HomeMy WebLinkAbout11 AUTHORIZATION TO SELL TUSTIN HOUSING AUTHORITY-OWNED AFFORABLE HOMES AT 14542 NEWPORT AVENUE #3 AND 27 LOOK OUT LANE AT MARKET RATE Agenda Item 1 1
Reviewed:
AGENDA REPORT City Manager
Finance Director
MEETING DATE: JUNE 7, 2016
TO: JEFFREY C. PARKER, HOUSING AUTHORITY EXECUTIVE DIRECTOR
FROM: TUSTIN HOUSING AUTHORITY
SUBJECT: AUTHORIZATION TO SELL TUSTIN HOUSING AUTHORITY-
OWNED AFFORDABLE HOMES AT 14542 NEWPORT AVENUE
#3 AND 27 LOOK OUT LANE AT MARKET RATE
SUMMARY
The Tustin Housing Authority ("Authority") is seeking authorization to sell two (2)
Authority-owned affordable homes at 14542 Newport Avenue #3 and 27 Look Out Lane
at market rate.
RECOMMENDATION
It is recommended the Tustin Housing Authority Commission:
1) Authorize the sale of the Authority-owned affordable moderate income home at
14542 Newport Avenue #3, located in the Arbor Walk development, and the
Authority-owned affordable low income home at 27 Look Out Lane, located in the
Tustin Field I development, at market rate prices; and
2) Authorize the Housing Authority Executive Director to negotiate a sales price at the
market rate; and
3 Direct the Housing Authority Executive Director to schedule Closed Session
Meetings when prospective purchasers are identified in order to receive
Commission approval for each negotiated sale.
FISCAL IMPACT
The Tustin Housing Authority utilized Low and Moderate Income Housing Asset Funds
("LMIHAF") to purchase 14542 Newport Avenue #3, an affordable moderate income
home at-risk of foreclosure, for $354,927 and 27 Look Out Lane, an affordable low
income home in foreclosure, for $127,157. The Tustin Housing Authority is seeking to
recover these funds through the sale of the units at market rate and deposit the
proceeds into the LMIHAF.
Agenda Report
June 7, 2016
Page 2
BACKGROUND
On April 16, 2013, the Tustin Housing Authority Commission ("Commission") authorized
the Authority to purchase 14542 Newport Avenue #3, in order to cure an affordable
moderate income homeowner's default. The Agency closed escrow on the purchase on
August 13, 2013. On November 3, 2015, the Commission authorized the Authority to
purchase 27 Look Out Lane during the Trustee's Sale. The Agency purchased the
home at the Trustee's Sale on November 9, 2015.
The Authority is proposing to convert the two affordable units to market rate units and
sell the units as such. The City Attorney's Office and Special Counsel to the Authority
have confirmed the Commission has the authority under Health and Safety Code
("HSC") Section 33334.3(f)(B) to sell the units in excess of the otherwise permitted
affordable price as long as the funds are deposited into the LMIHAF and spent in
accordance with HSC Section 34176.1.
Under HSC Section 34176.1, the first priority of the LMIHAF is to monitor and preserve
the long-term affordability of units subject to affordability covenants, of which there will
be 286 affordable ownership units in Tustin after the recommended action removes two
units from the Authority's inventory. Since there is no other funding source to
supplement the LMIHAF, the proceeds from the market rate sale of these units will
increase the current LMIHAF balance of approximately $950,000 and insure continued
funding for these activities. As a result, staff is recommending the Commission approve
the market rate sale of these units for the purpose of increasing the LMIHAF and
providing operational funds for an additional three to four years before funds are
exhausted.
When a prospective purchaser is identified for each unit, Closed Session meetings will
be scheduled to discuss and receive approval for each negotiated sales price. Staff is
available for any questions the Commission may have.
Jerry Craig
Economic Development & Housing Manager
Tustin Housing Authority