06-08-2016 Workshop Packet - Laserfiche WebLink

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Funding: Funding of a rehab program could come from a variety of sources. We could issue bonds, we could dedicate funds on hand, or we could modify our Economic Development Authority (EDA) to incorporate Housing & Redevelopment Authority (HRA) powers thereby enabling a levy for this purpose. (Note: the maximum levy is .01813% of taxable market value which is about $905,000,000 for a levy of about $164,000.) Another option is the use of available Tax Increment Balances. Our most flexible option would be from District 2-l(Country Drive Redevelopment). We have over $800,000 in this fund that could be used for a variety of purposes. Another big issue related to funding is how much do we need. Anticipating demand is difficult to do. In talking with Shoreview staff, it sounds like they initially started with about $150,000. Leveraging other Programs: As was shown earlier, there are other rehab programs out there to address certain situations that we may be able to leverage with a program we establish. On the other hand, it may be difficult to do so in terms of differing program guidelines and loan subordination issues. If HRC administers our program, we may be making this somewhat easier given their role in utilizing other programs. Another possibility Ehlers & Associates mention deals with the 2013 PACE legislation (MS 216C.436) that focuses on energy improvements (Attachment #5). This program allows you to assess for eligible improvements. By assessing these costs, we have improved loan security because assessments get paid before mortgages. The St. Paul Port Authority is doing this on behalf of other cities and counties, but coordinating program will likely pose challenges. Program Guidelines: Here is where a lot of policy decision need to be made. The key to this area is what are over primary objectives? Items to consider include the following: • Loan Maximums (based on Roseville's experience, higher may be better) • Term (10 years was the most common on the survey form, but a higher loan amount may warrant a longer term to keep payments affordable). However, from a revolving fund standpoint, it will take a long time to recycle funds if the term is extended. • Interest Rate — 3% was very common. • Income Restrictions — No income restrictions may be the best if our goal is to improve housing stock. • Loan to Value Ratios — over 100% loan to value may put our dollars at risk. But, some other considerations could be used to deal with exceptions to this type of provision such as late payment history, current in taxes, etc. • Housing needs to be a certain number of years old??? • Ratio of exterior to interior improvements — exterior helps curb appeal and neighborhood values, but interior improvements address livability and impact resale. • Necessary versus desired improvements — energy and code improvements are important versus things like granite countertops or bathroom tile. Should "luxury items be excluded as St. Anthony does? • Townhomes and condo to be included for interior improvements only (versus common areas)? • Do we provide for rental properties such as duplexes or the four-plexes on Ruth Street? • Do we establish a multi -family program like Roseville's? K