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HomeMy WebLinkAbout06/12/1989 Meeting e M I NUT E S Eugene City Council Dinner/Work Session B.J.'s Restaurant June 12, 1989 5:30 p.m. COUNCILORS PRESENT: Ruth Bascom, Rob Bennett, Shawn Boles, Debra Ehrman, Bobby Green, Freeman Holmer, Emily Schue. COUNCILORS ABSENT: Roger Rutan. Mayor Jeff Miller called to order the regular meeting of the Eugene City Council. I. SOCIAL GOALS COMMITTEE REPORT ON AFFORDABLE HOUSING Richie Weinman, Planning and Development Department, gave the staff report. He said the council selected hOUSing as its social goal for two years beginning in July 1988 and ending in July 1990. Mr. Weinman said the first task of the Social Goals Committee was ,to identify what local housing e problems exist. He outlined several of these problems. Approximately 5,000 households in the metropolitan area are at great risk of becoming homeless. The Family Shelter House is in serious disrepair; it could take up to $1 million in rehabilitation to bring the shelter up to a reasonable standard. The current Eugene rental housing vacancy rate is approximately one to two percent. The community is experiencing rising rents and increased competition for existing units. Mr. Weinman said the committee also explored the causes of the local housing prob 1 ems. The biggest problem is that the Federal commitment to housing has been reduced by over 80 percent over the past eight years. Mr. Weinman said strong incentive programs that existed in the 1970s, such as HUD 236 mortgages and the Section 8 construction program, have been eliminated. He said another cause of th~ local housing problem has been the lack of construction of new, market-rate apartments over the past decade. The only multi-unit apartments that have been built in the community during that time, have been those that received some type of subsidy. Mr. Weinman said the changing demographics of the community, population increases, and an all-time high enrollment at the University of Oregon all serve to compound local housing problems. Mr. Weinman said the Social Goals Committee established two major projects for itself. The first was the rehabilitation of the Family Shelter House; this is a major focus of the Lane County Homeless and Affordable Housing Task Force, so the committee has not focused heavily on this goal. The e MINUTES--Eugene City Council-- June 12, 1989 Page 1 Dinner/Work Session e committee's second target is to produce at least 100 rental units at a $200-$250 per month range for eligible low-income families. Mr. Weinman said the committee is being assisted in pursuing this goal by a number of other participants from the public and private sector that attend committee meetings regularly and provide input on various agenda items. Mr. Weinman reviewed a pro forma for a hypothetical 20-unit project (two bedroom, 800 square-foot units with one bath) that use modular and stick-built construction methods. This review illustrated the difficulties of producing affordable housing. Mr. Weinman reviewed the types of assistance that might be necessary to achieve rental rates within the committee's target. These included: land donations or write-downs, property tax exemptions, Federal and State tax credits, below market-rate financing, public contributions of equity, and project-based Section 8 certificates. Mr. Weinman said the potential development entities for low-income housing include some type of public/private cooperative venture, a nonprofit housing development corporation, the housing authority, or some combination of these entities. Mr. Bennett emphasized the difficulty of achieving the committee's goal of constructing rental units that will rent for $200-$250. He said another complicating factor is that the housing units must also meet other community goals such as the housing dispersal policy. Mr. Holmer asked if the committee had discussed the possibility of subsidizing the incomes of low- and moderate-income households rather than e building only 100 units. Mr. VanLandingham said the committee decided to set its target at the construction of 100 units because it felt this was a realistic, although ambitious, goal. Mr. VanLandingham emphasized that the committee has a life of only two years, but hopes to establish a nonprofit development corporation to continue its work and to continue producing housing. Mr. VanLandingham added that the Section 8 program subsidizes earnings of low-income individuals to help them pay for rent; this program is very expensive. He did not feel the City could afford to duplicate this type of program. In addition, Mr. Vanlandingham pointed out that the current rental vacancy rate is so low that there is a need for new construction that income subsidies alone would not be able to fulfill. Mr. Gleason asked if the committee has given consideration to the possibility of rehabilitation of currently underutilized space. Ms. Schue said rehabilitation is possible in areas where housing stock is not being utilized. She said this situation does not exist locally. Mr. Boles added that the committee did hear about the potential for modifying warehouse space to accommodate single room occupancies. Mayor Miller asked about the potential for rehabilitating mobile homes. Mr. Bennett said that over a long period of time, this would not be an ideal option because older used mobile homes have not been built to the current code specifications and are not as energy-efficient as desired. He felt the rehabilitation of mobile homes would serve as a quick-fix solution but would not be of the same value as new construction. Mr. Green emphasized that e MINUTES--Eugene City Council-- June 12, 1989 Page 2 Dinner/Work Session e low-income housing should be developed for the long-term; he stated that the units should be energy-efficient and long-lasting in design. Mr. Holmer asked whether the committee has given any thought to selection criteria for filling the 100 rental units. Ms. Schue said the committee is not that far in its work, but added that the committee could follow or modify the selection criteria used by the Housing Authority. Mr. Bennett reemphasized the importance of establishing a nonprofit development corporation to help create low-income housing. He said this corporation could serve a variety of functions from being directly involved with development to encouraging those already in the development business. Mr. Bennett stated that it will take a strong public/private partnership to get the low-income rental construction the committee desires. Mr. Green said he is encouraged by the work of the Social Goals Committee to date. He said that for the long-term success of the housing units, it would be important to give the tenants a sense of ownership and pride in the project. Mr. Green thought that this would help with maintenance of the units. Answering a question from Ms. Bascom, Mr. VanLandingham said the Social Goals Committee has not explored local regulatory impediments to housing provision. He said this issue has been included on the Planning Commission's work program, however. Mr. Gleason noted that the major impediment in Oregon to investment in owner-occupied real estate is the heavy reliance on the e property tax. Mr. Bennett said that while he hopes to see a lot of private investment in the development of low-income housing, he feels this will take a lot of interest and encouragement from the public sector. He emphasized that it will not be easy to secure the construction of new low-income housing units, but said he remains encouraged at the progress and effort of the committee. The meeting adjourned at 6:50 p.m. (Recorded by Tanya Northman) MNCC 061289-530 e MINUTES--Eugene City Council-- June 12, 1989 Page 3 Dinner/Work Session