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NROC: Northgate Residents Ownership Corporation

Northgate's Success Story

The Preservation of Affordable Housing in Burlington, VT

Today, Northgate is a national model for successful resident-owned affordable housing communities, we’re proud of the wonderful community we’ve built.

  • Northgate was built in 1969 using federal funds which required the property to remain affordable for twenty years, until 1989.
  • With 336 units, Northgate is Vermont’s largest affordable housing development.  

In 1986, with the twenty year marker rapidly approaching, the real estate market in Burlington was booming, and Northgate had become a highly valuable property. If the for-profit owners converted Northgate into market rate condominiums, rents would double. With the market so hot, residents were facing a very real threat of displacement.

Northgate had become a symbol of failed federal housing policies that invested millions in properties that provided only short-term benefits to communities. At the same time, Northgate was a vital affordable housing resource in The City of Burlington.

The Northgate Resident’s Association worked hard to raise awareness of the issue, and they put out a call for action that included this set of principles:

  • No resident displacement
  • Rents not exceeding 30% of household income, including utilities
  • Rehabilitation to reduce energy and maintenance costs, and to assure system reliability

The City of Burlington responded to Northgate resident’s cry for help. Mayor Bernie Sanders worked closely with Peter Clavelle, Director of the City Community and Economic Development Office (CEDO), to create a strategy for protecting residents.

The City passed a resolution in support of saving Northgate, and CEDO formed a task force to ensure that Northgate remained affordable. The City also passed an ordinance that gave residents much needed notice, and a protected period of time before a property could be converted from rental to condominiums. Resident’s had won a reprieve, but the fight wasn’t over.

The project assumed a high profile as policy makers, politicians, residents and other community members grappled with how to keep Northgate affordable. In 1987, the Vermont Housing and Conservation Board (VHCB) was formed to provide funding for developments with a commitment to permanent affordability. Here was the chance to turn Northgate into a successful and affordable community, a symbol of smart public investment delivering long-term community benefits. Northgate received one of VHCB’s first loans.

With the support of the City of Burlington and State of Vermont, Northgate residents and the CEDO task force began a two year process to purchase the property. In 1989, the property was purchased by a partnership established by two non-profits:

  • Northgate Housing, Inc. 
    Tenant controlled managing general partner
  • A subsidiary of Housing Vermont
    A statewide non-profit developer and Low Income Housing Tax Credit syndicator.

Together these two organizations:

  • Leveraged over $20 million from HUD, VHCB and tax credits.
  • Completed $3 million in renovations and energy conservation, creating good construction jobs while making lasting improvements to the community.
  • Modeled wise public policy for the preservation of HUD-funded affordable housing throughout the country.
  • Gave residents majority representation on the Board of Directors of Northgate Housing Inc.
  • Ensured the long-term affordability of Northgate.

Twenty years later: the success continues, the investment pays off, and Northgate residents take over full ownership.

In 2006 the affordability requirements of the tax credit program expired. In March of 2008, residents were able to collectively buy out the development from the partnerships and transfer ownership to Northgate Residents’ Ownership Corporation (NROC). The property is now 100% resident owned and controlled.

  • NROC continues to meet and exceed the affordability goals without requiring any additional funding from the State.
  • The partnership’s equity investors donated their interest to the non-profits, without taking any profit out of the project, thus securing Northgate’s ongoing afforability.
  • Northgate is even more affordable now than it was 20 years ago.
  • Northgate has completed another $3 million in rehabilitation work, primarily paid out of project reserves, with only $350,000 in additional public investment from the City.
  • For over fifteen years, the majority of the directors on the board have been residents, now nine out of thirteen NROC Board Directors are residents.
  • Many residents have lived in Northgate for over twenty years, creating a great neighborhood and home for families from fourteen different nationalities.