TO: LINDA REICH, CITY MANAGER
FROM: WARREN MORELION, AICP, DIRECTOR OF DEVELOPMENT SERVICES
SUBJECT
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Home Improvement Policy Update.
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RECOMMENDATION
Approve updates to the City of Chino Home Improvement Policy Program.
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FISCAL IMPACT
There is no fiscal impact associated with the update of this policy.
CITY OF CHINO MISSION / VISION / VALUES / STRATEGIC ISSUES
The recommendation detailed above further the City’s values and strategic issues that serve as key pillars on which identified priorities, goals, and action plans are built, by fostering:
• Financial Stability
• Responsible Long-Range Planning
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BACKGROUND
The City continues to provide home improvement loan programs to assist seniors and low-income families with the completion of repairs to maintain safe and healthy homes. These programs also help ensure the preservation of local housing stock and remediation of slum and blight. Housing staff maintains an updated policy to correspond with new programs and housing goals. Our current policy includes loan and grant programs to assist eligible homeowners.
During a recent comprehensive review of the home improvement programs, agreements and policy, it was recommended by the City Attorney that we move towards further protecting the City’s investment of our limited housing funds by establishing a 5-year minimum ownership requirement for loan recipients to remain in their homes. This will avoid allowing a property owner to obtain City funding, use the funding to improve the home and sell it for an appreciated value in the improved condition. The investment of housing funds is intended to alleviate substandard living conditions rather than allow a property owner to financially benefit from the City’s loan [or grant]. Imposing covenants that require an owner to remain on the property for a specified period of time after the receipt of housing funds is a standard requirement imposed by many housing authorities and cities as a means to protect their investment of housing funds and assure they are used for appropriate purposes.
ISSUES/ANALYSIS
In an effort to implement the recommendation and further protect the investment of city housing funds, staff reviewed the policy, made revisions and presented them to the Housing Committee on January 13, 2025. As a result of these actions, the following updates to the Home Improvement Policy are being proposed:
1) Elimination of the current Home Improvement Grant Program in which recipients do not pay back funds granted for emergency repairs.
2) Establishment of a new Emergency 5-Year Forgivable Loan which requires recipients to remain in the home for a minimum of five years for loan forgiveness. This loan has zero interest and becomes payable should ownership transfer within the five-year timeframe. Eligible repairs include only those that are deemed eligible per the City or State building inspectors including unsafe or unhealthy living conditions such as no hot water, gas leaks, lack of heating, structural deficiencies, sewage back-up, major water leaks or hazardous electrical wiring.
3) Inclusion of the 5-year minimum ownership requirement to the existing deferred loan programs with the exception of the CalHome Mobile Home program, which follows HCD CalHome Program standards.
4) Loan eligibility includes applicants with incomes up to 80% (low-income) of the area median income. Moderate income families are no longer eligible.
These policy updates aim to help preserve the limited resources available in the City’s affordable housing fund and ensure that the financial assistance is available to those households most in need in our community.
Attachment - Home Improvement Policy Program