Press Release

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FOR MORE INFORMATION PLEASE CONTACT:

Erik Thelen, Regional Property Manager

Maloney Properties

27 Mica Lane

Wellesley, MA 02481-1707

Phone: 781-943-0200 ext. 241

Email: ethelen@maloneyproperties.com

FOR IMMEDIATE RELEASE

Rising costs, waning funding bring tough choices for affordable housing agencies

BOSTON, June 10, 2005-- Recent utility hikes, deferred maintenance needs, and decreasing public subsidies for affordable housing are forcing managers at Oak Terrace Apartments to raise the rent for their market-rate, moderate, and low-income units this summer in order to sustain the long-term affordability of the residences.  Oak Terrace Corporation (OTC), the entity charged with overseeing the mixed-income property, and Maloney Properties, the property managers, are committed to working with residents to find individual solutions that might ease the burden on those hardest hit by the rent increases.  

Affordable housing agencies across the country face similar dilemmas as federal and state legislators continue to slash budgets for housing assistance.  Little respite is in sight.  Next year’s federal budget will under-fund the Section 8 program, which has been a key support for many low-income families in the past.  At the same time that housing market rates soar in Boston and elsewhere, the Department of Housing and Urban Development will be decreasing the “fair market rent” standard for Boston’s Section 8 vouchers.  This will reduce the rent that landlords receive from the Boston Housing Authority, which could result in higher rents for tenants and refusal of Section 8 vouchers by landlords.  The Romney administration has proposed changing the Massachusetts Rental Voucher Program (MRVP) or the state’s Section 8 program by implementing a consecutive three-year time limit and institutionalizing work requirements. 

The effects of these cuts are exacerbated by sky rocketing utility and maintenance costs.  In 2005, Oak Terrace property managers calculated utility cost increases of 22%, 26%, and 3% for gas, electric, and water, respectively.  At the same time, tenants’ needs for building maintenance and services, place demands on the building’s budget.  “Ultimately, the only way to preserve the long-term affordability of the building is to responsibly maintain a sound, balanced budget and address all the physical needs in the building in a timely, adequate manner.  As costs increase and public monies decrease, we are forced to look at increasing rental income,” noted Oak Terrace board member and resident, Hannah Goon.

Initial rent increases were announced for April 1; however, it became clear that the initial proposal would put some tenants in a difficult financial position.  The Oak Terrace property managers held three tenant meetings to listen to and address tenants’ concerns about the proposed rent increases and the property in general.  They investigated several mechanisms for keeping the rent increases low, such as collecting back payments from the Boston Housing Authority, working with different utility companies to apply for additional subsidy programs, and applying for a tax abatement.  The tenants, with the help of the Chinese Progressive Association, explored different means to lower the rent increases and cut overall building expenses.  As a result of this process, OTC and the moderate-rate tenants came to a mutual agreement allowing for the lowest rent increases possible while maintaining a fiscally sound budget.

“We are happy that we could work out an arrangement with the tenants where the building can maintain long-term affordability and where the current tenants believe the increase is justified,” commented Stanley Wong, another Oak Terrace resident and board member.   “We hope that the Tenants who organized around the rent increases will now play an active role in the maintenance of the building to help us decrease costs and help keep rents low in the future.”

In an effort to promote an atmosphere of mutual trust, the property managers plan to continue meeting with tenants to discuss any developments or events that could significantly impact the Oak Terrace budget and how they might affect future rent increases.  OTC has also offered to work with individuals and families to find solutions for those most burdened by the rent increases.  This is particularly important for those tenants currently in moderate-rate units whose income levels suggest that they should be seeking Section 8 housing.

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