AGENDA #4L
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: Status Report from the Council Committee on Affordable Housing Discussions with Culbreth Park Homeowners
date: April 14, 2008
PURPOSE
The purpose of this memorandum is to provide the Council with a status report on discussions with Culbreth Park homeowners.
Enactment of the attached budget ordinance would allocate up to $3,000 to perform home inspections on eight Culbreth Park homes.
In 1990, the Town and the Culbreth Park Development Corporation entered into an agreement for the development of the Culbreth Park subdivision. Eligible households had to earn less than 80% of the area median income to qualify for homeownership in this development. Twenty-seven of thirty houses constructed by the Corporation were sold to qualified buyers. The Town provided $14,000 in deferred second mortgages from the Housing Loan Trust Fund to each of the twenty-seven households that become due to the Town upon sale of the house. The amount to be repaid to the Town is determined by terms in a Shared Equity Agreement executed by the buyers at the time of initial sale.
There are currently eight original homebuyers living in Culbreth Park with second mortgages form the Town. Fourteen of the houses have been sold by the original homebuyers on the open market or the owners chose to repay the Town’s second mortgage and remain in the home. Five of the homes were purchased by Orange Community Housing and Land Trust and sold to qualified buyers. The original buyers repaid the Town’s funds according to the terms of the Shared Equity Agreement that was executed by the buyers at the time of initial sale. These funds were returned to the Housing Loan Trust Fund and used for other eligible affordable housing projects.
On September 10, 2007, a Culbreth Park homeowner submitted a petition to the Council requesting that the Town review the Culbreth Park Shared Equity Agreement to “establish a fair and amicable union” between the Town and Culbreth Park homeowners with second mortgages from the Town. On October, 22, 2007, the Council did not take any action and referred this petition to the Council Committee on Affordable Housing for further discussion. The Council also asked Robert Dowling, Executive Director of Orange Community Housing and Land Trust, to participate in this discussion.
The Committee has met three times to discuss this petition and other concerns raised by Culbreth Park residents. After review of the original documents and discussion, the Committee agreed that we did not want to recommend changes to the Shared Equity Agreement. However, we have decided that we would like to recommend that the Council assist the remaining owners with maintenance expenses for their homes. We believe that without assistance from the Town, necessary maintenance may not occur on some of the homes.
To begin to design a maintenance assistance program, the staff will survey the homeowners to determine their household income. This will help us determine what funding sources could be used for such a program. We also think it would be beneficial to determine the extent of repairs that are needed. We recommend ordering private inspections of the eight homes remaining subject to the Shared Equity Agreement to determine how much funding is needed to assist the homeowners. We ask that the Council appropriate $3,000 from the Council’s funds to pay for the cost for the private inspections. Orange Community Housing and Land Trust has agreed to oversee the home inspection process to help us move forward.
Once we have this information, our next step would be to work with the staff to design a program that would best address the identified needs. We would return to the Council with a program design and funding options for discussion.
RECOMMENDATION
We recommend that the Council enacted the attached budget ordinance to allocate up to $3,000 to perform home inspections on eight Culbreth Park homes.