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Improvement and Expansion of Rental Housing
of 2006 Activities in This Category
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.
The 2006 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 Single Room Occupancy (SRO) housing for individuals with incomes less than 30% of the area's median income, or provide housing for households with incomes less than 50% of the area's median income.
generally be used only for housing units that do not exceed the HOME
purchase price or value limit designated by the Federal Department of
Housing and Urban Development (HUD). For non-HOME funded activities, CD
Office staff may recommend and the CDBG Commission may approve individual
exceptions in cases involving hardship or in cases involving housing built
as part of the City's Inclusionary Zoning requirements.
(after rehab) shall comply with all applicable City
minimum housing and building codes.
The CD Office
will consider an investment of up to a level of $44,400 per housing unit
(approximately 24% of the HOME single-family value limit, a benchmark
standard that will change over time), and will evaluate all proposals based
on the activity's contribution and "value added" to increase the
housing stock, upon activity need, and availability of resources to
determine the appropriate level of funding. The CD Office will give
consideration to the higher end of this $44,400 limit per unit when the
proposal meets the preferences stated above (increases SRO housing, provides
housing for households with incomes less than 50% of median, and offers new
rental units through construction of commercial property to housing).
Activities which incorporate accessibility into the design, involve lead paint reduction, or assure housing affordability that is greater than HOME affordability requirements shall be considered for amounts greater than $44,400 per unit based on increased costs to provide these features, up to a maximum total of $50,00 per unit.
This maximum sum of $50,000 per unit will include the total of all funds provided by the CD Office including, but not limited to, CDBG, HOME, Housing Trust Fund and TIF 10% set-aside. The CD Office may also offer a higher amount per unit as temporary financing to reduce holding costs. Activities meeting the criteria of the Scattered Site Fund may be eligible for an additional subsidy as an incentive to locate particular types of housing in areas of the City that do not have a high concentration of lower income housing.
Newly constructed housing activities will be limited to the development of a total of 16 or fewer units unless
located in areas of the City which do not have a high concentration of lower income housing;
are part of a larger neighborhood revitalization effort; or
housing developer demonstrates that a smaller scale activity that
otherwise meets the objectives within the Program Framework would not be
not-for-profit housing is eligible only for funds available
through the Housing Development Reserve Fund.
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 CD Office funds
received may be applied to staffing and other service delivery costs.
The CD Office
shall secure its funding for capital costs with a mortgage in the form of
a non-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 CD Office funds invested, or the percent of appraised value
which the CD Office funds represent in the value of the property, whichever
activities must comply with the relevant funding source
requirements. The CD Office will require that HOME-funded
activities comply with the regulations in 24 CFR Part 92. The CD 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.
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
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.