Section 8 and concentration of poverty

[MacheteJames]

Hi everyone,

I work for a community development corporation outside of Boston, doing affordable housing development in a distressed neighborhood. Here's the deal: we want to apply to the state department of housing and community development for some project-based Section 8 vouchers. We're doing this for a tax-credit rental project of ours that is in predevelopment. The LIHTC program has a ceiling of 60% of AMI for tenant eligibility, but this is an area that is so distressed that many potential tenants make less than 20% or 30% of AMI. We really need to find a way to make this more affordable. One's of HUD's statutory goals is the deconcentration of poverty, and due to the level of poverty in this neighborhood, we're going to have to come up with some pretty creative language in our application in order to make this happen. Any ideas on how we can go about doing this?

-James

[iamme]

Well, I was under the impression that the tax credits are there to provide a portion of financing for the development. The rents, even though they are restricted, still provide cash-flow to the development. So, you would have to look for more public monies if you want to set the cap on rents to 20% to 30% AMI. It seems many places neglect this area of affordability, good luck.

I don't mean to criticise you much but if the neighborhood already has a high amount of poverty, why would you like to locate more there? I know it may be easier to locate in a 'distressed' neighborhood, but you're not doing these people any favors by moving them into a new apartment in a slum.

I'm sure that there will be better outcomes for the neighborhoods and residents if a project capping rents at 20% to 30% AMI were placed in a more stable neighborhood, assuming you're not trying to build a 60's style commie bloc, of course.

[MacheteJames]

I appreciate your feedback, iamme. The reason we're doing this is because as a community development corporation that develops low-income housing and is run by a board made up of neighborhood residents, it's in our mission statement to do this kind of housing. This is the neighborhood where we primarily operate. Our projected contract rent for a 2 bedroom unit in this development is still $970 - more than a lot of our likely applicants can afford. That's why we want to bring in the project-based Section 8 vouchers. The neighborhood actually has been steadily improving, as we buy up abandoned and tax-title properties and turn them around. It's just real tough in the current fiscal climate to get much done.

[Wildono]

Well, MacheteJames, you'll have challenges if the neighborhood you're operating in is also a focus for non-taxable entities providing services to persons with criminal justice histories and current lifestyle adjustment issues. Concentrations of populations with drug dependencies, broken families, gang activity, etc. don't seem to engender a sustainable community (the economic and ecological side of sustainability). Good to hear that your area is improving.

Our Tacoma community has seen successful efforts similar to yours deteriorate the breadth of the tax base in a community where high concentrations of poverty, criminal activity, and private sector (resident and business) disinvestment and flight have been intertwined. I'd amplify what iamme said, why add to a concentration of populations who live in despair? Are there Fair Share requirements for disperson of low-income housing in your community?

Affordable housing for all is absolutely needed. The question I pose is whether a regional issue, as affordable housing typically is classified in planning literature, is best handled in such a limited scope as a neighborhood. That being said, check out the City of Tacoma for additional resources - they're doing a great job of concentrating the Puget Sound region's lowest-income housing, poverty, and social services drawing violent ex-convicts into a few of its neighborhoods. There is an excellent paper on the political benefits of concentrating poverty in Boston - google "Curley Effect". It is nothing if not thought-provoking.

Good luck with your efforts.

[Gotta Speakup]

As a person very familiar with Lowell MA and as a person with a lot of friends there, I can say that it has some very poor communities that are not all that high crime. It has lots of immigrants, always has. Lately it has been discovered as a great place for commuters to Boston. The various community development corporations have been organized to assist long term, low income residents stay in their community, hence the demand for assisted housing in a community that is poor.

As for the curley effect article. One of the authors also wrote a paper concluding that cities should not build public transit - they attract poor.

[Wildono]

I'm glad to hear that Lowell, MA doesn't have a crime problem. But I find the idea of supporting continued concentrations of poverty - rather than addressing regional housing affordability and job creation unsupportable. In Tacoma, crime and poverty have not been addressed as intermingled community development issues and our neighborhoods reflect something quite different than the stable low income communities of Lowell. You are right, though. Tenure stabilization is important. But it's not happening in my hometown. People face the reality of rampant criminal behavior in my neighborhood - and many flee.

Thanks for the interesting note about the author of the Curley Effect article. The author's apparent politics don't change the fact that he illustrates a reasonable political reality for some cities - like mine where a Politician/Social Service Provider ("Pol-X") gloats at public meetings about fighting NIMBYs, while the neighborhood of Pol-X and most other Pols is safely protected by recent ordinances from the land uses that would include those very people served by Pol-X. Half-way houses, drug treatment houses, hospices, even day cares! It's an insult.

You don't have to be a liberal or a conservative to have a problem with the concentration of poverty. What does one do about that? What can a community do about that? The answer to that question is perhaps where the conservative and liberal differ. Or maybe not.

[bluehour]

MacheteJames,

I used to handle Section 8 vouchers, both project-based and otherwise, and in my experience the project-based vouchers were more sucessful because they were administered to people who had a vested interest in staying in a building. IE often elderly and disabled people.

Perhaps you can plan the building to have a mix of incomes, or to have specific apartments/homes for special groups such as the elderly?

I read somewhere about a development that had "grandparent" apartments for elderly people who are taking care of grandchilden in a community where this was common. Maybe some creative thinking like this would result in a development that is more than just a rehab and then voucher project, and could contribute to both the goals of your organization and to HUD's.

[planner?]

First I don't know where you are in your planning stages but it sounds pretty early. . .You may consider (it has been done!) a combined 202 tax credit project. . .which while not section 8 provides rental subsidies (albiet restricted to seniors) thier have been some built per the some new rules. . .

On a bigger picture I think that this is being looked at in the wrong way. Rather than seeing this as an effort to concentrate poverty it should be seen as an infusion of a large amount of capital into a poor community as well as the provision of some safe and healthy housing.

I would try to extole the virtues of the project to the community (NAHB published a study called "The Local Economic impact of a typical affordable housing tax credit project" which I would check out) as well as explain the quality of the existing housing which I am sure is probably pretty substandard.

[jmello]

I read somewhere about a development that had "grandparent" apartments for elderly people who are taking care of grandchilden in a community where this was common.

That would be the Boston Housing Authority. I was at the ribbon cutting for that project.

http://www.bostonhousing.org/detpages/press31.html

[planner?]

RE: grandparent housing

Their are several others. . .

http://www.nytimes.com/2006/10/08/re.../KYxirlouwb4Cw

[MacheteJames]

This is great advice... many thanks. We've already submitted our financing package to the state department of housing and community development, and we're actually a good ways into predevelopment at this point. Our architect has finished design/development and is working getting us the construction documents so that we can go out to bid sometime around February (if we get out funding - we're pretty certainly that we will since this is the second time we've submitted an application for this project.). I'll definitely check out that NAHB report.

First I don't know where you are in your planning stages but it sounds pretty early. . .You may consider (it has been done!) a combined 202 tax credit project. . .which while not section 8 provides rental subsidies (albiet restricted to seniors) thier have been some built per the some new rules. . .

On a bigger picture I think that this is being looked at in the wrong way. Rather than seeing this as an effort to concentrate poverty it should be seen as an infusion of a large amount of capital into a poor community as well as the provision of some safe and healthy housing.

I would try to extole the virtues of the project to the community (NAHB published a study called "The Local Economic impact of a typical affordable housing tax credit project" which I would check out) as well as explain the quality of the existing housing which I am sure is probably pretty substandard.

[Zeha]

As a person very familiar with Lowell MA and as a person with a lot of friends there, I can say that it has some very poor communities that are not all that high crime. It has lots of immigrants, always has. Lately it has been discovered as a great place for commuters to Boston. The various community development corporations have been organized to assist long term, low income residents stay in their community, hence the demand for assisted housing in a community that is poor.

As for the curley effect article. One of the authors also wrote a paper concluding that cities should not build public transit - they attract poor.

Could you tell me which author wrote the paper you are referring to, and possibly the name of the paper if you know it?

Ok, to answer my own question, I know WHO the author is, just not which paper/article, yet.

[rhansen]

Machettejames,
What about MassHousing's 80/20 program? if i recall, don't they provide for 50% AMI for some percentage of their units? Of course, it would have to be a mixed-income project which i don't think will work for you. GL!