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PRESERVATION OF AFFORDABLE HOUSING
 A Northgate’s Success Story
Northgate teen center
Threat
With 336 apartments, Northgate is the State of Vermont’s largest affordable housing development. In 1986, a heated rental market in Burlington made Northgate an extremely valuable property. Northgate had been built in 1969 using federal funds which required that the property remain affordable for 20 years. With the twenty year mark rapidly approaching, the property could have been converted to market rate condominiums, and tenants faced the very real threat of displacement or doubling rent.
Vermont’s most important resource – its people and its communities
The project assumed a high profile as policy makers, politicians, residents and community members grappled with how to save this important housing resource. The original Northgate was the symbol of a failed federal housing policy in which millions of public subsidy had been invested in a property that provided short term benefits, and the return on this public investment flowed entirely to the for-profit owner of the property. The goal was to change Northgate into a symbol of smart public investment that delivered long term results.
The City of Burlington leads the way
The City of Burlington, lead by Mayor Bernie Sanders and then-CEDO Director Peter Clavelle responded to resident’s cry for help. The City Community and Economic Development Office (CEDO) lead efforts to develop a strategy to accomplish the principles set by the resident’s association:
- No resident displacement
- Rents would not exceed 30% of household income, including utilities
- Ownership would insure rental or affordable homeownership
- Rehabilitation to reduce energy and maintenance costs, and assure soundness of major systems
The City passed a resolution in support of saving Northgate, and directed CEDO to form a task force and to use its resources to insure that Northgate remained affordable. An ordinance was passed by the City, giving residents much needed notice and a protected period of time before a property could be converted from rental housing to condominiums.
Vermont Housing and Conservation Board – Vermont’s investment in the future
Northgate was in the spotlight when the Vermont Housing and Conservation Board (VHCB) was created in 1987. The Northgate example underscored the reasons why public dollars must ensure long term benefits to the public. VHCB funds require a commitment to permanent affordability and Northgate received one of its first loans. This investment has served the state well; today Northgate is a national model of success.
Creating a new model of affordable housing
The residents of Northgate organized and created public awareness of the threat to their homes. A comprehensive redevelopment plan was created. The City of Burlington made the preservation of Northgate a priority, and spearheaded a task force dedicated to its preservation. The Vermont Housing Finance Agency, along with VHCB and the City housing organizations, took an active role in the preservation efforts.
Success!
With the support of the City and the State, Northgate residents and the task force began a two year process to purchase the property. In 1989, the property was purchased by a partnership established by two non-profit organizations. Northgate Housing Inc, the tenant controlled Managing General Partner and a subsidiary of Housing Vermont. Together the two organizations:
- Leveraged over 17 million dollars in tax credits, HUD and other financing
- Completed a $3,000,000 renovation and energy conversion –creating good construction jobs and long-lasting improvements to the property
- Set public policy for the preservation of HUD funded affordable housing throughout the country
- Gave residents majority representation on the Board of Directors of the managing general partner (NHI)
- Ensured the long-term affordability of Northgate
20 Years later
- the success continues, investment pays offs, and residents take over control and ownership
In 2006 the affordability requirements of the tax credit program expired. Residents were able to collectively buyout the development from the partnerships and it became Northgate Residents’ Ownership Corporation (NROC) in March of 2008. Northgate is now completely resident owned and controlled.
- NROC continues to meet and exceed the affordability goals without requiring any additional funding from the State.
- The equity investors in the partnership donated their interest to the non-profits, securing the on-going affordability at Northgate
- Northgate is even more affordable now than 15 years ago
- Northgate is beginning another 3 million dollars of rehabilitation –primarily paid out of project reserves –no profit was taken out of the project
- For over 15 years, the majority of the directors on the Board have been residents, now 9 out of 13 NROC Board Directors are residents
- Many residents have lived in Northgate for over 20 years, creating a great neighborhood, home to families from 14 different nationalities
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