County Commissioners Grapple with Needed Affordable Housing

By Leslee Kulba- Mountain Housing Opportunities came before the Buncombe County Commissioners to present plans for East Haven Apartments in Swannanoa, with a request for a $2.2 million loan. Commissioner Mike Fryar did not like the way the item came on the agenda, saying commissioners not in the loop, as well as Interim County Manager George Wood, did not see the proposal coming.

Chair Brownie Newman said the matter met all requirements to be put on the agenda and told Fryar he should talk to the commissioners he faulted personally, rather than putting invited presenters in an uncomfortable situation.

Proposed was 95 units of affordable housing near the Ingles store on US 70. The project began as a 40-unit complex, but grew after an adjacent parcel was acquired, and grew again after the county implemented its Community-Oriented Development plan to allow greater density for affordable housing in locationally-efficient areas.

Presenter Cindy Weeks said to her knowledge, in the two years the program has been in effect, she believed East Haven was the only beneficiary.

The total cost of the project was estimated at $16.8 million, other funds having been raised with state and federal tax credits and loans, including $75,000 previously matched by the county. Weeks described the current ask as similar to other requests the county has granted MHO for large projects, like Larchmont, Glen Rock, and Eagle Market Place.

Interest would accrue at 2%, and payments on principal would be deferred 20 years. Weeks explained the generous terms were needed because, in order to clinch a couple loans, MHO had to lower rents below levels that would generate enough income to pay down principal. MHO hoped to get funding in time to start construction in March.

Renting between $257 and $697 a month, the apartments would be “permanently” affordable to persons earning 30%, 50%, and 60% of AMI, and ten units would be set aside for veterans. Onsite amenities would include a laundromat, playground, community room, computer center, and fitness room. Weeks said MHO typically starts taking names of applicants two to three months before a project is completed.

The names are kept on file, then each applicant is contacted and assisted with filling out forms and assembling all necessary documents. Weeks recalled one person who was pleasantly surprised to receive a call five years after submitting his application for the “very delayed” Eagle Market Place.

Speaking of which, Fryar said, “Eagle Market Place was a disaster, any way you want to look at it, OK?” Fryar then told how, in order to get a certificate of occupancy in time to receive grant funding, MHO had supplied one room with sewer and water, and didn’t bother to provide lighting or carpeting. By way of contrast, he said the City of Asheville won’t issue a certificate of occupancy for anything the county constructs until after a sidewalk is installed. He said MHO had plywood in lieu of a sidewalk, “and I’ve got pictures in my office of that whole package.”

Fryar ascertained that the residential portion of Eagle Market Place had cost $18 million, That was after many false starts, a cracked foundation, a reduction in the number of affordable units, and a separation of the project into a residential and a commercial portion. In a later conversation, Fryar said Wood, contrary to expectations, had held up awarding county funds for the commercial portion until the terms for their release were met. Now, Fryar was doubtful the county would be repaid for loaning $2.2 million.

Commissioner Joe Belcher had spoken to people at MHO before about using subsidized construction as a launch pad to, colloquially, get people “up and out” of poverty, or moving up the housing ladder. It made more sense for the county to invest in affordable housing if people were using it like a revolving loan, than to build a permanent home for everybody that didn’t know how or want to navigate the housing market.

Weeks told about MHO’s Path to Equity that does just that. MHO even has a Self Help Homeownership program where residents in their rentals build their own homes. Specifically for tenants at East Haven, MHO would be offering credit repair and improvement clinics, opportunities for residents to learn about local options for homeownership, and quarterly homeowner preparation sessions that would be open to the general public.

The commissioners who balked at granting the funds immediately argued they couldn’t just hand out $2.2 million to anybody who asked. Even Newman admitted the county had limited resources, and the commissioners had a responsibility to use taxpayer dollars as wisely as they could. Fryar wanted MHO to apply for its grants with all other applicants per the county’s schedule for outside agency funding. Newman, however, said the various funding cycles of grantors had to be considered as well. Fryar noticed MHO representatives had attended a recent commissioners’ meeting and not said a word about their urgent $2.2 million ask for this five-year-old project.

“I would say if we’re going to be the last one in, it’s probably not a bad idea going forward to be the first one asked,” said Belcher. MHO, he said, was doing a good job reaching out to state and federal funding sources, “but ultimately, you’re going to come to us, I think, on every project.” After Weeks concurred, Belcher said he wouldn’t have run to be a commissioner if he didn’t think he could hold up under pressure, but giving the county only 30 days to find a spare $2.2 million in its budget was an avoidable stressor. “I’m not negative toward the project; I’m negative toward the process and having to deal with it a few weeks before the deadline.”

The commissioners supported coming up with a process for evaluating affordable housing proposals, which they had committed to supporting as a strategic priority, outside of the budget process. Newman said staff already has a process; what the county lacked was a commission liaison. He suggested setting up a commission subcommittee as was done for another strategic priority, early childhood education. Residential construction subsidies consume a significant share of the county’s budget that is not state-mandated. For example, the commissioners approved $4.2 million for Lee Walker Heights, plus awards for organizations working on projects for the homeless.

Belcher pointed out MHO had come before the commissioners with many big-ticket items in the past. This was not going to be their last time, and, even though they have a stunning success rate, this should help them streamline preparation. Concurring, Whitesides did not want the commissioners to endure a round of confusion anytime somebody presented a proposal for subsidized housing, which the commissioners are soliciting. “It appears we’re doing this by the seat of our pants,” he said.

Wood was confident staff could pull together an analysis of MHO’s proposal and at least a first draft of a policy for reviewing requests for housing subsidy by the commissioners’ February 5 meeting. “This is a good project,” said Belcher. “It’s in a good area. It’s just we’re trying to deal with coming in and asking for $2.2 million in the middle of everything else that’s going on.”

Speaking of which, following a closed session, Ron Payne, outside counsel for the county, recommended the commissioners approve settling with former assistant county manager Jon Creighton’s attorney for $189,000. Payne said the amount should “make the county whole” for what could be recoverable in the existing lawsuit pertaining to an ongoing federal investigation of former county management. It also represented a limited release, so should more losses be discovered at a future date, the county could pursue additional civil litigation. The funds were expected to be transferred by the end of the month.

Also by the end of the month, Payne expected the county would have funds from a $750,000 settlement with former county manager Dr. Wanda Greene. Funds could not be readily transferred because she has been prohibited from entering into financial transactions of more than $10,000 without the approval of her probation officer and attorney. Payne said the county had already begun the process for obtaining those approvals. The total recovered from the former county managers to date was $3,067,000.

In Other Matters –
The county’s ten-year contract with Waste Pro for hauling residential refuse and recycling in unincorporated areas will expire at the end of 2019. So, the commissioners gave staff the go-ahead to launch an RFP process. Following research into best practices in the industry, staff developed a plan to require submissions to include a model for subscriber pickup and one for comprehensive service. The county now has subscriptions, giving citizens the ability to opt out; but Wood and Solid Waste Director Dane Pedersen said comprehensive service for all 53,000 households in the unincorporated areas would be more cost-effective.

Wood said the RFP process was being pursued because it allowed more flexibility to contract with companies other than the lowest qualified bidder. Pedersen said the RFP was designed to identify industry innovators, and he believed language in the contract was sufficiently strong to prevent somebody from bidding low and asking for more funds later.

Wood also said the county would be looking at past performance and contracting with an organization in a financial position to increase manpower and equipment as needed. The contract also includes a system of performance metrics and penalties for noncompliance, so, Wood said, cause for dismissing a company would be documented. Performance bonds will be required, so, should the county want to exit an agreement, it could “grab the performance bond” to provide seamless service until a new contract is signed.

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