Chapter Adverse for Massachusetts Affordable Project
From HOUSINGFINANCE.COM, By Bendix Anderson: Bankruptcy protection is not the exclusive province of single-family detatched housing players, nor is it only striking down the once high-and-mighty profit-making organizations who populated home building.
The housing crisis, for what it is, is a leveler. Into its vortex is swept private and public, for-profit and not-for-profit, greed-fueled and virtue-inspired players alike.
If a local economy’s unhinged, it matters little that a condo project is pro-forma-ed for affordability vs. market rate. It will have too few takers nevertheless.
Affordable Housing Finance senior associate editor Bendix Anderson reports on one such case in Gloucester, Mass., where the wheels fell off an affordable project practically from the get-go.
The filing comes as no surprise to housing watchers. CAHO struggled for years to sell condominiums at its mixed-income Pond View Village property here, which started selling in August 2006, just as the condominium market began its collapse. See related article.
“The condo market softened, and we took our licks,” says Joe Flatley, executive director of Boston-based Massachusetts Housing Investment Corp. (MHIC), a major investor in Pond View.
CAHO planned to use the proceeds from the sale of 81 planned condos to help pay for millions of dollars of work the nonprofit did to prepare the long-vacant, historic LePage Glue factory for redevelopment, including 43 affordable rental apartments that are finished and fully occupied. Pond View was CAHO’s first development, though the local nonprofit was formed with help from Wellspring House, a respected Boston-based nonprofit affordable housing developer.
Housing’s crisis is not about the captains of home building who took pages out of Wall Street investment houses’ lessons in reckless avarice. It’s also about people who worked for decades to line up capital, entitlements, and community support to expand the housing stock for those with less wherewithal, and what’s happening to them as the economic corrects for its sins of profligacy.
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