The City of Kingston is considering a new public-development model to add housing stock, Rokosz Most interviews city director of housing initiatives Bartek Starodaj about the model.
Rokosz Most: I understand that we’re not supposed to call this public housing…
Bartek Starodaj: The public housing model of the past is based on building housing for a particular income band. This model is all about mixed-income households living together.
RM: So how does it work?
BS: You have a revolving loan fund established by a public agency. In this case, this agency is going to be a new non-profit under the city. That non-profit makes a construction loan to a project. Pair that construction loan with other low-cost debt and a tax abatement.
Basically, from a financial perspective, that allows the project to move forward. When construction is done, the contribution from that revolving loan fund gets returned back to the non-profit, which can then invest in another project.
RM: So the non-profit, is it a 501c3?
BS: That is currently envisioned, yeah.
RM: Is that considered an affiliate or discrete component of the city, or it’s not an official department of the city?
BS: It’s not an official department of the city. The right way to think of it is as an arm or a tool of the city. There’ll be a connection to the city in some of the governance and ongoing operations.
RM: Where’s the money coming from to finance the initial infusion?
BS: To be determined. Other communities have bonded for it. In some communities they have basically taken their entire allocation of ARPA funding like they did in Chattanooga to fund the revolving fund.
RM: Is this going to be put together and then brought before the legislature or the common council to have them vote on it?
BS: Technically, the common council doesn’t necessarily need to authorize the creation of the non-profit. However, I will be asking them to pass, essentially, a memorializing resolution in support of the model and creation of the non-profit. I believe I will be doing that this month.
The formal role of the common council is going to be to set a tax abatement schedule for projects that are proposed under this model. That’s something that they will need to authorize.
RM: Tax abatement schedule. Is that how payments-in-lieu-of-taxes work?
BS: Exactly. And that’s another essential ingredient to make these projects work.
RM: I think a lot of people are coming back around to seeing if you need housing, you’re going to have to give people tax breaks.
BS: Yeah, that’s right. Especially housing that includes deeply affordable units that are permanent. You need a tax abatement schedule to make a project like that.
RM: Am I right in seeing this like partnering with Family Woodstock or Rupco. Will this non-profit be doing the same job where you get the private developer who’s at 49 percent ownership, and the majority ownership is still the non-profit to get the financing? It’s using the private-public model?
BS: That’s right. But it doesn’t necessarily need to be a private developer that the non-profit’s working with. It could be a non-profit as well.
RM: Double the non-profit.
BS: Double the non-profit.
RM: Do we know how much we’re looking to start with, seed money?
BS: My goal would be to raise about $12 million, which would support up to potentially 200 units in the first round of funding. This public entity isn’t going to be involved in the management of any project. It will be basically like the title owner of any individual project. And so it will be able to dictate the terms, make sure that any affordability requirements are being followed. Public ownership is an important piece, but we’re not managing the property on a day-to-day basis.
RM: Is this being aimed at the 200-unit eminent domain, mixed-use housing development the mayor supports down there in the Strand?
BS: Obviously, the Garraghan Drive property is a great place for housing. I think we would be looking at all of the property that the city has that’s underutilized. It’s just a matter of timing and how things align. I think the 200 units would probably be spread out over one to two projects.
RM: Since you’ve been looking into this model, was there specifically a project that had impressed you the most?
BS: This model was first started by the Housing Opportunities Commission in Montgomery County, Delaware. The first project is called The Laureate and there’s a New York Times article about it.
It was a stalled market-rate project that they took that needed financing help. And so they kind of basically took it over via this public-private partnership. And it’s affordable housing, but it looks like market-rate housing. Tons of amenities. There’s a pool.
RM: I understand there was a request for interest issued. How did that go?
BS: It was published at the end of last year. We publicized it. We received six responses to that request for information, which I think indicates a good level of interest among potential partners in working on this model that included a mix of non-profit and private developers.
There wasn’t a specific opportunity or specific site attached to that. “We’re just looking to see if you’re interested. And if so, what are your questions? What would be your concerns?”
RM: So what’s the timeline looking for trying to make this a reality?
BS: The non-profit, I expect, would be established and up and running sometime this summer. And I think then it’s just a matter of funding the revolving fund.
Join the family! 
