Community Development Block Grant
Success Stories

Holyoke, MA - Mayor Daniel J. Szostkiewicz

Increasing Homeownership Initiative

Since the earliest days of the CDBG program, Holyoke has placed great emphasis on providing affordable housing, using an average of 60 percent of its CDBG entitlement for housing purposes. In Holyoke, the housing stock is approximately 60 percent renter units and 40 percent owner units - the inverse of national averages. This has led to a decade-long effort to balance the needs of renters with the goal of increasing opportunities for homeownership and providing aid to existing owners. Four approaches have been taken:

Increasing Homeownership via New Construction - CDBG funds were first used in the new construction of single and duplex units in 1976 - the Northbridge Homes - and continue to be used today for the West Street Homes. Homes are usually constructed as in-fill housing in established neighborhoods. A discounted sales price makes these units affordable for lower-income households. The net cost of a unit to the City's CDBG program is currently about $60,000. To date, 56 duplexes and 20 condominiums have been built and sold. The development agency, Olde Holyoke Development Corporation (OHCD), reports no mortgage defaults in 22 years.

Increasing Homeownership via Rehabilitation - Since 1975, Holyoke has used CDBG funds to preserve the existing housing stock by acquiring, rehabilitating and selling existing one- and two-family homes; this effort began in the mid-1970s with OHDC and the Hadley Mills Townhouses. In 1990, the Holyoke Community Land Trust (HCLT) became involved. In the case of HCLT, the ownership of the land on which the unit sits is retained by HCLT and is leased to the unit's buyer for 99 years through ground lease provisions. These provisions also limit owner equity, thus ensuring affordability upon resale in perpetuity. To date, OHDC has rehabilitated and sold 34 units. HCLT has completed 18 units, has six in construction, and is presently negotiating the purchase of two additional units.

Increasing Homeownership via Education and Acquisition Assistance - Holyoke uses its CDBG public service allocation to fund workshops for potential first-time home buyers. The workshops, which consist of four to five classes each, are intended to help prospective home buyers find and finance a home and understand the responsibility of owning a home. Successful graduates become eligible for down payment and/or closing cost assistance which is funded through the HOME program. The City and Hampden-Hampshire Housing Partnership, which hosts the workshops, believe that this education is important to persons contemplating first-time homeownership because it gives them what they need to know to make homeownership a reality. So far, about 30 households have purchased homes in Holyoke with this assistance.

Stabilizing Existing Ownership via Reinvestment Incentives - In 1976, the Neighborhood Improvement Program began providing grants to lower-income homeowners to help finance home improvements. Eligible activities include elimination of code violations and replacement of major mechanical systems. The grant amount can be as much as 60 percent of the cost of the work, based upon the owner's income. Administered by OHDC, the Program has made 2,144 grants totaling almost $1,995,000 in CDBG funds. This investment has leveraged nearly $6 million in improvements to existing owner-occupied housing.

Contact: William Murphy, Administrator, Office of Community Development, (413) 534-2230

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The United States Conference of Mayors

J. Thomas Cochran, Executive Director
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