AGENDA #4
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Proposed 2000 – 2001 HOME Program
DATE: March 29, 2000
The purpose of tonight’s hearing is to receive citizen comments on a proposed plan for spending 2000 – 2001 HOME Program funds.
The U. S. Department of Housing and Urban Development has awarded the Orange County HOME Consortium $438,000 for fiscal year 2000 - 2001. In addition, the participating municipalities are required to contribute a total 25% match of the grant funds after subtracting administration costs of $43,800. The Town’s contribution to matching fund is 41% or $40,406. Orange County, Carrboro and Hillsborough will contribute $41,391, $11,826 and $4,927 respectively. Therefore, we will be planning activities for a total of $536,550.
Federal regulations require 15% of the grant funds (subtracting administration funds) to be budgeted to Community Housing Development Organizations. We propose to designate Orange Community Housing Corporation as the Consortium’s Community Housing Development Organization; and the organization would receive $80,000 for activities.
SUMMARY
The Consortium staff proposes the following use of HOME Program funds for 2000 – 2001:
Property Acquisition / Rehabilitation (OPC Mental Health) $120,000
Rehabilitation (Urgent Repair and Abundant Life Center) $130,250
Community Revitalization $100,000
New Construction
(Orange Comm. Housing –
Meadowmont Affordable Townhomes) $ 80,000
New Construction (Habitat) $ 62,500
Administration $ 43,800
Total $536,550
As done in previous years, we propose to use funds available in the Housing Loan Trust Fund for the Town’s match contribution.
The proposed use of funds addresses all of the requests received for funding.
BACKGROUND
The HOME Program was established to provide nationwide funding for various types of housing programs to benefit low-income families. This funding is in addition to the existing federal Community Development grants, rental assistance through the Section 8 Program and public housing operating and improvement funding. In 1992, Chapel Hill, Carrboro, Hillsborough and Orange County formed the Orange County HOME Consortium with Orange County acting as the lead entity. The Consortium was established as a local partnership to develop low-cost housing. That year, the Consortium received $803,600 through the State’s HOME Program.
Since 1995, the Consortium has received funds directly from the Department of Housing and Urban Development through the federal HOME Program. Please see Attachment 1 for a summary of federal HOME Program funding.
Please see Attachment 2 for a summary of the 1999 - 2000 HOME Program Activities.
The Consolidated Plan
On May 15, 2000, the Town and Orange County will submit to the U.S. Department of Housing and Urban Development a five-year Consolidated Plan. The purpose of the Plan is to identify and prioritize the housing and community development needs for Chapel Hill and Orange County. The Plan will also suggest how the Town and the County will address the needs over a five-year period.
The Plan will include a 2000 - 2001 Community Development plan approved by the Council and a 2000 – 2001 HOME Program approved by the Council, the Orange County Commissioners, and the Hillsborough and Carrboro Boards of Aldermen.
We will forward a draft of the Consolidated Plan to the Council on April 24, 2000. We will submit a final draft to the Council on May 8, 2000. After approval from the Town Council, the Orange County Commissioners and the Hillsborough and Carrboro Boards, the Plan will be forwarded to HUD on May 15, 2000.
Public Participation
On January 31, 2000, the Council held the first public hearing to receive ideas from citizens about how funds should be used in five areas: the Capital Improvements Program, the Town Budget, the Community Development Program, the HOME Program and the Comprehensive Grant. On February 29, 2000, the Orange County Commissioners held a public hearing to receive citizen comments on how HOME Program funds could be spent.
Please see Attachment 3 for a summary of HOME related comments and requests received at the Town’s January 31 public hearing, Orange County’s February 29 public hearing, and requests submitted after the hearings for consideration.
For your reference, we have attached a list of eligible HOME Program activities (please see Attachment 4).
DISCUSSION
The Consortium staff proposes the following one-year plan for 2000 - 2001:
Property Acquisition / Rehabilitation: $120,000
We propose to allocate $120,000 to Orange-Person-Chatham Mental Health Area Program to acquire and if necessary rehabilitate houses in Orange County for persons with disabilities.
Rehabilitation: $130,250
We also propose to budget $30,000 for the Orange Community Housing Corporation to continue operation of the Urgent Repair Program. Eligible properties must have repair needs that pose a threat to the life, safety, or health of the occupants, or need accessibility modifications for a disabled occupant.
We propose to budget $100,250 to the Abundant Life Center to renovate its building on West Rosemary Street. The Abundant Life Center is a single room occupancy facility that provides very low-cost housing for twenty-eight individuals. These funds would be used in conjunction with $40,000 of Community Development funds approved by the Council on February 28, 2000.
We are currently reviewing the feasibility of this project. If we determine that this is not the best use of funds, the Consortium proposes to budget $100,250 to the Community Revitalization activity. Please see Attachment 3 for further discussion of this project.
Community Revitalization: $100,000
We propose to budget $100,000 of HOME Program funds to continue revitalization efforts throughout Orange County. Eligible activities must serve households earning less than 70% of the HUD published area median income. Funds could be used for second mortgage assistance, property acquisition or renovation. A qualified 501(c )(3) organization would be eligible to use these funds.
New Construction: $80,000
The Consortium proposes to budget $80,000 for Orange Community Housing Corporation to construct thirty-two affordable townhomes in Meadowmont. The townhomes will be sold to first time homebuyers earning less than 80% of the area median income. Funds would be used for site development expenses. We also propose to budget $80,000 of Community Development funds for this project in 2000 – 2001. The Consortium proposes to budget an additional $80,000 of 2001 – 2002 HOME Program funds for the development of this project.
The Consortium proposes to designate Orange Community Housing Corporation as its community housing development organization in 2000 - 2001. Federal HOME Program regulations require that a jurisdiction participating in the HOME Program must reserve at least 15% of its HOME allocation for investment only in housing to be developed, sponsored or owned by a community housing development organization. A community housing development organization is an association or corporation organized under State or local law to engage in community housing activities primarily within an identified geographic area of operation.
The primary purpose of a community housing development organization is to improve the physical environment of its geographic area of operation. One criterion for designation of a community housing development organization is that the agency must maintain at least 1/3 of its governing body’s membership for residents of low-income neighborhoods, other low-income community residents, or elected residents of low-income neighborhood resident organization. A second criterion is that not more than one-third of the membership of a community housing development organization’s governing body can consist of appointed or elected officials or employees of government institutions. Up to 5% of a jurisdiction’s HOME allocation may be used for the operating expenses of community housing development organizations.
New Construction: $62,500
We propose to budget $62,500 to Habitat for Humanity to construct five homes in Orange County. The funds would be converted into permanent second mortgages for the homebuyers. The homes would be sold to families earning less than 50% of the area median income.
Administration: $43,800
The remaining $43,800 would be appropriated to the Orange County Housing and Community Development Department for administration of the HOME program.
A public hearing is scheduled for March 29, 2000, to receive citizen comments on the proposed plan. All comments received during the public hearing process and the comment period will be summarized and submitted with the Consolidated Plan to the Department of Housing and Urban Development. The Housing and Community Development Advisory Board is scheduled to review the proposed plan on March 28, 2000. We will forward the Board’s recommendation to the Council at the March 29, 2000 public hearing.
We will submit a final recommended HOME Program plan to the Council for consideration on April 24, 2000. The governing boards of Orange County, Carrboro and Hillsborough will also consider the proposed plan prior to submitting the Consolidated Plan to the Department of Housing and Urban Development on May 15, 2000.
ATTACHMENTS
1. Summary of HOME Program funding since 1995 (p. 6).
2. Summary of 1999 – 2000 HOME Program Activities (p. 7).
3. Summary of Requests and Comments Received at Public Hearings (p. 9).
4. Eligible HOME Program Activities (p. 11).
5. Request from Habitat for Humanity (p. 12).
6. Request from EmPOWERment Inc.(p. 13).
7. Request from the Orange Community Housing Corp. (Meadowmont Townhomes) (p. 14).
8. Request from the Abundant Life Center (p. 17).
ATTACHMENT 1
· In 1995 - 96, the Consortium received $368,000 from the federal HOME Program and $132,000 of State HOME funds. The four municipalities contributed a total of $112,500 in matching funds. The Town contributed $46,125 (41%) of this local match.
· In 1996 - 97, the Consortium received $386,000 of federal HOME funds. The municipalities contributed a total of $96,500 in matching funds; the Town contributed $39,565 of this amount.
· In 1997 - 98, the Consortium received $379,000 of federal HOME Program funds. As a result of Hurricane Fran in September 1996, the local match was waived for counties that were declared a disaster by a Presidential declaration.
· In 1998, the Consortium received $403,000 of HOME Program funds. The municipalities contributed $90,675 in matching funds for the program; Chapel Hill contributed $37,177.
· In 1999, the Consortium received $437,000 of federal HOME Program funds. The municipalities contributed $98,325 in matching funds for the program. The Town contributed $40,313 of this amount.
ATTACHMENT 2
1999 – 2000 HOME Program Plan
Adopted by the Chapel Hill Town Council on April 26, 1999
(Also approved by the Board of County Commissioners, Hillsborough Board of Commissioners and the Carrboro Board of Aldermen)
1. Comprehensive Rehabilitation: $147,625
The Consortium budgeted $147,625 to provide deferred loans to rehabilitate low- income owner- and renter- occupied housing in Orange County. The funds would be repaid to the HOME Program upon sale of the home or conveyance of the property to heirs that do not meet the income guidelines of the program. Homeowners with less than 80% of the area median income would be eligible for these loans. A portion of these units will be located in Chapel Hill.
2. Property Acquisition: $100,000
The Consortium allocated $100,000 to EmPOWERment Incorporated towards the acquisition of an eleven-unit apartment complex in the Carr Court neighborhood in Carrboro. EmPOWERment Inc. will renovate the building and make the apartments available to lower income households.
3. New Construction: $94,000
The Consortium budgeted $94,000 to the Orange Community Housing Corporation to construct fourteen new town houses on Scarlett Drive ($74,000), and thirty-two town houses in the Meadowmont development ($20,000). The Scarlett Drive property will be developed as a land trust. An additional $30,0000 from the Town’s Housing Loan Trust Fund will be used for development costs for this project.
4. Property Acquisition and Rehabilitation: $60,000
The Consortium allocated $60,000 to Orange Person Chatham Mental Health Area Program to acquire and, if necessary, rehabilitate houses in Orange County for persons with disabilities.
The Consortium budgeted $60,000 for the Orange Community Housing Corporation to continue operation of the Urgent Repair Program. Eligible properties must have repair needs that pose a threat to the life, safety, or health of the occupants, or need accessibility modifications for a disabled occupant.
6. Habitat for Humanity: $50,000
The Consortium budgeted $50,000 to Habitat for Humanity to purchase land to build Habitat homes. Habitat is currently considering purchasing property in Carrboro and Efland.
7. Administration: $43,700
The remaining $43,700 will be appropriated to the Orange County Housing and Community Development Department for administration of the HOME program.
ATTACHMENT 3
The following summarizes comments received by the Council and the Orange County Commissioners at public hearings held on January 31 and February 29 respectively.
1) Orange- Person-Chatham (OPC) Mental Health Agency
Pat Connolly of OPC requested $180,000 of HOME Program funds to purchase and if necessary renovate housing for lower income people with disabilities.
Staff Comment: The Consortium propose to budget $120,000 for this activity in the 2000 - 2001 HOME Program plan.
2) Habitat for Humanity
Habitat for Humanity requested $87,500 of HOME Program funds to assist with building seven homes throughout Orange County (Please see Attachment 5). Habitat requested that the funds be used as deferred payment second mortgages. The amount of each second mortgage would be $12,500.
Staff Comment: The Consortium proposes to fund a portion of the request with 2000 – 2001 HOME Program funds. The proposal includes $62,500 for Habitat for Humanity to provide second mortgages for five lower income families.
3) EmPOWERment Incorporated
Maxecine Mitchell of EmPOWERment Incorporated, requested $200,000 of HOME Program funds to develop affordable housing in Carrboro and Orange County (Please see Attachment 6).
Staff Comment: The Consortium recommends budgeting $100,000 for community revitalization activities. Funds could be used by a qualified non-profit organization for property acquisition and/or rehabilitation.
4) Orange Community Housing Corporation
A. The Orange Community Housing Corporation (OCHC) requested $160,000 of HOME Program funds to construct thirty-two townhomes in the Meadowmont development (Please see Attachment 7).
Staff Comment: The Consortium proposes to budget $80,000 of HOME Program funds to OCHC for the Meadowmont townhomes. We note that the OCHC will require additional Community Development and HOME Program fund in fiscal year 2001 – 2002 for this project.
B. The OCHC also requested $60,000 of HOME Program funds for the Urgent Repair Program. This program provides assistance to very low-income households in need of emergency maintenance (i.e. replace a furnace, install indoor plumbing, repair or replace a leaking roof) to households earning less than 60% of the area median income.
Staff Comment: The Consortium proposes to budget $30,000 of 2000 – 2001 HOME Program funds for the Urgent Repair Program.
5) Abundant Life Center
Ms. Esther Tate, Director of the Abundant Life Center requested $125,000 of HOME and/or Community Development funds to renovate the facility located on West Rosemary Street (Please see Attachment 8). The Abundant Life Center provides twenty-eight single rooms to very low-income individuals.
Staff Comment: The Consortium proposes to budget $100,250 towards the cost of this project. The Council has also budgeted $40,000 of Community Development funds for this renovation project. The Consortium is currently reviewing the feasibility of this project. A minimum housing code inspection of the facility has been requested to determine if there are any code violations. In addition, the owner of the property would be asked to develop a detailed cost estimate that would include the cost of correcting any violations. If there are extensive code violations, and based on the proposal received by the Abundant Life Center, we are concerned that the funds proposed, including the Community Development funds budgeted by the Council, would not be sufficient to complete this project. In order to use Community Development or HOME Program funds for a project, all code violations must be corrected. Federal funds cannot be used to complete a portion of a renovation project if it did not correct all code violations. In addition, the majority of the units are currently occupied. If federal funds were used for to renovate the building, it is possible that additional funds would have to be made available to relocate the current residents during the renovation process. The Consortium recommends that the Abundant Life Center continue to seek additional funds to renovate its building. The Consortium further recommends that we continue to determine the feasibility of this project and determine if we believe HOME Program funds can be used for this activity. If the Consortium determines that this is not a feasible use funds, the Consortium proposes to budget $100,250 to the Community Revitalization activity.
ATTACHMENT 4
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
· operating expenses for community housing development organizations