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HomeMy WebLinkAboutHousing & Redevelopment Authority Minutes 05-24-2012APPROVED MINUTES PLYMOUTH HOUSING AND REDEVELOPMENT AUTHORITY May 24, 2012 PRESENT: Chairman Jeff Kulaszewicz, Vice Chair Paul Caryotakis, Commissioners Bob Stein, Carl Runck and Jim Willis (Chairman Kulaszewicz arrived at 7:12 p.m.) ABSENT: None STAFF PRESENT: Housing Program Manager Jim Barnes, Executive HRA Executive Director Steve Juetten, Support Services Manager Denise Whalen, HRA Specialist Kip Berglund and Office Support Representative Janice Bergstrom OTHERS PRESENT: Grace Management Representative Jody Boedigheimer 1. CALL TO ORDER Vice Chair Caryotakis called the Plymouth Housing and Redevelopment Authority meeting to order at 7:01 p.m. Housing Program Manager Barnes stated an e-mail was received from Chris Campbell, 5754 Trenton Lane, and has been added to the public record. 2. CONSENT AGENDA A. Approve HRA Meeting Minutes from April 26, 2012. B. Plymouth Towne Square. Accept Monthly Housing Report. C. Vicksburg Crossing. Accept Monthly Housing/Marketing Report. MOTION by Commissioner Willis seconded by Commissioner Stein, to approve the consent agenda. Vote. 4 Ayes. MOTION approved. 3. PUBLIC HEARING A. Section 8 Program. Proposed Changes to the Housing Choice Voucher Administrative Program Support Services Manager Whalen gave an overview of the staff report. Commissioner Stein asked about the language pertaining to guests, and asked how staff verifies the permanent address of a guest. Approved Plymouth Housing and Redevelopment Authority May 24, 2012 Page 2 Support Services Manager Whalen said a Section 8 client is to advise staff before they have a guest. If a complaint is received, the client must then provide a copy of the guest's lease or driver's license to prove that guest resides elsewhere. She said if the guest exceeds the time limit, they must be added to the household. Commissioner Willis asked if a voucher size stipulates it is for one, two, three or four people. Support Services Manager Whalen stated the voucher is issued based on family size. She said at the annual recertification any increase or decrease in family composition is reviewed to determine that the voucher is adequate. Commissioner Willis asked what action is taken if a client has more people than are authorized. Support Services Manager Whalen said people can be added to a household, but it does not automatically increase the voucher size. She said for example, four people in a one bedroom is allowed by HUD guidelines. Support Services Manager Whalen said income from anyone added to the family gets added to the household income, which typically increases the tenant's rent portion. Commissioner Stein asked if the landlord determines how many people can be in an apartment. Support Services Manager Whalen said the property maintenance guide dictates how many people are allowed in a multifamily dwelling. She added we have never had the issue come up of more people than what is allowed. Commissioner Stein questioned if a voucher can be for any size apartment. Support Services Manager Whalen explained that previously we received an allocation of vouchers by size, but now we receive a pot of money to be used to serve as many as possible within that given amount. Commissioner Stein asked how the distribution of vouchers is determined when working with the waiting list and the money you have available. Support Services Manager Whalen said we have to balance the pot of money to the actual number of vouchers we have. She explained if there is a voucher turn over, and the next family on the wait list is a family of six, we would calculate the average cost of a three-bedroom voucher. Support Services Manager Whalen said if we don't have enough money we do not skip to the next person on the waitlist that has a smaller household size, but rather wait until we have enough funding on hand to issue the three-bedroom voucher. Vice Chair Caryotakis opened and closed the public hearing, as there was no one present to speak on the item. Approved Plymouth Housing and Redevelopment Authority May 24, 2012 Page 3 MOTION by Commissioner Stein, seconded by Commissioner Willis, to approve the proposed changes to the housing choice voucher administrative program. Vote. 5 Ayes. MOTION approved. 4. NEW BUSINESS A. Consider advertising for four project -based voucher units. Housing Manager Barnes gave an overview of the staff report. Housing Manager Barnes introduced Jeff Huggett, representing Dominium Development. Vice Chair Caryotakis asked if people at the top of the list are passed over if they choose not to take a project based voucher. Housing Manager Barnes said yes that we would go down the list in order until someone accepted the project based voucher. Commissioner Willis questioned that someone with a project -based voucher has first right to a housing choice voucher over the whole Section 8 waiting list. Support Services Manager Whalen answered affirmatively and said with the project -based voucher they are stuck in the project, but remain on the current waiting list and are offered the next voucher that is available. Commissioner Stein asked how often this happens and how many people are currently on the waiting list. He also asked about the progress for filling the project -based units at Westview Estates. Support Services Manager Whalen explained there is continual turnover. She said after letters and phone calls to the 50+ on the waiting list for the Westview Estates' units, the waiting list was opened as no one was interested. Support Services Manager Whalen said we still have two units to fill and don't anticipate any problem, but it is a lengthy process with criminal background checks, rental history, etc. Commissioner Stein asked if it is the same process as a regular voucher. Support Services Manager Whalen said with a regular voucher, tenants look for their own housing and the landlord does the processing. Vice Chair Caryotakis said the project -based vouchers are not portable. Support Services Manager Whalen answered affirmatively and added that after one year they are eligible for a regular voucher. She added that there are some tenants who have had project - based vouchers four to five years and do like it. Approved Plymouth Housing and Redevelopment Authority May 24, 2012 Page 4 Commissioner Stein questioned why someone with no voucher would turn down an opportunity to have a project -based voucher. Housing Manager Barnes said we don't know the reason people say no, but it may be that the location of the project doesn't work for their situation. Support Services Manager Whalen added some people on the waiting list are currently in subsidized buildings so it does not make a lot of sense for them to move to another subsidized building while they wait for their name to come up on our waitlist. Commissioner Stein asked if there are qualifications for the project -based wait list. Support Services Manager Whalen explained these are income qualified, and preferences include paying more than 50% of income toward rent, living in a shelter or transitional housing, or live or work in Plymouth. Chairman Kulaszewicz asked if this adds four vouchers or takes away from our current vouchers. He questioned how this affects our goals to get more affordable units. Support Services Manager Whalen said this takes away from our current number of vouchers. Housing Program Manager Barnes said this 33 -unit development will give the City more points for the annual housing survey conducted by the Metropolitan Council. Commissioner Stein asked if Jim Waters requested any vouchers. Housing Manager Barnes said they did not. Housing Manager Barnes also informed the Board that Mr. Waters has asked the Metropolitan Council to reduce the number of affordable units in that project (former Brown's Market site) from 64 to 32 after unsuccessfully searching for funding sources for the project. He said Mr. Waters will also request the reduction in affordable units from the City Council in the near future. Commissioner Willis asked how critical these four project -based vouchers are to the success of Dominium's application. Mr. Huggett stated very critical. Mr. Huggett said this is worth five points and this could provide the necessary overall points to be awarded the funding from the State. Commissioner Willis asked if four is the threshold or would Dominium get five points for adding one unit. Mr. Huggett stated four is the threshold. Commissioner Willis said he is hearing from staff it takes more staff time to administer the project -based vouchers. He said it starts to increase the opportunity for "churning" - people not Approved Plymouth Housing and Redevelopment Authority May 24, 2012 Page 5 staying in a project but using it to get a regular voucher after one year. He asked about this occurrence in other projects. Support Services Manager Whalen said while we do have some turnover, Dominium's Stone Creek has some clients that have had project -based vouchers since the building opened. She said at Vicksburg Commons two received a regular voucher after their first year, and one has been asking for a regular voucher for two to three years. Commissioner Willis asked if these requests are based on where they are living, a job issue, or they don't like where they are living. Support Services Manager Whalen said Vicksburg Commons is a more remote area and many people don't have their own transportation, so they find it extremely difficult for mobility, whereas Stone Creek is easily accessed. Chairman Kulaszewicz asked how accessible the proposed project would be. Support Services Manager Whalen said there is Metro Mobility near Cub Foods. Housing Manager Barnes said this area is fully developed and not as remote as northwest Plymouth. Housing Program Manager Barnes introduced Kim Vohs, representing Interfaith Outreach and Community Partners (IOCP). Mr. Vohs said IOCP is the services provider for four units at Vicksburg Commons and said two people moved out after achieving success in their program. Commissioner Stein asked how difficult it is to fill a project -based voucher when someone moves out. He asked if there is an administrative fee for this process. Housing Manager Barnes said it could be the first name on the waiting list or staff may have to go through 20-30 names. Support Services Manager Whalen said we do get an administrative fee for the 210 vouchers, whether project -based or regular vouchers, but nothing extra. Commissioner Stein stated the project -based vouchers do give a benefit to the community, and we get more affordable housing and get points with the Met Council. Commissioner Stein asked staff's perspective whether this extra work is worthwhile. Executive Director Juetten said staff can administer our 210 plus 15 vouchers without going through the same amount of work. Executive Director Juetten cited the recent opening of the wait list because of the project -based units at Westview Estates and experiencing 2,300 phone calls in one day after advertising to call in and request a mailed application. He said many staff members in the department answered phones and the phone system for the City shut down for awhile. Vice Chair Caryotakis asked how that impacted the people on the original wait list, and asked if there is enough turnover so some of those people get vouchers. Approved Plymouth Housing and Redevelopment Authority May 24, 2012 Page 6 Support Services Manager Whalen said the voucher still goes by preferences. If people coming on the wait list in 2012 have more preferences than those people on the original wait list from 2008, they would be served first. Support Services Manager Whalen said while this is a lengthy process, she and Executive HRA Executive Director Juetten have discussed having more difficulty with landlords accepting housing vouchers. She said project -based vouchers are a good alternative to provide housing for people. Commissioner Stein asked if staff tries to convince landlords to accept vouchers. Support Services Manager Whalen said we know which apartment complexes accept vouchers. She said private landlords have to come in and get information on the program. She said for both project -based and regular vouchers there are inspections, meetings, and criminal background checks. Support Services Manager Whalen said the problem is filling a unit with tenants from the wait list, and there is more turnover resulting in dealing with people off the wait list again. Chairman Kulaszewicz said in the case of project -based vouchers you know the landlord would accept a voucher which is the upside. Commissioner Stein asked Mr. Huggett if someone with a housing choice voucher would be accepted at their building. Mr. Huggett answered affirmatively. Commissioner Stein asked how may apartment complexes currently accept Section 8 vouchers. Support Services Manager Whalen explained we are down to ten complexes who accept vouchers as the rents are increasing and apartment complexes are pricing themselves out of what we allow for a voucher. Mr. Vohs said IOCP and People Responding In Social Ministry (PRISM) would have clients to take these project -based units if a new list is being established. Support Services Manager Whalen stated our Administrative Plan would have to be changed to work with another social service agency to refer clients. Commissioner Stein said if the Administrative Plan were changed to accept referrals from IOCP and PRISM we would serve people in close proximity, rather than the entire metro area. Commissioners Willis and Kulaszewicz concurred. Support Services Manager Whalen said this change could be made with the next Administrative Plan update. She said we currently have 300 names on the wait list and persons recently placed on that list had to be willing to take a project -based voucher. Support Services Manager Whalen Approved Plymouth Housing and Redevelopment Authority May 24, 2012 Page 7 said anyone declining the offer of a regular housing voucher three times is removed from the regular voucher wait list. Commissioner Stein asked Mr. Huggett about a request for a $200,000 loan from the HRA, which has now been withdrawn. Mr. Huggett said that is correct, as they found other funding for this project. Commissioner Willis asked how long it would take to find tenants after advertising the availability of four project -based units. Housing Manager Barnes said that entire process could take between four to twelve months. He explained Dominium is requesting the four units now because their application for the low income tax credits is due mid-June and they would like to be able to say the HRA Board has agreed to advertise for four project -based vouchers. MHFA does not make their selection for the tax credits until end of November. Commissioner Willis said if we set this process in motion, Dominium will use that action in their application to indicate they are on track to get approved by the HRA. He asked Mr. Huggett if the project is hanging on this financing. Mr. Huggett stated if we don't get tax credits we won't proceed. Commissioner Stein asked if we award four project -based vouchers to Dominium and their project does not go through, would these four project -based units stay in the "pool". Community Development Executive Director Juetten said once we open and close the application, we have ten days to award the project -based units. Commissioner Stein asked how the process works to keep the four project -based units at a project. Support Services Manager Whalen explained when someone gives up a voucher through attrition, that voucher may be offered to a project -based client. Once the client moves out of the project -based unit, staff goes to the wait list to start the process all over again. Commissioner Stein asked if administration fees from HUD cover our administrative costs. Community Development Executive Director Juetten said we do have a $500,000 reserve account, but it looks like this year's budget will be $25 - $30,000 short. He said a report about this program will be brought to the HRA and City Council in the budget process. Community Development Executive Director Juetten added in 2012 we are getting only 80% of the funding. Commissioner Stein asked if administrative costs could be shared if we partnered with PRISM and IOCP. Approved Plymouth Housing and Redevelopment Authority May 24, 2012 Page 8 Housing Manager Barnes said we looked at this with Westview Estates as administrative fees were going down but we were unable to find authority to go to the owner or developer to help cover additional costs of administrative case work. Vice Chair Caryotakis said by pursuing this we are opening up another building in Plymouth that will accept vouchers. Mr. Vohs shared foreclosure statistics and said there were 882 foreclosures in Plymouth in the last five years. He said all of those people are now renters. Chairman Kulaszewicz said part of the HRA Board's mandate is to provide as much affordable housing as possible and said he supports advertising for four project -based units. MOTION by Chairman Kulaszewicz, seconded by Commissioner Stein, to advertise for four project -based units for the Dominium project at 10315 Bass Lake Road. Vote. 5 Ayes. Motion passed unanimously. Housing Manager Barnes asked that Item 5.A be moved ahead of Item 4.13. 5. OLD BUSINESS A. Potential Redevelopment. Ryerson site (1605 State Highway 169) and adjacent properties Housing Program Manager Barnes gave an overview of the staff report. Community Development Executive Director Juetten noted that he had received a call from a broker who represented a property owner in this area to see if the city had any financing mechanism to assist them in doing some improvements to their building. Commissioner Runck said he met two months ago with two people whom he thought might be interested in developing this site: Frank Dunbar, who has completed numerous market rate housing developments in the Twin Cities, and Kraus Anderson, who does retail and multifamily housing development. Commissioner Runck said both groups thought there is a not a lot of promise here with the current market, and at this time these are not willing sellers. He said Frank Dunbar would be willing to speak with the Board regarding his approach of "one bite at a time" rather than a master plan. He said Mr. Dunbar suggested a small HRA project on the eastern side and grow from there. Commissioner Runck said Kraus Anderson said they did not have interest in the site until more information could be supplied. Commissioner Runck said as they are the builder of the Trillium Woods project, they felt there might be a conflict there. He said these are overviews of two developers and that doesn't mean that's what every developer thinks. Commissioner Runck said in his opinion, everyone is busy pursuing market rate deals with interest rates so low and don't want to wait three years. He said they want to build today as vacancies are low metro -wide. Approved Plymouth Housing and Redevelopment Authority May 24, 2012 Page 9 Vice Chair Caryotakis introduced Kirk J. Kubousek, 1915 Kilmer Lane. Mr. Kubousek shared his and some of his neighbors' concerns. Mr. Kubousek asked if the traffic study was done during the heavy traffic time of 7:00 a.m. — 8:30 a.m. as there is Highway 169 traffic overflow congestion. He said if an additional 600 housing units were added there would have to be a change to the existing road infrastructure. Mr. Kubousek said 600 units seems dense for that area and there is concern that affordable housing might go in. He said he realizes it is a goal for Plymouth to have a balance but to consider the allocation of rental housing on the east side of Plymouth as there are a lot of apartments in the Highway 169/E. Medicine Lake area. Mr. Kubousek said other residents would be in favor of residential but were concerned over the number of housing units. Commissioner Stein explained this area has been identified in the ten-year Comprehensive Plan as a potential redevelopment site to see if anything feasible might occur. Commissioner Stein said both Maple Grove and St. Louis Park have put together fabulous developments. He said the property is not for sale and assured Mr. Kubousek that the City doesn't go in and condemn properties to develop on a whim. Commissioner Stein said in his opinion nothing is going to happen in the near future. Chairman Kulaszewicz questioned if industrial use of that property on the lake is the best use, and suggested residential might be a better use. He also stated the businesses there appear to be doing well and to our knowledge are not interested in selling. Community Development Executive Director Juetten said we now have some direction and better information on the area than we had a few months ago. He said if one of those businesses came forward wanting to move, we can react quicker now that we have this information. 4.13. HRA — Discuss Down Payment/Foreclosure Program HRA Specialist Berglund gave an overview of the staff report to discuss the opportunity to initiate a pilot loan program geared toward a higher first time homebuyer income category and/or foreclosed homes. Commissioner Stein asked if there is a problem with foreclosed houses not being bought up. Community Development Executive Director Juetten said Plymouth has not had a huge problem with foreclosed homes sitting vacant for 3-5 years like some cities are experiencing. He said periodically in wintertime burst water pipes in vacant homes create problems. Chairman Kulaszewicz said it seems folks are participating in rehabbing foreclosed homes which alludes to the fact that something happened to them while they were in foreclosure. He questioned if we would be spending money to help banks. Approved Plymouth Housing and Redevelopment Authority May 24, 2012 Page 10 Housing Manager Barnes said some programs help a homeowner once they acquire the foreclosed home from the bank, and our current rehab program can do that if the individual is within income guidelines. He said a home improvement or rehab program could be designed specifically for people in a specified income range and is available only for a foreclosed home that qualified after our inspection and with our terms. Housing Program Manager Barnes said some communities partner with a developer to acquire foreclosed homes, and then sell to a buyer after the home improvements are completed. Vice Chair Caryotakis said you would need to do this if there are a large number of blighted, abandoned properties. Housing Manager Barnes concurred, and cited Brooklyn Park as a community that has found that it was more efficient to contract with a general contractor to get the process completed in one to two months rather than providing a loan to the new homeowners. He said they ensure that deferred maintenance items such as the roof, furnace, and energy efficiency items - not cosmetic improvements are addressed. Housing Program Manager Barnes said Plymouth has a small market of people who do not get served by our programs because CDBG income guidelines are set at a maximum of 80% of the area median income, which is currently $64,500 for a family of four. Housing Program Manager Barnes stated the City Council has asked for a report on how to handle emergency type repairs, such as a water main breaks that occur. Vice Chair Caryotakis said now there is an improvement in the market whereas a year or two ago, we would have been throwing good money after bad. He said if we find a niche where there is a need, the incremental contribution we make might help to float the market. Vice Chair Caryotakis said one major problem now is declining home values and no willingness by lenders to lend against these reduced home values. Vice Chair Caryotakis asked if we have residents having problems refinancing at a reasonable rate because their home is no longer appraised for the proper value. He suggested the Board could play a role in a few cases where the Fannie Mae/Freddie Mac loans are not covered by the National Settlement Program. Some residents paying 6% interest are barely making ends meet, but can't refinance because they are at 90 - 100% of loan value. Commissioner Caryotakis said a small loan subordinated to refinance at 3.5% might be beneficial. Chairman Kulaszewicz said it is a fine line to help folks stay in their home and prevent foreclosure, but not throwing good money after bad. He concurred with Vice Chair Caryotakis' comments regarding assisting a homeowner to get the loan value to the right spot to reduce the interest rate from 6% to 3.5% with our participation. Chairman Kulaszewicz said he does not see Plymouth having blighted houses because they are foreclosed. Vice Chair Caryotakis said there might be a niche for rehabbing foreclosed properties for a buyer who can afford the house, but because they are over our income limits cannot afford to do all the rehab work. He said if we could offer funding to rehab the property, it would be more saleable, thereby helping home values. Approved Plymouth Housing and Redevelopment Authority May 24, 2012 Page 11 HRA Specialist Berglund said the City of Bloomington has a program for individuals about to purchase, or have purchased a foreclosed home in the past year, can get up to $20,000 for improvements to that home. Commissioner Runck said additional research about the percentage of homes in foreclosure as well as foreclosure prevention programs would be helpful. Housing Manager Barnes said foreclosure prevention programs are highly risky and we have to understand we are potentially dealing with riskier credit with the owners. Commissioner Stein asked if there have been calls from people that we can't serve. Housing Manager Barnes said we have been unable to assist some individuals with CDBG funds either because of income guidelines or the type of emergencies. He explained landscaping or tree emergencies are not eligible improvements and our Emergency Grant program is for individuals age 55 or older. Commissioner Stein suggested setting up an emergency fund for water breaks or tree removal, based on income guidelines. Housing Manager Barnes said there is a cap of $5,000 on the current emergency repair program, but there would be some additional risk with a new program because it would be a loan. He said an assessment by the City might be better as it would stay with the property. Commissioner Stein asked if the HRA could administer and fund the program. Commissioner Stein discussed two recent water main breaks in the City and the homeowners were unable to pay the bill. He said the assessments were put on the taxes rather than shut the water off. Commissioner Stein said he thought the HRA would be more capable assessing the needs of the homeowner rather than the water department. Community Development Executive Director Juetten said there would need to be guidelines and a way for staff to determine fairly quickly if owners would qualify. Community Development Executive Director Juetten said of the 130 water main breaks annually, approximately 40 are the property owners' responsibility. He said if there is a leak there is an incentive for the city to have it fixed as soon as possible as water is running into the ground. Commissioner Stein said he could support an emergency program for an income -qualified homeowner regardless of age. Housing Manager Barnes said the source for this emergency fund could come from the HRA general fund and could be for furnaces, water breaks etc. after verifying income and property ownership. Approved Plymouth Housing and Redevelopment Authority May 24, 2012 Page 12 Commissioner Willis pointed out there could be many takers for such a program, but there is no replenishable funding stream and we are going to be draining the HRA general fund. Housing Manager Barnes recapped this could be a self-sustaining, low interest emergency loan program for income qualified individuals and no age restriction. He said we need a definition of emergency" items, and determine terms of the loan regarding interest and establishing a maximum household income. Commissioner Stein said he likes the idea of assisting homeowners who are underwater, but doesn't know how it would work or what the demand would be without putting city tax payers at risk. Vice Chair Caryotakis noted this would increase staff time to determine criteria so we don't lose money and yet serve qualified individuals. Commissioner Willis asked if the lending/banking community is trying to deal with the clients who are at risk for foreclosure. Commissioner Runck said he is aware of some banks that are doing interest write-downs and said low interest mortgages without closing costs have been very helpful for people under water. Commissioner Runck asked if there are any other needs the HRA should be aware of. Housing Manager Barnes said staff will be analyzing the FTHB program and rehab program. Housing Program Manager Barnes said the biggest concern is the emergency program for people who don't fit in the CDBG income guidelines. He said the Board may want to create an amortized, 3.5 — 4% fixed rate, 10 -year fixed rate rehab loan program for individuals who don't meet rigid CDBG guidelines. He noted this would be an investment back into the community as homes are fixed up. Commissioner Stein said Plymouth does not have a point of sale inspection so we don't know the condition of the housing stock. He asked how many more people would be reached if the income limit were raised $5,000. Housing Manager Barnes said there are no housing surveys and can only reference phone calls and denied applications for data. He said even with 2010 census data it would be a tough number to find those persons who are between 80 - 100% of median income. HRA Specialist Berglund said a notice was put into the Plymouth News awhile back about available rehab loan funding which did not contain income guideline information. He stated we received a lot of calls which had to be directed to the Minnesota Housing Finance Agency MHFA) for their Fix up Fund which had an income cap of $96,500 (115% of median income). Approved Plymouth Housing and Redevelopment Authority May 24, 2012 Page 13 Housing Manager Barnes said another idea would be an interest rate write-down program. He said you partner with the lending institutions to set up a program where they offer their loan at 6%, and we buy down that rate from 6% to 4%. He said it results in a loss of approximately 1,500, but the city receives the benefit of improved housing stock. Commissioner Stein said that would be a good option to look into as we would make up the 1,500 in the improvement to the housing stock. He added he would be interested in the point of sale inspection because without it there is no way to determine the condition and value of the houses in the city. 6. ADJOURNMENT MOTION by Vice Chair Caryotakis, without objection, to adjourn the meeting at 8:59 p.m. MOTION approved.