MICAH's comments on MN Housing DRAFT 2020-21 Affordable Housing Plan and 2020-23 Strategic Plan

September 19, 2019

Thank you for the opportunity to comment on Minnesota Housing Finance Agency’s DRAFT 2020-21 Affordable Housing Plan and the Strategic Plan 2020-2023.

MICAH’s Board and Staff appreciate your format and providing a summary of 2020-21 plan, identification of populations served by race and ethnicity, changes from previous plan and program by program description. We also appreciate you conducting a webinar to provide an overview of the plan and posting the answers to questions on your website

1. We appreciate the excellent work you do in coordinating your resources with State and Federal appropriations and investment resources. We continue to request greater transparency in identifying how all of our resources are being managed by MHFA including a budget for staff costs, HMIS costs, Plan to End Homeless costs and other special projects that are funded with our investment income. This lack of transparency of how our resources are being utilized greatly concerns us and we will continue to bring identify this as a concern as we meet and the Governor’s office with Legislators.

2. We are encouraged you are developing strategies to engage people who have/are/at risk of homelessness and housing crisis. As we have stated in multiple comments on documents, we continue to be very concerned about any process that does not include people who have experienced a housing crisis and/or homelessness at the decision making table. While the Governor’s Task Force included testimony from people impacted and provided opportunity for input, there were no people at the decision making level that had experienced a housing crisis and/or homelessness recently. The Interagency of Homelessness does not have people at the decision making level that had experienced a housing crisis and/or homelessness recently. This needs to change immediately! For plans to work, people impacted must help decide what needs to be done and be involved in the implementation process! We request you attend weekly meetings of Freedom from the Streets, Street Voices of Change and contact consultants on Envision/ Tiny Home program, and One Family, One Community for authentic engagement practices with people experiencing homelessness. (MICAH has 4 Board Members from these organizations).

3. We are very concerned that some of the language in the plan and the focus of some funding, appears to imply, that if you have a lower income, you need supportive housing instead of affordable housing.

We disagree with that position.

Since the early 2000s there has been an explosion of the extremely expensive model called supportive housing ($250,000/unit to build, ongoing rent subsidies from Housing Trust Fund and HUD, ongoing support services from service funding from DHS and HUD even though the residents are in permanent housing- (this costs us as tax payers $20,000- 30,000 +/year to support each household in supportive housing).

This inappropriate focus on supportive housing has made it difficult for developers to access the funding for affordable rental units for people with very low and extremely low income in communities where residents utilize mainstream services in their communities.

We are pleased to see a very modest attempt to address the concern about the long term use of supportive housing. We encourage you to support the full implementation of the HEARTH Act amendment to the McKinney Vento Act which would provide new Section 8 certificates for this purpose. We again reiterate last year’s comment: ”MICAH is very concerned about the State's continual investment into Supportive Housing when there are no expectations with State funding for people to make progress/set goals, etc. We are pleased HUD has some expectations. Neither the State nor HUD have a clear plan how to transition people from supportive housing into other permanent housing. Thus we have the same people living in permanent supportive housing who have been using HUD’s Homeless Supportive Housing funding for 10-15 years instead of people currently experiencing homelessness having access to these units. We are also very concerned about the additional funds the State puts into Supportive Housing Units- including Long Term Housing Trust Funds, LIHTC, DHS Supportive Housing Service funding. We request the State itemize the costs of each person/family unit in housing and current length of stay and percentage of successful transition to permanent housing from these programs. None of the people in the supportive housing homeless programs are counted as homeless.”

4. Homelessness continues to increase. Your undercount, utilizing the archaic HUD restrictive homeless definition and the one night PIT count, of the number of people experiencing homelessness indicates it has decreased. The US Department of Education identified 17,750 children and youth homeless in Minnesota in 2018. The HUD number is a misleading undercount and misrepresents all the people experiencing homeless by utilizing the Point in Time Count (PIT) and HMIS. We disagree with any statement indicating homelessness has decreased. The number of shelter beds and transitional housing beds funded by HUD and Minnesota has decreased, so previous beds are not available and not counted. Rapid Re-Housing and Supportive Housing, which serve people experiencing homelessness, are not counted in PIT or HMIS. HUD’s point system incentivizes communities to demonstrate a decrease in homelessness, this discourages many communities from doing a complete unsheltered count during Point in Time (PIT) count. The U.S. Department of Education has a more inclusive definition of homelessness and identifies thousands of youth as homeless who are not in the PIT count or HMIS.

5. We are very concerned about the increasing number of people paying more than 30% of their income for housing and disparities in rental and homeownership. We are pleased to see the agency focus on mismatch of income with rising housing costs. We are pleased you are focusing more resources toward people with extremely low incomes, preserving NOAH units, maintain the Section 8 contract with HUD, and increasing the rental and homeownership opportunities for our diverse populations. We encourage use of HTF for addition rental assistance for people not in supportive housing and increasing resources for transitional housing.

A. We are pleased to see the continual focus by MHFA in addressing the disparity in homeownership and your support for additional appropriations to address this critical issue The funding of the Enhanced Homeownership Capacity Initiative – community based organizations that are representative of the culture they are serving to provide long term homeownership training is critical for more of our people to become homeowners. We support an even more significant increase to Enhanced Homeownership Capacity Initiative and/or the HOME Law, It is critical to address the issues in the Targeted Mortgage Opportunity Program since our current First Time Home Buyer loans ,while doing better, are not making a significant change in our disparity. Please include list of currently funded programs.

B. Capacity Building: It appears MHFA continues to fund the same organizations with these resources. These funds should be focused on funding smaller multi-cultural organizations who lack the capacity to successfully compete with larger mainstream organizations that have been funded for years. The communities they serve remain underserved and unserved as a result.

We need additional funding for smaller multi-cultural organizations who never get legislative funds (and MHFA funds) because they're still competing with larger mainstream organizations. The communities they serve remain underserved and unserved as a result. We need more culturally qualified agencies to provide housing counseling – cover the cost of application and training. We need to support Islamic home purchase financing by informing the public and developing more sources of Islamic banking.

*The affordable rental housing information system must include oral multicultural appropriate and Multilanguage CD's for non-literate populations and/or advocates to provide information verbally.

* Large, medium, and small agencies representing racial, ethnic, religious, disability, and socio-economic groups must be involved in the CoC process and accessing resources to service their community.

6. How are you utilizing your new analysis of impediments to fair housing choice to direct this plan? Please identify each impediment and how it is addressed in this plan. Last year’s plan indicated your analysis would “evaluate factors across Minnesota that restrict housing choice based on race, color, religion, gender, disability, familial status, or national origin and include an action plan to address them.” We believe the goals and evaluation should be included in each annual plan. We see no mention of specific goals or mention in the strategic plan to utilize information from analysis of impediments to direct funding decisions to ensure fair housing choice.

7. MICAH again requests that an accurate listing of all LIHTC units is maintained and open to public inspection. THAT MHFA takes the lead to ensure a coordinated approach with the State, sub allocators and the non- profit set aside to ensure siting is Affirmatively Furthering Fair Housing, that the units are created throughout the Metro area and units provides people choices, opportunities and equity in place in every community. We encourage the 4% tax credits also be included in this report.

8. We encourage you to add accessible to your statement safe, stable and affordable homes. Accessibility not only for people with disabilities but also for people with credit, tenant and/or criminal issues to have the ability to successfully obtain housing.

9. Additional resources for seniors to continue to live in their homes. Thank you accepting our last year’s comments and identifying Accessory Dwelling Units (ADUs) in this year’s plan. MHFA should encourage/ provide incentives to cities that do not require conditional use permits and to use their own homeownership rehab funds for their development. Thank you for also including Home sharing in the plan. We encourage Housing Trust Fund dollars be used to re-start the Home sharing program, it was defunded in the early 2000s , it connects people in need of housing including people experiencing homelessness with Seniors and people with disabilities to share housing. We also support utilizing Housing Infrastructure Bonds for affordable senior rental housing.

10. We are very pleased and supportive of you adding additional strategies developing and implementing strategies to preserve and improve manufactured home parks and encourage you to expand the rehabilitation loan program to all manufactured homes whether in a park or not. Improving the infrastructure, creating more cooperatively community owned manufacture home parks, and providing rehab loans for all manufactured homes being utilized as the primary residence is critical to preserving this valuable housing stock. We also support utilizing part of the Housing Infrastructure Bonds for affordable manufactured home parks, Envision and Tiny homes.

We encourage you to talk with Patrick McFarland at Anoka County CAP agency about how they used CDBG dollars to replace older units, this was a very successful model until HUD required Environmental review on entire parks. We support both State and Federal funding to help residents in manufactured homes to repair and replace units.

11. A program similar to the Home Works program was run for several years in the mid-2000s after we included the Rental Assistance for Family Stability (RAFS) program and rent subsidies into the Minnesota Housing Trust Fund. We are pleased this program, Homeworks, has been reinstated.

12. Evictions: MICAH encourages MHFA to support State Legislation through Minnesota Department of Education which would require classes that include credit, budgeting, background checks and landlord tenant education in high school so that our youth are well prepared to enter the changing rental market. Also that all Landlords be required to provide a copy of the Attorney General’s Landlord and Tenant Rights and Responsibilities book to each tenant.

13. MICAH is very concerned about HUD's limiting and/or de-funding shelters and transitional housing programs. We encourage the State to use maximum allowed for Emergency Shelters and utilize HOME TBRA to assist in rent subsidies for transitional programs not funded in the last CoC funding cycle. We need a strong Continuum to Housing which includes Prevention, Outreach, Shelters, Rapid Re- Housing, Transitional Housing, Supportive Housing with transition plans to Permanent affordable Housing( Subsidized and unsubsidized). MICAH would like to see state allow the HOME funds to be utilized for Tenant Based Rent Subsidies (HOME- TBRA) we believe 10% of State allocation of HOME funds utilized for rent subsidies would assist people to afford rents now.

14. MICAH continues to be very concerned about the cost of funding HMIS and requests an audit of all costs of HMIS- by each State agency, staff time, resources in systems, and provider staff time and costs for systems. We are also concerned about data privacy of people experiencing homelessness and HMIS and other homeless regulations which may be barriers for people accessing homeless services

15. We support increase funding for FHPAP – to prevent more families of color from needing to go to shelters or exist in homelessness. MICAH is concerned that focus on FHPAP funds on people with significant issues, limits prevention efforts and immediately addressing situational homelessness. The result which may create a scenario in which a homeless situation could have been prevented or quickly ending homelessness with little financial assistance becomes a long term homeless situations for people. We need prevention, immediate assistance for situational homelessness and resources to assist those with multiple barriers. A MICAH Board Member reported she has heard people speak to deplorable conditions caused by the overcrowding at several Hennepin County emergency shelters and to urge MHFA to increase the means to alleviate this situation.

16. The plan should be expanded to include relocation costs and transition costs for people from the metro area to other areas of state with available housing and job opportunities. There are jobs and lower cost housing/rentals that could offer more immediate assistance and help to give families a fresh start outside of Twin Cities sooner. A plan that offers transition costs, counseling, and assistance in job/housing restart in out-state communities would be lifeline to those stuck in homeless cycle in the metro area.

17. The Leveraging of resources part of the plan should be expanded. Leveraging with other interests provides a better value on expenditures.

18. We support the Housing Support programs be annually adjusted to FMR and the individual/family needs allowance increase to livable amount and is then adjusted to inflation.

19. More effective reclamation of foreclosed homes (in addition to Habitat for Humanity).

Due to mortgage insurance, lending institutions are not incented to reclaim foreclosed homes so they stay vacant for periods of times while people remain homeless. Mechanisms should be put in place to reverse this trend and reclaim the house and have it add to the rental housing stock or first time home buyers.

This process should be so structured to avoid speculators flipping homes for big profits. Also safeguards to preserve erosion of affordable housing stock in cases of gentrification by profit-oriented development.

20. We continue to be concerned the number of children and adults at risk of lead poisoning in rental and homeownership. Over 1 million units in Minnesota potentially have lead paint hazards and at least 700 children are poisoned by lead annually. How will you address this in your plan?

21. Research estimates we need to invest at least $1 billion/ year in the metro area and potentially an additional $1 billion / year in greater Minnesota to address the actual affordable housing need. In addition to bonding, LIHTC, and property tax deductions are you looking at creative uses of the tax expenditure budget to stimulate the market to produce housing for people under 30% of median income including tax credits directly to landlord/owners?

22. We strongly encourage MHFA to model more supportive housing programs like Tasks Unlimited formed on June 2, 1970 in response to Dr. George W. Fairweather’s success at creating an alternative approach to mental illness hospitalization, now known as the Fairweather Model.

Specific Comments from MICAH Board Members:

The statewide network should include the cultural and religious organizations generally serving the non-English speaking or literate groups.

With regard to the 2020-21 Housing Plan,
Our Commitment to Action in 2020-21

• Increase the number of leaders and staff at Minnesota Housing who are from the communities most impacted by disparities.

• Continue and enhance our journey to become more culturally competent and incorporate these practices into everything we do.

For this and the strategic plan;

Increase Minnesota Housing’s Diversity and Cultural Competency.

Examples of Actions: (1) Increase in the number of our leaders and staff who are from communities most impacted by disparities; (2) continue and enhance our journey to become more culturally competent and incorporate these practices into everything we do

Empower Communities Facing Barriers to Co-Develop Solutions.

Examples of Actions: (1) Continually engage and empower these communities; (2) create more opportunities for participation in program decision making; (3) listen; (4) act on what we learn

There is no measurable numerical metric such as the number of new agencies collaborating with the MHFA with regard to Create an Inclusive and Equitable Housing System

Key Metric: Disparities for housing cost burden, homeownership, poverty, and homelessness, by race.

Key Metric: Disparities for housing cost burden, homeownership, poverty, and homelessness, by disability status.

p 7 Partner and Contract with Organizations Led by the Disproportionally Impacted Communities and Support All Partners to Become More Inclusive and Equitable in their Work

Examples of Actions: (1) Invest in these organizations, build their capacity and provide more opportunities for them to compete for funding, which will lead to culturally appropriate work and direct benefits to disproportionately impacted communities; (2) encourage program partners to assess their leadership and staff composition, their cultural competency and how they incorporate equity practices into their work, learning from partners who are doing this well

There should be a council of refugee and non-English primary language serving social service agencies to specifically provide input into communication concerns – oral and written language, interpretation in culturally appropriate language speaker’s bureau to work WITH communities. There is no mention of increasing the number of employees at the agencies completing the HUD certification process to advise clientele about housing options by paying for their training. After gaining experience within their agency they would be prepared to work directly within the MHFA. These council contacts should be able to facilitate the hiring as full MHFA employees people from these cultures.

Similarly, a multi-tribal council would provide needed input to MHFA and trusted communication within their community about resources and procedures.

There should be a step about working with Islamic compliant formats for those needing funding which does not include paying interest.

“Development of the Qualified Allocation Plan, which lays out the process for selecting rental developments to receive Low-Income Housing Tax Credits” provide a point increases for projects that provide 3-4 bedroom units in addition to 1 and 2 bedrooms, provide point increases for projects that include 20% of AMI units because with an AMI of $100K, many single parents or very low literacy parents 30% of AMI is difficult to reach.

Legislative fixes needed, for MHFA to support:

1. Dept. of Revenue will not allow Sr. Tax Deferral program for seniors unable to clear their title in time. Lack of clear title would be that in going through the application process, mistakes by government agencies and others are found that "clouds" the title, and requires court actions to clear. Many problems can arise in that process such as lack of a qualified attorney, lack of funds for a qualified attorney, etc. Not having this remedy goes through a process called "Confession of Judgement" where the County requires the homeowner to accept a judgement/lien against the property. However, title cannot transfer to "clear title" until all the taxes are paid up, which could take years. Meantime the senior can't get loans or qualify for help from other government programs such as fix-up/repairs. Laws need revision on program eligibility, waivers, exceptions, including MHFA and Dept. of Revenue. Dept. of Revenue had a staffer (claiming to speak for Dept. of Revenue and the Governor) - who refused to help fix existing legislation. He is now working for Rep. Winkler, but Dept. of Revenue still won't fix things through their Dept. Somehow, MHFA legislation needs to overcome the systemic problems which lead to seniors and the disabled becoming homeless in the streets.

2. Disabled seniors and others with barriers will face a City's "Code Enforcement Officer" whereby, per law also in the Dept. of Revenue - that officer can allege anything to be a violation, make it a lien against the property (can be foreclosed on), put the person in jail, create excess fines, and cause them to have a criminal charge. Usually, officers will do 3 charges per time at $1,000 fine each or $3,000 per case. Each conviction even if it's the same thing that wasn't fixed but charged under another case number earlier - can add to increased fines, increased jail time, and increase in criminal charges from misdemeanor to gross misdemeanor to felony for the same house not fixed up in time. The law allowing code enforcement officers and the county to make up anything as a violation needs to be removed.

(Note: discrimination and racism by code enforcement officers and prosecutors exist whereby victims have no remedies. Attorneys, public defenders and advocates usually don't have the knowledge or skills to provide remedies, unless laws made the changes.)

Thank you again for the opportunity to comment on your Draft 2020-21 Affordable Housing Plan and the 2020-23 Strategic Plan.

Sincerely,

Sue Watlov Phillips, M.A.
Executive Director, MICAH