All we heard from this mayor and council over the past few years was how their hands were tied from using funds from one bucket to pay for more police, or firefighters, or other important services. Meanwhile, they found ways to divert money to public art, Fuller Road Station, free parking for Google, etc., a huge city hall addition, a new maintenance facility, etc., etc.

However noble the intent, the last thing we need to do is create yet another restriction on revenues that will only impair the ability of future, more fiscally responsible councils to manage our money properly.

The issue of Urban County control over the housing fund becomes important if there is a possibility that the city’s money could then be used outside the city.

As for what happens on the NENO site now, as a neighbor to the property, I would still like to see some affordable/supportive housing returned there. My hope for the process is that the current owners (the non-profit Near North LLP, not 3 Oaks) are transparent in their planning and actively involve the neighbors all along the way. Our neighborhood has been extremely patient and supportive and we deserve to be informed.

The current balance in the DDA’s housing fund, as reflected in the FY 2012 balance sheets presented to the operations committee last week is about $1.1 million. Of that, $400,000 is obligated to the support the affordable unit component of the Village Green City Apartments project, and $500,000 was authorized for the Near North project.

The source of the funds in the DDA’s housing fund is transfers from the DDA’s tax increment financing (TIF) fund. It’s worth noting that the DDA’s fund is meant specifically to support residential, but not necessarily affordable residential.

The DDA board could re-allocate the $500,000 previously designated for Near North towards whatever housing purpose it sees fit. But I think it’s unlikely that in the short term the DDA board would decide to deposit that money into the city’s affordable housing trust fund. I think that more likely for the short term is for the DDA board to say: Let’s wait and see what comes next from the Near North development team – because there’s an interest in seeing the location become something more interesting that just emptiness; but if something else specific at some other location comes along, with earlier prospects of coming to fruition, we should think about pursuing that instead.

There’s not a requirement that the DDA’s housing fund be spent exclusively on new construction – for example, the grant made in 2010 by the DDA to the Washtenaw County Shelter Association (for washer/dryers, HVAC stuff, a generator and the like) was made from the DDA housing fund. A grant made in 2009 to Avalon for rehab of units was also not new construction. Based on deliberations around the allocation to the shelter, however, the DDA board sees the DDA housing fund as one that supports housing capital needs not operational needs. So if a request were made to the DDA to allocate the salary of a social worker at the shelter, my guess is the board would not see that as something payable from the housing fund.

Remaining questions:

Is the city’s affordable housing trust fund administered by the Urban County? I’m almost certain it is not, but the fact that you’re asking leads me to want to pin that down more definitively.

What is the history of the DDA’s housing fund? It was established back in 1997. But I suspect that what you’d really like is a record of its financial history year-by-year, along the lines of the chart included in this article for the city’s affordable housing fund. That I don’t have. A site-constrained search of the DDA’s website will give you a flavor for the sorts of things the DDA has allocated money for out of its housing fund. Use this as the Google query: site:a2dda.org “housing fund” resolved

I have a couple remaining questions I hope you (Dave and/or Vivienne) can answer.

Now that NENO is not going forward (at least not in the form approved in 2009) can the DDA turn the unused $500K grant over to the city’s affordable housing trust fund? Is this city fund now administered by the Urban County? What is the history of the DDA controlled affordable housing fund (current balance $502K) and what is the source of these funds? Must the DDA controlled fund be used only for new construction?

From The Chronicle’s coverage of the Ward 5 candidate forum for the Democratic primary election for city council:

[... Ann Arbor had a "grandfathered-in" ability to spend more of its CDBG (community development block grant) on human services than other communities. Joining the Urban County meant that without an additional waiver, Ann Arbor would become subject to the same 15% cap as every other community for its expenditures on human services. In actual dollars, this meant dropping from $396,000 to about $196,000 in human services expenditures. But it did not affect the amount of the CDBG funds for Ann Arbor – just the way it could be allocated. Based on an email to The Chronicle from Mary Jo Callan, head of the joint city/county office of community and economic development, Ann Arbor is currently operating within the 15% cap.

The additional money, to which Armentrout alluded, stems from the fact that Ann Arbor's joining the Urban County, according to Callan, created a "... large enough entity to receive a direct allocation of ESG (Emergency Shelter Grant) funds from HUD [the U.S. Dept. of Housing and Urban Development]. These funds are directed to housing and homelessness agencies, just as CDBG human services funds had been previously. In addition, we began utilizing a previously-unused eligible activity within the CDBG funding, called Community Based Development Organization (CBDO). Through this designation, we were able to provide funding to Community Action Network and Peace [Neighborhood Center] (previously funded through either CDBG or General Fund human service dollars) that carry out neighborhood revitalization efforts.” Peace Neighborhood Center, coincidentally, is where the candidate forum was held.]

The council ultimately rejected that because of the expense. Later they put out an RFP, which then was awarded to William Street Station.

The point I wish to make is that bricks and mortar are not all that is involved in providing supportive housing. There are considerable ongoing management expenses, since both rent and services must be subsidized indefinitely. If council is leaning toward using land sale proceeds to build such housing, I would hope they would also have a fully-fleshed-out plan for the operation. Note that since we turned over our CDBG grant to the Urban County, we lost the ability to draw on that for nearly $400,000 yearly for human services. Since then, our emergency shelter has often been in crisis and we have had to direct general fund money to those human services. Any redirection of general fund money inevitably competes with other priorities. Council needs to make sure that any proposals pencil out.