HomeMy WebLinkAboutIR 6941 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 6941
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E VORP 0 To the Mayor and Members of the City Council
' _ June 5, 1984
�rEXPh• Subject: RENTAL REHABILITATION BLOCK GRANT
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Background
On December 22, 1983, CityO'Council approved changes to the Rental
Rehabilitation Program in order to encourage greater participation from
owners of moderately priced rental housing (M&C G-5841). The Rental
Rehabilitation program will increase the availability of safe and decent
housing for low and moderate income families by providing financial
assistance to owners for the repair of substandard rental property. The
assistance is in the form of a loan that makes up the difference between
the total cost of repair and the amount of conventional debt the pro-
perty can support from rental revenue.
Since City Council approved the modifications to the original program
design, staff has received 51 applications representing 106 rental
units. One project, containing sixteen units, has been completed. All
of the families in the completed project are either low or moderate
income. Six families are receiving rental assistance from the Section 8
program. Four of these families came from the Housing Authority's
waiting list.
On March 8, 1984, resented
staff P the City Council sane preliminary
information on the Housing and Urban - Rural Recovery Act of 1983 (I.R.
No. 6917). Among other provisions, the Act authorized the Rental Rehab-
ilitation Block Grant Program for the repair of low and moderate income
rental housing. The City has since been notified by the U. S. Depart-
ment of Housing and Urban Development (HUD) that we are eligible to
receive $296,500 in Rental Rehabilitation Block Grant funds for FY 84.
In addition, the City will receive approximately 60 Section 8 rental
assistance certificates for use with the program.
Program Requirements
The design of the Rental Block Grant program will remain basically the
same as the Rental Demonstration (M&C G-5841, I.R. No. 6799). As a
result of requirements established in the Rental Block Grant legisla-
tion, however, some changes must be made to our current Rental Program.
For the sake of consistency, the following changes will be incorporated
into the Rental Demonstration and, if approved by Council, into the
application for the Rental Rehabilitation Block Grant.
First, cities are required to give priority to larger (two or more bed-
rooms) units. To meet this requirement, it is proposed that:
1. The conversion of larger units to smaller units be prohibited;
2. No more than 25% of funds be allocated to one bedroom units.
Funds will be budgeted on a quarterly basis;
ISSUED BY THE CITY MANAGER J
FORT WORTH,'TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 6941 F. 2
y�pPTlq,0
f soer, To the Mayor and Members of the City Council June 5, 1984
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rexPy Subject: RENTAL REHABILITATION BLOCK: GRANT
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3. The allowable level of assistance be increased as the number of
bedrooms increase.
Unit % of Maximum
Size Rehab Cost Subsidy
1 (Vacant) 40 5,000
1 50 6,000
2 60 8,000
3 70 9,000
4 80 10,000
Since the maximum amount of Rental Block Grant funds
that can be used per unit is $5,000, this approach
will require the use of Community Development Block
Grant funds to provide the additional subsidy.
A second requirement is that 100% of Rental Block Grant funds be used
for lower inoxya benefit. HUD will allow a reduction of this benefit
requirement if the City certifies that the reduction is necessary to
develop a viable program. Since staff has no control over the tenant
income mix of properties assisted, it is recommended that a waiver be
granted to reduce the required program benefit to 70%. This will reduce
the potential for displacement of families in properties being repaired.
Third, neighborhoods eligible for the program must have median incomes
that are less than 80% of the City's median. This requirement will
necessitate some slight changes to the current rental tarqet areas.
Finally, the Rental Block Grant places no upper limit on the number of
units per project. Since program funds will effectively limit project
size, staff recommends that no upper limit be placed on the City's
Rental Prograin.
Program Application Schedule
Unless otherwise directed by Council, staff will prepare an application
for submittal to HUD that incorporates the above design components.
ISSUED BY THE CITY MANAGER — FORT WORTH, TEXAS
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 6941 - p,_3
PD0"
oE soRryp To the Mayor and Members of the City Council
June 5, 1984
v � s
rfXPy Subject: R=AL RFliABILITATION BLOCK GRANT
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The City's application for funds waist be submitted to HUD by July 9,
1984. The draft application will be reviewed by C omunity Development
Council on June 11, and submitted for City Council approval immediately
afterward.
* * * * * * * * * *
Additional information is available upon Council request.
Robert L. Herchert
City Manager
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ISSUED BY THE CITY MANAGER -- FORT WORTH, TEXAS