By Pat Fain and Leslie Agron
Today Oak Ridge has a default housing policy that begins and ends with two modest grants from Housing and Urban Development consisting of objectives decided internally by city staff. Input from the public has been minimal at best, despite HUD requirements to hold public input meetings. These were held, minimally advertised and sparsely attended. In the past, these objectives were then approved by Oak Ridge City Council without holding Council work sessions to discuss real needs or creative solutions for those needs.
This year and this month, Council will begin an open and (hopefully) far-reaching discussion for a well-thought-out response to community concerns and the need to protect the tax base of the city from further erosion resulting from the deterioration of a significant portion of the housing built before 1945. This paper is to offer ideas and alternate thinking as the City Council proceeds to contemplate the path ahead.
There are three considerations that must first be put on the table:
- where the funding comes from,
- how the money is spent, and
- the magnitude of the problem.
At this time, the money budgeted is from the two HUD grants and from the general funds of the city. The total available is about $500,000. The “how” is found in the language of the grants and the budget resolution. The size of the problem is 6,000 wartime houses and the percentage of these that have received minimal to moderate care from their owners over time. These constitute the starting points for the development of a sound housing policy for the city.
In 2011, the city published an excellent report to HUD. (This report is no longer on the city website, but is attached to this paper.) This HUD report details that in 2000, 11 percent of the residents were living in poverty and that by 2010, 15.3 percent met government poverty definitions. This is almost a 50 percent increase in 10 years.
The report goes on to state that “the city’s primary tools to address poverty are limited to tax policies, social service programs, housing assistance, and economic development programs,” and further that the city “will continue to pursue resources and innovative partnerships to support the development of affordable housing, etc…..” (pg. 26) The stated goal is to “provide the direction to build a community empowered to provide a good quality of life for all its citizens.”
HUD further required that the city identify and prioritize “strategies and objectives.” (pages 27-8 of 2011 report) The years covered by the report are 2011-13. Housing strategy is the first one listed; the first strategy is “the elimination of blight or deterioration,” and the first three objectives are to “remove dilapidated housing, followed by code enforcement, and assistance to (extremely low income ) homeowners for housing rehabilitation.” All lofty goals.
In looking at the objectives currently stated for all three of the funding sources, the only real activity, however, is to purchase “dilapidated “ homes and demolish them. THEN WHAT? Silence. To further complicate the problem, at least in the HUD world, there is a requirement for a one-to-one replacement of demolished homes with similar homes for low-income people. Just putting land into a land bank is not an option. Waiver of this rule appears to require special permission for each home.
So the challenge for the City Council is how to make limited resources meet very large needs with broad public support:
- First is to greatly expand the resources by partnering with private entities, such as nonprofits and financial institutions.*
- Second is to set a goal of “rehabbing” structures as a first option. The cost for a complete rehab is about half the cost of building new.
- Third is to assure that the cost of repairing less damaged houses remains a homeowner expense rather than becoming a government expense to the maximum extent possible.**
- Fourth is to have a professional/neutral evaluation of which of these solutions will best suit the condition and circumstances of the structure.
- Fifth is to actually enforce code violations, particularly on rental property, in the very early stages; to show the public that violations are uniformly enforced on everyone; and to have an appeals mechanism that is quick, fair, and legally viable.
- Sixth is to very seriously engage in a process to enlist public participation and ideas before establishing a comprehensive policy on housing for Oak Ridge.
The objective is to create a self-sustaining revitalization program focused on housing. This can be initiated emphasizing different objectives in the next round of HUD applications beginning in 2014. Specifically, HUD Housing Strategy Objectives (pg. 27) addressing No. 3. Housing rehabilitation and No. 4, maintenance of property, should be moved to our highest priority. Programs to implement these objectives can be multiplied in their effectiveness by choosing the right partners and achieving a strategic scale.
* Nonprofits such as ADFAC and Habitat for Humanity can play a key role: providing volunteer labor, donated materials, and access to non-traditional financing. Financial institutions that partner with revitalization efforts are able to be of significant help to the process because raising values of multiple homes raises the value of all homes in the neighborhood and thus gives them stronger collateral on existing and future loans.
** One partial solution: Creation of a revolving pool of money, that would be available to owner-occupied homes only, to borrow small amounts of money (less than $5,000 average) at very low or no interest for home repairs. This money would be available to home owners not usually able to qualify for regular bank loans. This would require identification of sufficient money to establish the pool; a fiscal agent; rules of borrowing; limits on amounts; very limited interest sufficient to cover costs to maintain; and rules that would make this pool actuarily sustainable for a lengthy period of years. No money would go directly to homeowners, but would be disbursed directly by the fiscal agent. This would be a viable project for funding from non-governmental sources.
Creation of a second funding pool for making small grants to homeowners unable to pay back the money, but in need of modest home repairs in order to remain in their homes. This needs to be a separate fund as granting money is not sustainable and combining the two would undermine a revolving fund. Allowing private partners, both nonprofits and individuals who meet criteria for professional delivery of repair work to contract with a fiscal agent or the city, would make this a controllable and reliable function for the city.
Pat Fain and Leslie Agron are Oak Ridge residents.