Loading...
HomeMy WebLinkAboutRDA HSG REHAB REPORT 02-21-95DATE: FEBRUARY 21, 1995 .,'j" C,' Inter-Com RDA NO. 4 2-21-95 TO: -WILLIAM A. HUSTON, EXECUTIVE DIRECTOR FROM: COMMUNITY DEVELOPMENT DEPARTMENT SUBJEC~ HOUSING REHABILITATION AND CODE ENFORCEMENT STATUS REPORT RECOMMENDATION It is recommended the Redevelopment Agency authorize staff to modify the requirements of the Housing Rehabilitation Program in the following areas: le Eliminate the requirement that individual tenants of rental properties not spend more than 30% of their gross income towards housing costs. · Increase the grant funds available to the single family and rental property owners to provide for mandatory painting of buildings. · Expand the boundaries of the rental loan program to make them consistent with the single family loan program and the residential grant program. · Affirm the modifications to the processing schedule for property owners under code enforcement. FISCAL IMPACT The proposed changes will increase participation in the Agency,s housing rehabilitation programs. Adequate funds have already been included in the 1994-95 Agency budget for expenditures of the housing set-aside funds in the South Central Redevelopment Project Area. No additional allocation of funds are required. BACKGROUND 1. Housinq Rehabilitation Program The Redevelopment Agency currently provides a residential rehabilitation program in portions of the South Central Redevelopment Project Area and in other areas of the Southwest neighborhood which are outside of the Redevelopment Project Area. These programs are funded by the tax increment the Agency is required to set-aside to maintain, improve and expand the City's William A. Huston Housing Rehabilitation Program Modifications February 21, 1995 Page 2 low to moderate income housing stock. The existing programs are: Single Family Residential Deferred Payment Loan This program is available to owner-occupied single family properties and provides loans up to 100%, 75% or 50% of the cost of improvements, to a maximum of $10,000. The level of assistance depends on the property owners income. Repayment of the loan is not required until the property is sold or title is transferred. Residential Grant Program The grant program is available to owners of both single family and rental properties. The maximum grant is $3,000 per property and is intended primarily for minor outside improvements. The Agency, on December 5, 1994, expanded the grant program to include a $1,000 grant to cover mandatory installation of security lighting of properties. Rental Loan Program This program is available to owners of rental property. It provides a maximum deferred loan of $3,000 per unit, not to exceed $25,000 per property. Repayment of the loan is not required until the property is sold or title is transferred. Currently there are different target areas for the programs, with a very limited target area for the Rental Loan Program. The target areas are shown on the map in Attachment A. The Program has been well received in the southwest neighborhood, and has funded more than $220,000 in housing rehabilitation activity in the southwest neighborhood since the inception of the program in 1993. The number of projects completed include: 15 Single Family Grants 2 Single Family Loans 26 Rental Grants 7 Rental Loans The map in Attachment A also shows which properties have been assisted to date. Attachment B shows the monthly expenditures of William A. Huston Housing Rehabilitation Program Modifications February 21, 1995 Page 3 the program since inception. Please note the month of January, 1995, was the second highest month for program expenditures since initiation of the Housing Rehabilitation Program. 2. Code Enforcement In the past few months, Staff has significantly strengthened the City's code enforcement program to provide for more intensive and proactive inspections. New procedures include: During office hours, telephone code enforcement complaints will be received by Community Development Department staff. All such complaints will be responded to with an inspection within 72 hours. Complaints made during non-business hours will continue to be received by the Department's voice mail system and recorded the following working day. Property owners/managers with violations in the southwest neighborhood will be given only one notice of ten days to respond. If the response is inadequate or absent, staff will immediately issue a citation. Citations can be issued each day that the violation continues to exist. Property owners/managers elsewhere in the City will be given a maximum of two, 10 day notices to comply, unless there is a health and safety issue. In these cases, there will be only one notice and immediate compliance may be required. If adequate response and elimination of a violation does not occur within the defined correction period, staff will immediately issue a citation or transfer a criminal or civil complaint to the City Attorney's office. In both cases described above, some additional time may be granted before citation occurs if the owner/manager has made a substantial effort toward compliance or if the violation is extensive or difficult to correct (e.g.; building needs, a new roof, etc.). When cases occur where an owner/manager has allowed a violation to repeatedly reoccur (overflowing trash receptacles, parking on a front lawn, etc.), no more than a 72 hour notice will be given before citation occurs. It is our intent to eliminate repeat offenders. William A. Huston Housing Rehabilitation Program Modifications February21, 1995 Page 4 Staff trained in the issuance of citations have been assigned to issue citations where a property owner can be contacted. City Attorney services will be needed to file criminal or civil complaints where the citation process is ineffective. To encourage a more rapid, response by owners seeking to utilize the City's Housing Rehabilitation Grant and Loan Program in funding code enforcement corrections, participants will be granted only 30 days in which to fully complete the required application forms before formal code enforcement procedures follow. Failure to meet that requirement will result in immediate citation or filing criminal or civil complaints. Property owners which have utilized the City's Housing Rehabilitation assistance in the past but have not maintained their property or have violated any of the conditions related to their grant or loan agreement may be cited, required to pay back any monies provided by the City (as stipulated in Loan Agreements), or both. The strengthening of the code enforcement process in the southwest neighborhood also includes inspection "sweeps'.' of all properties in focused neighborhoods. Since January 1st, there have been three general sweeps, resulting in violation notices being issued to twenty-three property owners. These sweeps have included representatives of the code enforcement, planning, building and housing rehabilitation programs. The Police Department will also be involved in the sweeps. On January 1, 1995, there were 100 open code enforcement cases, some representing multiple violations at the same address. The new code enforcement procedures have had the following results: ·- 45 new cases have been opened · 61 cases have been resolved and closed. 10 cases are currenfly recommended by the City Attorney for prosecution. Willia~n A. Huston Housing Rehabilitation Program Modifications February 21, 1995 Page 5 35 properties in the southwest neighborhood have been inspected during the sweeps and sent violation notices. · 84 cases are currently open. HOUSING REHABILITATION PROGRAM MODIFICATION In addition to its general activity, the Housing Rehabilitation Program'has always worked close with the Code Enforcement Program in order to provide the "carrot" to encourage compliance by the property owners who have received violation notices..Even with property owners who voluntarily participate in the Housing Rehabilitation Program, improvements to eliminate code violations are the first which are funded on each property. With the strengthening of the Code Enforcement Program, the Agency staff has reviewed the Housing Rehabilitation Program so that it too reflects the Council's policy to strengthen the City's programs in the Southwest Neighborhood. As a result of this review, staff is recommending the following changes to the housing rehabilitation program: I · Modification to Tenant Income Requirements Currently, the rental loan program requires that tenants in rental properties can not pay more than 30% of their gross income towards housing costs. This has been a major disincentive to owners of rental properties. Many tenants will not provide information showing all of their income and too often, those which do show their total income, are paying more than 30% of their income towards rent. When this has occurred, the only option for rental property owners who want to receive a rental loan is to reduce the rents. Property owners, understandably, reject this option and decide not to make more extensive improvements. Staff has requested and received a City Attorney's opinion concerning the requirements of State Redevelopment Law concerning this issue. This opinion states that the Agency is subject only to a determination that the tenants are low to moderate income households or very low to low income households. The City Attorney states the Agency does NOT have to ensure that the housing payments of individual tenants do not exceed the 30% benchmark. William A. Huston Housing Rehabilitation Program Modifications February 21, 1995 Page 6 By eliminating this requirement, the staff expects a substantial increase in the number of property owners who will take advantage of the rental loan program. If the Agency approves this change, the Staff will notify previous participants in the grant program so that they can now participate in the loan program and make more extensive improvements. · paint Grant Program The Housing Rehabilitation Program currently does not require buildings to be painted when they are rehabilitated. While many property owners do paint their properties, many do not because they need the money for other improvements. However, it is painting the buildings which provides the most positive visual impact of neighborhood improvement, even though the more important improvements may be the structural and propertY maintenance improvements. Therefore, in order to ensure that the visual impact of the improvement be as forceful as possible, and to ensure that the neighborhood reflects the positive changes being made, we recommend that the rehabilitation grant program be expanded to require, when needed, painting of all participating properties and to provide up to an additional $3,000 (based on bids) for properties with two or more units and up to an additional $1,500 (again based on bids) for single family properties. This will provide a total possible grant to rental properties of $7,000, including $3,000 for general improvements, $1,000 for mandatory security lighting and $3,000 for mandatory painting. The total possible grant for a single family property will be $5,500, including $3,000 for general improvements, $1,000 for mandatory security lighting and $1,500 for mandatory painting. At the time the Agency added the security lighting grant, the Staff adopted a process ~or previous participants to allow . them to easily participate in the security lighting grant program. Staff is notifying them that a simple addendum to their existing agreement is all that is needed. If the Agency adopts this paint program, staff will use a similar process to make it as easy as possible for previous participants to obtain the paint grant. William A. Huston Housing Rehabilitation Program Modifications February 21, 1995 Page ? 3. Rental Rehabilitation Program Boundaries The current target area to provide loans to rental property owners is significantly smaller than the area 'for single family owners. With the increased emphasis on attacking the physical problems throughout the Southwest neighborhood and the expanded code enforcement program and sweeps, staff believes the boundaries for the rental loan program should be consistent with the other rehabilitation programs so that physical problems on rental property throughout the Southwest neighborhood can be addressed, as well as assist property owners wherever a sweep may occur can have access to the programs. There are two areas eligible for the other rehabilitation programs which are currently not covered by the rental loan program. These are 1) the area west of the SR 55 Freeway, with the exception of the south side of Alliance Avenue and 2) the area bounded by Walnut on the north, Red Hill on the east, the railroad tracks on the south and Newport on the west. While expanding into the first area adds primarily larger apartment complexes, the expansion into the second adds the 4- unit and 5-unit buildings along Del Amo Avenue, Carfax Drive and Charloma Drive. These neighborhoods are, generally, in good condition. But like other areas, they are aging and will, in the sequence of code enforcement sweeps, be targeted. Staff believes it is important to be able to offer the rental rehabilitation loan program in these areas before they deteriorate to the condition of other areas and also to assist property owners who may be cited under the code enforcement program. Because the funding for the Housing Rehabilitation Program comes from South Central Redevelopment Project area tax increment funds, staff would recommend that 75% of the funds be expended in the project area. If the Agency adopts the expanded area for the-rental loan program, Staff will institute monitoring procedures to ensure that the 75% of the funds are spent in the South Central Redevelopment Project Area and the funds spent outside the Project Area are limited to 25% of available program funds. Staff is recommending that the rental loan program be offered to the same target area as all other rehabilitation programs as shown on the map in Attachment A. William A. Huston Housing Rehabilitation Program Modifications February 21, 1995 Page 8 · Modification t6 the Processing Schedule for Property Owners Participating as a Result of Code Enforcement Actions Since its inception, the Housing Rehabilitation Program has been viewed, primarily, as a voluntary program to assist property owners. Therefore, Staff has not enforced strict time limits for property owners to meet for each step of the process. However, for those who participate because of code enforcement actions, strict adherence to a schedule of performance is imperative to ensure that violations are eliminated as quickly as possible. Therefore, staff has already inaugurated new .requirements for those property owners who have received violations. These new requirements are: The property owner who opts to use the Housing Rehabilitation Program to resolve code violations will be given thirty (30) days to submit a full application. If the complete application package is not received, the~ matter will be immediately turned back to Code Enforcement to be processed as any other violation is processed. Throughout the housing rehabilitation process, there will be time limits established for each action the property owner needs to take. The time limits vary depending on the amount of work required for each task. Both voluntary and involuntary participants who, after the work is completed, fail to maintain their property and receive a subsequent citation for violations, will be subject to all provisions of the Loan Agreement which allows the Agency to require full repayment of the loan under these circumstances. Staff recommends the Agency affirm these changes in processing policy as they relate to those participating because of code enforcement action. - · MARKETING OF THE RENTAL PROGRAM The Agency has previously requested information about how the program is marketed. While no action is needed on this issue, Staff wants to inform the Agency of what the Staff will be doing in the next few weeks. Williaan A. Huston Housing Rehabilitation Program Modifications February 21, 1995 Page 9 Staff has gathered the names and addresses of all the rental property owners inthe current rehabilitation program area and will be m~rketing the program by direct mail to them. We have postponed the mailing pending Staff's review and the Agency's actions on changing the program. Once the Agency makes its decisions on the program modifications, Staff will mail information to all of the rental owners who have not participated in the program. Staff expects to See a dramatic increase in loan program activity as a result of this new mailing. o Staff will also be notifying all past participants who did not take out a loan because of the income restrictions, that the program requirements have changed and that they may wish to now do more extensive improvements with the loan. This will not only have a major impact on structural problems on these properties, such as roofs and fencing, but will also increase the potential number of properties 'installing security lighting and being painted, if the paint grant program is approved. This will have a significant impact on the overall neighborhood awareness of the impact of the program. . The Housing Rehabilitation staff will continue to participate in the code enforcement sweeps, and in other code enforcement action as needed. Property owners who receive violation notices will be notified of the Housing Rehabilitation program. With these three efforts, Staff expects that participation in the Housing Rehabilitation Program will significantly increase, which will be seen in the monthly expenditure levels towards the end of this fiscal year and those projected for next fiscal year. ~eh~~m~rprogram Ma-nager rz immer khousrehkprogchng, rda Dana Ogdon Senior Planner 14924 14538 14940 1454~ I11t I111 ~ i O(L AUO AV. OEi. AMO AV. ST. 'TACHMENT B RESIDENTIAL REHABILITATION PROGRAM MONTHLY EXPENDITURE RENTAL GRANT RENTAL LOAN SINGLE GRANT SINGLE LOAN FY 92-93 JANUARY FEBRUARY MARCH APRIL MAY JUNE FY TOTAL $32,732.00 FY 93--94 JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL MAY JUN~= : ~)TAL $129.362.o0 FY 94-95 JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER JANOARY FEBRUARY MARCH APRIL MAY JUNE FY TOTAL $52,229.00