City and County Affordable Housing Fund Debates Thursday

Respondents to this RFP that agree to the tenant selection criteria below will receive 10 points.

General Screening Process

The screening process applied to the project must not deny applicants based on the following:

a. Inability to meet a minimum income requirement if the applicant can demonstrate the ability to comply with the rent obligation based on a rental history of paying at an equivalent rent to income ratio for 12 months;
b. Lack of housing history;
c. Credit score;
d. Information on credit report that is disputed, in repayment, or unrelated to a past housing or utility (gas, electric, and water only) obligations.
e. Inability to meet financial obligations other than housing and utilities necessary for housing (gas, electric, water).
f. Owing money to a prior landlord or negative rent payment history if the tenant’s housing andutility costs were more than 50% of their monthly income.
g. Owing money to a prior landlord or negative rent or utility payment history if applicant does one of the following: (1) establishes a regular record of repayment of the obligation; 2) signs up for automatic payment of rent to the housing provider; or (3) obtains a representative payee.
h. Wisconsin Circuit Court Access records;
i. Criminal activity, except: (i) violent criminal activity within the last year resulting in a criminal conviction, and (ii) if the program or project is federally assisted, criminal activity for which federal law currently requires denial. (Violent criminal activity is defined in 24 C.F.R. 5.100 and means any criminal activity that has as one of its elements the use, attempted use, or threatened use of physical force substantial enough to cause, or be reasonably likely to cause, serious bodily injury or property damage.)
j. Membership in a class protected by Dane County fair housing ordinances and non- discrimination ordinances in the municipality where the project is located.

Denial Process

1)  Prior to a denial based on a criminal record, the housing provider shall provide the applicant a copy of the criminal record and an opportunity to dispute the accuracy and relevance of the report, which is already required of HUD assisted housing providers. See 24 C.F.R. §982.553(d), which applies to public housing agencies administering the section 8 rent assistance program.
2)  Prior to a denial based on a criminal record, the housing provider shall provide the applicant the opportunity to exclude the culpable family member as a condition of admission of the remaining family members.
3)  Prior to a denial decision, the housing provider shall meet with the applicant to review their application and make an individualized determination of their eligibility, considering: (a) factorsidentified in the provider’s own screening policies, (b) if applicable, federal regulations, and (c) whether the applicant has a disability that relates to concerns with their eligibility and an exception to the admissions rules, policies, practices, and services is necessary as areasonable accommodation of the applicant’s disability. In making a denial decision, the housing provider shall consider all relevant circumstances such as the seriousness of the case, the extent of participation or culpability of individual family members, mitigating circumstances related to the disability of a family member, and the effects of denial on other family members who were not involved in the action or failure.
4)  The property manager will base any denial on sufficient evidence. An arrest record or police incident report is not sufficient evidence. Uncorroborated hearsay is not sufficient evidence.
5)  Denial notices shall include the following:a) The reason for denial with details sufficient for the applicant to prepare a defense, including: i) The action or inaction forming the basis for the denial,
ii) Who participated in the action or inaction,
iii) When the action or inaction was committed, andiv) The source(s) of information relied upon for the action or inaction.
b) Notice of the applicant’s right to a copy of their application file, which shall include allevidence upon which the denial decision was based.
c) Notice of the applicant’s right to copies of the property manager’s screening criteria.
d) Notice of the right to request an in-person hearing on the denial decision by making a written request for a hearing within 45 days.
e) Notice of the right to have an advocate present at the hearing and of the right to be represented by an attorney or other representative.
f) Notice of the right to present evidence in support of their application, including, but notlimited to evidence related to the applicant’s completion or participation in a rehabilitation program, behavioral health treatment, or other supportive services.
6) The if the applicant requests an in-person hearing, the hearing will be conducted by a person who was not involved in or consulted in making the decision to deny the application nor a subordinate of such a person so involved.

Attachment G – Tenancy Addendum

Respondents to this RFP that agree to include the following provisions within all tenant leases or as an addendum to all tenant leases will receive 10 points.
a. Security Deposits. The amount of a security deposit shall not be more than one month’s rent.
b. Late Fees and Other Fees. Late fees must be set forth in the rental agreement. Late fees shall not exceed 5% of the tenant’s portion of the monthly rent. Other penalty fees are prohibited. All other fees must be directly related to the cost for a specific amenity or service provided to the tenant and comply with all applicable laws.
c. Rights of Youth to Access Common Spaces. Youth under the age of 18 are allow to use and enjoy common areas without supervision.
d. Good Cause for Termination. A tenancy may not be terminated during or at the end of the lease unless there is good cause. Good cause is defined as a serious violation of the lease or repeated minor violations of the lease. Repeated means a pattern of minor violations, not isolated incidents. Termination notices and procedures shall comply with Chapter 704 of Wisconsin Statutes and federal law, when applicable. Written notice is required for non-renewal and shall include the specific grounds for non-renewal and the right of the tenant to request a meeting to discuss the non-renewal with the landlord or landlord’s property management agent within fourteen (14) days of the notice. If requested, the landlord or property management agent will meet with the tenant to discuss the non-renewal, allow the tenant to respond to the alleged grounds for non-renewal, and pursue a mutually acceptable resolution.
e. Reasonable Guest Rules. Tenants have the right to have guests. In the event the property management establishes rules related to guests, they must be reasonable. Unreasonable rules include, but are not limited to the following: (1) Prior authorization of guests by the property management, unless the guest is staying for an extended period of time (e.g. more than 2 weeks); (2) Prohibition on overnight guests; (3) Requiring that the resident be with the guest at all times on the property. (4) Requiring guests to show ID unless requested by the tenant. (5) Treating caregivers, whether caring for a child or children, or an adult with disabilities, as guests.

Landlord may ban a person who is not a tenant from the rental premises if the person has committed violent criminal activity or drug related criminal activity at rental premises. No person shall be banned from the rental premises without the consent of the tenant unless the following have taken place:

(1) A notice of the ban is issued to the tenant stating the:
(a) name of the person banned,
(b) grounds for the ban including, (i) the specific facts detailing the activity resulting in the ban; (ii) the source of the information relied upon in making the ban decision; and (iii) a copy of any criminal record reviewed when making the ban decision; and
(c) the right of the tenant to have a meeting to dispute the proposed ban, discuss alternatives to the ban, and address any unintended consequences of the proposed ban.
(2) If requested, a hearing on the ban has taken place to provide the tenant an opportunity to dispute the proposed ban, discuss alternatives of the ban, and address any unintended consequences of the proposed ban.

A tenant may not invite or allow a banned person as a guest on the premises, provided the Landlord has followed the proper procedure and given notice to Tenant as set forth herein.

A tenant who violates the guest policy may be given a written warning detailing the facts of the alleged violation. The written warning shall detail the violation, and warn the tenant that repeated violations may result in termination of tenancy. Tenants that repeatedly violate the guest policy, (e.g. three (3) or more violations within a twelve (12) month period) may be issued a notice of termination in accordance with state and federal law.

Nothing in this policy limits a person’s right to pursue a civil order for protection against another individual.

f. Parking Policies. Parking policies and practices must comply with applicable laws. Vehicles shall not be towed to a location that is more than 6 miles from the rental premises, is not a towing company with a tow location available within 6 miles.

City Affordable Housing Fund RFP

The entire draft request for proposals is here.  Highlights include:

• Title = Affordable Housing Fund: Developers Seeking 2020 WHEDA Tax Credits for Rental Housing Development
•  Timeline
  • May XX, 2019 – Release of RFP
  • 12:00 p.m. NOON (CST) June 27, 2019 – DEADLINE FOR SUBMISSION OF PROPOSALS
  • Week of July 22, 2019 – CDD requests additional/clarifying information from applicants, if necessary.
  • Week of August 5, 2019 – Applicants respond to request for additional/clarifying information
  • Week of August 12, 2019 – Applicant Presentations to Staff
  • September 5, 2019 – Applicant Presentations to CDBG Committee
  • October 3, 2019 – CDBG Committee Recommendations
  • October 7, 2019 – Finance Committee Recommendations
  • October 15, 2019 – Common Council Approval
  • November 2019 – Commitment Letter (Notification of Award)
  • Late 2020 – Mid 2021 – Anticipated contract effective date(s)
• Scoring
  • Overall Quality and Responsiveness – 40 points
  • Proposed Site – 25 points
  • Financial Feasibility and Leverage – 20 points
  • Capacity, Experience and Qualifications of Development Team – 15 points
  • Alder and Neighborhood Notification & Meetings – 10 points
• The City of Madison Community Development Division (CDD) is seeking to improve the competiveness of development proposals submitted to WHEDA and maximize the receipt of tax credits for projects in Madison through proposals from qualified developers that seek to accomplish the following three objectives:
  1. 1. Increase the supply of safe, quality, affordable rental housing.
     2. Preserve existing income- and rent-restricted rental housing to ensure long-term affordability and sustainability.
     3. Improve the existing rental housing stock in targeted neighborhoods
        through acquisition/rehab to create long-term affordability and sustainability.
• The CDD anticipates having approximately $5 million available from the City’s Affordable Housing Fund to support 3-4 proposals through this process.
• The goal of the Affordable Housing Initiative is to improve the competiveness of development proposals submitted to WHEDA and maximize the receipt of tax credits for projects in Madison that seek to accomplish the following three objectives:
  • Increase the supply of safe, quality, affordable rental housing.
  • Preserve existing income- and rent-restricted rental housing to ensure long-term affordability and sustainability.
  • Improve the existing rental housing stock in targeted neighborhoods through acquisition/rehab to create long-term affordability and sustainability.

In addition to these primary objectives, the Affordable Housing Initiative aims to:

• • Achieve a wider dispersion of affordable rental housing throughout the city and discourage development of additional supply of income- and rent-restricted units in areas with high concentrations of poverty and/or assisted housing.
  • Incentivize new development in areas of the city with strong connections with or proximity to key amenities such as employment opportunities, public transit, a full service grocery store, health facilities, schools, parks, and other basic amenities.
  • Align CDD-assisted development and property management practices with the City’s Racial Equity and Social Justice Initiative through inclusive and culturally-sensitive marketing.
• The City’s primary objective is to add at least 200 units to the supply of affordable rental housing in Madison.
• Assistance offered from City Affordable Housing Funds will be contingent upon their authorization during the 2019 Budget process, which concludes in November of 2019. All funding awards offered to a project by the City are made contingent upon an applicant’s receipt of LIHTC for that project, as well as the applicant’s ability to secure other financing necessary for the project, and land use and permit approvals.
• Funds awarded through this RFP are expected to be secured by a Loan Agreement by December 31, 2021. Payment schedule will be negotiated at point of contract with 10% of funds reserved until project completion.
• CDD anticipates offering gap financing awards that range from $15,000-$40,000 per unit of affordable housing. The amount of subsidy offered will reflect the extent to which proposals match the City’s overall goals, objectives, and preferences as described in this RFP; the extent to which all other available financing sources are pursued; and the availability of funds.
• CDD anticipates that at least 50% of the funds offered to any project will be provided in the form of a 30-year loan, at 0% interest, payable upon the earliest of the sale, transfer, or change in use of the property. Repayment will be based on a percent of the restricted rent appraised value after rehabilitation or construction, derived from the amount of CDD- administered funds invested in the project or the amount of the loan, whichever is greater.
• CDD further anticipates that up to 50% of the funds offered will be provided in the form of a 16-year term loan, amortized over 30 years. The interest rate will be set at 2.75% or the annual long-term Applicable Federal Rate, whichever is lower. Annual payments will commence on April 1st of the year following final disbursement of funds, contingent upon sufficient cash flow to support the project. In the event that cash flow is insufficient to pay all or a portion of the annual payment, the balance of the loan must be repaid at the end of the 16-year term. Funds awarded under this RFP will be loaned directly to the project’s ownership entity (e.g., single purpose LLC).
• The City will secure its funding with promissory notes and a mortgage in the form of non- recourse loans. Applicants offered financial support will be required to enter into a 30-year Land Use Restriction Agreement, recorded in first position following the first mortgage for the period of affordability.
• The City will require the recipient of its funds to submit detailed compliance reports and other periodic reports on the project during the period of affordability. Due dates and specific requirements will be established within the Loan Agreement. The City reserves the right to schedule site visits to verify compliance with the terms of the City agreement.
• In addition to direct subsidies offered as part of this RFP, applicants may also qualify for a waiver from payment of Park Impact Fees for development of low-cost rental housing units. A low-cost unit is defined as one reserved for households with incomes less than or equal to 60% AMI and for which rents are restricted to amounts not greater than 30% of income for a household at 60% AMI with a land use restricted period of at least 30 years.
• Requirements – The CDD has identified the following conditions of eligibility:
  1. Applicant must seek 2020 LIHTCs and meet the corresponding income, occupancy, and rent restrictions.
  2. The entity applying for City funds must have an ownership interest in the development.
  3. Applicant must demonstrate site control at the time of application, unless the site is already owned or controlled by the City or the Community Development Authority.
  4. Proposed sites for new construction must be located in an Eligible or Preferred Area as identified on the map. However, an acquisition/rehab development may be proposed at any location within the City of Madison, except areas designated as Ineligible. Refer to Section 1.5 above or the map listed as Attachment A.
  5. Proposals must demonstrate strong connections with or proximity to key amenities such as employment opportunities, public transit, a full service grocery store, health facilities, schools, parks, and other basic amenities.
  6. At least 15% of the proposed affordable units must be reserved for households with incomes at or below 30% AMI and those units must be distributed proportionately across proposed unit sizes (e.g., one, two, and three or more bedroom units).
  7. At least 20% of the proposed total units must be designated as supportive housing units and make adequate supportive services available for the selected target populations.
  8. Any proposal serving households with incomes at or below 30% AMI must have adequate supportive services available to meet the needs of those households.
  9. Proposals offered City funds will be expected to apply, or have applied, to the Federal Home Loan Bank’s Affordable Housing Program.
  10. Proposals must engage in the Pre- and Post-Application Processes pertaining to land use entitlements and neighborhood engagement described in Section 2 below.
  11. Proposals seeking tax credits through the WHEDA Supportive Housing set-aside will not be considered under this RFP.
• Preferences – In addition to the conditions of eligibility listed above, preference will be given to:
  1. New construction proposals with a site located in a Preferred Area as identified on the map listed as Attachment A.
  2. Acquisition/rehab proposals with a site located in a Targeted Rehab Area as identified on the map listed as Attachment A.
  3. Proposals from a non-profit entity that assumes the roles of both Developer and Owner or a partnership where the non-profit has a majority ownership interest in the property and/or a General Partner Purchase Option, Right of First Refusal, or a controlling interest in the ownership entity.
  4. Proposals in which more than 20% of the proposed affordable units contain three or more bedrooms.
  5. Proposals in which more than 20% of the proposed affordable units are made available for households with incomes at or below 30% AMI representing a proportional mix across proposed unit sizes (e.g., one, two, and three or more bedroom units).
  6. Proposals that reflect an integrated supportive housing approach, described below, in addition to meeting the supportive housing requirements outlined in WHEDA’s QAP and Appendix S targeting veterans and/or people with disabilities.
  7. Proposals that leverage the use of all available resources including the deferment of the maximum amount of developer fee feasible.
  8. Proposals that offer repayment of the amortized interest loan beginning in Year 1 simultaneously with repayment of the deferred developer fee.
  9. Proposals that provide a non-smoking environment throughout the property.
  10. Proposals that include in-unit internet service at low or no cost to residents.
  11. Proposals for multifamily developments that include a dedicated year-round indoor play space and/or outdoor playground on the premises.
  12. Proposals that present a Tenant Selection Plan (TSP) that embraces the CDD’s TSP Best Practices outlined in Attachment B-1.
  13. Proposals that present an Affirmative Marketing Plan (AMP) that embraces the CDD’s AMP Best Practices outlined in Attachment B-2.
• Preference will be given to proposals that incorporate one or more of the following approaches to supportive service partnerships:1. Target supportive housing units to one or more of the following population(s): a. Individuals and/or families experiencing homelessness selected from the applicable Community-wide Priority List and partner with a local Homeless Services Consortium service provider listed on Attachment B;
  b. Formerly homeless families occupying permanent supportive housing units who are deemed by their service provider to no longer require intensive supportive services and partner with a local Homeless Services Consortium service provider listed on Attachment B.
  c. Other Supportive Service Target Populations and related supportive service partnerships which may include:
  i. Previously incarcerated individuals re-entering the community; and/or
  ii. Other target populations that meets an identified community need.
  2. Contribute meaningful financial support for supportive services provided through local service partner(s) experienced in serving the target population. Level of support, intensity, and location of the services (i.e., on- or off-site) will depend on the needs of the target population(s).
  3. Leverage additional and adequate non-City funded supportive services dollars.
  4. Demonstrate extensive consultation and coordination of the collaborative partnership between the development, property management, and the supportive services teams. This includes developing a supportive services plan describing, in detail, the design of services made available to the target population(s); planning for a unit mix that will best accommodate the targeted population(s); having pre- and post-initial lease up referral processes designed to screen-in prospective tenants from these target population(s); and utilizing alternative, flexible tenant screening criteria for prospective tenants who are connected to and/or will have improved access to supportive services.