Glen Street: Affordable Homeownership for Somerville
It is an understatement to say that the Somerville housing market is hot.It is red hot, withthe median home value in Somerville at $592,900 – and the median list price per square foot (psf) at $521, or twice that of Metro Boston’s $261 psf. That is why SCC’s Glen Street project and the September 9, 2017, groundbreaking is so critical to the community.
The property is an adaptive reuse of an old American Legion Post in East Somerville. SCC acquired the property to create 11 condominiums and provide homeownership opportunities for Somerville residents of moderate income. Eight of the units will be designated as affordable, and three will be market rate. According to Senior Project Manager Jesse Kanson-Benanav, the market-rate component will allow SCC to put more equity into the project.
Glen Street is unique in its creation of affordable homeownership options for Somerville residents. “SCC and other developers of affordable housing have been focused on rental housing development, which is obviously pretty critical in our city and region,” states Jesse. “As subsidy sources have dried up across the board, any sources for financing affordable condominiums have been completely eliminated.”
SCC sees the project as a way to bring affordable condos to the rising market that is more and more expensive by the day. Glen Street is the first large-scale affordable condominium construction in Somerville since the mid-2000s.
A Unique Opportunity
“The project is relatively unique,” explains Jesse, “because other than the traditional construction loan from East Boston Savings Bank, the rest of the project will be financed exclusively from the City of Somerville. That’s because there are no state or federal subsidies that exist for homeownership.
“So Somerville has some flexibility to do this, because they instituted the Community Preservation Act a few years ago. So there is CPA money available and money from the Somerville Affordable Housing Trust Fund and the Somerville home allocation from HUD [the United States Department of Housing and Urban Development].”
According to Jesse, Somerville also has access to a Community Challenge grant, a special allocation from HUD awarded a few years ago to support transit-oriented development around the future Green Line corridor. Near Tufts Street, the Glen Street property is close to the first stop of the proposed extension coming out of Lechmere.
“The project illustrates the City’s willingness to put a variety of resources behind a project like this, which is bringing more affordable homeownership opportunities to this community for first-time homebuyers – in a market where it is difficult to do this kind of work,” shares Jesse. “And they are willing to do it in the absence of any state or federal sources. For example, you can’t use low-income housing tax credits for homeownership.
“It is rare to see a local municipality put such significant support behind this type of project. And it is a demonstration in their belief about its importance.”
The proposed 11-unit development will add a story to the current building. The eight affordable units, will allow people at 80%, 100% and 110% of AMI, or Area Median Income, to purchase housing in this hot market.
The loan closing is imminent, and construction will be able to move forward.
This project is an important investment in the neighborhood and a critical alternative to projects by for-profit developers.