Three years ago, I attempted to make some changes to the Affordable Housing Trust Fund (nice, they’ve changed history and removed my name entirely) to allow more use of the $4M that is in the fund. The Mayor opposed those changes. Michael Schumacher removed my name and introduced it last January and still, the changes went no where . . . until now, when the CDA again wants to bend the rules to get the money. $1M of the $4M to create no new units and make current housing less affordable.
One of the last battles over the Affordable Housing Trust Fund was when they wanted to raid it for Allied Drive. They introduced last minute ordinance changes to make the budget amendments to build a road, but did not succeed. The Mayor supported that. But he opposed using the fund for Section 8 recipients to help keep them in their housing when the CDA found themselves without enough funds to pay the landlords their portion of the rent.
Now, the latest scheme which most people just heard about Friday or Monday, but CDA has been talking about for months, (apparently, but I bet you can’t find this kind of information on their agendas) is to use about $1M for 17 years. The total cost of the project is $14M so the Affordable Housing Trust Fund would be 7% of the funding.
And for the $1M loan, what will we get? The project will create no new housing units and make some of them less affordable.
All 71 residents will be at or below 60% CMI per family size. The majority of the residents will be at 30% CMI (e.g. 54 of 71 residents as of May, 2010 were at the 30% CMI level)
“Most” residents would spend 30% of their income on rent. Meaning as they rescreen people to get back into the units and some move out during construction, they will likely be replaced by tenants with more income, and the units won’t got to those who need it the most.
Apparently the CDA believes that:
This is an exciting opportunity for the City of Madison and the CDA to use its many resources to
improve the quality of this affordable housing and create a strong, sustainable community and neighborhood.
“Many resources”??? Seriously. I’d call them scarce. I think that is part of the problem, the CDA just see the City of Madison as their piggy bank.
Unfortunately, the CDBG (Community Development Block Grant) commission is stuck in the position of being the ones that will kill the deal.
The CDA / AHTF loan is the last piece in the financial structure to be put into place. Without it, the transaction would not happen. Therefore, there is no question that without the $1,050,000 in CDA /
AHTF loan, the CDA would lose the benefit of approximately $10.9 million of third party funding.
Too bad the ordinance doesn’t allow what they are asking for.
Additionally, they waited til the last minute:
The re-development is planned to begin in September, 2010 and will complete mid – summer in 2011
That means that CDBG has to approve it this month and the council next month? Too bad they didn’t approach the CDBG much, much earlier when they were working on the financing.
The Final insult:
It is quite typical of lenders of below market rate loans to seek special conditions in return for their loan. In the case of the Truax Redevelopment, the development will be kept affordable to persons at 60% of the CMI, or below, for 30 years. In other words, the affordability requirement runs for an additional 13 years after the CDA / AHTF is fully repaid. Typically these sorts of rent restrictions expire when the below market funds are no longer included in the transaction.
No, in other words, you’re taking public housing that should generally be permanently affordable and are now only guaranteeing 30 years of affordability for housing that won’t be as affordable as it once was.
I don’t see how the CDA should be rewarded for doing poor planning, procrastinating, practicing awful transparency and not following the law to not create any additional affordable housing units, making the ones there less affordable not agreeing to continue to keep them affordable for any more than 30 years. They are actively taking steps backwards for affordable housing. Is that what our CDA/Public Housing agency should be doing?
Why do these public housing projects continue to cost so much? This is more than $200,000 a unit. I can buy a brand new single family Veridian home with three bedrooms and a two car garage for less than that.
The rest of the story:
Major Components of the redevelopment consist of:
1. add elevators to make all units accessible
2. add additional storage space adjacent to the units
3. increase unit square forage from 495 Sq. Ft. to 610 Sq. Ft.
4. make bathrooms ADA compliant and larger
5. increase size of kitchen – dining area
6. add additional community space in each building
7. remove and re-develop all unit outside balconies
8. add central air-conditioning to all units
9. change unit heating from Hot Water Baseboard to
Forced Warm Air
10. add “Green” and “Sustainable” features throughout
the units and common area
11. All units will include new full size energy efficient
appliances
12. The appliance package will include dishwashers.
13. Fifty percent of the units will have in unit washers and
dryers
14. all units will receive all new bathroom fixtures and all
new kitchen cabinets
4. Who lives in the Phase 1 units
a. All units at Truax Park (all phases) are considered “Public Housing”
units, and thus receive HUD operating support
b. There is virtually no HUD funding available to improve the units to
the extent being done here. This requires Public Housing
Authorities, nationwide, to seek alternate funding to make major
unit renovations.
c. All residents pay up to 30% of their income toward rent and utilities
d. All 71 residents will be at or below 60% CMI per family size
e. The majority of the residents will be at 30% CMI (e.g. 54 of 71
residents as of May, 2010 were at the 30% CMI level)
5. What is the
I’m confused by this part of your post:
first there’s this quote from something in the proposal:
All 71 residents will be at or below 60% CMI per family size. The majority of the residents will be at 30% CMI (e.g. 54 of 71 residents as of May, 2010 were at the 30% CMI level)
followed by your comment:
“Most” residents would spend 30% of their income on rent. Meaning as they rescreen people to get back into the units and some move out during construction, they will likely be replaced by tenants with more income, and the units won’t got to those who need it the most.
What confuses me about this is: Is your comment referring to that quote from the proposal? Because the quote from the proposal doesn’t indicate that most tenants will pay more than 30% of their income. It just indicates that most tenants have an income below 30% CMI.
So, in what sense would the units be less affordable to tenants after the remodeling?
I AM concerned to hear that the plan intends to keep the units affordable for only 30 years. Do you happen to know what the current commitment is for the housing that’s already there? I don’t see why ordinances should specify that housing is affordable for a set number of years. It should either be affordable in perpetuity, or just not be specified, since it’s likely to be dropped out of the affordability requirement at the end of any certain number of years that are specified.
I don’t see a problem in using affordable housing money to rehab affordable housing. I do see a problem in keeping the plans quiet until the last minute so that everyone feels they have to agree to it because of the pressure. Do you think the affordable housing money was originally budgeted to ADD affordable housing, rather than to rehab existing affordable housing?
OK, here’s the part in the proposal that says “most” residents would only pay 30% of their income for rent:
“For Truax, 17% of the rent goes to senior
debt service. This allows for most residents to be at 30% CMI and
only have to pay 30% of that income for rent and utilities.”
That’s 2. b. on the first page.
Then farther down, on page 3, it says, in 4.c. that ALL residents pay up to 30% of their income in rent:
4. Who lives in the Phase 1 units
a. All units at Truax Park (all phases) are considered “Public Housing”
units, and thus receive HUD operating support
b. There is virtually no HUD funding available to improve the units to
the extent being done here. This requires Public Housing
Authorities, nationwide, to seek alternate funding to make major
unit renovations.
c. All residents pay up to 30% of their income toward rent and utilities
d. All 71 residents will be at or below 60% CMI per family size
e. The majority of the residents will be at 30% CMI (e.g. 54 of 71
residents as of May, 2010 were at the 30% CMI level)
So do you think maybe the way the thing was written, someone was using loose language when writing the first statement about “most” residents only paying 30% of income? Because part 4.c. sounds like ALL residents only pay 30%.
It’s not clear to me who or what entity is making the 30-year affordability requirement. It sounds like it’s related to the conditions of the loan. If the conditions of the loan require a certain length of time of affordability, that doesn’t mean the City has to take the point of view that the affordability will ONLY last that long. Do you know who makes that requirement?
Thanks, Stuart. I need to read this stuff more carefully. For some reason I thought this was new construction. It appears this is a remodeling job that will cost more than $200,000 a unit.
Has anyone ever heard of make do. Why more storage space, why a dishwasher, why an enlarged kitchen????? Why does their need to be an enlarged community room?
I understand the green compliance and ADA accomodations but why $200,000 per unit?
All of this in what has been considered the worst recession since the great depression.
TIF gets raided for the elite projects and now affordable housing.
At least this Mayor’s administration is consisten in its disregard for social concerns. We can count on that as a city.
Brenda, if you’re so upset at CDA’s 30-year commitment for affordability at Truax, you must REALLY be upset that Bayview is only guaranteeing affordability for 20 years.