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HomeMy WebLinkAboutMINUTES - 12192006 - C.122 TO: BOARD OF SUPERVISORS • ' O� FROM: Dennis M. Barry, AICP f = Contra Director of Community Development Costa DATE: December 19, 2006 County s>q�coii:+'� SUBJECT: Funding Re-Allocation from the North Richmond In-Fill Development Project to the North Richmond Youthbuild Program SPECIFIC REQUEST(S) OR RECOMMENDATION(S) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS: APPROVE and AUTHORIZE the Deputy Director, Redevelopment to Re-Allocate $350,000 in FY 2003/04 Community Development Block Grant (CDBG) Funds from the Community Housing Development Corporation of North Richmond (CHDC) North Richmond Infill Development Project to the CHDC North Richmond Youthbuild Program. FISCAL IMPACT: No General Fund impact. CDBG funds are provided to the County on a formula allocation basis through the U.S. Department of Housing and Urban Development (HUD). CONTINUED ON ATTACHMENT: 1 YES SIGNATURE RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMME AT N OF 90` O RD COMMIT E APPROVE _OTHER SIGNATURES : q�,�'i- ACTION OF BOA ON 12J10 101b APPROVED AS RECO ENDED V OPER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE V7 UNANIMOUS (ABSENT AND CORRECT COPY OF AN ACTION TAKE! AYES: NOES: AND ENTERED ON THE MINUTES OF THE ABSENT: ABSTAIN: BOARD OF SUPERVISORS ON THE DATE vatwLr: Ow2 tT 1� SHOWN. ^— Contact: Kara Douglas, 335-7223 ley _"wit o �b Orig: Community Development ATTESTED cc: County Administrator JOHN CULLEN, CLERK OF County Counsel THE BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR � 1 BY , DEPUTY North Richmond Youthbuild December 19, 2006 Page 2 BACKGROUND/REASONS FOR RECOMMENDATIONS YOUTHBUILD In 2002, the County approved $250,000 in Community Development Block Grant (CDBG) funds for development of the North Richmond Youthbuild Program (YB). Youthbuild is a Housing and Urban Development (HUD) sponsored program designed to provide comprehensive training and supportive services to eligible at risk youth and young adults, ages 17-24, with a special focus on youth offenders and parolees. The program provides educational assistance to obtain GED's, general job skills development, and hands on training in the construction field. Participants receive training on how to rehabilitate houses that are then sold to low income first time homebuyers. The YB program is a partnership between the Community Development Department, Redevelopment Agency (Agency), Contra Costa County Housing Authority (Authority), and Community Housing Development Corporation of North Richmond (CHDC). CDBG funds are used to cover construction costs and provide silent second loans to the homebuyers. As each house is sold, some of the CDBG funds are repaid to a revolving loan fund for additional YB homes, and the balance is used for homebuyer purchase assistance. Under the initial agreement, the Housing Authority grant deeded three properties to YB of which two have been successfully rehabilitated and sold to low income first time homebuyers. The properties and sale prices are as follows: Site #1: located at 1711 Fourth Street, sold for $323,000. Site #2: located at 1820 Sixth Street, sold for $350,000. Sites #3A & #313: located at 1849 Fifth Street. This lot was split into 2 separate parcels. In 2005, the Authority conveyed two additional properties that will be developed into three new housing units. The rare site configuration of these parcels enables a total of seven units to be built from five sites, including the new, undeveloped, locations listed below: Site #4A & 4B: Located at 1835 & 1839 Fourth Street, new construction Site #5: Located at 1722 Third Street, rehabilitation Although Youthbuild has been successful in developing sites, costly start up delays resulted in several set-backs that prevented the program from moving more quickly. Key factors included construction delays, vandalism, personnel changes, legal reviews, and finding a general contractor' who could correctly balance participant training and construction development. The program also experienced work voids that stalled operations, and work sites for participants. The program is on its way to achieving its goals with two properties sold and five more in the pipeline. Net proceeds from the sale of each home will be rolled into the next unit, and the whole entire process starts all over again until each site is completed. Upon completion and sale of all seven units, approximately $110,000 in sales proceeds will be available for reprogramming back into the program. YB also provides the framework for the County to fulfill a portion of the targeted housing goals established back in 2003 in the North Richmond Memorandum of Understanding. CHDC believes that with additional CDBG funds, YB will be able to work on two homes simultaneously. This will allow the program to always have an active site for participant training. It will also expedite the rehabilitation and sale of the properties. IN-FILL DEVELOPMENT In 2003, the County approved $350,000 in CDBG funds for the North Richmond In-fill Development program. The goal of this program was to accumulate scattered sites throughout North Richmond and develop seven to nine single family homes for sale to low income first time homebuyers. North Richmond Youthbuild December 19, 2006 Page 3 When the scattered site program started, land was abundant and costs were manageable. Over 100 vacant sites were originally targeted as available, underutilized parcels that were either attractive nuisances, had excessive blight, or illegal criminal activity. The intent of the project was t6 improve blighted conditions by constructing new single family homes on vacant parcels and to provide affordable homeownership opportunities to low income residents of North Richmond. Before 2003, a significant number of these sites were viewed as hideous eyesores that contributed heavily to blight and illegal dumping in the area. In 2003 and 2004, private developers began quickly purchasing sites in North Richmond. The unanticipated development of these parcels dramatically increased prices and made it even more difficult for CHDC to purchase sites. Long time vacant lots in North Richmond that historically remained underdeveloped now command six figures. As a result, CHDC found they were priced out of the market and unable to secure parcels that had originally been earmarked for acquisition. The County approved 98 permits for in-fill development during this same time period. Most of these units were part of the 100 previously identified parcels listed in 2003. Unfortunately, these units were developed as market rate housing, which does not qualify for inclusion under low income housing standards. Development by private developers, coupled with the escalation of North Richmond real estate prices, significantly increased land costs and forced many non-profit developers to rethink strategies as it relates to predevelopment and acquisition costs. Housing prices in North Richmond soared nearly fourfold during this period which clearly outpaced the purchasing power of CHDC. The re-allocation of $350,000 from the In-Fill Housing Development to the North Richmond Youthbuild program will provide the most viable way to continue providing affordable housing to low income homebuyers. Re-allocating these monies leverages existing resources and provides immediate funds for developable land already in the YB program possession. These monies will enable a seamless transition to continue the development of low income housing that otherwise would not exist.