HomeMy WebLinkAboutPH 1 HCDA 08-17-81DATE: August 17, 1981
Thru: Acting City Manager
PUBLIC HEARING (Continued)
No. 1
8-!7-81
Inter-Corn
TO:
Honorable Mayor and City Council
FROM:
Community Development
S UBJ ECT:
City of Tustin Participation with the County of Orange under the
Housing and Community Development Act (HCDA)
RECOMMENDATION
Take public input on projects desired under HCDA and authorize City
participation and submittal of an initial request for three year
funding.
BACKGROUND AND DISCUSSION
On August 3, 1981, a public hearing was held to take public input
on projects under HCDA. At that time Council Members expressed
fears of funding liability from the Federal Government. The HCDA
program does not require any matching funding from the City. All
projects that are approved by HUD are completely funded by HCDA
monies. When an application is submitted to HUD for approval, it
is either approved or disapproved as submitted. HUD does not amend
applications. There are federally funded programs and grants which
do require matching funds, however, there are no regulations to
that end under the HCDA.
The City even though not proposing any projects has been an on
going participant in the County HCDA program. The County has
merely applied the funds available to us to projects in other
jurisdictions. Orange County is the actual applicant with each
City requesting project funds from the County. City staff still
fills out and attests to progress reports under the HCDA program
based on the City's original active and current passive role.
Another area of concern was the Housing Assistance plan. The
City's Housing Element was approved by the State in conjunction
with the Housing Assistance Plan and was approved as sufficient.
The City to date has been fairly active in helping to provide
housing programs for low and moderate income persons.
The following are some of the programs we have dealt with either
directly or indirectly:
1. Tustin Gardens - 100 units for senior citizens (Section 8
program)
August 17, 1981
Page Two
2. City participation in the Orange County Housing Authority.
3. Former participation in HCDA program.
4. Orange Garden Apartments (236 Housing Program) for renters
assistance.
5. Ranch San Juan Conversion providing Co-ownership program (50%
of units for low and moderate income persons.
6. Warmington Condominium Project on southerly terminis of Newport
Avenue.
35% of units will be priced for persons with 80% to
120% of median income,
The foregoing list of projects indicates a more active program of
housing assistance than that provided by some communities already
active in HCDA. At any given point in time, if HUD promulgated
rules or regulations considered onerous by the Council; the option
to withdraw from HCDA would still remain open.
On August 6, 1981, the Community Development Advisory Board (CDAB)
held it's second meeting and discussed the housing rehabilitation
loan program with County staff. The County staff informed the CDAB
of how the day to d~ administration of a low interest housing
rehabilitation program would function. Under this rehabilitation
program the County would completely administer the program and thus
alleviate the necessity of hiring new City personnel.
MAC/dar
DATE:
AUGUST 12, 1981
! nter - C om
TO: THE HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
JAMES G. ROURKE, CITY ATTORNEY
FROM:
DANIEL K. SPRADLIN, DEPUTY CITY ATTORNEY
SUBJ£CI:PARTICIPATION UNDER THE HOUSING AND COMMUNITY
DEVELOPMENT ACT
Introduction
Generally speaking, participation under the Housing and Community
Development Act will require the City to engage in extensive
planning efforts to develop an overall program for the improvement
of living conditions for low income, elderly and handicapped
individuals and families. Particularly all of the funds available
under the Act are required to be utilized as to primarily benefit
individuals falling within these groups. In addition, the City
must commit a portion of other funds to such endeavors and will
be subject to annual reviews and/or audits by the federal govern-
ment to insure compliance with the Act and continued fulfillment~
of its objectives which the City is required to commit itself to
achieve as a precondition to receipt of any grant funds.
Discussion of the Act
The Housing and Community Development Act of 1974 consists of
several hundred pages. The Act has often been amended; the most
recent occurring in 1980. The regulations interpreting the various
provisions of the federal law consist of an additional several
hundred pages. The Act itself consists of eight titles, identified
as follows:
Title 1 - Community Development - appearing generally as 42 U.S.C.
Sections°5301, .et seq.
Title 2 - Housing Assistance and Related Programs - appearing
generally as 42 U.S.C. Sections 1437, et seq.
Title 3 - Federal Housing Administration, Mortgage Insurance and
Related Programs - appearing generally as 12 U.S.C. SeCtions 1715c-9,
et seq.
Title 4 - Lending Powers of Federal Savings and Loan Associations;
Secondary Market Authorities - appearing generally as 20 U.S.C. 801,
et seq.
Title 5 - Row Housing - appearing generally as 42 U.S.C. Sections
1490e, e~ seq.
Inter-Com to The Honorable Mayor and
Members of the City Council
Page Two
August 12, 1981
Title 6 - National Urban Policy - appearing generally as 42 U.S.C.
Sections'4501 et seq.
Title 7 - Flood and Riot Insurance - appearing generally as 12 U.S.C.
Sections~1464 et seq.
Title 8 - Community Reinvestment - appearing generally as 12 U.S.C.
Sections'1701j-2 et seq.
Title 9 - Miscellaneous - appearing in various Sections of the
United States Code.
Of most importance to the City of Tustin in considering partici-
pation in the Housing and Community Development Act are Titles ~
1, 2 and 6. Each of these Titles will be discussed separately.
A. Title 1 - Community Development
The purpose of Title 1 - Community Development as described in the
words of Congress is to'obviate blight, conserve and renew older
urban areas, improve the living of low and moderate income families
and to develop new centers of population growth and economic
activity. Under this Title, the federal government is authorized
to make grants for such purposes in fiscal 1981 not to exceed
$3,810,000,000; fiscal 1982 not to exceed $3,960,000,000; and
in fiscal 1983 not to exceed $4,110,000,000.
A very complex allocation formula is set forth in 42 U.S.C. Section
5306. Suffice it to say that there are a substantial amount of
funds available for utilization by local municipal governments
in the renovation of their cities provided the preconditions for
receipt of such funds are met.
Each applicant seeking funding is required to present an appli-
cation for a grant. No grant can be made without an applicati6n
containing certain required information. In summary, the appli-
cation for funds requires the following information:
(1) A summary of a three-year community development plan identi-
fying community developmeht and housing needs, demonstrating a
comprehensive strategy for meeting those needs, and which specifies
both short and long-term community development objectives "which
have been developed'in accordance with area-wide development
planning and national urban growth policies".
(2) The application must formulate a program which (a) meets
community development needs and objectives together with identi-
Inter-Com to The Honorable Mayor and
Members of the City Council
Page Three
August 12, 1981
lying estimated costs for improvements and the general location
of such facilities; (b) indicates resources' other than the grant
which will be made 'available to meet needs "including activities
designed to revitalize neighborhoods for the benefit of low and
moderate income persons"; (c) takes into account the affect of
improvements on involuntary displacement of low to moderate ~ncome-'-
persons together with accompanying environmental effects.
(3) The application must describe a program which (a) eliminates
slums or blight where such exists; (b) attempts to improve health,
social and community facilities and services where necessary and
insuring full participation of the handicapped; (c) attempts to
improve conditions for low or moderate income persons and elderly
persons residing or expecting to reside in the community.
(4) The application contains a housing assistance plan which
(a) accurately surveys the condition of housing stock in the
community, .the needs of low income, handicapped, elderly and large
families and identifies needed rehabilitation and improvements,
etc.; (b) specifies realistic annual growth for the number of
dwelling units or lower income persons to be assisted under the
program; (c) indicates general locations of proposed housing for
lower income persons.
(5) The application must also make satisfactory assurances of
compliance with civil rights laws.
Prior to submission of an application, .the City must have under-
taken preparation of a written citizen participation plan which-
will accommodate the views and proposals of citizens in the com-
munity, particularly those residing in blighted neighborhoods
and those individuals with low and moderate incomes. The plan
must include a methodology for providing citizens information
about the potential receipt of funds and the range of activities
contemplated by the municipality in the utilization of such funds.
The City must hold public hearings on the prospective application
and it must provide citizens with an opportunity to submit comments
as to the proposed application.
In reviewing the grant, there is a complex formula which the
federal government utilizes to determine compliance with the
objectives of the Act as evidenced by the application submitted
by the local governmental entity. In summary it can be said that
no grant.is issued .unless the local entity can certify that its
community development program has been developed so as to give
the maximum feasible priority to activities which will benefit
Inter-Com to The Honorable Mayor and
Members of the City Council
Page Four
August 12, 1981
low and moderate income families or aid in the prevention or
elimination of blight. The County of Orange has adopted the
position that all federal grant money must be used to benefit
those making 80% or less of the county median income of $24,600
or, in other words, the money must be used to benefit those making
less than $18,000 per year.
Funds received under the program can only be utilized for certain
specified purposes. In general, these activities include the
acquisition of land for low income housing, the clearance, demo-
lition, removal and rehabilitation of buildings and improvement§,
the provision of public services such as streets, curbs, gutters,
etc., improving public services concerned with employment, crime
prevention, child care, health, drug abuse, education or energy
conservation, or welfare or recreation needs, of persons residing
in blighted areas, relocation payments and assistance for displaced
individuals, and certain administrative expenses. A detailed
list under the federal regulations of permissible activities is
several pages long but most of the activities listed therein would
fit within the above categories. Again, each activity must be
designed as part of a comprehensive strategy for "giving primary
attention to activities benefiting low and moderate income persons
and neighborhoods".
In addition, Title 1 requires the City to adopt federal labor
standards and environmental review processes. Non-compliance
with any provision of the Act can result in a suspension of funding
and a civil action by the Attorney General.
B. Title 2 - Housing Assistance and Related Programs
Title 2 is principally a low income housing program which includes
subsidized rents and assistance in the purchase and acquisition
of low income housing projects. Programs implemented under Title
2 can be financed in substantial portion with federal funds but
the federal government can require conditions to be imposed in-
cluding CC & Rs to maintain the project as one which will continue
to benefit low income individuals primarily.
C. Title 6 - National Urban Policy
This title perhaps has less impact on the City of Tustin than
the previous two Titles in that it is designed primarily to
encourage the ~evelopment of community development programs to
Inter-Com to The Honorable Mayor and
Members of the City Council
Page Five
August 12, 1981
minimize disparities between developing communities. Under the
Title a new community development program means a program which
is intended to result in a neWly built community or major addition
to an existing community. Funding is available only if substantial
provision for low income housing is contained in the plan.
Conclusion
The remaining Titles under the Housing and Community Development
Act do not have a direct effect upon the City of Tustin in that
the municipal government would not be an active participant
necessarily. Such items as Title 3 relating to federal housing
administration, mortgage insurance and related programs are
primarily concerned with the impact upon financial institutions
rather than governmental entities.
The Act itself is extremely lengthy and complex. There are,
however, substantial monies available for utilization by govern-
mental entities to undertake activities encouraged by the Act.
In deciding to make a grant application, the Council should
recognize that it will, thereby, be making a substantial commitment
with both federal funds and local monies (which are required under
the Act) to programs which will primarily be of benefit for low
income, moderate income, elderly and handicapped individuals.
In addition, previous grant recipients under this Act have been
subject to litigation brought by low income minority residents
of adjacent areas on the grounds that they could be"expected
to reside" in the applicant city and that the goals contained
in the applicant city's application did not "adequately plan for
their needs". Accordingly, any application would have to consider
not only the existing housing situation and income status of
existing residents within the City of Tustin but also the potential
impact upon individuals who might be expected to reside in any
potential low income housing project in the City.
DKS:cs:D:08/07/81
DKS:cs:R:08/12/81
cc: CT
13:04
L
TO:
FROM:
S UBJ ECT:
Acting City Manager
Community Develpment Depart~nent
City of Tustin Participation with ~he County of Orange under the
Housing and Community Development. Act (HCDA)
RECOMMENDATION
Take public input on projects desired under HCDA and continue the
public hearing to August 17, 1981, (two hearing dates are
required). At the second hearing authorize City participation and
submittal of an initial request for three year funding. .~
BACKGROUND
The City initially took part in this-program and successfully
completed projects of neighborhood improvements on "B" Street and
California at the intersection of Third Street as well as the E1
Camino storm drains. The City Council decided to become an
inactive participant in the HCDA program provided the County
accomplish needed projects in those County islands surrounded by
the City. With that understanding, the City proposed no specific
projects for funding.
Under provisions of "MORGA" regarding island annexations, all but
one of such islands have now been brought under City jurisdiction.
Very little or no improvements were actually accomplished by the
County in the intervening time under HCDA, although some study and
planning did take place. It would appear appropriate that the City
now resume an active role under HCDA. Projects which might be
a9ailable for funding include:
· Neighborhood Public Improvements (paving, curb and gutter,
trees, lights, drainage facilities, etc.)
- "B" Street/Mitchell
- Walnut, San Juan and Orange; west of the high school
· Promote Affordable Housing Construction Programs
· Low Interest Housing Rehabilitation Loan Programs
· Commercial Rehabilitation Loan Programs
· Park Development-Columbus Tustin/Peppertree
· Economic Development-e.g. Parking Facilities
· Neighborhood Centers (Seniors)
· Eliminate Barriers to the Handicapped
City of Tustin Participation with the County of Orange Under the
Housing and Co,m,,unity Development Act (HCDA)
August 3, 1981
Page Two
The County has an extremely tight timeframe to which the City will
have to adhere. Our application must be submitted in September to
be eligible for the three year funding cycle. County EMA staff is
being as helpful as possible but the time constraints cause a
tremendous strain on producing specific construction project
specifications, plans and cost estimates for inclusion at this
time.
One suggestion which staff found plausible would be to plug the
City into an existing County program with a request for maximum
funding. This would get us "on the books" so to speak. The City
would then later amend the plan to reflect public input and
develop specific plans and specifications which may be done at
anytime. This would also allow time to analyze if existing
personnel could administer to a full City HCDA program. The'
ultimate HCDA program should also be designed to mesh with
Redevelopment Agency projects, budgets and personnel.
The exact amount which would be available' to the City is
indeterminate at the present time. A rough estimate might be
gleaned from the fact that the Tustin islands alone where proposed.
for budgets of $160,000 and $140,000 in 1980 and 81. We would
expect the City could generate $450,000-$500,000.00 or higher
during the next three years in HCDA funds.
INITIAL HCDA PROGRA~I RECOMMENDATION
After discussion with EMA staff and consideration of County
programs available, it is recommended that initially the City
Council propose participation with all available funds in the
Housing Rehabilitation Loan Program. This would allow maximum use
of County staff initially without necessity of the City hiring new
personnel.
Such a program would be oriented primarily, but not exclusively, to
senior citizen occupant/owners of homes to provide low interest
loans (down to 3%) for improvements and in qualified cases use of
"estate" or deferred payment loans. This' would have a double
benefit, especially in the original Tustin townsite residential
area of assisting seniors to upgrade their homes and rejuvenating
older structures of interesting quality to the community. This
program also would allow grants for correction of hazardous defects
of up to $1,000.00 including mobilehome owners.
City of Tustin Participation with the County of Orange
Under the Housing and Community Development Act (HCOA)
August 3, 1981
Page Three
The current County program is through Security Pacific National
Bank with HCDA funds used to write down the interest rate. This
creates a degree of leverage in that HCDA generates greater loan
funds than the amount set aside.
It would be clearly understood that such initial submittal would be
subject to amendment for inclusion of precise construction projects
after analysis of public input and coordination with Redevelopment
Agency activities. In addition, the City is required to have
citizen input via an advisory board into this project formulation
and submittal. Community Development contacted Isabelle McClements
of the Community Services Department regarding possible members and
coordination with the Senior Citizens Coordination Council. Using
the Subcommittee on Housing Outreach, a Co,~lunity Development
Advisory Board (CDAB in HCDA jargon) was constructed to advise the
Council on projects and this submittal. The members of the CDAB
include:
Janet SchwaFtz - Chairwoman
Nick Ogden
Ida Sternberg
Jesse Dungy
Fred Mesa
Martha Mueller
Tony Machado
On July 9, the Board held a preliminary meeting to discuss the
matters as related in this staff report and unanimously agreed to
recommend pursuit of HCDA participation on the basis suggested
herein. They will meet again on August 6, for discussion with
County staff of how the day to day administration of a low interest
housing rehabilitation program would function and have further
comment available for the August 17, 1981 Council meeting in this
regard.
MWB/dat