Regular 2.
Regular City Council Meeting
- Meeting Date:
- 10/24/2011
- TITLE
- Resolution Granting the City Administrator Signature Authority to Sell Properties Under the Neighborhood Stabilization Program
- PRESENTED BY:
- Candi Beaudry
- Department:
- Planning & Community Services
Presentation:
Information
PROBLEM/ISSUE STATEMENT
City staff requests that the City Council approve the attached resolution granting authority for the City Administrator to sell properties under the Neighborhood Stabilization Program (NSP) to ensure long-term stabilization of the properties.
ALTERNATIVES ANALYZED
The City Council may:
- Approve the resolution granting the City Administrator signature authority to sell properties under the NSP to ensure long-term stabilization of properties.
- Do not approve the resolution granting the City Administrator signature authority to sell the properties. If the City Administrator is not granted this authority, the City Council will need to approve each sales transaction as it occurs and authorize the Mayor to sign the required documents.
FINANCIAL IMPACT
The Community Development Division applied for and received over $569,000 to purchase three properties and pay for needed rehabilitation. Proceeds from the sale of NSP properties will be retained to fund future NSP projects.
The City is paying approximately $250 per month on each of the three properties. This includes utilities, periodic property taxes, insurance, and maintenance expenses. Not selling the properties will continue to deplete available funds, thus reducing the City's ability to effectively perpetuate the NSP program into the future.
The City is paying approximately $250 per month on each of the three properties. This includes utilities, periodic property taxes, insurance, and maintenance expenses. Not selling the properties will continue to deplete available funds, thus reducing the City's ability to effectively perpetuate the NSP program into the future.
BACKGROUND
The City of Billings secured over $569,000 in funding through the Montana Department of Commerce (MDOC) Neighborhood Stabilization Program (NSP). Funding for the program was made available through the Housing and Economic Recovery Act of 2008 and must be used to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within communities.
The Community Development Division has acquired three vacant, foreclosed properties to date. Rehabilitation work to bring the units into compliance with applicable rehabilitation laws, codes and other requirements relating to housing safety, quality, and habitability is now complete. The rehabilitation work focused on preservation, improving energy efficiency or conservation, or providing renewable energy source(s). The City strategically incorporated modern green building and energy efficiency improvements to provide for long-term affordability and increased sustainability and attractiveness of the housing and neighborhoods. All properties were purchased at minimum discount from either the U.S. Department of Housing and Urban Development or a financial institution. All NSP housing must be used as the primary residence for purchasers. The final sales price will be no greater than the initial acquisition and rehabilitation costs or appraised value, as per federal mandate.
HUD rules preempt City Code 22-902, Sale, Disposal, or lease of City Property. Therefore, there will be public notice of the sale, but notification will not be mailed to adjacent property owners and there would be no City Council public hearing.
As specified in the City’s NSP plan, prospective, pre-qualified households are being screened for purchase through a grantor-approved (MDOC) process via the First Time Homebuyer program. At least one of the homes must be purchased by a household with income less than 50% of the Area Median Income (AMI) and be pre-qualified for a loan that does not exceed 30% of their adjusted gross income. The City will be offering the properties for sale to pre-qualified households based on the completed application date (first-come-first served). Sales price must be based on the current appraised value, or the cost of acquisition in addition to rehabilitation, whichever total is lower. The three houses have been appraised as follows.
1039 Custer Ave $151,000
1128 Lynn Ave $132,000
3701 Cambridge $142,000
Staff does not anticipate the sale price of any NSP houses will exceed $160,000. Because of the above stringent NSP policies and procedures outlined above, granting the City Administrator authority to sell NSP properties will simplify and speed up the sale process, which will in turn more quickly place the properties back on the tax rolls and reduce the City's monthly insurance, utility and maintenance expenditures.
The Community Development Division has acquired three vacant, foreclosed properties to date. Rehabilitation work to bring the units into compliance with applicable rehabilitation laws, codes and other requirements relating to housing safety, quality, and habitability is now complete. The rehabilitation work focused on preservation, improving energy efficiency or conservation, or providing renewable energy source(s). The City strategically incorporated modern green building and energy efficiency improvements to provide for long-term affordability and increased sustainability and attractiveness of the housing and neighborhoods. All properties were purchased at minimum discount from either the U.S. Department of Housing and Urban Development or a financial institution. All NSP housing must be used as the primary residence for purchasers. The final sales price will be no greater than the initial acquisition and rehabilitation costs or appraised value, as per federal mandate.
HUD rules preempt City Code 22-902, Sale, Disposal, or lease of City Property. Therefore, there will be public notice of the sale, but notification will not be mailed to adjacent property owners and there would be no City Council public hearing.
As specified in the City’s NSP plan, prospective, pre-qualified households are being screened for purchase through a grantor-approved (MDOC) process via the First Time Homebuyer program. At least one of the homes must be purchased by a household with income less than 50% of the Area Median Income (AMI) and be pre-qualified for a loan that does not exceed 30% of their adjusted gross income. The City will be offering the properties for sale to pre-qualified households based on the completed application date (first-come-first served). Sales price must be based on the current appraised value, or the cost of acquisition in addition to rehabilitation, whichever total is lower. The three houses have been appraised as follows.
1039 Custer Ave $151,000
1128 Lynn Ave $132,000
3701 Cambridge $142,000
Staff does not anticipate the sale price of any NSP houses will exceed $160,000. Because of the above stringent NSP policies and procedures outlined above, granting the City Administrator authority to sell NSP properties will simplify and speed up the sale process, which will in turn more quickly place the properties back on the tax rolls and reduce the City's monthly insurance, utility and maintenance expenditures.
CONSISTENCY WITH ADOPTED POLICIES OR PLANS
The City Council previously approved the following:
- Substantial Amendment to the 2008-2009 Consolidated Plan
- Neighborhood Stabilization Program