AGENDA #4c(3)
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Recommended 2001–2002 HOME Program
DATE: April 23, 2001
The attached resolution would:
(1) Approve a plan for use of $743,475 of 2001-2002 HOME Program funds; and
(2) Authorize this plan including amendments to the 1999-2000 and 2000-2001 HOME Program to be incorporated into the Annual Update to the 2000-2005 Consolidated Plan developed with Orange County, Hillsborough and Carrboro for submittal to the U.S. Department of Housing and Urban Development on May 15, 2001.
The U.S. Department of Housing and Urban Development has awarded the Orange County HOME Consortium $483,000 for fiscal year 2001-2002. In addition, the participating municipalities are required to contribute a total 25% match of the grant funds after subtracting administration costs of $48,300. The total match requirement is $108,675. The Town’s contribution to matching fund is 41% or $44,557. Orange County, Carrboro and Hillsborough will contribute $45,644, $13,041 and $5,434 respectively. In addition, we propose to reprogram $151,800 of previous years HOME Program funds. Therefore including Administration, the Council will be planning activities for a total of $743,475.
We have made a slight change to the proposal that was submitted to the Council for the March 28, 2001 public hearing. The revised proposal includes an additional $21,550 of previous years HOME funds that Review Committee recommends reprogramming for other eligible HOME activities as indicated below.
The HOME Program Review Committee recommends the following use of 2001–2002 HOME Program funds:
Preliminary Revised
Recommendation Recommendation
Town of Chapel Hill (Transitional Housing) $100,000 $100,000
Orange-Person-Chatham Mental Health Assoc. $ 58,625 $ 58,625
Recommendation Recommendation
EmPOWERment, Inc. $ 50,000 $ 50,000
Orange Community Housing Corporation $ 30,000 $ 30,000
Habitat for Humanity $ 20,000 $ 32,500
Rehabilitation
EmPOWERment, Inc. $ 0 $ 4,525
Orange County Housing and Comm. Dev. $ 0 $ 4,525
Administration:
Orange County Housing and Comm. Dev. $ 48,300 $ 48,300
Total $721,925 $743,475
As in previous years, we propose to use funds available in the Housing Loan Trust Fund for the Town’s match contribution.
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.
On May 15, 2000, the Town and Orange County submitted to the U.S. Department of Housing and Urban Development a five-year Consolidated Plan covering fiscal years 2000–2001 through 2004–2005. The purpose of the Plan is to identify and prioritize housing and community development needs for Chapel Hill and Orange County. The Plan also suggests how the Town and the County will address needs over a five-year period.
The Plan also included a 2000-2001 Community Development plan and a 2000–2001 HOME Program approved by the Council, the Orange County Commissioners, and the Hillsborough and Carrboro Boards of Aldermen.
This year, we are required to submit an Annual Update to the 2000 – 2005 Consolidated Plan. The Update includes the 2001-2002 Community Development and HOME Program Plans and identifies new housing and community development initiatives in Orange County. Please see Agenda Item #4c(1) a for a draft of the Annual Update.
On January 23, 2001 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. A second public hearing was held on March 28, 2001 to receive citizen comments on a proposed Plan. On February 7, 2001, the Orange County Commissioners held a public hearing to receive citizen comments on how HOME Program funds could be spent.
Please see Attachment 2 for a summary of comments requests received for HOME Program funding.
In addition to $483,000 of 2001–2002 HOME Program funds $130,250 of 2000–2001 funds, and $21,550 of 1999-2000 funds are also available. The 2000-2001 funds were budgeted for the Abundant Life / Seeds of Sheba Center to renovate its building on West Rosemary Street. The organization withdrew its request for HOME Program funding. The 1999-2000 funds were budgeted for the Urgent Repair Program that was operated by the Orange Community Housing Corporation. The Urgent Repair Program has been temporarily suspended while the Orange Community Housing Corporation and other local non-profit agencies reorganize the program. Therefore, the funds budgeted for this activity are not needed at this time. The HOME Program Review Committee recommends that these funds be reallocated for other eligible activities at this time.
On October 23, 2000, the Council passed a resolution to participate in a HOME Program Review Committee along with Orange County, Carrboro and Hillsborough. The purpose of this Committee is to allow elected officials to have more involvement in the development of the annual HOME Program plan and to review the progress of HOME funded activities on a regular basis.
The Committee is comprised of one elected official from each participating government and the Manager or his designee. The Council appointed Council Member Edith Wiggins to represent the Town Council. Assistant Town Manager Florentine Miller and Community Development Coordinator Loryn Barnes also attend Committee meetings. Other representatives attending the meetings are: Orange County Commissioner Margaret Brown and Housing and Community Development Director Tara Fikes; Carrboro Alderman Jacqueline Gist and Community and Economic Development Director James Harris; and Hillsborough Commissioner Kenneth Chavious and Planning Director Margaret Hauth.
DISCUSSION
The HOME Program Review Committee recommends the following one-year plan for 2001–2002:
Property Acquisition / Rehabilitation: $343,625
Land Acquisition: $130,000
New Construction: $112,500
Homebuyer Assistance: $100,000
EmPOWERment, Inc. would use $100,000 to provide second mortgage assistance to households throughout Orange County. Eligible activities must serve households earning less than 80% of the HUD published area median income.
Rehabilitation: $9,050
EmPOWERment, Inc. would use $4,525 to upgrade the electrical and heating system in a house that it will renovate for a first-time homebuyer.
Orange County Housing and Community Development would also use $4,525 for the comprehensive rehabilitation program to renovate properties throughout Orange County.
Administration: $48,300
The remaining $48,300 would be allocated to the Orange County Housing and Community Development Department for administration of the HOME program.
RECOMMENDATIONS
Housing and Community Development Advisory Board’s Recommendation: On March 27, 2001, the Housing and Community Development Advisory Board voted 3-0 to recommend the proposed 2001-2002 HOME Program Plan to the Town Council.
Manager’s Recommendation: That the Council adopt the attached resolution approving the following 2001-2002 HOME Program Plan:
Town of Chapel Hill (Transitional Housing)$100,000
Orange-Person-Chatham Mental Health Assoc. $ 58,625
EmPOWERment, Inc.$ 50,000
Orange Community Housing Corporation$ 30,000
Habitat for Humanity$ 32,500
Rehabilitation: EmPOWERment, Inc., Orange County $ 9,050
Administration: Orange County Housing and Comm. Dev. $ 48,300
Total $743,475
ATTACHMENTS
1. Summary of HOME Program funding since 1995 (p. 8).
2. Summary of Requests for 2001–2002 HOME Program Funding (p. 9).
A RESOLUTION APPROVING THE ACTIVITIES OF THE 2001–2002 HOME PROGRAM (2001-04-23/R-3)
WHEREAS, the Council of the Town of Chapel Hill held two public hearings to receive citizen comments and proposals regarding the use of $483,000 of federal HOME Program funds and $151,800 of previous years HOME funds, and $108,675 of local matching funds for a total of $743,475;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council approves the following activities including amendments to the 1999-2000 and 2000-2001 HOME Program to be carried out by the members of the Orange County HOME Consortium in 2001- 2002:
Town of Chapel Hill (Transitional Housing)$100,000
Orange-Person-Chatham Mental Health Assoc. $ 58,625
EmPOWERment, Inc.$ 50,000
Orange Community Housing Corporation$ 30,000
Habitat for Humanity$ 32,500
Rehabilitation: EmPOWERment, Inc., Orange County $ 9,050
Administration: Orange County Housing and Comm. Dev. $ 48,300
Total $743,475
BE IT FURTHER RESOLVED that the Council authorizes this plan to be incorporated into the Annual Update to the 2000-2005 Consolidated Plan developed with Orange County, Hillsborough and Carrboro for submittal to the U.S. Department of Housing and Urban Development on May 15, 2001.
This the 23rd day of April, 2001.
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.
· In 2000, the Consortium received $438,000 for fiscal year 2000-2001. The municipalities contributed $98,550 in matching funds for the program. The Town’s contribution to matching fund was $40,406.
ATTACHMENT 2
1) Town of Carrboro
The Town of Carrboro requests $135,000 of HOME Program funds to purchase three two-bedroom units in Old Well. The properties would be renovated and sold to first-time homebuyer units or made available as rental units for families earning less than 80% of the area median income.
Staff Comment: The recommended 2001-2002 HOME Program Plan includes $135,000 for this request.
2) Chapel Hill Department of Housing
The Chapel Hill Department of Housing requests $100,000 of HOME Program funds to develop a transitional rental housing program for public housing residents. The program would be a stepping-stone for families between public housing and the private housing market. Funds would be used to purchase a house in Chapel Hill.
At the March 28, 2001 public hearing, Tracy Dudley, Vice Chair of the Town’s Housing and Community Development Advisory Board stated that the Board supported the preliminary recommendation for funding for this activity.
Staff Comment: The recommended 2001-2002 HOME Program Plan includes $100,000 for this request.
3) Community Land Trust in Orange County / Orange Community Housing Corporation
The Land Trust, in conjunction with the Orange Community Housing Corporation and Habitat for Humanity, requests $30,000 to purchase land for two homes on Dillard Street in Carrboro. EmPOWERment would renovate the two homes that would then be sold to first-time homebuyers earning approximately 70% of the area median income. Both homes would be placed in the land trust.
At the March 28, 2001 public hearing, Executive Director of the Orange Community Housing Corporation Robert Dowling stated that funding for this activity would provide an opportunity for the Corporation to collaborate with Habitat and EmPOWERment, Inc. to develop two affordable units in Carrboro.
Staff Comment: The recommended 2001-2002 program includes funding for this activity.
4) EmPOWERment, Inc.
EmPOWERment requests $50,000 to provide soft second mortgages on properties in Hillsborough and unincorporated Orange County, and $50,000 for properties in the Chapel Hill and Carrboro area. EmPOWERment proposes to use these funds to assist first time homebuyers earning less than 80% of the median income.
At the March 28, 2001 public hearing, Director of EmPOWERment Mark Chilton stated that he supported the preliminary recommendation for funding EmPOWERment’s requests. Mr. Chilton also suggested that the HOME Consortium consider amending the regulations of the HOME funded second mortgage program so that they are similar to the regulations used by the Town for the Community Development funded second mortgage program.
Staff Comment: The recommended 2001-2002 HOME Program Plan includes $100,000 for this activity.
5) EmPOWERment, Inc.
EmPOWERment requests $50,000 of HOME program funds to purchase approximately 5 low-cost condominiums in Orange County. The properties would be used for affordable rental housing.
Staff Comment: The proposed 2001-2002 HOME Program Plan includes $50,000 for this activity.
6) Habitat for Humanity
Habitat for Humanity, in cooperation with the Orange Community Housing Corporation, the Community Land Trust in Orange County, and EmPOWERment, Inc. requests $150,000 of HOME Program funds to be set aside to create a fund for land acquisition and the development of affordable housing. The funds would be accessible to any non-profit housing provider of affordable housing.
At the March 28, 2001 public hearing, Susan Levy, Executive Director of Habitat for Humanity suggested that the HOME Consortium consider leveraging possibilities for the HOME funds budgeted to the Town of Carrboro and the Town of Chapel Hill.
Staff Comment: Because sites have not been identified for use of funds, the proposed HOME Program Plan does not include funds for this activity. We believe that other sources of funds that do not have the timeline for commitment would be a better source of funds for this type of activity.
7) Habitat for Humanity
Habitat also requests a $20,000 grant of HOME Program funds to pay for the extension of a sewer to a lot owned by the Community Land Trust in Orange County. Habitat intends to build a house on this lot that would be sold to a lower income family earning less than 50% of the area median income.
Staff Comment: The recommended HOME Program includes $30,000 for this request.
8) Orange Community Housing Corporation
The Orange Community Housing Corporation requests $80,000 of HOME Program funds to develop 32 affordable condominiums in the Meadowmont development. The two- and three-bedroom condominiums would be sold to first-time homebuyers earning less than 80% of the area median income.
Staff Comment: The proposed 2001-2002 HOME Program plan includes $80,000 for this request.
9) Orange Person Chatham Mental Health Association
Orange Person Chatham Mental Health Association requests $100,000 to acquire and, if necessary, renovate properties for its clients with severe disabilities earning below 30% of the area median income. The Association proposes to use funds to create 2 single occupancy efficiency units.
Staff Comment: The recommended HOME Program Plan includes $58,625 to fund a portion of this request.
10) Pines Community Center, Inc.
The Pines Community Center, Inc. requests $171,250 of HOME Program funds to create 18–21 lots of affordable housing on property it owns on Park Road. The Center proposes to develop detached homes, multi-family units and two story units on the property.
Staff Comment: We do not recommend funding for this activity at this time. We do not support committing HOME funds to this project because there is not an clear and approved plan for developing this property.
11) Residential Services, Inc.
Residential Services, Inc requests $212,500 of HOME Program funds for initial project costs of a continuing care facility including acquisition of land, fees, improvements, and architectural and planning costs.
Staff Comment: The proposed 2001-2002 HOME Plan includes $100,000 for this activity.