HomeMy WebLinkAbout1993-04-20; Housing & Redevelopment Commission; 228; Village Redevelopment Area Housing StrategyHOUSING AND f-DEVELOPMENT COMMISSI -I - AGENDA BILL\
AB# Jag TITLE:
MT& 9 -20 -93 CARLSBAD VILLAGE REDEVELOPMENT PROJECT
AREA HOUSING STRATEGY AND PROPOSED USE
DEPT. ~- OF LOW AND MODERATE INCOME HOUSING FUNDS
I RECOMMENDED ACTION:
Adopt Resolution No.azq APPROVING the Carlsbad Village Redevelopment Project Area's Housing Strategy and Proposed Use of Low and Moderate Income Housing Funds for fiscal years 1992-97 and AUTHORISING the Housing and Redevelopment Department to administer/implement the plan.
I ITEM DISCUSSION:
Attached as Exhibit 2 is the "Village Redevelopment Project Area Housing Strategy and Proposed Use of Low and Moderate Income Housing Funds I1 for fiscal years 1992 to 1997.
The Housing Strategy provides the framework for developing programs to increase, preserve or improve the supply of affordable housing through expenditure of the 20% Tax Increment Low and Moderate Income Housing (Set-Aside Funds). The strategy includes a plan for spending the approximately $1.9 million appropriated to the fund as of June 30, 1992 as well as set-aside to be generated over the five year period of the plan.
In the strategy, top priority is given to assisting low and very low income groups. Where appropriate and consistent with state regulations, the Low and Moderate Income Housing Set-Aside funds will be used to create additional housing units for low and very low income households through 1) new housing production; 2) acquisition of existing rental units and rehabilitation; 3) in- kind public improvements; and/or, 4) rental or homebuyer assistance programs.
The goals of the strategy are to 1) increase the supply of affordable rental housing; 2) increase opportunities for homeownership for first time homebuyers; 3) preserve existing housing; and 4) leverage the set-aside funds as effectively as possible.
The total amount available in the Low and Moderate Income Housing fund as of June 30, 1992 was $1,898,000. The attached strategy reflects how the Redevelopment Agency intends to use these funds. Exhibit A of the Housing Strategy outlines a five year expenditure plan for existing plus projected Low and Moderate Income Housing Funds. Exhibit B of the plan provides a summary of deposits to and expenditures from the Low and Moderate Income Housing Fund. It also accounts for the "Excess Surplus** within the fund, as defined by State Law. Exhibit C sets forth a schedule of expenditures for the l@Excess Surplus" funds. "Excess Surplusl# must be spent or contractually obligated within five
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years of its becoming @'surplus.'@
Per State Law, Health and Safety Code Section 33334.2(g), the Redevelopment Agency may use its Low and Moderate Income Housing funds inside or outside the redevelopment project area. The Carlsbad Village Redevelopment Agency may use these funds outside the project area upon a resolution of the Housing and Redevelopment Commission that such use will be of benefit to the Village. The determination by the Commission is final and conclusive as to the issue of benefit to the project area.
It is staff's recommendation that use of Low and Moderate Income Housing Funds for affordable housing projects outside the redevelopment area be considered on a project-by-project basis. If appropriate findings can be made that a proposed housing project provides benefit to the redevelopment project area, a separate resolution will be prepared for Housing and Redevelopment Commission approval authorising the expenditure of the housing funds.
FISCAL IMPACT:
The attached Housing Strategy develops the "spending plan" for the Low and Moderate Income Affordable Housing Fund through the end of fiscal year 1997. Funds will be used to the maximum extent possible to defray the costs of production, improvement and preservation of low and moderate income housing in Carlsbad.
A portion of these funds will also be used for planning and general administrative activities. During the period of the plan, the Agency intends to use a total of $525,000, or approximately 14%, of the total amount of funds ($3,728,000) anticipated to be available for planning and administrative activities.
EXHIBITS:
l- Resolution No .aay approving the Village Redevelopment Project Area Housing Strategy and Proposed Use of Low and Moderate Income Housing funds.
2- Village Redevelopment Project Area Housing Strategy and Proposed Use of Low and Moderate Income Housing Funds with appropriate exhibits.
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RESOLUTION NO. 2 2 4
A RESOLUTION OF THE HOUSING AND RRDRVRLOPMENT
corimh~ssoN 0~ xx~~ CITY OF CARLsBAD, ~LIF~RNUI APPROVING
THE CARLSBAD REDEVELOPMENT AGENCY’S HOUSING SIRATEGY
AND PROPOSED USE OF THE RFiDEVELOPMEBT. 20% SET-ASIDE
HOUSING FUND AND AUTHORIZJNG THE HOUSING AND
REDEVELOPMENT DEPARTMENT OF THE ClTY OF CARLSBAD TO
ADMINISTERTHEPLANANDIMPLEMENT THE PROJECTS AND
PROGRAMS CONTAINED IN THE PLAN
WHEREAS, the Carlsbad Housing and Redevelopment Commission has
adopted a redevelopment plan for the Carlsbad Village Redevelopment Project
Area which results in the allocation of taxes from the Project Area to the
Carlsbad Redevelopment’ Agency for purposes of redevelopment; and
WHEREAS, Section 33334.2 of the California Community Redevelopment
Law (Health and Safety Code Section 33000 et sea> requires that not less than
20 percent of all taxes so allocated be used by the Agency for the purpose of
improving and increasing the community’s supply of low-and moderate-income
housing available at affordable housing cost; and
WHEREAS, the Carlsbad Housing and Redevelopment Commission has
appropriated twenty percent of its annual tax increment since 1982 for low and
moderate income housing; and
WHEREAS, A Housing Strategy and specific Funding Plan has been
developed for use of twenty percent of the tax increment set-aside for low-and
moderate-income housing; and
WHEREAS, The Housing and Redevelopment Department of the City of
Carlsbad has been responsible and is qualified to administer and implement the
Cityls, low-and moderate-income housing projects.
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NOW, THEREFORE, BE IT RESOLVED by the Carlsbad Housing and
Redevelopment Commission as follows:
1. The Agency hereby approves the Housing Strategy and the specific
Funding Plan for use of twenty percent of the tax increment set-aside for low-
and moderate-income housing.
2. The Agency hereby authorizes the Housing and Redevelopment
Department of the City of Carlsbad to administer the plan and implement the
projects and programs contained in the plan.
PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad
Housing and Redevelopment Commission held on the day of APRIL ,
1993 by the following vote, to wit:
AYES: Commissioners Lewis, Stanton, Kulchin
NOES: None
ABSENT: Commissioners Nygaard, Finnila
A-I-IESR
* EXHIBIT 2
CITY OF CARLSBAD VILLAGE REDEVELOPMENT PROJECT AREA HOUSING STRATEGY
PROPOSED USE OF LOW AND MODERATE INCOME HOUSING FUNDS (1992-1997)
The following report represents a five year (1992-97) housing strategy for the City of Carlsbad Village Redevelopment Project Area. It provides the framework for developing programs to increase or improve the supply of affordable housing through expenditure of the 20% Tax Increment Low and Moderate Income Housing Set-Aside Funds. The strategy includes a plan for spending the estimated $1.9 million currently appropriated to the fund as well as future set-aside funds to be generated over the period of the plan.
The Regional Housing Needs Statement for San Diego reflects a greatly increased need for housing opportunities in the low and very low income ranges. The statement also indicates that Carlsbad's share of low income housing should be 40% of its new development within the next five years. Due to the future growth of industrial, retail, office and service jobs in Carlsbad, the demand for housing in these traditionally lower-wage earner occupations will increase. The regional housing needs statement indicates that the City of Carlsbad will need to provide 2,509 housing units over the next four years for lower income (including 1,433 for very low income) households.
Low and Very Low Income Prioritv:
It is the general policy of the City of Carlsbad Village Redevelopment Agency to,primarily assist low and very low income groups through use of the Low and Moderate Income Housing Set- Aside funds and other available Federal, State and local resources.
In accordance with State Law, a very low income household is one whose gross household income does not exceed 50 percent of the median income for San Diego County, which as of the date of this plan was $41,300 for a family of four. A low income household is one whose gross household income is at least 50 percent but less than 80 percent of the median income for San Diego County.
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Maximum Level and Term of Affordabilitvt
It is the policy of the Agency to provide assistance to housing projects in a manner that maximizes the level and term of affordability. The Agency will seek a minimum affordability term of thirty (30) years.
Fund EXD8nditUr8 Obi8CtiV848)t
The Low and Moderate Income Housing funds will be used to the maximum extent possible to defray the costs of production, improvement and preservation of housing affordable to lower income (80% of median or below) households.
It is the intent of the Agency to spend the Low and Moderate Income Housing Set-Aside funds both within the redevelopment project area and outside the area When the Housing and Redevelopment Commission finds that the proposed use of the funds will be of benefit to the redevelopment project area, as set forth in Health and Safety Code Section 33334.2(g).
Plannina and Administrative Activities Emenditures:
The Housing and Redevelopment Agency has determined that a portion of the Low and Moderate Income Housing Set-Aside funds will be used for planning and administrative expenses which are necessary for the production, improvement, or preservation of housing affordable to lower income households. In order to develop affordable housing in Carlsbad, it is necessary for staff to meet regularly with local developers, non-profit organizations and other persons who are willing and able to assist the City in meeting its housing needs.
A portion of Housing and Redevelopment Staff salaries will be paid from the Low and Moderate Income Housing funds; these expenditures are both necessary and appropriate to the development of housing affordable to lower income households in Carlsbad. Only a small portion of the administrative costs of providing affordable housing in Carlsbad will be financed through the Low and Moderate Income Housing fund. The costs of planning and administrative activities related to the development of affordable housing will also be financed through other fund sources.
Per Health and Safety Code Section 33334.3(d), the Carlsbad Redevelopment Agency shall determine annually that the planning and administrative expenses are necessary for the production, improvement or preservation of low and moderate income housing. This determination shall be made through the normal budget process.
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B. INCLUSIONARY HOUSING REOUIREMENTS
Agency D8VelOpm8nt within Village R8d8V8lOpment Area:
The Carlsbad Redevelopment Agency does not intend to assume the role of developer. However, if the Agency does, in fact, construct new housing units, or rehabilitate existing units, within the Village Redevelopment Area, u of the units will b8 affordable to households within the low and moderate income range. Of the total units constructed or rehabilitated by the
Agency f at least 80% shall be affordable to lower income households and no less than 40% of those lower income units shall
be affordable to very low income (less than 50% of county median) households. As an example, based on the minimum requirements, if the Agency builds a total of 100 units in the Redevelopment Area by 1997, 48 units will be affordable to low income (50% to 80% of county median); 32 units will be affordable to very low income (less than 50% of median) households; and 20 units will be affordable to moderate income households.
Private D8V8~Opm8llt within Village Redevelopment Area:
Private entities and/or non-profit organizations will be assuming the primary role of housing developer both inside and outside the Redevelopment Project Area. Per State Law, the inclusionary housing requirement for development within the Redevelopment Project Area by a private .(non-agency) entity is as follows:
At leas {a must be affordable to low or moderate income Dersons, of which not less than 40% (or 6% of the total units) must b8 affordable to verv low income households.
If private entities construct a total of 100 (non-restricted) units within the Redevelopment Project Area, a total of 15 units must be constructed with affordability restrictions - 9 of the units must be affordable to low or moderate income households and 6 must be affordable to very low income households.
Compliance with requirements:
In order for the residential units to be counted for purposes of compliance with the inclusionary housing requirements outlined above, the units must meet the criteria outlined below. The units must be:
0 newly constructed or rehabilitated;
0 located in the redevelopment project area;
0 remain available at affordable housing.cost to persons and families of low or moderate income or very low income for
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the longest feasible time, but not less than the period of land use controls in the redevelopment plan; and,
0 the restrictions must be recorded against the property as covenants running with the land.
Financial ASSiStanC8:
When necessary and appropriate, the Carlsbad Redevelopment Agency may provide financial assistance (i.e., Low and Moderate Income Housing Funds) to private entities, or non-profit organizations, for the purposes of meeting these inclusionary housing require- ments.
Applicability of City Approved Inclusionary Housing Requirements:
If the City of Carlsbad approves an Inclusionary Housing Ordinance/Policy, the requirements will apply to the Village Redevelopment Area, unless noted otherwise. However, developers building housing projects within the Village Redevelopment Area shall also be required to satisfy the minimum Inclusionary Housing requirements set forth above and as outlined within State Law. The minimum inclusionary housing requirements for the redevelopment project area may or may not be consistent with a city-approved requirement.
c. PROGRAM PRIORITIES
As stated previously, it is estimated that the City will need ap,proximately 2500 units of new housing for low and very low income households over the next four years. Consequently, the Redevelopment Agency's first priority for financial assistance will be construction or creation of new affordable housing units. The City is committed to providing a total of at least 1400 units of new housing affordable to low and very low income households throughout Carlsbad by 1997.
Where appropriate and consistent with State regulations, the Low and Moderate Income Housing Set-Aside funds will be used in conjunction with the City of Carlsbad's Inclusionary Housing Ordinance to create additional housing units for low and very low income households through 1) new housing production, 2) acquisition and rehabilitation of housing units, 3) in-kind public improvements which are directly and specifically needed to improve or increase the supply of lower income housing, and/or 4) rental or homebuyer assistance programs.
SDendincr Stratecfv Prourams:
Outlined below are the programs to be financed by the City of Carlsbad Redevelopment Agency in an effort to provide low and
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very low income households with affordable housing:
1. Develop new construction and provide related infrastructure.
"New construction*8 refers to the acquisition of land and the development of housing units, either single family or multi- family. It is anticipated that the private development community will be primarily responsible for the construction of new housing units.
"Related infrastructure" means street, underground water and sewer systems, drainage systems, electrical supply lines, etc. directly and specifically needed to support a lower income housing development.
2. Acquisition of housing units and rehabilitation.
@@Acquisition of housing units" refers to Agency/City participation in the purchase of existing housing units, such as apartments, condominiums or townhomes, or other buildings suitable for housing. The units purchased would provide affordable housing for low and very low income households. 11Rehabilitation18 means activities required to upgrade substandard units to a decent, safe and sanitary condition in compliance with the Housing Quality Standards, or other standards acceptable to the U.S. Department of Housing and Urban Development.
3. PrOVid8 Rental Assistance.
"Rental assistance11 may mean providing a tenant with financial assistance (tenant-based) x restricting the rent of a given rental unit to no more than 30 percent of gross income (project-based).
4. Provide Home Buyer Assistance.
A "home buyer assistance" program will include newly developed or existing financial assistance in the form of tax credits, interest subsidies, second mortgage loans or funds for down payments on a home purchase.
D. NEED PRIORITIES
The various programs, outlined in Section B, have been assigned priority numbers which reflect the Carlsbad Redevelopment Agency's general assessment of its overall housing priorities for the next five years and the focus of its investment strategy. The following priority assessment will serve as a auide; the priorities may be amended as needed.
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PRIORITY 1: LOW INCOME NON-ELDERLY, LARGE FAMILY RENTER HOUSEEOLDS
There are approximately 240 very low and 143 low income non- elderly large (5 or more persons) renter households in the City of Carlsbad; this represents an estimated 8 percent of the low income renter households. Presently, there is a shortage of large (3 or more bedrooms) rental units in Carlsbad. Consequently, a significant number of these large family households are living in overcrowded conditions. There is a need for new construction of larger affordable rental units.
The following specific program priorities have been set for this group of households:
Level 1 priority: New construction & related infrastructure
Level 2 priority: Acquisition and Rehabilitation
Level 3 priority: First-time Homebuyer Assistance
New construction of larger, more affordable rental units appears to be the best method for serving the needs of this low income household group because the market does not currently supply an adequate number of properly sized units for large families in Carlsbad. Large families currently approved for rental assistance payments through the City of Carlsbad's Section 8 program have a difficult time locating an appropriately sized rental unit. They often must select housing in another city to remain eligible for the rental assistance.
The second most effective method for providing assistance to this group of households is acquisition and rehabilitation of existing large rental units. Some form of affordable rental rate guarantees will assist the City in maintaining the long term affordability (thirty years or more) of these rehabilitated units. The City also intends to develop a first time homebuyer program to assist low income households in "moving out" of the rental market and into a more permanent affordable "home" environment.
PRIORITY 2: LOW INCOME NON-ELDERLY, SMALL FAMILY RENTER HOUSEHOLDS
According to available estimates, there are 2,212 very low and 1,297 low income, small family (2-4 persons), renter households in Carlsbad; this represents 72 percent of the total number of low income renter households. It is estimated that 1,427 low income renter households pay more than 50 percent of their income on housing in Carlsbad. Also, it is estimated that 8.9 percent of
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low income renter households in Carlsbad live in overcrowded conditions.
The following specific program priorities have been set for this group of low income non-elderly, small family renter households:
Level 1 priority: New construction &i related infrastructure
Level 2 priority: Acquisition and Rehabilitation
Level 3 priority: Rental assistance
The top priority for this lower income group is construction of new housing units. The Redevelopment Agency will work with private developers and non-profit organizations to develop new housing units for this group.
It should be noted that rental assistance, although ranked as a level 3 priority, will likely continue to be a substantial and growing program because of available funding and the City's capacity to deliver this type of assistance immediately.
PRIORITY 3: LOW INCOME ELDERLY RENTER EOIJSEROLDS
A low income elderly household is defined as: a one or two person household containing at least one person of 55 years of age and/or a non-elderly handicapped individual, including those currently institutionalized but who are capable of "group home" living, with a gross household income which is less than 80 percent of the county median for San Diego ($41,300).
The following program priorities have been set for this group of low income elderly renter households:
Level 1 priority: Acquisition and Rehabilitation
Level 2 priority: Rental assistance
Level 3 priority: New construction & related infrastructure
There are approximately 652 very low income and 314 low income elderly renter households in Carlsbad. It is estimated that 43 percent (415) of these very low and low income elderly renter households are paying more than 50 percent of their income for housing. The characteristics of persons over the age of 55 years of age indicate that they have a need for smaller, low cost housing units which provide easy access to public transportation and health care facilities. These factors will guide the development of new housing in Carlsbad for low income households.
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NOTE: In order to restrict a housing project to "elderly only" residents, the project must be designed in a manner which prOVid88 special amenities to address th8 social and physical needs of the elderly population. If no Special amenities are offered t0 addr8SS th8 Social and physical n88dS of the elderly residents, State Law does not allow the units to be restricted.
PRIORITY 4: EXISTING L.OW INCOME HOMEOWNERS ANB FIRST TIME LOW INCOME HOMEBUYERS
For low income households who currently own their home, it is assumed, for purposes of this strategy, that their needs center around maintaining their home (in both structural and financial terms). Therefore, it appears that the primary focus for assistance to this group should be rehabilitation of housing units. The objective of the Redevelopment Agency will be to assist lower income homeowners to maintain their existing homes. However, if an existing unit cannot be rehabilitated or the cost of the home is simply too expensive for the household, the Redevelopment Agency will consider the provision of relocation assistance to help the household locate to a more affordable housing unit.
For lower income households who would like to own their home, the primary need is assumed to be financing. It is often difficult for lower income households with no previous homeownership history to obtain financing to purchase a home. The Redevelopment Agency's primary form of assistance for this group of households will be a "first-time homebuyer assistance program." The City will work with local financial institutions to promote existing financing programs and develop new programs for first-time low income homebuyers. Since there is also a shortage 'of housing units available which are affordable to low income homebuyers, the Redevelopment Agency together with the City of Carlsbad will also give high priority to the new construction of these housing units.
E. IMPLEMENTATION STRATEGY
The Redevelopment Agency and/or the City of Carlsbad will not be able to meet/address all of the needs of the groups/households identified within this strategy without the use of other sources of state, federal or local funding and/or the assistance of the private and public housing development community. The Agency intends to use its Low and Moderate Income Housing Funds as leverage to obtain other sources of public and private investment for the development of affordable housing both inside and outside the. Village Redevelopment Project Area.
The Housing and Redevelopment Department, of the City of
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Carlsbad, will be responsible for implementation of this housing strategy. The programs and activities highlighted below will be used by the City to address the specific affordable housing needs of low and very low income households in Carlsbad:
PROGRAMS #l AND #2:
GOAL:
To increase the supply of standard, affordable housing through the construction of new units and acquisition and/or rehabilitation of existing housing units.
Program #l D8SCriptiOn:
New housina develonment will be primarily achieved through private/public sector partnership efforts including working with non-profit organizations. The Redevelopment Agency can assist in the effort by 1) acquiring property for the purpose of developing homeownership and rental opportunities; 2) encouraging increased integration of housing with non-residential development; 3) coordinating the City's use of density bonuses and waivers of development standards and fees; 4) providing direct financial assistance for private (or non-profit) development of housing; and 5) attracting capital from housing assistance programs outside the City.
Implementation:
To implement this strategy, Housing and Redevelopment Staff will be working primarily with private housing developers who must meet the Agency's/City's Inclusionary Housing Requirement. As developers propose projects, staff will complete an ana,lysis of the project and determine whether or not assistance is needed from the Redevelopment Agency to ensure construction of the units.
Also, during 1993-94, staff intends to identify sites where affordable housing would be desirable both inside and outside the Village Redevelopment Project Area. If feasible, a site will be purchased and, then, a "Request for Proposal" will be issued for development of the site by a private developer and/or non-profit organization.
Program # 2 Description:
The Redevelopment Agency/City of Carlsbad may ac m c in the ac isit'o gfrom their rehabilitation, utilizing set-aside and other various local, state and federal funding sources. Of the rental units
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acquired for rehabilitation, a minimum of 20% will be set-aside for households in the very low income range. The remaining 80% will be set-aside for households in the lower income range (80% or less of the county median). If the Redevelopment Agency provides financial assistance for the acquisition and rehabilitation of existing units, the term of affordability shall be for the longest feasible time (minimum of thirty years).
Implementation:
To implement this strategy, staff will work primarily with private developers and/or non-profit organizations who are interested in purchasing existing market rate units for the purpose of converting them to units affordable to lower income households. Staff will consider public subsidies for a project if it is deemed to be feasible and desirable City. to the Agency-and/or
PROGRAM #3:
Goal:
To provide rental assistance to alleviate including severe cost burden, experienced and individuals.
the rental cost burden, by low income families
Program Description:
The Redevelopment Agency will use its Low and Moderate Income Housing Funds to leverage other funding sources, such as federal HOME Investment Partnerships Program funds, to exnand the Citv's existino rental assistance nrooram. The Agency/City will attempt to add at least one hundred (100) new participants to the rental assistance program by 1997. Until new units can be constructed which are affordable to lower income households, rental assistance meets an immediate need for a significant portion of very low income households.
Implementation:
To implement this strategy, staff will complete and submit an application to the State of California in 1993-94 for federal HOME funds to finance an expansion of the existing rental assistance program. Also, staff will apply for any additional funds which may become available through the federal Section 8 Rental Assistance Program.
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PROGRAM #4:
Goal:
To promote homeownership opportunities
Program Description:
The Redevelopment Agency will encourage the develonment of new affordable housins units for first time homebuvers. The program will focus on the housing needs of lower income households.
The Redevelopment Agency will also work with local lenders and the local development community to promote existing financing programs and to secure funding and develop additional lending programs through local, private, State and Federal Housing Programs for first-time homebuyers.
Implementation:
To implement this strategy, staff will complete and submit an application to participate in the federal Mortgage Credit Certificate Program to assist first time homebuyers in acquiring units.
Staff will also work with private developers who have inclusionary housing requirements to produce new opportunities for first time homebuyers.
In addition, staff will meet with the various local lending institutions to develop an understanding of the programs they have available for first-time homebuyers. A reference resource will be prepared to assist interested parties in identifying their financing opportunities.
F. SUMMARY OF PROGRAMS
The affordable housing programs, outlined above, presents a framework for the use of the Low and Moderate Income Housing Set- Aside funds. The program strategy was developed to meet the affordability needs of primarily lower income households in Carlsbad. The goals of the strategy are to: 1) increase affordable rental housing; 2) increase opportunities for homeownership for first time home buyers; 3) preserve existing affordable housing opportunities; and, 4) leverage the set-aside funds as effectively as possible to ensure new development of affordable housing for lower -income households. Specific program strategies were discussed which meet these goals and for which the set-aside funds can be used per current state regulations.
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G. COORDI:NATION OF RESOURCES
The Carlsbad Redevelopment Agency intends to use all available State, Federal and Local resources to fund the programs, services and special initiatives/strategies outlined above. Funding sources include, but are not limited to: 1) Redevelopment Agency Low and Moderate Income Housing Set-Aside funds; 2) federal Community Development Block Grant funds; 3) Inclusionary Housing Impact Fees and In-Lieu Fees, if established by the City; 4) Mortgage Revenue, Multi-family, Housing Revenue Bonds and Mortgage Credit Certificates; 5) federal H.0.P.E and HOME funds; and/or 6) other state and/or federal programs for financing housing projects. In the production of affordable housing, the Redevelopment Agency and the City of Carlsbad cannot rely on a single source of funding. To be successful in our efforts, affordable housing must be produced through the utilization of a number of different funding sources. The Agency will leverage its set-aside funds with other sources of funding for the production of affordable housing.
H. PLAN FOR USE OF CURRENT HOUSING FUNDS
Revenue and Expenditures Summary:
The Carlsbad Housing and Redevelopment Commission has appropriated 20% of its tax increment to a housing fund since 1982. The total amount of funds available as of June 30, 1992 was $1,897,906.
Attached as WA is a chart which outlines the five year (1992-97) expenditure plan for the Village Redevelopment Project Area's Low and Moderate Income Housing Fund. The "revenue" section includes the balance of available funds, $1,897,906, (as of June 30, 1992) within the Low and Moderate Income Housing account and funds projected to be received on an annual basis over the five year period.
The "expensesfi@ section of Exhibit A outlines the categories of expenditures and the amount of funds to be expended within each category on an annual basis. The funds to be expended on administrative costs over the five year period of this plan amounts to an estimated $525,000 which is approximately 14% of the total project funds ($3,728,000) anticipated to be expended by December, 1997. The expenditure of the noted funds is directly related to the creation of approximately 252 units of housing affordable to low income households. By using the Low and Moderate Income Housing Funds as leverage, it is anticipated that over 500 units of housing affordable to lower income households will be built by 1997.
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8gE~~ess Surplus@@ Summary:
In compliance with State Law, Exhibit B provides for a separate accounting of the "Excess Surplus" within the Low and Moderate Income Housing Fund. "Excess Surplus" is defined as any unexpended and unencumbered amount in an agency's Low and Moderate Income Housing Fund that exceeds the greater of $500,000 or the aggregate amount deposited into the Low and Moderate Income Housing Fund pursuant to Sections 33334.2 and 33334.6 of the Health and Safety Code during the agency's preceding five fiscal years. Per legislation enacted on January 1, 1989, the agency must spend any "excess surplus1V within five years of the date it becomes "excess surplusl*. Exhibit C provides a schedule and spending plan for the,identified "excess surplus.lg The spending plan for the llexcess surplus I1 has been incorporated into the complete Low and Moderate Income Housing Fund spending plan outlined in Exhibit A.
Fund Use Summary:
Funds deposited into the Low and Moderate Income Housing Fund may be spent on a variety of activities. In general, the funds must be used to improve or increase the supply of housing. at a cost affordable to persons of low and/or moderate income. Specifically the funds may be used to: 1) acquire land or building sites; 2) improve land or building sites with on-site or off-site infrastructure improvements which are directly and specifically related to the creation of low and moderate income housing; 3) "write down" land to private or public persons or entities; 4) rehabilitate housing; 5) design, construct or finance housing; 6) acquire existing housing; 7) provide subsidies to, or for the benefit of, persons and families or low or moderate income; and/or, 8) develop plans, pay principal and interest on bonds, loans, advances or other indebtedness, or pay financing or carrying charges.
As stated previously, the Low and Moderate Income Housing funds may be spent inside or outside the redevelopment project area. The Agency may use these funds outside the redevelopment project area only when the Housing and Redevelopment Commission (City Council) finds that the proposed use of the funds will be of benefit to the redevelopment project area, per Health and Safety Code Section 33334.2(g). Particularly because of the largely built-out nature of the redevelopment area, it is anticipated that Low and Moderate Income Housing funds will be proposed for use outside the area.
Prior to spending the Low and Moderate income housing funds on housing projects outside of the redevelopment project area, the Commission will make a determination that the proposed low and moderate income housing project at the proposed location will be beneficial to the redevelopment project area. If appropriate and
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applicable findings can be made which allow the Commission to rationally conclude that the proposed housing project will benefit the project area, a resolution authorizing the expenditure of Low and Moderate Income funds will be presented to the Housing and Redevelopment Commission for approval.
Benefit Summary:
It is the Agency's intent to require that at least 40% (100 to 200) of the new units produced with assistance from the Low and Moderate Income Housing Fund be affordable to very low income households.
I. ADMINISTRATION OF HOUSING FUND
The Housing and Redevelopment Commission of the City of Carlsbad is responsible for administering the federal housing programs and redevelopment agency projects. In order to efficiently administer and implement the projects approved in this housing strategy, the Housing and Redevelopment Department has been authorized to administer the tax increment housing fund and to implement the programs and projects described in this strategy.
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EXHIBIT C
EXCESS SURPLUS SPENDING PLAN
.
Revenues:
Excess Surplus
Previous Yr. Balance
Total Revenues
Expenses:
Housing Construction
Acquisition (MF)
Rehabilitation (SF)
Rental Assistance
Total Expenses
$0
$200,000
8150,O~~
$350,000
Ending Balance ($228,133)
Excess Surplus Expenditure Objectives:
$200,000 $130,000 $123,000 $453,000
$100,000 $100,000 $50,000 $450,000
$50,000 $50,000 $50,000 $150,000
$0 $0 $0 $150,000
$350,000 $280,000 $223,000 $1,203,000
($283,166) ($194,418) ($92,137) ($797,854)
(1) Assist a total of at least 160 lower income households.
(2) Provide rental assistance to at least 90 very low income households.
(3) Assist in the acquisition and preservation of at least
30 units of multi-family housing for lower income households.
(4) Assist in the construction of at least 30 new housing
(rental or for-sale) units for lower income households.
(5) Assist in the rehabilitation of at least 10 single
family homes to preserve affordability to lower income households.
Other notes:
(1) The Housing and Redevelopment Department will administer plan.
(2) The Low and Moderate Income Housing Funds, including the ‘Excess
Surplus”, will be used to assist lower income households (0% to 80%
of County Median) and for projects with at least a 30 year
affordability tenure.
09-Mar-93
* - LZG‘dhL AlID SoCIE’r-Y ,s SAN DIEGIO, INC.
Office of tile Pmbiic Attorney 0
236 s. 7L--.mOll~ \Strert
Ja,>uary 13, 1993
CLARE MAUDSLEY Prcs;d<nc. Bard of D;r.c(un
GRE6QRY E. KNOLL E -rcrrtivc Dircctor!Chicf Counsel
FAXED AND MAILED
Raymond R. Patchett, Executive Director
Carlsbad Redevelooment Agency
1200 Carlsbad Village Dr-ive
CaLlsbad, CA 92008-1989
Re: Use of Carlsbad Redevelopment Agency's Low and
Moderate Income Housing Fund
Dear ML. Patchett:
I have reviewed the City of Carlsbad's "Comprehensive Housing
Affordability Strategy (CHAS) Annual Pe&foLmance Report for Federal Fiscal Year 1992". In addition, I have reviewed the Agency's Annual Report of Financial Transactions and Schedule HCD for the fiscal year endinq June 30, 1992. These reports indicate that 31% of the tax increment deposited in the
Agency's Housinq Fund for fiscal yeaL 1991-92, $98,113, was spent during that fiscal yeaL for alleged "administrative costs" and "professional services”. Yet the Agency reports
that no very-low, low or moderate income households were
assisted by these expenditures.
While the Agency's financial records provide no clue as to how
this sum was allocated, the City's CHAS generally describes
its use. On page 6, section III, the City indicates that $90,382.00 of the Housing Fund was spent for some vety
nebulous consulting services related to the following:
- Potential acquisition of a low and moderate mobilehome
park (Southwest Quadrant)
- Affordable housing survey (Northwest Quadrant)
- Legal services related to affordable housing issues
(City-wide)
- Leqal services related to affordable housing projects
(City-wide)
Not only has the Agency claimed one-third of its Housing Fund
for fiscal year 1991-92 on an inherently suspect transfer of
funds to the City forr administrative purposes but the draft
"Housinq Strategy and Prroposed Use of Low and Moderate Income
Raymond R. Patchett Zanuary 13, 1993 - Page 2
Housing Fund (1992-1997)" pKoposes to do the same thing for
the next five fiscal years. It is therefore with great concetn that I wt ire to you now.
In these harsh economic times, it is understanaable that
municipalities forage beyond their geneKa1 funds for monies to underwrite city services. As the economic noose tightens around municipal government, an ever greater vaKiety of
activities are viewed as either directly or indiKectly
increasing the suoply of affoKdable housing. The Legal Aid Society and the City of Carlsbad have already locked horns ovet- this natural but individious tendency. We are committed to using the legal system to ensufe that the Housing Fund is used in compliance with Health & Safety Code Sections 33334.2 and 33334.3.
The Housing Fund must be used to the maximum extent possible
to defray the cost of production, improvement and preservation
of lower and modeKate income housing. SeCtiOn 33334,3(d), The amount of money spent foK planning and administtative activities associated with the development, improvement, ana preservation of that housiny must not be clispKopoKationate to the amount actually spent for production, improvement and preservation. Under: Section 33334.3(e), planning and administrative costs payable from the Housing Fund must be diKectly related to the pKogKams and activities authoKized under subdivision (e) of Section 33334.2 and must be directly
attributable to a specific project.
Planning and administKative costs associated with the preparation and revision of the housing element, inclusionaKy housing pKogKam OK other programs of general applicability are
not appropriately attributable to the Low and ModeKate Income
Housing Fund. The development of affordable housing programs
pursuant to the City's revisea Housing Element are the
Kesponsibility of the City pursuant to the Government Code, and not the Agency's under Community Redevelopment Law.
Since the expenaiture of neaKly one-third of the Housing Fund
set aside for fiscal year 1991-92 failed to yield even one
decent and affordable housing unit for an income eligible
family, it seems unlikely that the Agency can ]uStify its use
of the Housing Fund in this way. However, Legal Aid Society
is willing to evaluate all wKitings and specific infoKmation
Kegaading how the $98,113.00 was spent. This information should at least include a complete description of each pKoject and activity on which Housing Fund monies were spent, the total project cost, the type and amount of each project cost borne by the Housing Fund during fiscal year 1991-92,
verification of the income eligioility of the intended
beneficiaries of this Fund, and some explanation of why the expenditure failed to produce any assisted units.
KdyIIIUIIU n. ra LLILC cc
Januaty 13, 1993 _ ,f Pacle 3
In addition to the above information, I have repeatedly requested verification that the only other revenues from the Agency's Housing Fund spent to date, provided affordable
housing opportunities to income eligible households. I refer to the Agency's expenditure of $147,726.00 to assist 9 very low income coach ownefs within the Solomat Mobilehome Park to
participate in the pUKChaSe Of their pads when the park converted. Community Redevelopment Law requites minimum durations of affordability to be assured by CC&Rs. The units
in Solomar Mobilehome Park need to be maintained as affordable fOK the "longest feasible time", but no less than 10 yeaKs, as they are ownership units. Health & Safety Code Section
33334.3(f)(2). If the units in Solomar Mobilehome Park are
counted as inclusionary or replacement units then their
continued affordability must be assured for the longest
feasible time but no less than the land use controls
established in the Redevelopment Plan. Health & Safety Code Section 33413(c). The Redevelopment Agency's reports fail to
indicate whether the requisite occupancy and affordability
restrictions are recorded. Instead, the Agency has indicated
that Whatever restrictions ace in place, end upon death OK
transfer, Since continued affordability for the longest
feasible time needs to be assured in order for the Housing Funds to be legitimately used, please pKOVide me with conformed copies of the tecorded documents.
If I do not receive the Kequested writings and infoKmation
within fifteen (15) working days from the date of this letter,
I will ass ume that the Agency cannot substantiate the
questioned Housing Fund expenditures and will take such legal
steps as ace necessary to assure full LeimbuKSement of that
Fund. If you have any questions regarding what information I am seeking OK believe that a meeting would be helpful, please
do not hesitate to call. I look fOKWaKd t0 hearing fKOm you
soon. I remain,
Sincerely, LEGAL AID SOCIETY OF SAN DIEGO, INC.
CATHERINE A. RODMAN
Attorney at Law
CAR/air
cc: Evan Becker, Housing & Redevelopment DiKeCtOr
Martin Orenyak, Community Development Director
Ron Ball, City Attorney
Glenn F. Wasserman, Redevelopment Agency Counsel
LEGAL Aim SOCllETY OF SAN DIEGO, ilwc. Offim of the H’uLlit. Wflorncy 0 296 5, Trcrnona Sr, Oceanside, CA 92QW c t : : : [6%9) 7242740 *u
(419) 722-1935 I
August 4, 1992
‘I-HOMM J. WARWICK. JR P’rrr&nt. l%.r,l “f Dir,, tnrs GRl:(;oR >’ 13. MNOI,I~ I>;,, tor/Cld C-<I”,,EPl
FAXED AND MAILED
Debbie Fountain
Acting Housing & Redevelopment Director
City of Carlsbad Housing Authority
2965 Roosevelt Street, Suite 5 Carlsbad, CA 92008
Re: Carlsbad Village Redevelopment Pro]ect Area
Housing Strategy and Proposed Use of Low and Moderate Income i-lousing Funds
Dear Ms. Fountain:
I greatly appreciate0 the opportunity to review the above draft,
and to meet with you, your staff, and counsel on July 28, 1992.
As promised, I am following up with written comments.
As we discussed on July 28th, although %arlsbad need not adopt a plan to spend its "excess surplus", because it has elected to do
SO? the Agency is required to comply with Health & Safety Code S
33334.10. While the plan need not be site-specific, it must
specify the number and type of housing units to be assisted and
identify the entities which will administer the plan, alterna-
tive means of assuring affordability for the longest feasible
time, the income groups to De assisted, and a schedule, by fis-
cal year, for expenditure of the excess surplus. In addition to
this "excess surplus" plan, Carlsbaa should also develop a strategy to replace each very-low, low, and moderate income unit
lost within the statutory time frame, to comply with Health &
Safety Code 5 33413(a), and count all resldent units developed
tiithin the project atea since adoption of the plan as the first
step to comply with Health & Safety Code $5 33413(b),
redevelopment law's inclusionary requirement.
A. General Policy Strategy - Carlsbad recognizes the need to
use public inonies to assist lower income households only. Why not simply state in your General Policy Strategy that since the inclusionary housing program and the market itself can produce housing affordable to those in the upoer portion of low income as well as moderate income households, the Agency will focus its limited resoclrces exclusively on lower income households with an emphasis on very-low?
b/Srn rBun5Jl 3p cQh~lSrl023 I+? ‘ia0 173 M b&‘r/d6 ,
Debbie F'ountain-
August 4, 1992
Page 2
It 1s unclear whether the Agency will give priority to nousing developments inslae the project area or not. The State Legisla-
ture designated at least 20% of the Agency's annual tax incre-
ment to assure that monies are available to satisfy the Agency's
replacement obligations and that the pro]ect acea has a balance
of commercial and residential development. Clearly, upon a
proper finding, the law allows housin.3 set-aside funds to be
used outside the project area. However, the Agency's statement
with regard to whether its priority is to use the money inside or outside the project area, is unclear.
B. Priorities POf Assistance - Carlsbad has i1sted eight different activities which it claims are the lawful target of housing funds. Clearly the Housing Fund may be used to build,
acquire, and rehabilitate housing units for income-eligible
households. Carlsbad may wish to adopt a more clear and pro- gressive definition of substantial and moderate rehabilitation
and exclude the possibility of using Housing Funds for minor rehabilitation. While redevelopment law is certainly not clear on this point, the Health & Safety Code does provide ccitecia by
which the minimum health and safety requirelments of a housing unit may be judged. In order to be funded by the housing set-
aside, both substantial and moderate rehabilitation should involve correction of a substandard condition which effects the habitability of the unit. The $l,OOO.OO figure used to aefine moderate rehabilitation is a fairly modest one. That may be the cost of repainting a home inside and/or out. Unless the house
was previously painted with lead-based paint, thereby jeopard- izing the health of young children in the household, painting is
generally done for aesthetic reasons.
so, too, the Housing Fund may be used to provide subsidies to tenants or homebuyers to assure affordable housing opportuni-
ties. Banks doing business within the City of Carlsbad are
required to meet all of the lending needs within the community
by virtue of the Community Reinvestment Act. And while a rent
subsidy program may temporarily and artificially "create" affordable housing opportunities, it does not aCCOmpllSh the
fundamental purpose of the Housing Fund, to expand Carlsbad's
supply. Given the presence of the Section 8 Program within yourjurisdiction, the Society urges Carlsbad to use its limited
resources to actually build additional units.
C. Prioritization of Needs - Given Carlsbad's focus on lower
income households, only three groups listed are proper benefi-
ciaries of the Housing Fund: low income elderly renters; low income non-elderly small family renters; and low income non-
elderly large family renters. Since Carlsbad does not even know whether any existing homeowners have rehabilitation needs, it is inappropriate to list this as a priority. Nor can Housing Funds be used to rehabilitate I)neaf substandard" housing units or
r)eDbie Fountain - August 4, 1992 Page 3
Drovide "r*l~cdtion assistancen to help ‘louseholds locate "more" affordable housing. While first time homebuyer programs may serve low as well as moderate income households, given the amount of resources available to the Agency, and the inclus- ionary housing prograin which is designed to meet the needs of this population, this priority seems inappropriate as well.
Despite the fact that small families (two-four member house- holds) represent 72% of the total lower income renter households
in Carlsbad, and large families (five or more persons) consti-
tute 8% of lower income renter households, elderly renters
appear as the first priority in Carlsbad. Carlsbad, histori-
cally, has only provided incentives to develop senior housing. It seems appropriate that this plan establish priorities based on the existing needs within Carlsbad. Nor can the Housing Fund legitimately be used to provide board and care facilities for
the elderly. Group homes which provide onsite care and medical
assistance are more akin to the provision of social services,
with a housing component. Other provisions and resources are
available to address these needs.
D. Implementation Strategy - Clearly Carlsbad will not be able to meet all of the needs of the very-low and low income with only housing set-aside and CDBG monies. If leveraged effect-
ively, substantially more of Carlsbad's needs may be satisfied. Attempting to help as many lower income households as possible
translates to providing nominal assistance to households closer
to 80% of median, as opposed to greater subsidies to more needy families making substantially below 50% of median.
The Strategy Summaries listed under this heading are the subject
of some concern for the Society. First, under "Acquisition and
Rehabilitation", the Agency commits 20% of the set-aside for very-low income households and the remaining 80% to low and
moderate income households. These percentages should be reversed to reflect the actual needs in Carlsbad and households
in the moderate income range eliminated from consideration.
Under “New Housing Development", the Agency is basically pro-
posing to use the Housing Fund to implement programs which the
City Planning Department has adopted in furtherance of City-wide regional needs and fair share goals. While I am unsure what is meant by "encouraging", adaptive re-use of commercial and
industrial buildings, and mixed-use projects, these are within
the Planning Department's venue in furtherance of the Housing
Element programs and not an appropriate use of Housing Fund
monies.
The Section 8 Rental Assistance Program, funded by the 9.S.
Department of Housing & Urban Development, has nothing to do with the Agency's fulfillment of its obligations under State Redevelopment Law. It is confusing, if not misleading, to
Debbie Foclntain
August 4, 1992 Page 4
refecence It in this plan.
E. Plan for Use of Current ROUSinJ Punds - Just as It proposefi
to spend nearly $100,000.00 in fiscal year 1991-32 tot administ-
ration of the Low and Moaerate Income Housing F'und, Carlsbad
oroposes to continue to spend approximately one-thlr.3 of Its
Housing Fund for this purpose in this an3 the succeeding fouc
fiscal years. The Housing Fund was meant to be spent pcedomi- nantly on the development of housing and not on planning and administration. It may only be spent on the latter activities
in proportion to revenues used to actually pKOdUCe or rehabili-
tate housing units. Since Carlsbaa is setting aside the
absolute minimum amount of tax increment, under State Law,
perhaps the planning and administration costs associated with the actual production of housing can be borne by the Redeve-
lopment Agency's general revenues.
Instead of dividing the nominal amount of monies available amongst and between aquisition, site assemlbly, housing pro-
ciuction, and rehabilitation, as is done on Page 11 of the draft
report. Staff shoula propose one or two discreet uses of the
Fund to build very-low and low small and large family rental
hOUSing. For example, the Agency could choose between purchas- ing land upon which a mixed income, residential development could be built OK use its resources to build the affordable portion of such a development upon land which the City currently
owns. The Agency's Housing Fund should be levecaqed and
priority given to non-profit development and management.
I have enclosed an executive summary of "Making Housing Set- Aside Funds Work" published by The Development Fund and the California Redevelopment Association. Additional information is available from these and other entities and can oe Ordered on the enclosed form.
If you have any questions regarding the above, please call. I would appreciate knowing whether this matter is St111 set to be
considered by the Housing and Redevelopment Commlsslon on August
4, 1992, OK whether it will be heard at a later date. Again, thank you for your time and consideration. I remain,
Sincerely, LEGAL AID SOCIETY OF SAN DIEGO, INC.
CATHERINE A. RODMAN Attorney at Law CAR/b
Enc.
LEGAL AID SOCIETY OlF SAN . Oflk@ 0 f bhc lPu&l;r~ Attorney s 216 s. TTemorlb ss.
GTansirlr, Cl.4 92054
(6% 9) 7%d-2740
(W-J) 722-1955
a>:[ EGO, 1x C‘, 0
January 15, 1992
Bud Lewis, Mayor City of Carlsbad 1200 Carlsbad Village ;>rive
Carlsbad, CA'92008
Re: Else of Carlsbad Redevelopment Agency's Low and
Moderate Income Housing Funds (20% Set-Aside Funds)
Dear Mr. Lewis:
Item 11 on the June 4, 1991, City Council Agenda was the City's 1991-92 Operating Budget. The one-page Agenda Bill which pre-
faces the Budget, notes that the Redevelopment Operating Budget
which totals $760,000.00, was reduced by $34,000.00 from the
1990-91 calendar year. This reduction was accomplished by
"establishing expenditure categories in the Affordable Xousinq portion of the fund...(of) $95,000."
When I spoke with Ms. Graham regarding this Agenda item, she advised me that the anticipated Low and Moderate Income sousing
Fund set-aside for fiscal year 1991-92 was approximately
$400,000.00. While this puts the anticipated Operating Budget
of $95,000.00 barely within the 25% cap which the state advises,
the propriety of charging such exorbitant operating expenditures
against the Fund is tied not only to the total set-aside for that fiscal year, but more importantly to the number of housing units produced as a result of those operating expenditures.
Since the City's Fair Share goal for the next five years is 1,125 units, your objectives are to produce 225 units annually towards this goal. Of these, 125 will be met by the private sector's inclusionary housing requirements, with no assistance
from the Low and Moderate Income ;-lausing Fund. The balance of
the 100 units must be produced by non-profit housing developers
and the local govern;nent with local, state and federal, private and public, resources.
Because the fiscal year is half over, unless construction of a specific project(s) is underway, it is extremely doubtful
whether one unit, never mind 100, will be built by the City of Carlsbad before the end of this fiscal year. Health 6 Safety Code S 33334.3(d) require s the Low P and LModerate Income Housing
Fund to be used to the maximum extent possible to defray the
cost of production, improvement, and preservation of low 2nd
-
,
Bud Lewis, Mayor January 15, 1992 Paae 2
moderate income housing. The amount of money spent foe planning and general *administrative activities associated with the deve-
lopment, improvement, and preservation of that housing must ndt be disproportionate to the amount actually spent for production,
improvement, and preservation. Under Section 33334.3(e), plan- ning and general administrative costs payable from the Housing Fund must be directly related to the programs and activiti25 authorized under subdivision (e) of Section 33334.2, and must 5;: directly attributable to a specific project.
Planning and administrative costs associated with the pceFar.a-
tion and revision of the Housing Element, Inclusionary Housing Program, or other programs of general applicability, are not appropriately attributable to the Low and Moderate In corn13 Housing Fund.
Since the City of Carlsbad is setting aside the absolute minimum
required under State Redevelopment Law for low and moderattz income housing, administrative costs directly associated with ;i particular project may be charged against the cedevelopmznt cather than the Housing Set-Aside Fund. Alternatively, the C~t;v may contemplate increasing its commitment to affordable housing above the bare minimum.
If the City has a particular sr,Jject in the pipeline, I want ~J,~LI to be mindful of your obligation to notify me of such rictivitv
pursuant to the Settlement Agreement in Sahagun, et al. vs. City
of Carlsbad, et al., Case No. N43834, San Diego Superior Court.
My clients in that case ace entitled to the right of first cefu-
sal to occupy, at affordable rates, the first, appropriately-- sized housing units developed with the Housing Fund.
Sincerely,
LEGAL AID SOCIETY OF SAN DIEGO, INC.
CATHERINE A. RODMAN
Attorney at Law
CAR/b
cc: City Council Planning Commission Design Review Hoard City Manager City Attorney City Clerk
, LEGAL APD SQCHETY OF SAN DIIEGO, INC.
Office of the Public Attorney 0
216 s. TremonC St. 0 ceanside, CA 92054 .c:. $2
(619) 724-2740 c
I (619) 722-1935
June 12, 1991
Kathy L. Graham
Housing and Redevelopment Director
City of Carlsbad
2965 Roosevelt Street, Suite B Carlsbad, CA 92008-2389
Item ll[ on the June 4, 1991, City Council agenda was the City's 1991-92 operating budget. The one-page agenda bill
which prefaces the budget notes that the redevelopment operating budget which totals $760,000 was reduced by
$34,000 from the 1990-91 calendar year. This reduction was
accomplished by "establishing expenditure categories in the Affordable Housing portion of the fund....(of) $95,000."
When we spoke regarding this agenda item, you advised me that the anticipated Low and Moderate Income Housing Fund set-aside for fiscal year 1991-92 was approximately
$400,000. While this puts the anticipated operating budget
of $95,000 barely within the 25% cap which the State
advises, the propriety of charging such exorbitant operating
expenditures against the Fund is tied not only to the total set-aside for that fiscal year, but more importantly to the number of housing units produced as a result of those
operating expenditures. .
Since the City's Fair Share goal for the next five years is
1,125 units, your objectives are to produce 225 units annually towards this goal. Of these, 125 will be met by the private sector's inclusionary housing requirements, with
no assistance from the Low and Moderate Income Housing Fund.
The balance of 100 units must be produced by non-profit
housing developers and the local government with local,
state and federal, private and public, resources.
Because the fiscal year starts in a matter of a few weeks,
unless plans and permits for a specific project are in the process of being finalized, it is extremely doubtful whether 1 unit never mind 100, will be built by the City of Carlsbad
before the end of the upcoming fiscal year. Health & Safety Code 5 33334.3(d) requires the Low and Moderate Income -tva-w
Housing Fund to be used to the maximum extent possible to defray the cost of production, improvement and preservation of low and moderate income housing. The amount of money spent for planning and general administrative activities associa.ted with the development, improvement and preser- vation of that housing must not be disproportionate to the
amount actually spent for production, improvement or preservation. Under Section 33334.3(e), planning and
general administrative costs payable from the Housing Fund
must be directly related to the programs and activities authorized under subdivision (e) of Section 33334.2, and
must be directly attributable to a specific project.
Planning and administrative costs associated with the preparation and revision of the Housing Element, inclusionary housing program or other programs of general applicability are not appropriately attributable to the Low and Moderate Income Housing Fund.
Since the City of Carlsbad is setting aside the absolute
minimum required under state Redevelopment Law for low and
moderate income housing, administrative costs directly associated with a particular project may be charged against the redevelopment rather than the Housing set-aside Fund.
Alternatively, the City may contemplate increasing its commitment to affordable housing above the bear minimum.
If the City has a particular project in the pipeline, I wanted you to be mindful of your obligation to notify me of
such activity pursuant to the Settlement Agreement in Sahagun, et al. vs. City of Carlsbad, et al:, Case No. N43834 I San Diego Superior Court, a copy of which is enclosed. My clients in that case are entitled to the right of first refusal to occupy, at affordable rates, the first, appropriately sized housing unit s devel-oped with the Housing Fund.
If you have any questions regarding the above, please feel free to call. I remain,
Sincerely, LEGAL AID SOCIETY OF SAN DIEGO, INC.
CATHERINE A. RODMAN Attorney at Law CAR/air
cc: Vincent F. Biondo, Jr., City Attorney