HomeMy WebLinkAbout2011-032
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RESOLUTION NO. 2011-32
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO, CALIFORNIA, APPROVING A SUBSTANTIAL
AMENDMENT TO THE CONSOLIDATED ANNUAL ACTION PLAN FOR
FISCAL YEAR 2010-2011; AND AUTHORIZING THE CITY MANAGER OR
HIS DESIGNEE TO EXECUTE, ON BEHALF OF THE CITY, AFTER
REVIEW AND APPROVAL BY THE CITY ATTORNEY, SUCH
DOCUMENTS AS REQUESTED BY THE UNITED STATES DEPARTMENT
OF HOUSING AND URBAN DEVELOPMENT TO EFFECTUATE THE
SUPPLEMENTAL APPROPRIATION
WHEREAS, in Fiscal Year 2010-2011 the City of San Bernardino, California (the "City"), is
entitled to receive $3.277 million from the United States Department of Housing and Urban
Development ("HUD") under the Neighborhood Stabilization Program Three ("NSP3") for the
purpose of redeveloping abandoned and foreclosed homes and residential properties as authorized
under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank");
and
WHEREAS, the NSP3 is subject to certain statutory and regulatory provisions governing the
Community Development Block Orant ("CDBO") program as necessitated by Dodd-Frank; and
WHEREAS, the City, as a direct recipient of CDBO funds, has submitted to HUD and HUD
has approved a Consolidated Plan for Fiscal Years 2010-2015 and a Consolidated Annual Action
Plan for Fiscal Year 2010-2011 (the "Action Plan"); and
WHEREAS, HUD considers NSP3 Orant Funds to be a supplemental appropriation of
CDBO Funds requiring a substantial amendment to the Action Plan; and
WHEREAS, the City is required by the NSP3 to prepare and submit a substantial
amendment to the annual Action Plan by March I, 2011, in accordance with the consolidated plan
procedures for a substantial amendment under the annual CDBO program; and
WHEREAS, the City has provided citizens adequate opportunity to review and comment on
the proposed substantial amendment to the annual Action Plan as stipulated by HUD's alternative
requirements described in the Federal RegisterNol. 75, No. 201 (Tuesday October 19, 2010) pages
64322-64348 that waive the standard requirements under NSP3 to allow a grantee to provide no
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1 fewer than fifteen (15) calendar days for citizen comment; and
2 WHEREAS, the City seeks to redevelop abandoned and foreclosed homes and residential
3 properties to address the significant costs that foreclosure activity imposes on local municipalities
4 and neighborhoods within the City.
5 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY
6 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS
7 FOLLOWS:
8 Section 1. That the Mayor and Common Council hereby approve the Substantial
9 Amendment to the Consolidated Annual Action Plan for Fiscal Year 2010-2011 to include a
10 supplemental appropriation in the amount of $3,277,401 under the Neighborhood Stabilization
11 Program Three for the purpose of the redevelopment of abandoned and foreclosed homes and
12 residential properties. A copy of the Substantial Amendment is attached hereto as Exhibit "A" and
13 by this reference made a part hereof as though set forth herein at length.
14 Section 2. That the City Manager, or his designee, is authorized to execute and, after review
15 and approval by the City Attorney, submit to HUD the appropriate applications, agreements and
16 ancillary documents necessary to implement the NSP as said applications, agreements and ancillary
17 documents that are prepared and herein approved, a copy of which are on file with the City Clerk,
18 and are incorporated herein by reference as though fully set forth at length.
19 Section 3. This Resolution shall take effect upon its adoption and execution in the manner
20 as required by the City Charter.
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8 Common Council of the City of San Bernardino at a j oint regular
day of February ,2011, by the following vote to wit:
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2011-32
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO, CALIFORNIA, APPROVING A SUBSTANTIAL
AMENDMENT TO THE CONSOLIDATED ANNUAL ACTION PLAN FOR
FISCAL YEAR 2010-2011; AND AUTHORIZING THE CITY MANAGER OR
HIS DESIGNEE TO EXECUTE, ON BEHALF OF THE CITY, AFTER
REVIEW AND APPROVAL BY THE CITY ATTORNEY, SUCH
DOCUMENTS AS REQUESTED BY THE UNITED STATES DEPARTMENT
OF HOUSING AND URBAN DEVELOPMENT TO EFFECTUATE THE
SUPPLEMENTAL APPROPRIATION
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
meeting
Aves
Navs
Abstain
Absent
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x
x
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---'L
~
~~~( lb. (,c~
Rac el G. Clark, City Clerk
*** Council Member Johnson recused himself from voting on attachment
20 #2 to Staff Report
The foregoing Resolution is hereby approved this t:7T71 day of February
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,2011.
<11ic ~
Tobin Brinker, Mayor Pro Tern
City of San Bernardino
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Approved as to Form:
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26 By:
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ames F. Penman, City Attorney
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EXHIBIT "A"
City of San Bernardino
NeiQhborhood Stabilization ProQram Three
Substantial Amendment to the
Consolidated Annual Action Plan for Fiscal Year 2010-2011
March 1, 2011
2011-32
City of San Bernardino
Neighborhood Stabilization Program Three
Substantial Amendment to the
Consolidated Annual Action Plan for Fiscal Year 2010-2011
Table of Contents
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City of San Bernardino
Neighborhood Stabilization Program Three
Substantial Amendment to the
Consolidated Annual Action Plan for Fiscal Year 2010-2011
Introduction
In 2008, Congress appropriated funds under Title III of the Housing and Economic Recovery
Act ("HERA") to stabilize neighborhoods whose viability had been damaged by an unusually
high number of foreclosed and abandoned properties. These funds are administered by the
Department of Housing and Urban Development ("HUD") under an entitlement grant program
referred to as the Neighborhood Stabilization Program. The funds made available through
HERA constitute the first round of Neighborhood Stabilization Program funds, and, thus, it is
referred to as "NSP1".
Under NSP1, the City of San Bernardino ("San Bernardino" or "City") was allocated
$8,408,558. Of this amount, $2.9 million was initially reserved for the acquisition,
rehabilitation and resale of foreclosed or abandoned single-family homes to low-, moderate-
and middle-income households in targeted areas of the City. Another $3.1 million was
employed to acquire, rehabilitate and rent multifamily units in the Sunrise and 19th street area
of the City to households whose income does not exceed 50% of area median income
("AMI"). An additional $1.7 million was used to acquire and demolish foreclosed or
abandoned properties in certain target areas of the City. The remainder, approximately
$760,000, was set aside for administrative costs.
As of December 2010, the City had committed the initial funding allocations for all three
NSP1 program activities by purchasing fifty seven (57) foreclosed or abandoned properties
within NSP1 eligible target areas throughout the City.
In order to mitigate the continued negative impact of the nation's economic decline and
housing market collapse, Congress approved an additional allocation of funding for the
Neighborhood Stabilization Program through the Dodd-Frank Wall Street Reform and
Consumer Protection Act of 2010 ("Dodd-Frank Act"). Like NSP1, these funds, which
represent the third round of NSP funding ("NSP3"), are to be used to stabilize and revitalize
communities most affected by the foreclosure crisis.
To apply for NSP3 funding, San Bernardino is required to submit to HUD a Substantial
Amendment to the Consolidated Annual Action Plan for Fiscal Year 2010-2011 ("Substantial
Amendment") by March 1, 2011. This Substantial Amendment is required since NSP3 grants
are treated as a supplemental appropriation of Community Development Block Grant
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("CDBG") funds for the implementation of activities not budgeted in the current year Action
Plan. The Substantial Amendment must delineate the City's proposed uses for NSP3 funds
and the target areas for the use of such funds. The proposed uses must be eligible under
NSP3 guidelines, and the target areas must be in neighborhoods where there is a great need
for relief from problems associated with the foreclosure crisis, as identified using HUD's
Foreclosure Need website. In addition the target area must be of a magnitude such that
NSP3 program funding will have a visible impact.
This document effectively constitutes the City of San Bernardino's Substantial Amendment to
its Consolidated Annual Plan for Fiscal Year 2010-2011, with all of the sections and
information required by HUD to apply for the City's allocation of NSP3 funding.
1. NSP3 Grantee Information
NSP3 ProQram Administrator Contact Information
Carey K. Jenkins, Director of Housing and Community Development
San Bernardino Economic Development Agency
201 North "E" Street, Suite 301
San Bernardino, CA 92401
Tel: (909) 663-1044 Fax: (909) 888-9413
Email: cienkins@sbrda.orq
Website: www.sbrda.org
2. Areas of Greatest Need
The need for Neighborhood Stabilization Program funds in San Bernardino is clear. Based
on a formula generated by HUD that takes into account the incidence of home foreclosures,
subprime mortgages, vacancies and delinquencies on a census tract level for the past year,
there are many neighborhoods within San Bernardino that qualify for NSP3 funding. In fact of
200 neighborhoods identified in HUD's database as being completely within the boundaries
of the City of San Bernardino, 89.5% percent received a score indicating the greatest need
for foreclosure relief according to HUD's scoring system 1.
A more direct way of evidencing the gravity of the foreclosure crisis in San Bernardino is by
comparing the rate of foreclosures in San Bernardino to the rates for the state of California
and the nation as a whole. For example in November of 2010 the City of San Bernardino had
a foreclosure rate approximately three times the rate for the country as a whole and one and
1 A score of 20 is the highest rating that a neighborhood can receive according to HUO. HUD's database on foreclosures
by census tract can be referenced by accessing www.huduser.org/portal/datasets/NSP.html.
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one-half times the rate for the state of California.2 Given this high incidence of foreclosures in
the City, it is clear that there is a great need for Neighborhood Stabilization Program funds in
San Bernardino.
Since many neighborhoods in the City are eligible to receive NSP3 funding according to
HUD, and the amount of NSP3 funding allocated to the City is only sufficient to assist a small
fraction of these neighborhoods, the areas of greatest need for NSP3 purposes were
selected according to where the funds would have the most visible impact. The maps
attached as Attachment NO.1 identify clearly the two areas selected.
Generally these areas can be identified by the major intersection within their respective
boundaries. The first intersection is at Baseline and Waterman Avenue. This area is
approximately a quarter-mile in radius, and it lies in the eastern part of the City in Council
Wards 1 and 2. It is bounded by 16th Street on the north, Oakhurst Drive on the east, Olive
Street on the south and Arrowhead Avenue on the west. Data obtained from the HUD
Foreclosure Need Website reveals that this area has 3,027 housing units and of these,
approximately 27 percent are in foreclosure or are 90 days or more delinquent.3
In addition to having a high foreclosure rate, the Baseline and Waterman Avenue area was
selected for two additional reasons. The first of these is the lack of NSP1 funds invested in
this neighborhood. This neighborhood is within the target area eligible for NSP1 funds, but it
did not receive nearly as much NSP1 funding as other neighborhoods within the City that, at
the time, suffered from higher levels of blight due to substantial foreclosures. By
concentrating NSP3 funds in this area, the City can compensate for the lack of NSP1
assistance invested in this neighborhood.
The second reason is the opportunity to leverage NSP3 housing program funding with other
housing funds that are being injected into the neighborhood. For example, the Agency in
conjunction with a private developer is currently in the process of planning a 119 unit senior
housing project known as the Lugo Senior Apartments, which is adjacent to this project area.
The Lugo Senior Apartments are expected to cost approximately $17.5 million, and the
Redevelopment Agency of the City of San Bernardino ("Agency") plans to contribute up to
2 Based on foreclosure data obtained from ReaityTrac, for November of 2010 new foreclosure filings were registered in
the country as a whole at the rate of 1/492 households, in the state at the rate of 1/233 households, and in the City of San
Bernardino at the rate of 1/159 households.
3 The data provided by HUD through its HUD Foreclosure Need website can be located at
www.huduser.org/oortal/datasets/N5P.html. Please see Attachment No.2 for a printout of the HUD data relevant to this
neighborhood.
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$6.5 million to this budget from City redevelopment project area housing set-aside funds
("Set-Aside Funds"). Another $8.5 million will be derived from the sale of low and moderate
income housing tax credits.
Also, within the Baseline and Waterman area the Housing Authority of the County of San
Bernardino is planning the redevelopment of a large public housing project known as
Waterman Gardens. The Housing Authority plans to use HOPE VI funding and other public
affordable housing funds, such as tax credits, in order to redevelop Waterman Gardens as a
mixed-income, mixed-use community. Combined, the housing funds to be invested in the
Baseline and Waterman area through the Lugo Senior Apartments, Waterman Gardens and
NSP3 should help to revitalize the area in a visible manner.
The second area selected to receive NSP3 funding is the community surrounding Highland
Avenue and Medical Center Drive. This area is bounded by Highland Avenue on the north,
Mount Vernon Avenue on the east, 16th Street on the south and California Street on the west.
This area is within Ward 6, and it is located in the western part of the City.
The need for foreclosure relief in this community from NSP3 is evident. According to the data
obtained from HUD, this neighborhood has 965 housing units, and approximately 28 percent
are in foreclosure or are 90 days or more delinquent4 As is the case with the first area
identified, this area was selected not only because it has a high foreclosure rate, but also,
because of the opportunity to leverage NSP3 funds with other public housing funds currently
being invested into the area. One major housing development already under construction in
this neighborhood is the Magnolia at Highland Senior Apartments. When finished, the
Magnolia at Highland Senior Apartments will consist of 80 apartments for senior households,
and it will cost approximately $18 million. Of this amount, the Agency plans to provide
approximately $6.5 million from City Set-Aside Funds and the remainder of the funding will
come from tax credits and private financing. The funding being invested in the Magnolia
Senior Apartments combined with the NSP3 funding that will be invested in this
neighborhood, will provide a good impetus for the revitalization of this community as a whole.
In addition to the two neighborhoods identified above, two other neighborhoods are targeted
by the Agency to receive housing funds in an effort to rehabilitate foreclosed or abandoned
residential properties. However, these neighborhoods will not receive NSP3 funds, rather,
funding for these neighborhoods will be provided from other housing funds available to the
Agency, such as Set-Aside, HOME Investment Partnership Program ("HOME") funds, and
NSP1 Program Income.
4 Please see Attachment No 2 for a printout of the HUD data relevant to this neighborhood.
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The first of these neighborhoods is in the Sunrise and 19th Street area. It is bounded by
Highland Avenue on the north, Arden Avenue on the east, Pacific Street on the south and
Sterling Avenue on the west. This area also received a HUD score of 20, indicating a great
need for relief from problems associated with the foreclosure crisis. But, the driving factor in
deciding to inject new housing funds into this area is the opportunity to build upon the funding
that has already been invested in this area. As previously mentioned, $2.62 million in NSP1
funding has already been invested to acquire and rehabilitate seven four-plex properties that
will eventually be rented to households earning no more than 50% AMI. Another $1.6 million
in Set-Aside Funds has been used to purchase three additional four-plexes in the same area
that will also be rented out to households with incomes equal to 50% AMI or less. Set-Aside
and NSP1 funding has also been used to acquire several properties in the same area that
were foreclosed and abandoned. These properties cost a total of approximately $1.1 million,
and will be demolished and redeveloped as senior and single-family affordable housing in the
futu re.
The other neighborhood is in the 5th Street and Meridian Avenue area of the City. This area
is delineated by Baseline Road on the north, Macy Street on the east, Foothill Boulevard on
the south and Pepper Avenue on the west. Like Sunrise and 19th Street this area also
received a HUD score of 20, and the decision to invest additional housing funds in this area
was also based on the amount of funding already invested to revitalize this neighborhood.
Approximately $3 million in Set-Aside Funds has been invested to acquire fifteen properties
that were demolished and will be redeveloped in the future. The Agency plans to issue a
request for proposals to the development community to redevelop this area under a future
housing use. There is also discussion of including a potential commercial component along
Foothill Boulevard if funds permit and market demand is warranted.
The data sources used to determine the above mentioned areas of greatest need were the
HUD Foreclosure Need website, RealtyTrac5, DataQuick6, internal Geographic Information
System data and the Agency's experience administering housing programs funded by NSP1
and other funding sources, such as Set-Aside and HOME funds.
3. Definitions and Descriptions
Bliahted Structure: The City of San Bernardino uses the State of California's definition of
blight as found in California Health and Safety Code Sections 33030 and 33031.
5 An Irvine, California based company that tracks foreclosures nationwide.
6 A San Diego, California based company that provides real estate information nationwide.
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Affordable Rents: The words "Affordable Rents" shall have the same meaning as defined in
California Health and Safety Code Section 50053, as such section may be amended from
time to time, or as this term is defined in 24 CFR Part 92.2, whichever is the most restrictive,
less utility allowances as adopted by the County of San Bernardino Housing Authority Section
8 Program, as appropriate.
Ensurinq Continued Housinq Affordabilitv of Rental Housinq: To ensure continued
affordability of NSP3 assisted rental housing, the program will include an annual certification
of occupancy including adequate verifiable documentation of income pertaining to each
member of the qualifying household. In addition, Grantee will impose affordability covenants
for a period of fifty-five (55) years through a deed restriction on rental projects. This is
consistent with other multifamily and senior housing developments the Grantee has
subsidized in the past under NSP1 and California Redevelopment Law.
Ensurinq Continued Housinq Affordabilitv of Ownership Housinq: To ensure continued
affordability of NSP3 assisted ownership housing, the program will impose affordability
covenants for a term not to exceed forty-five (45) years, commensurate with the source of
program funding and consistent with Grantee's existing down payment assistance program
for homeownership projects. This will be enforced through deed restrictions and will also
require annual certification of owner occupancy and documentation to support proof thereof.
This is consistent with the City's existing homebuyer down payment assistance program and
is consistent with both California Redevelopment Law and the State of California Cal-Home
Program.
Housinq Rehabilitation Standards: NSP3 assisted rehabilitation activities will be conducted in
accordance with all local, state, and federal codes, statutes, and regulations and/or
homeowner or mobile home park rules, and historic preservation requirements, as applicable
and will comply with Part 11 of the California Code of Regulations, Title 24, also known as the
California Building Standards Code and the Energy Star Qualified New Home standard. In
addition, Grantee's housing building standards include recommended green building
measures.
Area Median Income: The words "Area Median Income" shall mean the median income for
San Bernardino County, adjusted for household size, as published by the Housing and
Community Development Department of the State of California, as such term is amended
from time to time, or as defined by the Department of Housing and Urban Development, as
amended from time to time, whichever is lower and whichever provides the deepest level of
affordability when compared on an income-level basis.
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LMMH: The acronym "LMMH" means and refers to persons and households whose income
does not exceed 120% percent of area median income, adjusted for household size, as set
forth in Health and Safety Code Section 50093, as such section may be amended from time
to time, or as this term is defined in 24 CFR Part 92.2, whichever is the most restrictive. The
acronym stands for "Low-, Moderate- and Middle-Income Households".
Verv Low-Income Household: The words "Very Low-Income Household" mean and refer to
persons and households whose income does not exceed 50% percent of area median
income, adjusted for household size, as set forth in Health and Safety Code Section 50105,
as such section may be amended from time to time, or as this term is defined in 24 CFR Part
92.2, whichever is the most restrictive.
4. Low-Income Targeting
At least $819,350 or 25% of the total award under NSP3 will be dedicated to provide housing
for individuals or families whose incomes do not exceed 50% of AMI. This portion of funding
will be used to acquire and rehabilitate smaller, foreclosed or abandoned, multifamily
properties consisting of up to 12 units in the areas of greatest need identified above. These
properties will then be rented at an affordable housing cost to households whose incomes do
not exceed 50% of AMI.
Grantee will issue a Request For Proposals ("RFP") inviting qualified non-profit developers to
identify eligible multifamily housing projects that have been foreclosed or abandoned and are
generally considered to be a blighting influence within the NSP3 areas of greatest need. In
accordance with NSP3 requirements the subject properties will also be purchased at a
discount to appraised value. Qualified affordable housing developers submitting project
proposals with these specifications would have the opportunity to compete for Grantee funds
to acquire, rehabilitate, and manage such properties under a new professional management
agreement and requisite 55-year affordability covenants.
5. Acquisition and Relocation
Based on current estimates, Grantee anticipates converting no more than 12 dwelling units
that currently benefit households at or below 80% of AMI as a direct result of NSP3-assisted
activities. It is anticipated that single family properties to be acquired and rehabilitated under
NSP3 will be vacant at the time of initial purchase. Any multifamily properties acquired
through NSP3 activities with tenants residing in them will first be screened in order determine
the need for possible relocation assistance. In the event tenant displacement occurs and
relocation assistance is necessary, the Agency will comply with all applicable requirements
under the Tenant Protection Act of 2009 and certain relocation requirements that may be
applicable under the Uniform Relocation Assistance and Real Property Acquisition Policies
Act of 1970.
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Grantee will generate preliminary title reports on those properties it intends to acquire looking
for, among other things, any deed restrictions associated with afford ability. Should there be
deed restrictions, Grantee will agree for those restrictions to remain after the structure is
rehabilitated and new occupants for the property are identified.
Table 1 below indicates the number of NSP3 affordable housing units Grantee estimates can
be produced over the term of the program for households whose income does not exceed
50% AMI and 120% AMI, respectively.
Table 1. Housing Units Expected to be Produced by Area Median Income
Income Group Proposed Activity Units Project Start Date/End Date
Start Date: Within one year of
Acquisition. rehabilitation and approval of Substantial Amendment
rental of foreclosed or abandoned by HUD.
~ 50% AMI multifamily properties through 10
Grantee RFP process End Date: Within two years after
initiation of construction and/or
rehabilitation.
Start Date: 120 days of approval of
Substantial Amendment by HUD.
Acquisition, rehabilitation and
~ 120% AMI resale of foreclosed or abandoned 45
single family homes End Date: 3 years from approval
of Substantial Amendment by HUD.
Total Proposed Affordable Housing Units: 55
6. Public Comment
The NSP3 application was published and made available to the public at no less than three
public facilities within the City. In addition, the proposed Action Plan was posted to the
Agency's Website for public review and comment. In both cases, a summary of public
comments will be made available during the public review and comment period. Also, any
public comments made at the City Council Public Hearing will be summarized. All public
comments shall be noted and attached to the Action Plan for HUD scrutiny.
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7. NSP Information by Activity
In addition to administrative activities, Grantee has identified two (2) NSP3 program activities.
Grantee's proposed NSP3 programs include:
A. Acquisition, Rehabilitation and Resale: The majority of Grantee's NSP3 funds,
$2,130,311, will be used for the acquisition, rehabilitation and resale of foreclosed or
abandoned single family homes through participating intermediaries, such as non-
profit housing developers. These intermediaries will be retained through a RFP
process and will be verified by Agency staff with recommendations submitted to
Council. The acquired properties would be selected from the two areas of greatest
need identified in Section 2 of this Amendment.
Under this program, Grantee would purchase a foreclosed or abandoned property
from the bank or other financial institution at a discount to fair market value through the
Agency's affiliated non-profit organization, Affordable Housing Solutions of San
Bernardino ("AHS"). Upon acquisition, one of the intermediaries selected through the
RFP process would be assigned by Grantee to secure, maintain, rehabilitate and resell
the home to a household whose income does not exceed 120% AMI. The
intermediary would rehabilitate the single family unit to meet housing code and HUD
rehabilitation standards, including the standard for Energy Star Qualified New Homes.
During this period, the intermediary would qualify an applicant for homeownership
according to NSP3 guidelines. The intermediary would then sell the home to the
applicant for an amount equal to the lower of the home's appraised value or its total
development cost. The new homebuyer would then secure a conventional mortgage
from one of the Agency's approved lenders and would close on the home. As part of
the qualification process, the qualified homebuyer must complete a minimum of eight
(8) hours of homeownership counseling prior to the sale. AHS would hold title to the
property until the close of sale to a qualified homebuyer.
The decision to allocate most of the NSP3 funding towards this use was based on
several factors, with three of these factors having the greatest influence. The first of
these factors is the abundant number of foreclosed or abandoned single family homes
throughout the City and in the identified areas of greatest need. As was indicated in
Section 2 of this document, the City has a foreclosure rate approximately three times
that of the country as a whole, and both of the identified NSP3 target areas have
approximately 27% of their respective dwelling units in foreclosure or 90 days
delinquent. With such high foreclosure rates it should not be difficult to find residential
properties eligible to be acquired and rehabilitated with NSP3 funds. Another factor in
deciding to implement this housing program is Grantee's experience with a similar
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program enacted with NSP1 funds. Grantee's experience has shown that there is a
high demand for these types of homes, primarily because of the high percentage of
households in the City that have an income below 120% AMI7. To date, intermediaries
working with the Agency have been able to readily find qualified homebuyers for the
homes that have been rehabilitated under the NSP1 program. The final factor is the
community's preference for homeownership housing versus rental housing. Through
meetings with the City Council it has been established the residents of the City would
prefer to provide affordable homeownership opportunities rather than rental
opportunities.
Acquisition, Rehabilitation and Rental for Households at or below 50% AMI:
Approximately $819,350 or at least 25% of the total award under NSP3 will be
dedicated to provide housing for individuals or families whose incomes do not exceed
50% of AMI. This portion of funding will be used to acquire and rehabilitate small,
foreclosed or abandoned, multifamily properties consisting of up to 12 units in the
NSP3 areas of greatest need identified above. These properties will then be rented at
an affordable housing cost to households whose incomes do not exceed 50% AMI.
Under this program activity, Grantee will issue a Request For Proposals ("RFP")
inviting qualified non-profit developers to bid on eligible multifamily housing projects
that have been foreclosed or abandoned and are generally considered to be a
blighting influence within the NSP3 areas of greatest need. In accordance with NSP3
requirements the subject properties will also be purchased at a discount to appraised
value. Qualified affordable housing developers responding to project proposals with
these specifications would have the opportunity to compete for Grantee development
loans to acquire, rehabilitate, and manage such properties under a new professional
management agreement. It would be the responsibility of the selected developer(s) to
hold title to the multifamily properties, rehabilitate the multifamily units to meet housing
code and HUD rehabilitation standards, including the standard for Energy Star
Qualified New Homes, and rent out the multifamily units to households whose income
does not exceed 50% AMI. The owner/developer would be responsible for
professionally managing the property and ensuring that tenants selected to reside in
the property comply with all NSP3 income and tenancy requirements.
7 Data from the HUD Foreclosure Need website reveals that the percentage of persons with an income of less than 120%
AMI is greater than 85% for both of the areas of greatest need identified to receive N5P3 funding (please see Attachment
No.2).
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According to the Agency's experience with NSP1 housing programs, a rental program
is the most effective way to deploy the NSP3 funding dedicated to specifically address
the needs of Very Low-Income households. The Agency's experience with NSP1 has
shown that approximately the same amount of Neighborhood Stabilization Program
subsidies are required to house a 50% AMI household in a single family,
homeownership unit as it does to house them in an affordable rental unit8. Since the
costs to provide a single family homeownership unit to a Very Low-Income household
are the same as those required to provide an affordable rental unit, the decision to
deploy this portion of funding to provide rental housing was based on NSP3 guidelines
which require Grantees to "create preferences for the development of affordable rental
housing for properties assisted with NSP3 funds"g. Also, by including a rental housing
component as part of its NSP3 housing activities, the Agency is able to diversify the
type of housing offered under NSP3, which should help to utilize NSP3 funds faster
and reach a wider segment of the population.
Administration: Administration of the program will not exceed 10% ($327,740) of
the NSP3 grant and 10% of program income.
For both of its NSP3 housing program activities, Grantee will enact measures to comply with
the vicinity hiring requirements under NSP3. Primarily, Grantee will insert language in its
agreements with developers, intermediaries and contractors that requires them to establish
procedures for hiring from the NSP3 target areas. These procedures shall be consistent with
Section 3 and Agency guidelines and will be monitored by Agency staff throughout the
Program to ensure compliance.
8. Certifications
(1) Affirmatively furthering fair housing. The jurisdiction certifies that it will affirmatively further fair housing,
which means that it will conduct an analysis to identify impediments to fair housing choice within the
jurisdiction, take appropriate actions to overcome the effects of any impediments identified through that
analysis, and maintain records reflecting the analysis and actions in this regard.
(2) Anti-displacement and relocation plan. The applicant certifies that it has in effect and is following a
residential anti-displacement and relocation assistance plan.
8 Based on NSP1 experience an NSP subsidy of approximately $65,000 is required to house a 50% AMI household in a
single family, homeownership unit and a subsidy of about $70,000 is required to provide an affordable rental unit for the
same household.
9 Excerpted from Federal Register, Vol. 75, No. 201, October 19, 2010, Notices, Section U.
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(3) Anti-lobbying. The jurisdiction must submit a certification with regard to compliance with restrictions on
lobbying required by 24 CFR part 87, together with disclosure forms, if required by that part.
(4) Authority of jurisdiction. The jurisdiction certifies that the consolidated plan or abbreviated plan, as
applicable, is authorized under state and local law (as applicable) and that the jurisdiction possesses the legal
authority to carry out the programs for which it is seeking funding, in accordance with applicable HUD
regulations and other program requirements.
(5) Consistency with plan. The jurisdiction certifies that the housing activities to be undertaken with NSP funds
are consistent with its consolidated plan or abbreviated plan, as applicable.
(6) Acquisition and relocation. The jurisdiction certifies that it will comply with the acquisition and relocation
requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, as
amended (42 U.s.e. 4601), and implementing regulations at 49 CFR part 24, except as those provisions are
modified by the notice for the NSP program published by HUD.
(7) Section 3. The jurisdiction certifies that it will comply with section 3 of the Housing and Urban
Development Act of 1968 (12 U.S.e. 1701u), and implementing regulations at 24 CFR part 135.
(8) Citizen participation. The jurisdiction certifies that it is in full compliance and following a detailed citizen
participation plan that satisfies the requirements of Sections 24 CFR 91.105 or 91.115, as modified by NSP
requirements.
(9) Following a plan. The jurisdiction certifies it is following a current consolidated plan (or
Comprehensive Housing Affordability Strategy) that has been approved by HUD. [Only States and entitlement
jurisdictions use this certification.]
(10) Use of funds. The jurisdiction certifies that it will comply with the Dodd-Frank Wall Street Reform and
Consumer Protection Act and Title XII of Division A of the American Recovery and Reinvestment Act of 2009 by
spending SO percent of its grant funds within 2 years, and spending 100 percent within 3 years, of receipt of
the grant.
(11) The jurisdiction certifies:
a. that all of the NSP funds made available to it will be used with respect to individuals and families
whose incomes do not exceed 120 percent of area median income; and
b. The jurisdiction will not attempt to recover any capital costs of public improvements assisted with
CDBG funds, including Section 108 loan guaranteed funds, by assessing any amount against properties
owned and occupied by persons of low- and moderate-income, including any fee charged or
assessment made as a condition of obtaining access to such public improvements. However, if NSP
funds are used to pay the proportion of a fee or assessment attributable to the capital costs of public
improvements (assisted in part with NSP funds) financed from other revenue sources, an assessment
or charge may be made against the property with respect to the public improvements financed by a
14
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source other than CDBG funds. In addition, with respect to properties owned and occupied by
moderate-income (but not low-income) families, an assessment or charge may be made against the
property with respect to the public improvements financed by a source other than NSP funds if the
jurisdiction certifies that it lacks NSP or CDBG funds to cover the assessment.
(12) Excessive force. The jurisdiction certifies that it has adopted and is enforcing:
a. A policy prohibiting the use of excessive force by law enforcement agencies within its jurisdiction
against any individuals engaged in nonviolent civii rights demonstrations; and
b. A policy of enforcing applicable state and local laws against physically barring entrance to, or exit from,
a faciiity or location that is the subject of such nonviolent civii rights demonstrations within its
jurisdiction.
(13) Compliance with anti-discrimination laws. The jurisdiction certifies that the NSP grant will be conducted
and administered in conformity with Title VI of the Civii Rights Act of 1964 (42 U.S.c. 2000d), the Fair Housing
Act (42 U.S.c. 3601-3619), and implementing regulations.
(14) Compliance with lead-based paint procedures. The jurisdiction certifies that its activities concerning lead-
based paint will comply with the requirements of part 3S, subparts A, B, J, K, and R of this title.
(15) Compliance with laws. The jurisdiction certifies that it wiii comply with applicable laws.
(16) Vicinity hiring. The jurisdiction certifies that it will, to the maximum extent feasible, provide for hiring of
employees that reside in the vicinity of NSP3 funded projects or contract with small businesses that are owned
and operated by persons residing in the vicinity of NSP3 projects.
(17) Development of affordable rental housing. The jurisdiction certifies that it will be abide by the
procedures described in its NSP3 Abbreviated Plan to create preferences for the development of affordable
rental housing for properties assisted with NSP3 funds.
9. NSP3 Application Summary
In addition to the preceding narrative, the application summary forms included in the HUD
publication "Instructions for Completing the NSP3 Substantial Amendment or Abbreviated
Action Plan", have been filled to ensure that all required information has been included in this
Substantial Amendment and for the reader's reference.
Signature/Authorized Official
Date
Title
15
PlAgendas\Agenda Attachments\Exhibits\2011\02-07-11 NSP3 Substantial Amendment Application.docx
2011-32
SAN BERNARDINO COUNTY SUN
4030 N GEORGIA BL YO, SAN BERNARDINO, CA 92407
T eIephcne (909) 889-9666 / Fax (909) 885-1253
Carey K. Jenkins
ECONOMIC DEVELOPMENT AGENCY-CI
201 NORTH E ST #301
SAN BERNARDINO. CA - 92401
PROOF OF PUBLICATION
(2015.5 C.C.PJ
Stata 01 Callomla )
CourXy 01 SAN BERNARDINO ) 55
Notice Type: GPNSB . GOVERNMENT PUBLIC NOTlCE-SB
Ad Oescrlpllon: NSP3 NoIIce of S<Alslanllal Amendment
I 8m 0 citizen of the UnII8d SIe," end e ...lIdonl of tho Stele 01 CeII_: lem
CNOr the ago 01 elghteen _. ond not 0 porty 10 or In_In tho 0_
enlWed melIer. 10m the Il'Inc:IPI!I cIork of tho prtnIor ond publahor of tho SAN
BERNARDINO COUNTY SUN, io newoplIpor publohod In tho EJVIIh Ianguago
In tho city 01 SAN BERNARDINO, county 01 SAN BERNARDINO, ond o"",,,,"d
OllOWllpllJlOr 01 general_Ion .. doftnod by the Iawo 01 tho SIoto 01
CaIIfomIo by the Supeo1or Coull of tho Co<n\I 01 SAN BERNARDINO, Slate 01
CalIfornia, under daIo 08/20/1152, Cuo No. 73084. That the notlce, 01 which
the on_ Is 0 prlnl8d alp)', hu been publlhod In ooc:h regular ond enllro
Issue oIoold _per ond not In eny IlJIlIllomenllhereol on lhololloYMg
dale., to-wIt
01/1412011
E.ocutod on: 0112012011
At Los Angeles. CoIllornla
I certlly (or _...) undor penellY 01 "",July !hat !ha foregoing Is leue end
correct, .
.~
----.
SIg')"ture
This .,.C. fee M'IIlwnp er'I:1
888#: 2024172
CITY OF SAN ~RNARDINO
NOTICE OF PUt ICfrEARNIG
FORTHECOUNCI 0 THE CITY
OF SAN .E N DINO
N.llc. Is IIorabY .IVlnthat tho
councl~1 lho City of $an ..,nordlno
will ho a public hoarlnll In lho Cltv
Councl hoi'T1bers Joarted at JOO North
"0" Stroet, SOn .ornordf.... on
Monday, FIDruarY 7, at 4:10 p.m., or
as soon 'hereafter CIS 5>>Osslbl" to
receive publfc comment on the
followl...
Dr.1l S~bll.nllal Arnendmonl 1.lho
CllY of n ,0m<lrdlWna C....o Idaltd
Annua Action flkln r FIICQ Vear
1010-20 1
A Sublt.ntlal Arne_nl 10 lho City
of san .ornordlno Consolldattd
Annual Action Pion for FIocaI Yoor
2010-2011 Is bolntl plWOlOd pursuant to
tho Docfd..Frank Wall Stroot R.f.rm
and consumer Protocllon Act of 2010
("Docfd..Frank Act"'. il1lYod b
C... . on JulY 11. 20 lho llod:r.
F~Act app.--Ialol II billion tor
the pyrpol. of alllatln, n the
rodo'(OIOP/IlInl of _ and
torac_ ham.. and real_II.1
prclPtrtloO u_r 1~lghb'rhood
Stalllllzallon p....rom NSP"). Tho
fundi _rIalod r tho Dodd.
Frank Ad ara rater to 81 "'NSPJH.
Undtr Ihls now ..lItlomonl program.
Iho City of $an .0rnonl1no hal boon
.ranttcl 12.2 million. The .rant. IIr'
oclmlnlslorad by tho U.S. DoPllrlmonl
of HouIIIlII .nd Urban Dev'lOPmont
f."HUD") and aro l!lGlod as
ommunltv I_nl .lOCk Grant
"CD.G"' ~. A .ub.tonllal
amondmont to tho Action Plan Isirequired bocav.. Ihls o.,,,,"montal
a~ of CD.G _ f.r th.
under 0' activit... woro not
budaetod thocyrronl Action Pion.
All .po....... ....,,1ntI to voIco llIolr
opinion en lho P.--sod }j"tonllal
Amendment may ~r fore the
N!SYor and Common Counc I 0' Iho
City of San ler~lna en the date and
time .tated here ., or submit
written CIOl1VTIent. tJiY2:00 p.m. an
.ald date to:
Em~~Morzullo.
Interim xecutlve Director
City of $an rnordlno Economic
Dovo nl......na-
201 Nerth" " treef, Suit. 301
San .ornordlno. CA '20101
AIl'ntlon: COm' K. JonkIIII, D roct.r
. of Hou""-
and CGmmunItv Dovolopmont
TIIo Draft Substantial Amondmonl to
tho C.....I_ _I Action Pion
for FIscoI Voor 2010-1011 "110
"Arnendmonl")It a_ for Mile
rovlew durInlI a Uoday porlocl .neIlllll
.n J......ry 21, 2011. COPlo. of 1110
;-
IIIIIII~ III II III II 1m III1IIIII mlllll~
. A 0 0 0 0 0 Z 0 1 7 5 41.
.,
2011-32
Amendment are available on the City
of San Bernardino Economic
oeveJopmen' Agency webs It.
atR~~r. and at th.
to n,. during their
respective hours of operation:
City of San ..rnardlno Economic
D.volopment A,onev
201 North "EN Street, Suite 301
San 8.rnardl~ CA 92..01
(909) 663-1044
Dffieo .f tho Cltv Clerk
300 ~~t~~~t~~,j'll"~loor
San Il.rnanll'l",~ n41.
lto,) UWWI
Nor'"'A~! w~J"lt~.;Jbrarv
San Bernardino. CA n410-3094
('09) 311-1201
Portles Int.rested In r.c:elvlng
additional information regarding the
Nol9hborhoad Stablllzallon Pl'OlIram
and NSPJ may contac1 Carey K.
Jinkins, DIrector of Housing and
communltv Oo..Jopment. at tho Cltv
of San Bernardino Economic
Dovolopmont ADoney at ('091 163.1044
or TOO (909) 31~540 botwoon tho
hour. of 9:00 a.m. and 5:00 p.m.,
Monday through Friday.
ln4'l1
SIl 5-2024172#