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HomeMy WebLinkAboutResolution - 2585 - Grant Application - HUD - 1986-87 Rental Rehabilitation Grant Program - 05_28_1987Resolution #225585 Agenda Item #23 May 28, 1987 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: SECTION 1. THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute and submit for the City of Lubbock a Federal Rental Rehabilitation Grant Program Application for the fiscal year 1986-87 and related documents, which application attached herewith, shall be spread upon the minutes of the Council and as spread upon the minutes of this Council shall constitute and be a part of this Resolution as if fully copied herein in detail. Passed by the City Council this 28th day of ,May , 1987. C ` . C. MCMINN, MAYOR ATTEST: Rane to Boyd,^City zgcretary APPROVED AS TO CONTENT: Sandy OCGLetrte, Community Development Administrator APPROVED AS TO FORM: Michele Hart, Assistan City Attorney Resolution #2585 OMB AD= No. 0348-0006 J I FEDERAL ASSISTANCE 1. TYPE OF ❑ NOTICE OF INTENT (OPTIONAL) SUBMISSION ❑ (Mark ap. PREAPPLICATION propriate ® APPLICATION bar) 2. APPLI- A. NUMBER 3. STATE a, NUMBER CANT'S APPLI- APPLI- CATION SA I-TX-1010201 CATION IDENTI- IDENTI- FIER b. DATENOMb. DATE FIER rw month day ED. ASSIGNED Year month day 19 BY STATE 19 I.eaoe Blank 4. LEGAL APPLICANT/RECIPIENT 5. EMPLOYEF3 IDENTIFICATION NUMBER (EIN) a. Applicant Name City of Lubbock 75- 000590-W b. Orgaruzacon Unit Community Deve 1 opmen-t Department 6 c. Street/P.O. Box P. 0. Box 2000 PRO- R M a. NUMBER l 1 I 41 * 12 ( 1 j il d.City Lubbock •.County . Lubbock 1. Slate Texas 9. ZIP Code. 79457 (From CFD.i) MULTIPLE ❑ IL Contact Person (Name Sandy. Og 1 et ree (806) 762-641 1 ext . 2290 b- TITLE Rents 1 d Telephone Na) RehabilitationGrant 7. TITLE OF APPLICANT'S PROJECT (Use section IV of Bus forth to provide a summary description of the 8. TYPE OF APPLICANT/RECIPIENT o fX l) A-ftbo :--1 CM vwr s demo+ ~z o�-s,cen H--C4mrm"'H tea, fir t-N Ed"bmw waftftn W 1986-E7 Rental Rehabilitation Grant Program 0111 tlon J­Ydien Me Dd'.anty K--Oitw rSpeeiJy): Ems„ F- Eater kner appropriate 9. AREA OF PROJECT IMPACT (Names ojdties, aotntie; stamL etc) 10. ESTIMATED NUMBER 11. TYPE OF ASSISTANCE 1 OF PERSONS BENEFITING 0w cnre EE-00ww City of Lubbock 173,449 "-� pfiaie 12. PROPOSED FUNDING 13. CONGRESSIONAL DISTRICTS OF: 14• TYPE OF APPLICATION A_rar C-navieim E--Aup-ftn a-R.nrwa 0 -swum^ Enter appropnauletter a.FEDERAL S 1 R OOO .00 a APPLICANT 19 t h b. PROJECT 19 t h b. APPLICANT 00 ," ftGE rFa ,F� ,ter 5-4)earmw DoMm oD--osamm oftwoum =noe E OM• ' Enter appro. 'er-A) EITI c. STATE .00 15. PROJECT START 16. PROJECT DATE Year month day DURATION 19 87 8 1 12 Aforrms 18. DATE DUE TO Year month day FEDERAL AGENCY ► 19 S7 6 1 d. LOCAL '00 e. OTHER '00 I. Total S 133,000 .00 19. FEDERAL AGENCY TO RECEIVE REQUEST Housing S Urban Development, F t . Wo r t h TX 761 13 20• EXISTING FEDERAL GRANT y IDENTIFICATION NUMBER a. ORGANIZATIONAL UNIT (IF APPROPRIATE) jb. ADMINISTRATIVE CONTACT (IF KNOWN) c. ADDRESS 121. REMARKS ADDED 22. To the best of my knowledge and belief, a. YES, THIS NOTICE OF INTENT/PREAPPLICATION/APPLICATION WAS MADE AVAILABtE,TO THE THE data in this preapplication/aMlicatlon EXECUTIVE ORDER 12372 PROCESS FOR REVIEW ON: < APPLICANT are true and correct the document has DATE LL CERTIFIES been duty authorized by the governing X THAT► body of the applicant and. the applicant will Comply with the attached assurances b. NO, PROGRAM IS NOT COVERED BY E.O. 12372 ❑ if the assistance is approved. OR PROGRAM HAS NOT BEEN SELECTED BY STATE FOR REVIEW ❑ 23. a. TYPED NAME AND TITLE b. SIGNATURE CERTIFYING REPRE- SENTATIVE B. C. McMinn, Mayor 24. APPLICA- Year month day 25. FEDERAL APPLICATION IDENTIFICATION NUMBER TION 126, RECEIVED 19 27. ACTION TAKEN 28. FUNDING ❑ a. AWARDED ❑ b. REJECTED 29, ACTION DATE► 19 a. FEDERAL S .00 31. CONTACT FOR ADDITIONAL 1-j ❑ C. RETURNED FOR b.APPLICANT AMENDMENT TION (Name and telephone mtm i ❑ d. RETURNED FOR c. STATE .00 W E.O. 12372 SUBMISSION d.LOCAL .00 BY APPLICANT TO STATE e. OTHER .00 ❑ e. DEFERRED f. TOTAL IS .00 ❑ f. WITHDRAWN I NSN 7540-01-008-8162 42: PREVIOUS EDITION IS NOT USABLE APPROVED -AS V1 CONTENT e GRANT Year month day STARTING Year month date DATE 19 NFORMA- 32. Year month date yer) ENDING DATE /9 33. REMARKS ADDED ❑ Yes ❑ No D FORM 424 PAGE 1 (Rev. 4-U) by OMB Circular A-102 ROVED AS `fn FORM t Resolution 42585 RENTAL REHABILITATION PROGRAM The City of Lubbock is applying for $183,000 from the Department of Housing and Urban Development for the Rental Rehabilitation Program. This program was authorized under Section 17 of the United States Housing Act of 1937 which was enacted into law in Section 301 of the Housing and Urban -Rural Recovery Act of 1983. The City of Lubbock is a direct grantee of the program as based on the funding formula as established by the regulations. The following is a description of the program as designed by the City of Lubbock. I. PROGRAM OVERVIEW The Rental Rehabilitation Grant Program will be utilized for the rehabilitation of real property to be used for primarily residential rental purposes. It is proposed that approximately 37 units will be assisted by this program. The objectives of the Rental Rehabilitation Program for the City of Lubbock are: - To increase the stock of standard rental units for low -to -moderate income tenants; - to involve private sector lenders to a significant degree in project financing; - to limit public subsidy to only the amount necessary to make a project feasible; - to avoid any rent controls and to have rehabilitated properties rent for market rents as defined by the public sector. The City of Lubbock will provide assistance to rental property owners to encourage the rehabilitation of'property that might otherwise not be economically feasible to repair. The Rental Rehabilitation program will be jointly conducted by the City of Lubbock's Community Development Department and the Lubbock Housing Authority. A Memorandum of Agreement which outlines the willingness of the Lubbock Housing Authority to administer the Section 8 Certificate Program in conjunction with the Rental Rehabilitation Program is attached. (Exhibit A) II. PROJECT FINANCING Projects will be financed through a combination of rental rehabilitation loan funds, private lender funds, and owner's El equity. The amount of City funds provided will be determined after a review of the project income/expense statement. The amount of rental rehabilitation subsidy shall not exceed 50% of the total cost of the rehabilitation and the amount of rental rehabilitation for any project shall not exceed an average of $5,000 per unit. The minimum public subsidy shall not be less than an average of $1,000 per unit per project. The loan amount from the private lender will be determined by the lender using its own underwriting criteria. The City's loan will be structured as a no -interest deferred loan which is forgivable at the end of ten years. If the property owner does not comply with the guidelines of the program, the loan becomes immediately due and payable. The following conditions must be met to be in full compliance of the program: a) The property must be maintained as a residential property, which is leased or rented to members of the public for residential purposes. b) The property must be maintained in a safe and sanitary condition and in compliance with all City of Lubbock Building, Plumbing, Electrical and Mechanical Codes. c) The property may not be converted to condominium ownership or any form of cooperative ownership. If each of these conditions is complied with for a period of ten years, then the public subsidy loan will be forgiven. A mechanics lien will be filed on each accepted project, and the conditions of the Rental Rehabilitation Program will be reviewed annually for compliance. III. ELIGIBLE REPAIRS The rental rehabilitation loan may be used for repairs necessary to meet the; a) basic health, safety, and fire standards contained in the City of Lubbock's Building, Plumbing, Electrical, and Mechanical Codes, b) the Section 8 Housing Quality Standards, and c) the cost effective energy requirements. A limited amount of non -code but essential repairs, as defined in the regulations 570.10 (g)(i)(ii), will be allowed in rehabilitating the structure. The cost of non -code repair will not exceed 10% of the total cost per unit of a project. 2 IV. NEIGHBORHOOD SELECTION, NEIGHBORHOOD PRESERVATION AND LOWER INCOME BENEFIT The City of Lubbock's Planning Department recently updated the Neighborhood Statistics Data for the City. This information will assist in the neighborhood selection process. The Neighborhood Statistics Program compiled information on the income, racial, and housing characteristics of the neighborhoods. The target neighborhoods for the 1986-87 rental rehabilitation program have been updated to reflect the current neighborhood conditions. The revised area is limited to neighborhoods where the neighborhood decline is calculated to meet the low income requirements. The revised target area includes eight additional tracts which now fall below the 80% of median guidelines. Only projects which are located within the target area will be assisted in the rental rehabilitation program. The City anticipates the impact of this program on neighborhood preservation to be positive. During the preparation of the City's Housing Assistance Plan, the lack of available decent, safe, and sanitary units in the rental market became acutely apparent. This program will assist the City in its goal of stabilizing neighborhoods and in increasing the number of available rental units. Other factors which will be considered during the neighborhood evaluation are: median income, median rent levels, the historical trend of the area, current and projected land use, and current housing stock conditions. With each of these considerations, a rapid increase in the rent levels in the selected neighborhoods is not anticipated. A market analysis of targeted neighborhood will be conducted which assesses the current rent structure and vacancy rates in preliminarily selected neighborhoods. The neighborhood rental rates will be compared to Section 8 Fair Market Rents. The City is requesting a 70% lower benefit guideline. This guideline will minimize displacement of existing tenants in projects to be rehabilitated and will provide a reasonable margin of error during project or neighborhood selection. To further insure the City's compliance with the lower income benefit guideline, the City's project selection criteria will favor properties that are occupied by Section 8 eligible tenants or properties which are vacant at the time of applicant submission. The City of Lubbock will require that the project applicant provide information pertinent to the determination of Section 8 eligibility for existing tenants. This information will be 11 3 required upon application to the Rental Rehabilitation program. This information will be utilized during the evaluative process and to assist the City in compliance with the lower income benefit guidelines. This information will also be utilized in assessing the tenant for inclusion in the Section 8 Certificate Program and in calculating potential relocation benefits. Potential tenants for the available or vacant rehabilitated units will be selected from the City of Lubbock's Section 8 waiting list. By definition, tenants selected from this list who are eligible for Section 8 assistance will be lower income. Additionally, the City of Lubbock's project selection criteria will place a higher priority on properties occupied by very low income persons. The very low income guidelines is 50% of the City's median income or below. V. LARGE FAMILY AND VERY LOW INCOME EMPHASIS The Rental Rehabilitation Program is placing a major emphasis on the rehabilitation of units with two or more bedrooms. These larger units are to be occupied by large families. The City of Lubbock will encourage the rehabilitation of large family units by allocating only 30% of the Rental Rehabilitation Grant funds for one bedroom units. The City of Lubbock's project selection criteria will place a higher priority on properties occupied by very low income persons and those properties which have three or more bedrooms. VI. SELECTION OF PROJECTS Each project will be reviewed according to criteria which includes the following: a) The project is consistent with the objectives of the Rental Rehabilitation Program. . b) The private funds and owner's equity are sufficient to complete the financing of the project. c) The location of the project is consistent with the.low and very low income guidelines and is in a targeted neighborhood. d) The condition of the property is substandard, and it can be rehabilitated to meet local codes with the available financing, both public and private. e) The level of displacement is minimal. 4 f) The project contains the targeted number of one and two bedroom, or larger units. The cash -flow analysis for each project will be completed to determine the financial feasibility of the project and to minimize the level of public subsidy required for each project. This is also essential in evaluating the rent reasonableness after rehabilitation of the unit. The City of Lubbock's agreement with the selected property owners will formalize the owner's agreement to comply with the program guidelines. If the property is not maintained as originally proposed, the City has the option of calling the lien due in full. VII. IMPLEMENTATION SCHEDULE FOR RENTAL REHABILITATION PROGRAM Immediately following the grant agreement for the Rental Rehabilitation Program, the City anticipates the following schedule for the dispersement of the available funds. Quarter % of Fund Committed 1 0% 2 50% 3 75% 4 100% VIII. OTHER PROGRAM REOUIREMENTS IX. The City of Lubbock will require all program participants to comply with all applicable nondiscrimination, affirmative marketing and equal opportunity requirements as required by the statute. These requirements will be formalized in the agreement between the property owner and the City of Lubbock. CONTACT PERSON The local contact person is Sandy Ogletree, Community Development Administrator, City of Lubbock, P. O. Box 2000, Lubbock, Texas 79457. The telephone number is (806) 762-6411, extension 2290. The local contact person for the Lubbock Housing Authority is D.C. Fair, Executive Director, Lubbock Housing Authority, P. O. Box 2568, Lubbock, Texas. The telephone number is 762-1191. 5 CERTIFICATIONS FOR THE RENTAL REHABILITATION BLOCK GRANT PROGRAM The City of Lubbock certifies that: 1. The submission of the program description is authorized under State and local law (as applicable), and the grantee possesses the legal authority to carry out the rental rehabilitation program described therein, in accordance with this part; 2. Its rental rehabilitation program was developed.after consultation with the public and its description of program activities referred to in paragraph (b) (1) of this section has been made available to the public; 3. If applicable, its lower income benefit standards should be reduced to 70 percent, as provided by 5511.10 (2) (2): this certification will be accompanied by an explanation of the reason why the reduced benefit standard is necessary, as provided in §511.10 (a) (2); 4. A written tenant assistance policy conforming to the requirements of 5511.10 (h) (92) has been adopted; 5. It will conduct and administer its rental rehabilitation program, and, if applicable, ensure that State recipients conduct and administer their rental rehabilitation programs, in conformity with the requirement of 5511.10 (m); 6. It will conduct and administer its rental rehabilitation program and, if applicable, ensure that State recipients conduct and administer their rental rehabilitation programs in accordance with the requirements of this part. A f i m I_ I AIRPORT u. GLUEFIELO •l KENTIN ...... URBULINE .. ... ... .. ... . :...... .... ERSKINE •• ••• •••• :•• �l•ti ... ...... Jam. .�..� ..J o ..... .., ... ..... .. ........ •18 TH ...... ....... ... :.� ..... :: 34 TH ... :a •....' :m ::W:Oi::::::......::: ............. So TH "N, ..... Be TH .......... ::... L C O P %+�:..:. ... 82 NO "'•••' :... .... r CITY LIMITS_— 88 Thl I 114 TH ! PLANNING FM 11685 OEPT. 7888 la 01 0 W z Q 7 LL Ol Q G R 0 0 3 Z d > 7 J Q IL 7 RENTAL REHABILITATION TARGET AREAS AFFIRMATIVE MARKETING POLICY CITY OF LUBBOCK Rental Rehabilitation Program Affirmative Marketing Policy In receiving financial assistance under the Rental Rehabilitation Program, owners must agree to participate in an affirmative marketing plan. Affirmative marketing has two primary objectives. 1. Potential tenants from all racial, ethnic groups are informed about available vacant rehabilitated units. 2. In particular, persons who are not likely to apply for this housing without special outreach, are informed about the rehabilitated units. The affirmative marketing plan is designed to promote the concept of fair housing and to help eliminate any discrimination in housing because of race, age, sex, or handicap. I. Requirements for compliance with affirmative marketing. a. All vacant units must be advertised in the Lubbock Avalanche Journal and carry the Equal Housing Opportunity Logo. b. Any yard signs used to attract tenants should exhibit Equal Housing Opportunity Logo. C. Owners are encouraged to advertise units in other publications such as the Thrifty Nickel, which is free to the public and available at grocery and convenience stores. II. Procedures to inform, and solicit applications from, persons in housing market area who are not likely to apply. a. Vacancies will be reported to the City's Housing Office to be posted and made available to the public. b. Owners are encouraged to list their vacancies with the rental directory agencies frequently used by low to moderate income families. C. Owners should submit copies of published advertisements to be reviewed for compliance with the Affirmative Marketing Plan. 9 III. Assessment of owner's efforts in affirmative marketing and Corrective actions for failure to participate. a. Initial leasing of all units will be monitored to assure that at least 70% of all units are initially occupied by low to moderate income families and that affirmative marketing was used. In those units leased to unassisted tenants, the Rental Application Forms will be reviewed to determine the effectiveness of advertisements and outreach attempts. b. Each owner's affirmative marketing attempts will be assessed. If a blatant disregard of the policies has been demonstrated, the Community Development Department will refer the matter to the City Attorney to be considered as a possible violation of the Fair Housing Ordinance. As a last resort, after counseling and continued lack of compliance, an owner may be required to repay upon demand the rental rehabilitation assistance received from the•City. .01 6 ��• =r ' = : C 1 TY O t= l- t,Jta 8 762-6411 P. 0. Box 2000 LUBBOCK. TEXAS 79457 December 13, 1984 Mr. I. L. Sanchez — Davis Acting Regional Administrator Department of Housing and Urban Development Fort Worth Regional Office 221 West Lancaster Avenue P.O. Box 2905 Fort Worth, Texas 76113 Dear Mr. Sanchez — Davis: This letter serves as a statement of cooperation between the City of Lubbock and the Lubbock Housing Authority (LHA) in the Rental Rehabilitation Block Grant Programs. This statement is submitted as a part of the City of Lubbock's application to the Rental Rehabilitation Program as required by Section 511.20 (13) (i) of the program guidelines. The City and the Housing Authority have a central goal of preserving the City's existing housing stock and providing decent, safe, and sanitary housing for low and moderate income residents. With this goal in mind, the Lubbock Housing Authority will cooperate with the City in the implementation of the Rental Rehabilitation Program. The Lubbock Housing Authority will assist In the development of the policies and procedures necessary for the effective and efficient operation of the program, and the Lubbock Housing Authority will perform the duties.required for the administration of the Section 8 Certificate Program. If any additional information is needed please contact Sandy Ogletree, Community Development Coordinator, City of Lubbock, (806) 762-6411, extension 2290. Sincerely, ail + u fan mpson ai an Lubbock Housing Authority Board XanHenr# sii x.c. D. C. Fair, Director - Lubbock Housing Authority Jim Bertram, Assistant City Manager for Development Services Sandy Ogletree, Community Development Coordinator 11