Lenox Affordable Housing Committee
July 5, 2011
Minutes
Members present: Dave Klausemeyer (DK), Chair, Jo Anne Magee (JM), Olga Weiss (OW) and .Debbie Burke (DB).
Absent: Ellen Jacobson (EJ), Kate McNulty-Vaughan (KMV) and Roscoe Sandlin (RS).
Also in attendance: Mary Albertson (MA), Town Planner and Mark Smith (MS), Planning Board.
DK opened the meeting at 3:05 PM.
DK said that he invited our guests Bill Dunlaevy and Kathy Daury of Legacy Bank to discuss the banks role in the development of affordable housing as well as the proposed Housing Symposium. DB said that since there are members who are absent she would like to tape the meeting to have a transcript of the meeting to share with the other members. No one objected and DB began taping the meeting.
DK explained that the Affordable Housing Committee (AHC) was formed several years ago. It started as an ad hoc committee and eventually was made a formal town committee. Members are appointed the Board of Selectmen.
DK said that the work of the AHC is to create affordable housing that will enable the Town to meet is 10% state mandate. The AHC also recognizes the need to provide affordable housing opportunities that do not necessarily meet the state guidelines to be counted toward the 10% but that provide affordable housing options in Lenox.
DK asked MA about the appraisal for the Bartoni property. MA said she just received the appraisal earlier in the day and had sent an email to the members. The appraisal came in at $600,000. DK said the committee prepared a Housing Production Plan (HPP) in 2008. The HPP showed that there was a lack of affordable ownership opportunities. The AHC has supported the Sawmill Brook project because it is an ownership project.
DK said that the Town Meeting approved the recreation of an Affordable Housing Trust. Currently, trustees also serve as Affordable Housing Committee members. The Trustees applied for CPA funds and to date have received $130,000.
DK opened-up the meeting to a general discussion between the AHC and Mr. Dunlaevy and Ms. Daury.
JM said that the development of the Bartoni property for ownership units is a long-term project. She said that the Trustees have $130,000 and she suggested it could be leveraged in a number of ways. She said that there is a need for a bank partner. She asked about a soft-second loan program.
Ms. Daury said that the soft-second programs are a concept of the past. Banks will no longer lend to homebuyers with little or no money as a down-payment. She said that in the past Legacy worked with Mass Housing to develop and administer a soft-second program and won awards for this work. The soft-second (silent-second) program of providing 100% financing left homeowners in trouble during the recent down economy. She is not optimistic that this type of lending will return.
JM asked what is possible in this economy.
Mr. Dunlaevy said that banks want to make loans. Banks are examined under the Community Reinvestment Act and they need to show how money is put back in the community. Banks compete with each other through first time homebuyer programs. Ms. Daury said the challenge is qualifying moderate income buyers for loans. Many times credit scores prevent buyers from qualifying for loans.
OW said she did research on units that are available in Lenox through the Multiple Listing Service. She said there a number of units available at Lenox Heights. She visited Lenox Heights and said it is a nice layout that includes amenities such as a swimming pool and playground. DB suggested that an option for the Trustees is to buy units and rent them to income qualified renters. MA and Ms. Daury discussed the challenges of working with co-op units. MA said the Department of Housing and Community Development (DHCD) did not out and out oppose co-op units but there is not a standard procedure for counting co-op units toward the Town’s 10% mandate. It would be much easier to work with DHCD on conventional condominium units. Ms. Daury said banks are not making loans
on co-op units. She explained that the bank is not making 15 years loans and co-ops are generally maximum 15 year loans.
OW said there are also units available at Morgan Manor. She was surprised by the number of units available and how long they were staying on the market. Discussion ensued regarding Morgan Manor.
Discussion ensued regarding housing for General Dynamics. OW said the realtors she talked to indicated that employees are looking for rental units vs. ownership units.
JM asked what banks are doing to address affordable housing.
Ms. Daury discussed first time homebuyer programs. She said that banks have products but people are cautious and not secure in their jobs. It is a challenging market.
OW asked how we break the pattern.
Mr. Dunlaevy made reference to an article the Wall Street Journal regarding consumer confidence. Corporations are making record profits but unemployment remains high and consumers are reluctant to spend money.
DB asked about financing for Accessory Dwelling Units (ADU’s). ADU’s may not count toward the 10% mandate but provide affordable housing opportunities. DK suggest that Mr. Dunlaevy and Mr. Daury look at the funding program for ADU’s offered by Salisbury Savings Bank.
Members suggested that the discussion shift to opportunities in rental housing. Mr. Dunlaevy said he is encouraged to hear the members discuss rental units. He said that at a national level the priority for ownership units has changed. We have learned that ownership isn’t always the best option. OW suggested there is often a negative attitude toward rental units. In New York City rental housing is viewed differently.
JM excused herself from the meeting at 4:00 PM.
DK suggested that the committee conclude the meeting by discussing the Questions the Committee prepared in advance for Mr. Dunlaevy.
1. What are the federal, state and local bank programs that sponsor or support affordable housing? Response: Mass Housing Finance Agency and the Federal Home Loan Program. Banks are competitive in promoting individual first time homeowner programs.
2. What loan programs are available locally for affordable housing? Which banks are involved? What has been the history of Berkshire County banks participating in affordable housing initiatives? Response: Mass Housing Finance Agency, Berkshire Housing Development Corporation, Berkshire Fund & Legacy Fund.
3. Could banks improve their support of affordable housing by leveraging town affordable housing resources such as the Affordable Housing Trust or the Community Preservation Act? Response: No clean answers. Discussion ensured regarding the problems of supply and demand. The market should be improving but consumers remain reluctant to purchase homes.
4. Are there any barriers to Berkshire County banks participating in affordable housing initiatives that the town can help address? Response: Banks have the resources to participate in affordable housing. The problem is underwriting. Banks must answer to shareholders. There is increased pressure to ensure banks are making good loans.
5. Are the foundations such as Legacy or Berkshire Bank in a position to fund or gift affordable housing initiatives? Response: When Legacy and Berkshire Banks merge the foundation will increase. The key for foundation support is a community benefit and not a one-time windfall for one individual.
6. What barriers does the bank face in support of affordable housing? Response: Underwriting is a challenge. There is a demand for financing and ensuring the bank is making sound loans.
7. What is the amount of funds that the bank has available for affordable housing initiatives? If none today, what are the plans for the future? Response: There are unlimited resources the challenge is finding individuals who qualify for loans.
8. What is the strategic plan for the use of affordable housing funds? Response: No clear answer. Discussion ensued regarding the fact that the Trust is not a significant pool of money.
9. How can we assist the bank in achieving affordable housing goals? Response: No clear answer. Discussion ensued regarding the need to maintain affordable units. Members would like to see units as affordable in perpetuity.
Members discussed the Housing Symposium. MA said KMV prepared a list of potential Lenox Attendees. Mr. Dunlaevy suggested that attendees include: local banks, Mass Housing Finance Agency, Berkshire Housing Development Corporation and Federal Home Loan Administration. DB suggested Ben Downing and Smitty Pignatilli. She suggested that we work with Ben Downing’s office to see if Tina Brooks, Secretary of the Department of Housing and Community Development would attend. MA will contact KMV regarding her list. Mr. Dunlaevy asked the committee to consider topics for the symposium.
DK thanked Mr. Dunlaevy and Ms. Daury for attending the meeting.
MA informed the committee that the Peer-to-Peer program has been funded for FY’12. Members will discuss this at the next meeting.
The minutes were tabled to the August meeting.
The next meeting will be Monday – August 1, 2011 @ 3:00 PM.
Meeting adjourned at 4:50 PM.
Respectfully Submitted,
Mary Albertson, Town Planner
Approved: August 1, 2011
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