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Date
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July 27, 2009
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Agenda
Item No. 27 Roll
Call No. 09-
Communication
No. 09-499 Submitted
by: Larry Hulse, Community Development Director |
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AGENDA
HEADING:
SYNOPSIS:
Recommend approval of the
resolution amending 2008 program allocations and adopting 2009 program
allocations for the HOME program. The resolution recommends allocation amounts
for types of housing programs funded with HOME dollars and administered by the
Community Development Department. The
process of adopting an “annual budget” for the expenditure of HOME funds was
approved by Roll Call 06-569 on March 20, 2006 when the Council approved
several processes and procedures for operation of the HOME program. The proposed adjustments to the 2008 HOME
allocations reflect changes that have occurred because several commitments made
for Low Income Housing Tax Credit Projects have not utilized funds. The 2009 allocations represent funding for programs
to meet housing needs in the community as identified in the HUD Consolidated
Plan.
FISCAL
IMPACT:
Amount: $1,186,387,987*1,186,987*
Funding Source: SP036 CDD49900 HOME Investment
Partnership (HOME) funds - Page 108 of 2009 Operating Budget
ADDITIONAL
INFORMATION:
The
City of Des Moines has received HOME funds administered through the U.S.
Department of Housing and Urban Development (HUD) since 1992 as a part of its
Entitlement funds. Expenditure of HOME
funds must be directly related to housing construction or housing renovation,
for those households or persons below 80% of median income. Annually, the Neighborhood Revitalization
Board (NRB) recommends to City Council on the use of HOME funds consistent with
the goals of the Consolidated Plan. HOME
funds must be committed via a written agreement with developers, owners,
contractors or Community Development Organizations within 24 months of their
receipt by the city.
By
Roll Call 08-881 on May 19, 2008, the City Council adopted the 2008 Home Budget
Allocations for expenditure of HOME funds to be committed by March 31,
2010. The 2008 amendments are
recommended by staff to reflect the changes in the secondary market for Low
Income Housing Tax Credit Projects and a need for funding to match an IDED
grant to the City/Greater Des Moines Habitat for Humanity for new construction.
At
its meeting on July 1, 2009 the NRB recommended the following amended budget
for 2008 and a new budget for 2009.
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HOME Adopted 2008 Program Allocation/Project Costs |
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HOME Adjusted 2008 Program Allocation/Project
Costs |
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Rental
(LIHTC) |
$500,000 |
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Rental
(LIHTC) |
$250,000 |
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Rental
Pilot Program |
$115,744 |
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Rental
Pilot Program |
$0 |
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Homebuyer
New Construction |
$54,000 |
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Homebuyer
New Construction |
$320,000 |
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Homebuyer
Acquisition/Rehab |
$0 |
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Homebuyer
Acquisition/Rehab |
$109,000 |
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Homebuyer
ADDI |
$9,256 |
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Homebuyer
ADDI |
$0 |
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CHDO
Homebuyer Projects |
$155,811 |
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CHDO
Homebuyer Projects |
$155,811 |
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CHDO
Operating |
$48,990 |
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CHDO
Operating |
$48,990 |
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TOTAL |
$883,801 |
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TOTAL |
$883,801 |
Rental - reflects the dollars reserved for
the Low Income Housing Tax Credit projects allocated by the Iowa Finance
Authority. Several projects discussed
last fall are no longer pursing LIHTC, have been rejected for LIHTC or are not
asking for HOME funds. There is one
project, MLK Brickstones, that has received an allocation of tax credits so
$250,000 funding is still reserved for this project.
Rental
Pilot
- There are no projects in the queue for the Rental Pilot Project so this money was reallocated for New Construction.
HOME
Buyer New Construction – This funding has been significantly
increased to provide funding match for Habitat for Humanity and other nonprofit
housing developers. Greater Des Moines
Habitat and the City of Des Moines have been awarded CDBG funds through the
Iowa Department of Economic Development for construction of replacement housing
for units lost in the flood. Habitat
intends to build 13 units this next year and will also utilize the HOME 2008
funds. The sites will be scattered but several
are in the King Irving and Mondamin Neighborhoods. Habitat has a pool of buyers so the soft
housing market is not a problem for their program.
Home Buyer
Acquisition/Rehabilitation - This allocation was increased to address foreclosed homes outside the areas of the
city covered by the Neighborhood Stabilization Program (NSP).
Home
Buyer ADDI
- The Down Payment Assistance utilized
funding from 2007 to meet this obligation and the 2008 funding has been
reallocated to Homebuyer Acquisition/Rehab.
The
CHDO Homebuyer is reserved for new
construction financing and subsidy for Community Housing Development
Corporation (CHDC) at 1351 Forest Avenue.
This will result in a CHDO proceeds project for CHDC.
CHDO
Operating
– City’s may provide operating assistance to CHDO’s of up to $50,000 or 5% of
the City’s HOME funds. The amount
provided must be less than ½ the agency’s operating budget. CHDC is the City’s only CHDO at this point
and received the operating budget for 2008.
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HOME Proposed 2009 Program Allocation |
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NCS
Administrative Costs |
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Sub-total |
$176,387 |
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Program
Costs |
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Rental
(LIHTC) |
$250,000 |
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Rental
Rehabilitation |
$360,000 |
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Homebuyer
New Construction |
$100,000 |
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Homebuyer
Acquisition/Rehab |
$100,000 |
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Homebuyer
ADDI |
NA |
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CHDO
Homebuyer Projects |
$150,000 |
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CHDO
Operating |
$50,000 |
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Sub-total |
$1,010,000 |
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TOTAL
2009 HOME Budget |
$1,186,387* |
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*The
above total includes $100,000 of program income divided among programs.
Administration
Costs - The HOME regulations allows for including 10% for
City administration and 5% CHDO administration. Of the allocation $176,387 is used by
City staff for administration and $50,000 is used by CHCD for
administration.
Rental LIHTC - (Either rehabilitation or new
construction): This includes funding for
one LIHTC project.
Rental
Rehabilitation – Staff has spoken with owners of several rental
projects concerning upcoming projects. Some
of these projects may have children under six and will also provide match for
the County’s Lead Base Paint grant. The City has “committed” to use HOME
funds for rental projects to provide match for Polk County’s Lead Based Paint
Grant. Staff intends for these dollars
to do double duty in these instances.
Home
Buyer New Construction will be used for the non-profits,
specifically for lots that have been obtained through the tax certificate
process.
Home
Buyer Acquisition/Rehabilitation was included to address
foreclosed homes outside the areas of the city covered by Neighborhood
Stabilization Program (NSP).
Down
payment Assistance HUD has no separate allocation of down
payment assistance this year. The City
can use regular HOME funds for down payment for non-profit new construction or
acquisition rehabilitation if the need arises.
The
CHDO Homebuyer is reserved for a
CHDO homebuyer project, such as building a new house. Staff and the NRB will continue to work with
the CHDC Board and staff on evaluation of the CHDC restructuring to determine at
what level they will continue to develop additional affordable housing. Staff
will also work with nonprofits to develop additional CHDO’s for Des Moines.
CHDO
Operating
– City’s may provide operating assistance to CHDO’s of up to $50,000 or 5% of
the City’s HOME funds. The amount
provided must be less than ½ the agencies operating budget. CHDC is the City’s only CHDO at this point
and it is recommended they receive the funding for 2009 to help with the
operating budget.
PREVIOUS
COUNCIL ACTION(S):
Date: May
19, 2008
Roll
Call Number: 08-881
Action: Amending 2007 Program allocations and adopting
2008 Program allocations for the Home Investments Partnerships Program
(HOME). (Council Communication No.
08-303) Moved by Vlassis to adopt. Motion Carried 7-0.
Date: June 18, 2007
Roll Call Number: 07-1170
Action: 2007 Allocations for the HOME Investments
Partnerships Program (HOME). (Council Communication No. 07-364) Moved
by Hensley to adopt. Motion Carried 6-1.
Date: March 20, 2006
Roll
Call Number: 06-569
Action: Adoption of new policies and procedures for
administration of the HOME Investment Partnership Act (HOME PROGRAM). (Council Communication No.
06-140) Moved by
Hensley to adopt. Motion Carried 7-0.
BOARD/COMMISSION
ACTION(S):
Date: July 1, 2009
Roll
Call Number: Neighborhood Revitalization Board
Action:
Recommend approval of amended HOME 2008 Budget allocations and the
proposed 2009 HOME Budget allocations
ANTICIPATED
ACTIONS AND FUTURE COMMITMENTS:
The City Council approves commitments of HOME for new
construction projects, CHDO Proceed developments, and any development using Low
Income Housing Tax Credits.
For more information on this and other agenda items,
please call the City Clerk’s Office at 515-283-4209 or visit the Clerk’s Office
on the second floor of City Hall, 400 Robert D. Ray Drive. Council agendas are available to the public
at the City Clerk’s Office on Thursday afternoon preceding Monday’s Council
meeting. Citizens can also request to receive meeting notices and agendas by
email by calling the Clerk’s Office or sending their request via email to
cityclerk@dmgov.org.