For many years on my old blog, I would complain about low-income or “affordable housing” projects around the City of Worcester that on average would costs upwards of $350,000 per unit to build. You may think that I am exaggerating here, but I am not.
In fact, I even created this map. Here is my blog regarding this Voke Lofts project from October of 2012:
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October 27, 2012
Winn did a great job on the Chevalier Building.. Good mix of housing and adequate off street parking. Project looks great!
I am sure they will do a good job on the Trade School. Some of these projects, especially an older building like the Trade School simply can not be renovated 100% with private dollars since the corresponding monthly market rental rates would not cover the costs. They utilize grant monies for “affordable” housing to leverage the project and make the project feasible. These are good projects, and make ideal property for investment (as detailed on Roofstock).
Again these are good projects, spur investments into an area and should be supported. Check out the Canal Lofts website and drive by this project, this a great project.
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The key line here is that Winn “utilizes” the free grant monies from “affordable” housing to leverage the entire project. They do not build developments that are entirely 100% “affordable” to get as much free money as possible like:
- May Street
- Burwick Building on Main
- Odd Fellows on Main Street
- Southgate Street
The developers of 100% affordable projects do not care how much the project costs since usually about 90% of the project costs do not have to be be paid back. In fact they are rewarded to have ridiculous costs since so they pay themselves the largest possible “development fee”. These “affordable” projects allow the developer to charge, or pay themselves a fee, usually around 10%. The bigger the project, the bigger the fee they make.
I could ramble on here but read this Boston Globe Editorial. After you read it drive by the 4 projects listed above then by the Canal or Voke Lofts. Ask yourself, where you would live?
In addition Winn does not take all the City of Worcester Home Funds, ask for insane parking concessions, get the City of Worcester to spend millions on sewer infrastructure when a project runs into trouble, ask for CDBG funds, HUD guaranteed loans or tax title property for pennies on the dollar.
I only hope Winn takes a serious look at the courthouse we now own. Next time you see another (Grand Street and Mason Street ), the first thing you want to ask is what percentage of the project is “affordable”. Anything over 25% should simply not be supported. This one step alone, to cap any project at 25% affordable, would make a huge difference!
