The Community Development Board recommends the City Council hold a public hearing to: Take comments on using Community Development Block Grant (CDBG) funding for future coronavirus impact projects; and approve a 15-year, $450,000 CDBG loan to HAB Development for the Off The Streets project.
 

Application: On September 16, 2021, an Affordable Housing Development Program application was submitted by HAB Development, an instrumentality of the Housing Authority of Billings (also known as HomeFront), requesting $450,000. Funding would be used to replace a poorly functioning boiler system and rehabilitate four rooms that were damaged when the boiler malfunctioned. HAB has a long-term, positive relationship with former projects with the City, with no HUD compliance issues.  HAB also is familiar with HUD funding and the regulatory structure and requirements. The Community Development Board reviewed the application at its regular meeting on October 5, 2021 and toured the facility after the meeting. The Board then met and made its formal recommendation for $450,000 in CDBG funding on October 11, 2021 during a special, advertised meeting. The Board asked the applicant about the operations of the shelter, the occupancy and demand for the facility in the community, and the ability for the contractors to get the work done quickly given the inset of winter weather. The Board also discussed its interest in having a 15-year payback period for the funds. Much of the information provided in this memo and in the attached Community Development Board memo discusses the details of the project and the applicant was agreeable to the 15-year period of payback if the use of the facility changed from providing low income housing services. Staff’s detailed project analysis is included in the attached Community Development Board memo and elements of the project and process are outlined here:

• Project Location and Proximity to Amenities
• Project Management, Developer Qualifications, and Portfolio Assessment
• Beneficiary Involvement
• Market Analysis and Alignment with the City’s Consolidated Plan and Annual Action Plan
• Financial Analysis including Leveraging, Fiscal Health, Procurement, Project Budget, and Previous City Awards

Project Site: Off the Streets is a 40-unit project located at 3311 2^nd Avenue North.  HAB Development purchased the Western Inn Motel property for $1.64 million in October 2020. Half of the units are used as a low-barrier shelter for those experiencing homelessness and the other 20 units are prioritized for pandemic response to provide necessary quarantine and isolation. Availability of isolation units is paramount to lessening the burden on healthcare providers and hospitals in the community. Individuals and families using these units must be referred by a healthcare organization.

Project Utilization and Beneficiaries: Off The Streets provided quarantine / isolation services to 95 unique individuals from October 2020 through August 2021, and the combined stay for these units totals 605 days. The low-barrier shelter served 358 unique individuals from November 2020 through August 2021, and the combined stay for these guests totaled 11,746. Individuals are screened for physical /mental health by qualified health professionals at the Community Crisis Center and diverted to the most appropriate shelter for the evening. No one is allowed to self-present, they can only be referred by the Community Crisis Center.
Funding investments in this project will benefit low-income individuals and families long-term. When isolation units are no longer needed, the project will continue serving low-income, qualifying populations. Housing types include, but are not limited to overnight shelter, interim, short-term transitional, long-term, permanent supportive housing, transitional / bridge housing, et.

The Board recommendation to City Council includes securing the $450,000 via a 15-year trust indenture that requires full repayment if the units are sold or are no longer used for low-income affordable housing during that time period. After the initial 15 years, the Board recommends forgiving the loan and releasing the lien on the property. The applicant is willing to secure the City’s funding award through a trust indenture.

If the Council approves the loan, City staff will amend the FY2021-2022 Annual Action Plan to include the project.

Procedural History
· October 7, 2020: The Western Inn was purchased by HAB Development to be used as a low-barrier shelter.
· October 14, 2020: Neighborhood / stakeholder meeting was held at Tumbleweed.
· October 28 and 30, 2020: Neighborhood meetings were facilitated through Zoom and information on the project was hand-delivered to neighboring properties within a three-block radius.
· Winter 2020: The boiler began leaking and caused significant damage to four units.
· June and July 2020: Two public community meetings were held to gauge the need for continued low-barrier shelter. Many elected officials also attended the meetings. The need for continued low-barrier shelter was evident.
· September 16, 2021: HAB Development submitted an Affordable Housing Development Program application to the City’s Community Development Division requesting $450,000 for heating source replacement and rehabilitation of four units.
· September 22, 2021: Staff sent a memo detailing the project to the Community Development Board.
· October 5, 2021: HAB Development staff will review the project with the Community Development Board during their regular monthly meeting. The Board was also invited to take a tour of the project right after the meeting. A recommendation must be made on this project to prepare documents for City Council.
· October 11, 2021: The Community Development Board held a special, advertised meeting in order to make a funding allocation recommendation to the City Council.
· October 25, 2021: The Billings City Council will review and can take action on a CDBG funding allocation for the Off the Streets project.  
 

• This project serves the most vulnerable populations in Billings: those experiencing homelessness; at-risk of homelessness; low-income individuals and households awaiting COVID-19 test results; and low-income individuals and households needing isolation after a positive coronavirus test result. Most of the individuals and families served by the project have incomes under 30 percent of the area median income.
• Local hospitals and health care providers can make referrals for isolation units. Hospitals are over capacity due to the pandemic and additional isolation options can lessen this burden.
• The Unified Health Command (RiverStone Health, Billings Clinic, St. Vincent Healthcare, and Yellowstone County Disaster and Emergency Services) has also identified the need for shelter and isolation units.
• Several nonprofit organizations are engaged and participating in this project: Community Crisis Center; Family Promise of Yellowstone Valley; Healthcare for the Homeless; The Salvation Army; St. Vincent DePaul; Tumbleweed; RiverStone Health; and United Way of Yellowstone County.

City Council may:

• Approve a 15-year, $450,000 CDBG loan to HAB Development for the Off The Streets shelter project; or,
• Not Approve a 15-year, $450,000 CDBG loan to HAB Development for the Off The Streets shelter project. If the loan is not approved, the shelter will need to determine options for winter operations given the HVAC mechanical issues with the facility's boiler system. 

The Community Development (CD) Board recommends utilizing Community Development Block Grant (CDBG) funding for this project. The Division has recently received many home buyer and repair loan repayments and has approximately $360,000 in CDBG revenue from last fiscal year to allocate. Since July 1, 2021, the Division has received an additional $165,000 in loan repayments that can also be allocated, bringing the total available to $525,000. Over $2.2 million has already been invested in the Off the Streets shelter and the funding request is 20 percent of the total leveraged amount. Allocation of $450,000 in CDBG funds for this project will meet a community need, falls within the CDBG program requirements, and also assist the City in meeting a CDBG funding expenditure deadline of April 2022.
 

An overall review of the application reveals the project is consistent with similar projects the City has funded in the past and is in alignment with the City’s Consolidated Plan. There is a demonstrated need for a safe and warm place for our homeless population to spend the night, as evidenced through data from the City’s recent Consolidated Plan, including the Housing Needs Assessment, Market Analysis and the Analysis of Impediments to Fair Housing Choice. Individuals who utilize one of the low-barrier shelter units must be referred to Off The Streets by the Community Crisis Center. A referral from a local health organization must be provided to utilize one of the twenty units set aside for those needing isolation for COVID-19. The applicant also has extensive experience, both in developing and managing affordable housing projects in Billings, and they are knowledgeable about federal program requirements and compliance. Projects like this are examples of where the City can partner to help multiple service and healthcare organizations in the community to make a tangible difference in impacting homelessness.