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HomeMy WebLinkAboutMERCY HOUSE LIVING CENTERS, FKA MERCY HOUSING TRANSITIONAL LIVING CENTERSINSURANCE NOT REQUIRED WORK MAY PROCEED CITY CLERK A-2024-073 DATE: ' JUN 14 2024 n , c b ACO) THIRD AMENDMENT TO HOUSING DEVELOPMENT LOAN AGREEMENT AND Ce AFFORDABLE HOUSING COVENANTS THIS THIRD AMENDMENT TO HOUSING DEVELOPMENT LOAN AGREEMENT AND AFFORDABLE HOUSING COVENANTS, made and entered into this 4a` day of June, 2024, by and between MERCY HOUSE LIVING CENTERS, formerly known as MERCY HOUSING TRANSITIONAL LIVING CENTERS, a California non-profit public benefit corporation ("Developer"), the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California ("City"), and the Housing Authority of the City of Santa Ana acting as the Successor Housing Agency to the Community Redevelopment Agency of the City of Santa Ana ("Successor Housing Agency"). RECITALS A. The City and Successor Housing Agency entered into a Housing Development Loan Agreement and Affordable Housing Covenants with Developer, dated April 11, 2006 (the "Agreement"), to provide financial assistance from Redevelopment funds and the United States Department of Housing and Urban Development ("HUD") under the HOME Investment Partnership Program ("HOME Program") for the rehabilitation of the Joseph House Project located at 210 East Sixteenth Street, Santa Ana, for the operation of a transitional living center for homeless, single men. B. City and Developer entered into a First Amendment to the Agreement on December 1, 2015, to modify the Joseph House transitional housing program to become a dual- purpose facility offering both transitional housing and permanent housing with supportive services for single, homeless men from the community. The proposed program modification from a transitional shelter to a dual-purpose model included the following: (1) Transition two units of transitional housing into permanent housing with supportive services, offering low rental costs in compliance with HOME low rents to meet the needs of low-income homeless men in the community, (2) One unit to continue operating as a transitional housing program; and (3) Leverage rapid re -housing funds to reduce the length of time clients stay at the shelter with the goal of connecting them to permanent affordable housing opportunities. C. City and Developer entered into a Second Amendment to the Agreement on November 7, 2017, to allow for the remaining transitional housing unit to be turned into affordable housing and dissolve transitional shelter at the site. D. The Parties now desire to enter into this Third Amendment to the Agreement to allow for permanent housing with supportive services for low-income families rather than offering housing to a target population of low-income men. Developer is proposing to use two units as shared housing with no more than two residents to a room. The two units are further identified in Exhibit G-1, attached below, and would have a total of five bedrooms. Within the two units used for shared housing, two rooms shall be available as private bedrooms for a single individual. The rent for the private bedrooms would be 5 5394.00101%42164031.1 more than the shared bedrooms, subject to affordability requirements set forth in the Agreement. NOW THEREFORE, in consideration of the mutual and respective covenants and promises hereinafter contained and made, and subject to all of the terms and conditions of said Agreement, as amended by the First and Second Amendment to the Agreement, except as herein modified, the parties agree as follows: 1. Section 1.1, Defined Terms, the first sentence of the definition of "Property" shall be amended in pertinent part to read as follows: "The Property is located in the City of Santa Ana, and shall be used to provide permanent housing with supportive services to homeless persons or Low Income families." 2. Section 5.4, Other Terms and Conditions of Loan, subsection (5) shall be amended to read as follows: "Failure of Developer or a subsequent owner to use the Property for the purpose of permanent housing with supportive services for homeless persons or Low Income households from the community." 3. Section 7.1, Use and Maintenance of the Property, subsection (B) shall be amended to read as follows: "Use the Property as a facility offering permanent housing with supportive services for homeless persons or Low Income households from the community, as detailed in the Developer's Plan attached hereto as Exhibit G-1 and incorporated herein by this reference." 4. Except as hereinabove modified in this Third Amendment, the terms of said Agreement shall remain in full force and effect. In the event of any conflict between the terms of this Third Amendment and the terms of the Agreement, as amended by the First and Second Amendments, the terms of this Third Amendment shall control. --signature page to follow- 55394.00101 \42164031.1 A-2024-073 IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be executed on the date set forth at the beginning of this Agreement. DEVELOPER MERCY HOUSE TRANSITIONAL LIVING CENTERS, a California nonprofit, public benefit corporation By: Name: Larry Haynes Title: Chief Executive Officer ATTEST: Jennifer L. all I ec ding Secretary APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney / General Counsel CITY OF SANTA ANA "6 A4 Alvaro Nunez Acting City Manager Dated: � ;b-L HOUSING AUTHORITY OF THE CITY OF SANTA ANA Michael L. Garcia Executive Director Dated: Lk Matthew Cody Best, Best & Krieger Special Counsel for the City and Housing Authority Dated: May 1, 2024 55394.00 10 1 \42164031.1 EXHIBIT G-1 DEVELOPER'S PLAN 5 53 94.00101 \42164031.1 MERCYAHOUSE Business Plan Joseph Residence Permanent Housing Program Submitted to the City of Santa Ana 4/26/2024 Plan to transition Joseph Residence from its current state as a facility exclusively providing permanent housing with supportive services for single, homeless or low-income men to one that provides permanent housing with supportive services to low-income families. Executive Summary On April11, 2006, the City of Santa Ana and the former Community Redevelopment Agency of The City of Santa Ana (RDA) entered into a Housing Development Loan Agreement and Affordable Housing Covenants with Mercy House Transitional Living Centers (Mercy House) for the rehabilitation of the Joseph House Project located at 210E. 16th Street. Mercy House operated Joseph House exclusively as a transitional housing program for homeless single men with in the community from 1990 -2015. At the time of the loan agreement in 2006, the City provided HOME Investment Partnership Program (HOME Program) and RDA tax increment funds for the rehabilitation of the property. In 2015, Mercy House submitted a request that was approved by the City and amended the HOME Program agreement to modify the Joseph House Transitional Shelter to a dual-purpose facility offering both transitional housing and permanent housing with supportive services for single, homeless from the community. This included transitioning two of the transitional housing units into permanent housing with supportive services, offering low rental costs in compliance with HOME low rents to meet the needs of low-income and formerly homeless individuals. The remaining unit was kept as transitional housing serving homeless single men. In 2017, Mercy House submitted a request that was approved by the City and amended the HOME Program agreement to modify the Joseph House Transitional Shelterfrom a dual-purpose facility offering both transitional housing and permanent housing with supportive services for single, homeless from the communityto a facility renamed "Joseph Residence" exclusively providing permanent housing with supportive services for single, homeless or low-income men from the community. This document demonstrates Mercy House's plan to further modify Joseph Residence from its current state as a facility exclusively providing permanent housingwith supportive services for single, homeless or low-income men to one that provides permanent housingwith supportive services to homeless or low-income families. Page 1 of 16 Organization Summary Mercy House Living Centers ("Mercy House") is a non-profit organization serving the homeless in Orange County, San Bernardino County, Riverside County. The non -prof it was incorporated in 1988, began operations in 1990 and has been able to operate successful homeless service programs for over 34 years. Mercy House was quickly grown from a single shelter serving 10 single men, to a full system of care designed to meet the needs of the homeless at all stages of their struggle. In the past year, Mercy House provided services to more than 5,000 of our community's most vulnerable men, women, and children. Though our services have expanded and changed, our mission and reason for existence remains the same: to end the homelessness of all who enter our system of care. Over the years we have created a system of care based on a blend of both continuum of care and housing first models of ending homelessness. This includes operating a variety of programs ranging from homeless prevention, emergency services and shelters, transitional and interim housing, rapid re -housing programs, permanent supportive housing, residential services and affordable permanent housing facilities. The intention of these programs is to address homelessness at every level. The diversity of these programs has also afforded us the experience of working with a wide variety of homeless subpopulations including, but not limited to; families, adult men and women, mothers and their children, veterans, chronically homeless individuals, persons living with HIV/AIDS, individuals overcoming substance addictions, and those who are both physically and/or mentally disabled. Mission Mission Statement: To be a leader in ending homelessness by providing a unique system of dignified housing opportunities, programs, and supportive services. Operational Statement: To end the cycle of homelessness of those who enter our system of care. Page 2 of 16 2022-2023 Statistics ➢ Mercy House ended or prevented the homelessness of 2,254 people —34% increase in housing placements from the previous year. ➢ 355 individuals were engaged in street outreach services — 38% of enrollments exited to successful situations exceeding program performance standards in Orange County ➢ 411 individuals in emergency shelter ended their homelessness and exited to permanent housing — 31 % includes in housing placements from previous year. ➢ 521 households including747 people secured housing through Rapid Rehousing assistance —96% of households were able to maintain housing immediately after exit. ➢ 536 individuals including 281 households were provided homeless prevention assistance —237% increase in people served from previous year. ➢ 367 individuals were provided permanent supportive housing —96% maintained or exited to permanent housing. Housing Portfolio Homeless Prevention (1=Y23) Housing Operated in Orange County 270 Rapid Rehousing (1=Y23) 484 Permanent Supportive Housing 288 Low-income Housing 132 0 100 200 300 400 500 600 ■ Units Page 3 of 16 Legal Entity Mercy House is a nonprofit 501(c)(3) organization founded in 1988 by Father Jerome T. Karcher. Mercy House has developed a continuum of care of provide homeless prevention, emergency shelter and services, transitional housing, and permanent housing with supportive services to homeless adults and children living in Orange County, Los Angeles County, Riverside County, Ventura County, Kern County and Phoenix, Arizona. Tax ID:33-0315864 UEI: DVJ5XQ7BMQ88 Until 2009, Mercy House was known as Mercy House Transitional Living Centers. With the development of the Rapid Re -Housing Program and the Family Redirection Program, it became clear that permanent housing had emerged as a more viable solution to ending homelessness for many clients. On February 6, 2009, Mercy House changed its name to Mercy House Living Centers. Keys to Organizational Success • Build and leverage strong, active board of directors. • Only engage in projects and services that support identified primary strategic programs • Continue to design and implement strict financial controls and accountability • Align programs and services to national best practices to ensure effective service, delivery, better housing outcomes and increased costeff activeness. Organizational Management Board of Directors The Board of Directors exists to advocate on behalf of the homeless. This entity has a responsibility to the agency to co -create and provide resources necessary for the mission and strategic development of Mercy House with the Executive Director. Board members are expected to contribute financially to the agency and secure outside monetary contributions through personal and corporate contacts. It is an expectation that the Board members attend bi- monthly meetings where they review important and relevant information relating to the agency's mission. Subcommittees of the Board address specific needs including strategic planning, fundraising and resource development, board development, overseeing audit activities, legal, human resources and agencyfinances. The Board holds responsibility for the operation of Mercy House. The Executive Director's performance is managed by the Board. This allows the staff (including the Page 4 of 16 Executive Director) to be held accountable to ensure effective service delivery, honest use of funds, and dignified general operations. Our current Board of Directors is a mix of 20 members, including participation by a formerly homeless individual. They come from a variety of sources, with varying professions. Some have been with Mercy House since its inception and have seen the agencythrough its entire history, whereas, others are new and bring an outside perspective. Executive Leadership Larry Haynes - Chief Executive Officer Larry Haynes joined Mercy House in May of 1990 as its original employee and continues to serve as the organization's Chief Executive Officer. In addition to developing all of Mercy House's programs, shelters, and.housing projects, Larry has also founded several other programs including the Interfaith Shelter Network and Homeless Provider Forum and has served as a consultant to a variety of cities and non-profit corporations. Larry was one of the co-authors of Orange County's 10 Year Plan to End Homelessness and currently serves on the Orange County Commission to End Homelessness Board of Directors, chairing its Prevention and Outreach committees. He is the Chairman of the local Emergency Food and Shelter Program and is a member of Cal State Fullerton's Community Advisory Board on Homeless Issues. Larry has previously served on many other boards and public task forces, and has with Mercy House, received dozens of recognition awards. He has also been a speaker at numerous local, state, and national workshops and conferences focusing on homeless, housing and leadership issues. Larry was also a long -tenured lay preacher at Trinity Episcopal Church, and an adjunct professor of Sociology at Vanguard University. Patti Long— Deputy Ch ief Executive Officer Patti Long joined Mercy House in 2001. She has worked in the arena of homeless services for over 30 years, includingtime as a program director of the OC Homeless Task Force, the Chair of the OC Shelter Provider Forum, and Chair of the Pomona Continuum of Care Collaborative. She currently serves as a Board Member of the Orange County Continuum of Care and is Chair of the Coordinated Entry System Subcommittee. She has served Mercy House for over 20 years and has often led the charge in adopting new programs and services and adapting our services to better meet the needs of the homeless. Patti oversees the day-to-day operations of Mercy House and directs program, administrative, and developmental operations as they serve clients, build relationships with vendors, and engage with our large and dedicated donor and volunteer base. Page 5 of 16 Mary Ellen Gross -Chief Financial Officer Mary Ellen is a CPA with over 20 years' experience in financial aspects of organizations: recording, organizing, processing and a nalyzingfinancial data, and disseminating information in a usable format helping team members efficiently and effectively do their job, be they subordinate or executive staff. She has a Bachelor of Science degree in Business Admin istration/Accountingfrom California State Polytechnic University- Pomona. She is responsible for all oversight of Mercy House's accounting practices. Robyn Willis -Chief Operations Officer In her role as the Chief Operations Officer, Robyn contributes to the advancement of the organization's overall growth, strategic planning, and management. Her responsibilities include the oversight of Human Resources, Information Technology, Administration, and Facilities. With a career spanning over three decades, she has been deeply committed to operations management, with a primary focus on enhancing operational processes in both for -profit and non-profit sectors. Before joining Mercy House, she served as the vice-president of retail operations for a non-profit dedicated to affordable housing for nine years. Throughout her career, she has consistently championed the alignment of business goats with social impact. Robyn is an ardent advocate for continuous improvement, actively seeking opportunities to enhance her own skills, elevate herteam, and optimize overall outcomes. She holds a B.A. in Liberal Studies from CSU, Long Beach, and an M.A. in Organizational Leadership from Brandman University. Allison Davenport - Chief Strategy and Compliance Officer Graduating from Cal State Fullerton with a bachelor's in Anthropology, Allison has been with Mercy House for over 15 years, contributing to the agency's growth as well as its fundraising and development efforts. In her time with the agency, she has helped the agency grow from a Allison is instrumental in the agency's program evaluation, strategic growth, collaborative partnerships, stewardship and compliance. Timothy Huynh- Chief Program Officer Timothy graduated with a Master of Science degree in Mathematics from University of California- Irvine, which makes him welt -versed in analytics and systems -level thinking. Prior to his current role with Mercy House which began in January 2020, Timothy was a former employee with Mercy House's Development Team for four years rising to the ranks of Director of Grant Compliance and Data and overseeing the agency's public grants and compliance program. As Chief Program Officer, Timothy oversees a significant portfolio of program and development activities and well as serve as a critical member of the executive management team. He directly supervises six directors workingto build their skills and confidence so that they can mentor, encourage, and motivate other staff. The portfolio includes: 1) Strategic Leadership and Special Initiatives; 2) Program Oversight including Emergency Shelter and Services, Housing Strategies for Families, Permanent Supportive and Rapid Rehousing Programs; and 3) Development Activities. Page 6 of 16 Linda Wilson -Chief Housing Officer Linda graduated with a master's degree in counseling and is a Licensed Marriage and Family Therapist. She has many years of experience in the non-profit sector, including over 25years at Mercy House. LindE has worked with diverse populations in both direct service and management positions. As Chief Housing Officer, Linda is involved in new development projects and manages the permanent housing programs playing an integral role in shaping the. Mercy House model into a self-sustaining, replicable solution to homelessness and creating new housing opportunities for the agency. Elizabeth Perez - Regional Director of Housing Solutions Elizabeth Perez graduated with a master's degree in social work and a bachelor's degree in Social Welfare. She has more than nine years' experience in the non-profit sector, Including overfour years at Mercy House. Elizabeth has worked with diverse populations in both direct service and management positions. As Regional Director of Housing Solutions, Elizabeth manages a group of program managers and ensures that ourvarious housing programs in Orange County met Mercy House's high-performance standards. Management of Finances Mercy House recognizes it is responsible for establishing and maintaining effective internal controls to ensure compliance with laws, regulations, contracts, and grants applicable to federal, state, local, and private funding. As a result, Mercy House has established fiscal accounting procedures in accordance with the Financial Accounting Standards Board (FASB) and as needed, GASB. Mercy House follows certain precepts in the conduct of its activities that include: • A Board of Directors to oversee business activities • Written policies for all accounting procedures and internal controls • Separation of accounting duties and responsibilities • Use software for accounting procedures that can track how grant money is spent • An annual outside audit afterthe fiscal year end (June 30) The objective of these practices is intended to: • Provide a reasonable assurance that all assets are safeguarded against loss by unauthorized use ordisposition • Ensure all transactions are executed in compliance with management authorizations and are recorded properly and accurately in accordance with generally accepted accounting principles • Adequately maintain records and internal control procedures to ensure compliance with laws and regulations Mercy House has a full-time CFO and supporting accountingteam, who are responsible forthe following bookkeeping activities: managing accounts payable, cash receipts and payroll; preparing monthlyfinancial statements and grant billings and assisting with the annual budget and audit. Our CEO oversees all financial activities. Our CFO and Deputy CEO will reviewfinancial statements and budgets with each Page 7 of 16 Program Manager on a regular basis and will make adjustments on spending as necessary. We utilize a fund accounting system designed specifically for non-profit agencies. We use a cash -basis accounting system. Our CFO prepares the following reports on a monthly basis: balance sheet, profit and Loss statement, general ledger, grant general ledgers, a functional expense report, and other reports as needed and required. ACertified Public Accountant who is a member of the Board of Directors is responsible for reviewing all financial statements on a monthly basis, presenting the organization's financial status at monthly Board meetings, securing Board approval of financials and preparing the annual tax returns. Keys to Organizational Success • Build and leverage strong, active board of directors. • Only engage in projects and services that support identified primary strategic programs. • Continue to design and implement strict financial controls and accountability. • Align programs and services to national best practices to ensure effective service delivery, better housing outcomes and increased cost effectiveness. Market Analysis Orange County Housing Challenges According to the Orange County Community Indicators Report (2024), the following present key indicators of homelessness and housing stability challenges for Orange County residents: RENTAL AFFORDABILITY The hourly wage needed to afford a one -bedroom apartment in Orange County increased from $36.63 per hour ($76,190 per year) in 2022 to $40.63 per hour ($84,510 per year), a significant increase of 10.9 percent. An Orange County minimum wage worker would need to work 105 hours per week to afford a one -bedroom apartment in 2023, compared to 98 hours in 2022. Fair market rent for a one -bedroom apartment in the region increased from $1,905 in 2022 to $2,113 in 2023, an increase of 10.9 percent. Meanwhile, fair market rents for two- and three -bedroom units increased by 9.3 percent and 8.5 percent, respectively. Along with inflation and high consumer costs, these rental increases have offset recent wage increases, therefore increasing financial hardship for many county residents, especially impacting the county's disadvantaged communities. As demand to both live and work in the region remains high, policymakers and developers must focus and strategize on how to best improve the supply of housing — especially affordable workforce housing — in the county. Page 8 of 16 REQUIRED WAGE FOR ONE -BEDROOM S1 =" ' ' ';ES $40 PER HOUR HOURLY WAGE NEEDED TO AFFORD A ONE -BEDROOM UNIT IN ORANGE COUNTY, 2016-2023 $45 __ ----- - — $40.63 $40 _. _ - ____ _ S36.31 $36.63 $35 -- $31.38 $34.33 $30 -. -- _---_$27.62 528-71 $25.46 1 $25-- $20 2016 2017 2018 2019 2020 2021 2022 2023 Sourcex Community Indicators Report analysis of Far Market Rent data fin. the U.S. Department of Housing and Urban Deveopment using the methodology of the National Low Income Housing Coalition MINIMUM WAGE WORK HOURS REQUIRED INCREASES TO 105 HOURS RENTAL MARKET AFFORDABILITY ORANGE COUNTY, FAIR MARKET RENT (MONTHLY) 2017 2018 2019 2020 2021 2022 2023 One Bedroom $1,436 $1,493 $1,632 $1,785 $1,888 $1,905 $2,113 Two Bedroom $1,813 $1,876 $2,037 $2,216 $2,331 $2,324 $2,539 Three Bedroom $2,531 $2,626 $2,862 $3,098 $3,227 $3,178 $3,448 Amount a household with one minimum wage earner can afford to $546 $572 $624 $676 $728 $780 $806 pay in rent (monthly) Number of hours per week a minimum wage earner must work to 105 104 105 106 104 98 105 afford aone-bedroom apartment Sources: Community Indicators Report analysis of Fair Market Rent data from the U.S. Department of Housing and Urban Development using the methodology of the National taw Income Housing Coalition Page 9 of 16 HOUSING SECURITY The number of Orange County residents living in sheltered homeless arrangements increased from 2,661 in 2022 to 2,993 in 2023, an increase of 12.5 percent. Sheltered homeless arrangements include residents in emergency shelters, transitional housing, and Safe Haven projects. Approximately 953 of these residents (or 31.8 percent) were 'adults and children,' representing a slight increase over the total of 950 measured in 2021. The number of homeless sheltered adults in Orange County increased from 1,704 to 2,029, an increase of 19.1 percent, while the number of homeless 'children only' increased. This increase in homelessness, which reflects the impact of declining affordability rates and other financial hardships, will be an ongoing concern in the near term. However, the increase in sheltered homeless arrangements also highlights there are more sheltered beds for homeless residents than ever before. This illustrates the significant efforts made over the past few years by local and regional organizations to better support and assist homeless residents. Homelessness for Families with Children in Orange County The 2022 Homeless Point -in -Time Count and Survey estimates that there area pproximatety 1,201 persons in families who were homeless in Orange County. HOUSEHOLD STATUS Households Description Unsheltered Sheltered Total (3,057) (2,661) (5,718) Individuals Individuals ages 18+ 2,806 1,704 4,510 94 Families 295 Families 389 Families Households with of 251 persons in 950 persons in 1,201 persons in Families least one adult and households: households: households; one child 130 Adulls 356 Adults 486 Adults 121 Children 594 Children 715 Children Unaccompanied Minors (17 and Youth younger without 0 7 7 parent/guardion) Family Coordinated Entry System As of April 16, 2024, data from the Family Coordinated Entry System confirms that: There are 306 families that can be matched to a suitable 2-bedroom unit. 45 of those families have Santa Ana ties. Page 10 of 16 Strategic Changes Mercy House first began operation of the Joseph House Transitional Shelter Program in 1990. It was designed to meet the needs of 10 homeless, single men within the community. Since that time, Mercy House has continuously demonstrated its commitment to servingthe evolving needs of the community and agency by strategically modifying this significant housing asset multiple times. These adaptations have allowed Mercy House to effectively meet the diverse needs of various populations, ensuring the sustained relevance and impact of its services in addressing homelessness. As a shared housing facility exclusively serving low-income and formerly homeless men, the project has encountered several significant challenges over the past few years. The impact of COVID prompted the need to reduce the number of residents served from 15 to 8 to ensure social distancing measures, particularly considering the vulnerability of elderly tenants. Additionally, there have been other notable and costly issues with the project as a result of the shared housing model. In order to ensure the sustainability of the project for many years to come, Mercy House desires to shift the target population from low-income single men to low-income families, mirroring our successful Regina House HOME program. Notably, this transition will not displace or relocate current tenants; rather, units will gradually transition to family -oriented residences through natural attrition. The charts below illustrate the current formation of the units and proposed changes as they relate to each unit within the property. Current Unit Configuration (as of April 17, 2024) Unit No. Bedroom No. Tenants per Room Population Served Maximum Rent Allowable Rent Charged Unit 1 Bedroom 1 1 tenant Single Male $516.00 $468.00 Bedroom 2 2 tenants Single Male $516.00 $385.00per person Bedroom 3 1 tenant Single Male $516.00 $468.00 Unit 2 Bedroom 1 1 tenant Single Male $554.00 $385.00 Bedroom 2 2 tenants Single Male $554.00 $385.00 per person Unit4 Bedroom 1 1 tenant Single Male $443.20 $385.00 Bedroom 2 Vacant Single Mate $443.20 N/A Unit 1: Based on prevailing 2024 FMR rate for 3-bedroom Unit in Orange County at $3,769/month. Unit and 4: Based on prevailing 2024 FMR rate for 2-bedroom Unit in Orange County at$2,783/month. Modified Unit Configuration Unit No. Bedroom No. Tenants per Room Populatio n Served Maximum Rent Allowable Rent Charged Unit 1* Bedroom 1 1 tenants Single Male $1,256.00 $468.00 Bedroom 2 2 tenants Single Male $628.00/person $385.00 per person Bedroom 3 1 tenant Single Male $1,256.00 $468.00 Unit 2* Bedroom 1 2 tenants Single Male $695.75/person $385.00 per person Bedroom 2 2 tenants Single Male $695.75/person $385.00 per person Unit4 -bedrooms lHousehold max of Family $2,783.00 $2,783.00 Notes: *Unit will convert to serving families upon tenant attrition Unit 1: Based on prevailing2024 FMR rate for 3-bedroom Unit in Orange County at $3,769/month. Unit 2 and 4: Based on prevailing 2024 FMR rate for 2-bedroom Unit in Orange County at $2,783/month. Rents for tenants with vouchers would follow applicable payment standard set by the Housing Authority. Program Design and Eligibility Joseph Residence Permanent Housing Program The Joseph Residence Permanent Housing Program is designed to cater to the needs of low- income single men initially, with a planned transition strategy to eventually accommodate low- income families as units become available due to attrition. This transition will be seamless and non -disruptive to current tenants, ensuring that no tenant currently benefiting from the program will be displaced. The program offers three units of housing. One unit is three bedrooms and two units are two - bedrooms. Each unit offers a kitchen, dining area, living area and bathrooms. Mercy House staff will be available to provide required supportive services include case management and life skills classes as well as emergency and maintenance assistance. Afourth unit on the property (Unit#3) is retained by an on -site Residential Coordinatorwho is able to provide emergency assistance to tenants and support the program's good neighbor policies. Mercy House would like the option to repurpose this as a family unit through attrition unless the need at the time is determined to best be served by having an onsite residential coordinator. The targeted outcome for each individual will be long-term, stable housing. Each tenant will be provided with case management to identify barriers to permanent housing, with the ultimate goal being stable housing for each individual, whether that is through our permanent housing programs, or permanent housing outside of Mercy House's Continuum of Care. Eligibility for Admission To be eligible for admission to the Joseph Residence Permanent Housing Program, an applicant must be documented and of legal age (18 years of age or older). Every tenant will be required to be under 80%Area Median Income at time of entry and throughout their stay. All applicants will be considered individually. Applicants will be considered when they complete the application packet and the following criteria are met: 1) Applicant's verified minimum monthly gross income is 1 1/2times overthe amountof resident's rent payment. For Section 8 voucher holders, this requirement does not apply. 2) Household's annual income does not exceed the low-income limits (80%of area median income) as established by HUD. 3) Household income is such that applicant can satisfactorily meet their debt obligations without subtracting from other necessary living expenses. This includes payment of rent, current debt payments and basic necessities. 4) No eviction history for a period of 2 years prior to entry. 5) No history of criminal convictions for sex offenses, violent crimes and distribution of drugs. No outstanding felony warrants. b) No record of disturbance of neighbors, damage to or destruction of property, living or housekeeping habits at prior residences, which adversely affects the health, safety or welfare of othertenants. 7) Willing and able to live cooperatively in a communal living situation and abide by the policies outlined in the Joseph Residence Rules of Occupancy and Rental Agreement addendums. 8) Willingto participate in annual recertification meetings to verify income and continued eligibility. Residents for the Joseph Residence Permanent Supportive Housing Program will be selected based on their eligibility as well as their need for low-income housing and the statutory purpose in leasing a socially and financially sound housing development, which provides not only a decent home and suitable living environment, but fosters economic and social diversity in the tenant body as a whole. Structure and Location Joseph Residence is located in the city of Santa Ana in the French Park neighborhood. Mercy House owns three other properties in the same neighborhood and has been an active participant in the community since 1990. The Joseph Residence property has access to grocery stores, restaurants and public transportation. The property is comprised of four units, three of which will be used for permanent housing with supportive services. The three units are 2-bedroom unitswith adequate cooking and hygiene facilities. The fourth unit is occupied by an on -site residential coordinator. Zoning and Uses Joseph Residence is located in Zoning SP3 (Midtown Specific Plan) which allows multi -family dwellings by right. Rehabilitation for Use as Permanent Housing Facility for Families The Joseph Residence facilitywould require little rehabilitation to transition to a permanent housing facility for fam! Lies. During the past year Mercy House made a number of minor repairs to the units. Prior to lease up Mercy House will inspect the units again for any necessary repairs and/or alterations in preparation for new low-income tenants. It is not anticipated that these repairs would significantly delay project start-up. On -going Maintenance of the Facility Mercy House has on staff Maintenance Managers who are in charge of regular maintenance and repair of Mercy House's facilities, including the Joseph Residence Facility. Additionally, Mercy House has connections to a network of professional service volunteers who provide pro-bono services such as plumbing, electrical and landscaping as needs should arise. Volunteer groups will be recruited to support facility beautification projects that include upgrades to the facility grounds and gardens, interior furniture replacement as well as interior and exterior painting projects. Strategies for Sustainability and Leveraging Mercy House has consistently funded the operations of Joseph Residence since inception through a combination of public and private sources, with private foundations and rental receipts as the primary source of fundingforthe project in its current state as a permanent housing facility. Private funders are often more inclined to support programs that serve families with children therefore the population shift also fosters opportunities for longterm financial support from the communityto ensure its sustainability.