R7G-Approve Allocation Of SHIP Funds From FY 2013-14 To MBCDC- The Jefferson IncCOMMISSION ITEM SUMMARY
Condensed Title:
A Resolution allocating $135,464 in SHIP funds for the rehabilitation of The Jefferson, a 28-unit
affordable housing building, and authorizing the execution of the of the SHIP agreement between the
and Miami Beach Commun ion for use of the funds
Item Summary/Recommendation :
AGENDA ITEM R1G
Supporting Data: Community Satisfaction Survey: N/A
The City is a recipient of State Housing lnitiatives Partnership (SHIP) Program funds. SHIP funds seek
to stimulate the production of affordable housing. The City's Local Housing Assistance Plan (LHAP)
establishes the strategies employed by the City to expend SHIP funds. Among these strategies is rental
housing development (acquisition and rehabilitation of multi-family affordable housing). The SHIP funds
available include $ 124,311 from FY 2013114 and $ 262,729|rom FY 2014115.
The City advised registered affordable housing properties in the City of the availability of SHIP funds for
the purpose of rehabilitation to ensure the retention of existing affordable units. SHIP funds invested in
a property are secured by a Restrictive Covenant that assure the property's ongoing use as affordable
housing for the duration of the affordability period, typically up to 30 years.
Miami Beach Community Development Corporation (MBCDC) approached the City regarding its
affordable housing property located at 542 Jefferson Avenue. The Jefferson is a 27-unit affordable
housing building serving elder residents. The building is in need of a roof replacement, the replacement
of an air conditioning unit, and the upgrade of the kitchens and bathrooms of the nine units located on
the third floor. Repair costs are estimated at $135,464.
The City has reviewed MBCDC's prior performance concerns and the agency's overall fiscal and
operational health. MBCDC has completed a 100 percent turnover of all staff that had been present
during the period of prior performance concerns and has agreed to strict performance timelines as a
condition of receiving rehabilitation funds. MBCDC would be required to complete the rehabilitation
project by September 30, 2015 and submit weekly progress reports. Reimbursement packages would
uire evidence of as well as staff inspections to verifv submissions.
Fi nancia! lnformation :
Financial lmpact Summary: N/A
$135,464SHIP Accou nt - 1 52.5721 .000349
Maria L. Ruiz, Department Director, Office of Housinq and Community Services, Extension 6491
Assistant City Manager City Manager
MIAMIBHACH DATE 6-10-tt584
MIAMIBEACH
City of Miomi Beoch, 1700 Conveniion Center Drive, Miomi Beoch, Florido 33139. www.miomibeochfl.gov
COMMI ION MEMORANDUM
Mayor Philip Levine and Member$ of the
Jimmy L. Morales, City Manager
DATE: June 10,2015
SUBJECT: A RESOLUTION OF THE MAYOR eruO CITY COMMISSION OF THE CITY OF MIAMI
BEACH, FLORIDA, APPROVING THE ALLOCATION OF STATE HOUSING INITIATIVES
PARTNERSHIP PROGRAM (SH!P) FUNDS FROM FY 2013-2014 rN THE AMOUNT OF
$43,508.85, AND $91,955.15 FROM FY 2014.15 FUNDS TO MIAMI BEACH
COMMUNITY DEVELOPMENT CORPORATION/MBCDG: THE JEFFERSON, lNC.
(MBCDC) FOR THE REHABIL|TATTON OF THIS AFFORDABLE HOUSING PROPERTY
LOCATED NT 542 JEFFERSON AVENUE; TO INCLUDE THE REPLACEMENT OF THE
ROOF AND UPGRADES TO THE NINE UNITS LOCATED ON THE THIRD FLOOR OF
THE PROPERTY; AND FURTHER AUTHORIZING THE MAYOR AND Clw CLERK TO
EXECUTE THE SHIP PROGRAM AGREEMENT BETWEEN MBCDC AND THE CITY.
ADMINISTRATION RECOMMENDATION
Approve the resolution.
BACKGROUND
The City is a recipient of State Housing lnitiatives Partnership (SHIP) Program funds. SHIP funds were
created via the William E. Sadowski Affordable Housing Act on July 7, 1992 as a means of stimulating
the production of affordable housing. Funds are derived from documentary stamp taxes on deeds and
then allocated to local governments.
SHIP funds have very specific expenditure rules including:o At least 75 percent of the funds made available to each municipality must be reserved for
construction, rehabilitation, or emergency repair of affordable, eligible housing.o At least 30 percent of the funds must be reserved to benefit very low-income households.r At least 65 percent of funds made available to each municipality must be reserved for home
ownership for eligible persons residing in very low- and low-income households.
Please note that the percentage thresholds are overlapping and equal greater than 100 percent.
The City is required to submit its Local Housing Assistance Plan (LHAP) to the State every three
years. The LHAP establishes the strategies employed by the City to properly expend SHIP funds. The
City's latest LHAP was amended by the City Commission via Resolution 2014-28824 and includes the
following expenditure strategies:. Housing rehabilitation of single family, owner-occupied housingo Disaster Mitigation Recovery (a strategy that allows the use of SHIP funds for home repair in
the event of a disaster declaration). New construction of home ownership opportunities
TO:
FROM:
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City Commissioner Memorandum - SHIP Award to MBCDC for the Rehabilitation of The Jefferson
June 10,2015
3 pages
. Down payment and closing cost assistance with rehabilitation (providing first-time homebuyers
with cash assistance for acquisition and rehabilitation of acquired homes)
o Rental housing development (acquisition and rehabilitation of multi-family affordable housing)
The following SHIP funds available:
FY 2013t14 $ 124,311
FY 2014t15 $ 262.729
While the City has had relatively little or no SHIP funds for the past several years, the revitalized real
estate market appears to be trending upwards and the City expects to receive increasing allocations.
As a reminder, SHIP funds must be expended within two years of receipt. SHIP administration funds
are capped at three (3) percent of award. As a result, the City leverages other housing resources to
properly manage the program.
ANALYSIS
The SHIP program has very specific expenditure guidelines that have posed challenges in our
community. While our LHAP provides up to $60,000 in down payment and rehabilitation assistance to
first-time homebuyers, the SHIP program's threshold of expending 65 percent of funds on very low-
and low-income households has made it difficult to match eligible households with current market
units. While most qualified households are obtaining mortgage approvals valued at around $50,000,
the marketplace is asking in excess of $100,000 for studio units. Staff has been working with local
area mortgage companies, lenders and development corporations to leverage resources and serve the
prerequisite households seeking homeownership.
The City advised registered affordable housing properties in the City of the availability of SHIP funds
for the purpose of rehabilitation to ensure the retention of existing affordable units. SHIP funds may be
used for systems upgrades, Code and Building Department remediation, aging-in-place upgrades and
modernization so that affordable buildings may continue to house income-eligible households. SHIP
funds invested in a property are secured by a Restrictive Covenant that assure the property's ongoing
use as affordable housing for the duration of the affordability period, typically up to 30 years.
Miami Beach Community Development Corporation approached the City regarding its affordable
housing property located at 542 Jefferson Avenue. The Jefferson is a 27-unit affordable housing
building serving elder residents. The building is in need of a roof replacement (to address pooling and
trusses that are rotting), the replacement of an air conditioning unit (which has reached its life span
and is currently buckling under its weight), and the upgrade of the kitchens (which require counter and
cabinet replacement because of deterioration of the particle board material) and bathrooms (replace
the cabinets and sinks because of material deterioration) of the nine units located on the third floor.
When the roof is replaced, the electrical conduits will also need to be properly secured as this was a
finding of the property's 40-year certification. These repairs are estimated at $135,464, the amount of
SHIP funds being requested.
The City has reviewed MBCDC's prior performance concerns and the agency's overall fiscal and
operational health. MBCDC has completed a 100 percent turnover of all staff that had been present
during the period of prior performance concerns and has agreed to strict performance timelines as a
condition of receiving rehabilitation funds. MBCDC would be required to complete the rehabilitation
pro.lect by September 30, 2015 and submit weekly progress reports. Reimbursement packages would
require evidence of expenditure as well as staff inspections to verify submissions.
586
City Commissioner Memorandum - SHIP Award to MBCDC for the Rehabilitation of The Jefferson
June 10,2015
3 pages
CONCLUSION
While there have been previous concerns with MBCDC, City staff have evaluated the proposed
project, timeline and working conditions to ensure that the project is completed as planned. Current
affordable housing restrictions are expiring, or have already expired, which means the property could
become market-rate housing if not secured as affordable housing going fonruard. The rehabilitation of
the building will ensure its ongoing use as an affordable housing property for 30 years and will improve
the living conditions of its elderly tenants. As such, the project is recommended for funding.
JLM/KGB/MLR
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RESOLUTION TO BE SUBMITTED
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