2012-04-02-CPC-ATM-rpt - Laserfiche WebLink

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ARTICLE 8 (g) Project: LexHAB Set-Aside for Housing Acquisition CPA Category: Community Housing Amount Requested: $500,000 Amount Recommended: $450,000 CPC Vote: (6-3) Project Description: LexHAB submitted a FY 2013 request for $500,000 in set-aside funds for the acquisition and/or creation of affordable housing units in Lexington as opportunities arise, rather than seeking funding after a property has already been identified. The units which LexHAB acquires or builds will be subject to specific standards (listed on the following page) set in place by the CPC and agreed upon by LexHAB and the Board of Selectmen. All units acquired with CPC funds will receive affordable housing deed restrictions, and will become part of the Towns Subsidized Housing Inventory (SHI). This is the second year that LexHAB has requested set-aside funds for affordable housing acquisition. CPA funding approved for FY 2012 was used to purchase a home at 1 Wilson Road, which is now under renovation by LexHAB. After review of this application, and in light of the fact that LexHAB will have approximately $45,000 left over after the purchase and rehabilitation of the Wilson Road home, the CPC voted to approve $450,000 for this application. Project Goals and Objectives: The goal of this project is to streamline the process by which LexHAB acquires and creates affordable housing units and receives State approval for them. Project Benefit: In the past, LexHAB identified a property, made a down payment and obtained a mortgage to purchase the property. It would then apply to the CPC the following November for an appropriation to retire the mortgage, and would wait until spring Town Meeting for approval of the funding. If approved, the funding became available July 1, but by that time, LexHAB had been carrying the property for several months. The average time between borrowing funds and completing the purchase was ten months, and the average mortgage interest which accrued during this lag time was $16,000. In addition, since tenants couldnt move in until the deed restrictions were approved and recorded, there was typically $4,000 lost in rental income to LexHAB (average rent being $400 per month). The former process, with its two closings, also resulted in higher than necessary legal fees. Up-front CPA funding, will enable LexHAB to move promptly to purchase properties and avoid costly and duplicative closings and legal fees.It will bring affordable units online in a cost-effective and timely manner and make them available as quickly as possible to the long list of applicants waiting for affordable housing in Lexington. Funding Request: The FY 2013 funding request to Town Meeting for this project is $450,000. Funds which are not expended in a given year may be carried over and used for affordable housing acquisitions the following year. 1 2