City workers tap BRA housing program
UPDATE: One of the benefits of our new website, as well as our new media partnerships, is the ability to have timely updates on stories that appear in CommonWealth magazine. Case in point is our joint effort with the FOX Undercover investigative unit at WFXT-TV (Channel 25) on the behemoth that is the Boston Redevelopment Authority.
On Tuesday, FOX ran part 1 of their two-part series on the BRA focusing on city workers buying affordable housing units (the second part airs Wednesday night and a link will be available after it airs.) While CommonWealth went to print a month ago, we continued to work with FOX to get more information. Among the most interesting developments is that after BRA director John Palmieri intimated in a FOX interview he would release documents that related to how many city employees actually bought affordable units, his legal office sent FOX a bill for $47,000 – not a typo – for documents he admitted should probably be public records.
The BRA sent out a preemptive-strike press release before CommonWealth was released and Fox Undercover went on the air. Not much different from their responses in our stories.
We’re also continuing to work without the BRA’s help on identifying more affordable housing developments where city workers have bought a disproportionate share of the units. Keep checking in and if you have any information you’d like to share, contact firstname.lastname@example.org or call FOX’s tip line at 1-800-TVFOX25 or go to the Undercover website.
Bowdoin Place, with its red brick and concrete façade and dark wood trim, sits in understated elegance at the back of Beacon Hill in the shadow of the State House. Some condominiums there are assessed for more than $1 million, and two-bedroom, two-bath apartments rent for $5,000 a month.
But not everyone who lives there is wealthy. Like all residential developments built in the city since 2000, Bowdoin Place was required to set aside a percentage of its units as affordable housing under an executive order issued by Mayor Thomas Menino and administered by the Boston Redevelopment Authority. The goal was to make room — even in luxury-residence buildings — for middle income and upper middle income Bostonians who couldn’t otherwise buy into the American dream. At Bowdoin Place, that meant 19 condos that normally would sell for $500,000 to $750,000 went for less than half that amount through a lottery open to anyone who met the BRA’s income guidelines.
Overall, 10.7 percent of the 421 affordable housing units created for ownership under Menino’s mandate went to city workers and another 4 percent went to relatives of city workers, according to city payroll and county deed records. The percentage may be higher, but precise numbers are difficult to verify.
What’s unclear is whether city workers are getting a disproportionate share of the BRA’s affordable housing units. Full- and part-time city workers represent 6.8 percent of the Boston–based workforce and less than 3 percent of the city’s overall population. Yet the group of people who would qualify for the BRA program is a far smaller, hard-to-quantify subset of both groups, defined by income and housing needs.
Samuel Tyler, president of the Boston Municipal Research Bureau, said he was surprised by the number of city workers tapping into the affordable housing program. “What we should do is take a look at procedures, what are they doing to advertise? Or is it city employees get an advantage?” he asked.
BRA officials say no one is getting a leg up, that city workers are treated the same as everyone else. The officials note that the city is a major employer in Boston and most of its workers are required to live in the city, giving them a strong incentive to put up with the paperwork and resale restrictions associated with living in affordable housing.
Sheila Dillon, the BRA’s deputy director for housing, says city employees for the most part are simply “working stiffs” just trying to find a home they can afford like everyone else. “I’ve never heard or seen any kind of pattern that makes me think anything underhanded is going on,” Dillon says.
Victoria Williams, director of the city’s Office of Civil Rights, whose Fair Housing Commission is tasked with monitoring the marketing plans and lotteries for the BRA’s affordable units, said no favoritism is shown to city workers, but neither can they be excluded from applying for the units if they qualify in every other way.
“Our goal here is to ensure that housing developments are affirmatively marketed to allow us to have the broadest housing program possible,” she says.
As he entered his second full term in 2000, Menino and his administration were under fire for the flight of young professionals from the city, mostly because of the high cost of housing. To address the problem, Menino signed an executive order adopting “inclusionary zoning,” a program that had worked well in other cities. In exchange for allowing developers to construct lucrative market-rate units, the city would require that a percentage of those units be made available at a reduced cost to people who earned too much money to qualify for traditional affordable housing programs but were unable to purchase units going for a half-million dollars and more.
“We hear all the time, ‘You do too much for low income and not enough for middle class,’” Dillon says.
The city’s main affordable housing programs rely on federal or state money and, as a result, are required to target people earning 80 percent or less of the median household income in the area. The BRA initiative, by contrast, uses no government funding and is free to target those earning between 80 percent and 100 percent of the median, or between $72,150 and $90,200 for a family of four. Until 2007, the BRA also made units available to households earning 120 percent of the median household income and, in one instance at an upscale South Boston development, 150 percent of the median income.
Many cities around the country have created some affordable housing exclusively for municipal workers, but Dillon said Boston officials decided against that, fearing criticism. As a result, the program is open to anyone who meets the income guidelines and agrees to a handful of resale restrictions. Those restrictions include a cap on the resale price if a unit is sold and a requirement that the unit be sold to another income-qualified buyer, a provision the city had trouble enforcing in the past. (In 1999, Menino forced the resignation of then–BRA director Thomas N. O’Brien because O’Brien’s chief of staff purchased an affordable housing unit on the Charlestown waterfront even though he didn’t meet the income requirements.)
Under the BRA’s inclusionary development program, developers are given three options. They can set aside 13.5 percent of their units as affordable, build a slightly higher number of affordable units off-site, or buy their way out of the mandate. The buy-out option lets developers either pay $200,000 to the BRA’s Inclusionary Development Fund for each affordable unit they don’t build or one-half of the difference between an affordable unit and a similar market-rate unit, whichever is higher. The BRA’s Inclusionary Development Fund, which has collected $25 million so far and is still owed another $10 million, has invested $19 million in affordable housing projects around the city targeted at low- and moderate-income households.
Now in its 10th year of operation, the mayor’s inclusionary development program has created more than 800 units of affordable housing — 421 condominiums and the rest rental units.
According to Business and Professional People for the Public Interest, a Chicago–based public policy group which analyzes affordable housing programs, Boston’s production of inclusionary units lags behind other communities.
Prior to the recent housing market slump, Boston’s program was creating about 121 units per year, roughly one unit per 4,300 residents. By contrast, Denver, which adopted a similar program in 2002, has created nearly 10 times as many units per year, one for every 481 residents. Sacramento, California, which started its program the same year as Boston, has created 150 units per year, one for every 2,600 residents.
“This is testimony to just how damned hard it is to build affordable housing in Boston,” says Barry Bluestone of Northeastern University’s Dukakis Center for Urban and Regional Planning.
Matters of ethics
Most city workers who buy or rent an affordable housing unit under the BRA’s Inclusionary Development Program file an ethics statement with the city clerk’s office, an acknowledgment that their purchase could be perceived as a conflict of interest. The practice began in 2003, when Alexa K. Pinard, then a planner with the city’s environmental department and now an urban designer at the BRA, sought an opinion from the state Ethics Commission on what and how much she needed to disclose after being certified to buy an affordable unit in the Charlestown Navy Yard.
Ethics officials’ advice was that a reasonable person could perceive the purchase as a conflict — a city worker certified by a quasi-public agency for a public benefit — and said filing a disclosure would dispel that potential conflict. BRA officials subsequently advised all city workers to file the disclosures if they or certain family members became eligible for the affordable housing.
I came across the ethics disclosures in researching another story and was intrigued enough to come back and look through them more closely. I discovered that 78 city workers had filed disclosures indicating they or a family member intended to purchase an affordable unit after having been certified by the BRA as middle- or upper-middle-income. Another 10 filed disclosures indicating they planned to rent BRA-controlled units.
Surprised by the relatively high number, I began reviewing thousands of deeds, certificates, and affidavits on file at the Suffolk County Registry of Deeds to see whether all those who filed disclosures purchased an affordable unit and whether purchases were made by city employees who didn’t file disclosures. (Rentals were impossible to verify because no public record of a renter exists.) I created a database of apparent city workers and family members using city payroll records, probate and civil court records, state records, newspaper clips, phone records, and social networking sites. Fox 25’s Undercover investigative team, which collaborated with CommonWealth on this story, also ran scores of names through databases available to them. The names were then sent for verification to the BRA, which had never tracked the participation of city workers in its program, even though the agency requires applicants to disclose whether they or an immediate family member work for the city.
BRA officials agreed that 39 city workers and 15 relatives of city workers owned affordable housing units in the inclusionary program. I added eight others to the total — six city workers who bought an affordable unit and filed an ethics disclosure about their purchase and two daughters of city workers who I was able to identify through various records. BRA officials didn’t dispute the eight names but said they couldn’t verify their accuracy.
Another 12 owners were in dispute. They included nine people I identified as city workers and three I identified as relatives of employees. BRA officials said they could not confirm that five of the 12 were city employees or that three were relatives of city employees. They said the four others were not actually city employees at the time of purchase, even though two of them checked on their housing applications that they were city employees within the last 12 months.
One of the two who identified themselves as a city worker was Kristin Langone, a former City Council chief of staff. She purchased a unit on the top floor of Carlton Wharf in East Boston overlooking the harbor. She filed a conflict-of-interest disclosure a month before her purchase identifying herself as a municipal employee, but BRA officials say she was not on the payroll at the time of the closing.
Another 29 city employees were certified as income-eligible for affordable housing by the BRA but ended up purchasing a unit through another city housing program.
City workers are also not the only public employees buying the affordable units. At Carlton Wharf, Rebecca E. Frawley, the director of the HOME program, which oversees affordable housing in the state Department of Housing and Community Development, purchased a condo on the sixth floor in 2005 for $230,500. Frawley, one of three state workers who own units in the building, declined comment.
Just the right demographic?
The city workers buying the affordable housing units hail from a wide variety of departments. Firefighters, police, and teachers are represented, as are a deputy corporation counsel, aides to the mayor, a city gravedigger, and employees from the Boston Water and Sewer Commission.
Most of the affordable housing units they occupy are in the desirable waterfront neighborhoods of Charlestown, East Boston, and South Boston, rather than in inner-city areas such as Roxbury and Mattapan. Developers, according to officials and housing advocates, want the biggest bang for their market-rate bucks, and that is more likely to come from the higher-income neighborhoods, rather than the low-income zip codes.
Scores of calls were made to the condo owners, as many as five to some of the buyers, but only two returned calls and neither wanted to be identified.
Some of the buyers had familiar last names. Michael M. Kineavy, a cousin of Michael J. Kineavy, the mayor’s chief of policy and planning, purchased an affordable unit on Commercial Street in the North End. Michael M. Kineavy’s sister is Joanne M. Flowers, a BRA administrative assistant.
The concentration of city workers at the Reserve Channel Condominiums at West 1st Street in South Boston was unusually high. Of the 26 affordable condos there that sold for nearly $100,000 less than comparable market-rate units, 11 were purchased by city workers or their family members. Two units were purchased by couples where both spouses or partners are on the city payroll.
Many affordable housing lotteries attracted 100 to 200 applicants. At the Reserve Channel condos, for instance, 140 people who were income-eligible filled out lottery applications for the 26 units. One Boston firefighter,
who did not want to be identified, said he was initially told he was number 90 on the list. A year later he said he received a call telling him a unit was available if he was still interested.
But the lotteries didn’t always yield enough buyers for some units, so they were sold on a first-come-first-serve basis. For example, Tyson Tran, an aide working in Menino’s public information office, bought the first of four available affordable units in 2007 at 4040 Washington Street. Tran did not respond to numerous requests for comment.
Ronald J. Gillis Jr., whose company developed and marketed the 28-unit complex at Washington Street and Whipple Avenue, a short walk from Roslindale Square and Forest Hills T station, said not enough people applied for the lottery. He said he was unaware that the first affordable unit buyer was a city worker.Joe Kriesberg, executive director of the Massachusetts Association of Community Development Corporations, which did a review of Boston’s inclusionary development program in 2006, was surprised when told about the number of city workers in the program. As he talked about the number, however, he said he didn’t think city workers were receiving special treatment. From his knowledge of affordable housing programs and who could afford to buy the units and then pay the mortgage and condo fees, Kriesberg said city workers were probably just the right demographic for the city’s inclusionary development program.
“Municipal workers aren’t poor, they’re not likely to be in rundown tenements, but they certainly can’t compete at the high end of the market,” Kriesberg says. “From an income standpoint, they’re really right in the sweet spot for this type of product.”