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Creative partnerships are key to successful social responsiveness: affordable housing property owners are investing in programs and services that provide access to health care, education and employment as a way to move their residents toward self-sufficiency, to create better living environments and, ultimately, to create more valuable properties.

Social responsibility may be a hallmark of affordable housing, but funding social and human services for low-income residents is becoming more difficult, and will likely get tougher yet for HOPE VI developers. Many such developers are building mixed-income communities that will have residents with a range of incomes, and different needs and demands for amenities.

Funding social and human services programs demands creativity, say property owners. First Realty Management Corp. (FRM) of Boston, which has a mixed portfolio of 5,500 units in New England. has had a family-run foundation provide funding for some of its social services programs.

Interstate Realty Management (IRM). the management arm of Marlton. NJ.-based Michaels Development Co., relies heavily on a U.S. Department of Housing and Urban Development (HUD) grant to fund the salaries of their estimated 80 social services coordinators, who link residents with essential programs and services.

National Church Residences (NCR), (Columbus, Ohio. also uses HUD funds, as well as a foundation and other sources, including the rent collected from those who use its rooftop space. While NCR's rooftop space may raise a comparatively small amount of income, leasing its air space to a telecommunications provider demonstrates its capacity for creative fund raising.

Ask these and other providers of affordable housing and they likely will concur that social consciousness has benefits beyond helping residents. It appears that providing low-income residents with programs and services, such as job skills training, education and an access to health and human services, makes a property less costly and more valuable. Owners say that in collaboration with property revitalization, providing these services results in having residents who value where they live while lowering security and maintenance costs and reducing crime.

For many property owners, these benefits are anecdotal, but nevertheless, they insist that investing in programs and services moves residents toward self sufficiency, creates a better living environment and, ultimately brings greater value to their properties.

Funding Sources Come With Rules

Finding funds to support these programs is challenging. For-profit housing providers, such as First Realty Management, are constrained. They do not have access to foundation grants and other funding streams available to nonprofits because a nonprofit's IRS 501(c)(3) designation allows them to accept foundation funding, grants and tax deductible contributions. Likewise, tax credit properties are limited. HUD provides up front help, albeit lean, and public housing providers are grappling with another issue: changes in the HOPE VI public housing program.

For years, property owners have devised ways to be socially responsible. Then, in 1995, as the technology revolution was gaining momentum and a year before the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act, HUD's office of Multifamily Housing formalized its commitment to promote self-sufficiency for residents of its multifamily-insured and assisted housing by creating the Neighborhood Networks Initiative. It was one of the first federal programs of its kind.

The initiative promoted created site-based computer centers, which were seen as a way to offer computer skills training to residents in an industry that would likely skyrocket and take these computer-trained residents with it. But if property owners did not know already, they learned that it took more than computer training to move residents toward self-sufficiency. They needed health care, education, child care, job skills and jobs, but HUD's enthusiasm for these centers was not equaled by financial incentives. HUD offered technical assistance, provided by a contractor, but real dollars were never forthcoming.

While HUD provides seed capital, it has never made a commitment to long-term financial support, maintaining that centers must become self-supporting if they are going to survive and flourish, shifting dependence from public to locally-based private sector support for their subsistence.

Regardless of HUD's position on funding, there are more than 1,200 Neighborhood Networks centers throughout the United States, Puerto Rico and the Virgin Islands. A number of property owners operate centers at many of their sites.

For years HUD has weighed how it could measure the effectiveness of these centers on residents but has yet to come up with an across-the-board formula. The reality is that there is no one standard for center operation. Likewise, there is no single standard by which to measure the financial impact on a property owner. In 2001, HUD expanded its Neighborhood Networks Initiative to HUD's Office of Public and Indian Housing.

Finding Partners to Support Programs and Services

So, fund raising has become a venture into the unknown that has reaped some unusual partnerships and funding sources.

Several years ago, Microsoft donated $129,000 in software, cash and technical assistance to the Community Preservation and Development Corp. to develop a computer center at a revitalized property in Northeast Washington, D.C.

Trump AC Properties once partnered with IRM and trained residents of a 127-unit property in Atlantic City, N.J., to work in the gaming industry.

Not all sources are unusual, on the surface at least. NCR, which owns and manages more than 225 senior and family communities in 26 states and Puerto Rico and five health care facilities for the elderly, received a HUD grant of $3.3 million in 2002. The money is used to hire service coordinators at 30 of its properties; that was in addition to the $2.3 million it received from HUD in 2001, enabling the faith-based housing provider to aggressively expand its programs. To date, NCR has service coordination programs at 148 of its properties, which includes 18 in development.

Service coordinators may be required by HUD to link residents with health and human services, but they are not required to raise funds for their properties. Nevertheless, it is not unusual for them to find ways to improve the living conditions for residents.

According to Patrick Higgins, Director of Communications at NCR, a service coordinator may arrange special events, such as bake sales and craft sales. Others write grants for such items as computers, which are used at their property, Higgins said. Always trying new approaches to find new fund raising sources, NCR is now formalizing a program that will help service coordinators raise money and in-kind products and services for their sites.

Rooftop Rentals Reap Revenue

The reality is that not all affordable housing providers tap the HUD funding stream to hire these coordinators. Some are not aware that the funding exists.

But by far the most novel approach taken by NCR is the rental of rooftop air space. This opportunity emerged in 1996 when the telecommunications industry deregulated. NCR rents rooftop space at two of its properties in Pennsylvania to a cellular phone company, netting about $40,000 per year. NCR is eager to rent more, said Higgins, but it is not making a deliberate effort to promote the availability of its rooftops for revenue generation.

Raising funds for NCR's 17 tax credit properties is a challenge--HUD funding for service coordinators does not apply to tax credit properties, but the rooftop rental can be a valuable funding source for NCR and other housing providers.

"HUD supports the 202 program (housing for the elderly) with service coordinator grants, but it does not support the tax credit program, making these more difficult," said NCR's Terry Alton, Director of Support Services. "We have had to be more creative to assure that residents have services."

About 18 months ago, NCR forged a new partnership with the Ohio State University's College of Social Work, whose students serve an internship at three of its properties.

"It's a two-way benefit because there's no cost to us as the students are unpaid, and the benefit to the university is that its students have a learning environment," Alton said.

American Association of Service Coordinators (AASC) Executive Director Janice Monks said her group is lobbying, but the federal funding environment is bleak and funding to help tax credit properties is problematic.

In 2002, HUD awarded 223 service coordinator grants totaling $30.4 million. A total of 25,012 units with 244 developments benefited.

AASC, she said, is advocating that tax credit owners be allowed to apply for the same grant as 202 property owners with caveats, such as a matching program, that would allow for the continuance of the service coordinator program after a HUD three-year grant expires.

According to Monks, her association conducted a small survey which found that the services provided by service coordinators help residents and reduce costs resulting from eviction and criminal activity. She said no survey has been conducted on the bottom line impact on property value.

The Eternal Optimist

Jackie Jones is the eternal optimist. The vice president of social services at IRM, with a portfolio of more than 200 properties nationwide, seeks alternative funding and unique partnerships for sites with limited budgets. The Atlantic City site is a prime example.

"Funding sources in this environment are limited so you have to become more creative to access resources," she said. "However, the housing industry has an advantage because we have a population that some, especially nonprofits, want to tap into. Often, these nonprofits obtain funding and don't have direct access to a real population. We have it--our residents.

"However, to attract these agencies, you may need space for them to work. If you have some type of community space, whether it is a freestanding building or a community room, you have another advantage. Then, if you can offer staffing, like a social services coordinator, you are in an even better position."

Interstate now has 80 service coordinators and 25 computer facilitators/instructors at 165 affordable properties, half of which are HUD 202. Like other property owners and managers, Interstate partners with colleges which provide interns who perform the work of staff. Interns from Temple University's School of Social Work, for example, tutor in an after school program. A partnership between a college and the Trenton, N.J., school board links residents with a General Equivalency Degree program. A nine-year-old partnership with Philadelphia's Please Touch Museum offers a parent education program and a day care certification program.

"The reality is that the museum had a grant and needed a population to work with and we had it," Jones said.

In Brooklyn, N.Y., a ministry had funds, but needed space to operate a social program. A memorandum of understanding was developed and it now uses a community center at an IRM site to operate an after school program and youth activities.

According to Jones, one of the biggest advantages of partnering with a housing property is its built-in body of potential patrons/users that a nonprofit may desperately need.

The object is to tap all sources, Jones said. HUD and finance agencies fund Interstate's service coordinators at properties for the elderly; the Neighborhood Networks centers are funded through reserves for a property's replacement account or budget-based rent increases. Jones acknowledges that dollars for these types of programs are indeed limited.

According to Jones, IRM's parent, Michaels Development, has become the largest developer of HOPE VI mixed income communities and provider of social services in a housing environment where public housing and market rate housing cohabit. Interstate will face new challenges as it assumes management of HOPE VI properties.

"The reality is that we have several different markets to respond to," Jones said. That issue may get further complicated as the fate of the HOPE VI program is determined by a U.S. president who is looking to cut it in 2004.

B. Kreisler, ImPrint LLC, is a consultant to the affordable housing industry, providing public relations and social marketing support. She can be reached at 703/366-2861 or e-mail to bkreisler@imprintllc.net.
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Author:Kreisler, B
Publication:Units
Date:Jul 1, 2003
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