AGENDA #5e
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
SUBJECT: Town Transitional Housing for Public Housing Families
DATE: April 23, 2001
The attached resolution would approve a Town transitional housing program for public housing families.
· We believe a Town transitional housing program would help some public housing families make the transition to private housing.
· 15 families are paying over $400 monthly in rent, 6 families are paying over $500 monthly in rent.
· Maximum time for participation in the program would be five years.
· Up to 20% of rent would be deposited in an escrow account and would be given to participants when the program is completed. Participants would be required to use funds for a down payment on a home or deposits for private market rental housing.
· About 40 houses or townhomes are currently for sale in Chapel Hill at a cost of less than $100,000.
· Funding for the proposed Town transitional housing program would be an eligible use of HOME Program Funds.
This report responds to a request from the Council to provide a report on Town-financed rental property. On March 3, 2001, during a budget work session, the Council requested a report on Town-owned rental property as a way of helping public housing families make the transition into private housing.
The public housing program as established under the Federal Housing Act of 1937 provides affordable rental housing for low-income families. In accordance with the Housing Act of 1937 families pay 30% of the adjusted household income for rent and utilities. The Housing Act envisioned that as families’ incomes increased to a level at which they could afford private market rent they would move out of public housing, making way for families on the waiting list to move into public housing.
Some public housing families’ household incomes have increased to a level where 30% of the adjusted income is almost comparable to private market rent. However, these families continue to remain in public housing.
Currently, there are about 40 families that have lived in public housing over 20 years. We believe some families remain in public housing for the following reasons:
· They work in low paying jobs and cannot afford private market housing
· They are not able to save enough money for security deposits or down payments.
· They are hesitant to leave housing where the rent decreases if the family’s income decreases.
Currently, there are 15 families paying over $400 monthly rent. There are 6 families paying over $500. The following chart summarizes monthly rents currently paid by Chapel Hill’s public housing families.
|
Monthly Rent |
$0-$99 |
$100-$199 |
$200-$299 |
$300-$399 |
$400-$499 |
$500+ |
|
# of families paying |
186 |
53 |
36 |
27 |
15 |
6 |
We believe a Town of Chapel Hill rental housing program could assist some of the public housing families who are paying monthly rents that are almost comparable to private market rents make the transition to private housing.
Some of the key elements of the program are:
· Participation in the Program would be limited to public housing families with a rent paying ability of at least $450 per month.
· Maximum time for participation in the Program would be five years. Participants remaining in the program after five years would pay market rate rent.
· Up to 20% of rent would be 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 down payment on a home or deposits for private rental housing.
· Participants remaining in the Program after five years would pay market rate rent and would be required to seek private housing and leave the program.
We propose the development of a Town transitional housing program that would help public housing families make the transition from public housing to the private housing market. Under the proposed program, 10 families who are currently living in public housing or are on the public housing waiting list would be assisted.
The transitional housing program would assist families with a rent-paying ability of at least $450 per month. Unlike the Federal public housing program, monthly rent would not increase as the families’ income increased.
We believe the proposed transitional housing program should consist of at least 10 homes. We propose that the Town acquire the 10 homes over the next several years by purchasing or constructing one to two homes per year. The transitional housing program would be a stepping-stone between public housing and the private housing market. Participation in the program would be limited to five years. During the five-year period, participating families would receive services to help them make a successful transition to the private housing market. Services provided would include the following:
· Budget counseling to help participants develop household budgets and an assessment of income and expenses.
· Homeownership counseling to provide step-by-step guidelines to purchasing your first home.
· Debt management with a focus on consumer debt, and helping participants develop a plan to pay off debts.
· Basic home maintenance and upkeep to provide general information on routine maintenance of a home.
The proposed transitional housing program would also help families make the transition to private housing by providing them with financial assistance to help with a down payment on a home or security deposits.
We have researched area real estate data to obtain information on the number of single-family homes or townhomes that are for sale and would be appropriate for the Transitional Housing Program. According to the Multiple Listing Service (MLS), there are currently about 40 single-family homes or townhomes in Chapel Hill with a sales price of less than $100,000.
We propose to purchase single-family detached homes or townhomes for the proposed transitional housing program. The homes or townhomes we propose to purchase for the transitional housing program are located in Chapel Hill at a sales price of $65,000 to about $99,900.
We have attached examples of single-family detached homes and townhomes that are for sale and would be appropriate for the transitional housing program (please see Attachment 1).
A key goal of the HOME Program is to expand the supply of decent, safe sanitary and affordable housing, with emphasis on rental housing for low-income families. We believe the purchase of single-family homes or townhomes would be an eligible HOME Program activity. Therefore, on February 23, 2001 we submitted an application to the County requesting $100,000 of 2001-2002 HOME Program Funds. If our application is successful, the funds would be used to acquire a house and pay for associated costs.
We would purchase homes or townhomes that are in relative good condition with minimal repair needs. We believe maintenance and upkeep would be similar to the preventive maintenance and refurbishing program we currently have in place for the public housing program.
Based on our experience in maintaining the Town’s public housing apartments, we estimate that the cost for routine maintenance and upkeep of a home in the transitional housing program would be about $1,000 per year. The estimated cost of refurbishing the home for a new family would be about $1,500 every five years.
We believe we would benefit from the assistance of a housing agency that is experienced in purchasing and renovating homes for low-income families. EmPOWERment, Inc has such experience. Therefore, we have talked with EmPOWERment, Inc. about possibilities for assistance. Options for assistance from EmPOWERment, Inc. include the following.
1. EmPOWERment, Inc. would purchase property, make needed repairs, and turn property over to the Town. The Town would reimburse EmPOWERment, Inc. for the cost of the property, including repairs, and pays EmPOWERment, Inc. for its services.
2. EmPOWERment, Inc. would identify property, determine repair needs and estimated costs of repairs and initiate a purchase option on the Town’s behalf. The Town would purchase property, make repairs, and pay EmPOWERment, Inc a finder’s fee
In addition to providing assistance with acquiring property, EmPOWERment, Inc. would also assist in providing homebuyers counseling services for program participants.
Participants in the program would pay monthly rent of at least $450, but not more than the amount of their current rent. The amount estimated of rental income per year would be about $5,400 per participant.
We would use a portion of the rental income for maintenance costs. We would propose to use the remaining rental income to assist with future home purchases. We have verified with the administrator of the HOME Program that future home purchases would be an eligible use of rental income.
We have also verified with a HUD Financial Analyst that we would not be required to report income from the Transitional Housing Program in the public housing operating budget. According to the Financial Analyst, rental income would not affect the amount of subsidy received from HUD.
On November 9, 2000, Housing staff invited the 21 families who are paying over $400 monthly rent to a meeting to receive questions and comments on the proposed transitional housing program. Ten of the 21 families attended the meeting. The families that attended the meeting expressed interest in wanting to participate in the proposed program. We have attached written comments received from residents.
There are currently 21 public housing families who are paying monthly rents that are almost comparable to private market rents. We believe many of these families could move into housing on the private market through assistance that would be provided through a Town transitional housing program.
We also believe a Town transitional housing would be a financial resource for the public housing program. Funding from the U. S. Department of Housing and Urban Development for public housing operations has decreased. Therefore, we need to consider a supplemental source of revenue for the public housing program.
Manager’s Recommendation: That the Council adopt the attached resolution approving a Town transitional housing program for public housing families.
1. Written comments received from public housing families (p. 8)
2. Examples of homes or townhomes that would be suitable for the transitional housing program (p. 12)
3. Calculation of rental income for 1 participant (p. 13)
4. The Transitional Housing Program (p. 14)
A RESOLUTION APPROVING A TOWN TRANSITIONAL HOUSING PROGRAM FOR PUBLIC HOUSING FAMILIES (2001-04-23/R-9)
WHEREAS, the Council is supportive of a Town transitional housing program for public housing families; and
WHEREAS, a Town transitional housing program would help public housing families enter the private housing market;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Manager is hereby authorized to implement a Town transitional housing program with the following components:
· Participation in the Transitional Housing Program would be limited to families with a rent-
paying ability of at least $450 per month.
· Participation in the Program would be for a maximum of five years. Participants remaining
in the program after five years would pay market rate rent.
· Up to 20% of the monthly rent would be deposited in an escrow account. The amount would
be given to the participant upon completion of the program.
· Participants would be required to use funds in the escrow account for a down payment on a
home or deposits for private rental housing.
BE IT FURTHER RESOLVED that the Manager is authorized to implement a Town transitional housing program for public housing families.
This the 23rd day of April, 2001.
ATTACHMENT 1
WRITTEN COMMENTS
FROM
PUBLIC HOUSING
FAMILIES
ATTACHMENT 2
|
Location |
Sales Price |
Estimated Repair Cost |
Description |
|
Weaver Dairy Rd. area |
$81,900 |
$3,000 |
This single story townhome was built in 1984, consists of about 1,167 sq. ft. and is in fair condition. It has 2 bedrooms, 2 full baths, and patio. It also has carpeting, central air conditioning, electric range and refrigerator. |
|
Ephesus Church Rd. area |
$72,500 |
$3,000 |
This single story townhome was built in 1967, consists of about 900 sq. ft. and is in fair condition. It has 2 bedrooms, 1.5 baths, walk-in closets, electric range, refrigerator, garbage disposal, carpeting, central air conditioning, gas furnace, and a patio. This town home also has brick veneer on the exterior. |
|
N. Graham St. area |
$92,000 |
$6,000 |
This single family detached home was built in 1995, consists of about 800 sq. ft. and is in very good condition. It has 3 bedrooms, 1 bathroom, eat-in kitchen, electric range, refrigerator, washer and dryer, carpeting, central air conditioning and a gas heat pump. This house also has hardwood siding and a shingle roof |
|
Monthly |
First Year |
Second Year |
Third Year |
Fourth |
Fifth Year |
Totals |
|
|
Rental Payment |
$450 |
$5,400 |
$5,400 |
$5,400 |
$5,400 |
$5,400 |
$27,000 |
|
Amount Deposited in Escrow Account for Participant |
$50 |
$600 |
$600 |
$600 |
$600 |
$600 |
$3,000 |
|
Income to Public Housing Program |
$400 |
$4,800 |
4,800 |
$4,800 |
$4,800 |
$4,800 |
$24,000 |
Note:
1. The monthly rental payment for participation is $450.
2. The total amount of rent paid by the participant over the five-year period is estimated to be $27,000.
3. The total amount deposited in the escrow account and will be paid to the participant at the end of the five-year period is estimated to be $3,000.
4. The total amount of income to the public housing program is estimated to be $24,000
ATTACHMENT 4
April 2001
Introduction page 16
Program Procedures page 16
Participation Incentives page 16
Application and Selection Process page 17
Supportive Services page 17
Application For Participation page 19
Lease Agreement page 22
INTRODUCTION
Public housing as established under the Housing Act of 1937 is a way of providing decent, safe and sanitary housing for individuals who are excluded from the private housing market because of their low-income status. The primary objective of the Housing Act of 1937 is to provide low-income families with affordable housing by charging the family not more than 30% of adjusted household income for rent and utilities. The Act envisioned that families’ incomes would increase to a level whereby they could afford private market housing. Thus, these families would move out of public housing, making way for other low-income families.
Some public housing families’ household income has increased to a level whereby the amount of their public housing rent is almost comparable to private market rent. However, these families continue to live in public housing.
Under the Transitional Housing Program public housing families, or applicants, are provide low cost rental housing and budget counseling and financial management services to help them make a successful transitional from public housing to the private housing.
Participation in the Transitional Housing Program is limited to public housing families or applicants with a rent paying ability of at least $450 per month.
Families who are selected to participate in the program would be required to participate in budgeting and financial management sessions. The Department of Housing would provide or arrange for the budgeting and financial management sessions.
The maximum amount of time for participation in the program is five year. At the end of the five-year period, families must leave the program and move into private ownership or rental housing. Participants remaining in the program after five years would pay market rate rent.
PARTICIPATION INCENTIVES
Incentives for participation in the program include the following:
· Monthly rent is at least $450 but not more than families current rent and will not increase
although the families’ income may increase
· Up to 20% of the monthly rent will be deposited into an escrow account
· The amount deposited in the escrow account is given to participants when they leave
the program
· The amount in the escrow account must be used for a down payment on a home or
rental security deposits.
The Department of Housing shall not on account of race, creed, national origin, or religion deny any family the opportunity to participate in the Transitional Housing Program. In selecting families from eligible applicants, families meeting the following criteria will be selected to participate in the Program.
1. Monthly rent is paid by the date rent is due.
2. The family has sufficient income to pay at least $450 monthly rent and utilities.
3. There has not been any lease violations by any member of the family in the past 12
months.
4. The families goal is to live in private market housing, either owner or rental.
The order of priority in selecting applicants for participation in the Program shall be determined based on the date and time application is received. After receipt of application, the following procedures shall apply.
1. The application is reviewed to determine if the family is eligible.
2. Eligible or denial letter is mailed to applicant.
3. If eligible, application is placed in selection pool according to date and time application was
received.
4. Application is selected from selection pool and applicant is mailed a letter of consideration
for the Transitional Housing Program.
5. Applicant contacts the Resident Services Officer and schedules an appointment for an
interview to verify the accuracy of the information on the application and review pre-
occupancy procedures.
6. An orientation session is held with applicant to review the requirements of the Program and
the lease agreement.
Participants in the Transitional Housing Program are required to participate in supportive services. Required supportive services include budgeting, debt management, homeownership counseling and training on basic maintenance and upkeep of a home. These services are essential in helping participants make a successful transition to the private housing market.
Supportive services that would be provided for program participants are:
1. Through Community Financial Counseling, a division of the Women’s Center, we would
arrange for participants to receive debt management and budget counseling.
2. Through EmPOWERment, Inc. Homebuyers Class, we would arrange for participants to
receive the following:
· Step-by-step guidelines to first-time homeownership
· Assistance in determining how much home they can afford
· Assistance in repairing bad credit
3. Through the Cooperative Extension Service, participants we would arrange for participants
to receive training on basic maintenance and upkeep of a home.
APPLICATION FOR PARTICIPATION
Date:______________ Time:___________
1. Name________________________________________________________________
Spouse_______________________________________________________________
Address______________________________________________________________
Telephone____________________________________________________________
2. How Long Have You Lived In Public Housing?_______________________________
3. How Much Is Your Monthly Rent?_________________________________________
4. List All Persons Who Are Members Of Your Household
|
NAME |
RELATIONSHIP TO HEAD |
SEX |
AGE |
5. Are You Employed? YES________ NO__________
6. If Yes, Where Are You Employed?____________________________________________
7. Is This a Full-Time Job?_____________________________________________________
8. How Many Hours Do You Work Per Week?_____________________________________
9. What Is The Amount Of Total Household Income?________________________________
10. Why Do You Want Do Move To Private Market Housing?__________________________
_________________________________________________________________________
_________________________________________________________________________
11. Do You Require Child Care? Yes________________ No__________________
IF YES, Where__________________________________________________________
How Much_____________________________________________________________
Does Anyone Or Any Agency Help You? Yes______________ No______________
If So, Whom______________________________________________________________
Will You Need Child Care To Work Or Attend Training? Yes__________ No_________
12. When Your Participation In The Transitional Housing Program Ends In 5 Years, Is It Your
Objective To (please check one) :
____ Purchase a home
_____ Rent on the private market
13. Are You Willing To Participate In A Budgeting And Financial Management Program?
_________________________________________________________________________
14. Please Explain Why You Are Interested In This Program?
__________________________________________________________________________
__________________________________________________________________________
15. What Kind Of Assistance Is Important In Helping You Obtain Housing In The Private
Market?___________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
16. Where Do You See Yourself In Five Years?_______________________________________
___________________________________________________________________________
___________________________________________________________________________
Signature Of Applicant___________________________________________________________
Date______________________________________
NORTH CAROLINA Account ____________
ORANGE COUNTY Security Deposit $_________
Transitional Housing Program
THIS LEASE is made this ______ day of __________, by and between the Town of Chapel Hill, called "Town" and _______________ called you.
The Town rents to you upon the terms and conditions set forth below, unit, located at ________________________________________, Chapel Hill, North Carolina.
1. PERIOD OF LEASE AND RENT
This Lease begins upon occupancy and continues for five years unless terminated in accordance with paragraph 11 of this lease. Rent for the period beginning ______________, and ending at midnight ___________________________ is $________ Then, monthly rent is $______ per month. Rent is due the first day of each month, and is past due on the fifth day of the month (unless the fifth day of the month is a Saturday, Sunday, or Holiday). You will be considered in default if you pay after the 5th day of the month. You will be subject to termination proceedings following the 14th day after the Notice of Termination is mailed, if the rent has not been paid. If termination proceedings are started, you will be required to pay the current prevailing court cost.
MEMBERS OF THE HOUSEHOLD
You state to the Town that the following named persons, together with you, will occupy the unit:
|
NAME |
RELATIONSHIP |
SEX |
AGE |
3. SECURITY DEPOSIT
Before taking possession of the unit, you agree to pay the Town the sum of one month rental payment. The deposit may not be used to pay rent or other charges while you are occupying the unit. If you vacate or abandon the unit, or if this Lease is terminated by the Town, the security deposit may be used to pay rent, damages, or other charges. The security deposit plus interest, will be returned to you upon vacating the unit, provided:
1. All rent, and other charges are paid;
2. The unit and its equipment are left clean;
3. There is no damage to the unit or its equipment beyond normal wear and use;
4. The keys to the unit are returned to the Housing Department.
4. UTILITIES
The Town shall not furnish any utilities. You are responsible for all utilities and must have
all utilities turned on in your own name prior to moving in.
5. TOWN AGREES:
To maintain the unit in a decent and safe condition in accordance with the
requirements of local housing codes.
6. YOU AGREE:
A. Not to sublease the unit, or rent the unit or any part of it to someone else.
B. To use the unit solely for residential purposes.
C. Not to provide accommodations for boarders or lodgers.
D. That you, your family members who occupy the unit with you, and your guests will not cause or allow the unit, to be used for any unlawful purpose.
E. That you, and any member of your household, or guests shall not engage in any illegal drug or other illegal or criminal activity.
F. That you, your family members who occupy the unit with you, and your guests, shall not engage in alcohol abuse.
G. To keep the yard and other areas assigned to you for maintenance and upkeep free of debris and in a well maintained clean and safe condition.
H. To dispose of all garbage, rubbish, and other waste in a sanitary, safe manner.
I. To refrain from and to cause your family members, guests and visitors to refrain from destroying, defacing, damaging or removing any part of the unit, equipment, or landscaping.
J. To not park any unlicensed or inoperable motor vehicles on the property.
K. To park motor vehicles only in the designated parking areas.
L. To pay all costs, fees, and charges incurred by the Town in connection with eviction and/or the collection of your account, if the Town is given a favorable court judgment.
M. That in the event you vacate the unit, for whatever reason, and leave furniture, household furnishing, equipment, or clothing, and other personal property in the unit, without notifying the Town of your intention to resume occupancy or to remove said personal property, the Town shall have the right to enter the unit and remove all such furniture, household furnishings, equipment, clothing, and other personal property and store it at your expense. If the personal property is not claimed by you within fourteen calendar days from the date of vacating the unit, the Town may proceed with a public sale of property as provided by Article 1 of Chapter 44‑A of the General Statutes of North Carolina.
N. Not to make major repairs or any alterations to the unit, without written permission from the Town or to install wallpaper, or nail, staple, or glue carpeting to floors.
O. Not to install any major appliances such as air conditioners, dryers, and aerials or television satellite dish without notification to the Town.
P. To not use electric space heaters or kerosene heaters.
Q. Not to keep pets except in accordance with the Pet Policy of the Department of Housing.
8. INSPECTIONS
A. When you move in your unit the Town shall inspect your unit and give you a written statement of the condition of the unit and the equipment in it. You and/or your representative must sign such inspection report, indicating agreement by you and Town regarding condition.
B. When you vacate the unit, the Town shall inspect the unit and furnish you with a written statement of charges that you are responsible. You and/or your representative must participate in the inspection unless you move out without notice to the Town. If you move out without notice to the Town, the Town shall mail a notice of inspection and final charges to you at your last known address. Any right to a grievance hearing about final charges shall be waived.
C. You agree that upon reasonable advance notice, the duly authorized agent or, employee of the Town will be permitted to enter the unit for the purpose of performing routine inspections and repairs. A written statement specifying the purpose of entry shall be delivered to the premises at least two days before such entry shall be considered reasonable advance notice. Routine inspections will be performed of your unit at least five times per year to determine needed maintenance repairs. Written notice will not be required for maintenance requested by you. The Town shall have the right to enter the unit without notice if the Town believes that an emergency exists, which requires such entrance. If you and all adult members of your household are absent at time of entry, the Town shall leave on the premises a written statement specifying the date, time, and purpose of entry.
9. LEGAL NOTICES:
Any notice required hereunder will be sufficient if delivered in writing to you personally, or to an adult member of your household, or if sent by prepaid First Class Mail properly addressed to you. Notice to the Town must be in writing, addressed to the Director of Housing, and delivered to a Town employee at the Department of Housing office, or sent by prepaid First Class Mail properly addressed.
10. TERMINATION OF LEASE:
A. This Lease may be terminated by you at any time by giving fifteen calendar days written notice either delivered to the Town in person or sent by prepaid First Class Mail.
B. This Lease may be terminated by the Town at any time by giving written notice as set forth in Section 9, not less than 30 days prior to termination except for nonpayment of rent which shall be terminated in accordance with Section 1 of this Lease. Such notice may only be given for good cause, including but not limited to, physical or verbal abuse and threats of violence to Town staff, non‑payment of rent, drug related criminal activity on or off the premises, alcohol abuse serious or repeated involvement in criminal or illegal drug related activity, serious or repeated damage to the premises, creation of physical hazards. Notice by either party to this lease may be given on any day of the month. If the Town should elect to terminate this Lease, you shall be informed in writing, by a duly authorized representative of the Town, the reasons for the termination, and shall be given an opportunity to reply.
14. CONTRACT RESPONSIBILITY:
This contract is between you and the Town of Chapel Hill. In no instance will the Town be responsible for pursuing collection of rent, or other charges from anyone other than you or a representative who has signed this Lease.
IN WITNESS WHEREOF the parties have executed this Lease, this the ______ day of
______________________, 19_____, at Chapel Hill, North Carolina
TOWN OF CHAPEL HILL
BY:______________________________ _________________________________
(Head of Household)
TITLE:___________________________ _________________________________
(Spouse)