268526 WH17E - CITV CLERK
PINK - FINANCE G I TY OF SA I NT PA iT L Council
BLUERV - MAVORTMENT . . F11E NO. � �',�'���r����
y ou i Resolution
Presented By
Referred To Committee: Date
Out of Committee By Date
WHEREAS, The Council of the City of Saint Paul has established
a housing rehabilitation loan and grant program for owner-occupied
residential property primarily for persons of low and moderate
income pursuant to authority granted to the City of Saint Paul by
the I�4innesota State Legislature, and in conformity with Laws of
Minnesota for 1974, Chapter 351; and
WHEREAS, The Housing and Redevelopment Authority of the City
of Saint Paul, Minnesota, pursuant to the authority granted to it
by the Minnesota State Legislature, l�Zinnesota Statutes Section
462.445, subdivision 9 , has adopted a rehabilitation loan program
for residential property not owned by the occupants, the residential
property be intended for occupancy primarily by persons of low and
moderate income; and
WHEREAS, The Federal Housing and Community Development Act of
1974 /Public Law 93-3837, as amended, permits the expenditure of
Community Development funds for rehabilitation of buildings and
improvements privately owned through the direct use of funds in
the provision of grants, loans, l.oan guarantees and interest
supplements when provided in connection with other physical
development activities described in the City' s community develop-
ment program also eligible for assistance under the Act; and
WHEREAS, The City is authorized by Minnesota Statutes,
Section 462.581 (9) to aid and cooperate with the Housing and Re-
development Authority in the operation of the Authority' s projects
and to furnish funds to the Authority from any source to be used
by the Authority for its activities authorized by Minnesota
Statutes, Section 462. 445, subdivision 9; and
WHEREAS, The Housing and Redevelopment Authority has adopted
"Guidelines for the Community Development Non-owner Occupied
COUNCILMEN
Yeas Nays Requested by Department of:
Butler
j Hozza In Favor � , � z�
Hunt ���,���
Levine _ Against BY
Roedler
Sylvester
Tedesco
Form Approved by ity Attorney
Adopted by C ouncil: Date
Certified Passed by Council Secretary BY
By,
Approved by iVlayor: Date App o e by Mayor for Su iss n to Gpuncil
By BY
M�HITE - CITV CLERK ^ � F�
PINK - FINANCE
i
CANARV - DEPARTMENT � G I TY OF SA I NT PALT L COl1I1C11 •��'{ Q�' ?._•�
BLUE - MAYOR �`
File N 0.
' - Council Resolution
Presented By
Referred To Committee: Date
Out of Committee By Date
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Resi:dential Property Rehabilitation Program" , and has requested
approval to these guidelines by the City Council; and
WHEREAS, The City Council approved Community Development
Year II Program and Budget contains an allocation of funds for
the Housing Authority' s non-owner occupied residential rehabili-
tation loan program; now, therefore, be it
RESOLVED, That the Council of the City of Saint Paul does
hereby approve the Housing and Redevelopment Authority of the
City of Saint Paul' s "Guidelines" for rehabilitation loans for
non-owner occupied housing, and continues to authorize the
expenditure of Community Development Year II funds for this
program consistent with the applicable Federal laws and regulations,
and State laws pertaining thereto.
COUNCILMEN Requested by Department of:
Yeas Nays
Butler � �n Favor
Hozza
Hunt `i'(./ .�i�,.c�� - ���
Levine �__ Against BY
Roedler
Sylvester
Tedesco FEg S 197T
Form Approved by ity Attorney
Adopted ouncil: Date
Cer ied Passed Cou .il Se retary BY
f
Appr by Mayor: at ��B � � 1S Approved by Mayor for Submission to Council
By BY
PUBLISNED �EB � 2 1977
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INTRODUCTION
The following are proposed guidelines for the Communitq Development
Year II non-owner occupied property rehabilitation program. The guidelines
were developed by the ad hoc housing task force after months of discussion.
Also, a small survey of landlords living in ITA's was conducted and their
input was considered in drafting the guidelines.
In reviewing the guidelines several points should be kept in mind.
First of all, all loans under this program are governed primarily by the
�existing guidelines for the City rehabilitation loan aad grant program.
Because so many provisions of those guidelines are incorporated into this
program the guideliaes for the non-owner occupied program are much shorter.
� Secondly, the proposed program ia different from the present City
program in two major respects. In this regard, the proposed program calls
for total code compliance as a condition for receiving a loan. The reason for
this is not only because of the requirements of the City Code, but because
Minn. Stat. 504.18 states in essence that all residential rental property shall
be fit for the purpose intended; in a state of reasonable repair; and in
compliance with all applicable codes. Because this state law affords these
rights to all teaants, it was felt to be inappropriate to allow public funds
to be used in situations where landlords would not agree to comply with the
law.
Also, the proposed guidelines call for limits on rent increases for
5 years after the rehabilitation loan is made. These limits would be imposed
as part of the rehabilitation loan agreement and would in effect a1Zow the
landlord to raise rents when reasonable and necessary expenses so indicate.
The reason for this approach is because the primary thrust or purpose of the
program is not only to fix up buildings, but is to provide on a reasonable
basis for the future housing of low and moderate income persons without
penalizing tenants living in the building at the time of rehabilitation. Also,
landlords are receivi.ng a public benefit under the program in terms of interest
rates and the period of time for repayment and this implies public responsibility.
Finally, the CD legislation itself requires that CD money be spent primarily
��-'��`��
INTRO�UCTION
for the benefit of low and moderate income persons
WhiZe there were mixed feelings concerning limits on rent increases,
on balance the task force decided to recommend trying this approach. If it
serves as a significant obstacle to the accomplishment of the program purposes,
these limits could obviously be removed at a �ater time.
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' GUIDELINES FOA THE CITY OF SAINT PAUL REHABILITATION
NON-OWNER OCC;JpIED PROPERTY REHABILITATION LOAN
PROGRA.M .
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I. APPLICATION OF CONCEPT AND GUIDELINES
Except as otherwise provided herein, the terms and conditions of
all City rehabilitation loans made under this Program shall be subject to and
� governed by the provisions standards and definitions set forth in the "City
of Saint Paul Rehabilita�ion Loan and Grant program Concept and Guidelines"
(hereinafter referred to as "Concept and Guidelines"), as adopted by City
Council Resolution 264b30, as amended. Provided however, if an applicant under
this Yrogram is eligible for a City rehabilitation loan or grant under the C�Lty
rehabilitation loan and grant program, as that Cerm is defined and used in the
Concept and Guidelines, his or her application shall be processed under the City
rehabilitatioa loan and grant program and the loan and/or grant shal.l be made
under that program. � �
II. ELIGZBLE LANDLORDS
A. To be eligib].e for a City rehabilitation loan applicants must be
persons or a legal entity. For purposes of these guidelines legal entity includes
a partnership, corporation, cooperative or other entity which is the £ee owner or
contract for deed purchaser of the eligible pro�erty.
B. Applicants must be able to demonstrate inabil.ity to affard and
secure rehabilitation funds from other sources. This dete�nination sha7.1 be based
on statements of rejection from at least 3 private lenders, at least one of whom
. shall be a Title T lender under the Minnesota Housing Finance Agency Program.
In additioa the Authori.ty shall, after an examination of the applicant's income,
assets, and other relevant resources, determine if the applicant is unable to
afford and secure rehabilitation funds from other sources.
iII. ELYGIBLE PROPERTIES
A. Properta.es must be located 9.n Intensified Treatment Areas (ITA's}
as recognized by City Council Resolution as part of the Community Development
Block Grant Program under the "Housing and Communzty Dzvelopment Act of Z976!'
(Public La;a 93-383) which has not reach�d "Completion" under tt2e pertinent City
Council Resolution; or must be required to be repaired, inproved or rehabilitated
pursuant to order of the St. Paul CorJmunity Services Housi.ng CocIe Inspection
Department or Court Order.
B. Properties cannot contain more than 16 dwelling units.
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IV.. ELIGIBLE IMPROVEMENTS AND EXPENDITLT�ES �y
�, $ringing an eligible propert� into compliance with applicable codes
shall be required as a condition to making the loan.
B. As a condition for receiving the City Rehabilitation laan, the
eligible property shall be inspected by the Authority in conjunctian with the
Community Service Division of Housing and Building Code Enforcement for •the . .
purposes set forth in item � 3 of the "EZigible Improvements and Expenditures"
Section of the City Rehabilitation Concept and Guidelines. This evaluation
� and inspection shall be a mechanism which will require the applicant. to bring
the property into full code compliance. The inspection shall occur only after
the Authority has deter�ined that the applicant has the abi.lity to afford a �
City rehabilitation Ioan.
V. REHABILITATION I,OAY AND GRANT TERMS
A. The interest rate of a City rehabilitation loan sha1Z be determined
by applying the "adjusted gross annual household income"�`categories, as set forth
in the Concept and Guidelines, to the income of the eligib.le loan recipient,
provided however, when the recipient is a legal entity the "upper intexest loan •
moderate income" category as set forth in the Concept and Guidelines shall agply.
B. Income shall be determined in accordance with the provisi.ons of
the Concept and Guidelines. In additon, gross rental income from property to
be rehabilftated and other real estate, minus cerCain property expenses all
determit�ed in accordanee with the provisions of Section 312 of tha Housing Aet
of 1964, as acaended and implementing rules, regulations and guidelines, shall be
considered.
C. The maximum amount of a City rehabilitation loan except ��z tne case
of refinancing shall be the Iesser of and not exceed:
1. $12,000 per dwelling unit in accordance wi.th the provisions of
Section 312 of the Housing Act of 1954, as amended and implementing rules,
regulations and guidelittes.
2. The actual cost of the eligible ir,rprovement work.
3. An acaount which, when added to o�her debts sec�ared by the eligible
property, wou2d not exceed the after rehabilitationraartcet value o� eligible
property plus the percentage authorized pursuant to the pxovisions and Che
formula specified in Section 312 of the Housin� Act of 1964, as amended and
impler:ienting rules, regulations and guidelines.
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QI. AFTER REHABILITAiTION REiTTAL CN.�RGES
A. Each loan and graat recipient will be required to write a letter to
the Authority, prior to final approval of the loan application, indicating Ch�ir
intent to comply with the spirit of the Goals, Ohjectives and Intent for the
• Non-Owner Occupied Residential Rehabilitation program, dated September 29, 1976.
Upon the finding by HRA staff that there is sufficient evidence to justify
a complaint that a loan recipient is va.�olatino the intent to keep rental
incr�ases ta a minimum, the loan recipient must submit to arbitration o£ this
matter. The Mayor of the City of Saint Paul shall designate three persons
to arbitrate such matters and make recommendations to the rlayor and City
Council for resolution of the pro�lems. Acceptanee of this provision by
the loan recipient would be a condition of the loan for a five (5) year . '
period. �
NON•OWNEB OCCUPIED BESIDBNTIAL REHABILZTATION PROGRAM
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.��GOALS OB,IECTIVES AND INTENT
The fol2owing are the primary goals and objectives of the program:
1. To provide rehabilitated housing which is free of a11 housing code viol.ations,
ats specified by the City.
2. To provide housi�t� resources that include other amenities, through rehab�litation
such as adequate landscaping, parking, etc.
3. To provide adequate housing for low and moderate income persons at the lowast,
feasible economic rental rates.
4. To upgrade the quality of housing and related facilities in designated geographic
areas by partzcipating in the overall efforts of the city-wide rehabi.litation
program.
5. To upgrade, repair and thereafter maintain the existing multi�fanily housing
.:::�::>�:
stock in desigttated areas of Che City. .
6. To complete rehabilitation of dwelling units without causing displacement
of the tenants, whenever feasible.
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