CHARLESTOWN — Town officials say the state acted in bad faith when it allowed them to proceed with preliminary work on two affordable housing projects even though it knew they would be ineligible for funding.
The ChurchWoods project in Cross’ Mills, consisting of 24 low income senior rental units, and the Shannock Village Cottages development on Old Post Road, with 11 low income family rental units, were to be built in two of the town’s designated “growth centers.” Instead, after two years of planning and related expenses, the land sits vacant and the current owners are still waiting to sell the land to the town.
The Rhode Island Low and Moderate Income Housing Act, passed in 1991, requires cities and towns to have 10 percent of their housing designated as affordable by 2025. In 2006, with just 3 percent of housing in the town deemed affordable, Charlestown voters approved a $1 million affordable housing bond as part of an effort to bring the town into compliance with state requirements.
George Tremblay, a member of the Charlestown Affordable Housing Commission, said, “We’re the only town in the state of Rhode Island where the voters approved a bond issue for affordable housing.”
In August 2012, Rhode Island Housing, the state agency that provides funding for affordable housing projects, approved the town’s request to proceed with the two developments. The projects were approved by the Charlestown Planning Commission and presented to residents at public hearings. The town needed $8 million in loans to complete the developments.
After receiving initial approval, Town Council President Thomas Gentz said, the town spent $100,000 on pre-development work. Geoffrey Marchant, president of the Washington Community Development Corp., the nonprofit developer that was building the projects, added another $50,000 to cover the preliminary costs.
“Engineering, water testing, tribal archaeology, everything that has to do with the process,” Gentz explained.
In November 2012, the agency once again informed the town that both developments were eligible for funding, but that they would now be considered as a single project. Combining the two projects would result in a greater total number of affordable units and make the project more attractive to investors.
In February 2013, Marchant progressed to the next step and requested a $100,000 loan to complete the engineering drawings. In a move that took Marchant and the town by surprise, Rhode Island Housing denied the application for ChurchWoods, citing the elimination of federal housing subsidies for housing for the elderly.
Gentz said he was not expecting to hear that Rhode Island Housing was no longer supporting senior housing projects, because they were eligible under the state’s existing Quality Assurance Program. What Gentz and Marchant didn’t know was that the state was about to introduce a new QAP, one that didn’t include affordable housing for seniors.
“The previous QAP said that senior housing was a priority, and the new QAP, which we never knew about, was being written at the time that they denied it, but it wasn’t public,” Gentz said.
Charlestown officials requested a meeting with Rhode Island Housing Director Richard Godfrey to ask why the agency had changed its mind, but Gentz said that from the outset, it appeared that the decision was final.
“The conversation was really a dead end conversation, because clearly, Richard was in charge, and he was done,” Gentz said. “This is after they had said we were eligible twice. Until February, we didn’t know that they had altered their opinion.”
In an email, Godfrey said ChurchWoods was a victim of federal budget cuts, and because the two projects were combined, the Shannock Village development was halted, too.
“Rhode Island Housing originally issued a ‘letter of eligibility’ to ChurchWoods confirming that the proposed development could be considered as affordable housing under the state’s low and moderate income housing law. However, a determination of eligibility under the housing law does not guarantee that it will receive funding from the Department of Housing and Urban Development, the Rhode Island Housing Resources Commission or Rhode Island Housing,” he said.
“ChurchWoods was conceived with anticipated Section 202 funding from the U.S. Department of Housing and Urban Development. This federal program, which featured capital funding and annual rental subsidies for housing for elderly residents, has been discontinued as part of broad cuts in domestic spending which have cost Rhode Island nearly $100 million dollars of federal housing funds since 2010. Unfortunately, ChurchWoods was hit hard by this loss of funding,” Godfrey wrote.
Marchant agreed that funding for affordable housing was becoming increasingly scarce.
“For the age-restricted development, ChurchWoods, they won’t change their minds,” Marchant said. “The state still has its requirement for 10 percent but there’s less and less money …. I have four or five other projects that I could combine for an economy of scale.”
“Had they been truthful with us, we would not have invested this money,” Gentz said. “Geoff has continued to look for money elsewhere, and those balls are still up in the air. The town has its fingers crossed on that.”
Charlestown and other municipalities, particularly those in rural areas, are generally dissatisfied with the affordable housing law. They have questioned the 10 percent requirement, because they say it does not take into account unique challenges like coastlines, which have their own regulatory requirements. They also object to the power given to the State Housing Appeals Board, which can override local decisions on development proposals.
In October, a joint legislative body, the Rhode Island Housing Act Oversight Commission, authorized the reactivation of a study group to determine whether the law should be revised.
Tremblay said the original purpose of the group was to oversee the implementation of the act, but that it had never done so. “As I understand it, it was a supervisory body that should be have been monitoring the performance of the law all along, but it’s never met,” he said, noting that the group has the potential to initiate meaningful reforms.
“It’s supposed to examine the Affordable Housing Act to assess its performance and look for ways in which the act might be revised to improve its performance,” Tremblay said. “If there were a conscientious attempt to assess the performance of the law based on the history over the last 10 years or so, then the revisions of that law would be binding on all towns. It would be our guide.”
Gentz, one of four town representatives in Rhode Island to be named to the study group, said he was optimistic about its potential make meaningful changes to the law.
“I’m always positive that logic will win out,” he said. “We’ll see.”
Tremblay added, “If we weren’t, we just would not engage. You have to believe you can accomplish something, otherwise you wouldn’t attempt it.”
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