Affordable housing gets $10M boost

The Bourne Mill in Tiverton is being turned into 166 apartments, at a cost of $45.3 million. The project is getting a $2.5 million boost from the affordable-housing board. /
The Bourne Mill in Tiverton is being turned into 166 apartments, at a cost of $45.3 million. The project is getting a $2.5 million boost from the affordable-housing board. /

In one key way, the $45.3 million renovation of Bourne Mill in Tiverton is unlike any other housing project ever attempted by the Armory Revival Co.
The Providence-based developer plans to transform the five-story granite mill complex abutting Cook Pond into 163 upscale apartments, just like it has done with Rising Sun Mills (with Struever Bros., Eccles & Rouse) and Pearl Street Lofts in Providence.
But the Tiverton project will be different in that it will be subsidized by the state, with part of the $50 million affordable-housing bond approved by voters last November.
Without the $2.5-million grant – which comes with the requirement that some units be set aside for income-qualified residents – the plans might not have gotten off the ground, said Jan Brodie, vice president of Armory Revival Co.
“It’s a vital piece of the financing package,” she said.
The Bourne Mill project is one of 10 projects approved late last month to receive more than $10 million in grants from the R.I. Housing Resources Commission. It is the first round of funding provided from the bond, which is meant to promote the development of housing that low- and moderate-income Rhode Islanders can afford to rent or buy.
Collectively, the projects will create 182 affordable rental units and 73 affordable owner-occupied houses or condos in 17 cities and towns, primarily for people making between $30,000 and $70,000 annually, the commission said. And the $10 million in state funding is expected to leverage more than $150 million in additional investment.
Noreen Shawcross, executive director of the commission, said this program, called “Building Homes Rhode Island,” program differs from previous affordable-housing funding in who it’s targeting and the type of developers applying for it.
Previous “funding mechanisms” were aimed at helping very low-income groups, Shawcross said, making it difficult for private development companies to turn a profit. They just weren’t interested.
“This bond funding is much more flexible,” she explained. “We needed to bring more people to the table. We needed to get for-profit developers involved to address the affordable-housing need.” (Armory Revival Co. is a for-profit entity.)
Of the 20 projects that received funding through the bond, six are overseen by for-profit companies. “This is really a turning point,” Shawcross said.
Also, the projects are in diverse locations, not just concentrated in urban areas.
The money will go to projects in urban hubs such as Providence, Pawtucket and Newport, but also Bristol, Coventry, Lincoln, Scituate, Barrington, Warren, Burrillville, South Kingstown, Narragansett, Hopkinton, North Smithfield, Exeter, Tiverton and Block Island.
“People are being priced out of these towns,” Shawcross said.
For example, the median selling price for a home in Exeter was $377,500 in 2006, according to data provided by the advocacy group HousingWorks RI.
At those prices, a homebuyer would need an annual income of $120,115, based on the federal affordability standard, which says a household shouldn’t have to spend more than 30 percent of its gross income on housing.
That’s why Deer Brook Development Corp.’s project in Exeter is so vital, Shawcross said.
It’s a 35-house, $9.9 million development on South County Trail that will have homes with a market value of upwards of $300,000. But because Deer Brook is receiving a $750,000 subsidy, 15 of those homes will be available to income-qualified residents at prices around $185,000.
“And those houses will look exactly the same as the rest,” Shawcross said. “No one will be able to tell them apart.”
In affluent Barrington, K&M Investments LLC is working on a $1.5 million, 11-house development and received a $150,000 grant, so three of those houses will meet the affordable-housing guidelines.
The projects were selected from among almost 60 applications that sought a total of $40 million in funding. Another $2.5 million will be awarded early next year, and the commission plans to award an additional $12.5 million in each of the next three years, through 2010.
While she was pleased with the level of interest, Jessica Rutledge, acting director of HousingWorks RI, said the demand is an indication that there’s a dire shortage of affordable housing in the Ocean State.
“There’s a need for it in every one of our communities,” Rutledge said, calling the Building Homes Rhode Island program “a first step.”
In June, HousingWorks released a report highlighting that a couple earning a combined income of $78,800 could not afford to buy a home in most Rhode Island communities.
That’s why the focus is on moderate-income families, not just low-income families, Shawcross said. “Just be increasing the housing stock, it helps everybody,” she said. “It strengthens a community.”
For profit or not, the developers agreed to three stipulations in order to receive funding:
• That the homes be rented or sold to income-qualified people. For renters, that’s anyone earning up to 80 percent of the state’s median income, about $59,000 for a family of four. For homebuyers, that anyone earning up to 100 percent of median income, about $70,000.
• That the properties remain as affordable housing for 30 years.
• That the affordable units receive state, federal or local subsidies.
Shawcross said a monitoring agent will keep track of each project over time, auditing records to ensure the guidelines are followed.
In addition, the projects will undergo a design review so homes are consistent with state and local housing and land-use plans so home fit the character of the community. “We want to build attractive, well-built homes,” Shawcross said.
By far, the most ambitious project that received funding is the Armory Revival Co.’s conversion of the Bourne Mill in Tiverton, which will create 55 affordable apartments.
The mill, which was most recently used as cold storage, is a complex of more than 20 buildings along Cook Pond that Armory Revival plans to start remodeling next year at the cost of $45.3 million.
Most of the 166 units will be one- or two-bedroom apartments to be rented for $1,067 to $1,600 a month, according to Brodie. Because of the $2.5 million subsidy, those units under the affordable-housing guidelines will rent for between $550 and $817.
“It’s wonderful,” Brodie said. “This gives a huge boost to the effort of providing housing for all.” •

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