On June 28, 2010, the City Council approved a pre-development loan and legal agreement between the City of Billings and homeWORD, the City's only certified Community Housing Development Organization (CHDO), to undertake affordable housing development activities. This agreement solidified the City's compliance with the U.S. Department of Housing and Urban Development (HUD) regulations to allocate a minimum of 15% of the City's total HOME Investment Partnerships Program (HOME) funding to a CHDO for a number of years into the future. 

Staff required homeWORD to identify properties for the project outlined in the 2010 agreement in order to complete a Development Agreement to bring to City Council for approval by June 2011. The intent of this deadline is to keep the project moving forward to meet HUD expenditure deadlines. City staff is also required to complete environmental review processes prior to Development Agreement execution. In response, homeWORD has identified properties located at 1617 1st Avenue North, 202 & 203 North 17th for acquisition to build a multi-family housing complex for low income households in the future. In the event these properties are not acquired and / or are found unfeasible for the project following further review, homeWORD has identified 10 South 26th and 2604, 2606, 2608 Minnesota Avenue as possible alternative locations. City staff has completed environmental review processes for all of these properties. 

If these properties are found to be unsuitable in the future, staff will complete an environmental review on the final property and submit a Development Agreement modification to City Council for approval.

Properties would have to be voluntarily sold to homeWORD as the organization cannot utilize eminent domain for property acquisition. Further, homeWORD is required to conform to the Uniform Relocation Act to ensure relocation assistance is provided for tenants and / or businesses occupying subject properties.  

(1) To approve the development agreement with homeWORD for an affordable housing project; (2) To not approve the development agreement with homeWORD and return allocated project funding to HUD.

The City of Billings is required to support CHDO's with a minimum of 15% of its HOME allocation. The June 2010 agreement allocated $25,000 in HOME Investment Partnership Program funding for a pre-development loan and an additional $434,000 in HOME funding for an affordable housing project. There is no additional financial commitment identified in the current Development Agreement under consideration today.

Staff recommends that Council approve the CHDO development agreement with homeWORD for an affordable housing project in Billings.