Feb 19, 2007 2:47 am US/Pacific
Statement from Esperanza Charities
Statement from Esperanza Charities
Esperanza Charities is a 501(c)(3) charity that provides one on one home care for physically and/or mentally challenged individuals, provides grants and support for the medical care of the indigent and provides affordable housing to families in the county of Los Angeles.
An important charitable missions is to provide "affordable housing" for those individuals who simply need help. Unfortunately, the issue of affordable housing and the charging of directly related maintenance costs to the individual residents is a very complex and somewhat confusing issue. As to the issue of what constitutes "affordable housing," there is much confusion and legal uncertainty regarding charging tenants such direct costs in the context of the applicable legislation.
This matter has been reviewed by two independent attorneys who have advised Esperanza Charities that the issue is unclear as to charging such maintenance fees and is likely not in violation of the "affordable housing" mandates.
Under a typical Section 8 housing arrangement, the low income tenants pay a computed amount in accordance with HUD guidelines and the federal government pays the difference – the total of such payments equals the current fair market value of the house or apartment. For example, if the fair rental value for a large house in the area is $3,000 per month and the tenant can only afford to pay $300 under the HUD guidelines, the federal government will pay the difference of $2,700 per month.
However, for Esperanza Charities, there is no federal subsidy and the only payment they will receive in this example is the $300. This is often not even sufficient to pay the gardener and other direct costs. This is the sole reason why the direct maintenance costs were charged to the tenants.
No one can question that the total of the rent plus the maintenance fees for the housing provided by Esperanza Charities is "affordable" since in every case, the tenants pay less than ½ of the fair market value for a house situated in the affluent South Pasadena area.
As a result of the continuing confusion and the charitable mission embraced by Esperanza Charities, the Board of Directors and the Executive Director have agreed to forego charging for such costs until the issue has been resolved by the appropriate parties.
As to the issue of the Executive Director living in a house that was built by Esperanza Charities (not purchased from Cal Trans) – she pays fair market rental value and is then not an issue.
