Housing Money Choice | New Haven, CT Patch
By Thomas Breen, New Haven Independent
June 17, 2022
Should the city spread tens of millions of dollars in federal pandemic-relief aid across a hodgepodge of housing, vocational technical education, youth engagement, business support, and climate resiliency initiatives?
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Or should it spend a bulk of that money in a concentrated effort to buy rental properties away from megalandlords and subsidize New Haven’s most struggling tenants?
Alders heard both arguments while deciding how to allocate $53 million of the city’s one-time Covid-relief bounty.
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Those questions sat at the center of a workshop that the Board of Alders Finance Committee held on Monday night in the Aldermanic Chamber on the second floor of City Hall.
The workshop marked the second public meeting that the Finance Committee has convened so far about Mayor Justin Elicker’s proposed $53 million spending plan for pandemic-relief aid that the city is receiving through the federal American Rescue Plan Act (ARPA).
That $53 million proposal — which the mayor and top city officials first unveiled in January — represents by far the largest spending plan that the Elicker Administration has put forward to date for the $115 million in ARPA aid coming to the city.
If approved by the full Board of Alders, the city would have around $19.5 million in ARPA aid left, all of which would have to be allocated by the end of 2024 and spent by the end of 2026. (Click here, here, here and here for articles about the roughly $43 million worth of ARPA-aid spending plans that have already been proposed by the Elicker Administration and approved by the Board of Alders. And click here to read the slide deck presented by city officials at Monday night’s meeting.)
The ensuing discussion and debate among city officials and affordable housing activists Monday night about this $53 million proposal revealed more than just a difference in opinion on which particular programs should be funded with this particular pot of money.
The meeting also surfaced a more fundamental, philosophical difference between the two groups regarding how a typically cash-strapped local government should act when presented with unprecedented one-time funds.
Should it break that aid up into a bunch of smaller buckets and try to chip away at a mix of persistent social, economic, and environmental problems?
Or should it target one big issue and throw as much money as possible that way with the goal of making a transformational impact in that area of public and private life for generations to come?
City officials made the pitch for the former approach, as they outlined spending $14 million of the $53 million tranche on such housing initiatives as downpayment assistance for new homeowners, rental help for struggling tenants, and a new “land bank” for blighted properties.
An affordable housing activist urged the alders to take the latter route, as she and several advocacy groups called for spending $62.5 million of ARPA aid on buying rental properties directly from megalandlords and on subsidizing housing costs for 1,000 tenants on the Section 8 rental subsidy waitlist.
“While $115 million sounds like a lot, for what we need to do, it’s really not enough funding” to address all of the issues that New Haven is facing, City Budget Director and Acting Controller Michael Gormany told the committee alders Monday night. “We’re really looking at spending this money in the most efficient way possible.”
Thus the mayor’s proposal to spread this $53 million tranche across a mix of programs related to wealth creation, public space improvements, youth centers across the city, affordable housing support, vo-tech education planning and new programs, and energy efficiency upgrades, among other efforts.
While $115 million sounds like a lot, he repeated, what that money mostly does is “get us at a great starting point for what we need to do.”
Camila Guiza-Chavez, an organizer with the Sisters in Diaspora Collective and a co-director of the local immigrant and refugee job training program Havenly, offered a different take later in the night.
“Our proposal is to spend $62.5 million of American Rescue Plan funding on making a meaningful, serious effort to confront the housing crisis that we have in New Haven,” she said.
“This is a historic grant to recover from the economic effects of Covid,” she continued. Too often, the city does not have enough money to make substantial investments in addressing seemingly intractable problems.
With this ARPA aid, “actually, we do have money here to talk about. … This is a chance to really make a statement with the money” that New Haven has received from the federal government.
The committee alders didn’t take a vote on the mayor’s $53 million spending plan on Monday.
Rather, as Finance Committee Chair and Westville Alder Adam Marchand explained, the committee intends to deliberate and vote on the proposal during its next meeting on July 11.
The ARPA spending proposal would then head to the full Board of Alders for a final debate and vote later this summer or fall.
City Proposal: $14M For Homeowner & Renter Support, Land Bank
Most of Monday night’s three-hour-plus Finance Committee meeting saw various city department heads detail the exact programs that the Elicker Administration’s $53 million spending plan would fund.
As Gormany explained at the top of the workshop, this tranche of spending would be broken up into seven large buckets.
Those would include $10 million for “Youth Engagement & Early Childhood,” $10 million for the “I’m Home Initiative,” $10 million for “Wealth Creation & Economy,” $8 million for “Vocational & Technical Initiatives,” $5 million for “Climate Emergency,” $6 million for “Public Health & Infrastructure,” and $4 million for a new “New Haven Land Bank.”
Everyone from Deputy Health Director Brooke Logan to City Engineer Giovanni Zinn to Youth and Recreation Department Director Gwendolyn Busch-Williams to Community Services Administrator Mehul Dalal to Director of Arts, Culture & Tourism Adriane Jefferson took turns before the committee to talk through how exactly the money would be spent — including on new digital food service thermometers for the Health Department, and on capital improvements for all 100-plus city parks and public spaces, and on Creative Sector Relief Fund grants for local arts nonprofits, and on subsidies for local childcare providers, and on the development of a strategic plan for potentially creating a new vo-tech school. Among many other efforts.
Click here and here to read about the $53 million spending plan in full.
City Economic Development Administrator Michael Piscitelli and Livable City Initiative (LCI) Executive Director Arlevia Samuel took the lead on explaining the $14 million in housing initiatives included in this larger $53 million proposal.
Samuel said that $10 million in “I’m Home” initiative funding would go towards such program as:
• Expanding the city’s current downpayment assistance program for first-time homebuyers from $10,000 to $25,000 per grant.
• Creating a “Below Market Registry” and searchable inventory of affordable apartments in New Haven and in surrounding communities, to help New Haveners know exactly where so-called “naturally occurring affordable housing” exists locally and in the surrounding area.
• Bolstering the city’s homeownership development program, to allow LCI to acquire and develop more single-family and two-family affordable homes both on its own and with nonprofit partners.
• Establishing a new security deposit assistance program, which would provide income-eligible applicants with up to two months of rent to help cover the costs of security deposits that come with moving into a new apartment.
• Hiring new “program navigators” to help city residents find out about and apply for a host of existing affordable housing support efforts.
“All of our programs are designed to increase affordable housing, affordable homeownership, affordable rentals, housing security and housing assistance,” Samuel said.
In addition to that $10 million “I’m Home” suite of proposals, the city would dedicate another $4 million towards creating a new “New Haven Land Bank.”
Piscitelli said that this $4 million allocation would help set up a new publicly-created entity that operates outside of city government, and that can buy up blighted and foreclosed properties, fix them up, and then sell them at affordable prices to local homeowners.
“Land banks are an extension of what we do today” with LCI’s acquisition, rehabilitation, and disposal of properties across the city, he said. The state recently passed a law allowing municipalities to set up quasi-public land banks, and Hartford and Waterbury have already done just that.
“It’s very hard for us to be competitive in the marketplace,” Piscitelli said, because of how long it takes for the city to get the necessary local approvals to purchase a property. Usually, after all that time has passed, a private investor with loads of cash on hand has already bought up the property the city is interested in.
Piscitelli said that such an entity would also be able to raise private money from philanthropic foundations, which city government can’t currently do.
“We have not formed a new entity in many, many years,” Piscitelli said. Such past examples include the port authority and the parking authority.
He said the $4 million included in this ARPA proposal “would allow us to build the planning documents, the organization and budgeting strategy” for a new land bank. He said the land bank should be able to get up and running within a year, if the alders approve such an endeavor, and it should be able to acquire roughly 20 properties with this initial allocation of funding.
How long would the land bank be allowed to hold a property before selling it? Board of Alders President and West River Alder Tyisha Walker-Myers asked.
If the land bank has 20 properties and can only sell five over the course of a year, she asked, what happens then?
“That’s the real balance,” Piscitelli said. The land bank would have a “carrying cost” for holding onto empty properties, just as a bank does for foreclosed properties — and just as the city does for properties LCI owns and rehabs.
He said that the Hartford Land Bank currently has two employees, and is hoping to hire a third. “They’re always warming the plate for a pipeline of new homeowners,” he said, making sure that they have applicants in line and cleared for all of the approvals and financing they need in order to buy a home in Hartford. That way, when the land bank takes over and rehabs a property, he said, they have a homeowner all lined up to buy it at an affordable price.
How successful have other land banks been, across the state and across the country? East Rock Alder Anna Festa asked. “What is their data? What are they experiencing?”
“We haven’t done a full canvass” yet, Piscitelli said. He said that the Hartford Land Bank sold nine properties last year, and has sold 40 in total. “Given that the state law is actually pretty new, that’s a pretty good early track record.” He also said that New York State “has a really good success rate with land banks,” and offers a national model for how to do this type of program well.
Would someone looking to buy a property from the land bank be able to tap into the $25,000 downpayment assistance program detailed by Samuel earlier in the night? Edgewood Alder Evette Hamilton asked. Are there any other incentives to buying a property from the land bank as opposed to from anyone else?
Yes, Samuel replied, “the downpayment assistance at LCI would be available to” homeowners looking to buy from the land bank.
And will the land bank work directly with financial institutions on buying up foreclosed properties? Festa asked. “It’s a competitive market out there,” she said. The reality is that “the seller’s going to want to sell at a top price.” How will the creation of a land bank help small-time homeowners compete against cash-flush megalandlords in this hot housing market?
“The land bank will be purchasing the property,” Samuel said. Then they will sell the property to homeowners. “It wouldn’t be the homeowner competing against the megalandlord,” she said. It would be the land bank competing against the megalandlord.
Towards the end of Monday night’s meeting, Guiza-Chavez got a chance to make her pitch to the committee alders as to why they should spend $62.5 million of ARPA aid — and not just $14 million — on affordable housing initiatives.
Even though Monday night’s meeting was not a public hearing, Guiza-Chavez was able to address the alders because the Sisters in Diaspora Collective has submitted a resolution to the Board of Alders detailing their proposal for how the ARPA funds should be spent. (Click here to read a previous article about a recent rally the group held outside City Hall in support of their ARPA spending proposal, and click here and here to read op-eds written by members of the group in support of their plan.)
Guiza-Chavez said that the Sisters in Diaspora Collective — backed up by a host of supporters from such groups as New Haven legal aid, the Room for All coalition, Mothers and Others for Justice, New Haven Rising, the Dixwell Community Management Team, and the Party for Socialism & Liberation — has proposed spending $62.5 million of ARPA aid on two large housing-specific programs.
First, $50.5 million would go towards buying up existing residential buildings in the city and preserving them as “public property to be used as affordable units.”
One option, she said, is to “buy from mega corporate landlords” who have increasingly consolidated their control of New Haven’s low-income housing market in recent years.
One such portfolio of apartments is currently on the market and up for sale, she pointed out. That is, earlier this year, the megalandlord Ocean Management announced that it would be selling 399 apartments across 101 different local properties for a total of $52 million.
“We’re trying to think about long term,” Guiza-Chavez said. “How can we make an investment that can be felt in the long term?” Buying up these hundreds of apartments and preserving them as publicly owned affordable units would make exactly the kind of long-term, substantial impact on New Haven renters’ lives that it needed, she said.
She noted that a recent city Affordable Housing Commission report found that 54 percent of New Haven residents spend more than 30 percent of their income on rent. She also said that at least 400 people, but likely many more, sleep on the street in New Haven every night because they do not have a home of their own.
She called on using $50.5 million buy up as many rental properties as the city can because “we believe housing is a human right. Because you can’t live a life without shelter. It’s an essential need, and we believe that our government should ensure that everyone has their basic needs being met.”
The second spending proposal put forward by Guiza-Chavez and the Sisters in Diaspora group Monday night was to spend $12 million of ARPA aid on monthly rental subsidies for roughly 1,000 families who are on the waitlist for local public housing and for the Section 8 federal rental housing subsidy program.
“There is an extreme shortage of units available through the Section 8 and public housing programs, which means that thousands of us wait for five, 10, or more years before our names get pulled from a waitlist,” the group’s January letter to the alders reads. “There is currently no support for those of us on waiting lists, no plan for how to help the thousands of us who will not have access to subsidized housing for years. This subsidy would be undoubtedly transformative for many, many people in our community.”
“We urge you to seriously consider what we’re saying,” Guiza-Chavez said as she wrapped up her presentation to the committee. “Because there is a housing crisis in New Haven, and housing is a human right. We hope to be partners in thinking through how to really implement these proposals. We will continue to be here. We will continue to organize and turn out and confront this issue as a community.”
Marchand thanked Guiza-Chavez for her presentation. He said that the group’s proposal is “something that the committee members will review and consider” as they pick up with their deliberations and vote on the matter at next month’s meeting.
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