Salem Affordable Housing Trust Fund
Minutes of Meeting
Friday, September 11, 2009
A Planning Subcommittee meeting of the Salem Affordable Housing Trust Fund was held on Friday, September 11, 2009 at 9:00 a.m. in Room 313 at 120 Washington Street.
Members present were Kathleen Burke, Mary Dennesen, Andrew Meegan, Jennifer Raitt, and Leonette Strout. Also, Lynn Goonin Duncan, Director of the Department of Planning and Community Development was present.
Members absent were Mayor Driscoll, Councillor Jean Pelletier, Councillor Matthew A. Veno, Aaron Allen, Chad Colarusso, Lucy Corchado, and Mary Lauby.
Guests present were Nancy Crowder, Executive Director of Citizens for Adequate Housing, Andrew DeFranza, Executive Director of Harborlight Community Partners, and Michael Whelan, Executive Director of Salem Harbor Community Development Corporation.
Approval of Meeting Minutes
Leonette Strout motioned to approve the meeting minutes from January 12th, May 8th, and July 10th without amendment, seconded by Andrew Meegan and approved (6-0).
Discussion with Non-Profit Affordable Housing Developers
Jenny Raitt explained that the purpose of today’s meeting is to gain more information from non-profit affordable housing developers in our area about their current work and plans concerning foreclosed properties.
Jenny Raitt further explained to the group some background on the new Massachusetts Foreclosed Properties Initiative managed by Citizens’ Housing and Planning Association (CHAPA). CHAPA will serve as a foreclosed properties clearinghouse by connecting banks that own foreclosed properties with approved local organizations – called “qualified purchasers”- which will purchase the properties and upgrade these homes for low- and moderate-income families. The goal is to get the properties back on the market and re-occupied as affordable homes as soon as possible. CHAPA has approved five organizations as qualified purchasers of foreclosed properties in Salem: Beverly Affordable Housing Coalition, Citizens for Adequate Housing, Harborlight Community Partners, Salem Harbor Community
Development Corporation, and the Planning Office for Urban Affairs (POUA). Three of those organizations were represented at the meeting today. Jenny later noted that POUA was no longer interested in purchasing properties in Salem as part of this initiative.
Andrew DeFranza, Executive Director of Harborlight Community Partners, boiled down the process. He explained that Salem, Lynn, and Peabody with subsets inside of each community were eligible for the program. CHAPA has data on individual properties that become bank-owned. CHAPA would give notice that these properties are for sale as a “first look” opportunity to the approved purchasers. Conceptually, Neighborhood Stabilization Program (NSP) funds would assist with the purchase of these properties.
Leonette Strout asked if outreach to homeowners or realtors fits into the process. Nancy Crowder, Executive Director of Citizens for Adequate Housing, relayed that logistically the city notifies the four organizations. The organizations do not act as mediaries to help homeowners purchase properties. Nancy Crowder went back to further explain the CHAPA clearinghouse process. Lynn Goonin Duncan noted that the city has been able to help several families to purchase foreclosed properties through the city’s first-time homebuyer downpayment assistance programs.
Also, Nancy Crowder stated that there are only a handful of banks that are involved in the program. Andrew DeFranza commented that many banks do not care to be involved in the clearinghouse because in this current market the houses will sell regardless.
Andrew Meegan added that he has seen many properties linger on the market especially those owned by Deutsche Bank. Mike Whelan, Executive Director of Salem Harbor Community Development Corporation, noted that 35 Palmer Street in the Salem Point neighborhood is a good example of this.
Andrew Meegan then asked how many properties each organization is looking to acquire. Andrew DeFranza responded that Harborlight would take as many as they can handle if the NSP funding was available to use for acquisition and rehabilitation of the properties. He expressed doubt that the program will work if the qualified purchasers do not have access to NSP funds. Without NSP funding, the organizations would be forced to front the funds by gaining a line of credit, then deal with title and rehabilitation issues. Fronting the funds involves a lot of risk for these non-profits. Mike Whelan added that Salem Harbor CDC is mainly interested in multi-family units and that most of the foreclosures in Salem have been single-family homes. The rest of the guests echoed this interest in
acquiring multi-family units. Nancy Crowder said that the organizations would like to do this as a team effort instead of competing against each other. Andrew DeFranza added that it is very unlikely that the few bank-owned multi-family properties will be next to each other in order to create a larger project that they could collaborate on that would really impact the community.
To summarize, Jenny Raitt said that the organizations are looking for multi-family affordable rental units for low- and moderate-income families.
Andrew DeFranza talked about an example in Hamilton, Massachusetts in which Harborlight used its own capital to acquire a former food pantry to convert it into four housing units plus one commercial unit and a new food pantry. Community Preservation Act (CPA) money and local HOME funds were used to leverage other funds for this project, which is the first affordable housing project in Hamilton. He said that HOME funds were a major piece of making the project possible. Mike Whelan stressed that early capital is critical in order to be able to make these types of projects work.
Lynn Goonin Duncan informed the group that the city does have local HOME funds, but not CPA funds like other communities. Jenny Raitt noted that CPA was on the November ballot two years ago, but was narrowly defeated. The Trust wrote a letter of support for CPA at the time.
Andrew DeFranza raised another issue – that of pre-purchase costs and paying for the required appraisals of the properties. Jenny said that maybe this is a cost that the Trust Fund may be able to the help with. Lynn asked if the organizations would consider a contribution of matching funds (have of the costs paid for by the organizations and half by the Trust) for the appraisals or environmental reviews of the properties as one way to support their work. Andrew DeFranza said that would help them to get through the due diligence portion.
Jenny Raitt stated that at the next Trust Fund board meeting in October that the group will be discussing criteria for disbursement of the Trust’s funds. She explained that the board has been considering making small amounts of money available to non-profits for their housing efforts. Once the criteria and guidelines have been established, the board will forward these to the organizations that are present as well as others.
Lynn Goonin Duncan began to explain the status of some of the housing projects in Salem. Jenny noted that it would be helpful to have an update of the current housing projects for the October meeting so that the Trust would know when to expect to receive more funds. Jennifer Kolodziej will put together an update for the October meeting.
Lynn Goonin Duncan informed the group that the city is kicking off its Five Year Consolidated Plan process and will be having conversations about community needs and housing needs through a series of neighborhood meetings. City staff can update the organizations on these meetings. She went on to say that it makes sense to invite the organizations that are present as well as others that provide rental assistance and other housing services to the November Trust Fund board meeting when the consultant for the Consolidated Plan will be present.
Adjournment
There being no further business, Leonette Strout motioned to adjourn, seconded by Kathleen Burke, and approved (6-0). The meeting was adjourned at 10:15 a.m.
Respectfully submitted by:
__________________
Jennifer Kolodziej
Housing Coordinator
City of Salem
Department of Planning & Community Development
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