Under pressure from the federal government to act, the Marin Housing Authority is moving forward with its plan to rehabilitate Golden Gate Village.
The plan — approved on a 5-2 vote by commissioners on Tuesday — calls for a limited partnership to be formed to purchase the buildings and land from U.S. Department of Housing and Urban Development (HUD). The housing authority will be the general partner. The plan does not include the limited equity housing cooperative model, or LEHC, championed by the Golden Gate Village resident council.
The authority, which oversees the 296-apartment public housing project, is under orders from HUD to submit a feasible redevelopment plan by the end of this month. The 60-year-old complex in Marin City has not been well maintained due to years of underfunding by the federal government and requires millions of dollars in repairs.
Marin County Supervisor Stephanie Moulton-Peters, who serves on the housing authority board along with the other four supervisors, said HUD had already extended the deadline once.
“We asked for another extension to vet the co-op model and it was turned down,” Moulton-Peters said. “HUD has said we’re out of time.”
Moulton-Peters said there were other reasons to reject the resident council’s proposal. The use of an LEHC in such a situation was unprecedented. The financial feasibility of the resident council’s plan was in serious question. And the transition of the public housing project to a private co-op would reduce the number of dwellings available in Marin to house low-income residents in the future.
The plan adopted by the commissioners would raise $330 million. It includes more than $117 million in low-income housing tax credit investor equity; $26 million in historic tax credit equity, due to the site’s historic status; a $102 million loan; a $69 million seller carryback loan; a $13 million deferred developer fee; and $1.8 million in accrued interest.
The plan includes a number of sweeteners to make it more attractive to Golden Gate Village residents. Marin County has committed to using $2 million in American Rescue Plan Act funding to create a Golden Gate Village endowment fund. The fund will pay for such things as job training, educational scholarships, debt forgiveness and pathways to homeownership.
In addition, Marin supervisors will consider passing an anti-displacement ordinance that would prohibit involuntary displacement of low-income residents living in properties with a federal operating subsidy or low-income housing tax credits when a property is sold, refinanced or rehabilitated.
The housing authority also will create a waitlist preference for former Marin City residents who want to return to Golden Gate Village.
Nevertheless, Supervisor Damon Connolly and Sarah Canson, one of two Golden Gate Village residents on the housing authority’s board, cast dissenting votes.
“I would like to see a deeper dive into the potential funding opportunities to address the funding gap in the LEHC model before moving forward with the plan,” Connolly said. “I want us to leave no stone unturned and work jointly to find a solution that includes homeownership.”
Reaction to the commissioners’ decision from supporters of the residents’ plan was scathing.
“I want everyone to know that I refuse to accept to receive this report in the mighty name of Jesus,” said Royce McLemore, the resident council’s president. “I believe that this is not going to happen.”
The complex sits on 30 acres of land that was once home to Black shipbuilders during World War II. The population of Marin City became predominantly African American following the war because it was difficult if not impossible for Black residents to purchase homes in other areas of the county.
“We all know the history of structural racism in Marin County, the redlining, the restrictive covenants that prevented Black people from buying homes,” Anne Devero-Rosenfeld of Mill Valley said Tuesday.
“Going with the Marin Housing Authority plan perpetuates the racist myth that low-income people can’t manage their own housing,” Devero-Rosenfeld said.
All but a handful of the people who attended the meeting and criticized the decision were members of a large group of White “allies” that has assisted the resident council in making its case.
“I’ve been working on the campaign day and night for about five years,” said Barbara Bogard of Mill Valley. “You’ve been offered the opportunity to do something important and necessary, healing and just, and you simply don’t have the moral courage to make that choice, and that makes me ashamed to live in Marin County.”
Barbara Rothkrug of Mill Valley said, “This is the post-George Floyd era. We need to listen to the residents. Just because they’re not professionals does not mean they don’t know what is good for them.”
Nevertheless, Mike Andrews, a housing expert hired by HUD to advise the housing authority, said, “It is likely that HUD would not conclude that the resident council’s plan is financially feasible.”
Andrews said the resident council’s financial advisers estimate their plan has a $27 million funding gap, but Andrews believes the shortfall is actually much larger.
He pointed out that the housing authority’s plan contains $34 million more to cover the cost of renovations than the resident council’s plan. That is important because the full scope of the work required is still to be determined and construction costs are rising quickly because of skyrocketing inflation.
In addition, Andrews said the very thing that makes the LEHC attractive — that it would offer a semblance of home ownership — could impede its revenue stream.
Both plans called for using Section 18 of the U.S. Housing Act of 1937, which allows for the conversion of public housing to project-based Section 8 voucher assistance. Section 18 also permits housing authorities to partner with private investors to finance debt and access other funds to rehabilitate public housing.
Under the resident council plan to form a limited equity housing cooperative, about $133 million would have been borrowed from the federal government to purchase Golden Gate Village’s buildings and the land they occupy from HUD. The loan would have been repaid over 40 years using income from the Section 8 vouchers.
Under this plan, each resident of Golden Gate Village would have been given the opportunity to purchase a share in the LEHC. Members of the LEHC could theoretically pass ownership of their residence on to their descendants. Andrews said, however, that it is unlikely their children would be at the top of the waiting list for a local project-based voucher managed by the housing authority.
“What that means is that my child would have the right to live in that unit; however, the subsidy for that unit that comes from the local project-based voucher contract would not be available for that unit,” he said.
As a result, income critical to financing the LEHC’s debt would be reduced. Andrews said the same problem could arise when residents occupying larger multi-bedroom homes got older and their children moved out. Under federal law they would have to move to a smaller dwelling, or the voucher income for that residence would be cut off.
Andrews estimates that if the voucher income of just 5% of the 296 residences were lost, it would cost the LEHC $7 million in financing. He says combining the $27 million shortfall, the $34 million less provided for construction and a $7 million reduction in financing due to such events indicates that the residents’ plan actually has about a $68 million funding gap.
Backers of the residents’ plan have maintained the needed money could be raised, but Andrews said, “I don’t believe that HUD would accept $68 million in fundraising as a financially feasible plan.”
Even if the money could be raised, the process would further delay the beginning of repairs.
“The project would sit until you’re able to attract all of that capital,” Andrews said.
Andrews also pointed out that an LEHC would not result in the growth of generational wealth for members because the LEHC would need to keep its dwellings affordable to future members.
Not all the public comments made during Tuesday’s meeting were critical of the commission’s decision.
“I’m having a problem understanding why there is so much animosity,” said Gerrie Kunin, a Marin resident who uses a Section 8 voucher to pay her rent.
Kunin lamented the fact that supporters of the resident council plan seemed unwilling to work with the housing authority “in support of other people who will continually need to be housed.”
Kelly McKinley, a resident of Golden Gate Village, expressed a similar sentiment.
“What about the people in Marin County who have no place to go?” McKinley asked. “If it is locked down in a co-op, what happens to the man who is taking care of his three children and his wife and he only has $60 left out of his paycheck each month because he can’t afford to pay rent?”
“When you make this decision, you have to think about everybody because it’s not just about the poor Black people,” McKinley said. “There are poor people who come in all colors.”
This content was originally published here.
