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HomeMy WebLinkAbout12-06-2011 Public Comment Rioux - Housingf I4r The Perfect Plan: Affordable Housing for All 2010 Annual Report San Luis Obispo County Housing Trust Fund �r 2010 — The Perfect Plan: Affordable Housing for All George Moylan Affordable Housing Fund Why Housing is Important Y g p George Moylan was a founding director Alfor'dable housing is important to San Luis Obispo County for a variety of of the Housing Trust Fund and local reasons ranging from economic vitality and community health to individual housing luminary for almost two dec- health, wellbeing and educational attainment. ades. When he passed away in Septem- Affordable housing impacts economic vitality in a number of ways. For years, ber 2005, the George Moylan Afford- Chamber members have ranked the lack of affordable housing as the area's top able Housing Fund was established at businesses problem. Without affordable housing, companies have a difficult the request of his family to honor his time recruiting and retaining qualified employees. Businesses simply cannot memory and to continue his commit- function and flourish without a stable workforce. ment to affordable housing. In addition, housing production is generally [lie powerhouse that pulls our The Moylan Fund is a revolving loan economy out of recessions. This is because between one and threejobs are fund that is used to directly finance directly created for cash new housing unit that is built. The employees and affordable housing projects San Luis entrepreneurs who build homes then buy goods and services which, in tuna, Obispo County. As loans are repaid, creates additional new jobs. Even a healthy real estate resale market creates money returns to the Fund and is re- jobs, both directly and indirectly. loaned for other projects. Stable housing also promotes stable families. Research suggests that afford- able rental housing can also play a critical role in promoting increasers employ - Since its inception, nearly $80,000 has ntent and earnings among lower incoine households. These households often been raised for the Moylan Fund. This live almost nomadic lives – moving frequently as they seek housing that they achievement was possible due to an can afford. Having a long -term address within a reasonable distance from outpouring of support from every sector employment increases the probability of long -term employment. And when of our community. More than 300 indi- the home is safe and clean, people can channel energy into their work, families viduals, firms, and organizations have and communities rather than worry about just surviving. contributed either directly or indirectly to the Moylan Fund. Affordable housing also has a direct impact on educational achievement for children. When families are forced to constantly move in search of affordable The largest Moylan Fund contributors housing, it often means that their children must change schools. Stable hous- through the end of 2010 were: ing allo'w's children to remain in the same schools long term and benefit from the continuity. $10,000 or more Safe and decent housing also means healthier children. Homeless children Heritage Oaks Bank suffer almost twice the respiratory infections, five times the diarrheal infec- Mission Community Bank tions, seven times the iron deficiency, twice as many hospitalizations, and sig- Rabobank niticantly worse overall health status compared to children who have adequate $5,000 or more housing. Children who live in substandard housing face many of these issues First American Title as well. These hcalt)t- related problems can result in higher public costs for $2,000 or more health care. The Tribune The National Housing Conference has published a number of reports that surn- Harold Rosen Fund marize the impacts of affordable housing; on job creation, the economy, health Anonymous Donor and education. Check them out at www,iihe.or ublications /index.litinl. $1,000 or more Dotty Hawthorne J.W. Design & Construction Janna & Bob Nichols Rotary Club SLO Charities, Inc. Anonymous Donors Additional information is online at Cover ---- °Grind Valley Vista —Fall " by local artist Dotty Hawthorne. Dotty www.slochtforg/moylan-fund.htm. has donated artwork, including a fi amed fine art giclee print of this painting, to bengfii the George Moyla n.ft6rdable Housing Fund. Dotty's ivo ►k can be viewed online at wi tntf . II0-laivtlaca1-► Le. corn. Page 2 San Luis Obispo County Housing Trust Fund The Perfect Plan: Affordable Housing for All - 2010 Message from the Chair The past few years have been quite challenging for the housing industry both locally and across the nation. Home values dropped precipitously and housing construction largely came to a halt. Foreclosures of both individual homes and new developments are far too common. Many banks and real estate lenders failed, while others were forced to retrench. There has never been -a greater need for an organization like the San Luis Obispo County Housing Trust Fund (the "HTF "). Thankfully, we have been able to rise to the challenge. This was only possible with the help of our many partners and supporters. Our revolving loan finds have increased significantly in recent years — from $4.2 million at the end of 2008 to $6.3 million at the end of 2010. So has our lending activity. We provided $2 million to assist 32 units of affordable hous- ing through the end of 2008 and nearly $6.2 million to assist 214 units by the end of 2010. In 2010, nearly 30% of all the housing starts in the entire county were in projects that the HTF helped finance. With this track record, it's hard to believe that the HTF was only an idea ten short years ago. Members of the Supportive Housing Consortium, led by Ann Travers and Rachel Richardson, were our original champions. Anita Robinson, of Mission Community Bank, George Moylan, of HASLO, Janna Nichols, of United Way, and others joined them to help bring the HTF to fruition. One key victory for this leadership group was securing the County Board of Supervisors' support for the Housing Trust Fund. In December 2002, the Supervisors unanimously committed to find funds to help us get started. Then, the Community Foundation, [united Way, HASLO, the Economic Opportunity Commission (now CAPSLO) and others throughout the community committed funds as well. Warren Sinshchner volunteered his firm to incorporate the HTF and process our 501(c)(3) tax exemption on a pro bono basis. Once we were operational, retired City Manager John Dunn met with the seven cities in the county and helped to secure their unanimous support for our operations. Mission Community Hank committed the first million dollars to our revolving loan fund in 2004. Mid -State Bank and Trust (now Rabobank) matched this investment the next year. Catholic Healthcare West, which owns local hospi- tals, provided our third largest investment the following year. Our George Moylan Affordable Housing Fund was created in 2005 when George Moylan, a founding director, passed away. His family asked that con- tributions be made to the HTF in his name. The next year, the California Asso- ciation of Realtors provided a $100,000 grant for our loan funds. Since 2009, we have received $2.5 million in grants and commitments to our loan funds from the state and federal government. Thank you to all of our supporters and partners. Without you, none of this would have been possible. Julian D. Crocker, Chair San Luis Obispo County Housing Trust Fund Board of Directors Dr. Julian D. Crocker, Chair County Superintendent of Schools (2007 to Present) Rachel Richardson, Vice Chair AIDS Support Network (2003 to Present) Dick Willhoit, Treasurer Estrella Associates, Inc. (2007 to Present) Dr. Allen Haile, Secretary Cal Poly, Retired (2003 to Present) Anita Robinson Mission Community Bank (2003 to Present) R. Thomas "Tom" Jones, AIA California Polytechnic University (2005 to Present) Leonard Grant, AIA RRM Design Group (Elected in 2011) George Moylan, In Memoriam (2003 to 2005) San Luis Obispo County Housing Trust Fund 71 Zaca Lane, Suite 130 San Luis Obispo, CA 93401 Phone: 805 -543 -5970 Email: info @slochtf.org Web: www.slochtf.org Page 3 2010 — The Perfect Plan: Affordable Housing for All NEED: San Luis Local Housing Needs Obispo County was the least affordable San Luis Obispo County is consistently one of the least affordable housing markets in California and the United States. The shortage of affordable hous- small housing ing has a tremendous impact not only on those who live and work in our com- market in the United munity, but also on local employers, service providers and governments. States for eight of the While [lie housing bust caused home sales prices to drop during the last half decade, they remain far too high for most local renters and hopeful home buy- 12 quarters n 2008 i ers. According to DataQuick, the county's median home sales price peaked at $581,000 in Julie 2006. In December 2010, the median was only $365,000. throw h 2010 ugh At that tithe, the County Planning Department calculated that a low income could afford to pay only $1.70,000 for a three bedroom home while a - National Association of Home moderate income family could afford $300,000. Builders The National Association of Home Builders reported that our county was the eighth least affordable housing market in the nation during the fourth quarter of 2010. This was out of 225 metropolitan areas. Our county was also the second least affordable small housing market (500,000 population or less) in the country. We were the least affordable small housing market for eight of the 12 quarters between 2008 and 2010. The National Low Income Housing Coalition reported that the "housing wage" for a modest two - bedroom apartment in San Luis Obispo County was $22.88 per hour in 2010. Unfortunately, the median wage for renters in the county was only $10.93 per hour. The Census reported that 35.8 % of the tenants in San Luis Obispo County experienced what HUD calls a "severe housing cost burden" in 2009. These tenants paid more than 50% of their gross income for rent and utilities. For comparison, the rates of severe housing cost burden were 30.5% in LA County, 27.6 %fl in New York City and 22.3 % in San Francisco. 1; I. z Hidden Creek Village in Paso Robles has 81 rental homes and will be completed in September 2011. The HTF loaned $800,000 to help finance the project's architectural, engineering and other predevelopment costs, plus its permits and fees Page 4 San Luis Obispo County Housing Trust Fund The Perfect Plan: Affordable Housing for All 2010 The local housing market is increasingly brutal for those with very low incomes and special needs. The HUD Fair Market Rent (FMR) for a 1 -bed- room unit is currently $977. This is 18% more than a senior or disabled person currently receives from Supplemental Security Income (SSI). In 2000, SSI was nearly 20% higher than the 1- bedroom FMR. The increasing disparity between local incomes and rents is causing more people to live in substandard conditions or become homeless. The October 2005 homeless enumeration found that 2,408 individuals were homeless on a single day. In January 2011, the homeless enumeration identified 3,774 individuals. In 2011, nearly half of the county's homeless (1,847 individuals) were children and youth under the age of 18. One -third of the homeless adults were women. Both physical and psychological disabilities (28% and 31 %, respectively) were common among the county's homeless. What is the HTF? The San Luis Obispo County Housing Trust Fund is a private nonprofit corpo- ration that was formed in 2003 through cooperative efforts by local health and social service providers, businesses and government agencies. The mission and purpose of the HTF is to increase the number of homes in our community that working families, seniors with limited incomes and house- holds with special needs can afford to own or rent. Rather than build or operate affordable housing, we provide financing and technical assistance to private developers, nonprofit agencies and local governments to help them create and preserve affordable housing. We also advocate for programs and policies that support affordable housing throughout the county. The HTF has been certified as a Community Development Financial Institution or CDFI at both the state and national levels (see sidebar on CDFIs). We offer two services to support the development and preservation of affordable housing — project financing and technical assistance. We also advocate for affordable housing and to bring housing resources into our county. Project Financing The HTF fills a niche between commercial lenders and government housing programs. We offer short term loans with flexible terms to help finance pro- jects that will create, preserve or improve affordable housing throughout San Luis Obispo County. Both ownership and rental housing may be financed by the HTF, as well as housing that provides transitional and supportive living opportunities for individuals and families with special needs. Information for prospective borrowers is online at www.slochtf.org/loans.htm. The HTF has committed 40% of its resources to financing housing for low income households with special needs. The definition of households with special needs is posted online at www.sloclitf.or-g/files/sl2ecial-needs.pdf. MISSION: to increase the supply of affordable housing for very low, low and moderate income residents of San Luis Obispo County, including households with special needs. What is a CDFI? Community Development Financial Institutions or CDFIs are corporations that provide financing or financial ser- vices to address an unmet community need. While most CDFIs are nonprofit corporations, some are for - profits and others are cooperatives. Banks and credit unions can be CDFIs, as well as loan funds like the HTF. CDFIs are certified at the national level by the CDFI Fund of the US Treasury. They are certified at the state level by the COIN Program of the California Department of Insurance. The HTF received state certification in 2004 and national certification in 2007. Information on CDFIs of all types is available from the CDFI Coalition at www.cdfi.org. The HTF is a member of the Opportunity Finance Network (OFN), which is comprised primarily of CDFI loan funds. OFN's website is at www.opportunityfinance.net. Opportunity Finance ■ Network Member San Luis Obispo County Housing Trust Fund Page 5 2010 The Perfect Plan: Affordable Housing for All NEED: 86% of San Recent Loans Luis Obispo city residents reported In 2009 and 2010, the HTF closed six loans that totaled more than $4.1 p million. The loans helped to create 157 new affordable homes and preserve that "affordable the affordability of another 25. The three new developments that we helped finance during the two years are described below. housing for middle - class families" was The Village at Broad Street The Village at Broad Street i° a usedevel,..�.. ent- :. the Cii-t S • usv u� .�ivuu o a iievv' mixed uo�. uuvi.ivYiii�.ii� in �u�. �i�� of man the most serious Luis Obispo. The complex includes 42 affordable apartments and commercial space for businesses that will serve both the residents and the broader commu- problem faced by the nity. The Village at Broad Street is located in the historic railroad district behind the fire station at Broad and Santa Barbara Streets. It is at the north City end of the Broad Street Corridor, which the City hopes to redevelop into a - 2010 Citizen Satisfaction vibrant mixed use district with both commercial and residential development. Survey The sponsor of this project is ROEM Development (www.roemcorp.eom). ROEM is a for - profit developer that is headquartered in Silicon Valley. The firm was started in 1988 and has developed both market rate and affordable housing throughout California. ROEM's portfolio includes single family homes, condominiums and apartments. The HTF provided a $1.3 million loan for the Village at Broad Street in November 2009. The loan was used for site acquisition and various predevel- opment costs. This was the HTF's largest loan to date and it involved a number of firsts. It was our first loan to a for - profit developer. It was also our first loan for a new development project in the City of San Luis Obispo. Hidden Creek Village Hidden Creek Village is a new 81 -unit apartment complex in the City of Paso Robles. It is located on River Road just north of Niblick Road and very convenient to shopping, jobs and transportation. The sponsor of this project is the San Luis Obispo Non - Profit Housing Corpo- ration ( SLONP), which is affiliated with the Housing Authority of the City of San Luis Obispo (HASLO). Since incorpo- rating in 1986, SLONP has built six tax - credit developments and has acquired and rehabilitated several others. Once this project is completed, SLONP will own 303 units of affordable rental housing throughout the county. Hidden Creek Village is both SLONP's and the HTF's largest project. The HTF - _ provided a $300,000 loan in December The Village at Broad Street is a mixed use development in San Luis Obispo 2009 to pay for various predevelopment with 42 affordable apartments. The HTF loaned $1.3 million to help finance costs. Our loan was increased to the project's site acquisition and predevelopment costs. $800,000 in June 2010 to finance the Page 8 San Luis Obispo County Housing Trust Fund The Perfect Plan: Affordable Housing for All 2010 The Village at Broad Street — construction status in June 2011. project's permits and fees. Hidden Creek received the They will receive mortgages from the US Department of HTF's first loan for a project in the City of Paso Robles. Agriculture. Depending on the families' income and living expenses, these loans can have interest rates as low as 1.0 %. Oak Leaf Homes Peoples' Self -Help has been developing affordable housing Oak Leaf Homes is a single family subdivision in Nipomo on the Central Coast for 40 years. Over this period, it has that will include 32 affordable homes for low income developed more than 3,000 affordable homes and apartments households. The subdivision is located near Tefft Street and in San Luis Obispo, Santa Barbara and Ventura counties. Thompson Avenue. The HTF provided a $1.4 million loan to assist with the Peoples' Self -Help Housing Corporation (www.pshhc.org) purchase of the lots in the Oak Leaf development. This is will develop Oak Leaf Homes using the mutual self -help or currently the HTF's largest loan. It was also our first loan to sweat -equity method. Three groups of families will work Peoples' Self -Help and our first loan for a project in an together to build their own homes and those of their unincorporated area of the county. neighbors. Their labor will serve as their down payments. HTF Loan Production — 2005 to 2010 Year Borrower Location Loan Amount Use of Funds Number of Units Assisted* Total VLI LI S/N 2005 Family Care Network, Inc. Arroyo Grande $283,300 Acquisition 5 5 0 5 2005 SLO Non -Profit Housing Corp. Atascadero 700,000 Construction 19 6 13 6 2006 Habitat for Humanity Atascadero 339,000 Site acquisition 4 4 0 0 2007 Family Care Network, Inc. Atascadero 700,000 Acquisition 4 4 0 4 2009 HASLO Arroyo Grande 285,000 Preservation 1 0 1 0 2009 Laurel Creek Apartments, LP San Luis Obispo 350,000 Preservation 24 8 16 24 2009 Village at Broad Street, LP San Luis Obispo 1,300,000 Site acquisition 42 31 11 2 2009 Edna Islay Housing Corp. Paso Robles 300,000 Predevelopment 81 28 53 5 2010 Edna Islay Housing Corp. ** Paso Robles 500,000 Predevelopment " " " " 2010 Peoples' Self -Help Housing Nipomo 1,400,000 Site acquisition 34 4 30 0 Total Loans Originated $6,157,300 Totals 214 90 124 46 * VLI =Very Low Income; LI =Low Income; S17V =Special Needs "Supplemental loan Percentages 42% 58% 21% San Luis Obispo County Housing Trust Fund Page 9 2010 The Perfect Plan: Affordable Housing for All California LHTF In June 2010, the HTF received a $1.5 million grant commitment from the California Department of Housing and Community Development (HCD). The grant was made under HCD's Local Housing Trust Fund Matching Grant Program (LHTF). LHTF funds come from Proposition 1C, which the voters approved in 2006 to authnrize the sale of $2.85 million in bonds for affordable housing. The HTF applied for the LHTF grant in February 2009. We were advised that our application received a competitive ranking in May of that year. Unfortu- nately, the award was delayed by more than a year due to the state budget crisis. The state contract was finally executed on December 1, 2010. We expect to close loans using LHTF funds during 2011 and 2012. We must match our LHTF grant with $1.875 million from other sources. At least 30% of our LHTF funds and the required matching funds must be used to benefit extremely low income house- holds — those who earn no more than 30% of the area median income (AMI). The balance must benefit low or very low income households — those who earn up to 80% of AMI. LHTF funds may only be used in juris- dictions that had a HCD- certified housing element at the time we applied for the funds. Consequently, LHTF funds may not be used in Atascadero and Pismo Beach even though they subsequently adopted HCD - certified housing elements. More information on our LHTF funds is online at www.slochtf.org /lhtfhtm. Revolving Loan Funds At the end of 2010, the Housing Trust Fund had nearly $6.3 million in revolv- ing loan funds, including commitments. We had nearly $3.6 million social or community investments and $2.7 million in grants and donations. Our loan funds have grown steadily since 2004, when Mission Community Bank committed $1 million to start our loan fund. Rabobank followed a year later and is now our largest investor with $1.1 million. Our third largest inves- tor is Catholic Healthcare West, which owns local hospitals, with $750,0000. We also have a $200,000 Program Related Investment (PRI) from the Sachs Foundation and nine investments from various religious communities. Until late 2009, almost all of our loan funds were private investments. We also had roughly $200,000 in private grants and donations. At that time, there was no government money in our loan funds. This changed dramatically in December 2009, when we received our first $500,000 grant from the CDFI Fund of the US Treasury. We received a second CDFI Fund grant in October 2010. We also received a $1.5 million grant commitment from the California Local Housing Trust Fund Matching Grant Program or LHTF in 2010 (see sidebar). We now we have $2.5 million in government grants available to lend. The sources and amounts in our loan funds, including legally committed funds, is summarized below. Loan Funds as of December 31, 2010 Loan Fund Investments* Amount Rabobank (two investments) Mission Community Bank $1,100,000 1,000,000 Catholic Healthcare West (two investments) 750,000 Sisters of Charity of Cincinnati (three investments)* 203,303 Erich and Hannah Sachs Foundation 200,000 Religious Communities Investment Fund (two investments) 150,000 Adrian Dominican Sisters (two investments) 100,000 Sisters of St. Francis of Philadelphia 50,000 Sisters of the Sorrowful Mother 25,000 Total Investments $3,578,303 Loan Fund Equity* Amount California Local Housing Trust Fund Matching Grant Program* $1,500,000 CDFI Fund of the US Treasury 1,000,000 California Association of Realtors 125,000 George Moylan Affordable Housing Fund 79,639 Total Loan Fund Equity $2,704,639 * Includes funds that were committed, but not yet received. Page 10 San Luis Obispo County Housing Trust Fund The Perfect Plan: Affordable Housing for All 2010 Financial Statements Operating Support The following organizations, businesses The following are summaries from our annual financial statements for 2009 n idividuals have supported the and and n and 2010, which were audited by The Crosby Company, CPAs. Copies of our operations.* (Listed in alpha- audits are available online at www.slochtforg /about- us.htm. betic order within each category) Financial Position 12/31/09 12/31/10 Local Public Agencies Assets City of Arroyo Grande Current Assets: City of Atascadero Cash and cash equivalents $341,113 $243,785 City of Grover Beach Accounts receivable 193 1,033 City of Morro Bay Prepaid expenses 3,124 5,296 City of Paso Robles Interest receivable 13,527 13,885 City of Pismo Beach Notes receivable (current portion) 1,430,431 147,733 City of San Luis Obispo Total Current Assets $1,788,388 $411,732 County of San Luis Obispo Non - Current Assets: Housing Authority of the City of San Notes receivable (non - current portion) $1,388,542 $3,207,074 Luis Obispo (HASLO) Total Assets $3,176,930 $3,618,806 Banks and Lenders Liabilities Bank of America Current Liabilities: Heritage Oaks Bank Accounts payable $206 $3,537 Mission Community Bank Accrued payroll tax liabilities 5,149 5,872 Rabobank Accrued interest payable 5,524 4,812 Union Bank of California Accrued vacation payable 6,817 8,614 US Bank Notes payable (current portion) _ 12,969 9,245 Total Current Liabilities $30,665 $32,080 Other Supporters Long -Term Liabilities: Cal Poly Foundation Lines of credit $1,097,500 $600,000 Community Action Partners of SLO Notes payable (non - current portion) 1,093,303 1,469,058 County Total Long -Term Liabilities $2,190,803 $2,069,058 Home Builders Association of the Total Liabilities $2,221,468 $2,101,138 Central Coast Net Assets Peoples' Self -Help Housing Corp. Unrestricted - undesignated $174,198 $108,029 Anne and Charles Quinn Unrestricted - board designated 84,678 209,678 Resident Owned Parks, Inc. Temporarily restricted 500,000 1,000,000 SLO County Community Foundation Permanently restricted 196,586 19_9,961 Sinsheimer Juhnke Lebens & Total Net Assets $955,462 $1,517,668 Mclvor ** Total Liabilities and Net Assets $3,176,930 $3,618,806 Supportive Housing Consortium TechSoup ** Activity United Way of SLO County Revenue Grants $600,154 $597,775 * Those who exclusively contributed to or Contributions 63,186 23,375 invested in our revolving loan funds are In -kind donations 840 1,114 not included in this list. ** These supporters provided significant in- Interest & loan fees 102,803 197,073 kind contributions. Total Revenue $766,983 $819,337 Expenses Program Services $152,178 200,027 Management & General 38,114 39,803 Fund Raising 20,783 17,301 Total Expenses $211,075 $257,131 Increase in Net Assets $555,908 $562,206 San Luis Obispo County Housing Trust Fund Page 11 Thank You to our Partners & Supporters The San Luis Obispo County Housing Trust Fund wishes to acknowledge and thank the following partners and supporters who helped to underwrite both our operations and our revolving loan funds. � 4k � mission COMMUNITY BANK [RICH & HANNAH SACHS FOUNDATION 41 CHW C n w { Q f L N CAl110Rtl1A A%SuC1AT10ri o/ RIAITORf• I w low- NOUSING AffOl0A11till FUND Bankof America First American Title Company Heritage Oaks Bank 1, A bank. COMMUNITY DEVELOPMENT FINANCIAL INSTITLMONS FUND LINITLL) ST, %Tt , DF`.p:1:1tT:N1E1\`£- 011 ITIE >"RLALSL.l1t)- i San Luis Obispo County Housing Trust Fund 71 Zaca Lane, Suite 130, San Luis Obispo, CA 93401