Worcester City Manager Eric Batista announced the launch of two more tools to address the housing crisis in Worcester on Wednesday – the Affordable Housing Preservation Program and the Down Payment Assistance Program.
“As we strive to keep up with overall demand while addressing challenges related to affordable housing and homelessness, there is no single policy [that will solve the housing crisis],” Batista said. “It requires a multi-prong approach.”
The two programs are being funded with $2 million of the city’s American Rescue Plan Act funds and are meant to provide critical housing assistance for residents, Batista said at a press conference.
The programs are meant to help Worcester residents achieve homeownership and stabilize rising rents in certain properties, according to Batista.
The city’s housing division will be administering the preservation program while Worcester Community Housing Resources will be administering the Down Payment Assistance Program, according to Worcester Mayor Joseph Petty.
There are four ways a person can qualify for the Affordable Housing Preservation Program, according to Jim Brooks, the city’s Director of Housing Development & Healthy Homes:
- The property is located in a qualified census tract where 50% of the population earns less than 60% Area Median Income.
- They are members of a population that was disproportionately impacted by COVID-19 including the Hispanic/Latino, Black/African American, and American Indian communities.
- An individual is an assistance beneficiary participating in programs such as Medicaid, Social Security, SNAP or other programs.
- An individual or family meets certain income requirements. To meet the income requirements a family of four could earn no more than $90,000 annually.
Multi-family housing owners can apply for up to $15,000 from the program. The owners in return have to provide a quality unit for tenants to rent that earn less than 60% of Area Median Income, according to Brooks, and the rent must be no more than the Housing of Urban Development Fair Market rent.
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The program is designed to keep rents from going up $500 or $1,000 from month to month, according to Brooks. The owners will be required to give the tenants year-long leases.
The program participants will have to follow the requirements for 15 years, according to Brooks, and properties in the program will need to provide a certificate of inspection.
Landlords applying for the program can apply for a maximum of six total units, and as a stepping-off point, the program is starting with 75 units, according to Brooks.
The down payment program for first-time homebuyers offers those eligible up to $25,000 to cover up to 3.5% down payment and eligible closing costs, Brooks said.
“What this program will provide is a real opportunity for those individuals looking to purchase a home for their family and grow wealth,” Brooks said.
To qualify for the program at least one of the homeowners must be a current Worcester resident. The participants will have to go through a HUD first-time homebuyer training course to ensure they’re properly prepared for homeownership and will have to remain in the property for at least five years, according to Brooks.
The homes also have to be in a qualified census tract where 50% of the population earns less than 60% Area Median Income, Brooks said.
The two programs are part of Batista’s housing strategy, which he shared in a communication to the city council in May.
The strategy has three primary pillars: housing production preservation and healthy homes; homeowner, tenant and unhoused assistance; and public policy.
While the city council passed an inclusionary zoning policy this year that will require developments of 12 units or more to reserve 10% to 15% of their units for affordable housing, Batista said in his May communication that “we believe additional initiatives are necessary to preserve the ‘informal’ or ‘naturally occurring’ affordable housing sock in the city.”
Affordable housing advocates argued that the inclusionary zoning policy did not go far enough to address the housing crisis in the city.
During Tuesday night’s city council meeting, District 1 Councilor Sean Rose questioned how many developers have submitted projects since inclusionary zoning was enacted by the council.
On Wednesday, Batista said one developer has submitted an application, but other than that his administration doesn’t know of anyone else. Rose said the one that has submitted an application is “weighing their options.”
The administration is also seeking funds to create a housing production plan, which details the housing needs of a community and develops solutions to address those needs.
Communities that don’t meet the 10% affordability requirement for housing prescribed by Massachusetts General Law are usually required to develop a plan.
While Worcester surpasses that requirement, with 13.5% of its housing stock deemed affordable, Batista wrote in his May communication to the council: “We believe the creation of a Housing Production Plan will be a helpful and proactive tool to guide the city’s housing development goals.”
Chief Development Officer Peter Dunn said Wednesday the city applied to the state’s Housing Choice Grant Program for the funds and expects to hear back this fall.
The plans help determine the housing needs of both the current population and the growth and change in the composition of the population, according to Department of Housing and Community Development documents.
The city is holding an information session about the Affordable Housing Production Program for interested landlords on Wednesday, Sep. 27 at 4 p.m.