HomeMy WebLinkAboutHousing Authority - Consortium - 2009r^ESNQ REPORT TO THE CITY COUNCIL AGENDAITEMNO. 9:(Sarz1
COUNCILMEETING '7/16,109
July 15. 2009 cm sae4ce
FROM: KEITH BERGTHOLD, Interim Director
Planning and Development Department
BY: CLAUDIA CAZARES, Interim Housing Manage`r1 Q__ ); ,�"o /
Planning and Development Department t/'I't^"'LP`
SUBJECT: AUTHORIZE SUBMITTAL OF A NEIGHBORHOOD STABILIZATION PROGRAM 2
GRANT APPLICATION TO THE U.S. DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT FOR $10 MILLION IN PROGRAM FUNDS
RECOMMENDATIONS
Staff recommends that the City Counal approve'
I. Authorize the submittal of a Neighborhood Stabilization Program 2 (NSP2) grant application to the
U.S. Department of Housing and Urban Development (HUD) for $10 million In program funds: and
I Authorize the City Manager to sign all necessary documents far participation in NSP2, subject to
approval by the City Attorney as to form.
The Planning and Development Department is preparing an NSP2 application in response to the May 4, 2009.
Notice of Funding Availability (NOFA) provided under the Ametlnn Recovery ant Reinvestment Act of 2008,
No administered through HUD. Staff Is requesting authorization to submit an NSP2 application, in partnership
With the Fresno Housing Authority, far $10 million In NSP2 funs for eligible acquisition, rehabilitation and
tome sale activities, and redevelopment of multi -family housing. If the City receives an award of $10 million in
NSP2 funs, the funding will be used by GM -selected agenciesldevelopers for acquisition, rehabilitation and
rubsequent sale of abandoned and forecosed upon homes In three target areas. Currently, the City's
deighborhood Stabilization Program 1, authorized by Congress in 2005, Is being used to fund similar activities.
rhe City is proposing 10 allocate a portion a the awarded NSP2 funds to the Housing Authority for use in 10
refected target areas. The partnering component is integral to the application and is being proposed as Partof
I regional effort to combat the negative impact and visual blight caused by to high rate of foreclosures In
'resno. The application process is competitive wit points awarded for meeting various threshold
equlrements: therefore are has sVudured the application to obtain to highest possible points to secure an
ramN of NSP2 funs.
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REPORT TO THE CITY COUNCIL
Neighborhood Stabilization Program 2 Great Application tO HUD
July 16, 2009
Page 2
BACKGROUND
The NSP2 Is a component of the Community Development Block Grant ICDBG) Program and provides
grant funds for redevelopment of abandoned and foreclosed homes in an effort to stabilize targeted
neighborhoods that have been negatively impacted by foreclosed and abandoned properties.
On May A, 2009, HUD released the NSP2 NOFA provided under the American Recovery and Reinvestment
Act of 2009. The application is due to HUD an July 17, 2009, with an anticipated award dale in fall &20M
Planning and Development Department staff is currently preparing Me NSP2 application (Exhibit A) and will de
requesting $10 million in program funds. The minimum grant request is $5 million with a programmatic
requirement that a minimum OF 100 foreclosed units be placed back to produclNe use, mi gated. Or result in
the elimination of blight In target areas. Therefore the requested $10 million in funding is expected to yield a
minimum of 200 rehabilitated units. The City is proposing a partnership component With the Housing Authority
to enhance the City's NSP2 application and as part of a regional effort to combat the negative impact and
visual blighl caused by the high rale Of foreclosures In Fresno. As pert of the regional effort, the Housing
Authorty is preparing a the
application to address abandoned, foreclosed and blighted properties in
the Fresno County areas_
Ni funds will be awarded on a competdive basis with a ma u mum point award of 150. The City's application
hes been drafted to score the highest points possible. If the City receives an Award of $10 million In NSP
funds, the funding will be used by the selected agenciesldevelopers for acquistiion, rehabilitation and
subsequent sale of abandoned and foreclosed upon homes In target areas. Single-family residential activity
consists of developers selecting abandoned or foreclosed properties, performing rehabilitation work, and once
completed selling the home to an eligible homebuyer. The mufti -family nandental component will consist of
multi -family developers selecting abandoned or foreclosed herder properties, perform rehabilitation work, and
once completed renting the units to low -Income tenants. The Housing Authority wall work exclusively on mull
family residential units that it will Own and manage afterrehabiltation.
Under the Housing and Economic and Recovery Ad of 2008, the City received $10.9 million in emergency
assistance from HUD for redevelopment of abandoned and foractose l homes an residential properties. Mike
City receives an award of $10 million under the American Recovery and Reinvestment Ad of 2009 NOFA,
funs Mil be used similarly in soled NSP2 target areas (Exhibft B).
The Housing and Commundy Development Division is proposing 3 target areas as follows:
• Shields to Shaw, East of HW 99 to Wed Ave.
• Ashlan to Shaw. Cedar to just west of Willow Ave.
• Central Fresno, apex. FW 41 to Chestnut, Kings Canyon to McKinley
The areas Were saleded bash on the City's Cade Enforcement Division statatce obtained from the
County's Assessor's Office on real estate owned properties and mapped by highest concentration of
foreclosed properties and layered with Me Brookings rnattule's reached statistics of low-income concarmatioh
for Me City of Fresno. Staff recommence targeting these neighborhoods as they statistically demonstrate the
highest need for stabilization based on the number of foreclosures and low-income status, and where NSP2
funds can provide the greatest and most visible impact.
REPORT TO THE CITY COUNCIL
Neighborhood Stabilization Program 2 Grant Application to HUD
July 16, 2009
Page 3
HUD's minimum index score for this threshold category is 18 points. The scores are genereted using an NSF
needs calculator provided on HUD's website. The above target areas produced an average foreclosure am
vacancy risk score of 19,84.
The Housing Authorky's target areas are as follows:
011verMCKinloy/Cedar/Fimt Fresno/FirsWcKmIay/Shields;
ChestnWPeachiSelmont/Kings Canyon Calitomia/BelmonWarka/Thome
First/Maroa/Herndoni Fmklelm/Jensen/Caldomia
Oraige/Chestnut/Califomial6utler Keamey/FresnoNentura/CelJornia
Marks/FmiVShieldslBelmont AshlanlGettysburg/CedarMinery
The above target areas were selected by analyzing areas with high foreclosure rates that ere also within areas
where the Housing Authority momently owns and manages multifamily housing. By targeting these areas, Me
Housing Authority proposes to partner the use WNSP2 funds with the use of their funds targeted towards
redevelopment efforts within their portfolio to Provide the highest impact to neighborhoods affected by blighted.
abandoned and foreclosed homes. The above target areas produced an average foreclosure and vacancy risk
amore of 19,7
In accordance with the NSP2 regulations, the City proposes to use 10% of the grant funds for administrative
cost associated with management and oversight of the program. A total M 25% of the funds will be designated
to assist households at 50% of the area median income and below. The Housing Authority will be responsible
for admlmstenng the activities for the 25% set aside since this complements their ongoing rehabilitation
activities of multifamily complexes. The remaining 85% of the funds will be designated to assist households
gaming up to 120% of area median income.
funds will be appropriated as tallows:
Administration
Amount
$1.000,000
units
WA
Civ of Fresno
Single,temily units.
Very low to moderate -income
$3,500,000
75
Multi-famply units:
Very low to moderate -income
$2,500,000
50
Hous nP Authoniv
Multi -family.
Low to moderate income
$ 500,000
15
Very how -Income (26%)
u25000W
60
Total
$10,000,000
200
The rehabilitation of the existing housing stock and homebuyer assistance are a priority M the City's Housing
Element ut the 2025 General Plan and me 2006-2010 Consolidated Plan prepared for the US Department Pf
lousing and Urban Development An award of NSP2 funds will assist the City in meeting me housing goals of
he Housing Element and Consolidated Plan.
2 Grant Application to HUD
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
The Housing and Community Development Commission reviewed and recommended this dem for approval
their July 8. 2009 meeting.
FISCAL IMPACT
I$ successful, the NSP2 footle will be appropriated into the FY 10 budget. There is n
Attachments:
Exhibt A—APpfcation
Exhibit B—Target Areas
Or, ns�e. o rine onm..a
CONSORTIUM AGREEMENT
THIS AGREEMENT, is made any entered into creative July 10, 200% by and bonuses, the CITY
OF FRESNO, a municipal corporation (hereinafter refeired to as
Authority a body corporate and �g A and City of Fresno Housing
polrtd, (herainaker referred eG as
RECITALS
A. WHEREAS, the City of Fresno wishes to enter into a conamlium agreement MM the
Housing Authority in applying for and receipt Of an allocatlon of funds made available through the
Neighborhood Stabilization Program 2 (NSP2); and
B. WHEREAS, Me U.S. Department of Housing and Urban DevelOpmem (hereinafter referred
to es'HUD") hes issued a Notes of Funding Availability (-NOFA-) for the NSP2 Program establishW by
Amedcan Rccoyery end Raimeastmem Act m 2ogg (Public taw 111-005)(Recovery AI for additional
acrvities A), ar Division B, TRIS III of the Housing and Economic Recovery Act of 20118 (Public taw 110-
2Bg)(HERA), ea amended for the purpose of assisting in Mc redevelopment of abandoned and forecbeatl
IWmes under Emengenq Aseisbnco for Redevelopment of Abandoned and Forec'osed Homes; and
C. WHEREAS, HUD is authorized to approve funding allocations utilizing monies made
avagable by NSP2, subject to the terms and conditions of the public law and NSP 2 Regulatlons adopted
by HUD; and
D. WHEREAS, Me City Of Fresno, in padrlerahip with the Housing Aukeargy, wishes to submit
e joint application t0 obtain frau HUD an allocation of NSP2 funds In Me amount of $10,000,00% and
E. WHEREAS, the procedures salathshed by HUD require the City W Fresno and Me Housing
• AutMrity to entry by agreement the cons0tium anargement proposed for Implementation of NSP2; and
F. WHEREAS, If the Cry m Fresno My City ol Fresno Housing Authority are selected for
funding, they will execute a standard consodum funding agreement no beer Man December 1, 2009 for
she ailmations Of NSP2 funds.
AGREEMENT
NOW, THEREFORE, Cry and Housing Authority agree as follows:
1. City and Housing Authority hereby enter into this c0neomum agreement.
2. City and Housing Authority shall submit a form NSP2 applicogw, Ircnryorated herein by We
a
i2� AApplicatir to HCD for padicipetion In Me NSP2 in response to Me NOFA issued on May
which will equest $10,001 In funding for Me following:
Neighb0rhcod Stabilization Program activities for households that d0 not exceed
120Au. of area median Income and with no less than 25% of the NSP2 funds act aside
for households at 50%0f area median Income or below.
3. City and Housing Authority shall cooperatively curry out the NSP2 program in the approved
Appl cadoo, consistent writ constitutional and local law nequldiments any annually allocated and avalatele
funding.
4. City and Housing Authority agree to use the NSP2 funds for tis ac ii ices in the manner presented In
• Me NOFA as approved by HUD and in accortlance with NSP2 Program regublyns. CRY and Housing
Authority also may execute any and all other instruments norma ry or required by HUD for participation in
NSP2.
5. City shell serve as lead member for Perfumes of the Application arty shall assume overall
responsibility for ensuring that the NSP2 program Is camed out In compliance with all NSP2 requirements.
• 6. City appoints and authorizes the City Manager or designee as agent Of the City of Fresno, to
conduct all negotiations, execute and submit documents including, but not limited to, the application.
standard agreement amendments memoranda of understandingrequest for reimbursements and so on,
which may be necessary for participation in and completion of NSP2 including any extensions or
amendments thereof subject to prior approvals as to farm by the Qty Attorney s Office.
IN WITNESS WHEREOF the City and Housing Authority have executed this Agreement as of me dale
first written above.
City of rc no
By J
Andrew T. Souza, City Man er Date
Hous At ori ft e City of Fresno
By —
• reston Prince, Executive Director
pate
Rebecca E. Kitson
City Clerk
By: 0�LH.Z/&�
9/iG/o'J
Deputy v
Date
APPROVED AS TO FORM:
James C. Sanchez
City Attorney
By (/
- F
�. Deputy
Date
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