Communities scramble to keep affordable housing
10 percent of units set to convert to market rate
By Douglas Moser email@example.com
Jun 5, 2016
Nearly 10 percent of Greater Lawrence’s affordable housing agreements are set to expire by 2019, according to a report by the agency that tracks affordable housing around the state.
About 525 affordable units, out of roughly 5,500 in Andover, Haverhill, Lawrence, Methuen and North Andover, have agreements with either the state or federal government that expire, some of which potentially could become more expensive market rate housing, according to the annual assessment released by CEDAC, a quasi-public agency that tracks and works to preserve affordable housing.
All of those units are in Andover, Haverhill and Lawrence.
Local community development directors said the area is not in imminent danger of losing all of those affordable units because some are owned and operated by so-called mission-oriented organizations, typically nonprofits whose goal is to provide affordable housing for seniors or low-income people.
But for the others that could become market rate, communities have a few tools to use in working with property owners to keep all or some of the units affordable.
“By and large, the owners of the affordable housing in Lawrence are pretty much dedicated to serving their current population,” said James Barnes, director of community development in Lawrence. “That’s the No. 1 safeguard we have to make sure these properties continue to provide good quality housing at affordable prices.”
One example in the city is Rita Hall apartments, a senior apartment building on Hampshire Street. Its agreement with the federal Department of Housing and Urban Development for accepting federal rental vouchers is due to expire this year, but Barnes is confident the building’s owners will continue their relationship with the HUD program.
“If we got wind of the possibility of a current owner wanting to change the status of its occupancy, either quickly or gradually, we would hear about it through one of our partner agencies or tenant organizations,” he said. “We would quickly get involved with those organizations that could provide capital refinancing and work as closely as we could with those agencies.”
The Arlington Park building has an agreement with HUD to accept federal rental vouchers for its 130 units that expires in 2019, and another 55 units at Riverside Commons could become market rate as well, according to CEDAC’s report.
In Haverhill, Andrew Herlihy, director of the community development division, said the city can use a pool of federal funds, called the HOME Investment Partnership Program, for certain renovations or upgrades.
“We can offer them federal HOME funds and we can repoint the brick, or fix the plumbing, the leaky roof, whatever,” he said. “And we do that in exchange for extending the affordable usage. We can usually address the quality of life in these buildings at the same time and extend the affordability of the building.”
According to HUD, the HOME funds are a block grant specifically to fund a building, buying or rehabilitating affordable housing for rent or sale, or for providing direct rental assistance to low-income people.
The money is distributed through local consortia. Essex County’s consortium includes every community in the county except Lawrence and Lynn. According to HUD data, the Essex County consortium received nearly $1.3 million this year. Salem, Massachusetts, received the most, at $233,508, followed by Haverhill at $224,527. Andover, Methuen and North Andover received about $150,000 combined.
In Haverhill, 215 units could convert to market rate in 2019, the largest number in the area. The city lost 131 affordable units last year when One Water Street converted to market rate. In all, 164 units there became market rate, but were offset by 33 new affordable units.
Herlihy said the city made a strategic decision to let those units become market rate because that neighborhood is changing substantially. But those units will be mostly offset with the Tenney Place development on West Lowell Avenue, which will be composed of about 120 affordable units.
Andover could see 123 units across several developments become market rate, and the town faces a special challenge because market rate units can fetch much more than in Lawrence or Haverhill.
“We try to work with property owners to save those units. But a lot of times, the owners are saying look, we have a chance to convert, in this instance we’re talking about 125 affordable units, to market rate,” said Paul Matarazzo, the Andover planning director. “They don’t even want to have that conversation with the community. It’s pretty much a numbers thing in their mind.”
CEDAC, which stands for Community Economic Development Assistance Corp., monitors affordable housing units statewide and maintains a database of affordability expiration dates. When units approach those dates, CEDAC works to connect cities and towns and nonprofits with funding sources that can be used to keep those units designated as affordable.
Bill Brauner, director of housing preservation and policy at CEDAC, said 2015 was a good year for preserving affordable units for a number of reasons, including availability of funding, a special tax exemption program and low interest rates.
“We have a very big issue in the next few years of a particularly large group of projects that can convert to market in 2017, 2018 and 2019,” he said.
CEDAC also works with other affordable housing entities, like MassHousing, which administers a state trust fund dedicated to building or preserving affordable housing.
Developers build affordable units using a number of incentives, from a state law called Chapter 40B that gives developers a break in local zoning restrictions to HUD subsidies to a range of other state and federal programs that include tax breaks.
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