Manchester-by-the-Sea, Mass.—Summer Street Condominiums and Apartments is a model for smart-growth, mixed-income developments in smaller communities. Completed in May, the $11.5 million development offers 21 rental units, 18 homeownership units and three retail spaces close to downtown and adjacent to a commuter-rail train station.

Extensive community outreach was critical to winning the transit-oriented development unprecedented support from this affluent coastal town.

After being approached by the Manchester Housing Authority to develop the 2.2-acre site in partnership with the nonprofit Manchester Affordable Housing Corp., Affirmative Investments, a Boston-based affordable housing developer, worked with the town through a “friendly 40B” process. More formally known as the Massachusetts Comprehensive Permit Law, Chapter 40B allowed the Boston-based affordable housing developer to secure the flexible zoning needed for the creative high-density plan. Although 40B often makes the news when towns feel it is being used in a coercive manner, Summer Street Condominiums and Apartments is an example of how the law can be used collaboratively with the community. “The town was very supportive, which was critical,” said David Ennis, president of Affirmative Investments. "Everything was done through numerous New England town meetings.”

Manchester-by-the-Sea provided $600,000 in proceeds from the sale of tax-exempt general obligation bonds to the housing authority for acquisition costs.

However, neighbors initially resisted construction on the blighted site. The parcel had been largely vacant except for a dilapidated apartment building and a rundown building housing a restaurant and a fish market.

“People were used to having nothing on that property and wanted it to stay like that,” said Ennis. “We involved neighbors in discussions about retaining walls, landscaping, and transitions to their property. We lowered height at one point to satisfy one set of neighbors. No one likes change. But we were respectful, and I think it worked out pretty well.”

To recreate Manchester-by-the-Sea’s historic village feel, the developers constructed six buildings: five townhouse-style structures containing several condominiums each and a building with 5,000 square feet of ground-floor retail space topped by four condos.

The three-story apartment building was renovated into 21 apartments, four of which have 10-year contracts for project-based Sec. 8 subsidy.

Units range in affordability from four apartments targeted to households earning no more than 30 percent of the area median income (AMI) to 13 market-rate condominiums that sold for approximately $500,000 each.

Five condominiums were sold to first-time homebuyers earning no more than 80 percent of AMI and were priced between $145,000 and $155,000. Four apartments were rented at market rates, and the rest were targeted to households with incomes no more than 60 percent of AMI. Monthly rents range from $628 for studios and $902 for two-bedroom units at the low end to $1,375 for the larger market-rate units.

In addition to the $600,000 from the town, the project tapped $1.7 million in tax-exempt bonds purchased by Wainwright Bank & Trust Co., $1.2 million in state and local HOME funds, $883,568 (or close to $1 per credit three years ago) in 4 percent low-income housing tax credit equity from Wainwright Bank, $500,000 from the state Housing Innovation Fund program, a subsidized loan through Wainwright Bank from the Federal Home Loan Bank of Boston’s Affordable Housing Program, and more than $7 million generated by the sale of the 18 condominiums.

The initiative's success has not gone unnoticed. The development won a state smart growth award and a Department of Housing and Urban Development HOME Doorknocker Award and also was recognized by the Sierra Club as one of 12 of “America's Best New Development Projects.”