housing

 

Date:     April 23, 2008

 

To:          Mayor Foy and the Chapel Hill Town Council

From:     Robert Dowling, Executive Director

Re:         Quarterly status report for quarter ended March 31, 2008

 

The quarter was highlighted by four activities:

1.      Completing repairs on two Culbreth Park homes

2.      Beginning construction on two homes in Carrboro

3.      Managing unusual situations

4.      Continuing staff changes

 

Culbreth Park – In late 2007 we purchased two formerly affordable homes in Culbreth Park that were built around 1990.  We completed extensive repairs on both homes, including new siding, roofs, HVAC systems, flooring and hot water heaters.  Bringing these homes back to a standard where we could sell them to another low-income buyer required about $50,000 for each home.  Both homes are under contract to families who are excited about the opportunity to be homeowners.  We expect to close on both homes in the next several weeks.  Both are selling for about $120,000.

 

Two homes in Carrboro – We are building two attractive, energy efficient homes in Carrboro – one on Broad Street directly behind the old Riggsbee, Hinson furniture store, and one on Eugene Street on a lot that was donated to us by the Town of Carrboro.  Both homes will meet Energy Star standards and System Vision requirements – in fact the Broad St. home will be featured in the Green Building Tour on May 3rd and 4th. Both are 3BR, 2 1/2BA homes that will sell for between $125,000 and $140,000.   Each of these homes will require about $80,000 of local subsidy.

 

Unusual Situations – As we grow, we continue to encounter new situations that require our intervention.  In this past quarter we worked with two homeowners who decided to move out of their homes; one was relocating to another state and was planning on renting his home, which is not allowed by our ground lease.  We are currently managing repairs to his home and are marketing it for re-sale.  The second homeowner lost his job and decided to walk away from the house and his financial obligations.  We are in the midst of sorting through legal complications with this home, while negotiating with the lender to delay foreclosure.  Ultimately, we will sell this home out of the Land Trust and pay the proceeds of the sale to the Town of Carrboro.

 

Staff changes -   One staff member left us in the quarter, which provided an opportunity to recast that position.  We hope to hire a new Marketing Manager in the current quarter to assist with the challenges of selling many more units in the year ahead.  We also recognized the need to hire an additional part-time Realtor to assist with home sales.  We hope to hire someone in that position in the coming weeks. Lastly, the board determined that the organization needs an Operations Manager to relieve the burdens placed on the executive director.  That position will be filled in the new fiscal year if we have sufficient financial resources. 

 

Board of Directors

Marceia Blake

President

Gordon Merklein

Vice President

Michael Hansen

Secretary

Jim Tucker

Treasurer

 

Mary Bratsch

John Cooper

Laurin Easthom

Gary Giles

Jacquelyn Gist

Michael Nelson

Katherine Reynolds

 

 

 

Bruce Runberg

Mary Jean Seyda

 

 

Robert Dowling

Executive Director

Funding Provided by:

Town of Chapel Hill

Orange County

Town of Carrboro

Town of Hillsborough

PO Box 307

104 Jones Ferry Road

Suite C

Carrboro, NC 27510

919.967.1545

Fax 919.968.4030

www.ochlt.org

 

As of this writing, we are actively marketing seven new properties and nine re-sales of existing Land Trust homes.  Our sales staff of one full-time employee and one part-time employee is being stretched to its capacity trying to manage this volume of business.   However, this is only a harbinger of things to come.  Attached to this report is a simple table that depicts the number of homes that we expect to sell or re-sell in the next couple of years.  As you can see, our total annual transactions increase from 28 in 2008 to 84 in 2009 to 116 in 2010. These numbers are just projections and some projects may be delayed, but we expect that most of these units will be built by the end of 2011.    

 

Our 2008-09 operating budget includes an additional part-time employee in sales and the new position of Operations Manager.   It is more and more apparent that this organization needs additional staff to successfully manage the volume of business that is coming to us.  Specifically, we will need more capacity in the sales and marketing areas to sell more than 100 condominiums in Greenbridge, East 54, Lot 5, The Alberta and Roberson Place, plus another 65 units in Claremont, Waterstone, Chancellor’s View, Ballentine and Homestead Twins.  The operations manager will be needed to manage the increasingly complex organizational operations, allowing the executive director to focus on strategic issues, fundraising and financial management. 

 

In general, I think this organization has very successfully implemented inclusionary housing policies over the past five or six years, and we’ve done so at relatively little cost to the local governments.  However, given future projections, our ability to continue to be successful is at risk. I recognize that budgets are tight everywhere, but I feel obligated to alert all of our local funders that without additional staffing, the Land Trust could be overwhelmed by our collective success.

 

In closing, I want to assure you that we will continue to work hard to implement your affordable housing policies.  We fully recognize the benefits afforded to this community by having low and moderate-income families living in our newly-built neighborhoods.  But I ask that you be cognizant of the risks facing this organization.  Selling Land Trust homes and overseeing property management requires a great deal of time and effort on the part of our staff.  Together, the local governments and the Land Trust have developed a model that other communities seek to emulate.  It would be very unfortunate for this organization to be overwhelmed due to unreasonable expectations and inadequate resources.