The Policy Analysis Center provides the community with a new capability to provide useful information to community based organizations in the areas of health and human services. Its overarching goal is to improve the community’s ability to conduct analysis that addresses the needs of human service organizations throughout the County.

Considerations in Establishing the Downtown Columbia Community Housing Foundation (DCCHF)

Prepared by the Innovative Housing Institute for the Policy Analysis Center: A Collaboration between the Horizon Foundation and the Association of Community Services, March 2010

1. What are the purposes and powers of the Foundation?

From the legislation (CB58): The intent of this full spectrum housing program for Downtown Columbia is to satisfy all affordable housing requirements for downtown.

The DCCHF must be a non-profit entity organized for the purpose of providing full spectrum below market housing in Downtown Columbia.
This requirement suggests that this new entity will not be a governmental organization; although it is not uncommon for governmental organizations today to establish subsidiary for –profit and non-profit special purpose organizations.

Further the identification of Downtown Columbia circumscribes the area on which this new organization will focus: not all of Howard County, or even all of Columbia, but specifically the area that is subject to the new Master Plan.

Use of DCCHF funds is limited to providing full spectrum, below market housing in Downtown Columbia which may include but is not limited to:

• Funding new construction;
• Acquiring housing units;
• Preserving existing homes;
• Financing rehabilitation of rental housing;
• Providing predevelopment, bridge, acquisition and permanent financing; and
• Offering eviction prevention and foreclosure assistance.

This is a good list that identifies the kinds of activities that might be undertaken by the DCCHF but is not all-inclusive. The more specific legislation to be adopted may add additional uses of the funds and should maintain flexibility so that additional uses not enumerated can be considered and, if appropriate, funded. An interesting aspect of this list is that it includes preservation of existing homes and financing rehabilitation of rental housing, activities that are not likely to be needed in the new Downtown Columbia until sometime in the future. These activities may be needed in other parts of Columbia now, and it may be the intention of the amendment to permit “off-site” redevelopment to count for the DCCHF full spectrum activities. Clarification of this aspect of the language would be appropriate in the DCCHF legislation.

2. What will ensure that homes affordable to the “full spectrum” are in fact created?

Definition of the term “full spectrum” is needed and the proportion of funds generated that serves tiers of income within the full spectrum should be specified. Periodic reporting on the actual income levels of the households served should be a requirement specified in the legislation.

In general, it will cost more for the Foundation to assist households within the lower tiers of income, than those at higher income levels. Since the funding for the DCCHF will trickle in over time this may mean that the limited funding available in the early years of the foundation should be reserved for certain lower tiers of income that are underserved by other Howard County housing programs. In addition the need to leverage the DCCHF revenues with other housing subsidy programs like the Low Income Housing Tax Credit (LIHTC) and Tax –exempt bond financing will impose income limitations on how the DCCHF can be used.

As is discussed in # 6 below there may be ongoing performance expectations or requirements that must be met or the Master Plan is revisited.

3. Who acts as the Board of Directors of the Foundation?

The amendment says that “Howard County, in consultation with GGP, will determine, by legislation the organizational entity, organizational structure, membership, functions, and implementation of the DCCHF.” This suggests that at least two important interests ought to be represented on the Board: the Columbia community that has fought for the creation of this fund to serve the full spectrum; and GGP, which with its successors and assigns is the primary source of its funding, and is to be “consulted” on its creation. Most housing trusts also have a strong if not integral relationship with the local or state housing department that administers other housing programs. Representation from the Howard County Housing and Community Development department would be advisable, as the department will be a critical partner to DCCHF in making housing investments “work.”

GGP and successor master developer and individual parcel developers are also critical to the success of the DCCHF. Their economic interests in the success of the downtown redevelopment need to be balanced with the community’s interest in serving the “full spectrum.”

4. How is the Foundation staffed and funded?

The amendment is silent on this other than to reference providing for this in the legislation. However, administration of a housing trust fund is not a small consideration. There is the administration of a new non-profit entity to consider (DCCHF); the fiduciary responsibility associated with being the repository of the fund contributions; and the negotiation and decision making responsibilities that go with making the trust fund investments in full spectrum housing. The gradual contributions that will be made, based on the pace of development, suggest that the DCCHF might have a similar, gradual plan of existence.

For example, until significant funds accumulate, a volunteer board might govern the DCCHF and no staff be hired. This board would meet periodically and stay abreast of the development activities and opportunities in downtown Columbia. The repository for any funds received could be the Columbia Foundation. They maintain Donor Advised Endowment Funds, for a modest management fee. This may also serve to engender other community donations to the DCCHF as notice is given to its purpose and importance.

After a certain funding threshold is crossed ($3,000,000?), an Executive Director could be hired, perhaps on a part time basis, to activate the trust fund as a source of housing subsidy finance.

Alternatively, the County’s Department of Housing and Community Development could act as the repository and administrator of the funds, and be advised on their use by the volunteer DCCHF Board of Directors.

It should be noted that the consideration of how the funds ought to be invested most advantageously in full spectrum housing requires specialized skills: knowledge of housing finance, available subsidy programs; development process and practices; marketing, income certification, and on-going management. The application of these skills on behalf of the DCCHF may require services to be provided by a consulting organization, the County Department of Housing and Community Development, or the State of Maryland’s DHCD.

5. What are the different ways the endowment funds are able to be used to produce the full spectrum of housing for Downtown Columbia?

Certain uses of the funds are enumerated in the Amendment and listed above under #1. Wisely, the Amendment did not limit the use of the funds to the listed activities but anticipates other unspecified uses that will maintain flexibility and effective use of the funds. Some activities that may be appropriate to specify in the implementing legislation would include the provision of rental supplements, interest rate subsidies or write-downs, provision of housing counseling and education for the residents of the full spectrum housing, credit enhancements, and on-going stewardship to ensure the full spectrum units, once created, remain available in perpetuity.

What ways are likely to be most efficient and productive?

The use of the DCCHF funds to enhance and leverage the application of other housing subsidy and finance sources will produce the most “bang for the buck.” This will require working closely with the County Department of Housing and Community Development and aligning the purposes of the fund with eligibility for other housing assistance and finance programs. Today, most affordable housing developments are made up of a “layer cake” of financial resources: below market rate financing, federal tax credits, and a variety of state subsidy loans and rental subsidy commitments. All of these commitments come with contractual obligations and regulatory agreements that govern the development, the selection of residents, and its operation over time. The DCCHF funding commitment is one more potential part of this complex “layer cake,” and will help improve the public purpose to be achieved.

6. What is the responsibility of the developer (GGP) to facilitate the provision of the full spectrum of housing, beyond the financial contributions required?

The Amendment states that “in order to provide an effective, flexible means of providing a full spectrum of housing for Downtown Columbia , GGP will establish the DCCHF…The intent of this full spectrum housing program for Downtown Columbia is to satisfy all affordable housing requirements for downtown.” This language can be interpreted to place an on-going affirmative obligation on GGP and its successors to meet this expectation through the DCCHF or failing that, through other means. Since the DCCHF pre-empted the application of Howard County’s MIHU law, a burden of performance is an expectation of the language in the Amendment. Presumably, if the DCCHF does not deliver the anticipated full spectrum of affordable housing, the County Council could reconsider this aspect of the Master Plan. If this is in fact the Council’s intention, the required contributions are not simply a “buy-out” but must be accompanied by GGP’s ongoing efforts to facilitate the delivery of the full spectrum within Downtown Columbia. Performance expectations should be made a specific part of the implementing legislation, geared to the payments that are required, based on the pace of development.

What about the developers to which GGP will sell individual parcels?

The Amendment specifies certain notice requirements of intent to sell residential land or units within the new residential or mixed use buildings in Downtown Columbia. It also provides notice of new rental offerings and states that GGP “should involve DCCHF in meaningful discussion with land purchasers in Downtown Columbia in order to encourage full spectrum housing in each and every neighborhood.” While this requirement may be helpful to achieving the full spectrum, it is unlikely to be productive unless GGP makes it a priority to market to non-profits and for- profit developers that specialize in affordable housing and is responsive to their needs for successful affordable housing development.

7. How will the DCCHF interact with the Howard County Department of Housing and Community Development to leverage other housing subsidy funds and to gain access to staff expertise in development underwriting and deal making?

This has been addressed to some degree in #s 3, 4, and 5 above. If the Foundation is structurally independent of Howard County’s DHCD, it will still need to have a strong collaborative relationship with the DHCD for leveraging and deal underwriting purposes. Directive language that addresses this necessary collaboration could be a part of the implementing legislation.

8. What will ensure that full spectrum homes, once created, remain available over time? Who will monitor this and participate at the time of tenancy change or resale? What forms of social and economic support will be provided to the residents in the full spectrum homes to assist them in being successful in Columbia?

This question addresses what is often termed “stewardship” in affordable housing programs. It includes the preparation of households for the full spectrum homes, including educating them on any program limitations such as income certification, equity sharing, or resale limitations. It also fully acquaints them with lease and/or condominium requirements. Presuming the homes are to remain affordable after initial occupancy; it qualifies and maintains a roster of potential new residents. It also may include acting to re-purchase homes at below market prices to maintain the inventory of full spectrum homes, if a prepared purchaser is not immediately available. In some settings, support can be provided to full spectrum residents who have suffered a financial set-back to enable them to remain in their home if they are temporarily unable to maintain their financial obligations.

9. How will the public be assured that the Foundation and Howard County Department of Housing and Community Development are fulfilling the intent of the law?

It is clearly the intent of the Amendment that the DCCHF is in fact a community housing foundation. This should lead to an organization that is transparent as to outcomes, but which may need to maintain confidentiality on deal terms, as is typical in real estate transactions. Establishing public trust by ensuring broad representation from the community and by requiring periodic reporting of activities and outcomes should be a key part of the legislative enactment. The amounts of trust funding committed to each development or unit as well as the public purpose served in terms of income level accommodated, rent or price level achieved should be reported and benchmarked with other affordable housing programs in similar markets around the country.
The Policy Analysis Center was established in 2007 and became operational in June 2008 as a result of a join partnership between the Association of Community Services (ACS) of Howard County and the Horizon Foundation. This unique collaboration was designed to provide the community with a new capability to provide useful information to community based organizations in the areas of health and human services. Its overarching goal is to improve the community’s ability to conduct analysis that addresses the needs of health and human service organizations throughout the County.

The Policy Analysis Center is guided by a Steering Committee co-chaired by Rich Krieg, President of the Horizon Foundation and Anne Towne, Executive Director of the Association of Community Services. Current members include Jim Truby, Shirley Collier, Roy Appletree, Jackie Eng, and Glenn Schneider.

Consideration in Establishing the Downtown Columbia Community Housing Foundation was compiled by the Innovative Housing Institute, 22 Light Street, Baltimore, MD 21202. This document is being used as a reference tool for a community forum in Howard County including Patrick Maier of the Innovative Housing Institute, Ann Forsyth from Cornell University, and Nina Dastur from the Center for Community Change.