09/18/2001 CC RPT 09 - Laserfiche WebLink

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! CITY OF RIVERSIDE CITY COUNCIL/REDEVELOPMENT AGENCY MEMORANDUM Honorable Mayor and City Council Redevelopment Agency Date: Item No.: September 18. 2001 9 Subject: A Public Heariug for a Disposition and Development Agreement with the Riverside Housing Development Corporatinn to Rehabilitate and Sell a Single Family Home Located at 4855 Montgomery Street Background The U.S. Department of Housing and Urban Development (HUD) offers a program for municipalities to purcha~e homes I"r One Dollar ($1) after the homes go unsold from the HUD inventory after six months, These homes are often not in the best of condition, but they do offer a unique opportunity to increase the community's supply of low to moderate income housing as well as program income for the Agency's affordable housing programs. MUl11eipalities are the only entities capable of purchasing homes for $1 under this HUD program. Current Issue The City has acquired a single family home located at 4855 Montgomery Street ("House") from the HUD $1 Ilomes Program. and requests the authority to convey the house to the Agency' for the purposes of entering into a Disposition and Development Agreement with the Riverside Housing Development Corporation (RHDC) for rehahilitation. disposition, and profit sharing for the 110use ("Agreement"). Analysis Undcr the proposed Agreement. RHDC would rehabilitate the House using private financing, and arrange for a hroker to market the property. The I louse would then be sold on the market to a qualified first time homebuyer that carns no more than 120% of the County median income, RHDC would then pay otfthe private rehabilitation financing nsing sales proceeds, and the Agency and RHDC would split evenly the remaining funds from the sale. It is possihle that. with a SO/SO profit split with RHDC the Agency could realize $20,000 or more to deposit in the Agency's low to moderate income housing fund to utilize in future affordable housing projects, It is expected that one HUn $ J Ilome could be otfered for purchase a year. It is anticipated that staff could return to the City Council and Redevelopment Agency with future HUD $1 Homes to be rehabilitated and disposed of in the !i-tshion of the 4855 Montgomery Street House. Fiscal Impact RllDe monitors the HUD $1 Homes Program list once a week. It is possible that the Agency could see a modest ($20.000-$30,OOO) income per house. As previously stated, there could be one house a year offered to the City under the HUD $1 Houses Program, Indirect costs include a small amount of staff time associated with coordinating the purchase and disposition of each house. Altt'rnatives Not to approve the above agreement with RHOC and to suggest alternative scenario for disposition of the current House, and future houses that may be offered under the HUD $1 Houses Program. 9-1