Title
Naturally Occurring Affordable Housing Preservation Support for Nu Wesley Apartments
Action
Action:
A. Approve an allocation of American Rescue Plan Act ERA 2 funds in the amount of $2,600,000 to DreamKey Partners, Inc. for the acquisition of Nu Wesley Apartments, and
B. Authorize the City Manager, or his designee, to negotiate, execute, amend, and renew contracts as needed to complete these transactions.
Body
Staff Resource(s):
Rebecca Hefner, Housing and Neighborhood Services
Warren Wooten, Housing and Neighborhood Services
Explanation
§ In May 2023, the city issued a rolling Request for Proposals (RFP) for the acquisition and rehabilitation of naturally occurring affordable housing (NOAH), which serves to provide opportunities to NOAH developers/owners to be responsive to quickly changing market conditions and allows the city to evaluate proposals on a rolling basis as market opportunities arise.
§ DreamKey Partners, Inc., proposes to acquire Nu Wesley Apartments, an existing 58-unit multi-family NOAH development originally constructed in the 1960s and situated on approximately three acres in the Enderly Park community at 3220, 3224, 3300 and 3308 Avalon Avenue (parcel identification numbers 065-083-20, 065-083-21, 065-085-01, and 065-085-03). The property is located in Council District 2 and within the Freedom/Wilkinson Corridor of Opportunity.
§ The property meets the city’s NOAH preservation criteria which include:
- Property’s age is greater than 15 years;
- Rents are in the area median income (AMI) range that are at risk due to surrounding neighborhood dynamics;
- Property can be rehabilitated to maintain a good quality of life for residents for the next 20 years or more; and
- Property is located in an area experiencing transformative change and property appreciation.
§ DreamKey Partners, Inc., in response to the city’s NOAH RFP, is requesting $2.6 million for the acquisition of the property. The city’s support will include a 30-year deed restriction for the preservation of the 58 units at the followign AMI levels:
- 11 units at 30 percent AMI, and
- 47 units at or below 60 percent AMI.
§ The city investment will be contingent upon a current property appraisal of no less than $8.6 million and a physical needs assessment of the property.
§ Support of the Nu Wesley Apartments aligns with the rolling NOAH RFP criteria and supports City Council’s Housing Charlotte Framework, which recommends preserving NOAH properties. It also aligns with the city’s Guidelines for Preserving Naturally Occurring Affordable Housing which sets forth guidelines to limit displacement of current residents by preserving existing affordability, and the guidelines in the city’s Affordable Housing Funding Policy.
Background
§ The Emergency Rental Assistance (ERA2) program provided by the American Rescue Plan Act of 2021 made funding available to state and local governments to help prevent evictions, stabilize housing, and support housing providers.
§ Beginning in 2021, the city received multiple allocations of ERA2 funds from the U.S. Department of the Treasury. This included an initial $28.8 million in 2021, followed by two additional allocations in 2022 and 2023 totaling approximately $7.7 million. These later funds were allocated to the city from other municipalities that had not obligated their full amounts, as part of the Treasury’s recapture process.
§ During the height of the pandemic, ERA funds were used to fund rent and utilities through the RAMP CLT program which closed on December 15, 2022, having fully obligated all rental assistance funds and a portion of the available utility assistance funds.
§ City Council allocated the remaining ERA2 funds to support anti-displacement initiatives. These funds must be obligated by September 30, 2025.
Fiscal Note
Funding: American Rescue Plan Act funding
Attachments
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