PowerPoint - Low Income Housing Preservation Training

7/29/2019 PowerPoint - Low Income Housing Preservation Training

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Early Warning Signs

How to Assess the At-Risk Housing

Developments in Your Area


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Identifying Distressed Properties

1. Declining REAC inspection scores

2. Strategic Disinvestment

3. Excessive Evictions4. Foreclosure

5. Expiration of Project-Based Subsidy Contracts

6. Storm Damage


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1. Declining REAC Inspection Scores

Background on REAC inspections

Obtaining score data

Obtaining inspection reports What is a good score?

Often a lagging indicator

Example


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2. Strategic Disinvestment

Definition

Can be a precursor strategy to empty building

Source is often anecdotal reports from tenants Aggregating anecdotal accounts is key

Early advocacy here can help preservation

efforts later. Example


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3. Excessive Evictions

Concentrated eviction activity in one building

with the goal of emptying the building

Zero Tolerance-like evictions

Example


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4. Foreclosure

Legal process by which government or other

lien holder can initiate the sale of property in

default on debt obligations

Not common in New Jersey

Can trigger certain tenant protections and

incentives for preservation of project-based

subsidies.

Example


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5. Expiration of Project-Based

Subsidies & Other Agreements

Non-renewal of project-based subsidy

contracts

Prepayment of mortgage

Expiration of Deed Restrictions and/or

Use Agreements

Obtaining data on federal contracts, deedrestrictions, use agreements, etc.

Examples


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6. Storm Related Damage

Problem of growing significance in Post-Sandy

New Jersey.

Example


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Case Studies

Carmel Towers, Zion Towers, and

The Regency


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Case Study: Carmel Towers


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Location: Newark, NJ, South Ward, WeequahicNeighborhood, Overlooking Park

Built: 1966

Size: 246 Units, 185 federally-subsidized Owner: 440 Elizabeth Ave. Corp., Inc.

Mortgagee: NJHMFA

REAC Scores

11/25/2004: 81c* 12/20/2006: 38c*

08/19/2010: 18c*


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Subsidies Involved:

HUD: Section 236 Interest Reduction Payment

Mortgage maturation date: 10/27/2011

HUD: Rental Assistance Payment, Project-Based

Rent Subsidy, a/k/a orphan program

Contract expiration date: 07/31/2011

Why was there a problem: RAP contract expiration + low REAC + little explicit

contract renewal authority for HUD (no RAD)


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How was problem discovered?

Notices sent to tenants

Sept. 2011 HUD notice RE: vouchers for tenants

October 2011 Landlord Notices to Quit

Concerns about lack of relocation funds and

tenant ability to relocate with vouchers

Key role of tenant organizers


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Strategies: Tenant Organizing

Tenant Meetings

City Council Meetings

Elected Officials

Media

NYT article Community Legal Education

ENLS & CSJ

Media

Preservation Organizing Recruited prospective preservation buyers and connected them with HUD, NJHFMA and

city officials

Outcome: Building largely vacated in course of six months.

Still lies dark and vacant, a year later.


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Pluses and Deltas

Pluses

Media involvement made more people

interested/aware, both locally and nationally One of several similarly-situated orphan program buildings

across the country that created impetus for RAD program.

Large turnout for tenant meeting: 150+

Short-term contract expirations by HUD gave some

tenants extra 4-5 months.Created more local background knowledge on potential

preservation buyers in NYC metro area.


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Pluses and Deltas

Deltas

Challenge: Learned of tell-tale signs too late--declining REACscores and RAP contract expiration.

Delta: with greater understanding of the law, could have usedpublicly-available information and directed scarce tenantorganizing efforts and community legal education efforts towardthe building. Once notices are issued, it can .

Challenge: By the time the contract expired, tenants were

fed up with the poor conditions in the building and ready totake a voucher

Delta: with more advance notice, could have started organizingtenants earlier to demand habitability improvements andpreservation.


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Pluses and Deltas

Deltas

Challenge: NJHMFA was the mortgagee, but did little overthe years to ensure that their property was being

maintained properly. Delta: should have put more pressure on NJHMFA to not let the

property fall into disrepair.

Challenge: Local, state and federal elected officials failed torespond to inquiries by tenants; those who did were told by

HUD that there was nothing that could be done. Delta: needed to simply the law and clearly communicate to

them that what they were being told by HUD was wrong and thebuilding was preserve-able, if there was will.


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Case Study: Zion Towers


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Location: Newark, NJ, South Ward, WeequahicNeighborhood, Overlooking Park

Built: 1968

Size: 268 Units, 242 federally-subsidized Owner: Zion Towers Realty, LLC

Mortgagee: NJHMFA

REAC Scores

10/31/2002: 57c* 07/07/2005: 57c*

07/14/2010: 58c*


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Subsidies Involved:

HUD: Section 236 Interest Reduction Payment

Mortgage maturation date: ?

HUD: Rental Assistance Payment, Project-Based

Rent Subsidy, a/k/a orphan program

Contract expiration date: 05/01/2013

Why was there a problem: RAP contract expiration + sub-60 REAC

Recent purchase, rumblings about refinance


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How was problem discovered?

Notices sent to tenants

Meetings held with tenants RE: possible closing of

building, vouchers being provided

Informal networks within HUD and NJHMFA that

had developed during Carmel Towers incident

Key role of tenant organizers


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Strategies: Tenant Organizing

Tenant Meetings

Long history of tenant advocacy for better building conditions, reasonable rents

Leveraging relationships w/ government officials Relationships within HUD, NJHMFA, City Hall were outgrowth of Carmel Towers situation

FOIA Work Requests for information on REAC inspections, RAD conversion applications

HUD Data Review of HUD data for expiring orphan program contracts flagged this building as at-risk

Joint study of problem / coalition building / info sharing HTC, LSNJ, ENLS, CSJ, ICC, etc.

Outcome: New ownership group is in the process of applying for a RAD conversation

whereby tenant vouchers would be project-based on pre-payment.


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Pluses and Deltas

Pluses

Strong relationships with tenants and tenant organizationensured that advocates were aware of the problem early.

Critical mass of tenants also invested in remaining in thebuilding and participating in RAD conversion

Relationships with government officials helped advocatesstay informed as the process was unfolding.

FOIA work helped better understand whether and how theRAD program was being administered.

Coalition building helped advocates learn and shareinformation more quickly.


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Pluses and Deltas

Deltas

Challenge: while there was a better relationship with

tenants and they generally had a stronger group, theydidnt let us all the way into their meetings or share lots

of documents provided to the tenants.

Delta: Minor point, but perhaps greater trust-building would

have helped here. However, with a preservation-minded

ownership group, triage made this less of a priority.


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Case Study: The Regency


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Interactive Discussion:

Distressed Property

Low/Declining REAC Scores


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Distressed Property

Pull latest REAC scores from HUD website

Pull latest HUD data on HAP contract for bldg

Reach out to local HUD office

Reach out to NJHMFA, as appropriate

Reach out to tenant association if any

Reach out to bldg owner/counsel

File FOIA/OPRA requests for physicalinspection reports, correspondence, etc.


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Orphan Building

Low REAC


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Orphan Building

Pull latest REAC scores from HUD website

Identify mortgage maturity date(s)

Pull latest HUD data on RAP contract for bldg

Search county deed office for use agmts Reach out to local HUD office

Reach out to NJHMFA, as appropriate

Reach out to tenant association if any

Reach out to bldg owner/counsel

File FOIA/OPRA requests for physical inspectionreports, correspondence, etc.

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