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HomeMy WebLinkAboutCC RES 09-33RESOLUTION 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 1 of 469 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. 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. Resolution No. 09-33 Page 2 of 469 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. I. 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 D ERT Mayor Resolution No. 09-33 Page 3 of 469 C V PA LA STOKE City Clerk STATE OF CALIFORNIA ) COUNTY OF ORANGE ) SS CITY OF TUSTIN ) I, Pamela Stoker, City Clerk and ex-officio Clerk of the City Council of the City of Tustin, California, do 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 STOKE CITY CLERK Davert, Amante, Nielsen, Palmer (4) None (0) Gavello (1) None (0) Resolution No. 09-33 Page 4 of 469 Housing Element TUSTIN GENERAL PLAN June 16, 2009 Adopted by Resolution No. 09-33 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 9 Summary Of Housing Needs 9 Preservation Of Units At Risk Of Conversion 24 Summary Of Housing Issues . 30 Housing Constraints 30 Housing Opportunities 52 HOUSING ELEMENT GOALS AND POLICIES 71 Housing Supply/Housing Opportunities 71 Maintenance And Conservation 76 Environmental Sensitivity 77 Related Goals And Policies 78 HOUSING ELEMENT IMPLEMENTATION PROGRAM 79 Five Year Quantified Objectives 79 Identification Of Affordable Housing Resources 90 Housing Programs 120 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 JUNE 16, 2009 LIST OF TABLES Page TABLE H-1: STATE HOUSING ELEMENT REQUIREMENTS 3 TABLE H- 2: POPULATION GROWTH 10 TABLE H- 3:EMPLOYMENT PROJECTION 11 TABLE H- 4: LIST OF MAJOR EMPLOYERS 13 TABLE H- 5: JOBS/ HOUSING BALANCE 14 TABLE H- 6: APARTMENT INVENTORY CHARACTERISTICS 17 TABLE H- 7: TENURE OF HOUSEHOLDS WITH HEAD OF HOUSEHOLD AGED 65 YEARS OR OLDER 19 TABLE H- 8: EMERGENCY SHELTER/ TRANSITIONAL HOUSING FACILITIES 23 TABLE H- 9: ASSISTED HOUSING INVENTORY 26 TABLE H-10: SUMMARY OF EXISTING HOUSING NEEDS 30 TABLE H-11: ANTICIPATED DEVELOPMENT AT MCAS-TUSTIN 39 TABLE H-12: LAND INVENTORY AND RESIDENTIAL DEVELOPMENT POTENTIAL 53 TABLE H-13: PROGRESS TOWARD RHNA CONSTRUCTION NEEDS 54 TABLE H-14: VACANT AND UNDERUTILIZED LAND WITH RESIDENTIAL DEVELOPMENT POTENTIAL 62 TABLE H-15: VACANT LAND SUITABLE FOR RESIDENTIAL DEVELOPMENTS 69 TABLE H-16: HOUSING RELATED GOALS AND POLICIES BY ELEMENT 78 TABLE H-17: NEW CONSTRUCTION QUANTIFIED OBJECTIVES SUMMARY 87 TABLE H-18: REHABILITATION, PRESERVATION, AND OTHER AFFORDABLE HOUSING QUANTIFIED OBJECTIVES 89 TABLE H-19: SUMMARY OF QUANTIFIED OBJECTIVES 90 TABLE H- 20: LOW AND MODERATE INCOME HOUSING SET ASIDE FUNDS PROJECTIONS 91 TABLE H- 21: AFFORDABLE HOUSING RESOURCES 98 TABLE H- 22: HOUSING ELEMENT PROGRAMS 2006-2014 121 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN ii JUNE 16, 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 SCAG 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 JUNE 16, 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. T'he 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 JUNE 16, 2009 TABLE H-1 STATE HOUSING ELEMENT REQUIREMENTS Required Housing Element Component Page A. Housing Needs Assessment 1. Analysis of population trends in Tustin in relation to regional trends HTM 9 & HE 10 2. Analysis of employment trends in Tustin in relation to regional trends HTM 12 & HE 11 3. Projection and quantification of Tustin's existing and projected housing needs for all income groups HE 30 & HTM 40 4. Analysis and documentation of Tustin's housing characteristics including the following: a level of housin cost com ared to abili to a ; 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 69 6. Analysis of existing and potential governmental constraints upon the maintenance, improvement, or development of housing for all income levels H'I'M 49 & HE 36 7. Analysis of existing and potential non-governmental and market constraints upon maintenance, improvement, or development of housing for all income levels HTM 71 & HE 33 8. Analysis of special housing need: disabled, elderly, large families, female- headed households, farmworkers HE 18 & HTM 23 9. Analysis concerning the needs of homeless individuals and families in Tustin HE 21 & HTM 26 10. Analysis of opportunities for energy conservation with respect to residential development HTM 76 B. Goals and Policies 1. Identification of Tustin's goals, quantified objectives and policies relative to maintenance, improvement, and development of housing HE 71 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 3 JUNE 16, 2009 TABLE H-1 STATE HOUSING ELEMENT REQUIREMENTS Required Housing Element Component Page C. Implementation Program An im lementation ro am should do the followin 1. Identify adequate sites which will be made available through appropriate action HE 121-147 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 121-147 moderate-income households 3. Identify and, when appropriate and possible, remove governmental constraints HE 121-147 to the maintenance, improvement, and development of housing 4. Conserve and improve the condition of the existing and affordable housing HE 121-147 stock 5. Promote housing opportunities for all persons HE 121-147 6. Identify programs to address the potential conversion of assisted housing HE 121-147 developments to market rate units Source: California Government Code, §65583, et al. 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 JUNE 16, 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, floodplains, 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 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. 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 T'he 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 persons 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 JUNE 16, 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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 6 JUNE 16, 2009 further to address the comments. 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. T'he 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 JUNE 16, 2009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 8 JUNE 16, 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 9 JUNE 16, 2009 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 Growth Jurisdiction 2000 i 2007 z 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% Oran a Coun 2,846,289 3,100,313 8.9% Sowce: 1 2000 U.S. Census z Depaztment 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 10 JUNE 16, 2009 TABLE H- 2A Population Projection 2010 2015 2020 2025 Percent Change (2010-2025) Tustin 80,728 86,621 88,245 88,694 10% Source: OCP 2006 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 (zmo-2o25~ Tustin 46,742 56,340 64,386 68,551 47% Source: OCP 2006 Modified, Prepazed by Center for Demo~aphic Research. 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 11 JUNE 16, 2009 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 12 JUNE 16, 2009 TABLE H- 4 LIST OF MA OR 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 Edin er 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 E ui ment 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 E ui ment City of Tustin - (714) 573-3000 300 Govenvnent 300 Centennial Wa -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 New ort Ave. -Tustin, 92780 Vitatech International, Inc. - (714) 832-9700 178 Pharmaceutical 2832 Dow Ave. -Tustin 92780 Pre arations 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 SOURCE: City of Tustin Website, October 26, 2007, Tustin Chamber of Commerce, Tustin Community Development Depaztment, and Orange County Workforce Investment Board 2007 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 13 JUNE 16, 2009 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 ajobs/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 Oran a Coun SLAG Re 'on Em to went 40,449 1,496,200 7,123,700 Housin Units 25,927 1,013,036 6,005,879 Jobs/ Housin Ratio 1.56 1.48 1.19 Sources: California Depaztment of Finance; Center for Demographic Reseazch; SLAG; 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: l) 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. The 2007 Regional Housing Needs Assessment (RHNA) prepared by CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 14 JUNE 16, 2009 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 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 unitsl. Affordability State and Federal standards for rental housing overpayment are based on anincome-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. 1 Housing Element Technical Memorandum Table HTM-21. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 15 JUNE 16, 2009 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 tota13,935 lower income households identified as over-payers, 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 16 JUNE 16, 2009 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 athree-bedroom townhouse unit is $1,861. The weighted average rental rate for the inventory increased 5.4 percent over the past yearn. 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 June 2007 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 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 z 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 17 JUNE 16, 2009 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. s Summary based on data contained in Comprehensive Housing Affordability Strategy, 2008. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 18 JUNE 16, 2009 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%s Owners 2,086 17.6%2 Total Households 2,833 11.9%3 s As a percentage of 12,002 renter households. z As a percentage of 11,829 owner households. s 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 a TABLE H-7A Estimated Household Income Distribution Households with Head of Household Aged 65 Years or Older 2000 Income Range Numbers 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% s 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. a HUD median household income for a family of four in Orange County in 2000 was $69,600. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 19 JUNE 16, 2009 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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 20 JUNE 16, 2009 SRO units, the City may consider the adoption of single-room occupancy (SRO) ordinance during the planning period. T'he 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 21 JUNE 16, 2009 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: afast-growing lack of affordable housing, which could exacerbate any of the above conditions, but may increasingly become a 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 22 JUNE 16, 2009 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, anon-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 clothin . St. Cecilia's Distributes food supply to needy populations. Redhill Lutheran Operates emergency food program where a erson can receive food su 1 3 times a ear. 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 units transitional home at the Village of Hope Village of 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. 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 23 JUNE 16, 2009 Fourteen (14) new transitional units at Columbus Families Forwards 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. 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 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, 2009. 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 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. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 24 JUNE 16, 2009 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 provisions 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 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 JUNE 16, 2009 TABLE H- 9 ASSISTED HOUSING INVENTORY FEDERAL Tustin Gardens Goldrich & Kest HUD 221(D)(4) Type/Length 07/2009 101 Tenant 1011-br 1979 Good Project Name, Owner: Section 8 of Earliest 100 Type 57 2-br Date Address Name, Type(s) of Gov't Affordability Potential # of (i.e., Bedroom Built Condition (incl. zip) Address, Assistance Controls Conversion Units Elderly, Mix (if known) (if known) Tel. # Authority 1998- (including Date(s) Family) A Bond Sec. 8) FEDERAL Tustin Gardens Goldrich & Kest HUD 221(D)(4) --- 07/2009 101 Elderly 1011-br 1979 Good E. 6th 5150 Overland Ave. Section 8 restricted. No 100 57 2-br Tustin, CA 92680 Culver City, CA Communities rent 9 3-br 213-204-2050 90230 Development restrictions STATE Rancho Alisal The Irvine Co. California Income May 2012 72 Family 61-br 1987 Excellent 13800 Parkcenter 550 Irvine Ctr. Dr. Statewide restricted. No 57 2-br Tustin, CA 92680 P.O. Box 1 Communities rent 9 3-br Newport Beach, CA Development restrictions 92660-9959 Authority 1998- A Bond Financing Rancho Maderas The Irvine Co. California Income May 2012 54 Family 101-br 1988 Excellent 13408 Heritage Way 550 Irvine Ctr. Dr. Statewide restricted. No 44 2-br Tustin, CA 92680 P.O. Box 1 Communities rent 730-3700 Newport Beach, CA Development restrictions 92660-9959 Authority 1998- A Bond Financing CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 26 JUNE 16, 2009 TABLE H- 9 ASSISTED HOUSING INVENTORY Type/Length Tenant Project Name, Owner: of Earliest Type Date Address Name, Type(s) of Govt Affordability Potential # of (1e Bedroom Built Condition (incl. zip) Address Assistance Controls Conversion Units Elderly, rly, Mix (if known) (if known) Tel. # (including Date(s) Family) Sec. 8) S Rancho Tierra The Irvine Co. California Income May 2012 51 Family 7 3-br 1988 Excellent 13202 Myford Rd. 550 Irvine Ctr. Dr. Statewide restricted. No 44 2-br Tustin, CA 92680 P.O. Box 1 Communities rent 730-5868 Newport Beach, CA Development restrictions 92660-9959 Authority 1998- A Bond Financing Westchester Park Westchester Park, L.P. California Tax Income 150 Family 17-1br N/A Good (Orange Gardens) Credit restricted. No 10/2029 93-2br 1602 Nisson Rd. Allocation rent 40-3br Tustin, CA 92780 Committee restrictions Flanders Pointe Tustin Affordable California Income 10/2029 49 Family 41-2br 1966 Good 15520 Tustin Village Housing Corp. Statewide restricted. No 7-2-br Way Communities rent Tustin, CA 92780 Development restrictions Authority, 1999 LOCAL Tustin Grove Tract 14934 Redevelopment DDA1 N/A 21 Family 21-3br N/A Very Good Agency CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 27 JUNE 16, 2009 TABLE H- 9 ASSISTED HOUSING INVENTORY CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 28 JUNE 16, 2009 Type/Length Tenant Project Name, Owner: of Earliest Type Date Name, Type(s) of Gov't Affordability Potential # of (i Bedroom Built Condition (incl. zip) Address, , Assistance Controls Conversion Units Elderly, Mix (if known) (if known) Tel. # (including Date(s) Family) Sec. 8) Ambrose Lane Tract 15707 Redevelopment DDA1 N/A 8 Family 8-3br N/A New Agency Heritage Place Tustin Heritage Place, County Revenue Income 04/2057 54 Senior 42-1br 2001 Very Good L.P. Bonds, Tax restricted, 12-2br Credits, RDA Senior 62+ Loans Chatam Village Fairfield Residential Southern Income 210 Family 124-1br 1969 Good (Hampton Square) Corp. California Home restricted. No 2026 86-2br 16331 McFadden Finance Agency rent Ave. restrictions Tustin, CA 92780 Tustin Field I Various owners Redevelopment Ownership 45 years of 78 Family 27-2br 2006 Excellent Tustin, CA 92780 Agency income initial 51-3br restricted. purchase date Tustin Field II Various owners Redevelopment Ownership 45 years of 40 Family 40-3br 2007 Excellent Tuin, CA 92780 Agency income initial restricted. purchase date Arbor Walk Various owners Redevelopment Ownership 45 years of 10 Family 10-3br 2006 Excellent CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 28 JUNE 16, 2009 TABLE H- 9 ASSISTED HOUSING INVENTORY N/ A - Not available 1 DDA - Disposition and Development Agreement Source: Comprehensive Housing Affordability Strategy 2008 -2018 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 29 JUNE 16, 2009 Type/Length Tenant Project Name, Owner: of Earliest Type Date Address Name Type(s) of Govt Affordability Potential # of (Ie Bedroom Built Condition (incl. zip) Address, Assistance Controls Conversion Units rly, Elderly, Mix (if known) (if known) Tel. # (including Date(s) Family) Sec. 8) S Tustin, CA 92780 Agency income initial restricted. purchase date Cambridge Lane Various owners Redevelopment Ownership 45 years of 36 Family 11-lbr 2006-2007 Excellent Tustin, CA 92780 Agency income initial 13-2br restricted. purchase 12-3br date Camden Place Various owners Redevelopment Ownership 45 years of 37 Family 22-2br 2006-2007 Excellent Tustin, CA 92780 Agency income initial 15-3br restricted. purchase date Clarendon Various owners Redevelopment Ownership 45 years of 42 Family 42-3br 2006-2007 Excellent Tustin, CA 92780 Agency income initial restricted. purchase date TOTAL 1,012 N/ A - Not available 1 DDA - Disposition and Development Agreement Source: Comprehensive Housing Affordability Strategy 2008 -2018 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 29 JUNE 16, 2009 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 Group Ve Low Units 512 Elderl Personsz 4,804 Low Units 410 Disabled Persons 2,162 Moderate Units 468 Lar a Households3 3,095 Above-Moderate (Units) 991 Female-Headed Households with Children under 18 ears 1,700 TOTAL 2,381 Overcrowdin Over a in Househo lds 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 Total 8,569 1 Kegional Housing Needs Assessment, SLAG, 2007. z 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 30 JUNE 16, 2009 ° 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 31 JUNE 16, 2009 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 1001ow-income units (see Table HTM-2'~. ° 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 32 JUNE 16, 2009 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 ni 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 33 JUNE 16, 2009 & 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 typica12,200 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 s Two-story wood frame average quality for Orange County area CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 34 JUNE 16, 2009 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 person s 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 Strategyb, 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 b City of Tustin Comprehensive Affordable Housing Strategy, 2008 - 2018. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 35 JUNE 16, 2009 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 (~ 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. Ten (10) units per net acre are also permitted in the MHP Mobilehome Park District (see Table HTM-32). The Planned Community District has authorized residential subdivisions with CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 36 JUNE 16, 2009 single-family lots of 3,500-5,000 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 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 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 family zoned properties or using stepped building heights and design to minim;~e 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 Neighborhood 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. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 37 JUNE 16, 2009 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 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 MCAS 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 owner-occupied units. However, in response to market demand, the City anticipates shortly processing an amendment to the MCAS Tustin Specific Plan that would allow 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 build out of the MCAS 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. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 38 JUNE 16, 2009 The anticipated timing of residential development of the MCAS- Tustin Specific Plan is as follows: TABLE H-11 Anticipated Development at MCAS-Tustin Land Uses Acreage Through 2011-2015 (gross) 2010 Low Density (1-7 DU/acre) 182.2 1,630 Planning Area 4 and 21 Medium Density (8-15 DU/acre) 51.7 1,396 116 Planning Area 5 Medium to High Density (16-25 DU/acre) 29.4 568 Planning Area 20 Community Core (16-25 DU/acre) 111.7 891 Planing Area 8,13, and 14 Transitional/Emergency/Social Serviced 9.1 332 Total 384.1 4,817 116 ~ Rescue Mission 192 unit project, 50 unit transitional housing to be operated by vanous non-pronts and 90 beds transitional housing to be operated by the County of Orange Social Services Agency. Notes: All figures aze estimates as schedule will be impacted by market conditions. Figures in text aze rounded for discussion purposes. Figures aze 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; however, approximately 300 units could be accommodated within this project site. The remaining opportunity sites consist of a large proportion of small vacant and underutilized land that is located within Redevelopment Project areas within the City or Old Town residential CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 39 JUNE 16, 2009 areas where infrastructure is available and no major improvements would be anticipated. 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 MCAS 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. Atwo-car garage is required. The Cit~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 40 JUNE 16, 2009 Housing for Persons with Disabilities/Reasonable 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 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 facility serving six (6) or fewer persons. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 41 JUNE 16, 2009 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 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, anon-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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 42 JUNE 16, 2009 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. With the closure of the Marine Corps Air Station (MCAS) Tustin, the City was 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 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; CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 43 JUNE 16, 2009 ^ 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 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 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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 44 JUNE 16, 2009 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 MCAS Tustin Specific Plan, a total of 879 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 MCAS 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. ~ Includes 32 transitional housing units set aside for non-profit homeless providers. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 45 JUNE 16, 2009 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 City of Tustin, emergency shelters are designated as permitted uses within Planning Area 3 of the MCAS Tustin Specific Plan. Planning area 3 is a five (5) acre site that had been a no cost conveyance to the Orange County Rescue Mission for the development of emergency/transitional shelter that is known as Village of Hope. The City facilitated the development of the Orange County Rescue Mission Village of Hope and waived permits fees as this was apublic/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 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 Hope also provides food service program of approximately 450 meals daily to the Armory. Based upon the available data obtained from the Orange County Partnership and McKinney Vento 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 City 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 City was told that currently there are 20 vacant units and a minimum of five (5) percent vacancy 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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 46 JUNE 16, 2009 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 group housing or multi-family units, and often includes supportive services component to allow individuals to gain necessary 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 facility 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 right as amulti-family 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. Emergency shelters are permitted within Planning Area 1 of the MCAS Tustin Specific Plan. Transitional homes and supportive housing are also designated as permitted uses within Planning Areas 1 and 3 of the MCAS Tustin Specific Plan. Community care facilities such as group homes, foster 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 47 JUNE 16, 2009 TABLE H-11A SUMMARY OF HOMELESS ACCOMMODATION ZONING REGULATIONS Permitted/ Housing Type Conditionally Zoning Permitted Emergency Shelters Permitted Planning Area 3 of MCAS Tustin Specific Plan Planning Area 3 of MCAS Transitional Home Permitted Tustin Specific Plan Planning Areas 1 and 3 of Supportive housing Permitted MCAS Tustin Specific Plan Community Care Facility for six (6) or Permitted All residentially zoned fewer properties Family care home, foster home, or Permitted All residentially zoned Qroup home for six (6) or feweri nroverties 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 192-unity emergency/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. e 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 48 JUNE 16, 2009 • Six (6) new units at Columbus Grove operated by Orange Coast Interfaith Shelter. With the exception of the emergency shelter, these units are transparent and dispersed throughout 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 throughout 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 minim;~e 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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 49 JUNE 16, 2009 $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. 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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 50 JUNE 16, 2009 does not require a public hearing or Planning Commission approval. The Tustin City Code authorizes the Community Development Director to approve development plans when findings can be made that the 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 certainty 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 certainty 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. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 51 JUNE 16, 2009 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 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 52 JUNE 16, 2009 TABLE H-12 LAND INVENTORY AND RESIDENTIAL DEVELOPMENT POTENTIAL (1) Number of existing housing units in the City of Tustin based on Tustin General Plan Land Use Element, 2001- Table LU -3 "Future Land Use Density/ Intensity and Population Capacity of The Land Use Plan." DUs = dwelling units (2) Total approved units (Tustin Filed I and 11, Columbus Square, Columbus Grove). Excludes 192 units of emergency housing and 90 units of transitional family housing. Source: Tustin General Plan Land Use Element, 2001. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 53 JUNE 16, 2009 Grossr.; Gross Potential Acres Potential DUs/ Land Use Acres DU41 Under- i'atential DU;( Vacant & Category Vacant Vacant Utilized Underutilized Underutilized Low Density Residential 0 0 0 0 0 (1-7 du/ac) F Medium Density Residential (8-15 du/ac) N•: 3.05 46 3.71 55 101 ; High Density Residential (15-25 du/ac)4 10.15 256 18.01 455 711 p Mobile Home Park (1-10 du/ac) 0 0 0 0 0 a MCAS Tustin Specific Plan 180.67 2,105 0 0 2,105 s� PC Low Density Residential 0 0 0 0 .f *t PC Medium Density Residential 0 0 0 0 0 'd r, PC High Density Residential 0 0 0 0 0 _�.. TOTAL 193.87 2,907 21.72 510 2,917 ;,• (1) Number of existing housing units in the City of Tustin based on Tustin General Plan Land Use Element, 2001- Table LU -3 "Future Land Use Density/ Intensity and Population Capacity of The Land Use Plan." DUs = dwelling units (2) Total approved units (Tustin Filed I and 11, Columbus Square, Columbus Grove). Excludes 192 units of emergency housing and 90 units of transitional family housing. Source: Tustin General Plan Land Use Element, 2001. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 53 JUNE 16, 2009 Table H-13 illustrates Tustin's progress in achieving RHNA construction needs since January 1, 2006 that can be credited toward the 2006-2014 planning period. As of 2008, the City has satisfied approximately 71 percent of its Very Low-income, 32 percent of Low- income, 47 percent of Moderate-income and 147 percent of Above Moderate-income RHNA Construction Needs. TABLE H-13 PROGRESS TOWARD RHNA CONSTRUCTION NEEDS 2006-2014 C ITY OF TUSTIN RHNA Units Net RHNA Construction Units Approved/ Construction Income Category Need Constructed Entitled/Under Need 2006-2008 2006-2014 Construction 2008-2014 Very-Low 287 43 (71%) 37 150 Extremel Low 225 1921 90z Low 410 57 32% 74 279 Moderate 468 60 70% 161 247 Above Moderate 991 824 136% 628 -461 Total 2,381 1,176 (91%) 990 215 ' Village of Hope z Orange County Social Services Agency -Tustin Family Campus Source: 2007 RHNA; City of Tustin, Redevelopment Agency and Community Development Depaztment. Housing Units Constructed Since January 1, 2006, a total of 1,176 units have been constructed. Among the units constructed, 235 units were for Very-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 Very 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. T'he 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 54 JUNE 16, 2009 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,121ow 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 Very Low Income units, 49 Low Income units, and 45 Moderate Income units. These units were created as part of the inclusionary requirements for the CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 55 JUNE 16, 2009 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). Lennar and Lyon affordable units were created as a result of density bonus concessions granted by the City. The following tables demonstrate 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 affordability not to exceed 45 years. 2007-2008 2007-2008 Average 2007-2008 Income Level Average Fair Affordable Average 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 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. 2007-2008 2007-2008 2007-2008 Income Project Average Fair Average Average Level Market Price Affordable Promissory Purchase Price Note Very Low Cambridge* $463,929 $66,921 $397,007 Camden* $516,889 $71,800 $445,089 Tustin Field I $440,000 $89,442 $350,558 Low Cambridge* $456,333 $117,316 $339,017 Camden* $534,550 $139,695 $394,855 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 Camden* $534,214 $253,671 $280,543 Tustin Field I $464,125 $345,702 $118,423 " These housing projects aze located in the Villages of Columbus and the affordable units were created as a result of density bonus concessions granted by the City. The average promissory note for these projects is the cost to the City to provide density bonuses. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 56 JUNE 16, 2009 Village of Hope 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 afull-service transitional housing facility which provides educational, child care, health care, etc., the units function independently meeting the Census Bureau definition of a "housing unitio." 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 Approved/Entitledsnd 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 fora 90 Very Low Income units intermediate care shelter for abused children and their parents' facility 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 io Census Bureau definition: "housing unit: Asingle-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 as 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 57 JUNE 16, 2009 Villages of Columbus (Columbus Square and Columbus Grove) The project's remaining units are currently under construction. A total of 37 Very 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 townhomes 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- CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 58 JUNE 16, 2009 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 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 additiona14,049 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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 59 JUNE 16, 2009 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 atwenty-five (25) percent density bonus above the City's maximum allowable density. In addition, the City entered into a 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 acrell. 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. u 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 60 JUNE 16, 2009 As demonstrates in Table H-14, there are a total of 215.59 acres of land (180.67 acres from MCAS Tustin, 7.80 acres vacant land, and 27.12 acres underutilized land) with residential development potential. These sites could potential be developed with approximately 2,915 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 61 JUNE 16, 2009 TABLE H-14 VACANT AND UNDERUTILIZED LAND WITH RESIDENTIAL DEVELOPMENT POTENTIAL Vacant Land Underutilized Land Above- Above - Very -Low Low Moderate Moderate Total Very -Low Low Moderate Moderate Total Land Use Category, AC I DU AC I DU AC DU AC DU AC I DU 1AC I DU AC DU AC I DU AC DU AC DU Low Density Res. -T 1-7 du/ac) Medium Density Res. (8-15 du/ac) 10 8 9 19 3.05 46 12 9 11 23 3.71 55 High Density Res. 15-25 du/ac 56 43 51 106 10.15 256 122 94 111 233 22.21 560 Mobile Home Park 1-10 du/ac Subtotal 66 1 51 1 1 60 1 1 125 13.20 302 1 134 103 122 256 25.92 615 Neighborhood D 53 53 90 1 695 33.47 891 Neighborhood G 73 42 142 957 147.20 1,214 Subtotal 126 95 232 1,652 180.67 2105 PC Low Density Res. PC Med. Density Res. PC High Density Res. Subtotal Correlation of land use densities and income levels based upon the City's General Plan maximum density 2 Income level estimated based upon specific plan densities and Disposition and Development Agreement entered with Developer and the City. Source: City of Tustin; MCAS Tustin Specific Plan, as amended, Vacant and Underutilized Land Suitable for Residential Development, and City of Tustin General Plan January 16 2001. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 62 JUNE 16, 2009 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 by the Community Development Department and Redevelopment Agency, Disposition and Development Agreements between the City and developers, exclusive negotiations with potential developer(s) authorized by the City Council, maximum zoning and general plan densities, and eligible incentives to developers for provisions of 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 City Council authorized exclusive negotiation with potential developer. The closure of MCAS Tustin provides the City with opportunity sites to meet the City's share of regional housing needs. The majority of the City's share of housing needs will be provided at the former MCAS Tustin (Tustin Legacy) project site which was part of the base closure realignment process. The Federal government provided the land to the City at no cost. The City subsequently will convey the land to developers for the development of the Tustin Legacy. Although no specific 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 identifying proposed lots, gross acreage and number of units as follows: CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN JUNE 16, 2009 63 Master Developer Footprint Neighborhood Planning Concept Land Use Gross Dwelling Density Area PA Plan Lot Acrea e12 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 iz Gross acreage includes local streets. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN JUNE 16, 2009 64 Xt *4 f ': vlla.A 7;m, • F —...--i OFFICE RE.SWENTLLL ® OPEN SPACE HOTELIOFFICE MtXEO use RIGHT OF WAY r••••_ MASTER BLOCK BOIINOARY LwneN,v B.ILWry c�Ifrx n•, mil Y'e e(1y� ,- � I�.l o. ],x 1Z. 15.x11�ylr Vd- ifuq•tic tlfr eVVa.• 13 ld ],fw..nul se s.r.sf M :•4.1 r Me. -..el M�! nnca Neighborhood D Planning Area 13 8 14 NEIGHBORHOOD D LAND USE CONCEPT PLAN FWNOBt AVt -- _-_ wAINFAA+Ep _ 10r!' OC1VSln' 4ESICCa'IY! Sf'A6LW CIIfF NCAS'JM LYNS'(Y 9iSNfXtAN ' MiAYIM ~MCN QCNSt7Y R[SYDEMRLL CPWIAL1411 iVSdYCSS YFtt~IWJtH0A7 PMK t?M i'i.5~ rN.Y ~NI'•NF.'f ~ ~ ~ ~ ~ iA4Ri1WY ~St ~h1PF ~' CCMtAAI GrYUI PEAR ~ ..i~.w :*~4hW' 6Y~~~riLWS•Y t s + ' G~:A{ ~ PI~Pk /ANOStA/L SE tgi1L1( '~ IDGF OPCN SPJCC *A~PUIGF !J'!N 'V (I;RA ~ Lu1DSWC ACT r ~ AfCxFA'i0W ~~ P a• 1'REPARt:D RY: ~ "`~ ~ u A .~ rwaa Eausa PrgRVF HUNtiAKE.N & ASSOCIATES ' N V A N t . N f ~~-~~~M ~.M.~~~ ~ ~ww ~~nr;.y~j'I11NL1M ~ ~~ wMC w~. w Exhibit 1 !iiF "~°''""-' y"'~ ~ NEIGHBORHOOD G LAND USE CONCEPT PLAN CITY OF TUSTIN GENERAL PLAN HOUSING ELEMENT JUNE 16, 2009 66 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 TUSTIN GENERAL PLAN HOUSING ELEMENT JUNE 16, 2009 67 Figure 1 -Conventionally Zoned Vacant & Underutilized Land in the City of Tustin* CITY OF TUSTIN GENERAL PLAN HOUSING ELEMENT JUNE 16, 2009 68 Underu6l¢ed Land - Vacant Land 'Refer to table H-15 for site inforniation CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 69 JUNE 16, 2009 TABLE H-15 VACANT LAND SUITABLE FOR RESIDENTIAL DEVELOPMENTS Total Density/ Address Assessor Existing Use Zoning General Plan Lot Size Realistic Availability Environmental Constraints Utility Availability/ Parcel Number Designation Land Use Designation (acres) Development Capacity Capacity 1 170 El Camino Real 401-571-05 vacant C2 P Old Town Commercial 0.16 4 du (1) Yes no known constraints System appear available 2 140 S. A Street 401-361-03 vacant R3 High Density Residential 0.17 4 du(l) Yes no known constraints System appear available 3 225 El Camino Real 401-584-04 to Farmer's Market site C2 P Old Town Commercial 1.02 43 du (1) Yes no known constraints System appear available 401-584-09 4 El Camino Real 401-623-14 to adjacent to Armstrong C2 P Old Town Commercial 2.61 83 du (1) Yes no known constraints System appear available 401-623-16 5 1951 El Camino Real 500-071-12 City of Tustin R4 High Density Residential 0.38 4 du (2) Yes adjacent to street/freeway. Noise may be a constraint System appear available 6 Browning/El Camino Real 500-201-02 Tustin Ranch PCR PC Residential 2.67 21 du Yes no known constraints System appear available Reserve Area (Medium Low) 7 15700 Tustin Village Way Not available Former SR -55 off -ramp. Unclassified Community Commercial Not available Yes adjacent to street/ freeway. Noise may be a constraint System appear available 8 15600 Williams 402-292-19 Adjacent to R3 High Density Residential 0.26 6 du Yes no known constraints System appear available Alders Apartments 9 1776 Nisson 432-401-12 adjacent Blueboy Swimschool R3 1500 High Density Residential N/A 13 du Yes adjacent to street/ freeway. Noise may be a constraint System appear available 10 TLCP Neighborhood D Planning Areas(6) Former MCAS Tustin MCAS Tustin MCAS Tustin Specific Plan 33.47 891 du (1)(5) Yes FEIS/EIR Prepared (1) Backbone Infrastructure (4) 8/13/14 Specific Plan TLCP Neighborhood G Planning Area(,) 15 Former MCAS Tustin MCAS Tustin MCAS Tustin Specific Plan 147.2 1214 du (1)15) Yes FEIS/EIR Prepared (a) Backbone Infrastructure (4) Specific Plan 11 1052 Edinger Ave. 430-251-01 to 430-251-11 AA&E PCESP PC Commercial/ Business 5.4 (20% 27 300 du 111 Yes EIR adopted Certain infrastructure required EIR )f per Notes: *For planning purposes only - Actual capacity will be determined upon review and approval of actual development application du: Dwelling Unit (1) Mixed Use (2) Part of Street Improvement (3) FEIS/EIR has been prepared and adopted (4) Backbone infrastructure improvements are required for project implementation (5) Subject to Development Agreement (6) No specific parcel number available since the parcel has not been subdivided. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 69 JUNE 16, 2009 'ITY OF TUSTIN HOUSING ELEMENT 3ENERAL PLAN 70 JUNE 16, 2009 TABLE H-15 (CONTINUED) UNDERUTILIZED LAND SUITABLE FOR RESIDENTIAL DEVELOPMENTS Total Density/ Address Assessor Parcel Existing Use Zoning General Plan Lot Size Realistic Availability Environmental Constraints Utility Number Designation Land Use Designation (acres) Development Availability/Capacity Capacity* 1 1451 Irvine Boulevard 103-341-22 Church Pr Professional Office 2.01 30 du Yes no known constraints System appear available 2 433-435 W. First Street 401-522-27 Trailer Park FSSP PC Commercial/ Business 0.83 16 du Yes no known constraints System appear available 3 1092 Bryan 164-264-01 to 500- Winston Apartments PD High Density Residential 4.49 Yes no known constraints System appear available 112 du 4 220 El Camino Real 401-572-01 Ability Plus School C2 P Old Town Commercial 0.34 9 du (1) Yes no known constraints System appear available 5 245 "C" Street 401-572-04 Sheet Metal Shop C2 P Old Town Commercial 0.07 34 du (1) Yes historic rated structures System appear available 155 Third Street 401-572-05 Russian Ballet C2 P Old Town Commercial 0.1 300 EI Camino Real 401-573-01 Former Bank Building C2 P Old Town Commercial 0.45 115-125 W. Main Street 401-573-05 &06 Former Auto Parts Store C2 P Old Town Commercial 0.24 6 185-255 Prospect Avenue 401-581-09 Trailer Park MHP Mobile Home Park 2.9 72 du Yes no known constraints System appear available 7 230 Prospect Avenue 401-584-02 Single Family Home C2 P Old Town Commercial 0.15 10 du Yes historic rated structure System appear available 240 Prospect Avenue 401-584-03 Single Family Home C2 P Old Town Commercial 0.17 8 205 El Camino Real 401-584-11 lot north of Dr. Helm C2 P Old Town Commercial 0.17 4 du (1) Yes no known constraints System appear available 9 462-556 EI Camino Real 401-622-14 Jamestown Plaza C2 P Old Town Commercial 1.7 20 du (1) Yes no known constraints System appear available 10 14251-14351 Browning Ave 432-342-30 Apartments R4 High Density Residential 4.1 77 du yes MND prepared System appear available 11 14421-14471 Red Hill Ave 432-111-03&04 Apartments R3 High Density Residential 4 75 du yes MND adopted System appear available 420438 W. Sixth Street and 401-341-07 Industrial Park 12 620-694 S. "B" Street PM Industrial 4.2 126 du yes no known constraints System appear 550 W. Sixth Street 401-341-04 Self Storage available Votes: 'For planning purposes only - Actual capacity will be determined upon review and approval of actual development application In: Dwelling Unit PA: Planning Area 1) Mixed Use 2) Part of Street Improvement 3) FEIS/EIR has been prepared and adopted 4) Backbone infrastructure improvements are required for project implementation 5) Subject to Development Agreement iource: City of Tustin, Redevelopment Agency and Community Development Department. 'ITY OF TUSTIN HOUSING ELEMENT 3ENERAL PLAN 70 JUNE 16, 2009 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 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 71 JUNE 16, 2009 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 72 JUNE 16, 2009 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 MCAS Tustin Redevelopment Areas to CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 73 JUNE 16, 2009 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 74 JUNE 16, 2009 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 75 JUNE 16, 2009 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 76 JUNE 16, 2009 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 m;nimi~e 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 77 JUNE 16, 2009 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 KELATED GOALS AND POLICIES BY ELEM ENT Housing Land Conservation/ Public Growth Issue Area Use Housin Circulation O en S ace Safe Noise Mana ement 1.8,10.2, Housing 13.3,13.4, O ortunities 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 Housin 5.3 4.1 3.6, 9.6, Environmental 9.7, 9.8, 1.14,1.17, 3.3, 4.8, 1.11, Sensitivi 13.1 3.5 2.12, 3.1, 4.1 4.12 1.12 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 78 JUNE 16, 2009 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. 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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 79 JUNE 16, 2009 availability of government funds -local, County, State, and Federal. 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 toward achieving RHNA quantified objective. Based on units constructed, approved, or under construction, the City of Tustin has the following remaining units to achieve RHNA's construction objective: 150 Very Low 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 when affordability is achieved through: • Affordability 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 lower income units, the City may fulfill 230 lower income units (128 Very Low and 102 Low) 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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 80 JUNE 16, 2009 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 funds in the Agency's Comprehensive Affordable Housing Strategy's Six- Year Capital Plan to negotiate the preservation of these units. The City Council in their capacity as the Redevelopment Agency ("Agency') adopted the Comprehensive Affordable Housing Strategy (CAHS) in June 2008 committing up to $2,181,672 of Agency Housing Set-Aside funds for the preservation efforts of these at-risk units. As presented in Table HTM-35 of the Housing Element Technical Memorandum, the City has fulfilled a portion of its regional share for very low and low income households (472 and 192 units respectively) during the prior planning period, rendering the City eligible to utilize the alternative site program. The City is in contact with both owners regularly and has expressed interest in ensuring the continuation of these affordable units. The City 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 aHUD- requirement that they provide aone-year notice to terminate their current Section 8 contract. The earliest date affordability restrictions can expire is July 2010. The city will make every 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 July 2010, the total cost of subsidizing Tustin Gardens for the term of the Housing Element, July 2010 to June 2014, would be $2,347,200. Rancho Maderas, Rancho Alisal and Rancho Tierra are California Statewide Communities Development Authority bond-funded projects with affordability restrictions expiring May 25, 2012. Begiruung June 2012, the estimate for subsidizing rents at Rancho Maderas, Rancho Alisal, and Rancho Tierra is $61,671 per month, and $740,052 annually. The total cost of subsidizing rents for twenty-five months, June 2012 to June 2014, would be $1,541,775. The total cost for subsidizing rents at all four at-risk projects would be $3,888,975. The following tables illustrate the required subsidies for At-Risk projects. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 81 JUNE 16, 2009 Tustin Gazdens -July 2010 to June 2014 (48 months) Very Low Income Units (50%AMI) Bedroom Fair Hhld 2009 Hhld Very Low Maximum Affordability Total Monthly Total Annual Size # Units Market 1 Size Income (50% Affordable Gap/Per Unit Affordability Affordability Rent AMI Rentz Ga Ga p 1 Bdrm 100 $1,296 2 $34,450 $807 $489 $48,900 $586,800 TOTAL Potential Affordability Gap -Tustin Gazdens, $2,347,200 100 Units (48 months) Rancho Maderas, Rancho Alisal, & Rancho Tierra -June 2012 to June 2014 (25 months) Very Low Income Units (50%AMI) Bedroom Fair Hhld Very Low Maximum Affordability Mo thly Total Annual Size # Units Market 1 Size Income (50% Affordable Gap/Per Unit Affordability Affordability Rent AMI Rentz Ga Ga p 1 Bdrm 11 $1,296 2 $34,450 $807 $489 $5,379 $64,548 2 Bdrm 17 $1,546 3 $38,750 $901 $645 $10,965 $131,580 Potential Affordability Gap -Very Low Income, $408,600 28 Units (25 months) Low Income Units (60%AMI) Bedroom Fair Hhld 2009 Hhld Maximum Affordability Total Monthly Total Annual Size # Units Market 1 Size Low Income Affordable Gap/Per Unit Affo bility Affordability Rent (60% AMI) Rentz Ga Gap 1 Bdrm 5 $1,296 2 $41,340 $980 $316 $1,580 $18,960 2 Bdrm 97 $1,54b 3 $46,500 $1,095 $451 $43,747 $524,964 Potential Affordability Gap -Low Income, 102 Units (25 months) $1,133,175 TOTAL Potential Affordability Gap -Rancho Apts, 130 Units (25 months) $1,541,775 TOTAL POTENTIAL AFFORDABILITY GAP - 230 Units $3,888,975 1 SOURCE: FY 2009 Proposed Fair Market Rents for Existing Housing, Orange County, Federal Register/Vol. 73, No. 189, page 56646, September 29, 2008 z Affordable Monthly Rent is 30% of 2009 Household Income Level divided by 12 months, less Utilities (assume all Electric, see Utility Allowance Schedule, effective October 1, 2008, published by Orange County Community Services), 2009 Income Limits, published by the California Depaztment of Housing and Community Development - Apri12009 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 82 JUNE 16, 2009 In order to fund the difference between the potential affordability gap of $3,888,975 identified in the above Tables, "Required Subsidies for At-Risk Projects" and the potential $2,181,672 in Redevelopment funds programmed in the Agency's Comprehensive Affordable Housing Strategy, the City 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, very-low income Senior Project. The City would work with the current owner to establish anon-profit affordable housing entity to apply for 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 affordability gap of $2,347,200 would be eliminated and City subsidies would not be required. The City would commit $1,541,775 to fund the potential affordability gap at Rancho Maderas, Rancho Alisal and Rancho Tierra. This would leave a balance of $639,897 in Redevelopment funds, which would be available if needed. Although the City projects adequate funding to preserve the 230 at-risk units, the City will pursue all other funding sources to augment funding already set aside for these affordable housing projects. The back-up documentation for this analysis includes the following: 1) Gap Analysis for the 230 Units; 2) Tustin Community Redevelopment Agency Pro Forma Analysis; and 3) Comparable Sales Analysis for Determination of Tax Credit/ Bond. Financing of Tustin Gardens can be found in Appendix E of the Technical Memorandum. Another way rent subsidies could be structured is as a rent buy- down. This would involve the Agency providing a one-time assistance loan to the property owner to cover the present value of the decrease in rents associated with the extended affordability 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 funds 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 is probably not viable at this time, the City 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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 83 JUNE 16, 2009 later than July 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 enforceable agreement by July 1, 2011, the City will recommend an amendment to the Housing Element within aone-year timeframe, identifying additional sites needed to accommodate the number of affordable units not preserved by enforceable agreements. While the Comprehensive Affordable Housing Strategy identified $2,181,672 in Redevelopment funds for the period of July 1, 2008 through June 30, 2014, the expenditure of Redevelopment funds 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). Although actual entitlement for the construction of the remaining units have not been granted13, 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 is 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 84 JUNE 16, 2009 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 vary 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. 2007-2008 Average 2007-2008 Average 2007-2008 Average Income Level Fair Market Price Affordable Promissory Note Purchase Price 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 Legacy 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 for 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 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. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 85 JUNE 16, 2009 • 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 Multi-family 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. In addition, based 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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 86 JUNE 16, 2009 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. TABLE H-17 NEW CONSTRUCTION QUANTIFIED OBJECTIVES SUMMARY CITY OF TUSTIN 2006-2014 Extremely Total # Low and Low Moderate Upper Pro am ~ of Units Very Low a (<80%) (80-120%) (120%+) <50% NEW CQNSTRUCTI©N MCAS Tustin Housin Unitsl Nei hborhood D 891 53 53 90 695 Nei hborhood G 1,214 73 42 142 957 Units Constructed z 1176 2355 57 60 824 Units A roved/Under Construction 2 990 1276 74 161 628 Preservation3 230 128 102 Grann Flats 5 5 New Owner Housin 79 64 15 Second Unit 5 5 Recycling of SF uses to MFD in R-3 district 8 8 Total Quantified Ob'ectives 4,598 616 410 468 3104 RHNA 2381 512 410 468 991 Difference 2,217 104 0 0 2,113 1 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. 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 See Table H-13 and associated discussion for project details. ' Pursuant to State Law, up to 25 percent of the lower income RHNA may be fulfilled with existing housing 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.{ Pursuant to Government Code Section 65583(a)(1), City's share of extremely-low income units is 225 (44 percent of the RHNA Very Low income households new construction otrjective). 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 s Includes 192 Extremely Low Income units (Village of Hope) 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 87 JUNE 16, 2009 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 88 JUNE 16, 2009 TABLE H-18 REHABILITATION, PRESERVATION, AND OTHER AFFORDABLE HOUSING QUANTIFIED OBJECTIVES SUMMARY CITY OF TUSTIN 2006-2014 Program Category Total # Very Low Low Moderate Upper of Units (<50 /o) (<80 /o) (80-120 /o) (120 /o+) RFfdARii TTATTnN Sin le and Multi-Famil Rehab Sin le Famil 54 32 16 6 Multi- Famil 108 21 21 66 Multi-Family Rental Ac uisition/Rehab/Conversion/Resale 31 31 Total Rehabilitation 193 53 68 72 va~eFUVS~nu Tustin Gardens 100 100 Rancho Alisal 72 18 54 Rancho Maderas 54 14 40 Rancho Tierra 51 13 38 Total Preservation 277 145 132 (1'i'FTFR AFFnRi7ARi.F N[?7SiNF: 15t Time Homebuyer and/or Foreclosure Ne otiated Purchase 30 5 10 15 Section 8 Rental Voucher Assistance 1,500 1,500 Shared Housin Referrals 75 50 25 Homeless Housin Partnershi Pro ram 242 242 Emer enc Shelter 282 282 Total Other Pro ams 2,129 2,079 35 15 Source: Effectiveness of Housing Programs 1998-2008, City of Tustin; Five Yeaz Implementation t'tan for the Town Center and South Central Redevelopment Project Areas for Fiscal Years 2005-06 to 2009-10; Comprehensive Housing Affordability Strategy for Fiscal Yeazs 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 44 percent of the Low Income need, or 225 units based upon the percentage of extremely-low income households contained in the regional housing needs assessment determined by SCAG using census data as the baseline. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 89 JUNE 16, 2009 TABLE H-19 SUMMARY OF QUANTIFIED OBJECTIVES CITY OF TUSTIN 2006-2014 Income Grou RHNA New Construction Rehabilitation/ Preservation Other Pro ams Ve Low 287 334 70 2,079 Extremel -Low 2251 2822 Low 410 410 982 35 Moderate 468 468 72 15 Above Moderate 991 3,104 0 -- Total 2,381 4,598 240 2,129 ~ Pursuant to Government Code Section 65583(al(11. Citds s hare of extremely-low inmmP unite is 225 (44 percent of the total Very Low Income 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 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 90 JUNE 16, 2009 TABLE H- 20 LOW AND MODERATE INCOME HOUSING SET ASIDE FUNDS PROJECTIONS FY 2007/08 TO 2017/18 Estimated Balance as of 06/30/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 TOTALS 20% Set aside Tax Increment Revenues (1) 20% Set aside from Town Center Project Area $6,538,996 $827,197 $835,968 $865,227 $895,510 $926,853 $959,293 $992,868 $1,027,618 $1,063,585 $1,100,810 $1,139,339 $10,634,268 20% set aside from South Central Project Area $8,068,518 $813436 $828569 $857,569 $887,584 $918,649 $918,649 $984,080 $1,018,523 $1,054,171 $1,091,067 $1,129,254 $10,533,704 20% set aside from MCAS Tustin Project Area $3,252,979 $,2072,917 $3,306,096 $4,897,544 $5,525,186 $6,699,892 $7,316,224 $7,654,288 $7,845,592 $8,076,456 $8,398,388 $8,649,898 $70,442,481 Subtotal, 20% Set aside Fund Revenue $17,860,493 $3,713,550 $4,970,633 $6,620,340 $7,308,280 $8,545,394 $9,226,319 $9,631,236 $9,891,733 $10,194,212 $10,590,265 $10,918,491 $91,610,453 Interest/Earnings (2007/08 Only)(5)(6) Town Center Project Area $124,920 TBD TBD TBD TBD TBD TBD TBD TBD TBD TBD $124,920 South Central Project Area $477,373 TBD TBD TBD TBD TBD TBD TBD TBD TBD TBD $477,373 MCAS Project Area $105,542 TBD TBD TBD TBD TBD TBD TBD TBD TBD TBD $105,542 Subtotal, Interest Earnings $707,835 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $707,835 Operating Expenses, 20% Set -Aside Fund (3) Operating Expenses, Town Center Project Area $284,265 $294214 $304,512 $315,170 $326,201 $337,618 $349,434 $361,664 $374,323 $387,424 $400,984 $3,735,809 Operating Expenses, South Central Project Area $181,572 $187,927 $194,504 $201,312 $208,358 $215,651 $223,198 $231,010 $239,096 $247,464 $256,125 $2,386,217 Operating Expenses, MCAS Project Area $181,448 $187,799 $274,372 $301,809 $331,990 $343,609 $355,636 $368,083 $380,966 $394,300 $408,100 $3,258,112 Subtotal, Operating Expenses $647,285 $669,940 $773,388 $818,291 $866,549 $896,878 $928,268 $960,757 $994,385 $1,029,188 $1,065,209 $9,650,138 City Loan Payments (4) City Loan Payment, Town Center Project Area $720,000 $5,000,000 $2,500,000 $888,201 $104,316 $446,259 $247,562 $0 $0 $0 $0 $9,906,338 City Loan Payment, South Central Project Area $1,834,375 $5,000,000 $2,500,000 $3,621,249 ($1,874,571) $911,918 $333,241 $0 $0 $0 $0 $12,326,212 City Loan Payment, MCAS Tustin Project Area $3,460,000 $4,500,000 $5,000,000 $490,550 $6,770,255 $3,641,824 $2,632,944 $0 $0 $0 $0 $26,495,573 Subtotal, City Loan Payments $6,014,375 $14,500,000 $10,000,000 $5,000,000 $5,000,000 $5,000,001 $3,213,747 $0 $0 $0 $0 $48,728,123 Net Revenues Available for Housing Projects/Programs (6) Town Center Project Area ($52,148) ($4,458,246) ($1,939,285) ($307,861) $496,336 $175,416 $395,872 $665,954 $689,262 $713,386 $738,355 ($2,882,959) South Central Project Area ($725,138) ($4,359,358) ($1,836,935) ($2,934,977) $2,584,862 ($176,767) $427,641 $787,513 $815,075 $843,603 $873,129 ($3,701,352) MCAS Tustin Project Area ($1,462,989) ($1,381,703) ($376,828) $4,732,827 ($402,353) $3,330,791 $4,665,708 $7,477,509 $7,695,490 $8,004,088 $8,241,798 $40,524,338 Subtotal, Net Revenues ($2,240,275) ($1,0199,307) ($4,153,048) $1,489,989 $2678,845 $3,329,440 $5,489,221 $8,930,976 $9,199,827 $9,561,077 $9,853,282 $33,940,027 Annual Total All Project Areas ($2,240,275) ($10,199,307) ($4,153,048) $1,489,989 $2678,845 $3,329,440 $5,489,221 $8,930,976 $9,199,827 $9,561,077 $9,853,282 $33,940,027 PROJECTED FUND BALANCE, BEFORE $17,860,493 $15,620,218 $5,420,911 $1,267,863 $2,757,852 $5,436,697 $8,766,137 $14,255,358 $23,186,334 $32,386,161 $41,947,238 $51,800,520 INTEREST AND PROGRAM/PROJECT CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 91 JUNE 16, 2009 (1) FY 2008/09 figures are budgeted. Thereafter, South Central and Town Center Project Area tax increment growth projected at 3.5% annually. MCAS Project Area tax increment growth is based on calculations from Taussig & Associates Consulting Group, adjusted to reflect a one year delay in the implementation schedule. FY 2007/08 only. (2) Between fiscal years 1985/86 and 1991/92, the Tustin Community Redevelopment Agency deferred a total of $2,776,042 from the Town Center Project Area's low and moderate income housing obligations. On February 1, 1993, the Agency adopted a plan to eliminate the deficit in subsequent years. Through the budget process, the Finance Director will make decisions about the loan re -payment to the Housing Set - Aside fund. (3) Operating expenses are projected to increase at 3.5% annually, except for a 10% annual increase in the MCAS project area for each of FY 2010/11 and FY 2011/12. In addition, in FY 2009/10, an additional $320,000 in operating expenses is allocated as a result of expenses previously assigned to the Tustin Legacy Enterprise Fund. The Enterprise Fund closes at the end of FY 2008/09 and the additional expenses will be allocated to the WAS Expenditure Accounts. Of the $320,000,25% (or $80,000) is assigned to the WAS Set Aside Fund in FY 2009/10. (4) Payments from the Agency Set -Aside Fund to the City of $48,728,123 based on an agreement between the Redevelopment Agency and the City regarding Tustin Legacy. These funds are assigned to pay for specific CIP projects. CIP priorities and costs can change annually as could the projected payment amounts by year. Starting in 2010/11, City loan payments are distributed proportionately among the three Project Areas based on each Project Area's previous year's fund balance. Between 2007/08 and 2010/11, payments are based on immediate needs. Loan payments are projected to end on 2013/14. (5) Includes interest, rental income and loan proceeds budgeted for FY 2007/08 only. (6) Excludes interest earnings on the tax increment housing set-aside fund balance beyond FY 2008/09. The Agency projects interest earnings at 3 percent annually. Actual interest earnings will depend on the rate of expenditures on affordable housing projects/ programs. Source: Tustin Redevelopment Agency; Tustin Community Development Department; Comprehensive Affordable Housing Strategy 2008-2018. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 92 JUNE 16, 2009 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 Summary 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 are as follows: • 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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 93 JUNE 16, 2009 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 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. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 94 JUNE 16, 2009 • 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. 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. • 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. • 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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 95 JUNE 16, 2009 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 identify 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 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 MCAS 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 aten-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 funded 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). CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 96 JUNE 16, 2009 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 uz FY 2008/09 in the MCAS Tustin Redevelopment Project Area, is building 153 affordable units as a result of City density bonus incentives. 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. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 97 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN Local Resavrces Program Description Eligible 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 payment 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. Rental Housing Financial assistance for • Acquisition Program affordable multi-family rental projects. • Rehabilitation • New Construction Density Bonus The City allows an increase • Density Bonus 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. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 98 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN Tax-Exempt Bonds The Redevelopment • New Housing Agency and the City have Development the authority to issue tax- exemptbonds. The City is • Rental Acquisition/ also a member of California Rehabilitation Statewide Communities Development Authority. Bond proceeds are used to develop affordable housing. City/Agency Owned If available and • Housing Land appropriate, City or Redevelopment Agency • Community Facilities owned land may be made available Stag Resctttrcea CalHome Enable low and very-low • Predevelopment, site income households to development, and site become or remain acquisition for homeowners development projects. California Self-Help Housing Technical Assistance Allocation Program (CalHome Self-Help) Fund programs that assist low and moderate income families to build their homes with their own labor • Rehabilitation, and acquisition and rehabilitation, of site-built housing, and rehabilitation, repair and replacement of manufactured homes. • Downpayment 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 99 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN Affordable Housing Innovation Program: Loan Fund Provide quick acquisition financing for the development or preservation of affordable housing • Property Acquisition 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 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. • 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 homebuyers. Construction oversight and monitoring activities, including video recording of construction work, quality control manuals, and quality control inspections. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 100 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN Building Equity and Growth in Neighborhoods Program (BEGIN) Reduce local regulatory barriers to affordable ownership housing, and provide downpayment assistance loans to qualifying first-time low- and moderate-income buyers of homes in BEGIN projects Second mortgage loans for downpayment 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 Emergency Housing and Assistance Program Capital Development (EHAPCD) Emergency Housing Assistance Program (EHAP) Fund capital development activities for emergency shelters, transitional housing, and safe havens that provide shelter and supportive services for homeless individuals and families. Provide facility operating grants for emergency shelters, transitional housing projects, 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). 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). CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 101 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN Enterprise Zone Programs (EZs) Stimulate business investment and job creation for disadvantaged individuals in state- designated economically distressed areas of California 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 (MEAs), and Local Agency Military Base Recovery Areas (LAMBRAs). 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 102 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES Multifamily Housing Program: General Component (MHP-General) Multifamily Housing Program: Supportive Housing Component (MHP- SH) CITY OF TUSTIN 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 lawfully restricted to senior citizens. Priority points will be given to projects using sustainable building methods that are established in state regulations 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. 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 necessary onsite and offsite improvements; reasonable fees and consulting costs; and capitalized reserves CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 103 JUNE 16, 2009 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; TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN Multifamily Housing Program: Homeless Youth Component (MHP- HY) Predevelopment Loan Program (PDLP) 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. 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 104 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN Transit-Oriented Development Housing Program (TOD) 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 information systems CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 105 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN Proposition 1C Federal Emergency Shelter Grant Program (FESG) Proposition 1C is the successor to Proposition 46 which authorized 2.1 billion in State bonds for a variety of new housing investments. Proposition 1C authorized $2.85 billion more General Obligation bonds to continue several bond-funded housing assistance programs, and begin new programs to improve infrastructure in support of housing. Fund emergency shelters, services and transitional housing for homeless individuals and families. • MHP • CalHome • MHP-SH • Serna • BEGIN • EHAPCD • TOD • MPH • Infill Housing • Affordable Housing Innovation • Ca1HFA • Parks • 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. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 106 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCESi CITY OF TUSTIN Governor's An interagency effort to • New construction, Homeless Initiative reduce homelessness by rehabilitation, acquisition (GHI) funding development and rehabilitation of permanent rental of permanent supportive housing, and conversion housing for persons with of nonresidential severe mental illness structure to rental housing. who are chronically • Projects must have DMH homeless 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. HOME Investment Assist cities, counties and • Rehabilitation, new Partnership Program nonprofit community construction, and (HOME) housing development acquisition and rehabilitation of single- organizations (CHDOs) to family and multifamily create and retain affordable housing projects, and housing predevelopment loans by CHDOs. • All activities must benefit lower-income renters or owners CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 107 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN Infill Infrastructure Fund infrastructure Grant Program improvements to facilitate new housing development in residential or mixed use infill projects and infill areas California Housing Finance Agency (CHFA) Multiple Rental Housing Programs California Housing Rehabilitation Program California Housing Finance Agency Home Mortgage Purchase Program Below market rate financing offered to builders and developers of multiple family and elderly housing. Tax-exempt bonds provide below-market mortgage money Low interest loans for the rehabilitation of substandard homes owned and occupied by lower- income households. City and non-profits sponsor housing rehabilitation projects. CHFA sells tax-exempt bonds to provide below- market loans to first time homebuyers. Program is operated through participating lenders that originate loans purchased by CHFA 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 streetscape improvements • New Construction Rehabilitation/ Acquisition • Rehabilitation • Repair of Code Violations • Property Improvements • Homebuyer Assistance CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 108 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN California Housing Finance Agency HELP Program Low Income Housing Tax Credit (LIHTC) County Statewide Communities Program Unsecured loan from CHFA to provide affordable housing opportunities through program partnership with local government entities. Tax credits available to individuals and corporations that invest in 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 The City of Tustin is now a direct member of the program through a Joint Powers Authority and can participate directly. • Acquisition • Rehabilitation • Infill • Predevelopment • New construction • Code Enforcement • Rehabilitation/ Acquisition • New Construction • Multi-family Housing • Private Mortgage Revenue Bonds • Acquisition • Rehabilitation CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 109 JUNE 16, 2009 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 projects. • 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 110 JUNE 16, 2009 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 Federal Resaurae -Fartittement: Community Entitlement program that is . Section 108 Loan Development Block awarded to the City on a Repayments Grant (CDBG) formula basis. The objectives are to fund . Public Services Activities housing activities and . Historic Preservation expand economic opportunities. Projects • Admin. & Planning must meet one of three • Code Enforcement national objectives: benefit low- and moderate-income • Public Facilities persons; aid in the Improvements prevention or elimination . Housing Activities of slums or blight; or meet other urgent needs. • Economic Development • Rehabilitation 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 Orange. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 111 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN HOME Investment Partnership (HOME) Program Emergency Shelter Grants (ESG) • Supportive Services Housing Opportunities for Persons with AIDS (HOPWA) Grant program for housing. The intent of this program is to expand the supply of decent, safe, and sanitary affordable housing. HOME is designed as a partnership 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 Annual grant funds are allocated on a formula basis. Funds are intended to assist with the provision of shelter and social services for homeless Funds are made available countywide for supportive social services, affordable housing development, and rental assistance. • Multi-Family Acquisition/ Rehab • Single-Family Homebuyer Assistance • CHDO Assistance • Administration • Rental Assistance • Homelessness Prevention (acquisition, new construction, rehabilitation, conversion) • Operating Expenses • Rental Assistance • Supportive Social Services Shelter Plus Care Program (S+C) Supportive housing and services for persons with disabilities-grants for rental assistance offered with supportive services to homeless with disabilities and disabled households. • Administration • Rental Assistance CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 112 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCESi CITY OF TUSTIN Federal Resources -Competitive Supportive Housing Grants to improve quality • Acquisition Grant of existing shelters and . Rehabilitation transitional housing. Increase shelters and • New Construction transitional housing facilities for the homeless Section 8 Rental Rental assistance program • Rental Assistance Assistance 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. Section 202 Grants to non-profit • Acquisition developers of supportive housing for the elderly • Rehabilitation • New Construction • Rental Assistance • Support Services Section 811 Grants to non-profit • Acquisition developers of supportive ~ Rehabilitation housing for person with disabilities, including • New Construction group homes, independent living facilities and • Rental Assistance intermediate care facilities HOPE Homeownership assistance • Homeownership of awarded on a competitive Multi-family units (HOPE basis requires non-federal 2) matching funds. • Homeownership of Single-family homes (HOPE 3) CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 113 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN McKinney Act Grants to develop • Transitional Housing Supportive Housing supportive housing and Program (SHP) services and services that • Permanent Housing For will enable homeless Homeless With people to live as Disabilities independently as possible. • Supportive Services, such as child care, employment assistance and outpatient services for the homeless Section 8 Moderate Funds to rehabilitate • Rehabilitation Rehabilitation single-room units within a Single Room building of up to 100 units. ~ New Construction Occupancy Program The provision of (SRO-Section 8) supportive services is optional. Small Projects Mortgage Insurance • Acquisition Processing (SPP)- program for small multi- (221 (d)(4) and 223 (f) family new construction or ~ Rehabilitation substantial rehabilitation New Construction (221)(d)(4) and small multi- family rehabilitation Section 108 Loan Provides loan guarantee to • Acquisition CDBG entitlement jurisdictions for pursuing • Rehabilitation large capital improvement • Home Buyer Assistance or other projects. The jurisdiction must pledge its • Homeless Assistance future CDBG allocations • Public Improvement for loan repayment. Maximum loan amount can • Economic Development be up to five times the ' . Relocation, clearance, site entitlement jurisdiction s most recent approved improvements annual allocation. Maximum loan term is 20 twenty years. HUD Mortgage Mortgage Insurance for • Acquisition Insurance for purchase or refinance of Purchase/ Refinance existing multifamily New Construction projects. • Operation Administration CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 114 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN HUD Rehabilitation Loans for Multifamily Projects Provides mortgage insurance for improvements, repairs, or additions to multi-family projects. • Energy Conservation • Rehabilitation Disposition of HUD Mulitfamily Housing HUD Single-Family Property Disposition Program Homeless Providers Grant and Per Diem Program 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. Sells HUD-acquired single- family properties to 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. Provides grants to develop programs that help veterans recover from homelessness, including establishing transitional housing and supportive services for homeless veterans. • Acquisition • New Construction • Operation Administration • Preservation • Acquisition • Rehabilitation • Acquisition • Operation Administration • Single Room Occupancy Hotels • Social Services • Transitional Housing CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 115 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN Private Re~urces Federal National Mortgage Association (Fannie Mae) Federal Home Loan Mortgage Corporation (Freddie Mac) Community Home Buyer Program -Fixed rate Mortgages Community Home Improvement Mortgage Program -Mortgages for both purchase and rehabilitation of a home Fannie Neighbor -Under served low-income minorities are eligible for low down-payment mortgages for the purchase of single family homes Purchases/secures high loan to value ratio single- family home purchase loan to assist low income families Rehabilitation Mortgages Program insured mortgages for property acquisition and rehabilitation • Homebuyer Assistance • Homebuyer Assistance/ Rehab • Expand Home Ownership for Minorities • Homebuyer Assistance • Acquisition • Rehabilitation CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 116 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN Assistance to low income minority neighborhoods, including the construction, 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. California Community Reinvestment Act (CRA) Federal Home Loan Bank Affordable Housing Program 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 11~ District costs of funds. Direct subsidies to non- profit and for-profit developers, and public agencies for affordable low-income ownership and rental projects California Organized Provides financing for • Affordable housing Investment Network affordable rental or financing (COIN) ownership housing. • New Construction • Rehabilitation • Acquisition • New Construction CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 117 JUNE 16, 2009 • Expand Home Ownership for Lower Income Persons TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN McAuley Institute Revolving Loan fund and technical assistance to build or rehabilitate housing. Mercy Loan Fund Neighborhood Housing Services 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. • 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 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 118 JUNE 16, 2009 TABLE H- 21 AFFORDABLE HOUSING RESOURCES) CITY OF TUSTIN World/BRIDGE Provides lower-interest • New Construction Initiative construction financing for affordable or mixed- ~ Rehabilitation income rental housing or • Acquisition affordable home ownership through a consortium of World Savings/Calpers/Wells Fargo/Bank of America 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 Clearinghouse 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. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 119 JUNE 16, 2009 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 120 JUNE 16, 2009 Program Goal 1: Adequate Housing Supply TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Responsible Agency I Funding Source I Quantified Objective I Timeframe 1.1 Available Sites Continue to utilize Planned Community City General Fund; Assist in the development of new On-going Community Districts and Specific Plans to authorize and Development Redevelopment affordable owner and rental encourage mixed-use developments. (See Zoning Studies Department, Agency Funds; City housing through development in Program). Redevelopment and Agency staff time MCAS - Tustin and infill areas. Agency, City Council involved The City supports applications for Housing Element Policies: 1.1,1.8,1.11 the creation of new mixed-use developments particularly when the projects involve affordable housing 1.2 Mobile Homes Community City General Fund; The City will continue to maintain Process applications Development processing fees the existing mobile home park as received in a Continue to maintain the City's mobile home park zone Department, City (recoverable) zone. timely manner and process conditional use permit applications as received Council for manufactured homes. Housing Element Policies: 1.1, 1.3 1.3 Secondary Residential Units Community City processing fees The City has updated its Zoning Process applications Development (recoverable) Code to allow second units to be as received in a Continue to provide opportunities for affordable secondary Department, City developed within Single Family timely manner residential dwelling units in the Single-family Residential Council zoned properties without the need District lots where feasible through existing Zoning Ordi- for any discretionary actions. nance provisions. During the planning period, five Housing Element Policies: 1.1, 1.7,1.13 (5) second units are anticipated. 1.4 Deed Restrictions Community 1) Tax -Exempt All affordable housing created Include conditions of Development Mortgage Revenue during the planning period will be approval at Require appropriate deed restrictions to ensure continued Department, required to record deed restriction I entitlement and CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 121 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe affordability for low- or moderate -income housing Redevelopment Bonds to ensure continued affordability requires recordation constructed or rehabilitated with the assistance of any Agency, City Council for a minimum of 45 years. of deed restriction public or Redevelopment Agency funds as may be legally 2) Redevelopment prior to issuance of required. Agency Housing Certificate of Set -Aside Funds Occupancy for Housing Element Policies: 1.1 affordable units. 1.5 Pre -application Conferences Community City General Fund; Continue On-going Development City processing fees Continue to utilize procedures for pre -application Department (recoverable) conferences and processing procedures to expedite permit processing. Housing Element Policies: 1.11 1.6 Permit Processing for Low- and Moderate Community City General Fund; Continue Process application Income Housing Development City processing fees in a timely manner (recoverable) Ensure that processing of permits for low- and moderate - income housing are fast -tracked with low- and moderate - income housing permits being given priority over other permit applications. Housing Element Policies: 1.11 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 122 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe 1.7 Permit Coordination Community City General Fund; Processing of approximately 10 By 2014 Development City processing fees new residential projects annually, Continue the services of the City's Community (recoverable) 50 projects by 2014 Development Department as a central clearinghouse with individuals assigned the responsibility of expediting development permits required from various departments and agencies. Housing Element Policies:.1.11 1.8 New Owner Housing using Tax Increment Redevelopment Agency $11,126,686 of the Assist 79 units by 2014 By 2014 Financing Redevelopment Agency Housing Set - Provide housing set-aside tax increment funds generated Aside Funds have from the Redevelopment Projects, where available, to assist been earmarked in providing housing accommodations for low- and moder- ($4,363,343 ate -income households in new construction projects. Ownership Multifamily New Housing Element Policies: 1.6, 1.12, 3.2, 4.2 Construction, $4,363,343 Multifamily Rental New Construction, $2,400,000 First time homebuyer and/or Foreclosure Negotiated Purchase) 1.9 Housing for the Disabled Community State and Federal Refer individuals to agencies On-going; Development programs; City's providing supportive housing that implement Require new multi -family housing units and apartment Department General Fund. accommodates independent living. requirements of SB conversions to condominiums to comply with State Add procedures and/or undertake 520 on continuous specifications pursuant to SB 520 for accommodation of the appropriate amendments to basis. existing standards to ensure CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 123 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe disabled. The City will conduct analysis, add procedures, compliance with SB 520. and/or undertake appropriate amendments to existing standards and complying 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. Housing Element Policies: 1.13, 1.15 1.10 Transitional Housing Various Non -Profit Variety of private • Promote, assist, and facilitate On-going assistance Organizations, funds; CDBG funds the development of emergency to local non -profits Encourage the continuation of the Sheepfold homes and and transients' shelters through and adopt of SRO Laurel House in Tustin, which provide housing facilities for Redevelopment continued support of the Ordinance by 2014. battered homeless women and children. These homes are Agency, Community County Homeless Assistance located in single-family neighborhoods and provide a Development Program much-needed service for homeless women and children. In Department addition, explore additional program options to assist in • Support local agencies that the provision and funding for other programs such as provide homeless services by transitional housing and single room occupancy housing. providing financial assistance of approximately $5,000-$10,000 Housing Element Policies: 1.15, 1.16 annually. • Consider the adoption of a Single Room Occupancy Ordinance to facilitate the development of SRO units. 1.11 Temporary Housing for Homeless County of Orange, CDBG funds, HUD • Provide 192 emergency housing The MCAS Tustin Redevelopment Agency SHP funds units to single men and women Specific Plan The City will also support countywide efforts to assist at Tustin Legacy (Orange provided sites and approved homeless providers as part of the MCAS Tustin County Rescue Mission). designated land uses Reuse effort. to accommodate the identified homeless CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 124 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe needs. Asa result Housing Element Policies: 1.14, 1.15 • The City plans to assist 200 the following have individuals by means of been accomplished: integrating counseling, education, job -training and The 192 emergency other techniques to stop the housing to be cycle of homelessness. operated by the Rescue Mission was • Provide 24 units of transitional recently completed housing for families (operated in 2008. by Salvation Army) A total of 48 • Provide 6 units of transitional transitional homes housing for women and were conveyed to children (operated by Human Salvation Army, Options -Dove Housing) Human Options, Orange Coast • Provide 6 units- in long-term 12- Interfaith Shelter, 24 months -transitional housing and Irvine for families with children Temporary Housing (operated by Orange Coast at no costs before Interfaith Shelter) 2008. • Provide 14 units of transitional The City approved housing to families with an increase in the children who are homeless due capacity for the to a short or temporary financial Orange County hardship (operated by Families Social Services Who Care, formerly Irvine (Orangewood) from Temporary Housing) 60 beds to 90 beds. The project is • Provide for a 60 -unit expansion currently under of Orangewood Transitional construction. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 125 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe Housing for children (operated The City through by the County of Orange) CDBG funds would provide assistance to support non-profit organization annually. 1.12 Implementation Program Redevelopment Agency Redevelopment Fund Review within legal time frames • Mid -review of the Town Center and The Redevelopment Agency will review Implementation South Central Plan for each project area and Comprehensive Housing Redevelopment Affordability Strategy as required by Redevelopment Law Project areas Third and adjust as necessary. Five Year Implementation Housing Element Policies: 1.12, 3.2 Plan (FY 2205-06 to FY 2009-10) was completed in June 2008 • Five-year review of the Town Center and South Central Redevelopment Project areas Implementation Plan (Fiscal Years 2005-2006 to 2009- 2010) to be completed in 2010 • The Second Five - CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 126 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe Year Implementation Plan (FY 2008-09 through FY 2012- 13) for the MCAS Tustin Redevelopment project area was adopted by the City Council and Redevelopment Agency on August 15, 2008 • The City adopted a Comprehensive Housing Affordability Strategy in conjunction with the housing element in June 2008. 1.13 Housing Opportunities for all Economic Private Developers in City General Fund; Monitor 177affordable units in The City will initiate Segments East Tustin, Staff time East Tustin negotiation with Monitor the implementation of the affordable housing Community Develop- property owners program adopted as a part of the East Tustin Specific Plan. ment Department prior to expiration Housing Element Policies: 1.1, 1.8,1.9, 1.10 date of the affordable covenants of the 174 affordable units in East Tustin in May 2012. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 127 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe 1.14 Bonding Programs Redevelopment Agency State and Municipal Complete analysis of available On-going Bonds; Private Activity programs on as needed basis. Issue Redevelopment tax-exempt bonds, as necessary, to Mortgage Bonds accomplish Five -Year Quantified Objectives with such Revenue issued by issuance conditioned on having projects ready to move California Statewide forward. Also utilize other housing revenue bond Communities financing resources and Low Income Housing Tax Credits Development on new construction and acquisition/ rehabilitation projects Authority and others; that help meet the City's affordable housing needs. California Low -Income Housing Tax Credits; Housing Element Policies: 1.12, 3.3 variety of other sources 1.15 Economic Integration within Sphere of County of Orange City General Fund; Ongoing request to both agencies. On-going Influence Staff time Request that the Orange County Planning Commission and the Environmental Management Agency (EMA) notice the City of Tustin of any proposed development activities within Tustin's sphere of influence. Housing Element Policies: 1.1,1.4, 1.5 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 128 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe 1.16 Senior Citizen Housing Redevelopment $2,181,672 of the Preservation of 100 at -risk units at The City is in contact Agency; Community Redevelopment Tustin Gardens. with the owner of Continue to identify sites that are suitable for senior Development Agency Housing Set- Tustin Gardens who citizens housing projects. These sites will be promoted for Department Aside Funds has been expressed interest in private development and applications will be made for any earmarked to fund the entering into an available subsidy funds. preservation effort; agreement to HELP; Low -Income preserve the 100 Housing Element Policies: 1.1, 1.13,1.15 Housing Tax Credits; senior affordable Private Activity Bonds housing units in July issued by California 2009. The City Statewide and others monitors the project on ongoing basis. 1.17 Senior Services Program Parks and Recreation City General Funds Assist 850 elderly annually On-going Department Develop a comprehensive transportation program, case management, information and referral, and shared housing program. Housing Element Policies: 1.15, 2.3 1.18 Recycling Single -Family Uses in R-3 Zones Into Community City General Fund and Eight (8) housing units are Support application Multiple -Family Units Development Redevelopment anticipated as received Department Agency Funds; Staff Continue to encourage developers to consolidate individual time lots into larger cohesive developments. Density bonuses may be considered as an incentive to consolidate lots. Housing Element Policies: 1.11 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 129 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe 1.19 Ongoing Review of Housing Element Programs Community City General Fund; Prepare Annual Report to the Submit Annual Development Staff time Planning Commission and the City Report to HCD by From the date of adoption of the Housing element, prepare Department Council annually. April 1 each year. an annual report to the Planning Commission assessing previous years' accomplishments toward meeting Housing Element objectives. Submit the Annual Report to the State HCD. Housing Element Policies: all policies 1.20 Consolidated Plan Community Variety of local, State, Prepare Consolidated Plan in 2010 Prepare Development and Federal funding; Consolidated Plan in The City of Tustin shall prepare an update of the Department City General Fund and 2009 Consolidated Plan that provides a comprehensive Redevelopment assessment of housing needs, a housing development plan Agency Funds Staff Prepare Action Plan annually Prepare Action Plan incorporating Federal, State and local public and private time annually resources, and a one-year implementation plan. Housing Element Policies: 1.15,1.16,1.18, 2.1, 4.1, 4.2, 4.3, 4.4, 5.1, 5.2, 5.3, 5.4, 5.5 1.21 Zoning Studies Redevelopment Agency City General Fund, Initiate Zoning Studies by 2008 and By 2009-2010. In and Community Redevelopment Agency complete any proposed 2008, the City To facilitate the new construction goals of the 2007 Regional Development funds amendments in 2009-2010. completed the Housing Needs Assessment, the City intends to undertake Department Market Analysis and zoning studies to consider new programs to encourage and Adopt Reasonable Accommodation conducted promote affordable housing and recommend appropriate Ordinance. community meetings amendments for actions by the Planning Commission and to gather input for the City Council. These studies include: the opportunity sites (Town Center A New (1) Creation of zoning provisions which will accommodate Beginning). mixed uses in portions of the City, particularlyin the CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 130 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe Old Town Commercial Area; In 2009-10, the City will complete zoning (2) Examine potential increases in residential density as study and potential part of the "Town Center -A new Beginning' proposed implementation study as it specifically impacts the amendments to the Center City Study Area (a portion of which is within Zoning Code and the Town Center and South Central Redevelopment General Plan to Project Areas), the Southern Gateway Study Area (a accommodate large portion of which is within the South Central implementation of Project Area), and the West Village Area generally the plan which located west of the SR -55 Freeway between McFadden includes the rezoning Avenue and Main Street to assist the City in of the opportunity accommodating its housing needs; site located at Sixth and "B" Street. The (3) Provide relaxation of certain development standards rezoning of the and incentives for projects which include affordable opportunity site at housing units particularly housing units for the Sixth and "B" Street extremely -low income upon City Council's approval; would set aside 4.2 acres for residential (4) Provide a process for individuals with disabilities to uses permitting make requests for reasonable accommodation to relief owner -occupied and from various land use, zoning, or other building rules, rental multifamily policies, and/or procedures of the City. uses by rights. This site will be zoned Housing Element Policies: 1.1, 1.11 with a minimum density and development standards that permits at least 16 units per site at a density of at least 20 units per acre. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 131 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe Adopt Reasonable Accommodation Ordinance by end of 2009. 1.22 Private Streets City of Tustin None necessary Continue On-going The City of Tustin has adopted standards for private streets in new residential developments. To reduce construction costs, developers may be permitted to install private rather than public streets, wherever feasible. Housing Element Policies: 1.17 1.23 Building Codes City of Tustin, City General Fund; On-going On-going Community Staff time The State of California has determined that the over-riding Development value is the protection of the health and safety of residential Department occupants. Continue to adopt the Uniform Building Code pursuant to the state directives and where local amendments are proposed to reflect local climatic, geologic or topographic conditions, and minimize, wherever possible, impacts on provision of housing. Housing Element Policies: 5.4 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 132 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe 1.24 Site Improvements Community Developer funded Evaluate the use of special On-going. As Development assessment district funding at the development The requirement for the developer to construct site Department, MCAS -Tustin and its use in other progresses at the improvements often result in passing these costs on the developing areas. MCAS Tustin, the housing consumer. These costs are reflected in the cost of Redevelopment Agency City will evaluate housing that eliminates an even greater proportion of the financing mechanism to fund population from financially qualifying for the purchase of infrastructure housing. The financing of public improvements by a special improvements. assessment district or community facility district on a per parcel benefit basis may enable a greater proportion of the market to qualify for housing. Assessment district financing has been implemented in the East Tustin area and is being used to pay for public improvements. The City will assess opportunities to utilize these public improvement financing techniques in newly developing areas such as MCAS Tustin and determine whether they are financially feasible. In creating any new assessment districts, an evaluation should be completed of the developer's activity to advance pay off bonds at the close of escrow. Housing Element Policies: 1.11 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 133 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe 1.25 Fees, Exactions, and Permit Procedures Community City General Fund; Defer development impact fees The City Council Development during the economic downturn. adopted a policy in Consider waiving or modifying various fees or exactions Department, Redevelopment 2008 to temporarily normally required where such waiver will reduce the Agency Set -Aside defer the payment of affordability gap associated with providing housing of the Redevelopment Agency Housing specific development elderly and for very -low and low-income households. impact fees to prior to final inspection or Housing Element Policies: 1.11 issuance of Certificate of Occupancy. An extension of this program and/or adoption of a new policy will be considered prior to the expiration in October 2009. 1.26 Environmental Constraints Community General Fund; Private On-going On-going Development developer cost Continue to alleviate the necessity of delays in processing, Department, recoverable and mitigating requirements incorporated into the Redevelopment Agency development plans by requiring program environmental impact reports (EIR) on all major development projects whenever possible. Housing Element Policies: 1.11 1.27 Density Bonus Program Community General Fund, Process all requests for density Complete updates Development Redevelopment bonuses. Update Density Bonus by summer 2009. Promote Density Bonuses to facilitate the construction of Department Agency Housing Set- Ordinance in compliance with AB affordable housing. Under State law, applicants may file Aside Funds 2280 (Saldana and Cabalero). CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 134 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe for density bonuses when projects incorporate units for very low, low, moderate -income units or senior citizens. Housing Element Policies: 1.11 1.28. MCAS -Tustin Redevelopment Project Area Tustin Community Redevelopment Process entitlements for MCAS On-going Implementation Redevelopment Agency Agency funds Tustin Implementation of redevelopment project area for MCAS - Tustin site Housing Element Policies: 1.2;1.6;1.8 1.29 Granny Flats Community City processing fees Five (5) granny flats are anticipated Support application Development (recoverable) as received Support the development of granny flats on single Department family zoned lots CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 135 JUNE 16, 2009 Program Goal 2: Equal Housing Opportunity TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Responsible Agency I Funding Source I Quantified Objective I Timeframe 2.1 Fair Housing Community Develop- CDBG funds Assist approximately 400 Tustin On-going; complete ment Department, residents annually, 3,000 residents educational The City shall continue to provide housing counseling City's contractor by 2014. resources by 2014 services to assure equal housing opportunities within the City. The City allocates approximately $15,000 annually for handling tenant/landlord disputes, housing discrimination cases, counseling, tenant rights, fair housing education, and education within the City. The City will continue to promote the fair housing educational resources offered by adding the services on the City's webpage, Code Enforcement brochure, and the Community Development Directory. Housing Element Policies: 2.1, 2.2, 2.4 2.2 Shared -Housing TLC, Parks and CDBG funds Continue On-going Recreation Services Continue to provide coordination and support to a home Department, and sharing program funded in part by the Community Community SeniorServ, formerly known as Feedback Foundation, Inc., Development as part of TLC (Transportation Lunch and Counseling) and Department the Orange County Housing Authority. Housing Element Policies: 2.3 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 136 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe 2.3 Housing Referral Program Police Department; City General Fund, • 7,500 referrals to social agencies On-going CDBG Funds by 2014 Continue to provide housing referral services to families in Parks and Recreation need of housing assistance and information. This program Department; • 50 referrals for shared housing consists of three City departments disseminating by 2014 information to the public at all times. Community Development; • The Police Department refers homeless people to Redevelopment Agency different agencies that provide shelters and food for various segments of the population. • The Parks and Recreation Services Department provides housing information and social service information to the senior citizen population. • The Community Development Department and Redevelopment Agency provide housing and social service information to all segments of the population during regular city hall business hours. The Community Development Department also serves as a clearinghouse for the Community Development Block Grant Program and represents the City at Housing Authority and OCHA Advisory Committee Meetings. City departments utilize the following documents and also make these documents available to the public: • Directory of Senior Citizens Services prepared by the Area Agency on Aging Senior Citizens Office • Social Service Assistance Booklet prepared by Connection Plus aid e�Cisory HOUSING ELEMENT Committee. GENERAL PLAN 137 JUNE 16, 2009 Program Ongoing Review of Housing Element Programs Consolidated Plan Goal 3: Ownership Housing TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Responsible Agency I Funding Source See Progam1.19 See Program 1.20 Quantified Objective I Timeframe 3.1 Condominium Conversions Community City General Fund, Impose requirements where On-going Development applicable. Continue to require developers converting apartments to Department, City Redevelopment condominiums to process a conditional use -permit, provide Council, Agency Housing Set - relocation assistance, and/or to provide incentives and Aside Funds assistance for purchase of the units by low- and moderate- Redevelopment Agency income households. Housing Element Policies: 3.1, 3.2, 3.3 3.2 State Home -Ownership Assistance Redevelopment Agency Redevelopment Assist 30 First time homebuyers by By 2014 Agency Housing Set- 2014 The City's Redevelopment Agency provides a First Time Aside Funds; State and Homebuyers program utilizing housing set-aside funds. Federal sources The Redevelopment Agency also applies for and will explore the use of other funding opportunities such as HELP, HOME funds, and other State and Federal programs. Housing Element Policies: 3.1, 3.3 Bonding Programs See Program1.14 Ongoing Review of Housing Element Programs See Program1.19 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 138 JUNE 16, 2009 Program Consolidated Plan New Owner Housing using Tax Increment Financing Goal 4: Affordable Housing Preservation TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Responsible Agency See Program1.20 See Program 1.8 Funding Source I Quantified Objective I Timeframe 4.1 Replacement Housing Redevelopment Agency Redevelopment The Redevelopment Agency As necessary Agency Housing Set- continues to monitor housing units Ensure rehabilitation or construction of an equal number of Aside Funds; Private demolished within the replacement units when low and moderate income developers redevelopment project areas. residential units are destroyed or removed from the market Currently, the City has exceeded as part of a specific redevelopment project pursuant to its replacement housing California Community Redevelopment law. obligations within the Town Center and South Central Housing Element Policies: 2.5 redevelopment project areas and has a surplus of 446 units. 4.2 Housing Rehabilitation' Redevelopment Agency $947,000 of The City plans to Rehabilitate 162 Rehabilitate 162units Redevelopment units by 2014. by 2014 Allocate available Redevelopment Agency funds to finance Agency Housing Set - public improvements and rehabilitation of residential units Aside Funds has been in target areas. earmarked (see Six Year Capital Plan Housing Element Policies: 1.2, 5.1, 5.2 Goals) 4.3 Housing Authority Orange County HUD, CD13G, Continue On-going Housing Authority, Redevelopment Contract with the Orange County Housing Authority, Redevelopment Agency Agency Housing Set - where necessary, for the development and operation of Aside Funds federally assisted low- and moderate -income housing CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 139 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe programs. Housing Element Policies: 1.5, 1.16, 1.17 4.4 Rental Assistance County of Orange HUD Issue 200 certificates/ On-going Housing Authority Encourage the availability of Section 8 rental assistance vouchers annually -1,200 by 2014. certificates and voucher certificate program assistance funds through the Orange County Housing Authority by participating in the application process i.e. advertise, promote on website, at library, senior center etc. when application are available; offering City Hall as the application and information center for Section 8 vouchers;, engaging and participating with the County's housing advisory committee to ensure priorities are given to Tustin residents, and promote Section 8 program to apartments owners to expand Section 8 housing inventory within the City of Tustin. To encourage the maintenance of existing and establishment of new certificates, support the County's efforts to obtain continued Federal funding. Housing Element Policies: 4.1, 4.2 4.5 Affordable Senior Housing Project and Senior Community None necessary Maintain 74 units of affordable On-going Board and Care Facility Development Senior Housing. Department To maintain 74 units of affordable housing for Seniors located at 17432-17442 Mitchell Avenue (20 units) and 54 units affordable senior apartments at 1311 Sycamore Avenue (Heritage Place). Housing Element Policies: 5.1, 5.2, 5.3, 5.4 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 140 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe 4.6 Preservation of Assisted Housing Community Redevelopment Pursuant to Government Code The City is in contact Development Housing Set -Aside Section 65583.1(c), preserve at with Tustin Gardens Tustin has four low-income housing projects with a total of Department, Funds, State and minimum 230 of 277 units and is monitoring 277 units "at -risk" of conversion to market rate during the Redevelopment Agency Federal Funds currently identified as "at- risk" their annual renewal planning period. If project owners choose to convert the (100 units at Tustin Gardens; 60 option. The City will projects to market rate housing, the City will coordinate the units at Rancho Alisal; 54 units at also negotiate with provision of financial and administrative resources to Rancho Maderas; and 16 units at the Irvine Company preserve these units as affordable housing. Rancho Tierra) for the time frames to ensure the required by applicable provision of Government Code Section affordable units in 65583.1.(c)(2)(C)(i) or Health and East Tustin. Safety Code section a) Monitor Units at Risk: Maintain contact with owners of Redevelopment Agency The City will enter at -risk units as potential conversion dates approach to into legally determine whether Section 8 contracts or affordability enforceable covenants have been renewed or are planned to be "at agreement by July 1, renewed. Discuss with the owner of the -risk" 2010. projects the City's desire to preserve the units as affordable. b Provide a Rent Subsidyprogram for at -risk units at p g Redevelopment Agency Redevelopment Preserve, at minimum, 130 units at Enter into a legally Irvine Company Apartments: Rancho Alisal; Rancho Housing Set -Aside the Irvine Company Apartments enforceable agreement by July 1, Maderas; and Rancho Tierra, preserving, at minimum, funds, other funding 2010. By June 2012, 130 units. sources provide rent subsidies when affordability restrictions expire May 2012. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 141 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe c) Work with a nonprofit affordable housing developer to Redevelopment Agency 4% Tax Credit and Preserve 100 units at Tustin Enter into a legally apply for 4% Tax Credit/ Bond Financing for the working with a non- Bond Financing, other Gardens enforceable acquisition and rehabilitation of Tustin Gardens, profit affordable funding sources agreement by July 1, preserving 100 at -risk units. housing developer 2010. d) Rent buy -down loan program for at -risk units at Irvine Redevelopment Agency Redevelopment Preserve, at minimum, 130 units at Enter into a legally Company Apartments: Rancho Alisal; Rancho Maderas; Housing Set -Aside the Irvine Company Apartments enforceable and Rancho Tierra, preserving, at minimum, 130 units funds, other funding agreement by July 1, sources 2010. e) Tenant Education. Work with tenants of at -risk units in Community danger of converting. Provide tenants with information Development regarding potential tenant purchase of buildings Department, including written information and any related Redevelopment Agency workshops. Act as a liaison between tenants and nonprofits potentially involved in constructing or acquiring replacement housing. If existing staff is not able to provide adequate staffing for this program, provide outside consultants to support the program. f) Reserve Fund. Earmark development housing set-aside Redevelopment Agency Redevelopment funds to assist priority purchasers with the down Housing Set -Aside payment and closing costs associated with purchasing funds projects at risk. Continue to monitor other potential funding sources, such as State grants and HUD funds. Housing Element Policies: 4.1, 4.2, 4.3, 4.4 4.7 Temporary Housing Assistance for Extremely Redevelopment Agency Redevelopment Promote, assist, and facilitate By 2014 Low Income Households and Community Housing Set -Aside programs to prevent extremely low Development Funds, HUD Section 8 income households to become Department Program, CDBG homeless by providing links and program information on City's CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 142 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe Development website. Assist in the provision of temporary and emergency Department cases by 2014. housing assistance to prevent homelessness for the extremely low income households as well as coordination with regional, state and federal assistance programs for assisting these households in the percentage of their incomes that are applied to rent (i.e. increase in allocation of Section 8 existing rental certificates, etc). Housing Element Policies: 1.4,1.5,1.6,1.14 Mobile Homes See Program 1.2 Deed Restrictions: See Program 1.4 Tax Increment Financing See Program 1.8 Transitional Housing See Program 1.10 Ongoing Review of Housing Element Programs See Program 1.19 Consolidated Plan See Program 1.20 Goal 5: Neighborhood Conservation 5.1 Enforcement of Building and Housing Codes Community City General Fund Investigate 150 substandard On-going Development housing cases annually and 900 Continue to enforce building and housing codes to ensure Department cases by 2014. health and safety, rectify Code violations and thereby improve the overall character of the community. Enforcement will include identifying substandard housing units and those that are otherwise identified as a threat to CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 143 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe the health and safety of occupants. Actions will be taken pursuant to the law to demolish, rebuild, or correct the code violations. This program includes notification of taxing agencies upon failure to gain code compliance from the property owner to allow City to recover enforcement cost. Housing Element Policies: 5.3, 5.4 5.2 Cultural Resources District Community CDBG, City General Rate historic structures where Process Certificate of Development Fund, State grants applicable and process certificates Appropriateness as There are a large number of structures in the City that were Department of appropriateness as received. received. Explore constructed before and after the turn of the century. Con- for Certified Local tinue to utilize the City's Cultural Resources Overlay Government (CLG) District to safeguard the heritage of the City by preserving grant to update the neighborhoods and structures that reflect the City's City's Historical heritage and past. Through the District, promote the public Resources Survey and private enjoyment, use and preservation of culturally and Report in 2009. significant neighborhoods and structures. Continue to require that any alteration of a designated resource or construction improvements in the District conform to the requirements of the Cultural Resources Overlay District. Owners of historic landmarks or properties within the District are required to obtain a certificate of appropriateness before beginning any type of exterior construction, alteration, or demolition. A certificate of appropriateness certifies that the proposed changes are consistent with the design guidelines and are appropriate within the district context. Housing Element Policies: 5.5 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 144 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe Ongoing Review of Housing Element Programs See Program 1.19 Consolidated Plan See Program 1.20 Building Codes See Program 1.23 Goal 6: Environmental Sensitivity 6.1 Energy Conservation Community None necessary Require all new units within On-going and Development planning period. currently in force. Require all new construction to be subject to State energy Department conservation requirements (Title 24) as a condition for the issuance of a building permit. Housing Element Policies: 6.2 6.2 Energy Rebate ProgramPartner with Utility Community General Fund, Seek available grants to partner Explore energy Companies to promote energy rebate programs. No fee or Development potential Grants with utility companies to promote efficient fee waiver discounted permits for energy efficient projects over and Department energy rebate programs. by 2014 above the Title 24 requirements may be explored. Examples include installation of photovoltaic systems, tank -less water heater, natural gas recharge connection, electric vehicle recharge connection, wind power generator, etc. Housing Element Policies: 6.6 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 145 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe 6.3 Solar Energy and Conservation Community None necessary On-going Revise CEQA Development checklist by 2014 Require that environmental analysis and subdivision plans Department address energy conservation measures and solar access. With the passage of AB 32, the City in anticipation with the State mandates will set thresholds within its CEQA checklist and require developers to address energy conservation measures applicable to their proposed development proposals. Housing Element Policies: 6.2, 6.3 6.4 Building Orientation Community None necessary On-going On-going Development Promote energy efficiency by orienting homes to maximize Department natural day lighting. The City will work with potential developers during the conceptual review level (Design Review) by promoting building siting that maximizes natural day lighting. Housing Element Policies: 6.2, 6.3 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 146 JUNE 16, 2009 TABLE H- 22 HOUSING ELEMENT PROGRAMS 2006-2014 Program Responsible Agency Funding Source Quantified Objective Timeframe 6.5 Water Efficiency Community None necessary Promote water efficient programs Adopt program by Development by conducting workshops and 2014 Promote water -efficient landscapes, efficient irrigation, and Department providing education materials on use of permeable paving materials. Through educational the City Website, public counter materials and trainings, the City will promote water and at schools. efficiency methods to its residents. Landscape beautification which results in water conservation could be encouraged through planting of drought tolerant plants, installation of drip irrigation, installation of rain detector/sensor irrigation, etc. Incentives such as over the counter permit plan check, discounted fee, or waiver of permit fee could be considered. Housing Element Policies: 6.4 6.6 Green Building Community General Fund Explore green building and Evaluate and adopt Development sustainable building design to help Green Building Streamline processing for approved green building. Department conserve energy consumption. A program by 2014. fee waiver, discounted permits Housing Element Policies: 6.2, 6.3, 6.5 fees, or rebate may be considered in promoting Green Building program. Ongoing Review of Housing Element Programs See Program 1.19 Consolidated Plan See Program 1.20 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 147 JUNE 16, 2009 F ~ zo W N W ~ ~~ W W c~ z z~ m '~ 0 x x 0 y 00 C H z H w 0 ~" F U Appendix to Housing Element APPENDIX A REVIEW OF PAST PERFORMANCE CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 149 JUNE 16, 2009 Appendix to Housing Element Tltis page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN 150 JUNE 16, 2009 Appendix to Housing Element REVIEW OF PAST PERFORMANCE State law establishes afive-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 151 JUNE 16, 2009 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 MCAS 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 152 JUNE 16, 2009 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, l4 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 153 JUNE 16, 2009 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 fora 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 154 JUNE 16, 2009 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 MCAS 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 155 JUNE 16, 2009 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 MCAS Tustin project was prepared. In the second half of the review period, the Final Program EIS/EIR for MCAS 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. MCAS 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 156 JUNE 16, 2009 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 157 JUNE 16, 2009 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 158 JUNE 16, 2009 APPENDIX B AFFORDABILITY GAP ANALYSIS CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN JUNE 16, 2009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN JUNE 16, 2009 Ci of Tustin Affordability Gap and~everaged 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 to 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 n~uired to make different types of housing affordable to households at alternative income levels. The per unit affordability gaps calculated in this naport are based on housing prototypes that are 10096 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 b~ the appropriate per unit affordability gap. The results of the gap analysis provide a usefu tool to the Ctty of Tustin and Tustin Redevelopment Agency for capital planningg purposes. DRA recommends ~ that the subsidy Provided to any individual housing development be determined based on ana ysts of the specific economic condittons pertatnmg to that project 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 devebpment 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 d Tustin Affordability Gap and leveraged Financing Anah~sis 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 nwrtgage 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 gaps for the owner prototypes "are summarized in Table 1. The gaps have been calculated for the following three income levels:. ~ Income Limit Affordably Housing Cost 1. Very Low Income 50% of Area Median Income (AMI), adjusted 309'0 of 509'o AMI for household size 2. Low Income 130% of AMI, adjusted for household size 309'0 of 7096 AMl 3. Moderate Income 120% of AMI, adjusted for household size 35% of 110% AMl 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 Ta k 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°k 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 b096 AMI 3. Moderate Income 120% of AMI, adjusted for household size 309'° of 110% AM) DR/'- produced, under separate cover, a comprehensive review of Federal, State, and private sources of funding that might be used do subsidize affordable rental and ownership housing in Tustin. For ownership housing, per unit mortgage assistaP e, as available, genera y reduces the gap on a dollar for dollar basis. For rental develo menu, 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: ~. 996 Low Income Housing Tax Credits (Federal only); 2. 4°Yo tax credits with tax-exempt bonds; and 3. 496 tax cn_dits, 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 Grange County was designated as a Difficuh to Develop Area (DDA) by HUD in ?007, projects in the County are eligible fora 13096 basis boost for the cakulation 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 prototvpe/Unit Bedroom Count Income= Income' Income' Owner Prototype #1' Attached Townhome Two Bedroom 5366,000 5322,400 5195,500 Thn:+e Bedroom 5387,800 S339,400 5198,400 Four Bedroom ;426,800 5374,600 5222,300. Avenge 5393,500 S345,500 5205,400 Ownerr prototype #2~ Stacked Flat Condominium One Bedroom 5258,600 ;219,900 5107,100 Two Bedroom 5259,000 5215,500 S88,600 Three Bedroom $267,100 5218,800 577,800 Four Bedroom 5290,500 5238,300 586,000 Average ~ 5268,800 5223,100 $89,900 Owns' prototype #3' High Density Condominium One Bedroom 5407,500 5368,800 5256,000 Tvw Bedrooom 5432,500 5389,000 5262,100 Three Bedroom 5542,000 5493,700 5352,600 Four Bedroom 5569,400 5517,200 $364,800 Average $487,900 $442,200 5308,900 Owner prototype #4~ Mixed Use, Ground Floor Retai! ~ One Bedroom 5491,700 5453,000 5340,200 Two Bedrnoom 5537,400 5493,900 5366,900 Throe Bedroom 5595,000 5546,600 5405,600 gverage 5541,300 5497,800 5370,900 Source: David Paul Rosen 3r Associates City dTustin ~ffordabiliry Gap and leveraged Financing Malysis 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 arc 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 550 per month; HOA dues of 5175 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 AMt, adjusted for household size. Average very low income affordable home purchase price is 570, 764. 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 5116,457. ,~ '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 5249,723. s Owner p~otype rr1 average unit size is 1,296 square feet. Average per unit development cost is $468,663. Per unit development coats arc adjusted by unit size/bedroom count. Cwvner Prototype x2 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. C>vvner Prototype t3 average unit size is 1,350 square feet. Average per unit development cost is 5558,617. Per unit development costs are adjusted by unit size/bedroom count. Owner prototype ~4 average unit size is 1,515 square feet. Average per unit development cost is 5608,112. Per unit development costs arc adjusted by unit size/bedroom count City of Tustin Affordability Gap and leveraged Financing Malysis Page 5 Table 2 Tenant Per Unit Subsidy Requirements' Rental Housing Prototype: Stacked Flat Apartments City of Tustin 2008 Renter Prototype Stacked Flat Apartments Unit Bedroom Count One Bedn~om5 Two Sedrokxn° Three Bedroom' Four Bedroom° Average Very Low Low Moderate Incomes Income' Income4 $311,300 $294,600 $211,400 $348,000 $329,300 $235,600 $3.21,800 S301,000 $197,000 $402,000 $379,600 $174,800 S345,775 $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 5300, 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 5847. ' 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 51,033. ' 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 51,963. ~ `._ S~One bedroom unit is 750 square feet. Per unit total development cost is 5321,075. ~ Two bedroom unit is 950 square feet. Per unit total development cost is 5362,224. ' Three bedroom unit is 1,050 square feet. Per unit total development cost is 5382,799. " Four bedroom unit is 1,250 square feet. Per unit total development cost is 5423,947. City of Tustin Affordabiiiry Gap and leveraged Financing Malysis Page 7 Table 3 Average P+er Unit Subsidy Requirement Renfal Housing Prototype; Stacked Flat Apardnenb Leveraged Financing Scemrios , Cite of 7lntin 2001 Levera Financing Scenaria 996 Tax Credit 496 Tax Credits, Tax-Exempt Bonds 4°~6 Tax Credits, Tax-Exempt Bonds, Multi-Family Housing Program (MHP) Soun:.e: David Paul .Rosen & Associates. Renter Prototype Stacked Fiat Apartment 657,000 6140,100 ;109,600 City of Tiutin Affadabiltgr Cap and levcraged Financing Malysis 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 JUNE 16, 2009 Appendix to Housing Element This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN JUNE 16, 2009 i4; %,~ 3 ~~ ~ 17AV11) PAUL ROSEN & ASSOCIATES City of Tustin Comprehensive Affordable Housing Strategy Appendix 8: Affordable Housing Capital Plan Prepared for: City of Tustin Submitted By: David Paul Roaea & A,~ociatea :.;~r.n ~.=a].ifornia ~ou~t~:etn CaliEcrn~a David Rosen, Principal Nora Lake-Brown, Principal 1330 Broadway, Suite 937 3941 Hendrix 3t 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: DavidiDRAConaultante.com a-mail: Nora~DRAConeultante.com ~ www.draconeultants.com www.draconaultante.com May 2, 2008 Appendix to Housing Element TlTis page intentionally left blank. CITY OF TUSTIN ~ HOUSING ELEMENT GENERAL PLAN 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 Drat May 2, 2008 ~~.r,r„-a},an~ive Affordable Housing Strategy Page ii List of Tables Ta 1 Pacre 1. Six-Year Capital Plan Goals, City of Tustin Comprehensive Affordable Housing Strategy, FY 2008/09 to FY 2013/14 ................................. 4 City of Tustin Administrate ve Review Draft May 2, 2008 Comprehensive Affordable Housing Strategy Page iii C 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. Tabl• 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 coats 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 persona 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 Housing Assistance Goals and Programs 2.1 Praeervatioa of At-Risk Affordable Housing Rectal Uait~ The City of Tustin has identified the preservation of existing affordable housing units as one of the moat cost- ,_- effective methods of maintaining the stock of affordable ~~ housing therefore a high.-priority program for the City. City of Tustin Administrative Review Draft ~iay 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 4# tax credits. The total amount of funds allocated to this program is $2,181,672. Z.Z Single- and M'tilti-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 Ovmarship Multifamily Ns~- 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. a.4 Multi-Family Rental Neer 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~r 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 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. 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 Califoznia 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 A~ai~tanc• 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. 2.7 Tustin ~Legscy Onnerehip Multi-Family Nerr Con~tructioa 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 iow 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 Conetructioa 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. C, City of Tustin Administrative Review Draft May 2, 2008 Affordable Housing Capital Plan ~ ~ Page 4 T 9sawrnafy of ilw-Yaw Plwn Qowb CRY of TWIN d-wrob"aft A.lbw6q 3&aftYY FY 3UMM d Ft MUM (1) The Es*nsftd Subskly Wad Es*nmbd & &Wy Car par Ua9 i rdmmm nMq at Iris ear. (2) The amber of WAI•Fsw9y saes Y"Mel MO Mr of add Wells wAsbsd, aM bWYgs wAabst The loll wwdur of bul*w w be agnMea�iey bot ohm ata Mul"andly PAW& bsslsos 12-- ve 1 brit - • weld mob wMbot (7) Eobrbd suI - - b basad as ow" Paso%" 92, Rede d Irl Coodsoftes Model N) Eolbosbd subsidy M bond M baor�M 4% Lw kw 110101011 TAN Cledr aft Tsa•EWsa*l 9Wads br Iw Noor fto"pW. (s) Assbbaos Osd b amrrsd In wA*w of prsM served n s *nW b mmbu d Aalbt W AL P) TM TLCP WeM "" k pwjssbd PAM 1 doaslspwrad W So WYy is TLCP Units will be koweleamod be so n4Ir oleo s GIN " adabq limbwsdurlsldpsWWbd NO wsldeli t IN 10 yar oeosanb M M dsluaiwd d h (f) TM Wel bred b Pml@" TLCP PMve 1 dsvebprasd W dr oiMYy b uebaowr pAaq at lids Irr. The coal of ms.... o rdsbiy a eve TLCP maid wdia will be Yoaslmied 4 sw ftodpsrsprwsd Apwp r W sgons asasYd art M e9 wsYdaiit 9» M Vowosssesab 0 M dsbrwdssd At eve VMwsidrdair lsl doml ps prwasds (6) The Tabl wwiw of Mrwbt Well dM col bride Its waist d prMs served iardsr lirrrsbn Assbbaos A & C A*o Sordoss. ESTIMATED ASWTAMCE UTIMATED PROp11AM SIMS COST GDALS l9 d Know TEMM + 14wwdsa ofAS W I ARor�bMs Rnr urb Fat uNr Ulft REuIMI ) SOURCE OF FUMS n� Mi'l'l very Low UNK 277 a,+n,an Aside Lor US 172 2 Shwe am dluw rsn9y /law. Raimmm severla s.4 Sb>,Is prMy 192 SIMIAN. Aside over Vwy Low ao,�oo 54 LO° 32 Medi' ,0 IWllW eerMy 0 RsnW VVIV LOW 97.000 1M LOW 21 21 7 Omen&,* +MdIF F,,4 Now CawoMrWoYaa (�' M°A'wb - - - -.- - lie owr - - � Housing Sol- - Vay Lcm 19 "139 7d7 Aside Low • �FawIF - R"dowarCaaat�WAWsNA@s- 92.100L -- Reold Kausa7 - ` P%v#6n. w.w.bWya. WdsrpmwChN,aaLAWwMaly - '-- -- 01.0,100 71 - -- 71 Aside- onow v«r �°` Mo o09 n s:,w�,9N Adds • Lar s 10 S ►lsaralsas Asobso e i sjppmYra Sw jmo M dwele Trwrlona s - r rwwpL -v q 0-wal* EMN Fahy wwr� --- - -- - — ---- m w yowI 2 VPW" ss$.Mo colic Csaowswdba N Owr--- Ita Harlq TLCP 227 tim Aside Very taw Ulw( 0 LOW UNK 71 VMS@= of Cobwrbus Modreb UNK M Very Low so 40 Loa so M Modrdsso 9 Twda Lgoey Rrrbf war CawfrWodlaa M- -- -`flseYl --- - VNY UNK 253 120 UNK Aside Lar UNC dt Modrsb UNK M 9 AiaNebopYba sopporf WA WA WA 714 c MA Hoh YA@kb TOTAL pA 11AM 919.910.072 Fosdwebs : (1) The Es*nsftd Subskly Wad Es*nmbd & &Wy Car par Ua9 i rdmmm nMq at Iris ear. (2) The amber of WAI•Fsw9y saes Y"Mel MO Mr of add Wells wAsbsd, aM bWYgs wAabst The loll wwdur of bul*w w be agnMea�iey bot ohm ata Mul"andly PAW& bsslsos 12-- ve 1 brit - • weld mob wMbot (7) Eobrbd suI - - b basad as ow" Paso%" 92, Rede d Irl Coodsoftes Model N) Eolbosbd subsidy M bond M baor�M 4% Lw kw 110101011 TAN Cledr aft Tsa•EWsa*l 9Wads br Iw Noor fto"pW. (s) Assbbaos Osd b amrrsd In wA*w of prsM served n s *nW b mmbu d Aalbt W AL P) TM TLCP WeM "" k pwjssbd PAM 1 doaslspwrad W So WYy is TLCP Units will be koweleamod be so n4Ir oleo s GIN " adabq limbwsdurlsldpsWWbd NO wsldeli t IN 10 yar oeosanb M M dsluaiwd d h (f) TM Wel bred b Pml@" TLCP PMve 1 dsvebprasd W dr oiMYy b uebaowr pAaq at lids Irr. The coal of ms.... o rdsbiy a eve TLCP maid wdia will be Yoaslmied 4 sw ftodpsrsprwsd Apwp r W sgons asasYd art M e9 wsYdaiit 9» M Vowosssesab 0 M dsbrwdssd At eve VMwsidrdair lsl doml ps prwasds (6) The Tabl wwiw of Mrwbt Well dM col bride Its waist d prMs served iardsr lirrrsbn Assbbaos A & C A*o Sordoss. APPENDIX D PUBLIC PARTICIPATION MAILING LIST CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN JUNE 16, 2009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN JUNE 16, 2009 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. Mardan 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 Bamo Tustin Area Council for Fine Arts O.C. Affordable Housing 980 W.17~ Street, #E P.O. Box 145 23861 El Toro Road, Suite 207 ~~ per, 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. 17~ 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 GENERAL PLAN JUNE 16, 2009 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 ICnopick 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 #Sll 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 Joyce Riley Learning Disabilities of Southern Calif P.O. Box 25772 Santa Ana, CA 92799 CITY OF TUSTIN GENERAL PLAN 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.C. 201 S. Broadway Santa Ana, CA 92701 Jon Schlemmer St. Vincent de Paul Center for Reconciliation 180 S. Cypress Street Orange, CA 92866 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. 4~ 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 Orange County Homeless Issues Task Force 1770 N. Broadway Santa Ana, CA 92706 HOUSING ELEMENT JUNE 16, 2009 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., 2na Floor Anaheim, CA 92805 Randy Gibeaut Community Housing Resources 1411 North Broadway Santa Ana, CA 92706 CITY OF TUSTIN GENERAL PLAN 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 Trinh LeCong, Executive Director Affordable Housing Clearinghouse 23861 El Toro Road #401 Lake Forest, CA 92630 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 BIA Orange County Chapter 17744 Sky Park Circle, #170 Irvine, CA 92614 HOUSING ELEMENT JUNE 16, 2009 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 County of Orange 10 Civic Center Plaza, 3rd Floor Santa Ana, CA 92701 Karen Roper, Director Orange County Housing/Community Development Department 1770 N. Broadway Santa Ana, CA 92706 Captain Lee Lescano The Salvation Army 10200 Pioneer Road Tustin, CA 92780 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 CITY OF TUSTIN GENERAL PLAN HOUSING ELEMENT JUNE 16, 2009 Appendix to Housing Element APPENDIX E REFERENCES CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN JUNE 16, 2009 Appendix to Housing Element This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN JUNE 16, 2009 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, June 17, 2008 and July 16, 2009. CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN JUNE 16, 2009 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 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, Principal Planner Community Development Department, Tustin (714) 573-3115 7. Reina Kapadia, Associate Planner Community Development Department, Tustin (714) 573-3118 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN JUNE 16, 2009 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 13. Jim Palmer Orange County Rescue Mission Village of Hope, Tustin (714) 247-4300 CITY OF TUSTIN HOUSING ELEMENT GENERAL PLAN JUNE 16, 2009 Housing Element TUSTIN TECHNICAL MEMORANDUM June 16, 2009 Adopted by Resolution No. 09-33 This page intentionally left blank. LIST OF TABLES 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 JUNE 16, 2009 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 HOUSING NEEDS 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 .................................................................................................... 49 GOVERNMENTAL CONSTRAINTS 49 MARKET CONSTRAINTS 71 ENERGY CONSERVATION ............................................................................................................ 76 SUMMARY OF PREVIOUS HOUSING ELEMENT PROGRAMS ............................................. 78 PROGRESS IN IMPLEMENTING THE 1989 GOALS AND OBJECTIVES 78 REVIEW OF PAST PERFORMANCE 79 APPENDICES: A. AFFORDABILITY GAP ANALYSIS B. REFERENCES C. MAJOR EMPLOYERS IN TUSTIN D. ORANGE COUNTY BUSINESS COUNCIL SCORECARD E. PRESERVATION ANALYSIS CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM i JUNE 16, 2009 TABLE HTM- 22: Resale Price of Homes and Condominiums Tustin and Neighboring Jurisdictions March 2008 36 TABLE HTM- 23: Affordable Monthly Housing Cost 37 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 42 TABLE HTM- 28: Assisted Housing Inventory 43 TABLE HTM- 29: 2008 Fair Market Rents 47 TABLE HTM- 30 Affordable Net Rents 47 TABLE HTM- 31: Cost of Providing Rental Subsidy for Very Low Income Households 48 TABLE HTM- 32: General Plan Residential Land Use Categories 50 TABLE HTM- 33: Summary of Residential Zoning Regulations City of Tustin 54 TABLE HTM- 34: Comparative Development Fee Summary 68 TABLE HTM- 35: Summary Table Effectiveness of Housing Element Programs: 1998-2008 79 TABLE HTM- 36: Effectiveness of Housing Element Programs 1998 2008 81 TABLE HTM- 37: Progress Towards objectives 1998-2008 108 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM iii JUNE 16, 2009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM iv JUNE 16, 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 JUNE 16, 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 JUNE 16, 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 govemmental 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 afive-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 JUNE 16, 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 JUNE 16, 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 floodplains. 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 JUNE 16, 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 (SLAG) 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 JUNE 16, 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 JUNE 16, 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 JUNE 16, 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 JUNE 16, 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 u1 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 Growth Jurisdiction 2000' 2007 z 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% Oran e Coun 2,846,289 3,100,313 8.9% 1 20W U.S. Census z Depaztrnent of Finance esiimates, 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 JUNE 16, 2009 Table HTM-1a Population Projection 2010 2015 2020 2025 Percent Change (2010-2025) Tustin 80,728 86,621 88,245 88,694 10% Source: OCP 2006 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. TABLE HTM- 2 AGE TRENDS 1990 - 2000 CITY O F TUSTIN A e Grou 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 2000's, 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 JUNE 16, 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. TABLE HTM- 3 RACE AND ETHNICITY: 1980, 1990, 2000 CITY OF TUSTIN 1980 1990 2000 Race and Ethnici Po ulation Total Po ulation Total Po ulation °/u Total s 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% 10,194 15.1% Other 1,588 4.4% 5,133 10.1% 2,151 3.2% His anic (3,085) (8.5%) (10,508) (20.7%) 23,110 34.2% Total 36,119 100% 50,689 100% 67,504 100% ' ly2fU Census 2 1990 Census s 2000 Census ' The Census contains a sepazate 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 "Othez" 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 JUNE 16, 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 Occu ational Cate o Number Management, business, and financial operations occu ations 6,657 19.1 Professional and related occu arions 7,467 21.4% Healthcare su ort occu ations 506 1.4% Protective service occu ations 432 1.2% Food re aration and servin related occu ations 1,502 4.3% Building and grounds cleaning and maintenance occu ations 1,186 3.4% Personal care and service occu ations 957 2.7% Sales and related occu ations 4,278 12.3% Office and administrative su ort occu ations 6,040 17.3% Farmin , fishin ,and fores occu ations 33 0.1 Construction and extraction occu ations 1,222 3.5% Installation, maintenance, and re air occu ations 735 2.1 Production occu ations 2,689 7.7% Trans ortation and material movin occu ations 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 JUNE 16, 2009 TABLE HTM- 5 EMPLOYMENT BY INDUSTRY 2000 CITY OF TUSTIN Indus Number % A riculture 774 1.9% Minin 4 .01 Construction 2,437 6.1 Manufacturin non-durable oods 1,890 4.7% Manufacturin durable oods 5,919 14.8% Trans ortation and ublic 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 Em to ed 2,526 6.3% TOTAL 40,107 100.0 Source: CXil' 1UU6 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. Anon-family household is one consisting of a single individual or unrelated persons living together. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 14 JUNE 16, 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 1990 2000 200 Household T e No. of Households % of Total No. of Households % of Total No. of Households % of Total Famil 12,317 67.2% 16,055 67.4% N/A N/A Non-Famil 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 Oran e Coun 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. s California Department of Finance (DOF), 2007 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 15 JUNE 16, 2009 Overcrowding HUD defines overcrowding as more than one person per room, excluding bathrooms and kitchens. For example, aone-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 (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 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 atwo-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 atwo-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 JUNE 16, 2009 TABLE HTM- 8 HOUSEHOLDS IN OVERCROWDED CONDITIONS 2006 CITY OF TUSTIN Tenure Extremely Overcrowded Low Total Very Low Overcrowded Total Low Overcrowded Total Moderate & Above Overcrowded Total Total Overcrowded Total All Households Owner 45 525 140 760 225 1,370 410 9,200 820 11,855 Renter 520 1,585 870 1,910 1,100 2,780 975 5,710 3,465 11,985 Total 565 2,110 1,010 2,670 1,325 4,150 1,385 14,910 4,285 23,840 Source: Southern California Association of Governments (SCAG) Regional Housing Needs Assessment (RHNA), 2007 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 17 JUNE 16, 2009 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- mentionedjurisdictions. TABLE HTM- 9 MEDIAN HOUSEHOLD INCOME: TUSTIN AND SURROUNDING AREAS 2000 risdiction Median Household Income Percent Above/Below Coun 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% Oran e Coun $58,820 --- $64,611 -- State of California $47,493 -23.8% $53,025 -10.9% Source: U.S. Department of Commerce, Bureau of Census, 20W As shown u1 Table HTM 10, an estimated 7.5 percent of Tustin's households had incomes of less than $15,000 uz 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 JUNE 16, 2009 TABLE HTM-10 HOUSEHOLD INCOME DISTRIBUTION CITY OF TUSTIN 2000 Income Range # 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 Oranee County i 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 JUNE 16, 2009 TABLE HTM-11 HOUSEHOLD INCOME DISTRIBUTION BY HOUSEHOLD TENURE CITY OF TUSTIN 2000 Tenure/Income Range Numbers 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 12,002 100.0% 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 11,829 100.0% 1 Derived by applying the percentage of household tenure by household income from Summary File 3, Table HCT11 (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 uwner 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 JUNE 16, 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 SCAG 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 11,985 100.0% 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 11,855 100.0% AMI =Area Median Income Source: Southern California Association of Governments, 2007 RHNA CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 21 JUNE 16, 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 groupsl. 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 1 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 JUNE 16, 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 Extremel Low Ve Low Low Moderate & Above Total Totai All Tenure Over a Total Over a Total Over a Total Over a Total Over a Households 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 1,525 4,150 2,255 14,910 6,190 23,840 Source: SCAG RHNA, 2006. 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 asingle-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 JUNE 16, 2009 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 u1 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 JUNE 16, 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-13 HOUSEHOLD SIZE DISTRIBUTION CITY OF TUSTIN 2000 Household Size Number of 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 JUNE 16, 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 JUNE 16, 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: afast-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 JUNE 16, 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 JUNE 16, 2009 ° 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, anon-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 All residentially zoned home, or group home for six Permitted (6) or fewer properties 1 Includes congregate care facility, single room occupancy hotel, and children s intermediate care shelter Source: City of Tustin, MCAS Tustin Specific Plan CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 29 JUNE 16, 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 clothin . St. Cecilia's Distributes food supply to needy populations. Red Hill Lutheran Operates emergency food program where a erson can receive food su 1 3 times a ear. 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 o erated b the Oran e Coun 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 operated by Salvation Army Acquisition of 16 transitional units in Buena Park Salvation Army operated by Salvation Army. The City assisted in acquisition and contributed grant funds to ac uire the units Fourteen (14) new transitional units at Columbus Families Forwards Grove to be operated by Families Forward, formers Irvine Tem ora Housin 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 JUNE 16, 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 Housin Units Percent Chan e Jurisdiction 1990 2000 2007 1990-00 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% Oran e Coun 875,072 969,484 1,024,692 1% 6% U.S. Uepartment of Commerce, bureau of the Census, 1990 Census Report. z 2000 Census Report. a 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 JUNE 16, 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. TABLE HTM-18 TUSTIN RESIDENTIAL UNIT MIX 1990 - 2007 CITY OF TUSTIN Number of Housin Units Percent Chan e Housin T e 1990 % 2000 % 2007 % 2000-2007 Sin le-Famil Detached 5,351 27.7% 8,075 30.6% 8,697 34.1% 7.7% Sin le-Famil Attached 2,530 13.1% 3,459 10.8% 3,807 14.9% 10.1% Multi-Famil 2-4 units 3,089 16.0% 3,836 12.8% 3,110 12.2% -18.9% Multi-Famil 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 99.9%* 25,501 100.1%* 99.9% N/A * Totals do not equa1100% due to rounding error. Source: California Department of Finance; Comprehensive Affordable Housing Strategy 2008-2018. The overall rental vacancy rate for Tustin u1 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 Housin Tenure 2000 2007 Total Occu ied Units 23,831 24,787 Vacancy Rate 6.6% 2.71% Source: Comprehensive Affordable Housing Strategy 2008-2018. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 32 JUNE 16, 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 Percent Number Percent City of Tustin Owner-Occu ied 7,504 40.9% 11,829 49.6% Renter-Occu ied 10,828 59.1 % 12,002 50.4% Total Occu ied Units 18,332 100.0% 23,831 100.0% County of Oran¢e Owner-Occu ied 496,782 60.1% 574,456 61.4% Renter-Occu ied 330,284 39.9% 360,831 38.6% Total Occu ied Units 827,066 100.0% 935,287 100.0% source: Lomprehensroe AttorQable riousmg strategy ZUUS - ZU18. 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 JUNE 16, 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 Number of Units % of Housin 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 25,477 100% Source: Comprehensive Attordable 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 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 34 JUNE 16, 2009 Enforcement program and the Neighborhood Improvement Task Force (NIFT) program.. Together, these programs allow the City to identify housing units in need of 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 slowdown 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. In 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. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 35 JUNE 16, 2009 TABLE HTM- 22 RESALE PRICE OF HOMES AND CONDOMINIUMS TUSTIN AND NEIGHBORING iURISDICTIONS MARCH 2008 Median Home % Change Ci Zi Code Price-March 2008 ~ from 2007 Tustin 92780 $416,250 -34.7% Tustin 92782 $570,000 -9.9% 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 $740,000 -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 2 1.4% 92706 $433,000 -29.5% 92707 $330,000 -40.0% ' Data include all home sales, new and resale, and condominiums. 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. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 36 JUNE 16, 2009 TABLE HTM- 23 AFFORDABLE MONTHLY HOUSING COSTl CITY OF TUSTIN 2008 Unit Size No. of bedrooms Very Low 50%AMI Low 80%AMI Moderate 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. TABLE HTM- 24 AVERAGE RENTAL RATES 2007 CITY O F TUSTIN Number of Bedrooms Number of Units Average Square Foota a Average Rent Studio 200 521 $1,138 1bd/1ba 2,312 733 $1,292 2bd TH 194 1,074 $1,674 2bd/lba 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 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 37 JUNE 16, 2009 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 afour-bedroom units. In Tustin, the average rent for 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 aone-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 aVery-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 bedrooms <_Very Low 50% Low 51-80% Moderate (81- 120% 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 ~ Based on HUll income limits, 2W7. Source: Comprehensive Affordable Housing Strategy, 2008-2018. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 38 JUNE 16, 2009 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 JUNE 16, 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 T USTIN Income Cate o # of Units % of Total Ve Low <50%Coun Median 512 21.5% Low 50% - 80%Coun Median 410 17.2% Moderate 80% -120% Coun Median 468 19.6% Above Moderate 120% Coun Median 991 41.6% Total 2,381 100% Source: SC;AC~ KIiNA, 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 affordability controls; a cost analysis of preserving or replacing the at-risk units; identification of agencies willing to CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 40 JUNE 16, 2009 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 four (4) projects that contain 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 afive-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, 2009. 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 Maderas, 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 JUNE 16, 2009 TABLE HTM- 27 AT RISK FOR CONVERSION IN 2006-2014 CITY OF TUSTIN FEDERAL Tustin Gardens Owner: HUD 221(D)(4) # of Type/Length of Earliest 100 Tenant 1001-br Date 100 very low Project Name, Name, Type(s) of Gov't Section 8 Affordability Potential # of Type Bedroom Built Income Address Address, Assistance Contracts Controls Conversion Units (i.e., Elderly, Mix (if Group (incl. zip) Tel. # (if applic.) (including Date(s) Family) known) Rancho Alisal The Irvine Co. California Statewide N/A Sec. 8) May 2012 72 Family 6 1-br 1987 Excellent FEDERAL Tustin Gardens Goldrich & Kest HUD 221(D)(4) 100 40 yr Loan July 2009 100 Elderly 1001-br 1979 100 very low 275 E. 6th 5150 Overland Ave. Section 8 at 8% Tustin, CA 92780 Culver City, CA 213-204-2050 90230 Rancho Alisal The Irvine Co. California Statewide N/A Income May 2012 72 Family 6 1-br 1987 Excellent 13800 Parkcenter 550 Irvine Ctr. Dr. Community restricted. No 57 2-br Tustin, CA 92680 Newport Beach, Development rent restrictions 9 3-br CA Authority 1998-A 92660-9959 Bond Financing Rancho Maderas The Irvine Co. California Statewide N/A Income May 2012 54 Family 101-br 1988 Excellent 13408 Heritage 550 Irvine Ctr. Dr. Community restricted. No 44 2-br Way Newport Beach, Development rent restrictions Tustin, CA 92680 CA Authority 1998-A Bond Financing 730-3700 92660-9959 Rancho Tierra The Irvine Co. California Statewide N/A Income May 2012 51 Family 7 3-br 1988 Excellent 13202 Myford Rd. 550 Irvine Ctr. Dr. Community restricted. No 44 2-br Tustin, CA 92680 Newport Beach, Development rent restrictions 730-5868 CA Authority 1998-A Bond Financing 92660-9959 Source: Comprehensive Affordable Housing Strategy 2008 - 2018. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 42 JUNE 16, 2009 TABLE HTM- 28 ASSISTED HOUSING INVENTORY FEDERAL Tustin Gardens Owner: HUD 221(D)(4) Type/Length of Earliest 101 Elderly 101 1-br Date Good Project Name, Name, Type(s) of Gov't Affordability Potential # of Tenant Type Bedroom Built Condition Address Address, Assistance Controls Conver- Units (i.e., Elderly, Mix (if (if known) (incl. zip) Tel. # Authority 1998-A Bond (including sion Family) known ) 730-3700 92660-9959 Financing Sec. 8) Date(s) FEDERAL Tustin Gardens Goldrich & Kest HUD 221(D)(4) --- --- 101 Elderly 101 1-br 1979 Good E. 6th 5150 Overland Ave. Section 8 Income 7/13/00 100 Family 101-br 1988 Excellent Tustin, CA 92680 Culver City, CA Community Development restricted. No 44 2-br 213-204-2050 90230 Authority 1998-A Bond rent restrictions STATE Rancho Alisal 13800 Parkcenter Tustin, CA 92680 The Irvine Co. 550 Irvine Ctr. Dr. Newport Beach, CA 92660-9959 California Statewide Community Development Authority 1998-A Bond Financing Income restricted. No rent restrictions May 2012 72 Family 61-br 57 2-br 9 3-br 1987 Excellent Rancho Maderas The Irvine Co. California Statewide Income May 2012 54 Family 101-br 1988 Excellent 13408 Heritage Way 550 Irvine Ctr. Dr. Community Development restricted. No 44 2-br Tustin, CA 92680 Newport Beach, CA Authority 1998-A Bond rent restrictions 730-3700 92660-9959 Financing Rancho Tierra The Irvine Co. California Statewide Income May 2012 51 Family 7 3-br 1988 Excellent 13202 Myford Rd. 550 Irvine Ctr. Dr. Community Development restricted. No 44 2-br Tustin, CA 92680 Newport Beach, CA Authority 1998-A Bond rent restrictions 730-5868 92660-9959 Financing CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 43 JUNE 16, 2009 TABLE HTM- 28 ASSISTED HOUSING INVENTORY LOCAL Tustin Grove Owner. Type/Length of Earliest 21 Family 21-3br Date Very Good Project Name, Name, Type(s) of Govt Affordability Potential # of Tenant Type Bedroom Built Condition Address Address, Assistance Controls Conver- Units (i.e., Elderly, Mix (if (if known) (incl. zip) Tel. # Tax Credits, RDA Loans (including sion Family) 12-2br known) Sec. 8) Date(s) LOCAL Tustin Grove Tract 14934 Redevelopment Agency DDA1 N/A 21 Family 21-3br N/A Very Good Ambrose Lane Tract 15707 Redevelopment Agency DDA1 N/A 8 Family 8-3br N/A New Heritage Place Tustin Heritage Place, County Revenue Bonds, Income 04/2057 54 Senior 42-lbr 2001 Very Good L.P. Tax Credits, RDA Loans restricted, Senior 12-2br 62+ Westchester Park Westchester Park, L.P. Redevelopment Agency Income 150 Family 17-lbr N/A Good (Orange Gardens) restricted. No 10/2029 93-2br 1602 Nisson Rd. rent restrictions 40-3br Tustin, CA 92780 Chatam Village Fairfield Residential Redevelopment Agency Income 210 Family 124-1br 1969 Good (Hampton Square) Corp. restricted. No 2026 86-2br 16331 McFadden Ave. rent restrictions Tustin, CA 92780 Flanders Pointe Tustin Affordable Redevelopment Agency Income 10/2029 49 Family 41-2br 1966 Good 15520 Tustin Village Housing Corp. restricted. No 7-2-br Way rent restrictions Tustin, CA 92780 Tustin Field I Various owners Redevelopment Agency Ownership 45 years of 78 Family 27-2br 2006 Excellent Tustin, CA 92780 income initial 51-3br restricted. purchase date CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 44 JUNE 16, 2009 TABLE HTM- 28 ASSISTED HOUSING INVENTORY N/A - Not available I DDA - Disposition and Development Agreement Source: Comprehensive Housing Affordability Strategy 2008-2018; City of Tustin, 2008. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 45 JUNE 16, 2009 Owner: Type/Length of Earliest Date Project Name, Name, Type(s) of Gov't Affordability Potential # of Tenant Type Bedroom Built Condition Address Address, Assistance Controls Conver- Units (i.e., Elderly, Mix (if (if known) (incl. zip) Tel. # (including sion Family) known ) Sec. 8) Date(s) Tustin Field II Various owners Redevelopment Agency Ownership 45 years of 40 Family 40-3br 2007 Excellent Tustin, CA 92780 income initial restricted. purchase date Arbor Walk Various owners Redevelopment Agency Ownership 45 years of 10 Family 10-3br 2006 Excellent Tustin, CA 92780 income initial restricted. purchase date Cambridge Lane Various owners Redevelopment Agency Ownership 45 years of 36 Family 11-lbr 2006- Excellent Tustin, CA 92780 income initial 13-2br 2007 restricted. purchase date 12-3br Camden Place Various owners Redevelopment Agency Ownership 45 years of 37 Family 22-2br 2006- Excellent Tustin, CA 92780 income initial 15-3br 2007 restricted. purchase date Clarendon Various owners Redevelopment Agency Ownership 45 years of 42 Family 42-3br 2006- Excellent Tustin, CA 92780 income initial 2007 restricted. purchase date TOTAL 10,12 N/A - Not available I DDA - Disposition and Development Agreement Source: Comprehensive Housing Affordability Strategy 2008-2018; City of Tustin, 2008. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 45 JUNE 16, 2009 Replacement/Acquisition and Rehabilitation Analysis: 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 ahigh-priority program for the City. 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 Irvine 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. The cost of providing subsidies for a11100 at-risk units with potential to expire during the planning period to maintain subsidized rents CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 46 JUNE 16, 2009 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 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom $1,103 $1,238 $1,485 $2,125 $2,441 *Efficiency =Studio Apartment FMRs include utility costs Source: County of Orange Section S 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 47 JUNE 16, 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 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 ~ 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 48 JUNE 16, 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 49 JUNE 16, 2009 TABLE HTM- 32 GENERAL PLAN RESIDENTIAL LAND USE CATEGORIES CITY OF TUSTiN Effective Dwelling Unit per Density Desi ation Descri tion Acrea a Ran e 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 a artrnents. 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- s ecific Plan densi residential develo ments. Maximum density m dwellmg 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 50 JUNE 16, 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 multi-family 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 51 JUNE 16, 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 new 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 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 52 JUNE 16, 2009 also able to take advantage of the Planned Community District application process where special considerations are needed. 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 53 JUNE 16, 2009 TABLE HTM- 33 Summary of Residential Zoning Regulations City of Tustin CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 54 JUNE 16, 2009 Minimum Lot Lot Building Front Interior Corner Parking Zoning Area Coverage Hei ht Yard Side Yard Side Yard Rear Yard R -A Residential 7,200 square feet 40 percent 30 feet 20 feet 5 feet 10 feet 5 feet, but no less 2 car garage per dwelling Agricultural District than 1,000 feet clear and unobstructed on open space. E-4 Residential Estate 10,000 square 40 percent 30 feet 20 feet 10% of lot 10% of lot 20 percent lot depth 2 car garage per dwelling District feet width width R-1 Single -Family 7,200 square feet 40 percent 30 feet 20 feet 5 feet 10 feet 5 feet, but no less 2 car garage per dwelling Residential District than 1,000 feet clear and unobstructed on rear 1/3 of lot. R-2 Duplex Residential 3,500 square feet 40 percent 30 feet 20 feet 5 feet 10 feet - 2 car garage per dwelling; one of District which shall be garage space R-2 Duplex Residential 3,500 square feet 50 percent 35 feet 20 feet 5 feet 10 feet 10 feet 2 car garage per dwelling; one of District (single structure) which shall be garage space R-3 Multiple Family 1,750 square feet 65 percent 35 feet 15 feet 5 feet 10 feet 10 feet 2 assigned covered spaces per Residential District unit, plus one unassigned open space per 4 units R-4 Suburban Residential 3,000 2 stories or 20 feet 5 feet 10 feet 25 feet 2 assigned covered spaces per District 35 feet unit, plus one unassigned open space per 4 units CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 54 JUNE 16, 2009 TABLE HTM- 33 Summary of Residential Zoning Regulations City of Tustin Zoning Minimum Lot Area Lot Coverage Building Height Front Yard Interior Side Yard Corner Side Yard Rear Yard Parking MPH Mobile Home Park Minimum 5 acre 75 percent 30 feet Trailer 2 spaces per mobile home lot, District site for mobile park -none. plus I guest space for each 10 home park. Individual mobile home lots. Travel trailer lot -5 feet shall not exceed (measure 10% of total from curb spaces in mobile to actual home park. structure, hitch excluded). P -D Planned Development 10,000 To be To be To be To be To be To be determined 2 assigned covered spaces per District determined determined determined determined determined with adoption of P -D unit, plus one unassigned open With with with with with District space per 4 units adoption of adoption of adoption of adoption of adoption of P -D P -D P -D P -D P -D District District District District District Source: City of Tustin, Zoning Code, 2008. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 55 JUNE 16, 2009 Housing for Persons with Disabilities/Reasonable 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 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 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 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 56 JUNE 16, 2009 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 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. According to the County of Orange's 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, anon-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 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 57 JUNE 16, 2009 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. 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 was 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 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. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 58 JUNE 16, 2009 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 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 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 59 JUNE 16, 2009 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 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 MCAS 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 2 Includes 32 transitional housing units set aside for non-profit homeless providers. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 60 JUNE 16, 2009 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 MCAS 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 City of Tustin, emergency shelters are designated as permitted uses within Planning Area 3 of the MCAS Tustin Specific Plan. Planning area 3 is a five (5) acre site that had been a no cost conveyance to the Orange County Rescue Mission for the development of emergency/transitional shelter that is known as Village of Hope. The City facilitated the development of the Orange County Rescue Mission Village of Hope and waived permits fees as this was apublic/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 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 Hope CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 61 JUNE 16, 2009 also provides food service program of approximately 450 meals daily to the Armory. Based upon the available data obtained from the Orange County Partnership and McKinney Vento 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 City 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 City was told that currently there are 20 vacant units and a minimum of five (5) percent vacancy 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 group housing or multi-family units, and often includes supportive services component to allow individuals to gain necessary 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 facility 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 right as a multi-family 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. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 62 JUNE 16, 2009 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 MCAS Tustin 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 All residentially zoned home, or group home for Permitted six (61 or fewerl properties ~ 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. 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 s 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 63 JUNE 16, 2009 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. 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 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 64 JUNE 16, 2009 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. 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. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 65 JUNE 16, 2009 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 MCAS Tustin. According to the MCAS 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 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 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 66 JUNE 16, 2009 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 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 67 JUNE 16, 2009 TABLE HTM- 34 COMPARATIVE DEVELOPMENT FEE SUMMARY 1 _ Fee Charges Planning Fees Tustin Anaheim Costa Mesa Orange Environmental Initial Determination $95 N/A N/A $230 Ne ative Declazation $125 N/A $910 $1,000 de osit EIR Processing-minor $2,500 $30,000 deposit Consultant cost $3,000 deposit EIR Processin -ma'or $4,000 + 10% Plannin General Plan Amendment $985 $181.10/hr $3,000 plus $3,000 deposit ($12,000 deposit) $125/acre over 1 acre Zone Change $950 $181.10/hr $1,570 $1,000 deposit $10,700 de osit Tentative Tract Map $3,000 deposit $181.10/hr $1,160 $3,000 deposit $10,000 de osit Design Review $3,000 deposit $181.10/hr N/A $1,000 deposit $4,000 de osit Planned Develo ment Review N/A N/A $1,450 $1,000 de osit Conditional Use Permits and N/A $181.10/hr N/A N/A Variances $10,000 de osit ~np~neenn¢ at ~unaiviston Final Tract Map $56/unit $709/lot ($35,450 de osit $85/hr $1,500- $30/unit Sewer Plan Check $31/unit $109-153/hr $3,000 de osit 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 Draina e Plan Check N/A $98-119/hr N/A N/A Gradin Plan Check 182/unit $98-119/hr $224/unit $30/unit Lapitat racittaes st c:onnecnons 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 er $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 Si al 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 Oran e Coun Sanitation District $2,165/unit N/A N/A N/A ~ Comparative fees based on hypothetica110 acre subdivision of 50 detached 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 County, 2007. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 68 JUNE 16, 2009 Processing and Permit Procedures The City recognizes that the myriad of agencies and permit approvals required for a development results in atime-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 authorizes the Community Development Director to approve development plans CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 69 JUNE 16, 2009 when findings can be made that the 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 certainty 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 certainty to developer seeking approval for the development of residential project. 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 70 JUNE 16, 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 71 JUNE 16, 2009 The greatest impediment to homeownership, however, is credit worthiness. According to the Federal Housing Authority, lenders consider a person s 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. a City of Tustin Comprehensive Affordable Housing Strategy, David Rosen and Associates, 2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 72 JUNE 16, 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 typica12,200 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 73 JUNE 16, 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 74 JUNE 16, 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 ashort-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 75 JUNE 16, 2009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 76 JUNE 16, 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 77 JUNE 16, 2009 TABLE HTM- 35 SUMMARY TABLE EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS: 199&2008 New Construction Rehab/Preservation Housin Assistance Income Grou Goal Actual Goalt Actual Goall Actual Ve -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 r~imougn goaLS were not auocatea to specuic mcome group, the Ciity attempted to utilize RHNA percentages to fulfill RI-1NA objectives. Source: The City of Tustin, Housing Element, 2002; Effectiveness of Housing Flement Programs, 2008. REVIEW OF PAST PERFORMANCE State law establishes afive-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 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 78 JUNE 16, 2009 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. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 79 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 80 JUNE 16, 2009 Responsible Results 1998-2000 2001-2008 Effectiveness Program Agency Funding Source Objective 1.1 Available Sites Community City General Assist in the 1474 units 12 live/work units The City will continue this Continue to utilize Planned Community Development Fund; development of new nearly completed program as part of the overall Districts and Specific Plans to authorize and Department, Redevelopment affordable owner and program addressing encourage mixed-use developments (see Redevelopment Agency Funds; rental housing through adequate sites requirements. Zoning Studies Program). Agency, City City and Agency development in WAS Council staff time - Tustin and infill of Housing Element Policies: 1.1,1.8,1.11 involved 3,151 units. 1.2 Mobile Homes Community City General As received No applications 10 new mobile home This program is critical in Continue to maintain the City's mobile home Development Fund; processing received units/spaces created preserving the existing City park zone and process conditional use permit Department, fees (recoverable) (Villa Valencia housing stock. The City will applications as received for manufactured City Council MHP) continue this program to homes. maintain the City's existing mobile home parks. Housing Element Policies: 1.1, 1.3 1.3 Secondary Residential Units Community City processing 2 units 2 units Ordinance The City will continue to Continue to provide opportunities for Development fees (recoverable) completed amending zoning provide opportunities for affordable secondary residential dwelling Department, (135 A Street - code to process affordable secondary units in the Single-family Residential District City Council third unit; second residential residential dwelling units lots where feasible through existing Zoning 13635 Green units ministerally within the single family Ordinance provisions. Valley Drive - was adopted in zoning district. The City will second unit) 2003. strengthen this program by Housing Element Policies: 1.1, 1.7,1.13 promoting the second units as alternative affordable housing options for seniors and lower income households. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 80 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 81 JUNE 16, 2009 Results Responsible Program Agency Funding Source Objective 1998-2000 2001-2008 Effectiveness 1.4 Deed Restrictions Community 1) Tax -Exempt Require appropriate 207 units Created a total of This program has been Require appropriate deed restrictions to Development Mortgage deed restrictions to 243 restricted units successful and the City will ensure continued affordability for low- to Department, Revenue Bonds ensure continued as follows: continue to require moderate -income housing constructed or Redevelopment affordability for low- Tustin Field I - 78 appropriate deed restrictions rehabilitated with the assistance of any public Agency, City 2) Redevelopment or moderate -income units to ensure continued or Redevelopment Agency funds as may be Council Agency housing constructed or Tustin Field II - 40 affordability for low- to legally required. Housing Set- rehabilitated with the units moderate -income Aside Funds assistance of any Arbor Walk -10 households. Housing Element Policies: 1.1 public or units Redevelopment Cambridge Lane - Agency funds as may 36 units be legally required. Camden Plan - 37 units Clarendon - 42 units 1.5 Pre -application Conferences Community City General Continue 11 projects 26 projects This program has been well Continue to utilize procedures for pre- Development Fund; received by developers and application conferences and processing Department City processing applicants. The City will procedures to expedite permit processing. fees (recoverable) continue pre -application conferences to expedite Housing Element Policies: 1.11 permit processing. 1.6 Permit Processing for Low- to Community City General Continue 11 projects 20 projects Consistent with State Law, Moderate Income Housing Development Fund; the City will continue to Ensure that processing of permits for low- to City processing prioritize affordable housing moderate -income housing are fast -tracked fees (recoverable) projects to ensure that with low- to moderate -income housing permits are fast -tracked. permits being given priority over other permit applications. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 81 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 82 JUNE 16, 2009 Results Responsible Program Agency Funding Source Objective 1998-2000 2001-2008 Effectiveness Housing Element Policies: 1.11 1.7 Permit Coordination Community City General Processing of 11 projects fast 26 projects fast The City's Community Continue the services of the City's Community Development Fund; approximately 10 new tracked tracked Development Department Development Department as a central City processing residential projects has demonstrated to be the clearinghouse with individuals assigned the fees (recoverable) annually, 50 projects appropriate department to responsibility of expediting development by 2005 act as the central permits required from various departments clearinghouse. Each project and agencies. received is assigned to a planner responsible for Housing Element Policies:.1.11 coordinating and expediting permit processing among various agencies and departments. The City will continue this program accordingly. 1.8 Tax Increment Financing Redevelopment Redevelopment Assist 620 units by 18 units for Very 19 units for Very During the past planning Provide housing set-aside tax increment funds Agency Agency Housing 2005 Low Income Low Income period, the Redevelopment generated from the Redevelopment Projects, Set -Aside Funds households households, 14 units Agency provided assistance where available, to assist in providing housing 44 unit for Low Income for Low Income using the housing set-aside accommodations for low- and moderate- households households, 23 units tax increment funds. The income households in rehabilitation or new 1 unit for for Moderate Redevelopment Agency has construction projects. Moderate Income households indicated that they will households assisted through continue to offer this Housing Element Policies: 1.6,1.12, 3.2, 4.2 assisted through housing program in the next planning housing rehabilitation period. rehabilitation program. program CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 82 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 83 JUNE 16, 2009 Results Responsible Program Agency Funding Source Objective 1998-2000 2001-2008 Effectiveness 1.9 Housing for the Disabled Community State and Federal Refer individuals to 6 units were During the past planning Require new multi -family housing units and Development programs; City's agencies providing requested to period, the City has required apartment conversions to condominiums to Department General Fund. supportive housing provide for applicable dwelling units to comply with State specifications pursuant to that accommodates accommodation be accessible to the disabled SB 520 for accommodation of the disabled. independent living. for the disabled consistent with the The City will conduct analysis, add Add procedures requirement of Chapter 11 of procedures, and/or undertake appropriate and/or undertake the California Building Code. amendments to existing standards by appropriate Although the City did not removing constraints through the adoption of amendments to adopt a Reasonable a Reasonable Accommodation Ordinance to existing standards to Accommodation Ordinance create a process in accommodating the ensure during the prior planning disabled (to be adopted in conjunction with accommodation to the period, the City Zoning Studies/Program 1.21) and complying disabled by 2003. accommodated the requests. with Chapter 11 of the California Building During the 2008-2014 Code (requires portion of multi -unit dwellings planning period, the City will to be accessible dwelling units) to ensure adopt a Reasonable accommodation for the disabled. Accommodation Ordinance. Housing Element Policies: 1.13,1.15 1.10 Transitional Housing Various Non- Variety of private • Promote, assist, and 3 homes for a 3 homes for a total This program has been very Encourage the continuation of the Sheepfold Profit funds; CDBG facilitate the total of 16 beds of 16 beds successful and the City will homes and Laurel House in Tustin, which Organizations, funds development of maintained maintained continue to provide provide housing facilities for battered Redevelopment emergency and assistance through CDBG homeless women and children. These homes Agency, transients' shelters 90 beds Orange funding to allow for are located in single-family neighborhoods Community through continued County Social continued operation of and provide a much-needed service for Development support of the Services Tustin existing transitional homes homeless women and children. In addition, Department County Homeless Family Campus and to facilitate potential new explore additional program options to assist in Assistance Program facility designed for transitional homes. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 83 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 84 JUNE 16, 2009 Results Responsible 1998-2000 2001-2008 Effectiveness Program Agency Funding Source Objective the provision and funding for other programs • Support local abused and such as transitional housing and single room agencies that neglected children occupancy housing. provide homeless and their parents as services by well as for Housing Element Policies: 1.15,1.16 providing financial emancipated youth assistance of shelter. approximately $5,000-$10,000 annually. 1.11 Temporary Housing for Homeless County of CDBG funds, • Provide 192 Prepared FY • Construction of a 192 This program was successful The City will also support countywide efforts Orange, HUD SHP funds emergency housing 2000-05 beds at the Village of since the City was presented to assist approved homeless providers as part Redevelopment units to single men Consolidated Hope is nearing with an opportunity at the of the MCAS Tustin Reuse effort. Agency and women by 2003 Plan completion (OC former MCAS Tustin at Tustin Legacy (Continuum of Rescue Mission). allowing the creation of Housing Element Policies: 1.14, 1.15 (OC Rescue Care Plan • 6 new units at Tustin planning areas in which these Mission). included in Field I (Salvation type of facilities are Consolidated Army)• permitted by rights (without Plan. . Acquisition of 16 the need of Conditional Use • The City plans to units in Buena Park Permit). The City will assist 200 Applied and (Salvation Army). continue to evaluate City's individuals by received The City assisted in land uses to support PP integrating g g $1,000,000 for acquisition and countywide efforts to assist counseling, OC Rescue contributed grant funds to acquire the homeless approved education, job- Mission and units providers. training and other $800,000 for techniques to stop transitional • 6 new units at the cycle of housing to be Columbus Grove CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 84 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 85 JUNE 16, 2009 Results Responsible Program Agency Funding Source Objective 1998-2000 2001-2008 Effectiveness homelessness. owned by the (Human Options). City at the . 6 new units at MCAS -Tustin. Columbus Grove • Provide 24 units of (Orange Coast transitional housing Interfaith Shelter). for families (Salvation Army) • Provide 6 units of transitional housing for women and children (Human Option -Dove Housing) • Provide 6 units- in long-term 12-24 months -transitional housing for families with children (Orange Coast Interfaith Shelter) • Provide 14 units of 14 new units at transitional housing Columbus Grove - to families with Families Forward, children who are formerly Irvine homeless due to a Temporary Housing short or temporary (units are in Irvine CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 85 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 86 JUNE 16, 2009 Responsible Results 1998-2000 2001-2008 Effectiveness Program Agency Funding Source Objective financial hardship but part of the (Families Who Care, MCAS Tustin base formerly Irvine closure homeless Temporary accommodation). Housing). • Provide for a 60 -unit expansion of Orangewood Transitional Housing for children (to be operated by the County of Orange. 1.12 Implementation Program Redevelopment Redevelopment Review within legal Reviewed Reviewed within This program is required by The Redevelopment Agency will review Agency Fund time frames within legal legal time frames. the California Implementation Plan for each project area and time frames Adopted Redevelopment Law; thus, Comprehensive Housing Affordability Implementation the City will continue this Strategy as required by Redevelopment Law Plan for the Town program in the next planning and adjust as necessary. Center and South period. Central Housing Element Policies: 1.12, 3.2 Redevelopment Project Areas for FY 2005-2006 to 2009- 2010. Currently in process of updating the Comprehensive Affordability CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 86 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 87 JUNE 16, 2009 Results Responsible Program Agency Funding Source Objective 1998-2000 2001-2008 Effectiveness Housing Strategy. 1.13 Housing Opportunities for all Private City General Monitor 174 affordable 174 units in 177 units in East The City will continue to Economic Segments Developers in Fund; Staff time units in East Tustin East Tustin Tustin monitored monitor existing affordable Monitor the implementation of the affordable East Tustin, monitored (72 units at Rancho units in East Tustin. During housing program adopted as a part of the East Community Alisal, 54 units at the 20008-2016 planning Tustin Specific Plan. Development Rancho Maderas, period, the City will expand Department and 51 units at this program by earmarking Housing Element Policies: 1.1, 1.8,1.9, 1.10 Rancho Tierra) redevelopment housing set- aside funds to accommodate the continuation of the terms of affordability of these units. 1.14 Bonding Programs Redevelopment State and Complete analysis of Processed 150 Processed 53 This program is on-going as Issue Redevelopment tax-exempt bonds, as Agency Municipal Bonds; available programs on restricted units restricted units for opportunities are presented. necessary, to accomplish Five -Year Quantified Private Activity as needed basis. to low income very low and low The City will continue the Objectives with such issuance conditioned on Mortgage Bonds (Orange income through the bonding program in the 2008 - having projects ready to move forward. Also Revenue issued Gardens - total County bonding 2014 housing element. utilize other housing revenue bond financing by California 150 units) program (Heritage resources and Low Income Housing Tax Statewide Place - total 54 Credits on new construction and Communities Processed 49 units) acquisition/ rehabilitation projects that help Development restricted units meet the City's affordable housing needs. Authority and to low income others; California (Flanders Housing Element Policies: 1.12, 3.3 Low -Income Pointe - total 82 Housing Tax units) Credits; variety of other sources 1.15 Economic Integration within Sphere County of City General Ongoing request to 10 notices This is an on-going effort to CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 87 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 88 JUNE 16, 2009 Responsible Results 1998-2000 2001-2008 Effectiveness Program Agency Funding Source Objective of Influence Orange Fund; Staff time both agencies. requested ensure coordination between Request that the Orange County Planning the County and the City Commission and the Environmental within the Tustin's sphere of Management Agency (EMA) notice the City of influence. Tustin of any proposed development activities within Tustin s sphere of influence. Housing Element Policies: 1.1, 1.4,15 1.16 Senior Citizen Housing Redevelopment Redevelopment Preservation of 100 at- A site on 54 units for 100% During the prior planning Continue to identify sites that are suitable for Agency; Agency Housing risk and 60 new units Sycamore affordable senior period, the City was able to senior citizens housing projects. These sites Community Set -Aside Funds; by 2005. Avenue was apartments were assist in creation of 495 new will be promoted for private development and Development HELP; Low- identified for a constructed senior housing units and applications will be made for any available Department Income Housing 60 unit senior (Heritage Place at facilitate rehabilitation of 85 subsidy funds. Tax Credits; housing project Sycamore) existing assisted living Private Activity facility. Based upon the Housing Element Policies: 1.1, 1.13,1.15 Bonds issued by 240 senior housing success of this program, this California project of which 153 program will be included in Statewide and units are set-aside the 2008-2014 housing others for affordable units element. are currently under construction (Coventry Court) 85 units of assisted housing operated by Cranbrook was recently renovated (formerly Tustin CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 88 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 89 JUNE 16, 2009 Results Responsible Program Agency Funding Source Objective 1998-2000 2001-2008 Effectiveness Royale). 201 senior assisted/ independe nt living facility was approved and is currently in plan check (Monarch Village by American Senior Living). 1.17 Senior Services Program Parks and City General Assist 850 elderly Assist 920 elderly On-going program. This Develop Continue a comprehensive Recreation Funds annually Annually program will be included in transportation program, case management, Department the 2008-2014 housing information and referral, and shared housing element. program. Housing Element Policies: 1.15, 2.3 1.18 Recycling Single -Family Uses in R-3 Community City General Respond to all requests 1 additional Density bonuses On-going program. This Zones Into Multiple -Family Units Development Fund and for density bonus per unit at 135 A were granted to program will be included in Continue to encourage developers to Department Redevelopment City codes. Street Lennar as an the 2008-2014 housing consolidate individual lots into larger cohesive Agency Funds; constructed incentive for the element. developments. Density bonuses may be Staff time creation of considered as an incentive to consolidate lots. affordable units at the Villages of Housing Element Policies: 1.11 Columbus 1.19 Ongoing Review of Housing Community City General On-going Reviews Reviews On-going program. This CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 89 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 90 JUNE 16, 2009 Responsible Results 1998-2000 2001-2008 Effectiveness Program Agency Funding Source Objective Element Programs Development Fund; Staff time accomplished accomplished. program will be included in From the date of adoption of the Housing Department General Plan the 2008-2014 housing element, prepare an annual report to the Annual Reports element. Planning Commission assessing previous submitted to HCD. years' accomplishments toward meeting Housing Element objectives. Submit the Annual Report to the State HCD. Housing Element Policies: all policies 1.20 Consolidated Plan Community Variety of local, Prepare Consolidated Prepared Prepared On-going program. This The City of Tustin shall prepare an update of Development State, and Plan in 2005. Consolidated Consolidated Plan program will be included in the Consolidated Plan that provides a Department Federal funding; Prepare Action Plan Plan for FY for FY 2005-10. the 2008-2014 housing comprehensive assessment of housing needs, a City General annually 2000-05. Action Action Plans element. housing development plan incorporating Fund and plans prepared prepared annually. Federal, State and local public and private Redevelopment annually. resources, and a one-year implementation Agency Funds plan. Staff time Housing Element Policies: 1.15,1.16,1.18, 2.1, 4.1, 4.2, 4.3, 4.4, 5.1, 5.2, 5.3, 5.4, 5.5 1.21 Zoning Studies Community City General Initiate Zoning Studies Density Bonus Revised Density While the City has utilized To facilitate the new construction goals of the Development Fund, by January 2002 and Ordinance Bonus Ordinance in this program to analyze the 1998-2005 Regional Housing Needs Assess- Department Redevelopment complete any adopted in 1999 compliance with City's current land uses and ment, the City intends to undertake zoning Agency funds proposed amendment recent change in adopted ordinances to studies to consider new programs to in 2003. State Law. facilitate the development of encourage and promote affordable housing housing units, the City will and recommend appropriate amendments for Adopted a Planned expand the study by CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 90 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 91 JUNE 16, 2009 Results Responsible Program Agency Funding Source Objective 1998-2000 2001-2008 Effectiveness actions by the Planning Commission and the Community District examining potential increases City Council. These studies include: to accommodate in residential density as part (1) Creation of zoning provisions which mixed use project in of the "Town Center -A new will accommodate mixed uses in Old Town (Prospect Beginning" implementation portions of the City, particularly in Village). study (see expanded the Old Town Commercial Area; program in the 2008-2014 (2) Provide relaxation of certain Housing Element). development standards and incentives for projects which include affordable housing units upon City Council's approval; (3) Provide a process for individuals with disabilities to make requests for reasonable accommodation to relief from various land use, zoning, or other building rules, policies, and/or procedures of the City. Housing Element Policies: 1.1, 1.11 1.22 Private Streets City of Tustin None necessary Continue 69 private On-going program. This The City of Tustin has adopted standards for streets created program will be included in private streets in new residential the 2008-2014 housing developments. To reduce construction costs, element. developers may be permitted to install private rather than public streets, wherever feasible. Housing Element Policies: 1.17 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 91 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 92 JUNE 16, 2009 Responsible Results 1998-2000 2001-2008 Effectiveness Program Agency Funding Source Objective 1.23 Building Codes City of Tustin, City General On-going '97 Plumbing, 2007 California On-going program. This The State of California has determined that the Community Fund; Staff time Mechanical & Building Codes program will be included in over-riding value is the protection of the Development Building Code adopted the 2008-2014 housing health and safety of residential occupants. Department 1996 Electrical element. Continue to adopt the Uniform Building Code Codes adopted pursuant to the state directives and where local amendments are proposed to reflect local climatic, geologic or topographic conditions, and minimize, wherever possible, impacts on provision of housing. Housing Element Policies: 5.4 1.24 Site Improvements Community Developer funded Evaluate the use of Converted Created assessment The financing of public The requirement for the developer to construct Development special assessment portions of districts at Tustin improvements by a special site improvements often result in passing these Department, district funding at the public works Legacy. assessment district or costs on the housing consumer. These costs are Redevelopment MCAS -Tustin by 2005 assessment community facility district on reflected in the cost of housing that eliminates Agency and its use in other district bonds to a per parcel benefit basis may an even greater proportion of the population developing areas. fixed rate to enable a greater proportion from financially qualifying for the purchase of lower costs. of the market to qualify for housing. The financing of public received housing. The City will improvements by a special assessment district continue this program in the or community facility district on a per parcel 2008-2014 housing element. benefit basis may enable a greater proportion of the market to qualify for housing. Assessment district financing has been implemented in the East Tustin area and is being used to pay for public improvements. The City will assess opportunities to utilize CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 92 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 Program Responsible Agency Funding Source Objective Results 1998-2000 2001-2008 Effectiveness these public improvement financing techniques in newly developing areas such as MCAS Tustin and determine whether they are financially feasible. In creating any new as- sessment districts, an evaluation should be completed of the developer's activity to advance pay off bonds at the close of escrow. Housing Element Policies: 1.11 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 93 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 94 JUNE 16, 2009 Responsible Results 1998-2000 2001-2008 Effectiveness Program Agency Funding Source Objective 1.25 Fees, Exactions, and Permit Community City General On-going Fees waived for Entitlement On-going program. This Procedures Development Fund; 1 project application fees, program will be included in Consider waiving or modifying various fees or Department, Redevelopment permits fees, and the 2008-2014 housing exactions normally required where such Redevelopment Agency Set -Aside inspection fees for element. waiver will reduce the affordability gap Agency Housing 192 beds transitional associated with providing housing of the facility at the Village elderly and for very -low and low-income of Hope (Orange households. County Rescue Mission) were Housing Element Policies: 1.11 waived. Certain building codes requirements were also waived and expired permits were reissued. The City also effectively provided construction management for the project. 1.26 Environmental Constraints Community General Fund; On-going 11 Negative Completed Final On-going program. This Continue to alleviate the necessity of delays in Development Private developer Declarations Program EIS/EIR program will be included in processing, and mitigating requirements Department, cost recoverable adopted; for MCAS Tustin. the 2008-2014 housing incorporated into the development plans by Redevelopment prepared a element. requiring program environmental impact Agency draft and final reports (EIR) on all major development Program Joint projects whenever possible. EIS/EIR for MCAS -Tustin CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 94 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 95 JUNE 16, 2009 Results Program Responsible Agency Funding Source Objective 1998-2000 2001-2008 Effectiveness Housing Element Policies: 1.11 project 1.27 Density Bonus Program Community General Fund, Process all requests for Density Bonus 182 density bonus On-going program. This Promote Density Bonuses to facilitate the Development Redevelopment density bonuses. Ordinance units granted to program will be included in construction of affordable housing. Under Department Agency Housing adopted Lennar/Lyon for the 2008-2014 housing State law, applicants may file for density Set -Aside Funds 11/1/99; one the creation of element. bonuses when projects incorporate 20 percent application affordable units at of units for low-income persons; 10 percent of Columbus Square units for very low-income units; or 50 percent and Grove. of units for senior citizens. Housing Element Policies: 1.11 1.28. MCAS -Tustin Redevelopment Project Tustin Redevelopment Adopt MCAS -Tustin Adopted MCAS Since the City has adopted Area. Community Agency funds Specific Plan and Tustin Specific Plan the MCAS Tustin Project The City anticipates the creation of a new Redevelopment Redevelopment Project and WAS Tustin Area, the program has been redevelopment project area for MCAS -Tustin Agency Area Redevelopment modified to facilitate the site through the adoption of a Specific Plan by Project Area. implementation of the the City and a Redevelopment Project Area by Specific Plan and Fiscal Year 2002-03. Redevelopment Project Area. Housing Element Policies: 1.2;1.6;1.8 Goal 2: Equal Housing Opportunity 2.1 Fair Housing Community CDBG funds Assist approximately 2,289 1,541 complaints On-going program. This The City shall continue to provide housing Development 400 Tustin residents complaints processed program will be included in the 2008-2014 housing counseling services to assure equal housing Department, Fair annually, 2,000 processed CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 95 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 96 JUNE 16, 2009 Responsible Results 1998-2000 2001-2008 Effectiveness Program Agency Funding Source Objective opportunities within the City. The City Housing Council residents by 2005. element. allocates approximately $15,000 annually for of Orange handling tenant/landlord disputes, housing County discrimination cases, counseling, tenant rights, fair housing education, and education within the City. The City will continue to promote the fair housing educational resources offered by adding the services on the City's webpage, Code Enforcement brochure, and the Community Development directory. Housing Element Policies: 2.1, 2.2, 2.4 2.2 Shared -Housing TLC, Parks and CDBG funds Continue 25 cases 50 cases On-going program. This Continue to provide coordination and support Recreation program will be included in to a home sharing program funded in part by Services the 2008-2014 housing the Feedback Foundation, Inc. as part of TLC Department, and element. (Transportation Lunch and Counseling) and Community the Orange County Housing Authority. Development Department Housing Element Policies: 2.3 2.3 Housing Referral Program Police Ci General City • 8,750 referrals to 4,375 social 4,850 social services On-going program. This Continue to provide housing referral services Department; Fund, CDBG social agencies by services referrals; 50 shared program will be included in to families in need of housing assistance and Parks and Funds 2005 referrals; housing referrals the 2008-2014 housing information. This program consists of three Recreation 25 shared element. City departments disseminating information Department; • 50 referrals for housing to the public at all times. Community shared housing by referrals Development; 2005 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 96 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 97 JUNE 16, 2009 Results Program Responsible Agency Funding Source Objective 1998-2000 2001-2008 Effectiveness • The Police Department refers homeless Redevelopment people to different agencies that provide Agency shelters and food for various segments of the population. • The Parks and Recreation Services Department provides housing information and social service information to the senior citizen population. The Community Development Department and Redevelopment Agency provide housing and social service information to all segments of the population during regular city hall business hours. The Community Development Department also serves as a clearinghouse for the Community Development Block Grant Program and represents the City at Housing Authority and OCHA Advisory Committee Meetings. City departments utilize the following documents and also make these documents available to the public: • Directory of Senior Citizens Services CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 97 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 98 JUNE 16, 2009 Responsible Results 1998-2000 2001-2008 Effectiveness Program Agency Funding Source Objective prepared by the Area Agency on Aging Senior Citizens Office • Social Service Assistance Booklet prepared by Connection Plus • Orange County Housing Directory prepared by OCHA and the OCHA Advisory Committee. Housing Element Policies: 2.2, 2.3, 2.4, 2.5 Ongoing Review of Housing Element See Progam1.19 Programs Consolidated Plan See Program 1.20 Goal 3: Ownership Housing 3.1 Condominium Conversions Community City General Impose requirements 14 units No units converted On-going program. This Continue to require developers converting Development Fund, where applicable. (Laguna program will be included in apartments to condominiums to process a Department, Redevelopment Gardens) the 2008-2014 housing conditional use -permit, provide relocation City Council, Agency Housing element. assistance, and/or to provide incentives and Redevelopment Set -Aside Funds assistance for purchase of the units by low- to Agency moderate -income households. Housing Element Policies: 3.1, 3.2, 3.3 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 98 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 99 JUNE 16, 2009 Results Responsible Program Agency Funding Source Objective 1998-2000 2001-2008 Effectiveness 3.2 State Home -Ownership Assistance Redevelopment Redevelopment Assist 30 First time 8 first time No assistance On-going program. This The City's Redevelopment Agency provides a Agency Agency Housing homebuyers by 2005 homebuyers provided program will be included in First Time Homebuyers program utilizing Set -Aside Funds; assisted by the 2008-2014 housing housing set-aside funds. The Redevelopment State and Federal RDA program, element. Agency also applies for and will explore the sources not State use of other funding opportunities such as HELP, HOME funds, and other State and Federal programs. Housing Element Policies: 3.1, 3.3 Bonding Programs See Program1.14 Ongoing Review of Housing Element See Program1.19 Programs Consolidated Plan See Program1.20 Goal 4: Affordable Housing Preservation 4.1 Replacement Housing Redevelopment Redevelopment As necessary 56 units 30 units removed On-going program. This Ensure rehabilitation or construction of an Agency Agency Housing removed (replacement program will be included in equal number of replacement units when low Set -Aside Funds; (replacement complete) the 2008-2014 housing and moderate income residential units are Private complete) element. destroyed or removed from the market as part developers of a specific redevelopment project pursuant to California Community Redevelopment law. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 99 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 100 JUNE 16, 2009 Responsible Results 1998-2000 2001-2008 Effectiveness Program Agency Funding Source Objective Housing Element Policies: 2.5 4.2 Housing Rehabilitation' Community CDBG and The City plans to 63 units 56 units assisted On-going program. This Allocate available CDBG and Redevelopment Development Redevelopment Rehabilitate 100 units assisted with with RDA funds program will be included in Agency funds to finance public improvements Department, Agency Housing by 2005. The City also RDA funds the 2008-2014 housing and rehabilitation of residential units in target Federal Set -Aside Funds plans to increase element. areas. Department of homeownership Housing and opportunities, Housing Element Policies: 1.2, 5.1, 5.2 Urban conserve, maintain, Development and rehabilitate and Redevelopment promote conservation Agency of City's housing stock. 4.3 Housing Authority Orange County HUD, CDBG, Continue 1 developer No contract was On-going program. This Contract with the Orange County Housing Housing Redevelopment contract with processed program will be included in Authority, where necessary, for the Authority, Agency Housing OCHA the 2008-2014 housing development and operation of federally Redevelopment Set -Aside Funds (Tustin element. assisted low- and moderate -income housing Agency Gardens) programs. Housing Element Policies: 1.5, 1.16, 1.17 4.4 Rental Assistance County of HUD Issue 200 certificates/ 632 certificate/ Approximately 350 On-going program. This Encourage the availability of Section 8 rental Orange Housing vouchers annually- vouchers issued certificate/ vouchers program will be included in assistance certificates and voucher certificate Authority 1,000 by 2005. issued annually the 2008-2014 housing program assistance funds through the Orange element. County Housing Authority. To encourage the CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 100 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 101 JUNE 16, 2009 Results Responsible Program Agency Funding Source Objective 1998-2000 2001-2008 Effectiveness maintenance of existing and establishment of new certificates, support the County's efforts to obtain continued Federal funding. Housing Element Policies: 4.1, 4.2 4.5 Affordable Senior Housing Project Community None necessary Maintain 38 units of 120 units 120 units On-going program. This and Senior Board and Care Facility Development affordable Senior maintained maintained program will be included in To maintain 38 units of affordable housing for Department Housing. (100 Tustin (100 Tustin Gardens the 2008-2014 housing Seniors located at 17432-17442 Mitchell Gardens + 20 + 20 Mitchell) element. Avenue (20 units) and a senior citizen board Mitchell) and care facility in operation at 1262 Bryan Avenue (18 units). 18 units maintained Housing Element Policies: 5.1, 5.2, 5.3, 5.4 (Bryan) 4.6 Preservation of Assisted Housing Community • CDBG Preserve 100 units On-going program. This Tustin has four low-income housing projects Development currently at greatest Monitored Monitored Tustin program will be included in with a total of 100 units at risk of conversion to Department, • Redevelopmen risk Tustin Gardens Gardens and the 2008-2014 housing market rate in 2001. If project owners choose Redevelopment t Housing Set- and preserved preserved all at -risk element. to convert the projects to market rate housing, Agency Aside Funds, all at -risk units units coordinate the provision of financial and State and administrative resources to preserve these Federal Funds units as affordable housing. • Low Income a) Monitor Units at Risk: Maintain contact Tax Credits, with owners of at risk units as potential Private conversion dates approach to determine Activity whether Section 8 contracts or affordability Mortgage CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 101 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 Program Responsible Agency Funding Source Objective Results 1998-2000 2001-2008 Effectiveness covenants have been renewed or are planned Revenue to be renewed. Discuss with the owner of the Bonds "at risk" projects the City's desire to preserve the units as affordable. . Variety of other sources b) Tenant Education. Work with tenants of at risk units in danger of converting. Provide tenants with information regarding potential tenant purchase of buildings including written information and any related workshops. Act as a liaison between tenants and nonprofits potentially involved in constructing or acquiring replacement housing. If existing staff is not able to provide adequate staffing for this program, provide outside consultants to support the program. c) Work with Nonprofits. Work with nonprofit housing providers to explore and if appropriate, facilitate acquisition or replacement of at risk units. d) Reserve Fund. Earmark development housing set-aside funds to assist priority purchasers with the down -payment and closing costs associated with purchasing projects at risk. Continue to monitor other potential funding sources, such as State grants and HUD funds. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 102 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 Program Responsible Agency Funding Source Objective Results 1998-2000 2001-2008 Effectiveness Housing Element Policies: 4.1, 4.2, 4.3, 4.4 Mobile Homes See Program 1.2 Deed Restrictions: See Program 1.4 Tax Increment Financing See Program 1.8 Transitional Housing See Program 1.10 Ongoing Review of Housing Element Programs See Program 1.19 Consolidated Plan See Program 1.20 (goal 5: Neiehborhood Conservation CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 103 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 104 JUNE 16, 2009 Responsible Results 1998-2000 2001-2008 Effectiveness Program Agency Funding Source Objective 5.1 Enforcement of Building and Community City General Investigate 150 Approximately 4,285 code On-going program. This Housing Codes Development Fund substandard housing 1,800 code enforcement related program will be included in Continue to enforce building and housing Department cases annually and 750 enforcement inspections the 2008-2014 housing codes to ensure health and safety, rectify Code cases by 2005. inspections conducted. element. violations and thereby improve the overall were character of the community. Enforcement will conducted. include identifying substandard housing units and those that are otherwise identified as a threat to the health and safety of occupants. Actions will be taken pursuant to the law to demolish, rebuild, or correct the code violations. This program includes notification of taxing agencies upon failure to gain code compliance from the property owner to allow City to recover enforcement cost. Housing Element Policies: 5.3, 5.4 5.2 CDBG Funds for Commercial Community CDBG Receipt of $20,000 Two projects Project is This program was Rehabilitation Development annually, completed temporarily temporarily suspended to Continue to make applications for CDBG Department approximately (Rengel and suspended. allow the City to reevaluate funds. Promote the availability of these funds $100,000 by 2005. Heredia) the program effectiveness. for rehabilitation by newspaper articles, However, this program will announcements in Tustin Today (a City be reactivated during the publication that is mailed to all households) next planning period (2008- 2014 housing element). Housing Element Policies: 1.2, 5.1, 5.2, 5.3, 5.4 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 104 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 105 JUNE 16, 2009 Results Responsible Program Agency Funding Source Objective 1998-2000 2001-2008 Effectiveness 5.3 Cultural Resources District Community CDBG, City Rate historic structures 9 units 79 certificate of On-going program. This There are a large number of structures in the Development General Fund, where applicable and rehabilitated appropriateness program will be included in City that were constructed before and after the Department State grants process 20 certificates issued the 2008-2014 housing turn of the century. Continue to utilize the of appropriateness. element. City's Cultural Resources Overlay District to safeguard the heritage of the City by preserving neighborhoods and structures that reflect the City's heritage and past. Through the District, promote the public and private enjoyment, use and preservation of culturally significant neighborhoods and structures. Continue to require that any alteration of a designated resource or construction improvements in the District conform to the requirements of the Cultural Resources Overlay District. Owners of historic landmarks or properties within the District are required to obtain a certificate of appropriateness before beginning any type of exterior construction, alteration, or demolition. A certificate of appropriateness certifies that the proposed changes are consistent with the design guidelines and are appropriate within the district context. Housing Element Policies: 5.5 Ongoing Review of Housing Element See Program 1.19 Programs CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 105 JUNE 16, 2009 TABLE HTM- 36 EFFECTIVENESS OF HOUSING ELEMENT PROGRAMS 1998-2008 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 106 JUNE 16, 2009 Responsible Results 1998-2000 2001-2008 Effectiveness Program Agency Funding Source Objective Consolidated Plan See Program 1.20 Building Codes See Program 1.23 Goal 6: Environmental Sensitivity 6.1 Energy Conservation Community None necessary Require all new units 1,556 new units On-going program. This Require all new construction to be subject to Development within planning required to program will be included in State energy conservation requirements (Title Department period. meet state the 2008-2014 housing 24) as a condition for the issuance of a building standards element. permit. Housing Element Policies: 6.2 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 106 JUNE 16, 2009 TABLE HTM- 37 PROGRESS TOWARDS OBJECTIVES 1998-2008 CITY OF TUSTIN Quantified Unit Type/Description Objectives Accomplishments ~ Very Low Low Moderate Upper NEW CONSTRUCTION Adequate Sites (new units) 1,378 1,378 0 0 884 494 MCAS Tustin new housing 2,599 1,573 70 64 109 1330 MCAS Tustin Emergencyz 192 192 192 MCAS Tustin Transitional Family3 50 49 49 MCAS Tustin Social Servicesr 60 90 90 Granny Flats 10 0 New Owner Housing 432 953 17 128 77 731 New Senior Housings 97 54 54 Density Bonusb 160 182 Recycling of SFD to MFD 25 0 Subtotal 5,003 4,289 472 192 1,070 2,555 RHNA (1999) 3,298 694 489 778 1,337 Difference 1,705 (222) (297) 292 1,218 REHABILITATION Owner Occupied Housing 40 Rental Rehabilitation Loans/Grants 120 56 19 14 23 Multi-Family Acquisition/Rehab/ Conversion/ Resale 100 Multi-Family Acquisition/Rehab/ Conversion/ Rental 200 Total Rehabilitation 460 56 19 14 23 PRESERVATION Rancho Alisal 69 69 8 61 Rancho Maderas 54 54 6 48 Rancho Tierra 51 51 38 13 Affordable Senior Housing -Mitchell 20 20 12 8 Senior Board & Care -Bryan Ave. 18 18 18 Old Town Residential 29 Tustin Gardens 100 100 100 Total Preservation 341 312 164 148 OTHER AFFORDABLE HOUSING ls~ Time Homebuyer Down Payment Assistance Loans' 40 6 6 County Mortgage Credit Certificates a 0 Section 8 Rental Voucher Assistance 1,500 3,500 3,500 Shared Housing Referrals 75 50 50 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 107 JUNE 16, 2009 TABLE HTM- 37 PROGRESS TOWARDS OBJECTIVES 1998-2008 CITY OF TUSTIN Unit T e/Descri tion Quantified Ob'ectives Accom lishments ~ Ve Low Low Moderate U er Deed Restrictions e 620 243 70 64 109 Homeless Housing Partnership Program 242 Emergency Shelter ~~ 252 331 331 Total Other Affordable Housing 2,729 4,130 3,951 64 115 Total Non- New Construction 3,530 4,498 4,134 226 138 i~uuioer or umts. z Orange County Rescue Mission includes: 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. ~ Tustin Family Campus (Orange County Social Services Agency) - 90 beds s 54 units at Heritage Place and 201 units at Monazch Village ~ 182 density bonuses granted to Lennaz at Villages of Columbus Temporarily suspended. s Program suspended. " 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 ~° 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 Yeazs 2005-2006 to 2009-2010 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM 108 JUNE 16, 2009 APPENDIX A AFFORDABILITY GAP ANALYSIS CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM JUNE 16, 2009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM JUNE 16, 2009 City of Tustin Comprehensive Affordable Housing Strategy . Appendix B Affflrdability Gap and Leveraged Financing Analysis February 15, 2008 Pre'ared for: City of Tu:tin Submitted By: David Paul Rosen & Associates Northern California David Rosen, Principal 1330 Broadway, Suite 937 Oakland, U 94612 25Q9 Phone: 510-451-2552 Fax: 510-451-2554 e-maiL• David~DRAConwhanis.com www.draconsultants.com Southern California Nora Lake-Brown, Principal 3941 Fiendrbc St Irvine, CA 92614-6637 Phone: 949-559-5650 Fax: 949-559-5706 e-mail: NoraODRAConsult~nts.com www.draconsultanb.com Table of Contents 1.0 Executive Summary ........................................................................:........... 1 S types ....................................................... 2.0 Housin Proto ............................. 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 ....................................................:............................... 1 b 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 Marstion 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 Hornes .................................................................... 19 4.3 Land Acquisition Costs ........................................................................ 20 4.4 Development ImpaQt 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 ,` 29 6.0 Per Unit Affordability Gaps ........................................................................ 32 7.0 Ren ter Leveraged Financial Analysis ........................................................... .......................... Costs ti t d C 32 7.1 ........................................... ruc on ons Har 7.2 Eligible Basis and Tax Credit Equity Calculations ................................. 32 7.3 Income Targeting Scenarios, Occupancy Standards and Affordable Rents ...............................:.......................................... 33 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 Ma)ysis Page li List of Tables I6~LE ~ Pd~€ 1. Homeowner Per Unit Subsidy Requirements .................................... .......... 4 2. Tenant Per Unit Subsidy Requirements .......................................... ............. 6 3. Average Per Unit Subsidy Requirements, Leveraged Financing Scenarios ....:............... ............................................................................. 8 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 Unii 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 .............................................................................................. 2 3 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 Housing Prototypes .................................................................................... 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 Gap and Leveraged Financing Malysls Page iii Ci of Tustin Affordability Gap and~everaged 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 to 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 planninS-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 1009'o affordable to households at each of the income levels modeled (or in the case of the leveraged fihancing 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 ,l 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 Ctty of Tustin and Tustin Redevelopment Agency for capital pianning purposes. DRA recommends ~ tfiat the subsidy provided to any individual housing development be determined based on analysis of the specific economic conditions pertaining to that project 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 pu~~, pltA, 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 dTustin Affordability Cap and leveraged Financing Anah~sis 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 IandCorcl 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 proeotype, the gap analysis calculates the difference between total development costs and the conventional mortgage supportable by n~ operating income from restricted rents. For owners, the gap is die difference between development costs and the supportable mortgage plus the buyers 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 gaps for the owner prototypes "are summarized in Table 1. The gaps have been calculated for the following three income levels:. Affordable Income Limit Housing Cost ] . Very Low Income 50%. of Anna Median Income (AMI), adjusted 309'0 of 50°Yo AMI for household size 2. Low Income 80% Of AMI, adjusted for household size 309'0 of 7090 AMl 3. Moderafie Income 120°Yo of AMI, adjusted for household size 359:0 of 110% AM! Depending upon the source of wbsidy 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 Califomia 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 Tabk 2. The gaps have been calculated for the following three income levels: City of Tustin Affordability Cap 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°k 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 housin~ per unit mortgage assistaP , as available, genera y reduces the gap on a dollar for do lar basis. For rental deveoo ments, 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, 99'° Low Income Housing Tax Credits (Federal only)'; 2. 49'o tax credits with tax-exempt bonds; and 3. 496 tax credits, tax-exempt bonds, and the Multifamily Housing Program (MHP) of the California Department of Housing and Community Development (HCD). The assumptions and findin~ are described in the followin section. The sources and uses for each leveraged rents scenario are summarized in Tab 3. ~ Since Orange County was designated as a Difficuh to Develop Area (DDA) by HUD in ?007, projects in the County are eligible fora 13096 basis boost for the cakulation of Federal tax credits but are not ~~ eligible for State tax credits. City of Tustin Affordabilfry Gap and leveraged Financing Analysis Page 3 Table 1 Homeowner Per Unit Subsidy Requirements' City of Tustin 2008 Very stow Low Moderate Prototype/ nit Bedroom Count .Income= Income' Income' Owner prototype Art' Attached Townhome Two Bedroom 5366,000 5322,400 5195,500 Thnx Bedroom (387,800 5339,400 5198,400 Four Bedroom ;426,800 ;374,600 ST22,300 Average ;393,500 5345,500 5205,400 Owner Prototype ~ Stacked Flat Condominium One Bedroom 5258,600 ;219,900 5107,100 Two Bedroom 5259,000 5215,500 588,600 Three Bedroom 5267,100 5218,800 ;77,800 Four Bedroom 5290,500 5238,300 586,000 Average 5268,800 5223,100 ;89,900 Owner Prototype ilia' High Density Condominium One Bedroom 5407,500 ;368,800 5256,000 Two Bedrooom 5432,500 5389,000 S262,100 Three Bedroom 5542,000 5493,700 5352,600 Four Bedroom 5569,400 5517,200 (364,800 Average 5487,900 5442,200 ;308,900 Owner Prototype l14a Mixed Use, Ground Floor Retail ~ One Bedroom ~ 5491,700 5453,000 S340,200 Two B~rooorn 5537,400 5493,900 5366,900 Three Bedroom 5595,000 5546,600 5405,600 A~~~ 5541,300. 5497,800 5370,900 Source: David Paul Rosen & Associates City dTustin I-(fordability Gap and Lev~aaged Financing Malysis ~ 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; prope1'tY insurance costa of S50 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 s70, 764. ' 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. '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 +t1 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 ° Owner prototype x2 average unit size is 1,142 square feet. Average per unit development cost is ;339,591. Per unit development cost: are adjusted by unit size/bedroom count. Owner Prototype r3 average unit size is 1,350 square feet. Average per unit development cost is 5558,617. Per unit development costs are adjusted by unit size/bedroom count. ° Owner Prototype x4 average unit size is 1,515 square feet. Average per unit development cost is 5608,112. Per unit development costs arc 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 Renter Prototype Stacked flat Apartments Unit Bedroom Count One Bedrooms Two 8edroom6 Three Bedroom' Four Bedroom° Average Very Low Low Moderate income= Income' Incomes 5311,300 $294,600 5211,400 $348,000 $329,300 5235,600 5321,800 S301,000 $197,000 5402,000 $379,600 $174,800 5345,775 5326,125 $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 5300, 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. ' 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 reM is 5847. ' 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 51,033. ' 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 51,963. 1 s One bedroom unit is 750 square feet. Per unit total development cost is S321,075. ,/ `Two bedroom unit is 950 square feet. Per unit total development cost is 5362,224. Three bedroom unit is 1,050 square feet. Per unit total development cost is 5382,799. ° Four bedroom unit is 1,250 square feet. Per unit total development cost is 5423,947. City of Tustin Affordability C'ap and Leveraged Financing Malysis Page 7 Table 3 Average Per Unit Subsidy Requiremenb Rental Housing Prototype: Stacked Flat Apartmenb Leveraged Financing Scenarios City of li~stin 2006 Levera Financing Scenarios 9% Tax Credib 496 Tax Credits, Tax-Exempt Bonds 496 Tax Credits, Tax-Exempt Bonds, Multi-Family Housing Program (MHP) Renter Probtype Stacked Flat Aparbmenb ss~,ooo s~4o,~00 ;109,600 s Sourra» David Paul Rosen & Aasociabes. City of Tiutin Affordabliity Gap and Leveraged financing Malysis 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 homebuyer/tenant income level. In the leveraged financing analysis, described in Section 7.0 below, we model the renter housing prototype assuming use of the low Fncome Housing Tax Credit and tax-exempt bond programs. 3.Z Target Income Levels The affordability gap analysis uses income limits as commonly defined by HUD, California Redevelopment Law, Califomia 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 usin ,HUD family size adjustment factors. The affordability gap calculations are ba on the 2007 median household income of 578,700 for Orange County. Gty dTustin Affordability Gap and Leveraged Financing Analysis Page 9 Table 4 Owner HawGq hololype rrgecb City dTustln 2008 Owrkr 1 Owner 2 Owner 3 Owner 4 Stadaed Flat• High Derutty Mixed Use, PROTC1TYrE AttacFmd Townhome Condominium Condorninlum Ground Flag ReL UNTf COUNT 234 Units 325 Unks 400 Units 20 UnNs ZONING R3 R3 PC C2 P NUMBER OF STORIEg• 2S Slacks 2 Storks 4 Sbries 3 Stones Q Sacks Redd.) CONSTRUCTION TrrE Type V Type V Type V Type V NAaod Frame Wbad Frame Nbod Frame Wood Frame DENSITY (DU'S/Aaro) 18.0 25.0 45-50 29.0 FLOOR AREA RATIO BAR) 0.5 0.7 1.5 1.5 LAND AREA (Acres) 13.00 Auer 13.00 Aces 8.00 Acres 0.69 Acres UNTIS BY iR COUNT One Bsdntae 0 7S 100 4 1Ma Bedreosu 90 100 125 6 Tone Redrawn 90 100 125 10 Four Bedroons 54 50 50 0 UNIT SIZE Wet Square FeeO One Bedroom WA 950 1,000 1,100 Two Bedreosu 1,050 1,050 ~. 1,150 1,400 Tlrrae Ra~oaa 1,300 1,200 1,650 ~ 1,750 Four Bedroom 1,700 1,500 1,800 WA Ar.rap 5geure Feet 1,296 1,12 1,350 1,S 1S iLDG. SQ. FEET Net LlvlssfAs~ 303,300 371,250 540,000 30,300 CarurwnRy Space 2,500 2,000 0 0 Total Nd Bldg. Sgaae Fret 305,800 373,250 540,000 30,300 rrF OF rARKING Garage Carport P~rking Structure Garage IO.OF rKG. SrACES Garage 468 0 0 40 C~rporf 0 650 0 0 Opal S9 82 100 10 rarlcing Strs+etwe 0 0 700 0 )TAL S-ACES 527 732 800 50 Ciry d7intln AeordTbilMl' G+V aid lavragad Pinridnt Ana!rds rap t0 Tab1a s RewW Flada~ Trotot~e Oily d~Un ZOOr H1OTp~•R Ranttr Proiatype Stsdud Flat uNIT t::ouKr 32s u~at TYTE OF MODUCT Stadad Fats zoNlNC ~ NUMBER OT STORIE3 ~ OONSiRUCT1ON TYTE y~~ FYame O~7Y ~U'f/Ats~) 25.0 FLOOR AREA RATIO 6AR1. 0.6 L/MID AREA N~~1 13.00 Aas UNITS /Y RR COUNT Owa 4droo~ ~ Two Rdrooi~ 100 TIY~af ~~ 100 For Raiot~ 50 ManaRarlt UnRs (two Ra/eooal) ~ UNR SIZE tN~ fq~ Faeq . Ona ~~ 750 Tiw Ratleoan • ~ 950 lime Raboo~ 1,OS0 For Radroaw 1,250 At~aM ~a Faal 9~ RIDG. !4 F#F ~ ~~~ 319,130 0 ~r Fast 319,1 SO TYNE OF MRKINC ~l^i StuctaA NR Oi -ARIIING STAGES ~~ 0 ~~ 0 ~„ al Farfd~ Skuclwra 650 TOTAL STACK 731 A~Ev~LbiHly wP end terenyd ~ N~'~ Iq~ 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 afforcJable 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 inwrance, utilities and homeowners association (HOA) dues. Tabk 6 Affordable Housing Cost Definition: City of Tustin income Level Extremely low income (30°x6 of AMI and below) Very low income (greater than 30% to 50% of AMI) Low income (greater than 50% to 80% of AMI) Moderate income (greater than 80°16 to 120% of AMI) AMI =Area Median Income 3.4 Occupancy Standards Tv~e of Housing 8so>`al Ownersh~R Not Analyzed 30°'o Of 50°Yo AMI 30°'0 of X70% AMI 3096 of 11096 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. . --- - - City of Tustin Affordability Gap and Leveraged Financing Analysts 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 Boss rent (or affordable housing cost). For owners, the affordable mortgage principal and interest payment is calculated by determinin$ the affordable housing cost and deducting costs for property taxes, property insurance, utilitie$ 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. ~r 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 l electricity or gas. 1 City of Tustin Affordability Gap and Leveraged Financing Ma)ysis Page 13 Table 7 Current Monthly Udiity Allowances County of Orange Housing and Community Services Renter Households ] Bedroom S54 2 Bedroom S68 3 Bedroom ;9g 4 Bedroom 6109 Owner Households Bedroom Size ~ Monthly Utili Allowancez J 1 Bedroom s93 y 2 Bedroom ~ ] ] 0 3 Bedroom s ] 48 Source: County of Orange, Housing and Community Services, effective Ocoober 1, 2006. 3.6 Affordable Net Reno 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). ~ includes ekcMc utilities (heating, cooking, water heating and bask electric) and water, trash and sewer. City of TusBn Affordability Gap and Leveraged Financing Malysis Page i 4 Table 8 Affordable Net Rents qty of Tustin 2008 Unit Size (No. of Bedrooms) Very Low 5096 AMl Low 8096 AMt Moderate 1 TO% AM! 1 Bedroom 5733 5890 51 677 2 Bedroom 5817 994 S 1 880 3 Bedroom 5886 1083 2 066 4 Bedroom 953 1 166 2 228 Table 9 Affordable Monthly Housing Cost ~ City of Tustin 2008 Unit Size. (No. of Bedrooms) Very Low 5096 AMI Low. 8096 AMl Moderate 120% AMI 1 Bedroom 787 1 102 2 020 2 Bedrooms 885 1 240 2 272 3 Bedrooms 5984 1 377 2 525 4 Bedrooms 1 062 1 478 2 727 ~ US. Department of Housing and Urban Devebpment published 2007 very bw Income Iimtts, adjusted proportionally fa 6096 of percentage of AMI category. Gross rents are cakulated assuming an occupancy standard of 1 person per bedroom plus one, consistent with Califomia Redevelopment Law. Net r+~ arc calculated assuming 3096 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 bw and median income limits. Owner affordable housing costs arc calculated assuming an occupanq standard of one person per bedroom plus one and 3096 of gross income spent on housing for low income households and 3596 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 indinct 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, Rentai. Housing Development The following developers and advisors were interviewed regarding rental housing development costs: ~ ~ ... . • Laura Archuleta,lamboree Housing • Jerry Trimble and Michael Wong, Keyser Marston Associates 4.1.1 )amborce 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 yenta( 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 S94 to X185 per square foot, with the average cost at 5155 per square foot. The average hard cost of the prevailing wage bids is about 22 percent higher at 5198 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 x171 City d Tustin Affordability Gap and Leveraged Financing Analysis ~ Page 16 to 5342 per square foot for this product, with the average cost at 5239 per square foot. The prevailing wage bids average S270 per square foot hard construction costs. Five of these bids include land cost estimates that range from S21 to S79 per square foot. The average land cost is S43 per square foot. 4.1.2 Keyser Marston Associates (KM~ 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 5165 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 Homes Etelow we review the results of these interviews and detail the hard costs that the interviewees have seen in recent housin developments in the Tustin area, especially those developments that are similar to the ~ve prototypes examined in this analysis. City of Tustin Affordability Cap and leveraged Financing Malysis 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, hare! 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 5106 per square foot and hard costs were x136 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 developrrtent experience in Orange County. For Owner Prototype g1, Attached Townhomes, Olson estimates ;78 per square foot in hard costs. For Owner Prototype g2, Stacked Flat Condominiums with podium parking, hard costs were estimated at ;82 per square foot.: Olson also estimates 5115 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 x4, Mixed Use Condominiums, Olson estimates 585 per square foot hard costs. 4.2.4 Keyser Marston A~ociates (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. Ciry of Tustin Affordability Gap and Leveraged Financing Malysis 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 530 per square foot for parking construction. For a townhouse product with 13 dwelling units to the acre, they estimate hard costs. at 596 per square foot. A mixed use, Texas Wrap style project with 75 dwelling units to 'the acre is estimated to have 5119 per square foot hard costs with additional S35 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 C1M 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 5130 to 5140 per gross square foot for hard costs, with additional costs of 525,000 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 townhomes'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 576 per square foot, inclusive of two-car garages within the building envelopes. The land cost for this project was 5133,000 per unit or approximately 579.50 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 598 per square foot and the land cost was 572,600 per unit or 532 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 595 to 599 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 S90 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 5200 per square foot while those with podium parking have hard costs around ;225 per square foot. 4.2.8 John Laing Homes )ohn 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 S82 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 Coab Harris Realty Appraisal prepared an Appraisal Report for the City of Tustin, Community Facilities District No. 66-1, Tustin Legacy/Columbus Villages in May 2007. Of the 16 Tustin Legary 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 ConfparaWe Land Price: City of Turtln 2008 Land Sale Data Land Cost, per squant foot Lot Density, unita per groom aite acre No. 1 ;53 / SF 16.6 units/acre No. 6 ;46 /SF 16.3 units/acre No. 9 ;47 /SF 16.2 units/acre No. 9A ;33 /SF 16.2 units/acre Average S45 /5F 16.3 uniWacre Ciry of Tustin Affordability Gap 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. Table 11 Per Unit Land Acquisition Coat Assumptions by Prototype City of Tustin 2008 Prototype Land Coat Per Dwelling Land Cost Per Square Foot Unit Grow Site Area Owner # 1 Attached Townhome 5109,000 545 Owner ~M2 Stacked Flat Condominiums 575,000 543 Owner t3 High Density Condominiums 552,000 Sb4 Owner ~4 Mixed Use Condominiums 5~•~ Sb0 Renter g1 Stacked Flat Apartments 570,000 543 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 Agenry 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. 1 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 ~C4, 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 ~ -ro~aitg~ ~ ~ owns 1ioa:~ -t'~hP« Ctq dAad. 2oa Proootype ~4: Pnxolype t11: Prototype t2: ProEDtype ~3: Mized Ute Amt:hed Bladed Flat High Denelty Ground Floor ! Cotxtty Sanltatlon Dhtrict 51,0 Orarye Cots?tty Mhtw Dhtrld f 7 drtwy WpA~IP tr siM pbxi 114,000 514,000 ;12,000 56,ti00 ~ sbooo saooo s5,2eo e itt~rownents s/aooo s1 sl5,ooo x,6oo r QwINy Mwtagarrtant Plan SS tSA00 f2 51,7x2 ~ ~~~ Plan (12.000 112,000 51q,00D (3,300 .. ~~ -- _ ttnnen tt S7_sae i1_t10 .. `~'e•' t~VIe1M f3,~ i3•~ i3,W~ al,ae0 ltaeeM+p 53.000 S3, S3,ON fi, PrtilT„a ~ 61,335 61,336 s1,33s seal / CatdYiortai the Parmk so ~ s1,9N -- 1 Envltorartere Impact Repon ~ (,,333 (1,333 :o / ~ Dedar3tloe so So f125 Pr.cYe ~ P.rrolt F.. s9 (9,060 16.273 3690 _. ~~~ :9 ~ ~ :690 • Plarv eanstn-edan F.e ~ s126,10D ft ;192.600 f6.3 /ulldrtg Fltrmit Fie 364,BS9 57e,96S f113,969 33,3se . planning Plan CFtack lee !9, 511,034 f13,9a6 5476 Bulldog Man Chedt 545,401 SSS,268 57!,778 32,37a planning Yrpeetlert Fie 512.972 515,791 522.794 5 tluildAtg tssuanoe Far 535 53S t35 f23 5ror; Mohan ~ateltalwsttart Program Fee u !3,116 54,532 5182 Eledrieei PbnMt Fee 522,413 522,415 522,413 314, eAadtarYcal Prrmtt Fie 31 515,791 S1e,5S0 5661 AAacitankal Flan Cltedt Fie Se 57.89! 5!,271 5333 Pltariring t~ertnlt lee !33.336 f35,733 Wrt53 f t,7 pNmbing Plan Check Fee f14~ 517,867 522,726 Se65 Orange towtcy Fite Awltaity ^ Fee 333 523 514.4!10 31,465 Tustln UNlied Sdtool Dhtrld Fes -Level 2 52,060,308 52,509,650 53,650,400 3135,1 K t~ttirrtby Fee S 2.981,464 5 3,95iai2 5 6,795,360 5282,896 Trarepaetation SyNem Mpow~ _ _ -- - - - _ - _ _ -- (1) inck+des fag associated with residential portion ddevelaprrNrtt anlK Far lass assessed pe- Prol«4 caladatiosr asauns residertdal potion d pro~ea k: 669 dtotab Sources CRy dTuWn Canserttsnlq Developnrertt Department Plateting Ohdalon, ii+stln Comrrwnky Redevelopnteel . Agertcp, City dTwtirt PubBc Wbrlo~Engineerwtg Daper4rte(tC David Pltd Rawl 8 Associates. 1 CrydTuNM J Aitoidabaay G+P and :aYer~ F~ntYg /W tysb ~ ~ Table 13 Devebpntent Prooenuta and Impad Fee Assuntptlons Rental Hotssine hototrpe t3ty of Titstbt 200A Rental Promtype t1: Stacked Flat ilwrtmenb Number of Units - 32S Unfb Ctranat County SsMtation District f1,133,i 54 ~ aana. County water otstrkt f /62,500 Tra ~~ 13 !25 w i ~ 909 Desiyt Review Cfantadvi Map, to study, iminary ~1P +~ ~ ~ s14,oo0 F1nal ~P f6,000 Pubik Improvernerus ft 8,000 WaMr QudllY ManaaatrwK Plan fS,000 ~~ Ana Plsn f 12,000 Pbrmk b f 10000 S I PW SenJces 6S 000 o~evelopmen Meernent f0 vesidn Re1~" 53,000 TintatMe 7tact Map f0 Ftnal 7iact Map S0 Caditlonei Use Permtt f0 Envkonment bnpact Repot Fee f1,333 NaptMe Declaration :0 ~ ~'aO1ng ~R+~ 59,060 k Intprovemenes Parmlt Fier f9,060 [orotrucNon Fee . f15s,950 ~6 Pennlt Fee ~ f60,677 ~ Plsn Check Fee fil,49S Ilea Plan Check (41,474 ~ irupe~lon ~ (12,135 lei bsuertce ~ s35 ~ INodon lnstrunentstbn Program Fee 52,377 ~ ~+u ~ SZ2,415 ~~ l~srrttit ~ f12,1tid srdcal Plan Check Fie 56.0!4 dna t°lermit Fee f2e,26e ana Plan Check Fet (14,134 r Cour>ty Fire Audrarlty Irbpe~lon Fie ~ i 1 a 100 tlnMed Sohoo! Dbtrkt Foes - Le-~el 2 (2,157,454 rl' ~ f3,9S6,tia2 h- Souroe:. City of 7listin Community Devciopnrcnt Department Piannlna Division, Tusdn Community R~ Agerx~ Cqy of Tustin Public Wbrks/Enaineering Department, David Paul Rosen b Associates. Gty dTmun Afto~dsbft;yr Cap and Lerersged Finsncina Analysis Page 23 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 buildin area and do not include site improvement costs. Hard costs will vary with the level of f~nishes 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 im rovement costs can also vary widely depending upon the extent of existing infrPastructure and unique site conditions. For the affordability gap analysis, we model the prototypes assuming amarket-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 Tabk 14. The hard costs are inclusive of parking conswdion. City of Tustin Af/ordability Gap and leveraged Financing Analysis Page 24 Table 14 Per Net Square Foot Hard Construction Cost Assumptions by Prototype city of Tustin 2!108 Prototype Hard Construction Cost Per Average Site Improvement Net SF Buildin Area Cost Per Net SF Site Area Owner ~1 S95 - X25 Attached Townhome Owner ~C2 S85 S2b Stacked Flat Condominiums Owner t3 X195 X30 High Density Condominiums Owner #4 ~ 155 X20 Mixed Use Condominiums Renter A~1 X155 S20 Stacked Flat Apartments Source: DRA 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, general conditions, developer overhead and profit. Hard costs include butldtng and parking construction costs. Soh 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 Buildin 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 Malysis 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 housingg,, developer profit is typically measured as a percentage of gross sales revenues (typically 7 - 9 percent), rather than total development cost. However, this measure dies 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 159'0. 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 reborn 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 1596 of total development cost .- Total development costs for the prototypes are presented in Table 15 for the owner prototypes and Tabk 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 S.1 General Operating Cosh, Rental Prototype Annual operating costs are estimated at X3,600 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 396 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 Affordabillry Gap and leveraged Fin~rxing Analysis Page 26 Table 15 Estimated Prototype Development Costs Owner Housing Prototypes City of TustM 2008 Owner 1 Owner Z Owner 3 Owner 4 Attached Stacked Flat High Denshy Mbced Use, Townhome Conklrnrrinium Condominium Ground Floor Gross Site Area in Acres 13.000 13.000 8.000 0.689 No. of Units 234 325 400 20 Parking Spaces 527 732 800 50 Net Square 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 10096 10096 10096 669E Total Gross SF Bldg. Area 305,800 373,250 540,000 45,909 Land Acquisition Costs 525,482,600 524,350,040 520,908,800 51,188,000 Site Improvements 514,157,000 ;11,325,600 ;10,454,400 ;396,000 euilding/Parking Hard Costs ;29,051,000 531,726,250 ;1.05,300,000 ;4,b96,500 Hard Cost Contingenry ;2,160,400 52,152,593 ;5,787,720 5254,625 ArchJEngJConstr. Supervision ;1,296,240 51,291,556 53,472,632 ;152,775 City Development Impact/Processing Fees ;7,404,546 ;9,514,995 ;15,937,526 ;750,609 Constrution Loan Fees 5919,647 ;928,754 ;1,859,558 ;106,483 Constriction Interest ;6,644,448 56,710,244 ;11,457,346 52,516,665 Ernironmerrcal Phase 1 ;7,500 ;7,500 ;7,500 ;7,500 Soils Testing ;40,000 540,000 540,000 520,000 Property Taxes 5259,248 5258,31.1 ;694,526 ;30,555 Inwrance ;1,296,240 ;1,291,556 ;3,472,632 5152,775 Sales Commissions 51,081,937 51,092,651 ;2,187,715 5125,274 SellingKlosing Costs ;5,409,687 ;5,463,256 ;10,938,576 ;626,371 Developer Overhead 54,327,750 ;4,370,605 58,750,861 ;501,097 Developer Profit 58,655,499 ;8,741,209 ;17,501,721 ;1,002,194 TOTAL PROJECT COST ;108,193,743 5109,265,118 ;218,771,513 ;12,527,424 PER UNff 5462,366 ;336,200 5546,929 5626,371 PER NET SF ;353.81 5292.74 5405.13 ;413.45 TOTAL COST, EXCLUDING LAND 582,711,143 584,915,078 ;197,862,713 ;11,339,424 PER UNR ;353,466 5261,277 5494,657 ;566,971 PER NET SF 5270.47 5227.50 5366.41 ;374.24 Ciry o(Tustin Affordability Gap and Leveraged Financing Malgsis Page 27 Table 16 Estimated Prototype Devebpment Cab Rental Housing Prototype: Stacked Flat Apartments Chy of Tustin 2008 Renter Prototype Stacked Flat Apartmerds Acres ~ 13.000 Number of Units 325 Parking SPaoes 731 Net Square Fad Living Arra 319,150 Total Net Square Fret 319,150 Ratio Net/Gross SF 10096 Total Gross Square Fret Building Area 319,150 Land Acquisition 524,350,040 Site Improvements 511,325,600 •~~•~ . Building/Parking Hard Costs 649,468,250 Hard Cost Condngency 63,039,693 /lrchidedurelEngineering/~Constr. Supervision 64,255,570 Development Impact and Processing Fees 68,315,308 ALTA Sarver 63,000 Emrironmental Phase 1 57,500 Sdis TestJng 610,000 Corsitruc~tlon Loon Fees $456,065 CorotrucdonlLease-Up Interest 53,095,367 Pr~opeAy Insurance 5607,939 Property Taxes During Construction 5364,763 Construction loan Title and Closing 615,000 Appraisal Fee: ~ slo,ooo Legal 530,000 Market Studr/Consuhing 525,000 Marketin8/Lease-Up/Start-Up 6100,000 Developer Overhead 64,794,504 Developer Profit 69,589,008 Total Projed Cosh 6119,862,606 Total Cost Per Unit 6368,808 Total Cast PEr Net Square Foot 5375.57 TOTAL COSTS, WITHOUT LAND 595,512,566 TOTAL COST PER UNIT 5293,885 TOTAL COST PER SQUARE FOOT ;299.27 Source: David Pwl Rosin ~ Associate City of Tueln AHordsbtlity WP and Lewenged FlnancingMalysls Pale 28 S.Z 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 inwrance 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 pricing is typically pegged to the LIBOR plus a spread that varies depending on the lender, the creditworthiness of the borrower, and financial market conditions. The LIBOR is currently at anear-historical low of 3.1496. Because this analysis is part of a 5-year plan, we assume a construction loan interest rate of 8.5°Yo and a permanent loan interest rate of 8.0% 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 750 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 8596 and an average loan balance of 60°0. DRA has assumed an 8.591; 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 8.09'0 (combined loan interest and mortgage insurance where appropriate). We assume a 596 downpayment on the owner prototypes. The assumed interest rates are higher than current rates due to the five-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 Gaps 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 Ti6k 17 Developnwit and ~ Casi Arwnption Owner Ho~sle8 hoblrpee cltr arti+stl~ spa Owner 1 Atfadwd TownhortN GMn~er 2 Bladed Flat Condornlnium Clwner 3 High Deislq Corwlominknn Clwner 4 Mixed Uea, Ground Floor Rehi) lased AtquYtJoe Cpl Land Cast Ptir C+~oes SF Site Mae f4S.00 143.00 f60.00 560.00 Land Coat Atr Unlt (109,000 (75,000 152.000 190,000 Deeelopoeot Cal Mwsmplfosr Sit( knpeovert~ent Costs pa ~ Sf 525.00 120.00 130.00 (20.00 Site lrnproverne~nt Coen per Unk 561,000 135,000 126,000 (20,000 Unh Hard CorotnKtlon pa SF f9S.00 f8S.00 f19S.00 i15S.00 Hard Cat Canti~enor n) S% 5% 311 S% MrbllscturallErydnssylnRll) 3% 3% 3% 3% . Property Tas~ee DurN1R Corstrudlon (1) 0.60% 0.60% 0.60% 0.60% Insurarrot Durirr8 Corrbudion (1) 3.00% 3.00% 3.00% 3.00% SellinpCloetn8 Cott I')i TUC) 5.00% 5.00% 5.00!1 5.00% Sala Commbslors (%T'DQ 1.00% 1.00% 1.00% 1.00% Developer OvarheedAGenefal Condklorn (%TDq 4.00% 4.00% 4.00'!< 4.00% Devetopa P'roAt f%TDC) a.0o% a.00% e.001c e.00% Coubuetite Loam Construction Loan % dTDC 85.00!1 85.OD% 85.00% 85.00% ~ ~ f 91,9N,681 192,875,351 S7 8S,95S,786 510.648,310 iMerat Role 8.50'l< 8.50% e.so% e.so% Loan Fir 1.0011 1.00% 1.00!1 1.00% AveaBe Lan ed 60.00!1 60.00% 60.00% 60.0011 Corx~lrucllon PMlod 12 Montle 12 Monde 12 Monde 12 Monde Sale Perfod 3 Montle 3 Monlls 3 Month 3 AAontlr Told Corstrudlon Lan Tam 15 Mergers 1 S Month 1 S Mends 1 S Months CanMnrrJbn Loan 14,690,199 14,736,643 19,483.74.5 1543,064 Corstnrc8on Loan InleneN~-Selo Prriad 11,154,249 Sl,li73,601 51,973,601 x,973,601 Tobi Construction loan kNnaR 16,644,448 16,710,244 f11,457,346 (2,516,665 Corbbuc8on Lan PbMls f919,N7 f928,7s4 f1,8S9,5S8 (106,483 Nate: TDC • Total Develapmerx Cash (1) Ae a penoerNaBe ddlrsat~sb (else Mnprorernsnb and and butidinl she8 )wd costa. Sounx DsvW Pau) Rosen 6 Assodales. Cily dRsun ,tltadsbllAr G+P+nd tw~w+pd fMsndnj~nshsr ~ 30 Table 18 Development and Financltl` CaN Aswnptiorrt Reatal Protatyp~ Sbdted Flat Aparbnenls Cite ofllirefitr 2001 Renter hototype Stacked Flat Apartmdrb Land/Bu8dbt6 AcquWtlw Cast Land Cast pier Gres Sf Site Mat 543.00 LandrBtrlldMj colt prsr unit s7ooo0 D.velspnlerrt coat A.anrptlottt sia fn+proverr~erK Costs par sF slte Met 12o.ao Stet ImproverFent Cosh per Unh i3S,000 Mard Construction Cosh per Net BklR. SF Sf55.00 Hard Coq ContlrlRency h) 5.00% MchNsxOrraUF.nRlrteerinR (1) 7.00lf. property Taxes DlrrktR Cortstnrction (f) 0.61716 . insurance Durirli{ Cortstrtrction (1) 1.00% MarketkgVL~sinB/5tart Up pbr Unit 11,000 Developer Overhead (% TDC) 4.00% Developer profit (% TDQ 8.00% Corletrodkx+r Ls+p Corlstnrctlott L,osrt Asa % of TDC 75.00% Cortatrucebtt Loan Amount 189,896.956 inarest Rate 8S0% l.oarl FeA (~ 1898,970 M~eraBe Laan Balance (CorrstdLeastUp) 60.00% ~~~ ~~ 12 AAorMhs Leese-tJP Pbrbd 3 MorKhs Tabl Cora>tnrctlatt loan Term 15 Months won Loan Utwest 15,730,931 Pbratansnt taart Debt Cove-ape Ratlo f .2S ~~ 7ixm 30 years, lnte-aet Raft 8.00% fr) k a p~orMye d dlwR mMi Ylb Ipfprowr<wM~, P~~^i fenihu~ and Y~II Fwd t~W. R) k 1A% dmmbWion Im ~rtiourt~ Souroe: David Paul Rosen 6 Asaoclates Cky orruaM itiee) t ,Alfo-da~Fgrr f:ap and l.rard Rnmcin~ Analyst Attachment A contains the per unit affordability gap calculations for the ownership housing prototypes by prototype and unit bedroom count. Attachment B 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)t; 2. 4% tax cnadits 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 Cosh As noted above, the affordability gap analysis evaluates market-rate prototypes and does not aswme 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, nadevelopment 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°Y° as an estimate of the cost differential associated with prevailing wages. 7.2 Eligible Basi: 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 130% ~ Since Orange County was a designated Difficult to Develop Area (DDA) in 2007, projects in the County were eligible for a 13096 basis boost but not for Shte 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 51.00 for the 99'° tax credit scenario and 51.05 for the 4°~ tax credit/bond scenarios. 7.3 Income Targeting Scenarios, Occupancy Standards and Affordable Rents The leveraged financing 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 Income Targeting A~umptions ~ Average Affordability Leveraged financing (% of Units at % Area ~ Based on Income Targeting Source/Scenario Median Income % Area Median Income 9°r6 Low Income Housing Tax 10% of units • 30°x6 AMl 47% AMI Credits 15% of units ~ 45% AMl 75% of units •.5096 AMI 4% Low Income Housing Tax 30% of units • 50% AMI 57% AMI Credits, Tax-Exempt Bonds 70% of units • 60°k AMI 4°A Low Income Housing Tax 30% of units • 30% AMI 51 %AMI Credits, Tax-Exempt Bonds, 70% of units • 60% AMI and MHP Source: David Paul Rosen & Associates The California Tax Credit Allocation Committee (CTCAC} requires affordable rents to be calculated assuming an occupancy standard of 1.5 persons Qer 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 Ciry of Tustin Affordability Gap and leveraged 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 S3,6oo per unit and annual reserve deposits are estimated at 5400 der unit, based on DRA's experience with afforclable 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 aswmed a vacancy rate of 5%, consistent with the requirements of most leveraged financing sources, even though actual vacancy in well-run affordable housing developments are often 390 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 S2. million in federal tax credits per project under the 9% tax credit program. There is also a 150-unit size Limit under the 9°Xo 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 S30 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 Tustin Affordability Gap and leveraged Financing Analysis Page 34 Tabk 20 Construction and Permanent Sources and Uses Leveraged Financing Analysis Rental Housing Prototype: Stacked Flat Aparbttentr City of Tustin 2008 FUNDING SCENARIO 9% Tax Credit 4% Tax Credit 4% Tax Credit, 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 51,601,192 5813,772 5951,186 Construction loan 593,857,236 559,393,300 567,161,024 MHP (1) SO SO 522,609,147 ~ Affordable Housing Program (AHP) (1) S1,625,000 S1,625,000 l 51,625,000 Temporary Gap Financing Required (2: 517,317,865 S48,Z63,749 531,205,104 J TOTAL SOURCES ;114,401,293 5110,095,822 S1Z3,551,461 PERMANENT Federal Tax Credit Equity 580,059,618 540,688,609 547,559,315 State Tax Credit Equity SO SO ;0 MHP (1) SO ;0 522,609,147 Affordable Housing Program (AHP) (1) 51,625,000 51,625,000 51,625,000 Permanent Financing ~ 514,207,327 522,245,144 516,145,037 Gap Flnancing Required 518,509,348 545,537,069 535,612,962 TOTAL SOURCES 5114,401,293 5110,095,822 5123,551,461 Permanent Gap F(nancing/Unit 556,95? 5140,114 ;109,578 USES OF FUNDS CONSTRUCTION AND SOFT COSTS ;114,401,293 5110,095,822 5123,551,461 TOTAL COST/UNIT 5352,004 5338,756 5380,158 (1) Estimated at 55,000 per unit. (2) Equals temporary gap financing required after assuming 2 percent of total tax credit equity is used to fund construction and sok costs during construction. Source: David Paul Rosen & Associates City of Tustin Affordability Gap and t.evera8ed Financing Analysis Page 35 1 Table A-t PE3! UNfT PROTOTYPE DEVELOPMENT COSTS BY BEDROOM COUNT OWNER PROTOTYPE tt QTY Of TUSTIN prototype Dercriptlorr AtbcbedTownlrrroe TYPE AND SIZE OF UNfi Thal Number of Uuibs 231 [kills 2 Bedroom 3 Bedroom 4 Bedroom 1,050 Net S.f. 1,300 Net S.F. 1,700 Net S.F. Flard Conrtrucdoo Cart slur ImproMarrrerrtr ' S6Q500 /DU UnitlParidry Constr. Cow (102.06 ~Gr. S.F. Total Nand Cart Oevelopnrenl Mrpad aad Procamir%FeefJ 131,643 AJnlt Irrdireet/Sol! Cab S72,457 /DU j I trotal coa, (Ezeept tend and Orarhead/Pre1fQ t.an/ Curb S 108,900 /DU DeK Fee/ProM >i< Owhrasl 12% (Total Project Cads P!r DwdBnR Udt (1) Aswmes efficiency rstlo (netlgrvss SF) of. source: David Paul Rosen 8 Assoclases. CRy d TURN MoidaWti C+P and Isrer+pd fMw+d"8 Maly~ls s6osoo s6o,soo i6osao 3108,051 1133,778 1174,940 5768,551 6194,278 1235,440 131,643 131,643 531,643' 672,457 572,467 572,457 1272,652 1298,378 5339,541 stoB,9oo sloe,9oo stoe,9oo (52,030 555,538 t61,i51 5433,582 5462,816 5509,592 101 % ~ A-1 Tabu A.2 PER UNIT PROTOTYPE pEVElC4~T COSTS RY REWtOOM COUNT OWNER fROif7TYPE t2 CITY OF TUSTIN Stacla>+ flat TYPE AND S~ ' P-o1ot~ ppaipefo4e Cadaintue Of UNR ~ e 2 3 bedioorn 4 eedro0rn Taal Nuir6ar d Untt~ 32S thib 950 Nat S.f. 1,050 Nat SE 7,200 Nat SUF. 1,500 Nat S.f. 953Tota15.F. 1) 1056TonlS.F.li 12obTonlS.F 1 1508Ton1S.F. Flan ~~~ « 534 840 /DU (34,848 ~ 534,84! 534,848 f34,848 , SNe~~~~ C~ 590.77/Gr.S.F UnMRarkMK Comtc 586,693 595,819 5109,507 Si36,884 7 5121,541 5130,667 5144,335 5171, 77 111 ttarr Corb ~~ Ind ~ 529 277 /UnN 529,277 529,277 529,277 529,277 , Proonrnbfen 566 /DU 552 SSZ,566 552,566 ., 552,566_ 552,566 , Indlraef/5oR Coat ~ ~ ~ c~.a ~~ tea ana pbq 7 6203,384 5212,509 5226,198 5253,575 J 574,923 /DU (74,923 574,923 (74,923 574,923 lead Cab Oaw ~~ ~ ~~ 12% 537,951 539,195 541,062 ~,~ ~ Uiit 5316,258 5326,628 5842.183 5373,293 ~ Taal Project Coro far (1) Maimes ~Mic)encY olio )nadiro~s SF) °~' 101 % Souroe Dav)d Paul Roan 6 At~oc)ataa- n~ d~b11q~ G+P and tam irr'rcin6 ~wlyi ~~ / Table A,f PER UNIT PROTOTYPE DEVELOPMENT COSTS BY BEDROOM COUM OWNER PROTOTYPE d3 CITY OF TUSTIN ~ Daadtr .,__ ---- f,rrtrre~aS~ TYPE AND SRE OF UNIT Toh) Number d UttRss 100 UaNs 1 Bedroom 2 Bsaoom 3 4 Bedroom 1,000 Nei S.F 1,150 Nst S.F. 1,650 Nat S,F. 1,800 Nat S.F. 1000tt%a15.F. 1 1,150TotaI6.F 1 16SOTotali.F.(1 1800ToWS.F(11 Nerd Cartrnetlort Cols Sflslmprwarnenls i26,136/DU 126,136 526,136 126,136 126,136 UnklFitrldq Can6; Chat 120S.n /~GI. S.F. S20S,718 1236„576 (339,135 1370,292 Tad•HardCab 1231,854 5262,712 1.365,571 1396,428 aad ~~ R 539,844 /Unh 139,844 f39,844 f39,814 139,844 Iridireet/5oR Crib 185,326 /DU "" f85,326 585,326 185,326 585,326 Tpd (,aa/ Q~tt~epl (,and arrd Orerbead/ProAq 5357,024 5387,882 5490,741 1521,598 Laird CA.It Ss1,2n /DU 652,272 652,272 s52,2n fS2,2n DeK Fee/PraM i Or:Aaad 12% 155,877 560,021 :71,047 578,255 ToW ~~ Caeft ~ p~~ Unit i46S,109 5600,175 1617,060 5652,]Z5 M) AsNanes efYklanq raft Ined~roa S~ of 100% Sam David Paul RoHn b Areoclate. A~/ndbilh Cp •ad tsvwt~d t~rKlry Mdy~L Ar MF Table M4 PER UPiR PROTOTITE DEVELOPMENT CO5T5 BY BEDROOM COUNT OYVNER PROTOTYPE s4 cITY of rusT1N M&ed U~, Gramd Protot~e pe~lp~ Fbor Brbdl Total Number o< UnlttF ZO Urtllt 1 Bedroan 2 Bedroom 3 Bedroarn 1,100 Net S.f. 1,100 Net S.F. 1,750 Nrt S.F. 1.100 Tofa15.F (1) 1,400TabI5.f. (1) 1,7SOTbtal tF. l Hard Corrterdlrn Ge1e g~ ~ t19,800/DU UnklP~kkr6 Comte Cow 5163.40 /Gr. S.F. ~yi Hani Cow 519,800 1179,744 5199,544 519,800 SI28,761 5248,565 519,800 1285,956 5305,756 and Eyw~ 537,330 /UnR 537,530 137,530 537,330 Irrdirect/Soit C.reb 5186,920 /DU 1186,920 f186,920 1186,920 Total Garb (hQpt Lead and Orerhead/Proftp 5423,994 1473,015 iS30,206 Land Card 159,400 /DU 559,400 139,400 559,400 Dee tyr/ProAt i Overlrsd 1296 565,917 572,602 t~,401 Total Pro~ret Cab Plv pwe01n8 Unit 1549,112 1605,017 1670,007 (1) Asturnes ePficirncy ratio (rrW~oa SF~ of: 100% Source: l?rvid Paul Rosen 6 /wociatw. Qq dlietie Alb~bbMY WP and ~+Isd ~nd~ Arrslysit irOt M Table A-5 Homeowner Subsidy Requirements Owner 1 Attached Townhome Two Bedroom City of Tustin 5096 of 70% of 110% of Median Median Median Income Level (1) $35,415 $49,581 577,913 Affordable Monthly Housing Cost (2) $885 51,240 $2,272 Less: Monthly Utility Allowance (3) $1.10 $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 5264,044 1 Assumed Assessed Value at Sale . $78,955 $129,760 $277; 941 Available for Mortg. Principal and Interest $471 5775 $1,660 Supportable Mortgage (5) $64,247 $105,588 5226,165 Affordable Purchase Price (6) $67,628 $111,145 S238,069 Buyer Downpayment 53,381 $5,557 $11,903 Required Capital Subddy (7) ;365,953 ~3Z2,437 $195,53 (1) Income limit for a family of 3. (2) At 30% of gross income for low income and 35% of gross income for moderate inrnme 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 ai 5.0% of purchase price; (7) Total development costs of: 5433,582 less buyer downpayment, less supportable mortgage. 1 Source: David Paul Rosen & Associates. Ciry of Tustin Affordability Wp and leveraged Fnanting Analysis Page M 1 Table A-6 Homeowner Subady Requirement: Owner 1 Attached Townhome Three Bedroom . City of Tustin 50% of 7096 of 110°X. of Median Median Median Income Level (1) (39,350 555,090 586,570 Affordable Monthly Housing Cost (2) 5984 51,377 52,525 Less: Monthly Utility Alknnrance (3) 5148 5148 5148 Less: Homeowner Association Dues 5175 5175 5175 Less: Property Insurance S50 S50 550 Available for Principal; Interest, Taxes 5611 51,004 ~ 52,152- Less: Property Taxes (4) 588 5144 5309 Supportable Mortgage Before Prop. Taxes (5) 583,235 5136,863 S293,276 Assumed Assessed Value at Sale ~ 587,616 S144,06b 5308,712 Available for Mortg. Principal and Interest 5523 5860 51,843 Supportable Mortgage (5) 571,295 5117,229 5251,204 Affordable Purchase Price (6) S75,047 5123,399 5264,425 Buyer Downpayment 53,752 S6,170 S13,221 Required Capital Subady (7) 5387,769 5339,417 6198,391 (1) Income limit for a family of 4. (2) At 30% of gross income for low income and 3596 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: 5462,816 less buyer downpayment, less. supportable mortgage. Source: David Paul Rosen & Associates. City of Tustin Affordability Gap and I.eMeraged rnancing Malysis Rage A 1 Table A-7 Homeowner Subsidy Requircmenb Owner 1 Attached Townhome Four Bedroom Gty of Tustin Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utility Allowance (3) Less: Homeowner Association Dues Less: Property Insurance .Avaitable.for Principal, lnterest, 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) 5096 of 7096 of Median Median S42,498 ;59,497 51,062 5164 5175 S50 5673 S97 $91,780 596,611 5577 $78,614 582,751 54,138 $426,840 51,487 ;164 5175 S50 51,098 S158 5149,698 S157,577 S941 $128,223 5134,971 S6,749 5374,b20 110% of Median S93,496 S2,727 5164 5175 S50 52,338 5335 5318,625 ;335,394 52,003 S2 72,916 S287,280 514,364 X222,312 (1) Income limit for a family of 5. (2) At 3096 of gross income for low income and 3596 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 1.2096 average tax rate. (5) Based on 30-year mortgage at: 8.0096 (6) Assumed to include downpayment at 5.0% of purchase price; p) Total development costs of: 5509,592 lrss buyer downpayment, less supportable mortgage. Source: David Paul Rosen & Associates. Ciy of 7i~stin Affordability Gap and Leveraged financing Analysis Page A-3 Tabk 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 i, Available for Mortg. Principal and Interest Supportable Mortgage (5) Affordable Purchase Price (6) Buyer DownpaymeM Required Capital Subsidy (7) 5096 of 7096 of 11096 of Median Median Median 531,480 S44,072 569,256 5787 51,102 52,020 S93 S93 593 5175 5175 5175 S50 ~ S50 S50 5469 5784 51,702 S67 5112 5244 563,917 5106,819 ~ 523,950 567,281 5112,441 5244,158 ;402 5671 51,458 554,748 591,495 5198,675 557,629 596,311 5209,132 52,881 54,816 ;10,457 5258,629 ;219,947 5107,126 (1) Income limit for a family of 2. . (2) At 30°i6 of gross income for low income and 35°~6 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 1.2096 average tax rate. (5) Based on 30-year mortgage at: 8.00°~6 (6) Assumed to include downpayment at 5.096 of purchase price; (7) Total development costs of: 5316,258 less buyer downpaymertt, less affordable mortgage. . Source: David Paul Rosen & Associates. City of Tustin Affordability Gap and Leveraged Financing Analysis Page A-1 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, Inte~estr 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') 5096 of 7096 of 11096 of Median Median Median ;35,415 ;49,581 ;77,913 5885 51,240 52,272 5110 ;110 ~ ;110 5175 ;175 ;175' ;50 ;50 S50 5550 ;905 ;1,937 ;79 ;130 5278 575,007 ;123,272 ;264,044 578,955 ;129,760 5277,941 ;471 ;775 ;1,660 564,247 ;105,588 ;226,165 567,628 5111,145 ;238,069 53,381 ;5,557 ;11,903 6259,000 6215,483 688,55! (1) Income limit for a family of 3. (2) At 3096 of gross income for low income and 3596 of gross income for moderate income households. (3) Based on current utility al{owances 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 1.2096 average tax rate. (5) Based on 30-year mortgage at: 8.00°6 (6) Assumed to include downpayment at 5.0°~6 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 Malysis Page A-2 Tabk 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, Intenast, 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 pownpaymeM Required Capital Subsidy (7) 5096 of 7096 of 11096 of Median Median Median 539,350 555,090 $86,570 5984 51,377 52,525 5148 5148 5148 $175 517.5 5175 S50 550 550 $611 S 1,004 52,152 $88 5144 5309 583,235 5136,863 5293,276 587,616 5144,066 5308,712 5523 $860 51,843 571,295 S117,229 5251,204 575,047 5123,399 5264,425 53, 752 ~ 56,170 513,221 $267,136 $218,784 $77,758 (1) Income limit for a family of 4. (2) At 3096 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 5.096 of purchase price; (7) Total development costs of $342,183 less buyer downpayment, less affordable mortgage. Source: David Paul Rosen & Associates. City of TustM Affordability Gap and Leveraged Financing Malysis Pane A-3 Table A-11 Homeowner Subsidy Requirements Owner 2 Stacked Flat Condominium four Bedroom City of Tustin 5096 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 62,727 Less: Monthly Utility Allowance (3) 5164 5164 5164 Less: Homeowner Association Dues $175 5175 5175 Less: Property Insurance 550 550 S50 Available for Principal, Interest, Taxes $673 $1,098 52,338 Less: Property Taxes (4) 597 5158 ~ 5335 Supportable Mortgage Before Prop. Taxes (5) 591,780 5149,698 5318,625 Assumed Assessed Value at Sale 596,611 5157,577 5335,394 Available for Mortg. Principal and Interest 5577 5941 52,003 Supportable Mortgage (5) 578,614 5128,223 5272,916 Affordable Purchase Price (6) 582,751 $134,971 ;287,280 Buyer Downpayment 54,138 $6,749 614,364 Required Capital Subsidy p) $290,542 5238,322 ;86,013 (1) Income limit for a family of 5. (2) At 30% of gross income for low income and 3596 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 1.2096 average tax rate. • {5) Based on 30-year mortgage at: 8.0096 l6) Assumed to include downpayment at 5.096 of purchase price; (7) Total development costs of: 5373,293 less buyer downpayment, less affordable mortgage. Source: David Paul Rosen & Associates. City otTustin Affordability Gap and Lev~aaged Financing Analysis Page ^.{ 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 DawnpaymeM Required Capital Subsidy i;7) 50% of 70% of 110% of Median Median Median 531,480 544,072 569,256 5787 ~ 51,102 52,020 593 S93 S93 ;175 5175 5175 S50 S50 550 5469 5784 51,702 567 5112 5244 563,917 5106,819 S231,950 567,281 5112,441 5244,158 ;402 ;671 51,458 554,748 591,495 5198,675 557,629 596,311 5209,132 52,881 54,816 S10,457 ;407,480 5368,798 5255,977 (1) Income limit for a family of 2. (2) At 3096 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 (6) Assumed to include downpayment at 5.Og6 of purchase price; (7) Total development costs of: 5465,109 less buyer downpayment, less affordable mortgage. Source David Paul Rosen & Associates. Ciry o(Tustin Affordability Gap and leveraged Financing Malysis Page ~'t Table A-13 Homeowner Subsidy Requirements Owner 3 High Density Condominium Two Bedrooom City of Tu#in Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utility Allowance (3) Less: HomeownerAssociation 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 (S) Affordable Purchase Price (6) Buyer Downpayment Required Capita! Subsidy (7) 5096 of 7096 of 11096 of Median Median Median $35,415 $49,581 677,913 5885 51,240 $2,272 6110 $110 6110 6175 5175 6175 650 650 650 6550 5905 51,937 679 5130 6278 675,007 6123,272 52b4,044 678,955 6129,760 5277,941 5471 6775 61,660 664,247 6105,588 5226,165 667,628 5111,145 6238,069 33,381 55,557 611,903 S43Z,547 ;389,030 ;262,106 (1) Income limit for a family of 3. (2) At 309'0 of gross income for low income and 3596 of gross income for moderate income households. (3) Based on current utility allowances from County of Orange Housing and Community Services Dept. Aswmes homeowner pays for basic electric, electric heating, cooking, and water heating, water, trash and sewer. (4) Based on 1.2096 average tax rate. (5) Based on 30-year mortgage at: 8.00% (6) Assumed to include downpayment at 5.096 of purchase price; (7) Total development costs of: 5500,175 less buyer downpayment, less affordable mortgage. j Source: David Paul Rosen & Associates. City of Tustin Miadability Gap and leveraged Flnancing Analysis Page M2 Table A-14 Homeowner Subsidy Requirements Ovmer 3 High Density Condominium Three Bedroom City of Tufctin 50% of 7096 of 110% of Median Median Median 539,350 555,090 S86,570 Income Level (1) Affordable Monthly Housing Cost (2) 5984 51,377 52,525 Less: Monthly Utility Allowance (3) .5148 ~ 5148 5148 Less: Homeowner Association Dues 5175 S175 5175 S50 S50 550 Less; property Insurance Available for Principal, Interest, Taxes 5611 S1,o~ 52,152 Less: Property Taxes (4) 588 5144 5309 Supportable Mortgage Before Prop. Taxes (5) 583,235 5136,863 5293,276 Assumed Assessed Value at Sale 587,616 5144,066 5308,712 Available for Mortg. Principal and Interest 523 S 5860 51,843 Supportable Mortgage (5) 571,295 5117,229 5251,204 Affordable Purchase Price (6) 575,047 5123,399 5264,425 Buyer Downpayment 53,752 56,170 513,221 Required Capital Subsidy (7)' 5542,013 5493,661 5352,635 (1 ome limit for a family of 4. (2) At 30°6 of gross income for law income and 35°~ of gross income for moderate income households. (3) Based ~ huorre~eowne pays for bas c electriocue ectric~heating, cook nA, and water heatsnp„ ca ~pt. Assu trash and sewer: (4) Based on 1.20% average tax rate. 8.0096 (5) Based on 30-year mortgage at: (6) Assumed to include downpayment at 617 060 °f purchase price; (7) Total development costs of i~ affordable mort a e less buyer downpaym nt, g 8 - Source David Paul Rosen & Associates. Ciry of Tustin Page A-3 Affordability Gap and leveraged Fnancing 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 Gpital Subsidy (7) 509 of 70% of 110% of Median Median Median 542,498 559,497 593,496 51,062 51,487 52,727 s164 s164 s164 5175 5175 5175 S50 S50 S50 ;673 51,098 52,338 S97 5158 5335 591,780 5149,698 5318,625 596,611 5157,577 5335,394 5577 5941 52,003 $78,614 5128,223 5272,916 582,751 5134, 971 5287,280 54,138 $6,749 514,364 5569,374 x517,154 6364,845 (1) Income limit for a family of 5. (2) At 3096 of gross income for low income and 35°k 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°x6 (6) Assumed to include downpayment at 5.0% of purchase price; (7) Total development costs of: $652,125 less buyer downpayment, less affordable mortgage. Source: David Paul Rosen & Associates. Cty of Tustin Affordability Gap and t.evenged Fnancing Analysis Page A-, 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 Saie Available for Mortg. Principal and Interest Supportable Mortgage (5) Affordable Purchase Price (6) Buyer Downpayment Requintd Capital Subsidy fn 5096 of 7096 of Median Median $31,480 544,072 S7s7 51,102 893 5175 550 5469 567 593 ;175 550 5784 5112 563,917 567,281 5402 $54,748 557,629 52;881 ;491,683 5106,819 5112,441 5671 591,495 S96,311 54,816 $453,001 11096 of Median S69,256 ;2,020 s93 5175 850 51,702 5244 5231,950 5244,158 51,ass ;198,675 5209,132 ;10,457 5340,780 (1) Income limit for a family of 2. (2) At 30°Yo of gross income for low income and 3596 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 dies and/or other maintenance expenses. (4) Based on 1.20% average tax rate. (5) Based on 30-year mortgage at: 8•x°16 (6) Assumed to include downpayment at 5.096 of purchase price; (7) Total development costs of: 5549,312 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 Bedrooorn City of Tustin 50°16 of 7096 of 11096 of Median Median Median Income Level (1) 535,415 S49,581 577,913 Affordable Monthly Housing Cost (Z) 5885 51,240 52,272 Less: Monthly Utility Allowance (3) 5110 5110 51 ]0 Less: Homeowner Association Dues 5175 5175 ;175 Less: Property Insurance 550 S50 550 Available for Principal, interest, Taxes S550 5905 51,937 Less: Property Taxes (4) S79 5130 5278 Supportable Mortgage Before Prop. Taxes (5) S75,007 5123,272 5264,044 Assumed Assessed Value at Sale S78,955 5129,760 5277,941 Available for Mortg. Principal and Interest 5471 5775 51,660 Supportable Mortgage (5) 564,247 5105,588 5226,165 Affordable Purchase Price (6) 567,628 5111,145 5238,069 Buyer Downpayment 53,381 SS,557 ;11,903 Required Capital Subsidy (7) 5537,389 ;493,872 5366,948 (1) Income limit for a family of 3. (2) At 3096 of gross income for low income and 350 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: 8.0096 (6) Assumed to include downpayment at 5.0°16 of purchase'price; (7) Total development costs of: 5605,017 less buyer downpayment, less affordable mortgage. Source: David haul Rosen & Associates. City of Tustin A(fordabillty Gap and Leveraged Financing Malysis ~Be ^-2 Table A-18 Homeowner Subsidy Requirements Owner 3 Mixed Use, Ground Floor Retail Three Bedroom City of Tustin 5096 of 70% of 11096 of Median Median Median Income Level (1) 539,350 555,090 586,570 Affordable Monthly Housing Cost (2) 5984 61,377 52'525 Less: Monthly Utility Allowance (3) 5148 5148 5148 Less: Homeowner Association Dues 5175 5175 5175 Less: Property Insurance 550 S50 550 Available for Principal, Interest, Taxes 5611 51,004 52,152 Less: Property Taxes (4) 588 5144 ~~~ 5309 Supportable Mortgage Before Prop. Taxes (5) 583,235 5136,863 5293,276 Assumed Assessed Value at Sale 587,61fi 5144,066 5308,712 Available for Mortg. Principal and Interest 5523 5860 51,843 Supportable Mortgage (5) 571,295 5117,229 5251,204 Affordable Purchase Price (6) 575,047 5123,399 5264,425 Buyer pownpayment 53,752 56,170 513,221 Required Capital Subsidy p) ;594,960 5546,508 X405,582 .. (1) Income limit for a family of 4. (2) At 30% of gross income for low income and 3596 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 S670,007 less buyer downpayment, less affordable mortgage. Source: David Paul Rosen & Associates. City of Tustin Page A-3 Affordability Cap and leveraged Financing Analysis J Table 5-t Fr:r UnU Dere:loprna~t C.osr h Uah Sedroon~ Coeal Serw ~ No~.l~a s~ Fit AparN..nr ~ ~>~ 2N5 a...~~... i~r~~l~rrss~! Stadwd Flal Aoarlallrrr TYPE ANO SIZE Of UNIT Total N~orba- d UaMst 325 Un1Y 1 7 Net F 2 9 NM 3 1050 Ne4 F. 4 1 SO Nat S.F. Harr Coaefeoellwr .C~slr SIM ynpipvrxtwMe 534,845/DU UnItlP~rkiey t:o+sle Cosh S1SS.00 ti SF Total ford Coeb S31,M5 (116,250 f~S1,095 134,545 5147,250 5182,095 534.845 f162,750 S 197,596 f31,548 1193,750 f225S95 pwelo/ornM Noearele8 asd ~R Pea Gtp ProoaN~ Fins 125.OS/ Nat S.F. Sil,541 i24,7S2 327,357 S32,S68 h~dlrecVSeA Coen 1349M 134954 534984 534984 536,9M CoeY pTacgt Laod, Orsrlres~, PtioAO 5207,623 1243,834 5261,9M0 f295,150 Land CoMr f74,923 /DV 174,!73 f74,923 (74.923 574,923 paw -K/-rorry i Owrhar 7211 134529 543,467 545,936 550,874 lbfa) hoj[el cgb'M ll~ 1321,075 3362,224 5382,799 5423,947 So~a~a: David Pbul Koran 6 AxotJala Ciq dTaMd AI1oiJr~Mb GrP wd lrre~ ~"I MIrrY 1{frt t-1 Table B-2 Tenant Subsidy Requirements Renter Prototype stacked Flat Aparbnents One Bedroom City of Tustin 2008 509E of 6096 of 11096 of Median Median Median Income Level (1) 531,480 ~ 537,776 569,256 ' Affordable Monthly Housing Cost (2) 5787 5944 51,731 Less: Monthly Utilities (3) S54 S54 S54 Affordable Monthly Rent 5733 5890 51,677 Less: Monthly Operating Cost (4) 5300 5300 5300 Less: Monthly Property Taxes (5) 5321 5321 S321 Less: Vacancy Allowance (6) S22 527 S50 1 J Tenant Monthly Net Operating Income 590 ~ 5243 51,006 Tenant Supported Debt (7) 59,805 526,451 5109,681 Total Development Cost Per Unit 5321,075 5321,075 S321,075 Rtquired Capital Subsidy (8) 5311,270 5294,624 X211,394 , (1) For a household size of 2 persons, pro-rated from 2007 HUD income limits for Orange County. (2) Assumes 3096 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 monttt~ rate ~ 8296 a ~ed to total development cost. (5) Based on annual property PP (6) Assumed at 396 of affordable monthly rent. {7) Based on 30-year mortgage at : 8.009b 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 b Associates. City of Tustin Page B-t Affordability Gap and Le+~eraged Financing Analyst Tabk B-3 Tenant Subsidy RequinrrneMs Renter Prototype Stacked Flat Apartrnenb Two Bedroom Chy of Tusdn 2008 5096 of 6096 of 1109E of Metgan Median Median Income Level (]) 635,415 542,498 577,913 Affordable Monthly Housing Cost (2) 5885 51,062 61,948 Less: Monthly Utilities (3) 668 S68 S68 Affo'dable Monthly Rent 5817 6994 51,880 Less: Monthly Operating Cost (4) 5300 5300 S300 Less: Monthly Property Taxes (5) 6362 ;362 5362 Less: Vacancy AI lowance (6) S25 630 656 Tenant Monthly Net Operating Income 5131 ;302 61,161 Tenant Supported Debt (7) ;14,242 532,969 5126,603 Total Development Cost Pier Unit 6362,224 5362,224 6362,224 Required Capital Subsidy (8) 6347,982 63Z9,Z5S 5235,621 (1) For a household size of 3 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 5300 (5) Based on annual property tax rate of 1.2% applied to total deveopment cost. (6) Assumed at 3% of affordable monthly rent. (7) Based on 30-year mortgage at : 8.009E Aswmes 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 iota! development cost less tenant supported debt. Source: David Paul Rosen b Associates. Ciry of Tustin Atiordability Gap and Leveraged Fnancing Analysts rage B-2 Tabk B-4 Tenant Subsidy Requirementr Renter Prototype Stacked i=1at Apartmentr Three Bedrnan City of Tustin 2008 SO% of 60% of 110% of Median Median Median Income Level (1) ;39,350 $47,220 ;86,570 Affordable Monthly Housing Cost (2) $984 51,181 52,164 Less: Monthly Utilities (3) S98 S98 S98 Affordable Monthly Rent 5886 51,083 52,066 Less: Monthly Operating Cost (4) $300 5300 $300 Less: Monthly Property Taxes (5) 5383 5383 5383 Less: Vacanry Allowance (6) S27 ;32 562 Tenant Monthly Net Operating Income ;SS9 5750 ;1,704 Tenant Supported Debt (7) 560,965 581,773 5185,810 Total Development Cost Per Unit ~ 5382,799 ;382,799 5382,799 Required t:'apltal Subsidy (8) S3Z1,834 s301,OZ6 ;196,989 (1) For a household size of 4 persons, pro-rated from 2007 HUD income limits for Orange County. (Z) Aswmes 3096 of gross income spent on housing. (3) Based on current utility alkywances from County of Orange Housing and Community Services Department. Assumes tenant pays for electric heating, cooking, water heating and basic electricity. (4) Based on estimated monthly operating costs per unit of ;300 (5) Based on annual property tax rate of 1.2% applied to total development cost. (6) Assumed at 3% of affordable monthly rent (7) Based on 30-year mortgage at : 8.0096 Aswmes debt coverage ratio of: 1.25 A negative tenant supported debt indicates the rents do not cover operating costs and a capitalized "sinking fund' of this amount is added to total development cost to cover operating deficits. (8) Equivalent to total development cost less tenant supported debt. Source: David Paul Rosen & Associates. Gty of Tustin Finarxing Analysis Page B-3 AHordabllity Gap and Leveraged Table B-5 Tenant Subsidy Requirements Renter Prototype Sbdced Mat Apartments Four Bedroom City of Tustin 200A Income Level (1) Affordable Monthly Housing Cost (2) Less: Monthly Utilities (3) Affordable Monthly Rent Less: Monthly Operating Cost (4) Less: Monthly Property Taxes (5) Less: Vacancy Allowance (6) Tenant Monthly Net Operating Income. Tenant Supported Debt (7) Total Development Cost per Unit Required Capital Subsidy (S) 5096 of 6096 of 1109E of Medlars Median Median ' 542,498 550,998 693,496 51,062 5109 5953 5300 5424 529 5201 521,903 5423,947 540Z,o44 51,275 5109 51,166 5300 5424 S35 5407 S44,376 5423,947 5379,571 52,337 5109 52,228 5300 6424 S67 62,286 6249,179 5423,947 ;174,76$ (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 albwano°s 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 5300 (5) Based on annual property tax rate of 1.296 applied b total development cost. (6) Assumed at 396 of affordable monthly rent. (7) Based on 30-year mortgage at : 8.0096 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 fatal development cost less tenant supported debt. Source: David Paul Rosen & Associates. Ciry dTustin I-ffadabiliry Gap and leveraged Flnancing Analysis Page B-4 Table C-1 LEVERAGED FINANCING ANALYSIS RENTAL PROTOTYPE: STACKED FLAT APARTMENTS DEVELOPMENT PROGRAM CRY OF TUSTiN 200D Type 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom Total /Vfordable Units 2 BR Manager's Unit Total Housing UnKs Community Roorn Totes) Net SF Building Area Puking/Circulat(on i ~ ~~ Puking Structuro Tool Spaces x Unfb 9f. UnHt Sq. Ft/Unit 73 23% 750 100 31 % 950 100 31 % 1,D50 50 15% 1,250 323 100`X. 2 325 Spaces 81 650 737 Unlb Total Sf Per Acre Acres 54,750 95,000 105,000 62,500 317,250 25.00 13.00 1,900 319,150 0 319,150 dTurdn ARadabilltr Gap and Leveraged Flnarxin~ Arwlysf! P+N ~-~ ~. 1 TaNe C,2 RI;NUI -ROI~OtYrE: fTACIflD W1T AlAR1MEMS INiCO1ME AND OrERATWC COOTS WIiM fs TAX CREDITS, FEDERAL AND STATE AfluMVllONi 2007 Aladir+ Moua)IOId Nto~ Faeiily a four 574700 Altad~bk IIO~MirM CaaLAta %dinmme 20X No. d e.boona ~ Toul. 1 eaiew 2 eadnaiw 7 eaieew /eat... Houolald Sig l7) t.S Anero 3.0 -r.torr 1.0 Paner~ S.0 hrtore Mouaehold Sras InoorM Adwa. Faear 7s% 907E 100% 10e1t, l1JINyARo~npRl f!1 sN s9e Sto9 tve.du~rn s2s 7s ioo tw so 7btall.toonr ns n 20o soo :00 A/1~pe~AeER pNii e1/ INCOME tEVB. ,w„N1 crow xrco~,. std Tae ut.21e s=s,sto s:sMlf AI'bide6le A1o~ihb -~Ie11 ~ f/1) tS71 iie0 fp7 Law Me~erruaRaAR~wr,. asn aw a)91o lste9) AJ6rdeble Monthly Rar+[ sse9 s/u S19Q fs:e IswdAte.e Annwl Grew MKOnM S2i,SN f71,e74 f7f,115 s7e,21e AlfondabN AtouMy 11ou0gt G• iiM s7l7 sas 39si Laws MOrMhlp ullllq AJlownus (fso life) tsen lif oss A~bMAbnrdyRwt fif0 S72! i7e7 iM7 AnMw,`~.~C~ MAN SZl,st7 f3S,I1S s79,3S0 s42,4/e A(brdebM MoMhb tloul^R Coal f77e fee6 Seel 67,082 Lew: A1end~UtlRiyARe~~oa lssl) uda li9el lsto9) AllordabMMe+rNyReir fiM set? feri f9s7 Nei O/ERATING R~ICOME ~ M w . N1ard~6Yh7 LaaMo. d Arhoenw UMtt Rwe a G+ow h~oorne ~ I e.boow a f>e9 ss,tu 70.27~d1lNb i io ~ m ~ 1;e f e.taont s u:e u.ia 4916dAladlae t bd~eom 77 f610 Sf,710 ts.sn a uar : eedio~ew, is 6729 stags a e.aoew a s7a sn,eoa • eabeae a fM7 Si,77O ~~ leedeew ss 61st s7isfi 71.811 d UNU 2 eedoew 7s fe17 se1,77f > eefiown 7s seei sii„ISti . eeeioan 37 3057 s7sai7 7owr us s2s7,1so A1wa~err uau = GROSS eerrAt e+CCwME ssot7,loo L.~ ~,,,~,,,~, ~) • s.ou litsae7el AAUoI. lnapiw ft00 M 11rA1 532.100 GROSANNIJM wcarE s~,e94aeo LESS: osERATRrc ExlBISB f7ooweruti~o. ss.ioo nr unlv-br a1,t7a0o~ ~; Op.,a0ryl Rorvw s~ aoper ~ cf7s,toel Lew; R¢arrant Rewwo f100 P!r lMdYlrar (5170,000) NETOPERA7ING INCOME S1,S8J,770 It) Aeaurno the brat d 7CAC oo:upnry rteedud p.5 penon~ per bedioo~e) and GlNomla Heahh end SMety oea+pr+c1- waadrd (oia pran per bedioan plot end. t2) Soaoe Ceurry d OrsiRe htousiww aid Commww~y Serrlce~ .Ita~we October 1.2001. Awun+ea m+rr+r pey< al' electric heaWN, WotbMb and wNw heNGM end beak etaarldt>'; hadlord paq wear end 1ra1k ~ iCJIC tpuk~ a s!L nirrirrwe vaeaney tact txtt• wiaAred bawd oa vscarc7 dau in dte rrw-tl ana aawiWry Gp ~/ ~+~ A.rriy An~lrb 'gees Tibk C-3 RENTAL PROTOTYPE: STACKED FLAT APARTMENTS DEVELOPMENT COSTS 9% TAX CREDITS, FEDQl1l AND STATE ~~ Na d ~~ Total Net LivinE Arse (SFI Cortxrwniry Room Total Net Square Feet, ResldentW Units Other Buildln`Aree Total Net Square Feet ~ Told Crow Square Feet % Rssidentlal Bash Elijible 13.00 32S 319,150 0 319,150 0 319,150 566,280 100.00% tal x Credk ENR. Basis (100% Redd,1 LAND ACQUISITION 543 520 Pa Site SF Per Site SF 524,350,040 511,325,600 >~ 511,325,600 SITE V~DRK UNIT CONSTRUCTION HARD COSTS 5155 t~lv SF d Cosh f H 549,~b4250 693 039 f3 549,464250 53,039,693 CONTINGENCY ARCHJENGJCOPISTR SUPERVISION 5.00% 7.00% ar o d Hard Costs , , 55,960,On 308 Sa315 55,96QOn 308 315 Sa LOCAL IMPM=T AND PROCESSING FEES 526.05 Per SF , 53.000 , , 53,000 ALTA SURVEY .57,500 57,500 ENVIRONMENTAL PHASE I 510,000 510,000 ~~ ~~ . CONSTRUCTION LOAN FEES 1.00% 8 50% 15 Months f93a,5n 781,1aS f6 593q,Sn ~,7e1,1e5 CONSTRt1CTIOfVtiFJ~E"UP INTEREST AL ESTATETAXES AND INSURANCE . 1.60% d bard Cosh , 51,362,302 51,362,302 0 RE 515,000 115,00 TRLE AND CLOSING (10,000 510,000 ~~~ ~~ :30,000 f12,000 REAL ESTATE LEGAL 530,000 50 ORGANILhT10NAL LEGAL 525,000 525,000 HARLO=T ~~ 515,000 50 pOy-F.tO~RUCTION AUOIT 5100,OOD 50 MARKETINGA.EASEd1P/START UP .. _~_ ,-._~ S292S00 50 DEVBpPER t~E tU TAX tDtEDIT CONSULTANT • ---- •- 530,000 52,000 SO 50 TAX CREDIT APPLIGLTION FEE 4 00.x, of Ann. Credit 5320,270 50 TCAC ALLOG-TK3N FEE . 5,000 f0 SYNDKJ1TK~fV LEGAL S1 i 4,401,20 58B,4T5~ ~~ ~~~ COSH 5352.Ofl4 f?72,22b PER UNR 533B.4b PER fF (11 As d 2006, the rtwdnwm derdop~ fee PKr^'~ b1' TtJ1C is the lesser d 1591 d developme-ti ooas rx f2 mllibn. The masimum am iptfon r~ arr inckrded ~ tfie developer teecap~. q~. ~d~e ~ tax credit corntrldng synd ~ alTrrretn ~~ ~~ re. G] A/brdrbGlq Gsp and urw~ Table C-4 RENTAL PROTOTYPE: STACKED FLAT APARTMENTS FINANCING ASSUMPTIONS 9% TAX CREDITS, FEDERAL AND STATE TAX CREDIT EQUITY Requested Eligible Basis 571,616,838 Less: Non-Qualified Non-Recourse Financing SO Unadjusted Eligible Basis S71,616,838 Adjusted Eligible Basis (High Cost Area Adjust) 1.30 593,101,889 Qualified Basis t'% Low Income Units) 100% 593,101,889 Tax CrndR Rate 8.6096 Annual Allow. Federal Credits 58,006,762 Tax Cnsdit Prking (Equity Raised f'r3rTax Credit Dollar) Federal 61.000 Federal Tax Credit Equity (99.9996) ;80,059,618 FAIR MARKET VALUE ULCULATION Net Operating Income; Restr. Rents 51,563,730 Capitalization Rate 8.5096 Capitalized Value at Restrkted Rent 518,396,824 MAXIMUM CONSTRUCTION LOAN ULCULATION Max. Constr. Loan as Pbrcent of FMV 75% 513,797,618 Plus: Federal and State Tax Credits 580,059,618 I `1 Maximum Construction loan 593,857,236 CONSTRUCTION LCt,AN Constr. Loan Amt. 593,857,236 Interest Rate 8.5096 Loan Pbints 1.0096 Average Loan Balances-Construction 60.0096 Constructbn Loan Term 12 Months Lease-Up Pleriod 3 Months Total Constn~ction Loan Period 15 Months Constn~ctlon Loan Intertst--Corutruction 64,786,719 Constnxtion Loan Interest-lease-Up 51,994,466 Total Construction Loan interest 66,781,185 Construction Loan Pbinb 5938,572 PERMANENT MORTGAGE Net Ctperating Income 51,563,730 Debt Coverage Ratio 1.25 Debt Service Based on DCR 51,250,980 Mortgage Tenn 30 yarn interest Rate 8.0096 Max. Mortgage Amount (DCR) S 14,207,327 Loan Fees 1.00% S 142, 073 CGy of Tustin niiwrtlaaNq Gap and t.evaa~ed Flnancine Analysts Pag. C-1 Table C-5 RENTAL PROTOTYPE: STACKED FLAT APARTMENTS THRESHOLD BASIS L1MIT5 9% TAX CREDITS, FEDERAL AND STATE Orange Co. 9%Threshold Basis Limits, 2008 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 588,473,482 571,616,838 (1) Under 2008 TUC regulations, the total combined boost for prevailing wage, parking, day care center, special needs and elevator may not exceed 39 percent City oFTustin Affordabiliq Gap and Leveraged financing Malysls Max allowed 560,866,856 2096 0% ~ SO 7% 0% 30 2% 0% SO 2% ~ 0% SO 1096 pob SO 39% 49r, 4% 52,434,b74 5% 0% SO 15% 0% SO 58,315,308 571,616,838 TUC Ba:is Tobl !t of Unib limit Prr Unit Ba:fs 73 S139,272 510,166,856 100 5168,800 516,880,000 100 5215,040 521,504,000 50 5239,568 511,978,400 2 5168,800 5337,600 Page C-1 11AINCi mmm 74Ownve RAOp RM AWA AIV16 O7pAt41G 61eM AM CA11111OW 717E TOX COMM MONK AM MU ISCALAT101 RMd dwwlMw 01 , cm 3.367. /a-maY14 Who 1.751 6W Mw� 10 Cw ftum" am 7a�i71Oi1� s7A17A76 034114 :%174136 MAIM= NogM...a. sAOK /i1! M s1� IPS%+6Mi ou&4vw1 80,33 6w g"Un 63AUM, �M' sum �� otr :7.„3119 �no .MISS 17.U&M Noon" e.. 0.61au6 s%1It.76t sa;Uf6 lil^ :),117.716 MO 1117411 1117{11611 OURA371 419%73 st7uAw 6StlA,1 q M 11197.91110 OP&V rg7ar mnlop*Nms_ 11706 AAe Q1.174M 171%1463 O1.xW51 OMAN 6%3%M 773 p WlDA61 11%161611 11%0%116 :1%1%611 f3�0i,766 111 906 R' 14i61A3 aal%6o mina Mt d1A1411lt O1A11%1671 s1d�W1 171,p�77q d1A64�01) s1.74LUR ��e�MrM�w A+k 7.aDri 111011 OLIN +� 4t1R11w 614%lm 0%11776) aK76r 6untas mom 61AO.lp G7Ylnawtla♦DM= t D1M 7wbd1.111.. 3111 Ox%m OIUM s1.194771 O37A3 71.Ng1p O71^4 33.{MM M1711 A43 � �1M •11A01 a7s1� 1~il s1�srl»I K1Wf+ g666�v6 �M o1rGr11y11r7. 14TGMN4pw ■1174" 111.7!4" Iv.1741Mp /nal4flQ 3%%$664 731Lu A 13rt64 s�1�� S i17�M1 71. WA1W s1.77q,M 6%11!43111 s1A126116 ♦slip"! d'MH fni77n 7771,A76 06%!"6! lit 1.77 li3 lir � �•73IAOt 01.7!34164 O1.li471� 01,1373 OWAn,M 14T ar11lGW A71!! 17R Ara;17[ 113,746 0146314 63413 O11,IIA1 O71A64 AU "Kul AO � ~I 0�6 7 R1�1 LIP ������►AM MRr11Y.6 11111.736 017.710 sf67.1A6 SW.tll 11191.111 soloom sy1O,� ♦SKI astm �ry >+76IAI � s6tl.A! 374666 770!!0 (71,115 IMAM 07.7@ 07Aa6 13 L339 Will MAN s "I 1a6,1A 011„163 a,+7.M. A& ---v GwrA1ww.rdm ^-tr .rbcs IBM MKXU1116 $WO= KACAFAIDANK arstoo mioa mo 0MRAW O% TA1 Cnmm E1noa AEo nm IMMILAi10N RAtd YdA a 330% uM"Caft Sim IM"wAiA MIL E.. LYY% 13 11 Is IS 17 N „ saw r� t:wM +►1kwmw13" e1 KIM surly KIM"KIM"3UUM $am !3;111 iOMM 2I&M K4MW $3LIO K=.= uxm SUM4,114 SOMM i1lIL>'11 1i Wpg SLt3t$Irt 33.12x118 %41C � TAIIG y SAM $Room 0WAM 01;1711 071484 632%1O) 4nkm 313,1183 =1;184 uxm 0314,,/14 uLw :33,103 11!.01 187.43 w R4�1I m 121$;171 6.181121 342OAN ittitm iower 01E7.314 �;� 11:22 7))1 Ii7i�AA 4a�M� SmAfw thMAN STAN M 0IAMO t 01.18464 Ito ft18t1A ite.3li ltilfd3i st7l , sa;A f 142$3.044 fiA11.417 e�2bo~! 3 UMI 31.11012 3LIMUW 8.12110 IL30VU GjAMVAA 1;1141$1 0;17Ji M 1 OL1MjM 0RARR t>t 111.O4I" m'4K tRol.fi� �~ ~� ~R o1UARD GSoU*4 {2114414 11717jA �41i 4137,14 410,04 � l0 33A741M 3gMA 31.21A1q 7 CAM1 ROW rM oal eft )AM 03s� l,.ORMI 0 i1A111,e 18 11 17$ OMAN :i3I1A >1t >9 �� 0 O!2►o71 18 07$7,174 io 01770271 smote 63sk S/ 1111 s. MMIP am A., o.r Dda D"�' a'A' OL1l4i1q Ot�2n$M RIAU" 81.1181821 O4 s1.714iiA �t io1 01424180 '%"k ii aiRI23M 31.10.313 $341MAS S VL132JU 18 p,111A s Mn CAMN "XMD��w ts3 1814314 US 1!3 I ri I u SAN � 61,2iq$e oil 51.3ft o Rt.124210 (n.TMIM As" M18 Ife 214000 ' S7of74 SMIM •Rtl.14M 1MO4e MA" MASS A i�14 f7J t� IA US NET MM4 wOwMs NM MDL M r 57) ltakr7 R14$O tla� oR "" i�410 �� �� O 8,111) 037.124 ►rdw•1 titw*++MB.1r4tli1d,11r WASS 311.47 114140 SM411 1811.21 lutssf 18)1li] $14604 13400 1n" 12L1s1 $17,411 27402 373.81 $74]17 $37,114 chraudw A4riY11 aArwj is.isew It - ti4+ aew tiara .unitrsma"m womnraAppmvmwm C102RA MDCMMO CAI" nOw 9%TAX COMM Nona MOSom MOISAnom Mm .aa..,s.r, 0, .. aw MOR 3.9" FWMW" r• �m omod —3s fz n b b st fief ftlmww mm n.w.SM :S.M:M � _ xauS1",M, yASew�A SAM 81%1111 "%M 6VXM Sn"ll wVwAm_ � No aR 63KAMN MAN sn"j) 4"Com SS,SI�.,of3 sxsv el *As"" eu M.7�17o fsM,M 37wbl.n .M avcasvl 6t.Mlim =9114.2"G%M AIM I 72.111i► �� !uo iM� M.f1A1M a�M,ml PARA" aS.»Is makm SM7AM RAKM WM"* 3XIMAW wHws P."163911QWBOINNWA WKM CASH ofMS S1SMlI M MAO so on OM.lSa M Diblw4d CAWam� � ac"� PANAM st ai7 � SLWJN 4nmi m POST CAIN PLOW ,.SS "WAN US Ik ,M IM s, ,.M D&v%W A� h%jL Stit� 4mm" OR%MS DAMS" Sl.n�3,► SLM " U.133 M W CAsn ROW AMU AR MGL M Wa4m) ll � BOA" saw ,hs.Sfo .Sskt,f n o ut sum.136 s,AU13 N&%M SIAFDA o s3m uoo 54q,al 541AG4 PLASS NS.M clrmum A%d&% CM rd Iw.rd/." Ar" ftpC• T" C-7 of m room1f$b SWAM RID AIM116lM QNA$WG Al000tU CKMEW MINIM fUND GUAM si 9% TA8 C• EDfM "W@W AND f1AT8 1 2 1 1 5 6 7 1 10 11 leµwis brriae rre�fa 1258.$00 $111,788 s27f,28i 51144$5 s661.ib! "OUR ffwmR 1�7b2 ti[1`10/ 5715,877 5774110 p Carr16YYerN 1.9001 54.300 34110 65.M $612V Was 5703 14278 f1tAn WNA4 3.000!♦ SAM $1412! 517.$00 $14816 Min 511,50 M147 ff4i67 t+�z2o 5vpe ff5 ft2 End.brow. R s0 $351abb s0 s771.266 s0 5414450 so $41,69$ $$00061 so $53411z i1 56ob,1m 10 ss x"4 10 5715.677 50 s776atn $81964" Mu. blowy • 0 L40 soft MOP ACHWOW0031011E 6 Mw $585.000 $608,473 $6li,667 164600 f6n" Kdl%M $7196116 $744201 5774111 $787.283 $825.200 10 I ew fandnp 1500% so $0 513Rm fl.!$f f1i490 51,Sfb s40 m 54100 glum$269,$56 14411 54044 5424018 5gab 5!14.251 14911 57M►566 $11.328 $5$1,276 $14,2" 5su,7ot C.onubode w rVMrwwmla 912qAM ftf4.sfo 5175,29! $144,133 5114176 $130" 1155,0! 51643$6 $171,113 5177,117 f1�1 fndms Biro 50 $130A0 10 $364900 s0 5606.757 $0 $560 6 1544488!1 $ WAu so $628.02! so $"4.231 so 5764$61 s0 {5761,011 0 5!31,376 s161,701 074805 ogrlrr A&-b+Mr CAP rd u..qr A-wftl*-*- Alt -0 Table G7 INNIM AOIOIIM SWA3w RAT AINSTIm OfSINA7MOGANDStlACOM M NUUM RIND tlALMCK 2%7AX C.8MM fiDMW APM MM oposAw4c Mlme - If 13 14 IS /S 17 1a Seel ' MINIM WdWed enni C=W%kd ont 1. 3'�� ows sit" OM fll7.fof ft3,7so fli1.S77 f13>so $MAA SIAITUQ ils,7* fl,Ss3W is Sl' .off , sl, Win f1,1/7A35 fl,lff fif MNwb s9 so ss3,m! MAN fp � sly slf fso f17,tlo ft7, 14KNM Samoa $MAN $917,M sM1,s77 so SOGA53 is p so lls,tsf so so so MSR. SAM= * I MOL Su4 • Mae. 1M AR Sn"n f1Alfyflf s1�as3,s7I SI,M�Ss1 si.lsftlso fl,Inan so so MAcamwasom 814.!14 Sq.WSM f1f407f ftAlA 7a s1,M faf sl,oSlvf31 S1.124 K owwom ,W $1.164424 s1aAl fV conwhoomsIII t.SUOK swIlI N smu s7f lu $11.337 f�77,13! MAP S1,iff 110 s17.1t7 f�f7 pm fM7.iM SO7,Mi fl.t7S,I14 sl flilk3n VAIIAwll f1XA7" SM,314 illi s:v,7is $3f25.416 fs2i3, M 1, i W.513 �fs'S � $l VIKI3 s977,1]11 ft,tlf,110 fl s9 if f� ffi7,7 76 Swm S02.1u 1f771ic sl�l �fjoj sl, 'x"� Ift,ln,�sll ssss.ws so sasaso s1,1115,{S(, ArsBYay ay ed toWN" 7' Ani ,y %PC-'* Table Gs INKIM MOIM IP WED RAN AWFAID4 07EOAIM AND EWLAtRVA►A MOM H10 MIANCIS 9% TAX COED11s, ROMM AND RM orarAnl4c osavE 23 24 is x n a n 30 Mr*til 11,1Q,M SI 744M f1.M.EW 11,3u. n 11,411,7,9 SIA3kM S1.4ftM SIX%= A�ywKErninp LIM SI7.M 1196118 MAN S1s.636 121,436 521" RIAN SU.SEs aonrAlrau 3ADD16 174,/16 so so 1s2,MD $0 30 1l AU so wmwmwmk En%nandAncA so SIJM.00 so 11.MAGG to $1,31%073 so 11,415.719 so 11,4X$SS so 11,4SUM $o S1.WUS3 so SIAM;Aw Mrs Bobwe 0 A 64M ok* RMACOWNIM INOW 6 Mol. $1.24C"4 11.2!0.377 11.175,70 11.302,4'% S1Aa MM 11,46%W St,S32.0D1 SIAW449 5laslwl rAmA $1,111k,4116 :1,32,134 51,70I.s16 $66%M tl III'm 11.312,100 S1.GG%m bowed Eat ig4p I.M" 11438 MR11 SISA04 $%so 114,71s 11!1705 114.%70%4321 CAnMb A1Mi 1277.0!7 1211,713 UK= S3 AZZ 111717s 1329.101 S34GAU SM.544 vAdA*- Edna salsom so 1139%134 so SIa0 "6 111.36j= S66Un so 19,44999 so 11.312,111 so P CO% 90 SIAMP 111Al2,4" S7N.376 car..... /vu1 Table Ge RENTAL PROTOTY/E: STACKED FLAT APARTMENTS RENTi1L INCOME AND OPERATING COSTS 4% TAX CREDITS, TAX.E)fEMPT BONDS ASSUMPTIONIS Zoo? Medlars Household hrcome, Fandy d Four i7e,7oo ABordable Housing Cat Asa % d Income 30% No. d Badraonls Totals 1 Bedroae 2 Bedrooa 3 Btdroae 4 Badroote Household Shte (1) 1.5 Ptrsons 3.0 Parsons 4.0 Prrsau 5.0 Perrom Flousaltold Sire htaomeAdjust Factor 7571 90% 100% t0a% Ugllty Albwena Q) 554 :6B S9e 5109 No. dUnlr 313 71 100 100 50 Taal Bedroants n3 73 200 300 200 AFFORDABLE RENT'S fY INCOME LEYEI ~~~ Antlwl Grow Income 529,517 S3S,415 539,350 542,49e Ar~rd.a. y B cote s73e sees s9e4 s1,o62 c.ds: Mondry UdRtr Allowance ~ a64) (she) a9A) ato9t Mordabie Momhy R.nt sbe4 se17 Seeb 6963 ~e~eB Anew) Groh Ittaonw 635,416 542,49e 547,220 is0,99e Affordable Monthy Hausirrg Cast seas 51,062 51,1e1 51,27: Leas: Mondry uslfty/lllowanae as4l tS6e) ~ a1o9~ Affordable Monthly Rent 6811 5994 51,oe3 6,,166 NET oFERAnNC INICC#IIIE r ARordablNtr LavellNo., d Badraotrrs Unit Rent Grow SD% of Median 1 Bedroom 22 f604 515,048 30.0% d Units 2 eerioom 30 fe17 524,510 3 Bedroom 30 See6 S26rSe0 4 Bedroom 15 f953 574,295 ~,~(~8e 1 Bedroom Si Se31 f42,3a1 70.0li d UnNs 2 8edroorn 70 6994 569,5D0 3 Bedroom 70 Si,OB! 573,e10 4 Badrotrrrt 35 51,166 540,e10 Totak 325 S309A14 MamBer's Unit 2 GRCtSS RENTM INCOME 53,70q,i68 Law: Vicarreias 0) • 5.091 aleS,40e- Mbu. Moonre 5100 Per UnN 532,300 GROSS ANNUM IIrCOME S3,SSS,060 LESS: OPERATING EXPENSES S300Mithno. 53,600 Par Unlthbar (;1,170,000) less: Oparadng Rasarves 3.0% doper. Budpt 1f35,100) Lew: RaplacerterK Reserves 5400 Per Urtitlltear (f130,000) NET OPERATING INCOME 52,219,960 (1) AMUrnes the lessor d TCAC occupanry standard p.5 persons par bedroom) and GB(omb Haahh and Safety ooarpanry standard lone person per bloom pkn ono). t21 Saurca: Courtly d Orange Housing and CommunKr Sarvlcm, clfictlvt October I, 2006. Assumes tena m pars all ekcMc heatkig, ooaking, and rvatar hewing and bask elecpidty; bn+dlo-d pars water and vaah. Li) TCAC nagedres a S% mMimum wnney rate urdess waived based on raancy data in 1M market era. ant dTatlln ~alydtYay G+P +~ lwertetd lNwndn/ MMu het G12 Table C•9 RENTAL PROTOTYPE STACK® FLAT A-gItTMENTS pEVE10PMENT COS15 4,S TihX ~~, TjV(_pLEMPT BONDS Aces (UnNs Plus Pariclns) 13.00 325 No. of Unit 319,1 SO Topl LNI~ Ana 0 Community Room Resldantlel Unlb Tool Nat Squsrs Feet, 319,130 p ~~ ~~ Attie 319,150 Total Nat St~rre Feet d Graz Sgtsane Fiat T 319,150 Tax ~ ~ o 96 Rasfderttlal 100.00% Tod R 100% ~~ ~~pj(t10N 520 Per S'~1e 5F Pbr Sly ~ 524,350,040 511,325,600 ~ (11,325,600 SITE WORK UCIION HARD COSTS UNR CONSTR S13S Par SF d Hard Costs f49,46a,250 53,039,693 (49,460.250 (3,039,693 CONTINGENCY( ROahNG~roNSTR. suPERVISION ~'~ of Ftatd Cae>s ~ sF 55,96q,072 3a 31s Se SS,960A72 se,315,3oe A LOUL yNp~1iC'f AND PROCESSING FEES (26.05 , , ~~ (3.000 ALTA SURVEY S7„S00 f7,S00 p~yIROhM4EN'fAL PHASE 1 S10,OOp 510.000 SpIL,STESIING CONSTRUCTION BOND FEESlCOSTS 1.00% 50% 5 Plus (100.000 15 Month 5693,933 52,776,697 ~ 52,776,637 CONSTRUCTiphlll~/5E-UP INTt:REST . t 60% of Herd Cats 51,362,302 51.362.702 REAL ESTATETAXESAND INSURANCE . ;15,000 515,000 TeTLEAIdDCLO5ING ;10,pOp 510,000 APPRAISAL FEES (30,000 f12,000 REAL ESTATE LEGAL. 530,000 ~ pR~DATIpNAL LEGAL ~,ppp 525,000 rW~R10FT SRIDY 515,000 ~ PosuoNSrRUCTIOr~ Auorr floopoo ~ MARIO:TINGILEIISE-UPISTARf-UP 3 ~~ ~ uy2,SQ0 f0 17 OPERATING RESERVE .• 2 00% 107 17 107 SOFT COST CONTINGENCY . 107 937 437 779 TCIU pEVELOPMENT COST 15.00% d Dow. Coats ii, 11,200,000 f0 DEVELOPER FEE t1) ~O,OOp gpNQ/TAX pt~T/1DVISOR 52,000 ~ TAX CREDIT APPLIGTION FEE 00% 4 of Mn. Credit f 156.570 ~ TCAC ALLOCATION FfE . (30,000 ~ SYNDICATION LEGAL 5110,0!5,021 Se3,~•rn TOTAL PROI6CT COfT s33tA,7S6 5257,347 PQ UNR 5344.97 PER SF (1) As d 2pD6, the maximum da~rdoper fee perrnityd b1' TGtiC is the lesser d 1596 of daelopment aos>s ar f2 million. The maximum amourK that pn ~ inckidad in ellsble bask is 57.4 million. De~dopmeM and tax credit consultlr+{ and syndication Doses ere included in the developer See cap- 110t G1I aAltorbbrb GsP red Lewapd Finanein{ Anslysb Table C-10 REMAL PROTOTYPE: STACKED FLAT APARTMENTS FINANGNG ASSUMPTICMIS 4% TAX CREDIT'S, TAI4EXEMPT BONDS TAX CREDIT EQUITY Total EII`ibk easls Less: Non-Qualified Non•Recourse Flnandrtg Less: Elt~ble AnwuntVdurrtarily Excluded UnadJustsd Efl~ibb Basis Adjusted EliBtbk Basis lHl~r Cost Area AdjuW QualMed Basis Tier Cr~adk Rate Mmrsl Albw Crrrdib Tax Credit pricing (Equity Raised PbrTax Credk Dollar Federal Tax Credit Equky (99'A) CONSTRUCTION BOND AMOUNT Constr: Loan Anrt Interest Rats Constr. Bond Issuance CosWFees Averaea Lan Balance--Constnxdon Constrtaction Pbriod Leese Up Period Constnx.~tiori Loan lnbermt-ConstruWon Corutructlon Loan Ir~st--Leese-Up Net Inlsrest Cost Bond kswnce Costs PERMANENT SOIVD AMOUM Nett Operating Irrcortre Debt Cowra,e Rstb Debt Servke MortssjeTerm Interest Rsroe C1ty dTialin AKp~btliq' GeV and Flnrande{ Analysis 1.30 100% 55% of Agg. Basis 5100,000 Plus 583,637,779 50 f0 583,637,779 f 108,729,113 s 108,729,113 3.60% s3,914,248 Sl.os 540,688,609 559,393,300 5.50% 1.00% 60.00% 12 Months 3 Months 51,959,979 ~ 16,658 62,774,637 5693,933 52,219,960 1.25 51,775,970 30 years 7.00% Pee C-14 Tabk C-11 RENTAL PROTOTYPE: STACKED FLAT APARTMENTS THRESHOLD BASIS LIMITS 4% TAX CREDITS, TAX-EXEMPT BONDS Orange Co. 4% 7lueshold Basis Limits , 2008 TCAC Basis Total Unit Size ~ of Unib Limib Basis 1 Bedroom 73 .5179,727 513,120,071 2 Bedroom 100 5216,800 521,b80,000 3 Bedroom 100 5277,504 527,750,400 4 Bedroom 50 5309,157 S15,457,850 2 Bedroom Mgr's Unit 2 5216,800 5433,600 Total Threshold Basis 578'441'921 Threshold Basis Boosts Max allowed Plus: Prevailing Wage Boost 20°6 09'° 50 Plus: Subterranean Parking Boost 7% 0% SO Plus: Day Care Center Boost 2% 0% SO Plus: Special Needs Boost 2% 0% ~ SO Plus: Elevator Boost 10% 0% 50 Subtotal Boost (1) 39% Plus: Energy Efficiency Basis Boost 4% 4% 53,137,677 Pius: Distributive Energy Boost 5% 0% 50 Plus: Seismic Upgrade Boost 15% 096 50 Plus: Development Impact fees S8,315,308 Total Adjusted Threshold Basis 589,894,906 Total Unadjusted Eligible Basis 583,637,779 Requested Eligible Basis S83,637,779 (1) Under 2008 TGC 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 Malysis Page C-1 W&C.11 �RR t11'aA41OO MI1M CMN IIOW 4% TAX CUMM va4glpApt O oWX 111G1AT1GN OATar lacemollaft qmmftcxm lift 1701E �swr MW � 1.771 snow anoow 3 Cow 1Mni1 kA w Loft 3a7041M 371300 Imin Nw M' 1 >iT.071.OM Rf00.i11 it�f31 �w $%MA11 m 14a 317K7N No rrw kww a— RIl�7!>l (i1l"Am �4 �m aill,M71 :11u a1143sa axe" s>;1w 9336111111 i:001.�M mile 7711A*AL a,.,1gMM 33,N3.M u�7313M Sjg- 31.001. , "Muffsnt,ssa 3Ctt4111 3a11431t atiis>r W37.110aiy.17X 13.114111 411.111%2301a1.71417U at,A4lal1 at.ist ls,1 wdsf 0131 ay114taa Mhsit sasua]I 4..w 3Jl Adjia las+c a1>AM* SlAftft a+xs3l1 ab514771 aUR37A wKl� m 31.504711 aT.tl�ytt fT•1 r at,131,t7� 11.1ti1.1♦1 at..avAOq a1 SAt� t 11>Stw wna4 a1R1/1t �,� at =Ufa j a a111.t1M atnnll UAKM W D!CAIMl+�Nnr•11.11 0.,1 avtLlill s117t1» 3! DAMAO um _ a, 71Mi1 DolaCmewpr, +oo ats,4M11 w,773� at�� av it A in I" MAIM"1.M�700 so POT Clem Ptow 4'YWwA—Mr.11n SSAM Us 3U41M 1.14 1aQd5/ 1'M IAI s1 1.N a, tAl �� 0 a,.»sfit S.lM st,77;MM 31f7a37Mi IitaM,OAS WTCASHwi... ntirY�A+►w � �� 814s14 15141t/ SAI � wls mum a1a 51X4 td ssq O"Aft � st t st.�.7M$W 11311m➢ 3 .15 8115 511101 W%M3..4.Mrn $, 1,.137,41, 113A33 11341413 :11,101513,111 :14A1 x411,, alrdum "g�+aaywa IWWMWftWW t�,ir 4 GM ohb G12 ummI00M1s6 011MARMA MR O/N471MG MAXW AND CAM Itm 4% TM CNMM TAXAUWT M1MOi DYA1A7M12/ UM bo l"llom OpwiD fir LWL 110E lbbell* m4L f! 2M 17 N 1U 16 11 10 to is 21 12 21 H CAM room" am s> —M 1A2SAS" SkPmUI 151K2M SS. "s s3.m4" iLOMl2f1 S40S2SS /4224172 14nLM1 14U4An Iw..U),M- D%M10 Mus 131.1M SAM a11a U&M sn"I U%ln f %ml s1].1a a1`1M 111.Mr M[Ap AOe SIO% G241/011 OM.MM GMIJM GIulM On.30 Oa2.12a M2f%174 62"Aw fluka2) 6111AM COMM 1187.171► Mr Oerd beme $477%00 �1 $z Ri1S s11S1111 1A2Ndq a.10Wa sGv- W 11 o- ss login 5401%071 MZD 7^ 7 AMW orm"C+ as Ara G&P% M WAI% M MIP%174 MIAMl1M 01.7^^ G%M M OI.f24MI 1110%41) ISIMY.101) OLM41III =MON WAMM Ndopwims x.11.20 S%V"7 UMAm PAAMi $1ULM s1A1LM UARM0 UAKW sawAx SXNUW *%MXUI g41M„/12 awbo -ft "MW 15""M 07MM41 03144M MMYA M On"M Gn% M) GMA7s atllM OIMWX OINAfM 427fA01 =Wpo 4e=040 ww JAMS a a *Mn 0 a a a so ap.51M a a !b GW1/10WA%VJLV=M0 WW aAN%M ss.N;MO s1MA20 $%XDAM s>30%04 ISJP% ! s2A1.M S%b"A22 sLfM M s1.I Fjm 13ANLM 1%~1 DekSwviuD- a2r"DmW OSMUM 0t"U M 01.7R.17M 61.771074 01JnA M GI.7717AG 01.771011 f".M iM 01.771110 M1.f7W" 01.77A17M M17n.}7q Da1CoiwaOre Im 111 1.71 1.M 1A0 IA US 2m LII 2m LM 111 PAi C0 MAYA ad7o�AMIm SOM40M sum*OVAM1 SI. W.Ia GW4M 11.01Aa sm" NANA* GNU" SIAM N 61%v4 11AS = 1)A4U6 SIA* 02 s1.71R270 x44^4 1LM%4f 22.1nw, owM 1217d am M MR C"" RM 7A V.WJW 11A14v1 11.2SQda s1,11471f sIA0.s11 071.710 s1.VLnS swim) SIASLI7S GUAM s1"U64 M44M 11.7$148 On.2U4 0724871 6st.f24 S1A0LMI tl.M.150 52.004771 Mwb� I W* we am*" 87AM S2A457 SM40 MAN moo 3317» Su.m IAM 17440 SSS M x4122 SIs fU gl1a. AOW&AW Cls dU-,Wd Ir+ *-Apb 7WC.11 r11 w3 OfSAUM 5UDGWAND CASH wnw 4% TAX CltvDMTAxmmM r1s3Ni IWOMA 1W MOM tiem 4wa+our r ''m'r'a MIOL ata SOL 3.W& zift 33 34 17 w >s ]0 pall mw. tawwrom w 31,>'sA11 MyR�7ri q.1�Y13 A.»7,770 37,p,331 p.111O3 Now.f AAwop S.tOs SAM 333.IM 111.14 i».1o3 331.1M s1t1o1 Nw MlY rrcaww MAX* am"') sn"= 03N,t7s syll{7) W7lltlp 1"KM MM33L1B K7v m $5 37,10.14 Oft pbcm s A foo K#� s31w31 � o317t�1 KMI�M s177.>Isll 3�i11�u 07s10� K77R110 O>Ig37A 3VM7.a1 GN111Ow loon a .39 out" OM -Q -FAN lMr 4r S M.771 1�i�71 K1111i1 s4mm K1M N � Odn COOL a s1.nsjm us 61,773AN s1. now s1.773Imjpo st.A111M K�1MOM s1.77;,t1's GIN Rflrlll� Owd*wAaatW/, 1>4sA 31m%= >� wills 7.31 3L3�7R MA1Vf1 7.0 fLN3,71t 1.i1 NET CASH N.OMA11l s1O/i A= W fLlK2 :3.07.1!3 fQ GgIA" 44%M� 1~w� *A►MOL hetes 37'/x,133 f1.771.41 >j7.i73r771 111.113 ! SAW Wdo 311.b1 s4km 341.l74 vmr. hwc4o 11i1e C-13 RMTAL FROIOTYM SfIICRD RM AMUMOM CNI RATMG AND FARAMMOM Rf6 m ft)M BALAW35 4%7A% CREDITS, TAII4=AMf BONDS Of931ATING R86ERYE 1 2 3 4 S 6 7 8 9 10 11 egiieR Eaais 15007E �. M $331,908 $4,980 5372,945 $5.5% $415.416 56,231 $4$!,446 S6"$7,576 $50S,0S2 $SS2,370 $601,361 $652.104 1704,"7 $$11,386 C"dbuian 3.000% 535,100 135,978 $34877 537,7!9 $34744 539,712 $5,286 $40.706 X1.020 $9,782 SIRS70 Widdraaeh SO s0 s0 10 f0 s0 s0 $41,723 $42,766 $43.6 f0 Ending Balance 1331,908 $372,945 5415,416 $4$1,446 $SOS= $552,370 5601.361 s0 $652,104 � $701,652 $0 Man. Balance 0 e Moa. Buds: 6 Moa, 5585,000 $599,625 $614,616 $629.981 $645,731 $661,874 $678,421 5695.381 S7S9,Od7 6770,14742 REIRACEMEW RESERVE $712.766 1730,586 $7486849 BeRinn4K Balance 1500!$ s0 i0 5130,000 $1,910 $264500 13.998 $409,757 $4146 5560.036 $En401 $244,186 $428,0:9 55$4,253 $$11.563 $$11.276 3381,701 rAnirl6ndions W"awals $130.000 $134,550 $139,259 $144,1333 $1 $4,044 S1S4,39! $4420 $119.80T 18,!14 5165,3!6 $11,$28 $14,269 55.726 Ealing Balance so 11301000$266.5W s0 SO $409.757 1 1560.036 $269.586 5428,029 so so $171,1$0 $177,177 ($761,021) $Ip 378 f0 SWAM AM 6768,563 5!51,27676 5381,701 $570,B04 Car ofug" ANo,dabd w w.e+twAm d R*M ftAndAY nVC•1 W* C-13 MEMAov% K*ACMD FLAT ApwMgM NdC 11256M nMD OALAHM 4% TAX CIMTs, TAX.EXEAWT B014M OPERATING RESERVE 12 13 14 1s 16 BeRWI ft Balance hre.erl TaminRs 1SOD7L $774442 $731,9!! $793.729 l306,635 :367,315 W,010 17 ' 1i 19 20 21� - 2T -- -- Condlbulbns wkhdawws 3 fix' $11,557 $11.710 :11,906 s0 SIT.03S �� :13,205 SM•� f13,4so "K,933 fl3 $IMS76 f934.34S s1.00S,B7S Balance so so sy 9s s0 so 313303 to s14,01s $15,013 Ma. Ala. Oalanu I Mos /u�. $731,9!9 s793,729 i105,63s f3f7.31s smoms $310,330 $90$,930' f0 fo 157515 so so to 3EPlACfMENTRE5ER11E 6 Mar~ f767,S71 :736`760 $306,429 $326,590 $347,254 fWA436 SM147 $lTg536 9934-345 st A35.37s f1,024963 U bfinµ% Malang $912,400 3933.210 fl53,5l1 $932,555 Interog Earnings CUIM&AiaWithdfavoM 1.50076 fs70,3W $769,163 $$ x•1657 $1,1",110$7,927 s $1.175.211 $1,4;,,316 $, :!!6,139 1203,314 521%430 7,011 $217,7!5 $14133 $225,413 XMI $17,673 $21,515 SSSS ]03 $3,375 $325,350 Enr3ng Balance $769.163 s0 $977,139 f0 $1,195,110 1s9s6.03� �33J03 $741,474 1496975 5253.673 $12,330 $267,726 $467,379 S69T.115:927,!36 51,175 214 $0 51,434.316 ($1,147,453) SSW303 $0 $325.350 $1.105,436 Gar e1TuWw -- ftpc-2 Able C-13 RENTAL FMOFUFM U aw PLAT AMRf11IEl4n OPERATING AND EVILACEMENT RESERVE FUND RAIAWN 4% TAX CREDITS, TAX492A FF BOND$ OrER/1TING RESERVE 23 24 2S 26 27 26 29 30 Beginning Balance hM MaaEuuM>Ri 1.50016$15,314 S1,020.963 $1,036,278 $15,S44$15,777 $1,05!,1122 $1,067,5!9 $1,083A13 S1,1 66,41116 $1./M, 511,827 ,20 ConnribW" 3.000% s0 s0 so $16A14 s0 $16,251 WWI $17,4!9 $0 (17,776611 516,027 wNhdrawekso $o f0 so $0 50 f0 f0 $0 50 Ending Balance $1,036„278 $1,101,112I $1,067,399 51,063,613 $1,166,568 $1,1",066 $1,201,1127 $1,219,BSS Man. Balance 411 640L Buds: REPLACEAMM RESERVE 6 A1oa. 51,007,119 $1,032,297 $1,058,10S $1,084,557 $1,111,671 $1,139,463 $1,167,980 $1,197,148 Bmonr g Solemn Isom" Earnings 1 SOM $1,105,456 $16,$82 $1.3!!,131 620,!87 $1,706,916 $2S.6M MWAZO S9,9S7 595%"9 $1,313AU $1,662,190 $2A24A7 Contributions V1lilhdras@is $277,097 52116,795 SM633 $307,222 $14,715 $317,97S $19,705 $329,101 $24,937 $340.622 $30.421 $352,544 Ending Balance f0 11,399.134 51,706,916 1$1,365,5331 5667.820 $0 59114999 50 $1,313,66651,662,496 SO $0 S2,OZ6,OS7 (Sl $781,976 Cur of haven NlediO4p"aid Le�wap� iwen{a6 AedFy r4p C•a 1We C•14 RENTAL rROTOTYrE; 57ACKED FU1T ArARTMENiS MMI LOAN LIMITS 2007 l/MY ~ ll~ • MtR Loin Lkdt Irr UN! Aq~w AYV Loa Udt fiu R d UaRi 30% AJW f0% AAr 30% AMI f0% AAM 39% AMI 60% AAY 1 lf~ti0om 73 I2 51 f110.6l6 f4S.000 52A35,092 f2.39S,000 (4,79409= I e~dioo~ 100 30 70 1123,938 f4t,000 f3,710.110 {3.15q,000 (6.060.110 7 ~dioom 100 30 70 (134,192 S4S.OOD f4,OdS,160 f3.1S0,00D 57,295.160 4 8~duaan SD 15 75 f116,6l7• f45.000 f2,I00.4SS 51,57l,OOD 53,77Sv1S5 16YI 323 97 236 512,139,147 510.170.000 522.60!,11) { ~ ~a>~ ,uaaw~ c..... L...R.+r~M6 ~•~rw .~,. au ASSUMPTIONS Table C-1 S RENUL PROTOTYPE: STACKED FLAT APARTMENTS RENTAL INCOME AND OPERATING CCtSTS MH- PROCRA/N, TAX-EXEMPT BONDS, 4% TAX CREDITS 2007 Median Household Income, Family d Four Affordable Haring Cost Asa % d IrKrome No. d Bedrooms Totar• Household Sise (1) Household Size Incase Adjust. Factor Utilhy Allowance (2) No. d Unib 323 Trial Bedrooms 773 AFFORQABLE RENTS BY INCOME LEVEL MHP B 009fJ Affordable MorNhly Flouring Cast Less: Monthly Utilky Allowance Affordable Morttltly Rent ~NlBdiRn Annual Gtss Irsoome Affordable Monthly Housing Cost Lem: Monthly Udlity Allowance Affordable Monthly Rent NET OPERATING RVCOIME Affordability L.evellWo. d Bedroons MHP B (309fJ 30.07E d Urrib 60% d Median 70.0% d Unlb Average Affordability Totab Manager's Unit GROSS RENTAL INCOME Les: Vacancks 13) MlsCel. Income GROSS ANNUAL INCOME LESS: OPERATING EXPENSES less: Operating Reserves Las: Replacement Reserve (4) NE7 OPERATING INCOME 1 eedroorn 2 Bedroom 3 Bedroom 4 Bedroom 1 Bedroom 2 Bedroom 3 Bedroom 4 Bcdroan • 5.09E stoo FM unh f300/uniNmo. s7e,7f>0 30% 1 Bcdroan 2 Badroosrt 3 Bedroom 1.5 Ptsrsorw 3.0 Persass 4.0 Ftersarss 75% 9A% 100% 554 168 S9e 73 100 100 73 200 300 f/56 5547 Sb32 rs54) (sba) ff9e) 5402 5479 5534 535,415 X2,498 (47,220 sees s1,Ob2 Sl;te1 (f54) (f6~ (f98) 5831 (994 s1,OB3 Linlb Rent Mp~y Gross kroorrte 22 (402 S8,e44 30 5479 (14,370 30 5534 S 16,020 1s ss9b se,s4o s1 se31 s42,3e1 70 5994 fb9,5B0 70 f1,OB3 f75,e10 35 51,166 540,810 50.99% 323 (276,755 2 53,600 Fbr Unh 3.0% doper. eudgd 0.6'K d Construction Cow (1) Assumes the lesser d TUC occupancy standard (1 S persons per bedraxn) and Calffomia Heahh aisd Safety uccupanq standard lone person per bedroom plus one). f2) Sourr~ County d Ong Haring and Cammunhy Services, effecthre October 1.2006. Asstnne tenant pays all electrk heating, cooking, and water heating and bask ekcsrkity; landbrd pays water and trash. q) TI;AC requMes s S% minimum vacanq rate unless waived based on vacanry data In the rrtarlset area. f4) MHP require replscenKrK reserves equal to 0.6% conspuctbn costs unless ulherwise approved. ~flurdsbJb G+P ~ ~1b f`i ~`~s 4 Bedroom 5.0 Piersorts l Oe% f 109 50 200 (705 cs1o91 5596 s5o,99e (1,275 ((109) 57,166 53,321,060 15166,053) 532,300 53,187,307 151,170,000) 1535,100) (1371,012) 51,611,195 ttNs C-1 i Table C-16 RENTAL PROTOTYPE: STACKED FLAT APARTMENTS DEVELOPMENT COSTS MHP PROGRAM, TAX-0(EMPT BONDS, 4X TAX CREDITS Acres (Units Plus Parking) 13.00 No. of Units 325 Total Living Area 319,150 Community Room 0 Totai Nat Square fief, Residential Units 319,150 Other Building Aros 0 Total Nd Square Feet 319,1 SO Total Gross Square Feet 319,150 96 Residental 100.00% Tax Credit Elio. Basis Total (10076 Raid ) LAND ACQUISITION SITE WORK UNR CONSTRUCTION HARD COSTS (1) CONTINGENCY ARCHJENGJCONSTR. SUPERVISION LOCAL IMPACT AND PROCESSING FEES ALTA SURVEY ENVIRONMENTAL PHASE 1 SOILS TESTING CONSTRUCTION BOND FEESfCOSTS CONSTRUCTIOWLEASE-UPTNTEREST REAL ESTATE TAXES AND INSURANCE TIRE AND CLOSING APPRAISAL FEES REAL ESTATE LEGAL ORGANI711T10NAL LEGAL MARKET STUDY . POST-CONSTRUCTION AUDIT MARKETING/LEASE-UPSTART-UP OPERATING RESERVE 543 Pbr Sits SF~ (24,350,040 j0. 520 Pbr Site SF 511,325,600 511,325,600 1194 Pb SF 561,835,313 561,835,313 59G of Hard Costs 53,658,046 53,658,046 79L of Hard Costs 15,960,072 55,960,072 (26.05 Rer SF 58,315,308 58,315,308 53,000 53,000 • 57,500 57,500 510,000 510,000.. 1.0096 Plus 5100,000 5771,610 5771,610 5.509E 15 Month • (3,139,778 53,139,778 . 1.609(, of Hard Cosh 51,362,302 (1,362,302 515,000 115,000 Sloooo slo,ooo 530,000 (12,000 530,000 SO 525,000 S25,000 f 15,000 SO S 100,000 SO 3 Months oiler s292,soo so 2.0096 5710.384 S17A_3aa BOND/TAX CREDRAD'VISOR 530,000 50 TAX CREDIT APPLK'AT10N FEE 52,000 SO TCAC ALLOUTION FEE 4.00% of Mn. Credit 5183,008 SO SYNDICATK)N LEGAL 530,000 50 TOTAL USES 5123,561,461 597,760,91? PER UN~i 5380,168 5300,809 PER SF 53x7.13 (1) Estimated hard costs, assuming prevailing wags, at a 2596 increase in hard ~:osts over non-prevailing wage costs. (2) For MHP projects with tax credits, the difknence between the maximum developer fee under TCAC: 51,940,000 and the maximum under MHP: 53,137,500 be deferred and paid only out of cash flow. CNy dTwtln Afbrdabillrr Gap and Levera8ed financing Analysts p~ G_t Table C-17 RENTAL PROTOTYPE: STACKED FLAT APARTMENTS FINANCING ASSUMPT10N5 MHP PROGRAM, TAX-EXEMPT BONDS, 4% TAX CREDIT'S TAX CREDIT EQUITI' Tool Eligible Basis ~; ~.t?uali}ied Non-Rtoourse Financing less: Eligible /~unount Voluntarily Excluded Unadjusted Eligible Beak Adjusted Eligible Baas Mlgh Cost Area AdjuW Qr,an'llea Basle Tix Cn~t Rant Mnual Albw Credib Tax Credit Pricing (Equity Raised Per Tix Credit Dolled Federal Federal Tax Cn~t Equity (999 CONSTRUCTION BOND AMDUM Constr. loan Arm. Irxerest Rate Constr. Bond lssuana Costs/Fees Average loan Balance-ConsUuction Consenrctlon Perbd. Lease Up Prriod Construcdon Loin Interest-Constn~ction Constructla'r Loan Interest-Lease-lJP . Total Interest Cost Bond kswnce Costs PERMANENT BOND AMOUNT Coverage Ratio t7ebe s.rvlee MorlgageTanrr Interest Rate Max. Mortgage Amount (DCR) Qry of 1Lsdn AfkrdabUlty Gap and Lewyed Finandng Analgstr 597, 760,912 0% SO 597,760,912 130 5127,089,1x6 100% 5127,089,1x6 3.60% S4.S7S,211 57.05 547,559,315 5596 of Agg. Basis (67,161,024 5.50% S 100,000 Pius i .00% 60.00% 12 Month 3 Morphs 52,216,314 5923,464 53,139,778 5771,610 51,611,195 1.25 sl,ixa,96o 30 veers 7.00% 576,115,037 PapG25 Tabk C-18 RENTAL PROTOTYPE: STACKFD FLAT APARTMENTS THRESHOLD BASIS LIMITS MHP PROGRAM, TAX-EXEMPT BONDS, 496 TAX CREDITS Orange Co. 496 Threshold Basis Limits, 2008 Unit Size TCAC Basis ~ of Unib Limit Total Basis 1 Bedroom 73 5179,727 Z Bedroom 100 5216,800 3 Bedroom 100 5277,504 4 Bedroom 50 5309,157 2 Bedroom Mgr's Unit 2 5216,800 Total Threshold Basis Threshold Basis Boosts Plus: Prevailing Wage Boost Plus: Subterranean Parking Boost Plus: Day Care Center Boost Pius: Special Needs Boost Plus: Elevator Boost Subtotal Boost (1) Plus: Energy Efficienry Basis Boost Plus: Distributive Energy Boost Plus: Seismic Upgrade Boost Plus:. Development Impact Fees Max allowed 20% 7% 2% 2~e 10% 3996 4% 5% 15% 20°'e 090 0% 0% Total AdjustedThreshold Basis Total Unadjusted Eligible Basis Requested Eligible Basis 513,120,071 521,680,000 S27,750,400 S15,457,850 5433,600 578,441,921 515,688,384 so So SO 60 4°,6 53,137,677 ~ So ~ SO 68,315,308 S 105,583,290 597, 760,912 597, 760,912 (1) Under2008 TCAC regulations, tfie total combined boost for prevailing wage, parking, day care center, special needs and elevator may not exceed 39 percent. Ciy of Tustin Afiaordrbiliry Cap and Leveraged Prancing Malysis page C-t able c" 11WMPMDFM-la AilvaRMAMOVA dls CWNWJ Nc WLXlW MO CAU" waw 1Mr "K)GMN WUX EEWT soon liMADOw SAM& roembs� iloli oproacie. SAM Fm--mdip by i.7lri 1 = ) 4 11.rw r.�w Cw pbow I Ont taowvcm r ll MAW Miss$ S%4MM ss1.IM sLMLIss M ss i7iAW PAKIMI ss.7s7A7i U",411 13"As7 S"*M! sAlsD3g l%illiss %MAM %%CWcyA16wmn= SAM 0146I4" O17L3s! U& 0174AIN s1i.IM WWI) U& M fta%nn sum 0147A741 $141411 RMWMI lss.IM (fts7#MA SAM 011131111 sm"s IAOf<t.374 lil.+M s31.1m Rilsisa OH7AM 14111r+d Y� . WAVS]CUUM$is 1lMA 7N i007p> A p s1oMgtlp.e st.sAM"JWM$ Opw+AC� - s7M AAS Imomm 4 GIAGAM M."WIll GIJW,7M O1.M= MJMW MA316= n1ASLMa M.s1LAU) a/ASAlM OtAALmnI Os.7%160 N+0N ll� aq"mwdm @1 s MAIMP IAAsAw s AKW sillt sM 1i11AN Mss1l.11A DAMM M.ssAMs • sm"I si i7LM sa,42l.tn $1.142 AWOL ODIAIM 413" 7l OWAsn 4141 U471 OQUO 44WAIM od"M Ooapisla � y c>a..lr�/.... ialn► lM A w3m As7AM O lk" 41,116" OMAAAs1 /AA11n 64%M oft" OMAMa dill i1M CAMMMMMOIKU K sIAMM s1ASA.7M lIAM42l $SAIM" .7sA ilAM 11)il7A! $Ano" SIX& M 04Lsi4 sI.M1M **AM 44"142 so a1M7w.1�/4litilawd al.?AtLl10) 41.7AA.AN M.MLl14 I1).iM.'MM (11.1 Um GIASUM SIANAM ("ANA" 61JUAO $$An.= GIJMAM s1Alssil !1.141.$1! DdmCawwmde US I27 1J! 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A 7sMRs ss sSSAs1 �ae• fQ10 Qauf ql.urn a4tw�� a'afOsssf..'a7la0Mf,1a7s1..M'sNSAM a�l� p CAMRMIMD BM OSM N ��um Oman WMAf ansin) "An 114,0111,313M oersawbIwMtlw/ $102 .3145 i/./MSM pAp �A�DlkCWAWpftlbRal"'" Mas%IISPyN MUM GIAM O aIAMAQ 91ANsq LI Ra'�M 1131,1101.3113 a, an�rM fl..fff.sMsp M O��wAwAr.Nq a>"na0oR•A"~' f a,ala fss MIFSAal M1Ylas f+aasa ! slift M ,it a,.rLlq a1�lN 4RTQM1ROWMIR1,I aalq 112"� � alM� asaa p�a il1lm1n OAF 1.71R OdMW u„A� asqw o"Oom " sas °s'a Glu w: Maai!"� wOWMaM.Oo"e 1[re SWASi,� �.��� f2a0 sWar so WSx Jj fos,Y o.1..er tao .,iA s4,:, so a �86 sllaa so $nus 0 WAU faMa ss!!!s so so so so A!C46 LAIN C•111 NNW FWWXM RAO® IM ANMNINR CMN wow A" /110CUM W UX IXDA"11asa 7SOISA11p" RRIM knommeww Op.A.11 Car mob meL M 1180101 aft 10 C.rr Fka"W am %ft.0qr N71 swr Amemw Osr.w11cU" ".1grldr4o em. CUM wow /a4 !man ask Sw- o-raa*w ogre od. c....p w. NE7 CM" wow 4+r��Ms1.w. 7e7 CAS" R—AMU NK MCL M 7,"wt r odr./ g0ry7wwllw MR CAS" wow ASTa wsUSSISp oN M odwwd ow 7M sdmm c1,dw,m. "s.wf° pwd1..00l@d1r0.0ssn.Anr summ 14137.111111 781141"1U �� 111.414 1111%ms 713611111 P%um MISS 11111147" 1117117.0]1 Tams" 07"11A" 71D1." 0334071 711.n41111I 74/1111.1N 7 =kM 17174"11 s11a77at1 11MIP& 7 mot -41010 ISL7st1177) 0�111.»'A NXISM5 O&AL%A01 s7.11;.1q 14.11114174 DW.141 R/17j11 1111/a17� 7L/114tH AM64W DAIIQ DAI*A* is onion111111 o11v,4p an47a1 MUM 1i1.Otti17A sxn%om Sum IQA% a 117.7374" pN 7771111" $p IPA&UR I.n stas47s11 SI. N^% $1.7N.11i0 61 nam 11.71411M sun"" 1•DA54 IAF 7M4Ns Us 1o%= 1.77 1.71 1.07 0141711 o74wq 7n47R MIA11411 Vivo" 71A1a+I 73711.11111 1117 471111 76411641101 1111.11111 4x7100 G"41 so 111 0 M 17411" 0 M7AI7 1 � 111741117 711111,7!1 0041171 1IMAI? 1747ob 1174 714b1 N111111 74 M 0 O 11�4+ow 7IP C411 TAIM G20 NMRMZNIf Rftm ! R1ND MLANm MNP PROGRAM W/TAX 80W. DONDI 0MAT1NG 9ISEVA I 2 3 4 5 A Vi I 9alao .N 6331,90 $4.6110 6373,2116 $416.493 SM.4nK3101 $90116: 7 f D 1 1D 11 _ y 30007 $7$,100 f]f�72! SUAW W2� 37$, S'fUS 640.279 47$12 641 f�f7f LV � m p1f•D77 f $7710 E,dNA 9aface :0 $531.999 $0 $975,294 59 $0 so N $43.147 $M �A .UD fISA73 f4l�sso MIX 9AWA O 4 MaL 6 Mat 1514, OD $41�as 6461,659 $50,09 iSs41Dt f09w 1661,!04 PISA" f0 EnAQMfOTI mem um4n um"7 SGAGW fq1 .0 4614,71E $719,114 $770.7Io SM497 i744,M $7/4333 $797,215 $925,200 ftMdr w� I -mm ssoo 65o SMA12 $IA12 5747.599 371,214 61,129,115 $lisv $1.&17,774 $22,717 61,111,152 f791.91D 51.16(,737 f1 wW�Arwr.la EadnA 9afbo* 61nAs2 6371.01: 9D $3nA", f371AIa 13nAl2 $29.$73 1371.12 1114739 f371.12 117.4n $1.9 -$" $29,213 $3,347,755 $35,216 SMA12 $747,59! 31,121,915 11,517.774 1D 11,911,552 Di1,121242► 1D $371.012 so 071.12 so so $371AR $371.12 90,995 51,164,737 52.no $1117,530 $0 $2,347,753 12,7S3.9L0j 4477 a1tr,4a I" cab UNM rMXCF I6 PAClWRffAPQfflhM OR6A26VGAND 0 nACUAB i FUND 9AL4N f AO1r tiCWWWA IVIUR BOOT 60110$ DFR417N G NOMM Ali 12 13 14 1S 16 17 1• 1! 20 21 27 mdomm arse Frm Cart�ube st2A� si$2�n! sly :917,!0! $17 S971A677 full$ � s1bA! SIAIIA42 S1S,20 SiA3A2; VA1M431 $1,130.370 31,147.325 51,164,W tvNll6a..b 3sool!< 3 aoolt "39 to so WAN $0 Pss0! se SIV41 SWISS $149% $17,210 $17,4p E"A"66'1'"1T m2:069 so 6!17,!0! so $lsl,p7 so '"%W !6 51-MOU so S1A63,l22 m S1AM431 51.1 7Q270 $0 51,117,325 so so so Mai. ww" 0. � � 61Aot 56$4.6$2 f6a,l7S $!14,!14 $!144!0 5lIOA7! st.164s3S $I,la2,ao6 6�lActnwr � f1A11,IB S1,019A69 S1A64fA11 61,12063 $1,164.026 51.204.767 ko°1ftmals— Lwow 0—MM 841a10 SNUIS s1,A47 $1440" s2a2» 51,739,617 stial7 SZIA6 1!6kdomm s2 Mlq ��7 $1,3p.ISf S1.7pAi cmplrdmdb�1.S0ox �""o fmAl2 WIA12 S371Ati $371,012 $62,0$4 $371.012 $mA3 S371Al2 Sl 1371,012 SAN MA12 $24746 $2.100.7!/ s32,712 E wan $st3 tt�t1 st,346,sn $1.73!,6'7 >o $2.u4l26 s2 Sf!!!2 52,9M%1a Sly 6371Al2 $371.12 51,3l1,1S�7 f1,7po 52,10g7yso $2.961 su c+.w A6-dAd%VwWALVAW6rR I A■+pi %Pca1 W& C." Iowa � 9DOW ftM XPARTUM OFEaUlR MWW R1MI1W� t" w SAM wiwr =wT @GNw 0191MU G MM1vt Swome 23Islonaft 21; ti 28 f,,,,bo 7.000: filflrplb f74,t1i s1,2s�SS0 $19.1516 f1,29>4iN ft9, f1,f' ft41%)Ii S1,4W�W s1,821AM 30 f1.S7taSS Ending Islam,e 3 o so SO w so so u1's" %0 ll1.fY 1tl fif Mn. M14wa • a Mot, ouiv i Moc f104ASO fl N '�`� f1�1Un f1,41SM9 $1,436" fp f1,45%M s0so f1,S72,3S5 SD UKACDAINTNUM St,4i,991 f1,794s77 fl.11s 70 3t,1 ASS AN s1�9v f1,99! 9�0 �n1Mot6� a s1 s3zim f1^44 fro6on F""'"� 1 300!< u' Sti u.>K>!3v s1A14.MCG-Nkdkm s1,p1A19 {lK914, u.s Endr�6rylq srs : Tiil m2 f0 sisr o i 01611% un wa f771A1! � $MAN= S4Mn ufK7 f7,01{>K fi,pl�g f0 f1,739A6 so f3,1>4951 so f3,Sl/,p0 f3TA13 so 13,N1,7so N 53.43"" r t r1 -da n P C-22 APPENDIX B REFERENCES CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM JUNE 16, 2009 This page intentionally left blank CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM JUNE 16, 2009 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, June17, 2008 and June 16, 2009. 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 JUNE 16, 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 JUNE 16, 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 13. Jim Palmer Orange County Rescue Mission Village of Hope, Tustin (714) 247-4300 CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM JUNE 16, 2009 Tliis page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM JUNE 16, 2009 APPENDIX C MAJOR EMPLOYERS IN TUSTIN CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM JUNE 16, 2009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM JUNE 16, 2009 LIST OF MAJOR EMPLOYERS IN TUSTIN, CA Company/Address/I'elephone 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 Edin er 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 E ui ment 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 E ui ment City of Tustin - (714) 573-3000 300 Government 300 Centennial Wa -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 New ort Ave -Tustin, 92780 Vitatech International, Inc. - (714) 832-9700 178 Pharmaceutical 2832 Dow Ave -Tustin 92780 Pre arations 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: City 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 HOUSING ELEMENT TECHNICAL MEMORANDUM JUNE 16, 2009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM JUNE 16, 2009 APPENDIX D ORANGE COUNTY BUSINESS COUNCIL 2007 WORKFORCE HOUSING SCORECARD CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM JUNE 16, 2009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM JUNE 16, 2009 •.~r; Y~•Y~- .,t -" w f~~ ~ T"~ ~ i r '7^° s "°' .~~ :'.~;~ ~. ~> .. S. ~~ ~~ ~!/ it 41I .~ :.. ~~ r -1.~*~~ t { w ~~ ~"' F,': _~c -. :. a1~~ (~ ~+ ~ ~~~ SPECIAL ACKNOWLEDGEMENTS ORANGE COUNTY BUSINESS COUNCIL BankofAmeric ~~~~ 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 b Smith Advanced Medial Optics Allergan, Inc. Automobile Club of Southern California Bank of America California C 6 L Refrigeration Corporation C. J. Segerstrom b Sons ' 'w~ California Bank d Trust, Orange County ~ f\i California State Universky, Fullerton ~ _... Carter 6 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 Allso VieJo City of Anaheim City of Brea Economic Development Dept. City of Fullerton City of Huntington Beach Economic Development City of Newport Beach Chy of Santa Ana Chy of Westminster Clean Energy Coast Community College Dlstrid County of Orange -County Executhie Offke Cox Business Services, Orange County CT Realty Corporation _ Earthlink Munippal Works ~~ Edwards Lifesdences Corporaton Elsinore Homes, tnc Experlan Farmers b Merchants Bank First Ame-Itan Title Company Fluor Corporation Ford Motor Company Frecdom Commurrkatlorrs Inc, Metro DhAsion Gibson, Dunn d CrutcherLLP Hoag Memorial HospRal Presbyterian Hospkat Assodation of Southern California Hyatt Regency Irvine IBM John Wayne Airport KB Home KOCE-TV Lennar Homes LSA Assodates, Inc. Manatt, Phelps d Phillips, LLP Merrill Lynch Michael Brandman Associates Morrison d Foerster LLP New Century Financial Corporation Northwestern Mutual Financial Network, The Wahos Group Nossaman Guthner Knox 6 Elliott, LLP NutrlUte, a Dhdskm of Access Business Group Oce Imaglstics, Inc. Orange County Business Journal Orange Courrcy 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 b Company, Inc. Padflc Life , Paul, Hastings, Janofsky 6 Walker LLP Porter Novella Poseidon Resourus Corporation P-IcewaterhouseCoopen LLP Quiksilver R.C. Hobbs Company, Inc. Rancho Mission VIeJo, LLC Random Santlago Community Cdkge District RBF Consuhing Right Management Rutan 6 Tucker, LLP SDGiyE and The Gas Company Siemens Corporation South Orange County Community College District Southern California Edison Company St. Joseph Heahh System Strategic Resources Alliance, Inc. Sukut Construction, Inc. Taco Bell Corp. Telelogic North America Inc. The Boeing Company The Disneyland Resort The First American Finandal Corporation The Irvine Compar-y The Paul Merage Sclpd of Busirress/UC-hvfne The Robert Mayer Corporation The Showpros Group, Inc. ToshBta Amerin Ekdronk Comporxrm, Inc Toshiba Amerin Information Systems, Inc. Transportation Corridor Agendas 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 4 :: ORANGE COUNTY ~~ ~ BI SI\IaS COl \(~,11, ZflO~ ~1'~~rlcf~~rct Hoi.iyin~ Sc~~rccarci TABLE OF CONTENTS I. FOREWORD AND ACKNOWLEDGMENTS .................................................................1 I. OVERVIEW ........................................................................................................... 8 III. DEMAND TRENDS: POPULATION, EMPLOYMENT, AND INCOME APPRECIATION IN ORANGE COUNTY (1991-2005) ........................................................................10 IV. SUPPLY TRENDS: HOUSING GROWTH IN ORANGE COUNTY, 199.1-2005 .............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 Conterrts • • • TsWe d ConterKs OCf3C Workforce Housing Scorecard 2007 `JKY~IIO iI MaG\RIUr F'I~I•A/ VII)/ W Sine Mi 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? name 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 keys commuting into the county from beyond its borders will ty 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 Adcnowled~aments The report casts acounty-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 ^ 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 increased housing supply. The Orange County Business Council Workforce Housing Scorecard and the OCBC's long-term com- mitment to. this issue is but one part of a larger movement for increased supply and affordability that must take hold in Orange County to ensure contin- ued, long-term prosperity. This Scorecard is a starting point to foster a broad. and sustained dia- logue on long-term housing supply and affordability. One rewarding aspect of producing this report has been the reassuring discovery that there is already a dedicated and diverse pool of agents from the pri- vate, public, and nonprofit sectors seeking to 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 ~ianel 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 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. 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 Gorcryca. This report was de- signed by Danielle Bates of the Orange County Business Council. OCBC Workforce Housing Scorecard Zoo? Foroword and Acknowladyements I I. 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 Orange founry Business' Councl!'s Housing Agenda The release of this report IsJusteone of many in#tia- tives planned to advance workforce housing. Following theJune 2Q07_briefing of this report, the Orange'Counry 6usines#.Council will roil out addf- tionat resources and initiative5,'induding: Release of tXBC Housing Tcrotklt ^ Feasibility analysis of infili opportunities at the ~Ifay level ' ~ Analysis of housing unit `bleed' during-the _ aPProva) process • Ho~ts~Cflnference fiorTlected Officials 5. ~o tn~reese~lncentlves and Er _ `~ t~ ~ ~!~'~~n of housing scorecard in two years w 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. The state of the county's housing in Orange County can accurately be described as an unin- 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 reflex 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 adensely 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 planrting 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. 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 asingle-family home. in Orange County at the time of this writing is .$634,000.' 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 .. 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) reportb 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- ple in five years. This rate of loss is nearly four times the state average. As expected, the number of children IN1~aF-the Scq~rcard;Dae,sn'tAres 7f~~-5cot5ecacd~is limited to four criteria: number =, _ of"jols, housing unit density, the ratio of jobs tofiousing units, and housing uniCburdenfthe nvmi~ittousang_ Lrzits ea4h ticy adt}s in; rely-~ , -~ ~~ ~- ~~ tl~~~~ ~-~u~nb~er added bees c - 3 ~ ~~~~' the .- -~,an~xi~a>?~~c~nietili~t~n of F ~ t - -~ _ c__ !„ ~p-~ _ ~ .:.. f= - Stu z t - :~ -- _ ~ ' y K ~ - - -. - ~ - - r` s ~~. ~p x s.: [ ^~ _ 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 ~ ,_ HOC % Change .; " 30.0% , ,..__._ ^CA%Change ___._.__. 2 5.0%" 20.0% !'" - _ 15.0%=''~ .41% 9.1% 10.0%~'~ 5.0%- -5.0%=; -t o.0%=~~ -9.6% -e.a% -15.0% 4 ::~.. ,. __...... ,. ____.... _. . Under 5 5 to 9 25 to 2 years years years 29.9% 15.3X _ 12.3% -2.1% -4 7% - ~%_1 o_7gf, 9 30 to 34 50 to 54 55 to 59 years years years 5 "An Exodus of.O.C.'s Young Adults," T'he Orange County Register, August 24, 2006. b "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 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. 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. \ OCBC Workforce Housing Scorecard 2007 Overview • 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. Woodbury Court in Irvine. ©The Irvine Company, 2007. All Rights Reserves. 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). Figure 2.2.: Cost of Living Index (Second Quarter 2006) San Frandsw Sllkon Valley Los Angeles/Cony beach Onnye Counq San Diego Boston Inland Empire Searle Austin Ilesa-ch Triangle i ~ Houslrg ^ Groceries ^ Health ~ Transportatbn ^ Miscellaneous ^ Utllitles 0 SO 100 150 200 250 300 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. • • - ~ ~~~~ 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 OVsuvlaw ~ ' 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 ViRjo I Rancho Santa Marga-ita I ' Garden Grove ~ ~ onnpe - Missbn Vigo ~ 2005 San Clemente ' Lake Forest ~ I i FulNrton ! ! ^ 1991-2005 Growth Laguna N{guel Tustin Huntington Beach Laguna Woods I ' Costa Mesa Newport Beach ~ Westminster Yorba Linda ~ ~ Buena hrk ~ I La Habra ' 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 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-ail under 8 percent-were Laguna Beach, Fountain Valley, La Palma, Los Afamkos, Seal Beach, and Vilia 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. ... t Demand Trends: Populstlon, Employment, and income OCBC Workforce Housing scorecard 2007 2 50,000 - 200,000 ~' 150,0007' 100,000 ~'~ 50, 000 -r"~ 0 Jobs Created 1991 ~Jobs1991 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 546,000 to S68,000. 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 d 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 VNJo S. Clemerrb Lap. Beach TustM B. Park RSM SJC Irvine Y. Linde H. Beach N. Beach Lag. Niguel Ls Palma M. VieJo Orange C. Mesa S. Ana OC Mediu~ In summarizing the demand trends affecting housing over the last 15 years, Orange County experi- enced: OCBC Workforce Housing Scorecard 2007 Demand Trends: Population, Empbymaet, and Income Figure 3.2: OC Total Job Growth Leaders (1991- 2005) Irvine Anaheim Santa Ana Orange Fullerton Costa Garden HuntingtonNewport Mesa Grove Beach Beach o~ sox ~oox ~soX 2oox zsux • 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 1990 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 Stn3et View . - Demand Trends: Population, Employment, and income OCBC Workforce Housing Scorecard 2007 ^ 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); 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 81 5,000 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 `SCE °`~S~ ~`~',° re`s ~S~Oear wear ,`~,~°,`J`'~~C~ `a~°'e't``¢~~e~`A,e ,t`i`e `\e`~° c' P~ Jca'~cep`. ~ P• P~ ~. ,Z,. ~`• O `fie ~,. 5tiR F~ Q ~a~ `', ~e 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 5. Clemente L. Niguel Westminster Fullerton S. Ana Y. Linda Placentia 0 Figure 4.2: 1991-2005: OC 20,000 40,000 60,000 80;000 100,000 120,000 140,000 160,000 OCBC Workforce Housing Scorecard 2007 Supply Trends: Housing Growth in OC, 1991-2005 Figure 4.1: 1991-2005: OC Housing Growth (Leaders) Wnucina tPaders...Trail Job Growth 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 } Figure 4.4: 1991 Vs. 2005: Jobs to Housing Ratio Deterioration L. Alamitos Irvine Brea Orange 5. Ana L. Hills C. Mesa Anaheim N. Beach F. Valley Tustin Cypress B. Park Fullerton 0.00 ... - Supply Trends: Housing Growth in OC: 1991-2005 OCBC Workforce Housing Scorecard 2007 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 Sources: Hanley Wood Market Intelligence (www hanlevwood com/hwmi) and United States Bureau of Labor Statistics. 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 5. Clemente Cypress H. Beach M. Vkjo Orange La Habra D. Point OC Median 0 1000 2000 3000 ~uuu ~vvu ~~~~ •--- 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) Lapurr Hlk VINE Perk LaFWn ffirton kviir Ar~rim W ~ NquM Turtin Grdn C3rov~ M frbn V yo 9n Jun GplNnno CoM~M~p W~lninMN Burn Perk B~~ Sri Brd~ pRANdEt:O<1Nn' M®IAN ~ 0% ^ 2000 % Overcrowded ^ 1990%Overcrowded ^ Percent Growth ^ _ ___.. _._.__... .. _ . TI 30'K 90 % ~0% 200% 250% 300% OCBC Workforce Housing Scorecard 2007 Supply Trends: Housing Growth In OC, 1991-2005 Figure 4.5: 1990- 2005: OC Citks' Change in Density (Leaders) 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.10 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 filF in any avail- able space within existing development." According totohn 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 protected 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 Califomia Homebuilder Magazine, Califomia 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 entin; city blocks, Manhattan enacted setback regulations on building envelopes, mandating that buildings biome narrower as thry got taller in order to mitigate the impact of their shadows. ~' Data courtesy of C. Scott Smith, a researcher at the University of Califomia, Irvine. Smith used the Pilot Califomia Infill Parcel Locator 1 from the Institute of Urban ead Regional Development at the University of Califomia, Berkeley. to identify potential iafill parcels in Or- / ange County. '~ This figure does not include the 60 acres allocated for an unspecified number of affordable housing. .~ Supply Trends: Houslny Growth In OC: 1991-2005 OCBC Workforce Housing Scorecard 2007 Figure 4.7: Orange County Current Infill Land (Acres) ^ Single 11 % ~ Family 6% 37% ^hulti-Family ^ Commercial D Vacant 27% ^ Industrial i ~' ^ 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,skilis 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 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. Figure 4.8: Housing Permit Fee Breakdown: Orange County Aggregate 47.5% 27.4% 4.1% 10.8% ^ Environment ^ Paanning ^ 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: Houslnp Growth in OC: 1991-2005 OCBC Workforce Housing Scorecard 2007 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. 2.3% 7.8% 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 1985, 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 atwo-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 Garden Grove had 9,700 and 5,900, respectively. In total, there were more than 50,000 applicants are on the 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 ho~us 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 51,317. 's November, 2005. prior to this, the waitlist had been closed since 2001 and by 2004 was down to approximately 9,800 ap- plicants. OCf3C Workforce Housing Scorecard 2007 Supply Trends: Housing Growth in OC, 1991-2005 These regulatory costs have negatively affected the overall affordability of the housing market because they are passed on to buyers. 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 1 S 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 by an average of 14 percent. One city fell short by more than 8,000 housing units. ^ Fourteen cities were allotted 30 percent of the total county need and-largely because of the performance of one city-met 60 percent t were allotted 40 percent of the county's target, cent of the county's need. f the county's target. Meanwhile, 16 cities yet collectively they produced only 21 per- 16 The State of California Departrnent of Housing and Community Development is mandated to determine the state-wide housing need. ... • . Supply Trends: Housln~ Growth In OC: 1991-2005 OCBC Workforce Housing Scorecard 2007 l 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 ~ r c~ ~a ~`c ,~ ~~ rya oc ~o~ a~ as ar `~~o`\~~ `~ay~~c ,c2` ~a~t,~ aP 05 ~c° sac ~ \~~`ac ~ ~~~~~ J Ja ~ .~~ Pcao ~ arc. '~ e~ p ~~a ~~~ 5 ~t~ .oa olc. ~~ho'~`~ `',~t~ t`c?~~` c~ Vasa ~pv ~J~~~y~Q ~ Jet. ~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 0 50,000 100,000 150,000 200,000 250,000 3W,VW ~~v,d00 Orange County In 2030 ... - OCBC Workforce Housing Scorecard 2007 Figure 5.1:2005- 2030 Population Growth by City Figure 5.2: OC Job Growth: 2005-2030 30,000 25,000 20,000 15,000 10,000 5,000 0 Figure 5.3: 2005-2030: OC Housing Projections by City 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 Forest Cypress Los Alamitos Irvine Orange Fullerton San Clemente Placentia Costa Mesa Tustin Villa Park Santa Ana Orange County 0.00 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 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. \<J`~tpr~`~(~5~~ 0~p~`P P~0 p~~o ~p~`N e~pl~ `~aP e~~~P ~tSP ~teP tole, ~`~~ ~Ct~ SQL p~~t~1 Pr a 5. Qi ~` ~ ~~~~ y ~ Q\p~ C. C ~ 5~o C~°'~ ~ ~ S• 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 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. As explained in the introduction, recent Census data show 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 people in five 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 Inland Empire (which constitutes Imperial, Riverside, and San Bernardino counties). The ) Inland Empire has a total population of about 4.2 million. Between 2000 and 2006, their population of 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 residents cannot be underestimated. Cities suffer losses in sales tax revenue and school districts lose critical apportionment funding. E~np/oye~s 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, Coiifornfa Counts Population Tirrxls and Profiles, Volume 8 Number 4 (May 200. ~~ We~forre Housing ~~~ 2007 Orange County In 2030 workers without homes to purchase, many will be forced to commute from outside the county, result- ing in increased commute times and traffic congestion. 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 afar-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. . • ~ Orsnpe County In 2030 OCBC Workforce Housing Scorecard 2007 will need to replace the baby boomers on their respective payrolls once they reach the age of retire- me nt. (~ 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. Figure 5.6: OC Employment Magnets (2005) +eo.ooo +oo.ooo uo.ooo uo,ooo +oo.ooo oo.ooo oo.ooo ~o,ooo so.ooo 0 Rertteis 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 • ^ v 1000 snd 10,000 more workers than jobs. le Thel 1 cities not listed constitute "the long tail and ha a between , OCBC Workforce Housing Scorecard 2007 Orenye Counter In 2030 Figure 5.5: OC Employment Magnets (2005) Irvine Orena• MevrPert eree Ceete AneNlm ~o• •+a~^~^ °^^'^ leech Y eea Alemlto• Hllle Am 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,20 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 S88 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 S351 per month in rent. A household earning 30 percent of the Orange County median family income (522,710) can only afford to pay 5568 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. Soclery 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 5145,680," 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 ahome 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. i9 The remaining seven cities either kept their same rental rate or saw a margins! decrease in rental occupancy (the highest decrease was 0.9 ~t~. . ° According to RealFscts. ii Based on an adjustable interest raft of 6.48 percent ... Orange County In 2030 OCBC Workforce Housing Scorecard 2007 tightening of credit in the mortgage sector. As such, rental occupancy has increased in 27 out of 34 Orange county cities." Figure 5.7: Income Needed to Afford Median Priced Home (5710,920) Compared to Typical Salaries Orange County, 2006 szoo,ooo s 1 so,00o S 160,000 S 140,000 S 120,000 S 100,000 180,000 560,000 540,000 520,000 SO OCBC Workforce Housing Scorecard 2007 Orenpe Courtly in 2030 Elementary School Teacher Nurse VI. 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.Z~ Or rf ~ E~ Business Cour~~c! 4 ~; ~ t~-r ~ x -- ~ . ~ - - ~. <~. ~~ Z ~, ~ ~; ;, t, v, ^I ~ _~-~ ' ,; - '. 9 f _ : ~ _ 1 ,Irvine 26 1 1 i 1 g 5 -`~ 2 Aliso Vie o 27 22 2 2 j --~ 3 Tustin 31 16 ~ 9 3 I 3 4 Lake Forest _ 33 ~ 10 7 ~ 11 5 _ 5 ___ 6 ;Newport Beach Huntington Beach _ - 36 - 42 9 g 5 _ 6 ~ - - ~ 13 15 ~ - 9 -- ~ 13 ~ 7 Mission Vito 42 1 1 $ ~ 9 1 _ 14 i 8 San Clemente 46 , 12 11 12 - 1 1 --~ 9 ~ Westminster 46 i 15 13 ~ n ~ a 10 !Lacuna Nicuel ast ~n , ~ - 11 + Placentia 53 ~ 13 17 19 4 ~ __ 12 Oran e _ 55 j 4 10 25 16 13 - 14 i Laguna Hills Anaheim 6~-~ ~ 26 40 24 -, 31 15 ;Rancho Santa Margarita 64 t 27 3 1 __ ; 33~ 16 Stanton 64 ~ 31 25 6 ? 17 'Fullerton 66 ~ 5 14 ~ 27 20 18 C ress 68 14 23 21 10 19 San uan Ca istrano 69 25 19 g 17 _20 Yorba Linda -- 69 -- 23 16 5 25 21 ;Garden Grove ~ 72 __22 j_SantaAna _-_ _ -_~ 72 3 15 36 23 23 ;Brea 74 --- -~ 9 --- ----21 -~. 16 .. 1 g' , 24 La Habra 81 28 24 14 ~ 15 25 ;Costa Mesa __ 82 6 » ~ an ,~ , _ z6 i Fountain valley ~ 88 17 26 23 22 27 i Dana Point 89 ~ 21 27 22 19 28 _i_Buena Park __ _____ --=----- - - " 28 27 __ 29 La Palma 107 ~ 34-- -- 30 _ -~- 17 --.~- ~-- 26 _ _ 30 ; _La una Beach __ ._:. _--~-- _ 110_ ----.__ .._-.___- -- 24 ~.- ---- 29 ------ T____.- _ 29 -,------ L 28 31 Sea Beach , 117 33 - 32 ___ 20 _ _ ___ 32 32 Los Alamitos 122 29 31 33 29 33 ~ Villa Park 127 ~ 32 33 32 30 34 i Laguna Woods _- 132 30 34 34 3a ~ Note that Laguna Woods has zero jobs in 1991. The city was incorporated in 1999. ' • ' Titre ~O~ OCBC Workforce Housing Scorecard 2007 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. OCBC Workforce Housing Scorecard 2007 T~ Scores ' The Orange County Business Council Workforce Housing Scorecard, 2005-2030 G7 a.anc .,..__. - -- --- 30 Rancho Santa Margarita 114 I 26 28 30 i 30_~ _ 31 'Seal Beach 1 14 20 29 ~ 32 33 32 Los Alamitos 116 33 30 26 27 33 Laguna Beach - -.-_--- 122___x__ 28 __ 32 ~- 31--- _- __31-- __ ;---- 34 ! La Palma _ 131 ___ 32 34 33 ~ 32 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 1 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 ~~ OCBC Workforce Flouring Scorecard 2007 The Orange County Business Council Workforce Housing Scorecard, Cumulative Assessing the State ofHnus/ng.ln YourUty _ --: Any understanding of the present must begin .with an examination of the ;past. The, historical content of your city is the most important element to understanding why things are as they are today. However, situating a city in its historical-context: is a daunting task. A contradictory scenario of information shortage and information overload leads to frustration at not being able to find sources and despair at there being just too much to know. Because of thi3, restricting the-imrestigation to those historical elements most ~eneficia4 Eo gaining-art undelr3tanding of~ housing proves #rultfuf~. -~ ; Pechaps the most Important of these elements is population change overt(me. After all, housing, only exists be~~ cause people do. No people, no housing, More important, fewer people, less housing and more, people m r.. housinC~, highlightt~~, o forecasting:' r_ ~. ,ends are employment the reglon.~e~pendent ~~ f~,t hou~~te~+s H ~~ --~ -re is pfastlc ate ~~ is median home i ng, landscape by F home -price pare r~ trends. Like!, the tvro are highly correlal on the relative ct>u6iuty of coi~nut, -til>~:;, -~ ~= ~ ~ se of housing to errlpl ~ '~~ n ,.~-~~ ~.~ ~~ than leavitn~ _ - _~~_~~ -. f~i>al~~ and .~ Y c ~~ng ~._ art ~w~11n9-Y sperfan~ r ~ ~ ~ tt v(11 Change with tjmE given ~~e~1~~ ter~d~ .~~,- ~~- ~~~~ r; re- - ~1 ce.As the Scorecard demonstrates median home priG!>ir} Orange ;ing out of the market people wha had previously (hied in Orange; ::. ted to popnla[i©n and employment trends disrusser~-above - The Scores ..• OCBC Workforce Housing Scorecard 2007 ank ~ I ~ _- ~~~' '~ t3 42 199#-2005. , --- - ---- . _ ... _. , -- -- -------_.~ _;x ~ ~ y.`' I ~ . ~ ~~ ~ ~, ~ to _ '" tea: ~ ~'~E~ c ~~ aw; ~ ~~ f-u x o= ~~_t'r3~ _ ~ - ~' a ~ t~ ` zoos: Zo3o~ ~'. ~ ~ ~~ a ~~`~ ~ o ~ c a- ° "' ~z"~ ~ f = ~.- ~€r 2 :Tustin _ 63 1 16 1! 18 6 9 3 3 1 2 1 ' 3 ~ 13 23 1 4 3 !New ort 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 87 8 6 15 i 13 4 7 19 15 6 r_Oran a _: ' 91 4 10 25 ~ , 16 11 6 8 11 _ 7 o i Aliso Vie 93 22 2 2 i 1 16 ~ 19 14 - 17 _ 8 ii-Placentia _ A a S ~ 97 _ 13 17 _19 4 25 10 ~ 4 S y n ! anta ; 104 3 15 i 31 i 23 8 5 10 _ 9 10 ~ Fullerton 108 5 14 ! 27 20 10 8 11 13 1 1 San Clemente 112 12 11 12 ~ 11 9 15 24 18 12 Stanton 115 31 25 6 2 30 14 ' 5 2 13 !Brea 117 19 21 1 16 18 12 12 ' 12 7 14 Yorba Linda 120 - 23 16 ! 5 25 31 9 ! 1 i 10 15 C ress ~ 1 Zg 14 23 i 21 i 10 6 ~ 18 29 8 __ 16 _j Costa Mesa _ 132 6 22 30 24 7 11 20 12 17 Westminster i 132 15 13 10 8 14 21 27 24 18 San uan Ca istrano 133 25 19 8 ' 17 ' 18 16 ~ 9 21 19 Garden Grove ! 134 7 18 ! 26 21 23 13 7 19 20 Lake Forest 135 10 7 ~ 11 5 3 31 34 34 21 I La uc~na Ni uel 137 20 _ 12 4 12 - 19 22 ! 22 26 _ 22 ( Mission VieJo 137 11 8 -t~ ~ 4 27 23 ~ 16 _ 29 __ 23 ! Fountain Valle~___ i 149 17 26 23 ~ 22 13 17 17 14 _ 24 Laguna Hills ___ __-~ 153 _26 20 7 7 _ -~- 17 _ 26 2 _ ~22 25 La Habra 171 28 24 15 22 24 -~ 21 23 26 Buena Park 174 18 28 ~ 28 27 15 20 18 20 27 Rancho Santa Mar arita ! 178 27 3 1 33 26 28 30 ~ 30 28 Dana Point 190 21 27 ~ 22 19 24 27 25 25 ,__29 _ 30 j Laguna Woods __ ___~_ Villa Park _ ~, 217 228 30 32 _ 34 I 34 Ii 34 33 ; 32 j 30 29~~~ 34 j 25 33 15 __~_ 6 16 28 31 ~ Seal Beach _ " 231 33 32 20 ~ 32 _ 20 -T 29 32 33 32 La una Beach 232 24 29 29 28 28 --'-- 32 -- 31 -- 31 _ 33 i 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. Y~ - Tike Stottis OCEIC Workforce Housing Scorecard 2007 __ Orange County_ Business Council Workforce Housin Scorecard Cumulative 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 ajob-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 Jl 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 asubstantial 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. OCf3C Workforce Housing Scorecard 2007 Tha Scores Orange County Business Council thanks its partners in developing this first-ever Housing Scorecard for Orange County. Corporate underwriting courtesy of: BankofAmerica ~.,~ Community Partners: ~ ~~ERK•gFCo UJ~ 9A _~ Communi ~C~UMTY C~`~ ~~ r' ORANGE COUNTY A~aewwnow a Nuu-aw a,ArO,Uwd -, ~r . ~ Orange County United Way APPENDIX E PRESERVATION ANALYSIS CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM JUNE 16, 2009 This page intentionally left blank. CITY OF TUSTIN HOUSING ELEMENT TECHNICAL MEMORANDUM JUNE 16, 2009 GAP ANALYSIS -OBLIGATION FOR 230 UNITS OBLIGATON DETERMINED PURSUANT TO GOVERNMENT CODE SECTION 65583.1c Housing Element Obligation for Vsry t,ow and Lora VL -1 brm VL - 2 brm Low - i Law - 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 categori es. Obligat ion for 230 units. Distribution of Affordable Units per Obligation TOTAL ~ VL - T brm ° YL - 2 brm Low . i Law • Z 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 Breattdi~m mf Affor~fa Unite At-Blair frost°lc±h 20i0 to 1~ne 201 (48 m~thsj TOTAL VL = i brat _ VL • 2 brm Lmw - i LoYt- ~! ' 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 Bo nd Financing/Tax Credit) Breakdown of Affordable Units At: Risk fre»n tune 2C"12 tti?ue~e 2Qi4 (~S montits~ IOTA! vl =1 brm VL - 2 brm Law -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 ' 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 Location of Property Sale Date Sale Price Sf Per Psf Yr Blt 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 49'o TAX CREDITS, TAX-EXEMPT BONDS 06/02/2005 TUSTIN GARDENS -100 units,10096 Affordatste, 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 6090 attributed to Land $ 62,492 40°'0 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) 3.309'0 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 99.9990 $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 ($832,246) $968,400 $136,154 $1,362 annual /unit $113 month /unit 48 months L7) s* * 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 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.