HomeMy WebLinkAboutHousing & Redevelopment Authority Packet 05-24-1976A& E ft.0 A
PLYMOUTH HOUSING AND-REDEVELOPNENT AUTHORITY
May 24,, 1976
I. Roll Call
41. Minutosof April 20, 1974..Regular Meeting
111. New ,Business -Section 8 HouSing
IV. Adjournment
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CITY OF PLYMOUTH
3025 HARBOR LANE, PLYMOUTH, MINNESOTA 55441
TELEPHONE 1812.) 559.2800
DATE May 21, 1976 MEMO
TO: Housing and Redevelopment Authority
FROM: Charles E. Dillerud, Planning Director
SUBOECT: HRA Report -Section 8 Housing.
Somewhat responsive (as to timing at least) to the recent conversations Plymouth
has had with the Metropolitan Council HRA, Staff has prepared this report on HUD
Section 8 Subsidized Housing. We must note, however, that our previous discussions
of a 1976 HRA work program included such a report-- later in the year.
Stated simply, Section 8 is a relatively unq.mplicated method for closing the gapbetweenthelowerincomefamilies' abilf,*y ;,* -pay for good housing .and the rents
an apartment owner must charge to make his business venture profitable. The gove.rn
ment simply provides a "rent supplement" cash subsidy to make up the difference.
between a family's ability to pay (based on formula) and the market' relt charged
by the apartment owner.
Surely, there are limitations placed on the program as well as paper shuffling
require) to make it work. First, the limitations.
HUD has a flexed amount of money available for subsidies each,year, so it must set
a maximum subsidy per unit to insure fair program administration. To set a minimum
income figure would run contrary to pirogram goals so they, instead, have set a
maximum rent upon which the subsidy will be paid. Attached hereto, please find
current maximum rent schedules by the th-ree distinct categories of apartments
based on age of the structure).
With a fixed amount of dollars available and maximum rents established, HUD can
determine a reasonable range of actual units of Section 8 "available" nation-wide
In a given fiscal year. This number of units is then distributed geographically. Each HUD office thus has a "pool" of Section 8 units to allocate within its area
of responsibility. Our St. Paul HUD office has "committed" a block of their avail-
able units to the Minnesota Housing finance Agency (for new ,construction projects),
a block of units to the Metro HRA and a block of units to themselves for allocation
to the individual Minnesota communities.
Next, the paper shuffling. With all three age categories of Section 8 units# a
Section 8 "sponsor" must do the following;
1. "Broker" the units made available to the sponsor. That is, both find
eligible units within the community and find eligible renters for the
units. This amounts to marketing.
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2. Calculate the actual subsidy payments to be made when a unit/renter
match" is accomplished.
3. Make actual payments to the building owners that have certified Section 8
renters.
4. Annually inspect units under subsidy to ascertain if they .are still safe,
decent and sanitary.
5. Enforce Section 8 contracts -on both parties (ren -ter and owner).
Although many of these functions are clerical in nature, administration of a Section 8
Program in a community appears to be running around. $200 per unit per yap- for 40
units of Section 8 "existing" or more. Costs to administer Section 8 "new construction"
should be somewhat less but this still remains a mystery since no "new col"stru.ction"
units yet exist in the Metropolitan erea.
It is important to note that HUD realizes that the sponsor will incur local costs to
shuffle paper on a Section 8 projett. As such, they (HUD) provides for reimbursing
Section 8 sponsors for these reasonable cost occurrences in a Section 8 venture.
If Plymouth is to Rroduce subsidized housing units, we can either use Section 8 or
develop our own lociTTy funded program producing the same results. With respect to
our conversations on the topic with the Metro Council, it is clear that housing.
for )ower income persons is their issue and direct subsidy (like Section 8) appears
to be the only current solution. It appears also that relying on Section 8 "new
construction" to blossom is not a suitable response.
Should Plymouth decide to attempt placing Section 8 "existing" within the community,
we have two courses of action available:
1. Metro HRA
Ostensibly, this Metro Council related organization functions to provide economies
of scale in administering Section 8 programs for member communities. From what we
have lea.rried, this intent is indeed being met. Member communities we have talked
with appear well satisfied with the Metro HRA economies of scale approach. The
Section 8 units are being place, there is little local administrative hassle and the
Metro Council is happy about subsidized housing performance (as well they should be
since.they, in effect, are doing the performing).
2, . Local HRA
Plymouth could apply diwectly to HUD for a block of Section 8 units and administrative
subsidy to run our own program. This would involve:
A. Preparing a moderate size application by June 18.
B. If successful in obtaining a grant, we then must set up our staff, etc.
The application is not inordinately difficult to prepare and most preparation costs
are reimbursable'by HUD --if our grant is approved.
Surely we would requires new Staff position with time available to handle the "paper
shuffle" on a daily basis. We do not believe it is reasonable to expect a part-tiirk
to do the job effectively. This leaves us with the probability of a $12,000 to
15,000 gross -cost position only fractionally reimbursible by our Section 8
administrative supplement. The Council will recall that Planning Department's
budget of last year did project such a dilemma as possible and noted that Planning
also needs additional man hours (but not full time). It appeared reasonable the, and
does now, that one full-time professional coul f handle both active HRA functions
Section 8 administration) and supply the needed extra man hours to Planning. To
date the Planning manpower needs have been feet by the lucky combination of CETA
funds and .a professional -in -training willing to work at CETA wages for the experience
Mr. Thoreson). if CETA expires at the end of June, Planning will again be short
staffed.
For Plymouth, the housing scene is complex. We believe at least the following issues
exist:
I. bo we maintain our present approach by doing our Housing Element before
we actively engage in subsidized housing?
2. If we alter our present course and
unit production at this time, do we
program or do we join Metro HRA?
ATTA, ACHMENT
Section 8 Rent Schedule
decide to move into subsidized
apply directly to HUD for our own
Fair Market Rents -.April 6.1, 1976. Pabliabed Cate
All Amounts Are Maximum
Existing Construction --Less. than 6 yrs. old
0 Bedrooms 1(a2
1 Bedroom 19sivo.
2 Bedrooms 2.26/mo.
3 Bedrooms 05
4 Bedrooms 315
xisxing; Construction• -Over t..Lts, old
111 I ,A i.wl! +, A++r,1+ - WY 1! 14.f il' 1N
0 Bedrooms $144/mo.
1 Bedroom $164/mo.
2 Bedrooms $194/mo.
3 Bedrooms $224/mo.
4 Bedrooms $254/mo.
New Construction
Row Housing Apartments
Detached Semi-detached Walk-ups Elevator
OBR 216 244
1BR 259 284
20R 383 344 302 351
3OR 440 397 394
4BR 471 420 420
76% of market rent for recent;existing construction
CITY OF PLYMOUTH
3025 HARBOR LANE. PLYMOUTH, MINNESOTA 55441
TELEPHONE (612) 559.2800
DATE: May 13, 1976 E10
TO: Chairman Boland and Metropolitan Council
FROM: Al Hilder Jr., Mayor - lrity of Plymouth.
SUOiECT: FLYNQUT H PLAHNING AND PROGRESS REPORT
The City of Plymouth has, in reiont months, taken significant steps
toward the encouragement of lower cost; housing resources. While I am
certain that the Housing Division sof the Metropolitan Council is aware
of most, if not all, of these steps; I want to take this opportunity to
review our progress comprehensively by this letter. Our intent here. is
to point to our oft-statt-d goal to approach lower cost housing on a. fire,
broad front with the studied.l.ogic.that has -brought our community success
in such other endeavors es local planning for residential and industrial
development and financial administration. Our goal with housing, as with
our other endeavors, is to be successful rather than spectacular or heroic.
Specific areas in which Plymouth has progressed include:
Land Use Flexibility
Early in 1974, Plymouth adopted a new Planned Unit Development Ordinance
providing maximum flexibility in project design. In essence, the new
ordinance abandons lot size minimums in favor of ranerdl density zoning.
With no serviced residential land in Plymouth r'rided for less than three
gross units per acre and substantial serviscd residential acreage guided
between three and twenty gross units per acre, substantial opportunities
have been opened for housing cost reduction through maximum land use
efficiency..
It should be noted that our new PUD not only allows total lot size flexi-
bility within Guide Plan gross density parameters, but also provides for
total flexibility in setbacks and frontages.
Both the City and local developers have been learning the use of our new-
found flexibility. Several projects now are progressing through review
states. It appears that land use design efficiency will reflect some cost
savings to the housing consumer. It should be noted the! Plymouth did not
wait for others to push or lead in this area. We appro,,,cl these kinds of
development even .before our own ordinance was prepared ana adopted.
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Substandard Structures
Although Plymouth does not harbor significant nuaters of homMs substandard
for habitation, the former "second home" area around. Medicine Lake does
present selected areas of such structures. A. concentrated effort by our
Inspection Department is aimed at preserving and improving as many of
these older residences as possible to enhance these scattered areas as
viable lower cost housing alternatiNes: Removal.of the abandoned "eyesore"
structures using the State Hazardous Building Law improves the climate in
these areas for renovative investment by property owners. During 1974 and
1975, our records indicate ten (10) structure demolitions responsive to
our efforts. In many additional cases, the initiation of a Council Haz-
ardous Building Order has resulted in the renovation of an older structure
to a viable lower cost unit. In other cases, structure removal has resulted
in construction of modest new homes on the resulting lots. The opportunities
are limited and scattered, but we are endeavoring to make the most of each
opportunity.
The preservation and enhancement of the few older but serviceable resi-
dences in:Plymouth is being guided and coordinated through the .provisions
of the Uniform Housing. Code. The Code has recently been adopted in total
by City Council Ordinance. This code, of course, provides minimum health
and safetystandards that will assure that all: older, but viable, housing
units in our community remain "habitable" by an adopted standard.
Housing and Redevelopment Authority
Following a careful review of alternatives upon which to launch a concen-
trated approach to a locally balanced housing resource, the Plymouth City
Council has formally established a Plymouth Housing and Redevelopment
Authority consistent with State law. The Plymouth HRA held its organiza-
tional meeting January 26, 1976 and immediately directed Staff to present
considerations for a 1976 work program. The primary work program element
of the Plymouth NRA will be the design, coordination and review of the
Housing Element to the Plymouth Comprehensive Guide Plan. The Housing
Clement will provide the HRA with a rigorous investigation into the prob-
lems of, and opportunities for, the housing resource of Plymouth. The
result will be quantifiable needs, goal's and priorities. At the request.
of the Plymouth HRA, the Plymouth City Council has allocated up to $20,000
of the 1976 Plymouth Community Development Revenue Sharing entitlement
for HRA use in preparing the Housing Element. A local strategy toward an
affirmative "marketing" approach on Section 8 subsidies is certain to be a
major 1976 consideration.
Downtown Plymouth
We have been working towards the development of Downtown Plymouth for
several years. Downtown Plymouth, totalling approximately 300 acres, will
include a wide range of medium to high density housing, with particular
emphasis upon lower and moderate cost elderly and family units, convenience
shopping, medical and professional arts, offices, public buildings, includ-
ing park and recreation facilities. It now appears that these planning
efforts are being rewarded. Land assembly by developers committed to this
concept is completed. '7 ie planning for the first stage of development,
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which will Include public facilities suchas a Civic Center, Central Park,
Post Otfice, etc:, as well as Tow and moderate cost .housing, has commenced.
We are anticipating that actual development will begin in 1477. The
success of much of this development will, of cour3e, hinge upon feral
and/or state fiscal commitments to the various housing developments. With
the active participating of the City's HRA,, private developers, and other
resources of the federal ,And state government, wQ are confident that this
plan wi 1 i move forward.
To demonstrate its connitrent to the developmental concepts embodied in
Downtown Plymouth and continued sound planning, the City Council has allocated
the City's Community Development Revenue Sharing funds, estimated at
60,000, for the following:
1. $20,000 to develop a Housing Element in the City's Comprehensive
Plan. The study will center onthe community's housing needs,
priorities for satisfying these needs, and the development of a
plan and program to meet those needs.
2. $25,000 to review other elements of the City's Comprehensive
Plan to bring it into conformance with the requirements of the
Mandatory Planning Act.
3. $15,000 to initiate planning for Central Park, an integral part
of Downtown Plymouth.
The City has also received a IAWCON grant for land acquisition in Central
Park. This grant, providing $100,000 in state and federal: funds, will be
matched by a City contribution of $34,000 and will be the final major step
in developing this major park facility for the community.
These efforts reflect positive actions taken by
to further the balanced growth of our comunity.
these endeavors cannot yet be fully measured, we
will assist in making a fair and wider range of
people desiring to reside in Plymouth.
Financial Implications
the Plymouth City Council
While the result of
firmly believe that they
dwellings available to
Planning and the execution of these plans involves enormous energy and
sizeable expenditures. To some degree., particularly in the area of low
and moderate cost housing, state and/or federal financial assistance is
essential. Of greater importance, in -our judgment, is (1) the ability
of the community to finance its plo growth (all public utilities and
facilities) so as to encourage thr; gwow0, and (2) to maintain a local
tax climate which likewise encour 4,4. t mxaunity vitality. In this regard
we believe Plymouth is a leader..
Our public utility financing is based upon long-range forecasting of develop-
ment needs and anticipated costs. Through such forecasts and the use of
computer programs, we are able to annually review our utility debt service,
adjust assessment and usage rates so as to maintain a fiscally sound system.
The results of these efforts have been reflected in the improvement of the
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City's bond rating from "Baa" to "A" during the period many cities were
having difficulty in maintaining their ratings end at a very young stage
in our development. Our philosophv concerning recovering the costs of
public utility improvements has been_to assess the costs to the benefiting
property, dnd not to the property owners et -large via the property tax.
The se:ond major area of concern is to establish and maintain a sound
tax climate. While our local property tax amounts. to approximately 10
peretnt of the total property tax burden, we strive to keep it lore and to
contribute to the-:schoot, county and others by encouraging the growth of
tax base which produces a net tax gain. One of the major cost elements
of shelter tpdalr.are the property taxes. The Fisc41 Visparit;es Act,
while seeking to moderate the taxes in the oldef areas of the Hetro area,
has an effect on the cost of shelter in Plymouth. the net ps operty tax
base contributton from Plymouth to the Ketro's "pot" for taxes to be paid
in 1976 .amounts to ,547,825, or approximately 4 percent of our assessed
valuation. This, in our judgment, does not encourage the development of
lower cost housing in our community.
Balanced Growth Philosophy
Underpinning our comprehensive plan is the belief that our growth should
be balanced and include a variety of different types of land use -- resioential,
commercial -industrial, recreational, open space, etc. --carefully laid out
so as to blend harmoniously together in a beneficial manner. Enlightened
self-interest .as well as a social concern for the high proportion of citizens
unable to afford housing in today's market causes us to strive for condi-
tions whereby we can plan and stimulate the building of low and moderate
cost housing. This type housing will provide a. non-sterile social condition
in Plymouth as well as workers for our industry (close to work being
increasingly important in an age of high fuel costs and shortages), and
customers for our commercial arias. This balance creates a healthy,
interdependent relationship which provides a pleasant living environment,
good services, and low taxes..
Policy
Several years ago I recommended that a highly qualified committee including
all the various professions which comprise the housing industry be charged
to study and recommend honest and effective methods of reducing the cost
of housing. With our active par*icipating and guidance such a committee
has now been established through the Nelson amendment to the Mandatory
Plannine Act. We sought to have this committee established and directed
by the Chairman of the Metropolitan Council because:
1) One person making the appointments can assure the professional
balance and make-up of the committee.
2) One person would have full and totalaccountability for this
committee`s performance and results.
3) The last Council has the -staffing necessary for a deep and
meaningful effort.
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A) Our• tonfidenco in the present:Chairman.
We will be, pleased to assist In meaningful ways.
We would welcome the opportunity to more fully discuss and review, each
of these items with you should you be interested. We are obviously proud
of our continuing progress to assure the achievement of the development
potential in both Plymouth as well as an integral part and contributing
member of the t etropol itan Coi muni ty.
AH.n
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v CITY OF
PLYMOUTR
bbyy 10, 1976
Human thsources Cottee
Metropolitan Munch
Suite 300
Metro Square ding
St. Paul$, W SS101
Dear Madame Chairman and Committee members:
SUBJECT: Hennepin QAwty Com mitt Development Entitlement
Block Grant Application Fiscal Year 1976
Netropolitan Council Referral File #34146
The City of Plymouth has rev:ew•ed the Council Staff memorandum: of Wy 6, 1976 on the
subiart. Wile we are joyed FY findings of consistency concerning our 1976 HAP and
commendable" eommittment of 1976 Entitlement funds to housing related activities,
we are saddened by the tongue (pen) lashing we suffer on page 10.
Plymouth is approaching the concept of a balanced housing resource on the same. thorough,
well -reasoned course that has brought us success in other cot. mity goals and priorities.
Mile we were hopeful and. encouraging of our residential developers toward creating at
least twenty "net" or "existing" Section 8 units during the formation period of our
housing strategy, the apartmtment construction market produced no new units of any kind
during 1975 and our existing unit stock leans heavily to a. market well in excess of
Section 8 rent limits. Our probable difficulties in realizing our -twenty -unit goal
were well stated on our 1975 Table III submission.
We respectfully disagree with Council Staff regarding our efforts toward housing during
Fiscal Year 197S. Our affirmative local decisions and actions toward a Local Housing
Authority, the Uniform Houstig Code and a complete Housing Element to our comprehensive
plan haye all taken place during this time period. Whila it is unfortunate that twenty
Sectior 8 units have not appeared, we believe we directed our efforts wisely in pro-
viding a firm local foundation toward meeting more significant housing. goals in years
to oamlie.
It is interezting to note that our Mayor has reserved agenda time fbr the May 13, 1976
3025 HARBOR LANE. PLYMOUTH. MINNESOTA 55441. TELEPHONE (612) 559 -2.600
thmm Resources Committee -Z- rhy 10, 1976
bktorpolitan Council ceeting to review what we consider to be significant, 1975-
1976 progress toward balanced housing for Plymouth. chis presentation was prepared
for and confirmed well prior to the My 6 CEunbcil Staff cwentary on Plymouth's
lack of progress. How disappointing!
SjAcerely yours,
axles E. , `rector
Pig and amity, Development
CEWkm