Best Practices For Effecting The Rehabilitation Of Affordable Housing

199 Pages·2006·1.57 MB·English

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V V O L U M E 2 : T E C H N I C A L A N A L Y S E S A N D C A S E S T U D I E S
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U.S. DepartmentS oefp Hteomusbienrg 2006
and Urban Development
U.S. Department of Housing
and Urban Development
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B e s t P r a c t i c e s f o r e f f e c t i n g t h e
r e h a B i l i t a t i o n o f a f f o r d a B l e h o u s i n g
Volume 2: Technical Analyses and Case Studies
Prepared for:
U.S. Department of Housing and Urban Development
Office of Policy Development and Research
SEPTEMBER 2006

Best Practices for Effecting the
Rehabilitation of Affordable Housing
—
Volume II:
TECHNICAL ANALYSES AND CASE STUDIES

Prepared for:
JUNE 2005 U.S. Department of Housing and Urban Development
Office of Policy Development and Research
Prepared by: Primary Author (CUPR): with (CUPR):
Center for Urban Policy Research (CUPR) DAVID LISTOKIN Alan Cander
Edward J. Bloustein School of Planning and Public Policy Tim McManus
Rutgers, The State University of New Jersey Matthew Camp
David Downs
New Brunswick, New Jersey
Mary Uschak
and Ian Litwin
Zachary Kushel
National Trust for Historic Preservation
The Enterprise Foundation
National Center for Healthy Housing
Research Assistance Provided by:
National Trust for Historic Preservation
Public Policy Department
Laura Skaggs, Patrick Lally, Sydney Becker
Northeast Office
Wendy Nicholas, Elaine Finbury, Adele Fleet Bacow
(NE Office Consultant)
Community Revitalization Department
Constance E. Beaumont, Elizabeth Pianca,

Harry K. Schwartz, Erica Stewart

Nixon Peabody LLP
Andrew Potts
The Enterprise Foundation
Planning, Design, and Development
Peter Werwath
National Center for Healthy Housing
Jonathan Wilson
Heritage Preservation Services, National Park Service
Elizabeth Moore Rossi
Building Technology, Inc.
David Hattis
Building Futures Institute, Ball State University
Steven Kendall
ACKNOWLEDGMENTS

We would like to acknowledge the critical assistance of the National Rehab Study Housing Resource Group who aided the identification of both the challenges to
rehab and best practices to foster renovation:
Robert Adams, VMH, Inc. Richard Kuchnicki, International Code Council
Randall P. Alexander, The Alexander Company Robert Kuehn, Keen Development Corporation
DeWayne H. Anderson, Anderson Development Company Michael Lappin, The Community Preservation Corporation (CPC)
Bennett Applegate, Applegate & Thorne-Thomsen John Leith-Tetrault, Community Partners (National Trust)
Alfred Arezzo, Hoboken, New Jersey Aaron Lewit, Enterprise Foundation
William Asdal, Asdal Builders Kelley Lindquist, Artspace Projects, Inc.
James E. Babbitt, Flagstaff, Arizona Stanley Listokin, Executive Director, Masada Construction
Richard Baron, McCormack Baron & Associates Stanley Lowe, Executive Director, Pittsburgh Housing Authority
Eddie Belk, Belk Architects Weiming Lu, Lowertown Redevelopment Corporation
Peter Bell, National Housing & Rehabilitation Association (NHRA) Alan Mallach, City of Trenton, New Jersey, Department of Housing and Development
Bruce Block, Milwaukee, Wisconsin Daniel Mackay, Preservation League of New York State
Jim Bonar, Skid Row Housing Trust Christy McAvoy, Historic Resources Group
William Brenner, National Institute of Building Sciences (NIBS) Bob McLoughlin and Helen Lopez, Albuquerque Housing Services
Thurman Burnette, Rural Development Michael Mills, Ford Farewell Mills & Gatsch Architects
Andrew Chaban, Princeton Properties D. Thomas Mistick, Mistick Construction
William Connolly, New Jersey Department of Community Affairs, Division of Codes and Standards Susan West Montgomery, Preservation Action
Karen A. Danielsen, Director of Housing Policy and Practice, Urban Land Institute (ULI) William Mosher, Mile High Development
William F. Delvac, Latham & Watkins Ronald F. Murphy, Stickney Murphy Romine Architects
Linda Dishman, LA Conservancy Jerry Myers, Pocatello, Idaho
Dan Dole, Scottsdale, Arizona James Paley, Executive Director, Neighborhood Housing Services of New Haven
Carl Dranoff, Dranoff Properties Bryan Park, Northwest Housing Resources (NHR)
Mel Ellis, Rural Development Sharon Park, Heritage Preservation Services, National Park Service
David Engel, Office of Policy Development and Research Brian Patchan, National Association of Home Builders (NAHB)
Dan Falcone, New Economics for Women Mary Helen Petrus, Cleveland Neighborhood Development Coalition
Mario Fonda-Bonardi, Fonda-Bonardi & Hohman, Architects Perry Poyner, Alley Poyner Architects
Joan Galleger, Garsten Management Corporation Paula Robinson
Terry Goddard, Law Offices of Terry Goddard Jonathan F. P. Rose, Affordable Housing Construction Corp.
Tony Goldman, Goldman Properties, Inc. Donovan Rypkema, Washington, D.C.
Dean Graves, FAIA Jacques Sandberg, Pusateri Development
Frank Grey, Chattanooga Neighborhood Enterprise (CNE) Ken Sandler, U.S. Environmental Protection Agency
Cissy Gross, Kansas City, Missouri Susan Schlanlaber, The Landmark Group of Companies
George Haecker, Bahr Vermeer & Haecker, Architects Bruce Schiff, Friduss, Lukee, Schiff & Co.
David Harder, Executive Director, Little Haiti Housing Association (LHHA) Clark Schoettle, Providence Preservation Society Revolving Fund
James Harger, Winn Management Howard B. Slaughter, Jr., Pittsburgh, Pennsylvania
David Hattis, Building Technology, Inc. Kennedy Smith, National Main Street Center (National Trust)
Curt Heidt, Federal Home Loan Bank Robin Snyder, U.S. Environmental Protection Agency
Michael Hervey, Jackson, Mississippi Gary Stenson, MetroPlains Properties, Inc.
Darryl Hicks, National Housing and Rehabilitation Association (NHRA) Kathleen Taylor, Owner, Taylor Construction Services
Kitty Higgins, National Trust for Historic Preservation Pat Tiller, National Park Service
Bill Huang, Community Partners (National Trust) Stephen Turgeon, Memphis, Tennessee
Lawrence Jacobsen, Mortgage Bankers Association Mike Turner, Professional Remodeler
Marty Johnson, Isles, Inc. George Vallone, West Bank Realty
Anthony Jones, Clearwater, Florida Ronald Wells, Spokane, Washington
Will Jones, Research Officer, National Association of Housing and Redevelopment Officials Kathleen H. Wendler, Southwest Detroit Business Association
Wendall C. Kalsow, McGinley Hart & Associates Jim Wheaton, Chicago Neighborhood Housing Services (NHS)
Kevin Kelley, Leon Weiner Associates Bradford J. White, Esq., Project Management Advisors, Inc.
C. Theodore Koebel, Center for Housing Research, Virginia Tech David Wood, Professional Remodeler
Karl K. Komatsu, AIA Komatsu Architecture Eric Youngberg, Neighborhood Reinvestment Corporation
John Kromer, University of Pennsylvania’s Fels Institute of Government
We also gratefully acknowledge the patience and critical assistance provided by Edwin Stromberg, GTR at the U.S. Department of Housing and Urban Development,
Office of Policy Development and Research. Mr. Stromberg is a consummate professional. Importance assistance was also provided by Laura Skaggs of the National
Trust for Historic Preservation; Peter Werwath of the Enterprise Foundation; Jonathan Wilson of the National Center for Healthy Housing; as well as other
contributors to the study (Elizabeth Moore Rossi of the National Park Service, Steven Kendall of Ball State University, and David Hattis of Building Technology, Inc).
We also thank numerous unnamed professionals who attended two national review panels held in conjunction with the annual conference of the National Trust for
Historic Preservation as well as the National Housing and Rehabilitation Association.
Lastly, we thank those working in the case study organizations for participating in this study. They gave generously of their time and expertise.
Final responsibility for the contents of this report, however, rests with the authors alone.
The contents of this report are the views of the contractor and do not necessarily reflect the views or policies of the U.S. Department of Housing and Urban
Development or the U.S. Government.
TABLE OF CONTENTS
Introduction....................................................................................................................................................................................v

1

Estimate of the Need for, and Affordability of, Housing Rehab in the United States .............................................................1

2

Tax Credits and Housing Rehab ................................................................................................................................................ 31

3

Building Code Standards and Rehab.......................................................................................................................................... 69

4

Receivership and Housing Rehab............................................................................................................................................. 105

Appendix: State Receivership Statutes in the United States: Detailed Annotation ............................................................ 121

5

Rehab Barriers and Best Practice Solutions Case Study: Seattle, Washington .................................................................. 153

6

Affordable Housing and Federal Historic Preservation Tax Incentives:

Examples of the Compatibility of Affordable Housing Rehabilitation and Preservation...................................................... 183

7

Rehab Barriers and Best Practice Solutions Case Study:

Affordable Housing and Historic Preservation—National Examples...................................................................................... 197

8

Rehab Barriers and Best Practice Solutions Case Study:

The St. Paul–Ramsey County Lead Hazard Reduction Program ........................................................................................... 245

9

Rehab Barriers and Best Practice Solutions Case Study:

The Chicago Mayor’s Office for People with Disabilities ...................................................................................................... 259

Introduction
Technical Analyses and Case Studies
Our study of best practices to effect the rehabilitation of affordable housing relied on multiple
sources of information and data. These included the existing literature; the study’s resource
group, often contacted by telephone; the research team’s considerable rehab experience; and
technical and case study analyses. This volume presents the more critical technical analyses and
case studies.
The technical studies presented here consider four subjects: national rehab need and
affordability, rehab and tax credits, the building code and rehab, and receivership as a rehab
strategy.
Chapter 1 utilizes the 2003 American Housing Survey (AHS) to estimate rehab need and afford-
ability. It posits how AHS measures of housing quality can be employed to flag varying degrees
of rehab need (minor, moderate, and substantial), assigns costs to these different rehab
interventions, and estimates to what degree the necessary renovation is affordable.
Chapter 2 analyzes how a variety of tax credits can support rehab. These include the Low-
Income Housing Tax Credit, Historic Tax Credit, and the recently enacted New Markets Tax
Credit. The latter is offered by the federal government only while the other credits are available
from the federal government as well as some states. This chapter describes each of the credits,
documents how these aids are currently being used to support housing renovation, and concludes
with policy recommendations to enhance the utility of the various credits to encourage affordable
rehab.
Building codes regulate the myriad required construction specifications (e.g., for means of
egress, structural loads, and fire protection) for both new construction and rehab. While
regulating both types of activities, building codes are largely oriented to new construction, and
that perspective creates problems for renovation. The building code, in practice, sometimes
mandates a new-construction standard for rehab, and such required retrofitting of an existing
building to a new-building standard is technically problematical and expensive. Chapter 3
analyzes this building code challenge and most importantly documents efforts to make building
regulations more supportive of rehab through such means as adopting a “smart code.”
Property acquisition can challenge rehab, and Volume I of the study explored ways to overcome
this hurdle. Receivership is one such property control strategy. Chapter 4 of this volume analyzes
the statutory framework for receivership in the United States (e.g., seventeen states have
enabling legislation), considers how receivership is being effected, and discusses how its
implementation can be improved.
v
Chapters 5 through 9 of this volume present best practice case studies. Case studies were
conducted to expand the research methods utilized by the study (e.g., review of the literature,
discussions with the resource group, and conducting technical investigations). These multiple
sources provided an extensive base of information on the best practices for affordable-housing
renovation; however, the sources had limits as to the amount and nature of information that could
be covered. For example, because of time and other constraints, the telephone discussions with
the resource group were not suitable for ascertaining the numerous modifications to, or evolution
of, a specific rehab program. In addition, the telephone discussions did not allow for the face-to-
face rapport that encourages a rehab developer or lender to give a candid, introspective
evaluation of the best practices that were learned. Accordingly, the study included a series of
case studies to assess the experiences of those doing rehab on a day-to-day basis.
The purpose of the case studies is to add qualitatively to our understanding of the best practices
for affordable-housing rehab. Over and above the information obtained from the telephone
discussions, literature, and other sources, the case studies provide an in-depth and “real world”
look at the solutions to problems that were crafted in a variety of rehab projects.
The resource group nominated many candidates for the case study investigations. The fourteen
programs chosen for study were selected on the basis of the following considerations:
1. Solutions. The cases chosen all achieved considerable measures of success in their renovation
activities. We focus on the creative solutions that were formulated.
2. Strategic range. As described in Volume 1, barriers to and solutions for affordable-housing
rehab can be grouped substantively into economic, development, construction, and
occupancy hurdles. The fourteen cases selected for the in-depth examination were chosen so
that there was a representation of examples of a majority of the types of barriers and
solutions. We also sought variety in the types of specific major issues encountered. Thus,
some case studies predominantly involve the building code, others historic preservation
issues, and yet others lead-paint challenges.
3. Range of institutions. In selecting institutions for investigation the research team sought
variety in type, size, and geographic location.
4. Availability. The candidates were asked whether they would be willing to participate in the
on-site case studies. Although we sought a variety of case studies, there is still a limited
range. Only one investigation involved a local, private remodeler. The cases also lack rural
representation. Study resources inhibited the ability to expand the case study range.
vi