information regarding preserving the affordability of the Fresh Pond Apartments

Fresh Pond Apartments PRESERVING AFFORDABILITY: WHAT HAPPENS IN 2020? EXPLAINING EXPIRING USE: Expiring Use properties in Massachusetts are properties that were developed by private owners with HUD-subsidized resources in the 1960’s through the 1980’s. In exchange for interest subsidies, rent subsidies, or both, these private owners agreed to affordability restrictions on the properties which kept rents affordable, lasting between 20 and 40 years. Expiring Use properties can be converted to market rents when the subsidy contract expires. Fresh Pond Apartments are currently subject to an expiring use restriction that has kept the rent affordable in these privately owned buildings. This restriction is set to expire on December 31, 2020. TWO KINDS OF SUBSIDIES: Fresh Pond Apartments currently has 2 kinds of subsidized units: Project-Based Section 8 (PBS8) units and Below Market Interest Rate (BMIR) units. PBS8 units have rents subsidized by HUD with tenants paying 30% of their household income (and the subsidy paying the difference up to the total rent amount). BMIR units have a pre-determined contract rent that is paid by the household (who are subject to certain income limits). In both models households are required to provide documentation and meet income and other eligibility requirements, however, BMIR unit households may be paying less or more than 30% of their household income (depending on the rate their rent was set at). WHAT IS HAPPENING TO PRESERVE AFFORDABILITY AT FRESH POND APARTMENTS? The City monitors the status of housing subject to expiring use restrictions, and works with tenants, owners, non-profit housing partners, advocates, the Cambridge Housing Authority, and other public lenders to create preservation plans to ensure continued affordability of expiring use properties in Cambridge. The City is currently working with the owner of Fresh Pond Apartments to preserve affordability in all 504 units. We are exploring preservation options and intend to have a plan in place before the current agreement expires. Through preservation, tenants will be able to stay in their homes and extend affordability protections for another 50 years. WILL RENTS CHANGE AFTER PRESERVATION? Households in PBS8 units will not see a change in their rent as a result of preservation. PBS8 tenants will continue to pay rents calculated at 30% of household income. Households in BMIR units may see a change in the amount of rent they pay, depending on the subsidy model after preservation. Some households will be subject to the voucher model of rent determination (30% of income), and some will pay a newly-determined “flat” rent ( a set rent, not based on a percentage of househoold income). As a result, BMIR tenants might experience an increase OR decrease in rent after preservation. OFFICE OF MAYOR SUMBUL SIDDIQUI | [phone removed] | ssiddiqui@cambridgema.gov