That frees up the site to be marketed for development without the limitation of having to provide housing to impoverished residents, many with serious mental health problems. If the site is sold for more than the 3.5 million in existing debt, will the profit be used for supportive housing or something else?

I don’t see a majority on council with a strong commitment to finding money for housing or supportive services When Rose Martin came to council about a year ago to ask for help with the burden of helping parolees adjust to life on the outside, she got silence. The city could have helped by shifting some of the $1 million in annual costs to mow the parks to the company Rose founded to give people jobs and jobs training. A million dollars a year would help a lot of people learn job skills and pay for their own housing.

Amy was kind enough to elaborate more on the AMI issue, and give us some insight into the perspective of the Office of Community Development staff (OCD staff). Remember that whether we have two boards or one, their expertise is necessary to insure that our housing projects are viable and, hopefully, successful. -Margie

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From: Amy Klinke [mailto:klinkea@ewashtenaw.org]
Sent: Monday, January 22, 2007 3:07 PM
To: Teall, Margie
Subject: more back ground

Hi Margie,

I just to follow up on some of your emails regarding the HHSAB and how OCD staff and how our boards look at income levels. These issues were not specifically asked in the caucus questions, so I thought I would give you a bit more background.

I think it is important to note that the reality of life in the economic times we live in is that there are truly needy people in crisis situations who have household incomes over 30% AMI. People need help before they become homeless. If our community waits until someone is homeless to help them, then we are doing a disservice to these individuals and our community. Once someone is homeless, it is much more difficult to stabilize and recover, particularly for people who end up losing their jobs. Please note that homelessness has an especially high impact for children as it often means that they are taken out of school and sometimes away from their families.

In addition, when we talk about affordable housing and making large housing projects have units who serve all 30% AMI and below, history has shown that by congregating low income housing in areas that it creates pockets of poverty. It is now best practice to have a variety of incomes in a large housing project.

It is also important to note that there is a difference between targeting and serving. Most of our non-profits tell us they are targeting 30% AMI and below, however, the incomes of the actual tenants can be and are over 30% AMI.

The forthcoming Affordable Housing Needs Assessment is a tool to get an understanding on what the needs are for households between 0% AMI and 120% AMI. The only reason the Needs Assessment covers households between 80% AMI and 120% AMI is because the Needs Assessment is for the entire City and County and the Mayor and Council have had numerous discussions about workforce housing in the downtown. Workforce housing is generally defined as 80% AMI to 120% AMI. If the City wants to address and attract these households in the downtown, then we need to gather information and make informed policy decisions, whether those recommendations are made by the HHSAB, Office of Community Development, Planning and Development Services Unit or the DDA.

Through the OCD monitoring of our housing projects, we have discovered that the majority of our housing projects were operating with a deficit 4 years ago. Many of the City nonprofit housing projects were not generating enough income to maintain their units. They required additional annual City CDBG funds to maintain and rehabilitate their units. OCD staff, namely Jennifer Hall, has worked to turn these projects around to operate in the black. Ms. Hall has implemented the following changes in the past 4 years:

Refinancing eligible projects.
Converted all of the City’s loans to 0% interest, deferred payment loans. The City was collecting monthly payments from non-profits and then giving them operating subsidies. This allows non-profits to use revenues for operations.
In exchange contracts are now 99-year contracts and the City shares the equity in the project. This protects the City’s investment and discourages non-profits from selling off property for the equity, when they are in a financial crisis.
Fully funding projects at inception, including full rehabilitation. The City’s portfolio is primarily small, scattered site housing that initially lacked insulation, modern plumbing, electrical, and HVAC systems. Our Rehabilitation Specialist works closely with the non-profits to ensure that the units are up to code, energy efficient, and structurally sound.
Reducing the PILOT from 10% of sheltered rents to $1/unit/year. Again, the City was collecting PILOT’s from non-profits and then providing operating subsidies.
Providing pre-development loans and mini-grants to increase non-profit housing capacity.
Supporting Local Initiatives Support Corporation (LISC) to provide technical assistance, grants, loans, and assessments of non-profit housing providers.
Promoting energy efficiency in all projects to reduce the long-term costs associated with utility bills.
Promoting the use of green and durable products to alleviate health problems and reduce ongoing maintenance costs.
Monthly meetings with MSHDA, LISC and the County to coordinate funding and technical assistance to non-profits.
Complete revision of all legal documents with Kevin McDonald to ensure compliance with HUD regulations and protect the City.

These initiatives were undertaken because OCD understands the need to be creative to support not just households with incomes under 30% AMI but households that are homeless and have other special needs. This population cannot pay the rents sufficient to cover housing expenses so their rents must be reduced. To reduce rents in housing projects, the subsidies need to be increased. In addition, non-profit management capacity must be sufficient to manage the properties if the City is going to continue to prioritize housing this population. The other option is to include extremely low income households in mixed income projects where higher income rents subsidize the lower income household rents. These steps should enable the City to continue with the priority to serve 30% AMI and below. We expect over 90% of our portfolio to be operating in the black by the end of 2007.

Margie, I hope this helps answers some of your concerns. Please call me – 355 1017 if you have further questions.

Thanks,

Amy

Amy L. Klinke

Director

Office of Community Development

City of Ann Arbor/Washtenaw County

110 N. Fourth, Suite 300

P.O. Box 8645

Ann Arbor, MI 48107

Phone: (734) 622-9005

Fax: (734) 622-9025

I want to tell you my specific objections to the present plan to combine these two committees. In the document “Proposed Ann Arbor Housing and Human Services Advisory Board”, under Community Development Staff Role, #3 “implement the annual work plan and provide periodic progress reports to the advisory commission” takes the public participation in the decision-making about the policies out of the hands of the public.

We all know that making policy is far easier than implementing it, in the arena of housing and human services. The devil is in the details, as each project and each funding decision does not fit neatly into our carefully developed policies. Housing projects come to us from many sources, each one melding together the organization’s capacity and funding resources and community opportunities. These days that requires great ingenuity and flexibility as funding ebbs and flows and HUD and MSHDA vary their regulations and funding priorities. No policy can be so clearly articulated and comprehensive as to require no discrimination and weighing by the decision-making body. All decision-making, even according to a stated policy, is inherently subjective and for greatest accountability needs to be done by a public body. That finely-tuned decision-making is not the purview of staff; it is the responsibility of the public body. As a community, it is vital to have the greatest public participation, advocacy and ownership of the decisions on spending large amounts of money to create housing and to provide services to our residents.

Previous proposals made public participation, as subcommittees of the combined board, much clearer and allayed some of my fears that the actual decision-making on important issues was going to be done by staff alone. This new proposal has eliminated all of that public involvement in the tough work of assessing projects and making those final decisions.

Because this area is a significant interest of mine, and because I have observed the work of these two boards over about 15 years, even before I was on council, I took my concerns to Jayne Miller, Amy Klinke, and Jennifer Hall in numerous face-to-face conversations. I wanted to know what problems this proposal wanted to ameliorate, and how they saw this proposal as accomplishing community needs to make these important commitments to our residents. The memo with the resolution states their desire to save staff time, improve the speed of policy-making, and ensure that human services and housing needs about are coordinated. This reflects a large part of our conversations, which included frustration with long meetings going over staff’s work, difficulties in coming to decisions because board members disagreed with each other and with staff. The HPB has always had to deal with those disagreements and has also arrived at the decisions with everyone understanding the pro’s and con’s of other’s points of view; that is the significant goal of public participation.

In the background part of the memo, what is not mentioned is the community’s desire to be very active participants in this decision-making, resulting in the two committees with separate responsibilities. The HPB has always had to wrestle with the details of whether projects could be financially viable; leaving that determination to staff alone is not sufficient due diligence. One person is not enough eyes on the details; staff needs to take their information to a larger committee for complete vetting of the information. That way the community takes ownership, understands the financing challenges, and advocates for the project. The CDBG Exec. Committee has taken the responsibility for evaluating human service agencies, to improve performance and maximize the dollars we were spending. Every funding body in this community has the same goals and challenges; that area will undoubtedly undergo redesigning as collaboration and streamlining becomes more viable. The CDBG Exec. Comm. should play a vital role in this re-designing, not be subsumed into a different activity. While these two bodies have common interest in housing with services where needed, they could accomplish this meshing of interests in a couple of meetings together. Because their overall functions have been quite different, the CDBG Exec. Committee continues to want to concentrate on the human service agencies, not on housing. I believe that they do not support this merger, not out of fear of change but because they do not see it as benefiting their work or the community.

As a community member, I do want to see improvements in our ability to provide housing and human services. To me this means making very careful funding decisions with the greatest community support and enabling human service agencies to improve service delivery and reduce costs and inefficiencies. It requires making very carefully considered judgments, after wide discussions of facts and goals, and the public needs to be an integral part of those judgments. #3 leaves those important decisions in staff’s hands.

This resolution needs to be more finely-tuned to reflect its goals and ensure a process for public ownership of all its facets. I urge you to reconsider the Staff Role and Specific Tasks of the Board, and the various concerns of each of the existing committees, before finalizing this document. There is no immediate pressing need to decide this now.

Good Luck,

Jean

Dear Mayor Hieftje and City Council members,

I am writing to encourage you to support the creation of the Housing and Human Services Advisory Board (HHSAB). As a recently appointed member of the Housing Policy Board, I can cite several reasons why it’s a good idea to combine the HPB with the Community Development Executive Committee into a streamlined HHSAB.

First, the HHSAB concept has widespread support. Its creation has been endorsed by the two boards that will be merged in the process. The HHSAB has the support of the city council members who sit on the two existing advisory boards, as well as the city administrator and community development/housing staff.

Second, the creation of an HHSAB would erase the false dichotomy that presently exists with the system of one board focusing on housing and the other on human services. In reality, housing and human services are inextricably linked when servicing low-income and homeless communities. Each of the housing projects overseen by the OCD involves human services, for as you know, people with low or no income do not make stable tenants in the absence human services. This concept is clearly stated in the OCD’s mission statement: “to achieve a socially and economically diverse community through the delivery of housing, economic development and human services to lower income residents, particularly the disadvantaged and most vulnerable.”

As it now stands, at Housing Policy Board meetings we discuss proposals by private and nonprofit developers to build or renovate low-income housing. Those same developers must then approach a second advisory board to the OCD - the CDEC - to obtain assistance with the human services piece. This process is cumbersome, inefficient, and unwise. It would make much more sense for citizen advisors to consider the whole project together - the bricks and mortar and the services - rather than just one piece at a time. An HHSAB could make more informed choices about which projects will best meet the needs of the target population. A board considering both housing and human services would also lend itself to discussions of policy and strategy, and not just specific projects.

Third, the creation of a single HHSAB will increase efficiency of the Office of Community Development in providing services. At present, two staff members service each of the two boards: arranging and attending monthly meetings, providing guidance to the boards, distributing paper and electronic communications to board members, facilitating the workings of subcommittees, and answering board member inquiries between meetings. If the two boards were to be combined into a single HHSAB, it would eliminate needless duplication of efforts on the part of staff and allow the staff to focus more of their time and energy on providing needed services to the OCD’s target population. It would also save the city money on board materials and staff time.

I hope that you will choose to support the HHSAB. Thank you for considering my point of view.

Sincerely,

Phillis Engelbert

Since there is no public hearing on this item, are people planning to sign up for public commentary reserved time at the beginning of the meeting?

I have been a citizen member of the Housing Policy Board for over four years. I did not have the opportunity to vote no on this resolution at our recent meeting as the vote had not been called by the time the meeting was scheduled to adjourn. I had a prior commitment, and could not stay.

I believe the responsibility of implementing housing and human service policies and programs is too broad of a goal for one single citizen board. The creation of this new board will considerably dilute and diminish the important tasks currently being done by the CDEC and the HPB. As proposed
both boards have been stripped of meaningful responsibility, silenced on important funding decisions and replaced by a board without authority. As a community that values meaningful citizen participation, the dissolution of CDEC and HPB will be a long walk backwards.

Thank you for your sincere consideration of my comments.