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Centre County Affordable Housing Needs Assessment: A Blueprint for Action -94- Anecdotal Data Priority Populations Several populations are consistently identified as struggling to find affordable housing. These include established working families of moderate to low income, elderly households, very-low income households, single-parent families of moderate to low income and persons who are homeless or have other special needs. These residents require a wide range of housing types. A major need identified is for work force housing for those working in Centre County, especially in the Centre Region and in particular, in State College Borough where there is the largest concentration of employment opportunities. Many workers, both those in entry level professional jobs and those working in lower wage service sector jobs are currently living far from their employment, often in a different county because of the shortage of nearby affordable housing. This includes first-time homebuyers who must postpone homeownership or live far from employment because of the high cost of purchasing a home close to work. Single-parents face special difficulties related to the distance between work and home due to the need for day care and other logistical concerns. Other Boroughs also report tight housing markets for lower-income families. Finally, there is concern that the quality of available housing for lower income working families is poor. Increased elderly housing is another identified need. These units are built specifically for the requirements of aging residents. Both assisted living and housing targeted to mobile, more active elderly residents are needed. There has already been some growth in elderly housing in Centre County, which is reported to be a popular place for retirement, suggesting a need for continued growth in this segment of the housing market. In addition to new housing for the elderly, there is also a need to address the many elderly households who prefer to “age in place.” Rather than move to another home or to an institutional setting, “frail” elderly who need assistance in bathing, dressing, shopping, meal preparation and other activities of daily living need access to affordable services in their homes. Lower-income households and families also need affordable rental housing. While there is a good deal of rental housing available for the transient student population, other very-low income households reportedly struggle to find housing. Additional rental subsidies are needed to make rental housing affordable to very low-income households. This is especially important for people employed in lower paying service jobs, those transitioning out of homelessness or fleeing domestic violence, those who have or are at risk of losing their mobile homes, and persons with disabilities. The majority of available rental subsides are through the Housing Choice Vouchers Program (formerly known as Section However the waiting listing for these vouchers had been closed for a year prior to opening on March 7, 2005. The waiting list remained open for 9 days during which time 380 households applied for Housing Choice Vouchers. ---PAGE BREAK--- Centre County Affordable Housing Needs Assessment: A Blueprint for Action -95- Some low and moderate-income residents in rural parts of the county are able to find housing, but this housing is reported to often be in disrepair. Subsidized home repair programs need to be available to assist these households. In areas where housing is more expensive, for example Bellefonte Borough and State College Borough, affordable housing for very-low income households is difficult, if not impossible, to locate. There is a perception that more moderate-income households tend to crowd-out very-low income households from available subsidized housing. Furthermore, housing built with low-income tax credits does not serve the lower-low income populations without an additional subsidy. Those who work with people with disabilities noted the need for not only affordable housing but also accessible housing. Finally, there is a need to increase supportive housing opportunities for the homeless, survivors of domestic violence, youth aging out of foster care, and people with serious mental illness/co-occurring disorders, including inmates re-entering the community from county jail and state prisons. Housing Models As described above, preferred housing types and models vary with the population being served. Following are some suggested models that would address the needs identified: Elderly households need access to loans and grants for rehabilitation and home modifications as well as affordable rental units. A small percentage of well elderly might be interested in “shared housing” or housing in which each individual has his/her own private space and shares common living areas with housemates. Information on shared housing is included in the Technical Supplement. As stated above, as retiree’s age, the need for affordable assisted living options will become an increasing need, and funding for services will become a significant challenge. Home ownership is the most popular housing model for most working families. This includes single-family detached homes as well as attached homes or townhouses. It may also include a range of ownership options such as fee simple, condominium or housing cooperatives, as well as a range of financing options such as lease purchase. Due to the affordability gap, creating homeownership opportunities will require a number of strategies as recommended below. Some working families prefer rental housing, which can be in single family or multi- family structures, publicly or privately owned. Clearly rents will need to be subsidized through federal or other subsidies. Lower income households and populations with special needs need affordable, accessible transitional and permanent housing in a range of housing types including Single Room Occupancy, shared housing, apartments and homes. They also need appropriate supports that can be accessed in their homes. ---PAGE BREAK--- Centre County Affordable Housing Needs Assessment: A Blueprint for Action -96- Community and Opportunities Centre County has a wealth of and resources that can be harnessed to address affordable housing: QUALITY OF LIFE Centre County is perceived as a desirable place to live, with a good quality of life. It is a beautiful area with historical significance. State University (PSU) and its educational, cultural and athletic resources is a strong draw for younger families as well as recent retirees. The University also serves as a resource for skilled professionals who can participate in the economic development of the region. The low crime rate, low foreclosure rate and good school systems, especially in the Centre Region, are also perceived as major assets. POLITICAL SUPPORT AND HUMAN CAPITAL There is a strong sense among the community that the timing is optimal for addressing the affordable housing needs in Centre County. This is evidenced by the current interest and support of the County Commissioners, the maturing of the Affordable Housing Coalition, and the highlighting of the issue by the Centre Daily Times. In addition, the funding of the Affordable Housing Needs Assessment indicates the willingness of the Commissioners to consider changes necessary to effectively expand affordable housing. The interest is supported by strong human capital. A number of key stakeholders noted the strength of the County, Borough and Region Planning Offices in housing and community development planning, and in particular, the recent leadership by the County Planning Office in filling the role of “field general” for the Affordable Housing Coalition. A strong corps of volunteers was also cited as a source of human capital. COLLABORATION AND INSTITUTIONAL SUPPORT The second major strength is that people are willing to communicate and work on addressing the issue of affordable housing. The Affordable Housing Coalition, which was initiated in 1996 and expanded last year to include realtors, developers and other private sector representatives, has gained the respect of the community and was the prime mover behind the Affordable Housing Needs Assessment. The Coalition has become an excellent model of collaboration around County housing issues. Along with the Council for Human Services, which has 90 representatives of human service agencies, the Coalition provides an opportunity for collaboration with and input by all key County housing and human agencies around affordable housing issues. On the operational level, the good relationship between the Centre County Housing Authority and the Centre County Department of Mental Health/Mental Retardation has resulted in expanding resources for mental health consumers. The Realtors Association has been active in promoting opportunities for alternative financing of housing and ---PAGE BREAK--- Centre County Affordable Housing Needs Assessment: A Blueprint for Action -97- finally, the police work closely with the health and building officials to identify and condemn unsafe housing, especially in State College Borough. ECONOMIC RESOURCES There is growth in employment in Centre County, including stable jobs, although many are in the lower wage service sector. An initial review of public funding for housing indicates that State College Borough is taking advantage of a number of available federal, state, and local housing dollars. In addition, Community Development Block Grant funds are used effectively in expanding the public infrastructure in selected areas of the county. Although substantial private resources are not devoted to housing and community development activities at the current time, one interviewee noted that there is a high level of charitable giving in the County. It was also noted that under the right circumstances some of these dollars might be redirected to affordable housing activities. For example, the United Way representative stated that it might be willing to move beyond the funding of individual housing programs and activities to a community impact model. Under this scenario, the United Way would provide funds to meet housing needs through a collaborative effort, including long term funding for housing staff and/or initiatives. There are a number of national and local banks serving Centre County, several of which operate programs for first time homebuyers. Lenders actively participate in Housing Finance Agency and Fannie Mae programs, two other major financial resources. A representative of Fannie Mae serves on the Affordable Housing Coalition and noted that they too stand ready to assist in carrying out strategies that emerge from the Needs Assessment. LAND, BUILDINGS AND INFRASTRUCTURE Centre County’s land use, especially in the Centre Region, is impacted by the location of the main campus of State University. There are currently 40,000 students matriculated in the University, with University housing provided for approximately 12,500. Eight hundred beds were recently added through Eastview Terrace. Despite the fact that the University has no plans to increase student enrollment in the near future, PSU grows at approximately 1% per year. The County currently has a mix of housing types, from SRO dwellings (Single Room Occupancy) to luxury apartments. The housing stock is generally attractive, especially in the older boroughs. There are a variety of opportunities for residential development in the County. There are a number of residential and non-residential structures in the County’s older boroughs that are vacant and could be rehabilitated and/or converted into affordable housing. As students and elderly move from older apartment buildings to newer ones with more amenities, these buildings too become a resource for affordable housing development. ---PAGE BREAK--- Centre County Affordable Housing Needs Assessment: A Blueprint for Action -98- There are also thousands of acres of vacant land, although many areas lack public sewer and water, and there are land speculators that control significant acreage. The public infrastructure in the County is growing, especially in the Centre Region. Economic development representatives cited as an asset the cooperation among municipalities in planning transit to support economic and housing development. In addition, there is good mass transit in the Centre Region. Most significantly, the construction of I99, which will run through the center of the County and link I80 to the PA Turnpike, will create additional opportunity for residential growth. Further, the new County prison being built between I99 and Bellefonte will create 90 new jobs. HOUSING DEVELOPMENT CAPACITY Centre County has a number of experienced for-profit housing developers. However its two most active affordable housing developers are not currently engaged in development. Calibre, Inc. is only managing their properties since “affordable housing is not as profitable as it used to be,” and S & A Homes is currently targeting other parts of the Commonwealth. Other for-profit developers that were mentioned by interviewees were: UNICO, Marvin Myers, Tom Songer, Jr., Granite Realty, Abruzzo, John Imbt, Fine Line Homes, Phil Jury, Michael Glass and the Vernon Development Group. Non-profit developers are an alternative to for-profit developers, especially for affordable housing development, since they are motivated by need rather than profit. In addition, nonprofit organizations provide better opportunity for long term affordability and control of housing, which is beneficial to lower income households. Although few interviewees named any nonprofit organizations when asked about experienced developers working in the county, there are a number of experienced non-profit organizations engaged in affordable housing in the County. These include Housing Transitions, Inc. /Temporary Housing Foundation (HT/THF), the Moshannon Valley Economic Development Partnership, the Centre County Women’s Resource Center, Centre County Youth Services Bureau’s Stepping Stone Transitional Living Program, State College Community Land Trust, SEDA COG, Tri-County Habitat for Humanity, the Central PA Development Corporation (an arm of the community action agency) and Centre Homes, Inc. (an arm of the Centre County Housing Authority). With the exception of HT/THF, which has partnered with S & A Homes to develop several apartment complexes, most of the nonprofit organizations have addressed a single population (i.e. the homeless, survivors of domestic violence or youth) or a single housing program (i.e. homeownership; acquisition, rehabilitation and resale; or the rehabilitation of owner-occupied housing). However several of the organizations interviewed expressed an interest in expanding their development activities: 1. The Community Land Trust is considering expansion outside of the Borough of State College; ---PAGE BREAK--- Centre County Affordable Housing Needs Assessment: A Blueprint for Action -99- 2. HT/THF would be willing to expand its activities outside of State College Borough if funding opportunities were available, and 3. The Central PA Development Corporation is willing to expand its activities to Penns Valley Community Weaknesses/Barriers/Challenges There are six major impediments to the planning and development of affordable housing in Centre County: PUBLIC AWARENESS/SUPPORT FOR AFFORDABLE HOUSING There was consensus among those interviewed that the Centre County public neither understands the need for affordable housing nor supports its expansion. This opposition is expressed in a number of ways, including through zoning practices and by opposition to specific affordable housing developments. Unfortunately the existence of several affordable housing projects that were poorly planned or poorly managed fuels this opposition. Other factors that contribute to the opposition include the perception that affordable housing brings crime to the community and that it produces no return for the cost of services provided. These factors not only suppress the planning of new projects, but also have resulted in local disapproval of at least one affordable housing project that had already received federal Low Income Housing Tax Credits. Since housing and land use decisions are controlled at the municipal level, this “NIMBYism” (Not in My Back Yard) is a major impediment to the expansion of affordable housing. Although the Centre County Board of Commissioners and the Affordable Housing Coalition were mentioned as supporters of affordable housing efforts, the lack of active participation by the University is seen as a significant barrier. The affordable housing issue could be elevated by the involvement of Penn State University since they are not only the major employer in the County, but also a potential source of educational and other resources. HOUSING MARKET CONDITIONS The data clearly indicates that affordability is the major housing need that must be addressed in Centre County. The cost of housing has increased much faster than the incomes of potential homebuyers and renters. This is caused by a number of factors, including the presence of Penn State. Thousands of students and white-collar families entering the housing market, which, along with low interest rates, has caused housing costs in the County to escalate. This has been exacerbated by the decreased income of local workers due to the loss of manufacturing jobs and the increase in lower wage service sector employment. The loss of low-income housing stock due to the closing of trailer parks and to the fire that destroyed Academy Apartments further exacerbates the situation. ---PAGE BREAK--- Centre County Affordable Housing Needs Assessment: A Blueprint for Action -100- There is a much higher percentage of rental housing in the Centre Region than in other communities in PA, which generally has a negative impact on the condition of the housing stock and neighborhoods. It was noted that there have been numerous apartment conversions, especially in Bellefonte Borough. It was also noted that the number of rental vacancies in the Centre Region has increased in recent months. It is surmised that these vacancies are due to people moving from older privately owned apartments in State College to newer apartments in outlying areas with parking and other amenities. It is also surmised that the vacant apartments are unsubsidized, since there is a two-year waiting list for Housing Choice Vouchers. A peculiar problem in the Centre Region rental market is that landlords require leases from August to August to coincide with the academic year. This is an impediment to households leasing under certain HUD programs such as Shelter Plus Care, which require 12-month leases. LAND, HOUSING STOCK AND INFRASTRUCTURE Issues related to affordable housing are different in the Centre Region than in other parts of the County. In the Centre Region the cost of land, buildings and site improvements is extremely high. The average housing cost in the Centre Region is $170,000- $180,000 compared to $120,000 outside the region. This is a major impediment, especially for potential first time homebuyers. While the housing is more affordable outside the Centre Region, the lack of public transportation means that the housing is not accessible to employment opportunities, which are concentrated inside the region. Vacant land is also more plentiful outside the Centre Region, but the lack of infrastructure impedes development, especially of affordable housing. Not only is there a lack of infrastructure, but also poor coordination of land use planning across municipal boundaries despite regional planning efforts. Finally, land speculators are purchasing and holding vacant land, especially parcels with multi-family zoning, which further escalates prices. Several interviewees mentioned that there is a lack of upkeep by absentee and negligent landlords in the older boroughs, and one person specifically cited poor management by Section 8 landlords. Coupled with the lack of code enforcement and the low volume of housing rehabilitation loans and grants, these practices have resulted in unsafe housing and the under-utilization of certain housing stock. HOUSING FUNCTIONS Although there are a number of agencies involved in housing in Centre County, there is no single entity or individual responsible for creating and implementing county housing policy. Nor is there anyone clearly responsible for identifying and brokering resources or for encouraging development partnerships, which are critical for implementing policy. ---PAGE BREAK--- Centre County Affordable Housing Needs Assessment: A Blueprint for Action -101- This vacuum was confirmed during the interviews of key stakeholders. When asked “Who in the County is responsible for housing policy, program development and implementation?” individuals interviewed either said that no one has primary responsibility, or they cited different agencies (the Housing Authority, the Centre Region Council of Governments (COG), the Office of Adult Services, the County or Borough Planning Offices), or they said that it is a collaborative effort through the Affordable Housing Coalition. When asked about the need for centralizing the county housing functions, interviewees expressed different opinions. Some felt centralization is desirable and others are comfortable with a collaborative entity. Regardless of whether the housing functions are centralized in a single entity or individual, however, there was agreement that there needs to be a single individual or entity responsible for leadership and coordination of housing functions. This was especially important to business, elected officials and community leaders. Most of those who felt the housing functions should be centralized say it should be on the county level. Several expressed the opinion that the lead agency should be a policy maker/planner rather than a development entity, so as not to compete with other developers. Some see the County Planning Office as possibly playing some of these roles. They were seen as doing a good job as lead of the Affordable Housing Coalition, which is clearly recognized and respected in its emergent role around housing issues. Others see the Planning Office as providing planning guidance and direction only, and the Affordable Housing Coalition playing a lead role in advising the Commissioners on housing matters. DEVELOPMENT CAPACITY At the present time there are no developers in Centre County devoted to the mission of creating affordable housing for working families. As stated above, there are several larger for-profit builders that have engaged in affordable housing development in the past. However, these developers are now finding the development of luxury housing both easier and more profitable. One reason it is more profitable is that Centre County is a non-union area, which means that they are exempt from paying prevailing wages, which are required under most government funded programs. Another effect of this exemption is the dearth of qualified subcontractors and suppliers to work on smaller affordable development projects. Although there are a number of nonprofit organizations involved in housing, they are generally single purpose, targeting specific populations and/or target areas, and few are involved in developing housing for working families, especially rental housing. In addition, few if any of the existing nonprofit organizations have the capital necessary to engage in the development of larger projects, since such projects require that the developer has sufficient predevelopment dollars to acquire land and buildings in a market with rapid turnover of properties. ---PAGE BREAK--- Centre County Affordable Housing Needs Assessment: A Blueprint for Action -102- HOUSING FINANCE Although the County is taking advantage of some available resources for the planning and development of affordable housing, there are a number of untapped and under- utilized resources, such as through the Department of Community and Economic Development (DCED) and the Housing Finance Agency (PHFA is poised to take over the state HOME and Access Grant Programs from DCED during the next fiscal year). In addition, for the past several years funds from the U.S. Department of Agriculture’s Rural Development Program have been underutilized, especially for the guaranteed sales program and 502 loans for homeownership. The County has also not taken advantage of the resources available through Fannie Mae.