$55M Funds Lofty Improvements at Salem Heights
MassDevelopment Bond Finances Major Renovations to High-Rise Housing Facility, Preserving Affordable Housing for 500 Residents in Salem
August 3, 2021
Matthew Mogavero, 857-248-0868
mmogavero@massdevelopment.com
Maria Plati, Preservation of Affordable Housing, Inc., 617-261-9898
mplati@poah.org
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| Photo of Salem Heights, courtesy of Preservation of Affordable Housing |
SALEM, Mass. – MassDevelopment has issued a $55 million tax-exempt bond on behalf of Salem Heights II Preservation Associates Limited Partnership, an affiliate of Preservation of Affordable Housing, Inc. (POAH), which will use bond proceeds to buy, renovate, and equip the 281-unit multifamily rental housing facility Salem Heights, located at 12 Pope St. in Salem. Home to about 500 residents, the property includes 274 housing units that are rented to households earning no more than 60% of the area median income ($80,520 for a four-person household) and seven market-rate units that are rented to households earning no more than 120% of the area median income ($161,040 for a four-person household). Planned renovations to Salem Heights, which was built in the 1970s, include an entirely new building envelope (removal of the building’s brick and exterior sheathing, replacement with a structural insulated metal panel, new windows, and new roofs with six more inches of insulation); the conversion of 15 units to ADA-compliant, barrier-free units; extensive duct work repair; improved ventilation and a new cooling system; plumbing upgrades; common area improvements; and a new playground for the more than 100 children that live at Salem Heights. The bond was sold through a public offering underwritten by RBC Capital.
“Not only is it important to expand affordable housing opportunities throughout the Commonwealth, we must also ensure existing facilities receive the upgrades they need to remain vibrant living communities for the long term,” said Housing and Economic Development Secretary Mike Kennealy, who serves as chair of MassDevelopment’s Board of Directors. “The Baker-Polito Administration is excited that tax-exempt financing from MassDevelopment and tax credits from DHCD are able to help Preservation of Affordable Housing, Inc. make critical repairs and improvements to one of Salem’s largest affordable housing communities.”
“MassDevelopment is proud to partner with Preservation of Affordable Housing, Inc. as it moves forward with major renovations at Salem Heights to preserve affordable rental housing for about 500 people in the Gateway City of Salem,” said MassDevelopment President and CEO Dan Rivera. “Across Massachusetts, our bond financing is helping address the state’s housing crisis by offering developers, CDCs, and nonprofits the resources they need to build or upgrade affordable units.”
In addition to the tax-exempt bond, MassDevelopment assisted the Massachusetts Department of Housing and Community Development with the approval of federal low-income housing tax credits, which will provide approximately $40.7 million in equity for the project.
“Massachusetts is facing a housing crisis, and preserving our existing affordable housing is a priority for the Baker-Polito Administration,” said Housing and Community Development Undersecretary Jennifer Maddox. “Since 2015, we have invested more than $1.3 billion in the production and preservation of more than 20,000 housing units. We have a strong ecosystem of affordable housing champions, including MassDevelopment and POAH, Inc., who share our commitment to solving our affordable housing shortage.”
Salem Heights is comprised of two connected nine- and 10-story high-rise buildings containing a total of 95 one-bedroom and 186 two-bedroom apartments. The complex was at risk of being converted to market-rate housing until POAH bought the facility in 2003, assuring affordability for decades to come. POAH completed a modest rehab of around $11,000 per unit in 2003 and POAH Communities has managed the property since 2005.
“I’m extremely grateful to MassDevelopment for their support for these significant upgrades to one of Salem’s largest affordable housing facilities,” said Salem Mayor Kim Driscoll. “Salem Heights provides a home to several hundred Salem residents and families, including many children and older adults. As a result of this project, the property will see substantial improvements to its accessibility, systems, and resident amenities. We’re proud that Salem is a city that welcomes all who want to call it home, and POAH is an essential partner in that vision. This investment at Salem Heights will further our shared goal of a suitable and safe roof over all our residents’ heads.”
“MassDevelopment is providing key funding support for a wide range of renovations to Salem Heights that will continue to improve the quality of life for our nearly 500 residents,” said Preservation of Affordable Housing President and CEO Aaron Gornstein. “These improvements will increase the energy efficiency of the building, improve ventilation, heating and air conditioning systems, upgrade many apartments, and provide more expansive common areas and outdoor play spaces for families to gather and enjoy their surroundings.”
MassDevelopment, the state’s development finance agency and land bank, works with businesses, nonprofits, banks, and communities to stimulate economic growth across the Commonwealth. During FY2020, MassDevelopment financed or managed 341 projects generating investment of more than $2.69 billion in the Massachusetts economy. These projects are estimated to create or support 10,871 jobs and build or preserve 1,787 housing units.
