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HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 08-25-2022APPROVED MINUTES PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY August 25, 2022 MEMBERS PRESENT: Chair Michelle Soderberg; Commissioners James Williams, Wayne Peterson, and Joel Spoonheim; Council Coordinating Rep Jim Davis ABSENT: Lucas Larson, Aqueelah Whitfield, and Ronald Kelner STAFF PRESENT: Housing & Economic Development Manager Devon Pohlman, Housing and Economic Development Coordinator Kenny Niemeyer, and Permit Technician Michelle Bast 1. CALL TO ORDER Chair Soderberg called the Plymouth Housing and Redevelopment Authority meeting to order at 7:01 p.m. 2. PUBLIC FORUM Chair Soderberg opened and closed the Public Forum as there was no one present to speak. 3. APPROVE AGENDA MOTION by Commissioner Peterson, seconded by Commissioner Spoonheim to approve the Agenda. Vote. 4 Ayes. MOTION passed unanimously. 4. CONSENT AGENDA 4.1. Approve proposed minutes from July 21, 2022. MOTION by Commissioner Williams, seconded by Commissioner Spoonheim, to approve the Consent Agenda. Vote. 4 Ayes. MOTION passed unanimously. 5. PUBLIC HEARINGS 5.1 2021 Community Development Block Grant (CDBG) Consolidated Annual Performance and Evaluation Report (CAPER) Notice of Annual Citizen Participation Meeting Housing and Economic Development Manager Pohlman provided an overview of the staff reports discussing the CDBG Program Year 2021 CAPER. She provided information on the outcomes of the Program Year 2021 funding, which included regular CDBG funding and CDBG COVID funding. She noted that for the regular CDBG funds, there is a 15% maximum that can be allocated to public service activities. Two of challenging market conditions the City of Plymouth faced in the 2021 Program Year included continued Approved Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 2 escalation of house prices which makes serving first-time homebuyers with the CDBG income limit requirements a challenge, and continued supply chain constraints which has elongated owner-occupied rehabilitation loan processing times. Commissioner Spoonheim asked the 15% public services cap be explained. Housing and Economic Development Manager Pohlman explained the cap is 15% of the Program Year entitlement dollars, which is the maximum that can be allocated to public services under the regular CDBG program; this cap was eliminated for the time-limited CDBG COVID funding. Commissioner Peterson asked if the public services funding is for organizations, such as PRISM. Commissioner Spoonheim asked if money can be given to organizations not already listed in the Public Services Programs chart. Housing and Economic Development Manager affirmed Commissioner Peterson’s question, highlighting the six subgrantees who have been awarded public services funding in Program Year 2021. She also noted that the CDBG program has certain requirements that must be considered such as the allocation of funds has to be done through the Annual Action Plan (or if changed, through amendment process as outlined in the approved Citizen Participation Plan) and timeliness tests need to be met related to spend-down requirements of the funding. Commissioner Williams asked how long the public process is. Housing and Economic Development Manager Pohlman replied that the Annual Action Plan public comment period is 30 days and the public comment period for the CAPER is 15 days. Commissioner Peterson asked if funds can be rolled over from year to year. Housing and Economic Development Manager Pohlman said that can be an option, though we also have to be attentive to the required timeliness test under the program. Housing and Economic Development Manager Pohlman described the first community land trust homeowner supported by the City of Plymouth through CDBG in Program Year 2021. She said the land trust program has been in Minnesota for a while and that this example is the first one in Plymouth. She went over this example as presented by Homes Within Reach. Commissioner Williams asked if this is a fixed rate mortgage. Approved Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 3 Housing and Economic Development Manager Pohlman replied yes, the mortgage is a 30-year mortgage, and the house is fully rehabbed to make sure the homeowners are given a good start. She informed the board this was a collaborative funding effort involving city, county, and state funds in addition to Metropolitan Council funds. Council Member Davis said if the house is sold there is a shared equity model, and the house will remain affordable. He said the land trust keeps a wait list of people who are interested in purchasing a house. Chair Soderberg said the land trust owns the land, which helps make the home affordable. Housing and Economic Development Manager Pohlman said the City of Minnetonka has made a substantial investment in land trust homes and that the City of Edina has shown an increased interest in the housing model as well given that it can be an effective tool to help preserve affordable homeownership in a community. Council Member Davis asked if this was the same land trust that operates in western Hennepin County. Housing and Economic Development Manager Pohlman answered affirmatively. Chair Soderberg said the house needs to be bought on the open market; the land trust buys the house and the land. Council Member Davis inquired if the house is bought with someone specific in mind. Housing and Economic Development Manager Pohlman replied that some land trust programs administer homebuyer-initiated programs where this is the case. She said more typically the house is bought, rehabbed, and goes to a qualified buyer on the wait list. She informed the board this was the first time Plymouth committed funds to this program. Commissioner Williams asked about the purchase price. Housing and Economic Development Manager Pohlman replied that the home appraised for an amount in the mid-three hundred thousands. Commissioner Williams asked what the homeowner paid for the house. Housing and Economic Development Manager Pohlman said this transaction also involved a First Time Home Buyer loan from the City of Plymouth, but she did not have the loan-level specifics. Housing and Economic Development Manager Pohlman continued providing an overview of CAPER. Approved Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 4 Commissioner Spoonheim asked about performance relative to the goals identified in the CAPER, noting that in some activities the City is behind on the goal benchmark. Commissioner Spoonheim also asked if the goals for CDBG funds are realistic and if the vast majority of funding was used for very low income. Housing and Economic Development Manager Pohlman stated that the CAPER reports on goals over the five-year Consolidated plan period (2020-2024) in addition to the Program Year 2021 goals. She affirmed that serving first-time homebuyers continues to be challenging in the City of Plymouth given the high median home prices in the community and required CDBG program income limits, and that we will continue to need to evaluate how best to serve this segment of the market. She noted that demand for the owner-occupied rehabilitation program continues to be strong, with several homeowners in the current pipeline. Commissioner Peterson asked how many applicants are typical. Housing and Economic Development Coordinator Niemeyer replied for rehab loans there are approximately seven to eight applicants in various phases of the pipeline, including several relatively new applicants. Housing and Economic Development Manager Pohlman stated that the HRA needed to think about how they support first-time homebuyers and who and how they are serving. She said the data shows there has been 17 served with assistance through the state Housing Finance Agency, but we have had limited success serving this segment with the City’s program. She said this is an area for the HRA and the housing staff to continue to think about strategically with respect to how best to serve these needs in a community with relatively high home prices. Commissioner Williams commented that the story about the first-time home buyer assisted with the program of Homes Within Reach is inspirational. Housing and Economic Development Manager Pohlman emphasized how important it is to highlight meaningful ways to serve low- and moderate-income homebuyers and that there are pathways to achieve affordable homeownership. MOTION by Commissioner Peterson, seconded by Commissioner Williams, to approve and present the 2021 CAPER to the City Council prior to submission to the Department of Housing and Urban Development contingent on all public comments received during the open comment period. Vote. 4 Ayes. MOTION passed unanimously. Chair Soderberg opened and closed the public hearing because there was no one present to speak. Approved Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 5 6. NEW BUSINESS 6.1. Program Year 2022 Community Development Block Grant (CDBG) Annual Action Plan allocation. Housing and Economic Development Manager Pohlman gave an overview of the staff report. She reported that HUD requires them to go back out for a 30-day public comment period due to a decrease in the level of federal funding that was received after the first public comment period. She said funding levels were held constant for all proposed activities, with only the owner-occupied rehabilitation activity decreased as a result of the funding reduction. The federal grant was decreased by just slightly more than $11,000. Commissioner Williams asked is that the only issue that was raised. Housing and Economic Development Manager Pohlman answered affirmatively. She said we cannot execute contracts with subgrantees until the grant is approved and that this is an important step in re-submitting the 2022 Annual Action Plan to HUD so that we can receive the Program Year 2022 funding and execute grant agreements. MOTION by Commissioner Peterson, seconded by Commissioner Williams, to adopt the Program Year 2022 CDBG action plan allocation. Vote. 4 Ayes. MOTION passed unanimously. 7. UPDATES HRA Updates Moderate Income Housing Policy – redline Housing and Economic Development Manager Pohlman gave an overview of the staff report. She introduced the Moderate-Income Housing Policy and the changes made for this redline version. She said this revision has been reviewed by legal counsel, the City’s financial advisor, and bond counsel. There have been no material changes to those reviews, though the language was tightened up. She noted that receipt of financial assistance drives the applicability of the policy. She said a notable change to the language in this final draft ensuring that when a development applies to the City for public financial assistance, such as TIF, that application will meet all the processing requirements as stated by this policy. She also discussed the previous recommendation which has been reviewed by the HRA, related to a recommendation to use a third-party entity for compliance for properties subject to the policy program with respect to initial and ongoing rent and income calculations. She also discussed the recommended change to allow a renter’s Approved Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 6 income to increase to a maximum of 140% of AMI, to align with the compliance requirements the Low-Income Housing Tax Credit program has in place. Housing and Economic Development Manager Pohlman provided additional background on the efficacy of using industry-standard compliance requirements, in cases where affordable developments end up with layered financing. Commissioner Peterson stated he worked with the numbers and said if the percentage goes off the annual median income, which in Plymouth $118,200, 60% AMI is $79,000. If they can stay in the apartment until they get to 140% of AMI it appears people can increase their income two and a half times and still stay in affordable housing. He questioned whether this provision allows high-demand rental units to serve those most in need of affordable housing. He said to me that defeats what we are trying to do with affordable housing because it would seem to me that when their income is at 100% AMI they should move into market housing. It does not seem right that somebody could generate their income that much and stay in affordable housing. Commissioner Peterson acknowledged that the implications of having different income limit thresholds in affordable projects could pose issues but underscored how important it is that affordable rental units serve those most in need. Commissioner Williams acknowledged Commissioner Peterson’s concerns and asked how many people are on the waiting list for affordable developments. He also asked for more information about how the name change to Moderate-Income Housing Policy occurred, inquiring whether it was appropriate for staff to rename the policy or if that recommendation should have been brought back to the HRA for further action. Chair Soderberg said the name change came back in a redline version and was discussed with the HRA, based on recommendations provided to the City Manager, Dave Callister and HRA Executive Director, Danette Parr. Commissioner Spoonheim stated the name change was discussed at the meeting two months ago. Commissioner Williams said a lot of community stakeholders took the time to let us know what they thought. He suggested erring on the side of making sure those stakeholders who previously provided comments have an opportunity to review and comment on the version of the policy. Chair Soderberg stated that the policy has been available for stakeholders to review for longer than six months. She said we want to do right for housing; emphasizing that the Approved Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 7 policy is designed to help create rental units affordable to moderate-income households through the creation and incentive of market-rate housing. Commissioner Spoonheim stated it is not market rate. Commissioner Williams said we don’t know what if developers have what they want from the policy. Chair Soderberg reminded the Board the comments have circulated for a significant period. Commissioner Spoonheim replied you have had to work on these issues for a long time. He noted that there have been obstacles to advancing the policy, stating that staff transition really hindered moving forward. The public feedback needed to be shared with the commission; it is not in the public record. He said he remains flummoxed by the language change to the policy. He said I do not see moderate income housing policies elsewhere. He said I see low-income policies that speak to low- and very-low income and the very-low is where we start talking about the tax credits. He noted that he has developed low-income housing using a variety of fund sources and that he believes there are many developers that are not coming to Plymouth because there has not been a clear way to get there. This draft is a step in the right direction but noted that the change to moderate-income does not improve clarity. We are not making it easier; I think we are not doing as much as we could. Housing and Economic Development Manager Pohlman said that with regard to serving low-income versus moderate-income, the proposed policy goal provides clear guidance around affordability expectations for market rate developers working in redevelopment areas given that redevelopment TIF does not have stand-alone affordability requirements. This policy is intended to provide clarity to the developers on City expectations as they relate to affordability levels of housing units in redevelopment areas. Commissioner Spoonheim said in the absence of any policy, that policy would provide the necessary requirements to developers in such instances. He suggested moving forward to direct staff to notify all people who previously provided feedback on the final proposed policy. Chair Soderberg replied affirmatively. Commissioner Williams said he wanted to make sure we bring in the most insight to make sure we have the best policy, noting that the original vision was to advance the policy for City Council action in the fall. Approved Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 8 Commissioner Peterson said we are trying to move into September. Commissioner Spoonheim said we are not getting a low or very low-income housing policy at this point. He emphasized the desirability of existing affordable rental housing developments in Plymouth noting that we have already seen one project change owners in the last 60 days which jeopardizes long-term rental affordability in the community. The absence of a low-income policy is a move in the wrong direction. Commissioner Peterson said the change to Moderate-Income Housing Policy happened two months and it has been consistent with what Housing and Economic Development Manager Pohlman said tonight. He said we are not trying to do an all-encompassing policy; we are trying to address one aspect of housing needed right now. There needs to be an understanding that we are going to work on a low-income policy in the future and that there needs to be work within a timeline. He noted that while he has concerns about the ability for existing tenants to remain in the housing if their incomes increase up to 140% AMI, he is willing to move this forward so long as we turn our attention next to supporting low-income affordability in the city with the support from the City Council and community which is critical to moving forward. Housing and Economic Development Manager Pohlman noted that that it would be possible to revise the policy over time, if the City Council wished to apply it, such as for land use or zoning changes. Commissioner Williams asked if there are any negatives to giving people and stakeholders who previously commented on the policy more time to review. Chair Soderberg noted that she would like to continue to advance the work that has been done to get the policy ready for City Council action, further emphasizing that the policy has been included on the website, in the HRA packets and in the City Council Study Session packet which is available to the public. She asked Commissioner Williams what he is asking. Commissioner Williams said he recommends sending this redline version of policy to community stakeholders who previously commented on the policy, to get their comments because he wants more insight rather than less. Chair Soderberg asked how the HRA will handle dissenting points of view and perspectives. Commissioner Williams said we can be accommodating to work it out the best we can. Approved Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 9 Commissioner Spoonheim recommended that we let stakeholders know this policy is final, that we will be making a final decision in September, and then intend to bring it to Council. He asked how do we want to frame our presentation to let people know the intent of the HRA is to address very low and low income housing if that is not clear within this specific policy, recommending that we should be clear in letting people know we are also very committed to serving low-income residents. Housing and Economic Development Manager Pohlman suggested that we also review the HRA budget and tools available to us including the HRA levy, CDBG funding and pooled TIF. She said we have been working with Ehlers on the pooled TIF funding availability and will be able to share more detail this fall on projected available resources there. Chair Soderberg said we are all committed to low-income housing emphasizing that the Strategic Plan is the comprehensive planning document for the HRA to address a continuum of housing needs, including low-income and moderate-income. Commissioners Spoonheim said Williams said when our other board members are present we can put together a time frame to discuss this document. Chair Soderberg said the Strategic Plan was done before there were mostly new commissioners. She stated we need to go back and revisit the Strategic Plan. She said staff has been working on CAPER reporting and required HUD CDBG program issues. She recommended we look at our budget on a high level this fall to determine what money is coming in and what is going out, also noting that the City Attorney will provide some additional orientation for HRA members. She proposed that we prioritize the October meeting to review the Strategic Plan and also to add items staff has identified as priority workplan items. She suggests the November meeting be used to reprioritize Strategic Plan items. Commissioner Peterson stated his agreement. Chair Soderberg said we underestimated the amount of administrative time it takes. Housing and Economic Development Manager Pohlman said we want to make sure we are keeping up with the federal CDBG requirements and meet expenditure and timeliness expectations for our current funding levels. She noted that federal grant administration is time consuming. Commissioner Williams asked what we are deciding. Approved Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 10 Chair Soderberg said to approve the resolution as proposed and then go to the Council. If it is not approved, it will not go to the Council in September. Housing and Economic Development Manager Pohlman said will be advertising the next meeting as an opportunity for stakeholders to provide comments on the final proposed Moderate-Income Housing Policy. Commissioner Williams said to make it simple and easy for people who previously reviewed. Commissioner Peterson asked about sending a targeted invitation to those that had commented before. Chair Soderberg clarified the groups that previously responded. Commissioner Williams stated there were ten groups that provided comment. Chair Soderberg said it would be easier to encourage them to address their comments via email. Chair Soderberg replied they can come to the meeting, and they can speak if they choose to during the open hearing. Commissioner Peterson said to make a motion to speak or not speak Housing and Economic Development Manager asked about changing the meeting date to September 29th or 28th given scheduling conflicts for a number of HRA members with the September 22nd meeting date. She suggested polling all the commissioners to finalize a date that will work best for the majority. Commissioner Williams asked how quickly we can get the draft out to ten groups. Housing and Economic Development Manager suggested the following week. Commissioner Peterson asked which version to send, the clean copy or the redline. Housing and Economic Development Manager suggested that a redline copy be sent to track changes are viewable. Chair Soderberg said I like a clean copy. Commissioner Williams said send both. Approved Minutes Plymouth Housing and Redevelopment Authority August 25, 2022 Page 11 Housing and Economic Development Manager Pohlman provided an update on the CDBG COVID funding noting that we need to have spent down 80% by next July. She said we have unallocated COVID funding that we need to spend, and it is important to prioritize the needs and meet deadlines. She is working to draft a supplemental CDBG COVID funding RFP with city-priorities for funding that meet eligibility guidelines. Such priorities would likely include providing subsistence payments, such as rental assistance, and supporting food shelves for those who have been economically disadvantaged by COVID-19. PPE and test kits would also likely be an allowable use. She noted several subgrantee partners have fully utilized prior allocations of CDBG COVID funding for these uses. She expects to finalize a draft RFP to release to external partners in September. 8. ADJOURNMENT MOTION by Chair Soderberg, with no objection, to adjourn the meeting at 8:51 p.m.