MANCHESTER, NH – Earlier this month, the Manchester Board of Mayor and Aldermen forgave $35,443.80 of a $55,000 subsidy recapture assessed to a man who used federal funding to obtain a loan for a property he then sold prior to the agreed-upon term of 15 years of ownership.
Located just down the street from Manchester West High School, the property at 232 Conant St. was purchased approximately nine years ago for a subsidized $205,000 amount so it could be purchased by a low-income family. That money came from $448,039 of U.S. Department of Housing and Urban Development HOME Funds that were awarded to the City of Manchester in partnership with Neighborworks, a local non-profit agency intended to enhance housing security in the Manchester area. The city holds the mortgage on the property.
The owner of the property, Adam Alvarez, told the Manchester Board of Mayor and Aldermen Committee on Community Improvement, that he recently moved to Goffstown for personal reasons and the purchase of the house needed to be taken in a timely manner. His hope was to only pay a prorated amount of the subsidy recapture, since he made numerous improvements to the property and remained an active member of the community. He also noted the purpose of the recapture was to prevent people from using the money for something other than its intended purpose of helping low-income people obtain housing.
Ward 3 Alderman Pat Long stated that purpose had been met through Alvarez, who was able to purchase a property he otherwise wouldn’t have been able to purchase and rehabilitate a distressed property in the process. Long said that he was happy for Alvarez and that any future situations like this one should be taken on a case-by-case basis.
Ward 1 Alderman Chris Morgan said Alvarez invested approximately $100,000 to renovate the home on the property and that the renovation and upward mobility for Alvarez through these funds was a positive story. Morgan added that despite the home being sold for $680,000 by Alvarez, that amount did not represent a profit since he bought another house at a comparable price.
At-Large Alderman Joseph Kelly Levasseur also added to Morgan’s statement regarding to the lack of profit for Alvarez by noting the capital gains taxes on the sale of the property.
Ward 5 Alderman Tony Sapienza disagreed with the view regarding Alvarez and profit, believing that Alvarez did profit, and should not profit from the HOME funds. Sapienza added that forgiveness of part of the recapture would create a precedent and that the full $55,000 amount could be used for helping others obtain affordable housing
“If we keep giving everybody a break, we’ll run out of money,” said Sapienza.
Ward 10 Alderman Bill Barry and At-Large Alderman Dan O’Neil expressed disapproval with the fact that Alvarez did not spend 15 years in the home despite agreeing to do so as part of the conditions of the HOME Funds.
A vote on the recapture forgiveness received a roll call on the board, leading to a 7-7 tie. Morgan, Long and Levasseur were joined by Ward 2 Alderman Dan Goonan, Ward 4 Alderwoman Christine Fajardo, Ward 6 Alderman Christine Kantor, and Ward 7 Alderman Ross Terrio in supporting the proposal. Opposers included O’Neil, Barry, Sapienza, Ward 8 Alderman Ed Sapienza, Ward 9 Alderman Jim Burkush, Ward 11 Alderman Norm Vincent and Ward 12 Alderwoman Kelly Thomas.
Manchester Mayor Jay Ruais broke the tie by voting in favor of the recapture forgiveness.