What are the benefits of participating as a property owner?
Benefits to participating in the program include:
- Free home improvements with compliance with the affordability commitment.
- Program managers identify, schedule, and pay the contractors for you.
- More loyal, longer-term tenants. Lower utility bills help alleviate financial stress for tenants, and could entice them to stay longer, meaning fewer months with no tenants.
- For months in between tenants, landlords save on energy costs, too.
What are the costs of participating as a property owner?
Landlords can get a rough idea of program costs versus benefits by determining how much they would have charged for rent without the affordability commitment in place, and how much they are instead receiving in grant funding in place of these rent increases. (Remember, landlords can still raise rent while in the program, so long as it does not exceed the rate of inflation. For example, a unit with a $1000/month rental rate, rent could be increased from 2022 to 2023 by $65, as the annual Consumer Price Index inflation rate for 2022 was 6.5%).
Most property owners who currently own affordable housing intend to continue keeping their properties at an affordable level for the foreseeable future. For these owners, the costs of the program will be minimal, as the affordability commitment asks landlords to commit to a practice that they are already doing. With the addition of the reasonability justification, landlords can now adjust their rental amounts to accommodate major shifts in local rental rates, further reducing any costs associated with program participation.
Do I need to pay back this “zero-interest, forgivable loan?”
So long as you abide by the affordability commitment for the length of time that you sign up for, you will not need to pay anything back. Any time a program distributes a financial award that includes a payback condition (for this program, it is the affordability commitment), it is legally considered a loan. However, there are no monthly payments, no interest accrues, and for most participants, it should not affect your debt-to-income ratio. However, you should consult with your financial advisor to determine the exact impact of the program on your personal and/or business finances.
What does a second mortgage mean for me?
Because this program attaches that payback condition to a property, the type of loan is a second mortgage. Unlike what is typically thought of as second mortgages, this program does not have a monthly payment amount, and its commitment period is a maximum of 7 years instead of 15 or 30, as is typical of second mortgages. You will need to consult with your financial advisor to determine the impact of the program on your personal and/or business finances.
How do I make sure I get the affordability commitment timeline that I want?
Alachua County works with Rebuilding Together North Central Florida, a 501c3 non-profit with a long history in our community, to evaluate your property and determine what sorts of energy efficiency improvements will make the biggest impact on utility bills. They then work with contractors to develop a series of quotes detailing the costs of various upgrades, and work directly with you, the landlords, to determine which upgrades you want at the quoted costs. Rebuilding Together NCF will then put together a work order with your agreed-upon upgrades, which will serve as the basis of determining the affordability commitment.
What if I need to leave the program early? (This could mean selling the property, no longer renting the property, or choosing to raise the rental rate beyond inflation without an approved reasonability justification.)
While Alachua County understands that sometimes unexpected things happen, landlord participants are only one half of the parties impacted by a decision to leave the program. Like the rest of the country, Alachua County is facing an affordable housing crisis for renters, which this program is designed to address. Should you choose to leave the program early, you will be asked to pay back the entirety of the award amount and an additional 10% administrative fee. This ensures that we are able to redistribute the funding to another property to support our local affordable housing rental market.
What if my rental is in an HOA?
Rebuilding Together NCF works with every property owner to determine the best course of action to bring down energy costs for tenants. They will work to ensure that the upgrades they recommend comply with HOA guidelines, and in some circumstances, will even file paperwork with your HOA on the landlord’s behalf (with the landlord’s permission).