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02 REVISIONS HSG ELEMENT OF GPA 09-001 06-16-09
Agenda item Reviewed: AGENDA REPORT city Manager Finance Director m1A MEETING DATE: JUNE 16, 2009 TO: WILLIAM A. HUSTON, CITY MANAGER FROM: COMMUNITY DEVELOPMENT DEPARTMENT SUBJECT: REVISIONS TO HOUSING ELEMENT OF THE GENERAL PLAN AMENDMENT (GPA 09-001) SUMMARY The Housing Element sets forth the City's strategy to preserve and enhance the community's character, expand housing opportunities for the City's various economic segments, and provide policy guidance for local decision making related to housing. The City is mandated by the State to revise its Housing Element to include recent available data. On June 17, 2008, the City Council adopted the Housing Element Update as required by State Law. Following the adoption, the State Department of Housing and Community Development recommended revisions to the adopted Housing Element to comply with State Housing Element Law. Those revisions have been made and the City now proposes to adopt revisions to the adopted Housing Element. On March 24, 2009, the Planning Commission considered this item and recommended that the City Council approve the revisions to the Housing Element. RECOMMENDATION That the City Council adopt Resolution No. 09-33 approving General Plan Amendment 09-001, revising the adopted Tustin Housing Element. FISCAL IMPACT The cost for the preparation of the Housing Element Update was appropriated in Fiscal Year 2008-09 budget. BACKGROUND The availability of housing and a suitable living environment for every family has been of increasing concern to all levels of government. In California, this concern is addressed by the California Government Code requirement that each City adopt a Housing Element as a mandatory part of its General Plan. State Planning Law requires that cities and counties update their Housing Elements at least every five (5) years. Tustin is part of the Southern California Association of Governments (SCAG) region. Each city within this region was required to update the Housing Element by June 30, City Council Report GPA 09-001 Page 2 2008, to address housing needs for the 2006-2014 planning period. In anticipating completion of the update by the due date, the City progressed as follows: May 21, 2008 The Planning Commission conducted an workshop to familiarize the public with the purpose and intent of the Housing Element Update. May 27, 2008 The Planning Commission held a public hearing on the Housing Element Update and the environmental document and recommended that the City Council certify the environmental document and adopt the Housing Element Update as proposed. June 10, 2008 The City sent Draft Housing Element to the State Department of Housing and Community Development (HCD). June 17, 2008 The City Council adopted the environmental documents and the Housing Element Update. June 24, 2008 The City sent adopted Housing Element to HCD as required by State Law. September 19, 2008 HCD provided a comment letter and requested revisions be made to the Housing Element Update. March 24, 2009 The Planning Commission held a public hearing on the revisions to the adopted Housing Element Update and recommended that the City Council approve the revisions to the Housing Element. April 2, 2009 The City sent revised Housing Element to HCD for review as required by State Law. June 1, 2009 HCD provided further comments and required further revisions be made to the Tustin's Housing Element. Between April 2, 2009 and June 10, 2009 Staff diligently worked with HCD staff via emails and faxes and discussed outstanding issues via telephone and conference calls on approximately ten (10) occasions. June 10, 2009 HCD provided the City with approval letter. The revised Housing Element included in this report is a collaborative effort with input from the public, non-profit organizations, city departments, and HCD to produce a Housing Element that is effective, achievable, consistent with Housing Law, and addresses local and regional needs. City Council Report GPA 09-001 Page 3 DISCUSSION Purpose of the Housing Element The purpose of the Housing Element is to assure that the City: 1) recognizes its responsibility in contributing to the attainment of State housing goals; 2) prepares and implements the Housing Element toward attainment of State housing goals; 3) determines efforts that are required to contribute to the attainment of State Housing goals; and 4) ensures that the City cooperates with other local governments to address regional housing needs. In general, the Housing Element sets forth the City's strategy to: • Preserve and enhance the community's character; • Expand housing opportunities for the City's various economic segments; and • Provide the policy guidance for local decision making related to housing. Housing Element Content The City's Housing Element addresses the following topical areas: 1. Summary of Issues, Needs, Constraints, and Opportunities 2. Review of Previous Policies, Programs, and Objectives 3. Identification of Goals and Policies 4. Implementation Programs The Summary of Issues, Needs, Constraints, and Opportunities section summarizes Tustin's current and projected housing needs to form the basis for establishing program priorities and quantified objectives in the Housing Element. The Review of Previous Policies, Programs, and Objectives section provides a summary of the City's previous policies, programs, and objectives. This allows the City to assess its past performance and provide evaluation of efforts in meeting the identified goals and objectives. In general the City was successful in accomplishing the majority of the objectives established in the past planning period. The Identification of Goals and Policies section contains the goals and policies the City intends to implement related to a number of housing -related issues. The Implementation Program section provides specific actions the City intends to undertake to achieve the established goals and policies. This section identifies quantified objectives, available financial resources and affordable housing resources, and provides a list of specific programs the City intends to pursue. The Housing Element Technical Memorandum is an accompanying document that provides background information and supporting documentation to the Housing Element. The City utilized the most recent available data to complete both the Technical Memorandum and the Housing Element Update. These data include but are not limited to: 2007 Regional Housing Needs Assessment, Census 2000 (available data only), City Council Report GPA 09-001 Page 4 Center Demographic Research data, California Department of Finance data, Third Five Year Implementation Plan (FY 2005-2006 to FY 2009-2010), Comprehensive Housing Affordability Strategy for FY 2008-2009 to FY 2012-2013, HCD Website and Building Blocks, and Real Facts. Other sources are as noted in the Housing Element and Housing Element Technical Memorandum. HCD Required Revisions After Council's adoption of the Housing Element on June 17, 2008, HCD provided comments and corrections (Attachment C). In general, HCD requested the City to provide: • A more detailed land inventory analysis that demonstrates the combination of vacant and underutilized sites can accommodate Tustin's remaining regional housing need for lower income households including programs to assist in the development of housing affordable for extremely low income households. • Strengthen its programmatic commitment to implementing programs identified in the Housing Element. • Describe its efforts in making the draft housing element available for public review. • Provide detail analysis on the City's efforts to preserve "at -risk units" identified in the Housing Element. • Provide analysis related to emergency shelters, transitional housing and supportive housing demonstrating compliance with Senate Bill (SB) 2. Exhibit A to Resolution No. 4113 is the revised Housing Element and Technical Memorandum. The revisions are identified in italics and contain those revisions in response to HCD and public input. City staff worked diligently with HCD staff via emails, fax, and phone calls to address any outstanding issues and on June 10, 2009, via a letter faxed to the City, HCD indicated that the revisions to the Housing Element address the statutory requirements of the State Housing Element Law (Attachment D). Letters Received During the preparation of the Housing Element Update in 2007-2008, the City received four (4) letters and staff provided comments and responses to the Planning Commission and City Council prior to adoption of the Housing Element Update in June 2008. Since then, two (2) letters were received: 1) a letter dated September 15, 2008, from the Kennedy Commission; and, 2) a letter dated September 23, 2008, from the Public Law Center (Attachment E). City Council Report GPA 09-001 Page 5 • Letter from Kennedy Commission Comment: The Kennedy Commission commented that the City should extend the public participation in the draft revisions and public hearings to achieve the participation of lower income households and community members. Response: The City advertised the availability of the Housing Element in English and Spanish in two local newspapers and also made the Housing Element available at City Hall, the City's website, and the Tustin Library. The City also sent a direct mailing to 118 organizations consisting of youth, seniors, veterans, disabled, homeless shelters, cultural organizations, housing advocates, religious organizations, housing builders, fair housing council, and individuals interested in the process. Comment: Production in the City is not meeting the housing needs for low income families and the City should encourage and facilitate multi -family affordable housing development. Response: The City is in negotiation with a Master Developer to create rental units at the Tustin Legacy. In addition, the Cottages development at 1361 EI Camino Real has been converted into rental housing, thus providing additional rental units to the Tustin housing stock. The Housing Element has been updated with the latest information accordingly. Comment: When considering large households, including large, low income families, the draft should address the needs and barriers for large families and create specific goals, policies and programs and sites to encourage and facilitate new construction of large family developments. Response: The Housing Element Technical Memorandum provided the data and analysis of large families (pages 24-26). Policy 1.14 of the Housing Element encourages the availability of special needs households including large families. In addition, when the City enters into a negotiation with developers, the City requires bedroom counts for affordable units be provided in the same ratio as non -affordable units. This would require developers to set aside larger units as affordable units in proportion to their development proposal. Comment: The City should examine zoning and codes that may impede housing for persons with disabilities. Universal design standards should be studied and encouraged. Response: The City has expanded analysis and discussion related to persons with disabilities (see Housing Element page 42). The City also has added a program to remove constraints to reasonable accommodation for the disabled by proposing a Zoning Code amendment during the planning period to accommodate the process. City Council Report GPA 09-001 Page 6 Comment: The City is encouraged to consider a survey of local homeless providers and shelters to account for clients served and those turned away due to capacity and consider that the homeless population may extend to individuals who are living in temporary housing. Response: The City has expanded discussion related to Homeless Accommodation (see Housing Element pages 43-48). The City includes policies to encourage the provisions of housing and programs for the homeless and those that may become homeless such as: Policy 1.14 encourages the availability of affordable housing for special needs households including the homeless, Policy 1.18 provides continued support for the County Homeless Assistance program, Policy 1.19 encourages the provisions of grants and technical assistance to various organizations and agencies that provide assistance to special needs such as the homeless, Program 1.10 encourages the continuation of transitional housing facilities, Program 1.11 supports countywide efforts in assisting homeless providers by designating sites and land uses at Tustin Legacy to accommodate the needs of the homeless not only for Tustin, but also the needs of adjacent communities. In addition, a 192 -bed transitional facility (Village of Hope) has been completed and currently is in operation to accommodate the City's homeless population. Comment: The Element fails to plan for specific policies and programs to assist and facilitate the development of affordable homes for the extremely low-income families. Response: Various transitional homes have been created transparently throughout the Villages of Columbus to accommodate various transitional housing needs to the extremely low income families such as families with children, women with children, children, etc. (see Housing Element page 47). The following are transitional homes that have been provided at Tustin Legacy and pursuant to the State guidelines can be counted towards the current planning period: • A 90 -bed intermediate care shelter for abused children and their parents to be operated by the Orange County Social Services Agency (under construction). • Six (6) new units at Tustin Field I operated by the Salvation Army. • Acquisition of 16 units in Buena Park operated by the Salvation Army. The City assisted in acquisition and contributed grant funds to acquire the units. • Fourteen (14) new units at Columbus Grove operated by Families Forward, formerly Irvine Temporary Housing.' • Six (6) new units at Columbus Grove operated by Human Options. • Six (6) new units at Columbus Grove operated by Orange Coast Interfaith Shelter. Although these units are located in the City of Irvine, these units were negotiated as part of the base realignment/conveyance process with Tustin as the Local Redevelopment Agency City Council Report GPA 09-001 Page 7 Comment: The City should examine height, parking, and setback requirements for multi -family development. The City should update its density bonus ordinance to be consistent with requirements of SB 1818. Response: The City has expanded its discussion regarding height and parking (see Housing Element page 38 for discussion of height, page 41 for discussion on parking, and Housing Element Technical Memorandum pages 54-57 for detail discussion on height and parking requirements). Comment: The Element does not appear to support the provisions of sites for the construction of new affordable homes for lower income families. The element should describe what funding and programs will be utilized to encourage the development of these homes. Response: The City has expanded discussion on what funding and programs will be utilized for the creation of affordable units in meeting the RHNA objectives. The Housing opportunities sites (beginning on page 50 of the Housing Element), identifies opportunities sites and progress towards RHNA. This section also identifies financing and costs on project specific. Under the Housing Element Implementation Program (beginning on page 77 of the Housing Element), the City identifies projects and programs in meeting the remaining RHNA objectives along with financing mechanism in achieving the goals. Comment: The City is encouraged to identify site at appropriate densities to accommodate the needs for lower income families. The City should evaluate and develop policies, densities, and programs in the range of 30 homes to the acre. Response: The City has expanded Table H-15 (pages 65-67) to include total density/realistic capacity for each specific site. Comment: The City would have to rezone sites to accommodate the lower income housing needs. The City needs to accommodate housing sites for extremely low, very low, and low income households through a program that allows rezoning and by -rights development of the sites for lower income households. Response: Based upon the City's analysis of the opportunity sites and implementation programs, adequate sites are available to meet the RHNA objectives. In addition, the City has identified specific programs to accommodate RHNA objectives without having to rezone any of the identified sites during this planning period. However, the City supports development of housing to meet the needs of various types and income groups through potential rezoning of available sites. • Letter from Public Law Center (PLC) Comment: The Public Law Center emphasizes the need for the City to comply with the provisions for public participation. City Council Report GPA 09-001 Page 8 Response: As indicated previously, the City advertised the availability of the Housing Element in English and Spanish in two local newspapers and also made the Housing Element available at City Hall, the City's website, and the Tustin Library. The City also sent a direct mailing to 118 organizations consisting of youth, senior, veterans, disabled, homeless shelters, cultural organizations, housing advocates, religious organizations, housing builders, fair housing council, and individuals interested in the process. The City also conducted various workshop and public hearings to encourage public participation. Comment: PLC encourages the City to consider the recommendations, issues, and approach to addressing regional housing needs contained in the letter from the Kennedy Commission, Response: Comments noted and the City has addressed all comments contained in the letter from the Kennedy Commission. Environmental Review Pursuant to the California Environmental Quality Act (CEQA) Guidelines Section 15162, the City of Tustin reviewed the revisions to the Housing Element and determined that all effects associated with the revisions to the Housing Element were adequately evaluated when the City considered adoption of the Housing Element Update on June 17, 2008, that no new effects would occur, that no substantial increase in the severity of previously identified significant effects would occur, that no new mitigation measures would be required, that no applicable mitigation measures previously not found to be feasible would in fact be feasible, and that there are no new mitigation measures or alternatives applicable to the project that would substantially reduce effects of the project that have not been considered and adopted. The revisions to the Housing Element make clarifying and technical changes that do not affect the prior environmental determination. Jus a Willkom Principal Planner Attachments: D, E. Elizabeth A. Binsack Community Development Director City Council Resolution No. 09-33 Planning Commission Resolution No. 4113 Letter dated September 19, 2008, and June 1, 2009, from the State Department of Housing and Community Development (HCD) Approval Letter from HCD dated June 10, 2009 Letters Received ATTACHMENT A City Council Resolution No. 09-33 RESOLUTION NO. 09-33 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN APPROVING GENERAL PLAN AMENDMENT (GPA) 09-001, REVISING THE ADOPTED TUSTIN HOUSING ELEMENT IN COMPLIANCE WITH STATE LAW. The City Council does hereby resolve as follows: The City Council finds and determines as follows: A. That California Government Code Section 65588 requires each City review as frequently as appropriate and revise its Housing Element as appropriate. B. That the City prepared a Housing Element Update pursuant to Government Code Section 65588 and incorporated comments received on the draft from the State Department of Housing and Community Development ("HCD"). C. That the City utilized the most recent available data in completing the Housing Element Update and that the City has worked diligently with HCD to produce an effective Housing Element. D. That in anticipating completion of the Housing Element Update, the City progressed as follows: May 21, 2008 The Planning Commission conducted a workshop to familiarize the public with the purpose and intent of the Housing Element Update. May 27, 2008 The Planning Commission held a public hearing on the Housing Element Update and the environmental document and recommended that the City Council certify the environmental document and adopt the Housing Element Update as proposed. June 10, 2008 The City sent Draft Housing Element to the State Department of Housing and Community Development (HCD). June 17, 2008 The City Council adopted the environmental documents and the Housing Element Update. Resolution No. 09-33 Page 2 June 24, 2008 September 19, 2008 The City sent adopted Housing Element to HCD as required by State Law. HCD provided a comment letter and requested revisions be made to the Housing Element Update. March 24, 2009 The Planning Commission held a public hearing on the revisions to the adopted Housing Element Update and recommended that the City Council approve the revisions to the Housing Element. April 2, 2009 The City sent revised Housing Element to HCD for review as required by State Law. June 1, 2009 HCD provided further comments and required further revisions be made to the Tustin's Housing Element. Between April 2, 2009 and June 10, 2009 Staff diligently worked with HCD staff via emails and faxes and discussed outstanding issues via telephone and conference calls on approximately ten (10) occasions. June 10, 2009 HCD provided the City with approval letter. E. That the City advertised the availability of the Housing Element in English and Spanish in two local newspapers and also made the Housing Element available at City Hall, the City's website, and the Tustin Library. The City also sent a direct mailing to 118 organizations consisting of youth, senior, veterans, disabled, homeless shelters, cultural organizations, housing advocates, religious organizations, housing builders, fair housing council, and individuals interested in the process. F. That a public workshop was held on May 21, 2008, to familiarize the general public with the purpose and intent of the Housing Element Update. G. That a public hearing was duly called, noticed, and held on May 27, 2008, by the Planning Commission to consider and provide further opportunity for the general public to comment on the proposed Housing Element Update. H. That a public hearing was duly called, noticed, and held on June 17, 2008, by the City Council to consider and provide further opportunity for the general public to comment on the proposed Housing Element Update. Resolution No. 09-33 Page 3 That the City Council considered environmental documentation and adopted the Housing Element Update on June 17, 2008. J. That HCD reviewed the adopted Housing Element Update and recommended revisions and the City prepared revisions to the Housing Element. K. That a public hearing was duly called, noticed, and held on March 24, 2009, by the Planning Commission to consider and provide further opportunity for the general public to comment on the proposed revisions to the Housing Element. The Planning Commission recommended that the City Council approve the revisions to the Housing Element. L. That a public hearing was duly called and noticed on June 2, 2009, by the City Council to consider and provide further opportunity for the general public to comment on the revisions to the Housing Element. The City Council continued the public hearing to June 16, 2009, to allow staff to further revise the Housing Element in response to HCD's comments. M. That a public hearing was duly called, noticed, and held on June 16, 2009, by the City Council to consider and provide further opportunity for the general public to comment on the revisions to the Housing Element. N. Pursuant to the California Environmental Quality Act (CEQA) Guidelines Section 15162, the Housing Element and associated revisions were adequately evaluated when the City considered adoption of the Housing Element Update, on June 17, 2008. II. The City Council hereby approves an amendment to the City of Tustin General Plan (GPA 09-001) revising the Tustin Housing Element and its Technical Memorandum as identified in Exhibit A attached hereto. PASSED AND ADOPTED by the City Council of the City of Tustin, at a regular meeting on the 16th day of June, 2009. DOUG DAVERT MAYOR PAMELA STOKER CITY CLERK Resolution No. 09-33 Page 4 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) CERTIFICATION FOR RESOLUTION NO. 09-33 PAMELA STOKER, City Clerk and ex -officio Clerk of the City Council of the City of Tustin, California, does hereby certify that the whole number of the members of the City Council of the City of Tustin is five; that the above and foregoing Resolution No. 09-33 was duly passed and adopted at a regular meeting of the Tustin City Council, held on the 16th day of June, 2009, by the following vote: COUNCILMEMBER AYES: COUNCILMEMBER NOES: COUNCILMEMBER ABSTAINED: COUNCILMEMBER ABSENT: PAMELA STOKER, CITY CLERK EXHIBIT A Resolution No. 99-33 Housing Element TUSTIN GENERAL PLAN 2009 This page intentionally left blank. TABLE OF CONTENTS Section Page INTRODUCTION TO THE HOUSING ELEMENT 1 Purpose Of The Housing Element 1 Scope And Content Of Element 2 Consistency With State Planning Law 2 General Plan Consistency 4 Citizen Participation 5 SUMMARY OF ISSUES, NEEDS, CONSTRAINTS AND OPPORTUNITIES 87 Summary Of Housing Needs 8-7 Preservation Of Units At Risk Of Conversion 23-22 Summary Of Housing Issues 31-27 Housing Constraints 30 Housing Opportunities 5240 HOUSING ELEMENT GOALS AND POLICIES 7553 Housing Supply/ Housing Opportunities 75-3 Maintenance And Conservation 8058 Environmental Sensitivity 81-59 Related Goals And Policies 8260 HOUSING ELEMENT IMPLEMENTATION PROGRAM 8364 Five Year Quantified Objectives 8364 Identification Of Affordable Housing Resources 9466 Housing Programs 12586 APPENDICES A - Review of Past Performance B - Affordability Gap Analysis C - Affordable Housing Capital Plan D - Public Participation Mailing List E - References CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN i 2009 LIST OF TABLES Page TABLE H-1: STATE HOUSING ELEMENT REQUIREMENTS 3 TABLE H- 2: POPULATION GROWTH 98 TABLE H- 3:EMPLOYMENT PROJECTION 109 TABLE H- 4: LIST OF MAJOR EMPLOYERS 1244 TABLE H- 5: JOBS/HOUSING BALANCE 1342 TABLE H- 6: APARTMENT INVENTORY CHARACTERISTICS 1645 TABLE H- 7: TENURE OF HOUSEHOLDS WITH HEAD OF HOUSEHOLD AGED 65 YEARS OR OLDER 184-7 TABLE H- 8: EMERGENCY SHELTER/TRANSITIONAL HOUSING FACILITIES 2224 TABLE H- 9: ASSISTED HOUSING INVENTORY 2624 TABLE H-10: SUMMARY OF EXISTING HOUSING NEEDS 3127 TABLE H-11: ANTICIPATED DEVELOPMENT AT MCAS-TUSTIN 405 TABLE H-12: LAND INVENTORY AND RESIDENTIAL DEVELOPMENT POTENTIAL 5442 TABLE H-13: PROGRESS TOWARD RHNA CONSTRUCTION NEEDS 5543 TABLE H-14: VACANT AND UNDERUTILIZED LAND WITH RESIDENTIAL DEVELOPMENT POTENTIAL 6346 TABLE H-15: VACANT LAND SUITABLE FOR RESIDENTIAL DEVELOPMENTS 7149 TABLE H-16: HOUSING RELATED GOALS AND POLICIES BY ELEMENT 8260 TABLE H-17: NEW CONSTRUCTION QUANTIFIED OBJECTIVES SUMMARY 9163 TABLE H-18: REHABILITATION, PRESERVATION, AND OTHER AFFORDABLE HOUSING QUANTIFIED OBJECTIVES 9365 TABLE H-19: SUMMARY OF QUANTIFIED OBJECTIVES 9466 TABLE H- 20: LOW AND MODERATE INCOME HOUSING SET ASIDE FUNDS PROJECTIONS 9567 TABLE H- 21: AFFORDABLE HOUSING RESOURCES 10169 TABLE H- 22: HOUSING ELEMENT PROGRAMS 2006-2014 12687 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN ii 2009 INTRODUCTION TO THE HOUSING ELEMENT The availability of decent housing and a suitable living environment for every family has been of increasing concern to all levels of government. In California, this concern is addressed by the California Government Code requirement that each City adopt a Housing Element as a mandatory part of its General Plan. State Planning Law mandates that jurisdictions within the Southern California Association of Governments (SCAG) region adopt revisions to their Housing Elements by June 30, 2008. As a consequence of this due date, a series of time frames for various aspects of the Housing Element preparation are established. There are three relevant time periods: ° 1998-2005: The previous planning period began in 1998, and ended on June 30, 2005. ° January 2006 -June 2014: a planning period for assessing short-term housing construction needs. 2008-2014: an implementation period for housing programs. The planning period for the Regional Housing Needs Assessment (RHNA) as prepared by SCAG, is from January 1, 2006 to June 30, 2014, an eight and one-half year period. The implementation period covered by this element is June 2008 to June 2014. By 2012, the City, along with other jurisdictions in the SLAG region, again will begin preparation for a revision of the housing element to cover the period from 2014-2019. PURPOSE OF THE HOUSING ELEMENT The Land Use Element is concerned with housing in a spatial context while the Housing Element identifies housing programs aimed at meeting the identified housing needs of the City's population. The Tustin Housing Element includes the identification of strategies and programs that focus on: 1) housing affordability, 2) rehabilitating substandard housing, 3) meeting the existing demand for new housing, and 4) conserving the existing affordable housing stock. The Tustin Housing Technical Memorandum provides background information and supporting documentation. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 1 2009 SCOPE AND CONTENT OF ELEMENT The State Legislature recognizes the role of the local general plan, and particularly the Housing Element, in implementing statewide housing goals. Furthermore, the Legislature stresses continuing efforts toward providing affordable housing for all income groups. The Legislature's major concerns with regard to the preparation of Housing Elements are: ° Recognition by local governments of their responsibility in contributing to the attainment of State housing goals; ° Preparation and implementation of housing elements which coordinate with State and Federal efforts in achieving State housing goals; ° Participation by local jurisdictions in determining efforts required to attain State housing goals; and ° Cooperation between local governments to address regional housing needs. The State Department of Housing and Community Development (HCD) sets forth specific requirements regarding the scope and content of housing elements. CONSISTENCY WITH STATE PLANNING LAW The preparation of the City's Housing Element is guided by and must conform to Section 65580 et seq. of the California Government Code. In the introduction of these Government Code sections, the Legislature establishes a policy that the availability of housing in a suitable environment is of vital statewide importance, and a priority of the highest order. It further states that local governments are to address the housing needs of all economic segments, while considering the economic, environmental and fiscal factors and community goals set forth in the General Plan. The following table cites the required components for the Housing Element and cites the document and page references for the required components. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 2 2009 TABLE H-1 STATE HOUSING ELEMENT REQUIREMENTS CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 3 2009 Required Housing Element Component Page A. Housing Needs Assessment 1. Analysis of population trends in Tustin in relation to regional trends HTM 9 & HE 8 2. Analysis of employment trends in Tustin in relation to regional trends HTM 12 & HE 9 3. Projection and quantification of Tustin's existing and projected housing needs for all income groups HE 27, HE 40, HTM 40 4. Analysis and documentation of Tustin's housing characteristics including the following: a level of housing cost compared to ability to pay; HTM 22 b overcrowdin • HTM 17 c) housing stock condition. HTM 31 5. An inventory of land suitable for residential development including vacant sites and having redevelopment potential and an analysis of the relationship of zoning, public facilities and services to these sites HE 40 6. Analysis of existing and potential governmental constraints upon the maintenance, improvement, or development of housing for all income levels HTM 49 & HE 32 7. Analysis of existing and potential non-governmental and market constraints upon maintenance,_ improvement, or development of housing for all income levels HTM 62 & HE 30 8. Analysis of special housing need: disabled, elderly, large families, female- headed households, farmworkers HE 15 & HTM 23 9. Analysis concerning the needs of homeless individuals and families in Tustin HE 18 & HTM 26 10. Analysis of opportunities for energy conservation with respect to residential development HTM 67 B. Goals and Policies 1. Identification of Tustin's goals, quantified objectives and policies relative to maintenance, improvement, and development of housing HE 53 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 3 2009 TABLE H-1 STATE HOUSING ELEMENT REQUIREMENTS source: k- n ortua wvernment �,-oae, 9ati5zo, et at. GENERAL PLAN CONSISTENCY While a city must consider housing needs for all economic segments, it must also maintain internal consistency among other elements of the General Plan as required by state law. Neither the Housing Element nor any other element may supersede any other required Tustin General Plan elements. The Housing Element relates to other elements in a variety of ways. The Land Use Element directly relates to the Housing Element by designating areas of the City in which a variety of residential types and densities exist. The Housing Element's relationship to the Conservation, Open Space, and Recreation Element is conditioned by the need to serve a growing population's recreational needs in the areas of the City with CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 4 2009 Required Housing Element Component Page C. Implementation Program An implementation program should do the following: 1. Identify adequate sites which will be made available through appropriate action HE 58-98 with required public services and facilities for a variety of housing types for all income levels 2. Assist in the development of adequate housing to meet the needs of low -and HE 58-98 moderate -income households 3. Identify and, when appropriate and possible, remove governmental constraints HE 58-98 to the maintenance, improvement, and development of housing 4. Conserve and improve the condition of the existing and affordable housing HE 58-98 stock 5. Promote housing opportunities for all persons HE 58-98 6. Identify programs to address the potential conversion of assisted housing HE 58-98 developments to market rate units source: k- n ortua wvernment �,-oae, 9ati5zo, et at. GENERAL PLAN CONSISTENCY While a city must consider housing needs for all economic segments, it must also maintain internal consistency among other elements of the General Plan as required by state law. Neither the Housing Element nor any other element may supersede any other required Tustin General Plan elements. The Housing Element relates to other elements in a variety of ways. The Land Use Element directly relates to the Housing Element by designating areas of the City in which a variety of residential types and densities exist. The Housing Element's relationship to the Conservation, Open Space, and Recreation Element is conditioned by the need to serve a growing population's recreational needs in the areas of the City with CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 4 2009 the highest density. Also, housing needs for low cost land must be balanced by the need to conserve natural resources. The Circulation Element attempts to provide an efficient and well- balanced circulation system. This system must be designed to accommodate allowed land uses, including residential uses, and the intensity of allowable uses should not exceed the ultimate capacity to accommodate them. The Safety Element relates to the Housing Element by designating areas that are unsafe for development such as Alquist-Priolo Zones, floodplain, etcetera. Similar to the Safety Element, the Noise Element relates to the Housing Element by addressing a health related issue area. Techniques for reducing noise often involve buffers between land uses. The Growth Management Element overlaps the issues raised in the Housing Element in its efforts to enure that the planning, management, and implementation of traffic improvements and public facilities are adequate to meet the current and projected needs of Orange County. The Housing Element has been reviewed for consistency with the City's other General Plan elements and policy directions. As parts of the General Plan are amended in the future, this housing element will be reviewed to ensure that consistency is maintained. CITIZEN PARTICIPATION The California Government Code requires that local governments make diligent efforts to solicit public participation from all segments of the community in the development of the Housing Element. Public participation in the Housing Element Update process occurred through the following methods: ° A public workshop was conducted on May 21, 2008 to present the draft Housing Element and provide an opportunity for interested person to ask questions and offer suggestions. Notice of this workshop was published in the Tustin News, on the City's website, and was also mailed to CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 5 2009 the City's list of local housing interest groups. A copy of the mailing list is included as Appendix C. ° Specific implementation programs included in the Housing Element Update were also discussed at various public hearings over the last 18 months in anticipation of the Housing Element Update. These hearings include adoption of the Second Five-year Implementation Plan for the Town Center and South Central Redevelopment Project areas for fiscal years 2005-2006 to 2009-2010 public hearing held on December 6, 2004, the Federal Community Development Block Grant Program public hearings held on February 25, 2008, April 15, 2008, and May 6, 2008, and adoption of the City's of Tustin's Comprehensive Housing Affordability Strategy for fiscal years 2008-2018 held on June 17, 2008. ° Public hearings were held on May 27, 2008, by the Planning Commission and on June 17, 2008, by the City Council to provide additional opportunities for public review and comment on the Housing Element Update and supporting documents. All public meetings were advertised in the Tustin News and the City's website. Special notifications were also sent to those on the City's list of interested parties. ° Draft Housing Element, Technical Memorandum, and relevant documents were made available at the City Hall, Library, on City's website for easy access and download, and mailed to requesting parties. Public comments received were evaluated and incorporated into the staff report to the Planning Commission and the City Council. As appropriate, the Housing Element has been revised to address these comments. On June 10, 2008, the City sent the draft Housing Element to the Department of Housing and Community Development (HCD). On June 17, 2008, the City Council adopted the Housing Element Update as required by the State Law. Following original adoption, on June 24, 2008, the City sent the adopted Housing Element to HCD for review. On September 19, 2008, the City received comments from HCD. Upon receiving comments from HCD and other non -profits organizations, the City amended its Housing Element further to address the comments. The City advertised the availability of the CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 6 2009 Housing Element in English and Spanish in two local newspapers and also made the Housing Element available at City Hall, the City's website, and the Tustin Library. The City also sent a direct mailing to 118 organizations consisting of youth, seniors, veterans, disabled, homeless shelters, cultural organizations, housing advocates, religious organizations, housing builders, fair housing council, and individuals interested in the process. Revised Housing Element and its relevant documents are posted on the City website to allow the public and interested organization easy access and download. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 7 2009 SUMMARY OF ISSUES, NEEDS, CONSTRAINTS AND OPPORTUNITIES This section of the Housing Element summarizes Tustin's current and projected housing needs to form the basis for establishing program priorities and quantified objectives in the Housing Element. This section also: • Estimates the number of households that meet Federal or State criteria for special consideration when discussing specialized needs; • Evaluates assisted units at risk of conversion; • Describes constraints that may discourage the construction of new housing; and • Examines housing opportunity sites. SUMMARY OF HOUSING NEEDS A number of factors will influence the degree of demand or "need" for housing in Tustin. The major "needs" categories considered in this Element include: Housing needs resulting from increased population and employment growth in the City and the surrounding region; ° Housing needs resulting from household overcrowding; Housing needs resulting from the deterioration or demolition of existing units; Housing needs that result when households are paying more than they can afford for housing; ° Housing needs resulting from the presence of "special needs groups" such as the elderly, large families, female -headed households, households with a disabled person, and the homeless; and Housing needs resulting from conversion of the assisted housing stock to market rate. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 8 20082009 Population Growth As shown in Table H-2, between 2000 and 2007 the City's population grew from 67,504 to 72,542, an increase of 7.5%. The City of Tustin's growth rate between 2000 and 2007 was slightly slower than the countywide growth rate but faster than most surrounding cities. Recent projections cited in the Comprehensive Affordable Housing Strategy 2008, indicate that Tustin's population will increase by an annual rate of approximately 1.5% during this implementation period, bringing the total population to 86,621 by the year 2015. Table H-2 compares the City's growth rate between 2000 and 2007 with other Orange County cities and the County as a whole. A large percentage of Tustin's population growth can be attributed to annexations that have occurred since 1980. The remainder can be attributed to a variety of other factors, including shifts in family structures from smaller to larger families, redevelopment of existing developed areas, infill development, and new residential construction in East Tustin and Tustin Legacy (former Marine Corps Air Station [MCAS] Tustin). Substantial population and housing growth will continue during this planning period with the continued development at Tustin Legacy. TABLE H- 2 POPULATION GROWTH 2000-2007 CITY OF TUSTIN, SURROUNDING JURISDICTIONS AND ORANGE COUNTY jurisdiction 2000 2007 Growth 2000-07 Tustin 67,504 72,542 7.5% Anaheim 328,014 345,556 5.3% Garden Grove 165,196 172,781 4.6% Irvine 143,072 202,079 41.2% Santa Ana 337,977 353,428 4.6% Orange County 2,846,289 3,100,313 8.9% Source: 1 2000 U.S. Census 2 Department of Finance estimates, 2007 Population projections are shown in Table H -2A. According to Orange County Projections (OCP) 2006 data, the population in the City of Tustin is expected to increase by approximately 10 percent to 88,694 persons by the year 2025. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 9 20082009 TABLE H- 2A Population Projection Source: lX_r zum Employment According to 2000 Census data, the City of Tustin had 36,681 residents in the labor force, of which 34,906 (95.2%) were in the labor market. Of these, 79.3% were private wages and salary workers. Table HTM-4 in the Technical Memorandum shows the breakdown of employees by occupation. In 2000, the largest occupational category was professional and related occupations, in which a total of 7,467 were employed. The second largest category was the management, business, and financial operations occupations, employing 6,657. Table H-3 provides employment projections between the years 2010 and 2025. According to OCP -2006 Modified data, employment in the City of Tustin is expected to increase by approximately 47 percent by the year 2025. TABLE H- 3 Employment Projection 2010 2015 2020 2025 Percent Change (2010-2025) Tustin 80,728 86,621 88,245 88,694 10% Source: lX_r zum Employment According to 2000 Census data, the City of Tustin had 36,681 residents in the labor force, of which 34,906 (95.2%) were in the labor market. Of these, 79.3% were private wages and salary workers. Table HTM-4 in the Technical Memorandum shows the breakdown of employees by occupation. In 2000, the largest occupational category was professional and related occupations, in which a total of 7,467 were employed. The second largest category was the management, business, and financial operations occupations, employing 6,657. Table H-3 provides employment projections between the years 2010 and 2025. According to OCP -2006 Modified data, employment in the City of Tustin is expected to increase by approximately 47 percent by the year 2025. TABLE H- 3 Employment Projection source: ver /um moamea, rreparea by (—enter for uemograptuc Kesearch. In terms of industry, the manufacturing, and educational, health and social service sectors employed the largest number of persons with 5,980 (17.1%) and 5,081 (14.6%) employees, respectively. Table H-4 is a summary of the number of employees by industry. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 10 20082009 2010 2015 2020 2025 Percent Change (2010-2025) Tustin 46,742 56,340 64,386 68,551 47% source: ver /um moamea, rreparea by (—enter for uemograptuc Kesearch. In terms of industry, the manufacturing, and educational, health and social service sectors employed the largest number of persons with 5,980 (17.1%) and 5,081 (14.6%) employees, respectively. Table H-4 is a summary of the number of employees by industry. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 10 20082009 Due to its favorable location, demographics, and business environment, Tustin is home to several best known employers. Appendix C lists major employers in the City of Tustin. The City's top ten employers include: Tustin Unified School District, AT&T, Ricoh Electronics, Inc., Rockwell Collins, Cherokee International, ADC Telecommunications, Balboa Instruments, Toshiba America Medical Systems, the City of Tustin, and Costco Wholesale. Table H-4 provides a list of the largest private sector employers in Tustin in 2007. The list includes a variety of industries, including manufacturing, health care, retail, and technology sectors. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 11 20052009 TABLE H- 4 LIST OF MAJOR EMPLOYERS IN TUSTIN, CA Company/Address/Telephone No. Emp. Product/Service Tustin Unified School District - (714) 730-7301 1,886 Education 300 South C St. - Tustin 92780 AT&T - (714) 259-6667 1,300 Telecommunications 1442 Edinger Ave.- Tustin 92780 Ricoh Electronics, Inc - (714) 259-1220 1,038 Manufacturer 1100 Valencia Ave. - Tustin, 92780 Rockwell Collins - (714) 317-8102 700 Manufacturer 14192 Franklin Ave.- Tustin, 92780 Cherokee International - (714) 544-6665 330 Power Supplies 2841 Dow Ave. - Tustin, 92780 ADC Telecommunications, Inc - (714) 259-7729 300 Telecommunications 15621 Red Hill Ave. - Tustin, 92780 Equipment Balboa Instruments - (714) 384-0384 300 Electronic 1382 Bell Ave. - Tustin, 92780 Manufacturer Toshiba America Medical Systems - (714) 730-5000 300 Distributor, Medical 2441 Michelle Dr. - Tustin, 92780 Equipment City of Tustin - (714) 573-3000 300 Government 300 Centennial Way - Tustin 92780 Costco Wholesale - (714) 838-7895 241 Wholesale Trade 2655 El Camino Real - Tustin 92780 Woodbridge Glass Inc - (714) 838-4444 205 Glass & Glazing Work 14321 M ford Rd. - Tustin 92780 Costco Wholesale - (714) 338-1943 200 Wholesale Trade 2700 Park Ave. - Tustin 92780 Logomark, Inc. - (714) 675-6100 200 Wholesale Trade 1201 Bell Ave. - Tustin 92780 SMC Corporation of America - (714) 669-0941 200 Manufacturer 14191 M ford Rd. - Tustin 92780 Tustin Hospital - (714) 669-5880 200 Hospital 14662 Newport Ave. - Tustin, 92780 Vitatech International, Inc. - (714) 832-9700 178 Pharmaceutical 2832 Dow Ave. - Tustin 92780 Preparations Home Depot - (714) 838-9200 154 Retail 2782 El Camino Real - Tustin, 92780 Straub Distributing Company - (714) 247-7300 150 Wholesale Trade 2701 Dow Ave. - Tustin, 92780 Dawn Food Products, Inc - (714) 258-1223 150 Wholesale Bakery 15601 Mosher Ave. - Tustin, 92780 Durabag Company Inc - (714) 259-8811 150 Manufacturer 1301 Santa Fe Dr. - Tustin, 92780 5UUM t;: Uty of Iustm Website, Vctober 26, 2007, Tustin Chamber of Commerce, Tustin Community Development Department, and Orange County Workforce Investment Board 2007 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 12 20082009 Jobs -Housing Balance The "jobs -housing balance" test is a general measure of a community's employment opportunities with respect to its residents' needs. A balanced community would reach equilibrium between employment and housing opportunities so the majority of the residents could also work within the community. Table H-5 shows the 2005 jobs -housing balance for the City of Tustin as well as Orange County and the Southern California region. Tustin had a jobs/housing ratio of 1.56 in 2005, while Orange County and the region had jobs/housing ratios of 1.48 and 1.19, respectively. This demonstrates that Tustin is a job -rich community when compared to county and regional averages. TABLE H- 5 JOBS/HOUSING BALANCE CITY/COUNTY/REGION 2005 Tustin I Orange County I SCAG Region Employment 40,449 1 1,496,200 7,123,700 Housing Units 25,927 1,013,036 6,005,879 jobs/ Housing Ratio 1.56 1.48 1.19 Sources: California Department of Finance; Center for Demographic Research; SCAG; Comprehensive Affordable Housing Strategy 2008-2018. Overcrowding Along with the City's population growth, there has been an increase in unit overcrowding, as households "double up" to save on housing costs. Overcrowding is often reflective of one of three conditions: 1) a family or household is living in too small a dwelling; 2) a family chooses to house extended family members (i.e., grandparents or grown children and their families living with parents, termed doubling); or 3) a family is renting living space to non -family members. State and Federal Housing Law defines overcrowded housing units as those in which the ratio of persons -to -rooms exceeds 1.0. The rooms considered in this equation exclude bathrooms, kitchens, and hallways, but includes other rooms such as living and dining rooms. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 13 20092009 The 2007 Regional Housing Needs Assessment (RHNA) prepared by the Southern California Association of Governments (SCAG) figures showed 4,285 (17 percent) households living in overcrowded conditions. Of the households living in such conditions, 81% were renters, of which 40% were Extremely -Low or Very -Low income households. Table HTM-8 of the Housing Element Technical Memorandum illustrates the numbers of all Tustin households living in overcrowded conditions. According to SCAG's 2007 Final RHNA, the incidence of overcrowding in Tustin was high in 2006, at 4,285 households, or 18.0 percent of all households. Renter households had a significantly higher incidence of overcrowding than owner households: 28.9 percent of renter and 6.9 percent of owner households were overcrowded. The 2007 Regional Housing Needs Assessment (RHNA) prepared by the Southern California Association of Governments (SCAG) figures showed 2,390 (9 percent) households living in overcrowded conditions of which 51 percent were Low- income households. Low-income households are those earning 80 percent or less than the county median family income (MFI). Income levels are discussed further in the "affordability" section. Substandard Units By 2010, 68 percent of the City's housing stock will be over 30 years old, the age at which housing tends to require significant repairs. This indicates a potential need for rehabilitation and continued maintenance of over 14,500 dwelling units'. Affordability State and Federal standards for rental housing overpayment are based on an income -to -housing cost ratio of 30 percent and above. Households paying greater than this percentage will have less income left over for other necessities, such as food, clothing and health care. Upper income households are generally capable of paying a larger proportion of their income for housing, and therefore estimates of housing overpayment generally focus on lower income groups. ' Housing Element Technical Memorandum Table HTM-21. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 14 2-9952009 As identified in the 2007 RHNA estimates, the Technical Memorandum on Table 11-A, points out that 1,585 renter households and 525 owner households are at or below 30% of the Area Median Income (AMI) and considered "Extremely Low Income." The 2007 RHNA estimates also show 6,190 of Tustin households were paying more than 30 percent (overpaying) of their income on housing needs. Of these over -payers, 3,935 or 64% were lower-income households (<80% of AMI). Among the overpaying lower-income households, about 30% were extremely low income (<30% of AMI), 31% were very low income (<50% of AMI), and 39% were low-income households (<80% of AMI). Table HTM-12 of the Housing Element Technical Memorandum reflects SCAG's 2007 RHNA estimates for households overpaying for shelter. While the extremely low income households are currently housed, they are in a precarious position, particularly those overpaying for housing in light of the current housing market, and could face the threat of homelessness. The distinction between renter and owner housing overpayment is important because, while homeowners may over -extend themselves financially to afford the option of home purchase, the owner always maintains the option of selling the home, thereby generally lowering housing costs. In addition, home ownership affords tax benefits to reduce monthly costs. Renters are limited to the rental market, and are generally required to pay the rent established in that market. According to the RHNA, of the total 3,935 lower income households identified as overpayers, 2,660 were renter households and 1,275 were owner households. This discrepancy is largely reflective of the disproportionate number of rental housing units in the City and the tendency of renter households to have lower incomes than owner households (see Table HTM-12 in Technical Memorandum). Table H-6 summarizes the characteristics of the current apartment inventory in the City of Tustin as of the second quarter 2007 based on data from REALFACTS. The data include a total of 29 apartment properties and 5,903 units, with an average of 203 units per property. All properties in the inventory have at least 93 units and were built between 1957 and 1997. Therefore, the data do not include small multifamily properties. The overall rental vacancy rate for Tustin in the second quarter of 2007 was 4.6 percent, up slightly from 4.3 percent in the first quarter CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 15 20052009 of 2007. Generally, a vacancy rate of 5 percent is considered to reflect a "tight" housing market. As noted above, Department of Finance data for Tustin as of January 2007 show a vacancy rate of 2.71 percent for all housing types in Tustin (single- and multi -family, owner and rental). The data show that approximately 40 percent of apartment units in the City have one bedroom, 52 percent have two bedrooms, and 5 percent have three bedrooms. Average monthly rents are $1,292 for a one -bedroom, one -bath unit. For two-bedroom units, average monthly rents are $1,436 for units with one bath, $1,253 for units with one and a half baths, $1,810 for units with two baths, and $1,674 for two-bedroom townhouse units. The average monthly rent for a three-bedroom unit with one and a half baths is $1,641 and for a three-bedroom unit with two baths the average rent is $2,431. The average rent for a three-bedroom townhouse unit is $1,861. The weighted average rental rate for the inventory increased 5.4 percent over the past year2. Rents for one-bedroom/one-bath properties increased the most at 6.9 percent, followed by three- bedroom townhouse units at 6.8 percent, junior one -bedrooms at 6.6 percent and two-bedroom/one-bath units at 5.2 percent. TABLE H- 6 Apartment Inventory Characteristics Tune 2(1(1'7 Unit Size Units Percent Average SF Average Rent Average Rent/SF Studio 200 3.4% 521 $1,138 $2.18 Jr 1 BR 32 0.5% 470 $1,050 $2.23 1 BR/1 BA 2,312 39.2% 733 $1,292 $1.76 2 BR/1 BA 706 12.0% 974 $1,436 $1.47 2 BR/1.5 BA 266 4.5% 945 $1,253 $1.33 2 BR/2 BA 1,885 31.9% 1,024 $1,810 $1.77 2 BR TH 194 3.3% 1,074 $1,674 $1.56 3 BR/1.5 BA 36 0.6% 1,371 $1,641 $1.20 3 BR/2 BA 216 3.7% 1,173 $2,431 $2.07 3 BR TH 56 1 0.9% 1,441 $1,861 $1.29 TOTAL 5,903 100.0% 894 $1,528 $1.72 "TH" signifies a Townhouse Unit. Note: Averages for the Total row are weighted averages. Sources: Realfacts; Comprehensive Affordable Housing Strategy 2008 - 2018 2 These weighted average rents weight the average rent by bedroom count by the number of units in that bedroom count category. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 16 20052009 Affordability Gap Analysis In addition to information related to Housing Constraints provided in the City's Housing Element Technical Memorandum, a Comprehensive Housing Affordability Strategy has been prepared. The report contains a detailed affordability gap analysis to illustrate the "gap" between the cost of developing housing for rent and ownership and what households at a variety of income levels can afford to pay toward their housing expenses. A Summary of Renter and Owner Affordability Gaps for certain prototypical unit types and incomes are provided as Appendix "B.3" Special Needs Groups Certain segments of the population may have a more difficult time finding decent, affordable housing due to special circumstances and may require specific accommodation or assistance to meet their housing needs. Included as special needs groups are the elderly, disabled, female -headed households, large families, and homeless. With the closure of MCAS -Tustin, military personnel are no longer covered as a special needs group. Additionally, there are no known "farmworkers" residing in Tustin and, therefore, this group is not discussed. Elderly: The special needs of many elderly households result from their lower, fixed incomes, physical disabilities, and need for assistance. As shown in Table HTM-2, persons aged 65 years or older in Tustin comprised 7.1 percent of the population in 2000. Table H-7 shows the tenure of households with the head of household aged 65 years or older in the City of Tustin in 2000. The City had 747 renter households and 2,086 owner households with a head of household aged 65 years or older. Households with a senior householder represented 11.9 percent of all households in the City. 3 Summary based on data contained in Comprehensive Housing Affordability Strategy, 2008. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 17 20082009 TABLE H- 7 Tenure of Households with Head of Household Aged 65 Years or Older 2000 Head of Household 65 Years or Older Tenure # Households % Households Renters 747 6.2%1 Owners 2,086 17.6%2 Total Households 2,833 11.9°/%3 I As a percentage of 12,002 renter households. 2 As a percentage of 11,829 owner households. J As a percentage of 23,831 total households. Source: 2000 U.S. Census; Comprehensive Affordable Housing Strategy 2008 - 2018. Table H -7A shows the estimated household income distribution for householders aged 65 years or older in 2000. Approximately 27 percent of elderly households earned less than $20,000 annually, or about 36 percent of AMI for a household of two persons in 2000.4 TABLE H -7A Estimated Household Income Distribution Households with Head of Household Aged 65 Years or Older 2000 Income Range Number' Percent Cumulative % . Less Than $10,000 300 10.4% 10.4% $10,000-$19,999 467 16.2% 26.6% $20,000-$34,999 618 21.4% 48.0% $35,000-$49,999 439 15.2% 63.2% $50,000-$74,999 520 18.0% 81.2% $75,000-$99,999 211 7.3% 88.5% $100,000 or More 332 11.5% 100.0% Total Households 2,887 100.0% Derived by applying the percentage of households with head of household aged 65 years or older by income category from Summary File 3 Table P55 (based on sample data; total number of households shown as 23,853) to a total of 23,831 households from Summary File 1, Table H-1 for consistency with other Census data on the number of households used in this report. Source: 2000 U.S. Census; Comprehensive Affordable Housing Strategy, 2008-2018. 4 HUD median household income for a family of four in Orange County in 2000 was $69,600. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 18 20082009 Disabled: Physical disabilities can hinder access to housing units of traditional design and potentially limit the ability to earn adequate income. According to the 2000 U.S. Census, a total of 7,610 persons in Tustin between 16 and 65 years of age reported a disability. In addition, 1,795 persons over age 65 reported a disability in 2000. Special housing needs of disabled individuals include wheelchair accessibility, railings, and special construction for interior living spaces. The Housing Element sets forth policies to encourage the development of disabled -accessible housing (see policies 1.14, 1.17, 1.19). Large Families: A family household containing five or more persons is considered a large family, as defined by the Census. Large families are identified, as groups with special housing needs because of the limited availability of adequately sized, affordable housing units. Large families are often of lower income, frequently resulting in the overcrowding of smaller dwelling units and accelerating unit deterioration. According to the 2000 Census, 3,267 family households, or 15 percent of all households, had five or more persons (see Housing Element Technical Memorandum Table HTM-14). Of those, approximately 40 percent were owner -households and 60 percent were renter households. Female -Headed Parent Households: The housing needs of female - headed households with children are generally related to affordability since such households typically have lower than average incomes. According to the 2000 Census, the City of Tustin had 1,178 female -headed households with children less than 18 years of age. Single Room Occupancy (SRO): Single room occupancy unit typically is a 250 to 500 square feet residential unit, with a sink and closet, which may require the occupant to share a communal bathroom, shower, and/or kitchen. SRO units are allowed within the City's Multiple Family Residential districts and Planning Area 3 of the MCAS Tustin Specific Plan. Single room occupancy units such as rest homes also are allowed within Commercial Districts in the city through approval of a Conditional Use Permit. Although no specific ordinance is in place to address SRO CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 19 22009 units, the City may consider the adoption of single -room occupancy (SRO) ordinance during the planning period. The Homeless: Measuring the extent of the homeless population specifically in Tustin remains a challenge for community leaders. To complicate the challenge of meeting homeless persons' needs, the issue of homelessness is considered regional in nature. Nomadic tendencies of homeless persons make it difficult to assess the population accurately on a citywide basis; therefore, homelessness should be addressed on a countywide basis, in conjunction with cities and local non-profit organizations. The Orange County Housing and Community Services Department (HCS) defines homelessness as not having a permanent address, sleeping in places not meant for habitation, not having ample food and medical attention or a place to change clothes or bathe. Per this definition, HCS estimates there are nearly 35,000 homeless in the County. The County's homeless population is comprised of about 30 percent individuals and 70 percent families, including an estimated 16,300 homeless children. For those 35,000 homeless, there are only about 3,400 available beds, including 1,512 emergency shelter beds and 1,888 beds in transitional housing facilities. The homeless population is comprised of subgroups, which include: a) The economic homeless who lack financial resources to pay rent; b) The situational homeless who have suffered economic or personal trauma and find themselves in personal disorganization; and, c) The chronic homeless who are unable to care for themselves due to chronic illness, disability or debilitating substance abuse. The City of Tustin's 2005-2010 Consolidated Plan states that, according to police reports and windshield surveys performed within the City of Tustin, most homeless persons migrate through Tustin to other parts of the County rather than stay for extended periods of time within the City. The City's Police Department estimates that there are 10-12 homeless persons residing in the City at any given time. There are numerous factors that contribute to homelessness in Tustin and Orange County. The known causes of homelessness include CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 20 20092009 unemployment, limited skills, and a breakdown in the family as a social and economic unit. Additionally, cutbacks in social service programs and the de -institutionalization of the mentally ill during the 1980s have contributed to the homeless population. A new trend, however, is emerging as a significant contributing element to homelessness: a fast-growing lack of affordable housing, which could exacerbate any of the above conditions, but may increasingly become astand standalone cause of homelessness. Although there are no established areas where homeless persons congregate in the City, there are several homeless services facilities in the City. Of the shelters in Tustin, the 45 -bed Sheepfold shelter provides shelter, food, clothing, job training, and job -referral services primarily to battered women and children. Guests are admitted on a first-come, first-served basis. Usually all beds are fully occupied. The shelter services a large area including many portions of Orange and San Bernardino Counties. Within the City of Tustin, there are a variety of Non -Profit Organizations (NPOs) that provide direct housing and related services to homeless persons. These include Village of Hope, an emergency/ transitional home; Sheepfold, a feeding program affiliated with the United Way; Families Forward, a homeless provider; Olive Crest, transitional homes and services for abused and neglected children, a and Laurel House, an emergency shelter and transitional housing provider for homeless youth in the City. Additional programs will also be provided at the Tustin Legacy site. A Homeless Assistance Plan has been established for MCAS, Tustin that is consistent with the continuum of care model embodied in the Consolidated Plans for the Cities of Tustin and neighboring Irvine. The fundamental components of the continuum of care system to be implemented with the MCAS Tustin Specific Plan would: ° Provide emergency shelter beds and intake assessment Offer transitional housing and services Provide opportunities for permanent affordable housing by the private sector. In the Tustin Legacy, the Local Redevelopment Agency owns sites and four homeless service providers including the Salvation Army, Orange Coast Interfaith Shelter, Families Forward, and Human CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 21 20982009 Options have been approved and currently are operating 48 family units. The Orange County Rescue Mission operates a 192 -unit transitional/ emergency shelter (Village of Hope) and the Orange County Social Services Agency will operate a 90 beds facility for abused and neglected children and their family. Numerous other agencies provide shelter and other services to the homeless in the nearby cities of Santa Ana, Irvine, and Orange. The Orange County Homeless Issues Task Force, a non-profit homeless advocacy organization, maintains a list of these and other homeless services in Orange County. Table HTM-16 is a list of organizations in Tustin that provide homeless services. TABLE H- 8 EMERGENCY SHELTER/TRANSITIONAL HOUSING FACILITIES Facility Services Provided Sheepfold Provides shelter, food, clothing, job training, and job -referral services to women with children. Temporary housing for teenagers in crisis. The Laurel House facility also provides food, informal counseling, and access to medical care and clothing. St. Cecilia's Distributes food supply to needy populations. Redhill Lutheran Operates emergency food program where a person can receive food supply 3 times a year. Collects food supplies and distributes the food to Tustin Presbyterian various organizations involved in providing homeless services. Aldergate Refers interested persons to Ecumenical Services Alliance in Santa Ana. 192 bedsunits transitional home at the Village of Village of Hope Hope to be operated by the Orange County Rescue Mission 90 beds intermediate care shelter for abused Tustin Family Campus children and their parents to be operated by the Orange County Social Services Agency. Salvation Army Six (6) new transitional units at Tustin Field I to be operated by Salvation Army and Acquisition of 16 transitional units in Buena Park Salvation Army to be operated by Salvation Army. The City assisted in acquisition and contributed grant funds to acquire the units CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 22 20082009 Fourteen (14) new transitional units at Columbus Families Forward' Grove to be operated by Families Forward, formerly Irvine Temporary Housing in Irvine. Human Options Six (6) new transitional units at Columbus Grove to be operated by Human Options Orange Coast Interfaith Six (6) new transitional units at Columbus Grove Shelter to be operated by Orange Coast Interfaith Shelter. Although these units are located in the City of Irvine, these units were negotiated as part of the base realignment/ conveyance process which Tustin is the Local Redevelopment Agency. Source: City of Tustin, 2008 Additional discussion regarding land use regulations that apply to facilities serving the homeless is found in the Housing Constraints section of this document and in the Technical Memorandum. PRESERVATION OF UNITS AT RISK OF CONVERSION According to 2007 RHNA, Tustin has one project that contains units at risk of converting to unrestricted market rate during the 2006-2014 planning period. Tustin Gardens is a 101 -unit Section 221(D)(4) project with a Section 8 contract for 100 units that is due to expire on July 13, 29882009. Projects financed under the Section 221(D)(4) market rate program alone have no binding income use restrictions. Current provisions under the law allow for the existing project to opt out of contracts or for HUD to terminate such contracts. The project owners of Tustin Gardens have indicated that they intend to continue or to accept the conversion of the project to individual Section 8 certificates (household by household income qualifying criteria). In addition to Tustin Gardens, there are at total of 177 units in three other bond financed projects (Rancho Alisal, Rancho Maderas, and Rancho Tierra) located in Tustin Ranch that are at risk of converting to market rate by 2012. Table H-9 is an inventory of all multi -family rental units assisted under federal, state, and/or local programs, including HUD programs, state and local bond programs, redevelopment programs, and local in -lieu fee, inclusionary, density bonus, or direct assistance CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 23 20052009 programs. The inventory includes all units that are eligible to convert to non -lower income housing uses due to termination of subsidy contract, mortgage prepayment, or expiring use restrictions. Various restrictions and incentives affect the likelihood that at risk units will convert to other uses. Congress passed the Low Income Housing Preservation and Resident Homeownership Act (LIHPRHA) in 1991. This measure assured residents that their homes would be preserved for their remaining useful lives while owners were assured of fair -market compensation. However, modifications to the Act in 1996 restored the owners' right to prepayment, under the previsiensprovisions that the owner would be encouraged to sell the property to resident endorsed or other non-profit organizations. Tustin Gardens is the only project based Section 8 subsidized project at -risk of losing affordability restrictions during the Housing Element planning period. However, it appears unlikely that the affordability of these units will be threatened based on the determination that project based Section 8 contracts can be renewed on an annual basis. Given the relative weakness of economic conditions and the current housing market, the city will proceed to negotiate the extension of affordability restrictions on these units. The amount of assistance provided will be negotiated based on the specific economics of each development and the potential availability of leverage financing, such as tax-exempt bonds and 4% tax credits. The total amount of funds allocated to this program during this planning period is $2,181,672. Programs for Preservation of At -Risk Units: The City will make efforts to preserve units "at risk" at Tustin Gardens and the three projects owned by The Irvine Company in Tustin Ranch. The cost of acquiring and preserving the at -risk units is less than replacing the units with new construction. As discussed earlier, the City allocated $2,181,672 of the Redevelopment Housing Set Aside funds as the City enters into negotiation with respective property owners. Actual amount required to preserve these units is currently unknown. The City will also be looking at possible subsidizing units and/or work with nonprofits in the community to explore possible new construction of replacement housing by nonprofits or acquisition of existing buildings with at risk units by nonprofit organizations. The CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 24 20082009 specific actions that the City will take to protect (or replace) at risk units are identified in the Housing Element Implementation Program. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 25 29952009 N r u o W W ° 0000 o U u CD w w Ll ON N 6J � ~ O v G N z u u o � S u o S u w w k cu ,�_ v C 90 —(1) y oo cC o v� (JUQ� cit H .,O U U Q) . z 0 0 0 0 W u 00 Q) 3 a „z x� °'° u W .yi �+ ... t"' cu Q U S w. -i ►-7 cn �+ y„ � � T1 o x o w H O 00 .., M00 Q Qom? x cTi G �.8 u u C7 a4 ii QUV� fs. 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L� O O p cD M eq rA R 4 ° Vl � r iu.� y t iVr i y ivn v Cpy C iVr y y G N WR°.V A ate+ �oa-a Lf) 0""a �oaa .a t0 �op.^o r �'Ar. c a a sa a, a It c a v c V o o 0 u Vi �.� t0.. 0 In �.� c0. u �-E P vbo bio ror� v 55V Q Q Q Q Q 0 0 0 0 0 dH °a •�a •�a •�c L� •�� > O o O O > > > > o (u2 2 N zvN w a HH In uH �H uH uH MM h� zo 0 O � N � j •� z v r ro o � H F U.r� Q W F Q o v v � 00 w Q 9 o N 41 CA d 41 rZ �x �v v Z y'aA z z oQ ¢ z�v Ha o zQR ow U C7 SUMMARY OF HOUSING ISSUES Housing is a fundamental component of land use within a community necessary to support the resident population. Obtaining affordable housing has become a problem for persons of all income groups in California. The following Table H-10 presents an overview of households in the City with special housing needs or problems with their existing housing, such as overpayment or overcrowded conditions. The following text highlights the issues relevant to the City of Tustin, which are addressed by the goals, policies and implementation plans. TABLE H-10 SUMMARY OF EXISTING HOUSING NEEDS CITY OF TUSTIN 2006-2014 Growth Needs 1 Special Needs Grou Very Low Units 512 Elderly Persons2 4,804 Low nits 410 Disabled Persons 2,162 Moderate nits 468 Lar e Households3 3,095 Above -Moderate (Units) 991 Female -Headed Households with Children under 18 years 1,700 TOTAL 2,381 Overcrowding Overpaying Households 1 Renter Owner 3,465 820 Renter - Total Renter - <80% MFI Owner - Total Owner - <80% MFI 3,080 2,660 3,110 1,275 TOTAL 4,285 Tota1 8,569 Kegional nousmg Needs Assessment, x ACi, 2UU7. 2 Persons age 65 and over. S Households containing 5 or more people. Sources: 2000 Census; Comprehensive Affordable Housing Strategy 2008-2018. ° Overpayment. 44 percent of the City's lower income households (households which earn less than 80 percent of the County median) are currently overpaying for housing (see Table HTM- 12). Overcrowding. Household overcrowding has increased over the past decade as individuals and families "double up" to save on housing costs. Over 18 percent of lower income households currently experience overcrowded conditions (see Table HTM-8). CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 31 20082009 Housing Growth Needs. For the 2006-2014 planning period, SLAG identifies a housing growth need of 2,381 dwelling units in Tustin. These units are allocated among the following income categories: 991 above -moderate income units; 468 moderate - income units; 410 low-income units; and 512 very -low income units (see Table H-10). ° Large Families. 15.2 percent of City's households contain 5 more persons in the households. The average household size in the City was 2.91 in 2007, up slightly from 2.82 in 2000, largely due to changes in the ethnic composition. This indicates a potential need for larger housing units to accommodate these families (see Table HTM-14). ° Extremely -Low Income households. 1,585 renter households and 525 owner households are at or below 30% of the Area Median Income (AMI) and considered "Extremely Low Income." While the extremely low income households are currently housed, they are in a precarious position, particularly those overpaying for housing in light of the current housing market, and could face the threat of homelessness. ° Affordability Gap. Based upon available information on rental rates in the City, it is difficult to find rental housing that is large enough and affordable for large, low-income families (see Table HTM-24 and Table HTM-25). • Elderly. As the City's population ages, the number of elderly persons will increase. This underscores an increasing need to address the special housing needs of the elderly (see Table HTM- 2). • Disabled. Disabled individuals have particular housing needs relating to access and adaptability. ° Female -Headed Parent Households. Female -headed households made up 18 percent of all families with children under 18 in Tustin in 2000. Many of these households have incomes below the poverty level and have special housing needs such as access to childcare services. Homeless. Growing numbers of homeless persons in Southern California have created particular housing and social service CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 32 20082009 needs. The redevelopment of MCAS Tustin for civilian uses provides an opportunity for additional housing supply in the City including accommodation of the needs of the homeless and the need for affordable housing (see Table HTM-15). In addition, a group housing arrangement (with less than six (6) residents) in a single family home is not subject to a Conditional Use Permit (consistent with State Law). A group housing arrangement of over six (6) residents is classified as a boarding house. The R-3 and R-4 zoning districts would allow for boarding houses with a Conditional Use Permit (CUP). ° First Time Homebuyers. High housing costs have put home ownership beyond the reach of many potential first-time homebuyers. ° Governmental Constraints. Governmental regulations, such as land use controls, fees, and processing procedures, can act as constraints to the maintenance and production of housing. Units at Risk of Conversion to Market Rate. By State law, the City must identify and develop programs and policies to address affordable housing units that are at risk of converting to market rate housing. During the 2006-2014 planning period, the City of Tustin faces the potential conversion of 100 low-income units (see Table HTM-27). ° Tenure. The City has a high proportion of renter -occupied housing as compared to other jurisdictions in Orange County. In 2000, 50.4 percent of the City's units were renter -occupied, compared to 38.6 percent renter occupied units countywide. Promotion of home ownership opportunities in the City may be necessary to maintain a balanced community (see Table HTM- 20). Housing Stock Condition. Over 64 percent of the City's housing stock is 30 years old or older - the age at which housing typically begins to require major repairs. In addition, the lack of adequately sized affordable housing can lead to overcrowding and in turn, deteriorated housing conditions. Maintenance and improvement of existing housing conditions over the long term will require ongoing maintenance of existing units, rehabilitation CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 33 20082009 or replacement of substandard housing and programs to maintain neighborhood quality (see Table HTM-21). ° Historic Resources. Older neighborhoods in Tustin contain several historic residences that should be preserved as part of the community's heritage. These historic homes were identified through an inventory of historic buildings in 1990. ° Target Neighborhoods. A large portion of the City's lower income housing is concentrated in the southwest neighborhoods. Targeted programs such as graffiti removal, proactive code - enforcement, loan and grant housing rehabilitation program, removal of abandoned vehicles, increased police presence, removal/ trimming overgrown trees in public right-of-way, various physical improvements for street widening, and street lighting and alley improvements have been implemented. Energy Conservation. Due to its climate, the City can take advantage of solar energy to reduce reliance on non-renewable energy supplies. HOUSING CONSTRAINTS Actual or potential constraints on the provision and cost of housing affect the development of new housing and the maintenance of existing units for all income levels. Market, governmental, infrastructure, and environmental constraints to housing development in Tustin are summarized below and discussed in greater detail in the Housing Element Technical Memorandum. Market Constraints The high cost of renting or buying adequate housing is a primary ongoing constraint. High construction costs, land costs and market financing constraints are contributing to increases in the cost of affordable housing. Construction Costs: The 2005-2010 Tustin Consolidated Plan reports that the single largest cost associated with building a new house is the cost of building materials, usually comprising between 30 to 50 percent of the sales price of a home. These costs are influenced by many factors such as the cost of labor, building materials, and site preparation. The Residential Cost Handbook, published by Marshall CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 34 20082009 & Swift estimates that the cost of residential two-story wood frame construction averages $87.85 per square foots. This estimate includes labor and materials, excluding the cost of land, off-site improvements, and indirect costs such as financing costs, escrow fees, property tax, etc. The costs attributed to construction alone for a typical 2,200 square foot, wood frame home would be at minimum $193,270. A reduction in amenities and quality of building materials (above a minimum acceptability for health, safety, and adequate performance) could result in lower sales prices. Additionally, pre -fabricated, factory built housing may provide for lower priced housing by reducing construction and labor costs. An additional factor related to construction costs is the number of units built at the same time. As the number of units developed increases, construction costs over the entire development are generally reduced, based on economies of scale. This reduction in costs is of particular benefit when density bonuses are utilized for the provision of affordable housing. Although it should be noted that the reduced costs are most attributed to a reduction in land costs; when that cost is spread on a per unit basis. Land: Although the Consolidated Plan 2005-10 reported that the single largest cost was related to construction costs, other factors such as the cost of land, depending upon the type of residential product and market condition is often a more significant cost than that of labor and materials. With the exception of the former MCAS Tustin site that is now referred to as Tustin Legacy, the City of Tustin is generally built out. This scarcity of land within the developed areas of the City and the price of land on the fringes are constraints adding to the cost of housing and pricing housing out of the reach of low- to moderate -income families. Financing: Interest rates can have an impact on housing costs. Some mortgage financing is variable rate, which offers an initial lower interest rate than fixed financing. The ability of lending institutions to raise rates to adjust for inflation will cause existing households to overextend themselves financially, and create situations where high financing costs constrain the housing market. An additional obstacle 5 Two-story wood frame average quality for Orange County area CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 35 28982009 for the first-time homebuyer is the minimum down -payment required by lending institutions. Even if Tustin homebuyers are able to provide a 3 percent down - payment and obtain a 6.00 percent 30 -year loan (loan rate for FHA or VA guaranteed loans for January 2008), monthly mortgage payments on median priced single-family detached homes in the City place such homes out of the reach of moderate and lower-income households in the City. At a 6.00 percent interest rate, monthly mortgage payments on median priced condominiums and townhouses can place such units out of reach of Tustin's low and very low income households (see Tables HTM-23 and HTM-25). The greatest impediment to homeownership, however, is credit worthiness. According to the Federal Housing Authority, lenders consider a persons debt -to -income ratio, cash available for downpayment, and credit history, when determining a maximum loan amount. Many financial institutions are willing to significantly decrease downpayment requirements and increase loan amounts to persons with good credit rating. Persons with poor credit ratings may be forced to accept a higher interest rate or a loan amount insufficient to purchase a house. Poor credit rating can be especially damaging to lower-income residents, who have fewer financial resources with which to qualify for a loan. The FHA is generally more flexible than conventional lenders in its qualifying guidelines and allows many residents to re-establish a good credit history. Under the Home Mortgage Disclosure Act (HMDA), lending institutions are required to report lending activity by census tract. Analysis of available HMDA reports does not indicate documented cases of underserved lower income census tracts in the City. Profit, Marketing and Overhead: Developer profits in the last several years in Orange County generally comprise 6 to 9 percent of the selling price of single-family homes and slightly higher for attached units. According to the recently completed Comprehensive Affordable Housing Strategy6, minimum developer profit is estimated at 12 percent of development costs, based on input from developers and the Building Industry Association. This level is considered a baseline profit or "hurdle rate," representing the minimum necessary for the deal to proceed. In the past, due to high 6 City of Tustin Comprehensive Affordable Housing Strategy, 2008 - 2018. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 36 20082009 market demand in the communities like Tustin, developers were able to command for higher prices and realized greater margins for profit. As demand increased and prices rose, this profit margin was impacted by the escalating costs of land resulting from a shrinking supply of land. Marketing and overhead costs also add to the price of homes. The Comprehensive Affordable Strategy 2008 - 2018 estimated developer overhead is at 4 percent of total development costs. Governmental Constraints Housing affordability is affected by factors in the private and public sectors. Actions by the City can have an impact on the price and availability of housing. Land use controls, site improvement requirements, building codes, fees and other local programs intended to improve the overall quality of housing may serve as a constraint to housing development. Land Use Controls: In efforts to protect the public's health, safety, and welfare, government agencies may place administrative constraints on growth through the adoption and implementation of land use plans and ordinances. The General Plan may restrict growth if only limited areas are set aside for residential land uses, and if higher residential densities are not accommodated. The zoning ordinance may impose further restrictions if development standards are too rigid, or if zoning designations do not conform to existing land uses. On the contrary, the zoning ordinance may also be utilized as a tool in encouraging and directing affordable housing, i.e. relaxed development standards, higher density, provision of incentives (waiver of fees, expedited review process, etc.) in exchange of the production of affordable housing, etc. Tustin's existing zoning ordinance allows for a range of residential densities from an effective density of 4.35 units per net acre in the E-4 Residential Estate District to 24.9 units per net acre in the R-3 Multiple Family Residential District. Tustin's General Plan allows a maximum of seven (7) units per acre with effective density of 5.61 dwelling units per acre within the Low Density Residential land use to a maximum of 25 units per acre with effective density of 21.53 dwelling units per acre within High Density Residential land use. A 10 units per net acre is also permitted in the MHP Mobilehome Park District (see Table HTM-32). The Planned Community District has authorized residential subdivisions with single-family lots of 3,500 - CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 37 20082009 5,000 net square feet, which significantly increases density potential. The Planned Community Development also provides incentives such as no height limits when certain criterion are met and for innovative designs that incorporate small lots, residential clustering, mixed density, and mixed income types which also provides flexibility in overall density. Within the Multi -Family Residential District (R-3), a 35 foot height limitation and 65 percent coverage precludes the development of housing projects with building height above the 35 foot limitation. In the interest of protecting adjoining single-family lot owners, multifamily structures above 20 feet in height require a conditional use permit when the structures are within 150 feet of single-family residentially zoned lots. There are approximately 20 properties u4th an R-3 zoning designation that abut Single Family Residential (R-1) zoning comprised of a variety of older apartment units and several parcels within Old Town Tustin that are adjacent to the First Street commercial zoning areas. While these height limits may place some restrictions on housing development, these limits are designed to maintain compatibility of land use intensity and to ensure proper and effective transportation within the community and are commonly used by local governments as a development tool to further this ideal. When designed properly with features such as limited windows and door openings along the walls facing single fancily zoned properties or using stepped building heights and design to minimize intrusion to the privacy of existing residents, Conditional Use Permits to allow such development projects have been granted. Although, it should be noted that this restriction would not impact areas where future residential development are targeted within this planning period, since the City's RHNA quantified objective identified preservation of existing units and new construction units at Tustin Legacy where the 20 foot limitation would not be applicable. Conversely, within Plafming AfeaNeighborhood D of the MCAS Tustin Specific Plan, a 150 foot height limitation up to 180 foot if approved by the Community Development Director would be allowed which provides for layering products (i.e. stacked flats, podium style, etc.) with mixed use developments, thereby providing opportunities for the development of higher density residential products. The Land Use Element indicates that residential development that supports commercial uses may also be permitted in the City's Old Town Commercial area. A market analysis of the Old Town area prepared in conjunction with comprehensive 1994 General Plan CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 38 20082009 Amendments, indicated that new multi -family residential development would be an important supporting use for the area's mixed -used commercial/ retail development. As a result, the General Plan was amended in 1997 to permit up to 291 additional residential units in the Old Town commercial area. To ensure compatibility of residential uses with the commercial area, the location, density, and building intensity standards for these residential units will be governed by planned community regulations or adoption of a specific plan. The East Tustin Specific Plan provides for single-family detached products to be developed at a variety of densities. The Low Density designation requires a minimum lot area of 5,000 net square feet while the Medium -Low designation requires a minimum lot area of 3,000 net square feet and densities not to exceed 5 and 10 units per net acre respectively. The WAS Tustin Specific Plan designation provides opportunities for development of a variety of residential products at varied density ranging up to 25 dwelling units per acre. Consistent with the City's policy to increase homeownership to maintain a balanced community, the majority of residential units authorized within the Specific Plan are ozuner- occupied units. However, in response to market demand, the City anticipates shortly processing an amendment to the WAS Tustin Specific Plan that zvould allozv for additional renter -occupied units, including affordable rental units. The Final Joint EIS/EIR for the Disposal and Reuse of the MCAS - Tustin (hereafter referred to as Program EIS/ EIR for MCAS -Tustin) for the reuse of the base identifies specific improvements needed to support residential development. The wild out of the WAS Tustin Specific Plan is expected to occur incrementally over a 20+ year timeframe. The actual level of development within any given phase will be tied to the availability of infrastructure necessary to support such development. Implementation triggers of specific infrastructure improvements are included in the EIS/EIR for the project. The anticipated timing of residential development of the MCAS - Tustin Specific Plan is as follows: CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 39 29982009 TABLE H-11 Anticipated Development at MCAS -Tustin Land Uses Acreage Through 2011-2015 (gross) 2010 Low Density (1-7 DU/acre) Planning Area 4 and 21 182.2 1,630 Medium Density (8-15 DU/acre) Planning Area 5 51.7 1,396 116 Medium to High Density (16-25 DU/acre) Planning Area 20 29.4 568 Community Core (16-25 DU/acre) Planing Area 8,13, and 14 111.7 891 Transitional/Emergency/Social Services' 9.1 332 Total 384.1 4,817 116 Rescue Mission 192 unit project, 50 unit transitional housing to be operated by various non -profits and 90 beds transitional housing to be operated by the County of Orange Social Services Agency. Notes: All figures are estimates as schedule will be impacted by market conditions. Figures in text are rounded for discussion purposes. Figures are based on estimated anticipated development indicated in the environmental document for MCAS Tustin Specific Plan. Actual construction figures may be different. Source: Final Joint EIS/EIR for the Disposal and Reuse of MCAS -Tustin, MCAS Tustin Specific Plan/ Reuse Plan and its Addendum (City of Tustin June 2007). Future market demand and the complexity and timing of environmental cleanup efforts are additional factors influencing the schedule of development. Other than the MCAS Tustin area, the Pacific Center East Specific Plan also provides another opportunity for residential development. Approximately 27 acres in size, the potential project site provides for the development of mixed uses including residential developments. The specific density for this project site has not been determined, hozvever, approximately 300 units could be accommodated within this project site. The remaining opportunity sites consist of a large proportion of the -small ainaunt of vacant and underutilized land that is located within Redevelopment Project areas within the City or Old Town residential areas where infrastructure is available and no major improvements would be anticipated. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 40 20082009 Limited residential uses are also permitted in areas designated Public/ Institutional provided the intended occupants are associated with the primary institutional uses. Additionally, homeless facilities are permitted by right in the WAS Tustin Specific Plan and are allowed throughout the remainder of the City either as an outright permitted or conditionally permitted use depending on the number of residents in the project. The City's Zoning Ordinance calculates parking requirements by unit type (See HTM-33 for summary of parking requirements). Parking requirements in Tustin are generally two spaces per unit, with an additional requirement of one guest space per every four units in multi -family development. Carports for multi family units are permitted which would reduce development costs in contrasts to the provision of garages. Furthermore, affordable and senior housing development meeting the State Density Bonus Law would be eligible to use the reduced parking standards under the State Law. In response to State mandated requirements and local needs, the City has adopted ordinances allowing for the development of accessory rental units and density bonuses. Beyond local requirements, state law created a sliding scale which allows developers to increase the density of a residential development by at least 20 percent up to 35 percent provided that certain numbers of units are allocated for lower and moderate -income housing. In addition, in response to state -mandated requirements and local needs, the City allows for second dwelling units. Second units serve to augment resources for senior housing and the needs of other segments of the population. Second dwelling units are outright permitted in residentially zoned properties that are at least 12,000 square feet in lot size. A two -car garage is required. The City's land use regulatory mechanisms accommodate the development of housing at a range of densities and products and do not constrain the potential for new construction at densities suitable to meet the needs of all income ranges, although assistance may be required for units offered at prices affordable to lower income households. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 41 20082009 Housing for Persons with Disabilities/Reasonable Accommodation The City of Tustin recognizes the importance of addressing the housing needs for persons with disabilities. The Cihy 's Zoning Code defines "family" as "an individual or two (2) or more persons living together as a single housekeeping unit in a dwelling unit." This definition accommodates unrelated persons living together in a dwelling unit, thus, the City's definition for a family would not constrain the development and rehabilitation for persons with disabilities. The City requires each development to comply with Title 24 of the California Code. All multifamily complexes are required to provide accessible parking spaces based upon the prescribed State code requirements. For development of special needs housing such as housing for the disabled, senior housing, etc., parking requirements would be determined based upon parking demand analysis which by nature would allow for lower parking ratio in comparison to those required for multiple family residential units. In addition, a recent off-street parking ordinance adopted by the City allows for the reduction in parking due to American with Disabilities Act (ADA) upgrade. The Community Development Director is authorized to allow the reduction in the number of required parking spaces when the site is brought up to ADA standards. This new provision provides incentives to property owners to provide reasonable accommodation to the disabled. The City also requires new multi family housing units and apartment conversions to condominiums to comply with State specifications pursuant to SB 520 for accommodation of the disabled. During the planning period, the City will conduct analysis, add procedures, and/or undertake appropriate amendments to existing standards in compliance with Chapter 11 of the California Building Code (requires portion of multi -unit dwellings to be accessible dwelling units) to ensure accommodation for the disabled. A Residential Care facility serving six (6) or fewer persons is a permitted use in all residential districts. The City's Zoning Ordinance does not contain maximum concentration requirements for residential care facilihj serving six (6) or fewer persons. The City recognizes the need of disabled persons to retrofit their residents to allow for mobility such as wheelchair ramps, widened doorways, grab bars, and access ramps. When these improvements meet development standards, only a building permit is required. However, any deviation from the development standards would require approval of either a Minor Adjustment or Variance. During the planning period, the City would CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 42 20082009 amend the Zoning Code to remove governmental constraints to reasonable accommodation for the disabled. The amendment would provide a Minor Adjustment process in which deviation from the development standards associated with physical improvements to accommodate the disabled would be accommodated with administrative approval and without the need of a public hearing. Homeless Accommodation Homelessness is a statewide concern that affects many cities and counties. Throughout the country, homelessness has become an increasing problem Factors contributing to the rise in homeless include the general lack of housing affordable to low and moderate income persons, increases in the number of persons whose incomes fall below the poverty level, reductions in public subsidy to the poor, and the deinstitutionalization of the mentally ill. The issue of homelessness is considered regional in nature. Nomadic tendencies of homeless persons make it difficult to assess the population accurately. Within the City of Tustin, Police reports and windshield surveys indicate a limited numbers of persons on the street and have shown that there are no established areas where homeless persons congregate in the City and that most persons migrate through Tustin to other areas within Orange County, rather than stay for extended periods of time. Information regarding the nature and extent of homelessness by racial and ethnic groups is not available at this time. The Orange County Partnership, a non-profit organization whose purpose is to strengthen public and private agencies serving the homeless and those at risk of homelessness, reported that in 2007 there were 34 homeless persons identified Tustin as the city of last known permanent address. The McKinney-Vento Homeless Education Assistance Act reported 55 homeless children and youth enrolled in the Tustin Unified School District during 2006-07. In addition to identifying homeless needs in Tustin pursuant to Senate Bill (SB) 2, statute of 2007, the City is required to engage in more detailed analysis of emergency shelters, transitional, and supportive housing (See Technical Memorandum for further details) by identifying the needs for homeless shelters in its Housing Element and designating adequate zoning districts to accommodate the needs. In those districts, emergency shelters must be allowed without a conditional use permit or other discretionary permit. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 43 29852009 With the closure of the Marine Corps Air Station (MCAS) Tustin, the City was provided with opportunihj to address homeless accommodation. As part of the conveyance process and under the Base Closure Community Redevelopment and Homeless Assistance Act of 1994 (The "Redevelopment Act"), the City of Tustin as, the Local Redevelopment Agency (LRA) was required to consider the interest of the homeless in buildings and property on the base in preparing the Reuse Plan (MCAS Tustin Specific Plan/Reuse Plan). In developing the Reuse Plan, one criteria the Secretary of Housing and Urban Development (HUD) utilized to determine the adequacy of the Reuse Plan was whether the Plan considered the size and nature of the homeless population in the communities, in the vicinity of the installation, and availability of existing services in such communities to meet the needs of the homeless in such communities. At the time of the preparation of the Reuse Plan, it was estimated that there was a total net homeless need of 411 persons in the City of Tustin and City of Irvine (A portion of the MCAS Tustin is located within the City of Irvine jurisdiction). A large portion of this homeless need was identified as necessary to support emergency transitional housing for youth and individuals. The local homeless need as described in both Tustin and Irvine's Consolidated Plans also indicated a gap in the continuum of care in the areas of vocational and job training/educational opportunities, some emergency and transitional housing units for individuals and families, support services, and affordable ownership units. Accordingly, the Homeless Assistance Plan for MCAS Tustin was adopted to addresses the problem of homelessness by utilizing the continuum of care model promulgated by HUD for accommodating the needs of the homeless in a manner which is consistent with the Consolidated Plans approved for the cities of Tustin and Irvine. The fundamental components of the continuum of care system implemented with the MCAS Tustin Reuse Plan: Provides emergency shelter beds, Offers transitional housing and services which enable homeless persons to progress to self-sufficiency, and • Provides opportunities for permanent affordable housing by the private sector. As a result, the adopted MCAS Tustin Specific Plan provided sites and designated land uses to accommodate the identified homeless needs. The following sites uYere set aside in implementing the homeless accommodation at Tustin Legacy (formerly MCAS Tustin): CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 44 20082009 An approximate five (5) acre transitional/emergence shelter site was set-aside for accommodation of the homeless at MCAS Tustin. The City acquired a site from the Department of Navy, initially ground leased the site, and ultimately conveyed the site to Rescue Mission at no cost and facilitated the construction of Village of Hope, a 192 unit transitional housing facility, without the need of a Conditional Use Permit. The project has been completed. • A four (4) acre site was recommended by the City of Tustin and deeded directly by the Department of Navy at no cost to the Orange County Social Services Agency for the development of an abused and neglected child and emancipated youth facility with 90 beds capacity. The project is under undergoing construction. A total of 50 transitional housing units were originally included in the Base Reuse Plan. Based on further negotiations with non-profit homeless providers, a total of 32 brand new transitional housing units have been constructed and conveyed at no cost to non-profit homeless providers at Tustin Legacy. These units are dispersed throughout the Tustin Legacy community to allow integration into the community. The sites are designated as residential sites and the units were constructed in conjunction with market rate units subject to only those restrictions that apply to other residential uses. The units are transparent since the units are developed identical to those of market rate units in terms of size, materials, locations, etc. No special or other entitlement applications were required for the creation of these units other than those typically required for development of residential units at Tustin Legacy. In addition to the homeless accommodation on-site at Tustin Legacy, the City also facilitated the purchase of a 16 unit transitional housing facility off- site for one of the homeless providers. The City subsidized the creation of these units through the use of housing set aside fiznds and Federal HUD Homeless Assistance funds. In addition to the homeless accommodation, the City also encourages support services to support the community of continuum of care model to end the cycle of homelessness and to provide participants with tools to once again become contributing members of the community as follows: • Private sector opportunities are provided to create a balanced mix of housing types on the base. Through inclusionary Zoning standards CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 45 28982009 in the WAS Tustin Specific Plan, a total of 8797 affordable units or 20.8 percent of total authorized units at Tustin Legacy are required to allow participants with opportunity to achieve self- sufficiency. Specific affordable housing requirements would be established at the time of development project approval to ensure conformity with the Housing Element of the City's General Plan and any provisions of California Community Redevelopment Law. The Navin will be transferring child care facility at the former WAS Tustin to the City of Tustin, which will provide opportunities for access for all to mainstream child care facilities, including early child care and education programs, Head Start, etc. • Adult education and training opportunities will be provided at the new site within the educational village proposed for conveyance to the South Orange County Community College District. Emergency Shelters, Transitional Housing and Supportive Housing SB 2 defines "Emergency Shelters" as housing for homeless Purposes intended for occupancy of less than six (6) months where no person is denied occupancy because of inability to Pay. In the Ciht of Tustin emergency shelters are designated as permitted uses within Planning Area 3 of the WAS Tustin Specific Plan. Planning area 3 is a five (5) acre site that had been a no cost conveyance to the Orange Counht Rescue Mission for the development of emergency/transitional shelter that is known as Village of Hope. The Ciht facilitated the development of the Orange County Rescue Mission Village of Hope and waived permits fees as this was a public/private partnership. The project consists of 192 units available ,fo emergency and transitional needs. As of May 26, 2009, the Orange Counht Rescue Mission Village o�ope is at 90% capaciht, with a total of 169 homeless individuals consisting of homeless single men, single women, single women with children single men with children, and two parent families. The largest homeless sub -population on the Village of Hope campus is single women with children The Orange County Rescue Mission Village of Hope priority is to serve Tustin homeless population prior to taking any other referrals from other cities or county. The Tustin Police Department actively refers individuals to the Village of Hope upon encounter. The Orange County Rescue Mission Village of Ho 7 Includes 32 transitional housing units set aside for non-profit homeless providers. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 46 29982009 also provides food service program of pproxirrtately 450 meals daily to Me Arty Based upon the available data obtainedfrottl the Orange Coyidy Partnership and McKinney Vettto Homeless Edt,tcatron Assistance Act al)�roxinvdely 34-55 irulividuals reported eitlt<:r Tustin as their last knoziJn 17erntaitent address or enrolled within the Tustin Urged School District, Ibis means tlutt the Citt1 of Tustin is accomrrtodatitug 137-158 homeless persons beyond its jurisdictional boundaries t1terebii accotyijiodatitig a regional meed. The City interoiewed the Grange County Rescue /Mission Village of Hope representative and the City zt,as told tlurt currentht there are 20 vacant units and a minimttrn of five (5) percent vacancy is available at (in n/ given time. The Orange County Rescue Mission Villas e of Hope also indicated that the shelter has met above arid beyond the Cityl's conseivative estimate of 55 homeless persons and tlurt tla., slulter could accommodate the hear -round needs and seasonal fluctuation in the amount of available beds. Transitional housing is ileftned as rental Itottsing for stays of at least six (6) ntoutlts zoltere the: rtttits are re -circulated to anotlier arson after it set period. 11iis hortsing cart take several forttts including group housing or multi- amity ltnits, and often inchtdes supportive services component to alloy, individuals to gain necessary/ life skills in support of irtdepeudent lining. The Tustin's zoning code accommodates transitional hottsitt�� g4tltirr several zoning districts depending on the project's p)tysical structure: 1) traiisihonal limsbig operated as a residential care facility is permitted/conditionally permitted depending ott the number of occlrpants in residential districts; and 2) transitional housing. operated as rental apartments it is permitted by right its it to ilti-tarnilyt residential uses ztiltere tuylti(aniffil housing is permitted. Supportive housing is defined as permanent (no limit on the length of staff provides supportive sei-dices and is occt.tpied by lout) -income persons -(Nth disabilities attd certain other disabled persons. Services ntayt include assistance designed to meet the tuceds of the target population in� retainim, housing, career counseling, tuental health treatment, and life skills. Tile Tustin's zoning code permits supportive hottsin r as a residential use, provided supportive services are ancillary to flue primary use. ?With i� the �, ��,+r ^Emergency shelters are pertruitted zt�itltin Planning Area 1 of the WAS Tustin Specific Platt. Ttransitional homes, and supportive housing are also designated as permitted uses within Planning Areas 1 and 3 of the WAS Tustin Specific Plan. a444ion—,-c-Community care facilities such as group homes, foster CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 47 20082009 homes, elderly care facilities, etc. with six (6) or fewer people are outright permitted within any residentially zoned properties. Table HTM 11-A summarizes zoning regulations for homeless accommodation. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 48 20882009 TABLE H -11A SUMMARY OF HOMELESS ACCOMMODATION ZONING REGULATIONS Permitted/ Housing Type Conditionally Zoning Permitted Emergency Shelters Permitted Planning Area 3 of WAS Tustin Specific Plan Transitional Home Permitted Planning Area 3 of MCAS Tustin Specific Plan Supportive housing Peed Planning Areas 1 and 3 of MCAS Tustin Specific Plan Community Care Facility for six (6) or Permitted `ll residentially zoned fewer properties Family care home, foster home, or Permitted All residentially zoned group home for six (6) or fewer] vroverties 1 Includes congregate care facility, single room occupancy hotel, and children's intermediate care shelter Source: City of Tustin The following are transitional homes that have been provided at Tustin Legacy. • A 1924)ed—ynit8 emergenclt/transitional home at the Village of Hope to be operated by the Orange County Rescue Mission. • A 90 -bed intermediate care shelter for abused children and their parents to be operated by the Orange County Social Services Agency. • Six (6) new units at Tustin Field I operated by Salvation Army. • Acquisition of 16 units in Buena Park operated by the Salvation Army. The City assisted in acquisition and contributed grant funds to acquire the units. • Fourteen (14) new units at Columbus Grove operated by Families Forward, formerly Irvine Temporary Housing.9 • Six (6) new units at Columbus Grove operated by Human Options. 8 As defined pursuant to the U.S. Census Bureau definition 9 Although these units are located in the City of Irvine, these units were negotiated as part of the base realignment/ conveyance process with Tustin as the Local Redevelopment Agency CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 49 29952009 Six (6) new units at Columbus Grove operated by Orange Coast Interfaith Shelter. With the exception of the emergence sheltertransitienal homes, these units are transparent and dispersed ugh- etrtthroughout the community consistent with the City's goals and policies to provide adequate supply of housing to meet the need for a variety of housing types and the diverse socio-economic and to promote the dispersion and integration of housing for all socio-economic tkretthroughout the community. The City's policies for homeless accommodation do not create constraints in the location of adequate emergency shelters, transitional homes, shelters, and supportive housing. In addition, current provision of homeless accommodation supports not only the need of the city but the county as well. Fees and Improvements: Various fees and assessments are charged by the City and other outside agencies (e.g., school districts) to cover costs of processing permits and providing services and facilities, such as utilities, schools and infrastructure. These fees are assessed based on the concept of cost recovery for services provided. Tustin is urbanized with most of the necessary infrastructure, such as streets, sewer and water facilities in place. Nonetheless, site improvements can significantly add to the cost of producing housing. Cost-effective site planning or use of housing set-aside funds for those projects within redevelopment project areas can minimize site improvement costs. The Housing Element Technical Memorandum describes in detail required site improvements and provides a list of fees associated with development (Table HTM-34) Development fees are not considered a constraint to housing. However, fees do contribute to the total cost of development and impact the final purchase or rental price. The City, in conjunction with the preparation of the Housing Element also prepared the Affordable Gap and Leveraged Financing Analysis (Appendix A of the Housing Element Technical Memorandum). The analysis evaluated development costs to arrive to per unit affordability gap in producing affordable units. Table 12 and Table 13 of the analysis summarize average per unit development processing and impact fee of $29,277 to $37,530 per unit for owner housing prototype and $25,586 per unit for rental housing prototype (See Appendix A for specific development processing fees and analysis). CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 50 29882009 In response to recent economic downturn, the City Council also adopted an economic stimulus program which allows the payment of specific development fees for construction of new residential units be deferred until either prior to final inspection or issuance of certificate of occupancy. This program would provide direct and indirect assistance to developer of residential units in that reduced on -hand cash flow were required at time of permit issuance. Building Codes and Enforcement: The City of Tustin adopts the Uniform Construction Codes, as required by State law, which establish minimum construction standards as applied to residential buildings. The City's building codes are the minimum standards necessary to protect the public health, safety and welfare and ensure safe housing. Only local modifications to the codes are made which respond to local climatic or geographic conditions and clarify administrative procedures. Although not mandated to do so, the City has adopted the State Historical Code that relaxes building code requirements citywide for historic structures/ buildings. Adoption of codes reduces rehabilitation costs. Local Processing and Permit Procedures: The evaluation and review process required by City procedures contributes to the cost of housing. State law establishes maximum time limits for project approvals and City policies provide for the minimum processing time necessary to comply with legal requirements and review procedures. The Community Development Department serves as the coordinating agency to process development applications for the approval of other in-house departments such as Redevelopment Agency, Police, Public Works/ Engineering, and Parks and Recreation. All projects are processed through plan review in the order of submission. The City has eliminated the potential increase in financing costs caused by a delay in permit processing by assigning priority to the plan review and permit issuance for low- income housing projects. If a complete application is submitted, all Design Review Committee members and plan checking departments simultaneously review the plans. The Design Review application does not require a public hearing or Planning Commission approval. The Tustin Cihj Code authorizes the Community Development Director to approve development plans when findings can be made that the location, size, CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 51 28982009 architectural features and general appearance of the proposed development will not impair the orderly and harmonious development of the area. In making such findings, the Zoning Code provides items to be considered such as height, bulk, setbacks, site planning, exterior materials and colors, relationship of the proposed structures with existing structures in the neighborhood, etc. This code provision affords the developers with tools to design their projects and thus increase certainhj of project's design review and approval. Project application which complies with all the development standards prescribed by the district in which the project is located would not be required to go through any other discretionary approval. For Tustin Legacy, developments under the Muster Developer footprint (approximately 800 acres) would be subject to the Legacy Park Design Guidelines to ensure compatibility of products proposed by vertical builders. The design guidelines present minimum design criteria for the achievement of functional, quality, and attractive development expected at the Tustin Legacy. The guidelines are intended to complement the MCAS Tustin Specific Plan district regulations and to provide staff, builders, design professionals, and other users with a concise document when dealing with Design Review process to avoid ambiguity. Together the zoning code, Design Review provision, the Legacy Park Design Guidelines, and the "one-stop" processing system provide certainly/ to developer seeking approval for the development of residential project. For projects of significant benefit to the low-income community, costs can be waived by the City Council or the use of redevelopment set- aside funds can reduce or eliminate these costs to the developer. Workload: Another governmental constraint is the number of staff and amount of staff time available for processing development projects. Since the workload is determined by outside and uncontrolled forces (economy and market for housing and availability of general fund revenue), a shortage of staff time may occur which could lead to increased processing time for development projects. HOUSING OPPORTUNITIES Table H-12 shows the existing and potential dwelling units permitted under each General Plan land use category, as well as the potential net increase within each category. Based on the City's Land Use Plan, Tustin has a residential holding capacity of approximately 29,793 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 52 20082009 dwelling units. The Land Use Plan provides for a mix of unit types and densities, including low-density single-family homes, medium density homes, higher density homes, and mixed-use projects that allow for a combination of commercial and residential uses. A large portion of future residential development in the City of Tustin will take place in the MCAS Tustin Reuse Specific Plan area. The other large Specific Plan community in Tustin, Tustin Ranch (the East Tustin Specific Plan) has been built out. Between 2006 and 2008, 1,076 units were constructed in the City of Tustin. A total of 322 Very Low Income, 48 Low Income, 57 Moderate Income, and 649 Above Moderate Income were built mostly at Tustin Legacy. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 53 20092009 F. 01 N O N O d' O A 10 'CR v � X � � 0 N 000 �o cn 'G v H � G �! tv � (31 w o LO C � 11' v :7 y o � � U II cA �� �Q N b av o o 7� o u H cn �U� H a w� ow �z U C7 o ^ o 0 0 0 0 0 m m N 00 r 00 m o 00 oo � 10 C�d> C! m ID b oho _ cc c 93 ° v v ami U Q Q� :13 �u-, cu ! o F. 01 CA a � Q � X � � 0 v � M b v H � G �! tv � w o LO v � 11' v :7 y o � � U II � V � �Q N b av o o 7� o u H cn �U� H a w� ow �z U C7 Table H-13 illustrates Tustin's progress in achieving RHNA construction needs since January 1, 2006 that can be credited toward fef the 2006-2014 planning period. As of 2008, the City has satisfied approximately 71 percent of its Venj Low-income, 32 percent of Low- income, 47 percent of Moderate -income and 147 percent of Above Moderate - income 45 r er-eent of its total RHNA Construction Needs. TABLE H-13 PROGRESS TOWARD RHNA CONSTRUCTION NEEDS 2006-2014 CITY OF TUSTIN village or hope 2 Orange Counhj Social Semices Agency - Tustin Family Campus Source: 2007 RHNA; City of Tustin, Redevelopment AQencv and Communitv Development DPnartmPnt_ Housing Units Constructed Since January 1, 2006, a total of 1,176 units have been constructed. Among the units constructed, 235 units were for Vern -low income, 57 units were for Low-income and 60 units were for Moderate -income households. Almost all units except Arbor Walk development were constructed at the Tustin Legacy as follows: Arbor Walk (14552 Newport Avenue) Arbor Walk project is a 63 unit attached townhome project of which ten (10) units were set aside as affordable units (4 unit for Venj Low-income households and 6 units for Moderate -income households). Redevelopment Agency issued loans totaling $2,119,960 to assist in creation of these affordable units. The majority of the units were completed in 2005; however, three (3) of the affordable units were completed in early 2006 and is included as part of the current RHNA planning period. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 55 20082009 RHNA knits Net RHNA Construction Units Added Approved/Entitled Construction Need Constructed 2006- /Under Need Income Category 2006-2014 20072008 Construction 2008-2014 Very -Low 287 32243 (6371%) 37 490150 Extremely Lou? 225 1921 902 Low 410 4857 4232% 74 362279 Moderate 468 5760 4270% 161 4.14247 Above Moderate 991 649824 (65136% 628 342-461 Total 2,381 X876 (4591%) 990 4;305215 1,176 village or hope 2 Orange Counhj Social Semices Agency - Tustin Family Campus Source: 2007 RHNA; City of Tustin, Redevelopment AQencv and Communitv Development DPnartmPnt_ Housing Units Constructed Since January 1, 2006, a total of 1,176 units have been constructed. Among the units constructed, 235 units were for Vern -low income, 57 units were for Low-income and 60 units were for Moderate -income households. Almost all units except Arbor Walk development were constructed at the Tustin Legacy as follows: Arbor Walk (14552 Newport Avenue) Arbor Walk project is a 63 unit attached townhome project of which ten (10) units were set aside as affordable units (4 unit for Venj Low-income households and 6 units for Moderate -income households). Redevelopment Agency issued loans totaling $2,119,960 to assist in creation of these affordable units. The majority of the units were completed in 2005; however, three (3) of the affordable units were completed in early 2006 and is included as part of the current RHNA planning period. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 55 20082009 Tustin Field I and II Tustin Field I is a residential development located at Tustin Legacy. The project consisted of 376 residential units of which 198 were developed as multiple family units and 178 as patio homes. The project was approved with the provision that a total of 78 affordable units including 22 very low income units, 12 low income units, and 44 moderate income units be provided and dispersed within the project site and that an Affordable Housing Covenant be recorded to ensure the units remains affordable for a period of 45 years. During the current RHNA planning period, 18 affordable units were completed and designated as follows: four (4) units for Very Low-income, six (6) units for Low-income, and eight (8) units for Moderate -income households. The balance of the required affordable units was completed during the previous RHNA planning period. Tustin Field II is also located at Tustin Legacy and the project was approved for 138 single-family detached units and 51 patio homes. A total of 40 affordable units, including 11 very low income units, 10 low income units, and 19 moderate income units were approved and provided within the patio home product. These units were created as part of the inclusionary requirements for the development of Tustin Legacy Specific Plan. Each of the affordable unit was required to record an Affordable Housing Covenant to ensure the unit remains affordable for a period of 45 years. During the current RHNA planning period, a total of nine (9) affordable units were created. Of these, 2 units were designated for Very Low -Income, 2 units for Low-income, and 5 units for Moderate -income households. The balance of the required affordable units was constructed during the previous planning period. Villages of Columbus (Columbus Square and Columbus Grove) A total of 983 units were completed and occupied within the Villages of Columbus at Tustin Legacy. Of the 983 units, 130 units were designated as affordable units comprised of 36 Venj Low Income units, 49 Low Income units, and 45 Moderate Income units. These units were created as part of the inclusionary requirements for the development of Tustin Legacy Specific Plan. Twenty four (24) of the completed units are located within the Coventry Court development (see further discussion for Coventry Court development under Housing Units Approved,/Under Construction section). CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 56 20082009 Lennar and Lyon affordable units were created as a result of density bonus concessions granted by the City. The following tables demonstrates the average affordable purchase price, average down payment, and average promissory note for affordable units purchased in 2007 and 2008. All units have terms of affordabilihj not to exceed 45 years. 2007-2008 2007-2008 2007-2008 Income Average Fair Average Average Level Market Price Affordable Promissory Purchase Price Note* Very Low $482,792 $69,689 $413,103 Low $488,157 $126,375 $361,783 Moderate $539,602 $276,317 $263,285 * The Average Promissory Note is the City's subsidy toward affordability. The City has subsidized the affordability gap through the use of land write downs, density bonuses, and Agency Notes. Income 2007-2008 2007-2008 Average 2007-2008 Average Level Project Average Fair Affordable Purchase Promissory Note Market Price Price Very Law Cambridge* $463,929 $66,921 $397,007 Tustin Field I $440,000 $89,442 $350,558 Cambridge* $456,333 $117,316 $339,017 Tustin Field I $515,000 $131,700 $383,300 Moderate Arbor Walk $505,000 $363,920 $141,080 Clarendon* $553,333 $274,713 $278,620 Village of Hope CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 57 20082009 A total of 192 unit transitional housing facility recently has been completed at Tustin Legacy and is currently in operation by the Orange County Rescue Mission. Although the facility is developed and functioned as a full- service transitional housing facility which provides educational child care health care, etc., the units function independently meeting the Census Bureau definition of a "housing unite." The facility includes supportive services for the homeless including on-site health and dental clinics. The project site was part of the base closure realignment process. The Federal government provided the land to the City at no cost. The City subsequently conveyed the land to the Orange County Rescue Mission at no cost to accommodate a transitional home facility. Housing Units Approve&Tntitled and Under Construction A total of 127 Very Low Income units, 74 Low Income units, 269 Moderate Income units, and 520 Above Moderate Income units were approved/entitled at the time of the preparation of this housing element as follows: Orange County Social Services Agency - Tustin Family Campus The Tustin Family Campus project was approved for a 90 Very Low Income units intermediate care shelter for abused children and their parents' facilihj to be operated by the Orange County Social Services Agency at 15405 Lansdowne Road. The project includes five programs identified to be provided at the facility as follows: • Sibling Residential Homes • Specialized Residential Youth Homes • Transitional Homes • Mother -Child Homes • Campus Service Center including Parent Child Interaction Therapy (PCIT), Early Childhood Development Center/Child Care, and Medical Care r° Census Bureau definition: "housing unit: A single-family house townhouse mobile home or trailer, apartment group of rooms or single room that is occupied as a separate living quarters or, if vacant, is intended for occupancy a/ s a separate living quarters." "Separate living quarters Living quarters in which one or more occupants live separately from any other individual(s) in the building and have direct access to the living quarters without going through a common hall For vacant units the criteria of separateness and direct access are applied to the intended occupants " CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 58 28082009 Villages of Columbus (Columbus Square and Columbus Grove) The project's remaining units are currently under construction. A total of 37 Vend Low Income units, 74 Low Income units, 176 Moderate Income Units, and 613 Above Moderate Income units are under construction. Similar to the constructed units, the remaining units were created as part of the inclusionary requirements for the development of Tustin Legacy Specific Plan. Affordable units were created through the use of City Council - approved density bonuses. All units have terms of affordability not to exceed 45 years. Coventry Court A total of 240 unit senior housing development for persons of 55 years or older was approved within the Columbus Square project. 24 of the units have been completed and the remaining 216 units are to be constructed. Of the 240 units 153 units are set aside as affordable units comprised of 36 units for Very Low Income, 61 units for Low Income, 56 units for Moderate Income households. The Cottages (Nevis Homes) -1361 El Camino Real The project consists of 93 attached tozunhomes which are currently under construction. The project was approved as a condominium project, however, with the housing market downturn, the developer has marketed the units as rental units with rental rates affordable to Moderate Income households. Monarch Village (American Senior Living) -13841 Redhill Avenue A 201 unit senior assisted living/congregate care facility has been granted -entitlements and the project is currently in plan check. The City supported this project by amending its zoning map to permit the project. The project will be limited to persons that are 62 years or older and will provide a combination of housing, personalized supportive services, and health care designed to meet the needs of those who need help with daily living. The developer indicated that they are in the process of applying for Section 232 FHA Insured loan to assist in the development of this project. Section 232 is an FHA - Insured loan that covers housing for the frail elderly — those in need of supportive services. Nursing homes, assisted living facilities, and board and care are all examples of this type of housing (a project may include more than one type). Although no restricted units were CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 59 20052009 required, based upon the discussion with the developer, the units are designed and will be marketed competitively to allow for moderate income households to be able to rent the units. However, for RHNA purposes, only 4 of the 201 units are included as Moderate Income units. Table H-14 illustrates the residential development potential of the vacant and underutilized land inventory in the City of Tustin. The Tustin Legacy site (formerly MCAS Tustin) presents the City with 389.2 acres suited for residential development that could accommodate an additional 4,049 units. During the planning period, the majority of the anticipated units will be accommodated at Tustin Legacy and is being implemented through both the adoption of a Specific Plan by the City and the adoption of a Redevelopment Project Area. Based on State Redevelopment Law and the proposed Specific Plan requirements, at least 15 percent of the units (607 units) constructed at the MCAS Tustin site will be affordable to Very -Low, Low, and Moderate -income households, of which at least 6 percent or 243 units must be affordable to Very Low-income households. The remaining 364 units would be distributed among the Low and Moderate income households by utilizing RHNA Low and Moderate income percentages. In addition to these inclusionary obligations, the acreage and densities permitted by the MCAS -Tustin Reuse Plan would create 282 additional for Very Low-income households (192 transitional housing units and 90 social services housing units). Aside from MCAS Tustin, additional sites are located either within existing Redevelopment project areas or in Old Town Tustin area. Sites that are located within the Redevelopment Project area subject to Redevelopment Law as well. As a means to ensure affordability and the use of housing set-aside funds, the City and its Redevelopment Agency will require developers to provide at least 15 percent of all units constructed or rehabilitated at prices affordable to Very Low, Low, and Moderate Income households consistent with State Redevelopment Law affordable housing requirements. The City's Redevelopment Agency aggressively negotiates affordable housing units with individual potential project. An example of approved infill site is the development of a fifty-four (54) unit affordable senior housing project on a 1.76 acre site. The project was granted a twenty-five (25) percent density bonus above the City's maximum allowable density. In addition, the City entered into a CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 60 20082009 Disposition and Developer Agreement with the developer to issue loans not to exceed $600,000. The loans are secured by loan agreements, promissory notes and deeds of trust, along with Regulatory Agreement and Declaration of Restrictive Covenants to be recorded against the property for a period of not less than 55 years. The project is 100 percent affordable to very low and low income seniors. The remaining capacity in Old Town Tustin will be achieved through recycling of underutilized and vacant infill sites (see Figure 1). According to the City's Land Use Element, the sites in Old Town Tustin area are able to accommodate an overall population range for residential use of 2-54 persons per acre". The Land Use Element further identifies the potential development of dwelling units in the Old Town Commercial area, which will be facilitated by the proposed adoption of zoning regulations and development standards which will allow mixed-use development (see Program 1.21 of Table H-22 Housing Element Programs). This development potential is supported by the market analysis of the Old Town area. To further create housing opportunities, the City provides the issuance of tax-exempt bonds for the development of affordable housing through a Joint Powers Authority with the California Statewide Communities Development Authority. Other means would include the City's participation in the State and Federal programs such as the Low- Income Housing Revenue Bond Financing program, Low Income Tax Credits, CHFA financing programs, and others. Additionally, a Density Bonus Ordinance is available and can be applied to infill sites to increase allowable density and the Tustin City Code also provides for a Planned Community District which allows flexibility in site development standards such as the creation of smaller lots to allow for higher density. As demonstrates in Table H-14, there are a total of ,°215.59 acres of land (74 9180.67 acres from MCAS Tustin, 7-.277.80 acres vacant land, and 704227.12 acres underutilized land) with residential development potential. These sites could potential be 11 See Table LU -3 - "Future Land Use Density/ Intensity and Population Capacity of the Land Use Plan" in the City of Tustin General Plan Land Use Element, January 16, 2001. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 61 20052009 developed with approximately 3-4262,915 units. This demonstrates that the City has sufficient amount of land available to accommodate the residential developments to meet the remaining RHNA construction needs through the 2014 period. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 62 20082009 40, a I Figure 1 and Table H-15 detail the zoning designations of vacant and underutilized land in Tustin. The vacant and underutilized land inventory includes land that is currently zoned medium- and high- density residential and land that could potentially be designated as high-density residential. Realistic capacity of sites that are identified in Table H-15 are derived from past development proposals historical character of the area, inquiries received bU the Community D� evelopment Department and Redevelopment Agency Disposition and Development Agreements between the City and developers exclusive negotiations with potential developer(s) authorized by the QW Council maximum zoning and general plan densities, and eligible incentives to developers for provisions affordable housing. Realistic capacity -for sites identified to meet the City's share of regional housing needs either are determined based upon current zoning and general plan, executed Disposition and Development Agreement, and the Citta Council authorized exclusive negotiation with potential developer. The closure of WAS Tustin provides the City with opportuniW sites to meet the Ciys share of regional housing needs. The maiority o the City's share of housing needs will be provided at the former MCAS Tustin (Tustin Legactj) proiect site which was part of the base closure realignment process The Federal government provided the land to the City at no cost The Citi subsequently will conveU the land to developers for the development of the Tustin Legacyt. Although no speci tc parcel numbers are available at the time of the preparation of this Housing Element a Disposition and Development Agreement (DDA) has been executed with Master Developer identifying land use capacity -for each of the neighborhood. Furthermore in the planning the implementation of the DDA the developer has submitted Concept Plans and Tentative Tract Maps to the City if denti&ing proposed lots, gross acreage and number of units as follozVs: CITY OF TUSHN HOUSING ELEMENT GENERAL PLAN 2009 65 NNr •���•°R . t •, i�r � � Marugrnt[ i A l • ��`�'"�,� '�� �rr � � � � �� ;�� r�nalrxKrawouw Ll_ d 1 �=�— _.- — Otu�J �rY u•4 ���rw..wwiwyday °wear _ Ymmw�w Oww. NEIGHBORHOOD D LARD USE CONCEPT PLAN CITY OF TUSTIN GENERAL PLAN .. HOUSING ELEMENT 2009 EzhWA 1 • �` • NEIGHBORHOOD G LAND USE CONCEPT PLAN CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 2009 67 IL � � i I A I LVit zu M0A N'ARmPR AYF_ _ - IOW GCM M QMDMAL - SfMGI► CAFE #tow om" AY5i0U * COWAN"" AMM. fm MED" hm orr worm ANVOMOM ftw ••• 17N !7754 W6t, 0PY _ AWAMW LOCA AIV1A1 ..a aXrMQ WrAR FARC• • WCAt COW�CCw AM •••E.. I'MSAWi eVU14Y ;. JANDSCAK SFIANX EDC[ 0.-N SFALY "A;REACE TM:EW M NAB >_ "hos .A r c0! d.s ArMAMN' PREPARED BY: �• Sri" �. cMlaoc •� �waD fowcDNraor. ArsEx� HUNSAKER & ASSOCIATES k v I n t 1 N C n..w�: w.cr�ctnNc, rv..'a�1.. ••.v.M. WM'A�YR 1��MW x.tq�ra: n/ EzhWA 1 • �` • NEIGHBORHOOD G LAND USE CONCEPT PLAN CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 2009 67 Neighborhood Planning Concept Land Use Gross Dwelling Densi AreaPA Plan Lot LDR Acreaee12 Units du/ac D 13 5 Residential 1.44 29 20 6 Residential 1.55 30 19 7 Residential 3.99 78 20 8 Mixed Use 3.28 180 55 9 Mixed Use 3.32 180 54 10 Mixed Use 3.09 157 51 11 Residential 6.32 120 19 20 Residential 3.94 87 22 21 Residential 2.53 30 12 Total PA 13 891 G 15 2 LDR 8_5 66 8 3 LDR 4_9 35 7 4 LDR 4_9 33 7 5 LDR 7_5 38 5 6 LDR 2_2 11 5 7 LDR 3_2 21 7 8 LDR 6_8 28 4 9 LDR 5_0 22 4 11 LDR 7_9 44 6 12 MDR 5_2 69 13 13 MDR 5_0 75 15 14 MDHR 5_9 144 24 15 MDHR 1_8 48 27 16 LDR 6_1 38 6 17 LDR 6_9 46 7 18 MDR 2_3 26 11 19 MDR 3_9 50 13 26 MDR 5_1 54 11 27 LDR 4_0 19 5 28 LDR 5_4 30 6 29 LDR 5_0 33 7 30 LDR 7_8 55 7 31 LDR 7_6 45 6 32 LDR 3_1 20 6 33 LDR 2_3 13 6 35 LDR 9_8 43 4 36 MDR 9_1 108 12 Total PA 15 1,214 LDR: Low Density Residential MDR: Medium Density Residential MDHR: Medium -High Density Residential 12 Gross acreage includes local streets. CITY OF TUSTIN GENERAL PLAN C HOUSING ELEMENT 2009 Although the availability of vacant and underutilized land for the provision of housing is not considered a constraint for the 2006-2014 planning period, future planning periods may be marked by a lack of available land. While the City's Land Use Plan provides an adequate land capacity to fulfill housing needs, current development costs in Tustin may preclude the private housing market from providing affordability for low and very low-income households without subsidies. Necessary infrastructure improvements and litigation constraints may cause some delays in the build -out development of the MCAS Tustin project. Satisfaction of the City's quantified objectives through new construction will be heavily dependent upon real estate market trends, cooperation of private funding sources, and available funding and programs at the local, county, state and federal levels. CITY OF TUSHN HOUSING ELEMENT GENERAL PLAN 2009 69 Figure 1 - Conventionally Zoned Vacant & LlnderutiliZed Land in t1w City of T istin * Underutilized LwW 'Refer to table H-15 for site information M vacant Land CITY OF TUSTIN GENERAL PLAN 70 HOUSING ELEMENT 2009 8 'd G ¢p, �b d O, �I 10 N z z� Wo y � N �v x R a � x x � c � c r S N W c! N i a a y Ln U U c U U u F w w Q Q ti O ' N Q c� S e to Z E3 z o w O U C7 lKOW 1r ', 1 N z W a O W W Q a Y..I zW O u O w W 7 B EZ Q rt R �� Rl C!1 U) b . U i o b z � o b d a a c C Q kj t3 0 0 0 0 v ti y �y+ V V V V V V o V .d o V w C a c a 9 Q ��fic be� a� Q> G C � � a e S eq .�a�wrA�nZ lKOW 1r ', 1 N � 7 B EZ Q rt R �� Rl , MA U) b . U i b b b b byp W b t3 0 0 0 0 v ti y �y+ V V V V V V o V .d o V G G C Q it 4 � u cq C A a N O eN O O O O O N O O O Q a Y' o 0 o E 0o V V V V V V U U :i � j eo E•� E-� H E-� E-� A H F� H o v O o b b v O O O O O O O d o a o a a o. a a N aQ V V v v up d G a -,a a M w V u� cC 40 w b Cl) pp No 8 pM O n N '+ N M a} of ap lKOW 1r ', 1 N ii a�3'aY 3 eae��. . . . . . ..... .... t c M' 4 z� 19-1 I� t B d- HOUSING ELEMENT GOALS AND POLICIES This section of the Housing Element contains the goals and policies the City intends to implement to address a number of housing -related issues. To implement the Housing Element, the following six €ive major issue areas are identified with related goals and policies: 1) ensure that a broad range of housing types are provided to meet the needs of existing and future residents; 2) provide equal housing opportunities for all City residents; 3) ensure a reasonable balance between rental and owner occupied housing; 4) preserve existing affordable housing; 5) promote conservation and rehabilitation of housing and neighborhood identity; and 6) ensure housing is sensitive to the existing natural and built environment. HOUSING SUPPLY/HOUSING OPPORTUNITIES Tustin is home to persons requiring a variety of housing options. At different stages in their lives, people require different housing arrangements. Additionally, the City must respond to the housing needs of all economic segments of the community and ensure that housing discrimination does not serve as a barrier. It is also important that the City maintain a balance of housing types and that the City's housing stock is not overly skewed towards the provision of one type of housing. Finally, the continuing need for affordable housing in the region requires the City to attempt to preserve Low- income housing units that are at risk of converting to other uses. The City used the following goals and policies to achieve the above objectives. GOAL 1: Provide an adequate supply of housing to meet the need for a variety of housing types and the diverse socio-economic needs of all community residents. Policy 1.1: Promote the construction of additional dwelling units to accommodate Tustin's share of regional housing needs identified by the Southern California Association of Governments (SCAG), in accordance with adopted land use policies. Policy 1.2: Apply available Tustin Community Redevelopment Agency financial resources to meet the requirements of any identified "Opportunity Sites" as part of the Tustin "Town Center- A CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 75 29982009 New Beginning" comprehensive implementation study to respond to RHNA requirements. Policy 1.3: Examine potential increases in residential density as part of the "Town Center -A new Beginning" implementation study as it specifically impacts the Center City Study Area (a portion of which is within the Town Center and South Central Redevelopment Project Areas), the Southern Gateway Study Area (a large portion of which is within the South Central Project Area), and the West Village Area generally located west of the SR -55 Freeway between McFadden Avenue and Main Street to assist the City in accommodating its housing needs. Policy 1.4: Pursue smart growth principles by supporting the construction of higher density housing, affordable housing, and mixed use development (the vertical and horizontal integration of commercial and residential uses) in proximity to transit, services, shopping, schools, senior centers and recreational facilities, where possible. Policy 1.5: Consider site scoring, income targeting, and other selection criteria for competitive funding sources for affordable housing, such as Low Income Housing Tax Credits, when allocating Agency resources for affordable housing to maximize leverage of local funds. Policy 1.6: Continue to implement best practices for developer selection, project underwriting and due diligence for affordable housing developments that receive financial and other assistance to ensure long-term viability of affordable housing and to ensure the maximized leverage of local resources. Policy 1.7: Preserve affordable housing units, where possible, through actions such as the maintenance of a mobile home park zone, restrictions on R-3 zone uses to preserve the multiple family residential characters, facilitate resident access to funding sources for preservation of low income and assisted housing. Policy 1.8: Promote the dispersion and integration of housing for low- and very -low income families throughout the community as opposed to within any particular geographic area, neighborhood, or project. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 76 20082009 Policy 1.9: Encourage the County of Orange to exercise its responsibilities for housing accommodations for low- and very -low income families within Tustin's sphere of influence. Policy 1.10: Utilize the Tustin Community Redevelopment Agency's authority, where feasible, to assist in creating opportunities which will expand opportunities for development of affordable housing in the community. Policy 1.11: Allow second (attached/ detached) units in single- and multi -family districts consistent with the Tustin City Code. Policy 1.12: Utilize Planned Community Districts and Specific Plans to authorize and promote a variety of lot sizes and housing types. Policy 1.13: Promote cluster housing consistent with General Plan land use density standards to reduce the cost of housing construction. Policy 1.14: Encourage the availability of affordable housing for special needs households, including large, low-income families. Special needs households include the elderly, large families, female -headed households, households with a disabled person, and the homeless (see discussion under Summary of Housing Needs for Special Needs Groups). Policy 1.15: Encourage incentives to assist in the preservation and development of affordable housing such as 1) reducing permit processing time and waiving or reducing applicable permit fees; 2) on-site density bonuses when appropriate; 3) tax-exempt financing including continuing to make use of the City's membership in the California Statewide Communities Development Authority to provide opportunities for developer assistance in pre -development and development financing of affordable housing programs; 4) flexibility in zoning or development standards; and 5) other financial incentives using Tustin Community Redevelopment Agency housing set-aside funds and a variety of special State and Federal grant and housing programs. Policy 1.16: Use tax increment housing set-aside funds of the South Central, Town Center, and WAS Tustin Redevelopment Areas to CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 77 2-9952009 assist in constructing, rehabilitating, and preserving low and moderate income housing within the jurisdiction of the City. Policy 1.17: Encourage the design and occupancy of housing for senior citizens and the disabled. Promote the construction or rehabilitation and adoption of dwelling units accessible to seniors and/or the disabled. Policy 1.18: Provide continued support for the County Homeless Assistance Program and other homeless assistance programs within Tustin and in adjacent cities, including the continued use of the City's membership in California Statewide Communities Development Authority to issue private activity mortgage bonds in support of these programs Policy 1.19: Encourage the provision of grants and technical assistance to various organizations and agencies that provide assistance to persons with special needs such as the homeless, disabled, low-income, and elderly persons. Policy 1.20: Participate in federal and state housing assistance and rehabilitation programs aimed at assisting households in need. Policy 1.21: Utilize design criteria in evaluating projects to ensure compatibility with surrounding developments, while taking into consideration ways to minimise housing costs. Policy 1.22: Promote and encourage non-profit and for-profit private sector interests to use available federal and state programs for new or rehabilitated affordable housing. Policy 1.23: Support state -enabling legislation for employers to contribute to the cost of housing for their employees. GOAL 2: Ensure equal housing opportunities for all existing and future City residents regardless of race, religion, ethnicity, sex, age, marital status or household composition. Policy 2.1: Promote equal opportunity housing programs within the community. Policy 2.2: Provide active support to provide fair housing opportunities. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 78 20082009 Policy 2.3: Support programs to match elderly and low and moderate -income individuals who want to share housing costs in a joint living arrangement. Policy 2.4: Support public and private efforts to eliminate all forms of discrimination in housing. Policy 2.5: Minimize displacement of lower income and special needs households, whenever possible, to ensure that displacement is carried out in an equitable manner. GOAL 3: Increase the percentage of ownership housing to ensure a reasonable balance of rental and owner -occupied housing within the City. Policy 3.1: Encourage new housing construction for home -ownership in a mixture of price ranges. Policy 3.2: Examine existing City and Agency home purchasing assistance programs for low- and moderate -income households, including down -payment assistance, - and mortgage revenue bond financing, and recommend program modifications to make them more effective in the current housing market. Policy 3.3: Encourage rental unit conversion and alternative forms of homeownership, such as shared equity ownership and limited equity cooperatives where feasible. Policy 3.4: Examine existing condominium conversion standards to promote renovation of existing units through rental conversion. GOAL 4: Preserve the existing supply of affordable housing in the City. Policy 4.1: Continue to use Federal and State housing initiatives available for low-income households. Policy 4.2: Monitor all federal, state and local funds available to preserve and/or replace lower income units at risk of converting to market rate housing, including tax credit bond financing and redevelopment tax increment funds. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 79 20082009 Policy 4.3: Assist non-profit organizations in securing the resources necessary to preserve/ replace lower to moderate income units at risk of converting to market rate housing. Policy 4.4: Consider incentives to non-profit housing and for-profit private sector interests to purchase and/or maintain lower income units at risk of converting to non lower income housing. Policy 4.5: Take advantage of favorable market conditions, as appropriate, to pursue early negotiation and preservation of at -risk affordable housing through extension of existing affordability restrictions. MAINTENANCE AND CONSERVATION Maintenance and preservation of a City's housing stock prevents unhealthy living conditions; eliminates the need for future, more costly housing rehabilitation; prevents neighborhood deterioration; and encourages community pride. The City enforces codes and provides incentives to promote maintenance and conservation. GOAL 5: Conserve, maintain, rehabilitate, and/or replace existing housing in neighborhoods which are safe, healthful and attractive, in accordance with adopted Land Use Policy. Improve the residential character of the City with an emphasis on revitalizing neighborhoods showing signs of deterioration. Promote conservation of the City's sound housing stock, rehabilitation of deteriorated units where they may exist Citywide, and elimination of dilapidated units that endanger the health, safety and well being of occupants. Policy 5.1: Through available financial incentives, encourage owners of rental housing units that are determined to be substandard, in need of repair and a hazard to the health and safety of the occupants to remove and replace or rehabilitate the structures. Policy 5.2: Promote the availability of funds for the rehabilitation of single-family dwellings and apartments. Policy 5.3: Periodically evaluate housing conditions and, when appropriate, address any increase in deteriorated housing conditions. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 80 20082009 Policy 5.4: Continue to enforce health, safety, and zoning codes to eliminate conditions which are detrimental to the health, safety and welfare of residents. Policy 5.5: Promote preservation of historic and architecturally significant residential properties. Policy 5.6: Study and revise existing zoning codes, if warranted, to provide flexibility to facilitate additions and improvements to existing historic and architecturally significant residential properties. Policy 5.7: Review existing guidelines for single- and multi -family rehabilitation programs, including income targeting and neighborhood location, to achieve maximum neighborhood revitalization, particularly around identified Opportunity Sites as part of the Town Center -A New Beginning Implementation Study. ENVIRONMENTAL SENSITIVITY Housing design and land use patterns can have substantial impacts on the natural as well as the built environment. City policies and programs seek to minimize negative environmental impacts. GOAL 6: Ensure that new housing is sensitive to the existing natural and built environment. Policy 6.1: Attempt to locate new housing facilities in proximity to services and employment centers thereby enabling walking or bicycling to places of employment. Policy 6.2: Promote energy conservation measures in the design of new housing units and the redevelopment of older housing units. Policy 6.3: Require design review of lot placement in subdivisions to maximize passive solar energy and solar access. Policy 6.4: Promote water efficient landscapes, efficient irrigation, and use of permeable paving materials. Policy 6.5: Streamline processing for approved green building. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 81 28982009 Policy 6.6: Consider, support, or partner with utility companies to promote energy rebate programs. RELATED GOALS AND POLICIES The goals and policies described in the Housing Element are related to and support the goals and policies included within other General Plan elements. Many goals and policies from the other elements directly or indirectly support the goals and policies of the Housing Element. These supporting goals and policies are identified in Table H-16. TABLE H-16 HOUSING RELATED GOALS AND POLICIES BY ELEMENT CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 82 20082009 RELATED GOALS AND POLICIES BY ELEMENT Housing Land Conservation/ Public Growth Issue Area Use Housing Circulation Open Space Safety oise Management 1.8,10.2, Housing 13.3,13.4, Opportunities 13.10 1.1,1.10 2.5, 3.1, 4.1 Maintenance 1.1, 4.6, 5.8, 3.4, 3.5, and Preservation 6.4, 6.6 5.4 1.7, 2.2 Affordable Housing Support Service/ Fair Housing 5.3 4.1 3.6, 9.6, Environmental 9.7, 9.8, - 1.14,1.17, 3.3, 4.8, 1.11, Sensitivity 13.1 1 3.5 12.12,3.1,4.1 14.12 11.12 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 82 20082009 HOUSING ELEMENT IMPLEMENTATION PROGRAM The Housing Element Implementation Program provides specific actions the City intends to undertake to achieve the goals and policies of the Element. This section identifies quantified objectives, available financial resources and affordable housing resources, and provides a list of specific programs the City intends to pursue. Housing programs include those currently in operation and new programs added to address housing needs. A description of each program is provided, along with the program funding source, responsible agency, and time frame for implementation. A review of City's past performance on housing element implementation programs is contained in Appendix A of the Housing Element. FIVE EAR-RHNA QUANTIFIED OBJECTIVES 2006-2014 State law requires the City to accommodate its fair share of the State's housing need. In doing so, the City must quantify the number of homes that are projected to be built and conserved. The following quantified objectives are adopted as guidelines toward meeting Tustin's housing needs through 2014. It is important to note that while the quantified objectives of the RHNA are required to be part of the Housing Element and the City will strive to attain these objectives, Tustin cannot guarantee that these needs will be met given its own limited financial resources and the present affordability gap. Satisfaction of the City's regional housing needs will partially depend upon cooperation of private funding sources and the funding levels of County, State, and Federal programs that are used to support the needs of the very -low, low and moderate -income persons. Additionally, outside economic forces heavily influence the housing market. New Construction Objectives The City of Tustin promotes and encourages the development of a variety of housing opportunities to accommodate current and projected housing needs which include 512 very low-, 410 low-, 468 moderate-, and 991 above moderate -income households per the Regional Housing Needs Assessment (RHNA) allocation. While the Land Use Plan provides adequate sites to fulfill needs established by RHNA, construction of new units will depend upon the timing of the landowner and developer in the submission of building plans to meet market demands. Housing subsidies will depend upon the availability of government funds - local, County, State, and Federal. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 83 29982009 Redevelopment projects are subject to the interests of private developers. The construction of secondary units depends upon the desires of the property owners as related to family needs for housing and economic resources. The achievements of the housing objectives are thus dependent upon the private sector and other governmental agencies. The responsibility of the City is to encourage the construction of affordable housing by providing programs and assistance to developers and to assist in its creation by facilitating the review and approval of development permits. Table H-17 provides new construction housing objectives for the period 2006-2014. With the exception of the MCAS -Tustin, all sites identified in Table H-17 are privately owned. Units identified are broken down into various income limits in light of RHNA percentages and production requirements under the Redevelopment Law. Table H-13 discusses City's progress tozvard achieving RHNA quantified objective. Based on units constructed, approved, or under construction, the City of Tustin lois the following remaining units to achieve RHNA's construction objective: 150 Venj Lozv Income, 279 Low Income and 247 Moderate Income units. The City will make its best efforts to accommodate this objective by carrying out the following projects and/or programs: Preservation: Pursuant to Government Code Section 65583.1(c), up to 25 percent of the lower income RHNA may be fulfilled with existing units zvhen affordability is achieved through: • Affordabilihj covenants placed on previously non -affordable units; • Extension of affordability covenants on affordable housing projects identified as at risk of converting to market -rate housing, and • Acquisition/rehabilitation and deed restriction of housing units. With RHNA allocated 512 lozver income units, the City may fulfill 230 lozver income units (128 Very Low and 102 Lou?) through preservation of existing housing units. As identified in the Preservation of Units At -risk for Conversion section of the Housing Element, there are a total of 277 units at risk for conversion during the planning period (100 units at Tustin Gardens and 177 units in the three projects owned by the Irvine Company: Rancho Maderas; Rancho Alisal; and Rancho Tierra). The City, in anticipation of this opportunity, has programmed $2,181,672 of RDA housing set aside fiends in the Agency's Comprehensive Affordable Housing Strategy's Six- Year Capital Plan to negotiate the preservation of these units. The Cihl Council in their capaci!y as the Redevelopment CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 84 20082009 Agency ("Agency") adopted the Comprehensive Affordable Housing Strategy (CAHS) in Lune 2008 committing up to $2,181,672 of Agency Housing Set -Aside Ainds for the preservation efforts of these at -risk units As presented in Table HTM-35 of the Housing Element Technical Memorandum, the City has ulfilled a portion of its regional share for vent low and low income households (472 and 192 units respectively) during the prior planning period, rendering the City eligible to uHie e alternative site program. The Ci jy is in contact with both owners regularly and has expressed interest in ensuring the continuation of these affordable units The Ciht is also in contact with residents of the projects to allow for active public participation with current residents to ensure continued affordability. Tustin Gardens maintains a Section 8 contract for rental assistance They are currently.approved through July 13 2009 with a HUD -requirement that they provide a one -hear notice to terminate their current Section 8 contract. The earliest date a ordabilihy restrictions can expire is [illy 2010 The ciht will make event effort to assist the owner obtain an extension of the HUD Section 8 contract. If that is not possible and additional incentives are needed, the City has estimated the total cost of completely subsidizing rents in Tustin Gardens is $48,900 per month and $586,800 annually. Considering the earliest possible scenario of affordability restrictions expiring Tuly 2010, the total cost of subsidizing Tustin Gardens for the term of the Housing Element, Tuht 2010 to Tune 2014 would be $2,347,200. Rancho Maderas, Rancho Alisal and Rancho Tierra are California Statewide Communities Development Authoii bond funded projects with atordabilihi restrictions expiring May 25 2012. Beginning [tine 2012 the estimate for subsidizing rents at Rancho Maderas Rancho Alisal and Rancho for is $61,671 per month and $740,052 annually, The total cost of subsidizing rents- for twenht-five months Tune 2012 to Tune 2014 would be $1,541,775. The total cost for subsidizing rents at all -four at -risk projects would be $3,888,975. Required Subsidies for At -Risk Projects CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 85 28982009 fiustL ` ddrrs - a 2010 Lo urxett14 C49 »tvnllt Veru Loin Income Units (50%AMI Bedroom # Units Fair Market Rent Hhld Size 2009 Hhld Venom Income (50% Maximum rdability Ga er Unit Total Monthly A ordabilit Ga Total Annual A ordabilih Size A ordable Rent AMS I Bdnn 100 _$1,296 2 U4,4_50 807 J489 548,900586 800 TOTAL Potential Affordability Ga - Tustin Gardens 100 Units 48 months 2 347 200 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 85 28982009 Ranc aderu Rancho AlisalS� Rgmch T' - une t 201 2S ont Veni Low Income Units 50%AMI Bedroom # Units Site Fair Market Rent } Mild Size 2009 Mild Maximum Affordability Ga Per Unit Total Monthly AffordabilitiGap Ga Total Atrrnral A ordabiliti Very Low Income (50% A ffordable Rent AMI) 1 Bdrrn 11 1 296 2 34 450 807 $ 489 $5,379 64 548 2 Bdrm 17 5L546 I IM750 1 i20_1 I $645 M-9 131580 Potential A ordabili Ga - Very Low Income 28 Units (25 months) $40 6600 Low Income its (60% AMD Bedroom # Units Size Fair Market Rent' Hh1d 2009 Mild Size Low Income (60% AMI) Maximum Affordabilih� GapTer Unit Total MOWN A ordabilih Ga Total Annual A ffordabilih A ordabfe Rent 2 1 Bdrrn 5 ula 2 41340 980 316 51580 $18,960 2 Bdrrn 97 11_546 3 14!L5_00 _$1095 451 43 747 1524,964 Potential A ordabili Ga - Low Income 102 Units 25 months 1133175 TOTAL Potential A ordabili Ga - Rancho A is 130 Units 25 months : 1 541 775 TOTAL POTENTIAL AFFORDABILITY GAP - 230 Units $3,888,975 5UUKCL: t Y 2909 Proposed I -air Market Rents for Lmsting Housing Orange County Federal Register/Vol 73 No 189 page 56646, September 29, 2008 2 Affordable Monthly Rent is 30% of 2009 Household Income Level divided bit 12 months less Utilities (assume all Electric see Utilihi Allowance Schedule, e ffective October 1, 2008 published by Orange County Community Services) 2009 Income Limits, published by the California Department of Housing and Commnmihi Development - April 2009 In order to fund the difference between the potential affordabilihi Qav o $3,888,975 identified in the above Tables, "Required Subsidies for At -Risk Projects" and the potential $2,181,672 in Redevelopment ,Inds programmed in the Agency's Comprehensive Affordable Housing Strategy, the Qy analyzed the four at -risk projects and believes Tustin Gardens is the most viable project to receive 4% Tax Credit, Tax -Exempt Bond funding. Tustin Gardens is a 100% affordable, verif-low income Senior Project. The City would work with the current owner to establish a non-profit affordable housing entity to apply or a projected $3,185,937 in 4% Tax Credit, Tax - Exempt Bond funding for the acquisition and rehabilitation of Tustin Gardens. The City's pro forma analysis indicates the potential atfi2rdabilihi .gap of $2,347,200 would be eliminated and Cihl subsidies would not be required. The Cita would commit $1,541,775 to fund t1w potential affordabilitil Qav at Rancho Maderas Rancho Alisal and Rancho Tierra. This would leave a balance of $639,897 in Redevelopment fiends, which would be available if needed. Although the City pro- ects adequate funding to preserve the 230 at - risk units, the Citi zf uill pursue all other funding sources to augment Inding already set aside or these affordable housing.pro- ects. The back-up documentation for this analysis includes the following: 1) Gap Analysis cy for Hie 230 Units; 2) Tustin Community Redevelopment AgenPro Forma Analysis; and 3) Comparable Sales Analysis for Determination of Tax CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 86 28882009 Credit/Bond Financing of Tustin Gardens can be fof found in Appendix E the Housing Element - Tustin Technical Memorandum. Another way rent subsidies could be structured is as a rent buy-dozen. This would involve the Agency providing a one-time assistance loan to the properhl owner to cover the present value of the decrease in rents associated with the extended affi2rdability term compared with market rents achievable on the units. This approach offers a benefit to the owner in that they receive cash upfront from the loan. The disincentive is that the use of Redevelopment housing set-aside ftinds for the rent buy-down necessitates a 55-year affordability covenant on the units. While this large up front commitment on behalf of the Agency isprobably not viable at this time the Ci will explore other funding sources to assist with this option. Program 4.6 provides for City's commitment in preserving assisted housing at-risk for conversion to market rate. Pursuant to Government Code Section 65583.1(c), the City will work with the appropriate owners to enter into legally enforceable agreements no later than lulu 1 2010 and will report on its progress in preserving these units through the annual progress report required pursuant to Government Code 65400. Should the City not enter into a legally en- forceable agreement big My 1 2011 the CiW will recommend an amendment to the Housing Element within a one-ice timeframe, identi ftAng additional sites needed to accommodate the number of affordable units not preserved by enforceable agreements. While the Comprehensive Affordable Housing Strategy identified $2181672 in Redevelopment nds or the period of Tuly 1, 2008 through Tune 30 2014 the expenditure of Redevelopment hinds for the preservation of at-risk units will require City Council approval on an annual basis as part of the Annual Budget approval process. New Construction: Tustin Legacy Master Developer Footprint (Neighborhoods D and G) As mentioned throughout the Housing Element, the closure of the MCAS Tustin provides the City with opportunity to create affordable units to accommodate the needs of the residents. The City in 2001 adopted the MCAS Tustin Specific Plan and in 2003 designated the MCAS Tustin as a Redevelopment Project area and adopted the MCAS Tustin Redevelopment Plan. As part of the adopted Specific Plan, a total of 4,210 housing units were authorized and to date 2,105 units have been approved and either constructed or undergoing construction. The remaining 2,105 units are under the Master Developer footprint (a Master Developer was selected by the City Council to be responsible for the remaining development of Tustin Legacy, ensuring it is consistent and cohesive). CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 87 20082009 Although actual entitlement for the construction of the remaining units have not been granted14, the City however has entered into a Disposition and Development Agreement with the Master Developer and initiated planning for development of the remaining 2,105 housing units. These units will comprise of 126 Very Low Income units, 95 Low Income units, 232 Moderate Income units, and 1,652 Upper Income units. The Developer will be providing the affordable units as a land write down to their purchase of the property from the City (the original owners of the land), with the Redevelopment Agency reimbursing the City for the Agency's obligations to provide the affordable units. The following table demonstrates the average affordable purchase price and average promissory note for units developed at Tustin Legacy between 2007 and 2008. As income eligibility levels change on an annual basis and housing market process adjust, the average affordability gap may vanj over time. The average promissory note is the City's contribution towards establishing affordability (gap financing between the fair market price and the affordable purchase price which the Agency will assume based on a cooperative agreement between the City and Agency). All units have terms of affordability not to exceed 45 years. Income 2007-2008 Average 2007-2008 Average Affordable 2007-2008 Average Level Fair Market Price Purchase Price Promissory Note Very Low $482,792 $69,689 $413,103 Low $488,157 $126,375 $361,783 Moderate $539,602 $276,317 $263,285 The development of Tustin Legacy is anticipated to occur during the Housing Element planning period. During the preparation of this housing element, the Tustin Legactl Community Partners (Mater Developer) has submitted concept plans and tentative tract maps for the developments within Neighborhoods D and G. Affordable units are expected to be provided concurrently with the development of market rate units. Center City (Sixth and B Streets) Opportunity Site The Sixth and "B" Streets opportunity site consists of approximately 8.4 acres within the Center City project area. Approximately 4.2 acres will be set aside for residential uses r up to 126 units. This project site is part of the "Town Center -A new Beginning" implementation study to revitalize the City's older neighborhood (see Program 1.21). New Owner Housing 74 Tustin Legacy Community Partners (Mater Developer) has submitted concept plans and tentative tract maps for the developments within Neighborhoods D and G. However, no entitlements have been granted at the time the housing element was being prepared. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 88 20082009 A total of 79 units are anticipated during the Housing Element planning period through the following programs: Ownership Multi -Family New Construction. Eighteen (18) units are anticipated during the planning period. The Redevelopment Agency has included $4,363,343 of housing set aside funds in its Comprehensive Affordable Housing Strategy Six-year Capital Plan to accommodate this program. Of the eighteen (18) units, seven (7) units would be set aside for Very Low Income households and eleven (112) units would be set aside for Low Income households. • Multi -Family Rental New Construction/Acquisition and Rehabilitation. Thirty one (31) Low Income units are anticipated and $4,363,343 has been set aside in the Agency's Comprehensive Affordable Housing Strategy Six -Year Capital Plan to accomplish this goal. The estimated subsidy is based on leveraging 4% Low Income Housing Tax Credits with Tax -Exempt Bonds. First-time Homebuyer and/or Foreclosure Negotiated Purchase. Five (5) Very Low Income, ten (10) Low Income, and fifteen (15) Moderate Income units are anticipated through this program. To accomplish this goal, $2,400,000 of housing set aside funds estimated subsidies have been included in the Redevelopment Agency's Comprehensive Affordable Housing Strategy Agency Six- year Capital Plan. New Rental Housing Pacific Center East (Trillium West) The Trillium West project consists of approximately 27 acres site located within the Pacific Center East Specific Plan. Opus West Corporation has submitted a draft project description indicating their interest in developing this site. The project would accommodate a development with a mix of uses including office, commercial, retail, hotel, and residential uses. Approximately 300 new rental units would be provided at this project site. Other New Construction Units The remaining new construction obligation of 18 units will be fulfilled through Granny Flats, Second Unit, and Recycling of single family uses in Multifamily zoned lots programs. Based upon recent development proposals, the City has observed increased interest in the development of granny flats, second units and addition of units within multiple family dwelling properties occupied by single family dwelling. The cost to construct these units would be borne by property owner. However, the City would facilitate the development process. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 89 20082009 In addition, bflased upon past development trends (Tustin Grove and Ambrose Lane) that utilized Planned Community Districts to allow for higher densities, the actual number of units created could be higher than identified. The City will strive to ensure that newly constructed units are developed at sufficient densities to assist in fulfillment of low and very low income needs by employing inclusionary zoning for those sites located within redevelopment project areas, mixed use zoning in Old Town Tustin, density bonuses particularly in infill sites to allow for increase densities to accommodate affordable housing developments, and Planned Community Districts to allow for flexibility in development standards. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 90 20082009 TABLE H-17 NEW CONSTRUCTION QUANTIFIED OBJECTIVES SUMMARY CITY OF TUSTIN 2006-2014 MCAS Tustin Specific Plan authorized a total 4,049 potential units at Tustin Legacy. Based upon State Redevelopment Law and the proposed Specific Plan requirement, at least 15 percent of the total units (607 units) would be affordable to Very -Low, Low, and Moderate income households, of which at least 6 percent or 243 units would be affordable to Very Low income households. 44annation. A total of 296 affordable inclusionary units were included in the authorized total number of units to be developed at Tustin Legacy. Of the 4,049 units, 2,105 units have been entitled and currently either completed or undergoing construction. A total of 2,105 units are planned within Neighborhood D and G. z These housing twdts shown as sepiffate line items will serve as tr�sitienal/emer-geney heusing faeflities. Th City counts these tmits as new eenstraction as they are new additions to the housing See Table H-13 and associated discussion for project details. s Frejeets at the end of plaftning pefied.Pursuant to State Law, up to 25 percent of tine lower income RHNA may be fulfilled with existing mousing units. Although a total of 145 Very Low and 132 Low Income units are planned for preservation, only 128 Very Low and 102 Low Income units are eligible for credits toward RHNA. 54 Pursuant to Government Code Section 65583(a)(1), City's share of extremely -low income units is 244-225 (8:5544 percent of the total RHNA Very Low income households new construction objective). Total number of units for extremely -low income and low income units equals to City's share of vey-low income units of 512 units 5 Includes 192 Extremely Low Income units (Village of Hope) 6 Includes 90 Extremely Low income units (Orange County Social Services - Tustin Family Campus) Source: 2007 RHNA; City of Tustin; MCAS Tustin Specific Plan. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 91 20082009 Extremely Low and Low Total # Very Low'-' (<80% Moderate Upper Pro am of Units <50%) J80-120% 120%+) NEW Ci. NSTRUC TIIO 1 WAS Tustin Housing Units' 376455 49 22494 3424 1,884 Neighborhood D 891 53 53 90 695 Neighborhood G 1,214 73 42 142 957 N n c Tush„ r „ _ „ ,, a .. :„ 4.921176 4922355 57 60 824 2Units Constructed 2 MCAS Tustin T-r-ansitional FawAy 49990 481276 74 161 628 Hetisin I its Approved/Under Construction 2 MCAS Tits.:,, Soeial c.,....:ees 90230 90128 102 2Presenlation3 Granny Flats 485 405 New Owner Housing 3 4-5579 4 564 15 Second Unit 2845 5 4-26 75 Recycling of SRP -SF uses to MFD in 258 2-58 R-3 district Total Quantified Objectives 4,366 529616 410 468 1,959 4,598 3104 RHNA 2381 512 410 468 991 Difference 11985 1-7104 0 0 11-968 2,2171 1 1 1 2,113 MCAS Tustin Specific Plan authorized a total 4,049 potential units at Tustin Legacy. Based upon State Redevelopment Law and the proposed Specific Plan requirement, at least 15 percent of the total units (607 units) would be affordable to Very -Low, Low, and Moderate income households, of which at least 6 percent or 243 units would be affordable to Very Low income households. 44annation. A total of 296 affordable inclusionary units were included in the authorized total number of units to be developed at Tustin Legacy. Of the 4,049 units, 2,105 units have been entitled and currently either completed or undergoing construction. A total of 2,105 units are planned within Neighborhood D and G. z These housing twdts shown as sepiffate line items will serve as tr�sitienal/emer-geney heusing faeflities. Th City counts these tmits as new eenstraction as they are new additions to the housing See Table H-13 and associated discussion for project details. s Frejeets at the end of plaftning pefied.Pursuant to State Law, up to 25 percent of tine lower income RHNA may be fulfilled with existing mousing units. Although a total of 145 Very Low and 132 Low Income units are planned for preservation, only 128 Very Low and 102 Low Income units are eligible for credits toward RHNA. 54 Pursuant to Government Code Section 65583(a)(1), City's share of extremely -low income units is 244-225 (8:5544 percent of the total RHNA Very Low income households new construction objective). Total number of units for extremely -low income and low income units equals to City's share of vey-low income units of 512 units 5 Includes 192 Extremely Low Income units (Village of Hope) 6 Includes 90 Extremely Low income units (Orange County Social Services - Tustin Family Campus) Source: 2007 RHNA; City of Tustin; MCAS Tustin Specific Plan. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 91 20082009 Preservation, Rehabilitation, and Other Affordable Housing Program Objectives The primary beneficiaries of Preservation and Rehabilitation and Assistance programs are renters and low-income homeowners. It is assumed that above -moderate -income households will rehabilitate units as needed through private efforts. Tustin's affordable housing strategy is based on the City's housing needs, affordability gap analysis, and available financial resources. Several broad policies establish the framework for the City's Housing strategy as applied to preservation, rehabilitation, and other housing program objectives. These include: 1. Conserve, maintain, and rehabilitate existing housing and revitalize existing neighborhoods; 2. Maximize the supply of affordable housing; 3. Increase homeownership; 4. Preserve the existing supply of affordable housing; and, Consistent with the above policies the City has devised a number of programs of housing assistance to address the preservation, rehabilitation, and other housing program objectives. Specific details on these programs can be found in the City of Tustin Comprehensive Housing Affordability Strategy for Fiscal Years 2008/09 to 2017/18. In addition, Table H-22 - Housing Element Programs 2006-2014, outlines the City's specific housing programs during the planning period. Table H-18 provides the City's rehabilitation, preservation, and other affordable housing objectives during the planning period. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 92 20082009 TABLE H-18 REHABILITATION, PRESERVATION, AND OTHER AFFORDABLE HOUSING QUANTIFIED OBJECTIVES SUMMARY CITY OF TUSTIN 200E-2014 Total # I Very Low Low Moderate Upper ProgramCategory of Units (<50%) (<80%1 (80-120%) 1 (120%+) Single and Multi -Family Rehab Single Fan -dl 54 32 16 6 Multi- Family 108 21 21 66 4W 24 48 48 Multi -Family Rental Acquisition/ Rehab/Conversion/ Resale 31 31 T tal Rehabilitation 313193 5377 1 1-1668 721a PRESE IFVAMN Tustin Gardens 100 100 Rancho Alisal 72 18 54 Rancho Maderas 54 14 40 Ri ncho Tierra 51 3813 4-338 Mitchell 28 4-2 8 14 54 54 T4 taI Preservation 351277 236145 US132 OTHER AFFOR 7►ABLE HOVSIN 1st Time Homebuyer and/or Foreclosure Negotiated Purchase 30 5 10 15 Section 8 Rental Voucher Assistance 1,500 1,500 Shared Housing Referrals 75 50 25 Homeless Housing Partnership Program 242 242 Emergency Shelter 282 282 Total Other Programs 2,129 2,079 1 35 15 Source: Effectiveness of Housing Programs 1998-2008, City of Tustin; Five Year Implementation Plan for the Town Center and South Central Redevelopment Project Areas for Fiscal Years 2005-06 to 2009-10; Comprehensive Housing Affordability Strategy for Fiscal Years 2008-18. Summary of Quantified Objectives Table H-19 summarizes the City's Quantified Objectives for the 2006- 2014 period. Based on the requirements of AB 2634, statute of 2006 (Government Code Section 65583(a)(1)), each jurisdiction must address the projected need of Extremely Low -Income households, defined as households earning less than 30 percent of the Area Median Income (AMI). The projected Extremely -Low Income need is assumed to be 8,85 44 percent of the Low Income need, or 244225 units based upon the percentage of extremely -low income households contained in the regional housing needs assessment determined by SLAG using census data as the baseline. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 93 20082009 TABLE H-19 SUMMARY OF QUANTIFIED OBJECTIVES CITY OF TUSTIN Income Group RHNA New Construction Rehabilitation/ Preservation Other Programs Very Low 304 287 34$ 334 31370 2079 Extremely -Low -244} 2251 244 2822 Low 410 410 234982 35 Moderate 468 468 I072 15 Above Moderate 991 2;-959 3,104 0 — Total 2,381 4366 4,598 664 240 2,129 1 Pursuant to Government Code Section 65583(a)(1), City's share of extremely -low income units is 244--225 (8:85 44 percent of the total Venj Low Incorne new construction objective). Total number of units for extremely -low income and low income units equals to City's share of vey- low income units of 512 units 2 Includes 192 units at Village of Hope and 90 units at Orange County Social Services - Tustin Family Campus Source: 2007 RHNA, SCAG IDENTIFICATION OF AFFORDABLE HOUSING RESOURCES The City has prepared a Consolidated Plan and Comprehensive Housing Affordability Strategy identifying and describing all funding programs available to the City and Tustin Redevelopment Agency to assist in meeting the City's housing needs. Included in the plan are descriptions of a wide variety of major housing assistance programs available from federal and state agencies and private lending institutions. More specific information including details regarding eligible projects and activities and funding availability can be found in the document. The following is a summary of this information along with updates to reflect new state and federal programs. Table H-20 provides an illustrative example of the estimated amount of locally identified resources that could be available to finance housing program objectives on an annual basis over the remaining six-year planning period. The amounts shown are estimates; actual revenue amounts and the timing of their availability could be more or less and would adjust over time. Specific decisions are made on an annual basis as part of the City and Redevelopment Agency budget process. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 94 20082009 epi pip M j N C� cM Nb M( 120 T o -'J ui p§ n N M a0 N C(' N E N t� N u� N Nn n d M F 0n� N N O O �-+ M N t �q p oO N n r� cl 1p�p O 0 0 0 �� cmm�mv[ MVi r pyp� �o�rnrn 5ER d4 HY EA E/i �f ti} N Hof Ho? 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A Z S v 3 pao y v aytl a d d o a U W\ ep .� &0 V U a co 0o ao A U U U F o c v v'aeo �U� n r4 C4 C -. ;/ OU VU uLn VC.JUWHCn y CL Fi C a LO W I t, 4 v a N G o U. �o :t 0 G a v o 02 ° o p m o mp 3 v A all Z ~O N -5S7 U N � 00 N y cn a, u v pvp N xJ O y v '� or o eo 0 ^pcol -2 uF[ 2.2 p ylJ G o v o f U O O l (� v e, b x m b v oov �ebo u>v�.S v q b G aGi vii, T.x7 aG� A O O o�.�a b o ow > G n -,cii � o R. aw, b v cS � bo 58.E G �2i G G w O Z w C y p � ami , j� Ory1�ON0�.,�yOy F w ULO aUe»w LLQ w �d z The key source of local funding for affordable housing development and preservation in Tustin is the Tustin Community Redevelopment Agency's Low and Moderate Income Housing Fund, also known as the 20 Percent Set -Aside Fund. The estimated fund balance in the Agency's Low and Moderate Income Housing Fund as of June 30, 2007 was $17.86 million. Appendix C of the Housing Element provides a Summanj of Six Year Capital Plan Goals in which a set amount of allocations are earmarked for specific programs. The programs and assistance goals are listed in Table 1 of the Affordable Capital Plan attached hereto as Appendix C. The programs included areas follows: 0 Preservation of At -Risk Affordable Housing Rental Units The City of Tustin has identified the preservation of existing affordable housing units as one of the most cost-effective methods of maintaining the stock of affordable housing therefore a high-priority program for the City. The City has identified 277 units of at -risk housing with expiring use restrictions within the six-year planning period, including 145 units of very low income housing and 132 units of low income housing. The amount of assistance provided will be negotiated based on the specific economics of each development and the potential availability of leverage financing, such as tax-exempt bonds and 4% tax credits. The total amount of funds allocated to this program is $2,181,672. • Single- and Multi -Family Home Rehabilitation Program The City has identified single- and multifamily home rehabilitation loans and grants as another cost-effective method of extending the life of affordable housing in the community. The City will target single-family neighborhoods in the vicinity of the Town Center opportunity area as part of the Town Center revitalization effort, as well as multifamily units citywide. The City's goals under this program are to rehabilitate 162 units, including 54 single-family units and 108 multifamily units. • Ownership Multifamily New Construction The City also intends to assist ownership multifamily new construction. Per unit subsidy requirements by income level are derived from the gap analysis, assuming construction of new stacked flat condominiums, which is the least costly ownership housing type examined. The City proposes to spend approximately half of the funds allocated to new CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 97 20882009 affordable housing construction to ownership housing, and half to rental housing, in the amount of $4.36 million each. The City's goal is to build 18 new owner units, including 7 units affordable to very low income households and 11 units affordable to low income households. • Multi -Family Rental New Construction In addition, the City will assist multi -family rental new construction. Per unit subsidy requirements by income level are derived from the gap analysis for the renter stacked flat prototype, assuming leverage from 4% tax credits and tax-exempt bonds. Additional leverage may be obtained if the City is able to identify a project competitive for the 9% tax credit program. The City's goal is to assist 31 new construction rental units under this program, at a total subsidy cost of approximately $4.36 million. • First -Time Homebuyer and/or Foreclosure Negotiated Purchase The City's First -Time Homebuyer Program provides downpayment and second mortgage assistance to low and moderate income buyers to assist them to purchase an existing home in the City. The recent mortgage credit crises have resulted in increasing foreclosure rates throughout many parts of California and the nation. The City has allocated $2.4 million to assist new first-time homebuyers in purchasing a home. This may include negotiated purchase of homes in foreclosure, which may represent a lower cost buying opportunity for first-time homebuyers. The City anticipates assisting 30 homebuyers with these funds. • Homeless Assistance and Supportive Services The City has allocated $60,000 in CDBG funds to continue its financial support of homeless assistance and supportive services in the City. The City's goal for this program is to assist 200 homeless individuals per year over the projection period. • Tustin Legacy Ownership Multi -Family New Construction The City's development agreements for Tustin Legacy are projected to create 323 new affordable multi family ownership units in the City over the six-year projection period. This includes 130 units in TLCP and 193 units in the Villages of Columbus. The City anticipates the creation of 40 units affordable to very low income households, 116 units affordable to low income households, and 167 units affordable to moderate income households. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 98 2-0952009 The TLCP unit count represents projected Phase 1 development and the subsidy requirement is unknown at this time. The cost of maintaining the affordabilitlj of the TLCP units will be transferred to the Redevelopment Agency and the expense associated with maintaining the 45 -year covenants will be determined at the time residential development proceeds. There is no subsidy requirement for the affordable units in the Villages of Columbus. 0 Tustin Legacy Rental New Construction The City's development agreements for Tustin Legacy are projected to create 253 new affordable rental units, including 126 units affordable to very low income households, 64 units affordable to low income households, and 63 units affordable to moderate income households. 77w TLCP unit count represents projected Phase 1 development and the subsidy requirement is unknown at this time. The cost of maintaining the affordability of the TLCP units will be transferred to the Redevelopment Agency and the expense associated with maintaining the 55 -year covenants will be determined at the time residential development proceeds. • Administrative Support The Agency will provide administrative support to implement its affordable housing activities. The Agency projects operating expenses of $4.95 million over the six-year capital planning period. Section 33334.4(a) of the CRL requires expenditures in the Low and Moderate Income Housing Fund during a 10 -year period to assist very low and low income households in at least the same proportion as the total number of units needed within the community. The proportion of very low, low and moderate income units is determined for each community on the basis of the unmet need for housing certain income group categories as reflected in the City's share of the regional housing needs identified pursuant to Section 65584 of the California Government Code (the Regional Housing Needs Assessment (RHNA). In addition CRL 33490(a)(2)(C)(i) requires the Redevelopment Agency to identifij the number of housing units needed for very low, low and moderate income persons as each of those needs have been identified in the most recent determination pursuant to Section 65584. The Agency's RHNA proportional expenditure requirements are 37% for very low income households, 29% for low income households, and CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 99 28082009 34% for moderate income households. Pursuant to CRL 33334.4(a), the Agency may adjust the proportion by subtracting from the need identified for each income category, the number of units for persons of that income category that are newly constructed over the duration of the implementation plan with other locally controlled assistance and without agency assistance. The City initiated the development of additional very low, low and moderate income housing in the WAS Tustin Project Area through density bonus incentives. Therefore, the Agency is permitted to adjust the proportional expenditure requirements accordingly. Based on the above, as adjusted pursuant to Section 33334.4(a) of CRL, the Agency will spend, at minimum, 28 % of Housing Set -Aside Funds for very low income households, 32% for low income households and 40% for moderate income households. The target is intended over a ten-year period of the redevelopment project areas and is not strictly on an annual basis and the goal will be adjusted in conjunction with any further locally assisted projects not fiinded by the Agency. The Agency has been in compliance the last five years and projects over the next five years to spend 63% of Housing Set -Aside Funds on very low and low income households, 38% for very low income households and 25% for low income households. The allocation of funds was based on the projected number of households developed under each income category multiplied by the average gap funding provided by the Agency for each income category. The Agency will insure Housing Set - Aside funds are expended in proportional compliance with Section 33334.4(a). In addition, as of January 1, 2003, according to CRL Section 33334.4(b), each redevelopment agency shall expend, over the duration of each redevelopment Implementation Plan, funds for all persons regardless of age in at least the same proportion as the number of low-income households with a member under age 65 years as compared to the total number of low-income households of the community as reported in the most recent census of the United States Census Bureau. According to the 2000 U.S. Census, 87 percent of low-income households in. Tustin included a member under the age of 65. Therefore, it is the Agency's goal to spend approximately 87% of the moneys in the Housing Fund for non -senior affordable housing activities to reflect this proportion of persons under 65 years of age in the community. All of the units produced to date are for family housing and no expenditures have been made for senior housing units. Coventry Court, a Lennar Homes senior housing development projected to open in FY 2008/09 in the WAS Tustin Redevelopment Project Area, is building 153 affordable units as a result of City density bonus incentives. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 100 29982009 The City is not an entitlement jurisdiction for HOME funds, but may apply to the State for HOME funds as described in a separate report prepared by DRA entitled Affordable Housing Assistance Programs, presented as Appendix C of the Comprehensive Affordable Housing Strategy. The City is an entitlement jurisdiction for Community Development Block Grant (CDBG) funds. For FY 2007/08, the City of Tustin was allocated $827,201 in CDBG funds. These funds may be used for a number of community development purposes besides housing. Given the many competing needs for these funds and the restrictions on these funds for housing purposes, the Agency does not typically allocate CDBG funds for affordable housing development. As needed and as shown on Table H-21, the City and its Redevelopment Agency will utilize State and Federal resources to leverage local resources as these funding sources match the City's programmatic objectives. Table H- 21 is a summary of affordable housing resources. TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Local � Eligible Program Description Activities Multi -Family Assistance to owners of . Rehabilitation Residential Rehab- multi -family projects Loan/Grant Program occupied by low- to moderate -income persons. First Time Low Interest Rates and . First Time Homebuyer Homebuyer Program Down paVment assistance Single -Family Assistance to owners of . Rehabilitation Residential Rehab- single-family projects Loan/Grant Program occupied by low-income _persons. New Construction Financial assistance for . New Construction new affordable housing projects. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 101 20082009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Rental Housing Program Density Bonus Tax -Exempt Bonds City/Agency Owned Land Financial assistance for affordable multi -family rental projects. The City allows an increase in density to developers who set-aside certain number of units in accordance with the City's Density Bonus Code to very low and low-income persons. The Redevelopment Agency and the City have the authority to issue tax- exempt bonds. The City is also a member of California Statewide Communities Development Authority. Bond proceeds are used to develop affordable housing. If available and appropriate, City or Redevelopment Agency owned land may be made available • Acquisition • Rehabilitation • New Construction • Density Bonus • New Housing Development • Rental Acquisition/ Rehabilitation • Housing • Community Facilities CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 102 20082009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN CalHome Enable low and very -low income households to become or remain homeowners Grants to leeal fwdblie developers individual househelds develofment California Self -Help Housing Technical Assistance Allocation Program (428HR12CalHorne Self -Help) Fund programs that assist low and moderate income families to build their homes with their own labor that previa„ teeliftieal owner is c • Predevelopment, site development, and site acquisition for development projects. • Rehabilitation, and acquisition and rehabilitation, of site -built housing, and rehabilitation, repair and replacement of manufactured homes. • Dounpayment assistance, mortgage financing, homebuyer counseling, and technical assistance for self- help • Training and supervision of low and moderate income self-help home - builders CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 103 20082009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Affordable Housing Innovation Program: Loan Fund Affordable Housing Innovation Program: Practitioner Fund Affordable Housing Innovation Program: Innovation Homeownership Program Affordable Housing Innovation Program: Local Housing Trust Fund Affordable Housing Innovation Program: Construction Liability Insurance Reform Pilot Program Building Equity and Growth in Neighborhoods Program (BEGIN) Provide quick acquisition financing for the development or preservation of affordable housing Provide acquisition financing to pre -qualified developers for the development or preservation of affordable housing Increase homeownership opportunities for Californians with lower incomes Help finance local housing trust funds (LHTFs) dedicated to the creation or preservation of affordable housing Reduce insurance rates for condominium development by promoting best practices in construction quality control. Reduce local regulatory barriers to affordable ownership housing, and provide downpayment assistance loans to qualifying first-time lou,- and moderate - income buyers of homes in BEGIN projects • Property Acquisition • Property Acquisition • To be determined by HCD • Loans for construction of rental housing projects with units restricted for at least 55 years to households earning less than 60 percent of are median income, and down payment assistance to qualified first-time • Construction oversight and monitoring activities, including video recording of construction work, quality control manuals, and quality control inspections. Second mortgage loans for dozonpayment assistance to low- or moderate -income first-time homebuyers. Eligible homes must be newly constructed in projects facilitated by local regulatory incentives or barrier reductions, and may include manufactured homes CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 104 20052009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Emergency Housing and Assistance Program Capital Development (EHAPCD) Downtown Rebound Planning Gram Fund capital development activities for emergency shelters, transitional housing, and safe havens that provide shelter and supportive services for homeless individuals and families. • Acquiring, constructing, converting, expanding and/or rehabilitating emergency shelter, transitional housing, and/or safe haven housing and administration of the award (limited to 5 percent). CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 105 20052009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Emergency Housing Assistance Program (EHAP) Provide facility operating grants for emergency shelters, transitional housing projects, and supportive services for homeless individuals and families housing, and suppefti c iees for homeless individuals a a families. —Providing direct client housing, including facility operations and administration, residential rental assistance (move -in deposits and eviction prevention), leasing or renting rooms for provision of temporary shelter, capital development activities of up to $20,000 per site, and administration of the award (limited to 5 percent). Reha�.�fk, ti e�E�sie� e€ e�cis#g facilities Site (including lease e R aZRIICCC client Administfatien C 41. .+ afd (14nited to pefeenr CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 106 20082009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Enterprise Zone Programs (EZs) febs- Housing Balanee ineentive Stimulate business investment and job creation for disadvantaged individuals in state -designated economically distressed areas of California sandal ..4:.es to ;ti -1 cotmfies that d t« a an iner-ease in th 1 of tiFqts. aft an iner-ease 41 the ;,.....,..J ,7....: 1,....7., 2001, eempaFed to the aver -age nttfaber- of per -fn d.,ur-ing the Incentives support the establishing, expansion and retention of businesses within designated zones. Eligible business activities include capital investment, lending, hiring and job retention. —Types of zones include enterprise zones (EZs), Targeted Employment Areas (TEAS), Targeted Tax Areas (TTAs), Manufacturing Enhancement Areas (MSAs), and Local Agency Military Base Recovery Areas (LAMBRAs). Funds awarded can be used for-afk�,pfejeet� er- other- local Reed to be if; the ceBm *FA#J-� i nefe tFaffie imprevements, Rei••lr�` ber-hevd par-kS7 bike t9ad+slib i school acifis es, play centers, pe and fif _e saw CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 107 20082009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Mobilehome Park Resident Ownership Program (MPROP) Loans to finance the preservation of affordable mobilehome parks by conversion from private ownership to ownership or control by resident organizations, nonprofit housing sponsors, or local public agencies. Purchase (conversion) of a mobilehome park by a resident organization, nonprofit entity or local public agency; rehabilitation or relocation of a purchased park Purchase by a low income resident of a share or space in a converted park. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 108 20082009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Multifamily Housing Program General Component (MHP -General) Provide low-interest loans to developers of affordable rental housing developments. Funds may be used for permanent multifamily rental and transitional housing projects involving new construction, rehabilitation, acquisition and rehabilitation, or conversion of nonresidential structures. Special allocations are made for units that are lau fully restricted to senior citizens. Priority points will be given to projects using sustainable building methods that are established in state regulations payment loans to assis fiew ..4..ue fehabilitation hottsing for L. MHP funds will be provided as permanent financing only. Eligible costs include project development capital costs, including child care, afterschool care and social service facilities integrally linked to the restricted housing units. —Capital costs may involve real property acquisition; refinancing to retain affordable rents; necessary onsite and offsite improvements; reasonable fees and consulting costs; and capitalized reserves rental heus4_-aftd_th_e__ ..id ti 1 t... t to Fental housint. El: bl Of L ld care, after- scheel faeilities ...�� to mtaifi affordable CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 109 20082009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Multifamily Housing Program: Supportive Housing Component (MHP -SH) Multifamily Housing Program: Homeless Youth Component (MHP-HY) urb Predevelopment Loan Program (PDLP) Provide low-interest loans to developers of permanent affordable rental housing developments that contain supportive housing units. Funds may be used for new construction, rehabilitation, acquisition and rehabilitation, or conversion of nonresidential structures. Provide low-interest loans to developers of affordable rental housing developments that contain units for homeless youth (HY). Funds may be used for permanent multifamily rental and transitional housing projects involving new construction, rehabilitation, acquisition and rehabilitation, or conversion Of nonresidential structures Short-term loans to provide predevelopment capital to finance the start of low- income housing projects in urban areas. • MHP -SH funds will be provided as permanent financing only. Eligible costs include project development capital costs, including child care, after- school care and social service facilities integrally linked to the restricted housing units. Capital costs may involve real property acquisition; refinancing to retain affordable rents; necessary onsite and offsite improvements; reasonable fees and consulting costs, and capitalized reserves Eligible costs include project development capital costs, including child care, after-school care and social service facilities integrally linked to the restricted housing units. Capital costs may involve real property acquisition; refinancing to retain affordable rents; necessary onsite and offsite improvements; reasonable fees and consulting costs; and capitalized reserves Predevelopment costs include, but are not limited to, site control, site acquisition for future low-income housing developments, engineering studies, architectural plans, application fees, legal services, permits, bonding and site preparation. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 110 20082009 Transit -Oriented Development Housing Program (TOD) TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Provide funding to stimulate the production of higher density housing and related infrastructure within close proximity to qualifying transit stations that encourages increased public transit ridership and minimizes automobile trips • New construction or substantial rehabilitation of rental housing, conversion of nonresidential structures to residential, and first-time homebuyer mortgage assistance for ownership units in qualified projects, • capital improvements required for a qualified housing or mixed-use project, such as sewer or water upgrades, streets, drainage, parking, noise mitigation, and utility access, connection or relocation; • capital improvements to enhance pedestrian or bicycle access from a qualified project to the nearest transit station, such as walkways, plazas, mini parks, signals, streetscape improvements, security enhancements, bicycle lanes and transportation CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 111 20082009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 112 20082009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Proposition IAI C Proposition 1Cis the AssistaftEe successor to Proposition 46 . Rental n..sist. MHP which authorized 2.1 billion . CalHome in State bonds for a variety of , MHP-SH new housing investments. . Serna Proposition 1C authorized . BEGIN $2.85 billion more General Obligation bonds to continue . EHAPCD several bond funded housing , TOD assistance programs, and MPH begin new programs to • Infill Housing improve infrastructure in • Affordable Housing support of housing. Innovation Proposition 4A includes • CaIHFA isions to establish a PewnpayfRent Assistaoee .-,.1 oel F .. Rj It.-a C fem affordaSi�ig As. Potential buyer or teflaPAs of affefdable housingprojeets afe eligible to rr-eeeive �Y� tassistanee ,.a ...1.sidi L..efn the er State at amettftts�� to the school fees paid b the e-hottsing This pregf ams struetur--e and Iefnen atien dee ed b the Statie L • Parks CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 113 28982009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Federal Emergency Shelter Grant Program (FESG) Governor's Homeless Initiative (GHI) Fund emergency shelters, services and transitional housing for homeless individuals and families. for shelter- support-sefviees An interagency effort to reduce homelessness by funding development of permanent supportive housing for persons with severe mental illness who are chronically homeless Local government agencies and nonprofit organizations in communities that do not receive shelter funds directly from the U.S. Department of Housing and Urban Development (HUD). Local nonprofit shelter and service organizations may also receive funds as service providers working in cooperation with local government agency applicants.SuppeA SeFviees New construction, rehabilitation, acquisition and rehabilitation of permanent rental housing, and conversion of nonresidential structure to rental housing. Projects must have DMH fund commitments for supportive services, typically require rent subsidies, and are not eligible if construction has started as of the application date. Projects may use 9% federal low income housing tax credits as well as 4% credits. Lower loan limits apply to 9% projects than 4% projects. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 114 29852009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN HOME Investment Partnership Program (HOME) Infill Infrastructure Grant Program California Housing Finance Agency (CHFA) Multiple Rental Housing Programs California Housing Rehabilitation Program Assist cities, counties and nonprofi-t community housing development organizations (CHDOs) to create and retain affordable housing Fund infrastructure improvements to facilitate new housing development in residential or mixed use infill projects and infill areas Below market rate financing offered to builders and developers of multiple family and elderly housing. Tax-exempt bonds provide below-market Low interest loans for the rehabilitation of substandard homes owned and occupied by lower- income households. City and non -profits sponsor housing rehabilitation projects. • Rehabilitation, nezv construction, and acquisition and rehabilitation of single- family and multifamily housing projects, and predevelopment loans by CHDOs. • All activities must benefit lozver-income renters or comers • Capital improvement projects that are part of, or necessary for the development of, qualifying infill projects or areas, including but not limited to parks or open space, water, sewer, or other utility service improvements; streets, roads, parking structures, or transit linkages and facilities; pedestrian or bicycle transit facilities; traffic mitigation; infill site preparation or demolition; or sidewalk or • New Construction • Rehabilitation/ Acquisition • Rehabilitation • Repair of Code Violations • Property Improvements CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 115 29882009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN California Housing CHFA sells tax-exempt • Homebuyer Assistance Finance Agency bonds to provide below - Home Mortgage market loans to first time Purchase Program homebuyers. Program is operated through participating lenders that originate loans purchased by CHFA California Housing Unsecured loan from • Acquisition Finance Agency CHFA to provide . Rehabilitation HELP Program affordable housing • Infill opportunities through • Predevelopment program partnership with • New construction local government entities. • Code Enforcement Low Income Tax credits available to • Rehabilitation/ Housing Tax Credit individuals and Acquisition (LIHTC) corporations that invest in • New Construction low-income rental housing. Tax credits are sold to corporations and people with high tax liability, of which the proceeds are utilized for housing development County Statewide The City of Tustin is now a • Multi -family Housing Communities direct member of the • Private Mortgage Program program through a Joint Revenue Bonds Powers Authority and can . Acquisition participate directly. • Rehabilitation CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 116 20082009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN California Debt Limit Allocation Committee (CDLAC) Allocation of private activity bond (tax-exempt mortgage revenue bond) to single-family housing. Low interest loan for multi- family housing rehabilitation or acquisition, or both. Provides limited term housing assistance combined with case management, employment services, childcare and other supportive services to welfare recipients. Grants, loans, and mortgage assistance to low and moderate -income families improving property with their own labor. Loans for pre -development or "seed" money to nonprofit corporations and local governments. Construction, maintenance, use, and occupancy of privately owned and operated employee - housing facilities. Provides unsecured loan for affordable housing • Mortgage Credit Certificate • Multi -family private mortgage revenue bond • Land lease Payment • New Construction • Pre -development costs • Employee Housing of five or more employees • Infill • Code Enforcement • First Time Homebuyers • Acquisition • Rehabilitation CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 117 20082009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN CDLAC continued Low interest loans for housing construction for individuals and families with special needs. Low interest and downpayment program for low and moderate -income first time homebuyers. Permanent financing for new construction, acquisition/ rehabilitation, and acquisition of multi- family projects Community Entitlement program that is • Section 108 Loan Development Block awarded to the City on a Repayments Grant (CDBG) formula basis. The • Public Services Activities objectives are to fund . Historic Preservation housing activities and • Admin. & Planning expand economic . Code Enforcement opportunities. Projects . Public Facilities must meet one of three Improvements national objectives: benefit . Housing Activities low- and moderate -income . Economic Development persons; aid in the . Rehabilitation prevention or elimination of slums or blight; or meet other urgent needs. Mortgage Credit Federal tax credit for low- . First Time Home Buyer Certificate (MCC) and moderate -income Assistance homebuyers who have not owned a home in the past three years. Allocation for MCC is provided by the State through the County of Oranze. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 118 20082009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN HOME Investment Grant program for • Multi -Family Partnership (HOME) housing. The intent of this Acquisition/ Rehab Program program is to expand the . Single -Family supply of decent, safe, and Homebuyer Assistance sanitary affordable • CHDO Assistance housing. HOME is • Administration designed as a partnership • Rental Assistance program between the federal, state, and local governments, non-profit and for-profit housing entities to finance, build/ rehabilitate and manage housing for lower- income owners and renters Emergency Shelter Annual grant funds are • Homelessness Prevention Grants (ESG) allocated on a formula (acquisition, new basis. Funds are intended construction, to assist with the provision rehabilitation, of shelter and social conversion) services for homeless • Supportive Services • Operating Expenses Housing Funds are made available • Rental Assistance Opportunities for countywide for supportive • Supportive Social Persons with AIDS social services, affordable Services (HOPWA) housing development, and • Administration rental assistance. Shelter Plus Care Supportive housing and • Rental Assistance Program (S+C) services for persons with disabilities -grants for rental assistance offered with supportive services to homeless with disabilities and disabled households. Supportive Housing Grants to improve quality • Acquisition Grant of existing shelters and • Rehabilitation transitional housing. • New Construction Increase shelters and transitional housing facilities for the homeless CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 119 20082009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Section 8 Rental Assistance Section 202 Section 811 HOPE McKinney Act Supportive Housing Program (SHP) Section 8 Moderate Rehabilitation Single Room Occupancy Program (SRO -Section 8) Rental assistance program which provides a subsidy to very low-income families, individuals, seniors and the disabled. Participants pay 30 percent of their adjusted income toward rent. The Orange County Housing Authority pays the balance of rent to property owners, and administers the program. Grants to non-profit developers of supportive housing for the elderly Grants to non-profit developers of supportive housing for person with disabilities, including group homes, independent living facilities and intermediate care facilities Homeownership assistance awarded on a competitive basis requires non-federal matching funds. Grants to develop supportive housing and services and services that will enable homeless people to live as independently as possible. Funds to rehabilitate single -room units within a building of up to 100 units. The provision of supportive services is • Rental Assistance • Acquisition • Rehabilitation • New Construction • Rental Assistance • Support Services • Acquisition • Rehabilitation • New Construction • Rental Assistance • Homeownership of Multi -family units (HOPE 2) • Homeownership of Single-family homes • Transitional Housing • Permanent Housing For Homeless With Disabilities • Supportive Services, such as child care, employment assistance and outpatient services for the homeless • Rehabilitation • New Construction CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 120 20082009 TABLE H- 21 Mortgage Insurance for • Acquisition AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN • New Construction Purchase/ Refinance Small Projects Mortgage Insurance • Acquisition Processing (SPP)- program for small multi- • Rehabilitation (221 (d)(4) and 223 (f) family new construction or • New Construction improvements, repairs, or substantial rehabilitation additions to multi -family (221)(d)(4) and small multi- projects. family rehabilitation Section 108 Loan Provides loan guarantee to • Acquisition CDBG entitlement • Rehabilitation jurisdictions for pursuing • Home Buyer Assistance large capital improvement • Homeless Assistance or other projects. The • Public Improvement jurisdiction must pledge its • Economic Development future CDBG allocations • Relocation, clearance, site for loan repayment. improvements Maximum loan amount can be up to five times the entitlement jurisdiction's most recent approved annual allocation. Maximum loan term is 20 HUD Mortgage Mortgage Insurance for • Acquisition Insurance for purchase or refinance of • New Construction Purchase/ Refinance existing multifamily • Operation Administration projects. HUD Rehabilitation Provides mortgage • Energy Conservation Loans for insurance for • Rehabilitation Multifamily Projects improvements, repairs, or additions to multi -family projects. Disposition of HUD Mulitfamily Housing To dispose of multi -family housing owned or financed by HUD that is delinquent, under workout or foreclosed with mechanisms designed to preserve the low- and moderate -income housing stock. • Acquisition • New Construction • Operation Administration • Preservation CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 121 20082009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN HUD Single -Family Sells HUD -acquired single- • Acquisition Property Disposition family properties to • Rehabilitation Program expand homeownership opportunities and strengthen neighborhoods. Up to 10% of HUD -help single-family properties are made available for lease for use in homeless programs. Rent is $1 per year. Homeless Providers Provides grants to develop • Acquisition Grant and Per Diem programs that help • Operation Administration Program veterans recover from • Single Room Occupancy homelessness, including Hotels establishing transitional • Social Services housing and supportive • Transitional Housing services for homeless veterans. 1'ri�rate Re�oures • Community Home • Homebuyer Assistance Buyer Program - Fixed rate Mort a es • Community Home • Homebuyer Improvement Assistance/ Rehab Mortgage Program - Federal National Mortgages for both Mortgage purchase and Association (Fannie rehabilitation of a Mae) home • Fannie Neighbor - • Expand Home Under served low- Ownership for Minorities income minorities are eligible for low down - payment mortgages for the purchase of single family homes CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 122 20052009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Federal Home Loan Purchases/ secures high . Homebuyer Assistance Mortgage loan to value ratio single- . Acquisition Corporation family home purchase loan . Rehabilitation (Freddie Mac) to assist low income families Rehabilitation Mortgages Program insured mortgages for property acquisition and rehabilitation California Assistance to low income • New Construction Community minority neighborhoods, . Rehabilitation Reinvestment Act including the construction, . Acquisition (CRA) rehabilitation, bridge and acquisition finance needs of developers of affordable rental and for -sale housing, as well as first time, low and moderate income homebuyers. Provides funds to qualified affordable housing projects that would not meet customary criteria or existing secondary mortgage market requirements or for which there is no secondary market Provides interest rate at 20 basis point below 11th District costs of funds. Federal Home Loan Direct subsidies to non- . New Construction Bank Affordable profit and for-profit • Expand Home Housing Program developers, and public Ownership for Lower agencies for affordable Income Persons low-income ownership and rental projects California Organized Provides financing for • Affordable housing Investment Network affordable rental or financing (COIN) ownership housin . CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 123 20052009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN McAuley Institute Mercy Loan Fund Neighborhood Housing Services World/BRIDGE Initiative Revolving Loan fund and technical assistance to build or rehabilitate housing. Makes loans to projects in which conventional financing is not available or not affordable and promotes innovative and effective financing arrangements. NHS is a three-way partnership among neighborhood residents, local governments and local businesses. The Neighborhood Reinvestment Corporation provides direct technical assistance, expendable grants, and capital grants to NHS, which makes loans for rehabilitation. Provides lower -interest construction financing for affordable or mixed - income rental housing or affordable home ownership through a consortium of World Savings/Calpers/ Wells Fargo/Bank of America • Acquisition • Homeless Shelters • New Construction • Rehabilitation • Self -Help Housing • Single Room Occupancy Hotels • Transitional Housing • Acquisition • Group Homes/ Congregate Care • Infrastructure Development • Mobilehome Park Purchase Assistance • New Construction • Preservation • Rehabilitation • Self -Help Housing • Single Room Occupancy Hotels • Transitional Housing • Energy Conservation • Operation Administration • Rehabilitation • New Construction • Rehabilitation • Acquisition CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 124 29852009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES' CITY OF TUSTIN Non Profit According to the State • Acquisition and Organizations Department of Housing rehabilitation and Community . Management of multi - Development, three family units nonprofit agencies in Orange County have expressed interest in purchasing and or managing at risk or replacement units in the Tustin area. Orange County Non-profit lender • Construction Financing Affordable Housing consortium • Permanent Financing ' The Replacement Housing, Housing Rehabilitation, Housing Production and Land Cost Write -Down programs all use the Redevelopment Agency's low- to moderate -income housing set-aside funds to leverage other regional, state, and federal funding sources. These sources include, but are not limited to: Orange County Housing funds, California Housing Finance HELP funds, Department of Housing and Urban Development HOME funds, along with housing revenue bond financing and low income housing tax credits. Such sources help to ensure an adequate level of funding to satisfy the City's affordable housing production requirements. Source: City of Tustin Redevelopment Agency Comprehensive Affordable Housing Strategy 2008-2018 In addition to these resources, there are also potential public and private resources that may be available to the City. HOUSING PROGRAMS The following matrix identifies existing and new housing programs to be implemented during the 2006-2014 period. Table H-22 is a comprehensive summary of the City's quantified objectives set forth for each program for the planning period 2006-2014. The programs are organized according to the goals described previously. Appendix C is a six-year capital plan showing anticipated expenditures of projected local revenues for affordable housing (FY 2008-09 to 2013-14). CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 125 20082009 cv U }� " LL G, es o • G o, � CU y y _N � r Q� OQ Cu Z 1" Q O o T°1 N G cn A v r -21 a a w (p chi o v o w G o u ba v ap x ca v > o s. o, W aGi G x > -a v G O bo 0 G¢'p v v o 0.o E- SLY R'Qx ti .-I G 0 u V (j u v(a y G > G. 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O 5 O U C7 ° ° $ °�' xiriH 3u6 RUQ uU �' °6 `o u o u v � xO U a, C9 E. 0� Z CA wCA w z F7 a O x 00 It �N CY H J x J v � o o C it O y rX 3 c7S a � a, v V wz c�a z v br 0 0 0 a U Q A V Q Q U Q Q Q) w ( 13 In .� N o ea o m CF cs mZn o ;� �U tVv1�� �qp� .� cu x I W �+ v � c�C o y "' � � c00 �C U a i. . � .t,-I"i, •%' .t�' vi ,� . Ov • 3 x p+ c� ao x10 E. 0� Z CA wCA w z F7 a O x 00 It .a to 0o o c Y 2i o m aJ v N (13 wz z a, bt � un -' 06 W >a U Q Q >a>a V Q Q21 V Q Q as G 41 o �'' � y ' N •�" pp � p� � �{ O oy�i ^�f O � N pp In a1 C7 0. c p > Z U." "-� J Cn O �p bO OO v; ct Ln 'N o w o o� v _O G; xi v o0 0 a� o °p .� o � bA O 5 p O� cu � -"Z Q. 3 v � a en b'o " _ (Dv cu C N� S G O �Q 2..moi ate+ CIO a. w z o m 4; v 3 0� a w y °' w h+i wo .. a» . , o ao d �, _ 164 m O O o to �+ p d�xC In x 0 z 0o 0 �n Appendix to Housing Element APPENDIX A REVIEW OF PAST PERFORMANCE CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 151 29952009 Appendix to Housing Element This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 152 20082009 Appendix to Housing Element REVIEW OF PAST PERFORMANCE State law establishes a five-year cycle regulating housing element updates. In compliance with the SCAG cycle, the Tustin Housing Element was updated in 1989 at which time it was found to be in compliance with State law, and was updated again in 1994. In 1997, the City of Tustin initiated a comprehensive General Plan update, and the Housing Element was again updated to accommodate the MCAS Reuse Plan and to ensure consistency with other General Plan Elements, as well as to address recent changes in State law. These amendments were adopted on January 16, 2001. In 2002, the City once again updated its Housing Element and was certified by The State's Housing and Community Development Department in compliance with State's Law. Review of Past Housing Element Objectives (1998-2008) The 1999 SCAG Regional Housing Allocation Model indicated a new construction need in Tustin by 2005 of 3,298 units, of which 694 units were for very low income households, 489 for low income, 778 for moderate income and 1,337 upper income. The following discussion highlights the progress, effectiveness and appropriateness of 1998-2005 Housing Element Objectives and the progress achieved during the 1998-2008 time period. Table HTM-36 in the Technical Memorandum provides a more detailed summary of the City's overall accomplishments for the years 1998-2008, broken into two time periods (1998-2000; 2001-2008). As indicated in Table HTM-36, the City was successful in accomplishing the majority of the objectives established for the past planning period. According to City Staff, the following objectives were met or exceeded: New construction 4,289 units were constructed during the 1998-2008 period, exceeding the City's objective of 3,298 units for the planning period. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 153 28952009 Appendix to Housing Element Available Sites The program objective was to utilize Planned Community Districts and Specific Plans to authorize and encourage mixed-use developments to assist in the development of new affordable owner and rental housing, including 3,151 infill units at WAS Tustin. The program has seen development of 1,486 units over the 10 year period, including a new 12 unit live/work development (known as Prospect Village) in Old Town. Mobile homes The objective to maintain existing units was accomplished. In addition, entitlement for the creation of 10 new mobile home spaces was accomplished. Second Residential Units The previous City ordinance regarding second residential units required a conditional use permit for the establishment of the use in several residential zoning districts. In 2003, the City adopted an ordinance modifying the zoning code to no longer require a conditional use permit and to allow second residential units to be processed at a ministerial level, to be in conformance with California state law. In the current review period and prior to this ordinance, the Community Development Department approved one third residential unit at 135 South A Street. The objective to provide two new second residential units in the review period has been met. Deed restricted affordable units The objective of requiring deed restrictions to ensure continued affordability for low- or moderate -income housing constructed or rehabilitated with the assistance of any public or Redevelopment Agency funds as may be legally required was successfully met. Between the years 1998-2000, 207 units deed restricted units were established, and from 2001-2008, 243 restricted units were established, for a total of 450 deed restricted units established during the program implementation period. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 154 20052009 Appendix to Housing Element Pre -application conferences The objective to continue to utilize pre -application conferences and processing procedures to expedite processing was carried out on a total of 37 projects during the review period. Transitional Housing The program objectives were to promote, assist, and facilitate the development of emergency and transient shelters through continued support of the County Homeless Assistance Program, and to supporting local agencies that provide homeless services with financial assistance. The program has been effective in maintaining 3 homes with a total of 16 beds through the period, as well as 90 beds at the Orange County Social Services Tustin Family Campus facility as a shelter for abused and neglected children and their parents and for emancipated youth. Temporary housing for the homeless The program to support countywide efforts to assist approved homeless providers as part of the MCAS Tustin reuse effort was outlined in a series of specific objectives, all of which were achieved. A large variety of temporary and transitional facilities to be operated by various homeless providers have been developed at Tustin Legacy, as follows: Construction of the 192 -bed Village of Hope facility to be operated by the Orange County Rescue Mission is complete. Twenty-three units of transitional housing to be operated by the Salvation Army have been completed at Tustin Field I, as well as acquired in the city of Buena Park with the City of Tustin's assistance. Six new transitional units for women and children have been completed in the Columbus Grove development at Tustin Legacy, to be operated by Human Options. An additional 6 units have been completed at Columbus Grove for families with children, to be operated by Orange Coast Interfaith Shelter. Finally, 14 units at Columbus Grove will provide transitional housing for families with children by Families Forward (formerly Irvine Temporary Housing). CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 155 2-9982009 Appendix to Housing Element Housing opportunities for all economic segments The program to monitor the implementation of the affordable housing program adopted as a part of the East Tustin Specific Plan has successfully met the objective of monitoring 174 units in East Tustin over the 10 year period. Bonding Programs The Redevelopment Agency has successfully administered a bond financing program which has processed a total of 252 restricted units for very -low and low income households to accomplish Five -Year Quantified Objectives and help meet the City's affordable housing needs. Senior Citizen Housing The objective in protecting and providing senior citizen housing was identified as the preservation of 100 at -risk and creation of 60 new units by 2005. The 100 at -risk units were preserved throughout the review period. In the 1998-2000 period, a site on Sycamore Avenue was identified for a 60 -unit senior housing project, which was ultimately developed into 54 one -hundred percent affordable senior units, known as Heritage Place at Sycamore. Senior Services Program The City's objective to develop a senior services program consisting of a comprehensive transportation program, case management, information and referral, and a shard housing program to assist 850 elderly annually was exceeded with 920 elderly receiving assistance annually between 2001-2008. Recycling Single -Family Uses into Multiple -Family Units The program to encourage developers to consolidate individual lots into larger cohesive developments by responding to all requests for density bonuses per City codes was accomplished in that the City saw the construction of one additional unit at 135 A Street and density bonuses were granted to Lennar as an incentive for the creation of affordable units at the Villages of Columbus. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 156 20082009 Appendix to Housing Element Ongoing Review of Housing Element Programs The objective to conduct an on-going review of Housing Element programs by preparing an annual report to the Planning Commission assessing the previous years' accomplishments toward meeting Housing Element objectives and then submitting the annual report to the State HCD was achieved. Zoning Studies The City was to undertake zoning studies to consider new programs to encourage and promote affordable housing and recommend appropriate amendments for action by the Planning Commission and City Council. The program was effective in adopting the density bonus ordinance in 1999, subsequently revising it in compliance with the change in state law, and in adopting a Planned Community District to accommodate a mixed use project (Prospect Village) in Old Town. Private Streets In order to reduce construction costs, the City adopted standards for private streets and continued to permit developers to install private rather than public streets when feasible. In the 1998-2000 period, 69 private streets were created. Site Improvements New developments require the construction of site improvements which are often costs that are passed on from the developer to the housing consumer, creating an even greater barrier to qualifying for the purchase of home. In order to reduce these added housing costs, the objective was to evaluate the use of special assessment district funding at WAS Tustin (Tustin Legacy) by 2005 as well as in other developing areas. During the 1998-2000 period, portions of public works assessment district bonds were converted to fixed rate to lower cost. During the 2001-2008 period, assessment districts were created at Tustin Legacy. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 157 20082009 Appendix to Housing Element Environmental Constraints The on-going goal was to require program Environmental Impact Reports (EIR) on all major development projects to decrease the delays in processing and incorporating mitigation requirements into the development plans. In the first half of the review period, 11 negative declarations (ND) were adopted and a draft and final program joint EIS/EIR for the WAS Tustin project was prepared. In the second half of the review period, the Final Program EIS/EIR for WAS Tustin was completed. Density Bonus Program The objective was to process all request for density bonuses in order to facilitate the construction of affordable housing. In 1999, the Density Bonus Ordinance was adopted and one application was processes. Between 2001-2008, Lennar/ Lyon were granted 182 density bonus units for the creation of affordable units at Columbus Square and Grove. WAS Tustin Redevelopment Project Area The goal to create a new redevelopment project area for the MCAS - Tustin site by adopting the MCAS -Tustin Specific Plan and Redevelopment Project area was attained. Fair Housing The City's objective to contact with the Fair Housing Council of Orange County (FHCOC) to assure equal housing opportunities by assisting approximately 400 residents annually and 2,000 residents by 2005 was exceeded. Between 1998-2000, 2,289 complaints were processed, and an additional 1,541 were processed between 2001- 2008. Shared Housing The City continued to provide coordination and support to an Orange County housing sharing program by handling a total of 75 cases during the review period. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 158 29082009 Appendix to Housing Element Housing Referral Program The City continued to provide housing referral services to families in need of housing assistance and information through the Police, Parks and Recreation Services, and Community Development Departments. The objective was to make 8,750 referrals to social agencies and 50 referrals for shard housing by 2005. Between 1998- 2000, 4,375 social service referrals and 25 shared housing referrals were made; between 2001-2008, an additional 4,850 social service referrals and 50 shared housing referrals were made. Replacement Housing The program objective was to ensure rehabilitation or construction of an equal number of replacement units when low and moderate income residential units are destroyed or removed from the market pursuant to California Community Redevelopment Law. Over the 10 year period, 86 units were removed and replacement was completed. Housing Rehabilitation The goal to rehabilitate 100 units by allocating CDBG and Redevelopment Agency (RDA) funds to finance public improvements and rehabilitation of residential units in target areas was achieved. A total of 119 units were assisted with RDA funs over the review period. Housing Authority The program to contract with the Orange County Housing Authority (OCHA) for the development and operation of federally assisted low and moderate income housing programs was continued and 1 developer contract (Tustin Gardens) was processed with OCHA. Rental Assistance The program to provide rental assistance through Section 8 certificates and voucher certificate program assistance funds through the OCHA was successful over the review period. The objective to issue 200 certificates/ vouchers annually and 1,000 by 2005 was CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 159 20082009 Appendix to Housing Element exceeded. Between 1998-2000, 632 certificates/ vouchers were issued, and approximately 350 were issued annually between 2001-2008. Affordable Senior Housing Project and Senior Board and Care Facility The program objective to maintain 38 units of affordable senior housing (20 units in a housing complex and 18 units in a board and care facility) was exceeded. Over the review period, 112 housing units were maintained as well as the 18 board and care units. Preservation of Assisted Housing Tustin has a total of 100 low income units that have been at risk of conversion during the review period. The objective to monitor and preserve all of these units at risk was completed successfully. Enforcement of Building and Housing Codes The City's Code enforcement conducted over 6,000 property maintenance and housing code related inspections during the past review period. The City has been successful in getting property owners to abate code violations. Cultural Resources District The purpose of the City's Cultural Resources Overlay District is to safeguard the heritage of the City by preserving neighborhoods and structures that reflect the City's heritage and past. The objective in the planning period was to rate historic structures where applicable and process 20 certificates of appropriateness. In the 1998-2000 period, nine units were rehabilitated. In the 2001-2008 period, the Community Development Department issued 79 Certificates of Appropriateness certifying building changes were consistent with design guidelines and appropriate within the District context. Energy Conservation All new construction is required to be subject to state energy conservation (Title 24) requirements as a condition for the issuance of a building permit. In the review period, 1,556 new units were required by the City to meet these standards. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 160 20082009 APPENDIX B AFFORDABILITY GAP ANALYSIS CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 20982009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 20082009 Ci of Tustin Affordability Gap and Leveraged Financing Analysis 1.0 Executive Summary The City of Tustin retained David Paul Rosen & Associates (DRA) to prepare an affordability gap analysis and evaluation of leveraged financing options for new residential development in Tustin. The 'affordability gap" methodology determines the difference between the supportable mortgage on the unit at affordable rents and sales prices and the actual development cost of the unit. The gap analysis provides planning -level estimates of the typical per unit subsidized required to make different types of housing affordable to households at alternative income levels. The per unit affordability gaps calculated in this report are based on housing prototypes that are 100% affordable to households at each of the income levels modeled (or in the case of the leveraged financing analysis, at the mix of income levels necessary to meet. the requirements and/or competitive standards of the leveraged financing programs). However, the results can be used in estimating subsidy requirements for mixed income housing developments as well. Under the assumption that the market rate units are financially feasible without subsidy, the subsidy requirement for a mixed income development can be estimated by multiplying the number of affordable units by the appropriate per unit affordability gap. The results of the gap analysis Provide a useful tool to the City of Tustin and Tustin Redevelopment Agency for capita planning purposes. DRA recommends that the subsidy provided to any individual housing development be determined based on analysis of the specific economic conditions pertaining to that pro, The first step in the gap analysis establishes the amount a tenant or homebuyer can afford to contribute to the cost of renting or owning a dwelling unit based on established State and Federal standards. Income levels, housing costs and rents used in the analysis are defined below using 2007 published data for Tustin. The second step estimates the costs of new housing construction in Tustin. For this purpose, DRA, in collaboration with City staff, formulated five prototypical housing developments (one rental development and four owner developments) suitable for the Tustin market today. DRA estimated the cost to develop these housing prototypes in Tustin under current housing conditions using information on actual recent housing developments provided by Tustin and Orange County area developers. The third step in the gap analysis establishes the housing expenses borne by the tenants and owners. These costs can be categorized into operating costs, and financing or mortgage obligations. Operating costs are the maintenance expenses of the unit, including utilities, property maintenance and/or Homeownership Association (HOA) fees, property taxes, management fees, property insurance, replacement reserves, and insurance. For the rental prototype examined in this analysis, DRA assumes that the City of Tustin Affordability Gap and leveraged Financing Analysis Page 1 landlord pays all but certain tenant -paid utilities as an annual operating cost of the unit paid from rental income. For owner prototypes, DRA assumes the homebuyer pays all operating and maintenance costs for the home. Financing or mortgage obligations are the costs associated with the purchase or development of the housing unit itself. These costs occur when all or a portion of the development cost is financed. This cost is always an obligation of the landlord or owner. Supportable financing is deducted from the total development cost, less any owner equity or downpayment, to determine the gap between the supportable mortgage on the affordable units and the cost of developing those units. For the rental housing totype, the gap analysis calculates the difference between total development costs and the conventional mortgage supportable by net operating income from restricted rents. For owners, the gap is the difference between development costs and the supportable mortgage plus the buyer's down payment. Affordable housing costs for renters and owners are calculated based on California Redevelopment Law definitions and occupancy standards. Household income is adjusted based on an occupancy standard of one person per bedroom plus one. The aps for the owner prototypes "are summarized in Table 1. The gaps have been calculated for the following three income levels:. Income Limit Affordable Housing Cost 1. Very Low Income 501/6 of Area Median Income (AMI), adjusted 30% of 50% AMI for household size 2. Low Income 809/9 of AMI, adjusted for household size 30% of 70% AMI 3. Moderate Income 120% of AMI, adjusted for household size 35% of 110% AMI Depending upon the source of subsidy for ownership housing, the gaps may vary. For example, Federal HOME funds do not require deduction of a utility allowance in the calculation of affordable mortgage payment. However, under California Redevelopment Law, owner affordable housing expense is defined to include monthly utility costs. This increases the ownership gaps. The affordability gaps shown in Table 1 include utility allowance deductions. The gaps for the rental prototype, without non -local leveraged financing, are summarized in Table 2. The gaps have been calculated for the following three income levels: City of Tustin Affordability Gap and Leveraged Financing Analysis Page 2 Affordable Housing Income Limit Cost 1. Very Low Income 50% of Area Median Income (AMI), 30% of 50% AMI adjusted for household size 2. Low Income 80% of AMI, adjusted for household size 30% of 60% AMI 3. Moderate Income 1200/6 of AMI, adjusted for household size 30% of 110% AMI DRA produced; under separate cover, a comprehensive review of Federal, State, and private sources of funding that might be used to subsidize affordable rental and ownership housing in Tustin. For ownership housing, per unit mortgage assistance, as available, Te y reduces the gap on a dollar for dollar basis. For rental developments, the use of the Low Income Housing Tax Credit Program and/or tax-exempt bonds is more complicated, because of the formulas for calculating tax credits and the specific income targeting required. Therefore, for the rental prototype, we have examined the following leverage scenarios: 1. 9% Low Income Housing Tax Credits (Federal only)'; 2. 4% tax credits with tax-exempt bonds; and 3. 4% tax credits, tax-exempt bonds, and the Multifamily Housing Program (MHP) of the California Department of Housing and Community Development (HCD). The assumptions and finding are described in the following section. The sources and uses for each leveraged rents scenario are summarized in Table 3. Since Orange County was designated as a Difficult to Develop Area (DDA) by HUD in 2007, projects in the County are eligible for a 130% basis boost for the calculation of Federal tax credits but are not eligible for State tax credits. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 3 Source: David Paul Rosen & Associates City of Tustin Affordability Gap and Leveraged Financing Analysis Page 4 Table 1 Homeowner Per Unit Subsidy Requirements' City of Tustin 2008 Very low low Moderate Prototy/Unit Bedroom Count income= Income Income' Owner Prototype #1' Attached Townhome Two Bedroom $366,000 $322,400 $195,500 Three Bedroom $387,800 $339,400 $198,400 Four Bedroom $426,800 $374,600 $222,300, Age $393,500 $345,500 $205,400 Owner Prototype #226 Stacked Flat Condominium One Bedroom $258,600 $219,900 $107,100 Two Bedroom $259,000 $215,500 $88,600 Three $edroom $267,100 $218,800 $77,800 Four Bedroom $290,500 $238,300 $86,000 Average $268,800 $223,100 $89,900 Owner Prototype #37 High Density Condominium One Bedroom $407,500 $368,800 $256,000 Two Bedr000m $432,500 $389,000 $262,100 Three Bedroom $542,000 $493,700 $352,600 Four Bedroom $569,400 $517,200 $364,800 Average $487,900 $442,200 $308,900 Owner Prototype #48 Mixed Use, Ground Floor Retail One Bedroom $491,700 $453,000 $340,200 Two Bedr000m $537,400 $493,900 $366,900 Three Bedroom $595,000 $546,600 $405,600 Average $541,300 $497,800 5370,900 Source: David Paul Rosen & Associates City of Tustin Affordability Gap and Leveraged Financing Analysis Page 4 Notes to Table 1: ' Per unit subsidy requirements are calculated as per unit total development cost less affordable home purchase price, based on an occupancy standard of one person per bedroom plus one, per California Redevelopment Law. Affordable home purchase price is calculated based on monthly affordable housing expense, inclusive of mortgage principal and interest, property taxes and insurance, utilities and homeowners association (HOA) dues. Calculations are based on the following assumptions: 30 -year mortgage interest rate of 8 percent; average property tax rate of 1.20 percent; property insurance costs of $50 per month; HOA dues of $175 per month; and a utility allowance calculated based on County of Orange, Housing and Community Services Department utility allowance schedule, effective October 1, 2006. Very low income owner affordable housing is cost calculated as 30 percent of 50 percent of AMI, adjusted for household size. Average very low income affordable home purchase price is $70,764. s Low income owner affordable housing cost is calculated as 30 percent of 70 percent of AMI, adjusted for household size. Average low income affordable home purchase price is $116,457. 4 Moderate income owner affordable housing cost is calculated as 35 percent of 110 percent of AMI, adjusted for household size. Average moderate income affordable home purchase price is $249,723. S Owner Prototype 11 average unit size is 1,296 square feet. Average per unit development cost is $468,663. Per unit development costs are adjusted by unit size/bedroom count. E Owner Prototype $2 average unit size is 1,142 square feet. Average per unit development cost is $339,591. Per unit development costs are adjusted by unit size/bedroom count. Owner Prototype $3 average unit size Is 1,350 square feet. Average per unit development cost is $558,617. Per unit development costs are adjusted by unit size/bedroom count. Owner Prototype #r4 average unit size is 1,515 square feet. Average per unit development cost is $608,112. Per unit development costs are adjusted by unit size/bedroom count. City of Tustin Affordability Cap and Leveraged Financing Analysis Page 5 Table 2 Tenant Per Unit Subsidy Requirements' Rental Housing Prototype: Stacked Flat Apartments City of Tustin 2008 Unit Bedroom Count One Bedrooms Two Bedroom6 Three Bedroom' Four Bedroom' Average Renter Prototype Stacked Flat Apartments Very Low Low Moderate Income Income' Income $311,300 $294,600 $211,400 $348,000 $329,300 $235,600 $3.21,800 $301,000 $197,000 $402,000 $379,600 $174,800 $345,775 $326,125 $204,700 Source: David Paul Rosen & Associates. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 6 Notes to Table 2: ' Tenant per unit subsidy requirements are calculated as per unit total development cost less per unit tenant supported debt. Tenant supported debt is calculated based on tenant monthly operating income which equals: affordable monthly rent, inclusive of utilities, less a monthly per unit operating cost of $300, property taxes assumed at an average annual rate of 1.20 percent; and a 3 percent vacancy rate. Tenant supported debt calculations are based on a 30 -year mortgage interest rate of 8 percent and a debt coverage ratio of 1.25. Affordable monthly rents are based on household income, adjusted for household size assuming an occupancy standard of one person per bedroom plus one, per California Redevelopment Law. 2 Very low income renter affordable housing cost is calculated as 30 percent of 50 percent of AMI, adjusted for household size. Average very low income affordable monthly rent is $847. ' Low income renter affordable housing cost calculated as 30 percent of 60 percent of AMI, adjusted for household size. Average low income affordable monthly rent is $1,033. ' Moderate income renter affordable housing cost calculated as 30 percent of 110 percent of AMI, adjusted for household size. Average moderate income affordable monthly rent is $1,963. S One bedroom unit is 750 square feet. Per unit total development cost is $321,075. Two bedroom unit is 950 square feet. Per unit total development cost is $362,224. ' Three bedroom unit is 1,050 square feet. Per unit total development cost is $382,799. Four bedroom unit is 1,250 square feet. Per unit total development cost Is $423,947. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 7 Table 3 Average Per Unit Subsidy Requirements Rental Housing Prototype: Stacked Flat Apartments Leveraged Financing Scenarios City of 7iistin 2008 Levera&O Financing Scenarios 9% Tax Credits 4% Tax Credits, Tax -Exempt Bonds 4% Tax Credits, Tax -Exempt Bonds, Multi -Family Housing Program (MHP) Source: David Paul .Rosen & Associates. Renter Prototype Stacked Flat Apartments $57,000 $140,100 $109,600 City ofTustin Affordability Gap and Leveraged Financing Analysis Page 8 Appendix to Housing Element APPENDIX C AFFORDABLE HOUSING CAPITAL PLAN FY 2008-09 TO FY 2013-14 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 20052009 Appendix to Housing Element This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 29982009 - DAVID PAUL ROSEN & ASSOCIATES City of Tustin Comprehensive Affordable Housing Strategy Appendix E: Affordable Housing Capital Plan Prepared for: City of Tustin Submitted By: David Paul Rosen & Associates r..� k. al.ifornia Southern Califcrn-a David Rosen, Principal Nora Lake -Brown, Principal 1330 Broadway, Suite 937 3941 Hendrix St Oakland, CA 94612-2509 Irvine, CA 92614-6637 Phone: 510-451-2552 Phone: 949-559-5650 Fax: 510-451-2554 Fax: 949-559-5706 e-mail: David*DRAConsultants.com e-mail: Nora®DRAConsultants.com www.draconsultants.com www.draconsultants.com May 2, 2008 This page intentionally left blank. CITY OF TUSTIN GENERAL PLAN Appendix to Housing Element HOUSING ELEMENT 2008 Table of Contents PAGE 1.0 Introduction ......................................... 1 2.0 Affordable Housing Assistance Goals and Programs..... 1 2.1. Preservation of At -Risk Affordable Housing ....... 1 2.2 Single- and.Multi-Family Home Rehabilitation Program............................................ 2 2.3 ownership Multifamily New Construction ........... 2 2.4 Multifamily Rental New Construction/Acquisition and Rehabilitation ............................... 2 2.5 First -Time Homebuyer and/or Foreclosure Negotiated Purchase .................................. 2 2.6 Homeless Assistance and Supportive Services ...... 2 2.7 Tustin Legacy ownership Multifamily New Construction..................................... 3 2.8 Tustin Legacy Rental New Construction ............ 3 2.9 Administrative Support .......................... 3 City of Tustin Administrative Review Draft May 2, 2008 Comnrehensive Affordable Housing Strategy Page ii List of Tables Table Page 1. Six -Year Capital Plan Goals, City of Tustin Comprehensive Affordable Housing Strategy, FY 2008/09 to FY 2013/14 ................................. 4 City of Tustin Administrative Review Draft May 2, 2008 Comprehensive Affordable Housing Strategy Page iii Affordable Housing Capital Plan 1.0 Introduction DRA prepared a six-year capital plan showing anticipated expenditures of projected local revenues for affordable housing in Tustin over the six-year period from FY 2008/09 through FY 2013/14 based on the policy priorities established by the City and on per unit subsidy requirements derived from the affordability gap analysis. The policy recommendations developed by the City for the forthcoming Housing Element update provide guidelines for expenditures by renter/owner, family/senior/special needs and income targeting categories. The actual number of units that Tustin can assist will depend upon its success in securing non -local leveraged financing, including 9 percent tax credits and 4 percent tax credits with tax-exempt bonds. Table 1 presents the six-year capital plan goals for Tustin over the projection period. over the six-year period, the City/Agency is projected to have $19.27 million in Housing Set -Aside and CDBG Funds available to assist affordable housing. The Agency's operating costs related to its affordable housing 'activities are projected to equal $4.95 million over this time period, leaving $14.32 million for affordable housing and homeless assistance. The City's assistance goals total 1,094 housing units over the projection period, excluding the number of persons assisted under the Homeless Assistance and Supportive Services program. The programs and assistance goals listed in the capital plan are described in the sections below. 2.0 Affordable dousing Assistance Goals and Programs 2.1 Preservation of At -Risk Affordable Housing Rental Units The City of Tustin has identified the preservation of existing affordable housing units as one of the most cost- effective methods of maintaining the stock of affordable I` housing therefore a high-priority program for the City. City of Tustin Administrative Review Draft May 2, 2008 Affordable Housing Capital Plan Page 1 The City has identified 277 units of at -risk housing with expiring use restrictions within the six-year planning period, including 145 units of very low income housing and 132 units of low income housing. Given the relative weakness of economic conditions and the housing market currently, the City will proceed to negotiate the extension of affordability restrictions on these units in advance of the specific expiration dates for these units. The amount of assistance provided will be negotiated based on the specific economics of each development and the potential availability of leverage financing, such as tax- exempt bonds and 4W tax credits. The total amount of funds allocated to this program is $2,181,672. 2.2 Single- and Multi -Family Some Rehabilitation Program The City has identified single- and multifamily home rehabilitation loans and grants as another cost-effective method of extending the life of affordable housing in the community. The City will target single-family neighborhoods in the vicinity of the Town Center opportunity area as part of the Town Center revitalization effort, as well as multifamily units citywide. The City's goals under this program are to rehabilitate 162 units, including. 54 single- family units and 108 multifamily units. 2.3 ownership Multifamily New Construction The City also intends to assist ownership multifamily new construction. Per unit subsidy requirements by income level are derived from the gap analysis, assuming construction of new stacked flat condominiums (Owner Prototype #2), which is the least costly ownership housing type examined. The City proposes to spend approximately half of the funds allocated to new affordable housing construction to ownership housing, and half to rental, housing, in the amount of $4.36 million each. The City's goal is to build 18 new owner units, including 7 units affordable to very low income households. and 11 units affordable to low income households. 2.4 Multi -Family Rental New Construction In addition, the City will assist multi -family rental new construction. Per unit subsidy requirements by income level are derived from the gap analysis for the renter stacked flat prototype, assuming leverage from 4% tax credits and tax-exempt bonds. Additional leverage may be obtained if City of Tustin Administrative Review Draft May 2, 2008 Affordable Housing Capital Plan Page 2 the City is able to identify a project competitive for the 996 tax credit program. The City's goal is to assist 31 new construction rental units under this program, at a total subsidy cost of approximately $4.36 million. 2.5 First -Time Homebuyer and/or Foreclosure Negotiated Purchase The City's First -Time Homebuyer Program provides downpayment and second mortgage assistance to low and moderate income buyers to assist them to purchase an existing home in the City. The recent mortgage credit crises has resulted in increasing -foreclosure rates throughout many parts of California and the nation. The City has allocated $2.4 million to assist new first-time homebuyers in purchasing a home. This may include negotiated purchase of homes in foreclosure, which may represent a lower cost buying opportunity for first-time homebuyers. The City anticipates assisting 30 homebuyers with these funds. 2.6 Homeless Assistance and Supportive Services The City has allocated $60,000 in CDBG funds to continue its ( financial support of homeless assistance and supportive t. services in the City. The City's goal for this program is to assist 200 homeless individuals per year over the projection period. 2.7 Tustin Legacy ownership Nulti-Family New Construction The City's development agreements for Tustin Legacy are projected to create 323 new affordable multi -family ownership units in the City over the six-year projection period. This includes 130 units in TLCP and 193 units in the Villages of Columbus. The City anticipates the creation of 40 units affordable to very low income households, 116 units affordable to low income households, and 167 units affordable to moderate income households. The TLCP unit count represents projected Phase 1 development and the subsidy requirement is unknown at this time. The cost of maintaining the affordability of the TLCP units will be transferred to the Redevelopment Agency and the expense associated with maintaining the 45 -year covenants will be determined at the time residential development proceeds. There is no subsidy requirement for the affordable units in the Villages of Columbus. City of Tustin Administrative Review Draft May 2, 2008 Affordable Housing Capital Plan Page 3 2.8 Tustin Legacy Rental New Construction The City's development agreements for Tustin Legacy are projected to create 253 new affordable rental units, including 126 units affordable to very low income households, 64 units affordable to low income households, and 63 units affordable to moderate income households. The TLCP unit count represents projected Phase 1 development and the subsidy requirement is unknown at this time. The cost of maintaining the affordability of the TLCP units will be transferred to the Redevelopment Agency and the expense associated with maintaining the 55 -year covenants will be determined at the time residential development proceeds. 2.9 Administrative Support The Agency will provide administrative support to implement its affordable housing activities. The Agency projects operating expenses of $4.95 million over the six-year capital planning period. City of Tustin Administrative Review Draft May 2, 2008 Affordable Housing Capital Plan Page 4 1XI Mj I I now 092 Vaal a2 is t fit Igg • I If f j a In Is P. fit APPENDIX D PUBLIC PARTICIPATION MAILING LIST CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 29982009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 20082009 Veterans Service Dept. Dayle McIntosh Center Orange Coast Interfaith Shelter 4220 Lemon Street 13272 Garden Grove 1963 Wallace Street, Apt. A Riverside, CA 92501 Garden Grove, CA 92843 Costa Mesa, CA 92627 YMCA Assistance League of Tustin Families First 13821 Newport Avenue, #200 P.O. Box 86 12012 Magnolia Street Tustin, CA 92780 Tustin, CA 92780 Garden Grove, CA 92641-3346 Tustin Area Historical Society & Legal Aid Society of Orange County Community Services Program Museum 2101 N. Tustin Avenue 16842 Von Karman, Suite 425 395 El Camino Real Santa Ana, CA 92705 Irvine, CA 92714 Tustin, CA 92780 Ronald M. Griffith Probation Community Action Assoc. Mandan Center of Educational Therapy Acting President & CEO 1111 N. Main Street, #176 1 Osborn Century Housing Santa Ana, CA 92701 Irvine, CA 92604 1000 Corporate Pointe, Suite 200 Culver City, CA 90230 Helen Anderson Allen Baldwin Joan Basile Hunger Coalitions OC Community Housing Corp. Mary's Shelter 14452 Wildeve Lane 1833 E. 17th Street, Suite 207 17671 Anglin Lane Tustin, CA 92780 Santa Ana, CA 92701 Tustin, CA 92780 Diane Aust Doug Bistry Civic Center Barrio Tustin Area Council for Fine Arts O.C. Affordable Housing 980 W. 171h Street, #E P.O. Box 145 23861 El Toro Road, Suite 207 Santa Ana, CA 92706 Tustin, CA 92781 Lake Forest, CA 92640-4733 Vanessa Bruner Jerry Caminiti Patrick Carroll Learning for Life Disability Awareness Coalition Life Share 1211 East Dyer 3773 University Drive, #118 11421 Garden Grove Boulevard Santa Ana, CA 92705 Irvine, CA 92612 Garden Grove, CA 92643 Shirley Cohen Donna Core Community Action Partnership Feedback Foundation, Inc. Meals on Wheels of Orange County 1200 N. Knollwood Circle 1001 N. Tustin 12640 Knott Street Anaheim, CA 92801 Santa Ana, CA 92707 Garden Grove, CA 92841 Pat Davis John Drew Jennifer Feldstein Big Brothers & Sisters of OC Family Solutions Women Helping Women 14131 Yorba Street 203 N. Golden Circle Drive, #101 711 W. 17th Street, A-10 Tustin, CA 92780 Santa Ana, CA 92705 Costa Mesa, CA 92627 John Von Glahn Margot R. Carlson Suzanne Guthrie Family Service Association Assessment & Treatment Services Center Four H Clubs of Orange County 18001 Cowan, # c -d 1981 Orchard Road 1045 Arlington drive Irvine, CA 92714-6801 Newport Beach, CA 92660 Costa Mesa, CA 92626 CITY OF TUSTIN HOUSING ELEMENT Mary Hadley Info Line Orange County 2081 Business Center Drive, suite 130 Irvine, CA 92715 Elmer Hothus Christian Temporary Housing Facility 704 N. Glassell Street Orange, CA 92867 Becky Johnson Alliance for the Mentally Ill 621 S. "B" Street Tustin, CA 92780 Susan Knopick Children's Bureau of So. Calif. 50 S. Anaheim Boulevard Ananheim, CA 92805 Laura Archuleta, President Jamboree Housing Corp. 17701 Cowan Avenue, Suite 200 Irvine, CA 92614 Theresa Marji Legal Aid of Orange County 2101 N. Tustin Avenue Santa Ana, CA 92705 Easter Seal Society, Inc. 4321 Walnut #S11 Irvine, CA 92604 Jim Miller Shelter for the Homeless 15161Jackson Street Midway City, CA 92655-1432 Boys & Girls Club of Tustin 580 W. Sixth Street Tustin, CA 92780 Larry Haynes Mercy House Transitional Living Ctr P.O. Box 1905 Santa Ana, CA 92702 Warren Johnson Salvation Army 10200 Pioneer Road Tustin, CA 92780 Habitat for Humanity of Orange County 2200 S. Ritchey Street Santa Ana, CA 92705 Robyn Class Orange Children & Parents Together 3550 E. Chapman Avenue Orange, CA 92869 Elaine Lintner OCSPCA-Paws P.O. Box 6507 Huntington Beach, CA 92615 Human Options Second Step P.O. Box 53745 South Laguna, CA 92619 Sherry McCulley Legal Aid Society of Orange County 2101 N. Tustin Avenue Santa Ana, CA 92705 Lutheran Social Srvc. of Southern Calif. 2560 North Santiago Blvd. Orange, CA 92867 Denise Y. Cato Fair Housing Council of O.0 201 S. Broadway Santa Ana, CA 92701 Colin Henderson Friendship Shelter, Inc. P.O. Box 4252 Laguna Beach, CA 92652 Judy Johnson ESA/Corporate Office 23861 El Toro Road, Suite 207 Lake Forest, CA 92640-4733 JoAnn Ruden Tustin Public School Foundation 17411 Irvine Boulevard, #I Tustin, CA 92780 Doris La Magna The Villa Center, Inc. 910 North French Santa Ana, CA 92701 Marisa Charette, President & CEO Tustin Chamber of Commerce 399 El Camino Real Tustin, CA 92780 Brenda Martin Laurel House 13722 Fairmont Way Tustin, CA 92780 OC Council on Aging 1971 E. 4th Street #200 Santa Ana, CA 92705 Beverly Nestande Olive Crest Homes 2130 E. Fourth Street, Suite 200 Santa Ana, CA 92705 Barbara Resnick Western Dev. for Affordable Housing 112 E. Chapman Avenue Orange, CA 92867 Joyce Riley Jon Schlemmer Orange County Homeless Issues Task Learning Disabilities of Southern Calif. St. Vincent de Paul Center for Reconciliation Force P.O. Box 25772 180 S. Cypress Street 1770 N. Broadway Santa Ana, CA 92799 Orange, CA 92866 Santa Ana, CA 92706 Mary Atkinson Smith The Blind Children's Learning Center 18542-B Vanderlip Avenue Santa Ana, CA 92705 Sister Marie Therese Lestonnac Free Clinic 1215 E. Chapman Avenue Orange, CA 92869 Clyde Weinman Irvine Temporary Housing 6427 Oak Canyon Irvine, CA 92620 Randy Wenz Orange County Council 1211 E. Dyer Street Santa Ana, CA 92705 Carol Anne Williams Interval House P.O. Box 3356 Seal Beach, CA 90740 Hunter L. Johnson, President & CEO LINC Housing 110 Pine Street, Suite 500 Long Beach, CA 90802 Patrick McCabe, Project Manager William Lyon Homes, Inc. 4490 Von Karman Avenue Newport Beach, CA 92660 Steve Kabel John Laing Homes 895 Dove Street, Suite 200 Newport Beach, CA 92660 Glenn Hayes, Executive Director Neighborhood Housing Services of Orange County 198 W. Lincoln Ave., 2nd Floor Anaheim, CA 92805 Susan Stokes Turning Point Center for Families 2101 E. 4th Street, #150-B Santa Ana, CA 92705-3814 Lynne Tsuda Central Orange County YWCA 146 North Grand Street Orange, CA 92866 Karen Weisenberger Consumer Credit Counseling Service P.O. Box 11330 Santa Ana, CA 92711 Thomas Whaling Shelter for the Homeless 24621 Ridgewood Circle Lake Forest, CA 92630 Pilgrimage Family Therapy 23201 Mill Creek Road #220 Laguna Hills, CA 92653 William O'Connell, Executive Director Colette's Children's Home 17301 Beach Blvd., Suite 24 Huntington Beach, CA 92647 Marsha Santry, Community Manager Lennar Homes 25 Enterprise Aliso Viejo, CA 92656 Orange County Social Services Tustin Family Center c/o Steven Johsz, Senior A&E Project Mgr. Resources & Development Management 1152 E. Fruit Street, Bldg.1 Santa Ana, CA 92701 Maria I. Marquez Interim Division Manager Adult Mental Health Services 405 West Fifth Street, Suite 550 Santa Ana, CA 92701 Donald Taylor Veteran Charities of Orange County 201 S. Sullivan Street Santa Ana, CA 92704 Serving People in Need 151 Kalmus #H-2 Costa Mesa, CA 92626 Tim Wells Episcopal Service Alliance 310 W. Broadway Anaheim, CA 92869 The Eli Home, Inc. 1175 N. East Street Anaheim, CA 92805 OC Housing Providers Attn: Vickie Talley 25241 Paseo de Alicia #120 Laguna Hills, CA 92653 Rebecca F. Clark, President National Community Renaissance 9065 Haven Avenue, Suite 100 Rancho Cucamonga, CA 91730 Elizabeth Cobb, VP, Director of Development Tustin Legacy Community Partners c/o Shea Properties 130 Vantis, Suite 200 Aliso Viejo, CA 92656 Gina Martinez Orange County Congregation Community Organization (OCCCO) 310 W. Broadway Anaheim, CA 92805 Maury Ruano Mercy Housing 2240 Lincoln Avenue Anaheim, CA 92801 Randy Gibeaut Trinh LeCong, Executive Director BIA Orange County Chapter Community Housing Resources Affordable Housing Clearinghouse 17744 Sky Park Circle, #170 1411 North Broadway 23861 El Toro Road #401 Irvine, CA 92614 Santa Ana, CA 92706 Lake Forest, CA 92630 Bart G. Hess Jim Palmer, President Ezequiel Gutierrez Affordable Home Owners Alliance Orange County Rescue Mission Public Law Center 2 Park Plaza, Suite 100 1 Hope Drive 600 Civic Center Drive West Irvine, CA 92614-5904 Tustin, CA 92782 Santa Ana, CA 92701-4002 Homeless Issues Coordinator Karen Roper, Director Captain Lee Lescano County of Orange Orange County Housing/ Community The Salvation Army 10 Civic Center Plaza, 3rd Floor DevelopmentDepartment 10200 Pioneer Road Santa Ana, CA 92701 1770 Broadwaypment Tustin, CA 92780 Santa Ana, CA 92706 Maya Dunne, Asst. Vice President SJHS Foundation & Community Outreach 500 S. Main St., Suite 1000 Orange, CA 92868 Margie Wakeham Families Forward 9221 Irvine Irvine, CA 92618 Kennedy Commission Attn: Linda Tang 17701 Cowan Avenue, Suite 200 Irvine, CA 92614 Scott Larson, Executive Director HomeAir Orange County 17744 Sky Park Circle, Suite 170 Irvine, CA 92614 Joan B. Margol Orange Coast Interfaith Shelter 635 Vista Bonita Newport Beach, CA 92660 Affirmed Housing Group 13520 Evening Creek Dr. North, #360 San Diego, CA 92128 Cynthia Campbell Human Options, Inc. (DOVE Housing) PO Box 9376 Newport Beach, CA 92658 Sheri Barrios, Executive Director Orange Coast Interfaith Shelter 1963 Wallace Avenue Costa Mesa, CA 92627 Cesar Covarrubias Senior Project Manager The Kennedy Commission 17701 Cowan Ave., Suite 200 Irvine, CA 92614 David Levy Gerald W. Dingivan, President & CEO Lucy Dunn, President & CEO 14331 Browning #24 Southern California Presbyterian Homes Orange County Business Council Tustin, CA 92780 516 Burchett Street 2 Park Plaza, Suite 100 Glendale, CA 91203 Irvine, CA 92614 Appendix to Housing Element APPENDIX E REFERENCES Appendix to Housing Element This page intentionally left blank. Appendix to Housing Element REFERENCES A. Documents 1. 1990 Census Report. U.S. Department of Commerce, Bureau of the Census. 2. 2000 Census Report. U.S. Department of Commerce, Bureau of the Census. 3. Comprehensive Housing Affordability Strategy for Fiscal Years 2007-2008 to 2017-2018, David Paul Rosen & Associates (DRA). 4. Marine Corps Air Station (MCAS) Tustin Specific Plan/ Reuse Plan, Adopted February 2003, Amendments through June 2007. 5. California State Department of Finance, 2007. 6. Demographic Profile and Survey of Homeless Persons Seeking Services in Orange County. The Research Committee of the Orange County Homeless Issues Task Force, 1999. 7. Southern California Association of Governments, Regional Housing Needs Assessment, 2007. 8. City of Tustin, Zoning Ordinance. 9. City of Tustin, General Plan, as amended January 16, 2001. 10. Third Five -Year Implementation Plan for The Town Center and South Central Redevelopment Project Areas (FY 2005-06 to 2009-2010), Tustin Community Redevelopment Agency, December 2004. 11. Final Environmental Impact Statement/ Environmental Impact Report (EIS/EIR) for the Disposal and Reuse of MCAS -Tustin (Program EIS/EIR for MCAS -Tustin), January 16, 2001. 12. Response to Comments, Final Volume 2 and 3 of Final Environmental Impact Statement/ Environmental Impact Report (EIS/EIR) for the Disposal and Reuse of MCAS -Tustin. 13. City Council Staff Report, Appendix to Housing Element 14. State of California, Department of Housing and Community Development, Website. 15. Orange County Client Management Information System Year End Progress Report, Orange County Housing Partnership, December 2007 16. Orange County Department of Education, Division or School and Community Services, McKinney-Vento Homeless Education Assistance Act, 2006-07. B. Persons and Organizations Christine A. Shingleton, Assistant City Manager Tustin Community Redevelopment Agency (714) 573-3107 2. Elizabeth A. Binsack, Community Development Director Community Development Department, Tustin (714) 573-3031 3. Douglas C. Holland, City Attorney Woodruff, Spradlin & Smart (714) 564-2642 4. Jerry Craig, Redevelopment Program Manager Tustin Community Redevelopment Agency (714) 573-3121 5. Kimberly McAllen, Redevelopment Project Manager Tustin Community Redevelopment Agency (714) 573-3128 6. Justina Willkom, Senior- Principal Planner Community Development Department, Tustin (714)573-3115 7. Reina Kapadia, Associate Planner Community Development Department, Tustin (714) 573-3118 Appendix to Housing Element 8. Lieutenant Steve Lewis Tustin Police Department (714) 573-3271 9. David Paul Rosen & Associates (DRA) Nora Lake -Brown, Principal 3941 Hendrix St. Irvine, California 92614 10. Dawn Lee, Executive Director Orange County Partnership (714)288-4007 11. Robert Stiens Tustin Community Foundation (714) 777-4653 12. Karen Roper, Homeless Prevention Coordinator Orange County Housing and Community Services Agency (HCS) (714)480-2841 Housing Element TUSTIN TECHNICAL MEMORANDUM 2009 This page intentionally left blank. TABLE OF CONTENTS Section Page INTRODUCTION............................................................................................................................... 1 STATE LAW AND GENERAL PLAN GUIDELINES 1 SOURCES OF INFORMATION 6 SUMMARY OF HOUSING ISSUES, NEEDS, OPPORTUNITIES, AND CONSTRAINTS ....... 7 HOUSINGNEEDS ASSESSMENT................................................................................................... 9 POPULATION/ EMPLOYMENT TRENDS 9 HOUSEHOLD CHARACTERISTICS 14 HOUSING STOCK CHARACTERISTICS 31 ASSISTED HOUSING PRESERVATION ANALYSIS 40 CONSTRAINTS TO THE DEVELOPMENT, IMPROVEMENT AND MAINTENANCE OF HOUSING.................................................................................................5149 GOVERNMENTAL CONSTRAINTS 5149 MARKET CONSTRAINTS 73622 ENERGYCONSERVATION........................................................................................................7867 SUMMARY OF PREVIOUS HOUSING ELEMENT PROGRAMS..........................................8069 PROGRESS IN IMPLEMENTING THE 1989 GOALS AND OBJECTIVES 8069 REVIEW OF PAST PERFORMANCE 8170 APPENDICES: A. AFFORDABILITY GAP ANALYSIS B. REFERENCES C. MAJOR EMPLOYERS IN TUSTIN D. ORANGE COUNTY BUSINESS COUNCIL SCORECARD E. PRESER VATION ANAL YSIS CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM i 2009 LIST OF TABLES CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM ii 2009 Page TABLE HTM-1: Population Growth 2000-2007 City of Tustin, Surrounding Jurisdictions and Orange County 10 TABLE HTM- 2: Age Trends 1990 - 2000 11 TABLE HTM- 3: Race and Ethnicity: 1980, 1990, 2000 12 TABLE HTM- 4: Employment by Occupation 2000 13 TABLE HTM- 5: Employment by Industry 2000 14 TABLE HTM- 6: Household Type: 1990 - 2007 15 TABLE HTM- 7: Household Size 1990 Through 2007 15 TABLE HTM- 8: Households in Overcrowded Conditions 2006 17 TABLE HTM- 9: Median Household Income: Tustin and Surrounding Areas 2000 18 TABLE HTM-10: Household Income Distribution 19 TABLE HTM-11: Household Income Distribution by Household Tenure 20 Table HTM 11-A: Household Income Distribution AS PERCENTAGE OF AMI by Household Tenure 21 TABLE HTM-12: Households Overpaying for Shelter 2006 City of Tustin 23 TABLE HTM-13: Household Size Distribution City of Tustin 25 TABLE HTM-14: Households with Five or More Persons 25 TABLE HTM-15: Summary Of Homeless Accommodation Zoning Regulations 29 TABLE HTM-16: Emergency Shelter/Transitional Housing Facilities 2008 30 TABLE HTM-17: Housing Growth Trends 1990 - 2007 Tustin and Surrounding Areas 31 TABLE HTM-18: Tustin Residential Unit Mix 1990 - 2007 32 TABLE HTM-19: Vacancy rates 2000-2007 32 TABLE HTM- 20: Tenure 1990 and 2000 33 TABLE HTM- 21: Age of Housing Stock 34 CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM ii 2009 TABLE HTM- 22: Resale Price of Homes and Condominiums Tustin and Neighboring Jurisdictions March 2008 35 TABLE HTM- 23: Affordable Monthly Housing Cost 36 TABLE HTM- 24: Average Rental Rates 37 TABLE HTM- 25: Affordable Net Rents 38 TABLE HTM- 26:2006-2014 Housing Needs 40 TABLE HTM- 27: Assisted Units At Risk for Conversion 4342 TABLE HTM- 28: Assisted Housing Inventory 4443 TABLE HTM- 29: 2008 Fair Market Rents 4947 TABLE HTM- 30 Affordable Net Rents 4947 TABLE HTM- 31: Cost of Providing Rental Subsidy for Very Low Income Households 5048 TABLE HTM- 32: General Plan Residential Land Use Categories 5250 TABLE HTM- 33: Summary of Residential Zoning Regulations City of Tustin 5653 TABLE HTM- 34: Comparative Development Fee Summary 6860 TABLE HTM- 35: Summary Table Effectiveness of Housing Element Programs: 1998-2008 7970 TABLE HTM- 36: Effectiveness of Housing Element Programs 1998 2008 8172 TABLE HTM- 37: Progress Towards objectives 1998-2008 10998 CITY OF TUSTIN - HOUSING ELEMENT TECHNICAL MEMORANDUM iii 2009 This page intentionally left blank. CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM iv 2009 INTRODUCTION This memorandum is a reference document intended to provide background data that will serve as a partial basis for policies and programs in the Housing Element. In accordance with State law a significant amount of data is required in this memorandum. Where possible, the data has been summarized in graphic form (table, bar charts, and pie charts) for easy reference. The reader is urged to use the table of contents at the front of this document as a guide. Once the Housing Element has been completed, the Technical Memorandum will be incorporated therein. State law largely determines the content of this Technical Memorandum. Five sections follow the introduction. The Summary of Housing Issues, Conditions, Opportunities and Constraints provides an overview of the key issues facing the City, which are addressed by the Goals, policies and programs of the Housing Element. The Housing Needs Assessment section addresses housing needs. More specifically, it discusses how the population has grown and changed, how households are changing (i.e., size, composition), and how the housing supply is changing. This section also analyzes the potential loss of assisted lower income housing units in the City. The third section addresses governmental and non-governmental constraints, such as market condition, and natural environment, to housing development. The fourth section addresses energy conservation. Finally, the fifth section summarizes the housing issues, opportunities, and constraints that have emerged through background research and public meetings and which must be addressed in the Housing Element. STATE LAW AND GENERAL PLAN GUIDELINES The State of California provides very specific requirements and guidelines for preparing Housing Elements. This section describes those requirements and explains the relationship between this element and the rest of the General Plan. The State of California requires that each jurisdiction prepare and adopt a Housing Element. The State Requirements for Housing Elements are far stricter and more detailed than for any other General Plan Element. CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 1 2009 State Planning law requires local governments to review their housing elements as frequently as appropriate and to revise the elements as appropriate, not less than every five years. The fourth revision date for jurisdictions within the Southern California Association of Governments (SCAG) is June 30, 2008. The planning period for the Regional Housing Needs Assessment (RHNA) as prepared by SCAG, is from January 2006 to June 2014, an eight and one-half year period. The implementation period covered by this element is January 2006 to June 2014. By 2012, the City, along with other jurisdictions in the SCAG region, again will begin preparation for a revision of the housing element to cover the period from 2014-2019. Organization of the Housing Element Under the provisions of Section 65583 of the Government Code, the Housing Element shall generally consist of an identification and analysis of existing and projected housing needs and a statement of goals, policies, quantified objectives, and scheduled programs for the preservation, improvement, and development of housing. The Housing Element shall identify adequate sites for housing, including rental housing, factory -built housing, and mobile homes, and shall make adequate provision for the existing and projected needs of all economic segments of the community. More specifically, the Housing Element must meet the requirements outlined below. A. An assessment of housing needs and an inventory of resources and constraints relevant to meeting these needs. The assessment and inventory shall include the following: Analysis of population and employment trends and documentation of the locality's existing and projected housing needs for all income levels. These existing and projected needs shall include the locality's share of the regional housing needs in accordance with Section 65584. • Analysis and documentation of household characteristics, including level of payment compared to ability to pay, housing characteristics, including overcrowding, and housing stock condition. CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 2 2009 • An inventory of land suitable for residential development, including vacant sites and sites having potential for redevelopment, and an analysis of the relationship of zoning and public facilities and services to these sites. • Analysis of potential and actual governmental constraints upon the maintenance, improvement, or development of housing for all income levels, including land use controls, building codes and their enforcement, site improvements, fees and other exactions required of developers, and local processing and permit procedures. • Analysis of potential and actual non-governmental constraints upon the maintenance, improvement, development of housing for all income levels, including the availability of financing, the price of land, and the cost of construction. • Analysis of any special housing needs, such as those of the handicapped, elderly, large families, farmworkers, families with female heads of households, and families and persons in need of emergency shelter. • Analysis of opportunities for energy conservation with respect to residential development. B. A statement of the community's goals, quantified objectives, and policies relative to the maintenance, improvement, and development of housing. It is recognized that the total housing needs identified pursuant to Section 65583(a) may exceed available resources and the community's ability to satisfy this need within the content of the general plan requirements. Under these circumstances, the quantified objectives need not be identical to the identified existing housing needs, but should establish the maximum number of housing units that can be constructed, rehabilitated, and conserved over a five-year time frame. C. A program which sets forth a schedule of actions over the implementation period that the local government is undertaking or intends to undertake in order to implement the policies and achieve the goals and objectives of the housing element through CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 3 2009 the administration of land use development controls, provision of regulatory concessions and incentives, and the utilization of appropriate federal and state financing and subsidy programs when available. In order to make adequate provision for the housing needs of all economic segments of the community, the program will incorporate the following: • Identify adequate sites which will be made available through appropriate zoning and development standards and with public services and facilities needed to facilitate and encourage the development of a variety of types of housing, factory -built housing, mobile homes, emergency shelters and transitional housing in order to meet the community's housing goals. • Assist in the development of adequate housing to meet the needs of low- and moderate -income households. • Address and, where appropriate and legally possible, remove governmental constraints to the maintenance, improvement, and development of housing. • Conserve and improve the condition of the existing affordable housing stock. • Promote housing opportunities for all persons regardless of race, religion, sex, marital status, ancestry, national origin, or color. The program shall include an identification of the agencies and officials responsible for the implementation of the various actions and the means by which consistency will be achieved with other general plan elements and community goals. The local government shall make a diligent effort to achieve public participation of all economic segments of the community in the development of the housing element, and the program shall describe this effort. In addition, an amendment to housing element law (Chapter 1451, Statutes of 1989) requires all housing elements to include additional need analyses and programs to address the potential conversion of all Federal, State and locally assisted housing developments that are eligible to convert to market rate use during the next ten-year period. CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 4 2009 Such units are considered to be "at risk" of being lost as part of the affordable housing stock. Relationship to Other General Plan Elements The preparation of the City's Housing Element must conform to Section 65580 of the California Government Code. The Legislature has established a policy that the availability of housing in a suitable environment is of vital statewide importance, and a priority of the highest order. State policy requires local governments to address the housing needs of all economic segments, while considering the economic, environmental and fiscal factors and community goals set forth in the General Plan. While a city must consider housing needs for all economic segments, it must also maintain internal consistency among the various elements of the General Plan. Neither the Housing Element nor any other element may supersede any other required element of the Tustin General Plan. The Housing Element relates to other elements in a variety of ways. The Land Use Element directly relates to the Housing Element by designating areas of the City in which a variety of residential types and densities may exist. The Housing Element's relationship to the Conservation, Open Space, and Recreation Element is conditioned by the need to serve a growing population's recreational needs, especially in the areas of the City with the highest density. The Circulation Element attempts to provide an efficient and well- balanced circulation system. This system must be designed to accommodate allowed land uses, including residential uses, and the intensity of allowable uses must not exceed the ultimate capacity of the circulation system. The Safety Element relates to the Housing Element by designating areas that are deemed unsafe for development, such as the Alquist- Priolo Zones and floodplain. Similar to the Safety Element, the Noise Element relates to the Housing Element by addressing a health related issue area. CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 5 2009 Techniques for reducing noise often involve buffers between land uses to reduce noise. The Growth Management Element overlaps the issues raised in the Housing Element in its efforts to ensure that the planning, management, and implementation of traffic improvements and public facilities are adequate to meet the current and projected needs of Orange County. SOURCES OF INFORMATION A variety of sources were used to prepare this Technical Memorandum. The most recent source of population and housing counts is the State Department of Finance (DOF) population and housing estimates for January 2007. The population, household and employment statistics are taken from the 1990 and 2000 Census. More current estimates of population characteristics are provided by the Center for Demographic Research at California State University, Fullerton. In the absence of more recent data, extrapolations were made based upon 2000 Census data. The 2007 Southern California Association of Governments (SCAG) Regional Housing Needs Assessment (RHNA) provided information regarding existing needs and projections regarding future housing needs. Data regarding housing costs have been obtained from local newspapers, local developers, and financial institutions. Other data sources are listed in the Reference section of this document. CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 6 2009 SUMMARY OF HOUSING ISSUES, NEEDS, OPPORTUNITIES, AND CONSTRAINTS The following issues, needs, opportunities, and constraints have been identified in Tustin. ° Tenure. The City contains disproportionately large amounts of multi -family housing units when compared to nearby jurisdictions and the County overall. ° Historic Resources. Tustin features numerous historic homes that add character and charm to the City but may be in need of ongoing maintenance and rehabilitation. ° Home Ownership Affordability Gap. Ownership housing costs are increasingly beyond the reach of the City's lower - and moderate -income households. ° Housing Condition. Many owner- and renter -occupied units in the City need rehabilitation, including minor and major repairs. Landlords and owners of these units may need financial assistance in order to make necessary repairs. ° Units at Risk of Conversion to Market Rate. By State law, the City must document and develop programs to address affordable housing units in the City that are at risk of converting to market rate housing between 2008-2018. For the 2006-2014 planning period, the Regional Housing Needs Assessment indicates that there are 100 assisted units at risk of conversion to market rate housing. Large Households. Large households comprised approximately 15.2 percent of all Tustin households (owner and renter) in 2000. Large families and households are a population of concern due to both the difficulty of finding adequately sized housing units and the high costs associated with these larger units. ° Overcrowding. The average number of persons per unit in the City was 2.9 in 2007. The 2007 RHNA Housing Needs Assessment indicates that a total of 4,285, or 18%, of all households were suffering from overcrowding. CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 7 2009 Overcrowding has increased significantly since 1990 in both owner- and renter -occupied units. ° Rental Affordability Gap. Based upon a review of rental units advertised in the Classified section of the local newspapers, it is difficult to find apartments in the City with more than two bedrooms, and those that are available are beyond the price range of low-income households. Therefore, large families with low incomes (less than $26,000) would have difficulty finding affordable housing in Tustin. ° Housing Problems. According to the 2007 Regional Housing Needs Assessment, the City had 3,935 lower income (household income less than 80% of County median) households overpaying (paying more than 30% of their income) for housing. This represents about 16 percent of the City's households. ° Elderly. As the City's population ages, the number of elderly persons will increase. This underscores an increasing need to address the special housing needs of the elderly. ° Age of Housing Stock. Even though the City's housing stock is relatively young and in good condition, by year 2010, 68 percent of the City's housing stock will be over 30 years old - the age at which housing typically begins to require major repairs. CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 8 2009 HOUSING NEEDS ASSESSMENT Since the 1960s, the City's population has soared from about 2,000 persons to 74,218 in 2008. Thus, the vast majority of the City's housing stock has been constructed within the last 50 years. Unlike most of Orange County, where half of the housing stock consists of single- family detached homes, nearly two-thirds of Tustin's housing stock is multi -family or single-family attached (i.e., condominiums/ townhouses). Tustin also has a proportionately higher percentage of renters compared to Orange County as a whole. Over the last two decades, the City's population has been impacted by many of the same trends observed regionally: a substantial increase in minority populations, especially Latinos; an increase in the average size of households; and, a surge in housing costs. As the City continues to grow and change, its housing policies must be re-examined in light of these changes. This chapter examines the important demographic changes that have occurred in the City since 2000 that affect housing needs. The chapter includes four main sections: population/ employment trends, household characteristics, housing characteristics, and assisted housing preservation. The Population/ Employment Trends section analyzes how the population has grown and explores resident employment patterns. The Household Characteristics section looks at changes in household size and composition, examines income and overcrowding, and evaluates housing affordability and special housing needs groups. The Housing Stock Characteristics section examines changes in the housing stock, particularly the number of units, condition, and type. The fourth section concerning assisted housing preservation responds to State legislation that requires local jurisdictions to prepare an inventory and implement programs to promote the preservation and/or replacement of government -assisted lower- income housing. POPULATION/EMPLOYMENT TRENDS This section examines population growth, age characteristics, racial/ethnic composition, and employment characteristics of Tustin's population. CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 9 2009 Population Growth As shown in Table HTM-1, between 2000 and 2007 the City's population grew from 67,504 to 72,542, an increase of 7.5%. The City of Tustin's growth rate between 2000 and 2007 was slightly slower than the countywide growth rate but faster than most surrounding cities. Recent projections cited in the Comprehensive Affordable Housing Strategy 2008-2018, indicate that Tustin's population will increase by an annual rate of approximately 2.6% during this implementation period, bringing the total population to 86,621 by the year 2015. Table HTM-1 compares the City's growth rate between 2000 and 2007 with other Orange County cities and the County as a whole. A large percentage of Tustin's population growth can be attributed to annexations that have occurred since 1980. The remainder can be attributed to a variety of other factors, including shifts in family structures from smaller to larger families, redevelopment of existing developed areas, infill development, and new residential construction in East Tustin. Substantial population and housing growth will continue during this planning period with the continued development at Tustin Legacy (former Marine Corps Air Station [MCAS] Tustin). TABLE HTM-1 POPULATION GROWTH 2000-2007 CITY OF TUSTIN, SURROUNDING JURISDICTIONS AND ORANGE COUNTY jurisdiction 2000' 2007 z % Growth 2000-07 Tustin 67,504 72,542 7.5% Anaheim 328,014 345,556 5.3% Garden Grove 165,196 172,781 4.6% Irvine 143,072 202,079 41.2% Santa Ana 337,977 353,428 4.6% Orange County 2,846,289 3,100,313 8.9% 1 2000 U.S. Census z Department of Finance estimates, 2007 Population projections are shown in Table HTM-1a. According to Orange County Projections (OCP) 2006 data, the population in the City of Tustin is expected to increase by approximately 10 percent to 88,694 persons by the year 2025. CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 10 2009 Table HTM-1a Population Projection Source: lX Y 20% Age Characteristics Table HTM-2 shows the proportions of the City's population represented by age groups in 1990 and 2000. The table shows that the proportions of the population in each age group have remained fairly constant over time. 2010 2015 2020 2025 Percent Change (2010-2025) Tustin 80,728 86,621 88,245 88,694 10% Source: lX Y 20% Age Characteristics Table HTM-2 shows the proportions of the City's population represented by age groups in 1990 and 2000. The table shows that the proportions of the population in each age group have remained fairly constant over time. Race and Ethnicity The City's racial and ethnic composition has changed significantly since 1980. The trends experienced in the 1990's have continued through the early 20Ws, though at a less rapid rate. As shown in Table HTM-3, minority populations in the City have grown significantly. The Hispanic population has increased from about 20% of the total population in 1990 to about 34% in 2000. Asian/ Pacific CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 11 2009 TABLE HTM- 2 AGE TRENDS 1990 - 2000 CITY OF TUSTIN Age Group 1990 % Total 2000 % Total 0-4 4,464 8.8% 5,815 8.6% 5-14 5,916 11.7% 9,916 14.7% 15-24 9,127 18.0% 8,685 12.8% 25-34 12,254 24.2% 13,798 20.4% 35-54 11,898 23.5% 19,710 29.2% 55-64 3,187 6.3% 4,776 7.1% 65-74 2,292 4.5% 2,745 4.1% 75+ 1,551 3.1% 2,059 3.1% Total 50,689 100.0% 67,504 100.0% Sources: U.S Bureau of Census, 2000; Center for Demographic Research (CDR), 2001. Race and Ethnicity The City's racial and ethnic composition has changed significantly since 1980. The trends experienced in the 1990's have continued through the early 20Ws, though at a less rapid rate. As shown in Table HTM-3, minority populations in the City have grown significantly. The Hispanic population has increased from about 20% of the total population in 1990 to about 34% in 2000. Asian/ Pacific CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 11 2009 Islanders and Blacks comprised about 15.1 % and 2.6 % of the population in 2000, respectively. These shifts in racial and ethnic composition may have important implications in terms of household characteristics and income. For example, Hispanic households are typically larger than other households; therefore, an increase in the number of Hispanic households may indicate a need for larger housing units. Also, to the extent that minority populations tend to have lower incomes than their Caucasian counterparts, there may be a greater need for affordable housing for these groups. Total 36,119 100% 50,689 100% 67,504 100% 1 1980 Census 2 1990 Census 3 2000 Census } The Census contains a separate question related to whether the householder was of Spanish/ Hispanic "origin". Origin is defined as the ancestry, nationality group, lineage, or country in which the person's ancestors were born prior to their arrival to the United States. Persons of Spanish origin could be of any of the five racial categories. Center for Demographic Research, 2000. CDR reported the Hispanic population for 1998 as a distinct ethnic group. It also reported Asian and Pacific Islander as one group, and included American Indian within "Other" category. Employment According to 2000 Census data, the City of Tustin had 36,681 residents in the labor force, of which 34,906 (95.2%) were in the labor market. Of these, 79.3% were private wages and salary workers. Table HTM-4 shows the number of employees by occupation. In 2000, the largest occupational category was professional and related occupations, in which a total of 7,467 were employed. The CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 12 2009 TABLE HTM- 3 RACE AND ETHNICITY: 1980,1990, 2000 CITY OF TUSTIN Race and Ethnicity 1980 Population 1990 % Total Population % Total 2000 Population % Total 5 White 31,654 87.6% 37,127 73.2% 30,264 44.8% Black 957 2.6% 2,895 5.7% 1,785 2.6% American Indian 237 0.7% 274 0.5% N/A N/A Asian/Pacific Islander 1,683 4.7% 5,260 10.4% 10,1941 15.1% Other 1,588 4.4% 5,133 10.1% 2,151 3.2% Hispanic (3,085) (8.5%) (10,508) (20.7%) 23,110 34.2% Total 36,119 100% 50,689 100% 67,504 100% 1 1980 Census 2 1990 Census 3 2000 Census } The Census contains a separate question related to whether the householder was of Spanish/ Hispanic "origin". Origin is defined as the ancestry, nationality group, lineage, or country in which the person's ancestors were born prior to their arrival to the United States. Persons of Spanish origin could be of any of the five racial categories. Center for Demographic Research, 2000. CDR reported the Hispanic population for 1998 as a distinct ethnic group. It also reported Asian and Pacific Islander as one group, and included American Indian within "Other" category. Employment According to 2000 Census data, the City of Tustin had 36,681 residents in the labor force, of which 34,906 (95.2%) were in the labor market. Of these, 79.3% were private wages and salary workers. Table HTM-4 shows the number of employees by occupation. In 2000, the largest occupational category was professional and related occupations, in which a total of 7,467 were employed. The CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 12 2009 second largest category was the management, business, and financial operations occupations, employing 6,657. TABLE HTM- 4 EMPLOYMENT BY OCCUPATION 2000 CITY OF TUSTIN Occupational Category Number % Management, business, and financial operations occupations 6,657 19.1% Professional and related occupations 7,467 21.4% Healthcare support occupations 506 1.4% Protective service occupations 432 1.2% Food preparation and serving related occupations 1,502 4.3% Building and grounds cleaning and maintenance occupations 1,186 3.4% Personal care and service occupations 957 2.7% Sales and related occupations 4,278 12.3% Office and administrative support occupations 6,040 17.3% Farming, fishing, and forestry occupations 33 0.1% Construction and extraction occupations 1,222 3.5% Installation, maintenance, and repair occupations 735 2.1% Production occupations 2,689 7.7% Transportation and material moving occupations 1,202 3.4% Total 34,906 100.0% Source: 2000 Census In terms of industry, the manufacturing, and educational, health and social service sectors employed the largest number of persons with 5,980 (17.1%) and 5,081 (14.6%) employees, respectively. Table HTM- 5 is a summary of the number of employees by industry. Due to its favorable location, demographics, and business environment, Tustin is home to several well known employers. Appendix C lists major employers in the City of Tustin. The City's top ten employers include: Tustin Unified School District, AT&T, Ricoh Electronics, Inc., Rockwell Collins, Cherokee International, ADC Telecommunications, Balboa Instruments, Toshiba America Medical Systems, the City of Tustin, and Costco Wholesale. CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 13 2009 TABLE HTM- 5 EMPLOYMENT BY INDUSTRY 2000 CITY OF TUSTIN 9,571 Industry Number % Agriculture 774 1.9% Mining 4 .01% Construction 2,437 6.1% Manufacturing, non -durable goods 1,890 4.7% Manufacturing,durable goods 5,919 14.8% —Transportation and public utilities 1,174 2.9% Wholesale trade 3,645 9.1% Retail trade 6,851 17.1% Finance, insurance, and real estate 3,555 8.9% Services 9,571 23.9% Government 1,761 4.4% Self Employed 2,526 6.3% TOTAL 40,107 100.0% Source: OCP 2006 HOUSEHOLD CHARACTERISTICS This section addresses household composition, size, overcrowding, income, affordability, and special needs groups. Definitions The Census Bureau uses several terms with respect to housing which are important to understand. A housing unit is defined as a house, apartment, mobile home or trailer, group of rooms, or single room occupied or intended for occupancy as separate living quarters. A household is an occupied housing unit. Households are further broken down into family households and non family households. A family household is a household shared by two or more persons related by birth, marriage or adoption. A non -family household is one consisting of a single individual or unrelated persons living together. CITY OF TUSTIN - HOUSING ELEMENT TECHNICAL MEMORANDUM 14 2009 Household Composition According to the U.S. Census, the City of Tustin contained 23,831 households in 2000. California Department of Finance estimates show that the number of households grew to 24,787 in 2007, representing an increase of approximately 4%. TABLE HTM- 6 HOUSEHOLD TYPE: 1990 - 2007 CITY OF TUSTIN ' U.S. Dept. of Commerce, Bureau of the Census, 1990 Census. 2 U.S. Dept. of Commerce, Bureau of the Census, 2000 Census 3 Total populations based on Department of Finance estimates, January 2007 Table HTM-6 shows that 12,317, or about 67%, of the City's households were classified as family households in 1990. The percentage of households remained the same in 2000. Moreover, as shown in Table HTM-7, the average household size in Tustin has increased from 2.66 persons per household in 1990 to an estimated 2.82 persons per household in 2000 and 2.91 persons per household in 2007. This increase may be attributed to a variety of factors, including: more doubling -up, or sharing, of units in order to defray increased housing costs; and, an increase in the supply of larger units, especially new units in East Tustin and Tustin Legacy. TABLE HTM- 7 HOUSEHOLD SIZE 1990 THROUGH 2007 CITY OF TUSTIN Jurisdiction 1990 2000 2007 Tustin 2.66 2.82 2.91 Orange County 2.87 3.00 3.09 U.S. Dept. of Commerce, Bureau of the Census, 1990 Census Report. 2 U.S. Dept. of Commerce, Bureau of the Census, 2000 Census Report. 3 California Department of Finance (DOF), 2007 CITY OF TUSTIN - HOUSING ELEMENT TECHNICAL MEMORANDUM 15 2009 1990 2000 2 20073 Household Type No. of Households % of Total No. of Households % of Total No. of Households % of Total Family 12,317 67.2% 16,055 67.4% N/A N/A Non -Family 6,015 32.8% 7,776 32.6% N/A N/A Total 18,332 100% 23,831 100% 24,787 100% ' U.S. Dept. of Commerce, Bureau of the Census, 1990 Census. 2 U.S. Dept. of Commerce, Bureau of the Census, 2000 Census 3 Total populations based on Department of Finance estimates, January 2007 Table HTM-6 shows that 12,317, or about 67%, of the City's households were classified as family households in 1990. The percentage of households remained the same in 2000. Moreover, as shown in Table HTM-7, the average household size in Tustin has increased from 2.66 persons per household in 1990 to an estimated 2.82 persons per household in 2000 and 2.91 persons per household in 2007. This increase may be attributed to a variety of factors, including: more doubling -up, or sharing, of units in order to defray increased housing costs; and, an increase in the supply of larger units, especially new units in East Tustin and Tustin Legacy. TABLE HTM- 7 HOUSEHOLD SIZE 1990 THROUGH 2007 CITY OF TUSTIN Jurisdiction 1990 2000 2007 Tustin 2.66 2.82 2.91 Orange County 2.87 3.00 3.09 U.S. Dept. of Commerce, Bureau of the Census, 1990 Census Report. 2 U.S. Dept. of Commerce, Bureau of the Census, 2000 Census Report. 3 California Department of Finance (DOF), 2007 CITY OF TUSTIN - HOUSING ELEMENT TECHNICAL MEMORANDUM 15 2009 Overcrowding HUD defines overcrowding as more than one person per room, excluding bathrooms and kitchens. For example, a one -bedroom apartment with living room, kitchen, and bathroom would be considered overcrowded if more than two persons occupied it. The 2007 Regional Housing Needs Assessment (RHNA) prepared by the Southern California Association of Governments (SLAG) figures showed 4,285 (17 percent) households living in overcrowded conditions. Of the households living in such conditions, 81% were renters, of which 40% were Extremely -Low or Very -Low income households. Table HTM-8 illustrates the numbers of all Tustin households living in overcrowded conditions. According to the 2007 RHNA, the incidence of overcrowding in Tustin was high in 2006, at 4,285 households, or 18.0 percent of all households. Renter households had a significantly higher incidence of overcrowding than owner households: 28.9 percent of renter and 6.9 percent of owner households were overcrowded. Table HTM-8 shows the number and percentage of Tustin households by income categories that are overcrowded. It should be noted that there are no federal or California State legal standards for overcrowding. In a reasonable effort to allocate scarce financial resources for affordable housing, housing programs typically use occupancy standards, which allow for up to "two persons per bedroom plus one" (e.g., five persons in a two-bedroom unit). The California Health and Safety Code standard, applicable for housing receiving financial assistance from the Redevelopment Housing Set -Aside Fund, is one person per bedroom plus one (e.g., three persons in a two-bedroom unit). Overcrowding is often reflective of one of three conditions: l) either a family or household is living in too small a dwelling; 2) a family chooses to house extended family members (i.e., grandparents or grown children and their families living with parents, termed doubling); or 3) a family is renting living space to non -family members. CITY OF TUSTIN — HOUSING ELEMENT TECHNICAL MEMORANDUM 16 2009 IF_ Income Household income is an important determinant of housing affordability. While upper income households have more discretionary income to spend on housing, low and moderate income households are more limited in the range of housing they can afford. The presence of a large number of low and moderate income households in a region where housing costs are high is likely to result in many households paying more than they can afford for housing. According to the 2000 Census, the median household income for the City of Tustin was $55,985. Table HTM-9 compares median household and family incomes between the City of Tustin and nearby jurisdictions, counties, and the State of California. In 2000, the City's median household income was about 5% lower than the median household income for the County as a whole ($58,820). Table HTM-9 demonstrates that at $60,092, Tustin's 2000 median family income was also below the Orange County median ($64,611). This trend was consistent as well for median family income in the above- mentioned jurisdictions. TABLE HTM- 9 MEDIAN HOUSEHOLD INCOME: TUSTIN AND SURROUNDING AREAS 2000 jurisdiction Median Household Income Percent Above/Below County Median Median Family Income Percent Above/Below County Median Tustin $55,895 -5.2% $60,092 -7.5% Anaheim $47,122 -24.8% $49,969 -29.3% Garden Grove $47,754 -23.2% $49,697 -30.0% Irvine $72,057 18.4% $85,624 24.5% Santa Ana $43,412 -35.5% $41,050 -57.4% Orange County $58,820 --- $64,611 State of California $47,493 -23.8% $53,025 -10.9% Source: U.S. Department of Commerce, bureau of Census, 2000 As shown in Table HTM 10, an estimated 7.5 percent of Tustin's households had incomes of less than $15,000 in the year 2000. Another 18.9 percent had incomes of between $15,000 and $34,999. In addition, 38.9 percent had incomes between $35,000 and $74,999, and 34.7 percent had incomes of $75,000 or more. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 18 20082009 TABLE HTM-10 HOUSEHOLD INCOME DISTRIBUTION CITY OF TUSTIN Income flange # Households' % Households % Cumulative Less than $14,999 1,787 7.5% 7.5% $15,000 to $24,999 2,026 8.5% 16.0% $25,000 to $34,999 2,479 10.4% 26.4% $35,000 to $49,999 4,194 17.6% 44.0% $50,000 to $74,999 5,076 21.3% 65.3% $75,000 to $99,999 3,193 13.4% 78.7% More than $100,000 5,076 21.3% 100.0% TOTAL 23,831 100.0% Median Household Income, $55,985 City of Tustin Median Household Income, $58,820 Oran¢e Countv 1 Derived by applying the percentage of households by income level from Summary File 3, Table P-52 (total number of households shown as 23,853) to a total of 23,831 occupied households from Summary File 1, Table H-3 for consistency with other Census data on the number of households used in this report. SOURCE: 2000 U.S. Census; Comprehensive Affordable Housing Strategy, 2008-2018. Owner households had higher incomes than did renter households in 2000, as shown in HTM-11. Approximately 37 percent of the renter households earned less than $35,000 annually, compared to only 16 percent of owner households. Furthermore, 60.7 percent of renters earned less than $50,000 in 2000, compared to only 27 percent of owners. While a higher proportion of renter households (22.1 percent) than owner households (20.7 percent) earned between $50,000 and $74,999, only 17.2 percent of renter households had incomes of more than $75,000 annually, compared to 52.3 percent of owner households. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 19 200 009 1 Derived by applying the percentage of household tenure by household income from Summary File 3, Table HC 11 (total number of renter households shown as 11,993 and owner households as 11,845) to a total of 12,002 occupied renter and 11,829 occupied owner households from Summary File 1, Table H-3 for consistency with other Census data on the number of households used in this report. Sources: 2000 U.S. Census; Comprehensive Affordable Housing Strategy, 2008-2018. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 20 200 2009 TABLE HTM-11 HOUSEHOLD INCOME DISTRIBUTION BY HOUSEHOLD TENURE CITY OF TUSTIN 2000 Tenure/Income Range Number' Percent Cumulative % RENTER HOUSEHOLDS Less Than $10,000 720 6.0% 6.0% $10,000 to $19,999 1,140 9.5% 15.5% $20,000 to $34,999 2,568 21.4% 36.9% $35,000 to $49,999 2,857 23.8% 60.7% $50,000 to $74,999 2,653 22.1% 82.8% $75,000 to $99,999 1,308 10.9% 93.7% $100,000 or More 756 6.3% 100.0% Total Renters 12,002 100.00/0 OWNER HOUSEHOLDS Less Than $10,000 246 2.1% 2.1% $10,000 to $19,999 537 4.5% 6.6% $20,000 to $34,999 1,110 9.4% 16.0% $35,000 to $49,999 1,301 11.0% 27.0% $50,000 to $74,999 2,442 20.7% 47.7% $75,000 to $99,999 1,894 16.0% 63.7% $100,000 to $149,999 2,581 21.8% 85.5% $150,000 or More 1,718 14.5% 100.0% Total Owners 11,829 100.00/0 1 Derived by applying the percentage of household tenure by household income from Summary File 3, Table HC 11 (total number of renter households shown as 11,993 and owner households as 11,845) to a total of 12,002 occupied renter and 11,829 occupied owner households from Summary File 1, Table H-3 for consistency with other Census data on the number of households used in this report. Sources: 2000 U.S. Census; Comprehensive Affordable Housing Strategy, 2008-2018. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 20 200 2009 Table HTM-11-A shows Tustin's household income distribution as percentage of area median income (AMI) by household tenure in 2006, according to the 2007 SLAG RHNA. Owner households in Tustin continued to have higher incomes than renter households in 2006. While over half (52.4 percent) of Tustin's renter households earned 80 percent of Area Median Income (AMI) or below, only 22.4 percent of owner households fell into this income category. A majority of owner households (70.1 percent) and only 33.7 percent of renter households earned over 95 percent of AMI. TABLE HTM 11-A HOUSEHOLD INCOME DISTRIBUTION AS PERCENTAGE OF AMI BY HOUSEHOLD TENURE CITY OF TUSTIN 2006 Tenure/Income Range, Number Percent Cumulative % as percentage of AMI RENTER HOUSEHOLDS Below 30 percent AMI 1,585 13.2% 13.2% 30 - 50 percent AMI 1,910 16.0% 29.2% 50 - 80 percent AMI 2,780 23.2% 52.4% 80 - 95 percent AMI 1,670 13.9% 66.3% Over 95 percent AMI 4,040 33.7% 100.0% Total Renters 11,985 100.00/0 OWNER HOUSEHOLDS Below 30 percent AMI 525 4.4% 4.4% 30 - 50 percent AMI 760 6.4% 10.8% 50 - 80 percent AMI 1,370 11.6% 22.4% 80 - 95 percent AMI 885 7.5% 29.9% Over 95 percent AMI 8,315 70.1% 100.0% Total Owners 11,855 100.00/0 AMI = Area Median Income Source: Southern California Association of Governments, 2007 RHNA CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 21 200 2009 Housing Affordability The U. S. Department of Housing and Urban Development (HUD) defines the threshold of overpayment for housing as 30% or more of household income. That is, when households pay more than 30% of their income for housing, they have insufficient remaining funds for other necessities such as food, clothing, utilities and health care. HUD recognizes, however, that upper income households are generally capable of paying a larger proportion of their income for housing, and therefore estimates of housing overpayment generally focus on lower income groups'. The 2007 RHNA identifies housing overpayment for lower-income households based on income data from the 2000 Census. Lower- income households are those earning less than 80% of the County median income. Lower-income households include very -low-income (<50% of median) and low- income (51%-80% of median) groups. Table HTM-12 reflects SCAG's 2007 report, which estimates that 6,190 of Tustin households are overpaying for housing of which 3,935 or 64% are very low and low-income households. Among the overpaying lower income households, about 30% were extremely low income, 31% were very low income, and 39% were low-income households. While the extremely low income households are currently housed, they are in a precarious position, particularly those overpaying for housing in light of the current housing market, and could face the threat of homelessness. Table HTM-12 also distinguishes between owner and renter households overpaying for housing. This distinction is important because while homeowners may over -extend themselves financially to afford the option of home purchase, the owner maintains the option to sell at market rate; on the other hand, renters are limited to the rental market and are generally required to pay the rent established in that market. The table shows that among the lower ' Some agencies and organizations consider Moderate Income households to be overpaying when housing costs exceed 35 percent of gross income, with the maximum income representing 110% of the median county income. Under these assumptions, overpayment occurs in fewer households in the City of Tustin when compared to figures presented in this document that are based upon State and Federal standards. Source: Strategies for Planning and Development: California Affordable Housing Handbook, California Redevelopment Association, 2000. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 22 200 2009 income households in the City overpaying for housing, 2,660 or 68% were renters. TABLE HTM-12 HOUSEHOLDS OVERPAYING FOR SHELTER 2006 CITY OF TUSTIN Tenure Extreme Low Very Low Low Moderate & Above Total Overpay Total All Households Overpay Total Overpay Total Overpay Total Overpay Total Owner 340 525 350 760 585 1,370 1,835 9,200 3,110 11,855 Renter 855 1,585 865 1,910 940 2,780 420 5,710 3,080 11,985 Total 1,195 2,110 1,215 2,670 1 1,525 4,150 1 2,255 14,9101 6,190 1 23,840 Source: SC:AG KH -NA, 2(U6. Special Needs State Housing Law requires that the special needs of certain disadvantaged groups be addressed. The needs of the elderly, disabled, large families, female heads of household, the homeless and farm workers are important in relation to overall community health. These groups may maintain special needs related to housing construction and location. The Elderly: As noted previously (Table HTM-2), in 2000, 4,804 persons or 7.1 % of the total population in Tustin were 65 years of age or older. In addition, senior households represented 12.3 percent (2,256) of total households in Tustin. As noted earlier in Table HTM- 11, slightly more than one-quarter of this age group earns an annual income of less than $20,000, or about 36% of the area median income (AMI) for a household of two persons in 2000. Although the senior population may often be living in a single-family home too large for their needs, with little or no mortgage payment, selling the home and buying a smaller unit may be too expensive. Thus, this population needs housing that is both affordable and located in close proximity to public services and transportation. The Disabled: Physical handicaps can hinder access to housing units of traditional design as well as limit an individual's ability to earn an adequate income. According to the 2000 U.S. Census, a total of 7,610 persons between 16 and 65 years of age reported a disability. In addition, 1,795 persons over age 65 reported a disability in 2000. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 23 20032009 Disabled persons often require specially designed dwelling units to permit access not only within the dwelling unit, but also to and from the unit. Special modifications to permit free access are very important in maintaining independence and dignity. California Administrative Code Title 24 Requirements set forth access and adaptability requirements for the physically disabled. These regulations apply to public buildings such as motels, and require that ramp ways, door widths, restroom modifications, etc., be designed to enable free access to the handicapped. While such standards do not apply to new single-family residential construction, they do apply to new multi -family residential construction. Most existing housing units in Tustin have not been designed with consideration for these requirements of adaptability and access. The majority of housing units are either single-family or two-story apartments with no elevator access. The adaptability of units to meet the needs of disabled persons remains a challenge for Tustin and other communities. However, as additional housing units are provided in the Tustin Legacy area, accessibility is considered as part of a project's design as required by law. Additionally, as units in multiple -family areas are rehabilitated, units may be retrofitted to accommodate the handicapped. New construction may offer some relief because the mandatory requirements are evenly applied to all projects. According to the California Building Code, apartment projects of 20 units or more in size require accessibility and adaptability in at least three units, and condominiums projects in at least four units. The use of mixed development types and higher density limits at Tustin Legacy area will further require development of even more handicapped - accessible units. Large Families: Under Census guidelines, a family household containing five or more persons is considered a large family. Large family households generally require larger dwelling units with more bedrooms to meet their housing needs. But family households with five or more persons often face limitations in being below national poverty levels, and often experience difficulty securing adequate housing suitable for their expanded needs. Thus, large families typically suffer disproportionately from both overcrowding and inability to pay. Moreover, because multifamily rental units are typically smaller than single-family units, larger families who are CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 24 200 2009 also renters face more difficulties in securing housing large enough to accommodate all members of the household. Table HTM-13 s a summary of Tustin's household size. The 2000 data shows 15.2% of Tustin households had five or more persons residing in a unit. Table HTM-14 shows the number of households with five or more persons in Tustin according to the 2000 U.S. Census. There were 1,438 owner households with five or more persons, representing 12.2 percent of all owner households. Tustin also had 2,189 renter households with five or more persons, representing 18.2 percent of all renter households. Overall, large households comprised approximately 15.2 percent of all Tustin households in 2000. TABLE HTM-14 Households with Five or More Persons City of Tustin 2000 Number of % of Total Renter or Owner Households Households Owners 1,438 12.2% of Owner Households Renters 2,189 18.2% of Renter Households Total Households 3,627 15.2% of Total Households Source: Comprehensive Affordable Housing Strategy 2008 - 2018 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 25 200 2009 TABLE HTM-13 HOUSEHOLD SIZE DISTRIBUTION CITY OF TUSTIN 2000 Number of Household Size Households % of Total Households 1 Person 5,734 24.1% 2 Persons 7,262 30.5% 3 Persons 3,877 16.3% 4 Persons 3,331 14.0% 5 or more Persons 3,627 15.2% Total Households 23,831 100.0% Source: Comprehensive Affordable Housing Strategy 2008 - 2018. Table HTM-14 shows the number of households with five or more persons in Tustin according to the 2000 U.S. Census. There were 1,438 owner households with five or more persons, representing 12.2 percent of all owner households. Tustin also had 2,189 renter households with five or more persons, representing 18.2 percent of all renter households. Overall, large households comprised approximately 15.2 percent of all Tustin households in 2000. TABLE HTM-14 Households with Five or More Persons City of Tustin 2000 Number of % of Total Renter or Owner Households Households Owners 1,438 12.2% of Owner Households Renters 2,189 18.2% of Renter Households Total Households 3,627 15.2% of Total Households Source: Comprehensive Affordable Housing Strategy 2008 - 2018 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 25 200 2009 The primary need of large families is to provide enough rooms for each member of the family to avoid overcrowding. In 2000, 15 % of the City's housing units contained four or more bedrooms. Of owner - occupied housing units, 12.9% contained four or more bedrooms. Rental -occupied units accounted for 1.6% of units with four or more bedrooms. Taking into account that much of Tustin's housing stock consists of apartments, and that the majority of Tustin's large families are renters, this rising trend in large families suggests a need for more spacious apartment units to accommodate such families. Female -Headed Parent Households: Single -parent families tend to have low incomes, limiting their ability to find affordable housing. These families also have a large need for affordable child care. For these households, ideal housing is severely restricted. Due to financial constraints, the family is often not able to find housing that is close to needed services, schools, and public transportation. As of the 2000 U.S. Census there were 1,700 female -headed households with children under 18 living at home. These households represented 18 percent of all families with children under 18 in Tustin in 2000. The Homeless: Measuring the extent of the homeless population specifically in Tustin remains a challenge for community leaders. To complicate the challenge of meeting homeless persons' needs, the issue of homelessness is considered regional in nature. Nomadic tendencies of homeless persons make it difficult to assess the population accurately on a citywide basis; therefore, homelessness should be addressed on a countywide basis, in conjunction with cities and local non-profit organizations. The Orange County Housing and Community Services Department (HCS) defines homelessness as not having a permanent address, sleeping in places not meant for habitation, not having ample food and medical attention or a place to change clothes or bathe. Per this definition, HCS estimates there are nearly 35,000 homeless in the County. The County's homeless population is comprised of about 30 percent individuals and 70 percent families, including an estimated 16,300 homeless children. For those 35,000 homeless, there are only CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 26 200 2009 about 3,400 available beds, including 1,512 emergency shelter beds and 1,888 beds in transitional housing facilities. The homeless population is comprised of subgroups, which include: 1. The economic homeless who lack financial resources to pay rent; 2. The situational homeless who have suffered economic or personal trauma and find themselves in personal disorganization; and, 3. The chronic homeless who are unable to care for themselves due to chronic illness, disability or debilitating substance abuse. The City of Tustin's 2005-2010 Consolidated Plan states that, according to police reports and windshield surveys performed within the City of Tustin, most homeless persons migrate through Tustin to other parts of the County rather than stay for extended periods of time within the City. The City's Police Department estimates that there are 10-12 homeless persons residing in the City at any given time. Although there are no established areas where homeless persons congregate in the City, there are several homeless services facilities in the City. The Village of Hope was recently completed on five acres at the Tustin Legacy site. The Village of Hope will provide housing for a total of 192 homeless men, women and children. It includes dorm rooms, a child development center, playground, parent education center, vocational training classrooms, health care facility, donation warehouse, and support offices. There will also be a cafeteria with an outdoor dining area, and vegetable gardens. There are numerous factors that contribute to homelessness in Tustin and Orange County. The known causes of homelessness include unemployment, limited skills, and a breakdown in the family as a social and economic unit. Additionally, cutbacks in social service programs and the de -institutionalization of the mentally ill during the 1980s have contributed to the homeless population. A new trend, however, is emerging as a significant contributing element to homelessness: a fast-growing lack of affordable housing, which could exacerbate any of the above conditions, but may increasingly become a stand alone cause of homelessness. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 27 200 2009 Of the shelters in Tustin, the 45 -bed Sheepfold shelter provides shelter, food, clothing, job training, and job -referral services primarily to battered women and children. Guests are admitted on a first-come, first-served basis. Usually all beds are fully occupied. The shelter services a large area including many portions of Orange, Riverside, and San Bernardino Counties. Within the City of Tustin, there are a variety of Non -Profit Organizations (NPOs) that provide direct housing and related services to homeless persons. These include Village of Hope, an emergency/ transitional home; Sheepfold, a feeding program affiliated with the United Way; Families Forward, a homeless provider; Olive Crest, transitional homes and services for abused and neglected children, a and Laurel House, an emergency shelter and transitional housing provider for homeless youth in the City. A significant portion of the MCAS -Tustin is located within the City. The MCAS Tustin facility was identified by the U.S. Department of Defense for closure in July 1999. In accordance with the Base Closure Redevelopment and Homeless Assistance Act of 1994 (Redevelopment Act), the City of Tustin was formally recognized as the Local Redevelopment Authority (LRA) for the MCAS Tustin. The Redevelopment Act provides a process that aims to balance the needs of the homeless with other development interests in the communities directly affected by closure of the installation. The Act requires the LRA to prepare a reuse plan and Homeless Assistance Plan (HAP), which is submitted to the federal Department of Housing and Urban Development (HUD). HUD reviews and determines whether the documents balance the needs of the homeless in communities in the vicinity of the installation with the need for economic development. A Homeless Assistance Plan has been established for MCAS, Tustin that is consistent with the continuum of care model embodied in the Consolidated Plans for the Cities of Tustin and neighboring Irvine. The fundamental components of the continuum of care system to be implemented with the MCAS, Tustin Reuse Plan would: Provide emergency shelter beds and intake assessment ° Offer transitional housing and services CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 28 229882009 Provide opportunities for permanent affordable housing by the private sector. In the Tustin Legacy, the Local Redevelopment Agency owns sites and four homeless service providers including the Salvation Army, Orange Coast Interfaith Shelter, Families Forward, and Human Options have been approved and currently are operating 48 family units. The Orange County Rescue Mission operates a 192 -unit transitional/ emergency shelter (Village of Hope) and the Orange County Social Services Agency will operate a 90 beds facility for abused and neglected children and their family. Numerous other agencies provide shelter and other services to the homeless in the nearby cities of Santa Ana, Irvine, and Orange. The Orange County Homeless Issues Task Force, a non-profit homeless advocacy organization, maintains a list of these and other homeless services in Orange County. Table HTM-15 provides a summary of zoning regulations pertaining to emergency shelters, transitional, and supportive housing are designated as permitted uses within the City of Tustin. TABLE HTM-15 SUMMARY OF HOMELESS ACCOMMODATION ZONING REGULATIONS Housing Type Permitted/ Zoning Conditionally Permitted Transitional Home Permitted Planning Area 3 of MCAS Tustin Specific Plan Emergency Shelters Permitted Planning Area 3 of MCAS Tustin Specific Plan Supportive housing Permitted Planning Areas 1 and 3 of MCAS Tustin Specific Plan Community Care Facility for Permitted All residentially zoned six (6) or fewer properties Family care home, foster home, or group home for six Permitted All residentially zoned properties (6) or feweri 1 Includes congregate care facility, single room occupancy hotel, and children's intermediate care shelter Source: City of Tustin, WAS Tustin Specific Plan CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 29 200 2009 Table HTM-16 is a list of organizations in Tustin that provide homeless services. TABLE HTM-16 EMERGENCY SHELTER/TRANSITIONAL HOUSING FACILITIES 2008 CITY OF TUSTIN Facility Services Provided Sheepfold Provides shelter, food, clothing, job training, and job -referral services to women with children. Temporary housing for teenagers in crisis. The Laurel House facility also provides food, informal counseling, and access to medical care and clothing. St. Cecilia's Distributes food supply to needy populations. Red Hill Lutheran Operates emergency food program where a person can receive food supply 3 times a year. Collects food supplies and distributes the food to Tustin Presbyterian various organizations involved in providing homeless services. Aldergate Refers interested persons to Ecumenical Services Alliance in Santa Ana. Village of Hope 192 beds transitional home at the Village of Hope operated by the Orange County Rescue Mission 90 beds intermediate care shelter for abused Tustin Family Campus children and their parents operated by the Orange County Social Services Agency. Salvation Army Six (6) new transitional units at Tustin Field I perated by Salvation Army and Acquisition of 16 transitional units in Buena Park Salvation Army operated by Salvation Army. The City assisted in acquisition and contributed grant funds to acquire the units Fourteen (14) new transitional units at Columbus Families Forward' Grove to be operated by Families Forward, formerlyIrvine Temporary Housing in Irvine. Human Options Six (6) new transitional units at Columbus Grove operated by Human Options Orange Coast Interfaith Six (6) new transitional units at Columbus Grove Shelter operated by Orange Coast Interfaith Shelter. 1 Although these units are located in the City of Irvine, these units were negotiated as part of the base realignment/conveyance process which Tustin is the Local Redevelopment Agency. Source: City of Tustin, 2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 30 200 2009 HOUSING STOCK CHARACTERISTICS A housing unit is a dwelling intended for occupancy as separate living quarters. Single-family houses, apartments, condominiums, mobile homes, and single room occupancy (SRO) hotels are all types of housing units. This section examines housing unit growth, age, type, tenure (owner v. renter), and costs in Tustin. Housing Growth While Tustin has experienced significant growth in population and housing units since 1990, the number of housing units from 2000 to 2007 has decreased by a total of 24 units. This change can be attributed to the closure of MCAS Tustin and the loss of military housing units. The figure however has stayed almost the same, because the loss of these units has been offset by new construction in the early 2000's and the beginning of the redevelopment of MCAS Tustin for civilian uses, which includes the construction of over 4,000 new housing units. Table HTM-17 compares the growth in housing units in Tustin to nearby cities and the County as a whole. It should be noted that much of the City's housing unit growth is attributable to annexations that occurred during the 1980s and 1990s. TABLE HTM-17 HOUSING GROWTH TRENDS 1990 - 2007 TUSTIN AND SURROUNDING AREAS Number of Housing Units Percent Change jurisdiction 199012000 2007 J1990-00 2000-07 Tustin 19,300 25,501 25,477 32% -0.1% Anaheim 93,177 99,719 101,510 7% 1.8% Garden Grove 45,957 46,703 47,197 1.6% 1 % Irvine 42,221 53,711 74,936 27% 40% Santa Ana 75,000 74,588 75,375 -0.5% 1% County 875,072 1 969,484 1 1,024,692 1% 6% -Orange U.S. Department of Commerce, Bureau of the Census, 1990 Census Report 2 2000 Census Report. 3 State of California. Department of Finance, Revised Estimate, May 2007. Housing Unit Type Table HTM-18 demonstrates the mix of housing types in Tustin. The distribution of housing units by type has changed over this period, with single-family homes steadily increasing and multifamily housing steadily decreasing as a proportion of Tustin's housing units. In 2007, Tustin's housing stock is comprised of almost equal CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 31 200 2009 proportions of single-family homes and multifamily housing, making up 49.1 and 47.4 percent, respectively. Mobile homes make up the remaining 3.6 percent. The 2007 composition of housing units in the City includes approximately 34 percent single-family detached, 15 percent single-family attached, 15 percent multi -family (2-4 units), 36 percent multi -family (5+ units), and 4 percent mobile homes. Compared to Orange County as a whole, Tustin has a significantly higher proportion of multi -family housing. According to 2007 Department of Finance Estimates, the County contained approximately 63.4 percent single-family detached/ attached units and 33.2 percent multi -family units, where as Tustin contained 51.3 percent multi -family units. The overall rental vacancy rate for Tustin in the second quarter of 2007 was 4.6 percent, up slightly from 4.3 percent in the first quarter of 2007. Generally, a vacancy rate of 5 percent is considered to reflect a "tight" housing market. As shown in Table HTM-19, Department of Finance data for Tustin as of January 2007 show a vacancy rate of 2.71 percent for all housing types in Tustin (single- and multi -family, owner and rental). TABLE HTM-19 VACANCY RATES 2000-2007 CITY OF TUSTIN Housing Tenure 2000 2007 Total Occupied Units 23,831 24,787 Vacancv Rate 6.6% 2.71% Source: Comprehensive Affordable Housing Strategy 2008-2018. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 32 200 2009 TABLE HTM-18 TUSTIN RESIDENTIAL UNIT MIX 1990 - 2007 CITY OF TUSTIN Number of H using Units Percent Change Housing Type 1990 % 2000 % 2007 % 2000-2007 Single -Family Detached 5,351 27.7% 8,075 30.6% 8,697 34.1% 7.7% Single -Family Attached 2,530 13.1% 3,459 10.8% 3,807 14.9% 10.1% Multi -Family 2-4 units 3,089 16.0% 3,836 12.8% 3,110 12.2% -18.9% Multi -Family (5+ units) 7,678 39.5% 9,223 43.0% 8,955 35.1% % Mobile Homes 707 3.6% 908 2.9% 908 3.6% 0% Total 19,300 F 99.9%* 1 25,501 1 100.1%* 99.90/0 N/A Totals do not equal 100% due to rounding error. Source: California Department of Finance; Comprehensive Affordable Housing Strategy 2008-2018. The overall rental vacancy rate for Tustin in the second quarter of 2007 was 4.6 percent, up slightly from 4.3 percent in the first quarter of 2007. Generally, a vacancy rate of 5 percent is considered to reflect a "tight" housing market. As shown in Table HTM-19, Department of Finance data for Tustin as of January 2007 show a vacancy rate of 2.71 percent for all housing types in Tustin (single- and multi -family, owner and rental). TABLE HTM-19 VACANCY RATES 2000-2007 CITY OF TUSTIN Housing Tenure 2000 2007 Total Occupied Units 23,831 24,787 Vacancv Rate 6.6% 2.71% Source: Comprehensive Affordable Housing Strategy 2008-2018. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 32 200 2009 Housing Tenure The tenure (owner versus renter) distribution of a community's housing stock influences several aspects of the local housing market. Residential mobility is influenced by tenure, with ownership housing typically sustaining a much lower turnover rate than rental housing. Housing overpayment, while experienced by many households regardless of tenure, is far more prevalent among renters. Ownership and rental preferences are primarily related to household income, composition, and age of the householder. In 2000, 49.6% of the City's 23,831 occupied housing units were owner -occupied, with the remainder renter -occupied. Compared to the County as a whole, which had 61.4% owner -occupied units and 38.6% renter -occupied units, the City of Tustin had a relatively high proportion of renter -occupied units. This is significant because renters tend to have lower incomes than owners, and are more susceptible to housing cost increases. The tenure figures show a shift in the City of approximately 9% to more owner -occupied units from 1990 to 2000. Table HTM-20 is a summary of tenure in the City and the County. TABLE HTM- 20 TENURE 1990 AND 2000 CITY OF TUSTIN 1990 2000 Housing Tenure Number I Percent I Number Percent -City of Tustin 360,831 38.6% Total Occupied Units 827,066 100.0% Owner -Occupied 7,504 40.9% 11,829 49.6% Renter -Occupied 10,828 59.1% 12,002 50.4% Total Occupied Units 18,332 100.0% 23,831 100.0% Owner -Occupied 496,782 1 60.1% 1 574,456 61.4% Renter -Occupied 330,284 39.9% 360,831 38.6% Total Occupied Units 827,066 100.0% 935,287 100.0% Source: Comprehensive Affordable Housing Strategy 2008 - 2018. Age and Condition of Housing Stock Housing age is a factor for determining the need for rehabilitation. Without proper maintenance, housing units deteriorate over time. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 33 200 2009 Also, older houses may not be built to current housing standards for fire and earthquake safety. Table HTM-21 shows the distribution of housing units by year built in Tustin through 2007. Reflecting the conversion of land from agricultural to residential use and the construction of housing on the MCAS Tustin base during the 1960s and 1970s, 24.9 percent of Tustin's units were built during the 1960s and 24.5 percent were built during the 1970s. As a result, potential rehabilitation and continued maintenance may be required for these units that are over 30 years in age. The City's rapid population growth in the 1990s is reflected in the number of housing units built during that period, a total of 5,924 units representing 23.2 percent of Tustin's total housing stock. TABLE HTM- 21 AGE OF HOUSING STOCK CITY OF TUSTIN Time Period Units Built I Number of Units I % of Housing Stock 2001 to 2007 1,639 6.4% 1999 to 2000 590 2.3% 1995 to 1998 2,684 10.5% 1990 to 1994 3,240 12.7% 1980 to 1989 2,792 11.0% 1970 to 1979 6,238 24.5% 1960 to 1969 6,333 24.9% 1950 to 1959 1,285 5.0% 1940 to 1949 225 0.9% 1939 or earlier 451 1.8% Total 25,477 1000/0 Source: Comprehensive Affordable Housing Strategy 2008 - 2018 The overall City of Tustin housing stocks are generally in good conditions. According to the City's Code Enforcement staff and the Neighborhood Improvement Task Force (NITF) which comprised of staff from various city departments, less than ten (10) percent of the City housing stock is in need Of minor repairs. Only two (2) percent of the total housing units particularly existing four-plexes within the City's southwest neighborhood may be considered in need of substantial rehabilitation. To date the City has not identified any housing unit in need of replacement. The City of Tustin takes proactive approach toward housing conditions through the City's Housing Rehabilitation program, Code Enforcement program and the Neighborhood Improvement Task Force (NIFT) program.. Together, these programs allow the City to identify housing units in need of CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 34 200 2009 repair and provide needed assistance to maintain the City's housing stock in good conditions. Housing Costs Ownership Housing: Southern California, in line with the nation, is experiencing a significant decline in the volume of single-family and condominium sales, placing downward pressure on home prices. According to Dataquick, an on-line research firm, sales in October 2007 have dropped to their lowest level since measured by the firm in 1988, representing a 45% decline from the prior year. While the initial slow down in sales in 2006 was coming off the heightened pace of sales activity in 2004 and 2005 and has little impact on price, beginning in January 2007, Southern California prices had fallen 2 percent below the prior year's levels. As of October 2007, sales prices were 8 percent below the prior year, with approximately three- quarters of the Southland's zip codes evidencing a drop in sales prices. Sale price declines are most pronounced in the lower end of the market, with prices in the upper half of the market flat or modest increasing as potential sellers wait the marker out. Slow sales, flat appreciation, and subprime lending activity have all contributed to significant increases in foreclosures, with the number of mortgage default notices in Southern California the highest in ten years. Within Orange County, the number of single-family and condominium units sold declined 42 percent and dropped 8.2 percent in value during October 2007 compared to the prior year. As is evidenced in Table HTM-22, Tustin is experiencing the same trend with a significant drop in home price sales, especially in the areas of the city in the lower end of the housing market. The median resale home prices for zip codes in the City of Tustin ranged from $416,250 to $570,000. hi comparison, the median resale home prices for cities presented in Table HTM-22 ranged from $205,000 to $819,500. Overall, median resale home prices in Tustin were similar to those occurring throughout Orange County. TABLE HTM- 22 RESALE PRICE OF HOMES AND CONDOMINIUMS TUSTIN AND NEIGHBORING iURISDICTIONS MARCH 2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 35 200 2009 Median Home %Change city Zip Code Price -March 2008 from 2007 Tustin 92780 $416,250 -34.7% CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 35 200 2009 Tustin 92782 $570,000 -9.90/0 92801 $360,000 -35.7% 92802 $430,000 -22.4% 92804 $390,000 -31.5% Anaheim 92805 $350,000 -37.4% 92806 $445,500 -26.7% 92807 $500,000 -16.7% 92808 $637,500 32.1% 92840 $415,000 -27.2% 92841 $420,000 -25.0% Garden Grove 92843 $400,000 -28.1% 92844 $429,000 -2.5% 92845 $438,000 -24.2% 92602 $740,00 -1.3% 92603 $819,500 14.1% 92604 $561,818 -8.2% Irvine 92606 $670,000 21.8% , 92612 $422,500 -21.2% 92614 $470,000 -16.1% 92618 $496,250 -9.9% 92620 $740,000 4.2% 92865 $453,000 -31.1% 92866 $509,000 -15.9% Orange 92867 $490,000 -26.5% 92868 $362,500 -19.2% 92869 $520,000 -16.2% 92701 $205,000 -33.9% 92703 $358,750 -38.1% Santa Ana 92704 $298,500 -48.8% 92705 $710,000' 1.4% 92706 $433,000 -29.5% 92707 $330,000 -40.0% uata mciude all nome sales, new and resale, and condomuuums. 2 Includes Lemon/Cowan Heights Source: Orange County Register, April 6, 2008 According to the Comprehensive Affordable Strategy prepared by David Rosen and Associates for the City of Tustin, affordable monthly housing costs for Very Low Income households were ranging from $787 to $1,062, $1,102 to $1,478 for Low Income households, and $2,020 to $2,727 for Moderate Income households depending upon unit size. Table HTM-23 summarizes affordable monthly housing cost for the City of Tustin. TABLE HTM- 23 AFFORDABLE MONTHLY HOUSING COST' CITY OF TUSTIN 2008 Unit Size Very Low I Low Moderate CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 36 200 2009 No. of bedrooms 50% AMI 80% AMI 120% AMI 1 Bedroom $733 $890 $1,677 2 Bedroom $817 $994 $1,880 3 Bedroom $886 $1,083 $2,066 4 Bedroom $953 $1,166 $2,228 California Department of Housing and Community Development published 2007 low and median income limits. Owner affordable housing costs are calculated assuming an occupancy standard of one person per bedroom plus one and 30% of gross income spent on housing for low income households and 35% of gross income spent on housing for moderate income households. The Affordable Monthly Housing Cost includes the monthly mortgage payment, property taxes, property insurance, utilities and HOA dues. Source: Comprehensive Affordable Housing Strategy, 2008-2018. Rental Housing: According to Realfacts, the average rent for Tustin in 2007 was $1,528. Studio and one -bedroom rental units had monthly rents between $1,138 and $1,292. Two-bedroom rentals had monthly rents of $1,436 and above while three -or -more bedrooms had monthly rents in excess of $1,861. Table HTM-24 presents a summary of the rental rates. TH = Town house unit *Rental survey represents data only for large, investment grade rental properties. Smaller rental properties represent a large segment of the rental market and offer larger, more affordable units. Source: RealFacts; Comprehensive Affordable Housing Strategy 2008 - 2018. When a household (adjusted for family size) pays more than 30% of its gross income for housing, it is considered an overpayment. Based on HUD's figures on affordability, households in the Very Low- income category have affordable net rent of $733 for one bedroom units to $953 for a four-bedroom units. hi Tustin, the average rent for CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 37 200 2009 TABLE HTM- 24 AVERAGE RENTAL RATES 2007 CITY OF TUSTIN Number of Bedrooms Number of Average Square Units Footage Average Rent Studio 200 521 $1,138 1bd/lba 2,312 733 $1,292 2bd TH 194 1,074 $1,674 2bd/1ba 706 974 $1,436 2bd/2ba 1,885 1,024 $1,810 3bd TH 56 1,441 $1,861 3bd/2ba 216 1,173 $2,431 Total 5,903 894 $1,528 TH = Town house unit *Rental survey represents data only for large, investment grade rental properties. Smaller rental properties represent a large segment of the rental market and offer larger, more affordable units. Source: RealFacts; Comprehensive Affordable Housing Strategy 2008 - 2018. When a household (adjusted for family size) pays more than 30% of its gross income for housing, it is considered an overpayment. Based on HUD's figures on affordability, households in the Very Low- income category have affordable net rent of $733 for one bedroom units to $953 for a four-bedroom units. hi Tustin, the average rent for CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 37 200 2009 a one -bedroom unit is $1,292 to $2,431 for three-bedroom units. It is also important to note that many of the households in the Very -Low income category are large families, thus a one -bedroom unit at $1,292 would not only be in excess of what they could afford, but would also be inadequate in size. Households in the Low -Income category (51%-80% of County median) affordable net rental rates are $890 to $1,166 to per month for housing. The rental survey shows that only studio apartments are affordable to this group (see Table HTM-24). It is important to note, however, that the rental survey considered only large, investment-grade rental properties and did not report prices of smaller rental properties. According to City staff, smaller rental properties represent a large segment of the rental market and offer three-bedroom units that are affordable to low-income households. In summary, the preceding information suggests that, while rental housing is available in the City at rents that are affordable to all income groups, certain types of rental housing, such as single-family homes and condominium/ townhouses, are generally not affordable to the City's lower- income households. Perhaps most importantly, rental rates for units with two or more bedrooms are beyond the reach of the City's Very -Low and Low income households. This means that a Very -Low and Low income household consisting of three or more persons would have a difficult time finding affordable housing of adequate size. Table HTM-25 is an illustration of affordable net rents for 2008. TABLE HTM- 25 AFFORDABLE NET RENTS 2008' CITY OF TUSTIN Unit Size (No. of 5very Low I I Moderate (81 - bedrooms) (500% Low 51-Wlo 1200/4 1 Bedroom $733 $890 $1,677 2 Bedroom $817 $994 $1,880 3 Bedroom $886 $1,083 $2,066 4 Bedroom 1 $953 1 $1,166 1 $2,228 1 Based on HUD income limits, 2007. Source: Comprehensive Affordable Housing Strategy, 2008-2018. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 38 20082009 Share of Region's Housing Needs Section 65584 of the Government Code requires each locality's share of the existing and future housing needs to be determined by the appropriate council of governments. Each jurisdiction's allocation represents its fair share of the regional housing needs. The City of Tustin's current and projected housing needs are derived from the Regional Housing Needs Assessment (RHNA) prepared by the Southern California Association of Governments (SCAG). The components of the RHNA are divided between "existing needs" and future "construction needs." Existing needs were discussed earlier in the housing affordability section of this report. Construction needs are defined as the number of units that would have to be added to accommodate the forecasted growth in the number of households by July, 2014, as well as the number of units that would have to be added to compensate for anticipated demolitions and to achieve an "ideal" vacancy rate. Construction need includes all income groups (from very low to upper) and not just those households that require assistance. The total need figure is then distributed among the four income groups. The allocations of housing needs by income group are adjusted to avoid Lower -Income "impaction" - the over -concentration of Lower -Income households in a jurisdiction. SCAG's RHNA fair -share allocation for the 2006-2014 period is 2,381 units. The closure of the MCAS has presented the City of Tustin with a total of 947.7 acres available for residential re -use and development. Amongst other types of uses, the City plans to add a total of 4,049 housing units of mixed density and housing type throughout the area. The City of Tustin also created a Redevelopment Project Area for the MCAS -Tustin project. Based on State Redevelopment Law requirements, at least fifteen (15) percent of the units constructed within a Redevelopment Project Area must be affordable to Very Low, Low, and Moderate -income households. Accordingly, from the potential new units to be built on the MCAS site, the creation of a redevelopment project area would result in up to 495 units (243 units plus 192 transitional housing units) being allocated for Very Low-income housing and an additional 364 units be created for Low- and Moderate Income households. To meet its fair share of the region's housing needs during the 2006- 2014 planning period, the City's allocation for new construction CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 39 200 2009 housing units is 2,381 (refer to Table HTM-26). Of these, 21.5% must be affordable to Very Low income households (earning less than 50% of the County median), 17.2% must be affordable to Low -Income households (earning between 50% and 80% of the County median), 19.6% must be affordable to the Moderate -Income households (earning between 80% and 120% of County median income) and 41.6% must be affordable to Above -Moderate Income groups (earning over 120% of County median income). Table HTM-26 is a summary of housing need distribution for the 2006-2014 planning period. TABLE HTM- 26 2006-2014 HOUSING NEEDS CITY OF TUSTIN Income Category # of Units % of Total Very Low <50% County Median512 21.5% Low 50% - 80% County Median410 17.2% Moderate 80% -120% County Median468 19.6% Above Moderate 120% County Median991 41.6% Total 2,381 100% Source: SCAG RHNA, 2007 ASSISTED HOUSING PRESERVATION ANALYSIS State law (Chapter 1451, Statutes of 1989) requires all housing elements to include needs analyses and programs to address the potential conversion of Federal, State, and locally assisted housing developments ("units at risk") to market rate housing. For example, the federally subsidized loans provided to many low-income housing projects during the 1970s contained provisions that allow the owner to "prepay" the loans after 20 years, thereby removing the low- income subsidy from the project. As part of the "units at risk" analysis, the State requires that local jurisdictions perform the following tasks: ° Needs Analysis: to include an inventory of units at risk of converting to market rate housing for period covered by the Housing Element; an analysis of the potential for loss of CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 40 200 2009 affordability controls; a cost analysis of preserving or replacing the at -risk units; identification of agencies willing to acquire and manage these projects; and, identification of funding sources available to preserve or replace them. ° Quantified Objectives: A quantification of the units to be conserved, and explanation of any difference between the number of units at risk and the number to be conserved. ° Housing Programs: A description of programs to preserve the units at risk. Tustin has one four (4) projects that contains units "at risk" of converting to unrestricted market rate rents. Tustin Gardens is a 101 - unit Section 221(D) (4) project with a Section 8 contract for 100 units. In 2003, the owners of Tustin Gardens signed a five-year agreement with the U.S. Department of Housing and Urban Development (HUD). This agreement serves as a one-year Section 8 contract that automatically renews for four additional one-year terms, provided that funds are available. The current contract expires on July 13, 29882009. The project owners have indicated that they intend to renew the contract. Projects financed under the Section 221(D)(4) market rate program alone have no binding income use restrictions. The conversion of this project would have an adverse impact for the elderly who may face substantial rent increase or possible displacement. Table HTM-27 lists all of the Federal, State, and locally assisted low-income housing projects located in the City of Tustin due to expire by 2014. In addition to Tustin Gardens, there are at total of 177 units in three other bond financed projects (Rancho Alisal, Rancho Muderas, and Rancho Tierra) located in Tustin Ranch that are at risk of converting to market rate by 2012. Table HTM-28 is an inventory of all multi -family rental units assisted under federal, state, and/or local programs, including HUD programs, state and local bond programs, redevelopment programs, and local in -lieu fee, inclusionary, density bonus, or direct assistance programs. The inventory includes all units that are eligible to convert to market rate housing due to termination of subsidy contract, mortgage prepayment, or expiring use restrictions. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 41 200 2009 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 42 200 2009 z z 0 �i W O a 0 a H d z_ H F w O M d - 3 W W LL rn rn rn H IOy ,; w d Li w a+ 7 v t.7 a O ,?, >, W O a• O i .� i. i QO +R v V C q a y oo °° o0 00 o0 00 �cr,'� yoo OLA. y = z. 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The City has identified 277 units of at -risk housing (100 units at Tustin Gardens and 177 units at three project sites owned by the Inrine Company) with expiring use restrictions within the six-year planning period, including 145 units of very low income housing and 132 units of low income housing. Given the relative weakness of economic conditions and the housing market currently, the City will proceed to negotiate the extension of affordability restrictions on these units in advance of the specific expiration dates for these units. The amount of assistance provided will be negotiated based on the specific economics of each development and the potential availability of leverage financing, such as tax-exempt bonds and 4% tax credits. The total amount of funds allocated to this program is $2,181,672. Local Rental Subsidy. An option for preservation of at -risk units assisted by either project based Section 8 funds and/or bond financing would be a local rental subsidy to residents. This option could be used to retain the affordable status of the units, by providing assistance to residents when their affordable units convert to market rate. Rent subsidies using state, local (Redevelopment Agency, the use of HOME funds, or other funding sources) can be used to maintain the affordability of these at -risk units. Rent subsidies can be structured to mirror the Section 8 program. There are several funding sources that could be used to provide subsidies to residents. Under the project based Section 8 program, HUD pays owners the difference between what tenants can pay (defined as 30% of household income) and what HUD and the local Housing Authority estimate to be Fair Market Rent (FMR) on the unit. Section 8 assistance is only available to very low-income households earning less than 50% of the County median income. The 2007 HUD median income in Orange County is $78,700. The analysis also assumes the average very low-income household has an actual income of 50% of the County median income, adjusted for household size. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 48 20082009 The cost of providing subsidies for all 100 at -risk units with potential to expire during the planning period to maintain subsidized rents assumes that none of the at -risk units are preserved. The cost of providing subsidies is based on a comparison between fair market rents (FMR) and rents that are affordable for low and very low- income families. Affordability is defined as rents that do not exceed 30% of a household's monthly income. The 2008 FMRs for Orange County, which encompasses the City of Tustin, are shown in Table HTM-29. TABLE HTM- 29 2008 FAIR MARKET RENTS ORANGE COUNTY Efficiency* 1 1 Bedroom 1 2 Bedroom 1 3 Bedroom 1 4 Bedroom $1,103 1 $1,238 1 $1,485 1 $2,125 1 $2,441 *Efficiency = Studio Apartment - FMRs include utility costs Source: County of Orange Section 8 program Table HTM-30 indicates that affordable net rents for very low income households would be approximately $733 for a one bedroom unit, $817 for a two bedroom unit, and $886 for a three bedroom unit. To simplify the analysis, the one bedroom units at -risk in Tustin Gardens (100 one -bedroom units) are assumed to be senior unit and comprised of one-person households. TABLE HTM- 30 Affordable Net Rents City of Tustin 2008 Unit Size Very Low Low Moderate (No. of Bedrooms) 50% AMI 80% AMI 120% AMI 1 Bedroom $733 $890 $1,677 2 Bedrooms $817 $994 $1,880 3 Bedrooms $886 $1,083 $2,066 4 Bedrooms $953 $1,166 $2,228 ' U.S. Department of Housing and Urban Development published 2007 very low income limits, adjusted proportionally for 60% of percentage of AMI category. Gross rents are calculated assuming an occupancy standard of 1 person per bedroom plus one, consistent with California Redevelopment Law. Net rents are calculated assuming 30% of gross income spent on rent and then deducting the utility allowances. Source: Comprehensive Affordable Housing Strategy, 2008-2018 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 49 200 2009 The costs of providing a rental subsidy for all 100 at -risk units affordable to very low income households is shown in Table HTM-31 to be approximately $50,500 per month and $606,000 annually. Actual subsidies required would vary from this estimate, as some households earn below the assumed 50% of the County median and therefore require higher subsidies, while other households may be comprised of a different number of persons and therefore, the assumed baseline affordable rent may be higher or lower, depending on household size. TABLE HTM- 31 COST OF PROVIDING RENTAL SUBSIDY FOR VERY LOW INCOME HOUSEHOLDS 1 Affordable rent includes all utilities Source: County of Orange Section 8 Program; Comprehensive Affordable Housing Strategy 2008-2018. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 50 200 2009 Affordable No. Differe Total Unit FMR Rent 1 Units nce Monthly Annual 1 Bedroom $1,238 $733 0 $505 $50,500 $606,000 2 Bedroom $1,485 $817 0 $668 $0 $0 TOTAL $50,500 $606,000 1 Affordable rent includes all utilities Source: County of Orange Section 8 Program; Comprehensive Affordable Housing Strategy 2008-2018. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 50 200 2009 CONSTRAINTS TO THE DEVELOPMENT, IMPROVEMENT AND MAINTENANCE OF HOUSING This chapter examines the various constraints to housing development in Tustin. These include governmental constraints and non-governmental constraints GOVERNMENTAL CONSTRAINTS Sections 65583(a)(4) of the Government Code require the Housing Element to include an analysis of potential and actual governmental constraints upon the maintenance, improvement or development of housing for all income levels. The following analysis fulfills this requirement. Land Use Controls The State Planning and Zoning Law (Sec. 65860) requires consistency of the zoning ordinances with the General Plan. The existing Land Use Element of the General Plan establishes single-family, multi- family and planned residential districts. The zoning ordinance is consistent with the Land Use Element in that areas of the City are designated for Single -Family, Multi -Family, Specific Plan and Planned Community Districts. An analysis of residential development potential will be provided in the Housing Element. As shown in Table HTM-32, the City's existing General Plan allows a range of residential densities, from a range of 1 - 7 dwelling units per acre in the Low Density Residential designation up to 25 dwelling units per acre in the High Density Residential designation, which corresponds to the R-3 Multiple Family Residential District in the Zoning Code. Up to 10 units per net acre are permitted in the MHP (Mobile Home Park) District. The Zoning Code standards in the residential zones establish a front yard setback requirement of a range between 15 and 20 feet, the side yard setback requirement is 5 feet for interior side yards and 10 feet for corner lots, and the rear yard setback requirement ranges between 5 and 25 feet. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 51 X982009 TABLE HTM- 32 GENERAL PLAN RESIDENTIAL LAND USE CATEGORIES CITY OF TUSTIN maximum Effective Dwelling Unit per Density Designation Description Acreage Range Low Density Detached single-family dwellings 5.61 1-7 Residential Medium Multi -family dwellings including 15.0 8-15 Density duplex, condominiums, townhomes, Residential and apartments. High Density Multi -family dwellings including 21.53 15-25 Residential duplex, condominiums, townhomes, and a artments. Mobile Home Mobile homes 6.31 1-10 Park Planning Low, medium, and high-density Community residential developments. PD MCAS Tustin Low, medium, and medium high - Plan densityresidential developments. maximum density in dwelling units per acre is prescribed by individual Planned Community Documents. Effective dwelling units per acre for low, medium, and high density residential are 4.485, 11.834, and 17.39, respectively. Z Low Density (1-7 du/ac), Medium Density (8-15 du/ac), Medium High Density (16-25 du/ac) Source: City of Tustin General Plan, Land Use Element, 2001. According to the General Plan build -out table (Table LU -3) in the Land Use Element, a total of 29,623 dwelling units are anticipated within the City limits. The Department of Finance (DOF) reports 25,477 dwelling units have been constructed (as of January 2007) within the City. Affordability can be determined by permitted density of development. According to the State Housing and Community Development Department, affordability standards are as follow: Very -Low income - minimum 25 units per acre Low -Income- minimum of 18 units per acre Moderate income- minimum 8 units per acre CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 52 200 2009 Other alternative, as developed through the adoption of AB 2348, Statutes of 2004, allows jurisdiction to use "default" density standards of at least 30 dwelling units per acre as determined in the Government Code Section 65583.2 to accommodate the City's share of regional housing need for lower income households. The General Plan Land Use Element's policy plan provides goals for future land development within the City. These goals and policies are reflections of the direction and images the City seeks for the future. The goals and policies include: 1. Achieve balanced development; 2. Ensure that compatible and complementary development occurs; 3. Revitalize older commercial, industrial, and residential development; 4. Promote economic expansion and diversification; 5. Coordinate development with the provision of adequate public facilities and services; 6. Strengthen the development character and mixture of uses in the Old Town/ First Street area; and 7. Promote an integrated business park character for the Pacific Center East area. Some suggest that low-income housing could be developed in the absence of land use controls related to density. It is true that the reduction or absence of land area requirements per housing units would result in lower land costs per unit, if all factors were constant. However, an analysis of development costs shows that the value of the land is related to its potential yield. For example, an acre of land that was authorized for four (4) dwelling units will be priced at a lower value than an acre of land authorized for six (6) dwelling units. The same analogy holds for multifamily sites whereby the land costs are related directly to the potential yield in terms of unit density. Tustin has a high percentage of multi -family units where only 31.7% of the housing stock is devoted to single-family detached units and 64.80% to attached and multi -family units. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 53 200 2009 Current land use controls restrict development in single-family residential zones to one dwelling unit on parcels less than 10,000 square feet in the E-4 zone and parcels less than 7,200 square feet in the R-1 zone. However, the Planned Community District has authorized residential subdivisions with single-family lots of less than 5,000 square feet, which has significantly increased density potential to approximately 8-13 units per acre. In addition, the recent provision for Second Residential Unit adopted in 2003 allows a second unit to be constructed without discretionary permit approval provided that the site complies with criteria contained in the Zoning Ordinance. Within the multi -family district (R-3), a 35 -foot height limitation and maximum 65% lot coverage precludes the development of high-rise housing projects. In the interest of protecting adjoining single-family lot owners, multi -family structures above 20 feet in height require a conditional use permit when the structures are within 150 feet of single-family residentially zoned lots. There are approximately 20 properties with an R-3 zoning designation that abut Single Family Residential (R-1) zoning comprised of a variety of older apartment units and several parcels within Old Town Tustin that are adjacent to the First Street commercial zoning areas. While these height limits may place some restrictions on housing development, these limits are designed to maintain compatibility of land use intensity and are commonly used by local governments as a development tool to further this ideal. When designed properly with features such as limited windows and door openings along the walls facing single family zoned properties or using stepped building heights and design to minimize intrusion to the privacy of existing residents, Conditional Use Permits to allow such development projects have been granted. Although, it should be noted that this restriction would not impact areas where future residential development are targeted within this planning period, since the City's RHNA quantified objective identified preservation of existing units and nein construction units at Tustin Legacy where the 20 foot limitation would not be applicable. Conversely, within Planning Area D of the MCAS Tustin Specific Plan, a 150 foot height limitation up to 180 foot, if approved by the Community Development Director, would be allowed. This provides for layering products (i.e. stacked flats, podium style, etc.) with mixed use developments, thereby providing opportunities for the development of higher density residential products. Projects are also able to take advantage of the Planned Community District application process where special considerations are needed. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 54 200 2009 Parking requirements for residential uses are typically two (2) spaces per dwelling unit. In multiple family residential districts, additional one (1) space for each four (4) units is required for guest spaces. Carports for multi- family units are permitted which would reduce development costs in contracts to the provision of garages. Furthermore, affordable and senior housing development meeting the State Density Bonus Law would be eligible to use the reduced parking standards under the State Law. Table HTM-33 is a summary of the City's residential zoning regulations. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 55 200 2009 �A aj LO 00 � � oo � .o�o � �• o� y o� fY■ . ti � � � ..p o o c -i � o., o� o� . 'moi CIA Lr) CA .d O O O O� O O O O O Z r o `k `°k o � 0r,4 0 0 0 0 o CIA bD } x ti `) `) `n O O C) O C) O �, cn m m N m v p IZ- V OW LO VO p pp� O O m O o u) Lr)t� f� > N t\ crj crj c -i O t•j bt ti �� �� aj LO �O N N LO o� �o .r N 91'1 y N iz- N � e0 � O � � v � Q � � O b � � � o � zi o Q m w?� x Lr) azo bO o � � O Ol rl `n o Q o 0 0� � � � I o btx N o � �Q aQ �O N N LO Housing for Persons with DisabilitieslReasonable Accommodation The City of Tustin recognizes the importance of addressing the housing needs for persons with disabilities. The City's Zoning Code defines "family" as "an individual or two (2) or more persons living together as a single housekeeping unit in a dwelling unit." This definition accommodates unrelated persons living together in a dwelling unit, thus, the City's definition for a family would not constrain the development and rehabilitation for persons with disabilities. The City requires each development to comply with Title 24 of the California Code. All multi family complexes are required to provide accessible parking spaces based upon the prescribed State code requirements. For development of special needs housing such as housing for the disabled, senior housing, etc., parking requirements would be determined based upon parking demand analysis which by nature would allow for lower parking ratio in comparison to those required for multiple family residential units. In addition, a recent off-street parking ordinance adopted by the City allows for the reduction in parking due to American with Disabilities Act (ADA) upgrade. The Community Development Director is authorized to allow the reduction in the number of required parking spaces when the site is brought up to ADA standards. This new provision provides incentives to property owners to provide reasonable accommodation to the disabled. The City also requires new multifamily housing units and apartment conversions to condominiums to comply with State specifications pursuant to SB 520 for accommodation of the disabled. During the planning period, the City will conduct analysis, add procedures, and/or undertake appropriate amendments to existing standards in compliance with Chapter 11 of the California Building Code (requires portion of multi -unit dwellings to be accessible dwelling units) to ensure accommodation for the disabled. A Residential Care facility serving six (6) or fewer persons is a permitted use in all residential districts. The City's Zoning Ordinance does not contain maximum concentration requirements for residential care facility serving six (6) or fewer persons. The City recognizes the need of disabled persons to retrofit their residents to allow for mobility such as wheelchair ramps, widened doorways, grab bars, and access ramps. When these improvements meet development standards, only a building permit is required. However, any deviation from the development standards would require approval of either a Minor Adjustment or Variance. During the planning period, the City would amend the Zoning Code to remove governmental constraints to reasonable CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 58 200 2009 accommodation for the disabled. The amendment would provide a Minor Adjustment process in which deviation from the development standards associated with physical improvements to accommodate the disabled zvould be accommodated with administrative approval and without the need of a public hearing. Homeless Accommodation Homelessness is a statewide concern that affects many cities and counties. Throughout the country, homelessness has become an increasing problen-L Factors contributing to the rise in homeless include the general lack of housing affordable to Low and Moderate income persons, increases in the number of persons whose incomes fall below the poverty level, reductions in public subsidy to the poor, and the deinstitutionalization of the mentally ill. The issue of homelessness is considered regional in nature. Nomadic tendencies of homeless persons make it difficult to assess the population accurately. According to the County of Oranges 2004 Continuum of Care Application to HUD, the County has 10,500 homeless individuals of which an estimated 8,544 are unsheltered, 1,169 are in emergency shelters and 787 are in transitional shelters. An additional 24,499 are person in homeless families with children, with an estimated 23,211 unsheltered, 1,074 in transitional and 214 in emergency shelter facilities. Of these 35,000 homeless men, women, and children, 7,866 are identified as chronically homeless, 2,218 as severely mentally ill, 2,029 are suffering from HIV/AIDS, 6,988 are victims of domestic violence and 6,328 suffer from chronic substance abuse. Within the City of Tustin, Police reports and windshield surveys indicate a limited numbers of persons on the street and have shown that there are no established areas where homeless persons congregate in the City and that most persons migrate through Tustin to other areas within Orange County, rather than stay for extended periods of time. The Orange County Partnership, a non-profit organization whose purpose is to strengthen public and private agencies serving the homeless and those at risk of homelessness, reported that in 2007 there were 34 homeless persons identified Tustin as the city of last known permanent address. The McKinney-Vento Homeless Education Assistance Act reported 55 homeless children and youth enrolled in the Tustin Unified School District during 2006-07. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 59 200 2009 SB 2 defines the following: "Emergency Shelters' as housing for homeless purposes intended for occupancy of less than six (6) months, where no person is denied occupancy because of inability to pay. "Transitional housing" is rental housing for stays of at least six (6) months where the units are re -circulated to another person after a set period. "Supportive Housing" has no limit on the length of stay, provides supportive services and is occupied by low-income persons with disabilities and certain other disabled persons. SB 2 requires the city to identify the needs for emergency shelters in its Housing Element and to designate zoning districts adequate to accommodate the need. In those districts, emergency shelters must be allowed without a conditional use permit or other discretionary approvals. The city may apply certain written, objective development and management standards, such as number of beds and length of stay, if no zoning district exists that meets this standard. Alternatively, a community may require a conditional use permit for emergency shelters if they already have enough shelters to satisfy the need; or have entered into partnership agreement with up to two other communities to develop an emergency shelter that will meet their collective needs. Supportive and transitional housing must be treated as a residential use of property, subject to only to same restrictions that apply to other housing of the same type in that zone. With the closure of the Marine Corps Air Station (MCAS) Tustin, the City zvas provided with opportunity to address homeless accommodation. As part of the conveyance process and under the Base Closure Community Redevelopment and Homeless Assistance Act of 1994 (The "Redevelopment Act"), the City of Tustin as, the Local Redevelopment Agency (LRA) was required to consider the interest of the homeless in buildings and property on the base in preparing the Reuse Plan (MCAS Tustin Specific Plan/Reuse Plan). In developing the Reuse Plan, one criteria the Secretary of Housing and Urban Development (HUD) utilized to determine the adequacy of the Reuse Plan zuas zvhether the Plan considered the size and nature of the homeless population in the communities, in the vicinity of the installation, and availability of existing services in such communities to meet the needs of the homeless in such communities. At the time of the preparation of the Reuse Plan, it was estimated that there was a total net homeless need of 411 persons in the City of Tustin and City of Irvine (A portion of the MCAS Tustin is located within the City of Irvine jurisdiction). A large portion of this homeless need was identified as necessary to support emergency transitional housing for youth and CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 60 200 2009 individuals. The local homeless need as described in both Tustin and Irvine's Consolidated Plans also indicated a gap in the continuum of care in the areas of vocational and job training/educational opportunities, some emergency and transitional housing units for individuals and families, support services, and affordable ownership units. Accordingly, the Homeless Assistance Plan for MCAS Tustin was adopted to addresses the problem of homelessness by utilizing the continuum of care model promulgated by HUD for accommodating the needs of the homeless in a manner which is consistent with the Consolidated Plans approved for the cities of Tustin and Irvine. The fundamental components of the continuum of care system implemented with the MCAS Tustin Reuse Plan: Provides emergency shelter beds, Offers transitional housing and services which enable homeless persons to progress to self-sufficiency, and Provides opportunities for permanent affordable housing by the private sector. As a result, the adopted MCAS Tustin Specific Plan provided sites and designated land uses to accommodate tlx identified homeless needs. The following sites were set aside in implementing the homeless accommodation at Tustin Legacy (formerly MCAS Tustin): An approximate five (5) acre transitional/emergency shelter site was set-aside for accommodation of the homeless at MCAS Tustin, The City acquired a site from the Department of Navy, initially ground leased the site, and ultimately conveyed the site to Rescue Mission at no cost and facilitated the construction of Village of Hope, a 192 unit transitional housing facility, without the need of a Conditional Use Permit. The project has been completed. • A four (4) acre site was recommended by the City of Tustin and deeded directly by the Department of Navy at no cost to the Orange County Social Services Agency for the development of an abused and neglected child and emancipated youth facility with 90 beds capacity. The project is under undergoing construction. • A total of 50 transitional housing units were originally included in the Base Reuse Plan. Based on further negotiations with non-profit homeless providers, a total of 32 brand new transitional housing units have been constructed and conveyed at no cost to non-profit homeless providers at Tustin Legacy. These units are dispersed throughout the Tustin Legacy communihj to allow integration into CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 61 200 2009 the community. The sites are designated as residential sites and the units were constructed in conjunction with market rate units subject to only those restrictions that apply to other residential uses. The units are transparent since the units are developed identical to those of market rate units in terms of size, materials, locations, etc. No special or other entitlement applications were required for the creation of these units other than those typically required for development of residential units at Tustin Legacy. In addition to the homeless accommodation on-site at Tustin Legacy, the City also facilitated the purchase of a 16 unit transitional housing facility off- site for one of the homeless providers. The City subsidized the creation of these units through the use of housing set aside funds and Federal HUD Homeless Assistance funds. In addition to the homeless accommodation, the City also encourages support services to support the community of continuum of care model to end the cycle of homelessness and to provide participants with tools to once again become contributing members of the community as follows: Private sector opportunities are provided to create a balanced mix of housing types on the base. Through inclusionary Zoning standards in the WAS Tustin Specific Plan, a total of 8792 affordable units or 20.8 percent of total authorized units at Tustin Legacy are required to allow participants with opportunity to achieve self- sufficiency. Specific affordable housing requirements would be established at the time of development project approval to ensure conformity with the Housing Element of the City's General Plan and any provisions of California Community Redevelopment Law. The Navy will be transferring child care facility at the former WAS Tustin to the City of Tustin, which will provide opportunities for access for all to mainstream child care facilities, including early child care and education programs, Head Start, etc. • Adult education and training opportunities will be provided at the new site within the educational village proposed for conveyance to the South Orange County Community College District, 2 Includes 32 transitional housing units set aside for non-profit homeless providers. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 62 200 2009 Emergence Shelters, Transitional Housing, and Supportive Housing SB 2 defines "EmergencJ Shelters" as housing for homeless purposes intended for occupancy of less than six (6) months, where no person is denied occupancy because of inability to pay. In the City of Tustin emergency shelters are designated as permitted uses within Planning Area 3 of the MCAS Tustin Speck Plan. Planning area 3 is a five (5) acre site that had been a no cost conveyance to the Orange Counhl Rescue Mission for the development of emergency/transitional shelter that is known as Village of Hope. The City facilitated the development of the Orange Counhl Rescue Mission Village of Hope and waived permits fees as this was a public/private partnership. The project consists of 192 units available for emergency and transitional needs. As of May 26, 2009, the Orange County Rescue Mission Village of Hope is at 90% capacity, with a total of 169 homeless individuals consisting of homeless single men, single women, single women with children single men with children, and two parent families. The largest homeless sub -population on the Village of Hope campus is single women with children. The Orange Counht Rescue Mission Village of Hope priority is to serve Tustin homeless population prior to taking any other referrals from other cities or county. The Tustin Police Department actively refers individuals to the Village of Hope upon encounter. The Orange County Rescue Mission Village of also provides food service program of approximately 450 meals daily to the Armoru Based upon the available data obtained from the Orange County Partnership ey and McKinnVento Homeless Education Assistance Act approximately 34-55 individuals reported either Tustin as their last known permanent address or enrolled within the Tustin Unified School District. This means that the Ciht of Tustin is accommodating 137-158 homeless persons beyond its jurisdictional boundaries thereby accommodating a regional need. The City interviewed the Orange County Rescue Mission Village of Hope representative and the Cite was told that currently there are 20 vacant units and a minimum of five (5) percent vacanpj is available at any given time. The Orange County Rescue Mission Village of Hope also indicated that the shelter has met above and beyond the City's conservative estimate of 55 homeless persons and that the shelter could accommodate the year-round needs and seasonal fluctuation in the amount of available beds. Transitional housing is defined as rental housing ,for stays of at least six (6) months where the units are re -circulated to another person after a set period. This housing can take several forms, including roup housing or CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 63 200 2009 multi -family units, and often includes supportive services component to allow individuals to gain neeessanj life skills in support of independent living. The Tustin's zoning code accommodates transitional housing within several zoning districts depending on the project's physical structure: 1) transitional housing operated as a residential care facilih/ is permitted/conditionally permitted depending on the number of occupants in residential districts; and 2) transitional housing operated as rental apartments, it is permitted by as a multifamily residential uses where multifamily housing is permitted. Supportive housing is defined as permanent (no limit on the length of stay), provides supportive services and is occupied by low-income persons with disabilities and certain other disabled persons. Services may include assistance designed to meet the needs of the target population in retaining housing, career counseling, mental health treatment, and life skills. The Tustin's zoning code permits supportive housing as a residential use provided supportive services are ancillary to the primary use. Within the City of Tustin, the following emergency shelters, transitional, and supportive housing are designated as permitted uses as follows: TABLE HTM 33-A SUMMARY OF HOMELESS ACCOMMODATION ZONING REGULATIONS Housing Type Permitted/ Zoning Conditionally Permitted Transitional Home Permitted Planning Area 3 of MCASTustin Specific Plan Emergency Shelters Permitted Planning Area 3 of MCAS Tustin Specific Plan Planning Areas 1 and 3 of Supportive housing Permitted MCAS Tustin Specific Plan Community Care Facility Permitted All residentially zoned for six (6) or fewer properties Family care home, foster home, or group home for Permitted All residentially zoned six (6) or fewerl properties 1 Includes congregate care facility, single room occupancy hotel, and children's intermediate care shelter Source: City of Tustin, MCAS Tustin Specific Plan The following are transitional homes that have been provided in the City at Tustin Legacy. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 64 200 2009 1. A 192 beds transitional home at the Village of Hope to be operated by the Orange County Rescue Mission. 2. A 90 beds intermediate care shelter for abused children and their parents to be operated by the Orange County Social Services Agency. 3. Six (6) new units at Tustin Field I operated by Salvation Army. 4. Acquisition of 16 units in Buena Park operated by Salvation Army. The City assisted in acquisition and contributed grant funds to acquire the units. 5. Fourteen (14) new units at Columbus Grove operated by Families Forward, formerly Irvine Temporary Housing.3 6. Six (6) new units at Columbus Grove operated by Human Options. 7. Six (6) new units at Columbus Grove operated by Orange Coast Interfaith Shelter. With the exception of the transitional homes, these units are transparent and dispersed throughout the Tustin Legacy community consistent with the City's goals and policies to provide adequate supply of housing to meet the need for a variety of housing types and the diverse socio-economic and to promote the dispersion and integration of housing for all socio-economic throughout the community. Building Codes As required by State law, the City of Tustin has adopted the 2007 Construction Codes which includes "2007 California Building Code" and the "2007 California Mechanical Code" published by the International Conference of Building Officials. Other codes adopted by the City include the 2007 California Plumbing Code and the 2007 California Electrical Code. While the codes are intended to protect the public from unsafe conditions they result in an increase in the cost of housing in various ways. The codes establish specifications for building materials and incorporate seismic safety standards that add to construction costs. 3 Although these units are located in the City of Irvine, these units were negotiated as part of the base realignment/conveyance process in which Tustin is the Local Redevelopment Agency CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 65 200 2009 The technical details of construction, requirements for state licensed contractors to perform the work, plan check, permit processing and field inspections all contribute to the increased cost of housing. In general, in states and counties where building codes have not been adopted, the cost of housing is less than comparable housing costs in California. Where individuals are permitted to construct shelters to their own specifications and within the limits of their individual construction skills, there will be a much greater proportion of low- income housing available than in those areas which adopt and enforce uniform building codes. It is noted; however, in those areas that have not adopted and enforced building codes, the low-cost housing may resulted in the creation of substandard building conditions and practices conditions that threaten the health and safety of the residents. Unquestionably, building codes are a governmental constraint to the construction of low-income housing. The question to be resolved is the conflicting values between health and safety and low-cost shelter. Originally in 1988 and later revised in 1998, the City of Tustin adopted the State Historic Code as required by State law. The State Historic Code requires relaxation of Uniform Building Code requirements for historic structures. This will reduce rehabilitation costs and may encourage rehabilitation of housing units which have historic value and preserve much needed housing units in the Old Town Area. Site Improvements The restricted and limited ability to tax property in an amount equal to the cost of services and public improvements has shifted site improvement costs to the developer who passes them on to the housing consumer. The philosophy is expressed that no new development should impose a financial liability upon the existing community residents. The voters have expressed this conviction through the adoption of growth control measures and Proposition 13. An increased awareness of environmental amenities creates a public demand for improvements of not only the building site but of the surrounding environment which consists of drainage channels, landscaped parkways, arterial roads to serve the area, recreation facilities, preservation of open space, school facilities, and recreation amenities, all of which add to the cost of housing. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 66 200 2009 Site development standards and requirements in the City of Tustin include clearing and grading the land; dedication and improvement of public right-of-way to include paving, curbs and gutters, sidewalks, drainage, street trees, streetlights and fire hydrants. On- site improvements include the under grounding of cable TV, water, sewer, gas, telephone and electric utilities. Subdivisions and multi- family developments are required to provide landscaping, drainage, perimeter walls, covered parking, landscaping, irrigation systems, and to submit materials and project design for review to assure architectural compatibility. Applicable multi -family structures are required to provide housing and parking accommodations for the disabled pursuant to State law. The review process is used to facilitate the land use and development compatibility objectives of the City and provide developers the opportunity to explore project alternatives, which could decrease development costs in the long run by avoiding costly mistakes. In the development of subdivisions, the developer is required to dedicate and improve roadways to serve the area; to provide or improve area drainage channels; to extend water, sewer and other utilities to the site; to dedicate land or pay in -lieu fees for parks and open space for private use in multiple -family projects; and to dedicate land or pay in -lieu fees for public facilities such as schools and fire stations. Developers are allowed to construct private streets or to modify street standards to reduce construction costs, and this encourages and will encourage affordability of housing units in former MCAS Tustin. An additional cost of site development results from the installation of noise attenuation devices and materials as required by State law. Perimeter walls and/or berms are required for subdivisions to reduce the noise levels from external surface sources such as railroads, freeways and arterial highways for sites that are located within 65 dB (CNEL) Noise Levels. Some of these costs can be reduced by the use of housing set-aside funds in City Redevelopment areas and special State and Federal grant funds to produce low- and moderate -income housing units. Significant public facilities will be needed to accommodate the proposed housing development at the former WAS Tustin. According to the WAS Tustin Reuse Plan/ Specific Plan, water, sewer, storm drainage, electrical, natural gas, and telephone and cable backbone systems that serve future housing sites will need to be constructed. All housing sites will also have to pay their proportionate share for new backbone utilities, roads, and traffic CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 67 200 2009 improvements required in conjunction with development of the MCAS Tustin site and as mitigation for the adopted Final Joint Environmental Impact Statement/ Environmental Impact Report for the Disposal and Reuse of MCAS -Tustin and its Addendum. Fees and Exactions By law, the City's building and development fees are restricted to the costs of performing the services. The building and planning fee schedules of the City of Tustin were last revised in 2007. These fees still remain considerably below those of surrounding communities in the County. The City's fee schedule is provided in Table HTM-34, which illustrates the fees and exactions that may be assessed to a residential building development project in comparison to other nearby communities. These fees may be and have been waived by the City Council for projects where extraordinary benefits are derived such as low-income housing projects, but are typically required to offset City expenses. The fee schedule adopted by the City of Tustin has a minimal impact upon the cost of housing within the City. The argument can be made that the cost of inspecting and serving new developments exceeds the fees and revenues that are exacted for these developments. This is justified as a public service to protect the public health, safety and welfare of the future inhabitants and is partially borne by the general revenues of the City. Additional revenue sources are increasingly important since the passing of Proposition 13. Recognizing that housing for the elderly and low-income families is a community objective, the park land dedication ordinance provides the option to the Council to waive these fees for qualifying projects. The City might also consider exploring fast -tracking (preferential scheduling) or fee waivers for critical projects such as those providing affordable housing or housing which addresses special housing needs. In addition to the City's fees, a considerable amount of school fees are also applicable to residential projects. The respective school district should explore waiving all or portion of the school fees for affordable housing projects. The City, in conjunction with the preparation of the Housing Element also prepared the Affordable Gap and Leveraged Financing Analysis (Appendix A of the Housing Element Technical Memorandum attached hereto). The analysis evaluated development costs to arrive to per unit affordability gap CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 68 20082009 in producing affordable units. Table 12 and Table 13 of the analysis summarize average per unit development processing and impact fee of $29,277 to $37,530 per unit for owner housing prototype and $25,586 per unit for rental housing prototype (See Appendix A for specific development processing fees and analysis). In response to recent economic downturn, the City Council also adopted an economic stimulus program which allows the payment of specific development fees for construction of new residential units be deferred until either prior to final inspection or issuance of certificate of occupancy. This program would provide direct and indirect assistance to developer of residential units in that reduced on -hand cash flow were required at time of permit issuance. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 69 20052009 TABLE HTM- 34 COMPARATIVE DEVELOPMENT FEE SUMMARY r Fee Charges Planning Fees Tustin Anaheim Costa Mesa Orange Environmental Initial Determination $95 N/A N/A $230 Negative Declaration $125 N/A $910 $1,000 deposit EIR Processing -minor $2,500 $30,000 deposit Consultant cost $3,000 deposit EIR Processing -major $4,000 $9.46/lf +10% $54-$112/hr Planning $296.91/unit $9.46/lf $628.30/unit $20/unit General Plan Amendment $985 $181.10/hr $3,000 plus $3,000 deposit Surface Drainage Plan Check N/A ($12,000 deposit) $125/acre over 1 N/A Grading Plan Check 182/unit $98-119/hr acre $30/unit Zone Change $950 $181.10/hr $1,570 $1,000 deposit $10,700 deposit) Tentative Tract Map $3,000 deposit $181.10/hr $1,160 $3,000 deposit $10,000 deposit) Design Review $3,000 deposit $181.10/hr N/A $1,000 deposit $4,000 deposit) Planned Development Review N/A N/A $1,450 $1,000 deposit Conditional Use Permits and N/A $181.10/hr N/A N/A Variances $10,000 deposit) tngmeenng & Subdivision $400/unit $663/unit N/A $300/unit Final Tract Map $56/unit $709/lot ($35,450 deposit) $85/hr $1,500 - $30/unit Sewer Plan Check $31/unit $109-153/hr $3,000 deposit) N/A $500 Water Plan Check $106/unit $9.46/lf N/A $54-$112/hr Stormdrain Plan Check $296.91/unit $9.46/lf $628.30/unit $20/unit Street Plan Check $296.91 unit $9.46/lf $85/hr $20/unit Surface Drainage Plan Check N/A $98-119/hr N/A N/A Grading Plan Check 182/unit $98-119/hr $224/ unit $30/unit Canital Facilitieg & Cnnnectinng $2,165/unit N/A N/A N/A Water fixture units $400/unit $663/unit N/A $300/unit Sewer fixture units $600/unit $2,360/unit $3,000/unit $75/unit Sanitation District Annex N/A $582/unit N/A N/A Drainage (one time fee to ro r $984/unit $1,000/acre $600/unit Transportation Corridor $4,560- Zone A $3,246 -Zone B $2,725/unit $3,076/unit $3,176/unit Signal Assessment N/A $88 unit N/A N/A Park Facilities Fair Market Value of land $4,316.83/unit $10,875/unit $8,894 School Facilities Tustin, Santa Ana, and Irvine Unified School District $5,1245/unit ($2.63/SF) $7,012/unit $4,600/unit $5,125/unit Orange County Sanitation District $2,165/unit N/A N/A N/A t-omparanve rees Dasea on nypomencai w acre subarvision of W detactied units at permitted density of 5 dwelling units per acre. "Other fees' vary considerably by jurisdiction and are not included in this analysis Source: City of Tustin, 2008; Building Industry Association, 2006-07 Land Development Fee Survey for Orange CogM 2007. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 70 200 2009 Processing and Permit Procedures The City recognizes that the myriad of agencies and permit approvals required for a development results in a time-consuming and expensive process. The value of land increases when entitled for development and all necessary permits have been obtained for construction. State law establishes maximum time limits for project approvals and City policies provide for the minimum processing time necessary to comply with legal requirements and review procedures. A standard chart is provided with every design review application that outlines the procedures and requirements for project approvals. The Community Development Department serves as the coordinating agency to process development applications for the approval of other in-house departments such as Redevelopment Agency, Police, Public Works/ Engineering, and Parks and Recreation. These departments work together to simultaneously review projects to ensure a timely response to developers and act as the City's Design Review Committee. Pre -application conferences with the Community Development Department provide the developer with information related to standards and requirements applicable to the project. For the more complicated development projects in the Special Management Areas, Specific Plans provide a standard Design Review Process. Application packages are provided to developers and include the processing chart and copies of pertinent information such as street improvement construction standards, subdivision and landscape requirements that aid developers in the preparation of their plans. All projects are processed through plan review in the order of submission. Recognizing that profit margins are reduced and risks are increased by processing delays, the City has assigned priority to plan review and permit issuance for low-income housing projects. Additionally, contracts for plan check services provide additional staff to process projects in a timely fashion. If a complete application is submitted, plans are simultaneously reviewed by all Design Review Committee members and plan checking departments rather than one agency reviewing plans at a time. The Design Review application does not require a public hearing or Planning Commission approval. The Tustin City Code autliorizes the Community Development Director to approve development plans when findings can be made that the CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 71 200 2009 location, size, architectural features and general appearance of the proposed development will not impair the orderly and harmonious development of the area. In making such findings, the Zoning Code provides items to be considered such as height, bulk, setbacks, site planning, exterior materials and colors, relationship of the proposed structures with existing structures in the neighborhood, etc. This code provision affords the developers with tools to design their projects and thus increase certainttf of project's design review and approval. Project application which complies with all the development standards prescribed by the district in which the project is located would not be required to go through any other discretionary approval. For Tustin Legacy, developments under the Master Developer footprint (approximately 800 acres) would be subject to the Legacy Park Design Guidelines to ensure compatibility of products proposed by vertical builders. The design guidelines present minimum design criteria for the achievement of functional, quality, and attractive development expected at the Tustin Legacy. The guidelines are intended to complement the MCAS Tustin Specific Plan district regulations and to provide staff, builders, design professionals, and other users with a concise document when dealing with Design Review process to avoid ambiguity. Together the zoning code, Design Review provision, the Legacy Park Design Guidelines, and the "one-stop" processing system provide certainhj to developer seeking approval for the development of residential project. 444s pr-eeess alse provides for- a "one step" pr-eeessing system whde is i!eqttired by State law in an effort to aid the Elevelopment preeessi Additionally, for projects of significant benefit to the low-income community, such costs can be waived by the City Council or the use of redevelopment set-aside funds can further reduce or eliminate these costs for low- income projects. Workload Another governmental constraint is the number of staff and amount of staff time available for processing development projects. Since the workload is determined by outside forces (economy and market for housing), a shortage of staff time may occur during strong economic conditions which could lead to increased processing time for development projects. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 72 200 2009 MARKET CONSTRAINTS The availability of housing is affected by the interrelationships within the market place of price, income of buyer, and interest rates. The non-governmental constraints upon the maintenance, improvement or development of housing in the City relate primarily to low- and moderate -income families. High-income families have the option of selecting housing accommodations that meet their preferences. Since environmental amenities such as hillsides with views and beach access attract high-value developments, high- income families gravitate to the foothills and beach communities. The provision for housing opportunity to all income segments is further emphasized in the East Tustin development whereby single-family attached and detached homes are proposed for moderate- and higher -income households. Additionally, multi -family projects such as apartments and condominiums in East Tustin are provided for the low- and moderate -income groups. The same is true at the former MCAS Tustin area, where provisions for affordable units are required at an average of 20.9 percent. Market rate homes are proposed to accommodate diverse populations from all income levels. Financing Interest rates can have an impact on housing costs. Some mortgage financing is variable rate, which offers an initial lower interest rate than fixed financing. The ability of lending institutions to raise rates will cause existing households to overextend themselves financially, and create situations where high financing costs constrain the housing market. An additional obstacle for the first-time homebuyer is the minimum down -payment required by lending institutions. Even if Tustin homebuyers are able to provide a 3 percent down - payment and obtain a 6.00 percent 30 -year loan (loan rate for FHA or VA guaranteed loans for January 2008), monthly mortgage payments on median priced single-family detached homes in the City place such homes out of the reach of moderate and lower-income households in the City. At a 6.00 percent interest rate, monthly mortgage payments on median priced condominiums and townhouses can place such units out of reach of Tustin's low and very low income households (see Tables HTM-22 and HTM-23). CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 73 200 2009 The greatest impediment to homeownership, however, is credit worthiness. According to the Federal Housing Authority, lenders consider a persons debt -to -income ratio, cash available for down payment, and credit history, when determining a maximum loan amount. Many financial institutions are willing to significantly decrease down payment requirements and increase loan amounts to persons with good credit rating. Persons with poor credit ratings may be forced to accept a higher interest rate or a loan amount insufficient to purchase a house. Poor credit rating can be especially damaging to lower-income residents, who have fewer financial resources with which to qualify for a loan. The FHA is generally more flexible than conventional lenders in its qualifying guidelines and allows many residents to re-establish a good credit history. Under the Home Mortgage Disclosure Act (HMDA), lending institutions are required to report lending activity by census tract. Analysis of available HMDA reports does not indicate documented cases of underserved lower income census tracts in the City. Profit, Marketing and Overhead Developer profits in the last several years in Orange County generally comprise 6 to 9 percent of the selling price of single-family homes and slightly higher for attached units. According to the recently completed Comprehensive Affordable Housing Strategy4, minimum developer profit is estimated at 12 percent of development costs, based on input from developers and the Building Industry Association. This level is considered a baseline profit or "hurdle rate," representing the minimum necessary for the deal to proceed. In the past, due to high market demand in the communities like Tustin, developers were able to command for higher prices and realized greater margins for profit. As demand increased and prices rose, this profit margin was impacted by the escalating costs of land resulting from a shrinking supply of land. Marketing and overhead costs also add to the price of homes. The Comprehensive Affordable Strategy 2008 estimated developer overhead is at 4 percent of total development costs. 4 City of Tustin Comprehensive Affordable Housing Strategy, David Rosen and Associates, 2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 74 200 2009 The factor having the greatest impact on the price of land is location. To a lesser degree, the price of land is governed by supply, demand, yield, availability, cost of the infrastructure, and the readiness for development as related to governmental permits. Within the developed 'infill areas of the City, there is a scarcity of land available for residential development. The supply of land is largely limited to the former MCAS Tustin area since the East Tustin Specific Plan area has been built out. Land zoned for commercial or industrial development is not appropriate for residential development. The development of additional housing accommodations within the urbanized area will require the demolition and/or redevelopment of existing structures, since there are very few vacant lots remaining. The unavailability of land within the developed areas of the City and the price of land on the fringes are constraints adding to the cost of housing and pricing housing out of the reach of low- and moderate - income families. Cost of Construction One important market -related factor in the actual cost for new housing is construction costs. These costs are influenced by many factors such as the cost of labor, building materials, and site preparation. The Residential Cost Handbook, published by Marshall & Swift estimates that the cost of residential two-story wood frame construction averages $87.85 per square foot. Therefore, the costs attributed to construction alone for a typical 2,200 square foot, wood frame home would be at minimum $193,270. A reduction in amenities and quality of building materials (above a minimum acceptability for health, safety, and adequate performance) could result in lower sales prices. Additionally, pre -fabricated, factory built housing may provide for lower priced housing by reducing construction and labor costs. An additional factor related to construction costs is the number of units built at the same time. As the number of units developed increases, construction costs over the entire development are generally reduced, based on economies of scale. This reduction in costs is of particular benefit when density bonuses are utilized for the provision of affordable housing. Although it should be noted that CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 75 200 2009 the reduced costs are most attributed to a reduction in land costs; when that cost is spread on a per unit basis. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 76 200 2009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 77 200 2009 ENERGY CONSERVATION As the price of power continues to rise, households have through necessity been devoting more of the household income to energy cost. This condition has further eroded the affordability of housing. No relief is in sight, as one representative from Southern California Edison reinforced in a recent news article: "higher rates are necessary to assure reliable supplies of electricity in the years ahead." The City can explore possible partnership with utility companies to promote energy rebate programs. There are energy conservation measures the City of Tustin can promote and others that are mandated by State laws. The State of California has adopted energy conservation standards for residential building in Title 25 of the California Administrative Code. Title 25 applies to new residential construction or an addition to an existing housing unit. Active solar systems for water heating can be encouraged but they are still rather expensive and can only be used as a back-up to an electric or gas system. They are cost efficient in the long run but pose a short-term impact to affordable housing. Permits for solar systems can be approved ministerially by the Community Development Department, and permits are issued same-day whenever possible. The City can also explore and streamline permits processing for approved green building. Other energy conservation method could be contributed to site and building design. For an example through proper lots placement at subdivision and buildings' orientation, maximum day lighting can be achieved. Light- colored "cool roofs" can also be applied to new homes or roof replacement projects to promote energy savings. Water -efficient landscapes, efficient irrigation, and use of permeable paving materials also would contribute to energy saving. This can be achieved through updates to the City's landscape and irrigation guidelines. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 78 20082009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 79 200 2009 SUMMARY OF PREVIOUS HOUSING ELEMENT PROGRAMS To develop appropriate programs to address the housing issues identified in this Housing Element Update, the City of Tustin has reviewed the housing programs adopted as part of its 2002 Housing Element, and evaluated the effectiveness of these programs in delivering housing services. By reviewing the progress in implementation of the adopted programs, the effectiveness of the last element, and the continued appropriateness of these identified programs, a comprehensive housing program strategy has been developed. The following section reviews the progress in implementation of the programs, the effectiveness of the 2002 Element to date, and the continued appropriateness of the identified programs. The results of the analysis provided the basis for developing the comprehensive housing program strategy for the future planning period, as well as goals for the planning period in progress. PROGRESS IN IMPLEMENTING THE 1999 GOALS AND OBJECTIVES Table HTM-35 presents a comparison of the quantified objectives of the previous element and actual achievements since 1998. Table HTM-35 contains a list of projects by program area during the 1998- 2008 period. The 1999 SCAG Regional Housing Allocation Model indicated a new construction need in Tustin by 2005 of 3,298 units, of which 694 units were for very low income households, 489 for low income, 778 for moderate income and 1,337 upper income. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 80 200 2009 TABLE HTM- 35 SUMMARY TABLE EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS: 1998-2008 New Construction Rehab/Preservation Housing Assistance Income Group Goal Actual Goal' Actual Goal' Actual Very -Low 694 472 183 3951 Low 489 192 162 64 Moderate 778 1070 23 115 Above Moderate 1337 2555 Total 3298 4289 801 368 2729 4130 i Although goals were not allocated to specific income group, the City attempted to utilize RHNA percentages to fulfill RHNA objectives. Source: The City of Tustin, Housing Element, 2002; Effectiveness of Housing Element Programs, 2008. REVIEW OF PAST PERFORMANCE State law establishes a five-year cycle regulating housing element updates. In compliance with the SLAG cycle, the Tustin Housing Element was updated in 1989 at which time it was found to be in compliance with State law, and was updated again in 1994. In 1997, the City of Tustin initiated a comprehensive General Plan update, and the Housing Element was again updated to accommodate the MCAS Reuse Plan and to ensure consistency with other General Plan Elements, as well as to address recent changes in State law. These amendments were adopted on January 16, 2001. In 2002, the City once again updated its Housing Element and was certified by The State's Housing and Community Development Department in compliance with State's Law. Review of Past Housing Element Objectives Tables HTM-36 and HTM-37 summarize the performance of the 2002 Element's goals and objectives. Table HTM-36 provides program by program review of the previous Housing Element, containing a discussion on the effectiveness and continued appropriateness of each program. The time period covered in this analysis is January 1, 1998 to June 30, 2008. The Orange County Business Council prepared a 2007 Workforce Housing Scorecard for Orange County. The Scorecard examines the state of housing in Orange County as it pertains to affordability, CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 81 20082009 population, and housing unit supply numbers, as well as the relationship between job and housing units. Based upon analysis, the City of Tustin ranked no. 2 in total job growth and no. 3 in the housing as a percentage of total Orange County housing units. Appendix D of this Technical Memorandum provides a complete 2007 Workforce Scorecard for Orange County. The following discussion is a brief highlight of the progress, effectiveness and appropriateness of the past Housing Element Objectives. 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Tustin Family Campus (Orange County Social Services Agency) - 90 beds s 54 units at Heritage Place and 201 units at Monarch Village 6 182 density bonuses granted to Lennar at Villages of Columbus 7 Temporarily suspended. 8 Program suspended. 9 Includes: Tustin Field I - 78 units; Tustin Field II - 40 units; Arborwalk -10 units; Cambridge Lane 36 units; Camden Place - 37 units; Clarendon - 42 units 10 Includes: Orange County Rescue Mission -192 units; OCSSA Tustin Family Campus - 90 units; Human Option - 6 units; Orange Coast Interfaith - 6 units; Salvation Army - 6 units; Irvine Temporary Housing -14 units; and Salvation Army (acquired by Tustin for units in Buena Park) -16 units. Sources: (1) Effectiveness of Housing Programs 1998-2008, City of Tustin; (2) Five Year Implementation Plan for the Town Center and South Central Redevelopment Project Areas for Fiscal Years 2005-2006 to 2009-2010 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 112 200 2009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 113 200 2009 APPENDIX A AFFORDABILITY GAP ANALYSIS CITY OF TUSTIN TECHNICAL MEMORANDUM HOUSING ELEMENT This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 200 2009 City of Tustin Comprehensive Affordable Housing Strategy Appendix B Affordability Gap and Leveraged Financing Analysis February 15, 2008 Prepared for. City of Tustin Submitted By: David Paul Rosen & Associates Northern California David Rosen, Principal 1330 Broadway, Suite 937 Oakland, CA 94612-25Q9 Phone: 510-451-2552 Fax: 510.451-2554 e-mail: David*DRAConsultants.com www.draconsukants.com Southern California Nora Lake -Brown, Principal 3941 Hendrix St Irvine, CA 92614-6637 Phone: 949-559-5650 Fax: 949-559-5706 e-mail: Nora@DIZAConsultants.com www.draconsultants.com I Table of Contents 0 1.0 Executive Summary ..................................................................................... 1 2.0 Housing Prototypes.................................................................................... 9 3.0 Financing Scenarios, Income Targeting and Affordable Housing Cost......... 9 3.1 Financing Scenarios............................................................................ 9 3.2 Target Income Levels........................................................................... 9 3.3 Affordable Housing Cost Definitions.................................................... 12 3.4 Occupancy Standards......................................................................... 12 3.5 Utility Allowances............................................................................... 13 3.6 Affordable Net Rents and Affordable Monthly Housing Cost ................ 14 4.0 Development Costs.................................................................................... 16 4.1 Developer Interviews, Rental Housing Development ..............:............ 16 4.1.1 Jamboree Housing.........................................................:.......... 16 4.1.2 Keyser Marston Associates........................................................ 17 4.2 Developer Interviews, Owner Housing Development .......................... 17 4.2.1 Springbrook Advisors................................................................. 18 4.2.2 Nevis Homes............................................................................ 18 4.2.3 The Olson Company................................................................. 18 4.2.4 Keyser Marston Associates........................................................ 18 4.2.5 CIM Group............................................................................... 19 4.2.6 William Lyon Homes................................................................ 19 4.2.7 Sun Cal Companies.................................................................. 19 4.2.8 John Laing Homes.................................................................... 19 4.3 Land. Acquisition Costs........................................................................ 20 4.4 Development Impact Fees................................................................... 21 4.5 Hard Costs and Site Improvement Costs .............................................. 24 4.6 Estimated Total Prototype Development Costs ..................................... 25 5.0 Operating and Financing Cost Assumptions ............................................... 26 5.1 General Operating Costs, Rental Prototype .......................................... 26 5.2 Financing Costs................................................................................... 29 City of Tustin Affordability Gap and Leveraged Financing Analysis Page i Attachment A. Ownership Affordability Gap Analysis Tables Attachment B: Renter Affordability Gap Analysis Tables Attachment C: Leveraged Financial Analysis, Renter Prototype City of Tustin Affordability Gap and Leveraged Financing Analysis Page li 29 6.0 Per Unit Affordability Gaps........................................................................ 32 7.0 Renter Leveraged Financial Analysis........................................................... Costs 32 7.1 Hard Construction ..................................................................... 7.2 Eligible Basis and Tax Credit Equity Calculations ................................. 32 7.3 Income Targeting Scenarios, Occupancy Standards Rents 33 andAffordable .......................................................................... 34 7.4 Operating Costs and Vacancy............................................................. Attachment A. Ownership Affordability Gap Analysis Tables Attachment B: Renter Affordability Gap Analysis Tables Attachment C: Leveraged Financial Analysis, Renter Prototype City of Tustin Affordability Gap and Leveraged Financing Analysis Page li List of Tables 0 1. Homeowner Per Unit Subsidy Requirements .............................................. 4 2. Tenant Per Unit Subsidy Requirements....................................................... 6 3. Average Per Unit Subsidy Requirements, Leveraged Financing Scenarios ........................... 4. Owner Housing Prototype Projects............................................................. 10 5. Rental Housing Prototype.......................................................................... 11 6. Affordable Housing Cost Definitions..........:............................................... 12 7. Current Monthly Utility Allowances, County of Orange .............................. 14 8. Affordable Net Rents ... :.............................................................................. .15 9. Affordable Monthly Housing Cost.............................................................. 15 10. Tustin Legacy Comparable Land Prices .................................................... 20 11. Per Unit Land Acquisition Cost Assumptions by Prototype., ........................ 21 12. Development Processing and Impact Fee Assumptions, Owner Housing Prototypes............................................................................................. 22 13. Development Processing and Impact Fee Assumptions, Rental Housing Prototype.............................................................................................. 23 14. Per Net Square Foot Hard Construction Cost Assumptions by Prototype..... 25 15. Estimated Prototype Development Costs, Owner Housing Prototypes......... 27 16. Estimated Prototype Development Costs, Rental Housing Prototype........... 28 17. Development and Financing Cost Assumptions, Owner HousingPrototypes.................................................................................... 30 18. Development and Financing Cost Assumptions, Rental Prototype................................................................................................. 31 19. Income Targeting Assumptions for Leveraged Financing Scenarios ............. 33 20. Construction and Permanent Sources and Uses, Leveraged Financing Analysis, Rental Housing Prototype..........................................:............ 35 City of Tustin Affordability Cap and Leveraged Financing Analysis Page iii Ci of Tustin Affordability Gap and leveraged Financing Analysis 1.0 Executive Summary The City of Tustin retained David Paul Rosen & Associates (DRA) to prepare an affordability gap analysis and evaluation of leveraged financing options for new residential development in Tustin. The "affordability gap" methodology determines the difference between the supportable mortgage on the unit at affordable rents and sales prices and the actual development cost of the unit. The gap analysis provides planning -level estimates of the typical per unit subsidized required to make different types of housing affordable to households at alternative income levels. The per unit affordability gaps calculated in this report are based on housing prototypes that are 1 00% affordable to households at each of the income levels modeled (or in the case of the leveraged financing analysis, at the mix of income levels necessary to meet the requirements and/or competitive standards of the leveraged financing programs). However, the results can be used in estimating subsidy requirements for mixed income housing developments as well. Under the assumption that the market rate units are financially feasible without subsidy, the subsidy requirement for a mixed income development can be estimated by multiplying the number of affordable units by the appropriate per unit affordability gap. The results of the gap analysis provide a useful tool to the City of Tustin and Tustin Redevelopment Agency for capital planning purposes. DRA recommends -that the subsidy provided to any individual housing development be determined based on analysis of the specific economic conditions pertaining to that prof - The first step in the gap analysis establishes the amount a tenant or homebuyer can afford to contribute to the cost of renting or owning a dwelling unit based on established State and Federal standards. Income levels, housing costs and rents used in the analysis are defined below using 2007 published data for Tustin. The second step estimates the costs of new housing construction in Tustin. For this pulse, DRA, in collaboration with City staff, formulated five prototypical housing developments (one rental development and four owner developments) suitable for the Tustin market today. DRA estimated the cost to develop these housing prototypes in Tustin under current housing conditions using information on actual recent housing developments provided by Tustin and Orange County area developers. The third step in the gap analysis establishes the housing expenses borne by the tenants and owners. These costs can be categorized into operating costs, and financing or mortgage obligations. Operating costs are the maintenance expenses of the unit, including utilities, property maintenance and/or Homeownership Association (HOA) fees, property taxes, management fees, property insurance, replacement reserves, and insurance. For the rental prototype examined in this analysis, DRA assumes that the City of Tustin Affordability Gap and leveraged Financing Analysis Page 1 landlord pays all but certain tenant -paid utilities as an annual operating cost of the unit paid from rental income. For owner prototypes, DRA assumes the homebuyer pays all operating and maintenance costs for the home. Financing or mortgage obligations are the costs associated with the purchase or development of the housing unit itself. These costs occur when all or a portion of the development cost is financed. This cost is always an obligation of the landlord or owner. Supportable financing is deducted from the total development cost, less any owner equity or downpayment, to determine the gap between the supportable mortgage on the affordable units and the cost of developing those units. For the rental housing prototype, the gap analysis calculates the difference between total development costs and the conventional mortgage supportable by net operating income from restricted rents. For owners, thegap is the difference between development costs and the supportable mortgage plus the buyer's down payment. Affordable housing costs for renters and owners are calculated based on California Redevelopment Law definitions and occupancy standards. Household income is adjusted based on an occupancy standard of one person per bedroom plus one. The �aps for the owner prototypes 'are summarized in Table 1. The gaps have been calculated for the following three income levels: Income Limit Affordable Housing Cost 1. Very Low Income 509/0 of Area Median Income (AMI), adjusted 30% of 500/6 AMI for household size 2. Low Income 809/6 of AMI, adjusted for household size 30% of 70% AMI 3. Moderate Income 120% of AMI, adjusted for household size 35% of 110% AMI Dependingupon the source of subsidy for ownership housing, the gaps may vary. For example, Federal HOME funds do not require deduction of a utility allowance in the calculation of affordable mortgage payment However, under California Redevelopment Law, owner affordable housing expense is defined to include monthly utility costs. This increases the ownership gaps. The affordability gaps shown in Table 1 include utility allowance deductions. The gaps for the rental prototype, without non -local leveraged financing, are summarized in Table 2. The gaps have been calculated for the following three income levels: - City of Tustin Affordability Gap and Leveraged Financing Analysis Page 2 Affordable Housing Income Limit Cost 1. Very Low Income 50% of Area Median Income (AMI), 30% of 500/6 AMI adjusted for household size 2. Low Income 80% of AMI, adjusted for household size 30% of 60% AMI 3. Moderate Income 120% of AMI, adjusted for household size 30% of 110% AMI DRA produced, under separate cover, a comprehensive review of Federal, State, and private sources of funding that might be used to subsidize affordable rental and ownership housing in Tustin. For ownership housing, per unit mortgage assistance, as available, generally reduces the gap on a dollar for dollar basis. For rental developments, the use of the Low Income Housing Tax Credit Program and/or tax-exempt bonds is more complicated, because of the formulas for calculating tax credits and the specific income targeting required. Therefore, for the rental prototype, we have examined the following leverage scenarios: 1. 9% Low Income Housing Tax Credits (Federal only)'; 2. 4% tax credits with tax-exempt bonds; and 3. 4% tax credits, tax-exempt bonds, and the Multifamily Housing Program (MHP) of the California Department of Housing and Community Development (HCD). The assumptions and findings are described in the following section. The sources and uses for each leveraged rental scenario are summarized in Table 3. Since Orange County was designated as a Difficult to Develop Area (DDA) by HUD in 2007, projects in the County are eligible for a 130% basis boost for the calculation of Federal tax credits but are not eligible for State tax credits. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 3 Table 1 Homeowner Per Unit Subsidy Requirements' City of Tustin 2008 Very Low Low Moderate Prototype/Unit Bedroom Count Income= Income' Income' Owner Prototype #1' Attached Townhome Two Bedroom $366,000 $322,400 $195,500 Three Bedroom $387,800 $339,400 $198,400 Four Bedroom $426,800 $374,600 $222,300 Average $393,500 $345,500 $205,400 Owner Prototype #2s Stacked Fiat Condominium One Bedroom $258,600 $219,900 $107,100 Two Bedroom $259,000 $215,500 $88,600 Three Bedroom $267,100 $218,800 $77,800 Four Bedroom $290,500 $238,300 $86,000 Average $268,800 $223,100 $89,900 Owner Prototype #3' High Density Condominium One Bedroom $407,500 $368,800 $256,000 Two Bedr000m $432,500 $389,000 $262,100 Three Bedroom $542,000 $493,700 $352,600 Four Bedroom $569,400 $517,200 $364,800 Average $487,900 $442,200 $308,900 Owner Prototype #4" Mixed Use, Ground Floor Retail One Bedroom $491,700 $453,000 $340,200 Two Bedr000m $537,400 $493,900 $366,900 These Bedroom $595,000 $546,600 $405,600 Average $541,300 $497,800 $370,900 Source: David Paul Rosen & Associates City of Tustin Affordability Gap and Leveraged Financing Analysis Nge 4 Notes to Table 1: ' Per unit subsidy requirements are calculated as per unit total development cost less affordable home purchase price, based on an occupancy standard of one person per bedroom plus one, per California Redevelopment Law. Affordable home purchase price is calculated based on monthly affordable housing expense, inclusive of mortgage principal and interest, property taxes and insurance, utilities and homeowners association (HOA) dues. Calculations are based on the following assumptions: 30 -year mortgage interest rate of 8 percent; average property tax rate of 1.20 percent; property insurance costs of $50 per month; HOA dues of $175 per month; and a utility allowance calculated based on County of Orange, Housing and Community Services Department utility allowance schedule, effective October 1, 2006. 2 Very low income owner affordable housing is cost calculated as 30 percent of 50 percent of AMI, adjusted for household size. Average very low income affordable home purchase price is $70,764. 3 Low income owner affordable housing cost is calculated as 30 percent of 70 percent of AMI, adjusted for household size. Average low income affordable home purchase price is $116,457. 4 Moderate income owner affordable housing cost is calculated as 35 percent of 110 percent of AMI, adjusted for household size. Average moderate income affordable home purchase price is $249,723. s Owner Prototype 01 average unit size is 1,296 square feet. Average per unit development cost is $468,663. Per unit development costs are adjusted by unit size/bedroom count. 6 Owner Prototype $2 average unit size is 1,142 square feet. Average per unit development cost is $339,591. Per unit development costs are adjusted by unit size/bedroom count. Owner Prototype $3 average unit size is 1,350 square feet. Average per unit development cost is $558,617. Per unit development costs are adjusted by unit size/bedroom count. Is Owner Prototype $4 average unit size is 1,515 square feet. Average per unit development cost is $608,112. Per unit development costs are adjusted by unit size/bedroom count. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 5 Table 2 Tenant Per Unit Subsidy Requirements' Rental Housing Prototype: Stacked Flat Apartments City of Tustin 2008 Source: David Paul Rosen & Associates. City of Tustin Affordability Gap and Leveraged financing Analysis Page 6 Renter Prototype Stacked Flat Apartments Very iow Low Moderate Unit Bedroom Count income income' income One Bedrooms $311,300 $294,600 $211,400 Two Bedroom' $348,000 $329,300 $235,600 Three Bedroom' $321,800 $301,000 $197,000 Four Bedroom' $402,000 $379,600 $174,800 Average $345,775 $326,125 $204,700 Source: David Paul Rosen & Associates. City of Tustin Affordability Gap and Leveraged financing Analysis Page 6 Notes to Table 2: ' Tenant per unit subsidy requirements are calculated as per unit total development cost less per unit tenant supported debt. Tenant supported debt is calculated based on tenant monthly operating income which equals: affordable monthly rent, inclusive of utilities, less a monthly per unit operating cost of $300, property taxes assumed at an average annual rate of 1.20 percent and a 3 percent vacancy rate. Tenant supported debt calculations are based on a 30 -year mortgage interest rate of 8 percent and- a debt coverage ratio of 1.25. Affordable monthly rents are based on household income, adjusted for household size assuming an occupancy standard of one person per bedroom plus one, per California Redevelopment Law. 2 Very low income renter affordable housing cost is calculated as 30 percent of 50 percent of AMI, adjusted for household size. Average very low income affordable monthly rent is $847. 3 Low income renter affordable housing cost calculated as 30 percent of 60 percent of AMI, adjusted for household size. Average low income affordable monthly rent is $1,033. 4 Moderate income renter affordable housing cost calculated as 30 percent of 110 percent of AMI, adjusted for household size. Average moderate income affordable monthly rent is $1,963. 5 One bedroom unit is 750 square feet. Per unit total development cost is $321,075. 6 Two bedroom unit is 950 square feet. Per unit total development cost is $362,224. ' Three bedroom unit is 1,050 square feet. Per unit total development cost is $382,799. Four bedroom unit is 1,250 square feet. Per unit total development cost is $423,947. City of Tustin Affordability (yap and Leveraged Financing Analysis Page 7 Table 3 Average Per Unit Subsidy Requirements Rental Housing Prototype: Stacked Flat Apartments Leveraged Financing Scenarios City of Tiistin 2008 LeveraW Anancing Scenarios 9% Tax Credits 4% Tax Credits, Tax -Exempt Bonds 4% Tax Credits, Tax -Exempt Bonds, Multi -Family Housing Program (MHP) Source: David Paul Rosen & Associates. Renter Prototype Stacked Flat Apartment $57,000 $140,100 $109,600 City of Tustin Affordabiltty Cap and Leveraged Financing Analysis Page 8 2.0 Housing Prototypes Tables 4 and 5 describe the owner and renter housing prototypes, respectively, examined in the gap analysis. These prototypes were developed in collaboration with City staff based on recently constructed and planned residential developments. The prototypes are designed to represent typical market -rate rental and owner housing developments in Tustin in terms of the resident population, product and construction type, density, number of units, unit mix by bedroom count, and unit size. 3.0 Financing Scenarios, Income Targeting and Affordable Housing Cost 3.1 Financing Scenarios DRA first modeled the owner and renter housing prototypes under a conventional financing scenario that does not incorporate leverage from alternative sources of public subsidy for affordable housing. Because of the limited availability of affordable housing subsidies, it is not possible to predict the ability of any particular affordable housing development to secure such subsidies. We calculate the affordability gap per unit by unit bedroom count and homebuyerAenant income level. In the leveraged financing analysis, described in Section 7.0 below, we model the renter housing prototype assuming use of the Low Income Housing Tax Credit and tax-exempt bond programs. 3.2 Target Income Levels The affordability gap analysis uses income limits as commonly defined by HUD, California Redevelopment Law, California Housing Element law, and most affordable housing assistance programs. Extremely low income households are defined as households with incomes up to 30 percent of AMI. Very low income households are defined as households with incomes from above 30 percent to 50 percent of AMI. Low income households are defined as households with incomes from above 50 percent to 80 percent of AMI. Moderate income households are defined as households with incomes from above 80 percent to 120 percent of AMI. All of these income limits are adjusted by household size using HUD family size adjustment factors. The affordability gap calculations are based on the 2007 median household income of $78,700 for Orange County. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 9 Table 4 Owner Housing Prototype Project: City of Tustin 2008 1 Owner 2 Owner 3 Stacked Flat High Density Mixed Use, UNIT COUNT 134 Units 325 Units 400 Units 20 Units ZONING R3 R3 PC C2 P NUMBER OF STORIES, 2S Storks 2 Storks 4 Stories 3 Storks (2 Stories Resid ) CONSTRUCTION TYPE Type V Type V Type V Type V Wood Frame Wood Frame Wood Flame Wood Frame DENSITY (DU'S/Acre) 18.0 25.0 45-50 29.0 FLOOR AREA RATIO (FAR) 0.5 0.7 1.5 1.5 LAND AREA (Acres) 13.00 Acres 13.00 Acres 8.00 Acres 0.69 Acres UNITS BY OR COUNT One Bedroom 0 75 100 4 Two Bedroom 90 100 125 6 Thee Bedroom 90 100 125 10 Four Bedroom 54 50 50 0 UNIT SIZE Wet Square Feet One Bedroom WA 950 1,000 1,100 Two Bedroom 1,050 1,050 1,150 1,400 Three Bedroom 1,300 1,200 1,650 1,750 Four Bedroom 1,700 11500 1,800 WA Avrt W Sqnn Feet 1,296 1,142 1,350 1,515 BLDG. $a FEET Net LMM Arm 303,300 371,250 W1000 30,300 C Spam 2,500 2,000 0 0 Total Net Bids. Square Feet 305,800 373,250 540,000 30,300 TYPE OF PARKING Garage Carport Parking Stricture Garage NO. Of PKG. SPACES Gage 468 0 0 40 Carport 0 650 0 0 Open 59 82 100 10 ftaing Sin"" 00 0 700 TOTAL SPACES 527 732 800 50 City o(AnrM AMordsbility Gap rad tNsapd Fina" Ana!ys)s Pip 10 IUNFT COUNT TYPE OF PRODUCT OF S70RIB ICTION TYPE (DENSITY (DU-S/Acrs) FLOOR AREA RATIO (FAR) LAND AREA (Acres) UNITS BY BR COUNT Ome Rsdroore Two Redman Three Bedroom Fpw /droga Mar"W-9 Unik (Tiro Bedroom) UNIT SIZE Net Sgrwe Fest) One Bedroom TWO -0 , M e TIV t Adroorm Fpr Bedroom Average Square Fist 11M. 54 FEET Nd Lhft Arm Cormawky Space Total Net slog. Square red ill ifc jm_l fj NO. OF PARKING SPACES Garage CArPort Open Fw*bv Structure TOTAL SPACES Table s Rental HmWnl Prototype City of Rrtln 2000 325 Unfit Stacked Flak R3 2 Type V Wood Frame 25.0 0.6 13.00 Acres 73 100 100 50 2 750 950 1,050 1,250 982 319,150 0 319,150 Puking Structure 0 0 81 650 731 CNy 0f Hawn ` AiwtW Nly GW end Le -p ed Rn—Jng Angy0s Page 11 /) 3.3 Affordable Housing Cost Definitions Calculation of the affordability gap requires defining affordable housing expense for renters and owners. Table 6 shows the affordable housing cost definitions and income levels developed for this analysis based on discussions with City staff and consistent with California Redevelopment Law. Affordable housing expense for renters is defined to include rent plus utilities. For owners, affordable housing expense is defined to include mortgage principal and interest, property taxes and insurance, utilities and homeowners association (HOA) dues. Table 6 Affordable Housing Cost Definitions City of Tustin Income Level Extremely low income (300/6 of AMI and below) Very low income (greater than 30% to 509/6 of AMI) Low income (greater than 500/6 to 800/16 of AMI) Moderate income (greater than 8016 to 1200/6 of AMI) AMI = Area Median Income 3.4 Occupancy Standards 011-1111.iiii �.. • Not Analyzed 30% of 500/6 AMI 300/6 of 60% AMI 30% of 110% AMI Not Analyzed 30% of 50% AMI 30% of 70% AMI 35% of 110% AMI Because income definitions for affordable housing assistance programs vary by household size, calculations of affordable rents and affordable owner housing costs require the definition of occupancy standards (the number of persons per unit) for each unit size. For the purposes of this analysis, affordable housing cost for renters and owners is calculated based on an occupancy standard of one person per bedroom plus one, consistent with California Redevelopment Law requirements. Lily or i usnn Affordability Gap and Leveraged Financing Analysis Page 12 3.5 Utility Allowances Allowable affordable net rents are calculated by subtracting allowances for the utilities paid directly by the tenants from the gross rent (or affordable housing cost). For owners, the affordable mortgage principal and interest payment is calculated by determining the affordable housing cost and deducting costs for property taxes, property insurance, utilities and HOA dues. We incorporated utility allowances effective October 1, 2006 provided by the County of Orange, Housing and Community Services Department, summarized in Table 7 below. The rental gap analysis assumes that the resident pays utilities (assumed to include basic electric and electric heating, cooking and water heating). It assumes the landlord pays for trash, water and sewer. For the owner gap analysis, we assume the homeowner pays utilities (basic electric and electric heating, cooking and water heating), plus water, trash and sewer. Actual utility allowances depend upon a variety of factors, including the utilities that are paid by the residents (e.g., water, gas, electricity, sewer, trash), the type of appliances and ( heating units incorporated in the units, and whether appliances and heating units require electricity or gas. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 13 Table 7 Current Monthly Utility Allowances County of Orange Housing and Community Services Renter Households Bedroom Size Monthly Util4 Allowance' 2 Bedroom 1 Bedroom $54 2 Bedroom $68 3 Bedroom $98 4 Bedroom $109 Owner Households Monthly Utibly Allowance2 1 Bedroom $93 2 Bedroom $110 3 Bedroom $148 Source: County of orange, Housing and Community Services, effective October 1, 2006. 3.6 Affordable Net Rents and Affordable Monthly Housing Cost Table 8 summarizes the affordable net rents used in the renter gap analysis. Table 9 summarizes the affordable housing costs used in the owner gap analyses. Includes electric utilities (heating, cooking, water heating and basic electric). } 2 Includes electric utilities (heating, cooking, water heating and basic electric) and water, trash and sewer. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 14 Table 8 Affordable Net Rents' City of Tustin 2008 Table 9 Affordable Monthly Housing Cost 2 City of Tustin 2008 U.S. Department of Housing and Urban Development published 2007 very low income limits, adjusted proportionally for 60% of percentage of AMI category. Gross rents are calculated assuming an occupancy standard of 1 person per bedroom plus one, consistent with California Redevelopment Law. Net rents are calculated assuming 30% of gross income spent on rent and then deducting the utility allowances from Table 7. 2 California Department of Housing and Community Development published 2007 low and median income limits. Owner affordable housing costs are calculated assuming an occupancy standard of one person per bedroom plus one and 30% of gross income spent on housing for low income households and 35% of gross income spent on housing for moderate income households. The Affordable Monthly Housing Cost includes the monthly mortgage payment, property taxes, property insurance, utilities and HOA dues. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 15 4.0 Development Costs Development costs include: land acquisition, hard costs, hard cost contingency, on- and off-site improvements, development fees, soft or indirect costs, financing costs, sales/marketing, and developer profit, overhead and general conditions. Hard costs include building and parking construction costs. Soft or indirect costs include architectural and engineering costs, property taxes and insurance. Development costs for the renter and owner prototypes were estimated based on a review of land sales comparables, interviews with local Tustin area developers and DRA's extensive experience with housing development throughout Southern California. 4.1 Developer Interviews, Rental. Housing Development The following developers and advisors were interviewed regarding rental housing development costs: Laura Archuleta, Jamboree Housing • Jerry Trimble and Michael Wong, Keyser Marston Associates 4.1.1 Jamboree Housing Jamboree Housing provided DRA with development cost summaries of 48 recent bids on 14 new housing projects in the Tustin area. Thirty-four of these bids relate to 10 garden - style, or stacked -flat walk-up rental projects with carports. The projects range from 20 to 162 units with unit densities between 38 and 71 units per acre. Every site is unique representing different development costs and Jamboree's 14 projects' bids represent a wide range of costs. This range can be explained by a number of factors including the sites' unique conditions and the projects' timing, which can vary costs based on cost fluctuations in the market In addition, about half of Jamboree's bids assume payment of prevailing wages. Of Jamboree's non -prevailing wage bids, the hard costs range from $94 to $185 per square foot, with the average cost at $155 per square foot The average hard cost of the prevailing wage bids is about 22 percent higher at $198 per square foot. Jamboree's remaining 14 bids relate to five podium style projects, or stacked flat apartments over parking with densities ranging from 40 to 64 units per acre. The hard costs, inclusive of parking construction, for the non -prevailing wage bids range from $171 City of Tustin Affordability Gap and Leveraged Financing Analysis Page 16 to $342 per square foot for this product, with the average cost at $239 per square foot. The prevailing wage bids average $270 per square foot hard construction costs. Five of these bids include land cost estimates that range from $21 to $79 per square foot. The average land cost is $43 per square foot. 4.1.2 Keyser Marston Associates (KMA) KMA prepared a residual land value analysis for Tustin Legacy, including development cost estimates for several different development prototypes. KMA,s cost estimates 'do not include land costs or site improvements. For an apartment project with 30 dwelling units to the acre, KMA estimates $165 per square foot in hard costs and soft costs equal to 18.5 percent of hard costs. 4.2 Developer Interviews, Owner Housing Development The following developers and advisors were interviewed regarding owner housing development costs: • Tom Sakai, Springbrook Advisors • Scott Young, Nevis Homes • Scott Newcomb, The Olson Company • Jerry Trimble and Michael Wong, Keyser Marston Associates • Justin Rimel, CIM Group • Tom Grable, William Lyon Homes • Ian Vickers, Sun Cal Companies • Steve Kabel, John Laing !-times Below we review the results of these interviews and detail the hard costs that the interviewees have seen in recent housing developments in the Tustin area, especially those developments that are similar to the five prototypes examined in this analysis. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 17 4.2.1 Springbrook Advisors Springbrook Advisors represents Lennar and Lyon Homes on development projects throughout Southern California. In the Tustin area, Springbrook has experience with an owner townhouse project with 13.5 dwelling units per acre. On this project, hard costs were $90 per square foot. Springbrook also advised on a low density, mixed-use project with no parking that had hard costs of $110 per square foot. Another project, a high density owner development with 40 dwelling units per acre and podium parking, had hard costs of $225 per square foot, inclusive of parking and site improvements. 4.2.2 Nevis Homes Nevis Homes has recently developed a 93=unit townhome project in the Tustin area. Land costs for this project were about $106 per square foot and hard costs were $136 per square foot. 4.2.3 The Olson Company The Olson Company provided DRA with development cost estimates for the four owner prototypes, based on the company's development experience in Orange County. For Owner Prototype #1, Attached Townhomes, Olson estimates $78 per square foot in hard costs. For Owner Prototype 92, Stacked Flat Condominiums with podium parking, hard costs were estimated at $82 per square foot, Olson also estimates $115 per square foot hard costs and a $21,000 to $27,000 cost per parking space for Owner Prototype #3, High Density Condominiums. For Owner Prototype #4, Mixed Use Condominiums, Olson estimates $85 per square foot hard costs. 4.2.4 Keyser Marston Associates (KMA) KMA prepared a residual land value analysis for Tustin Legacy, including development cost estimates for several different development prototypes. KMA's cost estimates do not include land costs or site improvements. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 18 For a stacked flat product with 50 dwelling units to the acre, KMA estimates hard costs at $165 per square foot with additional costs of $30 per square foot for parking construction. For a townhouse product with 13 dwelling units to the acre, they estimate hard costs. at $96 per square foot. A mixed use, Texas Wrap style project with 75 dwelling units to *the acre is estimated to have $119 per square foot hard costs with additional $35 per square foot costs for parking construction. All of KMA's prototypes assume soft costs to be equal to 18.5 percent of hard costs. 4.2.5 CIM Group The CIM Group has developed several mixed use projects in and around Tustin that have ground -floor retail below residential. The costs they have seen on these projects range from $130 to $140 per gross square foot for hard costs, with additional costs of $25,000 per at -grade structured parking space to $35,000 per below -grade structured parking space. 4.2.6 William Lyon Homes William Lyon Homes is currently developing a 102 -unit mixed -income housing project on the. Columbus Grove site of Tustin Legacy. This project consists of triplex buildings with two two-story townhomer'and an upstairs carriage, or walk-up, unit Of these units, 60 are market rate, 30 are affordable to low and moderate income households and 12 are transitional housing units. The hard costs estimated for this project total $76 per square foot, inclusive of two -car garages within the building envelopes. The land cost for this project was $133,000 per unit or approximately $79.50 per square foot William Lyon Homes is also developing a, 156 -unit development of townhomes and flats, with a mix of market rate and affordable units. This project's hard costs are $98 per square foot and the land cost was $72,600 per unit or $32 per square foot. 4.2.7 Sun Cal Companies Sun Cal Companies has experience with several housing products in the Tustin area. Currently, the company is developing two townhome projects in Tustin. These projects have hard costs ranging from $95 to $99 per square foot Site improvement costs vary widely by site and so Sun Cal could not provide an estimate of typical site improvement costs. Sun Cal Companies is also familiar with stacked flat and mixed use developments in the Tustin area. These projects have hard costs ranging from $90 to $110 per square foot, with the higher costs associated with projects that have more than three stories. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 19 According to Sun Cal's experience, high density housing developments built in the wrap design, with buildings surrounding at -grade parking have hard costs around $200 per square foot while those with podium parking have hard costs around $225 per square foot. 4.2.8 John Laing Homes John Laing Homes last developed housing in Tustin two years ago but has several current projects in Irvine. These include a row townhouse development with a density of 16.5 units per acre, and two townhouse and condominium flats combination projects at 17.5 and 16.3 units per acre. The row townhouse project has hard costs of $82 per square foot. The two townhouse and flat combination projects have hard costs of $84 and $87 per square foot. In Irvine, developers are most commonly purchasing partially -finished lots, according to Mr. Kabel. Therefore, the land costs for these projects would not be comparable to buying unfinished lots for development in Tustin. 4.3 Land Acquisition Costs HaFris Realty Appraisal prepared an Appraisal Report for the Ci of Tu Facilities District No. 66-1, Tustin Legacy/Columbus Villages in May 2007. Of then16 Tustin Legacy land sales analyzed in the appraisal, four parcels have comparable housing type and density to the Owner Prototype 1 examined in this study. The land prices and density of these parcels are shown in Table 10 below. Table 10 Tustin Legacy Comparable Land Prices City of Tustin 2008 Land Sale Data Land Cost, per Lot Density, square foot units per gross site acre No. 1 $53 / SF 16.6 units/acre No. 6 $46 /SF 16.3 units✓acre No. 9 $47 /SF#16.3 units/acre No. 9A $33 /SFunits/acre Average $45 /SFnits/acre City of Tustin Affordability Cap and Leveraged Financing Analysis Page 20 Based on the above interviews and land cost comparables, DRA estimates per unit and per square foot land costs for the various housing product types represented by the housing prototypes. The land acquisition cost assumptions are shown in Table 11. 4.4 Development Impact Fees Development impact fees for new residential development in the City of Tustin include Orange County Sanitation District fees, East Orange County Water District fees, Transportation Corridor Agency fees, Tustin Unified School District fees, and building permit and plan check fees. Current fee estimates for each housing prototype were provided by the Tustin Community Redevelopment Agency and the Community Development Department Planning Division. Estimates of the development impact fees for the housing prototypes are detailed in Table 12 for the owner prototypes and Table 13 for the renter prototype. Fees for Owner Prototype 94, Mixed Use Condominiums, include only those that are applicable to the residential portion of the development. For those fees that are assessed project -wide, the fees are pro -rated based on the proportion of the total project that is dedicated to residential use. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 21 Table 11 Per Unit Land Acquisition Cost Assumptions by Prototype City of Tustin 2008 Prototype Land Cost Per Dwelling Land Cost Per Square Foot Unit Gross Site Area Owner #1 Attached Townhome $109,000 $45 Owner #2 Stacked Flat Condominiums $75,000 $43 Owner #3 High Density Condominiums $52,000 $60 Owner #4 Mixed Use Condominiums $90,000 $ fi0 Renter #1 Stacked Flat Apartments $70,000 $43 Source: Dataquick Information Systems; City of Tustin; DRA interviews of Tustin area developers. 4.4 Development Impact Fees Development impact fees for new residential development in the City of Tustin include Orange County Sanitation District fees, East Orange County Water District fees, Transportation Corridor Agency fees, Tustin Unified School District fees, and building permit and plan check fees. Current fee estimates for each housing prototype were provided by the Tustin Community Redevelopment Agency and the Community Development Department Planning Division. Estimates of the development impact fees for the housing prototypes are detailed in Table 12 for the owner prototypes and Table 13 for the renter prototype. Fees for Owner Prototype 94, Mixed Use Condominiums, include only those that are applicable to the residential portion of the development. For those fees that are assessed project -wide, the fees are pro -rated based on the proportion of the total project that is dedicated to residential use. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 21 Table 12 Development Processing and bsi d Fee Assumptions Owner Horsing Prototypes City athstis Prototype 14: Prototype 11: Prototype e2: Prow" /3: Mixed We Amthed Stadoed Flat High DwWW Ground Floor (1) lnciudes fees associated with residential portion of devekpnw t only. for fees assessed per project, calculations ass me residential portion of project B: 66% Of told Sowce: Cky of Tustin Cornmtmity Development Departmey Planning DN49on, Tustin Community Redeveloprnenl . Agency, City of Tustin PuNk Works4rigineerhng Depanrnent, David Paul Rosen d Associates. Qty of Tures MordaMWf Gap and Lv + F--" Ana"s PASO 22 Table 13 Development processing and Impact Fee Assumptions Rental Housing Prototype City of Astin 2008 Rental Prototype rt: Stacked Flat East Orange County Water Dktrlct I 11,133.1 ;162,5 [tentative Map, traffic swdy, imtnary - - -- - Design Review $14,000 Final Map 56,000 Public Improvemerm $t 8.000 Waiar Qwdky Management Plan $S,ow Precise C,ra�ng Plan $12,000 Permit & Insoectlon $0 Development Agreement -- -- - cn Design Review $3,000 Tentative Trac Map $0 Final Tract Map $0 Conditional use Hermit so Environment impact Report Fee $1,333 Neper Declaratlon $0 Precise Cdadkrg Permit Fees $9,060 Public Improvements Permit Tees $9'060 New Construction Fee Bullding Permk fee $158,950 Planning Pian Check Fee $60,677 Building Plan Check $8,495 Planning Inspection Fee $41,474 Building issuance Fee $12,135 Strong Motion Instrumentation program Fee $35 $2,377 Electrical Permit Fee $22,415 Mechanical Permit see $12,188 Mechanical Plan Check Fee $6,094 PlumbMtg Permit Fee 28,268 $14,134 Plumbing Pian Check Fee $14,134 Oran C Fire Author+ Orange nutty ty lrtspection Fee $18,100 Tustin l "MW School District Fees - t evel 2 $2,157,454 Quimby Fee -- --- --- pier Source: City of 7lutin Community Development Department Planning Division, TusWt Community Rent Agency, City of Tustin Public WorWEngirwang Department, David Paul Rosen & Associates, City of Tustin Mbedsbik Cap and Leveraged Financing Analysts Page 23 j 4.5 Hard Costs and Site Improvement Costs Hard costs are estimated based on the information obtained through developer interviews, as described above. Hard costs include residential building and parking construction costs, inclusive of contractor profit and overhead, expressed per net square foot of residential building area and do not include site improvement costs. Hard costs will vary with the level of finishes provided in the units. The prototypes modeled represent more basic, entry-level products rather than luxury units. Site improvement costs are estimated per square foot of site area. On- and off-site improvement costs can also vary widely depending upon the extent of existing infrrastructure and unique site conditions. For the affordability gap analysis, we model the prototypes assuming a market -rate development. This analysis illustrates the economic gap between the cost of a market -rate unit and the amount households at various income levels can afford to pay for housing. Therefore, the hard cost assumptions for the gap analysis do not assume payment of prevailing wages. However, to the extent the gap is filled with many forms of public subsidy, then the } payment of prevailing wages may be required. The difference in hard costs associated with prevailing wages is estimated at 25% for the rental prototypes in the leveraged financing analysis in Section 7.0. The per square foot hard cost and per unit site improvement cost assumptions used in the gap analysis for each prototype are presented in Table 14. The hard costs are inclusive of parking construction. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 24 4.6 Estimated Total Prototype Development Costs Total development costs, as defined for the purposes of this report, equal the sum of the hard costs, site improvement costs, soft costs, sales/marketing costs, financing costs, generalconditions, developer overhead and profit. Hard costs include building and parking construction costs. Soft costs include architectural and engineering costs, property taxes and insurance. General conditions include items such as the trailer, utilities, security, supervision and material storage, if any, associated with the job site. Developer overhead and profit refers to the fee the developer charges for constructing the project, including the administration costs and the developer's profit. Minimum developer profit is estimated at 12% of total development costs, based on DRA experience and input from developers and the Building Industry Association. This level is considered a baseline profit or "hurdle rate," representing the minimum necessary for the City of Tustin Affordability Gap and leveraged Financing Analysis Page 25 Table 14 Per Net Square Foot Hard Construction Cost Assumptions by Prototype City of Tustin 2008 Prototype Hard Construction Cost Per Average Site Improvement Net SF Building Area Cost Per Net SF Site Area Owner #1 $95 $25 Attached Townhome Owner #2 $85 $20 Stacked Flat Condominiums Owner #3 $195 $30 High Density Condominiums Owner #4 $155 $20 Mixed Use Condominiums Renter #1 $155 $20 Stacked Flat Apartments Source: DitA interviews of Tustin area developers. 4.6 Estimated Total Prototype Development Costs Total development costs, as defined for the purposes of this report, equal the sum of the hard costs, site improvement costs, soft costs, sales/marketing costs, financing costs, generalconditions, developer overhead and profit. Hard costs include building and parking construction costs. Soft costs include architectural and engineering costs, property taxes and insurance. General conditions include items such as the trailer, utilities, security, supervision and material storage, if any, associated with the job site. Developer overhead and profit refers to the fee the developer charges for constructing the project, including the administration costs and the developer's profit. Minimum developer profit is estimated at 12% of total development costs, based on DRA experience and input from developers and the Building Industry Association. This level is considered a baseline profit or "hurdle rate," representing the minimum necessary for the City of Tustin Affordability Gap and leveraged Financing Analysis Page 25 deal to proceed. Developer overhead is estimated at 4% of total development costs. Developer overhead cost line items typically represent a larger percentage of costs on small projects than larger projects. For market -rate owner housing, developer profit is typically measured as a percentage of gross sales revenues (typically 7 - 9 percent), rather than total development cost. However, this measure does not work well with affordable homebuyer units, where the affordable purchase price is often well below total development cost. In DRA's extensive experience with first-time homebuyer programs throughout California, developer profit and overhead for affordable homebuyer developments is typically measured as a percentage of total development cost, usually around 15%. For market -rate rental housing, developer return is commonly measured using a discounted cash flow analysis, which takes into account the annual net cash flow and the ultimate sales proceeds to the project developer/owner over the term of ownership However, the net cash flow and sale value from affordable rental units is severely constrained by the restrictions on rents. For affordable rental housing, the return to the developer typically comes in the form of a developer fee, which is calculated as a percentage of total development cost. For example, the Low Income Housing Tax Credit program used to subsidize affordable rental housing limits developer profit and overhead to 15% of total development cost. Total development costs for the prototypes are presented in Table 15 for the owner prototypes and Table 16 for the renter prototype. The key development cost assumptions used in the analysis are specified in Table 17 and Table 18, referenced below. 5.0 Operating and Financing Cost Assumptions 5.1 General Operating Costs, Rental Prototype Annual operating costs are estimated at $3,600 per unit for the gap analysis, excluding property taxes and reserves, based on interviews with local apartment owners and property managers and DRA experience with rental housing developments throughout Southern California. DRA assumes annual property taxes at 1.20 percent of estimated total development costs. A vacancy allowance of 3% for affordable units is deducted from rental income to compensate for the landlord's potential loss of rental income when units become unoccupied, particularly when tenants move before a new tenant is found. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 26 Table 15 Estimated Prototype Development Costs Owner Housing Prototypes City of Tustin 2008 City of Tustin Affordability Gap and Leveraged Financing Analysis Page 27 Owner 1 Owner 2 Owner 3 Owner 4 Attached Stacked Flat High Density Mixed Use, Townhome Condominium Condominium Ground Floor Gross Site Area in Acres 13.000 13.000 8.000 0.689 No. of Units 234 325 400 20 Parkin Spaces 50 Net Sque Feet Living Area 303,300 371,250 540,000 30,300 Community Space SF 2,500 2,000 0 0 Total Net Square Feet Residential 305,800 373,250 540,000 30,300 Percent Residential 100% 1000/0 100% 66% Total Gross SF Bldg. Area 305,800 373,250 540,000 45,909 Land Acquisition Costs $25,482,600 $24,350,040 $20,908,800 $1,188,000 Site Improvements $14,157,000 $11,325,600 $10,454,400 $396,000 Building/Parking Hard Costs $29,051,000 $31,726,250 $•.1.05,300,000 $4,6 Hard Cost Contingency $2,160,400 $2,152,593 $5,787,720 $25 4,500 4,625 Arch./Eng./Constr. Supervision $1,296,240 $1,291,556 $3,472,632 $152,775 City Development Impact/Processing Fees $7,404,546 $9,514,995 $15,937,526 $750,609 Constniction Loan Fees $919,647 $928,754 $1,859,558 $106,483 Construction Interest $6,644,448 $6,710,244 $11,457,346 $2,516,665 Environmental Phase I $7,500 $7,500 $7,500 $7,500 Soils Testing $40,000 $40,000 $40,000 $20,000 Property Taxes $259,248 $258,31.1 $694,526 $30,555 Insurance $1,296,240 $1,291,556 $3,472,632 $152,775 Sales Commissions $1,081,937 $1,092,651 $2,187,715 $125,274 Selling/Closing Costs $5,409,687 $5,463,256 $10,938,576 $626,371 Developer Overhead $4,327,750 $4,370,605 $8,750,861 $501,097 Developer Profit $8,655,499 $8,741,209 $17,501,721 $1,002,194 TOTAL PROJECT COST $108,193,743 $109,265,118 $218,771,513 $12,527,424 PER UNIT $462,366 $336,200 $546,929 $626,371 PER NET SF $353.81 $292.74 $405.13 $413.45 TOTAL COST, EXCLUDING LAND $82,711,143 $84,915,078 $197,862,713 $11,339,424 PER UNIT $353,466 $261,277 $494,657 $566,971 PER NET SF $270.47 $227.50 $366.41 $374.24 City of Tustin Affordability Gap and Leveraged Financing Analysis Page 27 Table 16 Estimated Prototype Development Costs Rental Housing Prototype: Stacked Flat Apartments City of Tustin 2008 Land Acquisition Renter Prototype Stacked Flat Apartments Acres 13.000 Number of Units 325 Parking Spaces 731 Net Square Feet Living Area 319,150 Total Net Square feet 319,150 Ratio Net/Gross SF 100% Total Gross Square Feet Building Area 319,150 Land Acquisition $24,350,040 Site Improvements Building/Parking Hard Costs $49,468,250 Hard Cost Contingency $3,039,693 AnchictectureVEngineering/Const&. Supervision $4,255,570 Development Impact and Processing Fees $8,315,308 ALTA Survey $3,000 Environmental Phase 1 $7,500 Soils Testing $10,000 Construction Loan Fees $456,065 Constructiowlease-Up Interest $3,095,367 Property Insurance $607,939 Property Taxes During Construction $364,763 Construction Loan Title and Closing $15,000 Appraisal Fees $10,000 $30,000 Market Study/Consulting $25,000 r� ting/l.ea tart -Up 00 51,000 Dev$4,794,504 Developer Profit $9,589,008 Total Projed Costs $119,862,606 Total Cost Per Unit $368,808 Total Cost Pier Net Square Foot $375.57 TOTAL COSTS, WITHOUT LAND $95,512,566 TOTAL COST PER UNIT $293,885 TOTAL COST PER SQUARE FOOT $299.27 Source: David Paul Rosen & Associates City of Tustin Affordability Cap and Leveraged Financing Analysis Page 28 5.2 Financing Costs Financing costs vary according to the amount of equity invested, the term of the loan, the annual interest rate, and, in the case of ownership projects, mortgage insurance rates. For the purposes of this gap analysis, the amount of the first mortgage for the rental prototype is assumed to be the amortized debt that may be supported by tenant net affordable rents. The balance of project financing is the affordability cost or gap. Loan p=itworthiness typically pegged to the LIBOR plus a spread that varies depending on the lender, of the borrower, and financial market conditions. The LIBOR is currently at a near -historical low of 3.14%. Because this analysis is part of a 5 -year plan, we assume a construction loan interest rate of 8.5% and a permanent loan interest rate of 8.00/6 to account for potential future rate increases during the planning period. With the renter prototype, we assume a conventional construction loan during construction. The construction loan is calculated based on a loan -to -cost ratio of 75% and an average loan balance of 60%. DRA has assumed an 8.5% construction interest rate and a 1.0% construction loan fee. The construction and lease -up period is assumed at 15 months for the renter prototype. We use an 8.0% permanent loan interest rate for the rental prototype. For the owner prototypes, the maximum supportable construction loan is calculated based on a loan -to -cost ratio of 85% and an average loan balance of 60%. DRA has assumed an 8.5% construction interest rate and a 1.0% construction loan fee. The construction period is assumed at 12 months and the sales period at 3 months. For the owner prototypes, DRA assumed homebuyer mortgages based on an effective interest rate of 8.00/6 (combined loan interest and mortgage insurance where appropriate). We assume a 5% downpayment on the owner prototypes. The assumed interest rates are higher than current rates due to the rive -year planning period for the Affordable Housing Strategy. Development cost and financing assumptions for the owner and renter prototypes are summarized in Table 17 and Table 78, respectively. 6,0 Per Unit Affordability Caps For the rental housing prototype, the gap analysis calculates the difference between total development costs and the conventional mortgage supportable by net operating income from restricted rents, based on the above assumptions. For owners, the gap is the difference between development costs and the supportable mortgage plus the buyer's down payment. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 29 Table 17 Development and Financing Cost Auaanpdorts (Munn Howft ?roto"" city of Use 2608 Moto: TDC -Total Development Coss (1) As a penotmtage of COMM costs (site knprovenrents and and building shell hard costs) Source: David P4Lrl Rosas 6 Assodates. City o(Amin M'or&"Iky Gap and L"rapd Fin" Analysts F'a0e 30 Owner 1 Attached Tine Owner 2 Stadced Flat Condominium Owner 3 High Density Condominium Owner 4 Mixed Use, Ground Floor Retail Land Acqutddm CMN Land Cost Pier Gross SF Site Area $4S.00 $43.00 $60.00 $60.00 Land Cost Aw Unit $1091000 $75,000 $521000 $90,000 Developraerrt Cal As anpdom Site knprovement Cow Per Not SF $25.00 $20.00 $30.00 $20.00 Site Improvement Costs per Unit $611000 $35,000 $26,000 $20,000 Unit Hard C utructlon per SF $95.00 $85,00 $195 $155.00 Hard Cost Contingency (1) 5% 5% 5 5 % 5% ArchpectumVEnglnaari (1) �{ 3`x'3%3% 396 Prop" Taxes During Construction (1) 0.60% 0.60% 6.60% 0.60% Insurance During Construction (1) 3.00% 340% 3.00% 3.00% SeliinXA3osing Costs (%TDQ 5.00% 5.00% 5.00% 5.00% Saks Cotrmiukxx (% TDC) 1.00% 1.00% 1.00% 1.00% Developer mai Comkiam C)6 TOC) 4.00% 4.00% 4.00% 4.00% Developer Profit (% TDC) 8.00% 8.00% 8.00% 8.00% Caasbve6ou Lose Corslruction Lam % of TDC 85.00% 85.00% 85.00% 85.00% Construction Loan Amt barest Rabe $91,964,681 $92,875,351 $185,955,786 $10,648,310 Loan Fees 8.50% 8.50% 8.50% 8.50% �8an 1.00% 6040% 1.00% 60.00% 1.00% 60.0D% 1.00% 60AM Construction Sale Pbrlod 12 Months 12 Montls 12 Months 12 Months Total Construction Loan Term 3 Months 15 Monde 3 Months 15 Months 3 Monde 15 Months 3 Months 15 MonIM Construction Loan keenest-ConitnuWOn $4,690,19! $4,736,643 $9,483,745 $543,064 Construction Loan Mgnwt Sale Pb►fod $1,954,249 $1,973,601 $1,973,601 $1,973,601 Total Construction Loan Interest $6,644,448 $6,710,244 $11,457,346 $2,516,665 Construction Lan tents $919,647 $928,754 $1,859,558 $106,483 Moto: TDC -Total Development Coss (1) As a penotmtage of COMM costs (site knprovenrents and and building shell hard costs) Source: David P4Lrl Rosas 6 Assodates. City o(Amin M'or&"Iky Gap and L"rapd Fin" Analysts F'a0e 30 Table 18 Development and Financing Cat Assumptions Rental Prototype: Staduei Flat Apartments City of ?=tin 20011 (1) As a pwev4w of direct costs WN hnprownswus, paridng Nrumm and txdlft dwil Fwd cased. (2) At 1.0% Of corntrudion low amount Sourm. David Paul Rosen & Associates City of7own A fordabllity Gap and lavaragad Rnanaiog Analysts I%Ir 31 Renter hototype Stacked Flat Apartments Lae&Oufldhj Acquisition Cost Land Cast tier Gross SF Site Area $43.00 Land/BulkOng Cost Per Unit $70,000 Development Cat Aaunrptlons Site Improvement Costs per SF Site Area $20.00 Site Improvement Costs per Unit $35,000 Hard Construction Costs per Net Bldg. SF ;155.00 Hard Cost Contkgwcy (1) 5.009E Architlecdxal/EnAineerinx (1) 7.0096 property Taxes During Constnictlon (1) 0.60% insurance During Construction (1) 1.00% Marketinq/Leasing/Start-Up Fbr Unit :1,000 Developer Overhead N TDO 4.00% Developer Pro& (% TDCQ 8.00% Construction Loan Constriction Loan As a % of TDC 75.00% Construction Loan Amount $89,896,9SS kowe t Rate 850% Loan Fees W $898,970 Average Loan Balance (Com&/Lease-Up) 60.00% Coruttuction Period 12 Months LM&L)p Period 3 Months Total Construction Loan Term 15 Months Construction Loan Interest $5,730,931 Aernwwnt loan Debt eovew Ratio 1.25 Morglage Term 30 years. Intenmt Rate 8.00% (1) As a pwev4w of direct costs WN hnprownswus, paridng Nrumm and txdlft dwil Fwd cased. (2) At 1.0% Of corntrudion low amount Sourm. David Paul Rosen & Associates City of7own A fordabllity Gap and lavaragad Rnanaiog Analysts I%Ir 31 Attachment A contains the per unit affordability gap calculations for the ownership housing prototyped by prototype and unit bedroom count. Attachment 0 contains the per unit affordability gap calculations for the rental housing prototype by unit bedroom count. 7.0 Renter Leveraged Financial Analysis DRA modeled the renter housing prototype assuming various forms of non -local financing assistance. We examined the following leverage scenarios: 1. 9% Low Income Housing Tax Credits (Federal only)'; 2. 4% tax credits with tax-exempt bonds; and 3. 4% tax credits, tax-exempt bonds, and MHP. The leveraged financing analysis incorporates the assumptions of the gap analysis described above, with a few exceptions. Differences between the gap analysis and leveraged financing assumptions are described below. 7.1 Hard Construction Costs As noted above, the affordability gap analysis evaluates market -rate prototypes and does not assume prevailing wages. Private residential projects built on private property are not subject to prevailing wages unless the projects are built pursuant to an agreement with a State agency, redevelopment agency, or local public housing authority. In addition, certain types of public funding do not necessarily require prevailing wages (for example, tax credits). However, the State of California Department of Housing and Community Development's Multifamily Housing Program (MHP) does require prevailing wages. Therefore, we have assumed prevailing wages for the financing scenario that uses MHP funding. We have increased hard construction costs by 25% as an estimate of the cost differential associated with prevailing wages. 7.2 Eligible Basis and Tax Credit Equity Calculations In calculating eligible basis for the purposes of determining Federal tax credits, we have used 2007 non -elevator threshold basis limits for Orange County. We also used the 1300/6 Since Orange County was a designated Difficult to Develop Area (DDA) in 2007, projects in the County were eligible for a 130% basis boost but not for State tax credits. City of Tustin Affordability Gap and Leveraged Financing Analysis Page 32 basis boost because Orange County was designated by HUD as a Difficult to Develop Area (DDA) in 2007. We have assumed tax credit pricing of $1.00 for the 9% tax credit scenario and $1.05 for the 4% tax credit/bond scenarios. 7.3 Income Targeting Scenarios, Occupancy Standards and Affordable Rents The leveraged financin* alternatives analyzed require specific income targeting for a project to be competitive. We have modeled the highest income profile to score maximum points when competing for these financial resources under each scenario. The income targeting under each source is summarized in Table 19 below. For more information on each of these financing sources, see DRA's report entitled Affordable Housing Assistance Programs, presented under separate cover. Table 19 Income Targeting Assumptions for Leveraged Financing Scenarios City of Tustin Source: David Paul Rosen & Associates The California Tax Credit Allocation Committee (CTCAQ requires affordable rents to be calculated assuming an occupancy standard of 1.5 persons per bedroom. If Redevelopment Agency funds are used to finance the project, the California Health and Safety Code occupancy standard of one person per bedroom plus one applies. This City of Tustin Affordability Gap and I.everaged Financing Analysis Page 33 Income Targeting Assumptions I Average Affordability Leveraged Financing (% of Units at % Area Based on Income Targeting Source/Scenario Median Income) 90 Area Median Income 9% Low Income Housing Tax 10% of units m 30% AMI 47% AMI Credits 15% of units 0 45% AMI 75% of units m. 509'6 AMI 4% Low Income Housing Tax 306/6 of units m 509'6 AMI 57% AMI Credits, Tax -Exempt Bonds 70% of units ® 60% AMI 4% Low Income Housing Tax 30% of units O 30% AMI 51 % AMI Credits, Tax -Exempt Bonds, 70% of units ® 606/6 AMI and MHP Source: David Paul Rosen & Associates The California Tax Credit Allocation Committee (CTCAQ requires affordable rents to be calculated assuming an occupancy standard of 1.5 persons per bedroom. If Redevelopment Agency funds are used to finance the project, the California Health and Safety Code occupancy standard of one person per bedroom plus one applies. This City of Tustin Affordability Gap and I.everaged Financing Analysis Page 33 analysis therefore calculates household size using the lesser of the two occupancy standards, or the lesser of 1.5 persons per bedroom and one person per bedroom plus one. 7.4. Operating Costs and Vacancy For the leveraged financing analysis, annual operating costs are estimated at $3,600 per unit and annual reserve deposits are estimated at $400 per unit, based on DRA's experience with affordable housing development and operations in Orange County and throughout Southern California. We assume an annual property tax rate equal to 1.2 percent of total development costs. For the leveraged financing analysis, we have assumed a vacancy rate of 51/6, consistent with the requirements of most leveraged financing sources, even though actual vacancy in well-run affordable housing developments are often 3% or less. Table' 20 summarizes the construction and permanent sources and uses for the Renter Prototype under the leveraged financing scenarios examined. To make this financing scenario feasible, the permanent and financing gap required would have to be filled by other subsidy sources, namely local housing resources. In addition, for the 9% tax credit scenario, the rental prototype would have to be built in four phases, to comply with the current limit of $2. million in federal tax credits per project under the 9% tax credit program. There is also a 150 -unit size limit under the 9% tax credit program. The tax- exempt bond scenario without MHP would have to be built in two phases, to comply with the current bond limit of $30 million per project. With MHP, the tax-exempt bond scenario would have to be built in three phases, due to the higher costs associated with prevailing wages, which are required under MHP. The leveraged financing analysis is detailed in Attachment C for the Renter Prototype. city of 7 ustin Affordability Gap and leveraged Financing Analysis Page 34 Table 20 Construction and Permanent Sources and Uses Leveraged Financing Analysis Rental Housing Prototype: Stacked Flat Apartments City of Tustin 2008 FUNDING SCENARIO 9% Tax Credits 4% Tax Credits 4% Tax Credits, Tax Exempt Bonds Bonds, MHP Number of Units 325 325 325 Acres 13.00 13.00 13.00 Units/Acre 25.00 25.00 25.00 SOURCES OF FUNDS CONSTRUCTION Tax Credit Equity $1,601,192 $813,772 $951,186 Construction Loan $93,857,236 $59,393,300 $67,161,024 MHP (1) $0 $0 $22,609,147 Affordable Housing Program (AHP) (1) $1,625,000 $1,625,000 $1,625,000 Temporary Gap Financing Required (2; $17,317,865 $48,263,749 $31,205,104 TOTAL SOURCES $114,401,293 $110,095,822 $123,551,461 PERMANENT Federal Tax Credit Equity $80,059,618 $40,688,609 $47,559,315 State Tax Credit Equity $0 $0 $0 MHP (1) $0 $0 $22,609,147 Affordable Housing Program (AHP) (1) $1,625,000 $1,625,000 $1,625,000 Permanent Financing $14,207,327 $22,245,144 $16,145,037 Gap Financing Required $18,509,348 $45,537,069 $35,612,962 TOTAL SOURCES $114,401,293 $110,095,822 $123,551,461 Permanent Gap Financing/Unit $56,952 $140,114 $109,578 USES OF FUNDS CONSTRUCTION AND SOFT COSTS $114,401,293 $110,095,822 $123,551,461 TOTAL COST/UNIT $352,004 $338,756 $380,1S8 (1) Estimated at $5,000 per unit. (2) Equals temporary gap financing required after assuming 2 percent of total tax credit equity is used to fund construction and soh costs during construction. Source: David Paul Rosen & Associates City of Tustin Affordability Gap and Leveraged Financing Analysis Page 35 Table A-1 PER UNIT PROTOTYPE DEVELOPMENT COSTS BY BEDROOM COUNT OWNER PROTOTYPE PT CITY OF TUSTIN Prototype Description: Atta+WTowMome TYPE AND SIZE OF UNIT Total Number of Units: 234 tkdb 2 Bedroom 3 Bedroom 4 Bedroom 1,050 Net S.F. 1,300 Net S.F. 1,700 Net S.F. 11.714 1,059 Total S.F. 1 1.311 Total S.F. 1 Total S.F. 1 Hard Construction Carts She Improvements $60,500 /DU $60,500 560,500 $601500 UnWPerldng Conor. Costs $102.06 Mr. S.F. $108,051 $133,778 $174,940 Total Hard Costs 5168,551 $194,278 $235,440 Development Impact and Proceashng Fees $31,643 /Untt531,643 $31,643 $31,643' Indirect/SoR Costa $72,457 /DU I $72,457 $72,457 $72,457 Total Costs (Except Land and Overhead/Proffo $272,652 $298,378 $339,541 LarrriCosts $106,900 /DU $108,900 $108,900 $108,900 D@% Fee/Profit & Overhead 12°% $52,030 $55,538 $61,151 Total Project Casts Pkr DwelBng Unit $433,582 $462,816 $509,592 (1) Assumes efficiency ratio (net/g= SF) of: 101% Source: David Paul Rosen & AssodaaL Cky d Turtrn ABordaNky Gap and Lr-apd Maly* PW A-1 Table A-2 PER UNIT PROTOTYPE DEVELOPMENT COSTS BY BEDROOM COUNT OWNER PROTOTYPE 92 CITY OF TUST IN SUAW pat TYPE AND SIZE Ae •,SIT Prototype De"Wra Told Number of Lkd* 325 Unit 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom 950 Net S.F. 1,050 No S.F. 1,200 Net S.F. 1,500 Net S.F. 955 Tots) S.f.(1) 1,056 Total S.F (1 1 206TOWI S.F. 0 1 508Taal S F. Hard ConstrUctim Coeb $34,846 / DU (34,848 534,848 $34,848 $34,848 She d UnItlParklrgCortstr.Cosar 590.77/Gr.S.F $86,693 $95,819 $109,507 $136,884 Tbtal (,lard Comb $121,541 5130,667 $144,335 ST 71,732 Impact and $29,277 /Unit $29,277 529.277 $29,277 529,277 Procesdrt6 Fees Indired/So!! Cow $52,566 /DU $52;566 $S2,566 $52,566_ $52,566 Told Cab (Except Land and Overhead/h°BQ $203,384 $212,509 $226,198 $253,575 Land Crib $74,923 MU $74,923 $74,923 $74,923 574,923 Dee. Feen"M i Ortni"d 12% $37,951 $39,195 $41,062 $44,795 Tota) h*d Cods Per Dwell* Urdt $316,258 $326,628 $342,183 537303 (1) Aum eftla cy ratio (neftross SF) of: 101% Souroc David Paul Rosen d Associates. tkydTuwn f►rA-2 A fwdsbft CAP and L,,w" d Fke" Anatyab Table A3 PER UNIT PROTOTYPE DEVELOPMENT COSTS BY BEDROOM COUNT OWNER PROTOTYPE 03 CITY OF TUSTIN FYsk Do-ity P-wm Dacrlptlon: Condornfakms Tota) Number of Lhi tx 400 Un(b Hard Cosrtrowdorr Coals Site Impmmvetnenls 526,136 /DU UnkWaking Conatr. Cosh 520S.72 /Gr. S.F. TOW Hard Cab Dei , mem impact and Procea ft Few $39,844 /Unit Indirect/Soft Cab $85,326 /DU t IT otd Cab Oxcept Land avid OverheadtProft i Land Costs $52,172 /DU 10m Fee/ProAt & orad 12% TOW Projeet Cab Per DwelMd Unit (1) Assurnes of sency ratio (norm SF) of 100% Source: David Paul Rosen & Anoclates. J City d Mtn AAvda Cap and U-2pd W - K" Malyjk Bedrt:om 'O=S. /,000 Net S.F. OOOTotalS.F. 1) 2 Bedroom 1,150 Nat S.F. 1,1501otalS.F 1 3 Bedroom 1,650 =Net 1650TOtaiS.F.(1) 4 Bedroom 11800 Net S.F. 1800Tota1S.F.(1) $26,136 5205,718 $231,854 $26,136 $236,576 5262,712 $26,136 $339,435 $365,571 526,136 $370,292 $396,428 $39,844 $39,844 $39,844 $39,844 I $85,326 585,326 $85,326 $85,326 5357,014 $387,882 $490,741 $521,598 $51,272 $52,272 $52,271 552,272 $55,813 $60,021 $74,047 $78,255 $465,109 SSW, 175 $617,060 $652,125 NV A•3 Table A-4 PER UNIT PROTOTYPE DEVEIOrMENT COSTS BY BEDROOM COUNT OWNER PROTOTYPE $4 CITY OF TUSTIN Mixed Ute, Cm nrd rrototme DeK?fpdom Mbar Retail Total Nundm of Units 20 Unit Hud Constnwdm Costs 5me knprovemenb UnWPukkig Cornu Costs TOW Hud Cab $19,800/DU $163.40/'Gr. S.F. �knpact W Proeewirrg Fed $37,530/Unit Cab $186,920 /DU Total Coati (Except lead and Overbead/Pmm land Cab $59,400 /DU Dec Fee/Aof)t i OverMW 129E Tow Project Cab Per Dwelling Unit $59,400 (1) A L mea efficiency ratio U Worm SF) of, 100% So, David Paul Rosen & AssoclateL 1 Bedroom 2 Bedroom 3 Bedroom 1,100 Net S.F. 1,400 Nat S.F. 1,750 Net S.F. 100 Total S.F. (1) I 1,400Total S.F. (1) I 1.750ToW S.F $19,800 $179,744 $199,544 $19,800 $228,765 $248,565 $19,800 $285,956 $305,756 $37,530 $37,530 $37,530 $186,920 $186,920 $186,920 $423,994 $473,015 5530,206 $59,400 $59,400 $59,400 $65,917 $72,602 $80,401 $549,312 $605,017 $670,007 C!q a(Tra;in Af edabW Gap and L-aW Fn JIN A-0Yu Pap M Table A-5 Homeowner Subsidy Requirements Owner 1 Attached Townhome Two Bedroom City of Tustin (1) Income limit for a family of 3. (2) At 300/6 of gross income for low income and 35% of gross income for moderate income households. (3) Based on current utility allowances from County of Orange Housing and Community Services Dept. Assumes homeowner pays for basic electric, electric heating, cooking, and water heating, water, trash and sewer. (4) Based on 1.20% average tax rate. (5) Based on 30 -year mortgage at 8.00% (6) Assumed to include downpayment at 5.0% of purchase price; (7) Total development costs of: $433,582 less buyer downpayment, less supportable mortgage. Source: David Paul Rosen & Associates. J City of Tustin Affordability Gap and Leveraged Financing Analysis Page M1 50% of 70% of 110% of Median Median Median Income Level (1) $35,415 $49,581 $77,913 Affordable Monthly Housing Cost (2) $885 $1,240 $2,272 Less: Monthly Utility Allowance (3) $110 $110 $110 Less: Homeowner Association Dues $175 $175 $175 Less: Property Insurance $50 $50 $50 Available for Principal, Interest, Taxes $550 $905 $1,937 Less: Property Taxes (4) $79 $130 $278 Supportable Mortgage Before Prop. Taxes (5) $75,007 $123,272 S264,044 Assumed Assessed Value at Sale $78,955 $129,760 $277;941 Available for Mortg. Principal and Interest $471 $775 $1,660 Supportable Mortgage (5) $64,247 $105,588 $226,165 Affordable Purchase Price (6) $67,628 $111,145 $238,069 Buyer Downpayment $3,381 $5,557 $11,903 Required Capital Subsidy (7) $365,953 $322,437 $195,513 (1) Income limit for a family of 3. (2) At 300/6 of gross income for low income and 35% of gross income for moderate income households. (3) Based on current utility allowances from County of Orange Housing and Community Services Dept. Assumes homeowner pays for basic electric, electric heating, cooking, and water heating, water, trash and sewer. (4) Based on 1.20% average tax rate. (5) Based on 30 -year mortgage at 8.00% (6) Assumed to include downpayment at 5.0% of purchase price; (7) Total development costs of: $433,582 less buyer downpayment, less supportable mortgage. Source: David Paul Rosen & Associates. J City of Tustin Affordability Gap and Leveraged Financing Analysis Page M1 Table A-6 Homeowner Subsidy Requirements Owner 1 Attached Townhome Three Bedroom City of Tustin Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utility Allowance (3) Less: Homeowner Association Dues Less: Property Insurance Available for Principal, Interest, Taxes Less: Property Taxes (4) Supportable Mortgage Before Prop. Taxes (5) Assumed Assessed Value at Sale Available for Mortg. Principal and Interest Supportable Mortgage (5) Affordable Purchase Price (6) Buyer Downpayment Required Capital Subsidy (7) 50% of 70% of 110% of Median Median Median $39,350 $55,090 $86,570 $984 $1,377 $2,525 $148 $148 $148 $175 $175 $175 $50 $50 $50 $611 $1,004 $2,152- $88 $144 $309 $83,235 $136,863 $293,276 $87,616 $144,066 $308,712 $523 $860 $1,843 $71,295 $117,229 $251,204 $75,047 $123,399 $264,425 $3,752 $6,170 $13,221 $387,769 $339,417 $198,391 (1) Income limit for a family of 4. (2) At 30% of gross income for low income and 35% of gross income for moderate income households. (3) Based on current utility allowances from County of Orange Housing and Community Services Dept. Assumes homeowner pays for basic electric, electric heating, cooking, and water heating, water, trash and sewer. (4) Based on 1.20% average tax rate. (5) Based on 30 -year mortgage at: 8.00% (6) Assumed to include downpayment at 5.0% of purchase price, (7) Total development costs of: $462,816 less buyer downpayment, less. supportable mortgage. Source: David Paul Rosen & Associates. City of Tustin Affordability Gap and Leveraged rinancing Analysis Page A-2 - Table A-7 Homeowner Subsidy Requirements Owner 1 Attached Townhome Four Bedroom City of Tustin 50% of 70% of 110% of Median Median Median Income Level (1) $42,498 $59,497 $93,496 Affordable Monthly Housing Cost (2) $1,062 $1,487 $2,727 Less: Monthly Utility Allowance (3) $164 $164 $164 Less: Homeowner Association Dues $175 $175 $175 Less: Property Insurance $50 $50 $50 Available. for Principal, Interest, Taxes $673 $1,098 $2,338 Less: Property Taxes (4) $97 $158 $335 f Supportable Mortgage Before Prop. Taxes (5) $91,780 $149,698 $318,625 Assumed Assessed Value at Sale $96,611 $157,577 $335,394 Available for Mortg. Principal and Interest $577 $941 $2,003 Supportable Mortgage (5) $78,614 $128,223 $272,916 Affordable Purchase Price (6) $82,751 $134,971 $287,280 Buyer Downpayment $4,138 $6,749 $14,364 Required Capital Subsidy (7) $426,840 $374,620 $222,312 (1) Income limit for a family of 5. (2) At 30% of gross income for low income and 35% of gross income for moderate income households. (3) Based on current utility allowances from County of Orange Housing and Community Services Dept. Assumes homeowner pays for basic electric, electric heating, cooking, and water heating„ water, trash and sewer. (4) Based on 1.20% average tax rate. (5) Based on 30 -year mortgage at: (6) Assumed to include downpayment at 5.0% of purchase price; (7) Total development costs of: $509,592 less buyer downpayment less supportable mortgage. Source: David Paul Rosen & Associates. City of Tustin Affordability Gap and Leveraged Financing Analysis Page A-3 Table A-8 Homeowner Subsidy Requirements Owner 2 Stacked Flat Condominium One Bedroom City of Tustin Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utility Allowance (3) Less: Homeowner Association Dues Less: Property Insurance Available for Principal, Interest, Taxes Less: Property Taxes (4) Supportable Mortgage Before Prop. Taxes (5) Assumed Assessed Value at Sale Available for Mortg. Principal and Interest Supportable Mortgage (5) Affordable Purchase Price (6) Buyer Downpayment Required Capital Subsidy (7) 50% of 70% of Median Median $31,480 $44,072 $787 $1,102 $93 $175 $50 $469 $67 $63,917 $67,281 $402 $54,748 $57,629 $2,881 $258,629 $93 $175 $50 $784 $112 $106,819 $112,441 $671 $91,495 $96,311 $4,816 $219,947 110% of Median $69,256 $2,020 $93 $175 $50 $1,702 $244 $231,950 $244,158 $1,458 $198,675 $209,132 $10,457 $107,126 (1) income limit for a family of 2. . (2) At 300/6 of gross income for low income and 35% of gross income for moderate income households. (3) Based on current utility allowances from County of Orange Housing and Community Services Dept. Assumes homeowner pays for basic electric, electric heating, cooking, and water heating, water, trash and sewer. (4) Based on 1.20% average tax rate. (5) Based on 30 -year mortgage at: 8.00% (6) Assumed to include downpayment at 5.0% of purchase price; (7) Total development costs of: $316,258 less buyer downpayment, less affordable mortgage. Source: David Paul Rosen & Associates. City of Tustin Affordability Gap and leveraged Financing Analysis Page A -t Table A-9 Homeowner Subsidy Requirements Owner 2 Stacked Flat Condominium Two Bedroom City of Tustin Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utility Allowance (3) Less: Homeowner Association Dues Less: Property Insurance Available for Principal, Interest, Taxes Less: Property Taxes (4) Supportable Mortgage Before Prop. Taxes (5) Assumed Assessed Value at Sale Available for Mortg. Principal and Interest Supportable Mortgage (5) Affordable Purchase Price (6) Buyer Downpayment Required Capital Subsidy (7) 50% of 70% of 110% of Median Median Median $35,415 $49,581 $77,913 $885 $1,240 $2,272 $110 $110 $110 $175 $175 $175 $50 $50 $50 $550 $905 $1,937 $79 $130 $278 $75,007 $123,272 $264,044 $78,955 $129,760 $277,941 $471 $775 $1,660 $64,247 $105,588 $226,165 $67,628 $111,145 $238,069 $3,381 $5,557 $11,903 $259,000 $215,483 $88,559 (1) Income limit for a family of 3. (2) At 30% of gross income for low income and 35% of gross income for moderate income households. (3) Based on current utility allowances from County of Orange Housing and Community Services Dept. Assumes homeowner pays for basic electric, electric heating, cooking, and water heating, water, trash and sewer. (4) Based on 1.20% average tax rate. (5) Based on 30 -year mortgage at: 8.00% (6) Assumed to include downpayment at 5.0% of purchase price; (7) Total development costs of: $326,628 less buyer downpayment, less affordable mortgage. Source: David Paul Rosen & Associates. City of Tustin Affordability Gap and leveraged Financing Analysis Page A-2 Table A-10 Homeowner Subsidy Requirements Owner 2 Stacked Flat Condominium Three Bedroom City of Tustin Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utility Allowance (3) Less: Homeowner Association Dues Less: Property Insurance Available for Principal, Interest, Taxes Less: Property Taxes (4) Supportable Mortgage Before Prop. Taxes (5) Assumed Assessed Value at Sale Available for Mortg. Principal and Interest Supportable Mortgage (5) Affordable Purchase Price (6) Buyer Downpayment Required Capital Subsidy (7) 50% of 70% of Median Median $39,350 $55,090 $984 $1,377 $148 $175 $50 $611 $88 $83,235 $87,616 $523 $71,295 $75,047 $3,752 $267,136 $148 $175 $50 $1,004 $144 $136,863 $144,066 $860 $117,229 $123,399 $6,170 $218,784 110% of Median $86,570 $2,525 $148 $175 $50 $2,152 $309 $293,276 $308,712 $1,843 $251,204 $264,425 $13,221 $77,758 (1) Income limit for a family of 4. (2) At 30% of gross income for low income and 35% of gross income for moderate income households. (3) Based on current utility allowances from County of Orange Housing and Community Services Dept. Assumes homeowner pays for basic electric, electric heating, cooking, and water heating, water, trash and sewer. (4) Based on 1.20% average tax rate. (5) Based on 30 -year mortgage at: 8.00% (6) Assumed to include downpayment at 5.0% of purchase price; (7) Total development costs of: $342,183 less buyer downpayment, less affordable mortgage. Source: David Paul Rosen & Associates. City of Tustin Affordability Cap and Leveraged Financing Analysis Page A-3 Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utility Allowance (3) Less: Homeowner Association Dues Table A-11 Homeowner Subsidy Requirements Owner 2 Stacked Flat Condominium Four Bedroom City of Tustin 50% of 70% of Median Median $42,498 $59,497 Less: Property Insurance Available for Principal, Interest, Taxes Less: Property Taxes (4) Supportable Mortgage Before Prop. Taxes (5) Assumed Assessed Value at Sale Available for Mortg. Principal and Interest Supportable Mortgage (5) Affordable Purchase Price (6) Buyer Downpayment Required Capital Subsidy (7) $1,062 $164 $175 $50 $673 $97 $91,780 $96,611 $577 $78,614 $82,751 $4,138 $290,542 $1,487 $164 $175 $50 $1,098 $158 $149,698 $157,577 $941 $128,223 $134,971 $6,749 $238,322 110% of Median $93,496 $2,727 $164 $175 $50 $2,338 $335 $318,625 $335,394 $2,003 $272,916 $287,280 $14,364 $86,013 (1) Income limit for a family of 5. (2) At 30% of gross income for low income and 35% of gross income for moderate income households. (3) Based on current utility allowances from County of Orange Housing and Community Services Dept. Assumes homeowner pays for basic electric, electric heating, cooking, and water heating, water, trash and sewer. (3) Includes homeowner association dues and/or other maintenance expenses. (4) Based on 1.20% average tax rate. (5) Based on 30 -year mortgage at: 8.00°% (6) Assumed to include downpayment at 5.0% of purchase price; (7) Total development costs of: $373,293 less buyer downpayment, less affordable mortgage. Source: David Paul Rosen & Associates. Cry of Tustin Affordability Gap and Leveraged Financing Analysis Page A-4 Table A-12 Homeowner Subsidy Requirements Owner 3 High Density Condominium One Bedroom City of Tustin Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utility Allowance (3) Less: Homeowner Association Dues Less: Property Insurance Available for Principal, Interest, Taxes Less: Property Taxes (4) Supportable Mortgage Before Prop. Taxes (5) Assumed Assessed Value at Sale Available for Mortg. Principal and Interest Supportable Mortgage (5) Affordable Purchase Price (6) Buyer Downpayment Required Capital Subsidy (7) 50% of 70% of 110% of Median Median Median $31,480 $44,072 $69,256 $787 $1,102 $2,020 $93 $93 $93 $175 $175 $175 $50 $50 $50 $469 $784 $1,702 $67 $112 $244 $63,917 $106,819 $231,950 $67,281 $112,441 $244,158 $402 $671 $1,458 $54,748 $91,495 $198,675 $57,629 $96,311 $209,132 $2,881 $4,816 $10,457 $407,480 $368,798 $255,977 (1) Income limit for a family of 2. (2) At 30% of gross income for low income and 35% of gross income for moderate income households. (3) Based on current utility allowances from County of Orange Housing and Community Services Dept. Assumes homeowner pays for basic electric, electric heating, cooking,, and water heating, water, trash and sewer. (4) Based on 1.20°/6 average tax rate. (5) Based on 30 -year mortgage at: 8.00% (6) Assumed to include downpayment at 5.0% of purchase price; (7) Total development costs of: $465,109 less buyer downpayment, less affordable mortgage. Source David Paul Rosen & Associates. City of Tustin Affordability Gap and Leveraged Financing Analysis Page A-1 Table A-13 Homeowner Subsidy Requirements Owner 3 High Density Condominium Two Bedr000m City of Tustin Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utility Allowance (3) Less: Homeownet Association Dues Less: Property Insurance Available for Principal, Interest, Taxes Less: Property Taxes (4) } Supportable Mortgage Before Prop. Taxes (5) Assumed Assessed Value at Sale Available for Mortg. Principal and Interest Supportable Mortgage (5) Affordable Purchase Price (6) Buyer Downpayment Required Capital Subsidy (7) 50% of 70% of Median Median $35,415 $49,581 $885 $1,240 $110 $175 $50 $550 $79 $ 75,007 $78,955 $471 $64,247 $67,628 $3,381 $432,547 $110 $175 $50 $905 $130 $123,272 $129,760 $775 $105,588 $111,145 $5,557 $389,030 110% of Median $77,913 $2,272 $110 $175 $50 $1,937 $278 $264,044 $277,941 $1,660 $226,165 $238,069 $11,903 $262,106 (1) Income limit for a family of 3. (2) At 30% of gross income for low income and 35% of gross income for moderate income households. (3) Based on current utility allowances from County of Orange Housing and Community Services Dept. Assumes homeowner pays for basic electric, electric heating, cooking, and water heating, water, trash and sewer. (4) Based on 1.20% average tax rate. (5) Based on 30 -year mortgage at: 8.00% (6) Assumed to include downpayment at 5.0% of purchase price, (7) Total development costs of: 5500,175 less buyer downpayment, less affordable mortgage. Source: David Paul Rosen & Associates. City of Tustin Affordability Gap and Leveraged Financing Analysis Page A-2 Table A-14 Homeowner Subsidy Requirements Owner 3 High Density Condominium Three Bedroom City of Tustin (1) Income limit for a family of 4. (2) At 300/6 of gross income for low income and 35% of gross income for moderate income households. and (3) Assumon es homeowner pays ent utility fo basic electric, electric heating,unty of Orange cooking, and water heating, warvicester, Dept. trash and sewer. (4) Based on 1.20% average tax rate. 800% (5) Based on 30 -year mortgage at: (6) Assumed to include downpayment at 61 0°0%60 of purchase price; (7) Total development cosofless buyer downpaymtt, less affordable mortgage. Source David Paul Rosen & Associates. City of Tustin Page A-3 Affordability Gap and Leveraged Financing Analysis 50% of 70% of 110% of Median Median Median Income Level (1) $39,350 $55,090 $86,570 Affordable Monthly Housing Cost (2) $984 $1,377 $2,525 Less: Monthly utility Allowance (3) ,$148 $148 $148 Less: Homeowner Association Dues $175 $175 $175 Less: Property Insurance $50 $50 $50 Available for Principal, Interest, Taxes $611 $1,004 2,152 Less: Property Taxes (4) $88 $144 $309 Supportable Mortgage Before Prop. Taxes (5) $83,235 $136,863 $293,276 Assumed Assessed Value at Sale $87,616 $144,066 $308,712 Available for Mortg. Principal and interest $523 $860 $1,843 Supportable Mortgage (5) $71,295 $117,229 $251,204 Affordable Purchase Price (6) $75,047 $123,399 $264,425 Buyer Downpayment $3,752 $6,170 $13,221 Required Capital Subsidy (7)' $542,013 $493,661 $352,635 (1) Income limit for a family of 4. (2) At 300/6 of gross income for low income and 35% of gross income for moderate income households. and (3) Assumon es homeowner pays ent utility fo basic electric, electric heating,unty of Orange cooking, and water heating, warvicester, Dept. trash and sewer. (4) Based on 1.20% average tax rate. 800% (5) Based on 30 -year mortgage at: (6) Assumed to include downpayment at 61 0°0%60 of purchase price; (7) Total development cosofless buyer downpaymtt, less affordable mortgage. Source David Paul Rosen & Associates. City of Tustin Page A-3 Affordability Gap and Leveraged Financing Analysis Table A-15 Homeowner Subsidy Requirements Owner 3 High Density Condominium Four Bedroom City of Tustin Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utility Allowance (3) Less: Homeowner Association Dues Less: Property Insurance Available for Principal, Interest, Taxes Less: Property Taxes (4) Supportable Mortgage Before Prop. Taxes (5) Assumed Assessed Value at Sale Available for Mortg. Principal and Interest Supportable Mortgage (5) Affordable Purchase Price (6) Buyer Downpayment Required Capital Subsidy (7) 50% of 70% of 110% of Median Median Median $42,498 $59,497 $93,496 $1,062 $1,487 $2,727 $164 $164 $164 $175 $175 $175 $50 $50 $50 $673 $1,098 $2,338 $97 $158 $335 $91,780 $149,698 $318,625 $96,611 $157,577 $335,394 $577 $941 $2,003 $78,614 $128,223 $272,916 $82,751 $134,971 $287,280 $4,138 $6,749 $14,364 $569,374 $517,154 $364,845 (1) Income limit for a family of 5. (2) At 30°% of gross income for low income and 35% of gross income for moderate income households. (3) Based on current utility allowances from County of Orange Housing and Community Services Dept. Assumes homeowner pays for basic electric, electric heating, cooking, and water heating, water, trash and sewer. (4) Based on 1.20% average tax rate. (5) Based on 30 -year mortgage at: 8.00% (6) Assumed to include downpayment at 5.00/0 of purchase price; (7) Total development costs of: $652,125 1 less buyer downpayment, less affordable mortgage. Source: David Paul Rosen & Associates. City of Tustin Affordability Cap and Leveraged Financing Analysis Page A-4 Table A-16 Homeowner Subsidy Requirements Owner 4 Mixed Use, Ground Floor Retail One Bedroom City of Tustin Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utility Allowance (3) Less: Homeowner Association Dues Less: Property Insurance Available for Principal, Interest, Taxes Less: Property Taxes (4) Supportable Mortgage Before Prop. Taxes (5) Assumed Assessed Value at Sale I . Available for Mortg. Principal and Interest Supportable Mortgage (5) Affordable Purchase Price (6) Buyer Downpayment Required Capital Subsidy (7) 50%0( 70% of Median Median $31,480 $44,072 $787 $1,102 $93 $175 $50 $469 $67 $63,917 $67,281 $402 $54,748 $57,629 $2;881 $491,683 $93 $175 $50 $784 $112 $106,819 $112,441 $671 $91,495 $96,311 $4,816 $453,001 110% of Median $69,256 $2,020 $93 $175 $50 $1,702 $244 $231,950 $244,158 $1,458 $198,675 $209,132 $10,457 $340,180 (1) Income limit for a family of 2. (2) At 30% of gross income for low income and 35% of gross income for moderate income households. Assumes homeowner pays for basic electric, electric heating, cooking, and water heating, water, trash and sewer. (3) Includes homeowner association dues and/or other maintenance expenses. (4) Based on 1.209'o average tax rate. (5) Based on 30 -year mortgage at: 8.00% (6) Assumed to include downpayment at 5.0% of purchase price; (7) Total development costs of: $549,312 less buyer downpayment, less affordable mortgage. Source: David Paul Rosen & Associates. City of Tustin Page A-1 Affordability Gap and Leveraged Financing Analysis Table A-17 Homeowner Subsidy Requirements Owner 4 Mixed Use, Ground Floor Retail Two Bedr000m City of Tustin Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utility Allowance (3) Less: Homeowner Association Dues Less: Property Insurance Available for Principal, Interest, Taxes Less: Property Taxes (4) Supportable Mortgage Before Prop. Taxes (5) Assumed Assessed Value at Sale . Available for Mortg. Principal and Interest Supportable Mortgage (5) Affordable Purchase Price (6) Buyer Downpayment Required Capital Subsidy (7) 50% of 70% of Median Median $35,415 $49,581 $885 $1,240 $110 $175 $50 $550 $79 $75,007 $78,955 $471 $64,247 $67,628 $3,381 $537,389 $110 $175 $50 $905 $130 $123,272 $129,760 $775 $105,588 $111,145 $5,557 $493,872 110% of Median $77,913 $2,272 $110 $175 $50 $1,937 $278 $264,044 $277,941 $1,660 $226,165 $238,069 $11,903 $366,948 (1) Income limit for a family of 3. (2) At 30% of gross income for low income and 35% of gross income for moderate income households. (3) Based on current utility allowances from County of Orange Housing and Community Services Dept. Assumes homeowner pays for basic electric, electric heating, cooking, and water heating, water, trash and sewer. (3) Includes homeowner association dues and/or other maintenance expenses. (4) Based on 1.20% average tax rate. (5) Based on 30 -year mortgage at: 8.00% (6) Assumed to include downpayment at 5.0% of purchase price; (7) Total development costs of: $605,017 less buyer downpayment, less affordable mortgage. Source: David Paul Rosen & Associates. City of Tustin Affordability Gap and leveraged Financing Analysis Page A-2 I Table A-18 Homeowner Subsidy Requirements Owner 3 Mixed Use, Ground Floor Retail Three Bedroom City of Tustin Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utility Allowance (3) Less: Homeowner Association Dues Less: Property Insurance Available for Principal, Interest, Taxes Less: Property Taxes (4) Supportable Mortgage Before Prop. Taxes (5) Assumed Assessed Value at Sale Available for Mortg. Principal and Interest Supportable Mortgage (5) Affordable Purchase Price (6) Buyer Downpayment Required Capital Subsidy (7) 50% of 70% of 110% of Median Median Median $39,350 $55,090 $86,570 $984 $1,377 $2,525 $148 $148 $148 $175 $175 $175 $50 $50 $50 $611 $1,004 $2,152 $88 $144 $309 $83,235 $136,863 $293,276 $87,616 $144,066 $308,712 $523 $860 $1,843 $71,295 $117,229 $251,204 $75,047 $123,399 $264,425 $3,752 $6,170 $13,221 $594,960 $546,608 $405,582 (1) Income limit for a family of 4. (2) At 30% of gross income for low income and 35% of gross income for moderate income households. (3) Based on current utility allowances from County of Orange Housing and Community Services Dept. Assumes homeowner pays for basic electric, electric heating, cooking, and water heating, water, trash and sewer. (4) Based on 1.20% average tax rate. (5) Based on 30 -year mortgage at: 8.00% (6) Assumed to include downpayment at 5.0% of purchase price; (7) Total development costs of: $670,007 less buyer downpayment, less affordable mortgage. Source David Paul Rosen & Associates. City ofTustin Page A-3 Affordability Gap and Leveraged Financing Analysis Table w Pt:r UnU Developmutt cod+ By U.tt Bedroom Coad RenW Hoesht6 Pro"Vc Sbidwd Fid Aprb * City of Tedta 2006 Prototype Deaatptf m Sbdmd Fiat Aprb * Total Ntnebr d UnfEK 325 Unlis TY 1 BKVOM 7SONetS.F. 20edom, 9SONoRS.F. R 3 1,050 Net 5. F. 1 Net S.F. Hwd cAmw don Cods Site wmmventerw 534,848/DU Unk/Parkiq Const. Cat+ $155.00 Fir SF TOW "OrdCoob $34,646 $116,250 $151,096 $34,646 $147,150 5182,tH6 $34,846 $162,750 $197,596 $-44,648 $193,750 $220,596 pewelopMwd Pnx=D tti end hMMd 1Ees City Proc"sing Fees $26.05/ Net S.F. $19,541 $24,752 $27,357 $32,566 kW&ed/SoR t wIs $36,984 $36,964 536,984 536,984 $36,994 Tow Cold ff=ept Land, Ovcbe4 Profit) $207,623 $243,834 5261,940 $298,150 Land C"b $74,923 /DU $74,923 $74,923 $74,923 $74,923 ov% km?mrd i Owrftsd 12% $34529 $43,467 $45,936 $50,874 Tow ft*a costs 'Fff tank $321,075 $362,224 $382,799 $423,947 Soumv David Paul Rosen 6 Astodaw City d11Mw Alfadri Ity Gip -d trwyrd Ansly* Fo r 8.1 Table B•2 Tenant Subsidy Requirements Renter Prototype Stacked Flat Apartrnents one Bedroom City of Tustin 2008 (1) For a household size of 2 persons, pro -rated from 2007 HUD income limits for orange County. (2) Assumes 30% of gross income spent on housing. ity (3) Based on current utilitallowances from County cooking, Orange ra rgheHouating and bask sing and electr'city.�1CQ5 Department mun Assumes tenant pays & 8, (4) Based on estimated monthly operating costs per unit of $300 (5) Based on annual property tax rate of 1.2% applied to total development cost. (6) Assumed at 3% of affordable monthly rent. (7) Based on 30 -year mortgage at: 8.00% Assumes debt coverage ratio of 1.25 A negative tenant supported debt indicates the rents do not cover operating costs and a capitalized "sinking fund" of this amount is added to total development cost to cover operating deficits. (8) Equivalent to total development cost less tenant supported debt. Source: David Paul Rosen & Associates. City of Tustin page 9.1 Affordability Gap and Leveraged Financing Analysis 50% of 60% of 110% of Median Median Median Income Level (1) $31,480 $37,776 $69,256 Affordable Monthly Housing Cost (2) $787 $944 $1,731 Less: Monthly Utilities (3) $54 $54 $54 Affordable Monthly Rent $733 $890 $1,677 Less: Monthly operating Cost (4) $300 $300 $300 Less: Monthly Property Taxes (5) $321. $321 $321 Less: Vacancy Allowance (6) $22 $27 $50 Tenant Monthly Net operating Income $90 $243 $1,006 Tenant Supported Debt (7) $9,805 $26,451 $109,681 Total Development Cost Per Unit $321,075 $321,075 $321,075 Required Capital Subsidy (8) $311,270 $294,624 $211,394 (1) For a household size of 2 persons, pro -rated from 2007 HUD income limits for orange County. (2) Assumes 30% of gross income spent on housing. ity (3) Based on current utilitallowances from County cooking, Orange ra rgheHouating and bask sing and electr'city.�1CQ5 Department mun Assumes tenant pays & 8, (4) Based on estimated monthly operating costs per unit of $300 (5) Based on annual property tax rate of 1.2% applied to total development cost. (6) Assumed at 3% of affordable monthly rent. (7) Based on 30 -year mortgage at: 8.00% Assumes debt coverage ratio of 1.25 A negative tenant supported debt indicates the rents do not cover operating costs and a capitalized "sinking fund" of this amount is added to total development cost to cover operating deficits. (8) Equivalent to total development cost less tenant supported debt. Source: David Paul Rosen & Associates. City of Tustin page 9.1 Affordability Gap and Leveraged Financing Analysis Table B-3 Tenant Subsidy Requirements Renter Prototype Stacked Flat Aparbnents Two Bedroom City of Tustin 2008 Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utilities (3) Affordable Monthly Rent Less: Monthly Operating Cost (4) Less: Monthly Property Taxes (5) Less: Vacancy Allowance (6) Tenant Monthly Net Operating Income Tenant Supported Debt (7) Total Development Cost Per Unit Required Capital Subsidy (8) 50% of 60% of 110% of Median Median Median $35,415 $42,498 $77,913 $885 $1,062 $1,948 $68 $68 $68 $817 $994 $1,880 $300 $300 $300 $362 $362 $362 $25 $30 $56 $131 $302 $1,161 $14,242 $32,969 $126,603 $362,224 $362,224 $362,224 $347,982 $329,255 $235,621 (1) For a household size of 3 persons, pro -rated from 2007 HUD income1imits for Orange County. (2) Assumes 30% of gross income spent on housing. (3) Based on current utility allowances from County of Orange Housing and Community Services Department Assumes tenant pays for electric heating, cooking, water heating and basic electricity. (4) Based on estimated monthly operating costs per unit of $300 (5) Based on annual property tax rate of 1.2% applied to total development cost (6) Assumed at 3% of affordable monthly rent. (7) Based on 30 -year mortgage at: 8.009'0 Assumes debt coverage ratio oh 1.25 A negative tenant supported debt indicates the rents do not cover operating costs and a capitalized "sinking fund" of this amount is added to total development cost to cover operating deficits. (8) Equivalent to total development cost less tenant supported debt. Source: David Paul Rosen & Associates. City of Tustin Affordability Gap and leveraged Financing Analysts Page B-2 Table B-4 Tenant Subsidy Requirements Renter Prototype Stacked Flat Apartments Three Bedroom City of Tustin 2008 (1) For a household size of 4 persons, pro -rated from 2007 HUD income limits for Orange County. (2) Assumes 30% of gross income spent on housing. (3) Based on current utilityoal n� atin cooking, nil nd basic electric and tyServices Department Assumes tenant pays g. g, g (4) Based on estimated monthlyoperating rate 1.2% applied �iedunit to total development cost. (5) Based on annual property app (6) Assumed at 3% of affordable monthly rent. (7) Based on 30 -year mortgage at: 8.00°!o Assumes debt coverage ratio of 1.25 A negative tenant supported debt indicates the rents do not cover operating costs and a capitalized "sinking fund" of this amount is added to total development cost to cover operating deficits. (8) Equivalent to total development cost less tenant supported debt. Source: David Paul Rosen & Associates. City of Tustin Page 8-3 Affordability Gap and Leveraged Financing Analysis SO% of 60%0( 110% of Median Median Median Income Level (1) $39,350 $47,220 $86,570 Affordable Monthly Housing Cost (2) $984 $1,181 $2,164 Less: Monthly Utilities (3) $98 $98 $98 Affordable Monthly Rent $886 $1,083 $2,066 Less: Monthly Operating Cost (4) $300 $300 $300 Less: Monthly Property Taxes (5) $383 $383 $383 Less: Vacancy Allowance (6) $27 $32 $62 Tenant Monthly Net Operating Income $559 $750 $1,704 Tenant Supported Debt (7) $60,965 $81,773 $185,810 Total Development Cost Per Unit $382,799 $382,799 $382,799 Required Capital Subsidy (8) $321,834 $301,026 $196,989 (1) For a household size of 4 persons, pro -rated from 2007 HUD income limits for Orange County. (2) Assumes 30% of gross income spent on housing. (3) Based on current utilityoal n� atin cooking, nil nd basic electric and tyServices Department Assumes tenant pays g. g, g (4) Based on estimated monthlyoperating rate 1.2% applied �iedunit to total development cost. (5) Based on annual property app (6) Assumed at 3% of affordable monthly rent. (7) Based on 30 -year mortgage at: 8.00°!o Assumes debt coverage ratio of 1.25 A negative tenant supported debt indicates the rents do not cover operating costs and a capitalized "sinking fund" of this amount is added to total development cost to cover operating deficits. (8) Equivalent to total development cost less tenant supported debt. Source: David Paul Rosen & Associates. City of Tustin Page 8-3 Affordability Gap and Leveraged Financing Analysis Table B-5 Tenant Subsidy Requirements Renter Prototype Stacked Flat Apartments Four Bedroom City of Tustin 2008 (1) For a household size of 5 persons, pro -rated from 2007 HUD income limits for Orange County. (2) Assumes 30% of gross income spent on housing. (3) Based on current utility allowances from County of Orange Housing and Community Services Department. Assumes tenant pays for electric heating, cooking, water heating and basic electricity. (4) Based on estimated monthly operating costs per unit of $300 (5) Based on annual property tax rate of 1.2% applied to total development cost. (6) Assumed at 3% of affordable monthly rent. (7) Based on 30 -year mortgage at: 8.00% Assumes debt coverage ratio of. 1.25 A negative tenant supported debt indicates the rents do not cover operating costs and a capitalized "sinking fund" of this amount is added to total development cost to cover operating deficits. (8) Equivalent to total development cost less tenant supported debt Source: David Paul Rosen & Associates. City of Tustin Affordability Gap and Leveraged Financing Analysts Page 0-4 50% of 60% of 110% of Median Median Median Income Level (1) $42,498 $50,998 $93,496 Affordable Monthly Housing Cost (2) $1,062 $1,275 $2,337 Less: Monthly Utilities (3) $109 $109 $109 Affordable Monthly Rent $953 $1,166 $2,228 Less: Monthly Operating Cost (4) $300 $300 $300 Less: Monthly Property Taxes (5) $424 $424 $424 Less: Vacancy Allowance (6) $29 $35 $67 Tenant Monthly Net Operating Income $201 $407 $2,285 Tenant Supported Debt (7) $21,903 $44,376 $249,179 Total Development Cost per Unit $423,947 $423,947 $423,947 Required Capital Subsidy (8) $402,044 $379,571 $174,768 (1) For a household size of 5 persons, pro -rated from 2007 HUD income limits for Orange County. (2) Assumes 30% of gross income spent on housing. (3) Based on current utility allowances from County of Orange Housing and Community Services Department. Assumes tenant pays for electric heating, cooking, water heating and basic electricity. (4) Based on estimated monthly operating costs per unit of $300 (5) Based on annual property tax rate of 1.2% applied to total development cost. (6) Assumed at 3% of affordable monthly rent. (7) Based on 30 -year mortgage at: 8.00% Assumes debt coverage ratio of. 1.25 A negative tenant supported debt indicates the rents do not cover operating costs and a capitalized "sinking fund" of this amount is added to total development cost to cover operating deficits. (8) Equivalent to total development cost less tenant supported debt Source: David Paul Rosen & Associates. City of Tustin Affordability Gap and Leveraged Financing Analysts Page 0-4 TWO C-1 LEVERAGED FINANCING ANALYSIS RENTAL PROTOTYPE. STACKED FLAT APARTMENTS DEVELOPMENT PROGRAM CITY OF TUSTIN 2008 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom Total Affordable Units 2 BR Manager's Unit Total Housing Units Community Roan Total Net SF Building Area Parking/Circulation i Open Spices Parking Structure Total Spaces # Units % Units Sq. Ft(Unit 73 23% 750 100 31% 950 100 31% 1,050 50 15% 1,250 323 100% 2 325 SPS 81 650 731 Units Total SF Per Acre Anes 54,750 95,000 105,000 62,500 317,250 25.00 13.00 1,900 319,150 0 319,150 ( Chy ofTuidn Page Gl Afford&W ty Gap and Leveraged Financing MOO$ AOwd*F* GF -4 Lffm 1Yrielu5 Mori T" C-2 RENTAL PROMITYPE; SiACIM FLAT AFARTMENTS INCOME AND OPERATING COSTS WITH !V% TAX CREDITS. FEDERAL AND Sfi1TE Assummord 2007 Madan mmm' old Ir—rm Family of four $74700 Al k HownR Cost As a %of browns 30% Na of Badoorns Tewb 1 Bdroors 2 Mdrem 3 bWnH a 4 Bedrewd Hou§@ W Sin (1) 1.5 FMoin 3.0 pow 4A Fw = 5.0 FMawrt FlmwhJd Sin Ir wmw A*m I— 757E 90% 100% 1041% UtakyAtlowence (2) 354 S65 5941 $109 No. Of Unlet 323 73 100 100 so law ladrown 773 73 200 300 200 AFFOOMM rAwm FT INCOME LEVEL AAnuWGm aIt Annual Gust irrcarne $17,705 $21,249 $23,610 12S,4" AlfonWoMoethiy Wowing Cad $443 $531 $390 $637 Lela: MonNyUlllbA( ($S4) ($60 ("m (Slog) A&wdableMonlldymm $359 $463 3492 $5241 45% of Medlin Annual COW hCOM $26,561 $31,874 f35,41S S3V45 Alfwdabb Monddy Wouo* Cod $664 $797 $SSS $956 Las: Mwg* Udaty AM -454) ($641) (995) ($10% gold,* Mn� Rent $610 $729 $7117 $547 i`�)<af A4adlae Arelual Crm yKm $29,313 $35,415 $39,350 $42,4941 Afbrdabb M"* Hawk* Cal $735 $aas $904 $1,062 LA�f 0541 ($65) ($9411(11109) wd" MWAMY�R $617 fae6 3953 NFT OPERATING INCOW A4prrdriy AawdslAity Lne1RNo. Of Badman($ Unkr Rwd Gros (noon» I tbdroom a sm $3,112 102x Uma 2 Redioorn 10 5463 $4,630 30 A wn 10 $492 $4,920 4 dadiown S SS25 $2,610 45% of Medlar 1 oo*awn 11 $610 56,710 15.2% of UNb 2 41dmm 13 Sr" $10,935 3A 'm 5707 511,eoa 4 Bedroom a 5847 56,776 ofModim1 Badraom 54 $684 $366936 74,6%ofUNlt 2 aadm m 75 $017 161,275 3 iadroom 75 341416 ""SO 4 96*0 rrl 37 $953 $33,261 Towle; 323 $251,450 Mwuws Unln 2 GROSS R&WIX 940 ME 53,017,400 Lau: Vacarrdu (3) 05.0% (s i s clem MNoal. q+aonw $100 Pa unk GROSS ANNUAL INCOME u.994830 LESS: OPERATING EXPENSES S30WW* mo. S3.60o Rr UnWYW ($1,170,000) Low Op*mUf* Rewvo 3% ofOpwr lud4d ($35,100) Leu: RgAw nrswReww" 5400 AirLkg~ ($170,0001 NET OPERATING IWOAK $1,563,730 (1) Ata ~ Rw Luwr ofICAC occupancy ardard (1.5 pa=ns per bed+ow) and Cak(omla Wealth and Safety o uWKy etandwd (aw P— Per W6— plus ond• (2) Source Curry Of OWW Hmsk l and CDrnmw►ay Swks, Wbcdw Cklobw 1. 200L ANwnet Wom pays aR ($baric FwalkW cwkm& and wader Maatiog and bark *40* r, WWkwd Pay$ wawr and lr OL t3) TUC rgWAM a 3% mdrkWwm vaancy raw unix+ walved bred on vacancy dau in dw markat awe. AOwd*F* GF -4 Lffm 1Yrielu5 Mori Table C-3 RENTAL PROTOTYPE: STACKED FLAT APARTMENTS DEVELOPMENT COSTS 9% TAX CREDITS, FEDERAL AND STATE Acres No. of Units Total Nd Living Area (SF) Community Room Total Net SW" FWK Residential Units Otho Building Am& Total Net Square Fad ' Total Gast Square Feet % Residential Basis MISS la 13.00 325 319,150 0 319,1 0 319,150 566,280 1 OD 00% $O •tel Tax Credit E4 Basis (100% ResidJ LAND ACQUISITION $43 $20 per She SF Per Site SF $24,350,040 $11,325,600 $0 $11,325,600 SITE WORK UNIT CONSTRUCTION HARD COSTS $155 Per SF Hard Costs $49,468,250 $3,039,693 $49,464250 $3,039,693 CONTINGENCY5,00X. ARCHJENG.ICONSTR• SUPERVISION 7.00% of of Hard Costs $5,960,072 $8,31S,$3,O306 ,960,072 5,308 $8��$3,000 LOCAL IMPACT AND PROCESSING FEES $26.05 Per SF 00 ALTA SURVEY $7,500 $7,500 ENVIRONMENTAL PHASE 1 510,000 $10,000 SOILS TESTING. CONSTRUCTION LOAN FEES 10076 15 Months $938,572$938,572 $6,781,185 $6,781,16S CONSTRUCTIOIWLFASE-UP INTEREST ESTATE TAXES AND INSURANCE 8.so% 1.60% of Hard Costs $1,362,302 $1,362,302 REAL 515,000 TITLE AND CLOSING T 510,000 $15,000 510,000 APPRAISAL FEES 30,000 512,00 REAL ESTATE LEGAL 530,000 $ $ 0 ORGANIZATIONAL LEGAL IO 525,000 0 0 $25,o$0 MARSTUDY S $75,000 AUDIT POST -CONSTRUCTION AUDIT 1 MARKETINGAEASE-UP5TARTUP 5292 -SW $0 DEVELOPER FEE (1) -'-- - - - - $30,000 $O TAX CREDIT CONSULTANT $2,000 $0 TAX CREDIT APPLICATION FEE 4.0076 of ACM. Credit 1320,270 $0 TCAC ALLOCATION FEE 0.000 $0 SYNDICATION LEGAL $114,401.293 $BEr473AN TOTAL PROJECT COST $352,004 $272.226 PER UNIT S35IL" PER SF (1) As of 2006, the maximum developer fee Permitted by TCAC is the lesser of I S% of development ooc or $2 mlilion. The maximtJR► a �tbn rnsa are included In t deve)opar feedW can be included in eligible bash Is t per. Developn'teni and tax credit consulting syndication Cky *"Ulm ftp G3 A&M'AbMW GRP+ W L wged FkQ=ft Anily%4 Table C4 RENTAL PROTOTYPE: STACKED FLAT APARTMENTS FINANCING ASSUMPTIONS 9% TAX CREDITS, FEDERAL AND STATE TAX CREDIT EQUITY Requested Eligible Basis $71,616,838 Less: Non -Qualified Non -Recourse Financing $0 Unadjusted Eligible Basis $71,616,838 Adjusted Eligible Basis (High Cost Area Adjust) 1.30 $93,101,889 Qualified Basis M Low Income Units) 100% $93,101,889 Tax Credit Rate 8'60% Annual Allow. Federal Credits $8,006,762 Tax Credit Peking (Equity Raised Per Tax Credit Dollar) Federal $ 1.000 Federal Tax Credit Equity (99.99%) $80,059,618 FAIR MARKET VALUE CALCULATION Net Operating Income; Restr. Rents $1,563,730 Capitalization Rate 8.50% Capitalized Value at Restricted Rents $18,396,824 MAXIMUM CONSTRUCTION LOAN CALCULATION Max. Constr. Loan as Percent of FMV 75% $13,797,618 Plus: Federal and State Tax Credits $80,059,618 ` Maximum Construction Loan 1 $93,857,236 CONSTRUCTION LQAN Cons&. Loan Amt. $93,857,23650% Interest Rate 8.50 . 8 Loan Points Average Loan Balance -Construction 1.00% 60.00% Constnuction Loan Term 12 Months Lease -Up Period 3 Months Total Construction Loan Period 15 Months Construction Loan interest --Construction $4,786,719 Construction Loan Interest—Lease-Up $1,994,466 Total Construction Loan Interest $6,781,185 Construction Loan Points $938,572 PERMANENT MORTGAGE Net Operating Income $1,563,730 Dein Coverage Ratio 1.25 Debt Service Based on DCR $1,250,980 Mortgage Term 30 years Interest Rate 8.00% Max. Mortgage Amount (DCR) $14,207,327 Loan Fees 1.009'0 $142,073 City of Tustin AffmElability Gap and Leveraged Financing Analysis page C Table C-5 RENTAL PROTOTYPE: STACKED FLAT APARTMENTS THRESHOLD BASIS LIMITS 9% TAX CREDITS, FEDERAL AND STATE Unit Size 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom 2 Bedroom Mgr's Unit Total Threshold Basis Threshold Basis Boosts Plus: Prevailing Wage Boost Plus: Subterranean Parking Boost Plus: Day Care Center Boost Plus: Special Needs Boost Plus: Elevator Boost Subtotal Boost (1) Plus: Energy Efficiency Basis Boost Plus: Distributive Energy Boost Plus: Seismic Upgrade Boost Plus: Development Impact Fees Total Adjusted Threshold Basis Total Unadjusted Eligible Basis Requested Eligible Basis Orange Co. 9% Threshold Basis Limits, 2008 $8,315,308 $71,616,838 $88,473,482 $71,616,838 (1) Under 2008 TCAC regulations, the total combined boost for prevailing wage, parking, day care center, special needs and elevator may not exceed 39 percent City of Tustin Afkxrlability Gap and Leveraged Financing Analysts Page C-1 TCAC Basis Total !t of Units Limit Per Unit Basis 73 $139,272 $10,166,856 100 $168,800 $16,880,000 100 $215,040 $21,504,000 50 $239,568 $11,978,400 2 $168,800 $337,600 $60,866,856 Max allowed 20% 00/0- $0 7% 0% $0 2% 0% $0 2% 0% $0 10% 0% $0 39% 4% 4% $2,434,674 5% 0% $0 15% 0°/ $0 $8,315,308 $71,616,838 $88,473,482 $71,616,838 (1) Under 2008 TCAC regulations, the total combined boost for prevailing wage, parking, day care center, special needs and elevator may not exceed 39 percent City of Tustin Afkxrlability Gap and Leveraged Financing Analysts Page C-1 ISM SM I gW is Ire, its, r� �2 d ; �g"�� �1 rr N M yi��j �yry SidV 9 INGO rMO a E- figM It! yp�y M Og+ PHs O M • S �M US V �a0ld VO C. P b s.. L •}.2 ~ Q Xis gbm. slog 7 1. ft�_ w sa M1S4Se G y r I � £ 2 ■_2 2 � #�' k �s■;� J■2@g i§t�; k §s■� Mel } ) a §� Isis-$ t ks■k 2■gal §19 ASSUMPTIONS 2007 Median Household Income, Family of Four Affordable Housing Cast As a % of Income No. of Bedrooms Household Size (1) Household Size htco me Adjust Factor Utility Alkwwnce 0) No. of Units Total Bedrooms AFFORDABLE RENTS BY INCOME LEVEL Anal Grow Income Affordable Monthly Housing Cat Lest Monthly Utility AUowancs Affordable Monthly Rent Annual Cross Income Affordable Monthly Housing Cost Lass: Monthly Utility Alktwance Affordable Mon" Rent NET OPERATING INCOME Afkxdabil ty LeveLft.. of Bedrooms $0% of Mediae 30.0% of Units 60% of Madlan 70.0% of Unks Table G8 RENTAL PROTOTYPE: STACKED FIAT APARTMENTS RENTAL INCOME AND OPERATING COSTS 4% TAX CREDITS, TAX-EXEMPT BONDS $76,700 $29,513 $35,415 30% Totalr 1 Bedroom 2 Bedrom 3 Bedroom 1.5 Persons 3.0 Prtrsotu 4.0 Persons 75% 90% 100% $54 S66 $98 323 73 100 100 773 73 200 300 Totals 323 $309,014 MaMar9 Unit 2 GROSS RENTAL INCOME Les: Vacandes 0) • 5.0% Nbc. In $100 Per Unit CROSS ANNUAL INCOME LESS: OPERATING EXPENSES $300hutlVmo. $3,600 Fir UnWYear Less; Opewting Reserves 3.0% of Oper. Budget Les: RgAacmvwd Reserves $400 per UnIUYear NET OPERATING INCOME (1) Assumes the lesser of TC AC occupancy standard (1 S pawn per bedroom) and California Health and Safety ocarpancy standard (one pens+ per bedroom plus and (2) Sourer County of Orange Housing and C.ommunity Services,. effective October t, 2006. Assumes tenant pays all electric heating, cooking, and waW hosting and bask electtidty; landlord pays water and Wash. (3) TCAC mquires a 5% minimum vacancy rate unless valved based on vacancy data in the market area. City Of Town ARmdffloft G+v aid w-,Wd Rnandna Assisi 4 Bedroom 5.0 Persons 105% $109 SO 200 $42,496 $1,062 ($109) $953 $50,998 $1,275 ($109) $1,166 $3,708,168 ($185,406) 532,300 $3,535,060 ($1,170,000) ($35,100) ($130,000) $2,219,960 Pba C -t 2 $29,513 $35,415 $39,330 $738 $885 $964 (554) ($68) ($96) $684 $817 $886 $35,413 $42,498 $47,220 $883 $1,062 $1,181 ($54) ($68) (5981 $831 $994 $1,083 MOMMY Units Rent Gross bxxww 1 Bedroom 22 $684 $15,048 2 Bedroom 30 $817 $24,510 3 Bedroom 30 $886 $26,SB0 4 Bedroom 1S $953 $14,295 1 Bedroom 51 $631 $42,381 2 Bedroom 70 $994 $691580 3 Bedroom 70 51,08! $75,810 4 Bedroom 35 $1,166 $40,810 Totals 323 $309,014 MaMar9 Unit 2 GROSS RENTAL INCOME Les: Vacandes 0) • 5.0% Nbc. In $100 Per Unit CROSS ANNUAL INCOME LESS: OPERATING EXPENSES $300hutlVmo. $3,600 Fir UnWYear Less; Opewting Reserves 3.0% of Oper. Budget Les: RgAacmvwd Reserves $400 per UnIUYear NET OPERATING INCOME (1) Assumes the lesser of TC AC occupancy standard (1 S pawn per bedroom) and California Health and Safety ocarpancy standard (one pens+ per bedroom plus and (2) Sourer County of Orange Housing and C.ommunity Services,. effective October t, 2006. Assumes tenant pays all electric heating, cooking, and waW hosting and bask electtidty; landlord pays water and Wash. (3) TCAC mquires a 5% minimum vacancy rate unless valved based on vacancy data in the market area. City Of Town ARmdffloft G+v aid w-,Wd Rnandna Assisi 4 Bedroom 5.0 Persons 105% $109 SO 200 $42,496 $1,062 ($109) $953 $50,998 $1,275 ($109) $1,166 $3,708,168 ($185,406) 532,300 $3,535,060 ($1,170,000) ($35,100) ($130,000) $2,219,960 Pba C -t 2 Table C•9 RENTAL PROTOTYPE: SUCKED FLAT APARTMENTS DEVELOPMENT COSTS 4% TAX CREMT5,TAX_0EMPT BONDS Acres (Unit Phis Parking) 13.00 325 No. of Units 319,150 Total Living Area 0 Comm,,niH Roan Residentta) Units Total Net Square Feet, 319,15D 0 Other Bul" Area 319,150 Total Nd Sgua►e ied Tod Gross Squwe 319,150 Taut Crept Eh& Basi % Residentlel 100.00% Total 100% Resid. LAND ACQUISMON up Per Site SF Per she SF $24,350,040 $11,325,600 SO $71,325,600 SITE WORKUC N HARD COSTS UNfT CONSTR $155 11x SF Hard Costs $49,468,250 $3,039,693 $49,468,250 $3,039,693 CONTINGENCY SUPERVISION 5.00% 7.00% of Ftard Costs $5,960072 $8,315,306 $8,31 S -W S8,3$3,000 ARCHJENGJCONSTR. LOCAL yLgP�f AND PROCESSING FEES $26.05 Per SF 53,000 53,000 ALTA SURVEY 57,.500. $7,500 ENVIRONMENTAL PHASE 1 $10,000 $10,000 SOIL.STESTING CONSTRUCTION BOND FEFSICOSTS 1.00% Pin 3100;000 15 Months $693,933 $2,776,637 $0 $2,776,637 COMML CTIOWLEASE"UP INTEREST 5.50% 160X, of Hard Com $7,362,302 $1,362,902 REAL ESTATE TAXES AND INSURANCE . $15.000 $75,000 TITLE AND CLOSING 510,000 $10,000 APPRAISAL FEES $30,000 $112,O00 REAL ESTATE LEGAL 530,000 $0 ORGANIZATIONAL LEGAL $25,000 $25,000 MARKET STUDY $75,000 $0 $0 POST -CONSTRUCTION. AUDIT $100AW MARKETINCJI.EASE-UP/START-UP 3 Months Olt $292,500 $0 107 417 OPER/dING RESERVE 2.00% $107,417 SOFT C )ST CONTINGENCY $107,937 52 82 437 779 TOTAL DEVELOPMENT COST 15.1X0% of Dw Com 51,940, 31,200,1XX1 $0 DEVELOPER FEE (1) S30,000 BONQ/TAX ASR X000 $0 TAX � � 4.00% of Ann. Cmdk $156,570 $0 R $30,000 $0 SYNDICATION LEGAL $11110,031M $83,637,779 TOTAL PROD COST $338„756 S2S7,347 PER UNIT $344.97 PER SF (1) As of 2006, the maximum developer fee permitted by TCAC is the lesser of 1 S% of dwek p costs or $2 nNIIWL The maxirmm amount that an be included in ellole basis is 31.4 million Developmm"t and tax credit consulting and syndication Costs are Included In the dead fee CaP- City o(Turtla iaSe Gt) AN.&bl kY C-F'A L--Wd F'"-4An�Fyfb TaWe C-10 RENTAL PROTOTYPE: STACKED FLAT APARTMENTS FINANCING ASSUMPTIONS 4% TAX CREDITS, TAX-EXEMPT BONDS TAX CREDIT EQUITY Total Eligible Basis Less: Non -Qualified Non -Recourse Financing Lest: Eligible ArnountVoluntarily Excluded Unadjusted Eligible Balis Adjusted Eligible Basis Nigh Cost Area AdjtaW Qualified Basil Tax Credit Rate Annual Allow. Credits Tax Credtt Pricing (Equity Raised Per Tax Credit Dollar) Federal Tax Credit Equity (99%) CONSTRUCTION BOND AMOUNT Consir. Loan Amt. Interest Rats } Constr. Bond Issuance CosWFees Average Loan Balance --Constriction Constriction Period Lease Up Period Consuucdm Loan )nearest—ConstruWon Construction Loan Interest—Lease-Up Net interest cost Bond Issuance Cotta PERMANENT BOND AMOUNT Net Operating lrg me Debt CwmrW Ratio Debt Service Mor"Tenn Interest Rate City of Tustin Alfo,dsbllity C,ap and LftwsW Rsunding Analysis 0% 1.30 100% 5S% of Agg. Basis $100,000 Plus $83,637,779 $0 50 $83,637,779 $108,729,113 $108,729,113 3.60% $3,914,248 $1.05 $40,688,609 $59,393,300 5.50% 1.00% 60.00% 12 Montin 3 Months $1,959,979 $816,658 $2,776,637 $693,933 $2,219,960 1.25 $1,775,970 30 yaws 7.00% Pate C-14 Table C-11 RENTAL PROTOTYPE: STACKED FLAT APARTMENTS THRESHOLD BASIS LIMITS 4% TAX CREDITS, TAX-EXEMPT BONDS (1) Under 2008 TCAC regulations, the total combined boost for prevailing wage, parking, day care center, special needs and elevator may not exceed 39 percent. City of Tustin Page C-1 Affordability Gap and Leveraged Financing Analysis Orange Co. 4% Threshold Basis Limits, 2008 TCAC Basis Total Unit Size # of Units Limits Basis 1 Bedroom 73 $179,727 $13,120,071 2 Bedroom 100 $216,800 $21,680,000 3 Bedroom 100 $277,504 $27,750,400 4 Bedroom 50 $309,157 $15,457,850 2 Bedroom Mgr's Unit 2 $216,800 $433,600 Total Threshold Basis $78,441,921 Threshold Basis Boosts Max allowed Plus: Prevailing Wage Boost 20% 0% $0 Plus: Subterranean Parking Boost 7% 00/0 $0 Flus: Day Care Center Boost 2% 00/0 $0 Plus: Special Needs Boost 2% 0% $0 Plus: Elevator Boost 100/0 0% $0 Subtotal Boost (1) Plus: Energy Efficiency Basis Boost 39% 4% 4% $3,137,677 Plus: Distributive Energy Boost 5% 0% $0 $0 Plus: Seismic Upgrade Boost 15% 0% Plus: Development ImPact Fees $8,315,308 Total Adjusted Threshold Basis $89,894,906 Total Unadjusted Eligible Basis $83,637,779 Requested Eligible Basis $83,637,779 (1) Under 2008 TCAC regulations, the total combined boost for prevailing wage, parking, day care center, special needs and elevator may not exceed 39 percent. City of Tustin Page C-1 Affordability Gap and Leveraged Financing Analysis I s HI fill aif� i HUI M W � M � « W V �25�7StS � �lS8�� « W Y M j {{yy MM vg�36 a a�5i� xr$ Is LIA M N M �ZA py91 y� pN o pt oPva 2t2 `� N ref v 'iNO/ N W 4 40 « N N V e '�" N 9K 2 $K 40 k 2 k 6 2& k §■■\� 40 ,Oslo / 288k1 @■2§a $ kss��. ) �k$ )I�k} � k■�§� §■}k) U ■■kk @■2§a $ kss��. ) �k$ t _■■@k . 7�p 7 § §■)�_ � �sa�� §�©§I � k■■�§ �■_�§ � % %■k§k �� 400 � o &■§■■■§_ � i *1��' M 44 t 41 p N? NN P � vi v �is Ci�ii �Isis ZJ M lSN14 w9is h ~ W N V a 4441111 V 40 M si 10 W # 4 O M eggs 40 13 pa a �H s Table C-14 RENTAL PROTOTYFE: STACKED FLAT APARTMENTS MMP LOAN LIMITS 2007 CMy dilw" MO,dabft Cray and tMs/ed FfnwcMi ti+h►M MIPC-22 Urdb t Ung • Mm? Lwn MA For Klatt Maxiaaan MHP Lose unit >1n 1 of Lhdv 30% AMI 60% AM 30% AAM 60% AMI 30% AMI IML AAU luta 1 Bedroom 73 22 51 $11016% $45,000 $2A3S,092 $2,295,00D $4,730,092 2 Sadioom 100 30 70 $123,938 545,000 $3,718,140 $3,150,000 $6,060,140 3 Sadm m 100 30 70 $134,112 $45,000 $4,015,460 $3,150,000 $7,235,440 4 sodrmn SO 15 3S $146,697• S4S,000 $2,200,453 $1,573,000 $3,775,455 Tb"I 323 97 226 512,439,147 TI 0. 7070= 522,609,147 CMy dilw" MO,dabft Cray and tMs/ed FfnwcMi ti+h►M MIPC-22 Table C-15 RENTAL PROTOTYPE: STACKED FLAT APARTMENTS RENTAL INCOME AND OPERATING COSTS MHP PROGRAM, TAX•EXEMPT BONDS, 4% TAX CREDITS ASSUMPTIONS 2007 Median Household Income, Family 0( Four $78,700 Affordable Housing Cost As a % of Income 30% No. of Bedrooms Totals 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroorm Household Size (1) 1.5 Persons 3.0 Persons 4.0 Persons 5.0 Persons Household Size Income Adjust. Factor 75% 9D% 1 OD% 108% Utility Allowance (2) $54 $68 100 $98 100 $109 50 No. Of Units 323 773 73 73 200 300 200 Total Bedrooms AFFORDABLE RENTS BY INCOME LEVEL MHP B (30X) Affordable Monthly Housing Cost $456 $547 ($68) $632 ($98) $705 ($109) Less: Monthly Utility Allowance ($54) $402 $479 $534 $596 Affordable Monthly Rent 609$. of Median Annual Gaon Income $35,415 $885 $42,498 $1,062 $47,220 $11181 $50,998 $1,275 Affordable Monihly Housing Cost ($54) ($68) ($98) ($109) Less: Monthly Utility Allowance $831 $994 $1,083 $1,166 Affordable Monthly Rent NET OPERATING INCOME Monthly Affordability L.eveVNo. of Bedrooms Units Rent Gross Income 1 Bedroom 22 $402 $8,844 MHP 8 L30X) 30.0% of Units 2 Bedroom 3 Bedroom 30 30 $479 $534 $14,370 $16,020 4 Bedroom 15 $596 $8,940 Medan 1 Bedroom 51 $831 (42,381 60% of 70.0% of Units 2 Bedroom 70 5994 $69,580 3 Bedroom 70 $1,063 $75,810 4 Bedroom 35 $1,166 $40,810 Average Affordability 50.99% 323 $276,755 Totals 2 Manager's Unit GROSS RENTAL INCOME $3,321,060 ($166,053) Less: Vacancies (3) 05.0% $100 Per Unit $32,300 Mi". Income GROSS ANNUAL INCOME 53,187,307 LESS: OPERATING EXPENSES $30WuniNmo. $3,600 Per Unit IS 1, 170,000) Less: Operating Reserves 3.0% of Oper. Budget ($35,100) Less: Replacement Reserves (4) 0.6% of Construction Costs (S371,012) NET OPERATING INCOME $1,611,195 (1) Assumes the lesser of TCAC occupancy standard 0 -S persons per bedroom) and California Health and Safety occupancy standard (one Peron Per bedroom plrs one). (2) Source: County of Orange Housing and Community Services, effective October 1, 2006. Assumes tenant pays all electric heating, cooking, and water heating and basic electricity, landlord pays water and trash. (3) TCAC requires a 5% minimum vacancy rate unless waived based on vacancy data in the market area. (4) MHP requires replacement reserves equal to 0.6% construction costs unless otherwise approved. cky dTodn Affordability Gap and Lev""" fkvKft Analytes Pap C•1 Table C-16 RENTAL PROTOTYPE: STACKED FLAT APARTMENTS DEVELOPMENT COSTS MHP PROGRAM, TAX-EXEMPT BONDS, 4% TAX CREDITS Acres (Units Plus Parking) 13.00 No. of Units 325 Total Living Area 319,150 Community Room 0 Total Net Square Feet, Residential Units 319,150 Other Building Area 0 Total Net Square Feet 319,150 Total Gross Square Feet 319,150 % Residential 100.00% Tax Credit Elig. Basis Total (100% Raid.) LAND ACQUISITION $43 Per Site SP $24,350,040 $0. SITE WORK $20 Per Site SF $11,325,600 $11,325,600 UNIT CONSTRUCTION HARD COSTS (1) $194 Per SF $61,835,313 $61,835,313 CONTINGENCY 5% of Hard Costs $3,658,046 $3,658,046 ARCH./ENG./CONSTR. SUPERVISION 7% of Hard Costs $5,960,072 $5,960,072 LOCAL. IMPACT AND PROCESSING FEES $26.05 Per SF $8,315,308 $8,315,308 ALTA SURVEY $3,000 $3,000 ENVIRONMENTAL PHASE 1 $7,500 $7,500 SOILSTESTING $10,000 $10,000 CONSTRUCTION BOND FEES/COSTS 1.00% Plus $100,000 $771,610 $771,610 CONSTRUCTION/LEASE-UP INTEREST 5.50% 15 Months .$3,139,778 $3,139,778 REAL ESTATE TAXES AND INSURANCE 1.60% of Hard Costs $1,362,302 $1,362,302 TITLE AND CLOSING $15,000 $15,000 APPRAISAL FEES $10,000 $10,000 REAL ESTATE LEGAL $30,000 $12,000 ORGANIZATIONAL LEGAL $30,000 $0 MARKET STUDY $25,000 $25,000 POST -CONSTRUCTION AUDIT $15,000 $0 MARKETING/LEASE-UP/START-UP $100,000 $0 OPERATING RESERVE 3 Months Oper $292,500 $0 encr rncr rnNTtNGFNCY 2.00% $110,384 $110,384_ DEVELOPER FEE (2) 15.00% of Dev. Costs $1,940,000 $1,200,000 BOND/TAX CREDIT ADVISOR $30,000 $0 TAX CREDIT APPLICATION FEE $2,000 $0 TUC ALLOCATION FEE 4.00% of Ann. Credit $183,006 $0 SYNDICATION LEGAL $30,000 $0 TOTAL USES $123,351,461 $97,760,912 PER UNIT $380,158 $300,803 PER SF $387.13 (1) Estimated hard costs, assuming prevailing wages, at a 25% increase in hard costs over non -prevailing wage costs. (2) For MHP projects with tax credits, the difference between the maximum developer fee under TCAC: $1,940,000 and the maximum under MHP: $3,137,500 be deferred and paid only out of cash flow. city of Tustin Affordability Gap and Leveraged fins -Ing Analysis Page C-1 Table C-17 RENTAL PROTOTYPE~ STACKED FLAT APARTMENTS FINANCING ASSUMPTIONS MHP PROGRAM, TAX-EXEMPT BONDS, 4% TAX CREDITS TAX CREDIT EQUITY Total Eligible Basis Less: Non.Qualified Non -Recourse Financing Less: Eligible Amount Voluntarily Excluded Unadjusted Eligible Basle Adjusted Eligible Basis (High Cost Area Adjust) Qualified Basis Tax Credit Rate Annual Allow. Credits Tax Credit Pricing (Equity Used Per Tax Credit Dollar) Federal Federal Tax Credit Equity (99%) CONSTRUCTION BOND AMOUNT Constr. Loan Arnt. Interest Rate Conw. Bond issuance Cos>s*m Average Loan Balance --Construction Constnrction Period. Lease Up Period Construction Loan Interest—Construction Construction loan interest--lease-Up Totallnterest Cost Bond hsuance Cods PERMANENT BOND AMOUNT Net Operating Income OW Coverage Ratio Debt Service Mortgage Tam Interest Rale Max. Mortgage Amount ()CR) - City of Tustin Affordability Gap and Lerw&W Financing Analysis 0% 130 100% 55% of Agg. Basis $100,000 Plus $97,760,912 $0 $0 $97,760,912 $127,089,186 $127,089,186 3.60% $4675,211 $1.05 $47,559,315 $67,161,024 5.50% 1.00% 60.00% 12 Months 3 Monde $2,216,314 $923,464 $3,139,778 $771,610 $1,611,195 1.25 $1,288,960 30 years 7.0096 $16,145,037 Page C-25 i l Table C-18 RENTAL PROTOTYPE STACKED FLAT APARTMENTS THRESHOLD BASIS LIMITS MHP PROGRAM, TAX-EXEMPT BONDS, 4% TAX CREDITS Unit Size 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom 2 Bedroom Mgr's Unit Total Threshold Basis Threshold Basis Boosts Plus: Prevailing Wage Boost Plus: Subterranean Parking Boost Plus: Day Care Center Boost Plus: Special Needs Boost Plus: Elevator Boost Subtotal Boost (1) Plus: Energy Efficiency Basis Boost Plus: Distributive Energy Boost Plus: Seismic Upgrade Boost Plus:. Development Impact Fees Total Adjusted Threshold Basis Total Unadjusted Eligible Basis Requested Eligible Basis Orange Co. 4% Threshold Basis Limits, 2008 $97,760,912 $97,760,912 (1) Under 2008 TCAC regulations, the total combined boost for prevailing wage, parking, day care center, special needs and elevator may not exceed 39 percent. City of Tustin Affordability Gap and Leveraged Financing Analysis Page C-1 TCAC Basis Total # of Units Limits Basis 73 $179,727 $13,120,071 100 $216,800 $21,680,000 100 $277,504 $27,750,400 50 $309,157 $15,457,850 2 $216,800 $433,600 $78,441,921 Max allowed 20% 200/6 $15,688,384 7% 00/0 $0 2% 00/0 $0 2% 0% $0 10% 0% $0 39% 4% 4% $3,137,677 5% 0% $0 15% 00/0 $0 $8,315,308 E 105,583,290 $97,760,912 $97,760,912 (1) Under 2008 TCAC regulations, the total combined boost for prevailing wage, parking, day care center, special needs and elevator may not exceed 39 percent. City of Tustin Affordability Gap and Leveraged Financing Analysis Page C-1 i M[ [if Dili I I If L ATS W H fI�$ { i fillI § $ § § I § §l§ - . me -as § I■■s 5��I Mlli! 1s" k $ 2 §_� f 7 © §■�:� Bs�22 )■t#� i B■;�$ §s��■ _ �■£§§ k §mak � I i■ B■��G & �■§!� 7 �■IkI �■�t� { $;A @ �s_2� �s�_■ | ' §■2;■ § !■;;; -11 fig Hil u vMV � r Qgws � r � 73 : eggs rr v g N rr g i d = q a C j V w CON MyM`� M y rM w� , IL ^ `fi mA HUI § � I - I§ ■ f $ I E I � . $ t■ §$ $ $ �f§ §■�k$ ■t�; � ■■_�§ � t■a&■ i§§ \ $s�§$ §■■�� V � §9% �■k�t = » � � ■=§ 2 �■tI� �■� ■s�, i§§ e� $ $ t -if s■ ■ � t■�I� � s t )■��� e I �■� � &■■�J f APPENDIX B REFERENCES CITY OF TUSTIN TECHNICAL MEMORANDUM HOUSING ELEMENT This page intentionally left blank CITY OF TUSTIN TECHNICAL MEMORANDUM HOUSING ELEMENT REFERENCES A. Documents 8. 1990 Census Report. U.S. Department of Commerce, Bureau of the Census. 9. 2000 Census Report. U.S. Department of Commerce, Bureau of the Census. 10. Comprehensive Housing Affordability Strategy for Fiscal Years 2007-2008 to 2017-2018, David Paul Rosen & Associates (DRA). 11. Marine Corps Air Station (MCAS) Tustin Specific Plan/ Reuse Plan, Adopted February 2003, Amendments through June 2007. 12. California State Department of Finance, 2007. 13. Demographic Profile and Survey of Homeless Persons Seeking Services in Orange County. The Research Committee of the Orange County Homeless Issues Task Force, 1999. 14. Southern California Association of Governments, Regional Housing Needs Assessment, 2007. 15. City of Tustin, Zoning Ordinance. 16. City of Tustin, General Plan, as amended January 16, 2001. 17. Third Five -Year Implementation Plan for The Town Center and South Central Redevelopment Project Areas (FY 2005-06 to 2009-2010), Tustin Community Redevelopment Agency, December 2004. 18. Final Environmental Impact Statement/ Environmental Impact Report (EIS/EIR) for the Disposal and Reuse of MCAS -Tustin (Program EIS/EIR for MCAS -Tustin), January 16, 2001. 19. City Council Staff Report, 20. Response to Comments, Final Volume 2 and 3 of Final Environmental Impact Statement/ Environmental Impact Report (EIS/EIR) for the Disposal and Reuse of MCAS -Tustin. 21. State of California, Department of Housing and Community Development, Website. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 200 2009 B. Persons and Organizations 1. Christine A. Shingleton, Assistant City Manager Tustin Community Redevelopment Agency (714) 573-3107 2. Elizabeth A. Binsack, Community Development Director Community Development Department, Tustin (714) 573-3031 3. Douglas C. Holland, City Attorney Woodruff, Spradlin & Smart (714)564-2642 4. Jerry Craig, Redevelopment Program Manager Tustin Community Redevelopment Agency (714) 573-3121 5. Kimberly McAllen, Redevelopment Project Manager Tustin Community Redevelopment Agency (714) 573-3128 6. Justina Willkom, Senior Planner Community Development Department, Tustin (714) 573-3115 7. Reina Kapadia, Assistant Planner Community Development Department, Tustin (714)573-3118 8. Lieutenant Steve Lewis Tustin Police Department (714) 573-3271 9. David Paul Rosen & Associates (DRA) Nora Lake -Brown, Principal 3941 Hendrix St. Irvine, California 92614 10. Dawn Lee, Executive Director Orange County Partnership (714) 288-4007 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 200 2009 11. Robert Stiens Tustin Community Foundation (714) 777-4653 12. Karen Roper, Homeless Prevention Coordinator Orange County Housing and Community Services Agency (HCS) (714) 480-2841 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 2002009 This page intentionally left blank. CITY OF TUSTIN TECHNICAL MEMORANDUM HOUSING ELEMENT �/I• APPENDIX C MAJOR EMPLOYERS IN TUSTIN CITY OF TUSTIN TECHNICAL MEMORANDUM HOUSING ELEMENT K!0:�II• This page intentionally left blank. CITY OF TUSTIN TECHNICAL MEMORANDUM HOUSING ELEMENT LIST OF MAJOR EMPLOYERS IN TUSTIN, CA Company/Address/Telephone No. Emp. Product/Service Tustin Unified School District - (714) 730-7301 1,886 Education 300 South C St - Tustin 92780 AT&T - (714) 259-6667 1,300 Telecommunications 1442 Edinger Ave- Tustin 92780 Ricoh Electronics, Inc - (714) 259-1220 1,038 Manufacturer 1100 Valencia Ave - Tustin, 92780 Rockwell Collins - (714) 317-8102 700 Manufacturer 14192 Franklin Ave- Tustin, 92780 Cherokee International - (714) 544-6665 330 Power Supplies 2841 Dow - Tustin, 92780 ADC Telecommunications, Inc - (714) 259-7729 15621 Red 300 Telecommunications Hill Ave - Tustin, 92780 Equipment Balboa Instruments - (714) 384-0384 300 Electronic 1382 Bell Ave - Tustin, 92780 Manufacturer Toshiba America Medical Systems - (714) 730-5000 2441 300 Distributor, Medical Michelle - Tustin, 92780 Equipment City of Tustin - (714) 573-3000 300 Government 300 Centennial Way - Tustin 92780 Costco Wholesale - (714) 838-7895 241 Wholesale Trade 2655 El Camino Real - Tustin 92780 Woodbridge Glass Inc - (714) 838 4444 205 Glass & Glazing Work 14321 M ford Rd - Tustin 92780 Costco Wholesale - (714) 338-1943 200 Wholesale Trade 2700 Park Ave - Tustin 92780 Logomark, Inc. - (714) 675-6100 200 Wholesale Trade 1201 Bell Ave - Tustin 92780 SMC Corporation of America - (714) 669-0941 200 Manufacturer 14191 M ford Rd - Tustin 92780 Tustin Hospital - (714) 669-5880 200 Hospital 14662 Newport Ave - Tustin, 92780 Vitatech International, Inc. - (714) 832-9700 178 Pharmaceutical 2832 Dow Ave - Tustin 92780 Preparations Home Depot - (714) 838-9200 154 Retail 2782 El Camino - Tustin, 92780 Straub Distributing Company - (714) 247-7300 150 Wholesale Trade 2701 Dow Ave - Tustin, 92780 Dawn Food Products, Inc - (714) 258-1223 150 Wholesale Bakery 15601 Mosher Ave - Tustin, 92780 Durabag Company Inc - (714) 259-8811 150 Manufacturer 1301 Santa Fe Dr - Tustin, 92780 Tustin Unified School District - (714) 730-7301 - 300 South 1,886 Education C St - Tustin 92780 Source: pity of Tustin Website, October 26, 2007, Tustin Chamber of Commerce,1999, Tustin Community Development Department, and Orange County Workforce Investment Board 2007 CITY OF TUSTIN TECHNICAL MEMORANDUM HOUSING ELEMENT This page intentionally left blank. CITY OF TUSTIN TECHNICAL MEMORANDUM HOUSING ELEMENT �11 • APPENDIX D ORANGE COUNTY BUSINESS COUNCIL 2007 WORKFORCE HOUSING SCORECARD CITY OF TUSTIN TECHNICAL MEMORANDUM HOUSING ELEMENT �nT.T'� I 1 • 4V. W4 A ---------- -my SPECIAL ACKNOWLEDGEMENTS ORANGE COUNTY BUSINESS COUNCIL Bank of America. Orange County Business Council thanks Bank of America for generously supporting the corporate underwriting of this inaugural edition of the Workforce Housing Scorecard. OCBC INVESTORS Further, the Business Council thanks its investors for their generous support, without which our advocacy efforts would not be possible: Adorno, Yoss, Alvarado & Smith Advanced Medical Optics Allergan, Inc. Automobile Club of Southern California Bank of America California C & L Refrigeration Corporation C. J. Segerstrom & Sons " ' •! California Bank & Trust, Orange County California State University, Fullerton Carter & Burgess, Inc. Center Club CH2M Hill, Inc. Chapman University Chevron Children and Families Commission of Orange County Cisco Systems, Inc. Citizens Business Bank City of Aliso Viejo City of Anaheim City of Brea Economic Development Dept. City of Fullerton City of Huntington Beach Economic Development City of Newport Beach City of Santa Ana City of Westminster Clean Energy Coast Community College District County of Orange - County Executive Office Cox Business Services, Orange County CT Realty Corporation Earthlink Municipal Works Edwards Lifesciences Corporation Elsinore Homes, Inc. Experian Farmers & Merchants Bank First American Title Company Fluor Corporation Ford Motor Company Freedom Communications Inc, Metro Division Gibson, Dunn & Crutcher LLP Hoag Memorial Hospital Presbyterian Hospital Association of Southern California Hyatt Regency Irvine IBM John Wayne Airport KB Home KOCE-TV Lennar Homes LSA Associates, Inc. Manatt, Phelps & Phillips, LLP Merrill Lynch Michael Brandman Associates Morrison & Foerster LLP New Century Financial Corporation Northwestern Mutual Financial Network, The Waltos Group Nossaman Guthner Knox & Elliott, LLP Nutrilite, a Division of Access Business Group Oce Imagistics, Inc. Orange County Business Journal Orange County Department of Education Orange County Performing Arts Center Orange County Sanitation District Orange County Teachers Federal Credit Union Orange County Transportation Authority O'Shea, Divine & Company, Inc. Pacific Life Paul, Hastings, Janofsky & Walker LLP Porter Novelli Poseidon Resources Corporation PricewaterhouseCoopers LLP Quiksilver R.C. Hobbs Company, Inc. Rancho Mission Viejo, LLC Rancho Santiago Community College District RBF Consulting Right Management Rutan & Tucker, LLP SDG&E and The Gas Company Siemens Corporation South Orange County Community College District Southern California Edison Company St. Joseph Health System Strategic Resources Alliance, Inc. Sukut Construction, Inc. Taco Bell Corp. Telelogic North America Inc. The'Boeing Company The Disneyland Resort The First American Financial Corporation The Irvine Company The Paul Merage School of Business/UC-Irvine The Robert Mayer Corporation The Showpros Group, Inc. Toshiba America Electronic Components, Inc Toshiba America Information Systems, Inc Transportation Corridor Agencies Tustin Ranch Golf Club U.S. Bank UC Irvine Union Bank of California UNISYS United Parcel Service Vineyard National Bancorp Vons, A Safeway Company Vulcan Materials Company, Western Division Washington Mutual Wells Fargo .. ORANGE COUNTY • • BUSINESS C00CI1. W ` 2007 `%rorkforce Housing Scorecard I. FOREWORD AND ACKNOWLEDGMENTS.................................................................1 11. OVERVIEW....................................... .................................................................... 8 III. DEMAND TRENDS: POPULATION, EMPLOYMENT, AND INCOME APPRECIATION IN ORANGE COUNTY (1991-2005)........................................................................10 IV. SUPPLY TRENDS: HOUSING GROWTH IN ORANGE COUNTY, 1991-2005 .............13 V. ORANGE COUNTY IN 2030........................ ........................................................ 21 VI. ORANGE COUNTY BUSINESS COUNCIL WORKFORCE HOUSING SCORECARD ........ 28 VII. WORKFORCE HOUSING SCORECARD: METHODOLOGY......................................33 OCBC Workforce Housing Scorecard 2007 Table of Contents ORANGE COUNTY C BUSINESS COUNCIL 2007 Workforce Housing Scorecard page it ,Y4 a... f. - x t a T P P. Foreword and Acknowledgments In accordance with its mission to assure Orange County's economic prosperity while maintaining a high quality of life, the Orange County Business Council (OCBC), with major sponsorship from Bank of America, is releasing the 2007 edition of the OCBC Workforce Housing Scorecard. Commissioned by the Business Council's Workforce Housing Committee and OCBC investors and partners, including the Orange County Association of Realtors, La- guna Board of Realtors, IMPAC, Orange County Clerk - Recorder, Building Industry Association, United Way of Orange County, and Orange County Community Founda- tion, this report aims to spur a constructive dialogue among stakeholders in pursuit of a robust and integrated business community solution to Orange County's scarce supply of affordable housing for its workforce. The OCBC Workforce Housing Scorecard examines the state of the county's housing from a broad, long-term, employer -based perspective.. Only such an approach to affordability can uncover the critical solutions the county needs to ensure prosperity in the long term. As such, the report seeks answers to several pressing questions: :ome so expensive? n Orange County be in 2030? ties playing in affordability? taken to make housing more affordable? !came so expensive, the Scorecard examines the history of County, exploring trends related to population, employment, io of jobs to housing units. The report also explores NIMBY- er factors that have constrained housing development. a discussion of their impacts on Orange County's long-term ids continue, the ratio of jobs to housing in 2030 will be se - y will continue to decline, many more residents will be priced kers commuting into the county from beyond its borders will ry economy is the trend of people ages 25 to 44 leaving the t just to surrounding counties such as Riverside and San Ber- Foreword and Acknowledgements - nardino, but increasingly out of state. These people are the both the present and future workforce of Orange County, the foundation necessary for long-term economic sustainability and business competi- tiveness. As the report will demonstrate, high housing costs are driving these people out of the county in increasing numbers. The report casts a county -wide overview of the balance of jobs to housing, as well as a breakdown by city. Because each city plays a critical role as a land use decision maker in the supply and affordability story, the Scorecard evaluates each Orange County city on several important criteria, including: ■ Total job growth, ■ Total housing growth, and IS job growth as a percentage of county job growth, and changes in density. Cities are ranked in a composite scoring of their performance on the aforementioned criteria, both his- torically (1991-2005) and looking forward (2005-2030), allowing for comparisons of cities. This exercise establishes an important baseline from which cities—and their residents, elected officials, and business leaders—can increase future supply and affordability in line with their workforce demand. To support cities' housing plans, the Business Council will release a Toolkit later in the year with ex- amples of successful affordable housing programs and policies, reports and studies related to housing affordability, as well as potential legislation neces- sary to address some of the, existing barriers to Car�dToolAtl increased housing supply.trW- J compIWOetatt# is The Orange County Business Council Workforce 44650 ion Housing Scorecard and the OCBC's long-term com i�3s odtu satsain�e.uc i 1 - , mitment to. this issue is but one part of a larger g 77 TIMv movement for increased supply and affordability that"�n4.obu�, r IR must take hold in Orange County to ensure Contin ued, long-term prosperity. This Scorecard is a y '�} met starting point to foster a broad. and sustained dia logue on long-term housing supply and affordability4i�?t�=t. • Croons Irease One rewarding aspect of producing this report has • + of Tnast been the reassuring discovery that there is already aenslty'.Bonuses and Parking Variances dedicated and diverse pool of agents from the pn t Erll�rer /ksstteclr mental &Homebuyer vate, public, and nonprofit sectors seeking to gtairrts increase the supply and affordability of housing. To this end, the Orange County Housing Scorecard would not have been produced without the generosity of our main sponsor, Bank of America, as well as our aforementioned partners. In addition, representatives of all 34 cities contributed their time to validate the information presented in the report. What's more, the methodology, analysis, and style of this report have been greatly en- hanced thanks to the critical insights of a distinguished panel of peer reviewers, namely: Dr. Victoria Basolo, Associate Professor in the Department of Planning, Policy, and Design at the University of Cali- fornia, Irvine (UCI); Dr. Marlon Boarnet, Professor and Former Chair of Planning, Policy, and Design at ... - Foreword and Acknowledgements OCBC Workforce Housing Scorecard 2007 UC Irvine; Ray Silver, Executive Director, Orange County League of Cities; Dr. Scott Bollens, Professor and Former Chair of Planning, Policy and Design at UC Irvine; Dr. Kerry Vandell, Professor and Director of the Center for Real Estate at the Merage School of Business (UC Irvine); and William Fulton, Senior Scholar at the School of Policy, Planning, and Development at the University of Southern California and CEO of Solimar Research Group. Finally, constructive guidance for the project was provided by the Orange County Business Council's Housing Committee, chaired by Roger Hobbs and including Lucy Dunn, Todd Priest, and Kris Murray. The technical work of the report was led by Dr. Wallace Walrod, Director of Research and Communication for the Orange County Business Council and his team of research associates, namely: Lee Morrison, Roger Morton, Nicholas Poggioli, Adam Meyers, Alex Warren, and Dan Gorczyca. This report was de- signed by Danielle Bates of the Orange County Business Council. OCBC Workforce Housing Scorecard 2007 Foreword and Acknowledgements • - 11. Overview The subject of this report is workforce housing, one of OCBC's three key initiatives (along with infra- structure and workforce development/education). How do we define the scope of workforce housing? From the OCBC and general business community perspective, it is our county's responsibility to house our working individuals and families adequately. There are several important components of hous- ing policy, including reducing homelessness, reducing poverty, and accommodating the needs of our senior citizens and other vulnerable popula- tions. While these are important issues in their own right and the subject of many studies and re- ports, the focus of this report is fundamentally different. The scope of this report is concentrated on the availability of housing as a fundamental component for sustaining, if not increasing, Or- ange County's economic competitiveness. r..rrw� care �} The state of the county's housing in Orange { County can accurately be described as an unin- s '_ - = tended byproduct of an unprecedented period of prosperous growth—an amazing success story of sustained economic growth and job creation by the Orange County business community. In the last 15 years, Orange County has grown jobs at a rate of nearly 10 times that of Los Angeles County. During the same period, Orange County created more than 15 percent of the state's jobs while accounting for less than 9 percent of the state's population. The basic insight that Orange County has evolved and is evolving from a suburban to an urban place is not new. As far back as 1986, Mark Baldassare's Trouble in Paradise: The Suburban Transformation in America explored the emerging, more urban sociological pressures that Orange County was just be- ginning to experience. The following passage. reflects many of the trends affecting Orange County: "Decades of rapid growth and industrialization in suburbia have created a more diverse popula- tion, land -use mix, and activities. These have caused a new life-style and, with it, new problems. There are several constants in suburbia which have made the transition from the past to the present most difficult. One is that attitudes and preferences of the suburban residents, on is- sues such as housing and transportation, have not changed to reflect the current situation."2 Baldassare wrote that passage in 1986, when Orange County's population was just over 2 million resi- dents. Fast forward to 2007. - Mark Baldsassare, 1986, Trouble in Paradise: The Suburban Transformation in America. . - overview OCBC Workforce Housing Scorecard 2007 This year, Orange County's population has surpassed 3 million, making it the most densely populated county and metro area in California after San Francisco. Occupying an area of less than 800 square miles, Orange County's economy would rank higher than all but 36 countries. Yet, despite having be- come a densely populated and formidable economic power, people still prefer to view Orange County as suburban bedroom community—something the county hasn't resembled since the 1970s. While we may be tempted to pass this notion off as a benign sense of nostalgia, this yearning for yes- teryear has bred difficult obstacles to addressing the needs of workforce housing. All too frequently, housing plans are stymied by NIMBY -ism, which manifests itself in seemingly constant and endless conflicts over land use. While we don't want to disregard or belittle the legitimacy of protestations over development, this report demonstrates that our collective obstructionism has taken a significant toll on housing supply and affordability. Because housing is an issue that is heavily influenced by local planning commissions, General Plans, Housing Elements, RHNA allocations, and most importantly municipal elected leaders, we disaggregate much of our findings to the city level. By shedding light on each city's contribution toward securing housing for our county's workforce, we hope that greater support can be found for future action at the municipal level. I The county's business community can play a vital role in shaping cities' housing policies by communi- cating the critical link between housing supply and economic competitiveness. Although recognition of the county's housing needs has grown significantly among business executives, a sustained and deep- ened commitment among employers will be needed to foster greater awareness and coordinated action 1 by the business community. J Lest there be any reluctance toward action on housing, consider that 10 years ago the median price of an Orange County home was $185,000.' Despite the recent cooling of the housing market, the median price for a single-family home. in Orange County at the time of this writing is .$634,000.4 This sustained increased cost of housing has had a broad and deep impact on the county that goes beyond the lives of first-time homebuyers and young families shut out of the market. If left unchecked, the escalating cost of. housing will detrimentally affect the county on key social and economic fronts, including: ■ A weakened social safety net resulting from young residents leaving their parents behind in search of more affordable housing; ■ A weakened business climate resulting from greater difficulty of recruiting and retaining talented young workers; and ■ Longer commute times and increased congestion resulting from workers purchasing hous- ing at increased distances from the county's job centers. As far-fetched as these scenarios would have seemed 10 years ago, the report that follows will demon- strate that our young people are emigrating from the county in increasing numbers, Orange County employers are increasingly concerned about their ability to attract and retain workers, and commute 3 "Riding nine years of rising property values," The Orange County Register, January 19, 2006. / ° April 2007. OCBC Workforce Housing Scorecard 2007 Overview times are indeed worsening. Increased tax investments to reduce traffic congestion such as Measure M, in fact, only serve to mitigate the deterioration in commute times experienced by residents. Housing and Emigration from Orange County Much to the dismay of their parents, their employers, and government leaders, increasing numbers of young people are leaving Orange County and its high cost of living. Recent research has documented that the trend is widespread and that housing is a catalyst. In 2006, an Orange County Register article reported on the recent trend of young adults fleeing the county—a 13 percent drop in residents between the ages of 25 and 34.5 More recently, a May 2007 Public Policy Institute of California (PPIC) report found that "fewer than 10 percent of adults moving to other states cited housing as the pri- mary reason they moved out of California in 1997. By 2006, the percentage had jumped to 31." Recent Census data show that the number of residents - _ between the ages of 25 and 34 dropped by nearly 12.7 percent between 2000 and 2005, or nearly 59,000 peo- pie in five years. This rate of loss is nearly four times r s the state average. As expected, the number of children ._ +._:.-,:,z ------- ages five to nine (associated with younger families) also decreased, with corresponding decreases in elementary school enrollment. In fact, as a result of this phenomenon, three-quarters of Orange County school districts are experiencing declining enrollment. Figure 2.1: 2000-2005 OC and CA Population Loss by Age 35.0%j MOC%Change 30.0% , ■ CA % Change 25.0%''- 15.096 .4.7% 9.1% 10.0%-' 5.0%- 101 -10.0%:., -9.6% -15.0% 4 ::.. __...... ,. _....... Under 5 5 to 9 25 to 2 years years years 29.9% 15.3% _ 12.3% -2.1% -4.7% -7% 9 30 to 34 50 to 54 55 to 59 years years years 5 ,An Exodus of.O.C.'s Young Adults," The Orange County Register, August 24, 2006. 6 "Can California Import Enough College Graduates to Meet Workforce Needs?," Public Policy Institute of California, California Counts Population Trends and Profiles, Volume 8, Number 4 (May 2007). ... Overview OCBC Workforce Housing Scorecard 2007 in contrast to the decrease in young adults, the number of older adults ages 55 to 64 increased by 28 percent, or almost 63,000 people during this same time period. These trends, which led to the median age rising from 33 years old in 2000 to 35 years old in 2005, are projected to continue. By the year 2050, the proportion of adults over age 65 is expected to double, making up 21 percent of the county's population. Over the same period, the proportion of residents between 25 and 54 years of age will shrink by 1 1 percent, to 35 percent of the population. These statistics suggest that many of Orange County's children grow up and move away, leaving their aging parents behind. In the face of these quiet but significant demographic changes, how can we effectively increase supply and make housing more affordable in the future? There are many prevailing circumstances that curtail housing development, thus driving the cost of housing beyond what most households can afford. While it may seem a daunting challenge to many, the Orange County Business Council firmly believes that un- raveling these myriad disincentives will necessitate cooperation and accountability by all stakeholders. By increasing exposure to cities' track records on workforce housing, we can draw in greater interest— and advocacy—to this often under -reported issue. The scorecard has already engendered a critical dia- logue that will be paramount for yielding the common understanding necessary concerted action for this difficult challenge. We are not the first entity to try to encourage more housing and we won't be the last. A more well- known and institutional housing advocate is California's mandated Regional Housing Needs Assessment (RHNA). See page 20. Yet for reasons that will be made clear later in this text, the RHNA process alone has proven to be an insufficient vehicle for restoring a more healthy balance of jobs to housing in the county. \ Woodbury Court in Irvine. ©The Irvine Company, 2007. All Rights Reservea. OCBC Workforce Housing Scorecard 2007 Overview The succeeding pages of the Orange County Housing Scorecard will uncover why housing has become so expensive, as well as project what the housing market will look like in 2030. In addition, the report will identify incentives, disincentives, and policies that continue to exert a profound impact on our housing market. Finally, to introduce a much needed measure of transparency and accountability into the housing debate, the report includes a breakdown of Orange County cities' contributions to the housing market, in terms of new housing unit production, job growth, and density trends. BACKGROUND Out of 200 metropolitan areas in the United States, Orange County was recently found to be the fourth most expensive place to live in the country.' The breakdown of the index reveals that the county's dis- tinctive ranking is driven entirely by its high home prices (see Figure 2.2). San Frandsct Silicon Valley Los Angeles/Long Bead Orange County San Diego Boston Inland Empire Seattle Austin Research Triangle Figure 2.2.: Cost of Living Index (Second Quarter 2006) 0 s0 100 ISO 200 250 300 Source: ACCRA/Council for Community. The county's housing conundrum is primarily the result of a longstanding and widening divide between the county's booming employment growth and comparatively stagnant housing development. Between 1991 and 2005, Orange County produced approximately 345,700 jobs and 158,000 homes. Better stated, the county produced only one home for every 2.2 jobs created, and in many years only one housing unit for every 3 or 4 jobs created. The jobs -to -housing ratio is an indicator that we track closely in the succeeding pages. The implica- tions of this ratio should be clear to local employers and workers: workers need affordable homes for their families. ' According to the Council for Community and Economic Research. ... overview OCBC Workforce Housing Scorecard 2007 So what is a fair balance of jobs to housing? A ratio of one home per every worker is ideal, but with many households now boasting two -income earners we deem 1.5 to be an acceptable ratio, a bench- mark cited by many housing experts and planners such as Dr. John Landis, Chair of the City and Regional Planning Department at UC Berkeley. As it happens, only 15 years ago Orange County was housing rich, with a healthy balance of about 1.4 jobs for every home. By 2005, the county's balance of jobs to housing had deteriorated to 1.61 jobs for every home. Based on the most recent city planning fore- casts, because the region is projected to add only one housing unit for each 3.4 jobs created by 2030, the county's jobs per housing ratio is expected to deteriorate further to 1.79 jobs per house! If we were to assign letter grades for the county's role in promoting workforce housing, it would reflect this deterioration. In 1991, the county's 1.4 jobs per house would earn an A. The most recent 1.61 ra- tio is below average and merits a C. Any ratio greater than 1.75 merits a failing grade. e Cal State University Fullerton, Orange County projections (2007). OCBC Workforce Housing Scorecard 2007 Overview III. Demand Trends: Population, Employment, and Income Appreciation in Orange County (1991-2005) Population The first basic component of the demand factors influencing Orange County's housing story is popula- tion. From 1990 through 2005, the county's population grew. by 28 percent (from 2.3 to 2.9 million). Five cities—Anaheim, Irvine, Santa Ana, Garden Grove, and Orange—accounted for 40 percent of this growth (see Figure 3.1). Figure 3.1: 1991-2005: OC Population Growth Leaders Anaheim Irvine Santa Ana Aliso Viejo Rancho Santa Margarita Garden Grove Orange 00000000 Mission Viejo 2005 San Clemente L'Ful ■ 1991-2005 Growth j Fullerton Laguna Niguel Tustin Huntington Beach Laguna Woods Costa Mesa Newport Beach Westminster Yorba Linda Buena Park La Habra 150,000 200,000 250,000 300,000 350,000 400,000 0 50,000 100,000 Meanwhile, South Orange County saw the fastest growth. Newly established cities like Aliso Viejo and Rancho Santa Margarita grew by 491 percent and 280 percent, respectively. Five other cities grew by more than 33 percent. Cities that posted the slowest growth—all under 8 percent—were Laguna Beach, Fountain Valley, La Palma, Los Alamitos, Seal Beach, and Villa Park. Where did the growth in population come from? Seventy percent of this growth was "home grown," or the result of natural increase. Despite such a strong growth in population, the increase is fairly tepid compared to the job growth experienced in the same period, as the next section will demonstrate. Employment Gains From 1991 to 2005, Orange County added a remarkable 345,700 jobs—a 30 percent increase from 1991 (see Figure 3.2). This increase occurred in spite of a recessionary environment at the start of the last two decades. The leaders in Orange County's job growth—Irvine, Anaheim, Santa Ana, Orange, and Fullerton—accounted for over half of the county's total job growth for that period. Demand Trends: Population, Employment, and Income OCBC Workforce Housing Scorecard 2007 250,000- 200,000 150,000 100,000 50,000 0 Figure 3.2: OC Total job Growth Leaders (1991- 2005) Irvine Anaheim Santa Ana Orange Fullerton Costa Garden Huntingtomewport Mesa Grove Beach ,Beach Income Appreciation The third demand component tracked in this study is income appreciation. Between 1990 and 2005, Orange County's median household income appreciated by 48 percent, from $46,000 to $68,000. While the percent growth in income is substantial, it paled in comparison to the appreciation realized by Orange County Homes during the same stretch (see Figures 3.3 and 3.4). Because of the imbalance between a high level of demand driven by job growth and not enough newly built housing, the price of the median priced -home sold grew almost three times as much, 168 percent from 1990 to 2006. It's worth noting that increased access to housing credit vis A vis more flexible standards helped amelio- rate this disparity. Nevertheless, the recent market upheaval in the sub -prime sector proved that there are limits to the loosening of credit. Figure 3.3: 1991- 2005: OC HH Income vs. Home Value Appreciation A. Viejo S. Clemente Lag. Beach Tustin S. Park RSM SJC Irvine Y. Linda H. Beach N. Beach Lag. Niguel La Palma M. Viejo Orange C. Mesa S. Ana OC Median 0% 50% 100% 150% 200% 250% In summarizing the demand trends affecting housing over the last 15 years, Orange County experi- enced: OCBC Workforce Housing Scorecard 2007 Demand Trends: Population, Employment, and Income ■ A 28 percent increase in population or 645,000 new residents (half of these new residents were added to Anaheim, Irvine, Santa Ana, Garden Grove, Orange, Mission Viejo, Fullerton, and Huntington Beach, with. South Orange County cities experiencing the fastest percent- age growth in population); • An increase of 345,700 jobs (growth rate of 30 percent), the majority of these jobs being created in the county's traditional job hub's, but faster relative growth in Southern Orange County; • An increase, from $46,000 in 1.990 to $68,000 in 2006 in Orange County's median house- hold Income; and • A growth of 168 percent in the cost of Orange County's median -priced home sold between 1990 and 2006. Internal Street View Demand Trends: Population, Employment, and income OCBC Workforce Housing Scorecard 2007 IV. Supply Trends: Housing Growth in Orange County, 1991-2005 Having detailed the demand trends that took hold in Orange County between 1991 and 2005, we now shift attention to the housing supply trends. In 1991, there were approximately 1,150,000 jobs in Or- ange County and 815,000 housing units—a nearly ideal ratio of 1.4 houses for every job. As discussed in the preceding section, the 1990-2005 time period brought about tremendous em- ployment and population growth in the county. Unfortunately, cities could not boost a sufficient supply of housing to keep up with this pace. From 1991 to 2005 Orange County added 158,000 houses—a 19 percent increase in housing stock. Figure 4.1 below shows cities that generated the most housing in the 1991-2005 period. Six cities accounted for half of the county's total housing growth, namely: Ir- vine, Lake Forest, Aliso Viejo, Anaheim, Rancho Santa Margarita, and Newport Beach. 30,000 25,000 20,000 15,000 10,000 5,000 0 � o a a ts� S� �,°re`s �S�Oear wear j`��° �J`'``� °'�`�,¢ `e ° Jcaacec`• `fie 5tiR F� Q Fiaure 4.1: 1991-2005: OC Housing Growth (Leaders) 350% 300% 250% 200% 150% 100% 50% 0% While the leaders in housing growth far exceeded the county median, the same figure shows that most of these cities' new housing came well short of keeping balance with the county's booming job growth. As you will recall, from 1990 through 2005, the county's population grew by 28 percent (from 2.3 to 2.9 million) while generating 345,700 jobs or a 30 percent increase in employment. (see Figure 4.2). Irvine L. Forest A. Viejo Anaheim RSM N. Beach H. Beach M. Viejo Tustin S. Clemente L. Niguel Westminster Fullerton S. Ana Y. Linda Placentia Figure 4.2:1991-2005: OC 0 20,000 40,000 60,000 B0;000 100,000 120,000 140,000 160,000 OCBC workforce Housing Scorecard 2007 Supply Trends: Housing Growth In OC, 1991-2005 .. The result of this housing -to -job growth imbalance was an overall deterioration of the jobs to housing ratio and, consequently, a decrease in housing affordability. By 2005, Orange County was moving in the wrong direction, having gone from having 1.4 jobs for every home to having more than 1.6 jobs for every home. As Figure 4.3 demonstrates, this imbalance was extremely high in comparison to both state and national trends. Figure 4.4 shows the cities that experienced the greatest deterioration in their jobs to housing ratio. Figure 4.3: New jobs Created per Housing Permit Granted 2000-2005 Sources: Hanley Wood Market Intelligence (www hanleywood com/hwmi) and United States Bureau of Labor Statistics. L. Alamitos Irvine Brea Orange S. Ana L. Hills C. Mesa Anaheim N. Beach F. Valley Tustin Cypress B. Park Fullerton Figure 4.4: 1991 Vs. 2005: jobs to Housing Ratio Deterioration Wilk 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 ... supply Trends: Housing Growth in OC: 1991-2005 OCBC Workforce Housing Scorecard 2007 Orange County's Density: No Longer a Suburb The 2000 Census revealed more proof that Orange County is no longer a suburb, but the most densely populated area in the state behind San Francisco County. The prevailing density and scarcity of land has forced many cities to build vertically, such as Anaheim's platinum triangle project and high-rise de- velopments underway in Irvine, Costa Mesa, and Santa Ana. Even before the start of these high-rise developments, many Orange County cities experienced a sub- stantial increase in density between 1990 and 2005 (see Figure 4.5). Gains in density can be chalked up to cities' efforts to increase multifamily housing and/or rezoning to higher and more efficient uses. An increase in population density without construction of sufficient new housing units almost always results in overcrowding, which is driven by a lack of affordable housing options for lower-income households. A. Viejo L. Forest Tustin Stanton Placentia Irvine L. Hills Westminste N. Beach L. Niguel S. Clemente Cypress H. Beach M. Viejo Orange La Habra D. Point OC Median Figure 4.5: 1990- 2005: OC Cities' Change in Density (Leaders) i 0 1000 2000 3000 4uvu :2vvv Between 1990 and 2000, overcrowding—the federal HUD standard in which there are 1.01 persons per room in a dwelling unit—grew by an average of 44 percent across the county. Figure 4.6 lists those cit- ies that saw overcrowding grow at a faster rate in the 1990s than the Orange County median. Figure 4.6: 1991- 2005 OC Overcrowding (1.01 occupants or more per room) Legtna Kils Villa Park La H bra Stanton Irvine Arshsim Lsgun! Niguel Tustin Garden Grove M lesion Viejo senjuin Cepistrano Costa M ass Wastnirsster Busne Park Brae Seel Beach ORANGE COUNTY M EDIAN III 0% 0 50% 100% 11111 2000 % Overcrowded ■ 1990 % Overcrowded ■ Percent Growth I 150% 200% 250% 300% OCBC Workforce Housing Scorecard 2007 Supply Trends: Housing Growth in OC, 1991-2005 Housing Supply Constraints: Land Scarcity, Infill, and the Myth of Being Built Out Land scarcity has a substantial impact on the affordability of Orange County homes. According to UC Berkeley Professor .John Landis, a 10 percent reduction in the supply of available land can increase home prices by 20 to 30 percent.' In Orange County's historic concept.of development, that of single family houses and master -planned communities, it's forgivable to perceive the county as being "built out." Build -out refers to the point at which a city can no longer change its infrastructure in a particular way. For the Scorecard, housing units are the focus: a city is built out when it can no longer add housing units. While physical space is certainly an important criterion, the administrative and technological constraints on land use are more important when assessing degree of build -out. Regulation of building height and housing density along with technology work together in shaping the city. For example, at some point before 1900 the city of Manhattan was thought to be built out. That was until the arrival of the skyscraper, which enabled the city to become the most densely populated city in the country-" The interplay of technology and forward looking leadership silenced those who had claimed Manhattan built out. Although Orange County may never resemble Manhattan, Santa Ana was thought have been built out in 1975, when the last large open parcels were built upon. Since 1975, Santa Ana's population has dou- bled, from 177,400 to 355,000. The underlying lesson of both Manhattan and Santa Ana is that cities can utilize administration of land use along with technology to allow housing unit production to re- spond to the high demand for housing units. Infill capacity is a key component of land administration. The definition of Infill is "to fill in any avail- able space within existing development." According to John Landis's database of infill potential, Orange County --one of the most densely populated areas in the country—actually has more than 34,000 par- cels or more than 9,000 acres of developable land" (see Figure 4.7). What potential impact can 9,000 acres have on housing? Consider that for the Great Park—which boasts nearly 4,700 total acres—about 750 acres are being set aside for housing." It is projected that the 750 acres will yield 5,800 housing units or a density of 5,000 units per square mile. If we were to scale up this dense mix of housing across Orange County's 9,000 acres of developable land, nearly 70,000 more homes could be created. Another consideration to take into account is that the county's developable land does not end after the aforementioned 9,000 acres have been exhausted. As land property values increase, there will be in- creased incentives for redevelopment for more multi -family planning. 9 California Homebuilder Magazine, California Building Industry Association, May/June 2003. 10 Yet, the density could be even higher if administrative constraints had not held back technology. Because skyscrapers cast shadows blocking out the sun for entire city blocks, Manhattan enacted setback regulations on building envelopes, mandating that buildings become narrower as they got taller in order to mitigate the impact of their shadows. 11 Data courtesy of C. Scott Smith, a researcher at the University of California, Irvine. Smith used the Pilot California Infill Parcel Locator from the Institute of Urban and Regional Development at the University of California, Berkeley, to identify potential infill parcels in Or- ange County. " This figure does not include the 60 acres allocated for an unspecified number of affordable housing. Supply Trends: Housing Growth In OC: 1991-2005 OCBC Workforce Housing Scorecard 2007 Figure 4.7: Orange County Current Infill Land (Acres) ■Single 11% 0% Family 6% 37% ■ Multi -Family ■ Commercial ❑ Vacant 27% ■ Industrial 19% ■ Agricultural Given the substantial impact that land scarcity has on housing prices and the aforementioned capacity for infill development, Orange County's regulatory environment—from municipal and zoning entities to the constituencies that influence them—plays a pivotal role in shaping the future of our housing mar- ket. The housing unit capacity for.the county entirely depends upon the type of housing at issue. If we de- fine housing as single-family detached units, then Orange County is indeed nearing build -out: there simply is not enough physical space to accommodate continued sprawl of single -story, single-family houses. If instead the discussion accommodates differing types of housing units, we find ourselves very far from being built out. The construction of residential towers in Irvine, Anaheim, and Costa Mesa shows that we can indeed build "up." Such towers are part of a larger set of new developments built in- side existing urban areas and known as infill developments. Infill developments can be anything from single-family homes to high-density residential complexes; the key is that they are built within existing urbanized areas, not on the periphery. In its potential to serve the growing demand for.urban lifestyles, infill development could prove a boon for the already prominent Orange County economy. Young professionals and retirees alike are turning from suburbs to urban areas to find the plethora of services and ease of movement offered only by dense, vibrant mixed-use areas. Orange County already possesses most of the infrastructure of an ur- ban metropolis, yet, as revealed by the UCI analysis, the county also has tremendous potential for increasing the density of amenities like housing and services. Orange County's lack of density is a quasi -raw material that could be harnessed to fuel future growth as demand for urban lifestyles drives increased economic activity in dense, connected urban areas. Young professionals will demand jobs with pay commensurate with their skills and that are located in urban centers. With infill, the county can create housing to satisfy the demands that the Orange County economy will be creating in the next 25 years. Developer Fees and Environmental Regulation Recent times have witnessed the growth and utilization of developer fees, or impact fees, in many ju- risdictions throughout the state and within Orange County. These fee programs are the result, in part, of fair -share calculations whereby developers of new projects contribute funds to capital improvement programs such as schools, transportation, libraries, and other services. The fair -share calculations are OCBC Workforce Housing Scorecard 2007 Supply Trends: Housing Growth In OC, 1991-2005 ... usually derived based on the size of the project relative to its expected impact to public services. De- veloper fee programs have extended beyond the usual building permit fees traditionally associated with the costs of development and are typically passed along to the buyer in the form of higher prices, decreasing affordability. According to recent surveys by the Orange County Chapter of the Building Industry Association of Southern California, the median housing permit fee charged by city's in Orange County increased 29 percent between 2000 and 2005. During that five-year span, only six cities reduced their housing per- mit fees: Brea, Costa Mesa, Fullerton, La Palma, Los Alamitos, and Orange. At the same time, two cities raised their fees by more than 250 percent. Figure 4.8 shows, in aggregate form, the various drivers that impact the total permit fee for houses. 47.5% Figure 4.8: Housing Permit Fee Breakdown: Orange County Aggregate 2.3% 7.8% 27.4% 4.1% 10.8% ■ Environment ■ Planning ■ School Fees ■ Other Fees ■ Engineering ® Other (not Identified) NIMBY - Growth Controls Beyond direct, per-unit housing fees, regulations can also slow down housing construction. NIMBY ob- struction is a popular and powerful force for blocking development. Citizens see higher -density developments in proximity to traditionally single family communities as an infringement on the current quality of life. Typical NIMBY concerns include overcrowding at schools, traffic congestion, and the im- pact on services such as police and fire. Changes in population or commercial activity encourage citizens to mobilize and encourage policy makers to curb plans for growth. Policies have been imple- mented to enact growth boundaries or control housing unit approvals, both of which have restricted the supply of housing units. Whether spearheaded by residents or environmental or industry concerns, the California Environmental Quality Act (CEQA) has proved to be a popular and cost-effective method of curbing such development. Using CEQA, a claim against a developer can delay housing projects by years, even decades. State law regulating environmental oversight in the form of the CEQA has expanded over the years to private de- velopment review. Environmental Impact Assessments and the production of Environmental Impact Reports have required more pre -development costs of subdivisions and other projects. These are addi- tional factors of greater cost associated with housing production. Mitigation fees required of final environmental impact declarations further add to the cost of housing production. These costs of pro- duction go along with developer fee programs in raising the raw cost of production per housing unit. ... Supply Trends: Housing Growth in OC: 1991-2005 OCBC Workforce Housing Scorecard 2007 These regulatory costs have negatively affected the overall affordability of the housing market because they are passed on to buyers. Fiscalization of Land Use In the past, cities could define and shape their balance of housing and jobs both through their control of land use and through revenue generation. Today, local governments have lost much of their discre- tion and control in regard to fiscal policies. Statewide initiatives such as Prop 13 have limited the ability to raise revenue through property tax increases to meet the needs of city budgets. Land -use decision- making authority is the one power still retained and controlled by municipalities. In the absence of fi- nancial controls they once had, cities now increase revenues and decrease costs through land use decisions. Many have argued that these cost -sensitive policies have been at the expense of the perceived "bal- ance" of communities. Previously, cities could allocate greater amounts of land for multi -family residential housing units because cities controlled property taxes. Now, as many argue, such housing units would be undesirable according to fiscally concerned land use decisions that take note of a loss in revenue when calculating total revenue realized from these units less the cost associated with the accompanying public services. Where cities have become wary of approving high-cost uses, these poli- cies tend to favor larger -scale commercial uses generating high levels of sales tax. This "fiscalization of land use," as coined by Dean Misczynski in 1986, means cities will approve land uses that are fiscally sound, and be averse to land uses that result in negative financial returns. The current imbalance be- tween jobs and housing supply partly reflects the land -use decisions of cities focusing more on the balancing of budgets and less on balancing the community. Affordable Housing Programs Orange County and three of its largest municipalities also provide much needed housing assistance for lower-income households. Section 8 assistance is Orange County's primary mechanism for providing housing assistance to those deemed unable to afford" the cost of a two-bedroom rental home in the county." But as a result of the lack of affordable housing in the county, local housing authorities face a severe backlog in their ability to provide help for those who need housing assistance. In the span of only one month," the Orange County Housing Authority accumulated a waitlist of more than 20,000 applicants. City housing authorities also show an increase in demand for affordable hous- ing. In 2004, Anaheim's waitlist included more than 17,000 applicants, while Santa Ana and are Garden Grove had 9,700 and 5,900, respectively. In total, there were more than 50,000 applicants he waitlist for Section 8 housing assistance in 2005. If left open, these waitlists will continue to grow as national and local funding for Section 8 has decreased while housing costs have soared. 13 Defined as a person who cannot work a total of 73 hours per week. Priority for section 8 housing is given to the elderly, the disabled, and families. 14 In 2005, fair market rent for a two-bedroom housing unit averaged $1,317. " November, 2005. Prior to this, the waitlist had been closed since 2001 and by 2004 was down to approximately 9,800 ap- plicants. 1 Trends: Housing Growth In OC, 1991-2005 OCBC Workforce Housing Scorecard 2007 Supply 9 Accountability California state law requires that jurisdictions provide their fair share of regional housing needs.16 In cooperation with the California Department of Housing and Community Development (HCD), local gov- ernments and councils of government are charged with determining their existing and projected housing needs. This process, known as the Regional Housing Needs Assessment, affords cities the re- sponsibility of both establishing and meeting their housing targets. As the reader may surmise, this process of establishing housing targets leaves much to be desired in terms of accountability and objec- tivity. During the 1998-2005 cycle, for example, RHNA allocated 52,815 units to the 34 Orange County cities focused on in the Scorecard. Through June 2005, those 34 cities permitted 60,927 units of housing, exceeding their RHNA allotment by 15 percent. The most obvious problem is that this target was insuf- ficient to keep up with the growth of jobs created. Even if we suspend this notion that the bar is being set too low, the RHNA process is arguably too forgiving. Consider the following: • Of the 34 cities that collectively exceeded the RHNA target by 15 percent, only 14 actually met their individual RHNA targets. ■ The five most overcrowded cities—those having the highest percentage of households with persons -to -rooms ratios greater than 1.01 in the year 2000—failed their RHNA allocations ii by an average of 14 percent. One city fell short by more than 8,000 housing units. J • Fourteen cities were allotted 30 percent of the total county need and_largely because of the performance of one city—met 60 percent of the county's target. Meanwhile, 16 cities were allotted 40 percent of the county's target, yet collectively they produced only 21 per- cent of the county's need. 16 The State of California Department of Housing and Community Development is mandated to determine the state-wide housing need. Supply Trends: Housing Growth In OC: 1991-2005 OCBC Workforce Housing Scorecard 2007 V. Orange County in 2030 In synthesizing the housing supply and demand trends over the last 15 years, at the regional level it is unmistakable that housing supply growth has fallen well shore: of population and job growth, resulting in an appreciation of housing prices that have far exceeded appreciation of income. This section takes aim about how cities' housing plans for the future will affect the housing market in 2030. Between 2005 and 2030, Orange County's population is expected to grow by 11 percent, to 3,266,000. The median city is projected to grow by about 10 percent, or around 7,000 residents. Figure 5.1 in- cludes those cities that are projected to exceed the median population growth rates. 45,000 40,000 35,000 30,000 25,000 20,000 1 5 , 000 10, 000 5,0000 Figure 5.1: 2005- 2030 Population Growth by City _ r c0 �a . <c ,� C� aya oc �o� a� as r o`\�� A-0 v.; � 4 ,c2` �a \IQ aQ J5 (co qac \��`ac a \1C', Pcao arc '� eR, p ��a ��� 5 �t� .4.oa olc ��ho'�`� c� Vada �pv �J.��y�Q � Jit. �e 35% 30% 25% 20% 15% 10% 5% 0% In addition, between 2005 and 2030, Orange County will generate an estimated 320,000 jobs, or a to- tal job growth of 20 percent. During that span, the median Orange County city will create 3,345 jobs. Figure 5.2 illustrates projected job growth in cities. Irvine Tustin Lake Forest Huntington Anaheim Cypress Costa Mesa Santa Ana San Clemente Fullerton Orange Brea Fountain Valley Westminster Buena Park Aliso Viejo Laguna Hills Figure 5.2: OC Job Growth: 2005-2030 0 50,000 100,000 150,000 200,000 250,000 3W,Vuu =vu,u— OCBC Workforce Housing Scorecard 2007 Orange County In 2030 .. . I To determine the county's housing forecast, we relied on Cal State University Fullerton's 2007 Orange County Projections. Based on those projections, Orange County is expected to add approximately 94,000 houses between 2005 and 2030—a growth rate of just under 10 percent. Figure 5.3 shows only those cities with total housing growth projected to exceed the median rate. 30,000 25,000 20,000 15,000 10,000 5,000 0 Figure 5.3: 2005-2030: OC Housing Projections by City \<J`0,pr.` (�5�,(% Pr a 0�5.O , le o G 0vo\\`+ 00GoIN�ep SL p F0y.QpC �\t�1 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 1 In comparing the forecasted job and housing growth, this means that the county will create only one house for every 3.4 jobs. If every new home forecasted accommodated 1.5 workers, as many as 179,000 new workers (56 percent of all new jobs created) would most likely either live in severely over- crowded conditions of commute in from outside Orange County, pushing the number of workers commuting in to Orange County each day to nearly 500,000. Lake Foresl Cypress Los Alamitos Irvine Orange Fullerton San Clemente Placentia Costa Mesa Tustin Villa Park Santa Ana Orange County 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 The preceding pages of this report should make the consequences of this projected imbalance clear. First, the overall ratio of jobs to housing will deteriorate to 1.79 in 2030. (Figure 5.4 shows the break- down by city). As a result, affordability 'of homes will decrease further. Third, with so many new ... orange County In 2030 OCBC Workforce Housing Scorecard 2007 workers without homes to purchase, many will be forced to commute from outside the county, result- ing in increased commute times and traffic congestion. The Fallout of orange County's Expensive Housing Market The aforementioned projections portend a further deterioration in housing affordability without signifi- cant action. This section takes stock of the likely consequences in both social and economic terms. The Loss of Young Residents Perhaps the most alarming trends resulting from the county's high housing costs is its effect on the county's young, working -age population. In identifying the impact of housing on young residents, it's important to take into account two trends: 1. Across the country, the median age will rise with the tide of baby boomers coming into the age of retirement; and 2. There is a unique and disproportionate loss of Orange County's young, working -age population. of ents between es of explained in the b nearly 12.7ent Census data show the pe cent between 2000 and 2005, or nearly 59, 00 people in five of 25 and 34 droppedY years. This is a trends also playing out in Los Angeles County and San Diego County. Contrast that with the growth in the 25 to 34 -year-old segment taking place just east of Orange \ County in the Inlando (which ulat on of aboutconstitutes 4.2 m llioImperial, n. BRiverside, 2000 and 2006,theircpopuountilation of Inland Empire has a totstal p p people between the ages of 25 and 34 grew by 149,000, or -32 percent. Even the expansion of credit in the mortgage sector could not stem this tide. Moreover, since the re- cent collapse of prominent sub -prime lenders, it's reasonable to assume that credit will be much more restrictive going forward. The loss of young residentscannot funding underestimated. Cities suffer losses in sales tax revenue and school districts lose critical apportionment Employers While we can see that the lack of affordable housing is clearly influencing the decisions of young peo- ple, they are not the only ones affected by the cost of housing. After all, many of the 67,000'young people that we identified as leaving Orange County's larger cities between 2000 and 2005 could also be leaving the county's workforce. In May 2007, the Public Policy Institute of California (PPIC) found that California "probably won't be able to attract enough college-educated workers to meet current, skill -driven, economic projections—and thus may have to rein in expectations about what the economy will look like in 20 years."" In this context, many employers might also find the county's housing market to be prohibitively ex- pensive for attracting the young workers they demand. Compounding the issue is that many employers ""Can California Import Enough College Graduates to Meet Workforce Needs?," Public Policy Institute of California, California Counts Population Trends and Profiles, Volume 8 Number 4 (May 2007). OCBC Workforce Housing Scorecard 2007 Orange County in 2030 page 23 will need to replace the baby boomers on their respective payrolls once they reach the age of retire- ment. Will employers be able to replace these retirement -age workers? If not, many employers wishing to re- main in Orange County will either need to retain older workers or, if possible, invest in technology to compensate for labor shortages. Other options include reconfiguring operations (through off -shoring and/or relocation) or closing operations altogether. While this may seem like a far-fetched proposition to some, a recent survey of local executives demon- strates that the issue of housing is weighing heavily on the minds of many employers. According to the survey, 25 percent of local executives identified the county's housing as the most negative factor influ- encing the local business climate. This made housing the most common negative factor influencing the business climate among local executives. Orange County is not the only area in California affected by high housing costs. The Bay Area, Los An- geles, and San Diego Counties also find themselves at a competitive disadvantage. Notwithstanding, the exclusivity of Orange County's housing, if it persists, will loom large on employers' hiring and compensation practices, as well as on long-term planning. That is, if left unresolved, housing costs will continue to play a larger and more significant role in employers' consideration on whether to remain operating in the county and, if so, at what capacity. Commuters } Following housing, table 2 tells us that the second most negative factor influencing the business cli- mate is also caused by housing imbalances: traffic, agreed upon by 23 percent of local executives. As many resident commuters can attest, congestion in Orange County is getting worse. Long commutes not only affect personal lives, they impede the efficient movement of goods, cause declines in worker productivity because of time lost in transit, and contribute to global warming. The issue of housing and traffic go hand in hand. Vehicle miles traveled or "VMT' is projected to in- crease steadily in the future, despite our sustained investments in transportation infrastructure vis a vis Measure M. A significant contribution to our increasing VMT is the fact that aspiring homeowners con- tinue to chase affordable housing located further away from the county's job centers, such as the Inland Empire and Riverside County. ... Orange County in 2030 OCBC Workforce Housing Scorecard 2007 Figure 5.5: OC Employment Magnets (2005) Orange County has 1.3 million jobs and approximately 1.5 employed residents. But because the county lacks an urban "core," the spatial relationship between the jobs and workers is fragmented. Figure 5.5 (previous page) shows the county's largest employment centers. Collectively, these cities attract well over 192,000 (jobs within jurisdiction minus employed city residents). Where are the workers commuting from? Twenty-five Orange County cities account for a surplus of 331,000 workers minus jobs within jurisdiction. Figure 5.6 shows the 14 largest "worker exporter" cit- ies in the county." 180,000 160.000 140.000 120.000 100.000 80.000 60.000 40,000 20.000 0 Figure 5.6: OC Employment Magnets (2005) Irvine orange Newport Brea Costa Anansim ,.oa ..r••••- -- - Beach Mesa Alamltos Hills Ana Renters Since 78 percent of Orange County households cannot afford the median -priced home in the county, the demand for rental properties continues to grow. This effect could be more pronounced given the 16 Thel 1 cities not listed constitute "the long tail" and have between 1,000 and 10,000 more workers than jobs. OCBC Workforce Housing Scorecard 2007 Orange County in 2030 .. . (1 tightening of credit in the mortgage sector. As such, rental occupancy has increased in 27 out of 34 Orange county cities.19 As occupancy rates have increased, so too have the appreciation in rental rates and the relative income needed to afford a home. For the year ending in the third quarter,10 Orange County's largest landlords raised rental prices by an average of 6.1 percent, making the typical rent at a large complex equal to $1,494 (up $88 in a year). According to the National Low Income Housing Coalition, an Orange County household earning mini- mum wage can afford to pay no more than $351 per month in rent. A household earning 30 percent of the Orange County median family income ($22,710) can only afford to pay $568 in rent. Among state and national peer metropolitan areas, only San Francisco has higher housing wages (in other words, less affordability in rental housing) than Orange County. The increase cost of renting housing has a spillover effect on housing. Increased rents leave renters with fewer savings for a down payment of a home. Society According to a poll by the Public Policy Institute of California, nearly 75 percent of California residents believe their kids won't be able to find a home in California they can afford. In detailing how the lack of affordable housing affects young residents, employers, commuters, and even homeowners, it becomes clear that the economic impact of home prices are borne not only by first-time homebuyers. The exclu- sivity of Orange County's home prices will continue to factor into workforce planning, and will have a broad and deep impact on our society. As we've demonstrated, more and more people will likely move away from the county as housing be- comes prohibitively expensive for young residents. Parents and grandparents that remain in the county will have to travel farther to see their kin. As such, many residents will be left with a weakened familial safety net that we depend on for emergency support. Friends and professional caregivers will be called upon to fill this void. Our hospitals, by their own admission, are having an increasingly difficult time attracting personnel to work in the county. As we can see in Figure 5.7, the annual income needed to afford a house in the county is $145,680," or less than the combined salaries of a nurse and a school teacher. It's important to think beyond affordability and factor in purchasing power. That is, just because a physician can af- ford a home in Orange County doesn't mean he or she will be willing to forgo less expensive housing elsewhere. That is exactly the quandary that local hospitals face in recruiting both nurses and young physicians. 19 The remaining seven cities either kept their same rental rate or saw a marginal decrease in rental occupancy (the highest decrease was 0.9 percent). ° According to RealFacts. n Based on an adjustable interest rate of 6.48 percent Orange County in 2030 OCBC Workforce Housing Scorecard 2007 S200,000 S180,000 $160,000 $140,000 S120,000 S100,000 580,000 560,000 540,000 520,000 SO Figure 5.7: Income Needed to Afford Median Priced Home ($710,920) Compared to Typical Salaries Orange County, 2006 Elementary School Teacher Nurse OCBC Workforce Housing Scorecard 2007 Orange County in 2030 I A. Orange County Business Council Workforce Housing Scorecard Orange County Business Council Workforce Housing Scorecard, 1991-2005 From 1991 to 2005, newer cities -predominantly in South Orange County -were the most aggressive in terms of generating new homes. Much of the newly built homes were constructed on previously un- developed land. As cities such as Rancho Santa Margarita, Aliso Viejo, Lake Forest, Irvine San Clemente, and Mission Viejo were being constructed, housing expanded at a pace consistent with employment development, and high land values in virgin territories encouraged higher -density development.2z 1 Irvine 26 i 1 1 1 8 _ 6 1 2 Aliso Viejo 27 22 2 2 1 3 Tustin 31 , 16 9 3 3 4 i Lake Forest 33 i 10 7 11 5 _ _ - 5 1 Newport Beach _ 6 _ Huntin ton —Beach-.- 36 _ 42 I 9 _ 8 __ 5 6 13 i 9 7 1 Mission Viejo 42 11 8 9 _ 14_ _ 8 1 San Clemente 46 12 11 12 ( 11 9 Westminster 46 15 13 10 8 10 Laguna Niguel 48 20 12 4 12 11 Placentia 53 13 17 19 j 4 i ---_12 _Grange - ----- —55-- --4— ._-10 25 _'_3.6 .__ 1 13 _14 15 16 Laguna Hills_ i Anaheim _ Rancho Santa _M_ar Arita _ T Stanton 60 _ 61 _64 64 _ 26 2 27 2_0 4 3 25 7 24 1 6 31 33 2 17 ' Fullerton 66 _31 5 14 27 20 18 Cypress 68 14 23 21 10 19 San Juan Capistrano 69 25 19 8 17 Yorba Linda --_ - _ 69 23 —' — 16 5 --26 25 _____.� _20 21 _ Garden Grove 72 i 7 -T-3 18 2 22 23 Santa Ana }Brea 72 74 19 15 21 31 16 i 23 _ 18 24 1 La Habra 81 28 24 14 i 15 25 ! Costa Mesa 82 6 22 30 24 26 Fountain Valley 17 26 23 _ 22 27 Dana Point _88 89 21 27 22 19 -28 29 ._._Buena Park La Palma _... 101 107 18 34 28 30 28 17 -- -27-- 26 _ - -30 31 _ - Laguna Beach -- ._ _..._ Seal Beach117 _ _ ._110-- - 24 _ . __.. _ 33 29 32 _ 29 20 1 _28._-..-7 32 32 i Los Alamitos T 122 29 31 33 _ + 29 _ 33 Villa Park 127 32 33 32 30 34 Laguna Woods _ 132 30 34 34 34 f _ u Note that Laguna Woods has zero jobs in 1991. The city was incorporated in 1999. The scores OCBC Workforce Housing Scorecard 2007 The Orange County Business Council Workforce Housing Scorecard, 2005-2030 The Scorecard rankings for the period between 2005 and 2030 reflect a significant change in the type of future development Orange County will see compared to the residential that took place in the past. As the availability of virgin land in the county diminishes, housing development is increasingly taking place in the already developed, more urbanized areas of Orange County such as Anaheim, Santa Ana, and Irvine, where jobs, commercial activity, and recreational opportunities already exist,. Furthermore, since older and more urbanized jurisdictions have fewer undeveloped parcels for infill development, higher -density housing will become more common. gi - Oran iew Coun BL5�111°53 C011i1CII WQMorce HOUS11r1 SC41'l'Cal' 2�DS � Lake Forest r r 5 FAIL z 90 .r -ri fes' 'S-: t R 3 ", i4'=_4 1 14 �.. . �' cs'T'Z'� •�F'.� � y .'��T� � F �� _ .YF} : 2 'i C't' ,. s $ 31 �p 1 14 20 29 32 33 32 1 Los Alamitos 116 33 13 5 2 3 3 ' 1 j Anaheim 122 -.-._ i_-____.- 1 13 1 2 ; Irvine _16 1 - 131 9 i 3 Santa Ana 32 8 5 10 4 ; Tustin 32 -� ' 2 3 --+- 23 - - 4 -- _ _ --- — 5 New ort Beach 33 21 4 2 6 1 36 11 6 i 8 11 6 orange 42 10 8 11 13 7 i Fullerton 43 12 12 12 7 8 Brea 44 25 10 4 5 9 i Placentia 4 7 9 1 5 10 Huntington Beach -1 45 11 20 12__ ! -- 11 Cost Mesa 50__t___27__ 5 2- J _ 1--- 2 Stanton - _ - --_ -- _ _51 51 -- 30 _ 14 - 31 9 _ 1 10 I, 13 ' Yorba Linda 8 61 6 18 29 14 C ress 15 Fountain Valley 61 13 17 17 14 16 I Garden Grove 62 23 13 7 19 _ 17 San Juan Capistrano 64 18 16 _ 16 19 9 _- 4 211 --- 17 - 18-� Aliso Vie.L_.._ -- ----66 - -- _1 - --- ---, -_ 19 San Clemente - 9 _ is __- 24 —18 ---,- 20 Buena Park 73 '; 15 20 1-8'-'- 21 Laguna Woods 85 • 29 25 15 16 22 1 Westminster 86 14 21 27 24 23 La una Ni uel 89 19 22 22 26 24 ! La Habra 90 22 24 21 23 --J 25— Hills- --- 93 T 17 26-- 28 29 -- -puna 26 ?Mission VieJo 95 27 23 16 _ 27Dana Point 101 _ 24 _ 27 _ -25 2.5 --_ - �Ai villa Park _ 101 34 33 6 28 —2-9 __t Lake Forest 10Z i 3 26 "- 28 an 30 --� 30 30 Rancho Santa Margarita 1 14 31 Seal Beach 1 14 20 29 32 33 32 1 Los Alamitos 116 33 30 26 27 33 _Laguna Beach _.._-._`_._ _ ----- 122 -.-._ i_-____.- 28 32 - -- - --, 34 - - -31- - 33 --31- 32 - -34- i La Palma _ + - 131 32 - _ OCBC Workforce Housing Scorecard 2007 The Scores ... The Orange County Business Council Workforce Housing Scorecard, Cumulative What are the commonalities between the 1991-2005 and 2005-2030 periods? In general, the larger, more urbanized cities made greater strides to balance housing and job growth, resulting in a higher ranking for those periods. Smaller communities with a higher concentration of single-family residential housing posted lower rankings. Among coastal cities, Huntington Beach and Newport Beach received relatively high rankings during both timeframes, while Laguna Beach and Los Alamitos had lower rankings. in the inland areas, Tustin and Orange did well, while Villa Park and La Palma did poorly. There is also some contrast between the two periods, namely the migration of housing growth from South and Coastal cities in 1991-2005 to more urban and inland communities between 2005 and 2030. In the 1991-2005 grades, coastal South County cities did well largely because new tracts in San Clemente and Aliso Viejo were under construction, in addition to coastal communities north of the 55 Freeway such as Huntington Beach and Westminster. However, from 2005 to 2030, in both North and South County, the larger inland cities like Anaheim and Santa Ana will see greater housing supply growth and should be highlighted as the cities showing the greatest improvement in balancing the dual pressures of growing jobs and growing housing supply. Given these shifting trends, it's fitting that the city of Irvine, located in the center of the county, strad- dling coastal, inland, northern, and southern areas of the county, was the city with the highest J cumulative ranking when taking into account both time periods. Irvine's geographical advantage should take nothing away, however, from the city's long-standing commitment to balance job and housing growth. ... The Scores OCBC Workforce Housing Scorecard 2007 OCBC Workforce Housing Scorecard 2007 The Scores .. Orange County Business Council Workforce Housing Scorecard Cumulative 1991-2005 2005-2030' Ii C N:: C F �.,. ,, N C ♦b VF. G 11CQ id C Ra.,A } f—: Irvine 42 1 i 1 18 6 2 Tustin ! 63 16 9 3 3 2 3 23 4 3 Newport Beach 69 9 5 13 .9 21 ; 4 2 6 4 ; Anaheim 74 2 4 24 31 5 2 3 3 5 ! Huntin ton Beach 878 6 15 13 4 7 ' 19 15 ng 6 Orae _—_ _--3-91— 10 25 .16 _ 11 I--6-- -- _8 11 7 Aliso Viejo 93 22 2 2 1 16 1 19 14 17 _ 8 i Placentia_ _— _ _ 97 13 17 19 1—_4— 2510 4 _'- - 5 9 1 Santa Ana 104 3 15 31 1 23 8 -+- 5 1-10 9 10 i Fullerton 108 5 14 27 20 10 8 11 13 11 1 San Clemente 112 12 I 11 12 11 9 1 15 24 18 12 Stanton 1 115 31 25 6 2 30 14 5 2 13 1 Brea 117 19 21 16 18 12 12 12 7 14 1Yorba Linda _ 120 23 16 5 1 25 31 9 1 10 15 I Cypress 129 14 1 23 21 10 6 18 29 8 16 1 Costa Mesa i 132 6 22 30 24 _7_ 11 20 12 17 Westminster 132 15 1 13 10 8 14 1 21 27 24 18 Sanuan Ca istrano 133 25 19 8 M 17 18 16 9 21 19 Garden Grove 134 7 18 26 1 .21 23 j 13 7 19 20 Lake Forest ; 135 10 7 11 ; 5 3 31 34 34 21 LaQun4Niguel______ 137 20 _ 12 4 12 19 ( _22_ 22 26 -- — 22 1 Mission Viejo _ i 137 11— 8 9 14 27 Z3 16 29 -- --- -- - 23 1 Fountain Valley _—': 149 17 1 26 23_ 22 13 I 17 17___ 14 24 Laguna Hills 153 26 20 7 ;_ 7 17 26. _I 28 — 22_ 25 1 La Habra 171 28 24 14 15 22 24 21 23 26 Buena Park 174 18 28 28 1 27 15 20 18 20 27 1 Rancho Santa Margarita 1 178 27 3 1 1 33 26 28 30 30 28 i Dana Point 1 190 21 27 22 1 19 24 27 25 25 29_._ _Laguna Woods — _# 217 30 34 34 34 29 I 25 15 16 30 Villa Park_ —__ 228 32 33 __ 32 30__ 34 x___33 6 28 31 f Seal_Beach --- --- -- 231 33-- 32 _-20 �; 32 - 20 I— 29 - -32--_33 32 Laguna Beach 232 24 1 29 29 1 28 28 1 31 _ 33 La Palma 238 34 ; 30 17 26 32 34 33 32 34 Los Alamitos 238 29 31 33 29 33 30 26 27 Laguna Woods incorporated in 1999. 1990 Housing Units are based on the 2000 data from the California Employment Development Department. City area for calculating Housing Unit Density was derived by University of California, Irvine, using Geographic Informa- tion Systems software and Tiger data files from the United States Census Bureau. ... The Scores OCBC Workforce Housing Scorecard 2007 VII. Workforce Housing Scorecard: Methodology The Workforce Housing Report Card assesses the, contributions made by each Orange County city to- wards workforce housing and, ultimately, the health of the local economy. The foundation of our report was based on past, present, and future housing growth, which we juxtaposed with job and population growth during the same time periods. The key metric that we used to measure these trends was a job -to -housing ratio. Aggregated on a county -wide scale or broken down at the city level, this ratio tells us how many new jobs were created for every new house. We were inspired to use this metric by research from Dr. John Landis, a professor at UC Berkeley, who argues that a ratio of 1.5 jobs per home constituted an acceptable balance for work- force housing. A higher ratio would indicate that there are more jobs per home, which results in greater scarcity of housing for workers. An important qualifier we added to this ratio was that no city could earn a favorable ranking by losing jobs. Where did we get the jobs and housing data? We relied on historical data on housing and employment that were sourced from the California Employment Development Department, California Department of Finance, the Center for Demographic Research at Cal State University, Fullerton, as well as individual cities. Our projections for 2005-2030 were provided by the Center for Demographic Research—Cal State Fullerton, Orange County Projections 2006. After establishing the jobs -to -housing foundation, we sought to ground the report in its proper con- text. While essential, the jobs -to -housing ratio does not adequately explain other important factors affecting workforce housing, such as density, land use, and the regulatory environment. To assess the county's recent and projected trends in density, we incorporated the aforementioned housing figures with city square mileage information taken from the 1990 census and updated for 2005. The updated information was derived by Scott Smith of the University of California, Irvine, who used Geographic In- formation Systems software and Tiger data files from the United States Census Bureau. Why track density? Changes in density reflect a city's ability to accommodate more workers through in- creased multi -family housing developments. This criterion helps us qualify the type of housing built in a period. That is, if two cities build, 100 homes each, the city that creates the greater proportion of multifamily housing compared to single-family housing should come out ahead in this category. Next, we tracked the overall contribution of each city to the county's housing. We did this to account for the greater impact larger cities can have on the county as a whole. A small residential community may boast a superior job -to -housing ratio and increase density, yet still make a negligible contribution to the health of the overall economy. In contrast, the cities of Irvine and Anaheim are projected to cre- ate a substantial share of the county's housing between 2005 and 2030. The same line of reasoning inspired us to create a criterion for total jobs created. As you will recall, our core indicator is job to housing growth. The future prosperity of Orange County will hinge on our abil- ity to promote both, not one at the expense of the other. OCBC Workforce Housing Scorecard 2007 The Scores ...- Orange County Business Council thanks its partners in developing this first-ever Housing Scorecard for Orange County. Corporate underwriting courtesy of: Bankof America 40W�� Community Partners: OmmwuJnniwtwy �nclaW 1 r - ORANGE COUNTY AssooAmm a HtAmms - A Step Abrad Orange County United Way APPENDIX E PRESERVATION ANALYSIS CITY OF TUSTIN TECHNICAL MEMORANDUM HOUSING ELEMENT GAP ANALYSIS - OBLIGATION FOR 230 UNITS OBLIGATON DETERMINED PURSUANT TO GOVERNMENT CODE SECTION 65583.1c Housing Element Obligation for Very Low and Low VL - 1 brm VL - 2 brm Low -1 Low - 2 brm Very Low 128 111 17 Low 102 5 97 TOTAL OBLIGATION 230 * City current has 277 units in the four projects in the Very Low and Low Income categories. Obligation for 230 units. Distribution of AffordableUnitsper Obligation TOTAL VL -1 brm VL - 2 brm Low -1 Low - 2 brm Tustin Gardens 100 100 0 0 0 Rancho Maderas 54 8 6 2 38 Rancho Alisal 60 3 11 3 43 Rancho Tierra 16 0 0 0 16 TOTAL 230 111 17 5 97 Monthly Fair Market Rate Rent' $1,296 $1,546 $1,296 $1,546 Affordable Rent per Month` $807 $901 $980 $1,095 Subsidy Per Month $489 $645 $316 $451 Breakdown of Affordable Units At -Risk from July 2010 to June 2014 (48 months) TOTAL VL -1 brm VL - 2 brm Low -1 Low - 2 brm Tustin Gardens 100 100 0 0 0 TOTAL 100 100 0 0 0 Monthly Fair Market Rate Rent' $1,296 $1,546 $1,296 $1,546 Affordable Rent per Month` $807 $901 $980 $1,095 Subsidy Per Month $489 $645 $316 $451 TOTAL / Month $48,900 $48,900 TOTAL / Annual $586,800 $586,800 $0 $0 $0 TOTAL /Tustin Gardens Subsidy (48 months) $2,347,200 Gross Income from Affordable /annual $968,400 to Investor (see table - Tustin Gardens Bond Financing/Tax Credit) Breakdown of Affordable Units At -Risk from June 2012 to June 2014 (25 months) TOTAL VL -1 brm VL - 2 brm Low -1 Low - 2 brm Rancho Maderas 54 8 6 2 38 Rancho Alisal 60 3 11 3 43 Rancho Tierra 16 0 0 0 16 TOTAL 130 11 17 5 97 Monthly Fair Market Rate Rent' $1,296 $1,546 $1,296 $1,546 Affordable Rent per Month` $807 $901 $980 $1,095 Subsidy Per Month $489 $645 $316 $451 TOTAL/ Month $61,671 $5,379 $10,965 $1,580 $43,747 TOTAL / Annual $740,052 $64,548 $131,580 $18,960 $524,964 TOTAL/Irvine Company Apts Subsidy (25 $1,541,775 TOTAL Housing Element Subsidy $3,888,975 KEY ASSUMPTIONS 1 SOURCE: FY 2009 Proposed Fair Market Rents for Existing Housing, Orange County, Federal Register/Vol. 73, No. 189, page 56646, September 29, 2008 2 Affordable Monthly Rent is 30% of 2009 Income Level divided by 12 months, less Utilities (all Electric, see Utility Allowance Schedule, effective October 1, 2008,published by Orange County Community Services), 2009 Income Limits, published by the California Department of Housing and Community Development - April 2009 COMPARABLE SALES ANALYSIS FOR DETERMINATION OF TAX CREDIT/BOND FINANCING OF TUSTIN GARDENS SALES OF PROPERTIES WITHIN ORANGE COUNTY CONTAINING 100 UNITS OR MORE Avg $ 160,289 Median $ 156,229 Location of Property Sale Date Sale Price Sf Per Psf Yr Bit Units Price Per Unit Acres 1 Santa Ana, 92705 11/12/2007 $74,300,000 334,358 $ 222 1971 406 $ 183,005 12.7 2 Santa Ana, 92706 09/03/2008 $36,000,000 299,386 $ 120 245 $ 146,939 17.58 3 Tustin, 92780 09/19/2008 $21,280,000 126,877 $ 168 117 $ 181,880 8.07 4 Aliso Viejo, 92656 04/28/2009 $75,000,000 442,684 $ 169 1999 484 $ 154,959 18.08 5 RSM, 92688 05/01/2009 $70,000,000 450,992 $ 155 498 $ 140,562 20.16 6 Aliso Viejo, 92656 04/20/2009 $56,250,000 356,296 $ 158 386 $ 145,725 15.46 7 Buena Park, 90621 03/31/2008 $31,600,000 145,816 $ 217 1977 184 $ 171,739 17.58 8 Santa Ana, 92703 08/28/2007 $15,750,000 112,864 $ 140 1988 100 $ 157,500 2.73 Avg $ 160,289 Median $ 156,229 TUSTIN COMMUNITY REDEVELOPMENT AGENCY PRO FORMA ANALYSIS APARTMENT ACQUISITION AND SUBSTANTIAL REHABILITATION TAX CREDIT CALCULATION 4% TAX CREDITS, TAX-EXEMPT BONDS 06/02/2005 TUSTIN GARDENS - 300 units, 100% Affordable, Existing Project Acquisition Assumptions Units Affordable 100 units Acquisition Costs $ 156,229 /unit (median price per unit based on market comparables) attributed to Bldg $ 93,738 60% attributed to Land $ 62,492 40% Cost of Rehab $ 35,000 /unit Tax Credit Eligible $ 128,738 /unit Tax Credit Eligible Building $ 93,738 $ 9,373,760 Rehabilitation * $ 35,000 $ 3,500,000 22% of building costs TOTAL $ 128,738 $ 12,873,760 Tax Credit Rate (June 2009) 3.30% Annual Allowable Credits $424,834 Length of Tax Credit /yrs 10 Market Tax Credit Pricing (Equity Raised Per TC Dollar) $0.75 Federal Tax Credit Equity 99.99% $3,185,937 Financing Acquisition Costs Acquisition Costs (LESS) Equity Amount Financed Term Interest Rate Annual Debt Service Gross Effective Operating Income Debt Service Gap TOTAL RDA SUBSIDY: $ 15,622,934 ($3,185,937) $ 12,436,997 30 5.25% tax exempt rate * Rehabilitation includes: Construction Contractor Overhead Contractor General Conditions Contractor Profit Construction Contingency Local Permits/Fees Architectural Design Survey and Engineering Appraisal Relocation of Tenants Construction Loan Interest Title/Recording/Escrow - Construction Title/Recording/Escrow - Permanent Insurance Property Taxes ($832,246) $968,400 $136,154 $1,362 annual /unit $113 month /unit 48 months 17) ** TCAC Application/Monitoring Fee Legal Syndication Audit/Cost Certification Vacancy Reserve during Rehab Operating Reserve Developer Fee ** if amount is less than zero, no Agency subsidy is required. ATTACHMENT B Planning Commission Resolution No. 4113 RESOLUTION NO. 4113 A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF TUSTIN RECOMMENDING THAT THE CITY COUNCIL APPROVE GENERAL PLAN AMENDMENT (GPA) 09-001, REVISING THE ADOPTED TUSTIN HOUSING ELEMENT. The Planning Commission does hereby resolve as follows: The Planning Commission finds and determines as follows: A. That California Government Code Section 65588 requires each City review as frequently as appropriate and revise its Housing Element as appropriate. B. That the City prepared a Housing Element Update pursuant to Government Code Section 65588 and incorporated comments received on the draft from the State Department of Housing and Community Development ("HCD"). C. That the City utilized the most recent available data in completing the Housing Element Update and that the City has worked diligently with HCD to produce an effective Housing Element. D. That in anticipating completion of the Housing Element Update, the City progressed as follows: May 21, 2008 The Planning Commission conducted a workshop to familiarize the public with the purpose and intent of the Housing Element Update. May 27, 2008 The Planning Commission held a public hearing on the Housing Element Update and the environmental document and recommended that the City Council certify the environmental document and adopt the Housing Element Update as proposed. June 10, 2008 The City sent Draft Housing Element to the State Department of Housing and Community Development (HCD). June 17, 2008 The City Council adopted the environmental documents and the Housing Element Update. June 24, 2008 The City sent adopted Housing Element to HCD as required by State Law. Resolution No. 4113 Page 2 September 19, 2008 HCD provided a comment letter and requested revisions be made to the Housing Element Update. That the City advertised the availability of the Housing Element in English and Spanish in two local newspapers and also made the Housing Element available at City Hall, the City's website, and the Tustin Library. The City also sent a direct mailing to 118 organizations consisting of youth, senior, veterans, disabled, homeless shelters, cultural organizations, housing advocates, religious organizations, housing builders, fair housing council, and individuals interested in the process. E. That a public workshop was held on May 21, 2008, to familiarize the general public with the purpose and intent of the Housing Element Update. F. That a public hearing was duly called, noticed, and held on May 27, 2008, by the Planning Commission to consider and provide further opportunity for the general public to comment on the proposed Housing Element Update. G. That a public hearing was duly called, noticed, and held on June 17, 2008, by the City Council to consider and provide further opportunity for the general public to comment on the proposed Housing Element Update. H. That the City Council considered environmental documentation and adopted the Housing Element Update on June 17, 2008. I. That HCD reviewed the adopted Housing Element Update and recommended revisions and the City prepared revisions to the Housing Element. J. That a public hearing was duly called, noticed, and held on March 24, 2009, by the Planning Commission to consider and provide further opportunity for the general public to comment on the proposed revisions to the Housing Element. K. Pursuant to the California Environmental Quality Act (CEQA) Guidelines Section 15162, the Housing Element and associated revisions were adequately evaluated when the City considered adoption of the Housing Element Update, on June 17, 2008. II. The Planning Commission hereby recommends that the City Council approve an amendment to the General Plan Amendment 09-001 revising the Tustin Housing Element as identified in Exhibit A attached hereto. Resolution No. 4113 Page 3 PASSED AND ADOPTED by the Planning Commission of the City of Tustin, at a regular meeting on the 24th day of March 2009. 1 CHARLES E. PUCKETT Chairperson ELIZABETH A. BINSAC Planning Commission Secretary STATE OF CALIFORNIA ) COUNTY OF ORANGE ) CITY OF TUSTIN ) I, ELIZABETH A. BINSACK, the undersigned, hereby certify that I am the Planning Commission Secretary of the City of Tustin, California; that Resolution No. 4113 was duly passed and adopted at a regular meeting of the Tustin Planning Commission, held on the 24th day of March, 2009. ��� .��� ELIZABETH A. BINSACK Planning Commission Secretary ATTACHMENT C Letter dated September 19, 2008, and June 1, 2009, from the State Department of Housing and Community Development (HCD) 49/19/2000 13:17 9163272643 HPD PAGE 02/11 we, to GAN TA72W � now WNWARIEWOF AND Et1r1' OWN If Of HOUSIM POLACY OwB.Ortl�fr 111enwe"8903mudw P.Qvft� 014 U"177 1 FAX (MO MnO W&VjftoLw is September 19, 2008 Mr. W IWn Huston, City Manager City of Tusdn 900 Cw t rmN way Tustin, CA 92780 Derr Mr. Huston: RE: Review of the CIM of Tusiln'e Adopiod Housing Elsnrnt Thank you fbr tubnrlt8rg City of Tustin's housing sisment adopted on .lune 17, 2000 and mo *AW fbr review on June 26, 2006. The DeparWm t Isrequired to rwisw housing slarrrsnts and noport.the firmligs to fhe loudly pursuant to Govenwrwn; Seatbn SSW"). In addition, pursuant to GovenNewd Code Section (4685(c), qre Depantrnent considered oonnrenb submitted by W. Cesar Comribimi of 17, 2L COMBSMs. udm VVNmm, Senior Player, ibted Mtllenwisw. Ji As dsscxibed In the Dopa InmP's Aupwt 11, 2= IsW, GovsrIllm d Coft Ssdbn sums) requires knoal m1ma b swm* a drag housing slam oonsidsr QN Daimbner6's firedogs prior to adopting the housing ehm% Ai eMment was subndlbd prior to the odmplatlon of the Osprrbrrerrt's nevwtw ass element, Tustin must mwidsr the Departrrrsnt's findings on the adopesi alar corwisisrrt with requtrrnrrerrts pursuantto Gatismment Coda Bead" 635" The Deparbnent commands Tustin fbr Ib aasrrrrriarranrt to address the hinds need of amarpsnatr dw*w and banswonal housing twolgh the dovogmw NAllage of Hope, a 1924ed traneldonel housing faclity. The elan o sddme statutory rsqulrrrnenb; however. revisions will be necessary to oomply, wo efarnent law {Article 10.6 of theOovernnm 1 Code). In particular, the e elemm include an analysis of the adequacy of identified altes to accurrNimbts the n horsing nand for'krwar-kroorns households, and kvkx a programs to mtsW h dsvelopment houo ft affordable to w*om* km4nwmr householde. fhe i Appendix describes these and other revisions needed to comply wRh Siete h elmim" law. of and: Ne ddn ' and F persons In of the . . s many ate housing must FAM 9s/19/299e 13:17 9163272643 FPD PAA 93/11 Mr. WHRIM Hinton, city Manager Pale 2 The Dspwbnent would be happy to arrange a .,mm M eNher Tustln or Saoremento to provide any assistance needed to f+ac:ditais your efbrb to bring the iiMn*M'into ommplianoe. If you have any questions or would INce assistance, please contact Melinda Coy, of our stag, at (916) 445.5307. Skmr*, Enclomue oa Ellzebew Binaedc, Corr�rrsxrily DewloprnarlR DNtictor . Caw Cwwn b * Kernedy Commission 89/19/2889 13:17 9163272643 FPD PAGE 64/11 CITY OF TUSTIN The following changes would bring TusWe has" element Into oomplisna with ArVcM 10.8 of the Governrnsnt Cods. Accompanying each recommended drsnge, wit► oft the supporting sectbn of the Goverrrrro t Cods. For rebrence purposes, the Tustin Tac iMcal Memorandum of the Housing Element Is diad within the appencibc as HTM and the Housing Element Pol" document is rsbmwed as HE. Housing element technical assistance i,fonnalioo Is available on the Dep rtmant's webeft at www,hW.csL=mhW, Rater to the Division of Housing Popoq Devebpmcrd and thc section pertaining ID Sh1a Housing Planning. Amore other rescurces, the Housing Elarnent section E � MM � nic:N assistance idol &�aiNrg► 8loclfri 'br EflrctlVis Nbuedrrp Governmant Code addressing Stsds housing elonant law and olhw rest ur ccs. Review an PIMMu sw Im-It to Ovaesls ere apprvpnlrrdeneaaL eflochommA and progress In frnpNrrrsrrI Nn. and i~ the raulls of d'r!a tevfew In alae tevised slsr mW (Secdon BOW (a) arra (b)). While the elernent provides s description of the City's progress towards msetirrg pat housing els mrd objectives (HTM, page N — 99), It must include an eviWodon of the efwctivsnaN of those programa and provide a description of how the g gale, objsctlws, poNofsc. and programs in the updabd elsnnsnt Inoorpon ds what has been Named flan the nmM of #* previous element. For ocampN, given the ill rwft rr utTihw* hoLOV development in the pravbus planing period, the slernsnt should anralurrile programs 1111101 d to MOM in the develop "and of s vart * of housing types sflbrthnbN to lower. income households and Wien* paNciss and programs that could be nx diked based upon file evel ellon. For further information on the required snalysK refer lei the &Aft 81 aWwd". 1. /nCtow are analysts and doarrnenhdbn ofbhcuaehald d*ncd►srf ftq MW of P""W* to ave to Pay. hM+ft charsclle 111 k e. indudlho oubratowuSrV. and hor/a*mp aitch oorpcftn (SsCOn OM3(&)M). While time ebnm t sstlmatss the number of units In need of rr habilift Ion and/or rspamosrment based on the age of the twft stoat (HTM, papa 33). t should supplement corwA daft with local estinmahs. For example. the element could int hide estimates from s recent windshield survey or sampling, estimates firm the code enf mesment agency, Imt radon khan krwwNdgcabN buildenVdewlop*rs, including mmlirafit housing developers or orgenmroons, or estinrales fbm the redevsbpnrmsnt silenwy. For additional Inlonnallon, neftr to the housing .bat charscle lei scolio, of ere B&Af 1p Sbc Wtednlcal assidenoe tod at aW19/2ee9 13:17 9163272643 FPD PAGE aS/11 .2- 2. h►chxt sn #WWftY of land su ffabts lbrnwk endia/ de- --- - - nf, yrcledlrrp vacant sites and sabre having the poMntlrY Ibrt!edsrebprrrer� and an sno&vb of the Nk iarrs* ofzwft grid putW fbcNN n and serrbu to tf' m a9ea (Sadion OW+3(•)(3))• me vvwdWY of land sunibv fbrmW wdW dinv�rbpmsr:t ahalf be used b lydbrW& efts OW can be davatped lbrhouaft r4ft tyro planrdrrg padbd (Spedon MM. 2). Tustin ha a Regional Housing Need ANoc;ation (RHNA) of 2,381 Moue ft unit, of which 922 units aro for low 4ncoms households. To address th • need, the sisrnwd relles on a combinadon of vacant and non -vacant residentM and aon,rr,snaili sties that allow residential developmenL However, to dernonebals the adequacy of these sites and stMIS in to mci vnodab the City's share of the RHNN the sianw t must include anafyess, as follows: HE Tabic H -1S Nets 370 unit aftidebls to low. end very IowNncom hvtAeholds 90 have been dorhtructed, aroved, or tens pendin ppg entilfeinsn0a. However. the element IMMdoMnwd the afitadeft ofThtees unNs based on actual sales prices, rv% or of nrtatloh on fl Wwkq or cater mtechanWns ectabNs ft a0brdabiNty, Sms Inv ONW.. Should the stern t rely on On within the Tustin Legacy Specific Plan &MM MCAS Tustin) to ac=, N. ft rile regional housing need for mroderanie- and Iowa -income households, It must provide a partici speoilb Ndft of On by number or unique nefte WM, parcel doe zwft, g-rplan dsm.ig mfr, and W*We a calculsdon of the realistic capacity of aaoh Site. SuAmbiliv d ft6M: As the eNArrrt appssni tD rrly prirrlatrfly oc1 rton- vaDirk and undenclitsp,d salt (HE, Table H-14) !D a000m,ntodaie a stgrdlbart portion of the regional housing new, If moat claw" the sxietln9 uses Of Identilled site and Inobb an nnefysls of the extent te whidt those uses may in,pett• sdctitlbnal r ldentlN development. The sternen! should also desalt deMNopmtent trends, rr *a owdillona. and Maas alnd any eodhing a plbrrt�l flnanctlel aaeklanos or tspu" fWW"W wit be pMvWd b encouro a and 1bof ft mon "W dsv9toprrrsnt on ths. ider>tgtad urldenA�ed sites. For fruthsr ap diboike'wsWft at Tustin High As undersiood ftm the convsrsatlon with Cly stag, the Cily has adered int nn alpswrart will the soh©ol dieM io relocels the so"V TWO High School to a naw fid ty *titin the Tustin Lsymy SNe. The exislk,g high school edea would then be available 11or rssldentlel devNoprner,f. Theelement should describe the tknk,g of the telocwiion, ary resonas that would be requked, and assess opportunity and any impediment to derslopnont within the pfarrrt ng period. . 82IM CaoscJM The element does not address this requlrw wtt It must describe the methodology for debrmir to the capadty of sties in the --Xy, The enahyeis mut *** the calculation to account for fsr,d m oonbols and site Irrrprowrrterth, inducting heleht INrdt. psrkkV and could Meet noar* built deraiges. 89/ 1 W 2WB 13:17 9163272643 FPD PAGE 86/11 -3- As many of the sitse idenditd In HE TOM H-15 m zoned for rr bm use in the Old Town Commercial Area or coniewcud sills that allow ruAmtlal, the capacity analysis should aowu nt for paler I nom esidontW uses and could consider any performance stendards mandating a specified portion of a mood -use site as rm. molderdel (i.e., *0 floor, *brut space as commercial) when sstinanttrg the po%ntial r+esidenliml capacity. The element should mho describe Grey existing or proposed regulatory incentives and standards to b ditbe housing development in the mixed- use or aorrnerciel zones. Should the City need to rely an very small she zoned for high drmslty rssldenmi to acooenneodaM s pardon of the remaining regional housing need for lower-inoom households, the ehmw t should Include an evaluation of t w ade juacy and suitebliRy of these ails& to loom mnodats the need. The element must-inchxte an analysts fin11101A sling the development potmindel of smaller sile&, Inc ludhig their capacity to f e talethp developrrnent Of housing for bwer-inoome houshoks. The elamenK could use developtrnent trends in faalfitaM this . This is pardadary Important given to necessary ecoraTbe of scab to f1mdafNM the dsvieloprm t of housing aftordabis fo lowm4noorne howat olds. For example, mostassiEted housing deveNoprft IN Am udk Mate or fedflnandai eral resounds typically include at least 50 to 80 units. Zwkw for • The element Indicates th:et housing aft clobla to Iow—inaxi s houssholde am be a000mnodNMd on sties zoned Medium or High Density Resider" WMh densNNbs allowing up to 8 to 25 dweBhg units per =& The element must include on analysis to demonstrsls how the zor ft encocragri &nd f& aw" the dewbpmsnt of units affordable for b -M -income tmxnsholds. This anelysla should be based on faobrs such as nrwW demand, dm stprrmit eorpparI-ns will* zonas, and speolfically scidress the impacts of density on fkmuw ai %&&ft. For cormuniitim wNh densities that meat specilla standards (at lest 30 units par assns for Tundn), this analysis Is not required (Secdan 8558&2(c)(3XB)). ' The housing ebwo t must dernanp sle, Ow avMWft of Wise, MIN appmprima .that w8 prsxu w surd fled bAl s wwr of housing types. k MWkV supporft housing, singiemm ooaipancy unite (SROs). onerpnoy OwNw% and trar'wMwW h*xbW An adequate analysis should, at a minimum, tdw y wtwther and how zoning c Wkft evo tty allow the uses, analyze whe w zoning. development standards sod permit pmoo&m encourage and fbcMbte these hotwMng type, ff the analysis does not demorwhsIs adequate zoning for thew housing types, the etsment must arohIde map motions to provide appro"m zoning. SROs: The el&ment did not address tMs requirerrnsnt fee requbsd analysis detalled above. EhwMwW ShefJbm The elsment Wastes emergency shellets suis prrrtitted by - right in Pknnft Area 3 of The MCAS Tustin SpecMc Plan. Pursuant to Chapter 833, S d 2007 (SB 2), the elerment mustdoncift am sudkfent oVportunNM within this pim wft arae to aocon>rreodats the Nottfited need In the planning period. in 89/19/2806 13:17 9163272643 FPD PAGE 97/11 -4- additlorh, the element must dentorataole dart poMdt PrvoysMg, cswlopment, and 11 MonaperrteM standw* enoourags and f8 dNbNe the development of, or Mwemion to, -wow my st1 lab s. 80 2 � sMt'In addressing this stakAwy ret uinameK rv* b o . at mg Transllbrral and Stgxw ve Housbq. Tits Dgxvb wg comnhends Tustln's oontlnuhg aorrwnilrrherht ib provide opporh Ibn for the drwlopnw t of traraltlonal housing wkhin tine MCAS Tustin Spadlic Plan: However, aadcnaMedpr�d h the element (�. Pop 55)1 n must dem mbt le tnmshlonal and supporfive Itansirhg are treated as a rw identlel ueep subject any in those restrictions that appy t3 other residential ossa dVw same type h the ssme zona. For example, R the bsnsidonal housft M a muffirsi y use pnopon In a multilfsfntiy zone, ttan >ovrhirg and pw"p should treat tmnsitlonal housing the same ss otter fMjI * Lose proposed In the zone. 3. An&a=s ctorhtW and aWuW Qwvrrrenarrosl aortsbalrata UPM fly nHMraAsnarx.xk -prp►ouimanR and rt'of houatrp liar M wrwM bvrk hporig Land use corth* builft wd u and doY Ato hayorovenas►rati; AW and oew waotow nrgr*w ofdovok para, end kwWpmagaft and prvW'--1p The ano&vksow aft*dsrnornatrsh Foca/ aftdr to rwttorri gum.v conetrai* friat h#M*r ft bceMy f m nwo IV its sheat of ft nrtp b"M hmffi p row in aoaoro► vm wwo soww t Qd4 (Sodbn QSlid9(s)(!J)). LMnd4jw„ .• Ghlon lirniled developrnsnt of multNbmify n u tal howlnp M the PSA P� Pte. •ht stwuld evalwN Tuetln'e de,neloprraent elarhdards 1bt thafr trrpad on the soppy orad �dbadub t of muitll h* housing. For exanhple, the eisrrrerM should waivabrl tl1a owrruMdrrg sAbOt d dwaio�ttent sisrhdsrde ores on tits ablilly to achisw maximum' P requi�tMnb.;end mirtirnurn floor psrrrhitled dirriMeM. Furthemme. shoe the element swum In r* on sits fdsntflled oonhrrrsrcW zonae slM residen1W use am* as Old Town, the elsment should ldon ft and at*= multlh rrgy p doockp iod standards in these zones. P PMOM M for a M”l rajeot q*ftotlon RM pop 61). Hm win, K ttorougW desorbe and snayze all permit procowN end spprovd proosdurpe by zona and housing too mind revel of dfso m onary aotlob. The snopels must ownin orM6nla, such ss approvM fi 10" by PsM*tAw -br rrs�kNmtW uses, pantiex�larll► mullihR*. In addifbn, gives tits N imilho ofwing b flat rr,�■m�y heft piers P period, tits Mulmtt should wMtfX fhe for a conditional we psm* (CUP) for multifamily houehg over 20 • ret wifhin� 1 So feet of a sin b4lmrnfly zonas and Indkwbs K this rrqufren w t would kv":i poWdW capscly of the shoo ldendlled within the invanlory. Tits alernent mustanag n lens CUP rsWk m. mint for mrdtlA i* development ae a constraint and OVAJ identify findings of approval for the CUP and ww" their polNhtlal hhpact on approv d owuk*, timing, sad oost. Plssse hes the sample analysls in ft Bu*ft Bbdm'tlmhnkod aaiotance tool at i ftjAvww.hod.cs.ouvft ditwuwho wimm voir-nu nm. whw a9/19/291e 13:17 9163272643 FPD PAGE 96/11 -a- The elernant slates That projects that require dNcretio- - appm els are also subject to destpn review approval ", pegs 61). The element should Mchids an analysis of themip dan mvlsw prooses, desanbe the spscft d----nrent standards and any rimig Dods enodapproval certaintl. � � of ft guidsNrnes and E rouses on housing F and While the oWneM summarizes the total typ cal fives and axecdons on a typical sk is lamNy dovebIW (HTM, logs 50). It should also idaMMy and evsluals the cumulative Impact of tea on =00rnfly am the sample analy* at httD://wwmhcdAm aovfindAwculnat_Nemsnt=011 fsea,Dho. • The eNrnsM did not adores this statutory requirement. The ek msnt must include a detailed wm*pb of zoning, development sdndards and approval procedure for ttnodevelopment of horsing 1br persons with disabNtlss. The element should Inckmb program to address any idsntilled.constraNtts. For eocarnpM, arnprg other thirpr, the simem should identify enc analyze: (1) any datNldlOrns off nfil in the xw** cods: (2) whsllm the boeRy liar an eObNdred redsorneblr a000rrnnrodetlon procedure: (3) nwdrrwrn oorroeritndkin requbnsm ils, fbr reeid-r4i tdrg tam; (4) any sIM pbm tns roquinenisrtts that may c onsham housfnp ffor para" vfh dlsa A*w and (5) dry parking requWaMWft for 10UMV for psmons with dt+isbilltiii. Refer to the BuM*V BlooW section on Cc sh lift for Persons with Dieabils at s)il�lil� and the Depai 1. Cs SB 520 msrno and analysis fool to ssslat in aftvair 11his statutory iegtnirermim 3. Arm&= mdj Wq, aa/alsd h0udV drveWN 006 Mat ON atOft 17 ~ to n00- bw4mme houskW use duriFp rtes menet 10years dors b trwnntrra b7 olwtald)r corgi mot Pr+WYnwg oravesu "ofuar rammo ra (SecrQlorrs 6lf,7ws)(8) ffucuo esse.3(a1l�1�11• While. the sternent a a4m the potential risk of oonvwWm of the Tustin Garden (HIU peps 41), ilia analysis. should be updabsd to incUrde sn'rive of risk for the 177 unite wnartiy owned by the Wine Company with cowers on claims within the OWN" Perm. The Nernerrt bb (HE. pegs 71-79) Aftclable Houeft Remnm that have bean or are ounrr* Rmdkd by fhe 'DopartrnsnL However, several of theos progrsntlm no longer have avaeble fimft. Wtfh ft passage of Proposilian 1 C. 'new funds rove been made avail bis b assist in the dsysbprrrort of howkng. For your rallom ce, the Deparbimd has enclosed a copy of the HCD's Lean seed Pi'roporarn Dksofory clssortbkng these proprams. ; . WIW2e96 13:17 9163272643 FPD PACE 99/11 C. Pro mems 1. IndLdo a Program whJch seta kvM a &S -year sdwdu* cf sod" No I bcal gowrnmW* 'IN WMW tft or kOn* to undWhft to knpbment the pomcee anti M**vo the pm* and obA"%w of titn ffousktp Siam" ftougah the edmktisbcktWxf use and drv�elo�p+nent co *Dk protrmn OfrgF wY ww$# w orad kaa>! *vve, and are utlfYsstkon Of SPProprlate !beano/ and Stade OWWfitp and arabsldypmprarns when avaifa k The program shall kwA de an ddlirrdlllcatfbn df (he aaaidu and otffblab rea�porrs�N for the irrrplfrrnnntatbn of" varaua wftm (Sod= E www. To flatly address the pr+ograrn requfrw,mits of Govemntartt Code &dlon O&wAWcx14), and In order for the Cry's propose houafn0 dewbp "It and 4=kbrw draboisa to be d bcft durkV the planning period, programs and comesponding actions should dsnwrtabab ffte Cky's cornn*nwd too Impiarnertlong t. r -ft m G programs should Molude; (1) a descripbon of dte Citys spsglop role In Intplsntentagorr (2) --rave l r - implemaraaMlon tinrtaMrtas; and (3) iderrtNbartlort d nsaponslble ngem*m and oAk*ms. Progrsnw to be mvhsd and sbwgftmW kwkrtle, but we not ftf &d do fJw 1bNoolkV: PmOrOM 1.11 tTemoorary Houslm for Homeless): beso foe the skips Tustin will Onplernede the a�sd qusnbllad ob)scdves fbr housing and sa�rvices bassist hornalses Ptooraet L18 lawdor Cm= U-1110111, Ciartfjl tine fi Smn for Idartll#V sibs for houalsirfM projsots, and how this Ihting of ails will be pna vbt While Me elernertt .M. M e No number of senior housing unit b be pressived, It shaald spocNbsiy Ts ths, mcpaclsd number of now undts developed though the sc coeasfial impl m wdav rt of 8tls program. PMM 4A Model Aselsta MI' Describe Me City's role In anoourSOV the availability of Seddon 8 ntvtt■I saistanos arlNloabs and vouchem Daacrb how the Cir will promote DO tinra� ny of 91600 programa send thek use. 2 A*ndt►y admWatt AT" which wN be maths eva8abb stun gh appmp*b zonkp end abHNbprnent atandmrds and wqh public awvtona orad flsai l sa nsa�ded to tisat lr and enaowup tf a devrltoprranrat oaf • ver! W of Epee of houafhp #br are dnoome kwok MMW �if nosy and an�rpsncy &%ftm subdMlaron (a), done not J�d�irrdh►y ed@qusft &leas to as col.,adate to t, need forgmupa of aft housahaid kaoams levels pwauant to Seodbn Q6Q8� fmprvgnm, sobs/ prnvkb for suff dwg Alm w8h zm ft that pwo and menial Ir &4 am* lvs d&.MW uar by JW itdludrrp aesr„dy ana►a.rb,Anaarr smradertf, anon oorlfcl adds aa►ad (mtlbM �n o ofhouft for very to w send knwkwm how slaakfls As noted In ffndfrg B2, the element dose not Inckide a complete safe analysis and therofbre, the adequacy of oft* and zonkty were not esimbft4ved. 11"W on lite resufta of a oomplob ofte lnvw Wy and armysis, the City may need to add or *Orgdm houakg prograrne to address a WwrftN d sura or zoning availabis b enaotnep a variety d 89/19/2919 13:17 9163272643 FPD PAGE 19/11 .7 - For your information, when the Inventory doss not Men* aclopme suss pursuant to Gcvemnw t Code Sections 65583(ax3) ON 66583.2. the element must provWs s program b identity► sills In accordance with subdivision (h) of 05583.2 for 100 pwwd of the mnoirning loaner -income houskV need with sites zoned to pe -mit owner-ocoWisd and rental multifaniy uses by-rpht during the planning period. Three sites *wN be MW wilh minln um densky anddewa""' t standards that permit at West 16 unlb par sits at s density of at least 20 units per acre. Also, at Nast 50 F anent of the remaining need must be plenned on An that exd ushrely ellow res.dendol uses. Given that many of the sitoe located In the akss hvenbny ars consijered %—f opportunilh1 , the element should describe how the program worlont bo encourepe lot corwolidNw. For example, the program should desor6s any efbn s b rnodky developrrwrd standards to increase denaity or eft to strermltne bt consagdatlon regLoft. 3. ProelcN hlbrmsibrr orn ale redlsrsrgprrrerrt apsrioy's rote tithe Gtr eAbrt tb erroorsage lh.111110111wmil,of a vel► of hou&I7g types 1 br as trroane fuses (Snow OWN(c)). Whit the element in AWss an esdrrn-to of the monies expected to some to the Low and Moderato Income Fund through the end of the planning perbd ME, paps 67), it should also descxlbs the planned use of these finds. For your kft ratan Corununky RedeMslopnent Caw (H"Mh and Safety Code Section 33334.4) requires aperroies, over eadn 10•ysar period of the Implamerrtadw plan, b ensure housing useistp wo is -1 -001- provided Is very IOw6 and lowrin ww Comnunky Ftedewbprnarrt taw (HepMh and Satiety Code Section 33334.4) mow egs ci , cwr urach 1j�y period of the imps n- niatlon plan, to erieure housing assistance Is MOMMMIMhr onavidad to wry low- and low-income households (based on the pmpordon eaoh group represents of the community's tgbl howft: need fbr lower- and rtodera Is., W -T a persons) and also to person,! under the spa of 85 years (based an the proportion -:hb population group rrprssents of the tWel popukdon apo id *= the curwnt census). M addkk*% Seabn 33413(bx4) raquines a ndwelaprsrrt ir'rrpldmsr4albn pbn :o be cc wislsnt with a community's housing element. The inntspra110n Of applhrabie hrkxmalkM from the redewbprnent agency's otrrernt housing impNrnsrmtatbn plan irrio tte housing Worm, w8 assist In the devslopmernt of an oftc Ne housing element 4. 771 h oft 1/Nfw* BW conhrfn prapram rah iooh 'amaW iR tore dmekpmwit o/ housiV b /ricer del insets of mlrbw7w& low-, Axv- and Ro*Ia'!s4l ownp Mwia oAde (SNOW OWWC)(2))., While theelement includes some programs to assist the development of wry lows, low., and moderate -mown households, programs should be expanded a, added pursuant to Chapter M, SMtutes of2006 (AB 2634), to Wedlically asset in the development of a variety of housing types to meet the housing nseds of ext'amaly bars jORRIM . Furthernore, given the reed for housing afbrdable to Imerbrimne households, the kick of muitr'farnlly rental housing built In the prior phiraM penia4 and overpayment among rerdw households, the City should modify or ac d programs to rno spaxftelly ouraps and IscWtate ale types of nwW mily rental housing. .19/19/2019 13:17 9163272643 FPD PAGE 11/11 . I- - S. TM hOu*V O*W9 shah =06 PrOprance wfekh 'ad higg &W Pftm WIWWO NW kpalj► posofbb, iwwve WOVenBmerof c to d re moksmarm, ,►nprvve�merM, and develbpmenf of hoL;mW (Section (Q)(3))• As noted in finding 83, the e*nw t requNss a oompk be amia"W of pobemitisi gowmmentol constraints. Depending upon the muib of that ansh sis, the City may need to *w4dwn add Programs and address and mn m or mRtgats any klsnWW corlsvokft Program 1.9 Includes a comiimi mnt to anshrzs City prooseses amid zoning code for corwWft to housing for par m with dieabOn. AM "h a perkdlc review of Cly Pim may be appmpriste, this analysis mut be done as part cf the current houskV sitrnent. Depending on this analysis this pmpram may nod to be sbongdood to address any W*ntilied oonsom nb. Program 1.21 should bs uPdated to do* which zoning sbmMa and zoning brdbu os need oompWm and 106001 the cwrw t GUM of the shidies which ars In process such ss the'Town Cartes new Beglnnk I study. Loch powmm0oft &W maker a to sahbw pub* par"Mom of aN soonomic sepmarrb of Ow eon mut* in the drNMoprmerrt Of ft houatnp oh meng and dre .Mrnane ahal drecrtb�r Ghle aAbrt (Sediar QdQdJlc)(711• . White the element provides a detailed MV of organ dbm and IndlWdumb -1 a We repwft workshops for the haaing element updit it should 00 dasexbe aft to make the draft available for review and if m be how ooml n , racehre d as port of the PLdft PsdkO@dm PrOCOMS were kworporated Irbo the housing eMnmon TL*m should oon*wo to A ' Sage the oomimr*y, kwAudkV the peruse oomm m" ail the elertierrt, through ern► wilalwo and subsequent wkpgon of those nvi*m b do houWj element. Padloukeriy. Me Cly should nWoe apWINO efrb b t© erroourege parl *odon end drrxulefe the ohmsnt among rnk* bt Including bm6 and nrodenate-income haueeholde, 06/01/2009 11:26 9163272643 FPD PAGE 02/05 ew ww n■ CA Ien HOUSING A[3RNCY ARNICkgmgmw DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT DIVISION OF HOUSING POLICY DEVELOPMENT 1 s00 Thkd 8"0, Supe 430 P. O. Box 952063 Sacnmanto, CA 94252.2053 (915) 323-31771 FAX (916) 327-2043 www.hcd.ca.9w June 1, 2009 Ms. Elizabeth A. 8insack Community Development Director City of Tustin - - 300 Centennial Way Tustin, CA 92780 Dear Ms. Binsack: RE: Review of City of Tustin's Revised Draft Housing Element Thank you for submitting City of Tustin's revised draft housing element received for review on April 2, 2009 and revisions on May 19, 22, 28, 2009. The Department is required to review draft housing elements and report the findings to the locality pursuant to Government Code Section 85585(b). Telephone conversations with ,tou and Ms. Justina Willkom, of your staff, facilitated the review. The adopted element addresses most of the statutory requirements described in the Department's September 19, 2008 review, however, the following revisions remain necessary to comply with State housing element law (Article 10.6 of the Government Code): 1. Include an Inventory of land suitable for residential development, Including vacant sites and sites having the potential for redevelopment, and an analy. Us of the miationship of zoning and public facilities and services to these sites (Section 65583(a)(3)). The Inventory of land suitable lbr residential development shall be used to identify sites that can be developed for housing within the planning period (Section 65583.2). Adequate Sites Altema0ma: To address Tustin's regional housing need for lower- income households, the revised element includes a commitment to preserve 128 very low- and 102 low-income housing units within four multifamily projects at -risk of converting to market -rate. To facilitate the preservation of these unes, the City has proposed to commit $2,181,672 in redevelopment funds. While the Department commends the City on its commitment to preservation, to credit these units toward Tustin's share of the regional housing need, the element must address all the specific requirements outlined in Government Code Section 65583.1(c). For example, the element must demonstrate the fund amount provided through the committed assistance will be sufficient to maintain affordability of the at -risk uni-e and specify the date of the public hearing which found the Rancho Tierra, Rancho N aderas, Rancho Alisal, and Tustin Gardens Apartments to be at -risk and rea aonably expected to convert to market -rate during the next five years. 06/.01/2009 11:26 9163272643 HPD PAGE 03/05 Ms. Elizabeth A. Binsack Page 2 To demonstrate sufficient funds will be made available, the element should estimate the total amount of funds needed to preserve the units in each project and demonstrate such funds will be available including, If necessary, ap f lying for or assisting in applications for funding. For example, the jurisdiction could include a performa or other estimate demonstrating: the amounts and proposal sources of funds that will be used to preserve and maintain the affordability of the units over the 40 -year period. The performa or other estimate should be based on assumptions and standards commonly used in the affordable housing finance industry, Program 4.6 must be revised pursuant to Government Code Section 65583.1(c) to demonstrate sufficient funds will be available through a legally enforceable agreement to preserve these units by July 1, 2010. The program should identify a sponsor to preserve'the units (i.e., a non-profit developer, current owner, etc.), provide a date for acquiring needed funding, and include monitoring component consistent with Government Code Section 65583.1(c)(7). Please seethe enclosed :;ample program for assistance in addressing this requirement. Emercongy„Shelters: Pursuant to Chapter 633, Statutes of 2007 (SE -1 2), local jurisdictions must identify a zone(s) where emergency shelters are p,3rmitted with sufficient capacity to accommodate at least one year-round emergency shelter without a conditional use permit (CUP) or other discretionary action. If existing shelters have sufficient capacity to accommodate the jurisdiction's homeless need, pursuant to Government Code Section 65583(a)(4)(C), the element may comply with the zoning requirements of subparagraph (A) by identifying a zone(s; where new emergency shelters are allowed with a CUP. To comply with the provisions of SB 2, the revised element relles on the capacity within the existing Village of Hope facility to demonstrate the City is currently meeting the shelter needs of the homeless population. The element now includes Information regarding emergency shelter opportunkfes at the Village of Hope campus and indicates the shelter has vacancies :hroughout the year (page 48). However, to demonstrate existing shelters can accommodate the year-round need, the methodology should document available beds, typical vacancies, and account for seasonable fluctuations in the amount of available beds. To assist with this analysis, the element could include information from the Village of Hope facility documenting emergency shelter availability (vacancies) throughout the year and comparing it to the City's unsheltered need. In addition, as no remaining capacity remains in Planning Areas 1 and 3 of the MCAS Tustin Spe Ac Plan to accommodate new emergency shelters, the element must identify a :one(s) to either include a program to identify a zone(s) where emergency shelters ani permitted without a CUP or other discretionary action or with a CUP, depending on the results of the analysis. 06/01/2009 11:26 9163272643 HPD PAGE 04/05 Ms. Elizabeth A. Binsack Page 3 SuR2grtive and Transilg0al Housing: The element now states supF ortive housing and transitional housing are treated as a residential use, pursuant to SB 2 (page 46). However, it remains unclear whether these housing types are treated as a residential use for all residential zones or if they are only allowed in the Plannir g Areas 1 and 3 of the MCAS Tustin Specific Plan. 2. Identify adequate sites which will be made available through appropriate zoning and development standards and with public services and facilities needed to facilitate and encourage the development of a variety of types of housing for all Ir, comb levels, Including rental housing, factory-built"housing, mobllehomes, ander-iergency shelters and transitional housing (Section 65583(c)(1)j. Proaram 1.21: To accommodate additional multifamily residential d Bvelopment, the element states approximately 4.2 acres of the Sixth and "B" Street cpportunity site will be zoned for high density residential (page 84). However, Program 1.21, which commits to the zone changes needed to implement the Town Center Plan, does not reference the rezoning of this site to commercial. Should the element rely on this site to accommodate a portion of the housing need for lower-income households, a program must be included to rezone the site, permitting owner-occu 3ied and rental multifamily uses by -right during the planning period. These sites mist be zoned with minimum density and development standards that permit at least 16 units per'site at a density of at least 20 units per acre. Please be aware at least 50 pe went of the remaining need for lower-income households must be planned on sites that exclusively allow residential uses. Once the element has been revised to address these requirements, it v ill be in compliance with State housing element law. The Department appreciai es the cooperation and assistance provided by Ms. Willkom throughout the co ime of the review and is committed to assist the City in addressing the statutory requirements of housing element law. For any questions or additional assistance, please contact Melinda Coy, of our staff, at (916) 445-5307. Sincerely, Cathy EIr well Deputy Director 56401/2009 11:26 9163272643 HPD PAGE 05/05 Sample Program: Adequate Sites Alternative The City has identified 277 eligible multifamily units at -risk of conver3ion to market rate within the planning period (see page ). In accordance with Goremment Code 65583.1(c), the City will provide committed assistance as the term is defined in the statute in the form of sufficient fund to preserve at least 128 very low and 102 low housing units. The City will solicit requests for proposal for the preservation of thes3 units by November 2009 and enter into a legally enforceable agreement no later than July 1, 2010. As detailed on page_, the City has committed $2,181,672 in redevelopment funds towards preserving these units. The City will work with the selected developer to acquire the remaining funds needed to preserve the units by July 1, 2010 (spm analysis on page �). Mechanisms for continued affordability will be in place no laser than July 1, 2012, for a term of no less than 40 years. The City will report on its progress in preserving these units through the annual progress report required pursuant -to Government Code 65400. Should the City not enter into a legally enforceable agreement by July 1, 2011, the City will amend tie housing element within a one-year timeframe, to identify additional sites to accommodate the 230 units. ATTACHMENT D Approval Letter from HCD dated June 10, 2009 06/10/2009 09:29 9163272643 HPD PAGE 02/02 3TAATE�AF CAtIEORNIA AlISIN S TRANSPORTAMON ANO HQ1 1CIN 2A - AbjQY � __ AR XD S HW RZEN rnor DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT DIVISION OF HOUSING POLICY DEVELOPMENT 1800 Thud Street, Suite 430 P. 0. Bou 952053 Sacramento, CA 94252.2053 (91 d) 323.31771 FAX (916) 327-2643 www,hod.ca.gov June 10, 2009 Ms, Elizabeth A. Binsack Community Development Director City of Tustin 300 Centennial Way Tustin, CA 92780 Dear Ms. Binsack: RE: Review of the City of Tustin's Revised Draft Housing Element Thank you for submitting draft revisions to the City of Tustin's adopted Housing element received for review on June 4, 8, 9, and 10, 2009. The Department is roxquired to review draft housing elements and report the findings to the locality pursuant tv Government Code Section 65585(b). The revisions address the statutory requirements described in the peps rtment's June 1, 2009 review. For example, the element now demonstrates adequate sites to accommodate the City's regional housing need and includes a completo analysis of zoning provisions for emergency shelters, and transitional and supportive housing. As a result, the element will comply with State housing element law (Article 10.6 of the Government Code) when the draft revisions are adopted and submitted to the Department, pursuant to Government Code Section 65585(g). Please note, pursuant to Govemment Code 65583.1(c)(7), the City mutit report on the progress in implementation of Program 4.6 (Preservation of Assisted Housing) through the annual progress report required pursuant to Government Code 65400. Should the City not enter into a legally enforceable agreement to preserve units affords ale to lower- income owerincome household at the Tustin Gardens, Rancho Alisal, Rancho Maderas, and Rancho Tierra apartments by July 1, 2011, the City must amend the housing element within a one- year timeframe to identify additional sites to accommodate any shortfall, The Department appreciates the City's efforts to address its housing and community development needs and the hard work and cooperation of Ms. Justina 1'Villkom, of your staff, during the course of this review. We look forward to receiving Tw tin's adopted housing element. If you have any additional questions, please contact Aelinda Coy, of our staff, at (916) 445-5307. Sincerely, Cathy Erreswmall Deputy Director ATTACHMENT E Letters Received September 15, 2008 Ms. Justin Willkom, Senior Planner City of Tustin Community Development Department 300 Centennial Way Tustin, CA 92780 RE: City of Tustin's 2006-2014 Draft Housing Element Deet Ms. Willkon, www.kennedymmmi sion.org 17701 Cowan Ave.. Suite 200 Irvine. CA 92514 949 250 0909 fax 949 263 0647 The Kennedy Commission is a broad based coalition of coy advocates focused on building a supportive environment for the creation of housing opportunities for families in Orange County earning less than $20,000 anmully. Thank you for the opportunity to allow us to comment on the City of Tustin Housing Element. We have reviewed the draft element and submit this letter to provide public comments. Our comments and recommendations foss on the following areas: Cfdm Parddmdm State housing element law requires that coda allow for public participation and comment opportunities in the creation and evaluations of the juriadiction's housing element. California Government Code Section 65583 (ax6)(b), requires that jurisdictions "... shall make a di'ligemt effort to achieve participation of all economic segmanb in the croaamunitf in the housing element process. This requirement presents an opportunity for the City to engage constituents and stakehoklers in a dialope — defining problems and dfadmg sobtkm The inclusion of oomeamity atakeholdea in the housing element labs participation process helps enm'e appropriate housing strategies aro more efficiently and effectively evaluated. The City held one community worbhop and two public hearings in which the Kennedy Commission commented on the importance of public participation at all stages of the development of the element, especially in analyzing barrios and crating policies to promote housing opportunities for fimilies at all income segments. The City should extend the public paticipation in the draft revisions and public hearings to achieve the participation of bwa income households and comrmurity members. In addition, the City should incorporate the comments and suggestions of bwa income f>tmilm into the draft element. According to the Sam nuey of Housing Needs in the 2006-2014 Draft Hoaxing Element, the City of Tustin's demographic oomgposition and housing market conditions demonstrate a growing need for affordable housing especially for lower income ranter households. Over the pest year, the weighted average rental rate in the City increased by 5.4 % (p. IS). Table HTM 12 shows 86% of overpaying renter households won adrenely low, very low and low-income households. Table HTM-8 shows 72% of overcrowded mater households were also extranely low, very low and low-income households. With lower wags, high housing costs and lack of affordable homes, it is clear that lower income households have a difficult time without overpaying and finding an affordable home of adequate sin. Production in the City in not meeting the housing needs ofthese low-income fiamilies. The City should make housing for those income segments by developing housing policies � Smding priorities to encourage and be itate multi-fsunily afbrdable housing P Pad IOW2W The City's progress on their pact Housing Element demonstrates that the City's policies and goals failsd to produce balanced housing developments to meat the housing needs of all e000mic segments, specifically the lower income households. The City's RHNA alloation in the 2000-2008 planning period was 3,298 bomes; however, the City's past peiannaoce analysis fiom 1998-2005 also includes developments that will count towards the cur. planning period of 2006-2014. The 1998-2008 past porbmmance reveals that while the developments of moderate and above modmate income homes were produced in excess of the albcdW need, the development of very low and bw-income homes fell short (Table HTM 35). The City approved 3,625 moderate and above moderate homes and only 664 homers at very low and low-income households (RHNA needs for very low and low was 1,183). When comparing the City's 1998-2008 peat permusuce (Table HTM 3S) with the City's currant pwpm toward the 2006-2014 RHNA construction needs (Table H 13), the majority of very low new construction homes wets built in 2006-2007 on the rase of the Tustin Marine baso Also, while the City takes credit for lower income now construction homes, it is not clear if tinge developments were deed restricted. Since 2000, the City has largely focused on homeownerahip moderate and above moderate devebpmeta. As the number of single -family homes steadily increased, the developments of multiSmily boom have decreased (page HTM 32). The City's progranne, implementation plans and housing fonds spending show that the City has a strong prdm once in favor of homeownership assistance at the moderate income category (page 901 assisting lower income needs through rehabilitation (page 74, 91, 93), and the development of senior homes (page 80). Similar programs and policies should be implemented to encourage and farm'tate affordable homes fbr working families in the Iowa income categories, In pWdcuLr, we K would suggest that the City encourage and facilitate the production of new construction multi -family af%rdable home developments that would kaease the opportunity for the City to overage their resources with tax credits, P op.l C and other housing funds. These types of developments and leveraging would allow for the development of homes at the lower income segments. In addition, policies and incentive should be Amnulated to assist in the development of these lower income homes. Larne Hosedwida TustWs lower income renters are more impacted by high housing costs and overcrowding. Spocifically, large households often hoe ovacxowdmg and cost burden issues because of their size and income constraints. Overcrowding mainly stems tom the lack of Imp rental homes in the bousmg stock and large ranter-bouseholds being unable to of lord bW ownership homes. While there were 2,189 router -occupied large households in the City (Table HTM-14), there were only 272 3 -bedroom rental homes available in the City (Table HTM-24). Affordable net rout for lower income households are $890 to $1,166 (Table HTM-25); however, the average rental rate in the City nmges flvm $1,138 to $2,431 (Table HTM- 24). Based on this data, the rental nate for two .or more bedrooms homes are beyond the reach of the City's lower income households. Lower income households consisting of three or more persons would have a difficult time finding, affordable bowing of adequate sizes Thus, the cost burden on lower income large families can require than to douW-up resulting a overcrowding and other rested problems. Policy 1.14 encourages the availability of afTiordable housing for special needs households, inchx ft larl^ low income 5milies (page SS). When considering large households, the drat shoukk 1) address the needs and barriers for large families and, 2) credo specific goad, policies, program and sites to a ncouroge and facilitate new construction of large family developments. Forsalas MM When oonsideciOg persons with disabilities, the drat should examine zoning and code that may impede bowing, fbr this population. The City should also analyze the need and the number of homes available in the City's honsiag stock for this pardmlw need. Universal design standards should be studied and encouraged. Furthermore, the drat should analyze and create specific ®cad, policies, programs and sites to eneouragp and facilitate the construction of homes for this population. Acaordiog to SD 7, local jurisdictions mast quantify their homeless population need and xlwt* silos allowed by -right for emergency shellacs to meet the need. The drab referouees a 2007 Orange County Partnership sample survey in which "34 homeless prions identified Tustin ss the city of last known permanent address." The drat also state that the McKinney -Veto Homeless Education Assistance Act reported "SS homeless children were enrollee) in the Tustin Unified School District dining 2006-07" (page 37). It should be noted that the 2007 OC Partners* survey was a sampling of Orange County cities that was used to create a Point in Time Sunray for Orange County's homeless count projections. The individual city sample does not transhtte to a total count in need The City also conducted an anabmis ofthe homeless needs pursuant to SH 2 by using the City of Tustin's Police Department estimates of "10-12 homeless persons residing in the City at any given time (page 19); however, a visible estimate Som the City ofTustin's Police Department is not representative of a connnunity's bomdessness needs because there are "leas visible" individuals and fimnilies living in motels and doubling up with family and friends. Therefore, we encourage the City to identify and analyze its need considering a more comprehensive sampling. We would encourage the City's analysis to consider: 1) A survey of local homeless providers and shaken to account ibr clients saved and those turned away due to capacity. 2) Review of homebsaneas data and funding needs compiled by local gDM (City and County), the City's Consolidated Plea. homeless shelter provides, Orange County PwWaship (additional dotal Continuum of Cared CWS reports and local homelessness partners. 3) Comida that the homeless population may extend to individual@ that aro living in temporary housing, anon a shelters, armories, garages. temporarily living with Stimds mrd family and motels. A comprehensive review is crucial to assess the City's true homelessness needs and solutions to provide housing options to this very vulnerable population. The City has demonstrated leadership in addressing transitional housing homeless needs by facilitating the devebpmant of Village of Hope. a 192-bed transitional home at the former Tustin bas: The drat states that enagawy shelters are allowed in Plaming Area 3 of the MCAS Tustin Specific Plan (page 38). The City should identify specific sites and other zoning that will fficilitate the development of emergency shelters. We look forwud to working with the City to develop and implement policies that will facilitate the developmmnt of emergency shelters. When considering emergency shakers, the City should also consider the location to provide suitable and available sites 1br the provision of emergency shelters. We would encourage the City to consider accessibility to mw transportation and proximity to the transitional services fur the homeless population in determining the Vpropristaness of tha sites. Fxbvnwk In accordance with reoaify matted lqgislatio% the element must identify and analyze the existing and projected need for ectremrely bw-income households. This gwntificstion must be scoomp mW by a description of bou ft needs to formulate appropriate policies and programs. The draft needs to follow statutory guidelines to identify the need fbr extremely low incom bousehoMda The elemed Seib to pins for specific policies and programs to assist and fimilitste the development of afiiordeble homes to extremely low- income families. 4 GovexnasuW Casstrainh California Government Code Section 65583(a) requires that local ordinances and policies be rwouni ted to ddermine whether, under wcrent condi#ion', they are accomplishing their intended purpose or in practice constitute a barrier to the maintenance, improvement or development of housing for all income levels. The City of Tustin should cacamine its zoning code and evaluate if present zoning and policies li ve a negative impact on af%rdable moults-Emily developments for the lower income segments. In particular, the City should analyze and describe how the City will encourage and support the development of multi-6mily %r the lower income categorie when its highest density for this zoning, High Dusky Residential, is 25 homes to the acre (pop HTM 32). This is particularly imported in infill development opportunities in the City of Tustin. The trend in infill opportunities in the an and corridors of the City is to have lower density, infill homeownership (cuanples include the Sun Cal p nposels to demolish =oft multi-5mi1y developments to build to" homes and others that have downsized zoning and housing stocky The City should etre height, parking and setback requirements for multi-Emily devebpnanb. These are major cors- I — to developrrrents art the lower income segmamts which wouhd require a Conditional Use permit or variances to achieve development potential. The City needs to emend its zoning code and implerneot zoning densities in the range of 30 homes to the acre and have specific policies and trogthat would encourage and facilitate the development of homes af6rdable for adremrely low, very low and low-income households. Additionally, the City should describe its plan to update its density bonus ordnnnoe to be comistaot with the n quhVmeata of SBI 818. In developing and implana ting the density bonus ordinano% the City should x1NO& specific incentives and additional programs that will encoerage and Scilitate the development ofreatd homes for the lower income TTbO Cdoes not W u o& concrete policies that would cowurer and Sailitate afl rdeble bouaiog develops sent in infill and rause opportunities for new afibrdable homes br lower income gmsilies Ckywido. The City should make housing for lower-income f unifies a priority by dsiveloping specific policies and allocating Binding that will encourage and facilitate niulti-Samihy affordable rental housing development Citywida When considering Amities and larp households at lower incomes, the draft should analyze the barriers br thi's particular reed and es+eero specific gaols, policies, programs and sites to encourage and f nlitate the new construcdon los large bmily development. In the Housing Element Programs 2006-2014, the only goal that would assist the devebpnreat ofaf%rdable hones is Goal 1.1 Available Silts (page 8T). The City's .af%rdable lousing wdegy is atclusively focused on the Redevebpnnerut Regnnremenb of the Reuse of the MCAS Tustin (Legacy) site O S% Redevelopment Inclusionary obligation). To coed the City's remaining housing needs for low, very low and extremely low income households, the City will be heavily reliant on the Tustin Legacy site to accommodate these developrowts, however, other than the Tustin Legacy site, the draft element does not appear to support the provision of sits br the construction of new affordable homes for lower income families. The element should describe what development typo and sites are being encouraged on Tustin Legacy to facilitate lower income housing (is the City encouraging SFR or Multi-fiumi". The draft should also describe what finding and programs will be utilized to encourage the development of these homes. In addition, the element should develop specific policies or programs to encourage ourage and facilitate the development of atiuidable homes br lower income househoWL We suggest that the language under the impleancotati)n policies and actions be amended to say what specilla land ase policies will be pursued, anti as an affirdable housing ordmsm or other policies that facilitate the incorporation ofdevebpums" that are I00% affordable to working families at the extromely low, very low and low-income categoric. We believe that the City has the opportunity to implecned these policies: 1. Crate clear and meaningful policies and land use took that prioritize and advance concrete goals br the development of mixed income atfmdable !busing for extremely low, very low, low-income houwholds. (The Kennedy Commission. has worked with the cities of Irvine, Anaheim, San Clemente and others to develop than models and strategies). Set honing goal br the production of eKtmmdy low, very low, low-income homes and prioritize housing floods l br development of edra mely low, very low sad bw-income homea. 2. Cresta and implement an Affordable Family Housing Ordinance. The ordinance should provide by -right inceativeo and concessions of ewtain development standards (above density bonus) in cwhrmge br a dedication of 20% of homes affordable to familia at erctranely low, very low and low. The Kennedy Commission and the City of Anaheim collaborated to e:ede the Anaheim ABsrdable Fmm-ly Housing Ordinance (passed m 2004, revised in 2006") and the County of Orange (2006). 3. Crate overlay maws to facilitate affordabb housing developments in commercial and industrial zone arasa Identify appropriate sites. Facilitate and allow residential development in these zones in exchange for a dedication of at bad 20% of the bomes affordable Snaky housing at low, very low and extremely low. Create standads and incentives to fimilitste lower income home. 4. The City should facilitate the cation of affiordable homes by acquiring sites ler C&amely low, vary low and low-income SmilwL The City should create RFP's to leverage the !sod and funding to ereste deeps affordability. S. In addition the City needs to identify sits that are appropriate ler muki-family development to mod the needs of lower income families (sit= should be 6 idntifia A Citywide). pppodunkios for reuse could be developed in the redevebpmeot of aging retail shopping centers on corridor sant main arterials. The City abouW look at undautdized industriaVeommercial property for potential residential of multi -family afibrdable homes for extranroly low, very low and low. 6. The drat should describe what specific parcels on the MCAS Tustin site would be available during the planning period for lower income development. What densities and projp - will be available to facilitate housing fbr lower income Samilias? i■vMtm of LAW Snitabb for Roddodal inavelo MMI Government Code Section 65383 (ax3) requires local governments to prepare an inventory of land suitable for residential development, including vacant sites and sites having potential for redevelop ', and an analysis of the relationship of zoning and public bcdkies and services to these sites. The City's pogra s on the current Housing Element demsonstrates that the City's policies and Soak contimw to largely fbeus on moderate and above moderate income housing opportunities, Table HTM 33 dews that the City has already eaeeeded its moderate and above moderate new construction housing needs for 1998-2008. An analysis of the sites inventory deawnsttatas that the City will have a sbortfall of sites appr+opciate to accommodate the housing needs for eoatremely low, very low and low- mcome bouseholds. The City has not identified appropriately zoned sites for the extremely bw, very low and low-income catepria. Tubb H-13 provide an kmeitory list that above the majority of sites are too small or not zoned appropriately for the development of d1brdebb housing fix extremely low, very low and low-income households (p. 49). In ddkim% the land use zoning for the ida ti5ed sites lacks specific poHdas and program that would encourage and facilitate the development of housing affordable to lower incoms familia. We would encourage the City to idant* sites at appropriate densities to accommodate the needs for lower income familia. The City should go anduate and develop specific pot. densities and programs that would encourage and Facilitate the development of rental homes d6rdable to lower income families. The lower income eata/oria would require densities in the range of 301 to the acre. Although the City plans to acoonunodate theinr lower income housing needs at the Tudia LegtaC Y, the highest dainty for the WAS Tustin. Specific Plan, MedivarH'igh Dainty Residential a only 25 dulac. Additional $ite analysis is also needed to evalinate envir+onmeatal and land use constraints that would impede developm at of of bWable housing fbr sac r mely low, very low and low= income hoimeholds. We would anmrage the City to evaluate and develop specific policies, dengues and programs that would encoumgm and facilitate the development of homy affordable to lower income families. Table H-15 identifies infill sites in the old town and a few additional vacant sites in the City. The majority of sites are small and zoned at Iowan density. To make development feasible, appropriate sites would need to be assembled and towns& In addition, specific Policies to encourage and facilitate afbrdable homes need to be incorporated and impbraemted. To date, mixed use developments approved in the Old Town area have produced 12 live -work, single family homes in the price range of $859,000 0 $1,264,500 (see attached OC Register article). Specific policies and programs need to be implemented to encourage an facilitate affordable homes for extremely low, vay low and low income families on these sites.. Zoolaa Tools to Zimarane Afordabls Fandly Houbm When the inventory reveals insufficient sites to accommodate the housing needs for all income levels, the program section most provide sufHcimt sites, developable "by r%W at multifamily densities, to provide 100% of the shortM of sites necessary, to accommodate the remaining housing need for very low and low-income bonwho ds. (CA Goveem ant Code Section 65583(c) (1 XA)). At least 50% of the lower income housing need shall be accommodated on sites designated for residential uses and for which nowesidential uses or mixed -uses are not permitted. (CA Goveniment Code Section 65583.2(h)). As shown in the site inventory, the City k dm sites appropriately zoned as muki-family at default densities that would support the developmat of affordable housing for families in the lower income segments. It would appear that the City would have to rezone sites to a000mmodate the lower income housing needs. Furdwrmore, the City needs to kbwify potential sites and provide specific incentives that would encourage or hcftate 100% aflbrdable home developments for familia, The City needs to accommodate for housing sites for extremely low, very low and low-income households through a program that allows fir rezoning and by -right development of the sites for lower income ho=dwkls. The Kennedy Commiawn bob forward to working in pmwerghip with the City to achieve our mutually beneficially goals of expanding atibrdabk homne opportnkia for local residents. In the process, we also welcome the opportunity to work more closely with City staff to help lower some of the above-mentioned barriers that have prevated nes► construction afbrdable home devebpmaamts. Fti>rtherrnone, with solid policies, appropriately toned sites and the new fimnding opportunities for affordable home developrneots through monies *0131 Proposition 1 C, we feel that Tustin could be positioned to leverage financial nesom+ca and make a significant contribution to the housing needs in a balanced approach 8 in conclusion, given the importance of the General Plea Housing Element to address the current and fture bousiag needs of Tustin residents, the Kennedy Codon would welcome the oppodunity to have firther diabgue on how we cm work with the City to mom that the ebmeat includes specific policies that will result m nil podwn of the now housing production being afiiordable to exhmnely low, very low and bw•incwme houedwWL Please send us a copy of all amendments and revisions to the drat Housing Element. Cesar Covanvbias Senior Pwied Manager ca ML Cathy Crowell, California Housing and Conmamity Development Department Enquid GutnwM Esq., Public L.aw Cater News: Pnosped V'dbp f ts, developm hopes I Wddm& OK P=PS town, V"M - OC... Page 1 of 2 Thursday. August T. 2008 Prospect Village fits, developer hopes Live -work homes built where Utt Juice Co. stood 8y MYM JAMES STAFF WRITER The developer tons down the historic Un Juice Co. hAding and then hand -placed the old brkdos Ih a new wallw ay to help retain the Old Town look at Prospect Avenue and E. Main Street. In plea of the long -vacant Utt building. Pellmn Properties bui9 Prospect Village. a row of two-level ?orrise built slop ground. flow refit space. Prospect VMaga boasts 12 Nvowvork skqb4mft homes and ona space theft expecled to bscans a resburent. The hares end work specs ere curet* for Cels. Pekoes range from it'16a.000 to s1.2l14.600. Each Noma on E. Main Stmt fee a bogom floor where the owner can sat up shop, or rent the space to a business. The It" spaces nurgss from 1,869 to 2.095 square fest. The ground floors aro 484 b 914 square fest. Developer John H. Tillotson Jr. likened the Iive-work aspect to the duplexes of days gone by. People would live in one and rent out the odw, said Tillotson, co-owner of PeNcan Properties. The construction of Prosped VMegs cat PsNcan Properties about $10 rNMion, he said. In today's world people c m mals on the freeway for hours and tours,- TMotson said. To be able to be and wo* In the same piece Is klsal' Gaining the conmunWs aoaplance of new development In td fork Old Town was important to Prospect Vilags's success. 'Ons of the main challenges is convincing the cltizsns that we would do them dqM by whet we bunk.' Tillotson said. 00vercoming pubic opposition is a wry big challenge.' Tearing down the Uft Juice Co. buildings wee the reason the Toth Preservalbn Conservancy was bmrod, said that group's president, Undo Jennbgs• The group hoped the developer would bid onto the fagedsof the lit buildkrg. which had been amply for about 30 years, r -Thr cky hod allowed the elle to delsdorele pretty be ft* Jerw*W mid. I'm sure for Print Powered By i_.Dynamics _ httlrJ/www.octe oft comhtticlmbundling-old-pnosped-2116198-Umm.viDW 9115fM f 2 Nam Pwaped Village rEK developer hop= I bwldb8. old+ pw:p@c,+ town, village - OC... Page 2 o many dissidents they were happy to have the eyesore and patch of cement and deteriorating building removed' Tilbtson said the Utt Juice building was'in pretty bad shape.' and that the building was not salvageable. The company roseerchad the community using city archives and the Tustin Museum so that Prospsd Mage would fk into Old Town. Tillotson said. M addition to the bricks being reuad. it* corrhioe from the Ult building was replicated on the new building. Inwely. there was a lot of I'm com on the part of tha rasidsnh of Old Town and the community about what we would do here and concern about our ability to build something thea would ba s congA rrt to the area Tiibhon sad.'Mlerwe finished. the community hes embraced It and are appmcldWs of the result' prosped V■aQe k too Ins for Old Town. 7119 building is attractive, but 1 would haw proferred Sonat t more in the sane scale as the buldi gs surrounding, ti.11m month► conccerr-ad that that' haven't found any tenarhb for the nelall and the towrhhrowes aren'tsetng' North Tustin resident Jet Miler, who hadn't seen the inside of the buildings. sad Prospect Village bob great and tis into Old Town. Miller said the Ult building didn't Way compatible with changing times and that Prospect Village is more upscale. Prospect Vi" is a topic of conversation for many Tustin residents. said John Nolen, who owns Core Operating Agency in Odd Town Tustin. He said the scala of the building. "nW somewhat be tefrng about the future of Old Town. Odd Town Is such a hot sw 'Wa think ICs arohkedurally elegant and it's wry nbsly dons, Nolen mid. "Note oo,ma, ed the timing of It Is unfOdUnats. I'm W afndd that at some point the bank Is going 10 say. 'We -re going to tetra these.- He added, Ift ell appreciate it aestlreflwMy, we just hope it shxrceeds.' 9 V" its a aft expensive in today's narkW said Tustin resident Sharon Spisk. Contact the writer: 940453-2898 or ejamesdocregistercom Print Powered By _ 'r�namics b,Wltwww.ocregigW.com/wdcldbuildin8-oid-Prospect-21161984own-vhMW 9/1 V2008 . sF.F-11-:011 08:UFN Fuer` Via Put: 714-579.3113 T-314 F-101/Ni F -MY PUBLIC 10LAW CENTER PROVIDING ACC9SS TO JUSTICE FOR ORANGE COUNTY'S LOW INCOME RESIDENTS September 23. 2008 Ma. bstion W92M Senior PNMW Co on DiovvlopmW crff O>E TVBTai Sao Cemmoid way TvsdO, CA 92780 Ra: Cly of Taedlt's 2W64014 Draft l6 a 15 130=0 Dear Ms. wmb m: Mo Public Lw Comm (PLC) b a mt.ltprolk mrs indon dart providaa lnd srrioas so low-income iudividu b ,md oomattdt) basad aepokosi m in Orange Coca y. Some of PEC S CHOW= IoM-iwome taMsom wW emm live smWr wort In do City of Tnsda (Chy), sad cotttmunky4 ased apotisaaoaa drat are locased in md0br serve said communal, cad in mnonndbg was. PLC submit dim commems on bdolf of PLC itdi WAW and arpsh2dood diems Owoould be advasdy impacted a n malt of do bait Aouft Element of dse City of Tuft Addidoaa8g, PLC b lldiy Supp , - amid n "um dta entmirulw wrla.a commum to due city S+om doe 1Keanady Cmadsam wbmkod cooewroody. Widaa ]imludom PLC wislsee m blpldlEitt the issue of public panidpedon for ou sidaraioe by the Cky. A mvEmr of the *A Wain/ elemitea update by dW Cky tevmmb It has hH" dtoet of dta obliption 10 provide adequate opporooidu fw m d conddom ion of public prrticipatbu b die derebpmeat of in bouft i l 1-. pAm& :Jog due aMraic praiky of dw Plmft pocoo pa&pftpJm is a vial oottytomia g and dw h A of su* partiailwioa con impede dte dgls ability m a&*mdy ddios p oWsms and amiale aukabls aohtdma A is v low of to comm b by Ore Me fy Com ISINIM k dk*W e W ft Cky hila avidesdy tldled 0 pttovlde nm* opporarddea lbr pololk pardelpd0a curd, ptartt01% b out in complimos wit Nebo 6551130M of dot Orm mmt Code In trw itnpaettmRteepst:ss. Finsdue Cfq► evdeady lte aotmeds do tegtdraf -diliOatt eAiost m addeMI pwft po deipadala of ap 4oeook iia j low of de 000setad 3 to to dswimp 'Wof [itj boudnO dement," espeaft is dts comm of pbwft fir do bora I popul OM of do Cky. Bmomb added. Secondly, u a am& of 10 69 e m ranee thk dWpest pb=Wn& etbn. the draft has not and err— t-dua'ibe [soft a COa~ dbrL" Bah pmvisions of s cdw 66313(0)(7) darribed show we; in dw swan by do wad -shall" mmohsp dts summy lamp W b dkaedw and mandasory f br jufsdiedoami preparing a bom ttd donees. Tito rap a drt5 dWy d do City and the revwwmg role fm HCD arab the adegt wy of public participation a sepaease cad indo;tmdeat base for Moan bopormMy, hilum to comply w M these pmvlsiona fbrpublie ptsdeipae1' is is tel sim it umdendu a Ota a Vincol and audydc base fm to *A rmdeft it noaoellfiabk by Cdiferde Daps uW0 of l8Oiap and Cmmmnky Devdopment (= To draft Hoeft Elan 1 'is inade*vm in its various poliaiss sed plogtSoo *ft roved m due needs of lower eovaotttic sepseao of the comattttigr. M oomu4 ptovi*m for pobiic pardcomion b tits prepentbn of pttWal plain, food st sectbrt 66033 of to Oovamnm Coft moopban dss importams of public puticipadon at evttry level of pbmeio& and declares simply that it is *a policy of lbs soma and legs mm's hms to have stft I gi m - and kcal sppaeks hivolve ria puretic in ti01 Chis Cenetr Dd a wast - derma An% CA 9=1-" • (714) 541-1410.11x: (714) 541.5137 SEP-=NIN 0:24M FBF T-314 P.ORA12 FOOT in Pianias etlbra. Beyond a aaese dsclacsdon of state Policy. do b ft=IP of section 65SMcX7) of the housir.B eletttaat law is moadarory and ditvs"f0f jueirdiaioft Futcher. atuatttarW% the 6nWeliaa for hottsln9 e� AE°a of BCD's Btu B"eeta csfMw t i°Me o" Mkil oP a are many ways that >�x P 0n can be addavcd. Before o � � t ry tad as asauxY e� other almd eveML the &y mould taloa imo aCootmt the ethnic composition Addb"Uy. the laaSutBs4ppropruu efroso to invobe t11 Woups, in rhe case of the Ciq. in the Spanish city should Consider odtw aonswab.ts that may Pew a 10E as P meatlnP• and try to make pvpra wcoamodatione Icor those wit need them. Bawer fe=d puW M@g&W a dWpo eflhet to rad. out m t s community an be demousaramd by. vh " is local events. by hokUm w dcdwps that dlovu membue of the cotmntdgt b that -1 IN -a an the pmposod howmg Cods a P detaatt, by umdma brodnove and/or surveys t M&h do wvA at by ciadii as intorective websda Phally. CoostntnticY feedback should be reviewed. acimowlsdged end imPlemeawd in do draA housing demaat. Based on the bonsits demeo< ttPdate s tbnnt-Id tc You depwu=L do Chy has 11ot ands t compa "a ennPNaw aEi0d at such public putiapadM ft" the dhecuvu of lac* w 66583(c)(7) and the sewsace sv"k 6=0 Me RM wtbeir. on this beds alone. the draft ltusiaB elawd update by the city is buidequavi and 009Mi be areiLiabie. M - amwoodadeae Ual m, each jurisdie ion esruesrly meets its �esiai fair shale, the livdwock Imbaitatce � MMOdau�C sad ai<� k Cn�(torppioa end omioor wtel psobl— win c od ae unabated. Jutisdktioat shanld qw" bapeas 10 die f Sk= at IWOM fat id Pr06 "0oe for>riilta'ittooma m and booties. Stich Ctaetl 011110=8 is ant accept" or eondsom with the fair shtm p o[ i1JWA aUocatm and eq eMd eos,pgW Pbmi"M pM thmdbre, eammages the dry 00 cmWw dos reeoratanadtdM* haws and approach w addmft NOW bow ft needs coarsbted in the Man*= do gem* Cwm*sioe. Moseova. PLC eacomesa the Ciel' w PUNGS the C08*01"dw parte{ d o ad by the Coassisdas In eddnaal"i io CM Wioa sol tnaaias *M needs ani PlandaB for dm* aahrtioa. AccottMOW. PLC offers its own tesotsca m the Chy to roeadnb its N&M hcuft WwRiom Nelia BegPesaa� . Request is hetttby malt. b 111 0- whh die Public P ibr honshts demesaa. dntt the City sive and odds affice and sand it a cony of ed aansdtae"ts anti mvtitooa 1D the drsdt B' I Elentan. If you )rave questions Cr wish t0 discus any of d a poiaa raiaed in dds later. the undsnipad a" ba rachet" diu► u (714) 619.9270. M ank yon. Very aoly Yow% PUBLiC r tBY: . oc: I& Cathy &..*a, DePuy Directs. Divisiea of Ma ft Policy MN&I mmt Mr. Cesar C0 wuv^ MMMT COON . at Ck* Cadw W" • SMft ma. "U7r -00 • (714) sit -101 - ram (714) �t-sl S7