Community Preservation Act Conference

March 1, 2002

Presentation by: Connie Kruger, MHP

Massachusetts Housing Partnership (MHP) is a resource to help communities create and preserve affordable housing—MHP provides permanent financing on affordable rental projects and provides technical assistance to municipalities and community groups

The MHP Community Assistance Program (CAP) provides early feasibility money to help move housing development projects forward
CAP also provides staff resources to help think projects through and find solutions

Contact Info: Connie Kruger, 617-338-7868 ext. 281.

In my work with communities across the state I see many people working hard to create affordable housing that fits with their community. It is not an easy task. Housing development is complicated, time consuming, at times highly technical, it’s expensive to produce, and resources often need to be layered to make a project work.

Community Preservation Act funds can bring flexible money in early before other funding can be in place, preventing opportunities from being lost. Housing deals are often very time sensitive.

CPA funds can:

Fill a gap that makes a project feasible; leverage state or federal dollars
Provide flexible funds early on in a project—(appraisals, environmental testing, development consultant, etc.)
Be used to write down unit purchase price or unit rents to make it affordable.

Communities are:

Using CPA funds to do affordable housing projects they might otherwise not be doing
Thinking creatively about ways to do locally responsive projects using CPA as all or part of project funding
Having a seat at the table with other local interests
Crafting joint projects that satisfy multiple needs

Some first steps in selecting CPA funded housing projects:

Assess community housing needs (MHP Housing Needs Workbook)
Identify partners, identify constituency
Municipal land; housing authority land, other opportunities
Assess community's capacity to administer—project implementation, program administration, monitoring and enforcement

Communities often prefer small-scale projects, in-fill, one and two unit buildings. The per unit cost in small projects can be very high. Small projects are often very difficult to finance through conventional subsidy sources so CPA can make a big difference. More units per building and more buildings per acre make affordable housing more cost effective, and provide more needed housing per project. Density can be difficult issue at the local level, but quality design can help assuage some of the fears related to density.

Housing development is complicated, expensive and often takes a long time to accomplish. CPA housing activities that include other techniques besides new production may be somewhat easier to accomplish than new production, and may be easier to gain political support for.
Condo buy downs
Purchase of existing buildings and adding affordability restrictions
Renter assistance or down payment
Accumulating CPA funds without specific sites required may be necessary to respond quickly to market opportunities

The CPA legislation adds some particular challenges:

CPA activities must go to the City Council or Town Meeting for approval—Housing development once it is site specific is most likely to spark feelings from abutters and others. Open Space and conservation purchases have almost the opposite effect—giving a soothing assurance to neighbors that nothing further can ever happen near them. So the political process may work against some of the more creative or ambitious affordable housing efforts. One solution is to approve the funds to a trust or other entity that can later spend the funds for not yet identified projects.

Real estate interests greater than the municipality must own 30 years—this can be an obstacle for some projects and needs to be carefully worked through. The Act does allow ownership to be assigned to the Local Housing Authority. Some communities have assigned ownership, management, or enforcement—even development to the local housing authority. Since housing authorities are included on the CPC they can help define their role in a project.

Only 10% of the funds need be spent on housing. If only 10% is allocated for housing the CPA will have failed in regards to helping with affordable housing. There is a built in tension between the various interests represented by the CPA. Too much money spent on one interest or too much land purchased for one purpose, can make the goals of the other interests that much harder to achieve. There has long been a tension between housing interests and the preservation of land for open space. Some communities are only spending the minimum 10% on housing, using most to take more land out of development further driving up housing cost and eliminating future sites for affordable housing development

The promise of CPA can be realized when local CPA program do a good job of balancing all these interests.