Home repair program, emergency rental assistance could get city rental license money

Yahoo

2 days ago

The Frederick City Council will consider a plan for spending almost half of an estimated $1 million in revenue from rental licenses — none of which has been spent since the licenses were required in 2024.
The proposal includes money for constructing two affordable housing buildings with shared amenities for up to 20 people. A housing repair program operated by Habitat For Humanity and rental assistance through local nonprofit Beyond Shelter are also being considered.
The ordinance requiring the licenses was passed in 2022, but licenses were not required until Jan. 1, 2024.
Licenses cost $240 per unit for a two-year period, according to the city website.
It also mandated that landlords adhere to city health and safety standards for rental units.
The council created the ordinance with the intent of using the funds raised from the licenses to create and maintain affordable housing, as well as to help city residents with rent.
In the city's last fiscal year — the first fiscal year it levied the rental licensing fee — it raised over $500,000 from the ordinance.
However, it has not spent any of the funds raised from the ordinance. The city estimates it will have raised over $1 million from the ordinance by the end of the fiscal year on June 30.
Rental Licensing Funds proposal
A proposal to spend just under $500,000 of the revenue generated by the city's rental licensing program. Around $260,000 would go to local nonprofit Beyond Shelter's emergency rental assistance and rehousing support programs households at risk of eviction or facing homelessness, $150,000 for Habitat For Humanity of Frederick County's home repair program for county residents to repair their homes and $80,000 to subsidize the development of 12 affordable housing units, which could house 20 people.
Now, the mayor's office has a proposal that calls for:
* $260,000 for local nonprofit Beyond Shelter, which provides emergency rental assistance and rehousing support for households at risk of eviction or facing homelessness.
* $150,000 for Habitat For Humanity of Frederick County's home repair program, which provides funds for county residents to repair their homes if they demonstrate need and have an income below 80% of the area median income. The median income was around $120,000 in 2023, according to the U.S. Census.
* $80,000 to subsidize the development of 12 co-living affordable housing units housing up to 20 people, built by JR Capital Build, which has an office in Frederick. The monthly rent of the units would be $950 to $1,075 including utilities, according to city documents. Co-living refers to people living in the same space and sharing some of the amenities.
The proposal, set to go before the City Council Housing Health and Education Committee on Thursday, also gives other options for how to spend the money.
The city could create its own rental assistance or home purchase assistance programs, city documents outline.
However, this would require significant additional time and effort from city employees, according to the city document containing the proposal.
Another option is to fund a different developer — Gaithersberg-based M.E.P. Solutions Group — to build a $155,000 proof-of-concept accessory dwelling unit with a shipping container.
Accessory dwelling units are smaller living units on the same property as a home, according to the city website.
The city said M.E.P. Solutions' proposal calls for a test unit to be built in Monrovia. It does not specify the rent it would charge.
'Given these uncertainties and challenges — particularly limited direct impact on affordable housing within the City and the uncertain scalability of the project — staff recommend against utilizing the housing conservation fund for this proposal.'
The ordinance originally called for the rental licensing revenue to be split three ways — 20% for rental assistance, 30% to cover costs associated with tenant relocation necessitated by the enforcement of the ordinance, and 50% for affordable housing.
Recently the council changed the ordinance to expand the usage of the rental assistance fund and fold the tenant protection portion into the rental assistance fund.
This means 50% of the funds raised by the ordinance can be used for rental assistance and to help tenants in the event of a forced relocation due to enforcement of the ordinance.
The guidelines for how the money could be spent were supposed to be finished by July 1, 2023, according to the original ordinance language.