Housing project eligibility restricted, to help Provincetown obtain aid

PROVINCETOWN − In a bid to harness more federal money, the Select Board on Tuesday unanimously endorsed a downward adjustment to the income limits for people who would rent apartments at an affordable housing complex planned for the former VFW site at 3 Jerome Smith Road.

The adjustment would mean that the developer, The Community Builders, can tap into more federal money to build the project under the auspices of the state Department of Housing and Community Development.

But higher-income residents will have to look elsewhere for housing.

The project will now include 13 units at 30% area median income (AMI), 32 units at 60% AMI, 16 workforce units at 80% AMI, and four units at market-rate or unrestricted. Instead of setting the AMI for the workforce units at 80 to 120%, as originally planned, developers have decided to cap those apartments at 80%.

"For me, while the proposed mix is not ideal, I would rather see us go with the proposed mix and use our funds that we have in the town coming in to leverage them into another project that will garner more units," said Select Board Chairman David Abramson during the Jan. 17 meeting.

Why was the change made to the income levels?

Capping the workforce units at 80% allows for those to be counted as low-income housing tax credits units and garner significant additional federal subsidy. Allowing for more access to federal funds subsequently reduces the amount the state would kick in to a level that is more likely to win funding without increasing Provincetown's contribution of $3 million, said Lindsey Gael, senior development project manager at The Community Builders, during a special Select Board meeting.

Additionally, four units have been moved from the 60% AMI tier to the 30% AMI tier.

Area median income is set by household size and calculated over a five-year period. In Barnstable County, 30% AMI ranges from $22,850 for a one-person household to $32,600 for a four-person household. Eighty-percent AMI ranges from $60,900 for a one-person household to $100,900 for a six-person household.

Median income is set at $115,600 in the county.

More:VFW sells property to Provincetown

Since the Select Board last reviewed the project budget in June, the project has seen cost increases and a reduction in funding resources, according to a memo from the developer.

That's resulted in a net increase of $1.5 million.

Prior to the vote, the project was at risk of not winning funding in the state's Jan. 19 funding round because the state subsidy request is too high. According to The Community Builders, construction could begin in early 2024.

Provincetown project competes for state funding

The Department of Housing and Community Development's deadline for the upcoming funding round application was Jan. 19, and the project was submitted in this round.

Competition for the funding rounds is fierce, according to The Community Builders. Around 50 affordable housing projects will compete in this upcoming round, with only half getting money.

The department chooses projects based on several factors, with one of the most important criteria being the amount of state money a project seeks.

The state agency typically awards a maximum of $100,000/unit in soft sources to a project. The development in Provincetown currently requires $13 million or $200,000/unit in DHCD soft sources — a level that would be highly unlikely to be approved and funded in this round.

More:Select Board rejects Provincetown fire chief's idea for VFW site

The change to AMIs will harness about $3.3 million in additional federal funds, according to The Community Builders, which will reduce the state soft subsidy request by $3.3 million. That results in a total request of $9.7 million or $149,000/unit in soft subsidy, which the developer called "hopefully an acceptable range" for the state agency, in a memo to the Select Board.

The increase in the number of 30% AMI units will also earn the project more points in the state's selection criteria.

Feedback from town officials

Vice Chairman John Golden said his biggest concern is "having a year-round working community in order to flourish."

Part of the idea of the Jerome Smith Road project was for teachers, police, fire department employees and others in that income range, Golden said. "With this change, will that take them out of the possibility of getting an apartment in this complex?" he said during the meeting.

A person at 65% AMI would earn just under $50,000, said Gael, saying that could include municipal employees, teachers, or teacher assistants. An individual looking to rent a studio apartment at 80% AMI would have an income of about $61,000.

"Unfortunately we have to work within the weird financing realities that we have. We kind of twist and contort to provide any housing at all, which is really the first key goal here. If there were a way to retain that 80 to 120% AMI tier, we would absolutely be pursuing that here," said Gael. "Our hands are tied to what resources are out there and available from the state."

Zane Razzaq writes about housing and real estate. Reach her at zrazzaq@capecodonline.com. Follow her on Twitter @zanerazz.

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This article originally appeared on Cape Cod Times: Redevelopment of old VFW site in Provincetown adjusted in bid for aid