National Objectives of Community Development Legislation


Congress established the Community Development program in 1974 by consolidating a number of grant programs into one “block grant”.  The primary objective is:


            “development of viable urban communities, including decent housing and a suitable living environment and expanding economic opportunity, principally for persons of low and moderate-income.”  (Housing and Community Development Act of 1974)


To receive future Community Development Block Grant funds, Chapel Hill must certify that its overall program carries out this primary objective.  In addition, each Community Development Block Grant activity must:


1.     Benefit low- and moderate-income persons (80% of median income and below); or

2.     Aid in the prevention or elimination of slums and blight; or

3.     Treat urgent needs posing an immediate threat to public health and welfare.


Eligible activities for Community Development Block Grant funding

            (from Federal Regulations)


Community Development Block Grant funds may be used for the following types of activities (provided national objectives are also met): 


·        acquisition of property

·        disposition of property

·        public facilities and improvements

·        clearance, demolition and removal of buildings

·        site improvements

·        some public services (subject to some limits in regulations)

·        relocation

·        housing rehabilitation, preservation and code enforcement

·        economic development activities

·        planning and administrative costs (subject to a cap of total funds spent on these activities)


Alternatives that are generally not eligible include:


·        buildings used for the general conduct of government

·        new housing construction (allowed in special circumstances)

·        general government expense

·        political activities

·        purchase of equipment and personal property

·        operating and maintenance expenses



2004-2005 Community Development Program


The following activities were approved by the Council on April 26, 2004 for the 2004-2005 program year.  The program was amended on December 6, 2004 to allocate program income to the Neighborhood Revitalization activity. 



Public Housing Activities:     $206,000        


1.      Renovation of Airport Gardens:  $150,000


The Council budgeted $150,000 to help fund renovation of the Airport Gardens public housing community.   Funds will be used along with Public Housing Capital Grant funds and previously allocated Community Development funds to renovate the twenty-six unit community.  Of this amount, $15,000 will be used to pay a portion of the Assistant Housing Director’s salary for oversight of the renovation project. 


Proposed renovation work will include the abatement of lead-based paint and asbestos, replacement of water and sewer lines to OWASA standards, installation of new washer and dryer hook-ups, replacement of wall and base cabinets and countertops to include new range hoods and sinks, replacement of windows and screens, replacement of interior and exterior doors, replacement of furnaces including air conditioning and water heaters, replacement of floor tiles, replacement of bathtub liners and surrounds, bathroom fixtures, plumbing and electrical upgrades, and interior and exterior painting.   Funds will also be used for site improvements including replacement of asphalt driveways and parking lots; planting new shrubs, and replacement of storm drainage systems and retaining walls.  Due to the extent of building improvements, the relocation of residents will be required and the work will have to be scheduled in phases. 


2.      Refurbishing Program: $50,000


The Council appropriated $50,000 of Community Development funds to continue the public housing refurbishing program.  This program includes repainting and minor repairs of public housing units.


3.      Installation and Repair of Playground Equipment:  $6,000


The Council budgeted $6,000 to repair and replace playground equipment at various public housing sites. 


Neighborhood Revitalization:  $213,018


On April 26, 2004 the Council budgeted $121,700 of Community Development funds to continue neighborhood revitalization activities in the Northside, Pine Knolls, and public housing neighborhoods.  An additional $91,318 of Community Development Program income was allocated to this activity on December 6, 2004.  Activities must serve households earning less than 80% of the HUD published area median income.  Funds could be used for the following activities: second mortgage assistance; property acquisition and/or renovation; code enforcement; demolition; public improvements such as installation of sidewalks, curb and gutter improvements or parks and recreation facilities; or community service activities.  This year, we recommend that the funds be used primarily for public improvements in the Northside neighborhood. 


The Council continued to authorize the Manager to approve specific projects for use of these funds in accordance with the guidelines mentioned above.   The Council also continued to authorize the Manager to approve converting Neighborhood Revitalization funds into grants to Orange Community Housing and Land Trust as opportunities appear to achieve long term affordability of housing projects to be placed in the Land Trust. 


Comprehensive Rehabilitation Program:   $100,000


The Council allocated $100,000 for a comprehensive rehabilitation program to renovate owner-occupied housing in the Northside neighborhood.  Funds will be used to provide deferred loans to owners earning less than 80% of the area median income.  We have contracted with Orange County to oversee the rehabilitation work, and that Town staff is responsible for the administrative portion of the program (i.e. qualifying households). 


Orange Community Housing and Land Trust:         $100,000


The Council allocated $100,000 to Orange Community Housing and Land Trust to reduce the prices of ten townhomes in the Vineyard Square Development.  Funds would be provided as a grant to the Land Trust.  Funds will be used to reduce the sales price of three-bedroom townhomes from $115,000 to $105,000.  Townhomes will be sold to first time homebuyers, earning less than 80% of the area median income.  In addition, once subsidized, the homes could not be sold to households earning more than 80% of the median income. 


Community Services:  $81,700


The Council allocated funds for four community service activities that meet the Community Development regulations:


1.        $40,000 to the Chapel Hill Police Department to fund the following youth programs:


·        $31,900 to continue the Youth Work Program for youths ages 14-17 living in the Pine Knolls, Northside and public housing communities.  During the summer, approximately thirty youths will work twenty hours per week in various Town Departments and local non-profit organizations.  During the school year, ten of these children will continue to work approximately ten hours per week. Youths will also be required to participate in workshops focusing on financial education, career development, and improving interview skills. 


·        $2,600 for educational programs for youths living in the Northside, Pine Knolls, or public housing communities including an academic awards program  a mentoring and leadership program for young men, a support program for parents of young children to help them to begin teaching their children to read, and trips to college campuses.  Programs would be coordinated with the Town’s Police, Housing and Parks and Recreation Departments, and will provide structured activities and emphasize components that will improve academic skills, prevent drug abuse and drug-related crime, leadership development, and career planning.


·        $5,500 for the Career Explorers Program.  This program is designed for high school aged youth who reside in Northside, Pine Knolls, or public housing neighborhoods.  Six youths will be placed in work sites in the business community.   Youths will work thirty-six hours per week and spend an additional four hours sharing work experiences, learning financial skills, and participating in career exploration experiences.  Funds will be used to supplement funds paid by the local businesses. 


2.        $15,000 to the Orange County Family Resource Centers to continue to operate an after school enrichment program at the South Estes Family Resource Center located in the South Estes Drive public housing community.


3.        $13,700 to North Carolina Cooperative Extension to operate a ten week program for thirty overweight youths and their families focusing on nutrition, physical activity, and psycho-social skills to promote a healthier lifestyle.  The program will be held at the Chapel Hill – Carrboro YMCA.   Recruitment for the program will target residents of public housing, as well as other lower income areas of Chapel Hill and Carrboro.  Funds will be used to provide scholarships to Chapel Hill residents. 


4.        $13,000 to the Chapel Hill–Carrboro YMCA to continue operation of after school programs for children living in the Pine Knolls neighborhood and the South Estes Drive public housing community.   Funds will be used to provide scholarships to eligible children. 

Program Administration:        $101,600


The Council allocated $101,600 for administration of the Community Development program and related housing programs.  Currently, the Community Development staff administers Community Development Program, the Revolving Acquisition Fund, and the Housing Loan Trust Fund, works with other Town departments and non-profit organizations that receive Community Development funding from the Town to implement activities, coordinates activities with the HOME Program Consortium, monitors compliance with Performance Agreements and federal regulations, administers housing loans and grants provided by the Town over time, and coordinates with the U.S. Department of Housing and Urban Development to achieve compliance with federal regulations. 


Funds will be used for the Community Development Coordinator’s salary and benefits, a portion of the Long Range Planning Coordinator’s salary, a part-time Community Development Program Monitor, and a part-time financial position.  These costs total approximately $95,100.  The balance of funds, approximately $6,500, will be used for overhead costs.




The HOME Program


In 1990, Congress enacted the HOME Investment Partnerships Act, better known as the HOME Program, in an effort to provide a new approach to housing assistance at the federal level.  This federal housing block grant would afford state and local governments the flexibility to find a wide range of housing activities through creative and unique housing partnerships among states and localities, private industry, and nonprofit organizations. 


In order to receive future HOME Program funds, each housing activity must fall in line with the following goals of the HOME Program:


1.      To expand the supply of decent, safe, sanitary and affordable housing, with emphasis on rental housing, for very low- and low-income citizens;


2.      To strengthen the abilities of state and local governments to design and implement strategies for achieving adequate supplies of decent affordable housing; and


3.      To encourage public, private and nonprofit partnerships in addressing housing needs.


Eligible activities for HOME Program funding include (from the Federal Regulations):


·        Acquisition of property (including assistance to homebuyers);

·        New construction;

·        Reconstruction;

·        Conversions;

·        Moderate rehabilitation of non-luxury housing with suitable amenities;

·        Tenant-based rental assistance;

·        Relocation of displaced persons, families, businesses, or organizations;

·        Site improvements, acquisition of vacant land and demolition (under special conditions);

·        Project soft costs;

·        Administration / planning (for qualified Community Housing Development Organizations); and

·        Operating expenses for community housing development organizations.

2004-2005 HOME Program


The following activities were approved by the Council and Boards of the participating members of the HOME Consortium (Chapel Hill, Carrboro, Hillsborough and Orange County):


 Rental Assistance:    $236,431


Funds were allocated to develop a small pilot program (four to five units) for Tenant-Based Rental Assistance in Orange County.  The program will operate similarly to the Section 8 program and provide rent subsidies for eligible families with incomes at or below 50% of the area median income.  Resembling the Section 8 Program, the subsidy will be calculated based on the tenant’s ability to pay and the fair market rent.  The program will be administered by the Orange County Housing and Community Development Department.


Property Acquisition:  $250,000


1.      $125,000 allocated to the Town of Chapel Hill to assist in the purchase of a house for the Town’s Transitional Housing program for public housing residents.  The program provides a stepping-stone for families between public housing and the private housing market. 


2.  $125,000 allocated to Habitat for Humanity to purchase five lots in the Winmore Subdivision in Carrboro.  The funds will convert into second mortgages of $25,000 each to five low income first-time homebuyers when they purchase their homes.  The homes will be purchased by households who have lived and/or worked in Orange County for at least one year prior to applying, and who earn less than 50% of the area median income. 


Second Mortgage Assistance: $180,000


1.      $100,000 allocated to EmPOWERment Inc. to provide second mortgage assistance for first time homebuyers earning less than 80% of the area median income.  EmPOWERment will provide $10,000 to ten buyers throughout Orange County. 


2.      $80,000 allocated to Habitat for Humanity to provide deferred second mortgages for four homebuyers earning less than 50% of the area median income.  Three of the homes will be located in the Richmond Hills Subdivision in Efland, and the fourth home is located on Cain Drive in Efland Estates where Habitat has previously built eight homes.  Homes will be purchased by households who have lived and/or worked in Orange County for at least one year prior to applying.  


Down Payment Assistance:   $140,000


The Consortium allocated $140,000 to Orange Community Housing and Land Trust to provide down payment assistance for seven first-time buyers in the Winmore ($70,000) and seven first-time buyers in the Pacifica development ($70,000), both located in Carrboro.  The townhomes and condominiums, which are being developed by the private sector, will be placed in the Land Trust.  Eligible applicants must be first time homebuyers, currently living or working in Orange County who earn less than 80% of the area median income.


New Construction (Infrastructure)   $25,000


The Consortium allocated $25,000 to Habitat for Humanity to extend sewer service to a lot owned by Orange Community Housing and Land Trust on Crest Street in Carrboro. Habitat will build a home on the lot once the sewer extension has been completed.  The home will be sold to a Habitat homebuyer using the land trust model, and the property will remain affordable for 99 years. 


Administration:   $73,905


The remaining $73,905 was allocated to the Orange County Housing and Community Development Department for administration of the HOME program. 


Housing projects funded with Orange County HOME Program funds are subject to the County’s 99-year long-term affordability policy, and must remain affordable for 99 years.  Orange County records deed restrictions on the property with the Register of Deeds for affordable housing projects.