2000.04.03 MAHTF MinutesAFFORDABLE HOUSING TRUST
Minutes
April 3, 2000
Members Present: Peg Murray, Chair, Neti Andersen, Matt Pitoniak, Don Bianchi, Mayor Higgins. Also present, Peg Keller, staff and Gerry Joseph from the Community Builders.
CALL TO ORDER
Chair Murray called the meeting to order at 6:10 p.m. Mr. Pitoniak made a motion to approve the minutes of January 18, 2000, seconded by Mr. Bianchi. The vote was unanimous in favor.
Mr. Joseph was introduced and thanked for coming.
Presentation
Mr. Joseph distributed spread sheets that described the way the fund works and some of the assumptions it was based on initially. The tax credit model of 60% of median income was used
as too much money would be required to go below that level. Based on the 30% turnover of the first year and the fact that there were 167 rather than 182 units, the time period that
a subsidy might be available is now 10 rather than 15 years.
The options to stretch the money further were outlined; raise more money, raise the 60% standard, increase the 30% of income rate to 35%, eliminate utility assistance. The original plan
reflected the best thought at the time without knowing what the turnover rate would be and when Mr. Spear’s money would come in.
Another way the fund could stretch beyond 10 years would be if market rate rents stayed the same or decrease. Peg K. agreed to get a status report from Gerard Hughes (Hampton Gardens
Property Manager) and/or request a meeting with Gerard and Diane Andes (Vice- President, Spear Management).
Mr. Pitoniak noted that now is the time to make a change prior to the fund actually being accessed. It is anticipated that the fund may be drawn on in 2 years. Currently, there is a
1.5 million dollar shortfall (whether the agreement is a good one or not). Mr. Joseph agreed to run different scenarios, eliminating utility costs and changing the 30% to 35%.
The Trust will have to decide whether to increase the subsidy for less people, or give less assistance to more people. It was stated that the very low income tier cannot be addressed
without subsidy. The effort does address low and moderate income households.
The Mayor questioned that if there is a 1.2-1.5 million dollar need here, is this the best place for the community to apply those resources? The application here would only get 5 more
years. It is possible that the community may want to think about using those funds
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to create12-15 permanently affordable units for those same dollars. Mr. Joseph noted that even at $100,000 per unit, plus the $4,000 annual operating cost per unit, subsidy is still
needed.
Another suggestion made was to reduce the last five years of subsidy and develop individual development accounts to help people accommodate rent increases and pursue homeownership. This
would help people transition out rather than provide assistance for them to stay in place.
Members discussed the student population potential for moving into the larger bedroom units and being able to pay the market rates. It was discussed that in year 8 of the agreement,
we could revisit it again. It was noted again that this is not a long term solution, and the reality is we may not be able to do more than the agreement allows.
In summary, Mr. Joseph agreed to run a few more scenarios based on the options mentioned. The interest rate will also be adjusted to reflect the actual rate being earned.
Mr. Joseph was thanked for his work.
Other Discussion
Chair Murray agreed to speak with the City Treasurer to open a new CD for the additional $54,860 we received from Spear. Members felt that the new account should earn the same rate as
the other account. If that proves to not be the case, Peg M. will instruct Ms. Marusek to call Mr. Pitioniak.
Election of Chair
Ms. Murray said that the Trust was formed a year ago, so election of a chair is appropriate. She expressed willingness to continue in that position. As a result, Mr. Pitoniak made a
motion to have Ms. Murray continue as Chair of the Affordable Housing Trust, seconded by Mr. Bianchi, vote was unanimous in favor. Members expressed appreciation for her willingness
to continue to oversee the effort.
Adjourn
Being no further business to discuss, the meeting adjourned at 7:45 p.m.
The Next Meeting was scheduled for May 22, 2000 at 6:00 p.m. to discuss the charge of the committee.
Respectfully submitted,
Peg Keller