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Home My WebLink AboutR-11411 approving Affordable Housing Fund Awards for HASLO for 736 Orcutt Road and 279 Bridge StreetR 11411 RESOLUTION NO. 11411 (2023 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, APPROVING AFFORDABLE HOUSING FUND AWARDS TO THE HOUSING AUTHORITY OF SAN LUIS OBISPO FOR THE 736 ORCUTT ROAD APARTMENTS AND THE 279 BRIDGE STREET FAMILY APARTMENTS IN THE AMOUNT OF $3,200,000 WHEREAS, the City Council of the City of San Luis Obispo met in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on April 18, 2023, for the purpose of considering requests for Affordable Housing Fund (AHF) assistance; and WHEREAS, the proposed projects, 736 Orcutt Road Apartments and the Bridge Street Apartments Family Project, by The Housing Authority of San Luis Obispo (HASLO) meet AHF award eligibility criteria established by the City Council in Resolution No. 9263 (2001 Series); and WHEREAS, Housing Element policies and programs encourage and support the preservation and rehabilitation of 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 meeting; and 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: Requested HASLO projects are eligible for Affordable Housing Funds because they each increase the City’s affordable housing inventory and implement several General Plan policies regarding housing. The projects will increase the supply of affordable housing for 71 units residents or families respectively, who are within the extremely low, very low, or low-income range. The units will be restricted as affordable housing by the Low-Income Housing Tax Credit (LIHTC) program for a minimum of 55-years. HASLO, through its public agency status, will ensure that the housing remains permanently affordable and operate the housing and ensure long-term compliance with all regulatory agreements and financial and physical sustainability of the property. DocuSign Envelope ID: 616843CC-9821-4F0F-908E-D7915D7D8454 Resolution No. 11411 (2023 Series) Page 2 R 11411 2. Need. There exists a substantial or overarching need for the type of units to be assisted, as follows: Below Market Rate housing is a critical need in the City and County of San Luis Obispo. Rapidly rising rents have increased the financial burden on low-income people and the median rental household in the County spends 38% of its income on housing. The City’s 6th Cycle Housing Element, adopted in 2020, documents substantial unmet need. HASLO will use 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. As property management agent, HASLO coordinates with area non- profit service providers to accept homeless and other special high need referrals and provides resident and supportive services. 3. Suitability. The projects to be assisted are appropriate for location both in terms of land use and design, as follows: Both proposed housing projects can safely and conveniently access services and amenities. The 736 Orcutt Road apartments are located 2.5 miles to County Services and 1.7 miles to downtown SLO; 1,200 feet from the railroad safety trail, which conveniently and safely connects pedestrians quickly to downtown; and less than 3/4 of a mile away from a grocery store that offers fresh produce, meat, and other staples. The Bridge Street Apartments are located 1.2 miles from County services and less than a mile to downtown SLO; and less than 3/4 of a mile away from a grocery store that offers fresh produce, meat, and other staples. 4. Timing. The projects would better serve the City’s needs if it were built immediately as opposed to later, as follows: Both projects have site control and received all City discretionary approvals. The provision of below market rate rental housing units will advance the City Major City Goal for Housing and Homelessness; implement the City’s Homelessness Response Strategic Plan; and make progress on state Regional Housing Needs Allocations (“RHNA”) for housing affordable to residents or families in low ore extremely low-income categories. Both funding requests are for low and below income levels reducing the City’s current remaining RHNA for these categories from 331 to 260 units. 5. Financial Effectiveness. But for the requested assistance, the project would not be economically feasible; or AHF funding “leve rages” significant additional funding from other sources, as follows: Both projects offer a highly effective use of the City AHF. Funding for the 736 Orcutt Road Apartments would constitute 10.2% of project funding. The project leverages Housing Trust Fund ($1,000,000), County and City funds ($420,541) and low-income housing tax credits ($11.7 million). DocuSign Envelope ID: 616843CC-9821-4F0F-908E-D7915D7D8454 Resolution No. 11411 (2023 Series) Page 3 R 11411 HASLO is assembling various competitive sources of financing for the Bridge Street Family Apartment project and will apply for low -income housing tax credits in July 2023. 6. Readiness. The project has all necessary City approvals and is ready to proceed, as follows: Both the 736 Orcutt Road Apartments and the Bridge Street Family Apartments do not need to obtain any further City discretionary approvals. Upon the award of the City, HASLO will apply for building permits anticipated in the fall of 2023 for Bridge Street Family Apartments and January 2024 for the 736 Orcutt Road Apartments. SECTION 2. Environmental Determination. The project to award affordable housing funds is exempt from environmental review per the California Environmental Quality Act as it does not apply to the recommended actions in this report, because the action does not constitute a “Project” under CEQA Gu idelines Sec. 15378. SECTION 3. Affordable Housing Fund Award for The Housing Authority of San Luis Obispo (HASLO). The City Council does hereby approve an Affordable Housing Fund award in an amount not to exceed $3,200,000, for HASLO for the 736 Orcutt Road Apartments and the Bridge Street Family Apartment subject to the following condition of approval: 1. Prior to release of any portion of the AHF award, the applicants shall enter into an affordability agreement with the City. a. For 736 Orcutt Road Apartments, it shall be for forty (40) for -rent affordable housing units located at 736 Orcutt Road, for a term of fifty- five (55) years, which will be recorded against the title of the property. b. For the Bridge Street Family Apartment project at 279 Bridge Street, it shall be for thirty-one (31) for-rent affordable housing units, for a term of fifty-five (55) years, which will be recorded against the title of the property. DocuSign Envelope ID: 616843CC-9821-4F0F-908E-D7915D7D8454 Resolution No. 11411 (2023 Series) Page 4 R 11411 2. The Community Development Director is authorized to adjust the amount of funding between the two projects awarded at the request of HASLO on the condition that the change improves the competitiveness of the projects for receiving other funding awards, such as tax credits from the State. In no case may the total amount of funding awarded exceed $3,200,000. Upon motion of Council Member Pease, seconded by Council Member Shoresman, and on the following roll call vote: AYES: Council Member Francis, Pease, Shoresman, Vice Mayor Marx, and Mayor Stewart NOES: None ABSENT: None The foregoing resolution was adopted this 18th day of April 2023. ___________________________ Mayor Erica A. Stewart 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 DocuSign Envelope ID: 616843CC-9821-4F0F-908E-D7915D7D8454 4/20/2023 | 2:56 PM PDT