5870 RESOLUTION NO 5,870
A RESOLUTION APPROVING A PILOT PROJECT TO
UTILIZE EXISTING HOUSING STOCK TO PROVIDE
HOUSING FOR LOW INCOME CITIZENS; AND FOR
OTHER PURPOSES
BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF
LITTLE ROCK, ARKANSAS .
SECTION 1. With the objectives of reducing the rate at
which existing housing stock is abandoned and demolished and
to provide low cost standard housing for low income families
and to utilize available land on the East and South sides of
the City for residences, the City of Little Rock hereby approves
and adopts a pilot project to utilize existing housing stock to
provide housing for low income families , all as outlined and
set out on Exhibit "A" attached hereto and made a part hereof.
SECTION 2 . Demolition permits for residential structures
shall not be issued sooner than five (5) days following the
date of application for such.
SECTION 3 . This Resolution shall be in full force and
effect from and after its adoption.
ADOPTED: Deceicoer 20, 1977
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ATTEST: 4411j�l' ' APPROVED:
City Clerk Mayor
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EXHIBIT "A"
A PROPOSAL FOR A PILOT PROJECT TO UTILIZE
EXISTING HOUSING STOCK TO PROVIDE
HOUSING FOR LOW-INCOME CITIZENS
DRAFT
NEED
Under the Little Rock Model Cities program a large number of
abandoned houses in the Mode]. Cities area were demolished and their
lots cleared. An ongoing project of the Community Development
Block Grant (CDBG) program is the demolition of abandoned houses.
The CDBG program is citywide, but many of the houses razed have
been in the east and south ends of the city. These projects were
undertaken in response to complaints of residents that the aban-
doned structures were unsightly and often become hangouts for
youths or transients .
One of the side effects of the demolition program, however,
has been a steady reduction in the stock of housing accessible to
low-income families and a significant reduction of the number of
units available in the Model Cities neighborhoods. A lot of va-
cant, unused lots now exist where modest homes once were.
In census tract 2 (east end) population diminished from 5 , 283
in 1970 to 4 , 343 in 1974 . R. L. Polk Company reported a further
reduction of 240 in population by the end of 1975 . Total house-
holds dropped from 1, 420 in 1970 to 1 ,214 in 1975 . Total of hous-
ing units of 1 , 548 in 1970 was reduced to 1, 214 by 1975. The ef-
fect of the demolition of abandoned houses in census tract 2 is
clearly seen in the fact that there were 127 "year-round vacant"
units in 1970, but only 57 "two-canvas" vacancies reported in the
1975 Polk data. (Note that "two-canvas" vacancies means only the
number of units found vacant at the time of the Polk canvas for
two successive years - not necessarily that these units are "va-
cant year-round. " )
In census tract 5 ( south end) the total population increased
from 5 ,177 to 5 , 837 between 1970 and 1974 . The number of house-
holds decreased by 168 between 1970 and 1975, however, and the
number of housing units dropped by 142 . There were 104 "year-
round vacant" houses in 1970 , and only 69 "two-canvas" vacancies
in 1975.
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During this time the federal government discontinued the "235"
and "236" programs and other subsidies for new low-income housing.
With no subsidy programs , the Housing Authority has been unable to
attract private developers to use vacant areas to construct low-in-
come housing. Regulations prohibit use of CDBG funds for new hous-
ing . Thus new construction as a solution to the low-income housing
problem is not an option at this time .
GOALS
The goals to which this proposal is addressed , then, are :
(1) to reduce the rate at which existing housing stock is
abandoned and demolished;
(2 ). to provide low-cost, standard housing for low-income
families; and
• (3) to utilize available land on the east and south sides
of Little Rock for residences.
STRATEGY
The staff of the inspections division have observed that some
of the houses for which demolition permits are sought, under the
CDBG demolition program and otherwise, are sound enough to make
rehabilitation economically feasible. Sometimes residential struc-
tures which are not substandard are demolished to clear land for
commercial development . Of 285 residential structures demolished
since the start of the CDBG program, the inspections division es-
timates that at least 30 had rehabilitation potential .
As CDBG monies and funds available under the "Section 312"
program may be used for rehabilitation of residential structures ,
we propose to :
(1) inspect all residential structures for which a demolition
permit is sought , in order to determine if the structure
is suitable for rehabilitation;
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( 2 ) bargain with owners of suitable structures, offering to
clear and clean their lots in exchange for the structure;
(3 ) buy vacant lots in east and south Little Rock;
(4 ) move restorable houses to purchased lots and rehabilitate
them;
( 5) sell houses and lots at cost to low- or moderate-income
purchasers.
We believe that there will be a market for residences in east
Little Rock, if housing of standard quality is made available.
Before the 235 housing program was discontinued, seven single-fa-
mily homes were built under the Model Cities program as a pilot
project. There were 50 applicants for purchase of them. Applica-
tions were processed on a first-come, first-served basis . The
seven houses were taken by the first seven families on the list .
PROCEDURE
No new funding would be needed for this project. CDBG funds
already budgetted for housing rehabilitation would be used.
The Housing Authority already owns two lots, one on Martel
and one on Twenty-ninth, which could be used for a pilot reloca-
tion/rehabilitation experiment.
The procedure would be supervised by the Housing Authority.
Rehabilitation costs would be kept as low as possible . We plan
to work out an arrangement with Opportunities Industrialization
Center (OIC) to have some foundation, masonry, and concrete work
done by training classes . Some of the necessary painting, roofing
and simple carpentry also might be done by Comprehensive Employ-
ment Training Act (CETA) workers or OIC trainees.
The rehabilitated houses would be sold only to low- or moderate-
income families , and at cost . As a safeguard against profiteering,
each rehabilitated house would be evaluated by a professional ap-
praiser, and the mortgage agreement would stipulate that, if the new
owner should resell the house during the life of the mortgage, the
City would have an option to buy it back at the current appraised
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value less the difference between the original purchase price and
the appraised value at the time of original purchase . (For ex-
ample, if a house and lot cost $12 , 000 and were sold at cost --
although appraised at $15 , 000, and three years later the owner
wanted to sell and the property should appraise at $17 , 000, the
City could buy it back at $14 , 000 . ) This would give purchasers
the benefits and incentives of home ownership , but prevent taking
of unearned profit.
IMPLEMENTATION
In order to implement the program, the Board of Directors
needs (1) to authorize the procedure outlined herein and ( 2) to
amend the relevant ordinance( s) so as to require a waiting period
of five -days between application for a permit to demolish a resi-
dential structure and issuance of the permit . This provision
would allow time for staff to inspect the house and consider its
suitability for the relocation/rehabilitation procedure.