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Home My WebLink AboutAgenda - 04-07-2009 - 4jORANGE COUNTY BOARD of CC~MM15514NER5 ACTION AGENDA ITEM ABSTRACT Meeting Date: April 7, 2009 Action Agenda Item No. SUBJECT: Development A reement Amendment -- 4CHLTIEmPUwFRmenfi DEPARTMENT: HousinglCamm. Development PUBIC HEARING: €YIN~ No ATTACHMENT(S): Letter from OCHLT Agreement Amendment INFORMATION CaNTACT: Tara L. Fikes, 245-2490 PURPOSE: To consider approval of an amendment fio fihe Development Agreemenfi between orange County and orange Community Housing and Land Trusfi ~oCHLT} and EmP4wERment, inc. dated October 25, 2004 for homes built in the Northside neighborhood in fihe Town of Chapel Hill and authorize the Manager fio execute the amendment upon approval of fihe County Attorney. . BACKGROUND: on May 9, 2002, fihe Board of County Commissioners approved the allocation of $90,000 fio orange Community Housing and Land Trust ~aCHLT} and E.mPOWFRment, Inc. to assist in the construction of three homes in the Northside neighborhood of Chapel Hill fihafi would be held in fihe Gommunifiy Land Trusfi ~CLT} fio ensure long term afl:ordabilifiy. These homes have been constructed, placed in fihe CL,T and sold fio Iow income firsfi~fiime homebuyers earning 60°/~ or less of area median income as required by the Development Agreemenfi. Afi this time, as OCHLT prepares to resale these homes, ifi is asking that the income limit for prospective buyers be increased to 8Q°/~ or less of HUD Area Median Income AMI}because fihe homes are no~ longer affordable for families at 60% AMI. See attached letter.} This housing afl+ordability issue has been raised by OCHLT in fihe past and was one of the subjects of discussion by the 2008 Land Trusfi Affordability Housing Maintenance Task Force fihafi issued its final report in September 2008. Afi that time, fihe Task Force agreed fihe current and projected stagnant rate of increase in fihe AMI would cause many homes iti the inventory fio become unaffordable fio many families earning less than 80% AMl and thus recognized fihe potential need in the future for additional subsidies to reduce the purchase price. At this time, oGHLT is not asking for additional subsidies, but is asking that fihe target population be broadened for fihe resale of these homes. FINANCIAL IMPACT: None. z RECOMMENDATIONS}; The Manager recommends approval of an amendment to the Development Agreement between orange County and orange Community Housing and Land Trust ~oCHLT~ and EmPOwERment, Inc. dated October 25, ~OO4 for homes built in the Northside neighborhood in the Town of Chapel Hill and authorize the Manager to execute the amendment upon approval of the County Attorney. 0 RE'C'D MAR 2 U 2005 ~. C?RANGB COMMUNITY HUUStNC W LAN1J TRUST #3oa~d o~ Direc#a~s Jirr~ ~"rtck~r President h~'rtr~ Bs~cttsclr Vice President Lrsr~ ~nrrrnM Secretary Mr'clrrred Hrrnsert Treasure~~ ~ohrt Coverer L~t~~'in Easy{iarrt Gory Gates Jcrct~~~et~r~ fist I~rrr~r Hc~xntrrr~er Brir~~ Lo~uert Brtccc 1~rsnt~erg Mrrr~ peon Se~~trr jvrirr~hctrt irV'eire~~ Rvtrert t]owtir~g Executive Di~~ectar Funding Provided by; r~~~rt ~}' ~~~~~~ H~~tt Qr~rrge ~'vu~r~~ To~vrx a f C~rriiora To~t~rr of Hittstrorougt~ PQ Box 3D7 ~~~ ~nnes Ferry Rand 5u1#e ~ ~Ca~r~rbnz~o, N~ 2751D 9~9.9~7.~5~5 Fax 9~9.96S.4DS0 www.ocl~i~,o March 8, ZOOS Tara Fikes pausing and Co~nmunlty Development Grange County FG Box Sl Sl ~illsba~•ough, NC 27278 Re: 503 S kes Street and 329 and 33 North Graham Street Dear Taxa: As we have discussed, tl~e owners of SO3 Sykes Street and 229 North Graham St. have informed us that they both wish to sell tl~ei~• homes, ~V'hen the develapnaent ag~•eement for these pro~ettie was executed in 202 by 1-mpowerment and Grange Cam~nunity Housing and Land Trust, it stipulated that the ~naxinaum income 'far buyers would be ~~% of median incoane ~AMI} or less. we are requesting that the income limit for these han~es aid far ~~xe han~e at 23l North Grah~a~n ~~, be raised to 80% of median for the following reasons ~ Land Trust home prices increase every year as do property taxes and homeowners insurance. As a result, purchasing one of our homes requires mare income every yeat•, ~ HUD income limits have not increased since 203, which has capped the incomes of the families to whom we sell our l~o~nes. To better maintain ou~• homes over time, we instituted a ~nanthly stewardship fee. This foe fut~the~• xeduces tl~e affordability of our housing stack. For ail these t~easons, the homes at SQ3 Sykes, 229 N Graham and 231 ~I. Graham are no longer affordable to families warning less than. ~O% of ANIx. we believe each of these homes should be affordable to families earning less than 8O% of n~edtan income. The owners of 5~3 Sykes and 229 N. G~•ahaxn would like to sell their hanaes in May, f we receive approval to increase tie ~naxinaurn income limit, it would help u to resell these p~~aperties without using additional subsidy, Please let me know ~if you need additional inforxnatian• Thank you for your assistance. Sincerely, ,, % r ~ ~~ I '~ .~ ' f,~ ~1 r~'`~~r r~ `al vVV tt,,.. Robert Dowling Executive Di:reCtor . NORTH CAROLINA ORANGE COUNTY AM~ND:NI~NT TG D:~VFLOPNIENT AGR~~MENT This is an amendment to the (]c~ober 25, 2044 AG~~MENT ~"the Development Agreement"} between GRANGE C(IUNTY, a general local governmental unit of the State of North Carolina, thereinafter referred to as "County" ar "the County"} and EmP[lwERment, Inc., a North Carolina nonprofit housing organization thereinafter referred to as "EmPOwER,n~.ent"} and URANGE CU.~i.1~1VIUNITY I~(lUSING AND LAND TRUST, a North Carolina non-prof ~t housing organization thereinafter referred to as "OCHLT"}. The effective date of this amendment is wITNESSET~I w:13ER1~',AS, the County and E~~nPOwERment and OCHLT entered into a Development Agreement dated October 2S, 2004 for construction of three ~3} homes, one each at 229 & 23 N. Graham Street and Sa3 Sykes Street in Chapel Hi11 for sale to first-time homebuyers; and w~HF,R:EAS, lEnaPOw:l~R.ament and OC13LT has requested that the income limits of eligible homebuyers in the original Agreement be increased due to a rising house prices and a stagnant area median income; NO~w, THEREFORE, in consideration of the mutual covenants, promises and representations contained herein, it is agreed between the parties hereto that all of the terms and conditions of the Development Agreement are herein reaff rmed and incorporated herein by reference and amended as follows: Paragraph 3 of the Recitals of the Development Agreement is rewritten to read as follows: w~ER.I~AS, I~mPOwLRment proposes to construct three ~3~ homes, one each at 229 ~ 231 N. Graham Street and Sa3 Sykes Street in Chapel Bill, hereinafter referred to as the Property, for first-time homebuyers earning less than SO% was 60%} of the HUD area median income; and 0 ~ WITNESS wHERE~F, the parties hereto, intending to be legally bound, have set their hands and seals on the day and year first above written. CC~IINTY ~F [IRA-NGE, NC~RTI3 CARULINA Laura E. Blackmon, County N~anager ATTEST: Donna Baker Clerk to the Board of Commissioners Approved as to form and legality Geoffrey Gledhill, County Attorney This document has been preaudited in accordance with the N.C. Local Government and Fiscal Control Act. Gary Humphreys, Finance Director Grange Community ,I~ousing and Land Trust, Inc. , president ATTEST: Secretary EmP®V'~ERment, Inc. president ATTEST: , Secretary