1 1 2 PIMA COUNTY HOUSING COMMISSION 3 PUBLIC HEARING 4 5 6 7 8 12 September 2005 9 10 5:30 p.m. 11 Kino Teen Center 12 2805 E. Ajo Way, Room 102-103 13 Tucson, Arizona 14 15 16 17 18 19 20 Reported by: Patricia Calabro, CSR, RPR, CR 21 Certified Court Reporter CA CSR No. 7906; RPR No. 20010; AZ CR No. 50047 22 ____________________________________________________________ CALABRO REPORTING SERVICES, L.L.C. 23 549 North Sixth Avenue Tucson, Arizona 85705 24 520.798.1808 800.538.6692 www.calabroreporting.com 25 CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 2 1 2 Appearances: 3 Commission Members: Ken Anderson 4 Kathleen Buske Steve Craddock 5 Tim Escobedo David Greenberg 6 Frank Moreno Jon Miles 7 Ed Taczanowsky Frank Thomson 8 Staff: 9 Hank Atha Gary Bachman 10 Margaret Kish Daniel Tylutki 11 Betty Villegas Marcos Ysmael 12 Also present: 13 Patrick Cavanaugh Richard Elias, Pima County Supervisor 14 Emily Nottingham Samantha Romero, Intern 15 Gloria Soto Maria Soto 16 17 18 19 20 21 22 23 24 25 CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 3 1 PROCEEDINGS 2 3 MR. MORENO: Time to get started. 4 First of all, I want to thank you all for coming. 5 My name is Frank Moreno. I'm the chair of the Pima County 6 Housing Commission. 7 We'll start off by introducing the rest of the 8 members; David Greenberg is the vice Chairman. At the end 9 of the table we have Kathleen Buske, Steve Craddock, Tim 10 Escobedo, Jon Miles, Ed Taczanowsky and Frank Thomson. 11 You know what, she was at the end of the table. 12 Sorry, Ken Anderson. I said Kathleen. 13 The purpose of this hearing is to discuss or hear 14 your comments on the Affordable Housing Trust Fund. We have 15 Pima County staff to make a presentation, and we will open 16 it up for comments, so I would like to introduce Betty 17 Villegas, who will take it from here. 18 MS. VILLEGAS: I'm going to use the podium. Betty 19 Villegas. Can all of you hear me? 20 I would also like to take this opportunity to 21 welcome all of you and thank you for participating in this 22 public process. 23 I would also like to give a little bit of 24 housekeeping. For anyone that needs to use the rest rooms, 25 go out that door, they're to your right. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 4 1 And if you could please turn off your cell phones 2 or turn them to meeting or mute, or something we would 3 really appreciate that, as well. 4 I would like to start by introducing County staff 5 and I believe I just saw an elected official walk in. Did 6 I? I thought I saw Richard Elias coming in through the 7 parking lot, but I guess he hasn't made it in yet. 8 First of all I would like to introduce Hank Atha, 9 he is our deputy county administrator. Up against that 10 wall. 11 And Margaret Kish is our community development and 12 neighborhood conservation director. 13 And the rest of my housing staff is Gary Bachman, 14 Marcos Ysmael, Daniel Tylutki. And our high school intern, 15 Samantha Romero. 16 And we have a couple of volunteers from another 17 department, and I'd like to thank them. Maria Soto and 18 Gloria Soto back in the back. Thank you all. 19 I'd like to turn your -- excuse me, he just walked 20 in. I thought I saw you in the parking lot. I would like 21 to introduce and acknowledge Supervisor Richard Elias. 22 I'd like to turn your attention over to the 23 agenda. We've already done number one and we're on number 24 two. Then we'll open it up for public comment and close it, 25 and then the commission will discuss and possible action on CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 5 1 the adoption of the contribution schedule and then the 2 adjournment. 3 Next is the presentation that my staff is going to 4 do. We're going to take about 20 minutes of your time to do 5 a short presentation. We're going to start with the 6 background of the Housing Trust Fund and then the Affordable 7 Housing recommendations, with the housing strategies 8 addressing housing issues and needs, what the public benefit 9 of Affordable Housing is, the schedulings and then the 10 analysis of the schedules. 11 And I'll go ahead and start with the background. 12 In May of 1997, the voters approved $10 million in general 13 obligation bonds for neighborhood reinvestment. Of that, 14 through the bond implementation plan, $5 million was set 15 aside for affordable housing programs. This initiative got 16 on the balance through a lot of hard work through a lot of 17 community members that came to the Board of Supervisors and 18 asked for something to be done about affordable housing. 19 The Board of Supervisors listened and it was put on the 20 ballot. And the community was very instrumental in getting 21 this initiative passed. 22 Once it passed in April of 1998, is when the Board 23 of Supervisors made the appointments to the Pima County 24 Community Housing Bond Oversight and Advisory Committee. At 25 that point, I was in the private sector and was appointed by CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 6 1 then Supervisor Raul Grijalva to sit on this committee. 2 In June of 1998, the committee started meeting and 3 discussing the Housing Trust Fund because that was one of 4 the goals of the committee was to start the Housing Trust 5 Fund. We found out right away that in order to have a 6 Housing Trust Fund in Pima County, we needed to go to the 7 State and change legislation. So we did that. Through the 8 great leadership of then Richard Elias, without the 9 supervisor in front of it, he started as a volunteer and 10 then staffed the committee, and he was very instrumental in 11 leading the committee which is an ad hoc state legislative 12 agenda committee. So he kept us in contact, moving it 13 forward. He worked with the county attorney, the lobbyist, 14 and found some great sponsors to sponsor this bill, Bill 15 1482, at the State. 16 And it's very interesting that when all that was 17 happening, and I look now, I see there's actually three 18 Board of Supervisors that sit on our board right now that 19 had something to do with this initiative, actually. It was 20 State Senator Ann Day and State Senator Ramon Valadez. They 21 were two of the sponsors of this bill. At that time they 22 were State senators. It's very interesting to me it was a 23 bipartisan effort back then, and we are very lucky in Pima 24 County to have the political will at the Board of 25 Supervisors level to make sure that affordable housing CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 7 1 remains at the forefront. 2 So, on March 26 of 2000, the bill was approved. 3 We were very happy. And now I'm going move you forward a 4 few years to November 16th of 2004. And at that meeting was 5 when the Board of Supervisors made several recommendations 6 through a board and adopted this initiative. We're going to 7 discuss some of those recommendations today. I'm going to 8 go ahead and turn this over to Gary Bachman, who will be 9 talking about the affordable housing strategies and he will 10 then turn it over to Marcos Ysmael. 11 MR. BACHMAN: Gary Bachman. 12 Thank you, Betty. Thank you to your all for 13 coming tonight. 14 I'm going to focus briefly on the specific 15 affordable housing strategies the Board of Supervisors 16 recommended in the November 16 memorandum. There are three 17 strategies and these were not elaborated on or were not 18 elaborated on specifically in great detail. 19 The first one is providing down payment assistance 20 to first-time home buyers. Down payment assistance has been 21 the flagship of our department for at least 15 years or 22 maybe longer and we've assisted hundreds of citizens to 23 become home buyers throughout Pima County. 24 Two of the substrategies we've used, among others, 25 combining down payment assistance with mortgage revenue CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 8 1 bonds and that's using a local resources. And the other is 2 working, combining the down payment assistance with the 3 secondary market, and one example is with Freddie Mac and 4 also Fannie Mae. This brings resources into the community 5 that may not have already been there. 6 The other housing program, I'm pleased to announce 7 that a small piece has been initiated with Habitat for 8 Humanity, combining with Tucson Medical Center I guess 9 yesterday announced the first home that would be sponsored 10 for an employee of that hospital, and we hope to work with 11 Michael as he expands that program. We think it's very 12 exciting to be able to work with local employers to solve 13 the affordable housing situation. 14 A second strategy is promoting effective 15 collaborations between nonprofit and for-profit housing 16 developers. And the first photo, the top right, is the 17 Chicanos Por La Causa, Shanta Valley Estates. The County 18 will receive an award for the innovative project. The 19 second excellent example, Corozon del Pueblo, Habitat for 20 Humanity paving the way with a very ambitious collaboration 21 with for-profit developers. Those are two examples and we 22 hope there will be many more that we leverage with the 23 affordable housing fund. 24 Third, implementation of housing conservation and 25 rehabilitation programs is a somewhat, not a long list but a CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 9 1 list of programs that we've identified particular needs in 2 the community. And we have administered these for a number 3 of years, acquisition rehab and resale and assisted housing, 4 emergency home repair. We certainly have done that for many 5 years. Emergency rent and mortgage assistance to prevent 6 homelessness. Programs targeted to the elderly and disabled 7 owners and finally, rehabilitation of rental housing to 8 guarantee sustained affordability for our low income owners. 9 I want to talk about some of the specific issues 10 and needs that are addressed in the strategy. Realizing 11 this should be and could be a much more lengthy 12 presentation, I'm only going to highlight a few. 13 First I want to highlight the cost of housing. 14 And the figure up here is from the July housing newsletter, 15 the median new house sales price, which is now at $217,000. 16 As you can see by the table, that indicates the July figure 17 for the past ten years, price has escalated over the past 18 five years. 19 Wages, as you can see in the lower line, wages 20 have been rather level, increasing only 9 percent in the 21 last five years. Wages have clearly not kept pace with the 22 cost of housing, so that's one issue. And as you can see on 23 the bottom, the mortgage for a low income household, that's 24 80 percent of median income. There's a significant gap if 25 they can only afford a mortgage of $150,000. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 10 1 Second important issue is cost-burdened households 2 in our community. HUD considers you cost burdened if you 3 pay more than 30 percent of your income for housing and more 4 than 50 percent means you're severely cost burdened, 5 according to HUD again. These figures are for all 6 households in Pima County, also renters and owners. 7 This is an important issue because if you're 8 spending, especially if you're poor, if you're spending a 9 significant portion of your income for housing you have to 10 make a decision on a monthly basis whether you're going to 11 buy food for your family, clothing, as well as meet your 12 transportation needs and perhaps have a little bit left for 13 entertainment. That's an important item to consider when 14 we're talking about affordable housing in our community. 15 The next issue is the age of housing. We think we 16 live in a community with a lot of new housing. Most of our 17 housing has been built in the last 30 years. However, 18 there's a significant number, you can see the figure in the 19 upper corner there, 63 homes will be 50 years old by the 20 year 2010. If you're like me, you live in a house that's 21 about 50 years old, you realize that you're rebuilding your 22 house maybe once or twice. 23 This is certainly a significant and a critical 24 factor for elderly and disabled owners who are living on 25 fixed incomes. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 11 1 Finally, I just want to talk about the benefits of 2 affordable housing. Some of these points are somewhat 3 obvious, I think, however, it needs to be considered when 4 we're talking about implementing a strategy. And I think we 5 could also expand this list somewhat, as well. 6 First is the work force needs affordable housing. 7 And if we look to the Gulf Coast as an example, we'll 8 realize the recovery down there will be very difficult 9 without adequate housing for the people who are doing the 10 work, so it applies in our community as well. 11 There's a benefit to the local economy of having 12 affordable housing. If your residence and your owners and 13 renters are cost burdened, that means they'll have less 14 money to spend on those items that they need; clothing, food 15 and so on. As everyone knows, housing is a significant part 16 of our local economy. Construction trades as well as 17 maintenance and management are an important part of our 18 economy. 19 Finally, affordable housing provides stable and 20 viable neighborhoods in our community and certainly that's 21 not something to be overlooked. 22 I'll turn it over to Marcos Ysmael who will talk 23 about the contribution fee schedules. 24 MR. YSMAEL: Thank you, Gary. Good evening 25 everybody. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 12 1 I'll start first with the contribution fee 2 schedule that was recommended by the Board of Supervisors on 3 November 16, 2004. The table you currently see up right now 4 represents what they approved with the exception of two 5 columns. We have factored in the new construction building 6 permits that were issued during 2004 in the second column. 7 And then the last column we have the estimated revenue that 8 would be generated based on the volume we saw in 2004. 9 Taking you to the first column on the left, Pima 10 County Building Valuation, it's important to note that when 11 this was adopted last year, we were looking at these numbers 12 starting at $135,000. Back then that was meant to be 13 representative of the full sales price, including the land 14 and the building. 15 As Gary mentioned, costs have escalated in the 16 last year such that these numbers are outdated and now these 17 numbers are much closer to the building valuation excluding 18 land. And that was the intent of the recommendations passed 19 in November was that the fee would be collected at the time 20 the permits were issued. 21 The way the building codes department does that, 22 is using a building valuation model that's been adopted by 23 the international building codes and in many communities 24 across the country. Keep in mind when you're looking at 25 these numbers, they represent the building valuation and it CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 13 1 excludes the land cost. 2 Again, the second column, we see the number of new 3 construction permits that were issued in the last year in 4 the various price ranges. 5 In the third column, we have the contribution 6 factors as they were approved by the Board of Supervisors in 7 their recommendations last year. 8 And the next column represents the fees that would 9 be collected for the low and with the price ranges that you 10 see in the high end, going down to the second to the last 11 category there, you see 500,000 to a million. For a 12 $500,000 building valuation, we collect a fee of 5,000. We 13 had no building valuations at a million. The highest would 14 have been about 791,000. As you see that would generate a 15 fee of $7,900 roughly. 16 The last column would be the estimates, and again 17 this is based on 2004 activity. The above contribution 18 guidelines are subject to all new rezonings or specific 19 plans for new construction. As mentioned before, this would 20 be calculated at the time the building permits were issued 21 and the fee that would be collected at that time would be a 22 one-time fee. And again, the estimates are noted in the 23 bottom right there. 24 Carrying into the next slide, our housing 25 commissioners came up with an alternative that is being CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 14 1 presented to you all tonight. I'll just cover some of the 2 key differences here. Starting with the sales prices this 3 actually would be the full market sales price including the 4 land and the finished building product. So this would be 5 your sales price that you would see at close of escrow. 6 The next column would be the contribution factors 7 as our housing commission proposed them. So that would be 8 multiplied by the sales price. 9 And then here you have the estimated dollar amount 10 that would be collected for the various price ranges. 11 Unfortunately, we don't -- we didn't have -- access to the 12 data for home sales is not as readily available to us as the 13 building permit data, which of course comes from the County 14 monitor staff, but the sales prices data we were not able to 15 get correlated in time. We apologize for that. 16 And then along with the proposed schedule, there 17 were some additional conditions that the housing 18 commissioners wanted to recommend for your consideration. 19 And the first one, and the other main difference I think, 20 one of the other main differences between what was proposed 21 in the recommendations from the Board and this schedule is 22 that this fee would be collected at the close of escrow. So 23 the closing agent would forward a check when the home is 24 sold basically, or when escrow closes that check would be 25 forwarded to the Housing Trust Fund. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 15 1 The next condition is that funds contributed by 2 this new home construction fund would be designated for down 3 payment assistance for new home purchases. 4 The third item, up to 25 percent of the funds 5 contributed by new home construction may be designated to 6 the contributing project at the time of plat, at the request 7 of the home builder. 8 The fourth condition, affordable housing programs 9 of the Pima County Housing Trust Fund, other than down 10 payment assistance for new home purchases, will be funded by 11 sources other than the new home construction contributions. 12 Fifth, the home builder/developer may submit an 13 alternative proposal in keeping with the goals of the Pima 14 County Housing Trust Fund and the intent of the contribution 15 recommendations that were made to the housing commission. 16 And the last item is, would be to establish a 17 policy for the recapture of funds when the homes would be 18 resold. At the first resale, there would be provisions in 19 place to collect the assistance that would have been 20 provided. The down payment assistance provided would be 21 collected back if the homeowner sold within a certain number 22 of years. 23 That takes us through the table and conditions 24 that were proposed by the housing commission. Now I'll turn 25 it back over to Betty, who will summarize. She will go CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 16 1 through a summary of the two recommendations that we have 2 before us. Thank you. 3 MS. VILLEGAS: Thank you, Marcos. 4 I believe I missed Patrick Cavanaugh from 5 Supervisor Ann Day's office is here. I wanted to 6 acknowledge him and also Emily Nottingham from the City of 7 Tucson is here. 8 The two tables that you saw, one, as Marcos said, 9 was in the November 16th memorandum by the Board of 10 Supervisors and the second was from the Housing Commission, 11 and we wanted to show the differences between the two 12 tables. That doesn't limit what we want from you today. 13 The purpose for this meeting is to get input from 14 you, the public. If any of you have other recommendations 15 or if you have something to add to what we have here, please 16 feel free to let us know. And everything that we collect 17 here today will be part of the record, and it'll be taken 18 into consideration by the Housing Commission before we make 19 our final -- or they make their final recommendation to the 20 Board of Supervisors. 21 I wanted to go through the analysis of the 22 contribution fee schedule just to point out the differences 23 on what the Board of Supervisors recommends through the 24 Housing Trust Fund strategies and what the Housing 25 Commission is offering as an alternative. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 17 1 On the far -- if you're facing left column, the 2 strategies, the first one is the collection of the fund 3 methodology. The Board of Supervisors recommends that it be 4 done at permitting and the Housing Commission would like to 5 see it at escrow, at the time that the loan is closed. 6 That's for collecting the funds. 7 The second one, down payment assistance for first 8 time home buyers available for both new and existing homes, 9 the Board of Supervisors recommends that yes, this is what 10 they intended. And the alternative, the commission 11 alternative is specifying that it's designated for new home 12 purchases only. Collaboration between nonprofit and 13 for-profit housing developers. The Board of Supervisors 14 recommends that, and the alternative is that it would be 15 only at new home construction sites. 16 The other is housing conservation and 17 rehabilitation programs. The Board of Supervisors 18 recommends it and the alternative does not. 19 The Housing Commission also made other proposed 20 conditions that were not addressed in the board memorandum 21 and those are that there be a cap on the contribution fee. 22 The Board of Supervisors did not address it and the 23 alternative says that they would like a cap of $10,000. 24 And that 25 percent of the funds contributed by 25 new home construction be designated from the contributing CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 18 1 project at time of plat at request of the home 2 builder/developer. That was not addressed by the Board of 3 Supervisors. And the commission would like that in the 4 alternative. 5 And the last one is for the developer to be able 6 to submit an alternative proposal in keeping with the goals 7 of the Housing Trust Fund, and that was not in the 8 memorandum but the Housing Commission has put it on their 9 alternative table. 10 So these are the comparisons of the two tables. 11 And we just again emphasize the importance of your feedback, 12 your recommendations, your findings. And again, I want to 13 thank all of you for participating in this public process. 14 And I'll go through and give you some direction on 15 how we're going to present this public comment period. You 16 have a three minute maximum time for comment. And Marcos 17 will be sitting right here and he is going to have the 18 green, yellow and red and that's the three minutes. Then he 19 will let you know when your 30-seconds are up, when you're 20 at 30-seconds and then the stop. Okay? 21 We don't have any buttons to press, you know, like 22 at the board hearing room. So if you could just keep that 23 in mind as you're speaking. We do want to make sure that we 24 give everyone their three minutes and no more than three 25 minutes. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 19 1 And if you can please state your name and address 2 for the record, so that our transcriber can make sure that 3 she gets it correctly. 4 We'll go ahead and turn it over to Frank, to our 5 chair, Frank Moreno at this time while we prepare the 6 podium. 7 MR. MORENO: Before we open it up for comments, I 8 just wanted to reiterate that this is an opportunity for the 9 public to voice their comments and recommendations. 10 Whatever you might have, this is not the -- the format is 11 not for a question and answer session because of the time 12 restraints. 13 I think -- do we have cards, Betty? 14 MS. VILLEGAS: Yes, we do. 15 MR. MORENO: At this time I would like to open it 16 up for public comment. Our first speaker is B.C. Robinson. 17 After will be Catherine Daniels and then Michael McDonald. 18 MR. ROBINSON: My name is B.C. Robinson. And I'm 19 at 2305 South Park. 20 I came over this afternoon to put my support in 21 for the Board of Supervisors' recommendations because of the 22 elements that are put there. I think they were thought 23 through clearly and that it is what is needed for the 24 community to continue to have affordable housing available 25 to them. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 20 1 One of the things that the, that I think is 2 crucial for the affordable housing component here in Pima 3 County is that we allow neighbors, our community, to have an 4 opportunity to be able to get the education that they need 5 before they go and get the mortgages. And the reason why is 6 because we see what happens to those that are unprepared and 7 the number of foreclosures that are occurring today. All of 8 that is not because of people that are going into predatory 9 loans. Most of them occur because people are not prepared 10 with what they could have been prepared for if the education 11 was presented to them. So I think that education is a very 12 crucial element for home ownership. 13 And it should be something that is not looked at 14 lightly, because in order for a person to be successful, you 15 have to have a path that they understand and a path that is 16 reasonable for them to be able to follow. 17 Another thing is that the price of affordable 18 housing here in Tucson now, we see that month to month, that 19 number jumps. I can remember when -- I'm at 30-seconds 20 already? 21 Okay, well, I want to give my plug for the -- that 22 the education be looked at not lightly, but as a crucial 23 part of the home buying process and that it should not be 24 something that we think can just happen. 25 Thank you. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 21 1 MR. MORENO: Thank you. 2 Next we have Catherine. 3 MS. DANIELS: My name is Catherine Daniels. And 4 I'm here on behalf of the homeowners trust fund. I, too, 5 agree with Mr. Robinson, being a new homeowner and being 6 made president of the homeowners association for the Mission 7 High Homes I have not had the experience or the education 8 for the position that I hold, so I find it very interesting. 9 I do stand in the gap for present homeowners and future 10 homeowners, that the educational program is something that 11 we most definitely need. And I seek contribution and, you 12 know, the -- this is my first time and I'm nervous -- the 13 contribution and sources of revenue that would be open to us 14 as new homeowners. 15 As Mr. Robinson was saying, without the education, 16 you know, it's like we're thrown in. It's either drown or 17 swim when you don't know the revenues and avenues of what to 18 do or how to get this information. 19 I think for Habitat, that's where my home is 20 through, when I get in a bind being the president of the 21 homeowners association, I can call and they can refer me to 22 someone in that position, with that title to kind of guide 23 me through. 24 Thank you. 25 MR. MORENO: Thank you. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 22 1 Michael McDonald, followed by Sandy Fagan. 2 MR. McDONALD: Good evening. Michael McDonald, 3 director of Habitat for Humanity, Tucson. 621 West Lester. 4 I probably proudly have the privilege of offending 5 everyone equally, our partners in the County as well as our 6 private partners because I think there's, there are good 7 components to either of the contribution proposals. 8 As Gary referred to, Habitat and other nonprofit 9 builders are working on collaborative models for new home 10 construction and rehab, so we definitely support 11 collaborative partnerships. I think with the Commission's 12 recommendation the partnerships probably should be 13 incentivized. 14 Through those partnerships perhaps that could be 15 considered in terms of the contribution schedule. That's 16 the way I can tick off my friends at the County. And then 17 for the for-profit partners and investors, definitely we all 18 know the core of the city is aging and rehab is going to be 19 a big part of our future. Down payment assistance for older 20 homes, rehab work, collaborations in rehab, there's market 21 potential there. 22 Many other large communities our size and larger 23 and older are going through a huge building deconstruction, 24 and that's a big market. There's money to be made there and 25 certainly Habitat wants to get into that rehab work with CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 23 1 you. 2 I would like to encourage the Commission to 3 consider that aspect of the County's proposal, Board of 4 Supervisors's proposal. 5 Finally, we know that we do need to invest in 6 affordable housing not only for the economic development 7 reasons but for the character and for the quality of our 8 community. It's the people, our neighbors, it's the folks 9 that you came out and built with this weekend, 800 of you to 10 build 11 more homes, it's folks like Catherine Daniels. I 11 have hot off the press stories of some of our homeowners 12 lives, how they have been changed. We need to work together 13 and thank you for the opportunity to do that. 14 I'm going to give each of you a copy. 15 MR. MORENO: Thank you, Mr. McDonald. 16 Next is Sandy Fagan, followed by John Strobeck. 17 MS. FAGAN: I'm Sandy Fagan, and I'm representing 18 Southwest Fair Housing Council, 2030 East Broadway, Suite 19 101. 20 First, let me be sure that I acknowledge the 21 Commission, and thank you for your service to this 22 commission. Certainly it's taking your time and your effort 23 and consideration. We appreciate it. 24 It's our contention as an organization that 25 programs that cast the broadest net possible and CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 24 1 comprehensive and strategic best served our community. For 2 example, while down payment assistance for newly purchased 3 homes is critical, a comprehensive program might offer 4 similar assistance for purchaser for rehab. In addition, 5 pre and post purchase education and counseling are 6 invaluable in equipping the first time home buyer and needed 7 to commence and to sustain the successful home ownership 8 experience. 9 The concept of full and fair access to housing 10 isn't new to our area. The consolidated plan put together 11 by the County and City on a five-year cycle includes 12 analysis of impediments to fair housing choice. And that 13 document looks at barriers, not just acquiring homes in 14 housing, but to be able to enjoy them and sustain them as 15 well. 16 It's our concern that a lack of access to 17 affordable housing is an obvious impediment to the 18 opportunity to secure and enjoy housing that creating 19 affordable housing, widely publicizing public housing 20 opportunities, and helping potential home buyers to apply 21 the skill not to just purchase a home but to sustain the 22 home ownership is an equally important and obviously 23 meaningful strategy. Housing Trust Funds preserve 24 affordable housing. Preserving housing, we think, is more 25 than bricks and mortar, it's a family's wealth and security. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 25 1 The Housing Trust Fund with features that address 2 the widening gap, and promote and sustain successful home 3 ownership, is consistent with our obligations as a 4 jurisdiction that receives federal funds. The bottom line 5 is sustaining home ownership is essential, especially if 6 capturing funds is an element of a given housing program. 7 It would seem, among other things, to be just good business. 8 Thank you very much. 9 MR. MORENO: Thank you. 10 John Strobeck followed by Emily Nottingham. 11 MR. STROBECK: The purpose of my remarks -- John 12 Strobeck, 1517 North Wilmot. 13 The purpose of my remarks is to give you a little 14 bit of perspective on what I see as an analyst in the 15 housing market on fee collection and timing of that 16 collection and present some information that I want you to 17 consider as you go through the process. 18 Basically there are two options for collecting the 19 fees, that is at the time the building permit is issued or 20 at the time the closing is recorded. 21 At the time of permit there's a permit issued for 22 every new construction home that is to be built, and that's 23 done prior to the start of construction. And the fee is 24 levied by placing a value on the home by a formula of value 25 ranges plus some additional items like driveways, septic CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 26 1 tanks. This is a structure fee based on the value of the 2 dwelling for the purpose of collecting revenue fees. It 3 does not include the land costs, hence the values of the 4 permits are usually considerably less than the value of the 5 actual sales price of the home. 6 Closings are filed whenever there is a change of 7 ownership. This is usually when the buyer gets permission 8 to occupy the home and the closing is filed through a title 9 company that will affect the entire of the cost of the home 10 including the land. This is a price that is paid by the 11 consumer with their down payment and mortgage. It is the 12 price used for appraisals, taxes and market conditions. 13 In the case of new construction dwelling a closing 14 would be filed at the time the builder, developer turns over 15 the house to the new owner. Or in the case of a resale it 16 would be at the time the seller gives occupancy to the new 17 owner. 18 Currently,the ratio of new construction homes to 19 resale homes is running about four to one. That means that 20 for every four homes built, one house is a new construction 21 home. And in the case of the dollars spent, one dollar out 22 of every $4.16 that is spent for home is for a new 23 construction home. 24 I think it's important to remember the economy of 25 Pima County is literally running on the back of the home CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 27 1 building industry at this time. In 2005, the home building 2 industry has contributed over one billion, so far in seven 3 months of this year, to the local economy in the form of 4 jobs, supplies purchased and fees and taxes. It is possible 5 that in 2005, the home building industry in Pima County will 6 surpass $2 billion in its contribution to the local economy, 7 which is absolutely huge. When you look at that, 8 Davis-Monthan contributes about 500 million and you can see 9 that's about four Davis Monthans. 10 It's important to remember also that the Tucson 11 housing market is supported very heavily by low end buyers. 12 New construction homes below 200,000 make up 39 percent of 13 the market. In resale 50 percent of the market is below 14 $200,000. Low end or entry level buyers supporting the 15 housing industry in Tucson. And it's critical this base 16 continue to be a viable entity in the marketplace. 17 I want to mention also they have the least amount 18 of flexibility, and at the present time fees on new 19 construction homes in Pima County are about $15,000 before a 20 shovel of dirt is turned to build a house. 21 MR. MORENO: Thank you. 22 Emily Nottingham followed by Peg Harmon. 23 MS. NOTTINGHAM: Good evening, I'm Emily 24 Nottingham, director of the Community Services Department 25 for the City of Tucson. Our business address is 310 North CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 28 1 Homers Park Loop Road in Tucson. 2 First of all, I want to applaud you for your work 3 on this. It is very difficult but exciting to start a new 4 program, and I know that you have worked hard to try to work 5 through all the details. As you know, the City of Tucson 6 is also considering a housing trust fund and we're watching 7 carefully, so we're hoping you do all the hard work and 8 think it all through. 9 I really have just four thoughts, and they're not 10 great detailed thoughts. The first is, I would suggest some 11 flexibility of uses. I totally understand the desire to 12 focus on construction, new construction of affordable 13 housing, but one thing I've learned is over the years, and 14 it certainly became very obvious during Hurricane Katrina 15 activity last week, is that it's real important to leave 16 yourself some flexibility. You may want to consider instead 17 of limiting the uses solely to that, you can always 18 prioritize uses of the funds but allow other uses because 19 things change over time and why not give yourself from the 20 beginning maximum flexibility. 21 The second idea is to keep it simple. I spend my 22 life interpreting HUD regulations and that's so sad because 23 it's so difficult. So the fewer asterisks you have on a 24 table, the better as you move forward. 25 Third is that in the long run, I think you know CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 29 1 this, that I think you may want to consider having multiple 2 sources of funds to support the Housing Trust Fund rather 3 than a single source of funds. And I know that the single 4 one is difficult to get and multiple ones are more 5 difficult. Times change, things change and the entire 6 community should be supporting affordable housing, not just 7 one sector of the community. 8 Finally, whatever you do, I would encourage you to 9 do it and to move forward in a timely fashion, although you 10 need to be thoughtful. And that is, it's your program. You 11 created it, you can amend it. So I would encourage you to 12 move forward. 13 Thank you very much. 14 MR. MORENO: Thank you very much. 15 Peg Harmon, followed by Maggie Tellez. 16 MS. HARMON: I'm Peg Harmon, 140 West Speedway 17 Boulevard, Catholic Community Services of the Southern 18 Arizona. 19 I want to first add my thanks to the other 20 individuals who have thanked the Commission this evening for 21 the hard work you're doing. 22 The nature of my comments are really about 23 flexibility and expansion of public/private nonprofit 24 partnerships to achieve greater access to housing in the 25 affordable housing market. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 30 1 I just want to address the four overall goals, 2 which are increasing affordable housing for those under 80 3 percent of median income, improving access to lower income 4 individuals for affordable housing, conserving the existing 5 units, and assisting low income people keeping their homes. 6 Catholic Community Services has worked in a 7 variety of areas to achieve those goals. This is suggesting 8 other ways the non-profit sector can be involved. Catholic 9 Community Services has been involved in 202 projects. We 10 have a tax credit program that we're working with the 11 for-profit sector in the City of Sierra vista. Nonprofits 12 can be very flexible. 13 CCS also is working on smaller scale projects such 14 as individual development accounts for homeowners. We have 15 140 individual development accounts available right now for 16 low income families for the purchase, down payment 17 assistance on their first home. We are linking those 18 resources with resources from the State Department of 19 Housing in order to increase the capacity of low income 20 buyers to purchase their first home. 21 We also help families apply for affordable second 22 mortgages, so we maintain the quality of the housing for 23 individuals who are currently in older housing. 24 And we have a program of financial literacy. This 25 helps individuals understand the long-term commitment for CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 31 1 home ownership, how to manage their funds and how to keep 2 their home in good repair. 3 Our housing program in the two years we have been 4 operating, we have been focusing on areas such as Little 5 Town, Old Nogales, Continental and Sahuarita, we have 6 assisted over 380 people at this time. Eighty have been 7 seniors establishing reverse mortgages, so again, they can 8 maintain residence in their existing home. We have helped 9 about 15 people avoid foreclosure and we have assisted in 10 the last couple weeks about five individuals who were first 11 time buyers. Over 100 people have been educated in new 12 homeowner education, home maintenance and budgeting for 13 permanent housing. 14 And finally, part of the whole mix of assisting 15 small scale individual people, which is our goal primarily 16 in addition to our development efforts, is helping people 17 understand predatory lending and avoiding the traps of 18 predatory lenders in relationship to housing and housing 19 resources. 20 Thank you. And I want to encourage you to be 21 flexible in your allocation and decisions and creating the 22 uses of the proposals for the Housing Trust Fund. 23 MR. MORENO: Thank you very much. 24 Maggie Tellez, followed by Corkey Posner. 25 MS. TELLEZ: Good evening. I want to thank you CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 32 1 and congratulate you and thank you for your hard work. 2 I'm the managing housing director for Chicanos Por 3 La Causa, and I'm here to strongly encourage you to consider 4 housing counseling as a fundable service under this 5 initiative. I don't believe that it is enough to just give 6 families money. We're just addressing one of the issues, 7 one of the obstacles, that is low income families have 8 difficulty saving money for a down payment. We want to do 9 all in our power to insure that these families keep their 10 homes and housing counseling does this. They do this by 11 providing one-on-one counseling services, and home buyer 12 education. 13 One-on-one counseling services is where we sit 14 down with families and we discuss their credit. We discuss 15 what their needs are, what other obstacles and we do a plan. 16 Families are not always ready to buy a home today, but a big 17 percentage of the families that we see and we help purchase 18 every day are families that we have seen for the last two 19 years. One-on-one counseling is the key, I believe. 20 Because without this, I don't believe all the money that you 21 can throw at them, down payment, would make them successful. 22 This is an opportunity to find out what they need, 23 what the needs of the family are and an opportunity for us 24 to make sure that these families are successful. We believe 25 that we at Chicanos Por La Causa believe it is irresponsible CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 33 1 to build affordable housing. Closing cost assistance if 2 we're not going to provide a complete package of services 3 which will allow these families to maintain, sustain and 4 retain their housing. The job of the housing counseling is 5 to provide these tools that will enable these families to 6 become successful. 7 I strongly urge you to please consider including 8 housing counseling as a fundable and valuable service to our 9 community. 10 Thank you. 11 MR. MORENO: Corkey Posner followed by Lori 12 Lustig. 13 MR. POSNER: Good afternoon. My name is Corkey 14 Posner, 1336 East 12th Street. 15 I want to congratulate Pima County for taking this 16 important and progressive step toward solving our housing 17 problem in Pima County. I want to thank the Commission for 18 its hard work in the process. 19 A couple of comments. I want to make some general 20 comments and then specific comments. I'm disappointed, 21 though, that the Commission seems to have in its 22 deliberations eroded some of the content of the Board of 23 Supervisors' presentation. Disappointed to see that happen. 24 One, I want to comment specifically on the content 25 of the proposal. With regard to the fee schedule, I think CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 34 1 it's quite unfortunate that we don't have the total to 2 compare to the 2,280,000. There's no way to compare apples 3 and oranges without those figures, and I would urge you, 4 really, it's difficult for the public to evaluate that. 5 My second comment is the paring down of the three 6 strategies of the Board of Supervisors down to half a 7 strategy. The three strategies, new and existing housing 8 down payment, partnering with nonprofit and rehabilitation. 9 Really all we have left is half of number one which is new 10 construction. If you look at the kind of housing that 11 solves the problem for low income people, to a large extent 12 it's existing housing and housing rehab. I think that is 13 quite unfortunate in terms of the effectiveness. 14 With respect to items 3 and 5, no one has really 15 addressed those but they same seem to be strange 16 recommendations, 25 percent going back into the same 17 project. Hard to imagine how that might work for some of 18 the higher end projects. It kind of misses the point to 19 solve the problem where it's needed. Here it is pouring 20 back some of that money to the developments that should be 21 funding. 22 Item 5 it talks about an alternative proposal. We 23 have no information about what an alternative proposal might 24 be, but it makes me a little suspicious that it will take 25 the form of essentially getting out of funding the trust CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 35 1 fund itself. 2 So while I applaud the County for the effort, I 3 applaud the Board of Supervisors for the really very good 4 content of the original proposal, we see a far weakened 5 proposal. We don't have a way of evaluating what the income 6 might be to compare it to the number we have for the County 7 and we have a whole series of small things that seem to be 8 chipping away at the effectiveness of the program. 9 Thank you. 10 MR. MORENO: Next, Lori Lustig followed by Richard 11 Ray. 12 MS. LUSTIG: Good evening, Commissioner. My name 13 is Lori Lustig with Southern Arizona Home Builders. We're 14 at 2840 North Country Club Road. I won't waste a lot of 15 time, but I do thank you. You'll see in the letter that I 16 handed to you we thank you for your time and attention. 17 There's a number of issues that you are going to 18 have to consider and a lot of them are raised in our letter. 19 I'm not going to go into those in detail, however I would 20 like to make two points this evening. I have to say, 21 interestingly enough, listening to a lot of the speakers 22 that I do agree with all of the speakers except for one, and 23 that is Mr. Posner, who I'm sure will not consider that a 24 surprise because we meet at a lot of meetings together. 25 The reason I take exception is I do not see this CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 36 1 as a chipping away, I see that as that we have a disconnect. 2 You are not hearing from the home builders that we object to 3 this, or that we have any problems applying the money and 4 paying the money at time of closing or permit, whatever the 5 Commission decides, but that so far, the only money that's 6 being raised is being raised out of this particular 7 resource. If it is to be used and applied community wide as 8 our bond money then it would be raised community wide, as 9 well. Excuse me. 10 We have yet to address any of the money coming 11 from the Multi Family Housing Association or their industry 12 or the resales. Resales, new homes are 4 to 1. We could 13 raise far more money, certainly sufficient funds to cover 14 down payment assistance, education, and rehabilitation of 15 older homes in neighborhoods if we were to spread the costs. 16 In fact, we would probably lower the burden of people who 17 are participating if we could spread that cost. 18 The other thing I would like to raise and bring to 19 your attention is the fact that every time -- every time we 20 add a fee to a home buyer, we are pushing other home buyers 21 further and further out of reach. One thing I would like to 22 say is based on a $250,000 home in what is our proposal of a 23 50 percent fee, or a half a percent, I'm sorry, that would 24 be $1,250. That exceeds just the principal payment on the 25 new home. That almost equals the PITI for one month that CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 37 1 they have to bring to closing. This has a significant 2 effect on new home buyers, so we're not objecting. What we 3 are saying is to spread the cost, to spread it fairly, to 4 spread it wisely so we have the money to do what we hope to 5 do tonight. 6 Thank you. 7 MR. MORENO: Thank you. 8 Next, Richard Rhey followed by Bob McLaughlin. 9 MR. RHEY: Good evening. My name is Rick Rhey. 10 I'm the executive director of the Southwest Fair Housing 11 Council. 12 I'm here today to express a concern that I have 13 regarding the Commission's recommendation to the board. 14 When the Pima County Housing Trust Fund was established in 15 1997, for the purpose of facilitating and, I quote, 16 facilitating housing repair and investment patterned after 17 the State Housing Trust Fund, unquote, the primary goal 18 inherent to the Arizona State Housing Trust Fund is to 19 increase the amount of affordable housing to the residents. 20 Federal law requires that public housing trust funds do not 21 segregate low income households from the use of trust funds. 22 If this were to happen, it could open a housing trust fund 23 up to a complaint or a legal action under the Federal Fair 24 Housing Act based on the premise of disparity in pay. 25 For those not familiar with the term, disparate CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 38 1 impact is when a policy or action, whether intentional or 2 not, affects persons protected under federal law such as 3 racial or ethnic minorities or persons with disabilities, 4 affect them less favorably than non-protected classes. 5 Because of differences in social and economic opportunities 6 minorities and persons with disabilities tend to constitute 7 a greater proportion of low income populations. 8 When public funds that are intended to help make 9 housing affordable for community residents are limited to 10 home buyers buying a new home, and to be honest, I'm not 11 clear exactly who the beneficiaries will be as far as this 12 is concerned, I'm not sure that has been defined exactly as 13 yet, but when they are limited to home buyers buying new 14 homes it excludes a large portion of the low income 15 population and a higher proportion of minorities. 16 Housing trust funds normally are not at risk for 17 charges of disparate impact because funds are used through a 18 range that can include housing conservation and 19 rehabilitation, mixed income developments, income targeting 20 and a development of multi-family rental housing. 21 The original recommendations by the County Board 22 included most of these. The recommendations by the Housing 23 Trust Fund and Housing Commission did not. As a result, I 24 believe that the Commission's recommendation limiting the 25 benefits of trust fund money raised through the roof tags to CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 39 1 home buyers, if adopted, could possibly be actionable under 2 the Federal Fair Housing. If the County Board is 3 considering adopting this recommendation, I would suggest it 4 would be prudent to have the county attorney review the 5 possibility that the Commission's recommendation is in 6 violation of federal law. 7 Thank you. 8 MR. MORENO: Thank you. 9 Bob McLaughlin, followed by Jill Osuna. 10 MR. McLAUGHLIN: Bob McLaughlin, 3777 East 11 Broadway, here in Tucson. 12 The only purpose for being here this evening is to 13 point out to you all that there's other programs available 14 of the type that you're doing now. Not just -- I put that 15 in the book up there so I don't have to go through, you can 16 just review it at your leisure. 17 I represent the mortgage industry and my company 18 actually has set aside about a trillion dollars of 19 commitment through to 2010 for low income and minority home 20 buyers. We also have a home buyers club that is educational 21 for the first time home buyer and so forth. And I'm sure 22 you're all aware there are other alternatives and not only 23 with my company but several members out there that have the 24 ability to do what you're doing. I just wanted to point 25 that out to you. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 40 1 MR. MORENO: Thank you. 2 Jill Osuna, followed by Jim Wilcox. 3 MS. OSUNA: Hello. My name is Jill Osuna. 2856 4 North Balboa. I am a proud owner of a new Habitat home. My 5 husband are so thankful to have an opportunity to buy our 6 own new home. We truly didn't believe we would be able to 7 afford a home. 8 Even though my husband works at U of A, the pay 9 raises have been frozen for years. Mainly because prices 10 for homes in Tucson have skyrocketed, so many people moving 11 to Tucson from states like California and Texas, it has made 12 it especially difficult if not impossible for low income 13 families like ours to be able to afford a home. 14 Habitat for Humanity needs help with funding or 15 ways to raise money, because there are so many good and 16 honest low income families in Tucson that need help. Many 17 of us were stuck in overcrowded or unhealthy apartments like 18 mine. We had constant mold and which caused me to develop 19 asthma and made me constantly sick. Our apartment was too 20 small to start a family. 21 We were referred to Habitat for Humanity and we ut 22 in an application. Thank God we did because Habitat 23 realized our need and we were selected to be a homeowner. 24 We started working our sweat equity which went to 25 400 hours. It took a long time for the home to be built CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 41 1 because they are built primarily by volunteers. I think 2 because selected homeowners put so much time and effort into 3 building their homes they appreciate having them even more. 4 I know I do. 5 My health is so much better now. I can breathe in 6 clean air. I have my asthma under control and feel alive. 7 And we have the room in our house to start making our 8 family. 9 We have formed a homeowners board and I am 10 president of the association because I want to help build a 11 friendly and peaceful community that we can raise our 12 family. That is why we are here tonight, to ask you for 13 your help to continue to help more families build a better 14 life for their family. Thank you. 15 MR. MORENO: Thank you. Jim Wilcox followed by 16 Nancy Niclowski (phonetic). 17 MR. WILCOX: Hello, I'm Jim Wilcox, 4832 East 18 Elmwood, representing the International Sonoran Desert 19 Alliance, a nonprofit working in Ajo. 20 Under your program there would be no dollars in 21 Ajo. There's been no new house built there in 25 years. 22 Our organization is renovating the historic school. We have 23 raised $8 million to put in 30 affordable housing units. We 24 just received another award to try to make 15 units of sales 25 houses in the rear portion of the school. Under your CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 42 1 program they would not be eligible for the subsidy. A full 2 rehab is equivalent to a new house and I really wish you 3 would look at some flexibility in the way you consider these 4 funds available for new home buyers. 5 Ajo has no new housing. I don't see a builder 6 coming over there, doing that. Houses in Ajo are built one 7 at a time and they are going to people out of state market 8 because they are over $200,000. They are going to that out 9 of state market that thinks 200,000 is cheap compared to 10 California or Washington state. Thank you. 11 MR. MORENO: Thank you. Nancy Niclowski. 12 MS. NICLOWSKI: My name is Nancy Niclowski. I 13 live at 675 South Gollob, this year's chair of the Tucson 14 Metropolitan Housing Commission. 15 I would like to say that on behalf of the Tucson 16 Metropolitan Housing Commission that we do support the idea 17 of the creation of a housing trust fund by the County. This 18 is an idea whose time has certainly come and the City, as 19 Emily Nottingham pointed out, our commission is looking at 20 the feasibility of a housing trust fund. We are in our 21 infancy stages so I cannot say on behalf of the commission 22 we agree with all of the detail because we're at the point 23 looking at the different sources of funding and uses of 24 funds. 25 I can tell you that we look forward to the CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 43 1 potential of working with the County in the future on this 2 very important project. So thank you very much. 3 MR. MORENO: Thank you very much. 4 Pat Bentrik (phonetic) followed by John Majock 5 (phonetic). 6 MR. BENTRIK: I'm Pat Bentrik. I'm with COPE 7 Behavioral Services. We have an affiliated affordable 8 housing company, 82 South Stone. I just wanted to thank you 9 also for your work on this and for the Board of Supervisors, 10 and the staff for what they are moving forward with here. 11 I think it's really important to maximize the 12 number of affordable units that we create in this community 13 and because of that, I think we need to keep this simple. 14 Simple because already if we would just focus on new 15 construction rather than rehab and other types of programs, 16 it makes it easier to set up. And I think we've got to 17 start up something that will get the maximum number of 18 affordable units into the market. The greater that we have 19 with varieties of programs and types of housing, the larger 20 the bureaucracy will get that needs to oversee and manage 21 this. I think we need to really keep this simple. 22 There are other types of affordable housing 23 programs that provide a number of things. Believe me, I'm 24 not saying there is enough to go around for what the need 25 is. For us to create a very, very complex system here, it CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 44 1 may slow down the process. New affordable housing can be 2 done at a market rate that we all know what it is. When you 3 get into rehab, all of a sudden, the expenses go up and 4 affordability slips away. 5 I encourage you to keep up the good work that 6 you're doing and keep this as simple as possible with the 7 goal of maximizing the number of affordable units that we 8 put into this community. Thank you. 9 MR. MORENO: Thank you. 10 John Majock, followed by George Pettit. 11 MR. MAJOCK: My name is John Majock, representing 12 Metropolitan Pima Alliance, 310 South Williams Boulevard, 13 Suite 110. 14 We share the fact that Pima County has created the 15 Affordable Housing Committee with diverse membership and it 16 is troubling, the Housing Trust Fund's effort to make 17 additional funds available to the local community and 18 address the challenge of affordable housing. Metropolitan 19 Pima Alliance is concerned that housing prices for new homes 20 and resale homes are escalating at the rate that exceeds 21 current earnings and wages in this community. This fact 22 provides existing homeowners with substantial equity and 23 opportunity for profit in their homes while making it 24 difficult for first time home buyers to purchase either a 25 newly constructed or existing home. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 45 1 Our membership organization requests the Housing 2 Commission and Board of Supervisors to acknowledge and 3 incorporate the following statements and suggestions. One, 4 the lack of affordable housing is not caused by new home 5 construction. The solution to the lack of affordable 6 housing should not be borne solely by real estate developers 7 and new home construction industry. Other sectors of the 8 local community should be considered for funding sources to 9 the Pima County Housing Trust Fund. 10 Two, numerous variables influence the price of a 11 new home. In addition to home builder profit MPA asks the 12 Pima County and the Affordable Housing Commission to review 13 and understand and to the extent possible influence the 14 following areas in support of affordable housing: A, 15 availability of developable acreage. B, price of raw land. 16 C, government procedures and permitting costs. D, 17 cumulative impact and development fees. E, cost of 18 construction materials. 19 Regarding the report by Pima County in 2004, MPA 20 believes that no contributions to the Pima County Housing 21 Trust Fund should be assessed on entry level market priced 22 homes. 23 Finally, MPA encourages emphasis on community 24 economic development, job creation, and earning increases 25 which is an important component in finding solutions to CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 46 1 increase local home ownership. Thanks. 2 MR. MORENO: Thank you. 3 George Pettit followed by Peggy Hutchinson. 4 MR. PETTIT: Hello. My name is George Pettit, 5 5341 East 10th Street. I was one of the commissioners on 6 the first housing commission, and I was really proud of our 7 work. John Miles was on there. We did a lot of hard work. 8 I worked at Casa Maria Catholic Worker Community 9 for the last 19 years. We proudly serve the people in this 10 community who are desperate for food. We do that on a daily 11 basis. We are closed on Thanksgiving and Christmas because 12 other people provide that. At Casa Maria we are members of 13 the Pima County Interfaith Council. We are looking out for 14 the common good in our community. As such, we support the 15 fee schedule from the Board of Supervisors. Actually, we 16 would support the schedule that provides the most money for 17 housing, whichever schedule that is. 18 I would have to agree with the last speaker, I 19 think we need to look for more sources on top of that 20 funding to be able to do what is necessary in this community 21 to provide enough housing for everyone. We find all of the 22 conditions attached by the Commission to the spending fee 23 schedule as unacceptable. All of those conditions. They 24 eliminate flexibility. 25 I think eliminating the rehab component is just CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 47 1 kind of unconscionable. We have to take care of people in 2 houses that are falling down around them or are in need of 3 support. We need to be doing that. 4 I think we're all aware of what Katrina did, and I 5 saw a partial critique of what people thought went wrong 6 there. This critique said that one aspect of the problem 7 was that public policy was allowed to serve the private 8 interests. I would hope that on this commission, as we're 9 looking at the common good, we're looking at the community, 10 we won't allow private interest to drive the public policy 11 here. 12 I think we need to have flexibility. We need to 13 raise the most amount of money that we can. There shouldn't 14 be a cap. If someone has enough money to buy a really 15 expensive house, they need to contribute to the community. 16 I want to thank you for your time tonight. 17 MR. MORENO: Thank you. 18 Peggy Hutchinson followed by David Goldstein, 19 followed by Pat Devito. 20 MS. HUTCHINSON: Good afternoon, Peggy Hutchinson, 21 executive director of Primavera Foundation, 702 South 6th 22 Avenue. 23 I want to speak to two particular issues. I could 24 reaffirm certain points. One is the housing conservation 25 and rehab. The other is the question of partnership between CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 48 1 nonprofit and for-profit and the issue of leverage of funds. 2 We, as I said, are a nonprofit. We work with folks from 3 homelessness to home ownership. We have worked with a lot 4 of folks who have been homeless in our community for more 5 than one generation who have become first time homeowners. 6 We have been building homes, we have been rehabing homes, 7 rehabing multi-family housing. 8 We are part of Neighbor Works America which is a 9 network of about 250 organizations and communities across 10 the United States. We're connected to Neighborhood 11 Reinvestment Corporation. 12 The reason I mention all of that, we're beginning 13 to look with other colleagues across the country at what 14 makes sense, how do we get the most folks in home ownership, 15 first time home ownership and keep them. Many communities 16 have designed housing trust funds across the country. What 17 we're seeing is what makes a difference is where you can 18 begin to leverage funds. 19 For example, we are a medium-sized nonprofit in 20 Tucson. Because of our connection to Neighbor Works 21 America, because we work with a lot of for-profit businesses 22 here in Tucson and across the U.S., we leverage literally 23 hundreds of thousands of dollars for our community and we're 24 able to do that because of that networking. We combine 25 those funds with the City and with the County so that people CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 49 1 will become successful, first time home buyers for example. 2 We do have the prepurchase counseling, we have home 3 ownership program, we have financial literacy. We are 4 beginning post-home ownership. 5 We are able to leverage down payment assistance so 6 when you look at people's numbers and credit scores we -- 7 you think that there is no way, we work so many people who 8 build the homes in our community. They wouldn't be able to 9 purchase their own home except they happened to partner with 10 us or with other nonprofits in our community and they become 11 first time home buyers. 12 What I want to say is please be flexible, 13 including the conservation of homes in our community. We're 14 able to rehab homes fairly inexpensively and get folks in. 15 Consider the fact that if we don't partner nonprofit, 16 for-profit, we're saying goodbye to literally hundreds of 17 thousands of dollars that could come into our community. 18 We're delighted to raise that money and combine it with the 19 county funds. Think about that and again, thanks a lot for 20 taking the time. 21 MR. MORENO: Thank you. 22 David Goldstein followed by Pat Devito. 23 MR. GOLDSTEIN: David Goldstein. I'm president of 24 Diamond Ventures, 2200 East River Road. 25 First of all, since Mr. Posner took a shot at you, CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 50 1 I would like to commend you at the good work you have done. 2 The key to this thing is to raise as much money as 3 possible. I would like to address two aspects. One is the 4 time of collection. We feel very strongly that the right 5 time is at the point of sale. That's when the full sale 6 value is recognized, you get the benefit of the lot, the lot 7 premium, all the goodies that the builders tack on, that's 8 where you get the full value. 9 The second part is this whole fee schedule. It's 10 not a matter of what the fee is, it's how many houses are 11 built. We want to encourage and not discourage the number 12 of houses that are built and that's how we're going to get 13 the most money into the trust. And I can tell you, with a 14 fee of $10,000, that's going discourage building, not 15 encourage. So I would ask you to reconsider and come up 16 with a more reasonable count. Thank you. 17 MR. MORENO: Thank you. 18 MR. DEVITO: My name is Pat Devito, 2738 East 19 Fourth Street. And I know you're working hard because I'm 20 on the City Commission and like Nancy, I look forward to 21 working with you, community-wide, regional-wide in the 22 future. 23 I support the Board of Supervisors' proposal in 24 general, particularly the aspects of the widest possible 25 use, the most flexibility in terms of the use of the CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 51 1 funding. One of the things that's in the Board of 2 Supervisors' proposal is the opportunity to rental rehab and 3 I think that's very critical. 4 There are lots and lots of folks in our community 5 who live in rentals. Many of these people are low income 6 elderly, they're the people we have been seeing on TV. They 7 are people with disabilities, they are very low income wage 8 earners, people who work in hospitals, nursing homes, 9 restaurants, people who wash our dishes, wash our cars and 10 they also need a safe place to live. And if we only limit 11 it to sale of new homes, down payment assistance, I think 12 we're leaving out a very large portion of the community, 13 particularly the aspect a number of people have mentioned, 14 working with the nonprofits. So I would again urge the 15 widest most flexible use of the funds. Thank you. 16 MR. MORENO: Thank you. 17 We'll take a short recess. 18 (A recess was taken from 6:50 to 6:57 p.m.) 19 MR. MORENO: Okay, we're back in session. 20 Is there anybody that registered to speak and did 21 not get an opportunity to do so? 22 Want to come forward, please? 23 State your name and address for the record, 24 please. 25 MR. FLAG: My name is Brian Flag, 401 East 26th CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 52 1 Street. I live and work at Casa Maria, the Catholic Worker 2 house that did the soup kitchen that George talked about. I 3 really learned something tonight. The thing that struck me 4 was the one about what the income of people has gone up 4 5 percent but the housing cost has gone up 40-something 6 percent. Those are the people that I see every day and that 7 we work with when we do organizing through Pima County 8 Interfaith Council. And you know, that's who I would like 9 to put forward, not my agency or anything like that. 10 And so, there is a little bit of history to this 11 thing. Like, with PCIC, Pima County Interfaith, we went to 12 the Supervisors in '97. We were concerned about housing and 13 asked them to put it on that bond. It did get put on and we 14 went out and got the vote out for that issue on the bond 15 election. That happened at the last bond election, too. We 16 went in there and made sure that housing was on there and we 17 worked to get the thing on. 18 What happened in '97 was, we didn't know if it was 19 going to go through or not. There was a hearing at the 20 Board of Supervisors. We were sweating it out. And as it 21 turned out, it all kind of hinged on this one supervisor. 22 He used to be there, his name is Mr. Eckstrom. We wanted 23 him to kick in for like $5 million. We were all worried. 24 He got up and said, I like big round numbers, I'm here to 25 motion $10 million. We had the place filled, the place CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 53 1 erupted. It was a big glorious day, we actually won 2 something. 3 So anyways, here's the deal. It comes down to 4 politics, right? We all need three votes on the Board of 5 Supervisors. I think that if this thing sneaks through, 6 nobody knows about it, there's nobody in the room the day 7 it's voted on, maybe the developers will get their way. 8 Because the stuff I saw up on the board there seemed like it 9 was real self-serving in the interests of housing 10 developers. 11 My concern is the people that are severely 12 underhoused and suffering in this community. What I think 13 can happen is a replay of what happened in '97. I think 14 that if light is shown on this whole process, if publicity 15 gets out and if the Board of Supervisors' room is packed 16 again like it was then, politically, like the poor people 17 win on this one, because it is the affordable housing thing, 18 and I think industry will look bad politically. 19 I would urge you, you know, assuming that you 20 could bet on me and PCIC and the media bringing light on 21 this thing, I would hope that, you know, we're going to win 22 on this one. So please change your recommendations. Thank 23 you very much. 24 MR. MORENO: There being no other speakers, I'm 25 going to close this portion of the public comment and open CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 54 1 it up for the commission members for discussion. 2 MR. GREENBERG: Mr. Chairman. 3 MR. MORENO: Mr. Greenberg. 4 MR. GREENBERG: First of all, I would -- I bet 5 they can hear me okay, can you in the back? 6 I'd like to first of all request that anybody who 7 has any ideas for alternate ways of raising money get those 8 to Betty's office before our next meeting which is October 9 17th, so we can discuss the possibilities of raising a lot 10 more money than the $3 million that we're looking at here. 11 And secondly, I would like to move that we table 12 any further discussion until that meeting. 13 MR. TACZANOWSKY: Edward Taczanowsky. Second. 14 MR. MORENO: I have a motion to table further 15 discussion on this hearing today on Affordable Trust Fund, 16 table for Affordable Housing, seconded by Ed Taczanowsky. 17 MR. GREENBERG: I don't want to discuss things on 18 the motion, but there are questions I would hope staff could 19 resolve prior to our meeting on the 17th. One had to do 20 with item 1 on the proposal, residential, that they move 21 forward to close of escrow to the Pima County Housing Trust 22 Fund. And I would hope that staff would review the 23 statutory ability of Pima County to do that. 24 We had long discussions on this when we did 25 development impact fees and whether or not statutorily Pima CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 55 1 County could assess the fees at closing or they could assess 2 the fees at building permit. I would hope the staff could 3 review that for us and give us that information when we're 4 at that meeting. 5 MR. MILES: Mr. Chair. 6 MR. MORENO: Mr. Miles. 7 MR. MILES: I have a question about tabling it. I 8 know what we've done on our committee, we keep putting off 9 and keep putting off and keep putting off. If we're going 10 to table this until the 17th, I would like to see on the 11 17th we either vote it up or vote it down -- 12 MR. MORENO: I agree. 13 MR. MILES: -- instead of putting it off. 14 I was on the 1997 board committee and it took us 15 years before we could do anything with that money because we 16 have other things on the agenda we have to deal with, as far 17 as the restructuring of the rating schedule which has put a 18 hold or put a stop on all the proposals that have come in. 19 We really can't act on anything. We're going to meeting 20 ourselves to death. I would support tabling it if we could 21 come up with a decision on the 17th of October. 22 MR. GREENBERG: I think we made, we made a 23 commitment we would get our response to the Board of 24 Supervisors by November. I'm with you on that. 25 MR. MORENO: Mr. Taczanowsky. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 56 1 MR. TACZANOWSKY: Thank you, Mr. Chair. 2 There are certain things I would like to see at 3 our next meeting. Number one, I would like to see someone 4 give me the legal reasons why we cannot include resale on a 5 4 to 1 basis. I think if we could include resale somehow 6 into this, which is not new home construction but resale, I 7 think that a lot of our funding problems would end and we 8 could take a look at other things to use the money for 9 besides just new home down payment assistance. 10 I'd also like to see a budget for the counseling 11 component. I know a lot of people have asked for counseling 12 that I've heard here today. I would like to know what the 13 amount of money would be to do that, and I think you can 14 extrapolate out from what we're doing now and give us a lump 15 sum yearly budget so we would know what we're talking about. 16 And then I would also like to have the charts 17 filled out so that we are apples to apples, I know that some 18 of that information is available, and make it very clear 19 that number one, the Supervisors' recommendation is based on 20 valuation, which does not include all the land costs. And 21 the other one is. And I think that the other one that is 22 recommended from us, at least from my initial calculations, 23 actually gets about a million more than what was proposed by 24 the supervisors. 25 And the last thing is that I know of no other home CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 57 1 building industry association or home builders group in the 2 country that has come forward and supported anything like 3 this, so we are on the cutting edge of trying to be 4 community oriented here. 5 MR. MORENO: Thank you. I think staff wants to 6 respond to one of your comments. 7 MS. VILLEGAS: I want to apologize for not having 8 the numbers on that table. We didn't receive them until 9 this afternoon. And we weren't able to put them into the 10 power point presentation. That's why they didn't get in. 11 MR. TACZANOWSKY: I think they could have been 12 given verbally and it would have been a lot better for the 13 people to have that information. 14 MS. VILLEGAS: I apologize. 15 MR. MORENO: Mr. Escobedo. 16 MR. ESCOBEDO: I have nothing. 17 MR. MORENO: Any other discussion? 18 MR. THOMSON: There's been some discussion tonight 19 about rehab. Could staff give us information on the 17th -- 20 I'm fully aware that a new house has a warranty for seven 21 years, which I'm sure is a great help to low income people. 22 I would like to have staff tell us what the guarantees or 23 warranties you get from a rehab are so as we start to 24 consider this we have all the information on the table. 25 MR. MORENO: Mr. Miles. CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 58 1 MR. MILES: The meeting on the 17th of October is 2 also a public meeting, so I would like to invite everybody 3 to see how the process works. 4 MR. CRADDOCK: Steve Craddock. 5 Somewhere in my notes here, one of the gentlemen 6 in the crowd brought up legality in accordance to the 7 Federal Housing Act. I would like to instruct staff to help 8 me out with what we should do, but I think we need to 9 instruct staff to review the viability of whatever plan he 10 was talking about, whether it was the recommendation of the 11 Board of Supervisors or this commission as to whether that 12 could be applicable. 13 MR. MORENO: Was that for the collection? 14 MR. TACZANOWSKY: That's on the disparate action 15 clause of the federal government. We don't want to violate 16 federal law, so that's what we need to know about. 17 MR. MORENO: Anything else? 18 We have a motion. 19 Mr. Anderson. 20 MR. ANDERSON: Call for the question. 21 MR. MORENO: To table any action upon review of 22 the comments and recommendations made today for our meeting 23 October 17th. 24 All in favor say aye? 25 Opposed? CALABRO REPORTING SERVICES, L.L.C. 520.798.1808 59 1 Motion carries. 2 Next item on the agenda. 3 MR. GREENBERG: I would like to request that staff 4 makes sure staff gets the questions we have had during this 5 period so we can take action on the 17th. 6 MR. MORENO: Before we get to our last item, I 7 want to thank everybody for their participation and comments 8 and recommendations. I appreciate your taking your time out 9 this evening. 10 Next item is adjournment. 11 Mr. Thomson moves to adjourn, Mr. Anderson 12 seconds. 13 All in favor? 14 Opposed? 15 This concludes our meeting for today. 16 Thank you. 17 (Record closed at 7:10 p.m.) 18 19 20 21 22 23 24 25 CALABRO REPORTING SERVICES, L.L.C. 520.798.1808