HomeMy WebLinkAbout12 TRUSTEE'S SALE - AFFORDABLE HOME LOCATED AT 370 FLYER'S LANEAgenda Item
12
Reviewed:
AGENDA REPORT
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City Manager
Finance Director
LTA
MEETING DATE: JANUARY 16, 2018
TO: JEFFREY C. PARKER, CITY MANAGER & HOUSING AUTHORITY
EXECUTIVE DIRECTOR
FROM: TUSTIN HOUSING AUTHORITY
SUBJECT: TRUSTEE'S SALE — AFFORDABLE HOME LOCATED AT 370
FLYERS LANE
SUMMARY
The Tustin Housing Authority ("Authority") is seeking authorization to cure a homeowner
default under the City's Affordable Housing Program in the Tustin Field I development.
RECOMMENDATION
It is recommended the Tustin Housing Authority Commission ("Commission") authorize
the Tustin Housing Authority to purchase the low income affordable housing unit at 370
Flyers Lane during the Trustee's Sale, and also authorize the Executive Director, or his
designee, execute any required documents, as may be necessary to implement such
action as recommended by the City Attorney. The price and terms will be discussed in
Closed Session.
FISCAL IMPACT
Adequate balances exist in the Low and Moderate
("Housing Asset Fund") to cure the homeowner default.
Authority will sell the home and the proceeds from the
the Housing Asset Fund.
CORRELATION TO THE STRATEGIC PLAN
Income Housing Asset Fund
After purchasing the home, the
sale will be deposited back into
Curing the homeowner default and preserving the Authority's affordable housing assets
contributes to Goal A of the City's Strategic Plan, enhancing the vibrancy and quality of
life in all neighborhoods and areas of the community.
Agenda Report
January 16, 2018
Page 2
BACKGROUND
A Notice of Default was recorded on October 18, 2017, for 370 Flyers Lane (Tustin Field
I development), a low income unit in the City's Affordable Housing Program. The Notice
was recorded as a result of the homeowner being in violation of the affordable housing
documents executed between the homeowner and the City. The Notice of Trustee's
Sale will be recorded within the next week and the sale will be scheduled for mid-
February. Without taking action at the Trustee's Sale, the City is at risk of losing the
affordable unit.
Pursuant to Health and Safety Code ("HSC") Sections 34176(c) and (d), the Tustin
Housing Authority may perform activities and use funds in accordance with applicable
housing -related provisions of the Community Redevelopment Law, including efforts to
increase, maintain and preserve the community's affordable housing supply. In the
effort to increase Tustin's supply of affordable housing, the City entered into a
Disposition and Development Agreement ("DDA") with the developer, WL Homes, LLC,
in March 2003 for the Tustin Field I development. The DDA required the developer to
provide 78 affordable units within the 376 -unit development, with the affordability
requirements secured by long term covenants for a 45 -year period.
In order to preserve the Authority's asset, it is necessary to purchase the unit prior to
losing the 45 -year affordability requirement and the value of the Authority's Promissory
Note through foreclosure. Upon purchase, the Authority will actively market the
property.
HSC Section 34176(d) created the Housing Asset Fund ("Fund") to provide
communities with a limited funding source for increasing, maintaining, and preserving
the affordable housing supply and there is an adequate fund balance in the Fund to
ensure the unit at 370 Flyers Lane remains an Authority asset. The costs associated
with the City exercising its option rights will be far less than the cost of acquiring and
replacing an affordable ownership unit.
Staff is recommending the Commission authorize purchasing the unit at the Trustee's
Sale and is available for any questions the Commission may have.
AohnBuchanan Jerry Craig
or of Economic Development Deputy Dir. ctolrc n ic Development
Tustin Housing Authority Tustin.., H sfeg Authority