Draft rental-rehab program proposes cost-share and affordability terms; board debates displacement risk

Speaker 2, Neighborhood & Business Development staff, introduced draft terms for a rental-rehabilitation program included in the meeting packet and said the city used Invest DSM language as a starter point. Staff described key elements: a cost share where the program would cover roughly 30% of project costs and the landlord would cover about 70%; affordability periods tied to the grant size (example durations described by staff: $15,000 → 3 years; $45,000 → 5 years; $75,000 → 7 years); and a rent-increase cap in the Invest DSM template (no more than 2% per year) plus annual tenant income monitoring.

Board members asked for clarifications and raised concerns. Speaker 5 and Speaker 6 questioned whether targeting 80% AMI as a default would miss lower-income tenants and argued for considering a 60% AMI threshold in parts of the city. Speaker 6 warned that converting multiunit properties to fewer units or applying strict terms could ‘‘push certain individuals out’’ and reduce naturally affordable units, a concern staff acknowledged and said would be considered when refining language.

Members debated whether code violations should disqualify landlords from the program. Speaker 2 said a single code citation would not automatically disqualify an owner, but a pattern of being a ‘‘bad actor’’ (longstanding unpaid fines, unresolved violations or enforcement actions) could be disqualifying. Board members also asked how affordability obligations would transfer on sale; staff said remaining obligations would be prorated and could be paid out by an owner on sale or transferred to a buyer who agreed to the terms.

Speaker 2 recommended further outreach to landlords — including focus groups and written materials — to test what terms are reasonable and not overly deterrent. The board did not adopt the draft at this meeting; staff will refine terms and return with additional input from landlords.