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HomeMy WebLinkAboutR-11225 approving an Affordable Housing Fund award to HASLO for the Toscano ApartmentsR 11225 RESOLUTION NO. 11225 (2021 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, APPROVING AN AFFORDABLE HOUSING FUND AWARD TO THE HOUSING AUTHORITY OF THE CITY OF SAN LUIS OBISPO FOR TOSCANO APARTMENTS IN THE AMOUNT OF $335,000. WHEREAS, the City Council of the City of San Luis Obispo met via teleconference in San Luis Obispo, California, on March 2, 2021, for the purpose of considering a request for Affordable Housing Fund (AHF) assistance; and WHEREAS, the proposed project by the Housing Authority of the City of San Luis Obispo (HASLO) meet the eligibility criteria established by the City Council; and WHEREAS, Housing Element policies and programs encourage and support the construction of new affordable housing in the City; and WHEREAS, the City Council has duly considered all evidence, including the testimony of the applicant, interested parties, and the evaluation and recommendations by staff at the said meeting. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Findings. The City Council does hereby make the following findings in support of the proposed AHF awards: 1. Eligibility: Use of the AHF for the requested purpose will increase or improve the City’s affordable housing inventory and promote General Plan policies regarding housing, as follows: Toscano Apartments meets the eligibility criteria because it will increase the supply of affordable rental housing by constructing 38 new affordable units. The families served will range from 30-60% AMI, an income bracket that has very limited housing options in the City. Toscano Apartments will be restricted as affordable housing by the Low- Income Housing Tax Credit (LIHTC) program for a minimum of 55 years. As an additional overlay, HALSO, through its public agency status, will ensure that the housing remains permanently affordable. HASLO will operate the housing and ensure long-term compliance with all regulatory agreements as well as financial and physical sustainability of the property. HASLO will utilize its affiliate non-profit, San Luis Obispo Non-Profit Housing Corporation, as managing general partner in the Limited Partnership ownership entity formed for purposes of the LIHTC program. Resolution No. 11225 (2021 Series) Page 2 R 11225 2. Need: There exists a substantial or overarching need for the type of unit to be assisted, as follows: Affordable housing is a critical need in the City as well as countywide. San Luis Obispo County, including all seven cities, has one of the lowest rental housing vacancy rates in the State of California according to the State Department of Finance. Since 2017, after extensive public outreach and community input and engagement, the Council has adopted the production of affordable housing as one of its top priority goals. Last, the City’s Housing Element documents substantial unmet need during the previous 5-year planning period. 3. Suitability: The project to be assisted is appropriate for its location both in terms of land use and design, as follows: The site is zoned Medium-Density Residential, Specific Plan and Planned Development Overlay Zone (R-2-SP-PD), consistent with the proposed use. Upon the recommendation of the Architectural Review Commission in June 2020, the Planning Commission approved the project in September 2020 (Reso No. PC-1021-20). 4. Timing: The project would better serve the City’s needs if it were built immediately as opposed to later, as follows: Toscano Apartments has received all City discretionary approvals and is preparing to submit for a building permit application. The project is assembling various competitive sources of financing and will apply for low-income housing tax credits in March 2021. If awarded tax credits, construction is expected to begin in December 2021. 5. Financial Effectiveness: But for the requested funding, the project would not be economically feasible; or AHF funding “leverages” significant additional funding from other sources, as follows: This is a highly effective use of the AHFs; it will leverage an estimated $15 million in other Federal, State, and private financing. The apartments will remain affordable for 55 years pursuant to a LIHTC regulatory agreement. Additionally, HASLO as a public agency will do its best to ensure that the units remain a permanent affordable housing resource for the community. Project financial feasibility is dependent upon AHF allocations. 6. Readiness: The project has all necessary City approvals and is ready to proceed, as follows: Toscano Apartments has obtained all the necessary City discretionary approvals. HASLO intends to apply for a building permit in October 2021. Upon award of the AHF allocations, HASLO will apply for LIHTCs. If an award of tax credits is received, construction would start in December of 2021. Resolution No. 11225 (2021 Series) Page 3 R 11225 SECTION 2. Environmental Determination. The project to award affordable housing funds is exempt from environmental review per Section 15061(b)(3) General Rule of the CEQA Guidelines. It can be seen with certainty that the proposed action to award grant funding will have no significant effect on the environment. SECTION 3. AHF Award for HASLO. The City Council does hereby approve an AHF award in an amount not to exceed $335,000, subject to the following condition of approval: 1. Prior to release of any portion of the AHF award, the applicant shall enter into an affordability agreement with the City for thirty-eight (38) for-rent affordable housing units located at 3065 Lucca Lane for a term of fifty-five (55) years, which will be recorded against the title of the property. Upon motion of Council Member Christianson, seconded by Vice Mayor Stewart, and on the following roll call vote: AYES: Council Member Christianson, Marx, Vice Mayor Stewart, and Mayor Harmon NOES: None RECUSED: Council Member Pease The foregoing resolution was adopted this 2nd day of March 2021. ____________________________________ Mayor Heidi Harmon ATTEST: ____________________________________ Teresa Purrington, City Clerk APPROVED AS TO FORM: _____________________________________ J. Christine Dietrick, City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ____________________________. ____________________________________ Teresa Purrington, City Clerk