Title
Amendment to the FY 2010-2011 CDBG and HOME Annual Action Plan (B)
This is a request for the City Commission to approve the first amendment to the FY 2010-11 CDBG and HOME Annual Action Plan to add a new program, Purchase Assistance New Construction Program (PNC) as part of the City's Southeast Gainesville Renaissance Initiative (SEGRI).
Explanation
The Housing & Community Development Division (HCD) proposes to implement the Purchase Assistance New Construction Program (PNC) as part of the City's Southeast Gainesville Renaissance Initiative (SEGRI). The SEGRI is one of the City's initiatives to revitalize southeast Gainesville. The City established the SEGRI area to revitalize lesser developed areas of southeast Gainesville through the construction of new mixed-income housing, while providing a master plan to encourage equivalent quality development on other parcels in the area. The SEGRI initiative is designed to assist in revitalizing the area to eliminating slum and blight by encouraging mixed-income infill residential developments in older neighborhoods in southeast Gainesville. As part of the SEGRI, the City prepared a Neighborhood Revitalization Strategy (NRS) which is designed to address how to revitalize lesser developed areas within the SEGRI through economic development, housing development, and other social services (including community building, education, community facilities and services, crime prevention, and neighborhood character). The SEGRI NRS boundaries are bordered by East University Ave, SE 11th St, S.C.L. Railroad, SE 22nd Ave, City Limits, east of Lincoln Estates Neighborhood, part of SE 8th Ave, and SE 24th St. The SEGRI NRS covers an approximate area of 746 acres. Attached for reference is a copy of memorandum dated May 11, 2011 to the City Commission providing an overview of the PNC SEGRI program.
The purpose of the PNC-SEGRI will provide financial assistance to qualified first-time homebuyers to purchase new homes located within the boundaries of the SEGRI area. The City's PNC-SEGRI may also be leveraged with other public/private resources to make the new home purchases affordable for the first-time homebuyers. The goal of the PNC-SEGRI is to provide affordable homeownership opportunities for eligible homebuyers to purchase new homes developed in the SEGRI area. Homes must be constructed on vacant lots within the SEGRI area only. Priority given to purchasers of new homes located on the former Kennedy Homes site; and to eligible applicants who qualify as Essential Service Personnel (ESP), which is defined as persons in need of affordable housing who are employed in occupations or professions in which they are considered essential to the community as defined by the City of Gainesville. The new homes must be built and sold by a qualified housing developer as approved by the City. The implementation of the PNC-SEGRI Program will assist in addressing the revitalization needs of the SEGRI area; and result in the creation of opportunities to stimulate economic development, recreational and cultural enrichment and ensure improvements in the overall quality of life for all of its residents.
The PNC-SEGRI is an approved housing program as part of the City's Local Housing Assistance Plan (LHAP) for the State Housing Initiatives Partnership (SHIP) Program. The purpose of the PNC-SEGRI is to provide financial assistance to qualified first-time homebuyers to purchase new homes located within the boundaries of the SEGRI area. This program will address the need to provide decent, safe and affordable homes to income eligible families. Funds will be used as a subsidy to provide subordinate mortgage financing to make the new homes affordable. The PNC-SEGRI will provide up to $25,000 in assistance, of which $5,000 can be utilized on closing costs. The funds shall be made available in the form of a 0% interest rate, 10-year due on sale loan forgivable at the end of the compliance period. A mortgage will be recorded on the property. The recipient is required to own and occupy the property as a principal residence during the compliance period. If the recipient defaults on any terms of the mortgage and note during the compliance period, then the full balance of the loan shall become due and payable.
The goal of the PNC-SEGRI is to provide affordable homeownership opportunities for eligible homebuyers to purchase new homes developed in the SEGRI area. Homes must be constructed on vacant lots within the SEGRI area only, with priority given to purchasers of new homes located on the former Kennedy Homes site. The new homes must be built and sold by a qualified housing developer as approved by the City.
Applications for assistance under this program will be reviewed and approved based on a competitive process based on the PNC SEGRI program guidelines. Priority will be given to eligible applicants who qualify as Essential Service Personnel (ESP), which is defined as persons in need of affordable housing who are employed in occupations or professions in which they are considered essential to the community as defined by each county or municipality. In accordance with the LHAP, the City of Gainesville defines ESP as: "any household earning 120 % area median income (AMI) or below and, employed in the education system as teachers and educators; police, fire and code enforcement personnel; government employees; military personnel; health care personnel; or skilled building trades". However, due to the combined allocation of HOME program funding, the maximum household income will be limited to 80% of the AMI. The HCD Division will announce a competitive application cycle to the general public through advertisements in the local newspapers, press releases and the City's website.
The implementation of the PNC-SEGRI Program will assist in addressing the revitalization needs of the SEGRI area; and result in the creation of opportunities to stimulate economic development, recreational and cultural enrichment and ensure improvements in the overall quality of life for all of its residents.
As part of the public participation process, staff published a notice of the proposed amendment in the Gainesville Sun newspaper on May 28, 2011for public notice and comment. HCD staff also presented this amendment to the Citizens Advisory Committee for Community Development (CACCD) on June 21, 2011, and the CACCD has recommended approval. This amendment will add the PNC SEGRI to the City's FY 2010-2011 CDBG and HOME Annual Action Plan for implementation of the program. This Amendment will have no adverse impact on any projects and activities currently funded in the FY 2010-2011 Annual Action Plan. All of the elements of the City's current FY 2010-2011 are hereby incorporated into this Amendment.
Fiscal Impact
The proposed budget for the PNC-SEGRI is $275,000. The funds for implementation of this program have been identified in the Housing and Community Development Division's HOME Program budget in the amount of $255,000; and SHIP Program budget in the amount of $20,000. The City's PNC-SEGRI may also be leveraged with other public/private resources to make the new home purchases affordable for the first-time homebuyers.
Recommendation
The City Commission: 1) approve the first amendment to the FY 2010-2011 CDBG and HOME Program Annual Action Plan to implement the PNC SEGRI program.; and 2) authorize the City Manager or designee to submit the amended FY 2010-2011 Annual Action Plan to the U.S. Department of Housing and Urban Development (HUD); and 3) authorize the City Manager or designee to execute the necessary documents related to amendment of the FY 2010-2011 CDBG and HOME Program Annual Action Plan, subject to approval by the City Attorney as to form and legality.