HomeMy WebLinkAboutItem 05 - Peoples' Self-Help Housing Corporation's Request of Affordable Housing Funds for two new Affordable Housing Developments (Tiburon Place & Broad Street Place)
Department Name: Community Development
Cost Center: 4008
For Agenda of: January 21, 2020
Placement: Consent
Estimated Time: N/A
FROM: Michael Codron, Community Development Department
Prepared By: Cara Vereschagin, Housing Coordinator
SUBJECT: PEOPLES’ SELF-HELP HOUSING CORPORATION’S REQUEST OF
AFFORDABLE HOUSING FUNDS FOR TWO NEW AFFORDABLE
HOUSING DEVELOPMENTS
RECOMMENDATION
1. Adopt a Resolution (Attachment A) approving an Affordable Housing Fund loan in the
amount of $700,000 to assist with construction costs for Tiburon Place, a 68-unit affordable
housing project located at 3750 Bullock Lane; and
2. Adopt a Resolution (Attachment B) approving an Affordable Housing Fund loan in the
amount of $1,300,000 ($1,500,000 requested) to assist with construction costs for Broad
Street Place, a 40-unit affordable housing project located at 3720 Broad Street.
DISCUSSION
Background – City’s Affordable Housing Fund
The City’s Affordable Housing Fund (AHF) receives funding from commercial and residential
developers to meet the City’s Inclusionary Housing Ordinance “in-lieu” of those developers
providing actual housing units within their projects. 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 of San Luis Obispo. These funds are awarded at the City Council’s sole discretion, based on
previously adopted criteria (Attachment C). Requests for AHF support are evaluated by staff
and forwarded to the City Council for consideration. The projects requesting funds are described
below and are both evaluated for how they meet these criteria and why they are recommended
for funding.
REQUEST FOR TIBURON PLACE AT 3750 BULLOCK LANE
Overview of Request
Peoples’ Self-Help Housing Corporation (PSHHC) is requesting an allocation of $700,000 in
AHFs for the Tiburon Place Project (Attachment D).
The Tiburon Place Project will be located within the City’s Orcutt Area. To comply with the
City’s inclusionary housing requirements for Tract #3063 (Righetti Ranch), Tract #3066 (Jones
Ranch), Tract #3095 (Imel Tract), and the Pratt Property, 54 units were approved to be dedicated
to PSHHC for construction, as referenced in the Affordable Housing Agreement and Declaration
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of Restrictive Covenants, recorded on July 28, 2017 as Document No. 2017033670 (Attachment
E). The 54 units dedicated to PSHHC initially included 42 units available to 80% Area Median
Income (AMI), or a “low” income level of affordability, and 12 units available to 120% AMI or
“moderate” income level of affordability. However, PSHHC is developing the Tiburon Place
Project with a total of 68 affordable units, which is 14 units beyond the original requirement.
Additionally, it is increasing the affordability level of these units, such that the project will
provide units available to 30% to 60% AMI, or extremely low, very low, and low-income
residents. The number of units and deep affordability proposed warrants the City’s consideration
of an Affordable Housing Fund award.
The requested amount of $700,000 from the City’s AHF will assist PSHHC to compete with
applications for additional funding sources, including to the State’s Affordable Housing
Sustainable Communities program, California Tax Credit Committee, and California Debt Limit
Allocation Committee. Since Tiburon Place Project proposes 68 affordable housing units, 14
units beyond the 54 originally required by the inclusionary housing requirement for the four
residential developments in the Orcutt Area, this AHF allocation will ensure deeper affordability
levels for the community. The table below displays this significant added value Tiburon Place
proposes, in relation to the original Orcutt Area requirement.
Orcutt Area Inclusionary Housing Requirement
for Tracts #3063, #3066, #3095, and the Pratt
Property
Proposed Affordability Level
Affordability Level AMI
Target
Units
Provided
AMI
Target
Units
Provided
Unit Type
Distribution
Extremely Low
Income 30% 30% 15
4 Studios, 5 1-
bedrooms, 6 2-
bedrooms
Very Low Income 45% 45% 8
2 Studios, 3 1-
bedrooms, 3 2-
bedrooms
Very Low Income 50% 50% 6
2 Studios, 2 1-
bedrooms, 2 2-
bedrooms
Low Income 55% 55% 8
2 Studios, 3 1-
bedrooms, 3 2-
bedrooms
Low Income 60% 60% 30
6 Studios, 12 1-
bedrooms, 12 2-
bedrooms
Low Income 80% 42 80%
Moderate Income 120% 12 120%
Total 54 68
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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
effectiveness, and readiness. 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:
The Tiburon Place Project is eligible for AHFs because it increases the City’s affordable
housing inventory and implements several General Plan policies regarding housing. The
Tiburon Place Project will increase the supply of affordable housing for extremely low,
very low, and low-income households with the construction of 68 units, which provides
14 additional units and deeper affordability than City requirements for this project site.
Need. There exists a substantial or overarching need for the type of unit to be assisted, as
follows:
By proposing 68 units, PSHHC is exceeding the required inclusionary units by 14 units -
a 25% increase. Housing needs in general are growing along the coastal areas and this is
particularly true for lower income households. The City of San Luis Obispo will benefit
greatly from this development because of the increased density that comes with the
proposal as well as the deeper AMI targeting displayed in the table above.
Suitability. The project to be assisted is appropriate for its location both in terms of land use and
design, as follows:
The Tiburon Place Project is ideally suited for this location, both in terms of land use and
design. The Orcutt Area Specific Plan (OASP) has given due attention to meeting the
needs of the lower income residents of the City. The rental housing proposed for this
funding will serve to implement the goals set by the OASP as well as fulfilling the City’s
Regional Housing Needs Allocation (RHNA) goals.
Timing. The project would better serve the City’s needs if it were built immediately as opposed
to later, as follows:
The Tiburon Place Project has received all local approvals and is preparing to submit for
building permit applications. PSHHC has also been working closely with the owner of
the various Tracts the inclusionary housing requirement is associated with, Righetti
Ranch LP, on donating the land and preliminary site planning related to the Tiburon
Place Project’s location.
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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
follows:
This is a highly effective use of the City's AHFs, as it will leverage additional funding
sources as they demonstrate local support and commitment to the development. These
funding sources include the Federal Home Loan Bank’s Affordable Housing Program
(AHP), federal HOME and CDBG funds, and the State’s Affordable Housing Sustainable
Communities grant program. Tiburon Place Project financial feasibility is dependent
upon AHFs.
Readiness. The project has all necessary City approvals and is ready to proceed, as follows:
PSHHC has obtained all the necessary City discretionary approvals for the Tiburon Place
Project. Upon the award of City AHFs, PSHHC will be eligible to apply for additional
public funding programs and other private activity bond financing. Should the project
receive all funding, PSHHC anticipates starting construction in 2020.
REQUEST FOR BROAD STREET PLACE AT 3720 BROAD STREET
Overview of Request
PSHHC is also requesting an allocation of $1,500,000 in AHFs for the construction of its Broad
Street Place Project (Attachment F). It will be located on Broad Street, across from Damon-
Garcia Sports Fields, and will include both residential and commercial uses. The Broad Street
Place Project contains 40 units, that will be affordable to extremely low, very low, and low-
income households. The residential units will consist of both 1-bedroom, 2-bedroom, and 3-
bedrooms, which is further displayed in the following table.
Affordability
Level
AMI
Target
Units
Provided Unit Size Distribution
Extremely
Low Income 30% 5 1 1-bedroom, 2 2-bedrooms, 2 3-
bedrooms
Very Low
Income
45-
50% 24 5 1-bedroom, 14 2-bedrooms, 5 3-
bedrooms
Low Income 60% 10 4 1-bedroom, 3 2-bedrooms, 3 3-
bedrooms
Manager’s
Unit 1 1 3-bedroom
Total 40
However, staff is recommending allocating a total of $1,300,000 in AHFs to the construction of
Broad Street Place. An award of $1,300,000 is consistent with the City’s historic average AHF
awards for affordable housing construction costs. Additionally, an award of $1,300,000 will
allow for the City to maintain a healthy buffer of available AHF dollars for future funding
requests in the upcoming year.
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Award Criteria
The following is an analysis of the request relative to the Award Criteria, previously explained
above.
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:
The Broad Street Place Project is eligible for AHFs 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 extremely low,
very low, and low-income households with the construction of 40 units.
Need. There exists a substantial or overarching need for the type of unit to be assisted, as
follows:
By proposing 40 units, PSHHC will be significantly contributing to the City’s RHNA
allocation for the extremely low, very low, and low-income categories. Housing needs in
general are growing along the coastal areas and this particularly true for lower income
households. The City of San Luis Obispo will benefit greatly from this development
because of the increased density that comes with the proposal as well as the deeper AMI
targeting displayed in the table above.
Suitability. The project to be assisted is appropriate for its location both in terms of land use and
design, as follows:
The Broad Street Place Project is designed to be consistent with the character of the
neighborhood, taking cues from the adjacent Iron Works affordable housing development
as well as other commercial, industrial, and residential buildings in the vicinity. The
development of this parcel will improve a vacant and underutilized property in an
urbanized area in the City and enhance the Broad Street corridor by creating new mixed-
income and affordable rental housing opportunities, as well as new high-quality
commercial space for small businesses along the Broad Street frontage.
Timing. The project would better serve the City’s needs if it were built immediately as opposed
to later, as follows:
The Broad Street Place Project has received all local approvals and is preparing to submit
for a building permit application. PSHHC is ready to receive local funds to assist in
leveraging competitiveness for California low income tax credits, when they apply in
July 2020. As PSHHC moves forward with retaining additional funding sources,
commitment of local funds enhances the time-value of financing; realizing a project
sooner rather than later, with all associated due diligence review and analysis, represents
potential cost savings related to the local community investment.
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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
follows:
In terms of financial feasibility, early commitment of local affordable housing funds is
important. These funds provide basis for attracting additional funding sources as they
demonstrate local support and commitment to the development. Along with other forms
of shallow subsidies such as, the Federal Home Loan Bank’s Affordable Housing
Program (AHP), federal HOME and CDBG funds, and other potential resources, they
serve as leverage for significant sources such as tax credit financing. All tax credit
funding applications score maximum points with respect to project scoring criteria, the
ultimate tiebreaker is the amount of commitment of additional financing from other
resources. Tax credit financing often represents upwards of 50% plus of overall project
financing and the amount of tax credits awarded a project is underwritten in the context
of the “gap” between committed funds and total development costs. To leverage tax
credit funding is of great community benefit and in some measure may be up to a 1-to-10
ratio between what local fund and other project financial resources. Thus, the Broad
Street Place Project’s financial feasibility is dependent upon City AHFs.
Readiness. The project has all necessary City approvals and is ready to proceed, as follows:
PSHHC has obtained all the necessary City discretionary approvals for the Broad Street
Place Project. Upon the award of a City AHFs, PSHHC will be eligible to apply for
additional public funding programs and other private activity bond financing. Should the
project receive all funding, PSHHC anticipates starting construction in 2020.
PUBLIC ENGAGEMENT
As this is a request for City AHFs, the project has a “notify” level of engagement under the
Public Engagement and Notification Manual. Public comment can be provided to the City
Council through written correspondence prior to the meeting and through public testimony at the
meeting.
ENVIRONMENTAL REVIEW
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.
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FISCAL IMPACT
Budgeted: No Budget Year: 2019-2020
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Funding
Requested
(Tiburon
Place)
Funding
Requested
(Broad
Street
Place)
Funding
Recommended
(Tiburon
Place)
Funding
Recommended
(Broad Street
Place)
General Fund
State
Federal
Fees
Other: City
AHF
$700,000 $1,500,000 $700,000 $1,300,000
Total $2,200,000 $2,000,000
The Affordable Housing Fund has a current balance of $2,421,000 and can support staff’s
recommendation, leaving a buffer of funds for additional projects staff anticipates requests for in
the coming year. However, given the level of available funding and in consideration of typical
award amounts, staff’s recommendation is lower than the original request from PSHHC for
Broad Street Place. The decision to award $1,300,000 rather than the request of $1,500,000 is
consistent with previous AHF awards for affordable housing construction costs.
Subsequent communication with PSHHC lead to the recommendation to fully allocate the
requested funding for the Tiburon Place Project and lowering the allocation to Broad Street Place
as outlined in the recommendation.
If these recommendations are approved by the City Council, the AHF will retain $421,000 of
available funds for assistance with future affordable housing projects. Current development
activity also indicates that additional impact fees will be collected in the AHF, which will
increase the available funding over time.
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.
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ALTERNATIVES
1. Do not authorize AHF awards for the proposed projects. This action is not recommended
because both the projects meet all of the criteria for AHF assistance and are consistent with
the Housing Element of the General Plan.
2. Approve AHF awards in different amounts. The City Council can approve awards in
different amounts other than the recommendations. This is not recommended as both projects
have carefully considered their need for assistance and the amounts requested reflect what is
needed for successful financing of the projects.
3. Continue consideration of the proposed awards. The City Council can direct staff to return
with additional information regarding the funding request so that a final decision on the
different award amounts can be made. Staff does not recommend this action because this
delay in time would not allow for PSHHC to include the City’s commitment for funding in
their various additional funding applications.
Attachments:
a - Draft Resolution - Tiburon Place AHF
b - Draft Resolution - Broad Street Place AHF
c - Affordable Housing Fund Criteria
d - Tiburon Place AHF Request Letter
e - COUNCIL READING FILE - Affordable Housing Agreement and Declaration of
Restrictive Covenant 2017
f - Broad Street Place AHF Request Letter
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R ______
RESOLUTION NO. _____ (2020 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING AN AFFORDABLE HOUSING
FUND AWARD TO PEOPLES’ SELF-HELP HOUSING CORPORATION
FOR TIBURON PLACE IN THE AMOUNT OF $700,000.
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 January 21, 2020, for the purpose
of considering a request for Affordable Housing Fund (AHF) assistance; and
WHEREAS, the proposed project, Tiburon Place, by Peoples’ Self-Help Housing
Corporation (PSHHC) meets the award 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; 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:
Tiburon Place 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 extremely low,
very low, and low-income households with the construction of 68 units.
2. Need: There exists a substantial or overarching need for the type of unit to be assisted,
as follows:
By proposing 68 units, PSHHC is exceeding the required inclusionary units by 14 units
- a 25% increase. Housing needs in general are growing along the coastal areas and this
is particularly true for lower income households. San Luis Obispo will benefit greatly
from this development because of the increased density that comes with the proposal
as well as deeper AMI targeting.
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Resolution No. _____ (2020 Series) Page 2
R ______
3. Suitability: The project to be assisted is appropriate for its location both in terms of
land use and design, as follows:
The Tiburon Place is ideally suited for this location, both in terms of land use and
design. The Orcutt Area Specific Plan (OASP) has given due attention to meeting the
needs of the lower income residents of the City. The rental housing proposed for this
funding will serve to implement the goals set by the OASP as well as fulfilling the
City’s Regional Housing Needs Allocation (RHNA) goals.
4. Timing: The project would better serve the City’s needs if it were built immediately as
opposed to later, as follows:
Tiburon Place has received all local approvals and is preparing to submit for building
permit applications. PSHHC has also been working closely with the owner of the
various Tracts the inclusionary housing requirement is associated with, Righetti Ranch
LP, on donating the land and preliminary site planning related to Tiburon Place’s
location.
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
additional funding sources as they demonstrate local support and commitment to the
development. These funding sources include the Federal Home Loan Bank’s
Affordable Housing Program (AHP), federal HOME and CDBG funds, and the State’s
Affordable Housing Sustainable Communities grant program. Project financial
feasibility is dependent upon Affordable Housing Funds.
6. Readiness: The project has all necessary City approvals and is ready to proceed, as
follows:
PSHHC has obtained all the necessary City discretionary approvals for Tiburon Place.
Upon the award of a City Affordable Housing Fund award, PSHHC will be eligible to
apply for additional public funding programs and other private activity bond financing.
Should the project receive all funding, PSHHC anticipates starting construction in
2020.
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.
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Resolution No. _____ (2020 Series) Page 3
R ______
SECTION 3. AHF Award for Peoples’ Self-Help Housing Corporation. The City Council
does hereby approve an AHF award in an amount not to exceed $700,000, 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 sixty-eight (68) for-rent affordable housing
units located at 3750 Bullock Lane for a term of fifty-five (55) years, which will be
recorded against the title of the property.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2020.
____________________________________
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, this __________ day of ____________________________, 2020.
____________________________________
Teresa Purrington
City Clerk
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R ______
RESOLUTION NO. _____ (2020 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING AN AFFORDABLE HOUSING
FUND AWARD TO PEOPLES’ SELF-HELP HOUSING CORPORATION
FOR BROAD STREET PLACE IN THE AMOUNT OF $1,300,000.
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 January 21, 2020, for the purpose
of considering a request for Affordable Housing Fund (AHF) assistance; and
WHEREAS, the proposed project, Broad Street Place, by Peoples’ Self-Help Housing
Corporation (PSHHC) meets the award 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; 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:
Broad Street Place 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
extremely low, very low, and low-income households with the construction of 40 units.
2. Need: There exists a substantial or overarching need for the type of unit to be assisted,
as follows:
By proposing 40 units, PSHHC will be significantly contributing to the City’s RHNA
allocation for the extremely low, very low, and low-income categories. Housing needs
in general are growing along the coastal areas and this particularly true for lower
income households. San Luis Obispo will benefit greatly from this development
because of the increased density that comes with the proposal as well as deeper AMI
targeting.
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Resolution No. _____ (2020 Series) Page 2
R ______
3. Suitability: The project to be assisted is appropriate for its location both in terms of
land use and design, as follows:
Broad Street Place is designed to be consistent with the character of the neighborhood,
taking cues from the adjacent Iron Works affordable housing development as well as
other commercial, industrial, and residential buildings in the vicinity. The development
of this parcel will improve a vacant and underutilized property in an urbanized area in
the City and enhance the Broad Street corridor by creating new mixed-income and
affordable rental housing opportunities, as well as new high quality commercial space
for small businesses along Broad Street frontage.
4. Timing: The project would better serve the City’s needs if it were built immediately as
opposed to later, as follows:
Broad Street Place has received all local approvals and is preparing to submit for a
building permit application. PSHHC is ready to receive local funds to assist in
leveraging competitiveness for California low income tax credits, when they apply in
July 2020. As PSHHC moves forward with retaining additional funding sources,
commitment of local funds enhances the time-value of financing; realizing a project
sooner rather than later, with all associated due diligence review and analysis,
represents potential cost savings related to the local community investment.
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:
In terms of financial feasibility, early commitment of local affordable housing funds is
important. These funds provide basis for attracting additional funding sources as they
demonstrate local support and commitment to the development. Along with other
forms of shallow subsidies such as, the Federal Home Loan Bank’s Affordable Housing
Program (AHP), federal HOME and CDBG funds, and other potential resources, they
serve as leverage for significant sources such as tax credit financing. All tax credit
funding applications score maximum points with respect to project scoring criteria, the
ultimate tiebreaker is the amount of commitment of additional financing from other
resources. Tax credit financing often represents upwards of 50% plus of overall project
financing and the amount of tax credits awarded a project is underwritten in the context
of the “gap” between committed funds and total development costs. To leverage tax
credit funding is of great community benefit and in some measure may be up to a 1-to-
10 ratio between what local fund and other project financial resources. Thus, the
development’s financial feasibility is dependent upon City Affordable Housing Funds.
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Resolution No. _____ (2020 Series) Page 3
R ______
6. Readiness: The project has all necessary City approvals and is ready to proceed, as
follows:
PSHHC has obtained all the necessary City discretionary approvals for Broad Street
Place. Upon the award of a City Affordable Housing Fund award, PSHHC will be
eligible to apply for additional public funding programs and other private activity bond
financing. Should the project receive all funding, PSHHC anticipates starting
construction in 2020.
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.
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Resolution No. _____ (2020 Series) Page 4
R ______
SECTION 3. AHF Award for Peoples’ Self-Help Housing Corporation. The City Council
does hereby approve an AHF award in an amount not to exceed $1,300,000, 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 forty (40) for-rent affordable housing units
located at 3720 Broad Street for a term of fifty-five (55) years, which will be recorded
against the title of the property.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2020.
____________________________________
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, this _________ day of _____________________________, 2020.
____________________________________
Teresa Purrington
City Clerk
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3533 Empleo Street, San Luis Obispo, CA 93401
(805) 781-3088 phone • (805) 544-1901 fax
info@pshhc.org • www.pshhc.org
26 E. Victoria Street, Santa Barbara, CA 93101
(805) 962-5152 phone • (805) 962-8152 fax
info@pshhc.org • www.pshhc.org
October 10, 2019,
Cara Vereschagin
Housing Coordinator
919 Palm Street
San Luis Obispo, CA 93401
RE: Peoples’ Self-Help Housing - Broad Street Place Apartments - City In -Lieu Funds Request
OVERVIEW
Peoples’ Self-Help Housing (PSHH) is proposing a 100% affordable residential apartment project consisting
of 40 units. We are submitting this request to assist in developing the parcel and to provide affordable
housing options for members of the community. The project site is located at 3720 Broad Street in the
City of San Luis Obispo. It is 59,220 sf (1.36 ac) in size, flat (<5% average slope), generally rectangular
shaped, and currently vacant and undeveloped. The lot was created as par t of a Minor (4 -lot) Subdivision
approved per Resolution 13-02 and recorded on January 31, 2014, and has access via a 40’ wide shared
private driveway. The parcel is zoned Service Commercial with a Special Considerations overlay (C -S-S).
Residential uses are permitted as part of mixed use projects in this zone at a density up to 24 units per
acre.
The surrounding area along Broad Street is developed with a wide variety of uses including single- and
multi-family residential, neighborhood serving retail, restaurants and services, commercial office and
manufacturing uses, and recreational uses.
The p roperty immediately north of the site across the shared private driveway is zoned C -S-S and was
recently built for the development of the Iron Works. The mixed-use development consists of 46
affordable rental apartments and approximately 4,000 sf of commercial space.
The property immediately east of the site is zoned C-S-S and is developed with an existing commercial
building occupied by the Plumbers and Steamfitters Union Local 403 offices.
Affordability
The project will provide 40 units, which will be 100% affordable. The unit mixtures will range from 1-
bedroom, 2-bedroom and 3 -bedroom units. The project will target income levels of extremely low, to low
income. The Area Medium Income (AMI) targets will range between 30% AMI – 60% AMI. A table providing
affordability statics has been provided below.
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3533 Empleo Street, San Luis Obispo, CA 93401
(805) 781-3088 phone • (805) 544-1901 fax
info@pshhc.org • www.pshhc.org
26 E. Victoria Street, Santa Barbara, CA 93101
(805) 962-5152 phone • (805) 962-8152 fax
info@pshhc.org • www.pshhc.org
Figure 1:
Affordability AMI Target Units provided Unit size
Extremely Low Income 30% AMI 1 1 -Bedroom
Extremely Low Income 30% AMI 2 2 -Bedroom
Extremely Low Income 30% AMI 2 3 -Bedroom
Very Low Income 45% AMI 2 1 -Bedroom
Very Low Income 45% AMI 4 2 -Bedroom
Very Low Income 45% AMI 2 3 -Bedroom
Very Low Income 50% AMI 3 1 -Bedroom
Very Low Income 50% AMI 10 2 -Bedroom
Very Low Income 50% AMI 3 3 -Bedroom
Low Income 60% AMI 4 1 -Bedroom
Low Income 60% AMI 3 2 -Bedroom
Low Income 60% AMI 3 3 -Bedroom
Manager`s Unit 1 3 -Bedroom
Density and Unit Mix
The project proposes 40 affordable apartments in two separate buildings for a density of 24 units per
acre. The buildings will be three and two -story structures with a maximum height of approximately 35
feet. The total number, type, and approximate square footage of each unit is outlined in Figure 2 below.
Figure 2:
Bedrooms Square Feet # of Units
1 544 10
2 764 19
3 976 11
Total 40
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Packet Page 78
3533 Empleo Street, San Luis Obispo, CA 93401
(805) 781-3088 phone • (805) 544-1901 fax
info@pshhc.org • www.pshhc.org
26 E. Victoria Street, Santa Barbara, CA 93101
(805) 962-5152 phone • (805) 962-8152 fax
info@pshhc.org • www.pshhc.org
FUNDING REQUEST
PSHHC requests an allocation of $1,500,000 in city in-lieu funds to lend financial support to the
development, representing approximately $38,461/per unit for the 39 units. This local commitment of
funding will serve as basis for PSHHC to apply for additional affordable housing resources from state,
federal and private entities to complement the overall projected development budget.
The local funds will strengthen competitiveness of a future application to the State of California Tax
Credit Committee (TCAC).
ELIGABILITY
Production housing for this project will advance the City`s goals with regard to the General Plan Housing
Element Regional Housing Needs Assessment (RHNA). In addition, the following are related policies and
goals found in the City of San Luis Obispo 2014-2019 General Plan Housing Element. These policies and
goals which the project is consistent with will assist the City achieve its General Plan Housing Element
and sustainability goals.
• Policy 2.4 - Encourage housing production for all financial strata of the City's population, in the
proportions shown in the in the Regional Housing Needs Allocation, for the 2014-2019 planning
period. These proportions are: extremely low income, I 2 percent; very low income, 12 percent;
low income, 16 percent; moderate income 18 percent; above moderate income, 42 percent.
• Goal 4 Mixed Income Housing - Preserve and accommodate existing and new mixed income
neighborhoods and seek to prevent neighborhoods or housing types that are segregated by
economic status.
• Policy 5.4 - In general, housing developments of twenty (20) or m ore units should provide a
variety of dwelling types; sizes or forms of tenure.
• Policy 6. 19 - Continue to incentivize affordable housing development with density bonuses,
parking reductions and other development incentives, including City financial assistance.
• Goal I 0: Maximize affordable housing opportunities for those who live or work in San Luis
Obispo while seeking to balance job growth and housing supply.
The project is consistent with the above General Plan Housing Element goals and policies as it will
create 40 critically needed, below market rate housing opportunities for employees of the SLO-based
companies. It will help local businesses attract and retain talented employees, help improve the
jobshousing imbalance, develop an underutilized vacant lot in an urbanized location in the City, and
serve as a model for smart-growth and affordable housing throughout the region.
Furthermore, the range of unit types from one-bedroom to three-bedroom units will appeal to people of
different ages and with a wide ranges of income levels in an integrated enclave and community. The
project will be attractively designed with high-quality buildings and housing units offering private
balconies and porches as well as common open courtyards and recreation space. F or these reasons, the
project is in conformance with the Housing Element policies and will contribute to achieving the City`s
goals.
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3533 Empleo Street, San Luis Obispo, CA 93401
(805) 781-3088 phone • (805) 544-1901 fax
info@pshhc.org • www.pshhc.org
26 E. Victoria Street, Santa Barbara, CA 93101
(805) 962-5152 phone • (805) 962-8152 fax
info@pshhc.org • www.pshhc.org
NEED
By proposing 40 units, we are contributing to the City of San Luis Obispo`s RHNA allocation. The City of
San Luis Obispo’s 2014-2019 Housing Element, demonstrates a RHNA allocation in the aggregate
production of 285 new multi-family residences. The proposal of 40 apartment units represents new
production of roughly 14% of the RHNA need for extremely low and low -income categories.
Housing needs, in general are growing along coastal areas and this is particularly true for lower income
households. All but one (managers unit) of the 40 units proposed will be dedicated to serve low or very
low income residents, San Luis Obispo will benefit greatly from this development because of the
increased density that comes with our proposal as well as the deeper AMI targeting shown in Figure 1
above.
PSHH ensures a highly qualified affordable housing provider and case management service provider will
oversee these affordable units and establish successful long term operating standards and resident
amenities. All affordable rental units are deed restricted for 55 years.
SUITABILITY
The project is designed to be consistent with the character of the neighborhood, taking cues from the
adjacent Iron Works project as well as other commercial, industrial and residential buildings in the
vicinity. The development of this parcel will improve a vacant and underutilized p roperty in an urbanized
area in the City, and enhance the Broad Street corridor by creating new mixed-income and affordable
rental housing opportunities, as well as new high quality commercial space for small businesses along
Broad Street frontage.
As des igned the project is consistent with the general plan and compatible surroundings. The project
will help improve the jobs-housing imbalance, increase vibrancy and walkability along Broad Street,
reduce vehicle miles travelled, and help to improve regional sustainability.
TIMING
With the project having Planning Commission approval, PSHH is awaiting approval from the ARC for the
modification submitted on September 24, 2019. PSHH is ready to receive local funds to assist in
leveraging competiveness for the projects tax credit application. The project is expected to apply for tax
credits in July 2020 if local funds are secured to assist in boosting competiveness scoring and the project
receives ARC approval by end of year 2019.
As PSHH moves forward with retaining additional funding sources, commitment of local funds supports
these applications and enhances the time-value of financing; realizing a project sooner rather than later,
with all associated due diligence review and analysis, represents potential cost savings related to the
local community investment.
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Packet Page 80
3533 Empleo Street, San Luis Obispo, CA 93401
(805) 781-3088 phone • (805) 544-1901 fax
info@pshhc.org • www.pshhc.org
26 E. Victoria Street, Santa Barbara, CA 93101
(805) 962-5152 phone • (805) 962-8152 fax
info@pshhc.org • www.pshhc.org
FINANCIAL EFFECTIVENESS
In terms of financial feasibility, early commitment of local affordable housing funds is important. These
funds provide basis for attracting additional funding sources as they demonstrate local support and
commitment to the development. Along with other forms of shallow subsidies such as, the Federal
Home Loan Bank’s Affordable Housing Program (AHP), federal HOME and CDBG funds, and other
potential resources, they serve as leverage for significant sources such as tax credit financing .
All tax credit funding applications score maximum points with respect to project scoring criteria, the
ultimate tie-breaker is the amount of commitment of additional financing from other resources. Tax
credit financing often represents upwards of 50% plus of overall project financing and the amount of tax
credits awarded a project is underwritten in the context of the “gap” between committed funds and
total development costs.
To leverage tax credit funding is of great community benefit and in some measure may be up to a 1-to-
10 ratio between what local fund and other project financial resources.
READINESS
On October 25, 2017 the Planning Commission approved Use-1094 -2017 based on resolution number
PC-1011-17. The project was approved as a mixed use condominium project with a 9% density bonus to
be developed at 3720 Broad Street.
The project includes 1,288 square feet of commercial space fronting Broad Street, and 40 residential
units approved as for sale units. The project satisfied all land use requirements consistence with the City
of San Luis Obispo.
A CEQA determination has been made for the project through its original entitlements approved on
October 25, 2017. On September 24, 2019 PSHH submitted for a modification to the existing land use
permit approval to allow for 40 affordable rental units and 1,250 square feet of commercial space. The
proposed project is consistent with the previously approved entitlements and does not increase unit
counts. The majority of change is the result of for sale units being converted to rental units and building
design. The project is subject to ARC review, however the project has already received approval from
the planning commission as previously approved on October 25, 2017. The project is ready to receive
commitment of in-lieu funds.
If you should have any questions or concerns please feel free to contact me. Thank you for your
cooperation.
Sincerely,
Steven Orozco
Project Manager
805-234-9504
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