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HomeMy WebLinkAboutAffordable Housing Board - Minutes - 03/06/1997..* JOINT MEETING CITY OF FORT COLLINS AFFORDABLE HOUSING BOARD CDBG COMMISSION Meeting Minutes March 6, 1997 Affordable Housing Board: Bob Browning, Chair Gina Janett, City Council Liaison CDBG Commission: Bill Steffes, Chair Bob McCluskey, City Council Liaison Staff Liaison: Ken Waldo The meeting was called to order at 6:00 p.m. Affordable Housing Board Members present: Chairman Bob Browning, Bruce Croissant, Joanne Greer, Susan Nabors, Mike Nicely, Stacy Overton, Terry Wahl. CDBG Board Members present: Chairman Bill Steffes, Bill Bertschy, David Gordon, Vi Guthrie, Bobbie Guye, Tim Ostic, and Joe Zimlich. Staff Present: Ken Waido, Mary Hile, Julie Smith. Mr. Waido stated that Dickson Robin and Jackie Davis were absent due to illness. The Authority and Commission members introduced themselves and gave backgrounds of their participation and interest in serving on the boards. Ken Waido explained the history and rationale behind the two boards' focus on affordable housing. He reviewed the guidelines for the Affordable Housing Board and the requirements and functions applicable to the CDBG. Mr. Waido discussed the agenda packets, which include an affordable housing annual report and a summary of the CDBG and HOME programs. The Federal definition of affordable housing was reviewed: Housing that can be occupied by a family earning 80 percent of area median income, paying no more than 30 percent of its income for housing. Joint Meeting Affordable Housing Board/CDBG Commission March 6,1"7 Page 2 Mr. Waido commented on the trend to provide housing for the 50-80 percent AMI bracket and noted prevailing comments on whether affordable housing production should be so tightly focused on that bracket. Points that are being discussed within the City include: Applications can be made for CDBG funds to build housing focusing on the 30-50 percent AMI; grants for such housing would take a bigger slice of the CDBG funding pie than other projects, providing less funding elsewhere. Discussion among Board and Commission members involved the following issues: • The amount of funding needed for a significant number of low-income housing units would exhaust the CDBG source quickly. • Some incentives currently offered, such as fee rebates, have very few strings attached. The Affordable Housing Board is looking at ways to ensure that Fort Collins citizens receive a benefit from the subsidy. • Housing cannot be economically provided to make a significant difference below 30 percent AMI. Projects do not cash -flow below that level. • Nonprofit projects can be viable in serving 30-50 percent AMI, with CARE being a primary example. CARE's average tenant AMI is 41 percent. • Governmental and private incentives are needed to provide housing at the lower end of the AMI spectrum. • National subsidies do not exist for the lower end of the spectrum. Projects such as Kaufman & Broad are targeted to the higher end of the affordable spectrum. • An example was given that a person working 40 hours a week at $6 an hour, for a family of four, would fall in the 25 percent AMI. • At the lower end of the spectrum, people have to be on vouchers or face no housing. • CARE provides housing at a percent of income rather than a flat -rate rent, to keep tenants from exceeding housing costs of 30 percent of income. • About $575,000 of subsidy money has been used for the Swallow project. If half of the CDBG grant were to be used for just that project, it would provide housing for only two to four percent of the waiting list. In response to questions, Mr. Waido noted that Staff lacks good information about the true housing need. Staff has used the Housing Authority waiting list as a barometer to gauge the need for affordable housing; however, it is not an accurate means of judging population and growth. The presence of college students tends to skew the results, both in housing need and income; a student's income may be low but the student still has disposable money provided by his parents. The results are also skewed by entities who cater to a certain AMI segment claiming a high need within that segment. Discussion was held on Housing Authority methods. The Housing Authority tends to serve the needs of the higher percentage (50-60) AMI population, although that population is already being served by private providers. Sometimes the rents set by the Housing 0 • Joint Meeting Affordable Housing Board/CDBG Commission March 6,1"7 Page 3 Authority exceed those in the private sector. Mr. Waido suggested that the Housing Authority be invited to the next joint meeting to discuss these issues. The waiting lists in the private sector projects have been growing shorter; at least, at those projects that share such information. This may be an indication that, at some level, affordable housing needs are being met. A housing/needs inventory is possible at the project level; however, it is impractical to track from the private residence side. Anecdotally, projects are complaining about the amount of affordable housing developments in progress. Mr. Steffes stated that CDBG is willing to listen to any ideas regarding to affordable housing. The criteria for CDBG goes beyond affordable housing into the arena of public service, which accounts for 15 percent of CDBG funding. In addition, CDBG gets requests for economic improvement issues besides affordable housing. City Council has asked CDBG over the last four years to consider affordable housing needs; as a result, funding has focused in that area. A question was asked if CDBG grants could be considered more than once a year, because the projects do not always coincide with application dates. CDBG funding follows Federal guidelines and dates. Council then approves or disapproves the projects awarded by CDBG. All grants must be finalized by October 1. HOME funds are available at any time. The decision was made not to put them in the same funding cycle as CDBG. HOME can be used to fill gaps for any money not granted by CDBG, or if the project cannot wait for the next Federal cycle to receive money to finish a project. CDBG has considered providing a second cycle for applications; however, notices are sent out early enough for applications to be practical for applicants. Many times, applicants are not able to complete their applications with 15 months of lead time. The Affordable Housing Board could perhaps play a role of funneling potential applicants to CDBG if they perceive an entity with a need for CDBG funding. Discussion was held on means of tracking subsidy moneys, awarded to help lower rents, that a developer takes out of the city. Other discussion was held on development strategies. The following issues were raised: • Defining the best use of dollars. • How developers use rebates, how much profit they earn through various strategies, and how whether the subsidy becomes necessary, given the amount of profit. • Whether the City suffers by the amount of money leaving the community. • Putting requirements on a lower average AMI level in projects to be built using CDBG funding. This was seen as impractical due to: developers needing numbers that will work rather than numbers that are mandated; the inability of a project to cash -flow at very low percent of AMI. Joint Meeting Affordable Housing Board/CDBG Commission March 6,1997 Page 4 • At 30 percent AMI and below, much of that population may be too volatile to work with effectively. • The below-50 percent of AMI needs to be targeted more effectively; the floor of effective AMI levels needs to be lowered below 30 percent. • The Housing Authority exists to provide for very low percent of AMI populations. • While tax credit approvals may be available at lower AMI levels, tax credit investors will not contribute. • A conundrum exists with private developers: How many units will $100,000 provide for, and would the developer proceed anyway without the $100,000? • Sometimes the decision of funding becomes a political decision with City Council holding sway. • The funding pie may sometimes be divided into too many pieces to provide effective housing moneys. • Welfare reform will have a huge impact on very low-income people and the housing they can obtain. • Subsidized housing cannot, by antidiscrimination laws, specify families only. The attendees discussed means of inventorying the community housing stock. The Affordable Housing Board has suggested for several years the hiring of a consultant to gather that data and help define the market needs and means of meeting those needs. Discussion was held on future problem areas. Potential areas of concern are families, the elderly, people reliant on Section 8 subsidies, and mobile home park residents. Mobile home parks locally appear to be volatile and may be slowly replaced by more profitable uses. In discussion regarding the fate of Pioneer, it was noted that 92 percent of those residents have remained in the city. Many other closings are possible in the near future. Mr. Steffes noted that another function of CDBG was economic development. Funds could theoretically be used to generate employment, education, and training opportunities in the city, thereby creating and providing employment. CDBG has not yet spent money in this endeavor. Any jobs created using CDBG funds would have to be provided to low-income people. The possibility of seeing applicants for this type of funding is not high. In response to questions, Staff noted that press releases are sent to the newspaper regarding the positive impacts of CDBG funding, without a great deal of publication success. The application process is completed at the end of March. Mr. Browning offered the aid of the Affordable Housing Board in helping to evaluate affordable housing applications. Mr. Waido noted that many past comments of the Board were taken into account in formulating the present application form. Applications are available on paper, on disk, and over the Internet. Attendees noted the differences in the CDBG process in Fort Collins from other cities; some other cities retain all funding to be expended by governmental authorities. The level of Federal funding has remained fairly consistent. 10 percent of the funding is allocated to administration, but the City spends more than 10 percent on CDBG-related issues. The HOME program is limited to 10 percent for administration. Joint Meeting Affordable Housing Board/CDBG Commission March 6,1997 Page 5 The attendees generally agreed on the concept of inviting the Housing Authority for a three-way meeting on affordable housing issues. The Authority is not funded or controlled by the City, except that the Council appoints the directors. CDBG Commission should be an attendee to such a meeting rather than invite the Authority; the Authority may well be an applicant, and the Commission must maintain its neutrality. The Affordable Housing Board will discuss the issue of incentives for housing directed at a lower percent of AN and attempt to form a recommendation for the CDBG Commission. Such direction would be applied for the 1998 application process. The meeting adjourned at 7:30 p.m.