Process in the public sphere: It matters.

Last night Council unanimously pledged support for a low-income rental housing tax credit application tied to a 55-unit senior housing development on Borough land near the riverfront. In a kind of post-game analysis, here I step back from the project itself to talk a bit about process.

1) Ideally, a town would have adopted land use and economic development plans that spell out what they want in each area of their town. Then, when any authorized municipal representative is talking to any developers about that area, they are on the same page with what the community planned and agreed to.

2) Ideally, if a town is looking to develop land that it owns, it would put out a Request for Proposals and seek competitive proposals/bids. The RFP and this process would all be public. There would be no private conversations with any developers during this process.

3) Opening the bids: here’s where it gets sticky. In most places, negotiations involving land transactions and real estate development by governmental entities are not subject to right-to-know laws. All parties need to know that they can work out the financial end of a deal without the press & the public breathing down their necks. Confidentiality is paramount. Here’s where you have to have faith in your elected officials to agree to what’s in the best interests of the community and select the top bidder(s) accordingly.

4) If there are no clear frontrunners, in an ideal world, the top 2-3 bids/plans would be publicly presented and community input would be sought at that point.

Four necessary components:
• community-approved land use & economic development plans
• a clear & transparent RFP process
• time and timelines
• community input on selected proposals

Obviously, none of this protocol was followed in this case, which really is not unusual in many small towns and even larger towns where no one’s paying attention. Or where there’s an entrenched way of doing things: This is how we’ve always done it. But it has the whiff of a back-room deal that was foisted on the public pretty late in the game. All I’m saying is, there’s another way to do things, where leaders and the community are engaged in more meaningful ways througout the entire process.

Imagine this: 55 units of low-income, senior rental housing in the middle of a comprehensive waterfront plan that includes a few hundred upscale condos, commercial development and recreational uses. Then the low-income housing is a mere blip in the middle of that; no big deal. You wouldn’t have heard a peep outta me!

Imagine this: There are multiple economic development initiatives underway across town that involve County funding, and this housing is a trade-off in some way in the context of a larger plan that may not even specifically include the waterfront. That could be fine too. Trade-offs – compromise – that’s how things get done.

It’s the fact that you’re leading the way, selling off your own land, with no vision or plan, for what? Low-income rentals? That doesn’t compute.

My frustration comes out of the Borough not being in charge of its own destiny in the first place – not having a clue what the community wants, not having an economic development leader on your team, not doing your due diligence, not making people answer your questions straight-up, not demanding a printed handout of the project proposal & parameters — basically, not asserting yourself. And then being forced to settle. Settle for whoever shows up. It doesn’t have to be that way. It doesn’t.

Unearth your vision – plan – strategize – set goals – implement with a vengeance.

Low- vs. Moderate-Income Housing: Know what you’re voting on (the short version)

A vote in favor of the income-restricted, rental housing project proposed by the Partnership for Income Restricted Housing Leadership (PIRHL) on Borough-owned land is a vote for additional low-income rental housing for Pottstown.

– There is only one tax credit program deadline coming up at the PA Housing Finance Agency and it is Nov. 5th for the federal Low Income Housing Tax Credit Program (LIHTC), which spurs the development of LOW INCOME RENTAL HOUSING.

Jeffrey Paxson, vice president of development for PIRHL, has confirmed to a third party that they are applying for tax credits from the federal Low Income Housing Tax Credit Program, which is administered by the PA Housing Finance Agency.

– Rents in the $500-800 range for 1 & 2-bedrooms in Montgomery County are considered low income NOT moderate income.

– Section 8 certificate holders can NOT be denied housing in a LIHTC project.

That is all.

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

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
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.

Benefit Concert Tonight at Tri-PAC

If you’re looking to kick off your weekend with some pizazz and a gift from the heart, get to the Tri-County Performing Arts Center at 254 E. High Street tonight for SONGS THAT GO LIKE THIS . …. . A BROADWAY REVIEW. Proceeds from the evening will benefit the local Habit for Humanity and the Tri-PAC.

This musical performance is brought to you by Maggie & Mark Moliterno and Friends. Maggie is an award-winning dramatic coloratura soprano, Pottstown native and a versatile actress, who has appeared in principal roles in opera, operetta and musical theater in the U.S. and Europe. Mark, is a bass-baritone, who has performed throughout the United States, Canada, Great Britain, and the Far East, with numerous opera companies, symphony orchestras and festivals. He is also an Adjunct Associate Professor of Voice at Westminster Choir College of Rider University in Princeton, NJ.

The “friends” part of the evening’s performance includes approximately 25 young vocalists from the area.

Photo courtesy of Village Productions
Tickets are $20 for children 12 & under and $30 for adults. A wine and cheese reception is included. The show starts at 8 pm. For more info, check out Tri-Pac’s Facebook page, their website, or call 610.970.1199.

The new Tri-County Performing Arts Center is the home of Village Productions. Village Productions is a dynamic nonprofit performing arts organization that seeks to strengthen community, inspire creative exploration, educate, and entertain, through the presentation of quality performing arts events and educational opportunities geared toward a diverse audience.

HB 712 – PA Land Bank Legislation

This afternoon I sat in on an hour-long webinar on proposed legislation that would enable the creation and operation of land banks in PA. The ability to create land banks would give all municipalities and counties a tremendous tool against blight and property abandonment. I could see a Pottstown Land Bank working hand-in-hand with The Pottstown Partnership, Genesis Housing and even PACA, offering homes for sale or lease-purchase throughout the Borough, marketing & offering housing and work space to artists (similar to Paducah, KY), attracting homeowners, entrepreneurs and businesses, and getting properties back on the tax rolls. But I’m getting ahead of myself.

The Housing Alliance of Pennsylvania sponsored the webinar. The presenters were Cindy Daley, Policy Director of the Housing Alliance, and Irene McClaughlin, an attorney and mediator who has spent her career dealing with blight-related issues in the Pittsburgh area. From the Alliance website: “Anti-blight land banking legislation passed the House on Tuesday, June 29, 2010 by a majority vote of 190-8. HB 712 provides for the creation of land banks for the conversion of vacant or tax-delinquent properties into productive use. The Housing Alliance supports this bill, although we anticipate it will need some technical amendments in the Senate.”

Below are some key points about what this legislation would allow and how a land bank would function. There are still questions about the nitty-gritty details, but with such overwhelming support in the House, it seems like this legislation could very well get passed in some form pretty soon. It is enabling legislation, which means that it allows land banks to be created but it’s up to individual towns and counties. It is NOT mandatory.

There are an estimated 300,000 vacant properties statewide. Between population and job loss and sprawl, rural, inner ring suburbs and urban communities have been faced with blight and abandonment.

An abandoned house or lot reduces the value of all other surrounding houses by an average of $6,720.

There might be potential buyers for these properties, but an inability to find the property owner, the lack of clear title, and debt that exceeds the property’s value all prevent a property from getting a new owner. Existing tools are inadequate: uncertainty of tax foreclosure process; cost & difficulty of condemnation; and existing laws, which have been on the books for decades never anticipated people simply walking away from property.

Land banks are single purpose entities created by local government to manage properties that no reasonable purchaser otherwise wants.

Would allow for the clearing of existing liens and old debt; clearing of title; remediation; assembly of parcels for current market conditions; holding of property until a market emerges; disposal or transfer under terms and conditions driven by the market.

Land banks just a part of a larger picture. Still need tax collection and foreclosure reform along with clearer mechanisms for protecting low-income homeowners or owners who simply wait until the last possible minute before paying their taxes. This enabling legislation – HB 712 – is just the beginning of the process.

Details of HB 712
Defines a Land Bank as a public agency.
Jurisdiction: Cities or counties that are authorized by state law to create a redevelopment authority. Any city or boro with 10K or more population.
Formed by an ordinance subject to approval by a mayor or county executive.
Intergovernmental Cooperation Agreement (ICA) between 2 or more land bank jurisdictions.
Smaller jurisdiction could join an existing land bank.
If there’s a land bank in a city and in that county, the county can’t take real property in that city.

Board of Directors
5-11 members (odd number); can include public officials and municipal employees.
Must include at least one voting member who is a community resident and a member of a civic organization, but who is not a public official or employee.
Must have open meetings, a regular meeting schedule and follow Sunshine Laws.
Staff: may hire employees, or have crossover with city staff & municipal functions

General powers
Adopt, amend, repeal bylaws
Borrow money
Issue negotiable revenue bongds and notes
Enter into contracts
Collect rent
Design, develop, construct, demolish real property
Partnerships, joint ventures for development of real property.
Needs to have capacity to maintain the property according to existing codes.

Acquisition & Holding of Property: gift, transfer, exchange, foreclosure, purchase, from municipalities, from tax claim bureaus. At this point, these properties are undesired by anyone else.
Land bank’s real property, income and operations are exempt from state & local taxation.
Land banks may only acquire property within their jurisdiction, except by Intergovernmental Cooperation Agreement (ICA.) Except if property is leased out to 3rd party for more than 5 years, then income becomes taxable. Ideally, will stabilize and bring up values of surrounding properties.

Disposition: A land bank must create an inventory of its real property which is available to the public for inspection.
May sell, transfer, lease, or mortgage any real property of the land bank.
A land bank may establish priorities for the re-use of real property it conveys, including but not limited to uses for: purely public spaces and places, affordable housing, retail, commercial & industrial activities, conservation areas. These uses are not specified in the bill; it’s up to each particular Land Bank. Priorities don’t have to be uniform across the land bank area. Bill recognizes that land use is going to be specific to location. By-laws and any ICA would establish specifics and priorities.

Financing Land Bank operations:
Grants & loans from municipality, Commonwealth, Fed. Govt. & other public & private sources.
Payments for services rendered.
Rents and leasehold payments.
A practice adopted in Michigan that provides a regular funding source: an agreement is reached with the taxing jurisdictions – not more than 50% of real property taxes collected for 5 years after the transfer of property will go back to the land bank. As proposed in HB 712, this is optional, subject to agreement with municipality and school district.
Borrowing and issuance of bonds. Municipalities may but are not required to guarantee the bonds Bonds and income are tax-exempt.

Required to keep records of proceeding & subject to following state laws:Open meetings, Right To Know, Conflict of Interests, Ethical Standards Laws

Special Powers
Power to discharge & extinguish real property tax liens and claims, subject to the approval of the school district for school taxes.
May file a court action to quiet title in an expedited procedure. Multiple parcels of real property may be joined in a single complaint in action to quiet title.
Land banks do NOT have power of eminent domain.

Dissolution: There is a procedure for dissolution of the Land Bank.

Audits: Land bank income and expenses and a report will be submitted annually to DCED and to participating municipalities.

Land Banks and PA Real Estate Tax Collection & Foreclosure
Municipalities may assign tax claims and liens to the land bank. Municipality and a land bank may agree to a set bid price in advance of public auction (upset sale or judicial sale as well as at “single sale” allowed unter MCTLL (only for Phila and Allegh. Counties)) and transfer property to the Land Bank as purchaser in accordance with the agreement. Within 30 days of the purchase, the land bank must receive the deed transferring the property free and clear of all claims, liens and charges.

Next steps: HB712 is now in Senate Urban Affirs & Housing Committee. The Committee intends to hold a hearing on the bill – early Sept.? The Housing Alliance is convening a Working Group to review the bill & propose amendments. All interested stakeholders are invited to participate. And once the language of HB 712 is finalized, the group will begin working on mechanism for financing land banks and tax sale reform, including strong hardship waivers.

Pottstown’s Proposed Rental Rules

I posted this earlier today at The Mercury (as Number5). The Mercury/First Suburbs project asked for feedback about proposed changes to the rental registration/inspection ordinance.

” Even Keel has hit the nail on the head. The current ordinances were/are not being enforced. Maybe some combination of revisions to the current ordinances would be ideal, although I’m skeptical of yet more layers & tougher sanctions in an environment where the most basic enforcement hasn’t even been tried yet. And Meadowdeb makes a good point: there are existing laws regarding landlord/tenant rights. An understanding of these must be explicitly part of the discussion.

Bottom line: passing ordinances is not that hard. Enforcement is and that’s been the problem. There should be much more discussion about how enforcement would work. Notifying tenants & landlords, scheduling inspections, showing up for inspections, re-scheduling, collecting fees, procedures with the courts, setting up payment systems for each instance where money might change hands, etc. This should all be thought out before changing an ordinance. What will be the day-to-day reality of any ordinance, even the existing ones?

What is the current Codes Dept. capable of handling right now on top of current duties? I admit I have no idea, so I have to imagine… I’m picturing an inspector coming back to the office from a day of inspections and re-inspections. Did he/she record the inspection results in a handheld device? Does he/she sit at a computer and input the data into a database that’s been set up… by whom? Does he/she hand a pile of papers to an administrative assistant? Are there paper files and computer files? How long does it take to send out the letter telling the landlord what repairs need to be done? The next day or a week or a month? How many units are we talking about here? How much time does a landlord get to do repairs? Does the landlord call to schedule the re-inspection, or is it put in the violation letter? Do inspections start in different parts of town simultaneously? Is there one inspector assigned to each ward or do they work all over town? How do you track the data that’s being collected so that you know how many units/buildings you’ve been to and whether your program is succeeding so that you can report the numbers to the taxpayers on a quarterly basis on your website? Just going through this exercise makes me think annual inspections are too much. By the time you’ve closed a lot of files, it’ll almost be time to give 60-day notice for the next inspection. And does any governmental entity really want to be collecting/tracking security deposits??

I’m not ashamed of having been a bureaucrat in a previous life. As a planner, maybe it’s in my DNA. Bureaucracies can be set up efficiently to accomplish a public policy goal, or they can be an unworkable, expensive nightmare. “Good government” – Pottstown has to be going for that. So, what, EXACTLY, needs to be in place to make enforcement a reality? And can the program pay for itself – salaries, paper, postage, computer & database management? Has there been any discussion based on facts – like the number of rental units in town – to justify proposed fees or prove fiscal sustainability?

Is it possible that the current ordinances could get things moving in the right direction & allow the Borough to put the proper systems in place and then re-assess the program after a year or two of operation? In any event, why not take the time now, in a public roundtable setting, to vet any changes or even new enforcement of existing laws with the stakeholders (landlords, tenants, concerned homeowners)? Then allow for Council to have a public discussion and accept public comment over the course of several meetings. It’s good of The Mercury to do this, but it really should be happening face-to-face at Borough Hall, with civility a top priority.

Proceeding with caution & collaborating could avoid lawsuits, save tax dollars in the long run, and get everyone a program that mostly (nothing’s perfect) achieves the desired outcomes: safe & decent housing and neighborhoods, housing stock that maintains or increases in value, and more positive perceptions of the town, which actually have a basis in reality.

Positively!Pottstown ”

First Suburbs: Affordable Housing Notes from NJ

Affordable housing policy is near the top of any First Suburbs agenda and rightly so. In towns that are experiencing the economic disinvestment described earlier – the loss of industry and large and small businesses – the value of the housing stock becomes more critical to the property tax base. And because education is by far the most expensive part of public services, a strong housing market is essential. Yet, the housing markets in First Suburbs suffer the same kind of disinvestment. How can the cycle be broken? Of course, that’s the multi-billion dollar question. And, of course, there’s no way I can answer it. All I can offer here is a resource for your further investigation of the regional and statewide inclusionary zoning system that has evolved over the past 35 years in New Jersey. I hope that these notes and links can inform the conversation and spark some ideas that help SEPA’s First Suburbs as they advocate for more equitable housing policies in their own region.

The New Jersey Fair Housing Act was passed in 1985 to try to even out social, economic and educational disparities between cities and suburbs. The Legislature passed it in response to a couple of New Jersey Supreme Court rulings, Mt. Laurel I (1975) and Mt. Laurel II (1983). The first decision basically found that large-lot zoning laws didn’t allow for a variety of housing types at varied price levels, which excluded people of color and of lower incomes. The second decision created the foundation for a system for determining a “regional housing need,” the “fair share obligation” of individual municipalities in that region, and the “builder’s remedy,” described below.

The Fair Housing Act created a Council on Affordable Housing and a vast body of regulations and calculations to assign a “fair share” number of low- and moderate-income units to each town based on a variety of factors. The program was voluntary. Towns could submit Housing Plans, get them certified through a lengthy process, and then be monitored for compliance. The “carrot” part of this approach was that if towns did this, they couldn’t be sued by builders or housing advocates over their zoning. But if they didn’t participate in the system, they could be subject to “the builder’s remedy” whereby a builder/developer could sue the town to increase the zoning density so that he could provide affordable units in a new development – usually 20%, which would remain affordable (price-restricted) for 30 years. Special housing courts with judges and court masters – urban planners who specialized in affordable housing – would hear these cases and make decisions, essentially taking zoning control away from the non-participating towns. That was the “stick.”

When the Legislature stepped up to pass the Fair Housing Act (and stop the Supreme Court from interfering with local zoning), it created a mechanism – Regional Contribution Agreements (RCAs) – to water down the court’s influence by allowing towns to buy their way out of up to 50% of their affordable housing obligation. “Sending” towns could pass bond ordinances and send the money – based on an agreed-upon per unit fee – to a designated “receiver” city in their region. In this way, some towns reduced the number of affordable units built within their borders, but they also provided urban areas with much-needed rehabilitation and new construction funding at a time when the federal government was cutting these programs. Still, it was clearly a way around the original intent of the court decisions.

More than 25 years later, in July 2008, the NJ Legislature and Gov. Jon Corzine abolished the RCA provision and also created a non-residential development fee of 2.5 percent to be charged on non-residential construction or improvements to raise revenue for the construction and rehabilitation of affordable and workforce housing in the state.

New Jersey’s system grew out of strong, grassroots advocacy for lower income people in the state’s cities, who knew that inner-city residents were being systemically kept out of better public schools, and safe and clean environments due to exclusionary housing laws. Builders were also pushing against these laws for their own gain during a period of generally remarkable economic growth in a state with ever-diminishing developable land.

We are in a very different economic and political environment now. One of Gov. Chris Christie’s first moves was to order a 90-day moratorium on most of the activities of the Council on Affordable Housing. The NJ courts once again stepped in and issued a stay on a portion of the order, while it is on appeal. The Governor is now reviewing the results of a Task Force on the matter. Even though many suburban towns truly voluntarily participated in this system, changed their zoning, and opened up their communities and schools to low- and moderate-income residents who might not otherwise have been able to live there, the complexity and the burdens of this system are legendary here. It has certainly produced affordable housing (see numbers here) and some degree of economic and educational opportunity for thousands. But there are still very real differences separating our cities and more affluent suburbs, namely, blatant racial segregation. Still, I think those Supreme Court justices back in the ‘70s and ‘80s were on the right track, recognizing that ordinances and public policy can have discriminatory effects and staying on the alert to try to counteract any systemic inequities.

New Jersey’s property tax/school funding system is broken – to say nothing of “home-rule,” our 566 municipalities and 605 school districts! The current widespread fiscal crisis only puts that in high relief. Finding political, social and economic solutions, that are also pragmatic, remains our challenge – and probably will be for some time to come. Taking New Jersey’s experience into consideration, though, may help SEPA’s First Suburbs get a better feel for how some housing policies might play out at the intersection of the private and public sectors in their own hometowns.

Note: The original post said that Gov. Christie’s recent order was repealed; a stay was issued on a portion of the order while it is under appeal.

Sue Repko is a writer, licensed urban planner in New Jersey and a member of the American Institute of Certified Planners. She grew up in Pottstown and blogs at Positively!Pottstown.

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