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HomeMy WebLinkAboutReso 1986-12681 RESOLUTION NO. 12681 RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA APPROVING A RENTAL REHABILITATION PROGRAM DESCRIPTION AND RELATED DOCUMENTS AND AUTHORIZING SUBMITTAL TO HUD The City Council of the City of Chula Vista does hereby resolve as follows: WHEREAS, the City has been informed by the U.S. Department of Housing and Urban Development (HUD) that funds are available for the implementation of the HUD Rental Rehabilitation Program, which program is aimed at improvement of substandard rental units occupied by lower income families; and, WHEREAS, the City wishes to apply for funds in an amount of $60,000; and, WHEREAS, the City of Chula Vista is desirous of proving assistance for improvement of substandard rental units occupied by lower income families; and, WHEREAS, eligibility and application for the available HUD funds require that a local Rental Rehabilitation Program be designed with public input; and, WHEREAS, a local Rental Rehabilitation Program has been designed and a public hearing has been conducted to consider that design; and, WHEREAS, submittal documents, including a narrative Program Description, Certifications, and a Tenant Application Policy have been prepared and attached as Exhibits A, B, and C, respectively, and are incorporated herein as though fully set forth. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Chula Vista hereby approves the Rental Rehabilitation Program description and related documents, authorizes the Mayor to sign said documents as necessary, and authorizes the City Manager to submit said documents to HUD. Pres~~~ Approv?~ as to form by Paul G. Desrochers, Community Development Director ~/City Atto~ne~ ADOPTED AND APPROVED BY THE CITY COUNCIL OF' THE CITY OF CHULA VISTA, CALIFORNIA, this 19th d(3y of Auqust 19 86 ., by the following vote, to-wit: AYES: Councilmembers Malcolm~ Moore, Campbell, McCandliss, Cox NAYES: Counci 1 members None ABSTAI N: Co unc i 1 membe rs No ne ABSENT: Counci lmembers None  ,, ,~~ City of Chula Vista ATTEST ///< ~ '" ' ~- ' City Clerk STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO ) ss. CITY OF CHULA VISTA ) I, JENNIE M. FULASZ, CMC, CITY CLERK of the City of Chula Vista, California, DO HEREBY CERTIFY that the above and foregoing is a full, true ond correct copy of RESOLUTION NO. 12681 ,and that the some hos not been omendedor repealed. DATED City Clerk CrlY OF CHUBS, VISTA CC-660 ~ OMB Approval No. 0348-0006 FEDERAL ASSISTANCE 2.CANT'sAPPL" a. NUMBER 3. APPL~-STATE ..?UMBER APPLI- CATION 1. TYPE CATION IDENTI- OF [] NOTICE OF INTENT (OPTIONAL) IDENTI- FIER DATE SUBMISSION FIER b. DATE NOTE,. TO BE (Mark ap- [] PREAPPLICATION Year month day ASSIONED ASSIGNED Year month day ~ri~t~ [] APPLICATION 19 86 08 11 BYSTATE 19 4. LEGAL APPLICANT/RECIPIENT 5. EMPLOYER IDENTIFICATION NUMBER (EIN) a. Applicant Name . City of Chula Vista 96-60000690 b. Organization Unit . Commun i ty Deve 1 opmen t De partment c. St,eet/P.O. Box . 276 Fourth Ave. PRO- ,. NDMSER I1 I4 d. City Chula Vista e. Cou.~ San Diego GRAM f. State California g. ZiP Code, 92010 (£romCFDA) MULTIPLE[]] h. Contact Person (Name b. TITLE Rental &Telepho.eNo.} David Gustafson (619) 691-5047 Rehabilitation Program TITLE OF APPLICANT'S PROJECT (Use section IV of this form to provide a summary description of the 8. TYPE OF APPLICANT/RECIPIENT project.) Rental Rehabilitation Pro.Qram ^-s.,. The primary objectives of this project are to increas """'~ '-"~'~ the supply of private market rental housing for lower ~,~,~"~ ~s~,m.. income tenants and to provide rental assistance to ~ lower income tenants, especially to large families Chula Vista ~-~" .oo 44 44,45 ~ TYPE OF CHANGE (For 14c or ~) 19 86 10 1 12 Months Enter ~ T~tal 15 .o0l FEDERAL AGENCY ~ 19 86 08 20 119 FEDERAL A~ENCY TO RECEIVE REOUEST Dept. of HUD, Los Anqeles Office, Reqion IX 20. EXISTING FEDERAL GRANTiDENTiFiCATiON NUMBER ORGANIZATIONAL UNIT (IF APPROPRIATE) lb. ADMINISTRATIVE CONTACT (IF KNOWN) Community Planninq & DevelopmentI 14,230 1615 West Olympic Boulevard Los Angeles, CA 90015-3801 [] Yes [] NO SENTATIVE Gregory R. Cox, Mayor . ~ f WITHDRAWN f TOTAL $ .00 [] Yes [] NO NSN 7540-01-008-8162 424-103 STANDARD FORM 424 PAGE t (Rev. 4-84) EXHIBIT A (Revised 8/13/86) RENTAL REHABILITATION PROGRAM CITY OF CHULA VISTA PROGRAM DESCRIPTION The City of Chula Vista will encourage and assist in the rehabilitation of residential rental units in Chula Vista under the Rental Rehabilitation Program authorized by the U. S. Community Development and Urban-Rural Recovery Act of 1963. Grant and rental subsiQy resources available from HUD will be used to increase the stock of standard rental housing in the City and to assure the affordability of such housing to lower income families. The program has been designed to maximize Doth improvement assistance to substandard rental units which will house larger families and affordability to very low-income households. I. PROGRAM ACTIVITIES In FY 1986-87, the City of Chula Vista will encourage and assist in the rehabilitation of approximately 12 rental dwelling units. The program will be pursued by the City's existing staff responsible for the Block Grant-funded multi-family rehabilitation program, the Community Housing Improvement Program (CHIP). Rental projects in the targeted neighborhoods will be iQentified for assistance consideration, using the Housing Rehabilitation Specialist/Code Enforcement Officer and the Housing Rehabilitation AQministrator. Projects evidencing substandard conditions and predominant occupancy by lower income tenants will be encouraged to apply for program assistance. Proposed projects will be evaluated by tile Loan Committee of the existing CHIP Rehabilitation Program for satisfaction of program goals. Approved projects will be referred to the Bank of America for loan processing, for both market rate private rehabilitation loans and program loans. Program loans will be in the form of ten-year, 0% interest deferred loans, forgiven in full at term, but payable in full if prepaid prior to full term or at violation of condominium conversion or assisted tenant discrimination prohibitions. Maximum assistance will be 50% of the per unit rehabilitation cost, to a maximum of $5,000 per unit. Program loans and attendant prohibitions will be secured by a lien on the subject property. Matching private investment will be accomplished where possible by the underwriting of private property improvement loans by the Bank of America. Affected eligible tenants will receive Section 8 Existing rental subsidies from the Public Housing Authrity. Affected lower income tenants not suitably housed in rehabilitated units will receive technical anQ financial relocation assistance from program funds. Two staff me:~ers will be working on the Rental Rehabilitation Pro§ram, Tony Ciotti and Roger Jones. Mr. Ciotti has been the City's Housing Rehabilitation Coordinator for 9 years aha has been certified by NAHRO as a Rehabilitation Finance Specialist. He has primary responsiblity for the administration and execution of the program. Roger Jones is the City's Housing Rehabilitation Specialist and is certified by NAHRO as a Rehabilitation Construction Specialist. He conducts the initial inspections to determine Code violations and items in need of rehabilitation. II. NEIGHBORHOOD SELECTION The Rental Rehabilitation Program will be operated in the CHIP target neighborhoods. These neighborhoods are among the lowest income neighborhoods in the City, with 1980 Census data indicating that the median income in the Census lracts these neighborhoods comprise is below 80% of the area median income. These neighborhoods are a mix of single-family and multi-family units, with the great majority of rental rates being below prevailing market rates in Chula Vista and below the current Section 8 Existing Fair Market Rents. Community Development Block Grant-funded Housing Rehabilitation and Capital Improvement activities, and redevelopment of the adjacent downtown commercial section, promise to revitalize these declining neighborhoods, but the modest nature of the housing stock and the scope of the revitalization activities will not result in gentrification of the neighborhoods. Rent levels will rise over the next five years, but not at as great a rate as rents in the market area. Selection of these neighborhoods is based on 1980 Census data, A Housing Study for the City of Chula Vista, dated May 1984, and field observation. III. LOWER INCOME BENEFIT A minimum of 70% of the rental rehabilitation grant will be used to assist lower income families. One-hundred percent lower income benefit will be striven for, but achieving that level is unlikely. No neighborhoods in Chula Vista are so significantly lower income, and no rental projects are so significantly substandard, that more than 70% low income occupancy of a rental project would likely be encountered. If 100% lower income occupancy were necessary, significant numbers of non-lower income families would have to be displaced by the property owner/applicant, which the City feels is an unacceptable circumstance. Given the characterisitics of the Chula Vista neighborhoods and the displacement which would result, no practical program design exists which could achieve 100% low income benefit level. Through the public hearing process to consider the program description, the public has been consulted regarding the inability to achieve a 100% lower income benefit level. IV. USE OF RENTAL REHABILITATION GRANTS FOR HOUSING FOR FAMILIES A minimum of 70% of the units assisted under the program will be two-bedroom or larger. First priority for assistance will go to three bedroom units. As apartment projects in Chula Vista seldom contain three bedroom units, outreach will be concentrated on rental duplexes. All assistance given un~er the pro§ram will be approved by the City's CHIP Loan Committee, using as one of their criteria for project selection the goal of a minimum of 70% total program assistance to units of two bedrooms or larger and highest priority to three-bedroom units. -2- V. USE OF RENTAL REHABILITATION GRANTS FOR UNITS IN SUBSTANDARD CONDITION THAT ARE OCCUPIED BY VERY LOW-INCOME FAMILIES Priority will be given to projects with substandard units occupied by very low-income families. All assistance given under the program will be approved by the City's CHIP Loan Committee, using as one of their criteria for project selection the priority to projects with substandard units occupied by very low-income families. VI. SELECTION OF PROPOSALS Proposals will be selected by the CHIP Loan Committee based on the following criteria: a. Correction of substandard units, especially those occupied by very low-income families. b. Predominance of assistance to large families in lower-income categories, with a minimum of 70% of all units assisted being two bedrooms or larger, and with highest priority going to three-bedroom units. c. Maximum stimulation of private investment. d. Minimization of displacement of tenants. The Loan Committee will also evaluate the pro forma and loan processing information in oroer to select financially feasible projects with maximum program benefit. Operating income and replacement reserve levels will be considered. The Loan Committee will consiOer the distribution of Section 8 Existing Vouchers to a project or the provision of financial relocation assistance in their evaluation of program benefit. Relocation expenses paid to project unit displacees will be deducted from the $5,000 per unit maximum assistance levels. VII. FINANCIAL FEASIBILITY The Rental Rehabilitation Program will be financially feasible. Private funds will be available through private lending institutions, with lending services for both program deferred loans and private loans obtained from Bank of America. VIII. NEIGHBORHOOD PRESERVATION Neighborhood preservation is currently under way in the target neighborhood, using Block Grant-funded housing rehabilitation, Block Grant-funOed Capital Improvement Projects, and Block Grant-funded social service activities. Additional property improvement under the program could only enhance that neighborhood preservation. IX. SCHEDULE FOR COMMITTING RENTAL REHABILITATION GRANT ~OUNTS Specific projects have not yet been selected for the program, but as the City runs an existing Block Grant-funded multi-family rehabilitation program, projects suitable for this program can be easily identified. All staff and mechanisms for processing and approving loans are in place. Our best local estimate is that the average subsidy per unit will be approximately $5,000. That means that the program would rehabilitate 12 units in 12 months. As it would be most advantageous for the Loan Committee to evaluate a number of project proposals simultaneously, project proposals will be batched for consideration. By March 13, 1987, we would anticipate committing funds to approximately 6 units at that point. That commitment would be $30,00U, or 50% of our 1986-87 grant funQs. The total grant amount shoul~ be committe~ by September of 1987. X. NEED FOR RENTAL HOUSING ASSISTANCE. Not applicable. XI. NON-DISCRIMINATION AND EQUAL OPPORTUNITY Affirmative marketing and fair housing principles will be pursued by the program. The program will not participate in unit marketing, but property owners will be counseled in affirmative marketing principles and monitored for compliance. The City will provide fair housing counseling to owners of assisted units and to perspective tenants. The following steps will be taken: a. Written material on Federal Fair Housing Laws will be distributed to owners and tenants. All advertisements or public annoucements regarding the program will incluQe the Equal Housing Opportunity logo. b. Each unit assisted through the Rental Rehabilitation Program will be marketed in a manner to affirmatively further fair housing, including but not limited to the following: l) Listing available units with the Section 8 Existing Marketing Section of the Housing Authority. 2) Attempting to fill vacant units with families who are active certificate holders through the Section 8 program, or who are applicants on the waiting list for Section 8 certificates or vouchers. 3) Using the Equal Housing Opportunity logo in any newspaper advertisement or written communication to community groups, organizations, agencies, or other community contacts. -4- Owners will utilize various community contacts to advertise unit availability to those persons in the housing market area least likely to apply for the unit. Applications will be solicited from such individuals. The City will gather anO maintain records to demonstrate compliance as follows: a. Copies of all written material regarding vacant units for rent will be kept by the property owner and by the City. Records will be kept of applications received in response to available vacancies. b. The City will periodically review affirmative marketing efforts made by owners to ensure compliance with Equal Housing Opportunity provisions. Where an owner has failed to follow affirmative marketing requirements, appropriate actions, available under program regulations and/or applicable laws, will be taken to enforce conformity. In cases where housing discrimination is established to have occurred, such established housing discrimination shall be a conaition of default on program deferreU loans. Owners will be encouraged to comply with provisions of affirmative marketing of the units for no less than seven years after the completion date of rehabilitation of all units in the project. XII. GRANTEE ORGANIZATIONAL STRUCTURE The Rental Rehabilitation Program contact person for the City of Chula Vista is: David Gustafson, Assistant Community Development Director, City of Chula Vista, 276 Fourth Avenue, Chula Vista, CA 92010. XIII. PUBLIC HOUSING AUTHORITY PARTICIPATION The Housing Authority of the County of San Diego has applied to HUD for Section 8 Existing Vouchers to provide to the City Rental Rehabilitation Program. A Memorandum of Understanding for the administration of these certificates has been executed between the City and the Housing Authority. The Section 8 Existing Rental Rehabilitation Program contact person is: Josephine Silva, Chief, Housing Programs, Housing Authority of the County of San Diego, 7917 Ostrow Street, San Diego, CA 92111-3694, at 565-3444. XIV. CERTIFICATIONS The necessary certifications are attached. They were approved by City Council Resolution for FY 1986-87 funding and on , for FY funding. -5- XV. FUNDS REQUESTED The City is requesting an allocation of $60,000 for Fiscal Year 1986-87 for our Rental Rehabilitation Program. XVI. RECENT REHABILITATION ACTIVITIES The City offers loans and grants for the rehabilitation of rental units, owner occupied single family dwellings, and mobilehomes. The following chart shows the number of units rehabilitated and the amount of funds spent over the past 3 fiscal years. CITY OF CHULA VISTA HOUSING REHABILITATION FISCAL YEARS 1983-86 FY 1983-84 No. of Single Family Dwellings 36 No. of Mobilehomes 25 Total Funds Spent $316,677 FY 1984-85 No. of Single Family Dwellin§s 28 No. of Mobilehomes 25 Total Funds Spent $357,596 FY 1985-85 No. of Single Family Dwellings 27 No. of Mobilehomes 24 Total Funds Spent $399,422 The City has recently funded two Rental Rehabilitation projects. A total of 4 units will be rehabilitated using $16,541 in Rental Rehabilitation funds and $16,541 in matching funds from the owners of each project. WPC lO08X -6- RENTAL REHABILITATION PROGRAM CERTIFICATIONS The grantee certifies that: (1) The submission of this Program Description is authorized under State "and local law (as applicable), and the grantee possesses the legal authority to carry out the Rental Rehabilitation Program described herein, in accordance with 24 CFR Part 511; (2) The grantee's Rental Rehabilitation Program was developed after consultation with the public and its descripLton of program activities in the "Program Activities" section 6f this Program Description has been made available to the public; (3) /-~r-f (Check if this paragraph is applicable.) The grantee's lower income benefit standard is hereby reduced to 70 percent as provided by 24 CFR 511.10(a)(2). The discussion of lower income benefit in th.ts Program Description contains a specific explanation of the reasons why this reduced benefit standard is necessary, which explanation complies with 24 CFR 511.10(a)(2). (4) The grantee has adopted a written tenant assistance policy conforming to the requirements of 24 CFR 511.10(h)(2), and such policy will be made available to the public on request; (5) The grantee will conduct and administer its Rental Rehabilitation Program, and, if applicable, ensure that State recipients Conduct and administer their Rental Rehabilitation Programs, in confor~nity wish the requh-ements of 24 CFR 511.10(m); and (6) The grantee wtll conduct and administer its Rental Rehabilitation Program, and, If applicable, ensure that State recipients conduct and administer their Rental Rehabilitation Progr,~ms, in accordance wi~h the requirements of 24 CFR Part 511. EXFIIBIT RENTAL REHABILITATION PROGRAM TENANT ASSISTANCE POLICY I. INTENT The Chula Vista Rental Rehabilitation Program will seek to minimize permanent displacement of residential rental tenants as a result of program activities. In cases where permanent displacement of low income families, (less than 80% of median income) is unavoidable, financial and technical relocation assistance will be provided to those families. Very low-income families (less than 50% of median income) will not be permanently displaced in favor of non very low-income families. Cost and assistance needs resulting from temporary displacement of tenants during property improvement will be the responsibility of the property owner and will not be paid from program funds. The Rental Rehabilitation Program will be administered so as to not cause the displacement of persons because of their particular, race, color, religion, sex, age, handicap, or natural origin. II. DEFINITIONS OF DISPLACEMENT A. Non low-income families moving from a unit undergoing rehabilita- tion under the program will not be considered displacees under the Tenant Assistance Program. B. Low-income and very low-income families will be considered displacees if their displacement is a direct result of program activity and not an action for cause. C. Examples~ of program related displacement include, but are not limited to, unit underutilization, unit overcrowding, housing cost overpayment (family paying more than 30% of monthly gross income for housing expenses), or tenant ineligibility to Section 8 Existing rental subsidy assistance as a result of unit rent ex- ceeding Section 8 Fair Market Rent. No tenant will be considered displaced if the tenant has been offered a decent, safe, and sanitary dwelling unit in the project at an affordable rent. Qualification as displacees will be solely determined by the City. III. ASSISTANCE TO DISPLACEES A. Displacees will receive either Section 8 rental subsidy assistance, or relocation assistance under the provisions for permanent dis- placement of the U.S. Uniform Relocation Assistance and Property Acquisition Act of 1970, at the option of the City. Provisions of the Act include technical assistance, moving allowances, and rental differential payments. Displacees receiving Section 8 certificates will also be eligible for technical assistance and moving allowances. B. Technical assistance will include information and counseling to familiarize displacees with opportunities to select appropriate replacement housing within the full range of available housing, with individual rights under the federal Fair Housing Law, and With methods for searching for suitable replacement housing. C. No displacees will be discriminated against in the provision of information, counseling, referrals, or other relocation services. -2-