AHAC Minutes 11/15/2011 November 15,2011
MINUTES OF THE COLLIER COUNTY
AFFORDABLE HOUSING ADVISORY COMMITTEE
MEETING
RECEIVED November 15, 2011
JAN 0 9 2012 Naples, Florida
Board of County Commissioners
LET IT BE REMEMBERED that the Collier County Affordable Housing Advisory
Committee, having conducted business herein, met on this date at 3:00 PM in
REGULAR SESSION in Administrative Building "F," 3rd Floor, of the Government
Complex, Naples, Florida, with the following Members present:
Fiala
I
Hiller
Henning 1111: CHAIRMAN: Stephen Hruby
Coyle �.�. Vice Chair: Cormac Giblin
Coletta SG John Cowan
Christian Davis
Michael Diamond
Patricia Fortune
Christine Jones (Excused)
Misc.Comes. Bradley Schiffer
Date: 1\2 Stuart Warshauer
Clyde Quinby
Item
Copies to (Vacancy—Alternate)
ALSO PRESENT: Kim Grant, Interim Director—Housing, Human& Veteran Services
Frank("Buddy")Ramsey, Operations Analyst
Priscilla Doria, SHIP Loan Processor—Staff Liaison
Margo Castorena, Grants Operations Manager
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November 15,2011
1. CALL TO ORDER—CHAIRMAN:
Chairman Steve Hruby called the meeting to order at 3:00 PM and read the procedures to
be observed during the informal meeting.
2. ROLL CALL:
Roll call was taken.
A quorum was not established. Nine members were present.
3. AGENDA AND MINUTES—CHAIRMAN:
a. Approval of Agenda
John Cowan moved to approve the Agenda as submitted Second by Vice Chairman
Giblin. Motion carried, 9—0.
b. Approval of Minutes—September 12,2011
Christian Davis moved to approve the Minutes as submitted. Second by Patricia
Fortune. Carried unanimously, 6—0.
(Note: Only the members who were present at the September 12th meeting could approve
the Minutes. Stuart Warshauer, Michael Diamond, and Clyde Quinby could not vote.)
c. Approval of Minutes—October 10,2011
Due to Members' concerns regarding format,the Minutes were tabled and would be
reviewed at the December meeting.
(Scrivener's Note:
• The October AHAC meeting can be referred to as a"meeting"because members
responded to a previously-issued call to assemble on a specified day and time.
• The document produced remains the written record of the proceedings which took
place and are referred to as the "minutes."
• The cover page was amended to reflect the status of the meeting.)
4. INFORMATION ITEMS—STAFF:
a. Welcome to New Members—Chairman
• Michael S. Diamond, representing"engaged in labor of home building"
• Clyde C. Quinby, representing"real estate professional"
b. Consolidated Annual Performance and Evaluation Report(CAPER)—Margo Castorena
(The report is available at http://www.colliergov.net/Index.aspx?page=105).
Background:
• Fiscal Year: 2010-2011
• Entitlement Grants
o Community Development Block Grant("CDBG")
o HOME Initiative Partnership Program("HOME")
o Emergency Shelter Grant ("ESG")
• CAPER is part of the Five-Year Consolidated Plan and the 1-Year Action Plan
o Reviews goals and outlines results
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November 15,2011
• Funds received: $3,376,051
• Expended: $2,329,249.70
• Timeliness (burn rate)was met
• Report was posted on the County's website
o Copies are available at the public libraries, at the front desk of the HHVS
office, and at the County's Communication Department
• Public comment period(15 days)closed on November 14,2011
• Draft report was submitted to the Board of County Commissioners
o Presentation of Final Report—December 13,2011 meeting
• Submission Deadline: HUD must receive on or before December 29,2011
Activities—Allocation of Funds:
• Rehabilitation—$444,772
• Acquisition, demolition/clearance—$615,740
• Public Facilities—$339,709
• Public Service—$526,625
• ESG—$82,575
Margo Castorena explained the figures reflect the projects that were completed during
the 2010-2011 reporting period. She noted some of the projects were begun in other
Action Plan years.
Projects Highlights:
• Housing—
o One person was assisted under ADI ("American Dream Initiative")Program
o One single-family house was renovated
o 185 houses were closed at Habitat for Humanity's "Regal Acres"
• Homeless—
o St. Matthew's Shelter received an Emergency Shelter Grant
o Meals for Seniors (10,005 were provided)
o Legal services were provided to abused women and children
o Salaries for psychiatrists at the David Lawrence Center
o Counseling
o Utilities assistance
• Community Development—
o City of Naples
• Completion of River Park
• Completion of repairs to sound system and A/C—River Park Center
Ms. Castorena noted the Five-Year Consolidated Plan will run from 2011 through 2015.
The Board of County Commissioners approved the Action Plan on July 26, 2011 and accepted
the Five-Year Consolidation Plan, a Renewed Citizen Participation Plan, and the Consultant's
Analysis of Impediments.
• No comments were received during the Public Comment Period
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November 15,2011
• The Fiscal Year conforms with the HUD and County's Fiscal Years: July 1
through September 30 (extended by 90 days)
5. PUBLIC COMMENTS:
Speaker:
Nick Kouloheras,Executive Vice President of Land Development& Construction,
Habitat for Humanity
• SHIP Program had allotted$20,000 in down payment assistance per household
• Habitat received approximately$3M per year
o $20,000 per unit for 150 units
• The County reduced the amount of assistance to a 3:1 ratio
o $3,000 per unit for 150 units
• Habitat requires a down payment of$1,000 from eligible buyers
He stated increasing the dollar amount of the assistance would help to keep the home as
affordable as possible, i.e. 20%of purchase price.
Frank Ramsey noted the in previous years,the County capped the allocation at 15%of the
home's purchase price.
• The current program offers at 3 to 1 match,with a maximum of 4%of the purchase
price.
6. DISCUSSION ITEMS AND PRESENTATIONS: STAFF
a. SHIP Down Payment Assistance Policy
Kim Grant stated:
• Habitat for Humanity is a key partner in the SHIP Program
• A re-reconciliation was completed concerning several years of financial
statements for the SHIP Program
• Approximately$1.9M from previous program years is available
• Approval from the State to spend the funds is anticipated but has not yet been
received
• A presentation has been prepared and will be made to the BCC at the December 13th
meeting if State approval is received
• Goal: to obtain recommendations from AHAC to present to the BCC
Frank Ramsey provided background information on the SHIP Program:
• Established in 1992 ("William E. Sadowski Affordable Housing Act")
• Funding is provided through a document stamp tax on real estate transactions
o Dedicated revenue stream
• Assistance to Counties—provide for the housing needs of very low, low, and
moderate income families
• To obtain funds, a Local Housing Assistance Plan("LHAP") is presented to the
State after approval by the Board of County Commissioners
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November 15,2011
Down Payment/Closing Cost Assistance Program ("Purchase Assistance Program"):
• State allows a maximum award of up to $50,000 per recipient
• Collier County policy: 3 to 1 match, up to 4%of the purchase price,whichever is
less
• Assistance Awards:
o 1996 through 2002 - $2,500 for down payment assistance/closing costs
o 2003 - $5,000 per applicant
o 2005 - $10,000
o 2006 through 2008 - 15%of the purchase price(Average: $22,500)
• Maximum purchase price: $300,000
• November 2008 to present: average is$3,000 per applicant
• The Board of County Commissioners reduced the award amount(November 2008)
in response to lower home prices in the depressed housing market
• Approximately$1.9M must be expended by June 30, 2012
o The State could recall the funds
• The County received a SHIP allocation of$435,000 for 2011-2012
• Statutory set aside/compliance requirements from the State:
o 75%-new construction/rehab
o 65%-home ownership
o 30%-very low income households
o 30%- low income households
o 10%- administration
• State revised rules—allocation for new construction will not be not permitted(future)
• Decreased in lender participation
• Florida Housing Coalition provides technical assistance to SHIP recipients
o Recommendation: increase assistance to a maximum of 20—25%of
purchase price
Other LHAP strategies:
• Rehabilitation
• Disaster relief
• Special needs housing
Mr. Ramsey noted HUD's definition of"expended"means an eligible individual is
occupying an eligible property. Down payment assistance is one option that assures
immediate occupancy.
He stated the Housing Trust Fund cap was repealed in 2010,but the balance in the Fund
is minimal.
The funds may be accessed by:
• directly apply to Housing,Human and Veteran Services for assistance (either the
client or the client's banker/mortgage broker) or
• if the County issues a Request for Proposals ("RFP").
Kim Grant stated there were requirements to spend the funds within a specific period of
time after receipt. The reconciliation identified money that should have been spent 3 to 5
years ago. The spending deadline is June 2012.
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November 15,2011
Patricia Fortune asked what could be done to make the SHIP application more friendly
to the banks that have apparently discouraged participation by their clients.
Frank Ramsey stated, as a former banker, if his efforts resulted in his clients obtaining
$22,000 in down payment assistance,then it was"worth it." When only$3,000 is
available, it was not worth the effort.
He noted the SHIP Program is paperwork and time intensive. Income is underwritten
differently than a bank,resulting in different interpretations. For example, a bank
examines what a client actually earned during the past two years and average the amount.
The SHIP Program examines what the client made to date and project anticipated income
for the next twelve months.
He continued there had been an active loan consortium of local lenders and bank that met
on a regular basis. The group no longer meets due to lack of interest.
Ms. Fortune suggested one way to meet the deadline would be to raise the down payment
assistance cap. She asked if it would be proposed to the BCC.
Vice Chairman Giblin noted the amount, after subtracting the allotment for administrative
services,was approximately$1.7M. He asked if it was feasible to spend the funds by the
deadline even if the cap were increased to $20,000 per household because 85 houses would
have to be sold.
Frank Ramsey asked the Committee if it believed increasing the down payment assistance
award amount would be a possible solution. He also asked if a portion should be reserved
for the banks to access and a portion reserved for non-profit partners.
Christian Davis asked if the $1.9M were expended by June,would the County still receive
the $400,000 and would the amount be replenished.
Mr. Ramsey stated the County receives money on a yearly basis which must be spent
within three years after receipt of the funds.
Chairman Hruby noted there is a greater need for significant down payment assistance
even though housing prices are much less than during 2006—2008 because it is more
difficult to obtain a mortgage due to restrictions. Qualification standards have become more
stringent.
Frank Ramsey stated an FHA mortgage requires a down payment of 3%of the purchase
price but the client must buy the FHA's mortgage insurance policy which increases the
mortgage payment. With 20%down,there is no requirement for mortgage insurance and
the client would be eligible for the best possible rate with the lowest monthly payment.
Christian Davis suggested encouraging the participation of non-profit providers might be
the best way to ensure the money was disbursed by the deadline rather than the County
overseeing distribution of the funds.
Mr. Ramsey explained part of the process was for the County's clients to complete eight
hours of home buyers education.
When asked about how the mortgage assistance was secure, he explained a deferred
payment,zero interest, second mortgage is held by the County and is paid off only when
the refinanced or property is sold. The recaptured funds have contributed to the $1.9M.
It was noted the Florida Housing Coalition recommended increasing the down payment
and closing cost assistance to between 20 to 25%of the purchase price.
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November 15,2011
Chairman Hruby asked the Committee members if they were in favor of increasing the
down payment assistance award in some form.
Consensus: Yes.
He outlined the issues:
• utilizing one flat method of allocation,or
• treating non-profits differently than individual recipients who would obtain
conventional financing.
Question: Do we want to one set of standards for everyone or do we want to sub-allocate
to the non-profits versus an open market?
John Cowan asked if there would be a different time line for the non-profits to expend
the funds? He suggested it would take longer to advertise and qualify individual
recipients while it might be faster to give the money to the non-profits.
Frank Ramsey confirmed the spending deadline will remain the same.
Chairman Hruby pointed out the County will receive $400,000 in additional SHIP
funds during 2012 which has a 3-year timeline to expend. He suggested utilizing those
funds specifically for the general public.
Mr. Ramsey clarified the Committee could recommend allocating a special portion of
the funds to the non-profits which would handle applicant selection, income qualification,
and placement into homes.
Vice Chairman Giblin stated the County's RFP process (Requests for Production)of
soliciting bids from non-profits is lengthy. He expressed concern that it would take too
long as opposed to making a policy decision to open the program to all applicants
including Habitat for Humanity.
Patricia Fortune agreed and stated there was an opportunity to open the program to
lenders as well.
Mr. Ramsey cautioned that HUD has advised against mixing funds from Federal with
non-Federal programs. The SHIP Program was designed to be flexible,but if NSP funds
were used,the more restrictive Federal guidelines would apply.
Chairman Hruby summarized the Committee's position: To open the program to all
applicants, including non-profits, as a level playing field.
Christian Davis suggested reviewing the program in June prior to determining how to
allocate the additional SHIP funding.
Bradley Schiffer reminded the Committee the current SHIP Program I open to all
applicants—it was not necessary to change it.
Chairman Hruby asked if a limit should be imposed and to what amount?
Christian Davis noted if the total amount of down payment money was supplied through
a SHIP allocation, buyers might not qualify for a mortgage since they had not invested
any of their own funds.
Kim Grant responded all buyers are required to contribute a minimum down payment of
$1,000. She stated the Committee could consider increasing that amount or changing the
ratio.
Frank Ramsey explained lenders are concerned about the "loan to value"ratio—the
appraised value of the house versus the amount being mortgaged. Since the SHIP award
is a zero percent, deferred payment loan,most lenders are not viewing it as a"risk."
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November 15,2011
When questioned about the trends in default or foreclosures, he stated the only factor
common to buyers who received assistance in 1998 and those in 2002 was the loss of
employment.
John Cowan requested the Habitat representative present additional information
specifically on its ability to obligate the funds by the deadline.
Speaker:
Nick Kouloheras,Executive Vice President of Land Development& Construction,
Habitat for Humanity
• Habitat's Fiscal Year runs from June to July
• Using the 20%down payment as a working example, Habitat would need to close
on 61 homes between December 2011 and June 30,2012.
• Habitat's plan is to close on 100 homes during its Fiscal Year and has closed on
25 homes to date.
• He stated if Habitat for Humanity was the sole non-profit requesting the funds, it
could place families in the homes by the SHIP deadline.
• He encouraged the Committee to open up the process. He stated he could walk in
by the end of the calendar year with 20 applications.
• Habitat has a subdivision with 184 lots that have been plotted and the
infrastructure is ready. The only requirement is to pull building permits.
• Habitat concentrates on new construction and rehabilitation of foreclosed homes
with a ratio of approximately 50/50.
• If Habitat received the award, additional staff would be hired to handle the
workload.
• He noted Habitat's new build time is approximately six weeks. Rehabbed homes
average approximately 6 to 8 weeks.
• Average sales price: $135,000 to $140,000
Chairman Hruby suggested modifying the 20%with a cap.
Frank Ramsey stated the maximum purchase price allowed under the current Local
Housing Assistance Plan("LHAP") is $300,000. The maximum award is $50,000.
Twenty percent on a$300,000 purchase price would exceed the maximum award. He
noted the Technical Assistance provider suggested a ceiling on the award. The L-HAP
that applies to the funds was from 2007—08. He stated a maximum award of$50,000
does not mean that it must be awarded in all cases—it merely provides flexibility. The
Committee could establish a maximum sales price and maximum award that reflect the
current market.
Christian Davis stated he would support a$150,000 maximum purchase price with a
maximum award of 20%--which would cap at$30,000.
Chairman Hruby moved to approve:
• Retaining the current policy which makes grants available to everyone,
• To increase the award to 20%, not to exceed$30,000,
• The policy will apply solely to the$1.9M in SHIP Funds, and
• To review the policy in May with regard to the$400,000 allocation.
The motion was carried unanimously.
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November 15,2011
Staff will present the Committee's recommendation to the BCC on December 13,2011.
b. Affordable Workforce Housing Units—To define figures/percentages
Kim Grant noted during the October meeting,Michele Mosca, Comprehensive Planning,
gave a presentation concerning the EAR-based("Evaluation and Appraisal Report")
Amendments to the Growth Management Plan. One issue was to determine the correct
amount affordable housing units within the Plan. Ms. Mosca has asked the Committee to
review the information and make a recommendation to be presented to the Planning
Commission. ("Housing Element")
Frank Ramsey reviewed the draft language of the Land Development Code's Housing
Element portion of the Growth Management Plan:
• Goal One: "To create an adequate supply of decent, safe, sanitary, and
affordable housing."
o The prior measure: "We shall increase by at least 15%of the units
approved to be built in the County but not less than 1,000 units per year,
averaged over a five-year period."
He stated many organizations have stated the goal is no longer appropriate in the current
housing market.
Vice Chairman Giblin asked if a home that sold for$600,000 in 2006 and was now in
foreclosure for$200,000, would the property be considered a"new" affordable housing
unit.
Mr. Ramsey stated one of the issues was how to define affordable units—as"restricted"
with policies in place to ensure the property remains affordable or to define"affordable"
in relation to the market. He stated the Goal applied to new construction units that were
approved to be built and sought to increase the number of affordable units.
Bradley Schiffer noted since the figures were never tracked, it is not known exactly how
many affordable units were actually built. The intent of the Growth Management Plan
was to create affordable units during a time when none existed. The Affordable
Workforce market consisted of individuals who worked as teachers,nurses,police, and
fire fighters.
Frank Ramsey stated tracking began in 2006 at the PUD approval level. When a PUD
was approved, it was noted how many units were designated as"affordable workforce"or
"gap"housing. The figures were not audited.
Chairman Hruby stated while lots may have been designated,until a house was built
and a family was living in it, it was not a"affordable housing unit." He noted tracking
may have inflated the numbers and 15%may never have been achieved.
Mr. Ramsey researched the issue and found the County approved 4,200 "workforce"
units to be built, but only 728 units were actually built.
Chairman Hruby stated the market drives the numbers. He suggested eliminating Goal
One.
Vice Chairman Giblin stated six years ago,the DCA requested tracking and measurable
goals. He contended the goal of building affordable housing has remained the same.
Bradley Schiffer suggested the Committee should have more time to review the topic.
Frank Ramsey will provide a copy of Staff's full report and analysis to the Committee
members for their review.
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November 15,2011
Consensus: The topic will be tabled and reviewed during the December meeting.
c. Status: Subcommittee meeting-NSP Options
Bradley Schiffer stated the Subcommittee met several times.
• The Subcommittee recommended turning the operation of the NSP over to an
experienced for-profit developer.
• An RFP would be issued by the County and a Scope of Work will be devised.
• The NSP-3 Funds have been frozen but will be used to help fund the remainder of
the Program, i.e., complete the remodeling of the houses in stock, new properties
will not be purchased.
• Staff will still be required to monitor the project but the day-to-day operation will
be in the hands of the developer.
He suggested distributing the draft of the Subcommittee's minutes to the entire AHAC.
Kim Grant suggested publicly noticing a Subcommittee meeting to be held during the
last week of November. She stated the Subcommittee's final recommendation will be
presented to AHAC on December 12 and to the BCC on December 13.
Consensus: The Subcommittee meeting will be held on November 30th from 10:00 AM
to 12:00 Noon.
7. STAFF/COMMITTEE MEMBERS: GENERAL COMMENTS
(None)
NEXT MEETING: Monday,December 12,2011 at 3:00 PM
There being no further business for the good of the County,the meeting adjourned at
4:51 PM by order of the Chairman.
Collier County Affordable Housing
AKi-s-c-4 Committee
Ste•a r • , I I I airman
The foregoing Minutes were approved by Board/Committee Chair on Diie, )1 , 2011,
"as submitted" OR "as amended" [ 1.
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