The Citizens Housing and Planning Association, a Boston-based housing advocacy group, is marching to Beacon Hill with a proposal to insure that owners in “affordable” condos in new developments aren’t treated like second-class citizens by their more affluent neighbors.

While CHAPA is agitating for equity, a group of low-income Boston condo owners is suing in Massachusetts Land Court over the same issue. But they’re arguing to the judge that it’s unfair that they are being treated the same as everyone else in their building.

Fairness is a fickle thing. For seven affordable condo unit owners in the South End’s Building who are suing their association in an attempt to lower their fees, it looks like Judge Charles Trombley Jr. will have to define what’s fair.

At issue is what’s the right treatment for people who buy condos set aside as “affordable” in developments and conversions. Frequently, in order to get zoning approval for such projects, developers set aside a certain percentage of their units for sale not at market value, but at lower values in order to provide “affordable” housing for lower-income buyers.

Massachusetts’ laws state that condo fees should be based on “fair value.” The affordable owners at the Warren-Clarendon bought their 10 available units for around one-quarter of the price of the other 16 market-rate units.

Now they say they want to be treated differently from the market-rate buyers: they want lower condo fees in exchange for giving up much of their voting rights. That’s a tradeoff the affordable owners say is a bargain. Their voice, they say, is already irrelevant: There is so much contention between affordable-unit owners and market-rate owners in the building, no one listens.

“They already don’t have any friends in the condo association,” said David Fried, the lawyer representing the affordable-unit owners. “Relations couldn’t be worse than they already are.”

 

Here Comes CHAPA

CHAPA’s bill would allow developers to decide who pays what in fees, as determined by square footage, the exact situation the Warren-Clarendon owners are in right now.

According to CHAPA, and the Warren-Clarendon building not withstanding, in most mixed-income buildings affordable-unit owners pay lower fees, but have lesser voting rights as a result.

Their plainly-stated motive behind the bill – sponsored by Rep. Alice Peisch (D-Wellesley) and Sen. Cynthia Stone Creem (D-Newton) – is to make sure that affordable-unit owners don’t feel like second-class citizens.

“What were really trying to do in the voting issue is reduce that tension when people who are living side-by-side are paying different voting fees,” said Sean Caron, CHAPA’s director of public policy. “I don’t think our bill would be a panacea to fix all things in relation to condo fees and affordable units. What we’re trying to do is to provide some flexibility going forward [for developers and condo associations].”

That’s CHAPA’s mission: to encourage the production and preservation of housing that is affordable to low-income families and individuals, at least according to their Web site.

 

Fair Is … Fair?

The crux of the issue is the ambiguous language in the state’s condo statute.

Ed Allcock, the lawyer representing Warren-Clarendon’s condo association, said the statute is ambiguously written on purpose, in order to give developers leeway in factoring condo association fees.

“If you read [the statute’s language] as ‘fair market value as of the date of the master deed,’ it would seem that you need different percentages,” Allcock said. “But you have to look at the language of the statute. It doesn’t say ‘fair-market value.’ Is there a reason that the word ‘market’ isn’t in there?”

Allcock also said using the word ‘approximate’ in the statute means the calculation of percentage interest can’t be an exact science.

He said everyone was given equal stake in the deed at the request of the Boston Redevelopment Authority (BRA), who sold the property to the developer when the building was finished in 1987.

The BRA made that request to ensure there wasn’t tension between the two sets of owners over diminished voting rights.

Fried said his clients are mostly the original owners, many of whom are older and have health issues. When they bought the units in the first place, they had to qualify by having less than 80 percent of the area median income in 1987.

So when the affordable-unit owners were hit with a special assessment for roof repairs, they couldn’t pay for a charge they felt wasn’t, well, fair.

“It was very difficult for them on their small and fixed incomes,” Fried said. “The special assessments were unfair because work was largely for benefit of owners of unrestricted units with roof decks.”

Fried said that if his clients lose the lawsuit, they could be forced from their homes, unable to pay for any more special assessments that are bound to come in repairing the 20-year-old building. If they win, their stake will be reduced by about half. Allcock said the affordable-unit owners all receive the exact same benefits of shared insurance, utilities, landscaping and caretaking in the building as the rest of the residents. He said it would be unfair to put an extra burden on the market-rate owners to pay for the services that everyone in the building uses.

 

Owners Sue To Become Second-Class Tenants

by Banker & Tradesman time to read: 4 min
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