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HomeMy WebLinkAboutMinutes - 20080909 APPROVED 10/21/2008 MINUTES Orange County Board of County Commissioners (BOCC) Orange County Affordable Housing Advisory Board (AHAB) Joint Work Session September 9, 2008 5:30 pm (Dinner) 6:00 pm (Meeting begins) The Orange County Board of Commissioners met for Joint Work Session with the Orange County Affordable Housing Board on Tuesday, Sept, 9, 2008 at 5:30 p.m. at the Link Government Services Center in Hillsborough, N.C. COUNTY COMMISSIONERS PRESENT: Chair Barry Jacobs and Commissioners Moses Carey, Jr., Valerie P. Foushee, Alice Gordon, and Mike Nelson COUNTY COMMISSIONERS ABSENT: COUNTY ATTORNEYS PRESENT: Geoffrey Gledhill COUNTY STAFF PRESENT: County Manager Laura Blackmon, Assistant County Manager Willie Best, and Deputy Clerk to the Board David Hunt (All other staff members will be identified appropriately below). AHAB MEMBERS PRESENT: Chair Artie Franklin and members Lynda Baker, Gary Gaddy, Alejandra Hansen, Barbara Mull, Rashaii Purefoy, and Jabrina Robinson AHAB MEMBERS ABSENT: Vivian Herndon-Latta AFFORDABLE HOUSING STAFF PRESENT: Housing and Community Development Director Tara Fikes I. Introductions and Opening Comments Barry Jacobs, BOCC Chair Artie Franklin, AHAB Chair The meeting was called to order at 6:01 pm. Chair Jacobs welcomed the group. AHAB Chair Artie Franklin thanked the County Commissioners for having this meeting. He pointed out that the AHAB had a lot of vacancies. Commissioner Gordon arrived at 6:03 pm. II. Recent Accomplishments/Activity Comprehensive Plan — Housing Element Artie Franklin Artie Franklin said that the AHAB has been active in the Comprehensive Planning process since the first joint advisory board meeting in January 2007. As the element lead advisory board for the Housing Element of the Comprehensive Plan, AHAB appointed a liaison at that time and summarized with Tara Fikes the existing reports regarding housing needs and goals. The AHAB members have attended joint advisory board meetings in April and October of 2007 and also met one-on-one with the Planning Board in May and November of 2007. All of those meetings generated thorough discussion, review, and re-review of goals and drafts of the Housing Element and other documents. He said that all AHAB members contributed to those meetings and discussions. He said that Orange County has benefitted tremendously from the leadership of Tara Fikes and Martha Hoyleman through this process. He 2 said that it has always been his view that the Board of County Commissioners has the final say in this process and will come to a decision that is in the best interest of all citizens in Orange County. He said that the AHAB has worked very hard for the County Commissioners to provide the best information and the soundest judgment within the planning process constraints for the Board's final reconciliation of the Comprehensive Plan. He urged the County Commissioners to remember, in their deliberations, that housing is a social justice issue. Commissioner Carey asked what the AHAB would like to see included in the Comprehensive Plan that is not there related to affordable housing. Artie Franklin said that the process was executed in a way that made terminology loose enough that there could be a considerable amount of reading. There is not enough affordable housing for those 30% of median income and below and this is a very serious situation. In his opinion, these issues were not discussed as much as he would have liked to. He thinks that government has a role in providing and ensuring that those housing needs are met. He also thinks that the market has not done a good job of providing for people in the lower-median income areas. Housing Bond Program Update Gary Gaddy Gary Gaddy made reference to the spreadsheet. The landbanking aspect of the Housing Bond program is about 15% of the commitments. Ownership roughly ran about 27% of commitments from projects and provides 61 first-time homebuyers with opportunities. Rental represents about 58% of the commitments with approximately 105 renters. This includes money from the 1997 Housing Bond Funds that were unallocated, plus the $4 million from the 2001 Housing Bond. The money has now been committed from both bond programs, which means that another bond should be considered soon. Artie Franklin said that the County Commissioners are probably going to be looking at bonds soon, and he would like to see another Housing Bond because it is needed. Chair Jacobs wanted to point out that the County has used the last of the bond funding for affordable housing, because he thinks that the County Commissioners might have regarded the last project that they approved differently had they known that this was it, and that there were no more bond funds. Commissioner Gordon asked about this project, the Eno Haven rental housing project, for which the County was paying $1 million to a for-profit entity. She asked if the non-profit agencies had been notified that the last of the bond funding was about to be allocated. Tara Fikes answered that there had been no special notification to the non-profit agencies. Artie Franklin apologized if there was something else that the AHAB should have done in this regard. Commissioner Carey said that if the AHAB thinks that the Board should consider including affordable housing in the next bond, it should be formalized. Chair Jacobs agreed, especially since there will be three new County Commissioners. The more formal the communication, the better. Housing Authority Update Jabrina Robinson Jabrina Robinson made reference to the revised bylaws. She said that members of the community have been solicited to join the Housing Authority. One of the members will need to be a Section 8 voucher holder, so they will be targeting this group. Housing Authority Commissioners will have terms of five years. Commissioner Foushee arrived at 6:25 pm. 3 Commissioner Gordon said that the Section 8 position can be specified, but the rest of the members should be at-large. The Section 8 position is the only required position. She asked about the statute. Geof Gledhill said that this statute is regarding how the appointments work. There is another statute, which is not in these materials, that says with respect to County housing authorities, where the term "Mayor" is used, it means Board of County Commissioners. There does not need to be anything in the bylaws. Chair Jacobs said that he is not clear that the term definition is referring only to the Section 8 position. He said that this is saying that, if the Commissioner in the Section 8 Housing seat on the Authority ceases to receive such assistance, the term would end. He asked that this be put in the term definition. Jabrina Robinson said that it could be changed. Geof Gledhill said that there is potential that Orange County could, in the future, create public housing through the Authority. That is why it is written in this manner, to include that possibility. III. Long-Term Affordability Documents Tara Fikes made reference to her memorandum, which explains how she is trying to secure the County's interest in long-term affordability in all of the housing projects that receive County funding. For all affordable housing documents, there are normally four documents that go along with the money. The first is the development agreement between Orange County and the development organization, mostly non-profits. This outlines the requirements of the organization. This is the contract with non-profit organizations. The money is normally provided as a deferred loan, so there are security documents for the loan such as a deed of trust and a promissory note. The deed of trust is recorded against the property and is recorded before any other liens. The restrictive covenants place a 99-year affordability requirement on the property. Once the property is in ownership of the non-profit organization, the County asks the organization to immediately record the declaration of restrictive covenants before any other liens are placed on the property. This has been done with all affordable housing projects. The deed of trust is recorded in the Register of Deeds so that it becomes a document of record. There have been a few cases where the County has granted money to non-profit organizations to help the financials of the projects. In those cases, there have been no deeds of trust or promissory notes executed. There has been some tweaking over the last couple of years. Geof Gledhill said that recently, there was a more sophisticated review of the documents with the suggestion that they be changed in a fairly significant way. The promissory note that the County uses for the loans made ends up on the books as a liability for 99 years with the interest at 10% accruing for 99 years. At the end of the 99-year period of the deferred loan, there is a huge liability. There was concern about this, and he has been looking at the transaction from this perspective and made a decision to make the promissory note what is called non-recourse, which means that, for non-payment of the loan, the County has no recourse. If the property stays affordable for a 99-year period, then the loan goes away. There is no expectation to get money back from the loan, but the expectation is for long-term affordability of the housing. A decision was made to eliminate the possibility that the County would go after the non-profit if something went bad in the transaction and the property was taken back, but money was still owed because of the 99-year note with interest accruing. The County's recourse will be to get the property back only and hopefully it will be turned over to another non-profit. In answer to a question by Commissioner Carey, Geof Gledhill explained that if the non- profit defaults in that it fails to keep the property maintained, then the County would notice a default on the loan and give them the opportunity to cure the default and get the property in 4 shape. If the non-profit fails, then the County would foreclose on the property. If the foreclosure resulted in the County not getting the full value of the property plus the cost to fix up the property, then it could still go after the non-profit with that deficiency. Commissioner Gordon said that it seems that there needs to be some kind of mechanism whereby these properties are certified, inspected, etc., that they are maintained so that if something goes wrong it can be caught early. She is worried that the County is not protected. Geof Gledhill said that the County is protected in the documents, but he agreed with Commissioner Gordon. Commissioner Gordon asked if this new method has been incorporated into any documents and Geof Gledhill said that it has been rolled out with CASA. Commissioner Gordon said that she had thought that staff was handling the administration, but she was not contemplating that there would be such large changes that could jeopardize the investment. Geof Gledhill said that he agrees that this should come back to the County Commissioners so that they knew about it. In consultation with Tara Fikes, he picked this meeting to let the Board know about the changes. Commissioner Foushee said that the non-profits will be paying into sort of an escrow account so that high-priced maintenance issues can be covered when they come up. The task force will be bringing back recommendations to preclude or prevent maintenance issues from getting out of hand. Commissioner Gordon asked about the next steps. She would like to have notification if changes like this are made. Geof Gledhill said that, since the Land Trust model was created, this is the first significant deviation. It is only significant in the documentation. IV. Mobile Home Initiatives Barbara Mull Pilot Preservation Project Needs Assessment Barbara Mull said that several things have happened over the past year that has led their thoughts to manufactured housing more. Chair Jacobs had mentioned it at one of the previous work sessions, the situation with Daniel Boone campground and the mobile home park on the adjoining property, and the Comprehensive Plan. She made reference to a book she had read and said that she has met with the author and tried to raise awareness of manufactured housing. In the course of doing this, two developments in rural Orange County have come to the attention that possibly could be pilot projects for a preservation effort of a community of manufactured homes. One that was considered had some significant environmental health problems and would not be sustainable over a long-term basis. There is another opportunity, which is described in the agenda materials and offers the potential for a model project. There have been some preliminary discussions with Orange Community Housing and Land Trust as to managing the project. The discussions will be continued and the hope is to get an assessment by the Community Reinvestment Association of North Carolina. Chair Jacobs said that, as this is discussed, he would like to keep the municipalities in mind as fiscal partners. Chair Jacobs said that the model that might be considered about trying to locate a community that the land trust would be handling is exactly the direction that he was hoping the County could go. This is one of the reasons that he might have opposed spending the last of the affordable housing bond funding, because he would have wanted to save some money for land that will be available in the Efland area, which will have water and sewer soon. He also 5 thinks that no one in the government is actually charged with helping to identify parcels like this. He would like to see the Manager look into this. He would rather be strategic and organized. Also, he was thinking that there was $1 million set aside in the legislature for removing abandoned mobile homes statewide. He asked if there is a process by which the County can access these monies. Regarding the study, he hopes that no one tries to convince the County Commissioners that manufactured housing is important in the total structure of affordable housing. He said that the Manufactured Housing Association insists that manufactured housing does not depreciate at the rate that tax assessors depreciate it. He hopes that someone will give the County a definitive answer. He wants to know if there are ways that value can be preserved or if it just depreciates. Chair Jacobs made reference to the third bullet at the top of, "Proposal for Manufactured Housing Units Assessment," and he read, "develop strategies to address loss and preservation of manufactured housing." The word "address" was missing. Geof Gledhill said that the irony of the value issue is that the property owner benefits from the depreciation schedule. The tax value rarely sets the market. Commissioner Nelson said that he would like to create a discussion in the community about the value of manufactured housing. He said that there is a lot of classism going on and people look down on that kind of housing. He said that there may be a role for the Human Rights and Relations Commission to play in terms of a dialogue. V. Section 8 Housing Choice Voucher Program Update Tara Fikes said that the last time she provided a status report was in June, so it is not too different from that report. The County is currently funding about 615 vouchers annually. Her message today relates to the waiting list and the current status of that. As of today, there are about 2,200 people on the waiting list. This has happened over a period of four years, because the waiting list was reopened in 2004 when the list was 350-400. The list is being purged through contacting everyone on the list to see if they were interested in remaining. This exercise should be done by the end of the month, and she thinks that 1,200 people will still remain on the waiting list. The average wait time is three years or longer. She thinks that the County is again faced with the question of continuing to accept applications or not. Another interesting phenomenon is that most of the surrounding county programs have closed their waiting lists and there has been an influx of applicants from other counties. Of the contiguous counties, only Chatham County is still accepting applications. In the Triangle area, only the City of Raleigh still accepts applications. The AHAB is in the discussion phase of possibly limiting the number of new applicants and will come back to the Board with more definitive information. Commissioner Gordon asked how it is decided who gets the voucher. Tara Fikes said that it is the next person on the list. There are preferences for homeless people, people paying more than 50% of income for rent, and people who have been displaced due to some natural disaster. There is also a preference for people living in Orange County. She said that, although it is a federal program and people can take vouchers and live anywhere in the country, Orange County has a provision that the voucher holder has to live in Orange County at least a year before moving other places. Chair Jacobs said to make sure that Congressman Price was still being reminded that this is an issue every year. VI. Eno Haven Follow-up Questions 6 Tara Fikes said that at the Board's August 19th meeting, there was an item on the agenda asking to allow the issuance of taxable bonds for this project. During that discussion, a lot of questions were raised. This memo is an attempt to answer some of those questions. She said that she talked to the North Carolina Housing Finance Agency that administers the tax credit program in North Carolina, about their experiences with projects in North Carolina with the tax credit program. She found out that over the 21-year history that only six complexes have experienced foreclosure. This experience mirrors what has happened nationwide. Regarding restrictive covenants and making sure that the property remains affordable for the long-term, the low-income housing tax credit project requires that property remain affordable for 30 years. There is a declaration on the property to assure this. The thought is that the County could record its declaration of restricted covenants after what is required by the housing tax credit program. Tara Fikes pointed out the last page, which is a summary of where the funding is coming from. The County's loan would be second to any bank loan. VII. Closing Comments Artie Franklin thanked everyone. VIII. Adjourn The meeting was adjourned at 7:25 p.m. Barry Jacobs, Chair Donna S. Baker, CMC Clerk to the Board