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Home My WebLink About29A - ACTION PLAN AMENDMENT FOR NSP3REQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: MAY 7, 2012 TITLE: 2010-2011 ANNUAL ACTION PLAN SUBSTANTIAL AMENDMENT - NSP3 TARGET GEOGRAPHY AREA (" (i yi, CITY MANAGER RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1St Reading ? Ordinance on 2nd Reading ? Implementing Resolution ? Set Public Hearing For_ CONTINUED TO FILE NUMBER Approve a substantial amendment to the 2010-2011 Annual Action Plan expanding the NSP3 Target Geography Area and authorize its submittal to the U. S. Department of Housing and Urban Development. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION At its regular meeting on April 3, 2012, by a vote of 6:0 (Bist absent), the Community Redevelopment and Housing Commission approved the recommended action. DISCUSSION On February 28, 2011, the City submitted to the U. S. Department of Housing and Urban Development (HUD) a Substantial Amendment to its 2010-2011 Annual Action Plan which authorized the NSP3 program. The Annual Action Plan is the document whereby the City formally applies to HUD for the annual federal grant allocations (CDBG, HOME, ESG, and HOPWA) and describes how those grant funds will be utilized. Pursuant to HUD regulations, NSP funds must also follow the Annual Action Plan and the Citizen Participation Plan. This Substantial Amendment created and established the Target Geography Area in which the NSP3 program would operate. Since that time, there have been insufficient foreclosed and abandoned homes within this initial area. In order to meet expenditure deadlines, staff is recommending that the Target Geography Area (Exhibit 1) be expanded. Revision of the Target Geography Area requires approval of a Substantial Amendment to the 2010-11 Annual Action Plan. HUD regulations require that the draft Substantial Amendment be made available for a 30-day public review and comment period. On March 30, 2012, notification was published in the Orange County Reporter that the Substantial Amendment was available for review beginning March 30, 29A-1 2010-2011 Annual Action Plan Substantial Amendment - NSP3 May 7, 2012 Page 2 2012, and that the public hearing would be held and Nguoi Viet as well as on the City's website April 30, 2012 at 5 p.m. All comments receive submitted to HUD. on April 3, 2012. It was also noticed in La Opinion The 30-day public comment period concluded on J will be included in the final document when it is FISCAL IMPACT There is no fiscal impact associated with this action. -11 aln r t1i 4?? &(Z? do Nancy T. ards Interim Ex utive Director Community Development Agency NTE/SLB/TG/mlr Exhibit: 1. 2010-2011 Action Plan Substantial Amendment - NSP3 29A-2 SUBSTANTIAL AMENDMENT TO THE FISCAL YEAR 2010- 2011 ACTION PLAN: NSP 3 TARGET AREA GEOGRAPHY INTRODUCTION They City of Santa Ana's Fiscal Year 2010-11 Annual Action Plan was submitted to the U. S. Department of Housing and Urban Development (HUD) on May 15, 2010. The first Substantial Amendment consisted of the City's application to HUD for $1,464,113 in Neighborhood Stabilization Program funds made available to the city in the third round of funding for that program (NSP 3). In order to apply, the city needed to identify a Target Area Geography which met HUD's criteria within which it would spend these funds. Since that time, there have been insufficient foreclosed and abandoned homes within this initial area to meet our goals. After consultation with HUD, the city has determined that the Target Area Geography should be changed. Title 24 Section 91.505 of the Code of Federal Regulations stipulates that participating jurisdictions shall amend their approved plans whenever they make one of the following decisions: 1. To make a change in its allocation priorities or a change in the method of distribution of funds; 2. To carry out an activity, using funds from any program covered by the Consolidated Plan (including program income) not previously described in the action plan; or 3. To change the purpose, scope, location, or beneficiaries of an activity. The Regulation further requires that jurisdictions identify in their citizen participation plans the criteria they will use for determining what constitutes a substantial amendment. Consistent with these requirements, the Citizen Participation Plan adopted by the City of Santa Ana as a component of its 2010/11 - 2014115 Consolidated Five Year Plan identifies three criteria that will require a substantial amendment: 1. Changes in the use of CDBG funds from one eligible activity to another; 2. An activity is undertaken that was not previously included in the Consolidated Plan or subsequent action plans. 3. More than 30 percent of the most recent annual federal grant allocation is reallocated to other eligible program activities within the fiscal year. The proposed change does not meet any of these criteria. However, the city has determined that its significance is such that a substantial amendment is appropriate. i Exhibit 1 29A-3 CITIZEN PARTICIPATION In accordance with 24 CFR 91.105(c)(3) for local governments, the substantial amendment Public Notice for the use of CDBG and HOME funds was released for citizen review and comments on March 30, 2012. During the 30-day public comment period from March 30, 2012 through April 30, 2012, the Public Notice for the Draft Substantial Amendment was made available during regular business hours between 8:00 a.m. and 5:00 p.m., Monday through Thursday in the following locations: 1) Housing Department, 20 Civic Center Plaza, 3rd Floor, 2) Community Development Agency, 20 Civic Center Plaza, 6th Floor, 3) Office of the Clerk of the Council, 20 Civic Center Plaza, Room 809, 4) the Main Public Library, 26 Civic Center Plaza, Santa Ana, California and 5) on the city's website. The Community Redevelopment and Housing Commission of the City of Santa Ana held a public hearing on April 3, 2012, at 6:00 p.m., at the City Council Chambers, 22 Civic Center Plaza, Santa Ana, California 92701. The City Council of Santa Ana will hear and vote on this Substantial Amendment to the 2010-11 Action Plan on May 7, 2012. A copy of the public hearing notice is presented in Attachment 1, along with a summary of citizen comments received at the public hearing and the remainder of the public comment period. The city's responses to these citizen comments are also included in Attachment 1. PROPOSED ACTIVITY AMENDMENT The city will substitute the Target Geography included with this document as Attachment 2 for its existing Target Geography. NSP 3 funds will be used exclusively in this new Area. In accordance with HUD guidelines for establishing NSP 3 production goals, the city will adopt a production goal of 12. NSP 3 planning data for this (Attachment 3) indicate that a minimum of 12 units must be acquired, rehabilitated and resold to make an impact on the neighborhood. Exhibit 1 29A-4 ATTACHMENT 1 PROOF OF PUBLICATION 30-DAY COMMENT PERIOD & PUBLIC HEARING & SUMMARY OF PUBLIC COMMENTS Exhibit i 29A-5 NOTICE OF PROPOSED ACTION TO BE TAKEN BY THE CITY COUNCIL OF THE CITY OF SANTA ANA RESPECTING PROPOSED SUBSTANTIAL AMENDMENTS TO THE CITY OF SANTA ANA 2010-2011 AND 2011-2012 CONSOLIDATED PLAN ANNUAL UPDATES NOTICE IS HEREBY GIVEN that the Community Redevelopment and Housing Commission of the City of Santa Ana will conduct a public hearing on April 3, 2012 at 6:00 p.m. at the City Council Chambers, 22 Civic Center Plaza, Santa Ana, CA 92701 on proposed actions approving substantial amendments to the City's 2010-2011 and 2011-2012 Consolidated Plan Annual Updates. On April 16, 2012 on or about 6:00 p.m. at the City Council Chambers, the City Council will take action on requests to authorize submittal of the substantial amendments to the U.S. Department of Housing and Urban Development (HUD). The proposed amendments will reprogram HOME and Community Development Block Grant funds currently available to the City, and revise the City's Target Geography Area for its NSP3 grant funds. The draft substantial amendment will be available for public review from March 30, 2012 to April 30, 2012 at the following locations Monday through Friday during normal business hours: Housing Department, 20 Civic Center Plaza, 3rd Floor; Community Development Agency, 20 Civic Center Plaza, 6th Floor; Office of the Clerk of the Council20 Civic Center Plaza, Room 809; and the Main Public Library, 26 Civic Center Plaza, Santa Ana, California. Written comments on them must be submitted to the Housing Division on or before April 30, 2012. Publish: March 28, 2012 REVISION TO NOTICE OF PROPOSED ACTION TO BE TAKEN BY THE CITY COUNCIL OF THE CITY OF SANTA ANA RESPECTING PROPOSED ANNUAL ACTION PLAN SUBSTANTIAL AMENDMENTS NOTICE IS HEREBY GIVEN that on May 7, 2012 at or about 6:00 p.m. in the City Council Chambers, 22 Civic Center Plaza, Santa Ana, CA 92701 the City Council of the City of Santa Ana will take action on requests to approve substantial amendments to the City's 2010-2011 and 2011-2012 Annual Action Plans. The City's original Notice published March 30, 2012 indicated that City Council would take this action on April 16, 2012. Publish: April 11, 2012 4 Exhibit 1 29A-6 SUMMARY OF PUBLIC COMMENTS Exhibit 1 29A-7 ATTACHMENT 2: PROPOSED TARGET GEOGRAPHY Exhibit 1 29A-8 Attachment 2 - Santa Ana NSP 3 - Current and Proposed Target Geography Areas Exhibit i 29A-9 ATTACHMENT 3: NSP 3 PLANNING DATA Exhibit 1 29A-10 Neighborhood ID: 8624786 NSP3 Planning Data Grantee ID: 0633420E Grantee State: CA Grantee Name: SANTA ANA Grantee Address: 20 Civic Center Plaza, M-37 Santa Ana CA 92702 Grantee Email: SKutner@santa-ana.org Neighborhood Name: NSP 3 McFadden, Main, Borchard and Bristol Date:2012-03-22 00:00:00 NSP3:Score The neighborhoods identified by the NSP3 grantee as being the areas of greatest noel must have an individual or average combined index score for the grantee's identified target geography that is not less than the lesser of 17 or the twentieth percentile most needy score in an Individual state. For example, :if a state's twentieth :percentile most needy census tract is 18; the requirement will be a minimum need of 1.7. If; however, a state's twentieth :perebntile.most needy census'tract is '15:,.the;requirement will be a:minimum need of 16. If more than one neighborhood is identified in the Action Plan, HUD will average the Neighborhood. Scores, weighting the scores by the estimated number of housing units in each identified neighborhood. Neighborhood NSP3 Score: 19 State Minimum Threshold NSP3 Score: 17 Total Housing Units In Neighborhood: 1111 ;Area Benefit Eligibilitt :Percent Persons Less than 120% AMI: 88.84 Percent Persons :Less than 80% AMi: 65.18 Neighborhood Attributes (Estimates) Vacanny t=sfimate USPS data on addresses not receiving mail in the last.90 days;or "NoStat":can ,be a :useful measure of whether or not a'target area has,! serious vacancy: problem.. For urban` noighborhoods, HUD has found that neighborhoods with a very high number vacant addresses relative to the total addresses in an.a.rea to be. a very good indicator of a current for potentially serious blight problem. The USPS "NoStat" indicator can mean different:things. In rural areas, it is an indicator of'.vacancy, However, it can also be an address that has been issued but not ever used, it can indicate units under development, and it can be a. very distressed property (most of the still flood damaged properties in New Orleans are NoStat). When Using this variable, users need to understand the target area identified. In addition, the housing unit counts HUD gets from the US Census lndicatedabove are.usualiy close to the residential address counts from the USPS below. However, If the Census and USPS counts are substantially different for your identified. target area, users are advised to use the information below with caution. For example If there are many NoStats in an area for units never bu€lt; the USPS residential address count may be larger than the Census number; if the area is a rural area largely served by PO boxes it may have fewer addresses than housing units. USPS Residential Addresses in Neighborhood: 1086 Residential Addresses Vacant 90 or more days (USPS, March 2010):16 Residential Addresses NoStat (USPS, March 2010.): 4 29A-11 Popeclosure Estimates HUD has developed a model for predicting where foreclosures are likely. That model estimates serious delinquency rates using data on the leading causes of foreclosures - subprime loans (HMDA Census Tract data on high cost and highly leveraged loans), Increasing unemployment (BLS data on unemployment rate change), and fall in home values (FHFA data on house price change). The predicted serious delinquency rate is then used to apportion the state total counts of foreclosure starts (from the Mortgage Bankers Association) and REOs (from RealtyTrac) to individual block groups. Total Housing Units to receive a mortgage between 2004 and 2007: 685 Percent of Housing Units with a high cost mortgage between 2004 and 2007: 31.2 Percent of Housing Units 90 or more days delinquent or in foreclosure: 18.15 Number of Foreclosure Starts in past year: 60 Number of Housing Units Real Estate Owned July 2009 to June 2010: 34 HUD is encouraging grantees to have small enough target areas for NSP 3 such that their dollars will have a visible impact on the neighborhood. Nationwide there have been over 1.9 million foreclosure completions In the past two years. NSP 1, 2, and 3 combined are estimated to only be able to address 100,000 to 120,000 foreclosures. To stabilize a neighborhood requires focused investment. Estimated number of properties needed to make an Impact in identified target area (20% of REO In past year): 12 Supporting Data Metropolitan Area (or non-metropolitan area balance) percent fall in home value since peak value (Federal Housing Finance Agency Home Price Index through June 2010):-29.3 Place (if place over 20,000) or county unemployment rate June 2005': 5.7 Place (if place over 20,000) or county unemployment rate June 2010% 14.4 'Bureau of Labor Statistics Local Area Unemployment Statistics Market nalysis* HUD Is providing the data above as a tool for both neighborhood targeting and to help Inform the strategy development. Some things to consider: 1. Persistent Unemployment. Is this an area with persistently high unemployment? Serious consideration should be given to a rental strategy rather than a homeownership strategy. 2. Home Value Change and Vacancy, is this an area where foreclosures are largely due to a combination of falling home values, a recent spike in unemployment, and a relatively low vacancy rate? A down payment assistance program may be an effective strategy. 3. Persistently High Vacancy. Are there a high number of substandard vacant addresses In the target area of a community with persistently high unemployment? A demolitlonlland bank strategy with selected acquisition rehab for rental or lease-purchase might be considered. 4. Historically low vacancy that is now rising. A targeted strategy of acquisition for homeownership and rental to retain or regain neighborhood stability might be considered. 5. Historically high cost rental market. Does this market historically have very high rents with low vacancies? A strategy of acquiring properties and developing them as long-term affordable rental might be considered. Latitude and Lgngitude of corner points -117.867980 33.728837 -117.867680 33.734369 -117.885103 33.734405 -117.885017 33.728873 29A-12 Blocks Comprising Target Neighborhood 060590746014000,060590746014005,060590746014007,060590746014009,060590746014011, 060590746014010, 060590746014008, 060590746014006, 060590746014004, 060590746014001, 060590746014003, 060590746014002, 060590746015000, 060590746015005, 060590746015007, 060590746015009,060590746015010,060590746015008,060590746015006,060590746015004, 060590746015001, 060590746015003, 060590746015002, 060590747021000, 060590747021004, 060590747021006,060590747021010,060590747021012,060590747021014,060590747021013, 060590747021011, 060590747021009, 060590747021005,060590747021003, 060590747021001, 060590747021002, 060590747022000, 060590747022003, 060590747022005, 060590747022006, 060690747022004, 29A-13 29A-14