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HomeMy WebLinkAbout1999 11-16 HCM i MINUTES OF THE PROCEEDINGS OF THE HOUSING COMMISSION OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND STATE OF MINNESOTA REGULAR SESSION NOVEMBER 16, 1999 CONFERENCE ROOM B CALL TO ORDER The Brooklyn Center Housing Commission was called to order by Chairperson Erickson at 7 p.m. ROLL CALL Chairperson Ernie Erickson, Commissioners James Lano, Muhammed Okoya Lawal, Lloyd Deuel, Kathleen Carmody, Michael VonDeLinde, Mark Yelich and Donald Arm. Also in attendance was Community Development Specialist Tom Bublitz. Councilmember Ed Nelson was attending a Council Work Session and was absent from the meeting. APPROVAL OF AGENDA There was a motion by Commissioner Carmody and seconded by Commissioner Deuel to approve the agenda as submitted. The motion passed. APPROVAL OF MINUTES October 19, 1999 There was a motion by Commissioner Carmody and seconded by Commissioner Deuel to approve the minutes of the October 19, 1999 Housing Commission meeting as submitted. The motion passed. CHAIRPERSONS REPORT Chairperson Erickson noted that in the past Commission Chairs had received Council minutes and noted that he has not been receiving the minutes. The staff liaison noted he would look into this matter and see whether or not the minutes could be sent to the Chair. CONTINUED DISCUSSION OF HOUSING IMPROVEMENT AREA AND REVIEW OF BROOKLYN PARK TOWNHOUSE LOAN PROGRAM Chairperson Erickson noted that at the last Housing Commission meeting the issue of 3 loan money offered by Brooklyn Park was addressed by the representatives from the townhouse associations. Chairperson Erickson recognized Mr. Roger Gorman, CEO of Impact Management Services a corporation in Brooklyn Center that manages townhouse associations. Mr. Gorman distributed information to the Commission showing a proposed budget for Mallard Pond Twinhome 11 -16 -99 -1- a Association demonstrating that a 3 interest rate was needed to make the loan payments feasible for this association. For comparison purposes an 8 interest rate was also analyzed in a cash flow table. It was Mr. Gorman's contention that a 3 interest rate was necessary to make the loan feasible for the townhouse associations he represented. The Community Development Specialist explained that he had met with staff from the City of Brooklyn Park and Brooklyn Park staff had informed him that the 3 loan money, initially offered through Brooklyn Park's Townhouse Loan Program, was an introductory rate and that the current rate on loans for townhouse associations in Brooklyn Park is at 7 He also noted that Brooklyn Park did not make use of the state Housing Improvement Area Statute but instead developed its' own program because they felt the state Housing Improvement Area Statute was too cumbersome. Brooklyn Park used money from a special set aside of funds from tax increment received on various projects. The set aside was developed through special legislation which provides a certain percentage of tax increment dollars be set aside for housing programs. Mr. Gorman continued to review the handout on the reserve analysis and cash flow information regarding 3% and 8% interest rates on loans to the associations he manages. He noted that the Mallard Creek and Mallard Pond Twinhomes Associations are looking for funds for replacement of siding and gutters. He noted the association fee is currently $156 per month at Mallard Pond and also noted that the association could only handle a loan if it was at a 3 to 5 interest rate. Commissioner Arm inquired what would happen in the associations if 3 money was not available. Mr. Gorman replied that the association could special assess for the money or simply not do the siding and gutter replacement. Mr. Gorman also noted that he manages associations in Brooklyn Park and that he is aware of associations who have a need for loans to d4 improvements but have refused the 7% money as it was not feasible for them at a 7% rate. Commissioner Carmody questioned how the City could arrive at a 3 interest rate for loans. The Community Development Specialist again reviewed the City's policy on interest rates for public improvements which essentially specifies that the interest rate is to be 2 points above the interest rate of the last bond issue of the City with a ten year term on the loan. Chairperson Erickson inquired how many associations Mr. Gorman's company manages in the City of Brooklyn Center. Mr. Gorman replied that he manages the 3 associations listed, Mallard Pond Twinhomes, Mallard Creek and Brookwood. Commissioner Arm expressed concern as to whether or not the City could actually afford to offer a 3 interest rate. Commissioner Deuel noted that the Housing Commission is concerned about proper maintenance of townhomes and that this is an important issue in his opinion. Chairperson Erickson referred back to the City of New Hope townhouse loan project reviewed at the last meeting and accomplished under the Housing Improvement Area Act. He noted that the New Hope townhouse complex had a long list of serious problems and failures with their units and the total cost was $600,000 for repair of 30 to 40 units with a significant amount goino for administrative and inspection costs. 11 -16 -99 -2- Commissioner Yelich commented that he was concerned about subsidizing a loan interest rate for a specific group and would prefer that market rate financing be used for any loan program. Commissioner Carmody commented that, a few years ago when the City Council reviewed the Deferred Loan Program for single family homes, the City could only spend $15,000, through its CDBG program, for home improvements even though many of the homes needed $25,000 to $35,000 to complete the repairs. This resulted in accomplishing only a small amount of the repairs needed on each home and at that time the Council looked at the concept of dividing the City into districts and to do loans on a larger geographic scale and also to provide enough money to each homeowner to complete all the necessary repairs. The concept at that time was to buy down the interest rate on the loans and at the time it was her recollection that staff thought the rate could possibly be bought down to 5 She noted that there were problems with CDBG regulations in accomplishing a program of buying down interest rates and the project was not pursued. Chairperson Erickson inquired of Mr. Gorman as to whether or not the problems with the associations he represents are severe enough for associations to consider a market rate loan. Mr. Gorman replied that his believe was that the maximum interest rate the associations could afford would be 5 Chairperson Erickson noted that this past weekend he drove by the Brookwood Townhouse complex noting that they are very attractive looking units and are well maintained. He noted that it appears, from talking to the association representatives and Mr. Gorman, that the 3 associations are spending a considerable amount per year to maintain their properties in a quality manner. Chairperson Erickson invited comments from the commission regarding a potential loan program for townhouses in Brooklyn Center. Commissioner Arm suggested that the Housing Commission obtain some input from the City staff, in particular the Finance Director, with regard to what interest rates could be for developing a loan program. Commission members requested the Community Development Specialist to discuss the issue of developing a townhouse loan program with the City Manager and Community Development Director and also to review any potential revenue sources for such a program. Commissioner Lano noted that he recently had home repairs done on his single family home and paid a 9% interest rate for the money. He questioned why townhouse associations could not absorb a similar interest rate. He noted that he had lived in a townhouse development and expressed the concern that townhomes are requesting special financing for home repairs. Commissioner Arm made a motion that the City's Community Development Director or another staff person attend the next Housing Commission meeting to discuss potential revenue sources and potential interest rates for a townhouse loan program. 11 -16 -99 -3- Chairperson Erickson noted that the staff may be able to do this with a memo rather than attending the meeting. Commissioner Arm revised his motion to state that the Housing Commission's consideration of a loan program for townhouse associations be tabled pending further information from the City's Community Development Director or Finance Director with regard to interest rates and revenue sources. The motion was seconded by Commissioner Deuel. The motion passed. Commissioner Carmody suggested that the Housing Commission also obtain some input from the City Council regarding whether or not they would be interested in pursuing a townhouse loan program. REVIEW OF OCCUPANCY LIMITS SURVEY OF CITIES The Community Development Specialist noted he had surveyed other cities with regard to their ordinances relative to occupancy limits and noted he had received results from Brooklyn Park, Maple Grove, Plymouth, Robbinsdale, New Hope and Crystal. Also included were the occupancy standards listed in the Uniform Housing Code and the Uniform Building Code. Commission members briefly reviewed the memorandum from the City Attorney's office regarding occupancy limits. Commissioner Yelich questioned whether the provisions inSection 319:55 subdivision la and b of the Brooklyn Park ordinance, which addressed the limitation -of occupancy of a rental dwellinwa unit to a specified number of square feet of habitable room floor space and subdivision 2, which specified not more than one family, except for temporary guests, shall occupy a dwelling unit, were mutually exclusive or worked in conjunction. Commissioner Carmody stated that she believed both subdivisions worked together and that one did not exclude or make an exception for the other. Chairperson Erickson left the meeting at 7:55 p.m. In discussion of the existing provisions of the City code with regard to occupancy, Commissioner Carmody stated that she does not believe the City is enforcing the ordinance now and that she does not see how this type of ordinance would be enforceable. Commissioner Yelich inquired whether the current code is adequate and if not what recommendation should the Housing Commission make to the City Council. Chairperson Erickson returned to the meeting at 8 p.m. i Commissioner Lano inquired as to what brought the issue to the Housing Commission in the first place. The Commission discussed briefly how the issue came before the Housing Commission noting that it was contained in the Council's 1999 goals and that generally the occupancy issu* 11 -16 -99 -4- addressed single family homes in the City. It was noted that one of the items that brought the issue to the attention of the Council was houses that had a great number of cars in the driveway indicating a large number of people living in the house. Commissioner Carmody again referred to how the City could enforce any change in the ordinance making it more restrictive when it appears the existing ordinance is not possible to enforce adequately. After continued discussion by the Housing Commission there was a motion by Commissioner Carmody and seconded by Commissioner Deuel to recommend to the City Council, after consideration by the Housing Commission of the city's existing occupancy ordinance provisions and, after reviewing occupancy ordinances from numerous cities, that the existing occupancy requirements as contained in Chapter 12 of the Builidng Maintenance Code, should not be amended. Upon a vote being taken on the motion, the following voted in favor: Commissioners Erickson, Lano, Okoya Lawal, Deuel, Carmody, VonDeLinde and Yelich. Voting against: Commissioner Arm. There was a motion by Commissioner Yelich and seconded by Commissioner Arm that if there are concerns about the occupancy of dwelling units in the City, the City should address the issue by enforcing the existing ordinance. The motion passed. OTHER BUSINESS Commissioner Deuel noted that information from the last Housing Commission meeting inferred that the townhouses built at Brookwood, Mallard Creek and Mallard Ponds may have been built with inferior products, and in the case of the Mallard Pond area, built on swampy ground. Commissioner Deuel inquired as to whether or not these kinds of things are still occurring or has the situation with regard to construction materials improved. Chairperson Erickson noted that sometimes products on the market that have been approved for construction have inadequate testing. He noted it is known that some products approved for use do not work and he cited the example in the past of plastic water pipes which were approved for home construction and which later failed in performance. He noted the plastic pipes went on the market and were not adequate for home construction. He noted that most of the plastic water pipes were used in the southern United States and not in Minnesota. Commissioner Arm noted another example of an item that had been approved for home construction was aluminum wiring which proved to be a fire hazard. Commissioner Deuel noted that he had attended a Townhall meeting the other night hosted by Representative Phil Carruthers and Senator Linda Scheid. He noted that at the meeting category 1 homes were discussed and he noted that currently there is a moratorium on the implementation of category 1 homes. He noted that he wondered why the category 1 home provisions cannot be adopted since they appear to provide a better constructed home. Commissioner Yelich stated that he would like the Housing Commission to look at the enforcement sections of Chapter 12 specifically 12 -1001 to 12 -1302 at the next meeting. 11 -16 -99 -5- There was a general consensus of commission members to put a review of Chapter 12 on the next agenda. Chairperson Erickson inquired if there was any additional business. There was no additional business brought forth by the Housing Commission and Chairperson Erickson entertained a motion for adjournment. Commissioner Okoya -Lawal noted that he would not be able to attend the December Housing Commission meeting since he had a previous commitment related to his work. ADJOURNMENT There was a motion by Commissioner Carmody and seconded by Commissioner Arm to adjourn the meet' g. Th e motion passed. The Brooklyn Center Housing Commission a ur 0` p.m. r a�irpersor� 11 -16 -99 -6- r