Scottsdale City Council may give back $855K in HOME funding

Scottsdale City Council (Submitted photo)

Scottsdale City Hall is at 3939 N. Drinkwater Blvd. (File photo)

Scottsdale City Council will vote April 14 on whether to return $855,000 of unused grant funds originally meant to create affordable housing in Scottsdale.

Scottsdale received approximately $1.2 million of federal grant money in 2011 to increase affordable housing options for first-time homebuyers, a city staff report states.

Unused funds must be returned to keep in compliance with the grant agreement.

Newtown Community Development Corp. was allocated the funds for fiscal years 2011-12 through 2014-15 to purchase, rehabilitate and resell single family homes to income-eligible residents, the report continues.

According to the report, as per federal regulations, homes purchased through the grant program may not be resold for more than 95 percent of the median home price in the surrounding area.

In 2011, the average price of a three-bedroom, single-family home in Scottsdale was $157,000, the report states. Today, the price is $231,000.

Newtown reported to the city the average cost to purchase and rehabilitate a home in Scottsdale is $80,000 over the highest price the homes may sell for to keep within federal regulation, the report describes.

The HOME Investment Partnership Program is the largest federal block grant to state or local governments, and is designed specifically to create affordable housing for low-income households.

According to the report, Newtown applied to the city of Scottsdale for HOME funding and was awarded specific amounts to be distributed over four fiscal years, totaling approximately $1.2 million.

The 2013-14 funds were postponed after the development corporation reported increasing housing costs in Scottsdale, which prevented them from using HOME funds according to federal regulation, the report describes.

A total of $855,000 HOME funds from 2011-15 remain unused and must be returned to Maricopa County to be reallocated through the Maricopa HOME Consortium, the report adds.

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