Two significant affordable housing communities in Boston’s Chinatown will be preserved after receiving new funding.
The transactions aim to maintain affordability and finance extensive renovations for seniors and families living in the properties.
An affiliate of Beacon Communities is using $42.5 million inMassHousing financing and other funding sources to refinance the 161-unit Quincy Tower for low-income seniors and complete nearly $12 million in property upgrades.
The allocation of state and federal low-income housing tax credits (LIHTCs) by the Massachusetts Department of Housing and Community Development (DHCD) will extend the low-income affordability on all the apartments for at least 30 years. Additionally, all 161 units are subsidized by a federal Sec. 8 Housing Assistance Payment (HAP) contract for at least 20 years, reports MassHousing.
The Asian Community Development Corp. (ACDC) is using $16.6 million in MassHousing financing to refinance and complete $10 million in renovations at the 88-unit Oak Terrace Apartments for families. Additionally, the refinancing will add $2 million to the property’s replacement reserve to address deferred capital needs over the loan term.
Sixty of the 88 units at Oak Terrace will remain affordable in perpetuity. Thirty apartments are subsidized by a HAP contract for at least 15 years, and 28 units are rented at market rates.
“Chinatown is one of the most expensive neighborhoods in Boston and to be able to extend the affordability at Quincy Tower and the Oak Terrace Apartments is a tremendous outcome for the low-income senior citizens and families who have lived there for many years and who will now be able to live in those housing communities for many years to follow,’’ said Tim Sullivan, MassHousing executive director. “These two transactions are powerful examples of the success and the continued need for the low-income tax credit program. While the value of tax credits has dropped slightly recently, the program remains a very critical source of financing for affordable housing.’’
Sullivan noted a bipartisan bill currently before Congress would expand the LIHTC program by 50%.
“It is very difficult for working families and senior citizens to afford rents in Chinatown,” said Congressman Mike Capuano, who represents the region, in a statement. “Tax-funded programs are a vital and dynamic part of preserving our communities. Keeping rents affordable through low-income housing tax credits and Sec. 8 vouchers shows how the federal government can be an important partner in stabilizing communities.”
MassHousing originally financed the 16-story Quincy Tower when it was constructed in 1977. As that 40-year loan neared maturity, Beacon was committed to refinancing the property and extending the affordability. MassHousing provided a $21 million construction and permanent loan with a 4.29% interest rate and a $21.6 million bridge loan with a 3% interest rate.
DHCD provided $3 million in additional funding and also allocated state LIHTCs, which together with 4% federal LIHTCs, provided $15.3 million in financing for the transaction after syndication by the Massachusetts Housing Investment Corp. The transaction also involved a $4.4 million loan from The Life Initiative, a community investment fund created by Massachusetts-based life insurance companies, and $1.75 million in financing from the city.
“Chinatown has a strong real estate market with rising rents that make it impossible for our elderly residents to remain in the community without strong support of MassHousing and our other state and Boston partners. We are grateful that they provided the resources critical to preserving the long-term affordability of Quincy Tower,’’ said Gina Martinez, Beacon Communities’ development director for the project.
For Oak Terrace, MassHousing also provided a $12.5 million construction and permanent loan with a 4.29% interest rate and a $4.1 million bridge loan with a 3% interest rate. MassHousing originally financed Oak Terrace when it was built in 1995 and allowed ACDC to pre-pay its existing permanent mortgage with an 8% interest rate and refinance to the new rate of 4.9%.
The syndication of the tax credits by RBC Capital Markets Tax Credit Equity Group provided $8.43 million in financing to the transaction.
“Oak Terrace Apartments was the first affordable housing project that ACDC developed. At the time, Chinatown faced a dire shortage of affordable housing. After more than 20 years, affordable housing remains the top issue for Chinatown as residents face increasing pressure from gentrification and displacement. This refinancing will preserve an important affordable housing asset and will allow low-income families to remain in Chinatown and access the amenities, services, and opportunities this community offers,” said Angie Liou, ACDC executive director.
The Oak Terrace Apartments has 14 one-bedroom apartments, 32 two-bedroom apartments, 33 three-bedroom apartments, and nine four-bedroom apartments in a 10-story building with connecting three and four-story townhomes.
Among the renovations planned for the property are building envelope repairs, roof replacement, major systems replacement, kitchen and bathroom upgrades, window refurbishment, new flooring, common-area upgrades, and accessibility modifications.
