BURBANK REDEVELOPMENT AGENCY
Tuesday, July 20, 2004
AGENDA
CITY COUNCIL CHAMBER - 275 EAST OLIVE AVENUE
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6:30 P.M.
INVOCATION:
The Courts have concluded that sectarian prayer as part of City Council meetings is not permitted under the Constitution.
FLAG SALUTE:
ROLL CALL:
CONSENT CALENDAR: (Items 1 and 2)
The following items may be enacted by one motion. There will be no separate discussion on these items unless a Council Member so requests, in which event the item will be removed from the consent calendar and considered in its normal sequence on the agenda. A roll call vote is required for the consent calendar.
Approval of minutes for the regular meetings of April 6, April 20, April 27, May 4, May 11, May 25, June 1, June 8 and June 15, 2004.
Recommendation:
Approve as submitted.
2. AMendment to the Redevelopment Agency�s Residential Rehabilitation Program:
The purpose of this report is to present proposed amendments to the Redevelopment Agency�s (Agency) Residential Rehabilitation Program for Agency Board consideration.
Characteristic of many communities, the Residential Rehabilitation Program has been a component of Burbank�s efforts to preserve affordable housing and an integral element to the Agency�s affordable housing strategy. The Residential Rehabilitation Program reflects a long-standing commitment by the City and Agency to provide financial assistance to qualified homeowners and owners of apartment buildings to preserve housing by correcting Code deficiencies and making general property improvements.
Under the current Program (last updated in 1999), the Agency underwrites an active rehabilitation assistance program for private property owners. This program consists of the following components: deferred loans that provide below-market interest rates (BMIR) to lower-income owner-occupants of single-family dwellings that postpone the payment until the property is conveyed; and multi-family loans offering deferred loans that are partially forgiven at the end of the 15-year period in exchange for 25 percent of the units being affordable to lower-income households. The Agency also funds grants to very low-income owner-occupants for minor rehabilitation to single-family dwellings.
During Fiscal Year 2003-04, the Agency experienced, despite its marketing efforts, a decline in loan activity and asked its economic consultant, Keyser Marston Associates, to review the Program to identify financial modifications to enhance the Program�s marketability. The Agency�s consultant noted that many jurisdictions experienced similar difficulties in marketing rehabilitation loans for several significant reasons. Two main reasons are: 1) in today�s market, borrowers may obtain market, low-interest home equity loans from conventional lenders; and, 2) the loan amounts offered by public entities are insufficient to fund the desired scope of rehabilitation. Based on discussions with the Agency consultant, the following amendments are recommended to the Residential Rehabilitation Program:
Single-Family Rehabilitation
1. Increase the maximum loan amount from $25,000 to $35,000 and continue to allow the Agency the administrative authority to further increase loans by up to an additional 15 percent (maximum amount of $40,250).
2. Allow borrowers to make payments to their loans.
3. Allow moderate-income owners to receive a deferred loan under the same terms now available to lower-income borrowers.
Rental Rehabilitation
1. Increase the loan maximum from the current $10,000 per unit limit to $25,000.
2. Reduce the interest rate from six to three percent.
3. Expand the program to allow investment owners of single-family dwellings to participate in exchange for an occupancy and affordability covenant.
4. Make the loans deferred and forgiven gradually, so that each year the prior year�s debt service obligation (15-year amortization period) is retired. Payment of the remaining loan obligation would be triggered, though, should the project cease to meet income and affordability standards. The forgivable loan would be assumable to subsequent owners if the income and affordability restrictions were met.
5. Provide for loans to be assumable and permit current private debt to be refinanced.
Grant Program
1. In addition to using grant funds to correct health and safety deficiencies, a grant could also be used to provide accessibility improvements.
2. Increase the grant program citywide from $5,000 to $7,500.
Staff recommends that the Agency Board approve the resolution approving the amendments to the loan documents described herein, permitting the use of Agency Housing Funds outside of project areas and authorizing the Agency Executive Director or designated staff to execute all necessary agreements between the Redevelopment Agency of the City of Burbank and certain property owners relating to the Residential Rehabilitation Program.
Recommendation:
Adoption of proposed resolution entitled:
A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF BURBANK AMENDING THE AGENCY�S RESIDENTIAL REHABILITATION PROGRAM.
END OF CONSENT CALENDAR
RECESS to conclude the City Council meeting.
ADJOURNMENT.