R2022-07 Resolution Approving Agreement between the City of Decatur and Central Illinois Land Bank Authority Regarding American Rescue Plan Funds

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CENTRAL ILLINOIS D BANK AUTHORITY DECATUR ABANDONMENT TO REHAB PILOT PROGRAM OVERVIEW: The Central Illinois Land Bank Authority's Abandonment to Rehab Program will collaborate with the City of Decatur to identify abandoned properties that can be saved, rehab the home to code standards, and sell to first time homebuyers.The goal of this program is to keep properties on the tax rolls that may likely become demolition candidates in the next five years with no intervention, strengthen neighborhoods one block at a time with strategic rehabs, and provide homeownership opportunities to low-and moderate-income residents that want to purchase their first home. This program,funded by City's American Rescue Plan Act(ARPA) funds, will seek to replicate a similar initiative done by the Community Partners for Affordable Housing (CPAH); a HUD certified nonprofit working in suburban Chicago, which was seeded with $2 Million in funding from Illinois Attorney General Settlement for the housing crisis ten years ago. CPAH understood that rehabs in some underserved markets would never pencil out so on average they spent$100k rehabbing a home that might sell for$50k—they projected a subsidy of$50k per home with the goal of creating new homeownership opportunities. Due to population loss over the last 40 years,there is an estimated excess of 4200+ vacant homes in Decatur. Compared to the cost of new construction, which will easily exceed $200k or more per unit, creating homeownership opportunities via strategic rehabs makes a lot of economic sense. If you consider that a new construction rental unit financed through Low Income Housing Tax Credit costs $300-500k,this is an initiative the state could expand upon in the future for regions losing population that do not need new housing units—what's needed is new subsidy sources to save existing homes before they become demolition candidates. Once a home is demolished, it will likely never be replaced with a new one in Decatur—which further erodes the tax base. As evidenced by the Mapping Inequality redlining map below, banks historically classified 75%of the City's urban code neighborhoods as "declining" or"hazardous"—which prevented residents of those neighborhoods from obtaining loan to invest in homes.