Would establishing a community development authority, or CDA, make sense for the Village of DeForest?
Tom Landgraf, of Madison’s Dimension Development, presented the pros and cons of such a move at the July 16 DeForest Village Board meeting.
DeForest already has a housing authority and a redevelopment authority (RDA). A CDA would combine the activities of both under one roof.
“The timing is right for your idea to blossom into something,” said Landgraf.
The board took no action on the issue.
Landgraf informed trustees that Wisconsin statutes allow a municipality that has both a housing authority and a redevelopment to form a CDA.
“You [would] no longer have a separate housing authority and a separate redevelopment authority,” said Landgraf, in explaining how a CDA works. “So the statutes don’t allow you to have three, [or] one of each of those. You either have the separate housing authority and the separate redevelopment authority, like you currently have, or you put those together in a CDA.”
A CDA would take on the responsibilities of both entities. Landgraf said that an RDA specifically deals with matters like blight elimination, slum clearance and urban renewal.
“Generally speaking, my exposure with these entities has been big projects, where blocks of development need to happen versus using this vehicle for a very targeted, small site, very specific piece,” said Landgraf. “The RDA is, in many respects too big, and I wouldn’t say clumsy, but difficult to make work for that particular set-up.”
Landgraf said an RDA can basically act as a developer, since it can acquire and lease property and enter into development contracts. It usually has a seven-member commission, generally made up of village and community representatives, and has the power of eminent domain, the right of a government or its agent to seize private property for public use for compensation. It can also hire staff, which become part of the civil service, and borrow money on its own, although that debt is not considered general obligation debt of the community in which it operates.
Landgraf told the board, “So, that is off your balance sheet.”
Housing, however, is off limits to the RDA. That’s where a housing authority comes in. It can own and lease housing, and it can act as the village’s agent if a foreclosure is needed.
“So, in that regard, it’s kind of a multi-purpose entity with regard to housing,” said Landgraf. “It has pretty much all the same terms as an RDA. It can borrow money, it can own lease real estate, it has the power of eminent domain, but it too has a limitation in that it can only do non-housing related activity that benefits its clientele.”
Here’s an example of what Landgraf was talking about. If a building owned by the housing authority wants to provide child care. Space is then created for a child care operator to come in and run a child care center.
“If the housing authority did it, the child care could just be for the residents or the clientele of the housing authority,” said Landgraf. “So, community folks couldn’t come in and use the child care center. Well, that gets kind of awkward. So, again, it’s a useful tool, but there are some limitations with regard to how it can work especially in a smaller community, where a lot of real estate has to serve a lot of people of all different incomes.”
Issues like that could be alleviated with a CDA. Also, as Landgraf explained, the village would get one entity to function as both the RDA and the housing authority.
“So, anyone wishing to do development in the village has a single point of contact, because they don’t need to figure out what can the Housing Authority do? What can the Redevelopment Authority do and then go see both of them,” said Landgraf. “They can make an appointment, come in and talk to the CDA and say, here’s what we have in mind. What do you think?”
There would also be one board of commissioners instead of two, reducing the meeting load for village board members.
“You probably would have greater options in terms of staffing, because you don’t have people who are just housing or just redevelopment,” said Landgraf. “They can be more jacks of all trades, so to speak, so it probably expands your employment pool.”
Landgraf said a CDA provides financing efficiency.
“There are different ways of how RDAs and housing authorities raise money, so being able to deal with that all in one place can be a plus,” said Landgraf. “You probably have a broader range of development options, because you can do private-public partnerships. There’s no limitation that the CDA can only do things for the housing authority or only issues that might relate to a redevelopment concept, so there are a lot of opportunities.”
With regard to gathering community input on a host of development issues, a CDA would provide a single vehicle for doing so.
Landgraf cautioned that hiring front-end staffing may be necessary to get a CDA up and running.
“Accounting and finance could be an issue,” said Landgraf. “There’s different types of money that come in to a CDA on the community development side versus housing side.”
Keeping it all straight can be challenging. Landgraf said the City of Stevens Point had a housing authority, but created a CDA to handle everything. Stevens Point went back to separating them because the CDA was dealing with housing mostly and returning to the original arrangement made things easier.
Finding members to serve on the commission may be more difficult, as well. They need to be comfortable with housing and redevelopment issues. Also, it may be a challenge to get people on the commission who don’t have conflicts of interest.
Landgraf also said that because a CDA has the power to do more than an RDA or a housing authority, it can get overextended. He advises that in setting up a CDA, everyone must have a good understanding of the limitations a municipality wants to impose on it.
Landgraf believes a CDA can be useful in helping a community bring in affordable housing. He explained how financing and mortgages can drive up rents. A CDA can help developers get a better deal.
“That’s why I think a CDA is a good thing to consider if you’re looking at workforce housing, the ability to do some starter homes for families … it really creates a nice tool for you,” said Landgraf.
Trustee Jeff Miller noted that one of the issues with DeForest’s RDA was that it seemed to slow own business-friendly projects. He also mentioned that it might be a challenge to find commission members, considering they’d have to be knowledgeable about housing and redevelopment.
Trustee Abigail Lowery talked about the housing authority and potential repositioning directed by the U.S. Department of Housing and Urban Development (HUD). She said funding for affordable housing gets cut every year.
“A CDA does fit in well with the community,” said Lowery.
Miller asked about getting to a point where a municipality decides to go with a CDA. Landgraf said that if the DeForest Housing Authority goes with the HUD initiative, there would also be a market study, which may provide the data the village needs to decide whether to go with a CDA or not.