Esslie-Frenia Law June 2023 Leaderboard

EDITORIAL: How much is Bliss worth?


YOU ROLL THE DICE and maybe you land on Mediteranean Avenue or Baltic, where rents are low. But it doesn’t end there. Grab more real estate, squeeze your competitors and with luck and savvy money management you’ll call Boardwalk and Park Place home.

That’s how the game of Monopoly works. In real life, not so much, although recent developments in Hudson have echoed the board game in eerie ways. Despite efforts by county, state and federal government to remedy the shortage of decent rental housing for people with low incomes, private developers–non-profit and for-profit–are taking the lead in addressing the city’s housing problems.

The non-profit Galvan Foundation has 86 buildings in the county; over 60 are occupied and more are in the pipeline. The foundation has embarked on an exercise in social engineering supported by some convincing data. Galvan will place some of its low-income family housing in economically more secure neighborhoods. The data say that the kids who grow up in better surroundings are “more likely to escape poverty.”

The Galvan Foundation is privately funded by two wealthy individuals so its plans are not subject to public opinion except where zoning and planning regulations apply. So far the foundation has funded not only housing but also a new public library in the former armory, a special programs building for the Hudson School District and a Little League field, among many other charitable projects.

Some critics have accused Galvan of buying properties and not rehabbing them, which reduces the supply of residential units and drives up the cost of rents. The foundation says that 20 of its properties are currently “uninhabitable.” It’s possible that in Columbia County, which has one of the lowest unemployment rates in the state, they can’t find enough contractors to move any faster. But even if that explains the delays, the Galvan Foundation’s vision for the future of Hudson and the county remains opaque. And when one entity controls such a significant part of the local real estate market it’s up to the community to press for greater transparency.

In the public sphere the Hudson Housing Authority (HHA) operates the nine-story Bliss Tower apartment building on North Second between Columbia and State streets and the adjacent Columbia Apartments low-rise housing. In the last few months HHA has begun planning for new affordable and workforce housing nearby. Then, last week, HHA said it had selected a private company to operate and own a majority interest in Bliss Tower and Columbia Apartments.

The final terms of the agreement with Property Resources Corporation, a New York City property management company, are still being negotiated. But among the details mentioned at last week’s HHA meeting, the local housing authority will retain a 40% interest while Property Resources would hold 60%. And in order to make this public-private deal, HHA has to undergo a “conversion” to become a ” Rental Assistance Demonstration” (RAD) project.

This deal ushers in another private entity that will make decisions about local housing.

RAD projects, which started in 2012, have proved popular judging from the increasing number of them that Congress has authorized. Elected officials won’t adequately fund housing for people with low incomes, but it turns out that with the right incentives, private firms will. Bliss Tower needs an upgrade and this, apparently, is the only practical way to pay for it.

Why here and why now? Start with the Low Income Housing Tax Credit. It offers attractive tax advantages on money borrowed to improve low-income housing. It also requires that rents remain low for at least 15 years. After that, some or all of the units developed or improved using the tax credit can be converted from low-income to market-rate units.

So imagine a company that, in 2033, owns a high rise apartment building in Hudson with upper floor apartments that have spectacular views. The neighborhood will have benefited from the $10 million state grant to develop the waterfront. People who know money would say that’s a deal worth waiting for, especially because there will be revenue in the meantime from government vouchers for low-income tenants who can now (in 2033) be displaced.

Property Resources Corporation is not doing Hudson a favor by partnering with HHA. It’s making a shrewd investment that promises a high return. HHA should not underestimate the value of its asset in terms of improvements and the veto powers the HHA board will need in writing to protect the rights of residents. Otherwise the deal should not be approved.

Related Posts