tools - genevieve rajewski · new community development advances are a hands-down choice for...

T O O L S F O R H O U S I N G A N D C O M M U N I T Y E C O N O M I C D E V E L O P M E N T

TOOLSI s s u e N o . 1 9 W i n t e r 2 0 0 3I N S I D E

Please continue to page 8. ➢

FROM SUNK TO SOUGHT-AFTERAHP funding and a low-cost Bankadvance helped turn a once desolatesection of Woonsocket, RhodeIsland, into a vibrant, desirableneighborhood. 3

A LESSON IN VERSATILITYA Massachusetts memberdemonstrates why the Bank’snew Community Developmentadvances are a hands-downchoice for funding affordablehousing and economicdevelopment. 5

AFFORDABLE HOUSINGPROGRAMForty-two initiativeswon a total of $6.7 millionin AHP funding duringthe June 2000 round. 13

Smart GrowthBank Sponsors a Regional DialogueBY MICHAEL A. JESSEE, PRESIDENT AND CEO, FEDERAL HOME LOAN BANK OF BOSTON

“Sprawling” isn’t the image typicallyassociated with New England.

Even though “crawling” comes to mindwhen you’re driving in or out of Boston,few of us connect sprawl with Vermont’sverdant mountains or Maine’s coastalvillages.

However, the Vermont Forum on Sprawlreports that Vermont’s rate of land devel-opment increased at about two and halftimes the rate of population growthbetween 1982 and 1992. And in Maine,land was developed at almost twice the rateof population growth during that sameperiod.

The fact is that poorly planned growth is aserious cause for concern in each of theregion’s six states. And the rate at andmanner in which the region is growing haslarge implications for all New Englanders’quality of life. The Federal Home LoanBank of Boston’s recent New EnglandSmart Growth Symposium focused on ex-actly what these implications are and howthe region should address them.

Held in Boston, the symposium broughttogether leaders in land-use planning andfinance to discuss current and proposedpolicies to manage growth. Over 100 peo-ple attended, including practitioners fromeach of the New England states, to explore

the critical issues and highlight the region’ssmart-growth activity and needs.

A statement from Senator James Jeffords(I-VT), cochairman of the bipartisan SmartGrowth Task Force and chairman of theEnvironment and Public Works Commit-tee, began the conference by discussing theimportance of regional cooperation in cre-ating economically vibrant, culturallycohesive communities. He cited twobills then pending — the Brownfield SiteRedevelopment Assistance Act (S.1079)and the Community Character Act (S.975)— as signs that smart-growth issues aregaining attention in Congress.

The symposium then featured overviews ofsmart-growth activities in each New En-gland state and presentations on six relatedpolicy issues: taxes, land use, transporta-tion, housing, economic development, and

Many community agencies,municipalities, and states arealready implementing creativeapproaches to smart growth.Four members of the Bank’sNew England Smart GrowthSymposium Panel discuss theseon pages 8 through 11.

PERSISTENCE PAYS OFFAfter nine years, Connecticut’sTrumbull Townhomes triumph. 3

BREAKING NEW GROUNDA former school in Boston istransformed into a fully affordableassisted-living facility. 6

AFFORDABLE HOUSING PROGRAMThe Bank awards $6.7 millionin Round Two of the 2002 AHPand announces a newsubsidy programto assist home buyers. 14-15

2 ■ F E D E R A L H O M E L O A N B A N K O F B O S T O N

C O N T E N T S

TOOLS for Housing and Community

Economic Development is published bythe Federal Home Loan Bank of Boston

111 Huntington AvenueBoston, MA 02199

www.fhlbboston.com

For additional copies, or to be placedon the mailing list, please contactHolly Frades, housing and communityinvestment assistant, at 617-292-9713 [email protected].

Please contact the Housing andCommunity Investment Department at1-888-424-3863 if you have questionsconcerning the Federal Home Loan Bankof Boston’s housing programs.

The Federal Home Loan Bank of Bostonserves member mortgage-lending insti-tutions in the six New England states. Itprovides funds to its members to enablethem to expand their home-lending ac-tivities and meet other requirements. Italso offers a variety of noncredit ser-vices. Eligible members include savingsbanks, savings and loan associations,co-operative banks, commercial banks,insurance companies, and credit unionsthat meet a defined commitment tohousing finance.

In 2002, 79 members applied to theFederal Home Loan Bank of Bostonfor $409.6 million in CommunityDevelopment advances (CDAs). Theywill use the low-cost funding to supportaffordable-housing, economic-develop-ment, and mixed-use initiatives —ranging from capital for small business-es, to fixed-rate financing for housing, tofunding for infrastructure improvements.

Now, it’s easier, more convenient, and moreefficient to apply for a CDA. ThroughFHLB Direct, the Bank’s online transactionand information service, users can createand submit CDA applications with just afew clicks of a mouse.

Because each type of initiative has its ownapplication, the process is far morestreamlined. If an applicant forgets to in-clude a necessary piece of information,FHLB Direct will prompt him or her toadd it before the application is submittedfor approval — reducing follow-up callsfrom Bank staff.

The online application also allows a userto choose from a list of contacts at his orher institution and to add new contacts

Easier Access toFlexible FundingMembers Can Now Apply Online fora Community Development Advance

and save them for future use. Users canalso choose from an existing list of spon-sor/borrower contacts or add newsponsor/borrower contacts.

There’s no need to get bogged down inprinting and mailing paper exhibits, suchas public-relations and marketing mate-rials, to accompany an application.Applicants can just browse their comput-ers to attach the appropriate electronicfiles. Of course, applicants can still sub-mit paper exhibits, if necessary.

FHLB Direct gives users 10 days to com-plete and submit an online CDAapplication, allowing them to save appli-cations as drafts. Submitted applicationsare reviewed within 10 days, at whichtime the Bank’s Housing and Communi-ty Investment staff will contact applicantsvia e-mail.

To access the new online application orfor more information about the Bank’sCommunity Development advances,members should contact Paulette Vass,community development administrator,by phone, at 617-292-9792, or by e-mail,at [email protected]. ◗

AHP Training Sessions

Smart Growth 1

Easier Access to Flexible Funding 2

AHP Training Sessions 2

Persistence Pays Off 3

Making Fair Housing Meaningful 5

Breaking New Ground withAffordable Assisted Living 6

Smart Growth: A Regional andNational Perspective 8

Creating a Market forAuthentic Places 9

Managing Growth in Maine 10

Vermont Reforms its Tax Policy 11

Member’s Use of Bank ProgramsEnhances Business and Community 12

AHP Implementation PlanSees Changes 14

New Subsidy Program toAssist Home Buyers 14

AHP To Fund 25 Initiatives 15

2002 AHP Round II Awards 16

Student Competition LetsDevelopers Explore Options 20

Beginning with the first funding round of the 2003, the Federal Home Loan Bank ofBoston will implement several changes to the way it administers the AffordableHousing Program (AHP) — including the introduction of a new subsidy program toassist home buyers (see page 14).

Those planning to submit an application in the first AHP funding round are stronglyencouraged to attend a free AHP training session. To reserve a space, register onlineat www.fhlbboston.com.

Wednesday, February 26Portland, Maine

Wednesday, March 5New Haven, Connecticut

Tuesday, March 18Boston, Massachusetts

Wednesday, March 19Farmington, Connecticut

Thursday, March 6Boston, Massachusetts

Tuesday, March 11Providence, Rhode Island

Wednesday, March 12Lebanon, New Hampshire

T O O L S F O R H O U S I N G A N D C O M M U N I T Y E C O N O M I C D E V E L O P M E N T ■ 3

“I live in Trumbull. And we don’twant this project.”

Such was the welcome Elisabeth Young-erman received when she visited thelocal mall to spread the word aboutTrumbull Townhomes, 43 affordablecondominiums being built in the afflu-ent suburb, Trumbull, Connecticut.

“I went to the Trumbull Mall becauseit is a big employer in Trumbull,” re-calls Ms. Youngerman, who is adevelopment consultant to MutualHousing Association of SouthwesternConnecticut, Inc. (MHA), the develop-er of the townhouses.

It seemed an inauspicious start for themarketing campaign of the second hous-ing initiative to be developed underConnecticut’s Affordable HousingAppeals Act. However, MHA wouldprevail over this and other setbacks,proving that there’s much to be said forthe value of persistence.

A TumultuousBeginningPlanning for Trumbull Townhomes be-gan in 1993, when MHA first executedan option on a vacant 5.9-acre site. Aformer plant nursery, the property backsup to a day-care center and is borderedon two sides by denser single-familyneighborhoods. “If you’re going to domultifamily housing in Trumbull, it’sthe perfect site,” says Larry Kluetsch,MHA’s executive director.

Shortly thereafter, MHA submitted azoning application to the local Planningand Zoning Commission for a “Hous-ing Opportunity Zone” to allow for theconstruction of affordable housing. Theapplication was filed in accordancewith Connecticut’s Affordable HousingAppeals Act, legislation enacted in 1989to open up suburban towns to afford-able housing.

Persistence Pays OffAfter Nine Years,Connecticut’s Trumbull Townhomes Triumph

Under the act, developers denied theopportunity to build affordable housingby local authorities may appeal the lo-cal rejection in court. A judge must thendetermine whether a town’s reason fordenial “clearly outweighs the need foraffordable housing.”

“It was very hostile, very against afford-able housing coming into the suburbs,”says Mr. Kluetsch of Trumbull’s initialreaction to the proposed development.He cites concerns about how multifam-ily housing would change the town’scharacter and the development’s possi-ble impact on schools as foremostamong the complaints.

The town rejected the Trumbull Town-homes application, and MHA appealedthe decision. After a lengthy series ofhearings and appeals, wetlands and site-plan approvals were completed in 1998.A year later, final approval for a site plancontaining 50 units was guaranteed byConnecticut Superior and AppellateCourt decisions.

Growing AcceptanceMr. Kluetsch says the town’s outlook onTrumbull Townhomes eventually“changed dramatically.” Key to this wasMHA’s decision to make the 50 unitscondominiums instead of apartments.

Says Ms. Youngerman: “In the end, wedecided that Trumbull is a town of homeowners; it’s not a town of renters.”

Shortly thereafter, the town’s first select-man approached MHA.

“Ken Halaby, being very forward-looking, approached us and said, ‘Canwe work something out?’ They (thetown) then asked us to slightly reducedensity,” says Mr. Kluetsch. “In ex-change, they said they wanted us to buildmore affordable housing.”

MHA agreed to reduce the number ofunits in Trumbull Townhomes from 50to 43, and the town donated a vacantparcel that MHA is now developing into39 units of affordable senior housing. ➤

Ruth Price (left), CRA officer for People’s Bank, and Elisabeth Youngerman (right), development

consultant to Mutual Housing Association of Southwestern Connecticut, visit with Trumbull

Townhomes resident Frank Delbouno (center) in his new two-bedroom townhouse.


Mr. Kluetsch also credits the develop-ment’s complete affordability withhelping to win over the town.

“What has sometimes happened under[the Affordable Housing Appeals Act]is that, under the guise of affordablehousing, some for-profit developers havebeen able to build housing that is only25- or 30-percent affordable.” He notesthat because of the area’s high medianincome, even units deemed “affordable”often aren’t for low-income households.“An affordable rent might be $1,200 fora two-bedroom unit.”

Continues Mr. Kluetsch: “So I thinkthere was a sense [in Trumbull] that‘OK, we really do want affordable hous-ing. If we’re going to do this, if this isgoing to happen, let’s do this together,let’s do it right.’ Because the stickershock around Fairfield has really got-ten to people. A $300,000 home is reallyhard to find. Everyone knows relativesor children or employees or new teach-ers or others who simply cannot affordto live in Trumbull.”

Also a possible motivating factor for thetown’s acceptance is a moratorium tothe Affordable Housing Appeals Act.The moratorium allows towns that showprogress toward affordable housing toreceive exemption from the act for sev-eral years.

“I was concerned about that (the mora-torium) coming in,” says Mr. Kluetsch.However, he notes that the moratoriumseems to have created an incentive fortowns to promote affordable housing.

Holding the FinancingTogetherPutting financing together for a devel-opment under litigation proved achallenge.

“You can’t finance something that’s notapproved,” says Ms. Youngerman. “Wewere really fortunate. A group of doc-tors owned the property. They hadoriginally intended to develop doctors’offices but were not successful in thezoning process. We gave them an annu-al payment to renew the option, and they

kept it in place for us.” (The MelvilleCharitable Trust provided the funds forMHA to renew the option.)

Further helping to ease the predevelop-ment financial constraints were lawyerTim Hollister of Shipman & Goodwinand architect Henry Shadler, who bothoffered MHA flexible payment schedules.

In 1998, MHA began formally apply-ing to financing programs. “We werecoming to the end of the hearings andwhat was going to be the final site plan.

We were negotiating with the town,”says Ms. Youngerman. “At that point,we would get in line for tax credits andthe state would take away our HOMEfunds. It was a very difficult process untilthere was a final plan.”

A $250,000 grant from the FederalHome Loan Bank of Boston’s Afford-able Housing Program (AHP) andfunding from Neighborhood Reinvest-ment Corporation helped stabilize thefinancing plan.

Top photo: The McKee children with one of their pets in their new home. Bottom photo:

Trumbull Townhomes was the second housing initiative to be developed under Connecticut’s

Affordable Housing Appeals Act. The price of the most expensive condominium unit is less than

half the price of the average home in affluent Trumbull.


Making Fair HousingMeaningfulBY ELISABETH YOUNGERMAN

Trumbull, Connecticut has a populationof 34,000 and a median household in-come of $79,500. Only five percent ofits households are classified as minor-ity and less than two percent have in-comes below the poverty level.

Of the 43 low- to moderate-incomefamilies moving into TrumbullTownhomes, eight are black, two areHispanic, and five are Pacific Asian.Other families are from South Asia andEastern Europe.

Many times, Fair Housing Plans aresomething you just submit with a fund-ing application. But the thought yougive them makes all the difference increating a great community.

We started by marketing to groups inGreater Bridgeport that might attractlow-income people who could be homeowners with our support. Carol Sydnor,MHA’s director of homeownership, de-veloped an orientation program for pro-spective buyers, and we held it at placeslike Career Resources in Bridgeport.

We also called all the employers inTrumbull. We could not get one to letus hold seminars. So we sent informa-tion packages and asked them to putup flyers in their cafeterias. It was veryhard to explain affordable housing tohuman resources officers.

I went to the Trumbull Marriott. Thechef, who happened to be out front,took flyers back to the kitchen andpassed them out to the employees.

I heard a radio interview with a womanwho runs a program for schools inTrumbull and neighboring suburbs thattakes kids from Bridgeport. I called her,and she took information packages forall of her families.

What we learned is that many of thepeople who work in Trumbull live inBridgeport. So it takes a lot of legwork.It’s not a telephone thing. To make FairHousing meaningful, you have to getin the car, you have to walk and talk withpeople.

We also strove to keep the applicationprocess very positive. We concentratedon one thing: What is the message ofTrumbull Townhomes? For many of thenew owners, living in Trumbull is achance to live without crime, to sendtheir children to excellent schools, andto experience the joy of living in a di-verse community of eager families. ◗

Elisabeth Youngerman is a developmentconsultant to Mutual Housing Association ofSouthwestern Connecticut, Inc.

.

“The AHP is not the major piece offunding all the time, but it’s the criticalone that makes it work. It’s flexible andpredictable,” says Ruth Price, presidentof MHA’s board and the CRA officerfor Bridgeport-based People’s Bank,which applied for the grant in RoundTwo of the 1998 AHP.

“AHP grants and subsidized advancesare so critical because we get them earlyon in the process,” adds Mr. Kluetsch.“Without them, it would make it a lotharder to do this. Not just because itwould be more expensive, but becausethe timing is so critical.”

In addition to securing the AHP grant,People’s Bank provided $4.5 million inland-acquisition and construction loansand some of the buyers’ mortgages.“Affordable housing is a critical issue.We’re wanting for it very badly in Con-necticut. And there’s not enough of iton a regional basis. So anytime there’san opportunity for it in a suburban set-ting, it’s most welcome,” says Ms. Price.

Rewarding ResultsFor MHA, the development of TrumbullTownhomes has been a long strugglewith a happy ending.

By the end of January, 43 ethnically di-verse, low- to moderate-income homebuyers will be living in their new town-houses. The price of the most expensivecondominium unit at Trumbull Town-homes is less than half the price of theaverage home in Trumbull.

The buyers have completed prepurchasecounseling and soon will participate ina course designed specifically for new

owners of condominiums. The majoritycome from communities outside Trum-bull, and almost all are first-time buyers.

“At least half of the households havesome connection to Trumbull: they ei-ther lived in Trumbull and couldn’tafford to stay, are a family member (ofa Trumbull resident), or work in Trum-bull,” says Mr. Kluetsch. “Whensuburbs look at this (affordable hous-ing), they say, ‘Well, we want it just forus, suburb people.’ And we say, ‘Wecan’t do that. We have to do Fair Hous-ing.’ Here, we hit all the notes. We havegreat diversity, and we also brought thetown an asset for the connections thatare there.”

The success of the development alsobodes well for the state of affordablehousing in Trumbull.

“If you go back to 1993, there were sev-eral hearings where we might have had300 people coming out virtually unani-mously against it,” says Mr. Kluetsch.“All the fears that were expressed turnedout to be unfounded. The developmentlooks great. It looks like upscale hous-ing, which is always our objective.”

As for how this has changed MHA’s re-lationship with the town?

“We’re part of the Affordable HousingCommittee in Trumbull now. The newfirst selectman, Raymond Baldwin, isalso super-supportive,” says Mr.Kluetsch. “It’s a great working relation-ship, from the tax collectors to theBuilding Department to all of the com-mittees. So we’re hoping to do even morehousing — even after we finish up thesenior housing.” ◗

Resident Denise Hunter and her daughter take

a break from unpacking.

Trumbull Town Hall.


When Mary Robinson suffered sev-eral serious health problems anumber of years ago, she movedfrom Atlanta to her native Boston to beclose to her son and sister.

“I had two strokes and a heart attack,”says Ms. Robinson, who had been liv-ing in Atlanta for the last 20 years. “SoI needed some assistance in living.”

Not long after returning to Boston, shelearned about the planned opening ofthe Ruggles Affordable Assisted LivingCommunity, a 43-unit home for frailelders located just outside of DudleySquare in the Roxbury section of Bos-ton.

“One of my friends was telling methey had assisted living here at the oldLafayette School,” says Ms. Robinson.“It seemed interesting and sentimental,so I decided I’d take a look at it.”

Sentimental, she notes, because she hadattended the Lafayette School for sever-al years in the early 1940s and had livedjust a few blocks away from it.

Opened in the fall of 2001, Ruggles Af-fordable Assisted Living is home to Ms.Robinson and other elders who requiredaily assistance with their health but donot want to live in a nursing home.

The facility is the brainchild of PamelaShea, president and founder of New Com-munities Services, a nonprofit developerof affordable housing and other programsfor elders, and Peter Roth, president ofNew Atlantic Properties, a for-profitdeveloper of affordable housing.

Ms. Shea and Mr. Roth had earlier col-laborated on several projects and theidea of developing an affordableassisted-living development in Bostonappealed to both of them, especiallysince almost all assisted-living facilitiesin the state concentrate on providingmarket-rate housing.

After years of planning, their visionwas finally realized. In the fall of 2001,

Breaking New Ground WithAffordable Assisted Living

Arlan Crosby and Mary Robinson outside the Ruggles Affordable Assisted Living Community, a

43-unit home for frail elders in Boston’s Roxbury section. The fully affordable assisted-living

facility serves elders who require daily assistance with their health but do not want to live in a

nursing home.

Boston saw the opening of a much-needed but rare facility: an assisted-living development in which every unitis affordable.

Ms. Shea says she realized there was agap in services for low-income eldersthrough her work with the elderly. “Peo-ple ended up in nursing homes whenthey needed a little more care becausethere was no assisted housing for low-income people,” she says. “The primarypurpose of Ruggles was to try and pro-vide that continuum of care.”

Although it wasn’t easy for them to finda suitable site, Ms. Shea and Mr. Rotheventually discovered the old LafayetteSchool, an elementary school that hadbeen closed years ago and was ownedby a bankrupt mechanical contractor.“We were able to work through theprocess and gain control of the build-ing through one of the creditors,” saysMr. Roth.

To make such an affordable facility pos-sible, the developers had to make surethat the construction stage of develop-

ment was fully capitalized through pub-lic debt and equity. “That way we wouldnot have debt that had to be serviced inthe operating phase of the project,” saysMr. Roth.

To get the initiative up and running, thedevelopers pieced together some creativefinancing from a patchwork of afford-able-housing programs, including LowIncome Housing Tax Credits, BostonCommunity Development Block Grantfunds, HOME funds, and HIF funds.

Another key ingredient was a $250,000Affordable Housing Program (AHP)grant from the Federal Home Loan Bankof Boston.

“It takes a tremendous amount of re-sources to do these projects the rightway, and the AHP program oftentimesis the last piece that fills the gap to makea project work,” says Mr. Roth.

“The Federal Home Loan Bank was per-fect,” adds Pamela Feingold, senior vicepresident / community developmentlending, for member Wainwright Bank


& Trust Company, which applied forthe AHP grant on behalf of the initia-tive and also purchased the Low IncomeHousing Tax Credits. “It allowed us toclose the deal and get all the financingsources.”

Because Low Income Housing Tax Cred-its were involved, the developers wereunder pressure to have the financing inplace by a specified date. “We were un-der the gun to find the money, and theFederal Home Loan Bank of Boston al-lowed us to do that,” says Ms. Feingold.“We’ve really relied very heavily on it.It’s been a great partnership.”

But locating financing to get the facilityup and running wasn’t the developers’only challenge. Because the facility isn’trelying on market-rate units to supportthe cost of building affordable ones, theyhad to ensure that long-term fundingwould be available.

In market-rate assisted-living facilities,the residents or their families either haveenough income to pay for the services

or else have health insurance that cov-ers such expenses. “But for low-incomepeople, we have to put together a wholebunch of programs, some of which fitand some of which don’t,” explains Ms.Shea. “It’s really complicated — morecomplicated than we expected.”

Because of this complexity, Ms. Sheabelieves the financial-managementstructure needs to be fine-tuned. “Ifwhat Medicaid is talking about is keep-ing people in the community, thenthey’re going to have to figure out a wayto have a payment mechanism to dothat,” she says.

Clockwise from top left: The Ruggles Affordable Assisted Living Community was formerly the Lafayette School, which at least one resident

attended in the early 1940s. The development is located close to Roxbury's Dudley Square (in photo). Trees in a community garden brighten the

view from a door at Ruggles Affordable Assisted Living.

Elisabeth Babcock, president and CEOof the Committee to End Elder Home-lessness, a development partner and themanager of the facility, notes that nurs-ing homes are more expensive to operatebecause they’re licensed as health-carefacilities, which require higher paymentsfrom Medicaid and Medicare to coverthe cost of more sophisticated equip-ment and resources.

Ms. Babcock points out that 48 percentof Ruggles’ residents were living inmore costly nursing homes before theirarrival at the Roxbury facility. Thoseresidents neither wanted nor neededto be in a nursing home but wereliving there because there wasn’t analternative. Ruggles, she adds, providesa more desirable and cost-effectivealternative.

“We’re doing this very much as a pilot,”she says. “We’re really starting to talkwith legislators and administratorsabout the possibility of replicating this,because it represents such a significantwin in Medicaid savings to the state.” ◗

We were under the gun to

find the money, and the

Federal Home Loan Bank of

Boston allowed us to do that.

—PAMELA FEINGOLD

SENIOR VICE PRESIDENT

WAINWRIGHT BANK & TRUST COMPANY


Responsible Development continued from page 1

conservation. Closing the symposiumwas Don Chen, founding director ofSmart Growth America, who shared anational perspective on smart growth.

According to the Citizens’ Housing andPlanning Association, smart growth em-bodies the latest thinking about how toharness the positive aspects of growthwhile minimizing its negative impacts.

Smart growth actively promotes efficientland use through the development ofhigher-density communities that includehousing, businesses, shops, and civic andopen spaces. Such land use encourageswalking, reduces the need for driving,supports public transportation, and min-imizes the loss of open space. Smartgrowth also seeks to make use of exist-ing infrastructure by rehabilitating

Michael A. Jessee and Don Chen

DON CHEN, DIRECTOR, SMART GROWTH AMERICA

There’s a serious sprawl problem in all parts of the country,

but New England has some inherent advantages over other

parts of the country. Many of its regions were built centuries

ago and have more concentrated downtown areas. But I

would say every metropolitan area in New England without

exception is currently following the typical pattern of sprawl

that other regions in this country are following.

I think there are systemic causes of the problem. One of them

is public policies that favor development in new areas over

reinvestment in existing areas. Celebrated Boston-area

neighborhoods such as Back Bay would be illegal to build

now because of current planning and zoning requirements.

Taxpayers subsidize a lot of sprawl development. The gas tax

is collected from every taxpayer who drives a car, but it

generally benefits people living in exurban areas. The kinds

of infrastructure that have been built by our transportation

program generally don’t enhance the mobility of people living

within the city but tend to connect people from suburban

areas to downtown offices. Such radial infrastructure is more

for the suburban commuting population and less for intra-

city travel.

Smart-growth advocates nationwide are proponents of

affordable housing. If you promote more mixed-income

development, you’re more likely to have shorter commute

distances and times because people aren’t commuting from

isolated low-income areas to job centers.

A number of years ago, Vermont created an affordable-

housing and land-conservation trust fund. State affordable-

housing trust funds are one of the things that we’re really

pushing at Smart Growth America.

People often move to exurban areas because they can’t afford

housing in more established neighborhoods. Rather than

subsidizing lots of costly growth in the exurban areas, it’s

better to make sure people have adequate housing in

established communities. I think this will lead to less sprawl

and less haphazard growth in surrounding areas. This ensures

better access to opportunities and less vulnerability to

escalating transportation costs.

Consumer preferences are now beginning to shift. Baby

boomers are aging and many are demanding in-town living

with compact neighborhoods and the ability to walk to their

destinations — not only because they want a sense of

community, but also because their ability to drive is not as

good as it used to be.

I think the new federal transportation bill is going to be

critically important to housing providers and people who care

about revitalizing older communities. The bill will reauthorize

how the gas tax is used. This is an opportunity to link housing

and transportation through planning requirements,

development incentives, and so on.

Over the last 10 years, there’s been a trend to spend more

money for public transit, walking and cycling, and other

alternatives to driving. The demand for all those things is

increasing, but what will happen to the transportation bill is

really up in the air. Some people are predicting a greater

proportion of these funds is going to be spent on highways

and less money will be spent on things like transit and walking

and cycling.

A key to making communities more livable is to maintain

funding levels for alternative modes of transportation, which

reduce pressures on existing roadway systems. This is an

absolutely key thing people who care about housing ought

to set their sights on. Alternative modes provide people with

more transportation choices, including lower-cost options. ◗

Smart Growth:

A Regional and National Perspective


existing structures, cleaning and reusingcontaminated sites, and building on in-fill parcels.

What Is at Stake?Unplanned and uncontained develop-ment has many adverse affects, many ofwhich can already be seen throughoutour region.

The need for more affordable homesdrives families and individuals out ofurban areas and traditional centers andinto more remote areas. As homes arebuilt further and further out into rural

areas, residents must commute to jobsin other cities, shop in other towns, anddrive their children to school. There isless opportunity for interaction withneighbors or participation in communi-ty services.

Valuable farmland and natural habitatsare lost forever. Not only does this leadto the rapid demise of open space, but italso creates a physical separation in oursociety along socioeconomic lines.

Furthermore, as workers move out ofurban areas and traditional centers,businesses suffer. Meanwhile, tax dol-

lars must be expended on building newinfrastructure and schools in outlyingareas.

Although the stakes are high when itcomes to New England’s development,I’m happy to report that many commu-nity agencies, municipalities, and statesare already implementing creativeapproaches to smart growth. The sym-posium’s panel presented a variety ofinitiatives afoot in the region. ➤

Creating a Marketfor Authentic PlacesKIP (CHRISTOPHER) BERGSTROM, EXECUTIVE DIRECTOR,RHODE ISLAND ECONOMIC POLICY COUNCILI think one needs to make a market for city, town, and

village centers — for authentic places. Fortunately, I thinkthe market is there to be made; there are people now whoare tired of working and living in these kinds of emptyplaces — an office building on an interstate surroundedby tract housing. I think creative people, who make up anincreasing percentage of the workforce, don’t want to livein that kind of place; they want to be where there’s life, astreet, diversity, and a sense of place.Rhode Island is fortunate in some ways to have missed

out to a large extent on development in the 1970s, ’80s,and ’90s, because the prevailing architecture and urbandesign of those decades was pretty awful. It destroyedgreat places and made these kinds of non-places.What we have of quality of place is in part a consequence

of decades of good historic preservation and good landconservation. Now, we can build on that and use it toenhance our economic prosperity without losing whatmakes us distinctive.It doesn’t just happen; it takes leadership. The public sectormust use its development powers to show the way andto unleash the resources and energy of the private sector.In the past, the state’s approach to partnering with thelocalities has been very fragmented. There’s no oneplace that has as its focus and mission supporting adevelopment of place. We are now trying to bring all thosepieces together.There’s also a role for academic institutions, particularlythe Rhode Island School of Design, which is stepping up

to the plate to be a design resource for our localities andtheir efforts to nurture authenticity of place.The Providence renaissance is a classic example of this.

Providence is emerging as the hub of the creativeeconomy, and we want to fan that flame. In Providence,we have a group of folks who have come together in aninitiative to make the city one of the key hubs of thecreative economy nationally.The habitat for this is the city’s richly textured buildingsof scale with streets that connect and that are filled withplaces where people gather spontaneously to interact.The idea is to define a geography that links the city’sneighborhoods — the Jewelry District, the South Side,the West Side, Smith Hill — to create a multifaceted,unified place animated by a vibrant economy of scienceand the arts.

For a place to be authentic, it also needs to be diverse.Places where everyone has the same income, the sameoccupation, the same race or ethnicity, become unreal.Mixed places are real places, and affordable housingneeds to be a dimension of this. Affordable housing givesmixed-use places vitality and life; it makes them wholeand vital and authentic.Affordable housing needs to be repositioned as a pillarof place rather than as something done strictly for socialequity or other reasons. Taking this approach will givepeople a more compelling reason for supporting it. ◗


• Vermont retooled its tax policy sothat property taxes no longer fundthe cost of public schools. Manysmart-growth advocates cite stan-dard tax policy as a major engine be-hind sprawl, as it makes municipali-ties dependent on local propertytaxes and creates competition forhigh-tax-value land uses.

• Connecticut’s transportation policy isevolving in the context of the state’simportance as the gateway betweenNew York and the rest of New En-gland.

• Rhode Island’s “Places” strategylinks economic development andsmart growth by capitalizing on the

state’s history, cultural centers, natu-ral resources, and colleges to drawand retain the creative workers thatare essential to the state’s economichealth.

• Maine’s land-use policies acknowl-edge that people and businesses havethe right to choose where to live oropen a business. However, peopleand businesses are now more respon-sible for the cost of their decisions.For example, owners of homeslocated away from the power gridmust pay the cost of the line exten-sion instead of having the hookupsubsidized by ratepayers.

Managing Growth in Maine

BY EVAN D. RICHERT, ASSOCIATE RESEARCH PROFESSOR,

UNIVERSITY OF SOUTHERN MAINE

Like every state in the union, Maine has a sprawl problem.

As much rural land was converted to development from

1970 to 1990 as in the previous history of the state.

The environmental impact is evident and the cost to state

and local governments, which have to build redundant

capital facilities, is in the millions of dollars annually.

It’s a problem especially in coastal, central, and southern

Maine.

Sprawl is driven, in part, by Americans’ desire to have a

house in the park — a house surrounded by private open

space — as a sign of the good life. Public subsidies help

drive that market desire since taxpayers often end up

paying for those private decisions.

When somebody moves from a place where there are

plenty of schoolrooms to a place where there are few, we

have to build a brand new school. When people move from

places where they have access to jobs and other

necessities to places where that access is more limited,

we build new roads. We subsidize utility infrastructure:

power lines, water lines, and sewer lines.

Since the 1970s, land-use regulations (municipal zoning

ordinances) have institutionalized sprawl as a favored

form of development by outlawing more traditional forms

of compact development, including the venerable New

England village and traditional neighborhoods.

Although there isn’t a specific tool in Maine to address

the issue of sprawl, one important tool is the state’s 1988

Growth Management Program, which is largely voluntary.

If a municipality wants to have zoning, it also needs to

have a comprehensive plan that is consistent with

statewide goals. Each plan has to have designated growth

areas and rural areas, where growth is meant to be

discouraged.

In 2000, the state amended the growth-management law

to require that state investments in office buildings,

courthouses, industrial parks, and other economic-

development activities go to designated growth areas.

We know that 35 to 40 percent of the home-buying market

would now prefer a traditional neighborhood setting if it

were available. We’re trying to work with municipalities

to reform zoning ordinances, and we’re working with

developers to assist them in preparing proposals for

traditional neighborhood development. The first couple

of these are in an advanced stage of approval.

One proposal is Dunstan Village, a 440-unit, mixed-use

development in Scarborough that contains ownership,

rental, and elderly housing, open space, and a commercial

component. Scarborough is largely a suburban town with

suburban-style zoning that requires large lots and very

little or no mixed use, so it will have to enact zoning

provisions to make this kind of development possible.

This is one of the impediments I talked about earlier,

but we’re slowly getting some of these projects off the

ground. ◗

Evan D. Richert


As I cannot convey the weight anddepth of all the information shared inso brief a column, I encourage you tovisit www.fhlbboston.com/smartgrowthto view many of the participants’ pre-sentations.

While much work for smart growth isalready being done, it will take partici-pation and cooperation on the local,state, and regional levels to preserveNew England’s most valued qualities. Iam encouraged that we are learning howto preserve and even recreate the senseof place that has always been unique toNew England.

I am proud that the symposium hasserved as a catalyst for discussion, and Ihope it leads to partnerships that willhelp our cities and towns grow respon-sibly and attractively for years to come.Moreover, member institutions can usethe Federal Home Loan Bank of Bos-ton’s Affordable Housing Program andCommunity Development advances tofund eligible infill development and oth-er creative initiatives related to smartgrowth. Together, we can promotehealthy, diverse communities through-out New England. ◗

This article was originally published in Banker &

Tradesman. Reprinted with permission.

Vermont Reforms itsTax PolicyBY DEBORAH BRIGHTON, VERMONT TAX-POLICY CONSULTANTI’m not sure that tax policy can control sprawl but I do

feel that the property tax in New England works againstour efforts to control it. I don’t think that changing taxpolicy is going to solve the problem, but it at least can bepart of the solution and take away some of the incentivesto do the wrong thing.Towns calculate the traditional property tax rate bydividing town and school expenditures by the tax base,so it follows, mathematically and politically, that the bestway to keep the tax rate down is to expand your tax base.At the local level, this has made the search for tax basemore important than smart growth and other planningissues.

The current property tax also pits towns against each otherto attract commercial tax base. If we want to strengthenour traditional centers, outlying towns shouldn’t becompeting with them for commercial development.The property tax may also fuel snob zoning. If towns want

high-quality schools or want to keep down their tax rates,they think they need to have expensive property on theirtax rolls. This provides an incentive to keep out affordablehousing and sets up a dynamic that leads to low-incomepeople living in one community and high-income peoplein another.

In reforming property taxes in Vermont in the late 1990s,we focused on the school tax, which in New Englandmakes up about two-thirds of the entire tax bill. Wedisconnected some of the links between land use and

school taxes by making the school tax rate dependent onper-pupil spending rather than on the tax base.Under the new plan, it doesn’t matter how wealthy or poor

your town is; if your town votes to spend $8,000 per pupil,for example, you’re going to have the same tax rate asyou would have in any other town — $1.74 per $100 ofmarket value. If your town doesn’t raise $8,000 per pupilwhen a tax rate of $1.74 is levied on all property, you willstill get $8,000 per pupil because the difference comesfrom the state’s Education Fund.If your town raises more than $8,000 per pupil with a taxrate of $1.74, you will get $8,000 per pupil and theremainder will go into the state’s Education Fund. Land-use changes, which may make multimillion-dollardifferences in the tax base, will not change the school taxrate that you pay — unless they change the spending perpupil.

The property-tax reform in Vermont was directed at equity— not smart growth — but the two issues are connected.When you’re doing something like changing the taxstructure, I think it’s important to think through all theimplications so that you’ll be dealing with land-useimplications at the same time you’ll be addressingeducational-equity issues.Reforming the school property tax eliminates about twothirds of the problems I mentioned earlier, but it stilldoesn’t stop people from sprawling. All it does is takeaway the tax incentive. ◗

Jeff Taylor, Deborah Brighton,

Beth Humstone, and Kip Bergstrom


Gerald and Sandra Carries on the steps of their new two-family house in Roxbury. Before purchasing their home through the Sargent Street

Homes initiative, the Carries and their four children lived with Gerald's mother, Marie Halverson (left).

Before Gerald and Sandra Carriesmoved to their new two-familyhouse on a quiet street in Roxburyin October, they were living at Gerald’smother’s home in the Dorchester sectionof Boston.

Although Gerald was happy living witha member of his own family, his fourchildren had to share a single room inhis mother’s house. The opportunity forGerald and Sandra to purchase theirown house made all the difference totheir children, aged 4 to 11, who nowshare three bedrooms and a large base-ment playroom.

The Carries, who are both hearing im-paired, purchased their new homethrough the Nuestra Comunidad Devel-

Member’s Use of Bank ProgramsEnhances Business and Community

opment Corporation’s Sargent StreetHomes initiative. A 13-unit ownershipprogram for very low- and low-incomeresidents — four with mental or physicaldisabilities — Sargent Street Homes wona $130,000 grant in Round Two of theFederal Home Loan Bank of Boston’s1999 Affordable Housing Program (AHP).

Applying for an AHP grant provided Bos-ton Private Bank & Trust Company withan opportunity to promote its communi-ty-outreach profile. It also allowed themember to further its business goals byproviding the Sargent Homes initiativewith a $1.5 million construction loan.

Since 1992, Boston Private Bank & Trusthas been awarded a total of 36 grants andsubsidized advances through the Bank’s

AHP, making its ongoing relationshipwith the Bank a key component of itsbusiness strategy.

“We view it as an extremely impor-tant relationship,” says EstherSchlorholtz, senior vice president andCRA officer at Boston Private Bank& Trust. “It’s a relationship that hashelped us to enhance and promote ourcommunity-investment programs aswell as manage our balance sheet us-ing the Bank’s lower-cost, fixed-ratefinancing.”

Ms. Schlorholtz points out that par-ticipation in the Bank’s AHP hascontributed to the member’s overallbusiness growth by providing accessto lower-cost funding for community-


strategy. The member’s exceptionalcommunity-outreach efforts recentlyreceived an outstanding CommunityReinvestment Act designation from theFederal Deposit Insurance Corporation,its federal regulator.

“It partly came about because of yearsof working very hard to try to achieveit, and also by strategically — and hope-fully wisely — using the many differenttools we have access to, one of whichis the Federal Home Loan Bank,” saysMs. Schlorholtz.

Use of the AHP and Community Devel-opment advances have made it possiblefor Boston Private Bank & Trust to com-pete to get high-quality community-related projects that are critical in theCRA process. “Federal Home LoanBank of Boston programs have helpedus support the housing, economic-development, and social-services workof the community organizations that wework with,” says Ms. Schlorholtz.

John T. Eller, first vice president / hous-ing and community investment at theBank, notes that since Ms. Schlorholtz’sarrival at Boston Private Bank & Trust

in the 1990s, she and the member havetaken advantage of the AHP and Com-munity Development advances, andworked hard to develop relationshipswith nonprofit sponsors in the Bostonarea. “The result is a stellar CRA rat-ing,” says Mr. Eller. “Communitylending is an important part of theirmission now.”

Most recently, Boston Private Bank &Trust Company received a $313,000grant and a $570,000 advance to fundthe Casa Familias Unidas initiative.The initiative creates apartments forvery low-income Latino graduates ofsubstance-abuse-treatment programs inBoston’s Roxbury neighborhood.

“The AHP funding is helping CasaFamilias Unidas provide transitionalhousing to people who are striving tostabilize their lives,” says Ms. Schlor-holtz. “It helps them during that reallysensitive time when they don’t havejobs and need to reintegrate backinto their families and neighborhoods.It also provides them with affordablehousing, which is virtually nonexistentfor them.” ◗

related initiatives while freeing up fund-ing for market-rate initiatives.

The member’s use of AHP grants hasalso given it a business edge in a highlycompetitive Boston marketplace. “It hasgiven us a real opportunity to compete,”she says.

Even if a developer is able to findattractive financing elsewhere, the mem-ber’s ability to bring in an AHP grantprovides a powerful advantage. “Theborrower looks at us and says, ‘Well,you bring in $250,000 or more in grantfunding and that helps us with ourbottom line, and so we’re going to gothrough our financing with you.’”

“Without that AHP grant we wouldn’tbe building our business and wewouldn’t be having the lending oppor-tunity, so it’s a very immediate effect,”she adds.

In addition to using the AHP, BostonPrivate Bank & Trust has made ampleuse of the Bank’s Community Develop-ment advance (CDA). “It is a reallyimportant resource for us because it al-lows us to offer match-funded, fixed-ratefinancing,” says Ms. Schlorholtz. “With-out it, we probably wouldn’t be ableto do much of this and wouldn’t becompeting for the business.”

Use of Bank programs has also been akey ingredient in Boston Private Bank& Trust’s Community Reinvestment Act

Without that

AHP grant we wouldn’t

be building our business

and we wouldn’t

be having the

lending opportunity,

so it’s a very

immediate effect.

—ESTHER SCHLORHOLTZ


BOSTON PRIVATE BANK & TRUST COMPANY

From left: Mark S. Zelermyer, the Bank’s assistant vice president / corporate communications;

Boston Mayor Thomas M. Menino; Robert Van Meter, executive director, Allston Brighton

Community Development Corporation; and Esther Schlorholtz, senior vice president and CRA

officer, Boston Private Bank & Trust Company, at the Hano Homes’ November ribbon-

cutting celebration. Boston Private Bank & Trust Company applied for a $105,000 AHP grant,

which helped Allston Brighton CDC acquire and rehabilitate 10 two-family homes to create

20 rental units.


The Federal Home Loan Bank ofBoston has made several changesto the administration of the Bank’sAffordable Housing Program (AHP).

The most significant of the AHP Imple-mentation Plan changes — which takeeffect in Round One of the 2003 AHP— is that 15 percent of the Bank’s an-nual AHP subsidy will now be set asideto fund a new home-buyer-assistanceprogram (see sidebar).

“Members will be encouraged to applyto the new Equity Builder Program toprovide mortgage-financing assistanceto very low- to moderate-income house-holds,” says David P. Parish, senior vicepresident / housing and communityinvestment at the Bank.

“Members can still submit mortgage-financing applications through thenormal competitive AHP rounds,” con-tinues Mr. Parish. “But they’ll find thatAHP scoring for ownership applicationsnow strongly favors those applicationsthat result in the production of newunits or the substantial rehabilitation ofexisting units.”

The AHP Implementation Plan alsonow caps subsidy funds for homeown-ership units under the competitiveAHP rounds to a maximum of $30,000per unit.

In Round Two of the 2002 AHP, fewpoints separated the highest scoring ap-plications (85.6 points) and the lowest(71.5 points). Because many applica-tions include mention of a residents’council to win points in the empower-ment category, the AHP ImplementationPlan has added language that better de-fines what is considered empowering.

“Does the residents’ council meet regu-larly with management to reviewmanagement issues, including mainte-nance, security, and residents’behavior?” asks Mr. Parish. “Or is itlargely dedicated to organizing social

New Subsidy Programto Assist Home BuyersIn April, member financial institutionswill be able to tap the Federal HomeLoan Bank of Boston’s new EquityBuilder Program to help low- tomoderate-income households purchasehomes.

To be funded using 15 percent of theBank’s annual Affordable Housing Pro-gram (AHP) subsidy, the new programwill provide down-payment, closing-cost, and rehabilitation assistance toeligible home buyers. Members willalso be able to use Equity Builder Pro-gram funds to provide buyers withgrants of up to $15,000 as well as tooffer matched-savings programs.

Eligible households are those earningno more than 80 percent of the areamedian income for the neighborhoodin which they are purchasing a property.To qualify for Equity Builder Programfunding, members must certify thatparticipating buyers have completed ahomeownership-counseling programconducted by a nonprofit counselingagency.

All owner-occupied units, includingcondominiums and cooperatives,qualify as eligible ownership units. Toqualify for Equity Builder Program fund-ing, members must ensure that eachunit purchased under the program issubject to a deed restriction, mortgage,or other legally enforceable retentionagreement that maintains affordabilityfor at least five years. Funds must bedrawn down and used for eligible pur-poses within 24 months of applicationapproval.

The Bank will begin accepting EquityBuilder Program applications in April,at which time the application will beavailable through FHLB Direct, theBank's online account-information andtransaction service. Members arestrongly encouraged to attend one ofthe Bank’s AHP Training Sessions (seeschedule on page 2) before applying.

The Bank’s Housing and CommunityInvestment Department and AdvisoryCouncil first began discussions aboutcreating a home-buyer-assistanceprogram in November of 2001. Theirmission was to support the residentiallending activities of the Bank’s memberinstitutions, while utilizing the expertiseof their nonprofit housing partners tocreate homeownership opportunitiesfor very low- to moderate-incomehouseholds. ◗

AHP Implementation PlanSees Changes

trips and recreational activities? The lat-ter will now receive fewer points.”

While the developer fee has traditional-ly been set at 10 percent, the Bank hasallowed fees of 15 percent in applica-tions that provide a satisfactoryexplanation for the increase.

“In Round Two of the 2002 AHP, wefound that none of the written documen-tation included in applications where thedeveloper fee was over 10 percent suffi-ciently justified the additional fee or theadditional subsidy,” says Mr. Parish.

The revised implementation plan returnsthe developer’s fee to a maximum of10 percent of development costs, net offee, with certain exceptions for initia-tives using Low Income Housing TaxCredits and some U.S. Departmentof Housing and Urban Developmentfunds. The plan also caps developerfees for mortgage-financing initiatives atone percent of the originated mortgag-es’ total.

“The issue of cost is a very importantissue and has a very public face to it,”adds Mr. Parish. “The Bank’s AdvisoryCouncil will be addressing the issue, andthe Bank will be working with NewEngland states to explore options tomoderate increasing costs in an era ofdecreasing subsidy.” ◗

Members will be

encouraged to apply

to the new

Equity Builder Program

to provide

mortgage-financing

assistance.

—DAVID P. PARISH


FEDERAL HOME LOAN BANK OF BOSTON


In December, the Federal HomeLoan Bank of Boston awarded $6.7million in grants and subsidies foradvances during the second fundinground of its 2002 Affordable HousingProgram (AHP). The awards will fund25 initiatives that will create or preserve414 affordable units. The winning initi-atives are detailed on pages 16 through19 of this issue of Tools.

As housing costs escalate at unprece-dented rates, the AHP continues toprovide options for the most needy res-idents of the New England states.

“Even in this era of rising costs, 72 per-cent of the approved units will serve verylow-income households,” says John T.Eller, first vice president / housing andcommunity investment at the Bank.

Round Two was also noteworthy for thesuccess of its ownership applications,which made up 47 percent of the totalunits funded.

Chittenden Trust Company provedthat persistence in applying for AHPfunding pays off. After applyingunsuccessfully for AHP grants in thepast, the Vermont member had twoapplications recommended for awardsthis round. Chittenden Trust won a$300,000 AHP grant to help fund theHomeland Homeownership Program –Very Low-Income Initiative and a$311,000 grant and $500,000 advanceto help fund the Preservation of Whit-comb Woods initiative.

“Chittenden was tenacious,” says LizNickerson, the Bank’s senior communi-ty investment manager for Vermont andNew Hampshire. “As members becomemore experienced, they become moreskilled at knowing what initiatives havethe greatest chance of being funded.”

Strong MunicipalParticipationAccording to Theo Noell, the Bank’ssenior community investment managerfor Connecticut, Round Two continueda trend toward significant municipal

AHP To Fund 25 Initiativesparticipation. “The Coffin Lofts initia-tive in New Bedford, Massachusetts, isa stellar example,” says Mr. Noell.

Collaborating with sponsor WaterfrontHistoric Area League of New Bedford,Inc., member Compass Bank for Savingswon a $307,709 AHP grant and a$1.45 million advance to help fund theacquisition and rehabilitation of threecity-owned historic properties to createa mixed-income, mixed-use develop-ment downtown. The development willinclude five units for very low-incomeresidents, six for moderate-incomehouseholds, seven market-rate units,support services, and ground-floorretail space.

“This initiative relied on strong cityplanning to focus on downtown revital-ization,” says Mr. Noell. “You have tomarvel at the level of city participation.”

Another initiative involving significantmunicipal participation is the Boxbor-ough Condominium Exchange Program.The program will provide down-payment and closing-cost assistance to16 very low- to moderate-income first-time home buyers. The buyers willpurchase condominiums in Boxbor-ough, Massachusetts. Submitted bymember Community National Bank, theapplication won a $200,000 AHP grant.

“The town realized it had an opportu-nity,” says Mr. Noell. “Almost half ofthe town’s housing stock is condomini-ums, and they chose to address theshortage of affordable housing.”

Providing for the Homeless“There is a tremendous need for hous-ing for the homeless,” notes Carmen

Gutierrez-Seales, the Bank’s senior com-munity investment manager for Maineand Massachusetts’ North Shore. “Threeof the projects approved in my area areserving the homeless in some way.”

Ms. Gutierrez-Seales also observes agrowing collaboration between non-profits and municipalities to developstrategies to increase the supply of af-fordable housing in Massachusetts citiessuch as Lawrence and Haverhill.

One example is the YWCA of GreaterLawrence’s Haverhill Street Transition-al/Permanent Housing initiative, whichwon a $169,634 grant and a $1,050,000advance to provide 20 rental units oftransitional and permanent housing andservices for women, teen mothers, andwomen with children.

Member Lawrence Savings Bankwill provide a construction loan andpermanent mortgage funding, while thecity of Lawrence will provide HOMEfunds. The initiative is part of the city’sConsolidated Plan to improve thecentral city.

Social-Service ProvidersLook to HousingAs housing costs expand and the econ-omy remains sluggish, affordable-housing developers are mountingincreasingly complex strategies to piecetogether the funding necessary to makethese initiatives happen.

“The complexity of the projects seemsto be increasing because of limitedresources,” notes Ken Willis, the Bank’ssenior community investment managerfor metro Boston, Massachusetts’ SouthShore, and Rhode Island.

“We’re also seeing the more traditionalsupportive services reinventing them-selves as housing providers.”

“Many social-service providers are deal-ing with the realities of the populationthey serve on a daily basis,” adds Mr.Eller. “The lack of affordable housingis one of the problems they confront.” ◗

Chittenden

Trust Company

proved that persistence

in applying for

AHP funding pays off.

Affordable Housing Program Approvals — Round Two 2002


Location: Fairfield County, ConnecticutMember: First County BankSponsor: Housing Development Fund of

Lower Fairfield CountyNumber and Type of Units: 29 ownership unitsAmount and Type of Subsidy: $313,000 grant

Location: Bridgeport, ConnecticutMember: People’s BankSponsor: Mutual Housing Association of

Southwestern Connecticut, Inc.Number and Type of Units: 6 ownership unitsAmount and Type of Subsidy: $313,000 grant

Location: New Haven, ConnecticutMember: Citizens Bank of ConnecticutSponsor: Fair Haven Development CorporationNumber and Type of Units: 6 ownership unitsAmount and Type of Subsidy: $313,000 grant

Location: Central and northern MaineMember: Banknorth, N.A.Sponsor: MaineStream FinanceNumber and Type of Units: 20 ownership unitsAmount and Type of Subsidy: $226,500 grant

HOUSING DEVELOPMENT FUND/ADOPT-A-HOUSE DOWN-PAYMENTASSISTANCE PROGRAM. Continuation of a home-buyer-assistance programto help 17 very low-income and 12 low-income households purchase homes.Home buyers will receive $7,000 to $10,000 in down-payment and closing-costassistance and be required to participate in prepurchase and postpurchasecounseling. First County Bank will provide over $4.9 million in mortgage loans.The AHP grant will be used for down-payment and closing-cost assistance.

ARMSTRONG COMMUNITY INITIATIVE. Acquisition and rehabilitation of ablighted property donated by the city of Bridgeport to create six three-bedroomunits for sale to first-time buyers. Four units will be sold to very low-incomehouseholds and two will be sold to low-income households. Buyers will receiveprepurchase counseling and ongoing budgeting assistance. People’s Bank willprovide $480,000 in construction and permanent financing. The AHP grant willcover architectural and construction costs.

FAIR HAVEN AHP HOMEOWNERSHIP INITIATIVE I. Rehabilitation of sixvacant, two-family properties in New Haven’s Fair Haven neighborhood. Eachowner-occupied building will contain a rental apartment. Owners will haveaccess to employment and educational services, receive prepurchase andpostpurchase counseling, and help design and manage the development.Citizens Bank of Connecticut will provide construction financing and purchaseConnecticut state housing tax credits to support the development. The AHPfunds will be used to pay soft costs and a developer’s fee.

SOFT SECOND FINANCING. A program to provide mortgage financing for20 very low-income, first-time home buyers in the state’s central and northerncounties. Participants will receive prepurchase and postpurchase counseling.Banknorth will provide $500,000 in permanent financing at a reduced rate ofthree percent. The AHP grant will be used for down-payment assistance and adeveloper’s fee.

YORK COUNTY AFFORDABLE HOMES PROGRAM. The seventh phase of ahome-buyer program to provide down-payment and closing-cost assistance to22 very low-income and 32 low-income households. Through this initiative,eligible households can purchase a new or existing house at 35 to 45 percentbelow median market rates. Participants can serve on the organization’s board.Kennebunk Savings Bank will provide up to $1.3 million in fixed-rate mortgagesat below-market rates. The AHP funds will be used for down-payment andclosing-cost assistance, as well as for soft costs.

BANGOR WATERWORKS. Rehabilitation and conversion of the historic BangorWaterworks Building to create a 35-unit facility for homeless youth. The sponsorwill provide social and economic services and help form a residents’ association.The city will fund the foundation and abutting river revetment as part of therestoration. Merrill Merchants Bank will provide construction and permanentfinancing. The Maine State Housing Authority, the Low Income Housing TaxCredit program, Katahdin Trust Company, and Machias Savings Bank will alsoprovide funding. The AHP grant and advance will be used to help payconstruction costs and to provide permanent financing.

WELLSPRING TRANSITIONAL HOUSING. Acquisition and rehabilitation oftwo existing multifamily properties to create nine transitional units for verylow-income men and women recovering from drug or alcohol addiction.Residents will receive counseling services and serve on a residents’ council.Merrill Merchants Bank will provide up to $280,000 in bridge-loan funds. TheAHP grant and advance will be used for acquisition and rehabilitation costs.

Location: York County, MaineMember: Kennebunk Savings BankSponsor: York County Community

Action CorporationNumber and Type of Units: 54 ownership unitsAmount and Type of Subsidy: $313,000 grant

Location: Bangor, MaineMember: Merrill Merchants BankSponsor: Shaw House, Inc.Number and Type of Units: 35 rental unitsAmount and Type of Subsidy: $313,000 grant and

$3,250,000 advance

Location: Bangor, MaineMember: Merrill Merchants BankSponsor: Wellspring, Inc.Number and Type of Units: 9 rental unitsAmount and Type of Subsidy: $150,000 grant and

$90,000 advance



GARRISON GROVE HOME OWNERSHIP PROJECT. Development of a parceladjacent to a city-owned playground to create 12 energy-efficient, modularhomes for very low- to low-income households. Participants will include schoolteachers, firefighters, and police officers. Bath Savings Institution will providea construction loan, and Maine State Housing Authority (MESHA) will providesite-acquisition funds and permanent mortgages. Coastal EconomicDevelopment Corporation will provide MESHA-funded soft-second-mortgagesubsidies for very low-income buyers. The AHP grant will be used for land-acquisition and infrastructure costs.

MASSACHUSETTS HOME OF YOUR OWN III. An initiative to help 15mentally and physically disabled people, including three homeless individuals,purchase homes. Operated by a coalition that includes CHAPA, the MassRehabilitation Commission, and the Departments of Mental Retardation andMental Health, the program will integrate the disabled into the housingmainstream. Citizens Bank of Massachusetts will provide participants with upto $200,000 in long-term mortgages. The AHP grant will be used for down-payment and closing-cost assistance, prepurchase counseling, and a developer’sfee.

DOWN PAYMENT ASSISTANCE. A program to provide down-payment andclosing-cost assistance for very low-income first-time home buyers. The sponsorwill provide buyers with adult-education services, computer training, andassistance to create small businesses. Florence Savings Bank and other bankswill provide 30-year, fixed-rate mortgages at a rate of 5.5 percent. The AHPgrant will be used for down-payment assistance.

IMANI HOUSE. Acquisition and rehabilitation of a blighted, city-donatedproperty to create nine apartments for very low-income elders in Boston’sDorchester neighborhood. The initiative will include a community room andcommercial space for a neighborhood social-services provider. Boston PrivateBank & Trust Company will provide the construction financing, and theMassachusetts Housing Partnership will provide permanent financing. Otherfunding includes state and city HOME funds. The AHP grant will pay for hardand soft construction costs associated with the residential space.

BOXBOROUGH CONDOMINIUM EXCHANGE PROGRAM. A down-paymentand closing-cost assistance program to help 16 very low- to moderate-incomefirst-time buyers purchase condominiums. Eight of the buyers will be very low-income households. The initiative will help convert market-rate condominiumsinto affordable housing with long-term affordability restrictions. Participantswill receive prepurchase and postpurchase counseling, condominium-association training, child care, and other services. Community National Bankwill provide over $1 million in mortgages. The AHP grant will be used for down-payment and closing-cost assistance, to which the town of Boxborough willadd $200,000.

VIKINGS LANDING VETERANS CAMPUS. Acquisition and rehabilitation oftwo buildings to create 29 single-room-occupancy units for very low-income,formerly homeless veterans. The Veterans’ Administration and the sponsor willprovide substance-abuse-recovery, medical, and mental-health services to theresidents. The Bank of Western Massachusetts will provide a $395,450construction loan. The AHP grant will be used for acquisition and constructioncosts.

Location: Brunswick, MaineMember: Bath Savings InstitutionSponsor: Greater Brunswick Housing

Development CorporationNumber and Type of Units: 12 ownership unitsDirect Subsidy: $313,000 grant

Location: Statewide, MassachusettsMember: Citizens Bank of MassachusettsSponsor: Citizens’ Housing and

Planning Association (CHAPA)Number and Type of Units: 15 ownership unitsAmount and Type of Subsidy: $185,178 grant

Location: Hampshire County, MassachusettsMember: Florence Savings BankSponsor: Valley Community Development

CorporationNumber and Type of Units: 6 ownership unitsAmount and Type of Subsidy: $184,500 grant

Location: Boston, MassachusettsMember: Boston Private Bank & Trust CompanySponsor: Veterans Benefits Clearinghouse

Development CorporationNumber and Type of Units: 9 rental unitsAmount and Type of Subsidy: $279,768 grant

Location: Boxborough, MassachusettsMember: Community National BankSponsor: Town of Boxborough/Boxborough

Housing BoardNumber and Type of Units: 16 ownership unitsAmount and Type of Subsidy: $200,000 grant

Location: Easthampton, MassachusettsMember: The Bank of Western MassachusettsSponsor: South Middlesex Opportunity Council,

IncorporatedNumber and Type of Units: 29 rental unitsAmount and Type of Subsidy: $300,000 grant



MONTAGUE CITY ROAD INITIATIVE. Acquisition and rehabilitation of anexisting duplex and construction of a new duplex to create four ownershipunits. Three units will be sold to very low-income first-time buyers and thefourth will be sold to an existing low-income rental tenant. Buyers will contributesweat equity and receive prepurchase and postpurchase counseling, computertraining, and day-care services. Greenfield Savings Bank will contribute a $2,500grant from its own funds. The AHP grant will be used for construction costs.

WEBSTER APARTMENTS. Acquisition and rehabilitation of a vacant propertyto create nine one-bedroom units for very low-income mentally disabledresidents and one unit for a live-in manager. Ground-floor commercial spacemay be leased by a nonprofit service provider. The state Department of MentalRetardation will provide case management, supported employment, and otherservices. Pentucket Five Cents Savings Bank will provide $600,000 inconstruction and permanent financing. The AHP grant and advances will beused for construction costs.

HAVERHILL STREET TRANSITIONAL/PERMANENT HOUSING.Construction of a centrally located residential facility to provide 13 transitionalunits and seven permanent apartments for teenage mothers and other womenwith children. Residents will help manage the property through a residents’advisory committee. Lawrence Savings Bank will provide a construction loanand a permanent mortgage, and the city will provide HOME funds. Other fundingsources include Low Income Housing Tax Credits, the state’s Affordable HousingTrust and Housing Innovations Fund, and MassDevelopment funding. First-flooroffice, meeting, and program space for residents will be funded by state andfederal funds. The AHP grant and advance will be used for architectural andengineering costs associated with the affordable units.

11 CHERRY STREET. Renovation of a vacant, century-old house adjacent toLynn’s historic Diamond District to create two condominiums for very low-income households. Lynn Economic Development transferred the property tothe sponsor at a significant discount and will provide services and resources tothe new owners. Metropolitan Credit Union will provide a bridge loan to enablethe sponsor to start construction while continuing to raise funds for the initiative.Buyers will provide sweat equity, participate in the design phase, and form acondominium association for long-term management. The AHP grant will helppay construction costs.

THE COFFIN LOFTS. Acquisition and rehabilitation of three city-owned, historicproperties to create a mixed-income, mixed-use development on downtownland donated by the city. Five of the 18 loft-style apartments will be reservedfor very low-income households, six will be reserved for low- to moderate-income households, and seven will be rented at market rates. Ground-floorcommercial space will be used as a small-business incubator, and residentswill have access to small-business training, child-care services, and an on-sitecomputer-learning center. The AHP advance will be used to provide permanentfinancing, and the grant will be used for construction costs. Other fundingincludes city and state HOME funds, Community Development Block Grantfunds, and historic tax credits.

GARFIELD AVENUE INITIATIVE. Construction of three duplexes on city-donated land for sale to six very low-income first-time buyers. Participants willreceive prepurchase and postpurchase counseling, employment training, day-care services, and condominium-management training. Buyers will contributesweat equity and participate on the sponsor’s board of directors and outreachcommittees. Florence Savings Bank will provide a $60,000 construction loan.The AHP grant will be used for hard and soft construction costs.

Location: Greenfield, MassachusettsMember: Greenfield Savings BankSponsor: Pioneer Valley Habitat for HumanityNumber and Type of Units: 4 ownership unitsAmount and Type of Subsidy: $48,924 grant

Location: Haverhill, MassachusettsMember: Pentucket Five Cents Savings BankSponsor: Housing Support, Inc.Number and Type of Units: 10 rental unitsAmount and Type of Subsidy: $300,000 grant and

$600,000 in advances

Location: Lawrence, MassachusettsMember: Lawrence Savings BankSponsor: YWCA of Greater Lawrence, IncorporatedNumber and Type of Units: 20 rental unitsAmount and Type of Subsidy: $169,634 grant

and $1,850,000in advances

Location: Lynn, MassachusettsMember: Metropolitan Credit UnionSponsor: Habitat For Humanity —

North Shore, Inc.Number and Type of Units: 2 ownership unitsAmount and Type of Subsidy: $38,777 grant

Location: New Bedford, MassachusettsMember: Compass Bank For SavingsSponsor: Waterfront Historic Area League

of New Bedford, Inc.Number and Type of Units: 11 rental unitsAmount and Type of Subsidy: $307,709 grant and

$1.45 million advance

Location: Northampton, MassachusettsMember: Florence Savings BankSponsor: Pioneer Valley Habitat for HumanityNumber and Type of Units: 4 ownership unitsAmount and Type of Subsidy: $60,000



756 LOWELL STREET. Acquisition and rehabilitation of a leased property toprovide five single-room-occupancy units for clients of the MassachusettsDepartment of Mental Retardation. Dedham Co-Operative Bank will providepermanent financing. Additional funding will be provided by the MassachusettsDepartment of Housing Community Development’s Facilities Consolidation Fundand the Housing Stabilization Fund. The AHP grant will be used for acquisitionand construction costs.

SCHOOL STREET TRANSITIONAL FAMILY HOUSING PROGRAM.Rehabilitation of a deteriorated property to preserve housing for three verylow-income residents with mental disabilities or substance-abuse problems.Residents will receive comprehensive case-management services, training ineconomic self-sufficiency, and clinical-support services. Residents and theirfamilies will also participate in project management. Bristol County SavingsBank will provide a $98,432 construction loan. The AHP grant will be used forhard construction costs.

PROVIDENCE COUNTY RURAL HOMEOWNERSHIP PARTNERSHIP.A down-payment- and closing-cost-assistance program to serve six very low-income and four low-income first-time buyers. The U.S. Department ofAgriculture’s Rural Housing Loan Partnership will provide subordinate secondmortgages, the sponsor will provide prepurchase counseling, and the HousingNetwork’s Home-buyer Education Center will provide postpurchase counseling.Employment and child-care-business training will also be available toparticipants. Bank Rhode Island will provide $320,000 in first mortgages andreduced fees. The AHP grant will be used for down-payment and closing-costassistance.

RAU FASTENER MILL COMPLEX. Acquisition and rehabilitation of two vacanthistoric buildings in the city’s West End neighborhood to create 67 artist loftsand apartments, 22 of which will be affordable to very low- to low-incomehouseholds. This initiative is the first phase of a four-stage development torevive the buildings and the brownfield area that surrounds them. The sponsorwill enable residents to participate in management and will provide them withaccess to a community school, financial-counseling services, and a youth-entrepreneurs program. The AHP grant and advance will be used for constructioncosts.

HOMELAND HOMEOWNERSHIP PROGRAM — VERY LOW-INCOMEINITIATIVE. A program to provide grants to help very low-income first-timebuyers purchase homes. Washington County home buyers will receive $25,000grants, and Chittenden County participants will receive $28,000 grants.Chittenden Trust Company will provide $300,000 in end loans. The VermontHousing Finance Agency and the Vermont Housing Conservation Board willalso provide funding. The AHP grant will be used for down-payment assistance.

PRESERVATION OF WHITCOMB WOODS. Acquisition and rehabilitation ofan existing 65-unit housing development for very low- to low-income seniors.The development was at risk of being converted to market-rate housing.Residents will have access to nursing care, low-cost meals, and on-site servicecoordinators. Chittenden Trust Company will provide $1 million in equity throughLow Income Housing Tax Credits. The AHP advance will be used to fund apermanent loan, and the grant will be used to cover acquisition costs.

Location: Peabody, MassachusettsMember: Dedham Co-Operative BankSponsor: Riverside Community Mental Health

& Retardation Center, IncorporatedNumber and Type of Units: 5 rental unitsAmount and Type of Subsidy: $69,000 grant and

$70,000 advance

Location: Taunton, MassachusettsMember: Bristol County Savings BankSponsor: Community Counseling of

Bristol County, Inc.Number and Type of Units: 3 rental unitsAmount and Type of Subsidy: $50,000 grant

Location: Providence County, Rhode IslandMember: Bank Rhode IslandSponsor: Woonsocket Neighborhood

Development CorporationNumber and Type of Units: 10 ownership unitsAmount and Type of Subsidy: $313,000 grant

Location: Providence, Rhode IslandMember: Fleet National BankSponsor: West Elmwood Housing

Development CorporationNumber and Type of Units: 22 rental unitsAmount and Type of Subsidy: $313,000 grant and

$3,323,576 advance

Location: Chittenden and Washington counties,Vermont

Member: Chittenden Trust CompanySponsor: Vermont Housing & Conservation BoardNumber and Type of Units: 12 ownership unitsAmount and Type of Subsidy: $300,000 grant

Location: Essex Junction, VermontMember: Chittenden Trust CompanySponsor: Cathedral Square CorporationNumber and Type of Units: 65 rental unitsAmount and Type of Subsidy: $311,000 grant and

$500,000 advance


Whether a housing-development organization is thinking about de-veloping a particular site or just brainstorming about “what couldbe,” the Affordable Housing Development Competition may be agreat way to explore its options.

Sponsored by the Federal Home Loan Bank of Boston, Citizens’Housing and Planning Association (CHAPA), and the BostonFoundation, the third annual competition will pair local graduatestudents with Greater Boston housing professionals to developinnovative proposals for affordable housing.

Last year’s Affordable Housing Development Competition was agreat success, with seven development organizations either ex-ploring new initiatives or moving existing projects forward.

Receiving first prize in the 2002 competition was the Dudley SquareArtspace proposal by team members Martina Johnson, TeddyKapur, Ryunosuke Konishi, Fernando Rojas, and Alastair Smith.The team’s sponsor was the Madison Park Development Corpora-tion, with Project Manager Mark Dinaburg and Business DistrictProject Manager Tunua Thrash collaborating with the studentson the project. The developer and winning team split the first-place prize of $10,000.

The proposal was for a mixed-use development in Boston’sRoxbury/South End neighborhood to be created through the ac-quisition of an existing building and construction of a new one.Although the site is currently vacant, the parcels are slated for re-development.

The plan would create 25 units of new housing, including afford-able living and working loft space for artists, affordable elderlyhousing, and market-rate lofts. It also calls for the relocation andexpansion of an existing grocery store and the creation of newcommercial, office, retail, and gallery space.

“I definitely feel that the competition was very useful to us. It forcedus to think about things in a new way,” says Tunua Thrash. “I alsofeel that the competition and the students pushed us in a newdirection with the residents. The residents now expect us to comeback to them with new ideas that incorporate their vision. It justpushed us to be better developers.”

“The fact that this competition came at an early stage of our con-sidering the site made it very useful for us,” says Mark Dinaburg.“The students were able to flesh out ideas that had been hazy tous. We could see what things worked and what didn’t work. If wehad been further along, and had more fixed ideas, then their workmay have been a duplication and not as valuable to us.”

“Without the students, we would have been making deals withan architect to do this, partially on spec, partially for pay,” addsMr. Dinaburg. “I’m not sure he or she would have been able todevote the kind of attention to the project that the students did.”

Eligible OrganizationsUp to eight Greater Boston development organizations can par-ticipate in the 2003 competition. Eligible organizations are those

Teddy Kapu (left), student, Harvard University; Jeanne Pinado

(center), executive director, Madison Park Development

Corporation; and Mark Dinaburg (right), project manager, Madison

Park Development Corporation, worked together on the Dudley

Square Artspace, which won first place in the 2002 competition.

“Without the students, we would have been making deals with

an architect to do this, partially on spec, partially for pay,” says

Mr. Dinaburg.

Student Competition Lets Developers Explore Options

with experience developing affordable housing, including non-profit organizations, municipalities, and for-profit developers.

Proposals can feature rehabilitation or new construction, and befor ownership or rental units. Broader community-developmentinitiatives are encouraged.

Responsibilities ofParticipating DevelopersParticipating developers “provide” the real or hypothetical siteson which the proposed developments would be built, and eachdesignates one staff member to work with the student team.

As student teams will act as “consultants,” they must draw onthe development organizations’ expertise, both as developers andcommunity resources, as they draft their proposals. The desig-nated staff person should be readily available to help answer anyquestions or concerns.

Interested in Participating?Development organizations interested in participating in thecompetition should apply online in the How To Participate sectionof the competition Web site, www.fhlbboston.com/compete.They can also apply by calling Chris Norris, assistant director ofCHAPA, at 617-742-0820. ◗

David Parish, Senior Vice President

John Eller, First Vice President

Mary Ellen Jutras, Assistant Vice President

Liz Nickerson, Senior Community Investment Manager

Ken Willis, Senior Community Investment Manager

Theo Noell, Senior Community Investment Manager

Federal Home Loan Bank of Boston Housing and Community Investment Department 1-888-424-3863

Carmen Gutierrez-Seales, Senior Community Investment Manager

Rodney Peterson, Compliance Manager

Paulette Vass, Community Development Administrator

Holly Frades, Housing and Community Investment Assistant

Teressa Irby-Dempsey, Housing and Community Investment Documents/File Coordinator