.”
URL: http://www.bankerandtradesman.com/news149559.html
Banker & Tradesman ©2012 All Rights Reserved
Second Expiring-Use Development Preserved As Affordable Housing In Cambridge
Friday, April 13, 2012, 11:10am
Second Expiring-Use Development Preserved As Affordable Housing In Cambridge
By Colleen M. Sullivan
The former Norstin Apartments near Central Square in Cambridge will be preserved as affordable housing through an $8 million deal between the Community Economic Development Assistance Corporation (CEDAC), the city of Cambridge, and Cambridge-based housing non-profit Just A Start Corp.
The 4-story property lies between Bishop Allen Drive and Norfolk Street in Cambridge, has 32 two- and three-bedroom units, and will be renamed the Bishop Allen Apartments in the wake of the purchase. The city was particularly anxious to preserve it since demand for affordable housing with multi-bedroom units considerably outstrips supply, sources familiar with the project told Banker and Tradesman.
“[Cambridge] is really committed to making sure their affordable housing is preserved over the long-term,” Roger Herzog, CEDAC’s executive director, told Banker and Tradesman.
CEDAC provided a loan in the amount of $4.3 million. The Cambridge Affordable Housing Trust provided approximately $4,000,000. The city of Cambridge added additional funds to cover carrying costs and predevelopment expenses.
The apartments are the second expiring-use project to be preserved in Cambridge. Earlier this year, the city and CEDAC, along with Homeowner’s Rehab Inc. were also involved in a deal to preserve the Chapman Arms in Harvard Square.
Both deals demonstrate the impact of the 40T statute passed by the state in 2009, Herzog argues. The law gives the Department of Housing and Community Development (DHCD) the right of first refusal when a project that had been affordable housing is eligible to be sold or converted to market rate. The Chapman Arms project was the first where DHCD exercised that right.
“It’s two ways that 40T is working. In Chapman [Arms], we saw it work under the provision that allows DHCD to exercise a right of first refusal. In Norsten, we see an alternative approach,” said Herzog. The owners of the Bishop Allen buildings, aware that the city of Cambridge wanted to preserve the property as affordable housing, sought out the non-profit Just A Start himself and pitched the project to them.
Since putting it in Just A Start’s hands would preserve affordability, he was able to obtain an exemption from review of the sale by DHCD, Herzog said. “Either way, the project is preserved as affordable housing,” he added. “40T is making an impact.”
URL: http://www.bankerandtradesman.com/news149559.html
Banker & Tradesman ©2012 All Rights Reserved
Bay State’s First 40T Project Finds Home In Cambridge
Monday, February 20, 2012
Opening The Door
Bay State’s First 40T Project Finds Home In Cambridge
Despite Being Two Years Old, Untested 40T Finds Early Success
By Colleen M. Sullivan, Banker & Tradesman Staff Writer
The state’s newest affordable housing law – Chapter 40T, passed in 2009 – recently chalked up its first victory, helping to preserve 25 affordable units in a 50-unit apartment building in the heart of Harvard Square in Cambridge.
The statute has several provisions aimed at giving tenants of affordable housing plenty of notice and resources if their landlord decides to pursue conversion of the property to market rate.
Perhaps the most important – from a development perspective – is a provision in the bill giving the Massachusetts Department of Housing and Community Development (DHCD) the right of first refusal when a building with affordable units comes up for sale. DHCD doesn’t aim to buy the properties outright; instead it has a pre-approved list of affordable housing developers with whom it works to help acquire and manage the property.
Despite the fact that the law is more than two years old, the tight, slow, declining market has largely kept multi-family owners on the sidelines and state pocketbooks firmly buttoned – leaving untested a law many owners regarded warily, fearing state involvement could only delay a sale.
“A lot of the sellers were unsure [about the law]. They love to have a free hand when they want to sell their property,” said Peter Daly, executive director of Homeowners Rehab Inc., a Cambridge affordable housing developer brought in by DHCD for the Harvard Square project, located at 122 Mt. Auburn St. “I think sellers were anxious about the 40T legislation – would it work, and would it work with the timetable that they need.”
But this first 40T deal proves the statute can be used in a way that meet seller’s expectations, Daly said.
“It was a deal that was fair to all sides, and we had the resources held in reserve to help the buyer perform,” he told Banker & Tradesman.
‘A Foot In The Door’
It certainly didn’t hurt that the project was in Cambridge, a community with a long-time commitment to affordable housing preservation – 80 percent of the city’s federal Community Protection Act grant funds are dedicated to that goal, according to the city.
“The unified purpose of the Cambridge City Council was always to protect and preserve affordable housing in the city of Cambridge,” said Cambridge City Manager Robert Healy.
The deal required an $8.1 million acquisition loan from Community Economic Development Assistance Corp. (CEDAC), a quasi-public finance agency which aims to help community groups fund economic development projects. CEDAC created a dedicated $150 million loan pool and a list of expiring-use projects to help make non-profits and community development corporations aware of potential 40T sites in their area.
“The law is very strict in terms of the timeframes that DHCD and its designee are allowed to complete a complex purchase transaction,” said Roger Herzog, executive director of CEDAC. “CEDAC has the ability to move very quickly to meet those constraints.”
According to Herzog, the Harvard Square project was first put on the market in April 2011, at which time DHCD notified the sellers in of their interest. HRI was designated in May, and by December they had acquired the property.
This first implementation of the program has attracted watchful eyes from around the country, with representatives from national affordable housing network Neighborworks, a partner of HRI, attending a recent ceremony held to mark the successful deal.
Affordable housing advocates said they hope it will prove a model for future acquisitions. The bill “gave us a foot in the door…and that’s what we needed to move forward. Without 40T, I’m not sure this project would have been preserved,” said Daly.
http://www.bankerandtradesman.com/news148706.html
Preserving affordable housing: Cambridge, Harvard, and HRI partner on affordable units in Harvard Sq
Wednesday, January 4, 2012
Preserving affordable housing
Cambridge, Harvard, and HRI partner on affordable units in Harvard Square
By Lauren Marshall, Harvard Staff Writer
Twenty-five affordable apartments in Harvard Square’s Craigie Arms Apartments will remain affordable for at least 50 additional years after the city of Cambridge, Harvard University, and the nonprofit Homeowners Rehab Inc. (HRI) put together a creative plan to preserve the affordability of these units through HRI’s purchase of the 50-unit Craigie Arms building.
Affordability restrictions on the 25 affordable units were scheduled to expire in 2016. With the property for sale, these units were an attractive investment to buyers interested in reaping the financial benefits of converting these units to market-rate housing after the existing restrictions expired.
Working together, the city, Harvard, and HRI were able to orchestrate HRI’s purchase of the building to ensure affordability of the 25 units for a minimum of 50 years. Specifically, Harvard amended and extended its ground lease on the property in a manner that allowed HRI to secure the necessary financing from the Cambridge Affordable Housing Trust and the Community Economic Development Assistance Corporation (CEDAC). HRI purchased the building in a preservation transaction that was finalized on Dec. 19.
“We are celebrating today because a creative partnership has allowed us to preserve an important housing resource in Harvard Square which will benefit current and future tenants of these units. This is a huge win in today’s Harvard Square housing market, where maintaining affordability is very difficult,” said Cambridge City Manager Robert W. Healy, who is also the managing trustee of the Cambridge Affordable Housing Trust and has worked to strengthen affordable housing during his 30-year tenure with the city.
“Preserving Craigie Arms was a priority for the city and could not have happened without the commitment of Harvard and is just the latest example of Harvard partnering with the city to achieve shared community goals,” added Assistant City Manager for Community Development Brian Murphy.
Craigie Arms was owned by a multipartner entity that was led by Bob Kuehn, an affordable-housing developer. Following Kuehn’s death, ownership of the property was left to 30 different investors who recently offered the property for sale. HRI was designated by the Massachusetts Department of Housing and Community Development under the recently enacted expiring use preservation statute, known as Chapter 40T, which gives public agencies and affordable housing providers the time necessary to put together plans to preserve affordable housing before it can be sold to market buyers. With this time, the city, Harvard, and HRI put together the plan to preserve these units, and, after a competitive bidding process, the owners elected to sell property to HRI.
“All of this would not be possible without the city of Cambridge’s partnership and Harvard’s involvement,” said Peter Daly of HRI. “By working together we have preserved the homes of 25 individuals and families of low and moderate incomes at Craigie Arms.”
The city and Harvard have a long history of supporting affordable housing and a record of success in preserving and maintaining housing of all types for people of all incomes. An example of this success includes Harvard’s 20/20/2000 program, a $20 million, 20-year low-interest revolving loan program that has helped build and renovate 465 units in Cambridge. Harvard also created affordable units for working families during the development of housing for students in Riverside, and has sold more than 100 housing units at reduced prices to the city of Cambridge for use as affordable housing. In all, Harvard has helped to create and preserve over 600 units of affordable housing in Cambridge in recent years.
“Creating and maintaining affordable housing units can support the economic well-being and diversity of the communities around us. The support of affordable housing in Cambridge has been a long-term public policy goal for the city of Cambridge, and we’re pleased to be a partner with the city on this and other efforts to achieve that goal,” said Christine Heenan, vice president of Harvard Public Affairs and Communications.
© 2012 The President and Fellows of Harvard College
URL: http://news.harvard.edu/gazette/story/2012/01/preserving-affordable-housing/