WORCESTER, MA — The Worcester City Council this week accepted a new spending plan for the city's $146 million pandemic federal stimulus allotment, which includes money for housing that advocates say will help as homelessness and housing costs continue to rise locally.
Inside a $146 million spending plan, Worcester City Manager Edward Augustus Jr. has set aside $28 million for housing initiatives. Worcester will also get $5.9 million from the federal Home Investment Partnership Program, which funds affordable housing.
The $28 million is more than double what Augustus had initially proposed to spend on housing over the summer. Worcester held a series of public meetings in recent months seeking input about the stimulus spending. Housing advocates had asked Augustus to set aside at least 20 percent of the total allotment, which the new figure comes close to.
Central Massachusetts Housing Alliance Executive Director Leah Bradley said the spending plan will address an array of housing issues in Worcester, like building new affordable units, moving chronically homeless people into permanent homes and homeownership for city residents of color.
"[The plan] is so broad-based," Bradley said. "Housing is currently our greatest need in the community based on the impacts of COVID-19."
The federal government began distributing $350 billion in ARPA funds to states and cities in the spring. The money has some limitations, and in general has to be spent on pandemic recovery and infrastructure. Worcester has seen an increase in homeless residents compared to 2020.
Here's a breakdown of the housing spend in Worcester's ARPA plan:
$15 million for the affordable housing trust fund: Worcester began the process of setting up the trust fund this year. State law says that municipal housing trust funds can be used to fund private development of affordable housing, rehabbing existing homes and low-income homebuyer assistance, among other programs.
$2.5 million for housing rehab: The city estimates about 100 owner-occupied rental properties will be able to make upgrades with this money.
$2.5 million for first-time homebuyers: The city estimates this money will lead to 33 new homes for first-time homebuyers in census tracts with low homeownership among people of color.
$4 million to house the chronically homeless: About $1.5 million will be used for a development at 38 Lewis St. with 24 studio units for the chronically homeless. The rest will be set aside for similar projects in the future.
$1.5 million for lead abatement: This will fund lead abatement in about 160 housing units in Worcester. The city has a separate $5.6 million grant from the federal government for lead abatement that will treat about 238 units, but that grant is restricted to only very low-income properties. There are an estimated 53,000 units in Worcester with lead paint.
$1.5 million for down payment assistance: Potential homebuyers earning 110 percent of the area median income will be eligible for up to $10,000 in down payment assistance. In many cases, homebuyers need to have a down payment of about 20 percent of the sale price. An FHA mortgage can go as low as 3.5 percent, which would be $10,500 for a home valued at $300,000. The city estimates 150 first-time homebuyers will be able to use this pot of money.
$750 for capital projects: The Worcester Housing Authority will use this money to make repairs and upgrades at public housing sites across the city.
$250,000 for flood insurance: Augustus said this money will target homes in the flood-prone Green Island area. Flood insurance, purchased separately from standard home insurance, can be prohibitively expensive. About 150 homeowners will be able to get a flood insurance policy with the money, according to the city.