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HomeMy WebLinkAbout03-12-2015 Housing and Community Development CommissionI r 1 +. memo � CITY OF IOWA CITY AGENDA (Revised 3/10/2015) Housing and Community Development Commission Thursday, March 12, 2015 6:30 P.M. Iowa City Public Library 123 S. Linn Street Meeting Room A 1. Call meeting to order 2. Approval of the February 19, 2015 minutes 3. Public comment on any topic not on the agenda 4. Recommendation to City Council regarding applications for FY16 Community Development Block Grant (CDBG) and HOME Investment Partnerships Program (HOME) Funding 5. (Revised March 10, 2015) Recommendation to City Council regarding down payment assistance for properties on the 2200-block of Taylor Drive 6. Other business 7. Adjourn MINUTES PRELIMINARY HOUSING AND COMMUNITY DEVELOPMENT COMMISSION FEBRUARY 19, 2015 — 6:30 PM SENIOR CENTER, ASSEMBLY ROOM MEMBERS PRESENT: Peter Byler, Andrew Chappell, Michelle Bacon Curry, Jim Jacobson, Bob Lamkins, Dorothy Persson, Christine Ralston, Rachel Zimmermann Smith, Angel Taylor MEMBERS ABSENT: None STAFF PRESENT: KristopherAckerson, Marcia Bollinger, Tracy Hightshoe OTHERS PRESENT: Danielle Boffice, Kari Wilken, Tashundra Gathright, Richard Klausner, Al Persson, Brian Loring, Mark Patton, Roger Lusala, Casey Westhoff, RaQuishia Harrington, Bruce Teague, Kristie Doser CALL TO ORDER: Zimmermann Smith called the meeting to order at 6:30 PM. APPROVAL OF JANUARY 15, 2015 MINUTTES: Bacon Curry moved to approve the minutes of the January 15, 2015 meeting. Chappell seconded. A vote was taken and the motion carried 9-0. PUBLIC COMMENT OF ITEMS NOT ON THE AGENDA: Mark Patton stated for the Aid for Agencies meeting that was held last month, the agencies were not notified of the meeting until around 10:00 a.m. the day of the meeting. He requests that in the future such communications are sent at least a week in advance. Bollinger commented that there have been a lot of staff transitions over the past few months and acknowledged that staff will try to distribute notifications a week prior to meetings. Patton stated that no funding was awarded to the Furniture Project and they don't believe they will be able to continue with the project now. Zimmermann Smith stated just so Mark knows, as a commission, they were informed that the applicants did not have to be present at the meeting and that applicants were not to address the Commission at said meeting unless directly asked a question by commission members. STAFF/COMMISSION COMMENT Chappell stated that he was double booked this evening and at 7:00 would need to leave the meeting to attend the Planning & Zoning Commission meeting as a representative of the County, but will return as soon as possible. Hightshoe introduced a new HCDC member, Bob Lamkins, who was appointed last week. Lamkins also noted he had to leave at 7:20 for a prior engagement. Jacobson made an announcement regarding the panel discussion on affordable housing on Wednesday, March 11. The Johnson County Affordable Homes Coalition is hosting the event. Hightshoe announced that the City allocated $75,000 to start providing small business loans up to $5,000 to income eligible business owners. The City is starting to advertise that program. Ackerson will be emailing notification out to the community and non -profits. CONSIDERATION OF FY16 AID TO AGENCIES FUNDING: Zimmermann Smith announced that there was an agency that was overlooked at last month's meeting. Bollinger commented that the spreadsheet she prepared for the last meeting omitted Community Mental Health from the spreadsheet, but the information about the request was in the Commission's packet. It was a $10,000 request for support services and follow for patients with chronic mental health problems. Zimmermann Smith stated the Commission looked at all the requests $15,000 and over first, and did not fund any agency that requested less than $15,000 and therefore would not change her opinion on this application at this time. Hightshoe commented that at the time recommendations were made CITY STEPS had not been approved and that is why agencies were encouraged to apply for at least $15,000 — but it wasn't required. Persson stated she was questioned why the minimum threshold was set at $15,000. She felt there was not enough discussion on that. Hightshoe stated it was on the Applicant Guide, and City Council set that amount in CITY STEPS. Chappell said the time for discussion on that minimum threshold would have been before City Council adopted the plan. s. This Commission did review and recommend CITY STEPS with that language. Hightshoe stated that if the Commission wishes to keep the recommendation to Council that they made last month, then no action needs to be taken at this meeting. There was a consensus for no new action. DISCUSSION REGARDING APPLICATIONS FOR FY16 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) AND HOME INVESTMENT PARTNERSHIPS PROGRAM (HOME) FUNDING: Zimmermann Smith stated this meeting tonight was a question and answer session. Hightshoe explained that the question and answer session is an opportunity for the Commission to ask questions of all the agencies to get more clarification on the applications. Staff prepared a report on each application and if staff had questions they were listed in the report. The Commission recommendations are then due back to staff by March 2, 2015. The summary and rankings will be included in the packet for the March 12 meeting. Hightshoe noted that the funding amounts are what staff believes is available at this time; they have yet to confirm program income received as well as verify uncommitted funds. Therefore there may be allocation changes between now and March 12 due to updates. At this point there is $944,000 to allocate. Persson questioned if information was received from applicants that addressed the questions raised in the staff report. Hightshoe replied that the questions raised in the staff reports are for the Commission, not the applicants. If the members want to ask agencies these questions, this would be the time to do so. Zimmermann Smith stated the Commission will now begin to go through each application and questions from the Commission can be addressed to the applicant or the staff. CHARM Homes LLC, Affordable Rental Housing: Persson asked Staff for more information regarding the comment under the project budget discussion section that states the project may not meet the guidelines. Hightshoe replied that the services CHARM Homes provides does meet the needs of the community however staff has questions regarding their pro forma. Under "other income," the applicant listed $11,040. Staff needs clarification if this other revenue is allowed under HOME. Laundry and meals should not be listed under "other income," that is a separate funding category and not a HOME eligible expense. If Charms is receiving other funding for services such as laundry, housekeeping, etc. this does not go on the pro forma, but is a business expense under their Caring Hands business that provides such services. Teague explained that he sent an email to Ackerson and Hightshoe to clarify and explain exactly what the $11,040 amount included. It is related to the project and is part of the allowable costs. It is snow removal and lawn services. Hightshoe stated that HOME may require those specific costs for a SRO property to be built into the rent and cannot be charged as extra to the tenants. The applicant agreed to include those costs into the rents if required. Chappell asked if the last time CHARM received funding if they had trouble finding a site. The applicant confirmed they did have issues finding a site; there were very few 4-bedroom units in all of Johnson County available so that was the issue. Chappell asked if the climate was better now and the applicant replied that after speaking with a real estate agent they confirmed there is a good inventory of real estate available. Hightshoe explained since the units are limited to people with disabilities, the Affordable Housing Location Model does not apply. Jacobson asked about the payment terms for this loan. Hightshoe confirmed the terms would be repayment after 20 years if that is the proposal and what the Commission agrees to. However under HOME rules, once the final costs are determined, the loan needs to be underwritten again. If the applicant shows sufficient cash flow the City might ask for repayment. If there is not sufficient cash flow, they structure as part grant, part loan. It would be based on the final numbers and known costs. Byler asked what the discount factor is on the loan. Hightshoe explained our HOME underwriting criteria focuses on cash flow, not the loan itself. Staff reviews the 20 year pro forma of estimated revenues vs. expenses, including debt, to ensure the project has sufficient revenue to operate throughout the affordability period. The applicant should put money aside in reserves over the 20 year (compliance) period to provide safe and decent housing. DVIP Shelter — Communal Bathroom and Door Rehabilitation: Byler asked about the project being over $100,000 and whether they would then be required to use sealed bid procurement and Davis Bacon wages. Hightshoe confirmed that was true. Byler commented that this request would not have been over a $100,000 if not for a few items added. The request is for $116,000 but the actual work is only $99,000. Hightshoe noted that at $99,000 she would encourage the sealed bid procurement as it is likely that the bid may come over $100,000. Hightshoe also recommended the applicant hire an architect for design and construction management. Hightshoe stated that staff recommends that for any public facility project at or over $100,000 an architect is hired. Most non -profits do not manage construction projects frequently at this scale and are not familiar with federal requirements once the project goes over $100,000. Chappell asked if there were a possibility for more competitive bids on this project. Persson asked about one of the staff questions — whether the applicant has requested or acquired funds from any other private entities due to serving clients outside of Iowa City. The applicant replied that they had requested funds from all the counties they serve and work very hard to keep the funds from those counties to serve those from the counties that supplied the funds. So anything that is received from Johnson County stays in Johnson County. Persson asked more specifically about the facility in Iowa City and if the counties contributed to the cost of the facility in Iowa City. The applicant replied that the current model they are using from the State does not bring individuals from other counties as the State has allowed for funding for hotels and safe homes. She stated they could look at using some of the County funds to help offset facility costs, but with all the restructuring it hasn't been a big issue in the past few years. Chappell asked about the list of counties served in the application and if they contribute. Doser replied that they get funds in some way from all the counties. However, most of it is through fundraising and is not coming from governments. The fundraising is through United Ways, direct solicitations, and other local human services agencies. Persson asked staff if there was a concern regarding the ability of these applicants to pay property taxes. Hightshoe noted it was on the application, but that most non -profits in Iowa City do not pay property taxes. It is more relevant to housing providers, whether there are for -profit or non-profit providers. Persson asked if it should be of importance to the Commission when they are completing their score sheets. Zimmermann Smith stated it was important when perhaps looking at two projects side by side where one might pay property taxes and the other might not. Chappell asked about if there had been any specific fundraising to try to address the long-range capital plans. The applicant replied that the Board has considered this and are working to update their plans but are in the infancy of putting that together. They are however continuing each year to set aside funding (about $30,000/year) for repairs and up -keep. (6:50 p.m. Chappell left meeting) Iowa Valley Habitat for Humanity — Land Acquisition: Jacobson asked the applicant to speak about the applicant history where a previous CDBG/HOME approved project was not built according to affordable housing guidelines. Patton stated that the door was placed on the south side of the home rather than the north side, a mistake made by the construction manager. A second door is required in the design code, and it was in the approved design, but was then placed on the wrong side. Persson asked if the Commission were to not give the total amount requested, would they still be able to move forward with part of this project. The applicant replied that while it's been requested for them to try to find building sites in other parts of town, that would be a challenge if the full funding was not received. Bacon Curry noted that there was the question if funding was contingent upon lots outside of Census Tract 18 would Habitat proceed. Bacon Curry asked if HCDC could place this condition in their recommendation. Hightshoe confirmed the Commission could do so. The applicant noted that no matter where the home is built, the cost to own is less to the homeowner than rent would be. Persson also noted Habitat has a history of stabilizing neighborhoods through homeownership. Mayor's Youth Empowerment Program Home Project: Byler noted that in this pro forma, like the others, the expense ratio to the income is at 25% which for rental housing is very low and questioned how realistic that number is. Roger Lusala, for MYEP, stated that 25% is very realistic and they keep their costs low because of the people living there and the effort to keep the rents low. MYEP provides snow removal, lawn care and other expenses through fundraising efforts. Jacobson questioned that while the rents are low; the expenses to maintain the properties seem very low. Lusala stated that maintaining the properties is low due to having a facilities manager who is very knowledgeable on fixing things. Additionally they have friends in the construction fields that do repairs at cost or for free. Broadway Neighborhood Center Improvements, Phase II: Brian Loring, the executive director for the Neighborhood Centers introduced himself to the Commission. Bacon Curry noted this project started as the ground floor remodel and the expansion of the daycare facilities, and that those were about halfway finished when they become too expensive to complete. Loring confirmed that was true and there was a need to create more multi -purpose space in the basement and remodel the kitchen, which was completed. But the office space that was taken by the kitchen was not replaced, nor was the entrance to the daycare completed. They have been trying to achieve funding for the completion of this project since 2013. Hightshoe asked if they would continue to use the same architect to complete the project but Loring stated that all the design was complete so hiring an architect was not necessary. Jacobson asked what the expense was based on. Loring stated they have been through the bid process so the expenses are pretty set. Hightshoe noted that staff still recommends, and would add the cost to the grant, that a construction manager or architect oversee the project to keep it on time and budget. Persson asked if the Center's programming has increased. The applicant stated that the usage of the site is an after -school program and in the summertime they have programming in the space. Adult programs are also held in the space. Being unfinished the space can be challenging to use. Persson asked since they have completed phase 1, would phase 2 be completed in a timely manner? Loring confirmed that the lion's share of the work was done in phase 1, so phase 2 should be smooth. Byler asked Hightshoe about adding an architect to the project and what kind of cost that would add. Hightshoe answered that in the past this expense usually runs about 10-15% of the total cost. Due to previous problems with non -profits not completing the work on a timely fashion, poor material selection, Davis Bacon not being followed and/or failing to procure per federal requirements staff now recommends an architect familiar with federal funds. Most non -profits do not routinely manage large construction projects. If there are available funds, staff can administratively increase a project budget by 25%, up to $50,000, without going through an Annual Action Plan amendment. Loring stated that they had already paid for the architectural plans for this project, so they would not need to pay for a design again. (7:15 p.m. Chappell returned to meeting) Systems Unlimited Inc., 2016 Iowa City Housing Project: Casey Westhoff, director of Systems Unlimited introduced himself to the Commission. Jacobson questioned the expense ratio of 16% for the rental properties. Westhoff explained that they used their internal maintenance staff which helps keep costs down. The Housing Fellowship — CHDO Operation Funds: Affordable Rental Housing: Sabin Townhomes: Hightshoe clarified that THE applied for $15,000 or 5% of the HOME entitlement — whichever is greater. Based on the HOME entitlement amount they could go up to $16,000. Additionally there is a difference between CHDO set -aside and CHDO operations. Funding operations is not mandatory, but allocating enough funds for the CHDO set -aside is. THE is the only CHDO applying this year. Dick Klausner introduced himself as the president of the board of the Housing Fellowship. Byler asked if the Housing Fellowship wanted to prioritize their applications. Klausner stated that it would be difficult as there are only five or six CHDOs in the entire state and HUD compliance for CHDOs is extensive. One benefit of being a CHDO is that five percent of HOME funds can be awarded for operations and THE relies on this. Byler asked regarding the two Housing Fellowship development proposals, which one is prioritized. The applicant stated the seven unit request is a rehab. They were originally given money for land for the project but could not find affordable land appropriate for the project along with rehabilitating two homes they own that are deteriorating. The Fellowship is always looking to acquire property. Bacon Curry asked about the Davenport Street (UniverCity home) project. The City purchased this home to rehabilitate and sell for homeownership, not rental. Hightshoe explained that City staff approached the Housing Fellowship for two projects. One is the Sabin Condos. The developer's agreement requires the developer to sell three units to an affordable housing provider. The City was interested in affordable housing (not limited to certain tenants, such as elderly, disabled, etc.) so they approached THF. Staff also approached the THE about the UniverCity Home on Davenport Street because it only has on street parking and they are having trouble selling it to a homeowner. The City will continue to market, but due to its small size and on street parking, it may be more appropriate for a rental. THE does not typically rent to students, so it is likely a family would rent there. Bacon Curry asked about the Affordable Rental Housing application, and how many acquisitions did the application contain. The applicant stated it was five acquisitions and two rehabs. Bacon Curry feels that perhaps that should be separate applications. Klausner stated this was put in one application to ask for the $200,000 that the Housing Fellowship returned the previous year. The rehabs are each under $25,000. Chappell asked if the Davenport Street property was going to be rental anyway, it's preferred to be controlled by the Housing Fellowship. Hightshoe stated the home would continue to be marketed for homeownership, but if it doesn't sell by July, the City will evaluate their options, including renting or selling it for rental housing. Persson asked when the City gets involved in these properties isn't it to stabilize the Northside Neighborhood. Hightshoe said they are working to bring a balance between student and owner - occupied housing in University impacted neighborhoods. The Housing Fellowship doesn't typically rent to students; it's more likely to put a family in that unit. The City is not increasing the number of public housing units in Iowa City, so we would not be interested in owning or managing it indefinitely.. For the Sabin properties, the Housing Fellowship will acquire those from the developer, not the City. Jacobson asked if the City approached any other non -profits about purchasing the Davenport Street property or the Sabin Condos. Hightshoe stated no. Persson asked about the Davenport Street application, the application states the terms are 20- year balloon payment at 0% interest; annual payment of $5,000 with a balloon of $100,000 at the end of twenty years. Minimum compliance period is 10 years. So does that mean they don't need to be in compliance for 10 years? Klausner replied that 20 years is the standard, and what they normally request. (7:30 p.m. Lamkins left meeting) Hightshoe noted that the Commission could make a recommendation about the Davenport house. The Housing Fellowship can acquire properties as part of this project, just not that particular one. Chappell stated the application noted that the fair market rent for the Sabin Townhomes is not being charged. The applicant responded that it would be the rent that the HOME rules require. Chappell asked Hightshoe about the Sabin property, and why no other non-profit was approached. Hightshoe stated the goal is to have affordable housing and that is why the Housing Fellowship was approached. The City was not going to limit to a certain clientele, such as the elderly or disabled. THE rents to a variety of households, which some tenants could be elderly or disabled. ADJOURNMENT: Byler moved to adjourn. Bacon Curry seconded the motion. A vote was taken and motion carried 8-0. HOUSING AND COMMUNITY DEVELOPMENT COMMISSION ATTENDANCE RECORD 2014-2015 NAME TERM EXP. 3/6/14 4/17/14 6/19/14 9/18/14 11/20/14 1/15/15 2/19/15 3/12/15 BACON CURRY, MICHELLE 9/1/2016 X X X ---- O/E X X BYLER, PETER 9/1/2017 --- --- --- X X X X CHAPPELL, ANDREW 9/1/2015 X X X X O/E X X JACOBSON, JIM 9/1/2017 X X O/E X X X X LAMKINS, BOB 9/1/2016 --- --- --- --- --- --- X PERSSON, DOTTIE 9/1/2016 X X X X X X X RALSTON, CHRISTINE 9/1/2015 X X O/E X X O/E X TAYLOR, ANGEL 9/1/2017 --- --- --- X X O/E X ZIMMERMANN SMITH, RACHEL 9/1/2015 X X O/E X X X X Key: X = Present O = Absent O/E = Absent/Excused --- = Vacant � r -`= CITY OF IOWA CITY "TY�F'�wA"TV MEMORANDUM Date: March 11, 2015 To: Housing and Community Development Commission From: Kristopher Ackerson, Community Development Planner Re: Agenda item 4 — Recommendation to City Council regarding applications for FY16 Community Development Block Grant (CDBG) and HOME Investment Partnerships Program (HOME) Funding Thank you for the time and energy that you have put into the allocation process. Included in this packet are your preliminary rankings and allocations. At the upcoming meeting you will discuss the applications, funding amounts, and the rankings. As a reminder, $680,000 of the total $944,000 must be allocated to HOME eligible projects. All of the housing projects can be funded with both CDBG and HOME funds; however The Housing Fellowship - CHDO Operating project is only HOME eligible. Please review your scores and allocations. If you notice any errors, please contact me so I can make corrections before the meeting. The following tables were updated to include input from Michelle Bacon Curry. If you have any questions regarding this information, please feel free to contact me at 356-5247 or Kristopher-Ackerson@Iowa-City.org. Domestic irs;'rts Mayors Youth THF- Rental Violence THE-CHDO Habitatfor CHARM Employment Systems Acquisition& THE -Sabin Intervention Neighborhood Carr OFF 10WA an Operating Humanity Homes Program Unlimited Inc Rehab Townhomes Program Centers B Curry 100 57 54 54 54 56 47 64 59 Byer 64 75 83 76 78 65 79 57 55 Chappell 52 75 56 53 51 57 57 47 53 Jacobson - - - - - - - - - Lamkins - - - - - - - - - Persson 90 88 95 88 84 87 78 75 71 Ralston - 83 86 79 76 78 75 72.5 71.5 Taylor 74 79 77 83 83 77 68 89 75 ZSmith 50 78 72 63 63 62 65 60 55 Average 72 76 75 71 70 69 67 66 63 Housing Requested Avg HCDC Allocation Percent of Request Avg HCDC Score Lamkins Chappell Persson ZSmith Ralston Jacobson BCurry Taylor Byler THE-CHDO Operating $ 16,000 $ 13,089 82% 72 $ 15,000 $ 16,000 $ 16,000 $ 16,000 $ 16,000 $ 12,800 $ 16,000 $ 10,000 $ - Habitat for Humanity $ 60,000 $ 54,439 68% 76 $ 80,000 $ 80,000 $ 80,000 $ 45,954 $ 40,000 $ 64,000 $ - $ 60,000 $ 40,000 CHARM Homes $ 61,650 $ 56,965 92% 75 $ 61,650 $ 61,650 $ 37,604 $ 61,650 $ 61,650 $ 49,700 $ 61,650 $ 61,650 $ 55,485 Mayors Youth Employment Program $ 60,000 $ 48,000 80% 71 $ 60,000 $ 30,000 $ - $ 60,000 $ 60,000 $ 48,000 $ 60,000 $ 60,000 $ 54,000 Systems Unlimited Inc $ 250,000 $183,101 73% 70 $116,954 $125,000 $100,000 $250,000 $130,954 $200,000 $250,000 $250,000 $225,000 THF- Rental Acquisition & Rehab ' $ 200,000 $ 98,889 49% 69 $100,000 $100,000 $200,000 $ - $150,000 $160,000 $ - $100,000 $ 80,000 THF- Sabin Townhomes' $ 300,000 $276,667 92% 67 1300,000 $300,000 $300,000 $300,000 $275,000 $240,000 $300,000 $175,000 $300,000 Subtotal** $ 967,650 $731,150 $733,604 $712,650 $733,604 $733,604 $733,604 $774,500 $687,650 $716,650 $754,485 ' CHDO Eligible -set -aside minimum of $48,200 "$680,000 HOME minimum Public Facilities Domestic Violence Intervention Prog Neighborhoo $ 1 $ 116,256 94,140 $106,130 91% $ 88,690 94% 66 63 $116,256 $ 94,140 $ 60,000 $ 94,140 $116,256 $ 94,140 $116,256 $ 94,140 $116,256 $ 94,140 $ 93,000 $ 76,500 $116,256 $ 94,140 $116,256 $ 72,140 $104,630 $ 84,726 Subtotall $ 210,396 $194,019 1 $210,396 $154,140 $210,396 $210,396 $210,396 $169,500 $210,396 $188,396 $189,356 T0TAL: $1,178,046 $925,969 1 $944,000 $866,790 $944,000 $944,000 $944,000 $944,000 $898,046 $905,046 $943,841 � r -`= CITY OF IOWA CITY "TY�F'�wA"TV MEMORANDUM Date: March 11, 2015 To: Housing and Community Development Commission From: Kristopher Ackerson, Community Development Planner Re: Agenda item 5 — Recommendation to City Council regarding down payment assistance for properties on the 2200-block of Taylor Drive Introduction The following memorandum outlines a request for city funds totaling $100,000 by Iowa Valley Habitat for Humanity to be used for down payment assistance on the 2200-block of Taylor Drive. Background On Tuesday, March 10, 2015, the Iowa Valley Habitat for Humanity notified city staff that it had signed a 60-day purchase agreement for five rental duplexes (i.e. ten dwelling units) on the 2200-block of Taylor Drive. The properties are located approximately two blocks north of Wetherby Park. Habitat for Humanity plans to convert 2-bedroom rental units with unfinished basements into 4- bedroom homes. Once the rehabilitations are complete (starting in October 2015), Habitat proposes selling the homes to families who are first time homebuyers earning less than 80 percent of the area median income. At this time, Habitat is negotiating with three lenders for the purchase funds and has submitted an application for funding from the Housing Trust Fund of Johnson County to rehabilitate the homes. To ensure the affordability of the units, Habitat is asking for city funds totaling $100,000 ($10,000 per unit) to be used for down payment assistance. Discussion of Solution Since this project was not budgeted by the City for fiscal year 2016, the City could transfer the $100,000 currently budgeted for the UniverCity Program to this Habitat for Humanity project. Whereas the UniverCity program funds would convert two units from rental to owner -occupied, this proposed project would convert ten units. This project would enhance the City's efforts to stabilize the neighborhood. If approved, city funds would be only used for down payment assistance to the homeowner to purchase the completed property. Please be prepared to discuss this item and make a recommendation to City Council at our meeting on March 12. If you have any questions regarding this information, please feel free to contact me at 356-5247 or at Kristopher-Ackerson@Iowa-City.org.