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HomeMy WebLinkAbout2022-08-10-AHTSC-minThe Affordable Housing Trust Study Committee (ad hoc) Meeting Minutes of August 10, 2022 Affordable Housing Trust Study Committee members present for the public meeting: Kathryn Roy, Chair; Betsey Weiss, Jeri Foutter, Gretchen Reisig, 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: Sarah Morrison 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 4:00 pm. The meeting was recorded by LexMedia for future on-demand viewing. 1. Approval of Minutes The Affordable Housing Trust Study Committee reviewed the draft minutes of meetings held on 06.08.22, 06.22.22, 07.13.22, 07.27.22 and the Joint Meeting with Capital Expenditures Committee (CEC) and Community Preservation Committee (CPC). Ms. Weiss moved that the committee approve the minutes of the meetings held on 06.08.22, 06.22.22, 07.13.22, 07.27.22, and the Joint meeting with CEC and CPC, as presented. Ms. Reisig seconded the motion. The Affordable Housing Trust Study Committee voted in favor of the motion. MOTION PASSED. 2. LexHAB presentation by Sarah Morrison Ms. Morrison introduced herself and gave a brief history of how LexHAB was founded in 1983 and its working structure and their current inventory. The strategic planning by LexHAB’s Board of Directors this year concluded that LexHAB should transition from its present form to an independent 501(c)(3) organization. Ms. Morrison wanted to analyze and evaluate the costs and opportunities and the benefits and risks of creating a non-profit, non-governmental Housing Development Corporation (HDC) or Community Development Corporation (CDC) and how it would impact the housing production. Ms. Morrison explained how as a 501(c)(3) organization, LexHAB could produce affordable housing more quickly, efficiently and economically than the current production. Ms. Morrison explained how with the collaborations with the Minuteman High School, LexHAB had done all developments privately in the past. When LexHAB developed 4 housing units at Fairview in 2017, it cost $385k/unit but LexHAB learned that it would have to start following public bidding laws. The subsequent development of 6 housing units at Farm View in 2020 cost $567k/unit even with using modular construction and donated land. This year, adhering public bidding laws, the cost for 6 housing units at Vine Street was estimated to be $5.6M or $933k / unit. That is not sustainable for affordable housing. Without public bidding law, the estimator suggested LexHAB could save $400k which would bring the cost down to $867k/housing unit. They couldn’t get real numbers until they go out to bid. The COVID price increases also increased costs. LexHAB expects to save 10% - 30% / project. Ms. Morrison explained that as a 501(c)(3) organization, LexHAB would not have to adhere to public bidding laws and so the cost of development would be reduced significantly. Ms. Morrison said producing Affordable Housing in an efficient and a cost-effective manner was the primary goal. In addition, Ms. Morrison said that as a 501(c)(3) organization, LexHAB would have more robust funding opportunities on a variety of fronts, being able to solicit donations and state and federal funds. As part of the Town, LexHAB couldn’t guarantee tax deductions. Ms. Morrison went over the Cost-Benefit Analysis of LexHAB and explained that as a 501(c)(3), LexHAB would have to pay more for property insurance – a cost of between $500 - $1000/unit/year ($39k - $78k), and also would have to acquire Director and Officer’s insurances – roughly $2k - $3k/year. LexHAB pays $12k for property insurance as part of the town. But the 501(c)(3) status would allow partnering with developers at costs that would decrease by 10 - 30%. If LexHAB became independent of the town and applied to be a Community Housing Development Organization (CHDO) they would be eligible for CITC tax credits which would allow donors to get half their donation back as a Massachusetts tax deduction. Ms. Foutter reported that the maximum a qualified CDC or HDC could receive in CITC tax credits this year would be $250k and that a CHDO needs 30% of the board to be residents of low-to moderate income housing. Ms. Kowalski said there was a considerable amount of paperwork involved in a CHDO. Ms. Morrison shared the recommended path to 501(c)(3) and the proposed timeline. Ms. Morrison said that the first step is to redraft the Special Act that created LexHAB, followed by a meeting with the Select Board members. They would put forth the presentation to the Select Board for approval of the redraft and the home rule petition. The next step would be to advocate for warrant article in Special Fall Town Meeting and file the Home Rule Petition in State Legislature by 3rd week of January 2023 to be considered a timely file and put them at the start of the line for home rule petitions. It could take 2 years to get approval of the home rule petition. Ms. Morrison went over the steps to become an HDC or CDC, the first step being to become a 501(c)(3) and thereafter consider the benefits of HDC and CDC. The next step would be to assess criteria for each and apply to Housing and Community Development (DHCD) for certification. Ms. Morrison shared a comparison of different pathways followed by Lexington and Arlington to meet their Affordable Housing needs and explained both paths in detail. Ms. Morrison said that the intent of the Special Act is to separate LexHAB from the town, though the mission remains the same. And as per the preliminary draft, the plan is to transfer ownership of the current units to LexHAB nonprofit organization and if LexHAB dissolves, the properties will revert to the Town or another affordable housing organization. LexHAB’s organizational structure will remain the same and exempt LexHAB form public bidding requirements and maintain connections to the Town for reporting. Ms. Morrison contrasted LexHAB with Arlington’s CDC. Arlington has 4 full-time, 1 part time staff and uses a professional management company, and manages 150 units, including 2 in the last year that added 75 units. They have 2 social workers. LexHAB doesn’t have a professional management company, they have a part time person. There are more opportunities for multi-family housing in Arlington. Ms. Morrison spoke about the 28 units not on SHI. LexHAB has not had good utilization of its 4 town employee properties. Ms. Weiss said local preference helps accommodate citizens who hit hard times. Ms. Kowalski will recommend Ms. Rust of the RHSO investigate local preference and the town’s interests. 3. Review Bylaw, Frequently Asked Questions, and associated documents Ms. Roy shared a draft of the Affordable Housing Trust Bylaw with the committee. Ms. Kowalski gave her recommendations to the committee so the bylaw need not be revised every time the market changes. She suggested basing the spending threshold (beyond which Select Board approval would be required) on the median price of a house sold the prior year. The committee discussed the number of Trustees that the Trust can have. The committee agreed that it should be worded in such a way that there are not many legal restrictions. The committee also discussed the definition of low and moderate income households. The committee also agreed that two of the trustees should be resident tenants of the town. Mr. Pressman recounted the Workforce Housing program set up by Governor Baker with $100M in 2016 for workforce housing that funds developments up to $100,000/housing unit where units cost 120% of AMI or lower and where 20% of the units were for 80% AMI or lower. Mr. Sandeen suggested removing the statements that say “trustees shall not receive a salary” to leave open the option for the board to decide. Ms. Roy next shared the document that listed the items over which the Town Meeting and Select Board could have control over the Affordable Housing Trust. Ms. Roy also shared the draft Frequently Asked Questions prepared by the committee to address questions raised by the Select Board, CEC, and CPC. Discussion ensued. Adjourn Ms. Weiss moved that The Affordable Housing Trust Study Committee adjourn the meeting held on August 10, 2022. Ms. Reisig seconded the motion. The Affordable Housing Trust Study Committee voted in favor of the motion 5-0-0 Roll Call Vote: MOTION PASSED UNANIMOUSLY. Meeting adjourned at 5:58 pm.