HomeMy WebLinkAbout2000-11-21; City Council; 15963; Affordable Housing Credits For Villa Loma. 5
CITY OF CARLSBAD - AGENDA BILL
AB# 15, %‘3 TITLE: APPLICATION TO PURCHASE AFFORDABLE
HOUSING CREDITS IN THE VILLA LOMA MTG. ]\ l d\ -00 HOUSING PROJECT
DEPT. H/RED I c-r 4a-Pj CITY MGR. w
RECOMMENDED ACTION:
ADOPT Resolution a000 -34 3 APPROVING a request by Standard Pacific Homes to
purchase 3.7 Affordable Housing Credits in the Villa Loma housing project in order to satisfy the affordable
housing obligation of the Roesch project under the City’s lnclusionary Housing Ordinance.
I ITEM EXPLANATION:
The Roesch project is a 21 unit single-family development on a 27 acre site. The Planning Commission
approved the tentative map and related applications on October 6,1999. The applicant is requesting to
purchase affordable housing credits in the Villa Loma Project to satisfy the project’s 3.7 unit inclusionary
housing obligation. The City Council is the approval body for the purchase of affordable housing credits.
The Roesch project has two potential options in satisfying its’ inclusionary housing obligation. The project
could potentially construct on-site affordable units or purchase credits. The project is a small subdivision
both in terms of the number of units (21) and net developable area (six acres). The site has physical
constraints caused by the large slope areas and the environmental habitat areas that effectively preclude
all types of on-site affordable housing-
Because of the constraints of the project site, the applicant has elected to pursue the purchase of
affordable housing credits. The City Council has adopted Policies 57 & 58 that govern the sale of
affordable housing credits. The policies examine the feasibility of an on-site proposal, the advantages and
disadvantages of an off-site proposal, and whether the off-site project advances the City’s housing goals
and strategies. In reviewing the applicant’s request, the Affordable Housing Policy Team (staff) has utilized
the criteria contained in the policies in making their recommendation to approve the purchase of the
credits. .
I FISCAL IMPACT:
The Affordable Housing Credit is currently $37,400 per unit. The purchase of 3.7 credits will result in a
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payment of $138,380 to the City’s Housing Trust Fund.
6 EXHIBITS:
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1. City Council Resolution No. -0 l 3*3
2. Applicant’s Request to Purchase Credits
3. Draft Affordable Housing Agreement
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RESOLUTION NO. 2000-343
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF CARLSBAD, CALIFORNIA, APPROVING A REQUEST
BY STANDARD PACIFIC HOMES TO PURCHASE 3.7
AFFORDABLE HOUSING CREDITS IN THE VILLA LOMA
HOUSING PROJECT IN ORDER TO SATISFY THE
AFFORDABLE HOUSING OBLIGATION OF THE ROESCH
PROJECT UNDER THE CITY’S INCLUSIONARY
HOUSING ORDINANCE.
APPLICANT: STANDARD PACIFIC HOMES
CASE NO: CT 98-19
WHEREAS, Standard Pacific Homes has received approval of Tentative Map CT 98-19
for the development of a 21 unit residential development; and
WHEREAS, Standard Pacific Homes has requested approval from the City of Carlsbad
City Council for the purchase of 3.7 affordable housing credits in the Villa Loma housing
project to satisfy the inclusionary housing requirement of Tentative Map 98-19; and
WHEREAS, the City Council did hold a public meeting to consider said request for the
purchase of Affordable Housing Credits by Standard Pacific Homes, Inc.; and
WHEREAS, at said public meeting, upon hearing and considering all testimony, if any,
of all persons desiring to be heard, said Council considered all factors relating to the application
and request to purchase Affordable Housing Credits:
NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of
Carlsbad, California, as follows:
1. That the above recitations are true and correct.
2. The project is consistent with the goals and objectives of the City of Carlsbad’s
Housing Element, the Inclusionary Housing Ordinance, and the Carlsbad General
Plan.
3. Based upon the analysis contained within the City Council Staff Report dated
November 14, 2000, the City Council finds that the off-site satisfaction of the
inclusionary housing requirement is in the public interest.
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4. That based on the information provided within the City Council Staff Report and
testimony presented during the public meeting of the City Council, the City Council
hereby APPROVES a request by Standard Pacific Homes to purchase 3.7 affordable
housing credits in the Villa Loma ousing project in order to satisfy the affordable
housing obligation of the Roesch project under the city’s inclusionary housing
ordinance.
5. That the City Council authorizes the Community Development Director or his or her
designee to execute the Affordable Housing Agreement in substantially the form
presented to the City Council and subject to review and approval by the City
Attorney.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council
of the City of Carlsbad, California, held on the 21st day of November, 2000, by the
following vote, to wit:
AYES: c ouncil Members Lewis, Hall, Finnila, Nygaard and Kulchin.
NOES: None
ABSENT: None /I
ATTEST:
cc RESO # 2000-343
PAGE2
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3 T- m STANDARD. PACIFIC
HOMES
April 16, 1999
Ms. Deborah K. Fountain
Housing and Redevelopment Director
City of Carlsbad
2965 Roosevelt Street, Suite B
Carlsbad, CA 92008-2389
Subject: Roesch Property - Request to Purchase Off-site Affordable Housing Credits
Dear Ms. Fountain:
This letter serves as a formal request by Standard Pacific Homes to purchase off-site .
affordable housing credits in the existing Villa Loma development to satisfy the inclusionary
housing obligations of the Roesch Property subdivision (CT 98-19). This -request is in
compliance with actions previously taken by the City Council.
The City’s lnclusionary Housing Ordinance (CMC Chapter 21.85) establishes certain
requirements under which residential developers must provide housing that is affordable
to lower-income households as a condition of project approval and permit issuance. The
ordinance provides that “circumstances may arise in which the public interest would be
served by allowing some or all of the inclusionary units associated with one project site. to
be produced at an alternative site or sites.
The two inclusionary housing options that are available to a developer are that the
developer shall either 1) enter into an agreement with the City to purchase affordable
credits from Villa Loma; or 2) participate in an off-site combined inclusionary project
within the southwest quadrant and as appropriate, in accordance with the requirements
set forth in Chapter 21.85 of the Carlsbad Municipal Code and City Council Policies 57
and 58 dated September 12, 1985.
The Housing Commission has reviewed a report that projected the inclusionary housing
requirements of undeveloped property within the Southwest Quadrant of the City. The report
examined whether projected development of the Quadrant could result in a demand for off-
site credits exceeding the number of available credits in the Villa Loma project. The analysis
showed that there are sufficient excess units (Credits) to satisfy the potential demand of the
Quadrant.
‘,.,i, ,.,.;, l i,! ..
9335 Chesapeake Dr., +I D&o, CA 92 f23- IO IO
TEL (619) 292-2200 FAX (619) 292-2260
f/
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Ms. Deborah K. Fountain
April 16, 1999
Page two
In the case of the Roesch project, there are particular circumstances that warrant the
provision of the inclusionary units off-site in combination with the existing Villa Loma
Apartment project, pursuant to Council Policy 57 criteria. Significant feasibility issues affect
the development of this project on-site. Contribution to the existing off-site project versus
providing a small (3 unit) low-income apartment complex on-site will result in increased public
benefit by returning funding currently tied up in the Villa Loma project, for use in other
affordable housing activities.
We understand that a staff Project Review Committee will evaluate this request to determine
compliance with the criteria defined in Policies 57 and 58. It is also understood that staff will
then take the Committee’s recommendation to the Housing Commission and City Council.
Please call if you need additional information or if we may be of any other assistance.
Sincerely,
Standard Pacific’Homes
Vice President, Project Development
Enclosure
cc: Mr. Jack Henthorn, Jack Henthorn & Associates
Mr. Craig Ruiz, Housing and Redevelopment Department
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ROESCH PROPERTY
OFF-SITE AND COMBINED INCLUSIONARY HOUSING PROJECT
ASSESSMENT WORKSHEET -- BACKGROUND
The following background information is provided to assist you in your assessment
1. Owner/Applicant Information:
Owner: Applicant:
Ronald R. Roesch Standard Pacific Homes
2800 Nielson Way, #708 Attn: Mr. Gregg Linhoff
Santa Monica, CA 90405 9335 Chesapeake Drive
31 o-392-2374 San Diego, CA 92123-I 010
61 g-292-2200
Applicant’s Representative:
Jack Henthorn & Associates
Attn: Mr. Jack Henthorn
5375 Avenida Encinas, Ste. D
Carlsbad, CA 92008
760-438-4090
2. Off-site/Combined Project Name:
VILLA LOMA APARTMENTS
3. Description of Project with lnclusionary Housing Obligation:
The Roesch Property, CT 98-19, is a proposed 22-lot, 21-unit, single family development located
on a 27.7-acre parcel with a 3.15unit affordable housing obligation..
4. On-site Affordable Housing Description:
The Roesch Property Affordable Housing project would be a 3-unit multi-family, apartment project
occupying one lot with 1, 2 and 3-bedroom units. The units would be offered in a maximum rent
range that is affordable to households earning incomes of 80% of the Area Median Income. To
achieve financial feasibility, the project would require a net subsidy of almost $155,000 (assuming
the developer provides a fully constructed pad and that unit revenues are based on a 95%
2 occupancy rate factor).
5. Proposed Off-site Project Description:
The Villa Loma project is a 344-unit apartment development in which all units are restricted and
affordable to households with incomes not exceeding 60% of the San Diego County Median. Villa
Loma was developed by La Terraza Associates, with Bridge Housing Corporation as the
Managing General Partner. The complex contains 1, 2, 3 & 4 bedroom units.
Villa Loma was financed with assistance from the ’ City ,’ of Carlsbad and the Carlsbad
Redevelopment Agency. The assistance was structured in such a way as to create affordable
units which would be marketed exclusively by the City to “other developers” in order to satisfy an
affordable housing obligation. The Villa Loma Apartment complex is a Combined Project
according to the lnclusionary Housing Ordinance, and developers may participate in this as an
“off-site” method of satisfying their affordable housing obligation. (This is also an approved site
for the Greystone Cove, Ocean Bluff and Lohf projects.)
Participation in Villa Loma Apartments by the applicant would be in the form of a purchase of
Affordable Housing Credits (Credits) under terms established by City Council Policies Numbered
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57 and 58. If the applicant is afforded the opportunity to purchase Credits, the Roesch Property
tentative map would require the purchase of 3.15 Credits to satisfy its inclusionary housing
requirement.
6. Description of On-site Project Constraints:
Specific constraints exist which would affect an on-site affordable project’s feasibility. These
include the uneconomical small scale of the affordable project and a significant product type
difference between the affordable rental units and the proposed single-family market units that will
be developed onsite.
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ROESCH PROJECT
OFF-SITE AND COMBINED INCLUSIONARY HOUSlhJG PROJECT
ASSESSMENT WORKSHEET --WORKSHEET
1. Feasibilitv of the On-site Proposal
a. Are there significant feasibility issues due to factors such as project size, site constraints, amount
and availability of required subsidy, and competition from multiple projects that make an on-site
option impractical?
l The small scale of the developable area onsite, as much of the site has steep slopes and
environmentally sensitive habitat constraints, limits the ability to produce onsite affordable units due to
restrictions on project yield.
l The on-site affordable project is not of sufficient size to be a viable apartment project. Given the small
size of the project and its restricted rental structure, on-site management and maintenance will be
difficult.
l The small scale of the affordable housing project also makes it unlikely that the project will generate
interest from funding sources.
l The market units in this project would be required to absorb almost $7,400 per unit so that land value
could be contributed by the developer. This figure would rise to almost $11,700 per unit if the applicant
were required to build the units on site and close the post land development gap of almost $155,000.
. Based on the estimated restricted rental prices of the affordable units the applicant will be facing an
average subsidy requirement of approximately $51,700 per unit, beyond land contributions. This would
result in each unit being subsidized with approximately $81,700.
b. Will an affordable housing product be difficult to inteqrate into the proposed market development
because of significant price and product type disparity?
. Price disparities will be substantial between the low-income rental apartment units restricted at $695
$1,062 rent and the approved higher-end single-family detached homes which will have an estimated
base price range of $350,000 to $500,000.
l The integration of 3 affordable apartment units, sized at 725 to .I,100 sq. ft., into the single-family
subdivision with anticipated homes of approximately 2,700 to 4,000 square feet on a range of 7,500 to
16,300 sq. ft. lots will result in major product type disparity on-site. The surrounding area will also be
built-out with low density, single-family detached products consistent with the existing RLM land use
designation and market demand. The on-site project would, therefore, also result in substantial product
disparity with the surrounding region.
c. Does the on-site development entity have the capacitv to deliver the proposed affordable housing
on-site?
l The applicant is not experienced in the development of affordable housing.
l Affordable housing developers have advised the applicant that it is unlikely that this size of project will
generate interest from funding sources.
2. Relative AdvantaoeslDisadvantaqes of the Off-site Proposal.
a. Does the off-site option offer greater feasibilitv and cost effectiveness than the on-site alternative,
particularly regarding potential locaj public assistance?
l Villa Loma is built and has proven its feasibility; no additional assistance is required.
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l The applicant’s participation in Villa Loma would permit the intended recovery of City investment
provided to the project through utilizing “excess units”. These funds could then be used to provide
additional affordable housing. Conversely, the developer’s on-site project would create the demand for
additional new subsidy.
l The small size of the on-site project could result in additional future subsidy requests related to operating
costs.
b. Does the off-site proposal have location advantaqes over the on-site alternative, such as proximity
to jobs, schools, transportation, services; less impact on other existing developments, etc.?
l The Villa Loma development is located within close vicinity of jobs (in the nearby business parks and
shopping centers), public transportation, schools, library, shopping, as well as, other amenities and
services due to being located along the major thoroughfare, El Camino Real.
l Villa Loma is a self-contained affordable development in an area designated for higher density
residential development such as condominiums and townhomes.
l The on-site proposal could be a source of land use conflicts that typically occur when higher density
development is permitted adjacent to larger lot single family development.
c. Does the off-site option offer a development entity with the capacity to deliver the proposed project?
l The Villa Loma project is an existing project, developed and managed by a highly experienced and
specialized affordable housing developer.
d. Does the off-site option satisfy multiple’developer obligations that would be difficult to satisfy with
multiple projects?
l Villa Loma project was originally established as a Combined Project, specifically to address this purpose.
l The proposed on-site project would be one of several projects in the southwest quadrant competing for
scarce financial assistance. Villa Loma has already been financed and built and ‘thus, would not be
competing for subsidy financing.
3. Advancing Housinq Goals and Strategy
a. Does the off-site proposal advance and/or support City housing goals and policies expressed in the
Housing Element, CHAS and lnclusionaiji Housing Ordinance?
General Plan Housing Element and CHAS Goals:
l Villa Loma Apartment affordable project is targeted to the highest priority need identified, larger rental
units for low income households.
l The recovery of the City’s investment in the Villa Loma Project through the applicant’s participation will
provide for additional resources that are needed to further affordable housing development.
l Villa Loma provides a large quantity and diversity of affordable housing stock with its 344 units, including
a generous supply of different size units to meet various housing needs of the community.
lnclusionary Housing Ordinance Policies:
l Consistent with the City and public interests to use existing “excess” affordable units before supporting
additional new construction.
. In conjunction with the combined Villa Loma project, the Roesch property will provide for 15% of the total
units for affordable (lower income) residential units. The project also complies with the lnclusionary
requirements as contained in the General Plan Housing Element.
Growth Management Zone, Ord. No. NS-257 Guidelines:
l Villa Loma is coordinated with surrounding properties by providing direct access to a major Circulation
Element Roadway, El Camino Real, as well as circulation and pedestrian access to public facilities.
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ROESCH PROPERTY 4119199
AFFORDABLE HOUSING
COMPARATIVE PRO FORMA
REVENUE ANALYSIS RENT UNITS REVENUE
1 BEDROOM $695 1 $695
2 BEDROOM $888 1 $888
3 BEDROOM $1,062 1 $1,062
3 $2,645
95% OCCUPANCY $2,513
OPERATING COSTS @ 30% ($754)
NET OPERATlNG INCOME $1,759
DEBT SERVICE INCOME (1.2) $1,466
* Note: The remainder unit obligation of 15 will be met by purchase of offsite credits in the Villa Loma project.
INCOME SUPPORTED DEBT $166,944
LAND DEVELOPMENT COSTS
LAND
ON SITE IMPS
PUBLIC FEES
DESIGN/CONSULTANTS
IMPROVED SITE COST
LAND CARRY 18MO
LAND DEVELOPMENT COST
#Lots 1 $90,000
$60,000
$58,500
$35,000
$243,500
$13,500
$257,000
UNIT CONSTRUCTION COSTS
UNIT SIZE 1 BR 2 BR 3BR
SQUARE FEET (project) 725 850 1100 2,675
STRUCTURE COST $45.00 $32,625 $38,250 $49,500 $120,375
ON SITE INDIRECTS 10% STRUCT. $9,363
OVERHEAD .04 $9,740
MARKETING .02 $4,870
CONSTRUCTION COSTS $144,348 $144,348
LOAN FEES .02 $3,339
CONST FINANCING $7,217
SUBTOTAL FINANCING $10,556
PROJECT COST $411,904
GAP $244,959
Developer land contribution $90,000
NET GAP $154,959
PER UNIT NET GAP $51,653
PER UNIT GROSS SUBSIDY $81,653
Page 1 JACK HENTHORN ASSOCIATES
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RECORDING REQUESTED BY:
City of Carlsbad
WHEN RECORDED MALL TO:
City of Carlsbad
City Clerk’s Office
Attn: City Clerk
1200 Carlsbad Village Drive
Carlsbad, California 92008
(Space above for Recorder’s Use)
AFFORDABLE HOUSING AGREEMENT
THIS AFFORDABLE HOUSING AGREEMENT (“Agreement”) is entered into this day of 3 2000, by and between the CITY OF CARLSBAD, a municipal
corporation (hereinafter referred to as the “City”), and Standard Pacific Homes (hereinafter referred to as
the “Developer”), is made with reference to the following:
RECITALS
A. Developer is the owner of certain real property in the City of Carlsbad, County of San
Diego, State of California, described in “Attachment A”, which is attached hereto and incorporated
herein by this reference, and which is the subject of a Tentative Map (CT 9%14), which provides
conditional approval of the construction of 21 single family dwellings (“Project”).
B. Chapter 21.85 of the Carlsbad Municipal Code requires that this Affordable Housing
Agreement shall be entered into between the City and the Developer as a means of satisfying the
Developers’ affordable housing obligation (“Affordable Housing Obligation”), as such is defined under
Chapter 21.85 of the Carlsbad Municipal Code. The Affordable Housing Obligation for this project is
determined to be three and seven tenths (3.7) units and will be satisfied by applying the requirements set
forth in this Agreement.
NOW, THEREFORE, incorporating the foregoing Recitals and in consideration of the mutual
covenants contained herein, the parties agree as follows:
1. THE RECITALS ARE TRUE AND CORRECT.
2. SATISFACTION OF AFFORDABLE HOUSING REQUIREMENTS THROUGH
THE PAYMENT OF AFFORDABLE HOUSING CREDITS.
(a) Performance under this Agreement satisfies the Developers’ obligation for affordable
housing under Chapter 21.85 of the Carlsbad Municipal Code as applied to the land covered by Carlsbad
Tract No. 98-14 by reason of the approvals of the Tentative Map of CT 98-14, and any other applicable
approval.
(b) The Developer shall pay for three and seven tenths (3.7) Affordable Housing Credits as
established by the City and as required by Condition No. 12 of Planning Commission Resolution No.
4629. The fee shall be paid prior to the Developer receiving a building permit for the project.
3. REMEDIES
Failure by the Developer to perform in accordance with this Agreement will constitute failure to
satisfy the requirements of Chapter 21.85 of the Carlsbad Municipal Code and Condition No. 12 of
Planning Commission Resolution No. 4629. Such failure will allow the City to exercise any and all
remedies available to it including but not limited to withholding the issuance of building permits for the
lots shown on Carlsbad Tract No. 98-14.
4. NOTICES
All notices required pursuant to this Agreement shall be in writing and may be given by personal
delivery or by registered or certified mail, return receipt requested to the party to receive such notice at
the address set forth below:
TO THE CITY:
City of Carlsbad
Housing and Redevelopment Department
Attn: Housing & Redevelopment Director
2965 Roosevelt Street, Suite B
Carlsbad, California 92008-2389
TO THE DEVELOPER:
Standard Pacific Homes
9335 Chesapeake Drive
San Diego, CA 92123-2260
Any party may change the address to which notices are to be sent by notifying the other parties of the
new address, in the manner set forth above.
5. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties and no modification hereof
shall be binding unless reduced to writing and signed by the parties hereto.
6. DURATION OF AGREEMENT
This Agreement shall terminate and become null and void upon the payment of the Affordable
Housing Credits, or the repeal, termination, or modification of any applicable ordinance which act would
render the Affordable Housing Obligation unnecessary or unenforceable.
7. SUCCESSORS
This Agreement shall benefit and bind the Developer and any successive owners of Affordable
Housing Lots.
6. SEVERABILITY
In the event any provision contained in this Agreement is to be held invalid, void or
unenforceable by any court of competent jurisdiction, the remaining provisions of this Agreement shall
nevertheless, be and remain in full force and effect.
/!!
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed as of the
day and year first above written.
DEVELOPER CITY
Standard Pacific Homes City of Carlsbad, a municipal corporation
By:
PJaW
By:
MARTIN ORENYAK
Community Development Director
By:
(Title)
APPROVED AS TO FORM:
RONALD R. BALL
CITY ATTORNEY
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. V-IITE IT - DON’T SAY I-*!
Date 2/7/2001
To File; Craiq Ruiz - Hsq/Redev
From Debra Doerfler - Office of the City Clerk
As instructed by the City Clerk this item is being filed "as is". As of this date
a fully executed AFFORDABLE HOUSING AGREEMENT has not been received from Housing &
Redevelopment.
On Dec. 29, 2000 I placed an inquiry with AR initiator, Craig Ruiz, as to the status
of this agreement and was told it was not yet ready.
On Feb. 7 ,200l I placed another inquiry with same and was told that the agreement
was "probably 2-3 months away from completion."
A conformed copy of the A% & resolution have been forwarded to Hsg/Redev Attn: Craig
Ruiz. No other action can take place until the executed agreement is received in the
City Clerk's Office.
m
Debra Doerfler 2/8/2001