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
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
2003-04 Community Development Plan
Adopted April 28, 2003
On April 28, 2003 the Chapel Hill Town Council approved the following activities for use of $728,250 of Community Development Block Grant Funds:
Public Housing Activities: $221,000
1. Renovation of Airport Gardens
The Council budgeted $165,000 to renovate the Airport Gardens public housing community. Currently 2002-2003 Community Development funds are being used for the design work for this project. Funds will be used along with Public Housing Capital Grant funds and previously allocated Community Development funds ($100,000 of 2003-04 funds) to renovate the twenty-six unit community. Renovation work will include the abatement of lead-based paint and asbestos, replacement of windows and screens, replacement of interior and exterior doors, replacement of furnaces, replacement of floor tiles, replacement of bathtub liners and surrounds, bathroom fixtures, plumbing and electrical upgrades, and interior and exterior painting.
2. Refurbishing Program
The Council appropriated $50,000 of Community Development funds to continue the public housing refurbishing program. This program includes minor repairs of public housing units.
3. Installation and Repair of Playground Equipment
The Council also budget $6,000 to repair and replace playground equipment at various public housing sites.
Comprehensive Rehabilitation $150,000
The Council budgeted $150,000 for the renovation of owner occupied housing in the Northside neighborhood. We estimate that these funds will rehabilitate a minimum of four houses and provide for contract staff support. Based on experience with HOME funded housing rehabilitation projects in the Northside Neighborhood, the cost to completely rehabilitate a house has ranged from $25,000 to $35,000. If Community Development funds are used for rehabilitation, federal regulations require correction of all minimum housing code violations.
We will contract with Orange County Department of Housing and Community Development to oversee the rehabilitation work. Town staff would be responsible for the administrative portion of the program (i.e. qualifying households).
As with the Comprehensive Rehabilitation program funded through the HOME Program, funds would be provided as deferred loans to qualified homeowners that could be forgiven over time (typically twenty years, depending on the amount of the loan). The funds would be repaid to the Town if home was sold or conveyed to heirs that do not meet the income guidelines of the program within the affordability period (typically twenty years).
Neighborhood Revitalization: $115,750
The Council budgeted $115,750 of Community Development funds to continue neighborhood revitalization activities in the Northside, Pine Knolls, and public housing neighborhoods. Funds could be used for second mortgage assistance, property acquisition or renovation, code enforcement, demolition, public improvements such as installation of sidewalks or road improvements, or community service activities. Activities must serve households earning less than 80% of the HUD published area median income.
The Council reserved $20,000 of these funds to expand the Police Department’s summer youth work program for youths living in the Northside, Pine Knolls, and public housing communities. The youths work approximately twenty hours per week in various Town Departments and possibly with local non-profit and for profit businesses. Funds are also used for administrative costs associated with operating this program. Approximately 15 to twenty youths would be recruited and interviewed by Town staff.
In general, funds will be used to focus on improving living conditions in the Sykes Street area of Northside. We will continue our efforts in this area by working with neighborhood residents, EmPOWERment, Orange Community Housing and Land Trust, and the Sykes Street Steering Committee. We will also continue an interdepartmental effort with the Police Department, Planning, Inspections, and Public Works to improve the neighborhood environment. Specific activities in the Northside area could include acquisition and rehabilitation of housing for homeownership, code enforcement, and where necessary, demolition of unsafe homes, construction and repair of sidewalks using the Town’s sidewalk priority list, and other public improvements.
Affordable Rentals, Inc.: $80,000
The Council budgeted $80,000 to Affordable Rentals, Inc. to purchase a house in Chapel Hill. The property will be used as permanently affordable rental housing.
Community Services: $41,500
The Council allocated funds for the following three community service activities that meet the Community Development regulations:
Program Administration: $120,000
The Council allocated $120,000 for administration of the Community Development program and related housing programs. Currently, the Community Development staff administers the Community Development Program and the Housing Loan Trust Fund, coordinates efforts with non-profit organizations that receive Community Development funding from the Town, 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.
We will continue to use funds for the Community Development Coordinator’s salary, a portion of the Long Range Planning Coordinator’s salary and a part-time contract Community Development Program Monitor. These costs total approximately $93,000. This year we propose to use approximately $20,000 for financial accounting services, and $5,000 for assistance with the administration of the proposed comprehensive rehabilitation program. The balance of funds, $2,000, would 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; and
· Operating expenses for community housing development organizations.
2003-04 HOME Program
Adopted by the Orange County HOME Consortium
(Orange County, Chapel Hill, Carrboro and Hillsborough)
The U.S. Department of Housing and Urban Development awarded the Orange County HOME Consortium $739,591 for fiscal year 2003-04. In addition, the participating municipalities are required to contribute a 25% match of the grant funds after subtracting administration costs of $73,959. The total match requirement is $166,408. The Town’s contribution to the matching funds is 41% or $68,227. Orange County, Carrboro and Hillsborough will contribute $66,564, $23,297 and $8,320 respectively. Therefore, including program administration (allocated to the Orange County Department of Housing and Community Development), the Council would be planning activities, including administration for a total of $905,999.
The following HOME Program activities were approved by all four participating governments:
Comprehensive Rehabilitation: $277,040
Funds will be used to provide deferred loans to rehabilitate low- income owner-occupied housing in Orange County. The funds would be repaid to the HOME Program if home was sold or conveyed to heirs that do not meet the income guidelines of the program within the affordability period (typically twenty years). Homeowners with less than 50% of the area median income would be eligible for these loans. The program would be administered by the Orange County Department of Housing and Community Development. A portion of these units would be located in Chapel Hill.
Property Acquisition: $220,000
1. The Consortium budgeted $188,000 to Affordable Rentals, Inc. to purchase a duplex on Roosevelt Drive in Chapel Hill. According to information submitted in its application, the goal of Affordable Rentals, Inc. is to make possible an affordable and suitable place to live for residents of Orange County whose income is between 30% and 50% of the area median income. The non-profit organization intends to rent the property to persons earning between 30% and 50% of the area median income. The property would be maintained by Affordable Rentals and would be permanently affordable rental housing.
2. The Consortium also allocated $32,000 to the Town of Chapel Hill to assist in the purchase of a second house for the Town’s Transitional Housing program for public housing residents. The program would provide a stepping-stone for families between public housing and the private housing market. Funds would be used along with other money to purchase a house in Chapel Hill.
Second Mortgage Assistance: $225,000
1. The Consortium budgeted $150,000 to Habitat for Humanity to provide deferred second mortgages for ten homebuyers earning less than 50% of the area median income. The homes will be located in the Richmond Hills Subdivision in Efland.
2. The Consortium also allocated $75,000 for second mortgage assistance. Funds will be provided to qualified non-profit organizations for property acquisition and renovation of property for first time homebuyers earning less than 80% of the area median income. Properties will be located throughout Orange County.
Down Payment Assistance: $100,000
The Consortium budgeted $100,000 to Orange Community Housing and Land Trust to provide down payment assistance for ten first time homebuyers in the Greenway Condominiums project in the Meadowmont Development. The condominiums, which are being developed by the private sector, would 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.
Operational Support: $10,000
Funds will be provided to Orange Community Housing and Land Trust for costs related to developing the Greenways Condominium project. As a designated Community Housing Development Organization for the HOME Program, the Land Trust is eligible to receive funds for administration of a housing program.
Administration: $73,959
The remaining $73,959 was allocated to the Orange County Housing and Community Development Department for administration of the HOME program.
We note that 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.