CEDAC Commits $8.5 Million to Preserve Affordable Housing in Boston’s Fenway Neighborhood

Massachusetts notched another win this month in its continued efforts to preserve affordable housing.  On April 10th, the Community Economic Development Assistance Corporation (CEDAC) announced that it had committed over $8.5 million in financing to Fenway Community Development Corporation (Fenway CDC) to purchase and preserve Burbank Gardens, an existing affordable housing development located in the Fenway neighborhood of Boston. This residence is one of many 13A properties whose 40 year mortgage will reach maturity in March 2018, risking tenant displacement and loss of affordable housing. Fenway CDC closed on the purchase of the property on the same day.

In 2009, the Massachusetts legislature passed into law Chapter 40T. This law has given the state’s Department of Housing and Community Development (DHCD) and CEDAC tools to monitor and address the expiring use challenge. Among the most important provisions of Chapter 40T are purchase rights to allow DHCD or its designated agent to acquire and preserve these expiring affordable housing projects if an owner offers to sell a building.

When the seller of Burbank Gardens put the property on the market in early 2016, Fenway CDC was designated by DHCD through Chapter 40T to purchase and preserve the 52-unit residence. The seller accepted Fenway CDC’s offer in September 2016.

“Preserving Burbank Gardens is an important step in the Commonwealth’s ongoing efforts to maintaining affordable housing,” said CEDAC’s Executive Director Roger Herzog. “It demonstrates once again that the innovative Chapter 40T law remains an effective tool and is a national model for preserving quality affordable housing.”

Fenway CDC, established in 1973, is a membership organization that builds and preserves affordable housing and champions local projects to protect the neighborhood’s economic and racial diversity as well as its long term vibrancy. The organization also provides social services, workforce development programs, financial literacy assistance, health programs, and adult education. They have developed nearly 500 affordable homes that house about 1,500 people, including seniors, families, and people living with disabilities.

With the acquisition of Burbank Gardens, Fenway CDC plans to ensure that 51 of the 52 apartments remain affordable for low and moderate income households. The property currently consists of 52 studio, one- and two-bedroom apartments. CEDAC provided a $313,000 predevelopment loan and, with participation by Eastern Bank, an $8,268,525 acquisition loan to Fenway CDC for this important preservation effort.

“CEDAC was thrilled to work with a mission-driven non-profit to preserve this crucial affordable housing resource,” said Bill Brauner, CEDAC’s Director of Housing Preservation and Policy. “The involvement of public sector agencies, including MassHousing, the City of Boston’s Department of Neighborhood Development and DHCD, was crucial to this transaction.”

Click here to read more about the expiring use challenge and CEDAC’s work in producing and preserving affordable housing.

The Path to Tax Reform Will Go Through Massachusetts

By: Anthony DeMaio

Washington is working overtime this week to characterize the president’s first 100 days following the April 29th milestone. With the spotlight on the White House, it is easy to ignore Capitol Hill. As the 115th Congress reconvenes after a two-week recess, many Members will be smarting from tough town halls and other public appearances back in their districts. Pressure on Speaker Paul Ryan and Majority Leader Mitch McConnell to pass legislation is mounting. With the president having outlined his vision for tax reform, it looks like a much-anticipated tax bill will be the next policy item on Congress’ agenda.

If the goal of re-writing the federal tax code seems ambitious, it’s because it is. The last time a tax reform bill was enacted was 1986 – three days before the ball rolled through Buckner’s legs – a lifetime ago (in both politics and sport). Despite a divided government then, Washington was less polarized. Democrats in the House including Speaker Tip O’Neill and Ways and Means Chairman Dan Rostenkowski worked with Republicans like Senate Majority Leader Bob Dole, Finance Chairman Bob Packwood, and President Ronald Reagan to pass the first comprehensive changes to the tax bill code in 32 years.

There is no doubt that politics is more partisan today than during the Reagan-O’Neill era. And with Republicans in control of Congress and the White House, one would expect the Democrats’ role to be insignificant. But as we learned during the recent attempt to repeal and replace the Affordable Care Act, House Republicans are deeply divided. So if congressional leadership is serious about passing a tax bill, they will need rank and file Democrats to support it, especially Congressman Richard Neal of Massachusetts.

Mr. Neal has served on the House Ways and Means Committee, which has jurisdiction over the tax code, for over 20 years. He is now the top or Ranking Democrat on the panel. It will be up to Mr. Neal and Chairman Kevin Brady (R-Texas) to hash out the details of a viable tax bill.

Among President Trump’s campaign promises and early proposals was a border adjustment tax, or BAT, which would impose a steep tax on goods coming into the United States from abroad. In theory, the BAT would encourage corporate investment at home and create jobs in the manufacturing sector. But as the president found out, tax proposals often make strange bedfellows and while the BAT has some bipartisan support, it also has bipartisan opposition. It appears that the vocal opposition from key Republican senators prompted Trump to shelve the BAT proposal. As other suggestions are considered and tweaked, Mr. Neal will be responsible for determining their viability within his caucus.

In recent history, the medical device tax has been the key tax issue for Massachusetts, thanks to the booming medtech industry. But with a comprehensive bill up for consideration, and a critical seat at the table, Massachusetts interests will play a more central role. Changes to the corporate tax rate will not only affect the 13 Fortune 500 companies based in Massachusetts, but the thousands of small businesses and startups in bio, tech, and other sectors. Consolidating tax brackets and changing eligible deductions should get the attention of the state’s growing millionaire class and the thriving middle class alike. And if Congress is serious about paying for lower taxes by creating savings in the healthcare system, Massachusetts’ research facilities and its dominant healthcare sector will need to sit up and take notice.

While not the low-hanging legislative fruit that would count as an easy win, tax reform is certainly high on Speaker Ryan’s agenda. As the focus turns to legislative action, and the Speaker seeks a win after an early failure on healthcare, we expect to see a tax bill move. There is a narrow political path for the legislation to tread, and it goes right though the Commonwealth.

April Showers bring….government shutdown?

By: AmyClaire Brusch

The end of this week is not only the end of President Trump’s first 100 days in office (Saturday), but also a looming federal funding deadline (Friday).  While the current fiscal year ends on Sept. 30, due to the lack of agreement last fall on FY17 appropriations bills, the government has been under a short term Continuing Resolution (CR) that ends on Friday.  Without a new Continuing Resolution or approval of the FY2017 appropriations, the government will not be allowed to spend money and non-essential functions will be forced to shut down. Threats of a government shutdown have Washington and media outlets in a spin zone, transforming the news cycle to a traditional administration vs. Congress dispute.

Though the formal appropriations process doesn’t usually get the attention and appreciation it deserves from the media, when it comes to a funding deadline everyone pulls out some of their favorite phrases: “Shutdown Showdown”, “CROmnibus” (the CR combined with omnibus for one big funding bill), and disputed “riders” of the day (as in policy language “riders” attached every year to appropriations bills that become bargaining chips, or poison pills, in the days leading up to a deadline).

Without agreement, non-essential government functions (as determined by OMB) cease. Many non-essential federal employees will be furloughed and certain federal government locations such as national parks will be closed. Essential personnel can vary from administration to administration but typically active military, law enforcement/homeland security, medical personnel in federal hospitals, air traffic controllers remain on duty. Mail will still be delivered and social security checks will still be processed. The length of shutdown determines how quickly non-federal employees feel the impact on their daily lives. Politically, the White House and Congress will feel the impact immediately. Constituencies on all sides will be angry and let their elected officials hear it.

There are indications that an agreement is in sight. One of the high profile obstacles to agreement on the FY17 spending bills has been funding for a border wall with Mexico. In order to reach agreement, President Trump has indicated that he will not insist that it be part of the FY17 package and instead look to FY18 for funds. An agreement, or even a CR through September 30th, would free Congress and the Trump Administration to focus on FY18 funding and other large policy areas such as infrastructure. Though it looks at the moment like a shutdown will be avoided, that could change at any time. We have learned in the past 100 days that conventional wisdom rarely applies to the interactions between the Trump administration and Congress.

Is Your Crisis Plan Ready for 2017 Realities?

By Anthony DeMaio

Running a network enterprise is exceedingly complicated. The global network of an airline like United makes the business particularly fraught. Industry pressures exacerbate problems and translate to frustration for passengers. What happened two weeks ago in Chicago was an unmitigated reputational disaster. Given the nature of the airline business today, passengers are well aware that operational disruptions can happen. However, this incident was extreme in every way. Today’s media landscape dictates that carriers need to be prepared with much better protocols than those employed at O’Hare.

First things first – flying is more affordable and more popular than it has ever been. Since the federal government deregulated the airline industry in 1978, fares have fallen by nearly 50 percent and passenger traffic has tripled. As much as we the flying public like to complain about the flying experience, the fact that it is uniquely accessible in the United States today can’t be denied.

Among the factors that keep ticket prices down is the practice of “capacity discipline,” an industry buzzword which roughly translates to “fuller flights.” In order to keep costs down, airlines do their best not to have more seats on a route or frequency than the market demands. In the United case ORD > SDF, that was 70 seats, as evidenced by the full flight. And while full flights can sometimes lead to boarding denials, most passengers would rather have a lower fare and take a chance on getting bumped than subsidize a bunch of empty seats. In rare cases, passengers need to be “re-accommodated.”

Other, external factors further complicate matters. While much has been made about United’s overbooking procedures, the flight in question was not technically oversold. Rather, a crew of four needed to be repositioned at the last second in order to work another flight out of Louisville. Any number of factors could have necessitated the deadheading crew including weather, a mechanical failure, poor scheduling or a growing and soon-to-be cataclysmic shortage of pilots.

The airlines remain a mystique industry. There is a certain amount of magic involved in hurtling through the sky at 500 miles per hour and ending up on the other side of the continent, the ocean, or the world in a matter of hours. The airlines need to do a better job of explaining that it isn’t magic, but rather the product of tens of thousands of employees constantly solving a giant and color-changing Rubik’s cube which get passengers to their destinations quickly, safely, and affordably.

So, too, do the airlines need to improve their communications and protocols. In the aftermath of this disgraceful episode, consumer advocates are rushing to push for improved federal regulations and lawmakers in Congress are introducing legislation. But certain problems are never going to go away. That means all carriers, not just United, need to take a hard look not only at what they’re doing but how they’re explaining their decisions. Social media has transformed the media. United’s bad month (including the “leggings incident” before the infamous “re-accommodation”) was made terrible by the wall-to-wall coverage provided by Twitter, Facebook, YouTube, and other channels. Social Media means there’s a reporter in every seat today, and their content can go viral in minutes. Book-aways, a plunging share price, and irreparable brand damage can result. The once iconic “Fly the Friendly Skies” is now and forever a punch line to a bad joke. All carriers would be wise to examine their crisis plans and employee training manuals to ensure they are up to 2017’s standards.

Opioid Policy Issues Continue to be Center Stage at the State House

By: Chris Niles

The recent announcements of two major private initiatives, RIZE Massachusetts and the Grayken Center at Boston Medical Center, focused on the treatment and prevention of substance use disorders are welcome additions in the fight against opioid addiction in Massachusetts. The misuse of opioids continues to take lives at a frightening pace in the Commonwealth and presents a complicated challenge to elected officials and policy makers across the United States.

Early data from the Massachusetts Department of Public Health indicate that 2016 was another devastating year as opioid overdose fatalities will approach or exceed 2,000 deaths, the deadliest year thus far. As of now, 1,465 deaths are confirmed with another 469 to 562 estimated to be designated as an overdose fatality. Equally shocking is that these numbers would have been much worse if not for the availability of the drug naloxone, used to reverse an overdose, which was administered approximately 12,000 times in 2015 (the last year data was available). Most recently, a report by the US Office of Health and Human Services found that the Commonwealth had the highest rate of opioid related Emergency Room visits among 30 states included in the study.

The sheer scope of the opioid epidemic in Massachusetts will require a sustained effort over many more years to bring under control. For over a decade the Commonwealth has increased resources, made significant policy changes and raised awareness about stigma in an effort to curb the epidemic. The Legislature has passed a series of omnibus bills over the last several legislative sessions to address different but interrelated aspects of the epidemic. Laws and regulations have been strengthened to mandate prescriber education, to encourage regular queries of the Prescription Monitoring Program by prescribers, to provide education to students, to improve access to quality treatment and to supplement treatment capacity. The implementation of the Commonwealth’s 1115 Medicaid waiver will add new resources and capacity in critical areas of the continuum of care and the system of five Recovery High Schools offer students with substance use disorders a safe and supportive environment to continue their education.

The Legislature also authorized a study, the Chapter 55 report, by the Department of Public Health in cooperation with other state agencies that utilizes pooled state data to try to identify patterns and gain a more comprehensive understanding of the underpinning issues of opioid misuse in Massachusetts.  For many years, hard data about the opioid epidemic was hard to come by, either siloed in agencies across state government or simply not collected. The data and analysis in the Chapter 55 report confirms that we are not facing an epidemic of misuse of only one class of drug, rather an evolving epidemic of misuse of many substances. The surge of fentanyl use in particular, identified in 75% of overdose fatalities in one set of recent data, combined with the emergence of carfentanil and the presence of benzodiazepines in postmortem overdose reports all illustrate the dangerous mix of chemicals that are being misused and are a driving factor in these fatalities. The changing nature of the epidemic over time has made it a moving target for providers, regulators and law enforcement.

As the Legislature considers its next policy priorities on opioids, we’re likely to see an emphasis on adding tools to sustain a client’s long term recovery in their community, one of the more elusive and frustrating aspects of this chronic disease. In many ways, policy makers have worked through many of the immediate challenges but the buildout of a comprehensive response is not yet complete. While many of the pieces are in place or coming online, pulling all of the components of treatment together to create a streamlined continuum of care that will be evidenced based, efficient and effective for clients remains a work in progress. The workforce challenges faced by the provider community could also present a chilling effect to the state’s response. As new programs open or expand  the demand for qualified professionals in the field is a pressing need across the state and attracting significant numbers of new staff will be critical to building a sustainable network. Additionally, training more medical professionals in addiction medicine and training existing staff in the latest advances in the field will help improve provider capacity. While much was done through the STEP Act around prevention, research and policy continues to develop around how to best identify opioid misuse at the earliest stages. The use of data to target resources and analyze trends is a new and important resource and some hope the application of mobile technology could be part of the solution.

Many of the remaining opioid policy issues are also intertwined with other challenges we face in Massachusetts but are crucial to the opioid epidemic as well. Affordable housing and homelessness, gaps in education, lack of job skills or work experience, complicated family dynamics, criminal records, co-occurring disorders and collateral health issues can all face clients as they work to sustain recovery. With the additional attention and resources that have now been brought to bear, perhaps we’ve reached a critical mass and a more robust understanding of what it will take to treat this public health crisis.

CEO’s Corner: February/March 2017

220px-Thomas_P_O'Neill_IIICampaigning is different than governing. President Trump recently unveiled his budget blueprint and in doing so formally, he made clear his policy plans for our country. At the state and municipal level, the proposed budget doesn’t bring good news. If adopted, the budget would dramatically impact the ability of America’s urban mayors to continue to operate healthy, thriving communities. This was the message I delivered in an op-ed that ran in CommonWealth Magazine last week.

At the intersection of policy and budget are real people – yet his proposal fails to make that connection. This long tally of crucial cuts will affect cities from Portland, Oregon to Portland, Maine. The reductions don’t just weaken or eliminate essential federal programs intended to help disadvantaged families, but they strike at the very core of America’s cities – the places that drive so much of our current innovation and economic development – and their ability to function and thrive. After all, the private sector cannot prosper when basic public services such as transportation become severely hobbled.

From a $6 billion cut to Housing and Urban Development that will devastate affordable housing, development and public parks, to the elimination of Amtrak subsidies, to a massive $16.2 billion cut to public transportation – taken together it is a recipe for stopping cities in their tracks, stymying growth and development and throwing a wrench into the engine that makes our country run – our great urban centers. Take one example: a $2.3 billion cut to matching federal funds for new or expanded public transportation projects that are co-funded by cities. More than 40 cites, from Albany to Tempe, will lose new subway systems, tramways, light rail and assorted other carbon-cutting, people-moving job creators.

Some of the cuts directly impact households. A cutback of more than $4 billion will decimate Health and Human Services programs, including Home Energy Assistance. So, what is the plan when the elderly and poor in Chicago and Boston and Seattle cannot afford to heat their homes next winter? Section 8 landlords will lose tenants, urban hospitals will lose grant dollars, urban colleges will see huge cuts, and public housing will suffer catastrophic drops in funds for everything from vouchers to maintenance and construction money. The list goes on.

Federal budget impacts will be locally significant and very real. However, submitting a budget is much easier than persuading Congress to pass it. States, municipalities and individuals must carefully scrutinize the president’s proposal and make their voices heard in Congress – just as they did in the failed attempt to “repeal and replace” the Affordable Care Act. The time to engage Congress is now.

 

President Trumps’ Address to a Joint Session of Congress: Reactions and Unanswered Questions

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By: Jennifer Krowchun

Last night President Trump laid out before Congress and the American people a list of campaign promises and a 50,000 foot view of his vision for our country.  A number of broad ideas were presented, some very partisan and others that could find supporters on both sides of the aisle. With no specific details on the table, the President has left Congressional Republicans with the task of developing realistic legislation within the $4 trillion federal budget and that doesn’t increase the deficit.

Economy

President Trump reiterated his request that Congress draft and pass legislation that would produce a $1 trillion investment in U.S. infrastructure — financed through both public and private capital — focused on creating millions of new jobs and on buying and hiring American.  For Congress to even consider a major infrastructure investment, it will first need to address the repeal and replacement of the Affordable Care Act.

Healthcare

Everyone can support a healthcare plan that calls for cheaper drugs and insurance costs for patients and doctors, coverage for pre-existing conditions and more resources for states to address Medicaid coverage – but the fundamental issue is finding ample funds for these programs if the Affordable Care Act is repealed. Democrats have long championed the need for paid family leave and affordable childcare and President Trump embraced this last night in an effort to portray a message of unity. Still, what is the plan to make this more than a talking point?

On the idea of Heath Savings Accounts, some see these as good policy as they require employees to plan for healthcare expenses in the future.  However these accounts are often tied to high deductible health insurance plans and affect middle class families whose budgets are already stretched thin.

Immigration

The theme of the President’s speech was “the renewal of the American Spirit.”  Immigration is a cornerstone of our country and its vast economic impacts across industry sectors needs to be recognized and addressed seriously.  Corporations, universities, hospitals, financial institutions are already dealing with the consequences of the first executive order that was halted the by federal courts.  Going forward, what will future enforcements look like and what will they cost the economy?  What will they do to our international relationships?

In the end this address was good for the President’s base as they continue to feel that they are being heard. The coming weeks should be interesting and informative as policy details emerge and budget implications become clearer.

The President’s Budget: An O’Neill and Associates Education/Refresher on the Federal Budget Process

As we continue to assess the Trump administration’s policy initiatives, there is growing anticipation surrounding President Trump’s first budget. As we approach this milestone, we thought it would be helpful to share this review of the federal budget process.

Every year the President of the United States submits a budget request to Congress that is drafted in close coordination with the Office of Management and Budget (OMB). The budget request outlines funding levels for all federal departments and independent agencies, including spending and revenue proposals as well as any new policies and initiatives with significant budget implications.

The Budget and Accounting Act of 1921 says that “the President submit the budget between the first Monday in January and the first Monday in February.” More recently, Presidents have traditionally sent a budget request to Congress the first week of February for the coming fiscal year, 2018 in this instance, which begins on October 1st. The budget submission is typically delayed in a new President’s first year in recognition of the complexities of transition.  Before the inauguration, the transition team indicated that we might anticipate a draft proposal or “skinny budget” from President Trump in the first 100 days. However, recent reports suggest that the Trump administration may be preparing a full budget request for as early as mid-March to late spring. This timing is not really surprising as the President’s nominee for OMB Director, South Carolina Representative Mick Mulvaney’s was only approved by the full Senate on February 16th – the longest confirmation wait for an OMB director ever according to RollCall.

More information on the agenda and funding priorities of the Trump administration will likely be revealed when the President addresses a joint session of Congress on February 28th.  President Trump’s speech will not be a formal State of the Union address. Newly inaugurated president’s often deliver a speech on their agenda and goals rather than an assessment on the state of the country. White House Press Secretary Sean Spicer said at a press briefing today that we can expect the President’s speech to include broad policy initiatives, focused on defining success, as well as look back at what he has accomplished the last month. Additionally the President will share some of his goals to work with Congress on healthcare, tax reform, and infrastructure.  O’Neill and Associates’ federal lobbyists will be live tweeting the speech. You can follow along at #OAPolitics and a follow up analysis will be posted to our blog as well.

Once the President’s Budget request is finally released, it is referred to the House and Senate Budget Committees and to the Congressional Budget Office (CBO) for an analysis and scoring of the proposal to project the budgetary impact of policies.  With the budget request and CBO budget report, the committees each submit a budget resolution in the House and Senate, respectfully.  Budget resolutions have traditionally been submitted in early April, but we anticipate a later timeframe this year. The House and Senate each considers its own resolution before voting on and passing the resolution.  Once passed, the House and Senate each names a handful of members to a joint conference committee to negotiate a conference report – a reconciliation of any differences between the House and Senate budget resolutions. The final joint budget resolution must be approved by both the House and Senate to be binding. Interestingly, the budget resolution is not a law and does not require the President’s signature. However, it is a guide for Congress in the appropriations process. In a future blog post, we will take a more in-depth look at the appropriations process and the role of Congress, the President and even the role clients can play with former House Appropriations Committee staffer, O’Neill and Associates Vice President AmyClaire Brusch.

Development Boom’s Benefit to Boston Residents

img_6120By Chris Tracy

With new development often comes neighborhood concern. Any project that adds more density, residential units and vehicular traffic to streets can cause anxiety and fear of what’s to come from new development. Boston is no stranger to these challenges; Bostonians love their unique neighborhoods and the quaintness that each individual neighborhood has to itself.

During the past few years, Boston has undergone tremendous growth, not only in the downtown and urban core but in every neighborhood in the City (Read about Boston’s Building Boom).  At some point in the development process, every project encounters residents who care deeply about their communities and are concerned with how their community might change. Some residents view new development as only catered to a future resident, with no benefit to existing residents. This is why the Boston Planning & Development Agency (BPDA) and City of Boston staff often are met with the question from current residents: “How does this benefit me?”

Two recent Boston Globe articles (“Boston Reaps Tax Windfall from New Construction” and “Average Boston-Area Rent Falls for the First Time in Almost 7 Years”) have addressed how building new units and adding residents to the tax base can actually be a positive thing for current residents. In addition to softening tax bills for homeowners and lowering rents for renters, the new development and added tax base generates additional revenues for City services.

Every project will have supporters and detractors and messaging is central to both sides. Change is not always bad, and often times can have a tangible benefit to those who at first glance may not like the change being discussed.

To learn more about our community relations services visit our website www.oneillandassoc.com or call us at 617-646-1000.