Affordable Units In Limbo

By: Tim Wood

Topics: Affordable housing

Affordable Units In Limbo

CHATHAM – Mark Bulman sits in the living room of one of two affordable condominium units in his Main Street Village development at 1070 Main St. Aside from a lack of carpet and some bathroom fixtures, the two-bedroom, 1,500-square-foot condo is ready for someone to move in and enjoy the view of Perch Pond from the wide sliding glass doors in the dining room/kitchen.

Except, Bulman points out, he's been unable to find a qualified buyer for the two units, despite the work of the Hyannis-based Housing Assistance Corporation, which held two lotteries to try to sell the condos. The town, he adds, hasn't exactly been cooperative in trying to find solutions, including altering the conditions of a 40B comprehensive permit that he says were unduly onerous.

“I've gotten cooperation from everyone else but the town,” he said. “Affordable housing is supposed to be a partnership. My Chatham partner is missing.”

“It's not really a blame game,” adds his attorney, William Riley. “It's just, how are we going to get out of this thing?”

Bulman, a Centerville resident, acknowledged that he was a bit starry-eyed when he went into the 10-unit project more than a decade ago. He'd been running South Cape Seafood, formerly Old Harbor Fish, in an old building at the location but was steadily losing volume. “We got regulated out,” he said. He decided to convert the property to condos, and made inquiries about a “friendly” 40B comprehensive permit, proposing a total of eight units on the 1.4-acre parcel, with one designated as affordable. That didn't fly with the town, so he turned to the formal 40B route.

Under the 40B process, a developer can override some local regulations, including density, if less than 10 percent of a town's housing stock is affordable. As of 2012, Chatham's affordable housing rate was 4.8 percent, according to its affordable housing production plan, which states sets a goal of 17 new affordable units per year to help reach the 10 percent goal. Bulman's two units are included in the report's goals for 2013.

Bulman obtained approval from the state for a 12-unit 40B development with two designated affordable. In the process of the zoning board of appeal's 40B review, the number of units dropped to 10, with two remaining affordable. The ZBA also required a $150,000 payment to the town's affordable housing trust fund, something Riley said was unprecedented. Bulman said he accepted the condition to get the project moving, but acknowledged that it has been a major issue, since the 40B permit caps his profit, making it more difficult to make the payment.

The ZBA approved the comprehensive permit in 2007. Construction began, and a year later the economy and housing market tanked.

Half the units were built before Bulman ran into financial problems. Facing foreclosure, he returned to the zoning board in 2014 and was given an extension on $60,000 in overdue payments to the affordable housing fund, which had held up occupancy permits. The market units could then be sold, and he was also able to obtain financing to complete the remaining five units.

Currently all eight market units have been sold, but the two affordable units remain vacant. Bulman said he spent thousands of dollars on two lotteries to try to sell those units, priced at $135,000 each, but no qualified buyers could be found.

Marketing of the units and organization of the lotteries were conducted by the Housing Assistance Corporation. Gael Kelleher said while there was considerable interest, no one qualified because of the low income limit stipulated by the 40B permit. Usually with 40B projects, she said, 25 percent of units are set aside as affordable, and buyers must have an annual income of no more than 80 percent of the area median income, which for a single person is $47,750. Because the Main Street Village affordable units totaled just 20 percent of the entire development, the income cap was set at 20 percent of median income, which is $29,750 for a single person.

“There's a big difference,” Kelleher said. Applicants must be pre-approved for a mortgage, which means they have to go through the same screening as anyone applying for a mortgage. Most people in this area who meet the income cap can't qualify for a mortgage, she said, due to credit problem, debt or other factors.

“We did a lot of marketing, and we had a lot of phone calls,” she said. “It was very popular and a lot of people wanted it, but they could not get mortgages. It's a difficult income category.”

Bulman said he's inquired at the Massachusetts Department of Housing and Community Development, which oversees the 40B program, but been told that there's no way to change the income qualifications.

Riley said attempts to work with the town to clear the way to sell the affordable units have been unsuccessful. One idea was to lift the affordable restriction and sell the units at market rates in exchange for a $300,000 rather than a $150,000 contribution to the affordable housing trust. Bulman said an offer to sell the units to the town was also rejected.

“No matter what we put on the table, it didn't work,” he said.

Riley said the terms of the comprehensive permit could be renegotiated with the ZBA, just as they did when Bulman was having financial difficulties in 2014. He said he filed a request with the zoning board for review of the comprehensive permit, claiming, among other things, that the $150,000 payment condition was improper, but it was determined that the request wasn't properly filed and there was nothing to appeal. Riley said state statutes allow the filing of a request for a hearing through the town clerk, and if that is rejected by the zoning board an appeal could then be filed. He said he planned to follow that route and file with the town clerk, but as of Tuesday no filing had been received by that office.

Community development officials declined to comment pending receipt of an appeal.

Kelleher said the two units remain on the HAC's web page listing affordable units for sale. Bulman said he is disillusioned with the process and willing to do “anything reasonable” to sell the affordable units. Although they cost $250,000 more to build than the sale price, the affordable units are basically the same as the market-rate units in the development, Bulman said. The affordable units have carpet instead of hardwood floors, and no finished basement, but otherwise “we didn't skimp,” he said.

“This should have been an easy project,” he said.