Housing Authority Spin-Off Takes Shape

Markeshia Ricks Photo Well aware that the Trump administration isn’t likely to boost funding for public housing, the Housing Authority of New Haven (HANH) is pursuing other income sources to diversify its revenue, including property management fees.

The authority has set up several not-forprofit affiliates to generate more cash. The first, the decade-old Glendower Group, redevelops obsolete units into desirable affordable housing, for both public and private entities. Now, a new spin-off, 360 Management, will keep those properties and other privately owned complexes in good shape.

Karen DuBois-Walton, HANH’s executive director,previewed the idea for 360 Management this February. The details of the operation took shape on Tuesday, as the Board of Commissioners approved a budget for the next fiscal year.

“The genesis of this is that the public housing program, which has been the heart and soul of the housing authority, has over time been defunded. The federal government has really moved away from its commitment to the public housing program, and it’s just not feasible to maintain the properties on the small amount of rent that people people pay and the subsidy,” DuBois-Walton explained.

Most of the new funding will come as HANH converts its strictly publicly owned housing over to federally subsidized units. That’s done through the Rental Assistance Demonstration program, or RAD, a U.S. Department of Housing and Urban Development (HUD) effort created by the Obama administration. RAD allows authorities like HANH to obtain Section 8 “project-based” subsidies (tied to a housing complex, not a roving tenant) not just for facilities owned by private, for-profit developers, but also for its own not-for-profit entities, like Glendower. In flipping the properties, HANH can also obtain enough money from tax credits and investors for upkeep.

“Our choice, at that point, is to put out solicitations for someone to come in and manage those properties or we could build our own company for management,” DuBois-Walton explained.

She chose the latter for a couple reasons.

“We feel like we have mastered a way of management that respects our residents. … We weren’t sure that we could solicit and get that same management model out on the private market. And secondly, we had a desire, as we move and reduce the workforce on the housing authority side, to preserve jobs. We have a tremendous workforce. On the private market, I could make some asks, but I couldn’t guarantee [work for] our employees. Here, in the affiliate, I have control of that,” DuBois-Walton explained. “We’re preserving what we want to do for our residents and for the folks that are subject to reorganization here. 360 seems to be the best way to do that.”

If it establishes a strong track record, the not-for-profit could win it business from other developers. Property management is “quite a growing field,” she added.

The not-for-profit, which is still waiting on its official certification from the Internal Revenue Service, will have a staff of about 40 employees, including a yet-to-be-hired vice president. Rather than duplicate HANH’s existing operations, 360 Management will purchase services from the authority, particularly accountants to manage its finances.

HANH approved a $2 million loan, which will be repaid over five years, to get the affiliate going. “That will provide the initial cash flow before rents and subsidies start flowing,” DuBois-Walton explained.

The not-for-profit’s first project, expected to begin in early 2018, will involve taking over maintenance of four HANH properties that house seniors only: Constance B. Motley, Katherine Harvey Terrace, Newhall Gardens and Prescott Bush Mall. Those were selected first because the upkeep there needed is minor, compared to some HANH properties that are slated for demolition.

By the fiscal year’s end, 360 Management is expected to have 800 units under its purview. Eventually, they will need to manage 1,700 units to break even, said Diana Smith, HANH’s chief financial officer.

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posted by: denny says on September 22, 2017  9:03am

No good can come of this.

posted by: southwest on September 22, 2017  10:47am

Which properties are slated for demolition?? How long will it take to rebuild the demolition ones and is HUD going to help out since Trump is in ??

[Chris: Westville Manor and Valley Townhouses are planned for redevelopment.]

posted by: Noteworthy on September 22, 2017  12:04pm

A government taxpayer paid for operation should not be spinning off businesses - and growing its empire. It’s the freaking government. It’s business is public housing. Period. Stick to your lane - don’t take over the highway.

posted by: robn on September 22, 2017  12:41pm

By accepting federal dollars and then overpaying for construction (to the tune of a half million dollars per unit) HAHN has single handedly overinflated construction prices in NHV. They are hurting far more people than they are helping.

posted by: GroveStreet on September 22, 2017  2:25pm

So local government is becoming a gentrification vampire? That is truly not a good thing.

posted by: Bill Saunders on September 22, 2017  2:30pm

Who are the ‘principals’ in 360 Management???

[Chris: As the story says, no VP has been picked yet. The selection process is currently underway.]

posted by: THREEFIFTHS on September 22, 2017  4:31pm

posted by: GroveStreet on September 22, 2017 2:25pm

So local government is becoming a gentrification vampire? That is truly not a good thing.

That is true.In fact Across this country the gentrification vampires are buying up the public housing.Look at would they are doing In New York.Trust me New Haven and Other Public housing will be doing the same.

Why New York’s Housing Projects May Be on Their Way out

“I’ll know the projects are changing when the first hipster applies for admission,” said April Simpson-Taylor, as we sat together on a bench at the Queensbridge projects, where she has lived most of her life. April, whose heritage includes African-American, Native American, Mexican, and “other stuff,” remembered when “a lot” of white people lived in the QB. “When I was a little girl, we had Irish, Italians, Jewish people. All those different cooking smells in the hallways. They were just some other people in the building. I never noticed them until they were gone,”
This made Simpson-Taylor “project royalty,” because, as everyone knows, Queensbridge isn’t just another pj. Located on the East River in Long Island City, the QB, home to 7,000 or more people on 50 acres, is the largest public-housing project in the country. Built

http://nymag.com/news/features/housing-projects-2012-9/index5.html

Part One.

posted by: THREEFIFTHS on September 22, 2017  4:51pm

Part Two.
NYCHA To Sell Stake in Some Public Housing to Developers

It sounds like NYCHA is getting the most out of this deal but here’s the catch: when the developers upgrade the apartments, they’re able to receive from the federal government the difference between market rate rents and the rents housing-authority tenants pay, which is about 30-percent of income, WSJ reports. Under the deal the developers will also be able to sell tax-exempt bonds and federal tax credits for the next 30 years, after which the apartments could theoretically be converted to market rate if NYCHA is on board.

Where No One Thought Gentrification Would Go. Luxury Towers Are Rising in the Projects
In February, the New York City Housing Authority (NYCHA) announced a plan to lease space in the footprint of eight Manhattan housing projects to real estate developers. They will put up market-rate housing, with 20 percent set aside as affordable. Typically, New York buildings adopt this 80/20 split in exchange for participating in a state-financing program. In this case, it will be mandated. Five of those projects are in Alphabet City or on the Lower East Side, including the Smith Houses, where the land being taken is a parking lot on the area’s eastern border. The new high-rises would steal the views of some current residentsThe NYCHA infill plan is part of a radical experiment: Putting market-rate housing in the projects.

https://nextcity.org/features/view/where-no-one-thought-gentrification-would-go

New haven is now in stage two of Gentrification.

My bad.Like I said before.if you want to see where New haven is going.Read this Book My two good freinds wrote this book.May they RIP.

City for Sale: Ed Koch and the Betrayal of New York
WAYNE BARRETT and Jack Newfield.

Today’s reformer is tomorrow’s hack,” Brooklyn boss Meade Esposito used to say.

http://www.nationinstitute.org/featuredwork/books/1287/city_for_sale:_ed_koch_and_the_betrayal_of_new_york/

posted by: new havener on September 22, 2017  10:26pm

Say what you will, but irrefutable is the fact that Walton has changed the complexion if the Housing Authority’s inventory of property. This has been a blessing for both the city and the residents, and kudos to her for having the prescient ability to see around the corner and keep the ledger positive.

Everything KD-W does has turned to gold. The Midas touch!

posted by: THREEFIFTHS on September 23, 2017  10:41am

posted by: new havener on September 22, 2017 10:26pm

Everything KD-W does has turned to gold. The Midas touch!

It has turn to gold.Like I said NYCHA To Sell Stake in Some Public Housing to Developers.Trust me this is on the way here for Public Housing.

posted by: FacChec on September 23, 2017  12:00pm

This program definitely sounds like a hoax; Presently HUD pays the HANH a section 8 project based voucher based on 70% of the living cost plus maintenance. The tenant pays 30% of their income down to zero, if no income. The tenant rent is recertified every two years. If the NHHA cannot maintain its maintenance budget with 70% HUD assistance, just how will the NHHA be able to subcontract out the maintenance function and expect to turn a profit, especially since Ben Carson, is seeking to reduce the federal subsidy to local housing authorities.

The HANH has to do a better job with vacancies, semi-annual inspections, maintenance, tenant turnover, grounds upkeep, crime, lack of police protection and many other basic living improvements before it can successfully sub out the maintenance and expect to make a profit.

Be mindful of the fact that the NHHA does not pay property taxes, nor do they make a pilot payment to the city for it’s more than 3,000 tax free units.

[Chris: Interesting points. One note to remember is that HUD routinely underfunds its operating subsidies. This year, it met 90 percent of its obligations, creating a $2.1 million shortage for HANH on that side of operating expenses. To put that in context, each of HANH’s 2,365 units received $670 monthly on average, a total of $19 million from the feds. HUD also contributed $3.9 million for capital projects.]

posted by: LookOut on September 23, 2017  5:47pm

great post PacChec - think about how much better the city revenue levels would be if all of these units were in the hands of real owners.  Instead, they become part of this bloated gov’t program where the building rot away.

posted by: robn on September 23, 2017  7:33pm

At $500K a pop, it means HAHN is asking other taxpayers to pick up the bill for $43M in property tax dollars. Think about it.

posted by: Noteworthy on September 25, 2017  1:53pm

360 Management doesn’t exist according to the CT Sec of State’s office. Who are the principals?  Where’s the operational address? Who is getting paid? Staff?