Towns: National City, CA and Kittery, ME

7 min read

Small Places, But Big Housing Plans 

A small city, or even a small town, doesn’t have to have a small housing footprint. Cases in point: National City, CA, where a tiny staff works on big affordable projects, and Kittery, ME, a place so small it doesn’t have its own housing department but still dreams of attracting tax credit deals.

National City: Sailors, Seniors & Students
In National City, a city of 60,000 people just south of San Diego, a small housing development team, working with outside consultants, has finished a big transit-oriented development, started a rehab of two senior housing towers, and thought seriously about environmental issues and the need to plan for climate change right now.

Carlos Aguirre, director of the National City Housing Authority, said the Westside Infill Transit-Oriented Development (WI-TOD) project has resulted in more than 200 housing units along Paradise Creek near a trolley line, and the Kimball-Morgan Towers project will rehab 300 units for seniors when it is finished. Another 170 units of intergenerational affordable housing adjacent to the senior towers and an expansion of a park development on Paradise Creek are on the boards.

These are not small financings. The San Diego Union Tribune in 2017 reported an estimated total cost of Paradise Creek’s three phases at $100 million. Total development costs for each of the senior towers is north of $60 million. The intergenerational development doesn’t have a firm price yet, but Aguirre notes unit prices to build apartments range from $350,000 to $500,000 in the costly San Diego area.

Funding sources include both the four percent and nine percent Low Income Housing Tax Credit, the Federal Home Loan Bank Affordable Housing Program, HOME funds, the state Affordable Housing and Sustainable Communities (AHSC) carbon offset program, permanent loans and others.

Despite being near prosperous San Diego, National City is a place of very low incomes, Aguirre says. “Median income is $41,000, and the median home price is $450,000 plus. There’s very little inventory for housing, so we have to look at models to produce housing at all levels.”

“Sailors, seniors and students,” is Aguirre’s motto for the city’s housing target populations, but it is clear families are in the mix as well.

National City is right now working on an environmental project adjacent to the transit-oriented development, to clean up brownfields and shore up defenses against rising shorelines in a city near enough to San Diego Bay to have military residents from the adjacent naval base. Its heavy exposure to auto traffic from two state superhighways and commuting naval personnel has inspired an ethos to mitigate against car emissions and to embrace environmental awareness through plans to build parking lots to get people out of their cars and using bicycles or transit.

The Paradise Creek WI-TOD shows a concern for the environment in other ways, as well. Developed by Community Housing Works and the Related Co. of California, it qualified for a state Affordable Housing Sustainable Communities grant, a program championed by former governor Jerry Brown funded by charging corporations for carbon offsets.

The entire site, which has earned an Leadership in Energy and Environmental Design (LEED) designation, is a former brownfields, used for the dumping of street materials. The park expansion is “a part of the ongoing process of recapturing the creek,” Aguirre says. Buffering against flood waters or runoff caused by climate change is a part of that plan.

The housing authority prides itself on financial and personnel efficiency. Its recent projects have not cost the city a penny, and besides the staff it has for Housing and Urban Development projects, and outside consultants, it has just four development people: the director, a housing manager (currently vacant), a community development specialist and an executive assistant.

Kittery: Retirees and Younger Adults
Kittery, ME, a seacoast municipality of about 10,000 people south of York in the southeastern part of the state, doesn’t let its small size hinder it from thinking seriously about affordable and workforce housing.

Kittery, which includes the Portsmouth Naval Shipyard within its borders and was the first town incorporated in what is now the state of Maine, has quite an active Housing Working Group, which combines the energy of municipal planning officers with the private sector.

In the past couple of years, Kittery has held a housing forum and a design charrette, (put together by another group, the Workforce Housing Coalition of the Greater Seacoast) as well as forming the Housing Working Group in March 2018.

Most recently, it has been contemplating zoning changes in an effort to be more alert on how to achieve Low Income Housing Tax Credit points in order to score higher with the state housing agency.

Affordability is a challenge in both rentals and homeownership in Kittery. Town Manager Kendra Amaral, in a September 2018 report to the town council, noted that Kittery median income was $64,105, making affordable a median home purchase price of $221,019 in a market where the actual median home price is around $350,000.

“This translates to a reality that working-class residents, retirees looking to downsize and younger adults looking to stay in Kittery are unable to afford to buy a home here. Approximately 72 percent of households in Kittery were unable to afford to buy a home in town in 2017,” Amaral reported.

On the multifamily side, “Rents continue to rise. Wages do not,” says Emily Flinkstrom, executive director of housing nonprofit Fair Tide and a Housing Group member. “And vacancies are less than one percent. Employers have nowhere their workers can live.”

Flinkstrom, whose group owns an apartment building for the formerly homeless in Kittery, is a fan of obtaining LIHTC money for development in the small town.

She is aware of how competitive that money is, though, and so is looking with the rest of the Housing Group at how zoning changes can make Kittery projects more attractive to MaineHousing, the state housing finance agency that allocates the credits.

Walkability is one key, she notes. And housing density is another big factor.

Flinkstrom’s Kittery-based group has been in existence for 20 years with a focus on creating permanent supportive housing to help the formerly homeless, with Fair Tide providing the case management. It started out providing transitional housing but found when it was time for clients to move out into the community, “there’s nowhere they can afford to live. Rents are so high and vacancy rates are so low there’s not a lot of options.”

Its other focus, and where it fits in with the Housing Working Group, is to bring new affordable units to the area, hopefully by bringing a LIHTC project to Kittery.

The charrette, a thought process among housing collaborators held on two days in October 2018, sought to provide options for affordable housing development in Kittery.

The group looked at one site, at 25 Walker Street, and came up with three possibilities: cottage-style homes, senior apartments (using LIHTCs) and apartments for families. It found the first two to be feasible for affordable housing developers, but not the third. And it found there were some features that would not score high points in the competitive LIHTC award decisions.

“It’s a long road,” she says. “We’re taking steps forward. That’s a big deal here in this small town.”

Carlos Aguirre, Director, National City Housing Authority

Mary Jane Jagodzinski, Senior Vice President
Community Housing Works (photos of Paradise Creek development)

Emily Flinkstrom, Executive Director, Fair Tide, Kittery, Maine

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.