The Cambridge Housing Authority has completed financing for the first phase of its huge new Jefferson Park Federal low-income public housing development, culminating 10 years of planning. The project, on Rindge Avenue in North Cambridge, will replace 175 deteriorating apartments that were demolished and add another 103 units, housing a total of 278 low-income families when the development is completed in 2027.
The long-awaited financial closing for Phase 1 occurred July 26, authority executive director Michael Johnston said. It will cost $198.7 million for 195 units, including about $23.6 million for demolishing all the buildings and preparing the entire site for construction. Building the second phase, with the remaining 83 units, is expected to begin while the first phase is in construction. As of November, the authority expected the cost of the entire development to total $222 million.
Jefferson Park was built in 1952 as state public housing. It was rehabilitated and converted to federally supported housing in the 1980s. After that, only limited renovation occurred.
When the authority began its ambitious plan to redevelop its entire portfolio to preserve low-income housing that was deteriorating, in 2010, the authority intended to renovate Jefferson Park Federal rather than replace it. The agency changed the plan to demolition when examinations found that the existing buildings were “too deteriorated to make rehabilitation feasible,” the authority has said.
As time passed, costs grew and competition increased for the major funding resources available to affordable housing developers: state-sponsored bonds and the tax credits for low-income housing that come with the bonds. Developers can sell the tax credits to investors to get money they don’t have to repay.
But there is an annual cap on the state bonds and associated tax credits. Intense competition for the aid and increased construction costs delayed CHA’s plans. Financial closings for the project were postponed three times: in late 2022, the spring of 2023 and early last fall.
The solution was to split the project into two phases, a change approved by the authority’s board Nov. 28. It was necessary, Johnston said then: “We would not have been able to move forward without splitting up the project.” Clara Fraden, director of planning and development for the CHA, told the board the split was “related to bond scarcity,” referring to the crucial state-sponsored bonds.
Even so, the closing occurred later than planners expected. The authority had anticipated completing financing in April. Meanwhile, CHA got a head start on construction by beginning demolition and site preparation last year. The authority paid $23.6 million for the work from its own funds.
A stronger
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Wow… $800k per apartment.
I think the average cost of residential new construction is ~$150 per square foot in the US. I doubt these apartments are 5k+ square feet…
Can’t win like that
$800k per unit is pretty staggering. How are we ever going to tackle housing affordability if we can only barely make a dent with a quarter of a billion dollars?
At this point, I wonder if just giving $100k to 2224 families (278 * 8) would have a more profound effect than indirectly subsidizing the rent for just 278.
How do we bring down costs in a way that allows us to better address the waitlist for affordable housing that is thousands of households long?
Interesting point on the cash transfer!