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The Homes at Auburndale Yard
Before Lorraine Landsburg moved to The Homes at Auburndale Yard
development in Newton, Massachusetts, she and her three small sons
had been living in an affordable apartment in a nearby Newton neighborhood.
After moving from the Dorchester section of Boston to Newton, Ms.
Landsburg was determined to purchase a house in Newton so that she
could keep her sons enrolled in the city's high-quality schools.
But Ms. Landsburg also realized that Newton had some of the highest
property values in greater Boston. "Everybody thought I was
crazy to try to buy a house in Newton," says Ms. Landsburg,
a bus driver for the Massachusetts Bay Transportation Authority.
"They thought I wouldn't be able to afford it. But if it hadn't
been for The Homes at Auburndale Yard I don't think I would have."
Developed by the Newton Community Development Foundation (NCDF),
The Homes at Auburndale Yard is a mixed-income condominium community
in West Newton that opened in 1998. The development includes 10
homes - six single-family homes and two duplexes. Four of the homes
were sold at market rate and three were sold at affordable rates
to first-time home buyers. NCDF owns three of the units, which are
rented under the Section 8 program to families at 50 percent of
the area median income.
Built under Chapter 40B on a former city public-works site that
had been vacant for about 20 years, The Homes at Auburndale Yard
was designed to blend seamlessly with the surrounding neighborhood.
"This was a friendly 40B," says Jeanne Strickland, executive
director of NCDF. "We had the full support of the neighborhood
as well as the Board of Aldermen."
Chapter 40B allowed the developer to sidestep an existing zoning
ordinance that prohibits multiple single houses on one lot. "This
was the first time in the history of the Board of Aldermen that
they encouraged and approved the bypass of their permitting process
and encouraged NCDF to use the Comprehensive Permit (Chapter 40B)
to overcome the constraints of building 10 individual units on this
site," notes Ms. Strickland.
The Homes at Auburndale Yard was funded in part with a $1.48 million
NEF advance through member Auburndale Co-Operative Bank (now Village
Bank). "In April of 1998, NEF advances were very competitive,
and we felt we could give the NCDF a better rate than our market
rate at that time," says Elizabeth MacLellan, vice president/CRA
compliance at member Village Bank.
"Because of the high rental prices and the high purchase prices,
people who are raised in the city very often cannot afford to live
here," adds Ms. MacLellan. "Hopefully, through our affordable-housing
ventures with nonprofits and others we make that dream a reality
here in Newton."
In addition to being a mixed-income development, The Homes at Auburndale
Yard is racially diverse, with white, Hispanic, African-American,
and Asian residents living there. Ned and Anne Canty had been living
with their six children in a 14-room house on Commonwealth Avenue
when they decided to downsize and purchase a market-rate home in
the Auburndale development. Their children were grown and most of
them had
left the house, so they no longer needed such a large space.
"It worked out fine for us," says Mr. Canty, who is 75.
"We've really adapted to it and enjoy it very much."
Many years ago, Mr. Canty lived for a time in Stockholm, Sweden,
where the government was developing mixed-income villages outside
the city. In these villages, he says, there was no regard for the
income or social class of the residents. "So you could have
a doctor living next to a taxi driver," he says. "And
as far as I know it worked out very well."
"We would encourage people to get involved in a similar situation,"
he adds. "It's unfortunate that some people have a negative
feeling about developments like this because I think this is something
that we need. It also represents a very thoughtful use of land.
The homes are close, but not so close that you feel the residents
are in each other's vest pocket. You get the feeling that there
isn't anybody immediately next door to you. It's a nice, open design."
Fairhaven Residential Gardens,
Concord
New England Fund (NEF) advances also played a critical role in financing
Fairhaven Residential Gardens, a Chapter 40B development in Concord,
Massachusetts.
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| Fairhaven
Residential Gardens. |
Opened last year on formerly vacant land along Route 2, the mixed-income
development provides 42 rental apartments and 32 garages in six
buildings. The development is located in a high-priced community
where most residents live in single-family houses.
Robert Walker, principal of Concord Residential Gardens LLC, the
developer of the project, says he originally wanted to build a childcare
center on the site but decided against it because "the town
and the neighbors really weren't too keen on it."
Mr. Walker instead decided to build housing on the site. "The
town thought it would be an appropriate use," he says. "I
think they wanted the apartments to help them achieve their [affordable-housing]
goal."
Communities in which 10 percent of the housing stock is affordable
to households earning at or below 80 percent of the area median
income are ineligible for unwanted Chapter 40B developments.
"I've worked on four or five 40B developments," says Mr.
Walker. "I don't treat a 40B any differently than a regular
development. Just because it has an affordable component doesn't
mean we do anything different."
Before receiving approval for the initiative, Mr. Walker went before
Concord's Zoning Board of Appeals and attended a number of hearings
in which neighbors voiced opposition to his plan. "I think
it took us close to eight months to get through the process,"
he says. "I don't think it was the most difficult process I've
been through, but it certainly wasn't something I looked forward
to."
By using the NEF - one of several "federally subsidizing"
funding sources required by the 40B process - developers are able
to tap existing relationships with member banks.
To fund the Fairhaven development, the developer turned to member
Danvers Savings Bank, which had financed earlier projects developed
by Mr. Walker's firm. Ron Gannett, vice president/commercial real
estate at Danvers Savings Bank, says an NEF advance funded 25 percent
of the seven-figure loan his bank made to help fund the Fairhaven
development.
Mr. Gannett says the discounted NEF advance, required as part of
the 40B process, "clearly helps support the lower rents received
on those low- to moderate-income units."
"The 40B process is really straightforward," says Mr.
Gannett. "I think it's a great concept. There's more of a need
for affordable housing now than there was even a couple of years
ago."
"This loan provides a decent contribution to the bottom line
while providing quality affordable housing in the community,"
adds Mr. Gannett. "The Federal Home Loan Bank of Boston was
extraordinarily supportive. Turnaround times were fantastic. I had
approval from the Bank on this deal in under 10 days."
Like other Chapter 40B developments, the Fairhaven development provides
affordable housing for residents who otherwise might not be able
to afford the area's high housing costs.
Bruce Hoar, a custodian for 23 years at Concord-Carlisle Regional
High School, says he would have had to rent an apartment farther
from his workplace if he hadn't been eligible for housing at Fairhaven
Residential Gardens, which is a mile from the high school.
"I wasn't able to afford rent in the area," he says. "I
would have had to move out of
the area. But my children are in this area. I wanted to be near
my children and my
employment."
NEF in Rhode Island
Last year, the Federal Home Loan Bank of Boston (the Bank) approved
the first use of New England Fund (NEF) advances to finance a development
under Rhode Island's Low and Moderate Income Housing Act.
Comparable to Massachusetts' Chapter 40B, the Rhode Island law was
passed in 1991 to encourage the creation of affordable houses and
apartments across the state. The law was amended in 2002 to allow
for-profit developers to develop ownership housing.
Before the act was amended, for-profit developers could develop
rental housing but only nonprofits could develop ownership housing.
The law was amended to increase the amount of affordable housing
being developed under the statute.
Like the Massachusetts Comprehensive Permit law, the Rhode Island
measure streamlines the approval process for affordable-housing
proposals by allowing one-stop permitting through municipal planning
boards, which can grant density bonuses and waivers from local zoning
requirements. Allowing for higher density makes it possible to provide
additional affordable rental units.
The Rhode Island law requires houses and apartments developed under
the act to have long-term local, state, or federal subsidies in
order to be counted toward the 10 percent affordable goal set for
municipalities. Under the law, the affordability of for-profit developments
must remain in place for at least 30 years.
In Rhode Island, member Fleet National Bank (now Bank of America)
received approval for a $922,896 NEF advance to finance phase one
of the for-profit Metacom Condominiums, an 82-unit ownership development
in Bristol, Rhode Island. Of the 36 units being developed in phase
one — which includes the renovation
of existing apartments and their conversion to condominiums —
15 units, or 42 percent, will be affordable to residents at 80 percent
of the area median income. Two additional affordable units will
be developed in phase two.
For-profit developers seeking approval under the state's Low and
Moderate Income Housing Act must use long-term municipal, state,
or federal subsidies to finance their developments.
"We have a long and large relationship with the Federal Home
Loan Bank of Boston," said Paul Santanna, senior vice president
at Bank of America. "That relationship has enabled us to serve
our customer in a way that would not have been possible if we did
not have access to the New England Fund. This is very important
to us."
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