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HomeMy WebLinkAbout2016-01-14; Housing Commission; MinutesMinutes of: Time of Meeting: Date of Meeting: Place of Meeting: HOUSING COMMISSION 6:00 P.M. JANUARY 14, 2016 COUNCIL CHAMBERS CALL TO ORDER Chairperson Igoe called the Meeting to order at 6:00 p.m. PLEDGE OF ALLEGIANCE Debbie Fountain led with the Pledge of Allegiance. ROLL CALL Present: Commissioners: Susan Igoe, Chairperson Arline Carrillo Alan Newman Shaunee Williams Absent: Bobbie Smith Staff Present: Housing & Neighborhood Services Director: Debbie Fountain APPROVAL OF MINUTES Minutes of March 12, 2015, meeting were approved as written. Minutes of December 10, 2015, were approved with one change, "Arline Carrillo has lived in Carlsbad since she was 11 years old." ITEM NOT ON AGENDA There were no items not on the agenda. NEW BUSINESS Debbie Fountain, Director of Housing & Neighborhood Services, said there are two items on the agenda tonight. The first one is Quarry Creek Affordable Apartments. The proposed project by Chelsea Investment Corporation is a 64 unit affordable housing development to be constructed in partnership with Cornerstone Communities to satisfy the inclusionary housing obligations of the Quarry Creek Master Plan development. The Quarry Creek Master Plan was previously approved by the City Council, and the Planning Commission will consider the Site Development Plan for the proposed affordable development early in February 2016. The Quarry Creek development is located in the Northeast Quadrant of the city, on the south side of Haymar Drive, and borders the City of Oceanside. The affordable rental homes will be constructed within the first phase of the Quarry Creek Master Plan development. The 64 unit affordable housing apartment development is anticipated to have fourteen, two- and three- story buildings with 116 surface level parking spaces. This would include 12 one -bedroom (19%), 32 two - bedroom (50%) and 20 three -bedroom (31%) rental homes. Of the 64 units, 56 will be affordable to households earning 60% of the San Diego Median Income, and 7 units will be affordable to households earning 50% of AMI. Chelsea Investment Corporation will develop, own and operate the affordable housing project. Chelsea is experienced in affordable housing in San Diego County. This is the fourth affordable housing development in Carlsbad for them. Chelsea has a history of building top quality housing developments in Carlsbad. HOUSING COMMISSION MINUTES January 14, 2016 PAGE 2 of 7 Page three has a summary proforma for the review of the Housing Commission. The city assistance will be in the form of a residual receipts loan secured by a note and deed of trust. The loan will begin accruing after the completion of construction of the improvements. The outstanding principal and accrued interest on the loan will be amortized over 55 years and repaid from cash surplus in equal annual installments of principal and interest. If they are unable to pay, it will be rolled over into the next year to pay. With a recommendation from the Housing Commission and approval of the City Council, appropriate documents, including a Financial Assistance Agreement, Regulatory Agreement, Promissory Note and Deed of Trust, will be prepared and executed to set forth the terms of the financial assistance and its repayment. Cheri Hoffman, Chelsea Corporation, commented the infrastructure work is extensive. We have the development impact fees to make up those costs. Quarry Creek will be 64 units of affordable housing. The tax credit program lets the project operate independently, which will allow them to have a mortgage; 27% of the project cost. When residents move in, they are self-sustaining, and 35% of their income will pay for their rent. This rent will sustain the project. Commissioner Carrillo asked if the rent is lower to begin with. Ms. Hoffman said yes, they are 35% below the market rent. Because of the subsidiary Chelsea receives, it allows them to lower the rent. Commissioner Carrillo asked about the income figures. Ms. Hoffman said 60% of the area median income. The AMI is about $80,000 for a family of four. The households who move into this projects are under that limit. They are people employed in schools or other public services. Commissioner Williams asked if tenants have to reestablish annually. Ms. Hoffman answered, yes we do annual recertification. According to the Tax Credit Regulation if a person makes more money, we do not evict them. We follow a 140% rule. When we do the recertification and your income does not exceed the 140%, you are able to stay. If you are over the 140%, you will be moved to a unit at a higher rate. Commissioner Newman asked if they have real numbers, not just percentages. How much will it rent for? Ms. Fountain said at the 60% of the AMI a two -bedroom unit, and a family of four, $1,215 would be the maximum rent. The tax credit rules are adjusted a little more. We use the HUD household limit. State tax credits will use the state percentages. Commissioner Newman commented that a two -bedroom at $1,250 would be a bargain. Ms. Fountain added there is also a utility allowance. Ms. Hoffman said it is at 35%. In our agreements the rents in affordable complexes can never be more than 90%. HOUSING COMMISSION MINUTES January 14, 2016 PAGE 3 of 7 Ms. Hoffman said that 60% for the three -bedroom unit is close to $1,200 and at $1,024. Commissioner Newman asked how long it will stay affordable. Ms. Hoffman answered 55 years. Commissioner Newman said then it will be market rate. Ms. Hoffman answered theoretically. The Inclusionary Housing Ordinance says it must remain affordable for 55 years. Commissioner Newman said then direct construction is $173,000 on average. Ms. Hoffman answered yes. Commissioner Newman asked if there is something else other than sticks and bricks. Ms. Hoffman answered no. The normal work includes the grading, landscaping, retaining walls and any site work. We do have some contingency that is required by the investor, which is about a half a million. Commissioner Newman noticed the impact fees are more than what the city is going to loan for this project. Ms. Fountain said yes, that does happen. Commissioner Newman asked since there are 116 parking spaces on site, will there be any additional parking available? Ms. Hoffman apologized for not having that information. Commissioner Newman presumed they are going through the Planning Commission. Mr. Chris Earl, Chelsea Corporation, said they did have a parking study and the parking spaces on site should be enough. Chairperson Igoe commented if they say two cars per unit, it should be enough. Mr. Earl said that is correct. Commissioner Carrillo asked when they are due to be open. Ms. Hoffman said they are breaking ground in April of 2016 so in about a year. Chairperson Igoe asked with the application process, how does that work if the family lives in Carlsbad? Ms. Hoffman said they contracted to manage the complex with Cornerstone. We are active in the oversight of the management. Six months before we plan occupancy, we will open a wait list; first come, HOUSING COMMISSION MINUTES January 14, 2016 PAGE 4 of 7 first served. As the people call in and fill out the form, they establish a place in line. We will interview applications three months before occupancy for income information. Commissioner Newman asked Ms. Fountain, what happens to our already large waiting list? Ms. Fountain said all developments have their own waiting lists. Some have actually closed their waiting list because they are so large. We will first try to market to Carlsbad, but Fair Housing Law says we cannot restrict to Carlsbad only. Typically they are rented within 30 days. Ms. Hoffman said they will most likely have 100% leased. Ms. Fountain said they generally like to market to Carlsbad employers first and people on our Rental Assistance Program. Commissioner Carrillo commented it is in a good location. Chairperson Igoe agreed. Commissioner Newman made a motion to approve to the City Council of $1,280,000 in financial cash assistance from the Carlsbad Housing Trust Fund to Chelsea Investment Corporation for construction of 64 affordable family apartment homes on property in the northeast quadrant of the City of Carlsbad and within the Quarry Creek Master Plan Community. Commissioner Igoe seconded. VOTE: 4-0 AYES: Carrillo, Igoe, Newman and Williams NOES: None ABSTAIN: None ABSENT: Smith Ms. Fountain said the second item is an informational item only. Affirmed Housing would like to do a scattered site acquisition to purchase two sites and demolish the residential that is currently there. They would like to rebuild a rental product restricted to veterans, either homeless veterans or veterans and their families. They plan for service enriched units with a case manager. Veterans are a special needs population within San Diego County, and they continue to experience a high unmet need for affordable housing. There is a high concentration of veterans, many of them homeless, in North County San Diego and the area is also home to numerous important services for veterans and their families. Carlsbad is an ideal location for housing for military veterans because of its close proximity to Camp Pendleton and veteran's services. Affirmed Housing has made a proposal to purchase existing residential properties within the Barrio neighborhood and redevelop them into higher density, but relatively small apartment complexes to provide permanent affordable housing. Ms. Fountain requested feedback from the Housing Commission regarding this item. Staff is understanding that this may be a concentration of a lot of affordable housing in one area. HOUSING COMMISSION MINUTES January 14, 2016 PAGE 5 of 7 Commissioner Carrillo commented that if you put all specialized low income housing in the Barrio, you are essentially making a Barrio. Ms. Fountain agreed that could be a concern. Some cities do affordable housing as a tool, and most people do not know it is a low-income affordable product. It can be a positive, but it can also be a concern when there is too much in one area. Several years ago the city did give $75,000 per unit for Tavarua, and Affirmed Housing would be asking for $85,000 per unit with this project. Most affordable housing projects are not even identifiable because they are so nicely managed. They do not allow for overcrowding of units. It was acknowledged this could be a concern with a concentration of affordable housing in one area. Commissioner Carrillo said she is concerned about people having to relocate. Is this at Chestnut and Harding? Ms. Fountain said the one they are looking at is further south. The other one is behind Oak and is already an existing apartment. Commissioner Newman asked if there is a request condition on doing both projects or would they move forward if they only do one of them. Ms. Fountain answered currently they want to do both of the projects. Commissioner Newman commented that Tavarua is a very nice low-income facility. Ms. Fountain said we do not want too much saturation of affordable housing in one location. Commissioner Newman commented the Oak Street location is probably less of an impact. Commissioner Carrillo asked if there is one owner on Oak. Ms. Fountain answered yes. Chairperson Igoe said she likes the idea of the wrap around services. I assume like Tavarua, this would be a quiet place with the wrap around services. Even though it is three stories high, I feel it is an acceptable impact on the community. Ms. Fountain said Affirmed Housing is an affordable housing development and currently manages Cassia Heights. They are well known as well as a good developer. We do not have any concerns about them as a developer or a manager. My concern was having too many affordable housing complexes in a small a rea. Commissioner Carrillo asked when they are building Carol and Harding. Ms. Fountain said they are currently in the permitting process so hopefully in 2017; they may begin earlier. HOUSING COMMISSION MINUTES January 14, 2016 PAGE 6 of 7 Commissioner Carrillo asked if there will be a relocation of people. Ms. Fountain said all the people in there now will have to be relocated. They plan to do that early on. Chairperson Igoe asked if that was in the financing. Ms. Fountain answered yes. Chairperson Igoe asked if they will be moved somewhere for a period of time. Ms. Fountain said that is part of the plan. They will be able to have a plan when the financing is done. Their plan is to move in homeless families. They are going to rehab the building so it will look much better in the end. Staff would like to find housing for veterans in Carlsbad since now there is money at the State and Federal levels. I do want to work with this developer to build this type of housing in Carlsbad. Currently we do not have a lot of restricted units in the Barrio. Tuesday night we had someone come to City Council because she had smoke damage in her unit and the owner put her into another unit in Oceanside. After rehabilitating the unit, the owner increased the rent and now she cannot go back to her original unit. You need to create a balance for moderate lower and upper income people. We looked at Carol and Harding and knew we could help in that area with affordable housing to get rid of dilapidated buildings. We could have a positive impact. The veterans housing would be a good balance, almost like the senior housing, as long as it is service enriched. Chairperson Igoe asked if this was part of the Barrio Master Plan. Ms. Fountain said the Barrio Master Plan is supporting higher density so it is consistent. They are requesting a higher density than what the Barrio Master Plan is, which is 30% and developer is proposing 50% as they are smaller units. Chairperson Igoe commented on the small units. Commissioner Newman said half of them are studios. Ms. Fountain said they will probably want a parking modification. Parking is the number one issue in my experience working in the redevelopment area. Parking does not bring in money, units bring in money. Commissioner Newman said it is expensive to dig a hole in the ground for parking. Ms. Fountain said there is an industry issue as well as a marketing issue. If you do not have enough parking, people may not want to live there. In affordable units, you do not tend to have roommate situations which is when more cars are brought in. Villa Loma has a lot of roommates and they do not have enough parking. I do have confidence in this developer. Commissioner Carrillo asked if there are a lot of veterans in Carlsbad. Ms. Fountain answered yes we do, plus we have homeless veterans, most of them are living in their cars. Commissioner Carrillo agreed there is a need. HOUSING COMMISSION MINUTES January 14, 2016 PAGE 7 of 7 Ms. Fountain said yes there is a need. It is a special population we have not helped yet, but we should try. We just have to decide where and how. Commissioner Carrillo commented they are lower income. Ms. Fountain said they do tend to be more in the lower income range, especially for the ones who come out of the military still very young. Commissioner Carrillo said she feels that mix in income would be nice. Ms. Fountain said that may be something to look at also. Commissioner Williams said she likes this project and likes the way it would revitalize the area. We need to be mindful of how many low income projects we put in the same block. Commissioner Carrillo suggested maybe some time between projects. Ms. Fountain said she did have some discomfort with too much too fast. It is not that they are bad, just the timing. Sometimes you have to hit it when the opportunity arises. Commissioner Newman said he would encourage more market rate development. Ms. Fountain said that is what happened with Carol and Harding. We have seen some of those duplexes and they are double from what they paid. The Council thought they were too high. Chairperson Igoe commented they are pre -World War II. Commission Newman said it is desirable because it is ocean close. Chairperson Igoe said that is a good selling point. Ms. Fountain said she appreciates the input. They may begin meeting with the City Council. Chairperson Igoe made a motion to adjourn the Housing Commission meeting, Commissioner Newman seconded the motion. ADJOURNMENT By proper motion, the meeting ofJanuary 14, 2016, was adjourned at 7:20 p.m. ctfully submitted, Deborah Fountain Housing & Neighborhood Services Director PATRICIA CRESCENTI, Minutes Clerk MINUTES ARE ALSO TAPED AND KEPT ON FILE UNTIL THE WRITTEN MINUTES ARE APPROVED.