by William R. Frey, Enterprise Community Partners
NHC invites guest blog posters to write on important housing topics. The views expressed by guest posters do not necessarily reflect those of NHC or its members.
Thirty years ago, the Northwest Bronx Community and Clergy Coalition (NWCCC) organized buildings to prevent them from becoming abandoned, but the availability of capital to improve buildings was in short supply. Fordham Bedford Housing Corporation began its work in the Bronx during this time by taking over a building on Decatur Avenue, and managing it through a challenging period. They were eventually able to obtain capital through a moderate section 8 program with the City of New York to rehabilitate the building with tenants in place. It was a beginning for the revitalization of this neighborhood and for the growth of a strong nonprofit housing organization. That first 24-unit building was the beginning for an organization that now owns and manages over 3,000 units of affordable housing.
Today, resources are once again in short supply, making it perhaps a good time to reevaluate how they should be allocated.
For the most part, housing dollars today are allocated based upon the merits of a project, with some consideration given to the strength of the housing developer and other factors. In her piece, “Increasing Effectiveness to Maximize Reach and Resources,” Nancy Rase, president and CEO of Homes For America, suggests that funders should consider providing funding based on the qualities of a developer such as “demonstrated capacity to use the funds effectively and efficiently,” resident satisfaction and high property performance.
Funding developers rather than projects could have its advantages. It would:
- Encourage organizations to place more emphasis on resident satisfaction as a condition of funding.
- Reward developers who have strong organizational capacity, consistently serve residents and manage properties well. Those developers could then operate with a fair amount of certainty with respect to funding awards. Many current funding allocation schemes often intentionally distribute resources so that no one developer is rewarded too often, leading to a lot of fluctuation in the number of projects each organization receives annually, and similarly frequent changes in staffing needs.
- Discourage poor stewardship of housing, and prevent low-capacity organizations from developing housing which may requiring additional assistance if buildings fail to perform due to poor management.
- Allow small but effective organizations to receive funding who are currently unable to compete with larger organizations.
There might also be problems. In any funding allocation program, the concern over fairness is crucial. What if the most effective organizations disproportionately serve one racial demographic? What if the funding scheme encourages investment in housing by an organization to the exclusion of all other valuable programs that housing organizations used to provide? Both of these questions are likely to have policy solutions.
The real question is, is there value in creating a scheme that maintains high-capacity organizations, like the Fordham Bedford Housing Corporation, as the stewards of affordable housing?
William R. Frey is Director of Relationship Management of Enterprise Community Partners New York office. Enterprise Community Partners, an NHC member organization, works to create opportunity for low- and moderate income people through affordable housing in diverse, thriving communities.