Hardest Hit New HFA Non Profits: Activities Should be Limited to Single Purpose, Meetings/ Records Subject to Public Meetings/Records Law, With Any Residual Funds Reverted to Housing Trust Funds.

Several states receiving Hardest Hit TARP funding will be forming non profits to administer the program, responding to the Treasury requirement that the recipient cannot be a state agency, and must be an “eligible entity”.  

A review of the two sets of draft organizational documents available from the first round Hardest Hit funded states, Michigan and California, reveals a scope of planned activities that

1. Far exceeds the single function of administering the Hardest Hit TARP funds.

2. Includes virtually no commitment to the transparency required by public agencies.

3. Provides for different use of any remaining receipts when the Hardest Hit Program winds down.

Why Housing Advocates May be Concerned:

1. Open meeting laws and open record laws do NOT apply to new HFA non profits; an expanded scope of activities for new HFA non profits to include current functions would REDUCE transparency of existing operations.
2. Expanded activities of a new State non- profit could threaten operations of existing housing non profits.
3. Proceeds remaining after the Hardest Hit program winds down are not uniformly being targeted to housing trust funds or existing affordable housing programs.

Background:

The lack of transparency in TARP funding is well documented. Plans for spending Hardest Hit TARP funding are no exception—in most cases they were developed without significant public disclosure, without ANY advance posting of the actual plans submitted to the Treasury. (So far, I am pleased to say that has NOT been the case in Oregon, and I look forward to the posting of the actual Oregon draft plan for public comment prior to submission to Treasury, including the non profit bylaws and articles of incorporation).

This process, as well as ongoing behind the scenes negotiation of changes with Treasury, raises the real possibility that state HFA’s MAY be using this new funding to move activities subject to public scrutiny via open meeting and records laws to within the purview of a NEW nonprofit that would NOT be subject to the same public disclosure standards. In addition the NEW activities planned for HFA non profits could pose a threat to the operations of existing non profits.  

Recommended Solutions/Outcomes:
In the two page table HERE I have extracted relevant sections of the California and Michigan hardest hit plans that illustrate these points, as well as MY suggestions about DESIRED outcomes:

1. To focus the scope of HFA non profit activities on a single purpose.
2. To Insure HFA non profit transparency.
3. To insure priority uses of any residual HFA non profit hardest hit funds.

[NOTE: Format of table is LEGAL sized landscape; California and Michigan column headers have page links to their actual draft non profit organizational materials found within state hardest hit plans I have previously posted].

Originally created and posted on the Oregon Housing Blog.