LOWELL – The idea seems counterintuitive: grow your affordable housing stock by selling it. But for a public housing agency like the Lowell Housing Authoritythis approach could pay big dividends for both the agency and the residents who need affordable housing.
This is an idea that has already been done. In 2017, the LHA received the green light from US Department of Housing and Urban Development sell part of its dispersed site portfolio.
“We have sold 87 of our dispersed federal housing units,” LHA Executive Director Gary Wallace said. “And we were able to bank $9.5 million, which we’re going to use to create new affordable, green, long-term housing.”
The units were sold with deed restrictions that the properties must maintain income levels for all households at 80% of adjusted median income or less for a period of 30 years. Some of the properties have been sold to non-profit organizations such as Habitat for Humanity for Greater Lowell.
“Essentially, we’re going to almost double affordable housing,” Wallace said.
Unlike multi-unit buildings in which repairs and maintenance can all be carried out under one roof or location, dispersed site developments are made up of single units that are not near other public housing but are literally scattered throughout the city.
According HUD documentsscattered-site housing was promoted nearly 50 years ago as an alternative to large, dense public housing developments built from the mid-1940s to the 1960s.
Famous examples include the Brewster-Douglass housing projects in Detroit and the Cabrini-Green homes built just south of downtown Chicago. Most of these massive, high-rise communities were demolished and replaced with townhouses around a centrally designed area.
“The number of vehicles and the man hours that we need for these state properties just to get to all these individual locations to do maintenance or repairs is not a good model,” Wallace said.
Scattered housing is giving way to low to mid-rise communal housing. However, housing agencies must first find a way to make this transition.
“We have a fairly large dispersed site state portfolio of 132 units,” Wallace said Thursday. “On the federal side, there was a HUD disposition law, but there was no such thing on the state side.”
Recently, however, Massachusetts Department of Housing and Community Development formed a task force of five housing authorities – Lowell, Boston, Chelmsford, Amherst and Newton – to explore implementing a HUD-like program with the state’s dispersed properties.
“DHCD is exploring it. We had an introductory meeting in May, and we’re expected for our second meeting,” Wallace said. “I think there’s good optimism that the state will – and they should.”
The state’s public housing agencies are funded by rents from tenants and a state subsidy called formula funding. Despite an increase in state funding from approximately $2 million per year to $6 million per year, the LHA is spending substantial capital resources on renovations and maintenance of its aging portfolio – residential housing elderly and disabled were all built in 1958.
“Some of the capital improvements to our properties are new doors and windows, new roofs, new heating systems,” Wallace said.
LHA Commissioner Rodney Elliott also recently filed a motion to sell the scattered site units and require a significant investment to bring them up to code and keep them affordable, he said.
“I sponsored this motion because the condition of many of these ‘scattered sites’ is in poor condition and we need to do something about it,” Elliott said in a statement. “Our residents deserve clean, safe and affordable housing.
The LHA’s 2023 budget, which commissioners will vote on at their Wednesday, July 13, meeting, includes nearly $700,000 in repairs to its scattered site properties.
If the DHCD approves a disposal plan for the State’s dispersed site units, it will make those properties available to other entities who will then make the necessary repairs.
A lot needs to happen before any properties are offered for sale, Wallace warns, including resident education, discussion and feedback on their rights.
But the idea of offloading the expensive repairs to an outside company and using the funds received for newer and better housing energizes the director.
“We can do a lot of good things with this money,” Wallace said.