Officials Question Availability Of Subsidies for Craigie Arms

Federal funds to subsidize low- and moderate-income apartments after the renovation of the Craigie Arms Apartments, a crucial element in tenants' support for those improvements last spring, may not be available, officials said last week.

As part of the settlement of a long-running dispute between Harvard and the Craigie tenants, the University, which owns a lease on the Craigie property, and a Cambridge developer signed an agreement in May that called for a certain percentage of the apartments in the renovated building to be subsidized.

As their concession, the tenants agreed to vacate the building and support Harvard's efforts to get a special permit from the Cambridge Rent Control Board to remove the 60-unit apartment building from the city's tight housing market.

Recent Reagan Administration cuts in many housing subsidy programs make Craigie's federal funding vulnerable. But Craigie developer Robert H. Kuehn, who has filed two applications with the Massachusetts Housing and Finance Agency (MHFA) for funds provided for in the National Housing Act, said he is hopeful.

The Craigie project, Kuehn explained, might be more attractive to MHFA because the commercial and market-value units planned for the rest of the building could provide "an internal subsidy" for the low- and moderate-income units.

MHFA official Marty Vaanaen last week described the Craigie plan as "a nifty little proposal," but said that "it does not look like there's going to be any [Housing Act] funds available."

In addition to the Craigie applications, 100 other projects have requested federal loans for this fiscal year, which ends on September 30, Vannaen said. She added that recent presidential veto of a supplementary budget bill completely eliminated the Housing Act's new development funds.

The uncertainly in the availability of subsidy funds makes the status of the entire Craigie project unclear.