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Home My WebLink About12/04/2001, BUS 7 - REQUEST BY SOJOURN SERVICES, INC. FOR A CONTRIBUTION OF $25,000 FROM THE AFFORDABLE HOUSING FUND council ' D� �y j agenda nepont I=nom 003 -1, C I T Y OF SAN LUIS O B I S P O FROM: John Mandeville, Community Development Director Prepared By: Jeff Hook, Associate Planno ; SUBJECT: REQUEST BY SOJOURN SERVICES, INC. FOR A CONTRIBUTION OF$25,000 FROM THE AFFORDABLE HOUSING FUND TO HELP BUILD A ONE-BEDROOM APARTMENT FOR LOW-INCOME PERSONS, LOCATED AT 542 HATHWAY STREET. CAO RECOMMENDATION By motion, deny the request for a contribution of$25,000 in Affordable Housing Funds. DISCUSSION Background Sojourn Services, Inc., a local non-profit housing and social services provider, owns a triplex at 542 Hathway Street in San Luis Obispo. The property has a duplex with two 1-bedroom units and a detached studio unit. There is additional area on the property that may accommodate one additional apartment. According to Sojourn, the existing units are rented to very low income clients who are served by member agencies of the San Luis Obispo Supportive Housing Consortium and are eligible to receive Section 8 Housing Certificates and Tenant-Based Rental Assistance. Sojourn requests a contribution of $25,000 from the City's Affordable Housing Fund to help build an additional one-bedroom apartment on the property. The current cash balance in the Affordable Housing Fund is $395,053. This is the second request for use of the Fund. Evaluation The project's total cost is estimated at $130,000. In addition to the Affordable Housing Funds, Sojourn has requested $100,000 in 2002 City CDBG Funds, $100,000 in HOME funds from the Urban County of San Luis Obispo, and pledges $5,000 in in-kind donations from Sojourn Services, Inc. At its November 14" meeting, the Human Relations Commission reviewed Sojourn's request for CDBG funding but did not recommend funding. Commissioners noted that while it was a worthwhile project and met a community need for affordable housing, the project was not eligible for CDBG funding. Instead, Commissioners supported the use of HOME funding through the Urban County. That recommendation is tentatively scheduled to come before Council in February 2002 and the Board of Supervisors in March. When the Inclusionary Housing Program/Affordable Housing Fund was established in 1999, the establishing ordinance described it as a "fund established and administered by the City, containing in-lieu fees and other funds held and used exclusively to increase and improve the BUS 7-1 J Sojourn Services,Inc.—Request For Affordable Housing Funds Page 2 supply of affordable housing." The ordinance also said the fund shall be administered by the Finance Director and is allocated "at the discretion of the City Council." ." The potential uses of the fund and award criteria were not spelled out in the ordinance, however Council has since approved award criteria for the Fund. Staff's evaluation of Sojoum's request, based on those criteria, follows: 1. Eligibility. Use of the Affordable Housing Fund will increase or improve affordable housing and promote General Plan policies regarding housing and related community goals. The proposed project meets this criterion. It would provide one rent-subsidized apartment, affordable to very-low and low-income persons. It is consistent with Housing Element Program 1.22.11 and Policy 1.28.1: The City will establish a housing trust fund to be used to develop affordable housing units and acquire land for affordable housing projects. To qualify for such public assistance, housing must include guarantees that it will remain affordable as long as legally permissible. Affordable housing in-lieu fees will be placed in this fund. The City will encourage housing that meets the special needs of families with children, single parents, disabled persons, those desiring congregate or co-housing lifestyles, the elderly, students, and the homeless 2. Suitability. The project to be assisted is appropriate for its location, both in terms of land use and design. The project is in its early planning stages and no plans have been submitted to the City. It has not been determined whether the project is feasible, given zoning and building code requirements. Given that the project has not yet received planning approvals, staff believes it is premature to consider use of Affordable Housing Funds. 3.Urgency. There exists an urgent or overarching need for the type of housing to be assisted. While the project would provide one-unit of much-needed affordable housing, it does not seem urgent in terms of the development timing or clients served. The project appears to be at least 18 months from being ready to build, and would serve very-low and low-income clients already targeted for housing provided by several other agencies, including the City's Housing Authority and housing non-profits like People's Self-Help Housing Corporation. The Affordable Housing Fund may not be the most appropriate tool to assist this project. Future CDBG funds might be requested for "soft costs" of development including project planning and design and related costs, or additional HOME funds requested to cover the full project cost. Unlike CDBG funds, HOME fitnds are specifically intended to fund the construction of affordable, low-income housing. 4. Financial Effectiveness. But for the requested assistance, the project would not be economically feasible; or AHF funding "leverages" significant additional funding from other sources. BUS 7-2 Sojourn Services, Inc.—Request For Affordable Housing Funds Page 3 Use of the Affordable Housing Fund does not appear cost effective for this project. Project funding is not dependent upon the Affordable Housing Fund, since other sources of funding may be available. If the request is approved, however it would help "leverage" a request of$100,000 in 2002 HOME funds from the Urban County. In balance, the Affordable Housing Fund may generally be more appropriate for use in larger amounts to fund a greater number of dwelling units for the City investment, or where the funding is critically needed to make a project feasible. 5. Readiness. The project has all necessary City approvals and is ready to proceed. The project has not received any planning or building approvals. ATTACHMENT 1. October 24, 2001 Letter from Sojourn Services JhdAousi ng/Sojoumservicesccrepon 12-4-01 BUS 7-3 ` -uki Y( I=ii I 14 j rs h StrcCL. Suite 102 Sim (Al iS Obispo, CA Q 1.402 Phom- I X()�) _45,9270 F';ax (805) 545-9257 Attachment 1 The Honorable Allen K. Settle, Mayor October 27, 2001 and City Council Members CITY OF SAN LUIS OBISPO 990 Palm Street San Luis Obispo, CA 93401 RE: City of San Luis Obispo Affordable Housing Fund In-Lieu Fees Mayor Settle and Members of the San Luis Obispo City Council: Please consider this letter a request for your consideration of an allocation of$25,000 in City In-Lieu Fees to support Sojourn Services' proposed affordable housing project. We are attaching our Community Development Block Grant Program Ylpplicationfor Funding During 2002 Program*rear, which will give you specific information about the project for which we seek funding. We appreciate the opportunity to be able to acquaint you with Sojourn's goals, which are designed to have a significant impact upon the status of affordable housing in San Luis Obispo. As a long-standing provider of comprehensive, in-home Supported Living Skills for individuals with developmental disabilities, Sojourn has been acutely aware of the gaps in affordable housing that affect all low-income families and individuals in San Luis Obispo. Our clients are even more challenged by the shortage of affordable housing than most. As persons with developmental disabilities, they not only face difficulties with education,jobs, transportation, health care, and socialization, but also confront the limitations of a very low income, as defined by the latest published HUD income limits. Sojourn has been working within public collaborative systems and as a private 501 (C)3 non-profit agency to provide affordable housing opportunities to our clients along with individualized program services. As a founding member of the San Luis Obispo Housing Consortium, Sojourn has campaigned for safe, affordable and 'special needs' housing for those at risk of homelessness. As you will see from the CDBG application, the proposed project is already providing housing for five very low-income individuals and will increase that number, at minimum, to seven. This housing is centrally located, safe, near public transportation and part of a well-kept residential neighborhood. We ask that you thoughtfully consider our proposal and we invite you to arrange to tour the property with us at your convenience. Sincerely, Sharon Frederick Executive Director I,?"0'South HroulhIaN I IR \Vca AlTdlaga AvC1jL!(2 TPO follisfL-r Simla rVinn'.i. clyi1Q7 Sania Ilaibma, 1 A )3 W I PIII III."6K05)9:N-0 70 Fax N 05 I 4s N tS(741�). 2002 CDBG Proposal Omaniza& Sdoum Services.Inc. Attachment 1 COUNTY OF SAN LUIS OBISPO COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROGRAM APPLICATION FOR FUNDING DURING 2002 PROGRAM YEAR (Attach additional sheets if necessary) NOTE: (1) Please review the CDBG regulations and guidelines and the Request for Proposals before completing this proposal. A copy of a HUD-prepared CDBG eligibility guidebook Is available upon request from county staff. Also, please call county and or/clty CDBG staff with any questions about how to complete the form or about the rating criteria and process. (2) if the information for any of the questions below requires more room to provide a complete explanation of your proposed project or program, please attach additional sheets. 1. Name and mailing address of applicant organization, with contact person and phone number. Sojourn Services, Inc. 1411 Marsh St., Suite 102 San Luis Obispo, CA 93402 Contact: Sharon Frederick, Executive Director, Ph.: (805) 545-9270 X11 2. Title/name of proposed project or program: Supported Living Construction Project 3. Please describe the proposed project or program. Include a description of the groups who will benefit and an explanation of how they will benefit from the proposed project or program. For projects, describe the location of the project (be as specific as possible, e.g., street address). For programs, state the location from which the program will be operated and/or describe the geographic area served by the program. Also, please Include a schedule of project/program milestones. Sojourn owns the property at 542 Hathway in San Luis Obispo. This property currently houses 1) a duplex, one bedroom in each unit and, 2) a detached studio apartment There is buildable space on the property that can accommodate the proposed one- bedroom unit. The existing units are rented to very low income clients who are served by the members of the San Luis Obispo Housing Consortium, as will be the proposed units. The families/individuals renting these units will be eligible for section 8 Housing certificates as well as Tenant-Based Rental Assistance. Tenant-Based Rental Assistance pays for the initial rental deposits and subsidizes the rent until the family/individuals can afford to pay without assistance. Many agencies serving these families/individuals will provide on-site/in-home case management services. Sojourn will provide supported living services for individuals with developmental disabilities. Eligible individuals will apply for a rental unit with Sojourn acting as landlord. Sojourn will facilitate the process by which these individuals apply for Section 8 Certificates and Tenant-Based Rental Assistance. Individuals will be allowed to remain as tenant as long as they meet the eligibility criteria established by the funding source and the San Luis Obispo Housing Consortium. I BUS 7-5 2002 CDBG Proomi __ - Omanizab� - Soio=Services.Inc. Attachment 1 4. Total amount of CDBG funds requested: $ 100.000 Please identify the jurisdiction(s) you are applying to: City of San Luis Obispo If you are requesting CDBG funds from more that one jurisdiction, please break down the amount shown above by the jurisdiction listed below: City of Arroyo Grande: City of Paso Robles: City of Atascadero: City of San Luis Obispo: City of Grover Beach: Unincorporated community of: County-wide: J 5. Please describe budget for the proposed project or program. a. Revenues: 1. CDBG Funds requested $ 100,000 2. Other funds (please describe below) $ 30.000* Total Revenues: $ 130.000 * City of San Luis Obispo In-lieu fees $ 25,000 * In-kind donation by Sojourn Services $ 5,000 b. Expenditures: List below by item or cost category. Construction: Labor, materials and supplies. Permitting, legal, architectural, engineering, inspection fees. 2 BUS 7-6 Attachment 1 2002 CDBG Proposal OraanbML io im Services Inc 6. Does the proposed project or activity meet one of the three national objectives of the CDBG program? Please check one of the objectives below that applies to the proposal, and explain how the project or activity meets the national objective. a. 4 Benefits low and moderate income persons as defined by the U. S. Department of Housing and Urban Development(HUD). NOTE; To meet this national objective, the proposed activity must benefit a specific clientele or residents in a particular area of the county or participating city, at least 51 percent of whom are low and moderate-income persons. See current Income limit schedule in the Request for Proposals. b. Aids in the prevention or elimination of slums or blight. NOTE; To meet this national objective, the proposed activity must be provided within a designated slum or blighted area, and must be designed to address one or more conditions that contributed to the deterioration of the area. c. Meets the community development needs having a particular urgency where e)asting conditions pose a serious and Immediate threat to the health or welfare of the community, and no other funding sources are available. NOTE; To meet this national objective, the proposed activity must be provided to deal with major catastrophes or emergencies such as floods or earthquakes. 3 BUS 7-7/ Attachment 1 2002 MUG Proposal 0manizabL.— Soioum Services.Inc. 7. If the project or program is designed to meet the National Objective of providing benefit to low and moderate Income persons, please estimate the number of persons (or households) to benefit from the project and break that estimate down by income groups as follows: a, Total number of persons or households who will benefit from the project (regardless of income group): 7 CEi ns /households(circle the applicable unit)* b. Of the total number of persons or households entered above, how many will be low-income (earning 51%-80%or less of the County Median Income)? -0- Persons /households (circle the applicable unit) c. Of the total number of persons or households entered above, how many will be very low-income (earning 50%or less of the County Median Income)? 7 ii>households(circle the applicable unit) 'There are 5 tenants on presently on the property, four (4) in the duplex and one (1) in the studio. The new unit will accommodate 2 more tenants, for a total of seven (7). 4 BUS 7-8 Attachment 1 2002 CDBG Proposal Oraanizadu. _ SWoum Services.Inc. 8. Check any of the following eligible activity categories that apply to the proposed project or program: (Refer to CDBG regulations and Guide to Eligible CDBG Activities) J Acquisition of real property Disposition of real property Public facilities and improvements (may include acquisition, construction, reconstruction, rehabilitation or installation) Privately-owned utilities Clearance, demolition, removal of buildings and Improvements, and/or movement of structures to other sites J Interim assistance Relocation of individuals, families, businesses, non-proflt organizations, and /or farms Removal of architectural barriers Housing rehabilitation New housing construction (under limited circumstances) Acquisition of real property Code enforcement Commercial or industrial rehabilitation J Special economic development Special activities by sub-recipients Public services Planning studies 5 BUS 7-9 Attachment 1 2002 CDBG Proposal Oroaniza$, Sob=Services.Inc. 9. Describe the need and the degree of urgency for the proposed project or program. What would be the consequences if the proposed project or program is not funded in the next year? Sojourn is a strong member of the San Luis Obispo Housing Consortium. Sojourn's Executive Director is one of the founding members. The purpose of the consortium is to access and/or develop affordable housing for low and very-low income families. The available housing In the City of San Luis Obispo has declined to the level where virtually no housing is available. When housing is available to low and very-low income families, agencies lack the resources to provide services to the clients in -home where many families require the most support. Many agencies use their funding to supplement rental expenses for their clients since most rent is unaffordable in the City of San Luis Obispo. The impact of virtually no housing for low and very-low Income families affects families and our community in the following ways; 1. Many very low-income families utilize the services of multiple agencies. These agencies are primarily located in the City of San Luis Obispo. Since many families do not have their own transportation and public transportation is scarce, it is very difficult for the families to come to the agency or service needed. Consequently, any intervention planned for the family is sporadic at best, children may not receive the necessary health care, families may need to resort to neighborhoods that are unsafe due to high crime, and many families remain homeless in our community. 2. Many families need support in the home. Field support comprises such a small percentage of budgets and the number of clients served falls even further when field support must travel from family to family. With families living in close proximity of each other, field personnel can redirect travel time to direct services. More families can be served without impacting allocated funding, 6 BUS 7-10 Attachment 1 2002 CDBG Proposal Olganiza, Sot=Services.Inc. 10. Please describe the specific organization(s) method to Implement the proposed project or program: (single or multiple group, with roles; public agency?; non-profit?; for-profit?; experience in operating similar programs; etc.). Sojourn will be responsible for the implementation and management of the project. Sojourn will also work closely with the San Luis Obispo Housing Consortium to ensure the missions of both the Consortium and Sojourn are met. Sojourn serves clients who have-special needs and are very low income. Sojourn staff have been leaders for safe, affordable housing in San Luis Obispo County. Sojourn staff have many years experience working in collaborative environments with housing resources. The members of the San Luis Obispo Housing Consortium include representatives from all agencies in San Luis Obispo County whose clients are very- low income and in need of safe, affordable housing. I certify that the information in this application is true and accurate to the best of my ability and knowledge. ,4hyd,, Ez&&,-oe,) Signature Date Sharon B. Frederick, M.S.W. Executive Director Printed or typed name title BUS 7-11