New fund will keep rents low
$150m loan program aims to preserve affordable housing
A state effort to preserve affordable-housing rental properties received a boost yesterday as Governor Deval Patrick unveiled a $150 million loan fund aimed at helping organizations and individuals buy such developments and keep rents below market prices.
Patrick said the loan program, created with private and public funds, will be targeted at privately owned, subsidized properties that include rent restrictions for low-income residents, most of whom are senior citizens or disabled.
He detailed the plan at the State House during an event scheduled to celebrate a new law that gives the state right of first refusal on thousands of properties whose rent restrictions are set to expire. About 41,000 units of affordable housing are scheduled to revert to market-priced rents over the next decade as their owners pay off publicly subsidized mortgages and agreements keeping rents artificially low expire. Most of the apartments were created between the late 1960s and early 1980s when developers received financing incentives from the government in return for making apartments available to low-income tenants.
At the event, Patrick told community activists and housing advocates that the two measures together will “create a rational and predictable process’’ for the transfer of affordable housing units to new owners. He lauded the decades-long effort to preserve affordable housing in Massachusetts, which has some of the nation’s most expensive real estate.
“Today, all of you, working together, have protected our affordable housing stock and, most importantly, tenants in every corner and county of the Commonwealth,’’ Patrick said.
The loan fund will assist for-profit and nonprofit buyers interested in purchasing affordable housing by providing them with temporary funding while they seek permanent financing. The fund includes $100 million from the Massachusetts Housing Investment Corp., a private nonprofit created to support affordable housing, $40 million from private lenders, and $3.5 million from the John D. and Catherine T. MacArthur Foundation, a Chicago nonprofit that supports housing and economic development.
The legislation signed by Patrick last week gives the state Department of Housing and Community Development or its designee the first chance to purchase publicly assisted housing as it becomes available. It also requires that tenants and municipalities be notified about looming expiration dates on rent restrictions and limits rent increases for three years on properties that convert to market rates.
Housing advocates lauded the efforts to keep rents manageable for low-income residents, although it is unclear how many property owners plan to sell or eliminate their affordable housing units.
The new fund “will allow nonprofit or for-profit owners to acquire these properties quickly and keep them affordable over the long term,’’ said Aaron Gornstein, executive director of the Citizens’ Housing and Planning Association. “It is critical to have access to the capital.’’
Jenifer B. McKim can be reached at email@example.com.