This is no time to be changing horses.

From the written FAQ that accompanied the presentation:

QUESTION: Can Norstar or the Equity Partner convert the units to market rate housing?
ANSWER: No. HUD has an affordable housing use agreement that precedes all other agreements, financing and legal rights. Only HUD can change the use. In addition, there is a MSHDA Regulatory Agreement for the LIHTCs, which restricts the units as affordable for an extended compliance period (beyond the 15-year initial compliance period).

A couple of immediate points:

1. It is my impression that LIHTC credits are only “good” for 15 years, after which properties may revert to market-rate. How would that affect these?

2. In looking at the state site on LIHTC, I find that such properties are subject to a “subsidy-layering review”. This is intended to prevent multiple subsidies from adding up to an “over-subsidized” condition. It looks to me as though we are talking several different subsidies here. If the SLR so indicates, then one or more of the subsidies may be reduced.

Perhaps Council could ask the proposers to put together a mock example of how the different subsidies would be applied. I’d like to see an example transaction walked through all the way to see how money would change hands.

Affordable housing finance is a rather arcane discipline and we are fortunate to have such an experienced practitioner as Jennifer Hall on board. Still, I’d like to know what trends in financing at the Federal level are looking like. We have a rather unstable Federal funding picture right now and this looks like a really good area for Congress to seek savings.

I have something of an allergic reaction to any “public-private” arrangement, especially one that involves a for-profit entity. The likelihood that the public partner may end up with an unanticipated liability seems strong. Maybe it is just my hives talking. The bottom line is that I hate to see our public housing endangered at any level of probability.