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HomeMy WebLinkAboutAgenda - 03-27-2007-8aORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 27, 2007 Action Agenda Item No. _ 'C3! SUBJECT: Orange County Housing Rehabilitation Community Development Block Grant, Program DEPARTMENT: Housing/Comm. Development PUBLIC HEARING: (Y/N) Yes ATTACHMENT(S): INFORMATION CONTACT: Resolution Tara L. Fikes, 245=2490 Application Summary Addendum -Dwelling Units Without Indoor Plumbing P o receive ci izen commen s concerning a propose ousmg Rehabilitation Program Application and approve a resolution authorizing the submission of the formal application document on or about March 30, 2007 and authorize the Chair to sign the application document on behalf of the Board. BACKGROUND: The County was recently notified by the N.C. Department of Commerce - Division of Community Assistance of the award of $400,000 in Scattered Site Housing Rehabilitation funds under the FY 2007 Community Development Block Grant (CDBG) Program. These grants are no longer competitive, and each interested county in North Carolina is scheduled to receive an allocation every three years to provide housing rehabilitation funds for the county and the municipalities within the county. Orange County received $400;000 in housing rehabilitation funds in 2001 and 2004 and is designated to receive funds in 2007. These grant funds must be used to repair substandard housing occupied by low-income families in the Towns of Carrboro and Hillsborough as well as the unincorporated areas of Orange County.. These funds may not be used in the Town of Chapel Hill since they receive Community Development Block Grant funding directly from HUD. In prior years, these funds have repaired approximately 26 dwelling units in the County. A public hearing was held on March 13, 2007 to receive citizen comments regarding the use of these grant funds prior to the development of the application document. After the hearing, County officials discussed this program with Carrboro and Hillsborough members of the Orange County HOME Review Committee. That committee agreed that this program would continue to be an extension of the current HOME funded Housing Rehabilitation Program; thus, the same waiting list anal program eligibility guidelines would be used for both programs. Further, the Division of Community Assistance requires each community to establish a Selection Committee for this grant. The existing Orange County HOME Review Committee will continue to serve in this capacity. FINANCIAL IMPACT: Application for these funds represents an additional $400,000 available for affordable housing initiatives in the County. RECOMMENDATION(S): The Manager recommends that the Board: 1) Receive citizen comments as additional information. 2) Approve the resolution authorizing the submission of the formal application document on or about March 30, 2007; and 3) Authorize the Chair to sign the application document on behalf of the Board. - RESOLUTION AUTHORIZING AN APPLICATION FOR COMMUNITY DEVELOPMENT BLOCK GRANT FUNDS WHEREAS, the County was notified by the N.C: Department of Commerce - Division of Community Assistance of the award of $400,000 in Scattered Site Housing Rehabilitation funds under the FY 2007 Community Development Block Grant (CDBG) Program; and WHEREAS, an application for funding must be sent to the Division of Community Assistance on or before March 30, 2007 in order to receive the funds; and WHEREAS, grant funds must be used to repair substandard housing in the Towns of Carrboro, Hillsborough, and unincorporated Orange County; and WEIEREAS, these towns have expressed an interest in participating in this program with the County; and WHEREAS, there is agreement that this program will operate as an extension of the current HOME funded Orange County Housing Rehabilitation Program utilizing its waiting lists and program eligibility guidelines; NOW, THEREFORE BE IT RESOLVED by the Orange County Board of Commissioners, that an application for FY 2007 Scattered Site Housing Program grant funds under the North Carolina Small Cities Community Development Block Grant funds is hereby authorized. The funds requested will be used to repair approximately fifteen (15) substandard dwelling units in the Towns of Carrboro, Hillsborough, and unincorporated Orange County. The amount of the. request will be $400,000. The application will be submitted on or about March 30,.2007. FURTHER, the Orange County Board of Commissioners authorizes the Chair of the Board to sign the application document on the County's behalf. This the 27t" day of March 2007. 4 Application Summary FY2007 Orange County Housing Rehabilitation Program Background Orange County has received a Community Development Block Grant (CDBG) award in the amount of $400,000 from the N.C. Department of Commerce -Division of Community Assistance. These grant funds. must be to used to repair substandard housing occupied by low-income families in the Towns of Carrboro and Hillsborough as well as the unincorporated areas of Orange County. Approximately 10% of the award can be used for program administration, thus, effectively $360,000 will be available for housing repair. The Program Selection Committee, as with the FY 2001 and 2004 Scattered Site Grant Applications, consists of the HOME Program Council members from Carrboro, Hillsborough, and the County. This Committee discussed the policies and procedures that should govern this program and agreed that the policies and unit selection process will closely mirror those utilized in the current HOME funded Housing Rehabilitation Program. Program Policies Eli iq bility Criteria 1. The applicant must be the Owner of the residential property located in Orange County but outside the corporate limits of the Town of Chapel Hill. 2. The applicant must have total household income at or below 50% of the HUD published area median income. 3. The property must not have received assistance for housing rehabilitation during the previous 15 years. 4. The property must need repairs to meet the Minimum Housing Code.. 5. The applicant shall have evidence of title to the property to be rehabilitated. 6. The applicant shall have paid all due property taxes. Participant/Household Selection Program participants will be selected from the existing Housing Rehabilitation Program waiting list according to date and time of waiting list placement. There are approximately 26 families. on the waiting list at this time. In selecting participants, priority will be given to owners that lack indoor plumbing or have plumbing deficiencies, or are elderly or disabled. The Selection Committee will prioritize the potential applicants and County staff will determine eligibility based on the above stated criteria. No extensive program marketing is anticipated at this time since the number of families on the waiting list at the present time far exceeds available resources. Terms of Assistance All CDBG financial assistance will be in the form of a deferred loan that is proportionally forgiven over the applicable term of recapture. CDBG Assistance $15,000 and less $15,000 and $25,000 $25,000 and above Recapture Period 5 years 10 years 15 years 5 All deferred loans will be secured with a note and deed of trust recorded in the Orange County Register of Deeds. Target Number of Substandard Units This program will target the repair of an estimated 12 substandard dwelling (Four (4) units in each jurisdiction) at an average cost of $30,000 per unit. No clearance or relocation activities will be necessary. Budget Housing Rehabilitation $360,000 Program Administration $ 40,000 Program Schedule Begin program implementation January 1, 2008 Complete program by December 31, 2010 6 Addendum - Dwelling Units without Indoor Plumbing There is no definitive method available to determine the absolute number of dwelling units in Orange County that lack indoor plumbing. This is due to several factors including: the absence of a systematic residential inspection program countywide; the reluctance of some homeowners to disclose the lack of indoor plumbing due to embarrassment; and the desire of some owners to continue to live in dwelling..units without indoor plumbing. Nevertheless, the 2000 Census data reports that there are approximately 297 dwelling units in the County without indoor plumbing. This number represents .60 percent of the total number of dwelling units in the County - 49,289. It should be noted that in the 2000 Census did not ask all households questions about indoor plumbing, instead 1 in 6 households completed the "long" questionnaire that contained questions about plumbing. Further, the Census data does not indicate the exact location of these units. All County Housing Rehabilitation Programs have as a priority the installation of water and sewer systems in units where the plumbing is inadequate. This continues to be a priority, however, due to some program constraints, it is becoming more and more difficult to actually address this unit deficiency efficiently for the following reasons. Pros: 1. Improved health and safety of county residents 2. Environmental contamination runoff 3. Increased property value Cons: 1. Average well/septic tank system installation costs approximately $10,000-with additional costs necessary for in-house plumbing. For connections to existing water/sewer system that costs can average $2,000 per unit including applicable connection fees. 2. Most dwelling units that lack indoor plumbing are severely deteriorated and are costly to repair. Many also require the addition of a room for bathroom facilities. These costs often exceed federal and state program funding limits. In some cases it is considered hazardous work for local contractors. 3. In the unincorporated areas, soil availability and suitability for conventional wells and septic systems can be a challenge. 4. Some alternatives to conventional septic systems require annual maintenance checks -the costs of which would be a responsibility of the homeowner. 5. Connections to existing water/sewer systems create new monthly expenses that can stretch the budget of low-income persons. Notwithstanding, the Housing/Community Development Department continues to prioritize treatment of these dwelling units as financially and structurally feasible.