HomeMy WebLinkAboutCC Resolution 13985 (Affordable Housing Acquisition)RESOLUTION NO. 13985
RESOLUTION OF THE SAN RAFAEL CITY COUNCIL APPROVING AN
AFFORDABLE HOUSING ACQUISITION STRATEGY AND AUTHORIZING
EXPENDITURES FROM THE CITY'S AFFORDABLE HOUSING FUNDS TO ASSIST
NONPROFIT HOUSING ORGANIZATIONS TO ACQUIRE HOUSING UNITS
WHEREAS, the City of San Rafael adopted an in lieu housing fee for residential
developments in 1988 and an in lieu housing fee for non-residential developments in 2005;
collectively the "Affordable Housing In Lieu Fund"; and
WHEREAS, the Affordable Housing In Lieu Fund now holds about $1,265,000; and
WHEREAS, on March 16, 2015, the City Council adopted a resolution allocating
$580,000 of the Affordable Housing In Lieu Fund to the administration of the Below Market
Rate Ownership Program for Fiscal Year 2015-16 through Fiscal Year 2020-21, thereby reducing
the unallocated fund to about $ 685,000; and
WHEREAS the California State Legislature enacted Assembly Bill xl 26 ("Dissolution
Act") to dissolve redevelopment agencies formed under the Community Redevelopment Law
(Health and Safety Code Section 33000 et seg.); and'
WHEREAS, on December 29, 2011, the California Supreme Court delivered its decision
in the California Redevelopment Association v. Matosantos case, finding the Dissolution Act
largely constitutional, with the result that all California redevelopment agencies, including the
Redevelopment Agency of the City of San Rafael ("Redevelopment Agency"), would be
dissolved on February 1, 2012; and
WHEREAS, on January 3, 2012 and pursuant to Health and Safety Code Section 34173,
the City Council declared that the City of San Rafael would act as the "Successor Agency" for the
dissolved Redevelopment Agency effective February 1, 2012; and
WHEREAS, on February 1, 2012, the Redevelopment Agency was dissolved pursuant to
Health and Safety Code Section 34172; and
WHEREAS, the Successor Agency now holds the former Redevelopment Agency's
unobligated housing funds and its non -housing funds and assets and is charged with the
responsibility of paying off the former Redevelopment Agency's existing debts, disposing of the
former Redevelopment Agency's properties and assets to help pay off debts and return revenues
to the local government entities that receive property taxes ("Taxing Entities"), and winding up
the affairs of the former Redevelopment Agency; and
WHEREAS, in March 2012, the Successor Agency remitted $1,136,751 of former
Redevelopment Agency affordable housing funds to the Marin County Auditor for distribution to
the Taxing Entities within the boundaries of the former Redevelopment Project Area pursuant to
a directive from the California Department of Finance; and
WHEREAS, the remaining former Redevelopment Agency affordable housing fund is
now held by the City of San Rafael and contains about $ 685,000; and
WHEREAS, the City Council now desires to direct staff as to the allocation of the
Affordable housing In Lieu Fund and the former Redevelopment Agency affordable housing
funds, collectively the "Affordable Housing Funds"; and
WHEREAS, by staff report accompanying this Resolution and incorporated into this
Resolution by this reference (the "Staff Report"), the City Council has been provided with
additional information upon which the findings and actions set forth in this Resolution are based.
NOW, THEREFORE, BE IT RESOLVED that the City Council hereby finds and
determines that the above recitals are true and correct and have served as the basis, in part, for the
findings and actions of the City Council set forth below.
BE IT FURTHER RESOLVED that the City Council hereby approves an affordable
housing acquisition strategy as set forth in the Staff Report and approves appropriating the funds
in the City's Affordable Housing Funds for such housing acquisition strategy.
BE IT FURTHER RESOLVED that the City Council hereby directs the City Manager to
return to the City Council for authorization of specific funding allocations to nonprofit housing
organizations for specific property acquisitions under this program.
BE IT FURTHER RESOLVED that this Resolution shall take immediate effect upon
adoption.
I, ESTHER C. BEIRNE, City Clerk of the City of San Rafael, hereby certify that the
foregoing resolution was duly and regularly introduced and adopted at a regular meeting of the
City Council held on the third day of August 2015, by the following vote, to wit:
AYES: COUNCILMEMBERS: Bushey, Colin, Gamblin, McCullough & Mayor Phillips
NOES: COUNCILMEMBERS: None
ABSENT: COUNCILMEMBERS: None
ESTHER C. BEIRNE , City Clerk
City of Cj �y � Agenda Item No: 4. a
.�/W`G
Meeting Date: August 3, 2015
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: Economic Development
Prepared by: Stephanie Lovette, Manager City Manager Approval:
TOPIC: APPROVAL TO EXPEND $1.3 MILLION OF CITY AFFORDABLE HOUSING
FUNDS TO ASSIST NONPROFITS TO ACQUIRE AND REHABILITATE
EXISTING RENTAL HOUSING
SUBJECT: RESOLUTION OF THE SAN RAFAEL CITY COUNCIL APPROVING AN
AFFORDABLE HOUSING ACQUISITION STRATEGY AND AUTHORIZING
EXPENDITURES FROM THE CITY'S AFFORDABLE HOUSING FUNDS TO
ASSIST NONPROFIT HOUSING ORGANIZATIONS TO ACQUIRE HOUSING
UNITS
RECOMMENDATION: Adopt Resolution approving the affordable housing program and authorizing
expenditures from the City's affordable housing fund for such purposes.
OVERVIEW: Staff is seeking approval to expend approximately $1.3 Million of City affordable
housing funds to assist non -profits to acquire and rehabilitate existing rental housing or to convert
nonresidential buildings to housing. The City will enter into a long term affordability agreement with
each non-profit partner so the rents will remain affordable over time.
BACKGROUND: The City of San Rafael and the former San Rafael Redevelopment Agency has a
long history as a supporter of affordable housing programs. Currently, San Rafael has a total of 1,315
housing units with long-term affordability deed restrictions. Of these 1,315 affordable housing units,
1,204 are rental units and 111 are ownership units.
These affordable units must be occupied by low and moderate income households which earn between
30% to 60% of the area median income (low) and 60% to 120% of the area median income (moderate).
Rental rates and purchase prices for these affordable units are typically 30% to 50% lower than market
rate rents/sales prices. The purpose of the City's affordable housing programs is to provide for a mixed -
income community where teachers, service workers, seniors and others can live and work.
These 1,315 affordable units were a result of forward thinking housing policies adopted by the San
Rafael City Council. San Rafael was one of the first cities in California to require that all new multi -
FOR CITY CLERK ONLY
File No.:
Council Meeting: 9t3 I I0( g
Disposition: ie9`0Lb iio-J 135g4P
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Pam 2
family housing developments include a percentage of the units affordable to low and moderate income
households. Since its adoption in 1988, this program has resulted in the construction of 152 affordable
rental units in 12 privately owned buildings and 111 affordable ownership units within 19 residential
developments. During the same time period, the City also supported affordable housing in other non-
financial ways such as zoning and the support of affordable housing tax credit applications, which
resulted in an additional 284 units being developed by affordable housing organizations in San Rafael.
The City along with Marin County and the majority of Marin cities and towns, adopted a commercial
housing in -lieu fee in 2005. This fee is collected from new non-residential developments that do not
provide affordable housing on-site in order to accommodate the new employees that will be created by
the new development. All fees collected from the commercial in -lieu fee are deposited in a City
administered housing fund — this fund currently holds $1,265,000 in unallocated funds. The
construction of the Target store created the largest share of the revenues in this fund. Staff does not
anticipate substantive additions to this fund due to minimal new commercial development.
In addition to the various City programs that support affordable housing, the former San Rafael
Redevelopment Agency ("SRRDA") also provided housing support. The SRRDA was required by state
law to expend 20% of the annual Agency budget on affordable housing. This resulted in roughly
$900,000 annually that was used to assist nonprofits to develop and rehabilitate housing and for SRRDA
staff support.
The Redevelopment Agency funds were combined with other sources including loans and grants from
the Marin Community Foundation, State and Federal tax credits and Federal CDBG and I IOME funds.
The Agency partnered with various non-profit housing developers to construct 768 affordable units in 31
rental developments - these units are owned by BRIDGE Mousing, Buckelew, Canal Alliance, EAH,
Homeward Bound, Mercy Housing and Rotary. All of the Agency funded projects are affordable to
very low and low income households and have long-term affordability restrictions.
In 2012 all redevelopment agencies in the State of California were dissolved and the non -pledged assets
of the former agencies, including affordable housing assets, were distributed to the local taxing agencies.
The SRRDA remitted $1,136,751 of affordable housing funds to the local taxing entities and the City of
San Rafael, as Successor to the San Rafael Redevelopment Agency, was allowed to keep roughly
$682,000 of housing funds. These funds may only be used to support affordable housing activities.
ANALYSIS: Earlier this year, staff met with the City Council Finance Committee to evaluate the
potential uses for the roughly $1.9 Million of housing funds from City in lieu fees and the former
SRRDA funds. The Committee recommended that the housing funds be allocated to two programs:
continuation of the affordable ownership program and the continuation of assistance to nonprofit
housing organizations to acquire and rehabilitate rental units affordable to very low and low income
households.
The Committee also discussed using the former redevelopment funds for individual rental vouchers.
The Committee felt that assisting in the creation of more permanent affordable housing was a better long
range strategy for the City to pursue.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Paze: 3
Pursuant to the Finance Committee recommendation, the City Council adopted a resolution on March
16, 2015 allocating $580,000 in City in lieu fees for the affordable ownership program for Fiscal Year
2015-16 to Fiscal Year 2020-21. This will cover five years of payments to Marin Housing for the
administration of rental and ownership affordable housing programs and some additional funding for
legal fees. This action resulted in the non -allocated City housing fund balance being reduced to
$685,000.
Staff is now seeking City Council approval on a program to expend the approximately $1.1 Million of
remaining unallocated housing funds from the two sources; City Funds and funds of the former
Redevelopment Agency.
City funds Balance: $1.265 Million ($685.000 is unallocated)
This account is the in lieu housing fees from commercial developments. The fund is governed by City
of San Rafael policy. The funds can be used to increase or improve the supply of permanent affordable
housing for households earning 80% or less than the Area Median Income. Staff works with nonprofit
agencies to acquire or develop housing that is affordable to lower income households. See Attachment
B for the Area Median Income Chart.
The City fiends cannot be used for assistance to individuals or for temporary housing such as homeless
shelters.
Former redevelopment aaencv funds Balance: $ 682.000.
This account is the governed by State Law and requires the funds be spent to provide units affordable to
households earning 30-50% of Area Median Income (see Attachment A). These funds can also be spent
on housing vouchers for very low income individuals and to construct or rehabilitate facilities for
homeless persons.
Other Fundina Opportunities
The Marin Community Foundation ("MCF") has convened a group of affordable housing funders
including the County of Marin, Marin Housing, the City of San Rafael and the Tamalpais Foundation.
This consortium is also focused on an affordable housing acquisition strategy and has developed general
program guidelines and funding templates. The draft program guidelines for acquisition include:
• Smaller buildings -4-20 units
• Minimal structural rehabilitation
• "Greening" the buildings during rehabilitation with assistance from Marin Clean Energy and
others to reduce long term operating costs
• No tenant relocation
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 4
a Reducing rents for existing income qualified households
a Maximize the use of Section 8 vouchers
The main source of funding for this apartment building acquisition program will be below market rate
loans from MCF. The MCF funding commitment will provide excellent leverage for the other funders,
including the City of San Rafael. San Rafael funds can only be used to acquire units within the City
limits. The other sources of funding can be used Countywide.
STAFF RECOMMENDATION: Staff is recommending that the remaining $1.3 Million of housing
funds from City in lieu fees and the former SRRDA funds be used to help nonprofits acquire and
rehabilitate existing apartments and make those units permanently affordable to very low and low
income households. Because an acquisition- rehabilitation program will not increase the overall supply
of housing, staff is further recommending that, to the extent possible, nonprofit housing groups be
encouraged to consider projects that could convert existing commercial buildings to housing.
Staff is further recommending that the program be focused towards smaller rental units (studios and one
bedroom units) to help meet the needs identified in the City's housing element. Smaller rental units
would assist low income single wage renters, low income seniors and homeless individuals.
FISCAL IMPACT: The affordable housing funds are held in a restricted fund and the funds can only
be used to increase and improve the supply of affordable housing. Both of the affordable housing funds
are held in one restricted account with a sub account for each source to assure that the former
redevelopment funds are used within the State restrictions.
Staff is requesting approval of the overall program framework and broad funding allocations at this
point. Staff will return to the City Council for specific approval of each individual property acquisition
loan.
OPTIONS:
1) Adopt the Resolution approving an affordable housing acquisition strategy and authorizing
expenditures from the city's affordable housing funds to assist nonprofit housing organizations to
acquire housing units.
2) Request changes to the resolution.
3) Reject the Resolution.
ACTION REQUIRED: Adopt Resolution.
ATTACHMENTS:
Resolution
Attachment A — Area Median Income & affordable rent chart
The Income schedule shown above is based on the 2014 Area Median Income for Marin County
as published by HUD.
As of April 1, 2015, CA Department of Housing and Community Development (CAHCD) has not yet released their numbe
ATTACHMENT A
CITY OF SAN RAFAEL
RENTAL AFFORDABILITY FOR 2015
HUD Income for 2015 is again held harmeless-no change from 2014
2015 INCOME SCHEDULE
(published by
HUD March 2015)
Median Very Low
Low
Low
Low
Moderate
Income
Income
Income
Income
Income
Income
HH Size 100%
50%
60.00%
65.00%
80.00%
90.00%
1 72,100
36,050
43,260
46,865
57,680
64,890
2 82,400
41,200
49,440
53,560
65,920
74,160
3 92,700
46,350
55,620
60,255
74,160
83,430
4 103,000
51,500
61,800
66,950
82,400
92,700
5 111,250
55,625
66,750
72,313
89,000
100,125
6 119,500'
59,750
71,700
77,675
95,600
107,550
MAXIMUM RENT SCHEDULE - VERY LOW INCOME
Very Low Income rent @
50.00%
of median
Monthly rent, including utilities, may not exceed 1/12 of 30% of
50.00%
of median income
adjusted for household size.
Annual
Monthly
30%
Monthly
HH Size Unit size
Income
Income
of Income
Utilities
RENT / MO
1 studio
36,050
3,004
901
36
$865
2 1Br
41,200
3,433
1,030
46
$984
3 2Br
46,350
3,863
1,159
64
$1,095
4 3Br
51,500
4,292
1,288
71
$1,217
MAXIMUM RENT SCHEDULE - LOW INCOME
Low Income rent @
60.00%
of median
Monthly rent, including utilities, may not exceed 1/12 of 30% of
60.00%
of median income
adjusted for household size.
Annual
Monthly
30%
Monthly
HH Size Unit size
Income
Income
of income
Utilities
RENT I MO
1 studio
43,260
3,605
1,082
36
$1,046
2 1Br
49,440
4,120
1,236
46
$1,190
3 2Br
55,620
4,635
1,391
64
$1,327
4 38r
61,800
5,150
1,545
71
$1,474
MAXIMUM RENT SCHEDULE - LOW INCOME
Low Income rent @
65.00%
of median
Monthly rent, including utilities, may not exceed 1/12 of 30% of
65.00%
of median income
adjusted for household size.
Annual
Monthly
30%
Monthly
HH Size Unit size
Income
Income
of income
Utilities
RENT / MO
1 studio
46,865
3,905
1,172
36
$1,136
2 1Br
53,560
4,463
1,339
46
$1,293
3 2B►
60,255
5,021
1,506
64
$1,442
4 3Br
66,950
5,579
1,674
71
$1,603
MAXIMUM RENT SCHEDULE - LOW INCOME
Monthly rent, including utilities, may not exceed 1/12 of 30% of
70.00%
of median income
adjusted for household size.
Annual
Monthly
30%
Monthly
HH Size Unit size
Income
Income
of income
Utilities
RENT I MO
1 studio
50,470
4,206
1,262
36
$1,226
2 1Br
57,680
4,807
1,442
46
$1,396
3 2Br
64,890
5,408
1,622
64
$1,558
4 3Br
72,100
6,008
1,803
71
$1,732
MAXIMUM RENT SCHEDULE - LOW INCOME
Monthly rent, Including utilities, may not exceed 1/12 of 30% of
80.00%
of median income
adjusted for household size.
Annual
Monthly
30%
Monthly
HH Size Unit size
Income
Income
of income
Utilities
RENT I MO
1 studio
57,680
4,807
1,442
36
$1,406
2 1Br
65,920
5,493
1,648
46
$1,602
3 2Br
74,160
6,180
1,854
64
$1,790
4 3Br
82,400
6,867
2,060
64
$1,996
MAXIMUM RENT SCHEDULE - MODERATE INCOME
Moderate Income rent @
90.00%
of median
Monthly rent, including utilities, may not exceed 1/12 of 30% of
90.00%
of median income
adjusted for household size.
Annual
Monthly
30%
Monthly
HH Size Unit size
Income
Income
of income
Utilities
RENT I MO
1 studio
64,890
5,408
1,622
36
$1,586
2 1&
74,160
6,180
1,854
46
$1,808
3 2Br
83,430
6,953
2,086
64
$2,022
4 3Br
92,700
7,725
2,318
64
$2,254
The Income schedule shown above is based on the 2014 Area Median Income for Marin County
as published by HUD.
As of April 1, 2015, CA Department of Housing and Community Development (CAHCD) has not yet released their numbe