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Home My WebLink About09 HOUSING SUCCESSOR ANNUAL REPORT FOR FISCAL YEAR 2024-2025Docusign Envelope ID: ABFD2DF1-CC9B-4C45-9BOF-8DO186BOCAC1 MEETING DATE TO: FROM: SUBJECT: SUMMARY: Agenda Item 9 AGENDA REPORT Reviewed: Initial City Manager QS Finance Director N/A DECEMBER 16, 2025 ALDO E. SCHINDLER, CITY MANAGER ALEXA SMITTLE, DIRECTOR OF COMMUNITY DEVELOPMENT HOUSING SUCCESSOR ANNUAL REPORT FOR FISCAL YEAR 2024-2025 In accordance with Health & Safety Code Section 34176.1(f), the Tustin Housing Authority, as the Housing Successor to the former Tustin Community Redevelopment Agency, has prepared an annual report for filing with the Tustin Housing Authority and the Tustin City Council. RECOMMENDATION: The Tustin Housing Authority Commissioners take the following actions: 1. Receive and file the Housing Successor Annual Report for Fiscal Year 2024-2025 and transmit such report to the Tustin City Council. The City Council take the following actions: 1. Receive and file the Housing Successor's Annual Report for Fiscal Year 2024-2025. 2. Direct a copy of the Housing Successor Annual Report be posted on the City of Tustin's website at www.tustinca.ora FISCAL IMPACT: There is no fiscal impact associated with this item. CORRELATION TO THE STRATEGIC PLAN: The Housing Successor Annual Report is statutory reporting required to demonstrate the Housing Authority's good stewardship of the former Tustin Redevelopment Agency's housing assets in support of the City's Strategic Plan Goal A: Economic and Neighborhood Development, Strategy 15; Create affordable and workforce housing options. Docusign Envelope ID: ABFD2DF1-CC9B-4C45-9BOF-8DO186BOCAC1 City Council Agenda Report Housing Successor December 16, 2025 Page 2 BACKGROUND AND DISCUSSION: On January 17, 2012, the newly formed Tustin Housing Authority (Housing Authority) adopted Resolution HA No. 12-01, approving the assumption of housing assets and functions previously performed by the former Tustin Community Redevelopment Agency, which was dissolved on February 1, 2012 in accordance with State law. In the following years, several new State laws were created to ensure compliance with redevelopment dissolution, including Senate Bill (SB) 341 in 2013, which requires housing successors provide an annual report on expenditures to its governing body. The attached Housing Authority Annual Report (Report) is the result of SB 341 and fulfills the HSC Section 34176.1(f) reporting requirements for Fiscal Year 2024-2025. The Report is largely accounting based and intended to document that funds in the Housing Successor's Low and Moderate Income Housing Asset Fund (LMIHAF) are being spent in compliance with State law. Though the Housing Authority has a portfolio of outstanding loans associated with different affordable housing efforts, the LMIHAF does not have a source of regular income. As a result, expenditures are generally limited to monitoring and enforcement of affordability covenants. Larger expenditures typically take place when someone living in one of the income -restricted homes sells their unit back to the Housing Authority, which in turn re -sells it to a new income -approved household. The Report demonstrates that the LMIHAF remains in compliance with State law. The LMIHAF is audited annually, as part the City's independent audit. Per the requirements of SB 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. [Signed by: u w F(hms 92ABBDF237B640B... Valentin Flores Deputy Director of Economic Development Tustin Housing Authority Signed by: E 4 DD18 Alexa Smittle Director of Community Development ocuSigned by: Ei CAF�OBB 56�49��1� Janine Hernandez Senior Management Assistant Tustin Housing Authority Attachment: 1. Housing Successor Annual Report for Fiscal Year 2024-2025 Docusign Envelope ID: ABFD2DF1-CC9B-4C45-9BOF-8DO186BOCAC1 HOUSING SUCCESSOR AGENCY ANNUAL REPORT FOR THE LOW AND MODERATE INCOME HOUSING ASSET FUND FISCAL YEAR 2024-2025 TUSTIN HOUSING AUTHORITY This Housing Successor Agency Annual Report (Report) for the Low and Moderate Income Housing Asset Fund (LMIHAF) has been prepared pursuant to California Health and Safety Code Section 34176.1(f). This Report sets forth certain details of the Tustin Housing Authority (Housing Successor) assets and activities during Fiscal Year 2024-2025 pursuant to the statutory reporting requirements contained in Part 1.85, Division 24 of the California Health and Safety Code (HSC), in particular sections 34176 and 34176.1. This Report is to be provided to the Housing Successor's governing body by December 31, 2025, and made available to the public on the City's website, www.tustinca.org. The report is organized in a point -by -point response to California Health and Safety Code requirements. I. Amount Received Pursuant to Section 34191.4(b)(3)(A): This section provides a total amount of funds paid to the City for loans provided to the former Redevelopment Agency of the City of Tustin. - The Housing Successor did not receive any loans or loan funds pursuant to this Section. 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. - A total of $136,043 was deposited into the LMIHAF during the fiscal year. Of this amount, $119,020.50 was received from the purchase proceeds to reimburse the City for fees and costs incurred and to satisfy the Note (see Section V), as agreed upon between the affordable housing unit seller (Seller) and the City under the Option Agreement to preserve an affordable unit in default. 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. - At the close of the Fiscal Year, the ending fund balance in the LMIHAF was ($15,749) of which there are no funds held for items listed on the ROPS. IV. Description of Expenditures from LMIHAF: This section provides a description of the expenditures made by LMIHAF during the Fiscal Year. The expenditures are to be Tustin Housing Authority Page 1 Docusign Envelope ID: ABFD2DF1-CC9B-4C45-9BOF-8DO186BOCAC1 categorized. - The following is a description of expenditures from the LMIHAF by category: Monitoring & Administration Expenditures $232,203 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 $232,203 (NOTE: The funds reported in Fiscal Year 2023-2024 for the purchase and preservation of an affordable unit were returned to the General Fund in Fiscal Year 2024-2025.) 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. - Under the Dissolution Law and for the 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 Housing Successor is allowed to spend up to the greater of $263,100 or 5% of the value of its Assets ($767,696) on Monitoring and Administration Expenditures and is in compliance (see Section IV). The following provides the statutory value of assets owned by the Housing Successor: Statutory Value of Real Property Owned by Housing Authority N/A Value of Loans and Grants Receivable - Multifamily Loans $362,840 - Affordable Housing Promissory Notes $95,267,658 Promissory Note Allowance (Forgivable amount) ($80,276,587) Total Value of Housing Successor Assets $15,353,911 Affordable Housing Promissory Notes: The City has executed Promissory Notes (Note) with Tustin Housing Authority Page 2 Docusign Envelope ID: ABFD2DF1-CC9B-4C45-9BOF-8DO186BOCAC1 281 affordable home buyers to facilitate affordable housing supply. After the 45-year covenant expiration date and by year 46, five percent of the outstanding Note principal, along with any accrued and unpaid interest from the date of the initial sale of the Unit (execution of the original Affordable Housing Covenant), must be paid to the City. 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, 2025, the total outstanding principal balance of the 281 Notes was $95,267,658. 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. - 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: 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. - The Housing Successor does not receive or hold property tax revenue pursuant to the ROPS. Vill. Status of Compliance with Section 33334.16: This section provides a status update on any 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. - Section 34176.1 states that the rules in Section 33334.16 no longer apply to properties the Housing Successor acquired on or after February 1, 2012. However, this Report still provides an update on the project associated with that 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: Tustin Housing Authority Page 3 Docusign Envelope ID: ABFD2DF1-CC9B-4C45-9BOF-8DO186BOCAC1 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 properties that have been acquired by the Housing Successor using LMIHAF on or after February 1, 2012: Address of Date of Deadline LPropertyDevelopment Activity 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 Tustin Housing Authority Page 4 Docusign Envelope ID: ABFD2DF1-CC9B-4C45-9BOF-8DO186BOCAC1 proceeds of $569,886 for the LMIHAF. 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. 133 Liberty Street, 08/23/2024 N/A Sold to Moderate Tustin (Moderate Income Family, Income Unit) 12/16/2024 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. - 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. - There are no replacement housing obligations. There are no inclusionary housing obligations. 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. 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 Tustin Housing Authority Page 5 Docusign Envelope ID: ABFD2DF1-CC9B-4C45-9BOF-8DO186BOCAC1 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 Housing Successor is required to report compliance with this provision every five years. - 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 2024-2025. The Housing Successor was in compliance with Section 34176.1(a)(3)(A) for the first two 5-year reporting periods, 2014-2019 and 2019-2024, and remains in compliance in FY 2024-2025. XI. Senior Housing Test: This section provides the percentage of units of deed -restricted rental housing restricted to seniors and assisted individually orjointly by the Housing Successor, 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, and/or City within the same time period. For this Report, the ten-year period reviewed is July 1, 2015, to June 30, 2025. The Housing Successor is to calculate the percentage of units of deed -restricted rental housing restricted to seniors and assisted by the Housing Successor, 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 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, 2015 to June 30, 2025: Senior Housing Test # of Assisted Senior Rental Units I rJuly 1, 2015 to June 30, i 0 # of Total Assisted Rental Units 262 Amalfi 37 Anton Legacy 225 Senior Housing Percentage 0% 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. Tustin Housing Authority Page 6 Docusign Envelope ID: ABFD2DF1-CC9B-4C45-9BOF-8DO186BOCAC1 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. Please 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. Table does not include the Homeless Shelter transactions, the revenues for which are transferred in from grant and City funds. Year FY i jllll&�i Beginning Balance $1,867,400.05 $1,203,129.83 $718,343.75 $294,125.44 $25,516.83 Add: Deposits $66,156.87 $27,973.51 $37,132.25 $481,188.20 $676,893.11 (Less) Expenditures ($730,427,.09) ($512,759.59) ($461,350.56) ($749,796.81) ($702,409.94) Ending Cash Balance $1,203,129.83 $718,343.75 $294,125.44 $25,516.83 $0 The ending available cash balance in FY 2024/2025 ($0) is less than the aggregate amount deposited into the LMIHAF during the preceding four fiscal years. Therefore, the LMIHAF does not have an Excess Surplus. At this time, the Housing Successor is supported by the City's General Fund. Transfers are made into the LMIHAF strictly to support necessary activities such as affordability monitoring. The Housing Successor does not have any revenue -generating uses in its portfolio. As this is not expected to change, therefore, it is unlikely the Housing Successor will ever have an 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 money from the Low and Moderate Income Housing Fund pursuant to Section 33334.3(f). - Based on reporting requirements as of June 30, 2025, our inventory of homeownership units is 281. - 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 Tustin Housing Authority Page 7 Docusign Envelope ID: ABFD2DF1-CC9B-4C45-9BOF-8DO186BOCAC1 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. - There were no payments received in Fiscal Year 2024-2025. - The Housing Successor does not contract with an outside entity to manage our units. 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