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HomeMy WebLinkAbout12 HSNG AFFORD STRAT 02-07-00AGENDA DATE: FEBRUARY 7, 2000 Inter-Com NO. 12 2-7-00 TO: FROM: SUBJECT: WILLIAM A. HUSTON, CITY MANAGER REDEVELOPMENT STAFF ADOPTION OF RESOLUTION NO. 00-9 APPROVING THE PROPOSED COMPREHENSIVE HOUSING AFFORDABILITY STRATEGY FOR FISCAL YEARS 2000-2001 TO 2009-2010_ SUMMARY: City Council approval is requested of Comprehensive Housing Affordability Strategy for fiscal years 2000-2001 to 2009-2010. RECOMMENDATION It is recommended the City Council adopt Resolution No. 00-9 approving the proposed Comprehensive Housing Affordability Strategy for fiscal years 2000-2001 to 2009-2010. FISCAL IMPACT The adoption of the proposed Comprehensive Housing Affordability Strategy will not have an immediate fiscal impact on the Redevelopment Agency. However, it does establish a ten-year strategy for the expenditure of approximately $27~715,150 in Community Development Block Grant (CDBG) CDBG/HOME funds, HUD Supportive Housing Program Funds, and South Central Project Area and Town Center Redevelopment Project Area tax increment housing set-aside funds. As the Strategy is implemented, each program and each year's budget expenditures will be required to be reviewed and approved by the Redevelopment Agency. BACKGROUND On November 1, 1993, the City by Resolution 93-111 and the Agency by Resolution No. RDA 93-15, approved a Comprehensive Housing Affordability Strategy for fiscal year 1993-1994 to 2003-2004. In September of 1999, the Tustin Community Redevelopment Agency initiated an update to the city-wide affordable housing strategy in light of the up-coming 5-year review and amendments required by current state law to the Housing element of the General Plan. Because of the particular level of tax increment housing set-aside funds available to the Redevelopment Agency over the next ten years, it was felt that the preparation and adoption of an updated ten-year strategy would ensure that the City's and the Agency's housing funds are used to best serve the needs of the community and its residents. William A. Huston February 7. 2000 Page 2 CONTENTS OF THE COMPREHENSIVE HOUSING AFFORDABILITY STRATEGY The Strategy is divided into six sections, dealing with all aspects of the Iow to moderate income housing needs of the community in terms of both Iow to moderate cost units as well as Iow to moderate income residents and households. The sections are divided as follows: SECTION I: SUMMARY OF AFFORDABLE HOUSING NEEDS This section analyzes the population and household characteristics in the City and inventories housing conditions. It identifies the current housing needs in terms of overpayment by households, overcrowding, rehabilitation of structures, and homelessness. It also identifies the special needs of the elderly, large families, single' parent households, the handicapped and military housing. Finally, it reviews future housing needs including the Regional Housing Needs Assessment, established by the Southern California Association of Governments (SCAG), the at-risk units in Tustin (those which are currently Iow to moderate income housing but which may be lost from that category in the future), and the waiting list for Section 8 rental subsidies. SECTION I1: AFFORDABILITY GAP ANALYSIS This section identifies and quantifies the gap between household income and the cost to purchase and/or rent housing in the City of Tustin. SECTION II1: AFFORDABLE HOUSING ASSISTANCE PROGRAMS Section III outlines and defines the income and rent limits of various affordable housing programs available to the City of Tustin. It describes the programs which are available to fund specific housing programs from the federal government, the state government, private lenders, nonprofit intermediaries, redevelopment tax increment and bonds. SECTION IV: AFFORDABLE HOUSING STRATEGY Section IV discusses the Criteria under which the specific programs are developed. It outlines the strategy in terms of geographic targeting, the targeting of financial resources, the definition of affordable housing expense, the term of affordability for units, the housing type and tenure (renter versus owner) and recommends a periodic review of the strategy. SECTION V: AFFORDABLE HOUSING PROGRAM ELEMENTS Section V deals with the elements of an overall affordable housing program. These elements consist of direct assistance to home owners, rental housing owners and renters, indirect assistance programs, the development of a housing compliance plan, as required by the Community Redevelopment Law, and discusses the Agency's obligations for replacement housing within the project areas. SECTION VI: HOUSING ASSISTANCE GOALS AND CAPITAL PLAN REQUIREMENTS Section VI identifies the financial resources available to the City of Tustin and the Redevelopment Agency over the next ten years, through Fiscal Year 2002/2010, outlines the specific goals of the Strategy, and recommends the timing and level of expenditures the City and Agency should provide for over the next ten years. William A. Huston February 7. 2000 Page 3 PROPOSED PROGRAMS, GOALS, SCHEDULING AND EXPENDITURES The following is a brief outline of specific programs proposed in the Comprehensive Housing Strategy, along with the funding source, proposed fiscal year start-up date, recommended ten year funding level and anticipated number of units and/or households to be assisted over the next ten years. More information on each of these programs is found in the Housing Affordability Strategy. . First Time Homebuyer Downpayment Assistance Second Mortgage Program This program would provide a Iow interest second mortgage loan for a portion of the downpayment needed by first time homebuyers not exceeding the 120% of median income level to finance their purchase. The second mortgage would be repaid when the home is sold. Funding Source: Housing Set-Aside Funds . First Time Homebuyer Mortgage Credit Certificate Proqram This is a program offered by the Federal Government which the City will offer to its residents in a cooperative program with the County and several other cities in Orange County. The Iow to moderate income, first time homebuyers receive a tax credit on their federal income tax that is equal to 20% of their annual mortgage interest payment. Funding Source: Federal Government Housing, Set-Aside Funds for administration of program only . · . Preservation of Tustin Gardens as Low to Moderate Income Housing This project is a 101 unit elderly apartment project developed under the HUD Section 221(d)(3) program. The developer is able to remove the rent restrictions in September 1995. As with Orange Gardens, the Strategy calls for the Agency to, if necessary, assist in maintaining the Iow to moderate rent structure of these units. Funding Source: Housin. g Set-Aside Funds Rehabilitation Loans and Grants for owner Occupied Units This program is to continue to assist homeowners in upgrading and renovating their homes as they require structural improvements. Funding Source: CDBG, HOME Housing Set-Aside Funds. o Rental Rehabilitation Loans and Grants This is a program to continue to assist the owners of rental housing with the rehabilitation of their buildings. Funding Source: CDBG, HOME, Housing Set-Aside Funds . 2-8 Unit Rehabilitation, Conversion and Resale This program calls for Agency assistance in the purchase of small 2 to 8 unit apartments in the City, their rehabilitation and conversion to condominiums or stock cooperatives. Units would be sold to Iow to moderate income home buyers. Funding Source: Housing Set-Aside Funds William A. Huston February' 7. 2000 Page 4 , 2-8 Unit Rehabilitation and Rental This program provides for Agency assistance to non-profit or for-profit developers in the purchase of small 2 to 8 units apartments in the City, their rehabilitation and rental at affordable rates. Funding Source: Housing Set-Aside Funds o New Construction of Owner Occupied Housing This program would provide a direct subsidy to reduce the costs to develop new single family homes, townhomes and condominiums in order to make them affordable to Iow to moderate income households. Funding Source: Housing Set-Aside Funds . New Construction and Substantial Rehabilitation of Rental Housing This program would provide subsidies for the construction of new senior rental housing units and the substantial rehabilitation of existing rental housing units, allowing for their occupancy by Iow to moderate income households. Funding Source: Housing Set-Aside Funds 10. Homeless Housinq Partnership Program This program would provide assistance for supportive housing and supportive services to help homeless individuals and families transition from homelessness to living as independently as possible. The program would include transitional housing to facilitate the movement of homeless persons to permanent housing within 24 months. Funding Source: HUD Supportive Housing Program Funds 11. Administrative Support for Housing Programs Both the CDBG funds and the Housing Set-Aside funds are proposed to be used to offset the City's and Agency's costs for implementing the proposed housing programs. The Housing Affordability Strategy provides for funding to pay for staff and consultant services directly involved in administering the various housing programs and providing services directly to the program participants. Funding Source: CDBG, HOME, Housing Set-Aside.Funds FINDING OF BENEFIT The California Community Redevelopment Law generally requires the Redevelopment Agency to spend the tax increment housing set-aside funds generated from each project area in that specific project area. Under the law, however, housing set-aside funds can be spent outside of the project areas if the City Council and the Redevelopment Agency find that the expenditure of these funds outside of the project areas is a benefit to the project areas. The State Legislature has determined that one of the primary objectives of redevelopment activities is to assist in the provision of Iow to moderate income housing in local communities. This is also an objective of the South Central and Town Center Redevelopment Plans. Within the City of Tustin, the South Central and Town Center Redevelopment Project Areas were formed primarily to assist in commercial and industrial redevelopment and for the installation of public infrastructure to serve commercial and industrial redevelopment. While each project area has some Iow to moderate income housing located within their boundaries, such housing in the William A. Huston February 7. 2000 Page 5 · City of Tustin is not limited to these project areas, but is dispersed throughout the community. In order to further the commercial and industrial development within the project areas, an adequate supply of decent, safe and sanitary Iow to moderate income housing is essential. To provide this supply, the Agency must consider the Iow to moderate income housing provided throughout the City, not just within the Project Areas. In order to maximize the benefit of the programs outlined in the City's Comprehensive Housing Affordability Strategy to serve redevelopment efforts within the South Central and Town Center Project Areas, the City Council and the Redevelopment Agency previously made a finding on November 1, 1993, that the expenditure of tax increment housing set-aside funds from the South Central Project Area and the Town Center Project Area to implement the Comprehensive Housing Affordability Strategy was a primary benefit to the project areas. CONCLUSION Staff will be at the City Council and Redevelopment Agency meetings of February 7, 2000 to answer any questions that may be raised. Christine A. Shingleton '/,/ Assistant City Manager "'~es A. Draughon (/ Senior Project Manager '-' ' ~'-- - RESOLUTION NO. 00-9 l0 12 13 18 2O 21 22 23 24 25 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, APPROVING THE COMPREHENSIVE AFFORDABLE HOUSING STRATEGY FOR FISCAL YEARS 2000-2001 TO 2009- 2010. The City Council of the City of Tustin does hereby resolve.as follows: WHEREAS, the Community Redevelopment Agency of the City of Tustin (the "Agency") has adopted a Redevelopment Plan (the "Redevelopment Plan") for the South Central Project Area and has also adopted a Redevelopment Plan for the Town Center Project Area; and WHEREAS, both Redevelopment Plans provide for the allocation of taxes from their respective Project Areas; WHEREAS, Section 33334.2 of the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq.) requires that not less than twenty percent (20%) of all taxes so allocated be used for the purpose of increasing, improving and preserving the community's supply of Iow and moderate income housing available at affordable housing cost; WHEREAS, Section 33334.2(g) of the Health and Safety Code provides that such funds may be used outside of a project area if a finding is made by. resolution of the Agency and the City Council that such use will be of benefit to the Project; WHEREAS, the Project Areas comprise only a limited portion of the Iow to moderate income housing supply in the City of Tustin and the overall Iow to moderate income housing supply is dispersed throughout the City; WHEREAS, the City by Resolution 93-111 and the Redevelopment Agency by Resolution RD A No. 93-15, on November 1, 1993, adopted a finding that the use of tax increment housing set-aside funds allocated from the South Central Project Area and from the Town Center Project Area for the purpose of increasing, improving and preserving the community's supply of Iow and moderate income housing outside the project Areas and within the City of Tustin will be of benefit to both the South Central and Town Center Redevelopment Project Areas. WHEREAS, City of Tustin Community Redevelopment Agency has adopted a Comprehensive Affordable Housing Strategy to assist in providing for the housing needs of Iow to moderate income households throughout the City; and l0 3.1 3_2 13¸ 1'7 18 20 21 22 23 24 25 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUSTIN DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS: Section 1' The Agency finds that the use of these funds continUes to be of primary benefit to both the South Central and Town Center Redevelopment Project Areas, and constitutes redevelopment activity. Section 2: The Comprehensive Affordability Strategy for fiscal years 2000- 2001 to 2009-2010 attached hereto as Exhibit "A" is hereby approved. Passed, apProved and adopted this 7th day of February, 2000. Tracy Wills Worley Mayor PAMELA STOKER City Clerk SEE REDEVELOPMENT AGENCY AGENDA ITEM NO. 3 FOR EXHIBIT A TO RESOLUTION NO. 00-9