Outside Agencies Come to the Rescue
BOSTON - A quick reading of Gov. Deval Patrick’s $11.5 million in cuts to state housing programs appear grim.
A mortgage subsidy program for affordable housing was cut completely; another program thathelps low-to-moderate income first-time homebuyers was cut by over one-third.
But thanks to what administration officials call a unique strategy, much of the 9C cuts, named after the state law that authorizes the governor to take such action, were covered by funds from non-governmental quasi-public agencies.
The result is a public housing program largely unscathed. But the future remains less certain.
According to Phil Hailer, spokesman for the state Department of Housing and Community Development, the state has been working with quasi-public agencies for years. But it wasn’t until Patrick took office and pledged to create a unified housing agenda that things really changed.
“The quasi-publics are our sister agencies that are not funded by taxpayers,” Hailer said. “This coordination is unprecedented and under the governor's leadership it has helped us get through some difficult economic times.”
The last time the state saw comparable cuts was under Gov. Mitt Romney in 2003.
“The difference between now and 2003 is night and day,” said Hailer. “[The] 9C budget cuts to DHCD in 2003 were difficult and services suffered as a result.”
This time the state is getting help, receiving $9.5 million from the Massachusetts Housing Finance Agency, the independent self-financed authority known as MassHousing.
Eric Gedstad, spokesman for MassHousing, which works with the state to provide support for low and middle income residents, said the money will offset cuts to a program that pays a portion of tenants rent.
MassHousing will cover another program that subsidizes mortgage interest payments for privately developed affordable housing projects developed in the 1980's.
According to Thomas Farmer, another spokesman for MassHousing, the money came from the agency’s reserves. The agency raises capital by selling bonds, then lending the proceeds to low- and moderate-income homebuyers and developers who build or preserve affordable, mixed-income rental housing.
No decision has been made yet on whether any other MassHousing programs will be under-funded as a result of the contributions.
The Massachusetts Housing Partnership, another public non-profit affordable housing organization, has committed $2 million to fill the funding gaps in the Soft Second Mortgage program, which helps low to moderate income first-time homebuyers.
The partnership is funded by the banks but also receives state money to support the program.
“We won’t be getting as much from the state so we are contributing some of our funds,” said Ruston Lodi, spokesman for the partnership. “We’re dipping into the bank pool that would normally be used to support rental development, so we won’t be able to do some things.”
But Lodi isn’t complaining.
“Given the need of the state, for us to complain about giving up $2 million is silly,” he said.
Gedstad said that the contributions from both agencies will help maintain the status quo.
“It’ll keep the housing that is already out there affordable,” said Gedstad. “For now it appears that we have been able to mitigate the cuts, but there isn’t an endless supply of money that can be used to patch these cuts indefinitely.”
“The future is uncertain,” he said.