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Home My WebLink About11/26/2019 Item 1, Smith Wilbanks, Megan From:Scott Smith <SSmith@haslo.org> Sent:Tuesday, To:E-mail Council Website Cc:Johnson, Derek Subject:Nov 26 Special Council Meeting - Emergency Ordinance Support Dear Mayor and City Council, Unfortunately due to this being a special meeting and having some prior family obligations I am unable to attend in person. However, I did wish to weigh in on your agenda item. HASLO is in full support of AB 1482 and the enactment of an Emergency Ordinance by council to immediately implement its provisions. We believe the greatest risk to tenants during this interim period is potential No Cause Eviction. Rent increases during this interim period seem to be addressed in AB 1482, setting baseline rents retro to March 2019 levels. I would like to also address some very confusing communication that was sent to the City regarding the Poinsettia Apartments. This communication was inaccurate and potentially misleading. Unfortunately, we were not contacted for information prior to or after its sending. Here is some background information on Poinsettia Apartments. 1) Poinsettia’s Expiring Low-Income Housing Tax Credit (LIHTC) 30-Year Regulatory Agreement Poinsettia is an older, well maintained Low-Income Housing Tax Credit (LIHTC) property managed by HASLO. LIHTC properties are exempt from AB 1482. This is because they already limit rent amounts and prohibit No Cause Eviction. Recently Poinsettia tenants received a technical notice that effective January 1, 2020 Poinsettia’s 30-Year Regulatory Agreement is expiring, and consequently on or after January 2021 (12 months later) tenants could be subject to market rents. This notice and the timing of its delivery are stipulated by state law. The notice period must be at least 12 months long, and be provided prior to the expiration of the property’s Regulatory Agreement. Although Poinsettia’s LIHTC Regulatory Agreement expires January 1, 2020, its protections will extend to existing residents for the additional 12 month noticing period, i.e. through January 1, 2021. 2) Poinsettia And Rent Subsidy Contracts In addition to the LIHTC Regulatory Agreement, 17 of the 20 apartments at Poinsettia are under Section 8 Rent Subsidy contracts. Rent Subsidy contracts are also exempt 1 from AB 1482 because of tenant rent and other protections provided. Tenant rent is always based upon 30% of their actual income, the HUD standard for affordability. These 17 Poinsettia residents did receive a notice of change in Contract Rents, which is a different and higher amount than the rent owed by the tenant. With an increase in Contract Rents, the tenant continues to pay 30% of actual income for rent. The difference between the tenant rent and Contract Rent is paid directly by HUD, with no adverse impact on the tenant. The change in Contract Rents is necessary not only to keep the property financially viable but also in order to apply consistent Contract Rent Standards across all similar private, non-regulated properties entering into Section 8 Subsidy Contracts. Note that a lower Contract Rent is used for LIHTC projects because they are already receiving subsidy under the LIHTC program and subject to Regulatory Agreements. Poinsettia will no longer be a LIHTC property as of January 1, 2020. 3) Over-housed Section 8 Rent Subsidy Resident You were contacted by a Section 8 resident concerned with their Section 8 Contract Rent increase. There are some unique but pretty straight forward circumstances in play here. This resident wishes to reside in a 3-bedroom HUD subsidized apartment at Poinsettia. She is only eligible for a 2-bedroom apartment due to her small family size. She can choose to reside in a 3-bedroom apartment, but under that circumstance HUD requires her to pay the cost difference for the extra bedroom on her own. We have worked with this resident for many months explaining the situation and have identified several available 2-bedrooom apartments for her both at Poinsettia as well as other locations in town. Ultimately the decision is hers to make. I apologize for getting into the weeds and delving into some pretty technical detail but as you know housing, especially affordable housing, gets complex very quickly. We have spent this week calling and/or meeting with each resident at Poinsettia to ensure that they fully understand their situation and are not fearful of their future. Please contact me should you wish to discuss any aspect of this or any other housing issue we might provide input on. Sincerely, Scott Smith Executive Director HASLO Housing Authority of San Luis Obispo 487 Leff Street 2 San Luis Obispo, CA 93401 (805)594-5323 Visit our website at www.haslo.org 3