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HomeMy WebLinkAboutAffordable Housing Board - Minutes - 03/04/1999• CITY OF FORT COLLINS AFFORDABLE HOUSING BOARD Meeting Minutes March 4, 1999 Bob Browning, Chair Kay Rios, Vice Chair Ken Waido, Staff Liaison Chuck Wanner, City Council Liaison The meeting of the Affordable Housing Board was called to order by Chairman Bob Browning, beginning at 4:00 p.m., at 281 North College Avenue, Fort Collins, Colorado. A quorum was not present. Board members present included: Kay Rios, Mike Nicely, Stacy Overton, Micky Willis. Staff present: Ken Waido, Jackie Davis, Julie Smith, and Ann Watts. City Council Liaison present: Chuck Wanner. Ms. Rios stated that despite the absence of a quorum and voting abilities, corrections should be made to the minutes. Corrections noted: Mr. Browning to be shown as Chair rather than Vice Chair; reference to "Mr. Collins voted"; "Section 8 vouchers will be moving, perhaps to different cities" is not a correct statement by Mr. Collins; the portion reflecting Ms. Rios clarifying her comments should reflect that other Board members share the same concerns. Other corrections noted: "buy -ins" to be removed on the second line of the fourth page; "minimum" should be singular rather than plural; "does" replaced with "size"; "Concorde proposal" to be replaced with "document"; Mr. Collins' remarks to reflect that his first comments will be supplemented by subsequent comments. Funding Partners Update Presentation by Karen Gerard. Ms. Gerard distributed handouts to the attendees: an organizational fact sheet and a 1997 annual report. The 1998 report should be finished shortly. The organizational approach and direction has not changed, but the numbers have changed considerably since the 1997 report. The organizational fact sheet generally reflects those changes. The salient portions of Ms. Gerard's presentation: Funding Partners was incorporated in 1996, as a public -private partnership, from a collaborative effort by Fort Collins, Loveland, Larimer County, and CSU. The purpose of the group is to raise and leverage funds for regional affordable housing. Ms. Gerard began as the first and only staff person two years ago; since that time, a three -quarter -time assistant has been added for various duties and office management. Affordable Housing Board Meeting of March 4, 1999 Page 2 In 1997, Funding Partners received 501(c)(3) status; in May of 1998, it received certification as a Community Development Financial Institution. This certification enhances the ability of Funding Partners to receive funds, particularly in leveraging private capital through regulated financial institutions. Funding Partners is governed by a community board of directors. Fort Collins, Loveland, Larimer County, and CSU have appointed members to the board. Mr. Wanner was appointed by Fort Collins. To date, $1.8 million has been raised for affordable housing; a little over $2 million, when factoring in the amounts needed for operating expenses. Funding Partners has a five-year goal for self-sufficiency by using earned income for operating expenses. The organization does not compete for traditional sources of funding, such as CDBG and HOME, in order to keep from competing with existing affordable housing efforts. Funding Partners has provided 13 loans to affordable housing projects and helped to create 37 housing opportunities through home ownership aid and down payment assistance. The program primarily offers loans at very low market rates and through nontraditional means, currently focusing on short-term debt to build a reputation in the community and recycle the funds more quickly. Loan amounts have varied from $100,000 to $239,000; one project may involve $400,000. Funding Partners had begun its own down payments assistance loan, titled H2O. It was designed with program partners at First Bank and is a due -on - sale loan. It is an adjustable rate because the interest rate is tied to the property's appreciation. The program is designed to keep the purchasing power of the loan pool steady through escalating home prices. Funding Partners also provides technical assistance to a project to help the developer understand the grants and subsidies that can help make a project affordable, what affordability is comprised of, and how to comply with affordability requirements. The program will try to match profit and not -for -profit developers in order to allow each entity to borrow expertise from the other that will result in a successful project. Funding Partners has had success in the human service nonprofit area, catering to such groups as the disabled population, where Funding Partners has shown these services how to use program dollars to reconstruct projects to make them solvent and provide unit renovations. The program is trying to help nonprofits who are housing -related but not necessarily housing providers to expand their program capacity to in order to create and maintain affordable housing. Affordable Housing Boar* . Meeting of March 4, 1999 Page 3 Funding Partners has over $1 million devoted to down payment assistance. The first closing is scheduled for the next week, with a total production targeted for 150 loans. The loans are structured for up to five percent of purchase price. First Bank does the prequalification; once the down payment assistance is approved, the buyer is free to use the mortgage lender of their choice. Although the loan is due on sale, there are other things such as refinancing and equity loans that would trigger the loan repayment. Negotiations for the Northern Hotel are proceeding discreetly. The contract for acquisition is under attorney review. It should be signed the next day or Monday. The DDA has provided funding contingent on a signed contract. The City Council Finance Committee will review the request for City participation. Tax credit and historic society grant applications are moving forward. If all goes well, the hotel will have ownership transferred in August, and leasing efforts would occur around the first quarter of 2001. The units will be at 40 or less AMI, and there is considerable support for designating the units for senior. That designation will need to be supported by a market study. The confidentiality and sensitivity aspects of the contract are elevated; Ms. Gerard asked that the Board be discreet in its discussions. Funding Partners also has the capability of providing bridge loans to nonprofits for acquisition of existing units in order to help nonprofits through the length of grant and funding processes. At this point in the meeting, a quorum was achieved. Public Comment No public comment was offered. Approval of minutes Moved by Mr. Willis, seconded by Ms. Overton: To approve the minutes as amended. Motion passed unanimously. CDBG and HOME Mr. Waido presented the history and function of the CDBG and HOME grant programs. The program has to be certified as compliant in a number of ways. In terms of service to low income (below 80% AMI), the Fort Collins CDBG exceeds those requirements in that nearly 100% of funding goes to that segment of the population. HOME's requirement is 100% to low-income populations. CDBG has more flexibility in participating in economic development and public facility Affordable Housing Board Meeting of March 4, 1999 Page 4 improvements. Public service is funded as well as acquisition/construction. HOME regulations require a level of participation in CHODOs. Mr. Waido presented a comparison of the abilities of each program to participate: CDBG Acquisition Rehab - residential Down payment assistance Public service Energy conservation Public service Energy conservation Rehab - nonresidential Economic development Public facilities HOME Acquisition Rehab — residential Down payment assistance Site preparation, hard and soft costs Ten-day rental assistance In the ensuing discussion, it was noted that 65 percent of CDBG funds would be spent on housing. The CDBG process has been done through a competitive application process. The HOME funds were first allocated on first -come -first - serve; that process then became more closely associated with the CDBG process so that worthy projects would have a more united process to make application to. The two boards could blend for the purposes of determining funding for affordable housing. Discussion was held concerning a possibility of a 501(c)(3) designation or working under an umbrella IRS designated group. A review of the 501(c)(3) designation will be needed to determine who would be legally responsible for all requirements for City contracts. In working with Federal programs from different cities, it is difficult to get a set standard for affordable housing. The programs differ from city to city. Problems occur from different interpretations of different people in charge of the Federal programs and then relating their interpretations to the various cities. The Front Range is in rapid growth and new ways must be found to apply HOME funds and CDBG for affordable housing. Region 8, which includes Fort Collins, has won awards for successful CDBG programs, but is willing to learn new techniques to improve the programs. One problem: The County will not approve designation as an urban county so funds can be allotted. When County applies for funds, 10 percent must be received from the County's general fund. The Board would like to see funds come from all three sources, County, Loveland and Fort Collins. Review of County plan will be necessary to decide what is the best course of action. Affordable Housing Boar# • Meeting of March 4, 1999 Page 5 Public hearings for CDBG will begin in the last week of April. Four people from the Board will attend all meetings. Tenant first right of refusal and purchase rights were discussed by Deputy City Attorney Paul Eckman. One statute discusses rent control and another discusses conversion of an apartment to a condominium. The City may be preempted from action because the statute states there is a 90 day right of the tenant to remain in possession. In other words, instead of a 30-day eviction notice, the tenant gets 90 days. Depending on State legislature declaring a statewide concern governing municipality, there could be a 90-day period of time enforced. Perhaps the best scenario would be to put tenants on a month -to -month lease. However, if an apartment building is conforming to the State, the tenant has 90 days to vacate. In terms of a contract clause and possibly an impairment contract to impose first right of refusal: The City of Fort Collins can end up with an impaired contract as the other people have a right to curb a contract. There may be a need to draft an ordinance stating what the public purpose is with a possibility of circumventing contract law. It is far more complicated to determine the length of eviction for a tenant. This is a community municipality problem, so the community should solve it. The whole purpose is to be able to keep regulations simple for new housing to be built. Affordable Housing Board or the Housing Authority needs to develop a right of first refusal. New development needs to be encouraged. As the ordinance stands right now, an offer is made and the tenant has to match the offer. A new policy would give the tenant first opportunity to purchase home or condominium before any other offers are considered. Discussion ensued about taking the idea to Council and the viability of keeping people in affordable housing units. Unfortunately, Harmony Mobile Home Park is a lost cause at this point. There is no real legal recourse pertaining to right of first refusal. Harmony citizens were well organized and tried to get another lender to buy the park. However, they ran out of time and are now trying to appeal on the grounds of an illegal sale. Other options are being discussed and researched. John Fischbach will be presented with this idea and perhaps get some funding. The Board will try to draft guidelines and ask the County to make a statement or a commitment. This will be discussed again after the April 30th workstudy. Meeting adjourned at 6:00 P.M.