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HomeMy WebLinkAboutItem 2C: Approval of Funding for Affordable Housing ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Approval of Funding for Housing Projects Affordable to Low-Income Persons Meeting Date: March 10, 2008 Agenda Item Number: 2C Department: Planning and Development Staff Contact: Stephanie Jennings www.eugene-or.gov Contact Telephone Number: 682-5529 ISSUE STATEMENT The City Council is asked to approve the use of Community Development Block Grant (CDBG) funds for two projects that will provide affordable housing to low-income persons. Each project was selected through a special Housing Request for Proposals (RFP) for use of CDBG funds. BACKGROUND The City of Eugene established current goals and programs for the development of housing affordable to low-income people through the adopted 2005 Housing and Urban Development (HUD) Consolidated Plan. The Consolidated Plan guides the use of Federal HOME Investment Partnership Program (HOME) funds and Community Development Block Grant (CDBG) funds over a five-year period. Each year, the City Council approves the allocation of federal funds through a One-Year Action Plan. In addition to use of federal funds, the City of Eugene has established System Development Charge (SDC) Waivers and the Low-Income Rental Housing Property Tax Exemption to further enable the development of affordable housing. Each year on May 1, HUD conducts a timeliness test to confirm that the City is expending CDBG funds in accordance with regulations. Both new grant dollars and program income are included in the calculation. Due to a combination of unexpected program income and delays in expenditures for approved projects, it was necessary to identify additional uses for CDBG funds that could be executed within a limited timeframe. With guidance from the CDBG Advisory Committee, staff identified uncommitted CDBG funds from the following areas: Housing Development ($125,000); Housing Rehabilitation ($410,000); Non-profit Capital ($70,000); Business Development Fund ($95,000); and $30,000 in unallocated funds. Given that most of the funds were originally intended for use in housing projects, staff developed a special request for proposals (RFP) for acquisition of existing housing and released the RFP in December 2007. The RFP offered a total of $730,000 in CDBG funds for acquisition of existing housing to be made available to low-income households. Two proposals were received through the RFP. Submitted proposals were reviewed by staff, the Eugene Allocations Committee of the Housing Policy Board, and the full Housing Policy Board (see Attachment A for member list). The Housing Policy Board recommends two proposals for funding. They are as follows: F:\CMO\2008 Council Agendas\M080310\S0803102C.doc ? Acquisition and Rehabilitation of Rental Property by St. Vincent de Paul of Lane County for Homeless Veterans - St. Vincent de Paul Society of Lane County (SVdP) requests CDBG funds to th support the acquisition of a property located at 1070 West 6 Avenue in the Whiteaker neighborhood (see Attachment B for location map). SVdP proposes to acquire and rehabilitate the property for chronically homeless veterans who will participate in SVdP Veterans Living Independently Following Treatment program (VetLIFT). The property includes nine one-bedroom apartments, a 1400 sq. ft. non-residential space, and laundry facilities. SVdP plans to convert a portion of the non-residential space to one additional apartment that will be fully accessible. All participants will have incomes below 50% of Area Median Income (AMI). The proposed project is located on the same block as two additional properties owned by SVdP for homeless veterans. As proposed, the non-residential portion of the property will be used for individual counseling and group meetings for residents and other homeless veterans. SVdP plans to seek funding from the State of Oregon to cover other project costs. SVdP also plans to apply for the City of Eugene Low- Income Housing Property Tax Exemption. The total cost of the project is $900,178. The Housing Policy Board recommends $400,000 in CDBG funds to be used for acquisition and relocation costs. ? Resident Acquisition of a Manufactured Home Park (River Rock Glen) – The residents of Hannah Del Estates, a manufactured home park, have formed a resident cooperative in order to respond to the owner’s interest in selling the park at this time. The park has a total of 66 spaces and is located on Atticus Way off River Road north of Beltline in the Santa Clara neighborhood (see Attachment B for location map). The resident cooperative, called River Rock Glen Association, (RRGA) has retained legal and financial consultants to arrange financing for purchase of the park. The total cost of acquisition and conversion to a resident owned cooperative is $4,540,000. RRGA is seeking permanent financing from a private lender and an interest subsidy from the State of Oregon to cover about 85% of the acquisition costs. RRGA applied for CDBG funds to enable low-income residents of the park to purchase member shares and secure long-term leases for their lots. The projected cost of a member share is $11,000. At present, RRGA estimates there are 25 households in the park with low or very low incomes as defined by CDBG regulations. In addition, RRGA would like to make five vacant spaces available to low-income households. The Housing Policy Board recommends $330,000 in CDBG funds to enable low-income households to purchase member shares of River Rock Glen. RELATED CITY POLICIES The proposed uses of CDBG funds support multiple City policies and programs. A summary of the relationship between the proposed projects and each policy area is provided below: ? Eugene-Springfield Consolidated Plan 2005 - This recommended proposal supports the City’s affordable housing goals established in the Consolidated Plan 2005 which guides the use of federal CDBG and HOME funds through 2010. In order to allocate funds to specific programs or projects, HUD regulations require a citizen participation process, including advertising and conducting a public hearing, followed by City Council action. ? City Growth Management Policies – The recommended proposals support a number of the City Council Adopted Growth Management Policies. In particular the proposals will encourage in-fill and higher density development; improve the appearance of buildings and landscapes; increase density of new housing development while maintaining the character and livability of individual neighborhoods; and provide for a greater variety of housing types. ? Homelessness Council Goal - The City Council has established a priority to address homelessness in Eugene. Both projects serve this goal in different ways. SVdP’s proposal will make more units F:\CMO\2008 Council Agendas\M080310\S0803102C.doc available to homeless veterans. Manufactured home parks are also a critical source of housing affordable to very low-income households within Eugene. By facilitating the resident purchase of River Rock Glen, the City will help to avoid the displacement of 25 low-income households who would have difficulty finding another place to live at a similar cost. ? Manufactured Home Park Closure Ordinance – In 2007, the City completed a comprehensive review and modification of its Manufactured Home Park Closure Ordinance. As a part of this process, the Housing Policy Board discussed potential proactive measures that the City might take to help residents purchase the park from owners seeking to sell their parks. While no specific policies were recommended for action by the council, staff was encouraged to explore opportunities to preserve manufactured home parks. The proposal recommended for approval is an opportunity to develop a model for supporting park acquisitions by residents. ? Housing Dispersal Policy - The City Council has established a Housing Dispersal Policy which seeks to maximize housing choice for low-income families and integrate housing throughout the City of Eugene. Both proposals meet the requirements of the Housing Dispersal Policy. COUNCIL OPTIONS The City Council has three options: 1.Approve funding for both proposals as recommended. 2.Approve funding for one of the proposals as recommended. 3.Decline to approve funding for both proposals. CITY MANAGER’S RECOMMENDATION The City Manager recommends Option #1: Approve use of CDBG funding for the following projects as th proposed: SVdP’s proposal for 1070 West 6 Avenue; and RRGA’s proposal for member purchase assistance for low-income households. SUGGESTED MOTION Move to approve reprogramming CDBG funds from Housing Development, Housing Rehabilitation, Non-profit Capital, Business Development Fund, and unallocated funds for the following projects: th $400,000 for acquisition assistance of a property located at 1070 West 6 Avenue by St. Vincent de Paul Society of Lane County; and $330,000 to assist current low-income residents to purchase member shares of River Rock Glen Association, a resident cooperative located on Atticus Way. ATTACHMENTS A.List of Allocations Committee Members and Housing Policy Board Members B.Location Maps FOR MORE INFORMATION Staff Contact: Stephanie Jennings, Housing Finance Analyst Telephone: 682-5529 Staff E-Mail: Stephanie.a.jennings@ci.eugene.or.us F:\CMO\2008 Council Agendas\M080310\S0803102C.doc ATTACHMENT A Allocations Committee Members Brita Fischer Hugh Massengill Hugh Pritchard John Van Landingham John Wagner (Chair) Housing Policy Board Members Norton Cabell Brita Fischer Bobby Green, Lane County Commissioner Dave Ralston, City of Springfield Councilor Susannah Meninger Jennifer Solomon, City of Eugene Councilor Virginia Thompson John VanLandingham John Wagner F:\CMO\2008 Council Agendas\M080310\S0803102C.doc ATTACHMENT B F:\CMO\2008 Council Agendas\M080310\S0803102C.doc