Economic Development Authority - Elizabeth Showalter, Community Development Specialist
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Home Improvement Program Updates
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Executive Summary
The report provides an update on the home improvement and down payment assistance programs offered by the EDA. Minor changes are proposed for the second year of the program to address increased assessed values across the City and make the program easier to participate in and administer.
Background
Program Overview
In 1998, the EDA sold bonds to establish a revolving loan fund to promote home improvements. Home improvement programs are a common function of EDAs/HRAs in communities with older housing to prevent neighborhood decline and maintain property values.
It is also a goal of the 2040 Comprehensive Plan to improve the quality of existing housing stock. Changes have been made to the program offerings over the years, with the most recent changes at the end of 2021. The 2021 changes included a five-year pilot program offering small home improvement grants in addition to loans which have been traditionally offered. The grant program is possible due to a large, accumulated balance in the revolving loan fund due to payments on loans and investment yields of funds held in the account. If the grant program is successful, staff will seek alternative long-term funding sources for the program.
Current program offerings are:
• Interest bearing loans with no income restrictions.
o Single-family owner-occupied homes.
o Owner occupied manufactured homes.
o Small rental properties.
• Special purpose deferred loans with income restrictions.
o Last resort loans (emergency repairs or code violations unable to be financed through other means).
o Accessibility loans.
• Down payment assistance with income restrictions.
• Remodeling advisor service.
o Service provided by the Center for Energy and Environment provides remodeling advice at no cost to the resident. Advice includes identifying home improvement projects, prioritizing projects, soliciting bids, and information on construction and code requirements.
• Home improvement grants.
o Front door program: beautification/curb appeal projects on single family homes.
o Major remodeling program: additions and major remodeling projects on single family homes.
o Rental program: exterior improvements and safety improvements on small rental properties.
o Manufactured home beautification: beautification/curb appeal projects on manufactured homes.
The general program goals are:
1. Promote reinvestment in older properties to prevent neighborhood decline and maintain property values.
2. Support affordable homeownership.
3. Support existing homeowners staying in their homes.
2022 Activity
The attached annual report provides a summary of the grants and loans issued in 2022, the first year under the newly expanded program. Highlights include:
• The reduction in interest rate for interest bearing loans from a set rate to a rate indexed on the 10-year treasury note was successful with 7 loans originated. Recent years have had 0-4 interest bearing loans originated per year.
• Two loans were originated in the new accessibility loan program.
• Five loans were originated in the new down payment assistance program.
• One loan was originated in the new rental property loan program.
• 28 grant agreements were executed with a total of $95,000 expended and over $700,000 was spent on the home improvement projects.
o 11 grants were issued each in Wards 1 and 3 and 6 were issued in Ward 2
• Promotion of the programs in the newsletter and on social media raised the awareness of the general home improvement programs and allowed staff to refer callers to other programs that better fit their needs that callers were otherwise not aware of.
• Eighteen remodeling advisor visits.
2023 Goals
Staff is proposing the following goals for the 2023 program year:
1. Increase average age of home of grant program participants.
a. Targeted promotion of grant program to the residential areas south of US 10 in 2023 and the Donnay’s neighborhood in 2024.
2. Increase grant fund usage to $100,000 for the front door program.
a. Targeted promotion.
b. Tables at events.
c. Social media.
3. Increase proportion of applicants successfully applying for grant program on the first attempt.
a. Improving preapplication materials and application form.
b. Modify program terms to be clearer and eliminate points of confusion that arose in the first year (minimum project cost is easier to understand than minimum grant amount).
4. Increase knowledge of and participation in accessibility program.
a. Coordination with Mary Ann Young Center.
5. Increase use of manufactured home programs.
a. Outreach coordinated with manufactured home parks.
Proposed Grant Program Changes
1. Increased maximum assessed value from $350,000 to $400,000 to account for substantial increases in assessed values across Anoka County.
2. Change from minimum grant amounts to minimum project costs to reduce confusion from applicants.
3. Add decorative lighting and bay windows to beautification projects.
4. Increase time allowed for completion of projects (most projects required extensions in 2022).
5. Change age of home requirement for manufactured homes from 30 years to 20 years.
Strategic Plan Relationship
Not applicable.
Board/Commission Review
Not applicable.
Financial Impact
The revolving loan fund has a balance of $2.9 million. The 2021 approval of the grant pilot program approved an estimated expenditure of $200,000 per year for the five years of the pilot program. The largest proportion of that is $150,000 for the front door program, which is an annual cap. The proposed changes are anticipated to increase expenditures on the program, but the annual cap for the largest program will prevent spending from exceeding the $200,000 estimated expenditure from the fund.
Public Outreach/Input
Changes are based on feedback received during the first year of the grant pilot program.
Staff Recommendation
By motion, approve the resolution adopting changes to the grant program terms.
Attachment List
2022 Home Improvement Annual Report
Card from Grant Recipient
Grant Program Terms
Grant Program Target Area Map
PowerPoint Slides
Body
WHEREAS, a goal of the 2040 Comprehensive Plan is to improve the quality of existing housing stock;
WHEREAS, the EDA approved a five year pilot program of home improvement grants on November 15, 2021;
WHEREAS, the proposed changes to program terms improve program clarity and respond to market conditions;
NOW THEREFORE, BE IT RESOLVED, that the Blaine Economic Development Authority hereby approves revised terms for the home improvement grant program attached to the staff report.
PASSED by the Blaine Economic Development Authority this 18th day of January, 2023.