Boulder Housing Partners

Spring is blooming at Walnut Place!

Wed, 22 May 2013 13:50:59 -0600

Spring is blooming at Walnut Place!

Construction progress on BHP’s newest Affordable Senior...

Tue, 21 May 2013 08:08:06 -0600

Construction progress on BHP’s newest Affordable Senior Community

Stuart Grogan Receives Outstanding Staff Person Award

Wed, 15 May 2013 09:11:03 -0600

Boulder Housing Partners’ Stuart Grogan, Director of Development, is the recipient of the Mountain Plains NAHRO 2013 Outstanding Staff Person award. The award is given to a person whose dedication and accomplishments deserve statewide recognition.

Stuart was acknowledged for the tremendous role he plays as a teacher and a mentor in our industry. Stuart has been the driving force behind Colorado NAHRO’s investment in a conference track dedicated to affordable housing development. He has done the same for Housing Colorado. And, in his role as BHP’s Development Director, Stuart has coached and supported many young professionals who have all gone on to contribute to the broader world of our industry.

He is widely considered a go-to person for development advice in Colorado, and has managed the development of more than $72 million in affordable housing in Boulder for BHP.

Congratulations Stuart. You make us proud!

A resident garden before and during last week’s snow...

Tue, 07 May 2013 08:22:36 -0600

A resident garden before and during last week’s snow storm…

Participants of the Youth Services Initiative (YSI) created...

Mon, 06 May 2013 08:10:12 -0600

Participants of the Youth Services Initiative (YSI) created works of art that will be on display throughout the month of May at the North Boulder Recreation Center. It is a great show; please take a moment to check it out!

New Staff

Fri, 03 May 2013 09:27:00 -0600

BHP is excited to welcome two new staff members: Natasha Pelegrina as Assistant Property Manager and Nick Phillips as Property Manager.

Natasha grew up in San Juan, Puerto Rico and traveled all over the country as a member of the United States Coast Guard during the last eight years. She has now traded the beach for the beautiful mountains of Colorado. With her recently earned MBA, she is ready to dedicate her time to improving the accessibility of housing in her new community.

Nick was born and raised in Boulder. He has lived in many other places, including San Francisco, but he returned to Boulder to be closer to his family and because he thought it would be a good place to settle and raise his kids. Nik loves to travel and has been fortunate enough to see a lot of interesting places around the globe. In his spare time he enjoys playing soccer, basketball and cycling.

Construction progress on BHP’s newest affordable senior...

Tue, 30 Apr 2013 10:30:39 -0600

Construction progress on BHP’s newest affordable senior community

Cornell House in 2013

Mon, 29 Apr 2013 10:25:30 -0600

Cornell House in 2013

We’ve recently finished the renovation of Cornell House at...

Tue, 23 Apr 2013 08:29:18 -0600

We’ve recently finished the renovation of Cornell House at 103 Canyon. The 3 bedroom single-family home was built in 1879 and has received Historic Landmark designation from the Boulder County Historic Landmark Board. This is a historic image of the property.

Boulder Housing Partners Opens Lottery and Wait Lists for Three Affordable Housing Programs

Thu, 11 Apr 2013 10:07:26 -0600

Boulder Housing Partners (BHP) is accepting applications for three affordable housing programs until 5 p.m. April 24, 2013.

Boulder Housing Partners provides assistance to nearly 2,000 households in the City of Boulder. Residents include area workers, seniors, families and people with disabilities. In-town affordable housing helps eliminate daily commutes and puts residents in touch with needed services.

Applications are being taken now for Section8 Housing Choice Vouchers, Section 8 Project Based Housing Program, and Public Housing.

Application English

Application Spanish

BHP Foundation: Help Us Close the Achievement Gap

Wed, 05 Dec 2012 09:50:22 -0700

Did you know that access to the internet is one of the key predictors of educational attainment and future income today?

Within our BHP community, 170 children do not have internet access at home. It will become increasingly difficult to close the achievement gap if homework becomes internet-based and our children go without accessible technology. The Boulder Valley School District knows this too, and that’s why they are increasing the use of technology in the classroom and online access to homework, teachers and other resources.

To that end, we are launching a campaign to provide internet access at all of our housing sites. Please help us connect our children to educational opportunities by offering internet access in the homes of low income students and their families.

Boulder Housing Partners (BHP) and its Red Oak Park development...

Tue, 06 Nov 2012 09:02:24 -0700

Boulder Housing Partners (BHP) and its Red Oak Park development have been named the winner of a 2012 Urban Land Institute (ULI) Global Award for Excellence in Real Estate Design and Development. BHP Executive Director Betsey Martens accepted the award October 19 at ULI’s 75th Anniversary Conference in Denver.

November 6, 2012

Meeting at a BHP Community Center, kids prepared for Halloween...

Wed, 31 Oct 2012 11:15:00 -0600

Meeting at a BHP Community Center, kids prepared for Halloween by carving pumpkins after school. You would never know it, but some were carving for their first time! Thanks to Boulder County’s Youth Services Initiative (YSI) for organizing this very fun and festive event.

October 31, 2012

Green Retrofit Results Are In!

Wed, 15 Aug 2012 12:17:00 -0600

The Canyon Point Green Retrofit post-rehab utility consumption report found that we had on average 37% savings on all utilities (water, electricity and gas).

The Retrofit: Each unit of the 83-bedroom apartment complex was supplied with new ENERGY STAR kitchen appliances and air-conditioners, while the exterior of the building had new windows, new siding, new insulation, and solar panels installed. Water conservation measures included faucet aerator, and low flow shower heads and toilets as well as a weather sensor the better regulates exterior irrigation water use.

Findings are based on utility consumption from July 2011 through June 2012. Read the full report on the Sustainability section of our website.

City of Boulder Honors Betsey Martens

Mon, 06 Aug 2012 11:14:00 -0600

Boulder Housing Partners executive director Betsey Martens has been honored by the Boulder City Council for more than two decades of “consistent excellence, high performance and singular leadership.” In a July 17th proclamation signed by Boulder Mayor Matthew Applebaum, the city council recognized Martens “for her extraordinary commitment to affordable housing and improving the lives of so many in Boulder and Boulder County.”

“This proclamation not only recognizes Betsey’s efforts, but the continuing commitment that organizations like Boulder Housing Partners and public officials have made to provide innovative and sustainable affordable housing in Boulder,” said Angela McCormick, chair of BHP Board of Commissioners. “While the need for affordable housing has only intensified in recent years, we are setting a national example in Boulder for thoughtful design and project financing.”

Among BHP’s most recent achievements is Red Oak Park, a $13 million infill development on the site of a deteriorating North Boulder trailer park. The 59 new homes were built to meet Boulder’s strict community standards for design and energy efficiency while remaining affordable to families earning up to 50% of the Area Median Income. Red Oak Park has won state and national awards this year by the National Association of Housing and Redevelopment Officials (NAHRO) and is a finalist for the Global Award for Excellence from the Urban Land Institute.

Martens has served as BHP’s executive director since 1999. Under her leadership, BHP is one of only 35 public housing authorities in the United States participating in the prestigious Moving to Work program. Administered by the U.S. Department of Housing and Urban Development, Moving to Work gives public housing authorities exemptions from many existing rules and more flexibility with how they use the federal funds they receive. In return, agencies make recommendations to HUD on innovative programs that move the affordable housing industry forward.

Martens is also serving a two-year term as President of NAHRO, the nation’s premier housing and community development association.

Boulder Food Rescue Delivers Food and Happiness, Weekly

Fri, 20 Jul 2012 12:17:00 -0600

Posted by Emily Reed, Media Project Coordinator

Founded less than a year ago, Boulder Food Rescue has saved over 90,000 pounds of food from being discarded. The volunteer powered non-profit picks up soon-to-expire perishable items from local restaurants, grocers, and gardens and delivers them by bike to those in need. Every week since February the organization has been delivering fresh produce and healthy snacks to the residents of several Boulder Housing Partners’ rental properties.

I recently had the opportunity to visit during a delivery and experience the joy they bring with the food. While awaiting the arrival of Paul, a Boulder Food Rescue volunteer, I spoke with BHP Resident Services Coordinator Sally Miller about the logistics of Boulder Food Rescue’s work and listened to a small group of residents enthusiastically share the ways they cooked last week’s asparagus.

Sally mentioned that within the past few months Boulder Food Rescue has started delivering to a total of five BHP sites and has been extremely popular among the residents. While I was there a resident explained to me that because she and many others live on a fixed income it is difficult to afford food by the end of the month. Boulder Food Rescue helps to ease this stress by providing fruits, vegetables, and bread on a dependable schedule.

After Paul rode in, everyone helped to unload the containers and fill the table tops in the apartment’s community room with packages of baby greens, hundreds of taco shells, and over forty pounds of cherries, strawberries, grapes, and other produce. As residents chose their favorites, talked, smiled, and laughed, I realized that the weekly Boulder Food Rescue delivery brings more than nutritious food.

To learn more about how Boulder Food Rescue works or to donate, visit their website.

Boulder Housing Project's Red Oak Park is finalist for international award

Wed, 20 Jun 2012 14:00:06 -0600

By Cory Lamz at the Daily Camera

Boulder Housing Partners has received a national award and is a finalist for two more awards, including an international one, for its Red Oak Park affordable housing project.

Twenty-eight other real estate development projects are finalists for the international award, part of the 33rd annual Global Awards for Excellence by the Urban Land Institute. The winner will be decided at an annual conference in Denver in October.

“Factors considered by the Urban Land Institute jury for this award include generated revenue, quality of the design, what the project means for the community and how it could inspire the community,” said Daniel Lobo, manager of awards and publications at the Urban Land Institute. “Red Oak Park wasn’t even lumped into affordable housing per se but just housing in general.”

Red Oak Park, located in north Boulder, opened at the former site of Mobile Manor, an older mobile home park, in 2011. It is the only affordable housing project considered as a finalist for the international award, according to the Urban Land Institute website.

… Link to full article

Guiding Principles for a New Affordable Housing Policy

Wed, 16 May 2012 09:37:00 -0600

A practitioner’s perspective

By Betsey Martens
Executive Director, Boulder Housing Partners
For the Journal of Housing & Community Development, 2011

This article is the third in a series that began with an exploration of the political history of public housing [1]. That first piece explored the idea that many of the problems that challenge our affordable housing industry today have their genesis in the political compromises that precede the passage of the U.S. Housing Act of 1937. It also examined the conditions that are present in our nation’s early response to a housing crisis that resulted in a housing policy that apportions resources to the housing goals of the wealthy in greater measure than to the critical housing needs of the economically poor. Finally, the article looked at key themes that shine some light on how we might effectively affect significant change in American housing policy today.

It concluded with the suggestion that the key ingredients of a new policy may well include:

Strategic partnerships with the private sector;
Public ownership and stewardship of the assets;
Targeting of the greatest need married with mid-market eligibility;
Excellent project design that integrates into, and improves, neighborhoods;
A single-tiered housing policy that creates opportunity for all.

The second article [2] explored a strategic map for repositioning public housing and offered policy makers a strategy for the essential preservation of public housing for those communities where the asset is in jeopardy. This final article takes a broader look at federal housing policy and suggests a number of key issues and debates that await us. Given the challenges that have ensued in the past two years, both for our housing and community development (HCD) industry and the nation as a whole, the five ideas have expanded to 10, along with a plea for action.

From our industry’s perspective, it’s time to re-think our national

HCD policy because:

The nation is still reeling from our over-emphasis on homeownership;
Our changing economy and demographics now favor a more aggressive and creative rental policy;
We have an aging public housing inventory in peril;
We have a successful voucher program threatened by complexity;
We have a growing understanding of the need to align affordable housing with transportation, schools and jobs;
We have an under-utilization of the private sector;
And, we still have millions of Americans under-housed, homeless or substantially rent-burdened, which creates impacts for both the individual and the community.

As a result, the five initial ideas from the first article have grown into seven guiding principles for the next major housing policy initiative, and are accompanied by three actions that we can undertake while the policy discussions evolve.

GUIDING PRINCIPLES

1. A Single-Tiered Housing Policy

The first article in this series undertook a broad appreciation for how radically the adopted public housing program departed from the original vision imagined in the 1930s, and how the resulting creation of a two-tiered national housing policy continues to work today. While the HUD budget is proposed at $48 billion in FY2012, [3] the Office of Management and Budget (OMB) estimates that we will ‘spend’ $212 billion, or four times more than that, on tax expenditures for housing subsidies for Americans whose incomes are greater than 50% of the area median income (AMI) in FY 2012 than we will on direct outlays for low-income housing. [4] The biggest housing subsidy among many is the mortgage interest deduction program (MID). This tax break, which also ranks as the nation’s third largest, is expected to account for more than $131 billion in tax expenditures this year. The other two tax expenditures that round out the $210 billion are the property tax exemption, at a cost of $31 billion, and the capital gains exemption, at a cost of $50 billion.

While the political popularity of the MID program is undeniable, a growing number of economists believe that the MID is ineffective in increasing rates of homeownership [5]. It can be argued that the mortgage interest deduction is poorly targeted according to this criterion. Households with incomes between $40,000 and $75,000 receive, on average, $523 from the mortgage interest deduction; households with incomes above $250,000 receive $5,459, or more than 10 times as much. [6]

According to the Joint Committee on Taxation [7], the housing-related tax expenditures can be considered inequitable because “such deductions, under a system of progressive tax rates, reduce the cost to the taxpayer …by a greater percentage for higher income individuals.” This confirmation that we have a de-facto two-tiered system has been little challenged, for obvious reasons. These facts suggest that we have a domestic budget with an enormous tolerance for investing in housing subsidy, but one that is poorly targeted to the greatest need. Of the resources available to subsidize housing, 24.3% goes to our customers. By the metrics of both economic development and social justice, we have a housing policy grossly out of balance.

There is no question that the demand for affordable housing exceeds the supply. According to the National Low Income Housing Coalition’s (NLIHC) interpretation of 2009 ACS data, we have a shortage of 3.4 million units in this country for households whose earnings are at or below 30% of the AMI. Of these 3.4 million inadequately housed households:

750,000 are homeless
1.9 million are paying more than 50% of their income in rent
765,000 are living in substandard housing, doubling up and/or are constantly moving.

As practitioners, we witness the impacts on families who are insufficiently housed. These are widespread, and range from health problems to education impediment to employment barriers to lack of personal and community development. We need to get the National Housing Trust Fund capitalized and producing units, and we need new housing vouchers. In addition, we need to produce controlled data that proves that the investment in affordable housing will save or leverage millions of dollars in our other domestic programs. It’s not good enough to experience it locally. We need to provide compelling evidence that affordable housing has an economic impact equal to its social impact.

2. Tax policy and incentives to make rental housing more appealing

The primary tax policy in place that incentivizes investment in affordable rental housing production is the Low Income Housing Tax Credit program (LIHTC). There’s no question that LIHTC has been a

boon to the affordable housing supply, [8] as well as to the economy. While critics cite the inefficiency of delivery of project equity and income targeting that can be poorly matched for housing authority customers, [9] on balance, the program has achieved far more than its framers imagined and it is an important tool to preserve and expand. The suggestion that we should consider additional tax policy promoting renting and rental unit production is substantiated by these factors:

Job markets are much more mobile, causing workers to want to be less tied to an asset;
An uncertain real estate market, and an unwillingness to invest in appreciation;
The results of too many people using homes to build wealth rather than using homes for shelter;
The growing understanding that not everyone is ready for the financial and related responsibilities of homeownership.

This time, the incentives need to accrue to the renter. The most prominent idea is a rent credit. Others are working on programs that build renter equity and reward community engagement. These are all on the right track.

The long debate between solving housing problems through supply versus demand is softening into a system built with both.

3. Meaningful and substantial deregulation

The current paradigm of less money and more rules is not only a threat to our programs but a scientific impossibility. David Smith of Recapitalization Advisors has renamed this phenomenon the Heisenberg Financial Uncertainty Principle.[10] Heisenberg was a quantum physicist whose work inspires the idea that, in a closed system, you can determine only one of a pair of variables. You cannot control, in our case for example, both the funding appropriated and the management of the systems. A change in one of the variables has direct and immediate consequence on the other. For the system to stay in balance, the two variables have to be independent. None of us needs to understand quantum physics to know how true this is. It is an impossibility to manage a system

with fewer resources and more regulations.

While the ideal future scenario achieves more funds and fewer regulations, the current economic environment suggests that more funds are not realistic, and therefore a realistically deregulated system becomes essential. The FY2011 reduction in HCV administrative fees brings this tension to a head. Many public housing authority (PHA) directors are combing through the statute and regulations to find ways to become more efficient with fewer funds. Sadly, most of the obvious solutions—biennial re-certification for fixed incomes; threshold testing of asset income; elimination of third party verification—are found in statute and can’t be changed. NAHRO is actively working with HUD to advocate for changes that HUD can make under its own authority to make administration of our programs less cumbersome We are long overdue for some common sense streamlining.

On the legislative front, NAHRO has many strong proposals on its deregulation agenda including the Small Agency Reform Proposal (SHARP), voucher reform, the pilot conversion of public housing proposal, and our long-standing advocacy in support of the expansion of the Moving to Work (MTW) program. All of these initiatives are consistent with a philosophical agenda related to limited government.

4. Targeting of the greatest need married with mid-market eligibility

Targeting need with mid-market eligibility suggests that future affordable housing projects should combine the concepts of mixing incomes with a creative use of internal subsidies. There are still a variety of investment policies that encourage the creation of density of very low incomes. Many states’ Qualified Action Plans for the tax credit program continue to reward the greatest concentration of the lowest incomes. If history has taught us anything about affordable housing, it’s that deep and concentrated affordability in projects greater than 50 units can be not only difficult to manage, but also economically unsustainable.

5. Underwrite services as part of every affordable housing project

The need for affordable housing is not always, or only, economic. While housing may appear to be the goal, the heart of what we’re doing in our housing and community development industry is creating opportunity, changing lives and creating sustainable and viable communities. And while our funding is focused primarily on the physical asset, the expectations about the outcomes of our work are all focused on outcomes for our customers. This has been described as mission confusion for HUD. However, our efforts in helping residents to achieve economic self-sufficiency can be an important supply strategy for many communities. To the extent that residents can move into market-rate housing more quickly, the more rapidly our long waiting lists shrink.

6. Public ownership and stewardship of the assets

There will always be a tension between the appropriate role of the public sector in housing development and management. From David Smith’s article on the Essential Housing Authority, public sector accountability provides four key things:

Assurance of permanent affordability
Assurance of mission-alignment
Longevity and durability
Tenant protection in a problem-solving model

There was tremendous confusion during the early PETRA hearings; some thought that the public housing transformation initiative was an attempt to privatize public housing. Public ownership doesn’t mean that PHAs need to do everything related to ownership and management. In fact, in this same article, David Smith challenges us to keep in-house only those functions that are unique and essential to being a PHA and outsource the rest. It would quiet the criticism about cost and efficiency.

7. Excellent project design that integrates into, and improves, neighborhoods

The total development costs associated with the US Housing Act of 1937 produced housing that can only be described as spare, bare and ugly. We know that policy approach had often-disastrous results. Not only did residents become quickly dissatisfied, communities objected to the stereotyped and monotonous housing. Now we need to embrace, as we have been for the last decade, beautiful project design. We know that if we produce one bad project in our communities, we’re done for 10 years. We need to understand the strategic placement of affordable housing in a community and use the essential relationships between planning relationships to determine where in our communities affordable housing can be most powerful. The next time you’re offered a piece of land on the edge of town where there is no transit, shopping, or employment - keep looking. This is where our partnership in NAHRO—the marriage between H and R—is so essential. NAHRO figured this out in 1953 when we went from NAHO to NAHRO. Let’s keep leading the way here.

Letter To City Council on Proposed 1175 Lee Hill

Wed, 21 Mar 2012 11:13:00 -0600

March 16, 2012

Dear Council members,

We know you have been getting a lot of communication about the 1175 Lee Hill proposal. We asked project supporters to do two things in order to show their support and respect your time at the public hearing: 1) voice their support via our website and 2) allow a proxy to speak for them on March 20. One of our five speakers will represent the 374 people who asked that their support be identified publicly. To that end, attached please find a summary of comments from people who are voicing support for the 1175 Lee Hill proposal.

To the extent that time is so limited on March 20, I thought it might be helpful to provide our perspective on a couple of things.

From one perspective, 1175 Lee Hill has achieved an impressive alignment of elements required for a complicated project to come together. It has a proposed site that is the right size at the right price with the right program amenities; it has a very feasible financing plan with competitive sources that are poised to commit on a July 2012 schedule; and it has a long list of people who desperately need this type of housing.

The development proposal is founded on a long policy history that informed our decision making. We assumed that community consensus had already been established about how Boulder will make siting decisions for homeless-related projects, per the work that was done by city council in 2001. We perceived a strong measure of political support for the project, as proposed at 1175 Lee Hill, because we have received two years of funding from the city; the County has invested funds for acquisition of the land; the city led the effort to help us procure a congressional earmark for the project in this location; and the city and county jointly endorsed the Ten Year Plan which features Housing First as the best solution to ending homelessness. As your housing authority partner we have always played the role of implementing your policy vision. That is unquestionably what we thought we were doing in proposing this project.

We now have a second perspective. We have listened carefully to the criticism about our neighborhood outreach process. Many have suggested that we proceeded as if we didn’t want, or care about, neighborhood opinion. In hindsight there are many things that we would do differently in terms of an outreach strategy, but we would never exclude neighborhood input.

Before our planned outreach effort began, we carefully watched the progress, or lack of progress, experienced by Bridge House (formerly Carriage House) as they have tried to locate a new day shelter in Boulder. We assumed that we would experience a similar resistance that they have experienced. Therefore, we chose to be more informed about the details of our proposal when we reached out to the neighbors, rather than less. Regrettably, that created the appearance of avoidance.

We have also listened to suggestions that we should continue our current, and very successful, scattered site approach to Housing First instead of expanding the program using a site-based model. While there is no empirical evidence that suggests that one Housing First approach is better than another, we do know based on long experience, that some people will do better living alone and others will do much better in a supportive community. Equally important to the consideration is the fact that we don’t currently have a ready source of financing to expand the scattered site approach. The use of low income housing tax credits is not available for a scattered project and that leaves a daunting, but not always impossible, financing gap. It also leaves a gap in financing for support services which is a critical program component of the Housing First model. If it were only a question of money, I’m one who believes you can always be creative. For us, it’s about both program and financing.

And finally, we know that there are a lot of concerns about the concentration of affordable housing in north Boulder; the concentration of homeless people; the economic future of north Boulder, and the lack of amenities. These are all important and engaging conversations. It is our view that 1175 Lee Hill can’t, and shouldn’t, be responsible for these public policy decisions, and shouldn’t be sacrificed to the inconclusive nature of tangential policy concerns. We strongly believe that our proposed project to build 31 affordable apartments will solve a problem, not create a new one.

In closing, I want to reiterate our desire for 1175 Lee Hill to be a success, both for the residents who will live there and for the neighbors who make up our community. We are eager to continue working with neighbors to fine-tune the Statement of Operations and to thoughtfully manage the design of the building. I thank you for your time and attention to this project and your ongoing support of Boulder Housing Partners.

With best wishes,

Betsey Martens

Executive Director, Boulder Housing Partners

Repositioning Public Housing

Tue, 13 Dec 2011 11:11:00 -0700

Six Steps to Hope: A HOPE VI companion plan

By Betsey Martens
Executive Director, Boulder Housing Partners
For the NAHRO Annual Conference, October 2009

This paper builds on my January 2009 article in the Journal of Housing & Community Development about the political history of public housing. That article explored the idea that many of the problems that challenge our affordable housing industry today have their genesis in the political compromises that precede the passage of the U.S. Housing Act of 1937. The article also explored the conditions that are present in our nation’s early response to a housing crisis that resulted in a housing policy that apportions resources to the housing goals of the wealthy in greater measure than to the critical housing needs of the economically poor. Finally, the article looked at key themes that shine some light on how we might effectively affect significant change in American housing policy today.

It concluded with the suggestion that the key ingredients of a new policy may well include:

• Strategic partnerships with the private sector
• Public ownership and stewardship of the assets
• Targeting of the greatest need married with mid-market eligibility
• Excellent project design that integrates into, and improves, neighborhoods
• A single-tiered housing policy that creates opportunity for all

This article expands on these ideas, and packages them into six strategic steps for creating a map for the future of public housing:

Step 1: Improve, and green, the asset
Step 2: Rationalize operations
Step 3: Open the door for new partners
Step 4: Preserve the existing demographic
Step 5: Fund resident services as part of operations
Step 6: Fix HUD’s mission confusion

The preliminary step: Agreement on preservation of the asset

Public housing’s early history has been characterized by a steady swing between two political schools of thought — government either in, or out, of the business of providing housing. The once-louder chorus of voices calling for a vouchering-out of public housing has been quieted by a growing understanding that public housing responds to a supply problem for markets where the current public housing demographic can’t often be served. Vouchers don’t work for everyone. Households with large families; households with special needs for supportive housing; households with credit or criminal background problems, or other legitimate needs for a benevolent landlord; households with limited resources or capacity to move, or households challenged by navigating a complicated maze of rules and regulations have not done well in the voucher program.

Where once the debate was a question of either/or — do we need a place-based housing program or do we need tenant-based solutions — we now have an understanding that we need both, and that there is an appropriate role for all sectors in housing solutions; no one sector can do it alone.

In fact, a broad coalition of national housing and community development trustees came together in 2008 to make a strong statement about the need to preserve public housing. The tide is turning in favor of a belief that the nation’s $165 billion investment in public housing is worth preserving.[1]

With the affirmation that public housing is an asset worth preserving, the next step is to solidify the consensus so that we turn our attention to public housing preservation with the urgency that is required. As reported in the report from the Future of Public Housing summit —

The nation suffered a significant net loss of public housing units between 1995 and 2008. While it has received little public attention compared to the mortgage mess and declining home values, this hidden housing crisis is no less devastating to the millions of Americans who call public housing home and for many for whom public housing is the first rung on the ladder of economic opportunity.[2]

“

— Proceedings from the Summit on the Future of Public Housing, 2008, page 2

The current successful preservation tool, HOPE VI, needs to be preserved and expanded. However, HOPE VI is not a solution for all of public housing, or even for much of it, and we need to create a rational reform program for the rest of the inventory. I propose that there are six strategic steps to hope for small and medium housing authorities who don’t have Moving to Work (MTW) status.

STEP ONE: Improve, and green, the asset

The nation’s public housing inventory consists of approximately 1,200,000 units contained in 8,000 asset management projects. Current data estimates that these units have a collective deferred maintenance backlog of $30 billion. HOPE VI has replaced most of the worst of our public housing inventory, and the probable inventory of remaining bad units that will require total replacement is only 100,000 units at this point. [3] The remaining units are in need of a legislative fix.

The Congress should give strong consideration to NAHRO’s proposal to create a term-limited public housing tax credit. Admittedly, now is not the time to bring new demand to a weak credit environment, but now is a good time to do the policy legwork required to roll out a new program. The concept is simple: NAHRO proposes the authorization of a public housing credit program within I.R.C. Section 42 to enable the preservation of existing public housing either through rehabilitation or replacement. The program would be authorized for an initial period of ten years in an amount sufficient to accomplish preservation of a majority of public housing units. Consideration would be given to ramping the credit up to ensure adequate utilization during the early stages of the program.

Alternately, an increase in appropriations for the Capital Fund program would be a more straightforward and rapid solution. We will soon understand the impact of the $4 billion appropriation through ARRA fiends, and we may discover that six to ten more years of doubling the appropriation would bring us a long way toward where we need to be. We also may discover that the asset doesn’t have a decade to wait.

Many housing authorities are working successfully with Energy Performance Contracts to make capital improvements to public housing. HUD should continue strong support of this vehicle and NAHRO should continue to help members learn about, and take advantage, of the financing approach.

Another option for helping housing authorities address more modest backlog needs is to place revitalized public housing on a sound financial footing by providing for a long-term funding structure that would allow them to borrow against a stabilized net operating income (NOI) to get their portfolio into a condition where capital needs are accruing forward. While this approach won’t generate sufficient capital for all of the accumulated needs, it creates the platform to move forward (see Step 2 below).

In related advocacy, NAHRO has also called for the conversion of public housing to a Section 8 project-based model in order to allow the asset greater access to redevelopment capital. As above, this approach will help the moderately distressed inventory, which is the majority of where we need to focus.

STEP TWO: Rationalize operations

Public housing policy and regulation has evolved in such a piece-meal fashion that public housing managers feel more like Jenga players than the real estate professionals that they are. We fear the moment that the hand of Congress might pull the wrong plank and the public housing asset could topple.

Many layers of regulation have evolved in public housing, all of which sit on an unstable base of assumptions. Prior to the Brooke Amendment of 1969, the base of assumption was solid: that property without mortgage debt could be supported by modest rental income derived from a broad range of incomes. The Brooke Amendment, while well-intentioned, had dire policy outcomes for the asset.

Brooke restructured income to decouple it from the cost of maintaining and preserving the asset. It didn’t take long for these meager rents to exhaust the system and an operating subsidy to be required. Soon thereafter, capital funds for modernization were necessary. Not long after, funds for resident services came in a third stream of funds. Following that, a fourth stream of funds for drug elimination and asset protection. As the asset, and residents, demand more resources, the more public housing managers see the precariousness of their operating platform.

Instead of a system that mirrors conventional real estate practice, we have an operating system that is both upside-down and Jenga-like. We have rent that is based on the family’s income, and a subsidy based on the cost to operate. Right side up, we would convert the system so that rental income is relative to the cost to operate and maintain the property, and subsidy would be relative to the family’s ability to pay the rent. This is the system that we see in the voucher program and the system that prevails in every other asset type.

Public housing needs, instead, a sustainable rent contract through which public housing will be guaranteed the funds required for three essential functions: basic operating costs; provision of services to residents; and contribution to a reserve for replacement and/or financing capital improvements through debt.

In this scenario, the rent would be comparable to market rents for similar product in the area, or determined on a budget basis taking into account the need to provide for sufficient replacement reserves to replace capital funding. The underwriting must assure that the manager has access to the excess cash generated. This provides two important operating principles: 1) it creates an incentive to manage to the bottom line and brings the power of market discipline to operations, and 2) it provides for resources to sustain the owner/portfolio/asset management function.

This approach also provides protection during years in which the appropriation to public housing is reduced. If the rent contract is reduced by 10%, then 10% of our units could be released from income requirements and be available to rent to households that can pay the rent without subsidy. This approach provides strong protection for the asset and public housing operations. It also allows tenants and tenant advocates a clear measure of the impact of reduced appropriations.

Additionally, in this approach, PHAS (the public housing assessment system) can be replaced by standard industry metrics derived from net operating income. The process of measuring FHA performance becomes simple, effective and transparent. For those properties that are funding improvements through net income, local banks can replace third party HUD inspectors to assure the protection of the asset. HUD can sub-contract its very important job of risk management and asset performance monitoring down to the local level, where it belongs.

We should also consider the intriguing idea of ACC portability. In 1997 BHP included this idea in its strategic plan with the goal of easing the density of some of our public housing neighborhoods. More recently, Conrad Egan introduced a similar idea to a NAHRO panel in March of this year. Mixed income neighborhoods have been the intuitive answer to public housing challenges for many years. In ACC portability, PHAs could reassign subsidy assistance to units they own in other properties. Making portable our public housing units is a relatively quick and easy way to achieve mixed income neighborhoods for those housing authorities that have an inventory of units that are not public housing.

STEP THREE: Open the door for new partners

Returning to the analogy of Jenga, we have created a public housing structure that can hold up for a period of time, but has never proven itself to be investment-worthy. It’s no wonder that managing public housing has been a singular and lonely business. QHWRA created provisions for some new partners to join the challenge of maintaining and preserving public housing, and HOPE VI has demonstrated the power of public/private partnership related to the asset. Much more needs to be done, however. Very few partners can, and want to, participate in public housing given its current structure. We need to open doors for partners to help with improving the asset, providing services to residents and transforming our buildings to net-zero energy consumption.

We need to be able to engage in tax credit partnerships with greater ease. Mixed financing is clunky and complicated, and the process of converting public housing is improved but still very burdensome.

As our public housing tenant characteristics change we need a meaningful way to engage and maintain new partners. There are two clear and distinct trends in my public housing that I suspect are reflected in the general population. People are living longer with greater medical challenges, and the population of people with disabilities is increasing. The short of it is that service needs are rapidly intensifying.

Public housing is an appropriate and powerful point of service delivery. For communities that are rich with services, we need to be sure we have ways to build lasting relationships with service providers. In rural and smaller communities, we need to fund ways to find partners, or respond to needs directly.

STEP FOUR: Preserve the existing demographic

Despite its position as the fourth step, the most important part of preservation thinking is to be able to assure residents and advocates that we can continue to house, or target, the existing demographic. Public housing conversion proposals are clouded by a concern that housing authorities are trying to abandon their fundamental mission. In her testimony to Congress, Atlanta Housing Authority Executive Director Renee Glover began by dispelling the myth that “PHAs are seeking ‘legislative cover’ to abandon their fundamental mission — providing affordable housing to low income families. This is not true.”[4] New policy must preserve, and improve on, the subsidy structure that makes public housing uniquely available to households with extremely low incomes.

The proposal described in Step 2 allows housing authorities to preserve their existing customer base. Rent continues to be paid based on income, without jeopardizing the operations of the real estate. And, given the proposal that resident services become an integral element in determining a property’s operating cost basis, outcomes and quality of life for residents will be significantly improved.

We should continue to explore, however, some things that might produce better outcomes. If we could simplify the process of calculating rent, we would free up significant resources for residents, housing authorities and HUD. We have developed a tangled web of complexity and oversight in the interest of rent integrity. There is a massive investment of money and time for all of us to force, and enforce, rent integrity in a system that seems almost designed to invite applicants and residents to report inaccurate income, either by mistake or intention.

We could consider a policy in which the rent-based-on-income approach might be preserved for elderly and disabled households whose incomes are fixed; and we could more aggressively understand a variety of flat and tiered rent options for families so that their increases in income are going to future prosperity instead of to rent.

STEP FIVE: Include services as a fundamental part of operating costs

The previous steps have argued for restructured financing with services as part of the core formula for doing business, and for creating broader partner relationships at the local, state and federal levels for appropriate responses to service needs.

There is no question that the need for affordable housing is not always, or only, economic. Public housing households can bring multiple challenges to their tenancy that strain the community and the asset. Step 3 talks about a changing demographic in public housing which is, in some ways, becoming a more high-need population. Every community will need to find its appropriate balance between services the housing authority provides and those that a partner responds to. In either case, the cost of service coordination or service provision needs to part of the cost of doing business.

In addition, our efforts in helping residents to achieve economic self-sufficiency can be an important supply strategy for many communities. To the extent that residents can move into market-rate housing more quickly, the more rapidly our long waiting lists shrink.

HUD could provide strong leadership in this area by creating the kind of service partnerships at the federal level that most of us have created locally. And, as Step Six suggests, HUD could take it a step further and make its mission more clear. I believe that our industry’s primary focus and skill area is housing, and that essential services should come from strong partnerships with the Departments of Education, Labor, Justice and HHS. Coordinated funding that recognizes that public housing needs to be service enriched, and that public housing is a logical delivery system, is an important next step.

STEP SIX: Fix HUD’s mission confusion

On July 29, 2009 the House Subcommittee on Housing and Opportunity held hearings on the future of public housing, The committee invited perspectives from the academic community. Of the eight experts testifying, seven spoke about the future of public housing uniquely in terms of outcomes related to residents. The physical asset or its operating structure was never mentioned, Only one expert, former Assistant Secretary for Public and Indian Housing Orlando Cabrera, spoke about the need to preserve the real estate. This incongruity may be emblematic of mission confusion at HUD. HUD is focused on, and provides funding for, initiatives related to the asset, while the rest of America is interested in positive outcomes for people.

HUD’s PHI website captures a double bottom line, describing the ‘aim’ of public housing as follows:

The aim of the Office of Public and Indian Housing (PIH) is to ensure safe, decent, and affordable housing; create opportunities for residents’ self sufficiency and economic independence; and assure fiscal integrity by all program participants.

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At the same time, I think it’s fair to assert that most PHAs receive funding for only this first part of the goal, yet have obligation and expectation for all service coordination and self-sufficiency. We rely on fund-raising, local grants and donations and creative partnership to cobble together services we find essential.

We need to bridge the incongruity between resources and expectations. As suggested above, HUD can provide leadership in modeling a service-enriched housing program and provide sustainable funds for service navigation and coordination at the local level. In my own organization we regularly revisit the question — are we a real estate provider, or are we a social services organization? I maintain that we are uniquely both. HUD should reinforce, or disavow, that opinion.

Putting it all together: Towards a more balanced housing policy

The very early vision for public housing imagined modest, affordable multi-family housing accessible to the greater public in the same way that the other great public institutions provide: schools, hospitals, transportation and libraries. This potentially powerful concept was disabled before the first federal housing legislation was inked. A coalition of private sector interests was successful in convincing the Congress to make public housing so unattractive and narrow in scope that its potential threat to private developers would be next to none. At the same time, the Congress enacted parallel legislation delivering rich resources to the goal of homeownership. This two-tiered system put public housing squarely at the bottom of the resource pile.

Given the recent lessons related to the risk of pressing too hard on a homeownership goal, the nation might be ready to consider a more balanced housing policy; one in which rental housing production and preservation could share many of the same tax and appropriation resources that the homeownership industry does.

This topic will be the third in this series.

[1] Proceedings from the Summit on the Future of Public Housing, 2008, page 2
[2] Proceedings from the Summit on the Future of Public Housing, 2008, page 2
[3] The Center on Budget and Policy Priority estimates; 2008.
[4] Testimony of Renee Glover to the House Government Reform Committee, Subcommittee on Federalism and the Census, February 2006