Marin County Affordable Housing Crisis

Marin County Affordable Housing Crisis
By Lynda Carson July 28, 2004

As the nation's Section 8 housing crisis spiraled out of control since April 22, 2004, Marin County has been facing it's own worst crisis since the affordable housing movement got started there back in 1968 by the Ecumenical Association for Housing (EAH).

This latest crisis began on June 30th, 2004, when affordable housing developers of Marin were notified that the HUD Region IX office has required the Marin Housing Authority to terminate one part of it’s Section 8 program, known as the Project-Based Vouchers (PBVs).

Effective immediately, the PBV cuts affected 14 nonprofit organizations operating 30 affordable housing developments containing a minimum of 200 households of the most vulnerable residents of Marin County that are among the poorest of the poor and disabled communities.

According to Jennifer Puff, the Executive Director of the Marin Continuum of Housing and Services (The Continuum), which is the sponsor of transitional housing at the former Hamilton Army Airfield of Marin, she say's, "No one saw this crisis coming! It shocked us all. We may have expected a few cutbacks here and there to come, but nothing of this magnitude. Some of these projects took up to 20 years to bring about! The homeless situation in Marin is as bad as it is in San Francisco, and these affordable housing projects are so crucial to helping people that are homeless or at risk of becoming homeless."

EAH has been at the center of the crisis from the begining and Marin activists Marion Brady and Renee Ruskin made it to a July 14 meeting with members of EAH and other housing developers involved in the crisis, and both described the meeting as being fraught with concern as they all tried to figure out the best approach to determine which projects are at most risk due to the funding shortfalls created by HUD.

Later that same day on July 14, the following alert was released from Betty Pagett of EAH and it helped to clarify the situation created by HUD, and explains in detail how this crisis is affecting the affordable housing projects of Marin:

* The termination was virtually without warning. HUD is allowing no “cure” period for alternative arrangements to be made.
* The cuts fall on the most vulnerable residents among the already economically disadvantaged Section 8 population. Marin Housing steered PBVs to the neediest projects, most serving special needs and extremely low-income senior residents.
* HUD is not hearing from the housing providers, and is treating Marin Housing as a bad actor.
* This is the largest single crisis to hit affordable housing in Marin, affecting 14 nonprofit organizations operating 30 affordable housing developments. PBVs provide excellent financial “leverage”. Not only are approximately 200 households directly supported by PBVs, but overall financial feasibility for many of these developments is threatened because Section 8 rental subsidies are needed to make mortgage payments.
* Two major new developments totaling 75 units are immediately threatened, if resolution isn’t found within days. These projects are in the process of closing construction financing, which is impossible now that Marin Housing has cancelled its commitment at the last minute. The loss of the 18 promised vouchers threatens to derail the two developments, which together comprise $23 million of financing, and nearly 20 years of work to garner community approval.
* In response to HUD’s demands, Marin Housing is converting the PBVs to regular tenant-based vouchers, so existing tenants can now take them elsewhere. But if tenants leave, the projects cannot make up the lost cash flow without substantially raising rents – which will change the tenant mix, putting the housing out of reach for others of extremely low income. Also, a third new development planned to start next year lost 10 promised PBVs.
* HUD’s action is purely local; it has nothing to do with pending national Section 8 budget cuts. But if those budget cuts come, they will fall on these extremely low-income, senior and disabled PBV residents.
* Tenants in the developments with PBV’s are able to take advantage of on site services not funded by the voucher program. These programs are able to assist seniors, families and people with disabilities to live independently with some support. HUD’s proposed change threatens these programs.
* The previously scheduled retired of Marin Housing Authority’s Executive Director is a strong reason for a period of time for HUD and the Housing Authority to work out difficulties without a disturbance to tenants and programs.

Since the EAH July 14 alert went out to the public the Marin Housing Authority put out their own press release on July 16, and in part it reads;

Marin Housing Authority managers recently met with representatives of 14 Marin nonprofit housing agencies to announce changes in the "Project-Based" component of Marin’s Section 8 Housing Choice Voucher Program. "The good news is that this will not affect any tenants who currently have a project-based Section 8 voucher—they will not lose their assistance," reported Acting Executive Director Marilyn Carreras. "We will be converting all existing "project-based" vouchers to "tenant-based" vouchers, effective August 1st. There is no impact on current tenants since this conversion is an internal accounting procedure." The difference, according to Carreras, is that in the future the voucher will belong to the tenant and will move with them, rather than being permanently attached to the property where they currently live.

"Although this may seem like a minor distinction, it actually has significant ramifications," explained Maurice Wolohan, Acting Deputy Director. "The nonprofit housing providers have relied on these project-based Section 8 commitments to guarantee the long-term financial viability of their projects. The commitments help ensure their ability to operate the housing facility and serve their clients while maintaining a steady income stream. The tenants in these projects are very-low-income residents, many with special needs—including developmentally disabilities, mental illness, battered spouses and clients transitioning out of homelessness." In the future, according to Wolohan, with their project-based vouchers converted to tenant-based, the residents will be free to take their voucher and relocate to another property if they so choose.

Barbara Collins, affordable housing strategist for the County, added, "One of the challenges will be for the nonprofit housing sponsors to find ways to retain their tenants who currently have vouchers, and avoid them choosing to leave and live elsewhere." According to Collins, some residents may opt to leave at the end of their current lease, but many will stay because these projects provide a variety of supportive services for their residents in addition to the housing. "And it may be possible for them to come up with some additional perks and incentives to retain their current residents."

Roy Bateman is the Community Development Coordinator for the Marin County Community Development Agency, and had this to say, "Marin County has a competent and caring Housing Authority, and their use of project-based Section 8 vouchers to support non-profit housing is
good public policy and an efficient use of government funds. Non-profit ownership is the surest way to guarantee permanent affordability in a high-priced housing market. The Housing Authority has made some technical and procedural violations, which need to be addressed. I am
hopeful that a solution can be worked out which does not jeopardize the financing for the development of the Hamilton Transitional Housing and the Pt. Reyes Apartments."

A partial break in the crisis occurred in late July, when HUD rescinded part of it's July 1st decree that terminated funding for the programs, and Betty Pagett of EAH say's, "As of July 22, HUD working with the Marin Housing Authority and housing and service providers and at the urging of local advocates and legislators, has ruled that transitional housing is a legitimate use of project based vouchers and that the two new construction developments can move ahead. The Housing Authority is submitting waivers of competition and new AHAP agreements which will proceed through HUD approval processes in time for the construction loans to be signed with only a few more weeks delay.
 
The now crucial need is to restore the 200 vouchers terminated by the HUD action. Any new vouchers would be issues under the new approved plan. To terminate current vouchers and ask that they be re-issued under the new plan is to essentially deny them because of the upcoming budget limitations. Most of the 200 serve extremely low income seniors and persons with disabilities. Even if the current residents receive tenant based vouchers, when they leave future residents will not be able to be served at those income levels, or programs will have to close," Pagett said. 
 
“We are very hopeful that HUD will understand the vital reason for restoring these vouchers so that we can continue to provide homes for the most vulnerable and needy among us. That is the whole reason for the program, “ said Betty Pagett, Director of Education and Advocacy, EAH, the non-profit that manages the largest number of threatened project based vouchers in Marin County.

As this complicated crisis between HUD, Marin Housing and it's local affordable housing developers continues and unfolds, we will try to keep an eye on any future developments and hope for the best for the community at large and all of those that may be involved.