 Your staff has alluded to the possibility of acquiring individual houses, duplexes and four-plexes in some state of economic or physical distress in order to provide homes to the City’s low income residents. We have repeatedly noted that the AHA has no money to acquire the units, rehabilitate them and run them. Even if money for acquisition were discovered at the federal level (as an aside, it does not exist), the operation of these units would be hugely inefficient and cost prohibitive for the AHA to operate and manage. We do not believe the City has the money for the acquisition and operation of these units. Furthermore, assuming that the City (or some other federal or state resource) had the money to acquire and rehabilitate foreclosed homes, the expense of acquisition and rehabilitation of those units to meet the requirements of Fair Housing, Americans with Disabilities Act, and Department of Housing and Urban Development ("HUD") Housing Quality Standards would, likewise, be cost prohibitive, making this a very unattractive model to meet the City’s affordable housing demands.

But if one spends a little bit of time just thinking through the difficulties of financing an acquisition of this number of units and then adds the costs of operating them – insurance, cutting the grass, replacing driveways, replacing kitchens, bathrooms, and roofs – and those are the known and expected costs – one begins to see that this is a very expensive alternative for both the AHA and the City and that the expense will only increase over time. Many of those assets are old improvements that will need major capital investment over and above those cited – foundation work and other work – the cost makes little sense unless a federal or state source exists for financing the acquisition of the units (no such fund exists) and such an acquisition made sense to the AHA as a landlord (it does not).

 It is undeniable that our city has been impacted by the nation’s real estate crisis. We have never contested that foreclosed upon homes are, for the moment and the immediately foreseeable future, opportunities for people to have housing for cheap rent if those homes are available. Many of those homes are not available to rent for many reasons. The foreclosure process itself creates big barriers and drawn out uncertainties. Even if they were to be actually available, we do not know whether those homes would meet minimum quality standards for the housing AHA provides. As an anecdote to this issue in particular, history tells us that recessions pass and that rents increase over time. The rents in the future for these homes should they become available will be less affordable if they are affordable at all, defeating the concept of affordability in this segment of housing. No one knows when that will be, but we do know it will not be 30 years from now.

 Foreclosed upon homes do not impact the supply of affordable housing. AHA’s understanding of the definition of affordable housing is that affordable housing is a supply of housing serving people earning 0 to 60% of area median income for not less than 30 years (often much longer). No owner of a foreclosed upon single family home (or duplex – or quad) commits to keep rents affordable as described above for decades. In contrast, rents for affordable units are, as a rule, not subsidized but are subject to maximums which are driven by the market place as published by HUD.

 AHA is, and has always been, open to developing affordable housing on other sites. It cannot, however, pay for land. AHA is committed to building 75 affordable housing units in Aurora on a viable, available property (again, at this point in time, there has not been identified a viable and legally risk free alternative to Jericho Circle). Certainly, we would welcome any timely constructive ideas from your office on this issue which is extremely relevant to the City and AHA.

 AHA did in, fact, sign a Memorandum of Agreement ("MOA") with the developer, CG Affordable Housing Partners, referencing the Jericho Circle site, and also specifically incorporating the context of the AHA’s April 2011 time line and community discussion process. The MOA mostly dealt with providing structure to timelines for development in general terms and, further, set forth that the AHA retained flexibility on most issues for the reasons cited above. If one reads the MOA, that fact will become apparent. Your office asked AHA to look at site alternatives, not to suspend all acts needed in the course of development. AHA’s resolution in April confirmed that it would go ahead with its obligations and strategic plan, working up to the anticipated Fall financing application deadline. If another site is selected or becomes available, the parameters are unlikely to change and the chosen developer would undertake the development for that site. It seems from the reactions to AHA’s consistent progress according to its very open plans, like AHA’s recommitment to work more closely with the City has been wrongly turned into expectations and claims that AHA just abandoned all of its obligations and its strategic plan and was starting with a totally blank slate about doing anything at all. That is just not the case, and it is unfair to criticize AHA and its Board for doing what it said it would do all along.

AHA has proposed to phase development at Jericho Circle over a course of years. The current market study supports a first phase of 75 units at Jericho Circle. Any future development of units, regardless of the number of units, would depend upon a market study demonstrating a need for the units, more land, and better services. We do not deny that our broader aspiration for all 3 phases over the course of twenty years is to build 225 units, but that is an aspiration and nothing more. We are immediately focused only on phase I designed to produce 75 units.

It is also worth mentioning here that AHA’s concept of a revitalized community through a mixed income/mixed finance development includes a strong commitment to a focus on community amenities and education that center on children and their education. In this way, AHA and its developer hope to partner with Aurora’s community service providers to enhance the lives of the children in its developments and to be a supportive partner to education providers.

 Much has been made about HUD’s statements during your meeting with HUD staff, Mr. Lawrence’s conversations with HUD staff and our own meeting with HUD. HUD has actually been very consistent in its message to AHA and the City: we do not expect public housing, but we do expect affordable housing of some kind in the City of Aurora. HUD’s letter authorizing demolition of Jericho Circle – to date, the only express statement of HUD policy - is quite clear: as a condition to the permit to demolish, AHA must provide affordable housing to the City’s residents – but it need not be public housing. The recounted conversations others have had with HUD notwithstanding, the confusion about HUD’s position seems to be everyone else’s but HUD’s and ours. We have never maintained that HUD has issued an edict to rebuild public housing at Jericho Circle; we have maintained that HUD has issued a condition in the context of an authorization to demolish that affordable housing must be built to address the needs for affordable housing in the City. Regardless, more clarity is better than less, so we welcome whatever clarity HUD might provide.

 In order to remain completely transparent, we are revamping our web site postings of relevant documents concerning AHA’s redevelopment efforts, and will be posting documents, letters, communications and memos on the Web site, so that the community can more closely track our efforts. The AHA is not a City department. While we are appointed by you and we serve the City, we are an autonomous agency. We will always strive to work in tandem with you and the community to the fullest degree possible provided it does not impair our mission to provide our community with safe, decent and affordable housing. Our Board is an all volunteer Board, doing the best it can in difficult circumstances. They did not (and I might say I did not) deserve the threat of impending replacement or the hostility that we have received. We have been very transparent in all our dealings. Other than the Board’s executive sessions in its ordinary course of operations, nothing has been done behind close doors or surreptitiously with respect to Jericho Circle (or anything else, I might add) – the public record establishes that fact.

 It may be more helpful to the situation if we were all mindful of the many needs and issues that we are trying to address and respect the fact that people of exceedingly good faith with a lot more information than many are doing their level best to do the right thing by the City, the City Council, you and all the other stakeholders – and the AHA as well – recognizing that not everyone is going to get what they want out of this issue. Every solution here will be imperfect by its nature; it would be immensely helpful to AHA and all of the stakeholders if individuals would listen more carefully before they attacked our character, competency or intent. Our Board and the AHA’s staff deserve that much. We, of course, will commit to becoming better listeners.