UNHP Board President Joseph Muriana welcomed people to Fordham's Faculty Lounge at 9:20 and introduced Guillermo Franco, Director of Program Development at UNHP.

Guillermo told "A Tale of Two Deals". He explained that UNHP approaches community ownership deals in a particular way. UNHP gathers information on the rent, the income level of the tenants and the physical needs of the building. Then, UNHP evaluates the kinds of financing for which the building is eligible. And then, UNHP determines the amount that can be paid for acquisition.

He charted out on a blackboard a comparison of two affordable housing deals, one completed in l992 and one currently under consideration. Both buildings were of similar size. Both buildings' tenants' incomes were mostly under 50% of the area median income. However, the deal that closed in l992 had pre-rehab rents of $80 a room while the current deal has rents of approximately $140 a room. The l992 deal needed approximately $20,000 a unit in renovation and the current deal needs approximately $45,000 a unit in rehab. With the loan money and rental subsidy money available in l992, the deal was able to afford a purchase price of approximately $6,500 a unit. With the loan and rental subsidy money available in l998, the deal can afford a purchase price of approximately, $1,500 a unit.

Guillermo summarized the significant differences:

a) the loss of rental subsidy dollars limits the possibility of charging rent increases;

b) the cost of renovation has risen because buildings that have been ignored for a long time need more work due to the deferred maintenance and because there is much greater sensitivity to lead poisoning concerns; and,

c) the amount of public dollars has declined while the demand has increased.

John Reilly, the Director of the Fordham Bedford Housing Corporation spoke about a proposal to develop a pilot project using existing Section 8 rental subsidies. The Capped Section 8 Program would in effect allow a local Housing Authority to divide up larger subsidies into smaller ones, reaching more families with the same amount of money. The proposal would use recaptured Section 8's to provide subsidies in the $200-300 a month in a renovated apartment, stretching Section 8 dollars to benefit more families and apartments.

Kevin Alter of Dougert Management spoke about the benefits of Heat Computers. Dougert has used computers to reduce fuel consumption by 30%. The computers are installed in the top floor apartments and set in the room furthest from the kitchen. When the majority of computers indicate that the target temperature has been hit, then the boiler will kick on. Kevin indicated that there can be problems with tenant reaction to the computers. Initially, the temperature in the apartment may be less than what people are used to; Dougert sends people with a whip thermometer to check the apartment temperature and to determine whether there is a problem in the apartment; for instance, sometimes the apartment's radiators have water in them and reduce the effectiveness of the heat. Sometimes, the tenant has air conditioners sitting in the window allowing cold air into the apartment.

Jim Buckley of UNHP spoke about water and sewer costs. On a practical day to day basis, he urged people to check meter readings, examine DEP programs that might reduce charges, and be cautious with rate consultants who charge percentages of savings. On water cost policy, he reported that DEP approved a 4% increase for the coming year and are projecting a 5.4% increase in each of the next 4 years. There is discussion about developing a capped rate for multi-family housing lower than the existing $500 per apartment and a special classification for certain types of tenant or community owned housing.

Jim closed by touching on the need for streamlining tax abatement policies and noting that the warm winter and cheap fuel prices has kept many buildings from facing difficult cash flow problems.

Charles Jones of the Fannie Mae New York Partnership office presented a preview of the $25 million mini-loan program targeted for smaller multi-family buildings in need of $100,000-$750,000; the financing will be fixed rate, 30 year money. Fannie Mae developed the program in coordination with UNHP and will be co-sponsoring a press conference in mid-June to begin publicizing the program.

Matt Kelly of Chase Manhattan addressed the limited resources available to non-profits. He pointed out that groups have been utilizing increasingly scarce tax credit dollars and the New York State Housing Trust Fund along with the City's Participation Loan program and private funds provided by institutions like Chase.

Joseph Muriana opened up the floor for questions and comments. There was a question about the impact of welfare reform; John Reilly noted that they have not felt the impact yet. However, he stated that some buildings have 25% of their rents coming from public assistance, so it could be assumed that as time limits kick in that the rents in these buildings will be affected.

Howard Banker of the Low Income Housing Fund commented on the possibility of banks holding loans with flexible terms in portfolio and therefore avoiding the uniformity of underwriting required by the secondary market. He also noted that the City has legislative capacity to wipe out back taxes on specific buildings with city council approval through article 606. Another audience member stated that the City is unlikely to use the authority while they are trying to sell city-owned buildings in certain neighborhoods.

Joseph Muriana announced that UNHP would summarize the discussions and send them out to the attendees and reminded people that UNHP's 15th Anniversary celebration is scheduled for Wednesday, May 27th at 5:30 at Fordham's Rose Hill campus.