In July, Stan Marvin, Director of the Housing Finance Agency (HFA), was evaluating the results of the State Housing Assistance for Rental Production (SHARP) program, one of several programs under the agency's auspices. SHARP, which had been in existence for only two years, had just completed its second “competitive round,” and Mr. Marvin felt that this was an opportune time to review the program's functioning. He was particularly interested in the system by which projects were selected for assistance, and questioned whether either the selection criteria that had been established and modified once, or the selection process itself, should be modified prior to the third competition.
The HFA was created by a legislative mandate for the purpose of increasing and improving the supply of standard housing for the state’s residents. It was intended to focus particular attention to the needs of low-income elderly, and other disadvantaged sectors of the population. The agency operated a variety of programs for homeowners and tenants, including mortgage assistance, loan arrangements, and interest subsidy payments for single- and multi- family housing.
Organizationally, the agency was a semi-autonomous arm of the state's Executive Office for Communities and Development (EOCD). The agency's board of directors was composed of nine community, housing, and financial representatives selected by the Governor, plus two cabinet secretaries. The Board set overall policy and had veto power over virtually all agency activities and decisions. Because the HFA was a semi-autonomous organization that functioned according to its own internal operating procedures, the state's role normally was limited to the involvement of its representatives on the board of directors, although on occasion it had exercised some discretionary authority over agency operations.
The HFA staff consisted of approximately 200 people, many of whom had a background in banking, management, housing, architecture, and the real estate appraisal industry. An emphasis was placed on recruiting people with “real world experience” and technical expertise in the agency's line of business.
History of the SHARP Program
The HFA traditionally had served as a channel for federal subsidies, including both the “236/Rent Supplement” and “Section 8” programs. These programs were subsidy programs that provided assistance to developers of rental housing, particularly for low-income and elderly residents. They were administered by the federal Department of Housing and Urban Development (HUD). Both programs were exceedingly generous, providing what have been . . .
- What are the key elements of SHARP's strategy?
- What are the incentives for developers? Please be as specific as you can: If you were a developer, how would you make money on a SHARP project as compared to other potential projects?
- What is your assessment of the project selection system? How does it help SHARP accomplish its goals?
- What should Mr. Marvin do?