April 18, 2016
By Randy Billings
Portland is considering requiring developers who receive certain public funds for housing developments to set aside some units for people staying at one of two city-run homeless shelters.
The policy advanced by City Manager Jon Jennings would require developers who receive property tax breaks known as Tax Increment Financing for affordable housing projects, or federal HOME or Community Development Block Grant money, to set aside at least 10 percent of new housing units for people staying at either the Oxford Street Shelter or the Family Shelter.
“I am very focused (on) making sure that the Oxford Street Shelter is a transitional and temporary shelter,” Jennings said. “We need to create greater capacity in Portland for (those) who are Portland people.”
The city is currently seeing vacancy rates below 2 percent and increasing rents, which have made Portland attractive to developers of market rate housing. Some property owners have evicted low-income tenants so they can improve the apartments and charge higher rents. That has prompted concern about low-income people being pushed out of the city.
City staff would work with developers to select, screen and refer potential tenants and provide further support to ensure that they remain housed, comply with lease provisions and not cause a disturbance for other residents. The units would have to remain available to homeless people throughout the term of the public assistance, which in the case of TIFs can be as long as 30 years.
The policy would mostly affect Avesta Housing, the state’s leading nonprofit developer of affordable housing. According to city records, the agency has built 172 units of affordable housing using the city’s Affordable Housing TIF program and frequently receives federal HOME funds. Avesta is currently building its third complex aimed at providing stable housing for homeless people – along with support services 24 hours a day. That model is referred to as “housing first.”
Housing is considered to be affordable if housing-related costs do not exceed 30 percent of household income.
Avesta President and CEO Dana Totman said the agency firmly believes in providing stable housing for people who are homeless, but is concerned about whether the city is prepared to provide the amount of support needed to ensure that its new policy – and the tenants – are successful. Failure to provide those services could result in evictions, lease violations and police calls, he said.
“It takes a level of support that cannot be underestimated,” Totman said. “Housing first” models like Logan Place and Florence House in Portland have been successful because of their around-the-clock staffing, which costs $400,000 to $500,000 a year. “We don’t want a homeless person who has finally gotten a place to live to fail,” he said.
After a decline in homelessness from August to November last year, the number of people using Portland’s shelter system began to rise again.
According to city data, the number of bed nights used at adult shelters in the city, including those operated by nonprofits, were up year-over-year for December, January and February. Each night, 370 adults on average sought shelter in February, compared to 323 the same month a year before. The number of bed nights used in December was up 10 percent (from 8,758 in 2014 to 9,360 in 2015); in January it was up 3 percent (from 9,758 in 2015 to 10,042); and in February it was up 18 percent (from 9,065 in 2015 to 10,724).
Portland currently works with landlords to find permanent housing through the city’s “long-term stayer” initiative. Since April 2015, the program has housed 44 of 60 people who had occupied the most bed nights at the Oxford Street Shelter. Of those 44 placements, only two have returned to homelessness, according to an April 8 memo to the City Council’s Housing Committee, which will take up the policy proposal on April 27.
The memo says that city staff would work to ensure that homeless tenants are able to pay their rents by helping them access housing vouchers and other financial assistance. Long-term support services would be provided through a collaboration with other area service providers. The goal is to move the tenants toward self-sufficiency.
Support services would be provided by the city’s Social Services Division, which is in the process of hiring three more staff members – two at Oxford Street and one at the Family Shelter, according to Dawn Stiles, director of the Health and Human Services Department. She said the program would not add to the city’s operating costs, because it would be funded by MaineHousing, an independent state agency that helps Mainers access and maintain quality, affordable housing.
Stiles said city staff would not necessarily be available 24 hours a day to deal with complaints but would promptly follow up. “Currently if a tenant is disruptive in the middle of the night and a property manager or landlord calls the shelter, we recommend calling the police and we follow up the next day,” she said in an email. “If they call by midnight and we have a staff available, they may accompany the police to the (apartment).”
The program is similar to one offered by Maine Housing. When a developer applies for tax credits, the state agency awards points in its selection criteria to developers who commit to providing a preference for 20 percent of their affordable housing units to people who are homeless or have other special needs. That program, however, is voluntary, and the developers are able to select individuals who may not be in a homeless shelter and may be in a better position to maintain stable housing. It also allows developers to rent those units to other people, if a suitable homeless candidate is not found.
Mary Davis, the city’s housing director, said staff is currently considering whether to make any adjustments to the proposal before presenting it to the Housing Committee on April 27, including how the city’s program would relate to the state’s.
“This review would include the question of allowing the units required by the city to be part of the units set aside under the Maine Housing preference,” Davis said.
Kevin Bunker, a partner in the Developers Collaborative, which builds affordable housing in addition to doing historic renovations, said they have two projects that currently take advantage of the state program, including Osprey Circle in South Portland, which devotes 10 of 48 units to homeless people.
Bunker has not reviewed Portland’s policy proposal in detail and shares Totman’s concern about the cost of support services and who would provide them. But generally, he supports the idea, even though it may result in more work.
“Obviously it’s a huge social problem,” Bunker said of homelessness and a lack of housing for low-income people. “Everyone needs to step up and help and this is a way we can do that.”