AGENDA #4h

MEMORANDUM

TO:                 Roger L. Stancil, Town Manager

FROM:           Tina Vaughn, Housing Director

                        Nicole Mazyck, Housing Budget Officer

SUBJECT:     Amendment to the Project Ordinance for the Transitional Housing Program for Public Housing Families

DATE:            June 25, 2008

The attached budget ordinance would increase the budget for the Transitional Housing Program to add $23,172 in additional program rental income.

BACKGROUND

In April 2001, the Council approved a Transitional Housing Program that would help some public housing families who are paying monthly rents that are almost comparable to private market rents make the transition to private market housing.

Some of the key elements of the Program are:

• Participation in the Program is limited to public housing families with a rent paying ability of at least $450 per month.

• Maximum time for participation in the program is five years.

• Up to 20% of rent is deposited in an escrow account and the total amount in the escrow account would be given to the participant when the program is completed.  Participants would be required to use funds for a down payment on a home or deposits for private rental housing.
• Participants remaining in the Program after five years will pay market rate rent and will be required to seek private housing and leave the program.

DISCUSSION

The Transitional Housing Program has three rental units that were purchased with funds from the HOME Program, the County Housing Board Program, and the Town’s Housing Loan Trust Fund.  The Transitional Housing units are located in Chapel Hill on Merritt Mill Road, St. Andrews Lane and Weatherstone Drive. In addition to the three units in the Transitional Housing Program, the Town also owns a rental unit located on Millhouse Road.  This unit was acquired along with the property for the Town Operation Center.

The Transitional Housing Program has been successful.  The participants are enrolled in financial counseling and homeownership programs. Since the beginning of the Transitional Housing Program, one Program participant has graduated from the program and has purchased a home on the private market.  One of the current participants is in the process of applying for a mortgage to purchase a home.

Adoption of the attached project ordinance would make the additional $23,172 of rental income from the Transitional units and Millhouse Road unit available for maintenance and operation costs.

RECOMMENDATION

We recommend that the Council adopt the attached project ordinance for the Transitional Housing Program.