Stimulus Funds Kick Start Affordable Housing Projects
Last month, Gov. Deval Patrick directed $50.3 million of federal recovery funds to resuscitate a handful of lifeless affordable housing projects across the state. The injection of money may have breathed new life into the projects, but the funding is not a panacea for what ails the projects, according to developers.
Take the affordable housing development planned for the Tri-Town Drive-In site in Lunenburg. The project, which first began to take shape more than four years ago, is only a few months away from finally breaking ground after receiving $6.5 million in recovery funds, but the speediness of the construction and the project’s ability to stay true to its timeline are now at the mercy of a New England winter.
“The timing of it is just what it is,” said William Caselden, owner of Great Bridge Properties in Manchester, N.H., which manages the project. “We would’ve loved to be funded three months ago so we can get the funds closed and get construction started in the fall.” The Tri-Town development will include 204 units throughout six buildings, occupying nine acres. When complete, the first phase will reserve 60 of its 66 units for residents earning less than 60 percent of the area’s medium income.
Staying Optimistic
The completion of the first phase of the project, which includes two buildings with 33 units each and will take approximately a year to complete, could be prolonged by as much as a month depending on the conditions this winter. Early or deep frosts could limit the amount of site grading that can be done and, of course, there will be the initial rush to lay the foundations before temperatures drop too significantly.
Caselden said the project offers enough flexibility that his team should be capable of working around weather-related obstacles, but winter construction inevitably brings with it higher costs. In these circumstances, a minimum of $10,000 to $20,000 of additional labor and material costs can be expected, which Caselden said is “hardly anything” for a large project likes this, but he also said that “it’s purely based on conditions, so it’s very hard to project.”
A lack of available equity in the low-income housing tax credit markets put many affordable housing projects like the Lunenburg one on hold. The plan that Patrick approved allows the state to convert those housing tax credits into grants through the Department of the Treasury.
The recovery funds serve as a necessary catalyst, but development managers like Caselden understand that they will only help with the initial push.
“We can’t expect the federal stimulus funding to be in place for the next phase,” he said.
Another Central Massachusetts project to receive federal funding is the $7 million Southgate development in Worcester, which is being developed by the South Worcester Neighborhood Improvement Corp. (SWNIC). The project received nearly $3.8 million in recovery funds. SWNIC is set to demolish the existing industrial buildings at the site within a month.
But unlike many other affordable housing projects that were inconvenienced due to lapses in funding and the general decline of the real estate market, Southgate Place benefited from the delays. Because the property was a brownfields site, the SWNIC used the down time to conduct tests and follow through with the necessary cleanup.
“We had the luxury of additional time without having to make hasty and quick decisions,” said Ronald Charette, executive director of SWNIC.
When completed, the South Worcester project will include 25 units of affordable housing with possible elderly or owner-occupied housing, as well.
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