Vacancies at Morgan Woods reflect ironic twist in housing market
Inside the rental office of the Morgan Woods development in Edgartown, property manager Jessica Burgoyne keeps a box of tissues on the table where she talks to tenants. These days, she replaces the tissues often.
As the nation's distressed economy depletes savings, eliminates jobs, and curbs consumer spending, the financial strains on residents of Morgan Woods stretch to the breaking point and beyond.
There are vacancies at Morgan Woods, some because tenant incomes have fallen and they cannot afford rentals, and some because less expensive private rentals compete for tenants.
Photo by Steve Myrick
This winter, a few families who rented the newly constructed apartments have been forced to move out. The two-income families among them suddenly became one-income families. Extra hours dried up. Some lost one or two of their part-time jobs, or just ran into a bit of bad luck. These blows to already fragile family budgets have pushed even heavily subsidized rents in the award-winning affordable housing development beyond the means to pay for those families.
On the other end of the scale, a few apartments at Morgan Woods sit empty. Those vacant units, which are available under federal guidelines only to families that earn substantially more than the area median income, are priced higher than privately owned apartments now available on the open market.
"It has been years since I've seen a year-round rental for less than a thousand dollars," said Janet Hathaway, chairman of the Edgartown affordable housing committee. "That's what we're competing with."
In a cruel twist of economic fate, the nationwide bust in the housing market, combined with the particular and sometimes bizarre affordability gap in housing on Martha's Vineyard, has made some affordable housing unaffordable for the working class families it was intended to help.
"It's very difficult to have vacant units right now, and not be able to house some of these families that are in desperate need," said Ms. Burgoyne. "I live here. This is not only my job, it's my neighborhood. It's doubly difficult when I have units that I can't offer to hard-working Island families."
Need for a neighborhood
Named for Fred "Ted" Morgan, a former long-time selectman and tireless advocate for affordable housing, Morgan Woods was completed in the spring of 2007. It is the largest affordable rental housing development on Martha's Vineyard. A total of 60 apartments with broad front porches are clustered around three neatly landscaped common areas designed to promote a sense of community. It sits on 12 acres of land leased by the town for a nominal fee to the Community Builders Inc., which built, owns, and manages the development. The Community Builders bills itself as the nation's largest non-profit affordable housing developer. Morgan Woods was financed by a consortium of public and private investors, at a development cost of $16 million, according to Community Builders.
Housing advocates here offer high praise for the efforts of Edgartown's government boards and committees to establish affordable housing, and Morgan Woods is the most visible accomplishment of the town's efforts.
It was designed as a mixed-income development to help working families that found it virtually impossible to find year-round housing in local communities.
"Morgan Woods is not philanthropy," said Alan Gowell, a member of the town's affordable housing committee. When he was involved in the town's efforts to establish the development, he kept the image of a family headed by two school teachers in his mind. "We were especially sensitive to the needs of households with middle-income earners," he said.
Morgan Woods was modeled on the same formula used for similar projects before and since. The apartments are assigned by lottery to residents with a range of incomes, according to guidelines set by the U.S. Department of Housing and Urban Development. As in most projects, the developers received subsidies in the forms of government funds, tax incentives, and land at less then market value. In theory, that allows the developer to rent the homes or apartments they build at less then market rates. The public benefits because working families who form the fabric of the community - the teachers, tradesmen, store clerks, artists, clergymen, and many others - can afford to live here, rather than have to move to a place where the cost of living is more closely aligned with lower and middle incomes.
Formula in flux
The hitch comes when market values go haywire. The financial crisis roiling through world markets has affected property values, credit availability, and employment, three things that are critical to the affordable housing formula.
Currently at Morgan Woods, a three-bedroom apartment with a monthly rent of $1,938, and two two-bedroom apartments at $1,662 are vacant. Unlike a private sector renter, the Community Builders cannot simply lower rents to attract families. The prices are locked in under the agreement that granted the developer tax incentives and grants.
There is some disagreement among local housing advocates about including units for people who earn well above the area median income under the umbrella of affordable housing, those who might qualify for the vacant units at Morgan Woods.
Under current guidelines set by the federal government, the area median income for a family of four on Martha's Vineyard is $66,100. That family could earn up to $92,500 and qualify for one of the Morgan Woods units set aside for those earning 140 percent of the median income.
"To call that affordable, you could get laughed out of most of communities in this country," said David Vigneault, executive director of the Dukes County Regional Housing Authority.
Only seven towns in Massachusetts are allowed to include incomes that high in affordable housing developments. Those are the six towns on Martha's Vineyard and Nantucket. That is a reflection of the recent real estate boom fueled by wealthy visitors buying second homes, and vacationers willing to pay top prices for weekly rentals in the summer season.
"We believed affordable housing in Edgartown should include people up to 140 percent of area median income, which has been the policy across the Vineyard," said Mr. Gowell. "That's a number, by the way, blessed by the state legislature."
Mr. Gowell points the rental history of Morgan Woods as evidence of the success of mixed income development. Until recently, there were waiting lists for every level of the median income guidelines.
But there is also evidence that the need is waning at the higher end of the scale, while the need at the lower end is growing. In the recent lottery for nine new homes in Edgartown's Jenny Lane affordable housing development, several homes were filled with no lottery at all. For three of the homes, only one qualified applicant fit the necessary income profiles at the high end of the scale. Yet at Morgan Woods, and all other affordable housing stock on Martha's Vineyard, the demand for lower priced housing remains incredibly high. Ms. Burgoyne has a list of approximately 175 qualified families waiting for a chance at the lower priced apartments. "I got four more applications today," she said recently. Those four will go in a pile with the 25 others waiting for processing. "I'm inundated with applications."
"That's what really tells the story," said Mr. Gowell. "The crisis hasn't gone away."
Affordable irony
The change in the housing market has advocates rethinking how best to use scarce resources. In Edgartown, the affordable housing committee is in the ironic position of considering the regional housing authority's rental assistance program to help fill vacant apartments at Morgan Woods.
"We didn't expect to be trying to fill those units with rental assistance money," said Ms. Hathaway. "When we set money aside, we're going to set it aside where it's needed most."
The rental assistance program supplements rents for income-qualified Island residents. It is funded in part from Community Preservation Act (CPA) funds allocated by the various towns.
According to Mr. Vigneault, 41 Edgartown families currently receive rental assistance, supplementing market rate rents in privately owned properties.
"We should reconsider the wisdom of subsidizing rents on houses in other parts of Edgartown, when we have vacancies at Morgan Woods," said Mr. Gowell.
Edgartown plans to increase its allocation of CPA funds for the rental assistance program by 24 percent this year. West Tisbury more than doubled its allocation, while the rest of Martha's Vineyard's towns have level-funded or slightly increased the CPA money that goes to the rental assistance program.
