Communities seek unique solutions to foster more affordable housing

BY KATE COIL

In 2016, officials with the city of Paris were contacted by the U.S. Department of Agriculture to see if they wanted to be a pilot community in a new program to address neighborhood blight and housing issues.
City Manager Kim Foster said that pilot program has evolved into a much bigger city-wide effort known as Preserve Paris. The program tackles city neighborhoods house by house, street by street, working to make improvements.
“We knew that doing something citywide was way more than we could handle at one time,” she said. “Focusing on individual neighborhoods – even a few blocks or just one street – works really well. We have kind of hit all of our problematic areas.”
The program has been able to keep going successfully since the initial pilot thanks to the contributions of the community.
“One thing we look for in choosing which neighborhood we go into are members of the community who are willing to participate,” Foster said. “If we are always the ones cleaning up and there is no buy-in from the community, then it doesn’t last very long. What we’ve found is when there is buy-in from that neighborhood – whether there is a formal neighborhood association or not – we find the work we do there maintains itself over the long haul.”
Paris has also explored more ways to help people in the city get rid of unwanted or unused items.
“Our reuse days have been really effective,” Foster said. “We tell people in particular communities that if they have anything they don’t want any more to sit it on their curb. For the next couple of days, anyone who drives through the neighborhood over the weekend and sees something they want on the curb can take it. Then, on Monday morning, our public works crew comes through and picks up anything that’s left out. That has worked so well we have actually instituted a bulk pick up program.”
Ken Thorne, director of economic development for the Northwest Tennessee Development District, said another way that government officials can help with affordable housing issues is by educating themselves and their community.
“City leaders can sit down with developers, and discuss the community’s needs,” he said. “They can also direct homeowners to the programs that are available, let them know that there are resources available to them. Anything they can do to promote homebuyer education is also helpful. The University of Tennessee extension offices offer homebuyer education classes as well as post-purchase training and classes that help buyers know they need to budget for and how to take care of their house. THDA is headed that way as well to offer more training to homebuyers.”
Of course, affordable housing issues aren’t a one size fits all approach. Some cities may find some strategies work better than others. Lindy Turner, executive director of community housing development organization Clinch-Powell Resource Conservation and Development Council, said cities might look into whether or not the cost of permitting fees are inhibiting affordable construction.
“For some communities that own their utilities, waving tap fees for companies building affordable housing can be one way to encourage that construction,” she said. “Sometimes, it can cost $3,000 to get permitting done, which can be a lot – especially for people building affordable housing. A lot of times, the profit on a house for the developer isn’t even $10,000, so why would you build affordable housing when $3,000 of your possible net is being eaten up through permits.”
The two main sources of housing funding in the state of Tennessee come from the Tennessee Housing Development Agency and Community Development Block Grants. Pamela Caskie, director of development with the Sevierville Development and Planning Department, said her city has taken advantage of THDA funds in the past.
“We have been working with THDA to locate low-income tax credit projects here,” she said. “Those aren’t HUD entitlement funds like some of the larger cities get. The TDHA tax credit helps draw the cost of building new units. We are insisting that anything built can be afforded by someone with only 80 percent of the median income or below.”
However, CDBG funds are often more important for infrastructure projects like sewer and water lines and competition for TDHA funds are stiff. Additionally, most funding sources for housing programs require the home to be owner-occupied, preventing work on rental properties that are often in great need of help.
As a result, some cities have taken creative financial approaches to encouraging affordable development. Caskie said her city has explored using payment-in-lieu of taxes or PILOT programs as an alternative funding source.
“These are designed to get over some of the cash hurdles that developers face for building lower-income housing, especially in the early days of a project,” She said. “PILOTs for housing aren’t the top of our priority list. PILOTs for industrial or corporate entities brings in no new sales or property tax revenues but also no kids. When you do a PILOT for housing, you don’t get taxes and you have kids moving in. It’s not the perfect solution, but in our case, we have to have the workforce to take care of the tourists whose money does fund the schools. PILOTs were not the first choice; they were the last thing on the table we felt we had the ability to use.”
Turner said many cities have found taking condemned properties and turning them over into development agencies and nonprofits to build new, affordable housing work is a solution that not just removes blight but also prevents a blighted structure from becoming a blighted vacant lot.
“You are helping with city blight,” she said. “You can renovate these properties and improve the neighborhood overall. Communities aren’t getting taxes on them already, but if they can provide affordable housing groups or non-profits with those properties to rehabilitate, they can return something better to the tax rolls.”
Foster admits that removing blight is sometimes a lot more difficult than it seems on paper, but Paris has found collaborating with other regional officials can help.
“It’s a very long, drawn-out process,” she said. “One of the things that helped us remove a lot of our blighted properties is our new county attorney, who worked really hard toward catching up on the tax sales. It had been many years since we had an across the community tax sale. Some of these properties were on the roles for a $1 a year. A lot of times these properties are abandoned or people have walked away from them. When it defaults into the ownership of Henry County, then it’s not 100 percent clear title, but is as close as you can get.”
Foster said the city of Paris has seen some success with a program designed to help stabilize neighborhoods by encouraging redevelopment.
“One thing we have just started doing is working with landlords to demolish structures for rebuilding,” she said. “We had a person buy some properties in one of the neighborhoods we had been working in and asked if the city could help tear it down. We didn’t feel like it was the city’s responsibility to demolish the house for him, but we worked out a plan where we took the structure down at a charge of $2,000. If he would take steps to rebuild something acceptable on that lot within the next 18 months, we will waive the $2,000. If not, we will put a lien on the property until its payable.”
Foster said it can be difficult to try to incentivize affordable housing, but the alternative is residents being forced to live in substandard conditions.
“We see people who buy properties that are substandard and then rent it out without putting a penny into it,” she said. “We have some guidelines in our ordinances for rental properties that we could enforce. But one of the main reasons we have not moved forward with enforcing a rental property maintenance program is because it would result in landlords evicting people onto the streets rather than cleaning up. We have been hesitant to push the envelope because a roof over someone’s head – no matter how poor it is – is better than no roof at all. Sometimes, the landlord will also pass those costs off to renters who already can’t afford it.”
While the city of Paris has contemplated creating a property management program, Foster said cost is still the major issue.
“We would have to put in place some sort of revenue generating component into that program to be able to fund it, especially in today’s environment,” she said. “We don’t have enough money to hire staff to run a program like that.”
City leaders are also coming together on the national level to discuss housing issues. At a recent summit in Washington, D.C., the National League of Cities (NLC) National Housing Task Force held its inaugural meeting to suggest ways communities could best respond to their housing needs.
National Task Force Chair and Washington, D.C. Mayor Muriel Bowser said the goal of the newly-formed task force is to help municipal leaders find local solutions to what has become an ongoing national problem.
The NLC encourages city leaders to stay informed and learn about what tools might be available to them by visiting www.nlc.org/topics/community-housing.