2022-10-20-CPC-min - Laserfiche WebLink

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1 Minutes for the Community Preservation Committee 10-20-2022 Remote Zoom Meeting Meeting ID: 872 9148 0234 Committee Members Present: Marilyn Fenollosa (Chair), Jeanne Krieger (Vice Chair), Kevin Beuttell, Bob Creech, David Horton, Bob Pressman, Lisa O’Brien, Mark Sandeen, Melinda Walker Other Attendees: Sarah Morrison (Executive Director- LexHAB), Tara Mizrahi (LexHAB Board member), Jonathan Silverstein (LexHAB Board member and Attorney), Kathryn Roy (Chair, Affordable Housing Trust Study Committee), Gretchen Reisig (Vice Chair, Affordable Housing Trust Study Committee), Liz Rust (Regional Housing Services Office), Carolyn Kosnoff (Assistant Town Manager, Finance), Sandhya Beebee (Capital Expenditures Committee Liaison), Carol Kowalski (Assistant Town Manager for Development), Lisah Rhodes (Capital Expenditures Committee) Administrative Assistant: Christopher Tierney Ms. Fenollosa called the meeting to order at 4:05. LexHAB Transition to a 501(c)(3) Corporation: Sarah Morrison, the LexHAB executive director, presented the benefits of LexHAB converting from a quasi-municipal entity to a completely independent 501(c)(3) corporation. Ms. Morrison also explained the history of LexHAB, beginning in 1983, and its contribution to affordable housing in Lexington. Currently LexHAB is responsible for 78 units housing over 200 people. Throughout the presentation Ms. Morrison emphasized the increased flexibility in funding and in development that a 501(c)(3) would give LexHAB, especially given the post-2018 decision by Town Counsel that made LexHAB subject to public bidding rules. This current situation is currently untenable, especially given the rising costs in construction over the past few years. The Committee was shown that as of 2022 an affordable housing unit’s cost of construction was coming in at over $933,000 per unit. This is concerning, given that the cost of a structure only cost LexHAB $385,000 in 2017, the final year before LexHAB was subjected to public procurement requirements. Simply put, this model is unsustainable, especially in a town with a median home price of $1,600,000 and median household income among the highest in the state. Ms. Morrison also explained that as a result of tax-exempt status, LexHAB would have a far greater amount of flexibility in terms of individual donations and matching state funds. One of the most stable ways of funding a non - profit is donations from individuals. Ms. Morrison also explained that the conversion to a 501(c)(3) could also give LexHAB the potential to become a community development corporation, with the potential of unlocking associated funds from the Commonwealth and the Federal government, specifically the Community Investment Tax Credit Program (a company must be a 501(c)(3) non-profit to apply to this program). The Community Investment Tax credit is a great revenue stream, especially with tax refunds for the public: this program would allow