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ARTICLE 10 (d) Project: Affordable Units Preservation-Judges Road/Pine Grove CPA Category: Community Housing Amount Requested: $1,048,000 Amount Recommended: $1,048,000 CPC Vote: (6-0) Project Description: Pine Grove Village, an older affordable housing development on Judges Road, is currently structured as a 40B co-op and consists of five low-income rental units and 11 units restricted to purchase by low/moderate income households. The development received its Comprehensive Permit through the Housing Appeals Committee in 1976 and was financed through the MassHousing 13A program. Both the financing and deed restrictions for the 11 units are set to expire in 2019. The units are also in need of major capital improvements but the co-op association lacks the funding necessary to complete such repairs. Prompted by the need for funding and the impending termination of the restrictions and financing, the co-op submitted a proposal to the Town in May 2016 which would allow the Town to purchase the expiring deed restrictions on those 11 units, acquire the five rental units (to be subsequently conveyed to the Lexington Housing Authority (LHA)) and provide renovation funds for the five acquired units. The proposal would also restructure the development from a co-op into a condominium. The proposal ensures that all 16 units will remain on the Town's Subsidized Housing Inventory (SHI). However, the terms of the proposal will negatively impact the current co-op owners because they place new resale price restrictions on each of the 11 units. A portion of the requested CPA funds is intended to compensate the current owners for such loss in value upon the individual sale of each unit. Funds will be held in escrow for this purpose and paid at the time of sale. Additional portions of the appropriation will be provided to LHA for the acquisition of the five current rental units and for interior renovations to those units. In return, the Town will receive an affordable housing deed restriction on these units. To the extent permitted by law, LHA will give preference to Lexington residents when renting the units. The deed restrictions for all 16 units will conform to the requirements under the CPA statute and will require approval from the Department of Housing and Community Development (DHCD). Project Goals and Objectives: • Preserve 16 units of affordable housing on the Town's SHI; and • Enable LHA to acquire five new rental properties and give preference to Lexington residents when renting the units. 12