BALLSTON-VIRGINIA SQUARE

Civic Association Newsletter

April/May 1997 - Volume 20, No. 6



City of Alexandria, Virginia, Consolidated Plan for Housing and Community Development

One-Year Action Plan for the Period July 1, 1997 - June 30, 1998

A. Introduction

The Consolidated Plan is a requirement of the U.S. Department of Housing and Urban Development (HUD) as a condition of receiving funding under certain federal programs. The overall goal of the Consolidated Plan, as established by HUD and set forth in the regulations, is to extend and strengthen partnerships among all levels of government and the private sector (both for- profit and non-profit) to provide decent housing, establish and maintain a suitable living environment, and expand economic opportunities (especially for low- and moderate- income persons, as defined below).

The Consolidated Plan is a five-year comprehensive planning document that identifies the City's overall needs for affordable and supportive housing, homeless shelters and services, and community and economic development. The Consolidated Plan also defines the City's strategy, priorities and objectives for addressing identified needs. The City's first Consolidated Plan for Housing and Community Development, which covers the period July 1995 to June 2000, was approved by the Alexandria City Council on June 27, 1995, and by HUD on August 9, 1995.

A One-Year Action Plan is required for each of the five years of the Consolidated Plan. This One-Year Action Plan covers the period July 1, 1997 through June 30, 1998....

The City also spends more per capita on health and welfare programs than any jurisdiction in Virginia. Over the past decade, the City has experienced a continued increase both in the number of persons making use of City services, specifically housing, health and human services -- and in the cost of providing those services. The City believes that one of the reasons increases in health and human services expenditures have been greater in Alexandria is that the city has a higher percentage of assisted housing, a higher percentage of rental units in its housing stock, and lower median rents than other Northern Virginia jurisdictions.

The City has an overall commitment to help provide its residents with safe, affordable housing, subject to available resources. However, given the prospect for a significant decline in housing funding at the federal and state levels, and the City's own revenue decline in recent years, the City's housing policy must strike a balance between needs and available resources in the context of fair share. In addition, the City must look at how it can manage the demand for services, and emphasize moving persons from dependency to self-sufficiency. The priorities for the implementation of this policy are designed to achieve this balance.

The City supports initiatives which expand homeownership opportunities for households with incomes up to the Virginia Housing Development Authority limits (currently $62,700 for a family of three or more); those which preserve and maintain rental housing covered under Resolution 830 (the City Council/ARHA agreement that "no public housing unit [shall] be demolished unless replacement publicly assisted housing is available...; that no tenant be displaced from public housing until they can be moved into replacement housing; and that all monies realized from the sale or lease of any public housing projects be used to benefit the living environment of public housing residents; and that all relocation expenses will be borne by ARHA and/or its designated Redeveloper."); those which provide assistance to existing homeowners for the repair and maintenance of their homes; and the continuation of existing programs and services for the homeless and persons with special needs. The City's policy with regard to new Section 8 vouchers and certificates, tax-exempt financing, Low Income Housing Tax Credits and other similar programs is that the assistance will be used for the maintenance or replacement of Resolution 830 units in the City, and will not be used to increase the City's subsidized rental stock without specific City Council authorization. In considering new proposals for subsidized rental housing, the City Council will evaluate the extent to which such new assistance may be able to serve as replacement for Resolution 830 housing, and will consider factors such as the characteristics of the surrounding neighborhood, as well as the provision of support services by the project sponsors.

Leveraging

ARHA leverages private funds for low-income housing by offering tax-exempt financing to private and non-private developers and by serving as the general partner in projects utilizing federal Low Income Housing Tax Credits. In return for lower cost financing or tax credits, developers using either of these programs must set aside a minimum number of units for low-income households. ARHA receives fees from the issuance of tax-exempt bonds (often for projects in neighboring Arlington County, which has no housing authority) and since 1990 has received annual payments from the sale of tax credits for its Quaker Hill development.

d. Homebuyers (Low- and Moderate-Income)

Activities and Resources:

The Office of Housing expects to use approximately $738,475 (consisting of $173,693 in new CDBG monies, $57,836 in new program income, $405,600 in new HOME funds and $101,400 in City General Fund monies) in its Homeownership Assistance Program (HAP) during the Action Plan period. This program will assist approximately 21 low-and moderate income households with downpayment, closing cost and principal write- down assistance in the purchase of their homes.

The Office of Housing also administers the Moderate Income Homeownership Program (MIHP) which is funded from the City's Housing Trust Fund. During the 1997-98 program year, it is anticipated that MIHP will assist approximately 10 households with incomes between the Section 8 Low Income limits (currently $43,500 for a family of four) and the Virginia Housing Development Authority's income limits for its regular single-family mortgage program (currently $62,700 for a household of three or more persons). MIHP will provide a maximum second trust loan of $15,000 for downpayment, closing cost and principal write-down assistance. Participants will be required to live or work in the City of Alexandria and must contribute a minimum of $3,000 towards the purchase of the home.

The City is in the process of adding a housing counseling component to its HAP and MIHP programs which will be available during the 1997 - 1998 program year. The administering organization will provide group counseling for applicants and potential applicants to increase their understanding of the home buying process, affordable housing opportunities and affordable financing; group counseling on credit issues, consumer debt management, and post-purchase homeownership responsibilities; and individual homebuyer counseling specific to applicants' individual situations with respect to credit, budget and/or savings issues. This project is being funded with up to $35,000 in previous year HOME funds, $11,790 in non-federal program income and $3,210 in General Fund monies.

The City will also continue to provide homebuyer assistance in connection with the Robert Pierre Johnson Housing Development Corporation's (RPJ) Stevenson Court condominium project which is projected to be completed in FY 1997. The project is being financed with a $1,320,000 City construction loan from the HOME Program, Housing Trust Fund and non-federal monies. The Virginia Housing Development Authority (VHDA) is providing 15 year, 3% interest Flexible Fund loan monies to qualified purchasers for eight of the 16 units.

In addition, first mortgage financing for the low-income purchasers of the 16 condominium units will be used through the VHDA's regular 30-year mortgage program. The City will provide up to $400,000 (made up of HOME funds and Housing Trust Fund monies) for homebuyer assistance under the guidelines of the Homeownership Assistance Program.

The Fayette Court Corporation is overseeing the renovation of the Fayette Court Apartments which are being sold as affordable condominiums. It is anticipated that the majority of the purchasers of the 49 units will be of low- and moderate- income; at the time of the writing of the Action Plan, four current residents have entered into contracts to purchase. The City has made a no-interest loan of $100,000 for pre- development and other non-construction costs, and the Fayette Court Corporation received private financing for the rehabilitation work through a $1,560,000 loan from First Union Bank. On June 15,1996, the City Council allocated $750,000 from the City's Housing Trust Fund for homeownership assistance to the condominium purchasers.

The City is also assisting purchasers of four townhouses currently owned and operated by Community Lodgings, Incorporated (CLI) as transitional housing. The homeownership assistance to the purchasers will be in the form of deferred payments, zero interest loans of up to $25,000 each. Rather than providing this assistance as a cash outlay, the City is allowing CLI to transfer to the townhouse purchasers up to $100,000 of its $236,750 in indebtedness to the City secured by these properties. As of January 31, 1997, one townhouse has undergone repairs, and is under contract.

Additionally, units pledged at affordable prices by private developers of residential projects in connection with the City's Affordable Housing Policy will provide homeownership opportunities for moderate- and middle-income households. As of January 31, 1997, 111 units in 7 developments (including RPJ's 16 condominium units) had been pledged as affordable set-aside units. All of these are priced affordable to households with incomes or below the VHDA income limits. During the period covered by this Action Plan, as many as 40 of the outstanding 75 pledged units (36 units have already been provided at Stonegate) may be constructed and made available to income-eligible households.

The City plans to continue to hold its annual Homeownership Fair, with the fourth Fair to be held in the spring of 1998. The Fair includes representatives from the City, as well as realtors, housing counselors, private lenders, mortgage loan specialists and others. Information regarding homeownership assistance programs, credit issues, affordable homes and the purchasing process will be provided in English and Spanish.

In keeping with the high priority to create homeownership opportunities outside public housing for public housing residents, most of whom have low-incomes, ARHA is working with the Alexandria Resident Council (ARC) in ARC's formal program of Education and training toward achieving homeownership.

Leveraging: The City's Homeownership Assistance Program utilizes CDBG and HOME Program funds with Virginia Housing Development Authority first mortgage financing. Downpayment assistance funds are expected to leverage VHDA first trust mortgage monies during 1997-98. The City's assistance for homebuyers of the RPJ project will leverage over $1.6 million in private first mortgage financing. The City's assistance for homebuyers of the Fayette Court project will leverage over $1.8 million in private first mortgage financing. In addition, the City's assistance for homebuyers of the Community Lodgings project will leverage over $160,000 in private first mortgage financing.



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