ACTION REQUESTED:
Title
Communication from the City Manager and Community Development Director with a Request to Approve $300,000.00 in HUD HOME FUNDS to HABITAT FOR HUMANITY GREATER PEORIA AREA for the Construction of Three (3) New, Affordable, Single-Family, Owner-Occupied Homes Located at 1833 N. ATLANTIC STREET, 1915 N. DELAWARE, and 900/902 E. NEBRASKA. (District 3)
Body
BACKGROUND:
On an annual basis, the City of Peoria receives HOME funds from the US Department of Housing & Urban Development (HUD). Fifteen percent (15%) of the total annual HOME allocation must be set aside for Community Housing Development Organization (CHDO) activities. As a part of the 2013 City Budget, City Council approved the allocation of $300,000 as CDHO set aside funds for the 2013 program year. This allocation exceeds the required 15% set aside amount of the total HOME funds for CHDO activities.
Per HOME regulations CHDOS are private, nonprofit, community-based, service organization that have paid staff with the capacity to develop affordable housing for the community it serves. To qualify as a CHDO, a nonprofit must demonstrate that meets certain requirements regarding its:
· Legal and tax-exempt status,
· Financial management capacity and accountability,
· Staff capacity to carry out HOME-funded activities,
· Experience serving the community,
· Board representation by community members, with at least one-third of its members low-income, and
· Lack of for-profit or public control.
On December 8, 2014, the City published notice for CHDO certification. The CHDO certification form that was released for the 2014 fund allocation is different than in years past. This CHDO certification requested that the organization propose a potential project design to be funded. In previous CHDO certification processes, a separate funding request/application would accompany a certification form. Staff altered this process so the City could be more involved in a project design to maximum other neighborhood revitalization efforts and leverage other resources.
Two organizations submitted CHDO certification forms: 1) Peoria Opportunities Foundation (POF) and 2) Habitat for Humanity. Each organization proposed a different type of affordable housing project. POF proposed rehabbing four (4) existing single family homes in the East Bluff neighborhood. Habitat for Humanity proposed building three (3) single family new construction homes, however the location of the builds was identified as a potential project barrier. In their CHDO certification, Habitat welcomed the opportunity to discuss potential site locations to leverage other targeted neighborhood strategies.
A committee comprised of City staff reviewed the proposed projects submitted by POF and Habitat. The projects were evaluated using the following criteria:
1. Community Impact: How does the proposed project benefit the Peoria community?
Explanation - meeting an unmet housing need, serving a specific population, increasing tax base, removing blight
2. Coordination: How does the proposed project support other neighborhood stabilization efforts?
Explanation - proposed project sites are intend to assist with other efforts, organization has a focus to partner with other initiatives and agencies
3. Resources: How does the proposed project leverage other resources?
Explanation - resources could be identified financing, in-kind donations, committed partners
4. Financial Status: Is the organization financially stable?
Explanation - review of the organization's operating budget and audit attached to CHDO
Application (Tab A and B)
5. Developer Capacity: Has the organization completed similar projects as proposed in the CHDO application?
Explanation - review Section IV - Affordable Housing Production of the CHDO Application
6. Project Barriers: Does the proposed project have identified obstacles for development?
Explanation - market for units, lack of financing, site control, project design plans
7. Project End User: Does the project have an identified end user for the proposed development?
Explanation - based on the type of activity for project - does the organization have a method for procuring an end user, identified market for development, support for the end user
Based on the scoring criteria of the two organizations' proposed projects, City staff is recommending the total available funding of $300,000 be allocated to Habitat for Humanity for their project of new construction of three (3) single family homes.
Habitat for Humanity has a substantial and successful history of providing affordable housing using CHDO funds. For 2012 and 2013, Habitat for Humanity Greater Peoria Area was the sole CHDO and received a total of $530,000 in HOME funds for the construction of 505 E. Seneca Place (Council District 3); 507 E. Seneca Place (Council District 3); 2223 W. Tripp Ave (Council District 4); 1102 E Melbourne Ave (Council District 3); 909 NE Perry Ave (Council District 1) and 913 NE Perry Ave (Council District 1).
Habitat identified in their CHDO certification that site control and the location of the builds is a project barrier and welcomed the opportunity to discuss potential site locations to leverage other targeted neighborhood strategies. City staff met with Habitat and discussed vacant lots owned by the City, the feasibility of such lots for development, and the location of the lots to leverage existing neighborhood initiatives. City staff and Habitat agreed that build locations in the East Bluff would complement the current activities of various community partners (LISC, East Buff Neighborhood Housing Services (EBNHS), East Bluff Community Center, etc). The Attorney General grant of $3 million dollars awarded to LISC from the National Foreclosure Settlement Funds identifies single-family, homebuyer activities as a goal. These dollars are specifically targeted to the East Bluff neighborhood. While Habitat would not be a recipient of the grant dollars from LISC their development would enhance the neighborhood efforts currently underway by LISC.
In a separate City Council Request for Action, City staff will request the approval of a property donation to Habitat for vacant lots: 1833 N. Atlantic Street, 1915 N. Delaware, and 900/902 E Nebraska. If approved, Habitat will use the awarded $300,000 of CHDO funds to construct three (3) new, affordable, single-family, owner-occupied homes on the property.
Each home will be Energy Star compliant, reducing the ongoing utility costs for the occupant. Another condition of the funding is compliance with the May 15, 2007 Council Action that states City funded development of single-family homes must comply with the Land Development Code Residential Design Standards. Habitat continues to work with City staff and other community stakeholders to provide the best product to its homebuyers as well as complement the existing neighborhood character and design. Example renderings of each type of design for the proposed properties are attached.
FINANCIAL IMPACT: 2014 CHDO set aside funds, in the amount of $300,000, will be awarded to Habitat for Humanity, a certified CHDO.
NEIGHBORHOOD CONCERNS: None at this time. Numerous members of the Peoria community are involved throughout the projects and efforts are made by Habitat to invite and include the neighborhood in the development process of the properties. Habitat has met various community stakeholders in the East Bluff to discuss the proposed project. Once approved by Council, Habitat intends to continually engage the East Bluff neighborhood in their development plans.
IMPACT IF APPROVED: Three (3) new, affordable, single-family, owner-occupied homes will be constructed using CHDO funds.
IMPACT IF DENIED: Three (3) new, affordable, single-family, owner-occupied homes will not be constructed using CHDO funds and other programming will have to be developed in order to expend CHDO funds.
ALTERNATIVES: None identified at this time.
EEO CERTIFICATION NUMBER: 03135-150630
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL'S 2014 - 2029 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Attractive Neighborhoods with Character: Safe and Livable
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Reinvest in neighborhoods.
DEPARTMENT: Community Development