P-0435 - Long Term Housing Affordability Policy

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1 during the period of affordability a buyer chooses to sell their property, the County will ask them to sell the 2 property to another qualified homebuyer. If the seller chooses a qualified buyer, they are able to retain 3 100% of the equity of the sale. If the seller does not sell the property to a qualified buyer,, therefore losing 4 the property from the affordable housing inventory, the equity obtained from selling the property must be shared with the County 50-50. She made reference to a letter from EmPOWERment stating that the equity sharing should be based on a proportionate share model. On page eight, there is a comparison of doing 50- 7 50 equity sharing versus a proportionate share model. 8 -Chair Carey clarified that the only real distinction between EmPOWERment's proposal and the 9 County's proposal is in who purchases the property. In EmPOWERment's proposal, it does not make a 10 difference who purchases the property, the equity will be proportionate based on the relative contributions of 11 the owner and the County. 12 Commissioner Gordon said that the County would get no interest money for the $30,000 13 contributed to the loan. She said that $30,000 was a lot of money to not have any interest money. Also, 14 she said that it was very likely that if a home was sold to anon-qualified buyer, the price would be higher 15 which would make the equity higher. She has a problem with letting a home go non-affordable and sharing 16 the equity proportionately. She said that this was a tremendous taxpayer investment. 17 Myles Presler from EmPOWERment said that he supports Chair Carey's proposal. He said that 18 EmPOWERment's concern about the recommendation was based on the understanding that if the home 19 was sold at all, that 50% of the appreciation had to be split with the County. He said that EmPOWERment 20 would encourage the County to modify the proposal such that regardless of whether the home is sold to an 21 income-eligible family, that each family has to repay the public investment plus a proportionate share of the 22 appreciation that is built on the property during the tenure of ownership. He apologized for the statement 23 because it was based on a misunderstanding. 24 Commissioner Brown made reference to the Land Trust model and asked what would happen if 25 the land trust went out of business or no longer functioned. 26 County Attorney Geoffrey Gledhill said that when the community land trust that exists now was 27 created, the articles of incorporation called for the property in the event of dissolution of the corporation to 28 go to another non-profit corporation. He has reviewed the documentation and recommended that the 29 articles of incorporation be amended to provide that, upon dissolution, all of the assets would go to a similar 30 purpose non-profit corporation. 31 Commissioner Brown would like to talk about the land trust soon. John Link said that the staff still strongly recommends their proposal on equity sharing because the main intent is to keep the unit affordable. 34 A motion was made by Commissioner Brown, seconded by Commissioner Jacobs to approve 35 the Long Term Housing Affordability Policy. 36 Commissioner Jacobs asked if Mr. Dowling, from the Orange Community Housing Corporation, 37 had anything to add to this discussion. 38 Mr. Dowling said that he feels that the County's proposal is fair. He said that the proposal would 39 entice the seller to sell the unit to an income-qualified buyer. 40 Commissioner Jacobs asked if there was any mechanism for helping someone who is selling 41 the property to identify a buyer who is qualified. 42 Tara Fikes said that through the right of first refusal, that would give the information that the 43 property is available for the market and anon-profit or the County could purchase it. She said that most of 44 the non-profit organizations that are involved in first-time homeownership programs have a list of 45 ,organizations that are involved in affordable housing. 46 Commissioner Gordon clarified that the period of affordability was 99 years for the land trust 47 model and for the new and existing first-time homebuyer programs. She thinks the Board should revisit the 48 impact fee reimbursement issue because in the owner-occupied housing, it is only affordable for 20 years. 49 Tara Fikes said that the section on impact fee reimbursement could be amended to say that the 50 period of affordability would be 99 years. 51 Commissioner Gordon asked about the return on investment when the property changed hands 52 if the equity was unusually high. 53 John- Link said that if the property is sold to a qualified buyer then the unit is retained as 54 affordable and the equity is still going to be fairly low. 55 Geoff Gledhill said that the objective was to keep the housing affordable, and if the marketplace 56 will do it, then the County does not have to. 57 Commissioner Brown would like to include in the motion that the 20-year period of affordability in the impact fee reimbursement would be changed to 99 years. She feels that the County should come up with a revolving fund to go along with this program. She would like the staff to come back with recommendations for a revolving fund at the housing work session.