COVER STORY

A Fight in Woodstock

AFFORDABLE HOUSING FINANCE • July 2008

BY DONNA KIMURA

Kevin O’Connor wants to build the most innovative affordable housing project in upstate New York. He has found a prime site, prepared extensive plans, and even won elusive financing for his deal, which would bring 53 units of needed housing to the famed town of Woodstock.

“We are looking forward to the day we build this project,” said O’Connor, executive director of the Rural Ulster Preservation Co. (RUPCO), a longtime nonprofit housing and community development agency in Ulster County, N.Y.

He has been working on his deal for four years and is still waiting to get the green light from local officials.

RUPCO’s proposal, like so many other affordable housing deals in the country, has been met with strong opposition from a group of vocal neighbors, who have raised environmental, safety, and other concerns about the project. The opponents have attended every public meeting, engaged in a letter-writing campaign, established a nonprofit organization, and created their own Web site to defeat the proposal.

Latest trends

Many developers and advocates say NIMBY (Not In My Back Yard) resistance is rising. A recent national survey found that overall opposition to local development was up 5 percent in 2007 from the year before. The backlash to multifamily housing deals increased even more last year. (See sidebar on page 26.)

“It’s a bare-knuckle fight out there between progress and protecting the status quo,” said NIMBY expert Patrick Slevin, former mayor of Safety Harbor, Fla., and CEO of The Slevin Group, a Tallahassee, Fla.- based public relations firm specializing in land-use issues.

The country has moved from “a NIMBY nation to a BANANA republic,” said Slevin, explaining that BANANA is an acronym for Build Absolutely Nothing Anywhere Near Anyone.

Homeowners and others have become much more effective in getting their voices heard today thanks to the prevalence of technology, he added. A laptop computer and a cell phone can mobilize hundreds of people in a short period of time.

The response can be even more intense when it’s affordable housing that is proposed.

“When people hear the words ‘affordable’ or—worse—‘low-income housing,’ all the fears and stereotypes come out,” said Chris Estes, executive director of the North Carolina Housing Coalition, a 20-year-old organization involved in advocacy and outreach. Regardless of what is being proposed and what similar developments look like, the image that neighborhood opponents conjure up is one of a large, high-rise, troubled public housing development.

Even though the design and quality of low-income housing tax credit (LIHTC) developments are as good as or better than market-rate communities, they still have to fight that stereotype, he said.

The NIMBY issue is coming up more and more as developers move out of the cities and into bedroom communities, where land is more affordable, added Estes. Those areas are often more hostile to development proposals because they don’t want growth that would change their community and they are often fearful of anything that might bring low- to moderate-income households in.

Lengthy battles are particularly damaging to affordable housing deals because critical financing programs that are often used have strict deadlines. RUPCO won a reservation of LIHTCs for Woodstock Commons about three years ago but had to give it back when the deal was not ready to move forward. The group will go through the process of applying for credits again.

“The problem with NIMBY groups has been that they effectively slow down the environmental review of projects, which can significantly raise the permitting costs for developers, which ultimately impacts the affordability for residents,” O’Connor said.

A few developers say that the climate is improving. “We have had municipalities come to us and ask us to put up housing,” said Karl Pnazek, president and CEO of CAP Services, Inc., a developer based in Stevens Point, Wis.

Fran Wagstaff, longtime president of the Mid-Peninsula Housing Coalition, a Northern California-based developer, agreed. “People have seen successful projects, and there’s been education about who needs affordable housing,” said Wagstaff, who is retiring in July. “It’s really had an impact in the [San Francisco] Bay Area.”

Woodstock battle continues

The Woodstock fight goes back to the spring of 2003, when RUPCO was invited by the town’s affordable housing committee to try to produce housing in the community of approximately 6,000.

There has been no new affordable housing built in town since the creation of a small seniors housing development in the 1980s.

RUPCO, which has developed and owns 277 units in the region, soon identified a 28-acre site in the hamlet as a potential site for a project. The group began working out an agreement with the property owner, designing plans, and applying for financing. The original concept called for 81 units of affordable housing for both seniors and families and a true community center that would house the town’s Meals on Wheels program, a soup kitchen, and a food bank. Ten of the housing units would be homeownership.

In addition, the $13.75 million Woodstock Commons project would use the latest environmentally friendly materials and building techniques, including geothermal heating, making it one of the greenest developments in the entire region.

After discussions, the community center that would be open to the town was removed and the number of units reduced to 63. In the latest plans, the project has been scaled back even further to 53 units, even though the zoning would allow for as many as 120 units. The homeownership units have been eliminated.

It is still the “most innovative affordable housing development ever proposed in upstate New York,” said O’Connor, citing its intergenerational mix, which would bring together families and seniors in the same complex, and its green building elements.

Overall, Woodstock Commons has received strong support in the community. O’Connor estimates that the proposal has generally received 2-to-1 support at meetings regarding the project.

A group of neighbors, however, have organized to raise their voices in opposition. One of the big concerns cited is the impact that the development will have on the wetlands that are located on the property.

“We are not opposed to affordable housing,” said Delores Lynch, one of the neighbors fighting the proposal. “It’s the location, the site. It’s not the best choice.”

A resident of Woodstock for 40 years, she said she wants to protect the site’s natural habitat and the town’s rural character. “You want to call me a NIMBY, OK,” she said. “But, that’s not a bad name. It means people who have good reason for wanting to protect the land.”

O’Connor said his proposal honors all the required buffers on the wetlands. He makes the case for Woodstock Commons by saying that the buildings are clustered on just seven of the 28 acres. The site is bordered by housing and commercial development on three sides and sits just behind a shopping center and the town’s main street. Water and sewer lines are easily accessible, and residents can walk to the hamlet.

There have been 55 single-family homes built in the town in the past two years, and O’Connor argues that the environmental impact of those scattered homes has likely been greater than that of the single- site Woodstock Commons.

Lynch said she doesn’t know how the saga will end. “It’s going to depend on the planning board members,” she said. Meanwhile, she and the other opponents will keep up their campaign.

On the other side, O’Connor is hopeful that the project will receive its approvals this year. Until then, the final chapter in the story has yet to be written. “I hope it has a happy ending,” he said.

NO DUMPS, NO CASINOS, NO APARTMENTS

NIMBYism is on the rise, especially when it comes to multifamily housing. Nationwide, overall opposition to local development is up 5 percent after holding steady at 73 percent the last two years, according to the latest Saint Index, which gauges opposition to different real estate projects.

The index found that 78 percent of Americans believe there should be no new development in their hometown. Nearly one out of four people reported actively opposing a development in his or her community in 2007, a rise from the one-in-five ratio tallied in 2006.

Landfill and casinos tied as the most-opposed type of local real estate project, with 76 percent of Americans against these uses, according to the 2007 index.

Resistance to multifamily housing is creeping up, though, with 44 percent opposed, up 10 percent from the year before. It was the largest increase of any sector.

NIMBYs opposing a development tend to lean just slightly toward the politically liberal end of the spectrum, according to the index. The most active NIMBYs are aged 56 to 65, homeowners, college or post-graduate educated, suburbanites, and have household annual incomes of more than $100,000, according to the index.

The Saint Consulting Group in Hingham, Mass., began the index three years ago.

HOME VALUES RISE NEAR AFFORDABLE PROJECTS

PHILADELPHIA

Do affordable housing developments harm the value of nearby properties?

Leaders at Philadelphia’s Project H.O.M.E. (Housing, Opportunities for Employment, Medical Care, and Education) say “no.” They found that home values in the neighborhoods where the group has housing and other facilities have appreciated at a higher rate than the citywide average.

Since 1990, the organization has opened 15 sites, including transitional and permanent housing for the homeless. Like many other affordable housing developers, Project H.O.M.E. leaders have faced charges that their projects would diminish the value of nearby homes. They decided to find out if these claims are valid.

“We wanted to know,” said Laura Weinbaum, the group’s director of public policy. “We didn’t know what the outcome would be, but we felt in our gut that the outcome was positive.”

They were right. In the years following the opening of Project H.O.M.E. facilities, home values in the surrounding neighborhoods appreciated about 6.8 percent, or 1.8 percent better than the citywide average of 5 percent. Researchers, who focused on a quarter- mile zone around each site, noted that home prices in these neighborhoods were below the city average prior to Project H.O.M.E.’s arrival.

The analysis by Econsult Corp. of Philadelphia found that over nearly 15 years, this rate of appreciation increased the housing wealth of individual residents by $31,000 each. This increase further means an improved tax base and an additional $8.5 million in fiscal revenue for the city.

Although it is difficult to prove that the group’s presence was the definitive cause for increased property values, the results show a strong correlation between the two, according to the study. “The presence of Project H.O.M.E does not adversely affect the values of homes in a neighborhood,” concluded the study. “Rather, in addition to improving the quality of life for its own clientele, the opening of a Project H.O.M.E. site yields significant benefits to the homeowners and residents of its chosen neighborhoods, as well as fiscal benefits for all city residents.”

The report, Project H.O.M.E.’s Economic and Fiscal Impact on Philadelphia’s Neighborhoods, can be found at www.projecthome.org.

A 2002 study commissioned by the Corporation for Supportive Housing found similar results in Connecticut. The 2002 Connecticut Supportive Housing Demonstration Program Evaluation Report can be found at www.csh.org.