First Reading of the Proposed Affordable Housing Trust Fund Ordinance (AHTF); Resolution establishing the AHTF administrative policies and procedures; Resolution dedicating loan repayments from the Ashland Rehabilitation Loan Program Deferred Payment Loans to the AHTF
|Meeting Date:||September 16, 2008||Primary Staff Contact:||Brandon Goldman|
|Secondary Dept.:||Legal Department
|Secondary Contact:||Bill, Molnar firstname.lastname@example.org|
|Approval:||Martha Bennett, City Administrator||Estimate Time:||45 minutes|
The Housing Commission unanimously supports approval of the proposed Ordinance creating the Affordable Housing Trust Fund (AHTF), the proposed resolution establishing policies and procedures for administration of the Trust, and the proposed resolution dedicating Community Development Block Grant loan repayments to the AHTF. Staff recommends approval of the Ordinance, and associated Resolutions as proposed.
The development of the Affordable Housing Trust Fund (AHTF) Ordinance, and the Resolution establishing the policies and procedures for administering the AHTF, was initiated with the approval of the Affordable Housing Action Plan in May of 2003. The 2003 Affordable Housing Action Plan called for the establishment of a Housing Trust Fund as a key strategy (Sections 1B, and 1C attached) for the City to undertake to support the development of affordable housing.
In recognizing that the private market has yet to provide the full range of needed housing types, the AHTF can provide support to the development or retention of housing that is affordable to households earning less than 120% the Area Median Income.
The proposed Ordinance simply establishes the Affordable Housing Trust Fund. In addition to this Ordinance two additional Resolutions are proposed. The first Resolution outlines the policies and procedures guiding the use of any Housing Trust Fund revenue, and a second proposed Resolution would direct approximately $99,000 in future loan repayments made to the City as part of a 1985 Rehabilitation Program into the Affordable Housing Trust Fund.
Public Involvement History
In February and March of 2007 a public survey was direct mailed to 80 individuals and businesses in the community, and was posted as an online survey on the City website for the general public to assist at identifying housing needs, potential uses for a trust fund, and potential financing mechanisms that would be supported or not. The City received 69 responses to the survey helping further inform the formation of the Affordable Housing Trust Fund Policies and Procedures.
A Public Forum was held on October 30th, 2007 with the nationally recognized expert on Housing Trust Funds, Mary Brooks, presenting on the topic. This forum was universally considered informative by those in attendance and further provided another opportunity for public involvement in advance of the drafting of the proposed Ordinance and associated Resolution.
The full Housing Commission held numerous public hearings in 2007 and 2008 during the development of the Ordinance and Resolution, culminating in their final review on June 26th, 2008 (minutes attached).
As a direct result of these community outreach efforts the City established a dedicated webpage and email database to keep interested parties and the general public informed of public meetings and provide drafts of proposed components of the draft Affordable Housing Trust Fund. These archived materials, and the currently proposed ordinance and associated Resolutions, are available online at www.ashland.or.us/htf
Affordable Housing Trust Fund Ordinance
Resolution Establishing Policies and Procedures
Purpose: Section 1
The primary purpose of the AHTF would be the rehabilitation, preservation and production of quality, well designed rental and homeownership housing for households earning less than 120% the Area Median Income. It is expected that the local contributions made through Ashland's Affordable Housing Trust Fund will assist in maximizing the leveraging of state and federal funds, as well as encourage private sector investment in affordable housing.
The underlying premise behind many of the proposed policies is that the AHTF should remain flexible to changing conditions and thus a broad range of eligible applicants and uses has been incorporated into the platform (policies and procedures).
Eligible Applicants: Section 2
Eligible Uses and Activities: Section 3
The listing of Eligible Uses and Activities contains the stipulation that all funds dedicated to a project must benefit households earning less than 120% the Area Median Income, and that any units developed with AHTF assistance shall comply with City affordability standards per resolution 2006-13. The existing Resolution 2006-13 correlates housing costs to not exceed 30% the income of the various income levels (60, 80, 100 and 120% Area Median Income) by establishing maximum rents and sets forth the method to calculate purchase price (to include Principle, Interest, Taxes, Insurance, and Homeowner Dues).
It is understood that the AHTF would not be in a position to fund every activity in any given year, thus it did not seem reasonable to exclude potential uses under the expectation that we would consistently receive applications for the most preferred uses. The Request for Proposals (RFP) competitive award process would allow for a more targeted solicitation, for specific project types, upon issuance of the RFP. Flexibility in the listing of eligible uses is further provided for under Section 3.5.j in allowing the City Council to establish 'Other Uses' provided the use supports the development or preservation of affordable housing within the City of Ashland.
Preferences: Section 4
Fund Administration: Section 5
The Affordable Housing Trust Fund (AHTF) is to be structured so that applications for funds are reviewed by the Housing Commission and Staff, and recommendations are provided to the City Council for final awards
The annual award process is intended to run concurrent with our annual issuance of Community Development Block Grant Request for Proposals (RFP) to streamline the process for applicants and the City. The resolution as proposed provides for the issuance of an annual RFP (Section 5.5) as well as the option to issue a Notice of Funding Availability (NOFA) (Section 5.4) for up to 10% of the AHTF revenue. This NOFA option would enable the City to fund continuing housing programs exclusive of the annual RFP process if so desired, as well as to remain responsive to immediate opportunities that may arise.
Match Requirements: Section 6
Allocation of Funds: Section 7
The Notice of Funding Availability section (7.2) was incorporated into the platform after discussions with affordable housing providers regarding the need to retain some measure of flexibility in recognition that the nature of affordable housing development is often opportunity dependant. Specifically in acquisition of property the ability to wait for an annual RFP process is not always possible in a competitive real estate market. The NOFA process would allow the City to be responsive to such mid year requests from qualified applicants. The Housing Commission believed that competition through the annual RFP process would be advantageous in identifying the best proposals, therefore stipulated their belief that funds awarded through a NOFA process should be limited to no more than 10% of the annual AHTF revenue in a given program year. This limitation would ensure the vast majority of funds (90%) were subject to the competitive process outlined in section 7.1.
AHTF Grant or Loan Award Threshold and Selection Criteria: Section 8
Additional selection criteria may be developed and included in the annual RFP to best direct AHTF resources toward an identified priority need.
Resolution Dedicating CDBG Rehabilitation loan Repayments to the Affordable Housing Trust Fund
In advance of identifying this sustainable funding stream, the attached Resolution dedicating repayments of rehabilitation loans to the City that were granted in 1985 is presently being proposed. These 1985 loans are paid back over time and if the Resolution is approved they would provide an initial small stream of income into the newly created AHTF.
As of the beginning of this fiscal year there remained 21 outstanding CDBG rehabilitation loans totaling $99,843. Given these are 0% interest loans, and repayments are only triggered when a property sells, is refinanced, or is transferred (inherited), the repayments are intermittent and limited to a few loan repayments annually. In 2004-2005 due to the increase in refinancing many of the original loans were paid off at that time. Due to the unpredictable nature of repayments these funds are currently directed to capital improvements when received in a given year. Upon approval of this proposed Resolution these funds would instead be redirected to the AHTF to support affordable housing. Specifically the proposed Resolution would direct any loan repayments made after July 1 2008 (the beginning of this fiscal year) into the AHTF. This date is relevant as in July of this year the City did receive a repayment for 4 of these 1985 CDBG Rehabilitation loans totaling $19,652.00. If approved, this Resolution would re-direct those funds to be the first contributions into the AHTF. The remaining $80,191 in outstanding loans would be contributed to the AHTF over the coming decades as they are repaid without interest per the terms of the original loans.
|Related City Policies:|
Affordable Housing Action Plan (Strategy 1)
Council can approve, amend or deny the proposed Ordinance and associated Resolutions.
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