Board Challenge

The CMCA board met last night and had some excellent discussion. Thanks to all who attended. The general theme for the evening revolved around our housing responsibilities, most of which fall under our first and third strategic commitments. 1. Engage the community to assure that all people have their basic needs met; and 3. Build community capacity to enhance economic and community assets. Some of the board members expressed some concern over our involvement in tax credit development deals. In a nutshell, the state of Missouri created the Missouri Housing Development Commission to support the development of affordable housing throughout the state. Developers apply for tax credits to fund their development, they sell those credits to syndicators (investors) that turn the credits into cash for the building project. The developers are required to have non-profit partners to keep the playing field level. That's where we come in. As non-profit partner we generally get some small portion of the developer fee (the profit from the development) and have the responsibility of certifying that the new development makes apartment units available to tenants with low-income and that rents constitute less than 30% of their household income. Generally there is a sense that developers are getting rich by taking advantage of these arrangements and that not enough of the tax credit dollars actually make it into the project itself. A couple of things come to mind when I hear that. First, without this arrangement I do not believe that we would see the development or rehabilitation of quality affordable housing in Missouri. If a developer can't make a profit, why would they do it? Also, the developers are the ones taking the risk. Their entire profit comes immediately after the completion of the building phase. Apartment rents are kept so low that there is little or no profit to be made managing them over the life of the structure, unlike market rate developments where the rent provides ongoing profit. Most importantly, the conclusion I have come to (and more importantly, that the board has endorsed), is that as a non-profit with commitments to provide affordable housing, WE should be in the driver's seat on these developments. If CMCA acts as the developer, the "profit" goes back into our programs and services to serve our communities even better. That leads me to the challenge the board presented last night. One of our directors attended the Community Action Capitol Development Enterprise conference with two of our staff and came back fired up about new opportunities and thinking outside of the box. She challenged us to follow through on our Transformation Plan (more to come on that) by generating revenue for the agency in all new ways. Federal funding for our programs has been stagnant or declining for years and we have to think differently about our revenue options if we take our mission seriously. I heard that message loud and clear and am excited to continue moving our organization in that direction.