Affordable Housing: The Benefits of Community Development Corporation Recognition and the Community Investment Tax Credit Program
| Sponsor: | Housing Nantucket |  |
| Sponsor Liaison: | Anne Kuszpa | |
| Student Team: | Elizabeth Beazley, Nhi Phan, Taylor York | |
| Abstract: | Housing Nantucket is exploring how it might better meet the urgent and growing need for affordable housing on Nantucket. Accordingly, our team examined the possibility of Housing Nantucket receiving Community Investment Tax Credits (CITC) as well as state certification as a Community Development Corporation (CDC). Through an extensive series of interviews, surveys, literature review, and observations, we determined that Housing Nantucket should pursue CDC certification. However, the organization must enhance its services in community outreach, organizational planning, and fundraising before applying for CITCs. | |
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Executive Summary
One of the most prominent problems on Nantucket is the lack of affordable housing. Approximately 40% of renters and 55% of homeowners on the Island spend more than 30% of their incomes on rent or mortgage. Housing Nantucket (HN), the only privately operated, local non-profit focused on affordable housing on Nantucket, addresses this problem by providing 30 rental units and 58 covenant homes to the work force population. To gain access to additional resources, such as Community Investment Tax Credits (CITC), HN is exploring the possibility of seeking certification as a Community Development Corporation (CDC). To assist in this endeavor, our team’s project consisted of two goals:
(1) To evaluate the components of a high quality, complete, and competitive CDC application and Community Investment Plan (CIP), and
(2) To develop draft materials for Housing Nantucket’s submission to the Massachusetts Department of Housing and Community Development (DHCD) for CDC certification and also CITC allocation.
Both of these goals were accomplished through tenant surveys and interviews with the Massachusetts Association of CDCs (MACDC), HN’s tenants, board members and stakeholders.
Goal 1: After conducting interviews with the MACDC and four established CDCs, in addition to reviewing eight CIPs which received CITCs, our team concluded that successful CDCs consist of the following:
- Extensive community engagement, including diverse and engaged boards;
- Comprehensive business plans that include succession planning; and,
- Strong donation pools and fundraising capability.
Goal 2: To properly understand the scope of HN’s needs and operations necessary for crafting the CIP and CDC application, we conducted a general needs assessment. This assessment consisted of a tenant survey in addition to interviews with various stakeholders such as tenants, Board members, HN staff, and local community leaders in the affordable housing sector on Nantucket and elsewhere. From these methods we concluded the following:
- The affordable housing crisis is intensifying. HN plays a central role in addressing this problem as it is the largest private organization actively creating affordable housing on the Island.
- HN, however, may need to consider playing a larger role in the community by becoming a clearing house for seasonal rentals and a real estate educational resource.
- To enhance the likelihood of receiving CITCs, HN may need to develop certain characteristics common to CDCs. These include the characteristics we found in completing Goal 1.
After critically reviewing the CDC certification requirements, we recommend that HN pursue CDC certification. However, before proceeding with the CITC application, HN needs to implement new social programs to increase tenant/community involvement and outreach, and solidify private funding sources. It also needs to maintain and cultivate a diverse board through mentorship and succession planning. If HN is able to make these stated necessary changes, and receives CITCs, the recommendations for investment include: expanding outreach and fundraising, continuing construction and maintenance of new and old units, increasing tenant outreach, and expanding permanent staffing.
If HN decides that it does not wish to pursue CDC status, the organization would still benefit from increasing fundraising endeavors, developing a five year business plan that includes succession planning, maintaining a diverse board, and exploring a role as clearing house for seasonal and year-round rentals. Pursuing these organizational changes would allow HN to expand its operations, become more efficient, establish more long-term affordable housing, and ensure that the affordable housing need on Nantucket continues to be addressed.