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Last revised July 24, 2014 <br />the Section 8 program, or if an owner does not prepay a maturing HUD mortgage and tenants will not <br />be provided housing choice vouchers, federal dollars that could come to our region are "lost". <br />Moreover, the owner now has a major decision to make: <br />• Let the property further deteriorate and hope that the low-income tenants will produce enough <br />rental revenue to keep the property in operation, even when capital improvement needs go <br />unaddressed and/or building operations and maintenance services are pared back. <br />• Upgrade the property and convert it to a "market rate" property that produces higher <br />unsubsidized rents that may price out existing tenants. <br />• Sell the property on the open market — which may or may not preserve the housing, let alone <br />the housing's affordability to low and moderate income households. <br />• Seek public funds for the property's rehabilitation and keep the housing affordable. <br />If the owner chooses any one of the first three options, there may or may not be a financial profit or <br />loss, but all three would likely result in the loss of subsidized units and the loss of federal project -based <br />rental subsidy funds. Not only does this leave federal dollars that could have come to the region "on the <br />table" but under all three scenarios households will likely be displaced, and competition for the limited <br />number of units affordable to lower income households will intensify. If, however, the owner can secure <br />public financing to rehabilitate the property, all three types of preservation can be accomplished rather <br />effectively. In this preservation example, one can see that a single public investment that enables a <br />property owner to continue serving a vulnerable clientele, and earn a reasonable return on investment, <br />provides a multifaceted public benefit. Furthermore, by securing these guarantees through legal <br />documents pertaining to a rehabilitation loan or grant transaction, the public can take action against the <br />owner if it reneges on one or more of the required conditions. <br />Council role <br />• Encourage preserving existing housing where rehabilitation is a cost-effective strategy to <br />maintaining housing. <br />• Collaborate with regional housing partners and funders to identify priorities for preserving <br />affordable housing and available resources. <br />• Work with partners in the advocacy and public finance domains to monitor potential opt -outs <br />(owners considering selling or renovating such that their units would no longer be affordable) <br />and explore mutually beneficial alternatives. <br />• Administer Section 8 Tenant Protection Enhanced Vouchers provided by the U.S. Department <br />of Housing and Urban Development for affected households in the event of a subsidy contract <br />opt -out or mortgage prepay of a federally subsidized property. <br />Local role <br />• Use local code enforcement to maintain the housing stock, preserve property values and protect <br />safe neighborhoods for their residents. <br />• Require rental property licensing and encourage tenant screening, crime -free and drug -free <br />lease addendums, and sufficient property management activity to ensure the quality of housing <br />stock. <br />• Provide technical assistance programs to homeowners. <br />2040 HOUSING POLICY PLAN I METROPOLITAN COUNCIL <br />DRAFT RELEASED FOR PUBLIC COMMENT Part II: Outcomes (Stewardship) I Page 18 <br />