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HomeMy WebLinkAboutItem 01- Land Acquisition for Affordable Housing Update AGENDA ITEM SUMMARY Meeting Date: 6/17/2024 Meeting Type: Work Session Staff Contact/Dept.: Katie Carroll/DPW Erin Fifield/DPW Staff Phone No: 541-726-3660 Estimated Time: 10 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: Promote and Enhance our Hometown Feel while Focusing on Livability and Environmental Quality ITEM TITLE: LAND ACQUISITION FOR AFFORDABLE HOUSING UPDATE ACTION REQUESTED: Information only. ISSUE STATEMENT: The City recognizes there is a need for more housing that is affordable in the community and is working to address this need through the Springfield Housing Strategy, first developed in 2017. One strategy City Council has directed staff to work on is acquiring or helping developers acquire land for development with income-qualified housing to serve households with low incomes. ATTACHMENTS: 1. Council Briefing Memo DISCUSSION/ FINANCIAL IMPACT: Staff has been searching for land to acquire for development with income-qualified housing to serve households with low incomes as part of the City’s Housing Strategy. So far, the City has acquired three properties. Staff will provide Council with updates on its plans for making the three City- owned properties available for development with income-qualified housing. The City received federal American Rescue Plan Act funds via an intergovernmental agreement with Lane County for land acquisition which it has used to acquire property. The City has also taken ownership of tax-foreclosed properties from the County for a nominal fee for purposes of developing income- qualified housing. M E M O R A N D U M City of Springfield Date: 6/17/2024 To: Nancy Newton COUNCIL From: Katie Carroll, Housing Analyst Erin Fifield, Community Development Analyst Jeff Paschall, Community Development Director BRIEFING Subject: Land Acquisition for Affordable Housing Update MEMORANDUM ISSUE: The City recognizes there is a need for more housing that is affordable in the community and is working to address this need through the Springfield Housing Strategy, first developed in 2017. One strategy City Council has directed staff to work on is acquiring or helping developers acquire land for development with income-qualified housing to serve households with low incomes. COUNCIL GOALS/ MANDATE: Promote and Enhance our Hometown Feel While Focusing on Livability and Environmental Quality BACKGROUND: Staff has been searching for land to acquire for development with income-qualified housing to serve households with low incomes as part of the City’s Housing Strategy. The City received $1.5 million in federal American Rescue Plan Act (ARPA) funds through an intergovernmental agreement with Lane County for this purpose and has been searching for land for approximately one year. So far, the City has acquired three properties and has approximately $900,000 in ARPA funds remaining. In the Council’s April 15th work session, staff recommended making the remaining ARPA funds (which must be spent by December 2025) available to developers to purchase land through a forgivable loan program. Staff will return to Council in its July 1st regular session with revised program guidelines and a resolution for the Council’s consideration. CITY-OWNED SITES UPDATE: Staff is focused on making the three City-owned sites available for development. A webpage at https://springfield-or.gov/land-acquisition/ has been created to share information and updates on the City’s land acquisition efforts and City-owned properties. Laura Street The Laura Street property is a .17-acre R-1 zoned property that is currently developed with an uninhabitable house. The Council has directed staff to pair the property with federal HOME Investment Partnership Program – American Rescue Plan Act (HOME-ARP) funding and to require four units of income-qualified rental housing to be built. The property and HOME-ARP funding will be awarded to a developer through a competitive request for proposal (RFP) process run by the City of Eugene on behalf of the Eugene-Springfield HOME Consortium. The RFP is anticipated to open later this summer and close late fall. In preparation for the RFP, the City of Eugene is conducting the required federal environmental review of the site. Once the review is complete, the uninhabitable house on the property can be razed and the site can be prepared for development. MEMORANDUM 6/13/2024 Page 2 Staff held a neighborhood meeting on April 18th to share information about the City’s plans for the site and to answer questions. Community members interested in updates on the property can sign up to be on a mailing list. Staff is planning to hold another neighborhood meeting with developers interested in applying for the RFP before proposals are due. 16th Street & Main Street The property at 16th Street and Main Street is a vacant 1.1-acre lot which is split-zoned Community Commercial (CC) and R-1. Given the size of the site and the permitted density, staff believes it is most suited for apartment-style income-qualified rental housing. As rents will need to be kept below market rate in order for the cost of housing to be affordable to low-income households, the project will require significant subsidy. City staff met with staff from the Oregon Housing and Community Services (OHCS) Department in April to learn more about OHCS’s new process for awarding funds for income- qualified housing development and to determine if the 16th Street and Main Street site meets OHCS’s location criteria requirements to receive funding. OHCS confirmed the site is suitable for its funding. Staff’s experience with past projects is that OHCS funding will only cover a portion of needed development funding, and there is most often a need for local funding to help cover the gap in financing. Staff believe the best way to ensure that a project on this property is successful is to pair the site with the City’s HOME funds, and award both the site and the funds to a developer as part of the City’s annual HOME RFP process. The most recent HOME RFP process in 2022 awarded about $2.2 million in HOME funds to Cornerstone Community Housing’s Springfield Apartments proposal which is expected to cost at least $12 million and will be partially funded by OHCS. Currently, Springfield has an estimated $750,000 in HOME funds available to award to a developer along with the property. S. 52nd Street The S. 52nd Street site is a vacant .25-acre property zoned R-1 that Council has directed staff to award to a developer to build four to five units of income-qualified homeownership housing. The City does not have any construction funding to pair with income-qualified homeownership projects but does have other resources that could be accessed, including the Springfield Homeownership Program (SHOP) for downpayment assistance and Low-Income System Development Charge Waiver for Homeownership (currently set to expire December 2025). Staff have prioritized making the other two City-owned sites available for development and hope to identify a process for awarding the S. 52nd St. site to a developer later this year. RECOMMENDED ACTION: Information only.