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HomeMy WebLinkAboutResolution - 2834 - Grant Application - HUD - Rental Rehabilitation Program FY1988 - 05_12_1988Resolution #2834 May 12, 1988 Item 19 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK 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 Appli- cation for the fiscal year 1987-88 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 12th day of May 1988. ATTEST:. , City Secretary APPROVED AS TO CONTENT: Sandy O e r , Community Development Administrator APPROVED AS TO FORM: t mes Y. Brewster vil Trial Attorney B. C. MCMINN, MAYOR K RENTAL REHABILITATION PROGRAM The City of Lubbock is applying for $184,000 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 23 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 equity. The amount of City funds provided will be determined 1 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 $5,000 per unit for efficiency units, $6,500 per unit for one -bedroom units, $7,500 per unit for two -bedroom units, and $8,500 per unit for three or more -bedroom units. The minimum public subsidy shall not be less than $2,000 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 20% of the total cost per unit of a project. E 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 1988-89 rental rehabilitation program were updated to reflect more current neighborhood conditions during our 1986-87 Program. 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 3 eligibility for existing tenants. This information will be 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 15% of the Rental Rehabilitation Grant funds for one bedroom or zero 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 two 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 0% 3 5% 4 100% VIII. OTHER PROGRAM REQUIREMENTS 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. IX. 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 §511.10 (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 §511.10 (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. 2.1 r.�� a � ' 9hw. � E ,rr. .. •'S'. ,J') +m'�:. � � � * �.'.s �. Aa; W�c r a'. ea ,.`''^5 a a s • ft `i t"".c.< a p' x i Ne^}'�w:� d, u%;r < i:- 4'•'4 '* i+,,,i 4e. ..,,� a � t "o � t ..� __ ►,Z, i✓>= _ � .e!s. 5+� !.- __ r � �--_- i .��'; � te.: .� ih �r 'p 4 s <"�, *4 l `� -.}� ,.� �� � , � �� � y� ?.v: *„Y�' /�� i":�ada'� v N,.y � t'kv... *.'e° i"ia'r `��;.` '3 yy1� .. t opt � �'i "$. � .7E^ �!. � ^�. a' sp°vi;r "�` �'••a.'�' a qr i` � �. Lubbock • ca* ea/!I/!LG!/Ily ffavaraOillC,Ct#tielel Lubbock, Texas t/o,^ && anz' &r4 ` f n�llwu� vz del z%ri r1,otz f l/l i /946- Vkior 1.)Unwck Spun w MQKky I we mcclar; Office of RCSkM l AdmWwator (► Commugwr P64was a w Dodopwou R slan t Hou"s coma imkmisr �'��'!'�"''�► �?%��i�'A�....�►�. � 1l, � A''R�*•"d �!'n r_ ., n-!�:~n . .~n-rar_'� _ _ �-�rr-�� I OMB ADDroval No. 0348-0001 FEDERAL ASSISTANCE c Nis APPLI• CATION B NUMBER 3. �u CATION IDENTI- 1. TYPE OF ElNAL) NOTICE OF INTENT (OPTIO Y FIER b. DATE SUBMiSSION ❑ FIER Year month day NOTE To BE (Nark ap- PREAPPUCATION - ASSIGNED jarwriare ® APPLICATION 19 BY STATE box) Leave Blank a. NUMBER SAI-TX-1010201 b. DATE ASSIGNED Year month day 4. LEGAL APPLICANT/RECIPIENT S. EMPLOYER IDENTIFICATION NUMBER (EIN) a. Applicant Name CITY OF LUBBOCK 75•-6000590-W b• Organization Unit Community DevelopBient Department S. c. Street/P.O. Box P . 0. Box 2000 PRO- a. NUMBER (1 1 41 ' 12 1 118 1 d.Citr Lubbock *-county • Lubbock . f. State Texas `• ; Q• ZIP Code- 79457 (From CF" MULTIPLE ❑ b• TITLE Rental tL Contact Person (Name Sandy Ogletree. d Telephone Na) (806) 762-6411 ext. 2290 Rehabilitation Grant 7. TITLE OF APPLICANT'S PROJECT (Use section IV of tftis form to provide a wmmary description of tie & TYPE OF APPLICANT/RECIPIENT proleci) �y 1c- - W a�+rrwuFe c-a�catr ►err EainebrW rrunm, .. ... .1987-88 Rental Rehabilitation Grant Program oramtabon J--Y4o hb 0--Ca " K-oew 4p[ ). o sftt &ter appropriate triter 4 Y 9. AREA OF PROJECT IMPACT (Nam= of dtim counties etas= etc) 10. ESTIMATED NUMBER 11. TYPE OF ASSISTANCE OF PERSONS BENEFITING � "10' er.n< E° `kwn City of Lubbock 173,449 t 17. PROPOSED FUNDING 13. CONGRESSIONAL DISTRICTS OF: 14. TYPE OF APPLICATION A -•New C--F1eVWm E-Aupnrhtion a-++� o-tawwwwn Entn oppmpeiau lean Ia. FEDERAL S 1 L .00 a. APPLICANT b. PROJECT b. APPLICANT 00 19 th 19 th 17. TYPE OF CHANGE (Foe mew 14e) e. STATE - .00 15. PROJECT START 16. PROJECT a- O l D„°o aa„ F 'r (Sp yk d. LOCAL DATE Year month day DURATION 19 88 8 1 12 Marlris s OTHER 1& DATE DUE TO Your month day pno e ASHo Enter (r1 1. Total 5 184,000 •00 FEDERAL AGENCY ► 19 88 5 19 19. FEDERAL AGENCY TO RECEIVE REOUEST 20. EXISTING FEDERAL GRANT Housin & Urban Development, Ft. Worth Tx76113 IDENTIFICATION NUMBER a. ORGANIZATIONAL UNIT (IF APPROPRIATE) b. ADMINISTRATIVE CONTACT (IF KNOWN) c• ADDRESS 21. REMARKS ADDED 22. To the best of my knowledge and t>OW. a. YE5, TH15 NUTK:E OF IN I EN I /NHLAFFM;A I IUN/AF PU THE data in this preapplicaWVapplication EXECUTIVE ORDER 12372 PROCESS FOR REVIEW ON: are true and correct, the document has DATE 9 APPLICAM CERTIFIES been 0* authorized by the 90veming 1 J THAT► body of the applicant and. the applicantIc 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 ❑ a. TYPED NAME AND TITLE b. SIGNATURE 123. CERTIFYING w REPRE- SENTATIVE B . C . McMinn, Mayor / 24. APPLICA- Year month day 25. FEDERAL APPLICATION IDENTIFICATION NUMBER 26. TION RECEIVED 19 27. ACTION TAKEN 28. FUNDING 0 a. AWARDED 29. ACTION DATE- 19 0 b. REJECTED a, FEDERAL S .00 31. CONTACT FOR -ADDITIONAL 0 a RETURNED FOR TION (Name and telephone nun b. APPLICANT .00 AMENDMENT i 0 d. RETURNED FOR uw E.O. 12372 SUBMISSION C. STATE 00 d. LOCAL 00 i BY APPLICANT TO 'dj' STATE 0 a. DEFERRED e. OTHER .00 .t. TOTAL i 00 0 f. WITHDRAWN NSN 7540-01-008-8162 424-1 PREVIOUS EDITION(Z�,. r:/. 0 "Z-C IC rIr)T I IC NRI c �,,, .,,.-,..,-^ Year month day 30- DATING TE NFORMA• 32. burl ENDING DATE THE STATE N Year month date 19 Year month date 19 33. REMARKS ADDED ❑ Yes , ❑ No =ORM 424 PAGE 1 (Rev. 4-84) OMB Circular .1-l02