City looks to modify post-flood, resilience programs

Changes proposed to spur projects along

Jill Schramm/MDN A vacant lot between homes on a southeast Minot block is among properties being considered in a proposed Neighbor Next Door lot sale program.

By adding the revitalization of the downtown to the mission of an affordable housing program, the City of Minot hopes to catch the interest of developers.

Minot City Council members, meeting Tuesday as Committee of the Whole, voted to recommend the council seek proposals from developers to rehabilitate downtown multi-family rental housing. It was among actions taken on post-flood programs at the meeting.

With the exception of Park South Apartments, the National Disaster Resilience program’s multi-family rehabilitation project has not had applications. One building owner who did apply later withdrew.

By seeking new proposals that target the downtown, the city hopes to generate interest from building owners to rehabilitate up to 70 units. This housing must remain affordable for a minimum term of 20 years. The NDR funding would be in the form of a zero-interest, forgivable loan to ensure compliance with 20 years of quality, affordable housing.

A proposal can include a mix of low- to moderate-income and market-rate units, but 51 percent must be designated for lower income tenants. That would place the total possible units at about 138 if 70 units are rehabilitated. The city could accept proposals from multiple building owners as long as the total affordable units do not exceed 70.

“This does not use all the funds because there are going to be other opportunities. We are going to want to look at other ways to increase multi-family rehab and multi-family units,” NDR manager John Zakian said. He estimated about $11 million would remain to be spent on other multi-family projects.

The NDR program set aside just over $20 million of the federal grant money for multi-family housing, of which $1.85 million has been committed to Park South.

The city also is taking another look at its NDR program for single-family-home neighborhoods to serve residents displaced by flooding or the flood protection project. Skyport Developers’ Prairie Pointe Subdivision and Silverleaf’s Ramstad Heights submitted proposals that were rejected by a technical committee for failing to meet program requirements, due to deficiencies such as lack of fully completed infrastructure or proper zoning.

The committee is recommending the council reject the two proposals and develop a new program that blends single-family new construction with purchases of existing homes.

The committee also is urging the city to move forward with two new activities using leftover money from voluntary buyouts in a 2012 Community Development Block Grant-Disaster Recovery allocation.

The city plans to ask the federal Department of Housing and Urban Development for permission to amend the spending proposal associated with the CDBG-DR allocation to allow $800,000 to be spent on acquiring and demolishing abandoned, blighted homes and another $800,000 to be spent on a small-business revolving loan program.

Vacant lots created in removing blighted properties could become part of a Neighbor Next Door lot program the city wants to create. The city already has identified 26 lots purchased after the 2011 flood that would qualify for the program.

To eliminate its ownership liability, the city would offer the lots to neighbors for $2,400. The city can make private sales without bids if prices are below $2,500.

“I am glad to see we are doing something with these lots,” council member Josh Wolsky said. “The question that very quickly comes to mind is why did we acquire them in the first place?

“I think the acquisition of some of these homes maybe was a mistake. We maybe shouldn’t have been using resources to acquire homes outside the (flood protection project) footprint that in some cases weren’t blighted but had been restored, and then were torn down,” he added.

Wolsky noted Grand Forks developed a document for other disaster-stricken communities on lessons learned from its 1997 flood. He recommended Minot do the same and include its mistakes with acquisitions.

Zakian said lots to be included in the program are those that cannot easily be built on. Lots in the proposed new flood plain would be subject to building requirements and flood insurance, making construction not financially feasible for low- to moderate-income residents, he said. That makes selling the lots to neighbors for more yard space a good option.

“It is really the only alternative we have right now,” Zakian said.

Along with shifting some CDBG-DR money to blighted homes and a revolving loan fund, the committee is recommending shifting other leftover CDBG-DR infrastructure funds to complete a sewer project.

The proposed shifts are similar enough to the original CDBG-DR action plan that the city believes it can work with HUD to make the changes. However, some council members said the city needs to look at where dollars are most needed rather than where changes can most easily be made, even if that means getting the congressional delegation involved to persuade HUD.

Needing up to $12 million for buyouts in the first three phases of flood protection in west Minot, the city will need even more for buyouts in east Minot, possibly more than $20 million, council member Shannon Straight said.

“I hope at some point we are going to talk about how we are going to prioritize that because at some point it has to be also part of the conversation on flood protection,” he said.

“We have acquired the funds to build a more resilient community. How are we ever going to do that if we don’t get folks out of harm’s way?” he said. “We can debate all we want whether we need some of these categories for NDR funds, but the real importance is getting folks out of harm’s way, building the flood protection that we need.”

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