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Home My WebLink AboutItem HA 3 - Housing Successor Annual Report for FY 2023-24') Community Development Agency www.santa-ana.org/community-development Item # 3 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report December 17, 2024 TOPIC: Housing Successor Annual Report FY 2023-24 AGENDA TITLE Housing Successor Annual Report for FY 2023-24 — Low- and Moderate -Income Housing Asset Fund RECOMMENDED ACTION Receive and file. GOVERNMENT CODE §84308 APPLIES: No DISCUSSION Pursuant to the Dissolution Act, on January 9, 2012 the City Council designated the Housing Authority as the Successor Housing Agency to the dissolved Community Redevelopment Agency of the City of Santa Ana (RDA). Effective February 1, 2012, the Housing Authority retained the housing assets, duties, functions, and obligations of the former RDA and continued to complete the housing development projects encumbered prior to the dissolution of the RDA. Senate Bill (SB) 341, signed by the Governor on October 1, 2013, amended the Health and Safety Code (HSC) Section 34176 and addresses functions to be performed by the housing successor agencies. This bill, effective January 2014, requires all housing successor agencies to provide an annual report to its governing body within six months after the end of the fiscal year, starting with FY 2013-14. Among the requirements is an independent financial audit of the Low- and Moderate -Income Housing Asset Fund (LMIHAF) and information regarding specific housing financial data and activities. The financial audit of the LMIHAF is included in the City's Annual Comprehensive Financial Report (ACFR) for FY 2023-24, as prepared by the Finance and Management Services Agency and posted on the City's website at www.santa-ana.org/financial-reports. Assembly Bill (AB) 1793, signed by the Governor on September 27, 2014, further amended HSC §34176.1 to require housing successor agencies to include additional information on homeownership units assisted by the former RDA or housing successor that are subject to covenants or restrictions. The FY 2017-18 annual report included this additional information and any changes that occurred in the last fiscal year are identified in the FY 2023-24 annual report (Exhibit 1). Housing Successor Annual Report FY 2023-24 December 17, 2024 Page 2 ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. FISCAL IMPACT There is no fiscal impact associated with this action. EXHIBIT(S) 1. Housing Successor Annual Report FY 2023-24 Submitted By: Michael L. Garcia, Executive Director of Community Development Approved By: Alvaro Nunez, City Manager EXHIBIT 1 HOUSING SUCCESSOR ANNUAL REPORT REGARDING THE LOW AND MODERATE INCOME HOUSING ASSET FUND FOR FISCAL YEAR 2023-2024 PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION 34176.1(f) FOR THE HOUSING AUTHORITY OF THE CITY OF SANTA ANA This Housing Successor Annual Report (Report) regarding the Low and Moderate Income Housing Asset Fund (LMIHAF) has been prepared pursuant to California Health and Safety Code Section 34176.1(f) and is dated as of December 17, 2024. This Report sets forth certain details of the Housing Authority of the City of Santa Ana (Housing Successor) activities during Fiscal Year 2023-2024 (Fiscal Year). The purpose of this Report is to provide the governing body of the Housing Successor an annual report on the housing assets and activities of the Housing Successor under Part 1.85, Division 24 of the California Health and Safety Code, in particular sections 34176 and 34176.1 (Dissolution Law). The following Report is based upon information prepared by Housing Successor staff and information contained within the independent financial audit of the Low and Moderate Income Housing Asset Fund, as incorporated in the City of Santa Ana's Annual Comprehensive Financial Report (ACFR) for Fiscal Year 2023-2024 (Fiscal Year) as prepared by CliftonLarsonAllen LLP (Audit), which Audit is separate from this annual summary Report; further, this Report conforms with and is organized into sections I. through XII., inclusive, pursuant to Section 34176.1(f) of the Dissolution Law: Amount Deposited into LMIHAF: This section provides the total amount of funds deposited into the LMIHAF during the Fiscal Year. Any amounts deposited for items listed on the Recognized Obligation Payment Schedule (ROPS) must be distinguished from the other amounts deposited. II. Ending Balance of LMIHAF: This section provides a statement of the balance in the LMIHAF as of the close of the Fiscal Year. Any amounts deposited for items listed on the ROPS must be distinguished from the other amounts deposited. III. Description of Expenditures from LMIHAF: This section provides a description of the expenditures made from the LMIHAF during the Fiscal Year. The expenditures are to be categorized. IV. Statutory Value of Assets Owned by Housing Successor: This section provides the statutory value of real property owned by the Housing Successor, the value of loans and grants receivables, and the sum of these two amounts. HOUSING AUTHORITY OF THE CITY OF SANTA ANA — FY 2023/24 Page 1 EXHIBIT 1 V. Description of Transfers: This section describes transfers, if any, to another housing successor agency made in previous Fiscal Year(s), including whether the funds are unencumbered and the status of projects, if any, for which the transferred LMIHAF will be used. The sole purpose of the transfers must be for the development of transit priority projects, permanent supportive housing, housing for agricultural employees or special needs housing. VI. Project Descriptions: This section describes any project for which the Housing Successor receives or holds property tax revenue pursuant to the ROPS and the status of that project. VII. Status of Compliance with Section 33334.16: This section provides a status update on compliance with Section 33334.16 for interests in real property acquired by the former redevelopment agency prior to February 1, 2012. For interests in real property acquired on or after February 1, 2012, provide a status update on the project. Vill. Description of Outstanding Obligations under Section 33413: This section describes the outstanding inclusionary and replacement housing obligations, if any, under Section 33413 that remained outstanding prior to dissolution of the former redevelopment agency as of February 1, 2012 along with the Housing Successor's progress in meeting those prior obligations, if any, of the former redevelopment agency and how the Housing Successor's plans to meet unmet obligations, if any. IX. Income Test: This section provides the information required by Section 34176.1(a)(3)(B), or a description of expenditures by income restriction for five year period, with the time period beginning January 1, 2014 and whether the statutory thresholds have been met. Information is provided covering the period of July 1, 2019 — June 30, 2024. X. Senior Housing Test: This section provides the percentage of units of deed -restricted rental housing restricted to seniors and assisted individually or jointly by the Housing Successor, its former redevelopment Agency, and its host jurisdiction within the previous 10 years in relation to the aggregate number of units of deed -restricted rental housing assisted individually or jointly by the Housing Successor, its former Redevelopment Agency and its host jurisdiction within the same time period. For this Report the ten-year period reviewed is January 1, 2014 to December 31, 2023. XI. Excess Surplus Test: This section provides the amount of excess surplus in the LMIHAF, if any, and the length of time that the Housing Successor has had excess surplus, and the Housing Successor's plan for eliminating the excess surplus. XII. Inventory of Homeownership Units: This section provides an inventory of homeownership units assisted by the former redevelopment agency or the Housing Successor that are subject to covenants or restrictions or to an adopted program that HOUSING AUTHORITY OF THE CITY OF SANTA ANA — FY 2023/24 Page 2 EXHIBIT 1 protects the former redevelopment agency's investment of moneys from the Low and Moderate Income Housing Fund pursuant to Section 33334.3(f). This Report is to be provided to the Housing Successor's governing body by December 31, 2024. The final audit opinion was presented at the December 3, 2024 City Council meeting. In addition, this Report and the former redevelopment agency's pre -dissolution Implementation Plans are to be made available to the public on the City's website (https://www.santa- ana.org/successor-agency-oversight-board/ .) AMOUNT DEPOSITED INTO LMIHAF A total of $317,160 was deposited into the LMIHAF during the Fiscal Year. Of the total funds deposited into the LMIHAF, a total of $0 was held for items listed on the ROPS. II. ENDING BALANCE OF LMIHAF At the close of the Fiscal Year, the ending balance in the LMIHAF was $4,061,524 of which $0 is held for items listed on the ROPS. III. DESCRIPTION OF EXPENDITURES FROM LMIHAF The following is a description of expenditures from the LMIHAF by category: Monitoring & Administration Expenditures $ 225,653 Homeless Prevention and Rapid Rehousing Services Expenditures $0 Housing Development Expenditures ➢Expenditures on Moderate Income Units $0 ➢ Expenditures on Low Income Units $0 ➢ Expenditures on Very -Low Income Units $0 ➢ Expenditures on Extremely -Low Income Units $1,491,252 ➢ Total Housing Development Expenditures $0 Total LMIHAF Expenditures in Fiscal Year $ 1,716,905 IV. STATUTORY VALUE OF ASSETS OWNED BY HOUSING SUCCESSOR IN LMIHAF Under the Dissolution Law and for purposes of this Report, the "statutory value of real property" means the value of properties formerly held by the former redevelopment agency as listed on the housing asset transfer schedule approved by the Department of Finance as listed in such schedule under Section 34176(a)(2), the value of the properties transferred to the Housing Successor pursuant to Section 34181(f), and the purchase price of property(ies) purchased by the Housing Successor. Further, the value of loans and grants receivable is included in these reported assets held in the LMIHAF. HOUSING AUTHORITY OF THE CITY OF SANTA ANA — FY 2023/24 Page 3 EXHIBIT 1 The following provides the statutory value of assets owned by the Housing Successor. V. DESCRIPTION OF TRANSFERS The Housing Successor did not make any LMIHAF transfers to other Housing Successor(s) under Section 34176.1(c)(2) during the Fiscal Year. VI. PROJECT DESCRIPTIONS The following is a description of project(s) for which the Housing Successor receives or holds property tax revenue pursuant to the ROPS as well as the status of the project(s): N/A All former projects on the ROPS have been completed. VII. STATUS OF COMPLIANCE WITH SECTION 33334.16 Section 34176.1 provides that Section 33334.16 does not apply to interests in real property acquired by the Housing Successor on or after February 1, 2012; however, this Report presents a status update on the project related to such real property. With respect to interests in real property acquired by the former redevelopment agency prior to February 1, 2012, the time periods described in Section 33334.16 shall be deemed to have commenced on the date that the Department of Finance approved the property as a housing asset in the LMIHAF; thus, as to real property acquired by the former redevelopment agency now held by the Housing Successor in the LMIHAF, the Housing Successor must initiate activities consistent with the development of the real property for the purpose for which it was acquired within five years of the date the DOF approved such property as a housing asset. HOUSING AUTHORITY OF THE CITY OF SANTA ANA — FY 2023/24 Page 4 EXHIBIT 1 The following provides a status update on the real property or properties housing asset(s) that were acquired prior to February 1, 2012 and compliance with five-year period: Remnant parcels at Spurgeon & E. 22"d 10/30/2002 2/14/2018 St. 801, 809 & 809 '/2 E. 7/29/2009 2/14/2018 Santa Ana Blvd. This remnant parcel has been included in Request for Proposals ("RFP") # 18-056 issued on July 2, 2018; RFP # 19-063 issued on July 3, 2019; RFP # 21-136 issued on December 8, 2021; and RFP # 23- 156 issued on October 19, 2023. All of the RFPs have been issued for the development of affordable housing on this parcel. There has been no award from RFP # 23-156 at this time. On December 7, 2021, the Housing Authority entered into a 99-year Ground Lease with Shelter Providers of Orange County, Inc. DBA HomeAid Orange County for the development of the FX Residences, a multifamily affordable housing project with 16 units for people experiencing homelessness. In October 2022, the developer closed on their construction loan financing and a groundbreaking ceremony was held in June 2023. Construction officially started in July 2023. The anticipated completion date of the project is December 2024. HOUSING AUTHORITY OF THE CITY OF SANTA ANA — FY 2023/24 Page 5 EXHIBIT 1 826 N. Lacy 7/29/2009 2/14/2018 1126 & 1146 9/5/2007 2/14/2018 Washington On November 17, 2020, the Housing Authority entered into a 99-year Ground Lease for the development of two (2) affordable homeownership opportunities for moderate income families. In August 2022, Habitat held a groundbreaking ceremony and obtained all building permits to commence construction. The construction was completed in November 2023 and both homes have been sold to income qualified families. On July 25, 2022, the Housing Authority entered into a 65-year Ground Lease with Washington Santa Ana Housing Partners, L.P. for the development of the Crossroads at Washington, a multifamily affordable housing project with 86 units for extremely low-income families. Construction is underway and the anticipated completion date of the project is in September 2024. The following provides a status update on the project(s) for property or properties that have been acquired by the Housing Successor using LMIHAF on or after February 1, 2012: HOUSING AUTHORITY OF THE CITY OF SANTA ANA — FY 2023/24 Page 6 EXHIBIT 1 Vill. DESCRIPTION OF OUTSTANDING OBLIGATIONS PURSUANT TO SECTION 33413 Replacement Housing: According to the FY 2010 — FY 2015 Implementation Plan for the former redevelopment agency, the following replacement housing obligations were transferred to the Housing Successor: One (1) very -low income five -bedroom unit was removed in 2005. The replacement housing obligation transferred to the Housing Successor was fulfilled in a previous fiscal year with the WBBB project that accommodated a five -bedroom unit within the site. At the end of Fiscal Year 2022-2023, the Housing Successor has met all replacement housing obligations transferred from the former redevelopment agency. Inclusionary/Production Housing. According to the FY 2010 — FY 2015 Implementation Plan for the former redevelopment agency, no Section 33413(b) inclusionary/production housing obligations were transferred to the Housing Successor. The former redevelopment agency's Implementation Plans are posted on the City's website at https://www.santa-ana.org/successor- agency-oversight-board/ IX. EXTREMELY -LOW INCOME TEST Section 34176.1(a)(3)(B) requires that the Housing Successor must require at least 30% of the LMIHAF to be expended for development of rental housing affordable to and occupied by households earning 30% or less of the AMI. If the Housing Successor fails to comply with the Extremely -Low Income requirement in any five-year report, then the Housing Successor must ensure that at least 50% of the funds remaining in the LMIHAF be expended in each fiscal year following the latest fiscal year following the report on households earning 30% or less of the AMI until the Housing Successor demonstrates compliance with the Extremely -Low Income requirement. This information below is for the period of July 1, 2019 — June 30, 2024: AMI FY 2019/20 FY 2020/21 FY 2021/22 FY 2022/23 FY 2023/24 Totals 80% -120% $0 $0 $0 $0 $0 $0 50% - 80% $16,632 $0 $0 $0 $0 $16,632 30% - 50% $26,867 $0 $0 $0 $0 $26,867 0% -30% $43,499 $0 $0 $0 $1,491,252 $1,534,751 Totals $86,998 $0 $0 $0 $1,491,252 $1,578,250 % of Funds Expended on 30% or Less of AMI 50.00% 0.00% 0.00% 0.00% 100.00% 97.24% HOUSING AUTHORITY OF THE CITY OF SANTA ANA — FY 2023/24 Page 7 EXHIBIT 1 X. SENIOR HOUSING TEST The Housing Successor is to calculate the percentage of units of deed -restricted rental housing restricted to seniors and assisted by the Housing Successor, the former redevelopment agency and/or the City within the previous 10 years in relation to the aggregate number of units of deed -restricted rental housing assisted by the Housing Successor, the former redevelopment agency and/or City within the same time period. If this percentage exceeds 50%, then the Housing Successor cannot expend future funds in the LMIHAF to assist additional senior housing units until the Housing Successor or City assists and construction has commenced on a number of restricted rental units that is equal to 50% of the total amount of deed -restricted rental units. The following provides the Housing Successor's Senior Housing Test for the 10 year period of January 1, 2014 to December 31, 2023: # of Assisted Senior Rental Units 0 # of Total Assisted Rental Units 541 Senior Housing Percentage 0% XI. EXCESS SURPLUS TEST Excess Surplus is defined in Section 34176.1(d) as an unencumbered amount in the account that exceeds the greater of one million dollars ($1,000,000) or the aggregate amount deposited into the account during the Housing Successor's preceding four Fiscal Years, whichever is greater. The following provides the Excess Surplus test for the preceding four Fiscal Years: HOUSING AUTHORITY OF THE CITY OF SANTA ANA — FY 2023/24 Page 8 EXHIBIT 1 The LMIHAF does not have an Excess Surplus. (Refer to calculation below.) Fund Balance — June 30, 2023 Less Unavailable Amounts: Loans and notes Land held for resale Restricted cash and investments with fiscal agent Liabilities —Accounts payables & deposits Deferred inflows of revenues Project Commitments and Monitoring Available Low Income Housing Funds Limitation (Greater of $1,000,000 or Four Years Deposits): Aggregate amounts deposited for preceding four fiscal years 2020 — 2021 170,606 2021 — 2022 1,246,112 2022 —2023 483,734 2023 —2024 317,160 Total deposits for the preceding four fiscal years 2,217,612 Base limitation Greater Amount Computed Excess Surplus — June 30, 2024 1,000,000 XII. INVENTORY OF HOMEOWNERSHIP UNITS $26,737,288 (22,592,121) (75,000) (112,893) (2,882) (4,829) (735,964) 3,213,599 2,217,612 995,987 (A) As of June 30, 2024, there was a total of 54 homeownership units and 912 rental units subject to covenants or restrictions. Of this total, all 966 units had affordability restrictions. (B) During FY 2023-24, three (3) single family units were lost to the portfolio as the borrowers paid off the loans earlier than the original maturity date but two single family homes were added as a result of the sale of the two Habitat for Humanity homes. HOUSING AUTHORITY OF THE CITY OF SANTA ANA — FY 2023/24 Page 9 EXHIBIT 1 (C) There were no funds returned to the Housing Successor as part of an adopted program that protects the former redevelopment agency's investment of moneys from the former Low and Moderate Income Housing Fund in FY 2022-23. (D) The Housing Authority of the City of Santa Ana has not contracted with any outside entity for the management of the units. HOUSING AUTHORITY OF THE CITY OF SANTA ANA — FY 2023/24 Page 10