The Cambridge Housing Authority is acting as if Donald Trump were not in the White House – despite deep cuts proposed to federal funding for low-income housing, the authority is planning to build hundreds of new affordable homes in the next five years, including a mixed-income “social housing” project that is publicly owned and managed.
This fall the authority’s board of commissioners approved a five-year strategic plan that calls for renovating 500 units, building 500 new apartments, and developing a “social housing” project to house people of different incomes. The model entails ‘public ownership, resident participation, and rents based on operating costs,” the strategic plan says.
Included in the plans are the 290-unit development that will replace the 153-unit Corcoran Park public housing development in Strawberry Hill and tearing down the 30-unit Weaver Apartments in North Cambridge and erecting a larger building with 18 more apartments.The agency is also negotiating to buy unidentified properties in Cambridge.
The CHA deserves praise for adopting ambitious plans despite the unfavorable climate in Washington, said Rachel Heller, chief executive of the Citizens Housing and Planning Association, a statewide planning agency that advocates for the construction of affordable housing and for community development. “We have to keep moving forward,” Heller said. “If we start to react to everything being discussed we will get paralyzed.”
“Cambridge is doing a lot of good things for housing,” she added, praising the city’s adoption of the Affordable Housing Overlay allowing 100 percent affordable buildings throughout the city, and for investing city money into low- and moderate-income housing projects.
Heller also said the picture in Washington isn’t all dark. “At the federal level there have been good changes made” to tax credits that CHA and other low-income housing developers depend on to finance construction, she said. As for Section 8 rent subsidies, another vital financial support to developers as well as low-income tenants, “there are concerns about what is being proposed by the president,” Heller said. But “thus far Congress has continued to fund the program.”
The housing authority “has a strong track record,” she said. “If they need to, they will adjust their strategy.”
Deliberately ambitious
CHA executive director Michael Johnston said the plan, developed after conversations with the entire staff, is deliberately ambitious in the face of challenges from Washington. “Yeah, Trump is in the White House and things look dismal as far as the federal side,” Johnston said. But the CHA has worked for years to create cash flow from its portfolio, he said, noting “We are not under water” like some other housing authorities that don’t generate enough income to pay expenses of Section 8 vouchers or other operations.
“We are somewhat conservative. We don’t pay top dollar,” he said. Any surplus gets “put aside.” The authority also collects fees by working as a consultant, and sometimes as a co-developer, to neighboring low-income housing agencies, including offering its considerable experience and skill in funding and renovating low-income housing projects. It’s helping Medford rebuild a development, and will aid Brockton. CHA also manages the Belmont Housing Authority. All those revenues provide cash if needed.
The authority works closely with private investors to support multimillion-dollar building projects such as the $250 million Jefferson Park Federal project, now under construction. CHA raises millions of dollars by selling federal low-income tax credits to big financial companies; it qualifies for the tax credits by winning approval for state bonds. The U.S. Department of Housing and Urban Development, the federal agency overseeing low-income housing, has urged local housing authorities to go this funding route as federal support of public housing dwindled.
Policy paid off
Its cash flow management and banking of surpluses helped during the government shutdown. Where the Boston Housing Authority was forced to partly reduce payments to landlords who rent to Section 8 tenants because of a funding delay, Cambridge was able to continue making these payments.
Tenants with a voucher pay about 30 percent of their income for rent and the federal government pays the rest, up to a maximum set by the government. HUD sets each housing agency’s yearly federal funding allocation for Section 8 in advance, but the need can change during the year with tenants’ income or rent, or if more vouchers than expected are used, Johnston said.
The federal agency’s budget in the past included money to cover such shortfalls, but “this administration previously said there was nothing left in the appropriated budget to cover the shortfall,” Johnston said. Then money was found “before the shutdown. HUD claims the check is in the mail, so to speak.”
Cambridge did have “a small shortfall” in one of its voucher programs, “but unlike Boston we have cash to cover the shortfall,” Johnston said.
Concession to federal rule
The picture isn’t all rosy, and the authority is not completely self-sufficient. When the U.S. government ordered Cambridge to change the way it calculates rent for 42 “mixed” households – with at least one immigrant member who isn’t eligible for federally subsidized housing – the housing authority vowed to fight; the new rules could increase rents sharply, it said. CHA had used its own method for years because its good management record qualifies it to ignore some federal regulations.
That didn’t succeed. The local board quietly approved following the federal rent calculation rules several months ago, noting it had to comply. Meanwhile, the city has set aside $1 million in local funds to ensure that the 42 families aren’t hurt financially. The authority also depends on contributions from the Cambridge Affordable Housing Trust to help pay for its construction projects.
CHA was also forced to split up some of its largest construction projects because of limits on state bonds – and therefore indispensable low-income housing tax credits – available to affordable-housing developers in any one year. Jefferson Park is in phase two and Corcoran Park will be financed and built in two stages, Johnston said. He added that he’s grown to appreciate dividing very large projects into phases. One helpful result from staggering the construction – fewer tenants need to be housed somewhere else during the project. “It’s getting harder and harder to relocate folks,” Johnston said.
Medicaid concerns, future plans
One Trump administration change that does concern him is big budget cuts and policy changes to Medicaid, the program that provides health care to low-income individuals and families. Medicaid now helps pay for workers who offer supportive care to formerly homeless residents of two new CHA housing developments: at 115 Norfolk St. and 16-18 Wendell St. Medicaid also helps provide social work and nursing care to residents of the Manning Apartments, which houses older and disabled tenants near Central Square. Big budget cuts and policy changes to Medicaid could mean the CHA needs to find a way to pay for supportive care, he said. The CHA’s strategy is to launch an advocacy program by 2027 to provide Medicaid funding for “wellness programs in public housing,” Johnston said.
Johnston’s attitude and views of his board about the potential impacts of Trump’s policies have changed by 180 degrees since February. At the time, Johnston, CHA board members and lawyers representing low-income tenants said budget cuts, a looming shutdown and layoffs at HUD could harm low-income tenants and the agencies that serve them. They were reacting after an unexpected pause in federal funding ordered by the new administration briefly cut off the flow of money for Section 8.
The authority’s previous five-year strategic plan didn’t list specific numeric goals, instead calling for more amorphous aims such as a call to “reposition the housing authority” financially, Johnston said. It also sought improvements in “customer service,” he said.
That is an area “where we could have done better,” Johnston said.
He added that CHA “is trying to rein in” the way managers of individual housing developments treat residents. “They’re not little fiefdoms,” Johnston said. “Just because you [are] a manager, you don’t run it the way you want.”
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Good article, but it was missing a crucial number.
Why was there no mention about the cost per unit?