Cuts cripple affordable housing efforts
Faced with an ever shrinking budget due in large part to cuts in federal housing assistance, the Whitefish Housing Authority continues to search for ways to help low- and moderate-income families find affordable housing.
Founded in 1967, the housing authority works to address housing needs in town. The WHA operates the Mountain View Manor and runs programs for rental assistance, housing rehabilitation and homeownership.
Lori Collins, executive director for the housing authority, said the needs only continue to grow. She pointed to the WHA’s waiting list for rental assistance that is more than three years long.
“It is not good news for the housing authority in these economic times and much of our plans for sustainability are in jeopardy,” she said. “Rental prices are rising sharply and the need for housing assistance is growing.”
BNSF homes
WHA is turning its focus to the BNSF homes that were donated to the city. One of the three homes has already been turned into a rental. Now, the housing authority is looking at rehabilitating the other two on First Street in the Railway District.
“Our biggest priority is to get those fixed and get people in them,” Collins said. “It’s heart breaking to have them just sit there.”
The WHA has a couple of options for the houses. It could rehabilitate both for an estimated cost of $75,000 or spend about $200,000 to demolish and then construct two new homes on the lots.
The authority sees the houses as not only as a way to provide affordable housing, but also generate program funds. The houses could also be sold in the future to put money back into the WHA.
“We want these for our continued operating cost,” Collins said. “We could get rent initially and then sell to assist in our operating in the future.”
In order to fund the rehab of the houses, WHA is asking the city for funds. City Council held a work session on the matter last month.
The council seemed supportive of providing funding to WHA.
Councilor Chris Hyatt suggested that the city actually loan the money to the WHA and then if it sells the houses later the city would recoup the money.
“We want to be good stewards,” Hyatt said. “I feel more comfortable that there is a payment at the closing if they sell the houses.”
City Manager Chuck Stearns said tax increment financing funds could be allocated to WHA for use on the houses. The housing authority has not received any direct funds from the city since 2004, he noted.
Councilor Frank Sweeney expressed concerns with the authority’s plan.
“I’m a little uncomfortable with the housing authority becoming a speculation builder,” he said. “That’s a different role than you were charged with. Whatever decision you make there has to be some level of confidence on your return.”
John Middleton, a real estate agent who serves on the housing authorities board of directors, said spending $75,000 to rehabilitate the homes would be reasonable.
“You could get your return on investment for that,” he said.
Council chose to delay a decision until WHA can provide more information on its plan for the houses.
Mountain View Manor
Mountain View Manor was WHA’s first project and continues to provide 50 apartments for the elderly and disabled. The manor is public housing and as such rent is calculated based on federal guidelines.
WHA receives a subsidy from the U.S. Department of Housing and Urban Development for management of the manor. The subsidy of $22,000 WHA receives today is nearly a 70 percent cut from two years ago. The subsidy bridges the gap between operation costs and rent.
Collins said although the manor is well managed, deep cuts in funding could prove to be a challenge.
Vouchers
The federally-funded housing choice voucher program assists low-income households by paying a portion of their rent. WHA currently manages 16 vouchers. The program is currently under funded, receiving about $682 monthly while costs run about $1,000 to operate the program.
Homeowner
WHA’s homeownership program began in 2004 and has helped 24 low- and moderate-income homebuyers purchase a home through the use of a subsidy to buy down the price of the home.
WHA has been awarded about $1.7 million for the program and much of that is secured by liens that will either be repaid at resale or left in the home to continue as an affordable resale.
Spending rules
In addition to shrinking funds, the authority is dealing with repaying itself funds because of change in federal spending rules. WHA owes itself $172,000.
Previously, the authority had been allowed to use money from its public housing fund for the manor to supplement its homeownership programs.
However, in 2008 HUD said that was no longer acceptable and that WHA would also have to pay itself back by returning the money used to its public housing reserve fund.
“People always ask, ‘Who do you owe money to?’” Collins said. “We don’t owe money to anyone. We owe money to ourselves.”
Collins said the authority is repaying the money to itself and has separated its different programs. Rent from the BNSF homes could go toward repaying that debt faster, she noted.
“We want to be able to sustain ourselves going forward,” she said.