Affordable Housing Conference

AHF BadgeOn behalf of the Town of Culver, I attended the Affordable Housing Finance Summit in Chicago last month.  It was a three day event, running from Wednesday morning through Friday afternoon.  It consisted of a lot of interactive presentations as well as networking opportunities.  I have some experience dealing with HUD due to our Garden Court projects, but this was like taking a 200 level course when I really needed 101.  I do feel like I learned a lot, while it was painfully obvious that I have a lot more to learn.

The dream of “Affordable Housing”

Affordable Housing has long been a topic in Culver.  The issue has been further focused due to the completion of the Comprehensive Plan where affordable housing was addressed.  The recent tax abatement granted to Elkay where they pledged to add 100 new employees also makes housing a local priority.  This has also been a topic at several of the MCEDC Development for the Future meetings as other communities in Marshall County are recognizing the same need.  Overall, MCEDC is aware of current expansions that are projected to add 500-600 new jobs in the next 12-18 months.  Ginny Munroe, Culver Town Council President, asked me to be on a Task Force to address this issue for Culver.  When the advertisement for the Summit came up, I volunteered to attend on the Town’s behalf.

The summit was attended by a mixture of people representing both the public and private sides of the industry.  On the private side it was attended by Developers, Syndicators and Bank/Finance companies.  It wasn’t until the second day that I got a good explanation of what a syndicator is.  In this context, they act somewhat like a mutual fund bringing investors together to invest in affordable housing developements where they will share in the income from the project as well as the tax credits produced.  I think the others were fairly self explanatory.  The public side was represented by various granting and administrative agencies such as HUD.  While I learned quite a bit in the sessions, I probably learned as much in the networking events and made several connections that could help us moving forward.

From the discussions I’ve heard around town in various meetings, I think the first task for Culver is to define what we mean by “Affordable Housing”.  The summit mainly addressed multi-family options.  I’ve heard some in Culver speak disparagingly about that, stating various reasons such as wanting people with a more permanent commitment.  I’ve also heard numbers thrown out ranging from $75k to $250k as “affordable”.  $75k is probably not doable in stand-alone housing in our area, but on the other end, I question how affordable $250k is for new Elkay employees.  Check out a previous post on that here.

I had considered being the developer for an affordable housing project, but the networking at the summit made it abundantly clear that isn’t possible.  First the learning curve is too steep to jump into the process without experience and second, the funding organizations basically refuse to work with anyone without experience.  (Directly stated by the funding representatives there.)  That said, it sounded like it would not be too difficult to find a developer to partner with.  I was pretty discouraged at first since many of the developers indicated that any project under 48 units was too small to consider, but I did end up finding several that worked with smaller projects and said that it could be feasible.  (The larger companies said the smaller projects had margins too small to justify the risk.)  The other scenario that might be applicable is to make a scattered site application.  This would allow Culver to go in with another community, such as Plymouth or Bremen to have multiple site developments under one funding mechanism.  The coordination of that seemed unwieldy though.

One of the first things that would need to be done is to complete a market feasibility study that includes income surveys, etc. that tell the developer and the funding agency if the project is warranted.  Normally this is done by the developer.  Interestingly, I got several different takes on this.  My initial thought, backed up by some attendees, was that Culver could do this initial ground work to entice a developer.  Conversely, several developers and consultants I spoke to said that developers often want to tailor the study, so Culver doing this ahead of time would not be productive. The cost would increase based on the area being studied, so if we did do a partnership with another community, the cost of the study would increase geometrically.

All in all I think my attendance was worthwhile.  I learned enough to understand what would be required, though not nearly enough to talk intelligently on the subject.  I think I will have some interesting things to report to Culver’s Affordable House Task Force…  If we ever get around to having a meeting…


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