HomeMy WebLinkAbout2009/09/01 Item 12
CITY COUNCIL
AGENDA STATEMENT
. ~\1f:. CITY OF
'-~ (HULA VISTA
SEPTEMBER I, 2009, Item 12
ITEM TITLE:
PtJBLlC HEARING TO CONSIDER A.MENDING THE
FISCAL YEAR 2008/2009 HUD ANNUAL ACTION PLAN
SUBMITTED BY:
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING AN AMENDMENT TO THE
FISCAL YEAR 2008/2009 MNUAL ACTION PLAN OF THE
NEIGHBORHOOD STABILIZATION PROGRAM (NSP)
FUNDS TO EXPAND THE AREAS OF GREATEST NEED;
ADD A NSP ELIGIBLE USE TO ACQUIRE,
REHABILITATE, AND RESELL FORECLOSED OR
ABANDONED PROPERTIES; AND AUTHORIZE THE
REALLOCATION OF NSP F~S AS NECESSARY
DEPUTY CITY MANAGEia1 DEVELOPMENT SERVICES
DIRECTOR
..,-
CITY MANAGER I- 7)
4/5THS VOTE: YES D NO 0
REVIEWED BY:
SUMMARY
The Chula Vista City Council previously approved an amendment of the 2008/2009 BUD
Annual Action Plan to allocate Neighborhood Stabilization Program (NSP) fimds. The
purpose of the public hearing is to solicit public input and take action on .a proposed
amendment to the 2008/2009 .Annual Action Plan to expand the approved areas of greatest
need to include additional census tracts due to changing market conditions; add a NSP
eligible use for the acquisition, rehabilitation, and resale of foreclosed or abandoned
properties; and authorize slaffto reallocate NSP fimds as necessary.
ENv'IRONJ\lIENT AL REVIEW
The Environmental Review Coordinator has reviewed the proposed project for compliance
with the National Environmental Protection Act due to the use of Federal funds, and has
determined that the proposed project is deemed exempt under the National Environmental
Protection Act (NEPA) Regulations.
RECOMMENDATION
Council conduct the public hearing and adopt the resolution.
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9/1109, Item /2-
Page 2 of3
BOARDS/COMMISSION RECOM..I\1ENDA nON
The Housing Advisory Commission was provided an Information Memo on this action.
Due to current membership quorum issues they were unable to meet on this item.
DISCUSSION
Council previously approved an amendment of the 2008/2009 HUD Annual Action Plan to
allocate NSP funds established by Title ill of the Housing and Economic Recovery Act on
November 25, 2008 and appropriated said funds on March 24, 2009. During development
of the amendment of the 2008/2009 HUD Annual Action Plan to allocate NSP funds
,
staff focused on targeting smaller pocket neighborhoods affected by foreclosures based
on available data. Over the ensuing months, the foreclosure market in the San Diego
region changed dramatically. Since April 2009 when the first eligible first-time
home buyers were pre-committed for funds, buyers have had difficulty fmding properties
that meet program criteria and that compete effectively with other purchase offers. This
difficulty is due to a significant decrease in inventory caused by state and federal imposed
moratoriums on foreclosures, bank actions, and investor activity.
Although the neighborhoods originally selected are still greatly affected by households in
the foreclosure process, many homes are not available for purchase as banks have not
listed them on the open market. There is hope that NSP buyers will begin to be more .
competitive since HUD has reduced the required discount to a minimum of 1 % below
appraised value (per the NSP Bridge Notice, 6/11109) and there has been a slow increase
in foreclosed properties available for purchase. However, NSP buyers will continue to
have difficulty if NSP activity is limited to current target areas. Staff is therefore
proposing to expand the eligible area by including census tracts (including portions)
previously excluded but eligible under plan thresholds from the areas of greatest need,
and add four (4) additional tracts that have seen large increases in foreclosures in recent
months, as depicted in Attachments 1 & 2.
By expanding the eligible areas, buyers will have greater opportunity to fmd eligible
homes (doubling the target areas from approximately 12% to 24% of the city). Since
Chula Vista has seen high absorption rates of foreclosed properties, staff believes that the
NSP goal to stabilize neighborhoods affected by foreclosures will still be accomplished.
in addition, this action will amend the 2008/2009 HUD Annual Action Plan to include
program changes consistent ",ith NSP Bridge Notice requirements and clarify the
home buyer program description. It will further add a NSP eligible use to purchase and
rehabilitate homes and residential properties that have been abandoned or foreclosed
upon, in order to resell such properties to low and moderate income first-time
homebuyers. Should staff find properties that are not being removed from the market
through market sales or NSP purchases, and monies are left over from the $1,547,064
NSP fmancing mechanism use after December 2009, staff may use a portion of these
funds to partner with NSP non-profit contractors/developers to acquire and rehabilitate
these properties for the purpose of renting or reselling to qualified NSP participants. This
will further enable NSP funds to be focused to neighborhoods that have been destabilized
by unoccupied and distressed foreclosed properties.
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9/1/09, Item /2-
Page 3 of3
Citizen Participation Process
City Staff has been working since the notification of NSP to encourage input on the use
of funds. The City of Chula Vista held workshops during initial plan development to
recei ve feedback and project suggestions.
As required, a 15-day comment period to allow for the public to review the proposed
amendment and make comments or suggestions began August 21 st and will end on
September 5, 2009. There have been no comments received to date. Comments received
at this public hearing will be incorporated into the amendment.
DECISION MAKER CONFLICT
Staff has reviewed the property holdings of the .City Council and has found that two
conflicts exist, in that Councilmembers Castaneda and Bensoussan have property
holdings within 500 feet of the boundaries or within the target neighborhoods which are
the subject of this action. .
Due to identified conflicts during the initial target area development, City staff requested
a written opinion from the Fair Political Practices Commission ("FPPC"). In response,
the FPPC opined that Councilmembers could participate in the decision on this matter
because, "it does not appear foreseeable that the decision to appropriate HUD funds will
have a material financial effect (on a council member)."
FISCAL IMPACT
Current
There is no fiscal impact by tonight's action. NSP funds were previously appropriated by
Council on March 24, 2009.
Ongoing
There is no ongoing fiscal impact as the program is revenue offset by the grant funds.
ATTACHMENT
1. Updated Census Tract Summary of Recorded Foreclosures
2. Proposed NSP Target Area Map
Prepared by:
Stacey,' Kurz, Senior Project Coordinator,
Development Services Deparrment, Housing Division
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Attachment 1
Updated Census Tract Summary of Recorded Foreclosures (Pmposed Ta'getMea highlighted)
. ; .. . . . . - .. . . - .
- - . - . ,
::l . . - . . - . , : , : I I
12302 y 5 10 9 -10
12303 y 6 26 22 -15.4
12304 Y 6 14 17 21.4
12401 y 5 8 12 50
'~24(j2,';'Ml"";~ y ""';''lIi'i,~~ 28 23 -17.9
.-,--. -'.:ij;", "'~ I~~'~; :1I7k~';
I y 28 29 3.6
I I Y F;h~.il!&i~il!!1ltr 43 34 -20.9
~i:~LI,U.U y r""~ .,'..' -' , 27 36 33.3
12800 Y 6 27 28 3.7
y 6 29 41 .
I I Y 5 34 53
13102 Y 6 39 36 -7 7
13103 Y 5 6 5 -16. 7
13104 Y 6 26 28 7.7
13203 y 6 16 18 12.5
13204 Y . 7 8 14.3
1320512){O) Y 14 14 0
13206(2)13} y 20 28 40
13301 Y 5 58 67 15.5
13302 y . 41 44 7.3
E~l y 61 63 3.3
"'~~"~il"'13306'..'~-'-N~ Y 57 53 -7
"ir~~'_ ',;,";'!;' .;lff.'t; .. ,.__~i~, Y 39 33 -15.4
::r&~~:f.t::~~:r~~t1'~~9 ~:f~l't~~~:~~ y 76 91 19.7
Y 6 ~100'~ 94 -6
'''''''''''''f,13310 ~"""'~ lll\i!t~;l81~!~j1l,~'~'l
.'~-'''. ~_.." .. . '.'" ,.',.. y 6 ~;:,1#.?~,<~..~t46?:~~~~ -18.4
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N 6,;" 25.6
t~~!~;:;~~':13312{~J$~Y;'f"if~ y ~:~,:;':~~'!~.'t~~'i:,oI:: 4 1
~,~:2,~...: .~W ' _':LM~':5:t'.;'-~~1 .,......"~._-;". "'I;':'i"1llii":' "''''~..,.~ 43 4.9
Y ~ 22.8
13401 N 6 46 6.5
13409 Y 3 43 ~
' . N 6 80 ; . ", . ~'""
13411 N 5 :~ ..". :,'r
134121')13) N 5 23
13413 Y 5 73 74 1.4
13414 N 4 72 79 9 7
13415 y 5 15 17 --
~ y 5 18 33
N ~ 24 19 -20.8
Y ~;"LU,"_"21n~ 0
,_:s::,-::,,,,;-,~.,,,,,, .. -., '"1:;;:;'." ;;::',",' ;''''.. - --. ~;'----"--'F;":' :,~,'lfC;
.:::~:;:;'~-i1;.1~:!9Nf%...'":>.!~;'.~":";f""1'5'" Y 6 ;'~i!i~,;t52,,,Mj1ilii ~'i"i!;1.8Ei~~,i 22.4
(1) Census Tracts identified as eligible if any block group within the tract was LMMH.
(2) Census Tract was ex::luded from Initial Amendment even though it met threshold criteria.
(3) Excluded due to efforts to target & composition of census tract.
(4) Only a portion of the census tract was included in the Initial Amendment target area.
(5) Non-LMMH census tract eligible since serving LMMA households.
2008/2009 Action Plan Amendment (NSP) Update of Target Areas
NSP Substantial Amendment
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Large Market Changes
Target Neighborhoods
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PROPOSED TARGET
AREA AMENDMENT
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Red/."Vc1opmc.nr';
~HI!lISillJ;
Proposed Target Area
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moo
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Exduded From Initial Target Area D Census Tr<lct 2000
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RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA APPROVING Ai'\[ AMENDMENT TO THE
FISCAL YEAR 2008/2009 ANNUAL ACTION PLAN OF .THE
NEIGHBORHOOD STABILIZATION PROGRAM (NSP)
FUNDS TO EXPAND THE AREAS OF GREATEST NEED;
ADD A NSP ELIGIBLE USE TO ACQUIRE, REHABILITATE,
AND RESELL -FORECLOSED OR ABANDONED
PROPERTIES; AND AUTHORIZE THE REALLOCATION OF
NSP FUNDS AS NECESSARY
WHEREAS, on May 6, 2008, pursuant to Resolution No. 2008-121, the City Council
approved the Fiscal Year 2008/2009 Annual Action Plan for the Community Development Block
Grant (CDBG), the HOME Investment Partnership (HOME), and the Emergency Shelter Grant
(ESG) Federal Grant Programs; and
WHEREAS, in September 2008, the United States Department of Housing and Urban
Development (HUD) notified the City that the City is eligible to receive approximately $2.8
million in one-time CDBG funds through the new Neighborhood Stabilization Program (NSP) in
addition to its annual CDBG entitlement; and
WHEREAS, on November 25, 2008, Council approved the submittal of an amendment of
the Fiscal Year 2008/2009 Action Plan, HUD approved the amendment on January 13,2009, and
on March 24, 2009 Council appropriated $2,830,072 in CDBG NSP funds consistent with the
approved plan; and
WHEREAS, staff initially identified NSP eligible uses and areas of greatest need for the
use of these funds within the City and these target neighborhoods include portions of northwest
and southwest Chula Vista, Eastlake, and Otay Ranch communities; and
WHEREAS, due to changing market conditions since that time, the City desires to
"expand" these target areas to include" additional census tracts in the Northwest (south and west
of the existing target area) and East Target Neighborhoods (adding areas of Eastlake, Rolling
Hills, San Miguel Ranch, Otay Ranch, and Sunbow) and add a NSP eligible use to purchase and
rehabilitate homes and residential properties that have been abandoned or foreclosed upon, in
order to sell such homes and properties.
NOW, THEREFORE, BE IT RESOLVED by the City Council of Chula Vista that it
amends the Fiscal Year 2008/2009 Annual Action Plan for Neighborhood Stabilization Plan
(NSP) funds to "expand" the target areas of greatest need by including additional census tracts in
the Northwest (south and west of the existing target area) and East Target Neighborhoods
(adding areas of Eastlake, Rolling Hills, San Miguel Ranch, Otay Ranch, and Sunbow); utilize
such funds in the "expanded" areas of greatest need; add a NSP eligible use to purchase and
rehabilitate homes that have been abandoned or foreclosed upon, in order to sell such homes and
properties; and authorizes staff to reallocate funds as necessary.
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Resolution
Page 2 of 2
Presented by
Approved by
/~
4
,IDCA
James D. Sandoval
City Manager
Bart Miesfeld
Interim City Attorney
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