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HomeMy WebLinkAbout1994/09/06 Item 21 ITEM TITLE: SUBMITTED BY: REVIEWED BY: BACKGROUND: CITY COUNCIL AGENDA STATEMENT Item ~ / Meeting Date 09/06/94 Public Hearing: GPA-90-9(A): Consideration of State-mandated Revisions to the 1991 Housing Element of the City General Plan--Chapter 1451, Statutes of 1989, Relating to the Preservation of Subsidized Housing At Risk of Conversion Resolution J 'l" 4/ l:opting amendments to the General Plan Housing Element of 1991 regarding the preservation of at-risk housing as required by State Housing Element Law Community Development Director C~J Director of Planning (~, , City Manage~ b~\ (--:? (4/5ths Vote: Yes No --X) , On May 15, 1992, the State Department of Housing and Community Development (HCD) issued a letter finding the City's adopted Housing Element update in compliance with the State Housing Element Law. That same letter noted, however, that select portions of the Element would soon lapse from compliance given changes in the State Housing Element Law which were to become effective on July 1, 1992. Those changes regard the preservation of existing subsidized low- income housing units which could be converted to non-low-income use. Staff of the Community Development and Planning Departments subsequently worked with HCD in the preparation and review of proposed revisions (please see Exhibit A). As a result, HCD issued a letter indicating that the proposed amendments were found to be in compliance with the revised State law. As a matter of procedure pursuant to Section 65585 of the State Government Code, it is now necessary for the City to formally adopt the amendments as part of the Housing Element, and to subsequently forward the adopted amended Element to HCD. The Environmental Review Coordinator has determined that the proposed amendments will not have a significant impact upon the environment, and has issued an Addendum to Negative Declaration IS-92-08 (please see Exhibit B). RECOMMENDATION: That the City Council; 1. Find that the proposed amendments will have no significant environmental impacts, and adopt the Addendum to Negative Declaration IS-92-08(A); and, 2. Adopt the proposed amendments to the Housing Element of 1991. .2/" J Page 2, Item ~ Meeting Date 9/6/94 BOARDS/COMMISSIONS RECOMMENDATION: On August 24, 1994 the Planning Commission held a public hearing and voted 4-0 (3 members absent) to recommend that the City Council approve and adopt the proposed amendments to the Housing Element of 1991. DISCUSSION: Revisions to State Housing Element Law. Preservation of "At-Risk" Housing Units - Background Amendments in State Housing Element law brought about by Chapter 1451, Statutes of 1989, now require all housing elements to include additional needs analyses and programs to address the potential conversion of existing assisted housing developments to non-low-income uses during the next ten year period (Gov. Code Sections 65583 (a)(8) and (c)(6)). These expanded analyses and programs are required as of July 1, 1992. The need for such efforts arises largely from the Federal Housing and Urban Development (HUD) Section 236 program conceived in 1968. The Section 236 program provided mortgage insurance and mortgage interest reduction to for-profit and non-profit developers who agreed to build low-income affordable units for families. Typically, the contracts for such projects included a 40-year mortgage which, in the case of for-profit developers, could be prepaid after 20 years. If such prepayment occurred, the project would no longer have the affordability requirement. As a result of not considering the potential consequences of such a prepayment option, in 1987 HUD found the nation facing a serious threat to its available stock of affordable housing. Congress subsequently passed the Emergency Low-Income Housing Preservation Act (ELIHPA), which precluded any prepayment until new permanent legislation was in place. In 1990, the permanent Low-Income Housing Preservation and Resident Homeownership Act (LIHPRHA) was passed. Consistent with the provisions of LIHPRHA, the State promulgated amendments to the State Housing Element Law requiring local jurisdictions housing elements to include needs analyses and programs to identify and plan for the preservation of these units at-risk of conversion to non-low-income affordability. Proposed Amendments to the Chula Vista Housing Element of 1991 As noted in the Background section of this report, City staff has completed amendments to select sections in Part 2 and 3 of the General Plan Housing Element of 1991 as necessary to comply with the changes in State law. Those amendments (attached as Exhibit A) reflect a quantification and expanded analysis of existing local low-income affordable housing developments at such risk of conversion, along with suggested programs/efforts such as the utilization of Redevelopment Agency Set-Aside Housing Funds and Community Development Block Grant Funds for rent subsidies, non-profit predevelopment costs, and acquisition loans to preserve their affordability. The revisions are indicated in strike/underline format, with the proposed new text being underlined. .1/, ;L Page 3, Item ,)./ Meeting Date 9/6/94 Since an analysis and discussion of at-risk housing units had been included with the draft Housing Element of 1991 as originally reviewed and approved by HCD in May, 1992, the amendments requested by HCD to comply with the changed law essentially amount to an enhancement of the existing analysis and discussion. The more specific nature of the proposed amendments is summarized as follows: For Part 2 (pages with 11-# format)- corrects the number of complexes and units involved. adds the complexes' ages, and correspondingly denotes their rehabilitation needs. generally identifies potential funding sources to assist in preservation, and the likelihood of their availability. expands discussions to address the contract expiration conditions for select complexes, and to identify the estimated level of costs to retain affordability. For Part 3 (DageS with III-# formaO- corrects quantified assistance objectives based on the revised number of units involved. presents more specific implementing actions / proposals for the preservation of those units most likely at risk of conversion to non-low-income affordability over the lO-year period from 1991 - 2001. In overview, 8 projects involving 572 potentially at-risk units have been identified and addressed by the proposed amendments. Three hundred eighty six (386) of those are focused upon for action over the next several years, as they are most likely at risk of conversion. In that regard, the Community Development Department has been actively involved with the owners, local non- profit entities, and other resources to ensure the retention of those units. All totaled, the 572 potentially at-risk units comprise a substantial amount of the City's existing low-income affordable housing stock. Also, as previously noted, these amendments have already been initially reviewed by State HCD and found to satisfy the revised State law. The present proceedings are, therefore, mainly a matter of procedure to formally incorporate the amendments into the City's Housing Element to obtain full legal compliance. Timing for AdoDtion of the ProDosed Amendments On August 3, 1994, the City received notification from State HCD of the availability of substantial housing assistance monies through the BEGIN Program. The BEGIN Program is an off-shoot of the Federal HOME Program of 1990, and provides funds to cities and counties for use as assistance for low-income first-time homebuyers. This assistance can be in the form of downpayment, closing cost and/or second mortgage assistance. Staff is currently in the process of preparing an application package to meet the State's September 9, 1994 filing deadline. One of the critical filing requirements is full legal compliance status for the City's Housing Element. oi /-:J Page 4, Item ~ I Meeting Date 9/6/94 As previously noted, local adoption of the proposed amendments, and subsequent re-filing of the amended Housing Element with HCD is necessary to obtain full compliance status. Staff has been in contact with key personnel at HCD, and has been assured that completion of local adoption hearings on the amendments by the Planning Commission and City Council before the September 9, 1994 deadline will facilitate acceptance of the City's BEGIN application filing. FISCAL IMPACT: In conjunction with the preservation of at-risk housing units, there does exist the possibility of the City creating subsidies which might be financed from HUD and/or CDBG funds. The creation of such subsidies would occur in conjunction with negotiations on the preservation of a particular project(s), and would be brought forward for Council consideration at that time. With an officially approved Housing Element document, the City will apply to the State for BEGIN first-time homebuyer housing funds. The amount of funds received could range anywhere from $100,000 to $500,000. Attachments \lA. ~ B. C. D. Proposed Housing Element Amendments Addendum to Negative Declaration IS-92-08(A) Planning Commission Draft Minutes of 8/24/94 .' Planning Commission Resolution GPA-90-09(A"~J'!"'" ........'" U l' ~CA.NNE.u (M,\SHARED\HE-AM-CC .RPT) .2/-'1 RESOLUTION NO. /7t48' RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA ADOPTING AMENDMENTS TO THE GENERAL PLAN HOUSING ELEMENT OF 1991 REGARDING THE PRESERVATION OF AT- RISK HOUSING AS REQUIRED BY STATE HOUSING ELEMENT LAW WHEREAS, on May 15, 1992, the State Department of Housing and Community Development ("HCD") issued a letter notifying the City that the Housing Element of 1991 was found in compliance with State law, excepting those provisions for the preservation of at-risk housing brought about by Chapter 1451, Statutes of 1989, and to affect compliance after July 1, 1992; and, WHEREAS, in response, the City, in cooperation with HCD, prepared necessary amendments to the Housing Element of 1991 regarding the preservation of at-risk housing units; and, WHEREAS, in accordance with Government Code Section 65585(b), the City submitted for review, and received approval of the proposed amendments from HCD by their letter dated September 25, 1992; and, WHEREAS, pursuant to Government Code Section 65585(c) the City is now required to formally adopt those amendments as part of the Housing Element of 1991, and to provide a copy of the amended Housing Element to HCD to obtain full legal compliance; and, WHEREAS, an Initial Study and Negative Declaration thereon (lS-92-08), of possible significant enviromnental impacts of the 1991 Housing Element was previously issued by the Enviromnental Review Coordinator; and, WHEREAS, the Enviromnental Review Coordinator has reviewed the proposed amendments and determined that no new enviromnental issues not previously analyzed by that Initial Study and Negative Declaration (IS-92-08) are raised, and has thereby issued an Addendum to the Negative Declaration (IS-92-08A) for the proposed amendments; and, WHEREAS, the City Planning Commission considered said amendments at a duly noticed public hearing held August 24, 1994, at which they considered the Negative Declaration and Addendum thereto (IS-92-08A), and voted unanimously (4-0 with 3 members absent) to approve said amendments and recommend their adoption by the City Council; and, WHEREAS, the City Council conducted a duly noticed public hearing on September 6, 1994, to consider the Negative Declaration and Addendum thereto (lS-92-08A), and the proposed amendments to the Housing Element of 1991 and recommendations thereon. .1/-f NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF CHULA VISTA does hereby find, order, determine, and resolve as follows: 1. That the proposed amendments to the City's Housing Element of 1991 will have no significant environmental impacts, and adopts the Addendum to the Negative Declaration issued under IS-92-08A. 2. That the proposed amendments are consistent with the goals and objectives of the General Plan Housing Element of 1991 regarding the preservation and enhancement of available low-income housing stock within the City. BE IT FURTHER RESOLVED that the City Council of the City of Chula Vista does adopt the proposed amendments to the Housing Element of 1991 regarding the preservation of at-risk housing units, a copy of which amendments are attached hereto as Exhibit A, and authorizes the filing of said adopted amendments with the State Department of Housing and Community Development as necessary to bring the City's Housing Element into full compliance with State law. Presented by A ~ Robert A. Leiter Director of Planning Bruce Boogaard City Attorney (M :\SHAREDlHE-AM-CC .RSO) .21"'1, EXHIBIT A ,)/. ? 01'1'/ "P B.7 Student Poculation Chula Vista is the location of one community college named Southwestern College with an enrollment of approximately 9,602. The college director indicated that in times of recession, full and part-time enrollment is expected to increase as adults re-enter school to enhance employment skills needed in the work force. While most of these community college students commute from outside the area, some do compete for local housing along with other low-income groups. C. AT-RISK HOUSING There are three types of housing potentially at risk of converting to market type rentals between 1991 and 2001 as shown in the following table: Potential At-Risk Housinq Family Units - HUD 236 Family Non-236 Units Elderly Non-236 Units C.l Family Units - HUD 236 Contracts The following table illustrates the required information for the City/s HUD Section 236 units: ~7~ 572 total units 386 units J.J.'IJ ill units 32 units a. Castle Park Garden Apartments 272 Kennedy Street Chula Vista, CA 91911 62 non-elderly, low income units Earliest Date of Conversion: December 1991 Aqe: 21 vears ~P~~JtJp~I//Y~tl/~pp~ Rehabilitation Needs: Minor b. Oxford Terrace Apartments 555 Oxford Street Chula Vista, . CA 91911 132 non-elderly, low-income units Earliest Date of Conversion: March 1993 (Owner may begin LIHPRHA process 18 months before the project's 20th birthday) Aqe: 19 vears ~P~~JtJp~I//Y~tl/~PP~ Rehabilitation Needs: Minor c. Palomar Apartments 171 Palomar Chula Vista, CA 91911 168 non-elderly, low-income units Earliest Date of Conversion: March 1993 (Owner may begin LIHPRHA process 18 months before the project's 20th birthday) Aqe: 19 years ~P~~JtJ~~I//Y~tl/~pp~ Rehabilitation Needs: Minor 11-18 ~/.'6 d. Rancho Vista Apartments 1419 Tobias Drive Chula Vista, CA 91910 24 non-elderly, low-income units Earliest Date of Conversion: November 1991 Aae: 21 years ~p~p!~!p~I//~~~i Rehabilitation Needs: Moderate In 1968, HUD developed the 236 program that provided both mortgage insurance and mortgage interest reduction. to any for-profit or non-profit developer who agreed to build affordable housing units for families. Typically, the contracts for these projects included a 40 year mortgage which could be prepaid after 20 years, and if prepayment occurs, then the project no longer has an affordability requirement. This prepayment option only appl ied to for-profit developers. Unfortunate ly, HUD did not cons i der the consequences of this prepayment option, and as a result, the nation now faces a serious threat to its available stock of affordable housing. In 1987, this threat was brought to the attention of the federal government, and Congress passed the Emergency Low-Income Housing Preservation Act (ELIHPA). This Act precluded any prepayment until February of 1990, and in February, the Act was extended until new permanent legislation could be adopted. In 1990, the National Affordable Housing Act was passed, and this Act included the Low-Income Housing Preservation and Resident Homeownership Act (LIHPRHA). LIHPRHA will provide a permanent solution to the preservation problem if it is adequately funded. Chula Vista has four projects which were HUD financed using the 236 program. Current I y, two of these projects have fil ed a Notice of Intent which states that they intend to prepay their mortgages. In reality, these projects probably will not be able to prepay since both ELIHPA and LIHPRHA have strict requirements for prepayment. Under LIHPRHA, these property owners can elect to proceed under ELIHPA or LIHPRHA. Nonetheless, both 'acts require an owner to prove that termination of the affordable units will not materially increase economic hardship for current tenants (which generally means annual rent increases of less than 10%); will not i nvol untarily di spl ace current tenants; or will not adversely affect affordable housing opportunities for low-income and very low-income families, including those families seeking employment in the area, and minorities. Both ELIHPA and LIHPRHA state that these units should be acquired by either a non-profit or a publ ic agency whenever possible. Undoubtedly, the acquisition costs of these units will be high. Nonetheless, both laws provide acquisition incentives to non-profits and public agencies, but LIHPRHA mandates that the following incentives be given: (1) insurance for financing up to 95 percent of the preservation equity (equ ity as determi ned by HUD) under the HUD Sect i on 241 (f) II-19 ,11 -tj program; (2) grants up to the present value of the total of the projected publ ished Fair Market Rents for Section 8 Existing Housing for the next 10 years (or longer, if necessary); (3) reimbursement for transaction expenses relating to acquisition, such as ordinary transaction costs, financing fees and operating deficit coverage. Subject to appropriations, LIHPRHA also states that HUD must provide assistance sufficient to enable acquisition at a purchase price not greater than the HUD defined preservation value, to pay the debt service of the mortgage and debt service on any rehabilitation loan,. to meet project operating expenses and adequate reserves, and to receive an adequate return on any cash investment made to acquire the project. The approximate cost of acqui sit i on for a 11 four compl exes is $26 million. This figure was determined by USing the Section 8 Fair Market Rents and a gross rent multiplier of 8. These "at-risk" projects should be preserved, whenever possible, since it would be impossible for the City to replace these lost units. The City has already received the notice to prepay from two owners, and the other two projects can fil e their notices in March of 1991. The owners of these builders are receiving very small rents since the average rent for a two bedroom apartment is $292, and for the most part, they have burned their tax depreciation benefits. Therefore, it is very likely that they may attempt to sellar prepay. To date, the City has identified the following resources which could be utilized for the preservation of these HUD Section 236 units: a. Redevelopment Agency Housing Set-Aside Funds: $200.000: and, b. Community Development Block Grant FundsJl ApprOXimately $500,000 is available, but the City traditionally uses CDBG funds for public improvements in low and moderate income neiohborhoods. Therefore. it is unlikelv CDBG funds could be made available. The Agency~ ~~t $200,000 ~~J~~ could be leveraged in a bond issue to produce $2,000,000. If a bond issue is accomplished, the Agency would have sufficient funds to provide a loan to a non-profit for predevelopment and equity since the estimated cost, to the Agency, of preservation is $1,300,000. The cost of preservation is significantly less than the cost of replacement since this cost is estimated to be $40,530,000. In the past 12 months, City staff has identified the following non-profits which could assist with the preservation of the City's HUD Section 236 projects: a. Chicano Federation; b. Civic Center Barrio; c. Interfaith Housing; d. MAAC Project; and, e. South Bay Community Services. 11-20 III ~/- C.2 Non-236 Housina Units At-Risk In addition to the HUD Section 236 Projects, the City has three apartment projects which are at-risk because of expiring use restrictions. These projects are as follows: a. Beacon Cove Apartments 536 East H Street \ Chula Vista, CA 91910 , 33 non-elderly, low-income units Earliest Date of Conversion: 1996 Ace: 6 vears Type of Government Ass i stance Recei ved: Ful fi.ll ment of the City's Affordable Housing Obligation for the Terra Nova Subdivision b. Eucalyptus Grove Apartments 67 East Flower Street Chula Vista, CA 91910 75 non-elderly, low-income units Earliest Date of Conversion: 1995 Ace: 7 vears Type of Government Assistance Received: Density Bonus & Multifamily Housing Revenue Bonds c. The Meadows of Chula Vista 1055 Granjas Road Chula Vista, CA 91911 32 elderly, low-income units Earliest Date of Conversion: 2000 Ace: 7 vears Type of Government Assistance Received: Density Bonus ~ Terra Nova Villas 440 East H Street Chula Vista. CA 91910 46 non-elderlv. low-income units Ace: 7 vears Earliest Date of Conversion: 1995 Tvoe of Government Assistance Received: Housinc Revenue Bonds Mult i-famil v The estimated cost of replacing these units is JJ~"J~'~~~ $19,809,000. To date, the City has identified the following resources which could be utilized for the preservation of these units: a. Redevelopment Agency Housing Set Aside Funds: 5200.000i and, b. Community Development Block Grant Funds. Approximately 5500,000 is available, but the City tradi t i ona 11 y uses CDBG funds for pub 1 i c improvements in low and moderate income nei chborhoods. Therefore. it is unlikely CDBG could be made available. II-21 .21-11 In order to preserve the family units in Beacon Cove, the only viable alternative is rent subsidies since the existing contract specifi cally states that restri ct ions wi 11 terminate ten years after the contract was executed. The rent subsidies would provide, for the number of units currently restricted, the di fference between what the owners are allowed to charge which is currently market rate and what market rate may eventua 11 y be. Estimating the cost of rental subsidies is extremely difficult since the City has no way of determi n i ng how much and when rents will increase. Therefore, estimating the cost of preserving these units is nearly impossible. However. if an ~ssumotion is made that market rate rents increase bv 4% each _ear for th i rt v vears and the count v med i an income does not increase. the Aqencv would need aooroximatelv S315.000 to orovide rental subsidies. Accordinq to the coooeration a~reement between the Citv and the owner. the owner is allowed ~~ charqe a rental rate no qreater than 1/12th of 30% of 80% of __unt v med i an income. Therefore. if the medi an income increased at the same rate as the increase for market rents. the restricted rents would continue to mirror market rents and no subs i dies woul d be needed. Since the Agency has 1 imited funds and th is fund i ng has been commi t ted to preservi ng the City's HUD Section 236 units and the Agency's very viable rehabi 1 i tat i on program, the Agency would only have approximately '~Nililil S25.000 to 'ir/r1r/rlII/J/I allocate for rent subsidies. The Citv will continue to monitor comoliance with the Citv's Coooeration Aqreement which requires the owner to orovide units to low income households. As the year of ~onvers i on aooroaches. the Aqencv wi 11 di scuss the oossibi 1 itv _f orovidinq rental subsidies or other incentives which could oreserve the units. The Agency is currently investigating the possibility of refinancing the bonds for Eucalyptus Grove, and if this occurs, the Agency will require extended rental restrictions. With this alternative~ the Agency will incur no costs. Durinq the refundinq of the bond issue for Terra Nova Villas. an extension of the oriqinal requlatorv aqreement was at tem~ted. However. due to the current 1 endi nq envi ronment. the _xtension was not oossible. Currentlv. a non-orofit ~o~oor~iion is attemotinq to acquire these units. If this transaH ion occurs. these units mav continue to be affordable. If the non-~r~fit does not acquire these familv units. the City will attemo_ _0 work with the owner to extend the affordabilitv restrictions bv determininq an alternative form of credit enhancement. The Letter of Credit for the bonds will exoire on March J. 1995. With this alternative. the Aqencv will incur some staff costs. but the costs will be minimal. Senior projects built were typically built under the density bonus program, and they are less likely to convert to market rents due to the Conditional Use Permits under which they 11-22 .2/'/.2. operate. In order to convert, the owner woul d have to underwri te a cons iderabl e expense to bri ng the senior projects into code compliance mainly for parking requirements. For these reasons, it is unlikely that The Meadows will convert. The following non-profit corporations could assist with the preservation of the above listed units; a. ... Chicano Federation: b. 'Civic Center Barrio: c. Interfaith Housing: d. MAAC Project; and, e. South Bay Community Services. Since the cooperation agreements ~!~~ fQr Eucalyptus Grove and Beacon Cove allow rents which are currently prevailing market rates, the real impact of losing these units is minimal. When the cooperation agreements were written, the med i an income for the San Di ego Standard Metropoli tan Statistical Area was much less, and the rent restrictions were considerable. D. PROJECTED NEEDS 0.1 Introduction/Current Estimates Since the beginning of the last Element's planning period in 1985, the San Diego Region has experienced fairly rapid and consistent population growth at an average of 3.6% per year, coupled with an average growth in the number of housing units of 3.7% as illustrated in Table 11. By comparison, Chula Vista has generally para 11 e 1 ed the reg i on with average growth rates for popul at i on and hous i ng over the 5 year peri od bei ng 0.1' higher than regional rates. Tables g and 10 provide the actual numerical growth in establishing the current population and hous i ng totals for 1990. The fi gures in parenthes is under "' increase" represent the actual growth percentage without influence from the Montgomery Annexation in late 1985. (continuation of existinQ Element text) I I - 23 / ,2 -13 . QUANTIFIED ASSISTANCE OBJECTIVES 1991.96 COMPREHENSIVE HOUSING PLAN Obiectives 1. 2. and 3 - New Construction Total Units: Very Low 80 75 40 50 1339 - 245 units Public Housing Units (County Housing Authority) Senior Housing Units (Section 202) Non-Profit Family Housing Units Family Relocation Housing Units Low. 628 units 63 Family Density Bonus 50 Senior Density Bonus 29 Family Non-Profit 358 Affordable Housing Program (Mandatory) 79 Affordable Housing Program (Incentives) 50 Family Relocation Housing Moderate - 131 units 131 Market Rate for Sale and Rental Units Other - 335 units 335 Market Rate for Sale and Rental Units Obiective 3 - Oooortunities for Very Low-Income Renters Total Units: 500 200 New Section 8 (Certificates and Vouchers) 300 Shared Housing Program (Seniors) Obiective 5 - Rehabilitation and Conservation Total Units: 7~) ~ ~~~ 386 At Risk Low-Income Units (Section 236 Family) 1Z Non-236 Senior Housina Units 200 Single Family and Mobilehome Rehab (CHIP) (180 very low income. 20 low income) 65 Rental Rehabilitation Obiective 6 - Transitional Housina Total Units: 20 Very Low-Income (New construction or rehab) 111-2 J .}1'/7 O/~7 r, ~- OBJECTIVE 5 The systematic renewal, rehabil itation, conservation, and improvement of the residential neighborhoods of the Chula Vista Planning Area. Policy 1. The City shall address the development of mechan isms des igned to prevent at-risk affordable units from conversion to market rate rents. 2. The City will continue to initiate pro-active programs for neighborhood revital i zat ion and improvement, and to supply support funding for these efforts, especially in neighborhoods with higher concentrations of lower-income households. 3. The City shall continue to advocate conservation measures to preserve existing housing stock, variety, and affordability. ImDlementina Actions A. ?t~~~t~~ Preservation of At-Risk Affordable Housing Units A.I HUD Section 236 Units 1~~IIAfrv.vII~1117~~II~~~II~pA~ft~B1llvvYr111~II~t~ ~pt~~tj~llll!y.yv~V~Y/~Atft~B1IYVvlt0~~/~~f'P~/~/t~~ ~tp~~ttlllp~~~t~II~~~~II~f~p~/~~~tllpptjp~~llj~llt~~jtII~pftg~g~ ~p~tt~~t~jlll$j~~~II~p~gf~~~llp~~t~pllt~~II~~~tg~~~111~p~/J~~p~~ ~p~tj~g/~/~ttl!0YIJ~~7/~~/~~p/~/~p~/J~~p~~ ~p~tj~gllV~V1V~y(rYvv/~/~~fi~~~tll~~~~~~~~f1~'~/j.o/qV/AfIIJ~~~ ~~J~?~~~J'lt~~/lj~~lj~ppplp'lpf~p~i~~~t/~~t/~~~~/t~p~~~pl ~~p~f/~/'~p~t~l/~llt~~/~/~~pllYVlj~t~t~~t~pl!0Ylt~~ ~t~p~i~~~tll~Y~/tAtVlt~~~/~/ptIIYVv/~~/t~~t ~pt~1 #/WPIY I~~I) I /..I.APNW NffW I t/JI NrlrNYcfv I N ~ It#~t~ ~~pll~t/~~j~t~j~/~"ptp~~jljtij $p~~/~~A&llv~~~r1/~~//Vrrvl'f~~tt~t~p/~~/~/~/~~~t tPllr~v/~/Afllt~~II'~~~~t'Y~11IvVVrvrcf/~/t~/~~p~t ~~J~?~/~~1117~~/~~/~/r~V1Vlp~~~t~/~NrlVV(Ylj' ~llqv{yYVYrcf/~II~~~1IfttqV/~/'pt~~fpIIYifII~/~/~p~t~~j 1~~II~ftt811~tll~/~~~/~llcfr{y/~Y~llif~~Vf111~~pll~t~ p~t~t~j~~pltp/~~11Ij~/ptp~fltplpf~t~t1~/t~~~~/~~jt~j The City has received Notice of Intent to Prepay from two projects, with a possible loss of 186 affordable units. The City shall involve itself in the negotiation process that is mandated under ELlPHA and L1HPRHA to ensure that every opportunity to retain affordability is pursued. III-21 , ~/ D< I. /...;? . The following actions are proposed to respond to the HYQ Section 236 "at-risk" conditions in Chula Vista: Durinc the current olanninc ceriod. its oreservation efforts toward the which have exoirinQ use contracts. all 386 low income units. the Citv will concentrate 386 HUD Section 236 units Our obiect i ve is oreserve 1. 1 As illustrated on Dace 11-18. the City ~/ll hi1 revi ew~ its inventory of rental hous i ng and determi ne~ which units have prepayment options and at what date. Since the Citv is aware that owners are allowed to file a Notice of Intent 18 months before the 20th anniversarv of their endorsement date and has determined these dates. City staff will monitor for these Notices of Intent. 1 When not ices are fi 1 ed. the City will moni tor the process of negotiations. i.e.. clans of action and participate as necessary. The City will work to prevent prepayment based on a unsuccessful escrow or a finding of "not needed in the community". 2. 1 As listed on oaqe 11-20. the City ~/n hi1 identiflied potential buyers for "at risk" HUO Section 236 projects and will assist t~/If~if~//~/'pt p~ft~~~~ bv determininq resources for aCQuisition. In fact. Aqencv sta ff is current 1 v work i nq with one of the oraanizations listed on 11-20 to clan for the oossibilitv of conversion. If this non-orofit is unable to work with the Aqencv. the Aqencv 1~~//~'%' will give assistance priority to A non-profit community development corporation~ who can demonstrate caoacitv. t~p~~/lltl ~~~//~~p//~)ll//~~)~t~)~//lp~glt~f~//~"pf~~~)l)tli///~p/~t ~~~t~f~~//~~t~~~IV/~-~~~//~if//r~t/~t~rt1//~~~~lpp~f~ ~)ll///(yi~//~//tpfi~)p~f~p!////Y~(//~//~///tp~~/~~f pfp~)~)~g//Pf~~~j~lpP~~~t//,~~~)~g//t~//~~~~l~//~p~/pfp')t~ %~//q~rv~/~/)fi)t)~J//%r~~%//~/~//~tAP)fi)t)pfi! ~ Aqencv will cons i der ut il i z i nq the $200.000 ident ifi ed on oaqe il-20 to orovide fundinq for oredevelooment costs and aCQuisition in order to enable non-orofits to oreserve the City's HUD Section 236 Units. 3. The City ",~I clans to form an ad-hoc committee comprised of non-profit and for-profit developers, City staff, other local government officials, and tenants of "at-risk" units to develop a formal strategy for preservation. A.2 Non-236 Units As identified in Section II, the City has J~~ la2 non-HUD Section 236 units which are at-risk of converting to market rate rentals. The following actions are proposed to respond tQ these units: 1. ;r~~ City staff will continue. in the next several months. to pursue the possibility of refinancing the bonds for Eucalyptus Grove Apartments so that rental restrictions will continue. oJl'/" IIl- 22 . 2. ~~ ~ the current restricted rents at Beacon Cove Apartments are close to market rate, preserving these units does not seem to be the best use of funds. Rent subsidies may be considered bv Citv staff when the use restrictions for these proiects expire. h//~~~ However. the City has other urgent needs such as preserving the HUD Sect ion 236 un i ts, cont i nu i ng the Agency's rehabil i tat ion program, and funding non-profits who will provide units for very low-income households. ~ As mentioned on paae 11-22. the Citv will attempt to work with the owner of Terra Nova Villas to extend the affordabilitv restrictions bv determinina an alternative form of credit enhancement. ~I !... Si nce The Meadows was bu i It with a seni or dens ity bonus, conversion ~fp~~~li will likelv not occur. l~_ City staff will t.P!t/N1/J,k/ /rr/ mon i tor the project in the vear 2000 and after. If conversion is requested, the City ~f.f.~'/1~f. wi 11 work to negot i ate cont i nued rent restrictions. B. Community Appearance/Neighborhood Improvement Program The Bu il ding and Hous i ng Department wi 11 cont i nue to oversee and implement this pro-active program of neighborhood preservation and improvement. Initiated in March 1989, this program targets specific neighborhoods exhibiting high volumes of citizen complaints in which Code Enforcement Officers, teaming with residents and designated "Block Captains., 1II-22. .11-/7 /,;/~/S EXHIBIT B ~/-IY EXHIBIT B ADDENDUM TO NEGATIVE DECLARATION 08-92-08A) [Addendum to Negative Declaration IS-92-08 for 1991 Revisions to the Housing Element of the General Plan] PROJECT NAME: GPA-90-9(A): Consideration of State-Mandated Revisions Regarding the 1991 Housing Element of the Chula Vista General Plan,(chapter 1451, statutes of 1989), Relating to the Preservation of Subsidized Housing at Risk of Conversion. PROJECT LOCATION: City-wide PROJECT APPLICANT: City of Chula Vista CASE NO.: IS-92-08A I. INTRODUCTION The environmental review procedures of the City of Chula Vista allow the Environmental Review Coordinator (ERC) to prepare an addendum to a Negative Declaration or Environmental Impact Report, if one of the following conditions is present: 1. The minor changes in the project design which have occurred since completion of the Final EIR or Negative Declaration have not created any new significant environmental impacts not previously addressed in the Final EIR or Negative Declaration; 2. Additional or refined information available since completion of the Final EIR or Negative Declaration regarding the potential environmental impact of the project, or regarding the measures or alternatives available to mitigate potential environmental effects of the project, does not show that the project will have one or more significant impacts which were not previously addressed in the Final EIR or Negative Declaration. This addendum has been prepared in order to address minor technical changes to the Housing Element of the General Plan related to the status of At-Risk Housing. Therefore, in accordance with Section 15164 of the CEQA Guidelines, the City has prepared the following Addendum to the Negative Declaration for the Housing Element revisions (IS-92-08A). ,}/-/9 A. PROJECT BACKGROUND In 1991, the City of Chula Vista updated the Housing Element of the General Plan in accordance with the requirements of the State of California Department of Housing and Community Development. The update was prepared to ensure that local policies and programs are responsive to changing conditions and future housing needs. Subsequent to the approval of the Housing Element Update, amendments have been proposed to update the status and improve accuracy of information provided in Section C: At-Risk Housing. B. PROJECT DESCRIPTION The proposed amendments to the Housing Element address At-Risk Housing inventories, unit condition, and the status of funding and fmancing arrangements. The purpose of the proposed amendments is to improve the City's efforts at preserving affordable housing units that are potentially at risk of converting to market type rentals between 1991 and 2001. C. IDENTIFICATION OF POTENTIAL ENVIRONMENTAL EFFECTS The proposed amendments will not result in any significant environmental impacts. The proposed amendments address the affordable status of existing housing units and will not result in a change in the density or total housing units available within the City. The focus of the effort for this project is to maintain unit affordability status and consequently maintain the demographic profile of residents within the subject units. Since the number of units and the anticipated household size will remain unchanged, no increases in population are anticipated to result from this project. E. CONCLUSION The proposed project amendments are not associated with any significant or potentially significant environmental impacts, therefore, no project specific mitigation will be required and the findings of the Initial Study and Negative Declaration for the 1991 Revisions to the Housing Element of the General Plan remain unchanged. -2- 02/" ,(1/ Pursuant to Section 15164 of the State CEQA Guidelines and based upon the above discussion, I hereby find that the project revisions to the proposed project will result in only minor technical changes or additions which are necessary to make the Negative Declaration adequate under CEQA. ~ft~~?- - ONMENTAL REVIEW COORDINATOR REFERENCES General Plan Housing Element, City of Chu1a Vista City of Chula Vista Environmental Review Procedures Negative Declaration IS-92-08, 1991 Revisions to the Housing Element of the General Plan, October 11, 1991 -3- ,;/ ~.21 EXHIBIT C .11'.2.:2 Excemt from Draft Planning Commission Minutes of 8/24/94 ITEM 2: GPA-90-9(A): CONSIDERATION OF STATE-MANDATED REVISIONS REGARDING THE 1991 HOUSING ELEMENT OF THE CITY GENERAL PLAN--CHAPTER 1451, STATUTES OF 1989, RELATING TO THE PRESERVATION OF SUBSIDIZED HOUSING AT RISK OF CONVERSION Associate Planner Batchelder presented the staff report, noting that these are City-initiated amendments to portions of the Housing Element that were previously approved by the Commission in February 1992. There were changes in State law which required revisions to the "at-risk housing analysis" portion of the Housing Element. Commissioner Salas asked if the projects in question could be taken over by community groups, and if the community groups mentioned in the staff report were working on taking over the projects or if they had expressed an interest. Mr. Batchelder stated that those individuals had expressed interest. They are all non-profit organizations, and the State law indicates that non-profit organizations and/or the City be given first right of opportunity to take over the complex if the owners propose to convert it from non low-income use. Community Development Specialist Martinez added that two of the complexes out of the 386 units, which represent four apartment complexes, are currently in negotiation with the City and with South Bay Community Services to keep the units affordable. They were not near any conclusions regarding price or terms. Commissioner Salas asked if South Bay Community Services, at this point, was the only non- profit organization which had expressed interest, and which projects. Mr. Martinez noted the projects were Oxford Terrace and Palomar Apartments. Commissioner Salas clarified that there was not a large risk of the projects being taken out of the low-income housing market at this point in time. Mr. Martinez concurred. This being the time and the place as advertised, the public hearing was opened. No one wishing to speak, the public hearing was closed. MS (Martin/Salas) that the Planning Commissioners considered the Negative Declaration (IS-92-08) and Addendum thereto (IS-92-08A), and adopt Resolution GPA-90-09(A) recommending that the City Council approve and adopt the proposed amendments to the Housing Element of 1991 in accordance with the draft City Council resolution and the findings contained therein. Vice Chair Ray asked if, upon an application to convert from the prior designation as it was built, they would still be required to go through all the same normal procedures. Mr. Batchelder concurred. VOTE: 4-0 (Commissioners Fuller, Moot, and Tuchscher absent) .2/-.1:1 EXHIBIT D .)/-.J.Y RESOLUTION GPA-90-09(A) RESOLUTION OF THE CITY PLANNING COMMISSION OF THE CITY OF CHULA VISTA APPROVING AMENDMENTS TO THE GENERAL PLAN HOUSING ELEMENT OF 1991 REGARDING THE PRESERVATION OF AT- RISK HOUSING AS REQUIRED BY STATE HOUSING ELEMENT LAW WHEREAS, on May 15, 1992, the State Department of Housing and Community Development ("HCD") issued a letter notifying the City that the Housing Element of 1991 was found in compliance with State law, excepting those provisions for the preservation of at-risk housing brought about by Chapter 1451, Statutes of 1989, and to affect compliance after July 1, 1992; and, WHEREAS, in response, the City, in cooperation with HCD, prepared necessary amendments to the Housing Element of 1991 regarding the preservation of at-risk housing units; and, WHEREAS, in accordance with Government Code Section 65585(b), the City submitted for review by, and received approval of the proposed amendments from HCD by their letter dated September 25, 1992; and, WHEREAS, pursuant to Government Code Section 65585(c) the City is now required to formally adopt those amendments as part of the Housing Element of 1991, and to provide a copy of the amended Housing Element to HCD to obtain full legal compliance; and, WHEREAS, an Initial Study and Negative Declaration thereon (IS-92-08), of possible significant environmental impacts of the 1991 Housing Element was previously issued by the Environmental Review Coordinator; and, WHEREAS, the Environmental Review Coordinator has reviewed the proposed amendments and determined that no new environmental issues not previously analyzed by that Initial Study and Negative Declaration (IS-92-08) are raised, and has thereby issued an Addendum to the Negative Declaration (IS-92-08A) for the proposed amendments. NOW THEREFORE BE IT RESOLVED that the City Planning Commission considered said amendments to the Chula Vista Housing Element of 1991 at a duly noticed public hearing held August 24, 1994, at which they considered the Negative Declaration and Addendum thereto (IS-92-08A), unanimously approved said amendments, and recommended adoption of the proposed amendments by the City Council in accordance with the attached draft City Council Resolution and the [mdings contained therein. .21.~ PASSED AND APPROVED BY THE PLANNING COMMISSION OF CHULA VISTA, CALIFORNIA, this 24th day of August, 1994, by the following vote, to-wit: AYES: Commissioners Martin, Ray, Salas, Tarantino NOES: None ABSENT: Commissioners Fuller and Tuchscher (with prior notification), Moot ATTEST: ~~_t<~ Jo C. Ray, Vice'Cha~an ~ R.' Nancy '!tPley, ary (M,ISHAREDlHE-AM-PC .RSO) ~/ .....2"