Pledge allegiance to the flag of the question.

Well, great.

First, uh, we need to approve minutes for February the 10th, February the 24th, and March the 24th.

Is there a motion so moved?

Is there a second?

Seconded.

Moved by Councilmember Shackelford, second by Councilmember Ample Ranny.

All in favor, raise your hand.

And welcome to Angie Lawler from the Housing Authority of the City of Frederick, who's going to share with us information about the HACF.

So please come on up to the table and tell us more.

Great.

Can you hear me okay?

And bring it.

Bring it up to your lips, and that way it'll be audible.

Perfect.

Thank you.

Excellent.

That sounds good.

Oh, it's weird.

Um thank you for inviting me.

I'm Angie Lawler.

I'm the executive director of the housing authority of the City of Frederick.

I am happy to come and share some things about the housing authority and about our development program with you today.

Um I'm gonna start by talking about the housing authority in general.

One of the questions I was asked to um answer was kind of how the housing authority and the city are related, how we interact with each other.

Uh the housing authority is an independent public housing authority.

It's established under Maryland law, and we report directly to HUD.

Um we're where we are subject to federal laws, state laws, and HUD provides oversight for our agency.

Um, voucher programs that are funded by HUD.

We also have a family services department, which is funded by about a dozen different grants from local grantors to the state to the city to the county.

Um some grants even come from HUD, and that department is dedicated to serving the tenants who are receiving housing subsidy of some sort.

We also have an active development department.

We are one of the largest local nonprofit developers in Frederick, and I'll tell you more about that as the presentation goes on.

Um our purpose is up there to provide safe, stable, and affordable housing.

Our goal is to serve the people that live in that housing.

We are more than just buildings and bricks and mourner.

We we see our agency as very people oriented and service-oriented.

Um we have some folks who live in our communities who will probably live there forever.

There's a reason that they're there.

And we have some folks who are there just temporarily.

It's a stepping stone.

They need a place and with a little extra help and support, they move through the housing continuum and out of the HUD subsidized housing into the affordable housing that we develop, and from there they move into market rate.

So that's one of the reasons we became developers is we saw a very big gap between the lowest income that we serve and market rate.

It was just too big of a leap for folks to make, and that's where affordable housing lands in that gap.

I wouldn't say it closes the gap, but it's a it's a tool that we have access to.

It's the one that we're using and trying to participate in to do what we can to keep the continuum moving.

Um since 2021, we've completed two new affordable housing developments, and we have two more that are beginning construction this year.

One became began construction last month, and the other will begin this fall.

In total, more than 500 new affordable housing units have come into Frederick through our development program since 2021.

Um these are some pictures of some of our developments.

Ketoct in View is formerly public housing.

We applied for uh Section 18 uh disposition and redeveloped it as LITEC or affordable housing, and then we have 76 units in there, a hundred percent of them are voucher holders.

So what that means is it serves 100%, 30% of the area median income, um, which is extremely low income, and and no one in that building pays more than 30 percent of their income.

And and no one in that building pays more than 30% of their income.

So it's it's a senior building, and it's if you ever get a chance, it's beautiful inside.

We we went with an art theme there too.

Every floor is a different color.

There's custom art throughout, and and it's really beautiful inside.

Boundary Square has been.

Excuse me, Angie.

Councilmember, can I ask a question around that if you if you don't mind?

Sure.

Of course.

We hope we hear this conversation, and maybe you can go into this as I think just kind of 30% AMI, 60% AMI.

We hear these conversations.

Can you explain that?

What that actually means?

Because we hear we hear these terms, and sometimes I don't think people understand what they mean.

That's that's a good point.

Thanks for mentioning that.

Um the area median income is what AMI stands for.

And Frederick, so the the area median income is defined by boundaries, and we are considered part of Washington, DC area median income.

Um and that term is used to determine affordability, it's used in LITEC, it's used in HUD uses it, uh it's a universal term that is defined that in some ways shapes Frederick in an unusual way.

It's unusual for us to be considered the same area median income as Washington, DC.

That's just my opinion.

But it is the way it is, and that's that's how it works.

So 30% AMI would be 30% of the area median income of the Washington, DC area.

And of those folks, affordable is defined by HUD as 30% of your income.

So if we have folks that are making a hundred dollars a year, they pay $30 a year in rent.

If they're making 10,000 a year, they pay $3,000 a year in rent.

You can divide it out monthly, but that's how the HUD subsidy works.

It is just 30% of anyone's income who is receiving a HUD subsidy.

Um so it always remains affordable if their income goes up or down, their housing payment adjusts with them.

Um Foundry Square is open.

That's that's a unique property.

Uh senior uh it's a it's called a twin deal.

It's one of the first twin deals that the state of Maryland ever did.

It's a combination of four percent and nine percent lie tech funding, which is an entire presentation in and of itself to try to explain the difference.

Uh, but one of them is a competitive funding award, and the other one is not, and one of them provides a substantial more substantially more subsidy than 9% competitive funding does, and the 4% still provides a generous subsidy that allows it to be affordable.

And um it's 96 senior units, 56 family fully leased, and Madison on the North Market is 60 new units going in across from the banner school near the Coca-Cola bottling plant.

Um we designed that building during the pandemic, so every single unit has an office space in it.

It's small, but it's there, so you can enough for a desk and homework or working from home.

Um there's special filtration, there's all these outdoor spaces, every unit has a balcony.

We were all quarantined designing a building with not knowing if we were ever coming out.

And actually, it turned out to be pretty cool.

That broke ground um in March, and we'll be having a ribbon cutting in the next few weeks.

I'm sure you'll all receive an invitation for that.

We're very excited about that.

May I ask a question?

Yeah.

I'm always thinking about the future.

And so um, does the housing authority own the mortgage then of these buildings?

So each development that we're part of is it has a unique ownership structure.

So Catoctin View, we are 100% owners of that as formerly public housing, and we own it, and we were the sole developers on it.

We did it, we were bold.

Um it's not it's we we adjusted our business model after that because although it went very smoothly and we don't have any complaints, it's a big responsibility providing the guarantees for development.

And it's not something that the housing authority is really designed to do solely, and we don't have the staffing for it, and it was a real challenge for us to do that.

Um so we shifted our model, and now our model is to partner with guarantors with people who bring the funding, we bring a local perspective, we bring um we bring some of the subsidies to ensure that there's affordability.

So at Foundry Square in Madison, we're part owners, we're minority owners.

In Lucas Village, we share the ownership, but we're majority owners.

So each one is unique in how many owners are involved and what that structure looks like.

That's so so eventually the mortgage is paid off.

So does that create um kind of a future guarantee of affordability then?

Because you're, I imagine, gonna need fewer subsidies, or by that point in time, 30 years is going to need a big renovation, or how do you think about that for 30, 50 years from now?

Well, typically every fifth between 15 and 20 years, we approach a re syndication point where we we remodel, we update, we renew the mortgage, we we keep it, and and our agreement of affordability is then extended.

Now it is an option to not do that, but generally speaking, our mission is to always continue to do that whenever possible if if it is possible.

Now I I would assume that there would be times where the market doesn't allow for that, or there you might have to wait a little longer or whatever, but so far we have found like we're in the process, we're part owners of a community over on 40 that is in the process of resyndicating and we're supporting that, and it's gonna be a whole remodel, and the mortgage never really goes away if you follow that model.

But the property always stays up to date.

By 15 to 20 years of affordable property, it's ready for a refresh.

So that's part of our development pipeline, that's how we see it.

So now we have you know, four or five uh communities in our pipeline pipeline.

So this is a picture of the former Lucas Village site.

I don't know if any of you have been out there, but it's very flat now.

All of those homes are gone, they have been demolished.

Um all that's left is the community center, which is going to be a staging area for our GC, but ultimately will also be demolished.

The the uh history of this community goes back to well, well before 1972, but in 1972 it was made a public housing community.

Um it was still in a flood zone.

This is before Carroll Creek was developed.

I would say probably not the prime piece of property in Frederick, but that's very common for public housing.

You you get the property that you get.

And we built the community and it's been there, we've taken good care of the units, and um unfortunately that area is prone to sinkholes.

I don't know how much exposure you've had to that.

My first uh introduction to a sinkhole, I was just shocked.

I thought it was some sort of made-up story.

I didn't think that the ground would actually open up and swallow things, but it does.

And the property is on limestone, and the the um rising and lowering of the water causes the limestone to move and holes will open in the ground.

And Lucas Village is prone to sinkholes.

Nearby, there have been large sinkholes that have opened that have done significant damage to properties, entire homes have been destroyed.

Um, and and so we we appealed to HUD explaining, you know, we've got so we had a garden plot swallowed by a sinkhole.

That's it.

Let's see if HUD can support us in this, and we applied for Section 18 demolition, is what it's called.

And that's a it's one of the only ways that you can exit public housing through HUD.

There's a couple of them, but that's that's if you can prove that there's a life, health and safety concern, which we did, and to HUD's credit, they agreed like this is a life, health and safety concern.

Let's relocate everyone.

So eighty-eight households were moved from the public housing program, which is one source of funding, to the voucher program or section eight housing choice voucher program.

They all receive vouchers, and we we helped to relocate them throughout the community.

It took us a year to find housing.

As a side note, we called 62 communities in Frederick.

Only 12 of them had units below the voucher threshold.

So the voucher has a threshold.

There's only so much rent you can afford.

You can't go and live anywhere with a voucher.

And because we're in the Washington, DC, area median income, and because we have, you know, HUD HUD uh uses these kind of blanket numbers and these blanket boundaries, and it is what it is, but we only had 12 communities that had and and some of those had a year-long waiting list.

So it took us a long time to find housing.

We were counting on private landlords, and I would say, you know, that's one thing that as a side note, if you're considering affordability, sometimes it's really hard for people to offer rents for folks who are 30% of the area median income.

If you're trying to keep it 30% of their income, it's really hard.

But oftentimes you can ask them to provide rents below the voucher payment threshold.

That's not much lower than market rate.

It's more reasonable and it provides opportunities, more opportunities for voucher holders.

The year before we relocated Lucas Village, we had 30 new vouchers that had been issued, and everyone who gets a voucher has 90 days to find a home.

We extended all of those to 120 days, and 30 of them were returned to us because those folks were not able to find housing in Frederick below the voucher payment threshold.

So part of that is HUD, making sure that that threshold is high enough.

But part of that is Frederick and how we define affordable, and it's probably not something that people think of very often.

But asking even an affordable housing developer that comes before you and asks for funding, one of your very first questions should be are you gonna have rents below the voucher payment threshold?

Because if they're serving 60% AMI, sometimes 60% AMI is not even below the voucher payment threshold.

So it's something to consider.

I think the PowerPoint just disappeared.

Ms.

Wallace, for my for my education, what what is the value of a voucher in what in the Washington DC area?

So that's a nuanced question.

It's and and I'll give you like a brief rundown, but it's complicated.

You wouldn't believe how much voucher holders have to navigate.

So it depends upon the bedroom size, so that varies.

And then there are seven different areas just in Frederick County that have different utility allowances.

And basically, the to give you round numbers, let's say the voucher payment threshold for a one bedroom was fifteen hundred dollars.

So for example, in Walkersville, the water utility allowance is like 30 bucks a month.

In Brunswick, it's like 120.

Uh and it's because the water costs a different amount, and they take that into consideration.

So there's seven of these regions throughout Frederick County, and the voucher threshold is determined based on that.

Um so it it is a complicated question to answer.

It's very nuanced.

But it's something that if an affordable housing developer is dedicated, or if that's a requirement to receive funding to have a certain amount of housing below the voucher payment threshold, that's something that we can walk them through because that number changes annually too.

HUD gives out a new number every year, a new utility allowance every year, and is it gas, is it electric, is it you know, a townhome, is it an apartment?

Uh it's a stack of papers this year big with charts and graphs for every single bedroom size and for all seven areas of Frederick County.

So it's nuanced.

Um but just some good information for you to have.

As far as um the safety risks at Lucas Village, we do you have a question?

Yes.

Yeah.

I know you you're discussing regards to the vouchers and how difficult it was to find housing.

Yeah.

And the length of this project, of course, we know sometimes that now folks will be in return.

Yes.

But in some cases, things happen we're not able to.

Yes.

So then what happens?

Um, well, they so the there's a balance that we strike there.

So what we did is we built housing, we made sure that all of the units are priced below the voucher payment threshold.

And everyone who was formerly a Lucas Village resident has the first right to return.

So that was within our power.

There are certain additional rules that the state applies because it's Litech.

So they still have to qualify to live there.

They still have to follow the rules of the lease, they still have to, you know, there they still have to be a voucher holder if they want to use a voucher there.

Generally speaking, that's the case.

But if somebody you know commits a crime or violates a rule that would cause them to lose their voucher or would cause them to not be able to lease according to the state's standards, that's beyond our control.

So we've done everything in our power.

We created enough units, we priced them, and we've given everybody the first right to come back.

So that was everything that we had control over.

And and then as soon as we get close enough to lease up about six months before, we're gonna notify everybody, get their interest, get their applications, get it moving, and we will just as just as we paid to help move them to where they're at, we'll pay again to help move them back to ensure that it doesn't cost them anything.

We're just making it as smooth as possible.

We'll have a relocation team again, and we'll be assisting them every step of the way, just as we did when they moved out.

Does that answer your question?

Yeah.

Yes.

Okay, good.

So there were a couple of risks that we presented to HUD.

One of them was sinkholes, and it sounds kind of you know, your first question you have might be your rebuilding.

I thought that you were just taking it down.

But what we learned is um is that there is solid rock underneath Lucas Village.

It might be 30 to 50 feet down, but it's there.

And so there are engineering techniques where you build essentially piles or kind of like huge stilts, and you put the building on top of those, and every corner of the building is touching solid earth.

So if a sinkhole opens up, the building is good.

Um the stormwater management was a big part of it.

If you manage the stormwater well, you're less likely to have that problem with the limestone and less likely to have sinkholes.

So we redesigned everything with better stormwater management in mind, which was part of the solution.

Um of the things that HUD flagged that we didn't even flag for them, but HUD went came back later, and there are above ground storage tanks, which are blast risks, and they will not fund property that is within these.

And and if you look at the map, they are all over Frederick.

I don't know how anything gets built, but they are, you know, these huge above-ground storage tanks with flammable materials, and they consider them a blast risk.

There are ways to remediate that with blast walls or you know, orienting the building in certain ways without like balconies in some spots, and so we worked with them and we mitigated all of those concerns.

So, generally speaking, now we have worked with HUD, we've worked with engineers, we've worked with environmentalists and have checked all the boxes and solved the concerns that were there for the previous community in a way where we can build a safe community over in East Frederick, which is what we would like.

We don't want to have that whole community lost because it's on limestone.

These same techniques were used for Hamilton Station, which was built just across the street, and it's being used in other developments.

I don't know if brickwork works will use it if they're where the line is, but any new development over there is probably gonna need to consider this.

Um here are some images of the proposed vision.

We're changing the density from 88 to 221 units.

Um it'll be four-story buildings with balconies, big windows, high ceilings.

Um we've redesigned the street grids, we've got a diverse bedroom mix and income levels, which I'll show you later in the presentation, and are committed to the design of this property.

So our goal was not to just drop a building there.

Our goal was to drop a community opportunity there.

And so it's an art-themed community.

There'll be art on the outsides of the buildings, there'll be art inside, there'll be color, there's pocket parks.

You can see here that there's two long buildings, and there's something in between we call the arts walk, where it's just plants and art and sitting areas just for community to exist.

We hit all the parking on the outside, we have underground parking and created a boulevard feel with treats and plantings, and we're really excited about the design of this community.

This is a breakdown, one, two, three bedrooms, a total of 21 units.

You can kind of see an aerial shot there of the arts walk of the different paths and everything.

Um there'll be a fitness center, a community room, there's gonna be room for art programming where we're gonna be bringing in our community partners to teach art to folks in the community.

I'm really I have all of these ideas, and we'll see what happens when the community is there, but this art walk seems to have a lot of potential for Saturday festival with people who live there to come and bring their art out and people to wander around.

It just feels like there's a real opportunity to connect the community, not just this new community, which we're calling by the way, mosaic, which represents all the pieces coming together.

So when you you won't hear Lucas Village as much anymore, you'll start to hear us refer to it as mosaic, which we're still getting used to, but we're really excited about.

And then inside, we're gonna have washers and dryers, and um there'll be a little arcade, and we're just we're really dog wash, a dog park, a playground.

We're just trying to really create a lot of opportunities.

Here's some pictures of what the inside will look like.

That's the art room where we're gonna have.

We tried to design it in a way where it can get messy.

We expect it to get messy and are excited about that.

But we have a fitness room as well as you'll see a bunch of outdoor parks and things like that.

Um we are really excited about this theme and excited about East Frederick.

I think this is what East where East Frederick is headed, this idea of industrial residential mixed together into a funky art community.

This is walkable to Carrol Creek, it's right along the creek, so it's uh I think an anchor, and I think it's really cool to have this community, like these people who have historically been underserved, undervalued, given what was probably once the worst land, and isn't they're now going to be in one of the best spots, anchoring what is going to be like a really cool new vibe for East Frederick.

Um I was on East Frederick Rising for a long time, and really kind of caught the spirit of what they're trying to do.

And I I don't know what they're doing now, it's been years since I've been part of it, but I I'm excited for this to be part of it.

Um this is the development timeline.

I'm gonna try to give you an idea.

Um when I was talking to Peter, he said he wanted to understand kind of development start to finish, like an example, and so this is the beginning of explaining that.

It could I could talk for hours about this.

I'm gonna try to keep it to like two or three minutes so that I don't go over time.

Not even sure how long I've been going here, but um, you can see where number one is the Litech application is prepared and filed.

We call it LITECEC.

You probably know it's an abbreviation for low-income housing tax credit or affordable housing.

It took us two years to prepare the application.

So, from a developer's perspective, you should know that just submitting the application takes years of time, meetings.

There's a lot, there's a lot that has to be done just to submit the application.

We're usually, we've usually spent at least six figures on architect, on engineering.

We don't have fully fleshed out plans, but what we have to do is see if the deal will work.

So we start by how we refer to it, trying to kill the deal.

We look at everything.

The first question we ask is what's the APFO?

Are the schools at capacity?

Are the roads or the water?

Where are we at with that?

And then we'll ask about the zoning and how much can we get enough parking in there for the number of units that we want, and and you know, are we gonna be able to get the massing that we need?

Can we put four stories there?

Are we gonna be limited to two?

What obstacles might we encounter?

Because once you submit the application, you really don't go before the city for some like we have something this week coming before the city that is a requirement for this project to continue, and we're five years and millions of dollars into it.

And we're still coming to the city saying, okay, here we are in the development, we need this, and we don't know.

We don't know what's gonna happen.

So it's all at risk, all the way up to closing, all of the time and all of the money that we spend is at risk.

So we do spend a lot of time in the application phase trying to kill it, trying to trying to to get every obstacle out of the way.

And if we are successful and we still have a deal, then we submit the application, and then if we are approved, at that point, we begin our design meetings with the architect, with the engineers.

Later, we bring in the general contractor, and we work on the design.

By the time we get to our financing coordination, which is where we're at now in Mosaic, we're in the approvals phase.

We're at the very end of stage four.

We have spent multi-millions of dollars on this.

All of the architects want to be paid as they do their work for years.

The engineers the same way, our permit fees, some of those have to be paid up front, things like that.

We we we front it, and that's where the guarantor is.

That's where the housing authority has a lot of restricted HUD funds.

We're not really set up to guarantee a project for two or three million dollars and hope that it goes to closing.

Um that's why we partner with folks who are.

Uh, but we still are very cautious about it because during this process, and the Madison on North Markets is a good example of this.

We worked on that project for five years, and it just went to groundbreaking last month, and there were multiple times where you you get all of this in line.

The applications are binders like this, the budget, the details, the and the general contractor is giving us costs on goods, and we're guessing on the interest rate, we're guessing, and they can only hold their costs for so long.

And so if there's a delay, it's back to the drawing board.

We have to reprice everything, which takes a couple of months, and now we have a funding gap, so we need to find more money.

And so every delay ends up, you know.

I think we calculated the delays with the Madison on North Market ended up costing more than two million dollars.

Um, which is which is difficult to swallow.

So whatever can be done, especially with affordable housing, but any kind of development to keep the process moving, it's critical because the higher the risk is here, the less likely developers are going to be to participate in it.

Um, just just to ask, because we just talked about can you share with us what caused the delays on medicine?

Um it was a combination of things.

Some of the delays were caused by the funding gap that was created when the interest rate went up.

Um some of it was a funding gap when the cost of goods went up.

Some of it was delays with the process with the state.

Some of it was, you know, if each each and each time there was a delay, recovering from the delay, it's not just like waiting a month, like how do we find an extra million dollars?

Like with Madison, we had applied for and received the 9% competitive LITEC funds.

By the time the interest rate and the economy adjusted, we submitted a totally different application.

We turned it into a twin.

Then we submitted another application to turn it into 4% each time, just playing with the numbers, trying to make it work, trying to make it work.

And every time we did that, it took more time.

And every time we did that, it had to go through different approval processes at all different stages.

Um the but I will say as a side note, the city of Frederick gave money to the Madison on North Market, gave us $800,000 to be able to purchase the land.

One of the things that we do sometimes is when we have the land is an upfront cost, and eight hundred thousand dollars is a lot to carry.

That's money that's that it costs money to put money out like that.

The city giving us that money and allowing to purchase the land allowed us to keep the deal alive.

If we had had to say to the owner of the land, okay, well, we have another six-month delay, and then we have another six-month delay, and eventually the owner of the land would have wanted to sell to somebody else.

And so the that contribution up front made a huge difference in keeping that deal alive.

It's very difficult to find what we call pre-development money, which is that money that is spent up front, and in some ways is at risk because you know, if you don't go to closing, you've bought that land, now you need to sell it and get your money back.

But but it it is one of the main reasons that that deal stayed alive and went to closing last month.

So that was just as a side note, extremely helpful.

Umce you get to financing, once you get so the for example, we had a meeting today, we're about 10 days away from submitting our final financing package.

It took eight weeks just to get the financing package finalized and together with all of the work we've been doing for the last few months.

Now we'll wait for the underwriters, and eventually we'll go to close this fall.

Once you go to close, everybody gets paid the rest of their money, everybody takes a nice deep breath.

We got funded all these years of work, all this money, it's good.

We get reimbursed for our pre-development expenses that that qualify, and we keep going until construction is complete.

Mosaic is expected to complete construction February of 2028.

I say that with the moving target underline for all things development that changes all the time.

Uh, we had another delay this this week that's probably gonna bump us a little bit in that timeline.

But we're just doing our best.

Everybody's motivated to get it done.

So um ultimately we'll start leasing up in spring of 2028, 221 new units will phase them.

So part of it will begin leasing while the other part is still finishing up construction, which is an efficient way to lease it up, and um that's the development timeline for mosaic.

Um I know that was a mouthful, I went really fast, and I'm just like I'm just the fire hose, and you all are just trying to take a little drink.

But uh, do you have any questions about that before I keep going?

Yeah, go ahead.

So you kind of explained uh how we can help with with the example of the land purchase.

Are there other ways the city can make this process smoother?

Because I know we've been talking a lot about housing and affordable housing and getting more units online, and uh, you know, private development has has a different system and different concerns.

Uh are there ways that the city can smooth it?

I have a slide just for that.

So that's a really great question.

You are right in sync.

So um I think it's two two or three slides away.

So here's an example of the funding structure of mosaic, and this is important.

You can see there are what nine different sources of funding for an 84 million dollar development.

Um, and the moment the interest rate bumps half a point, we have a funding gap, and now we have another problem to solve.

And where do we get another million dollars?

You know, it's it's amazing how stressful it gets near the end when we have all of our numbers locked in and and and things like that.

But you know, the city and county gave two million dollars to Mosaic.

The city gave a million dollars in pre-development money, which again was critical.

It has been it has helped us pay for the architect, it helped us pay for some of the other upfront costs, it's what's kept this going, and it's made a huge difference to have that in advance.

The county's giving money, and then the waived impact fees are about 1.2 million.

So if you do the math on that, it's leveraging about 20 dollars for every dollar that's contributed because these deals, if you look at the funding, they don't work without even the smallest contributions on there are critical to get to closing.

It's just critical.

And the state expects that as well as the LITEC and VEC equity investors, they expect to see local contributions.

It just shows them that they can be more confident that this deal is coming together versus worrying about it falling apart at the end because the support's not there.

So very helpful.

Other ways to support.

So this answers your questions, um, Sarah.

So, and this is again gonna get into the weeds a little bit.

I'll try to keep it simple, but there is a formula that is used in the affordable housing funding that we uh there and there are certain costs that qualifies towards a basis.

And the the basis, the higher the basis, the more tax credit subsidy we get.

So if fees are waived, fees qualify as basis.

So if we have 1.2 million dollars of fees that we pay, we get a basis boost, as we call it.

We get additional tax credits back.

So if the city wanted to help by waiving fees, and a more effective way to do that would be to give us a grant for the fees, because then we can pay the fees, we get the basis boost, and then you contribute with the grant to offset it, but it's a way of leveraging money.

And estate is good if we do this.

They understand that these are hoops that we jump through, so that's a small thing that doesn't cost the city any extra money, but that provides extra subsidy as a result.

Um school capacity planning is a big one.

I know that the city doesn't have as much influence as I'm sure you would all like to have over this, but it is the first question that we ask.

It is driving family affordable housing development in Frederick.

If the schools are at capacity, it's a non-starter.

It literally is the first question we ask every time.

There is land that that is available that would qualify for funding that would be great for affordable housing for families, and we have to turn it down because the school is at capacity.

We're told we can put senior units there, but to be honest, our senior units are leasing up a lot slower than we expected.

Senior affordable units will lease up eventually, but they don't have the drive that you would think they would.

If you think about all those baby boomers, you would think, oh, affordable senior housing, that's a slam dunk.

It's actually not.

And we've steered away from even a new, we've had opportunities for new senior developments and have just said, no, I I don't think it's worth the risk right now because if a property is meant to lease up in three months and you start paying the bill three months into it and it takes six or seven months to lease up, you start out with a deficit that takes years to recover from.

It's just a real difficult problem.

You don't want to take that risk.

So school capacity is a big one.

Um zoning flexibility for affordable housing sometimes, you know, some areas have created affordable housing overlays that allow for certain flexibility.

Um generally like density bonuses, things like that.

If there's a way that we can if if we have land and we're building a community and there's any flexibility that can be given at all, if we if we're short 10 parking spaces, we're stressing about it.

We're just like, I don't know.

I mean, are we gonna put all this work and they're gonna tell us no, we have to have the 10 parking spaces, and then the building doesn't work, and we've designed it, and it's gonna take us a month to get before them to ask, and we're thinking about that kind of stuff.

So any kind of unknown that we can know up front would be so so helpful in making decisions because there are times where you know, I hope there's not times like this, but I think there probably are times where we think this there's too many risks, we're not gonna try it, where maybe it was possible and we just didn't know and couldn't take the risk with the money and the time um to get there.

And then what you said, yeah.

Uh I just want to ask a question about the the parking spaces, for example.

Uh if you are at 30% AMI, uh owning a personal vehicle is an enormous expense.

And I understand that in in many parts of the county it's necessary to get to work and all of that.

Um we've talked a lot about this transit-oriented development and trying to make sure that that we have alternatives for people who either don't want to, can't drive, or can't afford to drive.

So I imagine in some of these um developments that maybe those extra 10 parking spaces are not necessary.

And and is there I imagine I mean uh the new mosaic is in a walkable and transit-oriented place, so that's not a concern as much as some other places, but is that built in that sort of transportation options?

It doesn't affect our required parking amount, but it should.

That's creative thinking, and I think there probably are studies that could be done on 60% AMI or lower, which is what Litech is, is 60% or lower.

And are there, you know, compared to are there only 80% of those households that own vehicles, or maybe they're not as likely to own multiple vehicles or whatever it is, and maybe there's some flexibility because you know our main office is in a public housing community.

And when I drive through during the day, it's mostly our cars that are parked there.

And when I go through on the weekend, there's a lot of empty parking spots.

There are a lot of people who take Ubers or who walk or who just don't have, and we are required to have that parking, but maybe some flexibility could be given there.

That's a creative way of thinking about it.

So, you know, just knowing that all of this is on the line, and if affordable housing is a priority, then these kinds of little bits of flexibility or um an opportunity to communicate in advance and get kind of like a general thumbs up, you can move forward on this would make a big difference in keeping that moving.

Um of the things that the state of Maryland just did is they have a new what they call an ombudsman, and it's a contact person at the state of Maryland who sol who guides and solves problems for affordable housing developers.

So if you're new and you don't understand, or if you have a problem, you can go to this person and he's well connected and he's he's knowledgeable about the process and he will guide you through the process.

And if you have a problem, like for example, a developer um two weeks ago was talking to this ombudsman, I was there, and he said we had a problem.

We had a we had a small repair on an elevator, we were ready to go, and this small repair had to be done.

We did the repair, we were ready to go, and it took us four months to get an elevator inspector, because the state of Maryland only has four.

And he said, is that a problem you could help us solve?

And the ombudsman said, Yeah, I can make some calls.

So it's things like that where you know, from a city perspective, if we had somebody, even city-county together, somebody who served that role as ombudsman who could walk someone through the process, who could guide who could help solve problems, give Potomac Edison a call if there's a really big delay, which we had with Foundry Square, we were delayed leasing up for three months.

We just sat there waiting.

Um and so, you know, things like that can be solved, you know, in in in creative ways like that.

So I guess I would say um aside from this, the only other thing that I would say is with regard to funding.

I know that we're um that the housing has a task force right now that is considering the new housing needs assessment.

Um we're on a subcommittee that is talking about funding, the funding that's coming in, how can we make it a steady stream for the parts that aren't city, how can we spend it?

Um I would say it would be very helpful to have a process to have an objective way to say if we do X, Y, and Z, then we know that we can get this much money for this many units.

Something like that that is that is fair, that's easy to understand, that has a process where we put in our application, kind of like with the state of Maryland and Litech.

Like we know, like we can pencil out the deal before we even have a conversation with the state of Maryland.

We can do something very similar with the county, not exactly, but similar.

So, you know, if the if the city of Frederick would like to support and there's an X, Y, and Z box that we could do to get a fee waiver, we'd be all over that.

We'd submit the application.

You could provide the grant for the fee waiver, we get the basis boost, everybody's helping and and happy and and we're clear on it.

So what the application is and and how where your priorities are, I mean, that's something where on the application you could say, are the are the units below the price below the voucher payment threshold?

That could be a criteria in order to receive funding.

We received funding as did other developments.

Ours is the only one that was below the voucher threshold.

And and yet we have more affordable housing in Frederick because of it, but it would have that that would have been nice to I think that that's a tool that that the City of Frederick has to implement the things that are a priority to you.

People are willing to jump through hoops for that.

Um I would say that as well about um I know that we have this payment in lieu of taxes and and we have you know an affordable housing requirement for market rate, and I would love to see uh I would love to see the units actually being built.

I would love to see the units actually being built.

And if not, again, the question could be well, can you price some below the voucher payment threshold?

And at least you've checked a box there and there's they're a little more affordable than they would have been.

I could just keep going.

I'm gonna stop now.

Do you all have any questions for me?

So just to make sure I heard you right, you you would suggest if if all things being equal that we say, nope, you cannot pay a fee in lieu, you must build those twelve and a half percent MPDU units.

Well yeah, I would say that.

I mean, and I say that, and the reason that I hesitate is that I know we're doing good things with that pill money, and I hesitate to say anything that takes from those programs because I do believe in those programs, and I've and and our tenants use those programs.

So I'm not saying anything against that, but I'm just saying that I believe that and and HUD is leaning in this direction too by focusing more on vouchers than on public housing.

But I believe that a truly income diversified community is the best community.

I don't think concentrating any kind of income is is the best community.

But that's just that's my take.

But that's kind of what HUD is doing.

Like HUD is getting out of public housing.

They're steering away from it.

They're not building more, they're investing in their voucher program because someone can take their voucher and rent anywhere below the voucher payment threshold.

So now you've got somebody who's 30% AMI living in a building with 60 and 70 percent AMI, and they blend right in.

And everybody's in one community versus here's where all of the folks who are living in poverty live.

Here's where all of the folks who have all the money live.

That's you know, that doesn't make sense to me.

What are you thinking, Derek?

No, uh I think there's some relevance to that.

I think in terms of talking about criteria, but if you're in a development of 700,000.

Yeah.

It's harder.

It's hard.

That's what I'm saying.

So I don't I don't know if it should be blanketed I don't know because you know, if you're thinking about like I'm talking about rental units.

So that's what I'm saying.

That's why I said there's there's a difference in terms of what we're talking about specifically.

That's why I said if you just make it the policy a blanket possible that you got to build the units, does that necessarily meet the other thing?

So there's another way to do that.

So I think the housing authority might be the only developer in history to have actually built the affordable units in a community with units for sale.

And we did that over at North Point.

And the way that we did it is we built all the units the same, like they weren't identical, but there was no like this one's all decked out, and this one has no feature.

They were all granite countertops, big windows, high ceilings, wood floors.

They were beautiful units.

And then what we did is we provided what we called a silent second mortgage to reduce the amount of the mortgage.

And then instead of paying, you know, a thousand dollars a month, they were paying maybe five hundred a month, and we had provided uh a hundred thousand dollars, or I'm using round numbers, but you get the idea, and then if they sell the property, that money comes back, not without interest, but it comes back and we use it to fund more and they keep the equity and it's uh you know uh another way to allow affordability in a community like that.

You you do that.

Yeah, the housing through that.

That's what I'm saying.

Yeah, not every now we have to apply that to every barometer measure.

I'm excellent at the same time.

No, I agree.

The housing authority is unique.

I'm just like I'm suggesting it like we found a solution.

Yes.

Like the money, you find the solution, and it you know Frederick.

I I Frederick is exploding in growth right now.

Like for a developer to walk away from developing in Frederick, I know we don't we want the growth and we want that we don't want all that, but it's it's a prime spot.

It's gonna keep growing.

And you know, I don't I don't want to push it to the point where developers don't come, but I don't think we've pushed it as far as we can push it to create affordability.

So there's probably a middle place there somewhere.

And then that to your our conversation around the AMI, one of the things, of course, you you well know is the data metric.

One of the things we're trying to do is we don't we have not accumulated or acquired enough data because the conversations have been around uh establishing our OAMI because uh OMI, AMI, particularly because we're in this metropolitan region, which of course, if you go just 20 more miles, then the income level is vastly different.

And so one of the things we've been looking at is gathering data so we can establish our own AMI criteria.

So we're in a healthy balance to where we are as opposed to being using this overall region.

So that's kind of what um United Way did with Alice, because we had the federal poverty level, which was the same in the little town of Idaho where I'm from and New York City, same federal poverty level.

There's just no way that it's the same.

And so Alice did that just for Frederick County.

This is our Alice threshold, as they call it.

And this is survival, and this is you know and and that's that's great.

If we could do that for AMI as well, it makes sense.

It makes sense.

And I guess within the question for the housing authority would be since you have also federal standards, would that would that impact you at all?

Or would that be beneficial?

I mean I know it would be beneficial, but you also have some federal standards that you have to meet.

So I think that HUD would still decide what our voucher threshold is.

Now they're so they're they're supposed to be considering the actual rents and things like that.

But because again, we're in this region, I feel like it's more than just the City of Frederick can solve, it's a conversation with the federal government, it's a conversation at the state level, like these area median incomes are affecting us.

And and it it may not, I don't know when the last time these boundaries were considered, and I don't know how they make those decisions, but it would be worth advocating for something like what you're suggesting, something more specific for our community.

And I appreciate your comment suggestion regard regarding from a policy mechanism about just from a clarity standpoint in terms of when applying for money, what that utilization could be for and what that criteria is.

I think we've had various conversations with our housing department about streamlining our process one from an efficiency standpoint, from a clarity standpoint, so everyone is clear.

Yeah.

Instead of well, can I possibly use this for this?

Can I possibly what is this possibly mean?

But it's it's clear in terms of the check marks such as you mentioned, and particularly from an efficiency standpoint, because as we well know, you mentioned, particularly when it comes to these projects, time is money.

And you don't and others don't have the capacity to wait.

Some developers can have the capacity to wait.

As a clock ticks for you, and for others who do this kind of work, that now increases your bottom line.

Yeah.

And now just a small sector of a time holdup to now millions of dollars or million dollars, which is pretty, you know, pretty um devastating in some cases for the work that you do.

And if you if you're giving 800,000 to development that has a two and a half million dollar consequence to delay, you're subsidizing the delay.

You don't want to do that.

The state doesn't want to do that, nobody does.

So you're right.

I appreciate I appreciate your consideration of that.

The city, I I it's a lot to expect the city staff to understand development or to expect any of you to understand development.

It's taken years to even begin to grasp it for me.

It's so nuanced.

So it is it is a lot, but the the efforts that you are making, I think are making a difference.

I hope that that that has been seen here as well.

And I just wanted to say I think I've said it, but we really do appreciate the support, particularly with these two deals that are closing this year.

Uh it's gonna be, you know, a total of 281 new units that come on.

And the city contributed 1.8 million dollars to that and was part of the reason that those developments came, it's specifically because you gave pre-development funds, which was critical to what we needed to have done.

So we really appreciate that.

Appreciate the partnership with the city.

I know that we're two separate organizations and people always think we're part of the city because we have City of Frederick in our name, and we would be proud to be part of the city.

And I think another part of that, I think for us as we talk about particularly as we have emphasized housing and looking at these various mechanisms is so important for us also we have to make the necessary investments from a personnel standpoint.

As we start talking about streamlining processes as we start talking about efficiency as we start talking about how much are we going to invest in this, it's going to be important that we have the personnel.

You look at some of the entities, some of the very certain I know we're not Charlotte.

I know we're not Tallyhassi, I know we're not these these other areas to some degree we are.

They have housing departments where they have 15 20 persons because from a fishing standpoint, as we said time is money, but it's also the criteria is clear.

We're operating right now out of bare bones.

So we're also asking for, we must also put some investment within a personnel construct to ensure that what the demand in the community is asking for, we're able to meet that demand.

Yeah.

Yeah, that's right.

And and partner where you can.

I will say, you know, uh the city and the county I know partner together really well in a lot of areas, and housing is something where that is just ripe for a partnership because they have uh they have a housing department working with their DLP program, people who understand operating budgets and understand development in a way that could be very complementary to city staff where maybe you don't need a full-time person that understands everything because what are they gonna do full-time?

Is there enough?

Maybe there is, but um, there's opportunities there, but you know, it is a lot to learn and uh and a lot to get creative with the resources that we have.

We do it every day.

I know exactly what you're talking about.

First of all, I want to applaud you for creating not just boxes for people to live in, but real communities, and I can't wait to see this, and I can't wait to see it develop.

Uh it I think too often we silo art to those who can afford it, it's a luxury good, but it's not.

It's as you've demonstrated, you know, it's it's such a key part of of community building, and I imagine the kids who live there will be really impacted by their environment.

And uh, you know, we all know the the broken window theory that when things start to break, people start caring less about their neighborhood.

And so the opposite is also true.

Is you know, I uh work in an art center on Fifth Street, and many, many years ago, Fifth Street was a less desirable place to be in Frederick.

And uh now it's pretty cool, you know, and lots of new businesses are coming, and uh, you know, there's a certain vibrancy, and I don't think the artists are gonna take all the credit for it, but it's it certainly changed the landscape of the neighborhood.

So I just want to applaud you for that.

And uh I love this idea of an umbudsperson, which is uh to help streamline that and whatever we can do, you know.

I know that all of us up here are really excited about making sure that people can stay here in Frederick if they choose to.

Uh I don't know if I had any other questions.

Um I think we should definitely look into either waiving parking spaces or doing some sort of, you know, if there is transit lines or near the the um train or um having bike bicycle infrastructure.

And I don't just mean a short lane, I mean like real infrastructure, covered bike racks, maybe even uh you know, some access to electric bikes.

I know we had talked about dock list, but there are docked also uh to provide people different opportunities for um getting to work and school and around town.

Yeah.

So and are there so in in the mosaic area, is there any food sources nearby, or are we hoping on brickworks or what where are people gonna grocery shop up there?

Yeah, I mean the nearest I think is there's Walmart over Costco, Walmart, and if you go that way, or you go to the north into town, you can go over to 7th Street, but it is kind of a food desert.

Um I don't know what the official criteria is for a food desert, but I wouldn't I don't I can't think of a place that's walkable that's a grocery store.

So um I don't I don't know what the long-term plans are with brickworks.

I don't know all of the nuance there, but if there's commercial space there, that's that's really exciting if there could be a grocery store, or if we just had you know, I don't know, grocery store routes or something like that where people could, you know, uh just do a quick trip at certain times of the day, or I I don't know what the solutions to that are, but you know, the state of Maryland actually requires that we are within a certain vicinity of a bus stop to get LITEC.

So, you know, when you're thinking about your requirements for the city, you should consider what the state's requirements already are for Litech.

And then you don't you don't have to have those as well.

You can just tack on what your priorities are.

You you know, because the city doesn't have the state of Maryland doesn't have a priority for voucher threshold rents.

Um the state of Maryland doesn't have a priority about adjusting parking or allowing for more density or you know, working with uh school capacity or anything like that.

So you have a lot of flexibility when it comes to that.

And you can again go back to being a complementary partner with the state.

Just a couple uh am I correct in understanding that based upon your market intelligence that we ought to be building family housing?

That's that's where the need is right now.

Is that correct?

Yeah, I mean, I we did market studies for seniors and the market studies said that the demand would be there, and we did ultimately lease up our senior building, but it took twice as long as we thought it would, and it was a difficult start to lease up enough that it's a deterrent for us right now.

And when you build family units, seniors can live there as well.

Everyone can live in the family units.

So, you know, and they lease up like that.

I mean, we have a waiting list immediately, they lease up very quickly, you know.

Um but you I mean you have to you have to have you have to price it affordably if you're you know, but yeah.

And and then we've also been or I've been told that the key income area that we need to focus on is 30 percent of AMI based upon your knowledge and experience, is that is that the m the most important need right now?

Well that's a very interesting question.

You know uh uh uh a year or two ago we used to have meetings with the city staff and it they were monthly, and we had reach just reached a point where we were I I saw a website of another city that had a housing continuum.

And so this would go back to your question where they had you know 20 percent AMI, 30, 40, 50, all the way up to market rate.

And in each column they had a list of the demands that they had in their community for that AMI as well as the the communities that served that AMI.

And with this with this study or this graph, it was really easy to see the demand is really high here, the resources are very low, this is where we put our money.

I wouldn't know for sure what that is for Frederick without doing a more in-depth study.

All I can say is that when we open a 60 percent AMI community, we have a an immediate wait list for it.

Our 30 percent AMI list or our our housing authority wait list has been closed for two years.

We still have more than 4,000 names on it.

We only have 152 public housing units and about a thousand vouchers.

And our wait list, we will never get to the bottom of that wait list.

So the need is great, period.

But I would I would say that, and this is really important.

The lower you go on the AMI, the more tenant support you need to have a successful experience there because you're not doing anybody any services, giving them a place to live, and then giving them an eviction that shows up when they try to find housing the next time.

So the lower you get, the more services that tend to be required.

Everything from job support to child care to health care to mental health to substance, just the the gambit.

So it's important that that not be ignored, or you know, you you may not have the success you're hoping for.

Okay, and then the the last, and again, this is just ignorance on my part, but the the city helped fund the junction.

And that that is not a housing authority project, correct?

Correct.

So what what criteria was used, should we use, are we using to evaluate whether to fund housing authority projects as opposed to other projects?

I'm just not sure.

I don't know what the criteria was for that.

I just know that you know, around the time that the junction applied, and we I know the developers of the junction, we're not part of that, but it's Litech, just like the housing authority is Litech.

Um the the difference is it's just a different different developers.

And you know, they had however many units, I think 180 units, and they asked for the funds that they got, and and we got the funds that we got, and I don't know what the criteria was.

There wasn't at that time there was I don't there, yeah, I don't know what the criteria was.

It was um but it was it was helpful to both projects to get the funding, which was good.

And having specific criteria would have been helpful because you know, the number of units, the affordability, like if you go back through and you compare it now, you know, uh you're you're funding affordable housing no matter what, but it makes a difference.

Um, what the criteria is if you have it.

Great.

All right.

Well, thank you.

Any other questions, council members?

Oh, yeah.

Go ahead.

No.

How do folks access your services?

Because we've heard from a lot of different organizations who serve kind of slightly different populations.

But if you were to find yourself in one of those situations, uh it it seems kind of overwhelming.

Like who do you call?

Is there one spot and they'll direct you in a different direction, or do people apply directly to you?

How are people finding out or navigating this system?

Which sounds pretty challenging.

It is challenging.

It's really challenging for folks who are in survival and and you know, already have a lot on their plate to navigate it.

Um it depends upon which services you're talking about.

If you're talking about public housing, we're the direct contact for that, and they apply with us when our waiting list is open.

Um it it's a lot to maintain our waiting list every year.

We have to send out letters to everybody, we have to keep everybody's addresses updated.

We don't want a waiting list of 50,000 people.

It's just not, it's not conducive or helpful to anybody.

So our waiting list is closed right now because we have we have a full waiting list.

It's the same for vouchers.

They would need to get on our waiting list for a voucher.

Um if they're looking for tenant services, some of the tenant services we have, we can connect people to in the in the community and they could call us whether they're a housing authority resident or not, and we would help them.

They would probably be just as well served calling 211.

They know all of that just as we do.

Um some of our grants are restricted.

This is a grant because we want to help folks that are extremely low income.

So you are only allowed to use this grant for extremely low income.

So people can't just walk in off the street and get this tenant services.

If you're talking about our Litech properties, if they wanted to move to Foundry Square or to the new mosaic, or they would contact the property manager, and they would get on that waiting list if there is one.

If there's a vacancy, they could apply through there.

So it it's a big question to me.

I'm sorry, I went like eight different directions.

Which service, but but but we're here, we have our main office, and people can call.

Um, but generally speaking, we are working with the tenants that we have right now until we get more funding from HUD to get more vouchers, or until we, you know, get the waiting list lower.

Uh, there's absolutely not enough housing for the most for the lowest of incomes.

There's just not.

And and then there's not there's not enough services to go with it because they need a a lot of supportive services to maintain and to grow out of it.

Right.

Well, thank you again for sharing your time and your knowledge with us.

This has been most helpful for me.

I think from the questions for for all of us.

So thank you again for your time.

Thank you for inviting me.

I appreciate it.

I'm happy to come anytime, and I'm always available.

If you have a question, just give me a call.

Great, thank you.

Uh it is not on our agenda, but if there's public comment, we can certainly take public comment.

All right.

Well, we're adjourned then.

Thank you.

Thank you.