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HomeMy WebLinkAbout1997-06-03 - AGENDA REPORTS - SENIOR HOUSING PROJ (2)CITY OF SANTA CLARITA INTEROFFICE MEMORANDUM TO: *eorga d ity Councilmembers FROM: valho, i Manager DATE: May 27, 1997 SUBJECT: STANDARD MANAGEMENT PROCEDURE RELATED TO AFFORDABLE SENIOR HOUSING PROJECTS Attached are: 1) the existing standard management procedure regarding affordable housing projects within the City of Santa Clarita; and 2) a memo detailing pros and cons of pass-through bond issuances for non-profit corporation. The purpose of the standard management procedure policy is to implement the City's General Plan and to establish guidelines for implementing the development incentives, as provided for in the Unified Development Code (Section 17.17.070) for senior, very low, and low income housing. Pursuant to the UDC, in order to reduce development costs associated with the construction of projects qualifying under Government Code Section 65915, the City may offer a developer various incentives, depending upon the quality, size, scope and location of the proposed development. Recently, City staff has been approached on two separate occasions regarding incentives for affordable senior housing projects. One scenario presented to staff involved the development of an affordable senior housing project with a request for Bridge and Thoroughfare District and Quimby fee waivers, while the second scenario involved the City in a bond financing capacity for the affordable senior housing development. Neither the proposed project nor the application for the pass-through bond issuance have been formally submitted to the City. According to the standard management procedure, development application fees collected by and for the City shall be waived for very low income and/or senior housing developments. Additionally, the procedure states that the Council may, at its sole discretion, participate in bond financing for affordable housing developments. Currently, the City contains 697 total senior units, of which 281 units are reserved for low income households. While the City does not currently subsidize any senior housing projects, contributions are made on an annual basis to the Santa Clarita Valley Senior Center. The City's annual budget provides for $1,198,000.00 worth of funding and services for the Senior Center, including: a Federal CDBG entitlement grant of $48,000; general fund contributions totaling $150,000; and Dial -A -Ride services, funded by transportation funds, at a total cost of $1,000,000.00. Also, the Senior Center requests the Council to approve additional funding on a yearly basis, with this request • often equaling $50,000.00. Staff is requesting that the City Council re -visit the existing standard management procedure for appropriateness and for applicability towards the aforementioned proposals. Also, staff requests that the Council provide specific direction regarding the City pursuing the pass-through bond issuance, and specific direction regarding the approval of fee waivers for low income senior housing projects. RECOMMENDATION: Staff recommends that the City Council: 1). Re -visit the current standard management procedure for appropriateness; and, 2). Provide specific direction regarding the City's involvement in a pass-through bond issuance, and regarding development fee waivers, for low income senior housing projects. Attachment: Standard Management Procedure Memo on Pass -Through Bond Issuance JL:JDR council \snrhsgss.jdr CITY OF NUMBER I-8 ORIGINAL ISSUE 3-23-93 EFFECTIVE NT SUPERC PURPOSE auo.itt.1 ICY/PROCEDURE AFFORDABLE HOUSING LEGISLATIVE RELATIONS (City Council) STANDARD MANAGEMENT PROCEDURE The purpose of this policy Is to Implement the City's General Plan and to establish guidelines for implementing the development incentives, as provided for in the Unified Development Code (Section 17.17.070), for senior, very low, and low Income housing in the City. Pursuant to the Unified Development Code, In order to reduce development costs associated with the construction of projects qualifying under Government Code Seaton 65915, the City may offer a developer various Incentives, depending upon the quality, size, scope and location of the proposed development. II. POLICY It Is the declared policy of the City Council that: A. Development application fees collected by and for the City (Including environmental review fees, but not production fees for environmental Impact reports, studies, or similar documents) shall be waived for very low income and/or senior housing developments; S. Affordable housing developments shall be given priority processing status; C. The Council may, at its sole discretion, approve limited mixed-use zoning in conjunction with the affordable housing development; D. The Council may, at its sole discretion, approve the use of Community Development Block Grant funds to finance or subsidize the construction of affordable housing developments and assist people in purchasing existing homes; E. The Council may, at Its sole discretion, participate In bond financing for the affordable housing development; F. The Council may, at its sole discretion, sell Federal, State or grant revenues to other cities for general fund money to be put Into an affordable housing fund; G. If the City completes its proposed redevelopment program, the Council will consider establishing a specific percentage of the Increment to be set aside (In excess of the 20% required to be set aside by California Redevelopment Law) for affordable housing development. H. The City shall engage the formation. of joint powers agreements with other agencies to Implement these policies. I. Opportunities and programs which allow low and very low Income families to acquire home ownership will be sought and encouraged. J. The Council may, at Its sole discretion, condition such projects to ensure that, upon the sale of such residences by the home owners, an appropriate portion of any profit resulting from the sale will revert to the agency (or agencies) assisting in the original purchase of the residence. 111. PROCEDURE A. Development application fees shall be waived at the time of application submittal. If the project is found not to be in conformance with the City's requirements for affordable housing projects, case processing shall be suspended until the applicant: 1) modifies the project to bring it Into compliance with the City's affordable housing requirements, or 2) pays the originally waived application fee In full. B. Development applications for affordable housing projects shall be given priority Processing status. A public hearing shall be held by the Planning Commission within sixty days of the City's determination that the application Is complete. (This shall not Include projects requiring -environmental Impact reports.) C. In order to ensure the long-term availability of the affordable housing stock, the applicant/developer shall provide a guarantee of such availability and affordability to the satisfaction of the City. Projects receiving a density bonus only shall be required to maintain their "affordable" status (as defined by the Unified Development Code and in compliance with the conditions of approval for the project) for a period of not less than twenty years. Projects receiving incentives in addition to a density bonus shall be required to maintain their affordable status for the life of the project. D. The Council may approve mixed-use zoning In conjunction with affordable housing development if commercial, office, Industrial, or other similar land uses, are determined to be compatible with the housing development, and existing or planned development In the vicinity of the proposed development. In the event that a zone change Is approved in conjunction with the affordable housing project, the new zone shall be required to have a planned development (PD) overlay. E. The Council may approve the use of Community Development Block Grant (CDBG) funds to subsidize eligible activities In support of the construction of affordable housing projects and assist people In purchasing existing homes In compliance with federal regulations for the use of CDBG funds. IV. AUTHORITY Adopted by the City Council on CITY OF SANTA CLARITA INTEROFFICE MEMORANDUM TO: Mayor Smyth and City Councilmembers FROM: George Caravalho, City Manager DATE: May 23, 1997 SUBJECT: PASS THROUGH BOND ISSUANCE FOR NON-PROFIT CORPORATIONS BACKGROUND Recently the City was approached by a non-profit corporation, Foundation For Affordable Housing (FFAH), requesting the City's assistance in acquiring senior.housing financing. The FFAH is requesting the City Council authorize a "pass through" bond issuance of $15,310,000. As a "pass through" issuance there is no legal financial obligation of the City to repay the debt, however, the City of Santa Clarita's name would be attached to the bonds. If the City were to issue the bonds, they would be repaid by mortgage revenues from the acquired property. The loan would be administered by a trustee bank which acts on behalf of the City to collect the loan payment from the FFAH and to pay the bondholders. If necessary, the trustee would also be responsible to enforce the security provisions of the trust deed. The City's participation in this process allows the FFAH to acquire the senior housing with tax exempt financing. By doing so, the FFAH would ensure senior housing rents to be stabilized over the term of the bond, including a percentage to low income, which is usually 30 years. The proceeds of the bond sale will be used to acquire an existing senior housing complex and will not increase the current senior housing stock. The first step of the process is for the City Council to decide if they support the concept of assisting a non-profit corporation acquire senior housing through tax exempt financing. If the Council would like to proceed, a thorough analysis of the FFAH would be conducted to determine their financial security. If the FFAH is determined to be financially stable, staff would then come back to Council to request authorization to proceed with the bond issuance process. Pros of the City participating in a pass through bond issuance • would provide affordable senior housing over a long period of time • city could establish regulations over the number of units which are designated low, very low and moderate income • shows support for seniors Cons of the City participating in a pass through bond issuance • the non-profit could default of the loan which could hurt the City's good name in the bond market • the City's name is on the bond issue which if any problems occur will reflect on the City • may lead to other request from non -profits RECOMMENDATION It is staff's recommendation that the City Council provide specific direction regarding the City's position on pass through bond issuances for non-profit corporations. SS:KS smve.bonds.ks