Neighborhood Stabilization Program

1. “The Power of Community” Neighborhood Stabilization Program

2. Today’s Presentation • Background Information • State Neighborhood Stabilization Program • Program Strategies • Citizen Participation and Outreach • Application Timeline • Bid Documents for Related Services • Other Related Efforts

3. “The Power of Community” Background Information

4. Federal Legislation • Housing and Economic Recovery Act, 2008 • Signed by President Bush on July 30, 2008 • Allocated $3.92 billion through Community Development Block Grants (CDBG) for Neighborhood Stabilization Program (NSP) to state and local governments • American Recovery and Reinvestment Act • Additional $2 billion for NSP

5. Purpose • Reduce Bank-Owned Inventory • Stabilize Home Values and Neighborhoods • Get Families/Individuals into Homes • Benefit Qualified Families/Individuals • As Soon As Possible • NOT Foreclosure Prevention Program

6. State Allocation • State of Florida was allocated $91 million • Must benefit qualified families/individuals • 25% to benefit low-income persons/families • Identified 26 communities for funding, including the City of Palm Coast • Allocations Identified for the City • Regular Allocation = $2,177,980 • Supplemental Allocation = $486,923

7. Income Definitions • AMI = Area Median Income • Low-Income = Less than 50% AMI • Qualified Families/Individuals = Less than 120% AMI

8. Palm Coast Targeted • Number of Foreclosures 2006-2008 2,053 foreclosures of 21,382 mortgages = 9.6% • High Unemployment Rate = 8.3% (11.7%) • High Cost Mortgages 2006-2008 = 26.5% • Decline in Home Prices 2006-2008 = 21.1% Department of Housing and Urban Development, November 2008

10. Foreclosures

11. Foreclosures

12. “The Power of Community” State Neighborhood Stabilization Program

13. State NSP Program • Activities can be carried out through contracts with private/public/not-for-profit (competitive process) • Funds must be Obligated within 10-18 months • Incentive Based Set-Aside • Program Income Returned to State • Monitoring and Reporting • Long-Term Affordability • Compliance with Federal/State Laws • Environmental • Uniform Relocation Act • Fair Housing Act • Davis Bacon • Conflict of Interest • Regular vs. Supplemental Allocation

14. Eligible NSP Strategies • Acquisition, Rehabilitation, and Resell • Housing Finance Assistance • Establishing Land Banks • Demolition and Clearance/Housing Redevelopment • Acquisition, Rehabilitation, and Lease to Low Income Individuals/Families

15. Acquisition/Rehabilitation/Resell to Individuals/Families • Minimum 15% Purchase Discount • Rehabilitation must meet federal/state/local codes and be “green” • Benefit Qualified Individuals/Families • Credit Worthy • Less than 120% AMI • Undergo Housing Counseling • Maintain Long-Term Affordability

16. Housing Finance Assistance • Down-Payment Assistance and/or Gap Financing for Foreclosures • Benefit Qualified Individuals/Families • Credit Worthy • Less than 120% AMI • Undergo Housing Counseling • Maintain Long-Term Affordability

17. Example $80,000 Foreclosed Home Purchase + $40,000 Rehabilitation Costs $120,000 Total Investment in Property $90,000 Buyer Traditional Mortgage $30,000 Housing Finance Assistance • Soft Second Mortgage • 0% Interest Rate, 10% Forgiven/Yr.

18. Establishing Land Banks • No more than 10% of Regular Allocation Funds (Measured Statewide) • Establish Land Bank Strategic Plan • Maintenance Issues • Land Bank must obligate property within 10 years for NSP Activity • Does not address foreclosed homes

19. Demolition and Clearance/Housing Redevelopment • No more than 5% of Regular Allocation Funds (Measured Statewide) • Must be foreclosed and blighted (SR 100 Community Redevelopment Area only area found to be blighted) • Must replace any home demolished

20. Acquisition/Rehabilitation/Lease to Individuals/Families • If pursued, Supplemental Allocation must be used for this Strategy ($486,923) • Minimum 15% Purchase Discount • Rehabilitation must meet federal/state/local codes and be “green” • Benefit Low-Income Individuals/Families • Maintain Long-Term Affordability

21. Discussion of NSP Strategies • Acquisition, Rehabilitation, and Resell • Housing Finance Assistance • Establishing Land Banks • Demolition and Clearance/Housing Redevelopment • Acquisition, Rehabilitation, and Lease to Low Income Individuals/Families

22. Citizen Participation • A Citizens Advisory Task Force (CATF) is required to review and provide input on the Local Housing Assistance Plan (LHAP) for NSP • Options • Appoint Current City Advisory Board • Appoint Flagler County Affordable Housing Board • Accept Applications to Fill the Task Force • City Council approves final LHAP • Numerous Public Workshops

23. Application Timeline • February 25, 2009 – Public Workshop • March 9 - 13, 2009 – CATF Meetings • March 13, 2009 – Draft Application/LHAP • March 14 – 30 – Public Comment Period • March 31, 2009 – City Council Workshop and Special Meeting • April 6, 2009 – Application Due to State

24. “The Power of Community” Bid Document for Related Services

25. Bid Document Overview • Services to Implement Program • No Local Preference Allowed (Prohibited by Federal and State Guidelines) • May Bid on One or More Services • Each Bid for Service will be Evaluated Individually • Ranking/Contract will be Forwarded to City Council for Final Approval

26. Bid Document Services • Program Management Consultant • Property Developers • Appraisal and Valuation Services • Title & Closing Services • Environmental Engineers • Construction Management • Rental Developers • Rental Property Management • Housing Counselors • Builders/Contractors

27. “The Power of Community” Other Related Efforts

28. Other Related Efforts • Interlocal Agreement with Flagler County • Draft completed, finalizing language • Anticipated March/April adoption consideration • International Property Maintenance Code • New 2009 version available in March • Anticipated April/May adoption consideration • Foreclosure Registration and Maintenance Ordinance • Includes requirements for banks to designate local agent, registration fee, inspections, and citations • Pending state legislation that may preempt local regulations • Anticipated April/May adoption consideration • Researching how to roll code fines into annual property special tax assessments (City Attorney)

29. “The Power of Community”