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HRA Meeting Minutes – Tuesday, November 18, 2014 Page 3 1 2 Ms. Kelsey responded that the majority of items being funded were for maintenance (e.g. 3 windows, siding, etc.) and the thought process used in the past for the loan program when 4 generated was that if homeowners performed those maintenance items to keep their homes in 5 good repair, that would serve the intended purpose of the loan; with larger items beyond 6 maintenance (e.g. remodeling or finishing a basement) financed by private banks. 7 8 Member Lee noted that you couldn’t get a lot of remodeling completed for the current cap of 9 $20,000, or significant items accomplished that would add to a home’s resale value. 10 11 For future discussion, Mr. Koepp offered to review building permit activities by location, 12 factoring in housing ages and current values, in increments of $5,000 up to $75,000. 13 14 Chair Maschka noted the high market value and tax increases form the most recent property 15 tax statements. Chair Maschka opined that the lack of interest in using the current HRA loan 16 program was due to income restrictions as well as current private market interest rates, and not 17 specific to project costs. 18 19 Ms. Kelsey suggested, if the HRA decided to leave the loan program as a maintenance 20 incentive, the current program parameters were fine; however, if they wanted to encourage 21 more than maintenance, such as reinvestment, there needed to be some other type of incentive. 22 Ms. Kelsey opined that the current HRA loan interest rate of 4% was fair in today’s 23 marketplace; and suggested the HRA may prefer to determine areas where the market place is 24 not meeting the needs of the community or what areas they wanted to incentivize a certain type 25 of investment or provide an opportunity for that type of preferred investment in the City’s 26 housing stock. 27 28 As an example, Ms. Kelsey noted that the City of St. Louis Park’s loan program was tied to 29 increasing the square footage of a home, and if the homeowner increased that square footage, 30 the City matched that on a $1 to $3 ratio up to $25,000, which remained silent until the home 31 was sold. For instance, if someone made a $100,000 improvement in their home, with $75,000 32 financed by the private market, they could leverage up to $25,000 as a silent loan until sale of 33 the home, with some income restrictions applying. Ms. Kelsey noted that the program was 34 similar to that offered by the Richfield, and based on up to 115% of median income (e.g. 35 $120% for a family of four equaling a $98,000 annual income). Ms. Kelsey advised that the 36 City of Roseville’s program was a revolving loan program, and if they wanted to consider 37 leaving money in until sale of a home and encourage such a program, they would need more 38 funding for the program. However, Ms. Kelsey opined that the City of Roseville didn’t have a 39 square footage issue, but rather dealt with different styles of homes; but benefited with having 40 more ramblers than other communities. Ms. Kelsey suggested this was an element that may 41 need to be encouraged in areas needing reinvestment or through not having income restrictions 42 in certain areas of the community where that reinvestment need was most evident, and to 43 further encourage diversity of people and population. 44 45 Ms. Kelsey opined that there was a lot of opportunity for the HRA to consider and sought 46 guidance from them for what additional information or data they needed that could be 47 presented at their January or February 2015 meetings, and tied to recommendations to be heard 48 about SE Roseville. Ms. Kelsey suggested that she and Mr. Koepp concentrate on data and 49 narrow it down to concentrate on specific areas of concern. Ms. Kelsey suggested one 50 opportunity may be to pursue reinvestment in pre-1945 constructed homes to bring them up to 51 code. 52 53 Mr. Koepp noted that some maps and data sources may also indicate where all restrictions 54 could be removed to encourage people to be more willing to pursue large ticket investments. 55