AUGUSTA – I was quite astounded by the lack of knowledge displayed in the Maine Sunday Telegram’s editorial criticizing state Treasurer Bruce Poliquin’s efforts to lower costs (“Treasurer taking cheap shots at housing agency,” Dec. 11).

Poliquin is right. Affordable housing has been developed repeatedly for less than $200,000 per apartment, let alone the nearly $300,000 tab of recent MSHA projects funded almost entirely by taxpayers.

Decades of experience building and owning housing and hotels told me immediately that something was very wrong with a system that awarded a preponderance of its coveted federal and state tax credits and subsidies to extremely high-priced projects.

If these limited resources are used up on a few high-priced projects, there are none left for other deserving lower-priced projects.

This is the crux of a serious problem. Right now, 6,500 people are waiting for affordable housing while money is needlessly squandered on truly exorbitant projects.

Housing authority Director Dale McCormick and developers of these high-priced projects point to tax credit legislation for historic buildings, sprinklers, elevators and handicapped accessibility as causing the problem, but this has been proven false.

At our last meeting the board looked at the housing authority’s scoring results for two nearly identical projects dealing with historic buildings.

Park Street School in Kennebunk received 61 points under MSHA’s scoring system, while priced at $272,000 per apartment. It also received a direct payment of nearly $2 million in subsidy from the authority.

Amazingly, Sullivan School in Berwick received fewer points (54), although it came in at $180,000 per unit and received absolutely no subsidy from the housing authority.

Buildings of historic significance can and have been renovated at reasonable prices. Sullivan School shows that the additional funding provided by historic tax credits should reduce or eliminate the need for a huge subsidy from MSHA.

Park Street School and the other projects in that stratospheric price range all took large subsidies from the housing authority in addition to multimillion-dollar tax credits.

That MSHA allowed it, at the expense of other projects, is very troubling. That its scoring system favors the extremely high-priced projects, defies rational explanation.

These problems could have been avoided with an effective scoring system for the competitive process of choosing projects to receive the tax credit funding and possible subsidies.

MSHA’s scoring system has never had any points awarded for lower costs or for the use of fewer subsidies, as do New Hampshire and other states. Since there are effectively no cost controls in MSHA’s scoring, costs have been soaring while the rest of the market has seen declining housing costs.

The Telegram editorial states that not a single dollar of the state’s General Fund will be spent on the proposed Elm Terrace, but this may be the only taxpayer honey pot not raided.

A better way to put it would be that of a total proposed cost of $10.9 million, more than $10.4 million would be financed by federal and state tax credits (effectively taxes not collected) and direct cash subsidies from MSHA and the city of Portland.

Does the Telegram editorial board not understand that these are, in the end, taxpayer funds as well?

Maine State Housing Authority determines which projects receive federal and state tax credits. The winning projects sell the tax credits at a discount, usually to institutions like banks. These millions of dollars would otherwise be collected as taxes and end up in federal or state bank accounts, if not the General Fund itself.

Likewise, the MSHA subsidy and city of Portland grant came directly from their bank accounts. It is taxpayers’ money being used to fund these projects.

I have felt more like a detective than board chair attempting to get information about costs and a 2½-year, $28.5 million weatherization program for nearly 5,000 homes, for which, to date, there are apparently no results tabulated.

The director has told the board that we are limited to policy rules only. She is right. Under current law, the director answers to no one.

One would think that efficiently spending taxpayers’ money would be an issue on which all sides could agree.

Whether they are urban, historic or rural, it has been proven repeatedly that affordable housing units do not need to cost anywhere near $300,000.

It would be nice if the Telegram would support those attempting to fix this problem to provide decent housing to the thousands waiting.

Some issues are bipartisan, and this should be one of them.

 

— Special to the Press Herald