HomeMy WebLinkAboutR56-Economic Development
CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY ORIGINAL
FROM: Emil A. Marzullo
Interim Executive Director
SUBJECT:
Public Hearing - American Recovery and
Reinvestment Act Neighborhood
Stabilization Program 2 ("NSP2") Notice of
Funding Availahility Competitive Grant
Application
DATE: June 24, 2009
SvnoDsis of Previous Commission/Council/Committee Action{s):
On June 18,2009, Redevelopment Committee Members Johnson, Baxter and Brinker unanimously voted to recommend that
the Mayor and Common Council consider this action for approval.
Recommended Motion(s):
Open/Close Public Hearing
(Mavor and Common Council)
Resolution of the Mayor and Common Council of the City of San Bernardino, California, approving the
submittal of an application to the United States Department of Housing and Urban Development ("HUD") for
funding under the Neighborhood Stabilization Program Round 2; and authorizing the City Manager of the City
of San Bernardino ("City") or his designee to execute, on behalf of the City, such documents as requested by
HUD to effectuate the application
Contact Person(s):
Carey K. Jenkins
Phone:
Project Area(s):
N/A
Ward(s):
(909) 663-1044
All
Supporting Data Attached:
o Staff Report 0 Resolution(s) 0 Grant Application 0 Agreement(s)/Contract(s) 0 Map(s)
o Leller(s)
Funding Requirements:
Amount: $
-0-
Source:
N/A
Budget Authority:
N/A
Signature: Z ~ Fiscal Review:
Emil ~t~ Executive Director
c;;~;;;i~~i~~/c-;;;;;;~ii--N-;;ies-:-m_mmmm_-re:-:s-~;mmm--.:;;LOZ"-'7'--:--:;;;l2P-~--m_mmmm_mmm_mmm--mm--m--m----m--mm
.
P \Agenda<;IComm Dev Commi"ion\CDC 2009\07-06-09 J\SP2 Gran! Application SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 07/06/2009
Agenda Item Number: J2.5lI
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
PUBLIC HEARING - AMERICAN RECOVERY AND REINVESTMENT ACT -
NEIGHBORHOOD STABILIZATION PROGRAM 2 ("NSP2")
NOTICE OF FUNDING A V AILABILITY COMPETITIVE GRANT APPLICATION
BACKGROUND:
On May 4, 2009, thc U.S. Department of Housing and Urban Development ("HUD") issued a Notice
of Funding Availability ("NOFA") for the Neighborhood Stabilization Program Round 2 ("NSP2").
Funds under the NSP2 will be awarded on a competitive basis for activities eligible under Division B,
Title III of the Housing and Economic Recovery Act of2008 (Public Law 110-289, NSP Round I), to
address home foreclosure and abandonment and for the provision of capacity building and support for
NSP grantees. Rating factors will include grantee capacity to execute projects, leveraging potential
and concentration of investment to achieve neighborhood stabilization. Grantees must expend at least
50% of funds awarded within 2 years and 100 percent of funds awarded within 3 years of the original
award.
Applicants will prepare an application for programmatic funding and complete citizen participation
before submitting to HUD. Paper applications will be due to HUD offices in Washington, D.C. on
July 17,2009. HUD will then review applications and make awards shortly thereafter.
Eligible applicants are states, units of general local government, non-profit entities and consortia of
non-profit entities, which may submit proposals in partnership with for-profit entities. As opposed to
the last round of the NSPI funding in which funds were awarded on a formulaic basis, primarily to
entitlement communities, the NSP2 is a competitive grant, not to exceed $1.93 billion nationally to
implement neighborhood stabilization efforts.
The goal of the NSP2 is to target and reconnect neighborhoods by investing funds in programs and
projects that will revitalize targeted neighborhoods and reconnect those targeted neighborhoods with
the economy, housing market and social networks of the community and metropolitan area as a whole.
As with the NSP I, the new funding under the NSP2 requires that no less than 25% of the funds be used
for purchase and redevelopment of abandoned and foreclosed-upon homes and residential properties to
house individuals and families whose incomes do not exceed 50% of the area median income ("AMI").
Other identified goals under the NSP2 include:
. Ensuring the longest feasible continued affordability of housing stock that is redeveloped;
. Investing in affordable housing that will remain desirable and affordable for the longest
feasible period;
. Supporting projects that optimize economic activity and the number of jobs created or retained
or that will provide other long-term economic benefits;
P\Agendas\Comm Dev Commission\CDC 2009\07-06-09 l'iSP2 Grant Application SRdoc
COMMISSION MEETING AGENDA
Meeting Date: 07106/2009
Agenda Item Number: rz.~(p
Economic Development Agency Staff Report
NSP2 Grant Application
Page 2
. Integrating neighborhood stabilization programs with other Federal policy pnontJes and
investments, including energy conservation and efficiency, sustainable and transit-oriented
development, leveraging resources and removing destabilizing influences; and
. Augmenting neighborhood stabilization programs with other firmly committed resources such
as the Agency's tax increment 20% housing set aside funds and HOME Program funds.
The long-term outcomes may include, but are not limited to, increased sales of residential property in
targeted neighborhoods and increasing median market values of real estate in targeted neighborhoods.
Successful applicants will provide baseline data and then report on these and certain output measures,
such as numbers of properties acquired and number of households provided affordable housing by
income category.
HUD treats the NSP2 funds as a component of the Community Development Block Grant ("CDBG")
program (authorized under the Public Housing and Community Development Act of 1974, 42 U.S.c.
5301 et seq. (HCD Act)).
CURRENT ISSUE:
Agency Staff is currently in the process of reviewing the new program guidelines, compiling
foreclosure data, and considering the various programmatic activities to mitigate the social and
economic impacts of foreclosed and abandoned residential properties in accordance with the provisions
of the NSP2. A draft of the grant application will be made available for public review at the time the
citizen comment period begins which occurred on June 24, 2009. The draft grant application includes,
to the extent possible, a narrative of the current foreclosure situation throughout the City, forecasts of
future foreclosure activity, and the general programmatic activities Agency Staff proposes to undertake
under the NSP2.
Upon approval of the application by HUD, Agency Staff will return to the Mayor and Common
Council of the City of San Bernardino ("Council") to detail the implementation of the grant, specify
implementation activities and programs, and to seek all necessary approvals. A great deal of work will
be required of Agency Staff after the HUD approval has been obtained and prior to the final action on
this matter by the Council. Should the grant application be approved by HUD, it is anticipated this
final action by the Council should occur sometime in the fall of 2009.
PrOi!ram Obiectives
In support of the NSP2 activities, the Agency recommends targeting funds to the following objectives,
which are consistent with those of the NSPI. In doing so, the Agency can use the same programmatic
platform already approved by the Council and established under the NSPl to expend the NSP2 funds.
Acquisition, Rehabilitation and Resale: This program allocates $3,300,000 of the NSP2 funds for
the acquisition and rehabilitation of single-family homes through participating intermediaries, such as
builder/developer contractors. These intermediaries have been retained through a Request for
Proposals (RFP) process and have been vetted by Agency Staff.
PI!\gcndas\Comm Dcv Commission\CDC 2009\07-06-09 NSP2 Grant Application SRd<Jc
COMMISSION MEETING AGENDA
Meeting Date: 07/06/2009
Agenda Item Number: P...1fJJJ
Economic Development Agency Staff Report
NSP2 Grant Application
Page 3
Acquisition, Demolition and future Redevelopment: This program is designed to address
abandoned or foreclosed upon residential units in physical conditions too costly for rehabilitation.
With a budget of $2,400,000, this program will allow for the acquisition, demolition and future
redevelopment of acquired sites.
Housing Opportunities for Households at or below 50% AMI: This program allocates $2,400,000
of the NSP2 funds to projects currently approved by the Council such as the Sunrise and 19th Project
which is being redeveloped and not yet approved under a master development agreement by and
between the Agency and Mary Erickson Community Housing. It may also be used to rehabilitate
projects that are subsequently identified by the Agency and meet the threshold criteria established by
the NSP2 for this funding component.
Administration: Administration of the program will not exceed 10% of the NSP grant award and
10% of program income.
Geof!raohic Tarf!elinf!
The NSP2 Program requires that jurisdictions give priority emphasis to areas of greatest need including
those with the highest HUD based foreclosure score, vacancy score and propensity for continued
foreclosure activity. In order to meet this requirement, Agency Staff obtained city-wide data on
residential foreclosures, by Council Ward and census tract, and examined these areas accordingly. All
data was collected through April, 2009. The total number of foreclosures within the City was
determined and then these numbers were overlaid onto various census tracts within Council Wards.
This was paired with area targeting strategies developed by HUD to determine some of the most in-
need areas of the City.
Under the NSP2, the Agency is required to dedicate funds to areas that achieve a specific foreclosure
or vacancy score. The "foreclosure" risk score is based on a ranking of census tracts by two measures:
(l) the percentage of foreclosures in the specified area; and (2) the overall number of foreclosures in
the specified area. Each census tract receives a graduated score from 1 to 20 based on those two
rankings. The "vacancy" risk score is based on an algorithm that combines a 90-day vacancy rate with
foreclosure rates and then ranks census tracts on the same graduated scale.
Based on an analysis of all information available to Agency Staff and in keeping with HUD
requirements to determine need, Agency Staff recommends targeting the NSP2 funds to the specific
areas of the attached map identified as Attachment "A".
AUlhorilV 10 Make Grants
Funding made available under the NSP2 is authorized by the American Recovery and Reinvestment
Act of 2009, which appropriated $2 billion for additional funds for emergency assistance for
redevelopment of abandoned and foreclosed homes and residential properties as originally authorized
under Title III of Division B of the Housing and Economic Recovery Act, 2008 (HERA) (Public Law
110-289, enacted July 30, 2008), as amended.
P\Agendas\Comm Dev Commission\CDC 2009\07-06-09 NSP2 Grant Application SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 07/06/2009
Agenda Item Number: -llGtl
Economic Development Agency Staff Report
NSP2 Grant Application
Page 4
Minimum Grant Request
The minimum grant request must be for no less than $5 million and must have the effect of either
returning a minimum of 100 abandoned or foreclosed homes back to productive use or otherwise
eliminating or mitigating their negative effects on the stability of the target geography. For the
purposes of the NSP2 grant application, the Agency recommends a request of $9,000,000, which
includes an administrative line-item of up to 10% of the grant award.
Citizen Particivation
All applicants must demonstrate that they have completed a citizen participation component for their
proposed work program. The summary of the citizen comments must be a part of the NSP2
application submittal. Minimum citizen participation involves publishing in a newspaper of general
circulation or other general news media outlet covering the target geography and posting on the official
website of the public agency a description of the proposed target geography, and proposed uses of the
NSP2 funds, in sufficient detail for affected citizens to understand how they may be affected, and
soliciting and receiving comments. The Agency initiated the Citizen Participation process on June 24,
2009, with the publication of a hearing notice and a draft of the NSP2 grant application posted to the
Agency's website for general public review and comment. Any comments received during the public
comment period will be presented to a Public Hearing of the Council on July 6, 2009.
ENVIRONMENTAL IMP ACT:
None.
FISCAL IMP ACT:
None.
RECOMMENDATION:
That the Mayor and Common Council adopt the attached Resolution.
7aW
Emil A. Marzullo, Interim Executive Director
?\A.gendas\Comm Dev Commission\CDC 2009\07.06-09 NSP2 Grant Application SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 07/06/2009
Agenda Item Number: ~~
,. 30N"'~O
w
a:
:r
>-
:>
"
"
Z
<(
W
~
>-
"
a:
<(
w
"'
"
z
:>~
"'."
:ra:
~~
.
.
!
I
.
.
.
."iia
L ....,..
u1 g.
-1 "
J-..~~
:l .
."
.l~_g
---1iH
..l101
I:
"
i
3B\fl~f)~S(o!:!..-_
,
2:!:.. ~nl~
:~
SllSfl'fS'ffl
~~;"'J~.
(;;':
&'
?
I
.>
"^,,
~of-~\;,,"!)
'.
",\
"01
~~"
l.~~
. <i
ro ~
~ . "
~ 15 "-
" ~ ,;
2> "' 1;;",
15
. iij :r >'''
u C. "- "a:
'tl ~ "' "' :l~
z z
C
@ .. r" 0
'" i i
..
oJ .-
'"
I^N.LW
.
~:
i
l\;""!'
I
I'-i",
, fiE-..;
I r;\
,_~J~J!~
.~'-ij(fI7iiH;!
,YOK13
'''"'
"'
~
"
z
<(
z
"
z
a:
w
>
>-
"
,;~
1;;"
,;~
1;;"
I,
i~
'.
"
~
o.
~i
. .
v.:'t30N't:l:JddI.l;
.
OllYN3'
3^"'M31^
A31T0'^
,
:~
,i:
I, i
\i ;
!
1
3Mi'N'fflllllYM
-~~
A"'MY~1l3IS
,
I
3^Y01f3HMOlRlY
...
,
'"
:"'o~
'I '<+"
!~L H~
!Sl:)
[
~ 1=
I
.
~
A"NONlllll\:.n-
I
0\
M,
-j
\
,
,
g
~
N"'IOI"3~
If'....1l3dd3d
1
2
3
4
5
6
7
8
9
RESOLUTION NO.
to if?) if
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO, CALIFORNIA, APPROVING THE SUBMITTAL
OF AN APPLICATION TO THE UNITED STATES DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT ("HUD") FOR FUNDING UNDER
THE NEIGHBORHOOD STABILIZATION PROGRAM ROUND 2; AND
AUTHORIZING THE CITY MANAGER OF THE CITY OF SAN
BERNARDINO ("CITY") OR HIS DESIGNEE TO EXECUTE, ON BEHALF
OF THE CITY, SUCH DOCUMENTS AS REQUESTED BY HUD TO
EFFECTUATE THE APPLICATION
WHEREAS, in Fiscal Year 2009-2010 the City of San Bernardino, California (the "City'), is
applying to receive $9 million from the United States Department of Housing and Urban
10
11 Development ("HUD") under the Neighborhood Stabilization Program Round 2 ("NSP2") as
12 authorized by the American Recovery and Reinvestment Act of 2009 ("ARRA"), which
appropriated $2 billion in additional funds for emergency assistance for the redevelopment of abandoned
13
and foreclosed homes and residential properties as authorized under Title 1II of Division B of the
14
Housing and Economic Recovery Act, 2008 ("HERA") (public Law 110-289, enacted July 30, 2008), as
15
amended; and
16
17
WHEREAS, the NSP2 is subject to certain statutory and regulatory provisions governing the
18 Community Development Block Grant ("CDBG") program as necessitated by HERA; and
19 authorized under Public Hearing and Community Development Act of 1974, 42 U.S.C. 5301 et seq.
20 (HCD ACT)); and
21
WHEREAS, the City wishes to submit an application to obtain from HUD, an allocation 0
22 $9,000,000 to be used by the City of San Bernardino Economic Development Agency ("Agency")
23 to purchase, redevelop and/or demolish abandoned foreclosed homes and residential properties; and
24
WHEREAS, the City has provided citizens adequate opportunity to review and comment on
25 the proposed activities described in the application as required by HUD's alternative requirements to
26 42 U.S.C. 5304(a)(2) under the NSP2 that waive the requirements of Sections 91.105(k) and
27 91.115(i) to the extent necessary to allow a grantee to provide no fewer than ten (10) calendar days
for citizen comment; and
28
P:\Agcndas\Resolutions\Rcwlutions'1009107-06-09 NSP2 Grant Application MeC Resodoe
I
'7-{;-0
.:-iI P, t?
1 WHEREAS, the City seeks to redevelop and/or demolish abandoned and foreclosed homes
2 and residential properties to address the significant costs that foreclosure activity imposes on local
3 municipalities and neighborhoods within the City.
4 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY
5 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS
6 FOLLOWS:
7 Section 1. That the Mayor and Common Council of the City of San Bernardino hereby
8 approves the submittal of an application, substantially in the form as attached hereto as Exhibit "A,"
9 for funding to HUD for Fiscal Year 2009-2010 in the amount of$9 million under the NSP2 for the
10 purpose of the redevelopment and/or demolition of abandoned and foreclosed homes and residential
11 properties.
12 Section 2. That the City Manager, or his designee, is authorized to execute and submit to
13 HUD, the appropriate applications. agreements and ancillary documents necessary to implement the
14 NSP2 as said applications, agreements and ancillary documents that are prepared and herein
15 approved, copies of which are on file with the City Clerk, and are incorporated herein by reference
16 as though fully set forth at length.
17 Section 3. This Resolution shall take effect upon its adoption and execution in the manner
18 as required by the City Charter.
19 1//
20 1//
21 1//
22 1//
23 1//
24 1//
25 1//
26 1//
27 1//
28 1//
P\Agendas\Resolulions\ResolulIons\2009\07.06-09 NSP2 Grant Application MCC Reso doc
2
1
2
3
4
5
6
7
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO, CALIFORNIA, APPROVING THE SUBMITTAL
OF AN APPLICATION TO THE UNITED STATES DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT ("HUD") FOR FUNDING UNDER
THE NEIGHBORHOOD STABILIZATION PROGRAM ROUND 2; AND
AUTHORIZING THE CITY MANAGER OF THE CITY OF SAN
BERNARDINO ("CITY") OR IDS DESIGNEE TO EXECUTE, ON BEHALF
OF THE CITY, SUCH DOCUMENTS AS REQUESTED BY HUD TO
EFFECTUATE THE APPLICATION
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
8 Common Council of the City of San Bernardino at a
The foregoing Resolution is hereby approved this
21
22
23
19
20
24
meeting
day of
, 2009, by the following vote to wit:
Aves
Navs
Abstain
Absent
Rachel G. Clark, City Clerk
day of
,2009.
Patrick J. Morris, Mayor
City of San Bernardino
25 Approved as to Form:
26
27 By:
28
~ t ~ 'J-;t/
James F. Penman, CitYAttorney
P:\Agendas\Resolulions\RcsolutiOO$\2009\07-06-09 NSP2 Grant Applicalion MCC Reso_doe
3
EXHIBIT "A"
City of San Bernardino
Neighborhood Stabilization Program 2
For Fiscal Year 2009-2010
City of San Bernardino
NSP Contact
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: cjenkins@sbrda.org
www.sbrda.org
PROGRAM SUMMARY
In response to the national rise in subprime mortgage foreclosures and the significant
costs that foreclosures impose on local municipalities and neighboring homeowners,
Congress authorized $3.92 billion for the redevelopment of abandoned and foreclosed
residential properties under Title III of the Housing and Economic Recovery Act of 2008
(HERA). The funds are administered by the United States Department of Housing and
Urban Development (HUD) under the entitlement grant program referred to as the
Neighborhood Stabilization Program (NSP1).
In 2009 Congress appropriated an additional $1.93 billion for foreclosure mitigation
activities under Neighborhood Stabilization Program (NSP2). This latest allocation is in
response to the Obama Administration's continued efforts to address the housing crisis
and is authorized under American Recovery and Reinvestment Act of 2009 (ARRA).
The Recovery Act directs HUD to narrow the field of qualified geographies based on
need using HUD's proprietary NSP Need Calculation Tool. Proposals from the areas of
highest need will be judged on: 1) capacity of the applicant to execute projects; 2)
financial leveraging potential; 3) concentration of investment to achieve neighborhood
stabilization; and 4) other criteria that HUD determines to be appropriate.
Under NSP2 the City of San Bernardino ("San Bernardino" or "City") is requesting $9
million to stem the tide of foreclosures and stabilize neighborhoods. By acquiring and
redeveloping abandoned foreclosed homes and other residential properties the City will
achieve its goal of arresting the decline in home values and begin stabilizing
neighborhoods that have disproportionately suffered from abandonment, blight and
neglect.
1
PI.Agendas\Agenda Attachments\Agenda Anacllmcms\Agenda Anachmems\Agrmts.Amend 1009\07.06-09 ~SP2 Grant ApplicationdlX
6/29/2009 DRAFT
HUD has determined a local foreclosure rate of 11.8%, the second highest among
general local governments in California. Each of the City's proposed target areas
identified under this announcement achieve foreclosure risk scores of 20 and vacancy
scores between 14 - 18 as determined by the HUD/NSP foreclosure need map. The
City NSP2 funds are targeted to areas within census tracts with a high number of
foreclosures and areas with the likelihood of additional foreclosures. The City will use
NSP2 to fund the purchase of foreclosed or abandoned properties in these areas to
help stabilize neighborhoods. The target areas will benefit from:
. Acquisition of properties
. Demolition of necessary structures
. Limited and targeted rehabilitation of worthy properties
. Future development of low income rental housing and
. Future development of single family homeownership opportunities
The HUD generated data reflects a high incidence of foreclosure within the target areas
of need. In addition to a high foreclosure rate these neighborhoods suffer from a high
crime rate, above average code enforcement incident reporting and a proliferation of
abandoned and poorly maintained properties. The transformative effects of City
involvement in stabilizing the target areas will ensure long-term affordability,
reconnecting neighborhoods and arresting further decline.
Included in this response is a needs analysis identifying the geographic areas of
greatest need within the City, and the proposed distribution and uses of NSP2 funds
that are consistent with HUD regulations. Sources of information used in the
preparation of this application for funding include data derived and used by HUD's
proprietary tool to determine its needs assessment in allocating NSP2 funds, 2006 U.S.
Census information, foreclosure information provided by RealtyTrac, and City generated
Geographic Information System (GIS) data.
FACTOR 1 NEED. EXTENT OF THE PROBLEM. MARKET CONDITIONS
One of the most dramatic changes in financial services over the last several years has
been the expansion of mortgage products. In addition to the conventional fixed-rate 30-
year loan, lenders now offer a number of other mortgage products such as "interest-
only" mortgages that allow a borrower to pay only the interest for the first few years of
the loan, and "payment option" adjustable-rate mortgages (ARMs) that include flexible
payment options for the borrower. These types of mortgages are often combined with
second-lien mortgages and allow reduced documentation of creditworthiness. In 2006,
these so called "nontraditional" mortgages accounted for more than one-third of all
mortgage loans produced compared to 2% six years earlier. While these high-priced or
subprime mortgage products can benefit some consumers, data shows subprime loans
are usually marketed to less sophisticated buyers or those who may not otherwise
qualify for more traditional mortgage loans. These loans eventually become
unaffordable to the consumer and result in default and foreclosure.
2
P'Agendas\Agenda Anachments\Agenda Anachmenl$lAgenda Attachments\Agrml.>-Amend 2009\07-06-09 NSP2 Grant Application doc
6/29/2009 DRAFT
HUD data indicates the foreclosure rate in the City of San Bernardino is 11.8% and is
the second highest among municipalities in California. This determination was made by
HUD based on the following: (1) the change in home values as of June 2008 compared
to 2000; (2) the percentage of high cost (or subprime) mortgage loans made between
2004 and 2006; and (3) the unemployment rate as of June 2008. Additionally, for the
year ending 2008 there were 2,997 foreclosed upon homes in the City, while the first
quarter of 2009 reported 802 foreclosed properties for a total of 3,799 for the 15-month
time frame.' The data provided below in Table 1 suggests the distribution of
foreclosures in San Bernardino ranges from a low of 7.9% in Council Ward 3 to a high
of 21.6% in Council Ward 2. This data is depicted in the attached map (Attachment "A")
and shows the number and location of foreclosed residential properties within the City
for the 15-month period through March 31, 2009.
Table 1. Distribution of Current Foreclosures by Council Ward
Foreclosed Citywide Ward Ward Ward Ward Ward Ward Ward
Homes 1 2 3 4 5 6 7
Number of 3,799 680 819 302 328 546 527 597
Homes
% of Homes 100% 17.9 21.6 7.9 8.6 14.3 13.9 15.8
Further analysis of HUD's data at the census tract level underscores the severity of the
foreclosure crisis throughout the City. Utilizing the HUD automated index calculator, the
City was able to pinpoint target areas with high foreclosure risk scores. The
neighborhood assessments reveal conditions that consistently ranked the target areas
at the highest range along the HUD foreclosure risk continuum. These areas are
census tracts 0048.00, 0055.00, 0042.02, 0062.02 and 00740.07 (located in Wards 1,2,
6 and 7 respectively). Each of the targeted neighborhoods garnered a foreclosure risk
score of 20, and vacancy risk scores ranging from 14 to 18. Pursuant to the
announcement, the City has identified an average threshold within the target geography
of 20. Having achieved the highest need within the two need indices, the City believes
it has met the minimum threshold to participate in NSP2.
Furthermore, each of the identified target areas listed below in Table 2 exceed the
minimum threshold requirement of 18 for both Foreclosure Rate and Foreclosure Score.
Closer inspection of these areas reveals they suffer from above average crime rates,
poverty levels, foreclosures, blight, abandonment and absentee homeowners. The
aforementioned neighborhood characteristics coupled with a persistently high
foreclosure rate create the perfect opportunity for the City to take the necessary steps to
intervene through an allocation of NSP2 funds.
1 3.799 foreclosures identified by RealtyTrac as of 03/31/2009 in the City of San Bernardino.
"
j
P:\AgendaslAgenda AnachmentslAgenda AttachmC1ltslAgernla Atta~hments\Agrmts-Amend 2009\07-Q6.09 NSP2 Grant Application doe
6/29/2009 DRAFT
Table 2. HUD Foreclosure and Vacancy Determination indicators
0048.00 170
0055.00 357
0042.02 314
0074.07 120
0062.02 236
.l.v~raej;i'i{239 .
Looking further at the HUD generated data, the average Foreclosure Score is 20, while
the average Vacancy Score is 15.8. Additionally, the average Foreclosure Rate
(estimated percentage of mortgages to start the foreclosure process or be seriously
delinquent within the past 2 years) for the targeted NSP2 areas is 27%. These
determinants suggest the steady continuation of foreclosures throughout the target
areas.
By focusing in on the HUD-provided data, the City identified those areas with the
highest foreclosure and vacancy risk scores, and projected foreclosure rates (above
11.5%) by zip code and census tract. The census tract block groups noted above are
the most in need of intervention with NSP2 funds at this time. As with earlier analysis,
the findings tend to reflect that census tract blocks within Wards 1, 2, 6 and 7 require
the City's immediate attention utilizing NSP2 funds.
Focused Neighborhood Acquisition/Rehabilitation
The presence of High foreclosures and REO properties in particular areas of the City
can provide an intervention and revitalization opportunity on a street-by-street basis.
City sponsored NSP acquisition and rehabilitation efforts could substantially improve
streets and block groups where foreclosures and vacant properties have magnified
existing physical and social blight issues. These areas share many common traits,
including:
· Poorly maintained single family and four unit homes;
· Systemic market failure of investor-owned properties;
· Heightened police and code enforcement activity; and
· Steadily declining property values.
In an attempt to attack these blighting influences, the City is proposing a focused
neighborhood acquisition/rehabilitation strategy with a select group of developer
intermediaries to help address the conditions noted in specific targeted areas. The City
has recently entered into formal contractual arrangements with private developer
partners willing to selectively acquire, rehabilitate or demolish, rebuild and maintain
formerly foreclosed or abandoned properties in designated areas.
4
P:\Agendas\Agenda Attachments\Asenda AttachmemslAgenda AttachmentslAgrmh_Amend 2009\07_lJ6.09 NSP2 Grant Application doc
6/29/2009 DRAFT
Transformation depends not only on removing the physical blight, but also in stabilizing
and securing the neighborhood. Therefore, the program must be complemented by
additional City efforts, including coordination of police and code enforcement efforts to
reduce crime and nuisance activities, investment in public infrastructure and leveraging
resources such as the City's redevelopment funds
While there are literally hundreds of foreclosed and abandoned properties available at
any given time that are eligible for acquisition and rehabilitation funding through NSP2,
the City intends to focus its efforts on specifically defined neighborhoods. In doing so,
this would allow the City to make substantive changes quickly and effectively to address
some of the City's most devastated neighborhoods. It would also simultaneously allow
the City to methodically and strategically reach other neighborhoods with its existing
NSP1 funds so as to address their own unique foreclosure issues identified in the
original NSP application approved by HUD.
Within the recently approved HUD application, the City established a NSP1 target area
map that comprised the highest levels of the following overlapping criteria: the incidence
of subprime mortgages (above 41.9%), foreclosure and abandonment risk (risk scores
of 20), and 18-month projected foreclosure rate (above 11.5%) by census tract. Under
NSP2 the City seeks to target specific zip codes, census tracts, and neighborhoods
within the original NSP1 target area. These subareas include the following locations
identified below and are highlighted in Attachment "B" which show these areas overlaid
on the previously approved NSP1 target area.
Subarea Boundaries Proposed Intervention
Acquisition, rehabilitation and rental under
1 Census Tract professional management to income qualified
0062.02 households
A combination of acquisition, demolition or
2 Census Tract rehabilitation, rental and/or resale to income
0074.07 qualified households
Zip Code 92410 A combination of acquisition, demolition or
3 Include Census rehabilitation and resale to qualified home
Tracts 0050.00 buyers
Zip Code 92410 A combination of acquisition, demolition or
4 Include Census rehabilitation and resale to qualified home
Tract 0042.02 buyers
Zip Code 92411 A combination of acquisition, demolition or
5 Include Census rehabilitation and resale to qualified home
Tract 0048.00 buyers
These subareas were selected based on the need to stabilize blighted communities, the
propensity for continued foreclosure activity, foreclosure score, number of foreclosed
and abandoned properties and the threat of continued blight, crime and nuisance
related activities.
5
P:\AgClldas\Agcnda Attachments\Agenda Attachments\Agcnda Anachments\Agrmts-~end 2009\07.06-09 NSP2 Grant Application doc
6/29/2009 DRAFT
· Within subarea 1 the City has identified an opportunity to participate in the
redevelopment of a 251 unit foreclosed apartment building. The building
is situated on 11 acres that has been foreclosed and remains a blight and
nuisance to the community where it is located.
Should the City be unsuccessful in utilizing funds for this specific site the
resources would be re-targeted to subarea 2 where it is already in a
development agreement with a third party non-profit housing developer.
· Within Subarea 2 there are 25 four-plex apartment buildings representing
100 units of potential affordable housing. This redevelopment project
represents the Cities opportunity to partner with an experienced non-profit
developer to provide quality affordable rental housing for up to 100
families. It would also allow the City to acquire other foreclosed and
abandoned properties within the target area in order to demolish them and
ultimately create better quality affordable housing to income eligible
households.
· Subareas 3, 4 and 5 are opportunities for the City to acquire, renovate
then resale homes to qualified homebuyers. This project entails the City
partnering with development intermediaries that will manage, maintain,
rehabilitate and resell previously foreclosed single-family residences to
homebuyers that qualify under NSP. In certain instances where
rehabilitation is cost prohibitive because of the level of disrepair with the
structure the property would be slated for demolition and future
redevelopment. The City has already negotiated and executed a series of
agreements with intermediary developers that would provide the capacity
for this activity.
Market Conditions
The most problematic aspect of the greater San Bernardino County real estate market
is the continued trend in the number of foreclosed residential properties. In the 2nd
quarter of 2008 lenders filed close to 11,817 notices of default, up nearly 130% from the
year earlier.2 With 6,251 homeowners losing their homes through foreclosure in the
referenced quarter, up nearly 315% from the previous year, the City and its various
housing and redevelopment resources need to play a significant role in helping to
transform its residential neighborhoods.
While the County has witnessed the largest real estate collapse in its history the City
has suffered a devastating blow to its residential real estate base as well. City
foreclosures had grown at a rapid pace for all of 2008, and began to level off by the first
quarter of 2009. Analysis shows the first quarter of 2009 resulted in 802 foreclosures
which was a 20% reduction in bank owned property from the previous quarter.
However, while the City has experienced a reduction in the rate of foreclosed
properties, it anticipates a significant spike in foreclosure activity that will occur over the
2 DataQuick Article April 22, 2009 ~Golden State Mortgage Default Rates Jump to Record HighW
6
PlAgendaslAgenda Attachmerns\Agcnda AtttchmentslAgenda AttadlmenulAgrmrs-Amend 2009\07_06-M NSP2 Grant Application.doc
6/29/2009 DRAFT
next several months due to the removal of the statewide lender foreclosure moratoria.
As the number of foreclosures is anticipated to increase dramatically, the need for City
intervention to help stabilize targeted neighborhoods will also rise.
The median sales price for homes in San Bernardino, California for February 2009 to
April 2009 was $88,000. This represents a decline of 24.8%, or $29,000, compared to
the prior quarter and a decrease of 56.5% compared to the prior year. 3 To stem the tide
of these foreclosures, the City must continue its efforts under NSP1 and expand those
strategies under NSP2 to acquire and renovate these distressed properties.
FACTOR 2 DEMONSTRA TED CAPACITY
City of San Bernardino EDA Representative Projects
The City's recent experience, in the past 24 months, managing development activities
similar to those which it is applying for under NSP2 include but are not limited to
property acquisition, demolition, rehabilitation and providing affordable rental housing.
Projects that have been undertaken involve land assembly, development, financing,
homebuyer education and general affordable housing plan implementation. Some of
the projects the City has overseen in the past 24 months include but are not limited to:
· Initiating the acquisition and demolition of various four-plexes located
within the Meridian Apartment Project. These apartments have been a
problematic and blighting influence on the west side of the City for several
years. Thus far the Agency has successfully acquired nine of the
properties and is looking to purchase the balance of them within the next
several months. There are a total of eighteen (18) four-plex apartments
(seventy-two (72) total units). Demolition has begun on the first nine City
owned properties and upon successfully acquiring the balance of the
properties and demolishing them a suitable developer will be sought to
provide affordable housing.
· Successfully, acquiring twenty three (23) four-plex apartment buildings
(ninety-two (92) units) in the area known as Arden Guthrie, relocating
approximately ninety-two (92) households into new safe and sanitary
housing elsewhere, undertaking the necessary environmental abatement
and demolishing these structures to clear the area for redevelopment
activities to include much needed commercial and retail uses and future
high quality affordable housing.
· The Agency has completed the acquisition of a ten-unit (10) substandard
housing complex and a four-unit (4) complex, relocated thirteen (13)
tenants and demolished the substandard units for future infill housing
development in the City's downtown core.
3 Statistical information identified by Realty Trac as of 05/12/2009 in the City of San Bernardino
7
P\AgC'ndas\A!!enda Auachmenu\Agenda Attachments\Agenda Attachmenls\Agrmts_Amend 2009\07_06_09 NSP2 Gran! Applicalion doc
6/29/2009 DRAFT
· Assisting a developer in getting planning design approval for a proposed
senior housing project in the City and assisted with the preparation of a
. HUD 202 grant applications, resulting in an $11.9 million grant award for a
new seventy-five (75) unit, 64,000 square feet affordable senior residential
complex.
· Completed the development and issued a certificate of occupancy for a
ninety (90) unit senior housing project consisting of approximately 75,000
square feet.
· Currently administers a home buyer education contract with Neighborhood
Housing Services of the Inland Empire ("NHS"). For the Fiscal Year
ending 2009, NHS trained approximately 1,200 potential homebuyers.
Approximately 300 of these participants are considered strong home
owner candidates as this group either presently lives in or works in the
City of San Bernardino.
The City and its housing staff have several years of demonstrated experience in the
management of activities required of NSP. The following highlights the skills and
qualifications of City Housing personnel who will have day-to-day functional
responsibility for implementing and administering NSP funds. An organizational chart is
attached to this application as Attachment "C".
Director of Housing and Community Development
Carey Jenkins presently serves as the Director of Housing and Community
Development for the City of San Bernardino Economic Development Agency. In this
capacity he is responsible for all housing preservation and production activities including
the design and implementation of the City's new comprehensive housing strategy. Prior
to his appointment, Mr. Jenkins served for six years with the Community
Redevelopment Agency of the City of Los Angeles where he was a redevelopment
project manager for the South LA Region. While at CRA/LA he also served as a senior
finance officer where he structured numerous housing and community development
transactions. Prior to his work with CRA/LA, Mr. Jenkins served five years as the
Manager of the Industrial Development Authority of Los Angeles where he led both the
industrial development and non-profit 501 (c)(3) bond programs on a city-wide basis.
During his career, Mr. Jenkins has successfully managed the financing and
development of over $500 million in housing, economic development, public purpose,
and community development projects.
Mr. Jenkins is a Southern California native where he received his Bachelor of Arts
degree from UCLA and Masters of Public Administration, with honors, in Public Finance
and Policy Analysis from California State University, Long Beach.
Project Manager
Fernando Portillo has previously worked with the County of Los Angeles Community
Development Commission as a Project Manager in the housing development
department, the Community Redevelopment Agency of the City of Los Angeles as a
8 6/29/2009 DRAFT
P \Agendu\Agenda Attachments'Agenda Al1achmenll\Agenda AUlchmenls\Agrml5_.I\.mend 2009\07_06_0Cl NSP2 Grant Applicalkln doc
Housing Finance Officer and the Housing Authority of the City of Los Angeles as an
Assistant Director in Asset Development. Through his tenure in the above positions,
Mr. Portillo has accumulated approximately 10 years of experience in affordable
housing development and finance for the public sector, including the preparation of
RFP/RFQ's for several multi-family and senior affordable housing projects, underwriting
of government agency subsidies for single-family, senior, special needs and multi-family
projects, structuring the financing for several proposed and completed affordable
housing projects, and drafting and negotiating Disposition and Development
Agreements and loan agreements for a variety of affordable housing projects. Mr.
Portillo has also worked in the private real estate sector, having previously worked for
two homebuilders in the Las Vegas area and a national, professional real estate
consulting firm in Los Angeles. In addition Mr. Portillo has worked for the previous four
months with the City of San Bernardino Economic Development Agency ("EDA") to
assist with the implementation of its NSP housing programs.
Mr. Portillo received a Masters of Business Administration from the Anderson Graduate
School of Management at UCLA and a Bachelor of Arts in economics from Occidental
College.
Asset Manager
Samuel Hughes, a consultant to the City, provides the Director with support in
administering its NSP program. Mr. Hughes is responsible for overseeing development
partners (intermediaries) to make sure they adhere to contractual and regulatory
Program objectives. Mr. Hughes will coordinate efforts amongst intermediaries,
contractors, real estate agents and brokers, community based organizations and other
citizen groups to ensure program objectives are meet. As a former broker/owner of a
private real estate company, Mr. Hughes has redeveloped and advised on the
redevelopment of numerous affordable and market rate housing rehabilitation projects.
And as a former project manager for a nonprofit affordable housing developer Mr.
Hughes brings a wealth of information, knowledge and experience to the field of real
estate and community development.
Mr. Hughes' background as a real estate and mortgage broker, as well as that of a
certified construction manager coupled with his 14 years experience in the real estate
field helps to provide the Agency with the capacity necessary to administer both the
NSP1 and NSP2 Programs.
Mr. Hughes is a graduate of UCLA and holds certificates from the Real Estate Finance
and Development Program at the Lusk .Center for Real Estate at USC and the
Construction Management Certification Program at California Polytechnic Pomona
University.
Administrative Analyst
Shannon Johnson began working with the City of San Bernardino Economic
Development Agency concurrent with attending her Masters in Public Administration
Program in January, 2008. Ms Johnson currently serves as an Administrative Analyst in
the Housing department, focusing her efforts on the Beautification Grant, Rehabilitation
9 6/29/2009 DRAFT
P:\Agendas\Agenda AnachmentslAgenda AttachmentslAgenda Attachments\Agrmts-Amend 2009\07-06-09 NSP2 Grant Application,doc
Loan, and Mobile Home Grant programs and the Residential Receivership Program.
Ms. Johnson has also been instrumental in providing support to the Agency's Director of
Housing and Community Development and Project Manager on the NP. Ms. Johnson
managed the procurement process for services instrumental to the Program's eventual
success; including writing and issuing Request for Qualifications and conducting panel
interviews for Home Inspector I Cost Estimators, Appraisers, and Environmental
Services firms and recently, Ms Johnson was appointed the Agency's lead contact on
the acquisition and demolition of 18 blighted and dangerous four-plex apartments.
Development Intermediary Partners
In addition to staff experience, the City has partnered with five intermediaries to help
facilitate the rehabilitation efforts of both NSP1 and NSP2. Each of our partners was
selected through an open and competitive procurement process and possess the
qualifications necessary to achieve the objectives the Agency has identified for
stabilizing the specific neighborhoods identified in this proposal. Each of the
intermediaries is experienced in rehabilitating abandoned, vacant, foreclosed properties
in blighted areas. The Intermediaries chosen will manage, maintain, rehabilitate and
resell previously foreclosed single-family residences to homebuyers that qualify under
NSP. For each property acquired by the City the selected Intermediaries will be invited
to submit proposals for rehabilitating, managing, marketing and reselling the property.
These Intermediaries will be responsible for managing the property from the moment
they enter into a contract with the City until the time they resell the property to a
Qualified Homebuyer. Below is a brief description of each of the City's qualified
intermediaries.
(1) The Nunez Team has extensive knowledge and over 20 years experience
in the acquisition of single family residences for the purpose of
rehabilitation and resale. During this time the Nunez Team completed
over 150 projects. Having worked with both private investors and local
government municipalities the Nunez Team has garnered the respect in
the development community within the neighborhoods the City will target
with NSP2 Funds.
(2) Jamboree Housing in partnership with Stratus Development together have
over 20 years of housing development experience and a combined market
value just under $1 billion. This development team has over 4,700 units
under management. As a nonprofit affordable housing developer,
Jamboree posses the skill sets necessary to help the City achieve its goal
of stabilizing neighborhoods by providing the necessary mission-driven
compassion for low and moderate households while Stratus, a for profit
developer, brings added fiscal capability along with its 15-year history of
real estate development and construction expertise.
(3) ANR Industries is among the most qualified companies in Southern
California to redevelop distressed residential neighborhoods, particularly
when these efforts involve rehabilitating bank-owned properties. Since the
company's inception in 1995, ANR's primary focus has been working in
10 6/29/2009 DRAFT
P:lAgcndas\Agenda AttachmcntslAgcnda AttachmentslAgenda Attachments\Agrmts-Amcnd 2009\07.{)6.()9 NSP2 Grant Application.doc
areas that have been negatively affected by adverse economic conditions,
and they have a long history . of rehabilitating foreclosed properties in
multiple roles: fee-based general contractor; investor, developer; and
partner to local government and nonprofit organizations. ANR's breadth of
experience with a varied client base has allowed them to develop
significant expertise assessing the most cost effective rehabilitation
repairs, from budgets of less than $10,000 to over $100,000 per unit.
Since 2004 ANR has completed over 43 rehabilitation projects.
(4) GFR Enterprises has provided foreclosure sale and maintenance service
to lenders in Southern California since 1976. With over 33 years of
experience GFR Enterprise is positioned to effectively develop any of the
abandoned foreclosed homes. Having previously partnered with the City
to develop affordable housing, GFR posses the tract record to supply the
City with a housing product that conforms to all City building standards.
GFR Enterprises has redeveloped over 400 units and continues to partner
with local municipalities as they attempt to achieve affordable housing
goals.
(5) Mary Erickson Community Housing (MECH) is a non-profit corporation
and a designated Community Housing Development Organization
(CHDO), serving South Orange County and the greater Inland Empire,
including the City. of San Bernardino. Formed in 1991, MECH owns and
operates five apartment buildings, housing more than 80 lower-income
family members. MECH's experience developing and managing affordable
housing will assist the City in achieving its goals and objectives as outlined
within this proposal. MECH will be primarily responsible for addressing
the NSP requirement associated with providing housing opportunities for
individuals and families at no greater than 50% AMI. This will be
accomplished through the City's acquisition, rehabilitation and rental
program.
Each intermediary will be responsible for securing the property, maintaining utilities
service, establishing a scope of work, finalizing a budget and a project timeline,
conducting weekly on-site project inspections, managing relationships with all sub-
contractors, verifying permits and City compliance, administering lien releases,
advertising the homes for sale through various local media, conducting mass mailings
targeted at potential homebuyers, and partnering with NHS to ensure that prospective
Qualified Homebuyers attend a City approved homebuyer education course.
Given the intermediaries' collective ability to execute on the above mentioned program
activities coupled with City's extensive staff experience in redevelopment, as well as the
completed and ongoing affordable housing projects being overseen, the City is
confident it possesses the capacity to achieve the objectives of NSP2 within the
program period time frame.
11
P,lAgendulAgenda Attachments\Agenda AnachmentslAgenda AttachmentslAgnnts-Amend 2009\07..Q6..09 NSP2 Granl Application.doc
6/29/2009 DRAFT
FACTOR 3 SOUNDNESS OF APPROACH
By acquiring and redeveloping abandoned foreclosed homes and other residential
properties the City will achieve its goal of arresting the decline in home values and
begin stabilizing neighborhoods that have disproportionately suffered from
abandonment, blight and neglect. Given the scope of the foreclosure crisis, the City has
opted to transform neighborhoods by targeting its resources in the hardest hit census
tracts within the City. In accordance with the Recovery Act, the City plans to use NSP2
funds as follows:
(1) Rental housing opportunities for households at or below 50% AMI,
(2) Acquisition, rehabilitation and resale of single family homes, and
(3) Acquisition and demolition for future development.
In adhering to program stabilization goals and objectives, the City will diligently pursue
the acquisition of foreclosed homes within the specific target areas identified by HUD to
stem the tide of foreclosures and prevent the further decline of home values. . With a
current foreclosure rate of 11.8% as identified by HUD and an average foreclosure risk
score of 20 within the target area the data clearly indicates the City would benefit by the
use of NSP2 funds. The data further suggests that by targeting the NSP2 funds in the
identified census tract block groups, the City will be able to utilize these funds consistent
with Section 2301 (c)(2) of HERA.
Current data points to an upcoming wave of foreclosures within the zip codes of some
of the City's proposed NSP2 target areas. The information provided below attempts to
identify the potential number and magnitude of the problem and helps to identify
potential targeting opportunities for Program funds.
Census Tract Zip Code REOs. Pre-Foreclosure Total Distressed
Properties
0042.02 92410 268 187 455
0055
0074.07 92404 548 401 949
0062.02
0048 92411 488 239 727
Total 1,304 827 2,131
A. PROPOSED NSP2 PROGRAMS
1. Rental Housing Opportunities for Households at or below 50% AMI: This
program allocates $2,400,000 of NSP2 funds for the provision of rehabilitated
affordable rental housing. This complies with and slightly exceeds the NSP2
requirement that at least 25% of the grant be allocated to address the housing needs
of individuals and households whose income does not exceed 50% of AMI. This
activity will be carried out by MECH under a contractual relationship with the
Agency. MECH was identified for this activity through their response to a
competitive notice of funding availability application process carried out by the City in
the fall of 2008.
12
P:\Agt'ndasIAgenda Attachment!\A~ndl Attachmenu\Agenda Att.chmentslAgrmts-Amend 2009\07_06-09 NSP2 Grant Application doc
6/29/2009 DRAFT
The City plans to allocate money to complete this type of redevelopment within
Subarea 2 (census tract 0074.07). This area of the City suffers from above average
unemployment, poverty, crime and a significant number of foreclosed or abandoned
properties. The Agency has identified the area bounded by Argyle Avenue, Guthrie
Street, 18th Street and 20th Street, plus the row of four-plexes immediately to the
east of Guthrie Street on Sunrise Lane (please see Attachment "D" for a map of this
area) where it intends to start acquiring foreclosed four-plexes for the purpose of
rehabilitating them and renting them to households at or below 50% of AMI or
demolishing them and holding them for future redevelopment opportunities. The
Agency plans to use funds from NSP2 to rehabilitate and operate selected four-
plexes in this area, primarily those along the north side of 19th Street and those on
Sunrise Lane immediately east of Guthrie Street and to demolish those structures
that are no longer habitable. The Acquisition and rehabilitation component will be
carried out by MECH whereas the acquisition and demolition strategy will be
handled by the City.
The urgency to implement the Rehabilitation Program is evidenced by the
destructive real estate market and community conditions currently affecting the
neighborhood mentioned above: Within this neighborhood, there are 71 parcels,
most of them with four-plexes on them and the others vacant lots. Of these parcels,
twenty-two are currently in foreclosure. Also impacting the community is the high
crime rate in the area. From January of 2007 through March of 2009 there were
approximately 356 crime occurrences in the neighborhood and surrounding area,
which again is significantly higher than the City average.4 Given the urgency of
community conditions, the opportune availability of funds and current real estate
market prices, there is now a perfect window of time in which to mitigate the
negative conditions currently affecting neighborhoods such as the one being
targeted with NSP2 funds. This project aims to purchase 25 four-plexes (100
dwelling units) for rehabilitation purposes over the three-year project period. The
project budget for this segment of the program calls for $2,400,000 in NSP2 funding.
Below is a preliminary budget for this component of NSP activities and does not
consider the proposed demolitions to take place in the immediate area which are a
companion to the overall acquisition and rehabilitation strategy.
.. Based on City of San Bernardino Code Enforcement and Police Department data
13
P:\Agendas\Agenda Attachments\Allenda Attachments\Agenda Anachments\Agrmts_Amend 2009\07-06-09 NSP2 GTant Application doc
6/29/2009 DRAFT
r .
B d t A
..ti /R h b'litation and Rental
Pre Immarv u ]Qe - CQUISI on e a I
Funding Source Acquisition
- Rehab/RentalS
Current Funding
NSP1 $2,100,000
20% Set Aside $1,000,000
Other
Subtotal $3,100,000
Future Fundina
NSP State $1,025,000
NSP2 $2,400,000
CDFI $850,000
20% Set Aside
other
Subtotal $4,275,000
TOTAL $7,375,000
2. Acquisition, Rehabilitation and Resale: This program allocates $4,300,000 of
NSP2 funds for the acquisition and rehabilitation of single-family homes through
participating developer/contractors (intermediaries). These intermediaries have been
retained through a Request for Proposals (RFP) process and have been vetted by
Agency staff.
The purpose of the acquisition, rehabilitati.on and resale program is to purchase and
rehabilitate foreclosed homes and residential properties for sale to income qualified
home buyers. The areas of greatest need which will benefit from this activity will be
those areas that have high foreclosure risk scores according to HUD, show signs of
neighborhood degradation and need of revitalization and have homes that would be
affordable to purchase for those households that have an income equal to or less than
120% of area median income. The action plan required to fulfill this objective includes
the following steps:
1. The City would purchase foreclosed property at or below the regulated discount.
2. The City would contract with one of its selected intermediaries to rehabilitate,
maintain and market the single-family unit for re-sell.
3. The rehabilitated property would then be resold to income qualified buyers.
The City proposes to implement this strategy within census tracts 0048.00
and .0042.02. The anticipated project includes areas with foreclosure scores of 20.
5 TOTAL Development cost per fourplex =$295,000 (acquisition, relocation, rehab, carrying costs) or $7,375,000 for the entire
acquisition rehabilitation and rental component
14
6/29/2009 DRAFT
P\Agendas\Agenda Anacbmenls\Agenda Anacnmenls\Agenda Attaehmems\Agrmts-Amend 2009\07..{l6..1)9 NSP2 Grant AppliclI.liondoc
These areas are plagued by abandoned and foreclosed homes in need of rehabilitation
and are bounded by 5th Street, 9th Street, Mount Vernon and the 215 Freeway which
encompasses one targeted area while the other is bounded by Macy Street, 9th Street,
Porter and Mount Vernon which reflect the boundaries of the second target area.
In focusing on these areas the City is adhering to the HUD requirement of "Deep
Targeting," and is prepared to use these and other City resources to reduce the number
of foreclosed properties and revitalize these neighborhoods with new home ownership
opportunities. The following is a preliminary budget for the acquisition, rehabilitation
and resale program.
Preliminarv Budaet - Acauisition/Rehabil
Funding Source Acquisition
Rehab/Resale
Current Fundina
NSP1 $3,700,000
20% Set Aside $1,000,000
Other
Subtotal $4,700,000
Future Fundina
NSP State
NSP2 $4,300,000
20% Set Aside $1,000,000
other
Subtotal $5,300,000
TOTAL $10,000,000
itation and Resale
3. Acquisition, Demolition and future Redevelopment: This program is designed to
address abandoned or foreclosed upon residential units in physical conditions too costly
for rehabilitation. With a budget of $1,400,000, this program will allow for the acquisition,
demolition and future redevelopment of acquired sites. One of the leading possibilities
for the reuse of demolished parcels might be a quality senior housing complex within
Subarea 2 (census tract 0074.07). Another opportunity might be single family home
ownership opportunities for income qualified buyers once the market stabilizes and
demand for new housing returns.
While the opportunities for redevelopment are years into the future, now is the optimal
time to start acquiring properties in this area given the availability of funds, favorable
market conditions and the urgency of the foreclosure problem. Within Subarea 2
(census tract 0074.07) the City has identified up to 27 blighted and dangerous four-
plexes for possible demolition. Please see the preliminary budget that identifies the
funds the City is allocating for acquisition and demolition activities. Based on current
market prices, the aggregate budget identified below could allow the City to acquire and
demolish up to 32 blighted and dangerous residential properties that could be
redeveloped at a future date:
15
6/29/2009 DRAFT
P\Agendas\Agcnda Anachmenu\Agenda Attachments\Agcnda Anachmcnts\Agrmu-Arnend 2009\07-06-09 NSP2 Grant Application doc
Preliminarv Budaet - Acauisition and De
Funding Source Acquisition and
Demolition
Current Fundina
NSP1 $600,000
20% Set Aside $1,000,000
Other
Subtotal $1,600,000
Future Fundina
NSP State
NSP2 $1,400,000
20% Set Aside $1,000,000
Other
Subtotal $2,400,000
TOTAL $4,000,000
molition
Administration: Administration of the program will not exceed 10% ($900,000) of the
NSP award and 10% of program income. It is anticipated the City will utilize its existing
platform of in-house staff and contract consultants originally procured under NSP1 to
implement efforts associated with NSP2. Additionally, and in keeping with NSP1, the
delivery platform already established to expend NSP1 funds will be used for NSP2. The
only significant differences are the funds from the two programs will be tracked
separately and NSP2 Funds will be targeted to and used exclusively in the 5 Subareas
as specified in this application.
Table 3 illustrates the various income groups benefitting from specific NSP2 activities.
All activities will be performed within the NSP required time frame with start dates
varying by proposed activity.
The proposed outcomes from the City's use of NSP2 funds over the project period are
estimated to produce in excess of 160 units of affordable housing (100 acquisition,
rehabilitation and rental; 41 acquisition, rehabilitation and resale; and 19 acquisition and
demolition). The affordable housing will serve to stabilize neighborhoods that have
disproportionately suffered from blight, neglect, abandonment, vacancy and
foreclosures. The production numbers stated below generally take into account NSP2
and other funds that are identified in Table 4. Should the City allocate an additional
amount of its own resources (for example, redevelopment agency 20% housing set
aside funds) over and above what is identified this would have the effect of increasing
the overall number of properties positively impacted by the Program.
16
P:\Al!cndas\Agenda Anachments\Agend. AnlKhmerrts\Agenda Anachments\Agrmts-Amend 2009\07-06-09 NSPl Granl Applic.lltiondoc
6/29/2009 DRAFT
Table 3. Housing Units Expected to be Produced by Area Median Income
And Project Timeline
. ,.....-....>.....-,.._,.,....,..
.... '...,.................-.."..",.,'
"',.-'0,'" __.....-"
Income .- -'" ":'0 :-, ::~,,:'.s'~j:o/-..,,:.' ,-- -'-.
Proposed Activity .. UnitS Project start DatelE.1'!~:tP~.
. Group ." '.-"',:'.-,-:-,
. .. I ;:-;;:!:~"s'_::~;:i.ik"y;gfL:
.. .. . . < ....
Start Date: Within 90 days of
Acquisition, rehabilitation approval by HUD.
S 50 AMI and rental of foreclosed or 100
abandoned multi-family End Date: Within two years
properties. after initiation of construction
and/or rehabilitation.
Acquisition, rehabilitation Start Date: Within 90 days
from approval by HUD.
and resale of foreclosed
upon or abandoned single- 41
End Date: 3 years from
family homes. approval by HUD.
S 120% of
AMI
Acquisition and demolition Start Date: Within 90 days
from approval by HUD.
of foreclosed upon or 19
abandoned single-family End Date: 3 years from
homes. approval by HUD.
Total Proposed Affordable Housing Units: 160
B. DEFINITIONS AND DESCRIPTIONS
Bliqhted Structure: The City of San Bernardino uses the State of California's definition
of blight as found at California Health and Safety Code Sections 33030 and 33031.
Affordable Rents: For NSP2 assisted rental activity, "affordable rents" shall be defined
as 30% of the household's adjusted income, less utility allowances as adopted by the
County of San Bernardino Housing Authority for the Section 8 program, as appropriate.
HUD's Fair Market Rent Schedule for the Riverside-San Bernardino-Ontario
metropolitan area will be used. Should any gap be present, funds for this gap will be
required from other sources of funding.
Ensurinq Continued Housinq Affordabilitv of Rental Housinq: To ensure continued
affordability of NSP2 assisted rental housing, the program will include an annual
certification of occupancy including adequate verifiable documentation of income
17 6/29/2009 DRAFT
P:\Agendas\Agenda Anachmenls\Agenda Attachments\Agenda AnachmentslAgrmts-Amend 2009\07-06-09 NSP2 Grant Application dO(:
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. This
is consistent with other multifamily and senior housing developments the Grantee has
subsidized in the past under California Redevelopment Law.
Ensurina Continued Housina Affordabilitv of Ownership HousinQ: To ensure continued
affordability of NSP2 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. 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 Califomia CalHome
Program.
Housina Rehabilitation Standards: NSP2 assisted rehabilitation activities will be
conducted in accordance with all local, state, and federal codes, statutes, and
regulations and/or homeowner association or mobile home park rules, and historic
preservation requirements, as applicable, and will comply with California Green Building
Standards Code, as incorporated in Part 11 of the California Code of Regulations, Title
24, also known as the California Building Standards Code. Furthermore, grantee has
established building standards for all intermediaries to follow as a part of this program.
These standards were created by a third-party engineering and construction
management firm and adhere to all of the codes, statutes and limitations identified
above.
C. Low INCOME TARGETING
Low-Income Statutorv Reauirement: At least $2,400,000 or approximately 27% of the
total award, under the NSP2 will be allocated to providing housing opportunities to
households at or below 50% of AMI. Properties will be targeted for acquisition based
upon, among other things, those multifamily housing projects with a history of public
service calls, documented conditions associated with poor management and those sites
that are generally considered to be a blighting influence on the surrounding community.
The grantee's approved and qualified affordable housing developers intermediaries
would have the opportunity to use these funds to acquire rehabilitate and manage such
properties under a new professional management agreement.
D. ACQUISITIONS & RELOCATION
Demolition or Conversion of Low- and Moderate-Income Housina: Based on current
estimates, Grantee anticipates demolishing or converting no more than 30 dwelling
units that currently benefit households at or below 80% of AMI as a direct result of
NSP2-assisted activities.
Grantee will generate preliminary title reports on those properties it intends to acquire
looking for, among other things, any deed restrictions associated with affordability.
Should there be deed restrictions, Grantee will arrange for those restrictions to remain
after the structure is rehabilitated and new occupants for the property are identified.
18 6/29/2009 DRAFT
P:\Agendas\Agenda AttachmcnlslAgenda Atlachmenls\Agenda AttachmentslAgrmts-Amcnd 2009\07-06-09 NSP2 Grant Applicaliondot
In the unlikely event the Grantee identifies a property that is beyond repair that must be
demolished that also has afford ability covenants tied to it, the City will make note of this.
Next, Grantee will either: (1) attempt to replace the demolished structure with a new
structure on the same site with afford ability covenants that are at least as restrictive as
the original, or (2) identify a different residential site to apply those affordability
covenants.
Number of Proposed Affordable Housinq Units to be Produced: Table includes the
number of NSP2 affordable housing units Grantee estimates can be produced over the
term of the program for households whose incomes do not exceed 50% of AMI and
120% of AMI, respectively.
FACTOR 4 LEVERAGING OTHER FUNDS AND REMOVAL OF SUBSTANTIAL
NEGA TIVE EFFECTS
The purpose of the NSP is to assist in the revitalization of neighborhoods through the
acquisition and redevelopment of foreclosed properties that might otherwise become
abandoned and/or is a source of blight within their communities. The NSP funding will
be leveraged with other available funding sources to protect neighborhoods, stimulate
the City's economy and provide safe, sustainable, and affordable homes. The table
below outlines the use of other available funds in connection with Program
implementation and administration over the next 3 years. None of the public resources
allocated to this program are derived from federal sources other than the NSP project
budget.
Table 4. Summary of Funding Activity and Proposed Number of Units Created By
NSP2 and Units Created by all Other Funding Sources
CITY OTHER PRIVATE # UNITS
ACTIVITY NSP2 PUBLIC FUNDING TOTAL # UNITS ALL
FINANCING NSP2
FUNDS (/ocal&NSP1 J (CDFI) FUNDS
(a.) Homebuyer
Assistance $300,000 $300,000
(b.) Acquisition
Rehabilitation
&Rental $2,400,000 $4,125,000 $850,000 $7,375,000 100 100
(c.) Acquisition
Rehabilitation &
Resale $4,300,000 $5,700,000 $10,000,000 41 95
Id.1 Demolition $1,400,000 $2,000,000 $3,400,000 19 32
Ie. I Administration $ 900,000 $ 300,000 $1,200,000
TOTAL $9,000,000 $12,425,000 $850,000 $22,275,000 160 227
19
P:\Agendas\Agenda Anachments\A~nda Anachments\Agenda ^nachments\Agrmts-Amend 2009\07-06-09 NSP2 Gram Application doc
6/29/2009 DRAFT
Insert rubric information here.
Removal of substantial negative effects - Le. demos at 19th and Sunrise language.
The current foreclosure crisis has created numerous negative effects within the City.
Nowhere is this seen more than in Subarea 2 (census tract 0074.07). This area is
dominated by four-plex apartment complexes with a history of absentee ownership.
Thus far the City has identified as many as 27 foreclosed properties that are in various
stages of disrepair. Many of these properties are foreclosed and are so poorly
maintained that a number of them have been targeted for demolition by the City. Those
that remain will be acquired by a third party developer that is under contract with the
City to provide housing to those whose income is no greater than 50% of AMI.
The City anticipates that by conducting a strategy of limited acquisition and
rehabilitation of selected properties and demolishing the remaining non-viable housing
stock this area will be poised for a positive turn around. This will allow the
neighborhood, which is predominantly populated with single family residences and a
newly built elementary school, to move beyond the current negative effects caused
directly by the existing poor quality four-plex housing that has experienced complete
market failure and is plaguing this area of the City. This will also have the positive effect
of lessening the drain on the City's resources through lowered public service calls,
health and safety violations and related code enforcement activities.
In addition to the immediate benefits brought about by rehabilitation and rental to
income qualified residents under the singular ownership of a qualified non-profit owner,
the City has long-range plans for the parcels identified for demolition. On the parcels
that are scheduled to be demolished, the City proposes to create housing opportunities
for both low-income seniors and moderate-income first time home buyers. Based on
initial analysis, the City estimates that as many as 70 units of affordable senior housing
could be constructed and up to 40 units of new single family residential housing for
moderate income, first-time homeowners could be built over the next 5 to 7 year period.
This proposed housing production is based on the available acreage that could be
made available, current zoning that allows for this type of housing and the local political
will that is supporting such a change to this area of the City. A site map of the area is
attached to this application as Attachment "0".
FACTOR 5 ENERGY EFFICIENCY
Transit Accessibilitv
The City is aware of the importance of public transportation and its role in preserving
affordability. The location of the City's redevelopment projects in relation to public
transportation are a high priority to the City. To this end, the opportunity to allow
families to reduce household expenditures by choosing to live in neighborhoods with
lower transportation costs because they are located near public transit is a critical
component of the City's overall redevelopment plan.
20
P\A~ndas\Agenda Altachments\Agenda Anachments\Agenda AttachmentslAgrmts-Amend 2009\07.06-09 NSP2 Grant AppliclI.tlon,doc
6/29/2009 DRAFT
In support of this policy, priority will be given to those properties that are within Yo mile of
public transportation. The public transportation option will be in the form of bus service
provided by OmniTrans, the public transportation system serving the greater Inland
Empire area.
The benefits of this strategy are enhanced by the fact that many of the local bus lines in
the City have drop ofts at the station that serves as the terminal point of the Los
Angeles-San Bernardino Metrolink commuter train system that services residents
residing in the greater Inland Empire with Los Angeles, the largest employment center
in all of Southern California. This line also has direct links to Orange County which is
another major employment hub for the region.
Green Buildinq
In achieving its goal of providing quality affordable housing, the City plans to direct
intermediaries to adhere to green building standards which are consistent with HUD
guidelines. Materials installed shall be of such kind and quality to ensure that the
dwelling will provide acceptable durability, economy of maintenance and adequate
resistance to weather, moisture, corrosion and fire. Furthermore, the City may request
evidence of a material's compliance with the requirements of the structure's plans and
specifications and these standards. Generally, product labels are considered acceptable
evidence. The City will further require that the intermediaries carry out a durability
evaluation or conduct a building assessment to determine if the materials to be used
comply with any green building strategies.
To guide this process, all intermediaries will be required to adhere to the City's building
standards that were developed specifically for NSP rehabilitation projects. These
standards were created by a third party engineering and construction management firm
and addresses Green Building protocols endorsed by the United States Green Building
Council. A synopsis of the green building components has been attached to this
application as Attachment "E." . The full document with all City NSP building standard
components is available upon request.
Sustainability discussion to be placed here.
Demolition and Salvaqe/Reuse
Intermediaries shall make salvageable materials from any project available for reuse
prior to demolition. It shall be the responsibility of the intermediaries to notify
deconstruction/salvage companies and to recover the maximum amount of salvageable
designated recyclable and reusable materials prior to demolition. Recovered or
salvaged materials may be given or sold from the premises where they were recovered
or salvaged. Often times they may be removed to reuse warehouse facilities for storage
or sale. Title to reusable or recyclable materials forwarded to the operator of a recycling
facility, landfill, or other disposal facility will transfer to the service provider upon
departure of the materials from the site.
21
P'\Agendas\Agenda Attachments\Agenda Anachmems\Agenda Attachmenl5\Agrmts.-Amend 2009\07..Q6.Q9 NSP2 Grant Application doc
6/29/2009 DRAFT
To facilitate this process, the City has procured a pool of demolition contractors that will
adhere to the proscribed salvage/reuse standards established by the City. These
standards will be a part of the demolition contractor's contractual obligation.
Neiahborhood Transformation
The City's NSP2 activities are consistent with an established comprehensive multi-
jurisdictional plan that addresses economic and housing revitalization. The Inland
Valley Development Authority (IVDA) and participating jurisdictions, including the City,
have entered into an agreement whereby jurisdictions have agreed to administer IVDA's
Low and Moderate Income Housing Funds to increase and improve the communities'
supply of low and moderate housing available at affordable housing costs to persons
and families of low and moderate and very low income households. IVDA is a joint
powers authority comprised of the Cities of Colton, Loma Linda, San Bernardino and the
County of San Bernardino (the "County"). The IVDA was formed in response to the
federal government's decision to close the Norton Air Force Base. Under the California
Redevelopment Law (CRL), specific authority was granted to these jurisdictions to form
a redevelopment project area within the territory surrounding, adjacent, or in proximity to
the Norton Air Force Base.
Pursuant to the current IVDA affordable housing program, the 20% housing set-aside
funds are transferred by the IVDA to the member agencies, who in turn use these funds
for specific affordable housing development activities either within the portion of the
IVDA Project Area situated within each of the member agency's jurisdiction or
elsewhere in the territorial jurisdiction of the member agency. Each member agency
provides the IVDA with an annual written report on the member's use of such affordable
housing funds.
Place information concerning the Agency's redevelopment project areas here.
22
P:\Agendas\Agendll Attachments\A!!enda Attachmmts\Agenda Anachments\Agrmts-Amend 2009\07.06-09 NSP2 Grant Application doc
6/29/2009 DRAFT
"
"
~!
~i
~I
"~':;''':6';"
1~...,
o
/
USl'lJN'RO
'OOT>!'LLBWD
r
,,~ .,'
l'''~~'
0'''-:
..';"
t';i
i.
L.
~."",, lILVO
~i
t / ..o.R.,i"., ~~.~--
r f
'/
;I
~i
~--i-__
. I,
UN....N.ftO.NO... ,~
, "
I ,.
, ...j.~-
<
o
~i
, ..
.,
>>
~!
BI
~!
"
,
I
;'
..~~.._~~2.---"., ~
ATTACHMENT "A"
/1
...~. II" ( __
,~
~~~..
-"~.~
'I~
Legend
r---J.Wwd1.l689Rql"'""'l
r--.3V&d~l~~~l ",t.
~~~~j :::::::Zl.'"s'Y'.:
r:::J Wwd5(546~r-' :'~:~~-~I.~::i~-~~
[~~J Wwd 6 (527 ",-,"",l . . 'e<
[=-~JV\Wd 7 (59; ~.) , ~~',;~:t~{:::'~"-'~'id: ,';
""""'8JCRm'''''
A*6Igrw.:Aprl2O,2OGJ
RlllrP.'Q'SDiltIlMl'DllIHrllllMll
""",.hD_
",.. 20H .ut.lllltd;
ClydS. ........sw.
Total Properties: 3,799
Data Source: RealtyTrac'
\'b
'.{''l-l'
'.~';.
OR"N'~OTRD
"
i'
.
J
o
,
UN....URO....A""
:;1
"
.
,.
,.
ii
!~
::i
"
~i
'--"[
'ti
"
'r~
'0
,"
'~
~
,
'--
,I
;%~-
"-""c--.("+;.'
4-......
'"
City of San Bernardino
Properties foreclosed upon from January 1st, 2008 to March 31,2009
I
--
~~
~
}},.
\~
,
, I _r-
,- I. ~
~
_ww ... 5
'I --.,. '"" 0
If Of ;
) Ii- ).!I ~
t,., I 1 ;}
lll~k ,.,-!-
---"i
."
~ :..-r;l. Ii I~~~~? 1. L " .~. ,
< !,::' - (3 ....,.;.; i~: ~~.. .,
~_ ~ ~ i:~:f < ~;tri~F <<~ _1 1_=-=
._,_ I, i 1<, ~~J :If- < '~'jTXLi
...."'NJII I L..M&\L.. "",,,~-,-,~,,,',C' 'J~,:~:- --
-.:.- .. iE ~_NUl a.w_
!.J -~:-< '-':--,>, .LOG 0
, -<' < <i-- ,< < << ~
1:' <" -1-;,' <.. ~ li'-
~ .; "" DO _,:,;',':.":_ ,:;t'~':H:"'~,::_:_, DO ~
.~ _. . g ,n I <:~ <<,! ','.>~ I <,~;
~ ~ ':0, ..., .. Y ~.: ...~;~lp ,_' r
~ <. :c; :,. . ..' < . <." . . _ ~
j'~'(~: ~ ":, (,<~. =~' . '<'.~ 11~1~
_ . -=-i ..... ~ < c~:]
/~ ,".!~
/: v' ~~
" -
.' I, ... C
1U....... !
"7 I, _ i
U
3
,
'\.
~"V\cI3Ili"\...
I
T
/
u
-
8
I
I
"
i
"
!I~t .'?l1 ...
E ,..J I!l ~
l IV
..- I /
wi .m, ~
r
\- ~
l :~
~
----
, -
~
---"
z
o
z
.
w
>
~
~
~ "
. ~
;;. .
~ 8. lr
'51 III t
III W ~ OlIQ
~ ~ ~ ~ i~
~nD-
~!J.
1
~
..,...,,~
~
~
ca
J:
0
-
ca
c:
0
.-
-
ca
N
.-
c:
ca
...
0
u E
ca
,.... ... ..
0
2: -
"" 2 u
e
"; is
Il. ..
.. >
-<l: c: :;:0
:::0
f- 0 u
f- ..
-<l: ><
.- w
-
ca
N
.-
-
.-
.c
ca
-
en
"C
0
0
J:
...
0
.c
J:
.-
G)
z
D..
III
Z
-
Gi
en
c
:::0
o
tJ
-
c
..
E
c.
o
Gi
>
..
"Cl
..
0::
;:
..
Cl E
c c.
u; 0
5 l
::t: ..
"'0110
~ ~
.S! 'c
U :::0
e E
.- E
o 0
tJ
,
,
,
,
,
,
,
,
,
,
,
en
..
U
.~
.....
o III
.. ..
o >
-.-
u-
.. l!
..-
.- en
0.-
c
'e
"Cl
<
.. ~
'" . .
-' !! S
~!! ..
.. c
S.e "ii ..
.. u ~ E
.E!. Co c
Co e
." <(
W.E ;;
';I.. c
W
.0 E I
00 /
:J: \
/
..
>
+::-
l! en
-,.,
en-
.- ..
c c
'e<
~
..
..
Cl
..
C
..
:::iE
-
..
en
en
<
..
..
Cl
..
C
..
:::iE
/
-
U
..
'0'
..
D..
~
--------
~
en
1::
o
c.
-..
gJo::
Cn;
c-
< g
..
c
ii:
-'0
.. 0
CD..
o
.- en
en ..
III U
1)._.
""1:
e ..
D..1Il
~
'0
o
D..
i:'
..
:c
..
E
..
..
-
.E
...
as
.- c
li..
u~
0"
;;..
a::s
o
...
..
c
o
E
'0
E
..
o
~
Cl
c
'2
o
c.
..
0::
0::
Cl
0::
o
E
..
..
...
~
c
"
Z
'"
c
u;
::J
o
:J:
..
II
5
.c
E
..
..,
:J:
o
W
::;;
:
1::
Co
~
.!
c
.w...
0:
LL
Cl
'"
c
"r;
::J
o
:J:
0:
Z
<(
"'
l!?
"
<(
"-
:g "'
t::. l!?
:l
"' '"
a; '"
~ "-
.. !!i-
ll.
!1 "'
~
Co
:c ..
~ ll.
.. '"
~ ~
c:
0 .2
CD ~
E
0 :0
:r: ..
-a iE ~
..
c: ~ a::
Ql
Cl
Ql
..J
i
~..
!
.~ Ii
!~ ;;
IjUn
~ U'"
flfur
Q
-
(,)
CI)
.~
e
a.:
;:
0)
""""
'b
c:
cu
CI)
.~
lo;
~
CI)
ATTACHMENT "E"
an ernar Ino
ECONOMIC DEVELOPMENT AGENCY
Neighborhood Stabilization Program
"Minimum Building Standards"
June 2009
SYNOPSIS OF GREEN BUILDING 5T ANDARD5
1 Attachment "E" to NSP2 Application
Table of Contents
1000 - General Requirements
1010 - General
1020 - Terminology
1030 - General Quality Requirements
1040 - Substitutions/Alternatives
1050 - Optional Green Building Practices
1100 - Temporary Facilities and Temporary Controls
1110 - Site Usage
1200 - Project Closeout
1210 - Final Cleaning
1220 - Operations Manuals and Warranties
1230 - Systems Startup
2000 - Building Sitework / Site Preparation
2010 - Site Clearing and Demolition
2020 - Site Earthwork
2040 - Site Hazardous Waste Remediation
2100 - Site Improvements
2110 - Roadwa'ys, Driveways, and Walkways
2150 - Fencing
2150 - Landscaping
2200 Site Civil/ Site Utilities
2210 - Utilities
3100 - Selective Demolition
3110 - Building Elements Demolition
3120 - Hazardous Components Abatement
4000 - Foundations
4010 - Standard Foundations
4030 - Slabs on Grade
5000 - Superstructure
5010 - Framing / Wood
5100 - Exterior Enclosure
5110 - Exterior Walls
5111 - Stucco / Plaster
5112 - Exterior Insulation
5113 - Caulking and Joint Sealants
5120 - Exterior Windows
5130 - Exterior Doors / Garage Doors
5140- Flashing
5200 - Roofing
5210 - Roof Coverings
5220 - Gutters and Downspouts
6000 - Interior Construction
6010 - Partitions / Ceilings
6011 -Interior Insulation
2
Attachment "E" to NSP2 Application
Table of Contents....Continued
6012 - Drywall
6020 - Interior Doors.
7000 - Finishes
7010 - Ceramic Tile
7020 - Floor Finishes.
7030 - Ceiling Finishes.
7040 - Painting.
8100 - Furnishings
8110 - Carpentry, Cabinets, and Millwork
9000 - Plumbing, Mechanical, Electrical
9010 - Plumbing Fixtures
9020 - Domestic Water Distribution.
9030 - Sanitary Waste.
9100 - Heating, Ventilating, and Air Conditioning (HVAC).
9110 - Heating and Ventilating
9200 - Fire Protection Systems
9210 - Fire Protection Specialties.
9300 - Electrical Systems
9310 - Electrical Service and Distribution
3
Attachment "E" to NSP2 Application
THE FOLLOWING IDENTIFIES THOSE AREAS OF THE
BUILDING STANDARDS THAT SPECIFICALLY ADDRESS
GREEN BUILDING OPPORTUNITIES AND WILL BE
PROVIDED TO THE CITY'S GROUP OF INTERMEDIARIES TO
FOLLOW DURING THEIR REHABILITATION ACTIVITIES
(the entire Building Standards document is available upon request)
1000 - General Requirements
1010 - General
1. These Minimum Building Standards (Standards) have been developed by the City of
San Bernardino Economic Development Agency (EDA) for use on the Neighborhood
Stabilization Program (NSP).
2. These Standards shall apply to all properties covered by the NSP.
3. All materials, supplies, costs of permits, and labor to complete the specified
rehabilitation or repairs, shall be the responsibility of the BuilderlDeveloper unless
specified otherwise by the EDA.
4. Any drawings or sketches which may be furnished by the EDA or required by the
Builder/Developer are intended to clarify or further describe the property. Should the
Builder/Developer find discrepancies in, or omissions from, these drawings or
sketches or should he/she be in doubt as to their meaning, they should contact the
EDA for clarification. Because of the nature of work being done, some details of
sketches or drawings may be "typical" and grades, dimensions and exact existing
conditions must be verified at the property before commencing work.
5. Any additional work that EDA want the Builder/Developer to do should be done after
completion of the Rehabilitation work, if at all possible. A separate contract will be
signed between the EDA and Builder/Developer before the work is to start.
The EDA may require that the Builder/Developer carry out a durability evaluation
or conduct a building assessment to determine if the materials to be used comply
with any green strategies
4
Attachment "E" to NSP2 Application
1050 - Optional Green Building Practices
1. Builder/Developers are encouraged to incorporate any green building practice that
offers an opportunity to create environmentally sound and resource-efficient
buildings.
2. In an effort to encourage modern, green building, and energy-efficiency
improvements, Builder/Developers are encouraged to incorporate HUD's healthy
homes interventions including these seven steps ensuring housing is made and kept:
A. Dry: Ensure proper drainage away from housing; clean repair gutters and
downspouts, repair leaks seal roofs and windows.
B. Safe: Install safety devices on doors, cabinets, window blinds and outlets;
provide adequate storage for all poisonous items out of reach of children and
labeled in the proper containers; install smoke detectors and carbon
monoxide detectors; have appropriate fire extinguishers available.
C. Well-ventilated: Service and maintain heating and cooling systems; provide
exhaust fans for kitchens, bathroom and dryers to the outside to reduce mold;
change furnace filters.
D. Pest-free: Provide proper storage and disposal for food products, caulk and
seal holes; use least toxic pest management methods.
E. Contaminant-free: Remove lead based paint hazards properly; provide test
kits for radon; reduce volatile organic compounds in paint, carpet, etc.
F. Clean: Install dust walk-off systems in entry ways; provide smooth, cleanable
surfaces; provide effective storage space and containers; choose flooring that
is easy to clean.
G. Well-maintained: Important maintenance calendar for inspecting, cleaning,
repairing, replacing housing components/systems.
3. Throughout these Standards, the EDA has inserted opportunities in which green
building practices can be achieved.
1110.9 - Site Usage
GREEN OPPORTUNITY: Minimize the site disturbance during construction.
A. Control the impact area by designating vehicle parking farther from the site.
B. Store building materials inside a garage or protected area.
5
Attachment "E" to NSP2 Application
C. Protect all existing trees with fencing to include the drip line in an effort to
avoid over compaction of the soil around the trees.
2110.9- Roadways, Driveways and Sidewalks
GREEN OPPORTUNITY: Limit water runoff and maximize infiltration by avoiding
impervious surfaces and installing permeable drainage areas between sidewalks,
driveways, walkways, patios, and pathways.
A. Open matrix concrete grid pavers.
B. Specialized honeycomb substrates for gravel or turf.
C. Pervious mixes of concrete or asphalt.
2150.5 - Landscaping
GREEN OPPORTUNITY: Create environmentally friendly lawns and landscaping by:
A. Cover play areas with wood shavings.
B. Limit the amount of lawn space by installing naturalized plantings.
C. Provide alternative water sources.
D. Plant drought-tolerant landscapes.
E. Plant shade trees in an effort to reduce the cooling loads required in the
house.
F. Consider planting edible plants.
G. Use water-conserving irrigation equipment where landscape irrigation is
required.
i. Drip Irrigation.
ii. Advanced irrigation controls like rain sensors.
5010.4 - FraminglWood
GREEN OPPORTUNITY: Keep all untreated wood at least 12 inches above soil in lieu
of the code required 8 inches
6
Attachment "E" to NSP2 Application
5112.1 - Exterior Insulation
GREEN OPPORTUNITY: Use cellulose insulation.
5112.6 - Exterior Insulation
GREEN OPPORTUNITY: Provide insulation at all water heaters.
5120.7 Exterior Windows
GREEN OPPORTUNITY: Replace existing windows and provide new windows with a
high energy and low-e performance rating
If a window of any kind must be installed into the wet area of the tub or shower
surround, it must:
A. Contain a sill made of material that is water impermeable, such as marble or
Corian, not tiled and grouted.
B. Have a sill that is pan-flashed or sealed.
C. Have frame made of moisture-tolerant material.
5120.10 - Exterior Windows
GREEN OPPORTUNITY: Replace existing windows and provide new windows with a
high energy and low-e performance rating
5120.11 - Exterior Windows
GREEN OPPORTUNITY: Provide awnings, overhangs, or other shading devices on
exterior windows.
5130.7 - Exterior Doors I Garage Doors
Weather-stripping shall be applied to all exterior doors and interior garage door
5210.5 - Roof Covering
GREEN OPPORTUNITY: Provide reflective (high-albedo) roofing systems with an
Energy Star rating
5220.1 - Gutters and Downspouts
Gutters and downspouts shall be provided at all projects
5220.9 - Gutters and Downspouts
7
Attachment "E" to NSP2 Application
GREEN OPPORTUNITY: Provide a simple rain water harvesting system for use on
irrigation.
6012.2 - Drywall
GREEN OPPRTUNITY: Select drywall products with a high recycled content and use
taping materials and joint compound without hazardous additives that aid in drying and
setting.
7020.15 - Floor Finishes
GREEN OPPORTUNITY: Provide greener carpeting such as:
A. Products made from natural materials;
B. Products that do not contain residues from dyes and finishes used in
manufacturing;
C. Products that do not have surface treatments to repel stains;
D. Products with documented low VOC off gassing
E. Products with high recycled contents
7040.2 - Painting
All paint shall have low VOC levels: Paint for kitchen, service area, and bathroom(s) to
be a durable and washable gloss finish (unless EDA requests a semi-gloss).
8110.6 - Carpentry, Cabinetry and Millwork
GREEN OPPORTUNITY: Countertops shall be made of natural stone (granite),
tiles, or manufactured solid surfaces (Corian).
9010.2 - Plumbing Fixtures
GREEN OPPORTUNITY: Use of a high-efficiency toilet that uses less
than 1.6 gallons per flush is recommended
GREEN OPPORTUNITY: Provide low flow faucets and shower heads or
fit standard faucets with a flow reducing aerator.
GREEN OPPORTUNITY: Water heater should have a high-efficiency
rating.
9020.6 - Domestic Water Distribution
GREEN OPPORTUNITY: All hot water lines shall be insulated.
9020.7 - Domestic Water Distribution
8
Attachment "E" to NSP2 Application
GREEN OPPORTUNITY: Consider the use of PEX piping.
9020.8 - Domestic Water Distribution
GREEN OPPORTUNITY: Provide a single-throw shut-off valve at service to clothes
washing machines. If machine located above a livable space, provide a floor drain and
shower pan under the washing machine.
9110 - Heating and Ventilating
GREEN OPPORTUNITY: Equipment should be rated as high efficiency.
GREEN OPPORTUNITY: Evaluate existing heating and ventilation system and down
size or reconfigure to be more efficient. Do not oversize equipment.
GREEN OPPORTUNITY: Consideration should be given to using equipment that
provides alternatives to conventional refrigerant, such as non ozone depleting HFC
refrigerants.
GREEN OPPORTUNITY: Provide ceiling fans in bed rooms and living spaces.
GREEN OPPORTUNITY: Install programmable thermostats with both daytime and
nighttime setbacks. Separate control of different spaces into zones so that the unit
works more efficiently.
GREEN OPPORTUNITY: Provide duct cleaning prior to turn over.
9210 - Fire Protection Specialties
Provide smoke detectors that are U.L. approved; First Alert SAI50L T, or equal. Hard
wire will have battery back-up.
GREEN OPPORTUNITY: Provide carbon monoxide detectors.
9310.5 -Electrical Service and Distribution
GREEN OPPORTUNITY: All bulbs shall be fluorescent. No incandescent lighting will
be allowed.
9310.6 - Electrical Service and Distribution
GREEN OPPORTUNITY: Avoid recessed lighting. When required use insulation contact
fixtures that seal tightly and allow insulation to be packed against them.
9310.7 - Electrical Service and Distribution
9
Attachment "E" to NSP2 Application
GREEN OPPORTUNITY: Install dimmer switches at all living areas. Restrooms shall
have motion detector switches.
9310.8 - Electrical Service and Distribution
GREEN OPPORTUNITY: All low voltage (telephone, data, television) shall be run in
conduits to provide for future expansion and/or replacement
10
Attachment "E" to NSP2 Application