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CPA Application Glendale Habitat FINAL.pdfPioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 1 of 15 COMMUNITY PRESERVATION PROJECT APPLICATION COVER SHEET I: Project Information Project Title: Glendale Rd Northampton Zero Net Energy Homes Project Summary: Pioneer Valley Habitat for Humanity seeks to build three zero-net energy possible homes on a common drive off of Glendale Rd to provide access to homeownership for low- income households. The site was transferred from the city of Northampton in 2017 after Habitat was selected as developer for four lots through an RFP. We will build on the fourth lot at a later date. The land off Glendale Rd was originally planned to be part of a 24-unit subdivision, before the city took ownership and converted the rear of the property to conservation land and selected Habitat as its affordable housing partner. Each of the three homes in this phase of the project will have 3 bedrooms and be made available to households earning less than 60% of the Area Median Income. We plan to build these homes in collaboration with an innovative modular builder in VT who specializes in Zero Net Energy mobile home replacements (pending approval of grant funding for this partnership). This would help us show residents of Western Mass that options exist for durable, energy efficient homes that can fit in the footprint of a typical mobile home or on a new site. Our local Habitat builds strength, stability and self-reliance through affordable home ownership by building with local volunteers, tech school students and our future homeowners. Estimated start date: _January 2018__ Estimated completion date: _May 2019___ CPA Program Area (check all that apply): X Community Housing II: Applicant/Developer Information Contact Person and or/primary applicant: Megan McDonough Property Owner (if applicable): Pioneer Valley Habitat for Humanity, Inc. Organization (if applicable): Pioneer Valley Habitat for Humanity, Inc. Mailing Address: PO Box 60642 Florence, MA 01062 Daytime phone #: 413-586-5430 Fax #: none E-mail address & Website: megan@pvhabitat.org www.pvhabitat.org III: Budget Summary Total budget for project: $667,605 CPA funding request: $60,000 CPA request as percentage of total budget: 9% Applicant’s Signature: ____________________________ Date Submitted: __9/15/17_____________________ Pioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 2 of 15 Narrative Q. Project location, including address and parcel number Project Address: 125, 129 and 133 Glendale Rd Northampton, MA 01062 Parcel ID: 42‐180, 42‐181, 42‐182 A description of the project and, when applicable, of the property involved and its proposed use. Pioneer Valley Habitat for Humanity seeks to build three zero‐net energy possible homes on a common drive off of Glendale Rd to provide access to homeownership for low‐income households. The site was transferred from the city of Northampton in 2017 after Habitat was selected as developer for four lots through an RFP. We will build on the fourth lot at a later date. The land off of Glendale Rd was originally planned to be part of a 24‐unit subdivision, before the city took ownership and converted the rear of the property to conservation land and selected Habitat as its affordable housing partner. Each of the three homes in this phase of the project will have 3 bedrooms and be made available to households earning less than 60% of the Area Median Income. We plan to build these homes in collaboration with an innovative modular builder in VT who specializes in Zero Net Energy mobile home replacements ሺpending approval of grant funding for this partnershipሻ. This would help us show residents of Western Mass that options exist for durable, energy efficient homes that can fit in the footprint of a typical mobile home or on a new site. Q. What Community Preservation criteria – both general and program-area specific – does this project meet? We believe this project fits well with the project evaluation criteria for community housing. In particular: 1. Create or preserve community housing – both rental and home ownership, with a focus that matches community needs for households. This project will create community housing through affordable home ownership for first‐time homebuyers. 2. Promote and encourage use by diverse populations. We will promote and encourage a diverse population to apply for this opportunity through a fair housing marketing process and lottery of eligible households. Approximately 82% of the 1‐4 family homes in this census tract are owner occupied and the median income is higher than the region. We would be providing an opportunity for someone who is low‐income to join this neighborhood of upper income homeowners. 3. Provide housing that is harmonious in design and scale with the surrounding community. We plan 3 simple home with no garages which will fit in well with the existing neighborhood of well‐maintained primarily small ranch homes ሺsee attached pictures of neighborhoodሻ. The 3 homes will be set back from the road on a common driveway and not visible from the street. 800‐1000 sq ft homes in this area are common but mostly with full basements and some with garages. The homes will be 1300 sq ft with no basement and a small shed with each. Pioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 3 of 15 4. Intermingle affordable and market rate housing. These homes are in an existing residential neighborhood consisting of primarily market rate housing. 5. Ensure long-term affordability. The affordability of this home will be protected in perpetuity with a deed restriction. 6. Promote the use of existing buildings or construction on previously- developed or City-owned sites. This site was provided by the city of Northampton for the purpose of creating affordable housing. 7. Give priority to Northampton residents and employees, consistent with fair housing. For information about fair housing, please see Appendix B. We do not think it would be consistent with our affirmative fair housing plan to give priority to Northampton residents, but we will conduct marketing in Northampton to encourage applications from Northampton residents. 8. Provide the City credit for units under M.G.L. Chapter 40B. This house will be eligible for inclusion on the 40B inventory. The city of Northampton and Habitat have already completed the Local Action Unit application and Regulatory Agreement committing to this permanent affordability. 9. Provide housing that incorporates supportive services for those in need of services, including the homeless and persons with disabilities. Habitat for Humanity provides all our incoming homeowners with mentors to work with them through the process of sweat equity, construction and the first year of homeownership. This is especially important for a population that often comes from a family of renters who may not have experience with the details of what is required for successful long term homeownership. All our selected partnering families are also required to attend a first time home buyer education class which includes information on budgeting for homeownership. We will modify our sweat equity program to meet the abilities of any applicant in need of accommodations because of a disability. 10. Is LEED or Energy Star certified, complies with energy stretch code, and has a very low HERS rating. We plan to not only comply with ENERGY STAR and stretch code but to exceed it. We are targeting a zero HERS index goal through the use of extra insulation, excellent air sealing, LED or CFL lighting, ENERGY STAR appliances, mini‐split heating/cooling, an on‐demand ventilation system and solar photovoltaic panels. 11. Enhance nonprofit capacity for providing housing and related services. The cornerstone of the Habitat model is community volunteer building and engagement with local donors. The only drawback of volunteer‐led construction, is that we can only build 1 or 2 houses at a time. We are excited at trying this innovative idea of purchasing a factory built structure that will be finished on site by volunteers. The factory will provide a weather‐tight shell with rough plumbing, electrical, insulation, ducts and ventilation installed and our volunteers will install cabinets, fixtures, flooring, siding and paint. Piloting this hybrid approach allows us to experiment with ways to build faster without changing our philosophy of engaging homebuyers and community members in construction. It provides us the opportunity to explore expanding our capacity to serve more low income families. 12. Provide mixed-use development opportunities. N/A – these are single family homes in a residential neighborhood. Pioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 4 of 15 13. Provide housing in locations that promote walking, biking, and use of public transportation, and discourage single-occupancy vehicle trips. This suburban area of Northampton is adjacent to conservation land allowing for easy access to outdoor recreation without use of a vehicle. It is not conveniently located for public transportation but having 3 homes share a common driveway does allow opportunities for easy carpooling. 14. Provide housing for households with incomes below 80% of area median, and based on community need give special consideration for funding to projects which restrict at least some units to even lower income households including households with incomes below 50% or 30% of area median. The first buyers of these homes from Habitat will have an income less than 60% of the Area Median Income and the deed restriction will require future sales to buyers who earn less than 80% of the Area Median Income. This project is also well situated to address these general CPA criteria: 1. Serves more than one CPA program area. This parcel was originally created as part of a larger project by the city of Northampton that created conservation land adjacent to this lot. That overall vision of a balance of meeting open space and housing needs underlies the project. 2. Contributes to the preservation of Northampton’s unique character, boosts the vitality of the community, and enhances the quality of life for its residents. These homes clustered on the edge of the city highlight the proximity to both city life and outdoor recreation that is unique to the Pioneer Valley. Except for site clearing to allow for solar, these building lots will remain largely wooded and connected to the adjacent conservation space. Building on four lots created by the city instead of the 24 originally planned greatly reduces the impact of development on the neighborhood. 3. Addresses recommendations contained in the Sustainable Northampton comprehensive plan and/or the Northampton Open Space, Recreation, and Mixed Use Trail Plan 2011-2018 or is consistent with other city-wide planning efforts that have received broad-based scrutiny and input and can demonstrate wide community support. This project aligns with many of the recommendations of the Sustainable Northampton comprehensive plan including the creation of new housing that looks beyond traditional marketplace models to create affordable housing options, utilizing green and sustainable design strategies, creating new homeownership opportunities for households earning under 80% AMI, and expanding the range of options for detached housing. We are piloting this partnership with the modular home company to highlight that simple green homes are possible in Northampton at an affordable price. 4. Saves resources that would otherwise be threatened. Limited site clearing and the conservation of adjacent land demonstrate the balance between promoting both conservation and the city’s need for affordable housing options. 5. Serves under-served populations. Homeownership opportunities for 3 bedroom homes in Northampton available to those earning less than 60% of the Area Median Pioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 5 of 15 Income are very uncommon. Through a combination of subsidies ሺincluding a second mortgage from Habitatሻ the home buyers will have a first mortgage of approximately $86,000 with a second deferred, forgivable mortgage through Habitat. Zillow estimates the value of the house next door at 123 Glendale Rd Northampton to be $179,189. We provide an aspirational opportunity for low‐income families who can’t otherwise realize the strength, stability and self‐reliance that homeownership can provide. 6. Places high value on sustainable, ecologically responsible, energy- conserving structures, locations, and materials; demonstrates that the project minimizes the ecological footprint. Our modular partner Vermod has successfully built over 50 zero net energy possible homes in VT. They have used state of the art technology for ventilation and project monitoring. Through a partnership with the non‐profit Vermont Energy Investment Corporation ሺVEICሻ who has applied for a grant to bring Vermod homes to Massachusetts, we will have extensive energy monitoring and coaching for the homeowners. No building can achieve the goal of reaching zero net energy without the engagement of the homeowners in energy use reductions. Through their early engagement with Habitat and the additional technical assistance from VEIC these new homebuyers will be well educated on how to optimize the ecological benefit of their homes. 7. Receives endorsement by community groups, municipal boards and/or departments, and City residents. We have received the endorsement of the Northampton Affordable Housing Partnership, Easthampton Savings Bank, and local pastor Michael McSherry ሺsee attached letters of supportሻ. 8. Leverages additional public and/or private funds, or demonstrates that other funding sources are not readily available or sufficient. The budget for this project demonstrates our commitment to and need for pursuing funding from diversified sources including individual donors, local banks, businesses and foundations, state rebate programs ሺMassCECሻ, utility company rebates ሺMassSaveሻ, state banks ሺFederal Home Loan Bank of Bostonሻ and expert partners ሺVEICሻ. In their grant application to the Massachusetts Department of Energy Resources to bring Vermod built homes to Massachusetts, our partners at VEIC have included Pioneer Valley Habitat for Humanity in their budget to receive down payment assistance of $50,000 per unit for these homes. We expect to know this fall if funding has been awarded. Along with our innovative homeowner financing strategies and our recruitment of in kind donations, an investment of CPA funds will be well leveraged and necessary to closing the affordability gap for the very low income household that will build and buy this home. 9. Demonstrates a high benefit/cost value. For an investment of only $20,000/unit three new permanently affordable three‐bedroom zero net energy possible homeownership units will be created. 10. Can be implemented expeditiously and within budget. Pioneer Valley Habitat for Humanity owns all 3 building lots and has a track record of successful projects that come in on budget. Our strategy of working with a modular home builder with a similar track record of success will help us expedite completion of this project. Pioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 6 of 15 11. Advances a public purpose. Increasing the diversity of housing options in the city benefits the overall economic vitality of the city and the region. Q. What community need(s) does this project serve? If the project serves multiple needs and populations, please describe them. If the project serves a population that is currently underserved, please describe. Habitat proposes to create three new affordable homeownership opportunities for three households earning 60% of the Area Median Income. CPA grant funding will help us fill an important gap for making this home affordable to this low income population. Many renters in this income range will never experience the stability that homeownership provides given the fact that the median home price in Northampton is $275,000 ሺZillow.com 8/18/17ሻ and an affordable mortgage at today’s interest rates for someone earning $32,000/year is only about $113,000. $32,000/year is 40% of the Area Median Income for a family of four. We plan to sell the homes built at this project for $149,000 with a $86,000 first mortgage from a bank and a deferred forgivable mortgage from Habitat to make up the affordability gap ሺsee information on homebuyer financing belowሻ. Habitat has set a goal of developing more diversified housing options for a wider range of people in our community in a way that is integrated into existing neighborhoods. Including a range of home sizes from these 3 bedroom homes to our 1 bedroom small house project. This is in line with the priority housing need identified in the 2011 Northampton Housing Production plan to increase the supply of affordable housing at a variety of levels of affordability, including both rental and homeownership options. Q. What specific guarantees will assure the long-term preservation of the project? Pioneer Valley Habitat for Humanity commits to putting a deed restriction on the homes we build in this project so that the affordable housing dollars invested will not be lost and the home can remain affordable in perpetuity. In a city where the median home price is $275,000 ሺZillow, Sept 2017ሻ this is an important safeguard for having diverse and inclusive residential neighborhoods. Habitat and the city of Northampton have already signed a regulatory agreement committing these units to permanent affordability. Q. What community support does the project have? Explain the nature and level of the support. Habitat for Humanity relies deeply on community support for our model of community built housing with volunteer labor and in kind donations of building materials. While we cannot use 100% volunteers ሺwe need to hire specialty tradespeople like electricians and excavatorsሻ or 100% donated materials, the in kind support of time and materials allows us to keep our cash development costs low. In addition to this application for grant funding we are concurrently submitting applications to the Federal Home Loan Bank of Boston and the Community Foundation of Western Massachusetts for implementation grant support. We are also reaching out to the corporate, faith and banking communities and individual supporters. This project has already been permitted and gone through public hearings with the neighbors. Pioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 7 of 15 Q. How will the success of this project be measured? We will measure success of this project by asking the following questions:  Were we able to complete the project on time and on budget?  Were we able to find eligible homeowners who complete the purchase of their home from Habitat after completing sweat equity?  Does a hybrid model of partnering with a modular home company and using volunteer labor meet budget goals and goals of community engagement? Q. Is ongoing maintenance and upkeep required? If yes, please explain how this will be accomplished. All home upkeep after the sale of the houses will be the responsibility of the new homeowners. They will also join a homeowners association for maintenance of the common drive. Pioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 8 of 15 Project Budget: The total budget for this project, including specifically how CPA funds will be spent. All items of expenditure must be clearly identified. Include project quotes, or show why this is not appropriate or feasible. List any additional funding sources, either committed or under consideration. Include commitment letters if available. * If the application submission is for a community housing project, please submit a development budget and a sources and uses budget. Also, community housing home ownership projects shall include an affordability analysis, and community housing rental projects shall include a five-year operating budget. Pioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 9 of 15 Homebuyer Financing Habitat’s typical model is to provide near 100% financing ሺafter a $700 down paymentሻ with a zero interest mortgage loan from Habitat as the first mortgage. Instead, for this project for the first time we are introducing the combination of a fixed rate 30‐year mortgage from a local bank for $86,000 and a deferred forgivable loan from Habitat for $62,300. We are able to offer the same monthly payments to the homebuyer as if we had provided a zero interest mortgage for the sales price, but this method provides Habitat with better cash flow. The second mortgage from Habitat will be forgiven at a rate of 5% each year for 20 years and would only have to be repaid if the homeowners move out before 20 years in the house. If the homeowner moved before 20 years they would repay the second mortgage to Habitat with proceeds from the sale of the house, but unlike a balloon payment it would be forgiven if the sale would not cover the loan amount. Here is a schedule showing what would be owed on the second mortgage from Habitat based on how many years were spent in the house: Years in House  since purchase  Amount Due on  Resale  1 year                59,185   2 years                 56,070   3 years                52,955   4 years                 49,840   5 years                46,725   6 years                 43,610   7 years                40,495   8 years                 37,380   9 years                34,265   10 years                 31,150   11 years                28,035   12 years                 24,920   13 years                21,805   14 years                 18,690   15 years                15,575   16 years                 12,460   17 years                   9,345   18 years                    6,230   19 years                   3,115   20 years                          ‐     Pioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 10 of 15 Affordability Analysis Homebuyer Income ‐ family of 4  40% AMI   annual income              32,000    Monthly Income               2,667    30% of monthly Income                   800      Projected Monthly Expenses    First Mortgage (4% on $86,000)                   411    Habitat Second Mortgage (Deferred)                     ‐   Taxes (2017 Tax Rate * 149,000 sale price)                    207    Insurance (sale price * 6%)                      89    Driveway Maintenance agreement                      50    Total Estimated Housing Costs                   757   Percentage of Income Projected            28%  Multi-Year Funding: If the project is expected to continue over more than one year, or if bonding the project is anticipated, please provide annual funding requirements. This project will continue over more than one year ሺsee construction schedule belowሻ but is only requesting a single disbursement from CPA. Project Timeline: Explain the various steps of the project and when they will be completed. Glendale Rd Projected Construction  Schedule             Task Who Start  Days  End  clear Site Site Contractor 1‐Jan‐18 150  31‐May‐18  excavate for found, conduit, water, and septic  Site Contractor 1‐Aug‐18  14  15‐Aug‐18  pour footings & foundation walls Foundation Contractor 16‐Aug‐18  7  23‐Aug‐18  insulate interior foundation walls Volunteers 24‐Aug‐18  2  26‐Aug‐18  backfill foundation exterior and interior Site Contractor 27‐Aug‐18  7  3‐Sep‐18  install base for driveway, parking and walkways Site Contractor 4‐Sep‐18  2  6‐Sep‐18  install under slab plumbing Plumbing contractor 4‐Sep‐18  7  11‐Sep‐18  insulate under slab Volunteers 12‐Sep‐18  7  19‐Sep‐18  install pier forms  Site Contractor or  Volunteers  13‐Sep‐18  7  20‐Sep‐18  pour slab  Slab Contractor 20‐Sep‐18  7  27‐Sep‐18  fill pier forms for sheds and porches  Slab Contractor or  Volunteers  20‐Sep‐18  1  21‐Sep‐18  connect to town water site contractor 21‐Sep‐18  7  28‐Sep‐18  install septic site contractor 29‐Sep‐18  14  13‐Oct‐18  Pioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 11 of 15 modular Set Vermod crew 14‐Oct‐18  14  28‐Oct‐18  hook up main electrical service Electrical Contractor 29‐Oct‐18  7  5‐Nov‐18  solar panel installation and hook up PV2 6‐Nov‐18  7  13‐Nov‐18  build sheds Volunteers 29‐Oct‐18  14  12‐Nov‐18  frame interior walls Volunteers 13‐Nov‐18  21  4‐Dec‐18  sheetrock interior walls Volunteers 5‐Dec‐18  14  19‐Dec‐18  interior window trim & interior doors Volunteers 20‐Dec‐18  21  10‐Jan‐19  paint interior Volunteers 11‐Jan‐19 14 25‐Jan‐19  flooring installation Volunteers 26‐Jan‐19  14  9‐Feb‐19  baseboard Volunteers 10‐Feb‐19  7  17‐Feb‐19  kitchen and bath shelves Volunteers 18‐Feb‐19  7  25‐Feb‐19  final electric Electrical Contractor 26‐Feb‐19  14  12‐Mar‐19  final HVAC HVAC Contractor 13‐Mar‐19  14  27‐Mar‐19  kitchen countertops Skilled Volunteers 28‐Mar‐19  7  4‐Apr‐19  final plumbing Plumbing contractor 5‐Apr‐19  14  19‐Apr‐19  install appliances Volunteers 20‐Apr‐19  7  27‐Apr‐19  finish grading, driveway, parking, loam, seed Site Contractor 28‐Apr‐19  7  5‐May‐19  final inspections & occupancy permit Inspector 6‐May‐19  7  13‐May‐19  punch list Volunteers 14‐May‐19  14 28‐May‐19  Feasibility: List and explain all further actions or steps that will be required for completion of the project, such as environmental assessments, zoning or other permits and approvals, agreement on terms of any required conservation, affordability or historic preservation agreements, subordination agreements, and any known or potential barriers or impediments to project implementation. Prior to Habitat acquiring the property the city went before the planning board to amend a previously approved cluster development for 24 lots. The amended plan included conserving most of the land and creating four building lots and was approved. With zoning permits in hand, we are well positioned to move forward expeditiously. Habitat will need to apply for a building permit. We have put in several applications for funding ሺincluding this one!ሻ that we will need to hear back on before moving forward. Building affordable homes on these lots is not in any doubt, but our specific strategy of partnering with VEIC to deploy the factory built Vermod homes is contingent upon VEIC receiving a grant from the Massachusetts Department of Energy Resources ሺMA DOERሻ. VEIC and Vermod have an excellent track record for their manufactured housing program in VT and we have a high level of confidence they will be successful in their application in which they have specifically named Habitat as a partner. If funding was not available for the modular strategy we would likely build on‐site with a slower construction schedule. We can provide CPC with a schedule update in the unlikely event that our strategy for these lots needs to change. Pioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 12 of 15 Maps: USGS topographical map, assessors map, or other map as appropriate, showing location of the project. Visual materials: Photographs, renderings or design plans of the site, building, structure or other subject for which the application is made. The hatched area above is the land that the city is putting into conservation. Lots 2, 3 & 4 are the parcels that share a common driveway and will be part of this project. Habitat will build on lot 1 in a second project phase in the future. Pioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 13 of 15 Neighborhood Pictures Pioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 14 of 15 Draft building plans copyright 2015 Vermod LLC The house will be delivered in two boxes from Vermod and have a 48’ x 14’ footprint. Final interior design TBD. Pioneer Valley Habitat for Humanity – Glendale Rd Northampton Page 15 of 15 Include the following attachments, if applicable and available: 1. Record plans of the land – ANR Book 238 Page 30 2. Natural resource limitations – Determination of Applicability 3. Zoning – Planning Decision 4. Inspection reports – n/a 5. 21E Reports and other environmental assessment reports – Phase 1 Environmental Assessment 6. Mass. Historic Commission Historic inventory sheet – n/a 7. Historic structure report or existing condition reports – n/a 8. Existing conditions report – n/a 9. Names and addresses of project architects, contractors, and consultants – attached 10. Evidence that appropriate professional standards will be followed if construction, restoration or rehabilitation is proposed - Organizational overview of Pioneer Valley Habitat for Humanity attached. We have a 37‐year history of quality construction and are happy to provide any additional information upon request. 11. Documentation that you have control over the site, such as Purchase and Sale agreement, option, or deed; or explanation of how the proposed project will proceed in the absence of site control. – Deed from Northampton to Mineral Hills Realty, LLC attached along with an organization chart explaining that Pioneer Valley Habitat for Humanity is the sole member of the Mineral Hills Realty, LLC 12. Evidence that the proposed site is free of hazardous materials or that there is a plan for assessment and/or remediation in place – see phase 1 environmental report under #5 13. Letters of support sufficient to document clear endorsement by community members and groups, and, where appropriate, by municipal boards and departments. a. Northampton Housing Partnership – approved at 9/11/17 meeting, letter to be sent b. Easthampton Savings Bank – attached c. Michael McSherry – to be sent 14. Any other information useful for the Committee in considering the project a. Thank you for considering our application, we are happy to supply any additional information as requested.