So, we have money for affordable housing we can’t use? We can figure this out, can’t we? So. tired. of. excuses. Make it a priority and figure it out.
October 9, 2014
Supervisor Heidi Wegleitner
1941 E. Dayton St.
Madison, WI 53704Dear Supervisor Wegleitner:
Thank you for your message regarding the 2015-2019 Consolidated Plan and First Year Action Plan. Staff would be happy to meet with you to discuss our funding process and the specific federal requirements that dictate how the County can spend funds. Meanwhile, I hope this letter offers clarification to your concerns of the Consolidated Plan and First Year Action Plan.
Over the last four years, Dane County has invested approximately 1.3 million dollars of HOME funding in the creation and rehabilitation of affordable rental housing in the communities of Stoughton, Middleton, the Town of Madison and Waunakee. With the completion of the most recent project, these funds will have leveraged an additional 28 million dollars in other investment, created 35 HOME-assisted units, and an additional 98 units of affordable housing.
In your letter you express concerns regarding the relative small percentage of 2015 funds directed to affordable housing for low-income renters and persons experiencing homelessness. The County issued RFPs for anticipated 2015 CDBG/HOME funding last Spring. There were no responses to the Rental Rehabilitation RFP and two responses to the New Rental Construction RFP. One of the respondents to the New Rental Construction RFP did not demonstrate financial hardship to meet the fiscal requirements of the HOME program. This applicant indicated that they had the financial wherewithal to proceed with the project regardless of whether HOME funding was awarded.
The second applicant for New Rental Construction could not demonstrate their project was ready to move forward, as they had not fully secured funding for the project and had not yet requested approval from the City of Middleton (the proposed project would require a zoning change). It is critical that funds are only awarded to “shovel-ready” projects because HUD conducts performance reviews to determine if CDBG/HOME- funded activities are being carried out in a timely manner (24 CFR §570.902). If a participating jurisdiction’s CDBG Timeliness Ratio exceeds 1.5 for a fiscal year then the jurisdiction’s funding will be reduced in subsequent years. Similarly, the HOME Final Rule stipulates that HOME funds must be committed to a specific local project within two years and the project must be completed within four years. It is important that the County award all of the 2015 allocated funding prior to the end of the calendar year or HUD will presume that the need for CDBG/HOME funds has diminished resulting in reduced funding the following year.
Initially, the Rental RFPs were issued with up to $700,000 of available funding. Due to the federal regulations requiring timely expenditure of CDBG/HOME funds, some of these dollars were awarded to respondents of RFPs that will be able to meet the timely expenditure requirements. Funds were also allocated to the rehabilitation of the daytime homeless shelter planned in the Town of Madison.
The County will re-issue the RFP for an affordable housing project with the remaining unallocated funds to attract a project that will expand affordable rental opportunities in Dane County (outside of Madison). It can be challenging for developers to only be able to present projects at one specific time of the year. The re-issued RPF will give potential respondents additional time to present projects. It is important that the County find good partners for affordable housing development projects. Developers must have the capacity to comply with the federal requirements and manage the projects over the long-term.
The Affordable Housing Needs Assessment- draft by Kurt Paulson was carefully reviewed and utilized by staff in developing the 2015-2019 Consolidated Plan. Most of the data in Paulson’s Needs Assessment report agree with data provided in the Consolidated Plan. It should be noted, however, there is a distinction between the two reports: The Affordable Housing Needs Assessment presents data for Dane County (including Madison) and each of it’s municipalities, while the Consolidated Plan only pertains to Urban County Consortium member communities outside the City of Madison. Dane County is bound by HUD regulation to serve low and moderate income residents outside the City of Madison since Madison receives a separate allocation of CDBG/HOME funds. Sections NA10-NA30 and MA10-MA20 of the Consolidated Plan provide housing data specific to our Urban County Coalition.
The Annual Action Plan 2015 projects were awarded funds based on responses to the RFPs, ability to meet eligibility requirements, and meet a HUD National Objective. The applications were reviewed and scored by the CDBG Application Review Team. Finally, the recommendations of the Review Team were discussed and approved by the full CDBG Commission.
The Consolidated Plan provides guidelines for how funds may be spent over the next five years, with funded projects determined individually on an annual basis. Consequently, 2015 projects have no bearing on the nature and extent of projects awarded in subsequent years. The Consolidated Plan ranks “housing availability/ affordability” as the top overall priority for the County in the next five years. This was determined through a variety of surveys, focus groups, and public hearings to solicit feedback for the priorities of the County over the next five years. Affordable rental housing projects and affordable home ownership projects are categorized under the same goal and priority in the Consolidated Plan, and the proportion allocated to each type of project over the next five years is dependent on assessment of current needs of the community, responses to the RFPs, and the scoring of the Application Review Team.
You mention that the County should consider HOME funding for tenant-based rental assistance (TBRA). With the low vacancy rates, rising rents, and wait lists for subsidized housing in Dane County, alternatives to affordable rental housing should be considered in order to increase affordable rental opportunities, particularly for the lowest income households in the county. TBRA projects are included in the “housing availability/ affordability” priority need (page 125), and will be strongly considered if a qualified application is received.
We share your sincere interest in housing and community development needs in Dane County and your concern for ensuring the most effective use of CDBG/HOME funds. We welcome the opportunity to discuss in detail any thoughts you may have regarding the Consolidated Plan, Annual Plan, or any other aspect of the CDBG/HOME programs.
Sincerely,
Donna Vogel, Chair
CDBG Commissioncc: Dave Phillips, Director
