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HomeMy WebLinkAboutAgenda - 02-06-2018 6-a - Approval of Transfer of Rental Property from CASA to the Town of Chapel Hill for Continued Affordable Housing UseORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 6, 2018 Action Agenda Item No. 6 -a 1 SUBJECT: Approval of Transfer of Rental Property from CASA to the Town of Chapel Hill for Continued Affordable Housing Use DEPARTMENT: Department of Housing and Community Development ATTACHMENT(S): INFORMATION CONTACT: Sherrill Hampton, 919 - 245 -2490 PURPOSE: To approve CASA's transfer of four (4) scattered site condos in Chapel Hill to the Town of Chapel Hill for continued affordable housing use. The request is being made based on CASA's current Agreement with the County and its requirement for having the Board of County Commissioners' (BOCC) approval when transfers to entities other than a non - profit occur. BACKGROUND: In 2009, CASA assumed ownership of 20 units of scattered -site housing in Orange County when a local non - profit dissolved. CASA collaborated with Orange County to ensure that the units remained in use as affordable housing. CASA undertook extensive interior rehab work on all the units. At the present time, CASA feels that individual condos are not a sustainable model for affordable rentals. In the condo model, the owner does not control the costs of the HOA dues and special assessments or the schedule of preventive maintenance and capital replacements. The current status of the 20 -unit portfolio is as follows: • 1 unit, a single- family home in Hillsborough at 2308 Redbird Lane, was sold to EmPowerment in 2017. As the transfer was to another non - profit, per CASA's current Agreement with Orange County, the Board of County Commissioners did not need to approve the transaction. • 1 additional scattered site condo was also transferred to EmPowerment in 2016. • 3 scattered site condos in Carrboro are proposed to be sold in 2018. • 4 additional scattered site condos in Chapel Hill are to be sold in 2018. EmPowerment is considering the acquisition of these units. • 4 scattered site condos in Chapel Hill are proposed for transfer to the Town of Chapel Hill and are the subject of this Abstract. • 7 units will continue to be held by CASA, including: 0 2 duplexes in Chapel Hill (4 units) 0 2 homes on one lot in Carrboro (3 units) P All properties that are being considered for disposition are small, aging and /or scattered site and are not consistent with CASA's current business model. The proposed disposition allows CASA to capture the value in the properties and reinvest in other rental properties that are more cost - efficient to manage. The disposition also allows for other entities with the correct business model and capacity to take ownership and maintain the units as affordable housing. The proposed disposition of the four (4) scattered site condos to the Town of Chapel Hill is only a transfer in ownership - no sale proceeds will be generated. If the proposed transfer is approved, restrictions regarding "affordability" under the current Agreement will be assumed by the new owner. The units are occupied and the Town intends to keep all current tenants in place. However, when vacancies occur, the Town will utilize the units as transitional housing for families preparing to move out of Public Housing as their economic situation improves. The maximum allowable income for an individual or family occupying the units would be 50% of the area median income (AMI). The Town of Chapel Hill will manage the units, perform annual tenant certifications and conduct routine maintenance. The Town had the units inspected by a licensed home inspection company. All units are in need of some level of rehabilitation, ranging from light /moderate to substantial. The Chapel Hill Town Council has adopted a resolution accepting the transfer of the four (4) units, and authorizing up to $65,000 to be used toward renovation costs and the satisfaction of a private mortgage on the units, if the BOCC approves the transfer. FINANCIAL IMPACT: No negative financial impact is associated with approving CASA's request to transfer ownership of the four (4) scattered site condos to the Town of Chapel Hill. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable to this agenda item: • GOAL: FOSTER A COMMUNITY CULTURE THAT REJECTS OPPRESSION AND INEQUITY The fair treatment and meaningful involvement of all people regardless of race or color; religious or philosophical beliefs; sex, gender or sexual orientation; national origin or ethnic background; age; military service; disability; and familial, residential or economic status. • GOAL: ENSURE ECONOMIC SELF - SUFFICIENCY The creation and preservation of infrastructure, policies, programs and funding necessary for residents to provide shelter, food, clothing and medical care for themselves and their dependents. The creation and preservation of affordable housing options helps to meet a basic need and advances economic self- sufficiency. • GOAL: CREATE A SAFE COMMUNITY The reduction of risks from vehicle /traffic accidents, childhood and senior injuries, gang activity, substance abuse and domestic violence. Affordable housing options allow individuals to reduce risks associated with being un- housed. 2 K RECOMMENDATION(S): The Manager recommends that the Board approve CASA's request to transfer the four (4) scattered site condos to the Town of Chapel Hill. The Manager also recommends that the Board allow CASA to make future transfers of any remaining units to Orange County local jurisdictions without subsequent Board review and approval. Furthermore, the transfer of ownership must allow for continued affordable housing use or meet another identified community need. 3