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HomeMy WebLinkAbout2001-04-03; City Council; 16135; Annual Housing Production Report 1999-2000AB# 161135 MTG. q-3-01 DEPT. PLN d’ CITY OF CARLSBAD -AGENDA BILL A\ TITLE- -* DEPT. HD.’ ANNUAL HOUSING PRODUCTION REPORT CITY All-Y. ’ FY 1999-2000 2k CITY MGR- RECOMMENDED ACTION: That the Council ACCEPT the staff report on housing production for the reporting period July I, 1999 to June 30,200O. ITEM EXPLANATION: Description: This agenda bill brings to the City Council staffs seventh annual report on the progress Carlsbad is making in housing production. The report is an information item only and complies with the state law requirement for an annual housing report to the local legislative body. No action or environmental review is required. Consisting of the attached memorandum to the City Manager, the annual housing production report focuses on new home production during fiscal year 1999-2000, the first year of the current housing cycle that will end June 30, 2004. It also briefly discusses the City’s efforts regarding self- certification, a pilot program enabled by state legislation that also is concerned with housing produced and provided during the fiscal year and housing cycle. The report follows the City Council’s July 2000 adoption of the new Housing Element for the current housing cycle. Through tables and text, the attached report provides: . Statistical data for both market-rate units and publicly assisted housing. . Affordability of the housing produced by income group. . Comparisons of production in this first year of the current housing cycle with overall objectives for the entire cycle and with previous fiscal years. . Observations and conclusions about the housing production data. Report Hiqhliqhts on FY 1999-2000 Housinq Production: . In fiscal year 1999-2000, 1,914 new homes were built in Carlsbad, 518 units more than the previous fiscal year and the third highest fiscal year total ever. . Eighty-eight percent of all new housing produced was affordable only to upper-income households. . Of the 182 very low and low-income units completed, 145 required the City’s financial assistance and all but six resulted from lnclusionary Housing Ordinance requirements. . The production of very low and low-income units and the acquisition of the 75unit Tyler Court senior apartment complex enabled the City to progress toward its self- certification goals. . The median sales price for a single-family detached home was $387,990; the highest sales price reported was $1,987,500 for an Aviara custom home. Report Conclusions: Carlsbad has seen significant results from its commitment to the development of housing affordable to lower-income families. This commitment is evidenced in its policy framework, the allocation of its own resources, and its efforts to pursue creative partnerships with the private sector in all aspects of housing production. The fact that the market continues to strongly support the development of housing primarily affordable to upper-income households is a key reason as to why the City must continue its commitment PAGE 2 OF AGENDA BILL NO. t b J 135 to fully implement the lnclusionary Housing Ordinance. Testimony to this is the 182 very low and low-income units produced during this past fiscal year, all but a few of which were completed because of the requirements set forth in the lnclusionary Housing Ordinance. This same fact is expected to hold true for fiscal year 2000-2001 when the City’s affordable housing stock should grow by at least 230 very-low and low-income units with the completion of the Laurel Tree and Poinsettia Station projects. As a result, Carlsbad will make significant progress toward its regional share objectives and self-certification goals for the 1999-2004 housing cycle. At this time, staff is recommending that the City Council accept this housing report. The report will be forwarded to the Governor’s Office of Planning and Research and the California Department of Housing and Community Development, as required by law. FISCAL IMPACT: None. This is an information report only. EXHIBIT: 1. Memorandum from the Planning Department to the City Manager, dated March 12, 2001, with the subject: Annual Housing Production Report - FY 7999-2000. EXHIBIT 1 MARCH 12,200l TO: CITY MANAGER VIA: Planning Director w FROM: Associate Planner ANNUAL HOUSING PRODUCTION REPORT - FISCAL YEAR 1999-2000 This document constitutes the seventh annual report describing the City’s progress in producing housing. It describes our progress during the previous fiscal year in meeting, through the construction of new homes, Carlsbad’s estimated share of the region’s forecasted growth for the four income groups identified in state law. Report Purpose The Annual Housing Production Report is prepared pursuant to California Government Code Section 65400 (b) (I), which in part requires an agency to prepare an annual report to its legislative body on the progress in meeting the agency’s share of regional housing needs. Report Period The report covers housing production during fiscal year 1999- 2000, which marks the first year of the current five-year Housing Element cycle. By state law, this cycle began July 1, 1999, and will end June 30, 2004. As part of the new housing cycle, state law also requires an update of the General Plan Housing Element. This update was adopted by the City Council in July 2000 and certified by the State Department of Housing and Community Development as of December 1,200O. Report Format The City’s progress is presented through data contained in eight tables. Table 1 defines the four income groups. Tables 2 - 4 set out the qualifying income levels for the four income groups and the corresponding rents and sales prices during fiscal year 99-00 at which housing was considered to be affordable. Table 5 provides the counts of new housing units, by income group and type of housing stock, which completed construction this last fiscal year. Table 6 shows changes in median prices over the last two years. Last, Table 7 compares our progress so far to the current five-year housing cycle objectives. At the end of this report are general observations and conclusions and a brief discussion on self-cerfificafion, a pilot program enabled by state legislation that is also concerned with housing produced and provided in the reporting period and current cycle. Regional Share Needs The determination of housing need for Carlsbad and all other jurisdictions in California is derived from the Regional Housing Needs Statements prepared by the regional councils of government (COG) before the beginning of each housing cycle. Based upon these assessments of need the CITY MANAGER HOUSING AFFORDABILITY REPORT FY 1999-2000 Page 2 local jurisdictions are charged to adopt housing objectives in the housing elements of their general plans. A regional assessment of need is an estimate of the total need for new housing construction throughout the region due to growth forecasted to occur during the five-year cycle. The overall housing need is then broken out by four income groups: vely low, low, moderate, and other (or above moderate) - all as defined by the federal Department of Housing and Urban Development, or HUD. The regional needs are then allocated to the local jurisdictions on a “regional share” basis, according to models and formulas designed by the COG. The regional share estimate of need prepared for Carlsbad for the current housing cycle is shown in Table 1. It is based, in part, upon the growth that the San Diego Association of Governments (SANDAG), the region’s COG, estimated for the City in its 2020 Regional Growth Forecast. This forecast was prepared in 1998. Table 1: Carlsbad’s Regional Share Need Estimates For Housing Qcle 7199 - 644 IIwinition* (%of New-m IlKxmeGroup CountyAreaMedian Needs Ill-) I VervLow I 5O?Xiii Very Iaw 50% or under 1,770 I LOW I 51-80% I 1,417 I Moderate 81- 120% 1,436 Other over 120% 1.591 Totals 6,214 I * Ikiiniticms are hm HUD, via the Califtia lkpxbmt of Housing and Comnmity Ikvelopmnt. The 2ooO area m3dian incorm for San Diego County is $53,700. The combined very low- and low-income (“lower”-income) estimate of need is 3,187 units. This equated to 51% of the total need for housing through June 2004. Definitions of Income Classes Table 1 also shows that each of the four income groups is defined with reference to a percentage of the local area median income. Because the incomes in a region change over time, HUD revises the dollar limits for each income group annually. The limits also vary from region to region to reflect different costs of living; the San Diego area median income, for example, is similar to that of Santa Barbara County but much higher than the median income in rural Shasta County. Income ranges are also adjusted for family size so that larger families have higher income limits. CITY MANAGER HOUSING AFFORDABILITY REPORT FY 1999-2000 Page 3 Table 2 shows the income limits for very low-, low-, moderate-, and “other” income groups for FY 99-00 for households consisting of 2, 4, 6, 8, and IO persons. For example, in calendar year 2000, a household of 6 people earning more than $31 ,I 50 and up to $49,850 last year was considered to be low-income. A family of 4 with an income of $53,700 earned what is considered to be the median household income in San Diego County. This is a $1,200 increase over the 1999 median household income of $52,500. Table 2: FY 99-00 Qualifying Limit On Annual Income BY Household Size Income Group to Which Units Persons Per Household Are Affordable 2 4 6 8 10 Very Low $21,500 $26,850 $31,150 $35,450 $39,750 Low $34,350 $42,950 $49,850 $56,700 $63,550 Moderate $51,550 $64,450 $74,750 $85,050 $95,350 Determining Housing Affordability Generally, the federal and state rule is that housing is affordable to a given family if the family pays less than 30% of its gross monthly income for housing expenses that include rental or mortgage payments, property taxes, insurance, utilities, and the like. A determination of whether a housing unit is affordable can be easily made for assisted rental housing and other legislated housing programs because documentation is maintained on both the individual household’s income and the actual cost of the unit in question (typically a rental). A determination of whether market-rate housing is affordable according to the 30% rule, on the other hand, presents some challenges. Builders of market-rate rental and for-sale housing do not set prices based upon an individual buyer’s ability to pay. Rather, the rents/prices are set to what the market will bear. Further, rents and prices do not generally vary with the number of people in the household. For example, market rent for a two-bedroom apartment will remain constant no matter if it is being rented to a I-, 2-, 3-, 4-, or 5-person household. So the challenge is how to determine to what income group (as opposed to an individual household) a given market-rate house is affordable, and to do so based upon the number of bedrooms it has (as opposed to persons). A convention developed in 1993 by member agencies of the San Diego Association of Governments is to assume that there would be two persons per bedroom. Thus, a two-bedroom unit is assumed to house four people. To determine affordable m, the practice is to set rent thresholds for each income group, using the 30% rule, with adjustments for the number of bedrooms. An additional adjustment is also made for a utility allowance, as required by HUD. Table 3 shows the resulting maximum market-rate rents (which include a $20 - 5 CITY MANAGER HOUSING AFFORDABILITY REPORT FY 1999-2000 Page 4 $40 utility allowance that increases with household size) for the four income groups for FY 99-00. For example, a two-bedroom unit with a rent of up to $671 would be at the upper threshold of affordability for a very low-income household (i.e., at 50% of county area median income). Table 3: F’Y 99-00 Qualifying Rents, By Bedroom Income Group to Which Units Number of bedrooms Are Affordable 1 Very Low $538 $6;1 3 $934 $1.0464 Low $859 $1,074 $1,246 $1,418 Moderate $1,289 $1,611 $1,869 $2,126 Source: Carlsbad Housing Authority, based upon HUD median income data, effective 3/9/2000. A utility allowance is also a factor in the rents. For-sale market-rate housing is even more complicated for purposes of determining affordability. Neither state nor federal regulations provide a formula to determine affordability. A multitude of factors are potentially involved. First, buyers do not pay the full price of a house in cash. Instead, they take out one of many types of mortgages, subject to many variables (fixed or variable interest rate, down payment, pay-back period, mortgage insurance, loan origination fees, etc.). In addition, other housing costs must be factored in, including property taxes, insurance, utilities, and homeowners’ association dues. All of these factors are recognized “housing costs” and indirectly affect how much a family can pay each month under the 30%-of-income rule. Only the principal and down payment, however, relate directly to the sales price of the house. All the others are related to financing and operating a house. Lacking guidance from state or federal law, SANDAG member agencies developed a simple formula in 1993 for use in determining the affordability of market-rate for-sale houses. The formula, provided below, follows a rule-of-thumb used by many mortgage lending institutions. As with the rental formulas discussed earlier, it was subsequently reviewed and accepted by the SANDAG Board and the California Department of Housing and Community Development. Affordable sales price = 3.0 X maximum-allowed-annual-income for each class, adjusted for bedroom count. Based upon this formula, Table 4 gives the qualifying purchase price for housing for the four income groups for FY 99-00. To illustrate, a two-bedroom house costing less than $80,550 would be potentially affordable to a very low-income CITY MANAGER HOUSING AFFORDABILITY REPORT FY 1999-2000 Page 5 family (at 50 percent of median-income). This price is three times the upper annual income limit for a very low-income family of four, at $26,850 (from Table 2). Table 4: FY 99-00 Qualifying Purchase Price, By Bedroom Are Affordable Number of Bedrooms * 3X multiplier was developed by an ad hoc committee at SANDAG with subsequent approval by the SANDAG Board in 1993. (There is no formula in state law.) The rule also assumes 2 persons per bedroom to provide a correspondence back to HUDs affordability rules based upon m per household (as opposed to bedrooms). In FY 99-00,37,6-bedroom and 3,7-bedroom houses were built in Carlsbad. HUD tables do not provide for 12 or more person households. Therefore, these homes were treated as if they were S-bedroom Based on the above information, two variables must be known about a housing unit to determine its affordability: a) the sales price or rent, and b) the number of bedrooms. Staff must collect this information for each individual housing unit. For housing created under one of the City’s housing assistance programs or under the lnclusionary Housing Ordinance this is relatively easy, as we get the data via the program or a housing agreement. However, for new market-rate rentals and for- sale homes, staff must obtain the sales price or rent information directly from the builders. Staff performs this task once a quarter via a voluntary survey of all newly constructed units. Most builders are cooperative and provide the information we need. A few are not. If the builder is not responsive, staff attempts additional contacts by mail and phone and, when necessary, by visiting sales or rental offices. As a last resort and for typically a few dozen units, we must research the County Assessor’s records for sales prices and assessed valuations and the Internet for recent home sales. Unfortunately, there is often a delay of up to several months before a home’s sales price becomes publicly available. And, despite staff efforts, sometimes cost information simply remains unavailable. Because of the extensive effort and delays involved in documenting prices and rents, this report usually trails the end of the reporting period by a number of months. For this reporting period, staff obtained sales prices and rents for all but 11 homes. Housing Activity and Affordability in FY 1999-2000 During the reporting period, builders completed construction on and the City “finaled” 1,914 new homes in Carlsbad, all of which were built by the private sector. Of the new homes completed, 145 units were built with city financial assistance and as a CITY MANAGER HOUSING AFFORDABILITY REPORT FY 1999-2000 Page 6 requirement of the lnclusionary Housing Ordinance. Nearly 70 percent, or 1,332 homes, were single-family detached homes, typically with four bedrooms. Builders also completed 350 apartments during the reporting period. Of all units produced, 88 percent (1,679 homes) were considered affordable to the other, or above-moderate, income households. Table 5 provides a breakout by type of unit and affordability group. Table 5: Affordability of Newly-Constructed Housing Reporting Period: 7/l/99 - 6/30/00 Type of Unit, LJnits I Assisted Units I Market Rate I I Income Group To Which Units are Affordable Second Dwelling Unit** S.F. S.F. I I Detached Attached Conda For Sale Rental Apts Totals 23 159 42 1,679 11 1,914 0 Very Low Low 37 Moderate 5 136 t0 0 I1 0 IO 0 Other T-w+ T-t+ 0 IO 0 0 I 0 0 unknown*** Totals 1,332 1 94 1 61 234 1 11 1 116 29 37 *“Rental Other” for this reporting period includes condominiums and duplexes that were identified as rentals by their developers. **All but six of the second dwelling units were produced to meet inclusionary housing obligations for private, tract developers. When and if these units are rented, they are required by ordinance to be affordable to “low” income households (rents no higher than 30% of 80% of adjusted San Diego county median income). ***Because the required information was not available for 11 homes, it was not possible to determine accurately to what income group these units were affordable. These homes include 6 custom homes and 5 duplex units for which cost or rent information could not be obtained from either the owners or developers or through additional staff research. There is a great probability that the custom homes should be placed in the “other” category and the duplexes either in the “moderate” or “other” category. Very Low and Low-Income Housing As can be seen from Table 5, 182 lower-income units were built, most as a result of lnclusionary Housing Ordinance requirements. These units constitute 9.5 percent of the total housing built last year. These included 29 for-sale units, 116 apartments, and 37 second dwelling units. The for-sale homes, all produced for low-income families, included five single-family detached style condominiums, each with four bedrooms, in Calavera Hills and 24 single-family attached homes at Cherry Tree Walk in the Seaside Heights community along Aviara Parkway. To be affordable for purchase, developer and city subsidies of 30 to 40 percent of the per unit sales price were required. The completion of the 116-unit Ranch0 Carrillo Apartments at Palomar Airport Road and Melrose Drive provided all of the very low-income and 93 of the low- income units completed in fiscal year 99-00. This project partially satisfies the affordable housing needs (as determined by the lnclusionary Housing Ordinance) of the Ranch0 Carrillo master planned community. The apartment project was CITY MANAGER HOUSING AFFORDABILITY REPORT FY 1999-2000 Page 7 assisted by a $1 .I6 million construction loan from the City. Rents, restricted to maintain affordability, range from approximately $480 to $1,170 for the one, two, and three bedroom apartments. The additional low-income housing built consisted of 37, second dwelling units. Large-scale developers such as Shea Homes constructed all but six of these second dwelling units to comply with inclusionary housing requirements. Generally integrated into a larger main house, second dwelling units offer completely independent living facilities and have separate entrances. Many of these units were built in Ranch0 Carrillo to partially satisfy that community’s affordable housing needs. Second dwelling units are considered as low-income housing because they are small and meet an affordable housing need for elderly parents, domestic help, college students, etc. Rental rates for second dwelling units are required to be affordable to low-income households (with incomes not exceeding 80 percent of the area median income) and tenants must be income qualified if the units are being constructed to meet the City’s lnclusionary Housing Ordinance requirements. Moderate-Income Housing There were 42 market-rate units built affordable to moderate-income families, 14 fewer than were produced in the last fiscal year. Therefore, moderate-income homes constituted but 2.2 percent of the housing created last year. The 42 moderate-income units produced included one rental (a three-bedroom condominium in La Costa available for $1,750 per month); eight, three-bedroom homes priced under $224,250, and; 33, four-bedroom residences priced under $255,150. Th ree- or four-bedroom homes with sales prices higher than these amounts would not be considered affordable to a moderate-income family as noted in Table 4. Not surprisingly, over 95 percent of the three and four-bedroom homes built this last fiscal year would be considered affordable only to households with above-moderate incomes. There were no five-bedroom homes built affordable to moderate-income families (Of the nearly 300 built, the cheapest five-bedroom home was $294,000). Note from Table 4 that a five-bedroom home is technically affordable to a moderate- income family at a price of up to $286,050. In Carlsbad not many five-bedroom homes will actually house the ten people assumed by the bedroom conversion formula. This points out a weakness in the methodology and undoubtedly leads to overstating the amount of new housing which is “truly” affordable to moderate-income families. 9 CITY MANAGER HOUSING AFFORDABILITY REPORT FY 1999-2000 Page 8 Other or Above-Moderate income Housing The balance of the new housing last year - 1,679 of the total 1,914 units, or 88 percent of the new housing produced - was affordable only to the “other” (upper- income) category. This category represents those households earning more than 120% of the area median. For a family of four, that equals an annual income of at least $64,450. After single-family detached homes, most of the upper-income units produced were apartments. During the reporting period, 234 units of the 288-unit Mirabella at Aviara apartment community were completed. These one, two, and three-bedroom apartments rent from $1,270 to $2,700 (excluding utilities). Medians and Extremes Table 6 shows that the median price for new, single-family, detached homes (not including second dwelling units or homes built with second dwelling units) was $387,990, down $1,000 from FY 98-99. Additionally, the table shows the median prices for the 94 single family attached homes and 61 condominiums were up several thousand dollars from the previous year. Table 6: Comparisons of Median Prices FY ‘99 - ‘00 vs N ‘98 - ‘99 Of all for-sale, market rate housing produced, the quarterly surveys of developers revealed a low sales price of $175,000 (surprisingly low for a single family detached home) and a high sales price of $1,987,500 for a custom home in Aviara. Overall Progress Table 7 below lists the number of dwellings completed last year by income group to identify the progress toward meeting the original regional share needs figures (from Table 1) for the entire five-year housing cycle (1999- 2004). Completed housing numbers are also expressed as a percentage of the regional share figures and as a percentage of all homes built last year. CITY MANAGER HOUSING AFFORDABILITY REPORT FY 1999-2000 Page 9 1. 2. 3. Observations of Fiscal Year 1999-2000 Table 7: Progress Vs Regional Share Need Estimates Housing Cycle 7/99 to 6/04 *“DUs” is an abreviation for “dwelling units.” **“Objective” is from Regional Housing Needs Stafement , prepared by SANDAG, July 1990. The overall housinq production of 1,914 homes is the third highest fiscal year total ever, eclipsed only by fiscal years 85-86 (2,326 units) and 86-87 (2,308 units). It is also 518 more units than FY 98-99. The private sector built all of the homes during the reporting period and 145 units were provided financial assistance from the City. The 182 very-low and low-income housinq units built represent a significant increase in affordable housing construction compared to the last three fiscal years combined. From July 1996 to June 1999, 102 very-low and low-income units were built. Additionally, a greater variety of lower-income housing was built in comparison to previous years. The 182 units include a broad mix of apartments, condominiums, single-family attached homes, and second dwelling units and constitute 9.5 percent of the total housing built in FY 99-00. Furthermore, the 145 homes provided with city financial assistance were all very-low and low-income residences. Moreover, all lower-income housing, with the exception of six, second dwelling units, resulted from lnclusionary Housing Ordinance requirements. Moderate-income housinq production of 42 units represents a decrease from previous fiscal years. In fiscal years 97-98 and 98-99, 126 and 56 moderate- income units, respectively, were built. The Regional Share estimate of need indicates that 1,436 moderate-income units will be needed by 2004, the end of CITY MANAGER HOUSING AFFORDABILITY REPORT FY 1999-2000 Page IO the current housing cycle. Production during the reporting period represents fewer than three percent of this need. When the City considered including a moderate-income requirement as part of its lnclusionary Housing Ordinance in the early 1990s the requirement was set aside when the private sector assured the City that it would produce moderate- income housing without inclusionary requirements. Based upon this assurance, the City made a conscious decision to focus its own resources and efforts on affordable housing for lower-income households. The industry’s production figures do not stand up well to its earlier assurances. In addition, as is pointed out in the main body of this report, at least some of the units produced in this category may not be truly affordable to moderate- income families: four-bedroom homes, selling at $255,000, are technically affordable to the upper end of moderate-income families only if they house 8 or more people. This type of production may not be meeting Carlsbad’s real moderate-income needs. And, despite the continuous upswing in total housing production over the past few years, the output of new moderate-income homes has declined since fiscal year 97-98, both in absolute numbers and as a percentage of total production. 4. “Other”-income housinq production, or housing affordable only to higher- income families, remains the dominant housing category in Carlsbad. Since 88% of the units produced this last fiscal year fall into this category, the City has already exceeded its need of other-income units for the entire 1999-2004 housing cycle, according to regional share need estimates. The median sales price for all ownership units built last year was $370,000, a price affordable only to “other” income classes. Similar were the rents for most of the 245 market rate rental units produced. Clearly, Carlsbad’s private sector continues to produce primarily higher-end housing. A number of factors contribute to this trend: Demand for higher-end housing remains relatively strong; tax incentives for producing more affordable housing are few; and, despite lower, relatively stable interest rates in recent years, per-square-foot production costs remain high, so that profit margins on more affordable housing are low. Self-certification Authorized by Government Code Section 65585.1, self-certification is a pilot program enabling San Diego County cities, instead of the state, to certify their housing elements. A Housing Element policy states Carlsbad, to the best of its ability, will pursue the self-certification for the upcoming 2004-2009 housing cycle. Self-certification will require the City to comply with various criteria, including performance objectives, in the current (1999-2004) housing cycle. CITY MANAGER HOUSING AFFORDABILITY REPORT FY 1999-2000 Page 11 As with the regional share estimates of need identified in Table I, self- certification performance objectives are expressed in numbers of dwelling units. However, how the numbers are determined and achieved under each are quite different. Regional share estimates, for example, are based simply on the number of homes needed to accommodate projected growth for all income levels. In contrast, self-certification numbers are based on a city’s available resources (e.g., housing funds and programs) to produce housing for lower-income families only. Further, to provide for the projected growth, regional share estimates of need count only new construction; conversely, in recognition of the substantial resources often necessary to produce lower- income housing, construction, acquisition, rehabilitation, and rental and ownership assistance are all ways to measure progress toward self- certification objectives. Additionally, because it resource-based and focused on providing homes for only lower-income families, the number of dwelling units required to meet the self-certification performance objectives are much lower than regional share estimates. As an example, 1,770 very low-income units (see Table 1) is Carlsbad’s share of the estimated regional need; under self-certification, the performance objective calls for 201 very low-income units to be provided. The construction of lower-income units and acquisition of the Tyler Court senior apartments enabled Carlsbad to advance in its self-certification efforts in FY 99-00. Because of the complex formulas and credit system used to measure performance, however, identifying in exact numbers the progress made by these and other projects toward the self-certification objectives is beyond the scope of this report. The Housing and Redevelopment Department is planning to prepare a report that fully explains the progress Carlsbad has made regarding self-certification. Conclusions As demonstrated in this report, Carlsbad has seen significant results from its commitment to the development of housing affordable to lower-income families. This commitment is evidenced in its policy framework, the allocation of its own resources, and its efforts to pursue creative partnerships with the private sector in all aspects of housing production. The City will continue to make significant progress in providing new, affordable housing during FY 00-01 as the following recently completed projects show: 0 Poinsettia Station - Conveniently located by the Poinsettia transit station on Avenida Encinas, this 92-unit apartment development, completed in the first half of FY 00-01, is available for occupancy by low-income families. CITY MANAGER HOUSING AFFORDABILITY REPORT FY 1999-2000 Page 12 l Laurel Tree - Also completed in the first part of FY 00-01, the Laurel Tree project consists of 138 apartments, including 46 four-bedroom units. Centrally located near the Palomar Airport Road and Aviara Parkway intersection, project occupancy is restricted to very-low income families. While the City has made positive strides in producing affordable housing, the need for housing affordable to very low-, low-, and moderate-income families continues to exceed the community’s collective ability to produce it. At the same time, total production of new homes affordable to higher-income groups last year hit the highest level in many years, as the current swing of the economic cycle provided the conditions necessary for both production and purchases of new housing. The fact that the market continues to strongly support the development of housing primarily affordable to upper-income households is a key reason as to why the City must continue its commitment to fully implement the lnclusionary Housing Ordinance. Testimony to this is the 182 lower-income units produced during FY 99-00, all but a few of which were completed because of the requirements set forth in the lnclusionary Housing Ordinance. This same fact is expected to hold true in FY 00-01 with the completion of 230 very-low and low-income units. Furthermore, recently adopted changes to the lnclusionary Housing Ordinance will improve the ability of developers and the city alike to provide affordable housing. As a result, Carlsbad will make significant progress toward both its regional share need estimates and self-certification performance objectives for the 1999-2004 housing cycle. a __... _ =-... A SCOTT DONNELL