Minutes 03/10/1987 - Laserfiche WebLink

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lJgr' '--:t .. TUESDAY, MARCH 10, 1987 DATE: March 4, 1987 .~ TO: The Honorable Mayor and City Council FROM: George W. Brown, City Manager SUBJECT: Housing Rehabilitation Program In late 1985, the City was awarded a Virginia Community Development Block Grant (VCDBG) for $2l4,570 to help finance the Southside Housing Rehabil- itation Program (HRP). Various other funds were obtained to provide a total of almost $591,000 to rehabilitate thirty low and moderate income (LMI) owner-occupied and ten rental units by the end of this' year. .,'- To date, seven owner-occupied units have been rehabilitated and four others are in various stages of processing or construction, for a total of eleven. The rental rehabilitation program is progressing satisfactorily with eight units completed or under construction, and should meet its ten- uni t goal. The thrust of the HRP is to make a visible and lasting concentrated impact in a neighborhood. Previous experience in the other two neighborhoods demonstrated that the HRP can make a considerable contribution to retaining and upgrading the City's housing stock, simultaneously encouraging popula- tion stability and growth. Although our efforts have had an impact in the Southside neighborhood, cur- rent progress will not result in reaching the goal of thirty owner-occupied units. Despite significant initial interest in the program, and our con- centrated publicity, door-to-door visits, and consultations with advisory groups and agencies, low-income homeowners are generally unwilling to commit themselves or their homes to a twenty-year loan. Unless changes are made in the financing options, we will fall significantly short of our stated goal. We would lose an important opportunity to upgrade more housing and could possibly jeopardize our chances of securing future VCDBG funds for housing or other community development projects. Despite an attractive financing package, many of the elderly and very-low income (VLI) families cannot realistically afford a long-term commitment to monthly payments for home improvements, regardless of how badly rehabilita- tion is needed. We have had several potential jobs fall through because of this. Even elderly people who could afford a small loan payment are reluctant to take on a lien that might become due upon their death or if the house is sold because they must enter a nursing home. The current program differs in two significant aspects from the first HRP: we are getting much more interest from the elderly, and a private lending institution's funds are involved for the first time. Thus, a family's credit situation and ability to pay are reviewed even more closely. We have already had to deny application for the rehabilitation of one of the worst houses in the neighborhood. The elderly resident's credit situation prevented reasonable consideration for a loan. No financing option is cur- rently available to address this eyesore, short of forced demolition.