Housing Group Buys Harvard Building

Harvard has sold a rent-controlled apartment building at a loss to a company that promises to either let the tenants stay on at controlled rents, or accept new tenants under federal subsidies.

Harvard sold 18-20 Ware St. to Cambridge Community Housing, Inc. (CCHI) this October for $850,000--far below the building's assessed value of $2.1 million, according to Harvard officials.

Executives of the housing organization said they would bring in a tenant under the federal Section 8 housing subsidy program each time an apartment opened up. Units would return to rent control if their subsidized tenants left.

Tenants under Section 8 pay only 30 percent of their income in rent, while the government pays the rest, after agreeing on a rate with the landlord, said Peter Daly, executive director of Homeowners' Rehabilitation Inc. (HRI), a non-profit organization that operates CCHI.

He said that under some forms of the program, CCHI could receive higher rents from the subsidized units than from the rent-controlled ones--bringing added income to the organization.

In addition, Harvard is still pursuing an application for a rent increase before the city Rent Control Board. The rent hike would compensate for capital improvements in the building, said Harvard Planning Director Kathy Spiegelman. The increase would be the third in 10 years.

Tenant activist William S. Noble said Harvard may have wanted to "increase the cash flow for the new buyer. They wouldn't have needed to raise rents if they wanted to keep ownership."

But Spiegelman and HRI representatives said the building's lowered price would have attracted the rehabilitation company in any case.

In addition, Kennedy said she feared the new owners would try to attract many of the subsidized tenants because they would be more profitable--and that the effort would push out rent-control tenants who could not afford market-rate rents but did not qualify for the subsidies.

Choice After Lease

According to tenants and Harvard officials, the University bought the building 10 years ago, then sold it to a company called the Neighborhood Realty Trust. The University then leased the building for 10 years, with an option to buy it back, return it to the owners or sell it at the end of that time.

Harvard Planning Director Kathy Spiegelman said Harvard decided to sell the building because "we had made a commitment to the city not to purchase the residential buildings beyond a certain area," referring to Harvard's 1975 agreement to stay within a "red line" surrounding the campus.

A year before the lease expired, Harvard asked city officials for help finding a buyer for the building, and they referred the University to HRI, said Spiegelman.

CCHI, the building's new owner, is a new company run jointly by HRI and Cambridge Neighborhood Association Housing Services, a non-profit organization dedicated to the preservation of affordable rent-controlled housing. The two parent groups share staff but have different boards, said Daly, who directs both.

Meanwhile, several tenants said CCHI has appeared secretive in its dealings with them, refusing to show them an architectural study that HRI commissioned a year ago when it was looking into purchasing the building, said Kennedy.

David Koven, program coordinator of HRI, told the tenants before the purchase that he would show them the report, but he now refuses do so, said Kennedy. Reached this week, Koven said the evaluation "was done for our internal use only."

In addition, CCHI and Harvard gave a party on November 9 to celebrate "the preservation of affordable housing" through the sale. Kennedy and tenant Frank Farley said they never received invitations.

But Daly said he did invite tenants, and called the party "an open house in which we could publicly acknowledge our thanks to Harvard for selling the building at a below-market price and our thanks to our lenders."

HRI's other current projects include the rehabilitation of a six-unit cooperative housing building at ten Laurel St. and a mixed-income housing limited equity condominium at 125 Portland St., said Koven.