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New Housing Policy Proposed

Questions raised about money management

A lot of people spent a lot of time hammering out the city's proposed affordable housing policy. But in the midst of figuring out what should be built where and how $40 million in bond money should be spent, a critical detail was left undecided. That detail is who, if anyone, should be ultimately responsible for whose hands that money ends up in and how it gets there. Given Charlotte's recent track record in this department, that's a critical question.

Over the last four years, hundreds of thousands -- it could turn out to be millions -- of federal, state and local dollars have been misspent, mismanaged, misplaced and otherwise misappropriated by quasi-independent boards of political appointees charged with improving the Charlotte's low income areas through taxpayer funded business development and low-income housing initiatives.

So it was surprising that the city's new housing policy would include a recommendation that at least $40 million in affordable housing funds, and any additional grants and private funds, be overseen by what appears to be ... a quasi-independent board of political appointees appointed by city council.

Though the housing policy still has to be fleshed out by council, this particular part of it worries some folks.

"The problem is that $40 million is a honey pot, and honey pots draw a long line of people," said City Council Member Don Lochman. "It will be a challenge to make sure we have competent people dispersing it. It's going to take people who are deeply concerned about the potential ramifications of all this money being around."

In his first two years on council, Lochman was one of a few council members to challenge the structure of similar boards and bodies responsible for large sums of mostly federal money passed through to them by the Charlotte City Council. The details may be different from case to case, but the pattern seems always the same. When the money runs out or disappears, board members scatter and there is no one ultimately responsible for financial disasters like the one that led to an FBI investigation of the Northwest Enterprise Community after $100,000 of the $404,000 in federal money entrusted to the volunteer-run organization went unaccounted for. It was supposed to fund job training programs and jump-start businesses in struggling neighborhoods around the inner city.

Reid Park Community Development Corporation, a non-profit organization designed to improve life in downtrodden parts of West Charlotte, was supposed to oversee federal funds for housing rehabilitation and construction projects. Last June, the council approved a $970,000 revolving loan plan to bail Reid Park out of a financial calamity involving the rehabilitation of the 16-unit project. The organization failed to make payments on a 203K HUD loan, ran out of money, and nearly lost the partially completed units to foreclosure. City audits show the privately run organization spent an average of $109,000 apiece on 12 units it was building or rehabilitating, far more than it could have sold them for -- and without managing to finish them.

In addition, a $313,000 revolving city loan and another outstanding city loan for $60,400 on an individual house went down the drain.

The possibility that affordable housing funds could meet a similar fate concerns many who have put their time and energy into making housing more affordable in Charlotte.

Housing Team Implementation Chairperson Velva Woollen led a committee charged with recommending to council how an affordable housing policy should work.

"We had assumed that we (the committee) would be called back in to handle some of these things," said Woollen, a dedicated low-income housing advocate. "We didn't have time nor did we dig into these issues."

Woollen said the issue of accountability is one that concerns her.

"If we blow it this time, there won't be another time for bond money for this situation," said Woollen. "For me, accountability comes when there is a process in place that has control points. It can't be an autonomous body."

Exactly how much autonomy the seven-member Housing Trust Fund board would have wasn't included in the presentation council saw two weeks ago. According data in a slide show presented to council, the board would "develop administrative policies and oversee fund operations."

Questions remain: If board members are unpaid volunteers, as most of the members are on these types of boards, can they be trusted to take full or even partial responsibility for how the money is managed? Should they have the authority to make decisions about which projects it will be used to fund and who is responsible for managing those projects?

Judy Jeffries, who also sat on the implementation committee, has become familiar with the highly political nature of zoning and housing politics over the last year since she joined 16 of her neighbors in a suit against the city after a controversial zoning decision.

Jeffries echoes Woollen's concerns, but with a more jaded cynicism about oversight of affordable housing resources.

"How do you keep it from being set up politically?" said Jeffries. "Just like everything else, who polices this stuff? Who polices the board?"

As head of the Enterprise Foundation, housing implementation team member Ike Heard has personally spent part of the last year helping the city straighten out the mess created by the Reid Park CDC. Heard agrees that putting systematic controls in place to guard the funds is important.

"Someone has to do due diligence evaluations, and the question is who is responsible," said Heard. "The council has to be the responsible body there."

But Heard also said potential critics of the policy need to give the city a chance to flesh out the city's new housing policy.

"The city staff will have to smoke it over and give a recommendation to city council," said Heard. *

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