HOME AGAIN SUMMARY

1) The City retains Enforcement, Prevention and Demolition

• Status of all three components detailed in document
• Eminent Domain not recommended as an additional enforcement strategy;
receivership needs further study (opinions from CA’s Office in document)

2) Acquisition and Rehab become the function of a Housing Trust subsidiary. The City
retains checks and balances in the process by:
• Writing all rehab specifications, inspect properties and approve contractors
• Creating acquisition strategy and identifying the properties the Trust is to
acquire
• Creating an Advisory Council, staffed with members of the administration,
City Council and Trust board
• External audit of the Trust done w/oversight from City Auditor

3) We begin our efforts on Oakwood Avenue in the Model Zone. There are 12 vacant
properties on this street alone (map provided)
• The trust can begin to contact property owners on Oakwood immediately
• City Attorney’s Office is reviewing status of each property
• City already has $625,000 in Housing Preservation dollars that can be used for
acquisition purposes

4) We schedule 72 demolitions over the next 9 months, or 8 demolitions per month for
the rest of the year.
• A contract is being bid April 1. Additional work can be added to the contract
• The program will need an additional $434,000 for ’06 to meet the goal of 72

5) We set up the subsidiary of the Trust on a parallel tract as the items listed above (this
way we're getting results and building capacity for out years)
• The Housing Trust indicates a subsidiary has already been formed for acquisition
and rehabilitation purposes and can be used immediately

6) A communication plan for neighborhoods, CDCs and City Council (calendar attached)

7) Future operating needs (bond money cannot be used for operating needs)
• Shared database to track Home Again program
• Additional rehab techs for City
• Housing Trust estimates needing $240,000 in ’06 for operating expenses (2.5 full-
time employees—an additional employee will be added once capacity is built)
• Current operating budget of the City’s Land Bank is $625,127 ($211,000 of which
is paid by CDBG funds)
• City has received $600,000 from partners (Trust, OHFA, Cap Corp)
 DRAFT PLAN FOR HOME AGAIN 3/24/06

Mayor Coleman announced Home Again at his State of the City speech on
February 23, 2006. The initiative proposes to dedicate $25 million over six years towards
vacant housing in Columbus. There are roughly 3,200 vacant houses in the City, 376 of
which have been designated as the worst of the worst. The Mayor has proposed a five-
point plan for Home Again:

I. Enforcement
II. Prevention
III. Acquisition
IV. Rehabilitation
V. Demolition

The following is a summary of the City’s efforts to date on each component of Home
Again.

ENFORCEMENT

On Monday, March 13, Columbus City Council adopted legislation that allows
the enforcement component of Home Again to officially begin. The effort is collaboration
between the City Attorney’s Office, Development and Public Safety. The team consists of
Bridget Carty and Frank Gill in the City Attorney's Office; Bill Walker and Lt. Richard
Bash in Safety; Melinda Garcia Metz and Erika Clark Jones in the Mayor's Office; and
Mike Farrenkopf, Dana Rose and Greg Davies in Development. The team will meet on a
monthly basis, or as needed.

The legislation allows the City to placard vacant properties that are considered a
public nuisance. In the past, the City could only placard properties that were deemed
hazardous. Code Enforcement has ordered 2,500 new placards which are being placed on
all openings of any vacant property that is considered a public nuisance. This step is
extremely critical in that police officers now have the ability to arrest anyone who is
inside a placarded structure. An updated list of placarded homes will be e-mailed weekly
from code enforcement to the police division’s community liaison officers.

In order to track the information, a website is being created to track all relevant
information on a vacant property, including applicable overlays and a history of all
known offenses that have occurred at the property. Police stress this increased visibility
and enforcement will have an immediate impact on neighborhoods since vacant
properties are often associated with criminal activity and arson. Neighborhood leaders
have expressed strong support for the enforcement issue.

Public Safety has secured funds in the model zone for additional tracking
resources. Hand-held devices will be distributed to police officers who will have “real-
time” access to all known information on any placarded structure in their patrol area.
Officers will be able to update the information via the hand-held device that will be able
to access a database. It is the hope of Safety to demonstrate the usefulness of the
technology to possibly take the program citywide at a future date.

The new initiative functions as follows:

1. A code enforcement officer is given a list of vacant property addresses. The code
officer arrives at an address and gets evidence (pictures, written violations, etc)
which is then written into an affidavit
2. The evidence that is gathered, along with a history of the property from Police, is
compiled and forwarded to Bridget Carty in the City Attorney’s Office. The legal
action is published in the Daily Reporter, thus providing written notice to the
property owner, a court date is received and the case moves through the system.
3. If the owner does not comply within 30 days, the property is automatically
declared a public nuisance and daily fines begin to accumulate (City will seek
maximum of $250 per day). Frank Gill has been hired by the City Attorney to
track all court dates and make sure that every case is being followed and that all
critical dates are being adhered to.
4. If the property owner does not come into compliance, the foreclosure process is
initiated, ultimately leading to a sheriff’s sale.

As a result of this new process, the City Attorney’s Office expects 3-6 months will
be eliminated. More importantly, police will be able to monitor and provide
enforcement in a much more aggressive manner, ultimately leading to safer
neighborhoods.

The following are thoughts from Dan Drake and John Klein in the City Attorney’s Office
on Eminent Domain and Receivership.

Eminent Domain:

To use eminent domain the City must have a public purpose to support the taking.
Generally speaking provided the city makes the necessary findings on each property there
is an argument to take nuisance type properties for redevelopment. However, a couple of
caveats. Because the public's adverse reaction to last summer's US Supreme Court case in
Kelo v. New London the General Assembly is looking to cut back on eminent domain
powers in Ohio. In addition the Ohio Supreme court is considering these types of taking
in the Norwood case. Both may place severe limitations or at least create legal obstacles
to these types of takes.

Using eminent domain, if the city can legally do so in the future, is not a fast or
inexpensive process. I would estimate that for any particular property the process to
getting clear title in the city would take a minimum of 2 years. Any program to acquire
properties through eminent domain requires expenditures for title searches and appraisals,
court costs and payment of compensation to the property onwer(s) for the market value of
the property.

Receivership:

As to the use of Receiverships as a mechanism to assist the city in acquiring such

properties, there may have been a communication disconnect between Bridget Carty of
our group and Bill Graves. Bridget and Bill did talk about the initiative generally and the
interest in acquiring properties. She did indicate that Cleveland may utilize the
Receivership process to some degree, but that Columbus has not. The City has not
utilized this procedure, which is a creature purely of the Ohio Revised Code, because it
does lend itself very easily in my opinion, to expediting the City's ownership of property
or in obtaining responsible ownership by others. Under the statutory scheme, a
lienholder, judgment creditor (such as the City which has a judgment for accumulated
building code violation fines for example) may apply to the Court, in which a proceeding
about an individual property already is pending, for the appointment of a Receiver to take
over the management and control of the property, to collect rents if any, to repair the
property, or to liquidate it at a judicial sale and pay the proceeds to the lienholders as in a
foreclosure sale. Unfortunately, the City cannot be the Receiver, nor can any other
person or entity having an interest in the property. This is similar to a Trustee in
Bankruptcy having authority over the property of the bankrupt to manage or liquidate it
for the benefit of the creditors. If the end goal is to sell the property, the Receiver applies
to the court for authority to do so, and usually that means a judicial sale to the highest
bidder after an appraisal, publication of notice, etc. A Receivership cannot be the end
purpose of a proceeding. The City could not commence a proceeding against the owner of
a dilapidated structure against which it had not already acquired some lien, judgment, or
other interest unlike an eminent domain proceeding. A Receivership is an equitable
remedy used in conjunction with other claims involving property, both real and/or
personal. The Receiver appointed by the Court answers to the Court and is entitled to a
fee for his services as well. In some cases, the Receiver is also entitled to obtain his own
legal counsel who also is entitled to a fee. So is the appraiser where the Receiver asks the
court for authority to sell the property. The entire process takes many months, or much
longer if the owner decides to contest the process. And, as I said the City would first have
to acquire some other judgment to begin with. That's the Receivership process in a
nutshell, and if you or the Mayor would like a more fulsome discussion we are available
any time.

PREVENTION

For 2006, City Council allocated $2 million for the Housing Preservation Bond
Fund.

Of that $2 million, $1.125 million was allocated to the Roof Repair Plus program
and another $250,000 was allocated for emergency shelter rehabilitation. The City has
initiated 88 roof repair cases. Of those, 6 have been completed; 23 are in construction and
59 are active cases that have not yet reached construction. The average cost of a roof
repair is $11,000.

The City has flexibility in spending the remaining $625,000. There is a backlog
for roof repair projects that the money can be directed to, or it can be added to the $3
million designated for Home Again in 2006 (of the $3 million; $1 million has been
earmarked for prevention). One could argue since the money is already appropriated, we
could use it to acquire properties in our defined target area. In either case, there will be no
issues with spending the money in 2006. Additionally, the bond funds are expected to be
spent quickly or designated for other housing components.

DEMOLITION

A realistic goal for 2006 would be to demolish 8 vacant houses per month for nine
months for a grand total of 72 demolitions in 2006. Each demolition averages $8,000, for
a grand total of $576,000.

The current budget for demolition in 2006 is $142,000. Therefore, an additional $434,000
would be needed to accomplish our goal of 72 demolitions. At this time, we have 20
structures we know we could demolish.

We are working with the City Attorney’s Office on possibly having all demolitions
attached to a court order. According to Brigdet Carty this could be done in the same
or/less time as our current process.

On April 1, Development is having a bid opening that will result in a contract that will
enable us to perform the demolitions referenced above.

ACQUISITION AND REHABILITATION

The recommendation is to turn both components over to the Housing Trust, using
the following model:

As discussed above, it is recommended that the Enforcement, Prevention and Demolition

phases of HOME AGAIN be managed internally by the City. These involve either the
use of government enforcement powers or functions that are currently managed by the
City in a successful way.

By contrast, the acquisition, rehab and sale of properties involve participation in the
marketplace, and these functions can be more efficiently and successfully managed by an
independent not-for-profit entity. Many US cities have delegated these functions to such
entities because: (1) there is a single-focus on the initiative; and (2) there are fewer
bureaucratic hurdles.
With that, it is recommended that the City engage The Affordable Housing Trust for
Columbus and Franklin County ("The Housing Trust") as its prime contractor to drive the
successful Acquisition and Rehabilitation phases of HOME AGAIN. This
recommendation also includes The Housing Trust assuming responsibility for the
residential portion of the City's Land Bank.

STRUCTURE AND ACCOUNTABILITY: A wholly-owned subsidiary of The Housing

Trust ("Trust Sub") will be exclusively used to carry out the acquisition, rehab and sales
activities of HOME AGAIN. Some of the activities of HOME AGAIN will be handled
by employees of the Trust Sub or The Housing Trust, and some will be contracted to
others. Several features of the model will ensure accountability by The Housing Trust to
the City. First, The Housing Trust will consult regularly with City staff and an Advisory
Council consisting of representatives from the administration and City Council. This
will result in ongoing progress measurement. Second, the City and The Housing Trust
will collaborate in identifying targeted neighborhoods and properties. Third, the City's
Housing Division will be used for: writing rehab specs; making progress inspections;
and approving eligible contractors. Finally, the external independent audit of The
Housing Trust and Trust Sub is conducted with the oversight of the City Auditor, and the
audit report is incorporated into the City's audit.

PROCESS:
Acquisition: Redevelopment priorities will be identified by the City, and the Trust Sub
will conduct feasibility assessments. The Trust Sub will also identify opportunities for
HOME AGAIN. Properties could be acquired by the City through enforcement actions,
and then deeded to Trust Sub; or properties could be purchased directly by Trust Sub
from willing sellers. Such purchase prices would have to be market-justified in the
context of the overall goals of HOME AGAIN. It is generally believed that targets
should be narrow rather than scattered; e.g. increased synergy from redeveloping several
houses on a street.

Rehabilitation: City Housing Division staff will write the rehab specifications for each
property. These specifications will only address issues of code violation -- not cosmetic
changes. The Trust Sub will select a contractor from the City's approved list to complete
the rehab. The Housing Trust is sensitive to the possible roles for Community
Development Corporations based in or near targeted areas. These CDC's are already
customers of The Housing Trust. At the same time, it is generally believed that many
CDC's do not have enough capacity to produce adequate results for the program.
Consequently, a range of for-profit and not-for-profit sub-contractors would be
considered.

Sale: Either before, during or after the rehab process, the Trust Sub or its agents will
market the properties for sale.
Alternative Approach: An alternative model could be used in instances where vacant
houses are unusual in a neighborhood. In such cases, a property could be transferred to
an eligible buyer who would be directly responsible for the rehab. The buyer's bank
would combine its loan with rehab funds from the Trust Sub, and the bank would be
responsible for disbursements and ensuring completion.

STAFFING AND COST: It is preliminarily estimated that the Trust Sub will carry
overhead operating expenses of $240,000 during the remainder of calendar 2006 --
exclusive of third party contracts that would be associated directly with the acquisition,
rehab, maintenance and sale of property. Mark Milligan will have executive
management responsibility, and it is anticipated that 2.5 FTE's will be added at the outset
-- increasing to 3.5 FTE's when justified by achievement.

READINESS TO PROCEED: Because the Trust Sub has already been formed, the
program could be implemented in early April.

(Under this scenario, portfolio management, i.e. upkeep of properties, would be the
responsibility of the Housing Trust and its subsidiary)

In addition to the model above, here is some research on what other cities have done
when weighing the pros and cons of this issue:

Land Bank Research

Re: Pros and Cons of Land Bank Authorities

Most urban cities are burdened by a growing number of vacant, tax-delinquent

properties. Over the past 30 years, a number of land banking programs were initiated
to curb this trend. The Local Initiatives Support Corporation (LISC) published a
study in 2005 of 5 metropolitan areas with formalized land bank programs considered
to be successful in their revitalization efforts: Atlanta, Cleveland, Genesee, Louisville
and St. Louis.

Each of these cities varies in their amount of vacant properties, but it’s interesting to
note that 3 of the 5 cities (Atlanta, Genesee and Louisville) use authorities to manage
their land bank program. St. Louis uses an authority for the sale and redevelopment of
its land bank property. Only Cleveland operates completely within local government.
However, Cleveland’s program limits itself far more than the other programs by only
banking unimproved vacant land.

Cleveland State University conducted a study in 2005 that included all of the above
cites with the addition of Baltimore. Baltimore has received recent notoriety in the
land bank industry as successfully revitalizing vacant properties. Baltimore is
interesting in that is does not have a formalized land bank program. Instead
Baltimore formed a partnership with the Baltimore Economy and Efficiency
Foundation and the Greater Baltimore Board of Realtors. They implemented an
initiative called Selling City Owned Properties Efficiently (SCORE). This program
offers incentives to local realtors that represent and sell City-owned property. This
program uses realtors much the way St. Louis uses its authority in that a non-
governmental organization is doing the selling.

Based off of the above studies, below are some the general pros and cons to using an
authority to manage a land bank program.

PROS:

1. Maneuver through the Real Estate Process more efficiently

a. A non-profit authority, with its own corporate structure and bylaws, in
collaboration with local government, can acquire and sell property much
more quickly and efficiently because it is not subject to many of the
ordinances that a government agency is.

b. A non-profit authority has more flexibility to negotiate real estate pricing

and terms on a case-by-case basis in the best interest if the City. Local
government tends to lack the ability to efficiently negotiate land sales.

2. Qualify for more funding

a. A non-profit authority is eligible for funding from a larger array of funding
sources for the use of acquisition, rehabilitation and disposition of vacant
properties. This allows the authority to exist on more than just local
government funding.

b. Local government is limited by nature in the type of funds it can receive

for redevelopment projects.

3. Coordinate independently with government Agencies

a. Vacant property initiatives require strong communication between local,
county and state government. Authorities, in some instances, are able to
bridge gaps between the various levels of government to facilitate the
government foreclosure process, as well as, needed changes in laws and
regulations concerning the land bank.

CONS:

1. Lack ability to manage land bank properties

a. Many authorities are great at the acquisition and disposition of property,
but are poor at managing the properties while in their possession. This
leads to further blight and community frustration.

b. Many authorities also lack the ability to manage properties that are going
through the rehab process. A land bank program is only successful if it is
able to get the properties sold and rehabilitated. Often properties are sold
to developers who either never start or complete the rehab process. In this
 instance, the authority needs to have the ability to revert the property back
into authority ownership.

c. The above tends to be a problem to both authority and government owned

land banks.

2. Lifespan of authorities can be short

a. As a general rule, land banks need 5 years to demonstrate success.
Reasons being that is takes time to work through any foreclosure process,
as well as, to complete a significant number of rehabs and new builds.
Many authorities are legislated out of existence, due to a lack of awareness
of the real estate process on the part of local government, before they have
had a chance to demonstrate their success.

Sources:

• Land Bank Authorities: A Guide for the Creation and Operation of Local Land Banks. Frank S.
Alexander, Local Initiatives Support Corporation (LISC), April 2005.

• Best Practices in Land Bank Operation. Maxine Goodman, Levin College of Urban Affairs,
Cleveland State University, June 2005.

ATTACHED IN A SEPARATE DOCUMENT IS A LEGAL SUMMARY FROM

BRICKER AND ECKLER ON ANY POTENTIAL PROGRAM