HomeMy WebLinkAboutResolutions - 1984.02.23 - 16130February 23, 1984
Miscellaneous Resolution 84029
BY: PUBLIC SERVICES COMMITTEE
IN RE: COMMUNITY DEVELOPMENT DIVISION - MODERATE RENTAL REHABILITATION
LOAN PROGRAM
TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS
Mr. Chairperson, Ladies and Gentlemen:
WHEREAS the Community Development Division has operated housing
rehabilitation programs since 1976 in order to Maintain and improve housing
for low and moderate income persons; and
WHEREAS over one-fourth (26%) of the County's housing units are renter
occupied; and
WHEREAS approximately three-fourths (74%) of the County's rental housing
units are contained in small buildings of less than ten (10) units; and
WHEREAS Miscellaneous Resolution #82283 approved by the Board of
Commissioners on September 21, 1982 and Miscellaneous Resolution #83156
approved on June 9, 1983 recognized the need to maintain the County's
rental housing stock; and
WHEREAS the Board of Commissioners has authorized the allocation of
$210,000 from the 1982-83 Community Development Block Grant budget for a
pilot moderate rental rehabilitation program with no funds utilized from
the County General Fund; and
WHEREAS the pilot moderate rental rehabilitation program has been
conducted in participation with the Michigan State Housing Development
Authority (MSHDA) on behalf of all communities participating in the Oakland
County Community Development Block Grant Program; and
WHEREAS Oakland County, through the Community Development Block Grant
Program will receive a direct allocation of funds from the Department of
Housing and Urban Development (HUD) Rental Rehabilitation Program in
Fall, 1984; and
WHEREAS the County's participation in 4 preceding Third Round Demon-
stration to the Rental Rehabilitation Program his been recommended by HUD
to establish the capacity for administering rental rehabilitation funds
received under the overall Oakland County Community Development Block Grant
(CDBG) Program; and
WHEREAS the Community Development Division has prepared recommended
procedures for participation in the HUD Third Round Demonstration of the
Rental Rehabilitation Program, as outlined in Attachment A; and
- JaiN—B7-1anh1. Chairman
Miscellaneous Resolution Page 2
WHEREAS this participation and continuation of the MSHDA Moderate
Rental Rehabilitation Program will be funded from the original alloca-
tion of $210,000; with no additional funds allocated from the Community
Development Block Grant budget and no funds utilized from the County
General Fund; and
WHEREAS this Program will be available to all participating
communities in the Oakland County Community Development Block Grant
Program for a six (6) month period; and
WHEREAS the Community Development Division will provide status
reports to the Public Services Committee in May and August, 1984.
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of
Commissioners authorizes the Community Development Division to partici-
pate in the HUD Third Round Demonstration of the Rental Rehabilitation
Program and to continue the MSHDA Moderate Rental Rehabilitation Program
to accomplish the rehabilitation of 1 to 7 unit rental housing structures
in accord with specific procedures as outlined in Attachment A.
Mr. Chairperson, on behalf of the Public Services Committee, I
hereby move the adoption of the foregoing resolution.
PUBLIC SERVICES COMMITTEE
ATTACHMENT A
Oakland County Moderate Rental
Rehabilitation Loan Program
Introduction
The Oakland County Board of Commissioners recognized the need for
upgrading rental housing units serving low and moderate income tenants
by first directing the Community Development Division to design pro-
cedures for rental rehabilitation in Miscellaneous Resolution #82283,
September 21, 1982.
Procedures for a pilot Moderate Rental Rehabilitation Program were
established for participation with the Michigan State Housing Develop-
ment Authority (MSHDA) to finance the rehabilitation of 1-7 unit rental
buildings. In June, 1983, a six-month pilot program was authorized
with an allocation of $210,000 in Community Development Block Grant
funds in Board of Commissioners Miscellaneous Resolution #83156. The
purpose of the pilot program was to determine local needs for rental
rehabilitation in Oakland County and to gain experience in this type
of program.
Since the onset of this pilot program, the Department of Housing and
Urban Development (HUD) has announced a Rental Rehabilitation Program
to start in Fall, 1984 with a preceding Third Round Demonstration
period. Both the Rental Rehabilitation Program and the Third Round
Demonstration are a part of the 1983 Federal Housing and Urban Develop-
ment legislation. HUD has informed Oakland County that it will receive
a direct allocation of funds under the Rental Rehabilitation Program in
Fall, 1984. Furthermore, HUD has recommended participation in the
preceding Third Round Demonstration as an opportunity to gain experience
and establish the capacity for administration of the Rental Rehabilitation
Program, as a part of the overall Oakland County Community Development
Block Grant (CDBG) Program.
Goals
Preceding a Fall, 1984 funding allocation to Oakland County under the HUD
Rental Rehabilitation Program, continuation of the Oakland County/MSHDA
participation, combined with the HUD Third Round Demonstration is intended
to further the experience in rental rehabilitation. This experience will
serve to establish the capacity to administer such a program on behalf
of communities participating in the Oakland County CDBG Program.
An evaluation of this experience and subsequent recommendations will be
submitted to the Oakland County Board of Commissioners in August, 1984.
Objectives
Small rental properties represent a significant portion of the housing
stock needing rehabilitation in many localities and comprise a major
4, 4 •
source of housing for low and moderate-income households. Rehabili-
tation funds will be provided under this program to small properties
having 1-7 rental units which require moderate levels of improvements.
By offering incentive rebates to property owners improving units to
Section 8 Housing Quality Standards, private investment in the rehabili-
tation and maintenance of these units will be stimulated.
From the original allocation of $210,000 budgeted in Miscellaneous
Resolution 1i83156, a maximum amount of $60,000 will be utilized for
the rehabilitation of fifteen (15) rental units in the HUD Third
Round Demonstration. The remaining $150,000 of the original allocation
will be used to continue the Oakland County/MSHDA Moderate Rental Rehabili-
tation Pilot Program, funding applications on hand as of December 31, 1983.
Together, these two programs form a six-month demonstration of rental
rehabilitation activities culminating in August, 1984.
Eligible Areas
Participation in HUD and MSHDA programs will allow rehabilitation of
rental housing throughout all participating communities.
Under the HUD Third Round Rental Rehabilitation Demonstration Program
eligible areas are those where: a) there is a need for rehabilitation
of rental residential properties principally occupied, or to be occupied
by lower income tenants; b) where the rental housing market is stable
and; c) where the rent (including utilities) after rehabilitation of the
unit will be affordable to low and moderate income tenants and are within
the Section 8 Existing Housing Fair Market Rents (FMR's) for the County.
(FR Vol. 49 #14, Friday, January 20, 1984, 4.1) Based on the referenced
guidelines, criteria to be examined are:
*concentrations of low and moderate income persons
*rents and utility costs within the Section 8 FMR's
*CDBG funded projects that are supportive of rental housing
Priority will be given to projects within areas that meet these charac-
teristics.
Eligible Properties
Properties having at least one and no more than seven rental units are
eligible if owned privately and for-profit. Units must be substandard
(Section 8 Housing Quality Standards) before rehabilitation and be in
compliance upon the project's completion.
Rehabilitation Financing
Eligible rehabilitation projects may qualify for a rebate of 407. of con-
struction costs incurred up to $4,000 maximum per unit rehabilitated.
The remainder of project costs must be provided from the property owner's
own funds or private financing. A MSHDA rehabilitation loan may con-
stitute the private financing portion of the project.
-2-
Projects eligible for rebates must be structured so that operating costs
and debt service can be supported by HUD Fair Market Rent levels.
Sufficient equity to cover existing debt and rehabilitation financing
secured by the property must be evidenced.
Rebates will be subject to deferred principal loans, secured by the
rehabilitated property. A property owner may qualify one project only
for a rebate, during the course of the Demonstration.
Affordable Rents
Eligible projects will be those where rents after rehabilitation, includ-
ing utilities, would not exceed Section 8 Fair Market Rent levels. Com-
pliance will be maintained with HUD regulations prohibiting rent controls
as a condition of receiving assistance through this Demonstration.
Assistance to Tenants
To further assist lower income tenants, upon completion of the rehabili-
tation, a Section 8 Existing Housing Certificate will be issued to eligible
tenants. The certificate will provide a rent subsidy to the eligible
tenants and assure that the rental program assists lower income tenants.
All tenants who meet Section 8 income guidelines will be eligible for a
certificate. Certificates can only be distributed by a Public Housing
Authority, therefore, the Michigan State Housing Development Authority
(MSHDA) will assist the County in the distribution of the certificates.
Property Owner Certification
A certification will be obtained from all participant owners indicating
compliance with the following conditions:
a) Property owners will not discriminate against tenants
eligible for housing assistance under any Federal, State
or local program.
b) Property owners renting to tenants with Section 8 Existing
Housing certificates shall comply with all Section 8
Existing Housing regulations.
c) Compliance with Affirmative Fair Market Housing regulations.
this 21rd day of
ALLEN
#84029 February 23, 1984
Moved by Lanni supported by Rewold the resolution be adopted.
AYES: Jackson, R. Kuhn, S. Kuhn, Lanni, Law, McConnell, McDonald,
McPherson, Moffitt, Nelson, Olsen, Perinoff, Pernick, Price, Rewold, Wilcox,
Aaron, Calandro, Doyon, Gosling, Hobart. (21)
NAYS: Moore, Foley, Fortino. (3)
A sufficient majority having voted therefor, the resolution was adopted.
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
1, Lynn D. Allen, Clerk of the County of Oakland and having a seal,
do hereby certify that I have compared the annexed copy of
Miscellaneous Resolution adopted by the Oakland County Board of Commissioners at
their meeting held on February 23, 1984
with the orginial record thereof now remaining in my office, and
that it is a true and correct transcript therefrom, and of the
whole thereof.
In Testimony Whereof, I have hereunto set my hand and affixed the
seal of said County at Pontiac, Michigan
County Clerk/Register of Deeds