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Alphabet Soup

Since being on the board of RAAH I’ve found myself in a few discussions where I’ve heard folks talking about Mishda, the Hearth Act, C of C ’s and Seebeedgiebies

No one at RAAH has made me, the newbie, feel embarrassed about having to ask what they were talking about, but in the unlikely event there’s a cocktail party where I can impress people with my knowledge of the housing and social service buzzwords, I have been building up this list of acronyms and names. (Started writing this blog entry a couple years ago so I'm not such a newbie anymore)

Explaining what the letters stand for explains quite a bit about the infrastructure of the affordable housing world. Unlike the picture I once had of charitable organizations channeling individual donors’ contributions in order to provide needy people with shelter, the scenario of the contemporary efforts to keep people housed contains players of all sizes, from local congregations up to the IRS. Their motivations may be as simple as the compassionate hearts of people who appreciate their own fortune, or as complex as the spreadsheets of the non-profit syndicators, who make a business of selling the tax credits that accrue to providers of affordable housing.

Here are a few of these letter strings explained:

HEARTH Act: This is the Grand Poobah of all the governmental assistance protocols or bureaucracies or administrative hierarchies. The act was signed into law in 2009 as a revision of the act that preceded it, the McKinney –Vento Act. Under the HEARTH act HUD (I’m pretty sure that even if you’re obsessed with old Paul Newman films you know that HUD is the US federal Department of Housing and Urban Development and not the amoral detective Newman played) is regulated in the way it funds programs such as C of C grants and LIHTC’s. Some of the tools it uses, such as HMIS and PIT data, will be discussed below. Oh, by the way, Hearth stands for Homeless Emergency Assistance and Rapid Transition to Housing.

MSHDA; Among its other responsibilities the Michigan State Housing Development Authority provides funding for many local initiatives to aid the homeless. If you think the organizations and landlords who collect funds for providing housing for low-income tenants have an easy job, check out this list of documents from the MSHDA site:

C of C is not a Jesuit High School, but Continuum of Care, the program of competitively awarded HUD grants. The candidates vying for these funds are non-profits like Avalon Housing or State and local agencies. Once a year HUD announces these contests with NOFA’s, Notices of Funding Availability. The restrictions on funding and the description of the types of programs HUD is hoping to see are as complex as one would expect from a Federal Agency. (One wonders whether critics who decry government corruption and bad-mouth the “special interests” who populate the social services bureaucracy can recognize that all the administrative controls necessary to ensure against fraud and abuse require the employment of yet more administrators and verifiers.) The parameters of the program may seem a bit nit-picky, including such things as a definition of homelessness.

LIHTC’s The Low Income Housing Tax Credit program was established by Congress, according to the HUD website, “to provide the private market with an incentive to invest in affordable rental housing.“ Tax credits are issued by the Federal government, but administered by the states according to federal rules. Developers of low-income housing can sell the credits, which are good for 10 years, to other parties in order to lower the debt on their projects. HUD lays out stringent requirement for the types of projects eligible for such credits. The requirements cover details such as rent levels, ownership duration and a 30-year commitment. The market for these tax credits involves complexities as tangled as the stock market and has brought into being the entities known as Low Income Housing Tax Credit Syndicators, who recruit groups of investors to pool their financing and share in the future tax relief.

“Of course, developers are interested in the highest possible price paid by investors, and the lowest possible syndication costs. Similarly, investors are interested in paying the lowest possible price, at the lowest possible level of risk. Syndicators are interested in earning high fees, and potentially future business with the developer and investors. To-be-developed properties are not easy to evaluate. These factors mean that the market for housing tax credits is as complicated and sophisticated as the market for stocks and bonds. It is also quite competitive.” (From the HUD web site)

I appreciate the help of Wendy Carty-Saxon of Avalon Housing, who helped explain some of the basic funding structures in the Escheresque affordable housing edifice.

In order to avoid Acronym Exhaustion this exploration will be continued in a later post

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