Meeting Date: April 27, 2021
To: Members of the Housing & Redevelopment Authority
From: Melissa Hanson, Housing Coordinator
Mitzi A. Baker, Community Development Director
Title
Rice County Habitat for Humanity Requests
Body
Action Requested:
Determine HRA response to three requests from the Rice County Habitat for Humanity regarding proposed builds within Northfield.
Summary Report:
The Northfield Housing & Redevelopment Authority (HRA) Board received a written memo from Rice County Habitat for Humanity (Habitat) including three requests regarding future Habitat builds proposed in Northfield. A copy of the memo is attached to this report. Two Board members, Gerdes and Fink, volunteered to meet with staff to review and discuss the requests, review HRA financials and provide input to inform recommended actions for the Board’s consideration. Items requested by Habitat are
#1 - request for the Northfield HRA to pay the full building permit fees for their six (6) builds in Northfield, as a grant;
Habitat’s initial request for HRA to pay the full amount for permit fees for 6 builds in Northfield, was estimated to be up to $42,000, if including sac/wac (sewer and water access charges). In speaking with city engineering staff, it was determined that these builds are to occur in established housing developments where access to City water and sewer is available and sac/wac does not apply. The Building/Inspections Division staff estimate the combined total permit fees for all 6 builds to be $11,807. The City has received one permit request from Habitat for a quad home to be built on Cotton Lane in Southbridge.
In checking with other HRA’s, staff found some examples of contributing funds to nonprofits, such as Habitat, in order to assist those of low to moderate incomes obtain homeownership, often through new construction. Faribault HRA has recently contributed $5,000 to each of the 3 Habitat homes to be built in Faribault. Red Wing HRA recently committed to contributing $10,000, from their Affordable Housing Trust Fund, each year for 3 years to be applied to permit fees and sac/wac for 3 homes to be built by Habitat.
If the HRA wishes to support this request, funding would need to be from the HRA Reserves. There are currently no dollars budgeted for this type of request.
#2 - request to fully fund $25,000 Down Payment Assistance to each of the six Habitat home buyers, for a total of $150,000 through CDBG, Levey or any other funds available.
The CDGB Down Payment Assistance program currently has available funding to support two (2) Down Payment Assistance loans. These are open and available to any qualifying applicant on a first come-first serve basis. Families currently working with Habitat are encouraged to apply for this down payment assistance asap, if they would like to be considered for this program. If approved, the buyer has 90 days to commit to a purchase and the dollars are reserved for the approved applicant during that time period.
If the Board wishes to expand options for down payment assistance, a new program would need to be developed. Board Members Gerdes and Fink support the idea of using Levy funds to develop a down payment assistance program, separate from the current down payment assistance program funded by CDBG. Staff, supports this concept, and would need time to develop program criteria, procedures and policies for the Board to consider. Staff has concerns with developing a program that would reserve funds for Habitat buyers only, however. To provide transparency, equity and fair access to HRA programs, it is important to develop programs that are made available to any qualifying applicant, conveyed to the community, and not limited to those affiliated with any particular organization. Details of such a program will need to be developed and discussed at a future meeting, if this is a direction supported by the Board.
Board Members Gerdes and Fink suggested consideration to create a new levy funded down payment assistance program using up to $250,000 of HRA reserves, with consideration for assistance for the buyers working with Habitat.
Staff recommends the portfolio of HRA programs be reviewed prior to any formal decision, and include consideration of the broader context of housing needs, the City’s strategic priorities, and limited resources.
#3 - Habitat would like the HRA Board to initiate a Build Day with Habitat and to engage the HRA, EDA, Planning Commission, City County and City Staff to participate.
Board Members Fink and Gerdes, while generally supportive of a Build Day with the afore mentioned groups, conclude the HRA Board does not have the authority to approve this request on behalf of others.
Recommended Actions:
Responding to the three specific requests from Habitat, recommendations are:
#1 The Northfield Housing & Redevelopment Authority approve paying up to $12,000 total, from HRA Reserve funds, for building permit fees associated with the six (6) proposed Rice County Habitat for Humanity’s builds in Northfield. Additionally, the approval be subject to permits being issued in 2021.
#2 The Northfield Housing & Redevelopment Authority, at this time, deny Rice County Habitat for Humanity’s request to fully fund $25,000 in Down Payment Assistance to each of six applicants for a total of $150,000.
#3 The Northfield Housing & Redevelopment Authority decline the Rice County Habitat for Humanity’s request for the HRA Board to organize a Build Day with Habitat.
Further, staff requests the HRA Board indicate their level of support to consider developing a new levy funded down payment assistance program, and to consider that at a future meeting in the broader context of housing and programming priorities.
Alternative Options:
HRA could choose not to assist Habitat with funds to pay for permit fees.
Financial Impacts:
The HRA will have $1,133,618 remaining unassigned funds in reserves after accounting for CAC’s Hillcrest project. Payment of building permit fees for the Habitat builds would reduce HRA reserves by up to $12,000.
Tentative Timelines:
The City Northfield has so far received one building permit from Habitat for the quad home on Cotton Lane. Habitat has reported to staff that 3 families have been identified as eligible for their housing program.