HomeMy WebLinkAbout1993-09-09; Housing Commission; ; APPLICATION FOR 1993 FEDERAL HOME INVESTMENT PARTNERSHIP PROGRAM FUNDSITEM 1
STAFF PERSL, .• : REGINALD HARRISON
STAFF REPORT <i/4&-
DATE: SEPTEMBER 9, 1993
TO: HOUSING COMMISSION
FROM: HOUSING AND REDEVELOPMENT DEPARTMENT
SUBJECT: APPLICATION FOR 1993 FEDERAL HOME INVESTMENT
PARTNERSHIP PROGRAM FUNDS: Request for approval of a
recommendation to submit an application for 1993 Federal HOME
Investment Partnership Program funds in the amount of $1 million
and appropriate $250,000 in matchi.ng funds from the
Redevelopment Low and Moderate Income Housing Set-aside
Funds in order to provide rental assistance opportunities for lower-
income residents within the City of Carlsbad.
I. RECOMMENDATION
ADOPT Housing Commission Resolution No. 93-007 recommending APPROVAL to the
City Council of the submittal of an application to the California State Department of
Housing and Community Development for 1993 Federal HOME Investment Partnership
Program Funds in the amount of $1 million to provide rental assistance opportunities
to very low income residents within the City of Carlsbad; and recommending approval
of the Housing and Redevelopment Director to execute a standard agreement if
selected for HOME funding, and any related documents necessary to participate in the
program; ADOPT Housing Commission Resolution No. 93-008 recommending
APPROVAL to the Housing and Redevelopment Commission the appropriation of
$250,000 in Redevelopment Low and Moderate Income Housing Set-aside Funds as
matching funds to the proposed rental assistance program.
II. BACKGROUND
The National Affordable Housing Act of 1990 provides Federally administered block
grants to the. nation's states, cities and counties. One of the major programs funded
under the noted housing act is the HOME Investment Partnerships Program. The
purpose of the program is to assist in the acquisition, development, construction, or
rehabilitation of housing affordable to persons or families of low income and to provide
direct assistance to low income families in the form of tenant-based rental assistance.
HOME funds.were allocated by a formula to eligible participating jurisdictions, state
and local governments, throughout the United States. Although the City of Carlsbad
HOME INVESTMENT , ARTNERSHIP FUNDS
SEPTEMBER 9, 1993
PAGE 2
is not entitled to receive funding directly from the federal government, we are eligible
to apply for funds through the State of California Department of Housing and
Community Development.
The intent of the HOME program is 1) to expand the supply of decent, safe, sanitary
and affordable housing, primarily rental housing; 2) to strengthen the abilities of state
and local governments to provide housing; 3) to assure that federal housing services,
financing, and other investments are provided to state and local governments in a
coordinated, supportive fashion.
In July of 1993, the State was allocated $20 million for the HOME program to
distribute statewide. The Department of Housing and Community Development has
prepared regulations to operate the State's HOME program and is making t_hose funds
available through a Notification of Funding Availability {NOFA) process. Individual
applications are limited to $1 million, per agency, and can include the entire range of
activities that are eligible under HOME or can be restricted to one activity. The City
must compete with other eligible agencies for these HOME funds.
For program year 1993, staff recommends that the City Council authorize the
• submission of an application for HOME funds in the amount of $1 million for a tenant-
based rental assistance program. • If approved for funding, this new program will
expand upon the City's existing rental assistance program. Currently, the City is
providing rental assistance to approximately 473 very low-income households. Staff
anticipates that we would be able to assist an additional 100 very low-income
households if we receive the requested HOME funds from the State.
Because of the City's experience in operating a rental assistance program for nearly
twenty four (24) years, staff believes that Carlsbad will be very competitive in the
noted application process. In general, the proposed program will be administered in
the same fashion as the existing rental assistance program {see attached HOME
Program Plan). The one major difference in the proposed program is that the
assistance will be provided to Carlsbad residents only. Under the federal Section 8
program, the City is not allowed to limit assistance to residents only; participants can
live in other cities and still benefit from our program. Under the program proposed for
HOME funding, if a person moved out of the City of Carlsbad, he/she would forfeit the
rental assi$tance.
Staff believes the City's best opportunity to compete successfully for HOME funds is
through a rental assistance proposal. This type of program will provide the most
immediate benefits to those in need as well as serve our Housing Element goals.
Therefore, staff recommends that Carlsbad apply for the funds.
HOME INVESTMENT , ARTNERSHIP FUNDS
SEPTEMBER 9, 1993
PAGE 3
Ill. ANALYSIS
Per the program implementation guidelines set forth by the State, 95% of all HOME
funds are to be expended for actual rental assistance payments, with the remaining
5% ($50,000) used to cover Administrative expenses. If approved, the new program
will be administered by existing staff within the Housing and Redevelopment
Department.
Staff is recommending that $250,000 in Redevelopment Low and Moderate Income
Housing Set-aside Funds be appropriated to this proposed HOME Rental Assistance
Program for purposes of providing actual rental assistance. These are matching funds
that are required for HOME fund applications. By combining the redevelopment
housing funds with the HOME funds, if received, the City will be able to assist a total
of at least 100 additional very low income households to obtain affordable housing in
Carlsbad.
IV. FISCAL IMPACT
No fiscal impact on the General Fund is anticipated at this time. The Housing and
Redevelopment Department recently purchased new computer software for
administration of the rental assistance program which we believe will substantially
improve efficiency of the existing Section 8 program. This means that the Housing
and Redevelopment Department will be able to administer the new HOME Rental
Assistance Program as well as the existing program with no new staff.
ATTACHMENTS
1 . Housing Commission Resolution No. 93-007
2. Housing Commission Resolution No. 93-008
3. Summary of Proposed Tenant-based Rental Assistance Program {To be included
within the application).
HOME INVESTMENT PARTNERSHIPS
PROGRAM (HOME)
TENANT-BASED
RENT AL ASSISTANCE
HOME PROGRAM PLAN
SECTION 1: PROGRAM OVERVIEW
1.1 Purpose
The City of Carlsbad Housing and Redevelopment Department proposes to provide
tenant-based rental assistance to approximately 100 low-income families for a two
year period. This will be accomplished by using approximately $1 million of its
Federal Fiscal Year (FFY) 1994 and 1995 HOME allocation and $250,000 of its
Redevelopment Low and Moderate Income Housing Set-aside Funds. All participants
in the rental assistance program will come from the Section 8 Waiting List. The
program will be administered by the Housing Authority of the City of Carlsbad.
1.2 Public Benefit
Currently, 4 73 low-income families in the City of Carlsbad are receiving rental
assistance through the Section 8 Certificate and Housing Voucher Programs. These
programs are administered by the Housing Authority and are designed to make an
eligible family's rent affordable; i.e., pay no more than 30 percent of their income
toward rent and utilities. Not withstanding these programs, the City of Carlsbad's
Comprehensive Housing Affordability Strategy (CHAS) shows that there are still
approximately 3,051 low-income renter households living within the City who are in
need of rental assistance. While rent burden is a struggle for any family, it is
particularly troublesome for a family whose head-of-household or spouse is enrolled
in an approved educational or job training program. For that reason, assistance under
the HOME program will be targeted to those families that demonstrate a commitment
to self-sufficiency.
Once the program plan contained herein is approved and the HOME funds are made
available, the Housing Authority will notify eligible applicants about the availability of
this program through a variety of outreach efforts which conform with affirmative
marketing procedures.
SECTION 2: FINANCIAL AND IMPLEMENTATION PLAN
2.1 Budget
HOME Funds -The $1 million in HOME funds will be used to subsidize 100 families
in FFY 94 and 95. Five percent of those funds, $50,000, will be used to offset the
administrative expenses of operating the program.
1
Unit Mo. Unit Yr. Two Year
Families Subsidy Subsidy Total
HOME Allocation 80 460 5,938 950,000
Set-Aside -Rental Assistance 20 460 5,938 250,000
Administrative Costs 50,000
Total 1,250,000
Matching Funds -The City of Carlsbad will contribute $250,000 in matching funds
from its Redevelopment Low and Moderate Income Housing Set-Aside account. Those
funds will allow us to subsidize an additional 20 families with tenant-based rental
assistance in FFY 94 and 95.
Other Resources -In the case of participants who are engaged in self-sufficiency
activities, every effort will be made to link their housing needs with assistance from
appropriate social service agencies.
Additional Resources -The Housing Authority of the City of Carlsbad currently
administers two tenant-based rental assistance programs, the Section 8 Certificate and
Housing Voucher Programs. Staff will be able to draw upon its experience in the
administration of those programs while administering the HOME tenant-based rental
assistance program.
2.2 Time line
Notification to the Waiting List of the availability of HOME funds will occur upon
approval of the program plan.
Based upon previous experience, the leasing plan is as follows:
1st Otr.
15
2nd Otr.
20
SECTION 3: PROGRAM PLAN
3.1 Summary
3rd Otr.
35
4th Otr.
30
The purpose of this program is to provide rental assistance to 100 low-income
families, using $1 million of the City's FFY 94 and 95 HOME allocation and $250,000
2
of the City's Redevelopment Low and Moderate Income Housing Set-aside funds. The
program will be administered by the Housing Authority of the City of Carlsbad. The
design of the program will be similar to the Section 8 Certificate and/or Housing
Voucher Program (see program comparison chart). The Housing Authority is currently
responsible for managing 4 73 Section 8 Certificates and/or Housing Vouchers.
The proposed distribution of units to be leased by bedroom size is as follows:
1BR
25
2BR
50
3BR
25
This total number of units anticipated to be assisted ( 100) provides for a financial
cushion against contingencies such as an increase in the payment standards or
decreases in the income of participating families.
3.2 Beneficiaries
Rental assistance will be provided to approximately 100 eligible HOME-assisted
participants for a two year period. Priority will be provided to those families whose
head of household or spouse is enrolled in an educational or job training program.
Once the Waiting List has been exhausted of the targeted families, other applicants,
in Waiting List priority and date and time of application, will be screened for HOME-
assisted eligibility.
3.3 Tenant Eligibility
All participants of the HOME program will come from the Section 8 Waiting List.
Priority will be given to those very low income families who have a Federal Preference,
local priority and are engaged in self-sufficiency activities.
When HOME assistance expires, tenants selected from the Waiting List may return to
the Waiting List and qualify for the same tenant selection preferences as when they
were selected for HOME assistance. In any case, where assistance under the Section
8 program becomes available to the Housing Authority, recipients of HOME-funded
tenant-based rental assistance will qualify for Section 8 assistance to the same extent
as when they received the HOME funded assistance.
Participants of the HOME program will be required to maintain residence within the
boundaries of the City of Carlsbad. If the participant elects to move out of the City
he/she would forfeit the rental assistance.
3
3.4 Housing Quality Standards
Housing Units occupied by a family receiving HOME tenant-based rental assistance
must meet the Housing Quality Standards (HOS) as outlined in 24 CFR 882. 109.
Those are the same standards used in the administration of the Section 8 Program.
A list of those standards is available through the Housing Authority.
Cooperative housing units are prohibited from participation in the HOME program.
3.5 Rent Reasonableness
A lease for a participating family will be approved if the rent requested is reasonable
when compared to rents that .are charged for comparable unassisted rental units in the
neighborhood.
3.6 Payment Procedures
The Fair Market Rents (FMR), as established by HUD, effective October 1, 1992, are
as follows:
1BR
618
2BR
725
3BR
908
The HOME tenant-based assistance program will use the payment standard as set
forth in the Section 8 Voucher program. The payment standards are as follows:
1BR
583
2BR
684
3BR
857
Participants in the program will have the ability to pay up to the difference between
the "rent standard" and 30% of the family's monthly adjusted income. However, the
participant must pay a minimum of $50.00 per month toward rent and utilities. The
Housing Authority will pay the difference between the contract rent and the tenant's
contribution to the landlord. Payment of assistance shall be provided directly to
owners of units which have passed the HOS inspection and are occupied by families
participating in the HOME tenant-based rental ass_istance program.
Participants will pay a security deposit equal to the lesser of (a.) two months "total
tenant payment" (30% of monthly adjusted income), or (b.) one month's contract
rent. In no case will the security deposit be less than $100.00. The HOME program
will not be responsible for damage or abuse to the unit beyond the security deposit.
4
3. 7 Terms of Rental Assistance Contract
Provided the HOME program is funded bi-annually, tenant-based rental assistance will
be provided in two year terms. The assistance given to eligible tenants will be
renewed upon expiration of the contract and availability of funds with a demonstrated
continued need for assistance. The contract for assistance will be between the
Housing Authority and the landlord. Because the assistance is tenant-based, the
contract may terminate upon expiration of the tenant's lease.
3.8 Termination of Assistance
Grounds for denial or termination of assistance under the HOME tenant-based
assistance program are the same as outlined in 24 CFR section 883.210. Those are
the same termination procedures used by the Section 8 Program. Additionally, the
Housing Authority may terminate assistance if the tenant is evicted by the landlord for
cause. Termination must occur if the tenant's income goes above the Section 8 lower
income limit at the annual recertification date.
An owner may not terminate the tenancy or refuse to renew the lease of a tenant
assisted with HOME funds except for serious or repeated violations of the terms and
conditions of the lease.
SECTION 4: PROHIBITED LEASE PROVISIONS
• Agreement to be sued. Agreement by the tenant to be sued, admit guilt, or to
a judgement in favor of the owner in a lawsuit brought in connection with the lease.
• Treatment of Property. Agreement by the tenant that the owner may take, hold
or sell personal property of household members without notice to the tenant and a
court decision on the rights of the parties. However, this prohibition does not apply
to an agreement by the tenant concerning disposition of personal property remaining
in the housing unit after the tenant has moved out of the unit. The owner may
dispose of this personal property in accordance with State law.
• Excusing the owner from responsibility. Agreement by the tenant not to hold
the owner or the owner's agents legally responsible for actions or failures to act,
whether intentional or negligent.
• Waiver of notice. Agreement by the tenant that the owner may institute a
lawsuit without notice to the tenant.
5
• Waiver of legal proceedings. Agreement by the tenant that the owner may evict
the tenant or household members without instituting a civil court proceeding in which
the tenant has the opportunity to present a defense or before a court decision on the
rights of the parties.
• Waiver of a jury trial. Agreement by the tenant to waive any right to a jury trial.
• Waiver of right to appeal court decision. Agreement by the tenant to waive the
tenant's right to appeal or to otherwise challenge in court a decision in connection
with the lease.
• Tenant chargeable with cost of legal actions regardless of outcome. Agreement
by the tenant to pay attorney fees or other legal costs even if the tenant wins the
court proceeding by the owner against the tenant. The tenant, however, may be
obligated to pay costs if the tenant loses.
SECTION 5: RECORD KEEPING
In accordance with HOME regulations, the following records are required for each unit
which receives a subsidy on behalf of an eligible tenant:
1 . Records demonstrating that the unit meets housing quality standards.
2. Records demonstrating that the unit meets the rent reasonableness
standards.
3. Records demonstrating compliance with the city's HOME affirmative
marketing and fair housing policies.
4. All other requirements which may be applicable pursuant to HOME
guidelines.
SECTION 6: MONITORING
In accordance with HOME regulations, each unit which receives a subsidy on behalf
of an eligible tenant must be monitored as follows:
1. Annual recertification of tenant income and eligibility requirements.
2. Annual review of rent and utility allowances.
3. Annual on site ·housing quality inspections.
4. Annual review of owner compliance.
6
Maximum Rents
Family Share of Rent
Utility
Reimbursement or
"Negative Rent"
PROGRAM COMPARISONS
SECTION 8 CERTIFICATESNOUCHERS AND HOME RENTAL ASSISTANCE
ce5\,-1F1cit~s • • •
The PHA may not approve rents in excess of
the HUD-approved Fair Market Rent
Limitations.
PH As have limited exception rent authority.
PHAs must also determine that the rent
charged is reasonable in comparison to rents
charged for comparable unassisted units.
Families pay the greater of
30% of adjusted income
• 10% of gross income
Welfare rent in as-paid states for
rent and tenant-paid utilities.
Families may not elect to pay more and may
not make side payments to the owner.
Because the family's share is intended to
cover both rent and utilities some very low
income families receive a utility
reimbursement.
Example:
$400 Rent to Owner
$ 50 Tenant-paid utilities
$ 35 30% of adjusted income
PHA pays the full rent to the owner and
sends a $1 5 utility reimbursement to the
tenant.
HOP$1N~ VQUCHE~$/
There is no Fair Market Rent limitation for
Housing Vouchers. The PHA sets a
Payment Standard (which must be equal to
or less than the FMR) used to compute the
tenant subsidy.
PHA determination of rent reasonableness
is optional. PHA's may not reject a unit
because it is too expensive for the family.
Families may choose housing that rents for
more or less than the Payment Standard
and therefore pay more or less than 30%
of adjusted income.
The family may never pay less than 10%
of gross income.
Although the calculation works slightly
differently, a utility reimbursement is also
possible for the Housing Voucher Program.
Page 1 of 3
• CARLS13AD HBME ••
'l'ENAl\l'f;.IJASED ~$SISTANCI;
Payment standard not less than
80% of the published FMR.
PHA must determine that rent
charged is reasonable in
comparison to rents charged for
comparable unassisted units.
Same as Vouchers.
• The family may never
pay less than $ 50
toward rent.
The Housing Authority does not
make a utility reimbursement
payment.
• Home Requirement
PROGRAM COMPARISONS
SECTION 8 CERTIFICATESNOUCHERS AND HOME RENTAL ASSISTANCE Page 2.of 3
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CERTIFICATES
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... ··..... TQPIC .·.·.·· .. I. . .. .·. •... :: ... ••.•. •·· . . .· TENANT~BASED ASSISTANCE ... " .... ' ..
Rent Increases Rent increases are approved by the PHA Rent increases are not limited by the Same as Vouchers.
using an Annual Adjustment Factor Annual Adjustment Factor but may be
published by HUD and a rent reasonableness subjected to a rent reasonableness test.
test.
Security Deposit Families pay the greater of $50 or the PHA's may use the same formula as for Tenant pays security deposit
family's Total Tenant Payment, established Certificates or adopt a different formula up equal to the lesser of two times
by formula. to one month's rent. the Total Tenant Payment or
one month's rent.
PHA Liability for Because the program mandates a reduced The PHA is liable for up to one month's The Housing Authority assumes
Damages and Unpaid security deposit the PHA is liable for up to Contract Rent minus the security deposit no responsibility for damages,
Rent two months contract Rent minus the the owner collected or could have unpaid rent or vacancy loss.
security deposit the owner collected or collected.
could have collected.
PHA Liability for Owners may retain the HAP payment for the Owners may retain the HAP payment for Same as Vouchers.
Vacancy Losses month in which the family vacates and claim the month in which the family vacates
80% of the contract rent for the following without notice but may not make any
month if the tenant left without notice and additional claims, even if the unit is not re-
the unit is not re-rented. rented.
Portability Tenant may use the certificate anywhere in Tenant may use the Voucher anywhere in Tenant may use the assistance
the State of California. the United States. within the City of Carlsbad.
Length of Tenancy Terminates when ACC expires (Federal Same as Certificate. • Maximum of 2 years
(assuming all other Funds) could extend with new
eligibility factors are allocation of funds.
II met)
• Home Requirement
Termination of
Assistance
(assuming all other
eligibility factors are
met)
Preferences
Types of Housing
PROGRAM COMPARISONS
SECTION 8 CERTIFICATESNOUCHERS AND HOME RENTAL ASSISTANCE
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CERTIFICATES HOUSING \i.C>UCliERS
Eviction by the owner for cause does not I Same as Certificate.
necessarily mean that the family's right to
Section 8 Assistance is terminated. As long
as the family is in compliance with their
agreement with the PHA, they remain
eligible for assistance.
A preference is given to those families on
the waiting list who:
1. Pay more than 50% of income
toward rent.
or
2. Live in substandard housing or are
homeless.I
or
3. Displaced by natural disaster or
government action.
Also local residency and veteran, status.
Eligible housing types include:
Single family homes, townhouses,
apartments, condominiums, duplexes,
cooperative housing units, mobile homes,
bungalows, independent group homes, SRO
and managed living units.
Same as Certificate.
Same as Certificate with the exception of
mobile home spaces (pad).
Page~ of 3
CARLSBAD HOME
TENANT•BASEO ASSISTANCE
Eviction by the owner for cause
may be grounds for termination
of assistance.
• Additionally, if a tenants
income goes above the
Section 8 lower income
limit at recertification,
assistance must be
terminated.
Same as Certificate.
Additionally, preference is given
to those whose head of
household or spouse is enrolled
in an approved educational or
job training program.
• Same as Certificate with
the exception of
cooperative housing
units.
• Home Requirement