PHFA delivers $7.9 million for shale-area housing relief


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As prices for housing skyrocketed in the Marcellus Shale region, the Pennsylvania Housing Finance Agency (PHFA) based in Harrisburg is directing $7.9 million in funding to help alleviate the situation.
The cash, which will be applied to 25 housing projects of various types, will flow from the Pennsylvania Housing Affordability and Rehabilitation Enhancement (PHARE) Fund, as well as Marcellus Shale impact fees.
Bruce Maretzki, director of business development with the PHFA, notes that more than $200 million has already been paid by drilling companies to Pennsylvania’s Public Utility Commission — much of this will be funneled to local municipalities and state agencies, and the resultant process has allowed 10 counties to apply for PHFA money through 29 applications.
“The state’s southwest area has different housing needs from those in the northeast sector, where rental assistance is vital,” says Maretzki. “In the northeast, many landlords have jacked up rents, sometimes doubling and tripling them, due to increased needs for gas-industry-related housing. In response, we are helping to pay for rehab to existing rental stock, or in other cases new construction.”

Changing market

According to Maretzki, the Marcellus region has witnessed several distinct changes to its housing market since gas well drilling began. The first wave involved gas wildcatters from the south and west arriving, often staying at hotels or temporary rentals while they developed specific wells, and then returning home.
The second phase featured local residents being hired into gas-related jobs. These workers, many of whom saw their earnings jump exponentially, wanted better housing. The onset of downstream economic development then fueled the latest phase of changes, as housing became needed for long-term employees and ancillary gas employees. Landlords jacked up rents, forcing many elderly and low-income renters out as prices rose.
Maretzki adds that the PHFA funding program will continue in 2013, and that the financial awards will probably rise.
“We’re asking each of the applicable counties what their community will look like 10 years from now, because they need a long-term strategy for housing needs,” says Maretzki. “The natural gas business is here to stay.”

Rental commitments

The Susquehanna County Housing and Redevelopment Authority will receive $411,000 from the PHFA to assist landlords, according to Bobbi Jo Turner, grants administrator. This funding will be dispersed on a first-come-first-serve basis, up to $20,000 per unit, after three bids are received per project.
“To receive the money, landlords must agree to a 10-year commitment to rent to low income individuals,” says Turner. “The money must be used to bring the rental structures up to code, involving things such as windows, doors, a furnace, and electric service.”
She adds that the majority of working-class residents in her county are still not making as much money as the gas workers, despite the recent lull in drilling. Fortunately, long-term homelessness has not become a real issue.
“Yet, rental rates have doubled here for the 3,660 rental units in the county,” says Turner. “This all happened so fast that many lease renewals are just not happening.”
John Jennings, executive director of the Wyoming County Housing and Redevelopment Authority, says his organization will receive $1,000,050 from the PHFA. A rental rehab program will use $750,000 of this to update existing rental structures.
To qualify for funding, landlords must promise to rent to low-income eligible tenants for seven years. The program is emphasizing a big push on energy efficiency, involving up to $18,000 in rehabilitation per unit. “There are a limited number of rentals in the county,” says Jennings. “Many of the available mobile homes are now off the market.
The authority is also purchasing two acres in Nicholson, involving four lots, for $300,000. Housing will eventually be built on the lots, possibly offered through a first-time homebuyer program. “Qualifying tenants will be the first step,” explains Jennings.

Ground zero

The Williamsport area has become ground-zero for the Marcellus gas industry, and the Lycoming City Planning and Community Development Department is therefore receiving $1.1 million in PHFA funds, according to Kim Wheeler, community development lead planner. This will be accentuated by city ACT 13 money as part of the Williamsport Housing Strategy 2012, with projects contingent on a developer achieving tax credit approval.
“Our plan calls for a total of $26.5 million in investment,” explains Wheeler. “This will flow 15 percent from the state, and 80 percent from private dollars.”
Initial PHFA funds of $500,000 will be used by the Authority to redevelop a brown-field site where a furniture manufacturer once operated. Renovation to the vacant building requires asbestos removal, as well as comprehensive rehabilitation.
“We are going to rebuild the site with private townhouses and 40 quality apartments, if the tax credits go through,” says Wheeler.
A second housing project emanating from the Authority seeks to use $200,000 plus city funding to rehab 150 existing homes around the renovated brown-field site. This will emphasize both interior and exterior renovation, bringing the structures up to modern building codes.
Additionally, a $550,000 two-year project is being planned in partnership with SEDA-COG that will create 32 senior independent living units known as the Grove Street Commons. This will address a multitude of housing needs on a former green space over 25 acres.
According to Wheeler, 200 people are the waiting list to occupy this site. “At one time, rents here doubled because of the gas industry, but have since stabilized at a 40-percent to 60-percent increase,” says Wheeler. “This has raised the price of housing, and makes our work very important.”