Charlotte City Council Housing and Neighborhood Development Committee Summary Meeting Minutes March 21, 2007 COMMITTEE AGENDA TOPICS I. Foreclosures & Predatory Lending – Council Priority (Attachment A) II. Neighborhood Councils (Attachment B) COMMITTEE INFORMATION Council Members Present: Michael D. Barnes, Susan Burgess, Anthony Foxx, Don Lochman, and Pat Mumford Council Members Absent: None Staff Resource: Julie Burch, Assistant City Manager Staff: Stanley Watkins, Neighborhood Development Richard Woodcock, Neighborhood Development Stephanie Small, Neighborhood Development Cynthia Woods, Neighborhood Development Pamela Lopez, Neighborhood Development Debra Campbell, Planning Meeting Duration: 1: 45 p.m. – 3:00 p.m. ATTACHMENTS 1. Agenda Packet – March 21, 2007 Housing and Neighborhood Development Committee Meeting Summary for March 21, 2007 Page 2 DISCUSSION HIGHLIGHTS I. Foreclosure and Predatory Lending Richard Woodcock gave a brief overview of the information on foreclosures that was presented at the March 7, 2007 Housing and Neighborhood Development Committee meeting. Mr. Woodcock noted a 27 percent state wide increase in foreclosure rates over the last five years, and a 62 percent increase in Mecklenburg County. He added that the actual number of foreclosures in Charlotte jumped from 1,810 in 2005 to 2,245 in 2006. Richard Woodcock explained that pre-ownership counseling is required by City sponsored homeowner programs and the City provides $210,000 annually to help provide homeownership, education and counseling services. He added that the City provides $170,000 annually to help provide post-ownership counseling. Mr. Woodcock also provided updated information on the role of the federal government in foreclosures, noting that the FDIC monitors and regulates banks and savings associations and the Federal Housing Administration (FHA) provides loans and mortgage insurance programs. He explained that Senator Dodd, United States Senate, has held Banking Committee hearings on foreclosures, but there is concern that federal legislation may preempt stricter state laws. Committee member Mumford questioned how the HousingCharlotte program operates. Stanley Watkins answered that through the HouseCharlotte program, federal and local funds are used to provide down payment, closing cost and interest rate buy-down assistance to low and moderate income families, in the form of a deferred loan. Mr. Watkins noted that the City has requested its banking partners to be notified when a client with a HouseCharlotte loan goes into default, but due to privacy concerns, such information cannot be released. Committee member Burgess suggested to the Committee that the request for notification be placed on the legislative agenda because the City has a financial stake in the households and the goal is to prevent such loans from going into default. Committee member Foxx asked if there were breakdowns for foreclosure rates based on race or income, in order to identify whether a disproportionate number of minority groups were being steered toward adjustable rate mortgages as opposed to fixed rate loans? Stanley Watkins responded that a disparity study is proposed as a recommendation set forth in the Analysis of Impediments to Fair Housing Study, which will be discussed at the April 2, 2007 Council workshop. Committee member Lochman stated that pre-ownership counseling, rather than postownership counseling is needed. Committee member Mumford asked how the City gauges the Housing and Neighborhood Development Committee Meeting Summary for March 21, 2007 Page 3 return on investment for the annual expenditure of $170,000 in post-ownership counseling? Mr. Woodcock answered that the number of clients serviced is counted but we do not have statistics on how many may have lost their homes. Stanley Watkins added that, through the HouseCharlotte pre-ownership counseling program, a record of accounts receivable is maintained and inspections of the homes are done through the life of the loan. Postcounseling services are open to anyone; not limited to persons who reside in a City sponsored affordable housing property. Stanley Watkins responded that staff would research to determine the number of foreclosures for clients that used the HouseCharlotte program or post counseling program. Committee member Burgess mentioned recent initiatives in Boston and Chicago that have been successful in addressing foreclosure rates. Ms. Burgess suggested that staff research models that have been used by other cities to address problems with foreclosures and determine what should be included in the local legislative agenda. Committee member Barnes requested a comparison analysis to show where the high instances of foreclosure exist in the City, in an effort to provide solutions such as neighborhood improvements, code enforcement services, additional public safety action that can be implemented now to help slow down the decline of such neighborhoods. Ms. Burgess suggested a comparison of neighborhoods in the same price ranges that don’t have foreclosure problems to determine the factors that contribute to the problem. II. Neighborhood Councils Stephanie Small explained that a neighborhood council is a group of citizens representing several neighborhoods working on common issues and concerns who offer advice to local government decision makers on neighborhood related policy issues. Ms. Small presented examples of neighborhood councils from across the country and local neighborhood coalitions and provided information on the roles, services provided, structure and operation of the various councils. She stated that the main issues to consider when establishing a neighborhood council are the role of the council, provisions for funding and staff support and the basis by which councils will be formed. Committee member Lochman asked how neighborhood councils differ from neighborhood associations? Ms. Small responded that neighborhood councils may receive funding and may register with the state as a non-profit group. Committee member Mumford stated that the City Council is charged with making decisions that are for the good of the entire community, not just a specific district or area. Mr. Mumford stated that there is no need to duplicate existing efforts or replicate services Housing and Neighborhood Development Committee Meeting Summary for March 21, 2007 Page 4 that staff already provides. He expressed concern that the establishment of neighborhood councils may create false expectations that the representatives are unable to fulfill. Committee member Burgess requested that staff solicit feedback on interest in neighborhood councils from attendees at the upcoming Neighborhood Symposium and report back to the Committee on the response. Other Business: Committee member Burgess reminded the Committee of the upcoming Neighborhood Symposium on March 31, 2007. The meeting was adjourned at 3:00 p.m. City Council Housing and Neighborhood Development Committee Meeting Wednesday, March 21, 2007 – 1:30 p.m. Charlotte-Mecklenburg Government Center – Rooms 270/271 Committee Members: Susan Burgess, Chair Anthony Foxx, Vice-Chair Michael Barnes Don Lochman Pat Mumford Staff Resource: Julie Burch, Assistant City Manager ____ ___ AGENDA I. Foreclosures & Predatory Lending – Council Priority (Attachment A) II. Neighborhood Councils (Attachment B) Note: Attached is March 7, 2007 Follow Up Report (Attachment C) _______________ Distribution: Mayor/Council Pam Syfert, City Manager City Leadership Team Corporate Communications Debra Campbell – Planning Department Anna Schleunes- City Attorney’s Office Saskia Thompson- Manager’s Office CDC Executive Directors Housing Trust Fund Advisory Board Neighborhood Leaders Budget Office Ruffin Hall Phyllis Heath Lisa Schumacher Charlotte Housing Authority Charles Woodyard Troy White Charlotte-Mecklenburg Housing Partnership Pat Garrett Charlotte-Mecklenburg Police Department Chief Darrel Stephens Gerald Sennett Neighborhood Development Stanley Watkins Richard Woodcock Stan Wilson Stephanie Small Walter Abernethy Pat Mason A Way Home Chris Wolf Keith Wilson Attachment A Foreclosures – City Council Priority Issue Housing and Neighborhood Development Committee March 21, 2007 Committee Action Requested: Review information on home foreclosures in Charlotte and the roles of the State of North Carolina and the City of Charlotte in the possible reduction of the foreclosure rate. Consider staff recommendation and provide direction on possible next steps. Background: City Council determined that the growing number of home foreclosures was a Council Priority for review in FY07. Foreclosures are legal proceedings whereby a bank or other secured creditor repossesses real property due to the failure of the borrower to comply with the mortgage or deed of trust. Foreclosure rates have grown steadily over the past five years across North Carolina. Mecklenburg County rates are higher than state wide averages. Description: Over the past two years foreclosures, as listed in Mecklenburg County’s property tax records, have totaled 1,810 and 2,245 in 2005 and 2006 respectively. High concentrations of foreclosures impact neighborhoods, as vacant houses invite vagrants and vandalism, foreclosed dwellings often become rentals, and area property values may rapidly decrease. Foreclosures occur for a number of reasons that involve reduced income of the borrower. According to United Family Services, 65 percent of delinquency problems are work related or due to job loss. Federal Role: Senator Dodd, Chairman of the Senate Banking Committee, is holding hearings on the surge in home foreclosures and questionable lending practices. There has been concern that federal legislation may preempt state laws that may be more restrictive. Information searches have not turned up any bills on foreclosure or predatory lending that have been introduced at this time. State’s Role: The North Carolina Commissioner of Banks has identified problems with the lending industry and subprime lending as a major part of the problem. The role of the State is to regulate lenders and pass laws protecting the rights of lenders and borrowers. The NC Commissioner of Banks recommends public disclosure of high foreclosure lenders and more effective counseling requirements. City’s Role: The City’s role in reducing the rate of foreclosures is to support consumer education, housing counseling services, (including a proposed expansion of post-ownership counseling) and legislative efforts to regulate lending Attachment A The City has a contract with Community Link to provide pre-ownership counseling and a contract with United Family Services to provide post-ownership counseling. Next Steps: Continue support for housing counseling programs and request an additional Housing Counselor as an FY-08 request. Support State legislative efforts to regulate lending institutions. Attachment B Report on Neighborhood Councils Housing and Neighborhood Development Committee March 21, 2007 Committee Action Requested: Provide direction to staff concerning Neighborhood Councils. What is a Neighborhood Council? A neighborhood council is a group of citizens representing several neighborhoods working on common issues and concerns. In some cities, the neighborhood councils have informal roles and, in others, very formal roles. They focus on service delivery, zoning and development, growth management and other neighborhood related issues. They may be independent, citizen organizations or government supported organizations serving as a connecting link between neighborhoods and the elected and appointed officials on neighborhood issues. How are Neighborhood Councils Organized? Some local governments establish Neighborhood Councils through a process of adopting an ordinance and the duties and/or partnership details are declared by way of resolution. A council area may be formed around the whole city or distinct geographies or boundaries within the city. For example, in the City of Tacoma, WA the Neighborhood Council areas are defined by the existing planning service area boundaries. In most cases, neighborhood councils represent all stakeholders within the specified Council boundary. Stakeholders are defined as those who live, work, or own property in the neighborhoods within the specified boundary. In some government structures, where neighborhoods are formally recognized by way of a registration process, councils are formed with members from neighborhood organizations who formally register with the City’s Planning Department or Neighborhood Services office. In this case, each neighborhood organization elects one active member to serve on the council. How do Neighborhood Councils Operate? While the neighborhood councils have no formal powers, they offer advice to local government decision makers who use their advice for neighborhood related policy decisions. Many cities provide financial and staff support to the councils. However, because each neighborhood council is independent, members of each council decide their own specific mission and activities. In some instances, the councils are registered with the State as a non-profit group, which allows them to obtain additional funding sources like grants to perform community development projects. Examples of Neighborhood Councils: The City of Charlotte has some independent, citizen neighborhood councils. Examples are the Charlotte East Community Partners and the West Boulevard Coalition. 1 Attachment B The Charlotte East Community Partners (CECP) is established to promote the interests, economic well being and to address the housing and human services needs of the Charlotte East Community. The CECP meets monthly and is managed by its Board of Directors. The board of directors is comprised of 15 persons representing east area neighborhoods, multifamily dwellings and businesses. Some of the neighborhoods represented are Winterfield, Windsor Park and Shannon Park. Officers of the CECP consist of a President, Vice President, Secretary and Treasurer. Officers are elected by the Board of Directors and serve a one year term. The CECP provides input on issues like City rezoning cases, transit and housing. The West Boulevard Coalition (Coalition) is established to promote unity by creating a safe, clean, drug free environment. The Coalition meets monthly and is managed by its Board of Directors. The Coalition is an informal organization comprised of board members from several Westside neighborhoods. Some of the neighborhoods represented included Arbor Glen, Barringer Woods, Clanton Park and Ponderosa. The Coalition works closely with faith based and non-profit organizations. Their primary focus is on schools and landlord/tenant issues. More specifically, they are focusing on dropout rates, low performing schools, low test scores, and code enforcement. One of their most recent accomplishments included the new Stratford YMCA. The Coalition is currently in the process of obtaining its 501C(3) status. See the attached table, which provides a brief snap shot of neighborhood councils from the following Cities: 1. Durham, NC 2. Raleigh, NC 3. Columbia, SC 4. Rock Hill, SC 5. Reno, NV 6. Tacoma, WA Considerations for Establishing Neighborhood Councils: What role(s) should Neighborhood Councils hold? – Advisory role – Formal role Will City funding be provided? Will City staff support be provided? What is the basis by which Neighborhood Councils will be formed? – Council Districts – Distinct Geographies – Planning District boundaries 2 Attachment B Examples of Neighborhood Councils from Other Cities Durham, North Carolina - David Harris, President harrisdl2003@yahoo.com • The City of Durham’s Inter Neighborhood Council is an independent, non-profit organization that does not receive financial or staff support from the City. • The Council is made up of representatives from neighborhood organizations throughout Durham’s City and County. Each neighborhood is entitled to send one representative and one alternate to serve on the council and must pay an annual membership fee. • The council’s responsibilities include: 1. Advising both the City and County on policy issues which affect neighborhoods. 2. Research and inform its members of issues affecting residential neighborhoods. 3. Making recommendations to the City Council and Board of County Commissioners on appointments to boards such as the Board of Adjustments, Planning Commission, Environmental Affairs Board, etc. 4. Fostering cooperation among existing neighborhood organizations and encouraging the establishment of neighborhood organizations where none exist. Raleigh, North Carolina - Hardy Watkins, Community Services Director (919) 831-6100 • There are 18 geographically located Citizen’s Advisory Council’s (CAC) within the City. • The function of the CACs is to serve as a formal vehicle for citizens to give input on issues of interest, which affect their community/neighborhood to the City's decision-makers. • The Councils meet monthly and are responsible for reviewing presentations regarding neighborhood policy items from various City departments and advise the City on issues that impact their community/neighborhood. • The CACs are the only advisory bodies of the City Council whose membership is strictly voluntary. The number of members varies from council to council. • The Community Services Department offers staff support and programming to each council. Columbia, South Carolina – Roland Smallwood, Community Liaison (803) 545-3381 • The Columbia Council of Neighborhoods (CCN) is an umbrella organization made up of the various recognized and approved neighborhood associations of the City. • The Council’s primary purpose is to promote communication and cooperation between organizations, foster a sense of community and assist each other by providing a forum where member organizations can bring specific concerns for discussion, receive reliable information and support for legitimate causes. • The Council provides a connecting link between neighborhoods and the elected and appointed officials and units of local government that it advises on issues of neighborhood concern. • The Council meets monthly and receives presentations from various local and state agencies and City and County departments and provides advice to City Council and School Board, on neighborhood issues. • The Council has an indirect impact on the allocation of CDBG funding and the General Fund through a citizen’s survey. • Approximately $50,000 is allocated to the Council each year for program and administrative services. 3 Attachment B Examples of Neighborhood Councils from Other Cities (Continued) Rock Hill, South Carolina – Terry Windell, Neighborhood Coordinator (803) 326-3877 • The Council of Neighborhoods has been in existence for about seven years. It was organized as a result of several neighborhoods having common issues (ex: storm water and infrastructure). • The Council acts in an advisory capacity to the City Council, City and County Departments and other local agencies on neighborhood related issues. • The Council meets monthly and receives presentations from various agencies and City departments (i.e. Planning & Zoning, Code Enforcement) and provides advice on neighborhood issues. • The Council is a 35 member group with an executive team comprised of a President, Vice President, Secretary and Treasurer. Members can be appointed to the Council by their home owners or neighborhood associations. The Council is also assigned a City staff person to act as a liaison between the City and the Council of Neighborhoods. • Approximately $4,000 is allocated to the Council of Neighborhoods each year. Funds are used to cover printing and postage costs and are also used to send at least two representatives to the annual NEUSA Conference. Reno, Nevada – Charles Goode, Director, Community Relations Division (775) 321-8318 • The City of Reno has eight Neighborhood Advisory Boards (NAB) – nine members serve on each board. • NABs advise the City Council on policies that affect neighborhoods throughout the community. • The Boards meet monthly and receive presentations from various city departments (i.e. Planning & Zoning, Code Enforcement) and advise the City on issues that affect neighborhoods. • The boards are also responsible for awarding annual neighborhood improvement grants to neighborhood-based organizations through the City’s Community Pride Grant Program - $50,000 per board. • Council allocates approximately $19,000 for administrative services to the NABs each fiscal year. • The boards are open to residents who live within a neighborhood in the NAB boundary. • Members are a group of volunteers who are appointed by the City Council for three-year terms. Tacoma, Washington – Elton Gatewood, Neighborhood Council Coordinator (253) 591-5229 • The City of Tacoma has eight Neighborhood Councils. The councils are open to all residents within each council boundary. The number of members varies from council to council. Members are elected to one year terms in November. • The councils are independent, non-profit organizations who are responsible for 1) advising the City on neighborhood issues; and 2) awarding annual neighborhood improvement grants to neighborhood organizations through the Innovative Grant program - $20,000 per council. • Also, each council is allocated $5,000 per year for personal services contracts to cover the cost of administrative needs and $10,458 for daily activities. • In addition to providing financial support, the City Manager assigns an intern to each council to serve as liaisons between the councils and the City. 4 Attachment C Follow Up Report Housing and Neighborhood Development Committee March 21, 2007 The following items are requests for information that resulted from the March 7, 2007 H&ND Committee Meeting: 1. Committee Request: Provide statistics relating to Chris Wolf’s comment that CharlotteMecklenburg has one of the highest percentages of socio-economic disparity in the nation. Result: Chris Wolf will provide additional information on this matter. 2. Committee Request: Provide report on study that is designed to look at the relationship of CDC’s to the City and possible restructuring. Result: City Council directed staff to prepare a report on the business methods of CDC’s. Staff hired a consultant to prepare the report, which will be completed in mid April. Staff will schedule a presentation to the City Council. 3. Committee Request: Look into feasibility and legality of adding a provision on the property tax bills to allow voluntary contributions. Result: Legal staff is researching and will provide follow up information. 4. Committee Request: Research the potential costs associated with homelessness due to reliance and dependence on other publicly-funded systems, such as emergency medical care, judicial and correctional services, chemical dependency treatment and foster care services. Result: Staff will draft a preliminary report on the feasibility of generating such a report. 5. Committee Request: Provide information on federal regulations pertaining to foreclosure and predatory lending. Result: Senator Dodd, Chairman of the Senate Banking Committee, is holding hearings on the surge in home foreclosures and questionable lending practices. There has been concern that federal legislation may preempt state laws that may be more 1 Attachment C restrictive. Information searches have not turned up any bills on foreclosure or predatory lending that have been introduced at this time. 6. Committee Request: Provide information on the status of the Brookhill Village project, located on South Tryon Street. Result: Brookhill Village is an existing privately owned development comprised of approximately 400 units that is currently for sale. Skeet Harris is the broker. There is a 100 year lease on the property. Mr. Harris consulted the Planning Department about appropriate uses for the site prior to placing it on the market. There is some concern amongst staff and some Council members about the elimination of this much privately owned affordable housing. While there is nothing requiring affordable housing be a part of the redevelopment of the site, Mr. Harris is aware that this is a priority and is looking for buyers to be sensitive. 2