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HomeMy WebLinkAboutReso 018-01 AffordHousImplePlanRESOLUTION NO. 18 -01 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ADOPTION OF THE AFFORDABLE HOUSING IMPLEMENTATION PROGRAM WHEREAS, the State mandated local jurisdictions, including cities, provide housing for all income levels; and WHEREAS, the Association of Bay Area Governments issued a 2000 Regional Housing Needs Determination for bay area cities and counties and assessed that Dublin would need to provide 5,436 additional units (percentages of which must be affordable to very low-income, low income, moderate-income and above moderate-income households); and WHEREAS, the City of Dublin has collected in-lieu fees from developers dedicated to funding affordable housing programs to provide housing for all income levels, including very low-income, low-income, and moderate-income levels; and WHEREAS, on April 4, 2000, the Dublin City Council held a workshop to examine 1 ) possible funding options for affordable housing programs, 2) programs on which to spend the in-lieu fees that are collected, and 3) potential target groups toward which the programs could serve; and WHEREAS, on October 3, 2000, the Dublin City Council directed Staff to research specific programs, funding options, and target groups for the purpose of allocating Dublin's in-lieu fees; and WHEREAS, the programs options researched included down payment assistance, acquisition- rehabilitation, City assistance for creating new affordable multi-family units, and rental assistance; and WHEREAS, the funding options that were researched were 1) implementing Commercial Linkage Fee and 2) doubling the in-lieu fees; and WHEREAS, the target groups studied consisted of 1) seniors, 2) teachers, 3) first-time home buyers, 4) low-income renters, and 5) disabled persons; and 6) members of Dublin's Workforce, including City and non- City personnel WHEREAS, guidelines were developed for implementing the fore-mentioned programs, funding options, and target groups in the attached document referenced as the Affordable Housing Implementation Plan, Exhibit A; and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Dublin hereby adopts the Affordable Housing Implementation Plan. PASSED, APPROVED AND ADOPTED this 6th day of February 2001. Councilmembers Lockhart, McCormick, Oravetz, Zika and Mayor Houston AYES: NOES: None AB SENT: Non e AB STAIN: None Clerk ATTEST: g:XhousingXimplementation program\co reso adopting HIP K2/G/2-6-O1/reso-affordablehsng.doc (Item 8.6) AFFORDABLE HOUSING,IMPLEMENTATION PLAN EXHIBIT A I. PURPOSE A serious shortage of affordable housing exists in the State, Bay Area and in the Tri Valley. The State Legislature has stated that "the lack of affordable housing" is a critical problem which threatens the economic, environmental, and social quality of life in California" Of particular concern is the shortage of housing for low-income and moderate-income households. (Government Code Section 65589.5) The Legislature has enacted policies to encourage more affordable housing: requiring cities to address the issue in their housing elements, provide for density bonuses and second dwelling units, limiting the grounds on which affordable housing developments may be disapproved, and others. (Government Code Sections 65583, 65589.5(d), 65852.150, 65913, 65915.) In response to a demonstrated need for affordable housing and State mandates, the City of Dublin will implement funding policies and program approaches to serve selected target groups. This Affordable Housing Implementation Plan contains policy guidelines that, once implemented, will assist residents in the Community and Tri-Valley area in meeting their housing needs and provide a range of housing opportunities for all income levels. These guidelines will be incorporated into Dublin's Inclusionary Regulations know as Section 8.68 of the Dublin Zoning Ordinance and enacted through corresponding resolutions and staff action. II. FUNDING AFFORDABLE HOUSING PROGRAMS Intent. The City of Dublin shall implement policies designed to generate adequate funding for affordable housing programs referenced in Section III.A of this report and in correlation with the purposes and intent of the Inclusionary Regulations. Funding Options Funding options are as follows: In-lieu Fees. Pending final approval from the City Council, Dublin's in-lieu fees shall be increased to $2.00 per square foot for single-family developments and $1.50 for multi-family development. 2. Commercial Linkage Fee. a. Nexus Study. Pending final approval from the City Council, staff will have the Nexus Study prepared that is required to implement a commercial linkage fee. Fee Determination. The Commercial linkage fee shall be calculated using a formula determined by the results of the required Nexus Study and adopted via ordinance and existing in-lieu fee resolution by the City Council. Page 2 of 7 III. PROGRAMS A. Intent. The program options proposed in this section will assist in providing affordable housing for specified target groups in the City by assisting in the development and preservation of private and non-profit affordable owner and rental housing for lower-income households and related programs that help residents to enter or remain in low-cost housing. These program options include down payment assistance, acquisition-rehabilitation, rental assistance, and new construction of affordable multi- family units. Approved Program Types. Dublin could collect approximately $21 million in in-lieu fees based on projected development over the next five years, ira commercial linkage fee is implemented and the current in-lieu fees are doubled (assuming th~tt developers continue to pay the in-lieu fees instead of providing units under the 5% inclusionary requirement). Dublin currently has collected about $5.1 million in housing in-lieu fees to date. The City Council could adopt the priority program list below and leverage the collected affordable housing in-lieu and commercial linkage fees in order of processing priority. For acquisition- rehabilitation and new construction of affordable multi-family unit projects, the City Council could approve funding on a project-by-project basis. The agencies and amounts of in-lieu fees allocated to down-payment assistance and rental assistance programs could be determined and approved annually by the City Council and distributed according to the City's fiscal year cycle. Priority 1: Acouisition-Rehabilitation (satisfies State's Housing Element requirements for creating permanently affordable units but does not count toward meeting ABAG's Regional Housing Needs Determination Numbers) This option deals primarily with housing for low-income tenters many of who may be designated target group members, e.g. seniors, teachers, and some members of the workforce. Based on the projects profiled in the Supplemental Affordable Housing Report, City assistance for each acquisition-rehabilitation project could potentially range from $230,000 to $750,000. Primary costs to the City for acquisition-rehabilitation leveraging will occur in matching Federal and State funds and initially supporting developer applications for state and federal financing. Acquisition-Rehabilitation demonstrates the best opportunity to produce the most affordable units with the least cost, because there are no land development or construction costs. Additional benefits for acquisition- rehabilitation include the ability to keep the units affordable via a deed restriction, thus satisfying the State's requirements for permanent affordability. Page 3 of 7 a. Strategy At least once every five years, the City shall inventory potential acquisition-rehabilitation sites by compiling a list of property owners interested in selling their multi-family units, so that if and when the City is approached by interested developers the City can distribute this list to them. Annually, the City shall issue a Request for Qualifications (RFQ) to for-profit and non-profit developers for the purposes of maintaining a viable contact list of non-profit and for-profit developers in the event the City is approached by a multi-family unit property owner wishing to sell. To initiate possible acquisition-rehabilitation projects, the City shall also annually issue an RFP that indicates available funding and request that developers identify possible properties and submit a development proposal. Once an appropriate site has been identified and contact established with the property owners, the developers would negotiate with those property owners and apply for additional state and federal financing. The City would support the developer's proposal by contractually dedicating the necessary funds to an escrow or some other holding account until the developer can secure complete financing. In cases where the City has dedicated funding toward an acquisition-rehabilitation project and the developer can not secure complete or adequate financing, the flanding shall be shifted back into the housing in-lieu fee fund. b. Target Groups This option will serve the following target households whose income does not exceed 80% of the County median income. If more than one request for funding is received at a time, priority will be given to applications/proposals that best serve the target groups and order of preference listed below: 1. Dublin Residents who are seniors 2. Residents of Dublin who are permanently disabled 3. Residents of Dublin who are members of Dublin's workforce (includes City and non- City personnel and teachers) 4. Families with children that currently reside in Dublin 5. Other Dublin Residents 6. Non-Resident Seniors 7. Non-Resident Disabled Persons 8. Other Non-Residents Priority 2: Construction of new affordable multifamily units (satisfies State's Housing Element requirements and counts toward meeting ABAG's Regional Housing Needs Determination Numbers) This option is the least affordable due to high land and construction costs. Primary costs to the City would occur in having to buy down (subsidize) the cost of the units either to the developer or through deferred or zero interest loans to the target household or both. However, possibilities exist for creating permanent affordable housing by constructing new affordable multi-family units each time a new residential housing development application Page 4 of 7 is under consideration by the City, increasing the opportunities for multi-family unit construction, unlike acquisition-rehabilitation, where the opportunities are scarce. a. Strategy The City shall on a project-by-project basis negotiate and offer developers of five or more units a per-unit subsidy toward the development of inclusionary units and/or offer loans on a deferred or zero interest basis to target households that purchase inclusionary units. If necessary, the City shall provide additional subsidies to bridge the affordability gap between target income groups for both rental and ownership units. The City Council shall approve the subsidy amounts and target income group levels for each project. The units subsidized by the City shall be recorded at the County Clerk's office with deed restrictions indicating their affordability for a period no less than 60 years. Staff will negotiate the terms and conditions of the subsidy on a project-by-project basis. b. Target Groups This option is governed by the Inclusionary Regulations stipulation that 40% of the units will be dedicated to very low-income households, 40% to low-income households, and 20% to above moderate-income households. In addition to the inclusionary requirements and if more than one request for funding is received at a time, priority will be given to applications/proposals that best serve the target groups and order of preference listed below: i.) Rental Units 1. Dublin Residents who are seniors 2. Residents of Dublin who are permanently disabled 3. Residents of Dublin who are members of Dublin's workforce (City personnel, Dublin police officers, Dublin fire fighters, teachers, retail clerks, bank tellers, grocery clerks, and others in the retail and customer service industries for employers in Dublin) 4. Families with children that currently reside in Dublin 5. Other Dublin Residents 6. Non-Resident Seniors 7. Non-Resident Disabled Persons 8. Other Non-Residents ii) For-Sale Units 1. Residents of Dublin who are First-Time home buyers and members of Dublin's workforce (City personnel, Dublin police officers, Dublin fire fighters, teachers, retail clerks, bank tellers, grocery clerks, and others in the retail and customer service industries for employers in Dublin) 2. Residents of Dublin who are First-Time home buyers 3. Other Dublin Residents 4. Non-Residents of Dublin who are First-Time home buyers Page 5 of 7 Priority 3: Down Payment Assistance (Does not satisfy State Housing Element Requirements or counts toward meeting ABAG's Regional Housing Needs Determination Numbers) Programs funded under this option would typically range in subsidy from $15,000 to $50,000. Estimates for the number of households served would be determined by the amount allocated. For instance, if25% of the estimated $21 million (~ $5.25 million) that could be collected from in-lieu and commercial linkage fees over the next five years were allocated to down-payment assistance programs, about 105 to 350 households could be served. Although units produced under this option will not satisfy ABAG's requirements as permanently affordable unless in conjunction with the purchase of an inclusionary unit, it has the capability of assisting members of the workforce and households lacking money for down-payment and closing costs the chance to own units in Dublin. a. Strategy Annually staff will inventory and review available down payment assistance programs, administer program funding, and evaluate the City' s down-payment assistance programs. The City Council will, via resolution, annually approve and allocate funding for the City's down-payment assistance programs. For now, the City should continue to participate in the Alameda County Mortgage Credit Certificate Program and begin participation in the following down-payment assistance programs: · Community Assisted Shared Appreciation (CASA) Program--S200,000, · East Bay Delta Lease Purchase Program--No funding required, · California Housing Loan Insurance Fund (CaHLIF) Home Loan 97 & 3 Progrmn--- $10,000 The City shall consider expanding its participation to other programs, such as CHFA's HELP Program and the School Facility Fee Down Payment Assistance Program, after a period of one year (when staff gains experience and exposure to the programs and funding processes). b. Target Groups This option will serve the following target groups that are listed in preferential order: 1. Residents of Dublin who are First-Time home buyers and members of Dublin's workforce (City personnel, Dublin police officers, Dublin fire fighters, teachers, retail clerks, bank tellers, grocery clerks, and others in the retail and customer service industries for employers in Dublin) 2. Residents of Dublin who are First-Time home buyers 3. Other Dublin Residents 4. Non-Residents of Dublin who are First-Time home buyers Priority 4: Rental Assistance (satisfies State's Housing Element requirements for preventing homelessness and providing housing assistance to lower income households) The City would provide rental assistance in the form of short-term grants to agencies. The funds would be allocated annually or another period of frequency set by the City Council to agencies that are working to prevent homelessness, and provide interim and or transition Page 6 of 7 support for target households. The City should continue funding Allied Housing's Scholarship Program that will require a maximum $36,000 in in-lieu fees for the 2001/2002 Fiscal Year (depending on HOME funds allocation for housing subsidies) and begin funding Echo Housing's Rental Assistance Program with an initial annual allocation from in-lieu fees of $20,000. a. Strategy The City will distribute annually a Notice of Funds Availability (NOFA) that lists the criteria and deadline for applying for available rental assistance funds. The City Council will annually award the grants to chosen agencies. Staff will monitor the grants for compliance and administratively distribute funds. b. Target groups 50% of the funds allocated to rental assistance programs shall serve those persons whose income level falls below 50% of the area median income. The remaining 50% of allocated funds shall serve those persons whose income level is between 50% and 80% of the County median income. C. Method of Allocation. For each acquisition-rehabilitation and new construction of affordable unit project, the City Council shall, via a resolution, determine the amount of in-lieu fees to be allocated. For down-payment assistance and rental assistance programs, the City Council shall, via a resolution, annually select participating agencies and determine the amount of in-lieu fees allocated to those programs at least once annually from the date that this Housing Implementation Plan takes effect. Amendments to Program Types and Funding Allocation. The City Council may amend program types, funding allocation, and/or target group priorities through adoption of a resolution on an annual basis. Page 7 of 7