State comes through for local housing development

Thirty-two lots in developer Greg Matlock’s Strasbourg Estates, a 52-acre, 191-lot subdivision at farm roads 140 and 123 just west of the Springfield city limits, were purchased by Affordable Homes Development Inc. to build single-family rental properties for low-income families.

After turning down Affordable Homes Development’s request for $4.5 million in government funding last year, the Missouri Housing Development Commission announced in mid-February that those 32 homes have been approved for more than $4.5 million in government funding. The offer includes $2.46 million in low-interest, tax-exempt bonds and $1.7 million in federal and state low-income housing tax credits.

“Without that layer of grant funding, we wouldn’t have been able to make this package work,” said Affordable Homes Development President Marie Carmichael, adding that she was grateful for the work of the Greene County Commission in backing the project.

That’s in stark contrast to her feelings in December, when Carmichael told Springfield Business Journal that she was “extremely disappointed and quite surprised” by the commission’s selections. Hopes were high last year, considering her company’s previous history – Affordable Homes has received funding for seven MHDC projects on its own and nine others as partner with Southern Missouri Development.

One key aspect to the approval was the local voice on the commission – businessmen Rob Fulp and Loren Cook II.

“We were always very supportive of this project,” said Fulp, president of The Signature Bank. “There’s no question that there’s a need for affordable housing in Springfield and southwest Missouri, and there will be a focus going forward to ensure that the area will get the attention that it deserves.”

MHDC spokesman David Bryan said that the commission always felt the development was appropriate for assistance, but the tax-exempt bond process was more appropriate for that particular project.

“With the number of entries that we have, it’s very difficult to get everybody that we want to fund under the same umbrella,” Bryan said. “We had in mind when we were awarding the tax credits in December that this would be a project that could use a different source of funding. Using the different types of funding allows us to reach more areas than we could with the competitive process.”

Those additional sources of funding are necessary because the demand for government funds far outstrips the supply.

In December, when MHDC announced funding for 37 projects through the Fund Balance loan program, only $6 million was available; fund requests totaled more than $21 million. Federal and state tax credits didn’t fare much better – $21.4 million in funding was available to meet $73 million in demand.

The lack of available money is compounded by the fact that currently less than 40 percent of tax credit money, which is taxpayer money, ends up being used for actual development – the rest is lost to middlemen and government structural issues.

That waste may be uncovered during an upcoming cost-benefit analysis by the state auditor.

Joe Martin, director of administration for the auditor’s office, said the MHDC audit is standard procedure; audits of state tax programs are usually conducted every other year.

He said the audit should begin in April and take six to eight months to complete.

‘Government housing’

Both the MHDC and Affordable Homes Development are trying to shed the “government housing” tag often given to their projects.

“One of the mottos that we use when we make decisions on affordable housing is that we don’t want to finance or build anything that our moms wouldn’t live in,” Bryan said.

Carmichael added, “We want them to blend in with the other homes in the community, and ultimately we hope people will buy them at the end of the term,” she said.

Matlock, who is developing the property for Strasbourg Estates LLC, said he’s not worried about having subsidized housing in his development.

“When you say MHDC housing, the first thing people think is low-income – almost shacks,” he said. “But we’re happy to have them in our development because the product that they build really complements the neighborhood. They’re all brick with nice pitched roofs. Typically when you drive through a neighborhood where their homes are at, their houses look better than the others.”

Want to learn about property management?

Missouri Housing Development Commission is holding the 2006 Property Management Conference April 25–26 at the Clarion Hotel in Springfield.

The conference is specifically designed for property managers specializing in state- and federally financed properties.

Conference topics will include maintenance tips, identifying and preventing drug abuse, compliance with state and federal guidelines, social service programs and how to integrate apartments into communities.

“We are offering property managers an opportunity to learn more about the rules and regulations governing these programs,” said Deb Giffin, MHDC asset management director. “The conference also provides an opportunity to discuss and share ideas with some of the top property managers in the state.”

The commission also will hand out the Property Manager of the Year awards for small and large developments.

Registration for the two-day event costs $200 and can be completed at MHDC’s Web site, www.mhdc.com.