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HomeMy WebLinkAboutCity Council - 5496 RESOLUTION NO. 5496 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH APPROVING HOUSING POLICY REPORT UNDER INTERNAL REVENUE CODE SECTION 103A AND DIRECTING ITS PUBLICATION RESOLVED; by the City Council of the City of Huntington Beach, California, as follows: WHEREAS, Section 103A( j ) (5) of the Internal Revenue Code of 1954, as amended, as implemented by proposed and temporary regulations of the Department of the Treasury, Section Ga. 103A-2 (1 ) , requires the applicable elected representative of an issuer of qualified mortgage subsidy bonds to publish, after public hearing, a housing policy report; This Council is the applicable elected representative of the City of Huntington Beach which City proposes to issue in 1985 qualified mortgage subsidy bonds; This Council has received a draft housing report dated November 30, 1984, and has reviewed each and every part thereof and this Council has conducted a duly noticed public hearing; and It is in the public interest and for the public benefit that said housing policy report be approved and published; NOW THEREFORE, it is hereby ordered and determined as follows: 1 . The City Manager of the City is hereby authorized and directed to prepare a summary of the comments made at the aforesaid public hearing and to include said summary as a part of the Policy Report under Section 103A. 2 . The report of the City of Huntington Beach entitled, "Policy Report under Section 103A, " and dated November 30, 1984, is hereby approved with the inclusion of said summary of comments . 1 . 3 . The Mayor of the City, as a member of this Council, is hereby authorized and directed to execute said report on behalf of this Council as the duly elected representative of the City. 4. This Council does hereby publish the Report by authorizing and directing the City Clerk, and the City Clerk is hereby so authorized and directed, to make said Report available in the Office of the City Clerk for distribution to the public. 5 . The City Clerk of the City is hereby authorized and directed to file the Report with the Internal Revenue Service at the Internal Revenue Service Center, Philadelphia, Pennsylvania 19255. PASSED AND ADOPTED this 19th day of February 1985. mr ATTEST: APPROVED AS TO FORM: City Clerk City Attorney F � REVIEWED AND APPROVED: INITIATED AND APPROVED: City Administr for Deputy Director i of Redevelopment AJF:mf 2/7/85 0432L 2. City g of Huntington Beach 95-6000723W POLICY REPORT UNDER SECTION 103A 0656h A. GENERAL On July 18, 1984, Congress enacted into law the Tax Reform Act of 1984. This Act imposes certain requirements on issuers of qualified single family mortgage bonds and mortgage credit certificates. One of these requirements is that issuers publish a statement of their policies with respect to housing, development, and low-income housing assistance and report on their compliance, for the one-year period preceding the date of the report, with the intent of Congress that qualified mortgage bond issues and mortgage credit certificates assist lower income families to afford home ownership before assisting higher income families. In order to qualify for a federal tax exemption for interest on qualified mortgage bonds to be issued in 1985, this statement must be published prior to March 11, 1985. As the City of Huntington Beach plans to issue qualified single family mortgage bonds [and/or] mortgage credit certificates in 1985, the following report is being published in order to comply with the requirements of the Tax Reform Act of 1984 and the Regulations thereunder. B. POLICIES AND GOALS B(1) Housing Policies and Goals. The California State Legislature has found and declared that there exists within the [State of California] a serious shortage of decent, safe, and sanitary housing which is affordable to many persons in the state. This shortage is exacerbated during periods of rising interest rates, particularly as high interest rates have the effect of diminishing the number of otherwise creditworthy buyers from qualifying for private sector mortgage capital sources. In order to remedy this adverse effect on potential home buyers on the lower end of the purchasing spectrum, it is necessary to implement a public program to reduce the cost of mortgage financing for the single-family purchases for those persons unable to compete for mortgage financing in the conventional mortgage market. California Health and Safety Code s52001. The California State Legislature has additionally found and declared that it is necessary and essential that counties and cities be authorized to directly and indirectly make long-term, low-interest loans to persons not presently eligible for financing through private sector lending institutions to finance construction, rehabilitation, and acquisition of homes in order to encourage investment and upgrade local areas. California Health and Safety Code s52002. The City of Huntington Beach plans to issue qualified single family mortgage bonds [and/or] mortgage credit certificates (the "Bonds/Certificates") in 1985 in furtherance of the above-stated policies of the California State Legislature and in conformance to the following policies and goals: 0656h -1- (i) Use of Proceeds. The proceeds of the Bonds will be used to finance the acquisition of residences. (ii) Targeting of Proceeds to Housing e. The proceeds of the Bonds will be targeted to new housing and existing housing. (iii) Determination of Need for Targeting. The need to target the Bond proceeds to new and existing housing was determined by the City's low vacancy rate, lack of supply, and high costs of affordable housing. The City's strategy regarding single family housing bonds is to increase the supply of affordable housing to ease the increasing demand. (iv) Method of Targeting Proceeds. The City primarily accepts proposals from developers of new housing, however, existing housing proposals will also be considered. (v) Other Pertinent Information. Non applicable. NO A description of how the City's housing policies relate to its development and low income housing assistance policies to form a general plan is attached. (See Attachment "A"). B(2) Development Policies and Goals. The California State Legislature has found and declared that there exists within the [State of California] a serious shortage of decent, safe, and sanitary housing which is affordable to many persons in the state. This shortage is exacerbated during periods of rising interest rates, particularly as high interest rates have the effect of diminishing the number of otherwise creditworthy buyers from qualifying for private sector mortgage capital sources. In order to remedy this adverse effect on potential home buyers on the lower end of the purchasing spectrum, it is necessary to implement a public program to reduce the cost of mortgage financing for the single-family purchases for those persons unable to compete for mortgage financing in the conventional mortgage market. California Health and Safety Code s52001. The California State Legislature has additionally found and declared that it is necessary and essential that counties and cities be authorized to directly and indirectly make long-term, low-interest loans to 0656h -2- i persons not presently eligible for financing through private sector lending institutions to finance construction, rehabilitation, and acquisition of homes in order to encourage investment and upgrade local areas. California Health and Safety Code s52002. City of Huntington Beach plans to issue qualified single family mortgage bonds (the "Bonds) in 1985 in furtherance of the above-stated policies of the California State Legislature and in conformance to the following policies and goals: (i) Targeting of Proceeds to Areas. None of the proceeds of the Bonds will be targeted to specific areas. (ii) Description of Target Areas. Not applicable. (iii) Selection of Target Areas. Not applicable. (iv) Use of Targeted Proceeds. The proceeds of the Bonds will not be targeted to specific areas. (v) Other Pertinent Information. None. (vi) A description of how the City's development policies relate to its housing and low-income housing assistance policies to form a general plan is attached. (See Attachment "A"). B(3) Low-Income Housing Assistance Policies and Goals. To insure that qualified mortgage bond issues assist lower income families to afford home ownership, California law provides that a city or county that administers a home financing program must establish criteria for qualification of persons and families for participation in such program. The criteria must include a maximum household income, which maximum shall not exceed one hundred fifty percent of median household income (defined as the highest of (A) statewide median household income, (B) county-wide median household income, or (C) median household family income for area as determined by the United States Department of Housing and Urban Development for mortgagors who will be the first occupant of a home, one hundred twenty percent of the median household income for mortgagors who will not be the first occupant of a home (except that the city or county must assure that no less than twenty percent of such funds shall be for households whose income does not exceed one hundred ten percent of the median household income, unless the legislative body of the city or county makes certain findings). California Health and Safety 0656h -3- Code s52020(d). In addition, to obtain a supplementary allocation of qualified mortgage bonds from the California Mortgage Bond Allocation Committee, proceeds of qualified mortgage bonds issued with such supplementary allocation must be used to provide mortgages to persons and families whose incomes do not exceed one hundred twenty percent of median household income for mortgagors who will be the first occupant of a home and median household income for mortgagors who will not be the first occupant (except that the issuer shall assure that no less than half of such funds shall be for households whose income does not exceed eighty percent of such median household income, and provided that this limit may be increased to ninety percent of median household income if the legislative body of the issuer finds that there are insufficient numbers of creditworthy persons whose income does not exceed eighty percent of median household income). California Health and Safety Code s50189(b). The City of Huntington Beach plans to issue qualified single family mortgage bonds ("Bonds") in 1985 in furtherance of the above-stated policies of the California State Legislature and in conformance to the following policies and goals: (i) Targeting of Proceeds According to Income. All of the proceeds of the Bonds will be targeted to median income families. Median income is determined by the County of Orange (through independent analysis) means $36,050 as of July 16, 1984. (ii) Method of Targeting Proceeds. The Bond proceeds are targeted to income levels falling between the median income for Orange County and one hundred fifty percent of the median. The program is targeted to this population since it is the only income level which qualifies as creditworthy. (iii) Other Pertinent Information. None. (iv) A description of how the City's low-income housing assistance policies relate to its housing and development policies to form a general plan is attached. (See Attachment "A"). C. COMPLIANCE WITH PREVIOUS REPORT The City of Huntington Beach has not published a Policy Report Under Section 103A prior to this Policy Report. D. COMPLIANCE WITH INTENT OF CONGRESS On August 7, 1984, [Issuer] issued Single Family Mortgage Revenue Bonds in the aggregate principal amount of $20 million (the 111984 Bonds") in 0656h -4- an effort to assist lower-income families to afford home ownership. The following information is provided with respect to the 1984 Bonds: (1) Method of Distributing 1984 Bond Proceeds. The City accepts proposals from developers who in turn authorizes a lender/service to disburse the proceeds to the developers. (2) Assistance to Lower-Income Families. The method used by the City of Huntington Beach to distribute the proceeds of the 1984 Bonds as described in (1) above was not designed to assist lower-income families before higher-income families. (3) Income Levels. The City uses the median to one hundred fifty percent of the median income level in distributing the proceeds of the 1984 Bonds. In August, 1984, the city of Huntington Beach issued Single Family Mortgage Revenue Bonds in the aggregate principal amount of $20 million (the 111984 Bonds") in an effort to assist lower-income families to afford home ownership. As of February 19, 1985, $17,992,003 of the Bond proceeds remained available for use. The following information is provided with respect to the 1983 Bonds: In March, 1983, the city of Huntington Beach issued Single-Family Mortgage Revenue Bonds in the aggregate principal amount of $20,000,000. As of February 19, 1985, $19,500,000 of the bond proceeds remained available for use due to delays in construction scheduling. E. SUMMARY OF HEARING COMMENTS A public hearing on the proposed Policy Report was duly noticed and held on February 19, 1985. The following comments were received: This report is submitted by the undersigned elected representative of the City of Huntington Beach. Honorable Ruth Bailey Mayor [SEAL] ATTEST: City Clerk Res. No. 5496 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss: CITY OF HUNTINGTON BEACH ) I, ALICIA M. WENTWORTH, the duly elected, qualified City Clerk of the City of Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby certify that the whole number of members of the City Council of the City of Huntington Beach is seven; that the foregoing resolution was passed and adopted by the affirmative vote of more than a majority of all the members of said City Council at a regular meeting thereof held on the 19th day of February , 1985 ; by the following voter AYES: Councilmen: Kelly, MacAllister, Mandic, Bailey, Finley, Green II NOES: Councilmen: None ABSENT: Councilmen: Thomas City Clerk and ex-officio Clerk of the City Council of the City of Huntington Beach, California