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Home My WebLink AboutAgenda - 05-17-2005-5oORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: May 17, 2005 Action Agenda Item No.rj < (, SUBJECT: Project Modification - EmPOWERment, Inc. DEPARTMENT: Housing/Comm, Development PUBLIC HEARING: (Y!N) No ATTACHMENT(S): Letter from EmPOWERment, Inc. INFORMATION CONTACT: Tara L. Fikes, ext. 2490 TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To consider approval of request to modify a FY 2001 Housing Band Project awarded to EmPOWERment, Inc, to allow sale of homes to persons earning up to 80% of area median income. BACKGROUND: On May 20, 2003, the Board of County Commissioners awarded $90,000 in Housing Bond fiands to EmPOWERment, Inc, to assist in construction of three single-family homes in the Northside neighborhood of Chapel Hill, In the original application, these homes would be sold to first-time homebuyers earning 60% or below of area median income, One of those homes has been built on Sykes Street in Chapel Hill and scld to a family earning less than 60% of area median income. In planning for construction of the remaining two houses, EmPOWERment has encountered significant increases in project development and construction costs as outlined in the attached letter, Thus, the organizaticn is now asking for permission to sell the remaining two homes to be constn~cted to persons earning 80% of the area median income. It is important to note that the Bond Program Evaluation Criteria includes an Income Targeting section where applicants may score a maximum of 25 paints depending on the income range targeted in the proposed project. The project as originally proposed scored 20 paints in this area, The requested change to serve those at 80% and below of median income would score 15 points out of a possible 25 points. Staff does not consider the loss of five (5) points as significantly altering the original recommendation for funding, FINANCIAL IMPACT: None. RECOMMENDATION(S): The Manager recommends approval of request to modify a FY 2001 Housing Bond Project awarded to EmPOWERment, Inc, to allow sale of homes to persons earning up to 80% of area median income. r~ r~ ~ 2 ' R~C'D FFB ~ /_- 2Q05 EmPOWERment -g the POWER of our Communities BOARD OF DIRECTORS Matthnv Feamny~ton, President FebIUary 9, 2005 1Joyd Slra1 NrighbarbooJAr.roria7ion Jane Farrar, ViccPresident Narl6nde GommuniryA.troriatian Tara Fikes, Director 2obin Rankin, Treasurer Nan'bnrfe Communiry.~l.rraaa7ion Orange County Housing and Community Development P.O. Box 8181 Phil Smith, Secwmry C6rrpel Hill Pa/ire Drparrmenl Hillsborough, NC 272'18 Donna Bcll Nmtbaidr Community IY~utrG ~~ Requested modification to EmPOWERment, Inc.'s 2002 Orange County Betsy fockmm ChaJbam Connry Hmrring Anlbmiry Affordable Housing Bond Requirements Barbara Fo+ygic Nmtbr/de Communiy AJ/arratian Vivian S Foushce, Aast President Dear Tara: Norl6ride Camnurniry Ar.raaalian Jacqueline E Overton, M Ed EmPOWERment, Inc, is formally requesting for a change to our 2002 Affordable CEO, fOI UnG'mitrd Housing Bond requirements to allow for homebuyers eazning up to 80% of the Area cesaa Steele Median Income to purchase homes that will have 2002 Affordable Housing Bond Norfbti& Cnmmrmrry lValrb funds included, According to our 2002 Affordable Housing Bond Application STAFF EmPOWERment, Inc, proposed to build three new construction affordable homes in Delores sailry the Sykes Street azea of Northside. The three homes would be sold to Orange Co-Dirzrlor Community Housing and Land Trust (OCHLT) with the $90,000 in Affordable Je(r C:dnln Housing Bond funds being applied as a grant to OCHLT in the purchase of the Co-Dmdor homes. OCHLT would then tum around and sell the homes to low-income MykhacJ Epps households, families earning up to 60% AMI. Program A9unager Beth Flnra Since, our application in 2002 there has been some significant increases in costs. For FinannalMarcagrr one, the predevelopment and site development costs have been much higher than Sharron Reid anticipated because of the rezoning and special use permit process for the 229 N. Hauaing Caurtnlor Graham Street property. In addition, construction costs have increased mazkedly Sam Goodstein over the last three years and we aze projecting an increase of 25-30% from what was Sarra! Ir/ark lntem initially budgeted, Given these costs we dD not anticipate being able to keep the ADDRESS housing price law enough to meet the previously intended goal of selling the homes Nidwny Business Center l09 N Graham st ° to families earning less than 60 /ti AMI. Suite 200 Chapel Hill, NC 27516 Phone: (919) 967-8779 We were fortunate to be able to sell the first home that utilized 2002 Band funds to a Far: (919) 967-0?~o household earning less than 60%AMI-503 Sykes Street was sold in November in fV>fr1lemRn~~'ermcnb nc orn wnvw LmnnwemtCnF nc ore 2004, The 503 Sykes Street lot did not need to be rezoned, and we received a very reasonable bid in mid 2003, a full two years prior to the projected beginning of construction at 229 & 231 N. Graham Street. 3 Another consideration to increasing the eligible percentage of median is the prospect of a decline in the median income for oru MSA, Although HUD has not yet released new income figures far our MSA (the Durham MSA), we are concerned that a decline in the median income will make it more difficult to reach lower income families. I have spoken to Robert Dowling of OCHLT and he is in agreement that in order to ensure a timely sale of the two remaining homes the income requirement needs to be raised to 80% AMI. I am more than glad to answer any question you may have, You can contact me at 919-967-8779, Best Regards, j~ / / `; G Jeff Caiola Co-Director cc: Robert Dowling, OCHLT