Neighborhood Stabilization Program Minneapolis Plan

Transcript Neighborhood Stabilization Program Minneapolis Plan

Desert Hot Springs Neighborhood Stabilization Program & Neighborhood Renewal Plan

January 2009 1

Presentation Overview

• Neighborhood Stabilization Program (NSP) – Program Requirements • Foreclosure Analysis – Field Findings – Opportunities – Building a Better DHS • DHS Housing Fund Opportunities – Uses • DHS Redevelopment Agency Financing – Housing Set-Aside Opportunities 2

Neighborhood Stabilization Program (NSP)

Desert Hot Springs Neighborhood Stabilization Program Requirements & Elements:

• NSP Funds awarded to the City/County • One time emergency funds to address foreclosures • Funds must be “obligated” within 18 months • Funds must be spent on foreclosed properties and related expenses only • Funds can be spent on families up to 120% AMI • 25% of funds must be spent to assist families at or below 50% AMI 4

Housing and Economic Recovery Act of 2008 Neighborhood Stabilization Program Foreclosure Recovery Plan Activities Eligible Uses A. Establish

financing

mechanisms for purchase and redevelopment of foreclosed upon homes and residential properties B.

Purchase and rehabilitate

homes and residential properties that have been abandoned or foreclosed upon in order to sell, rent, or redevelop Program Sources NSP Funds Foreclosure Recovery Low-Income Homeownership and Rental Program Foreclosure Recovery Rehabilitation Program C. Establish

land banks

for homes that have been foreclosed upon Foreclosure Recovery Land Bank Program D.

Demolish

blighted structures Regulatory Services Demolition of Blighted Structures E.

Redevelop

demolished or vacant properties * The Neighborhood Stabilization Program requires that 25% of the funds received must be targeted to households at or below 50% of the area median income. 5

Foreclosure Analysis 6

Desert Hot Springs Foreclosure Study Summary

In Project Area Outside of Project Total- City Wide Notice of Default (NOD) Notice of Trustee Sale (NTS) Foreclosure 42 66 43 71 85 137 228 54 282 Totals 336 168 504

Foreclosure Map

Foreclosure Summary Findings

Typical Foreclosed Properties

Public Housing Opportunities Multi-Family Units / Large Lots

Foreclosure Opportunities Code Deficient Properties

Housing Constraints Public Infrastructure

Housing Constraints Code Enforcement Efforts

Home Ownership

Home Ownership Analysis

Desert Hot Springs Housing Set-Aside Funds 18

Desert Hot Springs Redevelopment Agency Housing Set-Aside Funds Housing funds may provide additional flexibility when compared to NSP criteria • Property acquisition • Property rehabilitation • Down payment assistance • Related infrastructure improvements 19

What Does State Law Require?

• An Agency must use at least 20 percent of its tax increment revenue to increase, improve and preserve the supply of low- to moderate-income housing in the community (the “Housing Fund”; CCRL Section 33334.2); • Funds can be used for foreclosures and other housing needs in the community • Funds may be used in and outside of the project area with the appropriate findings 20

How is Affordable Defined?

• The CCRL defines three target income groups: •

Very-Low-Income:

Households whose income does not exceed 50% of the county’s median income adjusted for family size; •

Low-Income:

does not exceed 80% of the county’s median income adjusted for family size; and Households whose income is greater than 50% but •

Moderate-Income:

but does not exceed 120% of the county’s median income adjusted for family size.

Households whose income is greater than 80% 21

How May Housing Funds Be Used?

• The Agency may use its Housing Fund moneys to improve real property or building sites with onsite or offsite improvements (i.e., curbs, gutters, sidewalks, etc.). The Agency may only use Housing Funds to finance offsite improvements if: • The improvements are part of the new construction or rehabilitation of affordable housing units for low- or moderate-income persons that are directly benefited by the improvements and are a reasonable and fundamental component of the housing units (i.e., are conditions or prerequisites of development); and • The Agency requires that the units remain available at affordable housing cost to, and occupied by low- to moderate-income households (i.e., 45 years for ownership housing and 55 years for rental housing).

Housing Funds With NSP Funds

• Housing Funds could, in whole or part, fund programs listed below which would work well with and enhance the use of NSP funds.

– A foreclosed home purchase down payment assistance deferred loan program for income eligible homebuyers. The program should provide financing for up to 20% of the purchase price subject to the home meeting all City housing quality standards (i.e., code and appearance), the buyer meeting a minimum contribution threshold and the home selling for no more than appraised value. The program would require 45-year affordability covenants.

– A foreclosed home acquisition and rehabilitation or acquisition, demotion and replacement program. The acquired and renovated (or replaced) units would be sold to income eligible households with 45-year affordability covenants. Eligible home buyers would be eligible for the down payment assistance deferred loan program.

Enhanced Housing Programs

• In conjunction with the special programs that would enhance the use of NSP funds, the Agency could offer additional home improvement programs that could be offered on a City-wide basis such as: • A large-scale (up to $20,000) home rehabilitation deferred loan program for income eligible homeowners that emphasizes code corrections and general rehabilitation. It is recommended that this program be limited to homeowners whose household income does not exceed 120% of AMI.

Enhanced Housing Programs

• A medium-scale (up to $10,000) home rehabilitation grant program for income eligible homeowners for exterior “curb appeal” enhancement improvements (i.e., painting, fencing, landscaping, etc.). It is recommended that this program be limited to homeowners whose household income does not exceed 50% of AMI.

• A small-scale (up to $5,000) home painting grant program for income eligible homeowners for repainting the exterior of their homes in order to correct existing or potential paint-related code deficiencies. It is recommended that this program be limited to homeowners whose household income does not exceed 80% of AMI 26

Resource Allocations

• Housing Rehabilitation Programs – Grant Programs • Homeowner Grant Program: A grant program for emergency and/or minor repairs to owner occupied single family residence.

– Loan Programs • Homeowner Loan Program: A deferred loan program for repairs to owner occupied single family residence.

Senior Citizen Programs

Requirements: • Owner Occupied, Single Family Residences • Homeowner(s) must be over the age of 62 • Total Household Income Cannot Exceed 80% Of The Area Median 28

Senior Citizen Programs

• Emergency Repair Program – Amount Shall Not Exceed $4,000 – Addresses Health, Safety and Welfare Items • Plumbing, roof, electrical, heating and HVAC • Disabled Accessibility Program – Amount Shall Not Exceed $10,000 – Addresses accessibility needs • Ramps, accessible bathrooms, and height adjustments 29

Senior Citizen Programs

• Landscape Improvement Program – Front Yard Only – Amount not to exceed $6,000 – Priority participation is recommended: Households receiving violations or located within priority neighborhoods • Paint Improvement Program – Amount not to exceed $7,000 – Priority participation is recommended: Households receiving violations or located within priority neighborhoods 30

Homeowner Programs

• Emergency Repair Program – Household Income Shall Not Exceed 120% of Area Median Income – Amount shall not exceed $4,000 – Addresses Health, Safety and Welfare Items • Plumbing, roof, electrical, heating and HVAC • Home Improvement Program – Household Income shall not exceed 120% of Area Median Income – Amount shall not exceed $20,000 – Addresses Code Items, deterioration of the structure • Fencing, painting, electrical, painting, windows, and roofing 31

Homeowner Programs

• Landscape Improvement Program – Household Income Shall Not Exceed 120% of Area Median Income – Front Yard Only – Amount not to exceed $6,000 – Priority participation is recommended: Households receiving violations or located within priority neighborhoods • Paint Improvement Program – Household Income Shall Not Exceed 120% of Area Median Income – Amount not to exceed $7,000 – Priority participation is recommended: Households receiving violations or located within priority neighborhoods 32

Housing Grant Programs: Paint, Fencing, and Landscape

Public / Private Partnerships 35

City of Desert Hot Springs Foreclosure/Housing Reinvestment Partnerships Coachella Valley Housing Coalition Neighborhood Stabilization Program County of Riverside Neighborhood Stabilization Program State of California Desert Hot Springs Redevelopment Agency Building Industry Association

City of Desert Hot Springs

HUD & Fannie Mae For Profit Housing Developers Real Estate Brokers Banks Owning Properties Local Trades: Plumbing Painting Electrical Landscaping Etc Non-Profit Housing Groups 36

RDA Financial Opportunities 37

Background on Housing Set-Aside Revenues

• Assessed values in the Merged Project Area declined 2.6% from 2007/08 to 2008/09 ($1.22BB → $1.19BB) • In 2008, the Agency issued $35,835,000 of TABs secured by non-housing revenues – “A” rating from S&P; 1.35x ABT • The Agency does not have any bonds secured by housing set-aside revenue • Projected Housing Set-Aside Revenue for

FY 2008/09 = $1.82 million Historical Assessed Value $1,400,000,000 $1,200,000,000 $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $-

Incremental Assesed Value Base Year Value

Calculation of Housing Set-Aside Revenue 2008/09 ASSESED VALUE

Project Area No. 1 Project Area No. 2 Added Territory 1998 $ 337,681,194 $ 171,794,428 $ 676,265,861

Total Merged Project Area AV $ 1,185,741,483 (Less Base Year AV) Taxable Value Over Base Gross Tax Revenues (1.0%) Housing Set-Aside (20%) $ (275,262,858) $ 910,478,625 $ 9,104,786 $ 1,820,957

2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09

Housing Set-Aside Bond Capacity

• • Assuming 7.5% interest rates, the Agency could issue about $16,120,000 of housing set aside TABs

$2,000,000 $1,800,000 $1,600,000 $1,400,000

–

$14.33 million

of net proceeds

$1,200,000

– $1.35MM annual debt service payment

$1,000,000 $800,000 $600,000

Assuming Agency only needs $10MM in proceeds, annual debt payment would be about $947,000 (1.92x coverage)

$400,000 $200,000 $0 20 09 Desert Hot Springs RDA - Merged Project Area Housing Set-Aside Bond Capacity

Proposed Debt Service (Max Capacity) 20% Housing Revenue 1.35x ABT

20 11 20 13 20 15 20 17 20 19 20 21 20 23 20 25 20 27 20 29 20 31 20 33 20 35 20 37 20 39

Neighborhood Stabilization Program and Housing Rehabilitation Plan

Foreclosures/Blighted Properties (All of Desert Hot Springs)

NSP / Housing Funds $10M

Foreclosure Prevention County of Riverside/CVAG Blighted Properties Redevelopment Agency / Coordinated Developers, Banks, HUD, And Fannie Mae Infrastructure Improvements Market Program Administration $ 1,000,000 Demolition Land Bank Subsidy Required Non-Profit Developers For-Profit Developers No Subsidy Required Financial rental / Homeownership Subsidy Required $5,000,000 40

Conclusions 41