Charlotte City Council
Housing and Neighborhood Development
Committee
Summary Minutes
February 14, 2006
COMMITTEE AGENDA TOPICS
INFORMATION
I.
Subject:
Johnston and Mecklenburg Mill Properties Update
The Committee received an update on the status of the Johnston and
Mecklenburg Mill Properties.
II.
Subject:
Preview of Upcoming Agenda Items
The Committee reviewed their list of upcoming agenda items and requested that the
upcoming Focus Area Plan and action agenda be brought back to them for final review and
approval.
ACTION
III.
Subject:
Oaklawn Mixed-Use Redevelopment
The Committee reviewed and recommended approval of the land sale and selected
The Drakeford Company as the master developer for the Oaklawn-Mixed Use
Redevelopment project with the inclusion of exploring options to employee
neighborhood residents in the retail component of the project.
IV.
Subject:
Housing Trust Fund Strategic Plan
The Committee reviewed the Housing Trust Fund Strategic Plan. (Excluding a
funding recommendation, which will be considered as part of the City Council’s
FY2007 Budget process.)
V.
Subject:
Set 2006 Meeting Schedule
The Committee scheduled their monthly meetings for the fourth Tuesday at noon.
Other:
COMMITTEE INFORMATION
Council members Susan Burgess, Anthony Foxx, Michael Barnes, Don Lochman,
Pat Mumford
Council members James Mitchell and Nancy Carter
Staff:
Julie Burch, Tom Flynn, AC Shull, Stanley Watkins and Stanley Wilson
Time:
12:05 PM – 1:45 PM
Present:
ATTACHMENTS
1. Agenda Packet – February 14, 2006
Housing and Neighborhood Development Committee
Meeting Summary for February 14, 2006
Page 2
DISCUSSION HIGHLIGHTS
INFORMATION
I.
Johnston and Mecklenburg Mill Properties Update
Stan Wilson updated the Committee on the status of the Johnston and Mecklenburg Mill
Apartments. This item was referred to the Committee by the City Manager. Key points include the
following:
ƒ
Mecklenburg Mill Apartments is a 60-unit complex located at 3327 North Davidson Street. In
January 1995, the City invested $2.4 million for the rehabilitation of the units for affordable
housing.
ƒ
Johnston Mill Apartments is a 90-unit complex located at 3315 North Davidson Street. In May
1992, the City invested $3.3 million for the rehabilitation of the units for affordable housing and
an additional $600,000 in September 2004 to take control of the entire development and to
protect the City’s investment.
ƒ
The City has foreclosed on both the Mecklenburg and Johnston Mill apartments.
ƒ
Mr. Wilson updated the Committee by informing them that the Proposal Review Team had their
second meeting on Thursday, January 26, 2006. During that meeting the team discussed the
items that it would like to see in the RFP, observations from the tour, the need to understand the
positive impact that the Mills can have on transit development and other opportunities for
redevelopment. The final Team meeting is anticipated for the week of February 27, 2006 at
which time the RFP will be finalized. The Team has indicated that they want to ensure that the
RFP document provides the best opportunity to: maintain affordable housing units, repay City
debt, enhance transit development and provide a development that meets the community needs.
He also informed the Committee that per their request at the November meeting, the Team has
been expanded to include diversity by adding a representative from the Villa Heights
neighborhood.
Questions/Answers/Comments:
Barnes:
How much money will be returned to the City?
Wilson:
Most of the City’s investment is expected to be returned.
Barnes:
What will this money be used for?
Wilson:
All money will be used for additional affordable housing.
Burgess:
What are the community’s concerns?
Housing and Neighborhood Development Committee
Meeting Summary for February 14, 2006
Page 3
Wilson:
Their primary concerns are the integration of transit and maintaining the character
of the neighborhood.
Burgess:
There are currently 150 units on the site. What will the RFP request?
Wilson:
There is room for flexibility in the development, but the RFP will request at least
150 units for the site.
Mumford:
Are we restricted with the use of the funds received from the sale?
Wilson:
$8 million of the funds received from the sale will be used to pay back the Section
108 loan.
Next Steps/Action:
Mr. Wilson commented that the RFP and a preliminary financial analysis will be presented to the
Housing and Neighborhood Development Committee for review and recommendation at their
March meeting.
II.
Preview of Upcoming Agenda Items
The Committee reviewed their list of upcoming agenda items and requested that their upcoming
work plan be brought back to them for final review and approval.
Questions/Answers/Comments:
Burgess:
How is the 2006 Neighborhood Symposium planning progressing?
Watkins:
Neighborhood Services staff is continuing their planning efforts. We will share an
update with you at the next meeting.
ACTION
I.
Oaklawn Mixed-Use Redevelopment
AC Shull presented information on the Oaklawn Mixed-Use Redevelopment project. He informed
the Committee that this is a seven-acre site located at the corner of Statesville Avenue and Oaklawn
Road. He reminded the Committee that they approved the RFP process in July of 2004. Key points
include the following:
ƒ
The Charlotte-Mecklenburg Housing Partnership (CMHP) formed the Seven Acres Partnership
in response to a proposal for redevelopment of the seven acre site. This partnership included
CMHP as the master developer, the Provident Group of the Carolinas as the retail component
developer and the Drakeford Company (TDC) as the master development project manager and
the residential component developer.
Housing and Neighborhood Development Committee
Meeting Summary for February 14, 2006
Page 4
ƒ
ƒ
Due to the likelihood of unsuitable soil conditions, CMHP has withdrawn their interest and
recommended that The Drakeford Company assume the role of master developer.
The Drakeford Company has agreed to pay the City $330,620 for the site which will provide an
affordable land cost for the townhouses to sell for $110,000-$145,000. The appraised land value
is $789,500.
ƒ
The retail development will require a subsidy. Consequently, the Seven Acres partnership
included a master developer subsidy of $161,000 for the 1.25 acres dedicated to the retail
portion which matches the value assigned to the land.
ƒ
The Drakeford Company has agreed to a proposed participation agreement whereby the City of
Charlotte shall be paid additional compensation in the event a more intense residential
development and a higher market price than was outlined in the proposal occur.
ƒ
The City will share in site remediation/improvement costs and the installation of an access road
by deducting from the $330,620 purchase offer a shared percentage of costs. This cost sharing
for site remediation is estimated to cost the City up to 50% of the actual cost, but shall not
exceed the $330,620 purchase price of the land.
Questions/Answers/Comments:
Lochman:
What are the estimated cleanup costs?
Shull:
$100,000 is the estimated costs. However, we will not know for sure until we
actually begin the work.
Barnes:
Did The Park at Oaklawn housing units increase the value of this land?
Shull:
No.
Lochman:
What is the basis for this project? Who are we trying to serve?
Watkins:
We are trying to provide additional affordable housing for individuals who earn less
than 80% of AMI.
Shull:
In addition to serving the population that Stanley Watkins mentioned, a previous
market study for this area supports this type of development.
Foxx:
How do price points of this project compare to price points in other surrounding
neighborhoods?
Watkins:
The price points may be a little higher in the Greenville neighborhood, but they are
comparable to price points in The Park at Oaklawn.
Lochman:
What’s the normal return on investment for this type of project?
Housing and Neighborhood Development Committee
Meeting Summary for February 14, 2006
Page 5
Shull:
Around 12% to 15%.
Lochman:
If that’s the case, why are we pursing this project at 7%?
Flynn:
This is based on Council’s policy direction as to the type of investment the
Statesville Corridor plan recommends and this also completes the Hope VI project.
Mumford:
Did any other developers express interest in this project?
Shull:
Yes, one other developer expressed interest, but they were only interested in building
commercial units.
Burgess:
How far is this project from Center City?
Shull:
The project is approximately 1 ½ miles from Center City.
Foxx:
How many jobs will be created in the retail component of this project?
Shull:
The number of jobs created will depend on the types of businesses that locate at the
site.
Foxx:
Is there an assurance that people in the surrounding neighborhoods will be
employed by the project? Could we include something in the contract that ensures
this?
Flynn:
We cannot guarantee jobs to neighborhood residents. However, we will work with
the developer to explore ways to notify them of the potential employment
opportunities.
Burgess:
Has C.N. Jenkins Presbyterian Church been involved in discussions about this
property?
Shull:
Yes and I am keeping them informed as we move through the process.
Burgess:
Is this property ever used?
Shull:
The property is used once per year for a church convention.
Next Steps/Action:
Council member Foxx made a motion to approve the land sale, the selection of The Drakeford
Company as the master developer for the project and asked that staff work with the developer to
ensure that surrounding neighborhood residents are aware of potential employment opportunities
within the project. Council member Barnes seconded the motion. The Committee unanimously
Housing and Neighborhood Development Committee
Meeting Summary for February 14, 2006
Page 6
approved the motion.
II.
Housing Trust Fund Strategic Plan
Stanley Watkins provided an overview of the Housing Trust Fund Strategic Plan. Key points include
a brief background and information on the proposed strategic plan.
Background:
ƒ Since 2002, City Council through voter approved bonds and other appropriations have
designated $47 million for the Housing Trust Fund.
ƒ
To date, 100% of the Housing Trust Fund’s appropriations have been allocated to housing
funding categories and all but $8 million has been awarded to affordable housing developments.
ƒ
The results so far have been the financing of 2,300 affordable homes of which 811 have been
completed. The Housing Trust Fund primarily serves families earning an annual income of
$38,500 or less.
Proposed Plan:
ƒ On March 12, 2005 the Housing Trust Fund Advisory Board held its Annual Retreat. The focus
of the retreat was:
• Long-term future of affordable housing in the City
• Role of the Trust Fund in ensuring an adequate supply of affordable housing in
Charlotte
ƒ
A Housing Market Study, commissioned by the Housing Trust Fund in 2005, forecasts a need
for 12,530 new affordable rental homes by 2010 for families with annual earnings of less than
$16,000.
ƒ
Based in the market information and key affordable housing issues, the Housing Trust Fund
drafted the following vision statement:
• Everyone in our community should have the opportunity to have a good place to live
and achieve potential;
• The community should make available a continuum of housing options for its residents
ranging from shelter and transitional housing for the homeless and special needs
populations, to low and moderate-income rental homes and ownership homes;
• The best model for success is building sustainable mixed-income communities
ƒ
The Housing Trust Fund Advisory Board established a goal of meeting 50% of the 2010
projection over the next ten years, which would require an annual capital budget of $76 million.
Housing and Neighborhood Development Committee
Meeting Summary for February 14, 2006
Page 7
ƒ
The Strategic Plan also sets forth strategies and action plans for the Housing Trust Fund
Advisory Board to address: Funding, Housing Policy, Trust Fund operations and education and
Outreach initiatives.
ƒ
The Housing Trust Fund is seeking City Council endorsement of its vision, goals and action
plan, which expands the scope of its original mission.
Questions/Answers/Comments:
Mumford:
Was the number of housing units produced a result of all housing funds or just the Housing
Trust Fund dollars?
Watkins:
This goal included all housing funds.
Burgess:
How will the decline in federal funding affect revitalization funds?
Watkins:
It will be challenging. We will probably not be adversely affected as much in FY07
because we expect to receive additional program income. However, we will be
significantly challenged in FY08.
Burgess:
You mentioned that there is a need for 10,178 rental homes. Where are the people
who need these units currently housed?
Watkins:
They are currently housed in units with rents that they cannot afford.
Lochman:
Is the large number of people who fit this profile due to the population increase?
Watkins:
Yes.
Barnes:
In the vision statement you mention that the Housing Trust Fund Advisory Board
supports a continuum of housing options including homeownership. What type of
homeownership counseling does the City provide?
Watkins:
The City sponsors homeownership programs including pre and post counseling
through the HouseCharlotte program. The City also sponsors a program to help
avoid foreclosures. In addition, many of our partners provide homeownership
counseling.
Barnes:
Can you cite any long-term success stories of mixed income communities?
Watkins:
First Ward is an example. We can bring you back examples from other cities at the
next meeting.
Burgess:
Can we serve more people in the lowest income range and if we do, what does this
do to the long-term sustainability of the units?
Housing and Neighborhood Development Committee
Meeting Summary for February 14, 2006
Page 8
Watkins:
A mix of units is required to financially sustain a development.
Lochman:
There is no practical way to create affordable housing without serving a mix of
people.
Mumford:
I think we should continue looking at a narrow focus. At this point, I think we
should not focus on homeownership; instead we should focus on rental housing for
the working poor. We should direct our money where no other money is being
directed.
Lochman:
I support Council member Mumford’s suggestion of being narrowly focused.
Considering the current budget situation, we cannot afford to focus on creating
affordable homeownership.
Watkins:
Homeownership helps with neighborhood revitalization efforts in terms of helping
stabilize a neighborhood.
Mumford:
The Housing Trust Fund should have a narrow focus, not the other revitalization
fund.
Foxx:
If we raise the percentage of 30% and below of area median income how does that
affect the sustainability of a project?
Watkins:
It means that we produce fewer units.
Lochman:
Does the private sector tend not to invest in low end housing due to the possibility
of the lack of sustainability? Following the market will not allow us to meet the
need.
Foxx:
How would narrowing the focus be different than our current efforts?
Mumford:
When the Housing Trust Fund was implemented, Housing Trust Fund dollars were
used for homeownership, special needs and single room occupancy housing. We
should take the opportunity to meet the current existing unique housing needs.
Burgess:
We need to establish a number that we want to introduce to the community. This
will help us decide how much we are willing to support for affordable housing needs.
Foxx:
Have you considered other types of financing? For example, tax increment
financing.
Watkins:
Yes, in other markets we have seen dedicated funding sources. We can provide
examples of alternative sources.
Housing and Neighborhood Development Committee
Meeting Summary for February 14, 2006
Page 9
Next Steps/Action:
Stanley Watkins confirmed that the Housing Trust Fund Advisory Board will look at a narrow focus
and explore information on alternative funding models.
Council members encouraged staff to: 1) look for new funding models and report back at the next
Committee meeting; and 2) to explore the option of rehabilitating existing apartment homes and
converting them into affordable housing.
III.
Set 2006 Meeting Schedule
The Committee scheduled their monthly meetings for the fourth Tuesday at noon.
The meeting was adjourned at 1:45 P.M.
City Council
Housing and Neighborhood Development
Committee Meeting
Tuesday, February 14, 2006 – 12:00 Noon
Charlotte-Mecklenburg Government Center – Room CH-14
Committee Members:
Susan Burgess, Chair
Anthony Foxx, Vice-Chair
Michael Barnes
Don Lochman
Pat Mumford
Staff Resource:
Julie Burch
AGENDA
INFORMATION
-
Johnston and Mecklenburg Mill Apartments Update
Preview of Upcoming Agenda Items
-
Statesville Oaklawn Road Corridor
Housing Trust Fund Strategic Plan
Set 2006 Meeting Schedule
ACTION
________________________
Distribution:
Pam Syfert, City Manager
Mayor/Council
City Leadership Team
Corporate Communications
Debra Campbell - Planning
Stanley Watkins – Neigh. Dev.
Richard Woodcock – Neigh. Dev.
Stan Wilson – Neigh. Dev.
Stephanie Small – Neigh. Dev.
Walter Abernethy – Neigh. Dev.
Pat Mason – Neigh. Dev.
Ruffin Hall – Budget Office
Mike Nail – Budget Office
Anna Schleunes – City Attorney Office
Housing Trust Fund Advisory Board
Charles Woodyard -CHA
Pat Garrett - CMHP
Ken Symanski – Charlotte Apartment Assoc.
Johnston and Mecklenburg Mill Apartments Update
Housing and Neighborhood Development Committee
February 14, 2006
Committee Action Requested:
Receive as information an update on the status of the Johnston and Mecklenburg Mill Apartments.
(This is a referral by the City Manager.)
Policy Framework:
ƒ The City’s FY2006 Consolidated Action Plan approved by City Council on June 13, 2005
identifies the need for affordable, safe and decent housing for low and moderate-income
families.
Background:
ƒ Mecklenburg Mill Apartments is a 60-unit complex located at 3327 North Davidson Street. In
January 1995, the City invested $2.4 million for the rehabilitation of the units for affordable
housing.
ƒ Johnston Mill Apartments is a 90-unit complex located at 3315 North Davidson Street. In May
1992, the City invested $3.3 million for the rehabilitation of the units for affordable housing
and an additional $600,000 in September 2004 to take control of the entire development and
to protect the City’s investment.
ƒ The City has foreclosed and taken possession of both the Mecklenburg and Johnston Mill
apartments.
Update on the Request for Proposal Process:
ƒ The twelve-member Proposal Review Committee will be represented by the following:
- Kevin Sutton, NoDa Neighborhood Association
- Chad Maupin, NoDa Neighborhood Association
- Paul McBroom, NoDa Business Association
- Paul Sires, NoDa Business Association
- Fred Dodson, Charlotte Mecklenburg Housing Partnership
- Diane English, Belmont Neighborhood Representative
- Angela Coleman, Villa Heights Neighborhood Representative
- City Staff representatives from Economic Development, Planning, CATS, Real Estate
and Neighborhood Development
Next Steps:
ƒ The initial Proposal Review Committee conducted its first meeting on Thursday, December 15,
2005. The Committee conducted a tour of the apartments and held is second meeting on
Thursday, January 26, 2006. During the meeting the Committee discussed the items that it
would like to see in the RFP, observations from the tour, the need to understand the positive
impact the Mills can have on transit development and opportunities for redevelopment with out
of the box thinking. The final Committee meeting is anticipated for February at which time the
Request for Proposal document will be finalized. The Committee has stated that they want to
make sure that the RFP document gives the best opportunity to; maintain affordable units,
repay City debt, enhance transit development and provide a development that meets the
community needs and the RFP schedule should allow time for the development of such a
document.
ƒ The Request for Proposal document along with a preliminary financial analysis will be presented
to the Housing and Neighborhood Development Committee for review and recommendation to
Council at its March or April meeting.
City Council Housing and Neighborhood Development
Committee
2006 Upcoming Agenda Items
Month
February
March
Agenda Item
Requested Action
ƒ
HTF Strategic Plan
The City Council referred the Action
Plan proposed by the Housing Trust
Fund Advisory Board to the
Committee. The Action Plan addresses
actions to address funding, policy
review, trust fund operations and
advocacy.
ƒ
Review and make
recommendations to Council.
ƒ
Oaklawn-Mixed Use Redevelopment
- The City Council referred the
Oaklawn-Mixed Use Redevelopment
project to the Committee. The
development is a seven acre site
located at the corner of Statesville
Avenue and Oaklawn Road.
2006 Preliminary Quality of Life
Study – In March 2005, the City
Council requested that staff assess the
impact on the study of removing high
crime generator – major Shopping
Centers, High Schools and Middle
Schools. Also, staff will preview other
changes prior to publishing the final
book in July 2006.
ƒ
Review and make
recommendations to Council.
ƒ
Review and make
recommendations to Council.
ƒ
ƒ
Mill Properties – In 2005 and 2006, ƒ
the
City
foreclosed
on
the
Mecklenburg and Johnston Mills in
North Charlotte. The Mecklenburg
Mill Apartments is a 60-unit complex
and the Johnston Mill Apartments is a
90-unit complex. The City invested a
total of $5.7 million for the
rehabilitation of the units for affordable
housing and an additional $600,000 to
take control of the entire development
and protect the City’s investment. Staff
is working with a citizen group to
develop a Request for Proposal for
disposition of the units.
ƒ
Mid-Year Compliance Report
Each year, neighborhood Development
ƒ
Review the RFP and preliminary
financial analysis and
recommendations to Council.
Receive as information
conducts a review of several of its 34
financial partners. The purpose of the
reviews is to ensure board, staff,
financial, regulatory and operational
compliance.
ƒ
Mid-Year Charlotte Neighborhood
Fund Report
The City provides up to $300,000 in
operating support to five local
Community Development
Corporations. This report provides a
mid-year review of how they are
performing relative goals established
for the contract.
ƒ
Receive as information
ƒ
Boarded Up Structures – The City ƒ
Council referred a request from a
neighborhood coalition to undertake a
review of boarded –up structures
Receive as information
April
ƒ
Consolidated Action Plan –
ƒ
Annually, the Council must approve
the City’s use of federal funds for
housing and community
development activities. The City
received Community Development
Block Grant (CDBG), Home
Partnership (HOME), Emergency
Shelter Grant (ESG) and Housing
Opportunities for AIDS/HIV
(HOPWA) funds.
Review and make
recommendation to Council
May
ƒ
Charlotte Neighborhood Fund
Recommendation – Annually, the
City Council makes final
recommendations on goals and
funding for the Community
Development Corporations that
participate in the fund.
ƒ
Review and make
recommendation to Council
Oaklawn Mixed- Use Redevelopment
Housing and Neighborhood Development Committee
February 14, 2006
Committee Action Requested: Review and recommend approval regarding the land sale and
selected master developer for the proposed Oaklawn Mixed Use Redevelopment project.
Policy Framework: Economic Development
Background:
• The Oaklawn-Mixed Use Redevelopment project is a seven acre sight located at the corner of
Statesville Avenue and Oaklawn Road.
•
In trying to accomplish mixed- use development to support the Statesville Road corridor, an
RFP process was approved by the Housing and Neighborhood Development Committee in
July, 2004.
•
The Charlotte Mecklenburg Housing Partnership (CMHP) formed the Seven Acres Partnership
in response to a proposal for redevelopment of the seven acre site. This partnership included
CMHP as the master developer, The Provident Group of the Carolinas as the component retail
developer and The Drakeford Company (TDC) as the master development project manager
and the component residential developer.
•
Due to the likelihood of unsuitable soil conditions, CMHP has withdrawn their interest, and
recommended that The Drakeford Company assume the role of master developer.
•
The City was responsible for the unsuitable soil conditions. The City used the site as a landfill
in the 1980’s, creating the unfavorable site conditions.
•
The Drakeford Company has also agreed to pay the City $330, 620 for the site which will
provide an affordable land cost for the townhouses to sell for $110,000- $145,000. Appraised
land value is $789,500.
•
The retail development will require subsidy. Consequently, the Seven Acres Partnership
included a master developer subsidy of $161,000 for the 1.25 acres dedicated to the retail
portion which matches the value assigned to the retail land.
•
The Drakeford Company has agreed to a proposed participation agreement whereby the City
of Charlotte shall be paid additional compensation in the event that a more intense residential
development and a higher market price than was outlined in the proposal occur.
•
The City will share in site remediation/improvement costs and the installation of an access
road by deducting from the $330,620 purchase offer a shared percentage of costs. This cost
sharing for site remediation is estimated to cost the City up to 50% of the actual cost, but shall
not exceed the $330,620 purchase price of the land.
Attachments:
Additional information will be provided at the meeting.
Housing Trust Fund Strategic Operating Plan
Housing and Neighborhood Development Committee
February 14, 2006
Committee Action Requested:
ƒ Provide a recommendation to City Council on the Housing Trust Fund Strategic Plan.
(Excluding a funding recommendation, which will be considered as part of the City Council’s
FY2007 Budget process)
Policy Framework:
ƒ On November 26, 2001, City Council established a Housing Trust Fund to provide financing
for affordable housing in the Charlotte community.
ƒ On April 8, 2002, City Council established a Housing Trust Fund Advisory Board. The
Advisory Board is charged with: overseeing the Housing Trust Fund, establishing policy and
guidelines, monitoring performance and reporting annually to City Council.
Background:
ƒ Since 2002, City Council through voter approved bonds and other appropriations have
designated $47 million for the Housing Trust Fund.
ƒ To date, 100% of the Housing Trust Fund’s appropriations have been allocated to housing
funding categories and all but $8 million has been awarded to affordable housing developments.
ƒ The results so far have been the financing of 2,300 affordable homes of which 811 have been
completed. The Housing Trust Fund primarily serves families earning an annual income of
$38,500 or less.
Proposed Plan:
ƒ On March 12, 2005 the Housing Trust Fund Advisory Board held its Annual Retreat. The
ƒ
ƒ
ƒ
ƒ
ƒ
focus of the retreat was:
o Long-term future of affordable housing in the City
o Role of the Trust Fund in ensuring an adequate supply of affordable housing in
Charlotte
A Housing Market Study, commissioned by the Housing Trust Fund in 2005, forecasts a need
for 12,530 new affordable rental homes by 2010 for families with annual earnings of less than
$16,000.
Based on the market information and key affordable housing issues, the Housing Trust Fund
drafted the following vision statement:
o Everyone in our community should have the opportunity to have a good place to live and achieve
potential;
o The community should make available a continuum of housing options for its residents that
range from shelter and transitional housing for the homeless and special needs populations, to low
and moderate-income rental homes, and ownership homes;
o The best model for success is building sustainable mixed-income communities
The Housing Trust Fund Advisory Board established a goal of meeting 50% of the 2010
projection over the next ten years, which would require annual capital budget of $76 million.
The Strategic Plan also sets forth strategies and action plans for the Housing Trust Fund
Advisory Board to address: Funding, Housing Policy, Trust Fund Operations and Education and
Outreach initiatives. (See page 4 of the Draft Housing Trust Fund Strategic Plan)
The Housing Trust Fund is seeking City Council endorsement of its vision, goals and action
plan, which expands the scope of its original mission.
Attachment:
Draft Housing Trust Fund Strategic Plan
D
an
ategi c
r
t
S
t
P
f
l
ra
December 8, 2005
City of Charlotte
Housing
Trust
Fund
Strategic Plan
Approved by the Housing Trust Fund Advisory Board
December 8, 2005
<INTENTIONALLY LEFT BLANK>
HOUSING TRUST FUND STRATEGIC PLAN
DECEMBER 2005
TABLE OF CONTENTS
I. BACKGROUND ........................................................................................................................... 1
II. ISSUES ........................................................................................................................................ 2
III. VISION ......................................................................................................................................... 3
IV. GOAL............................................................................................................................................ 3
V. ACTION PLAN ............................................................................................................................. 4
VI. NEXT STEPS............................................................................................................................... 5
VII. Appendix ...................................................................................................................................... 6
Housing Needs Cost Calculation
<INTENTIONALLY LEFT BLANK>
CHARLOTTE HOUSING TRUST FUND STRATEGIC PLAN
I. BACKGROUND
On March 12, 2005, the Housing Trust
Fund Advisory Board held its Annual
Retreat. The focus was on the long-term
future of affordable housing in the City of
Charlotte and the role that the Trust Fund
should play in ensuring that an adequate
supply of affordable housing is available
for the citizens of Charlotte.
The Housing Trust Fund was chartered by
the City Council on February 22, 2002 and
charged with the responsibilities of:
1. Overseeing the City of Charlotte
Housing Trust Fund operations;
2. Recommending to City Council
annual funding priorities for the
Housing Trust Fund;
3. Creating or collaborating with taxexempt entities to solicit private
funds;
4. Monitoring the Housing Trust
Fund performance; and
5. Providing an annual report to City
Council.
The City Council also established goals for
its overall affordable housing program,
which includes the Housing Trust Fund, of
developing 4,500 affordable homes over
five years and maintaining a funding
leverage ratio of 1:5. While the Housing
Trust Fund can serve families making as
much as $51,280 annually (80% of the
area median income), the Council
requested that priority be given to families
earning less than $19,230 annually (30%
of the area median income).
Since the Housing Trust Fund’s inception,
$47 million has been raised to support
funding for affordable homes. $10 million
has come from bonds approved by the
City Council, $35 million from voter
approved bonds in 2002 and 2004, and
$2.1 million in a City land sale dedicated
to the Housing Trust Fund.
As of July 1, 2005, the Housing Trust
Fund had committed $42 million (90%) of
its $47 million allocation. Financial
commitments have been made to 2,300
affordable ownership, rental and special
needs homes. To date, 811 of these
homes have been completed. The
Housing Trust Fund has been a major
contributor to the Council’s five-year
affordable housing goal.
Additionally, almost 60% of the total units
financed have been reserved for families
earning less than $19,230. This effort has
reduced the Housing Trust Fund’s funding
leverage ratio to 1:4.
With this backdrop, the Housing Trust
Fund Advisory Board pondered the future
of affordable housing in Charlotte and the
role that the organization can play in that
future. The Board reviewed demographic
and housing data that will have an impact
on the community over the next five years.
It engaged in a SWOT (Strengths,
Weaknesses, Opportunities and Threats)
Analysis to identify strategic issues that
need to be addressed internally and
externally. The Board then prioritized
issues and identified broad themes and
key strategies. Finally, the Board
identified an action plan to better address
the affordable housing needs in the
community.
The following pages summarize the
outcomes from the Board’s retreat and
subsequent follow-up meetings. Key
elements of the plan include:
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Issues
Vision
Goals
Action Plan
Next Steps
The Board’s overall purpose was to put
forth a strategic plan for community
discussion on funding and developing
affordable homes in the City of Charlotte.
1
CHARLOTTE HOUSING TRUST FUND STRATEGIC PLAN
II. ISSUES
A number of factors impact the City’s ability to provide affordable housing for its citizens. They
include population and employment growth and the ability of the housing delivery systems to
meet the various housing needs. The Housing Trust Fund hired Charles Lesser and Company
to develop a local housing market study. The major outcome from the study was a growing
unmet need of households earning less than $16,000.
Year
2004
2010
Net Unmet Housing Demand for Incomes < $16,000
Rental Homes
Owner Homes
10,178
1,094
12,530
4,831
Total
11,272
17,361
Opportunities
Weaknesses
Strengths
Given this information, the Housing Trust Fund Advisory Board undertook a SWOT Analysis to
identify key issues that need to be addressed. Below is a summary of their findings:
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Threats
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Issue Areas
Board perception
Credibility
Board make up
Commitment and continuity
Board ability to work together and execute decisions effectively
Board willingness to understand varying perspectives
Rapid record of success
City Council’s and voting public high trust in HTF
Low community awareness of HTF and affordable housing needs
City policy of maximum two terms (Impact of Board turnover)
Lack of diversity – no women or other nationalities on the Board
Capacity building – the Board has not prepared others to take advantage of HTF
Lack of attention given to CDCs and small developers
Not being aware or understanding the Charlotte Housing Authority’s (CHA) policy
direction
Inability to make in-roads to transit locations
Better educate community on benefits of affordable housing
HTF processes are open and flexible
Potential for discussion of affordable housing development around new school sites
HTF mandate to bring forward new affordable housing policies
Non-profit housing finance initiative
Appeal to Charlotte community generosity
Results of new market study
Strengthening relationship with CDCs and Homeless Alliance
Creation of relationships with other jurisdictions – sharing information, technical
assistance and capacity building in other communities
Best practices research from other communities – leverage quality models from other
cities
Explore utilizing Charlotte Mecklenburg School sites for affordable housing
Challenges of existing landlords with low occupancy rates – (buy down capital
structure to produce affordable units with lower rates)
The inability to acquire land around transit stop locations
Potential for Board complacency
Inability to impact many units considering the Board’s mixed-income strategy and
focus on 30% or less of the AMI
City Bond shortfalls
Federal budget cuts
NIMBY – particularly as it relates to the Housing Locational Policy
Response of persons benefiting from HTF now resisting others that could benefit from
the program
Impact of CHA’s policies on the affordable housing market
2
CHARLOTTE HOUSING TRUST FUND STRATEGIC PLAN
III. VISION
Considering the Housing Trust Fund’s history, market trends and current issues, the Board put
forth a vision to guide development of its strategic plan. The proposed vision is highlighted
below:
Housing Trust Fund Advisory Board
Vision
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Everyone in our community should have the
opportunity to have a good place to live and achieve
their potential;
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The community should make available a continuum of
housing options for its residents that range from
shelter and transitional housing for the homeless and
special needs populations, to low and moderateincome rental homes, and ownership homes; and
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The best model for success is building sustainable
mixed-income communities.
IV. GOAL
To bring focus to the Board’s vision and drive development of its action plan, the Board
developed an overall goal for the future. The Housing Trust Fund’s goal is:
Housing Trust Fund Advisory Board
Goal
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Address 50% of 2010 projected unmet rental
affordable housing demand over the next ten years.
(Increase housing for families earning less than
$16,000.)
Note: To achieve the above goal would require an investment of $75,809,611 annually in the
Housing Trust Fund for a 10-year period. This assumes a mixed-income housing scenario
where units serving families earning under $16,000 make up 15% of the new development with
an average unit delivery cost of $90,753 and a Housing Trust Fund investment of 20% per unit.
This estimate does not consider the impact of inflation (See appendix for detailed explanation).
3
CHARLOTTE HOUSING TRUST FUND STRATEGIC PLAN
V. ACTION PLAN
The Housing Trust Fund Advisory Board developed four strategic themes – Funding, Policy,
Operations and Education & Advocacy – to drive the development of the action plan. For
each strategic theme, specific strategies were developed with proposed action steps and
timelines. The matrix below details the Housing Trust Fund’s action plan:
4
CHARLOTTE HOUSING TRUST FUND STRATEGIC PLAN
VI. Next Steps
After review and approval by the Housing Trust Fund Advisory Board, this document will be
made available to the City Council and community for review and comment. After comment
and adjustment, this document will drive the major work program of the Housing Trust Fund
over the next several years. The document will help fulfill the Housing Trust Fund’s vision to
provide affordable housing opportunities to citizens of Charlotte and help them to achieve their
potential.
5
APPENDIX
<INTENTIONALLY LEFT BLANK>
HTF Advisory Board
Ten Year
Affordable Housing Goal
Housing Trust Fund Performance To Date
AMI
Units
%
1,357
50%
31% to 60%
943
35%
Market
Rate
411
15%
Totals
2,711
100%
Source
Amounts
%
Credits/Bonds
$58,100,684
42%
HTF
$29,481,095
21%
Other
$49,643,225
36%
$137,225,004
100%
30% and
below
To date the HTF has financed
over 2,300 affordable housing
units of which 1,357 serve
households earning 30% or
less than the area median
income.
The chart illustrates a break
down of the units by income
and funding.
Totals
Special Needs Housing
McCreesh Place
New Construction
Single Room Occupancy — 64 units
HTF - $1,025,542
YWCA
Rehabilitation
Women In Transition
HTF - $320,000
Homeownership
Wilmore Walk Town Homes
23 Affordable Ownership Units
HTF - $274,000
Model Home
HTF - $98,701
2nd House Under Construction
Biddleville Neighborhood
Multi-Family Rental
Riveremere — 100 units
HTF - $2,800,000
Rosedale II - 32 Units
HTF - $500,000
Tyvola Crossing - 80 units
HTF - $800,000
Under Construction
■ Twenty two developments (over 1,500 units)
currently under construction
University Square
■ To date the HTF has funded over 2,300
affordable housing units
■ The total development cost for projects is
over $142 million
Arbor Glen III
Unmet Need
The HTF Advisory Board contracted Charles Lesser and Company
to develop a local housing market study. Study showed a growing
unmet need for households earning less than $16,000.
Net Unmet Housing Demand for Incomes <$16,000
Year
Rental Homes
Ownership
Total
2004
10,178
1,094
11,272
2010
12,530
4,831
17,361
Housing Trust Fund Ten Year Goal
■ Address 50% of the 2010 projected unmet affordable rental
housing demand over the next 10 years, (6,265 new units).
■ Increase housing for families earning less than $16,000.
HTF Project Financing
At right is an illustration of a
typical financing structure for a
HTF funded developments:
AMI
Units
%
30% and
below
20
10%
31% to 60%
80
42%
Market
Rate
92
48%
192
100%
Totals
Riveremere — 100 units
HTF - $2,800,000
Source
Amounts
%
Credits/Bonds
$10,474,173
65%
HTF
$2,800,000
17%
Other
$2,879,855
18%
$16,154,028
100%
Totals
Mixed Income Affordable Housing
Development Strategy
To create mixed income development and develop 6,265 new units serving
30% and below, 41,767 new units need to be developed (15% of 41,767
equates to 6,265).
Housing Development Costs
All Units
30% and Below Only
Total Units = 41,767
Cost per Unit = $90,753
Total Units = 6,265
Cost per Unit = $90,753
Total Development Cost
$3,790,480,551
(41,767 X $90,753/Unit)
Total Development Cost
$568,567,575
(6,265 X $90,753/Unit)
Costs based on HTF project experience and not adjusted for inflation
Housing Trust Fund Investment Mixed
Income Development
Assuming a Housing Trust Fund investment of 20% of the total development
cost, $758,096,110 is needed from the fund to develop 6,265 new units over
ten years for the target income.
$758,096,110
($16,000 and less)
The Total Development
Cost $3,790,480,551
(41,767 X $90,753)
Projected 20% HTF
Investment
(.20 X $3,790,480,551)
Equals $758,096,110
$3,032,384,441
(Greater Than $16,000)
Annual Housing Trust Fund Investment
The required annualHousing Trust Fund investment needed to develop 6,265
new units over ten years serving households earning $16,000 is $75,809,611.
$75,809,611
($16,000 and less)
Results in the
development of 4,177
units of which 626 serve
households earning
$16,000 or less than the
area median income
$303,238,444
(Greater Than $16,000)
Document Prepared for City of Charlotte
Housing Trust Fund Advisory Board by
Neighborhood Development Key Business
December 2005
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