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HomeMy WebLinkAboutHousing Strategies.ReportDate: To: City of San Bernardino Request for Council Action April 24, 2017 Honorable Mayor and City Council Members From: Mark Scott, City Manager M S By: Edward Flores, Consultant Diane Cotto, CDBG Coordinator Subject: HUD Program Funding and Housing Strategies Staff Report Recommendation Review and discuss the City's housing program and strategies, various funding sources, and receive an update on the HOME Program. Background On April, 2016, the Mayor and City Council approved the FY 2015 — FY 2019 Consolidated Plan for the City of San Bernardino. Within the contents of this plan, also approved is a housing needs assessment that identifies a comprehensive housing affordability strategy. Housing problems in the City impact renter -households slightly more significantly, with fifty-four (54) percent of all renter -households experiencing at least one housing problem (inadequate housing, overcrowding, with a cost burden of fifty (50) percent, or cost burden of thirty (30) percent, compared to forty-three (43) percent of owner -occupied households). The quality of the City's housing stock, based on the age and the condition of the structure, could also present potential challenges for low and moderate income households. Approximately sixty-seven (67) percent of San Bernardino's entire housing stock is over thirty (30) years old (built before 1980 and potentially in need of rehabilitation. Many low and moderate income households, particularly seniors and persons with various disabilities, may be unable to afford the much needed repairs for their homes. Among all households (incomes up to 100 percent AMI), Hispanic and Black households were the most likely to experience one or more housing problems. The City of San Bernardino has a range of housing and community development needs. CDBG, HOME and ESG funds alone are not adequate to address the myriad needs identified within the Needs Assessment of the Consolidated Plan Housing Strategy. Recognizing the national objectives of these federally funded programs and specific program regulations, the City intends to use these funds to coordinate other city wide programs, services, and projects to create a decent and suitable living environment to benefit low and moderate income households and those with special needs including addressing homelessness within the City. On September 19, 2016, the Mayor and City Council approved the resolution for the execution of a HOME Loan Agreement with Housing Partners I (HP1) for the Implementation of the Infill Housing Development Program that will result in the creation of 3 affordable homebuyer units. A condition of the Mayor and City Council (MCC) approval of this agenda item required staff to return to the MCC in 90 days with a status report of the City's HOME Program. In addition, staff was directed to work with the CDBG Ad Hoc Committee to develop a Housing Strategy. Thereafter, the CDBG Ad Hoc Committee met and reviewed the City's housing strategies and initiatives, the HOME Program, federal funding sources, and restrictions on the use of funds. It was suggested at that meeting that the information be presented to the Mayor and City Council at a Study Session meeting. ni_gmm—zinn HOME PROGRAM The HOME Program is designed exclusively to create affordable housing for low- income households and may be used to fund a wide range of activities including building, buying, and/or rehabilitating affordable housing for rent or homeownership or providing direct rental assistance to low-income people. ACTIVITIES Currently, the City is using HOME funds to support the following activities: HOME Activities Activities Housing Type Funding Levels Project Goals Homebuyer Assistance Program Homebuyer $ 600,000.00 25 Units Waterman Gardens 1 Rental $ 734,000.00 61 Units Valencia Vista (Val 9) Apartments Rental $2,334,999.00 11 Units Infill Housing Program Homebuyer $ 625,000.00 3 Units COUNTY HOME CONSORTIUM To minimize the impact of the dissolution of Redevelopment in California and the City's filing of bankruptcy, in 2014, the City elected to temporarily partner with San Bernardino County, Chino Hills, and Rancho Cucamonga to pool its HOME allocations for a period of three years (FY 2014 through 2017) to create affordable housing for low-income households throughout the Consortium's jurisdictions. It is the intent of the City to terminate its participation in the HOME Consortium by the end of the three-year term. The County of San Bernardino was notified of the City's intent to not participate in the HOME Consortium in March 2017. HOME CONSORTIUM ACCOMPLISHMENTS On November 29, 2016, a grand opening was held for the Valencia Vista Apartments (a.k.a. Val 9 Apartments). The HOME Consortium project was the first phase of a planned transformational economic redevelopment of Arrowhead Grove Neighborhood (formerly Waterman Gardens) and resulted in the development of 76 high-quality, energy efficient affordable homes for low and moderate -income families. CURRENT AFFORDABLE HOUSING STRATEGIES As previously stated the Consolidated Plan is a document that identifies the City's needs in housing, homelessness, community development, and economic development and presents the City's strategies and timetables to address those needs. Currently the City' CDBG Consolidated Plan goals and objectives for affordable housing development are as follows: FY 2015-2019 Consolidated Plan Affordable Housing Strategies Strategy Objective Geographic Source Goals 2015 Area of Achievements Funds Preserve and Affordable Citywide HOME / 65 21 Rehabilitate Housing CDBG Housing Housing Units Housing Units Improve Affordable Citywide CDBG 25,000 874/14 Neighborhood Housing Housing Housing Units Conditions Units Expand Home Affordable Citywide HOME / 25 1 Ownership Housing NSP Households Household Opportunities Provide Affordable Citywide County TBD 5,756 Assistance to Housing Section People / People / Renter 8 Households Households Households Program New Affordable Affordable Citywide HOME / TBD 0 Housing Housing CDBG Housing Housing Units Construction Units Fair Housing Affordable Citywide CDBG 750 2,880 Housing People People Administration N/A N/A HOME / N/A N/A CDBG / HESG Fiscal Impact For the next three to five years, the City may use HOME Investment Partnerships (HOME), Community Development Block Grant (CDBG), Emergency Shelter Grant (HESG) Program funds and program income from loan repayments, residual receipts payments, and proceeds from the sale or lease of property acquired, redeveloped, rehabilitated or paid for with federal funds for the development of affordable housing for low—income households within the City of San Bernardino. The City anticipates receiving the following federal allocations: FEDERAL APPROPRIATIONS This report is informational in nature and will have no impact to the City's General Fund. Conclusion The City of San Bernardino has a range of housing and community development needs. Alone, CDBG, HOME and HESG funds are not adequate to address the myriad of needs identified within the Consolidated Plan's Needs Assessment for housing. It is the intent of the City to use these federal funds in its highest and best use and in accordance with the federal requirements to create decent and affordable housing as well as a suitable living environment for its low to moderate income population. This document is for the purpose of discussion to aid in the development of goals, objectives and policies that may be recommended as part of future Consolidated Plan strategies. Attachments Attachment 1 — Housing Strategies Initiative Ward: Citywide Synopsis of Previous Council Actions: April 6, 2016 — Resolution of the Resolution of the Mayor and Common Council of the City of San Bernardino to adopt the Fiscal Year 2015-2019 Consolidated Plan and FY 205-2016 Annual Action Plan September 19, 2016 — Resolution of the Mayor and Common Council of the City of San Bernardino to approve the HOME Loan Agreement with Housing Partners I. 2016/2017 (Actual) 2017/2018 (Estimate) 2018/2019 (Estimate) 2019/2020 (Estimate) 2020/2021 (Estimate) HOME $0 $0 $975,000 $979,875 $984,774 CDBG $3,148,525 $3,164,268 $3,180,089 $3,195,989 $3,211,969 HESG $282,349 $283,761 $285,180 $286,605 $288,038 Program Income Unknown Unknown Unknown Unknown Unknown This report is informational in nature and will have no impact to the City's General Fund. Conclusion The City of San Bernardino has a range of housing and community development needs. Alone, CDBG, HOME and HESG funds are not adequate to address the myriad of needs identified within the Consolidated Plan's Needs Assessment for housing. It is the intent of the City to use these federal funds in its highest and best use and in accordance with the federal requirements to create decent and affordable housing as well as a suitable living environment for its low to moderate income population. This document is for the purpose of discussion to aid in the development of goals, objectives and policies that may be recommended as part of future Consolidated Plan strategies. Attachments Attachment 1 — Housing Strategies Initiative Ward: Citywide Synopsis of Previous Council Actions: April 6, 2016 — Resolution of the Resolution of the Mayor and Common Council of the City of San Bernardino to adopt the Fiscal Year 2015-2019 Consolidated Plan and FY 205-2016 Annual Action Plan September 19, 2016 — Resolution of the Mayor and Common Council of the City of San Bernardino to approve the HOME Loan Agreement with Housing Partners I.