Good morning. My name is Mariana Luz and I am on the Board of Directors of the Anti-Displacement Project. I am also a single parent, work two jobs in the non-profit sector, and am an active member of my community. Like thousands of others in Massachusetts and around the country, rising housing costs created by the booming economy have put me in a day to day struggle to provide secure housing for my family.
I want to begin by thanking Chairman Allard for convening this hearing and for your commitment to affordable housing. In addition, I would like to thank Senator Kerry for introducing the Housing Trust Fund legislation and for inviting us to testify today. I would also like to thank you, Senator Kerry, for your tireless efforts representing the people of Massachusetts here in Washington D.C.
The Anti-Displacement Project is a ten year old community based organization representing over 10,000 low income families in the four counties of Western Massachusetts. With me today is Caroline Murray who has been the Director for seven years. Our members are typical Americans Ð- working families and single mothers struggling to make ends meet and provide for their families, new immigrants trying to make a better life for themselves and their children, elderly men and women looking for peace of mind and security, disabled people on fixed incomes who want to live with dignity and respect. We all have one thing in common: our desire to have control over the decisions that affect our lives so that we too can achieve the American Dream.
The A-DP is led by community members like myself who have come together both to preserve affordable housing and to create resident controlled housing and homeownership opportunities. Over the past four years, A-DP members have purchased, rehabilitated, and made permanently affordable five at risk HUD assisted complexes Ð turning Jack KempÕs vision of tenant ownership into reality. This housing is now in the hands of the 1,350 people who live there Ð people who take pride in where they live. Here with me today is Mary Lou Symmes, the Vice President of the Anti-Displacement Project and of her tenant association, the Home Savers Council of Greenfield Gardens. Greenfield Gardens was the last buyout in the country to be funded through the now defunct preservation program and is now a completely tenant owned complex. They are working to establish a job training program, they are building a new community center, they have created childrenÕs programs and are working with the community police. Greenfield Gardens stands as a shining example of what can be achieved when everyone joins together.
The A-DP has also negotiated permanent affordability agreements and renovations at six at risk complexes Ð ensuring stability for an additional 2,250 families formerly at risk of losing their homes, their neighborhoods, and their communities.
All totaled, over the past five years, 3,700 apartments in our region have been preserved due to the efforts of the hundreds of A-DP leaders who have come together to save our communities. We have won the recognition and active support of a bipartisan group of elected officials and policy makers including our Governor, Paul Cellucci as well as the Massachusetts State Housing Finance Agency and the Department of Housing and Community Development. We have the support of the Democratic Majority Leader of the State House of Representatives and the Republican Minority Leader of the State Senate as well as numerous Mayors and Town representatives. We have also received the active support of our Congressional delegation and of course from Senators Kerry and Kennedy. We have also developed active relationships with a number of private investors and banking officials. Working together, we have brought $56 million into our communities from local, state, federal and private sources.
But there is so much more to be done. The A-DP is currently organizing tenants at three additional buildings Ð two of which are at immediate risk of prepayment. We are talking about hundreds of families who are fighting today to save their neighborhoods. But the resources which allow us to do that have all but vanished. I would like to tell you a little bit about my situation in order to stress to you the need for a federal fund to support affordable housing.
I live at Puffton Village in Amherst, Massachusetts. Amherst is a college town, home to the University of MassachusettsÕ flagship campus with a student population of 26,000. The vacancy rate hovers around 1% and families in town vie with students for what decent housing exists. This fall, for the second year in a row, the University was short 400 rooms for incoming students. As more and more students seek off campus housing, the costs of housing increase. A family earning $20,000, $25,000, or even $30,000 per year can not compete with students who can double up in rooms and pay $1,500 per month in rent. The average price for a single family home today is $162,000. Any home on the market for less than that is immediately snatched up by investors who then rent it out to students. 500 previously affordable apartments have been converted to market rate in the last two years, leaving only 200 assisted apartments in the entire town. For those not lucky enough to be one of the 200 Ð they must move their families out of Amherst and the nationally recognized public schools that go with it.
In 1996 I joined with my neighbors in forming the Puffton Tenants Association. We knew that our 64 unit complex was at risk of being prepaid and converted to Market rate Ð particularly because it is next to an identical complex of 200 units that is rented to students at double the price. We negotiated a purchase and sale with the owners, put together our package, received approval from HUD, and were placed in the Preservation Program queue Ð at number 236. After the program was eliminated, we renegotiated the deal with the owners and applied for tax credits and HOME funds. After a series of extensions to our purchase and sale agreement, we were awarded our tax credit allocation and went out to syndicate our deal. We hired a general contractor and a management company Ð but by then it was too late. On the day of the closing, we arrived at the registry of deeds with check in hand only to be informed by the ownersÕ attorney that he got sick of waiting and refused to sell to us.
Since then, the owner has brought in a new partner Ð not coincidentally it is the person who owns the identical complex next door Ð and prepaid the mortgage. Our rents have doubled. A 3 bedroom market rate apartment that used to rent for $620 / month now goes for $1075 / month. A number of market rate tenants who did not receive vouchers were immediately forced to move out of town. About 10 additional families are in the process of moving due to the changing nature of the neighborhood as students begin to move in. We are no longer welcome in what we used to call home. I have been trying to find a new apartment but my voucher is capped well below the street rents in town. As of today, I am not sure where I will be in the next few months.
The tragedy in this story is that this did not have to happen. Had there been a Housing Trust Fund in place, we could have secured the money to close before the owner sold to someone else. I am here today, not to gain your sympathy for my situation but to express to you that we in the community are working hard to solve this problem. We donÕt want you to solve it for us Ð we the tools and the resources to do it for ourselves.
In Amherst, we are still fighting to find security for our families. We are meeting with officials in town and at the University to identify land for new construction. State officials are eagerly awaiting the outcome and are committed to assisting us in finding some of the resources to build a new cooperative. My question to you is Ð will the federal government join with the community, the states, and the private sector in forming a partnership to solve this crisis before it is too late?
The A-DP is affiliated with National PeopleÕs Action, a nationally recognized organization representing over 75 community groups. NPA has been instrumental in working to establish needed reforms in the FHA mortgage program. We have enjoyed the support of Representative Lazio and Chairman Allard and believe these reforms have resulted in part in todayÕs $5 billion surplus. Our work on this issue Ð through NPA -- makes us uniquely suited to the current discussion of how to use the surplus. Single family homeownership is a critical piece of any national housing agenda and is crucial to NPAÕs leadership, however it can not stand alone. Young families need a place to start out and our elderly need a place to retire Ð affordable rental housing provides these opportunities and acts as an anchor to our neighborhoods. NPA strongly supports the use of all current and future FHA surpluses for the preservation and creation of affordable rental housing using the vehicle of a National Housing Trust Fund.
Amherst, of course, is not an exception. According to a study we recently completed with National PeopleÕs Action and Housing America, the supply of both subsidized and unsubsidized housing nationally is simply too small. New construction of affordable housing has not been the focus of federal housing policy since early 1970Õs. The past decadeÕs economic prosperity has caused once affordable apartments to skyrocket in price. In the past two years, we have lost over 100,000 units of HUD assisted housing to market conversions and 900,000 units remain at risk. 80,000 units of public housing have been slated for demolition, but only half will be replaced by HOPE VI. At the same time there is a surplus of $5 billion in FHAÕs Mutual Mortgage Insurance Fund. For just $1 billion, we could save every at risk unit. For $5 billion we could build an additional 200,000 units. I would like to offer this study for the permanent record.
Again, I want to thank you for giving me the opportunity to represent my community and share with you our experiences in Western Massachusetts. In times of prosperity all boats do not rise with the tide Ð some get capsized in the wake of the yachts. LetÕs work together to make sure that all Americans can achieve the American Dream. Please join in our fight to save the integrity of our neighborhoods and our communities by giving us the tools we need to succeed. The existing FHA surplus is one such tool. The creation of a new Housing Trust Fund is another.
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