HomeMy WebLinkAboutAgenda Statement 1984/07/03 Item 4,4a COUNCIL AGENDA STATEMENT
Item 4,4a
Meeting Date 7/3/84
ITEM TITLE: Public Hearing: Consideration of program design and
description for HUD, Rental Rehabilitation Program
4. Resolution /9'42r9' Approving Rental Rehabilitation Program
description and related documents and authorizing submittal to
HUD
SUBMITTED BY: Community Development Director /5ths Vote: Yes No X )
0 REVIEWED BY: City Manage
The City has been notified that it has been allocated $61 ,800 by HUD under the
Section 17 Rental Rehabilitation Program of the recently enacted Housing and
Urban-Rural Recovery Act 1983. The program is aimed at improving substandard
rental units occupied by low income households, with emphasis on large
families. The Act gives localities much latitude to design their programs
with public input. A proposed program has been designed for public comment
and City Council consideration.
RECOMMENDATION: That the Council approve the resolution approving
description and documents for Rental Rehabilitation Program for FY 1984-85 and
authorizing submittal of documents to HUD.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable
DISCUSSION:
The newly created HUD Rental Rehabilitation Program provides grant monies to
selected jurisdictions to pursue certain general statutory housing assistance
goals, while leaving much program design to local discretion. The attached
report makes recommendations for program design and discusses in some detail
the reasons for those recommendations. In summary, those recommendations are
as follows:
1 . Use existing CHIP staff and staffing levels to administer program.
2. Consider program assistance requests on first-come/first-serve basis,
evaluating projects for satisfaction of the following goals:
a) Maximum correction of substandard units, especially those occupied by
very low income families (less than 50% of median income = $13,750) .
b) Predominance of assistance to large families in lower income
categories (less than 80% of median income = $22,000) , with a minimum
of 70% of all units assisted being two bedrooms or larger.
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Meeting Date i/.5/84
c) Maximum stimulation of private investment.
d) Minimization of displacement of tenants.
Selection of projects would be made by the CHIP Loan Committee.
3. Assist projects with 10-year, 0% interest deferred loans, fully forgiven
at full term. Such loans would be assumable.
4. Maximum subsidy would be $5000 per unit or 50% of the full rehabilitation
cost, whichever was less. Minimum subsidy would be $1000 per unit.
5. Program would be operated in existing CHIP target neighborhoods.
6. Request HUD blanket approval to rehabilitate projects with 70% lower
income tenancy, rather than 100%.
7. Approve Tenant Assistance Policy which would guarantee relocation
assistance to displaced lower income tenants.
8. Pursue Lender Services Agreement for program with Bank of America.
It remains unclear whether the Rental Rehabilitation Program, however designed
by the City, will be a viable, effective housing assistance program.
Questions remain unanswered regarding its salability to property owners, the
size of the pool of eligible projects, and the potential impact on rental
housing availability and affordability. But the initial year's proposed
activity and impact is not large (rehabilitation of approximately 12 to 24
units) and can be accommodated with existing staff levels, the funding award
from HUD is without repayment obligation, and the undertaking of the program
would demonstrate the City's commitment to pursuit of its adopted Housing
Assistance Plan goals. Therefore, it is recommended that we try the program
for one year. At the end of the year, the City Council can evaluate program
design and performance, with the options of continuing the program as
designed, amending the program design, or dropping the program.
If the City Council approves the recommendation, the necessary documents will
be submitted to HUD by the July 9 deadline. HUD will approve or deny the
submittal , tendering to the City an Annual Contributions Contract if the
program is approved. The City Council would then consider the Annual
Contributions Contract for execution, along with a possible amendment to the
bank rehabilitation lending services agreement and a Memorandum of
Understanding between the City and the Housing Authority regarding provision
of the Section 8 certificates to eligible tenants.
The appropriate documents for HUD submittal are attached to the resolution and
incorporated therein.
FISCAL IMPACT: No General Fund monies would be involved in the recommended
action. Program expenses would be provided by the HUD grant.
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