A housing trust can advance the Town’s local housing goals and help to ensure that we continue to have a minimum of 10% of our housing stock certified as affordable.By establishing designated funds and creating a board to oversee their use, Danvers provides a local way to advocate for, and facilitate the development of, affordable housing.Using such a tool represents an alternative to the creation of affordable units under the State’s Comprehensive Permit statute, Chapter 40B.As we are aware, many of our children, Town employees and current Danvers’ residents cannot afford to purchase a home in town because of the high cost of housing; the trust assists Danvers establish a locally-directed process to help meet this need.
Although the concept of local housing trusts is not new, the state legislature concluded that – due to increased availability of local funding through inclusionary zoning, negotiated development fees, and state and federal funding – there was a need to provide specific legislation to allow communities to form their own municipal affordable housing trust funds.In 2005, the Massachusetts legislature passed the Municipal Affordable Housing Trust Fund Law (MGL c.44 s.55C), which effectively simplified the process of establishing a local housing trust and allowed it to be created through the town meeting process.
The new law also set guidelines on what local housing trusts can do, specifies who can serve on a local housing trust board and establishes the powers a community can grant the board.Since the new law passed approximately 100 communities in Massachusetts have established municipal affordable housing trust funds
Trustees serve for a term of two years except that three of the initial trustee appointments were appointed for one year in order to stagger terms.They may be re-appointed at the discretion of the Board of Selectmen.
The trust consists of seven voting trustees.The Board’s membership would always include one member of the Board of Selectmen and one representative from the Danvers Housing Authority.The Town Manager, or his designee, would serve as a non-voting member.Remaining trustees must be Danvers’ residents with expertise and experience relative to housing management and development, to include attorneys, contractors, realtors, and financial professionals.
The sources vary among housing trusts.Under MGL c.44 s.55C sources of funding for trusts include: Community Preservation Act funds, inclusionary zoning payments, negotiated developer fees, the town’s general fund, grants, gifts, and private donations. However, any funding from the Town’s general fund would require a Town Meeting action.In addition the Town of Danvers receives approximately $36,000 a year through the HOME Investment Partnership Program (HOME) which could also be managed by the Housing Trust.It is important to note that these HOME funds are reallocated if not committed within a one year period.
Yes, however many of the activities listed above require a lengthy process which currently requires further Town Meeting action.By establishing a housing trust the trust is able to buy and sell property without waiting for a Town Meeting to be scheduled – often, real estate opportunities that would preserve and create affordable housing are highly time-sensitive.It would operate in a similar fashion to the procedure used to acquire open space in the community.Town meeting voted more than 30 years ago to allow the Town Manager to negotiate and acquire open space without further Town Meeting action as long as the parcels were listed in the Town’s Open Space and Recreation Plan.Through the years this has allowed for the acquisition of many parcels in a timely fashion without further approval from Town Meeting.
This question was forwarded to Town Counsel and his written opinion in part stated “On general, ‘trust principles’, the trust is a separate legal entity from the person or persons creating it.Therefore, in a legal sense, an Affordable Housing Trust created by a Municipality under C. 44, section 55C of the Mass. General Laws is a separate legal entity from the town or city, which chooses to create it.”Thus it was his opinion that the financial actions of the Trust would not impact the Town’s financial options.
A local housing trust allows municipalities to designate certain funds for affordable housing, segregate them out of the general municipal budget into a trust fund, and use the funds for local initiatives to create and preserve affordable housing.Examples of what a local affordable housing trust fund can do include:
Provide financial support for the construction of affordable homes by private developers (non-profit or for-profit);
Rehabilitate existing homes to convert to affordable housing;
Increase affordability in new housing development projects;
Develop surplus municipal land or buildings;
Preserve properties faced with expiring affordability restrictions;
Create programs to assist low and moderate income homebuyers;
Create programs to help low and moderate income families make health and safety repairs;
Educate and advocate to further affordable housing initiatives.
The Danvers Housing Authority (DHA) is a state controlled entity. It is funded and managed by the State and while it works in partnership with the Town, the DHA does not derive funding from any Town source, nor does it act at the direction of the Town management. The use of the title “Danvers” is the States method of delineating the community the Housing Authority serves, not unlike the former identification of the “Danvers State Hospital”.
As identified by the DHA Director Cindy Dunn, the mission and agenda of the DHA’s is different than the Town’s. The DHA operates under State statute, and is regulated through the Department of Housing and Community Development. It is not part of DHA’s mandate to buy and sell real estate, although they are able to acquire and hold property on a self-supporting basis. DHA can purchase real property but cannot sell property unless a legislative act is proposed and approved. DHA has very limited financial home ownership opportunities through its voucher program – DHA supports its tenants on a rental basis.
DHA is regulated by DHCD and HUD and rental opportunities under most circumstances will mirror those regulations. The Trust could be more flexible in its rental structures.
A local housing trust can, for example, acquire property, partner with Habitat for Humanity, and eventually sell the completed units to income-qualified individuals to expand home ownership opportunities in Danvers. This type of project could not be conducted by the Housing Authority.
Contributions from the new Multi-Family Affordability Provision (made as payment-in-lieu of units) directed to the trust can be used in a variety of ways – for example, funds could be used to “buy down” market-rate housing and, with a deed restriction, keep the unit permanently affordable to all subsequent owners. Again, such a process would be outside the scope of the Housing Authority.
The housing trust does work cooperatively with the DHA, however, and there might well be opportunities to collaborate on a range of rental projects through tenant selection, project management and exploration of joint funding options. Each entity could serve complementary functions in working to expand the supply of affordable housing in Danvers. DHA may well be an applicant for trust funds but could not adequately distribute funds without also creating another trust entity.
A final note: the DHA Director, Cindy Dunn, sat on the subcommittee that drafted the Trust warrant article – the DHA looks forward to working with the trustees on increasing housing opportunities for Danvers residents and enthusiastically supports the effort to create a Trust.