Archive for the ‘News’ Category.

HUD Cuts REAC Inspection Notice Times

14-day advance notice designed to encourage year-round maintenance

On February 20, 2019, the U.S. Department of Housing and Urban Development (HUD) announced in a notice that it will significantly reduce the advance notice the government gives to public housing authorities (PHAs) and private owners of HUD-subsidized apartment communities before their housing is inspected to ensure it remains safe, decent, and healthy.

HUD’s announcement (effective 30 days after publication) gives affordable property owners 14 calendar days’ notice before an inspection, a reduction from the current notice which can frequently extend up to four months. The way it currently works is that HUD’s Real Estate Assessment Center (REAC) gives management advance notice before a scheduled inspection. That notice can go for as long as 120 days.

HUD’s view is if a property owner knows an inspection is coming in, for example, three months, a less than scrupulous owner could perform cosmetic maintenance and repairs rather than adopting appropriate year-round maintenance.  96 percent properties inspected pass their REAC inspections.

Beginning March 20, 2019, HUD employees and REAC contract inspectors will only give affordable property owners 14 calendar days of notice prior to their inspection. If an owner declines, cancels or refuses entry for an inspection, a presumptive score of zero will be recorded. If a second attempt results in a successful inspection within seven calendar days, the score from the second inspection will be recorded.

This notice is for property ownership/management on the affordable side. HUD wants owners to perform regular maintenance on your property and do repairs year-round. And not just because a REAC inspector is on the way.

The Notice is available at: https://www.hud.gov/press/press_releases_media_advisories/HUD_No_19_013

CHI A Year in Review

Cooperative Housing International (CHI) promotes, encourages and helps in the establishment of housing cooperatives in transitional economies, and in developing and developed countries. It strengthens and encourages good governance principles and fosters an inclusive cooperative culture. CHI holds education and training events for the sharing of best practices in cooperative housing and encourages partnership initiatives among its members and with other cooperatives to access financial capital and technical assistance.

By using the capacity of the ICA, CHI can increase the influence of housing cooperatives at the global, regional and sectoral levels. Housing cooperatives are more important now than ever and it is by thinking and acting collectively that we can demonstrate the power of the cooperative movement. The National Association of Housing Cooperatives (NAHC) is a member of the ICA and CHI, and NAHC is proud to have NAHC board member, Linda J. Brockway serve on the CHI board of directors representing cooperative housing on behalf of the United States.

2018 was a busy year for CHI, involving many partnerships with various housing partners throughout the world. The first collaboration was in June with Housing Europe where we held our spring board meeting in conjunction with their General Assembly and Conference in Tallinn, Estonia. The theme of Livability and Affordability in Digitized Cities showed us the impacts technology is having on housing and urban environments. CHI signed a joint statement with Housing Europe committing both organizations to work with all levels of government to improve housing affordability by looking at cooperative and other forms of housing solutions.

Read more about CHI A Year in Review

COOP HOUSING LAW ALERT

HOUSING COOPERATIVE POLICY ON RECREATIONAL MARIJUANA USE AFTER PASSAGE OF MICHIGAN PROPOSAL 1

As you are already aware, Michigan Proposal 1 passed and legalized, with limitations, the possession and use of marijuana for recreational purposes on November 6, 2018.

The recreational proposal as written generally permits the following:

  • Allow individuals aged 21 and older to purchase, possess and use marijuana and marijuana-infused edibles and grow up to 12 marijuana plants for personal consumption.
  • Impose a 10-ounce limit for marijuana kept at residences and require that amounts over 2.5 ounces be secured in locked containers.
  • Create a state licensing system for marijuana businesses, including growers, processors, transporters and retailers.
  • Allow municipalities to ban or restrict marijuana businesses.
  • Permit commercial sales of marijuana and marijuana-infused edibles through state-licensed retailers, subject to a new 10-percent tax earmarked for schools, road and municipalities where marijuana businesses are located.

Ten days after the election results are certified, which should be by on or around December 6, 2018, marijuana will be considered legal but marijuana will not be commercially available for sale until probably early 2020, in part because the state must still put regulations in place and issue licenses for recreational sales. After certification, adults will no longer be arrested for simple possession and use of marijuana. But, there is no public consumption and no driving under the influence and there will be no commercial sales until businesses are licensed and approved.

Housing cooperatives, generally, can still prohibit prohibit smoking and growing plants on their properties. Police will still be able to arrest people they suspect are driving under the influence of marijuana or if they are lighting up in public. Employers can still do pre-employment and random drug tests on employees and maintain zero tolerance policies for their employees and fire or discipline employees who test positive for marijuana or refuse to hire those who test positive for marijuana.

The ballot proposal calls for LARA to take up to a year to develop the rules and regulations that will govern the recreational sales of marijuana in the state before it begins accepting applications for recreational licenses. Additionally, the Legislature could amend the proposal and make additional changes to the laws. The U.S. District Attorneys for the Eastern and Western Districts of Michigan also reported a joint statement that marijuana use is still illegal and fully criminalized under federal law and that they will continue prosecuting marijuana possession and under federal law and in spite of the fact that an individual may otherwise meet the requirements for use under Michigan’s state laws. Housing cooperatives subject to federal subsidization and HUD regulations will still need to enforce existing drug policies.

The important takeaway from the passage of Ballot Proposal No. 1 is that housing cooperatives are still within their rights to find the smoking and growing of marijuana on the property a violation of the Occupancy Agreement, Rules and Regulations. Housing cooperatives subject to federal regulations will still be subject to federal regulations and laws governing the illegality, use and possession of marijuana. All housing cooperatives should continue to enforce a no smoking, no growing policy on the premises and fine and/or subject offending members to termination of membership and occupancy for violation of those rules.

It is advisable for all housing cooperatives to issue a notice via a newsletter or other form of official communication reminding members at HUD/federal- ly subsidized housing cooperatives that they are still subject to HUD and federal regulations regarding illegal drug use and will still be subject to termination of membership and occupancy. Cooperatives that are not subject to HUD and federal regulations should issue a similar newsletter or other form of official communication reminding members that smoking and growing marijuana on the premises is still a violation of the Occupancy Agreement, Rules and Regulations and will subject the offending Member to termination of membership and occupancy. Because the rules and regulations have yet to be published by the State and there is a period of time within which the Legislature may make some further changes to the law, housing cooperatives that wish to implement a new policy governing possession, use and growth are encouraged to do so. Properties that have a policy currently in place are in no danger of being in violation of the law as they are still permitted to have prohibitions on use and growth in place, but the policy should be revisited to ensure the use of non-traditional forms of marijuana are addressed.

Our firm continues to stay ahead of this law and its impact on our cooperative clients so we can ensure that they have the best policies in place. Should you have any concerns or questions about this law and how to address it, feel free to contact us to review your current policy and discuss options available for your community.

-April E. Knoch, Esq.

aknoch@pck-law.com

Luxury Development is Making Our Housing Crisis Worse

Developers tout increased building as a salve for rising rents, lining their pockets while driving cycles of displacement.

RESEARCH & COMMENTARY
NOVEMBER 04, 2018
by Amee Chew

Rent control. It’s on the ballot in California this November, as tenant campaigns pick up steam across the country and revive an old refrain: “The rent is too damn high!” The real estate industry’s biggest argument in opposition? Rent control will hurt new construction. And – as the developers would have us believe – the only way to pull ourselves out of our dire housing shortage would be by building new construction.

This unquestioning reliance on new construction – a code phrase used by developers to signify for-profit building – is deeply flawed.

For one, for-profit new construction is overwhelmingly geared at the upper end – the luxury market, so to speak. But it’s lower-income households who face the severest affordable housing shortage. While our high-end stock has steadily grown – think towering market-rate apartments downtown – since 1990 on balance we’ve lost over 2.5 million affordable units renting for under $800. To what? In large part, rent increases.

Meanwhile, new units then take decades to depreciate down to prices actually affordable to most renters (see here also). “Trickle down” isn’t happening fast enough.

Even worse, however, new construction actually fuels displacement in the short term – even when no already existing housing is knocked down. Why? Numerous studiesshow market-rate housing development has price effects on surrounding neighborhoods – driving up rents and increasing the burden on lower-income households. Many residents in communities transformed by gentrification can already attest to the connection between for-profit development, rising living costs, and the mass exodus of lower-income residents. Maybe this won’t play out in Malibu, or a sparse neighborhood with very few low-income folk, but otherwise the above effects are widespread in our cities.

Market-rate construction brings wealthy in-movers. One study found that in neighborhoods with an influx of higher-income groups, working-class residents moved at three times the rate of their counterparts in other areas – usually to leave gentrifying communities (see also here and here).

Location – including proximity to high-end development – also affects price changes. During housing booms, it’s the poor neighborhoods bordering rich ones that sufferthe largest rent increases. The trend applies to neighborhoods near transit stationsand luxury housing, too. Prices ripple across place.

Read the full article on Inequality.org

Two grants boost support for business ownership transitions in rural Maine

The Cooperative Development Institute has received two grants totaling more than $400,000 in public and private funds to support business ownership transitions in rural Maine.

National studies show the largest single source of avoidable job loss is from business closings due to owner retirement, and the annual rate of retirement is projected to double over the next 20 years. The problem is much more acute here in Maine because the state has the oldest population in the country — and Washington County has the oldest population in Maine.

CDI said in a news release that a $200,000 grant from the John T. Gorman Foundation will help support the Ownership Transition Initiative, which assists Washington County business owners in developing exit plans that will sustain their businesses after retirement and thereby improve the quantity and quality of jobs in the region.

Read more from Mainebiz