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AHAC Subcommittee 10/15/2024The Affordable Housing Advisory Sub-Committee met on October 15,2024 at 9:00 A.M. at the Growth Management Community Development Department at 2800 N. Horseshoe Dr., Naples, FL 34104 in Conference Rooms 6091610, with the following members present: VICE CHAIR:Jennifer Faron (present virtually) Mary Waller Hannah Roberts Paul Shea Catherine M. Myers ALSO PRESENT: Cormac Giblin, Director, Housing Policy & Economic Development Priscilla Doria, Ops Support Specialist II, Housing Policy & Economic Development Derek D. Perry, Assistant County Attorney, County Attorney's Offrce Lisa Weinmann, Manager-Grants, Community & Human Services Division Any persons in need of the verbatim record of the meeting may reqaest a copy of the audio recordingfrom the Collier County Growth Management Department. 1. CALL TO ORDER & PLEDGE OFALLEGIAI\CE . Mary Waller selected as Chair of the Sub-Committee by unanimous decision of the committee o Meeting was called to order by Mary Waller and Pledge ofAllegiance was recited. 2. ROLL CALL OF COMMMITTEE MEMBERS AND STAFF Roll call was taken and quorum was established Page 1 of8 October 15, 2024 _ AHAC Su b-Com m ittee Meeti ng M in utes MINUTES OF TIIE COLLIER COUNTY AFT'ORDABLE HOUSING ADVISORY SUB.COMI\fi TTEE MEETING 3.APPROVAL OF AGENDA AND MINUTES a. Approval to today's agenda There were no changes to the agenda. Approved as presented INFORMATION ITEMS AND PRESENTATIONS Cormac Giblin: Item 6a, tenant pay increase. PUBLIC COMMENT a. Persons wishing to speak must be registered prior to speaking. All registered speakers will receive up to (3) minutes unless the time is adjusted by the Chairman. DISCUSSION ITEMS a. Tenants Pay Increase Cormac Giblin explains: . Over the last few years, staff has been contacted about rental developments with income restricted units, and when a tenant gets a raise that takes them above and over the iimit for that income restricted unit. The difference between market rate and the affordable rate is often much greater than the difference they receive from their raise. This has some people contemplating whether it is worth keeping the aJfordabie rent and rejecting the raise in pay, or keeping the raise and attempting to find a market rate apartrnent. Several apartrnent complexes are trying to navigate this issue. DSAC liaison proposed solution: In the event that a tenant, who qualifies to lease a unit at the Low (80% or below) income threshold or the Median (100% or below) income threshold, experiences an increase in income during a lease term, such that the tenant no longer qualifies to lease the unit under the applicable income restrictions, said tenant may remain in the unit until such time as the tenant's income exceeds the next level of income threshold (100% or below and 120% or below, as applicable). This Policy does not apply in the event that the tenant's change in income is the result ofi (1) a change in employment; (2) a change in marital status; or (3) additional income from sources other than the tenant's current employer. Jennifer Faron: Do you have an idea of how many buildings are affected and how many units within those buildings? What is the population of the issue? 4. 5. 6. Page 2 of 8 October 15,2024 _AHAC Sub-Committee Meeting Minutes o Cormac Giblin: We are only talking about units that are restricted through a PUD commitment. All other approved affordable housing structues have their own method for dealing with tenant income. o Jennifer Faron: How many instances do we have right now, of quali$ing rmits where this is an issue? o Cormac Giblin: Staffreceives 2 calls a month regarding this issue. o Hannah Roberts: Clarifies further that it's 2 units per month and 24 units per year. o MaryWaller: Adds that a policy works for everyone, not just for any one or two units. So it would apply to every one ofthose 4,500 units. r Cormac Giblin: We're trying to lay some groundwork for when more and more units are built, in anticipation that the same issue will arise at that time. o Mary Waller: The purpose of establishing policy is to have something to explain to each individual when they go to rent a unit. This way thy know when thy go into a unit that this is the policy . Once there's a problem it's almost too late to create a policy because there is already a problem. This is to stop the future problem. o Hannah Roberts: Cormac can you talk about certification process. How often is that happening? Whose responsibility is it? What is the landlords responsibility to report back to the county? . Cormac Giblin: Once a PUD is approved the units are rented in accordance with their restrictions. On the annual anniversary ofthat approval they must submit an annual PUD report and a report on how the units are occupied. The landlord is responsible for documenting income for each qualifting tenant. They look at Page 3 of 8 October 15,2024 _AHAC Sub-Committee Meeting Minutes paystubs, verification of employment. They do a full income workup on each household. It's pit into a report and tumed over to the Communif and Human Resources Monitoring Team. The team then can do a random sampling for additional testing. The developers are wanting to do the best they can to document income, and remain on the right side ofthings. They are not traditional affordable housing developers. They are private market rate developers who are trying to address the county need and doing it the best they can. Ifthey were traditional affordable housing developers they would have an entire team ofpeople who know how to income qualifu. There are different degrees ofrestrictions depending on where the assistance is coming fiom. Ifthe assistance is from HUD it is very prescribed, very black and white. If they are getting assistance from the state it's a little bit looser. If they're getting assistance from a loca1 level it is up to us to decide. Paul Shea: What numbers of units fall into other affordable housing? Is it the same amount? Cormac Giblin: It is close to 1,000 Hannah Roberts: In a typical PUD, do we speciS to the developer that they need to collect pay information, or is it up to the developer? Cornac Giblin: It is up to them. They just have to certifu on move-in and once a year. Staffalso came up with a suggestion that is a bit different. Staff Suggestion - Affordable Housing Rental Unit Tenant Grace Period o Each tenant r giver. a 12 month grace period once they are found to be out of compliance during a yearly monitoring. This gives each tenant at least 12 months (and as many as 23 months) notice that their lease would not be renewed at discounted rate. Page 4 of 8 october 15,2024 _AHAC Sub-Committee Meeting Minutes Something that could simplifu it filther is basing it on a tenant's tax filing and the bottom line income. This could also add more time to each tenant as a result ofthe date of filing. o Jennifer Faron: I would like to hear from Lisa regarding monitoring, implementation and also what Cormac just stated about using income tax retums as the foundation for proving income. o Lisa Weinmann: It would certainly be more streamline, but it does increase the gap in eamings. All these things arejust a refection ofa point in time. It doesn't necessarily mean where you are going to be, moving forward. Pafi of the rent calculations is, are you able to afford moving forward. . Paul Shea: Who knows who is living in the unit? How do you monitor the who is living in the unit, and accounted for? o Lisa Weinmann: The lease typically mentions and provides the names of the people allowed to live in the unit. . Cormac Giblin: In the code of laws is our deferral section. Here you can see that you are allowed to exceed the income by about 40%. We don't see this very often. We are looking for consensus on how we should deal with this moving forward. We still have an affordability crisis in Collier County and these units are more needed than ever. So the developments are required to rent at 8070 or less. . Paul Shea: The person that just got this 3% raise is at a bigger crisis than the one who will be moving in because they are jumping into a much bigger rent category. I think you have to have some kind of leeway. You can't have an on and off switch in the system because then you're swapping one problem for another. You haven't helped anybody and you've hurt the family that has been living in the unit. Page 5 of 8 october 15, 2024_AHAC Sub-Committee Meeting Minutes MaryWaller: There's an evaluations that happens once a year and you find that the tenant in over. Not by much, but they are over that. So you give them the 12 months to move. What happens if the AMI is increased to the point where that tenant is now below? Cormac Giblin: That would be good for them. They are always reviewed according to the current AMI, at the time of monitoring. Jennifer F aron: I am also of the beliefthat the units are to be viewed as a springboard into market rate housing. That's how I feel about the very low income projects that are funded with low income tax credits. I don't think the proposal that you let people stay until they it another AMI level, is fair. I think the staff suggestion is more fair because it gives enough notification. Market mte rents are down significantly and so we ought to give people the benefit ofthe doubt that they may benefit rom decreasing rent. I would say a 12 month grace period is fair. Paul Shea: I like the staffs suggestion as well. That year gives them an oppornrnity because the AMI might go up the amount of their income. Cormac Giblin: My fear with the other suggestion wad that, after a number of years, you would just end up with 100%. o Hannah Roberts: I like the grace period approach, but the only issue is that it does create an issue. Ifyou are going give the grace period and the go back and look at the new AMI, it creates a uncetainty of the availability of that unit, and when that unit will be available. Creating a bottleneck in the process. At the same time, the people affected by this 80% level are some ofthe most stable citizens that we want to stay. Page 6 of 8 october 15,2024 _AHAC Sub-Committee Meeting Minutes Jennifer Faron: At the county level, we do need to have these units available and we do need to make it reasonable for people to come in and out of these units. We want it to be as effrcient as possible. I think using a tax retum as income verification is reasonable. MaryWaller: What if they didn't file an income tax for the previous year? Cormac Giblin: It is listed that if people did not file a tax retum, it will be calculated in a traditional manner. Cathy Myers: I favor what the staff is suggesting. The reality is that ifa teacher is getting $1,754 increase per year, after taxes that's maybe $100 per month. They'll have 12 months or maybe 24 moths depending on the date oftheir notice. It will not be enough to go to current market rate. Then there are still guidelines for that current market rate like: first month, last month, security deposit. The reality is that they are still going to be in a bind. MaryWaller: I think we should have something saying there will be a revaluation prior to the next monitoring. I think we should go forward with staffrecommendation with the adjustments. Jennifer Faron: I suggest that, in addition to the recommendation we add in there that they could use the most recently filed income tax documentation. o Hannah Roberts: Clarifies on qualification guidelines. Members discuss specific verbiage adjustments such as the use of the word "may", for clarification ofthe policy, and come to agreement on adjustments needing to be made. Page 7 of I october 15, 2024_AHAC Sub-Committee Meeting Minutes Motion to take the staff recommendations with language adjustments by Mary Wallen Second by Mr. Paul Shea Carried unanimously 5-0 7. STAFFAi\D COMMITTEE GENERAL COMMUNICATIONS None 8. NEW BUSINESS None 9. ADJOURI\ Meeting was adjourned at l0:03 A.M. by Mary Waller These minutes approved by th as presented or as amended Page 8 of 8 October 15,2024 _AHAC Sub-Committee Meeting Minutes