MHP Executive Director Anne Mavity attended (listened in) to the MN Housing Board meeting on March 26th. These notes reflect the conversations at the meeting as Anne heard them, including how the agency is responding to COVID19.
Commissioner Jennifer Ho: Want to go through our regular agenda, regular work. Demonstrate that we continue to work, to operate, to advance affordable housing.
Two Action Items:
1 - RRDL - 21 projects approved for funding for a total of 544 units, with a total of $9.6 million. 15 are recommended for approval; 6 were recommended for approval with furthering processing to reflect that there were a number of underwriting issues
2 - Workforce Housing Development Program was approved.
Five projects approved for 129 units, and $20.5 million. Projects located in : Blue Earth, Long Prairie, Park Rapids, Redwood Falls, Watkins.
In sum, today’s MN Housing Board action funded 26 projects comprising 673 units - just approved, shows that we are keeping MN Housing running and doing our core mission.
We’ve been in emergency response mode for two weeks. What does it mean for staff, business, and partners. And what does it mean for us as finance agency
- Cathy ten Broeke and her team at Office to End and Prevent Homelessness working hard. Learned that despite our emergency preparedness, there is not a good connection between health systems and people who are homeless. That has been our number one urgent concern, because we understand that people who are homeless have chronic conditions, don’t have access to sanitary conditions and hygiene, shelters are not equipped for physical distancing. People who work in homeless emergency response are courageous, brave, our heroes. It has put public health questions at the very very front.
- 2014 EO - it keeps people stably housed during an emergency period. It suspends eviction activities during peacetime emergency. It also asks, but doesn’t demand, private lenders to do the same in terms of foreclosure. We are asking that folks not be evicted from their homes. And we know that people are gone
- 2020 EO - Stay at Home. So for MN Housing, making efforts to keep people out of the office. Goal is to slow down impact enough to have our health system response catch up. And those involved in providing and maintaining housing and developing and financing housing are exempted essential workers. Trying to work with shelters to expand capacity, to eliminate “sweeps” of encampments, trying to prove options for isolation and quarantine.
We are worried about the housing welfare of ALL minnesotans, and between economic impacts, whether a slow down in home sales, empty units being rented, whether people will be able to pay their rent and mortgages, and how it impacts foreclosures, etc
We’re not having the most productive conversations with Senate/legislature , so we’re focusing on the most immediate pressing needs.
I’m optimistic that the emergency needs of shelters will be attended to, and I’m optimistic that we will see the Governor make additional requests at such time that we will have actual facts on the ground to understand what we’re seeing.
Huge infusions in the CDBG and ESG federally that will be helpful.
The most important thing to convey: unlike a govt shutdown, is that we are 100% business as usual, even with a 98% workforce. But we’re doing it dramatically different. What’s significantly different: we’re not sending staff into properties to do inspections, etc. but we will process these approvals, James has been doing closings, etc. Tons of activity happening on the homeownership side. We are the last state to close a bond deal. This is not “partial shut down mode” , it’s a continuity of business as usual.
Rachel Robinson - business impacts - what the work of MN housing will look like in the months ahead.
1- this crisis started in March and it’s still March. In the world of real estate, (monthly payments, quarterly reports, ect ) we haven’t seen April 1 payments, so we haven’t seen an impact, bc it’s still march. A group of leadership is starting to talk about the evolution of this crisis.
1) Timelines, things are due State level , and federal level 9e..g, LIHTC. Our RFP starts next week and goes into June. We are looking at these timelines to see what we can control, and what happens at the Federal level, to both keep us on track, but also pay attention to timelines realities.
2) Income shock: seeing good research to look at “who are the low incomes workers, where do they live, who are most impacted by loss of jobs, etc”. We understand homeowners are also impacted and it's early to understand how they might be supported by federal supports. It’s important, we have our eye on this, but it’s hard to know what it all means yet. But if we look at a housing system where people cannot pay their rents, we understand we are an important part of figuring this out.
We need to figure out what recovery looks like. We’re looking at leading indicators, e.g., construction industry - how are they reacting. We’re still closing deals, construction is happening. In the world of multifamily, LIHTC depends on a healthy financial sector, because investors need to trust profitability. We’re looking at our own portfolio, and much of it has PBA and is not at risk, but much of it doesn’t have that. We’ll look at the performance of the loans we have.
Financial markets matter to our work. Big picture, we have to look back to our plan, housing is a long term, and we’re taking that approach.
Kevin Carpenter - CFO - how has the bank part of MN Housing weathered the last two weeks of financial market destruction, and what does it mean for short and long term.
On Tuesday March 10th, when we had our finance team members (underwriters, trustees, lawyers) we sold $45 M in bonds. It was unusual, and ended up selling them all to one investor (cuz only one showed up with a reasonable price). The next day, other HFAs tried to sell bonds and there were NO investors and they could not sell their bonds. But then having sold the bonds, we had to close on that financing, when the whole team members are now working from home, across the country, and the exchange of information and documents was hard, but this past Tuesday we did close on that financing. So we weathered those markets.
On a long term basis, we’ll watch how the pace of new production and amount of new production is happening. Fewer are anticipated, but in any case it will likely take longer to get those assets to our portfolio.
Jennifer Ho - Governor hopes that this 2 week extreme shutdown helps health care catch up, so that we can return to something in a couple weeks to keep the economy moving forward.
if you looked at our financial condition on June 2009 v. June 2019 , today we are stronger and more flexible, which means we have choices in how we can play and work in this sector.
Question: Stephanie cited MHP-led letter on FHPAP on rental assistance: does the commissioner and staff have the flexibility to make the kinds of changes to this program to answer the needs of how to quickly deploy RA. Since the MN Housing Board acted last week to give the Commissioner broad authority. How do we get more RA out the door?
1- Our conversation with the legislation / Sen Republicans has not gone well, regarding rental assistance resources. I would be cautious about taking more actions to give the commissioner more waiver authority now… so let’s balance what the agency can technically do, what are the commissioner's and gov’s legal authorities, but the one thing we cannot do is appropriate funds. Ryan Baumtrog added: we’re in constant communication with advocates and practitioners and it’s informing our conversations with gov’s office and house and senate members. There is a desire to do something at some point, but not just now. They are voting today on what they agree upon, but not on areas of non-agreement. Those conversations will continue and we expect legislature to come back at some point, and so we’ll continue to work with them and get more information on the impact.
2 - Tom Ohern - legal angle. The authorities to the Commissioner are pretty broad already, and if we need more, we’ll come back to the Board to allow for more.
Jennifer - I think we are good in terms of needed authority. But we’ll let you know if we stumble into those. Emergency board meeting last week.
Board chair Kramer - the Board is here as you need us to act quickly as needed.
Jennifer noted that in her conversation with Lt Governor, she felt that the EO on evictions gave the community comfort in a moment of anxiety.