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HomeMy WebLinkAboutRPT 3 HSNG AFFORD 11-01-93 GENDA REPORTS NO. 3 11-1-93 Inter-Gore DATE: NOVEMBER 1, 1993 TO: WILLIAM A. HUSTON FROM: COMMUNITY DEVELOPMENT DEPARTMENT SUBJECT: COMPREHENSIVE HOUSIN~ AFFORDABILITY STRATEGY RECOMMENDATION ae Be It is recommended the City Council adopt Resolution No. 93-111 finding that the use of tax increment housing set-aside funds from the South Central Project Area and from the Town Center Project Area to implement the Comprehensive Affordable Housing Strategy outside of the project areas within the City of Tustin will be of benefit to both project areas. It is recommended the Redevelopment Agency: ® Approve the proposed Comprehensive Housing Affordability Strategy by minute action; and · Adopt Resolution No. RDA 93-15 finding that the use of tax increment housing set-aside funds from the South Central Project Area and from the Town Center Project Area to implement the Comprehensive Affordable Housing Strategy outside of the project areas within the City of Tustin will be of benefit to both project areas. 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 $22,193,000 in Community Development Block Grant (CDBG), CDBG/H~MEfunds and South Central Project Area and Town Center 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 In March of 1992, the Tustin Community Redevelopment Agency approved-.a consultant services agreement with the firm of David Paul Rosen and Associates for the preparation of a ten year housing set-aside program for the South Central and Town Center project City Council Report Comprehensive Housing Affordability Strategy November 1, 1993 Page 2 Areas and a city-wide affordable housing strategy. 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 a 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. Recent revisions of State Redevelopment Law also require all agencies to adopt such a plan as soon as possible. Over the last eighteen months, the Redevelopment Agency has had numerous workshops with the staff and consultants. All the necessary information has been gathered and compiled for the strategy,, proposed program alternatives, have been studied and 'expected· funding leve~s.'have been determined, · September 20, 1993, the Redevelopment Agency. reviewed the final draft of the Comprehensive Housing Affordability Strategy in a workshop, and instructed Agency staff to agendize the final strategy for adoption by the Agency. CONTENTS OF THE COMPREHENSIVE HOUSING AFFORDABILITY STRATEGY The Strategy is divided into seven sections, dealing with all aspects of the low to moderate income housing needs of the community in terms of both low to moderate cost units as well as low to moderate income resident and households. The sections are divided as follows: SECTION I: SUMMARY OF AFFORDABLE HOUSING NEEDS This section analyzes ~ne 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, homelessness. It also identifies the special needs of the elderly, large families, single parent households, the handicapped and military housing. Finally, 3it reviews the 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.low to moderate income housing but which may be lost from that category in the future), the impact of the East Tustin Specific Plan and the City Council Report Comprehensive Housing Affordability Strateg~ November 1, 1993 Page 3 waiting list for Section 8 rental subsidies. SECTION II: 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 III: 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: SUMMARY OF'FINANCIAL RESOURCES This section identifies the financial resources available to the City of Tustin and the Redevelopment Agency over the next ten years, through Fiscal Year 2002/2003. It identifies the following anticipated cumulative financial resources: CDBG Funds HOME Program South Central Housing Set-Aside Fund Town Center Housing Set-Aside Fund TOTAL $ 1,922,000 1,090,000 6,561,000 10,269,000 $19,842,000 SECTION V: AFFORDABLE HOUSING STRATEGy Section V 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 VI'.~ AFFORDABLE HOUSING PROGRAM ELEMENTS "Section Vt 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 City Council Report Comprehensive Housing Affordability Strategy November 1, 1993 Page 4 within the project areas· SECTION VII: HOUSING ASSISTANCE GOALS AND CAPITAL PLAN REQUIREMENTS Section VII is the section of the plan which 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. PROPOSED PRO~RAMS, 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. I · Rehabilitation Loans and Grants for Owner Occupied UnitS This program is to assist homeowners in upgrading and renovating their homes a~ they require structural improvements. Funding Source: CDBG, HOME Housing Set- Aside Funds · Rental Rehabilitation Loans and Grants This is a program to assist the owners of rental housing with the rehabilitation of their buildings. Funding Source: CDBG,. HOME, Housing Set- Aside Funds · First Time Homebuyer Mortqaqe 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 low to moderate income, first..time homebuyers ~eceiv~ a tax ~redi~ 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 City Council Report Comprehensive Housing Affordability Strategy November 1, 1993 Page 5 · · ® · First Time Homebuyer Downpayment Assistance Program This program would provide a portion of the downpayment needed by first time homebuyers to finance their purchase. Funding Source: Housing Set-Aside Funds First Time Homebuyer Second Mortgage Program This program would provide a "Soft" second to first time homebuyers to reduce the amount needed to be financed through conventional mortgages. The second mortgage would be repaid when the home is sold. Funding Source: Housing S'et-Aside Funds New Construction of Owner Occupied Townhomes This program would provide a direct subsidy to reduce the costs to develop new townhomes and condominiums in order to make them affordable to low 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 rental housing units and the substantial rehabilitation of existing rental housing units, allowing for their occupancy by low to moderate income households. Funding Source: Housing Set-Aside Funds Emergency Rental Assistance Loans This program would provide for emergency rental payments for tenants who face eviction for unforeseen financial problems, such as the loss of a job. Funding Source: Housing Set-Aside Funds Emergency Mortgage Loans This program would provide for emergency mortgage payments to be made by homeowners who face foreclosure due to an unforeseen financial problem. Funding Source: Housing Set-Aside Funds City Council Report Comprehensive Housing Afford&bilit¥ Strateg~ November 1, 1993 Page 6 10. Financial Assistance Towards the Renovation of the Cosmopolitan Apartments The Cosmopolitan Apartments on Newport Avenue had been were allowed to deteriorate into slum conditions by previous owners. The Resolution Trust Corporation had taken it over and have recently selected a developer to renovate the complex. These funds are to assist in this renovation. Funding Source: Housing Set-Aside Funds 11. Preservation of Oranqe Gardens as Low to Moderate Income Housinq Orange Gardens is a 160 unit low to moderate income complex whiCh was developed in the 1970's with funding ~. under the HUD' Section~ 236.program® Under. this program, the deveioper3can' pay-°ff.'the existing' federal, loan'as early as May, 1994, and all rent restrictions end. The Housing Strategy proposes that the Agency. help maintain the low to moderate income affordability of these units. Funding Source: Housing Set-Aside Funds 12. Preservation of Tustin Gardens as Low to Moderate Income Housinq Similar to Orange Gardens, 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 assisting in maintaining the low to moderate rent structure of these units. .. Funding Source: Housing Set-Aside Funds 13. 2-4 Unit Rehabilitation and Resale This program calls for Agency assistance in the purchase of duplexes, tri-plexes and four-plexes in the city, their rehabilitation and conversion to condominiums or stock cooperatives. Units would be sold to low to moderate income home buyers. Funding Source:. H0using.Set-A~ide Funds .o · . 14. 2-4 Unit Rehabilitation and Rental This program provides for Agency assistance to non-profit or for-profit developers in the purchase duplexes, tri- City Council Report Comprehensive Housing Affordability Strategy November 1v 1993 Page ? plexes and four-plexes in the City, their rehabilitation and rental at affordable rates. Funding Source: Housing Set-Aside Funds 15. Administrative Support for Housinq 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 City Council and the Redevelopment Agency have twice made this finding. The first time was in connection with the residential rehabilitation loan and grant program. Most recently, on August 16, 1993, the Council and Agency made the finding in conjunction with approving the Mortgage Credit Certificate Program. The State Legislature has determined that one of the primary objectives of redevelopment activities is to assist in the provision of low 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 inf.rastructure to '~erve commercial and industrial redevelopment. While each project area has some low to. moderate income housing located within their boundaries, such housing in the City of Tustin is not limited to these project areas, but is dispersed throughout the community. In order to City Council Report Comprehensive Housing Affordability Strateg~ November 1, 1993 Page 8 further the commercial and industrial development within the project areas, an adequate supply of decent, safe and sanitary low to moderate income housing is essential. To provide this supply, the Agency must consider the low 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 this Comprehensive Housing Affordability Strategy to serve the redevelopment efforts within the South Central and Town Center Project Areas, the staff is recommending the City Council and the Redevelopment Agency find that the expenditure of tax increment housing set-aside funds from theSouth Central Project Area and the Town Center Project Area to implement the Comprehensive Housing Affordability Strategy is a primary benefit to the project areas. CONCLUSION The Staff Consultant will be at the City Council and Redevelopment Agency meetings of October 19, may be raised. 1993 t~o.~nswer any questions which ,deve~~ Program Manager r zimmer \rdahou s · mem-- 1 2 4 $ 6 ? 9 10 11 13 14 15 16 17 19 20 22 23 28 RESOLUTION NO. 93-111 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TUSTIN, CALIFORNIA, 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 IMPLEMENTATION OF THE CITY OF TUSTIN COMPREHENSIVE AFFORDABLE HOUSING STRATEGY OUTSIDE THE PROJECT AREAS WITHIN THE CITY OF TUSTIN WILL BE OF PRIMARY BENEFIT TO BOTH PROJECT AREAS 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; and 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 low and moderate 'income housing available at affordable housing cost; and 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; and WHEREAS, the Project Areas comprise only a limited portion of the low to moderate income housing Supply in the City of Tustin and the overall low to moderate income housing supply is dispersed throughout the City; and WHEREAS, City of Tustin Community Redevelopment Agency has adopted a Comprehensive Affordable Housing Strategy to assist in providing for the housing needs of low to moderate income households throughout the City; and WHEREAS, the use of tax increment funds for implementation of the Comprehensive Affordable Housing Strategy outside of the Project Area will directly 1 2 3 4 5 6 7 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26~ 27 28 Resolution No. 93-111 Page 2 promote the increase, improvement and preservation of the community's, supply of low to moderate income housing available 'at affordable prices both inside and outside the South Central and Town Center Project Areas. NOW, THEREFORE, the City Council of the City of Tustin does hereby find and resolve as follows: Section 1: The City Council herebY finds 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 low and moderate income housing available at affordable housing cost outside the Project Areas and within the City of Tustin will be of benefit to both the South central and Town Center Project Areas. Specific procedural and policy guidelines contained in the Tustin Community Redevelopment Agency's Comprehensive Hgusing Affordability Strategy, subject to specific modification by the Redevelopment Agency Board, shall be utilized in the allocation and appropriation Of Town Center project Area funds and South Central Project Area funds to specific programs for increasing, improving and preserving the community's supply of low to moderate income housing. Section 2: The City Council finds that the use of these funds is of primary benefit to both the South Central and Town Center Project Areas, and constitutes redevelopment activity as described in Sections 33020 and 33021 of the Health and Safety Code. Jim Potts Mayor Mary E. Wynn City Clerk