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HomeMy WebLinkAbout93-025 - Amending Resolution No. 92-063175 REL:~/4/9$ RESOLUTION NO. 93- 025 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA AMENDING RESOLUTION NO. 92-063 TO MAKE MINOR REVISIONS IN THE ANALYSIS OF ASSISTED HOUSING DEVELOPMENTS WHICH WAS ADDED TO THE HOUSING ELEMENT OF THE GENERAL PLAN BY SAID RESOLUTION WHEREAS, on June 15, 1992, this Council adopted its Resolution No. 92-063, amending the Housing Element of the General Plan to add an analysis of assisted housing developments, in accordance with 1989 Statutes, Chapter 1451; and WHEREAS, prior to the adoption of said Resolution No. 92-063, the Planning Commission and the City Council held duly noticed public hearings on the said General Plan amendment in accordance with the requirements of Chapter 27 of the Santa Ana Municipal Code; and WHEREAS, subsequent to the adoption of Resolution No. 92-063, the Housing and Community Development Department of the State of California (HCD) sent comments and recommended modifications to the analysis of assisted housing developments to the city; and WHEREAS, this Council now desires to incorporate the recommendations of HCD into the analysis of assisted housing developments; and WHEREAS, the modifications to the analysis of assisted housing developments recommended by HCD are of a minor and technical nature and do not require additional public hearings or additional review by the Planning Commission; and WHEREAS, a revised analysis of assisted housing developments, incorporating the recommendations of HCD, is attached hereto as Exhibit A, and is approved by this Council based on the public hearing previously held by the Planning Commission and this Council and on the previously given recommendation of the Planning Commission; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: 1. That section 2 Of Resolution No. 92-063 is hereby amended to read as follows: 2. That certain document entitled "City of Santa Ana, Preservation of Assisted Housing: Analysis and Programs, Draft Housing Element," in the form attached hereto as Exhibit A, is herebY approved and adopted as an · ~RESOLUTION 93-025 PAGE 2 addition to the Housing Element of the General Plan, and the Clerk of the Council is authorized and directed to attest to the same on the document. 2. That Resolution No. 92-063 is further amended by adding thereto an Exhibit A, in the form of Exhibit A, attached hereto and incorporated herein. ADOPTED this 15th ATTEST: / Clerk of the CounCil day of MARCH , 1992. D~a~l h. 'Youn~ I / Mayor ~ / COUNCILMEMBERS: Young ~ Pulido Aye Lutz Aye Mills Aye Moreno Aye Norton Aye Richardson Aye APPROVED AS TO FORM: City Attorney CERTIFICATE OF ORIGINALITY State of California County of Orange I, JANICE C. GUY, Clerk of the Council, do hereby certify the attached Resolution ~3-~ to be the original resolution adopted by the City Council of the City of Santa Ana on ~lerk of the C/oun~l, Date city of Santa Ana CITY OF SANTA ANA Preservation of Assisted Housing: Analysis and Programs Draft Housing Element Prepared By COMMUNITY DEVELOPMENT AGENCY AND PLANNING AND BUILDING AGENCY 20 CIVIC CENTER DRIVE SANTA ANA, CALIFORNIA 92702 (714) 667-2200 (714) 667-2700 Adopted by City Council June 15, 1992 Revised November 30, 1992 .78 TABLE OF CONTENTS ~;ection Introduction ...................................... Inventory of Units at Risk ............................. Cost Analysis/Comparison ............................. Resources for Preservation ............................ Quantified Objectives for Preservation ..................... Programs for Preservation ............................. Quantified Objectives by Target Income Group ................ .1 .3 .6 11 15 15 18 Tables 1 Assisted Affordable Housing Projects ............................ 7 2 Quantified Objectives of Housing Program ........................ 19 GENERAL PLAN AMENDMENT 92-1 PRESERVED HOUSING PROGRAM AND QUANTIFIED OBJECTIVES INTRODUCTION This report amends the Housing Element of Santa Ana's General Plan which was adopted on June 9, 1989, and subsequently determined by the California Department of Housing and Community Development to be in compliance with State law. The purpose of this amendment is to bring the Housing Element into compliance with a recent amendment of Government Code Section 65583. Under this law, jurisdictions must evaluate the potential for currently rent restricted low-income housing units to convert to non-low-income housing and propose programs to preserve or replace those units. In addition, local jurisdictions must also quantify their existing objectives to reflect targeted income levels. Recently, a great deal of attention has been focused on the existing stock of subsidized affordable housing and the potential loss of these units through the expiration of their affordability restrictions, or the prepayment of federally backed mortgages. In recognition of this threat to federally subsidized affordable housing, the Federal Emergency Low-Income Housing Preservation Act was enacted in 1988 .and the Low-Inoome Housing Preservation and Resident Homeownership Act was enacted in 1990. These laws permit prepayment only in accordance with an action plan approved through the U.S. Department of Housing and Urban Development. The threat to affordable housing developed with state and local resources is a matter of significant concern.as well. This report has been prepared with the specific purpose of quantifying the inventory of units at risk, analyzing the cost of replacing this housing or extending the term of affordability, identifying resources for preservation, and establishing objectives for local efforts and programs to facilitate the preservation of the affordable housing in Santa Ana. Background On Subsidized Housing The enactment of the Housing Act of 1949 established as a national goal the provision of "a decent home and suitable living environment for every American family". Through the late 1950's the Federal government worked to accomplish this goal, acting primarily through public housing authorities to build and operate housing for low-income families. In the early 1960's the Federal government, while maintaining its commitment to public housing, also established new housing programs that were intended to encourage private developers, owners, and managers to provide 180 affordable housing. The National Housing Act of 1968 created federal mortgage insurance, below market interest rate loans, and operating subsidies under the Sections 221 (d) (3), 221 (d) (4), and 236 programs which were very effective at encouraging the development of new affordable housing. Since 1961, nearly two million privately owned federally subsidized units of housing for low-income households have been constructed nationally. More recently a myriad of state and local financing tools have been established to finance affordable housing. As was the case with federal subsidies, owners participating in these programs agreed to use restrictions which limited the amount by which rents could be raised for a specific period of time. The duration of the use restriction varied depending on the type of subsidy received, type of project owner, and the underlying mortgage financing. Many of the federal incentives provided established 40 year mortgages that prohibited prepayment without HUD's consent for 20 years and regulatory agreements that were coterminous with the mortgage. Many state or local programs had affordability requirements of as little as fifteen years. Impact Of The Termination Of Housing Subsidies Many of the privately owned affordable housing units constructed with public subsidies in the 1960's and 1970's will be eligible for conversion to market rate rentals or sale as condominiums in the 1990's. Four primary factors threaten the continued operation of this low-income housing stock: Increased numbers of owners will become eligible to prepay their federal mortgages as their loans reach their twentieth anniversary with the largest effect being felt between 1990 and 1994. Rental assistance contracts provided through the Loan Management Set Asides (LMSAs) are expiring with the largest effect being felt between 1997 and 1999. As a consequence, owners will experience a drop in rental income and tenants will no longer be assured that they can afford the rents. Second notes on many older properties in the inventory will mature. Ownership will revert to the second note holders if the current owners are unable to pay off the second note at maturity. The housing supply is aging. Given the change in tax benefits and the possible expiration of rental subsidies, owners face diminished after-tax returns and reduced cash flows with which to meet repair and maintenance needs. In addition, the Tax Reform Act of 1986 now disallows the use of passive losses to offset income from such sources as salary, interest, dividends, and reduces other tax advantages for investors of low-income housing. 2 181 The conversion of a significant number of formerly subsidized low- income rental units to market rate housing will have an impact on tenants as follows: Limited income households will be subjected to tremendous rent increases or displaced as the buildings are converted to market rate or sold to investors. Alternative housing at affordable rents is not readily available for those who are displaced. A number of the residents of units in questions are elderly for whom a move or eviction may be especially difficult· Due to the high cost of new construction, it could be prohibitively expensive to replace this source of low- income housing once it converts to market rate rentals or condominiums. INVENTORY OF UNITS AT RISK State law requires that the housing element identify at risk affordable housing for the planning periods of July 1, 1989 through June 30, 1994, and July 1, 1994 through June 30, 1999. A listing of the City's assisted housing projects for these planning periods is detailed in Table 1, beginning on page 7. The format of inventory includes data for project ownership, financing, unit configuration, level of affordability, tenant type, earliest date of subsidy termination and term of affordability. The intent of the housing element amendment is to focus preservation efforts on the initial five year planning period. The overall inventory of affordable units identifies nineteen projects with a total of 808 residential units which have iow income use restrictions which can be terminated within the 10 year analysis period from July l, 1989 through June 30, 1999. The projects included in this inventory represent a variety of financing mechanisms which have been utilized to create the affordable units. Forty percent of the overall inventory, or 324 units, received federal assistance under a program whioh will require that they be subject to the Federal Low Income Housing Preservation & Resident Homeownership Act. An additional twenty five percent, or 198 units, are not eligible to prepay the mortgage but are eligible to opt out of the Section 8 program. The 10 year inventory also includes four projects with a total of 224 units that are owned and ioperated by a nonprofit housing development corporation whose major purpose is the development and maintenance of low income rental housing units. 182 The following is a breakdown of the types of assistance programs utilized to develop Santa Ana's affordable housing stock for the ten year planning period and the number of units in each category: 2) 3) 4) FHA Section 236(J) (2) Federally assisted projects which are subject to the Low- Income Housing Preservation & Resident Homeownership Act (LIHPRHA) * 112 units, Fairview Greens * 12 units, Highland West (nonprofit mortgage; can not be prepaid) * 200 units, Wycliffe Plaza (nonprofit mortgage; can not be prepaid) FHA Section 221 (D) (4) Federally assisted projects which have opt out risk and are not subject to LIHPPd{A * 198 units, Rosswood Villas Section 8 New Construction * 199 units, Santa Ana Towers Federally assisted Section 8 Mod-Rshab * 6 units 405 South Raitt (non profit) * 6 units 411 South Raitt (non profit) * 10 units 829 North G~rfield * 6 units 310 South Orange * 10 units 702 South Raitt * 10 units 1410 South Minnie * 6 units 615 North French Density Bonus Program * 5 units, * 3 units, * 2 units, 302 South Newhope 602-618 North Euclid 403 South Newhope 4 183 Tax Exempt Mortgage Revenue Bonds * 26 unit~, Harbor Pointe * 14 units, Tradewinds * 42 units, Villa Verde 7) Projects Assisted with Redevelopment Resources * 1 unit, 324 East Pine There are three projects, or 511 units, which during the current planning period of July 1, 1989 to June 30, 1994 have the potential for loss of affordable units. The following is a summary of these projects and discussion of the status of their affordability. 1) SaDta Ana Towers 2) 3) The Santa Aha Towers is a 199 unit senior project which was financed conventionally with a Section 23 conversion to the Section 8 New Construction program. The date of the initial Housing Assistance Plan (HAP) agreement was December 5, 1972. The Section 8 contract expires on December 5, 1992 but may be extended for three 5 year periods to December 5, 2007. Currently, the Santa Ana Housing Authority, the United States Department of Housing and Urban Development, and the project owner are in the process of amending the annual contributions contract and housing assistance payment contract to extend the terms of each. Fairview Green Apartments The Fairview Green Apartments is a 112 unit family project which was financed with the assistance of the FHA Section 236(J) (1) Loan Program. The date of loan closing for this project was May 16, 1974. The mortgage may be prepaid effective May 16, 1994. This project is subject to the restrictions of the Low Income Housing Preservation and Resident Homeownership Act and the owners will be required to develop an action plan prior to any change in affordable housing operations. Wycliffe Plaza Wycliffe Plaza is a 200 unit senior project financed with a loan under the FHA Section 236 (J)(1) program. The date of loan closing for this project was March 9, 1977. The mortgage can not be prepaid and will be paid off March 9, 2017. Additionally, 140 units in the project are assisted under a Section 8 contract which expires June 25, 1994; although, it may be extended for one five year period. At the present time it appears unlikely that the affordability of these units will be threatened. This determination is based on the nonprofit 184 form of ownership for the project as well as weakness in the current rental market. ANALYSIS AND COMPARISON REPLACEMENT COSTS OF PRESERVATION AND The following analysis has been prepared pursuant to the statutory requirements concerning local cost estimates for the production of new rental housing comparable in size and rent levels to replace at risk affordable units. Santa Ana lacks abundant vacant land suitable for residential development as it is over 97 percent built out. This condition requires that new residential development in the city be primarily focused on a mixture of duplexes and iow density residential development. The following are cost estimates, excluding land, for the development of duplexes for a range of unit configurations: DUPLEX - 2 Studio Apartments $103,150 @ 540 square feet DUPLEX - 2 One Bedroom Apartments 128,850 @ 660 square feet DUPLEX - 2 Two Bedroom Apartments 191,295 with 1.5 bathrooms @ 1,022 square feet DUPLEX - 2 Three Bedroom Apartments 223,035 with 2 bathrooms @ 1,206 square feet These cost estimates are based on recent development expenses for comparable projects. An aggregate estimate of the total cost excluding land, for the production of new rental housing to replace the inventory of at risk affordable units is as follows: Planning Period of July 1, 1989 through June 30, 1994 423 One Bedroom Apartments $27,251,775 56 Two Bedroom Apartments 5,356,260 32 Three Bedroom Apartments 3,568,560 TOTAL $36,176,595 6 TABL~ 1 Planning Period of July 1, 1994 through June 30, 1999 7 Studio Apartments $ 361,025 267 One Bedroom Apartments 17,201,475 71 . ; Two Bedroom Apartments 6,790,973' 12 '~ ~ Three Bedroom Apartments 1.338.210 TOTAL $25,691,683 While these estimates are indicative of the cost associated with producing replacement housing, the figures represent total necessary capital, a portion of which may be financed through available lending sources. The targeted level of affordability and form of ownership will greatly influence that portion of the replacement cost which may not be financed and must instead be advanced in the form of deferred loans and grants. A complete analysis of the financial feasibility of producing this replacement housing is beyond the scope of this housing element amendment. At this time it is also not possible to reliably estimate the costs associated with preserving all of the at risk housing rather than producing replacement units. All three housing developments included on the inventory for the July 1, 1989, through June 30, 1994, planning period are considered HUD assisted projects, and most of the assistance necessary to preserve these units is anticipated to be made available by the federal government. The city of Santa Ana is prepared to assist in preserving these units as well, through the advance of predevelopment funds, equity contributions, and deferred loans for rehabilitation expenses. The availability of land and costs associated with new construction in Santa Aha greatly influence any comparison of public policy options with respect to producing new housing units or working to preserve the existing affordable housing. Costs associated with preserving the existing affordable housing units are anticipated to be significantly less than for new construction. RESOURCES FOR PRESERVATION Resources for the preservation of subsidized housing include both public and nonprofit organizations that have the legal and managerial capacity to acquire and manage assisted housing developments, as well as direct financing and subsidy programs through federal, state, or local sources. Public Agency and Non profit Corporation Resources The City of Santa Ana's Preservation Program includes the following activities: 1. Evaluation of legal and procedural framework for preservation. 11 190 Identification and monitoring of threatened projects. Analysis of factors that influence an owner's decision to terminate the operation of subsidized housing. Determination of the feasibility of an entity acquiring and preserving subsidized housing. Analysis of federal, state, and local financial incentives to deter conversion and assist with acquisition and preservation of subsidized housing. Provision of technical assistance to developers, nonprofit corporations, and resident councils interested in negotiating the acquisition of subsidized housing. In order to ensure the effectiveness of this program, it is the intent of the City to identify all interested public agencies and nonprofit housing corporations that have the legal and managerial capacity to acquire and manage assisted housing developments. The following groups have been included on the State Department of Housing and Community Development's List of Entities interested in Right of First Refusal Program for Orange County. H.O.M.E.S. Inc. (Non profit) Twelve Pack Enterprises (For profit) HomeAid (For profit) Southern California Presbyterian Homes (Non profit) Golden State Mobile Home Owners (Non profit) Ralph Carrico (For profit) Flory, Olson and Van Osdel (For profit) St. Vincent De Paul (Non profit) Zucker Systems (For profit) In addition to these groups, there are presently three community based nonprofit housing development corporations operating in Santa Ana that have the interest and capacity to acquire and manage subsidized housing. These groups include: civic Center Barrio Housing Corporation Orange County Community Housing Corporation Santa Ana Neighborhood Housing Service While the City of Santa Ana operates an independent Housing Authority, this organization does not currently own or operate housing. Contacts will be initiated however with other public agencies that may have an interest in acquiring and managing subsidized housing. 12 Financing/Subsidy Resources Under the provisions of the Low-Income Housing Preservation and Resident Homeownership Act of 1990 (the Act), the owners of federal, mortgage subsidized affordable housing interested in continuing to operate the housing, are entitled to incentives sufficient to yield eight percent of the preservation equity of the project, limited by the federal cost limits and subject to appropriations. Incentives available include rent increases, increases in Section 8 contract rents, additional Section 8 certificates, access to excess reserves, and residual receipts, flexible subsidies, or Section 241(d) insurance for capital improvements, equity take-out loans under Section 241(f), and possible redirection of Section 236 interest reduction payment to a second mortgage. These incentives are negotiated by the owner and the U.S. Department of Housing and Urban Development and must be sufficient to cover the annual authorized return, debt service on any rehabilitation loan, debt service on the HUD mortgage, operating expenses, and adequate reserves. Owners of federal mortgage subsidized affordable housing interested in a voluntary sale to a priority purchaser such as a tenant council, nonprofit corporation, or state/local agency can trigger the availability of HUD financial assistance subject to appropriations. Through this approach HUD must provide assistance sufficient to enable acquisition at a purchase price not greater than the project's preservation value, to pay the debt service on the mortgage and any rehab loan, to meet project operating expenses and adequate reserves, and to receive an adequate return on any cash investment made to acquire the project. Priority purchasers have access to the following assistance, some of which is unavailable to other qualified purchasers: 1) Insurance for financing up to 95 percent of the preservation equity under the Section 241 (f) program; 2) Grants up to the present value of the total of projected published fair market rents for Section 8 existing housing for the next ten years; and 3) Reimbursement for certain transaction expenses. The Low-Income Housing Preservation and Resident Homeownership Act of 1990 does not cover Section 8 opt - outs, and expirations, and owners retain the decision whether or not to remain in the program, after receiving an offer from HUD to increase the contract rents up to the Section 8 existing fair market rent. Additional federal, state, and local resources available to assist in preserving subsidized affordable housing include the following: Home Inv~tment Pa~ne~hip Act (HOME) - The City of Santa Aha expects to receive $1,600,000 in HOME funds for fiscal year 1993. To the extent permissible under federal regulations the City is prepared to allocate a portion of this resource towards preserving affordable housing. 13 192 e Community Development Block Grant (CDBG) - of the $10,600,000 anticipated to be available to the City of Santa Aha in fiscal year 1993, only a portion is designated to the Housing Division for housing related activities. The City has been a Community Development Block Grant (CDBG) Entitlement Community since 1974. Every year approximately 12 to 13 percent of the CDBG allocation is directed toward meeting affordable housing objectives. Additionally, all program income received from the CDBG revolving loan program for the rehabilitation of existing housing is reused to fund additional rehabilitation projects. With program income included, the City allocates approximately 20 percent of available CDBG funds to meet affordable housing objectives. Rental Rehabilitation Repaymen~- The Rental Rehabilitation Program provides below-market rate deferred loans or grants to investor/owners of apartment buildings. To the extent permissible under regulation, a portion of any repayment funds can be allocated by the City towards preserving affordable housing. Funds available through this source are limited and uncertain as they are based on repayments on executed deferred loans. Rental Ce~ificates And Rental Vouchem - Through the City's Housing Authority certificates and vouchers are provided for low- income families and individuals. The Housing Authority may direct rental certificate and voucher holders towards preserving units at risk. Redevelopment Housing Set Aside-The Santa Ana Redevelopment Agency maintains active programs utilizing the Housing Set Aside funds. The annual budget is approximately $3,000,000 million. The housing fund is an appropriate and allowable source of funds to preserve units at risk of conversion. Funds for preservation can be allocated on an as-needed basis by the Redevelopment Agency. Tax Exempt Bond ~nancing- The Santa Ana Housing Authority, the Santa Ana Community Redevelopment Agency, as well as the County of Orange have the capacity to issue multi-family revenue bonds. It is anticipated that any of these entities could utilize this resource to offer incentives for preservation of expiring bend issue units (refunding) as an economic incentive to replace conventional financing for other units at risk of conversion. Low-Income Housing Tax Credlt(LIHTC)-The availability of federal and state low-income housing tax credits will assist with future preservation efforts. 14 /'- OUANTIFIED OBJECTIVES During the July 1, 1989 through June 3Q, 1994 planning period, a total of three housing developments containing 511 affordable units are at risk. Two of these developments, Santa Ana Towers and Wycliffe Plaza, are eligible for extensions to existing Section 8 rental assistance contracts and in the current housing market are considered unlikely to opt out of the program. In addition, Wycliffe Plaza is ineligible to prepay the federally assisted mortgage prior to the year 2017. The inability of this property owner to prepay their mortgage will assure that the affordability of these units is maintained well into the future. The Fairview Green Apartments, is eligible for mortgage prepayment in May 1994, and has been identified by the City of Santa Ana for a concerted preservation effort. This 112 unit housing development, affordable to families earning 50 percent of the county median income was developed through the FHA Section 236(J) (I) Program. For the planning period through June 30, 1994, it is the objective of the city of Santa Ana to retain as affordable housing all 112 units threatened due to the possible prepayment of the federally insured mortgage for the Fairview Green family apartments. After an evaluation of this project, the City has determined that ~ preservation of these at-risk units is feasible. PROGRAMS FOR PRESERVATION 1. Evaluating Legal And Procedural Framework For Preservation Federal law in the area of affordable housing preservation establishes significant restrictions upon an owner's ability to terminate the affordability restrictions on housing developed with a federal subsidy. The intent of federal law in this area has been to preserve and retain subsidized units to the maximum extent possible, minimize displacement of tenants in residence, and continue partnerships between all levels of government and property owners. Addressing the challenges to long term affordability for units developed with state and local resources has become a matter of increasing concern in California was well. Santa Ana's efforts to preserve affordable housing will include an ongoing evaluation of the legal and procedural framework established through regulatory mandates imposed by all levels of government. In the area of federally assisted housing, evaluation will be conducted of the Notice of Intent process, Plan of Action procedure, availability c federal incentives in exchange for extended low-ir 1~ use restrictions, modification to regulatory agreel~ ts, and Section 8 contractual obligations of covered projecu., in the 15 194 area of state or locally assisted affordable housing, while there are currently no overriding regulations imposed, Santa Ana will review the regulatory agreements of each development to ascertain which preservation approach will be most appropriate, especially in regard to locally assisted, bond financed, and density bonus projects. Identification And Monitoring Of Threatened Projects Identifying and monitoring threatened projects is an important component of Santa Ana's program for preservation. An initial inventory of projects has been included as part of this amendment to the City's housing element. The City is committed to obtaining accurate information on each at risk project and maintaining ongoing contact with the respective regulatory agencies, lenders, and property owners. As part of Santa Ana's Housing Element amendment, a determination has been made regarding the legal status of each threatened project. Additional information necessary to assess the feasibility of acquisition in now necessary. This information includes copies of Promissory Notes, Deed of Trust or mortgages, regulatory agreements, subsidy contracts, financial statements, physical inspection reports, agency audits, and actual rent schedules. This information will be obtained, to the extent available, as part of the City's preservation program. Analysis Of Factors That Influence An Owner's Decision To Terminate The Operation Of Subsidized Housing As part of the City of Santa Ana's program for preservation, each threatened subsidized housing development will be analyzed to determine the likelihood that the property owner will repay the mortgage, opt out of rent subsidy programs or bring rents to market at the conclusion of regulatory agreements. This analysis while being grounded in the operating data for each project, such as ownership type, existing rent structure, net income, and owners's tax situation, will also include local housing market conditions and factors such as market rents, vacancy rates, and appreciated property values. Through this analysis of the Santa Ana housing market, key factors that motivate property owners will be better understood, advantages and disadvantages to terminating the operation of subsidized housing explored and potential incentives to encourage continued subsidized housing operation identified. Determination Of The Feasibility Of An Entity Acquiring And Preserving Subsidized Housing The City of Santa Ana's preservation program includes the provision of careful feasibility analysis to determine: l) Whether an owner is willing to sell to a nonprofit developer 16 or some other entity in'~'rested in maintaining the affordable housing; 2) Whether interested parties have the capability to own and manage .the property and provide quality housing to low-and very-low income householdS; and 3) Whether potential buyers with thel city's assistance can raise sufficient debt and equity funds to cover predevelopment expenses, purchase the project, make necessary improvements and manage the property. Preparing a feasibility study can be quite complex and the city as part of its preservation program is prepared to assist in the evaluation of the physical, financial, and management needs of an existing building as well as in identifying financing to acquire, make improvements, and manage the project. Analysis OfFederal, State And Local FinanciallncentivesTo Deter Conversion And Assist With Acquisition And Preservation Of Subsidized Housing Identifying and determining the availability of financial incentives to deter conversion and assist with acquisition and preservation of subsidized housing is an ongoing part of the city of Santa Ana's program for preservation. A summary of potential resources for preservation are included as part of this housing element amendment. Even in instances where a purchaser assumes the existing mortgage and operating subsidies, significant additional financial support is anticipated to be required to finance the difference between the purchase price and outstanding mortgages, as well as for predevelopment expenses, and to make needed physical repairs or improvement~. Sources of funding for these items are expected to be quite varied throughout the period of time in which subsidized housing development may be threatened. The city of Santa Ana is prepared to track current financial incentives and analyze their applicability to the preservation effort. Provision Of Technical Assistance To Developers, Nonprofit, Corporations And Resident Councils Interested In Negotiating The Acquisition Of Subsidized Housing The Federal Low-Income Housing Preservation and Resident Homeownership Act of 1990, includes a 12 month "Right of First Offer" period for priority purchasers including resident councils, nonprofit organizations, and state or local agencies that agree to maintain the affordability restrictions for a project's useful life. The City of Santa Ana is prepared to provide technical assistance to these groups as well as to other interested parties that seek to preserve affordable housing developed with federal, state of local resources. 195 17 196 OUANTIFIED OBJECTIVES BY TARGET INCOME GROUP In addition to addressing the preservation of assisted housing, this amendment also quantifies the existing objectives in the Housing Element by target income groups. The following table shows the City's existing objectives broken down by target income households for a one year and/or five year periods. These figures reflect the City's total goals for the low, very low, moderate, and 'upper income target households incomes. 18 Obiective~ New Construction Rehabilitation u Neighbo~ood Housing Service u Neighborhood Rebates · Self Funded City Loan Program u Multi-Family Units Conservation · Notice of Violations u Single Room Occupancies u Units At Risk RHNA Goal: TABLE 2 QUANTIFIED OB~CTIVES OF HOUSING PROGRAM By Target Income Group Very Low Low Moderate Upper Totals Annual Five Ymr Annual Five Year Annual Five Year Annual Five Year Annual Five Year -- 862 -- 1,296 -- 1,641 -- 2,133 -- 5,932 -- 17 -- 23 ..... 40 18 90 62 310 20 100 -- -- 1O0 500 20 99 68 341 22 110 -- -- 110 550 20 101 30 150 25 124 -- -- 75 375 1,208 6,040 1,208 6,040 604 3,020 -- -- 3,020 15,100 -- 158 ....... 158 -- 112 ....... 112 862 1,296 1,641 2,133 5,932 Note: The objectives li~ted above have been extracted from the Housing Element adopted in 1989, with the exception of single x~om occupancies and units at ri~k.