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Community Preservation Act Affordable Housing Restrictions

Community Preservation Act Affordable Housing Restrictions. Community Preservation Coalition Wayne Feiden, AICP Director of Planning & Development City of Northampton WFeiden@NorthamptonMA.gov. Source: Bonnie Heudorfer. Why affordable housing?. Needed for people AND jobs

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Community Preservation Act Affordable Housing Restrictions

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  1. Community Preservation ActAffordable Housing Restrictions Community Preservation Coalition Wayne Feiden, AICP Director of Planning & Development City of Northampton WFeiden@NorthamptonMA.gov

  2. Source: Bonnie Heudorfer Why affordable housing? • Needed for people AND jobs • Local control under MGL 40B < 10% state goal= lose local control • CPA requirement

  3. Habitat Mixed Use Homeless shelter, condo & offices SRO & retail

  4. Affordable Housing Restrictions:What are they about? • Ensure conditions of approval remain • Customize for any need (in theory) • Rental versus home ownership

  5. Affordable housing restrictions versus other restrictions • More complicated • Generally not permanent • Homeowner equity • Proper maintenance

  6. X % Affordable Housing RestrictionAs Percent of Market Rate

  7. X % Cons: • Not affordable to new buyer when housing goes up fast Pros: • Simple to understand • Easy to implement • Homeowner can recapture some of equity

  8. Keeping affordable housing affordable – AMI Method X %

  9. X % Cons: • Marginal equity Pros: • Property remains subsidized in same income bracket • Slight equity gain

  10. Variations • Balance affordability and equity • Community Land Trust • Limited Equity Housing Cooperative

  11. Local Median Family Income

  12. Basic Structuring Issues • Length of restriction • Ownership restrictions • Target eligibility (maximum income) • Minimum income • Resale (future buyer, resale price) • Foreclosures

  13. Other Issues • Subordination – banks often do NOT subordinate • Monitoring – Whose job is it? • Owner/Tenant Selection - Affirmative marketing - Lottery

  14. MassHousing/Fannie Mae Model • For Fannie Mae mortgages only • Home ownership • NO subordination to mortgage required • Carefully reviewed and proven language • Less flexibility to change terms

  15. Challenges • Limited models • DHCD and Fannie Mae • Very complicated • CPA housing usually gap, bridge, and component funding • Primary lender/funder’s restriction governs • Monitoring • Local preference, marketing, lottery

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