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266751 . ' - CITV CLERK COI�I1C11 ��S'751 _:,,,,� �E I T F S A I N T PA LT L File N O. I - ��EPARTM . � I . d n�nce rd��a �q s� , Presented By r ,� ; Referred o ' Committeie: ate i , Out of Committee By Date �,n Administrative Ordinance , Adopted Pursuant to Chapter 260 of the Laws of Minnesota for 1�75, Promulgating Regulations for the CitX' s Housing and Rehabilitation � Finance Programs. THE COUNCTL OF THE CTTY OF SAINT PAUL DOES ORDAIN: � Section 1, The Minnesota State Legislature has �uthorized the City of Saint �aul to develop and adm�.nister programs to finance the maintenance� provision and preservation of adequate housing within the corporate limits of the City and has declared such a program as constitutisg a pub�ic gurpose. The State Legislature has determined, and the Council of the City of Saint Paul does hereby find and determine� (a� that there are many housing units in the Ca.ty that do not meet the applicable housing codes, some � o� which need to be destroyed and �ome of which can be rehabili- �,,. tatedj (b) that a need exists to replace housing which is r destroyed or demolished; (c) that a need ex�.sts for mortgage � ctedit to be made available for new constru�tion; (d) that re- financing existing mortgages will allow owners of housing units which need rehabilitation to take advantage of existing rehab- ilitation programs; (e) and that many owners, would-be purchasers or providers of housing units are either unable to afford mortgage credit at the market rate of interest or obtain mortgage credit because the mortgage credit market is severely restricted. COUIVCILMEIV Requested by Department of: Yeas Nays Christensen I-� Hunt In Favor Levine Rcedler Against BY Sylvester Tedesco President � Ho22a N Form Approved by City A o e Adopted by Council: Date i ;! Certified Passed by Council Secretary BY j � By Approved by Mayor: Date Approved by Mayor for ubmission to Council By By ' � i � ►� i '��?��, � . , . � � f � 9? ' i 5 Page 2. Sect�on 2. To acha.eve the purposes, obaect�ves a�nd goals set forth above in Section 1, the mayor shall develop �and administer a program or programs to. finance housi,ng cons�ruction and rehab- il,itat�,on �n conformance with the requireme ts set forth in Chapter 260, Laws of Minnesota for i975, a� the regulations -. promulgated by th�;s Council. The Mayor sha�l develop the City' s �� ho�ifiing finance program in such a manner that it will complement the ex�sting City Housi.ng Rehab�litation Lo�n and Grant Programs adopted by Resolution C.F. 264631 and Ordin�nce No. 15751, and amendments to such Resolution and Ordinancei The City' s housing ��inance program may include funds from all �vailable federal, state, regional and local sources, both pri�ate and public. In develop�.ng and administering these programsr the mayor sha11 coord�.nate such programs with other publicl�i aided financing programs �adm�.r�3stered by the federal, state�,, regional and local �gencies to the end that the City� may achie�ve the optimum of b�nef�,t fr�m a�`1 such programs and th� prov;ision of adequa�e, safe and h�a3tYi�u1 housing for the �.nhabitalnts of the City of _ Saint Paul. ; ' Section 3. Zn the administration of the City' s ,'housing �inance pXOgzams� the Mayor shall endeavor to make �use of existing lending institutions and staff, both from ithe private as well as the government sector. The �maXor may e�plo� all such �essary st�tf and obtain materials, supplies� equi men�'��and off��':.�pace as .�s �.n the judgment of the mayor necessa�y for the admini- �trg�fon o� the programs and wztha.n the fu�ding appropriations app�c�ed by the City Council, . . � . ; ., � = , , i s . � �' . �._ =' _ ; ' : � � . �,� ��##�� '� I � �� , , � �age 3. '� Sect�:on 4, � Sub�ect to the approyal, of the ��,ty Co�' ncil� the mayor �x ��o� the Servi.ces of the Hous�:ng and Re evelopment ��itF�ori,tg of the C�.ty of Saa.nt Pau1 and/'or th 1Kinnesota Hous�,ng F,��ance �,gency for the purpose of aid''ng in the �mplementat3on of the Ctt��s hous�ng f�,nance �;rograms to t�r� ext�nt perm�tted by 1aw,. Tf the Author�ty is Iso employed, then the. AutP�rity may be authorized by the. ma�or to exercise � any an8 alI of the powers whi.ch the Minnesota �iousing Agency is author�.zed to exercise unde� the provisions �jof Minnesota Statutes 462A �n tYle making or ;puxch�Se of Loar}s and se�ir�.�ies �n �urthe�ance of tfie progra�ms, �Levenue bonds jor other obli- gations issue� �y the Ci,ty of St1�nt Paul 5ha11 '� irst be _ authorized ar�d �pprov�d b�r the C3ty Coe�ncil and i�sued in accordance w�tth the terms and provisi,ons of app icable law or chaxtex pxovis�ons, kncluding Chapter 8�8i, Law�s' for 19fi3� a5 amended, Chapter 351, Laws for 1974, as amended� and Chapter 260, L�ws for 19'T�„ �' 5ect�.on 5* � Foz the purposes o� this ord�nance and pr�grams adopted pursuant heretor �nd unless otherw,ise herein pro�►ided, all terms and phrases u�ed shall possess the definit$ons and meanings �scr�: , �to them in the Ci.tX�s Housing l�ehaba.litation Loa.� a:nd �rant-� "'� rams establ�shed by Resolution�� C.F, 264631 and pxdi�ance Ncr; , 5751. Sect�,on 6. '�, A].1 loans i.ssued by the CitX .shall be made �,only' when it �.s ��.rst dete�m,ined that financing is not otherwisje available ; ,{ : _ . . ,L�. : < .t - _ � � r ' f i , . ... ' ,t' .. . . , .' . ��?�1��+��, . , � , �F� � 4 �, ls � ?�:°�� Page 4. �xcmg-Qr�,vate lende�rs upon te�.^ms and conditi�ns Wh,ich are affordable bx the a,pplicant. Following receipt of loan appl�.cat�';ons� the C�.ty shal� ntake a determination whether mortgage cred�.t for that type o� housing is �available from pxzvate lenders under such terms and conditi�ons which will perzn�t the bc�rrower to rent the housing uni.�s at a rate which the �naxket w�.11 be able and wi].ling to payf or �.n the case of a s�.ngle �an1z1X homef sha11 determtne that tihe monthly grincipal and interest paymertts wi11 be af�ordable by the applicant. In the event that the City shall prov�.de the h�using finance assf.stance� tfie borrower sha11 be required to repay the principal amount of the znortgage, togethez with intere�st at a rate that w3�11 be at least equal to the i,nterest rate 'tahich the City is ,rec�ua.x'ed to pay on its bonds or other obligaitions. In establish- ing mortgage repayments, the mayor shall ens�ure that the revenues receYyeci by the C�,ty are su�ficient- ta retir the principa7. and �nterest on bonds issued to f�.nance the prog ams and also to provide �or the costs of adma,nisteri.ng the m rtqages. Section 7� Foz the purpose of obtaining program funds, the mayor is author�.zed to a�plx to �ny �ed�era7.� state orr�x'eg�.onc�l agency for grant or �oan monies, �'he$ mayor shall 'e�deav'br" to obtain program funds from a�.l �o.uzces �.n addition tm the City` s bond proceeds. �11 grant axid loan fiin�di,nq: agre�nn�nts �ha�.1 be sub- mitted foa: Council approval. The Council ma� im�os� restr�.ctions on the use of such grant and loan �unds in the resolution approv- i.ng the agreement. : ' _ � Sect�,on 8. Proc��rams established by the Ma�or may '�proYide Yriortgage ��,nanc3�ng �or new con�tructa.on o� si,ngle familly housi�g, - � multi#�1e �a,m�ly housing, townhouse5, condomi iums and apu�ttt- ments, The programs may also provic�e for re�inancing of � - ,�.�;;: �:�,�. ��:.:' _ ,<:�.,,,�� . . . . 4�r.:��' . I . ' , , �''� : �� . � , ! �� s � 1 � � � � � � ��, �� Pa�e 5. � exa.st3,ng mortgages so th�t owners of housir�g units needing rehaHilitata.on �may then take advantage of �isting rehabili� " tation programs adm3nistered bx the City o other `age�cies. The programs may also prov�.de for extensionl of financ�.ng for � rehabilitation of exist�ng houszng units, �Finaneing may �be provided to the Housing and Redevelopment thority �if tY�e Catty of Saint Paul to be used by the Authority to construct housing on property owned by the Authority pf the City for gurposes o� sale, or may be used by the Aut�ority for the purpose o� rehabila.t�,ting ex3sting housing Qwned by the Autharity or the Citg, Program funds may b� used �o finan�.e acquisit3on Qf land ior housing and for con truction of housing to the extent prov�ded ,in the progr�m guic�elines adopted by the may�ox. Proeeeds receiue� -f�im the:-,��e - � of general. obligation bonds and proeeeds `frj�m the City's- general fund� i.ncluding areal estate tax 'es, �hall be used solely to prov�,de housing finance assistanc� for accupancy przm�ra.l� b,y persons of 1ow and mod�rate in�ome. When suc� g�ne�a,l o�l�gat�on or general fund pro�eed� � are to he used to f�,nance can-s�t�ruct•�on or rehabzlitati.on of m�ltip7.e h�Cising una.ts at least 60�k of i3ous3ng units shall b� occupied by persons o� low and mode�ate incotn�e. Section 9. ', { The mayor may provi.de te�pc�rary cons�ruction financing and germanent financing upon sat�.sfactory ec�mpletion of the housi�g. zn all cases of housi.ng finance a�sistance, the ma�or shall obtain a �nnortgage lien upon the �land and `improve- rnents. Tn the making of housing loans, thei�ayor shall att�pt to obtain FHA or VA insured mor�gag�s whereve�� possible. All loans made by the City shall comply with all applicable federal and state laws a�d regula{tions �ertaining thereto� including interest-rate limitations and t�ll dis- closure requirements. , , � ; j � ; � �>-�_ , � � � _ .,3 . ; , _ ' . � . • �Y�r s*- . . . . , . .� , _s ;� . . . . . . . � � �!. . . e. . . . .. �. . ? . � ,'.i'�� . , .< I � • . . �. � . - � � .. ..�J� .. . . . , . . . � ,^ . . . � { . . . . . . . � . .. . . � ' � '„ " � . _ i WHITE. - CITV CLERK . �V��J� PINK � - FINANCE GITY OF SAINT PALTL Council CAMARV +- D�PARFMENT � B4.U� „ �MAVQR . Flle NO�. ! � • �_ O/ f�/�Z/`�/`CG Ordinance N O. �� '� Presented By Referred To Committee: Date Out of Committee By Date Page 6. Section 10. The proceeds from the sale of General Qbligation Bonds and from revenue bonds issued for the programs authorized by this ordinance sha1.1 each be placed in a separate fund; monies placed in these two funds may be transferred or disbursed to a fund which will combine these sources with other sources to accomplish the City' s Hous�:ng and Rehabilitation Finance Programs; and housing finance loans and mortgage credit may be made from this combined . fund. The general obligation bonds issued und�er this ordinance may� be retired in accordance with the City' s n�ormal funding proc�ss for general obligation bonds. Revenue bonds or revenue obligations issued for these programs shall be retired solely from all of the revenue sources of the programs authorized by Chapter 260, Laws of 1975, as defined and pledged to their repay�nent and their respective bond resolutions; and a separate sinking fund shall be „r established for the accounting of the revenues� and the retirement of these revenue bonds. Section 11. Thi,s ordinance shall be deemed a part o� the Saint Paul �dmini.strative Code and shall be incorporated therein and given an appropra.ate chapter and/or section number at the time of the next revision of said Administrative Code by the City Attorney. Section 12. This ordinance shall take effect and be in force thirty �30) days �rom and after its passage, approval, and publication. COUIVCILMEN Requested by Dep�rtment of: Yeas Nays Christensen �a Hunt In Favor ' Levine Roedler � Against BY Sylvester Tedesco President I#�t HOZZ 1 Adopted by ncil: Date � � 6 �976 Form Approved by ity Att ney Certi ' d Pa y Cou ecr y BY '• Y Approv Mayor: ate � Approved or f ' si o C un �il By By Au�,ts�o i�lA 9 0197� .w.....�.. �.:..�..w. - � � .�_.. _ _ ,,_.___�......,. ...,._...__. -�-- -.- - - . , C _y�� . . __ __--- -_ ___ ______ _ � -- . . . ---___ ___ _ -� - S f 1,4YOR L.�1!�!pEr�1CF D, f�H��! .. r�,��CEI �E, 19i6 TO THE HONORNBLE P�EMBERS OF THE CITY COU�JCIL: THE 1975 MINNESOTA LEGISLATURE REORGANIZED THE NEED FOR AFFOFtDABLE HOUSING IN THE CITY OF SAINT PAUL AND AUTHORIZED US TO CREATE AND ADMINISTER A HOUSIPJG FINANCE AGENCY� WE HAVE BEEN GIVEN THE OPPORTUNITY AND AUTHQRITY TO ISSUE $2 MILLION W�RTH OF GENERAL OBLIGATION BONDS TO IMPLEMENT THIS PROGRAM� THE PROPOSED PROGRAM SHOULD STIMULATE SINGLE-FAMILY AND MULTIPLE-FAMILY HOUSING CONSTRUCTION ON PUBLICLY OWNED VACANT LAND THROUGHOUT OUR CITY� NOT ONLY WILL HOUSING BE CONSTRUCTED T!iAT WILL PROVIDE JOBS A�JD RESIDENTIAL OPPORTUNITIES, BUT WILL ALSO ADD TO THE CITY'S ECONOMIC BASE� THIS PROGRAM RECOGNIZES A PJEED TO COMPLETE CURRENT NEIGHBORHOOD REVITALIZATION PROGRAMS. VARIQUS COMMITTEES HAVE STUDIED WHAT WE NEED TO DO IN ORD�R TO I�'SURE TNAT SAINT PAUL REMAINS A VIABLE CITY� THESE STUDIES CONCLUDE TNAT THE CITY MUST PLAY A ROLE IN INSURING OPPORTUNITIES FOR PRIV�TE MARK�T HOUSIP;G D�V�LOPMENT. �ERTAINLY ONE t�F TFiE OPPORTUNITIES THAT WE HAVE IS TO HELP CREATE A VIABLE, AFFORDABLE HOUSING StJPPLY FOR OUR CITIZENS� ONE OF THE MAJOR ELEMENTS OF THE COST OF HOUSING IS FINANCING� WE HOPE THROUGH TNE PASSAGE OF THIS ORDINANCE ESTABLISHING THE SAINT PAUL HOUSING FINANCE AGENCY THAT WE WILL BE ABLE TO MAKE MORE HOUSING AFFORDABLE TO OUR CITIZENS� I RESPECTFULLY URGE THE CITY COUNCIL TO PASS THE RESOLtJTION AS PRESENTED, THANK YOU� ,, , � � � 3� '��"��. ` MEMORANDUM CITY OF SAINT PAUL OFFICE OF THE MAYOR CITY PLANNING DATE: March 1� , 1976 DONALD L. SPAID AIP PLANNING COORDINATOR TO: Edward N. Helfeld FROM: Donald L. Spaid SUBJECT: Established City Housing Policy Related To Housing Finance Agency Proposal I. INTRODUCTION The housing policies now established in Saint Paul which would be affected by the passage of the proposed ordinance focus on two different areas of need: l . Housing and economic devel.opment needs which are general to the whole city; 2. Specific needs of low and moderate-income city residents. The following summary of these established policies emphasizes policies contained in ciocuments which have been officially adopted by the Council . It also refers to recor�nendations made in other recently published documents which have direct bearing on the city's housing policies. The officially adopted documents referred to are: City-wjde RevitalizatiQn Program/initial concept (CRP) A opted: June, 1969 Corr�nunity Development (CD) Objectives and Policies ATopte�: December 30, �9� Community Development (CD) Pro ram for Im�lementation �c7opt�-�e r�uary�, TS Housing Assistance Plan HAP) �l dopt�— e ruary, T9 Housing Assistance Plan (HAP) �Cdopte : Fe ruary �5,�T� Renewal Plan opte : February 5, 1976 Other documents referred to are: Economic Polic Overview of St. Paul �'The Hammer Report") : October 3 , 975 Housin Cha ter: Metro olitan Develo ent Guide ("Metropolitan Housing Guide" : June, 1973 421 Wabasha Street, Saint Paul, Minnesota 55102 (612)-298-4151 �o Edward N. Helfeld - 2 - : March 11 , 1976 Metro olitan Allocation Plan for Subsidized Housin ("The ocation an : opte y e ropo an ounc on January 8, 1976 Saint Paul Po ulation Chan e: Challen e and 0 ortunit The Migration Study' : July, 1975 II. HOUSING POLICIES DEALING WITH NEEDS WHICH ARE GENERAL TO THE WHOLE CITY A. Encoura e the Develo ment of Housin Which will Serve to Diversif t e Socioeconomic C aracteristics of t e �t s Neigh orhoo s This policy is stated as an objective in the Redevelopment Plan: • To provide for the development of new housing. . .which will maximize housing opportunities for citizens of all income levels particularly in areas where opportunities have heretofore been limited (p. 2. See also P. 12). 6. Provide New Housing for Middle-and Upper-Income people The 1975 Housin Assistance Plan favored market-rate construction "for t e m� e an ig er-income population. . .wherever the potential exists." (p. 26) The Cit -wide Revitalization Pro ram also encoura ed the expansion of ine �um-to ig -income ousing wit in the city �p. 41). The "Hamner Report" (pp. 47, 52, 53) , the "Migration Study" (p . 5, 17) and the "Metropolitan Housing Guide" (pp. 34, 35, 52� also stress the critical importance to Saint Paul 's overal] economic stability of providing new non-subsidized housing wherever possible in the city. The Housing Guide specifically encourages provision of such housing in redevelopment areas. C. Preserve Sin,qle-Family Development Where it is Established The Redevelo ment Plari (]976) clearly supports this policy in the c�ty s I entifie Treatment Areas. � Edward N. Helfeld - 3 - March 11 , 1976 Buttressing this policy are recent findings made by Metropolitan Council which show an extranely strong preference fpr a single- family home in a sjngle-fami]y neighborhood among residents of all parts of the metropolitan area. (Attitude Survey, February 1975. ) D. Redevelo Vacant Land Where it is Exertin an Adverse Influence Upon t e Surroun �ng eig or o0 This policy is expressed as an "urban renewal technique" to be used to achieve the objectives of the Redeveloi�nent Plan. �P• 8) E. Maximize Leveraging of Private Investment with Public Funds Policy D of the Comnunity Development Objectives and Policies reads: Develop administrative and planning capability to leverage and integrate other public and private sources of funds with Community Development funds wherever• possible (p. 3). This policy is also stated in the Communit,� Develo�ment Pro ram for Im lementation (p. 1 ) and in t e Hamner Report pp. , 6 -67, 76, 100- 02). The "Migration Study" also places a great deal of emphasis on the need for closer public sector/private sector cooperation to meet development and redevelopment needs in the city. F. Establish Greater Local Control Over the Process of Financin ee e New Housing The City-wide Revitalization Program stated in 1969 that it was proper and necessary for local governments to take a more active role in finding solutions to their housing problems. The Community Development Block Grant Program is, of course, based on precisely this premise. III. HOUSING POLICIES DEALING WITH SPECIFIC NEEDS OF LOW AND MODERATE-INCOME CITY RESIDENTS A. Increase Housin Location Choice for Low-and Moderate-Income ity House o s Edward N. Melfeld - 4 - March 11 , 1976 The 1976 Housin Assistance Plan places priority for the construction of new su si3izecT�iousing on areas of the city which now cantain little subsidized housing and few iower incane households (pp. 12-17). 6. Expand Opportunities for Homeownershi_p One of the urban renewal techniques cited in the Redevelo ment Plan is the encouragement of homeownership ". . .particu ar y�or . families of low and moderate incomes." (p. 9) The Cit -wide Revitalization Pro ram also states and supports this po icy at some engt , ca �ng omeownership a boon both to individuals and to the city as a whole. One policy statement reads: , Saint Paul will ensure that all residentia] areas of the City will have the capability to qualify for mortgage and home loan financing (p. 41). C. Increase the Supply of Low-and Moderate-Income Housing Resources The primary objective of the Housing and Community Development Act of 1974 includes the development of decent housing, . ."principally for persons of low and moderate income." (P. 1 , Introduction, Communit Develo ment -- A Pro ram for the Revitalization of the City of Saint Paul . The Redevelo ment Plan also addresses this issue with recommended renewal tec niques �ncluding "house recycling" of properties which are infeasible for current owners to rehabilitate and properties which are underutilized by current (usually e7derly) residents. The 1975 and 1976 Housing Assistance Plans state the city's exact objectives for the expansion of its subsidized housing supply, through rent subsidies in existing and new units. D. Encourage Private Sector Involvement in Meeting the Housin9 Needs of Lower-income Persons This policy was stated in the 1975 Housing Assistance Plan. E. Increase the Quality of Existing Housing for Lower-income Persons The 1975 and 1976 HAP's both include objectives for and discussion of needed financial assistance for rehabilitation in the city. Edward N. Helfeld SUN�IARY AND COMMENT March 11 , 1976 If the housing finance agency functions as proposed, it will contribute to the realizations of a number of the city's housing objectives including: - expansion of the range of housing choice in city neighborhoods. - new housing resources for middle-income households. - preservation of single-family residential areas. - development of presently vacant land. - stimulation of private investment. - increased public/private cooperation. � - increased choice for lower-income househo1ds. - increased home ownership opportunities. - increased housing resources for low and moderate income households. - improved quality of existing housing. The finance agency appears to provide a significant opportunity for a more active, joint public/private effort to meet the development needs which effect the city's neighborhoods and housing resources. It is particularly consistent with the directions suggested by the most recent discussions of housing policy needs such as the Hamner Study and the Migration Comnittee Report for this reason and because it would be supportive of an improved private housing market. In multi-family development realized through the agency, it will be important to consider the relationship of income mix in a proposed project to the population characteristics of the community to ensure that the policies of increased locational choice for lower income households and of housing opportunities which provide for a broad income mix in city neighborhoods are furthered. � . , , .it , ,� �, .i , . . \ 7+-' j � ,� �y ' ..i , . . � S' �.^� �� i g�.� ;�, ti � . � ,_ . .. •? �t � 4 r.' td�,k'.�. � � � � 1 �� :a'� , � . ^ � � � ,. . - / { , � r aA� 3 � � .7 � . ' . .. •y�. ��. 1 � � , ' k , ��. ` ,:�;. �i.�. Z..�. -.�� .. � � . � . �_'. ,.: � . �p� 1i . °� , � ,h > . . . ` . 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C .y �' �'d . r . %' F��:� s s f: ,�'•��J � .i � j �� k 1 l d j p ^ �.t'! 4 '�' � � .� � .� a �y,�t�,7�a K s �� r. �:'4 !-�.l ,� ' t t i � t � g y�ir � d Y � q . �: � ^XS �'�` ..4 ��'F � ! ';� A' �� x �� Y �1 : i . �� '-. �, ' k ` � t � ��/� H t f 1 � k '� � * y.k r �, ,I � 4� } + �. < �. �a h=`� .. _ �_ . . , . . , , x_ �,_S v _ ��. ' ....` ..} n �'� � �' � �.�. *� , . . .�: z. �.._P , , .- � . s.� GITY OF SA�IE MAP $UL � ��►�,�`� - •�rme ises OFFIGE OF s�es:s��e LAWREN(;E D. COHEN �IAYOE FEBRUARY 4 , 1976 T0: COUNCIL PRESIDENT DAVID H. HOZZA CITY COUNCIL MEMBERS �"""�' FR: MAYOR LAWRENCE D. COHEN -� .._.:-:.:-. _._�__:�-�,.,._ RE: SAINT PAUL' S HOUSING FINANCE AGENCY I am transmitting to you for Council review and approval, an Administrative Ordinance and program concept that will establish the City of Saint Paul' s Housing Finance Agency. As you are aware, the 1975 Minnesota Legislature has authorized the Cityo uf Saint Paul to develop and administer such a program. The proposed program initially attempts to stimulate single-family and multi-family housing construction on publicly-owned vacant land throughout the City. As a result of the strategy, not only will housing be constructed that will provide jobs and residential opportunities, but will also add to the City' s economic base. To finance the program, it is proposed that the City sell revenue bonds and that the program be administered by the Housing and Redevelopment Authority. However, we recognize that the City acting alone cannot effectively stimulate the housing market. Therefore, the participation of the private mortgage lenders is an integral part of this program. Lender participation is fully discussed in the Loan to Lenders section of the program concept. The introduction of the Ordinance and program concept is the beginning step to implement this program. The remaining actions required to facili- tate prompt implementation for program operation are outlined in the attached program concept. Thus, to utilize this program during the construction season, I would urge that this proposal be reviewed as soon as possible by the Council. To assist you in reviewing this program, staff of the Administration and HRA are available to meet with you to further explain the program. Thank you for your cooperation in this program which will aid in the development of Saint Paul. CC: Thomas J. Kelley Edward N. Helfeld Attachment 22 �' -`?�,�\ �i�i'�^�.� ��S.T��' �=i'�...1'1� ,'� r;` �� O�•'FI�_� Ui T:i�.: C.;.LTx C��:_;G« . � '+' _ . � E � ��-' - t .�•`�. _ . .��' 'r • t �'`��_�,.��,�j! D c� e 2/�.8/76 �` - :�% ' . � O ��i �`; ��T � c � � t-� � :� � - � � : �flii?3 �Q�.i� �� CQ�1i1Ll � � � . . . . _ �i� � �,� � �0 Ti�Ti3��i 2� fl 3'� FINANCE . . - Robert .Sylvester � chairman, makes the '�ollO�tltCtg - � . re�or� an C.�. . � Ordi�ance � - _ . � R�solution . � t7tf�2� � ._ , , • _ -: _ � - _ I ��3,,,.� : ��266751 - City'.s Housing and inance Programs - � . � The above ordinance was approved unanimous�.y by t�ie � . �. � ��.ance, �a.nage�en� and �?ersonnel Committee. �t is hereby submitted for necessary action by �Cfie . City Clerk's Off3ce�. � - " '� =�i.�.. � � S}:.�'E':i.�i FI.GO2 Sr\I�:T Pr.L'�, �:I`\�.S�T:� 55i�? - '• t ' PROGRAM CONCEPT FOR SAINT PAUL ' S HOtiSING FINANCE AGENC 2��5 . �� . The ? 975 Minnesota Legislature passed and Governor Wendeil Anderson signed into law (Chapter 260) a bill authorizing the City of Saint Paul to develop and administer a Housin� Finance Program. These guidelines shall be the basis for the impl_�mentation of a single-famiTy and mult;_-family mortgage program and are designed to achieve seven basi� objectives: 1. To increase the opportunities, particularly for persons of low and moderate income, for residence in the City and provide a variety of housing to them that encourages an economic mix in the City of Saint Paul. 2. To complement existing public investment in vacant publicly-owned land by constructing residential housing. 3. To ini.tiate a residential mortgage program that minimizes major financial risks to the City of Saint Paul and which maximizes the mortgage funds available through utilization of the enabling legislation. 4. To increase the economic base of the City of Saint Paul. S. To create public and invesfior confidence and participation in the concept of a municipal housing finance program. 6. To encourage the construction of residential housi_ng throughout the City of Saint Paul. 7. To provicie a mortgage program which promotes a mix of housing type - in- c�uding detached single-family, townhouses, condominium, and multi-family. ��t�ile the program described in these guidelines recognizes the need to complete current neighborhood revitalization programs, it should not be construed to be a comprehensive housing policy. Such a policy has not been adopted by the City of Sai_nt Paul, but is in the Work Prop,ram of the City Planning Department for 1976. -L' • ' • . . . {� �� During the past few years, several studies have been published regarding Saint Paul's housing conditions �nd marlcet, economic development, and population trends. These studies include the housing assistance plan for the community development pro�;ram; the Migratio.n Committee's report entitled Saint Paul Population Chan�e; Challen�e and Opportunity; the Pianning Commission�s Economic Polic Overview of Saint Paul� (Hammer Study) and the rietropolitan Council`s Housin� Market Analysis Collectively the studies present a comprehensive view of Saint Paul's housing and economic needs. The economic development report casts Saint Paul as a built city. In fact most central citi_es are built cities. lfius most new growth occurs in the suburbs on formerly vacant or agricultural land. In the city, however, new develop- meRt usually involves redevelopment of aging or deteriorating property. Given these options, developers generally fnvest in the "safer" snburbs. As a result of this choice, suburban growth usually has had an adverse effect on the central cities through out-migration and dispersal of population and employment opportunities. Out-migration and dispersal from Saint Paul have been studied by the Migration Committee. Established by the Saint Paul City Council, this Committee was charged to investigate migration or population trends, assess the impact of these trends and recommend policy considerations to ensure a viable city. In its final report, the Committee based on its findings, reeommended that priority be placed upon the resotoration of confidence in the City's neighborhoods as sound and desirable res- idential areas. The Committee also recommended that the Gity of Saint Pau1 play a strong role in ensuring opportunities for private market housing development. Prior to the recommendations of the Migration Committee, the City was initiatin� programs to st.imulate private market housing. TTtzis initial effort, howe�;er, emphasized rehabilitat�on and preservation o£ the City's existing h�using stock. Studies conducted by City Planning and Housing and Redevelopment Authority staff indicated that a neerl existed for housing rehabilitation. ' • • -3- �� The 1970 census supported the fact that approximately two-thirds of the Ci.ty's housing stock was built prior to 1939. Cognizant of the age of the housi:ng stock, the Department of Community Services, in conjunction with t`�e HitA staff, conducted a survey in 1974 of the City housing conditions in approximately 2/3 of the geographical area. The results of the survey, which are summarized in the Housing Assistance Plan, found that while 58% (37,893) of the units were sound, 37% or 24,527 of all units surveyed were in need of minor or major repairs. Another 5°/0 or 3,440 were classified as structurally substandard or dilapidated to the extent that repair is probably not feasible. With this data as a base the City began to develop a housing program. In 1974 the City of Saint Paul and the City of Minneapolis along with the Minnesota Housing Finance A,gency all were authorized through separate legislation to develop and administer a housing rehabilitation loan and grant prograrn. The Saint Paul enabling legislation authorized the City to sell $3.0 million in general obligation bonds to finance the program. This authorization has been subsequently amended to permit up to $5.0 million in bonding authority for rehabilitation. Since its operation i_n the spring of 1975, the rehabilitat;.on program,which offers low-interest loans and grants to owner-occupants of primarily low and maderate has had 1,100 applicants. To supplement the bond funds, state housing loans and community development black grant funds, a Federal grant program, has : also been used. In the near future it is planned that funds from banks and savings and loans will be added to the program. Althou�h the housing rehabilitation program addresses the need to maintain existing housing, housing rehabili_tation itsel£ is only one of several possible components of a municipal housing strategy. Other components couZd be, but are not limited to land write downs, land assembly, tax abatements, public improvements, and mortgage assistance. Of Che above listed possibilities, the City throuoh urban renewal and , ' -LF_ � � Nei�;Ilborhood Development Programs,has implemented all but mortgage a�'s� �� =w_.� However, recent market, housing need studies, the recommendations of the Migration Commi.ttee and economic conditions have prompted the City to develop a housin� finance program. In June of 1975, the rietropolitan Council released a Housing Market Analysis. This study reported that between 1975 and 1985, 242,950 new housing units will be needed ' throughout the seven-county metropolitan area. The study further states that approximately 33,000 units (3,300/year) will be needed in Saint Paul during the next decade. When compared to housing produ�tion of the 1965 to 1374 deeade, the annual goal for the next ten years is 2.7 times greater than prior productian levels. From 1955 through 1974, 13,939 housing uniCs were constructed in Saint Paul. Of these projected units, 387o will be needed for low and moderate income households. To provide for the needed number of units, the involvement of state and local govern- ments working in concert with the private mortgage lenders is necessary. Presently the Minnesota Housing Finance Agency with the participation of private lenders is offering not only rehabilitation loan and grants but also is providing martgage assistance for new housing development ta eligible applicants throughout the state. Simi1 ar authority is now available Co the City of Saint Paul. The 1975 Minnesota Legislature authorized the City of Saint Paul to develop and administer a housing finance program and to sell bonds for this program. The housing finance legislation permits the City to offer mortgage assistance for housing developed primarily for persons of low and moderate income. The initial utilization of housing finance legislation will be to complement on-going neighborhood revitalization pro- grams. For instance, the housing finance program could be used to stimulate the development of vacant,publicly-owned land. Currently, 291 single-family lats developed at a cost of $2.6 million are available for housing constraction. In addition, 14 sites could accommQdate an estimated 2,000 multi-family units. These mul.ti-family units have an estimated development and mortgage cost of $52.0 million. . . � -J-� � � Y �,� � . ��;`1 G �Cl The housing finance program could also provide needed mort�age refinancing for the housin� rehabili.tation pro�;ram. The Ci.ty's rehabilitation program providas for re- financing which is needed to make rehabilitation feasible but currently there are no funds for this. Admi.nistrative Agency The Saint Paul Housing and Redevelopment Authority (HRA) shall be authorized by official action of the Mayor and City Council to administer the program in accordance wi.th the enabling legislation, the administrative guidelines as set forth herein, and other policy directives as may be enacted by the Saint Paul City Council. The HRA, while authorized to administer the program, may contracC with the private financial sector in processing loan applications, servicing the loans, and securing private loan-to-lender commitments. The Saint Paul HRA may secure all necessary authorizaCion to act as an approved F.H.A. mortgagee if it proved to be necessary and desirable for HRA to make mortgages directly with homeowners. ProQram Fundin� To finance the program, the City of Saint Paul by appropriate official action shall author.ize, issue, and sell - (1) general obligation bonds, not ta exceed $2,OOO,Q00 and/or (2} revenue bonds. In addition to the bond proceeds, the City of Saint Paul shall encourage the participation of private investors in the housing finance program. Revenues generated from the mortgage credit made available must be suffici.ent ta retire the bonds issued to finance the program and could provide for the admi_nistrative costs of the program. A bond redemption/default xeserve fund shall also be established as back-up guarantee to meet scheduled bond amortization payments. -G - Public Offerin� n�� ''`� �'�� Perodically the HRA shall pubZicly advertise the availabili_ty of publicly-owned land for sale for housing construction for which mortgage financing may also be available through the City's housing finance program. Based on offers to purchase and resortgage commitment applications received and considered by the HRA to be eligible for £inancing, the HItA shall request that the City authorize the sale of bonds to make the necessary mortgage credit available. In addition to this amount, funding may also be requested to finance or refi.nance a limited number of existing houses as permitted within these guidelines. Mort�age Conditions 1. The HRA may require mortgage insurance which mini.mizes the risk to the City and promotes sale of bonds for the program. 2. The rate of interest to be char�ed shall be a fixed simple annual percentage rate which shall be determined by the bond rate plus the cost of the bond sale and mortgage admini.strative insurance and servicing costs. 3. t4aximum term of the mortgages shall not exceed the maximum term allowabJ,e by the insuring agency and/ar the terms established by the HRA as the administering agency of the program. 4. The HItA shall establish a schedule of downpayments required, based on recammendations of the insuring agency and mortgage bankers. Eli.�;i.ble Mortga�;ors/Income Limits Z. For single-family, duplex, townhouses, and condominum properties, the mortgagor muse be the owner-occupant. Mortgage reservation commitments will also be made for a reasonable period of ti.me to developers of such properties. All applicants for mortgages on property located outside af the boundaries previously c�esignated as NDP, code enforcement, or renewal areas including Phalen Code Enforcement (E-2), 9 , -7 • • , , . . �'��`�.�-� Concord Terrace, Stimmit-University, West t�1id*,•�ayiSouth St. Anthoay Parlc, "� Thomas-Dale, Central Core, Seven Corners and West Seventh Street must produce written evidence of refusal of an FHA, GI or VA mortga�e and a rtinnesota Housing Finance Agency mortgage on comparable terms. 2. The prooram will be administered so that special emphasis will be given to families and individuals of low and moderate income who qualify as mortgagors un.der number one above. For purposes of this program, owner-occupant families and individuals of low and moderate income shall have total gross incomes that do not exceed the following limits: GROSS FAMILY INCOME FAMILY SIZE LOW AND riODERATE 1 Person up to 2 Persons up to 3 Persons up to 4 Persons up to 5 Persons up to 6 Persons up to 7 Persons up to 8 Persons up to 9 Persons up to LO Persons up to 3. �ligible mortgagors for structures of three dwelling units or more shall be approved by the HRA as qualified and acceptable developers/awners of the projects. Priority for a mortgage will be given to those developers who place special erophasis on providing housing for low and moderate income families, as defined under the income limits of the Section 8 housin� assistance program for this locality by the Department of Housing and Urban Development. 4. All mortgages on properties financed under this program sha1Z be the primary mortgage (s) on the property. , , , .+' - . - Eligi.ble Properties �� rtort�;age financing shall be primarily limi.ted to housing constructed on publicly owned land. The exception would be the financing or refinancing of a limited number of existing houses to encourage the p�:rchase of housing units under the City's proposed Urban Homestad Program or to facilitate rehabilitation through the City's rehabilitation loan program. Al1 properties to be financed shall be a permitted use or have a conditional ase permit under the City's Zoning Ordinance and the use must be permitted under any Urb.an Renewal Plan, Redevelopment Plan, or Community Development District Plan, and the standards required by an insuring entity. All properties financed shall, as a minimum, be in full compliance with applicable City codes and ordinances as well as any standards that may be required by_the agency i.nsuring the mortgage. Mortgage financing shall not be made if it is determined that the property can be financed from other public or private lenders upon terms and conditions which are affordable to the applicant. Mobile homes and/or trailers shall not be eligible for mortgage financing. It is apparent that acting alone, the City of Saint Paul cannot provide the housing assistance requixed to meet the housing needs. The participatian of the Federal Housing Administration, rlinnesora Housing Finance Agency and private Zenders is essential. The proposed guidelines for the City of Saint Paul�s Ilousing Finance �ency strive to seek this participation as well as creating residential opportunities throughout the City. � CtT Y �� b 7J �� w _- x � aa::C::oC::: a 6 o'oaL�°a� �b ��, ,�o CITY OF SAINT PAUL .... OFFICE OF THE CITY ATTO �:.,,�.��,�.,��"°�.�°- . March 16, 1976 �'�`� � JERO�r1E J. SEGAL City Council c/o Rose Mix, City Clerk 386 City Hall Dear Mrs. Mix: The City Council, at its meeting on March 11, 1976, asked that the City Attorney advise whether Chapter 260, Laws of 1975, authorizing the City to establish a House Finance Program intended the issuance of general obligation bonds for purpose of directly providing loans for the construction or rehabilitation of housing. I did not attend the Legislative Committee Hearings on this Act and, therefore, cannot speak to the intent. Section 2, Subdivision 1 of this Act authorizes the City to develop a program to finance housing for occupancy primarily by persons of low and moderate income. Section 2, Subdivision 3, then authorizes the City to issue up to $2, 000, 000 general obligation bonds for the purpose of financing this program. Section 2, Subdivision 4, states that in establ,ishing a program the City Council shall make every e�fort to ensure that the revenues generated from the mortgage credit made available are sufficient to retire the bonds issued to finance the program and to provide for the administrative costs of the program. Tt is my opinion that the language of Section 2 authorizes the City to issue general obligation bonds and to use these bond proceeds for the purpose of financing housing con- struction or rehabilitation to be occupied primarily by persons of low and moderate income. It is m�kso my opinion that this Section 2 requires that the City apply the general City Hall, Saint Paul, Minnesota 55102 612 298-5121 City Council Page Two March 16, 1976 obligation bond proceeds directly towards financing of housing and that the City Council has the authority to determine what is the best manner in which these funds may be applied. You s very truly, . . S t Attorney JJS g i J t`!, lst � � 2nd ' 1/'� 3rd -�O Adopted � �1r�.. oue� 3�,� Yeas Nays CHFZIS�PISEN xozzA �� r�vnvE � ROEDLER _ + SYLVESTER � TEDESCO PRESIDENT (HtJNT) ROLL CALL FOR MARCH, 1976 Yeas Nays ROEDLER'1.� SYLVE S TER�•.,� � TEDE S C�---.�._�.� i CHRIS TENS EN��.,�. ``�`�j3UNT LEVI�. PRESIDENT (HOZZA) .�-�-•..,,, '