HomeMy WebLinkAboutPublic Hearing - Housing Element Amendment No 92-1 - Negativ STATE OF CAUFORNIA
County of Orange
I am a Citizen of the United States and a
resident of the County aforesaid; I am over the
age of eighteen years, and not a party to or
interested in the below entitled matter. I am a
principal clerk of the HUNTINGTON BEACH PUBuc NoricE coasTAt STATUS=Not
NOTICE OF I applicable ` e
INDEPENDENT, a newspaper of general _� to FILE A copy of the
PUBLIC HEARINSi- , ppropposed=request s ve file
,� HOUSING .ELEMENT in the CommunityDevelop-
circulation, printed and puullshed In the City of AMENDMENT NO. 92-1/ ment Department, '2000
Negative Declaration No. Main.Street, Huntington
Huntington Bbach, County of Orange, State of 92-25 Beach,.-:California 92648,
(Preservation of Assisted .for Inspection by tha pub-
California, and that attached Notice is a true and Housln tic A copy oftthe start re-
NOTI E ,IS HEREBY port willaie°f'availa6te to In-
com complete co as was printed and published in =GIVEN that`the Huntington sterested p,arties'atrCity Hall
P PY P Pu Beach city: Council will or the .Main city Library hold a public hearing In the t((7111+Talbert Avenue)after
the Huntington Beach and Fountain Valley Council Chamber-.at the' iw,7ctober28,1992
Huntington; Beach-4CIVIC 'ALL IjEgESTEL' PER:
issues of said newspaper to wit the issue(s) of: Center 2000 Main Streeti 30NS 8re inVited,ao attend
yuntington•Beach,yCelifor '�tsaid hearing and
::express
nia,on.the date and atitheopINons. or submitf evi i
time indicated bolow-to,r& Bence:for or against the.
ceive and consider to application as outline
nts d
stateme ' of all persons abbove.if you challenge the I
who wish to be heard vela' `.City Council s.:-action In
flve`to the application,de-� court you may be limited
October 22 19 9 2 scribed below. s , ' i , to ralsinb'onlylthose Issues I
► DATE/TIME: Monday; No- you', o,r someone else:i
vember 2,1992,7 00 PM; raised 3t�the`public hearing i
APPLICATION NUMBER:I described in this_noti a 'or.-
Housing-Element Amend-- . in written. cgrrespanoence i
ment•No. 92 1/Neg. Dec:, delivere ,'tWjhe.City Clerk
92-35 at or prlor,to the public
APPELLANT: City of Hun 1 hearing If there.are any i
tin on Beach I ' further +questions please,
LOCATION:Clty=wide I call,GregBrown Develop-1
ZONE:N/A I ment Speciallgtat 536a
REQUEST: To amend the 5271 xR }
Housing Element-to include ,Connie .Brockway;
.on evaluation of the poten i City Clerk
tial for currently rent re` WU tington. Beaolr
Istricted low Income hous-' ��City Coundil
ing units to
convert to non' 2000 Main Street`
low,Income housing and
propose.programs to pre; Huntington:•Beach;.CA
serve or replace those. 92648'(.fM)53"2V
units. This amendment wily published"`Huntington}
bring the Housing Element 'Beach-Fountain`Valle In
into compliance with the i y ..-
I declare under penalty of perjury, that the Government Code Section dependent'October 22
65583(a)(8),(1)(6). 1992. .
ENVIRONNMEENTTAL STA- 104 28.
foregoing is true and correct. TUS: Negative Declaration
No..92-25 has been prev-
pared and advertised for a
30 day comment period,
Executed on October 22 199 Z Which expired on JulyY'117,
1992. This Negative Dacia-
at Costa esa California. ration was considered--by
the`Planning !^c.mmission
Lab
will also<be°•;:onsldered 1
by he Citv_Gouncll.
Signature
, 1
� v ,
PROOF OF PUBLICATION
RESOLUTION NO. 6446
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF HUNTINGTON BEACH ADOPTING HOUSING ELEMENT
AMENDMENT NO. 92-1 AND NEGATIVE DECLARATION NO. 92-25
WHEREAS, Section 65302(c) of the Government Code of the
State of California requires all cities and counties to include
a housing element as part of their general plans; and
WHEREAS, Section 65583(a) (8) , (c) (6) requires that the
City' s Housing Element be' amended to include on analysis of
housing "at risk" of conversion from low-income use to "market"
housing and to propose programs to preserve or replace those
units; and
The City Council desires to update the Housing Element in
accordance with State Law and to recognize changing community
needs and objectives; and
Housing Element Amendment No. 92-1 is necessary to bring
the Housing Element into compliance with Government Code
Section 675583 (a) (8) , (c) (6) ; and
A public hearing on the adoption of the Housing Element
Amendment No. 89-1 to the General Plan and Negative Declaration
No . 90-11 was held by the Planning commission on September 15,
1992; and
The City Council, after giving notice as prescribed by law,
held at least one public hearing to consider said Housing
Element Amendment No. 92-1 and Negative Declaration No. 92-25;
and
NOW, THEREFORE, BE IT RESOLVED, that the City Council of
10/92 : 361: SLk 1.
the City of Huntington Beach hereby adopts said amendment and
negative declaration to the Housing Element of the City of
Huntington Beach..
PASSED AND ADOPTED by the City Council of the City of
Huntington Beach at a regular meeting thereof held on the 16th
day of NCovember 1992 .
�aC��ZI/.CZc�
Mayor
ATTES � APPROVED AS TO FORM:
e4 9:�� - 1.! zLez:L
City Clerk i0 ��_City Attorney � �p5-9a•
REVIEWED AND APPROVED: INITIATED AND APPROVED:
Cto'y Administrator Di ector of Community=Development
10/92 : 361:SLk 2
Res. No. 6446.-
STATE OF CALIFORNIA
COUNTY OF ORANGE ss:
CITY OF HUNTINGTON BEACH )
I, CONNIE BROCKWAY, 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 at least a majority of all the members of said City Council
at a regular meeting thereof held on the 16th day
of November 19 92 , by the following vote:
AYES: Councilmembers:
Winchell, Silva, Green, MacAllister
NOES: Councilmembers:
None
ABSENT: Councilmembers:
Robitaille, Moulton--Patterson, (vacant seat)
City Ller ana ex-officionler
of the City Council of the City
of Huntington Beach, California
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CITY OF HUNTINGTON BEACH
Draft
PRESERVATION OF ASSISTED HOUSING:
ANALYSIS AND PROGRAMS
' Appendix C to the Housing Element
1
' July 17, 1992
1
1
' Cotton/Beland/Associates, Inc.
747 E. Green Street, Suite 400
' Pasadena, CA 91101
619 S. Vulcan Avenue, Suite 205
Encinitas, CA 92024
CITY OF HUNTINGTON BEACH
PRESERVATION OF ASSISTED HOUSING:
' ANALYSIS AND PROGRAMS
TABLE OF CONTENTS
Section Page
INTRODUCTION 1
INVENTORY OF UNITS AT RISK 2
COST ANALYSIS 10
COST COMPARISONS 18
RESOURCES FOR PRESERVATION 19
QUANTIFIED OBJECTIVES 22
PROGRAMS FOR PRESERVATION 22
1
' Time Frame: At least one year prior to subsidy termination, as identified in the
schedule presented for monitoring units at risk.
' Responsible Agency: Department of Community Development.
Funding Source: Department Budget, CDBG.
' J Encourage Project Owners to Participate in Section 8 Program: If detailed
g P 8�'
analysis and negotiation with projects owners indicate that long-term rent
restrictions cannot be secured on the units, the City will encourage owners to
participate in the Section 8 rent subsidy program. The City will act as the liaison
between the County Housing Authority and the "at risk" project owners. The
' City will target this program effort to projects such as Rivermeadows and
Huntington Village where differentials in rental rates between restricted and
market rate units are small.
Time Frame: Continually monitor status of extension of low-income use
restrictions and encourage property owners to participate in the
County Housing Authority Section 8 rent subsidy program
immediately upon notification of owners' decision to discontinue
low-income use.
' Responsible Agency: Department of Community Development.
' Funding Source: Department Administrative Budget.
Assist Tenants of Existing Rent-Restricted Units to Obtain Priority Status on
' Section 8 Waiting List: The Orange County Housing Authority has established
three categories of priority applicants to receive Section 8 certificates: 1) evicted
or homeless households; 2) households living in substandard housing units; and 3)
' households paying more than 50 percent of income for rent and utilities. The
City will assist tenants of "at risk" units to obtain priority status if there were a
conversion to market rate and if tenants' income and housing costs meet
eligibility requirements.
' Time Frame: Continually monitor status of extension of low-income use
' restrictions and assist tenants to apply for priority status
immediately upon notification of owners' decision to discontinue
low-income use.
Responsible Agency. Department of Community Development.
Funding Source: Department Administrative Budget.
25
•NOTICE OF PUBLIC HEARING
HOUSING ELEMENT AMENDMENT NO. 92-1/ Negative Declaration No. 92-25
(Preservation of Assisted Housing)
NOTICE IS HEREBY GIVEN that the Huntington Beach City Council will
hold a public hearing in the Council Chamber at the Huntington Beach
Civic Center, 2000 Main Street, Huntington Beach, California, on the
date and at the time indicated below to receive and consider the
statements of all persons who wish to be heard relative to the
application described below.
DATE/TIME: Monday, November 16, 1992, 7:00 PM
APPLICATION NUMBER: Housing Element Amendment No. 92-1/Neg. Dec.
92-25
APPLICANT: City of Huntington Beach
LOCATION: City-wide
ZONE: N/A
REQUEST: To amend the Housing Element to include on evaluation
of the potential for currently rent restricted low
income housing units to convert to non low income
housing and propose programs to preserve or replace
those units. This amendment will bring the Housing
Element into compliance with Government Code Section
65583(a) (8) , (c) (6) .
ENVIRONMENTAL STATUS: Negative Declaration No. 92-25 has been
prepared and advertised for a 30 day
comment period, which expired on July 17,
1992 . This Negative Declaration was
considered by the Planning Commission and
will also be considered by the City Council.
COASTAL STATUS: Not applicable
ON FILE: A copy of the proposed request is on file in the
Community Development Department, 2000 Main Street,
Huntington Beach, California 92648, for inspection by the
public. A copy of the staff report will be available to
interested parties at City Hall or the Main City Library
(7111 Talbert Avenue) after October 28, 1992.
ALL INTERESTED PERSONS are invited to attend said hearing and
express opinions or submit evidence for or against the application
as outlined above. If you challenge the City Council ' s action in
court, you may be limited to raising only those issues you or
someone else raised at the public hearing described in this notice,
or in written correspondence delivered to the City Clerk at, or
prior to, the public hearing. If there are any further questions
please call Greg Brown, Development Specialist at 536-5271.
Connie Brockway, City Clerk
Huntington Beach City Council
2000 Main Street
(1646D) Huntington Beach, CA 92648 (714) 536-5227
t . . • /� i 2=
REQUEST FOR CITY COUNCiPNCTION
?uLvc 4earin eA
(�
��S• �/��Date November 16, 1992
Submitted to: Honorable Mayor and City Council Members
Submitted by: Michael T. Uberuaga, City Administrator6W
Prepared by: Michael Adams, Director of Community Developme
Subject: HOUSING ELEMENT AMENDMENT NO. 92-1/NEGATIVE DECLARATION
NO.92-25--UNITS "AT RISK"
Consistent with Council Policy? [X] Yes [ ] New Policy or Exception X4,j W—
Statement of Issue, Recommendation,Analysis, Funding Source, Alternative Actions, Attachments:
STATEMENT OF ISSUE:
Housing Element Amendment No. 92-1 is an analysis of the potential
for rent restricted low income housing units to convert to non-low
income (or "market") housing. The analysis also proposes programs
to preserve, or replace, those units. This amendment is required by
Government Code Section 675583(a) (8) , (c) (6) .
RECOMMENDATION•
Staff Recommendation:
Motion to: Approve Negative Declaration No. 92-25 and approve
Housing Element No. 92-1 with findings .
PLANNING COMMISSION ACTION ON SEPTEMBER 15, 1992:
A MOTION WAS MADE BY RICHARDSON, SECOND BY SHOMAKER, TO APPROVE
NEGATIVE DECLARATION NO. 92-25 BY THE FOLLOWING VOTE:
AYES: Inglee, Bourguignon, Richardson, Shomaker, Dettloff,
Newman, Leipzig
NOES: None
ABSENT: None
ABSTAIN: None
MOTION PASSED•
A MOTION WAS MADE BY RICHARDSON, SECOND BY SHOMAKER TO APPROVE THE
DRAFT HOUSING ELEMENT AMENDMENT BY THE FOLLOWING VOTE:
AYES: Inglee, Bourguignon, Richardson, Shomaker, Dettloff,
Newman, Leipzig
NOES: None
ABSENT: None
ABSTAIN: None
i
PIO 5/85
FINDINGS FOR APPROVAL - HOUSING ELEMENT AMENDMENT NO, 92-1:
1. Section 65583 of the California Government Code requires that the
City' s Housing Element be amended to include an analysis of
housing units at risk of conversion from low income to market
rate and that programs be proposed to preserve or replace those
units .
2. Housing Element Amendment No. 92-1 has been prepared in order to
address at risk housing units and propose programs to preserve or
replace those units .
3 . Housing Element Amendment No. 92-1 has been prepared in
accordance with State Housing Element and General Plan Amendment
Guidelines.
4 . Housing Element Amendment No. 92-1 is necessary to bring the
Housing Element into compliance with Government Code Section
65583 .
ANALYSIS•
The Huntington Beach Housing Element was adopted in July, 1990 as
part of the 1989-1994 update cycle for jurisdictions in the SCAG
region. The State Department of Housing and Community Development
has determined the Element to be in compliance with State law.
This report amends the Huntington Beach Housing Element, and will be
integrated within the Housing Element. The purpose of this amendment
is to bring the Housing Element into compliance with a recent
amendment of housing element law, codified in Government code Section
65583 (a) (8) , (c) (6) . Under this law, jurisdictions must evaluate
the potential for currently rent restricted low-income housing units
to convert to non-low income housing and propose programs to preserve
or replace those units.
Consistent with State requirements, this report includes the
following five (5) components:
1. An inventory of restricted low-income housing projects in the
City and their potential for conversion;
2 . An analysis of the costs of preserving and/or replacing the
units "at-risk" and a comparison of these costs;
3 . An analysis of the organizational and financial resources
available for preserving and/or replacing the units "at-risk" ;
4 . Quantified objectives for the number of "at-risk" units to be
preserved; and
5. Programs for preserving the "at-risk" units .
The State requires that the analysis include projects that are at
risk of converting during the next five (5) year Housing Element
update periods. For Huntington Beach, this period extends from July
1, 1989 to July 1, 1999 .
RCA 11/16/92 - 2 - (4657d)
The inventory of at risk units include all multi-family rental units
assisted under federal, state, and/or local programs, including HUD
programs, state and local bond programs, redevelopment programs, and
local in-lieu fees, inclusionary, density bonus, or direct
assistance programs. The _inventory covers all units that are
eligible to change to non-low income housing uses due to termination
of subsidy contract, mortgage prepayment, or expiring use
restrictions . The inventory was compiled by interviews with City
staff, the County Housing Authority, HUD, and review of "Inventory
of Federally Subsidized Low-Income Rental Units at Risk of
Conversion" (California Housing Partnership Corporation) , and "The
Use of Housing Revenue Bond Proceeds - 1990" , (California Debt
Advisory Commission) .
Description of At-Risk Projects
Huntington Beach has three (3) federally assisted rental housing
projects .at risk of conversion prior to July, 1999 . Two (2)
projects, Huntington Villa Yorba and Huntington Beach Gardens, are
subsidized under the Section 236(J) (1) program and are eligible for
mortgage prepayment. Under this program, projects receive reduced
interest mortgage loans from HUD in exchange for low-income use
restrictions on all units in the project. Projects carry 40 year
mortgages with the option to prepay the loan after 20 years and opt
out of the affordability controls. The earliest potential
conversion date for the 198-unit Huntington Villa Yorba project is .
May, 1992 and April, 1996 for the 66-unit Huntington Beach Gardens
project.
The other "at-risk" HUD project in Huntington Beach is Wycliffe
Gardens . Wycliffe Gardens is a 185-unit Section 231 elderly housing
project which is not eligible to prepay its mortgage. However,
Wycliffe Gardens maintains a Section 8 contract for all 185 units .
The Section 8 contract is due to expire in March, 1996 .
In addition to the three (3) at risk HUD projects, Huntington Beach
has five (5) rental housing projects assisted under the City' s
Multi-Family Mortgage Revenue Bond Program -- Seabridge Villas,
Harbor Gateway, Rivermeadows, Huntington Village, and Huntington
Breakers. Under this program, the City provides preferential
financing for multi-family rental housing projects in exchange for
ten (10) year low-income use restrictions on 20 % of the units in
each project. According to the bond agreements, at total of 211
units in the City' s five (5) bond projects are rent-restricted,
although 240 units are currently renting to lower income
households . The 1992 low-income limit utilized in the bond projects
is based on a HUD median family income of $52,700 for the
Anaheim-Santa Ana region.
Low-income units in the City' s five (5) bond projects are subject to
the following expiration dates :
Project Project No. of Units Potential
Name Address At Risk Conversion Date
Seabridge Villas 20251 Cape Coral Lane 69 2/95
Harbor Gateway 4691 Warner Avenue 20 10/95
Rivermeadows 8945 Riverbend 31 10/95
Huntington Village 16171 Springdale Ave. 23 11/96
Huntington Breakers 21270 Beach Blvd. 68 7/99
RCA 11/16/92 - 3 - (4657d)
Preservation Costs
Preservation of the at risk units can be achieved in different ways
depending on the financing mechanisms used and the legal provisions
and incentives regulating the affordability of these units . Options
available for the preservation of the at-risk units include: 1)
preserve the projects as low-income by offering additional federal
incentives to the projects; 2) facilitate the transfer of ownership
of these projects to or purchase of similar units by non-profit
organizations; 3) refinance mortgage on projects to extend
affordability controls; or 4) assist qualified tenants in obtaining
Section 8 certificates from the Orange County Housing Authority.
All but the refinancing option are applicable to HUD prepayment
eligible projects . At-risk units primarily subsidized with Section 8
contracts may be preserved by transferring ownership, purchasing
similar units, or using Section 8 certificates. At-risk units in
City mortgage revenue bond projects may be preserved by purchasing
similar units, using Section 8 certificates, or refinancing the bonds.
A summary of the four (4) major preservation options are as follows :
Continue as Low-Income with Federal Incentives - Under LIHPRHA, HUD
mortgage prepayment eligible projects may choose to continue as
low-income in exchange for additional federal incentives . Incentives
include: rent increases to guarantee an eight (8) percent return on
project investment; Section 9 contract to cover both very low and
low-income tenants, and 241(f) equity take-out loan. Once extended,
affordability controls on the project will remain effective for the
remaining useful life (approximately an additional 50 years) of the
project .
Transfer Ownership/Purchase of Similar Units - Another preservation
option is to transfer ownership of the projects with at risk units to
community-based non-profit or government entity, such as the Orange
County Housing Authority. By transferring the ownership of these
projects to non-profit housing organizations, low-income use
restrictions can be secured, and the projects will become eligible
for a greater range of government assistance programs .
Refinance Mortgage Revenue Bonds - Another option to preserve the
low-income use restrictions on the five (5) City multi-family housing
bond projects is to refinance the mortgage revenue bonds that were
issued to the respective owners . If refinanced, the projects would
be required by the 1986 Tax Reform Act to commit their 20% low-income
units for the greater of 15 years or as long as the bonds are
outstanding .
Rent Subsidy - When the low-income use restrictions on the at-risk
units expire and units are converted to market rate, Section 8
certificates can be used to subsidize the property owners for
extending the affordability of those units . Under the Section 8
certificate program, HUD pays owners the difference between what
tenants can pay (defined as 30 percent of household income) and what
HUD and the local Housing Authority estimate to be Fair market Rent
on the unit.
RCA 11/16/92 - 4 - (4657d)
•
Policies and Programs
Two . (2) major policies are suggested to guide the presentation of
at-risk units :
Policy 1 - Attempt to preserve low-income housing in the City that
is at risk of converting to market rate by monitoring the status of
prepayment-eligible and bond-financed projects, and identifying
financial and organizational resources available to preserve these
units.
Policy 2 - Pursue a program that would offer developers an
opportunity to purchase at-risk units as a means of satisfying
affordable housing requirements that may be conditioned upon their
projects .
In addition to these plans, several programs have been developed that
could provide a conceptual framework for presentation. At this
point, these programs are purposefully vague in order that they can
be expanded, changed, or deleted during the 1994 Housing Element
update.
Monitor Units at Risk - Regularly monitor the status of the at-risk
projects. Pursuant to Government Code Section 65863 . 10, the City
will inform the tenants of the status of their projects at least one
(1) year in advance of the potential conversion date.
Pursue Bond Refinancing - Seabridge Villas, Harbor Gateway,
Rivermeadows, Huntington Village, and Huntington Breakers are
financed under the City' s Mortgage Revenue Bond Program. The City
will coordinate with the owners of at risk projects to encourage bond
refinancing to extend low income use restrictions for a minimum of 15
years starting from the issuance of the initial bonds.
Work with Potential Priority Purchasers - Establish contact with
public and non-profit agencies interested in purchasing and/or
managing units at risk to inform them of the status of at-risk
projects. Where feasible, provide technical assistance to these
organizations with respect to financing. Coordinate with the Orange
County Affordable Housing Clearinghouse in assisting priority
purchasers to obtain financing.
Facilitate Tenant Purchase of Units - Tenant purchase of at-risk
units is a feasible preservation option if owners of Huntington Villa
Yorba and Huntington Beach Gardens file Notices of Intent to indicate
the desire to sell the projects or negotiation between the owners and
HUD fail to preserve the two (2) projects as low-income housing. The
City will facilitate tenant purchase of the two (2) projects as .
low-income housing. The City will facilitate tenant purchase of the
two (2) projects by providing technical assistance in financing,
organizing tenant associations as priority purchasers, coordinating
with non-profit housing organizations, and encouraging tenant
participation in the prepayment process. The City will begin working
with .the Orange County Affordable Housing Clearinghouse to establish
a program to provide preferential financing, and potentially down
payment assistance, for low-income tenants wishing to purchase their
units .
RCA 11/16/92 - 5 - (4657d)
w 1 ,1 • •
Encourage Project Owners to Participate in Section 8 Program - If
detailed analysis and negotiation with projects owners indicate that
long-term rent restrictions cannot be secured on the units, the City
will encourage owners to participate in the Section 8 rent subsidy
program. The City will act as the liaison between the County Housing
Authority and the at-risk project owners. The City will target this
program effort to projects such as Rivermeadows and Huntington
Village where differentials in rental rates between restricted and
market rate units are small.
Assist Tenants of Existing Rent-Restricted Units to Obtain Priority
Status on Section '8 Waiting List - The Orange County Housing
authority has established three (3) categories of. priority applicants
to receive Section 8 certificates: 1) evicted or homeless
households; 2) households living in substandard housing units; and
3) households paying more then 50 percent of income for rent and
utilities. The City will assist tenants of at-risk units to obtain
priority status if there were a conversion to market rate and if
tenants ' income and housing costs meet eligibility requirements .
Tenant Education - The City will work with tenants of at-risk units
in danger of conversion. The City will provide tenants with
education regarding potential tenant purchase- of buildings and act as
a liaison between tenants and non-profits potentially involved in
constructing or acquiring replacement housing. The City will also
provide tenants in at-risk projects information regarding Section 8
rent subsidies through the Orange County Housing Authority.
The likelihood of these programs being successful is not known by
staff, as no local communities have applied these programs in a "real
time" situation; that is, localities with these subsidized units are
anticipating their conversion within the next one (1) to two (2)
years, but have not already implemented programs like these. Staff
is following the very credible advice of the consultant and the .
Department of Housing and Community Development (HCD) . In fact., HCD
gave preliminary approval of the amendment on September 4, 1992.
FUNDING SOURCE:
No funds required.
ALTERNATIVE ACTIONS:
Continue City Council Action to November 2, 1992 with the public
hearing open for the Draft Housing Element Amendment and Negative
Declaration No. 92-25.
ATTACHMENTS
1. Resolution No.
2 . Draft Housing Element Amendement
3 . Letter from the State Department of Housing and Community
Development Dated September 3, 1992.
4 . Negative Declaration No. 92-25 Dated September 15, 1992 .
MTU:MA:HS:GB:ee
RCA 11/16/92 - 6 - (4657d)
� 4 t
STATE OF CAUFORNIA -
County of Orange
I am a Citizen of the United States and a
resident of the County aforesaid; I am over the
age of eighteen years, and not a party to or
interested in the below entitled matter. I am a �eS� ��6 — R-�O 7-n
principal clerk of the HUNTiNGTON BEACH
INDEPENDENT, a nswsaaper of gensral
circulation, panted and published in the City of -� -,-
Q 0`1
PUBLIC NOTICE- I ration was�4'considered by
Huntington B;isach County of Orange State Of NOTICE OF the Planning Commission;
.� andEwilisalsotbe considered.
w RESCHEDULING OF b&the Crty.Council I
and that attached Notice is a true and r PUBUC`HEaRING I COASTAL_:STATUS' Not
Caliifomia, a -.
HOUSING ELEMENTS applicable ,
complete co as was anted and published In tAe a lve NT 'NO 92=o. ON FILE A copy of the
p PY p • pV !Negative Declaration No I proposed request is on file
92-25'Preservation of As `"
( m the Commundy Develop
the Huntington Beach and Fountain Valley i'!.ledHousing) i ,meat Department _2000
NOTICE IS HEREBY Main^!Street Huntington
issues of said newspaperto wit the issue(s) of: GIVEN that the Huntington ,Beach -.California 92648!
Beach CityCouncil Will 'for ins•ec9 ri- the pub=
p...._ x- 4� j
hold a public hearing in the lic:.A copy;of the staff sre
Council Chamber at the port will_lie avallable'to in-:
Huntington Beach Civic teeested artlea at City Hall
Center; 2000 Main Street! p
or the =Main City- Library',
Huntington.-Beach; Califor i (71:11 Talbert Avenue)after_
nia, on the.date and at the °October28,:1992 :
time;mdicafed of ail per i ALL INTERESTED,;.PER
soils"Who wish to be heard SONS areanvded to attend
relative -to the application said hearin' and ox reps
October 29 r 1992 described•below. Opinionsr!o, submit'qvi-
DATElrIME: NEW-DATE; ,d_ence for aor .against S`the
i Monday agphcatjon; as4 outll4cli
November f, 1 1992, 7 00 "above If you challenge the!
PM.'(HAD BEEN ORIGI, City Council§ action;in,
NALLY_SCHEDULED FOR court you`'may9betlimited,
NOVEMBER 2,1992) to raising only those Issues.
APPLICATION NUMBER: you or someone•'-else
Housing Element Amend; raised,at.tiie public hearing:
ment.No. 92-1/Neg:- Dec: described in this;notice:or,
92'25'r ; in written corre'spondence
APPLICANT: City of Hun; I
thO%City Clerk!
tin ton,Beach — to the
LOCATION:City-wide a3o public�
ZONE N/A Fanng If,there are a REQUEST. To ame nd the rther questions pleat
Housing Element to Include call'Greg=,Brown; Develop
on evaluation of the poten j iment Specialist at-53&
tial for currently rent re 5271,. ,.
stricted low housing urtrts Connie Brockway,
to convert to non low;in�- City Clerk
I declare, under perjury,enalty of that the come housing and propose
Pprograms to preserve or re= Huntington Beach
foregoing is true and correct place' those units. Thin City Coundit
ameniJment will bring the' 2Q00itClYl il[W Street,
Housing Element Into-Win
in Huntington B@9Ch;'C/1
piano; with Go%tgnrr enti fb2648(714)536.5227.
Executed on October 2 9 r 19g?- Code,Section 65583(a) (8) £p b11R69 unt ngtonj
(c)(6): � BTALSfA1 each Fouhtam,Valley in
at Costa Me a, Cailfomla. TUSV�Negatl Negative arat onj dependentff October r29
No: 92-25 has been pre 1992
pared and advertised for al t0545
30 day-,,comment period,] -
which-expired on_July i,7,+
'1992.-This Neaative_Decla-
Signsture
PROOF OF PUBLICATION
d -
:F
1 CITY OF HUNTINGTON BEACH
PRESERVATION OF ASSISTED HOUSING:
' ANALYSIS AND PROGRAMS
1 LIST OF TABLES
Page
Table 1 Assisted Housing Inventory 3
Table 2 Monthly Basic Rents for Section 8 Units 9
Table 3 Monthly Rents for Mortgage Revenue Bond Units 10
Table 4 Costs of Transferring Ownership/
Purchase of Similar Units - 13
Table 5 Estimated Tenant Profile of At-Risk Units 16
Table 6 Replacement Costs Per Unit 17
LIST OF FIGURES
Figure 1 Process for Prepayment Eligible Projects
Under LIHPRHA 7
1
1
1
1
1
1
1
INTRODUCTION
The Huntington Beach Housing Element was adopted in July, 1990 as part of the
1989-1994 update cycle for jurisdictions in the SCAG region. The State
Department of Housing and Community Development has determined the
Element to be in compliance with State law.
This report amends the Huntington Beach Housing Element, and will be
integrated within the Housing Element upon the next periodic review of the
Element in 1994. The purpose of this amendment is to bring the Housing
' Element into compliance with a recent amendment of housing element law,
codified in Government Code Section 65583 (a)(8), (c)(6). Under this law,
jurisdictions must evaluate the potential for currently rent restricted low-income
' housing units to convert to non-low-income housing and propose programs to
preserve or replace those units.
Consistent with State requirements, this report includes the following five
components:
1. An inventory of restricted low-income housing projects in the City and
their potential for conversion;
2. An analysis of the costs of preserving and/or replacing the units "at-
risk" and a comparison of these costs;
' 3. An analysis of the organizational and financial resources available for
preserving and/or replacing the units "at risk";
1 4. Quantified objectives for the number of "at-risk" units to be preserved;
5. Programs for preserving the at-risk units.
The State requires that the analysis include projects that are at risk of converting
during the next two five-year Housing Element update periods. For Huntington
Beach, this period extends from July 1, 1989 to July 1, 1999.
' 1
i
INVENTORY OF UNITS AT RISK
This section identifies the low income housing units at risk of converting to non-
low income housing uses prior to July, 1999 and evaluates the likelihood of
conversion.
The inventory includes all multi-family rental units assisted under federal, state,
and/or local programs, including HUD programs, state and local bond programs,
redevelopment programs, and local in-lieu fees, inclusionary, density bonus, or
' direct assistance programs. The inventory covers all units that are eligible to
change to non-low income housing uses due to termination of subsidy contract,
mortgage prepayment, or expiring use restrictions. The inventory was complied
by interviews with City staff, the County Housing Authority, HUD, and review of
"Inventory of Federally Subsidized Low-Income Rental Units at Risk of
Conversion" (California Housing Partnership Corporation), and "The Use of
Housing Revenue Bond Proceeds - 1990", (California Debt Advisory
1 Commission).
Table 1 presents an inventory of all low-income assisted rental housing in
Huntington Beach. The City has nine subsidized rental housing projects in its
jurisdiction; eight of these projects contain units that are eligible to convert to
non-low income uses before July 1, 1999. Only one project - Huntington Villa
Yorba - is at risk of conversion prior to July 1, 1994.
' Surfside Villas is a 75-unit family housing project assisted under HUD's Section
221(D)(4) program with a 20-year Section 8 contract due to expire in the year
2002. Projects financed under the Section 221(D)(4) market rate program alone
have no binding income use restrictions. Affordability for Surfside Villas is,
however, controlled by the 20-year Section 8 contract. When the contract expires
' in the year 2002, the owner of Surfside Villas can choose to opt out of Section 8
program as long as a Notice of Intent is filed one year prior to contract
expiration. The conversion potential and costs of preservation associated with
' this project will be analyzed in detail in the next Huntington Beach housing
element update.
! 2
�r rr rr r �■r rr rr ■r r ■r r it �- �..--�.. - or M M �r
TABLE 1
CITY OF HUNTINGTON BEACH
ASSISTED HOUSING INVENTORY
Length of
Affordability Earliest Total #
Type(s) of Controls Potential # of Units of Units Tenant Type
Proj. Name Owner: Gov't (including Conversion Subject to in (i.e. Elderly, At-Risk Units Date
Address Name, Address Assistance Sec. 8) Date(s) Conversion Project Family) Bedroom Mix Built Condition
Huntington Villa Yorba Huntington Villa Assoc. HUD 40-year mortgage; 9/93 198 198 Family 21 -1br 1965 Goo
16000 Villa Yorba 1800 Ave of the Stars, 236(J)(1) 20-year prepay- 157 -2br ile
Huntington Beach Ste. 1400 ment option 20 3br
CA 92648 Los Angeles, CA
90067
Huntington Beach Huntington Beach HUD 40-year mortgage; 4/15/96 66 66 Family 15- 1 br 1975 Good
Gardens Gardens 236(J)(1) 20-year 33-2br
16900 Algonquin c/o Southwest prepayment option 18-3br
Huntington Beach Development Co.
CA 92648 260 Maple Ct.
Ste. 205
Ventura, CA 93003 Section 8 6/25/94 6 66
Wycliffe Gardens Wycliffe Assoc. HUD 231 40-year mortgage; — — 185 Elderly 185-1br 1981 Very Good
18765 Florida Ave. 202 S. Prospect Ave. No prepayment
Huntington Beach Orange, CA 92669 option
CA 92648
Section 8 15-year contract 3/12/96 185 185
Seabridge Villas JMB Institutional City Multi- 10-year 2/95 69 344 Family 56-1br 1984 Very G
20251 Cape Coral Ln 875 N. Michigan Ave., Family 13-2br
Huntington Beach Ste. 3900 Revenue
CA 92648 Chicago, II 60611 Bond
Harbor Gateway Lincoln Property City Multi- 10-year 10/95 20 102 Family 14-1br 1986 Very Good
4691 Warner Ave. 17011 Beach Blvd. Family 6-2br
Huntington Beach Ste. 1400 Revenue
CA 92648 Huntington Beach, CA Bond
92647
� � � � � � � � � � r � �--....--.■Its.-- was �111 � �
TABLE 1
CITY OF HUNTINGTON BEACH
ASSISTED HOUSING INVENTORY
(continued)
Length of
Affordability Earliest Total #
Type(s) of Controls Potential # of Units of Units Tenant Type
Proj. Name Owner: Gov't (including Conversion Subject to in (i.e. Elderly, At-Risk Units Date
Address Name,Address Assistance Sec.8) Datg(s) Conversion Projject Family) Bedroom Mix Built Conditio
Rivermeadows Fritz.Hoelscher City Multi- 10-year 10/95 31 152 Family 31 -1 br 1985 Very Goo
8945 Riverbend 4665 MacArthur Ct. Family
Huntington Beach Ste.275 Revenue
CA 92648 Newport Beach, CA Bond
92660
Huntington Village William Lyon &Assoc. City Multi- 10-year 11/96 23 114 Elderly 23-1br 1986 Very Good
16171 Springdale 4921 Birch St. Family
Huntington Beach Ste 101 Revenue
CA 92648 Newport Beach, CA Bond
92660
Huntington Breakers c/o August Financial City Multi- 10-year 7/99 68 342 Family 25-studio 1984 Good
21270 Beach Blvd. Corp. Family (Project refinanced 36-1 br
Huntington Beach P.O. Box 22630 Revenue in 1989) 7-2br
CA 92648 Long Beach, CA 90801 Bond
Surfside Villas Goldrich &Kest HUD — — 0 75 Family 31 -2br 1982 Very Go
7795 Neptune 5150 Overland Ave. 221(D)(4) 22-3br
Huntington Beach Culver City, CA 22-4br
CA 92648 902350 Section 8 20-year contract 6/15/02 75 75
Source: Compiled by Cotton/Boland/Associates,April, 1992.
' Description of At-Risk Projects
1 Huntington Beach has three federally assisted rental housing projects at risk of
conversion prior to July, 1999. Two projects -- Huntington Villa Yorba and
Huntington Beach Gardens -- are subsidized under the Section 236(J)(1) program
and are eligible for mortgage prepayment. Under this program, projects receive
reduced interest mortgage loans from HUD in exchange for low-income use
restrictions on all units in the project. Projects carry 40-year mortgages with the
option to prepay the loan after 20 years and opt out of the affordability controls.
The earliest potential conversion date for the 198-unit Huntington Villa Yorba
project is May, 1993 and April, 1996 for the 66-unit Huntington Beach Gardens
' project.
The other "at-risk" HUD project in Huntington Beach is Wycliffe Gardens.
Wycliffe Gardens is a 185-unit Section 231 elderly housing project which is not
eligible to prepay its mortgage. However, Wycliffe Gardens maintains a Section
8 contract for all 185 units. The Section 8 contract is due to expire in March,
1996.
' In addition to the three at-risk HUD projects, Huntington Beach has five rental
housing projects assisted under the City's Multi-Family Mortgage Revenue Bond
1 Program - Seabridge Villas, Harbor Gateway, Rivermeadows, Huntington Village,
and Huntington Breakers. Under this program, the City provides preferential
financing for multi-family rental housing projects in exchange for ten-year low-
income use restrictions on 20 percent of the units in each project. According to
the bond agreements, a total of 211 units in the City's-five bond projects are
rent-restricted, although 240 units are currently renting to lower income
households. The 1991 low-income limit utilized in the bond projects is based on
a HUD median family income of $52,200 for the Anaheim-Santa Ana region.
1 Low-income units in the City's five bond projects are subject to the following
expiration dates. Seabridge Villas is a 344-unit housing project with 69 units set-
aside for lower income households. Use restrictions on Seabridge Villas are
eligible to expire in February, 1995. Harbor Gateway is 102-unit housing project,
with 20 rent-restricted units. Use restrictions on these units are eligible to expire
in October, 1995. The 152-unit Rivermeadows has 31 rent-restricted units. Use
restriction on this project will expire in October, 1995. Huntington Village is a
114-unit project for elderly. Twenty-three units in Huntington Village are subject
to low-income use restrictions due to expire in November, 1996. Huntington
Breakers is a 342-unit project built in 1984 with 68 rent-restricted units. The
project owner refinanced the bond with the City in 1989, and extended
affordability controls until July, 1999.
1 5
1
Conversion Potential
A total of 660 low-income units (25 studio, 381 one-bedroom, 216 two-bedroom,
' and 38 three-bedroom units) are at risk of losing some form of public rental
assistance in Huntington Beach prior to July, 1999. The likelihood that the "at
risk" units will convert to market rate will depend primarily on the availability
and attractiveness of incentives encouraging their continued use as low-income
housing. This section analyzes the potential for conversion based on the legal
provisions and incentives regulating the affordability of these units.
HUD Mortgage Prepayment Eligible Units: A total of 264 rental units in
Huntington Beach are at risk of converting to non-low-income use through the
' process of prepaying HUD Section 236 loans. Prepayment of Section 236 loans
was regulated by the provisions of the Emergency Low-Income Housing
Preservation Act (ELIHPA), otherwise known as Title II of the Housing and
1 Community Development Act of 1987. This legislation was subsequently
replaced in 1990 by the Low-Income Housing Preservation and Resident
Homeownership Act (LIHPRHA, or Title VI of the National Housing Act of
1990). If the owner was eligible for prepayment before September 30, 1991 and
filed a "Notice of Intent" to prepay between November 1987 and December 31,
1990, then the owner has the option to use either ELIHPA or LIHPRHA.
Project owners must have decided which laws to use by February, 1992. After
this date, owners are only eligible to use LIHPRHA, which became effective on
May 8, 1992. Given the potential conversion dates of Huntington Villa Yorba
' and Huntington Beach Gardens as indicated in Table 1, prepayment of both
projects will be regulated by LIHPRHA.
1 Figure 1 illustrates the process for prepayment eligible projects under LIHPRHA.
Under LIHPRHA provisions, owners of prepayment eligible projects can choose
to retain project ownership in exchange for additional federal incentives, or sell
their properties under a voluntary sale program. Where owners choose to sell,
tenants, non-profit and governmental entities are provided with an exclusive
12-month negotiating period. Prepayment and conversion of the housing to
I non-low-income use can only occur if there is no willing buyer to purchase a
project. A Notice of Intent may be filed up to two years prior to the scheduled
prepayment date to indicate the owner's preliminary decision regarding sale of
property versus stay-in as low-income. Within nine months after filing the Notice
of Intent, the owners must prepare a 'Plan of Action" for submittal to HUD. A
Plan of Action must include: any proposed changes in the mortgage or in the
regulatory agreements; a description of federal, state, and local incentives that
are being requested as part of the effort to own and develop the property; and
any proposed plans to transfer the title of the property and/or sell.
More specifically, LIHPRHA provides the owners of eligible projects an
opportunity to receive additional federal incentives for projects, enabling them to
raise rents and refinance a portion of their equity, while extending low-income
' use restrictions for the remaining useful life of the project. The useful life of a
6
1
Huntington Villa Yorba(Section 236(J)(1))
Huntington Beach Gardens (Section 236(J)(1))
if
tri c 7 tions
Option 1: Continue low-income restrictions
with HUD incentives
Option 2: Sell to non-profit
ofif!
t or government entity
Option 3: Prepay mortgage and convert to
market rate housing
9 Months
1
........... ....... ............. .............................................
................................................ ....................... ........... ... .............
Rent increases
-Additional Section 8 subsidies
-241(f) equity take-out loan 12 Months
1 .:::.::.::::..i.r;�.w:i>,>;r:r;;:<v.:i.»>:f>;:::.:..>A:::.»r,.:.>::.<:..:.>;>F.rr<..,;.,.,�:,<:;:
6 months for HUD and Public Review
Renegotiate
to extend income use Negotiations with No bona fide
restriction for the useful[ HUD fail offer
life of the building
Note: Refer to page 7 for discussion of D
LIHPRHA- Low Income Housing
Preservation and Resident
Homeownership Act r .te hou,
S!. •
re.15d
Figure 1
Process for Prepayment Eligible
Projects Under LIHPRHA
' project refers to the expected physical life of a building with normal maintenance
and repairs, as well as replacement of utilities such as plumbing. HUD officials
' have indicated that the useful life of a building is usually 70 years. Thus, use
restrictions will be extended for an additional 50 years if owners decide to
maintain the projects as low-income under LIHPRHA. HUD will establish
standards and procedures for determining when the useful life of a building
expires. Under LIHPRHA, the difference between the tenants' portion of the
rent (30 percent of income) and market rent in Section 236 projects is covered
' by a Section 8 contract for both very low and low-income tenants.
Section 8 Units: Huntington Beach Gardens maintains a Section 8 contract for
six of the project's 66 units. Potential expiration date for this Section 8 contract
is in June, 1994. Wycliffe Gardens maintains a Section 8 contract for all of the
project's 185 units. The Section 8 contract for Wycliffe Gardens will be eligible
to expire in March, 1996.
Basic rent levels are established for each project with a Section 8 contract with
HUD. Basic rent is the maximum Fair Market Rent for an apartment unit. It is
' the maximum amount of rent an owner can collect on a unit from 30 percent of
the tenant's income combined with Section 8 subsidies from HUD. As shown in
Table 2, both Huntington Beach Gardens and Wycliffe Gardens are receiving
' substantially lower basic rents than average market rate rents in the City or than
the maximum Fair Market Rents for Orange County. The projects can
potentially command higher rents if the owners decide to opt out of the Section
8 program and convert to market rents.
The underlying Section 236 mortgage on Huntington Beach Gardens is subject to
LIHPRHA (described above). Under LIHPRHA, project owners can request
additional financial incentives from HUD if they choose to extend the length of
affordability controls on the project. As long as use restrictions on the Section
' 236 mortgage or an approved Plan of Action pursuant to LIHPRHA are in
effect, the Section 8 contract is likely to be renewed. Therefore, the potential
expiration of the Section 8 contract for Huntington Beach Gardens will be
' dependent upon the negotiations on the Plan of Action between HUD and the
property owners.
' Wycliffe Gardens is funded under HUD's Section 231 program. Low-income use
restrictions on the project are locked-in for the full 40-year mortgage term which
is not due to expire until April, 2021. Also, as the project is owned by a non-
profit entity, its long-term affordability is fairly secure. Discussion with the
management of Wycliffe Gardens indicates that the project owners will continue
to renew the Section 8 contract.
1
1 8
TABLE 2
MONTHLY BASIC RENTS FOR SECTION 8 UNITS
1
Basic Rent
' (Maximum Fair Market Rent (2)
by Project) Huntington (3)
Beach Orange County
Huntington Average Market Maximum Fair
Unit Size Beach Wycliffe Rents Market Rent
Gardens 1 Gardens 1
One-bedroom $281 $527 $755-$990 $ 764
Two-bedroom ,$317-$329 $700-$1,025 $ 900
Three-bedroom $361-$510 ---- $850-$1,260 $1,125
tSource: Compiled by Cotton/Beland/Associates, May, 1992.
' Notes: (1) As reported by building managers of Huntington Beach Gardens and Wycliffe
Gardens, May, 1992.
(2) Survey of rental rates by the City of Huntington Beach, July, 1992. Beach.
' (3) Orange County Housing Authority, May, 1992. This HUD Fair Market Rents
schedule includes utility costs to be paid by tenants.
Mortgage Revenue Bond Units: A total of 211 low-income units (25 studio, 160
one-bedroom, and 26 two-bedroom units) in five bond projects are at risk of
converting to non-low-income use prior to July, 1999. Table 3 presents the
' differentials in rental rates between the rent-restricted and market-rate units in
each of the five multi-family mortgage revenue bond projects in Huntington
Beach. By analyzing the potential increase in rents achievable through
conversion to market rate, the relative incentive for conversion can be assessed.
The difference between rental rates in market rate and rent-restricted units are
' more significant in Seabridge Villas, Harbor Gateway, and Huntington Breakers
than in Rivermeadows and Huntington Village. Rent differentials between
restricted and unrestricted units are most significant in Seabridge Villas, ranging
' potentially from $175 to $275 for a one-bedroom unit and $190 to $325 for a
two-bedroom unit. Rent differentials in Huntington Breakers can potentially
range from $110 for a studio unit, $150 to 175 for a one-bedroom, and $160 to
$185 for a two-bedroom units. In Harbor Gateway, the maximum rent
differential is $150 for a one-bedroom unit. Given the rental rates shown in
Table 3, there are definite monetary incentives for the owners of Seabridge
' Villas, Harbor Gateway, and Huntington Breakers to convert their units to
market rate. If there were a conversion, the economic impacts on the low-
income tenants in these three projects would be significant.
t
9
TABLE 3
MONTHLY RENTS FOR MORTGAGE REVENUE BOND UNITS
i
Rent-Restricted Units (1) Market Rate Units (2)
IProject Studio 1-Bdrm 2-Bdrm Studio 1-Bdrm 2-Bdrm
Seabridge Villas ---- $700 $875 ---- $8754990 $1,06541,200
Harbor Gateway ---- $875 $975 -- $925-$1,025 $1,025
Rivermeadows $750 $790-$860
Huntington Village ---- $710-$725 ---- ---- $7554778 ----
Hun tin ton Breakers $625 $750 $985 $735 $9004925 $1,145-$1,170
Rental Range $625 $700-$875 $8754985 $735 $755-$1,025 $1,02541,200
Source: Compiled by Cotton/Beland/Associates, May, 1992.
Notes: (1) Compiled from Yearly Housing Bond Issuance Reports for Fiscal Year 1990-91, and
updated by telephone interviews with building management of each project.
' (2) Compiled from telephone interviews with building management of each project and
supplemented with information provided by the City of Huntington Beach.
COST ANALYSIS
' The following discussion examines both the cost of preserving the units at risk in
Huntington Beach ,and the costs of producing new rental housing comparable in
' size and rent levels to replace the units which could convert. A cost estimate has
been developed for each option based on information provided from the County
Housing Authority, the project's management company, and local developers.
' Actual costs involved in each option will also depend on the rental and real
estate market situations at the time the low-income use restrictions on the
projects expire.
1 Preservation Costs
Preservation of the at risk units can be achieved in different ways depending on
the financing mechanisms used and the legal provisions and incentives regulating
the affordability of these units. Options available for the preservation of the at-
risk units include: 1) preserve the projects as low-income by offering additional
federal incentives to the projects; 2) facilitate the transfer of ownership of these
projects to or purchase of similar units by non-profit organizations; 3) refinance
' mortgage on projects to extend affordability controls; or 4) assist qualified
' 10
tenants in obtaining Section 8 certificates from the Orange County Housing
Authority.
' All but the refinancing option are applicable to HUD prepayment eligible
projects. At-risk units primarily subsidized with Section 8 contracts may be
preserved by transferring ownership, purchasing similar units, or using Section 8
certificates. At-risk units in City mortgage revenue bond projects may be
preserved by purchasing similar units, using Section 8 certificates, or refinancing
the bonds. The following estimates the costs associated with each option for at-
risk projects in Huntington Beach.
Continue as Low-Income with Federal Incentives: Under LIHPRHA, HUD
mortgage prepayment eligible projects may choose to continue as low-income in
exchange for additional federal incentives. Incentives include: rent increases to
guarantee an eight percent return on project investment; Section 8 contract to
' cover both very low and low-income tenants; and 241(f) equity take-out loan.
Once extended, affordability controls on the project will remain effective for the
remaining useful life (approximately an additional 50 years) of the project.
' HUD has established the Federal Cost Limit to determine a project's eligibility
for full federal incentives. As long as a project's annual preservation rent (eight
' percent return on equity, debt services on rehab loan and HUD first mortgage,
operating expenses, and reserves combined) does not exceed the Federal Cost
Limit, the owner may file a Plan of Action for Full federal incentives. Under
' LIHPRHA., the Federal Cost Limit is currently set at 120 percent of the Section
8 Fair Market Rent or 120 percent of the local market area rent, whichever is
greater.
As previously shown in Table 2, Section 8 Fair Market Rents in Huntington
Beach are substantially lower than market rents. Using Fair Market Rents as
' estimates, monthly Federal Cost Limit for Huntington Villa Yorba is at least
$2,158,128 and for Huntington Beach Gardens is $736,920. 'The actual cost
comparison to determine eligibility for federal incentives will be performed by
HUD officials when the project owners file a Notice of Intent.
Transfer Ownership/Purchase of Similar Units: Another preservation option is
to transfer ownership of the projects with at risk units to community-based non-
profit or government entity, such as the Orange County Housing Authority. By
transferring the ownership of these projects to non-profit housing organizations,
' low-income use restrictions can be secured, and the projects will become eligible
for a greater range of government assistance programs.
' However, transfer of ownership is more likely an option for HUD prepayment.
eligible projects than for City bond projects. Because the bond-financed projects
contain only 20 percent rent-restricted units, it is unlikely that the current owners
would choose to sell these projects at rates affordable to non-profit entities.
' Therefore, with respect to bond-projects, it would be more feasible to purchase
' 11
similar existing units by non-profits. Also, since Wycliffe Gardens is already
owned by a non-profit organization, the following analysis is only relevant to the
' other seven projects with at-risk units.
Assessed value for a piece of property is established primarily for tax purposes.
Re-assessment of property value occurs only when there is a transfer of
ownership; otherwise, inflation on the assessed value is capped at an annual rate
of two percent. Therefore, a property's assessed value is usually lower than its
' current market value. However, with the absence of current market value
information on the at-risk projects, current assessed values shown in Table 4 are
used to establish an order of magnitude reference for estimating preservation
costs.
Given the good condition of the at-risk projects, maintenance costs are likely to
be low. Therefore, it is assumed that rental income and HUD Section 8
' subsidies will defray monthly mortgage and maintenance costs. Under
LIHPRHA, HUD will provide mortgage loan insurance on acquisition loans for
up to 95 percent of the equity to priority purchasers. If, theoretically, Huntington
' Villa Yorba and Huntington Beach Gardens were sold to qualified non-profits
prior to extending the 20-year mortgages with the current owners, total
preservation cost for these two projects would amount to $4,595,047, the sum of
' their valuations. A total downpayment cost of $229,752 would be required -
$158,822 for Huntington Villa Yorba and $70,930 for Huntington Beach Gardens.
Assuming a 10 percent downpayment to purchase existing units similar to the at-
risk units in the bond projects, the potential buyers will need to secure mortgage
loans totaling $15,671,658 and total downpayments of $1,741,296, for the
purchase of units similar to those in Seabridge Villas, Harbor Gateway,
Rivermeadows, Huntington Village, and Huntington Breakers. Table 4
' summarizes the estimated costs associated with transfer of ownership of each
project.
12
i i •
' TABLE 4
COSTS OF TRANSFERRING OWNERSHIP/PURCHASE OF SIMILAR UNITS
' At-Risk Units
Assessed At-Risk Units Mortgage
Project Value Downpayment Loan
Huntington Villa Yorba
' Rent-Restricted Units (100%) $ 3,176,447 $158,822 $ 3,017,624
Huntington Beach Gardens
iRent-Restricted Units (100%) $ 1,418,600 $ 70,930 $ 1,347,670
Seabridge Villas
' Entire Project $38,338,740
Rent-Restricted Units (20%) $ 7,667,748 $766,775 $ 6,900,973
Harbor Gateway
Entire Project $ 8,149,137
Rent-Restricted Units (20%) $ 1,629,827 $162,983 $ 1,466,844
Rivermeadows
Entire Project $16,402,832
Rent-Restricted Units (20%) $ 3,280,566 $328,057 $ 2,952,509
' Huntington Village
Entire Project $ 6,935,141
' Rent-Restricted Units (20%) $ 1,387,028 $138,703 $ 1,248,325
Huntington Breakers
' Entire Project $17,238,920
Rent-Restricted Units (20%) $ 3,447,784 $344,778 $ 3,103,006
' Total Rent-Restricted Units $22,008,000 $1,971,048 $20,036,952
Source: Current assessed values obtained from the Orange County Assessor's Office, May,
1992.
r
' 13
Refinance Mortgage Revenue Bond: Another option to preserve the low-income
use restrictions on the five City multi-family housing bond projects is to refinance
' the mortgage revenue bonds that were issued to the respective owners.
If refinanced, the projects would be required by the 1986 Tax Reform Act to
' commit their 20 percent low-income units for the greater of 15 years or as long
as the bonds are outstanding. City records indicate a bond total of $25,000,000
was issued to Seabridge Villas, $8,165,000 to Harbor Gateway, $10,000,000 to
Rivermeadows, $7,700,000 to Huntington Village, and $16,000,000 to Huntington
' Breakers.
To ensure the affordability of the 211 bond-financed income restricted units in
Huntington Beach, the City can negotiate with the project owners to refinance
the bonds. The costs to refinance each bond would therefore include the
difference in interest rates on the remaining debt between the previous and the
renegotiated bond packages, an issuance cost which amounts to approximately 3
percent of the bond to be paid upfront by the City, and administrative costs.
Project owners may not have a financial incentive to refinance unless the bond
' structures allow for interest rates that are well below rates on the initial bonds,
and are combined with other incentives. More often, property owners prefer to
either sell the property or to seek refinancing opportunities from private lending
' institutions and therefore be able to opt out of affordability controls.
The ten-year use restrictions on the Huntington Breakers low-income units were
initially eligible to expire in 1994. The City refinanced the mortgage on
Huntington Breakers in 1989 and extended the use restrictions on 20 percent of
the units for an additional 5 years until 1999. The City has experience and
' technical expertise in bond refinancing and has expressed the intention to
preserve the at-risk units in bond projects by encouraging bond project owners to
refinance. The City's Redevelopment Housing Set-Aside fund could be used to
refinance mortgage revenue bonds.
Rent Subsidy: When the low-income use restrictions on the at-risk units expire
and units are converted to market rate, Section 8 certificates can be used to
subsidize the property owners for extending the affordability of those units.
Under the Section 8 certificate program, HUD pays owners the difference
between what tenants can pay (defined as 30 percent of household income) and
what HUD and the local Housing Authority estimate to be Fair Market Rent on
the unit.
' Section 8 certificates are only available to very low-income households -
households earning less than 50 percent of the County median income. The 1992
HUD median income for the Anaheim-Santa Ana region is $52,700. Assuming
' the average very low-income household has an income at 30 percent of the
regional median income, the average income of Section 8 recipients in Orange
County would be $15,810. Under these assumptions, monthly housing costs
affordable to Section 8 recipients are estimated to be approximately $395 (based
14
•
on HUD's definition of affordable housing costs as 30 percent of household
income).
' According to the Orange County Housing Authority, Fair Market Rent is $630
for a studio unit, $764 for a one-bedroom unit, $900 for a two-bedroom unit, and
' $1,125 for a three-bedroom unit. Thus, the difference between housing cost
affordable to very low-income households and the Fair Market Rent is $235 for a
studio unit, $369 for a one-bedroom unit, $505 for a two-bedroom unit, and $730
' for a three-bedroom unit.
Because Section 8 certificates are only available to very low-income households,
use of Section 8 subsidies as a means of extending affordability controls on the
City's at-risk units would not benefit tenants that are low-income. Table 5
estimates the number of very low income tenants in each at-risk project.
Approximately half (328) of the rent-restricted units are currently occupied by
very low-income households. Given the bedroom mix in each project and the
distribution of very low-income households as shown in Table 5, there are an
estimated four studio, 227 one-bedroom, 85 two-bedroom, and 12 three-bedroom
rent-restricted units currently occupied by very low-income households. Section 8
subsidies required to maintain the affordability of these units would be
approximately $136,388 monthly, or $1,636,656 annually.
Furthermore, the Orange County Housing Authority Section 8 program has a
waiting list of over 15,500 applicants and a waiting period of two to eight years.
' The County Housing Authority Section 8 program has closed applications since
November, 1991, though it plans to reopen later this year.
1
15
•
tTABLE 5
ESTIMATED TENANT PROFILE OF AT-RISK UNITS
Total Lower-
Very Low-Income Low-Income Income
' Project Households Households Households
HUD Projects
' Huntington Villa Yorba 99 99 198
Huntington Beach Gardens 6 60 66
Wycliffe Gardens 185 0 185
' Bond-Financed Projects
Seabridge Villas 10 59 69
Harbor Gateway 2 18 20
' Rivermeadows 4 27 31
Huntington Village 12 11 23
Huntington Breakers 10 58 68
' Total 328 332 660
Source: Compiled by Cotton/Beland/Associates, May, 1992.
Note: The Yearly Housing Bond Issuance Reports include the number of very low and low-
income households currently residing in the projects. In several instances, there are
' more lower income households in these projects than the required 20 percent. The
distribution of very low and low-income households shown in this table has been adjusted
to reflect only the 20 percent requirement, assuming half of the households currently
' classified as very low-income under the bond program may not qualify for Section 8
subsidies. Also, the table assumes half of the tenants in Huntington Villa Yorba are very
low-income households.
1
1
' 16
' Replacement Costs
This section analyzes cost of constructing new low-income housing units to
replace the 660 assisted units in HUD and bond projects in Huntington Beach
should they be converted from low-income uses. The cost of developing new
housing depends upon a variety of factors such as density, size of the units (i.e.
' number of bedrooms), location and related land costs, and type of construction.
Table 6 shows the average per unit development cost by unit type in Huntington
Beach. Based on estimates by City staff, per unit development cost in
Huntington Beach is approximately $111,710 for a studio, $122,954 for a one-
bedroom, $140,080 for a two-bedroom, and $153,553 for a three-bedroom unit.
These estimates are,based on a construction cost of $63 per square foot and
include permit processing fees, infrastructure connection fees, and impact fees.
Using the per unit cost estimates shown in Table 6, the cost to replace the 660
assisted units in Huntington Beach would run approximately $85,730,548,
requiring a minimum downpayment of $8,573,055. This amount is substantially
higher than the $22,008,000 preservation cost and related $1,971,048
' downpayment under a transfer of ownership scenario, the $1,636,656 annual
Section 8 subsidies, or the costs (plus administrative fees) to refinance the bonds.
' TABLE 6
REPLACEMENT COSTS PER UNIT
Average Construction Total
' Unit Type Unit Size Land Cost/Unit Cost Unit Costs Unit
Studio 500 sq. ft. $75,000 $36,710 $111,710
One-bedroom 650 sq. ft. $75,000 $47,954 $122,954
1 Two-bedroom 900 sq. ft. $75,000 $65,080 $140,080
Three-bedroom 1,100 sq. ft. $75,000 $78,553 $153,553
Source: City of Huntington Beach, July, 1992.
Note: Per unit costs are estimated on the basis of minimum sizes according to the City's
Zoning Code. Cost estimates include: permit fees for building, electrical, plumbing and
mechanical permits; impact fees for parks and recreation, schools, library, and traffic;
and infrastructure connection and impact fees for sewer (City), sewer (County), water,
and water conservation.
1
17
: . •
' COST COMPARISONS
Ownershiptransfer usually involves the project in its entirety and thus, is more
Y P J Y
likely to be used by HUD prepayment eligible projects rather than bond projects
where only a portion of the project units are reserved for lower-income
households. Also, the costs of transferring ownership of a project to a public or
non-profit agency are based on the projects' current values, which are usually
' marked-up to incorporate inflation and profit for the existing owners. Purchase
of similar units by non-profit organizations is also costly and purchasing
opportunities cannot be guaranteed. The total cost to preserve the 660 at-risk
' units in Huntington Beach or to maintain the assisted housing stock by means of
transferring ownership and purchasing similar units is estimated at $22,008,000,
with a total downpayment cost of $1,971,048.
' Use of Section 8 subsidies has several drawbacks. First, only very low income
households are eligible, rendering only 328 households of the total 660 at-risk
' households in the City eligible for assistance. In addition, rent subsidies do not
ensure long-term unit affordability. The costs associated with rent subsidies are
high, requiring approximately $1,636,656 annually.
HUD is committed to providing subsidies for the preservation of the federally
assisted units. For prepayment eligible projects, the most cost-effective option is
to encourage the owners to maintain the projects as low-income with federal
incentives.
Because the costs to refinance an existing bond under the current owner(s) are
' based primarily on he outstanding debt, refinancing the existing bond is probably
the least costly preservation option for bond-financed projects. In 1989, the City
refinanced the mortgage on Huntington Breakers using a variable interest rate.
' The City can use a similar approach to refinance other bond projects and
preserve the at-risk units.
18
RESOURCES FOR PRESERVATION
1 This section discusses two types of resource available for preserving "at risk"
Yp P g
units: a) financial resources potentially available to purchase or supplement
' existing units, or to build replacement housing, and b) entities with the interest
and ability to purchase and/or manage replacement units.
1 Financing/Subsidy Resources
There are a variety of potential funding sources available for potential
' acquisition, subsidy, or replacement of units at risk. Due to both the high costs
of developing and preserving housing and limitations on both the amount and
uses of funds, a variety of funding sources may be required.
HUD Funds: Under LIHPRHA, HUD will provide the owners of Huntington
Villa Yorba and Huntington Beach Gardens with incentives which enable them
to raise rents and refinance a portion of their equity, while extending low-income
use restrictions for the remaining useful life of the projects (approximately 50
additional years). The difference between the tenant's portion of the rent and
1 market rent will be covered by Section 8 contracts. Should a nonprofit instead
take ownership of the project, the following HUD incentives would be offered:
' 0 Mortgage insurance for acquisition loans for 95 percent of equity.
0 Project-based Section 8 contracts, with HUD-subsidized rents set at
' levels high enough to provide an eight percent return to owners who
retain the project or to cover debt service on an acquisition loan for
new purchasers;
0 Grants to non-profit buyers that would fill any gap between fair
market rent or local market rent (whichever is higher) and allowable
' rents.
Redevelopment Set-Aside: The City's Redevelopment Agency has accumulated
approximately $3,000,000 in the Redevelopment Housing Set Aside Fund,
' available for future affordable housing activities. The Housing Set Aside Fund
can be used for a variety of affordable housing construction and preservation
activities including: land disposition and write-downs, site improvements, loans,
grants, issuance of bonds, land and building acquisition by Agency, direct housing
construction, housing rehabilitation, rent subsidies, redevelopment funds, and
administrative costs for non-profit housing corporations. The City is in the
1 process of developing programs and guidelines for the expenditure of the
Housing Set Aside Fund. The Set-Aside Fund can potentially be a significant
funding source for the preservation of assisted housing.
1
19
' CDBG Funds: Through the Community Development Block Grant (CDBG)
program, HUD provides funds to local governments for funding a wide range of
community development activities. As an entitlement jurisdiction, Huntington
Beach receives CDBG monies directly from HUD which the City utilizes for a
variety of housing and social service activities. For Fiscal Year 1991-92, the City
anticipates to receive approximately $2,004,947 of CDBG funds, of which
' $700,000 is committed to housing rehabilitation and $85,650 is committed to
homeless services and facilities. The City can potentially direct a portion of the
uncommitted CDBG funds toward the preservation of assisted housing.
' General Revenues: The City does not currently fund housing programs out of
general revenue funds and, consequently, does not have any general revenue
' funds set aside for housing.
Housing Authority Reserves: Other potential sources of funding are the reserves
of housing authorities. The Orange County Housing Authority currently has
roughly $8.5 million to use to provide housing opportunities throughout the
County. This money is subject to some restrictions and priority is given to
' projects which provide for the leverage and recycling of funds.
Orange County Affordable Housing Clearinghouse: The Orange County
Affordable Housing Clearinghouse is a consortium of lending institutions and
community groups focused on providing funds for affordable housing through
team lending. Sixteen lending institutions are currently members of the coalition.
' Because the coalition is new and is still in the process of being set up, it does
not currently have a track record in the community. However the financial assets
and expertise of coalition members suggest that this should be a significant
' source of funds for low-income housing in Orange County in the future.
Administrative Resources
' An alternative to providing subsidies to existing owners to keep units available as
low income housing is for public or non-profit agencies to acquire or construct
housing units to replace "at risk" units lost to conversion. Non-profit ownership
assures the future availability of purchased units as low-income housing. Several
public and non-profit agencies are currently active or have expressed an interest
in purchasing and/or managing at-risk, low-income housing projects in Orange
' County.
The Orange County Community Housing Corporation (OCCHQ: OCCHC is the
oldest and largest non-profit affordable housing developer in Orange County.
With assets exceeding $6.6 million, OCCHC has been involved in 14 housing
projects for very low-income large families throughout Orange County.
' Developments by OCCHC include: 1) Domingo Avenue Apartments (28 units),
Newport Beach; 2) Berry Street Apartments (4 units), Anaheim; 3) Coffield
Apartments (24 units), Dana Point; 4) Irvine Condominiums (6 units), Irvine; 5)
Buena Street Apartments (28 units), Garden Grove; and 6) Keel Street Shelter
20
(8 units), Garden Grove. OCCHC participates in the management as well as the
development of low income housing and has expressed interest in "at risk" units
' in Huntington Beach. Contact: Allen Baldwin (714) 558-6006.
Civic Center Barrio Housing Corporation: Civic Center Barrio Housing
Corporation also has considerable experience in, and resources for, the
' development and or management of low income housing. Barrio Housing owns
and operates over 130 housing units in Orange County and San Diego County
and has been involved in the development of over 400 affordable units. Barrio
' Housing has staff of three full time employees and has been operating in Orange
County for 16 years. Representatives from Barrio Housing indicate that the
corporation would be interested in preserving at-risk units in Huntington Beach.
' Contact: Alana Baker (714) 835-0406.
Council of Orange County, Society of Saint Vincent De Paul: The Society of
Saint Vincent De Paul provides many social services in Orange County such as
food distribution and medical services. The Society is also in the process of
developing a congregate housing project in Orange County and plans to continue
' to expand its housing operations. Including the value of donated time and goods,
the Society has an annual revenue of $9.8 millon and employs a staff of 75
persons. The Society has expressed interests in preserving at-risk housing in
' Huntington Beach. Contact: Scott Mather (714) 633-9195.
HomeAid: HomeAid is a non-profit corporation established by the Building
' Industry Association of Southern California to help..alleviate the homeless
problem in the region. The HomeAid program has a .dual focus: to construct or
renovate shelters for the transitionally homeless and to develop housing for lower
income families and individuals. Representatives of HomeAid have expressed
' the agency's interest in preserving at-risk housing in Orange County.
Projects completed or in progress in Orange County by HomeAid include: 1)
Thomas House (Garden Grove) - refurbishing of an eight-unit complex for
homeless families; 2) Interval House (central Orange County) - rehabilitation of
an existing home for battered women and their children; 3) New Vista Shelter
' (Fullerton) - rebuilding of an apartment building for homeless families; 4) Don
R. Roth Family Center (Orange) - construction of three new duplexes for
homeless families; 5) Anchor House (San Clemente) - rehabilitation of a duplex
for homeless families; 6) Anaheim Interfaith Shelter (Anaheim) - refurbishing
and expansion of a single-family home for homeless families; 7) Huntington
Youth Shelter (Huntington Beach) - refurbishing of a historic farmhouse and
addition of 12 new bedrooms for a facility to house homeless and runaway teens;
8) Santa Ana YWCA Second Stage Housing (Santa Ana) - refurbishing of a four-
unit apartment building for homeless women and their children; 9) Friendship
Shelter (Laguna Beach) - refurbishing and enlarging of a detached home to
provide shelter for homeless men and women; and 10) Precious Life Shelter
(north Orange County) - expansion and rehabilitation of a home for unwed
' mothers and their newborn babies. Contact: Elisha Back (714) 396-9993.
21
Southern California Presbyterian Homes (SCPH): . SCPH is an experienced non-
profit housing developer based in Glendale. Utilizing a variety of federal, state
' and local funds, SCPH has developed the following six low-income independent
living facilities in Southern California: 1) Casa de la Paloma (167 units),
Glendale; 2) Sycamore Terrace (100 units), Upland; 3) Park Paseo (100 units),
Glendale; 4) Royal Vista Terrace (75 units), Duarte; 5) Covenant Manor (100
units), Long Beach; and 6) Guadalupe Manor (71 units), Fountain Valley. SCPH
is also constructing a 22-unit affordable senior housing project funded through
the City of Glendale's tax credit programs. Target residents for this project are
' those with limited income but not qualified for rental assistance under HUD's
very low income category. Contact: Benjamin Beckler (818) 247-0420.
QUANTIFIED OBJECTIVES
Units at Risk of Conversion Before July 1, 1994
A total of 198 units in Huntington Villa Yorba are eligible to convert to market
rate housing during this time frame.
' Units at Risk of Conversion Between July 1, 1994 and July 1, 1999
A total of 462 units_in.seven assisted housing projects are at risk of converting to
non-low-income use between.July 1, 1994-and July 1, 1999.
' It is the objective of the City to either retain or replace as lo"A,-income housing
all 660 units eligible to convert between July, 1989 and July 1, 1999. A
comparison of current costs of preservation and current potential resources
available indicates that preservation of the "at risk" units may be feasible. The
City will continue to pursue new opportunities to replace low-income restricted
units lost through conversion to market rate units.
' PROGRAMS FOR PRESERVATION
The City plans to monitor "at risk" housing units to ensure units will continue as
low income housing. The two at-risk HUD projects will most likely be preserved
through incentives under LIHPRHA, and affordability controls on the five bond
projects can most effectively be extended through bond refinancing. To the
' extent these approaches are not effectuated, the City will subsidize units and/or
work with non-profit housing groups in the community to explore possible new
construction of replacement housing by non-profits or non-profit acquisition of
22
1
' existing buildings with "at risk" units The following are specific actions that the
City will take to protect or replace at risk units.
' Policies and Programs
Policy 1: Attempt to preserve low-income housing in the City that is at risk of
converting to market rate by monitoring the status of prepayment-eligible and
bond-financed projects, and identifying financial and organizational resources
available to preserve these units.
Policy 2: Pursue a program that would offer small developers an opportunity to
purchase "at-risk" units as a means of satisfying affordable housing requirements
that may be conditioned on their projects.
Monitor Units at Risk: Regularly monitor the status of the at-risk projects.
' Pursuant to Government Code Section 65863.10, the City will inform the tenants
of the status of their projects at least one year in advance of the potential
conversion date.
Time Frame: The earliest potential conversion dates for "at risk" projects in
Huntington Beach are as follows.
Project Project No. of Units Potential
Nam Addres At Ris Conversion Date
rHuntington Villa Yorba 16000 Villa Yorba 198 9/93
Seabridge Villas 20251 Cape Coral Lane 69 2/95
Harbor Gateway 4691 Warner Avenue 20 10/95
' Rivermeadows 8945 Riverbend 31 10/95
Wycliffe Gardens 18765 Florida Avenue 185 3/96
Huntington Beach Gardens 16900 Algonquin 66 4/96
Huntington Village 16171 Springdale 23 11/96
Huntington Breakers 21270 Beach 68 7/99
Responsible Agency: Department of Community Development.
Funding Source: Department Administrative Budget.
Pursue Bond Refinancing: Seabrid e Villas, Harbor Gateway, Rivermeadows
g Y
Huntington Village, and Huntington Breakers are financed under the City's
' Mortgage Revenue Bond Program. The City will coordinate with the owners of
at risk projects to encourage bond refinancing to extend low income use
restrictions for a minimum of 15 years starting from the issuance of the initial
' bonds.
Time Frame: Contact project owners at least 18 months prior to expiration to
' express City's desire to refinance.
' 23
Responsible Agency. Department of Community Development.
Funding Source: Department Administrative Budget, City Housing Funds.
Work with Potential Priori Purchasers: Establish contact with public and non-
profit agencies interested in purchasing and/or managing units at risk to inform
them of the status of at-risk projects. Where feasible, provide technical
assistance to these organizations with respect to financing. Coordinate with the
Orange County Affordable Housing Clearinghouse in assisting priority purchasers
to obtain financing.
Time Frame: Establish contact by end of 1992.
Responsible Agency: 'Department of Community Development.
IFunding Source: Department Administrative Budget, City Housing Funds.
Facilitate Tenant Purchase of Units: Tenant purchase of at-risk units is a
feasible preservation option when owners of Huntington Villa Yorba and
Huntington Beach Gardens file Notices.of Intent to indicate the desire to sell the
projects or negotiation between the owners and HUD fail to preserve the two
projects as low-income housing. The City will facilitate tenant purchase of the
two projects by providing technical assistance in financing, organizing tenant
associations as priority purchasers, coordinating with non-profit housing
organizations, and encouraging tenant participation.in the prepayment process.
The City will begin working with the Orange.County Affordable Housing
Clearinghouse to establish a program to provide preferential financing, and
potentially downpayment assistance, for low-income tenants wishing to purchase
their units.
Time Frame: Begin coordination with the Orange County Affordable Housing
Clearinghouse by the end of 1992.
Responsible Agency: Department of Community Development.
Funding Source: HOPE and HOME grants, CDBG, Orange County
Affordable Housing Clearinghouse, Housing Authority
Reserves.
Tenant Education: The City will work with tenants of "at risk" units in danger of
converting. The City will provide tenants with education regarding potential
tenant purchase of buildings and act as a liaison between tenants and nonprofits
potentially involved in constructing or acquiring replacement housing. The City
will also provide tenants in "at risk" projects information regarding Section 8 rent
subsidies through the Orange County Housing Authority.
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' Time Frame: At least one year prior to subsidy termination, as identified in the
schedule presented for monitoring units at risk.
' Responsible agency: Department of Community Development.
' Funding Source: Department Budget, CDBG.
Encourage Project Owners to Participate in Section 8 Program: If detailed
analysis and negotiation with projects owners indicate that long-term rent
! restrictions cannot be secured on the units, the City will encourage owners to
participate in the Section 8 rent subsidy program. The City will act as the liaison
between the County Housing Authority and the "at risk" project owners. The
' City will target this program effort to projects such as Rivermeadows and
Huntington Village where differentials in rental rates between restricted and
market rate units are small.
' Time Frame: Continually monitor status of extension of low-income use
restrictions and encourage property owners to participate in the
County Housing Authority Section 8 rent subsidy program_
immediately upon notification of owners' decision to discontinue
low-income use.
' Responsible Agency: Department of Community Development.
' Funding Source: Department.Administrative Budget.
Assist Tenants of Existing Rent-Restricted Units to Obtain Priority Status on
Section 8 Waiting List: The Orange County Housing Authority has established
three categories of priority applicants to receive Section 8 certificates: 1) evicted
or homeless households; 2) households living in substandard housing units; and 3)
' households paying more than 50 percent of income for rent and utilities. The
City will assist tenants of "at risk" units to obtain priority status if there were a
conversion to market rate and if tenants' income and housing costs meet
' eligibility requirements.
Time Frame: Continually monitor status of extension of low-income use
restrictions and assist tenants to apply for priority status
immediately upon notification of owners' decision to discontinue
low-income use.
' Responsible Agency: Department of Community Development.
Funding Source: Department Administrative Budget.
r
25
No "cam
F PUBLIC HEAKINGW
/
HOUSING ELEMENT AMENDMENT NO. 92-1/ Negative Declaration No. 92-25
(Preservation of Assisted Housing)
NOTICE IS HEREBY GIVEN that the Huntington Beach City Council will
hold a public hearing in the Council Chamber at the Huntington Beach
Civic Center, 2000 Main Street, Huntington Beach, California, on the
date and at the time indicated below to receive and consider the
statements of all persons who wish to be heard relative to the
application described below.
DATE/TIME: pp'��Monda , November j, 1992, .7 : 00 PM (f/A ) eEEK QR�rs�N ALLY
'SCHEDULED FOK NOVEMIBER L) /99'a)
APPLICATION NUMBER: Housing Element Amendment No. 92-1/Neg. Dec.
92-25
APPLICANT: City of Huntington Beach
LOCATION: City-wide
ZONE: N/A
REOUEST: To amend the Housing Element to include on evaluation
of the potential for currently rent restricted low
income housing units to convert to non low income
housing and propose programs to preserve or replace
those units . This amendment will bring the Housing
Element into compliance with Government Code Section
65583 (a) (8) , (c) (6) .
ENVIRONMENTAL STATUS: Negative Declaration No. 92-25 has been
prepared and advertised for a 30 day
comment period, which expired on July 17,
1992 . This Negative Declaration was
considered by the Planning Commission and
will also be considered by the City Council .
COASTAL STATUS : Not applicable
ON FILE: A copy of the proposed request is on file in the
Community Development Department, 2000 Main Street,
Huntington Beach, California 92648, for inspection by the
public. A copy of the staff report will be available to
interested parties at City Hall or the Main City Library
(7111 Talbert Avenue) after October 28, 1992 .
ALL INTERESTED PERSONS are invited to attend said hearing and
express opinions or submit evidence for or against the application
as outlined above. If you challenge the City Council ' s action in
court, you may be limited to raising only those issues you or
someone else raised at the public hearing described in this notice,
or in written correspondence delivered to the City Clerk at, or
prior to, the public hearing. If there are any further questions
please call Greg Brown, Development Specialist at 536-5271.
Connie Brockway, City Clerk
Huntington Beach City Council
2000 Main Street
(1646D) Huntington Beach, CA 92648 (714) 536-5227
6 - Q " +
NOTICE OF PUBLIC HEARING 0
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HOUSING ELEMENT AMENDMENT NO. 92-1/ Negative Declaration No. 92-25
(Preservation of Assisted Housing)
NOTICE IS HEREBY GIVEN that the Huntington Beach City Council will
hold a public hearing in the Council Chamber at the Huntington Beach
Civic Center, 2000 Main Street, Huntington Beach, California, on the
date and at the time indicated below to receive and consider the
statements of all persons who wish to be heard relative to the
application described below.
DATE/TIME: Monday, November 2, 1992, 7: 00 PM
APPLICATION NUMBER: Housing Element Amendment No. 92-1/Neg. Dec.
92-25
APPLICANT: City of Huntington Beach
LOCATION: City-wide
ZONE: N/A
REQUEST: To amend the Housing Element to include on evaluation
of the potential for currently rent restricted low
income housing units to convert to non low income
housing and propose programs to preserve or replace
those units . This amendment will bring the Housing
Element into compliance with Government Code Section
65583(a) (8) , (c) (6) .
ENVIRONMENTAL STATUS: Negative Declaration No. 92-25 has been
prepared and advertised for a 30 day
comment period, which expired on July 17,
1992 . This Negative Declaration was
considered by the Planning Commission and
will also .be considered by the City Council .
COASTAL STATUS: Not applicable
ON FILE: A copy of the proposed request is on file in the
Community Development Department, 2000 Main Street,
Huntington Beach, California 92648, for inspection by the
public. A copy of the staff report will be available to
interested parties at City Hall or the Main City Library
(7111 Talbert Avenue) after October 28, 1992 .
ALL INTERESTED PERSONS are invited to attend said hearing and
express opinions or submit evidence for or against the application
as outlined above. If you challenge the City Council ' s action in
court, you may be limited to raising only those issues you or
someone else raised at the public hearing described in this notice,
or in written correspondence delivered to the City Clerk at, or
prior to, the public hearing. If there are any further questions
please call Greg Brown, Development Specialist at 536-5271.
Connie Brockway, City Clerk
Huntington Beach City Council
2000 Main Street
(1646D) Huntington Beach, CA 92648 (714) 536-5227
BLIC HEARING NOTIFICATION CHECKLIST
MAILING LABELS •
w (1211D) 9/18/92
President William D. Holman P nning Director
H.B. Chamber of Commerce Pacific Coast Homes City Dt,,Wwestminster
2213 Main St. #32 2124 Main St. 8200 Westm ter Blvd.
Huntington Beach, CA 92648 Hunt. Bch,—CA 2648-2499 Westminster, CA 83
Board President .B. Hist. Society P17maing Director
H.B./F.V. Board of Realtors C/O Newland o useum City of Beach
8101 Slater Ave. 19820 Beach Blvd. 211 Eight St.
Huntington Beach, CA 92647 Huntington Beach, CA 92648 Seal Beach, CA 90740
Pre ' nt irperson C astal Commission
Amigos De a Chica His rical Resources Bd. Theres�Broadway,
15545 Computer Comm. �Beach,
245 W. 380
Huntington Beach, CA 49 2000 Mai Long Bch, CA 90802
Huntingt92648
C Grant Robert Joseph
Friends o B Wetlands Council on Aging Caltrans District 12
21902 Kiowa Lane 1706 Orange Ave. 2501 Pullman St.
Huntington Beach, CA 9264 Huntington Beach, CA 92648 Santa Ana, CA 92705
alanter 7Golden
na lebury Director
Coastal ervancy St. o m. Owners Leag. Local Solid Waste Enf. Agy.
P.O. Box 6649 21 Magnolia Blv O.C. Health Care Agency
Los Angeles, CA 9006 Garden Grove, CA 92642 P.O. Box 355
Santa Ana, CA 92702
President Co f Orange/EMA ick Tomain0
Huntington Beach Tomorrow Michael M. ne, Dir. Seacliff owners Assoc.
411 6th St. P.O. Box 4048 6812 Scenic Bay e
Huntington Beach, CA 92648 Santa Ana, CA 92702-4 Huntington Beach, CA 48
e Vandermost
IA Count Orange/EMA Hu ton Harbor HOA
2001 E. 4th S 24 Thomas Math Dir, Planning P. 0. Box
Santa Ana, CA 92705 P. 0. Box 4048 Sunset Beach, CA 907
Santa Ana, CA 92702-4
Richard Spicer
SCAG Cou of Orange/EMA Lilly
818 West 7th, 12th Floor Bob Fisher, ir. HHHOA
Los Angeles, CA 90017 P.O. Box 4048 16835 Algonqui t. #119
Santa Ana, CA 92702-4048 Huntington Beach, 49
I. Corral 100 ing Dir. N wth Coordinator
Mary Be City of a Mesa Huntington ach Post Office
20292 Eastwood P. 0. Box 1200 6771 Warner Ave.
Huntington Beach, CA 46 Costa Mesa, CA 92628— Huntington Beach, CA 47
OSCHOOL DISTRICTS REPRESENTATIVES •
(1594D)
�r
Dr. Duane Dishno
HB CITY ELEMENTARY SCHOOL DISTRICT
P. 0. Box 71
Huntington Beach, CA 92648
964-8888
DAVID HAGEN
HB UNION HIGH SCHOOL DISRICT
10251 Yorktown Avenue
Huntington Beach, CA 92646
964-3339
MARK ECKER
FOUNTAIN VALLEY
ELEMENTARY SCHOOL DISTRICT
17210 OAK STREET
FOUNTAIN VALLEY CA 92708
DR. GARY BURGNER
HUNTINGTON BEACH CITY
ELEMENTARY SCHOOL DISTRICT
PO BOX 71
HUNTINGTON BEACH CA 92648
DR. JIM JONES
OCEAN VIEW ELEMENTARY
SCHOOL DISTRICT
17200 PINEHURST LANE
HUNTINGTON BEACH CA 92647
DR. GAIL WICKSTROM
WESTMINSTER SCHOOL DISTRICT
14121 CEDARWOOD AVENUE
WESTMINSTER CA 92683
COVER SHEET
CITY COUNCIL PUBLIC HEARINCIS
N/A YES NO
Did Wang type out City Council or Planning Commission
public hearing notice?
( ) ( ) If anneal, are appellant and applicant shown on legal notice?
( ) ( ( ) If hou in is involved, is "legal challenge paragraph"
included?
( ) ( ) If Coastal Development Permit, are the RESIDENT labels
attached and is the Coastal Commission Office on the
labels.
( ) ( ) Were latest Assessor's Parcel Rolls used?
is the appellant's name and address part of the labels?
( ) Is day of public hearing correct — Monday/Tuesday?
( ) Has the City Administrator's Office authorized the public
hearing to be set?
( � Is PC Matrix mailing list required?
For Pub is Hearings at the City Council level please revise the last paragraph
of the public hearing notice as follows:
ALL INTERESTED PERSONS are invited to attend said hearing and express
opinions or submit to the City Clerk, written evidence for or against the
application as outlined above. If there are any further questions please call
(insert name of Planner) at 536-5227.
CONNIE BROCKWAY,CITY CLERK
CITY OF HUNTINGTON BEACH
2000 MAIN STREET
HUNTINGTON BEACH, CA 92648
(714) 536-5227
The paragraph which is currently on Coastal Commission public hearings should
remain.
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STATE OFCALIFOANIA BUSINESS. rRANSPOAVA11ON.ANri MQUSINOAOt-Ni.Y wILJQ' tL,vo�
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT G
DIVISION OF HOUSING POLICY DEVELOPMENT
1800 THIRD STREET,Room 430
SAP. LANBOX 95-53 ATTACHMENT NO.
S.4GRAA¢1rT0, CA 94:52.2053
(916)323-3176 FAX(910) 3Z3-M2S
September 2 , 1992
Mr. Paul E . Coo':
City Administrator
City of Huntington 'Beach
2000 Main Street
Huntington Beach, CA 92646
Dear Mr. Cook:
RE: Review of Huntington Beach' s 1992 Draft Housing Element
Amendment and 1969 Adopted Housing Element
Thank you For submitting Huntington Beach' s draft housing
element amendment, received July 21, 1992 for our review. As you
know, we are required to review housing element amendments and
report our findings to the locality (Government Code Section
65585 (b) ) .
We have also reviewed the City ' s adopted housing element
received August 2 , 1990 for our review. As you may know, this
Department was not required to review adopted elements received
prior to January 1 , 1991 . Chapter 1441 , Statutes of 1990 now
requires that the Department review adopted housing elements and
report our findings to the locality (Government Code Section
65585 (h) ) . We- regret that because of other statutory
responsibilities we were unable to review the element when it was
originally received. we have reviewed the adopted element at
this time as part of our review of the City ' s draft preservation
amendment.
As you know, our January 26 , 1990 review letter found the
City' s revised draft housing element in compliance with state
housing element law. We are pleased to find that the City ' s
adopted housing element continues to comply with state law.
i
We are also pleased to inform you that the draft amendment,
which responds to the requirements of Chapter 1451, 'Statutes of
1989 relating to the. preservation of subsidized housing at risk
of conversion, also complies with Article 10. 6 of . the Government
Code. The draft amendment thoroughly describes and analyzes
subsidized units at risk of conversion and is clearly organized
and presented.- The analysis of conversion potential for the
Y
✓JG•✓Jorri Lon
Mr. Paul E. Cook �06-
Page 2
various projects a,- risk and the discussion of preservation
resources are particularly good. We congratulate the City for an
exemplary analysis .
we wish you continued success in implementing your housing
program and we reco-mnend that you adopt the amendment as soon as
possible to ensure the element remains in compliance. we look
forward to receiving the adopted amendment and reviewing it
pursuant to Section 65585 (h) .
If you have any questions or would like assistance in the
implementation of your housing element, please contact Gary
Collord of our staff at (916) 327-2644 .
In accordance with requests pursuant to the '-R.iblic necords
Act, we are forwarding copies of this letter to the persons and
organizations listed below.
Sincerely,
Thomas B. Cook
Deputy Director
cc: Ruth Lambert, city of Huntington Beach
Conrad G. Tuohey, Law Offices
David Quezada, Fair Housing Council of Orange County_
Ralph Kennedy, Orange County Housing Coalition
Crystal Simms, Legal Aid Society of orange County
Maya Dunne, City of Huntington Beach
Jean Forbath, Orange County Human Relations
Justin Clouser, Poverty Law Center
Jonathan Lehrer-Graiwer, Attorney at Law
Western Center on Law & Poverty
David Booher, California Housing Council
Ana Marie Whitaker, California State University Pomona
Karen Warmer, to-ton,iBeland/Also fates
Christine Diemen, Building Industry Association
Joe Carreras, Southern California Association of Governments
Kathleen Mikkelson, Deputy Attorney General
Bob Cervantes, Governor ' s Office of Planning and Research
Dwight Hanson, California Building Industry Association
Kerry Harrington Morrison, California Association of
Realtors
Marc Brown,, California Rural Legal Assistance Foundation
Rob wiener, California Coalition for Rural, housing
Susan Desantis, The Planning Center
A�"affCITY OF HUNTINGTON BEACH
INTER-DEPARTMENT COMMUNICATION
/ HUNTINGTON BEACH
ATTACHMENT NO.o4
TO : Greg Brown
FROM: Julie Osugi
Assistant P a ner
SUBJECT: ENVIRONMENTAL ASSESSMENT FORM NO. 92-25
DATE : June 11 , 1992
Applicant : City of Huntington Beach
Request : Adoption of the "Preservation of Assisted Housing :
Analysis. and Programs" Report . The report amends the
Huntington Beach Housing Element , and will be
integrated within the Housing Element upon the next
periodic review of the Element in 1994 . The purpose
of the amendment is to bring the Housing Element into
compliance with a recent amendment .of housing element
law, codified in Government Code Section 65583 (a) (8) ,
(c) ( 6) . Under this law, jurisdictions must evaluate
the potential for currently rent restricted
low-income housing units to convert to non-low-income
housing and propose programs to preserve or replace
`s those units .
Location: Citywide
Background
Staff has reviewed the environmental assessment form noted above and
has determined that a negative declaration may be filed for the
project . In view of this , a draft negative declaration was prepared
and was published in. the Huntington Beach Independent for a thirty
(30) day public review period commencing Thursday, June 18 , 1992 and
ending Friday, July 17, 1992 . If any comments regarding the draft
negative declaration are received, you will be notified immediately.
Recommendation
The Environmental Assessment Committee recommends that the Planning
Commission approve Negative Declaration No . 92-25 finding that the
6,_`.}. proposed project will not have a significant adverse effect on the
environment .
(3611d-3)
1
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LEGAL ADVERTISEMENT
DEPARTMENT OF COMMUNITY DEVELOPMENT
PLANNING DIVISION
CITY OF HUNTINGTON BEACH
Notice is hereby given by the Department of Community Development ,
Planning Division of the City of Huntington Beach that the following I
. ,Draft Negative Declaration request has been prepared and will be �.
submitted to the City of Huntington Beach Planning Commission for
their consideration . The Draft Negative Declaration will be
available for public review and comment for thirty ( 30) days
commencing Thursday, June 18 , 1992 .
Draft Negative Declaration No . 92-25 in conjunction with Housing
Element Amendment No . 92-1 is a request to adopt the "Preservation
. of Assisted Housing : Analysis and Programs" Report . The report
amends the Huntington Beach Housing Element , and will be integrated
within the Housing Element upon the next periodic review of the
Element in 1994 . The purpose of the amendment is to bring the
Housing Element into compliance with a recent amendment of housing
element law, codified in Government Code Section 65583 (a) ( 8) ,
(c) ( 6) . Under this law, jurisdictions must evaluate the potential
for currently rent restricted low-income housing units to convert to
non-low-income housing and propose programs to preserve or replace
those units .
A copy of the request is on file with the Department of Community
Development , City of Huntington Beach , 2000 Main Street , Huntington
Beach , California . Any person wishing to comment on the request may
do so in writing within thirty ( 30 ) days of this notice by providing
written comments to the Department of Community Development ,
Planning Division , P .O . Box 190 , Huntington Beach, CA 92648 .
( 3610d-2)
ENVIRONMENTAL CHECKLIST FORM
CITY OF HUNTINGTON BEACH
PLANNING DIVISION
ENVIRONMENTAL ASSESSMENT NO. 92-25
1 . Name of Proponent: City of Huntington Beach
Address: 2000 Main Street
Huntington Beach, CA 92648
Phone Number: (714) 536-5271
2. Date Checklist Submitted for Review: June 10, 1992
3. Concurrent Entitlement(s) : Housing Element Amendment No. 92-1
4. Project Location: Citywide
5. Proiect Description: Adoption of the "Preservation of Assisted
Housing: Analysis and Programs" Report. The report amends the
Huntington Beach Housing Element, and will be integrated within the
HousingEl u the next Element upon periodic review of the Element in
1994. The purpose of the amendment is to bring the Housing Element
into compliance with a recent amendment of housing element law,
codified in Government Code Section 65583(a)(8)., (c)(6). Under this
law, jurisdictions must evaluate the potential for currently rent
restricted low-income housing units to convert to non—low—income
housing and propose4programs to preserve or replace those units. A
summary of the report has been included in this document as
attachment #1 .
i
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Introduction
The "Preservation of Assisted Housing : Analysis and Programs" report .Y
is a policy document . The report inventories the restricted
low-income housing stock in the City and assesses each project ' s
potential for conversion to non-low-income housing by analyzing the
costs associated with preservation or repacement of the projects .
The report also establishes City policy regarding preservation of
existing restricted low income housing stock and identifies
financial resources and programs available to the City to facilitate
preservation efforts .
The report focuses on the preservation of the affordability of
existing residential units and does not consist of any new
development or propose any new policies which will result in impacts
to the following environmental areas : Earth Conditions ; Air
Quality; Water Quality or Supply; Biological Resources ; Noise; Light
and Glare; Land Use; Energy and Natural Resources ; Transportation;
Public Services and Utilities ; Human Health/Risk of Upset ;
Aesthetics ; Recreation; or Historic/Cultural Resources . Therefore,
all items on the attached checklist pertaining to the above issues ,
have been appropriately marked "no" . For a summary of the
Preservation of Assisted Housing : Analysis and Programs report
please refer to Attachment #1 .
. 1
3567d
Y Maybe No
ENVIRONMENTAL IMPACTS
(Explanations of answers are included after .each subsection.)
Yes Mavbe No
1 . Earth. Will the proposal result in:
a. Unstable earth conditions or changes in geologic substructures? — _ X
b. Disruptions, displacements, compaction or overcovering of the soil? — _ X
C. Change in topography or ground surface relief features? — _ X
d. The destruction, covering or modification of any unique geologic or physical features? _ X
e. Any increase in wind or water erosion of soils, either on or off the site? — — X
f. Changes in deposition or erosion of beach sands, or changes in siltation, deposition
or erosion which may modify the channel of a river or stream or the bed of the ocean
or any bay, inlet or lake? X
g. Exposure of people or property to geologic hazards such as earthquakes, landslides,
mudslides, ground failure, or similar hazards? — _ X
Air. Will the proposal result in:
4 a. Substantial air emissions or deterioration of ambient air quality? — _ X
b. The creation of objectionable odors? — — X
C. Alteration of air movement, moisture, or temperature, or any change in climate, either
locally or regionally? X
3. Water. Will the proposal result in:
a. Changes in currents, or the course of direction of water movements, in either marine or
fresh waters? X
- - -
b. Changes in absorption rates, drainage patterns, or the rate and amount of surface runoff? _ _ X
i
C. Alterations to the course or flow of flood waters? X
d. Change in the amount of surface water in any water body? _ _ X
e. Discharge into surface waters, or in any alteration of surface water quality, including
but not limited to temperature, dissolved oxygen or turbidity? — — X
f. Alteration of the direction or rate of flow of ground waters? _ — X
1
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Environmental Checklist —3— (3555d)
• I _ i Ma4be -N-
•
9. Change in the quantity of ground waters, either through direct additions or withdrawals,
or through interception of an aquifer by cuts or excavations?
h. Substantial reduction in the amount of water otherwise available for public water
supplies? _ _ X
i . Exposure of people or property to water related hazards such as flooding or tidal waves? _ _ X
4. Plant Life. Will the proposal result in:
a. Change in the diversity of species, or number of any species of plants (including trees,
shrubs, grass, crops, and aquatic plants)? X
b. Reduction of the numbers of any mature, unique, rare or endangered species of plants? _ X
C. Introduction of new species of plants into an area, or in a barrier to the normal
replenishment of existing species? X
d. Reduction in acreage of an agricultural crop? _ — X
5. Animal Life. Will the proposal result in:
a. Change in the diversity of species, or numbers of any species of animals (birds, land
animals including reptiles, fish and shellfish, benthic organisms or insects)?
b. Reduction of the numbers of any unique, rare or endangered species of animals? — X
C. Introduction of new species of animals into an area, or result in a barrier to the
migration or movement of animals?
d. Deterioration to existing fish or wildlife habitat? _ _ X
6. Noise. Will the proposal result in:
a. increases in existing noise levels? _ X
b. Exposure of people to severe noise levels? _ X
7. Light and Glare. Will the proposal produce new light or glare? _ _ X
8. Land Use. Will the proposal result in a substantial alteration of the present or planned
land use of an area? X
9. Natural Resources. Will the proposal result in:
a. Increase in the rate of use of any natural resources? X
b. Substantial depletion of any nonrenewable natural resource? X
10, Risk of Upset. Will the proposal involve:
a. A risk of an explosion or the release of hazardous substances (including, but not
limited to oil , pesticides, chemicals or radiation) in the event of an accident or
upset conditions?
Environmental Checklist -4- (3555d)
Yes Maybe N%�
• i
b. Possible interference with an emergency response plan or an emergency evacuation plan? — _ X
1 . Population. Will the proposal alter the location, distribution, density, or growth rate of
the human population of an area? X
12. Housing. Will the proposal affect existing housing, or create a demand for additional housing? _ X _
Discussion: The proposed project will promote the preservation of the affordable housing stock in the City
by establishing a preservation policy and by identifying financial resources and programs to facilitate the
preservation of affordable units. As such, the proposal will affect existing and future low income housing
at risk of being converted to market rate. The proposal will help to maintain housing for a segment of the
low income population in the City and facilitate achievement of the City's housing goals as established by
the existing policies of the General Plan. Affects to housing are anticipated to be beneficial ; no
signficant adverse impacts are anticipated.
13. Transportation/Circulation. Will the proposal result in:
a. Generation of substantial additional vehicular movement? _ _ X
b. Effects on existing parking facilities, or demand for new off—site parking? _ X
C. Substantial impact upon existing transportation systems? _ _ X
d. Alterations to present patterns of circulation or movement of people and/or goods? _ _ X
e. Alterations to waterborne, rail or air traffic? _ __ X
f. Increase in traffic hazards to motor vehicles, bicyclists -or pedestrians? _ X
14. Public Services. Will the proposal have an effect upon, or result in a need for new or
altered governmental services in any of the following areas:
a. Fire protection? X
b. Police protection? _ _ X
C. Schools? X
d. Parks or other recreational facilities? X
e. Maintenance of public facilities, including roads? — X
Discussion: All of.the affordable ,housing units identified in the report are privately owned and
maintained. Programs listed in the document which will facilitate preservation of these units do not
involve any increases in maintenance on the City's part. No significant adverse impacts are anticipated.
f. Other governmental services? X
Discussion: The programs identified in the document identify the City of Huntington Beach Department of
Community Development as the responsible agency. The programs define the department's role primarily to
provide administrative, technical- and coordination assistance for the "at—risk" units. The City's
Department of Community Development, Building and Housing Division currently operates in this capacity.
Environmental Checklist —5— (3555d)
Yes Maybe No.
•
Therefore, adoption of the document is not anticipated to result in any significant adverse impacts to
existing government services in the City.
15. Energy. Will the proposal result in:
a. Use of substantial amounts of fuel or energy?
b. Substantial increase in demand upon existing-source of energy, or require the
development of sources of energy? _ _ X
16. Utilities. Will the proposal result in a need for new systems, or substantial alterations
to the following utilities:
a. Power or natural gas? _ _ X
i
b. Communication systems? _ X
C. Water? - - X
d. Sewer or septic tanks? - _ X
e. Storm water drainage? - _ X
f. Solid waste and disposal? - X
17. Human Health. Will the proposal result in:
a . Creation of any health hazard or potential health hazard (excluding mental health)? _
b. Exposure of people to potential health hazards? _ _ X
18. Aesthetics. Will the proposal result in the obstruction of any scenic vista or view open to
the public, or will the proposal result in the creation. of an aesthetically offensive site
open to public view? _ _ X
19. Recreation. Will the proposal result in an impact upon the quality or quantity of existing
recreational opportunities? _ _ X
20. Cultural Resources.
a. Will the proposal result in the alteration of or the destruction of a prehistoric or
historic archaeological site? _ X
b. Will the proposal result in adverse physical or aesthetic effects to a prehistoric
or historic building, structure, or object? _ _ X
C. Does the proposal have the potential to cause a physical change which would affect
unique ethnic cultural values? X
d.. Will the proposal restrict existing religious or sacred uses within the potential
impact area? X
Environmental Checklist —6— (3555d)
Yes Maybe NsI
21 . Mandatory Findings of Significance.
a. Does the project have the potential to degrade the quality of the environment, sub—
stantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife
population to drop below self sustaining levels, threaten to eliminate. a plant or animal
community, reduce the number or restrict the range of a rare or endangered plant or
animal or eliminate important examples of the major periods of California history or
prehistory? X
b. Does the project have the potential to achieve short—term, to the disadvantage of
long—term, environmental goals? (A short-term impact on the environment is ore which
occurs in a relatively brief, definitive period- of time while long—term impacts will
endure well into the future.) - X
C. Does the project have impacts which are individually limited, but cumulatively consid—
erable? (A project may impact on two or more separate resources where the impact on
each resource is relatively small , but where the effect of the total of those impacts
on the environment is significant.) _ X
d. Does the project have environmental effects which will cause substantial adverse effects
on human beings, either directly or indirectly? _ _ X
DETERMINATION
-.,On the basis of this initial evaluation:
find that the proposed project COULD NOT have a significant effect on the environment, and a
NEGATIVE DECLARATION will be prepared.
I find that although the proposed project could have a significant effect on the environment, there !_
will not be a significant effect in this case because the mitigation measures described on an attached
sheet have been added to the project. A NEGATIVE DECLARATION WILL
a
BE PREPARED.
3
A I find the proposed project MAY have a significant effect on the environment and an ENVIRONMENTAL _-
IMPACT REPORT is required.
:3
:a
Date Sign ure
Revised: March, 1990 For: City of Huntington Beach
9 Community Development Department
G
'3
Environmental Checklist —7— (3555d
'a
I
ATTACHMENT #1
PRESERVATION OF ASSISTED HOUSING
ANALYSIS AND PROGRAMS REPORT SUMMARY
The Huntington Beach Housing Element was adopted in July, 1990 as
part of the 1989-1994 update cycle for jurisdictions in the SCAG
region . The State Department of Housing and Community Development
has determined the Element to be in compliance with State law.
The "Preservation of Assisted Housing : Analysis and Programs" report
amends the Huntington Beach Housing Element, and will be integrated .
within the Housing Element upon the next periodic review of the
Element in 1994 . The purpose of the amendment is to bring the
Housing Element into compliance with a recent amendment of housing
element law, codified in Government Code Section 65583 (a) (8) ,
(c) ( 6) . Under this law, jurisdictions must evaluate the potential
for currently rent restricted low-income housing units to convert to
non-low-income housing and propose programs to preserve or replace
those units .
Consistent with State requirements , the report includes the
following five components :
1 . An inventory of restricted low-income housing projects in
the City and their potential for conversion;
2 . An analysis of the costs of preserving and/or replacing the
units " at-risk" and a comparison of these costs ;
3 . An analysis of the organizational and financial resources
available for preserving and/or replacing the units
"at-risk" ;
4 . Quantified objectives for the number of " at-risk" units to
be preserve;
5 . Programs for preserving the " at-risk" units .
A brief summary of each of the five components has been provided
below. It should be noted that the State requires that the analysis
include projects that are at risk of converting during the next two
five-year Housing Element update periods . Therefore, the report
provides an analysis of each component area in terms of the period
extending from July 1 , 1989 to July 1, 1999 .
I . InventQ _ta_ At-Risk and '1'hui r
This component provides an inventory of the nine assisted
low-income housing projects in the City. The projects include
Huntington Villa Yorba, Huntington Beach Gardens , Wycliffe
Gardens , Seabridge Villas , Harbor Gateway, River Meadows ,
Huntington Village., Huntington Breakers and Surfside Villas and
provide a total of 735 affordable units . The inventory
includes a description of each of the projects including the
number of affordable units , a break down of unit type and
discussion of the federal or local assistance program in which
each project is participating .
The component identifies eight assisted rental housing projects
at risk of being converted to non-low-income housing prior to
July 1 , 1999 . These- eight projects provide a total of 660
affordable units in the City. Of the eight projects , one, the
Huntington Villa Yorba consisting of 198 affordable units , is
at risk of conversion prior to July 1, 1994 .
The section also evaluates each project' s conversion potential
based upon legal restrictions and incentives regulating the
affordability of units .
II . Cos-t Analysis : Preservation vs . Replacement
This component examines both the cost of preserving the units
at risk in Huntington Beach, and the costs of producing new
Y rental housing comparable in size and rent levels to replace
the units which could convert . A cost estimate has been
developed for each option based on information provided from
the County Housing Authority, the project ' s management company,
and local developers . Actual costs involved in each option
will also depend on the rental and real estate market
situations at the time the low-income use restrictions on' the
projects expire .
Preservation Costs
This section analyzes four different options available for the
preservation of affordable units and estimates the costs
associated with each for two projects , the Huntington. Villa
Yorba and the Huntington Beach Gardens . The four methods
include :
1 . Preserve the projects as low-income by offering.
additional federal incentives to the projects ;
2 . Facilitate the transfer of ownership of these projects
to or purchase of similar units by non-profit
organizations ;
3 . Refinance mortgage on projects . to extend affordability
controls ; or
4 . Assist qualified tenants in obtaining Section 8
certificates from the Orange County Housing Authority.
Replacement Costs
This section analyzes cost of constructing new low-income
housing units to replace the 660 assisted units in HUD and bond
projects in Huntington Beach should they be converted from
low-income uses . The cost of developing new housing depends
upon a variety of factors such as density, size of the units
( i . e . number of bedrooms) , location and related land costs , and
type of construction .
The section calculates the average per unit development cost by
unit type in Huntington Beach. Based on a construction code of
$63 . 00 per square foot plus permit processing fees,
infrastructure connection fees , and impact fees .
Cost Comparison
This section provides a comparison of the replacement cost
versus the various preservation alternatives identified earlier
in the section . The section also discusses the drawbacks and
benefits associated with each .
III . Sources for Preservation
This section discusses two types of resources available for
preserving " at risk" units : a) financial resources potentially
available to purchase or supplement existing units , or to build
replacement housing , and b) entities with the interest and
ability to purchase and/or manage replacement units .
The section presents a variety of potential funding sources
Available for potential acquisition, subsidy, or replacement of
units at risk. Funding sources discussed in the document
include : HUD Funds , Redevelopment Set-Aside Funds , CDBG Funds ,
City General Revenue Funds , Housing Authority Reserves , and the
. Orange County Affordable Housing Clearinghouse .
The document also identifies administrative resources , which
are defined as public or non-profit agencies which have
expressed an interest in purchasing and/or managing at-risk,
low income housing projects in Orange County. The document
identifies the following non-profit groups : The Orange County
Community Housing Corporation (OCCHC) , Civic Center Barrio .
Housing Corporation, Society of Saint Vincent De Paul , Home
Aid and Southern California Presbyterian Homes .
IV. Quantified Obiectives :
This section quantifies the number of units at -risk of
conversion before July 1., 1994 as 198 and those at risk of
conversion between July 1, 1994 and July 1, 1999 as 464 .
The section then goes on to establish the following objective
for the City:
"It is the objective of the City to either retain or replace as
low-income housing all 660 units eligible to convert between
July, 1989 ,and July 1, 1999" .
The section states that the objective .is based upon a
comparison of current costs of preservation and current
potential resources available indicates that preservation of
the "at risk" units may be feasible. The City will continue to
pursue new opportunities to replace low-income restricted units
lost through conversion to market rate units .
V . Programs for Preservation
The section identifies the City' s plans to monitor "at risk"
housing units to ensure units will not be lost as low income
housing . The two at-risk HUD projects will most likely be
preserved through incentives under LIHPRHA, and affordability
controls on the five bond projects can most effectively be
extended through bond refinancing . To the extent these
approaches are not effectuated , the City will subsidize units
and/or work with non-profit housing groups in the community to
explore possible new construction of replacement housing by
non-profits or non-profit acquisition of existing buildings
with "at risk" units. The section following identifies the
policy and the specific actions that the City will take to
implement it .
Policies and Programs
Policy 1 : Attempt to preserve low-income housing in the City
that is at risk of converting to market rate by monitoring the
status of prepayment-eligible and bond-financed projects , and
identifying financial and organizational resources available to
preserve these units .
Monitor Units at Risk: Regularly monitor the status of the
at-risk projects . Pursuant to Government Code Section
65863 . 10 , the City will inform the tenants of the status of
their projects at least one year in advance of the potential
conversion date .
Work with. Potential Priority Purchasers: Establish contact
with public and non-profit agencies interested in purchasing
and/or managing units at risk to inform them of the status. of
at-risk projects '. Where feasible, provide technical assistance
to these organizations with respect to financing . Coordinate
with the Orange County Affordable Housing Clearinghouse in
assisting priority purchasers to obtain financing .
�u
•
Pursue Bond Refinancing : Seabridge Villas , Harbor Gateway,
Rivermeadows , Huntington Village, and Huntington Breakers are
financed under the City' s Mortgage Revenue Bond Program. The
City will coordinate with the owners of at risk projects to =;x'
encourage bond refinancing to extend low income use
restrictions for a minimum of 15 years starting from the --
issuance of the initial bonds .
i
Facilitate Tenant Purchase of Units : Tenant .purchase of
at-risk units is a feasible preservation option when owners of
Huntington Villa Yorba and Huntington Beach Gardens file
Notices of Intent to indicate the desire to sell the projects
or negotiation between the owners and HUD fail to preserve the
two projects as low-income housing . The City will facilitate
tenant purchase of the two projects by providing technical
assistance in financing , organizing tenant associations as
priority purchasers , coordinating with non-profit housing
organizations , and encouraging tenant participation in the
prepayment process . The City will begin working with the
Orange County Affordable Housing Clearinghouse to establish a
program to provide preferential financing, and potentially down
payment assistance, for low-income tenants wishing to purchase
their units .
Tenant Education: The City will work with tenants of " at
risk" units in danger of converting . The City will provide
tenants with education regarding potential tenant purchase of
buildings and act as a liaison between tenants and non-profits
potentially involved in constructing or acquiring replacement )
housing . The City will also provide tenants in "at risk
projects information regarding Section 8 rent subsidies through
the Orange County Housing Authority.
Encourage Project Owners to Participate in Section 8
Program: If detailed analysis and negotiation with projects
owners indicate that long-term rent restrictions cannot be
secured on the units , the City will encourage owners to
participate in the Section 8 rent subsidy program. The City
will act as the liaison between the County Housing Authority
and the "at risk" project owners . The City will target this
program effort to projects such as Rivermeadows and Huntington
Village where differentials in rental rates between restricted
and market rate . units are small .
Assist Tenants of Existing Rent-Restricted Units to Obtain
priority Status on Section 8 Waiting List: The Orange County
Housing Authority has established three categories of priority
applicants to receive Section 8 certificates : 1) evicted or
homeless households ; 2) households living in substandard
housing units ; and 3) households paying more than 50 percent of
income for rent and utilities . The City will assist tenants of
" at risk" units to obtain priority status if there were a.
conversion to market rate and if tenants ' income and housing
costs meet eligibility requirements .
(3559d)
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f VICINITY MAP
HUNTINGTON BEACH PLANNING DIVISION
RESPONSE TO COMMENTS FOR DRAFT
NEGATIVE DECLARATION NO. 92-25
I
I . INTRODUCTION
This document serves as the Response to Comments on the Draft
Negative Declaration No . 92-25 . This document contains all
information available in the public record related to the Draft
Negative Declaration as of July 20 , 1992 and responds to
comments in accordance with Section 15088 of the California
Environmental Quality Act (CEQA) Guidelines .
This document contains five sections . In addition to this
Introduction, these sections are Public Participation and
Review, Comments ; Responses to Comments , and Appendix A.
The Public Participation section outlines the methods the City
of Huntington Beach has used to provide public review and
solicit input on the Draft Negative Declaration . The Comments
section contains those written comments received from agencies ,
groups , organizations , and individuals as of July 20 , 1992 .
The Response to Comments section contains individual responses
to each comment .
It is the intent of the City of Huntington Beach to include
this document in the official public record related to the
Draft Negative Declaration . Based on the information contained
in the -public record the decision makers will be provided with
an accurate and complete record of all information related to
the environmental consequences of the project .
II . PUBLIC PARTICIPATION AND REVIEW
The City of Huntington Beach notified all responsible and
interested agencies and interested groups , organizations , and
individuals that a Draft Negative Declaration had been prepared
for the proposed project. The City also used several methods
to solicit input during the review period for the preparation
of the Draft Negative Declaration . The following is a list of
actions taken during the preparation, distribution, and review
of the Draft Negative Declaration .
1 . A cover letter and copies of the Draft Negative
Declaration were filed with the State Clearinghouse on
June 16 , 1992 , The State Clearinghouse assigned
Clearinghouse Number 92061043 to the proposed project .
A copy of the cover letter and the State Clearinghouse
distribution list is available for review and
inspection at the City of Huntington Beach, Planning
Department , 2000 Main Street , Huntington Beach,
California 92648 .
2 . Ail offici ;► 1 t.hil•ty k3,0 J,%y tact io,l Cot
the Draft Negative Declaration was established by the
f- State Clearinghouse. It began on June 16, 1992 and
4x ended on June 16 , 1992 . Public comment letters were
accepted by the City of Huntington Beach through July
20 , 1992 .
3 . Notice of the Draft Negative Declaration was published
on the Huntington Beach Independent on June 18 , 1992 .
Upon request , copies of the document were distributed
to agencies , groups , organizations , and individuals .
III . COMMENTS
Copies of all written comments received as of July 20 , 1992 are
contained in Appendix A of this document . All comments have
been numbered and are listed on the following pages . All
comments from letters received have been retyped verbatim in a
comment-response format for clarity. Responses to Comments for
each comment which raised an environmental issue are contained
in this document .
IV. RESPONSE TO COMMENTS
The Draft Negative Declaration No . 92-25 was distributed to
responsible agencies , interested groups , organizations , and
individuals . The report was made available for public review
and comment for a period of thirty (30) days . The public
review period for the Draft Negative Declaration established by
the State Clearinghouse commenced on June 16 , 1992 and expired
on July 16 , 1992 . However , since the Legal Notice for the
negative dec.laration was not published until June 18 , 1992 , the
City of Huntington Beach accepted comment letters through July
20 , 1992 .
Copies of all documents received as of July 20 , 1992 are
contained in Appendix A of this report . Comments have been
numbered with responses correspondingly numbered . Responses
are presented fo:_ each comment which raised a significant
environmental issue .
Several comments do not address the completeness or adequacy of
the -Draft Negative Declaration, do not raise significant
environmental issues , or request additional information. A
substantive response to such comments is not appropriate within
the context of the California Environmental Quality Act
(CEQA) . Such comments are responded to with a "comment noted"
reference . This indicates that the comment will be forwarded
to all appropriate decision makers for their review and
consideration .
Negative Declaration
No . 92-25 -2- ( 1569D)
IiI3F�i�1
Comment • `'-'.,
The City of Huntington Beach Environmental Review Board has received
and reviewed the above referenced project . This project consists of
a request to adopt a "Presentation of Assisted Housing • Analysis
and Programs" report , which would amend the Huntington Beach Housing
Element .
Response :
The comment identifies the project and does not require any response .
HBEB-2 :
Comment :
The Environmental Board concurs that a Negative Declaration is the
appropriate environmental review for this project . The areas of
potential concern appear to be adequately evaluated in the Negative
Declaration .
Response :
The comment has been acknowledged and will be forwarded to
decisionmakers prior to consideration on the proposed project .
HBEB-3 •
Comment :
The Environmental Board recommends approval of Environmental
Assessment Form/Negative Declaration No . 92-25 . If you have
questions or concerns regarding our comments , please contact Carol
Proctor , Review Subcommittee Chairperson for Environmental
Assessment Form No . 92-25 .
Response :
Please Refer to HBEB-2 Response .
DOT-1 :
Comment :
Thank you for the opportunity to review and comment on the Negative
Declaration No . 92-25 Amendment to the City of Huntington Beach
Housing Element . This element proposes to adopt the "Preservation
of Assisted Housing : Analysis and Programs" Report .
Negative Declaration
No . 92-25 -3- (1569D)
Response :
Please refer to HBEB-1 response .
DOT-2 :
Comment :
In the future, should there be new development approved by the city
that is of greater intensity than is presently accounted for in the
General Plan, Caltrans suggests a traffic circulation on state and
local roads . Also, the city should devise mitigation measures to
minimize traffic impacts as part of the traffic study.
Response :
The proposed project will not result in new development that is of
greater intensity than is indicated on the City' s General Plan ..
Please refer to HBEB-2 response .
DOT-3 :
Comment :
We appreciate the opportunity to comment on this document and please
keep us informed of other projects that have potential to impact
state transportation facilities . If you have any questions
concerning these comments , please do not hesitate to contact Aileen
Kennedy of my staff at ( 714 ) 72.4-2239 .
Response :
Please refer to HBEB-2 response .
Negative Declaration
No . 92-25 -4- ( 1569D)
y 1
APPENDIX A
Negative Declaration
No . 92-25 -5- ( 1569D)
ti 4 ,
S';ATE OF CALIFORNIA—BUSINESS AND TRA$TATION AGENCY PETE WILSON, Governor
` DEPARTMENT OF TRANSPORTATION -
DISTRICT 12 �s ,
2501 PULLMA N STREET
SANTA ANA, CA 92705
July 8, 1992
V
Julie Osugi File: IGR/CEQA
. City of Huntington Beach �UL1 `31gg2 Neg. Dec .
Community Development
2000 Main Street Development
Huntington Beach, Ca. 92648 Dept.()'Comm
Subject : No . 92-25 Huntington Beach Housing Element
Dear Ms . Osugi :
Thank you for the opportunity to review and comment on thel
Negative Declaration No . 92-25 Amendment to the City of Huntington;
Beach Housing Element . This element proposes to adopt the}�o^'-1
"Preservation of Assisted Housing: Analysis and Programs " Report . I�
In the future, should there be new development approved by the
city that is of greater intensity than is presently accounted for
in the general plan, Caltrans suggests a traffic study be prepared 2
that would address the impacts to traffic circulation on state and OT-
local roads . Also, the city should devise mitigation measures to
minimize traffic impacts as part of the traffic study.
We appreciate the opportunity to comment on this document and
please keep us informed of other projects that have potential to
impact state transportation facilities . If you have any questions OT-3
concerning these comments , please_ do not hesitate- to contact Aileen
Kennedy of my staff at ( 714 ) 724-2239 .
Sincerely,
ROBERT F J S PH Chief
Advance Planning Branch
cc : Tom Loftus, OPR
Ron Helgeson, HDQTRS Planning -
David Cordova, Traffic Operations
Environmental Board _
CI1 Y Cis HUNTING I-ON BEACH
t.il ..r I nx l�i(1 Huntington Bcach, - iifornia 92648
June 30 , 1992
TO: JULIE OSUGI, ASSISTANT PLANNER
HUNTINGTON BEACH PLANNING DEPARTMENT
FROM: CITY OF HUNTINGTON BEACH L of
ENVIRONMENTAL BOARD
SUBJECT: ENVIRONMENTAL ASSESSMENT FORM NO. 92-25
The City of Huntington Beach Environmental Board has received and
reviewed the above referenced project. This project consists of a
request to adopt a "Preservation of Assisted Housing: Analysis and11BEB
Programs" report , which would amend the Huntington Beach Housing
Element .
The Environmental Board concurs that a Negative Declaration is the
`Ta appropriate environmental- review for this project . The areas of HBEB
potential concern appear to be adequately evaluated in the Negative.
Declaration.
The Environmental Board recommends approval of Environmental
Assessment Form/Negative Declaration No . 92-25 . If you have HBEB-3
questions or concerns regarding our comments , please contact Caro].
Proctor, Review Subcommittee Chairperson for Environmental
Assessment Form No. 92-25 .
cc : Charles Montero, Chair
Roy Richardson, Planning Commissioner
--T--
'STATE OF CALIFORNIA PETE WILSON, Govemot.
GOVERNOR'S OFFICE OF PLANNING AND RESEARCH .....
1400 TENTH STREET _
.SACRAMENTO.CA 95814
Jul 16, 1992
JULIE OSUGI
CITY OF HUNTINGTON BEACH
2000 MAIN STREET
HUNTINGTON BEACH, CA 92648
Subject: NEGATIVE DECLARATION NO. 92-25/ HOUSING ELEMENT NO. 92-1
SCH # 92061043
Dear JULIE OSUGI :
The State Clearinghouse has submitted the above named proposed
Negative Declaration to selected state agencies for review. The review
period is now closed and the comments from the responding agency(ies)
is (are) enclosed . On the enclosed Notice of Completion form you will
note that the Clearinghouse has checked the agencies that have commented.
Please review the Notice of Completion to ensure that your comment
package is complete. If the comment package is not in order, please
notify the State Clearinghouse immediately. Remember to refer to the
project' s eight-digit State Clearinghouse number so that we may respond
s. promptly.
Please note that Section 21104 of the California Public Resources
Code required that:
"a responsible agency or other public agency shall only make
substantive comments regarding those activities involved in a
project which are within an area of expertise of the agency or
which are required to be carried out or approved by the agency . "
Commenting agencies are also required by 'this section to support
their comments with specific documentation. Should you need more
information or clarification, we recommend that you contact the
commenting agency at your earliest convenience.
This letter acknowledges that you have complied with the State
Clearinghouse review requirements for draft environmental documents,
pursuant to the California Environmental Quality Act. Please contact
Tom Loftus at (916) 445-0613 if you have any questions
regarding the environmental review process.
Sincerely,
Christine Kinne
Acting Deputy Director, Permit Assistance
Enclosures
cc: Resources Agency
� orae
1
� PRESERVATION OF
� ASSISTED HOUSING
� Analysis and Programs
� City of Huntington Beach
1
1
1
1
1
CottoNBeland/Associates, Inc.
CITY OF HUNTINGTON BEACH
Draft
PRESERVATION OF ASSISTED HOUSING:
ANALYSIS AND PROGRAMS
Appendix C to the Housing Element
1
' July 17, 1992
' Cotton/Beland/Associates, Inc.
747 E. Green Street, Suite 400
Pasadena, CA 91101
619 S. Vulcan Avenue, Suite 205
�. Encinitas, CA 92024
1
. CITY OF HUNTINGTON BEACH
PRESERVATION OF ASSISTED HOUSING:
' ANALYSIS AND PROGRAMS
TABLE OF CONTENTS
Section Page
i
INTRODUCTION 1
INVENTORY OF UNITS AT RISK 2
COST ANALYSIS 10
COST COMPARISONS 18
RESOURCES FOR PRESERVATION 19
QUANTIFIED OBJECTIVES 22
PROGRAMS FOR PRESERVATION 22
CITY OF HUNTINGTON BEACH
PRESERVATION OF ASSISTED HOUSING:
ANALYSIS AND PROGRAMS
LIST OF TABLES
Page
i
Table 1 Assisted Housing Inventory 3
Table 2 Monthly Basic Rents for Section 8 Units 9
iTable 3 Monthly Rents for Mortgage Revenue Bond Units 10
Table 4 Costs of Transferring Ownership/
' Purchase of Similar Units 13
Table 5 Estimated Tenant Profile of At-Risk Units 16
Table 6 Replacement Costs Per Unit 17
LIST OF FIGURES
iFigure 1 Process for Prepayment Eligible Projects
Under LIHPRHA 7
INTRODUCTION
1
The Huntington Beach Housing Element was adopted in July, 1990 as part of the
1989-1994 update cycle for jurisdictions in the SCAG region. The State
Department of Housing and Community Development has determined the
Element to be in compliance with State law.
This report amends the Huntington Beach Housing Element, and will be
integrated within the Housing Element upon the next periodic review of the
Element in 1994. The purpose of this amendment is to bring the Housing
Element into compliance with a recent amendment of housing element law,
codified in Government Code Section 65583 (a)(8), (c)(6). Under this law,
jurisdictions must evaluate the potential for currently rent restricted low-income
housing units to convert to non-low-income housing and propose programs to
preserve or replace those units.
' Consistent with State requirements, this report includes the following five
components:
1. An inventory of restricted low-income housing projects in the City and
their potential for conversion;
2. An analysis of the costs of preserving and/or replacing the units "at-
risk" and a comparison of these costs;
3. An analysis of the organizational and financial resources available for
preserving and/or replacing the units "at risk";
4. Quantified objectives for the number of "at-risk" units to be preserved;
5. Programs for preserving the "at-risk" units.
The State requires that the analysis include projects that are at risk of converting
during the next two five-year Housing Element update periods. For Huntington
Beach, this period extends from July 1, 1989 to July 1, 1999.
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' 1
INVENTORY OF UNITS AT RISK
1
This section identifies the low income housing units at risk of converting to non-
low income housing uses prior to July, 1999 and evaluates the likelihood of
conversion.
The inventory includes all multi-family rental units assisted under federal, state,
' and/or local programs, including HUD programs, state and local bond programs,
redevelopment programs, and local in-lieu fees, inclusionary, density bonus, or
direct assistance programs. The inventory covers all units that are eligible to
change to non-low income housing uses due to termination of subsidy contract,
mortgage prepayment, or expiring use restrictions. The inventory was complied
by interviews with City staff, the County Housing Authority, HUD, and review of
"Inventory of Federally Subsidized Low-Income Rental Units at Risk of
Conversion" (California Housing Partnership Corporation), and "The Use of
Housing Revenue Bond Proceeds - 1990", (California Debt Advisory
Commission).
Table 1 presents an inventory of all low-income assisted rental housing in
Huntington Beach. The City has nine subsidized rental housing projects in its
' jurisdiction; eight of these projects contain units that are eligible to convert to
non-low income uses before July 1, 1999. Only one project - Huntington Villa
Yorba - is at risk of conversion prior to July 1, 1994.
Surfside Villas is a 75-unit family housing project assisted under HUD's Section
221(D)(4) program with a 20-year Section 8 contract due to expire in the year
2002. Projects financed under the Section 221(D)(4) market rate program alone
have no binding income use restrictions. Affordability for Surfside Villas is,
however, controlled by the 20-year Section 8 contract. When the contract expires
in the year 2002, the owner of Surfside Villas can choose to opt out of Section 8
program as long as a Notice of Intent is filed one year prior to contract
expiration. The conversion potential and costs of preservation associated with
this project will be analyzed in detail in the next Huntington Beach housing
element update.
2
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TABLE 1
CITY OF HUNTINGTON BEACH
ASSISTED HOUSING INVENTORY
Length of
Affordability Earliest Total #
Type(s) of Controls Potential # of Units of Units Tenant Type
Proj. Name Owner: Gov't (including Conversion Subject to in (i.e. Elderly, At-Risk Units Date
Address Name,Address Assistance Sec. 8) Date(s) Conversion Project Family) Bedroom Mix Built Condition
Huntington Villa Yorba Huntington Villa Assoc. HUD 40-year mortgage; 9/93 198 198 Family 21 -for 1965 Goo
16000 Villa Yorba 1800 Ave of the Stars, 236(J)(1) 20-year prepay- 157 -2br
Huntington Beach Ste. 1400 ment option 20 -3br
CA 92648 Los Angeles, CA
90067
Huntington Beach Huntington Beach HUD 40-year mortgage; 4/15/96 66 66 Family 15-for 1975 Good
Gardens Gardens 236(J)(1) 20-year 33-2br
16900 Algonquin c/o Southwest prepayment option 18-3br
Huntington Beach Development Co.
CA 92648 260 Maple Ct.
Ste. 205
Ventura, CA 93003 Section 8 6/25/94 6 66
Wycliffe Gardens Wycliffe Assoc. HUD 231 40-year mortgage; — — 185 Elderly 185-1br 1981 Very.Good
18765 Florida Ave. 202 S. Prospect Ave. No prepayment
Huntington Beach Orange, CA 92669 option
CA 92648
Section 8 15-year contract 3/12/96 185 185
Seabridge Villas JMB Institutional City Multi- 10-year 2/95 69 344 Family 56-1 br 1984 Very G
20251 Cape Coral Ln 875 N. Michigan Ave., Family 13-2br
Huntington Beach Ste. 3900 Revenue
CA 92648 Chicago, II 60611 Bond
Harbor Gateway Lincoln Property City Multi- 10•year 10/95 20 102 Family 14-1 br 1986 Very Good
4691 Warner Ave, 17011 Beach Blvd. Family 6-2br
Huntington Beach Ste. 1400 Revenue
CA 92648 Huntington Beach, CA Bond
92647
m m man r r m m m m M M M s M r
TABLE 1
CITY OF HUNTINGTON BEACH
ASSISTED HOUSING INVENTORY
(continued)
Length of
Affordability Earliest Total #
Type(s) of Controls Potential #of Units of Units Tenant Type
Proj. Name Owner: Gov't (including Conversion Subject to in (i.e. Elderly, At-Risk Units Date
Address Name,Address Assistance Sec. 8) Dat (s) Conversion Pro11'ect Familyy) Bedroom Mix Built Conditio
Rivermeadows Fritz Hoelscher City Multi- 10-year 10/95 31 152 Family 31 -1br 1985 Very Good
8945 Riverbend 4665 MacArthur Ct. Family
Huntington Beach Ste.275 Revenue
CA 92648 Newport Beach, CA Bond
92660
Huntington Village William Lyon &Assoc. City Multi- 10-year 11/96 23 114 Elderly 23-1br 1986 Very Good
16171 Springdale 4921 Birch St. Family
Huntington Beach Ste 101 Revenue
CA 92648 Newport Beach, CA Bond
92660
Huntington Breakers c/o August Financial City Multi- 10-year 7/99 68 342 Family 25-studio 1984 Good
21270 Beach Blvd. Corp. Family (Project refinanced 36-1br
Huntington Beach P.O. Box 22630 Revenue in 1989) 7-2br
CA 92648 Long Beach, CA 90801 Bond
Surfside Villas Goldrich &Kest HUD — — 0 75 Family 31 -2br 1982 Very Go
7795 Neptune 5150 Overland Ave. 221(D)(4) 22-3br
Huntington Beach Culver City, CA 22-4br
CA 92648 902350 Section 8 20-year contract 1 6/15/02 75 1 75
Source: Compiled by Cott o n/B elan d/As s ociates,April, 1992.
Description of At-Risk Projects
' Huntington Beach has three federally assisted rental housing projects at risk of
conversion prior to July, 1999. Two projects -- Huntington Villa Yorba and
Huntington Beach Gardens -- are subsidized under the Section 236(J)(1) program
' and are eligible for mortgage prepayment. Under this program, projects receive
reduced interest mortgage loans from HUD in exchange for low-income use
restrictions on all units in the project. Projects carry 40-year mortgages with the
option to prepay the loan after 20 years and opt out of the affordability controls.
The earliest potential conversion date for the 198-unit Huntington Villa.Yorba
project is May, 1993 and April, 1996 for the 66-unit Huntington Beach Gardens
project.
The other "at-risk" HUDJ project in Huntington Beach is Wycliffe Gardens.
p g Y
Wycliffe Gardens is a 185-unit Section 231 elderly housing project which is not
eligible to prepay its mortgage. However, Wycliffe Gardens maintains a Section
8 contract for all 185 units. The Section 8 contract is due to expire in March,
1996.
' In addition to the three at-risk HUD projects, Huntington Beach has five rental
housing projects assisted under the City's Multi-Family Mortgage Revenue Bond
Program - Seabridge Villas, Harbor Gateway, Rivermeadows, Huntington Village,
and Huntington Breakers. Under this program, the City provides preferential
financing for multi-family rental housing projects in exchange for ten-year low-
income use restrictions on 20 percent of the units in each project. According to
the bond agreements, a total of 211 units in the City's five bond projects are
rent-restricted, although 240 units are currently renting to lower income
households. The 1991 low-income limit utilized in the bond projects is based on
a HUD median family income of $52,200 for the Anaheim-Santa Ana region.
Low-income units in the City's five bond projects are subject to the following
expiration dates. Seabridge Villas is a 344-unit housing project with 69 units set-
aside for lower income households. Use restrictions on Seabridge Villas are
eligible to expire in February, 1995. Harbor Gateway is 102-unit housing project,
with 20 rent-restricted units. Use restrictions on these units are eligible to expire
in October, 1995. The 152-unit Rivermeadows has 31 rent-restricted units. Use
restriction on this project will expire in October, 1995. Huntington Village is a
114-unit project for elderly. Twenty-three units in Huntington Village are subject
to low-income use restrictions due to expire in November, 1996. Huntington
Breakers is a 342-unit project built in 1984 with 68 rent-restricted units. The
project owner refinanced the bond with the City in 1989, and extended
affordability controls until July, 1999.
5
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Conversion Potential
A total of 660 low-income units (25 studio, 381 one-bedroom, 216 two-bedroom,
' and 38 three-bedroom units) are at risk of losing some form of public rental
assistance in Huntington Beach prior to July, 1999. The likelihood that the "at
risk" units will convert to market rate will depend primarily on the availability
and attractiveness of incentives encouraging their continued use as low-income
housing. This section analyzes the potential for conversion based on the legal
provisions and incentives regulating the affordability of these units.
HUD e Mortg ag Prepayment aY g ment Eligible Units: A total of 264 rental units in
Huntington Beach are at risk of converting to non-low-income use through the
process of prepaying HUD Section 236 loans. Prepayment of Section 236 loans
was regulated by the provisions of the Emergency Low-Income Housing
Preservation Act (ELIHPA), otherwise known as Title II of the Housing and
Community Development Act of 1987. This legislation was subsequently
replaced in 1990 by the Low-Income Housing Preservation and Resident
Homeownership Act (LIHPRHA, or Title VI of the National Housing Act of
' 1990). If the owner was eligible for prepayment before September 30, 1991 and
filed a "Notice of Intent" to prepay between November 1987 and December 31,
1990, then the owner has the option to use either ELIHPA or LIHPRHA.
Project owners must have decided which laws to use by February, 1992. After
this date, owners are only eligible to use LIHPRHA, which became effective on
May 8, 1992. Given the potential conversion dates of Huntington Villa Yorba
' and Huntington Beach Gardens as indicated in Table 1, prepayment of both
projects will be regulated by LIHPRHA.
Figure 1 illustrates the process for prepayment eligible projects under LIHPRHA.
Under LIHPRHA provisions, owners of prepayment eligible projects can choose
to retain project ownership in exchange for additional federal incentives, or sell
' their properties under a voluntary sale program. Where owners choose to sell,
tenants, non-profit and governmental entities are provided with an exclusive
12-month negotiating period. Prepayment and conversion of the housing to
1 non-low-income use can only occur if there is no willing buyer to purchase a
project. A Notice of Intent may be filed up to two years prior to the scheduled
prepayment date to indicate the owner's preliminary decision regarding sale of
I property versus stay-in as low-income. Within nine months after filing the Notice
of Intent, the owners must prepare a "Plan of Action" for submittal to HUD. A
Plan of Action must include: any proposed changes in the mortgage or in the
regulatory agreements; a description of federal, state, and local incentives that
,. are being requested as part of the effort to own and develop the property; and
any proposed plans to transfer the title of the property and/or sell.
More specifically, LIHPRHA provides the owners of eligible projects an
opportunity to receive additional federal incentives for projects, enabling them to
raise rents and refinance a portion of their equity, while extending low-income
use restrictions for the remaining useful life of the project. The useful life of a
' 6
Huntington Villa Yorba(Section 236(J)(1))
Huntington Beach Gardens (Section 236(J)(1))
/.ill 's,':'/,.U.i ::.f.%/a%/'fF;•:%,i f,;l,.+/F.+,f Fr':.,/.%i f,: /,/,ram%;:: :f,%f .:ilif friii;•f,',%l.:rii!/.• :;i'f,%/,
4 •
Option 1: Continue low-income restrictions
with HUD incentives
Option 2: Sell to non-profit or government entity
Option 3: Prepay mortgage and convert to 5
' market rate housing
9 Months
i%%� Ff,•i,";•,'•,'7Y/»•/:::+;:r/f;::: :.,,,,F:; •r.'l.':; :::::; ;:.eei;%bit +i ; :,..�,•r,''+.
F
F
''v'i;::i %::::>:»ii:�:�:i :•rir'::ir::;;':i:: i:::::i:%•ri:•:::5::�>.:t•r,':%iif./ffr.';iii:i%fil.:•rY},%s,'ii
- Rent increases
f
-Additional Section 8 subsidies ;
-241(f) equity take-out loan 12 Months
Giii:Li:p:ii::'vi+i:%i:'li:'lJ..ii::.i4i:?ki:!.i:r,.:?!?:ii:i::�?r i'F..%iiry3%r::Yi.?,ii.4ivi.?:!•:?+:fF/.?{Liiii
6 months for HUD and Public Review
Renegotiate
f Ne otiations with No bona fide
to extend income use g
restriction for the usefull HUD fail offer
life of the building
f
3
Note: Refer to page 7 for discussion of " • • • • • • -
I LIHPRHA- Low Income Housing • • •
Preservation and Resident
Homeownership Act • •
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(Ca6a
Figure 1
Process for Prepayment Eligible
Projects Under LIHPRHA
0
' project refers to the expected physical life of a building with normal maintenance
and repairs, as well as replacement of utilities such as plumbing. HUD officials
1 have indicated that the useful life of a building is usually 70 years. Thus, use
restrictions will be extended for an additional 50 years if owners decide to
maintain the projects as low-income under LIHPRHA. HUD will establish
1 standards and procedures for determining when the useful life of a building
expires. Under LIHPRHA, the difference between the tenants' portion of the
rent (30 percent of income) and market rent in Section 236 projects is covered
' by a Section 8 contract for both very low and low-income tenants.
Section 8 Units: Huntington Beach Gardens maintains a Section 8 contract for
six of the project's 66 units. Potential expiration date for this Section 8 contract
' is in June, 1994. Wycliffe Gardens maintains a Section 8 contract for all of the
project's 185 units. The Section 8 contract for Wycliffe Gardens will be eligible
to expire in March, 1996.
1 Basic rent levels are established for each project with a Section 8 contract with
HUD. Basic rent is the maximum Fair Market Rent for an apartment unit. It is
the maximum amount of rent an owner can collect on a unit from 30 percent of
the tenant's income combined with Section 8 subsidies from HUD. As shown in
Table 2, both Huntington Beach Gardens and Wycliffe Gardens are receiving
substantially lower basic rents than average market rate rents in the City or than
the maximum Fair Market Rents for Orange County. The projects can
potentially command higher rents if the owners decide to opt out of the Section
I8 program and convert to market rents.
The underlying Section 236 mortgage on Huntington Beach Gardens is subject to
1 LIHPRHA (described above). Under LIHPRHA, project owners can request
additional financial incentives from HUD if they choose to extend the length of
affordability controls on the project. As long as use restrictions on the Section
' 236 mortgage or an approved Plan of Action pursuant to LIHPRHA are in
effect, the Section 8 contract is likely to be renewed. Therefore, the potential
expiration of the Section 8 contract for Huntington Beach Gardens will be
' dependent upon the negotiations on the Plan of Action between HUD and the
property owners.
' Wycliffe Gardens is funded under HUD's Section 231 program. Low-income use
restrictions on the project are locked-in for the full 40-year mortgage term which
is not due to expire until April, 2021. Also, as the project is owned by a non-
profit entity, its long-term affordability is fairly secure. Discussion with the
management of Wycliffe Gardens indicates that the project owners will continue
to renew the Section 8 contract.
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i ' TABLE 2
MONTHLY BASIC RENTS FOR SECTION 8 UNITS
1
Basic Rent
(Ma)dmum Fair Market Rent (2)
by Pro'ect Huntington (3)
Beach Orange County
Huntington Average Market Maximum Fair
Unit Size Beach Wycliffe Rents Market Rent
Gardens 1 Gardens 1
' One-bedroom $281 $527 $755-$990 $ 764
Two-bedroom ,$317-$329 $700-$1,025 $ 900
Three-bedroom $361-$510 ---- $850-$1,260 $1,125
' Source: Compiled by Cotton/Beland/Associates, May, 1992.
Notes: (1) As reported by building managers of Huntington Beach Gardens and Wycliffe
Gardens, May, 1992.
(2) Survey of rental rates by the City of Huntington Beach, July, 1992. Beach.
(3) Orange County Housing Authority, May, 1992. This HUD fair Market Rents
schedule includes utility costs to be paid by tenants.
' Mortgage Revenue Bond Units: A total of 211 low-income units (25 studio, 160
one-bedroom, and 26 two-bedroom units) in five bond projects are at risk of
converting to non-low-income use prior to July, 1999. Table 3 presents the
' differentials in rental rates between the rent-restricted and market-rate units in
each of the five multi-family mortgage revenue bond projects in Huntington
Beach. By analyzing the potential increase in rents achievable through
' conversion to market rate, the relative incentive for conversion can be assessed.
The difference between rental rates in market rate and rent-restricted units are
more significant in Seabridge Villas, Harbor Gateway, and Huntington Breakers
than in Rivermeadows and Huntington Village. Rent differentials between
restricted and unrestricted units are most significant in Seabridge Villas, ranging
potentially from $175 to $275 for a one-bedroom unit and $190 to $325 for a
two-bedroom unit. Rent differentials in Huntington Breakers can potentially
range from $110 for a studio unit, $150 to 175 for a one-bedroom, and $160 to
$185 for a two-bedroom units. In Harbor Gateway, the maximum rent
differential is $150 for a one-bedroom unit. Given the rental rates shown in
Table 3, there are definite monetary incentives for the owners of Seabridge
' Villas, Harbor Gateway, and Huntington Breakers to convert their units to
market rate. If there were a conversion, the economic impacts on the low-
income tenants in these three projects would be significant.
9
' TABLE 3
MONTHLY RENTS FOR MORTGAGE REVENUE BOND UNITS
Rent-Restricted Units (1) Market Rate Units (2)
' Project Studio 1-Bdrm 2-Bdrm Studio 1-Bdrm 2-Bdrm
Seabridge Villas ---- $700 $875 ---- $875-$990 $1,06541,200
' Harbor Gateway $875 $975 ---- $925-$1,025 $1,025
Rivermeadows $750 $790-$860
Huntington Village ---- $710-$725 ---- ---- $755-$778 ----
Huntington Breakers $625 $750 $985 $735 $900-$925 $1,14541,170
Rental Range $625 $700-$875 $875-$985 $735 $755-$1,025 $1,02541,200
' Source: Compiled by Cotton/Beland/Associates, May, 1992.
Notes: (1) Compiled from Yearly Housing Bond Issuance Reports for Fiscal Year 1990-91, and
updated by telephone interviews with building management of each project.
' (2) Compiled from telephone interviews with building management of each project and
supplemented with information provided by the City of Huntington Beach.
COST ANALYSIS
' The following discussion examines both the cost of preserving the units at risk in
Huntington Beach ,and the costs of producing new rental housing comparable in
' size and rent levels to replace the units which could convert. A cost estimate has
been developed for each option based on information provided from the County
Housing Authority, the project's management company, and local developers.
Actual costs involved in each option will also depend on the rental and real
estate market situations at the time the low-income use restrictions on the
projects expire.
' Preservation Costs
Preservation of the at risk units can be achieved in different ways depending on
the financing mechanisms used and the legal provisions and incentives regulating
the affordability of these units. Options available for the preservation of the at-
risk units include: 1) preserve the projects as low-income by offering additional
federal incentives to the projects; 2) facilitate the transfer of ownership of these
projects to or purchase of similar units by non-profit organizations; 3) refinance
mortgage on projects to extend affordability controls; or 4) assist qualified
' 10
1 • •
tenants in obtaining Section 8 certificates from the Orange County Housing
Authority.
' All but the refinancing option are applicable to HUD prepayment eligible
projects. At-risk units primarily subsidized with Section 8 contracts may be
preserved by transferring ownership, purchasing similar units, or using Section 8
certificates. At-risk units in City mortgage revenue bond projects may be
preserved by purchasing similar units, using Section 8 certificates, or refinancing
the bonds. The following estimates the costs associated with each option for at-
risk projects in Huntington Beach.
' Continue as Low-Income with Federal Incentives: Under LIHPRHA, HUD
mortgage prepayment eligible projects may choose to continue as low-income in
exchange for additional federal incentives. Incentives include: rent increases to
guarantee an eight percent return on project investment; Section 8 contract to
cover both very low and low-income tenants; and 241(f) equity take-out loan.
Once extended, affordability controls on the project will remain effective for the
remaining useful life (approximately an additional 50 years) of the project.
HUD has established the Federal Cost Limit to determine a project's eligibility
for full federal incentives. As long as a project's annual preservation rent (eight
' percent return on equity, debt services on rehab loan and HUD first mortgage,
operating expenses, and reserves combined) does not exceed the Federal Cost
Limit, the owner may file a Plan of Action for Full federal incentives. Under
' LIHPRHA, the Federal Cost Limit is currently set at 120 percent of the Section
8 Fair Market Rent or 120 percent of the local market area rent, whichever is
greater.
' As previously shown in Table 2, Section 8 Fair Market Rents in Huntington
Beach are substantially lower than market rents. Using Fair Market Rents as
' estimates, monthly Federal Cost Limit for Huntington Villa Yorba is at least
$2,158,128 and for Huntington Beach Gardens is $736,920. The actual cost
comparison to determine eligibility for federal incentives will be performed by
HUD officials when the project owners file a Notice of Intent.
Transfer Ownership/Purchase of Similar Units: Another preservation option is
' to transfer ownership of the projects with at risk units to community-based non-
profit or government entity, such as the Orange County Housing Authority. By
transferring the ownership of these projects to non-profit housing organizations,
low-income use restrictions can be secured, and the projects will become eligible
for a greater range of government assistance programs.
However, transfer of ownership is more likely an option for HUD prepayment
eligible projects than for City bond projects. Because the bond-financed projects
contain only 20 percent rent-restricted units, it is unlikely that the current owners
would choose to sell these projects at rates affordable to non-profit entities.
Therefore, with respect to bond-projects, it would be more feasible to purchase
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similar existing units by non-profits. Also, since Wycliffe Gardens is already
owned by a non-profit organization, the following analysis is only relevant to the
' other seven projects with at-risk units.
Assessed value for a piece of property is established primarily for tax purposes.
' Re-assessment of property value occurs only when there is a transfer of
ownership; otherwise, inflation on the assessed value is capped at an annual rate
of two percent. Therefore, a property's assessed value is usually lower than its
current market value. However, with the absence of current market value
information on the at-risk projects, current assessed values shown in Table 4 are
used to establish an order of magnitude reference for estimating preservation
' costs.
Given the good condition of the at-risk projects, maintenance costs are likely to
be low. Therefore, it is assumed that rental income and HUD Section 8
subsidies will defray monthly mortgage and maintenance costs. Under
LIHPRHA, HUD will provide mortgage loan insurance on acquisition loans for
up to 95 percent of the equity to priority purchasers. If, theoretically, Huntington
' Villa Yorba and Huntington Beach Gardens were sold to qualified non-profits
prior to extending the 20-year mortgages with the current owners, total
preservation cost for these two projects would amount to $4,595,047, the sum of
their valuations. A total downpayment cost of $229,752 would be required -
$158,822 for Huntington Villa Yorba and $70,930 for Huntington Beach Gardens.
Assuming a 10 percent downpayment to purchase existing units similar to the at-
risk units in the bond projects, the potential buyers will need to secure mortgage
loans totaling $15,671,658 and total downpayments of $1,741,296, for the
purchase of units similar to those in Seabridge Villas, Harbor Gateway,
Rivermeadows, Huntington Village, and Huntington Breakers. Table 4
' summarizes the estimated costs associated with transfer of ownership of each
project.
1
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' TABLE 4
COSTS OF TRANSFERRING OWNERSHIP/PURCHASE OF SIMILAR UNITS
' At-Risk Units
Assessed At-Risk Units Mortgage
Project Value Downpayment Loan
Huntington Villa Yorba
Rent-Restricted Units (100%) $ 3,176,447 $158,822 $ 3,017,624
Huntington Beach Gardens
Rent-Restricted Units (100%) $ 1,418,600 $ 70,930 $ 1,347,670
Seabridge Villas
' Entire Project $38,338,740
Rent-Restricted Units (20%) $ 7,667,748 $766,775 $ 6,900,973
Harbor Gateway
Entire Project $ 8,149,137
Rent-Restricted Units (20%) $ 1,629,827 $162,983 $ 1,466,844
' Rivermeadows
Entire Project $16,402,832
Rent-Restricted Units (20%) $ 3,280,566 $328,057 $ 2,952,509
Huntington Village
Entire Project $ 6,935,141
Rent-Restricted Units (20%) $ 1,387,028 $138,703 $ 1,248,325
Huntington Breakers
' Entire Project $17,238,920
Rent-Restricted Units (20%) $ 3,447,784 $344,778 $ 3,103,006
Total Rent-Restricted Units $22,008,000 $1,971,048 $20,036,952
Source: Current assessed values obtained from the Orange County Assessor's Office, May,
1992.
' 13
' Refinance Mortgage Revenue Bond: Another option to preserve the low-income
use restrictions on the five City multi-family housing bond projects is to refinance
the mortgage revenue bonds that were issued to the respective owners.
' If refinanced the J ro'ects would be re uired b the 1986 Tax Reform Act to
P q Y
commit their 20 percent low-income units for the greater of 15 years or as long
' as the bonds are outstanding. City records indicate a bond total of $25,000,000
was issued to Seabridge Villas, $8,165,000 to Harbor Gateway, $10,000,000 to
Rivermeadows, $7,700,000 to Huntington Village, and $16,000,000 to Huntington
' Breakers.
To ensure the affordability of the 211 bond-financed income restricted units in
Huntington Beach, the City can negotiate with the project owners to refinance
the bonds. The costs to refinance each bond would therefore include the
difference in interest rates on the remaining debt between the previous and the
' renegotiated bond packages, an issuance cost which amounts to approximately 3
percent of the bond to be paid upfront by the City, and administrative costs.
Project owners may not have a financial incentive to refinance unless the bond
structures allow for interest rates that are well below rates on the initial bonds,
and are combined with other incentives. More often, property owners prefer to
either sell the property or to seek refinancing opportunities from private lending
institutions and therefore be able to opt out of affordability controls.
The ten-year use restrictions on the Huntington Breakers low-income units were
initially eligible to expire in 1994. The City refinanced the mortgage on
Huntington Breakers in 1989 and extended the use restrictions on 20 percent of
the units for an additional 5 years until 1999. The City has experience and
' technical expertise in bond refinancing and has expressed the intention to
preserve the at-risk units in bond projects by encouraging bond project owners to
refinance. The City's Redevelopment Housing Set-Aside fund could be used to
refinance mortgage revenue bonds.
Rent Subsidy: When the low-income use restrictions on the at-risk units expire
and units are converted to market rate, Section 8 certificates can be used to
subsidize the property owners for extending the affordability of those units.
Under the Section 8 certificate program, HUD pays owners the difference
between what tenants can pay (defined as 30 percent of household income) and
what HUD and the local Housing Authority estimate to be Fair Market Rent on
the unit.
Section 8 certificates are only available to very low-income households -
households earning less than 50 percent of the County median income. The 1992
HUD median income for the Anaheim-Santa Ana region is $52,700. Assuming
' the average very low-income household has an income at 30 percent of the
regional median income, the average income of Section 8 recipients in Orange
County would be $15,810. Under these assumptions, monthly housing costs
affordable to Section 8 recipients are estimated to be approximately $395 (based
' 14
on HUD's definition of affordable housing costs as 30 percent of household
income).
' According to the Orange County Housing Authority, Fair Market Rent is $630
for a studio unit, $764 for a one-bedroom unit, $900 for a two-bedroom unit, and
$1,125 for a three-bedroom unit. Thus, the difference between housing cost
' affordable to very low-income households and the Fair Market Rent is $235 for a
studio unit, $369 for a one-bedroom unit, $505 for a two-bedroom unit, and $730
for a three-bedroom unit.
' Because Section 8 certificates are only available to very low-income households,
use of Section 8 subsidies as a means of extending affordability controls on the
City's at-risk units would not benefit tenants that are low-income. Table 5
estimates the number of very low income tenants in each at-risk project.
Approximately half (328) of the rent-restricted units are currently occupied by
' very low-income households. Given the bedroom mix in each project and the
distribution of very low-income households as shown in Table 5, there are an
estimated four studio, 227 one-bedroom, 85 two-bedroom, and 12 three-bedroom
' rent-restricted units currently occupied by very low-income households. Section 8
subsidies required to maintain the affordability of these units would be
approximately $136,388 monthly, or $1,636,656 annually.
' Furthermore, the Orange County Housing Authority Section 8 program has a
waiting list of over 15,500 applicants and a waiting period of two to eight years.
The County Housing Authority Section 8 program has closed applications since
November, 1991, though it plans to reopen later this year.
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' TABLE 5
ESTIMATED TENANT PROFILE OF AT-RISK UNITS
' Total Lower-
Very Low-Income Low-Income Income
' Project Households Households Households
HUD Projects
' Huntington Villa Yorba 99 99 198
Huntington Beach Gardens 6 60 66
Wycliffe Gardens 185 0 185
' Bond-Financed Projects
Seabridge Villas 10 59 69
Harbor Gateway 2 18 20
' Rivermeadows 4 27 31
Huntington Village 12 11 23
Huntington Breakers 10 58 68
Total 328 332 660
Source: Compiled by Cotton/Beland/Associates, May, 1992.
' Note: The Yearly Housing Bond Issuance Reports include the number of very low and low-
income households currently residing in the projects. In several instances, there are
' more lower income households in these projects than the required 20 percent. The
distribution of very low and low-income households shown in this table has been adjusted
to reflect only the 20 percent requirement, assuming half of the households currently
' classified as very low-income under the bond program may not qualify for Section 8
subsidies. Also, the table assumes half of the tenants in Huntington Villa Yorba are very
low-income households.
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Replacement Costs
' This section analyzes cost of constructing new low-income housing units to
replace the 660 assisted units in HUD and bond projects in Huntington Beach
should they be converted from low-income uses. The cost of developing new
' housing depends upon a variety of factors such as density, size of the units (i.e.
number of bedrooms), location and related land costs, and type of construction.
Table 6 shows the average per unit development cost by unit type in Huntington
Beach. Based on estimates by City staff, per unit development cost in
Huntington Beach is approximately $111,710 for a studio, $122,954 for a one-
bedroom, $140,080 for a two-bedroom, and $153,553 for a three-bedroom unit.
' These estimates are based on a construction cost of $63 per square foot and
include permit processing fees, infrastructure connection fees, and impact fees.
Using the per unit cost estimates shown in Table 6, the cost to replace the 660
' assisted units in Huntington Beach would run approximately $85,730,548,
requiring a minimum downpayment of $8,573,055. This amount is substantially
higher than the $22,008,000 preservation cost and related $1,971,048
' downpayment under a transfer of ownership scenario, the $1,636,656 annual
Section 8 subsidies, or the costs (plus administrative fees) to refinance the bonds.
' TABLE 6
REPLACEMENT COSTS PER UNIT
Average Construction Total
' Unit Type Unit Size Land Cost/Unit Cost/Unit Costs Unit
Studio 500 sq. ft. $75,000 $36,710 $111,710
One-bedroom 650 sq. ft. $75,000 $47,954 $122,954
' Two-bedroom 900 sq. ft. $75,000 $65,080 $140,080
Three-bedroom 1,100 sq. ft. $75,000 $78,553 $153,553
' Source: City of Huntington Beach, July, 1992.
Note: Per unit costs are estimated on the basis of minimum sizes according to the City's
' Zoning Code. Cost estimates include: permit fees for building, electrical, plumbing and
mechanical permits; impact fees for parks and recreation, schools, library, and traffic;
and infrastructure connection and impact fees for sewer (City), sewer (County), water,
and water conservation.
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COST COMPARISONS
' Ownership transfer usually involves the project in its entirety and thus is more
Owne h p y p J y ,
likely to be used by HUD prepayment eligible projects rather than bond projects
where only a portion of the project units are reserved for lower-income
households. Also, the costs of transferring ownership of a project to a public or
non-profit agency are based on the projects' current values, which are usually
1 marked-up to incorporate inflation and profit for the existing owners. Purchase
of similar units by non-profit organizations is also costly and purchasing
opportunities cannot be guaranteed. The total cost to preserve the 660 at-risk
units in Huntington Beach or to maintain the assisted housing stock by means of
transferring ownership and purchasing similar units is estimated at $22,008,000,
with a total downpayment cost of $1,971,048.
Use of Section 8 subsidies has several drawbacks. First, only very low income
households are eligible, rendering only 328 households of the total 660 at-risk
' households in the City eligible for assistance. In addition, rent subsidies do not
ensure long-term unit affordability. The costs associated with rent subsidies are
high, requiring approximately $1,636,656 annually.
HUD is committed to providing subsidies for the preservation of the federally
assisted units. For prepayment eligible projects, the most cost-effective option is
' to encourage the owners to maintain the projects as low-income with federal
incentives.
Because the costs to refinance an existing bond under the current owner(s) are
' based primarily on the outstanding debt, refinancing the existing bond is probably
the least costly preservation option for bond-financed projects. In 1989, the City
' refinanced the mortgage on Huntington Breakers using a variable interest rate.
The City can use a similar approach to refinance other bond projects and
preserve the at-risk units.
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RESOURCES FOR PRESERVATION
' This section discusses two types of resource available for preserving "at risk"
YP p g
units: a) financial resources potentially available to purchase or supplement
' existing units, or to build replacement housing, and b) entities with the interest
and ability to purchase and/or manage replacement units.
' Financing/Subsidy Resources
There are a variety of potential funding sources available for potential
acquisition, subsidy, or replacement of units at risk. Due to both the high costs
of developing and preserving housing and limitations on both the amount and
uses of funds, a variety of funding sources may be required.
HUD Funds: Under LIHPRHA, IIUD will provide the owners of Huntington
Villa Yorba and Huntington Beach Gardens with incentives which enable them
to raise rents and refinance a portion of their equity, while extending low-income
use restrictions for the remaining useful life of the projects (approximately 50
additional years). The difference between the tenant's portion of the rent and
' market rent will be covered by Section 8 contracts. Should a nonprofit instead
take ownership of the project, the following HUD incentives would be offered:
' o Mortgage insurance for acquisition loans for 95 percent of equity.
o Project-based Section 8 contracts, with HUD-subsidized rents set at
' levels high enough to provide an eight percent return to owners who
retain the project or to cover debt service on an acquisition loan for
new purchasers;
0 Grants to non-profit buyers that would fill any gap between fair
market rent or local market rent (whichever is higher) and allowable
rents.
Redevelopment Set-Aside: The City's Redevelopment Agency has accumulated
approximately $3,000,000 in the Redevelopment Housing Set Aside Fund,
available for future affordable housing activities. The Housing Set Aside Fund
can be used for a variety of affordable housing construction and preservation
activities including: land disposition and write-downs, site improvements, loans,
grants, issuance of bonds, land and building acquisition by Agency, direct housing
construction, housing rehabilitation, rent subsidies, redevelopment funds, and
administrative costs for non-profit housing corporations. The City is in the
' process of developing programs and guidelines for the expenditure of the
Housing Set Aside Fund. The Set-Aside Fund can potentially be a significant
funding source for the preservation of assisted housing.
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CDBG Funds: Through the Community Development Block Grant (CDBG)
program, HUD provides funds to local governments for funding a wide range of
' community development activities. As an entitlement jurisdiction, Huntington
Beach receives CDBG monies directly from HUD which the City utilizes for a
variety of housing and social service activities. For Fiscal Year 1991-92, the City
anticipates to receive approximately $2,004,947 of CDBG funds, of which
' $700,000 is committed to housing rehabilitation and $85,650 is committed to
homeless services and facilities. The City can potentially direct a portion of the
uncommitted CDBG funds toward the preservation of assisted housing.
' General Revenues: The City does not currently fund housing programs out of
general revenue funds and, consequently, does not have any general revenue
funds set aside for housing.
Housing Authority Reserves: Other potential sources of funding are the reserves
of housing authorities. The Orange County Housing Authority currently has
roughly $8.5 million to use to provide housing opportunities throughout the
County. This money is subject to some restrictions and priority is given to
' projects which provide for the leverage and recycling of funds.
Orange County Affordable Housing Clearinghouse: The Orange County
' Affordable Housing Clearinghouse is a consortium of lending institutions and
community groups focused on providing funds for affordable housing through
team lending. Sixteen lending institutions are currently members of the coalition.
' Because the coalition is new and is still in the process of being set up, it does
not currently have a track record in the community. However the financial assets
and expertise of coalition members suggest that this should be a significant
source of funds for low-income housing in Orange County in the future.
Administrative Resources
An alternative to providing subsidies to existing owners to keep units available as
low income housing is for public or non-profit agencies to acquire or construct
housing units to replace "at risk" units lost to conversion. Non-profit ownership
assures the future availability of purchased units as low-income housing. Several
public and non-profit agencies are currently active or have expressed an interest
in purchasing and/or managing at-risk, low-income housing projects in Orange
' County.
The Orange County Community Housing Corporation (OCCHQ: OCCHC is the
oldest and largest non-profit affordable housing developer in Orange County.
With assets exceeding $6.6 million, OCCHC has been involved in 14 housing
projects for very low-income large families throughout Orange County.
Developments by OCCHC include: 1) Domingo Avenue Apartments (28 units),
Newport Beach; 2) Berry Street Apartments (4 units), Anaheim; 3) Coffield
Apartments (24 units), Dana Point; 4) Irvine Condominiums (6 units), Irvine; 5)
' Buena Street Apartments (28 units), Garden Grove; and 6) Keel Street Shelter
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' (8 units), Garden Grove. OCCHC participates in the management as.well as..the
development of low income housing and has expressed interest in "at risk" units
in Huntington Beach. Contact: Allen Baldwin (714) 558-6006.
' Civic Center Barrio Housin Corporation: Civic Center Barrio Housing
g rP g
Corporation also has considerable experience in, and resources for, the
' development and or management of low income housing. Barrio Housing owns
and operates over 130 housing units in Orange County and San Diego County
and has been involved in the development of over 400 affordable units. Barrio
' Housing has staff of three full time employees and has been operating in Orange
County for 16 years. Representatives from Barrio Housing indicate that the
corporation would be interested in preserving at-risk units in Huntington Beach.
Contact: Alana Baker (714) 835-0406.
Council of Orange County, Society of Saint Vincent De Paul: The Society of
Saint Vincent De Paul provides many social services in Orange County such as
food distribution and medical services. The Society is also in the process of
developing a congregate housing project in Orange County and plans to continue
' to expand its housing operations. Including the value of donated time and goods,
the Society has an annual revenue of $9.8 millon and employs a staff of 75
persons. The Society has expressed interests in preserving at-risk housing in
' Huntington Beach. Contact: Scott Mather (714) 633-9195.
HomeAid: HomeAid is a non-profit corporation established by the Building
' Industry Association of Southern California to help alleviate the homeless
problem in the region. The HomeAid program has a dual focus: to construct or
renovate shelters for the transitionally homeless and to develop housing for lower
' income families and individuals. Representatives of HomeAid have expressed
the agency's interest in preserving at-risk housing in Orange County.
Projects completed or in progress in Orange County by HomeAid include: 1)
' Thomas House.(Garden Grove) - refurbishing of an eight-unit complex for
homeless families; 2) Interval House (central Orange County) - rehabilitation of
an existing home for battered women and their children; 3) New Vista Shelter
(Fullerton) - rebuilding of an apartment building for homeless families; 4) Don
R. Roth Family Center (Orange) - construction of three new duplexes for
homeless families; 5) Anchor House (San Clemente) - rehabilitation of a duplex
for homeless families; 6) Anaheim Interfaith Shelter (Anaheim) - refurbishing
and expansion of a single-family home for homeless families; 7) Huntington
Youth Shelter (Huntington Beach) - refurbishing of a historic farmhouse and
' addition of 12 new bedrooms for a facility to house homeless and runaway teens;
8) Santa Ana YWCA Second Stage Housing (Santa Ana) - refurbishing of a four-
unit apartment building for homeless women and their children; 9) Friendship
' Shelter (Laguna Beach) - refurbishing and enlarging of a detached home to
provide shelter for homeless men and women; and 10) Precious Life Shelter
(north Orange County) - expansion and rehabilitation of a home for unwed
' mothers and their newborn babies. Contact: Elisha Back (714) 396-9993.
' 21
' Southern California Presbyterian Homes (SCPH): SCPH is an experienced non-
profit housing developer based in Glendale. Utilizing a variety of federal, state
and local funds, SCPH has developed the following six low-income independent
' living facilities in Southern California: 1) Casa de la Paloma (167 units),
Glendale; 2) Sycamore Terrace (100 units), Upland; 3) Park Paseo (100 units),
Glendale; 4) Royal Vista Terrace (75 units), Duarte; 5) Covenant Manor (100
' units), Long Beach; and 6) Guadalupe Manor (71 units), Fountain Valley. SCPH
is also constructing a 22-unit affordable senior housing project funded through
the City of Glendale's tax credit programs. Target residents for this project are
those with limited income but not qualified for rental assistance under HUD's
very low income category. Contact: Benjamin Beckler (818) 247-0420.
QUANTIFIED OBJECTIVES
Units at Risk of Conversion Before July 1, 1994
A total of 198 units in Huntington Villa Yorba are eligible to convert to market
rate housing during this time frame.
' Units at Risk of Conversion Between July 1, 1994 and July 1, 1999
' A total of 462 units in seven assisted housing projects are at risk of converting to
non-low-income use between July 1, 1994 and July 1, 1999.
It is the objective of the City to either retain or replace as low-income housing
' all 660 units eligible to convert between July, 1989 and July 1, 1999. A
comparison of current costs of preservation and current potential resources
' available indicates that preservation of the "at risk" units may be feasible. The
City will continue to pursue new opportunities to replace low-income restricted
units lost through conversion to market rate units.
PROGRAMS FOR PRESERVATION
The City plans to monitor "at risk" housing units to ensure units will continue as
' low income housing. The two at-risk HUD projects will most likely be preserved
through incentives under LIHPRI-iA, and affordability controls on the five bond
projects can most effectively be extended through bond refinancing. To the
extent these approaches are not effectuated, the City will subsidize units and/or
work with non-profit housing groups in the community to explore possible new
construction of replacement housing by non-profits or non-profit acquisition of
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' existing buildings with "at risk" units The following are specific actions that the
City will take to protect or replace at risk' units.
' Policies and Programs
Policy 1: Attempt to preserve low-income housing in the City that is at risk of
' converting to market rate by monitoring the status of prepayment-eligible and
bond-financed projects, and identifying financial and organizational resources
available to preserve these units.
' Policy 2: Pursue a program that would offer small developers an opportunity to
purchase "at-risk" units as a means of satisfying affordable housing requirements
' that may be conditioned on their projects.
Monitor Units at Risk: Regularly monitor the status of the at-risk projects.
' Pursuant to Government Code Section 65863.10, the City will inform the tenants
of the status of their projects at least one year in advance of the potential
conversion date.
' Time Frame: .The earliest potential conversion dates for "at risk" projects in
Huntington Beach are as follows.
' Project Project No. of Units Potential
Name Addres At Ris Conversion Date
' Huntington Villa Yorba 16000 Villa Yorba 198 9/93
Seabridge Villas 20251 Cape Coral Lane 69 2/95
Harbor Gateway 4691 Warner Avenue 20 10/95
' Rivermeadows 8945 Riverbend 31 10/95
Wycliffe Gardens 18765 Florida Avenue 185 3/96
Huntington Beach Gardens 16900 Algonquin 66 4/96
' Huntington Village 16171 Springdale 23 11/96
Huntington Breakers 21270 Beach 68 7/99
Responsible Agency: Department of Community Development.
Funding Source: Department Administrative Budget.
' Pursue Bond Refinancing: Seabridg e Villas, Harbor Gateway, Rivermeadows,
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Huntington Village, and Huntington Breakers are financed under the City's
' Mortgage Revenue Bond Program. The City will coordinate with the owners of
at risk projects to encourage bond refinancing to extend low income use
restrictions for a minimum of 15 years starting from the issuance of the initial
' bonds.
Time Frame: Contact project owners at least 18 months prior to expiration to
express City's desire to refinance.
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rResponsible Agency: Department of Community Development.
Funding Source: Department Administrative Budget, City Housing Funds.
' Work with Potential PriorityPurchasers: Establish contact with public and non-
profit agencies interested in purchasing and/or managing units at risk to inform
' them of the status of at-risk projects. Where feasible, provide technical
assistance to these organizations with respect to financing. Coordinate with the
Orange County Affordable Housing Clearinghouse in assisting priority purchasers
' to obtain financing.
Time Frame: Establish contact by end of 1992.
Responsible Agency: 'Department of Community Development.
' Funding Source: Department Administrative Budget, City Housing Funds. .
Facilitate Tenant Purchase of Units: Tenant purchase of at-risk units is a
feasible preservation option when owners of Huntington Villa Yorba and
Huntington Beach Gardens file Notices of Intent to indicate the desire to sell the
projects or negotiation between the owners and HUD fail to preserve the two
' projects as low-income housing. The City will facilitate tenant purchase of the
two projects by providing technical assistance in financing, organizing tenant
associations as priority purchasers, coordinating with non-profit housing
' organizations, and encouraging tenant participation in the prepayment process.
The City will begin working with the Orange County Affordable Housing
Clearinghouse to establish a program to provide preferential financing, and
' potentially downpayment assistance, for low-income tenants wishing to purchase
their units.
' Time Frame: Begin coordination with the Orange County Affordable Housing
Clearinghouse by the end of 1992.
Responsible Agency: Department of Community Development.
FundingSource: HOPE and HOME rants, CDBG, Orange Count
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Affordable Housing Clearinghouse, Housing Authority
' Reserves.
Tenant Education: The City will work with tenants of "at risk" units in danger of
converting. The City will provide tenants with education regarding potential
tenant purchase of buildings and act as a liaison between tenants and nonprofits
potentially involved in constructing or acquiring replacement housing. The City
will also provide tenants in "at risk" projects information regarding Section 8 rent
subsidies through the Orange County Housing Authority.
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