HomeMy WebLinkAboutItem 16- CDBG Substantial Fiscal Year 2023 Amend AGENDA ITEM SUMMARY Meeting Date: 2/20/2024
Meeting Type: Regular Meeting
Staff Contact/Dept.: Erin Fifield / DPW
Staff Phone No: 726-2302
Estimated Time: 5 Minutes
S P R I N G F I E L D
C I T Y C O U N C I L
Council Goals: Encourage Economic
Development and
Revitalization through
Community Partnerships
ITEM TITLE: COMMUNITY DEVELOPMENT BLOCK GRANT SUBSTANTIAL FISCAL
YEAR 2023 AMENDMENT
ACTION
REQUESTED:
Approve the substantial amendment of the Community Development Block Grant
Fiscal Year 2023 Annual Action Plan to reallocate $117,548 toward the Springfield
Homeownership Program.
ISSUE
STATEMENT:
The Springfield Homeownership Program (SHOP) provides downpayment
assistance to assist low-income households in purchasing a home here in
Springfield. Since the City revamped the Program in 2022, we have seen a greater
demand and use for these funds., Since March 2023 we have completed six loans
and then had to pause the program due to limited funds available.
This substantial amendment would reallocate funds in the City’s Fiscal Year 2023
Community Development Block Grant Annual Action Plan away from the strategy
of “Increasing the Supply of Affordable Housing” and instead toward this strategy
of homeownership assistance, allowing SHOP to continue to offer loans for
homeownership to low-income households.
ATTACHMENTS: 1. Council Briefing Memo
DISCUSSION/
FINANCIAL
IMPACT:
The City has not been spending the CDBG funds allocated for land acquisition;
instead, the City has been focused on using $1.5 million in federal American
Rescue Plan Act (ARPA) funds that are available to put toward acquiring land for
affordable housing. These ARPA funds are a more flexible source of funds than
CDBG funds, allowing the City to more quickly purchase land in this housing
market.
The City has spent nearly all of the allocated funding toward “Provide down
payment assistance for home ownership” through SHOP in just 6 months. The City
had $136,010 allocated toward SHOP beginning July 1, 2023. From July –
December 2023, the City awarded 4 loans for homeownership assistance to low-
income households. Each loan awarded was for the full amount of $25,000
available per household. The program currently has less than $24,000 available.
Reallocating $117,548 funds toward SHOP would allow another 4-5 low-income
households to receive homeownership assistance, while still allowing the City to
pursue land acquisition for affordable housing through the use of ARPA funds.
M E M O R A N D U M City of Springfield
Date: 2/20/2024
To: Nancy Newton COUNCIL
From: Jeff Paschall, Community Development Division
Director
Erin Fifield, Community Development Analyst
BRIEFING
Subject: COMMUNITY DEVELOPMENT BLOCK
GRANT SUBSTANTIAL AMENDMENT
MEMORANDUM
ISSUE: The Springfield Homeownership Program (SHOP) provides downpayment assistance to
assist low-income households in purchasing a home here in Springfield. Since the City
revamped the Program in 2022, we have seen a greater demand and use for these funds. Since
March 2023, we have completed six loans and then had to pause the program due to limited
funds available.
This substantial amendment would reallocate funds in the City’s Fiscal Year 2023 Community
Development Block Grant Annual Action Plan away from the strategy of “Increasing the Supply
of Affordable Housing” and instead toward this strategy of homeownership assistance, allowing
the SHOP program to continue to offer loans for homeownership to low-income households.
COUNCIL GOALS/
MANDATE:
Encourage Economic Development and Revitalization through Community Partnerships
BACKGROUND: <Extended discussion>
The City’s Springfield Homeownership Program (SHOP) is currently paused due to its recent
success; limited CDBG funds remain for low-income homebuyers in Springfield.
Springfield Home Ownership Program –
The City’s Springfield Homeownership Program (SHOP) has been operating for years, using
federal funds to assist low-income households in buying a home here in Springfield. The
program offers a 0% interest deferred loan, due upon sale or transfer of the property. In 2015 –
due to federal rules changes – the City began to use Community Development Block Grant
(CDBG) funds in place of federal HOME funding for the same program. The program was
offering 0% interest deferred loans up to $7,000. While the City did distribute a few loans from
2017 – 2019, no loans were administered in 2020 and 2021 due to the changing housing market
as low-income households had difficulty finding houses that were affordable, even with the
City’s assistance.
With Council’s direction, the program was revamped in 2022, increasing the downpayment
assistance (including closing costs and other eligible expenses) available to low-income
homebuyers through 0% interest deferred loans up to $25,000. Since March 2023, the City has
distributed six (6) loans to low-income households, allowing them to purchase a home here in
Springfield.
Attachment 1
Page 1 of 3
MEMORANDUM 2/15/2024 Page 2
With that success, the City has spent nearly all of its allocated funding for this program and
currently has less than $24,000 available for the program.
The City’s land acquisition program for affordable housing has also been successful in using
non-CDBG funds, leaving other CDBG allocated funds untouched.
The City has $117,548 in CDBG funds allocated for land acquisition through the strategy
“Increasing the Supply of Affordable Housing.” However, the federal rules around using CDBG
funds to buy land require an environmental review process that takes months, making the City
less competitive when negotiating with property owners.
Recently, the City was awarded $1.5 million in federal American Rescue Plan Act (ARPA)
funds that are available to put toward acquiring land for affordable housing. These ARPA funds
are a more flexible source of funds than CDBG funds, allowing the City to more quickly
purchase land in this housing market.
The City just recently purchased a piece of property at 1566 Main Street with ARPA funds;
leaving just under $1 million remaining to purchase additional properties.
City staff does not currently have a plan for how to spend the $117,548 in CDBG funds for land
acquisition, given the ARPA funds available.
A proposed Substantial Amendment to prior year CDBG Action Plans was publicized and went
through a public process for consideration.
As part of the Citizen Participation Plan through the Eugene-Springfield Consolidated Plan,
there are procedures to follow when the City is considering amending a CDBG Action Plan. As
part of our substantial amendment process:
• The City published a legal notice in the Register Guard that the City was considering a
reallocation of funds from one Strategy to another
• The substantial amendment was made public on the SpringfieldOregonSpeaks website
for 30 days for the public to comment.
o Mike Koivula, prior member of the CDAC and former liaison from the Planning
Commission, wrote in support of the efforts of the City to reallocate these funds
to the SHOP program in order to assist some people with needed housing.
• The CDAC held a public hearing on February 7th to consider any public comment on the
proposed changes.
o No one spoke during the public hearing.
The CDAC recommends Council substantially amend the Fiscal Year 2023 CDBG Annual
Action Plan, reallocating funds toward the City’s downpayment assistance program.
The CDAC voted in favor of recommending that Council substantially amend the Fiscal Year
2023 CDBG Annual Action Plan in order to reallocate funds toward the Springfield
Homeownership Program.
Attachment 1
Page 2 of 3
MEMORANDUM 2/15/2024 Page 3
Prior
Year
Action
Plan
Amount
to be
Amended
Prior Year Allocated
Strategy
Proposed Amendment
FY 2023 $117,548 Increase the supply of
affordable housing
Reallocate funds from this strategy
to the strategy “Provide
downpayment assistance for
homeownership”
Reallocating $117,548 funds toward the Springfield Homeownership Program would allow
another 4-5 low-income households to receive homeownership assistance, while still allowing
the City to pursue land acquisition for affordable housing through the use of ARPA funds.
RECOMMENDED ACTION: Approve the Community Development Advisory Committee’s
recommendation to substantially amend the Community Development Block Grant Fiscal Year
2023 Annual Action Plan to reallocate $107,548 toward the Springfield Homeownership
Program.
Attachment 1
Page 3 of 3