July 22, 2005,
To: The Lawrence City Commission
From: Barbara Huppee, Executive Director, LDCHA
Dear Commissioners,
I am writing to ask you to approve the Housing Trust Fund board’s recommendation to award the LDCHA $200,000 for the expansion of our Peterson Acres development. I would like you to know a few things about our request that make this award so important.
The Peterson Acres development at 2930 Peterson Road was built in 1995 with federal public housing funds. The development consists of 25 units built on the front three acres of a five acre plot leaving the back two acres for future development. This request is to help finance the construction of up to 9 units on the back two acres of the site.
Federal funding for public housing development ended the year Peterson Acres was funded. Any community wishing to develop affordable rental housing today must do so through a mix of funding mechanisms that includes non federal grants, loans, tax credit financing and/or conventional financing.
The average annual income of current residents at Peterson Acres is $13,152. The average monthly rent paid is $167. The only way a community can keep rents low is by writing down the actual cost of property acquisition and construction. Since the federal government no longer funds public housing development, the type of funding offered through the Housing Trust Fund, in combination with the fact that the housing authority already has the land for development, creates a rare opportunity for the community to expand its affordable rental housing for seniors.
The most secure type of affordable housing that any community can have is permanent housing owned by the community. Peterson Acres is owned by the City of Lawrence and operated under the authority of the LDCHA. The LDCHA’s authorizing ordinance stipulates that property developed by the LDCHA will be owned by the City of Lawrence. Thus all property developed by the LDCHA is permanent fixed affordable rental housing and cannot be put to other uses without the approval of the City Commission.
Need
Peterson Acres is being expanded to meet the affordable housing needs of the growing low income elderly population. Unlike young adults whose typical goal is to own a home of their own, the elderly population typically leaves their home as they age and begin to have difficulty carrying out activities of daily living. In addition this population, which was often middle income when younger, typically becomes low income when they go on a fixed income. Thus what a community faces with its elderly is a reverse in economic status as elderly who were middle income homeowners become and join the ranks of low income renters. Forty percent (40%) of the 120 residents presently living at Babcock Place, the city’s low income high rise for the elderly, were homeowners just prior to moving into Babcock Place.
Based on the 2000 census, 15.5 percent of the city’s population is age 62 and older. The average retirement income was $17,724, below the $18,050 poverty level for a family of one in 2000. Today the poverty level for a family of one in Douglas County is $21,750. For a family of two it is $24,900. The elderly are the fastest growing segment of the US population according to census reports. As the population grows the need for affordable rental housing grows.
Peterson Acres Expansion Project
The proposed expansion project calls for the construction of 9 two-bedroom units at an estimated cost of $878,000. The funding plan calls for a combination of sources including a Federal Home Loan Bank grant and agency reserves. The Housing Trust fund award is important in helping the LDCHA leverage this grant and other sources of funding.
Thank you.
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