State Affordable Housing Funding Round Includes 25 Sixth St. Project

One of the most critical food security locations in the City over the past year has been funded by the state for what it was always to become – an affordable housing rental and home ownership development.

While La Colaborativa has done historic work from the property over the last 13 months, becoming a safety net for all problems in the city during the pandemic, the property is soon to be ready to take the next step towards construction of affordable housing.

The Neighborhood Developers (TND) has owned the warehouse for a couple of years while waiting to cobble together funding for the project, and in the interim allowed La Colaborativa to use it for the community until funding came through. Last week, the state announced that the project was included in its 2021 round of Low Income Tax Credits that pave the way to building the project.

“It’s a really exciting project, and we have it financed, so we will be going forward with construction,” said TND Director Rafael Mares. “We’re excited about the project and we’re excited how it has been used over the past year to serve the community with La Colaborativa.”

The project contains 56 units of all-affordable rental units, but it also includes six affordable home ownership townhouse units – a new twist for the affordable development community in Chelsea.

The townhouse units will be part of the overall building, but they will have separate entrances and will be two floors of living space. Mares said it has always been challenging to do ownership opportunities because the funding wasn’t there, but in this project and another under construction in Everett, they took a chance on what Gov. Charlie Baker had said he would do in terms of providing more funding for ownership.

“The challenge was funding,” he said. “You can’t do affordable housing rentals or homeownership without a subsidy. They used the GE money to fund the Commonwealth Builder program. That made a huge difference. With this property and the one in Everett, we decided there was going to be a program in place like this and we built it…Our timing was just right with Everett and Sixth Street. We were aggressive with our assumptions. If we know there is funding for this, we will always include it and that’s what we’d like to do.”

The 25 Sixth Street project is new construction for families. The state Department of Housing and Community Development (DHCD) will support the project with federal and state low-income housing tax credits and subsidy funds. The city of Chelsea also will provide funds in support of the project. When completed, 25 Sixth Street will offer 56 units of rental housing, with 44 units affordable to households earning less than 60% of AMI.  Eight units will be further restricted for households earning less than 30% of AMI.  The completed project also will offer six for-sale condominium units.  The sponsor intends to build the project to Passive House standards.

Through the Department of Housing and Community Development (DHCD), the Baker-Polito Administration awarded $93.3 million in direct subsidy funding and allocated $45.8 million in federal and state housing tax credits that will generate approximately $310 million in equity in support of these projects last week. The projects are located in every region of Massachusetts, and include new construction, historic rehabilitation, and the preservation of occupied projects in need of rehabilitation. Additionally, some projects are transit-oriented, and eight of the construction projects will be built to Passive House design standards. 

“As Massachusetts continues to recover from the COVID-19 pandemic, it is important that we continue to prioritize new affordable housing development to help our most vulnerable families,” said Governor Baker. “Stable housing is the foundation of healthy, prosperous communities, which is why our administration has proposed an immediate infusion of nearly $1 billion in federal recovery funds to rapidly increase capacity for production in every part of the state.”

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