Mass. to get $110m for housing
Federal stimulus money to revive derailed projects
Massachusetts will receive $110 million in federal stimulus money to build nearly 1,100 affordable apartments during the next two years, jump-starting about 25 developments statewide that have been stalled because of the down economy.
State officials yesterday said the money, from two awards under the American Recovery and Reinvestment Act created by Congress in February, should add at least 1,400 construction jobs at a time when Massachusetts’ unemployment rate has soared above 8 percent.
“Investments from this program will boost our regional economy as it gets important construction projects back on line, puts people back to work, and creates new housing opportunities for hard-working families all across the Commonwealth,’’ Governor Deval Patrick said in announcing the funding.
The construction of 1,100 housing units is significant during a time of increasing homelessness and rising unemployment, said Aaron Gornstein, executive director of the Citizens’ Housing and Planning Association, a nonprofit that promotes affordable housing. Housing projects have come to a virtual standstill during the recession. So far this year, fewer than 3,000 housing units of any kind have received construction permits. While there are about 243,000 units of subsidized housing in Massachusetts, according to state housing data, many more are needed.
“It’s going to be a big boost for working families in need of affordable apartments,’’ said Gornstein.
The money will be used to revive projects derailed during the past two years because of the slow sale of tax credits provided through the federal Low Income Housing Tax Credit program. The program, considered the nation’s most important financial resource for affordable housing, awards to developers credits that can be used to reduce taxable income. In turn, developers - often nonprofit agencies - sell credits to investors and banks and use the proceeds to finance construction. Since 1992, the program has helped to build 24,150 apartments in Massachusetts, officials said.
But the financial crisis that devastated Wall Street last year hit the tax credit market equally hard, and developers could not sell their credits, or were forced to sell them at reduced prices. Last year, 31 affordable housing projects in Massachusetts were stalled because of funding problems, although some have since managed to move forward on their own, Gornstein said.
For instance, the nonprofit Jewish Community Housing for the Elderly in Brighton has been waiting to break ground on a 150-unit apartment building in Framingham for more than a year. Allan Isbitz, vice president of real estate development for the agency, said the project has been unable to find investors willing to buy low-income tax credits. The agency is now talking to new investors and gearing up to apply for some of the federal funds announced yesterday.
“This money is timely and badly needed,’’ said Isbitz. “It’s difficult for us, and we depend on this money to break ground.’’
Tina Brooks, undersecretary of the state Department of Housing and Community Development, said the US Treasury awarded the state $50.8 million to allow developers to exchange unsold tax credits for cash. In addition, the federal Department of Housing and Urban Development awarded $59.6 million to allow the state to help compensate developers in cases where the sales of their tax credits produced less cash than expected.
The state will start accepting applications for the funding this month and begin releasing awards in August, Brooks said.
“The biggest thing is making sure that these projects are the most ready to go,’’ Brooks said. “As we make our first awards by the end of the summer, we expect to see projects move to construction shortly thereafter.’’
The news was greeted with enthusiasm by state and local officials who pushed for the funds as part of the federal stimulus package.
Senator John F. Kerry noted that the funding comes at a time when the state is housing more than 750 homeless families - including about 1,000 children - in motels because there isn’t enough room in shelters. The motel accommodations are costing Massachusetts taxpayers nearly $2 million a month.
“This affordable housing investment will help these families and thousands more who are out of work or struggling with reduced incomes,’’ Kerry said.
Jenifer B. McKim can be reached at firstname.lastname@example.org.