HomeMy WebLinkAbout08 HOUSING SUCCESSOR ANNUAL REPORT FOR FISCAL YEAR 2023-2024Docusign Envelope ID: E3598871-OCDO-4005-BA09-6603E5FCB82A
MEETING DATE
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Agenda Item 8
AGENDA REPORT Reviewed: Initial
City Manager a`V�
Finance Director N/A
DECEMBER 3, 2024
ALDO E. SCHINDLER, CITY MANAGER
JERRY CRAIG, DEPUTY DIRECTOR OF ECONOMIC DEVELOPMENT
SUBJECT: HOUSING SUCCESSOR ANNUAL REPORT FOR FISCAL YEAR
2023-2024
SUMMARY:
In accordance with Senate Bill 341's amendments to Health & Safety Code Section
34176.1(f), the Tustin Housing Authority, serving as the Housing Successor to the former
Tustin Community Redevelopment Agency, has prepared an annual report for filing with
the Tustin Housing Authority Commission and the Tustin City Council.
RECOMMENDATION:
It is recommended the Tustin Housing Authority Commissioners take the following action:
1. Receive and file the Housing Successor Annual Report for Fiscal Year 2023-2024
and transmit such report to the Tustin City Council.
It is recommended the Tustin City Council take the following actions:
1. Receive and file the Housing Successor Annual Report for Fiscal Year 2023-2024.
2. Direct that a copy of the Housing Successor Annual Report be posted on the City of
Tustin's website at www.tustinca.org
FISCAL IMPACT:
There is no fiscal impact associated with this item.
CORRELATION TO THE STRATEGIC PLAN:
The Housing Successor Annual Report ("Annual Report") documents how the provision
of and management of Tustin's affordable rental and ownership housing and
homeless services contributes to the City's Strategic Plan Goal A: Economic and
Neighborhood
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City Council Agenda Report
Housing Successor
December 3, 2024
Page 2
Development, Strategy 15; Create affordable and workforce housing options and Strategy
16; Address homelessness.
BACKGROUND AND DISCUSSION:
On March 15, 2011, the City Council approved Resolution No. 11-20 establishing the
Tustin Housing Authority ("Housing Authority") in accordance with the California Housing
Authorities Law (CHAL). On April 19, 2011, the Housing Authority Commissioners
("Commissioners") adopted Resolution HA No. 11-01 approving the By -Laws for the
Housing Authority. On January 17, 2012, the Commissioners adopted Resolution HA No.
12-01, approving the assumption of housing assets and functions previously performed
by the former Tustin Community Redevelopment Agency ("Agency"). The Housing
Authority's assumption of assets and functions became effective February 1, 2012,
establishing the Housing Authority as the Housing Successor for the former Agency.
On October 13, 2013, Senate Bill ("SB") 341 was chaptered into law, amending HSC
Section 34176.1 to address particular provisions and functions related to the new housing
successor entities of former redevelopment agencies. SB 341 requires all housing
successor entities to file an annual report within six months after the end of each fiscal
year, starting with the Fiscal Year ending in 2014, and to provide an independent financial
audit to the legislative body, in this case the Tustin City Council. The purpose is to provide
the governing body of the housing successor an annual report on the housing assets and
activities of the housing successor under Part 1.85, Division 24 of the HSC, in particular
sections 34176 and 34176.1 ("Dissolution Law").
The Low and Moderate Income Housing Asset Fund ("LMIHAF") for Fiscal Year 2023-
2024 was audited as part the City's annual independent audit prepared by Davis Farr
LLP. The City's Fiscal Year 2023-2024 Annual Comprehensive Financial Report will be
presented to the City Council in February 2025, including the LMIHAF review. This
Annual Report is separate from the audit and conforms with and is organized into Sections
I. through XIII., inclusive, pursuant to Section 34176.1(f) of the Dissolution Law.
I. Amount Received Pursuant to Section 34191.4: This section provides a total
amount of funds received pursuant to Section 34191.4(b)(3)(A).
II. Amount Deposited into LMIHAF: This section provides the total amount of funds
deposited into the LMIHAF during the Fiscal Year. Any amounts deposited for
items listed on the Recognized Obligation Payment Schedule (ROPS) must be
distinguished from the other amounts deposited.
III. Ending Balance of LMIHAF: This section provides a statement of the fund
balance in the LMIHAF as of the close of the Fiscal Year. Any amounts deposited
for items listed on the ROPS must be distinguished from the other amounts
deposited.
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City Council Agenda Report
Housing Successor
December 3, 2024
Page 3
IV. Description of Expenditures from LMIHAF: This section provides a description
of the expenditures made from the LMIHAF during the Fiscal Year. The
expenditures are to be categorized.
V. Statutory Value of Assets Owned by Housing Successor: This section
provides the statutory value of real property owned by the Housing Successor, the
value of loans and grants receivables, and the sum of these two amounts.
VI. Description of Transfers: This section describes transfers, if any, to another
housing successor agency made in previous Fiscal Year(s), including whether the
funds are unencumbered and the status of projects, if any, for which the transferred
LMIHAF will be used. The sole purpose of the transfers must be for the
development of transit priority projects, permanent supportive housing, housing for
agricultural employees or special needs housing.
VII. Project Descriptions: This section describes any project for which the Housing
Successor receives or holds property tax revenue pursuant to the ROPS and the
status of that project.
Vill. Status of Compliance with Section 33334.16: This section provides a status
update on compliance with Section 33334.16 for interests in real property acquired
by the former redevelopment agency prior to February 1, 2012. For interests in
real property acquired on or after February 1, 2012, provide a status update on the
project.
IX. Description of Outstanding Obligations under Section 33413: This section
describes the outstanding inclusionary and replacement housing obligations, if
any, under Section 33413 that remained outstanding prior to dissolution of the
former redevelopment agency as of February 1, 2012, along with the Housing
Successor's progress in meeting those prior obligations, if any, of the former
redevelopment agency and how the Housing Successor plans to meet unmet
obligations, if any.
X. Extremely -Low Income Test: This section provides the information required by
Section 34176.1(a)(3)(B), or a description of expenditures by income restriction for
every five-year period, with the initial time period beginning January 1, 2014, and
ending June 30, 2019 and every five years hereafter, and whether the statutory
thresholds have been met.
XI. Senior Housing Test: This section provides the percentage of units of deed -
restricted rental housing restricted to seniors and assisted individually or jointly by
the Housing Successor, its former redevelopment Agency, and its host jurisdiction
within the previous 10 years in relation to the aggregate number of units of deed -
restricted rental housing assisted individually or jointly by the Housing Successor,
its former Redevelopment Agency and its host jurisdiction within the same time
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City Council Agenda Report
Housing Successor
December 3, 2024
Page 4
period. For this Report, the ten-year period reviewed is July 1, 2014 to June 30,
2024.
XII. Excess Surplus Test: This section provides the amount of excess surplus in the
LMIHAF, if any, and the length of time that the Housing Successor has had excess
surplus, and the Housing Successor's plan for eliminating the excess surplus.
XIII. Inventory of Homeownership Units: This section provides an inventory of
homeownership units assisted by the former redevelopment agency or the housing
successor that are subject to covenants or restrictions or to an adopted program
that protects the former redevelopment agency's investment of moneys from the
Low and Moderate Income Housing Fund pursuant to Section 33334.3(f).
Per the requirements of Senate Bill 341, once the City Council receives and files the
attached report, the report will be posted publicly on the City's website at
www.tustinca.org. The former redevelopment agency's Implementation Plans are
posted on the City's website.
DocuSigned by: DocuSigned by:
AW-Jerry raig Janine ernandez
Deputy Director of Economic Development Senior Management Assistant
Tustin Housing Authority Tustin Housing Authority
Attachment:
1. Housing Successor Annual Report for Fiscal Year 2023-2024
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HOUSING SUCCESSOR ANNUAL REPORT
REGARDING THE
LOW AND MODERATE INCOME HOUSING ASSET FUND
FOR FISCAL YEAR 2023-2024 PURSUANT TO
CALIFORNIA HEALTH AND SAFETY CODE SECTION 34176.1(f)
FOR THE
TUSTIN HOUSING AUTHORITY
This Housing Successor Annual Report (Report) regarding the Low and Moderate Income
Housing Asset Fund (LMIHAF) has been prepared pursuant to California Health and Safety Code
Section 34176.1(f) and is dated as of November 21, 2024. This Report sets forth certain details
of the Tustin Housing Authority (Housing Successor) activities during Fiscal Year 2023-2024
(Fiscal Year). The purpose of this Report is to provide the governing body of the Housing
Successor an annual report on the housing assets and activities of the Housing Successor under
Part 1.85, Division 24 of the California Health and Safety Code, in particular sections 34176 and
34176.1 (Dissolution Law).
The following Report is based upon information prepared by Housing Successor staff and
information contained within the independent financial audit of the City of Tustin's Low and
Moderate Income Housing Asset Fund for Fiscal Year 2023-2024 (Fiscal Year) as prepared by
Davis Farr LLP (Audit), which Audit is separate from this annual summary Report; further, this
Report conforms with and is organized into sections I. through XIII., inclusive, pursuant to Section
34176.1(f) of the Dissolution Law:
I. Amount Received Pursuant to Section 34191.4: This section provides a total amount
of funds received pursuant to Section 34191.4(b)(3)(A).
II. Amount Deposited into LMIHAF: This section provides the total amount of funds
deposited into the LMIHAF during the Fiscal Year. Any amounts deposited for items listed
on the Recognized Obligation Payment Schedule (ROPS) must be distinguished from the
other amounts deposited.
III. Ending Balance of LMIHAF: This section provides a statement of the fund balance in
the LMIHAF as of the close of the Fiscal Year. Any amounts deposited for items listed on
the ROPS must be distinguished from the other amounts deposited.
IV. Description of Expenditures from LMIHAF: This section provides a description of the
expenditures made from the LMIHAF during the Fiscal Year. The expenditures are to be
categorized.
V. Statutory Value of Assets Owned by Housing Successor: This section provides the
statutory value of real property owned by the Housing Successor, the value of loans and
grants receivables, and the sum of these two amounts.
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VI. Description of Transfers: This section describes transfers, if any, to another housing
successor agency made in previous Fiscal Year(s), including whether the funds are
unencumbered and the status of projects, if any, for which the transferred LMIHAF will be
used. The sole purpose of the transfers must be for the development of transit priority
projects, permanent supportive housing, housing for agricultural employees or special
needs housing.
VII. Project Descriptions: This section describes any project for which the Housing
Successor receives or holds property tax revenue pursuant to the ROPS and the status of
that project.
Vill. Status of Compliance with Section 33334.16: This section provides a status update on
compliance with Section 33334.16 for interests in real property acquired by the former
redevelopment agency prior to February 1, 2012. For interests in real property acquired
on or after February 1, 2012, provide a status update on the project.
IX. Description of Outstanding Obligations under Section 33413: This section describes
the outstanding inclusionary and replacement housing obligations, if any, under Section
33413 that remained outstanding prior to dissolution of the former redevelopment agency
as of February 1, 2012, along with the Housing Successor's progress in meeting those
prior obligations, if any, of the former redevelopment agency and how the Housing
Successor plans to meet unmet obligations, if any.
X. Extremely -Low Income Test: This section provides the information required by Section
34176.1(a)(3)(B), or a description of expenditures by income restriction for every five-year
period, with the initial time period beginning January 1, 2014, and ending June 30, 2019,
and whether the statutory thresholds have been met.
XI. Senior Housing Test: This section provides the percentage of units of deed -restricted
rental housing restricted to seniors and assisted individually or jointly by the Housing
Successor, its former Redevelopment Agency, and its host jurisdiction within the previous
10 years in relation to the aggregate number of units of deed -restricted rental housing
assisted individually or jointly by the Housing Successor, its former Redevelopment
Agency and its host jurisdiction within the same time period. For this Report, the ten-year
period reviewed is July 1, 2013, to June 30, 2023.
XII. Excess Surplus Test: This section provides the amount of excess surplus in the
LMIHAF, if any, and the length of time that the Housing Successor has had excess surplus,
and the Housing Successor's plan for eliminating the excess surplus.
XIII. Inventory of Homeownership Units: This section provides an inventory of
homeownership units assisted by the former redevelopment agency or the housing
successor that are subject to covenants or restrictions or to an adopted program that
protects the former redevelopment agency's investment of moneys from the Low and
Moderate Income Housing Fund pursuant to Section 33334.3(f).
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This Report is to be provided to the Housing Successor's governing body by December 31, 2023.
In addition, this Report and the former redevelopment agency's pre -dissolution Implementation
Plans are to be made available to the public on the City's website, www.tustinca.org.
AMOUNT RECEIVED PURSUANT TO SECTION 34191.4
The Housing Successor did not receive any funds pursuant to Section 34191.4(b)(3)(A).
II. AMOUNT DEPOSITED INTO LMIHAF
A total of $467,966 was deposited into the LMIHAF during the Fiscal Year. Of the total funds
deposited into the LMIHAF, $466,651 was transferred from the General Fund for the purpose of
purchasing and preserving an affordable unit in default.
III. ENDING BALANCE OF LMIHAF
At the close of the Fiscal Year, the ending fund balance in the LMIHAF was $558,495 of which
there are no funds held for items listed on the ROPS.
IV. DESCRIPTION OF EXPENDITURES FROM LMIHAF
The following is a description of expenditures from the LMIHAF by category:
Monitoring & Administration Expenditures
Fiscal Year
$274,143
Homeless Prevention and Rapid Rehousing
Services Expenditures
$0
Housing Development Expenditures
➢ Expenditures on Low Income Units
➢ Expenditures on Very -Low Income Units
➢ Expenditures on Extremely -Low Income Units
➢ Total Housing Development Expenditures
$0
Total LMIHAF Expenditures in Fiscal Year
$274,143
V. STATUTORY VALUE OF ASSETS OWNED BY HOUSING SUCCESSOR IN LMIHAF
Under the Dissolution Law and for purposes of this Report, the "statutory value of real property"
means the value of properties formerly held by the former redevelopment agency as listed on the
housing asset transfer schedule approved by the Department of Finance as listed in such
schedule under Section 34176(a)(2), the value of the properties transferred to the Housing
Successor pursuant to Section 34181(f), and the purchase price of property(ies) purchased by
the Housing Successor. Further, the value of loans and grants receivable is included in these
reported assets held in the LMIHAF.
The following provides the statutory value of assets owned by the Housing Successor:
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Statutory Value of Real Property Owned by Housing Authority
As of • of
Fiscal Year
N/A
Value of Loans and Grants Receivable
- Multifamily Loans
$362,840
- Affordable Housing Promissory Notes
$92,478,647
• Promissory Note Allowance (Forgivable amount)
($77,889,805)
Total Value of Housing Successor Assets
$14,951,682
Affordable Housing Promissory Notes: The City has executed Promissory Notes (Note) with 279
affordable home buyers to facilitate the preservation of the City's affordable housing supply. The
amount due 46 years from the date of the initial sale of the Unit (execution of the original Affordable
Housing Covenant) considers the current Note amount and the simple interest accrued annually
from the current Note in the calculation. No prepayment of the Note in whole, or in part, is allowed
any time prior to the maturity date. Additionally, the balance of the Note is forgivable as of the
maturity date, assuming the owner is in compliance with the Affordable Housing Covenant. As of
June 30, 2024, the total outstanding principal balance of the 279 Notes was $92,478,647.
VI. DESCRIPTION OF TRANSFERS
The Housing Successor did not make any LMIHAF transfers to other Housing Successor(s)
under Section 34176.1(c)(2) during the Fiscal Year.
VII. PROJECT DESCRIPTIONS
The Housing Successor does not receive or hold property tax revenue pursuant to the ROPS.
Vill. STATUS OF COMPLIANCE WITH SECTION 33334.16
Section 34176.1 provides that Section 33334.16 does not apply to interests in real property
acquired by the Housing Successor on or after February 1, 2012; however, this Report presents
a status update on the project related to such real property.
With respect to interests in real property acquired by the former redevelopment agency prior to
February 1, 2012, the time periods described in Section 33334.16 shall be deemed to have
commenced on the date that the Department of Finance approved the property as a housing asset
in the LMIHAF; thus, as to real property acquired by the former redevelopment agency now held
by the Housing Successor in the LMIHAF, the Housing Successor must initiate activities
consistent with the development of the real property for the purpose for which it was acquired
within five years of the date the DOF approved such property as a housing asset.
The following provides a status update on the real property or properties housing asset(s) that
were acquired prior to February 1, 2012, and compliance with five-year period:
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14554 Newport
Avenue, #3, Tustin
(Moderate Income
Unit)
5/26/2011
M
Sold to Moderate
Income Family,
12/2/2013
The following provides a status update on the project(s) for property or properties that have been
acquired by the Housing Successor using LMIHAF on or after February 1, 2012:
Address of Property
Date of Acquisition
Deadline to Initiate
Status of Housing
Development
14542 Newport
8/9/2013
N/A
On June 7, 2016, the
Avenue, #3, Tustin
Housing Authority
(Moderate Income
Commission
Unit)
authorized the sale at
market rate. In FY
2016-2017, the sale of
the unit resulted in
proceeds of $435,106
for the LMIHAF.
27 Look Out Lane,
11/24/2015
N/A
On June 7, 2016, the
Tustin (Low Income
Housing Authority
Unit)
Commission
authorized the sale at
market rate. In FY
2016-2017, the sale of
the unit resulted in
proceeds of $452,677
for the LMIHAF.
1345 Sun Dial Drive,
08/10/2017
N/A
On September 19,
Tustin (Very Low
2017, the Housing
Income Unit)
Authority Commission
authorized the sale at
market rate. In FY
2017-2018, the sale of
the unit resulted in
proceeds of $569,886
for the LMIHAF.
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370 Flyers Lane,
02/14/2018
N/A
On March 7, 2018, the
Tustin (Low Income
Housing Authority
Unit)
Commission
authorized the sale at
market rate.
In FY 2018-2019, the
sale of the unit
resulted in proceeds
of $487,806 for the
LMIHAF.
IX. DESCRIPTION OF OUTSTANDING OBLIGATIONS PURSUANT TO SECTION 33413
Replacement Housing: According to the Fourth Five -Year Implementation Plan for the Town
Center and South Central Redevelopment Project Areas (FY 2010-2011 to FY 2014-2015) and the
Second Five -Year Implementation Plan for the MCAS Tustin Redevelopment Project Area (FY
2008-2009 to FY 2012-2013) for the former redevelopment agency, no Section 33413(a)
replacement housing obligations were transferred to the Housing Successor. The former
redevelopment agency's Implementation Plans are posted on the City's website at
www.tustinca.org, under Successor Agency.
There are no replacement housing obligations.
Inclusionary/Production Housing. According to the Fourth Five -Year Implementation Plan for
the Town Center and South Central Redevelopment Project Areas (FY 2010-2011 to FY 2014-
2015) and the Second Five -Year Implementation Plan for the MCAS Tustin Redevelopment
Project Area (FY 2008-2009 to FY 2012-2013) for the former redevelopment agency, no Section
33413(b) inclusionary/production housing obligations were transferred to the Housing Successor.
The former redevelopment agency's Implementation Plans are posted on the City's website at
www.tustinca.org, under Successor Agency.
There are no inclusionary housing obligations.
X. EXTREMELY -LOW INCOME TEST
Section 34176.1(a)(3)(A) requires that the Housing Successor expend at least 30% of the
LMIHAF used for affordable housing development on rental housing affordable to and occupied
by households earning 30% or less of the AMI. If the Housing Successor fails to comply with the
Extremely -Low Income requirement in any five-year report, then the Housing Successor must
ensure that at least 50% of the funds remaining in the LMIHAF be expended in each fiscal year
following the latest fiscal year following the report on households earning 30% or less of the AMI
until the Housing Successor demonstrates compliance with the Extremely -Low Income
requirement. The first 5-year period the Housing Successor was required to report compliance
with Section 34176.1(a)(3)(A) was 2014-2019 and every five years hereafter.
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The Housing Successor only utilized funds for administration and monitoring of housing
units subject to affordable housing agreements. There were no funds expended for the
development of rental housing during FY 2023-2024. The Housing Successor was in
compliance with Section 34176.1(a)(3)(A) for the first 5-year reporting period, 2014-2019,
and remains in compliance in FY 2023-2024.
XI. SENIOR HOUSING TEST
The Housing Successor is to calculate the percentage of units of deed -restricted rental housing
restricted to seniors and assisted by the Housing Successor, the former redevelopment agency
and/or the City within the previous 10 years in relation to the aggregate number of units of deed -
restricted rental housing assisted by the Housing Successor, the former redevelopment agency
and/or City within the same time period. If this percentage exceeds 50%, then the Housing
Successor cannot expend future funds in the LMIHAF to assist additional senior housing units
until the Housing Successor or City assists and construction has commenced on a number of
restricted rental units that is equal to 50% of the total amount of deed -restricted rental units.
The following provides the Housing Successor's Senior Housing Test for the 10-year period of
July 1, 2014 to June 30, 2024:
Senior Housing Test
# of Assisted Senior Rental Units
July 1, 2014 to June 30, 2024
0
# of Total Assisted Rental Units
262
Amalfi
37
Anton Legacy
225
Senior Housing Percentage
0%
XII. EXCESS SURPLUS TEST
Excess Surplus is defined in Section 34176.1(d) as an unencumbered amount in the account that
exceeds the greater of one million dollars ($1,000,000) or the aggregate amount deposited into the
account during the Housing Successor's preceding four Fiscal Years, whichever is greater.
The following provides the Excess Surplus test for the preceding four Fiscal Years:
Year
FY i
i i2023124
Beginning
$1,867,400.05
$1,203,129.83 $718,343.75
$294,125.44
Balance
Add: Deposits
$66,156.87
$27,973.51
$37,132.25
$481,188.20
(Less)
($730,427.09)
($512,759.59)
($461,350.56)
($749,796.81)
Expenditures
Ending Cash
$1,203,129.83
$718,343.75
$294,125.44
$25,516.83
Balance
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(NOTE: The Deposits & Expenditures information in this Section XII is prepared using the cash
basis of accounting. They differ from the Deposits & Expenditures information in Sections II,
III, & IV, which is prepared using the modified accrual basis of accounting.)
Given that the Housing Successor has 31 years remaining of monitoring our 279 housing units,
46 years of monitoring our 415 affordable rental units, and there is no other funding source for
monitoring and administrative expenses, the balance of funds is encumbered and there is no
Excess Surplus.
XIII. INVENTORY OF HOMEOWNERSHIP UNITS
(A) Based on reporting requirements as of June 30, 2024, our inventory of homeownership
units is 279.
(B) Since February 1, 2012, the number of units lost to the portfolio is thirty: one first time
homebuyer loan paid off on an affordable unit; two rehabilitation loans paid off on single
family units; one rehabilitation loan on a single-family unit lost to foreclosure; five single
family units lost to foreclosure; and twenty-one units lost due to expiration of affordable
housing covenants.
(C) There were no payments received in Fiscal Year 2023-2024.
(D) The Housing Successor does not contract with an outside entity to manage our units.
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