City of Madison
Legislative File ID   06811
Type:   Ordinance    Status:   Filed
Enactment Date:      Enactment No.:  
Title:  
SUBSTITUTE - Amending Section 4.22 of the Madison General Ordinances to update language and terms in the Affordable Housing Trust Fund ordinance.
Controlling Body:   HOUSING DIVERSITY PLANNING AD HOC COMMITTEE
Introduced:   6/19/2007    Version:   2
Final Action:   1/19/2010    Contact:   Diane Althaus
Name:  
Amend 4.22, MGO to update language and terms in Affordable Housing Trust Fund ordinance
Extra Date 1:  
Requester:   COMMUNITY DEVELOPMENT BLOCK GRANT COMMISSION
Sponsors:  
Legislative History
DateActing BodyAction TakenMotion
6/19/2007Attorney's OfficeFiscal Note Required / Approval to the Comptroller's Office/Approval Group Completed on 7/3/2007
Notes: Community Development Block Grant Commission, Housing Committee
6/19/2007Comptroller's Office/Approval GroupFiscal Note Pending to the Attorney's Office Completed on 6/19/2007
Notes: Brasser
6/19/2007Attorney's OfficeReferred for Introduction
Notes: Community Development Block Grant Commission, Housing Committee
6/19/2007COMMON COUNCILRefer to the COMMUNITY DEVELOPMENT BLOCK GRANT COMMITTEE Completed on 9/6/2007
Notes: Additional Referral(s): Housing Committee
6/19/2007COMMUNITY DEVELOPMENT BLOCK GRANT COMMITTEERefer to the HOUSING COMMITTEE Completed on 9/12/2007
7/3/2007Comptroller's Office/Approval GroupApproved Fiscal Note By The Comptroller's Office (AFTER CC INTRO) to the COMMUNITY DEVELOPMENT BLOCK GRANT COMMITTEE Completed on 7/3/2007
Notes: Brasser
9/6/2007COMMUNITY DEVELOPMENT BLOCK GRANT COMMITTEEA motion was made by Robinson, seconded by Markofski, to Place On File Choudhury proposed a friendly amendment to refer the resolution pending the availability someone to answer questions whether it be next month or later on, which both Robinson and Markofski accepted. The motion passed by acclamation.Pass
Notes: Discussion highlights: · Infrastructure costs of new developments would not be eligible under new or old ordinance language. · New language is ambiguous regarding coverage of ancillary costs in the rent and administrative costs of developers.
9/12/2007HOUSING COMMITTEERefer to the HOUSING COMMITTEE Completed on 10/15/2008
Notes: Konkel moved referral to wait for the recommendation from the CDBG Commission. Second by Villacrez with unanimous approval.
9/12/2007Attorney's Office/Approval GroupApproved As To Form
10/4/2007COMMUNITY DEVELOPMENT BLOCK GRANT COMMITTEEA motion was made by Choudhury, seconded by Bartlett, to Refer to the COMMUNITY DEVELOPMENT BLOCK GRANT COMMISSION. The motion passed byvoice vote/other.Pass
Notes: Ald. Brenda Konkel asked the Commission to defer this item to the November meeting for questions about the new language that needed clarification.
10/31/2007COMMUNITY DEVELOPMENT BLOCK GRANT COMMITTEEThe Commission voted unanimously to refer the AHTF resolution to the December meeting.
Notes: 2. Amending Section 4.22 of the Madison General Ordinances to update language and terms in the Affordable Housing Trust Fund (AHTF) ordinance Alder Konkel has asked the Commission to refer this resolution to its December meeting after the Common Council has acted on the budget. Bartlett moved to refer the AHTF resolution to the December meeting. Choudhury seconded. Discussion highlights: · Bruer asked to have a Mayor’s Office representative to be present at the December meeting for questions about the language changes to the ATHF ordinance.
12/6/2007COMMUNITY DEVELOPMENT BLOCK GRANT COMMITTEEApproved As To Form
Notes:
1/3/2008COMMUNITY DEVELOPMENT BLOCK GRANT COMMITTEEThis Ordinance was Refer to the HOUSING COMMITTEE
Notes:
1/16/2008HOUSING AFFORDABILITY SUBCOM OF THE HOUSING COMApproved As To Form
Notes: The subcommittee agreed to establish a special Subcommittee meeting for noon, January 30, in order to discuss changes to the Housing Trust Fund ordinance.
1/30/2008Unpublished Meeting Data Pending*
2/13/2008Unpublished Meeting Data Pending*
3/5/2008Approved As To Form
4/2/2008HOUSING COMMITTEEKonkel discussed the Affordable Housing Trust Fund, which is still with the Affordable Housing Subcommittee. The purpose of bringing it to the Committee was to update everyone on some of the ideas to think about for the Affordable Housing Trust Fund and to ask if there are other ideas that should be discussed and added to the list. The Subcommittee’s intention is figuring out how to make the Affordable Housing Trust Fund work. The Subcommittee wants it to be functioning now instead of waiting until it gets to $10 million. The Subcommittee wants to make sure the money gets back in there, but do not want to just have a bank account set aside. They would like to put the money to use while they can and make sure they are targeting the right levels. One of the things the Subcommittee will be doing is looking at the various programs throughout the City and seeing what types of things are being targeted and what are not being targeted. The Subcommittee made a list, which was distributed at the meeting and Konkel read (attached). Porterfield said one of the discussion items was the theme of trying to figure out a strategy to grow towards the $10 million, but still use a portion of the funds now. The Subcommittee wants to figure out how to use a little every year and then use the other portion of it that we know we are going to get back in a method that is going to turn over quickly and potentially even provide some income. Brink said that Hickory Hurie informed them there is about $4 million in there right now. Day brought up that maybe of the new funds that come in, the Subcommittee use 75% of them and put 25% back in the fund. However, if they are actually out being used, it is not working towards the $10 million in a way. We are not looking at grants; we are looking at this actually being out there working now and growing from that. Villacrez asked if that is becoming the priority for the Affordable Housing Trust Fund and does that somehow affect what kind of initiatives the Committee does? If one program does not grow the fund, does the Committee not go down that direction right away or does the Committee have to further discuss. Villacrez would like to come up with some illustrations at the Subcommittee to see what it would look like and how long it would take to get to $10 million. Brink said that is where they are at and they have moved the discussion to a new meeting to make it easier for everyone to attend. Konkel did not want to make any decisions ahead of time and put out a proposal that everybody would not like. The only changes that are made right now are that she tried to get rid of the words “low income” and “very low income” because different type of programs have different definitions of low and very low. She put in 15/80%. Konkel wanted to put in 40/70%, but this makes everything more complicated because everything else is at 15/80%. In #3, Konkel clarified that the IZ Fund is something special and that it was set aside. On the third page, at the bottom, the $25,000 was the staff policy of how much per unit, so Konkel added in the extra $15,000 if you went below 50% AMI. This is open for discussion. The fund grows haphazardly. Whenever the City sells a piece of land, we have the opportunity, if we can get 15 votes, to put the money into the Affordable Housing Trust Fund. Two things have to happen: somebody has to notice the fiscal amount and there are equity kickers. Konkel does not know if there is a commitment to growing the fund by the Council, but she thinks a case can be made for it if there is a plan for more immediate results. Please share any thoughts with Curt Brink, Chair of the Subcommittee. Villacrez asked what Hirsch’ idea is for energy conservation and renewable fuel. Hirsch thinks the City can help people to do more than what the Building Code by itself mandates, and that it makes sense to do more than what the Building Code mandates. Hirsch thinks we should be giving incentives and assistance to do that. We have visited this topic once when Inclusionary Zoning was passed and we tried putting building standards in there, and were told by the State of Wisconsin that violated the uniformity of the multi-family Codes of their Building Codes, both one and two family and multi-family. We have to do this in a smart way so that we do not mandate some of these features, but if people want assistance, this seems to be the perfect fund to help people do some of this stuff for the benefit of targeted income people. Wilcox asked if there was any discussion on preservation. Day answered about long-term preservation and how that would look. The first order of business is to grow the fund and then approach it as a tiered basis. When you reach a goal, then deal with the next goal. The things that generate income are first. Look at each step and when the Fund grows to a certain point, then offer options A, B & C. When the Fund grows to another point, then offer options D, and so on. Mandeville asked about when money is going out to households, is there a priority for loans rather than grants? Would there be a priority for loans with certain monthly payback terms over deferred loans? Day said they have to decide where in that tube system those things are going to show up, in terms of benefiting the growth of the fund. Wilcox said that the Subcommittee has to take into consideration the administration of a loan fund. If you are talking monthly payments, you are talking significant administrative costs. If you are talking deferred loans, you can get it back when the title changes. There is a big difference. Porterfield thinks that at the Committee level, a plan or time frame should be developed to go through this process. Brink said it would be an Agenda item at the upcoming Subcommittee Meeting. NO ACTION AT THIS TIME
Notes:
5/7/2008HOUSING COMMITTEEHirsch referenced there was a brainstorming meeting and the Affordable Housing Subcommittee looked at some issues. Hirsch asked if there was further work that the Housing Committee wanted to do at this time or did the Housing Committee want to refer this issue to the Affordability Subcommittee to delve into the brainstorming list. Konkel was not sure what she wanted to do. Konkel is on both committees so she would be working on it either way. Chair Hirsch asked Hickory Hurie to be present at this Housing Committee Meeting for the 2008 Goals Discussion to get some of his final thoughts. Chair Hirsch also wanted to recognize Hickory Hurie in a personal way for his service. Porterfield asked if it would continue to be discussed at one of the committees. Konkel said the subcommittee would continue to work on this item. Hirsch indicated that on the Housing Trust Fund, in the Mayor’s State of the City, the Mayor made a proposal, merger with the County as far as public housing functions go. The Mayor saw the Affordable Housing Trust Fund as potentially being a resource to be shared with other communities. There was a meeting yesterday of a lot of staff people and County Supervisors, which Chair Hirsch was invited to. Prior to that meeting, there was a preliminary legal opinion issue, with Michael May and Ann Zellhoefer, to clarify that there are certain statutory restrictions on sharing funds between units of government. General purpose tax revenues raised in the City cannot be sent outside the City. Then there was discussion about what funds are now in the Trust Fund, what came from taxation and what came from land sale or something else, to try to get some preliminary sorting out of those resources. Chair Hirsch thinks that the prevailing viewpoint was that the merger was a very specific implementation strategy and that before we talk about merger, we needed to be talking about what is the point of the conversation and what are the synergies between Dane County’s public housing functions and our CDA functions. Also, if you conduct a little bit of that kind of discussion first, maybe merger would end up being a recommendation. However, maybe merger would not end up being the recommendation. So this group is going to meet again next month and Chair Hirsch will report back. Day arrived at 5:16 PM Porterfield asked about the focus of the conversation of the proposal by the Mayor and if it was to look at the public housing authorities functions being joined. What is the connection to this? Hirsch said that to the extent the public CDA, beyond operations, wants to develop housing sites or perhaps the Dane County Housing Authority wants to develop housing sites, sources of money are very nice to have to carry out the development activities. CDA has a number of sites, which are in need of redevelopment, and Chair Hirsch thinks that Mark Olinger will speak to that tonight when he comes up from UDC. Allied Drive is a development function, not a re-development. However, Truax is a redevelopment function and an expansion with new housing units. Romnes is waiting in the wings. Brittingham Triangle has a bunch of stuff there and is sitting on some very valuable real estate. Brink said the good thing about the opinion is site approval to where our tax dollars stay here. It was a good basic opinion as you could see it was going up to a Circuit Court, to Appeals. He was citing the right cases, where that money does not go outside of our district. Konkel thought the opinion went just a little bit farther and said, as to the other funds, you can only spend if you have a public purpose. Sparer thought it said the Council had to actually change the Ordinances to say they would do it for the “such and such” public purpose, which could be second-guessed whether it really was public or not. The spending of City money outside of the City had to have a public purpose for the City, even though we were spending it outside of the City, which perhaps it could, but that would have to be explained and justified. So it does not seem too likely. Konkel said Dane County is looking at an Affordable Housing Trust Fund as well. They are reaching a point where they are about to make some recommendations. However, they have the same problem that we have, which is no permanent source of funding. They may be interested in targeting lower AMI’s and three-bedrooms. They might also be doing a rental assistance piece to it. She does not know how close they are to final recommendations. Hirsch asked if anyone had thoughts on uses of the Trust Fund. Porterfield said he remembered the general idea that came out and seemed to have support at the subcommittee level, was to utilize a portion of the fund in something that was going to re-circulate more quickly, and potentially generate and help grow the fund. Day said that there was discussion of doing that in phases and building the fund and then the next step is adding some of the things the subcommittee is looking to do, in a second phase, and then more again in the third phase. So start with the things that generate that revolving fund and grow it, and then move from there to things that may not do things to grow the fund but meet the items we want to see dealt with by the fund. The third step is things that maybe even require some grants and money that will not come back. Villacrez asked how that competes with existing programs within the CDA or CDBG, where an individual would go to CDA or CDBG to get funds to rent abate an 8 unit and not have to pay it back. Day answered “not in that scenario”. Villacrez then asked if there were any other competitive instruments within the City that compete with that right now. Day said that they are not necessarily competing, maybe complementing. Hickory Hurie said sometimes there is never enough money, regardless of the source. The impact on the trust fund is that if it is used for interim measures and we have a 30-year affordability period, then we would have to make some policy adjustments to look at that. One of the uses that has been made of the trust fund is for construction, one construction loan, to an agency that already had a long-term affordability requirement because of other source of funding. Villacrez said he was told by an owner that there was a brochure that stated he could get money from CDA or CDBG. Konkel asked if it was on Lake Point, and Villacrez said no. Hurie asked if it was downtown. Villacrez said there was a flyer at a homebuyer seminar at The Villager the past Saturday. Day said it would be the Purchase Rehab that also has the feature that landlords were going to use. Day said there are specific conditions and it is a multi-faceted program that can be used for purchase rehab by an individual, for owner occupancy, and then there is a piece of that which can also be used for doing some upgrades to rentals. Day said she thought that piece of it had an interest rate with it, which Hurie confirmed. Sparer said the idea of having plans in the three stages is right as it preserves the bulk of the funds and to help it get to the size wanted. However, it uses it temporarily in the meantime without spending out the assets so that they are not there. Hassel asked if the trust fund money could be used for the SOS program, since they have financial difficulties. Konkel gave her an answer that some of the money could be used, but it would not cover wages. Konkel said it does not go towards operating funds. Hurie said the Housing Trust Fund is focused on the housing component, so if an agency wants to purchase a building in which to operate that program and it was residential use, then the agency could but it would not go to support any of the programmatic elements. It is basically for the capital costs and the development costs to buy or maintain the property. Hurie provided a handout, an overview of the City’s housing programs, and reviewed it with the Housing Committee. There are three groups of customers (Columns A, B & C) and two ways to serve them. The three groups of customers are: Column A – people who own homes (44% of households in Madison) Column B – people who are looking to buy (renters or Column A people) Column C – programs for renters and homeless people Above the fold and below the fold at the dark line are programs that directly assist households, by dollars, vouchers or rehab loans. Below the fold are companies helping people or that sell to people. It is a six-box matrix to help us understand the other side. There are not any programs to help third parties indirectly, for people already living in a home. On the other side of the handout, there are three columns showing a three-year picture of the actual number of households who entered into or who were actually in the home that were helped in that year. The dollar figures, the next three figures in each mega-column, are the actual dollars that were spent. There is not necessarily a connection between the dollars spent in a particular year and people who were assisted. It really depends on the nature of the programs. If a dollar went out for a housing voucher, by and large that housing voucher helped the numbers of people that are listed there. For the development programs, there could be a three-year or five-year window. If you spend a dollar in 2004, in 2007 somebody moves in. Hurie presented some observations. Markets are up and down. When he looks at a housing program for a city, it needs to have different programs that work well in those kinds of markets that we are experiencing. It helps to have a wide portfolio for this type of market. Second, it is not just a broad market; there are sub-markets within that and they go on their own cycle as well. Sometimes the same tool in those sub-markets will operate differently. Hurie gave an example from about ten years ago, wherein there were not just sub-markets. The market in Rockford had a lot of vacancies. The Section 8 holder was a valued household, a valued renter, in that market. At the same time in Madison, there was a tight market and somebody who had a Section 8 voucher was not as valued as the comparable household in Rockford because of the transaction costs. Third, in each of these, there is a time and development diminishing. If you want to look at the cost per program of the affected unit, it is not here, you have to look at other documents that line up those over time on a more specific basis. Hurie said the 2007-dollar, which is expended, does not necessarily fit the household. Fourth, some of the dollars do not come back. Some are invested or loaned and do come back at some point. Some of the dollars you see expended here were first obtained by the City in 1984, 1985 or 1986 and they have come back multiple times. That is something you will not find on this handout; you have to go to other documents to look at that information. On the matter of the Trust Fund, Hirsch asked what the Committee wanted to do. A motion was made by Porterfield, seconded by Hassel, to Refer this item to the HOUSING AFFORDABILITY SUBCOM OF THE HOUSING COM. The motion passed by voice vote/other, with Hirsch abstaining.Pass
Notes:
9/3/2008HOUSING COMMITTEEApproved As To Form
9/18/2008Attorney's Office/Approval GroupThis Ordinance was Refer to the HOUSING COMMITTEE
Notes:
10/15/2008HOUSING COMMITTEEThis issue comes from the Affordability Subcommittee. Hirsch said this changes some of the terminology to clarify the households that are eligible to be assisted from the Housing Trust Fund. The second part is in Section 4, Trust Fund Distribution; previously the Trust Fund was restricted. The desire is to get this fund out onto the streets and available to help to strengthen this economy. The restriction on the availability of funds is struck and some of the uses are expanded to encourage people to use the Fund both for rental rehab and for creations of new dwelling units. Konkel said in 4A, it says if there is over a million dollars in that, up to half of whatever that excess over a million dollars is, can be spent on any one project. Before that, it just said only if it is over 10 million could you spend more. So now, if there is 4 million dollars in the Fund, then 3 million dollars is available to be spent, and up to half of that can be spent on any one project. So 1.5 million would be the amount that could be spent on one project, in this scenario. Konkel said they did not want everything going into one project. Another thing of concern is where it says it can be used for some operating funds. The intent of that is to say that if we took some money and made it available for a down-payment program, you just cannot give the money to the down-payment program and not have some money available for staff to administer, and that is the intent of that language. Wilcox asked if there would be a limit on that, and Konkel said it would probably be up to the CDBG Commission to determine that. Konkel said 4b is the location where it expanded what the money can be spent for. In 4m, that was actually, the working assumption was $25,000 per unit, language that we put there so we had a record of it somewhere. Hirsch noted that when Konkel added retro-rehabilitation and accessibility modifications as permissible uses, some of the language, like in the last sentence of the use talks about the creation of assisted units, we should say the creation or rehabilitation of assisted units, because now we’re adding those uses. Konkel said that should be part of the motion if the Housing Committee passes it tonight. Hirsch thanked Konkel for pursuing this issue. A motion was made by Sparer, seconded by Wilcox, to RECOMMEND TO COUNCIL WITH THE FOLLOWING RECOMMENDATIONS - REPORT OF OFFICER, with the addition of “or rehabilitation/rehabilitated” in 4b and 4m. In 4b, last line "rehabilitation or creation of Assisted Units". In 4m, second line, "created or rehabilitated by a disbursement from the Trust Fund. For each Assisted Unit created or rehabilitated...". The motion passed by the following vote: Pass
(12:0)
Notes: A motion was made by Sparer, seconded by Wilcox, to RECOMMEND TO COUNCIL WITH THE FOLLOWING RECOMMENDATIONS - REPORT OF OFFICER, with the addition of “or rehabilitation/rehabilitated” in 4b and 4m. In 4b, last line "rehabilitation or creation of Assisted Units". In 4m, second line, "created or rehabilitated by a disbursement from the Trust Fund. For each Assisted Unit created or rehabilitated...".
11/6/2008COMMUNITY DEVELOPMENT BLOCK GRANT COMMITTEEThis Ordinance was Refer to the December COMMUNITY DEVELOPMENT BLOCK GRANT COMMISSION Meeting.
Notes: Bruer moved to refer to the December meeting. Pham-Remmele seconded. The Commission unanimously approved a motion to refer Item 06811 amending Section 4.22 of the Madison General Ordinances to update language and terms in the Affordable Housing Trust Fund ordinance to the December meeting.
12/4/2008COMMUNITY DEVELOPMENT BLOCK GRANT COMMITTEEThis Ordinance was Rereferred to the COMMUNITY DEVELOPMENT BLOCK GRANT COMMISSION. Bruer moved referral to the January meeting/Rummel seconded. Unanimous approval.
Notes:
1/8/2009Unpublished Meeting Data Pending*
1/27/2009COMMUNITY DEVELOPMENT BLOCK GRANT COMMITTEEThis Ordinance was Refer to the HOUSING DIVERSITY PLANNING AD HOC COMMITTEE
Notes:
3/5/2009COMMUNITY DEVELOPMENT BLOCK GRANT COMMITTEEChoudhury moved referral. Bruer seconded. Unanimous approval.
Notes:
11/5/2009Approved As To Form
11/5/2009COMMUNITY DEVELOPMENT BLOCK GRANT COMMITTEEAlder Bidar-Sielaff motion for staff to provide a status report at the next meeting. O'Callaghan second. Unanimous approval.
Notes:
1/14/2010Clerk's OfficeThis Ordinance was RECOMMEND TO COUNCIL TO PLACE ON FILE WITHOUT PREJUDICE -REPORT OF OFFICER
Notes: Place on file without prejudice for lack of a sponsor.
1/19/2010COMMON COUNCILA motion was made by Ald. Bruer, seconded by Ald. Clear, to Place On File Without Prejudice. The motion passed by voice vote/other.Pass
Notes:
Approvals
ApproverDateApproval Status
Dean Brasser9/23/2008Approved

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