Jennifer L. Hall, the new Ann Arbor housing commission executive director, talks with commission board member Andy LaBarre before the board's Dec. 21, 2011 meeting. (Photos by the writer.)

Most of the Dec. 21 meeting focused on a presentation by Hall. She gave an overview of local affordable housing demand, and looked at how the housing commission’s operations might address some of those needs. In part, her talk set the stage for possible land acquisition. Later in the meeting, the commission entered into closed session to discuss two potential properties it might buy to add to the city’s public housing stock.

On one of the properties Hall suggested constructing a rental project consisting of 22-37 detached single-family units and duplexes, ranging between 1-5 bedrooms. For the other property, she proposed building a 15-unit complex of detached 2-4 bedroom condos and duplexes, which would eventually be sold to low-income homeowners for $140,000 each. Funding for these projects would come from a variety of sources, including state and federal grants and loans.

The locations of the properties weren’t disclosed in open session. But Hall said she was looking for direction from the board on pursuing the two projects. If the projects move forward, more details would be discussed in the public portion of upcoming meetings.

Hall also floated the idea of changing the format of board meetings and of the information that commissioners receive in their meeting packets. She proposed cutting back on staff reports, presenting them quarterly instead of monthly. That way, more of the board’s meeting time would be freed to focus on strategic planning issues, she said.

Hall also suggested changing the way that meeting minutes are written up. Instead of including a detailed description of the board’s discussions, she said, the minutes could provide a summary of the discussion and a note about the outcome, if a vote is taken. Some commissioners expressed concerns about truncating the minutes dramatically. Board president Marta Manildi said the AAHC board would like a richer level of detail than what’s provided in Ann Arbor city council minutes, which she described as too terse.

During the time available for public commentary, two residents of Miller Manor – an AAHC apartment complex on Miller Avenue – raised concerns about security issues in the building. Manildi told them that their comments would be forwarded to a working group of staff that’s addressing security problems at all AAHC properties.

Affordable Housing in Metro Ann Arbor

Jennifer L. Hall began by telling commissioners that the topic of expanding the housing stock isn’t one she’d ideally choose for her first presentation as AAHC executive director. She noted that staff is doing a lot of work regarding maintenance, security and other operational issues.

But Hall told the board that two opportunities exist for possible land acquisition that could help add to Ann Arbor’s affordable housing stock. And she said it’s important to strike when those real estate opportunities arise. Her presentation was intended to set the stage for a strategic discussion, leading up to a closed session in which she’d provide more details about the two properties in play, including their location. The board could then give direction on the start of due diligence toward a potential acquisition. Depending on that direction, commissioners could eventually vote in open session at a later meeting on the real estate acquisition.

Affordable Housing: Context of Needs and Funding

It’s important to see how AAHC fits into the broader context of affordable housing in Washtenaw County, Hall said.

In 2007, the county did a comprehensive affordable housing needs assessment, looking at the gaps between the type of affordable housing that’s needed, and the type of housing that’s available. [The entire report is available to download from the Washtenaw County website.]

The assessment analyzed household characteristics, such as whether residents were disabled, had large families, or were low income. Different types of households have different needs – handicapped accessibility, for example, Hall said. Analysis of the county’s housing supply included the age and types of structures, as well as housing costs.

Other factors in the needs assessment touched on quality-of-life issues, such as proximity to employment sources, quality of schools, and access to services like groceries and medical offices. Hall also noted that the assessment looked at changes in affordability, measured in terms of housing values or rental costs, and the local levels of poverty and unemployment. Hall noted that the assessment was done in 2007, “before the economy went crazy,” so in some ways things have changed considerably since then.

Hall pointed out that Ann Arbor has benefited from its student population, in terms of federal funding, because students typically report poverty-level incomes. And because federal funding to communities from the U.S. Dept. of Housing & Urban Development (HUD) is based on formulas that are tied to poverty levels, Ann Arbor receives more funding than it otherwise would, Hall explained. HUD is looking to change that formula, she added, but the formula hasn’t been changed yet.

Affordable housing is defined relative to income levels – what is affordable to a higher income family is not necessarily affordable for a lower income family. For federal funding purposes, affordable housing means that a household is paying 30% or less of its gross income for housing, including utilities, taxes and insurance. Several HUD programs provide affordable housing assistance for low-income families – AAHC is one of the local entities that receives funding from these HUD programs.

HUD 2011 income chart for Ann Arbor metro area, which includes all of Washtenaw County. (Links to larger image)

Hall reported the median income for various household sizes in the Ann Arbor metro area, which includes all of Washtenaw County. For a family of four, the median income is $86,300.

All of the other income definitions used by HUD are based on a formula, she explained. A family of four is considered low income if the household earns no more than 80% of the area median income. But that 80% figure can’t exceed the national median income, she said. So for the Ann Arbor market, with generally higher income levels, low income is set at $64,200 – instead of the $69,040 that corresponds to 80% of median income.

Assuming no more than 30% of income is spent on housing, Hall described maximum monthly housing costs for different income levels. For a family of four earning the area’s median income, monthly housing costs should be $2,158 or less. For a low-income family of four earning $64,200, monthly housing costs should be $1,605 or less.

Ann Arbor’s owner-occupied housing market is getting more expensive compared to other areas nationally. According to data from the National Housing Conference, in 2011 metro Ann Arbor (Washtenaw County) ranked as the 87th most expensive housing market among the nation’s 209 metro areas, Hall reported. The median home price for the Ann Arbor metro area was $162,000. Just two years earlier, the median home price was $136,000, and metro Ann Arbor ranked 132 among the 209 metro areas, she said.

For the rental market, metro Ann Arbor also ranked 87th among the 209 markets in 2011, with an average monthly rent of $882 for a two-bedroom apartment. But that is a drop in the rankings from 2009, when the area ranked 51st with an average monthly rent of $940.

Commissioner Leigh Greden commented that if you looked at the Ann Arbor market alone – not including the rest of Washtenaw County, where house values and rents are generally lower – the cost of housing would be even higher than the amounts reflected in the metro area data.

Hall observed that as people search for affordable housing and move further away from where they’d prefer to live, they often increase the amount they pay for transportation to get to work or to necessary services, like grocery stores. That increased cost often isn’t factored in to their housing decisions, she noted, and the more distant location can end up being more expensive overall.

Turning to rental housing, Hall noted that in an ideal world, every household would live in a unit it could afford – there would be units available for all income levels. But “unfortunately, that’s not the way the market works,” she said. There’s a mismatch of availability and income, with some families paying more than 30% of their income for rent, and others paying far less than 30%.

Affordable Housing: Fair and Equitable

Introducing the issue of fair and equitable housing, Hall noted that compared to the rest of Washtenaw County, Ann Arbor is a community with more jobs, good schools, public transportation – all of the things you’d want for everyone. And the Ann Arbor city council has been more supportive of low-income rental housing than governing bodies of other communities, she said. But while there are pockets of poverty in Ann Arbor – on the southeast side, for example, or the Arrowwood Hill Cooperative in the north – much of the county’s poverty is concentrated in the Ypsilanti and Ypsilanti Township area, Hall said.

Marta Manildi, president of the Ann Arbor housing commission board.

HUD has traditionally provided more funding for low-income housing in low-income areas. But Hall noted that a fair and equitable approach would be to make affordable housing available throughout the community, not just in low-income areas. HUD seems to be moving in that direction, she added. For example, the $3 million “sustainable community” grant that was recently awarded by HUD explicitly requires that low-income housing not be built in low-income areas.

Commissioner Gloria Black noted that the Ann Arbor city council might be supportive of this integrated approach, but what about Ann Arbor residents? Hall replied that she has never seen a new construction project for affordable housing that was supported by 100% of the neighbors. “That doesn’t mean you can’t get it done,” she added. It means you need to meet with neighbors and explain the project, she said, get their input and hopefully address their concerns.

As an example, Hall cited the Near North project, a residential affordable housing complex planned for North Main Street and spearheaded by the nonprofit Avalon Housing. It was originally planned to be a four-story, 60-unit structure, but was redesigned to three stories and 39 units in order to address concerns from the neighbors, she said, even though the smaller scale made financing the project more difficult. [Specific objections of neighbors related to the scale and massing of the building.]

Marta Manildi observed that in general, getting the acceptance of neighbors might be related to the quality of the project.

Affordable Housing: AAHC’s Role

Hall spoke about the role of the Ann Arbor housing commission in a continuum of affordable housing throughout Washtenaw County. On one end are shelters for people who are homeless, including the Delonis Center, SafeHouse Center (for victims of domestic violence), Interfaith Hospitality Network’s Alpha House (for families), and SOS Community Services, which runs a housing access hotline. At the opposite end is market rate housing that is affordable. Within those extremes, Hall outlined a range of other housing assistance and types:

• Transitional housing (Dawn Farm, Michigan Ability Partners, Home of New Vision)
• Group homes (Synod House, Washtenaw Community Health Organization)
• Senior assisted-living (Area Agency on Aging 1-B, private sector)
• Nonprofit supporting housing (Avalon Housing, Michigan Ability Partners, Community Housing Alternatives)
• Senior housing (Lurie Terrace, Cranbrook)
• Public housing (Ann Arbor Housing Commission, Ypsilanti Housing Commission)
• Tenant vouchers (Ann Arbor Housing Commission, Ypsilanti Housing Commission, Michigan State Housing Development Authority)
• Private developments (Windsong)
• Cooperatives (Arrowwood, Pine Lake, Forest Hills, University Townhomes)
• Houses for homeownership (Habitat for Humanity and other nonprofits)
• Units within private developments (First & Washington, Stone School)

AAHC manages two main programs: (1) the Section 8 voucher program for Washtenaw, Monroe, and western Wayne counties; and (2) public housing units in Ann Arbor. For Section 8, over 1,400 vouchers are in use by tenants to subsidize rent in privately-owned properties. In addition, 37 vouchers are tied to specific projects: 20 for Avalon Housing’s Pear Street apartment complex; five reserved for a to-be-determined Avalon property; and 12 for assisted living in units managed by Area Agency on Aging 1-B. There’s also one homeowner voucher, Hall said, for an AAHC lease-to-own property.

The public housing units managed by AAHC are located throughout the city of Ann Arbor. AAHC units include Miller Manor, Baker Commons, North Maple Estates, Hikone and Hillside Manor, among several other properties. The inventory of 360 total units includes 30 single-bedroom units, 163 single-bedroom units for the elderly or disabled, 166 family units with 1-5 bedrooms, and one three-bedroom lease-to-own family unit.

Hall noted that the AAHC’s last development – two duplexes on North Maple – was completed in 1998. Most of the AAHC housing stock was built in the 1960s and 1970s, she said. It’s aging, and requires a lot of investment to maintain.

AAHC’s mission is to provide low-income housing, Hall noted. Very few sites in the city can be developed for that, so when opportunities arise, it’s important to look at possible acquisitions as an option to increase the number of affordable housing units in the city, she said.

Ann Arbor housing commissioner Leigh Greden.

Greden asked whether opportunities exist to work with the county treasurer on acquiring foreclosed properties. Hall told Greden that working with the county treasurer was an option, but she noted that most tax-foreclosed properties are located outside of Ann Arbor.

Regarding the possible acquisition of additional AAHC properties, Manildi asked whether the need for expansion is a function of the need for additional affordable housing units, or a function of the need to replace existing units that are in poor condition.

Hall replied to Manildi by saying that both reasons are driving the discussion. The previous AAHC executive director, Marge Novak, had started the process of evaluating all the public housing units to see if the units need rehabbing or should be torn down and rebuilt. In two cases, existing units are located in floodplains, Hall said, so rebuilding isn’t an option. Baker Commons, located at Packard and Main, is an example of a complex that needs reinvestment, she said.

But overall, “there’s a huge shortage of affordable housing,” Hall said.

Black observed that AAHC has only one lease-to-own property. It seems there’s a focus on rentals and a movement away from homeownership, she said. She wondered whether AAHC should try to convert apartments to condominiums that tenants could purchase, and move them off of public housing assistance.

Hall responded to Black by noting that AAHC originally had 50 lease-to-own properties, and all but one of those tenants had been able to purchase their homes. Manildi noted that it’s not clear whether it’s better for a tenant to rent or own. She allowed that stability is important – in terms of residents remaining in the same location and maintaining the property. But it’s not clear that there’s an economic advantage to ownership, Manildi said.

Hall agreed, pointing out that in addition to housing costs like mortgage payments and utilities, homeowners also incur costs like roof replacement and other maintenance. The foreclosure crisis was caused by people being overextended, buying houses that they couldn’t afford, she said.

But isn’t homeownership the American Dream? Black asked. People might take better care of their homes if they owned the property. Just because people are poor doesn’t mean they don’t have a vision for homeownership, she said. The goal should be to eliminate the need for public housing completely, Black added. The government doesn’t want to be in that business, and low-income residents don’t want it, either. Andy LaBarre weighed in, saying “I’m not quite sure we’re there yet.”

Hall returned to the issue of demand, noting that when AAHC last opened its Section 8 waitlist in 2006, more than 3,000 people applied. That comment prompted someone in the audience to ask when the Section 8 waitlist would be opened next. When it opens, he added, “there’s going to be a stampede.”

Section 8 waitlists are opened for new applicants every two to four years. Wenisha Brand, AAHC Section 8 housing manager, reported that she hoped to open the waitlist soon, but there is no firm date yet. When those decisions are made, the information would be posted on AAHC’s website, as well as in other public locations.

Affordable Housing: Potential Acquisitions – Homeownership

While still in open session, Hall provided some details about two possible AAHC projects – one for eventual transition to homeowners, and another for rental. She said the board could continue this discussion at its January meeting, and that local attorney Rochelle Lento has offered to provide pro bono assistance for the real estate transactions.

The first possible project would involve constructing a 15-unit complex of detached 2-4 bedroom condos and duplexes. It would be a “green” construction project, which would make it eligible for certain grants. The project could be pursued in partnership with the city’s parks department, which is interested in a portion of the property for the parks system, Hall said. Habitat for Humanity is another potential partner.

Development costs for this first project would total an estimated $3.74 million, or $249,000 per unit. That total includes acquisition costs ($160,000), construction ($2.1 million), site improvements ($400,000), developer/staff fee ($450,000), professional fees ($300,000), homeowner education workshops ($30,000) and soft costs, such as financing ($300,000).

Several financing sources are available, Hall said, but the main financing would be a construction loan estimated at $1.855 million. Other sources include a Federal Home Loan Bank grant ($225,000), the city of Ann Arbor’s housing trust fund ($50,000), brownfield tax-increment financing ($560,000), green construction and private grants ($300,000), a portion of the $3 million HUD Community Challenge grant ($340,000), education grants and fees ($10,000), and HUD funding through the Community Development Block Grant and HOME programs ($400,000).

Down payment assistance would be available to qualifying low-income families, Hall noted. The units would be sold at an estimated $140,000 each – affordable for residents in the 50%-80% of the area’s median income. Deducting $125,333 in anticipated grant subsidies from the $249,000 development costs would result in a $123,667 loan repayment per unit, Hall explained. If the homes are sold at $140,000, that leaves a $17,000 profit margin for AAHC per unit.

Affordable Housing: Potential Acquisitions – Rental

Turning to the rental project, Hall told commissioners it would involve between 22-37 detached single-family units and duplexes, ranging between 1-5 bedrooms. As with the other project, the property acquisition might occur in partnership with the city’s parks system, and would aim to be a green construction project. Avalon Housing might be another potential partner, Hall said.

Fewer details were available on the specific financing for this rental project. Possible funding sources include low-income housing tax credits, HOME funding, a Federal Home Loan Bank grant, a 221(d)3 mortgage insurance and loan, Michigan State Housing Development Authority (MSHDA) bond financing, and a HUD Section 202 or 811 grant.

Hall wrapped up her presentation, and the board moved into closed session to discuss the possible land acquisitions.

Closed Session: Land Acquisition

At the beginning of the Dec. 21 meeting, the board had voted to change its agenda so that the planned closed session could be moved up on the agenda. Commissioner Leigh Greden had to leave the meeting early, and the timing of the closed session was changed to accommodate him.

The closed session lasted about 30 minutes, and Greden left the meeting when commissioners returned to open session. Board president Marta Manildi reported that the group had discussed only one of the two properties, and had deferred discussion on the second property until a future meeting.

AAHC Board’s Role, Meeting Format

Toward the end of the Dec. 21 meeting, AAHC executive director Jennifer L. Hall brought up a discussion item about the board’s monthly meeting format and information packet. She said she’d like the board meetings to be focused on strategic planning and big-picture issues. Currently, much of the meeting time is taken up with staff reports on AAHC’s day-to-day operations.

Saying she didn’t think that was the best use of the board’s time, Hall proposed cutting back on staff reports, suggesting they be presented quarterly instead of monthly. The board’s main responsibilities are fiduciary and strategic, Hall said, and she wanted to spend more time on those issues.

Ann Arbor housing commission board member Gloria Black, left, talks with Wenisha Brand, AAHC Section 8 housing manager.

Commissioner Gloria Black said she had no objection to Hall’s suggestion, but she wanted to ensure that the board was regularly updated on concerns that AAHC residents raise during public commentary. The board should be notified of how AAHC staff have followed up on those issues, she said.

Commissioner Andy LaBarre supported the change in format, saying it made sense and would make the meeting more efficient, with time for useful dialogue on strategic issues.

Commissioner Ron Woods asked for more details about the proposed format change. Hall explained to Woods that the current board packet for each meeting includes a level of detail that she doesn’t feel is necessary – for example, a report on vacancy rates for each AAHC property. Perhaps quarterly reports on finances and operations, with a summary overview, would be more appropriate, she said. Woods noted that he’s found the current reports useful, but he’d support anything that would make the organization more efficient.

Board president Marta Manildi indicated that her initial reaction was positive. The board has worked hard on “nitty gritty” areas over the last two years, she said, and it’s time to focus on long-term and strategic issues. At the same time, she added, the AAHC’s culture is not to set itself apart from the residents it serves or from the staff. It will take a certain judgement about the level of operational detail that the board needs, she concluded. They should try a new format, and the board can give feedback about whether it’s working, she said.

Hall also suggested changing the way that meeting minutes are written up. Instead of including a detailed description of the board’s discussions, she said, the minutes could provide a summary of the discussion and a note about the outcome, if a vote is taken.

Black expressed concerns about paraphrasing the board’s deliberations in the minutes. Hall described a spectrum of options – from a recording of everything that was said during the meeting, to a summary that provides a gist of the conversation. Manildi quipped that too much detail would result in terminal boredom, but that the city council minutes are too terse. The AAHC board would like a richer level of detail than what’s provided in city council minutes, she said.

Hall suggested providing more detail in the minutes when the board discusses a critical policy question. For other issues, a summary could be given instead of a blow-by-blow report.

LaBarre requested that the board’s electronic information packets be reduced to 3MB or less, to make them easier to access on a mobile device. Deputy director Nick Coquillard said AAHC will likely start posting the packets online, just like the meeting minutes are already. Manildi commented that making the packets accessible online would be a good move in general, to make the information more easily available to the public.

AAHC has installed a computer kiosk at its Miller Manor offices, Coquillard noted. It allows residents to access the commission’s website, the city of Ann Arbor’s website and other online resources. The goal is to add similar access at AAHC’s four community centers and at Baker Commons, he said. Coquillard explained that the kiosk is simply a computer monitor that hooks up to the city’s IT infrastructure, so the cost – and risk of theft – is minimal.

Public Commentary

Two people spoke during public commentary at the beginning of the Dec. 21 meeting, both addressing security issues.

David Guidas noted that he had spoken to the board about three months ago regarding security concerns at Miller Manor. One of his concerns is that the apartment doors can be easily kicked in. He held up an example of a metal wrap-around security plate that he’d purchased and was planning to install on the door to his apartment. He said he’d let commissioners know how it worked out.

Tracy Odgers told commissioners that she had lived at Miller Manor since 2003, and reported that there are all kinds of security problems. Security cameras in the building are really outdated, and theft is an issue – a VCR had been stolen in the middle of the day, she said. Odgers suggested updating the security cameras, and installing them in more locations, including hallways and elevators.

Public Commentary: Commissioner Response

Marta Manildi told the speakers that there is a working group of AAHC staff focused on security issues, not just at Miller Manor but throughout the city’s public housing properties. She said the comments would be forwarded to that group, and she thanked them for their input.

Gloria Black, the board’s representative for residents of AAHC properties, told the speakers that it takes a long time to address these concerns, but she wanted them to know that their comments had not fallen on deaf ears.

Present: Gloria Black, Leigh Greden, Andy LaBarre, Marta Manildi, Ronald Woods. Also: AAHC executive director Jennifer L. Hall; AAHC deputy director Nick Coquillard; Weneshia Brand, Section 8 housing manager; Kevin McDonald of the Ann Arbor city attorney’s office; Sharie Sell of the city’s human resources department; Margie Teall, Ann Arbor city council liaison.

Next meeting: Wednesday, Jan. 18, 2012 at 6 p.m. at Baker Commons, 106 Packard in Ann Arbor. [confirm date]

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Grace Singleton, a managing partner of Zingerman's Deli, sits next to Zingerman's co-founder Paul Saginaw as the planning commission deliberates on a proposed expansion of the deli, which was ultimately approved. Behind Saginaw is Michael Quinn of Quinn Evans Architects, who is working on the project. (Photos by the writer.)

The farmers market has no further steps to take – it opens on June 3, from 3-7 p.m. But the approval process for the deli expansion is far from over. After seeking approval from city council for its plans, deli partners will need to circle back to the city’s historic district commission – the site is located in the Old Fourth Ward historic district. The Chronicle has previously reported on their earlier efforts down this path: “Zingerman’s: Making It Right for the HDC.”

Pending approvals, Zingerman’s hopes to break ground on the project early next year.

Also at last week’s meeting, commissioners reviewed the site plan for the Windsong affordable housing project off of Stone School Road, north of Ellsworth. They ultimately approved plans for building 32 townhomes financed in part by the Michigan State Housing Development Authority. But concerns were raised over problems that some residents in the site’s existing 12 townhomes are causing for their neighbors. Three of those neighbors spoke at a public hearing, saying they’d like a higher fence around the property, at the least, to deal better with harassment, fighting, graffiti and other issues.

Zingerman’s Deli Expansion

The owners of Zingerman’s Deli are seeking site plan approval for a major expansion at their Detroit Street location. The roughly $3.5 million project calls for tearing down a small fire-damaged house at 322 E. Kingsley – directly behind the brick deli building – and putting up a two-story, 10,340-square-foot addition that would be connected to the 5,107-square-foot deli building via a glass atrium. A six-foot-tall privacy fence would be built between the site and the neighboring residences.

The two-story “orange house” located at 420 Detroit, between the deli building and Zingerman’s Next Door, will be worked into the design, according to the proposal. A green roof will be added to the deli’s existing one-story wing.

The city’s planning staff recommended approval of the site plan and development agreement, with one issue related to loading zone access off of Kingsley yet to be resolved.  If Zingerman’s decides it needs a curb cut and driveway off of Kingsley, they’ll need a variance from the city’s zoning board of appeals to allow a one-way drive opening.

Zingerman’s Deli: Public Hearing

Ten people spoke during the public hearing, including neighbors who supported the project, though some had concerns. There were also several speakers with ties to Zingerman’s.

Grace Singleton, a managing partner for the deli, thanked commissioners for their time and noted that the expansion plans had been in the works for four years. She recounted the history of the deli, how it had been founded at that location – the corner of Kingsley and Detroit – in 1982 by Paul Saginaw and Ari Weinzweig. They sold 2,000 sandwiches that first year, she said, compared with about 300,000 in 2009. They started with three employees, and now have 180. Over the years, they’ve added on in a piecemeal way – acquiring the building that houses Zingerman’s Next Door in the 1990s, for example.

The main goals for this expansion, Singleton said, include creating an efficient, unified design to take them through the next 25-50 years while preserving the key elements of the current campus. They’ll also be building a larger kitchen, receiving and storage area, as well as additional seating space, better ADA accessibility and a staff breakroom. Singleton said they’ve always been committed to Kerrytown and Ann Arbor, and want to give back to the community.

Both Christy Summers of Beckett & Raeder Inc. and Michael Quinn, a principal of Quinn Evans Architects, walked commissioners through highlights of the site plan and design. Summers noted several features, including better accessibility between buildings, a service alley to the east, some vertical landscaping elements mounted on the buildings, and the use of sustainable design techniques that could lead to LEED certification. Quinn said the expansion will be difficult to build, but will maintain the same “delightful feel” that customers now experience at the deli. He said they’ve met informally with the historic district commission to discuss aspects of the design, including removal of a building on Kingsley [one that's been gutted by fire]. He said he believes they have the HDC’s support.

Bernard Puroll was one of several neighbors who spoke. He described the expansion as an attractive, desirable plan intended to maximize profits, which was entirely appropriate. It would fit into the character of the neighborhood. He noted that the planning staff report indicates there are no nuisances created by the project, but he disagreed. He said his home overlooks the loading dock, and there are already significant nuisances created by noise and traffic from deliveries – that will only increase as the deli expands, he said.

Traffic management should be part of the site plan, Puroll added, especially at the intersection of Kingsley and Detroit. Large trucks often park in the loading zone along Kingsley east of Detroit, creating noise and traffic congestion. Also, noise abatement from the deli’s HVAC system isn’t addressed in the site plan, he noted. Hopefully as they build more storage, some of these problems will be diminished.

Jim Mogensen reminded commissioners that at their most recent working session, he’d talked to them about how processes can make people feel like processed cheese. He noted that the process for Zingerman’s had taken four years so far. The owners have strong roots in the community, he said, and have listened to residents and designed an expansion that is at least within the scale of other buildings in the neighborhood.

Mogensen asked commissioners to imagine how the Glen Ann Place development would have turned out if it had used the same process. [Glen Ann Place won approval from the planning commission and city council but was denied by the historic district commission. The situation ended in a lawsuit, settled in summer of 2007 in a way that allowed the project to move ahead. The lot just north of Ann Street on the west side of Glen Avenue is now denuded of the two houses that previously stood there, but nothing has yet been built.]

Noting that he lived nearby on Detroit Street, Peter Pollack said he had spoken in favor of the Zingerman’s project in the past and he was there to do the same thing again. Historically, “this site has always been a bit adventuresome,” he said, bringing retail into a residential neighborhood. The proposed expansion is consistent with the site’s past. Pollack said he’s lived on Detroit Street since 1980, and the fact that it’s a busy location is part of the joy of living there. He said the issues of noise and traffic are being addressed, and he hoped that the planning commission would approve the site plan.

Chris Crockett identified herself as president of the Old Fourth Ward Neighborhood Association. She lives about a block and a half away from the deli, and was glad that the owners had worked with the historic district commission on this project. The size and scale seem appropriate, she said. However, she had two concerns: 1) that there will be an increased nuisance to the neighbors, and 2) that the project sets a precedent. Owners of houses on Kingsley east of Detroit are “chomping at the bit” to turn the houses from residential into commercial use, she said. Crockett asked that the approval be framed in such a way as to indicate clearly that it was a special exception, not a precedent.

Patrick Thompson said he was a neighbor directly to the north of Zingerman’s, on Kingsley. The loading zone and activity from the front of the business spills over into the residential area, he said. There’s an alley created when delivery trucks park on both sides of the street on Kingsley, creating a blind spot that pedestrians have to navigate – two people have been hit there, he said. Clarifying that he didn’t want to impede the project in any way, Thompson said he was asking for greater restrictions be put on the residential side of the street – perhaps additional signs, or painting the curb yellow. He said that he and Paul Saginaw are great neighbors, but they do need to address the issue of traffic.

Rick Strutz, who’s also a managing partner at the deli, said that they’ve been working on these issues with Thompson, and that nothing Thompson said is untrue. They also are concerned for Zingerman’s staff, who come through that intersection too, he said. There isn’t one simple solution, he added. Creating a new receiving area will help make deliveries faster, and having a bigger storage area means that they won’t need deliveries as frequently. In some cases, vendors make 3-4 deliveries a week, which could be reduced significantly.

Noting that he was a board member of the Ann Arbor Downtown Development Authority, Gary Boren said he was speaking as an individual in support of the expansion. He lives in a house on East Washington that was built in 1890 – he mentioned that to show he’s also concerned about historic preservation. He echoed Crockett’s concerns about setting precedent, but in this instance, it was a very clear case and not something that could be confused as a precedent. He cautioned that there’s only so much you can exact from Zingerman’s, and that a lot has to be taken on faith. They aren’t a franchiser putting down a building without worrying about local implications – they’ve chosen to invest their energy and money and heart into this community because they live here and want it to be a good place.

Boren said he believed they would put their best efforts into dealing with the traffic problems. He said he strongly supported the project, saying it would bring more jobs, more customers, more tourists and more of the good type of density.

Zingermans’ Deli: Commissioner Deliberations

Bonnie Bona, the commission’s chair, began by asking staff about concerns that had been raised regarding noise from the HVAC system. What assurances did they have that it wouldn’t be a nuisance? Wendy Rampson, the city’s planning manager, said the building code covers mechanical equipment – it’s not a planning and zoning issue.

Bona noted that Glen Ann Place had been referenced during public commentary in regard to the approval process. She asked Jill Thacher of the planning staff to describe the approach that Zingerman’s is taking regarding the historic district issues. Thacher said that in 2008, Zingerman’s had asked the historic district commission for permission to demolish two buildings – at 322 E. Kingsley Street, which had been gutted by fire, and another at 420 Detroit Street, referred to by many people as the “orange house.”

The HDC determined that both houses are contributing structures in the historic district, Thacher said, which meant that the HDC couldn’t authorize the demolition via a “certificate of appropriateness” – the typical approval process. Instead, Zingerman’s is first seeking site plan approval from the planning commission and city council, and will then return to the HDC to seek a “notice to proceed.”

From the planning staff report on Zingerman’s site plan proposal:

There are only four circumstances under which a Notice to Proceed may be granted. Zingerman’s will apply under one that reads “The resource is a deterrent to a major improvement program that will be of substantial benefit to the community and the applicant proposing the work has obtained all necessary planning and zoning approvals, financing, and environmental clearances.” (From Section 8:416.) All approvals are required so that the HDC has as many assurances as possible that the applicant seriously intends to build the project and is in a position to do so. This is necessary since the Notice to Proceed will result in the permanent removal of historic resources.

In order to apply to the HDC for a notice to proceed, the project must have an approved site plan from City Council, have proof of financing, and have any other zoning or environmental approvals that may be necessary to build the project. In order for the HDC to grant the project a Notice to Proceed, Zingerman’s must prove that their project will be of substantial benefit to the community. How that benefit is defined and whether it is substantial enough to warrant the removal of contributing resources is determined by the HDC.

Picking up the discussion, Eric Mahler said Zingerman’s had a great site plan, fitting in with the character of the area. He appreciated their efforts at energy efficiency, and the wise use of space. He said everyone on the commission had likely traversed the intersection at Kingsley and Detroit, either by car or on foot, and knew about the issues there. He asked Zingerman’s owners to address in more detail how much deliveries would be decreased.

Grace Singleton said they hadn’t quantified the reduction in terms of percentages, but that off the top of her head she expected it could be as much as 30%. She said 60% of vendors deliver multiple times a week. The hope is that if vendors deliver three times now, they’ll reduce deliveries to twice a week. Those who deliver twice a week now would only come once. She said the 30% reduction was probably a conservative estimate.

Erica Briggs agreed with Mahler, and said she felt that Zingerman’s was doing everything it could to address the traffic concerns. Perhaps it was something the city or the Downtown Development Authority could help with too, she said.

Other commissioners also expressed support. Diane Giannola liked the green roof, saying it was a unique feature. Tony Derezinski said the site plan reflected an incredible use of space, packing a lot onto the site yet retaining a “homey” quality.

Jean Carlberg asked about the function of the alleyway behind the new building, on the east side of the site. Singleton explained that it would be a service alley, with an entrance to the kitchen. Currently, there’s overlap between the staff access and guest access, she said, and that’s a challenge. The new design would allow the staff to do its work more efficiently and behind the scenes.

In response to another question from Carlberg, Singleton said they plan to have a large portion of the new building’s second floor available for customer seating, both inside and on a deck.

Bona again raised the issue of mechanicals, saying that in the past the commission has required noise restrictions on rooftop mechanical systems. Michael Quinn of Quinn Evans Architects said that on the new addition, they’ll have a six-foot screen to create a visual and acoustic barrier. He also described design efforts aimed to reduce the need for intense heating and cooling. The building will be super insulated, he said, and they’ll use high-efficiency equipment. They’re considering a geothermal system as well. He also said they’d be relocating the HVAC system to a building that’s more remote from the residential neighbors, which should help improve noise issues.

Bona said she’d like to see something more specific in the plans, beyond what’s required by code.

Briggs wrapped up the discussion by praising Zingerman’s citizen participation report, saying they’d gone beyond what most petitioners do. [.pdf file of report from March 8, 2010 citizens participation meeting] In addition, during the meeting Zingerman’s co-founder Paul Saginaw distributed 13 letters of support from neighbors and business owners, including Timothy and Maureen Riley, who live in a home adjacent to the site; Elaine and Carl Johns, owners of Treasure Mart at 529 Detroit Street; Debra Kirk, owner of Emerald Dragonfly at 419 Detroit, directly across the street from the deli; Joe O’Neal, developer and chair of Kerrytown Market & Shops; and Jennifer Hein, dean of Community High School.

A letter from Randy Trent, executive director of physical properties for the Ann Arbor Public Schools, describes how Zingerman’s is working with AAPS and Community High School to develop a program that would consolidate solid waste management and recycling on the two sites. He noted in the letter that Zingerman’s has offered to pay for all costs.

Outcome: Commissoners unanimously approved the site plan and development agreement for Zingerman’s Deli expansion. It will be voted on by city council at an upcoming meeting, and also require a “notice to proceed” from the city’s historic district commission.

Westside Farmers Market

Also on Tuesday’s planning commission agenda was another item with a Zingerman’s connection . The Westside Farmers Market, located next to Zingerman’s Roadhouse at the intersection of Jackson and Maple, has been operating for the past four years every Thursday during the summer and early fall. However, last year the city notified organizers that they were in violation of zoning codes. The issue was initially addressed during a July 20, 2009 city council meeting. From a Chronicle report of that meeting:

The council’s agenda included an item to allow temporary outdoor sales and displayed goods and services as a special exception use for C3 commercial zoning districts. Carsten Hohnke (Ward 5) thanked the city staff for moving the change along quickly. The impact of the change included the ability to hold a farmers market in the Westgate parking lot next to Zingerman’s Roadhouse.

Council unanimously approved that change. The city allowed the market to be held last year without getting the special exemption use, and now market organizers are applying for their first one as they head into the 2010 season. This year, the market opens on June 3 and runs through Sept. 30. It’s open on Thursdays from 3-7 p.m.

Jill Thacher of the city’s planning staff gave a report to commissioners, noting that the market would occupy 28 parking spaces and that Westgate Shopping Center, where the market is located, has 40 spaces above the number required by code.

A special exemption use is required because the primary building there – Zingerman’s Roadhouse – doesn’t sell fresh produce. If it did, then temporary outdoor sales would be allowed without approval of a special exemption use. The staff recommended approval of the application.

Westside Farmers Market: Public Hearing

Only one person spoke during the public hearing. Rodger Bowser, a founder of the market and a Zingerman’s Deli chef, said he represented the market’s steering committee. Going into their fifth season, they’ll have about two dozen vendors this year, he said, compared to 10 when they started. The idea was to have a new market for small and medium-sized vendors, and to provide customers on that side of town with fresh produce. They would appreciate the commission’s support, he said.

Westside Farmers Market: Commissioner Deliberations

There were no deliberations. Jean Carlberg observed that since the market had been operating for a few years, they knew what was intended on the site and had no questions. It was great to have a market on that side of town, she noted, especially since Fresh Seasons Market had closed last year.

After commissioners voted unanimously to approve the special exemption use, Carlberg quipped: “Now you’re legal.”

Windsong Affordable Housing Project

The planning commission considered site plan approval for a 32-unit affordable housing complex called Windsong, located off of Stone School Road, south of I-94 and north of Ellsworth.

The city had approved a site plan in 2005 at that location for a 44-unit project called The Oaks of Ann Arbor. However, only 12 townhouses were built and the site plan expired in 2008. The current proposal calls for the development to be financed in part by low-income housing tax credits administered by the Michigan State Housing Development Authority (MSHDA).

Windsong: Public Hearing

Three residents of the surrounding neighborhood spoke during the public hearing. All expressed concerns over problems they’ve encountered with residents of the existing 12 townhouses.

Map showing the location of the Windsong townhome site. (Links to larger image)

Audrey Lucas told commissioners she lived behind the current buildings on that site and has a “terrible time” with trespassers – people from the complex will jump a fence between the properties, or tear it down. It’s a disconcerting feeling to no longer have peace of mind in your home, she said. The developer has promised to build a new six-foot fence, but she hoped it would be 10 or 12 feet. Lucas described the situation as a “terrible nightmare” for neighbors, who frequently call police because of fights that break out.

Rob Finch identified himself as president of the nearby Stone School Townhomes condo association. Residents of his neighborhood have many complaints about the current situation, he said, including people from the 12 existing units yelling after midnight on school nights. There’s little to no supervision of children there, he said, and kids throw rocks into the parking lot, deface the area with graffiti and one time even turned off power to a building. Residents in his complex are frightened and intimidated – but they don’t want to start a war, he said. When one young mother questioned a boy who had come into her yard, he pulled a knife on her – she later moved out, he said.

Finch objected to expanding the number of units in Windsong and making them all Section 8 eligible. Many people in his condo complex had worked hard to better their lives, and they didn’t want to live in an unsafe environment. He said Windsong was known for drug trafficking, and he couldn’t believe the police were excited about expanding the development. At the very least, he said, make the developers put up an 8-foot fence on the south side of Windsong.

Stacey Vanwashenova said she lived in the nearby Stone School Circle development and had a young family. The neighborhood dynamics have changed since the 12 units were built – having more housing there would just add to the problem, she said. She echoed Finch’s remarks, saying at the least the developers should built a taller fence.

Windsong: Commissioner Deliberations

Peter Jobson, president of Excel Realty Group – the new lead developer in the project – was on hand to answer questions. Commissioner Jean Carlberg began by asking whether the new units would be rental or owned. Jobson said they were planned to be rental townhomes. He also clarified that his firm had been asked to take on the project by the Michigan State Housing Development Authority (MSHDA) – his firm hadn’t been involved in the initial development.

Peter Jobson is president of Excel Realty, the new lead developer of the proposed Windsong townhome complex.

Carlberg asked – in light of what he’d heard from neighbors during the public hearing – how Jobson intended to select residents to live in the new units. Jobson replied that there’s nothing wrong with the existing property, but that people who are living there are causing disturbances.

The city’s planning staff had recently forwarded to him an extensive police log about incidents there, Jobson said, so he was now aware of the problems. It’s a matter of screening the residents, he said – if there are lease violations in those 12 units, then that needs to be dealt with. His firm had a long history of working with MSHDA, he said, and the state agency had confidence in their management and development skills.

With a 44-unit complex – the existing 12, plus the proposed 32 – it might be possible to have an on-site manager, Jobson said, which would help the situation. He also noted that the present owner was absentee, living in Florida. Jobson said his firm planned to take a strong role in managing the property.

Carlberg pointed out that Jobson’s firm was also out of state – it’s based in Ohio. How is that different, she asked, and when does the closer on-site management begin?

Jobson initially said it begins now, then modified that to say as soon as they started construction on the 32 new units. They don’t have ownership of the existing parcel at this point, he said. Eventually, however, they’ll take over asset management of the 12 units.

What does “asset management” mean? Carlberg asked – what will that enable them to do? Jobson replied that they know the existing owners well, and that they’ll be able to demand that the property be managed in ways that don’t create conflicts with residents of the 32 new townhomes.

At that point, Wendy Rampson – head of the city’s planning staff – asked Jobson to clarify his firm’s ownership status. They’ll be the managing general partner of the 32-unit phase, he replied. Rampson said she was perplexed, because that’s not how it had been presented to planning staff. Staff had been led to believe the entire site would be a single condo development, but now it seemed that the site would be divided into two parcels. If that’s the case, it wouldn’t meet the location’s R4B (multi-family) zoning, she said.

Jobson said that though the actual ownership of the 12-unit property isn’t theirs, if there’s one condo association and they control 32 of the 44 units, then they’ll have the majority vote in the association.

Tony Derezinski, a planning commissioner who also represents Ward 2 on city council, asked whether Jobson’s firm had ever worked with the owner of the 12-unit site, Epic Development Co. No, they hadn’t, Jobson replied. But they had developed several properties throughout Michigan, including the Armory Arts Village in Jackson, Mich. The important thing is to have strict residency rules, he said. They’d been brought in by MSHDA, which had made a loan to the previous developer, in order to finish developing the property and make a positive contribution to Ann Arbor, he said.

Evan Pratt asked if Jobson had met with public safety officials about the problems at the site. Rampson noted that the planning staff had just been made aware of the police reports the previous day, and had forwarded them to Jobson. She said they could also talk with the Ann Arbor Housing Commission, which administers the Section 8 voucher program for this region. When asked by Pratt if they should address this problem before voting on the site plan, Rampson suggested moving ahead. MSHDA was interested in moving the project forward, she said, and behavioral issues really were out of the planning commission’s purview.

Jobson assured commissioners that he’d be contacting Epic Development immediately. He would forward them the police reports, saying the last thing he wants is a chaotic situation.

Pratt wanted to include some of the behavioral issues in the development agreement with the city. When Rampson said those issues weren’t typically included in the development agreement, Pratt replied that they don’t typically encounter these concerns. He was worried that if there’s a change of ownership, it wouldn’t be addressed.

Erica Briggs pressed Jobson on his ability to manage the problems in the existing townhomes. She wondered why he hadn’t already picked up the phone to call the current property owners. It seemed like a recipe for disaster, she said, to build and fill an additional 32 units for Section 8 housing, before the situation was addressed. She added that it seemed to her like they should put the brakes on the project and deal with these issues.

Rampson said they’d just recently received the police report. MSHDA’s timeframe might be tied to financing issues, she said.

Eric Mahler expressed concern that the discussion of the Windsong development was stigmatizing people who used Section 8 vouchers. To the left is Jill Thacher of the city's planning staff.

Eric Mahler noted that a fence would not be an absolute deterrent to the problems on the site. However, he said he was concerned about the tone of the discussion, which he felt was possibly stigmatizing people in Section 8 housing. He didn’t want the public to think that everyone in Section 8 housing caused problems, or that MSHDA properties were inherently problematic. They shouldn’t have a “throw-the-bums-out mentality” toward everyone in the existing 12 units.

Jobson said he didn’t mean to suggest that they wanted to get rid of all the Section 8 tenants. He also noted that there’s no requirement that the housing complex be filled with Section 8 tenants. He noted that the owner of the 12-unit property is a partner in the new 32-unit phase, but doesn’t have a controlling interest. That’s why his company will have a lot of influence, Jobson said.

Diane Giannola asked whether they might postpone a vote until the city attorney looked at the issue of ownership. Jobson characterized the property as “fragile” in terms of closing the deal, and noted that KeyBank was a big player and wanted to move forward quickly.

Bonnie Bona said she had similar concerns to those cited by Briggs, and was uncomfortable feeling pressure to move forward, in light of the concerns that had been brought forward. She wanted the developer to come back with specific ways in which the problems would be addressed.

Saying he was glad another company had stepped in to take on the project, Derezinski noted that if the deal falls apart, nothing gets done. Though he had concerns, he was in favor of moving ahead with a project that provides affordable housing, which the community needs.

Carlberg pointed out that they were in a Catch-22 – they couldn’t get an on-site manager until the additional units were built. The site looks like a wasteland now, she said – the actual townhouses are nice, but the undeveloped property around them, which includes some foundations that are overgrown with weeds, looks abandoned. She wanted to add a contingency asking the developer to show concrete evidence that they were working on problems with the existing tenants.

It’s also important, Carlberg added, that the two councilmembers representing that area start working with police and neighbors to deal with the problems there. [The site is in Ward 3, represented by councilmembers Stephen Kunselman and Christopher Taylor.]

Briggs said she hadn’t been saying anything negative about Section 8 housing. Rather, it was unacceptable to her that people who had few housing choices – like those who used Section 8 vouchers – were forced to live in that type of situation. The city talks a lot about affordable housing, she said, but it’s unfair to locate that housing in areas where there are already problems.

After some further discussion, Pratt proposed three amendments stating that final site plan approval would be subject to: 1) review by the city attorney’s office regarding the project’s ownership structure, 2) recommendations from the city’s public safety department – incorporated into the development agreement, and 3) the owner of the existing 12 units and the new developer reaching an agreement about how to deal with the problems on the site.

Mahler objected, saying the commission was overstepping its bounds in trying to establish affordable housing policy. They can implore, but they can’t legally bind the new developer to work with the owner of the 12-unit site as a condition of site plan approval, he said. Derezinski agreed.

Briggs suggested putting together a memo outlining the commission’s concerns, so that council would be made aware of these issues. Bona noted that the minutes of the meeting would also reflect their discussion.

Mahler said he was quite uncomfortable with a public safety requirement. When Carlberg observed that it was standard in the past, Rampson clarified that years ago the site plans had been reviewed by the “crime prevention through environmental design” team, but those jobs had been eliminated.

Derezinski characterized the first amendment – regarding the ownership structure – as valid, but the others were “warm fuzzies.” He was concerned that their actions might discourage MSHDA and KeyBank from pursuing the project.

The amendments were voted on separately, with the amendment on reviewing the site’s ownership structure passing unanimously. The amendment requiring the development agreement to reflect recommendations from the city’s public safety department also passed, with dissent from Mahler and Derezinski. The third amendment – requiring a report from the new developer and current owner on efforts to address problems on the site – failed, with only Bona, Briggs, Carlberg and Pratt voting in favor of it.

Overall site plan outcome: The Windsong site plan was approved, with dissent from Mahler. Commissioners Westphal and Woods were absent.

Present: Bonnie Bona, Erica Briggs, Jean Carlberg, Tony Derezinski, Diane Giannola, Eric Mahler, Evan Pratt.

Absent: Kirk Westphal, Wendy Woods.

Next meeting: The planning commission next meets on Tuesday, June 1 at 7 p.m. in city hall council chambers, 150 N. Fifth Ave. [confirm date]

The housing commission is responsible for 355 public housing units spread over 18 sites – or around 50% of the affordable housing stock in the city – plus 1,300 Section 8 vouchers for a three-county area.

Kerry Laycock, the consultant who gave the city council a presentation on the reorganization of the housing commission, gave a slide presentation from the podium using this laptop computer. (Photos by the writer.)

Keys to the reorganization are beefing up the Section 8 program with a dedicated financial analyst and a program manager, and redefining roles of the executive director and deputy director, as well as outsourcing maintenance of the housing units.

Outsourcing maintenance will reduce the housing commission staff by six people – two temporary employees plus four union workers.

Alan Levy, who chairs the housing commission board, told councilmembers that the reorganization had already been approved by a 3-2 vote of the housing commission’s board at a special meeting held on Jan. 6, 2010.

The two dissenting votes, Levy said, were in overall support of the plan, but had reservations about the union employees whose positions with the housing commission would be eliminated.

Kerry Laycock, at the podium, gives the city council the grim verdict from a needs assessment he helped conduct of the Ann Arbor housing commission. Seated are Marge Novak, interim executive director of AAHC, and Alan Levy, chair of the AAHC board.

The need to reorganize, Levy told the council, was prompted by a difficult last few years dealing with personnel and staffing issues, as well as chronic underfunding of the U.S. Department of Housing and Urban Development (HUD).

What was the city council’s role in the reorganization? At its May 18, 2009 meeting, the city council had approved a contract with Schumaker & Company for $117,040 to perform a needs assessment for the housing commission. It’s the result of that recommendation that led to the adopted reorganization.

And for the next two years, the council may be asked to help bridge a $138,163 funding gap to help with the transition as the commission reorganizes.

Anecdotal Indicator of Public Housing Conditions

In the course of deliberations, mayor John Hieftje gave one anecdotal indicator that the housing commission was already beginning to turn the corner on some of its past difficulties.

He told his council colleagues that a couple of years ago, residents of Ann Arbor’s public housing had begun to visit his Friday open office hours to share complaints with him.

And Tony Derezinski (Ward 2), who serves as the council liaison to the city’s housing commission, described the housing commission’s situation during his most recent period of service as “a trying year.” He summarized it by saying, “It was a mess.”

However, Derezinski described the appointment of Marge Novak as interim executive director in May 2009 as “a godsend,” while emphasizing that the housing commission was still not “out of the woods.”

Hieftje said that six to nine months ago, the visits by public housing residents to his weekly office hour had stopped. Why had they shown up in the first place?

Problems with the Housing Commission

Kerry Laycock spoke on behalf of the consultant that had performed the needs assessment – Schumaker & Company. In the course of his presentation, he painted a picture that could fairly be described as grim.

That assessment had been based on staff interviews, community/stakeholder interviews, focus groups with public housing residents, financial analyses and benchmarking with other communities.

Measured against its mission statement, Laycock told the council, the housing commission was not doing that well. The commission’s mission statement reads [emphasis added for readability]:

Mission Statement

Ann Arbor Housing Commission (AAHC) seeks to provide desirable housing and related supportive services for low-income individuals and families on a transitional and/or permanent basis. AAHC will partner with housing and service providers to build healthy residential communities and promote an atmosphere of pride and responsibility.

But Laycock described a commission that provided desirable housing only in the sense that there were many people who needed a place to live and were signed up for a spot – the properties themselves, he said, were outdated and poorly maintained.

The supportive services provided were limited and not meeting the current needs of residents, he said. And he described the housing commission as a relatively isolated agency that had limited interaction with other community organizations and programs.

Some of the challenges faced by AAHC, Laycock acknowledged, were a result of an environment of relative instability caused by HUD. By its own measure, he said, HUD funds its programs at a level of 82% of what they need. The underfunding, plus the fact that funding decisions are made late in the year, had led to less-than-optimal operations by AAHC.

Given the unstable environment of HUD, Laycock said, it was important to secure additional funding, outside of HUD. Because AAHC had not done that, he continued, it was not able to make up for the HUD shortfall, nor provide support services needed by the residents of its housing, nor keep up on important maintenance and modernization of its housing stock. His presentation described the housing stock as amendable to better maintenance, but as outdated and inherently substandard.

Laycock described one approach to updating public housing as tearing it down and starting from scratch – an approach that had been taken in Grand Rapids, he said. However, Stephen Kunselman (Ward 3) drew out the fact that in Grand Rapids, the housing commission had been separated out from the city’s administration – something that Laycock’s analysis did not recommend. If anything, Laycock said, the AAHC should have a closer relationship with the city.

Adopted Solutions: Staffing and Maintenance

Laycock identified the key strategic objectives of 1) rehabilitating and redeveloping AAHC properties, 2) expanding funding to include non-HUD sources, 3) strengthening of support services, 4) improving management oversight and 5) improving internal efficiencies.

The reorganization adopted by the housing commission seeks to realize these objectives by redefining and adding administrative staff roles (a plus of two positions), while outsourcing maintenance of the properties (a minus of six positions).

Staff Roles

To understand the additions to the city housing commission staff that have been adopted, it’s useful to understand the distinction between the public housing versus the Section 8 part of the AAHC mission.

The low-income public housing component of the AAHC mission involves ownership, maintenance and management of places for people to live. The Section 8 housing choice voucher (HCV) program, on the other hand, is a voucher system – those who are served by the program receive a voucher that can be used to pay rent to a private landlord. In the Section 8 program, prospective tenants contact landlords directly, and landlords are supposed to screen tenants the same way they would those without vouchers.

The arithmetic of staff additions would add a financial analyst to the Section 8 program. Together with the upgrading to financial analyst of a current accounting clerk position for public housing, that would give each of the housing commission’s programs a financial analyst. Laycock described the advantage of the analyst over a clerk position: An analyst can interpret and summarize financial data and make recommendations – as opposed to a clerk, whose responsibility is more limited to recording and inputting data.

The second additional position would also go to support the Section 8 program in the form of a separate manager of that program.

Besides adding positions, the reorganization redefines the roles of staff, from site managers up to the executive director level. Site managers would no longer supervise maintenance staff – but they’d still have a relationship with the vendor for outsourced maintenance. The strategy will be to relieve these on-site managers of maintenance-employee supervision so that they can focus more squarely on meeting residents’ needs. That refocusing of task is reflected in a job title change from site manager to residency manager.

The executive director and the deputy director would be made regular full-time positions. The executive director will be less focused on operations than in the past, with a primary responsibility for strategic planning,  rehabilitation of existing housing, and development of new housing. The deputy director will split time between operations and grant writing. Winning grants is seen as key to bridging the HUD funding gap, as well as eventually covering the increased staffing costs of the reorganization.

Marge Novak, interim executive director of Ann Arbor's housing commission, explains to the city council that part of the goal of reorganization is to secure additional grant funding.

Optimism that there was grant money available that the AAHC commission was not currently exploiting – due to a lack of grant-writing resources – came from interim executive director of AAHC, Marge Novak. Sandi Smith (Ward 1) clarified with Novak that the AAHC was currently “leaving money on the table.”

And winning grants was the answer to a question Carsten Hohnke (Ward 5) had about how much funding the city council might be asked to provide over time – operations were ongoing expenses every year, he cautioned. The city council’s prior commitment to the housing commission for FY 2010 and FY 2011 is $90,000, but the financial implications of the reorganization – adding people and expanding existing roles – will amount to $228,163.

In his comments, mayor John Hieftje characterized the strategy as spending a little money in the short term in order to get someone in place who can go after more money in the form of grants.

The options for addressing the $138,163 difference, Laycock said, included using AAHC reserves, looking at funds held by affiliated nonprofits, using in-kind services from the city of Ann Arbor, and the sale/lease of maintenance vehicles as a part of the outsourcing contract. But Laycock gave city councilmembers a heads-up on Monday night that the AAHC could be asking them for money from the Ann Arbor general fund as well. That’s why Hohnke wondered if the request would be one that was repeated into the future.

Laycock and Novak seemed confident that the investment in grant writing resources would pay off – any additional request from the city council would be confined to achieving the transition to the new, reorganized housing commission.

Alan Levy, chair of the Ann Arbor housing commission board, clarifies a point with Jayne Miller, community services area administrator. In the background is Joan Doughty, director of the Community Action Network (CAN).

Also a part of the transition strategy would be the addition of new positions as more funds become available. Jayne Miller, community services area administrator, told the council that the time frame for the transition to financial sustainability was expected to be about two years.

Maintenance Outsourcing

Also a part of the gradual approach to the transition is the change to outsourced maintenance. There are two temporary positions that would be eliminated as soon as an initial contract with a maintenance vendor is signed. But four other American Federation of State, County and Municipal Employees (AFSCME) union positions would be absorbed elsewhere in the city workforce as positions become available.

Another aspect of the gradualness of the transition is that an outside vendor for maintenance will first engage in a pilot project that encompasses work currently done by two temporary employees – at a single building or site. The outside vendor would then assume additional work as the AFSCME positions transition to other positions within the city.

In his presentation, Laycock characterized the move to outsourced maintenance as the most controversial aspect of the reorganization, but stressed that is was not a matter of chasing dollars – the idea is to provide better maintenance of the properties.

There would be a request for proposals (RFP) process for the outside maintenance vendor, Laycock said, and he saw that as an opportunity for partnering with other agencies. He did not elaborate on that, saying that he did not want that possibility to affect the RFP process.

Councilmember Questions on AAHC

Other commentary by councilmembers covered a range of topics.

Potential Partnerships

The relative isolation of the AAHC from other entities with complementary missions was identified as a problem in the operational needs assessment.

Carsten Hohnke (Ward 5) asks for clarification about the potential for partnerships by the housing commission with other agencies.

So Carsten Hohnke (Ward 5) asked where the potential for partnerships was. Interim executive director Marge Novak described how some collaborations already existed – with Peace Neighborhood Center and Community Action Network (CAN). Further, she described how the county’s Employment Training & Community Services (ETCS) department provided meals to two of the public housing locations – Miller Manor and Baker Commons.

Alan Levy, chair of the AAHC board, added later that there was a memorandum of understanding with the Interfaith Hospitality Network that allowed three referrals per year on a priority basis for the homeless, with no wait-listing required.

Wait-lists

From Mike Anglin (Ward 5) came a question about wait-list times. Novak said that for public housing, the wait-list was around 700 people and that there were a couple hundred on the wait-list for Section 8. The Section 8 wait-list, Novak told the council, had not been open “in years.” The public housing wait-list had been opened a few times over the last few years. [Currently, the city of Ann Arbor's website indicates that the wait-list for public housing is closed.]

The city council had been asked earlier in the fall to approve a measure that allocated funds on an emergency basis to provide housing vouchers for homeless families. At Monday’s working session, Sandi Smith (Ward 1) wanted to know if these were the same kind of vouchers. Novak said that those came through the office of city/county community development. But Section 8 did include family vouchers, Novak clarified.

Smith also wanted to know if the problem with Section 8 wait-listing was a lack of supply – are there enough landlords? Novak described the problem as the hundreds of people who are waiting for vouchers as the larger issue. She said there were around 1,000 landlords in the three-county area who had properties available.

How Does Ann Arbor and Its City Council Fit In?

From both Ward 3 council representatives – Christopher Taylor and Stephen Kunselman – came questions about the nature of the city’s relationship to the housing commission and the council’s role specifically. After hearing Laycock explain that the housing commission had adopted the reorganization and that the council did not need to approve it, Kunselman asked: “What is our responsibility?”

Jayne Miller, community services area administrator, clarified that there was no funding responsibility – HUD is the funding agency. However, Miller continued, the city council approved appointments to the housing commission’s board. Further, she said, the city council had invested considerable resources in its commitment to affordable housing, and the housing commission was responsible for around half of all affordable housing units in the city.

Taylor wondered what the structure of the housing commission was with respect to the city’s actual organization. Specifically, Taylor was interested in how the housing commission’s staff related to the city’s bargaining units. [In his presentation, Laycock had described how part of the reorganization plan entailed a recommendation to adopt a compensation policy that would put pay at 90% of the market midpoint.]

In responding to Taylor, Laycock clarified that housing commission staff were, in fact, city employees. As such, he said, every mandate for Ann Arbor city employees applies to them – with no independent ability to attach any funding to those mandates. The HUD program, which involves a federal department that relies on local authorities, which in turn provide oversight to additional entities, was characterized by Laycock as a prescription for confusion.

Taylor also picked up on a data point about Section 8 vouchers that emerged in the presentation: 70% of voucher recipients are non-Ann Arbor residents. Taylor wanted to know if the AAHC looked for funding from the communities where they do reside. The clarification was that HUD assigns areas of service to each authority and that the AAHC serves a three-county region.

Taylor also elicited the clarification that there is in some sense a “margin” of benefit provided by Section 8 to the public housing component of the AAHC. That is, funding for Section 8 administration helps cover costs associated with the public housing part of the AAHC.