Papen’s affordable housing bill moves forward

A bill that would remake the state’s affordable housing system was approved by another Senate committee today.

Senate Bill 519, sponsored by Sen. Mary Kay Papen, D-Las Cruces, would, over a period of several months, shut down the state’s scandal-plagued regional housing authorities and replace them with a system overseen by the New Mexico Mortgage Finance Authority.

The bill would also provide for audits of each of the seven housing authority regions to determine the extent of the mismanagement first revealed last year when Frances Williams, a member of the Las Cruces-based Region VII board, complained about problems. Several weeks after she went public, the Region III authority, based in Albuquerque, defaulted on $5 million in bonds it owed to the state.

On a 7-0 vote with two members absent, the Senate Corporations and Transportation Committee approved the bill this afternoon, but not before its members asked some tough questions. The bill now moves to the Finance Committee before it can be considered by the full Senate.

Current state law creates seven regional housing authorities, and officials agree that two of them are functioning well. About 10 employees of those two showed up today to ask what would happen to them if the bill becomes law.

They are currently state employees, but that could change under the new system. The system calls for the housing authorities to be replaced by contract services, either with private non-profits or cities or counties that run affordable housing programs.

The employees opposed Papen’s bill because of the uncertainty it would create for them. They said they don’t oppose more oversight, but want to be able to remain state entities.

Officials from the MFA responded to questions by saying that, if the two well-functioning regions based in Roswell and Silver City wish, they can remake themselves into non-profits or work with cities or counties to create housing organizations. If they work with cities or counties, their employees can retain state benefits.

Before that happens, however, they must go through a competitive bidding process and be selected by the state to provide services.

Joseph Montoya, deputy director of the MFA, said that was likely, if the two regional organizations opted to apply for such state contracts, because they are the only organizations in their regions of the state with the expertise and experience to provide affordable housing.

Sen. Shannon Robinson, D-Albuquerque and the committee’s chair, worried, however, that some of the employees would suffer as the state transforms its housing system.

“I think you’ve created a solution of sorts, but there’s innocent bystanders here,” he told Papen and MFA officials. He urged them to work with the two regions that are functioning well to find a solution.

A lobbyist for the Town of Mesilla and an official with the New Mexico Conference of Catholic Bishops both told the committee their organizations endorse Papen’s bill.

Allen Sanchez with the Catholic conference said the Las Cruces diocese has determined that the new “streamlining” system “would benefit people faster than the current system.”

Papen encouraged by passage

After the hearing, Papen said she was pleased.

“It’s a move forward. New Mexico is not a wealthy state, and we need to be able to provide housing for those who need it,” she said.

As to the worries of the two authorities that are currently working well, Papen had this to say:

“That’s an excellent track record for them, but it’s not an excellent track record for the state,” she said.

Papen said the bill has the endorsement of Tierra Del Sol, a private affordable housing group in Las Cruces, and the City of Las Cruces’ affordable housing program. She said they are prime examples of public and private organizations that can take over services that were previously under the regional housing authorities.

“In Las Cruces, we have two extremely successful programs,” Papen said.

Lujan signs on to House version of bill

Last week, a group of House members introduced a bill that mirrors Papen’s. House Bill 997’s primary sponsor is Rep. Janice Arnold-Jones, R-Albuquerque, but it carries a number of signatures including, interestingly, that of Speaker of the House Ben Lujan.

The housing authority scandal is a hot potato in the Legislature because of the relationship between Lujan and former Region III Housing Authority Director Vincent “Smiley” Gallegos. Gallegos is a former legislator and current lobbyist who, in past sessions, has spent a lot of time in the speaker’s office.

Among the scandals that have plagued the housing authority was the disclosure late last year that a top aide to Lujan, who may not qualify for low-income housing, had been living rent-free in a home owned by the Region III authority. After the situation was revealed by the Albuquerque Journal, the aide paid back rent. She continues to live in the home.

Lujan has repeatedly said he didn’t know about the situation until a reporter told him about it, but concerns about his relationship with Gallegos were among the reasons some House Democrats supported Majority Leader Ken Martinez of Grants in December in his failed bid to become speaker.

Several sources confirmed for me that Lujan signed on to the bill, which means that he agrees with it, at least in principle. Though he signed on to it, Lujan assigned the bill to three committees – health and government affairs, business and industry and appropriations and finance.

Lawmakers generally agree that the speaker assigns bills he wants to pass to two committees, but makes those he wants to slow or kill pass through three committees before reaching the floor of the House.

Lujan has not returned my calls seeking comment.