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Eagle Valley Sub Housing Suppor D~ ~<k~ MEMORANDUM November 30, 2004 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: City Support to MidAmerica Housing Partnership for Construction of Affordable Town Homes in the Eagle Valley Subdivision A development agreement with Fondell Construction was approved by City Council in December 2003, specifying terms of City assistance to be made available to the developers to produce new affordable single family housing. In exchange for this assistance, Fondell agreed to limit lot and house sizes, so that moderately priced homes would be made available. Since that time, Housing Department staff has been working with the non-profit MidAmerica Housing Partnership to assemble a development proposal for Eagle Valley. Housing and Community Development Department Director David Harris recommends City Council approval of a resolution indicating support of the application of MidAmerica Housing Partnership to the Iowa Department of Economic Development for subsidy of construction of affordable town homes in the Eagle Valley Subdivision. He further recommends concurrence with the Housing Trust Fund recommendation to grant $44,000 to MidAmerica Housing Partnership, from CDBG funds currently available in the Housing Trust Fund account, for additional financial assistance. I concur with the recommendation and respectfully request Mayor and City Council approval. fill t' ¡ (/" .1 ( /t, t/ d/lJ/ tL. Michael C. Van Milligen ~ "~1 MCVM/jh Attachment cc: Barry Lindahl, Corporation Counsel Cindy Steinhauser, Assistant City Manager David Harris, Housing and Community Development Department Director CITY OF DUBUQUE, IOWA MEMORANDUM 23 November 04 To: Mike V~~illigen, City Manager From: David'ì~arriS, Housing and Community Development Department Re: City Support to MidAmerica Housing Partnership for Construction of Affordable Town Homes in the Eagle Valley Subdivision Introduction The purpose of this memorandum is to request City Council approval of the attached resolution, indicating support of the application of MidAmerica Housing Partnership (MAHP) to the Iowa Department of Economic Development for subsidy of construction of affordable town homes in the Eagle Valley Subdivision. The resolution also approves a grant of $44 000 to MAHP, from CDBG funds currently available in the Housing Trust Fund account, for additional financial assistance. Background A development agreement with Fondell Construction was approved by City Council in December 2003, specifying terms of City assistance to be made available to the developers to produce new affordable single family housing. In exchange for this assistance, Fondell agreed to limit lot and house sizes, so that moderately priced homes would be made available. Since that time, Housing Department staff have been working with the non-profit MidAmerica Housing Partnership, based in Cedar Rapids, to assemble a development proposal for Eagle Valley. MAHP has constructed more than 550 units of both rental and homeowner housing since 1992 in eastern Iowa, and currently has total corporate assets in excess of $13 million. Discussion MAHP has proposed to construct 16 town homes in Eagle Valley, half to be made available to buyer families earning less than 80% of area median income, and half to households at 80-110% of area median. These will be 3-bec1room, 1.5 bath homes built as duplexes, with single car attached garages. Finished living space will be 1200 square feet. These will be modular units, manufactured by MidWest Homes, in Carroll, and sold at no more than $120 000 to the lower- income families. The above-income (80%+) buyers will pay $137 000 for their homes. MAHP's costs for these homes is $145 000. The difference in cost and price reflects requested subsidy from both the City and StatE:! of Iowa sources. A HOME Program application has been prepared by MAHP, for submission to the Iowa Department of Economic Development for a grant from the new American Dream Downpayment Initiative (ADDI). The ADDI grant plus City CDBG funds will be used to write down the sale price on the lower-priced units to $120 000. Principal and interest payments are projected at $679/month, making this home affordable to a buyer family at income as low as 70% of area median. The application to the Department of Economic Development requires a resolution of support from the locality in which the housing project will be located. This resolution indicates City support of MAHP's request for HOME Program funds. In addition, the resolution approves the Trust Fund's recommendation to grant MAHP a per-unit subsidy of $5500, for a total of $44 000 for the eight town homes, in order to write down purchase costs for income-qualifying households. Action Step The action requested of the City Council is to approve the attached resolution supporting MidAmerica Housing Partnership's application to the Department of Economic Development for HOME Program funds. This project achieves the Council's stated goals of providing new single family homes for moderate-income families, while additionally providing an equal number of homes for lower (below 80% income) households, in the Eagle Valley Subdivision. If successful, it is MAHP's intention to construct additional homes in this subdivision and expand a base for future Dubuque housing development operations. - RESOLUTION NO. 472-04 A RESOLUTION OF SUPPORT FOR THE CONSTRUCTION OF AFFORDABLE SINGLE FAMILY TOWNHOMES IN THE EAGLE VALLEY SUBDIVISION WHEREAS, MidAmerica Housing Partnership (MAHP) proposes to construct eight town homes affordable to households earning less than 80% of area median income, in the Eagle Valley Subdivision in the City of Dubuque; and WHEREAS, the City of Dubuque is supportive of provision of new single family housing affordable to low- and moderate-income families; and WHEREAS, the City of Dubuque has provided the developers of Eagle Valley Subdivision with financial assistance in the interest of reducing development costs and producing affordable housing; and WHEREAS, MAHP has requested Iowa Department of Economic Development assistance from the American Dream Downpayme~t Initiative (ADDI) program in order to reduce sale prices to lower-income families. THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA: Section 1. The City of Dubuque supports the application of MidAmerica Housing Partnership to the Iowa Department of Economic Development for HOME Program American Dream Downpayment Initiative funds to assist in development of the proposed MAHP housing in the Eagle Valley Subdivision. Section 2. City Community Development Block Grant funds in the total amount of $44 000 are authorized as a grant to MAHP for construction subsidy of the affordable town house units. 6th Passed, approved and adopted this 6th day of December, 2004. Terrance M. Duggan, Mayor Attest: Jeanne Schneider, City Clerk