Funds earmarked for affordable rental housing
HOME Consortium looks to partner with a developer
The Yuma County HOME Consortium is looking to partner with a developer to build affordable rental housing, which has been identified as a critical need in the county.
The consortium, which includes all the governments in the county, will receive $2.73 million in
American Rescue Plan Act funding from the U.S. Department of Housing and Urban Development.
The Yuma Neighborhood Services Division is the administrative agent for the consortium. The City Council recently learned more about the project from Rhonda Lee-James, the city’s assistant director of neighborhood services.
The HOME consortium, which includes Yuma, San Luis, Somerton and Wellton and Yuma County, must use the funds to help people who are homeless or at-risk of homelessness or those fleeing or attempting to flee domestic violence, dating violence, sexual assault, stalking or human trafficking.
Only with the fourth category, “other populations,” does income come into play. The funds could be used to help prevent homelessness and serve people with the greatest risk of housing instability, which are generally those whose income is less than 30% of the area median income, those whose housing costs are more than 50% of their income, or those whose income is less than 50% of the area median income with other risk factors.
“With regular HOME money, income is the determinant whether or not we can serve you, but with HOME ARP, it’s a bit different,” Lee-James said. “Now, the circumstance, such as homelessness or fleeing domestic violence, is the determinant whether or not you are eligible to receive assistance.”
The funds can be used for four kinds of activities:
development of affordable rental housing, offering tenant-based rental assistance and/or supportive services and/or creating non-congregate shelter.
Before being allowed to spend the funds on any project, the consortium must have received input from the community. “HUD requires a very extensive process,” Lee-James noted.
Consequently, city staff reached out to South West Arizona Town Hall and they agreed to conduct a virtual forum to solicit feedback on the best way to use this money. Attendees included housing providers, social service agencies, government representatives and educators.
The 79 forum participants broke into two groups to discuss which eligible activities would best serve the population and make the biggest impact.
City staff also interviewed specific service providers, conducted extensive data analysis and drew up a draft allocation plan for public review.
“All of the consultation, the town hall, the interviews, the data analysis, resoundingly told us that Yuma County needs affordable rental housing,” LeeJames
said.
The qualifying population can’t find places to live that they can afford. “We have rental assistance available. The people that have the vouchers can’t find places that either will accept the vouchers or accept the allowable rent that is attached to it,” she explained.
“We have services available, but the social workers are stymied by the lack of rental units to help place their clients,” Lee-James added.
The draft plan calls for using $2.3 million, or 85% of the funding, to develop affordable rental housing. Staff will take the allowable $409,607, or 15%, for administration and planning fees.
The draft plan will be made available for public review and comment on May 13. The plan will be posted on the city’s web page and paper copies will be available at the Main Library and City Hall.
The 30-day comment period will end on June 14. In July, the consortium board and the Yuma City Council will be asked to approve the final plan.
The plan will be submitted to HUD for review in August. The consortium hopes to begin forming partnerships “for some much needed rental housing” in the fall, Lee-James said.
After the presentation, Mayor Doug Nicholls asked whether the $2.73 million would be divided between the different communities. Lee-James explained that all the funds will go to a single project that will serve the whole county. The funding will be made available to developers through the request-for-proposals process.
“It could happen anywhere in the county, depending on the best proposal we receive,” she noted.
Councilwoman Ema Lea Shoop inquired as to the number of units that will be built. Lee-James replied that the draft plan offers two scenarios. With the first, the $2.3 million in construction funding has to stand on its own.
“That’s all we have available,” she noted.
The HOME allocation could fund the construction of 12 to 15 units “if construction prices settle down a little bit.” The hope is that the $2.3 million will attract a developer that can bring other funding to the table, such as low-income housing tax credits or developer investment, that could be used with this money.
“Our money could be just one piece of that,” LeeJames said. “If we can attract tax credits, for example, then we feel we could get as much as 80-85 units with our money.”
She stressed that this is a one-time funding. “We’re excited about that because we don’t usually get cash influx, that we can put this much money on the table and say, ‘Come on, developers, partner with us and see what we can come up with,’” she noted.
Councilman Chris Morris said he was happy to hear “we’ve got something on the table for affordable housing.” However, he wanted to know who would pay to maintain the newly developed housing. He hoped the city wouldn’t have to “dig into future budgets” to cover these expenses, he added.
Lee-James explained that the city nor the Yuma County HOME Consortium will own this property. The money will be a grant to a developer or a developer team. The hope is that the developer will bring project-based vouchers with them or that it serves a population that already has tenant-based rental vouchers, for example, the homeless. Lee-James called this population “the lowest of the lowest income. They may have a little money coming in, but they can’t pay $800, 900 a month for a one-bedroom unit. The voucher will pay the difference.”
She added: “There will be restrictions as to what part of a person’s income they can pay toward rent, capped at 30%. That is what’s considered affordable rent. And the longterm actual operating costs have to consider the 30% tenants can pay and the actual operating costs. That’s where we look for some other kind of rental assistance coming into the equation.”
She explained that the city has previously worked with tax credit projects. For example, the Mesa Heights Apartments have rental assistance vouchers. The residents who live there qualify for the unit. The voucher pays the difference between the 30% of their income and the rental cost.
In Yuma, the most common vouchers are through the Housing Authority of Yuma and Arizona Department of Housing. Vouchers are also available for specific target groups, such as veterans.
In response to a question from Councilman Gary Knight, Lee-James said that the development would probably be operated just like any other apartment complex. “I see it as a multi-family development, and the management company, the owner, whoever is in charge, would look after the maintenance of the facility.”
However, the consortium will monitor the development for years to come. “We’ve got to look at this thing 15 years or 20 years into the future to make sure it will continue to be successfully operated, that it will continue to provide cash flow. It is a longterm obligation to provide homes for qualifying populations,” James-Lee said, noting that the developer will make money through the collection of rents and vouchers.
Shoop questioned whether the Housing Authority of Yuma could manage the housing development. LeeJames noted that HACY could submit a proposal, but any other developer that does these kinds of projects would be allowed to present a proposal.
“Whichever development group we ultimately partner with, they would be the ones to manage it into the future,” she said. “I don’t see the consortium or our city having any longterm obligation in terms of ownership. We would probably have some monitoring and compliance obligations for a period of time into the future just to make sure the developer is doing what we say after it’s built. Otherwise, we would be finished with it.”