Boston, Massachusetts: Innovatively Preserving Affordable Housing

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Boston, Massachusetts: Innovatively Preserving Affordable Housing

Every year, thousands of affordable homes in many high-opportunity neighborhoods are lost through demolition, deterioration, and lapsing affordability controls. The Joint Center for Housing Studies at Harvard University estimates that 10,000 public housing units are lost annually, and the National Low-Income Housing Coalition estimates that the supply of low-cost homes shrunk by 650,000 units between 2001 and 2011. In Boston’s Allston-Brighton neighborhood, an innovative approach to preservation has transformed the 213-unit, structurally deficient Charlesview Apartments into Charlesview Residences and Town Homes at Brighton Mills, a mixed-use, mixed-income development on a nearby site that increases the overall number of affordable units. The project was made possible through a land exchange with Harvard University and the pioneering transfer of project-based vouchers from the old development to the new one. Charlesview Residences and Town Homes at Brighton Mills is being co-developed by Charlesview, Inc., the owner of the original building, and The Community Builders (TCB), a nonprofit affordable housing developer. Charlesview Residences and Town Homes at Brighton Mills received the 2015 Jack Kemp Excellence in Affordable and Workforce Housing Award in recognition of the development’s creative use of preservation tools and the integration of a culturally and economically diverse population of residents into a single community.

Through Struggle Comes Affordable Housing

Preserving affordable homes has long been a struggle in the Allston-Brighton neighborhood. In 1961, the Boston Redevelopment Authority announced an urban renewal plan to demolish 52 structures in the neighborhood and build a 372-unit luxury apartment complex in their place. Designating the working-class neighborhood as blighted, the authority proposed a new development that would yield 10 times the tax revenue for the city. Although 40 structures were torn down, resident opposition led Boston to reconsider the luxury development. In 1969, the city awarded a contract for a new affordable housing development to the Committee for Harvard North (which later became Charlesview, Inc.), a coalition of five local religious congregations who opposed urban renewal projects. The 213-unit development, named Charlesview Apartments, provided safe and affordable housing and community space for local neighborhood programs for more than 40 years.

Housing for a Range of Incomes

In 2006, Charlesview, Inc. partnered with TCB to replace the aging Charlesview Apartments with a development targeted at low-, very low-, extremely low-, and middle-income Bostonians. The first of 3 phases, Charlesview Residences was completed in 2013 and includes 240 rental units, 200 of which receive project-based vouchers. Charlesview Residences is a mixed-income building, with 211 units reserved for households earning less than 60 percent of the area median income (AMI) and 10 units for households at or below 80 percent of AMI. The remaining 19 units are market-rate apartments. Charlesview Residences received Leadership in Energy and Environmental Design Silver certification.

The second phase, Town Homes at Brighton Mills, was completed in spring 2015 and developed solely by TCB. The development consists of 20 two- and three-bedroom townhomes equipped with ENERGY STAR^®-rated appliances; 10 units are priced for buyers making at or below 80 percent of AMI and 10 are for buyers earning up to 100 percent of AMI. The third phase is planned to add 80 condominiums, bringing the total number of homeownership units to 100. Of the 80 units in the third phase, 74 will be sold at market rate, 3 will be reserved for buyers earning incomes at or below 100 percent of AMI, and 3 will be for buyers earning incomes at or below 120 percent of AMI.

Land Swap and Subsidy Transfer

Charlesview, Inc. and TCB were able to increase the number of affordable and workforce units by capitalizing on two of the original development’s valuable assets — its land and its subsidy contract — says James Madden, program manager at TCB. The Charlesview Apartments site sits between Harvard Stadium and Harvard Business School, making the property very valuable to university officials. Charlesview, Inc. exchanged this land for cash and a vacant retail property a half-mile away. Because this project did not receive a significant capital subsidy, explains Madden, Harvard’s funds helped finance not only the replacement of all 213 units but also the inclusion of more affordable and workforce units.

In addition, TCB and Charlesview, Inc. were able to transfer 200 project-based vouchers from Charlesview Apartments to the new development, a process known as “porting.” By guaranteeing that the development would receive a steady stream of income, the vouchers allowed TCB and Charlesview, Inc. to secure construction and permanent financing from MassHousing, the state’s affordable housing finance agency. However, as Madden explains, the transfer was not without difficulty. Numerous challenges arose because this porting contract was the first that the HUD New England regional office had ever completed. For example, HUD rules required Charlesview Residences to be completed before the transfer could be guaranteed, which made financing the project riskier for MassHousing and added development risks for Charlesview, Inc. and TCB. Based on the experiences of all the stakeholders in this project, HUD developed new guidelines for porting transactions, potentially making affordable housing preservation easier in other communities.

Financing

The total development cost for the complex was $143 million (table 1). Harvard contributed $72 million in cash and land to Charlesview, Inc.; the organization used the cash as a loan for the new development and to support programming at the community center. MassHousing made its then-largest loan ever, $106.2 million in construction and permanent financing, and Google invested $27.6 million through low-income housing tax credits (LIHTCs). The project also received Massachusetts brownfield tax credits. The recent recession made arranging the financing for the development challenging, says Madden, because the value of LIHTCs dropped significantly.

Table 1: Financing for Charlesview Residences and Town Homes at Brighton Mills

Building and Strengthening a Community

The new development is located in a pedestrian-friendly neighborhood with transit connections. The neighborhood has a Walk Score^® of 83, meaning that most errands can be completed on foot. The development is located on or near several bus routes, and in 2016, a commuter rail station will open less than a half-mile away. Harvard University, the Massachusetts Institute of Technology, and Boston University are about two miles from the development, which is also located near a bilingual elementary school. Charlesview, Inc. and TCB designed the development to connect to the wider community, says Madden. The local street grid was reinserted into the former shopping center site to encourage walking within the community. In addition to parks and courtyards, the development includes 15,000 square feet of street-level commercial space along Western Avenue, a neighborhood retail corridor. The space houses a Spanish immersion preschool and an Afghan restaurant, among other businesses. At the development’s 10,000-square-foot community center, Charlesview, Inc. provides numerous neighborhood-focused programs, such as classes in English as a second language, tutoring, computer training, and parenting classes.

With the Charlesview Residences and Town Homes at Brighton Mills, TCB and Charlesview, Inc. were able to preserve affordable housing, increase the number of affordable units, provide market-rate and middle-income units, and use innovative financing tools to add valuable community amenities. Except for one household, all Charlesview Apartments residents found a home in the new development, and hundreds of other Bostonians found an affordable place to live within an amenity-rich neighborhood. By providing housing to a range of households, Charlesview Residences and Town Homes at Brighton Mills, along with the planned third phase, ensure that new and long-term residents will contribute to the diversity of the Allston-Brighton neighborhood.