Henson offers to limit rehab funding Proposed reforms affect project approval process

December 14, 1997|By John B. O'Donnell and Ronnie Greene | John B. O'Donnell and Ronnie Greene,SUN STAFF

Housing Commissioner Daniel P. Henson III is proposing to limit the amount of money his agency will spend on individual construction projects and to "completely revamp" the way they are approved.

In a news release issued Friday afternoon, Henson said the new policies, contained in an 11-page "Developer's Funding Guide," will "allow us to provide maximum public return for each dollar of investment we make on the public's behalf."

"It means we're going to be saying 'no' a lot more in the future," Henson said in a separate interview.

He said the revisions are prompted by his department's limited resources, but Henson's changes also come after recent inquiries by The Sun about the high cost of rebuilding Baltimore rowhouses.

According to Henson's policy reforms, the agency will generally limit its financing of housing projects to $25,000 per unit or 30 percent of the total cost, whichever is less.

As recently as October, the Department of Housing and Community Development proposed spending $93,000 per unit for a four-apartment rehab project on North Broadway.

Henson said the $25,000 figure is a guideline, not an ironclad limit. He said, however, that exceptions will be rare.

The cap applies only to funding from Henson's agency; city rehab projects often have several sources of public financing.

Henson said that the guidelines have been in the works for six months and that the $25,000 limit "has been internal policy."

Nevertheless, his agency backed the $93,000-per-unit project in October and in September obtained Board of Estimates approval to finance at least $67,000 per unit to the rehab of seven single-family rowhouses near North and Guilford avenues.

"Those deals go back years," the commissioner said Friday.

Among the other measures, the guidelines:

Strongly encourage developers to contribute their own equity. "DHCD primarily provides gap or bridge financing to assist developers," the policy says.

"Therefore, the developer should pursue all funding sources available and not view DHCD as a primary or sole source."

The Sun found numerous cases in which public sources funded nearly the entire budget.

Require developers to file more uniform and detailed information when they seek money.

"Previously, proposals submitted to us for funding consideration ran from two paragraphs with little background to a full and complete proposal. Some proposals were without adequate financial background," a Henson aide said.

Hold developers more accountable. "Except where out of the control of the developer, any misjudgments will be the responsibility of the developer."

Pub Date: 12/14/97

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