HomeMy WebLinkAboutAgenda Statement 1984/12/11 Item 8 COUNCIL AGENDA STATEMENT
Item 8
Meeting Date 12/11/84
ITEM TITLE: Report: Application for Rental Rehabilitation Program funds
for FY 1985-86
a. Resolution // "Y Approving Rental Rehabilitation Program
description and related documents, authorizing submittal to
HUD, and appropriating FY 1984-85 program funds
SUBMITTED BY: Community Development Directdre /5ths Vote: Yes X No )
REVIEWED BY: City Managerl
The City is participating in the HUD Rental Rehabilitation Program for FY
1984-85, having been allocated $61 ,800. HUD has now accelerated the funding
cycle for FY 1985-86 and requires application for funds by December 17.
$59,000 has been allocated to the City.
RECOMMENDATION: That Council approve the resolution approving the Rental
Rehabilitation Program and documents for FY 1985-86, authorizing submittal to
HUD, and appropriating FY 1984-85 program funds.
BOARDS/COMMISSIONS RECOMMENDATION: Not applicable.
DISCUSSION:
The Rental Rehabilitation Program of the 1983 Housing and Urban-Rural Recovery
Act is designed to increase the supply of standard housing rental units
affordable to lower-income families. The program uses a dual approach: it
provides grants to localities for rehabilitation assistance to private
property owners of substandard multi-family units occupied by lower-income
families; and it provides rental subsidies through the local housing authority
to the low-income tenants of those rehabilitated units to assure housing
affordability. The provision of the rental subsidies to the units' tenants
avoids those frequent circumstances where debt service incurred by property
owners is passed on to the tenants in higher rents to the degree that the
tenants' rents are no longer affordable.
The Rental Rehabilitation Program's creation reflects the recent federal
emphasis on improving and preserving the nation's existing housing stock
rather than underwriting new housing construction. Rehabilitation is seen as
more cost effective and more socially appropriate than building new rental
units.
Page 2, Item 8
Meeting Date 12/11/84
The program also responds to the Federal trend towards local determination.
After establishing basic benefit and management requirements, the enabling Act
allows broad opportunities for local program design and flexibility.
Because Congress appropriated program funds for three years in 1984, and
because the grant amounts are relatively small , HUD is making FY 1985-86 funds
available at this early date. HUD had announced that intention during the
FY/1984-85 funding cycle, so a commitment schedule for both the 1984-85 and
1985-86 funds was included in the City's program design approved by the
Council on July 3.
Therefore, only minor changes are proposed in the attached program description
for FY 1985-86. The significant ones are as follows:
1 . Section IV, USE OF RENTAL REHABILITATION GRANTS FOR HOUSING FOR FAMILIES:
By recent action, HUD now requires that priority consideration be given to
rehabilitation of units with three or more bedrooms. Therefore, language
has been added to that section, which previously addressed only the issue
of 70% participation by units of two bedrooms or more, to establish a
priority specifically for three-bedroom units.
2. Section VI, SELECTION OF PROPOSALS: Again, language has been added
establishing three bedroom priority.
3. Section IX, SCHEDULE FOR COMMITTING RENTAL REHABILITATION GRANT AMOUNTS:
The schedule has been adjusted forward to accommodate the initial funding
delay.
Public comments regarding the program design have been solicited by newspaper
public notice, and any comments received will be conveyed verbally to the
Council.
The effectiveness of the program remains untested, given that HUD funding
approval for FY 1984-85 has just been granted to the City. However, since the
City's risk is minimal due to very minor program administrative costs and lack
of need for additional staff, participation in the program can still be
recommended as an opportunity for demonstration of good faith and as a
potential beneficial housing tool .
The resolution also appropriates the $61 ,800 for FY 1984-85 recently awarded
to the City.
FISCAL IMPACT: No general fund monies would be involved in the recommended
action. Program expenses would be provided by the HUD grant. The 1984-85
funds will be appropriated to Account No. 642-6420-RGO1 ( Rental Rehabilitation
1984-85) .
WPC 1009X