DHCD and MassHousing Launch Community Scale Housing Initiative

DHCD and MassHousing Launch Community Scale Housing Initiative

March 2017
Don Bianchi

The Massachusetts Department of Housing and Community Development (DHCD) and MassHousing issued a Notice of Funding Availability (NOFA) for the Community Scale Housing Initiative (CSHI). This is a great opportunity for sponsors of smaller rental projects (5-20 units) to have these projects considered outside of the DHCD Tax Credit Rental Rounds.

MACDC has long advocated for a separate funding round for these community-scale projects.  These more modest scale projects are necessary if the Commonwealth is to see affordable housing built in more communities in Massachusetts, including suburban areas with little or no affordable housing, rural areas where the smaller scale is more appropriate, and infill locations in Gateway Cities where small projects can have a catalytic impact on neighborhoods.  MACDC’s analysis of data from DHCD’s last seven “regular” rental rounds (excluding rounds dedicated to supportive housing) demonstrates the challenges that smaller projects face in these rounds focused on tax credit projects.  Of the almost 10,000 units awarded funding in these seven rental rounds, dating back to 2011, less than 3% of the units were in projects of fewer than 20 units which did not utilize low income housing tax credits.

This should change with the launch of CSHI.  Under the NOFA, production projects of at least 5, but no more than 20 rental units, located in communities outside of Boston, are eligible.  Units are considered affordable if targeted to households with incomes at or below 80% of area median income.  The maximum subsidy per CSHI affordable unit is $150,000 if project-based rental assistance is sought, and $200,000 otherwise, with the maximum project subsidy of $1 million.  Projects must be ready to proceed to closing and construction within 12 months of award.  CSHI will make $10 million available from a combination of an allocation of $5 million from DHCD’s Housing Stabilization Fund and $5 million in new money from MassHousing’s Opportunity Fund.

DHCD and MassHousing will hold an information session on March 15 at 11:30 a.m., in the dining room of Shillman House at 49 Edmands Road in Framingham.  Anyone interested in attending this session should email Bertha Borin at DHCD to reserve a seat.  Those with questions about the NOFA can contact Lynn Shields at MassHousing at 617-854-1381.

MACDC President and CEO Joe Kriesberg praised the launch of the new program.  “Community scale projects are incredibly valuable in urban, rural and suburban communities, but are currently difficult to finance in an affordable housing system oriented around the Low Income Housing Tax Credit.  Tax credit deals typically require 20 or more units, and securing the resources necessary for these smaller projects is difficult, even with their reasonable development costs. The Community Scale Housing Initiative program is a smart way to overcome these challenges, so we can build cost effective homes that fit nicely into the existing neighborhood context and market.  MACDC thanks MassHousing, the Department of Housing and Community Development, and the Baker Administration for their creative approach to this challenge, and for their response to the need for such a program that has been expressed by MACDC and others.”

MACDC appreciates the efforts of its members and allies in working with MACDC to achieve this victory in securing the launch of this valuable program.