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HomeMy WebLinkAbout2006-12-13-CPC-min Lexington Community Preservation Committee Minutes Dec. 13, 2006 The meeting was called to order by Betsey Weiss at 5:005pm. Also present were Joel Adler, Norm Cohen, Marilyn Fenollosa, Leo McSweeney, Richard Pagett, Sandy Shaw,Wendy Manz, and Dick Wolk. Charles Lamb, representing the Capital Expenditures Committee was present. 1. Bob Bicknell, Jeri Foutter, and Judi Barrett appeared to present the application of the Lexington Housing Partnership for $200,000. This request is for funds to support a Prototype Project to find and test out the factors necessary for an extended program to work in Lexington, which would then be the subject of future requests for CPA funds if the Prototype Project is successful. It would include CPA funding to purchase an affordable deed restriction. Bob said that the Lexington Housing Partnership, through the Housing Foundation, has funded a study which is underway, under the direction of consultant, Judi Barrett, to define program parameters to use Deed Restrictions to preserve the future affordability of existing smaller homes in Lexington. This program would provide ownership opportunities for First Time Homebuyers – including town employees and employees of local businesses. It will encourage diversity as envisioned by our Comprehensive Plan. It would also help minimize future teardowns. 2. Bob then asked for questions. In response to Wendy Manz’s question, Bob said that $7,300 is for a study has already begun, which the Housing Partnership is paying for, out of Housing Foundation funds. The CPC request is for $200,000 which would be for a $ 100,000-$170,000 “buy down” deed restriction and then $30,000 to run the lottery (which is a few thousand dollars) and for a contingency fund for capital repairs such as if a roof is needed or heating system needs to be replaced for the house to minimize the expenses for the new owner. Such a contingency fund would be retained with the property to cover any future transition costs associated with ownership change. Bob then passed out a chart that showed how sales prices are calculated with respect to household median family income. Bob said that in 2006, $81,400 is the Household Median Family Income (HMFI) for a family of 4 and housing including mortgage costs should not be more than 30% of the qualifying income. Therefore for a 3 bedroom house that could be acquired for $350,000 to $400,000, and considering mortgage, taxes, and insurance, etc., would equate to a permitted sales price of $231,172 for a family qualifying at 80%to 100% of Household Median Family Income. The buy down amount would be the difference between the acquisition price of the property and the permitted sales price. 3. Richard Pagett asked if there are lists of people who are qualified? Bob said that would be done as part of the Prototype Project. Initially the work to conduct the lottery and match up of people to the available property would be intensive work and once the process has been established then it would be minimal work. He also said that the Housing Partnership would have responsibility for these homes. There is also a Housing Foundation that is set up as a 501(c) (3) to receive funds and invest money. Bob also said that someone or some body is going to have to manage the 3 Battle Green affordable apartments. LexHAB does rentals. The condos are an ownership situation so the issue of support came up and if CPC funds could pay for that Town employee. Is it legitimate to support this staff person with CPC funds? That will have to be checked. 4. Someone brought up the issue of capital improvements for the affordable house. Muzzey condos are affordable units but the people who buy them very often cannot pay for capital improvements so what will be done with the affordable deed restriction homes with regard to this issue? A contingency fund which will be part of the $200,000 will be needed for initial capital improvements such as for a roof if it only has 3or 4 years of life left or the heating system needs to be replaced to improve efficiency. Judi Barrett who is the expert will have the study done by Feb. and will have recommendations on this issue. 5. The deed rider will have clauses to determine the future sales price is the property is sold. Since the new buyer will be qualified as to income, the permitted change will be keyed to the present and future HFMI as published by HUD. There will also be allowances for capital improvements that are authorized in advance by Lexington. For instance, if the family grows and another bedroom is authorized, the future price at transition will be keyed to larger families and therefore a larger permitted price. 6. How will people be picked? If Lexington only wants local preference, then we have to do 100% AMI. If Lexington does 80% AMI, then 70% is local preference. ( Bob is this correct?) 7. The issue of the bank mortgage rate came up. Jeri Foutter said that Cambridge Savings would give a favorable rate. Cambridge Savings does 1 to 2 homes per year in the 80%to 100% HFMI. Cambridge Savings does supportive funding at favorable lending rates. 8. Wendy Manz asked if there would have to be a “First Time Home Buyers Training Class provided by HOME or similar agency, to make sure buyers understood the ongoing costs of homeownership.” Yes, a counseling class for eligible buyers would be required.. 9. Betsey Weiss asked Judi Barrett to explain her work in Stowe and Acton. Judi said that Stowe is going with 80% or lower HFMI for older single family homes. Acton is trying to set up a program for condominiums. Judi said that another important aspect of this program is the preservation of housing stock from 1925- 1950 which is a target of tear downs plus helping first time home buyers to buy in Town. Lexington will modify the deed restriction to cover families in the 80- 100% HFMI range. The deed may have to have a specified term rather than “in perpetuity” as the law is specific for 80% or less situations but not for over 80% since there is a lower public subsidy. The standard deed rider has terms to cover catastrophic events, bank insurance requirements and foreclosures and these will be retained. 10. Are there homes in the $350,000 to $400,000 range in Lexington? Bob said that the Housing Partnership meet with realtors, bankers, and developers to answer these kinds of questions. The realtors said on Woburn St., Woodhaven St., Sylvia St near Arlington, there are homes in this range. 11. Are these affordable deed restrictions in perpetuity or for 30 years? Judi Barrett said that according to Chapter 184, affordable housing restrictions below 80% are in perpetuity. If the AMI is 80-100%, there is a lower public subsidy so the restriction expires in 30 years. I will confirm this with Judi Barrett. 12. The 2 land parcels are still under negotiation so there was really nothing to report yet. Land parcel A is possibly 6 figures and Land parcel B is possibly7 figures. Weston’s Land Sake’s farming program was brought up as a public farming model that could be used in Lexington. The issue of access for the public came up for one of the parcels. Dick Wolk said there was access. The access will have to be clarified in the future to the rest of the committee. th Dec. 18 4-6pm next meeting The meeting was adjourned at 6:20pm Respectfully submitted, Betsey Weiss