Case Study

The First 100 Years of Danube Apartments 

6 min read

A Long History of Affordable Housing Apartments in Boston 

The Danube Apartments are a keeper. The buildings have been around for 100 years in various zip codes of Boston, with two Low Income Housing Tax Credit allocations and several Historic Tax Credit awards keeping them up to snuff. A family business, headed by father and daughter, has owned and operated the units since 1968. Staff and tenants have stayed for decades. 

Martha Abrams-Bell, president and treasurer of The Abrams Development Company LLC (ADC), says 25 percent of current tenants have been in place for years or even decades before a 1996 rehab. And half of the current residents have been at Danube Apartments for ten years or longer. 

She tells a story that underlines this aspect of the 64 scattered site affordable housing units in Dorchester and Jamaica Plain, MA. 

In 1995, nearly 30 years after Edwin “Ed” D. Abrams, founder of The Abrams Management Company, Inc. (AMC), acquired the buildings using a Department of Housing and Urban Development 221 (d)(4) multifamily loan and subsidies from the Boston Housing Authority, which were rolled in a few years later, the time had come for a major rehab of the aging, mostly Section 8 properties (there are four of them, all originally apartment buildings, none within view of each other, “the original scattered-site housing,” Abrams-Bell jokes).  

AMC gathered all the tenants for a meeting and told them they would have to relocate during construction, but that they were assured of being able to return to their units once the rehab was done.  

Temporary isn’t the first word that comes to mind about the Danube Apartments. Even the financiers on the project have been around it for decades. John Mackey, now with Trinity Financial, Naples, FL, advised on the 2012 refinancing. He was already familiar with the Danube Apartments (named after a neighborhood street, not the European river) since he had been on the syndication team when the 1996 rehab was done. 

“It was a fun deal,” Mackey says, as it took some skill to make the numbers work for the development (ADC owns and manages a total of 223 apartments, and Mackey describes them as a niche player in inner city scattered site walkups). “Martha is great to work with.” 

But the endurance of the apartments is originally due to Ed Abrams, his daughter says. Using an unusual metaphor, she says he had “a lot of psychic equity” in the project. She was not referring to anything paranormal but rather to the mind and spirit aspect conveyed by the word “psyche.” 

Reflecting the Neighborhood 
Ed Abrams made sure the apartments reflected the characteristics of their neighborhoods, which had a lot of lower-income residents and minorities. Staffing at the company has reflected this orientation as well, says Abrams-Bell, with a family orientation since the buildings contain a total of ten percent of three-bedroom apartments. 

It even has a five-bedroom unit. 

From its inception, the firm recognized that properties are about the people living there, not just the bricks & mortar. Although no specific resident services unit exists, “we have networks within the neighborhoods as needed,” says Abrams-Bell. The firm is an inaugural member of the MassHousing TAP Program (Tenant Assistance Program) and throughout it’s more than 50 years, has remained active in the broader community, fostering and maintaining relationships across the wide range of recreational, enrichment, supportive and medical service providers in the area. 

Ed Abrams had “a special bond” with the property and its tenants and staff, says his daughter, who first started working for the firm before college as a receptionist, and then returned for good shortly afterward, falling under what she calls the passionate spell of affordable housing during a time where they didn’t even have spreadsheet software to use for calculations. She became a partner in 1996; Ed Abrams died in 2019. 

“Affordable housing is either in your blood or it isn’t,” she says. But for anyone on the fence about joining the industry, “Give us two years and we’ve got you,” she says. 

Mackey remembers a good many “twister” elements of the financings of 1996 and 2012. A total of $3.7 million in tax credit equity was raised in 1995, and $3.18 million in 2012 (both involved substantial rehabs, but no new construction). The first was nine percent LIHTC, and the second was four percent. 

The Historic Tax Credits (HTC) made the 2012 deal work, he says. Using both state and federal credits, and multiple small allocations in the case of the state, the development received nearly half a million dollars in proceeds. 

The Federal HTC was capped at 20 percent of qualified basis and brought in $100,000 in equity, he remembers. But the state credit was not capped, meaning the developer could raise more money through the State HTC, which through considerable negotiations with the Department of Housing and Urban Development and the state was turned into a soft third loan of $380,000. It took five separate rounds to achieve. If the state credit had been used, it would have been taxable under state law. But in Massachusetts, state credits can be monetized as a loan (in this case equal to 86 cents on the dollar), which is non-taxable. So, with a State HTC of $450,000 at 86 cents on the dollar, the resulting $380,000 soft third loan was worth more than the equity for developers and investors. 

The Deal Maker 
“It was the difference between life and death,” he says. 

Abrams-Bell says working with the National Park Service on the historic credits was not particularly challenging, as the historic elements they wanted to be retained were mostly on the exteriors, like entries and posts around entries. 

Mackey gives Abrams-Bell a lot of credit for running a tight ship and her ability to accept what makes sense to get transactions done. She decreased the principal amount of the HUD-flexible loans to under $4 million from more than $7 million, using money received through rent increases. She achieved such notable rent increases—based on performance—that HUD benefited from a faster payout. “She’s had remarkable success in getting property values down to a number that makes sense,” he says.  

What do the next 100 years hold for the Danube Apartments? In the near term, some limited masonry work, which ADC intends to finance on its own without the grant or credit markets. But for the long term? 

“I’m not the visionary,” Abrams-Bell demurs. But then she says, “Looking forward, we’d like to see the kind of decent, safe housing everybody deserves.” 

If that’s not visionary, it’ll do until the real vision comes along.  

Mark Fogarty has covered housing and mortgages for more than 30 years. A former editor at National Mortgage News, he has written extensively about tax credits.