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Home My WebLink About19F - HOUSING QRTLY RPTREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: NOVEMBER 20, 2018 TITLE: RECEIVE AND FILE THE QUARTERLY REPORT FOR HOUSING DIVISION PROJECTS AND ACTIVITIES JULY 2018 — SEPTEMBER 2018 {STRATEGIC PLAN NO. 5, 3} RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 181 Reading ❑ Ordinance on 2ntl Reading ❑ Implementing Resolution ❑ Set Public Hearing For CONTINUED TO FILE NUMBER Receive and file the Quarterly Report for Housing Division Projects and Activities for the period of July 2018 — September 2018. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION At a Meeting on October 24, 2018, by a vote of 7:0, the Community Redevelopment and Housing Commission approved the recommended action. DISCUSSION This report for the quarter ending on September 30, 2018 provides statistics for all of the affordable housing projects and activities for the Housing Division. The report is divided into three sections: Loan Activity, Loan Portfolio Management and Monitoring, Affordable Housing Funds and Commitments, and Development Projects. Loan Activity Applications The Housing Division offers several different programs including down payment assistance for first-time homebuyers and rehabilitation loans for mobile homes, single-family, multi -family, and historic homes. Inquiries are received from the public and applications are mailed out, received and approved for these programs on a continual basis. Table 1 shows the number of inquiries, applications sent out, received and approved by type for the quarter and for the total fiscal year. 19F-1 Quarterly Report for Housing Division November 20, 2018 Page 2 Table 1: Applications Sent Out, Received & Approved Program Q1 Inquiries Total FY Applications Sent Out Q1 Total FY Applications Received Q1 Total FY Applications Approved Q1 Total FY Single -Family Rehabilitation 31 31 31 31 2 2 1 1 Mobile Home Rehabilitation 2 2 2 2 0 0 1 1 Multi -Family Rehabilitation 0 0 0 0 0 0 0 0 Historic Home Restoration 0 0 0 0 0 0 0 0 Homeownership 15 15 15 15 3 3 3 3 The number of applications received is typically lower than the number of applications sent out in any given period due to the stringent program guidelines for eligibility regulated by the Federal government, which makes it difficult for most applicants to qualify. In order to improve the success rate of applications for the various programs listed above (Single -Family, Mobile Home, Multi -Family, Historic Home Restoration and Homeownership), staff will enhance and expand targeted marketing efforts for the programs after a full-time Housing Analyst is hired by the City. Rehabilitation Loan Underwriting and Approval Progress For the rehabilitation loans, staff reviews applicant eligibility, verifies income and assets, and oversees underwriting to ensure compliance with program guidelines and requirements established by the funding source. In addition, staff conducts an inspection of the property, prepares a work write-up to determine rehabilitation work to be performed, and develops a budget for the work. Due to the complex funding requirements, applications may be in underwriting for several months. The length of time in underwriting is largely determined by the applicant's timely submittal of the necessary paperwork. Once approved, staff prepares all necessary loan documents, makes arrangements for loan execution, and reserves the required loan funds. During this quarter, one (1) mobile home loan was approved, one (1) Habitat for Humanity home buyer was approved, three (3) inclusionary housing purchases at City Ventures were approved and closed escrow, and three (3) Habitat for Humanity buyers closed escrow. Rehabilitation Program Construction Progress During this phase, homeowners receiving rehabilitation loans are guided through an open selection of contractors to complete the work on their homes. Each homeowner is given a list of contractors that have been screened by staff for license and insurance requirements. However, homeowners are allowed to select any contractor that meets these same requirements. Staff assists the homeowners with the evaluation of bids and selection of a contractor. Staff also monitors the construction work, approves payments to contractors, and tracks expenditures to ensure compliance with the loan agreement and program guidelines. At the end of this quarter, there were two (2) homeowner rehabilitation projects out to bid and two (2) under construction. Down Payment Assistance Loan Program Progress For the Down Payment Assistance Loan Program, staff evaluates applicant eligibility and oversees underwriting to ensure compliance with program guidelines and requirements established by the U.S. Department of Housing and Urban Development (HUD). Applicants must meet established income requirements, complete an eight-hour pre -purchase counseling program from a HUD -approved housing counseling agency, be pre -qualified for a first mortgage 19F-2 Quarterly Report for Housing Division November 20, 2018 Page 2 and have a minimum of three percent of the purchase price from their own savings. Other HUD requirements apply, including a current maximum sales price of $513,000 for a single family home or condo. On March 6, 2018, City Council approved an update to the Down Payment Assistance Loan Program increasing the loan amount to $80,000 for low income households and approving the use of the Inclusionary Housing Fund to offer down payment assistance of up to $40,000 for moderate income households. The updated program requires the buyer must be a current resident of Santa Ana or work in Santa Ana at least 32 hour per week (except U.S Military Veterans). Additionally, the property needs to be in good condition and pass an inspection. During this quarter, staff conducted one (1) down payment assistance workshop in which a total of 15 people attended. During this quarter, three (3) down payment assistance applications were approved and one of the three closed escrow. Loan Portfolio Management & Monitoring The Housing Division is responsible for managing the residential loan portfolio which includes all of the loans entered into by the City and Housing Authority acting as the Housing Successor Agency. As of the end of this quarter, the principal balance was $129,598,547. This is comprised of 408 loans of which 384 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $182,757 in payments of principal and interest during this quarter. Table 2: Portfolio Revenue Monitoring As part of the requirements for these funds, staff must monitor the owner -occupancy of single family homes that have received loans, and the building code compliance of units in rental projects with long-term affordability covenants. During this quarter, 38 owner -occupancy recertification letters were mailed and 19 were returned and processed. Staff also audited files for twenty loans (20) loans and conducted building code compliance inspections for 3 units in one (1) project. Regulations require that only a sample of units be selected for inspection. Staff also inspects the grounds and common areas such as laundry rooms to ensure they also meet municipal code requirements. The grounds, common areas and all of the inspected units were found to be in compliance at the time of initial inspection. 19F-3 Funding Sources HOME CDBG Redevelopment NSP CaIHOME Loan Payoffs $37,239 $0 $0 $47,932 $0 Residual Receipts $5,405 $0 $50,173 $11,992 $0 Payments Amortized Loan $5,081 $4,926 $20,008 0 $0 Payments Total For Q1 $47,725 $4,926 $70,181 $59,924 $0 Monitoring As part of the requirements for these funds, staff must monitor the owner -occupancy of single family homes that have received loans, and the building code compliance of units in rental projects with long-term affordability covenants. During this quarter, 38 owner -occupancy recertification letters were mailed and 19 were returned and processed. Staff also audited files for twenty loans (20) loans and conducted building code compliance inspections for 3 units in one (1) project. Regulations require that only a sample of units be selected for inspection. Staff also inspects the grounds and common areas such as laundry rooms to ensure they also meet municipal code requirements. The grounds, common areas and all of the inspected units were found to be in compliance at the time of initial inspection. 19F-3 Quarterly Report for Housing Division November 20, 2018 Page 3 Available Funds and Land Assets for Affordable Housing Development Projects The City of Santa Ana and the Housing Authority acting as the Housing Successor Agency manages multiple sources of local, state and federal funds to promote and facilitate the development of affordable housing as well as land assets held by the Housing Successor Agency. Exhibit 1 provides a summary of the funds available as of the end of this quarter. Exhibit 2 provides a summary of available land assets. Housing Opportunity Ordinance All in -lieu fees, penalties and other monies collected pursuant to the Housing Opportunity Ordinance, including interest, are deposited into the Inclusionary Housing Fund. Since inception, the Inclusionary Housing Fund has generated $13,885,436 to be used for the development of housing affordable to low and moderate income households, with a reasonable amount spent on administrative or related expenses associated with the administration of the Housing Opportunity Ordinance. To date, the Inclusionary Housing Fund has invested $6,075,000 towards the development of 107 affordable rental housing units in the City. In regards to affordable ownership housing units, a total of 23 inclusionary affordable homes have been produced and/or are under construction as a result of the Housing Opportunity Ordinance. Projects Under Development Below are brief summaries for projects under development. Exhibit 3 provides a development timeline for the larger development projects including the Santa Ana Arts Collective, First Street Apartments, Santa Ana Veterans Village, Aqua Housing, and Tiny Tim Plaza. For Sale Infill Housing (4010 - 4026 E. McFadden Street) • Developer: Habitat for Humanity of Orange County • Description: Acquisition and new construction project comprised of five (5) affordable single- family homes to be sold to qualified low- to moderate -income buyers. • City Funds: Land provided by the Redevelopment Agency • Status: Three (3) homes closed escrow and are occupied. One (1) homebuyer has been approved and escrow is pending. A buyer for the last home is pending approval. Santa Ana Arts Collective (1666 N. Main Street) • Developer: Meta Housing Corporation • Description: Acquisition, adaptive reuse and new construction project comprised of 57 affordable rental units designated for professional artists of all disciplines, and 1 manager's unit. Permanent supportive housing for 10 units will be funded by HHSA/SNHP finds from the County of Orange. • City Funds: Inclusionary Housing ($5,275,000), HOME ($2,627.631), CDBG ($500,000) • Update: Construction is approximately 22% complete with occupancy now expected in August 2019. 19F-4 Quarterly Report for Housing Division November 20, 2018 Page 4 First Street Apartments (1440 E. First Street) • Developer: AMCAL Multi -Housing, LLC. • Description: Demolition and new construction of an affordable multifamily apartment complex consisting of 68 units of rental housing serving very -low and extremely -low income families, and 1 manager's unit. • City Funds: Housing Successor Agency ($8,522,740) • Update: Building foundations are underway. The developer declined the eight (8) project based vouchers that were committed to the project. Santa Ana Veterans Village (3312 W. First Street) • Developer: Jamboree Housing Corporation with Step Up on Second as the service provider • Description: New construction of an affordable multifamily apartment complex consisting of 75 units of permanent supportive housing with wrap-around supportive services for HUD -Veterans Affairs Supportive Housing (VASH) eligible homeless veterans in the City of Santa Ana, and 1 manager's unit. • City Funds: 75 HUD-VASH Project -Based Vouchers ($9,790,000), HOME-CHDO ($352,963) • Update: On June 13, 2018, Jamboree Housing was awarded 9% low-income housing tax credits for the project. Following this award, Jamboree plans to close on their financing before the end of the calendar year and break ground early next year. Aqua Housing (317 E. 17th Street) • Developer: Community Development Partners (CDP) with Mercy House as the service provider • Description: Acquisition, demolition and new construction of a former motel yielding 56 units of affordable permanent supportive housing with wrap-around supportive services for chronically homeless individuals in the City of Santa Ana, and 1 manager's unit. • City Funds: 56 Project -Based Vouchers ($9,237,900) • Update: CDP was successful in securing an award of $7,035,800 in Special Needs Housing Program funds from the County of Orange and $1,941,000 in Infill Infrastructure Grant Program funds from the California Department of Housing and Community Development. CDP was allocated noncompetitive 4% low income housing tax credits on October 17, 2018 and expects to close on their financing before the end of the calendar year. CDP has begun reviewing full construction drawings and design with the City's Planning Department and hopes to break ground early next year. Tiny Tim Plaza (2223 West 5th Street) • Developer: Community Development Partners. • Description: New construction of an affordable multifamily apartment complex consisting of 51 units of rental housing serving very -low and extremely -low income families, and 1 manager's unit. • City Funds: Inclusionary Housing ($1,300,000), Housing Successor Agency ($4,700,000) • Update: After being placed on a Waiting List, on October 23rd CDP was awarded 9% tax credits. With this 9% award, CDP expects to close on their financing within the next 6 months. NSP 1. 2 and 3 Programs The City is seeking proposals for $1,239,599 in NSP Program funds available in the Request for Proposals. 19F-5 Quarterly Report for Housing Division November 20, 2018 Page 5 Request for Proposals - RFP #18-056 -Affordable Housing Development The City of Santa Ana and the Housing Authority of the City of Santa Ana issued a Request for Proposals (RFP) on July 2, 2018 for the development of affordable housing in the City. Proposed developments may be for acquisition and/or rehabilitation of eligible properties for rental or transitional housing; acquisition and conversion of non-residential property to multifamily rental units; and/or new construction of housing units for rental housing. Land assets owned by the Housing Authority of the City of Santa Ana are also available for development under the RFP. Additional information regarding the RFP is available on the City of Santa Ana's website. The City of Santa Ana received thirteen (13) proposals that passed a minimum threshold review. The proposals are currently being reviewed by a Review Panel of City employees. Interviews took place on October 30, 2018 and a recommendation from the panel was made on November 5, 2018. STRATEGIC PLAN ALIGNMENT The activities covered by this report allow the City to meet Goal # 5 - Community Health, Livability, Engagement & Sustainability, Objective # 3 (Facilitate diverse housing opportunities and support efforts to preserve and improve the livability of Santa Ana neighborhoods). FISCAL IMPACT There is no fiscal impact associated with this action. P- v ,, Steven A. Mendoza Executive Director Community Development Agency Exhibits: 1. Available Funds for Affordable Housing Development Projects 2. Available Land Assets for Affordable Housing Development 3. Project Timelines 19F-6 Exhibit 1 Available Funds for Affordable Housing Development Projects As of September 30, 2018 Housing Successor Agency (Housing Authority) $5,991,327 Cash on Hand ($85,227) First Street Apartments Loan' ($168,754) First Street Apartments Project Costs ($4,700,000) Tiny Tim Plaza Conditional Pre -Commitment Loan 2 ($250,000) Habitat for Humanity Disposition and Development Agreement ($250,000) Administrative Costs Allowance 3 $532,601 Repayment of Loan from Successor Agency $1,069,947 Available Funds Inclusionary Housing Funds $8,783,718 Cash on Hand ° ($348,047) Santa Ana Arts Collective Project Costs 5 ($1,300,000) Tiny Tim Plaza Conditional Pre -Commitment Loan 2 ($483,423) Administrative Costs Allowance (CDA/PBA) ($360,000) Down Payment Assistance Program 5 ($3,121,700) Interim Emergency Homeless Shelter Agreement 7 $3,170,547 Available Funds HOME Program $3,053,929 Funds to Drawdown $3,053,929 Available Funds to Drawdown CDBG Program (Acquisition/Rehabilitation Projects Only) $1,687,047 Funds to Drawdown $1,687,047 Available Funds to Drawdown NSP Program (Abandoned, Foreclosed or Vacant Properties Only) $1,239,439 Funds to Drawdown ($327,265) Administrative Costs Allowance $912,174 Available Funds to Drawdown $9,893,645 Total Available Funds 1 Approved by Housing A=ority on January 16, 2018. W% of loan paid on March 13, 2016;10%remaining to be paid upon completion of construction. ° Approved by City CounuVHousing Authority on June 20, 2017. ° The Housing Successor Agency relies on available cash to fund Me monitoring and compliance ancgons related to to former Redevelopment Agency's housing loans. 4 PR Broadstone Heritage Holdings, Phase 11 paid a-ieu fees in the amount of 53,322,129.80 in July 2018. ° Project costs any; 34.81A in loans approved by City Council paid on July 26, 2017. ° $400,000 originally approved by City Council on Month G. 2018. One loan paid in September 2018. Approved by CM Council on September 18, 2018. Agreement with Mercy House Elvin Centers, Inc. Only first year commitment reflected here 19F-7 19F-8 EXHIBIT 2 AVAILABLE LAND ASSETS FOR AFFORDABLE HOUSING DEVELOPMENT (1) 302 E. Twenty -Second Street a. APN: 003-122-25 b. Lot Size: 27,817sf c. Current Zoning: R1 Single -Family Residence, which allows one house per lot. d. Parcel was acquired 10/30/2002 using Low and Moderate Income Housing Asset Fund - 20% Set Aside. e. Previous Use: Purchased from Cal Trans. It was a remnant parcel from the freeway widening project. The site was vacant and undeveloped at the time it was acquired. f. General Plan: Low Density Residential, which allows single-family residences and ancillary uses. g. Maximum du/ac: Seven units per acre. h. Site Condition / Environmental Conditions: Property is irregular in shape, is below the minimum lot size for a residential lot, and will most likely require the approval of several variances from the zoning code in order to facilitate a residential unit. (2) 801, 809 & 809 % E. Santa Ana Blvd a. APN: 398-303-04 / 398-303-05 / 398-303-06 / 398-303-07 b. Lot Size: 15,OOOsf c. Current Zoning: SD -84 is the Transit Zoning / Code, which was approved in 2010. The sub -zoning for the site is Urban Neighborhood -2 (UN -2), which allows uses such as single and multi -family dwellings and retail provided the retail is integrated into a multi-level, mixed-use project. d. Parcel was purchased using Low and Moderate Income Housing Asset Fund - 20% Set Aside (801, 807, 809 & 809'/2). Includes 807 E. Santa Ana Blvd. e. Previous Use: i. 801 - Acquired 07/11/2003. Demolished single family dwelling in 2011. ii. 807 - Acquired 04/20/1994 through a foreclosure action. Demolished single family dwelling and detached garage in 2000. iii. 809 - Acquisition through Fannie Mae 3/19/1998. iv. 809 %2 - Acquisition through Fannie Mae 11/6/1998. Demolished two single- family dwellings 809 & 809'/2 in 1999. f. General Plan: Urban Neighborhood (UN), which is applicable to primarily residential areas with pedestrian oriented commercial uses. g. Maximum du/ac: Up to 30 units per acre. h. Site Condition / Environmental Conditions: This vacant lot also has alley access, which will facilitate parking at the rear of the site. (3) 826 N Lacy / 830 N. Lacy Street a. APN: 398-041-22 / 398-041-18 b. Lot Size: 8,843sf / 7,405sf c. Current Zoning: SDI - this property is located within the French Park Historic District. d. Parcel was purchased using Low and Moderate Income Housing Asset Fund - 20% Set Aside (both parcels) e. 826 - Acquired 10/24/1990. f. Previous Use: 830 was formerly 412 E. Vance Street. Acquired 10/20/1994. Demolished a six -unit apartment building and garage in 1995. g. General Plan: Low Density Residential, which allows single-family residences and ancillary uses. h. Maximum du/ac: Seven units per acre. 19F-9 I,. Site Condition/ Environmental Conditions: This vacant site will need to comply with the design guidelines of the French Park Historic District and will require review by the French Park Design Committee. (4) 1126 81146 E. Washington Ave. a. APN:398-092-14 b. Lot Size: 62,347sf (1.43 Acres) c. Current Zoning: SD -84 d. Parcel was acquired 9/5/2007 using Low and Moderate Income Housing Asset Fund - 20% Set Aside e. Previous Use: Purchased from Cal Trans. Remnant parcel from freeway widening project. Cal Trans demolished five buildings on the site in the early 1990s. The site was vacant and undeveloped when it was acquired by the City. f. General Plan: District Center (DC), which is a designation that allows mixed-use development. g. Maximum du/ac: Up to 90 units per acre. h. Site Condition / Environmental Conditions: This property is located within the Transit Village sub -zoning district, which allows the most intense development within the SD - 84 district. Building types allowed include a Tuck Under product (3 stories/18 units per acre) up to a Tower on Podium (25 stories/90 units per acre). 19F-10 EXHIBIT 3 Current Affordable Housing Development Project Timelines Page 1 of 2 19F-11 Santa Ana Arts Collective -1666 N. Main Stllllllllll Jun -15 RFP Issued Nov -15 Approved HOME/CDBG Funds Mar -16 Submitted Application for AHSC (Cap & Trade Funds) Sep -16 Awarded AHSC (Cap & Trade) Funds Nov -16 9% Low -Income Housing Tax Credits Awarded Dec -16 Relocation Plan Approved Jul -17 Final Loan Approved/ Close of Escrow Jul -17 Planning Entitlements Approved Jul -17 Building Permits Pulled/Construction Initiated Apr -19 Anticipated Construction Completion Aug -19 Revised Project Completion Date *(Foundation/Building SeismicAdjustments) Page 1 of 2 19F-11 First Street ApartmentsMZ4.'4 01 E I First 5t Oct -15 Developer Submitted Request for Funds to CDA Apr -16 Planning Entitlements Approved Jun -17 Awarded Successor Agency Funds Jun -17 Relocation Plan Approved Sep -17 9% Low -Income Housing Tax Credits Awarded Jan -18 -Final Housing Authority Loan Approved Mar -18 Close of Escrow Mar -18 Construction Initiated Aug -19 Anticipated Construction Completion Page 1 of 2 19F-11 Santa Ana Veterans Village -33 L2 W -First St Dec -16 RFP Issued for PBVs Apr -17 Approved HUD VASH PBVs Jun -17 Awarded HOME CHDO Funds Jun -17 Planning Entitlements Approved Jan -18 Awarded County Special Needs Housing Funds Feb -18 Submittal of 9% Low -Income Housing Tax Credit Application Jun -18 Award of 9% Low -Income Housing Tax Credits Dec -18 Anticipated Close of Escrow Feb -19 Anticipated Construction Initiated Mar -20 Anticipated Construction Completion Page 1 of 2 19F-11 Dec -16 Aqua Housing - 317 E. 17th St RFP Issued for PBVs Apr -17 Approved PBVs Jun -17 Planning Entitlements Approved Jun -17 Approved Additional PBVs Jan -18 Awarded County Special Needs Housing Funds Jan -18 Submitted Application for HCD Infill Infrastructure Funds Jun -18 Award of HCD Infill Infrastructure Funds Aug -18 Submittal of 4% Low -Income Housing Tax Credit Application Oct -18 Allocation of 4% Low -Income Housing Tax Credits Jan -18 Anticipated Close of Escrow Feb -19 Anticipated Construction Initiated Page 2 of 2 19F-12 Tiny Tim Plaza - 2223 W. Sth St Dec -16 Developer Submitted Request for Funds to CDA Jun -17 Awarded City and Housing Successor Agency Funds Jan -18 Planning Entitlements Approved Jul -18 Submittal of 9% Low -Income Housing Tax Credit Application Oct -18 Award of 9% Low -Income Housing Tax Credits Page 2 of 2 19F-12