AGENDA #4h
to: Mayor and Town Council
from: The Council Committee on Affordable Housing
Council Member Czajkowski
Council Member Greene
Council Member Kleinschmidt
Council Member Strom
subject: Response to Petition from Orange Community Housing and Land Trust
date: April 14, 2008
PURPOSE
The purpose of this memorandum is to respond to a petition from Orange Community Housing and Land Trust to modify the guidelines of the Town’s affordable housing programs.
Adoption of the attached resolution would modify the guidelines of the Town’s affordable housing programs for senior citizens (age sixty or older) who wish to purchase Land Trust condominiums as follows: (1) the first time homebuyer requirement would be waived; and (2) with new construction condominium projects, once the Town issues a Certificate of Occupancy for a unit, the requirement that a senior citizen buyer live or work in Orange County for one year prior to purchasing the property would be waived.
On February 11, 2008, Orange Community Housing and Land Trust submitted a petition to the Council requesting a modification to two of the Town’s affordable housing regulations for senior citizens: (1) the first-time homebuyer requirement; and (2) the requirement that buyers live or work in Chapel Hill or Orange County for one year prior to receiving assistance. The Land Trust believed that the proposed modifications would also assist with the sale of the condominium units that have been approved for Greenbridge, East 54, the Downtown Economic Development Initiative project, and other developments that will be available for sale beginning in 2009.
On March 3, 2008, the Council granted an exception to the Town’s first-time homebuyer requirement for an existing Greenway condominium owner (please see Attachment 2). The Council also referred the Land Trust’s petition to the Council Committee on Affordable Housing for consideration.
On March 11, 2008, the Council Committee on Affordable Housing met to discuss the Land Trust’s petition. The Land Trust explained that they would continue to try to identify households that meet all of the eligibility criteria. However, the Committee agreed that modifying the regulations could provide the opportunity for senior citizens to purchase Land Trust condominiums that would have otherwise been ineligible. If the Council waives the first time homebuyer requirement, senior citizens would only have to meet the income requirements to purchase a condominium through the Land Trust (earn less than 80% of the area median income by household size). A first time homebuyer is defined as an individual who has had no ownership in a principal residence for a 3-year period.
The Council Committee on Affordable Housing recommends that the Council modify the existing affordable housing guidelines for condominium projects as follows: (1) waive the first-time homebuyer requirement for senior citizens; and (2) with new construction condominium projects, once the Town issues a Certificate of Occupancy for a unit, the requirement that a buyer live or work in Orange County for one year prior to purchasing the property would be waived.
As a result of the Council’s affordable housing policy, the Land Trust expects to be responsible for selling over one hundred condominiums in the next two years. The Land Trust has raised concerns because at this time, they are not able to determine the demand for one and two bedroom condominium units. Although the organization will begin marketing the condominium units before construction begins, it is possible that a buyer may not be identified before a Certificate of Occupancy is issued. For these reasons, we believe that waiving both requirements could significantly increase the Land Trust’s pool of applicants.
The Council Committee on Affordable Housing recommends that the Council modify the guidelines of the Town’s affordable housing programs for senior citizens that wish to purchase Land Trust condominiums as follows: (1) waive the first time homebuyer requirement; and (2) with new construction condominium projects, once the Town issues a Certificate of Occupancy for a unit, waive the requirement that a senior citizen buyer live or work in Orange County for one year prior to purchasing the property. We recommend that this modification apply to all affordable housing units built with funding assistance from the Town’s affordable housing sources including the Community Development Block Grant Program, the Housing Loan Trust Fund, and the Affordable Housing Fund.