SWAMPSCOTT — A mile from his own home, Gov. Charlie Baker on Thursday announced nearly $120 million in subsidies and tax credits to spur more affordable housing in the state.

The $80 million in subsidies and $38 million in tax credits will bolster 28 affordable housing and mixed-use projects in Gloucester, Beverly, Lawrence, Peabody, Swampscott, Methuen and elsewhere. 

The state funding will advance the preservation or help spur new construction of nearly 1,600 rental apartments, roughly 1,350 of which are affordable.

In Gloucester, the state subsidy will support the mixed use and affordable Harbor Village being developed on the site of the defunct Cameron's restaurant on Main Street by the nonprofit North Shore Community Development Coalition of Salem. The project will create 30 new affordable units. Gloucester is also supporting the project with Community Preservation Act funding in addition to the state subsidies and Low Income Housing Tax Credits.

The governor and state housing officials said the burgeoning economy and growing population coupled with a lack of housing production has led to Massachusetts becoming one of the most expensive places to live in the country.

"We have so many creative, imaginative, talented and smart people, and we have a booming economy, but we have got to solve this housing problem," Baker said. "I consider it to be among the most pressing challenges we face."

The crisis is not new. Baker recalled former Gov. Mitt Romney talking about the lack of housing for seniors, low-income folks and young families during a campaign stop in Swampscott in 2002. 

"And that was 17 years ago," Baker said. 

State Housing and Community Development Undersecretary Janelle Chan said the housing crisis threatens the stability of working families and the state's economy. The state has the third highest home values in the nation, behind California and Hawaii, but the lowest rate of housing production.

The event at Jackson Park drew dozens of town and state officials, stakeholders, developers representing various projects from across the state, and state lawmakers including state Sen. Brendan Crighton, D-Lynn, the chairperson on the Joint Committee on Housing; and state Rep. Lori Ehrlich, D-Marblehead, who grew up in Swampscott.

The nearly $80 million in subsidies comes from seven state bond accounts and federal HOME funds, according to a press release. The $38 million in tax credits comes from state and federal Low Income Housing Tax Credits. 

The tax credits are expected to generate more than $260 million in equity to support the projects. But because the projects will use the subsidies and tax credits to leverage other funding, state and project officials couldn't exactly say how much money each project will receive.

From school to senior housing

Among the projects Baker touted is one in his hometown: the redevelopment of the former Machon School into senior housing.

The vacant Machon, which closed in 2007, will become 38 new affordable senior apartments known as the Senior Residences at The Machon. The developer is the nonprofit B'nai B'rith Housing New England Inc.

Of those 38 units, eight will be reserved for extremely low-income seniors.

"This project in particular is a terrific example of the creativity and imagination and diligence, because these things require diligence, of the town of Swampscott, of one of our nonprofit partners in B'nai B'rith and so many others to make this affordable housing project for seniors happen here in the commonwealth," Baker said.

Peter Spellios, chairman of the Swampscott Board of Selectmen, said affordable housing is needed in town despite the fact that its median household income is well above the state average.

Over the past decade, the number of students in town schools on free and reduced lunch has risen by 70 percent. The number of seniors in town is outpacing other communities, Spellios said, and many seniors are struggling to make ends meet. 

In an effort to meet the need, the town created an affordable housing trust fund and adopted an inclusionary housing bylaw, along with supporting the Machon's conversion. 

"Embarrassingly, these units are the first units since the last units we constructed as part of the Swampscott Housing Authority over 30 years ago," Spellios said.

Ethan Forman can be reached at 978-338-2673, eforman@gloucestertimes.com or on Twitter at @TannerSalemNews.