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HomeMy WebLinkAboutF.2 Workforce Housing Fund Allocation Criteria Allocation Criteria – Workforce Housing Fund, City of Bozeman The recently adopted Community Housing Action Plan identifies an Action Strategy titled General Funds. It is defined as an annual or occasional budget allocation primarily to support staffing, pre-development and gap financing for community housing. Under this strategy, action Item number 2 states “Establish allocation criteria to inform use of the City’s Affordable Housing Fund.” While the strategic plan discusses the reasons for which General Funds are primarily earmarked for the Workforce Housing Fund, an argument could be made that the Strategic Plan language should not be construed as defining or limiting the uses for Affordable Housing Funds. As stated in the City’s approved budget for fiscal year 2020 the major objectives for the workforce housing fund are as follows:  To provide down‐payment assistance & low‐interest loans  To offer impact fee reimbursement for affordable housing projects  To match funds for low‐interest tax credit project applications It should be noted that the uses listed in the fiscal year 2020 budget narrative are simply an indicator of line items that happened to be included based in requests that had been made for fiscal year 2020. An argument could be made that the funding requests included in the 2020 budget should not be used as precedent or used to limit the possible uses of the funds in future. In addition to the funding of general administrative and contractual services that further the mission of Affordable Housing in Bozeman, it is suggested that the following criteria be considered when analyzing requests for the disbursement of funds from this account, to include monies received from cash-in-lieu payments under the City’s inclusionary zoning ordinance. Requests should be submitted to the Affordable Housing Manager whose responsibility it is to forward all requests to the Community Affordable Housing Advisory Board (CAHAB) for consideration. Requests forwarded to the CAHAB will be accompanied by a staff analysis and the presentation of a recommendation, the CAHAB would then make a recommendation to the City Commission for approval or denial in addition to the staff recommendation. 1. To facilitate the provision of down payment assistance and impact fee reimbursement allowed by the City’s inclusionary zoning ordinance an amount of $200,000 shall be earmarked for these purposes at the beginning of each fiscal year, if funds are available. At the discretion of the City Commission this set aside may be changed at any time when it is determined that the need for down payment assistance or impact fee reimbursement will not require these funds, or the goal of increasing affordable housing would be better served by using the funds in some other manner. 2. Low or no interest loans will be offered, if funds exist, to projects that provide or facilitate the provision of housing affordable to those making less than 80% of the area median income.  Funding would require that the property be deed restricted for the term of the loan plus five years.  Loans will be made available for not more that 50% of the total project cost.  Interest rates for general projects would be equal to the current interest rate available to the City when financing capital projects.  Non-profit and governmental agencies would not be expected to pay interest. i. Example; the owner of a house could borrow funds for an ADU at a lower than market rate and the program would get a deed restricted unit. ii. Example; HRDC could borrow money from the fund with no interest to purchase property or for construction funding.  This funding is not available to be used by builders/developers to satisfy the requirements of the City’s inclusionary zoning ordinance. 3. Grant funding may be made available, if funds exist, for low income tax credit projects or other deed restricted housing projects serving those making less than 70% of the area median income at a one to one match.  Additional funding may be made available through low-interest loans as described above. 4. Grant or loan funding will be made available, if such funds exist, for the acquisition of land to be placed in a land trust to ensure the affordability of dwelling units in perpetuity 5. Grant or loan funding will be made available, if such funds exist, for the design and / or construction of infrastructure that would provide a direct benefit to the creation of affordable housing 6. Grant or loan funding will be made available, if such funds exist, for such other projects that demonstrate a significant positive impact on the creation or preservation of affordable housing. While these criteria may appear simplistic they would allow maximum flexibility while maintaining the intent and integrity of the funds.