photo by: City of Lawrence screenshot

Board member Ron Gaches, who represents the Chamber of Commerce, addresses members of the Affordable Housing Advisory Board during the board's meeting on Oct. 27, 2022.

Lawrence’s Affordable Housing Advisory Board has voted to recommend that city leaders consider changes to the board’s membership or procedures following concerns about potential conflicts of interest.

The board voted 10-0 as part of a meeting Thursday to recommend that the Lawrence City Commission consider the board’s membership and bylaws. As the Journal-World reported, concerns were expressed that the inclusion on the 13-member board of four representatives of nonprofit agencies that work on affordable housing projects created a conflict of interest. The topic has led to tensions among some board members, and board Chair Monte Soukup opened the meeting by saying he hoped the board could come up with a recommendation on how to move forward and get the issue resolved.

“I know we’ve struggled with this over the past months and at times struggled mightily with this issue,” Soukup said. “My hope is that today we can have a conversation about this in a civil manner and discuss what the real concerns are.”

Soukup said he and the board’s vice chair, Edith Guffey, submitted a letter to Mayor Courtney Shipley after the board’s last meeting because they had concerns the topic was becoming an internal issue. The letter, which was included with the board’s agenda materials, states in part that of particular concern was the perception that the processes the board has created may not be completely unbiased because the nonprofit affordable housing providers have the opportunity to help shape the application and evaluation processes that are used to accept, evaluate and award funds they themselves are competing for. However, the letter also emphasized that they did not think board members had misused their seats.

“We want to be clear that we do not think anyone is doing anything intentionally or trying to manipulate the process but the possibility and perception is certainly there whether intentional or not,” the letter states.

One of the board’s main duties has been to help create the application process for the city’s affordable housing trust fund — which is funded by a special sales tax approved by voters in 2017 that generates more than $1 million annually — and make recommendations about which projects should receive grants. The commission set up the board to have the nonprofit agencies represented with the idea that the experience and expertise of those members would benefit the board. Though the nonprofit representatives recuse themselves from making funding recommendations if their agency is applying for funds, one of the concerns from board member Ron Gaches, who represents the Chamber of Commerce, was that the board’s membership had created a process that was biased in favor of nonprofit agencies over for-profit affordable housing projects.

Dana Ortiz, who represents the nonprofit Family Promise on the board, said she was on the board to represent her organization and the 300 to 400 low-income families it serves annually, and she considered that a positive for the board. She said that included speaking to the issues those families have run into with large for-profit developments, even those that do accept housing vouchers, which she said have financial requirements and other obstacles based on their business plan.

“I have to raise those, I believe, as a representative here for Family Promise,” Ortiz said. “So I just wanted to make that bias clear to this group, that I will always speak from that bias because that’s the reason I believe I was asked to serve on this board.”

Gaches, who previously voiced his concerns in two strongly worded emails to the board and some city officials, said on Thursday that he apologized for his emails being disruptive and the stress put on his relationships with other board members. Gaches said his actions came out of a desire to maintain the integrity of the housing trust fund and see the continuance of the affordable housing sales tax, which Lawrence residents must vote to renew after 10 years. He said if the board had four for-profit representatives rather than four nonprofit representatives, people would be suspicious even if those members recused themselves from funding votes.

“People would be suspicious if those folks had helped design the process and application that resulted in funding their projects,” Gaches said. “The appearance of a conflict of interest is important. It should be avoided if we want to preserve the public trust.”

Shannon Oury, who represents the Housing Authority, said there were key differences that needed to be considered between nonprofit affordable housing projects and for-profit projects. Oury said that every single Housing Authority project is deed-restricted so that the housing will only serve low-income people in perpetuity.

“(That) is very different from a for-profit project, which at the end of the tax credit process will benefit the developer who we fund,” Oury said.

The for-profit projects typically put rent restrictions in place for a specific time period, often 30 years but sometimes less, and Oury said the board needed to acknowledge it was dealing with two different models. Considering that, she asked why wouldn’t all the funding go for the public benefit and any organization willing to put a permanent deed restriction on a property.

“I do not think the comparison is apples to apples,” Oury said. “Because (with) none of the four nonprofits do the individuals personally benefit from the projects. I will not own any of our projects, I will not profit from any of our projects. We just have the opportunity to serve more people.”

Soukup, who represents the faith-based advocacy group Justice Matters, responded that he thought that was a good point, but that the city’s affordable housing problem was so large that he thought it was going to take both kinds of projects. Though he recognized there was a distinct difference between the two, he said he saw the board’s mission as creating the best balance.

“I think there are both sides,” he said. “Those (for-profit) projects certainly serve a purpose and put units on the ground maybe faster or that we couldn’t do otherwise. But there is a balance and there is a distinct difference.”

Ultimately, the board recommended that the City Commission consider the issues raised by the board, including the perception of undue influence and conflicts of interest, and potential changes to the board’s membership or processes.