HomeMy WebLinkAboutResolutions - 1984.06.28 - 16659ApppAy0:1 , PUBLIC. ;VICES COMMITTEE
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. Chairman
Miscellaneous Resolution 84175
BY: PUBLIC SERVICES COMMITTEE
IN RE: COMMUNITY DEVELOPMENT puTsIpN - RENTAL REHABILITATION 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 Miscellaneous Resolutions #82283 (September 21, 1982), #83156 (June 9,
1983), #84029 (February 23, 1984) approved by the Board of Commissioners recognized
the need to maintain the County's rental housing stock; and
WHEREAS the Department of Housing and Urban Development (HUD) has allocated
$154,000 to Oakland County through the Community Development Block Grant Program for
activity under the Rental Rehabilitation Program described in Attachment A; and
WHEREAS the Community Development Division has prepared recommended procedures
for participation in the HUD Rental Rehabilitation Program as outlined in Attachment
B on behalf of all participating communities in the Oakland County Community Develop-
ment Block Grant Program; and
WHEREAS the Rental Rehabilitation Program will be conducted with no funds utilized
from the County General Fund; and
WHEREAS the Community Development Division will provide quarterly status reports
to the Public Services Committee; and
WHEREAS the Community Development Citizens Advisory Council unanimously approved
participation in the Rental Rehabilitation Program on June 6, 1984.
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners
authorizes the Community Development Division to accept Department of Housing and
Urban Development (HUD) funds for participation it the Rental Rehabilitation Program
and to conduct this program in communities parti4pating in the Oakland County
Community Development Block Grant Program according to procedures outlined in
Attachment B.
Mr. Chairperson, on behalf of the Public Services Committee, I hereby move the
adoption of the foregoing resolution.
REPORT TO PUBLIC SERVICES COMMITTEE
BY: FINANCE COMMITTEE, DR. G. WILLIAM CADDELL, CHAIRPERSON
IN RE: COMMUNITY DEVELOPMENT DIVISION-RENTAL REHABILITATION PROGRAM-
APPLICATION FOR HOUSING AND URBAN DEVELOPMENT FUNDS-1984-85
The Finance Committee has reviewed the subject Rental Rehabilitation
Program grant and finds:
1) This application is a request for $154,000 in allocated 1984-85
Department of Housing and Urban Development funds for partici-
pation in the Rental Rehabilitation Program,
2) The grant application covers the period October 1, 1984 through
September 30, 1985,
3) The Community Development Division has operated related housing
rehabilitation programs for low and moderate income persons since
1976,
4) Participation in the Rental Rehabilitation Program would involve
no County funds,
5) Application or acceptance of this grant does not obligate the County
beyond September 30, 1985.
Mr. Chairperson, on behalf of the Finance Committee, I recommend the
acceptance of the foregoing report, and the referral of the information con-
tained therein to the Public Services Committee in accordance with Miscellaneous
Resolution #8145 - Revised Federal and State Grants Procedures.
FINANCE COMMLAIE June 21, 1984
(Attachment "A')
Department of Housing and Urban Development (HUD)
Rental Rehabilitation Program
SUMMARY
The Rental Rehabilitation Program was enacted on November 30, 1983. The Program is
designed to assure an adequate supply of standard housing affordable to lower-income
tenants. It (1) increases the supply of private market rent housing available to
lower-income tenants by providing government funds to rehabilitate existing units
and (2) provides rental assistance to lower-income persons to help them afford the
rent of these units. Within the basic framework of the Program, State and local
governments have the flexibility to design and operate programs unique to their
needs.
In each of Fiscal Years 1984 and 1985 $150 million will be available for rehabili-
tation grants and 30,000 Section 8 Existing Certificates and vouchers will be avail-
able to tenants. The Program provides a formula allocation of grant funds to State
and local governments to make the rehabilitation of rental properties feasible. One
Section 8 Certificate and/or voucher is provided for each $5,000 of grant funds to
help eligible lower-income tenants to pay the rent for rehabilitation units. Direct
allocations go to States, and to cities with populations over 50,000 and urban
counties that will receive at least a minimum allocation amount established by HUD.
State programs will cover areas under 50,000 in population and cities over 50,000
in population which do not receive the minimum allocation.
KEY ELEMENTS OF THE PROGRAM
Eligible Activities:
Program grant funds may be used only to finance the rehabilitation of
privately-owned, primarily residential rental properties. In order to
leverage the maximum amount of private capital, rehabilitation subsidies
are generally limited to 50 percent of the cost of rehabilitation, not to
exceed $5,000 per unit adjusted for high cost areas.
Lower-Income Benefit:
In order to assure maximum benefit to lower-income tenants in this Program,
70 to 100 percent of the units in rehabilitated properties in each partici-
pant's program must be initially occupied by lower-income tenants. In
addition, grantees must target all of the assistance to lower-income neighbor-
hoods (median income at or below 80 percent of median for area) where the
rents can be expected to remain affordable to lower-income families over time.
Eligible Rehabilitation:
Grant funds may only be used to correct substandard conditions, make essential
improvements, and repair major systems in danger of failure.
Market Rents:
Units will be rented at market rents and no special project rent controls
or restrictions are allowed.
Attachment A
Rental Rehabilitation Program
Page Two
Rental Subsidies:
Section 8 Certificates and vouchers may be used to assist eligible tenants
residing in units to be rehabilitated who wish to remain or move, and for
tenants who move into vacant -units.
Fund Allocations/Performance Reviews:
Each program year a formula allocation of funds for all State and local
governments will be sent to HUD Field Offices. HUD Field Offices then may
adjust the formula amounts based on actual grantee performance. Grantees
that have managed their programs effectively, targeted resources to lower-
income tenants, and successfully implemented other program requirements may
receive up to 15 percent additional funds. Those who have not performed as
well may have up to a 15 percent reduction in their formula allocations.
No fund adjustments based on performance will occur until Fiscal Year 1985.
(Attachment "B")
Oakland County
Rental Rehabilitation Program
SUMMARY
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 procedures 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 Development 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 Develop-
ment (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 Development legislation. Oakland County is eligible to receive $154,000
in HUD Rental Rehabilitation funds for 1984.
Rental Rehabilitation Program Description
Small rental properties represent a significant portion of the housing stock need-
ing rehabilitation in many localities and comprise a major source of housing for
low and moderate-income households. Rehabilitation funds will be provided under
this program to small properties having 1-11 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 rehabilita-
tion and maintenance of these units will be stimulated.
Projects eligible for rebates must be structured so that operating costs and debt
service can be supported by HUD Fair Market Rent levels. Rebates will be subject
to 10 year deferred principal liens on the rehabilitated property. Eligible re-
habilitation projects may qualify for a rebate of 50% of construction costs incurred
up to $5,000 maximum per unit rehabilitated. The remainder of project costs must be
provided from the property owner's own funds or private financing. A MSHDA rehabili-
tation loan may consitute the private financing portion of the project.
Eligible Areas
Participation in the HUD Rental Rehabilitation Program will allow rehabilitation of
rental housing units within eligible CDBG participating communities.
Under this new program eligible areas are those with the following characteristics:
A. Where there is a need for rehabilitation of rental residential properties
principally occupied, or to be occupied by lower income tenants;
Attachment B
Rental Rehabilitation Program
Page Two
B. Where the rental housing market is stable;
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;
D. Where the median income of the area does not exceed 80 percent of the median
for the SMSA region.
Further criteria to be examined by the Community Development Division in selecting
the project areas are:
*concentrations of lower income households
*rental markets which will maintain HUD's Section 8 FMR levels
*CDBG funded projects that are supportive of rental housing
Priority will be given to projects within areas that meet these characteristics.
Affordable Rents
Eligible projects will be those where rents after rehabilitation, including utili-
ties, would not exceed Section 8 Fair Market Rent levels. Compliance will be main-
tained with HUD regulations prohibiting rent controls as a condition of receiving
assistance through this program.
Assistance to Tenants
To further assist lower income tenants, upon completion of the rehabilitation, a
Section 8 Existing Housing Certificate or Voucher will be issued to eligible ten-
ants. These will provide a rent subsidy to the eligible tenants and assure that
the rental program assists lower income tenants. Certificates or Vouchers 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 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.
D. Agreement not to convert a project to condominium ownership for at least
10 years after the rehabilitation project is complete.
this 28th day of F une 1
41A .1111111211. or-
gg D. ALLEN ALLEN
une 1984
#84l75 June 28, 1984
Moved by Lanni supported by Susan Kuhn the resolution be adopted.
AYES: Lanni, Law, McConnell, McDonald, McPherson, Moffitt, Moore,
Nelson, Page, Perinoff, Pernick, Price, Rewold, Wilcox, Aaron, Caddell,
Calandra, Doyon, Foley, Fortino, Gosling, Hobart, R. Kuhn, S. Kuhn. (24)
NAYS: None. (0)
A sufficient majority having voted therefor, the resolution was adopted.
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, 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 #84I75 adopted by the Oakland County Board of Commissioners
at their meeting held on June 28, 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
Counke Clerk/Register of Deeds