Massachusetts affordable housing costs could rise exponentially over the next decade due to federally subsidized mortgage expiration dates, according to a recent report from the Community Economic Development Assistance Corp. (CEDAC).
Nearly 10,000 units of affordable housing restrictions will be removed if the federally subsidized mortgages expire. This will likely result in the affordable housing units being converted to market rate apartments, according to the report.
"Starting in the mid-1960s and continuing through the late 1970s, almost a million affordable rental housing units were produced nationwide through federally-assisted mortgage programs that tied affordability restrictions to below-market-rate 40-year mortgages," writes Bill Brauner, CEDAC’s housing preservation program manager in the report. "Already in Massachusetts, over 3,800 affordable apartments have reached the end of their 40-year mortgages with no other affordability restrictions. Another 13,200 apartments in 110 projects will reach year 40 by the end of the decade."
On average, Massachusetts families living in affordable housing pay $700 a month in rent, according to the report. Those rents are expected to at least double if they become market rate units.
"We know that the loss of these existing affordable rental units will exacerbate the crisis in affordable housing, both in Massachusetts and across the country," said Roger Herzog, executive director of CEDAC. "The commonwealth has done quite a bit in recent years to preserve affordable housing."
CEDAC’s analysis of the state’s affordable housing looked at 19 complexes in Greater Boston, Lawrence, Worcester, Springfield and the southeastern part of the state. It found that the project’s size and its location did not represent the primary factor predicting whether it would become a market-rate building. The analysis found the presence of project-based Section 8 subsidies was the greatest predictor regarding maintaining affordability.
CEDAC suggests one solution to the problem is for the federal government to expand availability of project-based Section 8 housing available to building owners, according to a statement.
