A Big Win for Massachusetts Affordable Housing and Nonprofits | City of Ideas
Andrew Spofford (at left), Chief of Staff for POAH, receives the Grand Prize award from Tom Bledsoe, CEO of Housing Partnership Network and a member of the competition advisory committee.
Credit goes to: Home Funders
Home Funders' approach has been to strategically intervene in the local affordable housing financing system and to provide incentives for developers to include extremely low income (ELI) units within their affordable housing developments. Home Funders products have offered significantly discounted, flexible loans for acquisition, predevelopment, bridge and permanent financing through two intermediaries: Community Economic and Development Assistance Corporation (CEDAC) and Massachusetts Housing Partnership (MHP). Since 2003, Home Funders has successfully helped to increase the overall supply of housing for Massachusetts' homeless and lowest income families - with over 1,197 new ELI housing units created or preserved during its first decade. The collaborative has raised over $21 million for lending purposes; this capital has revolved to yield over $48 million in loans to affordable housing projects.
Also, Home Funders aims to raise awareness among public officials and legislators about the ongoing need for ELI housing and the public resources that are necessary to increase its supply.
And that brings us full circle to the Home Funders Innovation Competition, which was launched in November 2015 to spur new attention, intervention, and solutions to increase the supply of ELI housing for families. The competition sought to encourage a wide range of stakeholders, including housing producers, municipalities, nonprofits, quasi-public agencies, and others, to propose strategies that would lead to increasing ELI housing.
Nineteen individuals and organizations entered the competition, and when the dust settled in April, Preservation of Affordable Housing, Inc. (POAH) had come out on top and secured the grand prize of $20,000.
What did POAH propose that won the competition?
- A new State Donation Tax Credit (DTC) within the existing Massachusetts State Low Income Housing Tax Credit (SLIHTC) program, modeled on successful programs in only a few other states.
- Per the POAH proposal, the DTC would provide a credit against state income tax liability to property owners who donate existing housing to qualified nonprofits. The nonprofits, in turn, would commit to keeping the housing affordable over the long term, per SLIHTC requirements.
- The savings in each housing project that utilized DTC would then be used to add ELI units in the property. POAH estimates that these DTC strategies could support conversion of 15-30 percent of a DTC project's units to be affordable to extremely low income households without needing additional operating subsidies.
Now though, we can change the tense on how POAH's proposal would work, because its no longer speculation. On August 10th, Massachusetts Governor Charlie Baker signed the program into law, as part of the Economic Development bill.
Congrats POAH, and congrats Home Funders! Keep up the good work for Massachusetts families in need of sound housing.