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22-1791ORDINANCE NO. 22- 1791 AN ORDINANCE OF THE CITY OF DENTON, TEXAS, APPROVING THE RENTAL REPAIR PROGRAM; RESCINDING ORDINANCE 2005-304 ESTABLISHING THE RENTALREHABILITATION PROGRAM; ESTABLISHING THE GUIDELINES FOR THE PROGRAMAND THE PROVISIONS FOR ENFORCEMENT THEREOF; ESTABLISHPqG AN ANNUALGENERAL FUND BUDGET; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the City received funds from the U.S. Department of Housing and Urban Development under the Housing and Community Development Act of 1974, as amended; and WHEREAS, the City Council approved the 2022 Action Plan for Housing and Community Development which includes an authorized budget expenditure of funds for rental repair program; and WHEREAS, the City Council of the City of Denton, finds that affordable housing within the City limits contribute to a stronger economy and better quality of life for residents; and WHEREAS, the City of Denton recognizes the need to support low-income households in securing safe, sanitary, and affordable housing; and WHEREAS, the City of Denton recognizes the preservation and creation of affordable housing has been a priority as outlined in the City’s HUD Consolidated Plan for Housing and Community Development, Denton Plan 2030, and other strategic planning documents; and WHEREAS, the City of Denton adopted the Affordable Housing Strategic Toolkit which included five recommended strategies with the activities targeted to deliver housing interventions that reflect our local housing market conditions as well as leverage the mix of resource options available from private and non-profit developers, the City, and other housing stakeholders, including the build-out of a rental maintenance grant program; NOW, THEREFORE THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings and recitations contained in the preamble of this ordinance are incorporated herein by reference. SECTION 2. The City Manager or their designee is hereby authorized to administer and take any actions necessary to implement the Rental Repair Program in accordance with the Rental Repair Program Guidelines, which are attached hereto as Exhibit A and incorporated herein by reference, and the City’s 2022 Action Plan for Housing and Community Development. The attached Rental Repair Program Guidelines shall replace and supersede any previous rental repair program adopted by the City Council. SECTION 3. The City Manager or their designee is hereby authorized to expend up to $100,000 of CDBG funds and up to $100,000 of General Funds for FY 2022-2023 in the form of forgivable loans for each qualifying project in accordance with the Rental Repair Program Guidelines and the City’s 2022 Action Plan for Housing and Community Development. SECTION 4. The Rental Repair Program shall be funded annually in an amount approved by the City Council in the budget. SECTION 5. This ordinance shall become effective immediately upon its passage and approval. The motion to approve this ordinance was made by Br fA.,, Bec k and seconded by Jc5s, Davis , the ordinance was passed and approved by the following vote [l - L] : Aye 7 / ./ \/ Nay Abstain Absent Mayor Gerard Hudspeth: Vicki Byrd, District 1 : Brian Beck. District 2: Jesse Davis. District 3 : VACANT. District 4: Brandon Chase McGee, At Large Place 5: / Chris Watts, At Large Place 6: / PASSEDANDAPPROVEDthi,th, als+ d,y ,f ab,„',y _, 2023. HUDSPETH. MAYOR ATTEST: ROSA RIOS, CITY SECRETARYa APPROVED AS TO LEGAL FORM: MACK REINWAND, CITY ATTORNEY B II[fr : 111gr)Ir{inb d : : : 25ITon: 1 9 r: : : : 2B r a y Community DevelopmentRENTAL REPAIR PROGRAM GENERAL GUIDELINES - 2022-26 Program Years 401 N. Elm St., Denton, Texas 76201 - (940) 349-7726 DENTON INTRODUCTION The objective of the City of Denton Rental Repair Program is to increase affordable housing within the city of Denton. The program will assist with essential repairs, structural accessibilitymodifications, or repairs to major systems of recently acquired rental property. Financial assistance of up to $24,500 per unit is provided as a 5-year forgivable loan. In exchange for the repair assistance the rental property owner agrees to rent the property at an affordable rate to income eligible tenants during the term of the loan (Affordability Period). WHO IS ELIGIBLE? As an owner of rental property, you may be eligible for assistance under this program if you meet all the following eligibility criteria: PROPERTY ELIGIBILITY •Rental property requires an urgent repair or has code deficiencies, which if left unattended would jeopardize the health and/or safety of the occupants, or the structure requires necessary modification(s) to make the structure accessible to accommodate a medical or physical disability. Applicant must hold fee simple title to rental units. Rental units must have been vacant since purchase by applicant. The rental property must be a 1–4-unit building located within the city limits of Denton. A maximum of two units per program year per applicant. Rental property must be more than ten (10) years old. Property must have sufficient equity to cover mortgage(s) on property and City of Denton lien. Property must be insured. Property taxes must be up to date with all taxing entities in Denton County. Property owner is a U.S. Citizen or legal resident per federal requirements. • • • • • • • • PROGRAM REQUIREMENTS • Tenant: Yearly certification of tenant income will be required for existing and new tenants. Household income for tenants cannot exceed current income limits set by the Department of Housing and Urban Development (HUD) for five years after completion of updates mate to unit(s) Community DevelopmentRENTAL REPAIR PROGRAM GENERAL GUIDELINES - 2022-26 Program Years 401 N. Elm St., Denton, Texas 76201 - (940) 349-7726DENTON INCOME ELIGIBILITY CDBG Income Limits Effective Date: 10/1/2022 Famijy Size Maximum Income $84,1505 $94,4006 Maximum Income $54,550 $62,350 $96,600 $102,850 •Lease: Minimum of one-year lease required for all leases of the Property. Leases must meet minimum lease requirements per Texas Apartment Association lease contract or comparable. Rental Rates: Repaired units’ rental rates must remain affordable for five (5) years. A lien will be placed on the property for the five years upon completion of updates made to unit(s). • Denton, TX HUD Metro FMR Area Small Area FMRs by Unit Bedrooms Efficienl One-Bedroom Two-Bedroom Three-Bedroom Four-Bedroom 51.040$970 1.230 hl,570 $2.060 $1,210 $1,430$1.130 $1,130 $1,210 1,430 mr 51.670 $2.r90$1.3101.110 $1,130 $2,390$1,430 $1,820$1,210 $1,110 $1,780 $2,340$1,180 $1,850$1,150 $1,220 $2,430 $1,580 $2.080Sl,050$980 $1,310 52,78052,1201.400 Rental Limits: Effective Date: 4/9/2022 •Annual Monitoring: requirements. Property owners must comply with annual monitoring 0 0 0 0 Property owner notifies the City of new tenants City staff inspects unit annually Property taxes paid annually Insurance up to date. • Notifications: Property owner is responsible for notifying the City regarding the following based on the Uniform Relocation Act based on the Tenant Assistance, Relocation and Real Property Acquisition Handbook at: www.hud.gov/program offices/administration/hudclips/handbooks/cpd/13780. ADA/EOE/ADEA - TDD {800) 735-2989 Pub. 02/2023 Page 2 Community DevelopmentRENTAL REPAIR PROGRAM GENERAL GUIDELINES - 2022-26 Program Years 401 N. Elm St., Denton, Texas 76201 - (940) 349-7726DEO • Tenant provides a 30 day move out notice or vacates unit. • Before a new lease is signed or tenant moves in. • DISPLACEMENT COSTS ARE THE RESPONSIBILITY OF THE PROPERTY OWNER. WHAT REPAIRS ARE ELIGIBLE? ELIGIBLE REPAIRS Urgent repairs or modifications to make the housing accessible, safe, sanitary, or habitable. City staff will inspect unit to determine eligibility. •Repairs or upgrades up to $24,500 may be eligible for assistance (including but not limited to) Electrical systems Plumbing systems, including water and/or sewer lines Roof repairs or replacement Heating, Ventilation, and Air Conditioning (HVAC) Foundation There is no guarantee that the full amount of financial assistance will be awarded. The amount of the award will solely be determined by the City based on the repair(s) approved and available funding. If the bid for an approved repair is more than the maximum allowable funds, the property owner may pay the difference. Note: When a repair is covered by an insurance policy and only a portion of the cost to repair is covered, the rental property owner must sign over insurance claim payment(s) to the City of Denton before work may begin. Rental property owner insurance funds will be deposited into an escrow account and will be expended first as contractor payments are approved. INELIGIBLE REPAIRS • Cosmetic repairs are not eligible unless approved by City staff. • Perils fully covered by insurance claims are not eligible. Note on Walk Away: Unsafe and substandard structures that cannot be made safe for habitation within the maximum program funding limits described below will not be eligible for assistance. The rental property owner will receive a letter notifying of the hazards and why assistance is being denied. Under such circumstances the City will recommend a household seek safe housing WHAT ARE THE MAXIMUM LIV FOR THE PROGRAM? If the project repairs cannot be completed within the maximum-limits allowed, the project would not be eligible unless the applicant chooses to cover the difference. Funds provided by the ADA/EOE/ADEA - TDD (800) 735-2989 Pub. 02/2023 Page 3 Community Development RENTAL REPAIR PROGRAM GENERAL GUIDELINES - 2022-26 Program Years 401 N. Elm St., Denton, Texas 76201 - {940) 349-7726DEIVTOI applicant will be deposited into an escrow account and will be expended first as contractor payments are approved. Maximum funding per application/Unit Repair: • The Program offers grants up to $24,500 per unit for repairs needed • Eligible housing units may only be approved for assistance once in a 12-month period. • Once the approved repairs are completed and the contractor(s) receives final payment, no additional repairs can be requested or approved. Note on LImited Funds: Staff responds to requests for repairs on a first-come-first-served basis from the date the completed application is received. A specific amount of funding is allocated for the program annually. Once all program funds are expended, no applications will be considered until additional funds are available. WHAT IS THE PROCESS FOR APPLICATIONS AND REPAIRS? APPLICATION 1. 2. 3. 4. Property owner completes application and uploads required documentation in Neighborly. Staff schedules in-person interview with property owner at the City of Denton Community Development office (401 N. Elm St., Denton, Texas 76201). Applicant notified of eligibility and/or denied. Staff will schedule an inspection of the rental property. REPAIR 1. Staff will work with rental property owner to finalize list of repairs. If rental property owner, property, and repair are eligible: 2. The Texas Historical Commission may have to be notified for any property 45 years orolder 3.Work write-up or plans will be completed. 4.Rental property owner will review and approve work write up or plans. Project is sent out to bid to contractors. Eligible Bids are approved by the City.5. 6.Repair work begins. 7.Repair work is completed. 8.Rental property owner completes a walk-through the rental property with staff 9.Upon final inspection approval, the contractor will submit an invoice. The payment request will be processed upon project approval, and the contractor can expect payment within 15 working days from date invoice was approved. ADA/EOE/ADEA N TDD {800) 735-2989 Pub. 02/2023 Page 4 Community DevelopmentRENTAL REPAIR PROGRAM GENERAL GUIDELINES - 2022-26 Program Years 401 N. Elm St., Denton, Texas 76201 - (940) 349-7726DEO Note on Lead Based Paint: When painted surfaces will be affected in a rental property built before 1978, the area will be tested for lead-based paint. A lead-based paint inspection and/or risk assessment shall be conducted by a licensed risk assessor. If a home is found to have lead-based paint hazards, hazard reduction techniques will be utilized Note on Change Orders: Change orders are permitted in the program due to unforeseen circumstances, bids received are over or under budget allowance • • WILL THE REPAIRS NEED TO BE PAID BACK? Assistance does not need to be paid back. It is a forgivable loan, and a lien will be placed on the property which will expire at the end of the affordability period if all requirements are met. WHAT IF PROGRAM RUNS OUT OF FUNDS? Programs are subject to availability of funds. If there are no funds available, potential applicants will be placed on a waiting list. WHAT IF THERE IS A CONFLICT OF INTEREST? in accordance with 24 CFR 570-611, applicants can be denied participation in a City program if a conflict of interest exists. A conflict of interest exists if an applicant is an employee, agent, consultant, officer, elected official and/or appointed official of the City of Denton and if within the past 12 months, and of the following three statements applies to any of the applicants: o Exercises or who has exercised any function or responsibilities with respect to funds for this program. o Participates or has participated in the decision-making process related to funds for this program o is or was in a position to gain inside information with regards to program activities. •WHAT IF I DON’T QUALIFY, CAN I APPEAL THIS DECISION? An appeal of a program decision may be in made in writing to Community Development using the contact information below. A written response to any appeal will be completed and mailed within 15 days from the receipt of the written appeal. Documentation of the appeals will be placed in the appropriate project files. •WHAT IF I DON’T MEET ALL THE REQUIREMENTS, CAN I RECEIVE WAIVER? The City of Denton Rental Repair Program must follow specific guidelines required by the funding source to assure proper administration and management. If an applicant feels that theircircumstances require special consideration, a request for waiver from the usual requirements may be submitted to Community Development. All waiver requests must be submitted in writing and should specify the program requirement(s) to be considered for waiver and state the applicant’s reason(s) or special circumstances why they believe a waiver should be approved. The Community Development Manager will review requests on a case- by-case basis. ADA/EOE/ADEA - TDD (800) 735-2989 Pub. 02/2023 Page 5 Community DevelopmentRENTAL REPAIR PROGRAM GENERAL GUIDELINES - 2022-26 Program Years 401 N. Elm St., Denton, Texas 76201 - (940) 349-7726DENTON •WHAT IF I AM NOT HAPPY WITH SOME OF THE WORK COMPLETED? The contractor’s work will be monitored by the applicant, City of Denton Community Development staff, and the City of Denton building code inspector. In the event a dispute exists between the applicant and the contractor with respect to the work, the City shall take appropriate action in accordance with the provisions of the construction contract to assure that the applicant is satisfied before making any payment to the contractor. In the event any dispute cannot be resolved, Community Development staff shall consider all pertinent facts and shall decide an appropriate course of action to resolve the dispute. NON-DISCRllVlINATION REQUIREIVIENTS The program will be implemented in ways consistent with Title VIII of the 1968 Civil Rights Act. Per the City of Denton Non-Discrimination Ordinance, Applicant is prohibited from discriminating in housing, employment, and public accommodations based on the following protected classes: race, color, national origin, age, religion, disability, sex, sexual orientation, and gender identity. The language in the non-discrimination ordinance generally mirrors language in federal and statenon-discrimination laws. TERMS DEFINITIONS DEFINITION Applicant Person(s) who apply and meet the following a o a tenant Forgivable Loan A non-amortizing loan, typically with a term of 5 years bearing an interest of 0% and are forgivable upon loan maturity A household is defined as all persons occupying the same housing unit regardless of their relationship to each otherHousehold ADA/EOE/ADEA - TDD (800) 735-2989 Pub. 02/2023 Page 6