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HomeMy WebLinkAbout2021-05-17 Joint SB, PB, HPB, AC and CEC-min JOINT MEETING Select Board, Planning Board, Lexington Housing Assistance Board, Housing Partnership Board, Appropriation Committee and Capital Expenditures Committee May 17, 2021 A remote participation Joint meeting of the Lexington Select Board Planning Board, Lexington Housing Assistance Board, Housing Partnership Board, Appropriation Committee and Capital Expenditures Committee was called to order at 7:02 PM. on Monday, May 17, 2021 via Zoom meeting services. Present at the meeting: Select Board(SB) Chair Ms. Hai; Vice Chair Mr. Lucente; and members Mr.Pato; Ms. Barry; and Mr. Sandeen were present, as well as Mr. Malloy, Town Manager; Ms. Axtell, Deputy Town Manager; Ms. Katzenback, Executive Clerk; and Michael Gibbons, Recording Secretary. Planning Board(PB): Mr.Peters; Ms. Thompson; Mr. Creech. Lexington Housing Partnership Board(HPB): Ms. Foutter; Ms. Weiss; Ms. Haskell, Ms. Thompson; Ms. Walker; and Ms. Cole. Lexington Housing Assistance Board(LexHAB): Mr.Burbidge; Mr. Liu; Ms. Wood; Mr. Howell; Mr. Kennedy. Appropriation Committee (AC): Mr.Parker; Ms. Muckenhoupt; Mr. Michelson; Mr. Ahuja; Mr. Levine; Mr.Padaki; Ms. Yan; Mr. Berenstein. Capital Expenditures Committee (CEC): Mr. Lamb; Ms. Beebe; Mr. Cole; Mr. Smith; Mr. Kanter, Ms. Manz. Also present: Carol Kowalski, Assistant Town Manager for Development; Amanda Loomis, Town Planner; Marilyn Fenollosa, Chair of the Lexington Community Preservation Committee (CPC);Pam Hallett, Executive Director of the Lexington of the Housing Corporation of Arlington; Liz Rust, Regional Housing Services Office (RHSO); Austin Anderson, Anderson Kreiger LLP/Town Counsel; Christine Foley, Executive Director of Lexington Housing Authority. Ms. Hai stated that the meeting was being held in accordance with Governor Baker's March 12, 2020 Executive Order suspending certain provisions of the Open Meeting Law to allow remote participation during Massachusetts' state of emergency due to the outbreak of Covid-19. Ms. Hai provided directions to members of the public, watching or listening via the Zoom application, regarding the procedure for making a public comment. Ms. Hai reminded Board members, staff, and members of the public about Lexington's Standard of Conduct regarding civil discourse during Town Government meetings. ITEMS FOR INDIVIDUAL CONSIDERATION 1. Discuss Alternative Affordable Housing Funding and Operation Models The purpose of the Joint Meeting was to hear a presentation about two alternative operational tools for affordable housing: municipal affordable housing trusts and housing development corporations—and to collectively discuss forming a subcommittee/working group which would develop a recommendation for review by the attending boards and committees. Such a working group could include representatives from LexHAB, the Community Preservation Committee, the Regional Housing Services Office, Town Counsel, and others. Ms. Kowalski, Ms. Rust, and Ms. Hallet presented the information to be considered. Ms. Kowalski suggested that adopting both afore mentioned tools in tandem would provide oversight plus flexibility and also transition the brunt of responsibility from LexHAB to a newly-created affordable housing entity. Affordable Housing Trust: Ms. Kowalski described affordable housing trusts as akin to managed bank accounts in that they can receive Community Preservation funds with Town Meeting approval and also receive linkage fees, transfer tax fees, gifts, and grants. They are municipal bodies adopted by a simple majority vote of Town Meeting. Lexington's, if created, would be operated by the Town's Finance Department. Select Board approval could be required for the real estate transactions the affordable housing trust undertakes. State Legislation requires a Select Board member to serve on the Board of Trustees. It is also required for Select Boards to appoint the trustees of affordable housing trusts. Affordable housing trusts can provide financial support for affordable homes being constructed by developers in collaboration with the Town and trusts can also rehabilitate existing homes. A trust provides liquidity to act quickly as opportunities arise. It can also develop surplus municipal property; preserve properties that are facing expiration of their affordability; and create programs to assist first time low- and moderate-income homebuyers. However, Ms. Kowalski said, on its own, a trust is not ideal for developing houses because, like any other Town department, a housing trust is subject to all laws,including and especially the 30B Procurement Law. Housing Development Corporation: A housing development corporation, Ms. Kowalski said, is a better tool for developing affordable housing. Depending on how much control a Town wants, it can determine whether to have some or none of the costs and it can avoid delays that currently hinder LexHab. It can also be a 501(c)(3) tax exempt corporation. There is no formal oversight of a housing corporation by the Select Board but the corporation does partner with the Town and it engages with the public regularly. Additionally, Town Meeting could still approve funding for major projects while smaller projects could proceed through the corporation without needing to wait for Town Meeting approval. If, as suggested,both tools are adopted, the process would be to approve an affordable housing trust by simple majority of Town Meeting through review and approval of a bylaw. In parallel, the Select Board would appoint a board of trustees. The Town would simultaneously develop articles of incorporation for a housing development corporation, establish a board of directors, and then transition LexHab to the Housing Development Corporation. Ms. Hallet, Housing Corporation of Arlington(HCA), related the history and trajectory of the HCA, noting that as time has gone on, the organization has changed its focus and strategies to increase the number of units it can develop and create. Ms. Hallet enumerated the many layers of funding sources that can be tapped to contribute to affordable housing development. Ms. Hallet reported that the Housing Corporation of Arlington is a totally independent organization, a separately incorporated 501(c)(3). It has its own board of directors who meet monthly to organize, set policy, and determine where the organization is going. The HCA works very closely with the Town especially with the Planning Department; the Redevelopment Board; the Zoning Board of Appeals; and the Select Board,particularly when Community Development Block Grants (CDBGs) are part of a project's funding portfolio. Three thousand Arlington residents are HCA members. They support the organization and generously donate funds. When annual meetings are held, over 100 people attend. Members elect the Board of Trustees. There is also a social services arm that works closely with Town social service agencies. Ms. Hallet said she believes the blended model being proposed tonight is similar to the Housing Corporation of Arlington and would make it much easier for Lexington to design and create more affordable housing. Mr. Liu(LexHab) asked how many board members the HCA has, how long their terms last, and what roles board members play. Ms. Hallet replied that there are ten board members with terms that range from nine to fifteen years. Members come from a variety of backgrounds: architects, attorneys, non-profit staff people, and interested community members. Executive Board officers run meetings, keep an eye on finances, take meeting minutes, and authorize loan documents, among other duties. There is also a paid staff of four. Mr.Peters (PB) asked if the HCA had considered purchasing deed restrictions. Ms. Hallet reported that the idea had come up with regard to condominiums but the idea was ultimately rejected because the HCA would not have a large enough voice on any condominium governance board. Mr.Peters (PB) said it seems that transitioning LexHAB to another entity would require a lengthy process. Mr. Kanter(CEC) said that while he endorses the idea of forming a subcommittee to look into this issue, he does not like the idea of a working group because it would not have public oversight vis-a-vis Open Meeting Laws. For that reason, he prefers the formation of an ad hoc or standing committee instead. Mr. Kanter thinks that Lexington might not have the same results as Arlington in terms of housing creation because they are geographically dissimilar. He has no objection to the formation of a trust or to making funds more available than they are through the current Affordable Housing Stabilization Fund but he feels the autonomy that a housing corporation would have is a big philosophical switch for Lexington. He recommends looking into what is being proposed but not expecting identical success or forming an identical organizational/oversight structure. Ms. Hallet clarified that all funding for HCA from CPA, CDBG etc. flows under Town Meeting oversight. Melinda Walker(HPB) asked for more detail about what a CDBG is; how funding from multiple sources is cobbled together; and how long that process takes. She believes it is important for people to understand that the process is complicated. Ms. Hallet explained that Community Development Block Grant funding comes to Arlington and to other municipalities through a complex State-devised formula.Using a specific project to illustrate, Ms. Hallet said Arlington has about 15 different funding sources that provided a budget of$24M, of which$16M is for construction costs. The funding sources in this case include CDGB, local lenders such as Leader Bank, Brookline Bank, TD Bank, PCI Loan Fund(insurance company consortium funding established to make up for redlining practices), HOME funds (federal grant), CPA, Enterprise Communities, and the Massachusetts Department of Housing and Community Development(DHCD), which is a source of low- income housing tax credits and access to secondary mortgages. Ms. Foutter(HPB) asked Ms. Hallet to explain about becoming a certified Community Development Corporation(CDC) and the complexity of the application process for low-income tax credits through the DHCD. Ms. Hallet said there is a significant checklist to be followed for becoming a CDC which takes about 3 months to complete. Once certified, a Town gains access to the Community Investment Tax Credit program. Ms. Hallet said that the CDC has provided Arlington with an access to an increasing amount of funding over the years,including from local banks. Mr.Padaki(AC) asked Ms. Hallet if members of Arlington's Select Board sat on the HCA board and if the HCA budget includes funds for legal support. Ms. Hallet answered both questions in the negative. Mr.Padaki(AC) asked who would have oversight of a housing corporation. Ms. Kowalski said the Housing Corporation would have to follow the Town's zoning bylaws, including the potential for a Special Permit or a Comprehensive Permit for a friendly 40B which is a collaborative effort between a town and a developer. Mr.Padaki(AC) asked if the Community Preservation funding that goes into the trust can be appropriated or if it goes only one way, into the trust and not back out again. Ms. Kowalski, Ms. Fenollosa, and Ms. Rust clarified that the CPA funds go through Town Meeting, like any other appropriation, and then into the project, which in this case is the funding of the trust. Rescinding of the funds by Town Meeting that are appropriated to the trust is theoretically possible,but cumbersome. Ms. Manz (CEC) asked Ms. Hallet how the HCA was able to fund its start-up costs. Ms. Hallet said that at the beginning, the HCA had a volunteer Executive Director, then a paid part-time Director who was funded through donations. A fundraising appeal still goes out every year; the money goes into Arlington's Homelessness Prevention Fund. Typically, $30,000 to $50,000 is raised annually. Funds are used to help people who are behind in rent or to move those in unstable living situations into more secure arrangements. Ms. Manz (CEC) asked what happens when a project runs up against a small but irreducible amount of opposition. Ms. Hallet said in that case, when the project enjoys the support of the Select Board, Planning Board, ZBA, Town Manager, Arlington Redevelopment Board, and Town Meeting, the project goes forward despite intransigent opposition. She reported that over time, trust has been built between the HCA, the Town, and residents so opposition has become less of a knee-jerk response to any/all proposed affordable housing development. Town Meeting approval is required, a process which requires outreach and education. Mr. Sandeen(SB) asked how much of the funding for a project comes from local sources and how much from outside sources. Ms. Hallet said a very small percentage of funds is local. Mr. Sandeen(SB) asked what benefits besides financial there are to forming a CDC. Ms. Hallet said that the independence and separation from the municipality provides outside funders with a sense that you are not overly reliant on Town appropriations or too inflexible. During the pandemic, community contributions tripled to the Homelessness Prevention Fund. Also, outside funders rarely give to a Town government but they do give to a 501 c 3. Town Counsel Anderson added that non-Town entities are also not subject to procurement laws. Mr. Burbidge (LexHAB) noted that Ms. Kowalski had stated previously that procurement rules might or might not apply, depending on the funding source in question. Ms. Kowalski confirmed this was the case, adding that some funding might come with terms and conditions that would made adherence to procurement laws obligatory. Mr. Burbidge (LexHAB) asked if a potential donor could earmark funds for LexHab or any other entity. Ms. Rust said that property can be left to specific entities but each situation comes with its own set of particulars. Mr. Michelson(AC) asked if Arlington has an affordable housing trust. Ms. Hallet said that Town Meeting set up such a trust just last year and passed a transfer fee.Neither has officially been established yet so there is no track record to able to draw any conclusions. However, Arlington has been able to access funding via the State's Affordable Housing Trust/Mass Housing/DHCD for second and third mortgages and soft costs. Unit costs on recent projects range between $350,000 and$500,000, which was deemed far less than Lexington's recent per unit cost. Mr. Michelson(AC) asked how maintenance and upkeep costs are covered. Ms. Hallet said, in addition to the rents collected, Arlington has given the HCA its CDBG funds (about$150,000-$200,000/year)which supports the capital improvements program for new roofs, kitchen updates, new heating systems, insulation, etc. Ms. Fenollosa(CPC) asked how the constraints of CPA funding are handled if the money goes into a corporation that is separated from the Town. Ms. Hallet said,regarding CPA funds, the HCA signs a very clear document that stipulates how the CPA money can be used. The document also makes clear that if funds are not used in the agreed-upon way, they can be called back. CPA funds also are not automatically sought for appropriation; they are transferred through a project-by-project requisition process. Once committed documents and grants are signed, CPA funds can be applied for. Mr. Anderson, Town Counsel, clarified that the trust would be the recipient of the CPA funds, not the corporation. The trust would then disperse the funding to the corporation for specific purposes. Ms. Rust confirmed that the trust is obligated to follow all CPA rules. The Town could be libel to legal action if CPA funds were improperly used,but the likelihood of that occurring is minimal since the Town would have oversight of the trust. Mr. Kennedy(LexHAB) asked how operating expenses are funded and if rental income covers all operating costs. Mr. Hallet said she fundraises for operating expenses for property management, which the corporation pays. She separately raises operational expenses. Ms. Foutter(HPB)read a statement from absent HPB member Bob Pressman which expressed support for the creation of a trust because it is more nimble and able to act quickly on the occasion that properties of interest become available. The Select Board determined that it had enough information to discuss the formation of subcommittee/working group at a later date. ACTION ITEMS: The Board will discuss establishing a subcommittee or working group to discuss the pros and cons of the information and deliver a recommendation. DOCUMENTS: Overview of Affordable Housing Trusts and Development Corporations; Alternative Affordable Housing Funding and Operation Models ADJOURN Upon a motion duly made and seconded, the Select Board voted 5-0 by roll call to adjourn the meeting at 9:00 p.m. All assembled boards and committees likewise adjourned. A true record; Attest: Kim Siebert, Recording Secretary