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Minutes 10-02-08 MINUTES OF THE BOYNTON BEACH AFFORDABLE HOUSING ADVISORY BOARD MEETING, HELD ON THURSDAY, OCTOBER 2,2008, AT 6:30 P.M. IN COMMISSION CHAMBERS, BOYNTON BEACH, FLORIDA PRESENT: Frances Francis, Chair Jeanne Heavilin, Vice Chair Angela Girtman Shirley Jaskiewicz Margaret Johnson Sherry Johnson Jeffery Wooster Octavia Sherrod, Community Development Improvement Manager ABSENT: Brent Clayton Lamont Robinson Robert Taylor Woodrow Hay I. Opening A. Call to Order - Octavia S. Sherrod Ms. Sherrod called the meeting to order at 6:32 p.m. B. Introduction of the Members of the Board Ms. Sherrod greeted and thanked the members for volunteering. The members of the Board introduced themselves and briefly summarized their background. II. Overview of SHIP Program A. History Ms. Sherrod explained in 1990, the William E. Sadowski Affordable Housing Act was created, which provided dedicated revenue for state and local housing programs and a flexible framework to stimulate local economies. The program was supported by homebuilders, real estate professionals, growth management advocates, government agencies and low-income housing advocates. It created jobs, promoted homeownership and gave local decision makers authority to target low and very-low income households, while leveraging public resources. 1 Meeting Minutes Affordable Housing Advisory Board Boynton Beach, Florida October 2, 2008 There were two phases of funding. There was a ten cent increase of the cost of real estate documentary stamps which began in August of 1992 and a reallocation of an additional ten cent documentary stamp tax from the general fund that began in July of 1995. The statute governing the Act dictates the types of professions to be represented on the board as follows: . Person actively engaged in residential homebuilding - Brent Clayton . Person representing the banking or mortgage industry - Frances Francis . Person representing labor actively engaged in affordable homebuilding - Lamont Robinson . Person advocating for low-income individuals - Sherry Johnson . Person representing profit provider of affordable housing - Jeff Wooster . Person representing non-profit provider of affordable housing - Margaret Johnson . Person representing real estate professional - Jeanne Heavilin . Person currently serving on the City's Planning and Development Board - Shirley Jaskiewicz . Representative of the local governing board in his capacity as City Commissioner - Woodrow Hay . Person representing employers - Robert Taylor. . Person providing essential services personnel - Angela Girtman B. Strategies The strategies the City of Boynton Beach currently used for the Local Housing Assistance Plan was in effect for fiscal years 2006/07, 2007/08 and 2008/09. The plan will expire next year. Copies of the plan were given to the members to review, and discuss what they could do, given the current market, to help develop effective ways to provide affordable housing. Ms. Sherrod recognized representatives of City Staff; Hanna Matras, City Economic Development Planner, and Brenda Cornelius, Affordable Housing Administrator. The plan currently serves individuals in the very-low, low and moderate income levels. Very-low income is considered below 51 % of the median income, low is from 51 %-79% of the median income and the moderate income individuals are from 81 % to 120% of the median income for the municipality. The two strategies used were gap Financing and purchase assistance, which is the down payment and closing costs, and the second was repair for Code violations. There was an emergency repair/rehabilitation program to assist homeowners with repairs per Chapter 67.37, Florida Administrative Code. Rehabilitation was defined as repair or 2 Meeting Minutes Affordable Housing Advisory Board Boynton Beach, Florida October 2, 2008 improvements needed for safe or sanitary habitation, correction of substantial code violations or creation of additional living space to correct overcrowding. When the program was started, the initial subsidy was $20,000 for low and very-low income individuals, and $10,000 for moderate income individuals. The program was revised to $25,000 for very-low, $20,000 for low and $10,000 for moderate. Due to the market situation, the program provides $75,000 for low and very-low income individuals, and $50,000 for moderate income individuals. The figures stated were the maximum levels and did not indicate each applicant received the full amount. In 1997, the maximum sale price for new construction was $134,040; for an existing home, the price was $107,949. The current sale price is $280,000. C. Accomplishments The program, to-date, has assisted in the purchase of 162 homes, that totalled $4,419,929. They rehabilitated 166 homes with the assistance of SHIP funding for a total of $3,062,906.26. The numbers reflect only the SHIP funds; however, they leveraged other funding sources with those dollars. After Hurricane Wilma, municipalities received an additional subsidy. In fiscal year, 2005/06, $1,000,000 was given to assist with rehabilitation needs caused by the hurricane. The strategy was amended and as a result, five additional homes were purchases, eight homes were rehabilitated, 47 disaster prevention measures were funded, three new homes were constructed, for a total of 63 additional dwellings affected through the program. III. Purpose of the Advisory Board The purpose of the Board was to review the ordinance, and established policies, procedures, to review land development and the adopted comprehensive plan components. Then recommend specific actions or initiatives to encourage or facilitate affordable housing, while protecting the ability of the property to appreciate in value. Recommendations may include: ./ Modify or repeal existing policies, procedures, ordinances, regulations or plan provisions ./ Create exceptions applicable to affordable housing ./ Adopt new policies, procedures regulations, ordinances or plan provisions including recommendations to amend the local government comprehensive plan and corresponding regulations and policies Ms. Sherrod explained individuals contact them to begin the process. The City uses the Boynton Beach Faith Based Community Development Corporation, (CDC), but they 3 Meeting Minutes Affordable Housing Advisory Board Boynton Beach, Florida October 2, 2008 also take applicants from the Delray Beach and the Lake Worth Community Development Corporations. When the market started escalating, Delray Beach ran out of affordable housing much earlier than in Boynton Beach. Additionally, the process is labor intensive to get individuals ready for housing. The non-profits provide the first time homebuyers course, pulls their credit and reviews the issues to get them ready for homeownership. There was an inquiry if the City was buying additional homes with the foreclosures and short-sells occurring. Ms. Sherrod explained the City of Boynton Beach was selected to receive new funds for that purpose. Under the Housing and Economic Recovery Act, the City would receive $2,900,000 to assist in buying foreclosed properties, rehabilitate them and sell them. Only two municipalities in Palm Beach County received the funds, which were the City of Boynton Beach and West Palm Beach. Palm Beach County would be receiving $26,000,000. The formula was based on the number of foreclosures and sub-prime mortgages. Ms. Sherrod would be traveling to Washington D.C. to attend a Housing and Urban Development Summit and ascertain exactly what the expectations were in expending the funds, because there was an 18-month window to do so. The members also noted the mission and purpose of the Board was indicated in the resolution provided in the meeting materials. Also provided for the members were incentives and initiatives as well as Article VIII of the Local Housing Assistance Plan. Ms. Sherrod explained the Local Housing Assistance Plan recommendation was in the Land Development Regulations which should be reviewed by the members. Additionally, the Planning and Zoning Department wanted to make a presentation to the City Commission, since they were doing a rewrite of the regulations. Ms. Matras, City Economic Development Planner, suggested any recommendations made should be given to them and they would make a full and total presentation of all the Land Development Rewrites in December. What was distributed was what currently existed in the regulations. Ms. Sherrod requested all the members verify their contact information so they could correspond with her regarding questions or recommendations which she would answer at the next meeting. Ms. Matras explained the City has a Work Force Housing Ordinance. There were some changes made to it recently which pertained to density regulations. She explained the members should look at the actual text to determine how many units would have to be provided with the density. She welcomed any comments, suggestions or changes to the Ordinance, since the market changed had dramatically. In the current market, she anticipated there would be fewer moderate income individuals served, and the projections were there would be another 20% drop in housing prices in 2009. Ms. Sherrod explained the meeting materials contained a map that divided the City into quadrants. They also had data regarding sales of existing homes and a table, by 4 Meeting Minutes Affordable Housing Advisory Board Boynton Beach, Florida October 2, 2008 housing type, single-family home sales by quarter and where the City ranked in existing home prices. This information did not include sales by owner, or developers who have their own financing. Ms. Sherrod explained two weeks ago, her staff went on the internet and viewed home prices north of the C-16 Canal. She was amazed at the drop in the price of housing. The area previously sold for $200,000 and now had homes for $99,000. Although pricing was one aspect of homeownership, the ability of an individual to obtain a mortgage would be an issue in the current economic environment. Of the 162 homes the City assisted with, there were two foreclosures. There were several homes refinanced, but when homes are refinanced, the monies the City gave are paid back. Five homes were currently in default. This success rate was due to the City's efforts on the front end of the qualifying process. She reported Palm Beach County has a foreclosure prevention component in their SHIP program, which had assisted some City residents, because those residents went into foreclosure through no fault of their own, such as catastrophic illness, or job loss. Under the provisions of the program, the resident has to show the ability to continue to make the payments from that point on and the program simply paid the arrearages. Ms. Sherrod explained with the upcoming funding there could be a recommendation to try to assist individuals to keep their homes. There was also a summit Ms. Sherrod would attend which would address the issues of properties that are worth less than their mortgage and subsidized mortgages. Sh~ explained the first mortgage was the entity that gets paid first. There was only o"ne instance when an individual went into foreclosure and the City Attorney was able to recoup the funds. One suggestion received was to consider taking out the bank's first mortgage position in order to protect the subsidy. Ms. Sherrod responded that could be reviewed, especially since it was not always a sizeable subsidy and the City had been diligent in the loan to value ratios. Brenda Cornelius, Housing Administrator, explained most loans have the loan to value ratios monitored and the City never used, anything less than a 50% loan to value ratio. The very low income individuals would have to have a 60% ratio, the low would have a 70% ratio and moderate would have a 80% ratio. The only difference was if the individual received funds from another entity, and the funding was layered, the loan to value ratio would be reduced by 10% in each of the three income categories. The front and back end ratios were monitored and the City seldom allowed for an exception. If both homeowners were working, and they had good credit they could apply for the loan. Then again, If both homeowners were working, and only one had good credit, the bank would only use the income from the individual with the good credit, the City would look at the total income as far as ratios. The City allowed 35%, and they were at 32%. They would not use anything over 45% with a bank, which was why the default rate was low. Ms. Cornelius advised they spend a large amount of time before, during and after the transaction with the client. 5 Meeting Minutes Affordable Housing Advisory Board Boynton Beach, Florida October 2, 2008 IV. Appointment of Chair and Vice Chair Ms. Heavilin nominated Mr. Wooster for the position of Chair. Mr. Wooster declined the nomination. Ms. Girtman nominated Ms. Francis for Chair. Sherry Johnson seconded the nomination. Ms. Francis accepted the nomination. There were no other nominations for the position of Chair. Sherry Johnson nominated Ms. Heavilin for the position of Vice Chair. Ms. Jaskiewicz seconded the nomination. There were no other nominations for Vice Chair. V. City of Boynton Beach Housing Statistics Ms. Sherrod had compiled materials for the members and included as much information as possible. She requested the members not hesitate to contact her with any questions or suggestions. The main philosophy was to not only assist individuals to become homeowners, but also assist individuals to stay homeowners. She explained she can obtain information from other departments to assist the members develop strategies. The following were some of the suggestions received to further affordable housing: ./ Expedite permitting ./ Invite Vivian Brooks, of the Community Redevelopment Agency ,and Joe Grey to the next meeting to speak about land trusts ./ Investigate the possibility of establishing a community bank to take the risk out of the equation and help lenders provide loans to very low income individuals ./ Investigate the opportunities to purchase foreclosed properties for affordable housing ./ Establish a self-sufficiency program ./ Establish a self-insurance program to assist with taxes and insurances. Ms. Sherrod explained only recaptured funds could be used for a self-insurance fund. ./ Assess a tax for affordable housing, similar to the Art in Public Places fee or explore linkage fees . . .. ./ Establish hurricane protection standards for affordable housing. Ms. Girtman expressed concern regarding the need for housing for teachers, firefighters and other professionals. She requested the starting salaries of those individuals to determine what category they would fall into. She explained there was only one head of household and inquired how that income was viewed. It was explained the income of all .6 Meeting Minutes Affordable Housing Advisory Board Boynton Beach, Florida October 2, 2008 the individuals residing in the home would be used in the application process. Ms. Sherrod noted the City has Workforce Housing. Ms. Cornelius noted in the case of teachers, fire and police employees, many preferred to live in the unincorporated areas instead. Generally, salaries for firefighters and police were in the higher income categories. Ms. Sherrod would obtain the information for Ms. Girtman for the next meeting. VI. Recommendation for next meeting The members tentatively set November 6, 2008 for the next meeting. VII. Adjournment There was no further business to discuss. Motion Ms. Heavilin moved to adjourn. Ms. Jaskiewicz seconded the motion that unanimously passed. The meeting adjourned at 8:04 p.m. U{ltlvuIK( ~U Catherine Cherry 0 Recording Secretary 7