CAMBRIDGE, MASS.—Just-A-Start Corp. opened the doors to its latest aff ordable housing development in July after navigating the turmoil in the financial markets the year before.
Elm Place is the nonprofit's fifth low-income housing tax credit (LIHTC) development. When many developers needed to use the Tax Credit Assistance Program or the exchange program to get their projects done, Just-A-Start teamed with two local LIHTC investors.
Working with the Massachusetts Housing Investment Corp. (MHIC), a tax credit syndicator, the nonprofit secured about $2.2 million in LIHTC equity from BrooklineBank and Cambridge Savings Bank.
The deal is Cambridge Savings' first LIHTC investment and BrooklineBank's second, according to the development team.
The nonprofit was able to secure the investments because of its track record as a strong sponsor, says Peter Graham, Just-A-Start's director of housing development. It also has a solid history with Cambridge Savings Bank, which provided loans to several of the group's other developments and is the permanent lender for Elm Place.
The banks were critical in helping finance the approximately $7 million development.
The overall disarray in the LIHTC market and the small size of the 19-unit project made the deal one that could have been overlooked by larger investors, says Peter Sargent, director of capital development at MHIC.
MHIC is providing asset management services for both banks.
Although the project is small, Elm Place is significant in Cambridge, where developable sites are scarce and housing is costly. Median home prices in the city are more than $567,000, according to census statistics.
Elm Place stands out from the group's earlier projects because it is the first to feature a prominent retail component and to be built to Leadership in Energy and Environmental Design gold standards.
An infill project in Cambridge's Inman Square neighborhood, the development is built on a site that housed a hardware store years ago and was more recently home to an antiques co-op.
The team demolished the old building to make room for the new four-story Elm Place. The first floor includes a small commercial space, an office, a lobby, bike storage, and one residential unit.
“The development fits in well with the neighborhood and accomplishes many goals in the city, including securing aff ordable housing and providing economic activity,” Graham says.
In July, developers expected to have a commercial tenant soon.
The development's green features include solar panels that will help off set the energy costs of the common areas.
Elm Place has three onebedroom, 10 two-bedroom, and six three-bedroom apartments. Eight units are covered by Sec. 8 project-based vouchers from the Cambridge Housing Authority.
The LIHTC equity was the largest of several funding sources used to build Elm Place. The Massachusetts Department of Housing and Community Development provided loans totaling about $1.85 million, and the city of Cambridge provided a $1.8 million low-interest loan. The Local Initiatives Support Corp. and Enterprise Green Communities contributed $40,000.
Harvard University was also involved, providing a $1 million construction loan through its 20/20/2000 initiative, the institution's $20 million, 20-year eff ort to help finance aff ordable housing in the region. The funds were distributed by the city of Cambridge.