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Improvement and Expansion of Rental Housing
Preferences ||| Conditions ||| Activities
These activities improve the availability and quality of affordable rental housing, as well as strengthen existing neighborhoods through the improvement of current rental housing stock and management. The activities generally help agencies acquire and/or renovate affordable rental housing units and use the housing as a base for other neighborhood improvement activities or create affordable rental opportunities in areas of the City where few such opportunities now exist. The activities in this category include acquisition and/or rehabilitation. These activities address Objective C in the Five-Year Plan and generally benefit households with incomes 50% of median or less.
One objective of some of these activities is to expand the supply of rental housing for those with special needs into areas of the larger community (and the County) where few such housing units exist. The national benchmark is to minimize the number of census tracts with concentrations of households with poverty level incomes greater than 40% of the census tract population. Local benchmarks are stated in the Fair Share Inventory and the Consolidated Plan. The positive statement of this benchmark is to increase the economic diversity of census tracts where less than 25% of the households are low- and moderate-income.
Some of these activities also improve the existing stock and the availability of special needs housing units, particularly in areas of the City (and, for some funds, the County) where such housing does not currently exist, or helps eligible households to afford such housing through direct subsidies. These activities generally help non-profit agencies to acquire and/or renovate housing which combines supportive services for particular populations, such as homeless persons or persons with AIDS. These activities address Objective C in the Five-Year Plan and generally benefit households at 30% of the median income or less. Construction of new units will generally be assisted only in the Scattered Site areas in order to meet the intent of the fair share goals.
Funds will be applied to the acquisition, construction or rehab of permanent or transitional rental housing with rents at HOME rent levels, or equal to or below 85% of the area's Fair Market Rent.
Housing projects shall be limited to the development of a total of 8 or fewer units, unless located in areas of the City which do not have a high concentration of lower income housing, or are part of a larger neighborhood revitalization effort.
The 2004 objective is to either construct or bring a total of 83 units to code in a manner which makes them affordable and supports neighborhood activities, as well as assist 255 households into more stable or improved rental situations.
For information on how to submit a proposal in this category, click here.
The Commission will give preference to activities which:
increase SRO housing for individuals with incomes less than 30% of the area's median income;
create housing with rents less than 60% of the Fair Market Rent;
provide housing for households with incomes less than 50% of the area's median income; or
incorporate accessibility requirements into the activity design.
Projects meeting the criteria of the CDA Scattered Site Fund may be eligible for an additional subsidy as an incentive to locate particular types of housing in areas of the City which do not have a high concentration of lower income housing.
Housing (after rehab) shall comply with all applicable City minimum housing and building codes.
Existing not-for-profit housing is eligible only for funds available through the Housing Development Reserve Fund.
Proposals will be limited to receipt of $37,500 per housing unit. This sum will include the total CDBG and/or HOME funds received. NOTE: The CDBG Office will give consideration to higher per-unit amounts or percentages when the proposal meets the preferences stated above, involves lead paint hazard reduction, or is temporary financing to reduce holding costs. These higher amounts, up to $10,000 per unit (or the maximum subsidy amount per the HOME guidelines, whichever is less), will be evaluated based upon project "need" and availability of resources.
Activities may not exceed a total secured funds-to-value ratio greater than 115% from all sources.
A minimum of 85% of all funds received shall be applied to capital costs including acquisition and closing costs, rehabilitation, labor and materials, design and engineering costs, and relocation costs. A maximum of 15% of the total CDBG Office funds received may be applied to staffing and other services delivery costs.
The CDBG Office shall secure its funding for capital costs with a mortgage in the form of a recourse loan. Funds will be provided in the form of a long-term deferred loan payable upon sale of the property or change in the use of the property. The mortgage will require a repayment equal to the amount of CDBG or HOME funds invested, or the percent of appraised value which the CDBG or HOME funds represent in the value of the property, whichever is higher.
All activities must comply with the relevant funding source requirements. The CDBG Office will require that HOME-funded activities comply with the regulations in 24 CFR Part 92. The CDBG Office will require that ESG-funded housing activities comply with ESG requirements and be designed to serve homeless individuals as defined in 24 CFR 576. Activities must be designed to contribute a 50/50 in-kind or cash match for all ESG funds awarded..
The Commission will assist ESG activities which support a continuum of care strategy, and give priority for ESG funds to those activities which help expand the supply of transitional housing. Buildings using ESG funds for minor rehab must be maintained as transitional housing or as a shelter for the homeless for not less than a three-year period; if the the funds are used for major rehab, for not less than a ten-year period.
NOTE FOR COMMUNITY HOUSING DEVELOPMENT ORGANIZATION (CHDO) HOUSING: Fifteen percent (15%) of HOME funds available to the City are reserved for agencies which meet the HUD definition of a Community Housing Development Organization (CHDO), as defined in 24 CFR Part 92. CHDO-sponsored, -managed or -owned projects may be considered for predevelopment or technical assistance loans.
Ongoing / currently funded activities in this category include:
City CDBG: Housing Development Fund (Rental)
City CDBG: ESG Rehab Project Reserve Fund
City CDBG and City CDA: Scattered Site CLA Fund
Community Action Coalition: RENT-ABLE Program
Madison Development Corporation: Consolidated Housing
Porchlight, Inc.: Rental Housing Development
Project Home: Neighbor-Owned Affordable Housing (NOAH)
Continuing projects approved in prior years include Housing Initiatives' Ruskin Street Office/Rental Housing Development, Goodwill's Old Middleton Road Rental Housing, Porchlight's single Housing Development, Independent Living's Segoe Road Fire Alarm Installation, Madison Development Corporation's Milwaukee Street Housing Development, and Tellurian's Willy Street SRO Rehab and Expansion project.