Monday, June 24, 2024

Cambridge Housing Authority offices are on Green Street in Cambridge‘s Central Square. (Photo: Marc Levy)

The Cambridge Housing Authority, the largest provider of low-income housing in Cambridge, has expanded its reach far beyond the city limits, administering rental-assistance vouchers as far away as Southbridge and working as a consultant to other housing authorities not only in Massachusetts but in Lewiston, Maine. Now the Cambridge agency will help neighboring Somerville run an unusual program that provides Somerville-funded rent vouchers to lower-income people in that city.

The federal government funds most rent-assistance vouchers in the country under the Section 8 program, which allows low-income tenants to pay just 30 percent of their income for private housing while the government pays the rest. A few big cities such as New York and Philadelphia have launched city-funded voucher programs along the same lines as Section 8. But an online search didn’t turn up any similar municipal rent voucher programs supported by cities as small as Somerville.

After seeking bids, Somerville has chosen the Cambridge Housing Authority to design and administer the program, which will serve up to 35 households, CHA executive director Michael Johnston told the agency’s board at a meeting June 14. The authority will get a total of $5.6 million: $1.6 million this year and $4 million from 2025 to 2028. The first payment will come from Somerville’s federal pandemic relief funds and the second from Somerville city money, director of leased housing Sue Nohl said.

Who will get priority for the vouchers hasn’t been decided, Nohl said, adding that some possibilities are: people who aren’t eligible for other rent aid, families with children in Somerville public schools or households with elderly or disabled members. “Everything is being considered,” Nohl said. Most of the $5.6 million will finance the rent subsidies, she said. CHA will hire a senior coordinator to run the program; applications will probably be accepted in several months, after the program is designed, Johnston said.

Cambridge Housing Authority executive director Michael Johnston with operations secretary Patrick Lane in a 2019 agency video.

The Somerville deal is one of many that has turned the Cambridge Housing Authority into a regional player, largely because of its expertise in designing, building and running low-income housing and rent-voucher programs and in obtaining necessary government and private financial support.

For example, the Cambridge agency has an agreement with the Medford Housing Authority to co-develop the $142-million renovation of the Saltonstall Building, a 200-unit public housing complex in Medford, and add 22 apartments. That puts CHA in almost the same position of responsibility – and benefits – as it is in upgrading its own public housing projects in Cambridge and is another unusual arrangement.

Before the deal, CHA had served as a consultant, helping Medford win approval from the U.S. Department of Housing and Urban Development that would enable private and government financing for the project. The Cambridge agency had plenty of experience obtaining the same approvals for its own projects.

Joining forces

Medford also hired CHA to supervise a relocation plan for tenants in the building and prepare a request for proposals from private banks and financial services companies to help pay for the construction. “At this point, it became clear that the environment had changed a bit and even though [the Medford Housing Authority] is a large and capable agency, they did not have tax credit experience, and this was going to impact interest from investors, so we opted to pivot and become a co-developer of the project,” Johnston said.

By “tax credit experience,” he referred to Cambridge’s success in persuading some of the largest banks and finance companies in the country to buy hundreds of millions of dollars worth of federal low-income housing tax credits awarded to the CHA to redevelop its own public housing. These tax credits have become essential to affordable-housing developers as federal money has dried up. Proceeds from the tax credits bring in private investors who do not have to be repaid.

“This is really exciting, because it’s two housing authorities working together,” Johnston told CHA commissioners this spring.”We’re joining forces because we’ve got a planning and development department that has more bandwidth than any other housing authority in Massachusetts.”

There are risks – the Cambridge agency’s balance sheet will be used for guarantees – but “our assets will be protected,” Johnston said. CHA will also get about $3 million in fees, he said.

As far as Maine

Besides the deals with Somerville and Medford, CHA is a consultant to 12 or 14 other housing authorities, including in Belmont. All but one are in Massachusetts, Johnston said. The out-of-state agency is in Lewiston, Maine. CHA also has a “private agreement” to manage the Cambridge YWCA, which offers housing to low-income women, he said.

Cambridge is also involved in almost 1,200 federally financed rent vouchers outside the city, Johnston said. It created the vouchers as part of a program it launched to preserve affordable units in buildings where mortgages backed by HUD were expiring, threatening to end low-rent guarantees. Johnston said the buildings were in Boston, Lynn, Worcester and Southbridge. Another 496 vouchers in the preservation program are in Cambridge.

CHA gets fees for some of these activities, such as administrative fees for the vouchers. The contract for Somerville’s city-funded rent voucher program gives it $599,313 over five years to administer the program, Johnston said. Of that, $143,512 is for costs not related to hiring the coordinator, he said. The amount the authority is collecting above its costs is not known.

Jefferson Park redevelopment

While CHA helps other housing authorities, it’s still waiting for financing approvals for its own huge $213.5 million Jefferson Park Federal redevelopment, which will replace 175 units in the run-down complex and add 103 apartments.

Johnston said at the authority’s June 14 board meeting that its staff and the state agency that must approve loans and tax credits for the project met the day before and “really hashed out a lot of the stuff that just needed people to talk about in person.”

Meanwhile, CHA is paying for demolition and other site preparation. Commissioners approved $15.4 million for the work: almost all of it from reserve funds that the federal Housing and Urban Development agency had been holding; demolition will begin June 26. The project is now expected to close next year, more than a year later than originally expected, but investors for the tax credits are expected to be lined up by the fall, Johnston said.