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    Saturday, July 13, 2024

    The moldy truth about corporate cashflow and Section 8 housing

    Section 8 housing is a federal program that provides rental assistance to low-income individuals and families. In New England, it has a reputation for being poorly maintained, which is often due to a lack of investment by the mostly corporate landlords who own them. According to a 2019 National Low Income Housing Coalition report, 39% of Section 8 units in New England required major repairs. This is significantly higher than the national average of 28%. The lack of investment in Section 8 housing creates unhealthy and unsafe living environments for the families and children who live in these homes.

    Like in many other cities across the state and nationwide, Groton's Branford Manor benefits from taxpayer-funded low income loans and tax breaks. Landlords often demand and receive these benefits as a condition of investing in their properties. Large, sophisticated public housing operators like Branford Manor's corporate owners often generate significant profits with little oversight of their complex financial structures or varying accountability standards. This is due to the fragmented nature of government oversight, with federal, state and local agencies having different roles and responsibilities.

    As current town manager John Burt attests, the tens of millions of dollars in local tax forgiveness given by Groton taxpayers in 2017 was explicitly granted for Branford Manor’s corporate owners to protect Section 8 housing and income-limited rental housing in town.

    In other words, the Groton taxpayer was obliged to fund the improvements necessary to keep Branford Manor’s corporate landlord in town and qualified to be in the Section 8 federal housing program. Under the agreement Related Companies, the owners of Branford Manor, committed to use the taxpayer dollars they reaped from Groton taxpayers for specific upgrades and improvements to the property. These items are spelled out in the tax incentive agreement in “Exhibit 1 Description of Improvements.”

    Without an audit, it is impossible to know the exact origin of this specific list of repairs and improvements. Still, it is clear that they were in some way part of the required repairs and upgrades that Related Companies needed to complete for Branford Manor to comply with federal requirements, win its HAP contract renewal, and continue to house Groton's most vulnerable families. Why else would Groton taxpayers agree to fund them?

    Even after the landlord received all subsidies, HAP renewal and preferential financing terms our system offers, Related Companies still failed to follow through on most of this list's repair and improvement commitments.

    The town of Groton has placed the corporate owner in default of the tax incentive agreement. Sadly, this is factored into many corporate owner's tactics. In this case, even if the town of Groton took the unprecedented step of revoking the funds entirely, the landlord never spent the money anyway. They keep, without penalty, the loans and subsidies granted to them that were based on their commitment to make these improvements. This financial bait-and-switch game will only end once the rules change. As Ice-T says and the finance bros on Wall Street live by, "Don't hate the player, hate the game."

    The mold infestation at Branford Manor has been well documented and reported. Residents continue to suffer from Related Companies' failure to uphold this 2017 agreement to repair or replace the systems causing the problem. The lack of oversight of this agreement is directly responsible for the ongoing suffering of families and children at Branford Manor.

    It is a fact that families and children at Branford Manor have been living in squalor and mold because their landlord broke a tax agreement with the town. The agreement required the landlord to replace or install hundreds of kitchen and bathroom fixtures, appliances and exhaust fans, as well as insulate all building basements and crawlspaces, to name just a few. Instead, the landlord pocketed the tax breaks and left these families to suffer in unsafe and unhealthy conditions.

    Connecticut's congressional delegation, U.S. Rep. Joe Courtney and Sens. Richard Blumenthal and Chris Murphy, believes HUD has no role in enforcing local tax-incentive agreements such as the one Groton granted Branford Manor. They also believe an audit of this country's public housing funding system by the Congressional Office of Inspector General (OIG) is unnecessary.

    I think they are wrong. You should let them know that you do too.

    Robert Boris is currently serving as chairman of the Groton Economic Development Commission (EDC). He is a technology entrepreneur and president of Command Technology Inc., a software company specializing in the defense, aerospace, power and marine industries.

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