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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DATE: December 20, 2021 TO: Mayor Julie Moore Wolfe & Decatur City Council Members FROM: Scot Wrighton, City Manager Jon Kindseth, Deputy City Manager RE: Agreement with the Central Illinois Land Bank Authority for Rehabs The City Council #1 priority is neighborhood revitalization. Realizing this goal, in the past, has been partially hampered by insufficient resources to invest in our neighborhoods beyond keeping up with the necessary demolitions. When the City was provided new revenue under the American Rescue Plan, the City Council allocated a significant portion to rehabilitation in target neighborhoods. This item advances revitalization through rehabilitation. The City allocated millions of ARP funds to be used under the eligible activity of increasing high-quality affordable housing. To achieve this staff has proposed three different types of residential rehabs: owner- occupied, rental property rehabs, and this piece of rehabilitation of vacant houses. This proposed agreement with CILBA will provide for $500K to be used in rehabbing vacant properties within Decatur to add higher quality housing stock. The City anticipates staff managing the first two rehab programs utilizing existing or temporary supplemental city staff. We are proposing utilizing CILBA (and others in the future) to manage the vacant structures program, utilizing their experience in doing these same activities in other communities in Central Illinois. This program seeks to replicate a similar initiative being done by the Community Partners for Affordable Housing (CPAH), a HUD certified nonprofit working in suburban Chicago. 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. This program has been successful and is worthy of replicating here in Decatur, particularly in light of how well it fits into our neighborhood revitalization goal. If the City is happy with CILBA's execution of this program we can hopefully expand it to a larger scale in the future. The basic framework of this program is that the City will identify and obtain the title to vacant houses that are determined to be rehab-able. CILBA and the City will manage the rehab of these houses, utilizing partnerships with Trades & Labor Council, Workforce Development Solutions, and local contractors. Some of the houses will likely be used as the classrooms for the pre- apprenticeship programs, providing our local residents hands on experience as well as a new marketable skill set. Upon successful completion of the rehab, the City will seek out new first- time home buyers for these houses, again by partnering with our larger employers to create this pipeline of potential homeowners. This program will provide new opportunities for our severely rent burden residents to have a chance at home ownership and generational wealth. This program will run in parallel with, and be complimentary to, other residential rehab programs using ARP funds allocated for housing rehabs.