Loading...
HomeMy WebLinkAboutMN-RHAC-1989-02-23 cl1 r r r.� RECEIVED APR 1989 Rental Housing Task Force February 23, 1989 DRAFT MINUTES (by SJ) Present: Jackson (Chair) , Killeen (Vice-Chair) , Chase, Howard, Lewis, Lytel, MacDougall, McLaughlin, Shantur, Weiss; invited guests Assemblyman Marty Luster, Doug Dylla and Dennis Wille from the Ithaca Neighborhood Housing Services, Carol Chernikoff from the Alternatives Federal Credit Union; members of the public and press. Meeting called to order at 7:05pm by Jackson. The Task Force discussed dates and topics for meetings in March. It was agreed that on March 13th, the Task Force would hear from renters in Ithaca, to hear about their perspective on the rental housing situation. Various task force members offered to assist in speaking and/or locating others willing to speak. Jackson agreed to coordinate. It was agreed further that on March 27th, the Task Force would begin considering proposals for action. Jackson indicated his intention to present a set of proposals for discussion, and invited all other Task Force members to bring their ideas and recommendations forward at that time as well. It was agreed, at the request of Lytel, that if an alternative to March 27th could be found on which all Task Force members could attend, we would change the date of that meeting. Finally, it was agreed that the Task Force reaffirm its desire to hear from the new Building Commissioner at some point, probably in April. Assemblyman Luster was introduced. Luster began by noting that with respect to housing, the news from the Governor's budget is better than for other areas of concern. One half of the surplus of two years ago which was placed in the State Housing Trust Fund, $326 million, remains mostly intact. Further, the Governor outlined a series of proposals to assist further in making affordable housing more widely available. Most importantly, Cuomo proposed: rearranging the bureaucracy so that there was one, clear, lead agency for housing issues in the State; setting aside $1.5 million for incentive grants for demonstrated housing providers, a program from which groups around here certainly might benefit; releasing $50 million from the Housing Trust Fund for new appropriations; continuing appropriations of $42 million for low income housing; and $2 million in new appropriations (above and beyond the $5 million in continuing appropriations) for rural rehabilitation. Luster observed that the Legislature is well aware of the need to do more for affordable housing, and that in addition to budgetary allocations, there are at least two legislative initiatives relevant to affordable housing on which he is acting. Many communities in the State, including the City of Ithaca, are looking at the possibility of assessing fees on developers of major new projects to cover the costs of the impact of development on provision of municipal services and of the linkage to the strains on affordable housing. However, two out of three court cases in New York State have knocked down local legislation creating such fees as lacking enabling authority. After studying those cases, Luster drafted legislation providing the broadest possible authority to municipalities which wish to draft local legislation imposing such fees. After broad consultation in the legislature, he concluded that: a strong consensus exists that an enabling law is needed and needed quickly; a consensus exists that the legislation needs to be redrafted to specify more precisely what is being authorized. Hence, he is currently re-drafting the proposal. Luster also mentioned as relevant to us that he is a co-sponsor of legislation to give municipalities authorities to acquire land for the purposes of creating "affordable home parks. " While originally intended for rural towns and villages, he believes the authority may be useful for cities such as Ithaca in providing them broader authority than presently exists to acquire land specifically for the purpose of providing affordable homes. Mark Goldfarb asked whether imposing costs on developers, as with impact fees, wasn't counter-productive to the goal of producing more affordable housing. Luster responded first that creating enabling authority at the State level does not require municipalities to use it: that is still their choice. However, if they do, the law would require that a municipality study the impact of any development before assessing fees: this is really just a way of levelling the playing field, so the municipality knows as much as the developer about the costs, as well as the benefits, of development. John Efroymson asked whether developer impact fees could be assessed on all projects with the exception of those which directly provide low cost housing. Luster replied that it should be possible, and would be an option for local drafting. Deidre Silverman indicated that having programs on the books and money appropriated doesn't do very much good if the money doesn't get out into the community. She quoted a friend as comparing getting allocated funds to landing a person on the moon. She asked whether the Legislature could not push bureaucrats to release funds more quickly. Luster responded that a prompt contract law is in the works which would require state agencies to deliver funds under state programs much more quickly. Ben Nichols extended congratulations to Luster for taking the lead on impact and exaction fees, expecting it to be of tremendous benefit to the City of Ithaca and other communities. He indicated concern that in the re-drafting of the legislation, that authority exist to include academic, as well as commercial and residential, construction. Luster noted the concern and indicated that it was to avoid having to anticipate all of the kinds of construction which might be included that he preferred his original general enabling statute. But, if it must be specific, he will make sure that academic construction is not overlooked. Nichols also asked what ever became of the Task Force on Housing chaired by the Lt. Governor. Luster responded that the Task Force had issued its report which led to the Governor's proposal to create a single lead agency. Luster indicated that he would have a copy of the report sent to the Task Force. Stephen Hertzberg asked whether the assessment of developer impact fees could be used to recover costs already incurred by a municipality (as in the construction of roads) . Luster indicated that it would depend on the exact formulas agreed upon by a municipality, but that it ought to be possible. Paula Weiss asked what would guarantee that money raised by a municipality through a linkage fee for affordable housing was actually spent on affordable housing. Luster's response was "the law. " The law requires that any money raised based on the demonstrated impact of development on affordable housing would have to be spent on affordable housing, that is, on mitigating the specific costs of the development. Weiss continued by asking whether or not the impact fees might not preclude development. Luster responded that if they did they would probably be ruled to be unconstitutional. Hence, they have to be designed carefully at the local level to avoid that consequence. Steve Jackson indicated that at some point in the coming months the Task Force would be considering proposals for rent control. While it was unclear what might emerge from those discussions, one thing that was quite clear was that noone on the Task Force would want to recreate the New York City rent control system in Ithaca. Indeed, it seemed likely that Ithaca would need to have a rent control system carefully tailored to local needs, a possibility which would require a home rule exemption from the State legislature. He asked whether Luster would be willing to work to get such an exemption if the City so requested. Luster responded that if Common Council by local law or resolution asked for such an exemption, he would gladly serve as the messenger of the City's interests in seeking to obtain such an exemption by action of the State Legislature. Jackson thanked Assemblyman Luster and promised to keep him informed of the continuing deliberations of the Task Force. Jackson then introduced Doug Dylla and Dennis Wille of Ithaca Neighborhood Housing Services. Dylla distributed a list of all State programs which provide funding for affordable housing programs. While indicating that three of the programs would be useful to the City (Low Income Housing Trust Fund, Urban Initiatives, and Housing Opportunities Program for the Elderly) , that only the Low Income Housing Trust Fund really makes sense for substantial and general use. This can provide up to $55,000 per dwelling unit in assistance; it can be used for quite a wide range of programs. It must be targeted to households at 80% of the median income for 15-20 years. It requires roughly two years of development to create and get approval for a local program. With Federal funding essentially gone, and little new Federal funding likely, the only alternatives are at the State or local levels. Following Silverman's comment earlier, Dylla noted that $300,000 awarded by the State to INHS several years earlier had still not been fully received. He argued that the creation and funding of a local Housing Trust Fund was essential. Not only would it allow Ithaca to be more autonomous in designing programs. It also would allow Ithaca to advance money to projects which would eventually be reimbursed by the State. Dylla also noted that the City should do something to require linkage payments or replacement of units whenever residential dwelling units are demolished. Further, he noted that changes in the zoning ordinance in certain commercial areas to reduce the parking requirement might stimulate the addition of second and third stories for residential units above presently dominant one story structures. He indicated this as important in a city with relatively few open areas. As important as finding the capital for affordable housing is finding locations where it can be put. Dylla noted that an additional pressure is for the replacement of 80 or so SROs lost in the past six months, a loss which is costing the County Department of Social Services $1200 per day. Dylla noted that a study of housing prices done by INHS estimated that by the year 2000, the average price for a house in the Ithaca area will be $300,000. At that level, a household would need an income of about $100,000 to afford an average house. At that point, a majority of the people in the area, not just the poor, will be affected, priced out of the market for housing. Dylla called for more coordination of policy among the various towns and the County along with the City. He indicated that the policy should be based on a broad consensus, not just renters, but including developers and bankers as well. Noting the need for more student housing, Dylla commented that providing more housing won't solve the problem of affordability. He doubts trickle down can work when developers, rightly given their costs, pursue the upper end of the market, the $200,000 and up range. Finally, he indicated that the goal of building more affordable housing should be pursued with the aim of getting the biggest bang for the buck, of finding solutions which will work for the long-term, which will remove housing from the speculative real estate market. He indicated that INHS has decided to develop a mutual housing association as one means of accomplishing this. He distributed information and introduced Dennis Wille to answer questions concerning the mutual housing association proposal. Wille indicated that 15-20 years was not long enough for affordable housing, that it was obtaining a short-term benefit at the cost of lost taxes. One of mutual housing's advantages is that the housing remains affordable forever. While mutual housing does not give low and moderate income people ownership of their homes, it does give them control over their living environment: the Board of the Mutual Housing Association would always have a majority of its membership drawn from tenants and potential tenants. The target group of the association would be those deemed eligible for assistance under Federal HUD guidelines, presently meaning for a family of four a household income of less than $22,000. While the rents might be higher than many can afford, a multi-tiered fee structured might be introduced to broaden the range of possible tenants. The mutual housing concept is based on a practice of more than 100 years in Europe and was first introduced in this country in Baltimore five years ago. In the first phase of that project, with 30-40 units being developed on a large vacant lot, there was substantial neighborhood opposition. However, the actual experience of the association in developing friendly relations with its neighbors led to the absence of opposition when the association moved to expand in its second phase. The mutual housing idea is particularly good for single parent families, where child care might be accommodated within the association. Paula Weiss asked whether there would be pressure on tenants to leave the association when children grow up and leave home. Wille responded no, that the association desires long term tenants, although someone might want to move into a smaller unit after children leave home. Dave Lytel asked Doug Dylla about the SRO crisis and what should the City do. Dylla responded that the one thing which was clear that providing housing for the poorest citizens must be done by government. INHS cannot do this. John Efroymson asked where the capital for the mutual housing association would come from. Wille indicated that the City's Community Development Block Grant request would likely ask for some, and the State Housing Trust Fund would be pursued. Ben Nichols signalled mutual housing as a key development. He indicated it as clear that affordable housing would not happen without public money, and that the alternative of public housing was worse than this. Further, he noted that up-front public investment in mutual housing would be used to build high quality residential units, and further, would keep the property on the tax rolls. Jackson thanked Dylla and Wille for their informative comments, and introduced Carol Chernikoff from the Alternatives Federal Credit Union. He indicated that an AFCU representative had been sought for this discussion because in the 1988 Retrospective mailed out by the AFCU to its members, there was a note indicating that AFCU had narrowed its priorities down to a manageable focus on affordable housing and child care. It seemed appropriate then to hear what the AFCU had in mind. Chernikoff began by noting that since its founding, the AFCU had tried to encourage affordable housing. Initially, it had offered adjustable rate mortgages with 20% down and no closing costs, in which they were willing to look at unusual circumstances which might cause someone to be denied access to credit at commercial banks. However, demand outstripped the supply of capital at AFCU. AFCU also home construction loans to owner builders. Unfortunately, their experience was that for most people enthusiasm runs out before the project is done. Hence, they have stopped this program. In the last year, AFCU has tried to refocus itself on its original mission to serve the community's needs, one of the more critical of which is for more affordable housing. They are developing new programs to work with Habitat for Humanity, to provide reverse mortgages for seniors, and to make loans available for down-payments. To increase funds available for these and other programs, they seek to attract large depositors willing to dedicate their deposits to accounts which would be devoted to affordable housing programs. They seek investments by religious organizations, ethical investment firms, etc. They hope to have the community support this form of idealism. Tompkins County, for example, has approximately $1 billion in savings which, if placed in these dedicated deposits, could be used to greatly expand affordable housing. AFCU wishes to encourage the City (which presently cannot deposit with AFCU because it is not a designated depository) , unions, and churches to consider saving and investing in our community. Laura Lewis asked whether AFCU had a program to lend money for deposits to renters. Chernikoff responded that AFCU handled these requests through their consumer loan program; she would try to see what information, if any, AFCU had on the experience with these loans. Steve Jackson asked what success AFCU had had in attracting funds. Chernikoff indicated that they had had little success locally. However, with just a couple of phone calls, they had raised $300,000 from sources outside the City. Jackson thanked Chernikoff and all present. Meeting was adjourned at 9:25pm.