City Commission Discusses Elderly Housing
Ponca City Now - November 19, 2013 11:46 am
The Ponca City Board of Commissioners met in a work session on Monday, November 18.
Affordable Tax Credit Housing Project
First, the City Commission reviewed the pending application for construction of an affordable “tax credit” housing project to be located at the northwest corner of West Grand Avenue and Waverly Street. Chris Henderson, Development Services Director, presented the item. Key socio-economic data gleaned from Census 2010 revealed that the southwest area of the City is somewhat in economic despair. Specifically, the geographic area bounded by Pine Street, Highland Avenue, South Avenue, and Flormable Avenue, delineated as Census Tract 5, is eligible for HUD assistance in financing affordable housing. In as such, the City has been approached by three housing developers desirous of constructing affordable housing using “Tax Credits.” One such project, developed by MACO, has been funded and is currently under construction at the southeast corner of Highland and Waverly Street. Eligible persons for this complex must be at least 62 years of age and otherwise qualify based upon income limits as outlined below. The project consists of a total of 12 fourplexes totaling 48 units, along with a clubhouse.
The developer of the elderly project, MACO, is preparing another application for what would be at the corner of Grand Avenue and Waverly Street. The timeline for the submittal of the application to OHFA is January 1, 2014. The property in question must be rezoned to accommodate the proposed project. The Planning Commission considered the zoning petition matter on November 18, and the matter will be placed on the agenda of the November 25 City Commission meeting. This project consists of seven eightplex apartment units and a clubhouse that doubles as a community storm shelter. The apartments will wrap around a proposed retail node on the corner.
In tax credit applications, points are awarded for a number of items including support from the local community that will benefit from affordable housing. This support is, first and foremost, in the form of a resolution from the Mayor and Board of Commissioners. Local support can and sometimes does include financial considerations on the part of the City as well, which further strengthens the application and the awarding of more “points.” A housing market study must also be professionally prepared in conjunction with the application which concludes that a need for more such housing exists. Rents for tax credit units are set below market rates using a formula that factors in the County’s median income, currently at $49,600. Maximum rents are then calculated based upon the number of persons residing in the household and the number of bedrooms in the residential unit. The maximum rent may be adjusted over time as median incomes increase or decrease. The typical “period of affordability” for projects such as these is 15 years, at which time the units can be rented at market rates. In return for constructing housing units and renting them at below market rates, the developer receives State and Federal tax credits to the extent that these projects are financially viable.
The City’s nuisance abatement programs have removed literally hundreds of dilapidated housing units from the local housing stock in the past 10 years. These tax credit projects provide the vehicle to replenish this much needed housing stock and otherwise provide affordable housing opportunities for many residents.
Henderson also noted that the Oklahoma Housing Finance Agency recently met and did not approve funding for the “family” complex proposed on the site of the former Airline Drive-in on West Highland.
Housing Incentive Program
Next, the City Commission discussed was the proposed 2014 amendments to the Ponca City Utility Authority (PCUA) Housing Incentive Program (HIP). Chris Henderson, Development Services Director, presented this item as well. At the September 16 Work Session, staff briefed the Commission on the progress of the Housing Incentive Program. It was the general consensus that the HIP seemed to be accomplishing its intended goal. To date, the City has issued 12 single family permits in year 2013. Comparatively speaking, there were only 12 single family permits issued the past four years. More specifically, a total of $169,575 of the initial set aside of $180,000 has now been committed as rebates to qualified builders. These rebates have leveraged $1,468,000 in six new residential construction permits since the program was initiated back in late April. Only two of the six permits, however, were for speculative homes, those which can be used as comparisons for the purpose of a real estate appraisal.
Staff was previously directed to make suggested amendments to the program and submit a revised HIP that perhaps addresses the issue of speculative versus custom homes and their impact on the overall value of Ponca City’s housing stock. Since that time, staff met again with local builders, real estate appraisers and banking executives to address the HIP’s shortcomings and successes in an effort to develop an amended document that will place more emphasis on the construction of speculative housing units and the associated increase in value (appraisal) when such homes are used as comparables. The draft document submitted for consideration contains a number of small changes, but the highlight is an amended rebate schedule that dramatically reduces the percentage/dollar value of the rebate for custom homes while maintaining the current schedule for speculative homes.
Lease of Pipeline Easement
Lastly, the City Commission considered and discussed the proposed lease of pipeline easement to Territory Resource on City owned property southeast of the landfill. Kevin Murphy, City Attorney presented this item. Territory Resources has requested a pipeline easement for a 4” line on 80 acres the City owns southeast of the landfill, just across the road forming the southern boundary of the landfill. While it is anticipated the line will be used for gas transfer, the lease permits them to use it for whatever they chose whether that be oil, gas, saltwater or by-products. The leachate pond for the landfill is located on this land, and it is also used for dirt borrow and storage. It is not anticipated this land would ever be used for landfill, as it borders the Salt Fork which is gradually eroding the river bank on the City side. City staff has reviewed the proposed route and does not believe it would ever interfere with the City’s foreseeable use of the property. There is already a Williams Brothers pipeline located on the property, and this proposed line would be built just north of the Williams Brothers line. Territory Resources is offering $60/rod for a total compensation to the City of $11,196. In checking with a couple local lawyers, they say that the consideration offered is a little above the rate for this size and type of line in this area.