THOMAS R. GLEASON
Manual ‘has some holes’
An organization representing local housing authorities has started training public housing officials in monitoring, overseeing and conducting lotteries for housing built under the state’s so-called anti-snob zoning law, a move that has alarmed some developers and agencies who fear that the training is seriously flawed.
The Massachusetts chapter of the National Association of Housing and Redevelopment Officials, which represents 267 local housing authorities and municipal development agencies across the state, started offering the training to its members in January. The organization has been conducting two-day training sessions each month for up to 14 participants at a time throughout the state, according to Tom Connelly, executive director of Massachusetts NAHRO.
Connelly explained that the group started the training seminars because members were being approached by local zoning boards and other officials to play a role in mixed-income housing developments built under the state’s Chapter 40B law.
Many housing authority officials are familiar with Chapter 40B and how housing lotteries and the comprehensive permitting law work, having developed affordable housing developments, he said.
“We see ourselves as helping the local folks through these 40B deals in a way that’s very advantageous to the communities,” said Connelly.
But developers and members of the Home Builders Association of Massachusetts argue that the training the local housing authorities are receiving is inadequate and that they lack expertise in the permitting, financing, building and marketing of housing built under Chapter 40B.
They also say cash-strapped housing authorities – who may see monitoring and housing lottery activities as a revenue-generating mechanism – should follow the regulations, guidelines and procedures that have been put in place by funding agencies for Chapter 40B developments.
And some are critical of Massachusetts NAHRO for aggressively promoting local housing authorities as “experts” in affordable housing development and pushing local boards and officials to select them to conduct monitoring activities and affordable housing lotteries.
“Our concern is whether they have the technical ability to serve as monitoring agencies within this slightly different sphere of affordable housing, which is 40B,” said Mark Kablack, an attorney who is co-chairman of the homebuilder association’s Chapter 40B Committee.
Kablack said if housing authorities aren’t following standards and guidelines established by agencies that fund Chapter 40B projects – such as MassHousing and the Massachusetts Housing Partnership – and create their own processes, housing developers will be forced to understand new sets of rules on a town-by-town basis.
That will ultimately be very “destructive” of the Chapter 40B program, said Kablack.
“We believe they [housing authorities] can have a role in serving as monitoring agencies in this sphere and assisting municipalities in that role but we want to make sure they proceed in accordance with the regulations, guidelines and procedures that have been put in place by the funding agencies under Chapter 40B,” he said.
‘Better and Better’
Benjamin Fierro, who serves as counsel to the homebuilder association and is a partner in the Boston law firm of Lynch & Fierro, said the training manual that Massachusetts NAHRO is providing to housing authority officials lacks critical information and minimizes the role that the state Department of Housing and Community Development and agencies like the Massachusetts Housing Partnership and MassHousing play in monitoring activities.
Housing developers that have agreed to certain conditions set by a local zoning board of appeal and local housing authorities may find that they conflict with state regulations, explained Fierro.
But Connelly defended the training and said Massachusetts NAHRO is working with DHCD and MassHousing to update the training manual to ensure that it is in compliance with any regulations and guidelines.
“Even our training sessions have changed dramatically since January,” he said. “They get better and better.”
MassHousing Executive Director Thomas R. Gleason, which funds 40B projects and also oversees projects funded through the Federal Home Loan Bank of Boston’s New England Fund, confirmed that the agency is currently reviewing the training manual, which it saw for the first time about five weeks ago.
“We think the manual has some holes in it,” Gleason said last week.
MassHousing is involved in selecting the monitor for projects funded through the New England Fund. And when a community issues a comprehensive permit including conditions that try to move certain responsibilities from the project administrator to a local entity, MassHousing tries to work with the city or town to change the permit, Gleason said.
“We’re willing to designate a portion of the oversight to a local entity but we can’t have those conditions supersede our responsibilities or obligations,” he said.
Gleason added that there is “a role for local housing authorities in the monitoring process of 40B.”
“But I think it’s very important that everyone play by the same set of rules. It should be transparent to the builder of the affordable housing what monitoring is being done. They need to know if they build in Acton or Boxboro or Framingham that the same rules are going to apply no matter where they are. And that’s what we’re striving for,” he said.
The training and actions of some local officials prompted DHCD Director Jane Wallis Gumble to issue a memo in late April to housing officials warning them not “to impose conditions in a comprehensive permit that impinge on the regulatory responsibilities of the subsidizing agency.”
“Accordingly, ZBAs should not impose any conditions that specify how cost certification, project monitoring or the sale or rental of affordable units is to be performed, or by whom those tasks will be performed during the period the subsidizing agency retains regulatory oversight. If local officials have specific concerns about state oversight of 40B developments, we are fully prepared to address them directly,” she wrote.
Weeks after the memo was sent, Massachusetts NAHRO responded by sending out its own notice vowing to “continue to provide our members with the information and education they have requested in order for them to continue to be effective managers of affordable housing and an active player in the local 40B process.”
“A local housing authority is an entity that has a longstanding place within the community, is accountable to a number of federal and state entities, is transparent in [its] business practices, has conducted lotteries and is familiar with local housing needs. The local housing authority should be the one-stop shop for all activities related to the development, oversight and management of affordable housing within a local community,” the memo stated.
Monitoring agents and those who perform housing lotteries are paid by the developers. The Citizens Housing and Planning Association and other nonprofit and regional groups have been acting as monitoring agents for years.
CHAPA has been monitoring on behalf of zoning boards and state agencies like MassHousing for more than five years.
Aaron Gornstein, CHAPA’s executive director, said his organization, as a monitoring agent, reviews the housing lottery and marketing plan. Housing lotteries are conducted to select households that will either purchase or rent the affordable housing units being constructed. Once the buyers or renters of the affordable housing units are chosen, CHAPA certifies that those households are indeed income-eligible under the state guidelines.
In addition, CHAPA reviews audits outlining a developer’s costs and revenue once a project is built.
If a purchaser of a below market-rate home decides to sell or refinance, CHAPA coordinates the process to ensure that the home remains affordable and isn’t sold at market-rate prices and that any new loan doesn’t exceed the restricted value of the home.
As a monitoring agent, CHAPA adheres to a number of state rules and policies, according to Gornstein, including guidelines that were issued in February 2003 for projects funded under the New England Fund, and more recent rules issued by the Massachusetts Housing Partnership last November.
Gleason said before MassHousing approves a monitoring agent, the agent must agree to abide by those guidelines. But he said he has heard concerns that the MHP guidelines – which all state agencies follow – “weren’t being fully embraced by local monitoring agents.”
MassHousing established some general instructions on the audit review process, but again Gleason said he has heard complaints that local monitoring agents aren’t following those instructions.
In addition, some critics are concerned because local housing authorities want to conduct the lotteries while also acting as monitoring agents. They say households who are selected in a lottery should be reviewed by an independent party, and the developer should be able to choose the lottery agent.
“The developer should have the right to choose who the lottery agent is because it’s a major component of the development process,” said Judy Epstein, a consultant with JTE Realty Assoc. in North Andover. “It’s the developers’ capital that is at risk.”
Epstein, a member of the homebuilder group, was recently hired by a developer to do a lottery. She was going through the typical process of getting town approval for the marketing plan she submitted when town officials insisted that Epstein go through a process of competing to be the lottery agent.
Even though the developer had already designated her as the lottery agent, town officials made it clear, she said, that they – not the developer – would be choosing the lottery agent.
While reviewing the lottery process, CHAPA does not conduct the actual housing lotteries. Gornstein agreed that there should be a third-party independent review of applicants who are seeking to live in the affordable housing units.
“We feel there should be a separation of those functions. That’s why we did not want to get involved in the lotteries,” Gornstein said.
And Gornstein said CHAPA believes that developers should have a choice in selecting who will conduct the lottery.
“The developers hold the liability and they pay for the service,” he said.
