Praxia Partners Publishes Report on Water Equity In Detroit

Praxia Partners, in collaboration with the Haas Institute for a Fair and Inclusive Society at the University of California Berkeley and Detroit’s Metropolitan Organizing Strategy Enabling Strength (MOSES) published a new report today on Detroit’s water system titled “Water Equity and Security in Detroit’s Water and Sewer District.”  Detroit Water Equity

MOSES, a faith-based advocacy organization, came together to push for the study in partnership with a dozen other local groups based on concerns over water affordability and infrastructure concerns dating back prior to the city’s bankruptcy. With the support of both Praxia Partners and Haas, this report has now been delivered to the public, to leadership, and to other cities that will be addressing their own water insecurity challenges in the future.

The report outlines the health, social and environmental impacts of water shutoffs in Detroit and it lists seven broad actions that should be taken to address disparities in water access and the system’s governance in Metro Detroit.

You can read more about the report from the Haas Institute website, or from the Detroit News.

You can also read the entire report here.

Inquiries regarding the report can be sent to

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See our presentation from n4a

If you attended the National Association of Area Agencies on Aging’s n4a Annual Conference this past week, you may have seen our founder, Joe Recchie, presenting on our new model for developing affordable housing for older Americans. But if you missed it, don’t worry–you can view the slideshow here.

If you have any questions about how to apply this model to your own organization, feel free to contact Community Building Partners for a consultation. We’d love to help you find a way to move your mission forward.

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Every little bit counts

It is very difficult for an apartment complex that serves low-income senior citizens to break even without some form of a subsidy or incentive. These can come in many flavors. Layering the subsidies on top of each other can result in a complex that is breaking even with a relatively low average rent.

Those subsidies can include low-income tax credit programs (such as the 4% tax credit), grants from Community Development Block Grants or HOME Investment Partnership Program, tax abatements from local governments and taxing districts, discounted or donated land, and tax credit “bonuses” for locating the project in a hard-to-serve area (known as “130% areas” because of the multiplier applied). Not every project can obtain every one of these subsidies, but every subsidy used not only lowers the break-even rent, but also expands the number of elderly people who can take advantage of the apartments to live in dignity.

For example, say the average rent of an apartment in a building restricted to senior citizens—just enough to pay for the development, construction, and continued operation of the building.—is $1345. There is a market for such an apartment, but many seniors have a limited, fixed income, and are priced out of it. Financing the building with tax exempt bonds limits it to tenants below a certain income threshold, but would reduce the hypothetical break-even rent to $737, making it more attractive for more people. Adding 20% of the financing from state and federal grants brings the average rent down to $622; getting a tax abatement from the local government can bring it down to $539; and locating the project in a hard-to-serve 130% area can bring that even lower, to $488. Not only does such a low rent mean the building will have little trouble filling up, but it also means a wider range of people can be served.

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How non-profits can do well by doing good

Developing affordable homes for senior citizens does two things for non-profit entities. First, it gives them an independent, unrestricted program revenue stream to fund their activities. Second, it provides a critical service to the people the non-profits were founded to serve.

First, if a non-profit can get land for affordable senior housing donated, they get the value of this property as soon as the project is closed on.

Second, when the project is built and ready to be placed into service, the non-profit can earn up to 15% of the project’s cost as a development fee. While some of this fee must be used to pay for the non-profit’s own staff time and the fees of any development advisers, the rest can be considered unrestricted program revenue.

Third, when the limited partner is retired (usually after 15 years), the non-profit owns the project. Any value of the project over the mortgage can be taken out of the project during a refinancing process. This value can be reinvested into the project to ensure it can continue to serve senior citizens’ needs, or some can be taken out as cash to fund other initiatives. Alternatively, the project can be sold to another party, and the non-profit can use the difference as unrestricted program revenue.

There’s another way that the non-profits can earn money in this model: managing the apartments themselves. The non-profit’s leadership may be hesitant to do this if it isn’t their core competency, but Accord Management (a sister company to Community Building Partners) can take on the management with the intention of training the non-profit’s own staff to gradually take over. After a few years, Accord can hand over the reins entirely to the non-profit’s management arm, and the non-profit can keep their costs under control by “shopping from their own store.”

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Tax credits, and how to use them

The federal government encourages developers to build affordable housing by offering them low-income housing tax credits (LIHTCs). Developments that meet certain criteria earn tax credits that can be used to offset taxes they owe to the IRS. If the developer is a non-profit or another organization that does not owe taxes, they are allowed to sell that tax credit to a for-profit corporation that can use it to pay its own tax bill. Other tax credits can be earned for things like preserving historic buildings and operating solar panels.

Community Building Partners is focused on using the 4% tax credits, which covers 30% of the costs for low-income housing projects. This credit has the advantage of being issued noncompetitively, which means there is more certainty in the financial planning process.

In the case of a nonprofit developer, the developer will form a limited partnership, a legal entity to control the project. The developer will be the general partner, with control over the operations of the project. One or more investors will come on as limited partners, with limited authority to make decisions. However, the limited partner will buy a large majority—usually 99%–of the partnership. This allows the limited partners to take virtually all of the tax credit, the depreciation on the building, and any losses the partnership incurs—all ways they can reduce their tax bill. After a set period of time (typically 15 years) the limited partner is retired from the partnership, and the general partner owns the project.

This arrangement is beneficial to both sides. The general partner gets an investment in a project they care about, and the limited partner gets back more than their investment in tax credits and other benefits.

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Why independent living?

Studies have shown that the best living arrangement for the physical and mental health of an older person is to live on their own in their own space, if possible. This arrangement is called independent living. The person in question might need occasional help with some tasks from a home health aide or other kinds of assistance, but these services are offered separately from their rent and can be arranged for anyone living at home, whether that means a single-family house or an apartment complex for people over 62.

By contrast, in assisted living, residents have home health services and meals included in their monthly rent. Nursing care is more intensive yet, providing a higher level of specialized care to people who can no longer do most tasks for themselves. Besides being more expensive than independent living, assisted living and nursing care are not as appropriate for people who can still do most of their daily tasks by themselves.

Community Building Partners has many years of experience developing independent living homes for the elderly. Our model builds homes for the elderly as independent living; their rent pays only for their housing. By layering additional services on as needed, area agencies on aging can help their clients to stay living independently as long as possible, leading to better health for the people they serve.

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State of Ohio Awards $714,000 Tax Credit for Renovation of Historic Potter Davis Building in Cambridge, Ohio

An award from the state of Ohio brings a team planning on rehabilitating the century-old Potter Davis Building in downtown Cambridge one step closer to their goal. The $713,489 state historic tax credit was awarded after a competitive process. It is the first of its kind made to a project in Cambridge.

Vacant for decades, the Potter Davis Building is envisioned as the new headquarters for the Area Agency on Aging, Region 9 (AAA9), which coordinates care for the growing elderly population in a 9 county region serving East Central Ohio. As planned, the new building will allow AAA9 to consolidate their staff from three separate offices into one, which will cost them less to operate even as it provides them more space.

“AAA9 is very excited about the possibility of a new office, one which allow us to better serve older adults and disabled people in our region and their caregivers,” said Jim Endly, executive director and CEO of AAA9. “Getting this state tax credit is a major milestone in this process.”

The renovation of the building will maintain over 100 jobs in downtown Cambridge, and will boost the vitality of the Wheeling Avenue Historic District, a collection of vintage commercial buildings dating back to the 19th Century.

“Fixing up Potter Davis is a win for everybody,” said Norman Blanchard, Economic Development Director of the Cambridge-Guernsey Community Improvement Corporation, which has helped to sponsor the project. “AAA9 gets a new, modern office, our seniors get improved service, and Cambridge gets new investment in its downtown.”

The team is also seeking a federal tax credit to complete their financing. Current plans are for the building to be ready for AAA9 in 2018.

Besides AAA9 and the Port Authority, other members of the team include the Potter Davis Development Group (the building’s current owners), the City of Cambridge, Community Building Partners, and DS2 Architects.  Wesbanco is providing the financing.

NEWS INQUIRIES: Please call the Cambridge-Guernsey Community Improvement Corporation at (740) 432-1881.

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Universities warm to solar power

Across the nation, institutions of higher education are turning to solar power in order to commit to sustainability and to lower operating costs– and to stand out to environmentally-conscious potential students.

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Sowdo’s story

This post originally appeared on this blog on June 27, 2014

One week ago, people across the globe observed World Refugee Day. Praxia Partners calls Columbus home– and so do thousands of Somali refugee and immigrants. Meet Sowdo…

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People + the planet: Cleveland’s push for environmental justice

We love to learn about how urban centers become healthier, more environmentally responsible, and more energy independent. In the heart of the Rust Belt, Cleveland, shows us how a city can meet climate challenges while supporting equity and inclusion

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