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HomeMy WebLinkAbout2016-0926 VLHA Meeting MinutesMinutes Vail Local Housing Authority (VLHA) September 26, 2016 at 3:00 PM Attending the meeting were members: Molly Murphy Mary McDougal Steve Lindstrom James Wilkins Absent: Scott Ashburn Town staff attending the meeting: Alan Nazzaro George Ruther Special Invitee: Jill Klosterman A quorum of VLHA Members being present, the meeting was called to order at 3:05 PM. Eagle County Presentation The approval of minutes was postponed in deference to our special guest speaker Jill Klosterman, Housing Director for Eagle County. Ms. Klosterman was aked about the upcoming election and the County’s Housing Ballot Initiative. She stated that it is estimated that the sales tax increase being requested of voters would generate approximately $5.4 million on the high end and $4.2 million on the low end. There had to be an estimate in the initiative as per the TABOR amendment requirement. Any amount over that estimate has to be rebated to the citizens. The Vail Valley Partnership (Chris Romer) is running the campaign very low-key. When asked how the .3% increase was chosen, she replied that in the pre-election polling voters questioned preferred .3% over a .1% by a wider margin. Board members told her that local voters in Vail want to know, who will control the money and that it looks like the County is asking for a blank check, since no projects were identified. Ms. Klosterman circulated a chart showing the possible uses of the funds, which were in five main categories: New home ownership projects New rental projects Better utilization of existing housing stock (including deed restriction purchases) Down payment assistance loans Education (smallest piece at 2%) Mr. Wilkins interjected that the ERWSD Board voted to support the initiative, but another smaller special district board that he sits on did not, because of the lack of specificity on the spending side. Ms. Klosterman was asked if the funding would be spent on a pro-rata basis, i.e., funds going back to a community in proportion to the funds generated in that community. She answered that no it would not be spent in that manner, because it is a county-wide tax it comes back to Eagle County and the BoCC will decide. The Commissioners are going to appoint an advisory board to make recommendations on expenditures. The Board will have wide representation from the municipalities, but hopefully not all officials, but rather subject matter experts. The intent is to spread the funding around the county, but have the ability to contribute to specific projects as needed. The point was made that Vail produces about 40% of the sales tax revenue in the county and represents about 25% of the total number of jobs in the county. For our situation down valley development isn’t always helpful. Ms. Klosterman noted that land banking is one of the potential funding avenues, but it must be done effectively, acquiring land near where it is needed. Criteria will be developed to differentiate potential projects for funding and location will be a consideration. It was noted that there will be voters, who think that if the tax increase passes the housing problem is solved. There is much more to be done. Transportation down valley is an issue, need interceptor lots with shuttles to Vail for that to work. Also, need to fix the rules to help, e.g., density, parking requirements, site planning, etc. Ms. Klosterman said that the county is working on the process to help speed up development approvals and zoning issues. The entire process for the funding is yet to be defined. BoCC will decide if Advisory Board or Housing Authority will have spending authority. The discussion moved to the possibility of VHS administering the deed restriction purchase program for the VLHA. Ms. Klosterman stated that she was not prepared at this time to make a presentation on administering the program, because there are too many unknowns at this time. She asked whether the program would be exclusive to Vail. The Board’s response was that initially the funds would be spent locally. The VLHA has been given fiduciary responsibility for spending TOV funds. The overall concept is to place qualified occupants in local housing. Currently that means people working at least 30 hours per week in Eagle County. There is no target market for the program, just obtaining 1000 deed restrictions by 2027. We will take whatever we can get to begin with. The market will determine the value. We don’t care about the price of the property. We are trying to create a secondary market. We are buying an interest in real estate not the property itself. That being said, we have to be careful in the first ten sales not to set the market too high. We need to work out the mechanics of the process, the legalities, and the basic criteria for the deals. If the purchase has tax ramifications, will structure the deals to work, i.e., setting up payments over time, etc. The current thinking is that we will set up an initial set of criteria and test them out, making adjustments as we go. Mistakes will be made early on, but we can learn from those and adjust. We do know that there will be: No formula used to calculate the price of DRs No percentage of the value will be used No anticipated maximum sales cap The question becomes does VHS have the administrative capability to run the program? VHS needs to become educated on the deed restriction purchase program and then communicate that to clients and realtors to start. Legally, the sale of the deed restriction must be through a purchase sales agreement separate from the property transaction. A question was postulated as to whether the deed restriction purchase reduces the available amount of the mortgage on a property. We need to talk to appraisers, who work with deed restricted properties and other lenders active with those properties. VHS staff will share contacts in both of those arenas. Meeting Notice and Approval of minutes The Board considered the minutes sent from the VLHA Meeting held on 8/23/16. James Wilkins moved to approve the minutes as submitted. Molly Murphy seconded the motion. The motion passed unanimously. Update on Roost Property VLHA will meet with representatives of the developer to discuss the process moving forward and give advice on how to get things going in the right direction. The Board may suggest trying to partner on the project with the TOV, if the Town is involved, it could move things forward. This could be the first of many such projects where the VLHA purchases deed restrictions from the developer to help get more units and projects built. Discussion of Mechanics of Housing Program The discussion began with the question relating to the previous discussion, will the zoning changes we have discussed be pushed forward that could ease the process for developers, e.g., housing overlay zone, commercial district changes, etc. Those changes will be made in time , as time allows, but this deed restriction purchase program will move ahead more quickly. To move forward, we need to define: Roles and responsibilities of the VLHA The formalized procedures and criteria for decision making Timing issues of meetings and more formal rules, i.e., use of executive sessions, Roberts rules of order, etc. Will there need to be a “loan committee” per se? If so, Board needs to understand the 4 C’s of credit: Capacity to pay back the loan (income and other factors) Capital available Collateral (value of security) Credit (scores) It was also discussed that a seldom mentioned but additional C that is considered is Character. It may be necessary to have additional training and resources available for the Board. Other issues discussed included: underwriting criteria, enforceability of restrictions, remedy for noncompliance. The Board also discussed what happens in the event of default? Will VLHA be in position to cure the default or have a first right of refusal on the property to protect our interest in it? The process for applications was also discussed. Staff and/or VHS would package deals and bring them to the VLHA. Process time, after a completed application was submitted (contents to be determined) VLHA would meet to consider. How and when the Board meets is TBD. Bank Loan Committees typically meet weekly and there is an emergency group of three that is available to take care of urgent requests in the interim. A word of caution was offered that we don’t want to buy questionable deed restrictions under questionable circumstances, so we need to be careful. We will be exposed to market risk and we need to minimize that exposure. We need to determine how we will value the restrictions. It would be good to get an appraiser’s idea of the DR constriction on price. Comparables are hard to come by for DR properties. We may need to commission an appraiser to assist with determining the values. There are different aspects to the value, e.g., what is the value of buying a deed restriction vs. building new units, what is the value of having units in town vs. down valley. The first sales we do will begin to set the basis of a comparable market. Less is more, when it comes to the purchase price and more units is better than less quantitatively. We need to consider all deals whether rental units or owner-occupied, larger units or smaller units. We need to prepare education packets to market the program. We need a webpage with accessible information. We need legal disclaimers and hold-harmless clauses and research whether there is any applicability of Fair Housing Laws to this program. We may also need new deed restrictions like a Resident Only Restriction for people, who live here full time but work for out of area companies, people on disability pay, who can’t work 30 hours per week, etc. Next Meeting Due to the amount of work to be done to get the deed restriction program up and running it was decided that the VLHA will start meeting on the second and fourth Tuesdays of the month until further notice. The Next regularly scheduled VLHA Meeting will be held at 3:00 PM on October 11, 2016 in the Large Conference Room at the Community Development Office. There being no further business the meeting adjourned at 6:00 PM. Respectfully Submitted, ____________________ Housing Staff INTRODUCED, READ, ADOPTED AND APPROVED this ______ day of ___________________, 2016.