82-17142 RESOLUTION NO. 82-17142
A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF
MIAMI BEACH FLORIDA, APPROVING AND ADOPTING SUP-
PLEMENTAL TERMS AND CONDITIONS FOR THE COMMUNI-
TY DEVELOPMENT MULTI-UNIT RESIDENTIAL REHABILITA-
TION PROGRAM, PROVIDING AUTHORITY TO THE LOAN
REVIEW COMMITTEE TO SELECT REHABILITATION
PROPOSALS FOR PARTICIPATION IN HUD'S RENTAL REHA-
BILITATION PROGRAM DEMONSTRATION AND TO GRANT
WAIVERS AS SET FORTH IN THE SUPPLEMENT TO CARRY
OUT THE PURPOSES OF THE DEMONSTRATION
WHEREAS, the City of Miami Beach has included in its Community
Development Block Grant Program application, a program designed to assist in the
rehabilitation of privately owned multi-unit residential properties; and
WHEREAS, the City Commission of the City of Miami Beach on March 18,
1981, by Resolution Number 81-16603, established a Loan Review Committee for the
program and on November 18, 1981, by Resolution Number 81-16828 approved and
adopted the Revised Policy Handbook for the Multi-Unit Residential Rehabilitation
Program; and
WHEREAS, on August 27, 1982, the City of Miami Beach was selected as a
participant in the U.S. Department of Housing and Urban Development's Second Round
of the Rental Rehabilitation Program Demonstration; and
WHEREAS, in order to carry out the federal regulation requirements and
concepts of the Demonstration under the Multi-Unit Residential Rehabilitation
Program, supplemental terms and conditions for the program are required; and
WHEREAS, the City Commission deems it to be in the best interest for the
health and safety of the citizens of Miami Beach that the Supplemental Terms And
Conditions - Multi-Unit Residential Rehabilitation Program, dated September 15,
1982, is attached hereto and made a part hereof;
NOW, THEREFORE BE IT DULY RESOLVED BY THE CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, that the Supplemental Terms And
Conditions - Multi-Unit Residential Rehabilitation Program are hereby approved and
adopted;
BE IT ALSO DULY RESOLVED BY THE CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, that the Loan Review Committee for the Multi-Unit
Residential Rehabilitation is hereby approved and authorized to select rehabilitation
proposals for rehabilitation financing under the Demonstration and to grant waivers as
set forth in the Supplemental Terms And Conditions as necessary to carry out the
purposes of the Demonstration.
PASSED AND ADOPTED this 6th day of O c t ob a 1982.
MAYOR
ATTEST:
CITY CL RK
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LEGAL DEPT.
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OFFICE OF THE CITY MANAGER CITY HALL
ROB W.PARKINS 1700 CONVENTION CENTER DRIVE
CITY MANAGER TELEPHONE: 673-7010
COMMISSION MEMORANDUM NO. 630-82
DATE: October 6, 1982
TO: Mayor Norman Ciment and
Members of the City Commission
FROM: Rob W. Parkins
City Manager
SUBJECT: Supplemental Terms And Conditions - Community Development
Multi-Unit Residential Rehabilitation Program
On August 27, 1982, the City of Miami Beach was selected as a participant in HUD's
Second Round of the Rental Rehabilitation Program Demonstration. A review of the
Demonstration requirements and the program requirements for the City's CDBG Multi-
Unit Residential Rehabilitation Program, reveals that the two programs are similarly
aligned in concept and design. So closely aligned, that with adoption of these
Supplemental Terms and Conditions, the City cannot only quickly and effectively
implement the requirements and concepts of the Demonstration, but will also be
prepared to enter into and participate in the new Rental Rehabilitation Block Grant
program proposed by HUD for fiscal year 1983.
The primary purpose of the supplement is to implement the specific concepts and
requirements of the Demonstration utilizing many of the existing policies and
procedures already established for the City's Multi-Unit Residential Rehabilitation
Program. The supplement also provides authority to the City's Loan Review
Committee to select rehabilitation proposals for the Demonstration and to grant
waivers to existing policies under the City's program which conflict in concept or are
not permitted under the Demonstration regulations.
The attached Supplemental Terms and Conditions will become part of the City's Rehab
Policy Handbook.
ADMINISTRATION RECOMMENDATION:
The Demonstration is viewed as a forerunner to a new Rental Rehabilitation Block
Grant program proposed by HUD in legislation. At the minimum proposed appropria-
tion of $150,000,000 nationally, preliminary estimates indicated that Miami Beach as
an "entitlement city" under the Rental Rehabilitation Block Grant program would
receive approximately $230,000 in additional Block Grant funds for FY-83 rental
rehabilitation. At the maximum funding level, the figure could be as high as$920,000
in additional funds to the City.
It is recommended that the City Commission approve the Resolution.
AGENDA
ITEM
DATE
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September 15, 1982
SUPPLEMENTAL TERMS AND CONDITIONS
MULTI-UNIT RESIDENTIAL REHABILITATION PROGRAM
Special Policies and Requirements For Implementation Of
HUD's Rental Rehabilitation Program Demonstration Under
The City of Miami Beach Community Development
Multi-Unit Residential Rehabilitation Program
A. Purpose - The purpose of these special policies and requirements is:
1. To identify City policies as set forth in the Revised Policy Handbook
for the Multi-Unit Residential Rehabilitation Program dated
November 18, 1981, which conflict in concept, or are not permitted,
under the federal regulations for HUD's Rental Rehabilitation
Program Demonstration;
2. to provide a method for the granting of waivers to these policies to
property owners whose rehabilitation proposals are selected for
rehabilitation financing under the Demonstration;
3. to implement specific requirements of HUD's Rental Rehabilitation
Program Demonstration, not presently being implemented under the
City's rehabilitation program, for rehabilitation proposals selected
for participation in the Demonstration; and
4. to employ alternative methods, not presently being utilized under the
City's rehabilitation program, which when utilized for Demonstration
projects, will help achieve one or more of the program concepts of
the Demonstration.
The above indicated items are necessary to implement the required rehabilitation
program concepts under HUD's Rental Rehabilitation Program Demonstration utilizing
the existing program documents for the City's Multi-Unit Residential Rehabilitation
Program. The Demonstration federal regulations are set forth in the Federal Register,
Vol. 47, No. 117, Thursday, June 17, 1982, Notices. On August 27, 1982, the City of
Miami Beach was selected by HUD to participate in the second round of the
Demonstration.
B. Authority For Selecting Rehabilitation Proposals For The Demonstration, and
Authority For Granting Waivers
The Loan Review Committee will review and select rehabilitation proposals for the
Demonstration. In most cases, proposals will be processed under the existing policies
and procedures. However, if a rehabilitation proposal is selected for participation in
the Demonstration, these special policies and requirements shall apply:
1. Eligible Property Owners - To be eligible for rehabilitation
assistance, the property intended for rehabilitation must be owned by
private, for-profit owners. Non-profit organizations may not
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September 15, 1982
participate in the Demonstration as property owners. Non-recourse
lending is not permitted. Participating lenders and borrowers will be
made aware of this requirement.
2. Rehabilitation Standards - Properties intended for rehabilitation
must not only meet the City's existing Property Rehabilitation
Standards, but must also meet the Rehabilitation Standards set forth
in the Demonstration Notice, Section 4.4. These additional standards
include the Section 8 Existing Housing Quality Standards (HQS) and
HUD's Cost Effective Energy Conservation Standards.
3. Rehabilitation Financing - The Financing Plan for the Multi-Unit
Residential Rehabilitation Program is described on pages 5, 9, 27, 28,
and 29 of the Revised Policy Handbook and presently offers fixed
interest rates to borrowers at six and ten percent. The discounted
interest subsidy method used to write-down the capital costs of
financing rehabilitation is consistent with the intent of the
Demonstration Notice and will continue to be utilized for
Demonstration projects. However, one of the major concepts of the
Demonstration is to provide a level of financial subsidy to
rehabilitation projects so that operating costs, debt service and a
reasonable profit can be supported at market rents. To achieve this
concept, certain rehabilitation proposals may require either a larger
or a lesser amount of financial subsidy than the amount presently
available under the City's existing financing plan. Consequently, the
Loan Review Committee may, if determined appropriate by the
Committee, grant a waiver to the specified interest rate set forth in
the plan to achieve this concept. The waiver will only be granted
when the following conditions of the rehabilitation proposal are met:
a. The owner is providing a substantial equity investment as
part of the rehabilitation proposal;
b. the amount of the financial subsidy to be provided by the
City does not exceed 50 percent of the cost of
rehabilitation; and
c. the amount of the subsidy, which may be adjusted either
above or below the present interest rates of six and ten
percent, will insure that the project being rehabilitated
will support all operating costs, debt amortization and a
reasonable profit to the owner at market rents.
Guaranteed artificially high rental incomes to property owners and/or
public guarantees to protect an investor against market risks are not
permitted.
4. Rental Subsidies - One of the basic concepts of the Demonstration
is to rehabilitate rental units at market rents which are self-
supporting without the need for Section 8 certificates to make the
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September 15, 1982
project economically feasible. Consequently, rental restrictions,
controls or agreements are not permitted under the Demonstration.
The Loan Review Committee will waive the Required Rental Levels
requirement of the City's program, as set forth on pages 12, 34 and
38 of the Policy Handbook, for Demonstration projects. Instead,
property owners shall execute a certification as specified in Section
4.11 of the Demonstration Notice. The certification requires that
property owners adhere to the following conditions:
a. Property owners, as a condition of participation in the
Demonstration, and not as a Section 8 Existing Housing
Program requirement, shall not refuse to rent to tenants
holding Section 8 Existing Housing certificates except for
good cause such as refusal to rent to tenants who
previously failed to pay their rents, and/or to maintain
their apartment, or to those who otherwise were in
violation of the terms and conditions of the tenancy.
b. Property owners renting to tenants with Section 8
Existing Housing certificates shall comply with all
Section 8 Existing Housing regulations.
c. Property owners shall exercise affirmative marketing of
the units whenever units become vacated, in accordance
with the requirements of the Notice.
d. Property owners shall rent their property at market rates
as defined in the Notice, that is, the highest rent the
owners can reasonably expect to achieve for the unit in
the given location, time and circumstance from an
unassisted tenant.
5. Affirmative Fair Housing Marketing - All States and units of
general local government and individual property owners
participating in the Demonstration must agree to the following
conditions in addition to all other requirements under applicable
statutes, Executive Orders, or regulations. Specifically, all State,
units of general local government and property owners assisted
through this program shall ensure that rehabilitated units will be
marketed for rental or sale in a manner to affirmatively further fair
housing in the same manner as described in 24 CFR 200.620(a)-(f). If
a rehabilitated unit is advertised for rental or sale, it will be done in
a manner to inform persons who would otherwise be least likely to
apply for the unit. The "Equal Opportunity" logo shall be displayed in
all advertising.
Federal Register 24, Section 200.620(a)-(f) states that the applicant
shall meet the following requirements or, if he contracts marketing
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September 15, 1982
responsibility to another party, be responsible for that party's
carrying out these requirements:
a. Carry out an affirmative program to attract buyers or
tenants of all minority and majority groups to the housing
for initial sale or rental. An affirmative marketing
program shall be in effect for each multifamily project
throughout the life of the mortgage. Such a program shall
typically involve publicizing to minority persons the
availability of housing opportunities through the type of
media customarily utilized by the applicant, including
minority publications or other minority outlets which are
available in the housing market area. All advertising shall
include either the Department-approved Equal Housing
Opportunity logo or slogan or statement and all
advertising depicting persons shall depict persons of
majority and minority groups.
b. Maintain a nondiscriminatory hiring policy in recruiting
from both minority and majority groups for staff engaged
in the sale or rental of properties.
c. Instruct all employees and agents in writing and orally in
the policy of nondiscrimination and fair housing.
d. Specifically solicit eligible buyers or tenants reported to
the applicant by the Area or Insuring Office.
e. Prominently display in all offices in which sale or rental
activity pertaining to the project or subdivision takes
place the Department-approved Fair Housing Poster, and
include in any printed material used in connection with
sales or rentals the Department-approved Equal Housing
Opportunity logo or slogan or statement.
f. Post in a conspicuous position on all FHA project sites a
sign displaying prominently either the Department-
approved Equal Housing Opportunity logo or slogan or
statement.
6. Future Assistance To Projects - Owners/borrowers will receive
written notice that no additional future public assistance will be
provided to projects that subsequently develop financial difficulties.
7. Program Requirements - All applicable CDBG, Section 8 Existing
Housing, Affirmative Fair Housing Marketing regulations, and other
regulations as specified in the Demonstration Notice, will be
followed.
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September 15, 1982
Except for these special policies and requirements, no change in the existing City
policies for implementation of the Multi-Unit Residential Rehabilitation Program are
allowed for the purpose of carrying out the Demonstration without approval of the
City Commission and HUD.
Procedural changes in the program will be developed by the City and the City's Loan
Review Committee, as necessary, to effectuate the intent of the Demonstration for
all projects selected for participation.
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