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Home My WebLink AboutHCDC 8.17.17Agenda Housing & Community Development Commission (HCDC) Thursday, August 17, 2017 at 6:30 P.M. Senior Center, Room 202 28 S. Linn Street, Iowa City Use the Washington Street entrance or 2nd floor skywalk via Tower Place parking garage 1. Call meeting to order 2. Approval of the June 15, 2017 minutes 3. Public comment of items not on the agenda 4. Nomination & Election of Officers 5. Consider a recommendation to City Council regarding unallocated local funds set-aside for Low Income Housing Tax Credit projects 6. Staff/commission announcements 7. Correspondence 8. Adjournment If you will need disability-related accommodations in order to participate in this program/event, please contact Kristopher Ackerson at kristopher-ackerson@iowa- city.org or 319-356-5247. Early requests are strongly encouraged to allow sufficient time to meet your access needs. MINUTES PRELIMINARY HOUSING AND COMMUNITY DEVELOPMENT COMMISSION JUNE 15, 2017 – 6:30 PM IOWA CITY PUBLIC LIBRARY, MEETING ROOM A MEMBERS PRESENT: Peter Byler, Syndy Conger, Christine Harms, Bob Lamkins, John McKinstry, Harry Olmstead, Dorothy Persson, Paula Vaughan MEMBERS ABSENT: None STAFF PRESENT: Kris Ackerson, Tracy Hightshoe OTHERS PRESENT: Barbara Baily, Mark Patton, Carla Phelps, Roger Goedken, Roger Lusala RECOMMENDATIONS TO CITY COUNCIL: By a vote of 8-0 the Commission recommends approval of the proposed FY17 Annual Action Plan Amendment #2. By a vote of 8-0 the Commission recommends the following allocations for FY18 HOME Investment Partnerships Program (HOME) Funding: Habitat for Humanity $35,000 Successful Living - Rehab $50,000 The Housing Fellowship – New Construction $100,000 Successful Living – Acquisition (increased from $36,000 to $51,000) $15,000 MYEP – Rental Acquisition $50,000 $250,000 By a vote of 8-0 the Commission recommends approval of the FY18 Annual Action Plan (see page 2): Housing and Community Development Commission June 15, 2017 Page 2 of 10 Projects Planned activities CDBG Award HOME Award Low-Mod Clientele Public Services/Facilities Aid to Agencies Shelter House $ 49,696 NA Aid to Agencies NCJC $ 43,434 NA Aid to Agencies DVIP $ 4,570 NA MYEP Facility $ 31,000 NA Little Creations Academy $ 73,000 NA Crisis Center Remodel $ 85,000 NA Neighborhood and Area Benefits Wetherby Park Improvements & other eligible improvements $ 75,000 NA Homeowner Housing Rehabilitation Comprehensive rehabilitation $ 235,000 $ 90,000 Other Housing Activities CHDO Operating NA $ 18,000 The Housing Fellowship Rental Rehabilitation $ - $ 86,000 Successful Living - Acquisition $ 36,000 $ 51,000 Habitat for Humanity – Acquisition/Rehab. $ - $ 35,000 THF Rental – New Construction $ - $ 100,000 MYEP Rental Acquisition $ - $ 50,000 Successful Living Rental Rehab $ - $ 50,000 Economic Development Economic Development Set-aside $ 50,000 NA CDBG and HOME Administration/Planning CDBG Administration $ 126,049 NA HOME Administration NA $ 46,635 Total $ 808,749 $ 526,635 By a vote of 8-0 the Commission recommends City Council approval of the draft Affordable Housing Land Bank Guidelines with the following language to replace the criteria that would disqualify a property from consideration: • More than an incidental portion of the site is in the 100-year floodplain. • The site cannot be serviced by utilities. • The site is not in the City's designated Growth Area. • There is environmental contamination on the site that prohibits residential development. • The site is not in compliance with the Affordable Housing Location Model. By a vote of 8-0 the Commission recommends City Council approval of the draft Citizen Participation Plan. A thirty day public comment period must be observed before Council consideration. Housing and Community Development Commission June 15, 2017 Page 3 of 10 CALL MEETING TO ORDER: Byler called the meeting to order at 6:30 PM. APPROVAL OF THE APRIL 20, 2017 MINUTES: Olmstead moved to approve the minutes of April 20, 2017 with edits. Conger seconded the motion. A vote was taken and the motion passed 8-0. PUBLIC COMMENT FOR TOPICS NOT ON THE AGENDA: None. ANNUAL ACTION PLAN ITEMS – AVAILABLE ONLINE AT www.icgov.org/actionplan: a) Recommendation to City Council regarding proposed FY2017 Annual Action Plan Amendment #2 Ackerson reminded the Commission that at the last meeting Maryann Dennis from the Housing Fellowship gave an update on their projects. Originally it was an acquisition of rental housing and she was requesting to convert those funds to a rehab and would be combined with the FY18 funds received. This request was put out for public comment in mid-May and will be considered by City Council next week on Tuesday. Olmstead moved to approve a recommendation to City Council regarding proposed FY2017 Annual Action Plan Amendment #2. Persson seconded the motion. A vote was taken and the motion passed 8-0. Byler commented that there is a need for rehab in Iowa City but is concerned if more rehab dollars are awarded that means less new housing is becoming available. Persson agreed and said it is important to look at what homeowners in the area think (if there are rental units in the area that are in disarray) and it will be a balancing act to assist with rehabs as well as adding to the inventory. Lamkins noted that it is less expensive to rehab than bring in new homes and agrees there needs to be more housing stock in the affordable range but also need to keep the current housing up to date. Ackerson noted that the houses they are requesting to rehab are not currently under affordability clauses and could sell the homes at any time. Ackerson noted that since the non-profits do not have to pay taxes that is a benefit to them. For profit housing providers have to pay property taxes on their units,even if considered affordable. b) Recommendation to City Council regarding applications for FY18 HOME Investment Partnerships Program (HOME) Funding Byler discussed the five applications. He began by looking at the medians for each application. The median Habitat award was $35,000 due to four Commissioners giving it $70,000 and four awarding $0. Rental construction for The Housing Fellowship the median was $97,000 and three Commissioners were around that number. Vaughn asked about The Housing Fellowship application and asked how 102 persons were served by that project, it is 28 units and 20 are affordable. Byler explained that they look at the number of beds and that figures to 3.6 beds per unit which probably seems a bit high. Lamkins noted he proposed an award of $120,000 because he misread the number of units or persons. Barbara Baily (The Housing Fellowship) noted it is figured from 1.5 persons per bedroom which is the HUD guideline. Byler noted that The Housing Fellowship serves families so there is realistically more than one person per bedroom where Successful Living serves individuals. Mark Patton (Habitat for Humanity) Stated that the application doesn’t ask for number of beds or Housing and Community Development Commission June 15, 2017 Page 4 of 10 bedroom count, just for the number per household. Persson suggested it needs to be consistent for all applicants to see the number of persons each project will serve whether it be by beds, bedroom count, or household. Ackerson stated that they typically count households. For SRO properties (tenants have their own bedroom but share bath and kitchen facilities) we count each tenant separately (each their own household). Byler said it would be beneficial to know how many people they can help. Then to be fair Habitat homes should count for 12 individuals if figuring 1.5 persons per bedroom. Byler stated the MYEP (Mayor’s Youth Empowerment Program) award was split by the Commissioners, half awarding $0 and half $75,000. The Successful Living rehab had a median of $50,000 which was also close to the average. Vaughn voiced a concern about the MYEP and Successful Living applications that they both receive funding from Medicaid and if that will be viable in the future. Carla Phelps (Successful Living) stated they currently have five houses and were awarded money for two additional houses this year. This application would take them to nine houses. They have looked at staffing for this increase and the type of housing they will be going to are rehabilitation homes which have a higher reimbursement from Medicaid which will increase the organization’s bottom line and allow for this growth. They are looking very closely at possible cuts to Medicaid and noted it will be cut over the course of time, not so much in the foreseeable future. They have begun seeking alternative sources of funding, which all non-profits are going to need in the future. Phelps stated they are secure with funding for at least the next three years and it is difficult to predict what will happen after that or what Washington will do. Roger Goedken (Successful Living) agreed and said they have done substantial financial modeling and predictions are ahead of the curve from what they were predicting even just six months ago. Phelps also noted that regarding the rehab homes they are placing in these home are people who just don’t function well even at their transitional level. Olmstead acknowledged that many providers right now are having difficulty being reimbursed from State Medicaid and asked if Successful Living has dealt with that as well. Phelps said they are anticipating it more than having seen it. The bigger concern is Medicaid cutting down the services they will allow. Phelps said they will be looking into the future and pursuing aggressively grant and fundraising opportunities. Byler asked what the timeline for these dollars are, if the FY18 dollars are approved. Hightshoe said the funds must be committed within two years. Phelps noted that if they cannot get new rental permits for six months, they can subsidize the rental income with Medicaid money. Hightshoe noted that was a concern because the pro forma has to show rental income cash flow and also there is a concern about increasing the number of homes by four in such a short period of time. They are doubling their properties. Do they have the staff capacity for such fast growth? If the homes are not viable or can’t comply with the HOME rules, the City must step in and ensure it is affordable rental until the compliance period expires. Byler noted they were awarded $36,000 for two separate homes each (down payments) earlier in the year and questioned why they are now asking for $100,000 for just one home purchase. Phelps said they would like to have a smaller debt service and it was recommended to ask for a larger amount to cover any contingencies needed for rehabilitation. Hightshoe stated they have a debt coverage ratio of 0.75 which means they are not collecting enough money to pay for their expenses. Their proforma shows they are not viable. Phelps agreed stating they don’t, they subsidize the units. Hightshoe stated that the City needs to see that the rents will cover expenses. It is a requirement of the underwriting analysis. If the project is not viable at the time we complete the underwriting analysis, the City can’t invest the HOME funds into the project. Persson asked if Staff was more comfortable then with the rehab request rather than the acquisition request from Successful Living. Ackerson noted that both of the debt coverage ratios are below the minimum. The City’s minimum is 1.2 and the acquisition is at 0.75 and the rehab is only 1.06 which means they are not collecting enough revenues to cover their expenses. Olmstead asked if Section 8 contributed to the funding. Phelps said they do receive a certain amount Housing and Community Development Commission June 15, 2017 Page 5 of 10 of Section 8 funding but it is not a whole lot. Hightshoe noted that for a four-bedroom household Section 8 typically gives the standard divided by four. Goedken said it is a double-edge sword because they want to keep the rents low because it is usually half or more of their tenant’s income however he understands that when applying for grants it is seen as not enough income. Byler suggests that since the Habitat for Humanity median and average are the same perhaps they can award one lot, $35,000 for Habitat. Lamkins stated that can’t be done, noting the minimum award must be $50,000. Patton agreed, noting they cannot buy a lot for $35,000. Hightshoe said it could be allowed, they aim for awards of $50,000 or more. Looking at the Successful Living rehab dollars, Byler noted the median and average are also almost the same, so perhaps they can award them $50,000. The Housing Fellowship also has a similar median and average, so that could be $100,000. Byler noted that the Successful Living rental acquisition (that they have discussed earlier) has a median and average that is far below what their award would need to be to be viable. There is $65,000 left and one thing the Commission could do is give MYEP $65,000 towards their $75,000 unit acquisition. Byler stated on a personal level he gave his full support to The Housing Fellowship project due to the number of people it would serve. Hightshoe clarified Staff’s opinion, they are not stating the Commission should not fund the Successful Living acquisition; it is just that they have serious concerns about their cash flow/long term viability and how quickly they are increasing properties. Additionally if they are asking for money to rehab units. They don’t have the cash flow to rehab existing units, but are also requesting more funds to purchase additional properties. McKinstry agreed, he feels for the mental health housing needs state-wide but also feels The Housing Fellowship project is really important. Persson also voiced concern about giving Successful Living more money for acquisitions and would rather give for rehab. She is not necessarily wed to her recommendations and is flexible except for her concern for the rental acquisition. Ackerson noted that it is important to remember if the Successful Living projects don’t cash flow/document long term viability the City cannot proceed with the project no matter how badly the beds are needed. Roger Lusala (Mayor’s Youth Empowerment Program) stated they received $50,000 in the last allocation of HOME fund from the City and they purchased a unit with those funds. Byler asked if they were to receive only $50,000 again would they still be able to move forward on the next allocation. Lusala stated they would, they always try to put more down to keep the debt low. Byler suggested changing the MYEP award to $50,000. That leaves $15,000 on the table to be allocated. He suggests to add the $15,000 to the $36,000 acquisition that was approved for Successful Living at the last round. Lamkins moved to recommend to City Council the following allocations for FY18 HOME Investment Partnerships Program (HOME) Funding: Habitat for Humanity $35,000 Successful Living - Rehab $50,000 The Housing Fellowship – New Construction $100,000 Successful Living – Acquisition (increased from $36,000 to $51,000) $15,000 MYEP – Rental Acquisition $50,000 Housing and Community Development Commission June 15, 2017 Page 6 of 10 $250,000 Vaughn seconded the motion. A vote was taken and the motion passed 8-0. c) Recommendation to City Council on approval of FY18 Annual Action Plan Ackerson showed the table that summarizes all the CBDG and HOME funding allocations, which becomes the Annual Action Plan. The left column shows all the projects, the activities are the second column. In January the Commission allocated funds for Aid to Agencies. Staff expected to have $100,000 available but funding was reduced by 0.61%. Ackerson also noted that the table differs from the one in the Commission’s handout because they just received the actual funding grant amounts so they were able to input final numbers and this final table will be the one sent to Council. Hightshoe stated the good news was the City did not get a cut; they received $1,000 less than expected in CDBG funds but $35,000 more in HOME. She noted they are down in HOME program income. Byler asked about the owner-occupied rehab, the $325,000. How many homeowners are served by that money. Hightshoe said it would serve about 25 low/moderate income homeowners. She noted that HOME projects are usually more expensive than CBDG because all the homes must meet all Code requirements prior to occupancy. Byler suggested perhaps they turn the program into a housing rehabilitation program (rental and owner-occupied), and make it a bigger program perhaps using $100,000 or so from HOME and then non-profits could apply for the rental housing. Hightshoe said that would have to be a recommendation to Council as it is a Council set-aside at this time. Byler sated it serves low income households either way, whether by ownership or by working with the non- profit partners for rentals. Hightshoe noted that the City did just apply to the Housing Trust Fund of Johnson County for $75,000 for rental rehab. Because there are so many regulations with Federal funded rehab programs as it relates to lead, the City applied to the Trust Fund of Johnson County for rehab. of rental or owner- occupied housing in low income neighborhoods. A family member must have asthma. The City will partner with the University of Iowa College of Nursing, Free Medical Clinic and ICCSD School Based Clinic to reduce asthma disparities in low income neighborhoods. Housing and Community Development Commission June 15, 2017 Page 7 of 10 Olmstead moved to recommend City Council approval of the FY18 Annual Action Plan: Projects Planned activities CDBG Award HOME Award Low-Mod Clientele Public Services/Facilities Aid to Agencies Shelter House $ 49,696 NA Aid to Agencies NCJC $ 43,434 NA Aid to Agencies DVIP $ 4,570 NA MYEP Facility $ 31,000 NA Little Creations Academy $ 73,000 NA Crisis Center Remodel $ 85,000 NA Neighborhood and Area Benefits Wetherby Park Improvements $ 75,000 NA Homeowner Housing Rehabilitation Comprehensive rehabilitation $ 235,000 $ 90,000 Other Housing Activities CHDO Operating NA $ 18,000 The Housing Fellowship Rental Rehab $ - $ 86,000 Successful Living SRO units $ 36,000 $ 51,000 Habitat for Humanity $ - $ 35,000 THF Rental Construction $ - $ 100,000 MYEP Rental Acquisition $ - $ 50,000 Successful Living Rental Rehab $ - $ 50,000 Economic Development Economic Development Set-aside $ 50,000 NA CDBG and HOME Administration/Planning CDBG Administration $ 126,049 NA HOME Administration NA $ 46,635 Total $ 808,749 $ 526,635 Lamkins seconded the motion. A vote was taken and the motion was passed 8-0. RECOMMENDATION TO CITY COUNCIL REGARDING AFFORDABLE HOUSING LAND BANK GUIDELINES: Byler noted that land banking was part of the Affordable Housing Action Plan and $150,000 was allocated for land banking. Staff has created general guidelines, included in the Commissioner’s packets. Byler’s general question regarding the document is if anything is binding or if it is all just suggestions. Hightshoe stated they are guidelines, but there are certain criteria that automatically will remove a property from consideration. Byler then asked about the yes/no questions and it seems as if neither answer would disqualify an applicant and Hightshoe confirmed he was correct. Lamkins asked about the disqualifiers, it cannot be easily serviced by utilities or not in the City's designated Growth Area, and it seems to make if very hard to find reasonable priced land. Ackerson Housing and Community Development Commission June 15, 2017 Page 8 of 10 stated the Growth Area is based on what can be sewered based on topography so beyond that it would be too expensive to build. Byler agreed with Lamkins and doesn’t want to make these guidelines too restrictive for fear of losing a great potential project. Some of the words could be construed in different ways. Whether the site cannot be “easily” serviced by utilities is a judgment call. The section on pre-development costs covers the utility questions. Additionally, stating “incidental portion” of the site within the 100-year floodplain. What is the definition of incidental? Hightshoe stated there is a HUD definition for incidental portion. There is an environmental review, basically none of the building can be in the floodplain. Persson said that at the time they were looking to build the Shelter House they looked at property and the building was not going to be in the floodplain but a parking lot would be and therefore the site was rejected. Hightshoe believes it means that the building and access to the building can’t be in the floodplain. People must be able to get out of the building safely during a flood event. Vaughn stated the Johnson County Affordable Housing Coalition looked at this and it wasn’t clear to them how the form would actually identify a purchase. Is there any weighing of the questions, or anything quantifying on the application. Hightshoe said Staff didn’t want there to be a points basis because it is so hard to acquire land for affordable housing. Persson questioned the validity of planned transit, noting that when she bought her property on the southwest edge of town they were told there would be transit within a couple years and it was more like 15 years before it happened. Hightshoe agreed that with land on the outskirts of town it is hard to know how soon transit will get to those locations. Byler suggested removing the first bullet from the disqualifiers and including that information regarding floodplains to question 6. Additionally the second bullet could be removed because question 5 discusses utilities, as well as the fourth bullet could be included in question 5 or question 7. Lamkins suggested leaving the fourth bullet but removing the wording “severely limits” and therefore if environmental contamination prohibits residential development then the property is disqualified. Persson doesn’t think it is in anyone’s benefit to approve anything that was in the 100-year floodplain. McKinstry likes the use of the incidental portion language, there are often situations where a backyard will flood but not the house or the access to the house and would hate to disqualify low income housing just because a back yard floods. Conger doesn’t feel the bullet points are unreasonable. Lamkins agrees with Conger, but the first priority has to be getting people a place to live and, yes, maybe deal with rare inconveniences of flooding but at least have options of where to live. Byler noted the bottom line is fear of disqualifying a project because of certain words that can be seen as different meanings from two different people. If the Commission wants to keep all five bullets, perhaps they can just be reworded to be more specific (removing “easily” or “severely limits,” etc.). The Commission discussed language changes and agreed to keep all five bullets but remove the language from “easily” from bullet two and “severely limits” from bullet four. Housing and Community Development Commission June 15, 2017 Page 9 of 10 Lamkins moved to recommend City Council approval of the draft Affordable Housing Land Bank Guidelines with the following language to replace the criteria that would disqualify a property from consideration: • More than an incidental portion of the site is in the 100-year floodplain. • The site cannot be serviced by utilities. • The site is not in the City's designated Growth Area. • There is environmental contamination on the site that prohibits residential development. • The site is not in compliance with the Affordable Housing Location Model. Persson seconded the motion. A vote was taken and the motion passed 8-0. RECOMMENDATION TO CITY COUNCIL REGARDING DRAFT CITIZEN PARTICIPATION PLAN AMENDMENT: Ackerson noted that the Citizen Participation Plan is the document that outlines how the City presents the decision making of federal funds to citizens. These are requirements by HUD and the Federal Government. This document was last updated in 2004 and the City is now required to update it to incorporate the Assessment of Fair Housing. Essentially it is a year-long process to research and get input from agencies in the community to find out what the critical needs are. That document is then used to craft the City’s Consolidated Plan (the five-year funding plan). In the process of updating the document to include the Assessment of Fair Housing, Staff also is making some housekeeping changes such as replacing the word “hearing” with “meeting” and replacing “citizen” with “resident”. Ackerson pointed to the footnote on page 2 of the document describing why the word citizen is still in the title of the document. He stated that because most people access City documents online, they are proposing to remove the language on page 11 that states they will send an updated copy of the document to the library. The main changes are how the City defines amendments to Action Plans. In the past Staff would present a lot of minor detail changes in the Annual Action Plan which would require a 30-day public comment period for activity level changes. The projects and activities in the FY18 Annual Action Plan will reduce the number of “Substantial Amendments” but retain activity oversight by the HCDC and City Council. Olmstead moved for approval with minor edits. Lamkins seconded the motion. A vote was taken and the motion passed 8-0. STAFF/COMMISSION COMMENT: Hightshoe provided a brief update on Invest Health activities underway, including survey results. CORRESPONDENCE: Ackerson noted the enclosed information regarding the Housing Iowa Conference. ADJOURNMENT: Lamkins moved to adjourn and Persson seconded. The motion was passed 8-0 and the meeting adjourned. Housing and Community Development Commission June 15, 2017 Page 10 of 10 Housing and Community Development Commission Attendance Record Key: X = Present O = Absent O/E = Absent/Excused --- = Vacant or prior commissioner Name Terms Exp. 8/18 9/15 10/20 11/17 12/15 1/19 2/9 2/16 3/7 4/20 6/15 Byler, Peter 7/1/17 X X X X X X O/E X X X X Conger, Syndy 7/1/18 X X O/E X X X O/E X X X X Harms, Christine 7/1/19 X X X X X X X X X X X Lamkins, Bob 7/1/19 O/E X O/E X O/E X O/E X X O/E X McKinstry, John 7/1/17 O/E O/E X X X X X X X O/E X Olmstead, Harry 7/1/18 X X O/E X X X X X X X X Persson, Dottie 7/1/17 X X X X X X X X X X X Seiple, Emily 7/1/18 X X X X X X X X X X -- Vaughan, Paula 7/1/19 X X O/E X X X X X X X X Date: August 10, 2017 To: Housing and Community Development Commission From: Community Development Staff Re: August 17 Meeting The following is a short description of the August agenda items. If you have any questions about the agenda, or if you are unable to attend the meeting, please contact Kris Ackerson at 356-5247 or Kristopher-Ackerson@Iowa-City.org. Nomination & Election of Officers Each year the commission nominates and elects a chair and vice chair. The commission will nominate and vote for these two positions at this meeting. Consider a recommendation to City Council regarding unallocated local funds set-aside for Low Income Housing Tax Credit projects The City’s FY2017 budget included $200,000 for a Low Income Housing Tax Credit (LIHTC) project, but at the end of the fiscal year on June 30th those funds had not been apportioned to a project. These funds will be rolled for tax credit applications this year, which you will review at your meeting in September. At your meeting on August 17, you will discuss a recommendation to the City Council regarding the use of those funds: allow the funds to rollover into FY18 for a LIHTC project, as planned, or rollover the funds into the land banking set-aside (see highlights below). FY17 Actual Remaining 50% HTF $500,000 $500,000 $0 25% Land Banking $250,000 $0 $250,000 20% Tax Credit $200,000 $0 $200,000 No tax credit applications received in FY17 5% Emergent Situation $50,000 $34,000 $16,000 If not used by end of FY, reserved for land banking $1,000,000 $466,000 FY18 Actual Remaining 50% HTF $325,000 $325,000 $0 Issue payment August 2017 25% Land Banking $162,500 $0 $162,500 20% Tax Credit $130,000 $0 $130,000 5% Emergent Situation $32,500 $0 $32,500 If not used by end of FY, reserved for land banking $650,000 $325,000 Cumulative Totals FY18 Budget FY18 Budget Available for land banking $428,500 $628,500 Available for tax credits $330,000 OR $130,000 Available for Emergent Situations $32,500 $32,500 Total $791,000 $791,000 Affordable Housing Line Item & Distribution