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Left In Lowell » Blog Archive » Poverty is Big Business

Left In Lowell

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March 5, 2012

Poverty is Big Business

by at 1:06 pm.

Had to bring this up because, y’know, I hate poor people and immigrants. Oh, throw in kittens while you’re at it. JACK HATES KITTENS!!!!!

LOWELL — In order to help fulfill its pledge to keep Westminster Village largely affordable housing, the new owner of the 432-unit apartment complex on Pawtucket Boulevard is offering cash incentives for some of the higher-income residents to move out.

Westminster Preservation, L.P., which was able to acquire and rehab the apartment complex with a $45 million loan from MassHousing last year, sent letters early last month to residents offering to pay them $5,000 in a one-time cash payment, plus $1,000 in moving expenses, if they leave Westminster by the end of March.

To be eligible, residents’ income had to be above 60 percent of the area median income.

One of the stipulations of the MassHousing loan was that 412 of the 432 apartments remain affordable to low-income persons. The owner pledged to keep the other 20 units market rate.
To help meet that low-income requirement, the owner secured a 20-year renewal and extension of the Section 8 housing-assistance payment contract at the property from HUD. The federal agency provides funding for Section 8 tenants — who are low-income, elderly and disabled — to live in privately owned facilities.

Lowell is treading water this way. Maybe we would go under without it?

11 Responses to “Poverty is Big Business”

  1. Joe S. Says:

    There has to be a better way. It is reasonable to provide sufficient housing to “poor” people, but it is unreasonable to keep them poor. If the community is progressive, the original poor will begin to prosper, and maybe replaced by “new” poor people. and the cycle continued.

    In this case, it looks like a short-coming in the lease arrangement that forces the landlord to pay money to cleanse the premises of the not-poor.

  2. Greg Page Says:

    It’d be interesting to see how badly the owner *overbooked* the market-rate units. On first look, it’s hard to imagine how he wouldn’t have seen this coming, but maybe he figured he could squeeze some rent payments out of these folks at the market rate and get rid of them before the numbers were due to the Commonwealth? Not such a bad deal for the tenants moving out (up to 6k, and at least 5k, for the hassle), but, as you said recently, there’s no such thing as a free lunch…at the end of the day, it’s taxpayer money that’s supporting this wacky incentive structure.

    To Joe S — it seems like if these could be written in a staggered way (i.e. tiered levels of state $$ based on the percentage of low-income, which is subject to change), you could avoid these types of situations…but if it’s all-or-nothing (i.e. if the landlord doesn’t have the right number of low-income residents, he loses out on the big Section 8 dough entirely) his back is to the wall.

  3. joe from Lowell Says:

    If Lowell is “treading water,” then why are there so many people living the market-rate units that they have to pay people to move out?

    Communities that use low-income housing assistance to “tread water” are trying to fill vacant units, which wouldn’t be filled at market rates - in other words, exactly the opposite of what’s happening here.

    Lowell is most certainly not “treading water” - just the opposite. We’re butting up against a situation, at least in places like the downtown, where housing affordability programs are used to preserve the affordability of units that would sell or rent for big bucks on the open market, wiping out the working-class an low-income residential population overnight.

    Your description is at least fifteen years behind the times. I don’t think you hate poor people, Jack. I just don’t think you have a solid knowledge base about the housing market, housing policy, or the housing-related issues facing Lowell.

  4. joe from Lowell Says:

    Joe S.,

    Reserving some units at not-mega-buck prices, so that some lower income people can afford to live in the area, doesn’t keep anyone poor. People do move up, and when they do, they move to nicer digs.

  5. kad barma Says:

    joe from Lowell, where do you live, and how have you come by this incredibly skewed and fanciful portrait of downtown Lowell? “Big bucks” for a condo downtown near me start under $50,000, and even at that price the units stand vacant for months on end. Loft 27 and Mass Mills are filled with Section 8 rentals, exactly as Jack correctly describes things at Westminster Village, and it’s all that’s keeping them solvent right now. We are absolutely not butting up against a situation downtown where affordability programs are used to preserve affordability–they’re being used by the rental owners to desperately keep their heads above water, and if you don’t see it, you’re not looking very hard. If anyone’s description is at least 15 years behind the times, it’s yours.

    You should come downtown here sometime and check it out.

  6. Greg Page Says:

    JFL — I live downtown and am very active in LDNA. I happen to own a condo downtown, with a very underwater mortgage (that would be funny except I’m being extorted for four-figure flood insurance!)…but the point is that I’m very familiar with downtown real estate values.

    Kad is 100 percent right — the perception that downtown is bursting at the seams, or ready to burst at the seams, with a bunch of yuppies who would fill rentals at market rate and/or drive up condo purchase values, is not accurate.

    I often hear people make sweeping generalizations about downtown, and wish they would take the time/effort to verify them. I live in a building with 120 units, which are mostly owner-occupied. There is a tremendous range of ages, backgrounds, household types, etc. — just like any other neighborhood in the city. I have heard it said so many times that “downtown is teeming with *these people* who came here thinking it was going to be the next hot neighborhood, and wanted to speculate/flip their condos, but are now stuck because of the price crash.” Funny thing is, I don’t know a single, actual person who fits that billing.

  7. joe from Lowell Says:

    Well, kad barma, after I lived in the downtown for several years, I moved to the Highlands. As for where I came about my understanding of the housing market, let’s just say that it isn’t based on reading blogs, but rather, years spent as a professional involved in keeping track of development trends in Lowell.

    “Big bucks” for a condo downtown near me start under $50,000

    For an efficiency in the lowest-cost project in the district, during the most severe downturn in the national housing market since the Great Depression, sure.

    But if you expand your outlook beyond the immediate situation, you’ll find that the share of downtown’s units that are dedicated-affordable dropped steadily, and significantly, for a couple of decades, right up until the mortgage meltdown. You’ll also find that market-rate condos in downtown Lowell actually held their value better than, for instance, single family homes in the region’s suburbs - a very strange situation, since condo prices are more volatile than single family homes. You’ll also find that well over 1000 market-rate units were added in the downtown area in the past decade.

  8. joe from Lowell Says:


    Just watch. The trends in downtown are much larger, and much longer-lasting, than the temporary setback in the overall housing market that has interrupted how downtown has been developing.

  9. TomH Says:

    The experiences depicted by George and Greg have been the status quo downtown for quite some time. I bought my condo in a smaller complex 21 years ago. My mortgage was underwater for a few years, and the rate of return on this investment is certainly disappointing.
    However, I did enjoy living downtown for all the usual reasons - proximity to nightlife, the ability to walk to all my errands, etc.
    My biggest knock on downtown isnt the housing itself, but the cost of parking, and the decrease of available parking near my building. Its the real reason I moved.

  10. TomH Says:

    oops, Joe and Greg

  11. joe from Lowell Says:

    My mortgage was underwater for a few years, and the rate of return on this investment is certainly disappointing.

    This is a problem, TomH, but it is not a problem of the downtown housing market not being sustainable, and needing to be propped up with housing assistance.

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