Summary of Housing Forum, Oct 4, 2009

Mike Malinowski AIA, Applied Architecture principal and UUMPF volunteer moderated a panel including Patrick Sabelhaus, Esq. prominent affordable housing expert attorney and Steve Lebastchi, well known regional housing developer. (see web sites at end of list)

Mike began the forum with a presentation that highlighted the question: Should Housing be a part of a 50 year vision for the UU Campus? He then illustrated how complex the question becomes when considering the many technical, financial, operational and philosophical issues involved. In considering the broad master plan, potential responses to this question include: “No” (housing is off the table as a possibility) “Yes” (housing of some kind is included in the planning) and “Perhaps” (a ‘housing placeholder’ would be part of the master plan.

This program was intended to bring some of the questions, ideas, and expert facts to the table to have an informed discussion about housing as it may relate to the master planning process underway. The presentation and lively question and answer session that followed covered a wide range of housing types, and some key financial and operational considerations that apply to each of them, which is summarized here.

Affordable Housing (rental) (senior, family, mixed). This type of development is subsidized by various federal and state programs such as tax credits, which carry with them a variety of constraints and challenges. The general consensus of the panel was that this type of project is unlikely to be feasible financially using current approaches and development patterns, and that further the attorney pointed out that the significant risks associated with this project type make it likely inappropriate for the congregation.

Market rate Rental Housing (which could include seniors, family and mixed). The panel expert indicated that the market returns for this type of project are so low in comparison to the risks involved in both development and on going operation and management as to make them likely infeasible for further consideration. Market returns for rental projects are presently in the 8 to 9 % range, prior to servicing long term debt; which results in low cash flow over time relative to the risks and management challenges involved.

Mixed use Projects incorporating Commercial uses: These concepts were deemed not feasible by the panel due to both financial as well as land use constraints. Compatibility

Market rate Ownership Housing such as a condo development. This type of project could take various forms including those with co-housing shared facilities/amenities (which could also extend to other church infrastructure). This type of project could be feasible financially if the project were done not as a speculative development but with ‘pre-sold’ units designed to buyer preference. The congregation could participate in the development financially in a variety of ways, such as sale of land (which could have covenants that insured compatibility going forward) and ‘facility use fees’ for campus facilities that might be part of ‘unit ownership’ benefits. With sufficient pre-development sales, a developer could make such a project work and isolate the congregation from development associated risk; while providing both lump sum and ongoing income to the congregation. Compatibility issues such as noise, parking, appearance, privacy, etc would need to be resolved in the design. There was also some discussion about different ‘ownership’ patterns including ‘life estates’ that could potentially be tailored for some part of such a development to provide future benefit to the congregation. It was opinioned by Mr. Lebatschi that the one acre parcel occupied by the present duplexes could have a value in the 400K range (depending on market conditions which are not favorable now). He also indicated that development on this parcel may be in the 15 to 30 unit per acre range, depending on design parameters.

Existing Duplexes. The UUSS campus currently owns two duplexes on a one acre parcel adjacent to the main grounds. Part of this parcel is the open space that is used for various church activities such as the opportunity fair. It has been reported that these duplexes present operational challenges both from a management and maintenance standpoint.