Landlord Woes 

Boise re-examines affordable housing role

The City of Boise is looking to get out of the landlord business.

It comes as a surprise to many that the city owns and operates 277 rental units spread across 19 properties, providing homes for some of the area's lowest-income residents. But as properties age, and the need for substantial capital investments looms, the city is examining its options.

While the low rents help keep roofs over the heads of people who, on average, make less than 35 percent of the average median income, they also place severe restraints on what the city can do with the properties.

While Jim Birdsall, manager of Boise City Housing and Community Development, makes it clear that the operation is paying its basic bills—that's about all it can do.

"The revenue above expenses is narrow enough that it raises the question if we can put enough away for adequate replacement reserves and repairs," he said. "We need to clarify the picture, then look down the road," Birdsall said. "There's a smarter way to still meet the needs of folks in the community but do it in a more sustainable method."

As part of this clarification process, the city is in the middle of an appraisal process to learn the market value of all 19 properties. From there, the City Council will have to decide whether to reinvest in the project, or find a way to support housing, while letting someone else take the helm.

The properties were bought in the 1990s with the help of federal funds from Housing and Urban Development. The purchases came at a time when the local housing authority either wasn't able, or didn't want to deal with the problem, Birdsall said.

"At the time, the housing authority wasn't stepping up in accepting full responsibility," said Deanna Watson, executive director of Boise City/Ada County Housing Authority.

The city's move was originally lauded as visionary by other municipalities, but the reality of the situation has become a different matter.

"At national meetings and conferences, they're always very complimentary that the city stepped up and took the bull by the horns. It's a bold move; it won awards," Birdsall said. "Then comes the aging property and money. We're just trying to get out in front of it before there's a problem."

The two largest of the city's properties are former motels, which have been renovated into studio apartments with kitchenettes. The remaining properties are a mixture of smaller apartment complexes, duplexes and even a couple of single-family houses.

Tenants must go through an approval process to rent one of the units, including a criminal background check, although Birdsall admits the city has some of the most relaxed admission standards in the area.

"A lot of times, [tenants] are accepted where they couldn't get accepted elsewhere," he said.

The city must also follow HUD guidelines when it comes to income. Residents cannot make more than 80 percent of the area's median income. In practice, Birdsall said, most tenants make less than 35 percent of median income. While other agencies provide affordable housing across the valley, Birdsall said this is the only program in which the lowest income level is the primary focus.

"It's become our market niche, and it's kind of an important need in the community," he said. "If this resource wasn't available, I don't know what people's options would be."

Studio apartments rent from between $300 and $400 per month, and come furnished. Currently, the city has only a 2 percent vacancy rate, which Birdsall said illustrates the need for affordable rentals.

Birdsall believes the city has three options in dealing with the rental properties, the first of which is to do nothing and find a way to make it work.

The second option would be to invest considerable money and begin renovations on the existing properties. The final option would involve selling the properties on the open market, then reinvest the proceeds from those sales in a grant program in which the city would partner with existing housing organizations to build new affordable apartments. Those apartments would then be owned and managed by the partnering agency.

It's this option that's already getting interest from some of those potential partners.

"Our initial reaction is that we would be very open minded and potentially look favorably at any opportunity to partner with the city," Watson said. "The tradition is for the housing authority to provide, and the city to be more in a role of facilitating funding. We're very much in favor of stepping up and filling more of the traditional housing authority role."

The Housing Authority is already in the rental business, with 450 units spread across the state. The organization is not a state agency, although it is responsible for managing many HUD programs in Idaho.

Watson said she fully supports the city's desire to re-evaluate its housing structure. As it stands now, there are duplicated services between the agencies, she said. The city leaving the management and ownership side of housing may streamline the process.

"It would free the city to focus on getting the money out to different entities to do the work for the city," she said.

Watson also points to the problems that come with trying to retrofit a building for a purpose it wasn't designed for, like making apartments out of hotel rooms. "Retrofitting only goes so far," she said. "It's always easier to start over."

Beatrice Black, deputy director of Neighborhood Housing Services, said she sees this as an opportunity for the city to encourage development of two- and four-bedroom apartments, which are in higher demand than studio apartments. She said her organization would welcome the chance to partner with the city, using its experience to improve the system.

Neighborhood Housing Services currently owns and operates 380 rental units in Idaho, 300 of which are in the Treasure Valley. The agency serves the lowest income bracket (between 30 and 60 percent below median income) at a complex in Nampa, where three- to four-bedroom apartments rent for between $250 and $300, including utilities.

Black agrees that this level of affordable housing is in high demand. "There's a lot of pressure on the rental market right now, but not a lot of affordable," she said.

It's also a view Watson shares. "The need for the single-room occupancy is very much there," she said. "No one would want to see that go away, but we need to have the supportive services to go with it."

Birdsall presented the initial plan to the City Council several weeks ago to gauge the council's opinion.

"We needed some sort of indication of the comfort level that the direction we were going made sense to them," he said. "They seemed supportive of it."

No matter what the city ends up doing, Birdsall said the most important consideration is to make sure residents aren't left without a place to go.

"We don't want to turn anybody out on the street," he said.

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