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Home My WebLink AboutItem 2E: Approval of Funding for Low-Income Housing Projects ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Approval of Funding for Affordable Housing Projects Meeting Date: June 12, 2006 Agenda Item Number: 2E 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 Investment Partnership Program (HOME) funds and other resources for two affordable housing developments selected through a Request for Proposals (RFP) process. The following projects are recommended by the intergovernmental Housing Policy Board: 1) development of Prairie View, a 76-unit rental housing project to be developed on the Royal- Danebo Landbank Site by Metropolitan Affordable Housing Corporation (Metro); and 2) acquisition of th a 12-unit apartment building located at 1025 West 7 Avenue by St. Vincent De Paul Society of Lane County, Inc. (SVDP). SVDP intends to rehabilitate the building and make the units available to homeless veterans. BACKGROUND The City issued an RFP for affordable housing projects in December 2005. 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 RFP offered the 2.76 acre Royal-Danebo Landbank site, Federal HOME funds, Eugene system development charge (SDC) waivers, Eugene Water & Electric Board SDC waivers, City of Eugene Low-Income Housing Property Tax Exemption, and Lane County Road Funds. The RFP sought proposals for: 1) use of HOME funds for the development or acquisition of affordable housing; 2) development of affordable housing on the Royal-Danebo Landbank site; and 3) preliminary proposals for land acquisition for housing for people with disabilities. Five proposals were received through the 2006 Housing RFP including three proposals for use of HOME funds, and two proposals for the Royal- Danebo Landbank site. No proposals were received for acquisition of land for housing for persons with disabilities. The Housing Policy Board recommends two proposals for funding. They are as follows: New Rental Housing Development on the Royal-Danebo Land Bank Site by Metropolitan Affordable Housing Corporation – Metro’s proposed development, Prairie View, will include 76 units of rental housing and a community center. The 58 two-bedroom and three-bedroom apartments will be targeted to families with children. The 18 studios and one-bedroom units will be targeted to elderly, youth, and other individual occupants. Prairie View will have 27 units with rents affordable to households earning L:\CMO\2006 Council Agendas\M060612\S0606122E.doc at or below 38% of area median income and 49 units affordable to households earning at or below 48% of area median income. Metro will develop the site according to LEED sustainable building standards for residential dwellings including use of energy efficient appliances, solar units, and other measures. Metro requests $316,121 in HOME funds in the form of a loan with terms to be negotiated, and other local subsidies including $115,000 in Eugene SDC waivers, $100,000 in EWEB SDC waivers, and $213,700 in Lane County Road Funds. Metro plans to seek Federal Low Income Housing Tax Credits from the State this fall and start construction in May 2007 if credits are awarded this year. th Acquisition of 1025 West 7 Rental Units by SVDP (VetLIFT II) – SVDP requests $275,000 in HOME funds to fund a portion of the acquisition costs and related tenant relocation costs of a 12-unit apartment th building at 1025 West 7 Avenue. The purchase price of the building is $550,000. The property will be rehabilitated and offered as affordable rental housing for chronically homeless veterans. The unit rents will be set at 30% of area median income. The residents will also participate in SVDP’s Vets Living Independently Following Treatment program and will have access to a range of social services. SVDP will use the commitment of HOME funds to leverage funding from other sources including the Veterans Administration Capital Grant Program and the State of Oregon Housing Trust Fund Program. SVDP plans to have the funding assembled to acquire the property in January 2007. The City’s funding will not be released until the other sources are committed. SVDP will seek operating subsidies from the Veterans Administration Per Diem Program and HUD Continuum of Care. SVDP also plans to apply for a loan through the City’s Rental Rehabilitation Program and for the City of Eugene Low-Income Housing Property Tax Exemption. RELATED CITY POLICIES The City Council approved the HUD Consolidated Plan 2005, which sets priorities for use of HOME and Community Development Block Grant (CDBG) funds over a five-year period. Each spring, the council approves a One-Year Action Plan for annual use of Federal CDBG and HOME funds. The plan allocates Federal funding to several categories of housing development activity: affordable rental units, homeownership, and site acquisition for future low-income housing developments. Other local resources, including Eugene and EWEB systems development charge (SDC) waivers, Lane County Road Funds, and low-income housing property tax exemptions, are also made available to decrease the cost of housing. The City Council has established a priority to address homelessness in Eugene. Both proposed developments directly support this objective by creating more housing that will be affordable to very and extremely low-income families and individuals. In particular, the acquisition and rehabilitation of th 1025 West 7 will offer a critical resource for veterans struggling to transition from homelessness to stable housing and employment. The City Council has established a Housing Dispersal Policy which seeks to maximize housing choices for low-income families and integrate housing throughout the city of Eugene. Both proposed projects will be located in appropriate Census Tracts according the Housing Dispersal Policy. While Prairie View exceeds the recommended limit of 60 units, only 58 of the 76 units will be targeted to low-income families. In addition, there is no other subsidized housing located within a three-mile radius of the site. L:\CMO\2006 Council Agendas\M060612\S0606122E.doc COUNCIL OPTIONS The council has three options: 1.Approve funding for both projects as proposed. 2.Approve funding for one project as proposed. 3.Decline to approve funding for either project. CITY MANAGER’S RECOMMENDATION The City Manager recommends Option #1: Approve use of HOME funding and other resources for th Prairie View and 1025 West 7 Avenue, as proposed. SUGGESTED MOTION th Move to approve use of HOME funding and other resources for Prairie View and 1025 West 7 Avenue, as proposed. ATTACHMENTS A. List of Allocations Committee Members and Housing Policy Board Members B. Preliminary design for Prairie View FOR MORE INFORMATION Staff Contact: Stephanie Jennings, Housing Finance Analyst Telephone: 682-5529 Staff E-Mail: Stephanie.a.jennings@ci.eugene.or.us L:\CMO\2006 Council Agendas\M060612\S0606122E.doc ATTACHMENT A Allocations Committee Members Lea Allen Norton Cabell Roxie Cuellar Debi Farr, State Representative Jennifer Solomon, City of Eugene Councilor Virginia Thompson John VanLandingham John Wagner Jim Welsh Housing Policy Board Members Lea Allen Norton Cabell Roxie Cuellar Bobby Green, Lane County Commissioner Dave Ralston, City of Springfield Councilor Jennifer Solomon, City of Eugene Councilor Virginia Thompson John VanLandingham John Wagner L:\CMO\2006 Council Agendas\M060612\S0606122E.doc ATTACHMENT B /"' '-...J'-'" /"' /-lJ :< ~ ..... . - I ... " .~ - --. ,- It",.,. 1\ ,r--