Affordable Housing Development - Fall River, MA

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PROJECT NAME / ADDRESS:

Scattered-site housing in the Corky Row,
East Main, and Niagara neighborhoods.

NEEDS ADDRESSED:

Affordable housing for working families
Training and ongoing employment opportunities for local residents
Revitalization of blighted neighborhoods

PROJECT DESCRIPTION:

At the center of this comprehensive neighborhood revitalization strategy is the creation of 90 units of affordable housing through the gut-rehabilitation of 25 vacant and blighted buildings. The developer/contractor actively enlists local residents, providing training and ongoing employment. Completed units are targeted toward working families already living in the neighborhoods. The project utilizes both low-income housing and historic tax credits.

IMPLEMENTING AGENCIES:

The Cushing Companies, a private developer/contractor, is the driving force behind the initiative, with the support of the following:

City of Fall River Community Development Agency
Fall River Affordable Housing Corporation -a nonprofit organization, administers federal and state-funded low-interest loan programs, e.g., HOME Rental and Homeowner Rehabilitation, Rental Housing Acquisition, First-time Homebuyer Assistance, among others.
Commonwealth of Massachusetts Department of Housing and Community Development
Massachusetts Housing Investment Corporation
BankBoston Development Company
Niagara Neighborhood Association

FEDERAL LOANS:

Total $3,820,001
Commonwealth of Massachusetts HOME loan ($2,520,000)
City of Fall River HOME loan ($1,300,001)

PRIVATE SOURCES:

Total $10,144,880
Massachusetts Housing Investment Corporation equity ($5,003,569)
BankBoston Development Company equity ($4,966,696)
Citizens-Union Bank loan ($174,615)

CLIENT TESTIMONIAL:

"The workmanship in this home where I live is superb. I tip my hat to you."

Steve Elderkin, resident, addressing a gathering that included Massachusetts Governor Paul Cellucci and Fall River Mayor Edward Lambert

LOCAL CONTACT PERSONS:

George M. Hovorka, City of Fall River Community Development Agency
Robert N. Landry, Fall River Affordable Housing Corporation
Caleb C. Clapp, The Cushing Companies

BEST PRACTICE FEATURES:

Addressed a Critical Unmet Need: The fundamental goal of this project is to revitalize blighted neighborhoods through the creation of affordable housing for a population often overlooked - the working poor. Despite pockets of blight, there remains a stable core of long-time homeowners in these neighborhoods. This project removes the blight, creating in its place high-quality housing units spacious enough to accommodate families. At the same time, the character of these historic neighborhoods is preserved, because buildings are not simply torn down. They are painstakingly restored and, in fact, enhanced. Through gut rehabilitation, newly configured, lead-free, modern homes are created. This type of scattered-site rehabilitation is very rarely undertaken because it is costly and requires an enormous amount of effort. But it is precisely the type of attention distressed inner-city neighborhoods need to reverse decline and enhance their inherent strengths.

Innovative Approach: The project is structured in phases over several years. Each phase corresponds to a separate annual tax-credit application round. The first phase has already been completed; the second phase 60% complete; and the third phase has recently begun. The result of this phased approach is that the project maintains a steady momentum, and long-term construction jobs are created. The construction crews maintain a constant presence in the neighborhood, and each phase builds on the success of previous phases. In this way, block by block, the project is helping the community reclaim its neighborhoods.

Unique Program Features: A key component of this project is its local economic development initiative. There are two aspects. First, the construction work is carefully broken into bid packages that allow the participation of small, local subcontractors. In this regard, the developer works closely with local agencies to identify potential subcontractors, particular minority- and women-owned businesses. The second aspect is direct job creation through the Cushing Companies' own labor force. Cushing has been remarkably successful at enlisting local residents. Two of its senior staff members are experienced instructors who are prepared and willing to train workers. Currently, 85% of Cushing's 60-person workforce is made up of local residents. In addition, 85% of the workers are minority and 15% are women. This initiative builds the capacity of both local firms and local workers. And since the project will progress in phases over several years, it will be able to provide stable employment over time.

Exceeded Expectations: Since the first phase was conceived, the development team has succeeded in securing historic tax credits for several properties in the Corky Row neighborhood. These neighborhoods were developed last century as housing for mill workers. The faithful restoration, facilitated by historic tax credits, invokes the full richness of the communities' past significance while creating homes whose quality far exceeds modern standards.

Leveraging: This project has leveraged $3,820,000 in low-interest loans from city and state agencies by attracting almost $10 million in private equity from tax credits. This structure allows for a remarkably low level of permanent debt, which creates long-term stability and ensures permanent affordability. Furthermore, a low level of permanent debt will make the properties accessible to low-income first-time homebuyers at the end of the tax-credit compliance period.

Public-Private Partnership: This project represents the successful partnership between the City of Fall River, the Massachusetts Department of Housing and Community Development, and a private developer, the Cushing Companies. The project is located in Fall River's poorest neighborhoods, which have long been the target of the city's community development planning efforts. The city has recognized, however, the necessity of attracting a private developer to accomplish its goals. The Cushing Companies brings considerable expertise to Fall River, but it depends upon the city's long-term commitment to its scattered-site model of development. This commitment comes in the form of a wide range of support, not just financial. The city and other local agencies, for example, provide a referral network for potential subcontractors and tenants. Finally, the development team depends on the support of the Commonwealth of Massachusetts which has consistently reaffirmed its belief in scattered-site rehabilitation as a means to reverse the decline of older neighborhoods.

Worthy of Replicating:The tax-credit program is one of the most effective avenues communities have for bringing private investment to distressed neighborhoods. The program's benefits can be maximized where redevelopment reinforces the inherent strengths of the community. By focusing efforts on pockets of blight amid stabile properties, the positive effects spill over to the adjacent properties. Scattered-site redevelopment is costly, but the returns are community-wide.

CONTACT:

George M. Hovorka,
City of Fall River Community Development Agency, (508) 679-0131