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Home My WebLink About19H - HOUSING REPORTREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: AUGUST 21, 2018 TITLE: RECEIVE AND FILE THE QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES APRIL 2018 - JUNE 2018 {STRATEGIC PLAN NO. 5,3) i tel,% LTJ un, RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1� Reading ❑ Ordinance on 2nd Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Receive and file the Quarterly Report for Housing Division Projects and Activities for the period of April 2018 — June 2018. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION At a Meeting on July 25, 2018, by a vote of 7:0 (Cano absent), the Community Redevelopment and Housing Commission approved the recommended action. DISCUSSION This report for the quarter ending on June 30, 2018 provides statistics for all of the affordable housing projects and activities for the Housing Division. The report is divided into three sections: Loan Activity, Loan Portfolio Management and Monitoring, Affordable Housing Funds and Commitments, and Development Projects. Loan Activity Applications The Housing Division offers several different programs including down payment assistance for first-time homebuyers and rehabilitation loans for mobile homes, single-family, multi -family, and historic homes. Inquiries are received from the public and applications are mailed out, received and approved for these programs on a continual basis. Table 1 shows the number of inquiries, applications sent out, received and approved by type for the quarter and for the total fiscal year. 19H-1 Quarterly Report for Housing Division August 21, 2018 Page 2 Table 1: Applications Sent Out, Received & Approved Program Q4 Inquiries Total FY Applications Sent Out Q4 Total FY Applications Received Q4 Total FY Applications A proved Q4 Total FY Single -Family Rehabilitation 40 176 34 159 2 12 0 3 Mobile Home Rehabilitation 3 63 1 48 2 7 0 3 Multi -Family Rehabilitation 0 0 0 0 0 0 0 0 Historic Home Restoration 0 4 0 3 0 0 0 0 Homeownership 38 213 24 163 4 7 0 1 The number of applications received is typically lower than the number of applications sent out in any given period due to the stringent program guidelines for eligibility regulated by the Federal government, which makes it difficult for most applicants to qualify. In order to improve the success rate of applications for the various programs listed above (Single -Family, Mobile Home, Multi -Family, Historic Home Restoration and Homeownership), staff will enhance and expand targeted marketing efforts for the programs after a full-time Housing Analyst is hired by the City. Rehabilitation Loan Underwriting and Approval Progress For the rehabilitation loans, staff reviews applicant eligibility, verifies income and assets, and oversees underwriting to ensure compliance with program guidelines and requirements established by the funding source. In addition, staff conducts an inspection of the property, prepares a work write-up to determine rehabilitation work to be performed, and develops a budget for the work. Due to the complex funding requirements, applications may be in underwriting for several months. The length of time in underwriting is largely determined by the applicant's timely submittal of the necessary paperwork. Once approved, staff prepares all necessary loan documents, makes arrangements for loan execution, and reserves the required loan funds. During this quarter, two (2) mobile home loans were approved, three (3) Habitat for Humanity home buyers were approved and two (2) inclusionary housing purchases at City Ventures were approved and closed escrow. Rehabilitation Program Construction Progress During this phase, homeowners receiving rehabilitation loans are guided through an open selection of contractors to complete the work on their homes. Each homeowner is given a list of contractors that have been screened by staff for license and insurance requirements. However, homeowners are allowed to select any contractor that meets these same requirements. Staff assists the homeowners with the evaluation of bids and selection of a contractor. Staff also monitors the construction work, approves payments to contractors, and tracks expenditures to ensure compliance with the loan agreement and program guidelines. At the end of this quarter, there were four (4) homeowner rehabilitation projects out to bid and two (2) under construction. Down Payment Assistance Loan Program Progress For the Down Payment Assistance Loan Program, staff evaluates applicant eligibility and oversees underwriting to ensure compliance with program guidelines and requirements established by the U.S. Department of Housing and Urban Development (HUD). Applicants must meet established income requirements, complete an eight-hour pre -purchase counseling program from a HUD -approved housing counseling agency, be pre -qualified for a first mortgage 19H-2 Quarterly Report for Housing Division August 21, 2018 Page 3 and have a minimum of three percent of the purchase price from their own savings. Other HUD requirements apply, including a current maximum sales price of $513,000 for a single family home or condo. On March 6, 2018, City Council approved an update to the Down Payment Assistance Loan Program increasing the loan amount to $80,000 for low income households and approving the use of the Inclusionary Housing Fund to offer down payment assistance of up to $40,000 to moderate income households. The updated program requires the buyer must be a current resident of Santa Ana or work in Santa Ana at least 32 hour per week (except U.S Military Veterans). Additionally, the property needs to be in good condition and pass an inspection. During this quarter, staff conducted one (1) down payment assistance workshop in which a total of 15 people attended. Staff also partnered with Neighbor Works Orange County to sponsor a Home Buyer Fair at the Delhi Center in which 80 people attended. Loan Portfolio Management & Monitoring The Housing Division is responsible for managing the residential loan portfolio which includes all of the loans entered into by the City and Housing Authority acting as the Housing Successor Agency. As of the end of this quarter, the principal balance was $129,342,571. This is comprised of 410 loans of which 386 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $593,744 in payments of principal and interest during this quarter. Table 2: Portfolio Revenue Monitoring As part of the requirements for these funds, staff must monitor the owner -occupancy of single family homes that have received loans, and the building code compliance of units in rental projects with long-term affordability covenants. During this quarter, 36 owner -occupancy recertification letters were mailed and 29 were returned and processed. Staff also audited files for eighteen (18) loans and conducted building code compliance inspections for 97 units in nine (9) projects. Regulations require that only a sample of units be selected for inspection. Staff also inspects the grounds and common areas such as laundry rooms to ensure they also meet municipal code requirements. The grounds, common areas and all of the inspected units were found to be in compliance at the time of initial inspection. 19H-3 Funding Sources HOME CDBG Redevelopment NSP CalHOME Loan Payoffs $0 $0 $283,806 $0 $0 Residual Receipts $153,020 $0 $115,003 $9,861 $0 Payments Amortized Loan $5,017 $5,424 $21,613 $0 $0 Payments Total For Q3 $158,037 $5,424 $420,422 $9,861 $0 Monitoring As part of the requirements for these funds, staff must monitor the owner -occupancy of single family homes that have received loans, and the building code compliance of units in rental projects with long-term affordability covenants. During this quarter, 36 owner -occupancy recertification letters were mailed and 29 were returned and processed. Staff also audited files for eighteen (18) loans and conducted building code compliance inspections for 97 units in nine (9) projects. Regulations require that only a sample of units be selected for inspection. Staff also inspects the grounds and common areas such as laundry rooms to ensure they also meet municipal code requirements. The grounds, common areas and all of the inspected units were found to be in compliance at the time of initial inspection. 19H-3 Quarterly Report for Housing Division August 21, 2018 Page_4__ Available Funds and Land Assets for Affordable Housing Development Projects The City of Santa Ana and the Housing Authority acting as the Housing Successor Agency manages multiple sources of local, state and federal funds to promote and facilitate the development of affordable housing as well as land assets held by the Housing Successor Agency. Exhibit 1 provides a summary of the funds available as of the end of this quarter. Exhibit 2 provides a summary of available land assets. Housing Opportunity Ordinance All in -lieu fees, penalties and other monies collected pursuant to the Housing Opportunity Ordinance, including interest, are deposited into the Inclusionary Housing Fund. Since inception, the Inclusionary Housing Fund has generated over $10.5 million to be used for the development of housing affordable to low and moderate income households, with a reasonable amount spent on administrative or related expenses associated with the administration of the Housing Opportunity Ordinance. To date, the Inclusionary Housing Fund has invested $6,075,000 towards the development of 107 affordable rental housing units in the City. In regards to affordable ownership housing units, a total of 23 inclusionary affordable homes have been produced and/or are under construction as a result of the Housing Opportunity Ordinance. Projects Under Development Below are brief summaries for projects under development. Exhibit 3 provides a development timeline for the larger development projects including the Depot at Santiago, the Santa Ana Arts Collective, First Street Apartments, Santa Ana Veterans Village, Aqua Housing, and Tiny Tim Plaza. For Sale Infill Housinq (4010 - 4026 E. McFadden Street) • Developer: Habitat for Humanity of Orange County • Description: Acquisition and new construction project comprised of five (5) affordable single- family homes to be sold to qualified low- to moderate -income buyers. • City Funds: Land provided by the Redevelopment Agency • Status: Construction was completed and a Ribbon -Cutting Ceremony was held on June 16, 2018. Staff is working with the developer on the selection and approval of qualified buyers. Depot at Santiago (923 N. Santiago Street) • Developer: C & C Development • Description: Acquisition, demolition and new construction project comprised of 69 affordable rental units, 1 manger's unit, a 3,000 SF community room, and 8,500 SF of retail space. • City Funds: HOME ($2,634,566), CDBG ($365,434), Eight (8) Project -Based Vouchers • Update: A Grand Opening Ceremony was held on June 14, 2018. All units are expected to be occupied by June 30, 2018. 19H-4 Quarterly Report for Housing Division August 21, 2018 Page 5 Santa Ana Arts Collective (1666 N. Main Street) • Developer: Meta Housing Corporation • Description: Acquisition, adaptive reuse and new construction project comprised of 57 affordable rental units designated for professional artists of all disciplines, and 1 manager's unit. Permanent supportive housing for 10 units will be funded by HHSA/SNHP finds from the County of Orange. • City Funds: Inclusionary Housing ($4,775,000), HOME ($2,219,760), CDBG ($500,000) • Update: Significant foundation and seismic modifications are underway. First Street Apartments (1440 E. First Street) • Developer: AMCAL Multi -Housing, LLC. • Description: Demolition and new construction of an affordable multifamily apartment complex consisting of 68 units of rental housing serving very -low and extremely -low income families, and 1 manager's unit. _ • City Funds: Housing Successor Agency ($8,522,740), Eight (8) Project -Based Vouchers • Update: Demolition completed, grading and site drainage underway. Santa Ana Veterans Village (3312 W. First Street) • Developer: Jamboree Housing Corporation with Step Up on Second as the service provider • Description: New construction of an affordable multifamily apartment complex consisting of 75 units of permanent supportive housing with wrap-around supportive services for HUD -Veterans Affairs Supportive Housing (VASH) eligible homeless veterans in the City of Santa Ana, and 1 manager's unit. • City Funds: 75 HUD-VASH Project -Based Vouchers ( $9,790,000), HOME-CHDO ($352,963) • Update: On June 13, 2018, Jamboree Housing was awarded 9% low-income housing tax credits for the project. Following this award, Jamboree plans to close on their financing before the end of the calendar year and break ground early next year. Aqua Housing (317 E. 17th Street) • Developer: Community Development Partners (CDP) with Mercy House as the service provider • Description: Acquisition, demolition and new construction of a former motel yielding 56 units of affordable permanent supportive housing with wrap-around supportive services for chronically homeless individuals in the City of Santa Ana, and 1 manager's unit. • City Funds: 56 Project -Based Vouchers ($9,237,900) • Update: CDP was successful in securing an award of $7,035,800 in Special Needs Housing Program funds from the County of Orange and $1,941,000 in Infill Infrastructure Grant Program funds from the California Department of Housing and Community Development. CDP will be applying for noncompetitive 4% low income housing tax credits in August 2018 and expects to close on their financing in October 2018. CDP has begun reviewing full construction drawings and design with the City's Planning Department Tiny Tim Plaza (2223 West 5th Street) • Developer: Community Development Partners. • Description: New construction of an affordable multifamily apartment complex consisting of 51 units of rental housing serving very -low and extremely -low income families, and 1 manager's unit. 19H-5 Quarterly Report for Housing Division August 21, 2018 Page 6 ! • City Funds: Inclusionary Housing ($1,300,000), Housing Successor Agency ($4,700,000) • Update: CDP is currently pursuing other sources of financing to fill an estimated financial gap of approximately $11.7 million. On July 2, 2018, CDP submitted an application for 9% low-income housing tax credits for the project. CDP is optimistic in getting funding based on the other apllicants in the Orage County region. Awards for the 9% low-income housing tax credits are announced in September 2018. NSP 1, 2 and 3 Programs The City is seeking proposals for $1,239,599 in NSP Program funds available in the Request for Proposals. Request for Proposals - RFP #18-056 - Affordable Housing Development The City of Santa Ana and the Housing Authority of the City of Santa Ana issued a Request for Proposals (RFP) on July 2, 2018 for the development of affordable housing in the City. Proposed developments may be for acquisition and/or rehabilitation of eligible properties for rental or transitional housing; acquisition and conversion of non-residential property to multifamily rental units; and/or new construction of housing units for rental housing. Land assets owned by the Housing Authority of the City of Santa Ana are also available for development under the RFP. Additional information regarding the RFP is available on the City of Santa Ana's website. STRATEGIC PLAN ALIGNMENT The activities covered by this report allow the City to meet Goal # 5 - Community Health, Livability, Engagement & Sustainability, Objective # 3 (Facilitate diverse housing opportunities and support efforts to preserve and improve the livability of Santa Ana neighborhoods). FISCAL IMPACT There is no fiscal impact associated with this action. _a� NIV-1 Steven A. Mendoza Executive Director Community Development Agency Exhibits: 1. Available Funds for Affordable Housing Development Projects 2. ,Available Land Assets for Affordable Housing Development 3. Project Timelines 19H-6 Exhibit 1 Available Funds for Affordable Housing Development Projects As of May 31, 2018 Housing Successor Agency (Housing Authority) $5,608,197 Cash on Hand ($85,227) First Street Apartments Loan ' ($170,395) First Street Apartments Project Costs ($4,700,000) Tiny Tim Plaza Conditional Pre -Commitment Loan 2 ($273,804) Habitat for Humanity Disposition and Development Agreement ($250,000) Administrative Costs Allowance a $128,771 Available Funds Inclusionary Housing Funds $5,566,097 Cash on Hand" ($466,859) Santa Ana Arts Collective Project Costs 5 ($1,300,000) Tiny Tim Plaza Conditional Pre -Commitment Loan 2 ($243,361) Administrative Costs Allowance (CDA/PBA) ($400,000) Down Payment Assistance Program B $3,155,877 Available Funds HOME Program $1,845,383 Funds to Drawdown ($352,963) Santa Ana Veterans Village Pre -Commitment Loan $1,492,420 Available Funds to Drawdown CDBG Program (Acquisition/Rehabilitation Projects Only) $974,191 Funds to Drawdown $974,191 Available Funds to Drawdown $5,751,258 Total Available Funds t Approved by Housing Authority on January 16, 2018. 90%of loan paid on March 13, 2018; 10% remaining to be paid upon completlan of construction. 2 Approved by City CoundMousing Authority on June 20, 2017. e The Housing Successor Agency relies an available cash to fund the monitoring and compliance functions related to the farmer Redevelopment Agency's housing loans. 4 PR Broadshme Heritage Holdings, Phase l paidiMieu fees in die amount of$2,712,304.10 in November 2017. s Project costs only; $4.8101 in loans approved by City Council paid on July 26, 2017. e Approved by City Council on March 6, 2018 ' Approved by City Council on February 7, 2017. Loan agreement to be approved by City Coundl on August 21, 2018. 19H-7 19H-8 EXHIBIT 2 AVAILABLE LAND ASSETS FOR AFFORDABLE HOUSING DEVELOPMENT (1) 302 E. Twenty -Second Street a. APN: 003-122-25 b. Lot Size: 27,817sf c. Current Zoning: R1 Single -Family Residence, which allows one house per lot. d. Parcel was purchased using Low and Moderate Income Housing Asset Fund - 20% Set Aside e. Previous Use: Purchased from Cal Trans. It was a remnant parcel from the freeway widening project. The site was vacant and undeveloped at the time it was acquired. f. General Plan: Low Density Residential, which allows single-family residences and ancillary uses. g. Maximum du/ac: Seven units per acre. h. Site Condition / Environmental Conditions: Property is irregular in shape, is below the minimum lot size for a residential lot, and will most likely require the approval of several variances from the zoning code in order to facilitate a residential unit. (2) 801, 809 & 809 % E. Santa Ana Blvd a. APN: 398-303-04 / 398-303-05 / 398-303-06 / 398-303-07 b. Lot Size: 15,OOOsf c. Current Zoning: SD -84 is the Transit Zoning / Code, which was approved in 2010. The sub -zoning for the site is Urban Neighborhood -2 (UN -2), which allows uses such as single and multi -family dwellings and retail provided the retail is integrated into a multi-level, mixed-use project. d. Parcel was purchased using Low and Moderate Income Housing Asset Fund - 20% Set Aside (801, 807, 809 & 809'/2). Includes 807 E. Santa Ana Blvd. e. Previous Use: i. 801 —Demolished single family dwelling in 2011. ii. 807 — Acquired through a foreclosure action. Demolished single family dwelling and detached garage in 2000. iii. 809 & 809 1/2—Acquisition through Fannie Mae in 1998. Demolished two single-family dwellings in 1999. f. General Plan: Urban Neighborhood (UN), which is applicable to primarily residential areas with pedestrian oriented commercial uses. g. Maximum du/ac: Up to 30 units per acre. h. Site Condition / Environmental Conditions: This vacant lot also has alley access, which will facilitate parking at the rear of the site. (3) 826 N Lacy 1830 N. Lacy Street a. APN: 398-041-22 / 398-041-18 b. Lot Size: 8,843sf / 7,405sf c. Current Zoning: SD19 - this property is located within the French Park Historic District. d. Parcel was purchased using Low and Moderate Income Housing Asset Fund - 20% Set Aside (both parcels) e. Previous Use: 830 was formerly 412 E. Vance Street. Demolished a six -unit apartment building and garage in 1995. f. General Plan: Low Density Residential, which allows single-family residences and ancillary uses. g. Maximum du/ac: Seven units per acre. 19H-9 h. Site Condition/ Environmental Conditions: This vacant site will need to comply with the design guidelines of the French Park Historic District and will require review by the French Park Design Committee. (4) 1126 & 1146 E. Washington Ave. a. APN:398-092-14 b. Lot Size: 62,347sf (1.43 Acres) c. Current Zoning: SD -84 d. Parcel was purchased using Low and Moderate Income Housing Asset Fund - 20% Set Aside e. Previous Use: Purchased from Cal Trans. Remnant parcel from freeway widening project. Cal Trans demolished five buildings on the site in the early 1990s. The site was vacant and undeveloped when it was acquired by the City. f. General Plan: District Center (DC), which is a designation that allows mixed-use development. g. Maximum du/ac: Up to 90 units per acre. h. Site Condition / Environmental Conditions: This property is located within the Transit Village sub -zoning district, which allows the most intense development within the SD - 84 district. Building types allowed include a Tuck Under product (3 stories/18 units per acre) up to a Tower on Podium (25 stories/90 units per acre). 19H-10 Exhibit 3 Current Affordable Housing Development Project Timelines Depot at 5aAtiago - 923 . 5a iago St Feb -13 RFP Issued for HOME/CDBG Funds May -13 Awarded HOME/CDBG Funds Jun -14 Planning Entitlements Approved Oct -14 RFQ Issued for PBVs Apr -15 Submitted Application for AHSC (Cap & Trade Funds) May -15 Awarded PBVs Jun -15 Awarded AHSC (Cap & Trade) Funds Sep -15 9% Low-income Housing Tax Credits Awarded Nov -15 Relocation Plan Approved May -16 Building Permits Pulled/Construction Initiated Mar -18 Construction Completion Apr -18 Tenants Anticipated Move -In Jun -18 Grand Opening 19H-11 Santa Ana Arts Collective - L666 N. Main 5t Jun -15 RFP Issued Nov -15 Approved HOME/CDBG Funds Mar -16 Submitted Application for AHSC (Cap & Trade Funds) Sep -16 Awarded AHSC (Cap & Trade) Funds Nov -16 9% Low -Income Housing Tax Credits Awarded Dec -16 Relocation Plan Approved Jul -17 Final Loan Approved/ Close of Escrow Jul -17 Planning Entitlements Approved Jul -17 Building Permits Pulled/Construction Initiated Apr -19 Anticipated Construction Completion 19H-11 First Street Apa memts -1441 E. test St Oct -15 Developer Submitted Request for Funds to CDA Apr -16 Planning Entitlements Approved Jun -17 Awarded Successor Agency Funds Jun -17 Relocation Plan Approved Sep -17 9% Low -Income Housing Tax Credits Awarded Jan -18 Final Housing Authority Loan Approved Mar -18 Close of Escrow Mar -18 Construction Initiated Aug -19 Anticipated Construction Completion 19H-11 Santa,Ana Veterans Village - 3342 W. first St Dec -16 RFP Issued for PBVs Apr -17 Approved HUD VASH PBVs Jun -17 Awarded HOME CHDO Funds Jun -17 Planning Entitlements Approved Jan -18 Awarded County Special Needs Housing Funds Feb -18 Submittal of 9% Low -Income Housing Tax Credit Application Jun -18 Award of 9% Low -Income Housing Tax Credits Dec -18 Anticipated Close of Escrow Feb -19 Anticipated Construction Initiated Mar -20 Anticipated Construction Completion Dec -16 Aqua Housing - 3P7 E. 17th St Dec -16 RFP Issued for PBVs Apr -17 Approved PBVs Jun -17 Planning Entitlements Approved Jun -17 Approved Additional PBVs Jan -18 Awarded County Special Needs Housing Funds Jan -18 Submitted Application for HCD Infill Infrastructure Funds Jun -18 Award of HCD Infill Infrastructure Funds Aug -18 Submittal of 4% Low -Income Housing Tax Credit Application Jan -18 Anticipated Close of Escrow Feb -19 Anticipated Construction Initiated Dec -16 Tiny Tim Plaza - 2223 W. 5th 5t Developer Submitted Request for Funds to CDA Jun -17 Awarded City and Housing Successor Agency Funds Jan -18 Planning Entitlements Approved Jul -18 Submittal of 9% Low -Income Housing Tax Credit Application 19H-12