LEWISTON — Federal rules meant to stop people from profiting for federal grants had the city and a local housing cooperative rewriting some rules Tuesday night.
The Raise-Op Housing Cooperative, a downtown Lewiston housing cooperative, wants to begin work renovating its third property, at 141 Pierce St., this summer. The group asked the city to set aside up to $204,750 in federal HOME funds to help renovate the nine-unit apartment building.
The HOME program is managed by the federal Department of Housing and Urban Development and is designed to help develop moderately priced housing.
The department is not used to working with housing cooperatives, said Lincoln Jeffers, Lewiston’s director of economic development.
“We are still working through some fine points with HUD to make sure they are OK with this,”Jeffers said.
Raise-Op is the extension of 2008’s Faire-Op cooperative that has purchased and renovated two apartments downtown, at 75 and 79 Maple St.
The organization is a private nonprofit supported by members, private loans, grants and donations.
Members purchase a share in the cooperative — about $762 per share. They pay monthly “carrying charges” of about $650 — rent, fees for utilities and whatever the building members’ group decides needs to be set aside for repairs and maintenance.
The group also decides house rules, divides up chores such as shoveling the walks, and helps settle member disputes.
Jeffers said HUD rules don’t allow developers to profit from HOME-funded projects. That became a problem because technically, the cooperative’s board could be seen to be profiting from the project.
Craig Saddlemire of Raise-Op said the co-op’s board is not paid and does not set out to make a profit.
“I imagine HUD’s rule that we are trying to be sensitive too was constructed for more conventional for-profit landlord situations,” Saddlemire said. “In our case, we want to make sure that anyone who becomes a member in the future has the right to serve on the board. This allows them to do that; it just says the people now cannot occupy these units.”
Councilors agreed to adopt an amendment saying that the current Raise-Op officers can not occupy any of the units in the new project that has been renovated with HOME money. Jeffers said that should satisfy HUD.
Councilors agreed and approved the HOME agreement with the cooperative by a 7-0 vote.
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