Special Board of Aldermen 10-27-2020 Page 10
Sort of interlinked with the housing trust is this idea of updating inclusionary zoning regulations in the City.
We think that the City should revisit the existing inclusionary ordinance and update it and probably expand
its reach. Right now the Ordinance is generally tailored to downtown and the COD areas as we understand
it. But there is the opportunity to expand it citywide. You know the first step that we think in that process
would be to hire a consultant who can work closely with City staff to not only rewrite the Ordinance but also
to test the financial implications to ensure that whatever is done with the inclusionary ordinance doesn’t
have a negative impact on development feasibility and have the effect of potentially cooling the
development market. So it’s really a balance of writing the Ordinance in a way that achieves the City’s
goals and what you are trying to do but also being cognizant that it could potentially have an impact on
development feasibility, so really trying to balance those two.
If the Ordinance ends up including a payment in lieu option so a fee option, that money can then be used to
potentially feed the housing trust fund over time. Lastly, we had the recommendation that the City look at
phasing in rental registry program and inspection process for rental units. The Registry component we
think is critical to — | think first and foremost is track and register the rental properties in the City and have a
list of contacts just in case issues arise with the new contact, you know, if any issues come up. We
recommend that the registry fee would be collected annually and that the amount is enough to cover the
administration of the program. We think that the nexus between those two things is really important.
Secondly and it is probably a much longer-term process, the City could phase in an inspection process
recognizing that this might require additional staff capacity. Inspections could take place, for example,
maybe every 3 years. If tenants turn over during that time period but if the owner or landlord is able to keep
the same tenant for say more than 3 years, maybe consider just doing inspections every ten years if the
tenant remains the same. So it’s a little bit less of a list on City staff as well as on the landlord if it’s not
being done every six months, every year, every two years, but there’s some leeway in there. The City
should also consider coupling the landlord rehab program or even a loan program with the inspection
process just in case issues come up. We want to provide landlords, especially those who might be lower
income landlords and might not have cash on hand. We want to be able to give them an option where they
could make, where they could address the issue that comes up do the rehab and get that tenant back up
and running as quickly as possible but not have to spend all the money that they have in their bank account
to address that issue.
The third bucket is around new or expanded programs. The first recommendation is around expanding the
rental and owner rehab program. The City has both programs in place today, but the need for rehabilitation
funds appears to be higher than what is typically available in a given year. | think in the downtown this
issue is very present and would likely benefit from improvements to units as well as access to capital. So
one change that we were thinking about for these programs is considering moving from a 0% interest loan
that’s repayable at either the sale or maybe a refinance and changing that to a maybe a very low interest
rate loan, maybe it either stays 0% or 1% or 2% but that there is a requirement for that loan because the
interest rate is so low to be paid back over time so it is continuously paid back. This would help to create
more of a revolving loan pool instead of just depleting the pool each year and then having to wait to recycle
that money say with a new infusion of CDBG money or City funding in its place. And you could potentially
tier the interest rate based on the AMI of the owner, whether its landlord or an owner household to those
who are lower income maybe it’s 0%, those who are 120% of AMI maybe it’s a 2% loan.
The second recommendation is around restarting the First Time Home Buyer Program to assist with down
payment and/or closing cost. That program could be established as a grant and maybe if you were going
to target something like a $4,000.00 or $5,000.00 amount, maybe it’s just a grant. Or if it is going to be a
higher amount, maybe considering a loan that could be forgivable after a certain period of time, typically
after the person or persons have lived in the household for a set period of time. Or it can even be
something that’s paid back at little or no interest, similar to what we talked about with the rehab fund. That
option would then help to recapitalize that fund over time and make it more available throughout the year.
