Travis County Commissioners Court
September 12, 2006
Item 29
Number 29 is to receive report on the lease purchase program and other activities of strategic housing finance corporation and take appropriate action. Ainchts good afternoon, judge. Judge Biscoe, members be of the court, for the record my name is wiley hopkins, the director for the housing authority of Travis County. I'm delighted to have been delighted to come before you -- invited to come before you today and discuss and brief out items that you've requested, judge, specifically to talk about the lease-purchase program that was initiated about 22 months ago. And secondly, another project that the housing finance corporation has been involved in in the last 12 to minutes. And lastly, we want to talk to you about and brief you on the housing programs that the housing authority's involved in and also give you an update as to any audits that we may have had or oversight from any governmental entities. As a prerequisite, I would like to introduce to you staff and others that will be speaking to you today and giving insight as I discussed earlier. To my left is bill Friday. Bill is my executive assistant, executive director and chief financial officer for the housing authority tovment my direct left is keith holpower, he's the director of development and also director for housing and development for the housing authority of Travis County. To my immediate right is darla kin dell. She's the lease purchase administrate four the lease-purchase program and she came aboard about nine months into the program, and I'm delighted to tell thaw we are very pleased to give you this update today that you will be getting from the lease-purchase program and other programs.
>> what the beginning date of the program?
>> October -- October 13th, 2004.
>> the second year anniversary coming up?
>> yes, sir.
>> ms. Kendall has been here a little less than half of that.
>> that's right. And to my far right is mr. Cliff blunt. I am delighted to tell you that we did receive local recognition as well as national recognition on the lease-purchase program. It's recognized as a very innovative program and we're pleased where we are at today on that program. Having said that, I will ask ms. Kendall to go over in your binder, you have some information as to what has occurred towp date as far as production goes, but I'll ask darla to also tell you a little bit about how she got started in the program and what obstacles she may have encountered, some testimonials that are numerous of happy people that are participated in this program that we would like to bring that to you in more detail at a later date. And also tell you about how we anticipate proceeding with this program in the future based on the interest and demand that we've encountered. Having said that, darla?
>> I would like to tell strategic how grateful I was that they put into my trust to take over the program. I was a little reluctant because it had been a failure for nine months, and I do live in dallas and I felt it would be a lot of work. But I also know the program. My mom in california is on her fourth set of bonds running that program. I know the program works. I've seen it and I've heard about it. So I was very eager and just decided we were going to jump in. We were going to take it from the wrong track and put it on the height track and see what happens. And I want to let you know that the real estate community lives this program. -- loves this program. I've trained over 400 realtors. We started out three or four at a time and then my training classes became full with 60 or 70 agents. The agents took the prak through the marketing -- the program through the marketing that we trained them on and they've done an outstanding job. The builders jumped on board. So with all of us working in tune, we have closed 125 125 homes. We have -- I have an updated pipeline. We've had seven properties come in the last two days. We have 23 pending. So we have a total of 16,005,316 in sales, be and pending. And to see the process and tiksed in the momentum that has occurred and you can see through the pipeline, had we had a six-month extension that I believe we requested, why would this pipeline, it was denied, I could not answer that question. I believe that we would have hit the mark.
>> I'm not sure I understand the part about the six-month extension?
>> this program ends October the 31st. We have to close our final home by the 31st of October.
>> you are going to do what now?
>> the lease-purchase program ends October the 31st.
>> 2006.
>> yes.
>> if I might interject, judge. We requested a six-month sfrengs freddie mac, which is the secondary market --
>> I thought we had denied it.
>> no, sir. We had an option to request an extension from the purchaser and secondary market. Freddie mac for whatever reason has chosen not to give us that extension, which we certainly feel based on the pipeline and the activity that make up that seven months that we lost that we would probably 100% utilize the program. Having said that, we've looked for alternative measures and programs to continue on in lieu of freddie mac being a purchaser in the secondary market fannie mae. Ms. Kendall has contacted several investment groups, commercial banks, saving banks, that are interested in providing a line of credit to purchase these loans rather than creating another bond issue as we did in the past, a different mechanism. And she can speak in a little bit more detail to that. But we feel that is an alternative to the six-month extension that was denied because our board and the community certainly has embraced this program. We'd like to see it continue to go forward. Do you have any comments in that area?
>> yeah. I just can't tell you what we have seen over these months. Families that have come into the program that in fact were always going remain renters unless something dramatic happened. So we're able to take the families and put them into debt management, get them on the right track for the fico scores, allow them to go out, pick the home of their choice at today's prices, move into the property, feel as if they are the owner, get the credit fixed, supply the down payment, sly the cloation costs, provide them down payment and they're in the system for 39 months. Their principal and interest is being purchased down every month as part of their lease. So it's a win-win situation for everyone and they truly appreciate it. Our closings at our office are hugs and kisses, unlike I've been a realtor for 25 years, I'm a broker. It's been a wonderful experience to be part of, and I truly believe that the lease purchase program is the answer for families who are not ready to be homeowners. And it helps keep them out of the hands of crirts and lending. -- creditors and lending. There's a lot of education. They don't just qualify into the program. This isn't easy to get qualified. It requires that they do certain -- take certain steps on their own initiative to make sure that they ultimately are successful at the end of 39 months. So when they have done that and they are in the home, they are extremely happy and I know this program has benefitted the community.
>> let's back up to the six-month extension request. What reasons did freddie mac give for turning it down?
>> we fell on deaf ears.
>> we did not really get a response as to why they were not willing to give us --
>> is it too late now to renew the request for extension or do we think it's pretty much --
>> we pretty well think it's a nil deal as far as moving forward with that particular aspect of it. That's the reason we hope in the next 60 days that we'll have a mechanism just to move forward basic wli the investors being portfolioing the loans in their own institutions rather than relying on the secondary makt to purchase the loans.
>> that is what we are looking at right now. There is a new program out there. This program is is in california --
>> don't get ahead of me, though. So freddie mac did not formally respond to your request?
>> that's correct, sir. So we took the lack of a response as being a negative answer.
>> that's correct, sir.
>> without an extension the program expires am at the end of oblght. October.
>> yes, sir.
>> and we issued how much in bonz?
>> $35 million, which after cost of issuance, round numbers are 32,000,500 for originations.
>> so we have to eat the cost of issuance no matter how much we use.
>> can you speak to that?
>> the cost of issuance were paid out of the bond proceeds and there was a party that took the risk on that. So neither Travis County nor strategic housing finance corporation really paid any of those cost of issuance. It was all borne by other parties.
>> lrt. Then why didn't we have the $435 million then? The 35 million we end the up with 32.5.
>> there are also some he is crows that were set fowp various and sundry items. I forget exactly what they were. I didn't double-check it, but there were some maintenance he is could you crous that were set newspaper case the maintenance wasn't taken care of, the properties and some lost rents, he is crows were taken up. There was some insurance policies purchased, so all that money, while it wasn't available for originations necessarily the whole 35 million that was used for either program expenses or hold backs to make the program run smoothly over 39 month origination period.
>> so do we know whether freddie mac as a matter of routine denies requests such as the ones we make?
>> I don't know that as a matter of routine? Do you have any knowledge?
>> I don't know it was a matter of routine, but I believe there were a couple of programs in california that requested an extension. May have not been anything recent, but they were granted the extension based on the pipeline. So we're not recreating a wheel. We know that we could request it. But we can't go past it.
>> this is a federal program. That's what federal officials are for. I mean, I'm --
>> a mandate, yes.
>> I give them an opportunity to help. In the background there is this i.r.s. Ruling, and I guess the smoke hasn't quite cleared on it yet.
>> that's correct.
>> but I guess I'm trying to get to, so whatever we can use by the end of October is good. Whatever is not used we have the balance of the money on hand. Because we issued all the bonds, right?
>> that's right.
>> so my question then is what kind of i.r.s. Impact will there be on the balance of the $35 million after October 31st? Any?
>> there's not an i.r.s. Impact. The funds that aren't dwriewd originate loans will be used to pay off bonds.
>> okay. So the program that we had in mind, the balance has to retire bonds.
>> unless something gets in place by October 31st for some type of extension.
>> what kind be of restrictions are on that? That's something we need to look at, right?
>> that's being pursued. As mr. Blunt stated, the bond proceeds that are there are to continue to pay the bond holders' interest that is for the term of the bonds.
>> but if you use the money to retire the bonds, you don't have it there for another program.
>> I'm not of the opinion that the money is is for the retirement of the funds, aind stand 'to be corrected, but the money is is there to pay the interest to the bondholders until the terms of the bonds are concluded.
>> that's a good question, right?
>> yes, sir. I believe --
>> you don't have to answer today, mr. Blunt.
>> I will double-check that and get back with you. At some points those funds which are not used to originate mortgage loans, the principal amount will be used to reduce principal amount and bonds. I'm not sure if that happens in December if we don't extend by October 31st. At some point the funds that are used to originate floanz the lease-purchase program will be used to pay bond holders back.
>> a big legal quevment.
>> I'll get you an answer.
>> who is bond counsel on the issuance?
>> it was andrews and kurth.
>> have they been paid in full?
>> yes, sir.
>> all the professionals were paid at closing out of the cost of issuance.
>> here's my next question, I guess, and I'll be done on this little part. The Commissioners court approves the issuance by the corporation of 35 million. What our role in that?
>> two roles. Number one, the bond issue wabld required a tefra approval for federal purposes, which y'all do like for Travis County housing finance corporation. Also because Travis County is a sponsoring jurisdiction for strategic housing finance corporation, you gave approval for that. Bond issuance.
>> let's say that we use 20 million of the 35 million less two and a half. That leaves 12 and a half million dollars. So what role does the court have in the ultimate disposition or use of that 12 and a half million dollars? By law.
>> it will be used according to the original bond documents, like I said, to eventually pay off bonds unless somebody -- did I not understand your question?
>> that part's easy. But the board has other ideas. The board's notion is is that we may be able to use this money to fund a similar program and achieve the same public benefit, or do you?
>> we never did give any indication or direction to the board. I don't know where that --
>> mr. Hopkins then has -- [overlapping speakers].
>> I think efforts are being made to save those proceeds to make use of them under this program. And it will just depend on how successful they are whether they're used e and I don't know if recycled, but continue to be used in this program.
>> but my point, I guess -- and I understand what the judge's saying, but I'm still not comfortable as far as looking at the situation as far as fannie mae is concerned. For whatever reason they didn't understand or give you -- didn't give you an extension of six more months. From what I'm understanding there's nothing I guess in writing to tell us why they didn't extend it six additional months. And I guess my question now is why isn't anything in writing and can we get anything in writing from if fannie mae to find out why you didn't get the extension? If I'm hearing everything right, you didn't get the extension. And of course at the end of the day I'm trying to figure out why.
>> freddie mac is the entity. And yes, we inquired several times, both telephonically and e-mail and dnts receive anything from a written form from them regarding what you're asking.
>> you've inquired of fredty mack.
>> yes.
>> we're talking about not one of us, but somebody like congressman lamar smith or lloyd doggett or mccaul. Because it doesn't benefit them one way or the other. It seems if we could use the rest of the funz if we're granted a six-month extension, then it seems to me that we ought to at least make our best effort because it creates a few problems for it with the balance. I thought I heard you say that we hope to use the balance to fund a similar program and do good. You're saying that the agreement is is to take the balance and retire indebtedness?
>> what we're looking for is to find a different mechanism to fund a program, which is not --
>> different funding.
>> yes.
>> that makes since. I heard cliff say we've got to retire the bonds based on covenants and I thought you were saying we've got another program in mind, let's try to get it done. Then that makes my recommendation simpler. And that is we really ought to contact our federal representatives and see if they can help because except for complooig with the law, I don't think there's any benefit to freddie mac or any disadvantage. But if you've still got that i.r.s. Issue pending, and they may see this as an extension of a problem than a way to resolve it.
>> we'll follow your direction. I think it's worth while to pursue it.
>> it's a suggestion.
>> a suggestion, yes, sir. Correct me. We'll contact those parties.
>> it sounds like that would be -- that makes sense. Have you to close the books on projects eventually.
>> it sounds like we haven't gotten a full airing of what the situation is here. During the entire year of 2005, 23 loans. Well, that's pretty modest. But in 2006, and we're not even through 10 months, there's 118 that have closed or are fixing to close. And if freddie mac is indeed wanting to do more to make home ownership available to all citizens of the community and not simply one demographic, 55% of these loans are going to african-americans and to hispanics. Some of those folks are in categories by freddie mac's own statistics are showing kind of a red lining of certain minority groups that are not able to get access to home mortgage notes. So that seems to fly in the face and it seems like some of our federal representatives would be more than interested in trying to see those kinds of numbers reversed and with a positive balance sheet of what's happened in 2006. Now, if the question is one of it's the i.r.s. And they don't want to extend questions raised about whether this program has i.r.s. Questions about it, that's a different thing, but to not get an answer back I think it's worth pressing. And if the answer is is norks the answer's no. But if it's yes, clearly we've got a track record here.
>> your points are well taken and n I agree with them. The momentum is is there. It's certainly serving the public pirp which fredty mack was created for. And we'll pursue that. I think you've touched on a very sensitive earks the i.r.s., and no doubt that's probably fwhak the background in some regard on a national big scope or basis. But still they should sthai to us.
>> they should put it in a letter as to what's the deevment.
>> you may have something here in the backup and I haven't run across it, but can you tell me of the closings and the homes that have been moved in by the applicants, can you tell me whether or not if they were new residences or were these homes new? Is there a breakdown as stuff? You maif it here and I may have overlooked it, but I'd like to know what that answer is as far as a new home versus one that's used. And I think it's applicable to both. If I remember, it can be used or new. Did you break it down as such?
>> I do not have is this break down with me. I can tell you that a good majority of the homes purchased are new. The builders have been wonderful as far as giving us the incentives. Although they're preferred lenders did purchase allocation, that 12 and a half million that has not been used, they had 12 12 million and the builders' lenders never got it off the ground. They did not close any of these loans. But they saw that -- they allowed us to go ahead and bring another mortgage company, by all these purchasers to their on-site and they did not take away incentives by not using their mortgage company. That helped.
>> now, there has to be -- this is the third in my criterion set forth by those persons that are occupying the homes. Criterion meaning that you have to look and reside here at least 39 months within that particular dwelling. When will the first indication of any of these things come to pass to see where we're on on that as time progresses? Thootion why I'm interested in the extension stuff because the program -- can anyone tell me that, when we actually have not a ribbon cutting situation, but a situation where we can satisfy it's working 39 months be and some of the criteria we're looking for and these persons have been here 39 months, so they would be able to owe reap and receive the full benefits of not leasing, but tweel be purchasing. Can you tell me where we were on that?
>> I think if I understand the question, the key it at the end of 35 months how many will be converted to consumption of that home. To me that's too far out to forecast what's going to occur. That's the goal of all of them that's in the program to convert a one-time assumption.
>> our first assumption should occur sometime around June or July of '08.
>> okay. But right now folks that are in the program are holding course and still involved and they haven't developed out of the program as of today. Am I hearing that correct in.
>> that's correct.
>> we have had three families fail the program.
>> pardon me?
>> we've had three families fail the program, and what we saw is is it happened early o it's not as if they were in the home for a long period of time. It's as if they got into the home and they failed almost immediately. Those properties we have put other lease purchasers in there. They qualified for the program and we moved them in. They take over the equity position should they take the opportunity of the home ownership at the end of 39 months. So answer your question a little bit more, something will happen, and I can't tell you the exact figures. But with the six-month extension, less families were going to qualify for the program because the recovery fee which goes back to the bond, they have to absorb -- you have to help me out on this. They're going have to absorb more in the recovery fee, so less people will qualify incomewise because the payment will be higher. That is the down side of the extension.
>> it would be good if we could have heard -- I don't know.
>> and there is another program out there.
>> we can still try to do something.
>> I would like to have an answer from freddie mac. We have been on deaf ears --
>> so all things considered, is the extension preferable or is the October 31st, 2006 termination preferable?
>> from our perspective, the extension extension would be preferable, but in the interim time we feel ilg its incumbent that we continue to lay bricks and mortar towards having a substitute for the extension.
>> let's say we're not able to get the extension, the program expires October 31st, 2006. And there are 10 failures come what are the time is. So we find ourselves with 10 homes. So where do we go from there?
>> we still have the reserve accounts to continue making payments on the loan until we get other owptz, if that's an option, or to sell the property.
>> we true to find other home buyers.
>> yes, sir.
>> and failing that we basically try to sell is it to whoever we can?
>> that's correct, sir. If you have no other questions concerning the lease-purchase program, I would like to move into the other programs.
>> I have one. What's the average size of the houses?
>> the square footage? Do you have that?
>> we don't have an average square footage. I have an 'average sales prievments.
>> I've got that.
>> we're kind of all over the board. If they could afford 85,000, that's where they go. If they can afford 160 thu, that's where they'll choose.
>> I'll say based on the purchase price you're looking at 12 to maybe 1800 square feet, somewhere in there, which is the size of a start hoarm. Starter home.
>> for those who aren't starters. [ laughter ]
>> what's the difference between the average sales price and average sales close?
>> the average sales price is the sales price reflected on the contract. And the average price closed is whatever they eventually may negotiate or work down to. Or if there are additions added to the home.
>> would it be closer to the sales price? Page 3 behind tab 1 is.
>> I believe that the calculation on the sales price takes into account those contracts that are pending, and the actually price -- average price for the ones closed just includes those that have closed.
>> that's correct. Everything is on the pipeline. The average sales price changes on a daily basis. Some months it's lower, some months it's higher. It depends on what's closed.
>> the next item on the agenda was other projects that the strategic housing finance corporation are involved in. We've included in that report under tab 2 some other items outside of the hfc that the housing authority is is doing on a development side too. So you will hear some of that. And dr. Keith holpour is going to take you through the particular development goals and be activities. Keith?
>> thank you. What I'd like to do is read our development goals to you and into the record. It's the goaflt housing authority for Travis County and its subsidiary entities, to improve the quality of life for the residents of Travis County by providing assistance programs and affordable properties that will facilitate that improvement. Development activities meet this goal by providing a safe, decent, sanitary environment for improved quality of life. Many of these developments will also provide education nal, social, nutritional, medical and transportational services to the residents. By providing these services and encouraging their use, additional opportunities are offered that can better the quality of life for those we sferb. It is also a goal of the housing authority's development activities to develop or acquire properties in locations that do not lend themselves to concerns regarding the concentration of affordable developments in a particular part of the community. The primary development entity for the housing authority is the strategy housing finance 'corporation of Travis County. Our mission is is to serve a broad spectrum of populations and income groups who are underserved by the community. Our development should not be based upon income, but also with regard to populations at various stages of life and ability. Seniors and persons with special needs are examples. Manor town apartments, a seniors community recently completed in manor, Texas, is just one example of this commitment being put into action. It's incumbent upon this organization to own properties that are financially sound. We will seek out opportunities that will provide the necessary cash flows to maintain properties in a narn does not serve as an example whaf the public often envision whz hearing the term affordable housing and provide funds to assist in future housing development. The housing authority's sweetwater apartments located in wells branch serves families with a broad spectrum of incomes. In addition to meeting the mission of the housing authority, the property also provides additional income to help offset continuing reductions in federal funding. Another of our goals is is to provide opportunities for home ownership by stepping outside the box of the traditional paths of home ownership, the shfc lease purchase program has now provided 12124, now 1 is 25 125 families within Travis County with just such an opportunity. Additionally the acquisition of four residential lots in manor, Texas and the subsequent sale of those lots to habitat for humanity of Austin assures that more quality, affordable housing is in the core that have growing community. In 2006, the shfc began construction on 208 units of seniors housing in Pflugerville Texas. To be completed in 2007, cambridge village apartment wills provide excellent housing alternatives for sshz wish to go remain independent while having services tailored to their needs. In 2007 the shfc should be on tract to begin scrowks an additional 2 sco units of new affordable housing serving both families and seniors within Travis County. It is anticipated that two more multi-family developments will be identified for moving forward in 2008. This level of activity will contribute to an additional 900 units of housing over the next 36 to 48 months. These goals will be -- will continue to be achieved by forging partnerships with funding sources, community leaders, municipalities, local units of governments, service providers, development partners and those who will become our neighbors. Through these partnerships and the principle ghiedz our development initiatives, the housing authority and its subsidies will continue to create affordable properties that truly meet the needs of those they serve and are considerate of the community as a whole. I'll be happy to answer any questions.
>> I'd like to congratulate y'all on this, especially when you mentioned the senior citizens housing in manor. I had a chance to attend the -- some of the ceremonies when you brought that fortsz. And, of course, I know you're doing one in Pflugerville too, but I understand it's coming online and they seem to be pretty well received in the manor area. And it appeared to serve a real good purpose in the way it's anchored and situated it will be able to serve those seniors quite adequately. I would like to commend you on that and --
>> thank you very much. And we appreciated you being there.
>> so one goal of the corporation is basically to provide affordable housing throughout Travis County.
>> yes, sir.
>> not necessarily concentrated in low income areas.
>> no, sir.
>> now, there is a federal requirement that is tied to income status, right?
>> depending on which funding source you use and as you intimate with almost any source of federal funding there are certain income limits that you will be required to serve.
>> so your goal is is to comply with federal standards when you use federal money, but to generate additional discretionary dollars to give you more flexibility?
>> that's exactly right.
>> okay.
>> if there are no other comments, I will move toafer the next section under tab 3.
>> mr. Davis may have questions here about tab 2.
>> I just wanted to say that when the corporation -- two years ago when the Commissioners court authorized the establishment of the strategic housing finance corporation, as you know went through a long process of whether or not the lease-purchase program was something to approve of or fwoorgd with or not -- or to go forward with or not. And then the court decided to establish the strategic housing finance corporation. And at that time, although the court also authorized or allowed strategic the ability to issue bonds and to own tax credit and tax credit bond be properties, there was not a discussion of the policy question of whether to support the ownership of affordable housing projects in which the strategic, by being owner, brings to the table the property tax exemption so that the affordable properties that they are proposing to build or own, they bring the ability for those projects not to pay property taxes. So it would seem to me that this policy question that the court should come down to, is is this something that wants to be supported and then whether there should be some written policies of if we're going to support housing finance corporations to own affordable properties and grant not having to pay the property taxes, then under what criteria should these projects be approved?
>> okay.
>> I think related to if the housing authority is on an owner, we know exactly who we can pick up a phone and call and have conversations with in terms of are you meeting everything that comes with getting the tax deduction. Where we have had our issues have not been with our partners at the housing authority in terms of are you making sure that those who need to be in that housing are and what additional programs are occurring on your site and are you taking care of your maintenance business. Our issues have been with chodoville and that got switched with late law, but it has not been the folks who have come through our programs and not paid their fees every year. Those are the programs. It's not been with something that has an established -- how long has the housing authority been in existence here in Travis County?
>> 42 years.
>> there you go. You've got long established, we all appoint all of the Commissioners who are on there. So I actually have the least amount of problem saying that they are the owner and are there do the public's good and have a 30-year record of doing the public's good as opposed to somebody who comes in here often times with very good intentions and says we want to do good stuff and we don't have any kind of hammer to either giveth or taketh their funding and be then don't pay their fees. This seems to be -- I see walter out there, so I want people to know that there are people doing excellent work out there in chodoland and in the nonprofits. So I want to make sure that people like walter are not caught up with that. I think it does a great deal of service with people like walter who are going doing an amazing job in this community. But there are those who we have had issues with and they are talked about in public when they come in deentd pay their fees. So I have the least amount of heartache with the walters of this world with the housing authorities of this world, proven track errors. My most heartache is is those that come in with a good sales pitch, I think great intentions and they just for whatever reason fall through the cracks.
>> I think mr. Davis' point is is that we need a policy. And gray with that. Does the corporation have a policy regarding owning housing? Or was that in the sort of mission statement that we read into the record a few minutes ago?
>> it was in the mission statement that was read into the record. And as the organization itself, state statute clearly states that housing authorities and hfc's have the ability -- this is not a new con 'september by any means. It's not anything different than other housing corporations, the housing corporations are doing throughout the state. This is not a new issue. This has been intimated among housing authority staff and comments with all of you from time to time to bring this up at this point in time I don't know the purpose.
>> this was also done by legislators, wasn't it?
>> it clearly states --
>> I think the activity in this area has increased substantially since they changed the law on chodos where developers were going in partners with chodo's with properties to take them off the tax rolls. Since that door has kind of closed, then they're going housing finance corporations and housing authorities and saying, we want to partner with you so that we can make the numbers work better, take the properties off the tax rolls. As you know the city of Austin has owned several projects and so this is --
>> if you acquire various properties, they're acquired in the name of the Travis County housing finance authority?
>> or a stated subsidiary that we created as that entity, which is pretty common, such as a facilities corporation. That we have the ability to do that and we've used that mechanism, but yes, we could acquire it, as we did our administration building over on mlk, we created a subsidiaries corporation to purchase that building under state statute 392.
>> one other thing I might just address is, a very well-known, lok lid dell and sap put out a memorandum and I want to make sure you got a copy of it dated June 26th. Her last paragraph she states, private-public limited partnerships that are controlled and owned by the public entity are eligible for ad valorem tax exemption under state law, including Texas constitution, Texas state tarks code and governing statutes of all applicable public entities. Ad valorem exemption is critical in making these properties viable and is critical to the public purchase of housing authorities and housing finance corporations across the state. Thank you.
>> so that's all for this, basically support that the housing authority is authorized to issue bonds and be acquire housing that's tax exempt in.
>> yes. And hfc's.
>> I think the housing authorities is authorized to issue private activity bonds '.
>> that's not true.
>> yes, they are.
>> that's why we have lawyers in this world. Let's let you finish your presentation.
>> okay, sir.
>> [one moment, please, for change in captioners]
>> > >.
>> the next one is the shelter plus car program where we have two grants. We just received a for $841,000, which is a five-year grant for 20 of units of shelter plus car. And that is specifically for the homeless and individuals that are recommended to us are from Travis County mental health retardation. We provide them housing under the homeless programs and we have 95 units of that. And in any particular time period, we are around 90-95 percent leased up on these programs. Then we have the Travis County development corporation that has a 51 c three corporation that be utilized in the future at the housing authority as it grows, and it's capable of receiving some foundation grants which is a requirement by that foundation foundation. Then we have the Travis County facilities corporation, as mr. Hopkins had mentioned, that was a corporation that basically was put together to purchase the central administrative office at 2200 east mlk, and that program operates with the housing authority as part of the 10ants and the other parts of the build building are leased out at this time to three other entities and they are all nonprofit type entities. If you turn the page, I have provided some statistics on what our current occupancy rates are. On the first page we have all ex exer oaks alex ander oaks. That is at 98 percent occupancy. Eastern oaks is seven percent. Summit oaks in the in is at 100 percent. Carson creek, we're at 100 percent. And maynard town with 33 there, we are at 42 percent. At this time all of the one berm units are occupied--one bedroom units are occupied and the remaining units being leased at this time are two bedroom unit.
>> the occupancy, why is that so dramatically lower at maynard town than the other?
>> we just started leasing this one up.
>> it's newly acquired?
>> yes.
>> okay.
>> wasn't acquired, it was built by the housing authority.
>> okay.
>> then we have the annexation apartments. The occupancy at that annexation apartments when--at those apt when that was down, today it's at 98 percent. It's also part of the forwarding housing program. We have 54 unit requirements to have very low income individuals in those units. We typically try to keep that number between 60 and 65 so that as individuals move out, we have a high enough requirement to meet the state . And--the state requirement. And these are all reported. Any questions about those?
>> let me ask the question. I think we were all overwhelmed by the photos from the section 8 list open up a few weeks back. How would you articulate is the unmet need for the Travis County piece of it? Certainly a good portion of those folks were trying to get on the Austin list because they want to live in units within the city of Austin, but help me understand, what is the nature of your wait list for units that would be within more the jurisdiction of the Travis County housing authority. Give me a sense.
>> interesting question because remember, we have a shared jurisdiction agreement with the city of Austin.
>> okay.
>> meaning their clients can go out into the county, our can go into the city--our clients can go into the city and find residences. So that's a hard question to answer based on that scenario.
>> okay.
>> tell you this, my first thought in my mind to your question, it's a massive need. We cut off the waiting list after seven or eight days and we have a list of five or 600.
>> on section 8 we signed up about 2800 when we had--
>> a day, I guess.
>> yes.
>> in the city of Austin, four four,000, five--four,000, five five,000, six,000.
>> the problem is we don't have enough people elevating from this level to higher up, there by creating vacant units. Same situation with the city of Austin I guess. Initially this housing was supposed to be temporary but it's become more permanent than that.
>> we have resident from the day of inception of the units being built.
>> which brings me to my pet question. What is it that we do to help these individuals progress toward a life that doesn't require assistance from us?
>> I think, bill, you can speak to us. The family self-sufficient ty program is one that the up states department of housing and urban development has encourage the housing authority to implement. The other program is section 8 choice voucher home ownership program. Bill, if you want to give some more detail about those programs I think it would be helpful for the court.
>> under the family self-sufficiency program, the individual must be motivated to participate in this program, they have to sign a contract and they have five years to meet the contract. Within that contract, they actually have goals that they have to meet. Some of them are very simple goals. It could be as much as making sure that the car runs. Going to a job search place. And they have separate goals there. They meet with our family self-sufficient ty counselor once a month--self-sufficiency counselor once a month or by telephone and they check on their goals and change them as necessary so that by the end of the five-year period they are into a position where they can actually purchase a home. The housing helps as much as possible through other lenders that we might have available at other agencies also would assist assist. And. And we have given out checks under the family self-sufficiency program, as much as $28,000 to one individual. And basically, the checks are made up of their escrow account. As they come into the program, they may be paying $100 in rent based upon their income. And our calculations. And when they have a change in situation, maybe their first goal gave them the training. To qualify for a job. That meant because they were receiving more money in term of earned income or income underin
>> >.
>> .
>> the program, we have been looking at it very closely the last three or four months. We're up to now with 18 individuals18 in the program program. I believe that it will continue to climb and some individuals, just like any of the other programs, some individuals may not make it all the way through.
>> shouldn't the goal be that at some point we call the u-haul, pat you on the back, and it's time to move out of the public housing unit? So somebody else can move in in?
>> that's called eviction.
>> yeah, $228,000, basically the--28,000, the u haul is there, and you have 28,000, and two movers.
>> all evictions need to go flew the.
>> I think that's called-- called--through the justice of the peace.
>> I think it's called meeting graduation standards standards. You can take all the courses you want but you can't go back to that high school.
>> judge?
>> the only point I'm making does the county have a whole lot of programs?
>> yes.
>> it seems to me that if you live in public housing, one way for us to help you graduate to a life of self-sufficiency is help you access the programs otherwise, the same individuals stay in public housing units indefinitely. Which sort of becomes forever. And what the facts seem to show is it becomes generational, multi multigenerational. And the good news is to the extent that you help individuals become self-sufficient and move on with their lives, that becomes multigenerational also. So I'm sort of suggesting, we have a whole lot of assistance in place. Structured to help individuals. If there's anybody that needs it that's clearly identifiable, it's those that reside in public housing. Excluding a few disabled, a few senior. It may be that education, job training, the other stuff is not really that helpful. But I still think we should leave that to the individual individual. My position has always been, still is, I mean, we ought to make sure that those with a commitment to improve are assisted. You know, everybody in the process, it amazes me how much good we try to do and how many programs we fund, it's all real good but we really make it successful but making sure the right individuals are in there. And we can help with public housing by making sure the individuals who need public housing today do not need it tomorrow. You probably have heard this speech many many times. I'm suggesting too that if individuals in public housing know that there are city and county program available to assist them, or most of them, no matter what their needs are, and show them how to access them, we ought to be able to help with them, help them access those programs, two or three of help is a long time. Five years even longer. At the end of that period, though, you ought to be going to the next step unless there are extraordinary circumstances. That's the only point I'm making.
>> there have been some test tests in the united states by other housing authorities where by basically if an individual wants to enter into public housing, they have a written policy that states that at the end of 24 months, 30 months, whatever it is that was in the policy that next day they are no longer a resident and there is nothing in there that deals with any kind of injection or termination of the program--ejection or termination of the program. It's that they have 36 or 24 months and they are then on their own.
>> that's harsh.
>> yes, it is.
>> unless, unless, the programs are in place in the community to assist. And assist is provided those individuals to access the programs. Which is what I'm suggesting should be our model here. We do that, and it's fair. You know up front what the situation is. And programs are here, we help you access them. Then you get in there and basically you get commit and you do it. I mean, there are many example of people who succeed. Every time I go to a capital idea or one of the other work force development programs, it amazes me how far individuals have come.
>> we have a list of approximately 35-40 corporations and other agencies in the Travis County area, and they assist us with the family self-sufficiency even so far down to, they would be willing to take these individuals after they have met their requirements of a certain amount of training in a specific field, to take them on as temporary type staff for additional training to allow them then to go into a full-time job. There are many of them, and it's very pleasing to see that there's that many of the corporations around in the Travis County area that are willing to do those kinds of things.
>> if we don't have a few 100 graduating annually, the waiting list will just continue to grow.
>> uh-huh.
>> so I'm sort of offering up the city and the county, don't tell the city I did this, but the crit and the county and the programs that we fund--city and the county let be sure the public housing residents are able to access.
>> just say I'm showing up I'm the county judge and I'm here to help you move.
>> I think what the judge is saying is something that we really need to sort of look at. . I hear some very encouraging things and some things as far as the work force and the employers willing to work to achieve self-sufficiency. I guess this is what we have always been about, is self-sufficient goals. Commissioner Gomez even said I heard it said about fishing, you can give a person a line and reel and teach them to fish and they can fish for themselves. I guess that's a true point. It all ties into self-sufficiency. I'd like the also explore that. Because we definitely are trying to work that from this end. I think if everybody is doing the same thing, I think it will overcome a whole lot of things if we could all work together on that.
>> don't do anything illegal.
>> yes, ma'am.
>> right.
>> okay. Anything else under tab three?
>> no, sir. Zero, the audit. Sorry--zero, the audit. Sorry. Our last completed audit was June 30, 2005. Very briefly, this is an audit report. It's what everybody would call a clean report. We have the three opinions of internal control and fair balance presentation and compliance with laws. And there are no findings on the audit.
>> okay the situation with the internal revenue is, they are just quiet, still have that issue under advise advisement, to the doing anything to any of the issu issuers, just kind of waiting.
>> I think they are looking at it on different aspects. It's ongoing discussions as to how they are dealing with this on a global basis as far as the issuers go or dealing with the issuers individually.
>> okay. Questions, comments? Thank you all very much for the update. Think about that opportunity to work with our federal officials. If we want to precede with that, that's where we need a little strategy and to act on it fairly quickly. We have three or four that we can call on my guess is the they, that they have a whole lot more clout than we have.
>> we will be moving in that direction tomorrow.
>> that's going real good.
>> thank you so much.
>> an opportunity for public comment. I'm walter morrow the director of foundation communities, a nonprofit housing and social service agency here in Travis County county. I was very interested to come today and hear the presentation about the housing authority and strategic housing finance corp I wanted to offer a couple suggestions about policy questions that I think are really important for any of development activity. With full disclosure, too, we own two communities near slaughter lane trails at the park and the buckingham duplexes and one of the projects that keith is working on is around the corner from us, south park. There's a need for affordable housing in that community. So I'm excited to work, to learn more about those projects. We pay full property taxes on trails at the park and we're 100 percent exempt on buckingham. I think one critical policy issue for you on any development deal that is being done is to really full fully understand that property tax exemption situation. What are we losing, we being the whole community, county, city and the school district and what are the public benefits we're getting in exchange. If it's new construction of really affordable housing, it may be a really good deal deal. The second critical question policy issue,, to fully understand what the role of the housing authority or strategic or any related entities are. It could run the gamut from a very positivive role where you're owning the land and it's ground leased to another owner-developer and they are serving extremely low income and that's worth the exemption, to the other extreme where you're very involved in the decisions on construction and quality and design, you're going to get the keys and own it and manage it. I think you have to be very cautious about, I get phone calls routinely. I had two last week from real estate developers doing affordable housing. We've got a deal for you. We need you in our deal. You don't have to do anything. We just need you to be there there. You can get sales tax exemption, partial property tax exemption. You don't have any risk of when you're done, we'll give you the keys. I usually explain to them, that's not how, not something we're going to put our name on. If we're going to be involved in a deal, and we'll consider partnering, we want to materially be involved. This is a project we're going to own for the long run. Ultimately at the end of the day, one partner has budget authority and decides what the construction quality is going to be and what the design is, what the rents are going to be and what expenses are going to be. And I think it's hugely important for south park or any development goal that that role be really spelled out and really clear and you understand what your capacities are to play that role. I am hopeful that the south park project will be really a great property k well designed and well managed and great neighbor and that would be great. I think it's important for the public oversight from the Commissioners court that you know what had the deal is on property taxes and you know real clearly what the role is for the housing authority and any related entity and then the other partners in the deal that are involved.
>> those are very good comments. Judge, may I ask a question and put it on the radar screen. I heard Commissioner Gomez mention and I heard it before. And that is the legislature looking into this situation again. Is that discussion before the legislature as far as, you know, property tax exemption where it's actually taking property off the tax role because of the partnering and all these-- these--tax roll and other these other aspects? Is that something that's going to be discussed in the next legislative session? It's been brought up a lot.
>> I can answer that.
>> walter knows.
>> I'm sorry.
>> as you know, with the sho shoto property tax exemption the legislature was all over that and basically change the rules on that. For public housing authoriti authoritis and related entities there is a hundred percent property tax exemption but now there are questions about that. The chair of the house urban affairs committee has asked for an attorney general's opinion. I'm in the sure what side of the issue he is on but there is an expectation that the attorney general will provide some guidance and that will provide some clarity to the real estate development world. And it would not surprise anybody, I think, that the next legislative session there will be some bills introduced probably to either strengthen the exemption for housing authority or take it away all together.
>> I think the questions are whether those are houston, harris county situations, because that's where the representative is from, or as we found many times, is it statewide, in which case everybody would have a stake stake. Or are you trying to allege slate the exception and everybody else gets caught up. I think there will be a lot of advocates on all end keep keeping an eye to be sure if there's something broken it gets fixed, but in trying to fix something, you don't break it.
>> we have heard a lot coming from the harris county, a bunch of stuff. At any rate, glad you brought that up to our attention. Not that we have not been paying attention.
>> we appreciate your input.
>> thank you.
>> thank you very much.
>> good to see you.
>> all right.
>> thank you all very much.
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Last Modified:
Wednesday, September 13, 2006 10:11 AM