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Home My WebLink AboutAffordable Housing Component AB 1290 Implementation Plan Jan tS_ �� Council/Agency Meeting Held: 0 Deferred/Continued to: Appro ed ❑ Conditionally Approved ❑ Denied City erk' Sign u e Council Meeting Date: 12/17/2007 Department ID Number: ED 07-51 CITY OF HUNTINGTON BEACH REQUEST FOR REDEVELOPMENT AGENCY ACTION SUBMITTED TO: HONORABLE CHAIR AND RED�V4DA, OPMENT AGENCY MEMBERS SUBMITTED BY: PENELO/ CUL RETH-GRAFT, EXECUTIVE DIRECTOR PREPARED BY: STANLEY SMALEWITZ, DEPUTY EXECUTIVE DIRECTORr � SUBJECT: APPROVE THE AFFORDABLE HOUSING COMPONENT AB 1290 IMPLEMENTATION PLAN JANUARY 2005 - DECEMBER 2009 MID- TERM UPDATE Statement ofissue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s) Statement of Issue: The California Redevelopment Law requires Redevelopment Agencies to prepare and adopt Five-Year Implementation Plans and Mid-Term Updates. On November 15, 2004, the Agency adopted the Five-Year Implementation Plan for the Huntington Beach Merged Project Area and, in 2002, the Agency adopted the Five-Year Implementation Plan for the Southeast Coastal Redevelopment Project Area. In 2004, the Agency also adopted a Ten-Year Housing Compliance Plan to supplement the Implementation Plan materials. In December, 2007, pursuant to California Redevelopment Law, the Agency will be asked to review and adopt a mid-term update for the Huntington Beach Merged Project Area and a new Five-Year Implementation Plan for the Southeast Coastal Redevelopment Project Area. The attached Affordable Housing Component Implementation Plan (2005-2009) satisfies all the applicable affordable housing reporting obligations. Funding Source: None required Recommended Action: Motion to: 1. Adopt the Affordable Housing Component AB 1290 Implementation Plan January 2005 — December 2009 Mid-Term Update Report Alternative Action(s): Do not approve the Affordable Housing Component Implementation Plan and direct staff regarding modifications to the mid-term housing component. r In the early 1990's the City initiated a policy requiring affordable housing units to be integrated into new market rate housing developments. The City formalized the policy into an Inclusionary Housing Ordinance in 2004 that imposes income and affordability requirements on new residential development with three or more units. The Ordinance allows projects with three to nine units to pay a fee in-lieu of producing the units; these funds will be deposited in the Affordable Housing Trust Fund. The Ordinance also provides the City Council with the latitude to allow developers, in limited circumstances, to transfer the responsibility for producing the units to the Agency in return for making a contribution to the "Housing Development Fund". Both the Affordable Housing Trust Fund and the Housing Development Fund are administered by the Economic Development Department. The bulk of the Agency assistance to affordable housing projects and programs is derived from Set-Aside funds. However, the City also receives HOME Program and Community Development Block Grant (CDBG) funds from the United States Department of Housing and Urban Development (HUD); these funds are transferred to the Agency to supplement the Set-Aside. Agency Activities Since the late 1980's, the Agency has assisted over 1,000 affordable housing units. These projects are named and described in the appendices to this report. These projects can be summarized as follows: 1. In 1986, the Agency developed the 164-unit Emerald Cove project. Fifty percent (50%) of the units are set-aside for very-low income households and 50% of the units are allocated to low income households. The income and affordability covenants are imposed on this project in perpetuity. 2. Between 1988 and 1993, the Agency assisted the 40-unit Huntington Village Senior Apartment Project, the 44-unit Brisas del Mar Project and the 48-unit Five Points Senior Apartment Project. These projects include a mix of very-low, low and moderate income units. However, these projects are all located outside of the Huntington Beach Project (Merged), and prior to 1994 only projects located within redevelopment project areas could be used to fulfill the Section 33413(b) inclusionary housing production requirements. Mid-Term Update:Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 4 3. Between 1994 and 2004, the first two Implementation Plan cycles, the Agency assisted in the creation of 588 affordable housing units. The projects' names and characteristics are identified in Table H-4, and the project types can be summarized as follows: a. 93 apartment units were developed or substantially rehabilitated within the Huntington Beach Project (Merged); b. 195 apartment units were developed or substantially rehabilitated outside the Huntington Beach Project (Merged). C. Six very-low income home ownership units were constructed outside the Huntington Beach Project(Merged) by Habitat for Humanity with Agency assistance. d. The Agency purchased long-term income and affordability covenants on 294 apartment units located outside the Huntington Beach Project (Merged). 4. During the current Implementation Plan period, several affordable housing projects have come on-line. These projects can be described as follows: a. Completed projects outside the Project Areas: i. A 106-unit SRO was completed by a for-profit developer. ii. Two substantial rehabilitation projects, totaling eight units, have been completed by the Collette's Children's Home Crisis Shelters. iii. One Habitat for Humanity ownership unit was completed. b. Two substantial rehabilitation projects are currently being undertaken by the Jamboree Housing Corporation in the Oakview neighborhood. These projects include nine very-low income units and one low income unit City Activities The City's Inclusionary Housing Ordinance requires that at least 10% of the residential units be subject to long-term income and affordability covenants. Nearly 500 income restricted units have been developed since the City began implementing an inclusionary housing policy in 1993; these units are all being counted toward the fulfillment of the City's RHNA goals. Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 5 The affordable housing covenants required by City's Inclusionary Housing Ordinance are intended to comport with the inclusionary housing production requirements imposed on the Agency by Section 33413(b). However, given the timing, location and covenant monitoring in place on the existing units developed under the Inclusionary Housing Ordinance requirements, the Agency is currently limited to receiving Section 33413(b) inclusionary housing production credit for approximately 161 units. C. PROPOSED AFFORDABLE HOUSING ACTIVITIES Activities Funded with Set-Aside and HOME Funds The array of affordable housing development being considered in this Affordable Housing Component includes: Oakview Acquisition and Rehabilitation Projects In 1994 the Agency began a revitalization program for the Oakview neighborhood. Between 1994 and 2004, the Agency assisted in the acquisition and substantial rehabilitation of 81 units in 10 projects. During 2006 and 2007 the Agency approved 10 additional units in two projects. The Agency is also currently considering providing assistance to a third project that includes four units. The ultimate objective is to create a vibrant neighborhood that continues to be occupied by a diverse mix of residents. Recognizing that local serving retail uses are needed by the residents, KMA evaluated the opportunity for including retail in the development mix. However, based on an analysis of the site selection criteria imposed by typical retailers, it was the KMA conclusion that there is an insufficient number of residents in the primary trade area; and the streets do not generate sufficient traffic to attract typical retail tenants. To kick-start retail opportunities, the City is working with the Oakview Revitalization Partnership to attract a local farmers market to the neighborhood and will continue to pursue efforts to attract business opportunities in the future. Given the development constraints, KMA focused the strategic planning process on mixed-income residential development, the creation of a pleasant environment for the residents throughout the neighborhood, and the need to create a uniform operating standard for the various projects that have or will receive Agency assistance. To maximize the impact on the neighborhood, and to create the ability to leverage outside funding sources to defray the Agency's Affordable Housing Fund expenditures, this Affordable Housing Component is based on the following assumptions: Mid-Term Update:Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 6 1. The Agency will work closely with Oakview Task Force to ensure that proposed development and activities meet the needs of the existing community. 2. The Agency will work with nonprofit developers designated as Community Housing Development Organizations (CHDO) to undertake these projects. The selected developers will currently be involved in the neighborhood, or will come to the Agency with site control for the proposed project. 3. The selected developer(s) will focus on assembling contiguous parcels. 4. To the extent it is financially feasible within the assistance parameters identified by the Agency, the projects will be required to include sustainable design features such as: a. Energy and water reduction strategies; b. Building design that maximizes sunlight for heat and light, and maximizes air flow for natural cooling; C. Solid waste reduction technologies; d. Storm water mitigation; and e. Gray water recycling. 5. The Agency will assist a CHDO in undertaking community organizing activities. Specifically, the CHDO will create programming to benefit the residents within the community, including the residents in the affordable housing projects undertaken by other developers. This strategy will provide the Agency with the opportunity to group the rehabilitation projects together to maximize the effect; and/or to replace the existing projects with efficiently designed new development projects geared to the needs exhibited within the community. This will assist the Agency in fulfilling Section 33413(b) inclusionary housing production requirements, and will assist the City in fulfilling outstanding RHNA goals. The range of strategies to be considered by the Agency include: 1. The use of the existing fund balance to assist 40 units over the next two years, followed by the use of approximately $1 million in Set-Aside funds and 100% of the available HOME funds to assist five additional units per year throughout this strategy period. Mid-Term Update:Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 7 a. This strategy would generate 80 units by fiscal year 2014/15. b. The average subsidy, in 2007 dollars, is estimated at $300,000 per unit. 2. The issuance of a +/- $10 million taxable bond secured by Set-Aside funds, which would be used in combination with the $13 million in currently available funds to provide the opportunity to obtain outside leveraging such as Low Income Housing Tax Credits (Tax Credits), Multi-family Housing Program (MHP) funds, and other sources available at the state and federal levels. Development under this scenario could take one of the following forms: a. Acquisition and substantial rehabilitation of existing projects: i. This strategy is projected to generate approximately 100 units, for which implementation would commence over the next two years. ii. The average Agency subsidy is estimated at $200,000 per unit. b. The assemblage of contiguous parcels, combined with initial rehabilitation work limited to bringing the properties to a decent, safe and sanitary quality level. The ultimate plan would be to replace the existing projects with mixed-income new construction projects: i. The total development would include 50 to 75 units. ii. The units would be designed to accommodate families. iii. It would be possible to create open spaces and support services that would be available to residents throughout the neighborhood. iv. The project would be structured to allow Tax Credits and Tax- Exempt Bonds to be obtained to defray the Agency assistance costs. V. The average assistance is estimated at $250,000 to $300,000 per unit in 2007 dollars. The Oakview neighborhood is located within the Huntington Beach Project (Merged). Any substantial rehabilitation projects undertaken with Agency assistance, and any new development undertaken with or without assistance, will trigger Section 33413(b) inclusionary housing production obligations. However, it is assumed that the Agency assisted development will provide a sufficient number of units to fulfill the obligations. Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 8 Huntington Gardens This Affordable Housing Component includes the 180 unit Huntington Gardens project, which is located outside the Project Areas. This project is a HUD sponsored senior citizen apartment project known as Wycliffe Gardens. The HUD assistance package and covenants recently expired, which places the project"at risk" of conversion to market rates. The property owner has expressed interest in selling the project, and this Affordable Housing Component assumes that the Agency will assist a nonprofit developer in the acquisition and rehabilitation, in return for the imposition of long-term income and affordability covenants. The assistance costs associated with this project are estimated at approximately $14 million, or $75,000 per unit. This project is located outside of a redevelopment project area, so it will not trigger Section 33413(b) inclusionary housing production obligations. The project can be used to fulfill the Agency's production requirements on a two-for-one basis. Given the fact that this project is considered an "at risk" project, it can also be used to fulfill the City's RHNA's goals. Mixed-Use Projects on Commercial Corridors Transportation corridors in Huntington Beach provide opportunities for mixed-use commercial and residential development. Those projects located within the Project Areas will create Section 33413(b) inclusionary housing production obligations for the Agency to fulfill. However, all the mixed-use projects will be subject to the requirements imposed by the City's Inclusionary Housing Ordinance. Thus, these developments can potentially fulfill a portion of the Agency's Section 33413(b) inclusionary housing production requirements. It is assumed that mixed-use development will be proposed by private developers on available infill sites, and that no Agency assistance should be required. Some developers may agree to comply with the income and affordability requirements imposed by the State of California density bonus (SB1818) to achieve greater development intensity, and to enhance the project economics. As such, mixed-use zoning should only be applied to sites that are appropriate for urban style development. An example of a mixed-use project on a transportation corridor is the proposed Bella Terra Phase II project. This project is currently proposed to include 503 residential units as part of the overall development mix. The site is located within the Huntington Beach Project (Merged), so residential development will create a Section 33413(b) inclusionary Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 9 REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: 12/17/2007 DEPARTMENT ID NUMBER: ED 07-51 Analysis: California Redevelopment Law (CRL) as portrayed in California Health and Safety Code, §33490 requires Redevelopment Agencies to prepare and adopt Five-Year Implementation Plans, Mid-Term Updates. The purpose of the Implementation Plans and Mid-Term Updates is to identify the specific goals and objectives for the Redevelopment Project areas, to describe the specific programs, including potential projects and estimated expenditures that would be made during the five years, and explain how these activities will eliminate blight and improve and increase the supply of affordable housing for the very-low, low-, and moderate-income households. The Affordable Housing Component is a part of the Implementation Plan and Mid-Term Updates. The Affordable Housing Component Implementation Plan (Plan) provides the opportunity to review what the Agency has accomplished and to review the Agency's affordable housing goals, objectives, and specific program to meet its affordable housing obligations over the time-frame of the Plan (2009). In brief, the Agency has currently met all of its replacement and production obligations. The Affordable Housing Component Mid-term report will also ensure that the Agency's goals are consistent with the City's draft Housing Element's goals to provide affordable housing. In addition, the projects undertaken by the Agency are counted toward the City's Regional Housing Needs Allocation (RHNA). CRL sets forth the fundamental purpose of the Housing set aside (20%) which is to expand the supply of very low-, low-, and moderate-income housing. The three primary responsibilities of the Redevelopment Agency are: (1) production and/or replacement of low- and moderate-income housing; (2) set-aside and expenditure of specified amounts of property tax increment revenue (20%) for the express and exclusive purpose of increasing, improving, and preserving a community's supply of low and moderate-income housing; and (3) preparing reports on how the Agency has met, or preparing plans on how the Agency will meet its responsibilities with regard to the first two items. The Affordable Housing Component falls under the third requirement. The Agency and the City have implemented a broad-based affordable housing program over the past 20 years. It includes new development of rental and ownership housing; substantial rehabilitation of rental housing; purchases of long-term income and affordability covenants on existing apartment projects; and grants and loans for minor rehabilitation projects. The financing of the Agency assistance is derived from the Property Tax Increment Housing Set-Aside, federal HOME Program, and federal Community Development Block Grant Program funds. Additionally, there may be Inclusionary Housing In-Lieu funds available in the future. Since the 1980's, the Agency has assisted over 1,000 affordable units. Currently, during this Implementation Plan period, the Agency has assisted in three substantial rehabilitation projects, totaling 14 units and one Habitat for Humanity ownership unit. The attached Implementation Plan sets forth the following goals: -2- 12/3/2007 9:58 AM REQUEST FOR REDEVELOPMENT AGENCY ACTION MEETING DATE: 12/17/2007 DEPARTMENT ID NUMBER: ED 07-51 Workforce Housing — The Agency has established an objective to provide home ownership opportunities to households that cannot afford to purchase a home in Huntington Beach, and do not qualify for assistance under the statutory definitions of low- and moderate- income households. The Agency would like to focus this program on providing home ownership opportunities for City employees. In addition, the Agency would work with major employers within Huntington Beach that are interested in providing housing assistance to their employees. However, to maximize the benefits to the City, the program's marketing effort would be focused on City employees. Oakview Acquisition and Rehabilitation Projects — Between 1994 and 2007, the Agency assisted in the acquisition and substantial rehabilitation of 95 units in 13 projects. In the near-term, the Agency will assist in the creation of a weekly farmer's market, create a community revitalization plan, require all projects to include sustainable design features, and assemble contiguous parcels to attract new development of mixed-income units. This strategy will allow new construction of rental developments by removing underutilized and dilapidated properties. Wycliffe/Huntington Gardens — As identified in the Housing Element, this project is currently "at-risk" of conversion to market rates. This is a 180-unit senior complex. The Agency will work with a non-profit to purchase the property and extend the long-term income and affordability covenants. Rehabilitation Loan Program — The Rehabilitation Loan Program is currently available for single-family residential units, mobile homes, and multi-family homes. The program is currently limited to $25,000 for single-family homes, $15,000 for mobile homes, and $15,000 per unit for the multi-family program. It is recommended that the Rehabilitation Loan Program be changed to increase the cap to $75,000 for single-family home and to eliminate the multi-family home component. Single-family homes are defined as developments that include between one and four units. The loans are subject to 3% interest. The Agency averages 25 rehabilitation loans per year. Student Housing — The City/Agency is working to assist Goldenwest College in the development of 150 to 175 units for 300 students. Inclusionary Housing/Mixed-Use Projects on Commercial Corridors — All new development within the City is obligated to meet the City's Inclusionary Housing Ordinance to set-aside 10% of the housing being built for sale or as rental units to very-low, low and median income households. The City Council recently approved an in-lieu fee for residential projects between four and nine units. Agency Housing Division staff administer the program, and the units are counted toward the fulfillment of City and Agency affordable housing obligations. Strategic Plan Goal: This project will help meet the City of Huntington Beach Strategic Plan Goal L-3, "Preserve the quality of our neighborhoods,..." by enhancing and preserving the quality of existing housing and providing additional affordable housing within the City -3- 12/3/2007 9:58 AM REQUEST FOR REDEVELOPMENT AGENCY ACT0ON MEETING DATE: 12/17/2007 DEPARTMENT ID NUMBER: ED 07-51 and Goal L-1 "Establish the vision and create a land use plan for reuse of critical parcels so that the next phase of the community investment and improvement can begin". Environmental Status: Not applicable. Attachment(s): below City Clork?$ Pas - • • ! o • 1. Affordable Housing Component AB 1290 Implementation Plan January 2005-December 2009 Mid-Term Update -4- 12/3/2007 9:58 AM ATTACHMENT # 1 MD THE HUNTINGTON BEACH REDEVELOPMENT AGENCY NOVEMBER 26, 2007 I. AFFORDABLE HOUSING COMPONENT A. IMPLEMENTATION PLAN REQUIREMENTS Keyser Marston Associates, Inc. (KMA), the Huntington Beach Redevelopment Agency's (Agency) financial consultant prepared the following Affordable Housing Component of the Agency's Implementation Plan. This Affordable Housing Component aggregates the requirements imposed on the Huntington Beach Project (Merged) and the Southeast Coastal Redevelopment Project Area. The Affordable Housing Component identifies a funding plan and activities related to the production of affordable housing for persons and families of low and moderate income. The Implementation Plan covers the period between January 2005 and December 2009. However, various California Redevelopment Law (CRL) restrictions also require the Agency to create plans for affordable housing activities through December 2014, and then again through the end of the Project Areas' life. The CRL provides that a fundamental purpose of redevelopment is to expand the supply of low and moderate income housing (Section 33071).' To accomplish this purpose, the CRL contains numerous provisions to guide redevelopment agency activities with regard to low and moderate income housing. These provisions divide a redevelopment agency's housing responsibilities into the following three major categories: 1. The production and/or replacement of low and moderate income housing; 2. The set-aside and expenditure of specified amounts of property tax increment revenue for the express and exclusive purpose of increasing, improving and preserving a community's supply of low and moderate income housing; and 3. Preparing reports on how the Agency has met, or preparing plans on how the Agency will meet, its responsibilities with regard to the first two items. This Affordable Housing Component of the Implementation Plan is one of the Agency's responsibilities under the third major category. Its contents address how the Agency's plans for the Project Areas will achieve the affordable housing requirements imposed by the CRL. The Affordable Housing Component must address the following items. The CRL income definitions are found in the following Sections: moderate Section 50093, low 50079.5 and very-low 50105. Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066,004/015 Page 1 1. Production of Affordable Housing Based on Activities in the Project Areas: a. At least 30% of all new and substantially rehabilitated dwelling units developed by a redevelopment agency shall be provided at affordable housing cost to low and moderate income households (Section 33413(b)(1)). b. At least 15% of all new residential units developed in a redevelopment project area, by public or private entities other than the redevelopment agency, shall be provided at affordable housing cost to low and moderate income households. This requirement also includes all substantially rehabilitated units that have received agency assistance (Section 33413(b)(2)). C. If a project identified in the Implementation Plan results in the removal of units occupied by low or moderate income households, the Implementation Plan must identify suitable locations for replacement housing units to be developed or substantially rehabilitated (Section 33490(a)(3) and Section 33413(a)). 2. Set-Aside and Expenditure of Property Tax Increment for Housing Purposes: a. Twenty-percent (20%) of the gross property tax increment (Set-Aside funds) must be placed in a separate Affordable Housing Fund to be used solely to increase, improve and preserve the community's supply of low and moderate income housing (Section 33334.2). b. Set-Aside funds must be spent on very-low, low and moderate income - housing in proportion to the unmet need for housing as defined in Section 65584 of the Government Code. The unmet need for housing is identified in the Regional Housing Needs Assessment (RHNA) for the City of Huntington Beach (City) which is prepared by the Southern California Association of Governments (SCAG) (Section 33334.4). C. A cap is applied to the amount of Set-Aside funds that can be spent on housing that is subject to age restrictions. The limit is equal to the percentage that very-low and low income households over the age of 65 represent of the total very-low and low income population in Huntington Beach, based on United States Census data (Section 33334.4). Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 2 d. Set-Aside funds can only be used to construct infrastructure and public improvements if the improvements are an integral part of the new construction or rehabilitation of housing units that are subject to long-term income and affordability covenants, and are directly benefited by the improvements (Section 33334.2). e. Set-Aside funds can only be used to fill the gap between the amount of external financing that can be supported by a project, and the total project costs. If more than 50% of the project costs are funded by the redevelopment agency, a finding must be made that no other commercial funding sources could be reasonably obtained (Section 33334.3) The Implementation Plan must also include the following information: 1. Estimates of the balances and deposits into the "Affordable Housing Fund" created to hold the Set-Aside funds; 2. A housing program identifying expenditures from the Affordable Housing Fund; 3. A description of the housing activity that has occurred in the Project Areas, and; 4. Estimates of housing units that will be produced in the Project Areas for each of the various income categories. All of this information is provided in the following sections of the Affordable Housing Component of this Implementation Plan. B. HISTORICAL AFFORDABLE HOUSING ACTIVITIES The first area within the Project Area now known as the Huntington Beach Project (Merged) was adopted in 1982. The Southeast Coastal Project was not adopted until 2002, and no residential development has occurred within this Project Area. As such, all the Agency's historical affordable housing activities have taken place in the Huntington Beach Project (Merged) or in portions of the city not located in a Project Area. The Agency and the City have implemented a broad based affordable housing program over the past 20 years. These projects and programs include new development of rental and ownership housing; substantial rehabilitation of rental housing; purchases of long- term income and affordability covenants on existing apartment projects; and grants and loans for minor rehabilitation projects. Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 3 housing obligation for the Agency. The City's Inclusionary Housing Ordinance requires the development to set-aside 10% of"for sale" units for median income households. However, the City may ultimately impose the full Section 33413(b) inclusionary housing requirement on the project as part of the rezoning process. Projects Assisted with Revolving Loan Funds The rehabilitation loan program is funded with loan repayment proceeds received by the City from existing rehabilitation loans. These loans were originally funded with CDBG funds, and to comply with the CDBG requirements the participants are limited to very- low and low income households. At the beginning of fiscal year 2006/7, the program had an available fund balance of$1.4 million and outstanding loans totaling $3 million. It is proposed that the rehabilitation loan program continue to be funded solely with revolving loan repayment proceeds. It is further proposed that the program be restructured to enhance the marketability and to simplify the implementation process. The key modifications being proposed are: 1. The multi-family home component would be eliminated; only single-family home ownership units would be included in the program. For the purposes of this program, single-family homes are defined as developments that include between one and four units. 2. The loan cap would be set at $75,000 per unit, with the potential to increase the amount to $90,000 administratively. This limit was chosen because recent applicants have been required to incur costs ranging from $60,000 to $90,000 per unit to comply with City Building Code standards. 3. Participants would be allowed to use the funds to include features designed to improve the home's energy efficiency. 4. No repayment of principal or interest would be required until the home is resold or refinanced to draw down cash. 5. The loans would bear 3% simple interest. This City has been actively marketing the rehabilitation program since early in 2007. As a result, 100% of the $1.4 million fund balance has been committed to loans. Going forward it is projected that five loans will be funded per year. However, the number of loans will ultimately be tied to the amount of debt service payments received, and the actual amounts committed to each loan. Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 10 The CRL imposes Section 33413(b) inclusionary housing production obligations on units that receive redevelopment agency assistance to undertake substantial rehabilitation. The rehabilitation loan program is not intended to trigger Section 33413(b) requirements, nor are the units intended to fulfill production obligations, for the following reasons: 1. The loan program is not funded with Agency monies; and 2. The loan program is not intended to be used for projects that meet the substantial rehabilitation test defined by the CRL. For reference purposes, substantial rehabilitation is defined as 25% or more of the after-rehabilitation value of the home. Activities Funded with Affordable Housing Trust Funds and Housing Development Funds Funding Sources The Affordable Housing Plan for the Pacific City Project requires Makallon Atlanta Huntington Beach, LLC (Makallon) to contribute $20 million to the Housing Development Fund. In return for receiving this payment, the Agency must fulfill a defined portion of the Pacific City Project's affordable housing obligations. The Inclusionary Housing Ordinance allows developers of projects with three to nine units to pay a fee in lieu of producing the affordable housing units on site within a market rate project. The in-lieu fee revenues will be contributed to the Affordable Housing Trust Fund. The use of the monies in the Affordable Housing Trust Fund are guided by the Inclusionary Housing Ordinance. Pacific City Affordable Housing Obligations The Affordable Housing Plan for the Pacific City Project requires the Agency to cause 117 very-low, low and median income units to be constructed or otherwise created within the Merged Project Area.2 The Agency will use some or all of the Makallon payment to fulfill the requirements identified in the Affordable Housing Plan. 2 The specific requirement is for 39 very-low, 39 low and 39 median income units distributed among studio to three-bedroom units. Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 11 Student Housing The Agency has established an objective to assist in the development of 150 to 175 student dormitory rooms at Goldenwest College. It is proposed that the assistance costs associated with producing these units be funded with Housing Development Fund and/or Affordable Housing Trust Fund revenues. In accordance with the Affordable Housing Trust Fund guidelines, 20% of the proposed student housing units have been set aside for very-low income households, 30% of the units are allocated to low income households, and the remaining units are proposed to be provided to moderate income households. For the purposes of this Affordable Housing Component, the student housing development has been set at 150 units, and the public assistance cost is estimated at $13 million. This equates to an average subsidy of$87,000 per unit. Workforce Housing Program The Agency has established an objective to provide home ownership opportunities to households that cannot afford to purchase a home in Huntington Beach, but that do not qualify for assistance under the statutory definitions of low and moderate income households. To that end, the Agency would like to create a "Workforce Housing" program. The proposed Workforce Housing program will focus on providing home ownership opportunities for City employees, school teachers in the local school districts, and major employers with Huntington Beach that are interested in working with the Agency to provide housing through a matching grant program. This program would provide down payment assistance funds to the purchasers of existing homes within Huntington Beach. Based on this structure, the proposed program will neither trigger nor fulfill Section 33413(b) inclusionary housing production requirements. D. APPLICABLE AFFORDABLE HOUSING REQUIREMENTS Applicable Housing Production Requirements The affordable housing production requirements imposed on the Project Areas are discussed in the following sections of this report. Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 12 Replacement Housing Obligation The Agency must fulfill the replacement housing obligations imposed by Section 33413(a). The Agency must replace, on a one-for-one basis, all units removed from the low and moderate income housing stock as a result of Agency actions. If an implementation plan includes projects that could result in the removal of low and moderate housing units, the implementation plan must identify locations suitable for the replacement of such housing. This Implementation Plan does not include any projects or programs that would result in the removal of housing units from the low and moderate income housing stock; therefore, no replacement housing obligations are considered in this Implementation Plan. Inclusionary Housing Production Obligation The Agency is required to comply with the affordable housing production requirements imposed by Section 33413(b). The requirements can be summarized as follows: 1. Subparagraph (1) requires at least 30% of all housing units developed by the Agency to be low and moderate income housing subject to long-term income and affordability covenants. Of this total, at least 50% of the units must be set-aside for very-low income households. Units provided in Agency developed projects, in excess of these requirements, cannot be used to fulfill the obligations identified in Subparagraph (2). 2. Subparagraph (2) of Section 33413(b) imposes the following requirements: a. At least 15% of all housing developed in the Project Areas, by parties other than the Agency, must be low and moderate income units subject to long-term income and affordability covenants. This requirement also applies to Agency assisted substantial rehabilitation projects.3 b. At least 40% of the required low and moderate income units must be affordable to persons and families of very-low income. The covenants for the remaining units can be set at the low or the moderate income level. C. These requirements are applied on a cumulative basis over time, rather than on a project-by-project basis. 3 This includes private development, and development that receives Agency assistance but is not developed by the Agency. Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 13 The following sections of the Affordable Housing Component review past and anticipated housing development activity in the Project Areas to quantify the Section 33413(b) inclusionary housing production obligations. These sections also identify how the Agency plans to fulfill the obligations during the Implementation Plan period and throughout the remaining life of the Project Areas. Housing Development in the Project Areas The first component of the Huntington Beach Project (Merged) was adopted in 1982 and the land use controls terminate for the entire area in 2024. The Southeast Coastal Project was adopted in 2002 and the land use controls terminate in 2032. To assist in identifying the Section 33413(b) inclusionary housing production obligations, the residential development within the Project Areas must be identified for the period between the Area's inception and the termination of the land use controls. As shown in Table H-1, it is estimated that 2,634 residential units were developed within the Huntington Beach Project (Merged) between 1982 and 2004. It is anticipated that 1,777 units will be developed between 2005 and 2024 (Table H-2). No residential development has occurred in the Southeast Coastal Project since its inception in 2002, and none is currently anticipated to occur through the end of the Project Areas' life. Existing and Anticipated Inclusionary Housing Obligation Based on the historical and projected residential development within the Project Areas, the Section 33413(b) inclusionary housing production obligations are estimated in Table H-3. The projected total obligations through the end of the Project Areas' life are: 1. Agency Developed Housing: The total obligation equals 50 units. Of this total, at least 25 units must be allocated to very-low income households, and the balance of the units must be set aside for low or moderate income households. 2. Other Residential: The total obligation equals 638 units. Of this total, at least 256 units must be set aside for very-low income households. The remaining income restricted units can be provided to low or moderate income households. Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 14 Existing and Projected Inclusionary Housing Production Units Table H-4 lists the affordable housing projects that have already been developed, and projects the future activity based on the projects recommended for implementation in this Affordable Housing Component. Table H-4 only includes affordable housing unit development that qualifies for Section 33413(b) inclusionary housing production credit. The categories of units considered in Table H-4 are: 1. Agency Developed Housing 2. Agency Assisted Housing within Huntington Beach Project (Merged) (Completed) 3. City Inclusionary Units within Huntington Beach Project(Merged) (Completed) 4. Agency Assisted Housing Outside Huntington Beach Project(Merged) (Completed) 5. City Inclusionary Units Outside Huntington Beach Project (Merged) (Completed) 6. Agency Covenant Purchase Outside Huntington Beach Project (Merged) (Completed) 7. Agency Assisted Housing within Huntington Beach Project (Merged) (Executed Agreements) 8. Agency Assisted Housing within Huntington Beach Project (Merged) (Proposed in Plan) 9. Agency Assisted Housing Outside Huntington Beach Project(Merged) (Executed Agreements) 10. Agency Assisted Housing Outside Huntington Beach Project(Merged) (Proposed in Plan) The inclusionary housing production units that have been produced to date, and those projected to be produced in the future, are summarized in the following table: Mid-Term Update:Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 15 Very-Low Low/Mod Timing Income Income Total Agency Developed Units 82.0 82.0 164.0 Other Units Projects Already Completed 133.5 284.5 418.0 Projects with Executed Agreements 42.0 31.5 73.5 Projects Proposed in this Plan 155.5 199.0 354.5 Total Other Units 331.0 515.0 846.0 Net Inclusionary Housing Production Surplus/ (Deficit) The Agency is required to measure inclusionary housing production as of December 31, 2004, December 31, 2014, the end of the Huntington Beach Project (Merged) life in 2024 and the end of the Southeast Coastal Redevelopment Project in 2032. The results of this analysis are detailed in Table H-5, and can be summarized as follows: 1. The Agency currently has a 114 unit surplus in Agency developed units (Section 33413(b)(1)). During this Implementation Plan period the Agency will be exploring the opportunity for selling this project to a nonprofit developer. It is possible that the conveyance, the imposition of new long-term income and affordability covenants, and the substantial rehabilitation of the project may allow the Agency to count these surplus units towards the fulfillment of the Section 33413(b)(2) production requirement for privately developed residential projects. 2. The Agency currently has a 47 surplus in the production of Section 33413(b)(2) units. The Agency is anticipated to generate a production surplus through the end of the Project Areas' life. E. APPLICABLE DEPOSIT AND EXPENDITURE PROVISIONS Set-Aside of Gross Property Tax Increment The Project Areas are subject to the Section 33334.2 requirement to allocate 20% of the gross property tax increment to affordable housing activities. The projections of the required deposits into the Affordable Housing Fund are discussed in the following sections of the Affordable Housing Component. Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 16 Proportional Expenditures of Affordable Housing Fund Monies The Project Areas is subject to the Section 33334.4 requirement that the Agency expend Set-Aside funds in accordance with an income proportionality test and an age restriction proportionality test. Section 33334.4 also provides redevelopment agencies with the discretion to include other locally controlled public revenue sources in the proportionality tests. These proportionality tests must be met between January 1, 2002 and December 31, 2014, and in 10-year increments through the termination of the Project Areas' life. The results of the proportionality tests are presented in Table H-6, and described in the following sections of the Affordable Housing Component. Income Proportionality Test The income proportionality test requires the Agency to expend Set-Aside funds in proportion to the unmet housing needs that have been identified for the community pursuant to Government Code Section 65584. The proportionality test used in this Affordable Housing Plan is based on the 2006 RHNA figures prepared by SCAG. The RHNA established the following unmet need for affordable housing in Huntington Beach: Category Total Units % of Total Very-Low Income: 454 37% Low Income: 369 30% Moderate Income: 414 33% Total 1,237 100% To comply with the Section 33334.4 requirements, the Agency must spend at least 37% of its Set-Aside funds on projects and programs dedicated to very-low income households, and no more than 33% of the funds on projects and programs dedicated to moderate income households.4 Section 33334.4 provides the Agency with the flexibility to allocate Set-Aside funds in any way that complies with the defined minimum for very- low income expenditures and the defined cap for moderate income expenditures. As shown in Table H-6, this Affordable Housing Component allocates 73% of the Set- Aside and HOME Program funds to project and program expenditures earmarked for very-low income households, 26% of the funds for low income households and 1% of the funds for moderate income households. These expenditures comply with the income targeting standards imposed by Section 33334.4. 4 Section 33334.3 provides redevelopment agencies with the discretion to include HOME funds revenues in the proportionality testing. Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.0041015 Page 17 Age Restricted Housing Proportionality Test Section 33334.4 also requires that the Agency cap assistance to age restricted housing based on the percentage that very-low and low income households over the age of 65 represent of the total very-low and low income population in Huntington Beach. Based on 2000 United States Census data, the very-low and low income senior citizen population represents 30% of the very-low and low income population in Huntington Beach. The Affordable Housing Component allocates 30% of the Set-Aside and HOME Program funds to senior citizen housing projects. Thus, the Agency is anticipated to fulfill the age restricted housing expenditures test imposed by Section 33334.4. Excess Surplus Calculation The Project Areas are subject to the "excess surplus" requirements imposed by Section 33334.12. Excess surplus is defined as any unexpended and unencumbered funds in the Affordable Housing Fund that exceeds the aggregate amount of Set-Aside funds generated during the Project Areas' preceding four fiscal years. Based on the Section 33334.12 requirements, the Agency has three years to encumber any excess surplus funds. As illustrated in Table H-6, the Agency is not projected to incur an excess surplus balance at any time during the current Implementation Plan cycle. It is not anticipated that the Agency will experience an excess surplus balance throughout the Project Areas' remaining life. F. GOALS AND OBJECTIVES The CRL requires that certain housing requirements be fulfilled during five- and 10-year increments; and over the remaining Project Areas' life. Specifically, the inclusionary housing production requirement must be met every ten years, and over the life of the Project Areas. Comparatively, the proportionality tests must be achieved between January 1, 2002 and December 31, 2014, and then again in 10-year increments throughout the Project Areas' life. Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 18 The Agency's primary goal is to comply with the affordable housing requirements imposed by the CRL in a responsible manner. The affordable housing activities identified in the Implementation Plan will be undertaken over the duration of the Project Areas, and will explicitly assist in accomplishing the intent of the CRL in regards to the provision of low and moderate income housing. Affordable Housing Fund Resources and the Housing Program This section of the Affordable Housing Component discusses the Agency's affordable housing activities planned for the Implementation Plan period. Table H-7 projects the Affordable Housing Fund deposits and expenditures anticipated to occur during each year of the Implementation Plan period. These expenditures are then tied to estimates of the number of affordable housing units projected to be assisted by the Agency. Affordable Housing Fund Revenues Table H-7 presents the estimated beginning balance in the Affordable Housing Fund, and the projected future deposits into the Fund. The Affordable Housing Fund revenues shown on Table H-7 include the following: 1. Twenty percent (20%) of the estimated gross property tax increment generated within the Project Areas - the property tax increment projection was prepared by the City's Finance Department. 2. HOME Program revenues—the fiscal years 2006/7 and 2007/8 are based on the actual allocation received by the City. The allocation amount is held constant thereafter. 3. Revolving loan fund payments—the amount of repayment funds varies from year-to-year. this Affordable Housing Component is premised on the assumption that the loan commitments in each year will be directly tied to the amount of the debt service payments received by the Agency in that year. 4. Housing Development Fund revenues—The Agency has received $840,000 in revenues to date. During the Implementation Plan period, the Agency is also anticipated to receive $20 million in revenues from Makallon Atlanta Huntington Beach, LLC in accordance with the timeline identified in the Affordable Housing Agreement for the Pacific City Project. Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 19 5. In-lieu fee revenues will be generated by three to nine unit residential projects that choose to pay a fee in lieu of producing the affordable housing units required by the Inclusionary Housing Ordinance. The amount of fee revenue that will be generated is too speculative to predict at this time. 6. CDBG revenues— it is assumed that the City will continue to allocate $160,000 in CDBG funds per year to the Agency to fund the costs associated with administering the rehabilitation loan program. 7. Other revenues—this category includes miscellaneous loan payments, administrative fees related to bonds issued by the Agency, ERAF repayment from the unrestricted property tax increment fund and the Main-Pier loan repayment. These amounts were all provided by the City's Finance Department. 8. Investment earnings, which are estimated based on a 4% interest rate, on the average balance in the Affordable Housing fund during the previous year. The Housing Program and Affordable Housing Fund Expenditures Table H-7 also illustrates the costs anticipated to be incurred by the Agency from the Affordable Housing Fund. These costs can be described as follows: 1. Operating costs include planning and administration; general operating expenses; and rehabilitation loan program administration costs. These projections were provided by the Agency staff. 2. The future program and project cost projections are based on the estimates detailed previously in this Affordable Housing Component. This Affordable Housing Component provides an illustrative example of how the Affordable Housing Program could be financed over time. However, the timing and specific amounts of the expenditures may be adjusted over time. Specific decisions on each of these items will be made as part of the Agency's annual budget process. Summary of Planned Affordable Housing Activity Given the successful implementation of the proposed housing program, the Agency will have accomplished the following: 1. The Agency will fulfill the Section 33413(b) inclusionary housing production requirements for the 10-year period between fiscal years 2004/05 and 2013/14. Mid-Term Update:Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd. January 1,2005—December 31,2009 14066.004/015 Page 20 2. By the end of fiscal year 2013/14, the Agency will have fulfilled all the Section 33413(b) inclusionary housing production requirements anticipated to be incurred throughout the entire life of the Project Areas. 3. The Agency's expenditures of Set-Aside funds will comply with the proportionality tests imposed by Section 33334.4. 4. The Agency will not experience excess surplus in any fiscal year throughout the remaining Project Areas' life. Mid-Term Update: Implementation Plan:Affordable Housing Component 0706049.HTB:KHH:gbd January 1,2005—December 31,2009 14066.004/015 Page 21 TABLE H-1 RESIDENTIAL DEVELOPMENT WITHIN REDEVELOPMENT PROJECT AREAS(PREVIOUS PLAN PERIODS)' IMPLEMENTATION PLAN-MID-TERM UPDATE HUNTINGTON BEACH,CALIFORNIA Units Built in I. Project Construction Type Project Area Completion Year Emerald Cove Agency Developed 164 1986 Private Housing Production New Construction 1,090 1984-1994 OCCHC Keelson Sub Rehab with Assistance 4 1994 Shelter for the Homeless-Barton#1 Sub Rehab with Assistance 4 1994 Shelter for the Homeless-Keelson Sub Rehab with Assistance 10 1994 OCCHC Koledo#1 Sub Rehab with Assistance 25 1996 Pacific Park Villas New Construction 38 1996 OCCHC Koledo#2 Sub Rehab with Assistance 8 1997 OCCHC Queens Sub Rehab with Assistance 10 1997 OCCHC Koledo#3 Sub Rehab with Assistance 10 2000 OCCHC Koledo#4 Sub Rehab with Assistance 6 2000 Plaza Almeria New Construction 42 2000 Interval House Sub Rehab with Assistance 6 2001 OCCHC Koledo#5 Sub Rehab with Assistance 5 2001 Ash Street Condos New Construction 6 2002 Bowen Court Senior Apartments New Construction 20 2002 Shelter for the Homeless-Barton#2 Sub Rehab with Assistance 4 2002 Private Housing Production New Construction 1,182 1994-2004 Total Housing Development 2,634 Agency Developed Other Total II. Completion Year Units Units Units Pre-1994 164 1,090 1,254 1994 18 18 1995 0 0 1996 63 63 1997 18 18 1998 0 0 1999 0 0 2000 58 58 2001 11 11 2002 30 30 2003 0 0 2004 1,182 1,182 Total Units Developed 164 2,470 2,634 1 Includes all units built by private entities, substantially rehabilitated units with Agency assistance, Agency assisted new development and Agency developed units. Prepared by: Keyser Marston Associates, Inc. File name:HB Strategy_11_26_07:H-1 TABLE H-2 PROJECTED RESIDENTIAL DEVELOPMENT WITHIN THE REDEVELOPMENT PROJECT AREAS 1 HUNTINGTON BEACH PROJECT(MERGED): 2005-2024 SOUTHEAST COASTAL REDEVELOPMENT PROJECT: 2005-2032 IMPLEMENTATION PLAN-MID-TERM UPDATE HUNTINGTON BEACH,CALIFORNIA Construction Units Built in Completion I. Project Type Project Area Year Jamboree-Oakview#1 Sub Rehab with Assistance 5 2008 Jamboree-Oakview#2 Sub Rehab with Assistance 5 2008 Jamboree-Oakview#3 Sub Rehab with Assistance 4 2008 Oak View Acquisition/Rehab Projects Sub Rehab with Assistance 60 2007-2014 Bella Terra Residential New Construction 503 2007-2014 Pacific City Residential New Construction 516 2007-2014 Private Housing Production New Construction 500 2007-2014 Sea Colony(Hyatt Residential) New Construction 78 2007-2014 Sea Cove(Hyatt Residential) New Construction 106 2007-2014 Total Housing Production Units 1,777 Agency Developed Other Total II. Estimated Completion Year Units Units Units 2005-2014 1,777 1,777 2015-2024 0 0 Southeast Coastal Redevelopment Project: 2025-2032 0 0 Total Units 1,777 1,777 1 Includes all units built by private entities, substantially rehabilitated units with Agency assistance,Agency assisted new development and Agency developed units. Prepared by: Keyser Marston Associates, Inc. File name:HB Strategy_11_26_07:H-2 TABLE H-3 INCLUSIONARY HOUSING OBLIGATION IMPLEMENTATION PLAN-MID-TERM UPDATE HUNTINGTON BEACH,CALIFORNIA Very-Low Income Low/Mod Income Total Obligation Obligation Obligation Agency Agency Agency Developed Other Developed Other Developed Other I. Year Units' Units 2 Units Units 2 Units ' Units 2 1982-1993 50 164 25 66 25 98 1994-2004 0 207 0 83 0 124 2005-2014 0 267 0 107 0 160 2015-2024 0 0 0 0 0 0 2025-2032 3 0 0 0 0 0 0 11. JTotals 50 638 25 256 25 382 1 See TABLE H-1 &TABLE H-2:At least 30%of the Agency owned units must be restricted as affordable units with at least 50%of the units restricted to very-low income units, and the balance restricted to low and moderate income units. 2 See TABLE H-1 &TABLE H-2: At least 15%of the units developed by public or private entities other than the Agency must be restricted as affordable units with at least 40%of the units restricted to very-low income units, and the balance restricted to low and moderate income units. 3 Only applies to the Southeast Coastal Project. Prepared by: Keyser Marston Associates,Inc. File name:HB Strategy_11_26_07:H-3 TABLE H-4 INCLUSIONARY HOUSING FULFILLMENT ANALYSIS IMPLEMENTATION PLAN-MID-TERM UPDATE HUNTINGTON BEACH,CALIFORNIA Total Income Total Very-Low LIM Covenant Restricted Units Countable Income Income Project Term ' Produced Units 2 Units Units I. Agency Developed(Completed) Emerald Cove Perpetuity 164 164.0 82.0 82.0 II. Agency Assisted Within Project Area(Completed) OCCHC Keelson 1994-2024 4 4.0 4.0 0.0 Shelter for the Homeless-Barton#1 1994-2024 4 4.0 4.0 0.0 Shelter for the Homeless-Keelson 1994-2024 4 4.0 4.0 0.0 OCCHC Koledo#1 1996-2026 10 10.0 10.0 0.0 OCCHC Koledo#2 1997-2027 8 8.0 8.0 0.0 OCCHC Queens 1997-2027 8 8.0 8.0 0.0 OCCHC Koledo#3 2000-2060 10 10.0 10.0 0.0 OCCHC Koledo#4 2000-2060 10 10.0 10.0 0.0 Interval House 2001-2029 6 6.0 0.0 6.0 OCCHC Koledo#5 2001-2060 5 5.0 5.0 0.0 Bowen Court Senior Apartments 2002-2062 20 20.0 0.0 20.0 Shelter for the Homeless-Barton#2 2002-2030 4 4.0 4.0 0.0 Total 93 93.0 67.0 26.0 III. City Inclusionary Units Within Project Area(Completed) Pacific Park Villas 1996-2026 25 25.0 0.0 25.0 Ash Street Condos 2002-2062 6 6.0 0.0 6.0 Total 31 31.0 0.0 31.0 IV. Agency Assisted Outside Project Area(Completed) OCCHC PSS 1994-2024 9 4.5 4.5 0.0 Bridges Apartments-Nichols 1997-2027 80 40.0 0.0 40.0 Habitat for Humanity-Ronald Road 1997-2027 3 1.5 1.5 0.0 Habitat for Humanity-Yorktown 2001-2060 3 1.5 1.5 0.0 Fountains Senior Apartments 2003-2062 80 40.0 27.5 12.5 Main Place Apartments 2004-2033 26 13.0 0.0 13.0 Total 201 100.5 35.0 65.5 V. City Inclusionary Units Outside Project Area(Completed) Greystone Keys 1993-2023 23 11.5 0.0 11.5 Cape Ann 2000-2030 146 73.0 0.0 73.0 The Promenade 2000-2030 80 40.0 0.0 40.0 The Tides 2004-2034 12 6.0 0.0 6.0 Total 261 130.5 0.0 130.5 Prepared by: Keyser Marston Associates, Inc. File name:HB Strategy_11_26_07:H-4 Page 1 of 3 TABLE H-4 INCLUSIONARY HOUSING FULFILLMENT ANALYSIS IMPLEMENTATION PLAN-MID-TERM UPDATE HUNTINGTON BEACH,CALIFORNIA Total Income Total Very-Low L/M Covenant Restricted Units Countable Income Income Project Term Produced Units 2 Units Units VI. Agency Covenant Purchase Outside Project Area(Completed) Sea Aire Apartments 1996-2026 36 18.0 0.0 18.0 Sher Lane Apartments 2003-2028 66 33.0 8.0 25.0 Huntington Pointe Apartments 2003-2061 104 52.0 10.5 41.5 Hermosa Vista Apartments 2004-2063 88 44.0 13.0 31.0 Total Potential Units 294 147.0 31.5 115.5 Actual Countable Units 3 63.0 31.5 31.5 Total Units Prior to 1211104 880 418.0 133.5 284.5 Vll. Agency Assisted Within Project Area(Executed Agreements) Jamboree-Oakview#1 60 Years 5 5.0 4.0 1.0 Jamboree-Oakview#2 60 Years 5 5.0 5.0 0.0 Jamboree-Oakview#3 60 Years 4 4.0 4.0 0.0 Total 14 14.0 13.0 1.0 Vill. Agency Assisted&City Inclusionary Units Within Project Area(Proposed in Plan) Oak View Acquisition/Rehab Projects 60 Years 60 60.0 33.0 27.0 Bella Terra Residential 60 Years 51 51.0 0.0 51.0 Student Housing 60 Years 150 150.0 30.0 120.0 Total 261 261.0 63.0 198.0 Vlll. Agency Assisted Outside Project Area(Executed Agreements) Beachview Villas SRO 5 2006-2066 106 53.0 23.5 29.5 Collette's-Cypress 60 Years 4 2.0 2.0 0.0 Collette's-Glencoe 60 Years 4 2.0 2.0 0.0 Habitat-Delaware 60 Years 1 0.5 0.5 0.0 7912 Newman Street 60 Years 2 1.0 0.0 1.0 Ellis/Patterson 60 Years 2 1.0 1.0 0.0 Total 119 59.5 29.0 30.5 IX. Agency Assisted Outside Project Area(Proposed in Plan) Huntington Gardens 60 Years 185 92.5 92.5 0.0 Habitat-Ellis& Beach 60 Years 2 1.0 0.0 1.0 Total 187 93.5 92.5 1.0 X. Total Units Anticipated to be Produced 581 428.0 197.5 230.5 Prepared by: Keyser Marston Associates, Inc. File name:HB Strategy_11_26_07:H-4 Page 2 of 3 TABLE H-4 INCLUSIONARY HOUSING FULFILLMENT ANALYSIS IMPLEMENTATION PLAN-MID-TERM UPDATE HUNTINGTON BEACH,CALIFORNIA Total Income Total Very-Low LIM Covenant Restricted Units Countable Income Income Project Term Produced Units 2 Units Units 1 Projects subject to agreements executed prior to January 1, 2002 must have covenants that run at least as long as the land use controls imposed by the Redevelopment Plan (2024). The covenants for projects from 2002 forward must run for at least 55 years for rental projects and 45 years for ownership projects. 2 Units located within the Merged Project Area can be counted on a 1:1 basis; 50%credit is applied to units located outside the Merged Project Area. Prior to 1994, units outside the Merged Project Area could not be used to fulfill the inclusionary housing production requirements. ,3 At least 50%of units for which covenants are purchased, but substantial rehabilitation is not performed, must be set-aside for very- low income households. 4 The total excludes the Agency Developed units. Those units must be tracked separately. 5 The project received density bonus benefits, but did not receive Agency financial assistance. Prepared by: Keyser Marston Associates, Inc. File name:HB Strategy_11_26_07:H-4 Page 3 of 3 TABLE H-5 INCLUSIONARY HOUSING FULFILLMENT ANALYSIS SUMMARY IMPLEMENTATION PLAN-MID-TERM UPDATE HUNTINGTON BEACH,CALIFORNIA Total Countable Very-Low Income LOW/Mod Income I. Agency Developed Inclusionary Housing Surplus Units Units Units Total Inclusionary Housing Fulfillment 1 164 82 82 (Less) Inclusionary Housing Obligation 2 50 25 25 Inclusionary Housing Surplus/(Deficit) 114 57 57 Total Countable Very-Low Income Low/Mod Income II. Current Inclusionary Housing Surplus/(Deficit) Units Units Units Total Inclusionary Housing Fulfillment t 418.0 133.5 284.5 (Less) Inclusionary Housing Obligation(1982-2004) 2 371.0 149.0 222.0 Inclusionary Housing Surplus/(Deficit) 47.0 (15.5) 62.5 Total Countable Very-Low Income Low/Mod Income III. 10 Years Inclusionary Housing Surplus/(Deficit) Units Units Units Total Inclusionary Housing Fulfillment ' 846.0 331.0 515.0 (Less) Inclusionary Housing Obligation(1982-2014) 2 638.0 256.0 382.0 Inclusionary Housing Surplus I(Deficit) 208.0 75.0 133.0 Total Countable Very-Low Income Low/Mod Income IV. Life of Plan Inclusionary Housing Surplus/(Deficit) Units Units Units Total Inclusionary Housing Fulfillment ' 846.0 331.0 515.0 (Less) Inclusionary Housing Obligation (1982-2032) 2 638.0 256.0 382.0 Inclusionary Housing Surplus/(Deficit) 208.0 75.0 133.0 See TABLE H-4. 2 See TABLE H-3. Prepared by: Keyser Marston Associates, Inc. File name:HB Strategy_11_26_07:H-5 TABLE H-6 EXCESS SURPLUS&PROPORTIONALITY TESTS IMPLEMENTATION PLAN-MID-TERM UPDATE HUNTINGTON BEACH,CALIFORNIA 1/1/02- 6/30/06 FY 2006/7 FY 200718 FY 200819 FY 2009/10 FY 2010/11 FY 2011/12 FY 2012/13 FY 2013/14 FY 2014/15 I. Excess Surplus Analysis Beginning Balance-Set-Aside Funds $8,236,353 $10,559,869 $7,716,929 $9,803,975 $2,989,923 $5,077,269 $6,963,860 $8,779,560 $10,610,269 Revenues Housing Set-Aside Funds $3,360,000 $3,217,000 $3,281,340 $3,346,967 $3,414,906 $3,482,185 $3,551,828 $3,622,864 $3,695,321 Total Miscellaneous Revenues 70,000 801,000 1,363,000 Interest Earnings 450,000 502,530 417,048 343,047 286,466 133,892 114,590 185,855 256,003 Total Revenues $3,880,000 $4,520,530 $5,061,388 $3,690,014 $3,701,372 $3,616,077 $3,666,418 $3,808,719 $3,951,324 Expenditures-Set-Aside Funds Planning and Administration $177,273 $321,253 $337,316 $354,181 $371,891 $390,485 $410,009 $430,510 $452,035 Operating Expenses 114,211 173,500 182,175 191,284 200,848 210,890 221,435 232,507 244,132 Project/Program Expenditures 1,265,000 6,868,717 2,454,851 9,958,601 1,041,289 1,128,110 1,219,273 1,314,994 1,415,502 Total Expenditures-Set-Aside Funds $1,556,484 $7,363,470 $2,974,342 $10,504,066 $1,614,027 $1,729,486 $1,850,717 $1,978,011 $2,111,669 Ending Balance $10,559,869 $7,716,929 $9,803,975 $2,989,923 $5,077,269 $6,963,860 $8,779,560 $10,610,269 $12,449,924 Maximum Allowable Balance $10,349,679 $11,657,443 $12,637,775 $13,205,307 $13,260,213 $13,525,398 $13,795,886 $14,071,783 $14,352,198 Excess Surplus $210,190 $0 $0 $0 $0 $0 $0 $0 $0 Prepared by:Keyser Marston Associates,Inc. File name: HB Strategy_11_26_07; H-6 Page 1 of 2 TABLE H-6 EXCESS SURPLUS&PROPORTIONALITY TESTS IMPLEMENTATION PLAN-MID-TERM UPDATE HUNTINGTON BEACH,CALIFORNIA 1/1/02- 6/30/06 FY 2006/7 FY 2007/8 FY 2008/9 FY 2009/10 FY 2010/11 FY 2011/12 FY 2012/13 FY 2013/14 FY 2014/15 II. Set-Aside&HOME Program Expenditures(Proportionality Tests) Completed Projects Very-Low Income $4,859,248 Low Income $1,479,086 Moderate Income $342,466 Future Projects Very-Low Income $3,892,448 $3,272,727 $1,718,182 $10,063,125 $1,116,281 $1,172,095 $1,230,700 $1,292,235 $1,356,847 Low Income 221,552 3,557,273 1,431,818 590,625 620,156 651,164 683,722 717,908 753,804 Moderate Income 0 0 0 0 0 0 0 0 0 Total Expenditures $6,680,800 $4,114,000 $6,830,000 $3,150,000 $10,653,750 $1,736,438 $1,823,259 $1,914,422 $2,010,143 $2,110,651 Income Proportionality Test Threshold Actual Age Restricted Housing Test Threshold Actual Very-Low Income 37% 73.1% Maximum Exps-Age Restricted Housing 30.0% 29.0% Low Income 30% 26.1% Minimum Exps-No Age Restrictions 70.0% 71.0% Moderate Income 33% 0.8% Prepared by:Keyser Marston Associates,Inc. File name:HB Strategy_11_26_07; H-6 Page 2 of 2 TABLE H-7 CASH FLOW PROJECTION-AFFORDABLE HOUSING FUNDS IMPLEMENTATION PLAN-MID-TERM UPDATE HUNTINGTON BEACH,CALIFORNIA FY 2006/7 FY 2007/8 FY 2008/9 FY 2009/10 FY 2010/11 FY 2011/12 FY 2012/13 FY 2013/14 FY 2014/15 I. Beginning Balance $11,841,487 $13,285,003 $7,567,414 $9,584,946 $4,738,379 $1,956,209 $3,773,286 $5,519,471 $7,280,665 II. Revenues Housing Set-Aside Revenue 2 $3,360,000 $3,217,000 $3,281,340 $3,346,967 $3,414,906 $3,482,185 $3,551,828 $3,622,864 $3,695,321 HOME Funds 3 800,000 695,149 695,149 695,149 695,149 695,149 695,149 695,149 695,149 Revolving Loan Repayments 4 0 100,000 400,000 420,000 441,000 463,050 486,203 510,513 536,038 Housing Development Fund 5 0 0 0 15,000,000 5,000,000 0 0 0 0 CDBG 6 160,000 160,000 160,000 160,000 160,000 .160,000 160,000 160,000 160,000 Other Revnue7 70,000 801,000 1,363,000 0 0 0 0 0 0 Interest on Available Balances 450,000 502,530 417,048 343,047 286,466 133,892 114,590 185,855 256,003 Total Revenues $4,840,000 $5,475,679 $6,316,537 $19,965,163 $9,997,521 $4,934,276 $5,007,769 $5,174,381 $5,342,511 III. Operating Expenses Planning&Administration 9 $257,273 $390,768 $406,831 $423,696 $441,405 $460,000 $479,524 $500,025 $521,550 General Operating Expenses 114,211 173,500 182,175 191,284 200,848 210,890 221,435 232,507 244,132 Rehab Loan Program Administration Costs 160,000 160,000 160,000 160,000 160,000 160,000 160,000 160,000 160,000 Bond Debt Service Total Operating Expenses $531,484 $724,268 $749,006 $774,980 $802,253 $830,890 $860,959 $892,531 $925,682 IV. Funds Available for Projects/Programs $16,150,003 $18,036,414 $13,134,946 $28,775,129 $13,933,647 $6,059,595 $7,920,096 $9,801,321 $11,697,494 V. Proposed Protects/Programs Jamboree-Oakview#1 $1,285,000 Jamboree-Oakview#2 1,580,000 Jamboree-Oakview#3 1,249,000 Oakview Community Organizing(CHDO) 50,000 Habitat-Ellis&Beach 830,000 0 0 0 0 0 0 0 Oak View Projects'() 6,000,000 3,150,000 1,653,750 1,736,438 1,823,259 1,914,422 2,010,143 2,110,651 Huntington Gardens(VL Income-Senior)" 0 0 9,000,000 4,800,000 0 0 0 0 Single-Family Rehabilitation Loan Program 12 1,400,000 300,000 315,000 330,750 347,288 364,652 382,884 402,029 Single-Family Emergency Grant Program" 100,000 100,000 105,000 110,250 115,763 121,551 127,628 134,010 Workforce Housing 14 840,000 0 0 5,000,000 0 0 0 0 Student Housing 15 0 0 12,963,000 0 0 0 0 0 Total Proposed Projects/Programs $2,865,000 $10,469,000 $3,550,000 $24,036,750 $11,977,438 $2,286,309 $2,400,625 $2,520,656 $2,646,689 VI. Ending Balance $13,285,003 $7,567,414 $9,584,946 $4,738,379 $1,956,209 $3,773,286 $5,519,471 $7,280,665 $9,050,805 Prepared by: Keyser Marston Associates, Inc. File name:HB Strategy_11_26_07;H-7 Page 1 of 2 TABLE H-7(CONTINUED) CASH FLOW PROJECTION-AFFORDABLE HOUSING FUNDS IMPLEMENTATION PLAN-MID-TERM UPDATE HUNTINGTON BEACH,CALIFORNIA Footnotes: 1 Comprised of the following Fund Balances:Set-Aside-$8.2 million;HOME Funds-$1.4 million;Revolving Loan Payments-$1.4 million;and Housing Development Fund-$840,000. 2 Actual revenues for FY 2006/7. The projections for FY 2007/8 through FY 2013/14 amount are based on Agency projections. The FY 2014/15 amount represents a 2%increase. 3 Actual revenues for FY 2006/7. The amount is increased by 0.0%annually thereafter. 4 The loan portfolio has an outstanding balance of$3.0 million. The loans provided in the first year are based on the Fund Balance. The loans funded each year thereafter will not exceed the repayment revenues received by the Agency. 5 This revenue source is developer payments made to the Agency in return for the Agency fulfilling the developer's inclusiona housing obligations. P p Y 9 Y� 9 Y 9 p rY 9 9 6 Limited to the revenues that will be allocated to Rehabilitation Loan Program administration. Actual revenues for FY 2006/7. The amount is increased by 0.0%annually thereafter. Includes:Loan Payments;Administrative Cost Bonds;Miscellaneous;ERAF Repayment from 80%Funds;and Main-Pier Loan Repayment. 6 Interest earnings estimated based on a 4%on the average of the Beginning and Ending Balance in each year. 9 Actual costs for FY 2006/7. The projections for FY 2007/8 through FY 2013/14 amount are based on Agency projections. The FY 2014/15 amount represents a 5.0%increase. 10 The projections are based on a subsidy cost of$300,000/unit in FY 2007/8 escalated at 5%annually thereafter. The assistance is funded with Set-Aside and HOME funds 11 The projections are based on a subsidy cost of$75,000/unit. The assistance is allocated as follows:$9.0 million in Set-Aside funds and$4.8 million in Housing Development Funds. 12 The projections are based on an average subsidy cost of$60,000/unit in FY 2006/7 escalated at 5%annually thereafter. 13 The projections are based on an average subsidy cost of$10,000/unit in FY 2006/7 escalated at 5%annually thereafter. 14 Comprised of existing homes sold to households at incomes above 120%of the County Median Income. The funding source is the City's Housing Development Fund and the average assistance is set at$100,000/unit. 15 Average subsidy estimated at$127,600/unit for very-low income units;$106,333/low income unit;and$58,000/moderate income unit. Prepared by:Keyser Marston Associates,Inc. File name:HB Strategy_11_26_07;H-7 Page 2 of 2 RCA ROUTING SHEET INITIATING DEPARTMENT: Economic Development SUBJECT: Approval of the Mid-Term Update Report for the Affordable Housing Component (2005-2009) COUNCIL MEETING DATE: December 17, 2007 .._. _ _. RCA ATTACHMENTS STATUS Ordinance (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Resolution (w/exhibits & legislative draft if applicable) Attached ❑ Not Applicable Tract Map, Location Map and/or other Exhibits Attached ❑ Not Applicable Contract/Agreement (w/exhibits if applicable) Attached ❑ (Signed in full by the City Attorney) Not Applicable Subleases, Third Party Agreements, etc. Attached ❑ (Approved as to form by City Attorney) Not Applicable Certificates of Insurance (Approved by the City Attorney) Attached ❑ Not Applicable Fiscal Impact Statement (Unbudgeted, over $5,000) Attached ❑ Not Applicable Bonds (If applicable) Attached ❑ Not Applicable Staff Report (if applicable) Notached t Applicable ®❑ Commission, Board or Committee Report (If applicable) Attached ❑ Not Applicable Findings/Conditions for Approval and/or Denial Attached ❑ Not Applicable EXPLANATION FOR MISSING ATTACHMENTS'' REVIEWED RETURNED FORWARDED.; Administrative Staff ( ) ( ) Deputy City Administrator Initial City Administrator Initial City Clerk ( ) EXPLANATION FOR RETURN OF ITEM: (Below Spaoe For City Clerk's Use QtW RCA Author: Fritzal 1519 AB m ,leentation an Affarae� ®using Strtey Huntington Beach City Council December 17, 2007 :a Affordable Housing Accomplishments ---- ® The Agency has assisted over 1,000 affordable housing units since the late 1980's Nearly 500 affordable units have been developed under the City's Inclusionary Housing Policy December 17,2007 Keyser Marston Associates Page 2 h - Affordable Housing Requirements ® Production and replacement of low and moderate income housing. ® Set-aside and expenditure of 20% of gross tax increment to increase, improve and preserve low and moderate income housing. ♦ Preparing reports on how the responsibilities will be met. December 17,2007 Keyser Marston Associates Page 3 Replacement Housing Requirements ® The Agency must identify units proposed to be removed by Agency action and prepare a plan to replace the units. _- ® The Agency has fulfilled all the replacement housing obligations for all units removed in the past. ® No units are currently anticipated to be removed by Agency action. December 17,2007 Keyser Marston Associates Page 4 2 Inclusi®nary Housing Production Requirements The Agency must identify all residential development in the Project Areas. ® In 10-year intervals, income restricted units subject to covenants must be developed or substantially rehabilitated. ® The Agency and/or the City must be beneficiaries to the income restriction covenants. December 17,2007 Keyser Marston Associates Page 5 Inclusionary Housing Production Obligations Agency Developed Housing Development to Date 164 Production Obligation: Very-Low Income 25 Low/Moderate Income 25 Total Production Obligation 50 December 17,2007 Keyser Marston Associates Page 6 3 { ° Inclusi®nary Housing Units �4 Production Agency Developed Housing Very-Low Low/Moderate 'Total Income Income Obligation 25 25 50 Fulfillment 164 0 164 Surplus 139 (25) 114 December 17,2007 Keyser Marston Associates Page 7 Inclusionary Housing Production Obligations Private /Agency Assisted Development Development to Date 2,470 Production Obligation: Very-Low Income 1.49 Low/Moderate Income 222 Total Production Obligation 371 December 17,2007 Keyser Marston Associates Page 8 4 Inclusionary Housing Units Production Private /Agency Assisted Development Very-Low Low/Moderate Total Income Income Obligation 149.0 222.0 371.0 Fulfillment 133.5 284.5 418.0 Surplus (15.5) 62.5 47.0 December 17,2007 Keyser Marston Associates Page 9 M -- Proportionality Tests January 2002 — December 2014 ® Income At least 37% of funds must be spent on very-low and no more than 3 3% on moderate income. -_-- Plan calls for 73% of Set-Aside and HOME funds to be spent on very-low income; 26% for low income and 1% for moderate income. December 17,2007 Keyser Marston Associates Page 10 5 Proportionality Tests January 2002 — December 2014 -- ® Age Restrictions — No more than 30% of Set- Aside funds may be spent on age restricted housing. ® Plan calls for 30% of Set-Aside funds to be spent on age restricted housing. December 17,2007 Keyscr Marston Associates Page I Excess Surplus Calculations ® Excess Surplus calculations — No more than than the sum of four years of Set-Aside funds deposits can be unencumbered. ® The Agency is not projected to incur an excess surplus balance at any time during the Implementation Plan cycle. December 17,2007 Keyser Marston Associates Page 12 6 Covenant Requirements 4, Redevelopment law requires covenants of at least 45 years for ownership units and 55 years for rental units ® The Agency and the City's Inclusionary Housing Ordinance currently impose 60-year covenants December 17,2007 Keyser Marston Associates Page 13 Energy Efficiency All Agency sponsored projects should include sustainable design features — options include: ® Energy and water reduction strategies ® Building design that maximizes sunlight for heat and light; and maximizes air flow for natural cooling ® Solid waste reduction technologies -- ® Storm water mitigation w Gray water recycling December 17,2007 Keyser Marston Associates Page 14 7 Available Funding Sources ® Set-Aside Funds ® HOME Funds ® Inclusionary Housing In-Lieu Fees * Revolving Loan Funds ® Community Development Block Grants December 17,2007 Keyser Marston Associates Page 15 Set-Aside Funds ® Beginning fund balance in 2007/8 was $10.6 million -= ® Deposits equal approximately $3.2 million per year ® Future growth projected at 2% per year ® Can be used to assist very-low, low and moderate income households December 17,2007 Keyser Marston Associates Page 16 g HOME Funds v • The City receives approximately $700,000 per year from HUD • Funds can be used to assist very-low and low - - income households "=-_= • 15% of funds must be provided to Community Housing Development Organizations (CHDO's) December 17,2007 Keyser Marston Associates Page 17 Inclusionary Housing Fees t ® The Agency will receive $20 million in - Housing Development Fund Revenues during the Implementation Plan period. • Inclusionary housing in-lieu fees can be paid for three to nine unit projects. Revenues are - uncertain at this time. December 17,2007 Keyser Marston Associates Page 18 9 Other Funding Sources ® Revolving loan proceeds — $3.0 million in --- outstanding loans are used to fund the - ongoing rehabilitation loan program CDBG - approximately $160,000 per year is allocated to rehabilitation loan administration December 17,2007 Keyser Marston Associates Page 19 Affordable Housing Activities 1 Implementation Plan Period �r- m == ° ® Acquisition and rehabilitation projects ® Mixed-use development on commercial corridors ® Rehabilitation loans ® Workforce housing December 17,2007 Keyser Marston Associates Page 20 10 1 Oakview Neighborhood ® Work with the Oakview Task force to -- -. coordinate activities. Work with Oakview Revitalization _ Partnership to attract local farmers market. ® Work to attract business opportunities to the neighborhood. December 17,2007 Keyser Marston Associates Page 21 Oakview Neighborhood j e Focus acquisitions on contiguous parcels. = A Work with CHDO's to maximize use of HOME funds. • Rehabilitate to decent, safe & sanitary conditions. ® Consider creating a development site for future mixed-income development with sustainable design features. December 17,2007 Keyser Marston Associates Page 22 11 Huntington Gardens 180 unit HUD sponsored senior citizen -- project. The project is "at risk" of converting to market rents. Work with a nonprofit developer to acquire and rehabilitate the project, and extend the income and affordability covenants. December 17,2007 Keyser Marston Associates Page 23 Mixed-Use Development on _r Commercial Corridors o New development anticipated to be undertaken by private developers. o Opportunities for higher intensity development may be available with the SB 181.8 density bonus. This requires an affordable housing component. ® Agency may require Section 33413 inclusionary requirements for rezoning. December 17,2007 Keyser Marston Associates Page 24 12 t Rehabilitation Loan Program ® Limit program to single-family homes — which are defined as one to four units. ® Set the loan cap at $75,000 per unit with administrative ability to increase to $90,000. == ® Allow funds to be used to include features designed to improve energy efficiency. December 17,2007 Keyser Marston Associates Page 25 .f Emergency Grant Program x___t s Increase limit to $10,000 — Goal to provide 10 grants per year ® Allow use for paint/fix-up projects Continue funding with revolving loan repayment proceeds. _-_ December 17,2007 Keyser Marston Associates Page 26 13 Pacific City Affordable Housing Requirements ® The Agency is required to fulfill the Pacific City Project requirements to provide 117 _- very-low, low and median income units. ® Provide assistance to create 150 to 175 units -- adjacent to Goldenwest College. • 20% of the units must be provided to very- low income households and 30% of the units are allocated to low income households. December 17,2007 Keyser Marston Associates Pap 27 Workforce Housing • The Agency will create a program for households that cannot afford a home in Huntington Beach, but -_= are above moderate income. • The program will focus on City employees, school. teachers in the local school districts and major employers in Huntington Beach. • The program will provide down payment assistance to home buyers. December 17,2007 Keyser Marston Associates Page 28 14 Summary — Implementation flan Requirements 2004/5 — 2013/14 • The Agency will fulfill all the Section 33413 inclusionary housing production requirements. =- • The Agency's expenditures will comply with the proportionality tests imposed by Section 33334.4. • The Agency will not experience excess surplus. December 17,2007 Keyser Marston Associates Page 29 15