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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Decatur I Do Areash _. 198^Staineairab 45%, C1DftfteYQdiM.r WX5 Tuta2€ p��s€rwi{23�tfa , - 1, ' mss. 536. fwc W-amuh1t. This Abandonment to Rehab initiative presents the City with an opportunity to move from a reactive approach on blight/disinvestment to a proactive one in which they are actively partnering with a regional land bank to save homes before they become the next round of demolitions. Beyond preserving the tax base and saving money on future demolitions,this provides a partnership opportunity with the Community Investment Corporation of Decatur (CICD). They are the only HUD approved homeownership counseling organization in the City and are well positioned to help create a pipeline of first time homebuyers that are ready to purchase the homes CILBA can rehab under this program. This initiative would also provide opportunities for anchor employers like hospitals and higher education to provide additional support, such as down payment assistance, so their employees can live near where they work. PROGRAM GUIDELINES AND PROCEDURES: For an Abandonment to Rehab program to work well,there are three critical components: 1)the City will identify a pool of at least 10 homes worth saving in strategic neighborhoods and obtain title within 12 months, 2) CILBA manages these rehabs utilizing workforce partners and/or local labor to code standards for approx. $100k each and resells for $50k, and 3) CICD is working on a parallel track to educate a pool of future eligible homeowners and providing the financial literacy skills needed for residents to succeed. Any net proceeds from the sale of properties under this program will be returned into the program to be reused. CILBA will be entitled to an administrative overhead not to exceed 20%of project costs. All work requiring permits will be permitted and inspected by the City at no cost to CILBA. Any net proceeds from the sale of properties under this program will be returned into the program. To be eligible for the First Time Homebuyers benefit, an applicant's income must be vetted by CICD to ensure they fall within the 60-120%AMI range as determined by HUD standards.To prevent people from "flipping" homes shortly after a sale, there will likely need to be resale/recapture provisions for five years after the sale. The ultimate goal of this pilot is to determine if this is a scalable program to increase the supply of affordable high-quality housing units with as little as $50K subsidy.