HomeMy WebLinkAbout2016-07-26; City Council; 22361; Designation of Tavarua Senior Affordable Apartments as a combined inclusionary housing development and approval of housing credit price charged by cityCITY OF CARLSBAD-AGENDA BILL
AB# 22,361 DESIGNATION OF TAVARUA SENIOR, DEPT. DIRECTOR
MTG. 07/26/16 AFFORDABLE APARTMENTS AS A COMBINED CITY ATTORNEY /t5_
DEPT. CEO {OR AFFORDABLE HOUSING CREDIT) CITY MANAGER
INCLUSIONARY HOUSING DEVELOPMENT (Y?
AND APPROVAL OF THE HOUSING CREDIT
PRICE TO BE CHARGED BY THE CITY OF
CARLSBAD
RECOMMENDED ACTION:
That the City Council adopt a resolution approving the Tavarua Senior, Affordable Apartments as a
combined (or affordable housing credit) project under the city's lnclusionary Housing Ordinance and
setting the housing credit price, and authorizing the sale of housing credits within the project to private
housing developers eligible to satisfy the inclusionary housing requirement off-site but within the
Northwest Quadrant of the city, with said participation subject to approval at the sole discretion of the
City Council.
ITEM EXPLANATION:
In 2013, construction was completed on the Tavarua Senior, Affordable Apartment development and the
affordable homes were leased to low income households at restricted rents; the apartment complex is
located at 3568 Harding Street and in the city's Northwest Quadrant. The City of Carlsbad financially
participated to subsidize construction of the affordable development with the total financial assistance
provided by the city at $3,750,000 or $75,000 per unit from its affordable housing fund. At the time
financial assistance was approved for this project, the City Council indicated its future intent to establish
the development as a combined project (or affordable housing credit project) which may provide
developers in the Northwest Quadrant of the city with an off-site option for satisfaction of the
inclusionary housing obligation. This means that at the discretion of the City Council, a developer may be
allowed to have some or all of the required inclusionary units associated with one residential project site
to be produced and operated at an alternative site or sites, with the resulting linked inclusionary project
site to be known as a combined inclusionary housing project. Tavarua was to be designated as a combined
inclusionary housing project only after all housing credits were sold for the Roosevelt Gardens
development (also located in the Northwest Quadrant and at 2580 Roosevelt Street). Because the city
will soon complete the sale of all of the housing credits in the Roosevelt Gardens development, staff
recommends that the City Council proceed with designation of the Tavarua Senior Apartments as a
combined (housing credit) project and set the housing credit price for the development at this time.
DEPARTMENT CONTACT: Debbie Fountain 760-434-2935 debbie.fountain@carlsbadca.gov
FOR CITY CLERKS USE ONLY. ~ COUNCIL ACTION: APPROVED CONTINUED TO DATE SPECIFIC D
DENIED CONTINUED TO DATE UNKNOWN D
CONTINUED D RETURNED TO STAFF D
WITHDRAWN D OTHER-SEE MINUTES D
AMENDED D
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Pursuant to the Inclusionary Housing Ordinance (CMC 21.85.080), the City Council has sole discretion to
authorize a residential site to be designated as a combined inclusionary housing project. The Council also
has sole discretion as to which private residential developments within the associated quadrant
(northwest quadrant in this case) may satisfy their inclusionary housing obligations by financially
participating in an off-site combined affordable housing (credit) project. An action at this time to
designate the Tavarua Senior Apartments as a combined housing project does not concurrently approve
any specific projects for financial participation. Separate action is required to approve the specific projects
to purchase credits and financially participate in the noted combined project.
Housing Credit Price Calculation
On September 12, 1995, the City Council adopted Council Policy No. 58. This policy sets forth a framework
for setting the credit price for city-sponsored combined housing (credit) projects and the policy for selling
those credits. The policy is broad-based and intended to apply to all future combined projects where the
city intends to sell housing credits. The Villa Loma project, which was the first combined inclusionary
housing project approved within the City of Carlsbad, is used as the example for how to calculate the
housing credit price under the policy. The policy indicates that the price should be set by dividing the local
financial contribution by the total credits available; the Tavarua development has 50 units or housing
credits total.
Through application of City Policy No. 58, staff is recommending that the credit price for Tavarua Senior
Apartments be initially set at $84,000 and that it be increased annually by the Consumer Price Index
thereafter. In 2012, the financial assistance from the city was disbursed to the Tavarua Senior Apartments
in the amount of $75,000 per unit The interest rate on the related construction loan is 3 percent per year.
Since the city's financial assistance was initially disbursed in 2012, staff is recommending that the initial
city subsidy be increased by 12 percent (to account for the 3 percent annual interest rate on the loan over
four years) and to set the initial housing credit price at $84,000.
FISCAL IMPACT:
No funding is requested at this time. Other than staff time to process the changes to the developer fee
schedule, there are no other anticipated costs for the proposed actions. If approved, the housing credit
price for the combined project known as Tavarua Senior Affordable Apartments will be $84,000 per
housing credit for Fiscal Year 2016-17 for developments in the Northwest Quadrant. It will increase by
the Consumer Price Index (CPI) every year thereafter until such time as all of the credits (50 total) are sold
to private developers. The minimum amount of revenue anticipated is $4,200,000. The funds will be
deposited within the city's housing trust fund and made available at a future date to fund additional
affordable housing units within the City of Carlsbad, as approved by the City Council.
ENVIRONMENTAL IMPACT:
City Council's action to designate an existing affordable housing development as a combined project for
inclusionary housing purposes, to set the housing credit price, and to allow the purchase of credits is
exempt from the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Section
15061(b)(3) "General Rule," as it can be seen with certainty that there is no possibility that the activity in
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question may have a significant effect on the environment and that said actions would not authorize,
permit or guarantee the construction of a project that would have a significant environmental effect nor
commit the city to approve any such project.
EXHIBITS:
1. City Council resolution approving the Tavarua Senior Affordable Apartment development as a
combined project under the City's Inclusionary Housing Ordinance and setting the housing credit
price, and authorizing the sale of housing credits within the project to private residential developers
within the Northwest Quadrant of the city to satisfy inclusionary housing requirements, with said
participation subject to separate approval by the City Council and at its sole discretion,
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RESOLUTION NO. 2016-162
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, TO
APPROVE THE DESIGNATION OF THE TAVARUA SENIOR AFFORDABLE APARTMENTS AS
A COMBINED PROJECT UNDER THE CITY OF CARLSBAD'S INCLUSIONARY HOUSING
ORDINANCE AND SET THE HOUSING CREDIT PRICE FOR THE SALE OF HOUSING CREDITS
WITHIN THE PROJECT TO OTHER HOUSING DEVELOPERS WITHIN THE NORTHWEST
5 QUADRANTS OF THE CITY, SUBJECT TO APPROVAL BY THE CITY COUNCIL AT ITS SOLE
DISCRETION 6
7 WHEREAS, in 1993, the City of Carlsbad adopted an lnclusionary Housing
8 Ordinance, Chapter 21.85 ofthe Carlsbad Municipal Code, which requires all housing developers
9 to provide at least 15 percent of the housing units they construct to be affordable to lower
10 income households; and,
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WHEREAS, pursuant to Chapter 21.85.080 of the Carlsbad Municipal Code, the
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City Council has sole discretion to authorize a residential site to be designated as a combined
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14 inclusionary housing project; and,
15 WHEREAS, the City Council also has sole discretion as to which housing
16 developments may satisfy their inclusionary housing obligations by financially participating in an
17 off-site combined project; and
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WHEREAS, the City of Carlsbad has previously financially partnered with Meta
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Housing Group to construct a total of fifty (50) apartment units affordable to low and very low
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21 income senior households on property located at 3568 Harding Street in the Northwest
22 Quadrant of the City of Carlsbad; and
23 WHEREAS, said fifty (50) units are excess units in that they are not being provided
24 to meet the inclusionary requirement of a specific master housing development or other
25 subdivision but may be used to do so if approved by the City Council; and
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WHEREAS, the City Council has previously expressed a desire to sell the excess
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28 housing credits produced by said project, Tavarua Senior Affordable Apartments, at 3568
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Harding Street to housing developers with a small inclusionary housing requirement (defined as
a requirement of less than 10 units) for developments located within the Northwest Quadrant of
the city; and
WHEREAS, the City Council has an interest in providing a second combined
project within the Northwest Quadrant of the city to assist small housing developers in their
effort to satisfy their inclusionary housing requirements due to the fact that the first combined
project in the Northwest Quadrant, Roosevelt Gardens, has sold or reserved all of the 11
affordable housing credits it had available for purchase, and the development is, in fact,
oversubscribed on credit sales.
NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of
Carlsbad, California, as follows:
1. The above recitations are true and correct.
2. The City Council hereby designates the fifty (50) unit Tavarua Senior Affordable
Rental development which has been previously constructed in partnership with,
and financially assisted by, the City of Carlsbad on property located at 3568
Harding Street as a combined housing project pursuant to Carlsbad Municipal
Code 21.85.080.
3. The City Council hereby authorizes the sale of fifty (50) affordable housing credits
within the subject project to one or more small housing developers (defined as a
developer with an inclusionary requirement of less than ten units) within the
Northwest Quadrant to assist them in their effort to satisfy their inclusionary
housing obligations, subject to approval by the City Council at its sole discretion.
4. The City Council reserves its sole discretion to decide which private housing
developments within the Northwest Quadrant will be permitted to satisfy their
inclusionary housing obligations by financially participating in an off-site
combined housing project through purchase of credits from the City of Carlsbad.
5. The City Council hereby sets the housing credit purchase price for said combined
project at $84,000 per credit. This housing credit purchase price has been
calculated based on the subsidy provided per unit by the City of Carlsbad in 2012
($75,000/unit) for construction of said units, plus interest accrued over the past
four (4) years calculated at three (3) percent per year. This fee shall be increased
in future years and on an annual basis according to the Consumer Price Index
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(CPI) until such time as all of the credits (50 total) have been purchased by
approved developers or builders.
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6. The Housing Credit Purchase Price is not a development impact fee. Therefore, it
is not subject to the requirements of California Government Code Sections 66001
and/or 66006.
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Item #9 - AB #22,361 July 26, 2016 Page 6 of 7
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
2 Carlsbad on the 26th day of J!!.!y, 2016, by the following vote to wit:
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AYES: Hall, Wood, Schumacher, Blackburn, Packard.
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NOES: None.
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7 ABSENT: None.
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11 MATT HAL~, Mayor
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