MEMORANDUM

To:                   City Council

From:              David Deutsch, City Manager

Subject:          MD DHCD Neighborhood Conservation Initiative (NCI)

Date:               January 8, 2009

The State of Maryland has been awarded $26,704,504 of Neighborhood Stabilization Program (NSP) funding from the United States Department of Housing and Urban Development (HUD).  These funds are authorized under Title III of Division B of the federal Housing and Emergency Recovery Act of 2008 (HERA).  The funds are to be used to assist communities in addressing abandoned and foreclosed homes in neighborhoods that have been impacted by foreclosure and sub-prime lending.  The Maryland Department of Housing and Community Development (DHCD) will use these funds through the Neighborhood Conservation Initiative (NCI).

NCI Goals

The State’s goals under the Neighborhood Conservation Initiative are:

• To increase affordable workforce housing opportunities in neighborhoods most affected by foreclosure in coordination with local partners.
• To maximize revitalization and stabilization impact in target “Conservation” neighborhoods, focusing and coordinating investment of local and State resources.
• To complement ongoing foreclosure prevention activities of State and local partners.

Applications should be based on the following guiding principles:

• Areas designated for NCI investment should be those that have experienced above average foreclosure or sub-prime lending activity but that also have significant assets that will allow them to rebound with modest investment.

• NCI strategies should consider a balance of approaches that provide for affordable workforce housing strategies, including rental and homeownership opportunities.

• Eligible applicants should, to the fullest extent possible, partner with capable nonprofits and other stakeholders in order to conceive and implement comprehensive neighborhood revitalization strategies.

• Local and State partners should coordinate investment strategies in order to maximize housing and neighborhood outcomes.

• Local and State partners should coordinate approaches to purchasing, renovating and reselling properties (particularly bank-owned foreclosed properties), maximizing discounts on the acquisition costs and minimizing redevelopment and disposition costs and, therefore, producing housing at the most affordable cost for the workforce.

• Housing counseling partners are important to the success of homeownership strategies. Applicants should address how they are supporting their local housing counseling partners.

• Investment strategies should incorporate “green” and energy efficient approaches to building construction, rehabilitation and land development.

Method of Distribution

The method of distribution to be used by the State of Maryland is as follows:

On December 5, 2008 the City submitted a “Preliminary Proposal” targeting funding in the following areas:

• Funding to increase the City’s current closing cost assistance program to $20,000.
• Assistance to increase the number of persons assisted through the City’s program
• Funding for Housing Counseling Services

The estimate of the total funding required for the three programs is $1,730,000. The State reviewed the “Preliminary Proposal” and advised the City that its plan is within the program guidelines as articulated by DHCD and The U.S. Department of Housing and Urban Development for Entitlement Communities and the Community Development Block Grant (CDBG) Program. DHCD’S assessment enables the City to prepare and submit a “Final Proposal” for funding on January 15, 2009.

CONCLUSION: Staff has reviewed the proposal specifications for this unique federal pass-through program and is prepared to develop the requisite documents to respond to the State’s Request for Proposals for the Neighborhood Conservation Initiative. Staff can present its information in a timely manner to DHCD on January 15, 2009.

RECOMMENDATION: We recommend that Council adopt Resolution R-04-09 authorizing the City Manager to respond to the Maryland Department of Housing and Community Development’s RFP for the Neighborhood Conservation Initiative and to enter into agreements required by the RFP for relationships with non profits and other entities as specified in the RFP documents.

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R-4-09

RESOLUTION
OF THE COUNCIL OF THE CITY OF BOWIE, MARYLAND
AUTHORIZING THE CITY MANAGER TO PREPARE A RESPONSE TO THE MARYLAND DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT’S RFP FOR THE NEIGHBORHOOD CONSERVATION PROGRAM

WHEREAS, the City of Bowie (City), Maryland is entitled to receive annual Community Development Block Grant (CDBG) Program funds directly; and

WHEREAS, the City Council approved Resolution R-41-03 on May 5, 2003 adopting the City of Bowie Consolidated Plan for Housing and Community Development for Fiscal Years 2004-2008; and

WHEREAS, the Consolidated Plan for Housing and Community Development assessed and prioritized community needs; and

WHEREAS, the Consolidated Plan for Housing and Community Development includes the Five Year Strategic Plan listing annual objectives by which to address community needs; and

WHEREAS, as an Entitlement Community receiving federal CDBG funds, the City is eligible to participate in other HUD-sponsored programs where CDBG funds are used; and

WHEREAS, the CDBG Entitlement has allowed the City of Bowie to leverage additional funds that will assist in the implementation of the Five Year Strategic Plan; and

WHEREAS, the foreclosure crisis affecting the entire Metropolitan Washington, D.C. area is also having an adverse effect on the City of Bowie; and

WHEREAS, the State of Maryland has been awarded $26,704,504 of Neighborhood Stabilization Program (NSP) funding from the United States Department of Housing and Urban Development (HUD).  These funds are authorized under Title III of Division B of the federal Housing and Emergency Recovery Act of 2008 (HERA); and

WHEREAS, the funds are to be used to assist communities in addressing abandoned and foreclosed homes in neighborhoods that have been impacted by foreclosure and sub-prime lending.  The Maryland Department of Housing and Community Development (DHCD) will use these funds through the Neighborhood Conservation Initiative (NCI); and

WHEREAS, the CDBG funded activities defined in the City’s “Preliminary Proposal” to DHCD meet one of three national objectives by providing housing and limited clientele benefits for low and moderate income residents of the City; and

WHEREAS, the requirements of the State and HUD shall be met as defined in the NCI RFP; and

NOW THEREFORE, BE IT RESOLVED that the Council of the City of Bowie does hereby authorize the City Manager to prepare a response to DHCD for the NCI Program and to participate fully if the proposal is successful; and

INTRODUCED AND PASSED by the Council of the City of Bowie, Maryland at a Special Meeting on January 12, 2009.
                                                             _____________________________
                                                            G. Frederick Robinson
                                                            Mayor
ATTEST:

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Pamela A. Fleming, City Clerk