HomeMy WebLinkAbout02-06-2018 Item 06 Affordable Housing Fund Request for Courtyard at the Meadows (HASLO) Meeting Date: 2/6/2018
FROM: Michael Codron, Community Development Director
Prepared By: Cara Vereschagin, Planning Technician
SUBJECT: AFFORDABLE HOUSING FUND ALLOCATION FOR COURTYARD AT
THE MEADOWS ($630,000)
RECOMMENDATION
Adopt a resolution approving Affordable Housing Fund allocations in the amount of $630,000 to
assist with construction costs for a 36-unit affordable housing project at 3175 Violet Street.
DISCUSSION
The Affordable Housing Fund (AHF) has been collected from commercial and residential
developers to meet the City’s Inclusionary Housing Ordinance “in-lieu” of those developers
providing actual housing units. State planning and zoning law requires the fund to be used only
for the purpose that it was established – to support affordable housing in the City o f San Luis
Obispo. These funds are awarded at the City Council’s sole discretion, based on previously
adopted criteria (Attachment A). Requests for AHF support are evaluated by staff and forwarded
to the City Council for consideration. The project requesting funds is described below and
evaluated for how it meets these criteria.
Overview of Request
The Housing Authority of San Luis Obispo (HASLO) and the San Luis Obispo Nonprofit
Housing Corporation (SLONP) is requesting an allocation of $630,000 in Affordable Housing
Funds for the Courtyard at the Meadows project (Attachment B).
The Courtyard at the Meadow project is located within the Serra Meadows residential
development. To comply with the City’s inclusionary housing requirements, 27 affordable un its
were conditioned for the neighborhood. Of the 27 units, 18 were to be available to 120% Area
Median Income (AMI) or a workforce level of affordability, and the remaining 9 were to be
available to 80% AMI or moderate-income affordability. In a collaboration between HASLO
and SLONP, t he Courtyard at the Meadows project proposes 36 affordable units (9 more than
required), available to 50% and 60% AMI, or very-low and low-income residents (substantially
increasing the affordability level). The project will feature 9 one-bedroom, 18 two-bedroom, and
9 three-bedroom units, including a manager’s unit.
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The requested amount of $630,000 from the City’s Affordable Housing Fund will assist HASLO
and SLONP to compete with federal low-income housing tax credits. This award of City
funding will leverage over $12 million in other financing sources. Since Courtyard at the
Meadows proposes 36 affordable housing units, beyond the 27 originally required by the
inclusionary housing requirement for the Serra Meadows development, this AHF allocation will
ensure deeper affordability levels for the community. The table below visually displays this
significant added value Courtyard at the Meadows proposes, in relation to the original Serra
Meadows requirement.
Scenarios Unit Count Affordability Level of
units
Serra Meadows
Inclusionary Housing
Requirement
27 units
18 units 120% AMI
(workforce)
9 units 80% AMI
(moderate)
Courtyard at the
Meadows Proposal 36 units
31 units 60% AMI
(low-income)
4 units 50% AMI
(very-low income)
Value Gained 9 units Affordability Doubles
AWARD CRITERIA
In making its recommendations to City Council for how AHFs should be allocated, staff
considers Council adopted criteria including: eligibility, need, suitability, timing, financial
effect iveness, and readiness (Attachment A). The following is an analysis of the request relative
to the criteria.
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:
Courtyard at the Meadows Project is eligible for Affordable Housing Funds because it
increases the City’s affordable housing inventory and implements several General Plan
policies regarding housing. The project will increase the supply of affordable housing for
very-low and low- income households with the construction of 36 units.
Need. There exists a substantial or overarching need for the type of unit to be assisted, as
follows:
The City of San Luis Obispo has a substantial need for affordable housing to meet goals
stated in the City’s General Plan Housing Element . San Luis Obispo County had one of
the lowest rental housing vacancy rates in the State of California at 1.7%, according to
the California State Department of Finance. Courtyard at the Meadows will provide
affordable, rental housing opportunities for the community, which directly supports the
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Housing Major City Goal to produce housing types to be economically feasible for lower
income residents.
Suitability. The project to be assisted is appropriate for its location both in terms of land use
and design, as follows:
Courtyard at the Meadows is ideally suited for this location, as the Residential
Multifamily R-3 zoning classification is consistent with the proposed use. The Spanish
architectural design style is reflective of the Margarita Area Specific Plan, featuring low
slope roofs, mission tile, recessed exterior window faces and arched openings. All
elevations are visually interesting, providing intriguing architectural treatments that
enhance all views of the structures. Thus, Courtyard at the Meadows received unanimous
approval by the Ar chitectural Review Commission in September 2016.
Timing. The project would better serve the City’s needs if it were built immediately as opposed
to later, as follows:
Courtyard at the Meadows has received all local approvals and is preparing to submit for
a building permit application. The project is also assembling various competitive sources
for financing. In March 2018, HASLO will apply to the California Debt Limit Allocation
Committee for an allocation of private activity bond tax exempt financing, and to the
California Tax Credit Allocation Committee for an allocation of Low -Income Housing
Tax Credits. Construction of the project is expected to begin in late 2018.
Financial Effectiveness. But for the requested assistance, the project would not be
economically feasible; or AHF funding “leverages” significant additional funding from other
sources, as follo ws:
This is a highly effective use of t he City's Affordable Housing Funds, as it will leverage
at least $12 million in other funds for Courtyard at the Meadows. The 36 units will
remain affordable for 55 years pursuant to a low-income housing tax credit (LIHTC)
regulatory agreement. Additionally, HASLO will ensure that the units will remain
permanent affordable housing resources for the community. Project financial feasibility
is dependent upon Affordable Housing Funds.
Readiness. The project has all necessary City approvals and is ready to proceed, as follows:
Courtyard at the Meadows has obtained all the necessary City discretionary approvals.
HASLO intends to apply for a building permit in March 2018. Upon the award of a City
Affordable Housing Fund award, HASLO will be eligible to apply for Low Income
Housing Tax Credits, and other private activity bond financing. S hould the project
receive all funding, HASLO/SLONP anticipates starting construction in late 2018.
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STATUS OF THE AFFORDABLE HOUSING FUND
A current status report on the AHF is included (Attachment C). The report indicates that if the
proposed allocations are approved by the City Council, the fund will retain $1,123,088 to
allocate to future affordable housing projects.
Staff is recommending funding for the request listed in the table below. The attached resolution
(Attachment D) recommends funding for a total of $630,000. The proposed funding amounts to
approximately 36% of the funds currently available to be allocated to new pro jects. Based on the
recent previous years of years of building permit activity, it can be hypothesized that this funding
amount will be restored to the AHF in the upcoming years.
Current Requests/Proposed Allocations AHF Available Balance $1,753,088
Courtyard at the Meadows 36 Units $630,000
Total Requests 36 Units $630,000
Net Available for New Programs if Current Request Approved $1,123,088
ENVIRONMENTAL REVIEW
The authorization to submit an Affordable Housing Fund request is exempt from environme ntal
review per Section 15061 (b)(3) General Rule of the CEQA Guidelines. In addition, the project
is an action to award funding, and is located within the Margarita Area Specific Plan (MASP).
The City Council certified the Final Program EIR for the MASP on October 12, 2004. On April
15, 2014, the City Council adopted the Tiered Initial Study and Mitigated Negative Declaration
(MND) which addressed the changes and revisions to Tract #2342 and #2353. Lot 108 of Tract
#2353 was to be dedicated for afforda ble housing, thus it was determined through the entitlement
process that Courtyard and the Meadows was consistent with the Mitigated Negative
Declaration, and all mitigation measures adopted as part of the MASP EIR and Subsequent
Tiered MND were applicable to the project are carried forward and applied to the project to
effectively mitigate the impacts previously identified.
FISCAL IMPACT
The recommended allocations would be in the form of loans paid out of the AHF, which consists
of in-lieu fees collected under the City’s Inclusionary Housing Ordinance. The AHF may only be
used for projects or purposes that create or support affordable housing within the City. The
project will have no impact on the General Fund. AHF loans typically have a 20 to 30 year term
with a rate of 3-4% simple interest. The details of each loan will be finalized prior to release of
funds and structured specific to each project’s financing package. Based on prior expenditures
and pending commitments, there will be a balance of $1,123,088 remaining in the AHF after this
award.
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ALTERNATIVES
1. Do not authorize AHF awards for the proposed project. This action is not recommended
because the project appears to meet the criteria for AHF assistance and are consistent
with the Housing Ele ment of the General Plan. This would also affect the Project’s
eligibility to compete for additional federal funding.
2. Approve an AHF award for a different amount. The City Council can approve an award
for a different amount other than the recommendation. This is not recommended as the
project has carefully considered its need for assistance and the amounts requested reflect
what is needed for successful financing of the project.
3. Continue consideration of the proposed award. The City Council can direct staff to
return with additional information regarding the funding request so that a final decision
on the award amount can be made. Staff does not recommend this action because this
delay in time would not allow for SLONP to include the City’s commitment for funding
in their Low-Income Housing Tax Credit application.
Attachments:
a - Reso 9263 Establish Affordable Housing Fund Criteria
b - Courtyard_AHFundRequest_HASLO_1.10.18
c - AHF status report 1.1.18
d - Resolution
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Suitability
Courtyard at the Meadows is zoned R-3 Residential Multifamily, consistent with the proposed use. The
Spanish architectural style is consistent with the Margarita Area Specific Plan and features low slope
roof, mission tile, recessed exterior window faces and arched openings. All elevations are visually
interesting and receive interesting architectural treatments that enhance views of the structures from all
views on and off site. The Architectural Review Committee unanimously approved the project in
September 2016.
Timing
Courtyard at the Meadows has received all local approvals and is preparing to submit for a building
permit application. The project is assembling various competitive sources of financing. In March 2018
HASLO will apply to the California Debt Limit Allocation Committee for an allocation of private activity
bond tax exempt financing, and to the California Tax Credit Allocation Committee for an allocation of
Low-Income Housing Tax Credits. Construction is expected to begin in late 2018.
Financial Effectiveness
This is a highly effective use of the Affordable Housing Funds; they will leverage an estimated $12 million
in other federal, state, and private financing. The apartments will remain affordable for 55 years
pursuant to a LIHTC regulatory agreement. Additionally, HASLO's as a public agency will ensure that the
units remain a permanent affordable housing resource for the community. Project financial feasibility is
dependent upon Affordable Housing Funds.
Readiness
Courtyard at the Meadows has obtained all the necessary City discretionary approvals. HASLO intends
to apply for a building permit in March 2018. Upon award of the Affordable Housing Funds, HASLO will
apply for Low Income Housing Tax Credits and private activity bond financing. The project is scheduled
to start construction in late 2018.
We appreciate your consideration of our funding request and are happy to answer any questions you
may have.
Ex
HASLO
(805)594-5323
ssmith@haslo.org
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City of San Luis Obispo
Fiscal Status of Affordable Housing Fund
January 1, 2018 - Point in Time Status
Revenues, Expenditures and Changes in Fund Balance
Expenditures
Fiscal Year In-Lieu Fees Interest Rents
BEGIN
funds
reimbursem
ent
BEGIN
reuse
funds*
BEGIN City
matching
funds*Total Beginning Ending
2000-01 193,700 8,200 201,900 201,900
2001-02 464,900 20,000 484,900 201,900 686,800
2002-03 747,800 28,300 776,100 (215,000) 686,800 1,247,900
2003-04 60,500 8,500 69,000 (30,000) 1,247,900 1,286,900
2004-05 323,300 32,500 355,800 (30,000) 1,286,900 1,612,700
2005-06 1,863,700 68,500 1,932,200 1,612,700 3,544,900
2006-07 627,200 160,500 787,700 (530,000) 3,544,900 3,802,600
2007-08 682,400 155,600 838,000 (630,000) 3,802,600 4,010,600
2008-09 465,700 199,700 1,400 666,800 (892,500) 4,010,600 3,784,900
2009-10 (21,300) 32,600 9,000 270,000 290,300 (3,407,600) 3,784,900 667,600
2010-11 332,800 16,000 3,900 30,000 382,700 (39,800) 667,600 1,010,500
2011-12 848,800 21,900 870,700 (112,700) 1,010,500 1,768,500
2012-13 182,700 700 183,400 (30,000) 1,768,500 1,921,900
2013-14 777,300 12,700 100,955 117,857 1,008,812 (47,000) 1,921,900 2,883,712
2014-15 159,602 9,193 86,430 93,121 348,346 (697,000) 2,883,712 2,535,058
2015-16 625,506 34,414 659,920 (636,978) 2,535,058 2,558,000
2016-17 1,130,587 15,079 359,081 1,504,747 (1,490,919) 2,558,000 2,571,828
2017-18 98,877 29 1560 100,466 - 2,571,828 2,672,295
Cumulative Total 9,564,072 824,415 373,381 301,560 187,385 210,978 11,461,791 (8,789,497) 2,672,295
Commitments Not Yet Funded
Commitment to the General Fund Transfer (52,000)
Commitment for Iron Works Affordable Housing paid
Commitment to remaining BEGIN Downpayment Assistance Loans (17,207)
Commitment to Bishop Street Studios (850,000)
Total Available for New Progams as of January 1, 2018 1,753,088
Revenues Fund Balance
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R ______
RESOLUTION NO. XXXX (2018)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING AFFORDABLE HOUSING FUND
AWARD TO THE HOUSING AUTHORITY OF SAN LUIS OBISPO AND
SAN LUIS OBISPO NONPROFIT HOUSING CORPORATION FOR
COURTYARD AT THE MEADOWS IN THE AMOUNT OF $630,000
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 February 6, 2018, for
the purpose of considering a request for Affordable Housing Fund (AHF) assistance; and
WHEREAS, the Courtyard at Meadows Project proposed by the Housing Authority of
San Luis Obispo (HASLO) and the San Luis Obispo Nonprofit Housing Corporation (SLONP)
located at 3175 Violet Street, San Luis Obispo, meets eligibility criteria established by the City
Council; and
WHEREAS, Housing Element policies and programs encourage and support the
maintenance and rehabilitation of existing affordable housing as well as 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 presented at
said meeting.
NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of San Luis
Obispo as follows:
SECTION 1. Environmental Determination. The project is exempt from environmental
review per Section 15061 (b)(3) General Rule of the CEQA Guidelines. The project is an action
to award funding. Co urtyard at the Meadows was determined to be consistent with the Mitigated
Negative Declaration of Environmental Impact of the Margarita Area Specific Plan by the City
Council on April 15, 2014.
SECTION 2. 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 rega rding housing, as
follows:
Courtyard at the Meadows Project is eligible for Affordable Housing Funds because it
increases the City’s affordable housing inventory, and implements several General Plan
policies regarding housing. The project will increase t he supply of affordable housing for
very-low and low- income households with the construction of 36 units.
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Resolut ion No. _____ (2018 Series) Page 2
R ______
2. Need: There exists a substantial or overarching need for the type of unit to be assisted, as
follows:
The City of San Luis Obispo has a substantial need for affordable housing to meet goals
stated in the City’s General Plan Housing Element. San Luis Obispo County had one of the
lowest rental housing vacancy rates in the State of California at 1.7%, according to the
California State Department of Finance. Courtyard at the Meadows will provide affordable,
rental housing opportunities for the community.
3. Suitability: The project to be assisted is appropriate for its location both in terms of land use
and design, as follows:
Courtyard at the Meadows is ideally suited for this location, as the Residential Multifamily
R-3 zoning classification is consistent with the proposed use. The Spanish architectural
design style is reflective of the Margarita Area Specific Plan, featuring low slope roofs,
mission tile, recessed exterior window faces and arched openings. All elevations are visually
interesting, providing intriguing architectural treatments that enhance all views of the
structures. Thus, Courtyard at the Meadows received unanimous approval by the
Architectural Review Commission in September 2016.
4. Timing: The project would better serve the City’s needs if it were built immediately as
opposed to later, as follows:
Courtyard at the Meadows has received all local approvals and is preparing to submit for a
building permit application. The project is also assembling various competitive sources for
financing. In March 2018, HASLO will apply to the California Debt Limit Allocation
Committee for an allocation of private activity bond tax exe mpt financing, and to the
California Tax Credit Allocation Committee for an allocation of Low -Income Housing Tax
Credits. Construction of the project is expected to begin in late 2018.
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 City's Affordable Housing Funds, as it will leverage at
least $12 million in other funds for Courtyard at the Meadows. The 36 units will remain
affordable for 55 years pursuant to a low-income housing tax credit (LIHTC) regulatory
agreement. Additionally, HASLO will ensure that the units will remain permanent
affordable housing resources for the community. Project financial feasibility is dependent
upon Affordable Housing Funds.
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Resolut ion No. _____ (2018 Series) Page 3
R ______
6. Readiness: The project has all necessary City approvals and is ready to proceed, as follows:
Courtyard at the Meadows has obtained all the necessary City discretionary approvals.
HASLO intends to apply for a building permit in March 2018. Upon the award of a City
Affordable Housing Fund award, HASLO will be eligible to apply for Low Income Housing
Tax Credits, and other private activity bond financing. Should the project receive all
funding, HASLO/SLONP anticipates starting construction in late 2018.
SECTION 3. AHF Award, HASLO/SLONP (Courtyard at the Meadows). The City
Council does hereby approve an AHF award in an amount not to exceed $630,000, 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 36 for-rent affordable housing units located at 3175
Violet Street for a term of 55 years, which will be recorded against the title of the property.
The form of said agreement shall be subject to the approval of the City Attorney.
Upon motion of , seconded by , and on the
following vote:
AYES:
NOES:
ABSENT:
The foregoing resolut ion was adopted this 6th day of February 2018.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Carrie Gallagher
City Clerk
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Resolut ion No. _____ (2018 Series) Page 4
R ______
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, this ______ day of ______________, _________.
____________________________________
Carrie Gallagher
City Clerk
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