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HomeMy WebLinkAbout2001-04-12; Housing Commission; MinutesMinutes of: Time of Meeting: Date of meeting: Place of Meeting: HOUSING COMMISSION 6:OO P.M. April 12,2001 CITY COUNCIL CHAMBERS CALL TO ORDER Commissioner Scarpelli called the Regular Meeting to order at 6:04 pm and welcomed everyone. PLEDGE OF ALLEGIANCE Commissioner Scarpelli asked for Commissioner Ritchie to lead in the pledge of allegiance. ROLL CALL Present: Commissioners: Renee Huston Charles Griffin Doris Ritchie Ed Scarpelli Absent: Chairperson: Roy Latas Staff Present: Management Analyst: Craig Ruiz Housing Program Manager: Roberta "Bobbi" Nunn Associate Planner: Scott Donnell APPROVAL OF MINUTES Commissioner Huston moved to approve the minutes and it was duly seconded. VOTE: 4-0-0 AYES: Commissioners: Renee Huston Charles Griffin Doris Ritchie Ed Scarpelli NOES: None ABSTAIN: None It was a unanimous passage of the minutes and Commissioner Latas was absent. NEW BUSINESS The Carlsbad Public Housing Agency Annual Plan for Fiscal Year 2001, staff is recommending approval on this Resolution and Bobbi Nunn is presenting. Ms. Nunn noted that in December the Public Housing Agency 5-year Plan and the Annual Plan for 2000-2001 was presented. She stated that she is now presenting the Carlsbad Public Housing Agency Annual Plan for Year 2001-2002. She further presented for background the following information pursuant to the Quality Housing and Work Responsibility Act of 1998, the Public Housing Agencies are now required to submit a 5-year and Annual Plans. The Annual Plans must be adopted by the Housing and Redevelopment Commission and a copy of the plans with the HUD required certifications must be submitted to the US. Department of Housing and Urban Development. The 5-year plan for the Fiscal Year 2000-2004 and the Annual Plan for Fiscal Year 2000-2001 was adopted by the Housing and Redevelopment Commission on January 9,2001. The Annual Plan for a program or Housing Agency that administers the Section 8 Tenant-Based Rental Assistance must address certain areas. The areas they have to address are the housing needs of families, financial resources that are available to assist with those needs, eligibility, selection and admission policies for the Rental Assistance Program, Rent Determination Policies, Operations and Management Policies, Grievance Procedures (if a client is being terminated from the Rental Assistance Program), Homeownership Programs, Community Service and Self-Sufficiency Programs (the City of Carlsbad does operate a Family Self- HOUSING COMMISSION MINUTES APRIL 12,2001 PAGE 2 of 11 Sufficiency Program), the Civil Rights Certifications and the Single-Audit for each Fiscal Year. There are supporting documents that go with the plan and are referenced and are on file at the Library Reference Desk and the City Clerk's Office as well as Faraday Center, the Senior Center and the Housing and Redevelopment Office. The following documents that are referenced are: the Regional Analysis of Impediments to Fair Housing Choice in the San Diego Area, the City of Carlsbad Consolidated Plan, the Administrative Plan for Section 8 Tenant-Based Rental Assistance, the City of Carlsbad Family Self-Sufficiency Action Plan and the City of Carlsbad Single Audit Report on Federal Award Programs. In accordance with the regulations, Ms. Nunn stated that the City of Carlsbad does require public participation, which does require a public review and comment period for 45 days prior to adoption. She explained this period started on March 18th and will end on May 1st. The Housing and Redevelopment Department is requesting public comment on the proposed plan and public input on any needs and priorities that they feel the Housing and Redevelopment Department has not addressed in the Plan. She stated that all oral communication will be recorded at public hearings, which this will be a public hearing, and then the Housing and Redevelopment also has a second public hearing when the Housing and Redevelopment Department takes it to the Housing and Redevelopment Commission and written comments can be mailed, e-mailed, hand-delivered or faxed. Ms. Nunn stated that at this time the Housing and Redevelopment Department has not received any public comments. Commissioner Scarpelli asked if those people who have been waiting on the list for the last few years have been contacted to see if they had any comments? Ms. Nunn replied that the Housing and Redevelopment Department have not contacted people on the waiting list. She further stated that basically, the Federal requirements, although that is a good suggestion and they might consider incorporating into this process for the next Annual Plan, but at this point, the Regulations only require a 45-day comment period which is published in the newspaper and that the Housing and Redevelopment Department have it approved by the Housing and Redevelopment Commission in the form of a public hearing. She stated that the Housing and Redevelopment Department also has an additional for the PHA Plan this year where the Housing and Redevelopment Department is going to have participants of the program, possibly five to ten people who will be reviewing the Plan and seeing if they have any ideas which they would like to have input into the Plan or if they have any comments on the Plan in areas that the Housing and Redevelopment Department is not addressing. Ms. Nunn stated that as far as any significant changes from last year's Annual Plan and this year's Annual Plan, is basically under the Homeownership Opportunities. She pointed out that there was a regulation that came out in September that gives the Housing and Redevelopment Department the ability to use the Rental Assistance Program as a Homeownership Program where they can use the Rental Assistance Payment to help pay the mortgage payment. Ms. Nunn stated that at this time the Housing and Redevelopment Department is not going to be offering that program, but the Housing and Redevelopment Department did make a note in the Plan, stating that the Housing and Redevelopment Department is looking into that, which is something that the Housing and Redevelopment Department will be researching to see if it is viable for the Housing and Redevelopment Department to administer that type of a Homeownership Program here in the City of Carlsbad. Commissioner Huston asked regarding under the Homeownership Program, how does the down payment work and when is it going to be resolved as to rent payments going to mortgage payments? Ms. Nunn replied that right now the regulations state that if you have that type of a program incorporated in your Section 8 program there has to be a minimum of 3% down payment and that of that 3% the family is responsible to come up with 1% out of their personal funds. She continued that as far as funding resources to help with down payment plans is basically what the Housing and Redevelopment Department will be researching to see what kind of other funds that may be out there that could assist with this. She went on to say that there are some non-profit agencies and advocate groups for persons with disabilities that do have some Homeownership type programs and the Housing and Redevelopment Department will be collaborating with them to see if putting together all the funding sources whether the Housing and Redevelopment Department can make this work and what the cost would be to the City if the Housing and Redevelopment Department were to operate such a program and before the Housing and Redevelopment Department would go forward with that, of course the Housing and Redevelopment Department would bring it to the Housing Commission and let them know about the program for their recommendation to Council. Commissioner Huston asked if that was something that the Housing Commission will look at, at a subsequent meeting, between now and July I? Ms. Nunn answered that it is probably not something the Housing Commission will see until next fiscal year. HOUSING COMMISSION MINUTES APRIL 12,2001 PAGE 3 of 11 Commissioner Scarpelli commented in reviewing the draft report, he said that it was very discouraging from the point of view that there are some real serious needs in Section 8 as in Housing from everything from the 30% of Median Income to 80% of Median Income and it seems like we keep following the same path and we are not catching up, particularly since we are dealing with Section 8 this evening, there seems to Commissioner Scarpelli that there is going to have to be something done with Section 8 funding so that we can get these lists down. He further pointed out that there are a number of areas, for example, that he would like to address with the staff, 1) programs that are run by MAAC, Bridge Housing Corporation etc. and what they are showing is that properly managed units have a demand even though they are quite restrictive. He thinks the problem with Section 8 is, as is brought out in Ms. Nunn's draft report, that is going to be moved forward is that we are finding it difficult to get landlords to rent space to people that are under Section 8 and he thinks the report brings out what we have heard over and over and over again, is that the market is such that we have such a low, as is on the report-l/2 % vacancy rate in the City of Carlsbad that in fact, these people are not interested in doing so. There appears to Commissioner Scarpelli that there should be some incentives to cause them to want to rent units to Section 8. He pointed out that one of those would be careful screening which there is a section in the reports dealing with screening where the Housing and Redevelopment Department has checked off "Participate in Consolidated Plan Development Process to ensure coordination with broader community strategies." He stated that he was not sure this was the one. He further pointed out that he was referring to the top of page 9 and the one that wasn? check is called "Maintain or Increase Section 8 Lease Up Rates by Effectively Screening Section 8 Applicants to Increase Owner Acceptance of the Program," of which the Housing and Redevelopment Department does not have that one check. He suggested that if the Housing and Redevelopment Department is trying to entice owners to make their units available to people on Section 8, that possibly one of the areas is a very effective screening program to let them know how carefully, other than the screening that was described in the report, the Housing and Redevelopment Department does screen these people so they will be good tenants, they won't destroy the property, they will abide by the rules and regulations of the owner, just as they have to at Laurel Tree, just as they have to at Villa Loma and will have to at Poinsettia Station. He stated that the Housing and Redevelopment Department starts treating private owners of potential rented units in the same way as we do non-profit owners of rental properties who set their own standards of screening, which are very rigid. Ms. Nunn stated that unfortunately this is a little misleading for what they are talking about as far as the maintain or increase Section 8 of Lease Ups by Affectively Screening Section 8 Applicants," is that the Housing and Redevelopment Department does not have the ability to screen them for rental history. She said that it is not within the regulations for the Housing and Redevelopment Department to do so, but what agencies can do is they can acquire police reports for everyone who comes in and the family is the one that actually has to provide the police report at their own cost. It has been felt by our agency that since the Housing and Redevelopment Department is so small and basically the clientele with whom the Housing and Redevelopment Department is working, this is not necessary. She stated that what the Housing and Redevelopment Department does if someone identifies themselves as having had been arrested for either violent criminal activity or drug-related activity, that is when the Housing and Redevelopment Department would request the report and make a decision on whether the Housing and Redevelopment Department would deny assistance at that point. Commissioner Scarpelli stated that he understands what the Housing and Redevelopment Department does as it is described in the report. He went on to say what he is suggesting is that the Housing and Redevelopment Department has to start looking at other ways and start thinking "outside the box," the new terminology today is this. He further pointed out that when he read through the report of what is going on, all he felt about the whole process was status quo, the Housing and Redevelopment Department is going to fall further behind in making units available etc. He said he does not see anything creative that is going to cause anything different to happen fiscal year 200112002 than has happened in the past. He is suggesting that some creative thought be put into this and not feel so hampered by the restrictions of regulation etc. He thought that maybe the Council, through the Housing Commission or directly from the Housing and Redevelopment Department, needs to hear what is really needed to make these programs effective in our community as they are not effective. He went on to state that the Housing and Redevelopment Department has waiting lists that continue year after year of the numbers that are being discussed in Section 8 that the Housing and Redevelopment Department is very ineffective. Ms. Nunn stated that she will definitely note Commissioner Scarpelli's comment as part of the PHA Plan. She went on to say that some of the things the Housing and Redevelopment Department is doing as far as staff trying to think "outside of the box," is that the Housing and Redevelopment Department does have Owner-Outreach Workshops and the Housing and Redevelopment Department hosts those quarterly to invite new owners to come into the program. She said the Housing and Redevelopment Department is also involved with the San Diego Apartment Association and the North County Apartment Manager's Association and doing presentation to those groups directly to explain to them the program, but as far as thinking "outside the box," the . . 1 HOUSING COMMISSION MINUTES APRIL 12,2001 PAGE 4 of 11 Housing and Redevelopment Department still has to do so within regulations and the Housing and Redevelopment Department is bound by regulations which are Federal Regulations that can only be changed on a Federal level. Commissioner Scarpelli commented that changing regulations at a Federal level starts at the grass roots, so it is the grassroots that cause the changes to take place. He stated that if the Housing and Redevelopment Department does not request and then demand changes, they do not happen, so we have to do our part. He continued to state that when we feel we are not able to meet the goals and objectives of Congress, regarding housing in the United States for all of its citizens, then we have to start letting those legislators know that the laws we work under and the regulation will make it impossible for us to meet these criteria, and unless they hear that from us on a constant basis, nothing will change. Then he referred back to report bringing out (for he said he is cognitive of all that is being done-not as if he does not know what is happening, and pointed out that Ms. Nunn has made it very clear by the report and the checked-off areas of what is being done) a meeting with the owners, he wanted to know if the Housing and Redevelopment Department is listening to find out why are they not participating and what is the Housing and Redevelopment Department doing about trying to overcome those obstacles? He questioned why are they not willing to rent to Section 8 clients and what are the problems. He thought he knows what some of those problems are and what some of the fear of some of those owners are, for he hears over and over again by the owners who won't do it. So he asked again what is the Housing and Redevelopment Department doing to overcome those and that is why he thinks when the Housing and Redevelopment Department says they cannot effectively-they asked the question, "maintain or increase Section 8 lease up rates by effectively screening Section 8," but what does that mean? He pointed out that this report was not produced by the Housing and Redevelopment Department, but it was produced by the agencies to whom the Housing and Redevelopment Department is reporting who are supposedly responsible for making housing available. Again he asked, what do they mean by "effective Screening" and if effective screening is impossible, due to regulations, then they better be told about it. He went on to explain that was all he was saying. Ms. Nunn agreed with Commissioner Scarpelli, that there is a lot of problems with the regulations and there are advocacy groups on behalf of the housing agencies that do address those and the Housing and Redevelopment Department has organizations that they belong to who address those and write position papers to our local legislation as well as to Federal legislation in order to change some of the regulations, but it is a slow process, but the Housing and Redevelopment Department does need comments like Commissioner Scarpelli's and those are good comments to incorporate in the plan, because HUD is going to be reviewing this plan and that is what they are looking for. Commissioner Scarpelli stated that HUD needs to know the Housing and Redevelopment Department is "hamstrung." He further pointed out that keeping in mind that this government is moving in the direction of the centralized government, grassroots government, local government-they think local government can be more effective than centralized government and so therefore, he is asking them to give us the ability to do what we have to do. He stated that we know what needs to be done at the local level and stated that they don't need them to fill us full of regulations that makes it impossible for us to come up with solutions to the problems. Again he restated that he is mentioning this to staff only because he thinks it rather hopeless, never to improve, never get better, the same formula year after year doesn't work causing much frustration knowing that everyday nothing can be done about changing it. He said that we have got to become more aggressive and constructive as he doesn't mean this as criticism, but is suggesting it as a brainstorming session to simply find out and know for a fact why is it that the Housing and Redevelopment Department can not get landlords to rent to Section 8. Commissioner Scarpelli stated that he would want to know all the reasons why and then he would want to see what the Housing and Redevelopment Department could do about taking those negatives away and presenting a workshop and letting them know our needs etc. is part of it, but if we don't know what their needs are, we are never going to get them to change. Ms. Nunn pointed out that actually the workshops are not so much addressing the Housing and Redevelopment Department's needs, but it is more an educational workshop for the owners, directed to the owners because there have been some good changes in the Rental Assistance Program and unfortunately the Rental Assistance Program does have a bad reputation that is connected with it and so there are owners that they just hear the word Section 8 (which we try to avoid not to use now, we try to use the term "Rental Assistance") and we are trying to get more involved with the owners, which is why we are now members of the San Diego Apartment Association and the North County Apartment Manager's Association and try to speak to them more on their level on what the benefits are to them of the program. Ms. Nunn said that is how the workshop is set up as more of an educational workshop. She stated that if the Housing Commission would like, the Housing and Redevelopment Department will be having a workshop in San Diego the end of May and she can advise the Housing Commission if their schedule permits, they might like to come down and see what types of workshops the Housing and Redevelopment Department does put on to the owners. HOUSING COMMISSION MINUTES APRIL 12,2001 PAGE 5 of 11 Commissioner Scarpelli asked the Commissioners if they would like to be advised? Commissioner Huston commented that landlords are given a choice between renting their property to somebody who is on AFDC and somebody who is a Software Engineer. The landlords are sitting in the drivers seat right now because of the housing shortage and such a great labor market, which brings us to the other perspective on the Median Income given that the corporations that have moved into North County and San Diego County as a whole. She asked if it has raised the Median Income some so that the figures you have been using all along to establish the AMI? Commissioner Huston then asked how often does the Housing and Redevelopment Department go back and look at those? Ms. Nunn answered that they are revised every year and the Housing and Redevelopment Department has just received the new revisions on April 6*. She replied that the Housing and Redevelopment Department figured they had almost a 6% increase from last year. Commissioner Huston asked if that shortened or impacted the wait list? Ms. Nunn replied that the Housing and Redevelopment Department is pulling names off the wait list on a consistent basis to make sure the Housing and Redevelopment Department is utilizing as much of the funding they have since they did receive last year on April 1st 75 units of funding that were targeted specifically towards persons with disabilities and an additional 50 units called the "Fair Share Allocation," so the Housing and Redevelopment Department has received an additional 125 units in the last fiscal year. She continued that right now the Housing and Redevelopment Department is going through the process of pulling people off the waiting list. She pointed out that the major barrier is for the Housing and Redevelopment Department to find places for those on the waiting list to live here in Carlsbad. She stated that even if some owners are willing to work with the program, because of regulatory constraints, that unit may not work for that family because the rent may be too high. The Housing and Redevelopment Department has been able to negotiate with landlords. The Housing and Redevelopment Department has been creative such as not requiring leases anymore and have negotiated with owners. Ms. Nunn gave the following as an example: That if the owner is charging $1,200 a month rent, but because of regulatory constraints, the family cannot pay that amount when they initially move into the unit, the Housing and Redevelopment Department will negotiate with the owner to come down for the first month and then give a sixty-day notice to raise the rent after the first month back up to where the owner was originally requesting the rent and advising them that they are only going to lose out on three months rent and you are going to be able to rent to this family and help the family. Ms. Nunn stated again the Housing and Redevelopment Department is making progress, but said that the market right now is very difficult for this program. She stated that the Housing and Redevelopment Department are not the only ones experiencing it here in Carlsbad, but they are experiencing it throughout the whole San Diego County area. She said that Carlsbad and Encinitas are hit the hardest as we are the higher rent areas of any of the other Housing Agencies. Commissioner Huston agreed the Housing and Redevelopment Department has a very difficult job. Ms. Nunn replied that it has it challenges, but she felt the Housing and Redevelopment Department also looks at those as opportunities to succeed. She felt that even though there are a lot of regulatory constraints the Housing and Redevelopment Department still has been successful to house people that are in need and that is what the Housing and Redevelopment Department is there to do. Commissioner Scarpelli pointed out that he believed the report in a whole is where working in a framework that is not working, they have not presented anything in a creative way in which to resolve it. He thought it almost gives the impression that they are saying to themselves there is nothing else they can do and this is the way it is and this is the way it has to be and so we haven't found any approaches to resolve it. He mentioned the comment Ms. Nunn made regarding the landlord helping the family. Commissioner Scarpelli pointed out that they are not interested in helping the family, but they are in it as an investment, they want the greatest return on their investment that they can get. He stated that if they work from that perspective, they would feel comfortable helping the family if they were getting market value rents. He continued that maybe we need to be looking at, "how do we provide them not only market value rents, but possibly some incentive over market value rents." He stated that if there are regulations that say we can't do it that way, then what we need to do possibly is look at changing those regulations and doing whatever little bit we can do to do that. He stated that money does speak. He stated that because these people are in it, it is an investment, it is part of their investment portfolio, they are looking for certain returns, and they are not about to go under market rent to help some one in most cases. He stated they are not that benevolent. Commissioner Scarpelli clarified that he was not talking about the non-profits, but that he is talking about the independent owners who appear to the Housing and Redevelopment HOUSING COMMISSION MINUTES APRIL 12,2001 PAGE 6 of 11 Department's greatest candidates for Section 8 availability. He asked if there was anything from preventing the Housing and Redevelopment Department to pay market-rate or over-market rate? Ms. Nunn affirmed that at this point the Housing and Redevelopment Department is doing what it can within the regulations allowing the current payment standard and have chosen to go 10% over what the Federally Published Fair-Market Rents are on which payment standards are established to determine the family subsidy. She went on to state that under the Federal Regulations are the ability to set payment standards anywhere from 90% to 110% of the Fair-Market Rent. Ms. Nunn stated the Housing and Redevelopment Department adopted 110% as soon as they actually changed the regulation. Commissioner Scarpelli asked if that is 110% of Median or 110% of Market Rate? Ms. Nunn answered that it is called Fair Market Rent and it is an amount that is published by the Federal Government on an annual basis that goes into effect on October 1st. She stated that in the past it use to be 40% and they would do a survey of the region, for us it would be San Diego County region, of available rentals at 40% and determine that factor. She further stated that because of Advocacy from Housing Agency Groups, they have since changed that regulation and adopted it at 45% of the Rental Market which did increase the Fair-Market Rents slightly here for the San Diego County area and the Housing and Redevelopment Department goes 10% above those amounts that they publish. Commissioner Scarpelli asked where that puts us in Carlsbad, whether we are below market rate or at market rate by going with that formula of 10% above? Ms. Nunn gave the example that on a two-bedroom, the Housing and Redevelopment Department's payment standard would be at $985, so when looking at a family subsidy, it is 30% of their adjusted monthly income minus the $985 if they qualify for a two- bedroom and that would be the maximum subsidy. She pointed out that where the Housing and Redevelopment Department has a problem is that when HUD changed the regulations in 1998, one provision they put in is when a family initially receives rental assistance in a unit, they cannot pay more than 40% of their adjusted monthly income towards the rent, which limits the amount of rent we can pay to an owner, which is why we had to negotiate some to get families in there and then the owner raises the rent afler they move in to get it back up to the amount that they requested in the first place. She gave the following example: On a one-person household, the payment standard is $787, if someone is on SSI, at 40% of their income, they cannot pay more than $848 for their rent. She said that even though the payment standard is $787, they have that little bit of a gap where they can pay a higher amount, because instead of paying 30% of their adjusted income towards their rent, they can pay as high as 40%, but if the rent to owner exceeds their 40% share of rent, then we cannot accept that unit and we have to deny it. She stated that is when the Housing and Redevelopment Department looks at negotiating with the owners to at least get them to come down in the rent initially and if the family is in agreement with it, then they can raise the rent afler the family moves into the unit, where they do a month-to-month rental agreement versus a lease-type system. Commissioner Scarpelli, thinking out-of-the-box, asked if it was possible to offer incentives such as guaranteed payment to the owners, that the City would back up any loss of rent to them or anything of that nature? He continued to ask if there was anything outside the regulations where the City can subsidize something above and beyond what the Federal Regulations are saying we can or cannot do? He asked if the City, on its own, decides to use its General Budget to assist above and beyond it without violation of regulations? Ms. Nunn replied with a partial answer saying that the regulations state what the rent-to-owner can be at the initial move in, so there could not be any additional subsidy to adjust that rent, unless it went directly to the family, but then if it went directly to the family that would count as income and it counteracts the whole purpose. She stated that if there was going to be some incentives to the owner, it could not be out of the Rental Assistance Funds, it would have to be out of some other funding source and it would have to be some other type of guarantee, not that the Housing and Redevelopment Department could pay the difference in the rent to the owner, but maybe some other type of incentive. Commissioner Scarpelli mentioned that this was something we could look into, some other type of incentive to meet the need. He further asked concerning the question dealing with guarantees to the owner (if someone defaults on their rent, they are guaranteed that the City will step in and pay the rent). He pointed out that he was looking outside-the-box for incentives for owners to rent to Section 8 people for which the Housing and Redevelopment Department needs space. I HOUSING COMMISSION MINUTES APRIL 12,2001 PAGE 7 of 11 Ms. Nunn replied that under that circumstance, the Rental Assistance Program already offers that guarantee. She said that if somebody does not pay their rent and is in violation, the Housing and Redevelopment Department will pay the owner through the end of the month in which the family has to move, if it has to go through an eviction proceeding, but the Housing and Redevelopment Department cannot pay beyond that point. Ms. Nunn stated that under the regulations the Housing and Redevelopment Department is allowed to pay, if a family is in violation of the lease, if they moved out on April 2nd the owner would still be entitled to the full assistance payment for the month of April because that family was in violation of the lease. She pointed out that the Housing and Redevelopment Department also has the ability to terminate the family’s benefit so they do not receive further benefits if they do violate the lease. Commissioner Scarpelli asked if Ms. Nunn had a magic wand, and she could make the whole Section 8 program work effectively, what would she do? Ms. Nunn stated in her opinion, not speaking necessarily for staff, she thought that it would be beneficial to have more of a community development block grant type funding, where the City is allocated a certain amount of money and the City has the opportunity to set up the program in order to meet the needs of the community. Commissioner Scarpelli asked if this plan Ms. Nunn has in mind, was the utopia way of solving the problem that is persistent year after year, been presented? Ms. Nunn said it has been talked about in the last five years as a possibility of doing that amongst legislation on the Federal level. Commissioner Scarpelli asked if it is still being actively pursued? Ms. Nunn replied that she has not seen anything recently. She pointed out that with the new administration everyone may see a lot of changes. Commissioner Ritchie asked how large a part of our subsidized rental is the Section 8 Program? Ms. Nunn clarified that it is the amount of allocation for the program and that with the new funding the Housing and Redevelopment Department is up to about 3.6 million dollars. She pointed out that is what the Housing and Redevelopment Department is what is allocated and they do not necessarily use that amount, but that is taking into consideration the new units the Housing and Redevelopment Department just received. She further stated that before the Housing and Redevelopment Department allocation was probably at 2.9 million dollars and then with the new allocation of units, it brought the Housing and Redevelopment Department up to about 3.6 million dollars. Commissioner Scarpelli stated the staff is recommending approval of the Resolution that is on the floor MOTION ACTION: Motion by Commissioner Ritchie and duly seconded, that the Housing Commission adopt Resolution No. 2001-001, recommending that the Housing and Redevelopment Commission approve the Carlsbad Public Housing Agency (PHA) Annual Plan for Fiscal Year 2001 for submission to the US. Department of Housing and Urban Development. VOTE: 4-0-0 AYES: Commissioners: Renee Huston Charles Griftin Doris Ritchie Ed Scarpelli NOES: None ABSTAIN: None - HOUSING COMMISSION MINUTES APRIL 12,2001 PAGE 8 of 11 Commissioner Scarpelli brought forth the next item on the Agenda which is the Report from Staff, pointing out that no action is needed for the Annual Housing Production Report given by Scott Donnell. Mr. Donnell announced he works on the Advanced Planning Team and pointed out that at the Faraday Center this team does this report, an overview of what the City has produced in the way of housing over the various Fiscal Years, which this is the seventh annual report which was presented to the Housing Commission a couple years ago. The report is for the last Fiscal Year which ended June 30, 2000. He presented an overview of the purpose of the report, why it is done, its content and housing needs and production in terms of State and Federal law in providing housing for the four income groups, and what Carlsbad produced in the way of new construction over the past fiscal year, a conclusion and summary of what Carlsbad did last year in terms of new production and an outlook for the future of what is coming up both in the way of Affordable Housing Production and Housing Production overall. Mr. Donnell pointed out the first and foremost purpose of the report is to comply with State Law. He stated there is a Government Code Section that says, “Annually Cities have to prepare reports which show the progress that Carlsbad or San Diego or Poway is making toward the Regional Housing need.” He went on to say the reports are required to be prepared for all income groups, from very low to other and it focuses on new construction only. He stated if the City of Carlsbad acquires units, such as the Tyler Court Apartment Project or rehabilitates some units, it doesn’t count toward the Regional Share for which there is a good reason, being Regional Share is based primarily on growth in terms of new jobs and population of which the Needs Assessment deals with. He shared that the Needs Assessment is an assessment produced by SANDAG which is our local Council of Governments and allocates housing for the San Diego Region, the SCAG which is the local council of Governments for the LA area does the same. He continued that the growth projection and the housing that is needed to accommodate that growth is done every five years and has been done for this current housing cycle which ends in 2004. He said the way the City determines housing affordability to see what the City has provided and if it meets the Regional Shares is to do some surveys and also get information from the Housing Assistance Programs we have. He stated this report concentrates on the previous Fiscal Year Production and will also look at the Housing Cycle as a whole, the future production will be discussed at the last item of this report. Mr. Donnell shared that the Regional Share Housing Needs Assessment is an estimate of new housing for all income groups, is based on population and job growth and is prepared for each five-year housing cycle. He stated the estimates or the Regional Share Needs are not requirements and he presented a slide which shows the City needs, according to growth, about 1,700 units of very low income which is a projection based on what the State and SANDAG feels will be the growth in the region. He also stated that Cities are not obligated to provide the numbers, but they are obligated to show that their General Plans through density, zone etc. can accommodate the requirement. He mentioned that each jurisdiction shares the need, Poway, San Diego and Carlsbad all have their own Regional Share Allocation. Mr. Donnell shared a graph showing what it is for the 1999-2004 Housing Cycle from very low to other, showing the City of Carlsbad’s total need is over 6,200 units which is estimated Carlsbad’s needs to accommodate the growth (our share of San Diego County’s growth). Mr. Donnell pointed to another Housing Needs graph showing the numbers being similar, very low is the highest category showing a need of over 1,700 units and low is the smallest category only about 300 units fewer than the very low (1,417 total). He pointed out the other which is everything above moderate showing a need of 1,591 units, all of which are projections over the 1999-2004 Housing Cycle. He further explained that to determine Affordability, first of all, housing production has filtered through the four income groups, the 30% rule having to do with the amount of income that can be allocated toward housing and because the income limits expressed by State and the Federal Government are expressed in terms of family size instead of bedrooms, the City has to do some conversions of which SANDAG in 1993 made the determination that all bedrooms are determined to house two people, Le., a three-bedroom house could house six people, a four-bedroom eight people, which is not really realistic as there are not many four-bedroom homes that will actually be occupied by eight people, but this is the methodology that has also been accepted by the State. He continued that rental versus for sale, the formula to determine whether a for sale unit is affordable to very low or low is to say that a for sale price can not exceed three times the maximum income, rental is based on the 30% rule. He pointed out that it is easy to figure out all of this for assisted units that the City participates in whether through financing; it is harder to do that for market rate which is one of the reasons the two-person bedroom rule was developed. Mr. Donnell went on to talk about how the City determines Market Rate Prices which is what the City does on a quarterly basis regarding the Surveys and Researches, which there is a staff member at the Faraday Center who receives a report showing all completed housing and with that report, she sends out a survey to the various developers requesting them to provide sales prices and 99% of the time the City gets that information, but based upon the number of units that are built, almost two thousand this last fiscal year, there is a lot of follow up that is necessary as developers do not always provide the information regarding the sales prices that the City needs, so there are calls that must be made and if those calls do not produce results, then the City resorts to getting Assessors information or doing comparables. Mr. Donnell concluded this is the reason this report follows the fiscal year for several months, as even though the fiscal year ended last June 30*, the City is just now presenting to the Housing Commission, partly because of the effort which has been made to get as complete information as possible. He shared a slide giving an idea of what the rent limit would be for very low, low and moderate and also what the purchase limit for example a four- A HOUSING COMMISSION MINUTES APRIL 12,2001 PAGE 9 of 11 person, low income family would be no more than $128,000 for homes that would have two bedrooms, as two-bedroom households are considered to be occupied by four people. Mr. Donnell presented a graph showing what was actually built in Carlsbad the last fiscal year, only for market-rate units, not units that the City assisted through financing, of which there were not any very low market rate units produced. He showed the single-family, the SF category which includes both single-family detached and attached and of course condominium, apartments and the last category being SDU or Second Dwelling Units. Mr. Donnell pointed out that the 37 Second Dwelling Units were considered to be affordable to low income because by their nature they are very small and if they are rented, they are restricted to low income. He stated that Moderate Income Housing produced was poor which was a total of 42 units and the bulk of what Carlsbad produced in the way of housing this last fiscal year was Other, or housing that was only affordable to upper income households. Mr. Donnell shared that all this information is in the packets each Commissioner received. He went on to share the next slide which showed the Assisted Housing that Carlsbad produced which are units that received assistance from the City of which 23 units of very low income were produced, 122 low income units which actually resulted in a total of 145 very low and low income units. He further shared a slide that illustrated what these projects were and to share other highlights he shared that the City produced a total of 182 very low and low income units, 116 of which were apartments in the Rancho Carrillo Project, 24 were paired homes in the Cherry Tree Walk Project, 5 homes produced for very low and low income families in Calavera Hills and 37 second dwelling units, which makes the number in which the City actually assisted was 176 units. Mr. Donnell stated that overall last year, 1,914 units were produced, 88% of those were affordable only to upper income, 70% were single family detached which was the largest category. He showed a pie chart showing that 88189% of the units produced were for the other income, 8% was affordable to low income, and then the 1 % and 2% for either very low or moderate. Mr. Donnell’s next slide compared Carlsbad’s Annual Production with the last few fiscal years, which shows the City has steadily increased and he said it is obvious the other income production of units has increased as well as the total. He further pointed out that chart also shows is that income for units produced for very low and low income and also moderate is varied which has not steadily increased as the others and in fact this last fiscal year’s production was substantially more than the previous fiscal years. He shared that moderate income production of units has slowed since 199711998 and the production in this past fiscal year was lower than any of the three previous fiscal years. Mr. Donnell included the current fiscal year totals so far through March of this fiscal year, over 1,600 units have been produced, which appears that production may eclipse even last year in terms of the number of units produced. He pointed out that last year was the third highest total ever for Carlsbad for a fiscal year with over 1,900 units and he stated that the City has only 300 units more to pass that. The next slide he pointed out it shows Carlsbad’s Progress Versus Its regional Share and for the fiscal year the City has not met most of what the regional share would say we need, however, he pointed out to look at other income production in this past fiscal year, the City has actually succeeded what the regional share estimate is for other income needs. Mr. Donnell shared the median sales price, based on the City’s surveys, which is the information the City receives from developers, which was $370,000 which is for all for sale units whether condominium or single family detached and the highest sales price was almost two million dollars and the lowest sales price for a single family detached home was $175,000 the rental rates for market rate units ranged from above $1,200 to $2,700 and of the single family detached homes that were built, 95% of the three and four-bedroom homes were affordable only to other income. He next shared a chart showing where the bulk of the housing prices lie which is between $300,000 and $399,000 and at the very end of the chart on the right side it shows there were 11 homes that were priced at a million dollars or more. He pointed out on this same chart that the one home on the left side of the chart was for that single family detached home at $175,000 and that this chart does not show any housing production in which the City assisted such as the for sale units in Cherry Tree Walk or Calavara Hills. Mr. Donnell went on to provide the conclusions in looking at the past fiscal years from ‘96197 to the current there continues to be a strong market demand for upper income housing, but the City has however, continued to make progress in providing Affordable Housing because of the lnclusionary Housing Program and also the assistance which the City has been able to provide. He pointed out that moderate income housing as the previous slides have shown has been weak, recalling several years ago when the City was adopting the lnclusionary Housing Program, that there was consideration given to including moderate income housing as part of the lnclusionary program which it was not decided to do because of assurances from developers that moderate income housing would be produced. He stated that the outlook appears that production at least for this fiscal year will remain strong, numbers already showing that housing production for the fiscal year as well as this calendar year are ahead of previous year‘s requirements, for example through the first three months of 2001 the City has permitted 550 units for the first three months of 2000 had permitted a little over 400 units. He stated that eventually the City expects that to decline for the nearing of the completion of three large housing projects in the City being Rancho Carrillo, La Costa Valley and also the current Calavera Hills Project, but in a few years the City expects production to once again to pick up. He further stated that in addition with regards to Affordable Housing, both recent Affordable Housing Projects as well those that are under construction are clearly the result of the lnclusionary Housing Program as well as City assistance. Mr. Donnell stated that new Affordable Housing Projects, of which Laurel Tree and Poinsettia Station already exist, will reflect a total of 348 new affordable units for very low and low income housing. He added that beyond 2001 which would be three to seven years out will be many more projects in the works, some are in the planning stages and some are very close to going to the Planning HOUSING COMMISSION MINUTES APRIL 12,2001 PAGE 10 of 11 Commission which include Kelly Ranch which is the project along the future extension of Cannon, between Faraday and El Camino Real, the Thompson Project which is on the Thompson Rose Property which is just west of Aviara Parkway and on either side of Poinsettia, Calavera Hills is the project which will put in the extension of College between El Camino and its current terminus in the Calavera area, the Villages of La Costa which is 2,400 units has the Environmental Impact Report now under review and then finally the Bressie Ranch Project, which is very near the airport is the project which is in the earliest planning stages with 600 total units with 100 affordable to lower income. Commissioner Ritchie asked to see the previous slide and asked if the percentage of lower income units to the total units if it is an acceptable percentage and is this where the City wants to be? Mr. Donnell replied that it is actually a little more than 15% and that is where the City wants to be. ANNOUNCEMENTS There were no announcements ADJOURNMENT By proper motion, the Regular meeting of April 12, 2000 was adjourned at 659 p.m. Respectfully submitted, DEBBIE FOUNTAIN Housing and Redevelopment Director JUDY KIRSCH Minutes Clerk MINUTES ARE ALSO TAPED AND KEPT ON FILE UNTIL THE WRITTEN MINUTES ARE APPROVED.