The Importance of Preserving our History and Developing Affordable Housing

March 23rd, 2016 by Rosa Nin

Tuesday March 1st was an exciting day in Chelsea. The Neighborhood Developers (TND) hosted a ribbon cutting for their latest project, Lewis Latimer Place. The energy efficient project will house young at-risk parents and also provide support services through TND’s partnership with ROCA. The four sun-filled new homes were awaiting only the ceremony’s conclusion to receive the new families.  But they weren’t the only families benefiting from this project.

While walking through each new home, I envisioned all the hours invested into the development.  Many people took on this project not only to provide young at-risk families with quality housing, but also to recognize the contributions made to society by Lewis Latimer.  Historical sleuths Leo and Ron Robinson were on hand to recount their efforts to revive Mr. Latimer’s story, which starts with his parents, who were runaway slaves, settling in Chelsea.  The Neighborhood Developers installed a plaque commemorating his birth on the very grounds of these new homes, and will help to further legitimize the Robinson’s campaign to establish Lewis Latimer’s legacy as a scientist, poet, engineer, inventor and resident of Chelsea .

At the end of the day, when it was my turn  to pick up my kids  and go home they spotted the small flashlight I received from the event with “Lewis Latimer Place” emblazoned on it (Mr. Latimer helped invent some of the technology that is now used in lightbulbs).  They asked me what it was and why I had it.  Attending the ribbon cutting provided me a chance to talk to my children about slavery, determination and the importance of recognizing heroes from our past that may have been overlooked.  In simple terms, I spoke to them about freedom, and about Latimer’s work drawing up the first phone to which my seven-year-old daughter suggested “he should keep the phone and download games on it”.

Congratulations to The Neighborhood Developers for building housing for our community’s more vulnerable and thank you for helping preserve our nation’s history.

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Community Investment Tax Credit: Big Impact for Valley CDC

March 23rd, 2016 by Alexis Breiteneicher

As a small CDC operating for almost 30 years in the Western part of the Commonwealth Valley CDC has often struggled with maintaining our community development capacity even while the Board and staff have worked hard over the years to diversify our funding streams.

In 2014, the Commonwealth rolled out the Community Investment Tax Credit (CITC) Program awarding $3 million in credits to 38 participating organizations from across the Commonwealth.   Valley CDC was able to raise approximately 87% of its goal that first year.  In 2015, the Commonwealth doubled our award and we raised 150% more in 2015 than 2014.  While this is not all new money (it includes existing donors who increased their giving level), it has made a significant impact on the work that Valley CDC undertakes.

Valley CDC was successful in utilizing all of its 2015 credits as well as the remaining 2014 credits raising a total of $213,672.  At the end of December, Valley CDC also had to direct investors to make donations to United Way of Massachusetts Bay and Merrimack Valley and designate Valley as the recipient because we had no remaining local credits.

Increasing capacity is vital to ensuring that underserved populations in our service area have access to all levels of homeownership assistance, small business assistance as many people seek self-employment, and affordable housing both for families and individuals, including homes for individuals/families experiencing homelessness.

The success and impact of our 2015 CITC campaign has increased our cash on hand which helps to eliminate stress on the day-to-day operation of the agency. Additionally, Valley CDC is now in the position to recruit a real estate project manager this spring, which will allow Valley CDC to increase its housing development capacity.

Valley has a great track record in the development of affordable housing, and had lost its long-term housing project manager as a result of the financial crisis of the last few years as many agencies struggled financially.  It has been almost four years that the executive director has been primarily responsible for housing development activities.  We successfully completed our 38-unit family development – Parsons Village in Easthampton – in August and all families were in their new homes by mid-October.  Valley is now poised to get funded for its redevelopment of the Northampton Lumber Yard into 55 units of family housing in downtown Northampton.  The addition of a real estate project manager is critical to Valley’s continued success as a nonprofit housing developer.

The success of Valley CDC’s CITC campaign has also allowed us to utilize a highly skilled consultant to bring us through a robust strategic alliance and strategic planning process that includes a commitment both to expanded community engagement activities and a real focus on diversity and inclusion.  Our upcoming Board/staff/committee retreat will focus exclusively on diversity and inclusion.

The legislature and the Commonwealth are already seeing the results that the community development field projected would come of this generous tax credit as MACDC aggregates data from the CITC participants.  It is truly making an impact on the lives of low- and moderate-income people and other underserved populations in Hampshire County.

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Creating Mixed Income Housing

March 15th, 2016 by Joe Kriesberg & Don Bianchi

Building an affordable housing strategy that is responsive to community needs and market driven

As we begin a new year, MACDC plans to be working on a wide cross section of housing issues. Our goal is to create an affordable housing system that is better able to meet the diverse needs of our residents and communities. This will require both more money and more flexibility. In a series of articles to be published in early 2016, MACDC is articulating some its thoughts about how we do this. The first article talked about how we can grow the resource pie – the first and most essential step to meeting growing demand for affordable housing. In the second article, we talked about how to lower operating costs so that we can use our limited subsidies more efficiently. In the third article, we talked about how to deploy our resources in a more balanced way that enables us to better respond to local market contexts and to community driven priorities.  Our fourth and final article discusses how we can create affordable housing that can serve a broader range of income levels.

Article #4: Creating Mixed Income Housing

A growing number of stakeholders in the housing field – community developers, fair housing advocates, local residents, elected officials and urban planners – support mixed-income housing.  Governor Baker and Mayor Walsh make this argument virtually every time they talk about our housing challenges.  They and many others agree that mixed-income housing is the best way to expand housing opportunities for low- and moderate-income households without concentrating poverty.  Mixed-income housing is especially critical in expensive places, like Greater Boston, where even those with moderate incomes struggle to find housing that they can afford.  In weaker markets, like some of our Gateway Cities, mixed income housing can help revitalize a neighborhood and create more racial and economic integration.  At the same time, some advocates, including some of our members, struggle to reconcile providing subsidies to moderate income people when so many lower income families are still struggling, especially when the term “moderate income” is sometimes defined to be as high as $125,000 per year or more for certain households.  

Notwithstanding these on-going debates, we believe that the affordable housing industry needs to produce mixed income housing – not just in one building, but comprehensively.  The state recently approved funding for over 1,100 affordable housing units and the vast majority of them are priced for people whose incomes range from 50-60% of Area Median Income (AMI) – a fairly narrow income band that excludes many families below and above that range who still need help.  The Low Income Housing Tax Credit (LIHTC) program, which finances almost all new affordable rental housing, does nothing to help moderate income households making between approximately $55,000 and $80,000 – a growing contingent of families who can’t afford our rising housing costs. And while some families earning less than 50% of AMI can afford to rent LIHTC units by paying more than 30% of their income for rent, LIHTC housing cannot help families facing or at risk of homelessness without the use of an additional subsidy source – namely rental assistance from either the state’s MRVP Program or the federal Housing Choice Voucher programs.  In fact, research (PDF) shows that a very large percentage of LIHTC units are now occupied by voucher holders – an inefficient use of subsidy made inevitable due to structural problems in both the LIHTC program (narrow income targeting) and Section 8 (rent limits that are too low for many units in the private market).  

In the short term, to achieve the goal of providing affordable housing across a broader range of incomes than the tax credit program currently allows, we will need to continue using rental subsidies for lower income households.  At the same time, the state needs to identify new resources that can be used in combination with tax credits to subsidize “moderate income” units for households earning between 61% AMI to 100% AMI, or up to about $95,000 for a 4-person household in Greater Boston.  These new “moderate income” subsidies,  should not be taken from resources currently aimed at lower income households and  should be smaller than what we are providing to lower income units (the higher rents should make that possible).  However, the bottom line is that without some financial support for this moderate tier, mixed-income housing will remain very difficult to produce, except in the strongest rental markets.  And in those strong markets, there would be a significant gap between the tax credit rents and the market rents, leaving middle income households unserved yet again.

In the long term, we need to reform the LIHTC program to allow developers/owners to offer a range of rents.  A number of organizations, including HUD and the National Low Income Housing Coalition (NLIHC), have recommended a specific way to achieve this goal:  allow LIHTC projects to serve a range of incomes, so long as the “average” is 60% AMI.  This would allow, for example, a 30 unit project to have 10 units priced at 40%, 60% and 80% of AMI respectively.  The developer receives the same total rent revenue, but a broader range of families could afford to live there.  While enacting such a change will be hard given the dysfunction in Congress, we need to keep pushing, so that we can strike when the opportunity arises.  In the meantime, we might consider experimenting with this model with the Commonwealth’s low income housing credit.

Creating mixed income housing will require new dollars and new creativity. We are confident that the housing sector can bring the creativity – we will need the public sector to bring new and more flexible dollars.

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