The Contoocook Housing Trust (CHT) was asked Tuesday to come back to the Peterborough Select Board with the incomes of residents living in three of its properties before it could receive payments in lieu of taxes.
CHT was formed in 1990 as a nonprofit 501 (c)(3) to establish and maintain housing for low- and moderate-income families while maintaining the historic and aesthetic qualities of the community, according to its agreement with the Town of Peterborough. CHT currently has 13 rental properties in Antrim, Bennington, Hillsborough and Peterborough with a total of 59 units which house more than 70 people. The buildings in Peterborough include a three-unit building on Pine Street, a 12-unit building on Shadow Lane, an eight-unit building on Grove Street and a six-unit building on High Street.
CHT’s agreement with the town, referred to as the payment in lieu of taxes (PILOT) program, would exempt the organization from the municipal portion of its tax responsibility but would require, in lieu of taxes, paying either a fixed or a calculated amount, which takes the assessed value of the property, divides it by 1,000 and then multiplies it by only the municipal portion of the tax rate. Peterborough’s tax bills cover a municipal portion, schools and state and county taxes. CHT would only be responsible for the municipal portion, which is roughly 35 percent.
Discussion on Tuesday centered around whether CHT had provided adequate information regarding the incomes of its residents. CHT board members Tricia Bell and Ron Mack attended the meeting, and Bell explained that because of “skyrocketing property values, our taxes have become a little bit of an extra burden to maintain the low-income rents.”
“We try to aim for 80 percent of market value and provide a good service,” Bell said, adding that CHT currently has no vacancies. “We’ve been trying to acquire new properties but we’re priced out of the market and we’re looking to see if there’s a way to flatten our costs a little bit.”
Bell stressed that CHT wants to pay its taxes and be good neighbors but “everyone knows prices are going up and up and up” and that the PILOT program is very helpful when it comes to offsetting costs.
Peterborough Select Board Chair Tyler Ward supported moving forward with CHT’s request.
“For all the talk we’ve done about what we can’t do about affordable housing, it would behoove us to put our money where our mouth is and do this,” Ward said. “Is anyone against that?”
Town Administrator Nicole MacStay explained state rules regarding the establishment of charitable organizations will require CHT to demonstrate its residents meet state requirements, including income verification, for being classified as a charitable organization.
“They are certainly a nonprofit, no question, and their mission meets the goals and guidelines set out by the state for housing, but there are certain guidelines the state presents for housing when it’s being looked at for a PILOT agreement,” she said. “One of those [guidelines] is that it is being consistently put to that highest use and the charitable mission which in this case is serving a low-income or workforce population.”
MacStay said there was no issue with CHT’s Pine Street property because this property is administered through a U.S. Housing and Urban Development (HUD) program and that all residents’ incomes are verified each year and the town has received all necessary documents.
“We’re not able to say that with the other buildings,” she said, explaining that when residents move in they are not certified on a regular basis. “So it’s possible that after they move in their income may be above the 80 percent of area median income.”
MacStay asked why CHT had only approached Peterborough about the PILOT program and not the other towns where it owns property.
“We wanted to start with the biggest town and see where we got because it was a lot of work to put this together,” Bell said, asking if there was something CHT could do voluntarily for annual recertification. MacStay explained that CHT is not required to submit anything to the state to operate as a nonprofit, but to be considered “charitable” the town needs to see evidence they are meeting that standard.
To be considered a charitable organization and to qualify for the PILOT program, all CHT residents “upon initial household occupancy of the unit” must have less than 80 percent of the area median income for Hillsborough County. Households in Hillsborough County have a median annual income of $82,099, which is more than the median annual income of $64,994 across the entire United States.
Tenants making more than the AMI after moving in would not be kicked out, MacStay said, adding “they may be encouraged to move out so that someone else can take advantage of the apartment.”
MacStay recommended that CHT provide verification of income for the residents living in the three properties not verified by CHT and that a PILOT agreement for the municipal portion of taxes be granted only for the Pine Street property at this time.
“We’re certainly open to doing that. That’s the whole intention of this project,” Bell said. “I will take that to the board as a suggestion.”
Bell, a commercial real estate paralegal, said she became involved with CHT – which also provides oil at $4 a gallon for its residents — because she is frustrated with the lack of affordable housing in the state.
“We just increased our rents by a couple hundred dollars and our highest rent is between $700 and $800,” she said. “These are not Section 8 people. These are single moms with two or three kids. With our people, they’re in the middle. They don’t qualify for a lot of assistance and they can ’t afford to pay $2,500 for a two-bedroom apartment plus heat. We’re paralyzed in this market because of the high prices.”