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HomeMy WebLinkAboutAffordable Housing Board - Minutes - 08/01/2013CITY OF FORT COLLINS AFFORDABLE HOUSING BOARD BOARD MEETING MINUTES 300 Laporte Ave Fort Collins, Colorado August 1, 2013 4:00–6:00p.m. Chair: Dan Byers Staff Liaison: Sue Beck-Ferkiss 970-221-6753 City Council Liaison: Lisa Poppaw Board Members present: Dan Byers, Tatiana Martin, Troy Jones, Terence Hoaglund, Jeffrey Johnson, Board Members absent: Curt Lyons Staff present: Sue Beck-Ferkiss, Social Sustainability Specialist; Dianne Tjalkens, minutes Council Members present: None Guests: Bill Reinke, Care Housing; Chadrick Martinez and Julie Brewen (FCHA) Meeting called to order without a quorum present at 4:11p.m. by Dan Byers. Tatiana arrived at 4:17 (quorum reached). Meeting officially called to order at 4:20. AGENDA REVIEW No comment. PUBLIC COMMENT No public comment. APPROVAL OF MINUTES Troy moved to approve the June 6, 2013 minutes, as amended. Tatiana seconded. The minutes of the meeting of June 6, 2013 were approved with modifications. 5-0-0 * Tatiana will email her changes to Dianne Tjalkens. ANNOUNCEMENTS None NEW BUSINESS AGENDA ITEM 1: UPDATE ON CARE HOUSING—BILL REINKE Bill provided a handout to the board. The organization is progressing well with stability. They are at full occupancy of over 300 units, with a waiting list of over 400 families. It currently takes 6 months to two years to get into an apartment or townhouse. This demonstrates a great need for affordable housing in our community. Care Housing is working to build another project in the Provincetowne area. They are resubmitting for low income housing tax credit. The plan is for 66 two to three bedroom units. The site plan is included in the packet. Phase one is constructed already and has been occupied for two years now. Construction and rental were both completed ahead of schedule. The new project will look similar to Provincetowne 1. Bill said that the unique aspect of the project is that it doesn’t look like affordable housing. It has been fully occupied for year and a half. The architects did nice job with interesting colors, lines, etc. He is proud of the look. He wanted to thank the City for the phase two application for low income tax credits. City awarded 250K in CDBG for infrastructure, etc. They will apply for HOME funds in fall cycle. He said that the City recognizes the great need, as the vacancy level is at crisis level. Care Housing has completed a rehabilitation of Greenbrier, both exterior and interior. Eagle Tree and Swallow is also under consideration for rehab, under 4% non-competitive, which doesn’t provide as much funding. They have reinvigorated their support services, with events geared toward families. They are having their annual picnic next Tuesday at Rolland Moore Park, starting at 5:30. AHB is invited to attend. Care Housing is networking with community organizations on issues related to affordable housing. They are also working with laypeople to see how churches can invest in affordable housing. They are starting a pilot program to get people with disabilities out of nursing homes and institutions when it’s not appropriate placement for them. They are also working with Housing Colorado to work on advocacy (see page 1 of handout). Bill mentioned that Care Housing has a small number of senior units, but most units are for families. The organization is proud of being able to keep rents low, at $411-750/month. There are currently 700 household members in their units. • Terence noted that Care Housing had many projects for a while, then not many for a stretch of time. Bill explained that it became more difficult to get tax credits. There has been more competition. If there were more tax credits they could do more projects. • Troy asked if Care Housing has looked at inventory in the Land Bank program for properties that are intended to later become affordable housing. Bill said that right now Care Housing is committed to the second phase of Provincetowne, so that is the focus now. Troy said that the City may want to look at the properties we have and consider selling some to get more strategic properties. Chadrick said that the big struggle is finding land that is developable. He has talked to people and found we are holding properties indefinitely. Many of the sites we have in Land Bank are in good locations. With urban growth boundaries it is tough to get good sites. The available sites have lots of issues that make them hard to develop. • Bill said we may want to advocate selling to non-profit developers. • Chadrick noted the general fund dollars that went into the Land Bank properties. The intention was to buy low and sell below market, but the market has gone down. • Troy said that when the City plans to acquire any more properties, agencies like Care Housing should help steer the City in the direction to get good land. • Sue said that one of the policies behind Land Bank is that the City can pick up properties that aren’t highly developable now, but may become so later. The City benefits from development that comes in around the property. Bill likes idea of working together to identify properties. Dan suggested that it is time for the City to look at these properties again to see what they are worth. • Dan asked when next round of 9% tax credit will be available. Bill said that they have already applied. And will find out August to September. Chadrick said the next CHFA competitive process will be late August to early September; they have received more applications than ever. Chadrick said they applied twice to get Redtail. Bill said if they don’t get it now, they will keep trying. • Dan asked about Housing Colorado. Bill said that they are a statewide non-profit advocacy organization that puts on a conference in Vail annually in which they show new housing developments, and have workshops around advocacy and education. Chadrick clarified that it’s a trade group for housing in Colorado. Investors and developers come to conference. They do advocacy and lobbying on behalf of organizations. • Dan asked whether Housing Colorado was involved with the Redtail project. Chadrick said not at this point. • Bill said that people from local government often attend the conference. Chadrick mentioned a few staff members who have been in the past. Sue said she and Beth may attend this year. If so, Tatiana would like to try to attend as well. Chadrick said that as a member he’d see if he can share the information posted online with the board. AGENDA ITEM 2: PRIVATE ACTIVITY BONDS FOR AFFORDABLE HOUSING—FCHA REQUEST FOR THE 2013 ALLOCATION Sue said that in the board packet is the FCHA request for 2013 Private Activity Bond (PAB) allocation. They are required to be paired with 4% financing. As this financing tool becomes more market viable, we will see more requests. Currently we are using a first come first served policy, but there is not a lot of competition. State entities and local jurisdictions can partner with other projects or assign their allocation to eligible organizations. FCHA can issue its own bonds, but do not get an automatic allocation from the state. There are several ways that people can access PAB capital: through local jurisdiction, directly from CHFA, or through the state pool. If local jurisdictions do not assign allocations, the funds go back to the state pool. It is important to show local support, so it is preferable that the allocation come from the local jurisdiction. Staff supports assigning it to FCHA for this rehabilitation project. The allocation is over 6 million. They expect to use 5.4 million for the Villages on Plum project. They want to carry over the remainder for future rehab of Cunningham Corner. These are not actual funds; this is the authority to issue bonds. These are tax free bonds, so it is a better deal for investors and they can only get that authority through the state process. Giving FCHA the assignment of the allocation gives them authority to raise revenue. • Dan asked what the repayment is on those bonds. Chadrick said the bonds go in during the construction period, so that the 4% non-competitive tax credits have to have a PAB. 50% of the deal has to be in PABs. Typically these are put in place during the construction period to fund the development. It will then convert to a conventional loan on the back end. Dan asked whether the loan would pay off the bonds. Chadrick said the bank loan would pay off the bonds. Colorado Housing Finance Authority (CHFA) requires they come to the City first. The bond market hasn’t been strong. Bonds have been released back to the state over the years. This one would attract some investors so it’s a good time to do this. If we don’t have an assignment by September 15th the bond allocation goes back to the state. In the case of the Villages on Cunningham corner, if there is anything left from 6.9 million it would roll over to another project. Dan asked about the bank loan. Chadrick said they are looking at FHA prime and conventional prime mortgages because they have longer terms and better interest rates. There are also mortgage insurance and principal payments. • Sue said that if the City assigns the bonds to FCHA and they don’t follow through with project, the bonds go back to the state. Chadrick said that if they encumber the whole pot, then they have three years to use it all. Sue said that it is best to use this funding source here, locally, rather than sending back to the state. Council has history of prioritizing affordable housing. Chadrick said that it is good to look at more tools than just CDBG and HOME. If it works, the City can recreate it again and again. The market conditions are favorable at this time. Sue said that since this method has not been used much to date, there is not much process in place. This year FCHA’s is the only request; there is no competition for it. Chadrick added that if there is competition in the future, the state will backfill to make a deal solid. • Dan asked if FCHA has done a debt service analyses. We are assuming that they are capable of repaying, but what happens if they default. Would the City be liable? Chadrick said it would be like a traditional real estate deal, where property would be posting its own assets. Dan asked what would happen if they are unable to get private financing to pay these off. Chadrick said they wouldn’t move forward without a whole package in place. Everything is already laid out, including letters of interest for debt and equity sides. • Sue said that if FCHA is authorized to use PAB for this project, it resets the clock for the affordability of units on the property and keeps them affordable for another 30-40 years. • Chadrick said there is a handout of the master plan for the site. The Housing Authority acquired the property, and did some rehab, but that didn’t go as far as it needed to. They want to put the property into a cycle where it can go 20 years before needing more rehab. The scope of the work is to fix structural deficiencies. The property needs a slanted roof, parking lots, interior enhancements, landscaping, pathways, exercise equipment, enhancement to the pool, and an addition of a community building. There will be on site laundry and exercise facilities to create communities. • Dan suggested making a recommendation to Council on this. • Troy asked if there are any other potential applicants. Sue answered no, and added that no other requests are anticipated this year. • Dan asked what happens to funds that are not awarded and go back into the state pool. Sue said that then anybody in the state can compete for them. She added that DOLA would like to see us use it locally. • Tatiana asked if there is anything bad to this. Sue said that staff recommends it. • Troy said he is not familiar enough with how bonds work to see how it will work. Chadrick said that they are packaging the whole deal, putting the value of the property back into the deal, refinancing the existing debt, and rehabbing the building to like-new. • Troy would like the “Readers Digest” version of how bonds work. Is there a tax benefit to people who invest in bonds? Sue said that the bonds are tax exempt, so the bonds have less costs involved. • Sue said that it is up to the issuer to find investors for the bonds. FCHA will be the issuer. Julie explained that national syndication pools are looking for tax credits. Troy asked if this meant investors who have high tax liability. Julie said yes. Chadrick said they are looking for one investor who would purchase the bonds, hold the debt, etc. • Julie mentioned that Section 4 of the Tax Code explains the 4% bond. Chadrick said that the project will have debt from a bank, have equity back into the deal, tax credits, etc. that will fund the total development cost. • Jeffrey asked what would be the loan to value now and afterward. Chadrick said they expect to have close to 3 million in equity if they can refinance with favorable terms. They will earn money on the development fee. Jeffrey asked if this goes to operations. Julie said that it goes to the next project. • Dan asked whether the board should send a memo to Council. He believes it is a great use of this tool that will go unused if we don’t do this. • Sue has submitted an Agenda Item Summary for the August 20th Council meeting. The AIS asks if the board has a recommendation. She will attach the minutes from this meeting. This will not negatively affect the City’s financial standing or credit rating. Recommendation: Troy moved to fully support as the AHB the request by FCHA to assign the City’s 2013 Private Activity Bond Allocation to FCHA for the purpose of rehabilitating affordable housing. Terence seconded. The AHB voted unanimously the motion to make the recommendation. 5-0-0 AGENDA ITEM 3: GENERAL INFORMATION ON ACCESSORY DWELLING UNITS Sue said we can get a speaker for this if the board wants more information. UPDATES CDBG: JAG PROPERTIES PURCHASE Sue said the board had approved a purchase for Jag Property’s 4-plex for people leaving the penal system. The project is looking good for moving forward, but they are a private entity so ineligible for CDBG funds. However, Jag was asked to resubmit the project in the fall cycle of the competitive process when HOME funds and Affordable Housing funds are available. They will have to resubmit, but the board likes the project. It will depend on what they are competing with at the time, but there is a good possibility of getting funded in the fall. 100K would have been allocated to them in the last cycle. That 100k goes back into CDBG funds for future allocations/projects. A separate meeting will be scheduled for after the packet becomes available. The packets are available through the Zoom Grants web site. At the September meeting the board will schedule the separate meeting. Sue will look into that for the fall process. REDTAIL PONDS, ROLE OF AHB AS ADVOCATES Sue mentioned that this project is a good example of where this board can engage in advocacy for affordable housing. The board wants to be seen as a force to promote affordable housing. This is an important project because the community doesn’t have this type of housing available. The community around the development is giving the Housing Authority a hard time. Julie said that last spring they convened two neighborhood meetings with the nearest neighbors to the project. There wasn’t much turnout, so they instead engaged neighbors individually. Around the same time the seller said he could get a covenant changed to make the property residential again. It was then that they found out that neighbors didn’t want it changed to residential. By fall they had worked with neighbors to get a 75% vote to change the covenant, but continued to hear nasty rumors. The neighbors were afraid their properties would be devalued by the project, but there is no evidence to support this claim. After discussing devaluation with realtors, it was determined that there would be approximately 250K diminution of value, total for all owners, to directly adjacent properties. The project then looked at another piece of property. They then asked the neighbors whether they preferred the original site or site B, which had no covenants. They found out then that the existing plans fit on site B. The neighbors want to keep site A commercially zoned. The City set a formal meeting. However, one business park owner mass-mailed a post card before the meeting. They had planned for 60 attendees and had 130 people show up. The advocates and staff vacated seats to let neighbors in. The facilitator of the neighborhood meeting didn’t have much experience with these types of meetings. The planner didn’t talk about zoning, and the facilitator didn’t set ground rules for meeting. It went very poorly. Advocates of the project were afraid to speak. The City is not required to have a second neighborhood meeting, but is planning on doing so August 12th with a very different format. Attendees will be asked to RSVP. Advocates and residents will be mixed with facilitators at each table. The plan is to ask participants for their expectations of the Housing Authority and the residents. The goal is to create a Good Neighbor Statement of Operations. This will be submitted around August 14. Projects with 50 units or more have to go to Planning and Zoning. Julie said that it is very important to go on record supporting the project for Planning and Zoning. Once you become a party of interest you can testify at the appeal. The selection process for the property will be that people have to apply and want to be involved. 20% of the units are just affordable units. Julie gave copies of the FAQs to the board. • Dan asked about the Good Neighbor Statement. Julie said that 90% of the ideas are things we already do. The comments with concerns that coming in are things they are already committed to doing. • Dan asked what she would like to see in terms of participation from this board. Julie wants attendance at the August 12th meeting. She would like the board to be a party of interest at Planning and Zoning. Sue said there is no conflict in this. Terence asked for clarification on whether board members have to advocate as individuals or as a whole board. Sue said that if the board choses to support the project, then members can show support as part of the board. • Chadrick said that P and Z will probably be in November. • Julie said that this is project is to provide a service enriched apartment complex for homeless people. We need to combat misinformation. • Troy said that it is important to be strategic about where we put affordable housing units for the lowest income people because they often cannot afford cars. Strategically from a city-wide standpoint, he thinks this is the most appropriate place, right next to the new transit center. • Julie said one appeal may be on height (it will be 4 stories). She is afraid the appellate will say the project is incompatible with the area despite being the zoning being appropriate. P and Z allows more height than we are putting in. • Troy said that the board needs to limit our input to things that are appropriate. Julie said that density and zoning are appropriate for this board. Troy suggested batting around some drafts via email and voting on it during the next meeting. Dan suggested putting this on the agenda for next month. He thinks we should get through some of the meetings and think more about the issues that come up. Julie says this gives us the opportunity to think about what kinds of things the board comments on. • Dan mentioned that four stories make it more affordable due to lower building costs. • Jeffrey would like to be apprised of the Work Session and materials that come out so we can focus our comments. • Julie suggested the board might want to advocate for these projects being shepherded through the system by seasoned planners and facilitators. • Terence said he thinks that the board can request a formal presentation on the development request before making an official recommendation. • Dan would like information on positives and issues/hurdles that may come up in development. • Sue asked the board to consider how they are going to look at NIMBY and work as an advocate for affordable housing. LAND BANK PROGRAM Sue presented the status report from 2010, and added that not much has changed since then. She updated the piece on parcels available. She said that the original idea was to hold the properties for 10 years. We have reached the 5 year mark. All properties have had disincentives for purchasing. Some of these may get cured by surrounding development. The report shows that the 2009 appraisal showed some appreciation on the properties, and the City is making money on renting these properties, with one exception. Properties with residences have been doing well with rent; however there has been one major septic problem on one property. The property has been annexed into the City and will have to get on the sewer system. Another property will need a new electric box due to the installation of a washer/dryer. The City currently has plenty of money to keep these active as rentals due to the rental income. • Dan asked if the City is renting these properties at market value. Sue gave the example of a large property with large house being rented for $1600/month. She said the rent is lower because it is “as is,” but that the City is being a responsive property manager. • Dan said that the City hasn’t sold any because there is still land available in the community. Chadrick has asked the City about these properties. He wonders if there is a demand. He can’t gauge that demand and he’s like to understand it better. • Sue asked the board to look at the tables in the handout with data from the GIS department, based on planning information. There has been a lot of development on small sites, but there are still 200 sites of that size available. We annex properties and have two more 100+ acre properties than we had in 2010. We have available parcels. Dan asked if the 0-1 acre lots are these single family lots. Sue answered yes. Terence said that residential development is not feasible on one acre property. Bill said that as a developer he would like to drill down more into the zoning of the properties because it’s difficult to find multi-family developments and low to medium density properties. • Troy asked what we do if we find a desirable property that the City would like to acquire. Sue said could use funds we have and go for general fund dollars to supplement. Dan said we are at the maximum number of properties that we want. Sue said that it could happen if the right property came along. There could be a mini-BFO request for the 2014 year that could be used for land bank acquisition. • Terence asked what happens to make the City want to develop a property. Sue answered that partnering with a non-profit would be one thing that would happen. Properties have appreciated enough that we could sell at discounted rate and still come out ahead. Seeing whether impediments to developing have changed from time it was purchased would also be an influential factor. Troy suggested that the City could sell and buy other land. • Sue mentioned that the appraisals from 2009 are not that helpful due to market changes, that if the City is seriously looking to sell then it will invest in new appraisals. • Terence asked about neighboring developments bringing in infrastructure. Sue said that she is most familiar with 2313 Kechter, where there has been a sewer back up, asbestos, etc. At that property big development is going in on all sides. She talked to Ken and he thought that when the City gave an adjacent development the right to move our driveway, they may have installed some sewer stumps that will make the property more developable in the end. • Terence thinks there should be some system to evaluate when it is the right time to sell. Sue said that it is in plan to look at them annually. • Jeffrey asked Sue to send out a copy of the ordinance that established the Land Bank program. He would like to see if there is any supplemental information from the time of enactment. • Jeffrey asked if we can sell at market and reinvest in other land bank properties. Dan said that the City will sell at no more than 90% of current market value. Jeffrey said that we can use this asset now. • Dan said that the City has held all properties for more than five years. It would be nice to know the values. He asked about Kechter. Sue said that it is one house on 16 acres. Dan suggested that appraisal value is marketable. • Dan talked about having a land bank property tour in November. He wants feedback from affordable housing developers on the properties we have. Sue said these are becoming developable, and that they are low hanging fruit. Bill added that there must be an intention to subsidize affordable housing if we plan to sell at no more than 90% market value. He said that the south side of town is growing dramatically and probably there is more need for affordable housing in that area. He suggested that the City change the zoning themselves to make easier for developers. • Jeffrey asked if the board has looked into land trusts or leases. He said land trust properties have been developed in Loveland. Dan said that we need to go to the ordinance to see if it’s restricted. He mentioned that we don’t necessarily have to sell the land to put it to good use. He said the City could retain the land and offer long term leases in which others would build the structures. The improvements would revert back to the City after the lease. • Dan would like to identify the zoning on these properties. Jeffrey agreed, but added that someone needs to interpret it and determine what might be the challenges of the properties. • Bill said there was a big hassle with CHFA about Provincetowne because it was too far from town. He had to convince them that it was not the farthest property on the south side of town. He mentioned this because he thinks annexed properties may get issues with CHFA. PROVINCETOWNE COVENANTS Sue said that staff has been directed to educate and enforce the master covenants at the Provincetowne condominium project. City staff will be sending a letter to all units and alternative addresses for owners, plus a separate letter to the Fort Collins Realtor Board. The envelope and letter are marked clearly that it’s an important notice. The letter asks owners to get ahold of Social Sustainability if the property is out of compliance. Also in the mailing will be a brochure, which is currently in draft form. Sue said that staff asked for separate resources for enforcement, but haven’t heard back yet. However, she has already been contacted by one tenant who has just signed a second year-long lease. The property is out of compliance. The tenant is an innocent bystander. We will try to help give them the rights they have under their leases. • Dan asked if we have remedies in place. Sue said that the covenant offers 15 days for compliance, but said this is not reasonable at this time. She will come back with a plan for enforcement. The covenant says we can force a sale, but that is not the best way to come into compliance. Dan asked for copies of all documents mailed to owners. • Tatiana would like to know what resources the City has reached out to. • Sue clarified that we asked for resources to hire a contract person for covenant enforcement. If that doesn’t come through, enforcement will be on staff. • Jeffrey asked if the City can publish a Q & A and the letter on the City’s website permanently. He also said there is an online commercial service for HOAs (associationonline.com) that has most association documents on the web already. He said the covenant might already be available online. Tatiana said there is a logon, so the site may not be available to the public. Jeffrey said that if a property owner is a member of an association, they may be able to search for documents on the website. Buyers, sellers and property management can go on this website. We may consider posting our info on that site. • Sue handed out copies of the letter and brochure that are going to owners. Northern Colorado Business Report had an article on this issue. One tenant read the article and contacted us. We will see more public contact and want to be in position to engage, find out who is in compliance and who isn’t, and come up with an enforcement strategy. • Tatiana asked if this only project in Fort Collins that has a master covenant. • Sue said that a deed restriction would have been better, but this was a pilot experimental project that has never been done again this way. The units are restricted for 25years from the original date which was around 2004. The letter is a courtesy reminder. • Tatiana asked for clarification about who it will go to. Sue said owners and management companies. Title companies, etc. will get another letter. She may tap into newsletters. • Troy thought that whenever a For Sale sign goes up there should be a red flag. Sue said that Beth is monitoring the MLS. • Tatiana has seen the restriction in listings and flyers. She has also seen properties specifying that they are not included in a master covenant. Sue said that owners are supposed to contact the City before listing a property. She gave an example of an owner who had trouble selling her property and took issue with the title company that failed to inform her of the master covenant at the time of purchase. She has since been able to sell the property. Dan asked how much lower she sold it for than her asking price. Sue said about 10K. Sue said there has been conflict about whether they were originally lower priced units. The units should have been sold at a lower cost for public good at the front end. She said that the cap was not written well; the units could sell for twice the market value and still be considered “affordable.” The issue is getting qualified buyers, and being very careful about getting the Memorandum of Agreement signed and filed so no one can complain again. • Tatiana said this could be problematic for her. She may have owners coming to her to file complaints about their realtors not telling them about the covenants. Sue said the realtors may not have known because the title paperwork wasn’t clear, or they may have informed the buyers, but the buyer didn’t hear it or remember. OTHER BUSINESS OPEN BOARD DISCUSSION None. LIAISON REPORTS Tatiana—Fort Collins Board of Realtors, through the CARHOF Grant, donated $7000 to HPI. FUTURE MEETING AGENDAS Next month: Competitive Process. Board will meet 1st Thursday, but will need second meeting in September to talk about actual proposals. Will set date at September meeting. Social Sustainability Gap Analysis Habitat for Humanity presentation Redtail Ponds development Building Inspector: update on changes to Building Code December: Land Bank tour – Meeting adjourned at 6:24pm by Chair Dan Byers. – The next meeting of the Affordable Housing Board is scheduled for: September 5, 2013 at 4:00 PM The meeting will be located at: Fort Collins City Hall Council Information Center 300 Laporte Ave