I was on vacation last week so I apologize for coming to this late. But the story in last week’s TAB headlined “Mayor Setti Warren defends record on Newton affordable” seems worth noting for different reasons.
First, the article begins by saying “Mayor Setti Warren is firing back at critics of his affordable housing strategy” and refers to the mayor explaining his views “in interviews with the TAB over the last week.”
But the article itself has exactly one quote from the mayor and it hardly feels fiery…
“I’m extremely proud of this administration’s effort to ensure we have quality affordable housing that’s cost effective,” said Warren. “I’m looking forward to the creation of affordable housing in the next four years under my administration that’s effective and that’s done right.”
More significant is the remaining 3/4th of the article which focuses on defending the Warren administration for requiring competitive bidding for affordable housing projects …
The policy requires nonprofits seeking more than $25,000 in federal, state and local funding to solicit competitive sealed bids from contractors. They must select the lowest “responsible and responsive” bidder to conduct the work. For projects more than $3,000 but less than $25,000, organizations must seek at least three written quotes. Procurements under $3,000 can be made using “sound business practices.”
… some say the mayor’s actions have actual stifled chances to accommodate residents being pushed out by high property values. They point to changes by his administration that require any developer seeking city allocated federal funds for affordable housing to go through the same public bidding process the city has to — a hurdle not required by the U.S. Department of Housing and Urban Development that provides the funds.
Washington Street-based CAN-DO is the only affordable-housing developer to receive federal fund from the city since Warren took office. Executive Director Josephine McNeil said the nonprofit has a hard enough time building affordable units in Newton without the extra burdens put in place by the Warren administration.
In that same article, alderman and mayoral candidate Ted Hess Mahan had this to say about what he calls these “much more restrictive practices” that the Mayor Warren has put in place in “order to look good rather than to do good.”
Going through the public bidding process requires submitted documents to be airtight and come with the added cost of lawyer and architectural fees, Hess-Mahan said. Because of the extra costs expended there, developers often have having to make up the difference by selecting a low bidder that can’t perform the contract and either walks away or does a poor job.
Greg, Ald. Fuller, Albright, Crossley and myself have had several meetings about this topic with the administration and with representatives of various non-profit developers who are looking to build affordable housing in Newton. The Mayor wants to apply the restrictive state public bidding laws to these non-profits, which require among other things that the subrecipient must pick the lowest bid. By contrast, HUD’s regulations allow non-governmental subrecipients of federal housing funds to use a less restrictive method which requires only that “awards are to be made to the bidder/offeror whose bid/offer is responsive to the solicitation and is most advantageous to the subrecipient, price and other factors considered.” As a result of the city’s change in policy, one or more of the non-profits that has proposed building affordable housing has decided not to pursue federal funding allocated to the city.
In construction, you can built faster, cheaper or better, but not necessarily all three at the same time. The problem, as the city experienced with the contractor that built Newton South, is that the lowest bidder does not always deliver the best quality. That project involved many cost overruns and change orders, and some of the work had to be redone. Complying with all of the requirements built into the public bidding laws raises the overall cost of a project significantly, which can have a detrimental impact on a non-profit with a narrow margin. Moreover, contractors who “low ball” a bid to get the work may end up costing the developer more or in some cases walking off the job entirely. And that means taxpayers end up getting less for their tax dollars. Which is in large part why HUD does not require strict compliance with state public bidding laws for non-governmental subrecipients.
When Alan Shepherd, the first American in space, was asked what he was thinking as he sat on top of a rocket waiting to lift off, he replied: “The fact that every part of this ship was built by the low bidder.” I was president of CAN-DO, one of the non-profit developers of affordable housing in Newton, during several construction projects. In my experience, some contractors simply performed better than others, in terms of coming in on-budget and on-time, as well as the quality of their work. If HUD regulations allow it, why shouldn’t a nonprofit developer be able to go with a contractor that will do the best job, rather than be constrained to accepting only the lowest bid?
Greg,
If someone bids 15,000 for a project and the other three are 30,32 and 34,000, wouldn’t you question the 15,000 bid? But, your stuck taking the 15,000.
It was a mystery to me why up until recently this has always been the case. I believe they changed it around 5 years ago for municipalities.
@Ted: As always, thanks for the explanation. Doesn’t the provision that allows for selection of the lowest “responsible and responsive” bidder protect the kind of thing that kept Alan Shepherd from fully sitting back and enjoying the view?
@Tom: I want to make sure that my tax dollars are being spent wisely. What safeguards do you propose for doing that?
Ted – I should probably know the answer to this, but who are some of the other recent non-profit developers of affordable housing units in Newton, other than CAN-DO? Obviously I’m not referring to 40B projects since they aren’t non-profit.
Greg, on Washington Street, we have had one “responsible and responsive” landscaping contractor back out after lowballing a bid to plant screening along the MassPike. The next lowest bidder was awarded the job, and the city has had to keep after him constantly to water the plantings (Julia Malakie can back me up on this). This project was funded with CDBG money, and while the contractor will have to replace the plantings during the warranty period, if you drive by you will see a lot of dead and dying vegetation much of which probably won’t survive. The neighborhood is very unhappy, to say the least.
Gail, I don’t understand your 40B comment, as non-profits do them too. If you are asking who else has received public funding, CAN-DO, which is the designated Community Housing Development Organization, SEB, B’nai B’rith, Advocates, Inc. and the Newton Housing Authority have all received some combination of federal, state and local funding to create affordable housing in Newton in recent years. All but SEB are non-profits.
Speaking of 40Bs, if Newton drives the non-profits developers of affordable housing out of town, the for-profit 40Bs will fill the gap with denser developments than projects that are subsidized with public funding. Indeed, SEB is proposing a 36 unit development on Court Street in Newtonville on a lot that is a little over one acre. To my knowledge, SEB is not seeking public funding to do this project.
Greg,
There needs to be a combination of efficiency and quality, thats how we get the best bang for our buck. If we have a contractor who wins bids due to lousy materials that project may have to be redone after 5 years, where quality material may last 15. The lowest bid doesn’t necessarily mean you’re getting the biggest bang for the buck. You need to do your due diligence when dealing with these people, a little research doesn’t hurt.
Gail,
You asked what I would do differently than the Mayor. We put restrictions when we want to make it difficult for someone to accomplish things. We did this with our zoning for years and now it’s a mess. We need to simplify the process so that even if the project doesn’t fit the city, maybe they’ll comeback and work with the city on another project.
Ted,
Why hasn’t the city developed a plan to get to 10% affordable housing? My understanding is if a city/town has a plan and stays on the plan to get to 10% affordable housing, then it blocks most of the control that 40B’s have in the city and we’d retain our power.