After some discussion during its meeting last week, the Decorah City Council voted unanimously to make up a shortfall of administrative funding for the city’s Low Rent Housing Agency.
The money will come from the city’s low to moderate income (LMI) fund. The City’s LMI Commission recommended providing a $7,500 grant to cover administrative expenses for the remainder of the calendar year. A total of $9,000 was requested; the Council approved the Commission’s $7,500 recommendation.
Laura Olson, director of the Low-Rent Housing Agency, said 90 percent of the request would go toward her salary to administer the program. It will also help cover rent and some office expenses.
She explained the U.S. Department of Housing and Urban Development (HUD) has consistently cut the amount it will pay to administer the program.
“We’ve used up all our reserve in the last three years,” she said.
The city has contributed $5,000 in each of the last two years to the Agency, Olson said. Her Commission is recommending looking at other ways to operate.
“If they (HUD) are going to keep cutting, we’re going to be coming back and asking for more. They keep saying they’re working hard to get back to operable levels. Smaller agencies are hurting – we don’t know why they do this,” Olson said.
Council member Chuck Lore questioned whether the city would end up picking up “the whole cost” and who benefits from the Agency.
Olson responded her Agency serves 70-80 families within the city of Decorah.
“Almost all are very low income according to the guidelines,” she said. “Seventy-five percent are elderly or disabled and are never going to get out of the program, and the other 25 percent are working poor – a few are chronically unemployed.”
The Agency puts about $250,000 to $300,000 into the local economy through rent subsidies, almost all to local property owners, according to Olson. The program hasn’t grown in 10 years because HUD hasn’t made more funding available to serve more people, she explained.
Olson, who works part time, said as administrative funding has been cut, the agency’s requirements have been reduced, such as fewer housing inspections.
The city requires a certain percentage of proceeds generated in residential tax increment finance (TIF) districts to be set aside for LMI income housing projects in the city.
“It has a balance of about $150,000. It’s currently not being replenished because we don’t have (new) TIF projects with residential components,” City Manager Chad Bird commented.
“The money is there because we chose to TIF residential projects. The whole point is to help LMI programs in some way … this money was collected to be used. Personally, I think it is a good use for it,” Council member Paul Wanless said.
The reason the Agency is successful is because of the way Olson manages it, Council member Jody Niess said.
“She can’t survive on the administrative fees she gets from HUD,” Niess said before the Council approved the allocation.