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On the other hand, AHAB’s ideas have to be practical and
effective. As outgoing chair, Hugh Spitzer explains, “The basic
principal that I got folks to agree to, fairly early, when I
became chair was that the board should focus on, and be guided
by, the ‘value-added principal’; that means we avoided spending
members’ time on things that AHAB can’t do anything about, or
things that somebody else can probably do better.”
Hugh Spitzer stepped down as Chair of AHAB in February 2007.
By all accounts, AHAB has been remarkably successful in adding
value under Hugh’s six-year tenure. Yet all of us in the
affordable housing community are confident that Hugh’s
successor, Heyward Watson, will keep AHAB running at the same
high standard. Heyward’s credentials are impeccable. He recently
took over as CEO of Impact Capital. Prior to that he was
director of the Fannie Mae Washington State Partnership Office,
where he was responsible for customer relations, community
lending/community relations, and government relations. Before
that, he worked here at the Commission for seven years, as
director of Homeownership Programs.
AHAB’s four roles
The state legislature established AHAB in 1993 to replace
several existing advisory boards and task forces at the
Department of Community Trade and Economic Development (CTED)
and consolidate all advice on housing and housing-related issues
to the department in a single body. Hugh states that AHAB’s
duties fall into four main areas:
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Five year plan. AHAB’s
most important function is to write an affordable housing
advisory plan every five years. The plan analyzes the need
for affordable housing in the state and assesses how well
markets and government programs are meeting the needs of the
population. Looking back to the previous plan covering
2000-2005, Hugh notes that, “the State managed to implement
almost all of the recommendations during the first three or
four years. I am hopeful that most of the current
recommendations will be similarly enacted.” In fact, the
legislature is off to a good start, having significantly
increased contributions to the Housing Trust Fund (HTF).
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Legislative support.
Every year, AHAB supports specific pieces of legislation
that it believes will help carry out the objectives in the
five-year plan. As Hugh explains, “along with other AHAB
members, I’ve testified regularly on legislative issues.
AHAB works with conflicting interest groups to develop a
position. For example, in the 2006 session we worked
directly with conflicting interest groups on legislation
related to tort reform and condominium construction. And
we’ve commented frequently on issues like the need to
dedicate more money to the HTF and preferential tax
treatment for owners of low-income housing.”
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Rapid response. AHAB
steps in to “fight fires” when asked by the governor or the
legislature to help on specific issues in the housing arena
that need immediate attention. As Hugh recalls, “in 2002,
the HTF was having trouble tracking its loans. CTED hired a
consultant, who performed an in-depth study. They made a set
of recommendations which AHAB endorsed, then CTED devised a
program to clean up the accounting process, and that was
quite successful.”
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Forum for competing interests.
As you can see from the box
nearby, the membership of AHAB is structured to represent
the broad spectrum of interests across the state. “AHAB
provides a forum,” says Hugh, “for very different
institutional interests to get together, to try to
understand one another’s concerns, and to reach consensus on
a common plan of attack on housing issues.” For example,
AHAB helped mediate a dispute that came up a few years ago
involving farmworker housing. In this case, the issue
involved advocates for locating housing directly on the
farmers’ premises versus those who wanted off-farm housing.
“That was fun,” Hugh recalls.
Summing up, Hugh explains that AHAB operates “at the 20,000 foot
level. That’s not 30,000 feet, and it’s not ground level. We try
to understand housing affordability problems and to make
recommendations for things that the state government can
specifically do that will really make a difference—to generate
more affordable housing or protect housing stock that we have.
We have to differentiate between issues where we’ll be
effective, and others that should be left to local governments
or the private sector. That’s the value-added principal again.”
AHAB: Building consensus
Now I’m going to take a closer look at the consensus building
process in the context of several issues that AHAB has tackled
recently—or are on the punch list.
Growth management
AHAB’s Growth Management Task Force (GMTF) originated with
Washington State real estate professionals and builders who,
historically, have been concerned that the Growth Management Act
(GMA) has been increasing the cost of, and reducing access to,
housing for working people. Last summer, Governor Gregoire
responded by directing AHAB to investigate the issue and make
recommendations.
The GMTF had representatives from a wide variety of interest
groups, including cities, counties, environmental interest
groups—as well as real estate professionals and builders. AHAB’s goal was to find
a consensus on what the legislature could do to increase the
supply of affordable housing, assuming the GMA would remain
in force and there would be growth boundaries. The task
force came up with a list of approximately 120 ideas. The final
report presents only those that received unanimous approval.
These include recommendations to transfer state money to local
communities for infrastructure; to streamline the zoning and
permitting processes, and to make them more uniform between
jurisdictions; and to track the amount of land that is available
for development.
Thomas Moak serves on the Kennewick City Council; he
represents the Association of Washington Cities for the area
east of the Cascades.
Clearly, one divide in the GMTF was the difference between how
the GMA is impacting urban vs. rural areas—along with the needs
of the east vs. west of the Cascades constituencies. “In wearing
the hat for Eastern Washington,” comments Tom Moak, “part of my
agenda has been that some of the crises we see in Western
Washington aren’t necessarily statewide crises. We need to look
at issues from a statewide perspective: if you bring mandates to
cities and counties that don’t have problems, you’re creating
costs without identified benefits.”
Sam Anderson is executive officer of the Master Builders
Association of King and Snohomish Counties.
The jury is still out on how effective the GMTF actually was.
Sam Anderson, who represented housing developers, is
disappointed by the lack of tangible results. Says Sam, “we
spent a lot of time, and accomplished very little. Frankly, a
lot of the things the real estate professionals and builders want to do would put
greater requirements on the cities. The cities say, we’re
happy to do that, if somebody gives us the money...” Sam
characterizes the debate between developers, the cities, and the
environmental community as follows: If you have a mandate that
takes building lots out of the system, then you have to figure
out where you’ll put them back in, so there’s no net loss of
housing.
“The environmental community doesn’t like that idea; they don’t
like moving the urban growth boundary,” Sam says. “In the end,
it was good to have a dialogue, but not one legislative proposal
came out of it. Nobody was willing to take what I thought were
bold steps forward to address the issue.”
Paul Purcell is president of Beacon Development Group, a
for-profit affordable housing developer.
Paul Purcell has a different take. As founder and president of
Beacon Development Group, Paul brings the perspective of a
for-profit developer that has developed more than $300 million
worth of housing, office and mixed-use properties over the last
20 years. Says Paul, “The GMTF was a great example of the
diverse interests that come to the table around housing issues.
We had 120 ideas on the brainstorm list but could only agree on
about 20. The discussions were very frank but, objectively,
there were large gaps that prevented getting a consensus on
things. The great thing about it was that people were respectful
of others’ opinions; people tried to hear through why others
held their particular positions....”
The bottom line for Paul is that the task force “laid the
groundwork for ongoing discussions on how to create better
public policy to encourage affordable housing. It’s important to
get unanimous agreement. The task force worked hard to make that
happen.”
 
Working Together: This 45-unit project in Pasco is a textbook
case of how the complementary expertise of for-profits and
nonprofits can benefit people in need of affordable housing.
Beacon purchased and held the property prior to development and
assisted Catholic Housing Services of Eastern Washington (CHSEW)
in putting together the financial package for the
development. Once funded, CHSEW purchased the property and
Beacon has proceeded to supervise the construction. The project
is scheduled to be completed in July 2007.
Condo insurance reform
Over the past several years, the spiraling cost of liability
insurance for condo developers has had a significant impact on
affordability. Sam Anderson brought the issue to AHAB. “Condos
are a first point of entry for many new home buyers,” says Sam.
“Many low-income housing developers can’t build and sell
reasonably priced condos with the insurance rates they face.”
AHAB held a series of fact-finding meetings on what was driving
the price hikes, and then recommended moves to improve the
climate for Washington State condo developers. “I thought AHAB
provided a terrific forum for presenting the issue,” Sam says.
“We built a coalition, and a large part of that coalition was
low-income developers and people involved with public housing.
All of us agreed that we needed to fix this. The coalition did a
great job of lobbying the legislature to invite back the
insurance companies and make it more palatable for them to do
business in Washington State.”
Real estate tax assessments
As executive director of the Affordable Housing Management
Association (AHMA), Joe Diehl represents the managers of
some 32,000 Section 8 and tax credit properties in the state,
including private sector managers, nonprofit managers, and
housing authorities. For the Council on Affordable and Rural
Housing (CARH), he represents the managers and owners of USDA
Section 515 properties—about 9,500 housing units. Joe’s official
role with AHAB is to represent the apartment management and
operation industry, “but I weigh in on tribal issues when they
come before the group as well,” he says.
Joe Diehl is executive director of three organizations: the
Affordable Housing Management Association, the Council on
Affordable and Rural Housing, and the Northwest Indian Housing
Association.
“We felt that some of the counties were not following standard
processes in valuing affordable housing,” recounts Joe. “Their
assessments were based on comparable sales. When a nonprofit
purchases affordable housing, for example, the property’s use is
restricted, and should not be valued like a market-rate
apartment building.”
Joe points out that a large percentage of the issues his members
care about are federal in nature, because Sections 8 and 515, as
well as the tax credit programs, are federal programs. “When I
spoke on the tax assessment issue at a recent AHAB meeting, I
said, ‘I haven’t really said much for the past six years [of my
tenure], but this is really important.’” Several months ago,
AHAB wrote a letter to the governor to ask her to intervene, and
since then, “we’ve gotten a bill before the legislature and are
working to get it through this session. We’ve gotten the county
assessors to sign on to it. There’s only a certain level of
rents that you can charge at our properties based on the
applicable regulations. If real estate taxes go up, they can
torpedo the entire investment and the property could go under.
That’s a major concern for affordable housing.”
Mobile home park closures
Mobile home park closures are on the docket this year for AHAB.
As land prices rise, parks are closing all over the state. Lynn
Davison, executive director of Common Ground, acknowledges that
the closure of mobile home parks in the state is part of the
overarching—and growing—crisis of workforce incomes not keeping
pace with housing costs. “This is a critical issue,” she says.
“In losing mobile homes, we are quickly losing a lot of
unsubsidized affordable housing. It’s occurring in every county
in the state.”
Lynn Davison is executive director of Common Ground, an
organization whose mission is to create and preserve housing
statewide for people with low income and special needs.
The loss of mobile home parks is certainly being felt in the
Tri-Cities, which has been the fastest-growing area in the state
since 2000. In Kennewick, for example, back in the 40s and 50s
when Hanford was in its heyday, many mobile home parks were
established along the Columbia River. Tom Moak, who serves on
the Kennewick City Council, points out that his city is
promoting riverfront economic development, which puts him, and
the community, in a bind. “I’m an advocate of riverfront
development,” he says. “I know there’s going to be an impact on
people. How do we deal with this in a humane way?”
With land prices on the rise, many mobile home parks, like the
one pictured at right, are closing all over the state—giving way
both to industrial uses and less affordable housing
developments.
State warranty for new residential construction
Right now there’s a controversial bill before the legislature
that would require all contracts for new home construction and
major remodels to include a construction warranty. “Hugh and
AHAB have been helpful in the home warranty debate going on in
the state legislature right now,” says Sam. Hugh wrote to the
legislature recommending that further study is warranted before
the legislation is created. “If there’s a problem, and if part
of the fix is a warranty, so be it, but let’s figure out a
warranty that works, first,” Sam says.
Housing for seniors
Senior housing is another issue that AHAB members have agreed to
take on this year. People are generally aware that our core
federal entitlement programs, Social Security and Medicare, face
serious funding shortfalls in coming decades. The aging baby
boom generation will require more services of every kind. Yet
the potential crisis posed by the lack of appropriate senior
housing has been relatively overlooked. “We are living in a
state whose population is aging,” says Lynn. In Washington
State, with its increasing proportion of senior citizens, “how
we address the demographic issue is important from a public
policy standpoint.”
Lynn holds the special needs populations seat on AHAB, which
includes senior housing. “But,” she points out, “in reality, in
any individual discussion, everyone takes part. I don’t just
participate in issues that directly affect special needs
housing; I don’t think anybody operates that way either. I would
say we’re all fully engaged. There’s an interest in helping CTED
make good public policy decisions about housing. Everyone has
that interest—above their individual representations.”
Inclusionary zoning
An ongoing debate that has been one of the more contentious for
AHAB members is inclusionary zoning. The issue centers around
planning ordinances that require that a certain share of new
construction is earmarked for people with low to moderate
incomes. “That one will continue to be knock-down drag-out,”
predicts Sam. He echoes many AHAB members in stressing that part
of his role is helping to educate his peers from the perspective
of the constituency he represents on the AHAB board. In Sam’s
case, he holds a for-profit builder seat. “We firmly believe
inclusionary zoning doesn’t work,” he says. “Many nonprofits
will say that it’s the only answer, that developers should be
forced to include low-income set-asides in their developments.”
From Sam’s perspective, inclusionary zoning can serve to deter
developers—exacerbating a problem it’s meant to fix.
Sam thinks that AHAB provides a great forum for this kind of
back and forth. The bottom line, he says, “is figuring out how
to house the community. We all work together to get people
shelter. That’s our cumulative role: to figure out how we can
house everyone in clean, adequate housing. The debate for most
is financial resources: how do we maximize the amount of money
for affordable housing, and how do we facilitate being able to
spend it wisely?”
Aging of the affordable housing portfolio
One increasingly troubling issue that hasn’t yet been brought up
before AHAB is our state’s aging affordable housing portfolio.
Joe Diehl would like to see this topic considered. “Much of the
affordable housing that exists, with the exception of tax credit
properties, was built in the 70s and 80s,” he says. “As is
common with a lot of government-subsidized programs, there’s not
a lot of money available to go back into keeping these
apartments in good condition and keep up with capital
improvements. We have an aging low-income housing portfolio that
we’re trying to keep together with duct tape. Properties are
going under; we’ve already seen nonprofits coming in to try to
rescue these in preservation deals. It’s going to take more than
the HTF. Maybe the state should take a more active role.”
Role of AHAB with the legislature
There’s always a tension between how far a policy-making forum
like AHAB should be expected to penetrate the law-making fray.
In much of the recent legislation that treats affordable housing
issues in the state, AHAB has been called out to play an
oversight role. Lynn stresses, “we need to be clear about AHAB’s
role with the legislature.”
In the passage of HB 2163 (funding to end homelessness), for
example, AHAB was called out to review plans, and in the current
legislative session, Rep. Mark Miloscia’s Affordable Housing For
All bill, the role AHAB played was, Lynn observes, “interesting
and somewhat new. Still—a piece of our agenda is being driven by
that legislation. Members of AHAB are trying to be as clear as
we can about the roles that are appropriate for us to play as an
advisory group—as well as roles that may be beyond what an
advisory group should be playing.”
Heyward looks ahead
After
serving six years as AHAB’s chair, Hugh felt he needed to spend
more time teaching at University of Washington School of Law. He
says the transition has gone smoothly and he’s delighted with
his successor. “Heyward Watson is perfect,” says Hugh. “He has a
background in mortgage banking and government. He is a finance
person too. He doesn’t really have any particular agenda to
push. That’s very useful. The Chair helps manage these 19
different people with all their different interests. It’s like
being a conductor.”
Heyward Watson was appointed by Governor Gregoire to take on
the role of Chair of AHAB for a four-year term, effective
February 2007.
In my view, Heyward will handle the baton with skill and tact
and insight. He acknowledges that he discussed taking on the
chairmanship with Hugh at some length. Says Heyward, “Hugh had
the same opinion that I’ve always had about this kind of role. I
see AHAB as a way for us to figure out—to hear all the voices
through the whole process—what the state of Washington should
support that’s good for all of the citizens, not just one group
over another. I want to make sure we stay focused on every group
involved. That we carefully look at these issues one at time,
versus just being mad about something, which doesn’t help the
citizens in the long run.”
From my long acquaintance with Heyward, I know he’s waiting to
know the territory before rushing to judgment. He’s made a
career as a problem solver, and a strong reason he was chosen as
chair is his ability to be even-handed. “My concern right off
the bat,” he says, “is that I don’t know these players very
well. I’ve got to get to know them, to hear what their issues
might be. We can then move these through the process.” For
Heyward, there are strong components of good will and good sense
at this stage: “Our job is to come up with a compromise that
makes sense for everyone.
“I’ve been in awe of Hugh’s leadership for a long time,” Heyward
concludes. “I’m honored to have this position. I want to do the
right job for the people of Washington State. We have limited
resources and we have to figure out how to leverage those in the
best possible way. That’s what I’m looking forward to doing.”
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Accolades for Hugh
AHAB isn’t Hugh’s success alone, but during the past six years
of his tenure as chair, he has succeeded remarkably in guiding
the board in zeroing in on key issues and urging the
membership’s patchwork quilt of voices into a thoughtful and
cohesive whole.
For the AHAB board members I interviewed, Hugh has been the
consummate chair. But let’s hear it in their own words:
Tom Moak: “Hugh has been the eloquent spokesman for AHAB. Hugh’s
stature has helped AHAB be recognized as a force and voice in
affordable housing; he’s been successful in carrying the AHAB
hat to the legislature.”
Lynn Davison: “Hugh has been a fabulous chair. He has been very
strategic in choosing issues that were really important—where he
thought that the group could offer something of value. That has
helped us have impact. The credibility of the chair is truly
important in having the impact be felt; Hugh has been extremely
successful there.”
Sam Anderson: “Hugh has been a phenomenal chairman—he’s as good
a consensus builder as anyone I’ve ever met.”
Joe Diehl: “Hugh has been outstanding. I’m sad to see him go. He
has been a true leader and has truly focused on the issues. He
does so much work on his own volunteer time. Oftentimes after a
meeting there are six or eight letters that have to be sent out;
he not only drafts them but drafts them very well.”
Paul Purcell: “Hugh has made a great contribution to the public
discussion of affordable housing by authoring a large number of
public statements and op-eds. He is a very credible person in
every arena. He has raised the level of discussion: that’s been
a significant component of his contribution, and I think the
appointment of Heyward will continue that.”
Public/private
partnerships
Hugh relates that one of the “biggest eye openers” he
experienced as AHAB’s chair was the realization that nonprofit
and for-profit builders have such similar interests. Says Hugh,
“Folks often think of the private sector being 180 degrees
different from the public sector. In fact, both have the same
problems—getting construction insurance, the speed of getting
permits, and the difficulty of finding buildable land. Builders
are builders and developers are developers.”
In terms of building consensus, Hugh notes that low-income
housing is an issue that actually unites different interests.
“Low-income housing advocates are politically and culturally
liberal and often have similar perspectives on issues as
environmentalists,” Hugh observes. However, because “builders
are builders,” the nonprofits serve as a useful bridge between
for-profit builders and environmentalists.
A good example is Paul Purcell’s Beacon Development Group. After
working for Catholic Community Services of Western Washington,
Paul founded Beacon because he believed there were areas of the
development process that required hard-core business skills.
Says Paul, “the business of affordable housing development is a
business with investors, with financial institutions, with
architects; it really happens within the for-profit world. At
the same time, the nonprofit sector’s ability to provide
long-term management and delivery of services is generally
superior to for-profit management.”
With this in mind, Paul created Beacon’s business model as “a
development bridge between for-profit development and the
nonprofit world of ongoing management and property ownership.”
Beacon’s clients are public housing authorities and nonprofit
developers. A good example of how this type of partnership works
is the as-yet-unnamed project in Pasco that is pictured nearby.
Beacon found a building site, purchased it, developed it, and
then turned it over to a nonprofit with the right long-term
management capabilities. While this project was not a direct
outcome of any specific AHAB initiative, it illustrates the kind
of cooperative approaches that are needed to address the
challenge of meeting low-income housing needs in Washington
State.
AHAB’s
Anatomy
By statute, the membership of AHAB consists of the following
representatives appointed by the governor:
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Residential construction industry (2)
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Home mortgage lending profession (2)
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Real estate sales profession
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Apartment management and operation
industry
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For-profit housing development
industry
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For-profit rental housing owners
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Nonprofit housing development industry
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Homeless shelter operators
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Lower-income persons
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Special needs populations
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Public housing authorities
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Washington association of counties
(2)*
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Association of Washington cities (2)*
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Chair of the affordable housing
advisory board
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One representative at large
The following three members serve as ex officio, non-voting
members:
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The director of the Department of Community Trade and
Economic Development
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The executive director of the Washington State Housing
Finance Commission
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The secretary of the Department of Social and Health
Services
*One each from the east and west sides of the Cascade Mountains
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