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HomeMy WebLinkAboutAgenda - 02-07-2001-7aORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: February 7, 2001 Action Agenda Item No. -7-4 SUBJECT: Orange County Consolidated Housing Plan Update DEPARTMENT: Housing/Comm. Development PUBLIC HEARING: (YIN) Yes ATTACHMENT(S): Executive Summary Application Form 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 receive comments from the public regarding the housing and non-housing needs to be included in the 2001-2002 Annual Update of the Consolidated Housing Plan for Housing and Community Development Programs in Orange County and proposed uses of 2001-2002 HOME funds. BACKGROUND: In May 2000, a Consolidated Plan for Housing and Community Development Programs in Orange County was developed and approved by the U.S. Department of Housing and Urban Development (HUD). This document details the housing needs of very low income, low income and moderate income families and special population groups in addition to outlining the strategies and plans for addressing those needs. Each year, local communities are required to reassess the needs of the community. This public hearing provides an opportunity for citizens, public agencies and other interested parties to provide input into the Annual Update. In addition, the public is asked to comment on proposed uses of approximately $484,000 in 2000-2001 HOME funds. Eligible HOME Program activities include: acquisition; new construction; housing rehabilitation; and rental assistance. This year, the HOME Program Review Committee has designed an application form for persons interested in accessing HOME funds for local housing projects. A copy of the application is attached to this abstract for information. The deadline for completing this application form is February 23, 2001. The Review Committee will then review the applications received and make recommendations regarding funding for consideration by the local elected bodies.in April 2001. In order to inform the general public of this opportunity and encourage participation, notices have been placed in the Chapel Hill Herald and sent to local non-profit agencies. FINANCIAL IMPACT: NONE RECOMMENDATION(S): The Manager recommends that the Board receive comments from the public as additional information. 2 Orange County, NC Consolidated Plan for 2000-2005 Executive Summary Background Located in North Carolina, Orange County includes not only the towns of Carrboro and Hillsborough, but also Chapel Hill, the home of the largest campus of the State university. The presence of university students, more affluent and transient than other county residents, has created an imbalance in terms of housing and community development needs. Orange County must, therefore, concentrate its efforts on serving a strong urban community and rural areas as well. The important housing issues in Orange County have not changed. The high cost of homeownership has left many families out of the housing market or sent them to surrounding counties to buy homes and commute into Orange County for work. The rental market, inflated by the ability of UNC-CH students able to pay higher rents, is beyond the means of families with incomes below 50% of the area median. For families in need of three or more bedrooms, very little housing stock exists. The number of women and children staying at the homeless shelter continues to increase dramatically, and transition from the shelter into permanent housing in Orange County is nearly impossible since no transitional housing exists. Housing for special interest groups such as the elderly, persons that are developmentally disabled, and persons with alcohol or drug addiction, is limited in Orange County. Community Profile Orange County, North Carolina includes the incorporated Towns of Carrboro, Chapel Hill, and Hillsborough„ and is the home of the largest campus of the State university system - the University of North Carolina at Chapel Hill. The County is a part of the Raleigh-Durham- Chapel Hill Metropolitan Statistical Area (MSA) that comprises six counties in the Research Triangle Area with a population of 1.1 million people. The region is highly rated as a place to live and do business. In addition, Orange County, in particular, has the most expensive cost for new housing in the region and Chapel Hill is among a few larger cities in the state rated high on the cost of living index. Further, the County enjoys a low unemployment rate of approximately one (1) percent. These "firsts" present a, challenge in addressing the housing needs of Orange County residents. In 2000, the population of Orange County is estimated to be 111,982. That represents a 19% population growth since 1990, with an anticipated growth of 8% through 2005. Of that number, approximately 77 percent were White, 16 percent were African American, and 7 percent were of other minority groups including American Indian, Asian, and Hispanic. The fastest growing segments of the population are of Asian and/or Hispanic descent whose population has more than doubled since 1993. Further, it is estimated that approximately 12,280 of all households in Orange County (44,854) 3 were considered very low income, with incomes between 0-50 percent of median family income (MFI). HOUSING AND COMMUNITY DEVELOPMENT NEEDS Conditions The high cost of homeownership has forced many families to purchase housing in other counties and commute into Orange County for work. The inflation of the rental market by University of North Carolina-Chapel Hill (UNC-CH) students has caused hardships for families with incomes below 50 percent of MFI. Larger rental units are particularly scarce. Market Conditions According to the Orange County Economic Development Commission, the average new home sales in 1999 was $247,661, and for an existing home the price was $200,601. To purchase this new home a low income family of four persons would have to spend approximately 7.9 times their annual wages. For an existing home, the family would have to spend approximately 6.4 times their annual wages. In both of these instances, the low-income family need to have more money than they earn and is certainly well above the HUD standard for affordable housing. (U.S. Department of HUD standards define affordable owner occupied housing as purchasable at 2.5 to 3.0 times total family annual income.) The rental housing market, inflated by the ability of University of North Carolina at Chapel Hill students able to pay market rents, is beyond the means of families with incomes below 50% of the area median. In 2000, it is estimated that rental units represent 43% of the county-wide housing market and approximately 67% of those rental households experience an extreme cost burden - paying between 30% to 50% of their income for rental housing. Each year, HUD publishes existing housing Fair Market Rents (FMRs) for metropolitan areas and non-metropolitan counties in the country. These FMRs are based on the fortieth percentile of standard quality rental units occupied by recent movers. Public housing units, newly constructed units, and substandard units are excluded from the calculations. FMRs are established by unit size (number of bedrooms) and include an allowance for utilities. Experience in Orange County has shown that local rents often run an average of 15 to 20 percent higher than those HUD published rates, which explains why such a high percentage (35%) pay more than 50% of their income for rental housing costs. For families earning 80% or more than the County median monthly family income of $4,022 renting a multi-bedroom apartment is relatively easy given that they are able to locate units with 3 or more bedrooms. Larger apartments are in relative scarcity because the rental market is oriented toward providing student rental housing. The most recent County data estimates that 24% of the County's rental properties contain three or more bedrooms. For families earning 50% or less than the median monthly income the primary concern is not finding a rental unit but rather affording one. In 2000, the upper level income limit for a low- income family of four was $29,740. For these families renting a three bedroom dwelling unit in 4 the County, or at a minimum, a two bedroom apartment in Chapel Hill the same set of families would have to spend at least 37% of their monthly income. In both instances, these families would have to spend more than 30% of their gross monthly income on rent. US HUD standards define affordable as occurring when a renter spends no more than 30% of their gross monthly income on total housing cost (rent & utilities). Affordable Housing Needs According to the 1990 census, Orange County had the highest percentage of very low- income households with housing problems in North Carolina; 77 percent of residents in this category cited cost burden and overcrowding as major issues. In 2000, the County has approximately 12,280 low-income households with a cost burden and overcrowdedness remaining the primary impediments to obtaining affordable housing. Further, according to a 1989 report from the North Carolina Rural Economic Development Center, 1,052 units in Orange County lacked indoor plumbing. The County considers this estimate to be a good approximation of the problem. The lack of affordable housing forced renters to live in substandard units. Housing problems were reported in 86 percent of very low-income households, and 97 percent of large families were forced to live in overcrowded, substandard units. The majority these families were also cost burdened. Homeless Needs The numbers of homeless persons in Orange County have increased dramatically. During fiscal year 1998-1999, the InterFaith Council Community House reported serving 801 individuals, 700 adults and 101 children. Of this number, 535 were African American, 198 were White, and 48 were Hispanic, and 20 of other race and ethnicity. The IFC Community House is the only emergency housing resource for families in Orange County. The greatest increase in the homeless population in Orange County continues to be women, children, and families, frequently victims of domestic violence. Thus, the opening of Project Homestart last year was welcomed into the community. Project Homestart is a transitional housing program for homeless families that provides a structured setting for families to receive support before they live independently. Public and Assisted Housing Needs Orange County's only conventional public housing program consists of 336 units. The majority of Chapel Hill's public housing units are two- and three-bedroom units and are located in Chapel Hill except for one community in Carrboro. The county's Section 8 program, administered by the Orange County Housing and Community Development Department, included 623 vouchers. There are an additional 543 other assisted housing units in the County that have benefited from the HUD Section 202 Program; the Low Income Housing Tax Credit Program; the Farmers HOME 515 Program; the HUD Section 236 Loan Management Program; the Section 8 New Construction Program; and the HUD Section 811 Program.. Barriers to Affordable Housing 5 The Consolidated Plan for Orange County identifies the following barriers to affordable housing: High cost of public improvements. In most of southern Orange County, there is virtually no vacant land available that is served by public utilities. In unincorporated Orange County, although land accessible to urban services is available, the cost of extensions is expensive. Also, many existing residences lack adequate plumbing facilities due to the high cost of public utility connections. Lack of adequate transportation. While the public transportation system in the Chapel Hill-Carrboro urban area is comprehensive, access to jobs and facilities outside the urban area are limited by a lack of transportation. Many of the people who work in Orange County live in neighboring counties, partly by choice and partly as a result of an inability to find affordable housing in the County. High cost of rental housing. The rental housing market, particularly in Southern Orange County continues to be inflated by the university students. High cost of homeownership. The average new detached home in Orange County sold for nearly $247,661 in 1999. That is approximately $100,000 more than what a family of four at 100 percent of median income could afford. Fair Housing Analysis of Impediments/Action Plan Impediments: The Sale or Rental of Housing Public Policies Administrative Policies Residential Segregation Fair Housing Education Based on the analysis, the following recommendations are offered to promote fair housing within the jurisdiction. ? Providing one-on-one consultation to landlords to encourage participation in the Section 8 Housing Assistance Program. Working with the university to promote development of adequate campus housing in order to free-up local rental units and make them more affordable. 6 Working with HUD to ensure that fair market rents reflect actual market rents in Orange County. ? Meeting with local bank executives to formalize participation in public-private partnerships that further housing opportunities. Creating public policies that link public deposits to financial institutions that commit to meeting community reinvestment needs of the County. Developing reasonable evaluative criteria and producing an annual report for the Board of County Commissioners on lending practices by financial institutions and ceasing to do business with institutions failing to employ inclusive lending practices. ? Building incentives and proscriptions into Orange County regulations for planned unit developments that promote affordable, non-segregated housing. Studying and promoting other land use strategies that encourage development of affordable housing. ? Increasing educational opportunities through fair housing workshops, forums and presentations. ? Adding source of income, (e.g. elimination of any differentiation between wages or Social Security or disability benefits, etc.) to the list of protected classes under the Orange County Civil Rights Ordinance. ? Conduct fair housing testing to ensure compliance with the Ordinance. Lead-Based Paint According to the 1990 census, 22,653 very low- and low-income housing units in Orange County built between 1960 and 1979 were contaminated with lead-based paint. Of this number, 10,236 were rental units and 12,417 were owner occupied. (No new data is available at this time.) Evaluations of the prevalence of lead-based paint in housing units will be conducted through Orange County by project, and lead abatement will be prescribed for all dwellings targeted for rehabilitation. In addition, all assisted-housing tenants will be informed of the hazards of lead based paint. The Orange County Health Department provides ongoing consultation to local housing staff. Community Development Needs 7 Orange County has identified the need for increased economic development opportunities for low and moderate-income citizens and revitalization of businesses serving low-income neighborhoods in Chapel Hill. Anti-Poverty Strategy In a recent update to the County's Work First Plan, a subcommittee of the Welfare Reform Task Force, Strengthening Independence, was charged with identifying strategies and resources for Work First families that will enable them to increase their income and to become self-sufficient. As a part of their work, this.committee identified the lack of affordable housing for those in the lowest income ranges as a major impediment to building self-sufficiency. They identified the following strategies to address this situation. 1. Build, renovate, or designate existing affordable housing and rental units for which preference is given to families who are engaged in a self-sufficiency program that provides job skills, employment counseling, entrepreneurship training, money management, and other social supports. 2. Increase availability and access to affordable rental housing and to special incentives and home mortgage loans in the primary market at rates attractive to buyers in this income group. 3. Advocate among policy makers, housing organizations, and funding sources to limit undue analysis of the need and to place emphasis on action. Coordination of the Strategic Plan Through the Orange Community Housing Corporation, Habitat for Humanity, EmPOWERment, Inc., and other non-profit organizations, Orange County, Chapel Hill, Carrboro, and Hillsborough work in collaboration to implement the plan, as follows: 1. The Chapel Hill Planning Department administers the CDBG program. 2. The Orange County Housing and Community Development Department administers Section 8 program and serves as the lead agency for the Orange County HOME Consortium, which includes Orange County, Carrboro, Chapel Hill, and Hillsborough, and administers the County-wide Housing Rehabilitation Program. 3. The Chapel Hill Department of Housing operates public housing in Chapel Hill and Carrboro. 4. The Town of Carrboro administers the Carrboro CDBG Small Cities program. 5. The Hillsborough Planning Department is responsible for planning and policy development for the town, including the recently adopted 2010 plan. Orange Community Housing Corporation, Habitat for Humanity, EmPOWERment, Inc., and other non-profit organizations carry out direct housing activities, i.e. new construction, rehabilitation, etc.. 8 HOUSING AND COMMUNITY DEVELOPMENT STRATEGY Housing Priorities The Consolidated Plan for Orange County identified the following housing priorities for 1995-2000. • Provide rehabilitation assistance for very low- and low-income homeowners and renters. • Reduce the number of owner-occupied and rental housing units without indoor plumbing. • Provide assistance to households at less than 80 percent of MFI to connect to existing public water and sewer systems. • Facilitate the construction of new or substantially rehabilitated housing units that are affordable to families below 80% of the area median. • Facilitate the construction of rental housing affordable to very low and low-income families. Priority will be given to projects participating in the Low Income Housing Tax Credit Program, with at least three bedrooms. • Create transitional housing units for homeless individuals and families. • Assist local nonprofit human service agencies to provide a continuum of housing options for special populations, including older adults, disabled, mentally ill, and persons with AIDS. Non-housing Community Development Priorities The Consolidated Plan for Orange County identified the following community development priorities: Provide economic development opportunities to low- and moderate-income citizens in Chapel Hill. Revitalize the business areas serving low-income neighborhoods of Chapel Hill. 9 County, NC Applications are due February 23, 2001. Please mail to: Tara Fikes, Orange County Housing and Community Development Department, PO Box 8181, Hillsborough, NC 27278 APPLICANT INFORMATION 1. Lead Organization: 2. Partner Organization (if any): 3. Address: 4. Phone: 5. E-Mail: 6. Contact. 7. Federal I.D. #: PROPOSED PROJECT 8. Please attach a brief description of the proposed project, including an explanation of how funds will be used for and the specific population and/or area that will benefit from this project. Two important criteria for judging applications will be the degree to which projects satisfy HOME Program goals as well as the priorities of the Consolidated Plan for Housing and Community Development Programs in Orange County (see following pages for descriptions). ADDITIONAL INFORMATION 9. Is organization operated as a profit or nonprofit agency? If nonprofit, please submit copy of 501(C)(3) documentation and a current list of Board members. 10. Amount of funds requested: 11. Total project costs: Please attach project budget, including sources you intend to apply for and uses. 12. Are all funding commitments in place for the project? Please attach commitment letters, if available. 13. Number of people to be served: 14. If a housing project, number and type of units created: 15. If project targets beneficiaries of a certain income level, please describe: lb. What is the timetable for project completion? 10 The HOME PROGRAM In 1990, Congress enacted the HOME Investment Partnerships Act, better known as the HOME Program, in an effort to provide a new approach to housing assistance at the federal level. This federal housing block grant would afford state and local governments the flexibility to find a wide range of housing activities through creative and unique housing partnerships among states and localities, private industry, and nonprofit organizations. In order to receive future HOME Program funds, each housing activity must fall in line with the following goals of the HOME Program: 1. To expand the supply of decent, safe, sanitary and affordable housing, with emphasis on rental housing, for very low- and low-income citizens; 2. To strengthen the abilities of state and local governments to design and implement strategies for achieving adequate supplies of decent affordable housing; and 3. To encourage public, private and nonprofit partnerships in addressing housing needs. Eligible activities for HOME Program funding include (from the Federal Regulations): • Acquisition of property (including assistance to homebuyers); * New construction; • Reconstruction; • Conversions; • Moderate rehabilitation of non-luxury housing with suitable amenities; • Tenant-based rental assistance; • Relocation of displaced persons, families, businesses, or organizations; • Site improvements, acquisition of vacant land and demolition (under special conditions); • Project soft costs; • Administration / planning; and + Operating expenses for community housing development organizations. 11 CONSOLIDATED PLAN FOR HOUSING AND COMMUNITY DEVELOPMENT PROGRAMS IN ORANGE COUNTY The Department of Housing and Urban Development (HUD) requires jurisdictions to submit a Consolidated Plan for Housing and Community Development Programs along with their applications for funding. The purpose of the Consolidated Plan is to analyze and propose solutions to the most pressing housing and community development issues of the community. The FY 2000-2005 Consolidated Plan for Housing and Community Development Programs in Orange County, N.C. identifies the following priorities: • Provide rehabilitation assistance for very low- and low-income homeowners and renters; • Reduce the number of owner-occupied and rental housing units without indoor plumbing; • Provide assistance to households at less than 80 % of MFI to connect to existing public water and sewer systems; • Facilitate the construction of new or substantially rehabilitated housing units that are affordable to families below 80% of the area median; • Facilitate the construction of rental housing affordable to very low- and low-income families. Priority will be given to projects participating in the Low Income Housing Tax Credit Program, with at least three bedrooms; • Create transitional housing units for homeless individuals and families; • Assist local nonprofit human service agencies to provide a continuum of housing options for special populations, including older adults, disabled, mentally ill, and persons with AIDS; • Provide economic development opportunities to low- and moderate-income citizens in Chapel Hill; and • Revitalize the business areas serving low-income neighborhoods of Chapel Hill.