Low-Cost Housing Agencies to Merge

In response to a shrinking pool of federal and state money for affordable housing projects, the Rockingham Area Community Land Trust -- which has its headquarters in Springfield -- is formerly transferring the bulk of its properties to a similar organization in Windham County next week.

http://www.vnews.com/05142011/7809563.htm

Published 5/14/2011
Low-Cost Housing Agencies to Merge
By Patrick O'Grady
Valley News Correspondent

Windsor -- In response to a shrinking pool of federal and state money for affordable housing projects, the Rockingham Area Community Land Trust -- a partner in three affordable housing projects in Windsor -- is formerly transferring the bulk of its properties to a similar organization in Windham County next week.

The properties, which include Union Square, Windsor Village and Phelps Court in Windsor, will be taken over by Brattleboro, Vt.-based Windham Housing Trust. Most of the properties are structured as partnerships with Housing Vermont. Four mobile home parks owned by RACLT are not part of the transaction.

The change, in the works for about a year, won't be noticeable to residents living in the affordable housing properties under RACLT, officials from both organizations say.

“It should be pretty seamless for residents,” Connie Stone, executive director of Windham Housing Trust, said last week. “The management agent, Stewart Properties Management, won't change. They are the ones for the tenants, so it is sort of a non-event for residents.”

RACLT's Executive Director Martin Hahn and Nancy Owens, president of Housing Vermont, said the action does not reflect financial problems with the partnerships.

“I can say with certainty they (the partnerships) are in fine financial shape,” Owens said. “Everything with the tenants won't change.”

But Hahn noted that the decision to dissolve reflects a recognition of the changing market for affordable housing projects.

He said an undeveloped property behind the Windsor diner on Main Street in Windsor that RACLT purchased several years ago is an example of how money is drying up for low-and-moderate income housing projects.

“We were denied a (state) grant for that property,” Hahn said. “They were a lot of projects around the state applying for the money.”

“Today there is less money for housing projects and less development activity,” Hahn said. “With such an uncertain future, we were facing a real financial challenge and this was an opportunity for consolidation.

“At the heart, it is a financial decision. We are not seeing a way over time to continue funding our operation,” Hahn said.

RACLT, which controls a mix of single family homes, apartment complexes and mobile homes, was formed in 1989 to provide affordable housing for residents in southeastern Vermont.

The developments use low-income tax credits and tax credits for historic properties to create a limited partnership with Housing Vermont. The tax credits, valid for 15 years, are then sold to investors, typically banks but also include Ben and Jerry's Homemade and Central Vermont Public Service, Hahn said.

“They bring equity, and it is the cash brought to the table that lowers the amount of debt incurred for the projects,” Hahn said.

RACLT specializes in attracting federal and state subsidies and grants, working with investors, putting together bid packages, complying with historic requirements, executing contracts, supervising construction and budgeting. It receives income through “development fees” for putting projects such as Union Square together, Hahn said.

Hahn said they have not had any new projects since he arrived a year and a half ago but have sufficient funds to complete the transfer of their assets to Windham Housing.

Windham cited other reasons for RACLT transferring the properties to under its control.

In a press release last month, Windham said “high executive turnover at RACLT over the past 15 years, combined with the economic downturn, had taken a toll on the organization and the board realized that its residents would be best served if Windham Housing Trust were to get involved.”

Hahn said RACLT's board will remain for another year.

“We are stronger by two organizations becoming one. That became clear with the economic downturn and fewer resources for affordable housing.”

Windham Housing Trust's affordable housing units will increase to 714 from 464 with the consolidation.

“We could only do this if we knew our financial stability could be enhanced and we had the staff,” Stone said.

Three of RACLT's four employees will be hired by Windham Housing. Hahn said he is moving on to another opportunity.

He said the RACLT board has entered into discussions for the sale of its four mobile home parks, which will not become part of WHT's portfolio.

There is a tentative agreement for sale of the Bunker Hill Mobile Home park in Windsor to a newly formed resident-owned cooperative. The other parks are in Bellows Falls, Springfield and Ludlow.