The rehabilitation of public housing, such as has been done recently at the Lincoln Way Apartments, has won federal approval. (Photo: CHA)

Two days before Christmas, the Cambridge Housing Authority finally got federal approval for a sweeping plan to rehabilitate its deteriorating housing developments. The $170 million project calls for the authority to raise millions of dollars from banks and private investors after it moves its public housing portfolio into private ownership – on paper – by transferring the properties to nonprofit affiliates.

The approval from the U.S. Department of Housing and Urban Renewal on Monday came after years of planning and a setback last year. With the long-sought approval, the authority said the first phase will focus on 1,151 apartments in nine large developments. Phase 2 will cover the remaining 979 units, mostly in smaller complexes.

It appeared last week that the authority’s plan had run into a snag. When the authority applied for approval, the total number of potential units in the program nationwide had just exceeded a 60,000-unit cap set by Congress, officials said Thursday. But they remained optimistic because some of the local agencies that applied before Cambridge could drop out. The authority’s announcement of the approval did not say why Cambridge qualified despite the cap.

In a press release today, authority Executive Director Gregory Russ said the agency “is thrilled that its efforts to find a path to restore this essential resource for the benefit of Cambridge’s low-income families and elderly has met with success. In a time of shrinking federal resources and aging physical conditions, the CHA is proud that it has marshaled the resources necessary to fulfill its mission.”

Four decades of protection

As federal funding has dwindled, the authority has sought to find other ways to pay for extensive renovations to preserve housing that serves some of the poorest residents of Cambridge. Without repairs, the buildings could deteriorate to the point where they would not be livable, officials said.

The plan approved by HUD will preserve the housing for the next 40 years, the authority said in its press release. But it will no longer be public housing; instead it will be legally owned by nonprofit corporations controlled by the authority, which has said it will ensure the developments remain dedicated to low-income residents and that tenants won’t lose any of their current protections.

The authority said the redevelopment will occur “over a number of years.” Under the federal program, the Rental Assistance Demonstration, public housing subsidies for authority apartments will end. Instead, the housing will be supported by Section 8 federal rent subsidies, which help low-income tenants by paying rent above 30 percent of their income. These Section 8 certificates will be attached to the apartments rather than allowing tenants to use the subsidy where they want.

The agency has already used such rent vouchers in some of the housing it has renovated.