Submitted By
Tammie Grossman, Director of Development Customer Services
Reviewed By
LKS
Agenda Item Title
Title
A Resolution Awarding a Small Rental Property Rehabilitation Loan and Authorizing the Execution of a Loan Commitment and Agreement (SPR-028).
End
Overview
Overview
The purpose of the Small Rental Properties Rehabilitation Loan Program is to address and to correct deteriorated and blighted homes throughout the village, to provide affordable rental housing, and to improve the energy efficiency of small rental properties. The eligible owner of this four unit property is requesting a forgivable rehab loan of $20,000 from the Village.
Body
Staff Recommendation
HPAC and the Neighborhood Services Division recommend approval of this $20,000 forgivable loan.
Fiscal Impact
This rehab loan of $20,000 will reduce the remaining budgeted balance of $70,001 to $50,001. This program was budgeted under the Community Development Block Grant (CDBG) Fund, account no. 2083-46201-664-585617.
Background
The Neighborhood Services Division administers the Small Rental Rehabilitation Loan Program, which was established on November 1, 2010 and funded with Community Development Block Grant (CDBG) funds. The program is open to rental buildings with seven or fewer units. The program has two major purposes: (1) upgrade the physical conditions of small rental buildings, (2) expand the housing choices of renters to encourage economic and racial diversity. The program has two types of assistance: (1) Forgivable loans which are limited to $5,000 per unit; (2) Marketing Services Agreement for the Oak Park Regional Housing Center to affirmatively market the units in the building. In exchange for the forgivable loan funds, owners agree to match the loan funds by 25% and to rent at least 51% of their units to households earning below 80% of the Area Median Income (AMI), a household of four would earn below $57,900 per year.
SRP-028 is a four unit building located at 108-110 Harrison Street. The property owner is requesting a rehab loan under the Small Rental Rehab Program of $20,000 for two years to be matched by owner funds in the amount of $29,460. The Small Rental Rehab loan will be used to rehab flooring in all kitchens and install new GFCI outlets to code in the kitchens. One unit will have the kitchen cabinets and counters top replaced. All bathrooms will have the vanity, medicine chest and light fixtures replaced. The bathroom rehab also includes: prepping and painting the bathrooms, re-grouting and caulking tile around tubs and installing a new GFCI outlet on separate breaker in two bathrooms. The rear porch for all units will include the removal and replacement of windows and installment of new resilient vinyl tile plank flooring. The Project was bid two times. Each time only one bid was submitted and the owner decided to proceed with the only bid. The owner has committed to paying all costs beyond the $20,000 Village loan amount. This contribution will be at least $29,460.
Alternatives
This program utilizes federal funds. The only expense to the Village is staff time for project administration. The program provides benefits to the Village in maintaining and improving our housing stock, promoting diversity, providing affordable rental units and improving the energy efficiency of the buildings. If the funds are not awarded to individual recipients the Village will not meet its goals under these programs.
Previous Board Action
The program guidelines were adopted by the Village of Oak Park Board of Trustees on November 1, 2010 and amended on July 2, 2012 to further define the provisions of the Small Rental Properties Rehabilitation Program and to provide guidance to staff in administering the program.
Citizen Advisory Commission Action
All loan and grant requests are reviewed by the Housing Programs Advisory Committee (HPAC) before they are presented for Board approval. This request was reviewed by HPAC on February 18, 2015 and recommended for approval.
Anticipated Future Actions/Commitments
NA.
Intergovernmental Cooperation Opportunities
NA.
Performance Management (MAP) Alignment
A Governance Priority established for the Development Customer Services Department Division of Neighborhood Services is Multi-family and Single Family Grant and Loan Programs.