The Jefferson Park Federal housing project, due to be razed and rebuilt, Dec. 1, 2022. (Photo: Marc Levy)

There’s a third construction delay at Jefferson Park Federal, the massive North Cambridge redevelopment project that will replace 175 deteriorating apartments for low-income families and add 103 more affordable units, the Cambridge Housing Authority said last month. The financial closing for the $213.5 million development is now expected early this fall, according to a memorandum presented to authority commissioners April 26.

CHA originally expected to close by the end of 2022, then in March or April this year. The agency must get approval from the state’s affordable-housing agency for tax-exempt bonds that back up loans and associated federal tax credits that can be sold to investors for millions of dollars, a vital source of funding for this and many low-income housing projects.

The housing authority missed an application deadline for the funding last year because of surprising and unacceptably high bids for work by subcontractors. This year’s delays came because the state agency that allocates the bonds and tax credits, MassHousing, is contending with a “significant affordable-housing pipeline and backlog of projects that were hit with funding gaps given increasing prices for construction and recent market turbulence,” CHA executive director Michael Johnston said in an email Tuesday.

Perhaps ominously, Johnston said that the banking industry turmoil and interest increases have not affected plans to finance Jefferson Park “at the moment.”

Johnston said the cost of the project doesn’t worry MassHousing; it far exceeds the $250,000-per-unit limit set in MassHousing’s plan for tax credit allocations this year. Johnston had said previously that the state agency knows that restriction isn’t realistic. MassHousing spokesperson Mark McMorrow didn’t directly answer a question about whether the agency is concerned about Jefferson Park’s cost, saying only: “We cannot comment on pending transactions that are currently being negotiated.”

The authority still has a $10 million gap in its funding plan – it was $11 million in August – and has asked MassHousing for the money to fill it, Johnston said.

Jefferson Park was the largest project to go through the city’s zoning approval under the Affordable Housing Overlay of 2020. It gives developers of 100 percent affordable-housing developments freedom from many zoning limits anywhere in the city. It was intended to provide some certainty and speed up approval so developers of housing for lower-income tenants could better compete with market-rate housing builders who have enough money to ride out delays and opposition.

Residents petitioned the state

Jefferson Park has shown that the new zoning is no slam-dunk for affordable-housing developers. Even after the project went through a lengthy examination by the Planning Board – which had no authority to stop the project but exerted significant influence and questioned the cost, design and location in line with opponents – Jefferson Park ran into a surprise legal action by neighbors that delayed the start of demolition this year.

Johnston disclosed that opponents filed an unusual “petition for a fail-safe review” of the project by state environmental regulators; the filing came Feb. 23. State rules allow 10 affected residents to ask for a new environmental impact report if there is newly discovered potential for “environmental damage” that couldn’t have been foreseen before July 1, 1998, when the state environmental protection rules were adopted, or if the damage would be caused by a number of “circumstances” that wouldn’t lead to harm individually but would cause damage collectively.

A group of 10 residents led by Madeleine Aster, a North Cambridge neighborhood activist, asserted that the project would damage the environment because of “new and unique circumstances,” including tree removal, reduced parking and construction traffic. They also contended that the trigger for newly discovered potential damage was in 2021, when the state environmental protection agency adopted rules fostering “environmental justice.” The Jefferson Park neighborhood on Rindge Avenue has a large concentration of low-income and non-English-speaking families and would be further burdened by the tree removal and extra construction traffic, the petition said.

Quality of life

Many of the objections raised in the petition were also made in public comments at meetings of the Planning Board in November 2021 and February 2022. Several neighborhood groups made similar statements opposing the plan in comments on a city environmental review of the project last year.

Aster said Tuesday: “Our point was not to delay but to make a better quality of life for the residents.” She said neighborhood residents hadn’t known about the plans until recently because the Affordable Housing Overlay didn’t require public meetings. But CHA did hold meetings with neighbors, notified neighborhood groups and established a website to communicate about the project.

The petition said many Jefferson Park residents didn’t like the tree removal, building demolition and reduced parking plans but were afraid to speak up. “Parking is a social justice issue for low-income people because their jobs are not not served by public transit or they work second and third shifts or weekends,” the petition said. Aster said reducing parking spots wouldn’t help the environment. “It won’t be less cars,” she said. “They’ll just park somewhere else.”

Reasons for rejection

Tori Kim, the Massachusetts Environmental Policy Act director at the Executive Office of Energy and Environmental Affairs, rejected the petition March 30, ruling that the petitioners hadn’t met requirements for a new environmental review. She agreed that the Jefferson Park neighborhood is identified as an “environmental justice” census block, adding that the Jefferson Park State site next door is an urban hot spot and that the state health department says Cambridge has a high level of childhood asthma and qualifies as a high-vulnerability environmental justice location under health criteria.

“These screening tools therefore appear to indicate existing burdens related to air quality and extreme heat,” the decision said. But the expected construction traffic wasn’t high enough to meet the state threshold for damage, CHA promised to increase the total tree count with new trees, and reduced parking actually helped the environment, Kim said.

She also observed that the city found no environmental harm in two previous reviews of the project. And CHA, “in reliance” on those reviews, had relocated all the tenants and was preparing to start demolition and procurement of construction materials in March, Kim said. The authority “indicates that further delay” of demolition “will risk the loss of current pricing,” the decision said.

Cleared to start

Cleared to start by the decision, CHA authorized demolition on April 26. Commissioners also approved a separate $8.9 million contract for the work and removed that job from its main Jefferson Park contract, reducing the total to $213.5 million. Johnston said the authority has the money to pay for the work, using available reserves and “developer fees” that were built into construction budgets, and that the authority has $50 million in its own funds to contribute to Jefferson Park construction if necessary.

Still, the cost of the project could get higher because of the delays. “To date, known cost increases have been minimal due to the delay, but I am pretty sure once we have a final closing date, there will be escalation cost requests coming in from [subcontractors],” Johnston said. “That has not happened yet.”