STATEMENT OF ISSUE
The First Baptist Church of Tallahassee has submitted a proposal to build a new home for the Saunders family on their home site located at 1025 Dover Street. Under the Church’s proposal, if the City will commit an amount not to exceed $50,000 in financial assistance they would provide for the temporary relocation of the family, organize the demolition of the existing home and construct a new 1,100-s.f. home on the site. The estimated total cost for the demolition, new construction value of donations of supplies and labor for the project is $72,011 (Attachment 2).
In 2008 the City attempted to assist the Saunders family through the Homeowner Rehabilitation Program. The Saunders had been on Tallahassee Urban League’s (TUL) waiting list since 2005. When asked the status of this property, TUL provided the City a letter stating they could not help the Saunders. The family met the program eligibility requirements, but the inspection of the home determined that it was in such a state of disrepair it could not be rehabilitated within the $10,000 limit of the Emergency Home Repair Program or the $40,000 maximum allowed under the Homeowner Rehabilitation Program.
First Baptist Church has asked that the City combine the rehabilitation allowances available under the Homeowner Rehabilitation Program ($40,000) and the Emergency Repair Program ($10,000) so as to be able to provide the family $50,000 in assistance. This assistance would be provided as a zero interest forgivable lien on the property, and because of the higher level of assistance we are recommending that the forgivable lien be for a 15-year period, rather than the 10-year term normally assigned to program recipients.
The City does not typically allow the Homeowners Rehabilitation Program and Emergency Repair Program to combine their funds for a single applicant to increase the funds for rehabilitation. However, staff is recommending approval of this request and believes this is not setting a programmatic precedent. The Saunders family has been on the Homeowner Rehabilitation Program waiting list since 2005, and the issue of them not being able to get their home rehabilitated was that the cost of the rehabilitation exceeded the limits of both programs. We have used the EHRP funds in combination with the homeowner rehabilitation funds before in addressing the life, health and safety concerns in severe cases of older deteriorated homes. Additionally, being able to substantially leverage through private contributions our limited resources by partnering in this faith-based effort allows us to meet the specific housing needs of this family through this action.
RECOMMENDED ACTION
Approve Option 1: Approve a Homeowner Rehabilitation Program Loan for an amount not to exceed $50,000, with the terms described above, to be used for the construction of a new home as specified in the proposal from the First Baptist Church of Tallahassee.
FISCAL IMPACT
The funding will be provided from Project 0800505 – Major Rehabilitation – In-House that has a balance of $202,618.87, and Project #0900208 – Emergency Repair that has a balance of $144,422.23 available as of March 30, 2009, for the Homeowner Rehabilitation and Emergency Repair Programs. The Office of Budget and Policy has reviewed this agenda item and concurs it meets budgetary guidelines.
Thomas H. Lewis, Director, Economic and Community Development
Anita Favors Thompson, City Manager
For information, please contact: Joyce Martinez 891-6526
SUPPLEMENTAL MATERIAL/ISSUE ANALYSIS
HISTORY/FACTS & ISSUES
In 2008 the Saunders’ home at 1025 Dover Street was considered for assistance under the Homeowner Rehabilitation Program. The Saunders’ had been on TUL’s waiting list since 2005. They met the Program eligibility requirements; however, it was determined that the house could not be brought into code compliance within the $40,000 available under the Rehabilitation Program. TUL provided the City a letter stating they could not help the Saunders. The serious level of deterioration on the home suggested that it was not cost effective to rehabilitate the structure.
The First Baptist Church has been working to assist the Saunders’ family. They have temporarily relocated the family into suitable housing. The Church has secured commitments from local businesses and professionals to donate material and services to construct a new home for the Saunders family. The Church has also pledged funds to the project.
The Church has submitted a proposal to the City requesting a funding commitment of up to $50,000 to support some of the costs to construct a new 1,100 s.f. home. The proposal commits the Church to provide for the temporary relocation of the family, the demolition of the current home and construction of the new home. The estimated total cost for the demolition and new construction is $72,011 (Attachment 2). This estimate includes the value of donations of supplies and labor for the project. The Church has developed a schedule (Attachment 3) to use volunteers on a number of the tasks and hopes to have the demolition and construction completed within 13 weeks.
The City has two programs to assist low-income homeowners repair their homes. The Homeowner Rehabilitation Program provides forgivable loans in amounts up to $40,000 to pay for repairs to address code, health and safety issues. The Emergency Repair Program provides grants for up to $10,000 for repairs needed to address immediate health and safety issues.
Generally, a homeowner cannot access both of these programs to combine the funding assistance. There have been instances where the initial scope of work for a rehabilitation project exceeds the $40,000 funding maximum, but in most cases the scope of work can be revised to bring the costs within the spending limit. That is not the case in this situation. Staff does not recommend that the City increase its funding cap for the Rehabilitation Program. However, staff recommends approval of this request and believes that this is not setting a programmatic precedent. The Saunders family has been on the Homeowner Rehabilitation Program waiting list since 2005, and the issue of them not being able to get their home rehabilitated was that the cost of the rehabilitation exceeded the limits of both programs. We have used the EHRP funds in combination with homeowner rehabilitation funds before in addressing the life, health and safety concerns in severe cases of older deteriorated homes. This home definitely fits the high level of life, health, and safety needs issue and cannot be done even by combining those two using the existing structure. The church is willing to fill the gaps and leverage our resources by providing approximately $22,011, or 44% of the requested City contribution. By partnering in this faith-based effort, we are able to meet the specific housing needs of this family and get a new home with a 15-year lien on it (as opposed to our 10-year lien we place on the regular rehabs). Approximately 5 years ago, we eliminated our replacement-housing program that addressed this need of replacing a home that wasn't safe for habitation.
The staff recommendation is to provide a Homeowner Rehabilitation Loan to the Saunders for an amount not to exceed $50,000. The loan would be at 0% interest and forgivable in 15 years. The family would be required to use the property as their primary residence and remain income eligible during the loan period.
CHARITABLE CONTRIBUTIONS
Not Applicable
OPTIONS
Option 1: Approve a Homeowner Rehabilitation Program Loan for an amount not to exceed $50,000, with the terms described above, to be used for the construction of a new home as specified in the proposal from the First Baptist Church of Tallahassee.
Pros:
• Allows for replacement of deteriorated unsafe home with new affordable unit.
• Allows for City resources to be leveraged to provide safe and sanitary housing to eligible homeowners.
Cons:
• Requires deviation from current program guidelines for Homeowner Rehabilitation Program and Emergency Repair Program
• Obligates $50,000 in housing rehabilitation funds that could be used by other eligible homeowners.
Option 2: Do not approve request for a $50,000 Homeowner Rehabilitation Program Loan to support First Baptist Church Proposal.
Pros:
• Would not require the City to deviate from current housing rehabilitation program guidelines.
• Would not obligate $50,000 in housing rehabilitation funds leaving them available of other eligible homeowners.
Cons:
• The Saunders’ home could not be rehabilitated and would continue to present a health and safety concern to the homeowners and community.
• The additional resources provided by the Church could not be utilized to address the housing needs of the homeowners.
ATTACHMENTS/REFERENCES
Attachment 1: Proposal from First Baptist Church
Attachment 2: Project Budget
Attachment 3: Map and pictures of current structure