LOW fixed interest rate. AVOID COST of private mortgage insurance. That's ONE Mortgage. LEARN MORE

First-time buyer? Check out ONE Mortgage

Groton adds nine units through inclusionary zoning bylaw, help from MHP

Posted on April 23, 2003

GROTON --- State and local leaders will gather on Wednesday, May 9 to publicly celebrate the addition of nine new affordable rental units, the first affordable housing generated under the town’s new inclusionary zoning bylaw.


The ceremony for the new housing development, known as Sandy Pond Road, will feature an open house tour of the units and brief remarks by local and state leaders who combined to create nine new rental units for the town’s housing authority.


“Groton has illustrated one way in which towns can increase their supply of affordable housing,” said Rita Farrell of the Massachusetts Housing Partnership, the state agency that provided both early technical assistance and long-term financing for the project.
“Their inclusionary zoning bylaw resulted in creating more affordable units for the housing authority.”


How it came together
Groton is an affluent community located 31 miles northwest of Boston.  Rapid employment growth along the I-495 corridor has led the demand for housing to outpace the supply, and homes have become less affordable.  The current median price for a single-family home in the town is $420,000.


Town administrators recognized the need to build affordable housing, and they passed the first inclusionary zoning bylaw in 1990. But at the time, including 10 percent affordable housing was optional.  Developers usually preferred to pay the town cash instead of including affordable units, and only five affordable units resulted from the bylaw until it was modified 13 years later.


In 2003, Groton amended the bylaw to require 15 percent affordable housing for any effort proposed over 10 units.  So when Moulton Construction Company wanted to develop 84 market rate homeownership units, the town’s new and improved inclusionary zoning bylaw kicked into effect for the first time. 


Early assistance from MHP
With nine affordable units in hand, the developers approached the Groton Housing Authority with the opportunity to purchase them. Having limited experience in structuring and financing development deals, the Groton Housing Authority in turn enlisted MHP to help them work through the unique opportunity.


MHP’s Community Housing Initiatives (CHI) staff provided technical assistance to help the housing authority negotiate a purchase price with the developer.  CHI staff also helped submit applications for permanent financing for the nine units. 


Then, MHP stepped in again to help the housing authority finance the purchase of the units.  MHP provided the long-term financing, including a first mortgage loan of $507,000 and a deferred-payment second mortgage loan of $271,000 provided through MHP’s Suburban Rental Development Pilot Production Program.


Groton is the second town in the state to complete such an effort with help from the pilot program.  The program was created by MHP and the state’s Department of Housing and Community Development (DHCD) to foster the development of small-scale affordable rental efforts that fit with the character of suburbs and small towns.  DHCD also allocated $750,000 in HOME funds to the effort.


The Sandy Pond Road units are located in three apartments on a three-acre parcel of land.  The effort is not only adjacent to the new 73-unit homeownership effort, but it is also next to 400 acres that have been donated to the Audubon Society for preservation.


The units will be managed by the housing authority, and they will be affordable in perpetuity.  All apartments include two bedrooms; seven are affordable to residents earning at or below 60 percent of the area median income.  Two are affordable to residents at 50 percent of the area median income, which in Groton is $32,640 for a household of two.