AGENDA #4c(3)
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Recommended 2000 – 2001 HOME Program
DATE: April 24, 2000
The attached resolution would approve a 2000 – 2001 HOME Program plan.
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% of the 25% match or $40,406. Orange County, Carrboro and Hillsborough will contribute $41,391, $11,826 and $4,927 respectively. Therefore, the Consortium staff recommends activities totaling $536,550.
Federal regulations require 15% of the grant funds (net of $43,800 of administration funds) to be budgeted to Community Housing Development Organizations. We recommend that the Council designate Orange Community Housing Corporation as the Consortium’s Community Housing Development Organization; and the organization would receive $80,000 for activities.
SUMMARY
We recommend 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 Community Housing Corporation
Meadowmont Affordable Townhomes) $ 80,000
New Construction (Habitat for Humanity) $ 62,500
Administration $ 43,800
Total $536,550
As done in previous years, we recommend that the Council use funds available in the Housing Loan Trust Fund for the Town’s match contribution.
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 currently received by the Town and the County.
Since 1995, the Consortium has received funds directly from the Department of Housing and Urban Development through the federal HOME Program.
The Consolidated Plan
On May 15, 2000, the Town and Orange County are scheduled to 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.
A summary of the components of the Consolidated Plan is included in Agenda item ___ a on tonight’s agenda. We will submit a recommended Plan to the Council on May 8, 2000. After approval of the Council, the Orange County Commissioners and the Hillsborough and Carrboro Boards, the Plan is scheduled to be submitted to HUD on May 15, 2000.
Public Participation
On January 31 and March 29, 2000, the Council held public hearings to receive ideas from citizens about how funds could be spent 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 1 for a summary of HOME related comments and requests received at the Town’s January 31 and March 29 public hearings, and Orange County’s February 29, 2000 public hearing, and requests submitted after the hearings for consideration.
We have attached a list of eligible HOME Program activities (Please see Attachment 2).
DISCUSSION
We recommend the following one-year plan for 2000 - 2001:
Property Acquisition / Rehabilitation: $120,000
We recommend that the Council 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 recommend that the Council 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 also recommend that the Council 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.
The Consortium staff continues to review the feasibility of this project, and recommends that the Council reserve these funds for the Abundant Life Center for one year. During this time, the Consortium staff would continue to work with the Abundant Life Center to identify the repairs that would be necessary for the building to comply with federal regulations and if necessary, additional funding sources for the renovation of its facility.
Please see Attachment 3 for further discussion of this project.
Community Revitalization: $100,000
We recommend that the Council 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 and rehabilitation. A qualified 501(c )(3) organization would be eligible to use these funds.
New Construction: $80,000
We recommend that the Council budget $80,000 to the 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 recommend that the Council budget $80,000 of
Community Development funds for this project in 2000 – 2001. The Consortium recommends that the Council budget an additional $80,000 of 2001 – 2002 HOME Program funds for the development of this project.
We recommend that the Council 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 one-third 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 recommend that the Council 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. If a home was sold or ownership of a home was transferred, the owner would be required to repay the second mortgage to the HOME Program.
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, as allowed by HUD.
Housing and Community Development Advisory Board’s Recommendation: On March 28, 2000, the Housing and Community Development Advisory Board voted 4-0 to recommend the proposed 2000 – 2001 HOME Program Plan to the Town Council.
Manager’s Recommendation: That the Council adopt the attached resolution approving the following 2000 – 2001 HOME Program Plan:
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
ATTACHMENTS
1. Summary of Requests and Comments Received at Public Hearings (p.7)
2. Eligible HOME Program Activities (p.10)
3. Applications for 2000 – 2001 HOME Program Funding (p.11)
A RESOLUTION APPROVING THE ACTIVITIES OF THE 2000 – 2001 HOME PROGRAM (2000-04-24/R-2)
WHEREAS, the Council of the Town of Chapel Hill held two public hearings to receive citizen comments and proposals regarding the use of $438,000 of federal HOME Program funds and $98,550 of local matching funds for a total of $536,550;
NOW, THEREFORE, BE IT RESOLVED that the Council of the Town of Chapel Hill approves the following activities to be carried out by the members of the Orange County HOME Consortium in 2000 – 2001:
Activity Amount
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
BE IT FURTHER RESOLVED that the Council authorizes this plan to be incorporated into the Consolidated Plan developed with Orange County, Hillsborough and Carrboro for submittal to the U.S. Department of Housing and Urban Development on May 15, 2000.
This the 24th day of April, 2000.
ATTACHMENT 1
Please see Attachment 3 for applications for 2000 – 2001 HOME Program funding for each of the activities discussed below.
The following summarizes requests received by the Council on January 31 and March 29, 2000 and the Orange County Commissioners on February 29, 2000, and requests received after the hearing.
1) Orange- Person-Chatham (OPC) Mental Health Agency
OPC Mental Health requested $180,000 of HOME Program funds to purchase and if necessary renovate housing for lower income people with disabilities.
Staff Comment: We recommend that the Council 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. Habitat requested that the funds be used as deferred payment second mortgages. The amount of each second mortgage would be $12,500.
Staff Comment: We recommend that the Council 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
EmPOWERment Incorporated requested $200,000 of HOME Program funds to develop affordable housing in Carrboro and Orange County.
Staff Comment: The Consortium recommends that the Council budget $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.
Staff Comment: The Consortium recommends that the Council 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 recommends that the Council budget $30,000 of 2000 – 2001 HOME Program funds for the Urgent Repair Program.
5) Abundant Life Center
The Abundant Life Center requested $125,000 of HOME and/or Community Development funds to renovate the facility located on West Rosemary Street. The Abundant Life Center provides twenty-eight single rooms to very low-income individuals.
Staff Comment: The Consortium recommends that the Council budget $100,250 towards the cost of this project. The Council has also budgeted $40,000 of 1999 – 2000 Community Development funds for this renovation project. We recommend that the Council reserve funds for the Abundant Life Center for one year. During this time, the Consortium staff would continue to work with the property owner to determine the cost of the project and if necessary, seek additional funds to renovate the building.
The Consortium continues to review the feasibility of this project. A minimum housing code inspection of the facility has been completed and has identified housing code violations. The next step is for the property owner to develop a detailed cost estimate that would include the cost of correcting any violations.
The Consortium staff remains concerned that the funds recommended for this project, including the Community Development funds budgeted by the Council, would not be sufficient to complete this project. Federal funds cannot be used for a renovation project if all code violations were not corrected. In addition, the majority of the units are currently occupied. If federal funds were used to renovate the building, it is likely that additional funds would be needed to relocate the current residents during the renovation process.
6) Request from the Children’s Therapeutic Foundation
In a letter dated March 30, 2000, the Children’s Therapeutic Foundation requested $250,000 of HOME Program funds to acquire property to build a residential care facility for at-risk youths.
Staff Recommendation: The Consortium Staff does not recommend that the Council fund this activity at this time. We do not believe that this is a high priority affordable housing project. In addition, the new organization has not identified committed funds for the ongoing operation of the organization, the facility or other funding to complete the construction project. We recommend that the Children’s Therapeutic Foundation inquire about other sources of funds for this project.
ATTACHMENT 2
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
ATTACHMENT 3
2000 – 2001
HOME PROGRAM FUNDING