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Low vs. Moderate-income Housing: Know what you’re voting on

September 13, 2010

Thanks to bikerowen, whose comment at the Mercury opinion page today caused me to make a phone call to the Pennsylvania Housing Finance Agency (717.780.3800).

I have heard that the Partnership for Income Restricted Housing Leadership (PIRHL), the developer of the proposed age-restricted, rental project near the river, has never directly answered the question in public, “What tax credit program is this?” Could it be that it is the Federal Low Income Housing Tax Credit Program and the name is not very attractive, especially for Pottstown’s efforts to change its image? It includes the term “Low Income” in its name because that’s who it serves. I am not aware of any moderate- or middle-income tax credit programs and would be glad to hear about them if they exist.

Here’s a program definition from an overview at the Pennsylvania Housing Agency’s website: “The Low-Income Housing Tax Credit Program (“Tax Credit Program”) is a federal program created by the 1986 Tax Reform Act and amended pursuant to several subsequent Budget Reconciliation Acts. The Pennsylvania Housing Finance Agency (“Agency”) is the Commonwealth agency responsible for the administration of the Tax Credit Program. The purpose of the Tax Credit Program is to assist in the creation and preservation of affordable housing for low-income households.” (my emphasis added)

Preliminary applications for the Federal Low Income Housing Tax Credit Program are due on or before Nov. 5, 2010. (The only deadline coming up for a tax credit application.) If the Preliminary Application is approved by the Agency, applicants may submit a full Underwriting Application for Tax Credit consideration on or before March 1, 2011. On the Agency’s Program Notices page, under the Multifamily Rental Housing Programs section, click on the Draft Housing Allocation Plan link to see the programs and guidelines for the Pennsylvania Housing Finance Agency Allocation Plan for Year 2011, Low Income Housing Tax Credit Program. (The Agency is using the Draft Plan until the final approval of the plan at its October meeting.)

The income and rent limits that apply to this program appear in this chart. Scroll down to Montgomery County.

The Montgomery County figures on this chart present a discrepancy among the $500-$800 estimated rents; the 60% of median income, which is what has been reported; and/or the one- and two-bedroom units being proposed.

One- and two-bedroom rents in the $500-$800 range coincide with persons at the 40-50% of median income levels. By virtually all affordable housing standards, this is considered “low income,” not “moderate income.” 60% of median income is the maximum allowed under the Federal Low Income Housing Tax Credit Program. I believe you get more tax credits if you elect to peg your rents below 50% of median rather than 60% of median.

According to the chart, if these 1- and 2-bedroom units are pegged for “moderate-income” seniors, you’d be looking at 60% of median income and the rents would be in the range of $800-$1000.

So, which is it?
1- and 2- bedroom low-income rentals at $500-$800
OR
1- and 2-bedroom moderate-income rentals at $800-$1,000

Please note on Page 7 of the Tax Credit Program General Overview Requirements that, “A prospective tenant may not be denied admission into a Tax Credit property because of holding a voucher or certificate of eligibility under Section 8 of the Housing Act of 1937; if they are otherwise eligible.”

All of PIRHL’s featured projects at their website have used Low Income Housing Tax Credits or LIHTCs. There shouldn’t be any confusion about the rent ranges for low-income vs. moderate-income, 1- and 2-bedroom rentals in Pottstown, unless The Mercury got it wrong twice. If that’s the case, then please accept my apology and disregard this post.

Having cut my teeth in affordable housing and still considering myself an advocate across the board for the less fortunate in society, I’m not usually on this side of this argument. But Pottstown is bearing more than its fair share of affordable housing in this region.

I know full well that no one ever asked me to be Pottstown’s “advocate,” but I feel strongly that “knowledge is power,” and Pottstown as a whole seems to operate at the mercy of those with more information or knowledge, whatever you want to call it, or to simply not engage with them. I’m simply urging Council and members of the public to ask questions and demand answers. In the meantime, I will keep putting my knowledge out there in service to the public as best I can.

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4 Comments
  1. Andrew Kefer permalink
    September 13, 2010 3:40 pm

    Hi again Sue, I don’t always agree with Bikerowen’s comments, but he appears to be ‘right on the money’ this time. To me, it begs to ask the much bigger and more important question, “Is any development in Pottstown, good development?” I heard a while back that there was talk of turning the parking lot at High and Evans St. into an Autozone, autoparts store. Again, is any business on High Street a good business? Are Pottstown’s leaders even in a position to be picky at this point? Is growth good, just for growth’s sake? Sorry, it must be the old philosophy major in me coming out of the woodwork.

    Conservatives like to rally around the term, ‘wealth distribution’, whenever there is talk of anything that might make society more equitable. Amazingly, at least in many parts of Pennsylvania, poverty is concentrated in the older cities and boroughs. Very rarely do you see poverty in the surrounding townships. I read an article yesterday that 35% of the population of the City of Reading is below the poverty line. How can cities and towns expect to survive if they can no longer attract the middle class? I’m looking forward to see your response. Thanks!

    • September 13, 2010 3:58 pm

      Hi, Andrew –

      We’ve just come off of a public discussion about First Suburbs and the pitfalls of not confronting the inequitable wealth distribution happening in towns like Pottstown across the state. We’ve also just had a very public discussion about the unacceptable level of low-income rentals in town and their role in the First Suburbs dilemma. I almost – almost! – can’t believe the county has brought this project to Pottstown and that the leaders seem poised to accept it at face value.

      Unless the developer clearly articulates otherwise, this is NOT middle class housing being proposed.

      Pottstown has the industrial era in its blood, and I am not against uses that pull in that direction… as long as the environment and health of citizens is not put at an unacceptable risk level (I realize everyone’s mileage will vary on that.) The point of revitalization conversations, visioning and planning, though, is to see what businesses might be possible that function at a higher economic plane – bringing in higher-paying jobs and cleaner, safer operations. This can also work hand-in-hand with helping the resident population achieve higher levels of education and training to obtain those jobs.

      I am not an advocate of growth for growth’s sake. It’s the antithesis of planning!

      As always, thanks for joining in.

  2. September 14, 2010 7:17 pm

    Andrew,
    The Auto Zone is being built right now.
    It replaced the building that was once Town Toy and was most recently occupied by Creative Health, which moved over to Robinson Street.
    Auto Zone has leased a number of dedicated spaces from the adjacent borough-owned parking lot and has pledged to upgrade and maintain the parking lot at its own expense.
    The borough also owns the parking lot on the west side of Evans Street.
    That lot it was trying to convey to a developer friend of the governor who had no plan submitted at all.
    That one did not go through, but it remains an open question.
    Last night, Councilman Dan Weand asked if Pirhl would consider building its project at that lot, at High and Evans, and Jeff Paxson said he was not aware it was for sale.
    Just a factual update so your ruminations can be based on all the facts.
    And yes, Sue is right.
    If you are interested in the issue of the middle class in our older towns, First Suburbs is the subject to look under. Both she and I have written rather extensively about that.

    • September 14, 2010 10:14 pm

      Hi, Evan – thanks for the info. I didn’t know the details of the Auto Zone project. That’s great that they’re taking on the maintenance of the lot. I had also heard about Jeff Paxson’s response to that question. At this point, it is what it is. Your comment about the Evans St. lot possibly being conveyed to “a developer friend of the governor who had submitted no plan at all” pretty much sums up what can and does go on in the wacky, wacky world of local government and land development!

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