Late last year, the Codman Square Neighborhood Development Corp. completed the Talbot Bernard Homes/Senior Housing, two separate developments featuring a total of 75 affordable rental units in Boston’s Dorchester neighborhood. This year, residents living in the facility saw a reduction in their Section 8 rental vouchers, cutting the property’s income generation by $15,000.

Less than two years ago, a coalition of nonprofit community-based development groups unveiled an ambitious campaign to revitalize communities throughout Massachusetts. The goal: to create or preserve 3,000 homes and 5,000 jobs, start or expand 1,500 locally owned businesses, and attract $400 million in private and public investment to Bay State communities over a two-year period.

With about four months to go, the community groups are poised to meet most of the goals but could be falling short in one area: housing.

Community development corporations developed 580 housing units and renovated 496 homes in 2003 – less than half of the total target goal, according to a survey that the Massachusetts Association of Community Development Corporations, or MACDC, which was conducted early this year.

Significant funding cuts to programs that help CDCs, as well as rising construction costs and changes to the federally funded Section 8 housing program, have caused delays in some housing projects.

When setting the housing goals, MACDC – which initiated the revitalization campaign in November 2002 – anticipated that several large housing developments would be completed by the end of this year.

In Chinatown, for example, the Asian CDC completed the Metropolitan, a 251-unit project, this year, and another development in East Boston featuring more than 200 units is expected to be ready by year’s end. Yet, some projects that were slated for completion this year, including Egleston Crossing, a $17.5 million project in Jamaica Plain initiated by Urban Edge, have been delayed.

“Some of the projects that we had hoped would be [completed] in ’03, won’t come online until ’04 and I suspect when we get to the end of this year, we’ll find that some of the ’04 projects will slide into ’05,” said MACDC President Joseph Kriesberg.

In the case of Egleston Crossing, the 64-unit development was scheduled to be occupied by September but will probably be ready by January because of difficulties the city and developer encountered securing Section 8 housing vouchers.

The Boston Housing Authority ran into trouble providing the vouchers because, in prior years when the rental housing market was strong, the authority issued more vouchers than it actually had, expecting that some would be unused and therefore returned. But as the rental market softened and landlords with vacant units clamored to accept Section 8 voucher holders, the number of unused vouchers dropped. The housing authority ultimately depleted its vouchers and was told by the federal government that no more were available.

Because of the Section 8 dispute, the closing for the financing of Egleston Crossing was delayed about three months and was not secured until several months after construction had started, according to Urban Edge Executive Director Mossik Hacobian.

The delay actually put the project “at risk of dying,” according to Hacobian, but various city agencies stepped in to provide resources and make sure the project continued moving forward until the Section 8 issue was resolved.

Hacobian said despite such setbacks, Urban Edge has been working on more new housing units in the last few years than at any time in the organization’s 30-year history. “We are doing well in helping MACDC meet its campaign goals,” he said.

Another group that’s helping MACDC boost housing numbers is the Codman Square Neighborhood Development Corp. in Dorchester. Late last year, the organization completed the Talbot Bernard Homes/Senior Housing, two separate developments featuring a total of 75 affordable rental units in Dorchester. Thirty-one of the units are for seniors while the remainder are for families. The homes were fully occupied last year.

The Codman Square NDC also has about 170 affordable rental and homeownership units in the pipeline to be developed over the next 18 to 24 months, according to Gail Latimore, the organization’s executive director.

Among them is a proposal to develop 90 affordable units at the former Girls Latin School in Dorchester. The organization is currently in the process of purchasing the property, which was renovated in the mid-1980s into rental housing and is now owned by a private developer. The NDC expects to purchase the building by the end of the year and start the redevelopment project early next year.

However, rising land and development costs and funding cuts, along with changes to the Section 8 program, have presented some challenges to housing development, according to Latimore. While the Codman Square NDC has been able to purchase vacant city-owned parcels at a reasonable cost in the past, the number of public parcels is dwindling leaving behind only privately owned, neglected sites that usually come with higher price tags.

“We’re challenged with working in the private market more and more, and that requires many more financial resources,” said Latimore.

In addition, cuts to the Section 8 housing program have started to affect affordable housing developers’ bottom lines. Many of the residents living in housing produced by the Codman Square NDC rely on Section 8 housing vouchers to pay their rent. This year, residents living in the Talbot Bernard Homes saw a reduction in their Section 8 rental vouchers, which ultimately translated into $15,000 less that the property generated, explained Latimore.

“That jeopardizes our ability to sustain and maintain that affordable rental project,” she said.

Despite such challenges to housing production, CDCs have so far exceeded their goals in other areas – including small business development and assistance. Last year, CDCs were able to provide direct assistance and support to 1,217 local entrepreneurs and also provided workshops and classes to more than 1,200 businesses.

They also helped more than 14,700 families by providing first-time homebuyer training and conducted landlord-tenant mediation for about 7,000 people.

CDCs also came very close to reaching their 2003 target for job creation and preservation. Community-based organizations created 1,046 construction jobs just last year and, through their job-training programs, helped place 900 people in jobs.

In terms of spurring investment in the communities, CDCs secured $179 million, the bulk of which came from residential and commercial real estate projects. CDCs completed 36 housing, commercial and mixed-used real estate development projects in 2003 with a total investment of $162 million.

MACDC will conduct another survey of community development corporations in Massachusetts early next year to gauge the campaign results.

Kriesberg anticipates that CDCs will exceed the target goals in all the areas – except for housing – by the end of this year. For housing, Kriesberg predicted that the CDCs will reach between 80 to 85 percent of the 3,000 target goal.

‘Larger Notions’

Even before the revitalization campaign was unveiled at MACDC’s first statewide convention, CDC leaders realized they would be facing leaner times as state lawmakers looked to reduce spending.

The key funding program for community-based development groups, the Community Economic Enterprise Development, or CEED, program, was slashed from $1.9 million to $500,000 in fiscal year 2003. The cutbacks were a sign that CDCs would have to delay or halt real estate projects and scale back programs. The groups suffered an even bigger blow a year later when CEED was completely eliminated.

“We’re going to see some of the impact of that funding cut continuing out over the next few years,” said Kriesberg.

Kriesberg said he expects there will be some “drop-off in small business development and workforce development” both this year and in coming years unless some of the funding can be restored.

But instead of actively pressing state legislators to revive the CEED program, MACDC wants the state to create new funding streams that community-based groups could tap into, including a community housing initiative that would provide money to nonprofit development organizations to plan and prepare for new affordable housing projects, as well as increase the existing resources that are available.

“One of the larger notions of what we were trying to do with the Â… campaign is to communicate that the collective impact of CDCs is quite significant and therefore it’s a sector worthy of investment by the state and by the private sector because in their aggregate they’re helping thousands of families,” said Kriesberg.