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HomeMy WebLinkAboutAgenda Statement 1981/07/07 Item 17bCOUNCIL AGENDA STATEMENT Item 17 b Meeting Date 7/7/81 ITEM TITLE: Resolution ~ajri~3 Approving Submission Housing Authority of for Low-Rent Public SUBMITTED BY: Community Development Director ~' by San Diego County Development Program Housing (4/5ths Vote: Yes No X ) On April 11, 1978, the voters of Chula Vista approved an Article 34 Referendum for 400 units of publically-owned low-income housing on scattered sites. Subsequently, the Council entered into a Cooperation Agreement and a Memorandum of Understanding (MOU) with the San Diego County Housing Authority to provide 100 of those units under the U.S. Department of Housing and Urban Development's (HUD) Low-Rent Public Housing Program. On September 19, 1978, the Housing Authority received from HUD a program fund reservation of $3.7 million to provide those 100 units. The Housing Authority now wishes to submit to HUD a development program for construction of 24 of those units on an identified site in Chula Vista. Therefore, it is my RECOMMENDATION: That Council Approve the resolution providing for the placement of 24 family units at Otay Valley Road and Melrose. BOARDS/COMMISSION RECOMMENDATION: The Affordable Housing Sub-Committee of the Human Relations Commission has supported the pursuit of public housing in Chula Vista. DISCUSSION: MOU: The MOU defines an active role for the City in the determination of the Housing Authority's public housing activities in Chula Vista. In its most recently-amended form (February 19, 1980), it calls for City advice at all stages of development and operation. It also stipulates that the number of units permitted on any one site shall not exceed either the allowable density under current zoning or a total of 25 units per site. Cooperation Agreement: The Cooperation Agreement is a contractual stipulation required by HUD of the relative responsibilities of the City and the Housing Authority. Most importantly, the Agreement addresses Payment In Lieu of Taxes (PILOT). As a publically- owned development, this project would be exempt from property taxes and special assess- ments. PILOT would be paid annually to the City by the Housing Authority for distribu- tion among the taxing bodies. PILOT would represent 10% of annual rents less utility costs. Site: The proposed site for development is the 2.03 acre parcel at the northwest corner of Melrose Avenue and Otay Valley Road. As I have reported to you in a previous agenda statement this evening, the City is currently in escrow for purchase of that parcel, and this proposal for public housing on that site is one option available to the City for usage of the site. If escrow is continued and closed, and if the Housing Authority's development program is approved by HUD, the parcel would be purchased from the City by the Housing Authority from program funds for the City's cost of purchase. Continued Form A-113 (Rev. 11/79) Page 2, Item '17b Meeting Date 7/7/81 The zoning for the parcel is multifamily residential and a maximum density of 12 units per acre. It has been judged by HUD to be well-suited for a family Public Housing project. Develo ment Pro ram: Due to the short time span between the first availability of the site an t e expiration of the program reservation (July 15, 1981), the complete Devel- opment Program is not available tonight as a package. However, its principal components have been determined, and Housing Authority staff are in attendance to answer your questions. The Development Program can be divided into two main categories: Development and Management. The major elements of the project development are as follows (site plan attached as Exhibit I): 1. Number of units: 24 2. Type of units: two-story townhouses 3. Size of units: 14 two-bedroom @ 890 sq. ft. 2 two-bedroom handicapped @ 1.,.102 sq. ft. 8 three-bedroom @ ],145 sq. ft. 4. Parking spaces: 36 to 46 depending on number of compact spaces 5. Cost per unit for dwelling construction and equipment: $31,700 average 6. Total development cost: $1,464,000 As the project progresses through the City's processing and design review, the City will be able to exercise control over project development. The management element of the Development Program has received much attention from my staff. To remain an asset to the City, this project must be both economically feasible and strongly managed. Economically, Public Housing projects are intended to operate without ongoing subsidy, with the up-front subsidy which makes that possible coming in the form of what is in essence a bond-financed grant of the total development cost. However, program restric- tions on rent levels have made project financial feasibility marginal, thereby making HUD-provided annual operating subsidies and ten-year modernization grants necessary for the majority of projects. Such funds are not guaranteed, but they have been historically available. HUD requires that projects assist families throughout the lower income categories, and it provides that those families pay 25% of their income for rent. No monthly rent sub- sidies exist. Therefore, I have recommended to Housing Authority staff that the proposed project utilize an occupancy plan which would tier occupancy through income categories in such a way to yield the following: ~Q-~os3 Page 3, Item 17b Meeting Date 7/7/81 1. Satisfaction of HUD tenant income distribution requirements. 2. Reasonable depth of assistance to lower income families. 3. Maximization of project feasibility. The Housing Authority's plan would mix the tenant income groups as follows: 25% 0-50% of median income 40% 51-61% of median income 35% 62-72% of median income Such an occupancy plan would yield an annual net income sufficient to fund a replacement reserve equal to the market standard of .006 of development cost. However, given infla- tionary pressures, it is likely that modernization funds would be necessary by year ten. To maximize management efficiency and economy, the Housing Authority intends to contract for management with an experienced assisted-housing management company. (Executive Summary: Management attached as Exhibit II.) The management plan would include a non- tenant, on-site manager, which would remove one of the project units, but which would provide critical twenty-four hour control and accountability. Submission Process: If the Council approves submission of the Development Program, that approval will be conveyed to the Board of Commissioners of the `lousing Authority (County Board of Supervisors plus two tenant commissioners) on July 15, 1981. The Board of Commissioners will then decide on the County's desire to proceed with submission. Contingencies: It needs to be recognized that the status of the Public Housing Fund Reservation is in question. With the intent of acquiring a specific existing multi- family project for conversion to Public Housing, the Housing Authority had previously requested a reformulation of the progo~am reservation from New Construction to Acqui- sition of Existing Units. That request was embargoed by the Reagan administration, and the issue is to be clarified imminently. If reformulation is denied, this Development Program will proceed. If reformulation is approved, I will come to you shortly with a recommendation to approve the Authority's acquisition of an existing but unsold condo- minium project. As the Housing Authority faces a Development Program submission dead- line of July 15, 1981, it was not possible to wait for resolution of this issue. FISCAL IMPACT: Some staff time, reimbursed from Community Development Block Grant funds. D KG : a h Oc.y~.t.~..,. -~ U5 ~ - by ~!-;e Gity Co,.nc:l of C's~uia Vita, C~ iifornia i~G lC.li ~__ _ _^-. -_ -_~~ r = r =_g ~~ Y ~ Ft.~ s ..,,,,:~., r ,,, ~~ 3 ~. ~+ S P yp~. "'~4`w~r Y },~~,~ *~~-1 r ~~ t~ ~1.~ l,~ ~ <"~ K T T e~ ,.y '-:~ ~.~ EXECUTIVE SUMMARY: MAPJAGEP^ENT The Housing Authority will be responsible for the operation of the Public Housing Program. Certain functions will be carried out by Housing Authority staff while other functions 4ri11 be contracted for in the private sector. Typical responsibilities of the Housing Authority and the Private 1`1anagement firm are identified below. HOUSING AUTHORITY RESPONSIBILITIES The Housing Authority will be responsible for establishing policies and procedures which wi71 define standards by arhich the Private Manage- ment Firm will operate the apartment complex. In this capacity the Housing Authority ~•rill establish occupancy standards, eviction procedures, tenant relations processes etc. In addition the Housing Authority will enforce the terTS of the contract with the management firm and be responsible for liason with both the City of Chula Vista and the U.S. Department of HUD. PRIVP.TE MANAGEh1ENT FIRM Tf~e Private hlana~rement Firm will be responsible for operating the apartment complex under bosh the terms of the contract and HUD's management guidelines. As such, the Frivate Management Firm will hire a resident manager, select eligible tenants, oversee tenant activities, collect rents, perform routine maintenance and repairs and elan and budget for non routine repairs. In short, the Priv~~e Management Firm will be responsible for operating the apartment complex in a business like, efficient and effective manner. In addition to oper~~;na the complex the Private Management Firm will report Quarterly to tha Housing Authority regarding the project identifying any .management problems. The cost of this reporting will be borne by the opera- tion budget of the cor;plex. ~~i~s~ " ~_ i ~`~ r i ,, -! ~ 1 ` ~~ t ~ , ~, w ~~ ~~ ~, ' ~ +.o.~--- ~ ~ 'I ' ~ i j ,~J ~`~~ ~, , ,~ ; ~ o l .- I r r i~ ~~ I' ~~ (~ I~ ~' ~; I~ ~ ', -, ~i . J WI ~' 1 ~-~ __~~_ ~_ / ~ . _~ ~ ~SCTd La i.-~r.1G -yam / ~--- ~ 1 __ L. 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