AGENDA #6
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TO: |
Roger L. Stancil, Town Manager |
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FROM: |
J.B. Culpepper, Planning Director Loryn Clark, Housing and Neighborhood Services Coordinator |
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SUBJECT: |
Options for Consideration Regarding the Affordability of the Greenway Condominiums |
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DATE: |
April 11, 2007 |
The purpose of this memorandum is to provide the Council options for consideration with regard to the affordability of the Greenway Condominiums in Meadowmont.
Adoption of the attached resolution would provide a loan of up to $60,000 to Orange Community Housing and Land Trust from the Affordable Housing Fund to purchase a Greenway Condominium.
In a letter dated March 20, 2007, Robert Dowling, Executive Director of Orange Community Housing and Land Trust, requested using up to $60,000 from the Revolving Acquisition Fund (renamed the Affordable Housing Fund on March 26, 2007) to purchase a Greenway Condominium in Meadowmont (see Attachment 1). Funds would be used so that the unit would be affordable to a buyer earning less than 80 percent of the area median income. During this discussion, the Council asked Mr. Dowling to meet with staff to discuss options for addressing the affordability challenges at Greenway Condominiums.
We have discussed with the Land Trust staff the challenge of the affordability of six Greenway Condominiums. We have determined that modification of the Special Use Permit to sell the homes to households earning more than 100 percent of the area median income as suggested by the Council would not help the Land Trust with this situation. The Land Trust’s bylaws would not allow the organization to sell homes to households earning more than 100 percent of the area median income, and could also jeopardize the organizations non-profit status with the Internal Revenue Service. We believe that the Affordable Housing Fund would be the best source of funds to respond to this request.
We recommend that the Council provide funds from the Affordable Housing Fund to the Land Trust as a loan. We also recommend that the Land Trust execute a Performance Agreement with the Town, and provide the Town with a Promissory Note and Deed of Trust on the property to secure the loan. Current guidelines of the Affordable Housing Fund require funds to be repaid within 180 days. We recommend that the Council make an exception to the regulations and extend this time period to two years. At that time, the Land Trust could repay the Town’s loan or request that the Council extend the terms of the loan or request that the funds be converted into a grant.
We will continue discussions with the Land Trust regarding the challenges at Greenway Condominiums as well as the long-term maintenance and affordability issues that affect all of the Land Trust’s homes.
We recommend that the Council: (1) adopt the attached resolution to provide a $60,000 acquisition loan from the Affordable Housing Fund to Orange Community Housing and Land Trust to purchase a unit at Greenway Condominiums; (2) authorize an exception to the regulations of the Affordable Housing Fund to extend the loan term to two years; and (3) require the Land Trust to execute a Performance Agreement with the Town, and provide the Town with a Promissory Note and Deed of Trust on the property to secure the loan.
1. March 20, 2007 letter from Robert Dowling to the Mayor and Town Council (p. 4).