City of Reno
Nevada

Staff Report
7822

Staff Report (For Possible Action): Presentation, discussion, and potential direction to staff regarding the City of Reno Neighborhood Renewal Program to provide eligible low and moderate income homeowners or landlords (in CDBG/Home program target areas) financial assistance to correct hazardous external structural conditions, mitigate blight or correct building and health code violations.

Information

Department:City Manager's OfficeSponsors:
Category:Presentation

Recommendation and Proposed Motion

Recommendation:  Staff recommends Council accept the report and provide recommendations regarding the City of Reno Neighborhood Renewal Program.

 

Proposed Motion:  I move to approve staff recommendation.

Staff Report Formal Body

Summary: For presentation, discussion and City Council direction is a course of action and work plan created to move forward with the creation of the City of Reno Neighborhood Renewal Program. Many local governments throughout the nation have utilized neighborhood renewal programs to rehabilitate properties labeled as vacant, or those that constitute blight on a surrounding neighborhood and are a threat to public health, safety and welfare.

 

Background: This particular program is tied to the City’s blight fund. In May 2015, Council created a $1 million blight mitigation fund to clean up downtown and other neighborhoods throughout the City that have been maligned by vacant, derelict or run down properties. Rehabilitation efforts are part of the City’s Blight Initiative which calls for dedicated funds for the restoration or demolition of unattractive and unsafe buildings in targeted locations identified by the City. In relation, the Neighborhood Renewal Program’s goals are to maintain safe homes and attractive neighborhoods to preserve affordable housing, improve the quality of Reno’s housing stock and ensure compliance with Reno Municipal Code.

 

Discussion:  As proposed, the Neighborhood Renewal Program may be used by any eligible low and moderate income homeowner or landlord (in CDBG/Home program target areas) to correct hazardous external structural conditions, make improvements considered necessary to mitigate blight or correct building and health code violations. The City of Reno will provide funding on a case-by-case basis.  Maximum funding for each repair approved may not exceed $25,000, unless compelling reasons to exceed that amount are presented by the homeowner to the City of Reno, and accepted by the City Manager, or his or her designee. The program is to provide funds on a “first come, first serve” basis. The tentative list for eligible projects to be considered for funding currently includes:

             

·         Yard Maintenance or Repair

·         Roofing

·         Fencing

·         Exterior painting

·         Minor Interior Repairs 

·         Lateral sewer hookup (addresses public nuisances related to raw sewage by connecting targeted septic-serviced homes to City sewer service).

 

Owner Occupied Assistance

 

To be eligible for the program, an interested homeowner must complete a program application. An applicant must reside within the city and hold title to the property they are requesting assistance for. The applicant must fully accommodate and cooperate with City staff and the program administrator (to be designated by the City Manager) in an initial inspection and completion of the repairs to be eligible for assistance. The decision as to how a particular condition will be corrected will be decided in consultation with the City’s designated program manager. 

 

Interested parties must also meet income requirements, as established by the Federal Department of Housing and Urban Development (HUD). HUD considers families at 80 percent of the area median income level to be “low income” and families at 50 percent of the area median income level to be “very low income.”  In general, housing is considered affordable if it costs no more than 30 percent of a household’s income. An applicant’s household income must be at or below 80 percent of Area Median Income for their household size to be eligible for this program.

 

 

RENO, NV - 2016 ADJUSTED HOME INCOME LIMITS *

 

 

1 Person

2 Persons

3 Persons

4 Persons

5 Persons

6 Persons

7 Persons

8 Persons

30% Limits

$14,000

$16,000

$18,000

$20,000

$21,600

$23,200

$24,800

$26,400

 

50% Limits

$23,350

$26,650

$30,000

$33,300

$36,000

$38,650

$41,300

$44,000

 

60% Limits

$28,020

$31,980

$36,000

$39,960

$43,200

$46,380

$49,560

$52,800

 

80% Limits

$37,350

$42,650

$48,000

$53,300

$57,600

$61,850

$66,100

$70,400

 

 

*Income Limits Subject to Change in 2017 HUD Update

 

If selected for an improvement project after application review and inspection of their property, a homeowner must sign a lien for the amount of the repair cost to be funded by the City of Reno before any work will be completed. The forgivable lien will be:

 

·         Reduced by one third per year and fully removed after three years for projects funded at $0 to $10,000; and

·         Reduced by one fifth per year and fully removed after five years for projects funded at $10,000 to $25,000.

 

 

 

Landlord Rental Repair

 

Neighborhood Renewal Program funds will also be made available to landlords who satisfy certain criteria. Funds will be made available to restore and improve the quality of small rental properties. This program will enable those landlords, if selected, to offer rental housing at affordable rates to low-to-moderate income households. Those properties in blighted areas will be given preference. Maximum funding for each repair approved may not exceed $25,000, unless compelling reasons to exceed that amount are presented by the landlord to the City of Reno, and accepted by the City Manager, or his or her designee.

 

Basic eligibility criteria include:

 

1.      Properties must have 25 units or less.

2.      Owner will have to certify that the property will be used for year-long rental housing and not as a second home or seasonal rental property.

3.      Units must be rented to low and moderate income households after project completion.

4.      Rents may not exceed 30 percent of monthly income for a household earning 80 percent or less of the Area Median Income, unless approved by the City Manager.

5.      Tenant income information must be provided to the Program for review and approval.

 

If selected for an improvement project after application review and inspection of a rental property, a landlord must sign a lien for the amount of the repair cost to be funded by the City of Reno before any work will be completed. The forgivable lien will be:

·         Reduced by one third per year and fully removed after three years for projects funded at $0 to $10,000; and

·         Reduced by one fifth per year and fully removed after five years for projects funded at $10,000 to $25,000.

Also, to be eligible for funding, landlords must agree to a temporary freeze on rent increases, which will also be determined by the amount of funding awarded. The temporary rent freeze will be for:

·         Three years for projects funded at $0 to $10,000; and

·         Five years for projects funded at $10,000 to $25,000.

Staff recommends implementing a temporary rent freeze so that improvements made to rental properties (with Neighborhood Renewal funds) don’t encourage landlords to raise rent prices. If a landlord agrees to these terms, but decides to raise rent prices during the three or five year rent freeze period, the entire amount awarded must be paid back to the City at the time such a raise in rent has been discovered. In conclusion, making funds available to rental properties in CDBG/Home program targeted areas improves the quality of housing in these areas and keeps low income families housed.

 

Program Work Plan

In an effort to complete the work that has been identified, staff will assign projects based on the level of expertise and qualifications needed to complete each project. Staff has identified options for potential partners.

Licensed Contractors – The City could partner with licensed contractors as certified through the Nevada State Contractors Board. Qualification for a contractor’s license is determined by written management and trade examinations, extensive and detailed investigation of the applicant’s qualifications, background, ability, experience, competence, general character and established proof of financial responsibility. The qualifications process provides some assurance to the Board and to the public that a licensee is competent and qualified at the time of initial licensure. Contractors must demonstrate proof of insurance as part of obtaining a trade license or registering in a majority of states. Liability insurance covers property damage and bodily injury caused by that contractor’s work. By using licensed contractors to complete the more complex projects, such as exterior painting and roof repair or replacement, the City limits liability for any future problems that may arise as a result of work being completed as part of the program. The primary outreach with the industry will be through the existing Statements of Qualifications Form currently used by the Public Works Department.  

Nonprofit Organizations – The City could also partner with local nonprofit organizations to complete neighborhood renewal projects in blighted areas. Cities throughout the U.S. allocate general fund dollars to nonprofits or other eligible tax exempt organizations  to support programs and services the cities themselves either cannot, or do not provide due to lack of facilities, staffing or other limitations. A few cities who have committed general fund dollars to nonprofits to conduct programs are Medford, Oregon; Hollywood, Florida; and McKinney Texas.

 

Current Funds

The City’s blight fund currently has allocated $275,000 to this project.  The following allocation of funds is proposed for the program.

 

$225,000 – Set aside for contractors and/or non-profit organizations to complete assigned projects

$50,000 – Set aside for in-house administrative costs and overhead

 

Financial Implications:  Funds are available to be spent out of the Blight Fund.

 

Legal Implications:  None.

Meeting History

Feb 22, 2017 12:00 PM Video Reno City Council & Redevelopment Agency Board Joint Regular

Tillery Williams, Management Analyst, presented the staff report.

Council Member Brekhus requested that staff look into some Community Development Block Grant (CDBG) eligibility criteria for this.

Council Member McKenzie requested that staff look to some of the non-profit organizations in town to create partnerships to help stretch the funds for this.

The Council upheld the staff recommendation.

RESULT:APPROVED [UNANIMOUS]
MOVER:Oscar Delgado, Councilmember
SECONDER:Paul McKenzie, Councilmember
AYES:Hillary Schieve, Jenny Brekhus, Naomi Duerr, Oscar Delgado, Paul McKenzie, Neoma Jardon, David Bobzien