Affordable housing projects in Northampton and Easthampton are receiving a combined $5 million from the state as part of efforts to decarbonize affordable housing and make it sustainable throughout the commonwealth.

The money comes from the first round of the Affordable Housing Deep Energy Retrofit Grant Program, which the state created early in Gov. Maura Healey’s administration. The program retrofits existing low- or moderate-income residential buildings to make them more sustainable, such as through installation of solar panels or switching from gas to electric power.

Of the $27 million awarded by the state, $2 million will go to Valley Community Development Corp. for its plans to redevelop a former Northampton nursing home on Bridge Road into 60 affordable apartments called Prospect Place. The money awarded Tuesday will be used to install a ground source heat pump system and a 300-kilowatt solar system.

The 6.2-acre former Northampton Rehabilitation and Nursing Center at 737 Bridge Road was purchased in April 2021 for $1.9 million by the Pointer Fund and Pointer Development, based in Miami and run by Amalfi Gayosso, a UMass Amherst alumna with ties to Northampton. The development group then partnered with Valley CDC to form a joint venture called Prospect Place Owner LLC. Valley CDC is serving as the majority owner and managing partner for the $27 million project.

Bill Womeldorf, a real estate project manager for Valley CDC, said the organization was looking to acquire additional money from the state to complete funding for the project in December, with an expected date of August 2024 for the groundbreaking for the new affordable complex. Once completed, tenants will have their utilities paid for by Valley CDC.

“Ensuring geothermal is fundamental in order to keep rents low,” Womeldorf said.

The Northampton Planning Board approved the venture’s 40R permit for the project in October 2022. The exterior of the building has already been stabilized, and plans call for a full gutting and renovation of the two-floor, 72,000-square-foot building’s interior.

The development will feature apartments ranging in size from studios to three bedrooms, rented at significantly below market rates to people with incomes ranging from 30-100% of area median income.

About a year ago, the state agreed to send $830,000 to remove asbestos from the 1971 building. In addition, the city is supporting the project to the tune of $1 million. That money is primarily coming from Community Preservation Act funds with a smaller portion from the Community Development Block Grant.

When finished, the property will be fossil fuel-free, in compliance with city rules.

Treehouse upgrades

In Easthampton, another $3 million will go to Beacon Communities Development for the Treehouse Community project.

Established in Easthampton Meadows in 2006, the intergenerational community is an affordable neighborhood designed to support families who are fostering and adopting children from the public care system in Easthampton, through programming, education/homework support, enrichment programs, and gathering spaces for the community.

Apartments are available to people 55 years or older and families who are caring for children from the foster care system.

“The property is getting on 20 years old, and it needs a bunch of normal 20-year-old building renovations,” said Josh Cohen, president of development at Beacon Communities Development, the development partner of the Treehouse Foundation. “This funding … lets us go to the cutting edge of where our buildings need to be to address climate change.”

State funding will support work to drive the property’s energy usage down by half, with fully electrified heating and hot water, solar panels, new exterior insulation, air sealing, and triple-pane windows.

“Treehouse has always been an incredible effort to be a part of,” Cohen said. “The transformational outcomes that we’ve seen at Treehouse for the families and kids, along with the seniors has been a very special and important thing to be a part of.

“To get to marry that ongoing mission with how we're gonna get our built environment off of fossil fuels, is just such an exciting and thrilling marriage of these two different missions,” he said.

The project is still in the process of applying for additional funding from the state, and Cohen said the goal is to have construction start by the end of next year.

In a statement, Gov. Healey said the grants would help address the high costs of both energy and housing that continue to afflict the state.

“This grant program will lower monthly energy bills and maintain affordable housing for families across Massachusetts,” Healey said. “Electrifying our buildings presents an important opportunity to drive down energy costs for our residents.”

The grants are part of Massachusetts’s goal to achieve carbon neutrality by 2050. The state has also encouraged municipalities to adopt a new building code with more stringent policies regarding sustainable buildings. Northampton became the first municipality in western Massachusetts to adopt the new code, doing so in September.

Most of the grants’ funding comes from the Department of Energy Resources’s alternative compliance payments, with additional funding from the Department of Environmental Protection’s Climate Protection and Mitigation Trust and the federal American Rescue Plan Act.

In January, the Department of Energy Resources will begin a second round of reviews from projects seeking grant funding.

 Alex MacDougall can be reached at amacdougall@gazettenet.com. Maddie Fabian can be reached at mfabian@gazettenet.com.