06-08-2016 Workshop Packet - Laserfiche WebLink

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452 Simons, Magner and Baku efficiency, an effective electronic management information system becomes a necessity for the survival of CDCs in a highly competitive funding environment (Cowan, Rohe and Baku 1999). Within the limited focus of tine study, in order to increase the fiscal benefits for its respective city, a CDC should alterupt to combine rehab programs with homesawvun-ership -services. Such a two-pronged affordable housing approach, as used by Neighborhood Inc. of Battle Creels, would have stronger positive effects on the value of neighborhood property and thus on the real estate tax base. If such a combined rehab -homeownership program attempts to maximize the number of new households CDCs bring to the city, the fiscal benefit would be enhanced. For example, the addition of new households to the city benefits the city on every fiscal line item, especially if the new resident occupies a previously vacant unit. Under these conditions, there would be a new resident income tax, new resident sales tax if applicable, in addition to the other benefits.' Also, CDCs should also attempt to lower the administrative costs related to their rehab programs. The tindings show that the administrative costs associated %v*t11 CDCs' rehab propram accoaunts for the largest non-refundable support from the city. The findings also shown that the larger the volume of rehab ,production. the lower the administrative cost laer unit. Thus, by increasing CDCs' rehabbed output, the administrative costs will tend to be reduced (e.g., greater economies of scale). Alternatively, CDCs should consider charging service fees for the above- mentioned programmatic services to successful loan applicants. Allowing the neediest applicants to finance these fees in their loan amount would mean the programs should still be available to lower income households. Further, CDCs may want to increase fiscal benefits by adjusting the type of rehabilitation projects they choosy; to complete. For instance, San Diego's benefit: cost ratio of 1:1.3 was among the highest (most favorable) of the sample partially due to the program's policy of acquiring its properties before and reselling them after completion of the rehab project. Therefore, the property tax assessor realizes the full increase in value because the property is revalued as the sale price on the tax record. The programs can also attempt to perform more projects that will increase the value of the property rather than maintenance -related rehab work. A larger portion of major rehab work could convert a higher portion of investment to value, which would translate to more property taxes for the city. It is recognized that this would also entail higher costs to the occupant. A policy that CDCs' cities shamauld generally avoid (from a fiscal impact standpoint) is grunts or forgiven mortgages. If the econou nic situation of a particular homeowner or group of homeowners requires this type on a non-refundable basis, tile" :a more effective policy would involve deferred loans. Deferred mortgages geEuer�ally are structured so no payment or only simple interest payments are required until the property is transferred. CDt's should focus on the renovation of vacant properties. The reduction of what ars`vimved .as 'blighted or empty homes is a large contribution to the economic 32