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2017-03-06 Minutes CDAC Minutes (Unapproved) March 6, 2017 Members Present: Mary Beth Cottingham, Barbara Gailey, Valda Morgan,Ann Patterson, Randi Skinner, Kayla Stewart,Jodi Vicars-Nance, Larry Varnes. Members Absent: Cekeytra Chambers Staff: Barbara Ross Chair Larry Varnes called the meeting to order. He asked if there were any revisions to the minutes from February 2nd. Hearing none he asked for a motion to approve the minutes. Mary Beth Cottingham moved that the minutes be approved as written. Jody Vicars-Nance seconded the motion. The February 2, 2017 minutes were approved. Chair Varnes reviewed the funding available to be allocated. He commented that$52,212 must be provided to the local Community Housing Development Organization (CHDO) as per the HOME program requirements. He indicated that the amount requested was approximately$231,000 more than what is available. Members would have to determine whether they wanted to fully fund a project or program, or partially fund the activities. Chair Varnes commented that he had not previously heard about the infill housing-program. Barbara Ross provided some information and stated that staff would provide additional information during their presentation. She indicated that there was an infill program several years ago but, it ended when it was apparent that the funds were needed for rehabilitation of existing homes. Ms. Ross added that there are very few affordable units in the community and this program would at least provide two more. Chair Varnes reminded members that the request for funding for the Minor Repair Program was presented at the previous meeting. Lee Ann Hubanks and Glenda Blackwell presented the request from Fairoaks for funding of repairs to the senior housing facility. Ms. Hubanks thanked the CDAC for the assistance that has been provided over the years. She added that Fairoaks puts money away every month to repair things in the facility and that they have spent hundreds of thousands. But, she noted,that they are never able to get everything done. Ms. Hubanks discussed the marketing carried out by Fairoaks staff. They seek out those individuals that are eligible for the housing. It was noted that they also support cultural diversity. Barbara Gailey asked why they did not go to their waiting list. Ms. Hubanks indicated they use it constantly. Ms. Cottingham indicated that she thought the information in the Fairoaks application was very helpful. Ms. Blackwell stated that the outreach program is how they get individuals on the waiting list. It was noted that Fairoaks also uses volunteers to support programs for their seniors. It was noted that the "Master Gardeners"from UNT had volunteered both in the spring and fall. Valda Morgan asked if the facility was at capacity. Ms. Hubanks indicated that it was. The CDAC had other questions for the applicant. Ms. Gailey asked how the affordable housing was acquired by Plano Community Homes. Ms. Hubanks stated that in 2006 they received a call from HUD requesting that they take over the Section 202 housing units. HUD preferred to do this rather than closing 1 1 P a g e the facility. It took five years to go through the process. Ms. Hubanks noted that at their last inspection by HUD officials, they scored 94 or 96 out of 100. Ms. Morgan noted that they had not used all their previously allocated funding. Ms. Ross indicated that any leftover funding is reallocated to the City's housing programs. Chair Varnes asked about the average number of persons in the units. Ms. Hubanks indicated that most units house a single individual. All units except one, are one-bedroom. Ms. Morgan asked about the cost of the fire safety improvements. Ms. Blackwell indicated the cost was about$5,000 for each unit. Vice Chair Randi Skinner asked what they would focus on if the CDAC did not recommend funding the total amount requested. Ms. Hubanks indicated that they would complete the safety items first. Ms. Morgan asked about who would be doing the work. Ms. Hubanks stated it would be bid out. Keri Marie Sutherland presented the request from Habitat for Humanity of Denton County. They are requesting funding to build two housing units that would be sold to a low-income family. Ms. Sutherland described the housing market in the Denton area and how difficult it is for low-income households to find affordable housing. She noted that the housing units usually cost around $95,000 plus volunteer labor costs. She added that Habitat's families are provided with a no-interest loan and the average monthly payment is$400 to$600. These households are generally paying around $1,300 per month in rent. It was noted that mortgage payments from these households go to build units for additional households. Ms. Gailey asked about the information on the average rents. Ms. Sutherland indicated that she used the 2015 census information. She added that Denton was a little higher but that they had used the County's statistics. It was noted that students are eligible for the program. Kayla Stewart asked if"non-traditional students" could participate in the program. Ms. Sutherland stated that Habitat is open to "non-traditional students." Vice Chair Skinner asked about the funding that was awarded last year and had not yet been expended. Ms. Sutherland stated that they were looking for an eligible family. She noted that the lot was small and that it will be a 2% bedroom unit. Ms. Gailey asked why it would include a % bedroom. Ms. Sutherland stated it would actually be called an office. Ms. Cottingham asked if the% bedroom would have a closet and added that this usually denotes whether it is a bedroom or not. Ms. Sutherland was unsure about the closet. Chairman Varnes asked if Habitat works with the "Brush with Kindness." Ms. Sutherland stated that she was in charge of working with the volunteers. She also stated that Habitat is working on a partnership with City Code Enforcement officials to encourage people to volunteer. Ms. Ross asked about Habitat looking for lots in low-income areas and whether there was discussion regarding the fact that this might not support the low-income neighborhoods. She asked if they looked in other areas as well. Ms. Sutherland stated that they are looking for donated lots in other areas and want to work with cities on purchasing lots in higher income areas by paying back taxes. Ms. Patterson asked how long the families stay in their homes. Ms. Sutherland stated that they are required to stay in the homes for ten years unless they pay the loan off early. If they break their covenant, they also have to pay the back taxes. Chairman Varnes asked if"Brush with Kindness" would be eligible for funding if they are serving low- income residents. Ms. Ross said it could be funded out of CDBG. Ms. Skinner asked if Habitat could request for this program as well as their construction program. It was agreed that this would be a good idea but, the organization would need to make that decision. 2 1 P a g e Barney Cosimo, Interim Executive Director, of the Denton Affordable Housing Corporation (DAHC), presented their request for funding. He stated that DAHC was requesting fund to improve the properties that currently house clients from MHMR—2121 Crestmeadow, 3809 Camelot and 3100 Cedar Hill. They are requesting approximately$56,000. Mr. Cosimo noted that one property needed a new roof. Some require attic insulation and replacement of their HVAC system. Concrete in the back of the building needs to be re- worked and some new flooring is needed. New siding is needed on the Crestmeadow property. Ms. Gailey asked who they are working with at MHMR. Mr. Cosimo indicated it was Steve Forgey. Ms. Morgan asked if DAHC owns the properties and then leases them to MHMR. Mr. Cosimo indicated that this is correct and that the State decides how much the rent payment will be. Ms. Patterson asked what they were replacing the carpet with in these units. Mr. Cosimo indicated that they would replace it with vinyl plank. It was noted that Barney is the "pro-bono volunteer." Ms. Ross expressed her appreciation to Mr. Cosimo for keeping DAHC going and supporting their housing activities. Luisa Rodriguez-Garcia presented the request for the City's Homebuyer Assistance Program (HAP). Ms. Garcia stated that she'd been with Community Development for 25 years. She described the requirements of participating HAP households. The program has been active since 1992 and it is designed to help low and moderate-income households purchase their first home. A lien is placed on the property for five years and a percentage of the loan is forgiven each year over the five-year period. Ms. Garcia indicated that they are using both CDBG and HOME for the program. The City can provide up to $14,900. The HOME program requires the expenditure be under$15,000 to keep the affordability period at five years. The funds are used for the down payment, closing costs, prepaids and principal reduction funding. Ms. Garcia explained principal reduction. She noted that participants in the program may have to pay some funding back if they sell the unit before the end of their five-year period. Some funds can also be used for minor repairs. Homebuyers must live or work within Denton, must be income-eligible, and must show a need for the assistance. The cap is $10,000 in liquid assets. The household must also include some of their funds in the purchase. Ms. Garcia stated that the household must qualify for a mortgage loan with an affordable payment. Ms. Morgan asked how the household finds a local lender. Ms. Garcia explained that the program has participating lenders that have been trained on the program. She added that most local lenders are on the list. Often lenders want to participate if they're working with a family and Ms. Garcia will train them. Real estate agents are also trained on the program and assist the homebuyers in finding a unit. Ms. Garcia indicated that one problem with the program is the lack of affordable housing. Currently, only 20 homes on the market are listed for$180,000 or less. These units tend to go quickly. She added that staff is looking at what other cities are doing and that a new program, of purchase, renovate and sell, may be developed. Ms. Garcia added that the request is for$69,000 and with the residual funding from last year of$75,000 which will give the program a grand total of$144,000. This amount will provide assistance to purchase approximately ten homes. Ms. Morgan asked if families have already been identified for the program. Ms. Garcia indicated that this was correct, some families are currently looking for a unit. Ms. Garcia gave a summary of the proposed infill housing program. Funds will be used to purchase lots and construct affordable housing. The units will be three bedroom,two bath units and two care garage units. They will be brick based on the deed restrictions in the various neighborhoods. The homes will be sold to new homebuyers. Ms. Garcia noted that the City had an infill program several years ago but, due to the decrease in funding,the program did not continue. Six homes were built in Denton under the earlier program. Staff will also be working with the Planning and Development Department to see if any of the 3 1 P a g e development fees can be waived. These waivers could be counted as match under the HOME program. Ms. Morgan asked if staff had already identified the properties. Ms. Garcia indicated that the properties have not yet been determined. She noted that funding from the sale of the properties will be used to complete other projects. HOME funds must be used on these projects as it is not an eligible activity under CDBG. Chairman Varnes commented that we have three grant requests all within the same framework. He added that he will be asking members to prioritize across the three programs. Ms. Espino presented the request for the Home Improvement Program. It was noted that she had been in Community Development for 23 years. Ms. Espino explained that the reason for the current program account balance was due to the fact that staff currently has two rehabilitations and two reconstructions in process. After these are completed, there will only be$58,000 left in the program budget. Ms. Espino explained how the Home Improvement Program works. She noted that$35,000 to$45,000 was the cost of a regular rehabilitation. Chairman Varnes asked if all the repairs were internal. Ms. Espino explained that staff has to ensure that exterior lead-based paint is removed and other exterior repairs are completed if necessary. She commented that the program revitalizes low-income neighborhoods and it is one of the only programs that offers support to people that live in Denton. Ms. Espino reviewed the program guidelines including that the homeowner had to own the home for at least two years and the property must be located within a targeted area. "Before and after" photos of previous projects were displayed. Participating households must be able to show that they can afford the loan,taxes on the property, utilities, etc. Tax values often increase after the rehabilitation or reconstruction. Ms. Espino stated that staff attempts to make units as energy efficient as possible. Staff checks records to ensure that the household continues to live in the unit, insurance is purchased and utilities are being paid. Ms. Espino stated how important the Minor Repair Program is in assisting low- income homeowners who need emergency repairs and accessibility. Ms. Stewart asked about the additional funding sources. Ms. Espino stated that what was included on the application was funding from the previous year. However, she also pointed out that the City had previously applied for and received "Amy Young Barrier Removal"funding from the State to assist those with accessibility needs. That funding is no longer available to local governments. Ms. Espino commented that if the CDAC is looking at priorities, she would say that the Home Improvement and Homebuyer Assistance programs were the housing priorities. Ms. Cottingham commented that the difference between what has been requested and the funds available is$283,656. She suggested cutting Habitat's request down to$95,000 for one home and then splitting the rest between the HIP and the Infill programs. Vice Chair Skinner stated that her idea is similar but, the numbers are different. She added that Fairoaks could do some of their community room improvements with other funding. Ms. Morgan questioned the HVAC improvements that DAHC was requesting. She asked if these units were eligible for the Minor Repair program. Ms. Ross indicated that they were not eligible. Vice Chair Skinner suggested that DAHC receive full funding. Ms. Ross indicated that DAHC would be funded with HOME dollars. Members discussed the 15%that is required to be provided to a Community Housing Development Organization (CHDO). Members continued to discuss what requests should be funded. Vice Chair Skinner suggested that Habitat and the Infill program receive less than requested and the Homebuyer, Home Improvement and Minor 4 1 P a g e Repair receive full funding. Ms. Cottingham said she was suggesting only half for Habitat because they have funding from other sources. She had also split the funding from Infill and Home Improvement. Ms. Cottingham also suggested that Minor Repair be fully funded. Chair Varnes stated that Habitat was different from other requesting organizations in that they are able to complete fund raising activities. He added that the funding request may need to be reduced more than what has been discussed and asked members whether they would prefer to cut Habitat or the Infill program. Members continued to discuss funding priorities and voted to recommend to City Council the CDBG/HOME budget as stated below: Denton Affordable Housing Corporation -$56,950 (HOME) Fairoaks Senior Housing Complex-$105,338 (CDBG) Habitat for Humanity Housing Project-$56,726 (HOME) Home Improvement Program -$395,568 (CDBG & HOME) Homebuyer Assistance Program -$69,000(CDBG) Infill New Construction Program -$150,000 (HOME) Minor Repair Program -$162,000 (CDBG) Ms. Ross stated that she would contact the CDAC members when staff receives verification of the final CDBG and HOME allocations. She indicated that the Federal budget may be passed sometime in April or May. CDAC may have to meet again and revise the recommendations if funding is cut or increased. The meeting was adjourned. 5 1 P a g e