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HomeMy WebLinkAbout1999-12-15 HAC MIN CITY OF CHULA VISTA MINUTES SPECIAL HOUSING ADVISORY COMMISSION Wednesday December 15, 1999 Housing Conference Room 3:30 p.m. . Legislative Building CALL TO ORDER/ROLL CALL 3:35 p.m. PRESENT: Chair Vicki Madrid, Members John McCann, J.C. Clayton, Rosa Lopez- Gonzalez, Theresa Ahamed, Barbara Worth ABSENT: Fred Dufresne . STAFF: Community Development Specialist II Atwood, Community Development I Hines, Assistant City Attorney Googins, Administrative.Secretary Hernandez EX-OFFICIO: Virginia Moore (Absent) GUEST: Mr. Karl Higgins, Higgins & Associates 1. MSC (McCann/Worth) to approve the October 27, 1999 minutes (6-0-Dufresne absent). 2. LEASE PURCHASE PROGRAM - Ms. Atwood stated that she brought this item to the Commission back in August, at which time the Commission conditionally approved the program with the understanding that a representative from the program would come in and give a presentation. Ms. Atwood introduced Mr. Karl Higgins from Higgins & Associates to provide up-to-date information on the Lease Purchase Program. Mr. Higgins gave a brief summary of the program. He indicated that this Lease Purchase Program was created approximately two years ago and is designed for residents who can afford to make a ;monthly principal,and interest payment on a home, but can't afford a down payment. He indicated that this program consists of a Joint Powers Authority (JPA) being created by participating cities and upon creation of the JPA, the authority would apply for tax-exempt bonds. The bonds would be used to pay the down payment and closing costs of each participant. A resident would pay.a,' 1% administrative fee to'participate in the program. Mr. Higgins indicated that the 1% could be a gift from the seller ora relative. The homebuyer enters a three-year lease- and.makes monthly payments to the program's non-profit corporation, which holds the title to the home. In conclusion of the three-year period, the title of the property is transferred .to the homebuyer. The homebuyer would then be free to re-finance the property or take out a second or whatever the homebuyer chooses to do. Mr. Higgins indicated that the financing of the Lease Purchase Program incorporates. the use of tax-exempt bonds and would not place any fiscal obligation or indebtedness on the City of Chula Vista as result of the bond financing. He indicated that by adding this additional program to the City, it could increase home-ownership in the community. He concluded that this program would be an excellent, program to implement-within the Chula Vista community by providing down payment and closing cost assistance to potential homebuyers who have the ability to support making house payments. Additionally, the Lease Purchase Program will blend nicely with other programs currently being,offered by Chula Vista. Member Clayton asked if a potential homebuyer needs to be pre-qualified. 1 Mr. Higgens responded yes. He mentioned that if at some point during the course within the three- year period the homebuyer's credit 'dips, then the JPA would re-evaluate the homebuyer's credit again because the JPA wants the potential homebuyer to become homeowners. If the homebuyer's credit has been impacted, these loans have PMI on them. The PMI provider provides, at no cost to the City, homebuyer credit counseling. If needed, the JPA can extend the lease by 90 days or six months so the homebuyer can successfully execute the lease option. Attorney Glen Googins stated that basically each locality could customize the program to suite its own housing needs. Mr. Higgens responded yes, that is correct. Attorney Glen Googins expounded on the fact that the Lease Purchase Program can basically be used anywhere in the City of Chula Vista, and inquired if it expands beyond that in terms of median income qualifications and household size. Mr. Higgens responded that the City could go up to 140% of the area median income. Ms. Atwood indicated that staff would bring this item back to the Housing Advisory Commission requesting input for the guidelines for this program. Ms. Atwood stated that staff wants to target this program for people who actually need the program. She added that there would be different guidelines per each jurisdiction depending on their needs. Mr. Higgens indicated that the Building Industry Association in San Diego and the North County Association of Realtors has endorsed the Lease Purchase Program. Member Clayton asked who would take responsibility during the first three years for problems with the property. Mr. Higgens responded that Joint Powers Authority would be responsible. Chairman Madrid inquired that if a potential homebuyer picked out a house that they were interested in and requested some improvements, would that be possible. Mr. Higgens responded yes. The current owner can make the improvements and raise the purchase price of the house by the cost of the improvements. The potential homebuyer would then enter into a contract to purchase the home with a new purchase price. Another option is that the City can rehabilitate the home and increase the purchase price by adding the home improvement costs which can be folded into the Lease Purchase Program. Member Clayton indicated that there is a program called EEM Mortgage that SDGE is providing. The way the program works is that if a homebuyer wants to put in $6,000 worth of energy efficient items into the property, it does not affect the potential homebuyer's ratios. SDGE have their own inspectors that go out and inspect the homes for faulty furnaces, check out air ducks, etc., and give the homebuyer an idea of how much their savings would be if such items were replaced, repaired, or just cleaned. All items have to qualify as energy efficient items. Member Clayton suggested that maybe this program can roll right into the Lease Purchase Program. Ms. Atwood thanked Mr. Carl Higgens for his-presentation. Member Clayton made a comment from a realtor's point of view and indicated that since Chula Vista is one of the communities that require a business license to operate in the City, she suggests that local realtors' should not be charged to be educated on the Lease Purchase Program. 2 Chairman Madrid suggested to staff that a presentation to the Board of Realtors be made on the various home buying programs that the City of Chula Vista offers. Member McCann indicated that the Lease Purchase Program sounds like a real good program with minimal risk. MSC (McCann/Worth) to move forward with the Lease-to-Own Program (6-0-1 Dufresne absent). 3. COMMUNITY DEVELOPMENT BLOCK GRANT AD-HOC COMMITTEE PROCESS - Ms. Atwood indicated that in approximately two months, every year the Community Development Housing Division begins the Community Development Block Grant (CDBG) program process. Incorporated within this process is the solicitation of volunteer members from various City Commissions to form a CDBG Ad-Hoc Committee to participate in reviewing the CDBG funding. This process is needed to satisfy HUD's requirement citizen's participation process. Every year it is becoming more difficult finding Commission members to volunteer for the Ad-Hoc Committee due to time constraints and other reasons. Therefore, staff is recommending that this process be eliminated. In lieu of the Committee process, staff recommends holding community meetings to provide the opportunity for Chula Vista residents to participate and comment on how their federal tax dollars are being allocated. In addition, HUD highly recommends this type of community meeting process to involve citizen participation in the preparation of the Annual Plan and Consolidated Plan. Ms. Atwood indicated that the City's ending their previous five-year Consolidated Planning process and starting the new Consolidated Plan for the next five years 2000-2005, and would like to incorporate this new process into the document. She added that staff has identified three sites that would be appropriate for such meetings: South Chula Vista Library which would represent the western portion of the City along with the Montgomery Area; Cordova Village which is located in Rancho del Rey in the eastern portion of the City; and City Hall. In addition to the three community meetings, a formal Public Hearing will be held allowing the public, non-profit organizations, and other community organizations to present their comments to the City Council and staff. Chairman Madrid indicated that in the past, the Ad-Hoc Committee members spent a lot of time reviewing the CDBG applications to make funding recommendations. She stated that her concern is that if staff takes this process out to the community, citizens may not have previous experience on funding recommendations, and in addition, may not show up to the community meetings. If no one shows up to the meetings, who would make the decisions as to how the money should be spent. If that would happen, Council would have all the pressure from the non-profits indicating to them why they need the funding. Chairman Madrid stated that this process needs a workshop with people who have experience. Ms. Atwood responded that the Ad-Hoc Committee viewed the public service portion only. As a courtesy, the Housing Advisory Commission was a permanent member of the Ad-Hoc Committee so that the Housing Advisory Commission could review the housing related proposals. Ms. Atwood stated that regarding the public services category, she mentioned that she is very involved with the financial aspects whether agencies are providing their quarterly reports on time and as well as doing on-site audits. She indicated that although there is not going to be a committee process reviewing these proposals, there would be a staff person who ultimately responds to these people and reviews every aspect of their program. The proposals go through internal review and then they go forward to City Council. MSC (Clayton/Lopez-Gonzalez) to approve the elimination of the CDBG Ad-Hoc Committee process (6-0-1 Dufresne absent). 4. PEAR TREE MANOR APARTMENTS - Ms. Atwood indicated that Chelsea Investment Corporation submitted a proposal to acquire and rehabilitate a 119-unit apartment complex called 3 Pear Tree Manor. Staff has reviewed Chelsea's most recently submitted pro forma indicating an approximate financing gap of $1,387,152. In order to make this acquisition and rehabilitation project feasible, staff is recommending that the Redevelopment Agency conditionally approve providing financial assistance in the amount of $1,387,152 for this project. Chairman Madrid asked where the resources were coming from. Ms. Atwood responded that the funds are coming from the Low-Mod 20610 Set-Aside Fund. MSC (Lopez-Gonzalez/McCann) to approve the acquisition and rehabilitation of Pear Tree Manor Apartments (119 unit complex) (6-0-1 Dufresne absent). 5. KINGSWOOD MANOR - Ms. Hines gave a brief summary of this project. The project site is located at 54-94 Kingswood Drive, just west of Hilltop Drive. The existing property is currently developed with five two story buildings, each building housing eight dwelling units, with 100 parking spaces provided. Ms. Hines indicated that the applicant is proposing the development of an additional ten units for a total of 50 apartment units (all three-bedroom units). The applicant is requesting under State Density Bonus Law a twenty percent (20%) increase in their density so that the applicant can add ten units onto the site and all ten new units will be affordable to lower income households. In addition to that, under State Density Bonus Law the applicant is requesting additional incentives, elimination of the guest parking requirement, a 50% reduction in the open space requirement, and 21 % of the required parking as compact spaces. The applicant is requesting these incentives because it is an existing development and without these additional incentives, the applicant cannot add the ten new units. Member Worth asked if some of the tenants would have to park on the street. Ms. Hines responded no, there has been a survey done of the parking facility and the usage. The outcome of the survey showed that the current tenants are parking at 1.5 cars per unit. Ms. Hines indicated that in terms of the open space requirement, the 50% reduction is being offset by additional improvements to the property, by adding an additional trash collection area, children's play area, and redesign of the parking area to accommodate 103 vehicles. Ms. Hines indicated that there is no financial assistance being requested. Ms. Hines stated that this project would continue to be low income for 30 years if the Housing Advisory Commission approves the density bonus for this project. Staff's recommendation is for the Housing Advisory Commission to approve a 20% density bonus to facilitate the construction of a maximum of ten units for an existing 40 multi- family residential development known as Kingswood Manor. MSC (Madrid[Worth) Commission approves staff's recommendation for Kingswood Manor and add an addendum that the owner of Kingswood Manor participate in the Crime-Free Multi-Family Housing Program (6-0-1 Dufresne absent). 6. SALT CREEK VILLAS - Ms. Hines gave a brief summary on this project. She mentioned that staff has received a request from Chelsea Investment Corporation for financial assistance in the amount of $1,500,000 to develop Salt Creek Villas, located west of the Olympic Training Center within the EastLake II and III subdivision of eastern Chula Vista. The development envisions 150 apartment units for rental to low and moderate income households. Ms. Hines indicated that the $1,500,000 equates to about $10,000 per unit. Member Worth asked how many bedrooms per unit. Ms. Hines responded 24/1 br; 76/2BR; and 50/3BR units. Additionally the site is actually for 300 apartment units. Only 150 are being development as affordable housing and the balance of 150 will be market rate housing. This provides a mix of incomes within the same parcel of property. 4 MSC (Worth/Madrid) to accept the Salt Creek proposal (6-0-1 Dufresne absent). 7. STAFF REPORTS - Ms. Atwood mentioned that she appreciates the Commission's support on approving/supporting projects that have been brought before this Commission. 8. MEMBERS COMMENTS - J.C. Clayton stated that she would like to bring up the possibility of getting more information to the Board of Realtors on first time homebuyer programs. She suggested that maybe a staff member can come to a breakfast meeting and make a presentation on the different programs the City offers and where the affordable housing is being built so the Board Members can disclose this information to future home buyers. 9. ADJOURNMENT - 5:05 p.m. to the next scheduled meeting of January 26, 2000. Recorder, Alicia Hernandez 5