APRIL 2, 2001

PRESENT: Housing – Legislators Bronz and Spreckman, Dodds and Cloidt

Community Affairs – Legislators Carsky and Oros

GUESTS – Legislator Wishnie, Larry Dwyer, Bill Randolph, Dave Meyers, Dave Simpson, Kimberlie Jacobs, Beth Schwartz

Meeting of Community Affairs and Housing called to order by Legislator Carsky and Legislator Bronz.

Kimberlie Jacobs of Hudson Valley Affordable Housing Finance Corporation introduced to the Committee introduced by Legislator Carsky. Kimberlie introduced Beth Schwartz who is the Deputy Director of Hudson Valley.

Discussion ensued with regards to the newsletter that was sent to the Legislature, which sparked this meeting. They work with the Tax credit program, which is rooted in the 1986 Federal Tax Code. It provides a direct dollar for dollar reduction in tax liability that someone owes to the federal government and this tax credit can be used to offset that debt. Over the past 15 years it has become the Federal government’s largest producer of low-income rental housing in the nation. It has produced 1 million rental units, and over 4.3 billion funds allocated. The Federal government gives states allocations of credit in 2001, New York State will be allocated $27.5 million, which works out to $1.50 per person. In 2002, it will be $1.75 per capita, after that it be adjusted. The program has bi-partisan support which is helping it greatly.

There are nine and four percent credits, which relate to how the project is rated in order to receive the credit. The credits also relate to where you get them from – nine percent thru DHCR and from four percent thru New York State Housing Finance agency.

If you take advantage of this program you have to comply with their regulations for 15 years. Most states are asking for an extended use for another fifteen years. This program is intended for low income housing only. The state does audits on the projects, which makes the projects accountable, if they don’t comply they will loose tax credit incentive. If projects don’t stay in compliance the private investors will loose the credits. The tax benefits only last for ten years even though you have to maintain the building for 15 years.

Westchester County has been designated as a DDA which means that it is a Difficult to Develop Area. What that means is that Westchester is a high cost area. This is a designation that you can gain and lose on a yearly basis.

Ms. Jacobs explained how the numbers would work. Some developers are working with the County’s Acquisition Program.

Hudson Valley is a syndicator of projects. They would look at a project, review and make an offer. They have private corporations, banks that they use for marketing.

They have raised 17 million from various banks and Fannie Mae and they provide funding. Banks have been very involved with this because they receive CRA credits. Banks get approximately an 11 percent return on their money. This is very attractive to banks for their CRA credit.

They visit the projects and monitor for compliance with rents, check files and make sure they are being filled properly. They do this to safeguard their investor’s money.

There have been several projects completed in Westchester – Drum Hill, Winwood Oaks. Some of these projects do not have the same connotation as low income housing as the developers are not cutting costs and are making these projects very nice.

There has been a good project in New Rochelle – Westcop – for eight or ten units. It has been a good experience for the first undertaking. We feel that it can be duplicated in other areas of Westchester.

When it says that it is low income, in Westchester it means 60% of the median, which in this County is a reasonable wage. In any other part of the Country it would be classified as middle class income but in Westchester this is not the case.

Bulk of the tax credit projects has been for Senior Citizens. It is addressing the need of Seniors who can no longer maintain the larger homes, but don’t want to leave their communities. They now meet the income guidelines because they are no longer earning salaries.

All of the buildings that they have been involved in with are 100% low income rentals. If property is percentage, then that percentage always has to be maintained, for instance 20% low – a person goes above the median for low income then the next person coming in has to be low. Ratio has to be consistent and maintained in order to maintain their credit.

All low income housing within the past 12 years have been developed to be extremely attractive, developers have not cut on their amenities, etc. They do not look like low-income housing.

New York State has started a program – it is named SLICK. There are no specifics at this point and it would work the same as the Federal program but we are not sure about the money at this time.

It will be good for your State income tax.

New Market Tax credit it was approved in December but now with a new administration and they are not speaking as favorably about it.

Hudson Valley tries to match investing with credits. Most of their investors are banks. Investors are Chevron, Citibank, Fannie Mae. It is very hard for individuals to participate in this because of passive loss limitations.

Discussion centered around individuals participating in this program and it was done by IFCA in Albany. Auggie Gold was the person who did this program and he got individuals to participate in this program.

Question was asked – could Westchester do this. They would love to work with us. It was suggested that they put a proposal together and they should come to our Budget Committee and let’s see if we can come out of it with an entity.

They have helped Westchester with 354 units. Dollar amount is $4 million. There are other syndicators that have help develop other units in Westchester also.

Meeting adjourned at 4:10 p.m.