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HomeMy WebLinkAboutItem 2C: Funding for Low-Income Housing Projects ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Approval of Funding for Housing Projects Affordable to Low-Income Persons Meeting Date: June 9, 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 HOME funds and other resources for two affordable housing developments selected through the 2008 Housing Request for Proposals (RFP). BACKGROUND The City of Eugene established current goals and programs for the development of housing affordable to low-income people through the adopted 2005 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. Pursuant to the Consolidated Plan and One-Year Action Plan, staff develops and releases an annual RFP for affordable housing development projects. The intergovernmental Housing Policy Board advises staff on the development of the RFP, reviews proposals, and makes funding recommendations to the City Council. The City issued the 2008 Housing RFP for affordable housing projects in November 2007 and proposals were due in February 2008. The RFP offered Federal HOME funds, Eugene System Development Charge (SDC) waivers, and Eugene Water and Electric Board System Development Charge waivers. The RFP sought proposals for use of HOME funds for the development or acquisition of housing affordable to low-income persons. A total of $695,000 in HOME funds is available for allocation to affordable housing projects through the 2008 RFP. Three proposals were received through the 2008 Housing RFP for use of HOME funds and other local resources. One of the proposals did not meet minimum environmental requirements established by HUD and was declined immediately. The remaining two 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: Acquisition of Hawthorn Apartments – ShelterCare requests funding to acquire and preserve the Hawthorn Apartments, a 35-unit housing development that currently serves very low-income persons with severe mental illness. The complex is privately owned and is located at 2984, 2986, and 2988 Oak Street and 2985 Willamette Street (see Attachment B for location map). ShelterCare has provided Z:\CMO\2008 Council Agendas\M080609\S0806092C.doc supportive services for residents through a partnership with the owner since its construction in 1982. Hawthorn Apartments is currently subsidized through a HUD Project-based Section 8 contract and financing from the State of Oregon, which will expire in 2012. By acquiring the property, ShelterCare will preserve its current use and will likely maintain the HUD operating subsidies. ShelterCare initially requested $700,000 in HOME funds for acquisition costs. The Housing Policy Board unanimously recommends HOME funding in the amount of $695,000 for acquisition costs. The funding will be structured as a deferred no-interest loan. ShelterCare will also apply for a Low-Income Rental Housing Property Tax Exemption from the City of Eugene. Rehabilitation of VetLIFT III Apartments – St. Vincent de Paul Society of Lane County, Inc. (SVdP) requests funding for rehabilitation of VetLIFT III, which will provide 10 rental units to formerly homeless veterans dually diagnosed with addictions and mental illness. The building is located at 1070 th West 6 Avenue and was recently acquired by SVdP with City assistance (see Attachment B for location map). SVdP initially requested $118,201 in HOME funds for rehabilitation and $5,000 in Eugene SDCs. Following a discussion of funding alternatives with staff, SVdP has decided to utilize the City’s Rental Rehabilitation Program in lieu of use of HOME funds. The Housing Policy Board unanimously recommends Eugene SDC waivers in the amount of $5,000. The Eugene SDC waivers will be used to offset SDCs associated with the conversion of a portion of the commercial space within the building to a new fully accessible residential unit. SVdP will also apply for a Low-Income Rental Housing Property Tax Exemption from the City of Eugene. RELATED CITY POLICIES The City Council has established a priority to address homelessness in Eugene. Both of the proposed projects directly support this objective by preserving and expanding affordable housing opportunities for very and extremely low-income families and individuals. In addition, both projects are targeted to special needs populations who are currently homeless or would have a high-risk of becoming homeless without supportive affordable housing. The City of Eugene affordable housing development programs support a number of the City Council Adopted Growth Management Policies. The recommended projects directly support the following Growth Management Policies: ? Promote construction of affordable housing. ? Encourage in-fill, mixed-use, redevelopment, and higher density development. ? Improve the appearance of buildings and landscapes. ? Provide for a greater variety of housing types. 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 projects are located in appropriate Census Tracts according to the Housing Dispersal Policy. COUNCIL OPTIONS The City Council has three options: 1.Approve funding for both projects as proposed. 2.Approve funding for either project as proposed. 3.Decline to approve funding for both projects. Z:\CMO\2008 Council Agendas\M080609\S0806092C.doc CITY MANAGER’S RECOMMENDATION The City Manager recommends Option #1: Approve the use of: 1) $695,000 in HOME funding for the acquisition of Hawthorn Apartments by ShelterCare; and 2) $5,000 in Eugene SDC waivers for the rehabilitation of VetLIFT III by SVdP. SUGGESTED MOTION Move to approve the use of: 1) $695,000 in HOME funding for the acquisition of Hawthorn Apartments by ShelterCare; and 2) $5,000 in Eugene SDC Waivers for the rehabilitation of VetLIFT III by SVdP. ATTACHMENTS A.List of Allocations Committee Members and Housing Policy Board Members B.Hawthorn Apartments Map FOR MORE INFORMATION Staff Contact: Stephanie Jennings, Housing Finance Analyst Telephone: 682-5529 Staff E-Mail: Stephanie.a.jennings@ci.eugene.or.us Z:\CMO\2008 Council Agendas\M080609\S0806092C.doc ATTACHMENT A Allocations Committee Members Norton Cabell Marcia Edwards Brita Fischer Susannah Meininger Virginia Thompson John Van Landingham John Wagner (chair) Housing Policy Board Members Norton Cabell Brita Fischer Bobby Green, Lane County Commissioner Susannah Meininger Dave Ralston, City of Springfield Councilor Jennifer Solomon, City of Eugene Councilor Virginia Thompson John Van Landingham John Wagner Z:\CMO\2008 Council Agendas\M080609\S0806092C.doc ATTACHMENT B Z:\CMO\2008 Council Agendas\M080609\S0806092C.doc