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Affordable housing is not what you might think it is


Rick Perry, with the Tennessee Housing Development Association, spoke in Clinton last Wednesday. (photo:Ken Leinart )
When most people think about “affordable housing,” they don’t get a good image.

“They picture in their mind’s eye … The projects. A flop house,” said Ralph Perry with the Tennessee Housing Development Association. He spoke last week about the role the agency plays in putting people in affordable homes in the state.

“I think people sometimes have the wrong impression about what affordable housing is,” he said.

Perry said “affordable housing” as it is now was brought about during the administration of President Ronald Reagan. It effectively took “affordable housing” out of the government’s hands and turned it over to the private sector, and added incentives to make it work.

Perry added that since that time, this housing initiative has always drawn bipartisan support in Washington, D.C.

“You say, ‘Republicans and Democrats can’t get along,’ but not in thos case. It has always enjoyed bipartisan support since its creation under President Reagan.

A tax credit, Perry said, is what keeps the private sector motivated and involved.

It also sets stringent guidelines an on the properties.

“Cabrini Green? We’ don’t do those anymore,” he said.

Perry said there are a number of properties statewide that are affordable housing initiatives. “You drive by them and you’d never know it,” he said.

He said there have been times when someone looking to rent an apartment have approached such a property and offered to pay whatever amount it took to be able to live there.

“But it doesn’t work that way,” he said.

Strict income guidelines are kept — and renters have to recertify every year to make sure they are in those guidelines.

“A single mom making $35,00 a year,” Perry said. Those are the kind of folks benefiting from affordable housing initiatives he said.

“A nursing tech. A grocery clerk. Clerical staff working for the city or county … “ he said.

Perry also pointed out that such projects serve as a catalyst for additional housing and retail development.

And the properties are not HUD programs. They are accountable to the IRS — on the hook, as it were, to make sure rents are maintained at the amount they are designed for.

Rents are based on 60-percent of the area’s average income and as income levels rise or fall, those rates will reflect that.

And areas needing affordable housing are based on research, on the number of empty or available living spaces are in a particular area.

But once a property is ready for leasing, the developer’s work isn’t finished.

“Developers have every incentive to make sure the properly is maintained, properly managed, and make sure the people living there are eligible,” Perry said.

Perry stop in Clinton last week came on the heels of the Daugherty Building receiving a “certificate of appropriateness” from the city’s Historical Commission.

The building and development plans have drawn a large of amount of attention.

Perry addressed one of the concerns he said he sees whenever affordable housing in brought up.

“NIMBY — Not In My Back Yard — or opposition to afforadable housing,” Perry said. “There is as much opposition to affordable housing from upscale urban liberals as there is in the suburbs.

“If people think what you’re building is ‘projects,’ well, sure. Nobody really wants that, so what do you expect?.”

Perry said tax credits are granted as way to ease the initial cash flow on the project so that the housing can be “nice.”

Developers can’t just pocket the money, he said.

Going back to the guidelines, Perry said the IRS can come back to the developer and cause a lot of problems and a lot of costs.

That’s whay, Perry said, the developments are, “One of the best surpervised properties.”

Perry said the tax credits are in place so as, “not a burden on the initial cash flow of the development. So they can put the money into the project.”

Perry did say that THDA has not worked with a lot of “historical buildings,” like the Daugherty Building in Clinton. But there is another “historical” project in the works in Dandridge.