MaineHousing not backing down from questions over spending

By Eric Russell, BDN Staff
Posted Nov. 29, 2011, at 1:42 p.m.

AUGUSTA, Maine — Bruce Poliquin likes to refer to himself as an “activist treasurer” and he has been more visible and vocal in his role as Maine’s steward of fiscal discipline than any of his recent predecessors.

The state treasurer’s most recent campaign has been to question the practices of the quasi-public Maine State Housing Authority, or MaineHousing.

Poliquin, who as state treasurer is an automatic MaineHousing board member, joins a handful of new members recently appointed by Gov. Paul LePage. Together, the new members are worried that MaineHousing has lacked fiscal oversight and they have cited an affordable housing project in Portland as proof.

MaineHousing officials, however, say Poliquin is continually ignoring facts to push his own agenda and to make life miserable for the agency’s director, Dale McCormick, a longtime Democrat who was state treasurer for eight years when Democrats controlled the State House.

The director of MaineHousing is a gubernatorial appointment. McCormick was appointed by Gov. John Baldacci and then reappointed shortly before Baldacci left office.

Her term runs until 2014 unless she is forced out.

Despite Poliquin’s continued questioning of McCormick about her handling of MaineHousing, McCormick said she has no intention to back down.

“I’m not a quitter,” she said this week. “It’s my responsibility and duty to ensure the protection of MaineHousing’s financial assets for everyone. To walk away from that would be wrong.”

The ongoing debate, initiated by Poliquin, involves a MaineHousing apartment project in Portland known as Elm Terrace. That project, which involves the renovation of a historic building owned by the University of Southern Maine, came in with a per-unit cost of $314,000, well above initial projections and above the state average.

“How can Maine taxpayers be expected to help pay for $314,000 ‘low-income’ apartments when the median single-family home sells for $159,000?” Poliquin wrote in a recent blog post. “Why should our fellow Mainers be asked to subsidize housing which they themselves cannot afford to live in?

Poliquin said he believes Elm Terrace is indicative of a culture at MaineHousing that doesn’t place a high priority on cost containment.

McCormick said the treasurer is wrong and she has told him so publicly.

“Both the treasurer and the board chair [Peter Anastos] keep saying what they want to say and that usually means there is another agenda,” she said. “I’m happy to keep correcting them.”

McCormick said Elm Terrace was selected for funding in 2010 but has yet to be formally approved, largely because developers and MaineHousing are still working to control the costs. She said she personally asked the project developer to rein in costs long before Poliquin began beating his drum. She disputes Poliquin’s assertion that Elm Terrace is indicative of MaineHousing’s work as a whole.

MaineHousing has many responsibilities as the state’s housing authority and one of those charges is to provide affordable housing. The agency does that in one of three ways: by acquiring and rehabilitating existing housing, by building apartments from scratch and by reusing historic buildings.

For acquisition and rehab projects, the average cost has been $127,000 per unit, according to MaineHousing data provided by McCormick. That is well below the $159,000 average price of a single-family home often cited by Poliquin.

New construction comes in at $192,000 per unit, which is close to the market rate, McCormick said. Historic renovation generates the highest cost per unit, at about $240,000, but McCormick said it’s important to stress that those projects involve tax credits specifically for historic preservation.

Poliquin said he’s a numbers guy. The number he cares about right now is the 6,500 Mainers who are on a waiting list for affordable housing. If Elm Terrace is even a little indicative of what’s going on, he said, Mainers are getting a raw deal.

He insists that he has nothing personal against McCormick or MaineHousing, but Poliquin attempted to gain more control of that agency several months ago.

In March, the treasurer submitted legislation that would have expanded his office’s role and would have required voter approval for all bonds created by quasi-state agencies such as MaineHousing. The Republican-controlled Legislature failed to back that idea.

Now that he’s on the board of commissioners, Poliquin hopes to make changes from the inside. Those changes are underway already, even in the face of protest by McCormick.

A proposal is on the table to change the criteria for how MaineHousing distributes an estimated $30 million in federal funds for affordable housing projects.

In years past, nonprofit developers have done the bulk of the work. Poliquin and others want private developers to have a seat at the table.

“There are no incentives to drive down costs; that’s something that needs to change,” Poliquin said.

One of the nonprofit developers that has done numerous projects for MaineHousing is Portland-based Avesta Housing. That company is led by Dana Totman, who was No. 2 at MaineHousing from 1994-2000.

But for-profit firms have not been excluded from the discussion, McCormick said, adding that of the 42 most recent projects approved by MaineHousing, 24 have gone to private developers.

McCormick said she has consistently met with developers, including nonprofit ones, to talk about cost containment. She also said she believes the proposed changes are meant to benefit a few private developers who are sympathetic to Poliquin and the LePage administration.

“We have been talking about cost control and have been working on this for months,” McCormick said. “They want to rewrite years of housing policies overnight.”

Greg Payne with the Maine Affordable Housing Commission said his group has worked with MaineHousing recently to address certain restrictions and guidelines that have driven up construction costs.

“It is fair enough for those who oppose these policies to publicly raise their objections, but it is probably less fair to point fingers at developers for doing precisely what the Legislature has encouraged them to do,” he wrote in a recent OpEd published in the Bangor Daily News.

The next meeting of MaineHousing’s board of directors is Dec. 20. The agenda has not yet been finalized.

Editor’s note: Eric Russell’s father is employed by MaineHousing.

http://bangordailynews.com/2011/11/29/politics/mainehousing-not-backing-down-after-relentless-questions-over-spending/ printed on September 30, 2014