Like the Mobile Housing Board, neighboring housing authorities in New Orleans, Huntsville and Birmingham use nonprofit arms to manage everything from the distribution of tax credits to resident services, but none had the scope of responsibility Mobile Development Enterprises has.
MDE has 23 employees, not including a maintenance crew once part of MHB’s vacancy reduction program. The maintenance employees have since been laid off, executive director Dwayne Vaughn said in a previous Lagniappe interview.
Previous Lagniappe reporting and a report released last month by the U.S. Housing and Urban Development’s Office of Inspector General revealed that MDE and the board share office space, phone lines and bank accounts. A source familiar with the inner workings of the board’s central office said some MHB employees would complete assignments for the nonprofit.
The OIG report also found that while MHB considers MDE a third-party affiliate and not technically part of the authority, its board included two MHB members and its executive director served as the nonprofit’s president.
MDE still manages the WEALTH program, which provides a variety of education and job placement opportunities for residents. The program also provides health services such as free eye exams and annual checkups, as well as classes on life skills.
MDE is also involved in the housing authority’s day care program, community relations, grant writing and asset management, Vaughn said.
Comparatively, the Housing Authority of the Birmingham District has two nonprofits, the HABD Scholarship Foundation and the Magic City Housing Development Corp., spokesman Joseph Bryant said. The scholarship foundation provides education and training for residents with donated money and proceeds from an annual golf tournament, he said. Some of the scholarship’s board members are HABD employees, he said.
The Magic City Housing Development Corp. helps pay for other activities not covered by the authority and also sponsors an essay contest.
The latter nonprofit is maintained through development fees from Park Place, a Hope VI initiative. Currently, Bryant said, there is no ongoing fundraising for it.
Bryant said HABD does not share bank accounts with either of the nonprofit organizations and neither run any day-to-day operations for the board.
In addition to MDE, MHB has created a second nonprofit called Renaissance Redevelopment LLC to distribute tax credits for the board’s portfolio-wide Rental Assistance Demonstration conversion.
This is similar to Huntsville’s nonprofit. Sandra Eddlemon, interim executive director for the Huntsville Housing Authority, said its nonprofit is used in association with a tax credit entity, but it’s not active right now. She said since the nonprofit is financed through development fees, it won’t be active until a for-profit company running the day-to-day operations of the tax credit complex turns a profit on it.
Since it’s inactive, Huntsville’s nonprofit has no employees of its own.
While some authorities prefer to use a separate entity to manage tax credits, in previous interviews with Lagniappe a spokeswoman for HUD and a spokeswoman for the Alabama Housing Finance Authority said neither organization has a preference.
“Under the RAD program, a project can be owned by the housing authority, a nonprofit subsidiary of the housing authority or any other nonprofit public body,” HUD spokeswoman Gloria Shanahan wrote. “In the case of tax credits, the properties can be owned by a for-profit, as long as the housing authority maintains its interest in the project. Since each community has different needs, HUD encourages housing authorities to evaluate all options available and choose the one they find to be the most effective for their specific circumstances, based on their plans and local situation.”
Kristi Gates, communications manager with AHFA, wrote “the way an agency chooses to structure itself is at the advice of its legal counsel.”
The Housing Authority of New Orleans, which recently redeveloped some of its properties, uses one nonprofit entity, office administrator Tomeka Jackson wrote in an email message.
The Crescent Affordable Housing Corporation has its own board of directors which includes two HANO employees and a resident.
It is operated as a subsidiary of HANO. The nonprofit doesn’t handle any day-to-day operations of HANO and doesn’t share any bank accounts, Jackson wrote. The funds for the nonprofit, like with Birmingham and Huntsville, come from developer fees. The organization doesn’t have its own set of employees, she wrote.