STRATEGIC PRIORITY: Housing & Homelessness Solutions
AGENDA DATE: August 14, 2024
COUNCIL DISTRICT(S): 7
DEPARTMENT: Department of Housing & Neighborhood Revitalization
EXECUTIVE: Robin Bentley
______________________________________________________________________
SUBJECT
Title
Authorize (1) the sale of two Land Transfer Program (LTP) lots held by the City to Cornerstone Community Development Corporation, Inc. and/or its affiliates (Developer) for the purpose of developing affordable housing subject to restrictive covenants, a right of reverter, and execution of all necessary documents, pursuant to the City’s LTP; and (2) release of lien for all non-tax City liens, notices, or orders that were filed on these two LTP lots prior to or subsequent to the deed transferring the lot to the City of Dallas; and (3) execution of a development agreement with Developer for the construction of up to two affordable residential units, approved as to form by the City Attorney - Estimated Revenue: General Fund $5,697.28 (see Fiscal Information)
Body
BACKGROUND
On May 22, 2019, the City Council adopted the Land Transfer Program by Resolution No. 19-0824, as amended, for the purpose of incentivizing: (1) the development of quality, sustainable housing that is affordable to the residents of the City and (2) the development of other uses that complement the City’s Comprehensive Housing Policy, Economic Development Policy, or redevelopment policy. Specifically, the Land Transfer Program authorizes the City to sell qualifying City-owned real property and resell tax-foreclosed real property to for-profit, non-profit and/or religious organizations, as applicable, in a direct sale at less than fair market value of the land, consistent with the authorizing state statute or City ordinance. The tax foreclosed lots are being sold pursuant to 34.051 of the Texas Property Tax Code.
In January of 2022, Cornerstone Community Development Corporation, a non-profit 501(C)(3) based in Dallas for 30 years, submitted an application (proposal) to purchase a total of two Land Transfer Program lots. Department of Housing & Neighborhood Revitalization (Housing) staff evaluated the application pursuant to the standards set forth in the Land Transfer Program guidelines, which included determining whether the developer met the eligibility standards to be deemed a “Qualified Participating Developer” and underwriting the proposal. The application was determined to be “complete” and was assigned a passing score.
Housing staff collaborated with Cornerstone Community Development Corporation regarding the terms of sale of the vacant lot(s) as well as the terms related to the construction and subsequent sale of single-family housing units to income eligible homebuyers.
The two lots at 1 South Boulevard will be combined with four lots already owned by Cornerstone Community Development Corporation to construct a building with six residential units. Two of the six residential units will be constructed on the two (lots) being transferred via this resolution. The homes on these lots will be sold to families that fall within the 60-80% Area Median Income (AMI). Units are to be sold to an income-eligible homebuyer at a sales price between $180,000.00 and $228,000.00. The Developer will sell these three-bedroom, two-bath, 1590-1640 square feet homes for a maximum sales price of $228,000.00. Each unit will have a minimum of a one-car garage.
The development terms applicable to each lot are as follows:
• Vacant Lot Sales Price: Attached as Exhibit A.
• Single-Family Home Sales Price: The sales price of the home cannot exceed the current U.S. Department of Housing and Urban Development (HUD) HOME homeownership sales price for the Dallas, TX HUD Metro FMR Area and must be affordable based on the income of the targeted homebuyer.
• Targeted Income of Homebuyer: 60-80% AMI
• Construction Timeframe: Developer must apply for a construction permit and close on any construction financing within 60 days of purchase from the City. In addition, Developer should complete construction and sale of each affordable housing unit to an income eligible homebuyer within two years of the date of acquisition of the vacant lot utilized for construction of the unit.
• Restrictive Covenants: Developer must: (1) sell each lot to an income eligible household and (2) prior to the sale, must provide to Housing staff written documentation of the income of the proposed purchaser and the sales price. After sale of the home, the property must be occupied as an income eligible household’s principal residence during the entire term of the affordability period.
• Affordability Period: Once the property is sold to an income eligible household, it must be occupied as the household’s principal place of residence for at least five years. If the original purchaser re-sells the property during the affordability period, the property may only be sold to another income eligible household.
• Right of Reverter: Title to the property may revert to the City if Developer does not apply for a construction permit and close on any construction financing within 60 days of purchase from the City or does not complete the construction and sale of the affordable housing unit to an income eligible homebuyer within two years.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Housing and Homelessness Solutions Committee was briefed by memorandum regarding this matter on June 24, 2024. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=13049253&GUID=3AD4675F-0410-43FD-B7B6-1541921E4B36>
FISCAL INFORMATION
Estimated Revenue: General Fund $5,697.28
(Exhibit A details the Estimated Revenue the City of Dallas will receive from the sale of the lots in the amount of $5,967.28 For tax foreclosed lots, the sales price for each lot is a minimum of $1,000.00 for lots up to 7,500 square feet and an additional $0.133 per square foot for lots which exceed 7,500 square feet. The City of Dallas will also collect recording fees at closing to ensure property legal documents are properly recorded in the amount of $60.00. No revenue forgone due to no non-tax liens on properties.)
M/WBE INFORMATION
In accordance with the City’s Business Inclusion and Development Policy adopted on September 23, 2020, by Resolution No. 20-1430, as amended, the M/WBE participation on this contract is as follows:
|
Contract Amount |
Procurement Category |
M/WBE Goal |
|
$2,247,777.00 |
Construction |
32.00% |
|
M/WBE Subcontracting % |
M/WBE Overall % |
M/WBE Overall Participation $ |
|
32.00% |
32.00% |
$719,288.64 |
|
• This contract meets the M/WBE goal. |
|
• Cornerstone Community Development Corporation - Local; Workforce - 50.00% Local |
DEVELOPER
Cornerstone Community Development Corporation
Gerald Davis, Executive Director
MAP
Attached