Committee Report CR-1
The Housing Committee held a public meeting on October 7, 2004 beginning at 4:30 P. M. in the Ackermann Room for the purpose of continuing discussion on the condition of the state-owned units of the Cambridge Housing Authority with the view of establishing a subcommittee to further explore possible solutions.
Present at the hearing were Councillor Anthony D. Galluccio, Chair of the Committee, Councillor David P. Maher, and City Clerk D. Margaret Drury. Also present were Beth Rubenstein, Assistant City Manager for Community Development, Gregory Russ, Executive Director of the Cambridge Housing Authority, (CHA), Christopher Cotter, Director of Housing, Community Development Department, CDD, Cassie Arnaud, Housing Planner, CDD, Terry Dumas, CHA, Jack Geary, CHA, Gloria Leipzig, CHA, Michael Johnston, CHA, William Pippins, Member of the Community Preservation Committee, Kathy Podgers, resident of Pearl Street, Cambridge, MA.
Councillor Galluccio convened the meeting and explained the purpose. He welcomed Gregory Russ, the newly appointed executive director of the Cambridge Housing Authority, to his first meeting of the Housing Committee, and invited him to speak. Mr. Russ stated that on Monday he and Gloria Leipzing toured the state-owned units. From the CHA perspective they are under funded both for operating and capital expenses. For the third year in a row the operating expenses have been held at zero percent increase. This is a stark contrast to the federally owned units. He distributed fact sheets and briefly described the information therein
Councillor Galluccio asked about Woodrow Wilson Court. Ms. Dumas said that Woodrow Wilson Court is currently undergoing construction, but some important aspects have not been funded by the state. The funding came out of bond bills in 1994 and 1998. The CHA submitted requests for rehab for all of the buildings, fifteen separate funding requests.
Councillor Maher asked how long is the wait for rehab funds from the state. Ms. Dumas responded that the wait has been stretched out to seven or even ten years. There is no predictability as to when there will be another funding round. In the last funding round, the projected statewide need was $650 million; the Legislature passed $300 million. However, the state’s bond cap lowers the actual amount available even more.
Ms. Dumas stated that the CHA has submitted a proposal for Lincoln Way and Jackson Gardens. The proposal requests permission to use the federal operating subsidies originally allocated for units at the JFK and Washington Elms projects that were eliminated in the rehabilitation and density reduction.
Mr. Russ said that the CHA believes that to do this ownership would need to change from state to federal. Councillor Maher asked whether the State is reluctant. Ms. Dumas said that the CHA does not yet know; but they are hoping not.
Councillor Maher asked if HUD is reluctant and Ms. Dumas said that the CHA does not know this yet either. She said that the leftover operating subsidy would be enough total subsidy to fund all but approximately 12 of the 106 at Lincoln Way and Jackson Gardens.
Councillor Galluccio asked why would the federal government want to take on units in such disrepair. Mr. Russ said he expects that part of the deal would be that the CHA would have to come up with the funding for the needed renovations. He noted that federal subsidies could be attached to tax credit projects, so there would be the possibility of tax credit funding for the rehab.
Councillor Galluccio stated this would still leave the other state units. Ms. Dumas said that if 93 out of 106 units at Lincoln Way and Jackson Gardens could be rehabilitated, along with the planned rehab for the Woodrow Wilson Court, that would be significant progress.
Councillor Galluccio observed that the CHA would then be left with finding capital funds for Jefferson Park and finding a way for the CHA to deal with the revenue shortfall in state funding. He stated that ultimately if no more State funds are forthcoming the CHA will probably need to increase its revenue stream by adding some higher income units. Ms. Dumas said that the State Department of Housing and Community Development (DHCD) is doing this in Somerville at the Mystic Project. There is a skew of 20 percent of the units to use the money for debt service repayment.
Councillor Galluccio asked whether, with Cambridge in a better situation, the CHA could renovate, using tax credits funding and then increase the allowable income for some tenants to pay for the operating costs. Ms. Dumas said that the problem is that tax credits can only be used for renovations for units that will go to tenants with incomes of no greater than 60 percent of median income. Councillor Galluccio asked whether the rehab project could use tax credits for rehab of the units to be occupied by tenants with incomes up to 60 percent of median plus Community Preservation Act funds for renovations of the units to be occupied by tenants with incomes of 60-80 percent of median income. Ms. Dumas said yes they could but the amounts needed are huge.
Councillor Galluccio noted that these units are at the point where the conditions are such that the CHA cannot get the rents they are asking. He emphasized the importance of getting the stakeholders to visit and observe how bad the conditions are.
Mr. Russ said that the State wants to raise the tenants’ contribution to 35 percent of their income. He said that they are starting to have some prospective tenants decline the units. The CHA’s concern is that unless the CHA acts now, the units will have to be held off line. He added that they would like to make the capital outlays a one-time expense. The numbers have to work and the community has to buy in.
Ms. Dumas said that the CHA would really like to have a social mix in population incomes from 0 to 80 percent. Mr. Russ said that it is not clear that the State is going to solve its operation short fall. Ms. Dumas said that even 30 percent of the units going to tenants with incomes of 80 percent of median would not solve the problem. She said that part of the solution could have been with the Moving to Work agreements but that program expires in March 2006. They need to look at what options offer the best value and fewest trade offs.
Councillor Galluccio stated that part of what is needed is to get the stakeholders together, the City, the CHA, the CPA Committee and the Affordable Housing Trust. He said that these units belong to Cambridge just as much as any others. He asked whom the CHA would see as part of a subcommittee.
Mr. Russ said that he would think that CHA, City staff and resident representatives should be included. If there are other groups that might have funding, then invite them to come up with planning options as well. He noted that in the project that ultimately changed units at Roosevelt Towers from State to Federal operation funding, the State provided $4.5 million of capital funds.
Councillor Galluccio asked if the strategy is to keep on the planned track with Lincoln and Jackson and to try to deal with all of the State units at once. Mr. Russ responded that he does not like all the eggs in one basket. He added that the CHA could look at it as a phased project.
Ms. Rubenstein said that there should be someone from the Affordable Housing Trust (AHT) involved. Historically, AHT money has been seen as funding for new housing. The position here is that it is also important to keep the affordable units Cambridge already has in service.
Councillor Galluccio stated that he would like to invite members of Community Preservation Committee and the AHT to walk through the units.
Kathy Podgers, Pearl Street, asked if all the units are handicapped accessible and whether there is grant money that would help pay for this. Ms. Dumas stated that the CHA is required to make all new construction and substantial rehab projects handicapped accessible. Mr. Russ added that no extra money is available in his experience.
Ms. Dumas stated that the CHA has a lot of handicapped units, and under the applicable regulations, these units have to be occupied by persons with physical disabilities and so they often end up going to tenants who are not Cambridge residents.
Councillor Galluccio stated that the City Manager should also think about having university representation in the subcommittee.