Loading...
HomeMy WebLinkAbout2022-06-08-AHTSC-min 1 The Affordable Housing Trust Study Committee (ad hoc) Meeting Minutes of June 8, 2022 Affordable Housing Trust Study Committee members present for the public meeting: Kathryn Roy, Chair; Betsey Weiss, Gretchen Reisig, Jeri Foutter, Carol Marine, Tara Mizrahi, Linda Prosnitz Lexington Staff present for the public meeting: Carol Kowalski, Assistant Town Manager for Development; Kiruthika Ramakrishnan, Administrative Assistant. Non-voting liaison of the Select Board: Mark Sandeen Other Attendees: Elizabeth Rust RHSO. Ms. Roy conducted a roll call to ensure that all the members of the Affordable Housing Trust Study Committee (ad hoc) and members of staff present could hear and be heard. Ms. Roy chaired the meeting and called the meeting to order at 4:03 pm. The meeting was recorded by LexMedia for future on-demand viewing. 1. Approval of Minutes of Meeting held on 05.25.2022 The Affordable Housing Trust Study Committee reviewed the draft minutes of the meeting held on 05.25.2022. Ms. Weiss moved that the committee approve the minutes of the meeting held on 05.25.2022, as presented. Ms. Mizrahi seconded the motion. The Affordable Housing Trust Study Committee voted in favor of the motion. MOTION PASSED. 2. Review the details from CEC /CPC meeting Ms. Roy informed the committee that she would be sending a note to the members of the Capital Expenditure Committee and Community Preservation Committee appreciating their feedback and are working on their suggestions and will approach them in Fall. 3. Review of the terms of the Draft Declaration of Trust Ms. Roy asked Ms. Mizrahi’s thoughts on Debt as far as AHT was concerned. Ms. Mizrahi said that the Town needs to look into it. In the same way that LexHAB can borrow debt and is collateralized by the property, it seemed the AHT will have the ability to keep their right to take out debt. Ms. Mizrahi felt it was appropriate to have a real estate as a collateral, to borrow on a certain loan to value so that there will not be any missed opportunities. Ms. Rust shared some of her experiences with AHTs from other communities. Ms. Rust said that Trusts generally add a clause in the bylaw, 2 limiting the borrowing power of the Trust beyond a certain value of its assets and by requiring approvals to go beyond that value. Ms. Roy asked hypothetically if there was a property that the Trust wanted and that the asking price was 1.5M, can the Trust take out a loan in advance of purchasing the property and then use that to purchase it. Ms. Rust said that like any other property purchase, it would be required to record the mortgage during closing. Ms. Mizrahi agreed with Ms. Rust that the borrowing power should be limited to a certain percentage of loan to value. Ms. Foutter asked about the ownership of the property, whether it would be the Community Development Corporation (CDC) or LexHAB and explained that it would help for the owner of the property to apply for mortgage. Ms. Kowalski said that she, along with the Assistant Town Manager for Finance, will seek the help of Town Counsel to get some answers for the committee’s questions regarding borrowing. Also, she is requesting information from Shelly Gehring from Mass Housing Partnership on borrowing of their members. Ms. Prosnitz said that the ideal model when creating a Trust is to have the non-profit buy the property and do the mortgage; but there may also be circumstances where the Trust wants to hold the property temporarily till a developer is designated. Ms. Rust echoed Ms. Prosnitz’s thoughts and said that in the general model the Trust does not hold the property, but the Trust should have the power to do that if circumstances demand so. Ms. Kowalski suggested that the committee refer to the case studies in the Municipal Affordable Housing Trust handbook and use them to illustrate in a slide, it will be helpful for the members of this committee as well as other committees to get a better understanding. Ms. Foutter explained the complexity of Affordable Housing loans for developments and how the HDCs involved get loans from multiple institutions, including the state and private banks. Mr. Sandeen asked, given the circumstance, whether it is more likely for Housing Development Corporations (HDC) to secure a loan instead of the AHT. Ms. Foutter said that based on her experience, the CDCS and HDCs are the borrowers. Ms. Mizrahi agreed with Ms. Foutter and added that during the development phase, there will be multiple sources of funds. Ms. Mizrahi agreed with the idea of looking at examples to see how other Trusts have handled the borrowing. Ms. Marine agreed with Ms. Mizrahi. Mr. Sandeen suggested that for the presentation to the Select Board, to come up with a list of frequently asked questions, and answers to that, so that explanations will not be required in real time. Ms. Roy wanted to address Ms. Fenollosa’s (CPC Chair) concerns about ensuring that strict guidelines were followed. Ms. Rust said that there will be a requirement in the Trust bylaw, the Trust legislation, and the Trust declaration, that the CPA funds that were appropriated to the Trust would follow the CPA statute. Ms. Reisig suggested that reiterating that there have been more than a hundred communities that have AHT and have followed the guidelines when using CPA funds would help. 3 Ms. Rust reminded the committee about Ms. Fenollosa’s reluctance to approve CPC funds without a specific project. Ms. Prosnitz said that in Cambridge and in some other communities, they have pre- funding without any real projects, and it would be good to have some examples to give some assurance. Mr. Sandeen said he is also in favor of prefunding and added that Lexington is in a unique situation where ARPA funding is potentially available for affordable housing prefunding. Ms. Rust informed the committee that Bedford, Concord, and Sudbury had prefunding last year. The committee discussed about the amount of funding required. Mr. Sandeen suggested looking at town with successful AHTs to come up with the amount of pre-funding. 4. Upcoming Meetings The Committee briefly discussed about upcoming meetings and decided to hold their next meeting on Wednesday June22nd at 4 p.m. Adjourn Ms. Marine moved that The Affordable Housing Trust Study Committee adjourn the meeting held on June 8, 2022. The Affordable Housing Trust Study Committee voted in favor of the motion 7-0-0 Roll Call Vote: MOTION PASSED UNANIMOUSLY. Meeting adjourned at 5:01 pm.