Island Housing Trust opens books on finances

Island Housing Trust officials say recent financial statements present a picture of a healthy nonprofit organization. The Trust released financial statements and other information for calendar year 2009, as part of an effort at more transparency and accountability.

The Island Housing Trust’s statement of financial position shows the Trust had assets of $4,129,786 at the end of last year. Some of the assets are affordable houses, either finished or under construction, and some of the assets are land. The Trust had liabilities totaling $1,616,921. The largest liability is in the form of notes and mortgages of $1,457,085. Most of the mortgages are construction loans for various affordable housing developments.

“We’re trying to show exactly where these investments have been made,” said Philippe Jordi, executive director of the Trust. “In the months to come, there will be even more effort to try and provide transparency and accountability to the general public.”

Affordable growth

The Trust also released a town-by-town accounting of affordable housing developments built over the past five years and how they are funded. Mr. Jordi says the Trust has developed or sold more than 40 houses in five towns. Four more houses are under construction, and six more are scheduled to begin construction in 2011.

The figures suggest that public financing will play a larger role in affordable housing development. For example, the Trust’s current project, four single-family homes in Lambert’s Cove, is funded by $250,000 in Community Preservation Act (CPA) funds and $160,000 from the Tisbury Affordable Housing Fund. No private funds are going into the Lambert’s Cove project, except for time and administrative support of the Island Housing Trust staff.

By way of comparison, the Jenney Way development in Edgartown, completed in 2008, was financed with $918,000 in private donations raised by the Island Affordable Housing Fund, $300,000 in CPA funds, and $156,000 from the Cape Light Compact.

“What it shows me is that the money is being leveraged,” Mr. Jordi said. “You’re leveraging those CPA funds to get private funds. When we write grants, we can say we can match your grant with public dollars. They’re always looking to see how their money can be optimized.”

Who pays what

According to Island Housing Trust figures, the average cost per unit of housing developed is $359,000, including $44,500 for land costs, $42,000 for site development, and $219,000 for building costs. Also included in that total are energy efficiency improvements, architectural and engineering work, and financing.

The average investment from public and private funds per unit is $143,000. Over the past five years, the Island Affordable Housing Fund has helped fund 27 units with private donations, with an average contribution per unit of $90,500. Town and CPA public funding has helped build 17 units, at an average of $88,000 per unit. State grants have been part of the financing for 16 units, at an average of $70,000 per unit.

The homebuyers fund the biggest share of the development projects, at $217,000 per unit, representing about 60 percent of the total investment in the home.

Homeowners are mostly young families or individuals, earning $40,000 to $80,000 per year, according to the Trust. In general, they earn from 60 percent to 120 percent of the area median income. In Oak Bluffs, a bank employee and a law enforcement officer live in their house with three children — a high school student and two in elementary school. In Tisbury, a single parent who is a school administrator lives with three high school students. In Edgartown, an office manager and a chef live with a pre-school student. In West Tisbury, a teacher and a carpenter live in an affordable unit with two pre-school students.

Residents qualify to buy houses based on their income, and their ability to secure a mortgage. They are chosen by lottery.

Funding challenges

The fundraising travails of the Island Affordable Housing Fund have significantly affected the Trust. In the past, the Fund has provided $120,000 annually for administrative support to operate the Trust. That support funded Mr. Jordi’s salary and administrative expenses. This year, the Fund has not been able to provide administrative support at that same level. A project manager who worked for the Trust in the past has not been hired for the two most recent development projects. Mr. Jordi stepped in to fill that role. The Trust has covered other administrative costs with revenues from ground leases, a state grant, and reserve funds.

“Next year we’re going to assess whether the Fund is going to be our administrative sponsor, or whether we’re going to have to seek another sponsor,” Mr. Jordi said. “Going into next year is a concern.”

With the fundraising climate still difficult, the Trust will also be very careful about committing to projects. “We won’t initiate projects until funding is secured,” Mr. Jordi said. “We not only have to have construction financing, but we have to make sure public and private funds are raised.”