Minutes 04-06-2021 Virtual Business Meeting

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19 Affordable Housing Collaborative would be useful, since any decisions would have to come back to the local governing boards for approval. Commissioner Dorosin asked if there are criteria for choosing mobile home parks to assist through programs like ROC USA. Mary O'Hara said every affiliate has targeted areas, but also review areas that come up for sale. She said the affiliates tend to target bigger areas and developments. She said investors look for areas where rents are lower, as there is a greater ability to increase rent. She said infrastructure funding and financing are critical, since some developments have maintenance issues. She said the public sector can also provide incentives to the community owners to sell to the residents, and some have used zoning to address alternative use issues. Commissioner McKee asked if this was exclusive to owner-occupied or renter-occupied homes. He asked if the increase in rents can be identified, as many residents are already living on little funds. Mary O'Hara said ROC typically looks for owner-occupied homes, as they are more suited for set up a resident cooperative. She said if more than 25% of the homes are rented, it is more difficult to be successful. She said she does not have an average amount of rent increases, and it depends greatly on what the market rents are, how far below market value the rents currently are. She said if an investor buys a property, the rents typically increase to market value as quickly as possible. She said residents have raised their rents anywhere from $5-$180 increase to purchase the community, and it really depends on the market. She said a $30-$40 increase is probably most typical. Commissioner McKee agreed with the idea of asking the HOME Collaborative to research the ideas further. Commissioner Greene asked Thomas Beckett to speak on limited equity cooperative housing and what it means over time. Thomas Beckett said limited equity housing is a term used to distinguish it from market rate housing. He said in cooperative housing residents own the asset. He said in New York City the model is market rate, and each resident owns a share in the cooperative, and the cooperative owns the building and they all share in maintaining the building. He said the pricing is comparable to market rates in the city, because the membership if a full equity ownership in the value of the underlying property. He said the limited equity housing came about in New York as well, due to many abandoned properties with squatters. She said the membership does not participate in the equity of the building, but rather in maintaining and governing it. He said ROC USA is a limited equity model, where the cooperative corporation is a non-profit, and there are no owners in the equity. He said members of a ROC pay a modest membership fee, and each receives a vote for the Board of Directors and major issues of the community. He said members are buying into a long-term stable rent situation, and the residents have the opportunity to turn any cash flow into a reinvestment into the community. He said the home is classified as a motor vehicle, which are generally considered depreciating assets. He said in a resident owned community, the rents are stabilized, and generally become a higher valued community, which creates equity. He said using a nonprofit as the vehicle takes the land off of the speculative market, and no longer allows an investor to come in and turn it into condos. Chair Price suggested, given the late hour that this topic be researched further by a committee. Commissioner Greene said she supports taking this to a committee for further research and discussion. She said this idea is so valuable, as this is a market driven situation. She said if a landlord wishes to sell, ROC USA begins the process. She said if this model is adopted, it does not create a lot of work for a committee, and the Affordable Housing Collaborative does not need to have its charge changed in order to cover.