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Housing Equity’s Future: Moving from Debate to Productive Dialogue

December 15th, 2014 by

by Joe Kriesberg and Jason Reece

A robust debate erupted on Shelterforce in response to Miriam Axel-Lute’s article,“The Dangerous Rhetoric of Escaping to Opportunity”, with strongly worded opinions flowing from both sides of the mobility and place based debate.

As practitioners who were involved in this vigorous conversation and referenced in the article, we had a series of private discussions about our perspectives and concerns regarding the place vs mobility debate.

READ the full article on Rooflines


The Housing Capital Budget is on the Governor’s Shoulders

December 1st, 2014 by Don Bianchi

The most important decisions affecting how much the State spends on affordable housing will be squarely on the shoulders of the new Governor.  The State’s “Capital Budget”, which arguably has a bigger impact on affordable housing than what is commonly called the “State Budget” (and is more accurately called the “State Operating Budget”), is something over which the State Legislature has no control.

The State Operating Budget contains the funds appropriated by the State Legislature every year for all matter of State spending requirements.  This budget is absolutely essential for meeting a myriad of needs, including the need for affordable housing.  The Massachusetts Rental Voucher Program (MRVP) provides rental assistance so that very low-income families can afford to live in an apartment.  Other programs help individuals and families avoid homelessness, or helps them find housing and shelter if they become homeless.  The State cannot house families in need without these programs and other essential programs funded through the State Operating Budget.

Likewise, adequate funds from the State’s Capital Budget are essential to meeting the affordable housing needs of families across the State.  And in fact, the programs that provide the dollars for the actual construction or rehabilitation of this housing come primarily from the Housing Capital Budget, or as they are commonly called, bond funds.  Public housing authorities rely on bond funds for necessary improvements to the aging public housing stock.  Private affordable housing developers, including many nonprofits and CDCs, rely on bond funds for both the production and preservation of affordable housing.  Providers of housing for persons with disabilities rely on these bond funds as well.

Thus, the amount of the State’s Housing Capital Budget will be among the most consequential decisions facing Governor-Elect Baker in 2015, and each year thereafter.  At the MACDC Convention on October 25, then-candidate Charlie Baker made this pledge with regard to the housing capital budget: “We will not spend any less than the $190 million that is already on the table.”  Getting this pledge is a great first step!  But we have our work cut out for us - to hold the new Governor to his pledge to not cut the housing capital budget, and to advocate for a much-needed increase.

Like the State Operating Budget, the State’s Capital Budget originates with the State Legislature, through passage of a Housing Bond Bill.  While the operating budget appropriates specific dollar amounts to be spent on programs, however, the capital budget establishes overall spending caps, within which the Governor can raise funds through the sale of bonds.  In 2014, the Legislature passed, and Governor Patrick signed, a $1.4 Billion Housing Bond bill, establishing spending caps for nine separate housing programs for what is expected to be a 5-year period.  This was the largest housing bond bill in the State’s history, and provided authority to the Governor to spend what is needed on important housing programs.  It doesn’t take a complex algorithm, but merely a calculator, to figure out that $1.4 Billion over 5 years comes out to $280 million per year.  Yet Governor Patrick’s most recent Housing Capital Budget, released for the fiscal year that began July 1, provides an increase from the prior year to just over $190 million for the current year.  Why the mismatch?

In 2014, the Governor, through the Executive Office for Administration and Finance (A&F), established a 5-year Capital Investment Plan that covers the broad spectrum of investment categories to be funded through the sale of bonds.  These include housing, economic development, transportation, health and human services, energy and environment- to name a few.  From this plan, the Administration sets spending limits (bond caps) for the current fiscal year for each of these categories.  Therefore, in any given year, the amount of the bond cap for housing is a function of two determinations by the Governor: first, the overall amount of funds that the State spends in the capital budget, and second, the relative share of that amount to be spent on housing.  Within the caps established by the Housing Bond Bill, the amount of the housing bond cap is totally within the Governor’s sole discretion.

How has housing fared over the years in the capital budget?  Well, in fiscal year 2007 (the year that started July 1, 2006), then-Governor Romney’s last capital budget set the housing capital budget at $147 million.  Since then, in the capital budgets established by Governor Patrick, we have seen an increase, to where the housing capital budget (for fiscal year 2015) currently stands at $190.5 million, an increase of just under 30% over 8 years.

Of course, the dollars are spent on specific programs that allow important housing projects to go forward, which is why we ask for more money. (Massachusetts FY 2015 Housing Capital Budget)  The Affordable Housing Trust Fund, the Housing Stabilization Fund, and the Housing Innovations Fund help address the pipeline of affordable rental and homeownership development proposals that are forced to wait too long, often several years, for commitments of state resources.  The Facilities Consolidation Fund and the Community Based Housing Program expand housing choice for persons with disabilities.  The demand for funds under these, and other, programs far exceeds their supply.  Furthermore, the State dollars awarded leverage tens of millions of federal dollars from low-income housing tax credits and other programs, and locally-allocated dollars as well.  This is why each year MACDC, and our allies, advocate with the Governor for more money in the Housing Capital Budget.

There is one thing we know about Governor-Elect Baker, from his role in a prior administration as the Secretary of Administration and Finance.  He knows that when it comes to programs to fund affordable housing development, the capital budget is the key.  And so do we.


This holiday season, why not make a donation that both Governor Patrick and Governor-elect Baker would applaud?

November 24th, 2014 by Joe Kriesberg

As we begin the Holiday Season, many of us will be taking some time to reflect on our many blessings and to give back to our community.  This year, for the first time ever, you have an opportunity to double the impact of your donations by leveraging the newly enacted Community Investment Tax Credit (CITC).  As a friend of MACDC, you have certainly heard about the CITC many times.  But did you know that this program has been enthusiastically embraced by both Governor Patrick (watch video) and Governor-elect Charlie Baker (watch VIDEO)?  Both see the power of this public-private partnership and the power of resident-led community development.

We hope that you will consider the views of both our current and future Governors and use the CITC program to increase the power of your personal donations this holiday season. 

You can participate in this program by donating on-line to the United Way’s Community Partnership Fund, which will then redistribute the gift to CDCs across the state. 

You can also give directly to one or more of the 36 CDCs across the state who are participating in the program. To see a list of participating CDCs, CLICK HERE.

Remember, a $1,000 donation will cost as little as $350 once you consider the state and federal tax benefits.  For some, the tax benefits might be even larger.

Can you think of a better way to make a difference this holiday season?


Ten Unsolicited Suggestions for our New Governor

November 13th, 2014 by Joe Kriesberg

Since Election Day, many people have asked what I think about the new Governor and what his election will mean for the Community Development Field.  My quick answer, in light of the commitments he made to us at the MACDC Convention last month (Watch VIDEO), is that I’m optimistic.  And the appointment of Jay Ash as Secretary of Housing and Economic Development is another great signal that this Administration will be a friend of community development.  My longer answer is that it is incumbent on those of us in the field to work hard to build a productive partnership with the new Administration. In that spirit, I thought I would offer a few suggestions to Governor-elect Charlie Baker:

  1. Set ambitious housing goals:  The Administration should set ambitious goals that can be used to shape policy, motivate public agencies, attract private partners, overcome bureaucratic inertia, and be used to measure progress, make adjustment and ultimately refine policies as needed.  To ensure balance, the Administration should set goals in several areas, such as: new first-time homebuyers accessing state support mortgage products, new permits for multi-family housing, affordable housing production and preservation, reductions in family and individual homelessness, a reduction in the number of households paying over 50% (or 30%) of their income for housing, and the number of towns/cities that exceed the 10% goal for affordable housing.
  2. Invest strategically to address housing market deficiencies:  I was pleased that Mr. Baker said at our Convention that he would at least maintain the current $190 million capital budget for housing and consider increases in the future. Increases in the capital budget, along with increases in state tax credits, brownfields funding and rental assistance are necessary to meet the growing demand for reasonably priced housing that the market can’t produce by itself.  We also need to invest in a balanced approach that includes housing production & preservation; rental & homeownership; new construction & rehab, large & small projects; and investments in urban, rural and suburban communities.
  3. Embrace smart growth policies:  For the past 12 years, starting with Governor Romney and continuing with Governor Patrick, the Commonwealth has embraced a smart growth framework to guide our economic development, housing, environmental and transportation policies. Adopting policies, like those outlined by the MA Smart Growth Alliance, will save money for public infrastructure, provide the scale and density necessary for sustained economic growth, address climate change, respond to the growing market demand for urban, walkable places, and protect the Commonwealth’s natural resources.  Smart growth also promotes regional equity – improving the quality-of-life in distressed neighborhoods and expanding opportunities in higher income places so we all benefit.
  4. Grow local economies: The Governor-elect has already committed to put at least $2 million in his budget for MGCC’s Small Business Technical Assistance program that provides grants to local nonprofits working to support small businesses, in particular those run by immigrants, people of color and women.  The new Administration should build on this by supporting MGCC and a network of strong local/regional CDFIs that can provide loans to new and growing small businesses who are not yet bankable.  And the Administration should embrace the newly enacted Transformative Development Initiative for Gateway Cities and look to expand it if it proves successful during its pilot stage.
  5. Leverage the power of place: In recent years, a number of exciting programs have demonstrated the power of investing in cross-sector, placed-based efforts to expand economic opportunity and improve the quality-of-life in our neighborhoods and towns – without displacing the very residents who help make those improvements possible.  The Federal Reserve Bank’s Working Cities program, the Smart Growth Alliance’s Great Neighborhoods program and LISC’s Resilient Communities/Resilient Families program offer terrific models for state government to use in crafting its own approach.
  6. Support municipal capacity: The Baker Administration should build local municipal capacity to get things done. This should include actively encouraging/helping cities and towns to enact the Community Preservation Act, to establish Business Improvement Districts, to develop long-term housing plans, to zone for smart growth, and to pass inclusionary zoning ordinances that promote equitable development for people across all income levels.
  7. Strengthen the CDC sector: The Governor-elect has enthusiastically committed to fully implement the Community Investment Tax Credit by deploying all $6 million in credits each year and helping to recruit private sector partners to the program.  The state can further help by investing directly in the myriad projects and programs offered by CDCs in partnership with local residents and stakeholders.  These investments provide taxpayers with an important “two-fer”: (1) a well-designed, community-driven project or program, and (2) increased local capacity to ensure long-term stewardship and further investment.
  8. Promote family asset building:  Income and wealth inequality are growing problems not just in Massachusetts, but across the country.  Reversing these trends will be difficult, but the state can help by supporting programs that empower families to save money, build assets, gain financial skills, avoid predatory financial products, and in some cases, become homeowners.
  9. Connect the Dots:  There is a growing body of evidence documenting that investments in strong neighborhoods and safe, affordable housing provide returns across a wide array of social goals, including public health, educational attainment, environmental protection, energy efficiency, and public safety.  We need to invest more in these up-stream measures that reduce long-term costs and improve life outcomes for children and families.
  10. Collaborate with community-based organizations – I was pleased to hear Governor-elect Baker say at our Convention last month that he would want to meet with us on a regular basis throughout his administration.  He has already demonstrated that interest during the campaign, meeting with the MACDC Board of Directors, visiting local CDCs and coming to our Convention. We look forward to building a strong partnership with the Administration.

Good luck with the transition, Mr. Governor-elect.  And please know that the CDC community is ready to help and ready to get to work.


Community Investment Tax Credits: Time Is Running Out for 2014!

November 10th, 2014 by

Donors may contribute to individual CDCs, or they may contribute to the United Way Community Partnership fund, which was established by the Department of Housing and Community Development to raise and distribute funds to all eligible CDCs across the Commonwealth.  More information about the CITC tax credit is available by emailing sdickason@supportunitedway.org or MACDC at johnf@macdc.org.


Less than 8 weeks remain for donors to claim the new Community Investment Tax Credits for the 2014 tax year and support the work of Community Development Corporations across the Commonwealth.  The Community Investment Tax Credit Program (CITC), which went into effect earlier this year, is a new program designed to help improve the quality of life and economic opportunity for families and neighborhoods across the Commonwealth.

The Community Investment Tax Credit offers individuals, corporations and nonprofit institutions the opportunity to obtain a 50% Massachusetts state tax credit and up to a 35% standard federal tax deduction (depending on tax bracket) while investing in the economic development of the communities that need help most. That means if someone donates $1,000, for example, they will receive both a $500 credit from the State and a $175 net reduction from their Federal taxes, leaving just $325 in out-of-pocket cost for the donor.

From now until the end of 2014, up to $3 million is available to donors and corporations that want to invest in this innovative economic development strategy and receive a tax credit.  Once the $3 million is used, donors must wait until 2015 to participate in this great opportunity to have a lasting impact on their community.

“Every day, in neighborhoods and cities across the Commonwealth, Community Development Corporations are working hard to spur affordable housing and job creation, incubate small businesses and revitalize neighborhoods,” said Michael K. Durkin, president at United Way of Massachusetts Bay and Merrimack Valley.  “Now, we all have an opportunity to accelerate this work and the benefits to us all – and receive a 50% tax credit in return.”

“Over the past ten years alone, CDCs across the Commonwealth have invested $2.9 billion in our economy, created or preserved over 24,000 job opportunities and supported over 325,000 individuals and families,” said Joe Kriesberg, President of the Massachusetts Association for Community Development Corporations.  “These impressive results help drive our economy forward for everyone.”

The CITC program utilizes the tax credit incentive to leverage private contributions to seed innovation and amplify community impact. Tax credits can be used for affordable housing, job training, business development, neighborhood revitalization and other vital economic development projects.

The donations, and tax credits, will support only CDCs that are based in Massachusetts, have been carefully selected for participation in this program, and are creating programs and economic development that benefit Massachusetts residents. Thirty-six CDCs from across the state are eligible. For example:

  • In East Boston, Neighborhood of Affordable Housing (NOAH) will work to construct over 50 new low-to-moderate income housing units, advocate for increased green space to expand sports and recreational programs to low-income children and youth, and provide affordable housing counseling and placement.
  • In Waltham, WATCH will organize home weatherization projects to help low-income residents save on their utility bills, expand its English as a Second Language (ESL) programs and teach first-time home buyer classes.
  • In Lawrence, Lawrence CommunityWorks (LCW) will pursue and bolster strategic partnerships with other key organizations to strengthen the institutional fabric of the City and increase educational attainment and financial resilience for the people of Lawrence through financial education and coaching, ESL and computer classes, career and job readiness training and youth development programming.  LCW is also working to create a vibrant mixed use community in the heart of the City with 71 affordable rental homes, five home ownership properties and 25,000 square feet of new commercial space.

From now until the end of 2014, up to $3 million is available to donors and corporations that want to invest in this innovative economic development strategy and receive a tax credit.  Once the $3 million is used, donors must wait until 2015 to participate in this great opportunity to have a lasting impact on their community.


Donors may contribute to individual CDCs, or they may contribute to the United Way Community Partnership fund, which was established by the Department of Housing and Community Development to raise and distribute funds to all eligible CDCs across the Commonwealth.  More information about the CITC tax credit is available by emailing sdickason@supportunitedway.org or MACDC at johnf@macdc.org.


Westhampton Woods: The Shape of Things to Come?

October 7th, 2014 by Don Bianchi

 

On a warm, sunny morning in late September, approximately 35 people gathered to celebrate the Open House for Westhampton Woods, Phase II, a 8-unit affordable housing development for seniors in the hilltowns of Western Massachusetts. Sponsored by Hilltown CDC, the construction of the second phase is the culmination of a community effort that began in 2000 when local residents, organized through the Westhampton Congregational Church, approached Hilltown CDC for assistance. The success of Phase I, completed in 2005, led to development of this second phase, bringing the total number of homes on this lovely wooded site to 15.

The successful development of any affordable housing in Massachusetts is challenging. Land suitable for building can be hard to find, restrictive zoning laws can be a barrier, and sponsors must often queue up through several competitive funding rounds to access the subsidized funds required. The development of rural housing adds an additional layer of challenges and impediments, especially in a town like Westhampton, which has fewer than 2,000 residents. Municipalities typically have limited capacity, and few dollars to contribute. Rural areas lack the infrastructure (water, sewer, and roads), and the market rents in these areas tend to be lower. Rural projects tend to be smaller so that they can adhere to the rural character of the town in which they are located and because neither the community nor the market will support a large, dense development. While smaller projects can have some advantages (such as faster permitting and wood-frame construction) they lack certain economies of scale. More significantly, low income housing tax credits - the primary source of subsidizing affordable housing in MA- are simply not an available source for small projects.

Yet affordable housing is urgently needed in all communities in Massachusetts, including rural communities. Rural communities face a range of housing challenges from decreasing and aging populations, an aging housing stock and, in some regions, high demand pressures from second home buyers. Incomes in rural areas tend to be lower, exacerbated by limited or no access to public transportation and few employment opportunities, and rental housing in some communities is almost nonexistent.

MACDC has joined an effort initiated by the Massachusetts Housing Partnership (MHP), a quasi-public agency, to take on the challenges associated with rural housing in Massachusetts. MHP has brought together CDCs and other nonprofit organizations, State agencies, regional planning agencies, and local officials to identify and advocate for strategies to address these challenges. We expect recommendations to be forthcoming this fall, to the incoming Governor and to the MA Department of Housing and Community Development (DHCD).

Despite the challenges, we gathered to celebrate Westhampton Woods. This was especially exciting for me, as I was the Housing Director at Hilltown CDC in 2000 when the residents approached the CDC and asked for help in developing senior housing. I can vividly recall those early meetings in the Church basement, where all we had was the “who” (local volunteers and a responsive CDC), the “what” (senior housing), and the “why” (seniors who could no longer maintain their homes had nowhere in town to go), but no idea of the how and the where and the when. On this bright September day almost 15 years later, at 13 Main Road in Westhampton, those questions were answered.

The challenge facing the Commonwealth of Massachusetts now is to provide a path to answering these questions for more rural residents. At the Westhampton Open House, DHCD Undersecretary Aaron Gornstein noted the importance of housing options for seniors, and pledged DHCD’s support for smaller-scale rental projects. Rita Farrell from MHP added that this was a model they would like to see replicated in many rural communities. When support from State agencies is combined with resident initiative and a capable nonprofit developer, our Commonwealth has the potential for many more celebrations like the one in Westhampton.


Say No To Crumbling Roads and Bridges

August 21st, 2014 by John Fitterer

On November 4th, Massachusetts voters will decide on a statewide ballot question that would eliminate a portion of the gas tax.  If Question 1 passes, it would be a step backwards, causing our roads, bridges, public transportation, bikeways and sidewalks to fall into further disrepair.  It will threaten the gains we’ve made towards a sustainable, healthy, and equitable transportation system.

We urgently need your help for NO on Question 1.

As you read this, more than half our bridges are deficient, unsafe or even closed from the Cape to the Berkshires.  Recent reforms and revenues have finally put us on the right track - but Question 1 would derail us, hurting our economy and compromising our safety.

Question 1 would eliminate a law that links the state gas tax to inflation. This transportation funding from gas tax indexing is constitutionally protected for transportation.  

To help grow the campaign to defeat Question 1, please do these things today:

1. Spread the Word.  Please share this information with your friends, family, neighbors, and colleagues.

2. Sign up for updates.  Visit saferoadsbridges.com

3. Follow this campaign on Twitter @VoteNoOnQ1 and  #NoOnQ1MA.

We urge you to join us and vote NO on Question 1 on November 4th!


MACDC & MMCA Boston Pilot Program generates nearly $39 million for MBEs and WBEs

August 12th, 2014 by

For the past year, MACDC’s Boston Committee has been working with the Massachusetts Minority Contractors Association (MMCA) to sponsor the Boston Pilot Program, a joint effort to help six Boston CDCs increase their utilization of minority and women owned enterprises (M/WBEs) on 11 separate real estate projects across the City of Boston.   The program established the goal of ensuring that at least 30% of the work was done by MBEs and 10% by WBEs.  As of June 30, six of the projects were in construction and the other five were in various stages of pre-development. So far, the projects have contracted for slightly more than $95 million in hard and soft costs, with 36% of the total going to MBE’s, 9% going to WBE’s, with a total of 41% going to either a MBE or WBE (the numbers do not add up because we do not double count minority-women-owned businesses).  This means that the CDC-sponsored projects have generated a total of nearly $39 million in economic opportunity for minority- and women-owned businesses, with much more to come as these projects continue to move forward.  Working with MMCA, we will continue to try to hit the 10% goal for WBE participation and try to increase the MBE numbers for soft costs where the percentage is much lower (MBE’s earned 41% of the hard costs, but just 13% of the soft costs; WBE’s were at 9% for both hard and soft costs).


DOR Finalizes CITC Regulations

July 30th, 2014 by

Recently, the Massachusetts Department of Revenue finalized its regulations for the Community Investment Tax Credit (CITC) program. These regulations define qualified donations (investments) to a Community Development Corporation or the Community Partnership Fund. The regulations also explain the benefits of the program and highlight some important key points for donors:

  • Donors can choose to donate directly to a CDC designated as a community partner (i.e., a CDC with tax credits to allocate to donors) or they can choose to donate to the Community Partnership Fund, for which the United Way of Massachusetts Bay provides administrative support.
  • Donors do not need to live in Massachusetts or have any Massachusetts income tax liability in order to make a donation and receive the tax credits. If a nonresident makes a qualified donation, he or she can file a MA nonresident tax return to claim the refund.
  • Nonprofits registered as 501c3 organizations may contribute to a community partner and receive a tax credit (if the organization has unrelated business income) or a refund.
  • Contributions to CDCs through a Donor-Advised Fund (DAF) are allowed. However, the tax credit or refund would be applied to the nonprofit or foundation administering the DAF, not the individual or family who established the DAF. The nonprofit or foundation managing the DAF can put the money back into the DAF, but cannot give it back to the individual or family that set up the account.

Please make sure you consult your tax advisor.

For more information on the CITC program, please visit MACDC's CITC website.


Community Development Partnership Announces Launch of Winter Farmers’ Market

July 30th, 2014 by

The Community Development Partnership (CDP) recently announced the launch of the first ever Winter Farmers’ Market on the Lower Cape, which will open in December. The Orleans Winter Farmers’ Market will take place at the Nauset Regional Middle School on the first and third Saturdays of the month from 10 AM to 12 Noon, beginning on Saturday, December 6th and ending April 18, 2015. A project of the CDP, the Market is offered with support from the Orleans Winter Farmers Market Advisory Committee and made possible by financial support from the USDA Rural Development Program and the Cape Cod Economic Development Council.

CDP made the announcement in preparation for National and Massachusetts Farmers’ Market Week, commemorated from August 3rd to August 9th. This year marks the 15th annual National Farmers' Market Week, recognizing the important role that farmers’ markets play in the agricultural and food economy. The U.S. Department of Agriculture began declaring a National Farmers Market Week in 2000. Since then, the number of Farmers’ Markets nationwide has almost tripled, from 2,863 markets in 2000 to 8,144 in 2013. Massachusetts has seen similar growth, now counting more than 250 markets across the Commonwealth. Cape Cod has 17 markets open this summer, which is more than double the number of markets from six years ago and its greatest number of markets ever. 

“Farmers’ Markets have a long history of fueling economic development and adding vitality to the communities in which they are held,” said Jay Coburn, Executive Director at the CDP. “We are incredibly excited to be working with local growers and food producers to help them grow their businesses and create opportunities for year-round sales. And we can’t wait to show Lower Cape residents that it is possible to grow fresh and nutritious food on Cape Cod 12 months of the year.”

Wellfleet Farmers’ Market Co-founder and member of the Orleans Winter Farmers’ Market Advisory Committee, Tracy Plaut, commented about the new Market, "Being able to supply fresh, locally raised food to the community keeps our friends and neighbors healthy, as well as building a strong and vital economy. It's a pleasure to support the ever-growing number of farmers who make their living while facing the many challenges of growing on Cape Cod."

Applications are still being accepted for vendors interested in participating in the Orleans Winter Farmers’ Market. Market vendors will also have access to business workshops targeted to growers and producers, as well as individualized technical assistance. More information for vendors and the Public is available at the CDP’s website. Information will be updated over the next few months, including participating vendors, featured musicians and special Market demonstrations.

The Community Development Partnership (CDP) nurtures a vibrant Lower Cape region – Brewster, Chatham, Eastham, Harwich, Orleans, Provincetown, Truro and Wellfleet - by promoting environmental and economic sustainability, expanding opportunities for low- and moderate-income residents, and preserving our unique cultural and historic character. 


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