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Home My WebLink AboutAgenda - 06-21-2011 - 5vORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: June 21, 2011 Action Agenda Item No. 5- ~/ SUBJECT: Community HOME Trust -Request to Increase Income Requirements DEPARTMENT: Housing, Human Rights, and PUBLIC HEARING: (Y/N) No Community Development ATTACHMENT(S): Letter from Board President INFORMATION CONTACT: Tara L. Fikes, 245-2490 PURPOSE: To consider supporting a request by the Community HOME Trust to increase the target population of those served by its programs from 80% of area median income to 115% of area median income. BACKGROUND: On or about February 25, 2011, the Board of Commissioners (BOCC) received a letter from Mary Bratsch, Board President of the Community HOME Trust (CHT) regarding CRT's interest in serving families up to 115% Area Median Income (AMI) and asked whether the BOCC could support this change. Currently, the organization's homeownership programs serve families with incomes up to 80% AMI. An illustration of the current HUD AMI schedule is included in the attached letter. This modification in the target populations was initiated by the Chapel Hill Town Council in 2010 because CHT implements the town's Inclusionary Housing Program that requires developers to provide housing affordable to low-income populations in new housing developments. The Town Council introduced this subject in order to increase the pool of potential homebuyers because there is a belief that some local families were prohibited from participating in the program because their incomes exceeded the 80% level. These families included those of school, university and local government employees. The Affordable Housing Advisory Board (ARAB) has reviewed this request and recommends that the BOCC support the proposed change with the following conditions. First, CHT should provide statistics regarding the proposed "mix" of clients that it plans to serve each year, e.g. percentage at 80%, at 115%, etc. And, secondly, ARAB reiterated that no subsidies should be provided for homebuyers with incomes above 80% AMI. (Federal and state programs currently prohibit serving families at this level, but ARAB wanted to recommend that local (County) funds also not be used for those above 80%AMI) FINANCIAL IMPACT: None. RECOMMENDATfON(S): The Manager recommends that the Board support the request by the Community HOME Trust to increase the target population of those served by its programs from 80% of area median income to 115% of area median income with the following conditions: 1. Community Home Trust must provide an annual report that includes statistics regarding the number of families served and their total annual income in relation to the HUD median income; and 2. No subsidy dollars (federal, state or local) should be provided for homebuyers with incomes above 80%. r ~~;,,~~ - ~.~. ~ ,~ ~.~ ~, ~ U!~?~!'1G~~l~l ,~~ BOARD OF DIRECTORS Maly Bratsch ' President Lisa Inman Yice President Bruce FLunberg Secretary Mary jean 5eyda Treasurer February 2S, 2011 Chair Pelissier and Members of the Board of County Commissioners PO$ox8181 ~ - Hillsborough, NC 27278 - . Dear Chair Pelissier and Members of the County Commission: In 2010, the Chapel Hill Town Council asked if the Community Home Tnist would consider serving households at income limits that extend higher than our current income limits. We respectfully request the Board of County Commissioners to determine if you support an increase in our income limits as discussed below. ' As background, Community Home Tnzst is a nonprofit provider of affordable homeownership opportunities in Chapel Hill and Carrboro, We implement inclusionary housing programs, in which developers are asked to provide housing .that is affordable to low-income households inmost new.developments. Low income is defined as 80% of the area median income (AMI), which is established each year by the U.S. Department of Housing and Urban Development {HUD). •• The Town Council asked that we consider serving higher income households in part to better serve public sector employees whose incomes exceed our ailtiwable limits: At'dur ciiri-ent income limits, these einployees~and their families frequently do not qualify for the affordable homes that are created through inclusionary housing policies.,,• . ., • • •~ _ . Cresha Cianciolo Working with UNCs Community Development Law Clinic, we determined that • we can.serve households up to 1159b AMI without jeopardizing our 501(c)3 status. John Cooper The chart below provides the HUD income limits at 80%, 100% and 115% AMI. Jacquelyn Gist ' - 2010 HUD Income Linnits . Eric Hallman - - Michael Hansen Pam Hemminger Alan Lee Gene Pease Jonathan Weiler Executive Director Robert Dowling HH size 115% 100% 80% 1' 2 3 4~ 5 $S4 625 $62,388 $70,222 $77,985 $84,23 :_-~ = $47,500 ~ .. ~~ $54,250 ,.:. $61,063 $67,813 =.. $73,250 $38,000 ~ $43 400 $48,850 $54,250 $58,600 As you can see from the chart, the income limits are established by household size. Using a household of four as an example, a family at 80% of AMI can only earn up to $54,250. That same family. of four could earn up to $77,985 if we can sell homes up to 115°rb AMI. It is important to realize that a household of four can be eithe"r a single parent with three children or two parents with two children. - ' 3 P.O. Box 307 Carrboro NG 27510 (919-967-1545 `° ~ - ` r r °,r,~~f r~ `~ y 1 Lr e r r~~ r3 .'F 4 By adoptsng this change the Home Trust will be able to serve more Families of public sector employees. For example, in the Chapel Hill Carrboro school district, a representative.salary for a teacher.with five years experience is approximately $36,500. Today, a family of two teachers with two children earns far too much income to buy a home from us. However, if we begin serving households a# t s s°1° AML, they wfll be eligible to purchase a Home Trust home. This is an important change for the Home Taut, and one that we are considering from several angles. It is -important to note that even if the Home Trust board decides to make this change, only a small portson of our work would be with households over 80% AMI. The vast majority of our work wil[ continue to be with households earning no more than 80°6 of AML. It is also important to realize that households who earn -more than 80% AMI are not eligible~for subsidy funds. In fact, by serving higher income households, we are able to use our subsidy funds more efficiently. We recognize that this discussion can become very technical, so if it would be helpful, our executive director, Robert Dowling, would be happy to come before the Commissioners to respond to any questions you may have. Lastly, -if the Board of County Commissioners and other community stakeholders support this change and it-is adopted by th4 Home Tnzst board, we would ask For your assistance in communicating this revised policy to county employees. Our objective is to be sure that your employees and all public sector employees who work in Orange County are aware of the housing opportunities we offer. We would appreciate receiving a letter from the Commissioners indicating whether you support this proposed change. _ Thank you Eor your attention to this request. Sincerely, ~. ~~~ Mary E. ratsch $oard President ~~ U ~~ ~~ ~~r ~~ P.O. Box 307, Carrbaro, NG 27510 1 919-967-1545 ' ~;" .:' "` s'~ ` ~. ~ ~~~ ~'t~