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HomeMy WebLinkAbout2006-03-20 Housing PACKET Ashland Housing Commission Regular Meeting Agenda: March 20, 2006 6:30 - 8:30pm Community Development & Engineering Services Building 51 Winburn Way, Ashland OR. 1. (6:30) Approval of Minutes (5 min) - December 19, 2005 - February 27, 2006 2. (6:35) Public Forum (5 min) - items not on the agenda 3. (6:40) Other Business from Housing Commission Members (15 min) - Rental Needs Analysis Î request for consultant services - New and miscellaneous commissioner discussion items not on the agenda 4. (6:55) New Business - 2006 CDBG Proposal Evaluation and Recommendation Staff synopsis and recommendation (10 min) Presentations by Applicants (30 min) Public Hearing (10 min) Commissioner Deliberation and award recommendation(s) (20 min) 5. (8:05) Reports and Updates (15 min) - Subcommittee Reports - Liaison Reports 6. (8:20) Commission Coordination (5 min) st City Council review of the Clay Street annexation request March 21 at 7:00pm in the City Council Chambers th, CDBG Presentations and recommendation to the City Council April 47:00pm in the City Council Chambers Medford Housing Commission: Meets the first Wednesday of every month from 5:30 to 7:00 p.m. City Hall Council Chambers - 3rd Floor, 411 West 8th St Medford, OR 97501 7. (8:25) April 17, 2006 Meeting Agenda Items (5 min) CDBG Action Plan Review Lithia Lot Update Land Acquisition Update 8. (8:30) Adjournment Public Participation Unless an Agenda Item already has been the subject of a public hearing which has been closed, members of the public may speak upon any item on the Agenda. If such a hearing has been held this fact will be noted on the printed agenda. The Public Forum period is provided for the public to speak on items that are not on the printed Agenda for tonight's meeting. The time allowed each speaker may be limited by the Housing Commission Chair or presiding officer. If you wish the speak either during Public Forum, or to a specific Agenda item, please complete the Speaker Request Form below, and hand the form to a staff person before the beginning of the meeting if possible, or before the agenda item is discussed. ASHLAND HOUSING COMMISSION MINUTES FEBRUARY 27, 2006 CALL TO ORDER Î Chair Faye Weisler called the meeting to order at 6:30 p.m. at the Community Development and Engineering Services Building at 51 Winburn Way, Ashland, OR. Commissioners Present: Faye Weisler, Chair Bill Street (left at 7:00 pm) Carol Voisin Don Mackin Jennifer Henderson (left at 7:00 pm) Liz Peck Alice Hardesty Absent Members: Matt Small SOU Student Liaison: Sunny Lindley Council Liaison: Cate Hartzell (arrived at 6:50 p.m.) Staff Present: Brandon Goldman, Housing Specialist Sue Yates, Executive Secretary Goldman announced there will be a review of a pre-application at this meeting. The CDBG public hearing is scheduled for March 20, 2006. Goldman introduced Sunny Lindley. She is the SOU Student Liaison. APPROVAL OF MINUTES There were two corrections to the January 9, 2006 Housing Commission minutes. Under ÐNew BusinessÑ and ÐOld BusinessÑ there were two incomplete sentences that need to be struck. Voisin/Mackin m/s to approve the minutes as corrected. Voice Vote: The minutes were approved as corrected. PUBLIC FORUM Î No one came forth to speak. REPORTS AND UPDATES SUBCOMMITTEE REPORTS Education Î Hardesty submitted a written report. Save Our Schools and Playgrounds (SOSP) comprised of 300 members would like to organize a large educational kind of meeting. The purpose would be to brainstorm and educate their members and the general public about the affordable housing problems but also to come up with resources and ideas. SOSP would run the effort, but with the Housing Commission attending to help out. The Housing Commission expressed an interest in participating, but would need to know the date, place and time of the forum. Employer Assisted Housing - Hardesty said they want to keep the interest going. Hardesty said sheÓd heard from the Carleton Hart architectural firm in Portland, developers of Oleson Wood. They asked if there would be an interest in hearing a presentation from them. What is the possibility of inviting them to the study session on April 26, 2006? The purpose of a visit would be for them to tell the Housing Commission and perhaps Planning Commissioners and the Council about how they were able to do what they did by combining affordable housing with environmental concerns Î green building and funding. She would like to respond to their offer. Hartzell arrived at 6:50 p.m. th The study session was set for April 26 from 3:00 to 7:00 p.m. A potluck was suggested. Goldman suggested potential modifications of the annexation ordinance as a topic. An e-mail reminder will be sent to Commissioners. Henderson and Street left the meeting at 7:00 p.m. ASHLAND HOUSING COMMISSION 1 MINUTES FEBRUARY 27, 2006 Hardesty noted that Street has agreed to chair the Education Committee. Land Use - Hardesty is now chairing the Land Use Committee. Other members on the committee are: Peck, Henderson and Mackin. They discussed inclusionary zoning and what kinds of changes could be made to the code to make it more beneficial to the community and improve the aspect of affordable housing in these developments. Goldman said he would research construction costs for typical project developments. The regular meeting date will be the second Thursday of the month from th 12 to 1:00 p.m. The next meeting is March 9 from 12 to 1:00 p.m. Finance Ï Goldman brought the committee up-to-date on work that had been done previously. Goldman understood they were looking for a consultant to investigate continuous funding streams. The Commissioners brought up other ideas and questions. However, mixing too many issues will only add to the CommissionÓs frustration, for example, learning about funding sources, hearing from developers as to why they are not seeking funds for affordable housing, different housing needs Î workforce, homeless, transitional, etc. The Commission decided to focus on how to get the housing trust fund to work. Goldman said he will go to the Planning Director and City Administrator to see if there are funds available in the current budget for hiring a consultant. There was consensus by the Commission for Goldman to proceed with hiring an outside consultant to look at potential funding streams for a housing trust fund. A recommendation would be made to Bill Molnar, Interim Planning Director and Gino Grimaldi, City Administrator to see if there are funds under the current budget to allow for a consultant. Hartzell mentioned it to Grimaldi this morning and she suggested the request go straight to Grimaldi. Goldman thought a consultant would work independently and provide a report. Hartzell suggested Goldman come back to the next meeting or Finance Committee with a potential scope of work. A possible future agenda item would be the relationship of the existing land trust to our formation of a housing trust fund. Liaison Reports Î Hartzell reported the Council has not prioritized their goals, but one of the highest goals was the creation of 200 affordable housing units by 2010. Goldman will send the document he produced in this regard. David Pearce Snyder, Washington, DC, was the keynote speaker at the Workforce Housing Summit. Hartzell will send a link to his informative website. She took notes at the housing summit and can share those with the Commission. Goldman can provide extra packets to those who are interested. Hartzell attended last monthÓs meeting of the Homeless Task Force of the Jackson County Housing Coalition. They said if Ashland gets to the point where we are asking for money for homelessness, consider ourselves a subcommittee of that task force and that puts us in line to get money. Goldman noted the City has been a member for the last three years. Hartzell, during the cold snap, organized a homeless shelter using The Grove. Unfortunately, not everything was in place until too late. It at least jump started the process and hopefully it will put some concrete things in place for the future for cold nights. Lithia Lot Î Peck said the funding for Kendrick (developer) came back $400,000 short of their goal to create the housing. It has been sent back to Kendrick saying they need to figure out how to close the gap. Kendrick came back saying they would turn 1500 square feet of the proposed housing into commercial or market rate house. Goldman said he will meet with their representative to determine what their proposal is. He will then take it to the Council because it could be a modification of the project. There was consensus that Weisler contact Grimaldi for the Housing Commission to review it before it goes to the Council. NEW BUSINESS Pre-Application Review for the property at 146 S. Mountain Avenue; Applicant: Fullerton/Henthorn. Request: Conditional Use Permit to convert existing units into condominiums. Final Plan with Outline Plan Approval for a three-unit Performance Standards Subdivision. Goldman said the applicant is required to have at least 25 percent of the houses affordable. The standards require ownership units at 120 percent for condominium conversions or rental units at the 80 percent AMI for a period of not less than 20 years. In this case, one unit will have to meet the affordable requirement. ANTHONY HENTHORN said they built two of the units two years ago. Each unit has its own private yard. The one bedroom is already rented to meet the affordability requirement. All the units currently exist. The Commissioners did not have any suggestions or recommendations. ASHLAND HOUSING COMMISSION 2 MINUTES FEBRUARY 27, 2006 PLANNING ORDINANCE REVIEW AND DISCUSSION Annexation /Zone Change Criteria Discussion Goldman said his memo in the packet outlines the existing Land Use Ordinance relating to affordable housing. Are the five standards for affordability under ALUO 18.106.030 G. adequate to attain affordable housing? Even though this ordinance has hardly been used over the last several years, as more pressure develops on lands outside the City Limits but inside the Urban Growth Boundary, the ordinance will be used more often. Goldman suggested the Land Use Committee review any changes in th wording and the Housing Commission could review it again on April 26 at the study session. Then, immediately schedule a joint study session with the Planning Commission to recommend any changes. Hopefully, there would be specific language that could come out of the study session that might address the concerns raised. What is the target goal, how do we define workforce and affordable housing and what is the intention behind the annexation ordinance to provide what housing for what income group? Hartzell thought they were going to talk to developers to find their break even point. Goldman isnÓt sure Staff has direction yet from the Commission as to how to craft language to serve what purpose. Hardesty had listed six items that the Land Use Committee suggested as types of changes that could be made to the ordinance. Goldman would like to bring the concepts to the Land Use Committee. The language will require legal review. Mackin said there will be two regularly scheduled Land Use meetings before the study session. They can talk about the concepts. Hartzell would like to begin scheduling the joint study session with the Planning Commission. Density Bonus Criteria Discussion Goldman explained this is a voluntary bonus people can get that develops affordable housing. They can increase the percentage of units on the property by an equal percentage of affordable housing. For every affordable unit you add, you get a one unit increase. This has not been working too well because of land costs. Weisler thought as we discuss these things, can Goldman give the Commission an idea of how much the density bonus has been utilized and how much affordable housing has been added and how much will be anticipated in terms of applications and trends? She would like to see the Commission focus on the changes that will bring the most affordable housing. Hartzell said it would be helpful to put on the agenda when we know there is a decision to be made or where we want to get with a particular item. Goldman said Annexation and Zone Change will not be coming back to the Commission in March. Condominium conversion criteria discussion can be put on the next agenda. Ask the Land Use Committee to structure that portion of the study session to be organized so they can focus and move down the list. FUTURE AGENDA ITEMS Community Development Block Grants (CDBG) applications. Peck said she would be happy to talk to any of the Commissioners about the ten units in the downtown (Lithia Lot). At what cost do we want the ten units on the ground? PUBLIC FORUM RICH ROHDE, Oregon Action, said he was impressed with the work the Housing Commission is doing and the public ought to know that. ADJOURNMENT Î The meeting was adjourned at 8:40 p.m. Respectfully submitted by Sue Yates, Executive Secretary ASHLAND HOUSING COMMISSION 3 MINUTES FEBRUARY 27, 2006 Memo TO: Housing Commission Title: Ashland Land Use Ordinance relating to Affordable Housing Date: March 20, 2006 Submitted By: Brandon Goldman, Housing Program Specialist The Housing Commission Land Use Subcommittee discussed the potential value of conducting a Rental Needs Assessment and indicated they would like to have the full Commission evaluate the merits of such a study, and recommend that a consultant be hired to undertake this activity. To facilitate the CommissionÓs discussion the subcommittee requested that Staff provide a generalized scope of work to outline what would be entailed and the potential deliverables from such a study. In the event the Housing Commission saw merit in undertaking this activity, the inclusion of the funds necessary for such contractual services within 2006 budget is a decision of the Budget Committee, and City Council. No estimate of cost has been obtained. Potential Items for a scope of work Net change in rental housing inventory o Rental housing reductions (condo-conversions) o New rental housing units constructed o Trending/projections Range of rental costs by unit size o Trending/projections Need-gap analysis for renters o Low Income (30, 60, 80%AMI) o Workforce (100, 120, 150%AMI, etc) Number of renters overburdened by housing costs o Trending/projections t Vacancy rates Percent of households that Rent Vs. Own by Income Range Optional additions Percentage of sub-standard units Percentage of households experiencing overcrowding Inventory of illegal rental units (such as un-approved Accessory Residential Units) Staff Evaluation DATE: March 20, 2006 TO: Ashland Housing Commission and City Council FROM: Brandon Goldman, Housing Program Specialist RE: Community Development Block Grants (CDBG) 2006 Request for Proposals The City of Ashland received three proposals for the allocation of approximately $360,800 in Community Development Block Grant (CDBG) funds. These funds comprise a carryover of entire competitive award amount for AshlandÓs 2005 CDBG allocation, in addition to the competitive 2006 CDBG allocation. In the 2006 Request for Proposals (RFP) it was noted that 15% ($32,025) of the total 2006 allocation was potentially available to projects that provided direct services to Homeless or Special needs populations. Of the three proposals received two address low-moderate income housing needs, and one requests CDBG funds to provide direct services to homeless and very low-income clients. The City of Ashland Housing Commission is to hold a public hearing and review the grant requests on March 20, 2006. The Housing Commission shall make a recommendation for grant award(s) to the City Council. Subsequently, the City Council will hold a public hearing on April 4th, 2006 to make a final decision on the grant award(s). It is important to note that in carrying over funds ($190,000) from the 2005 program year we will exceed the maximum balance of CDBG funds permitted by HUD (no more than 1.5 times an annual allocation) upon receiving AshlandÓs 2006 allocation in July of this year. In order to expend the funds expeditiously and avoid potential sanctions, it is imperative the City allocate the funds to projects that are ready to proceed. Should the City have a balance of 1.5 times our annual allocation on June 30, 2007 (one year after being found untimely) HUD sanctions can include recapture of unspent funds over the 1.5 cap. StaffÓs recommendation regarding the allocation of the 2006 CDBG funds and prior year carry-over is provided on the final page of this document. Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation Proposals Received Three proposals were received and are listed below: Organization Proposed Project CDBG Funds Requested Acquisition of a vacant parcel Rogue Valley Community $360,800 for land that can accommodate 6 units. Development Corporation acquisition (RVCDC) Acquisition of a property Ashland Community Land $328,000 for property containing an existing duplex Trust (ACLT) acquisition with a proposal to add to additional units to the rear of the property. Full time Transitional Housing CERVS Interfaith Care $32,000 for funding of the Coordinator/Case Manager Community (ICC) new staff position position to assist extremely low income/homeless individuals and households. Funding Requested/Available A total of $360,800 is available to distribute to eligible recipients for projects meeting the CDBG national objectives, and are consistent with the City of Ashland 2005-2009 Consolidated Plan. The combined total request from the three applicants is $720,800. The $190,000 in CDBG funds from the 2005 CDBG program year which were originally awarded to Rogue Valley Community Development Corporation (RVCDC) have been rescinded for re-programming. As stipulated in the 2005 CDBG Action Plan RVCDC was required to complete the land acquisition prior to the close of the 2005 calendar year. As their project was not initiated during the time frame provided, these funds are to be re- awarded in this years competitive award cycle. These available carry-over funds are in addition to the $170,800 in 2006 CDBG funds which are made available to sub-recipients. The entire $190,000 of carry-over 2005 CDBG funds is made available in this competitive award cycle. Of the entire $213,500 in 2006 CDBG funds available to the City: 20% ($42,700) is reserved for administration costs associated with the CDBG program. 80% is competitively awarded to projects addressing low-moderate income needs as identified in the 2005-2009 Consolidated Plan. The needs are prioritized in the plan which establishes creation or retention of affordable housing as the primary use for these funds. 15% ($32,025) is available to projects that provide direct client services to homeless or special needs as identified in the 2005-2009 Consolidated Plan. It is important to note that these funds are not a dedicated Ðset-asideÑ for this use but rather considered available up to 15% of the yearly allocation. The Ðsocial serviceÑ 15% is competitively awarded with all applications and is thus part of the Ð80%Ñ noted above. Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation These funds will be available upon approval of the 2006 Action Plan, modification of the 2005 Action Plan, and upon completion of any regulatory requirements including but not limited to environmental review clearance. The funds will be available on July 1, 2006, or upon final approval of the Federal Budget by the US Congress, which ever is later. For projects that propose to use the combined amount from each program year their timelines should consider the potential delay associated with the receipt of the federal allocation and the time necessary to complete the prerequisite regulatory requirements such as an Environmental Review and potentially the development of a Relocation-Anti-displacement Plan. Upon final selection of the award recipients by the Ashland City Council, the City will develop an Action Plan outlining how the CDBG funds will be used by the selected subrecipient(s). This 2006 Action Plan will go before the Ashland Housing Commission at as public hearing for review and approval to ensure consistency with the awards designated by the City Council. The US Department of Housing and Urban Development (HUD) must review the annual Action Plan submitted by the City to ensure the activities funded are constant with federal requirements, and with the local Consolidated Plan. Assessment Staff has assessed each of the three proposals to determine whether they each meet the Federal CDBG regulations, and if the proposals address the priorities within the City of Ashland 2005-2009 Consolidated Plan. Three areas are evaluated for each proposal regarding compliance with federal regulations. First the proposed projects must meet the national objective of the Community Development Block Grant program. Second, all CDBG funded projects must be an "eligible" use under the CDBG federal regulations. Finally, if the proposals meet all federal requirements and are selected for a CDBG award, then many federal regulations must be met throughout the course of the project. For instance, all projects funded, in whole or in part, with CDBG dollars require an environmental review in accordance with the National Environmental Policy Act (NEPA), construction projects must use federal Davis-Bacon wage rates, housing involving structures built prior to 1978 must undergo lead-based paint abatement, and any project involving displacement of residents or businesses as a result of the federal funded project are entitled to assistance under the Uniform Relocation Act. Areas of concern are described for each proposal received. The Housing Commission, and City Council, can only award CDBG funds to projects that can meet all federal requirements. Should it be determined by the Housing Commission and City Council, that none of the proposed projects constitute an efficient use of CDBG funds, the Council could elect to re- open the RFP process. As mentioned previously, carrying over the 2005 or 2006 allocation of funds would make the City ÐuntimelyÑ (over the 1.5 thresh hold allowed by HUD) upon receipt of the 2006 allocation. In recent years the City has aimed to expend accumulated past carryover to avoid a determination of non-compliance with the HUD timeliness standard and has made significant progress in this regard. Although Staff does not believe we can at this point avoid being classified as untimely on June 30, 2006, we can avoid potential loss of Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation future funding if the awards are expended by June 30, 2007. To address this timeliness standard, the evaluation of proposed projects includes an assessment of their readiness to proceed to ensure the funds are distributed within the year awarded. PROPOSAL EVALUATIONS Rogue Valley Community Development Corporation The Rogue Valley Community Development Corporation (RVCDC) proposal is to use $360,800 in CDBG funds to assist in purchasing a 0.39 acre site at the junction of Dollarhide and Abbott Streets within the Old BudÓs Dairy Subdivision. The subdivision was annexed to the City in early 2003, and the subject property was designated as the location of a 6 unit affordable housing development to comply with the CityÓs annexation criteria. This site has received planning approvals for the development of a 6 unit apartment complex and upon submittal and approval of construction plans the site is ready to receive building permits. The application for CDBG funds states that the proposal meets the national objectives. Staff concurs that the proposed housing units will meet the national objective of primarily benefiting low- and or moderate-income households. The acquisition of land for the subsequent development of affordable housing is an eligible use of CDBG funds and is a relatively straightforward use of funds. The site received planning approval for a 6 unit apartment as part of the original subdivision request. Provided the proposed development is in substantial conformance with this original approval the completion of the six units as condominiums would only require issuance of building permits and the recording of a Condominium survey and corresponding Covenants Conditions and Restrictions with the State, County and City. Staff has a number of concerns relating to the use of CDBG funds on this project: Self-Help Program applicability The USDA Self-Help Program is an invaluable program that allows low-income families to achieve home ownership. Staff understands from RVCDCÓs involvement with Self Help in prior years that to utilize the program a minimum number of units need be provided. In past years RVCDC indicated that they needed to provide a minimum of 15 units to utilize the program, and thus the scattered site proposal awarded in 2002 and 2003 to accommodate a total of 15 units along Siskiyou Blvd. As this 2006 proposal is for only six units staff questions whether RVCDC will be in the position to identify an additional site(s) to meet the USDA program requirements, or whether this 6-unit project needs no subsequent phase to be developed. A more pressing issue however is the use of Ðhomeowner buildersÑ on what would be a condominium project. Although there are exemptions in the building code to allow homeowners to construct their own single family homes, a condominium or apartment Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation complex are considered interrelated structures that do not fall under the same exemption clause available for independent units. According to the City Building Official, homeowners ÐcontractorsÑ can not be used on a condominium project. Given the cost savings provided by homeowner labor is central to lowering the purchase price of the housing, and RVCDC anticipates USDA grants for administrative costs and site improvements, it appears that an inability to apply the Self-Help Program to the proposed development makes it unviable as presented. Units previously required to be affordable The selected site for acquisition was a portion of an approved annexation request granted in January of 2003. The approval of the 41 unit subdivision required that 6 units be affordable to households earning less than 80% area median income. To comply with the annexation requirement the developer identified the subject parcel as the location for these six units and received planning approvals necessary for their development. Note the original developer is held to the requirements established by the annexation criteria that were in effect when the subdivision was approved. G. For all residential annexations of four units or greater 1. 25% of the proposed units shall be affordable and available to qualifying buyers or renters with incomes at or below 100% of median income; or 2. 15% of the proposed units shall be affordable and available to qualifying buyers or renters with incomes at or below 80% of median income. The total number of affordable units required by this section shall be determined by rounding down fractional answers, determined above, to the nearest whole unit. Properties providing affordable units as part of the annexation process shall also qualify for a density bonus for development under the Performance Standards Option for subdivisions. Note that these old annexation requirements did not stipulate a period of affordability for ownership units (20 year required for rentals). However, as the developer will undoubtedly request the deferral of SDCs, the City may be in a position impose a 30 year period of affordability in exchange for the waiver of these fees. In the event the original developer chooses to pay the fees at issuance of a permit, no affordability period could be established for the required 6 units unless the proposed units are to be rentals. To remedy this potential of having required affordable units become market rate units at the first transfer of ownership the City adopted new annexation criteria in November of 2003, however those new standards and associated periods of affordability can not retroactively apply to this six unit project. As the six affordable units were a legislative requirement for approval of an annexation, the developer is obligated to complete 6 units of affordable housing on this site without any subsidy from the City or other entity. These units are required to be constructed prior to issuance of the final certificate of occupancy for the market rate units in the subdivision. Staff has questioned RVCDC as to what they believe to be the ÐaddedÑ benefit provided by the contribution of CDBG funds given the existing affordability requirements on the Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation property. RVCDCÓs application contends that given their use of SelfHelp the units will be constructed as ownership units and would target a lower income level (40% of the units to households at or below 50% Area Median Income) than is otherwise required through the annexation requirements. Further in evaluating RVCDCÓs application the 99-year lease model they would employ would secure the units as affordable a long period when no such affordability period is otherwise required by the annexation criteria that were in effect when the subdivision was approved. Timing of acquisition A letter from the seller states that the willingness to sell is conditional stipulating that it is Ðsubject to reaching a binding agreement within 30 days and closing the transaction within th 90 daysÑ. As the letter is dated February 14 there is no means by which RVCDC could enter into a binding agreement due to CDBG regulations within this 30 day timeframe. In the event the Housing commission recommends the project, and the Council approves the award, the City would have to complete an Environmental Review prior to RVCDC entering into any binding agreement. Further the 90 day provision for closing on the project is not feasible given a substantial portion of the award requested ($170,800) is to come from the 2006 HUD allocation to the City which would not be available until July 1 2006 at the earliest. RVCDCÓs project schedule (Form A) included in their application recognizes that acquisition could not occur until July, but as noted this is in conflict with the terms provided in the sellerÓs letter to RVCDC. As noted above the original developer is required to complete the development of the affordable units prior to completion of the final market rate unit. Staff is concerned that as this subdivision is nearing completion the timing of a Self-Help project may be a factor in the current owners willingness to sell the property as opposed to developing it himself. The issues being that the current developer would have to delay selling the last market rate unit until after the affordable units are done. Although this is the case regardless of ownership, it does create a timing and control issue for the current seller. Potential contingencies of sale The letter provided in the application from the seller to RVCDC contains a section that was omitted by RVCDC that may further outline how the seller envisions the acquisition and development process. RVCDC indicated that this section contained private information, but staff has some measure of concern that it could also contain further contingencies by the seller that could have an impact on the use of CDBG funding. Unfortunately staff can only speculate as to the added provisions, but were there provisions to in effect compensate the seller to complete site-work or other predevelopment expresses these costs may constitute an ineligible use of any CDBG funds targeted toward acquisition, or be in violation of provisions established to preclude additional compensation to a property seller beyond fair market value. Further if these conditions place further limitations on a sale, or timing these items should be evaluated for consistency with the CDBG program prior to an award selection. Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation Determination of property value The application notes that RVCDC is requesting $360,800 to assist in purchasing the site for an estimated $425,000. Staff questions how the property value of $425,000 was determined given the affordability restrictions already imposed on the site by the approval of the subdivision and annexation. It is Staffs belief that these restrictions effectively reduce the property value below market rate and that $425,000 is close to a market rate for unregulated property with an allowable density of 6 units. The sellers letter to RVCDC indicates that embedded within this asking price the seller is including costs associated with Ðdesign, planning approval, completion of the surrounding common areas, and final ready to build plansÑ. As the CDBG funds requested are specifically related to land acquisition such planning, architectural plans, pre-development, or public facility construction costs, should not be included as Ðland valueÑ as the value in those items is additive to land value. Each of these associated costs was essentially required of the original developer as part of the application for subdivision and annexation approval. Further the original developerÓs obligation to develop six affordable units would require all of these external costs be absorbed into the total subdivisionÓs financial performa, to in effect amortize the cost of providing the affordable units. At this point to include them in the asking price for the land is within the sellerÓs prerogative, but Staff believes it is not appropriate to bundle them with the land acquisition cost for the use of CDBG funds. A recent comparison in land value for a comparable lot is the RVCDC recent purchase of the Self-Help site phase II, on Siskiyou Blvd near Park Street. This .35 acre property also could accommodate six units and was purchased by RVCDC at a Fair Market Value (FMV) in February of 2005 for $350,000 as a property free of any affordability restrictions. In the event the RVCDC is selected for a CDBG award an opinion of value of the property in consideration of the existing affordability restrictions, would be required from an objective third party. Given the complexity of determining the reduction in value resulting in the encumbrance of the affordable housing restrictions already in place, Staff would recommend an licensed appraiser determine the properties value. Staff would further recommend that the value of the architectural or planning design, and any offsite infrastructure or common area improvements, should not be attributable to the land value in establishing its FMV for acquisition of property with CDBG funds. Further, if any of these additional items are sold to RVCDC, independent of the Land Acquisition, their value should be clearly detailed in a summary statement with the basis for the offer of compensation. Environmental Issues The subject property at the junction of Dollarhide and Abbott Streets has Department of State Lands (DSL) designated wetlands to the immediate north and west. The original developer has worked with DSL to mitigate the loss of wetlands and design the subdivision to accommodate them into natural areas immediately adjacent to the proposed site. Given the proximity of designated wetlands, the process of developing the site would trigger protection of the adjoining wetlands as a requirement of the CDBG Environmental Review and the Department of State Lands. A complete Environmental review has not been undertaken for Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation the site and as with all CDBG land acquisition or capital improvement projects this evaluation must be completed prior to any binding commitment is exercised. RVCDC; Buds Dairy Site Acquisition strengths weaknesses Meets one of highest priorities in Land acquisition cost proposed is inclusive of Consolidated Plan Î provision of affordable other development costs, not solely the value of ownership housing. the land. Actual value of the encumbered property (with affordability restrictions) is not provided in the application. The target group for this three unit proposal Site required to be developed as affordable to is families making less than 80% of median households earning 80% area median income or income with at least 3 of the units (40% of below without added subsidy (CDBG). the households) at or below the 50% area median income level. Self-Help (if applicable) is a means of Letter from seller establishes terms and a leveraging CDBG and USDA funds with timeline that can not be met by RVCDC given a sweat equity to significantly lower the proposed use of CDBG funds that will not be purchase price of the homes. available until after the proposed Ðbinding agreementÑ date proposed by the seller. Ready to Proceed Capacity issues: Land Use approvals creating the site and the RVCDC is currently undertaking substantial review of the 6 unit development is projects in Ashland and Medford. Although the complete provided the development is not construction of the dwellings at Siskiyou and altered from the original approval. The Faith is now underway, this and other projects public facilities (street, sewer, power, water) will be continuing during the proposed timeline are located and available to the subject for the current application. parcel. RVCDC was unable to complete their proposed 2005 CDBG funded activity (acquisition of No further planning review required for Quincy Gardens) in the time frame provided (9 development. Construction Plans are months). developed and ready for submission to the building department Proposed 99 year land lease similar to a land Building code issues with utilizing Self-Help to trust would retain long term affordability. construct Condominiums has not been addressed by the applicant. This issue relates to code provisions that allow an exception for a home- owner to build his/her own home. This exception does not apply to condominiums. Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation Ashland Community Land Trust The Ashland Community Land Trust (ACLT) proposal is to use $328,000 in CDBG funds to assist in purchasing a 9700 sq.ft property with an existing duplex fronting on Bridge Street. The proposal entails retaining the duplex as affordable rentals until such time as the existing tenants voluntarily move. After the units are vacated ACLT intends to make them available for purchase by low-moderate income households. The rear of the property would be developed as ownership housing by Habitat for Humanity to benefit low, or very low income households. In all circumstances the land would remain in the ownership of the ACLT, thereby securing the affordability of the units in perpetuity. The application for CDBG funds states that the proposal meets the national objectives. Staff concurs that the proposed housing units will meet the national objective of primarily benefiting low- and or moderate-income households. However staff does have concern regarding the current incomes of the residents, and potential relocation costs which are elaborated on below. The acquisition of land for the subsequent development of affordable housing is an eligible use of CDBG funds and is a relatively straight-forward use of funds. To complete the development of two additional units and the condominium-ization of these units the applicant would need planning site review approval and recording of a condominium survey. Staff has a number of concerns relating to the use of CDBG funds on this project: Homeowner-Builders of Condominiums As noted under the RVCDC project evaluation Staff has consulted with the City of Ashland Building official and he has indicated that condominiums are reviewed within a section of the building code that does not permit unlicensed contractors (or more specifically homeowners) to be contractors for development of their own ÐcondominiumsÑ, as condominiums are a complex inter-related structure type. Rather the responsible entity could not be the homeowners themselves on this type of construction. It is StaffÓs understanding that the Habitat for Humanity organization functions as general contractor for all the units, utilizing the homebuyer only as relatively unskilled labor. If this is the case this would differ from the recent RVCDC Self-Help Project where each home-owner-builder is their own individual contractor, receiving individual construction loans, and being the responsible party for their units development. Just as Staff has requested that RVCDC be prepared to address this issue, Staff requests that ACLT determine how Habitat for Humanity would be structuring the construction phase of the new units, be they town homes or condominiums, to ensure the building code is satisfied. Tenant Relocation and Income Qualification The application contains no income qualification documents for the existing tenants. The proposal does state that these tenants will have the ability to remain in the premises after acquisition: ÐThe existing units will be rented until such time as the additional units can be built. Access will manage these units during this time. Once the property is condominimized and the additional two Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation units completed, the current tenants will be offered to either purchase the units or remain as tenants. Upon the voluntary vacation of the units by existing tenants the units will be offered for sale to low income buyers with all the land remaining in the trust.Ñ Although this strategy may resolve some relocation costs in that the tenants would not be permanently displaced by a federally funded (CDBG) project, it does raise questions regarding the eligibility of the project as a qualified project. In the event at least one of the two households qualifies as low-moderate income the acquisition of the duplex by ACLT would meet the national objectives for use of CDBG funds. However, if neither household qualifies, then at the point of acquisition there would be no low-moderate beneficiaries of the project. Further, even after the Habitat component was constructed with only 2 of the 4 units serving low-income households, the project as a whole would not qualify as serving 51% low-moderate income households. In any circumstance ACLT at this point needs to provide the existing tenants with the Uniform Relocation Act standards and inform them they may be eligible for assistance if displaced. Further, prior to acquisition ACLT should obtain the income qualification materials (W-2 etc) from the tenants to ensure they qualify as beneficiaries of the CDBG program, and if not the relocation costs need to be determined and factored into the total project costs. AshlandÓs Consolidated Plan requires projects utilizing CDBG funds that trigger displacement of existing tenants provide the City with a relocation and assistance plan to be carried out in conjunction with the funded activity. Property Development It appears that the driveway that serves as access to the rear of the parcel is in large part on the adjoining property. No evidence of easement was submitted with the application and Staff is concerned that should the adjoining property owner preclude access for the additional units, the development of the property could be restricted. ACLT should be prepared to address this issue, and should this proposal be selected, prior to acquisition with CDBG funds staff would recommend an access easement be recorded on the adjoining property allowing for both the new dwellings to have vehicular access and allow emergency apparatus (Fire/Ambulance) to use the drive as a staging area. Additionally, should any of the utility extensions to the rear of the property traverse the property line the easement should indicate right to use this area for their installation and maintenance (private or public utility easement). Development costs The development of the property will trigger the requirement for onsite and public facility improvements not identified in the ACLT application. Such items required during a site review for multifamily development (or condos) will include sidewalks, parking improvements, landscaping, street trees etc. As the cost for these items are not explicitly identified in the proposal Staff must assume that the $97,000 identified on Form B of the application is to include the construction of these items and the difference between the original purchase price ($399,000) and the CDBG request ($328,000). As the difference Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation between the properties asking price and the CDBG request is $71,000 this only leaves $26,000 to pay for the entire rehabilitation and site improvements. As an attachment to the ACLT application they provided Habitat for HumanityÓs per-unit development cost of $114,286. The support letter from Habitat for Humanity identifies $340,000 in contributions to the project which appears to be sufficient to cover the development costs of the new units (estimated at $228,572) with a surplus ($111,428) to cover additional costs incurred. Within the uses of funding ACLT notes Legal/accounting costs at $2000 which from comparable projects is well below average for a Ðcondominium conversionÑ of existing units. Staff has spoken with private developers and received an estimate of $10,000 in legal fees associated with the condominium conversion process. Further the relocation fees are estimated at $1,707. As noted above, such costs may be considerably higher in the event a household needs to be permanently displaced as a result of the project (48-60 months difference in rents/utilities between this unit and a comparable unit plus moving costs including an adjustment for ability to pay if the household is low-income). Lastly the application notes that the land use approvals cost would be $0. The application for a condominium conversion Conditional Use permit is $832, and the site review application to develop the two additional units is $832 plus $57 per unit. These costs are additive and not waived by the City and thus should be considered as part of the total project costs. Overall staff has concerns that the project costs are not presented accurately and thus should the project be selected Staff would recommend that any acquisition be contingent upon ACLT providing a more detailed project performa that establishes all funding sources (including rents and in-kind donations) to establish that the project has the necessary funding to be completed. Conflicts of Interest and covered persons. The CDBG Program has specific requirements to ensure that CDBG funds are awarded fairly and that elected and appointed, officials or employees of the grantee do not participate in a decision making process to gain inside information or influence the outcome of such proceedings to further personal financial interests. ACLT be a community based organization has a number of board members that fall into the category of a coverd person and thus are subject to the CDBG requirements. CFR 24 570.611 Conflict of interest A(c) Persons covered. The conflict of interest provisions of paragraph (b) of this section apply to any person who is an employee, agent, consultant, officer, or elected official or appointed official of the recipient, or of any designated public agencies, or of subrecipients that are receiving funds under this part. Covered Persons Kerry Kencairn Î Former Planning Commissioner and ACLT Board Member. Although the Planning Commission has no oversight into the award of CDBG funds, Ms. KenCairn is considered a Ðcovered personÑ by HUD CDBG regulations due to her recent service on a Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation City decision making body (within one-year of her tenure). As the current Planning Commission would ultimately be in a position to review the Site Review and condo- conversion proposal there may be a concern that Ms. KenCairnÓs prior service could be perceived as excerpting undue influence in the planning review process. Thus it is prudent for this board member to abstain from speaking before the Planning Commission or City Council regarding this application. As Ms. KenCairn is a Ðcovered personÑ should she be in a position to financially benefit from the ACLT project this relationship needs to be outlined and the City Attorney must render an opinion that no violation of State or local law has occurred. This opinion is then sent to HUD as a request for their legal council to review the materials and issue a waiver to the conflict of interest provisions. Jennifer Henderson Î Ashland Housing Commissioner and ACLT Consultant. As disclosed in the application ACLT recognizes this conflict and as such Ms. Henderson will recuse herself from all deliberations of the Housing Commission and City Council proceedings regarding this grant proposal. As Ms. Henderson is a Ðcovered personÑ should she be in a position to financially benefit from the ACLT project this relationship needs to be outlined and the City Attorney must render an opinion that no violation of State or local law has occurred. This opinion is then sent to HUD as a request for their legal council to review the materials and issue a waiver to the conflict of interest provisions. Bill Molnar Î Interim Community Development Director and ACLT Board Member Bill Molnar is considered a Ðcovered personÑ by HUD CDBG regulations (570.611) due to his employment with the City of Ashland and service on the ACLT board. Mr. Molnar is not in a position to have a financial benefit from the project, but as a Ðcovered personÑ the City Attorney must render an opinion that no violation of State or local law has occurred. This opinion is then sent to HUD as a request for their legal council to review the materials and issue a waiver to the conflict of interest provisions. Krista Bolf Î ACLT Board Member and Listing Agent of the subject property Although Mrs. Bolf is not a City employee or official, the CDBG regulation noted above includes agents and officers of subrecipients that are receiving funds under this part. Therefore she is also a covered person subject to the determination by the City and HUD Legal council noted above. Additionally Staff has raised the issue of a potential conflict in that it is her responsibility as the listing agent to provide the seller with the maximum sales price attainable, whereas it is in ACLTs interest to pay no more than Fair Market Value for the subject property. Staff is concerned that the listing price published in the Multiple Listing Service of $399,000 for the subject property differs from the acquisition cost of $425,000 noted in ACLTÓs proposal. Thus Staff recommends that in the event the project is selected , that an appraisal be completed on the property to establish fair market value and that this clear and objective determination be used to establish the purchase price. This would assist in demonstrating that there was no above market compensation for the property purchase. Timing of acquisition ACLT has questioned staff as to how the acquisition timing would proceed. Specifically they expressed that as the current seller is part of a Ò1031 ExchangeÓ this property must sell Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation by June 30, 2006. As noted previously the CDBG funds from the 2006 program year will not be available until July 1, 2006 at the earliest. However, in consulting with AshlandÓs HUD representative it was explained that provided that a site had received Environmental Clearance, and that the City had approved the activity in the 2006 Action Plan, the City could provide a dated award letter to the applicant (ACLT) that would enable them to subsequently take out a bridge loan, and have those funds reimbursed with CDBG after July 1, 2006. In the event the applicant incurred any debt (a loan) prior to the receipt of the dated award letter, those costs could not be reimbursed. In the event this project is selected for an award it is staffs recommendation that the Phase I Environmental Review be completed by ACLT immediately, so the City could complete the Environmental Clearance concurrently with the process of adopting the Action Plan and submitting Conflict of Interest waiver requests. The 2006 Action Plan would not be approved by the City Council and a letter of award drafted th until May 19 at the earliest. ACLT Bridge Street Duplex Acquisition strengths weaknesses Meets one of highest priorities in No access/utility easement currently in place Consolidated Plan Î provision of affordable to serve the rear of the property. ownership housing. The target group for ownership units is Potential displacement of existing tenants families making less than 60% of median may trigger relocation costs not identified. income (extremely low or low-income). Rehabilitates the existing duplex in a Potential conflicts of interest to be resolved designate low-income neighborhood. Retains two existing units as affordable. Collaboration between ACLT, Access, Project cost estimates and funding sources do and Habitat for Humanity utilizes each not appear to correspond. Staff believes the organizationÓs strengths on one project. application does not adequately account for construction and condominimization costs. Habitat for Humanity is a means of Home-owner builders can not be the leveraging CDBG with sweat equity and contractors for individual condominiums, Staff low interest (no interest) loans to is unclear from the application how Habitat for significantly lower the purchase price of the Humanity would structure the contractor- homes. homeowner relationship to comply with the Building code limitations in this regard. Ready to proceed with acquisition Î property listed for sale. Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation CERVS Interfaith Care Community Formally the Interfaith Care Community of Ashland (ICCA) the local non-profit was consolidated into the parent organization , CERVC Interfaith Care Community, last year. This parent organization serves residents throughout the Medford Ashland area. However the organization still operates within Ashland and specifically provides services to the homeless and very low income residents within our community. ICC has applied for $32,000 in 2006 CDBG funds to assist in the creation of a new full time staff position responsible to assist their clients in gaining the skills necessary to succeed in transitional housing. The application states that ICC is seeking a Community Development Block Grant to: ÐÈ fund a full time staff position for a Transitional Housing Coordinator/ Case Manager position to evaluate current and new clients in order to develop long-range plans based on family status, educational, skills and needs level with the goal to create a pool of low income clients who will, through training for both job and life skills, be prepared to enter long term transitional housing when available and to be successful in maintaining a independent status.Ñ The use of CDBG funds to create ÐnewÑ positions that provide direct benefits to low or extremely low income persons is an eligible use of CDBG funds. The amount dedicated to such an application is limited to 15% of the annual award. The request of $32,000 is 15% of the annual allocation for 2006 and thus complies with this regulation. Services to homeless is prioritized in the CityÓs 2005-2009 Consolidated plan as the applicants proposal demonstrates. Although this is a relatively straight forward use of CDBG funds, toward an eligible use, staff has a number of concerns relating to the proposal: Geographic access Currently ICC operates four transitional housing homes in Medford, but has no such facility in Ashland. The applicant anticipates a 25 unit transitional housing facility will be constructed in Ashland during 2007, but at this time staff questions where individuals ÐgraduatingÑ from the skills training provided by a Transitional Housing Coordinator/ Case Manager position would ultimately be housed. This question does not intend to minimize the importance of skills training in general, and that alone is a valuable means of moving extremely low-income individuals toward self sufficiency. With ICCÓs primary office in Medford the City of Ashland funded position would need to focus on Ashland residents and staff is concerned that such a distinction may be difficult if the position was physically located in Medford. The target population of AshlandÓs homeless may have difficulty meeting with a case manager outside of the Ashland area. Staff recommends that the applicant, ICC, clarify how services would be provided specifically to Ashland residents. Organizational structure and capacity The application neglected to answer questions A 5-7 on page 23 of the RFP. Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation Question number A5 asks if the organization is a religious organization. It should be explained that there is no preclusion against a faith based organization from receiving federal funds, and that ICC is an eligible recipient as a designated 501C3 organization. However, in the event an award is made the City needs this information regarding religious affiliation to complete HUD reporting requirements. Questions A6-7 assist the City in evaluating in part the capacity of an organization to administer a CDBG grant. ICCA had received CDBG funds previously, and ICC has received funding through the City of Medford in prior years. In the past ICCA cited difficulty in obtaining sensitive statistical information from clients such as income, race or ethnicity, and familial status, and ICCA stated that collecting this information functioned as an impediment to some prospective clients. However the use of CDBG funds would require that such information be collected for 100% of the individuals utilizing the services of the proposed Transitional Housing Coordinator/ Case Manager. It is essential that the application of CDBG funds demonstrate the awarded funds were directed to the target population, and that minority groups were included as beneficiaries. Accurate and consistent quarterly reporting is vital to provide this accountability. To address these questions the applicant should respond in the public hearing to clarify their application. Specifically of concern by staff is the applicants understanding of, and willingness to report upon, the CDBG required client data. Wage determination. The City of Ashland requires of recipients of more than 15,000 in grants that those people employed with those funds be paid a ÐLiving wageÑ. As this project entails hiring a full time person with these funds, it would be incumbent upon the applicant to demonstrate this position is compensated at or above the current Living Wage of $11.74 per hour. CERVS ICC Transitional Housing Coordinator strengths weaknesses Meets one of highest priorities in No current transitional housing facility in Consolidated Plan Î provision of affordable Ashland to locate the clients served. 25 unit ownership housing. transitional housing facility scheduled for Spring 2007. The target group for transitional housing Questions remain regarding where the new counciling are individuals and families position would reside. If in Medford staff has making less than 30% of median income concerns that the program may not specifically (extremely low income) and homeless. target Ashland residents. Program aims to build skills as a Application Checklist (pg 23) not complete. comprehensive approach to help Specifically the questions regarding CDBG people out of homelessness and gain experience and willingness to provide reports independence and self sufficiency, not required by HUD were unanswered. simply a safety net service. Coordinates with existing resources such as the Jobs Center, Good Will, Department of Human Services, and Consumer Credit Counseling to assist clients. Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation CDBG Project Proposal Rating Criteria The final step in the process of evaluating the proposal is for the Housing Commission to apply the following compliance criteria to determine which project(s) best meet the City's spending priorities. Each application is to be rated on a high-medium-low scale for each criterion. Staff has provided evaluations for each proposal received. A. The Project provides benefit to a demographic group that has a need documented in the City of Ashland CDBG Consolidated Plan B. The project assists low and moderate-income households in substantially improving their living conditions. The proposed project must have or be part of a comprehensive approach that takes clients from the beginning to the end of the process that improves their living conditions. ÐSafety netÑ services, or services that meet basic needs shall only be funded if it can be demonstrated that clients receiving those benefits are part of a program that will eventually help them obtain self sufficiency. Exceptions to this requirement are projects targeted at helping people with special needs. C. The project is a proven effective strategy to improve conditions or solve an identified problem. D. If the project is related to affordable housing, the project retains the units as affordable. The longer the period of time the units remain affordable, the higher ranking the project shall be given E.If the project is related to economic development for jobs for low and moderate-income people, at least 51% of the jobs shall be held by low and moderate income people. The longer period of time the jobs are held by low and moderate-income persons, the higher the ranking the project shall be given. The larger percentage of jobs held by low and moderate-income persons the higher the ranking the project shall be given. F. The project maximizes partnerships in the community G. The project has at least 10% of the total project in matching funds. The larger the amount of matching funds the higher the ranking the project shall be given H. The project utilizes already existing resources in effective and innovative ways. The project shall not duplicate service provided by another organization I. The agency submitting the proposal has the capacity to carry out the project J. The budget and time line are well thought out and realistic K. The proposal demonstrates CDBG funds are the most appropriate funding source for the project L. The project is ready for implementation within a year of a CDBG award notification M. The organization proposing the project has the experience and capacity to undertake the proposed activity. Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation RVCDC Project Rating Criteria A. The Project provides benefit to a demographic group that has a need documented in the City of Ashland CDBG Consolidated Plan. HIGH: The need for low-moderate income ownership households is clearly identified as needed in the Consolidated Plan. Specifically providing 40% of the units (3) for households earning less than 50% median income benefits a demographic group that will not otherwise have home ownership. B. The project assists low and moderate-income households in substantially improving their living conditions. The proposed project must have or be part of a comprehensive approach that takes clients from the beginning to the end of the process that improves their living conditions. ÐSafety netÑ services, or services that meet basic needs shall only be funded if it can be demonstrated that clients receiving those benefits are part of a program that will eventually help them obtain self sufficiency. Exceptions to this requirement are projects targeted at helping people with special needs. HIGH: Permanent housing is an essential element in improving living conditions and would substantially improve the living conditions of the homebuyers. Further the Self-Help program functions to teach skills to participants that are applicable to homeownership and perhaps even construction job skills applicable elsewhere. C. The project is a proven effective strategy to improve conditions or solve an identified problem. LOW: Although the Self-Help program is a successful program utilized nationally to address low-income housing needs it can not be utilized as proposed. The programs strength is in lowering construction costs buy utilizing the labor of the home buyers. This home-owner builder is permissible under building codes for independent homes, but is not permissible for interdependent structures such as condominiums. Thus it is staffs understanding that the strategy proposed could not be implemented in this case. D. If the project is related to affordable housing, the project retains the units as affordable. The longer the period of time the units remain affordable, the higher ranking the project shall be given HIGH: The RVCDC proposal states that RVCDC would retain ownership of the land and maintain the units as affordable through a 99 year land lease. E. If the project is related to economic development for jobs for low and moderate-income people, at least 51% of the jobs shall be held by low and moderate income people. The longer period of time the jobs are held by low and moderate-income persons, the higher the ranking the project shall be given. The larger percentage of jobs held by low and moderate-income persons the higher the ranking the project shall be given. N/A F. The project maximizes partnerships in the community Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation HIGH: The proposal involves working with the USDA Self-Help Program and potential the Job Council to provide further resources to the project. (This ranking assumes the project is feasible as proposed, however under section C above that assumption is questioned) G. The project has at least 10% of the total project in matching funds. The larger the amount of matching funds the higher the ranking the project shall be given High: The proposal identifies a project cost of $984,738. The request is for $360,800 in CDBG funds for land acquisition. This amounts to 36% of the total project cost. H. The project utilizes already existing resources in effective and innovative ways. The project shall not duplicate service provided by another organization LOW: As the selected site for the CDBG funded six-unit affordable housing development is already required to be developed as 6 units of affordable housing (at or below 80%AMI) there is effectively no net increase in units as a result of this proposal. It is duplicative of what is otherwise required of the private developer. It should be noted that there is an increase in the period of affordability, and a number of the units would benefit lower income levels in the RVCDC proposal. I. The agency submitting the proposal has the capacity to carry out the project MEDIUM: RVCDC has demonstrated success in Ashland. However, staff has concern over the number of projects they will be undertaking in the program year based on past awards (Ashland 15 units, Medford approximately 8 units). RVCDC was given awards from Ashland's CDBG program in 2002, 2003, and 2004 reprogrammed funds, however have not yet completed the development of affordable housing with those prior awards although 9 of 15 units are currently in the construction phase. Further in 2005 the 190,000 awarded for a straight forward acquisition was not completed in the program year, thus the award was rescinded. Staff does have continuing concern that in undertaking a new project, RVCDC may deter attention, and direct resources away from completing the projects that have already been funded. Without the contribution of Self-Help, the project does not have the financial solvency to be completed. J. The budget and time line are well thought out and realistic MEDIUM:: The proposal does provide details regarding the estimated project costs as well as anticipated dates for development benchmarks. However survey costs and insurance costs are not provided which would be incurred on the project. Specifically the survey costs are typically higher for condominiums (3-dimentional space) that the typical land division. Legal Fees as indicated at $5,000 appear low from estimates provided for condominium conversions. Of particular concern is the timeline as it relates to the sellers indication of when a binding agreement would have to be in place as explained previously. Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation K. The proposal demonstrates CDBG funds are the most appropriate funding source for the project LOW: Although a primary goal of the Ashland CDBG program is to provide decent housing for low- and moderate-income families, Staff does have some measure of concern over the application of CDBG funds to assist in the development of affordable housing otherwise required of a private developer. L. The project is ready for implementation within a year of a CDBG award notification. HIGH: The applicants proposal indicates that acquisition would take place in July of 2007, and that construction would be complete by July of 2007. With site review approval complete the development of the 6 unit condominium on the site could proceed with the approval of building permits provided there is no significant alteration from the original plan approved by the planning commission. (this ranking does not address the issue of whether home-buyer labor can be used) M. The organization proposing the project has the experience and capacity to undertake the proposed activity. MEDIUM: Staff believes that RVCDC clearly has the experience and expertise to undertake the activity, however staff again has reservations about their capacity to accommodate the number and complexity of other projects presently underway in addition to a new activity. It had been a staff recommendation previously that RVCDC obtain the experience gained by completing a Self-Help project in its entirety before applying again for CDBG funds to undertake another. Staff maintains this recommendation. Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation Ashland Community Land Trust Rating Criteria A. The Project provides benefit to a demographic group that has a need documented in the City of Ashland CDBG Consolidated Plan. HIGH: The need for low income ownership households is clearly identified as needed in the Consolidated Plan. Specifically providing two new units for households earning less than 60% median income benefits a demographic group that will not otherwise experience home ownership. B. The project assists low and moderate-income households in substantially improving their living conditions. The proposed project must have or be part of a comprehensive approach that takes clients from the beginning to the end of the process that improves their living conditions. ÐSafety netÑ services, or services that meet basic needs shall only be funded if it can be demonstrated that clients receiving those benefits are part of a program that will eventually help them obtain self sufficiency. Exceptions to this requirement are projects targeted at helping people with special needs. HIGH: Permanent housing is an essential element in improving living conditions and would substantially improve the living conditions of the homebuyers. Further through the Habitat for Humanity sweat equity model, households learn skills that help them maintain their housing and potentially job skills that can apply elsewhere. C. The project is a proven effective strategy to improve conditions or solve an identified problem. HIGH: ACLT owning the land, and selling the improvement is a proven strategy locally and nationally to address the upward spiral of housing costs. In this project their partner, Habitat for Humanity, completes approximately 30,000 affordable housing units each year and as a local organization has developed 26 homes, providing permanent housing for 86 children and 35 adults within the Rogue Valley. Additionally the donated labor and materials obtained by Habitat for Humanity and the no-interest loans the organization provides to the homebuyers brings ownership opportunities to within the grasp of low income households. D. If the project is related to affordable housing, the project retains the units as affordable. The longer the period of time the units remain affordable, the higher ranking the project shall be given HIGH: the ACLT model maintains the property in trust in perpetuity, or at a minimum for 99 years through a lease and deed restrictions on the property. E. If the project is related to economic development for jobs for low and moderate-income people, at least 51% of the jobs shall be held by low and moderate income people. The longer period of time the jobs are held by low and moderate-income persons, the higher the ranking the project shall be given. The larger percentage of jobs held by low and moderate-income persons the higher the ranking the project shall be given. N/A Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation F.The project maximizes partnerships in the community HIGH: The proposal involves Habitat for Humanity, and furthers community partnerships through obtaining donations of labor and material from area residents and businesses. G. The project has at least 10% of the total project in matching funds. The larger the amount of matching funds the higher the ranking the project shall be given HIGH: The proposal identifies an estimated project cost of $487,156. Further the Habitat for Humanity cost estimates appear to indicate each additional unit will cost $114,286 to develop and this cumulative $228572 is not identified as a project cost in the proposal. The request is for $328,000 in CDBG funds for land acquisition. This amounts to 67% of the total project cost ($487,156) as presented. However as noted previously Staff believes the project costs have not been fully presented in the application. Most notably the value of Habitat for Humanity contributions, and design work is not quantified in the Uses of Funding table (form B). Were these items calculated it is likely the CDBG contribution would be considerably less. H. The project utilizes already existing resources in effective and innovative ways. The project shall not duplicate service provided by another organization HIGH: Acquisition and rehabilitation of existing units is an expitidous way to create affordable housing, additionally the site selection of a property with further development potential leverages the resources with Habitat for Humanity to create two additional uses. I. The agency submitting the proposal has the capacity to carry out the project HIGH: Ashland Community Land Trust currently has no other project underway. Further, their proposed partner on this project, Habitat for Humanity, has the experience and resources to complete the development as proposed. J. The budget and time line are well thought out and realistic LOW: The proposal does not consider potential relocation cost, accurate legal costs, and does not provide a detailed evaluation of the construction cost related to providing the two new units. It is recognized that as the partner, Habitat for Humanity, would be developing these units utilizing volunteer labor and many donated materials, however the budget for this component is not not included as part of the total project cost form. Further the timeline provided assumes one year timeline for Land Use approval. This process should take less than 3 months assuming the proposal meets all requirements. Immediately after approval building permits could be submitted and upon approval construction could be initiated as early as September-October of 2006. The recording of a condominium survey can occur subsequent to, or concurrent with, the development of the site (once footings are in) and thus the projects schedule of initiating construction in May 2007 seems to be overly conservative. K. The proposal demonstrates CDBG funds are the most appropriate funding source for the project HIGH. Acquisition of property for the provision of affordable units is an appropriate use of CDBG. As this site is not otherwise regulated to require affordability, this investment Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation would create new affordable units where they would not otherwise be developed. Further as this site is in a qualified low-income Census tract, the rehabilitation of the existing units has secondary benefits of assiting in revitalizing the neighborhood. L. The project is ready for implementation within a year of a CDBG award notification. HIGH: The acquisition of the property would be straight forward if selected for acquisition. The rehabilitation proposed would also be an activity that could be completed without delay. The property is zoned appropriately for the proposed use, and although land use approvals are required, this aspect could be completed, and construction initiated within a year of selection. M. The organization proposing the project has the experience and capacity to undertake the proposed activity. HIGH: Staff recognizes that ACLT and Habitat for Humanity have demonstrated successes, and staff has confidence that they have the experience and expertise necessary to complete the development as proposed. Further it is Staffs understanding that neither organization has other activities planned for the coming year, thus they could dedicate the time and resources necessary to completing this activity. Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation Interfaith Care Community Rating Criteria A. The Project provides benefit to a demographic group that has a need documented in the City of Ashland CDBG Consolidated Plan. HIGH: The need for direct client services to extremely-low income individuals and families is clearly identified as needed in the Consolidated Plan. B. The project assists low and moderate-income households in substantially improving their living conditions. The proposed project must have or be part of a comprehensive approach that takes clients from the beginning to the end of the process that improves their living conditions. ÐSafety netÑ services, or services that meet basic needs shall only be funded if it can be demonstrated that clients receiving those benefits are part of a program that will eventually help them obtain self sufficiency. Exceptions to this requirement are projects targeted at helping people with special needs. HIGH: Transitional housing is an essential element in improving living conditions and providing a step out of chronic homelessness. The skills training and housing counciling provided directly through the Transitional Housing Coordinatopr potition, or through referrals, would assit individuals in developing lasting competencies to increase their self sufficiency. C. The project is a proven effective strategy to improve conditions or solve an identified problem. MED: Transitional Housing is a proven step in moving people out of emergency housing (or homelessness) and into permanent housing. The Transitional Housing Coordinator would be a useful component of this strategy, however the lack of a transitional housing facility in Ashland (the final step in the strategy) is of concern and could reduce the effectiveness of the client counseling and skills building provided. D. If the project is related to affordable housing, the project retains the units as affordable. The longer the period of time the units remain affordable, the higher ranking the project shall be given N/A E. If the project is related to economic development for jobs for low and moderate-income people, at least 51% of the jobs shall be held by low and moderate income people. The longer period of time the jobs are held by low and moderate-income persons, the higher the ranking the project shall be given. The larger percentage of jobs held by low and moderate-income persons the higher the ranking the project shall be given. N/A F. The project maximizes partnerships in the community HIGH: The proposal involves coordination with existing agencies to be utilized by clients of ICC to obtain direct support and job training. Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation G. The project has at least 10% of the total project in matching funds. The larger the amount of matching funds the higher the ranking the project shall be given MED: The proposal identifies an estimated project cost of $49,000. The request is for $32,000 in CDBG funds to contribute toward the salary of the new position identified. This amounts to 65% of the total project cost as presented. H. The project utilizes already existing resources in effective and innovative ways. The project shall not duplicate service provided by another organization HIGH: Coordination with existing agencies (Job Council, Consumer Credit COunciling, State Adult and Family Services, Goodwill etc), reduces the possibility of duplicative service while maximizing the benefits to the individual clients. I. The agency submitting the proposal has the capacity to carry out the project MED: ICC clearly has the capacity to provide the Transitional Housing Coordinator position and corresponding case manage,ment. Here the Medium ranking is reflective of the lack of a transitional housing facility in Ashland to assist in completing the ÐtransitionÑ from homeless to housed within Ashland. J. The budget and time line are well thought out and realistic MED: The applicant requests $32,000 for the position and establishes a project cost of $49,000. From the materials submitted staff can not determine whether the remaining $17,000 has an identified funding source. K. The proposal demonstrates CDBG funds are the most appropriate funding source for the project HIGH. The use of CDBG to provide homeless services is an appropriate use as identified in the Ashland 2005-2009 Consolidated Plan. Further, without a CDBG contribution the limited funding available to ICC as shown in L. The project is ready for implementation within a year of a CDBG award notification. HIGH: The acquisition of the property would be straight forward if selected for acquisition. The rehabilitation proposed would also be an activity that could be completed without delay. The property is zoned appropriately for the proposed use, and although land use approvals are required, this aspect could be completed, and construction initiated within a year of selection. M. The organization proposing the project has the experience and capacity to undertake the proposed activity. HIGH: Staff recognizes that ACLT and Habitat for Humanity have demonstrated successes, and staff has confidence that they have the experience and expertise necessary to complete the development as proposed. Further it is Staffs understanding that neither organization has other activities planned for the coming year, thus they could dedicate the time and resources necessary to completing this activity. Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation Staff Recommendation In evaluating the proposals received, and applying the selection criteria outlined above, Staff recommends awarding Ashland Community Land Trust (ACLT) $328,800 in CDBG funds for land acquisition , and The Interfaith Care Community (ICC) $32,000 as requested for the new Transitional Housing Coordinator Position. With these recommendations Staff proposes the following conditions of selection be considered by the Housing Commission and City Council: Ashland Community Land Trust Prior to site acquisition ACLT determine the incomes of existing tenants and potential relocation costs, and an associated relocation plan if necessary, be determined and provided to the City of Ashland. Prior to site acquisition ACLT provide a more detailed project performa that establishes all funding sources (including rents and in-kind donations, Habitat contributions, etc) to establish that the project has the necessary funding to be completed. Further a revised timeline with accomplishment benchmarks should be provided to the City. Prior to acquisition with CDBG funds an access/utility easement be obtained securing access to the rear of the property Prior to acquisition with CDBG funds, conflict of interest waivers be received from the Dept. of Housing and Urban Development Interfaith Care Community CDBG funds used for social service functions are a ÐreimbursementÑ of funds expended that benefited the target population. In order to reimburse costs (such as employee salary as proposed) it is imperative that the City receive timely reporting of accomplishments and clients served. Prior to the distribution of CDBG funds Staff would recommend that ICC work with the City to develop benchmarks, or performance measures, to be used in evaluating the effectiveness of the position funded in serving AshlandÓs Homeless and Special Needs populations. Department of Community Development Tel: 541-488-5305 20 E. Main St Fax: 541-552-2059 Ashland, Oregon 97520 TTY: 800-735-2900 www.ashland.or.us 2006 CDBG Proposals- Staff Evaluation