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July 6, 2010 Council Work Session Item 3 — Housing Replacement Program Review Page 2 of 3 Discussion Recent EDA Actions Since December of 2008, the EDA has denied the last three requests from residents inquiring about the program's acquisition option. These actions are consistent with the EDA's decision in 2007 to refocus the program towards demolition of blighted properties rather than the acquisition option. Based on the EDA's recent actions, the City's current budgetary crisis and the effect of today's economy on homeowners' ability to maintain their homes, staff is suggesting that the EDA consider refocusing the Housing Replacement Program. Ideas for Refocusing the Program Refocusing the Housing Replacement Program could mean using 2011 Housing Replacement Program funds towards implementing two of the Council's 2010 goals & priorities. These are to "Continue Emphasis on Code Enforcement throughout the City" and to "Continue Focus on Issues Relating to Home Foreclosures and Vacancies" (the Council does not have a formal goal or priority to revitalize neighborhoods through the replacement of housing). Since 1996, the EDA has annually allocated $150,000 toward the Housing Replacement Program. When the EDA discusses its 2011 budget, staff would like the EDA to consider maintaining the $150,000 for neighborhood revitalization purposes. However, rather than keeping the Housing Replacement Program, staff is suggesting that the EDA consider reallocating $100,000 towards a code enforcement rehabilitation program and $50,000 towards a housing demolition program. The Housing Resource Center would administer both programs per the annual fee that the City already pays the Housing Resource Center; however, the City would need to discuss the details of the programs with the Housing Resource Center. About Possible New Programs A code enforcement rehabilitation program would provide low-income homeowners who have received notice of code violations from the City with the ability to bring their home into compliance. Attached is an example of such a program from the City of Tallahassee, FL. Tallahassee offers this program as an interest free/no-monthly payment loan up to $2,500 per unit. The loan is forgivable after five years if the homeowner remains in the home. Another example of a code rehab program is the City of Minneapolis's code abatement loan program. Minneapolis offers an interest-free loan for up to $20,000 for code abatements for households that are within 50 percent of the median income for the Twin Cities Metro area. The homeowner repays the City for the loan when the owner sells the house. A housing demolition program would have the same criteria as Mounds View is Housing Replacement Program but would not offer acquisition assistance.