There have been two recent convenings of the Minnesota Housing board. The first was the regular board meeting for August. The second was a special conference call to consider public comments submitted in response to the draft of the 2013 Affordable Housing Plan (AHP). At the meeting, the board discussed the AHP, flood-related funding, rental assistance, and the Neighborhood Stabilization Program 3. On the call, the board took up public comments to the AHP, ranging from questions about selection of priorities to concern about NIMBYism.
August Board Meeting
The regular August board meeting for Minnesota Housing covered the special legislative session for flood-related funding, a presentation on the draft of 2013 Affordable Housing Plan, approval of rent assistance to low-income households, and some changes to use of Neighborhood Stabilization Program (NSP) 3 funds.
Commissioner Tingerthal briefed the board on the recent flood-related special legislative session. Minnesota Housing was awarded $12.7 million to help homeowners and landlords repair their properties, of which $12.2 million will go to the Quick Start Disaster Recovery program. The board approved expanding eligibility for Quick Start to 1-4 unit non-owner occupied rental properties. Included in the Agency's award is $250,000 for construction management assistance or to social service counselors to help people apply for disaster relief funds. An additional $250,000 will be distributed through the Family Homeless Prevention and Assistance Program. Tingerthal said that there were two Duluth apartment buildings on the verge of being declared unsafe. Tingerthal added that this was the first time FHPAP would be used as part of a response to a natural disaster. (In a separate item, Kate Bitney was introduced to the board as the new manager for FHPAP. Kate came to Minnesota Housing from HEARTH Connection).
Draft 2013 Affordable Housing Plan
The board heard an initial presentation on the draft 2013 Affordable Housing Plan. Commissioner Tingerthal characterized the AHP as the "business plan" for the Agency. The AHP outlines business initiatives for Minnesota Housing, not just a program budget document. The plan allocates $800 million in resources managed by the Agency.
Tingerthal pointed out to the board that the amount of "gap" (grant like) funds being allocated this year is $142 million, up 37% from the $104 million made available last year. Tingerthal said that the board will see a much longer list of projects recommended for funding at the Agency's annual award of consolidated-RFP funds in October, a dividend from passage of this year's bonding bill at the state legislature.
Of particular note are the AHP's allocations of federal HOME funds ($15 million) and the net earnings of the Agency ($23 million). The Agency has wide discretion over the use of these funds and, unlike the state appropriated funds, there is no other public forum for discussion of their use than Agency board deliberation over the AHP. While these resources are distributed over several programs, the largest single uses are to preserve viability of federally subsidized or state financed rental housing.
The Agency now plans to develop the AHP on an annual basis, rather than every two years on the cycle of the state's budget. Board members asked whether the Agency would undertake an extensive public participation process as was done for the current strategic plan and AHP. Tingerthal responded that there will be a series of meetings on the 2014 plan this coming Spring. However the process won't be as extensive as this year because the strategic plan will not need to be redone for several years. She added that she believed an $800 million spending plan deserved some public discussion.
The AHP will come back to the board for final adoption at the September meeting, and the board will have a special meeting to review public comments on September 5.
Approval of Rental Assistance
The board approved allocation of $11.5 million in rental assistance to benefit 1,484 low income households. Commissioner Tingerthal said that the average income of rent assistance recipients ($7,680) makes it the lowest income program run by the Agency. The staff report pointed out that a number of nonprofit applicants sought funds for fewer clients this year. This was due both to a shortage of funding for associated services, without which agencies cannot provide rental assistance, as well as to the fact that a number of clients are now being supported through the DHS Group Residential Housing Program.
Additional statistics about the program are: 80% of those helped were formerly long term homeless, 60% are families with children. The average duration of a family receiving rent assistance is 29 months; with about half of the exits of the program being positive. 45% of those positive exits have been transitions to Section 8 or other permanent rent subsidy programs.
Neighborhood Stabilization Program (NSP) 3 Changes
In other actions of note the board approved transferring NSP3 (federal foreclosure response) funds from Big Lake to Minneapolis and expanding the St. Paul target area for use of federal foreclosure funds. This will enable St. Paul to meet federal requirements for timely fund expenditure. In the annual award of housing counseling funds, $2.17 million this year, board members pointed out that the new recipients (African Economic Development Solutions, and Communidades Latinas Unidas en Servicio) would likely help the Agency serve new markets.
Special Board Call Reviews Public Comments on Draft Affordable Housing Plan
To review public comments and further discuss the draft 2013 Affordable Housing Plan (AHP), the Board held a special meeting via conference call on September 5. At this meeting Agency staff reviewed each of the six comments submitted on the Plan and provided responses. Comments were submitted by MHP, MCCD, Minnesota Community Land Trust Coalition, Mid-Minnesota Legal Aid, Habitat for Humanity of Minnesota, and Asian Pacific American Housing Corporation. [read more]
Support to delivery partners and Community Housing Development Organizations
The first comment reviewed asked the Agency to clarify the resource level being committed for Community Housing Development Organization (CHDO) operating support. Agency research director John Patterson stated that the Agency's technical assistance account would include $300,000 for CHDOs; this was similar to the amount awarded for this purpose in the current year.
The topic of Agency support for its delivery partners, noted in the plan, was further discussed. Staff said that they were very concerned about the loss of staff capacity of delivery partners across many program areas. Assistant Commissioner Mike Haley provided as example the single family rehab program. While the Agency's support has remained consistent for program administrators, these nonprofits were having a hard time retaining program staff because of federal and other funding cuts. Board member Gloria Bostrom said that she hoped that the Agency would also look at capacity of for-profit partners, such as lenders. Commissioner Tingerthal responded that she was concerned about the ability of small lenders to maintain involvement in Agency programs. Staff said that they were looking for ideas about how the Agency can be more supportive of its delivery partners.
Meeting local needs
Responding to a comment concerning how the Agency would implement its plan to respond to local market needs for rental housing, Commissioner Tingerthal said that in addition to reviewing RFP applications, the Agency's research would help identify unique rental markets, and that Minnesota Housing's Community Development Director would be meeting regularly with communities to assist in identifying needs that the Agency can help address.
Assisting extremely low income non-homeless households
In response to comments that the Agency do more to assist extremely low income households who are not homeless, staff said that their year-end assessments would be used to ensure that high level needs were being met, and that the reinvigorated Minnesota Interagency Council on Homelessness would focus on identifying initiatives to help those who are at risk of becoming homeless.
There was a request asking for clarity regarding how the Agency prioritizes among competing needs; for example, the AHP addresses the increasing importance of rental housing but also increases the percentage of the Agency's resources dedicated to homeownership. Commissioner Tingerthal responded that the final draft will be clearer regarding the Agency's priority setting. In the case of the homeownership allocation, that while the Agency will pursue new opportunities for financing home mortgages, rental funding was not being decreased. When allocating specific sources of funding among programs, Tingerthal said that the Agency looks at mission-fit, an interest in funding across a full spectrum of housing needs, and the capacity of the Agency's partners to use the funding.
Communicating the value of affordable housing
Regarding comments that encouraged the Agency to show more leadership in addressing NIMBY issues and communicating the value of affordable housing, Commissioner Tingerthal said that the Agency would be supportive if an organization or organizations within the affordable housing community were to begin such an initiative.
In their concluding remarks, board member Auditor Rebecca Otto agreed that the Agency should be a partner in communications campaigns, and member Stephanie Klinzing said that it was good to see the Agency look at providing additional support for its delivery partners.
The board is expected to act on the Affordable Housing Plan at its September 27 regular meeting.