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Home My WebLink About0470.091October 17, I!!I HONORABLE CITY COUNCIL P.10 Alto, ea1iforni. Mi"or HQU5jng E1ement Amendments Members Qf the ~ouncil: Report in Bri~f 9 This report addresses five lIIinor amendments to th~ Housing f1ement of the Palo Alto Comprehensive Pl an. One amendment is necessary to comp1y wi ttl a state mandate to the City to address potential loss of federally-subsidized affordab1e housing units. in a lI10re detailed manner by January I, 1992. The ether amendmeilts intTude a correction identified by City staff and three revisions requested by the state Department of Hous~ng anc! (olTlTlunity Development (HeD) after t~eir review of the updated Housing E:lell'lf!nt adopted b,)" the City Council on June 2S, 1990. . A draft resolution is ittached which inc1udes the text amendments to the Housing £1 efQent propased for adopt i on to comp 11 wi th the above requ ; rements (see Att.chment IJ. Tne proposed text amendments "ave been reviewed by the Palo Al to Housing Corporation, the Planning Commission ar.d the State HCD. The attached resolution includes both min~r changes recommended by the Housing Corporation and Planning C{)lTI"nission, as well as changes made after their reviews in response to pre1iminary comments rece~ved frem the state HCD. 1litl.9"OUn~ State Housing fl~nt la. mandated that the City of Palo Alto adopt an updated Housing Elemer.t of its Comprehensive Plan by July 1, 1990. I~ compliance with this mandate the City Council reviewed and adopted' amendments to the Housing Element on June 25, 1990~ Prior to CounCil review, the proposed amendments were sUDmltted to the state HCD for review and approval. Changes requested by the state! as a result of its review were incorporated into the amendments adapted by the Council. After the adnpted Housing Element was sent to the state for final r2\1Telll, the state requested several additional revisions be made prior to state approval. These included it: request for the City to identify: 1) a quantified objective for units CMR:470:91 .' to be rehabilitated or conser' .. ed, and 2) specific time frames for when the City '-lill ..,aive application fees for \l.se permits faT" emergency shelters (Program 20), and explore means of preserwing the Buena Vista Mobile Ho~ Park (Program ZSJ. Silien the minor nature of the requested addition~, staff determined that these would be addressed at tile time the Cit), responded to the additional state mandate t~ address, by January 1, 1992, tnt rental units at risk of loss of subsidies. Review by the Pale Alto Housing Cgrcoration The Housing Corporation rewiellied and unanimously recolTl'llended approvil of the proptlsed Housing Element amendments at their meeting of September 25:, 19!H. Their recommendation included a request for three minor text amendmej~ts and was conveyed to the P1ann~ng Commission both oral1y at the Planning Corrrnission meeting and through a letter (see Attachment S). Planning CommisSion Action The Planning Commission r~vit~ed the proposed Housing [lement amendments at a Public Hear;ng held on September 25, 1991. The Planning Commission unanimously rtcommended approval of the proposed amendments, with the minor text amendme~ts requested b'y the Housing Corporation. Also included in their action was af' aCknowledgement that further 1!inor revi!.ions might be necessary prior to touncj~ rewiew and approval in response stat~ ~CD comments. SymmarY of Proposed Amendments and Preliminary Comments received from State KCD Preliminary comments on the proposed amendments were received from the state b'y phone on September 25, and October 2, J991. Following is a sUrmlary of the KQus\ng (lement amendments intt'a1ly proposed and preliminary comments re~eived from the state HCD on such amendments. Preserwatioo of Assisted Housing State Hous)ng Element law {Government Code Section 65583} requires that each tity and County amend the Housing Eh·ment of their General Plan to address the potential Toss of assisted housing within the next ten ye~rs and actions to ha taken to preserve such units. In compliance ..,ith Chapter 1451 {Section 65583 of the Gover11ment Cede) ~ the text amendments on pages. 41 to 43 of the Hous.ing Element proposed for adoption include~ lJ an inventor,Y of the units at risk; 2) updated informa!ion on state and fe4eral legislatien directed at preserwing such Urlits, 3} potent i al costs of preserving such units, 4) funding sources awai1able, 5) the number of at·risk units to be preserwed. and 6J specific actions to be take~ by tne City to assure preservation tlf such units, Three projects in Palo Alto are considered at risk of conversion to mar~et rate housing: Pllo ~lto Gardens {lS6 units}? ~rastradero Par~ (65 units), and the Sheridan Apartments (57 units). Only one of the projects (the Sheridan Apartments) is currently up for saie, but this project is subject to deed CMR: 470:91 p:\cmr\hsgele.cmr ... : ;~1;: ' . . " 10/l7/91 ~'9. 2 .-.f" .. "-";. .. , ~I ~ :1 ; I , I , I j j rtStr1ctfcns whicn require it to remain as afforda~le f\ousin.g until ]998. lhf! pro-ject t.s subject to a further restrlcUon that requires it to remain as .ffordabl. housing for an additional 20 yaars (to 2018), if subsidies are available. The City also has right of fir~t refusal to purchase t~e projEct. A separate Ci'.:.y Manager's report dated May 16) 199L is atta<:hed for ildditfonal information (Attachm.nt 7), Federil legislation, The Low Income Housing Preserviticn and H~ownership Act of 1990 ,UHPRHA) I adopted to preserve certain units a.t ri sit, pro .... ides incent ;'"es for owners to continue the units as .ffordib1e, and should the OWfier wish t~ sell, requires pub',c notice of proposed sale. Resident associations and r.on profit igenci~s ire to be offered right of first refusal for a one·yea~ period to purcf1.ase sud! units at market rates. Federal funds have aha been established to provide financing mec~anisms to assist 1n preservatlon efforts. However, in higr. cost areas like Palo A1to t local funds may also be required in the efforts toward long-term preservation. Though there Is no ilTWTlediate n,eed to initiate action to purc"ase such units t itaff does recommend that a Mew Program 2SA be added to the Houslng Elemer.t for the City to assist in efforts to preserve units It risk should they be offered for sale. Staff will contlnue to monitor the status of such projects and ad'V'ise ttle City of the neE'd for preservation actions. A $wII"ary of sped fic preservation meuures !.:ontaine1 In LIHPR:iA prepared by the-Palo Alto Hotls1ng CorpoTation is provided as Attachment 8. Statt Comgnts • Preliminary cOnr.1ents received from the-State inr:-luded a req~est for t~e City to; -Provide some program actions for Program 2SA (addr~ssfng units at risk) listi~~ specific actions tG be taKen by the City, with time frames; Provide an expanded discusslGn of the City's evaluation of all types of subsidized projects which may be at risk and 'prov;de greater background iflfonnation on the basis of the conc.lusions regarding which units \IIere determined to be at risk; Clarify wtllch units can prepay I!Y.lrtgages and 'Which are eligible for termlnation of Section e subsidies; ProV'id~ the specific dollar amour.ts of current local funds. whicn may be available to ~urchase ~nits at risk, for use .s a bench mark of potential funding; Clarify what is meant w~en the City says it will -actively assist in pre-servation of units at risk-; The attached iesolution has been modified in compliance with these requests. CMR:47ll:91 p:\cmr\nsge1e.cmr 10/17/91 Page 3 • " , Mpd1fications Requested bv State Hep to Adopted 199Q HQysjng Element T~! three Housing Element amendments requested by the state to the 1990 Housing Elemp.-nt inc! Ue prop-csed City response are de::-ct'ibed below (see alsl) attach'!!d letter froo Stit. HCO, Attachment 3). I. Establishment of Quantified Rehabililation and Conservation Goals The state has requested that the City establl,h a G,antifi.d obje:tiv. fer the number of housing unas to be ret'labll1tated and/or conserved during thp next five years, An amendment to the Housing flement is proposed to identify that the Cit~ will \lse program income (S50,000 annually) from the C-ity's Housing Improvem!nt Pl"'ogrUl for Bu11ding CO~!-l"'elated improve~nts for approximately 20 residences over the next five years, with between three and four loans approved every year. The c.ity also allocates COBG funds to the Senitlr Home ~epair Program. This program rElsuHed lr. repairs for 300 seniCtr house-holds in the last year, ir.cluding 150 ho~seholds with yery-low-or low-incomes. It is expected that this program can continue to assist a compara,Te number uf seniors j!'; future years~ Quantified go.ls of senior ~ome repairs for 1.500 ~ouseh~lds for the 1990-1995 ~eriDd, with approximately 300 per year t150 subsidized), are proposed. Most of the Mousing &cQuired under the Rental Housing Acquisition Program (RHAPJ f!Q:uires rehabilitation at the time of acquisition. Tne City &irovides grants or loans ttl enable this hDusifl9 to be rehab; litated and turned from market units to low-and very-law-intorne units. The five Yfar goals for these programs ar! incorporated into the new Quantified conservit,on and rehabil,tition objectives. The number of iSsisted housing units it risk of conyers ion to market rate status, and thus to be conserved, were discussed previously. Though these 279 units at risk. are &150 included a; a conservation goal in the proposed amendments to Table J (page 57), t~ey are not included ir. the totals on t~e table because it is not known whp.ther they ~ill be offered for sal~ for con~erSlon to market rate ~ousing and in need of being ·conserved-within the next fjv~ years. State (ormlE:nt -The state requested that conservation ind rehabilitation of housing and the clt~'s weatherization program, Conservation Goal. the City include information abl)ut stocK through private market forces and bi~tte,. identif)i the City;s Proposed amendments to page 27 of the Housing LowjModerate Income tiousing GlJal sO' on page requested changes. Element and to ribl. J '1990·1995 57, reflect all ~f the state's CMR:47C:~1 p:\cmr\hsgele.cmr •• 10/17/91 Page 4 j 2. Time Frame foc Adgption of Crdinanc~ Arngndmp.nts tQ_~~ Tlie state has. requested that the CH,Y adopt a specific time frame wittdn whfch the c.ity will enad Program 20 to ·waive applicatfon fees and assht local agencies and nonprofit org.nizations in obtaining funding and conditfcmal use permits to operate emergenc'y shelters and transitional housir.~· (page 38 of the Housing Element). Staff proposes to sc~;edu1e review and adoption of an ord1nance amending the C1t,Y's fee schedule to al10w such e~emptions by July of 1992, as part of the 'PDrov.1 of the next City bud~et. In addition, as a result of Council action an the recommendations of the Sin~l! Room Occupancy (SRO) CO""ittee, tne City will also pursue adoption of State authorlzp.d amendments to the Ufiifonn Building Code to assist in reducing construction costs of SRO projects. Such iiii:lIendments are to be schedui ed for r~view and adoption prior to July 1992. State Comrnerot -Na C{)lTITlents were receiv~d on this pertfon of the pr~posed amendment s. 3. Pre~ervation of Buena Vista Mobile ~cme Park Tne state has asked when the City ~ill begin exp10ring ~eans to pres~rve the Buena Vista Mobile Home Park, in referp.nce to Program lB, ~Recognize the Buena Vista JIrobfl e HQme Park as an fmportant resource for low-and moderate-income housing opportunities· {page 44 of Housing Element). Staff proposes to pursue stich iiTl exp 1 orat ; on wi th i n three yean after COInp 1 et i on of the scheduled C.omprehensive Plan update. In the meantime~ staff recommends t~at the City cQntinue to keep informed Qn federal and state funding SQurces t~at are available to iilssist ~bile horne park reSidents or non-profit groups in purc~asing the Site, should it be available for sale, and offer to assist such groups to pursue pur(hase if so desir~" State Com.ent -No coments were recei \led on thi s portion of the proposed amendments. Amendments/c.orrections ProPQsed' by Staff After adoption of the Housing Element in June 1990. staff became aware that certain acreage figures in T~~le D. -Lands Zoned Residential-on pa;e 53 of the Housing [1 ement , were incorrect. The necessary corrections and related text referencts to such figures are included in the proposed amendments. State Corrsment -No c.OlllJ1ents were received or. this portion of the proposed amendments. CMR:470:91 p:\cmr\hsgele,cmr 10/17/91 Page 5 • En~irQnmentil Assgssmgnt Tne adoption of th! proposed text c~apges to the Housing Elem!nt will ha~e no direct p~ysh:il en~ir(lnmental impacts. An en~ir.::lnmelltal assessment WZ:$ prepared ;,nd a negative declaration was adopted for the recent update of the Housing Element that encompassed' the current amendments being proposed (si!e Attachment 2). Th~refore, no further environmental assess~nt is required. Re:c.og.ndatlon Staff r~co~nds t~at the C;ty Cou~cil adopt the ~ousing Element Amendments as ident~fied ir. the attached Re~olutl0n (Attachment 1). Respactfully submitted, t:wd .~ A'dudL ;I "uI--Vu1i.1d~ /s'~ CHENEV (/ Senior Planner ~~w~tl,;\VJ:U ;< JulIE FLEMING ,~ KENNETH R. SCHREIBER Director of Planning and Community Environment Assistant City Manager Attachments: I. 2. 3. 4. 5. 6. 7. S. 9. Resolution Amending the Houslng Element Negati~e Oecliration Letter from State HCO dated Harch II, 1991 Planning CommiSSlcn Staff Report dated S~ptember 20, 1991 letter from Pa.l0 AHo Housing Corparatfon dated Sept(!m~r 25, 1991 letter from Owners of Palo Alto Gardens (Goldricn, Kest and AssOCiates) dated September 4, 1991 CHR:273:91 dated "ay 16, 1991. with attac~ment, on Preservation of Affordable ~ousing in Pa,10 Alto SlJmmary of LIH.PRHA prepared by Palo Alto Housing Corperatton Housing Element of the Comprehensive Plan 1990·2000 (Council Members only) c:c: Planning Ccrrmission Pllo Alto Housing Corporation Human Relltlons Commission CMR:470:91 p:\cmr\hsgele.cmr 10/17/91 Page 6 '\ :::::.......;.-...... -.~.-... -,.:.----'" -~--.... -''-'''--.-. -. RESOLUTION NO. RESOLllTION OF THE COIJNCIL OF THE CITY OF PALO "LTC AMENDING THE HOUSING ELEMENT OF THE PALO ALTO COMPREHENSIVE PLAN WKi:.REAS, the Planning commission, afte.r duly noticed pul:llic bearing held on September 25, 1991, has recommeOld.ed that t:he Rousinq Element of the Palo Alto Compr~hensive Plan be ame~ded, as requested by the State Department of Housing a~d community Development; and WHEREAS, the City Council after duly noticed public hearinq, desires to amend said Plan as hereinafter set forth. NOW, THEREFORE, the City Council of the City of Palo Alto does RESOLVE as follows: SECTION 1. The City council finds that the public intE!rest, health, and welfare require amendments to the Housinq Element of the Palo Alto Comprehensive Plan as set forth in Sections 2, 3, 4~ 5~ 5~ 7 and 8 hereof. SECTION 2. Progralll 25 {commencing on page "1) of the Housing Element is hereby amended by adding Program 25A into the tqxt of PToqram 25# to read as follows~ ProgrA5 25i Actively pureue re-establishment of federal and state rental su}:)sidy programs and reinstate the local rent supplement (Piggyback) program upon tae availability of appropriate federal or state housing programs~ Program Responsibility: Planninq Division In 1974~ Palo Alto created a Piggyback program when it became apparent that maximum rents payable by the Santa Clara County Housing Authority under the Section 23 housing assistance program were too low to :make the Housin9 .Authority a real competitor for units in Palo Alto1s tight housing market. Until the Section 23 program ~as terminated by the federal government in 1~a2~ the City provided subsidies to the Housing Authority to help lease up ~o 20 units annually~ ~,roqra"'D ,25A'! Assist in the e.fforts to,-,ards long ~era preservation of low-income units at risk o~ be~ominq market rate,h~usinq. proqram Responsibility~ Planr.ing Division, Local Non-profit Housing orga.."izatitms 1 .' fj:~ Actions, ::~"ltor .status .&nd t9nilnatiori. date" of projects i'!'t:~i8k"fCqnv~r .. ion to .. ar~e~rate houdnq :'I4~n."ext tivet') ten y .... rsthrouqh prepaYllle.nt [i~lf!,,,ub8Piz.,,S 1:&<I .. r"l, ;1lOi:tqac;nor, tern inat lon ." t ;, ~.I!ction$.rent~.sub .. idies •.. ( Pal" .u to Gard_. 1:~T<'deroI'a.rl< liM. Sh"rlda ll A»att-nts); f~~.Qtt .. re4f:or&a1e.preserVeatfordablestat1i. iiQ~ :'."CbP;oj ectatl>roll'1hwr suJ.~ .of .. vai lab... . .. . ttjpc11fuJsoure&s .a.n<ltschnlcal ".s1sta:'lCEO to .. 110l0I i~qfi~""e of: .such un11:11 by. non-.p=fit h<>using "ot<ArU utions • The new State Housing Element Law req'.lire.s all housing elements to include, by January It 1992, evaluation of assisted rental housing at risk of becoming market-rate housing4 Local jurisdictions ar~ to identify the potential number of lov-income units that are eligible to change to market-rate housing during the next ten years cue to termination of subsidy contracts I mortgage prepaymc:nt, or expiration of use restrictions. They must also iQentify the potential effects and program noeds which could result from loss of this supply of low-income housing. 1'0. .. 0 ,;'.1.l1:0 .. b.... .16 ... , subsidized rental. hOusing' Pro:l~~';' U.~1l9<>~ these projects is 1'rov1dad ~~:p~ge,' 1'''"" ,As' ideritifie,d _ in, ,~e' 1991 inventory ol::f;e4erall:{ ."I:>.,"1<110e4 rentdprojectG prepared by·d th'e California Coalition' "for Rural Housing Project, there are &=M 871 units in 5eYeft eight projects in Palo Alto that are ~eet~ tevmi~a~ieft et 9~heia) S) ~~epaymeR~. e~~ e~~ ~ ,e,*pi;r'at.i6A eligible for prepayment of federally SUbsidized ~ortqages, and elimination of 1 ow incp1De' use rest:a:ictions., or termination of project iJa$ed Sect;'9n -S rental subsidies ,by the yea~ ~ ~Ol)8. These' projects are listed below;:. 2 ;0 II 011 b<k 00)Q36() • I, , ., I : 1 II 1 I nnyUI ! X SI.:JS!:nlZ~,D mi.u. 1I00;srsC _. ....... .......... ......... :'TMIIl 1+ ........ -hwTMr'S if PTrmPlir .L>io ~ \:lO<.' .!'!\IIl ....... Se..-tioo :ill co"') --!5< _.J9IU """"" Elderly ... :I'&o:::!I1] P5O) (!'f) tim::N ~rod ,..,.,.. ktiotl Z21(DX4J -" ,~J~ -EIOnl, I''i t+~ Prc61 M«i .... 1Cd" .... -.~ 5celi«I 236(1)( l) Au. 1\1904 .... .... , .... , (+;1qj limiled Dmdcod T~ ~21I(D)(') --" Fob_ .......... ..... , "" ,.0) ProfiE MOO .... t.eod"..n:. NOct-profit Gc:QIinl """"" -~~1Oon 2C::! Eldcrty 1.u 2lU '20 ..... i'"' "-l"oo-pror:J._ .,.. (+» """"""""" 5e<:t :136(.Jy I ) Fct, 2(l1l '" ...-FIlmIlr.a ~rty (1S) ..... .., Noa-pro6J. (.0, "" Jill): ;';i;G [H) L_ Soeetio:a 202 A 2.36{JXl) SepI: 20lj ... "" """"" I ....", ~loI6) lqI-lW; N.-..n-.profll~ C·. ~)' ...,. .... ~+!] ..... SIw;:tion:2O'1 a: '2U(rAl) HDvlOJ9 '00 April ~* ....... " -., {IQt.~ {.') ~,--- on).3r",,,,, .. ot . theSe projects .' the. Ar""trl1der<> Park t.]iarlllient!' .'. is .' .Uqible tor prepayment of it" td .... a~lIIOrt9age within the next five to ten 'r~ .. :~", 'rhi;s 'project is llQt, under the cont.rol at'·.it ni:>~prpf;itwh!eh would be tess likely to prepay < :an~',', 1$, therefore considered at risk. The other fOur' proj eee.. which have federally subsidized itO?;tqaqaa, .< co1orado Park# Lytton Gardens I and :II, an4':_,Stev~nson House} are listecJ as not eligible ftlr":prepayment of their federal ~ortqa9es until 200.8 to 2019 {18-2S years from 1990). 3 !l11(}17 bck 003ru60 \ .. ,: - .,' - " 1<'· . i i , I i I I - S1lj'ii>f, th" .. v"", projectS ,wl>lchhav"",seoUc>n,a !!~~.ue"~. ,eU91bJ.e for tiI .... inati,?ri ot" ~ .... e .t:I>S~"'''i.thin, then..n, fiveyea.rs, 1''''''~''1 ~i!:"''''' _cte<i , tON "alloollt.<I, tor' ~I! .. ~~'1>foru.l, flye • year exten"ion, , ot ,S""Uon,lI cdiitiect", !~i .. tnqli' .. lorto 1996," "nd"c1,U~I.",nal ~.n,~~~' •. :j:C-" po.sible... Th.,~or."," a4, it.:,,",!,, lilej::oJot.iidthat,the noli-profit owne ... will <lontinue 1;?;.~'''ll',!,'«vsil .. bl. liIubddies. only thet"" !>rojl!Ct.S.ll'?t OWned ", .. cantrolle" by non"profits, ~ Sl!,.x:idan a:ld Palo ;U to Gar<lens are, ,<lOnsidered ~t:~4~~T:: Fe~~ sf ~he ~~a~ee~9 .ere ae.ele~ea~ ~al"li2lat-ieI'\:9 aRe: ape, t.herets!'e, flet lil"el:,' toe p~epa] ~eiF leaA9. ~fie e~her ~Rree pFejeet~~ 1:lRele~ 8met'9Bif! ~y limit-eEl ~ ~t. .e~i .si!:ea 8i:iFliCl"llI whe a:f'e lillely te JHepay t.he leans e~ 8p~ e~t. ~f the Seetiel't e eefl~Fae~s. 'fDe t:kl! Be JlFe~efi-ies--t:t6t: de leI ap eli 8:( :ReA JH!'efi-~ afHi eemlidef'ed at '!'islE EIIf' liJeftve~Bieft withift ~e. It4H~:':,Jlije:~:"f!,!i-1!!s a!'e Ute -Pale Alta GaliaeP:9,' t;fie SCfiel'::fiiaPl ,', .'t--¥a,f',taefttSi,'" a,nEi 1.t"a9t:!'aaeFs, Pafj( ."p,a;f'~lleflt;.,s. 'f':t'!ieI 'J!'MIilbulel! ~e IJ9'e, 8BMidM'Cii ,a'l!: ltialt\',I_:,'''u'\'" " ,e~nlla' , ),a ,',','e.,1:-.301l1 e toE! In: epay , • .... l:~~h1 ' a ~~~'~::,ef,',,:t,l ';",::,~,a ,Y~MS. " """....e)n41ni!"J aigl1t subsidized proj ect:s in. the g~~J'!IS!', 14e~t Lfi'!<i on. the aboVe table are owned p'r::::~triJ1:leli by :~ori:-profit or9anlz:at1ons": These proj~ 'ba:V:'e,.aleq,):leen, ra'Viewed for any po9sibl~ ~,~!~~;;?n: ,p~""use",z:estrictions within the ne}d ti,v~,:,:t;:) :",~ '-'years ',,)lnd.!r other state or l~ill ~~" ,""~-amS';:', ,"_ NOM or. tbase projects a~e !,'ubjeet,to,r"'1"latory agreeer.to which will expire Wltll'~!l':_,th;El',,':'next ',five 'to. ten years l none were bu11t tt'!,tIl'-.:'tax ,exempt: bonds 'wh1ch are eoml'ng duei 'and none" ,'were' ,bUilt under density bonuses with use t:estrietions -Wbieh could terminate. ,The projects which,"were: built using Moderate Reha!dlitation "und!>wbich .. "'111 co,... due in th.. next f1 V" to ten y-eazif,,::ar-e',:,: under the control ot the ,Palo Alto 1I¢",,1i\g',eorporation (PABC) which plans to seek ¢onti~ui5.tlon '" , of. 'all available subsidies .. !i1l¢.refore','these projects are not considered to' be "trisk.' . l'he' City's :Below Market Rate iBMR; units '(listed on,' pAge' ~9t are tor-sale units 'Which ,are subject to' deed restrictions which ASsure their continuation as afforQab~,e. housinq. A small portion 'of these units are he.inq rented as BKR rental units until the projects are converted from rentals to condominiums~ PIl017 b<k 0030360 J " 5 911011 We 0C00360 • e ~ 4!."", ~ ~ ~ !:~i !: ;I~ :0 :0 ~ n ~.: ~E: ,..~;:dl s;!: ... ~-. -~ d -~. '00 1'-:::;:: ..... ~ ~lili i;i~ ji;i~ _N~ _N. -"' ......... Ii ~~C> :.;too ... j:~ jjj ~;i~ • N~ _N • _N~ W • !i ~ I ~i 8--! I i: i ~ ~~ g I I~ i~ I!: ! , !' ,-~-c , I ~1 ~~ §i o. • > -> ~:! N-~i .0 NO H ~" !! i:i iE i~ ~--. t ..; i i i I 1; "" _c "" ~ i ~fi ~I o~ c" I~ sC i~ -< c~ "~ -. _c 20 i~ !~ :; • A .-.j - ···L .~::r I. i\$·.!ahown on t."e al:lovetable.witllin the next five ~~iperigd tile city could lose .. total <>1: 27t .. ~!ll:ed units 1f tile th"e~. projects at rial< iI~>l!:cOnV'.rted to· 1II4rk<it .. :ratehouslngi,. Putch." •• Rt<rep1a""""",t costa·. of .. such units.· would be ~tentiU. Based.oD estilaated. hndcosts .. of ~~2".~5 P«,I:'. square foot and estimated coljstrtlction !COs;te,"Clt ",$?5 pel:' 5qUare :,:fOQt~' it Wou~d ':c:ost .. the t:l.t~ .•. ". tot<ll of $)0+ .1I1i1lion· to replace. euoll 4ni~; ... !leplac<lllK!nt .is not a· realistic . opt:ion !Ih·"~:I:l¥o .. jhortaq .. of ... vailabl .... su.itableh~lng .+~ea~n':.I,ea!Jf!d ,',on current, 1Darke~, ~tas ,tor ,l;"iantal P~n::i.;'(~f .. quiYalel1t ... be. an4 1l'eadon .80<1.# ~',:,'~J1~,i',re8ources 6r-e',,'avail3.ble,:<,'~t ~O:ulQ 'co,st Fhe;,,·C1tyup .. to $20+ lilll10n to· !>Urollase BUell !#i~l;Oi, ..... . .. . . . . ..... ... . Re~urces: ::ay-a11abl~" to, aSsis~ :'in "prese,rving':',',the aft;,;~bility of S'Jell units include px<>vlsionsof r~,: federal and state leg~slation, 'lncludinq oPtio.,s· f<;>rpurch •• e an4 l\Ia11aqement by quali tied ~C!_~":"",';~n:.;..profit hOU,3iilg agencies ,or: t~nant 9~i,z-at!on6, and "federal and local' housing -I:1li>da' . . . traW',:',':teaeral ' ail'd "stat'. leqislaticii':',has recently l~~ett".nacted -lin recognition of the seriousness and 'm.a>~Jnftude of the potential loss of 10...,-income units throughout the state and nation. geee e~ep !ap lefi91~~~A has ~eeR eaaete4T ~e,::,;~"tnCome Housinlil Preservation' and Resident l!~.erenip 100t of 1990 (Ll:HPRHA) .. as enacted In ~8t"'",ot "_1990 to establish ,_permanent· .federal },~~,~~'atio~ '_ regulating the conversio!lr", of Pr:o~rt.Jes_,wit.h federally stWs1tUz;ed mortgag'es to _lUar.k.et:,,liate houainq. lFais le'fiela:tieft re~laeeFl t-fie Emel"gefiey J:,e. 1f'l6Bllle ile"dSifllj Preser .. a~iGfl---Ae-t, fiLIliPJ\' ef 19B7 .a9 ellae'teEi in Fe~:El:ia-fY-, 1988 a3 a' a-t:ep ,ap meas'aYe ~e aalh'eee tofte-flsteFF':ial leBs af t.fte f1iatisP.i's 19. :tReaDle llflit9. Ile._oeJ!', BLaiPA i~ reEfl:li:!'e~ Brill:! a PlaA ef Aet:iePi ~:-t t.fte~ ppiElr ~e Jlfepa)DleRt: 'Hut afJa£eseeds ElFll-y-pl""ejeet:s eH::§iele: tel!' pFepay:aeA't ~;f'i:eZ' t.~ FeiH'ti-a.:t') $; 19910 tlspse at the PClle ."l~a 1'1 aj-eet:s :fall i::ps~a t.Ais ,e_at.ege,F)T~ LIHPRHA establishes ,8 preservati.on program for eliqlble low-income housing proj~ts# ~~, allocated funds for purchase and rental SUbsidies to assure continuation of the a1'fordability of the units at ri'sk~ Palo Alto Gardens and Arastradero Pa~k Apartments meet the definition of -eliqible projects-. The Sheridan Apartments does not because it \rIAs not built under the particular federal programs LIHPRHA addresses. , • ., ," i .J#;;.> i - tni.l.'\:lI' :"tdek . can be pr"""rved·. by the owner CI~t;idln!l. to. r.~in ownership.er.joyin!!,. tbe ~~iv",fprQvided by LISPlUll'., . pr.through th .. iil!l.:.()~:~prpjltCt to ""1,,tinq tenant.;, WllOlOajl ~ : •• ll~~th. "orestr1crt.lons, arto .. non-prot,,-t *,~ln!!' ... "q .. IlCY. wllo IIIUS'; .... intalnthe ",nits .. "" iiubSj,(UUd .!lOlle,n!!' for the remdnl.n!J life of th<j "11~):a~ .. . ... . l'ed.riil. ... ~l.n!J sources in addition. to .tbose es~l,1,ii.belS un<ler.LIHi'RHA which can be pursued to it'~.': purchb" of <mit... at .• risk include l:<:\~ltl", Deyel"Plllent Block Grant Land Ba~ funds. an~'~t.e ,llehabilitatioll/Acquisit~on funds; ~Citt~i"",8 approlCiuteIy $550,OOQannu .. lly in'.~BG~, whicb.!s supplemented annually bi Pr"ll~,;tllC<"'!e .. f ... nds fro,. previous CDBG loans. ~:""l'~ tJle citl" l<lnd bands A portion ofth""" it'llndlj\it'ciracquisition/rehabil1tation of low-inCome !!Aui!,l;n\J;,.,:'.ln 19~~, $300,000 was added to. thalancl b!i1lk."fun<l, bringing th .. toul to 1.2aillion: ~h~ :f~ ,~ld potentially be used ~or purchase ~t"uilite ... t. rial<. . ~Ct:(~i1s",taken _by the state to preserve, units ,at :r:isk,,"i~iude two measures veife enacted ey:.~ ~ iri 1987.. One is included in the California Tax Conformity bill and provides tax: incentives for project owners to sell the development to non-profit sponsors .. ho \Io'ould maintain project afforClability. The second state provision (SB 1473, Chapter 1383) provides for notice of conversion to tenants and the public, and a public hearing, 'DIeFe is He pt"e. isie:A fat" eFlfe1!'eemeRt-. !'le elitieia) pl"e"'idet5. afui pte penalt-:J feF Rei".eamp}.iat'IIE:!e. State statutes enacted in 1990 (Chapters 1431 and ,1<4.3 a} ", -establish requirel&:tents wh ich expand upon ~ose,' e:stabl.ished by SB 1.7! and paral~el those ~~tabl!"hedby LIHPBRA. Such provisions include a requirement ',to ot'fer t"irst right ot' refusal',,, of sale to qualifying entitie.s who will ,...intain the uI"!1ts,',:as affordable units., a requirement for e:xpanded "public notice a.nd an increase in the notice requirement from six months to one year. Th& city has no Redevelo~ent Aqency which could provide funds for purchase of subsidized units at risk. Althou9h the City has no Housinq Authority, any "'funding available for acquisition of projects at ,risk through the santa cla.ra County HOllsinq Authority'could be available for purchase of units in Palo Alto. Hc~ever, it is expected that other areas of the County may be given priority -oVer s -----_._.,_ ... _ ..... - - ----_ ... --... -..... ~l,'l>Alt.,.·· .Local fUllds which could b<> used .tc ijQ1$1:n:~',ln"Wt:Chase of units at. risk 'Would "C()~ ~~., til" .. c1.ty'" hausinq mitigation fund·"nd ~idepthll.n-ll.eu hou&inq £U11<\. In· llln .•. the ~it~'.luit'L .. >t<>tal of. $3 .. UUon In th ...... ·fl1ilds~ ~ ... ,~IIM:.; .. :m.,t:he"e !'Und. ,,111 vary fro .. year to ~.l!''l~ ~J.ocatton. tor purchase C!f units "t rlek jj\!"It" ''''''''!' .. te .\li til other 1 ow-u,co,,,,. .hoU$ Inq pdoi>dd!'S 'ana r.equ."ts for fundinq assistance, ,'-' .'".,,,"-" ."'" ~~9h;·~t<;oMidered an eli'Ji!:>l. project under ~,'th .. S.hericlan Apartments are sUbje<:tto C1~f ,c.9ntil'OlS>M continuing .ffordabil1tythrouqh nlCbrded.cdnv .. yanoes which give the City .dgbtof Uril1:ir"!~~i,,hould the project be otfer~;for .1I~.iTh .. t"1..., ..... tabliah .. use reatr1ctiOn .. that ':~quir~,):h ... pr<>perty to be used for 1"",",. and ~,erB:~in~.,Te6idential r.ntal purposes -for 26 ~""" from,Jllne 0£1978, and reQUires a good faith .. r~9rt litretaininq the units as aft'ordableunits fa);. on .addltional 20 years (to 20~8J if sUbsidi"" Cb~t,inu-e' t,~' be 'available. ' ~i:\:palo-,:Alto':llQusin9' Corporation has express,ad :in'f~t:'EUJt:'_',:in ',':J'UX',suill9 purchase and management' ,or tb~;uri~~ ..... ,.,i:'islc: should thoy be pu.: up £orsal.e. ~te:-.":~re:,',,a', "l!~er "of, other qualifie~ loca1, all'" te9:1,o!';~l;':-:n,pn-j:)rof1t: housing orqan1zations' "Which ¢ol;ld·;al....b¢ . eligible to pursue purchase an4 ~!Jemel1~.ot. iNch UI1.1 t;,.. . ..... ¥Urthey e"i'all::la\;isFl af "-he r-efltoal ltj"i~9 a-1:-risJe ef 9\i:e:9i~ less .P 1 ~e iPteltleieEl in -a----£l:It-l:J:f'e itJ!ela-tc ef tHe ee!B~E'eftePleL e Plafl, sefteal::lled f~ eampl et i 8ft 1ft Jaf\l::la~ 1992. Elefe!'f'al toe tft.i.s---4at:e is pa~~l) 8eea~5~ it is aft~iei,a,,"ed t~a~ etfer~9 viII ~e E'tatle at to}},e at-ate af'ui federal leuels toe prs'fieie aaeiit-ieftal 9ctesiEiies 81' ineef'lt.i. es -----t-e eFleel;i:l"a~e toRe E"eteftt:ieFl sf 1:ohe Ie .. iFle~ 9ta-tst:J:9 at I:!f'\:ite S\lEIj ee~ toe a st:J:esili) less, .1" t.h~ .eaf'\:!~-i'me Given the pOtentia.! loss of 279 af',(o'rdable uhits, the City eilet:J:1El O":er the next five, years will -carefully .onitor the st.atus of ~he ' ' Arastrad e-ro Pa.rk, palo AI. to Gardens and Sheridan,Apartments tor the filinq of any notices of intent', to sell such units for at: !'islt 81 ~~v6r$ion to market rate housinq. &ft8 The City will also actively assist local non-praiit IIcjenc,i;.es in pursuing tundir,g' to purchase such units: should the.y be offered for sale. Sucb assistance includes technical assistance in preparinq applications tor federal funding under Ll'HPRHA and possible allocations of local funds for costa associated with seeking funding. The 9 -'--= -" L , , , . .-.-1 • ~ ~_f _,' .. ,., . ., .. ·-·'··."··.··.·.·1 t • t i - ~ti¢9oal,wOOlc1,be, to ,!ssure pr .... ".rvatJ.on of ,,:q,>,~7l!:1Ullt8. "~n ad,Utlon the Clty should ~t:£#\'9~ "',t~ 'actively pursue and lobby for re ... eist:al:llisrunent of federal and state rental subsidy programs, and' ',,' lobby" " for' eftei:t.!v. ~,ats,!:>~at)I:l tu,ll~ng to>: LllIl'l\RA, "The Cl:~y: __ s,ll,<:)uld ~~so, pebleta~e 'CAe r,ee.stablish a ltx:al ~,U,~l"'i')I.t J>ro9r .... (Piggyback program) when a'n"'"appropr'late rental assistance program becomes available. SECTION J. Program 6 (co~encin9' on page 26) of the Housing Element is hereby amended to read as follows: program 6: P~ovide rehabilitation assistance to low-income households in palo Alto~ proqram Responsibility: Planninq Division A housing rehabilitation program was established by the city in 1914, which relieC: on Federal community Development Block Grant (CDSG) funds. The proqram provided loy-interest loans or deferred loans. Since it began, the proqra~ has loaned over $3,900,000 to 370 homeo~ers in Palo Alto, 97 percent of whom have lov incomes. The majority of loans were provided to seniors and female sinqle-part!nt households. At first, the proqram concentrated on two tarqet neighborhoods, but -moved citywide in 1978, 'With loans reserved for only low-income households. This program was considered successful in its early years. In recent years issuance of such loans has been steadily declinin91 partly due to a drop in demand and partly due to pctential borrowers' inability to meet the pr-ogram's low-income require::nents. The smaller number of leans issued today no longer warrants the administrative costs of running this program separately. Therefore the program t ill he was ~fiea pl'ia:Eie!! etl't in July of 1990. The annual CBOO fu'nds ~ormally allocated to this program will be used for""other, housing ~ssistance programs. rhe income rece.ived {rom payments on previous loans (Pt'09ra.m. ,il)come) issuw in t.he. program ,..i11 continue to be 'used to issue a S1IU111 number of ne .. bo.e improvement loans tor those who-meet the qual1fications. The City expects to issue epproximately 20 such loons over the next :five years with an average of 3-4 ne.W loans per year. The City's successful Senior Home Repair Program will continue. This program is designed to provide repair services at nominal cost to all 10 1111017 II« 00l0l6O • t - $*n:lorlll with. :financial assistance provided on a sl"i,a:1.ng scale to senior home vwi1ers with 1 imi ted incomes 4 Rehabilitation is expensive f and present occupants, especially senior citizens 'With limited incomes, may not be able to afford the additional costs unless the:t have financial help. The Senior Home Repair Program, ~hich is administerea by the Senior Coordinating Council ana partially funded by the City, provides suLsidized home repair oervices to assist senior homeowners~ S.er tile s"B,ei:iieea t!I,e~·iees ,8l"e ~erfcRle5 aftJ\ltially= Botle tep,.,i.-# 'ro%:' , apprp.:ximate.l)' 3-00 senior households. ~,50:,'"" o'f which are subsidiz:ecl, are perfoaed anr+,ally, l'lii¥',:'~Ci:t:,y.",al,so bas,:'an energy, res~ce management P~"""' (see Page.4S} \oIh1ch oHers 10\1 ilIterest ~oaos"to'~esident~'who weathe~ize or install solar *l"iltoim.$ in i:heir hOmeS to SAve energy. An av.e.rage pf:,;fOO loa~ were',lDade,"per year ~hen' the prograa ~~'-,,;tlrat,.',.ta'rt.sd, in .1978.. The program now issues ;(U.,>,:,"~;~ge" ot" ,25, 1'oans per year. HoweverjO the ~oans' 'are nO,t spe.cifically targeted to low-income hou~~oldS,and 40 not have specific income limits. Priv'ate, aarket" "f"orce-s ,-also contribute to the reha.bilitation and conservation of the local housing .. tOcJt.. BliHding permits issued between 198.7-.1990 . for repairs and a1 teraUons to single family units averaged 652 units/year and Lor IlUltiple ,furlly, 'unite '!2 or more units) averaqed 150,)lnits/year •.. HO\Iever, it is. estilllated that only .. very SJDall portion Qf such repairs actually serve low~lneoma:households~ Rental property o~~~rs can contract ~lth the Santa Clara county Housinq Authority to provide federal rent subsidies. U~fortunately, private landowners have lew incentives to make their units available for these federal assistaT1_ce programs~ with the limi ted supply of r-ental housing j owners t,ave little problem renting their units. In addition, the Federal Government has reduced the dolla::-s allocated to this program~ Currently there are 80 Palo Alto households on the Housing Autho;rity ~aiting list to participate in this program. The Cost of Housing State and federal policies call for communities to provide housing for all income groups j and Palo Alto has attempted to see that there are housing opportunities for people with a wide range of incomes. The trend toward ever escalating housing costs continues, however. Housing costs have 11 911017 b« OOJO~60 --, -<_. __ ._--..1.-,-. ________ ._. __ ." ...... '''tt>dI .... ''' .. £ ...... __ _ risen due to inflation in materials and labor, and continuinq high interest rates. Additional local reasons for the increase are the high demand for housing in Palo Alto, which is heightened by the scarcity of land available for new housing development, the larqe numbe.r of jobs, and the demolition of lower-cost units to :make way for expensive ne. construction. When the price of housing goes up, large segments of the population gradually become unable to co~pete for housinq in Palo Alto: Middle-and particularly cannot af ford moderate-income households, those 'With children, \II"ho to buy a home in Palo Alto. seniors on limited incomes, rensions and Social security. such as Households with public assistance rents4 low-paying jobs or or. 'Who cannot afford high The homeless and near homeless who are without incomes and savings necessary to obtain lonq-term permanent hou~ing~ Stud:e.nts also q-enerally have limited financial resources. Those who do not want to 1 i ve on campus or who cannot be accommodated there because of lack of space in the campus housing system, however, may be able to compete in the hOlJsing market because tl1ey are willinq to share units with others. There is no .... ay to estimate the number of householos who, although they ~ant to live in Palo Alto, live elsewhere because they cannot afford to live here. OthE'_rs, ~ith strong enough reasons, do decioe to live in Palo Alto no matter what the costs. The costs incluoe not only paying more than tl .. ey want to pay tor housing, but also living in units which are structurally inadequate or overcro"'ded~ In 1980, 7,400 Palo Alto households, over 35 percent of the total househclds, were paying over 25 percent of their ::aonthly income on housin9~ Forty-nine percent of all renters (5,130) .. ere paying more than 25 percent of their gross income on rent. OVer 20 percent of homeowners were payin9 more than 25 percent of their income on ownership housing costs. Almost one-half of the households paying over 25 percent of their gross 12 911 0 17 bd.;: oc:ncl6O ;;:':.. .• ;0 . ..:.._ ....... _____ ... ~.y.~.~ .. P~.-.. ~~,_ income for housing ~ere very 101,1{-and low-incom~ households, with iMco~es less than eo percent of the county median. Nearly 3,000 renters~ and 6JO homeo~ers, fell into this category. ~hough updated census data is not available, it is expected that these figures h~ve substantially increased due to increases in housing costs ~hich have occurred in the last ten years. The Association of Bay Area Governments (1\3AG.) estimated in their 1989 Housing Needs Determinations ProjeC'.tions that 3.3 percent of low-income owners !!find 74 percent of low-income renters i~ P~lo Alto spent more than 30 percent of their incomes tor housing. Seniors are particularly susceptible to the hardships generated by rapidly inflating housing costs. Although most seniors now living in Palo Alto would like to stay. many are finding the expenses of increased rent or maintenance costs more and more difticult to sustain. Housing complexes for seniors of low-and moderate-income t,ave '0 many requests that soml:!' have stopped taking names for ~aitin9 lists for long periods of time. Annual estimates of housing need are included in Palo Alto's Housing Assi!:.tance Plan, which is required as part of Palo Alto's annual application for t~e community Developm~nt Block Grant Program. It should be reoognizQd that as Palo Alto is made an even more desirable place to live, demand tor housin9 will increase. pushing up purchase prices and rents even further. Increased housing costs -make it even more difficult. for 10.-and moderate-income households to make ends meet in the Palo Alto hou$ing market. This ~akes it even m~re important to have public policies which en courage housing which can be afforded by 10.-and moderate-income households. Without such poliCies and programs~ the supply o~ lo*,er-c:ost housing .,i11 continue to dwindle and 10'1{-and illoderate-income o ..... '7lers and renters 'Will continue to be pushed out of Palo Alto by redevelopment, conversion, and rising rents. New residents will be only those with higher incomes. Priorities For Increasing Housing Supply The character of a city is determined by the type of p~ople w~o live in it as well as by the quality of life, amenities, and services that the city can offer. Many Palo Altans, not only those on tne - • • \ --... ~.~----- verqe of being sque~zed out, are c~ncerned about the loss of the diversity and balance the community once had. To assure that housing opportunities are avail-able to a ~road spectrum of households, neW" multiple-faroily housir.q should result in significant amounts of housing that houSieholds earning 10W'-r moder-ate-, and middle-incomes can afford, whilr. maintaining those qualities which make 1 ife so attractive in Palo Alto~ special attention should be given to affordable housing for households with children, senior citizens and for people who 'Work in Palo Alto. Special attention should also be given to the housing and service needs of the homeless or near ho::ce.less. The Palo Alto Co~prehensive Plan housinq policies and proqrams reflect the assumptions that: Federal subsidy programs -would eventually provide housing for those households with inco~~s less than 80 percent of the county median. The Below-Market-Rate program 'Would ofi.er housinq for those households with incomes bet'Ween 80 and lOa percent of the county median. The private market would provide housinq for those househ¢lds with incomes above 100 percent of the County median. However, by .1989, virtually all first-time buyers with incomes less than t'Wice the median were excluded from the local housinq market. An income of nearly $116,000 js n~eded in order to purcha3e a $404, 000 ho·~se, the median price home in 1939. Such high priced housing is not "affordable· to many households. 1-..s used in ~he Comprehensive Plan, affordable housing is that which can be pur chased or rented by households 'Whose incomes do not exceed 15C pe!cent of the median~ and who pay no more than 30 percent of their gross income for this housinq. There is a continuing substantial need for af£ordable rental housinq in Palo Alto. However, revenues from market-rate rental units, even with low land cost.s, tend not to cover the costs of constructing and financing new rental housing unless such costs are reduced through subsidies or significant innovations in financing developments. 14 11 ~ , In o~der fo~ the City to make progress in p~ovidin9 afforoable housing, a wide array of programs and activities must be pursued. SECTION';. The 1990-1995 Iutplementation Goals (on page 56) and accompanyinq Table J (on page 57) of the Housing Element are h6reby amended to read ~s follows: 1nO-199$ IIIPl.EMEN'I'ATION GOALS Within the last five years, the City has substantially revised all of its sinqle-end multiple-family zoning regulations. In addition, the citywide Land Use and Transportation Study, adopted in 1989, redesignated approp~iate commercial areas for reside~tial purposes. Due to these chanqes, and in vie~ of the fact that Palo Alto is essentially a built-out community, the implementation programs are not time specific but are intended to establish an approach to be pursued on an on-qoing basis. The proqrams contained in this housing element have continually :been evaluated for their effecti veness and continuinq applica:bility. As deemed necessary, new program,s have been added and old programs ha .... e been lDOdi::tlad fieletea. Speci fic housing unit qoals tor the 1990-1995 five-~~ear implementation period are shown in Tables J, K and L in this section which follow. Increased housing opportunities tor lov-and moderate-income households is a major qoal of the Housinq Element. It is recognized that meeting the full demand for very 10 .. --, 1010{-and moderate-income units will be difficult. Implementation qoals for programs which attempt to increase and improve the housing supply for this population are ~hown in ~a:ble J. 15 ~-'"'-""'''''''''. ~'-----",,;e"''''''IIf. ___ "L"'. ___ .. TULE J 1990-1m LOIMI"MI'XIEU1E I~ ~lllCi GOoI.LS IoN C.:.-.t!""lXt i Of! Progr. 3 • C:C)tt~~ :"'-'its 10 15 Protr ... 12' IIflow-""rht· _.t. prq;r. 10 " '''' ProgrM 1] -l ll;ted !".:;. '-,. ,. '" 'rogr. \2-~ t.Ir1its 2<) '" Proar .. 1C1 .~ Dnwl~t .lL -L. ---- TotAL! " '" " '" 25 200 ,oa. yU? lCN l..~ J«lCnAr~ IIiICM !I!.! Elclstf,.. "" !l.!!! !!.!i !ill 1M ,,_,,:,~(~'~:,~', ~~ ~ a _It ::','i'~~~ __ :':"<':~,:'.''', ,,"'~..,.... .",. ,.,. ...~ Pro>gr_ 7 -Sl'lared Mau. i ng .. ,-'" ",. '" '" 15 15 Pros:r_ 19 -$eetiOf! S Elci,ting or Voucher Recipients " '" ~;'; ~-~ ..i'COMMwtfcn 4t::~g:,;.t~tlar (219J'" ~11~ (S)~ Pr-oer .. a:.26 • Rent.l MC)UI;IrII ~i.i tI~ Protr_ ~ 15 .. :IS TOTAl. ~ '" .". ., =. 15 ~'" Ilottif.: The ""Ie, tot" ~tlcn nJ r-.olHhtloo fit the extUlno f'ICIuIIlrIO JiIIIit ~ , "'" I K':XI ~ 'tIM-fOI Ls for ,,",*" __ '4 25.-.-d 16 • • .. lnclUIiH. .,.l. 'Of' u.. ~Iot" Moe ... It "tOF_ Sd$idi~ ~it •• t~.'1k UI be praer..d th~ .PU"'thll5C b)' ~prafit ..-ncJ .. ~hi ... urit .... o1'f..,. .... far , .. t. tIrId ~~ fwx:fi".. _'.U\"Ite .. w.Ullbte. TbeM ~l ta ~. fm: Inct~ In tt. tOhll • rt f. fICIt ~ .... tar v.., ."H( be af~ for' .. I. fQr eMTerliOl':! to .uDt t411* hawfl'lli whhfn. mt not fl ..... )'IIIlre. SECTION 5. Program 20 CcoiUDlcncing on page 38) of the Housing Element is hereby 4mended to read as follows: Program 2Q; Waive application fees and assist local agencies and nonprofit organizations in obtaining funding and conditional use permits to operate emergency shelters and transitional housing .. 16 9110l7Do1k ~~ ".-. • , -.. ---_.- l!_~ralll Responsibility: -Pla:ftuiRtJ gepaFt~ ""1>'",.1;""",'0 .Qt Plis,...ninq &nCi Community E,wlrol'1JllaJ!tJ Department of social and Community Services a-99~"'Aetion. Revie'o' and Adoption or ordinanc. I;".,"&i"" ~ppH.""Hon fee .. to furtll"" this P"09'''''''',. to: .. !>CC'll'bY.J\lly of t99. current city zoning and. development regulations allo'W for operation of transitional housing and emerqency shelters as conditional uses in tt-.e City's commercial, multi-family, and single-family zones. Areas of the community located closest to employwent, transit and social services are considered the Most appropriate locations for such uses. Small facl.lities are considered most appropriate for residential areas. Lack. of funds, lack of sites, lack of existing suitable structures, and neighborhood resistance are the greatest obstacles to expanding the City's supply of emergency and transitional hou6inq. The conditional use permit process provides a means ~~ monitoring the HAi~e distinctive characteristics of such uses and allovs for application of operational conditions 'Which can help to alleviate neighbors' concerns~ The City can assist the estab~ishment of nev shelters by adopting an ordinance to waive application fees for such uses. Ultimately, homeless problems must be addressed nationwide through programs directed at providing jcbs, services, and. sufficient amounts of affordable housing desiqned especially to m~et the variety of housing needs of diverse populations. SECTION 6~ Program 23 (commencing on page 40) of the Housing Element is hereby amended to read as follo ... ts: Program 23: Consider construction of new SRO hotels in ~uitable locations. Program Responsibility: Pla,miAIj Bi".'ieieA Oepartment of Planning and COMmunity EnvlronmentJ De'partli1ent. of Social and Community Services An option under consideration by the SRG t.aa-k ~ City is the possible aedication o~ a Ci ty-owned parcel fof' a new' SRO hotel to be developed in conjunction with the Palo Alto Housing Corporation. The City has also directed its statf to pursue adoption of state authorized Building Code a~endrnents to reduce standards and cO:'1struction costs for SRO' s. The City prC'poses to accomplish such a)!.endments by July of 1992. 17 ~ 11 rH7 b<k OOJ03o!iC . ·~. ___ ,"'-t"'_ ....... ' ........ .,,, .. » ... ,,,, ..... r ~ ...... " .. ~ - SECTION 7. Program 28 (commencinq on page 44) of the Housinq Element is hereby amended to read as follows: Program 2~ Recognize the Buena Vista Mobile Home Park as an impo~~nt resou 4 ce for low-and moderate-income h~usinq cppol~unities. Pr~ram Responsibility:, Plaftf'liAq BLd:sieP'1 pe~ ()fl'lllnrlill9' and co .... unity EnvirOllllHOllt ~ .. ~ .•....... hl': ....... 'Aot ...... 1 .. on .. ; ...•••.. citYlotart to explore ., .... n.Il.· .. ·.· O~. ,"'iU#t:!:nq J.' .. "ialOpt& In pres8ri1i1l9'the l31iena .Vlstis !!c$~,l,e~l>lael'jlrk 'f~thln three years, loy 199.(. The Buena Vista Mobile Home Park located on El Camino Real currently has 115 mobile home units and t~elve cottaqas. Though several of the units are substandard, the site provides a valuable supply of lOloler cost housing. High land costs make development of ne';i mobile home parks unlikely. The City should explore means to preserve the park, including assis'Cance in obtaining any state funding for residents' opportunity to purchase the park, should that be deemed feasible ana desirable. One pcssibility is the state of California's Mobile Home Park Assistance Program (MPAP). This program provides low-cost loans to residents up to a total of 50 percent of the cost of convertinq and purchasing mobile home park grounds. Allocation of funds is based on the number of loY-income applicants (below approximately 6:5 percent of county median-income). SECTION 8. Results of 1984-1990 Housing Action Plan and accompanying Table D (on page 53) of the Housing Element are hereby amended to read as follows: Results of 1'84-1990 Housing Action Plan Palo Al to accomplishe_d 866 of the :2 ,lOa residential units for£casted under the 198'-1990 Housinq Ac~ion Plan-(see Table G on page ~ 54 ). This is largely due to the fact that the Stanford West project, previously estimated at 1,140 units, ~as not built. Table D shows the total number of housing units added in Palo Alto since 1984. Table E shOlois the number of bousing units added due to redevelopment of six surplus school sites. Table F shows that the units expected as a result of redevelopment of commercial or industrial sites did not occur~ The Page Mill site between Hansen and Hanover was developed with offices for tt-.e Varian corporation. 18 m ~. ~ .1 j I llII pU 1. EST r.n: LlWli U!'f!! , . Slnit .. -1_fl)'ftl~loe.o; ,'-' .. ,.. .. Si~le-.. _i 1)1' It SChOCll SitH lJfi..J 20,'1 '" '" S. HOO With R06Cf U 150 IS() ('2 ... r .. lI~tel'.J .. 441. S." Al1tt)l"';io 110.1 5.' l:,. .. 5. m Lalli Verde-1.3 27 .. e. j(..(l cenfomia"a .. k U .. 43 7. 737 L~ V~rde , .. 12 12 S. 382 OJrt~ ~ _::z , • o. m1 El c_rno Real , ,5 " " ". "46 El t:.ino R",! ...U " • 1>. """ltiple~F_lI, It Sr;fIoot Sit" J7..4 27.' '" '" Il. OtMr "'-I' tlpl .. -F_lly a.o ".~ ,,. , .. glOT!:!." -UI-t Z! I ""I!!I , .., -R.!!'l i t ions -191 !DIAl, ,1b.et~t", ... (f~ ~ft ...... HIliHII! '«I. CIon: ter. bill.' fat. Jfld~~I"!Il"',f_I'~, ... lt~"' fOt' '"'~ Of"befna t~..t .r:1tw,~ JlledI~l c.n:t- SECTION 9. The City Council, by Resolution No. 6912, adopted June 25, 1990, approved a Negative Declaration in connec tion with its adoption of the Housing Element., which Negative Declaration encompassed the amendments herein made. The council therefore finds that no further environmental as~essment is requireQ~ INTRODUCED AND PASSEO: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: senior Asst. City Attorney APPROVED: Mayor City Manager Director of Planning and Commun~ty Environment 19 • \ .' , t I ' .. ATtACMMENT 2 Enl.lironmentai Dc·cuments -City of Pit10 Alto Project De.scription/Title: T.'2-e_ prOPGSe9_~_::....~_c:_()_nsists oL~.;aE'el,dments to nth!!! City of Palo Alto'_s_Comprehpnsive Plan'_s)984 H~_:~ .. i.!~.£LU~g_~Urefer...!._~ §.4-EJA-31). _ The a-:Japt.i_ol'l of th.t~_ amended nHouslr.gl}ement iSm in aL·C2_t~<J.;'lC~ with the ,.state of Ca]ifornia'~ ____ reguireme~.!.s for c.ities and c o 2.unties to __ update their housing el_~~ents every five yen'!tS, Th~ HQu'i ins (1~lllent ~rT\.ines ~~~_=- jM housinq c;_~nditi(jnsl _ij€:l1tifie n Lhousino fl_~_e:_c!s. and ___ J_:2..2.~~ .. L9.9 __ ~Ql}..s.ies !-f,d iction __ ~ams. __ .!_o address ___ th'Jse i1~ __ f\tif~.il_eeds. T~_~ __ RrCPO$~ ___ a~e.nd- ments incl\Jd€' nglll pOlicies ~o.3I __ a""s fvr tnen"'pro¥1sj_9iln (If trans __ ~_1 __ icnaL2p'~ ei;,er...i~~_\jsirl9 fer _ the ~,cmelg~L~!I_Crei\~_a_fforjatl_\:_n hOIJ~l'1..2..-for 1~n~or$. t(;,~sL... __ the below-market-ra~~n l1T)u.:,~ _____ reQu~re.!fi_~_~':'::"_"'n1Jn~~ developmer~t wlth~_I!.. __ ~~ A1so included is a pr091",.arn to recnQ,S.!'lize the _Buena Vis_!:.,i!: Mobile _Home Parkn~n~!!I. .. :Lr.!lpor-tant :resource as_n a 1ow·mod~rate i rlcome hous i ~.9n opportun_it~a __ 'p_!:QS.~ to revisE! thi! cog_~\:tl_nance to ___ ~f:cns;d~T __ a11owlr'!Ji _____ both a_.ttil'ched_ar.d detached units. tocation/Add:""'ess: __ f~ty'wide. ---------- Spo~soring Agency/Applicant: !i~~t Department. ------------------ Address and Telephone af ,tI,ppl 1"'cant: ?50 Hami..lJ.Q.!!. Averw§J PC 30)( J 02S~.lQ. ~(A 94303, j!hon" (412L329~2J7C. __ ______ _ Application for: Ado .. pt'ion of re',tised ).990 Hou5_Jng £1emE'..-nt Update_l' __ n19g0- 2000. (e~zoiiT~iig~ubdi"iSi\l11 of property, arcnlt¥:cturd1 rel.liew, use p.rmit) IQ~in9 at ProjEct location: Varies ~e€ Receipt No .. :_J!! __ A __ Based t.<pon r-e:'v1ew of the p!"'ojC'ct files, the under-si;rred mE'mger of the Viannir,g Departmellt has ctmel ude'~: !!I Neqative Dechrat}on: The project has no sigrlificant !:''lvironmental impact.. No Lwironmental Impact Report is req-uired.. The reasons for a Negative Dec' a ra t i an are: the npo 1 i c i es ___ ~_Q!!....e_Q)..9.C~nr:!l_~........f£...I: t a in~ .. E:'nd in th i ~_nEl eme;') t __ ~r::! m i _!..i 9 a t i on __ m E' a s ~~ __ ~(jdress , 'l9._...lb...e_~x..isn~ __ i_~h...2~i"_9......EED b l';nrr~~_ i 11 the nflit:.. 1M e ado p t_ ; () rl 0 f .t..:~_~o 1 i -'-!~'_Q...nRt~JE.~~_i.._L~! .. _h __ ~n~~_~_£.~_1f i e a Q! e ffee t _~_!'l the £~YS i cal e~_\1 i ronme n t..~~IlI_§_~_t a t i crJ......E.f.--!.t~......P..Q..l_J._c i e 5 _~'1..9. £0?.9_r ams ~ ha ve _! ____ ben e fie i _il..U~_~_!.... __ Q __ ~~c:3. __ P rob 1 ~~E.. _____ ~l!.~_£<:l_r!1_': !!I_unity, s.ee-attachm2n.ll,,: __ 1=[ The prcject may ha\le a significant env~ronmental im~act_ An Environme~tal Impact Report will be prepared .. file No. 90-EIA-Z5 Page 1 \ " Pl anning Planning The project has beefi approved. T~e proj~ct has been denied. D(tt~: Date: File No. 90-[IA-2S Page 2 ...... _------- .. - r. , ENVIRONM£NiAL DOC~MENTS -PALO ALTO EIA-2a lNITIAL STUDyl,1 I. Froject 1itle/Address: __ Amendment to HOl1s_:L1!.9. Element of thE! Compre~ensiv~ Plan II-Project Descriptio:1;..A~pti",., of amended ~cusing Element of the Comprehensive Pla~ £II. Envil'"{lnmEJ;ntal Setting:_(i.!.l: of Palo Alto IV. En .... ironmental fmpact Checklist ,Explanation of all "ye~" iln5W'~rs ,are in Section V) 1. Ea~th. Will the proposal result in: a: Unstable earth conditions or changes in geologic substructures? b. Disruptions~ displacements, compaction or o\lerc.overing of the son? c. Change in topograp~y or ground su~face ielief features? d. The destruction~ coveri~g or modifica tion of any unique geoiogic or physical features? e. Any increase in ~ind or water erosion of soils, either on or off the site? f. Exposure of people or property to geclogic hazards such as earthquakes, landslides, mudslides, ground failure. or similar hazards? g. Changes in siltatir.n, depos~tion, or erosion which may modify the cnannel of a river or the bed of a bay or in1et? lAdapted f!"om Appendix It California GUidelines for fmplementation of CEQA, December 14, 1976. 2Updated May? 1982; June, 1983 fIAFMCK SC 9 -EIA- _x_ .L x x • .- 2. A.iT. Will the Pi'oposal resul tin: ;i. Substantial air emissio"s or deteri"ra tion of amb1ent air Quality? b. The cr~ation of obj~ctiunable ordors? c. Alteration: of air movement, moisture temperature, or any ~hange in: climate, either 1oca11y or regional? 3. Water. "ill the propos-al result in: a. Chang~s in absor~ti~n rates. drainage patterns, or the rat~ and ~mount of surface water runoff? b~ Alter"ations to the course or f10w of neod 'Waters? c. Discharge into surface waters, or in any alteration of surface ~ater qual its, incl uding but not 1 imited to temperati.Jre, dissolved oxygen or turbidity? d. Alteration of the dire:ticn of rate of flow cf ground waters? e~ Exposure of peo~le or property to water related ~azards such as flooding OT" tidal waves? f. Change in tne quantity of ground waters, either through direct additions or with drawals, or through interceptions of an aquifer by cuts or excavations? 4. Plant.tHe. Will thi!! proposal result ir::: ElAFM(K SC !. Change in the di~ersity of species, or number of any species of plants (includ ing trees, shrubs, grass, crops, micro flora and aquatiC plantsJ? b. Reduction of the numbers of any unique, rare or endangered species of plants? (. fntraduction of nt2'w species of p1ants into an area, Dr in a barrier to the normal replenishment of existing species? d. Reduction in acreage of any agricultural crop? .-~ 9 -ElA- 2 _x_ X x X X _X_ -~- ... . " , s. AnimaLLi.f1. Wnl the prQ}:.osal result in: a. Change in the diversity of species, or of an.v 'Soecies of arli:r.a:ls {birds, lal1d an~rna's includin9 rept11es, fi~h and shellfisn\ benthic org2nisrns, insects or microfauna} ? b. Red~ct)~n of the numbers of any ~~ique, rare or endangered species of animals? c. Introduction ~f new species of animals i:-,to an are-a, or result in a: t.-arrier to the migration or movemer,t of animal s? d. Deterioration in existi.n,9' fis" 01' "lTd· 1 ife habitat? 6. ~ois..§.. Will the proposa1 resuit in: a. Increases in existing noise ievels.? b. Exposure of people to severe noi~e levels? 7. b.ig_~t an.j' Glue. Will the pr{)posa1 produce new light glare? 8. Land Use. Will the proposal result in a Sybstan£{al a1tera.tion af the present or plann!d land use of an area? 9. £n~rgy/Na!ural Resource~. Will the prop~£al reS!Jl tin: a. Use of substantia.l amounts of f~el or energy? b. Substantial increase in demand Upon existing sources of energy? or req~ire the development of n~w ~ources or enerqy? c. Increase in the rat~ of use ~f any natural resoorcp.s? d. Substantial dep1etion of any nonrene~ able natura1 resource? 10. Risk 0L-_~p_~n. Does the propnsa1 invo1ve a risk of an explosion or the release of hazardous substances (including, but not l'mited to, oil, pesticides, chemicals or radiation) in the e~ent of an accident or ~pset? El~FMeK se ~ES ~Ec¥SE NO I 9 . E\~- 3 x x x x • , , , < . . 11. tQPulition/Housing. i. Will the proposal alter t~e locat~oI1, distrjbution, density. or growth rate of the human population of an area? b. \fill the ~roposal effect existing hOlJs ;ng. or create a dema!ld for addi· tional hous; ng? 12. TranSDOl"'tation(Circ::_tD._~. 1f~11 the pro~osal result in: a. Generat~on of substantial additional vehicu?ar mOVEme~t? b. Effects on existil"1g parking facil lUes. or demand for new parking? c. Altarations to present patterns of c:irculatinn or r:10vement of people and/ or goods? d. Incr~ase in traffic hazard~ to motor vehicles, bicyclists or pedestrians? 13. Public Service.5. 'I.Ijl1 the Droposal ~ave an effect upon,-or result in Oi. need for new or altered governmental services in any of the following areas: i. Fire protection? b. Po1ice protection? c ~ School s? d. Parks or other recreational facilities? e. Maintenance of public facilities, inc1uding roads? f. Other governmental services? 14. Utllities. Will the propos.al result in a need ErAfMCK SC for l"Iew systems~ or substantial alterations. to tfle following utilities: a. Power or natural gas? b. Communications systems? "'-;. • \ , -. , ," ____ ., __ .. "" .. __ oo.;.;-'....::~. ~m NO _L. 9 -ElA- 4 x x x -.L X • <,.' /- t, '~ ~ ) .. ; :1 1 l • i i ! ErAFHCK SC .' ~, (. Water? d. Sewer or septic tank? e. Storm wat!r drainage? f. Solid waste ~nd disposal? 15. Human Hez1t~. ~ill the prop~sal result in: a. Creation of any health ~alard c; potential health hazard {excTuding mental ~ea1th)? b. Exposure of people to potential ~ealth nizards? 16. Aesthetics. Will the proposal result in the obStruetTOn of any scenic vista or view open to the publtc, or will the PI'oposal result in t~e creation of an aesthetically offensive site open to pub1ic \'lelol? 17. Recr~~Jion. lIill the proposal result in an ; mpact upon the qrJa 1 i t1 or quant ity of ex i s t ing recreational opportunities? 18. Cu1tural Resource~. 01:. Will the prop'osal result in the altera tion of/or 'to"-e destruction of a prehistoriC or historfc arc~aeological site? b. ltIil1 the proposal reswTt in adverse physica1 or aesthetic effects to a prehistoric or nis~oric bu~lding, structure;, or object? c. Does the proposal ha~e the potentia1 to causes a physical change which would affect unique cuTtural values? d. Win the proposal restrict existing religious or sacrerj uses witbin the potential impact area? YES t1A!8E NO 9 ·OA S L --' L _L _1_ x _1_ x I ---.~" .. #'_ ...................... -...... ---~"~------- , . . 19. ~~_~.datoTl Fin.jings oI'Jf Significance. I. Does the projE"ct have the pot~nt ial to ~egrade t~e quality of t~e environme~t. 5ubsta~ti~111 reduce t~e habi~at of a fish or wildlife sp~cies, cause a fis~ 0"'" wildlife poplJlatiorJ to drop below self-sustaining lEvels, t~reaten to el imlnate I plant or-animal c:orMIl...nity. reduce ttl! n\,.'mber Of rfStrict the ia!"!gE ~f a rare or endangered plant or animal or el iminate i~portant examples of t~e major periods of California ~istori' or prenistor)'? b. Does the project ~ave the potential to achieve SMort·term, to the dis~dvaMtage of 1ong-tel"1ll. environm.;nt.l goaTs. (A short-t~~ impact on tn~ en~iron~~r.t is one which occurs i~ iI relatrye11 brief, d€fi~itiv~ period of time while long· term impacts will end'Jrt \IIIel1 ir!to the future.) c. Does the proje(t have impacts .... hich are individually limitej, but cumuhtivE'ly considerable? (~proj€ct may impact on tWQ or m~re separ.te resour~es ~here the impact en ~ach resource ~s relativ~ly small, but where the effect of the tota1 of those impacts on the environment is significant.J d. Does the prcject have environmental effects which wilT cause substantial adverse effects on human beings:, ettner directly or indirecl1y? V. E:.:planation of ·yes" answers in environmental cher.kTist See attached. EIAfHCK SC • ~ ~ __ c.' J:i;~&~ _______ ""' .... MM~O~___...~:; ~.-: x _x_ _x_ ~---. / '.' Thi! reason for a Negative DecTaration for this project is that the proposed pOlicies 8.1'I.d their implemerltation .. ill promote 11.'1 increase of the hOl!~ing sup ply which wouTd resuTt in af1 overall benen'.:-ial effect on the physical en vironment. Any 'ncrem~ntal increase in the flLrmber of hClJsl:1g \Jnits would re duce some impacts issoclated ... itr. the jobs-te-housing imbalance (such as traf fic~ ene~y corlslJlTiptio~ and air quality which occur from this large commiJ~er population) which cur'i"ently exist in Pa.lo Alto. In addition, sine'!! Palo Alto is essenti2Tly Wbuilt out-, the result from this small incre~ental incre2se wouid be inSignificant. The ~otential effects of th2' propo;ed amended pl~li,:ies and programs ar-e is follows. ~I!'.ansitiorlal D.Qusing arid emerqenSl $helter? fg!'---l .. b_~ ___ ~omelne~_~.. The physical change whicil may oC'Cl"jr from this program would be the redevelopment of ail pre wiously developed site. hence there may not be a signlflcant aTt~ratio" to t~e e~i5ting environment .. Ho~ever,any specific fut~re pr~posal for providing tran sitional housing and/or emergency shel ters wDuid require individual site specific enwironnJenta~ review. '*Inc,,-",2ase affard_ab1..e ,",ouslnq fo!,," seniars .. This policy of ~!1creasing affor" dability far-se~!lor citilens will not nav'E! a direct/indirect PO.VSiCiiT effect on the existing envirvnment. therefore there will b~ no significant effects to the environment.. ~E)(pand the bel<Jw-markf"tn~..!_~tE! nousing r_~..1_(!..irement foC ____ all new dey_e.....TQpmer,t. This program could resuTt in i10using projects of incre2sed de'lsity which could ind~rect1y effect tile physical environment.. P-ny proposa1 which could lead to an increase in housing unit density ~il1 require further environmental review on a case-by-case basis. Otherwise, this program is eC:lnomic in nC!iture and wlll net have a direct/indirect effect on the en~iranm~~t .. '*RecQ9...r:Jlze Buena nVista Mobn~n __ ~nome Park as ,, __ 1ow-moderatE:! __ Jn-::ome i10using n {lP"": £..Q!.tllnity. The prclgram of recognizing Buena Vista Mobile Home Pad:. cs a low moderate income ilous ing Gpportunity w111 not have a di rect/indirect effect on the existing environment since the park is already built, therefore ti1ere will be no significant effects to the environment .. "'nRevise th~_ CottagE qr_g_inance to aJJ(lw bot~ att~_::n~n€-,j a_:1d d_et~nched units. There wi 1 " not be a s ig~"".j fi cant effe-cCt."Othe ~ rONne!ltres:uTTIng-~hTs program because tllis pr{Jposal is deflfied as a Class 1 Categorical exemption which exempts single-faml1y homes ano" duplexes according to the C(QA gt.:idel ines .. II!! '1 ",-~ .. ~ , , fIle No. la-EIA2S Page 3 l · " STAn: OF CAUFORHIA· BUSINESS Tl'lA"'''PO,",Anot.i ANti HOUSIN'Q AOE~CY "DEPARTMENT OF HOUSING AHD COMMUNIiY DEVELOPMENT ONISION OF KOUSINCl POUCY DEVELOPMENT " 1SOOTHIRD STREET, Rc-om 43Q P,O BOX 1:52OSJ SACP..AME"ITO, CA. 14~-~ (91'1 J23.'1 75 t-AX (111 Ii) :i2J..6625 March 11, 1991 Mr~ william Zaner City Manager City of Palo Alto P.O. Box l0250 Palo Alto, CA 94303-0862 ATTACHI1ENT l RE~ Review of city of Palo Alto's ~~optea Housing Element Dear HZ'. Zaner: Thank you for submitting ?alo Alto's housing ele~e~t, adopted June 25, 1990 and received October 12, 1990 for our revie·..... As you know, we are required to revie ... · adopted housing elements and report our findings to the locality (Government Code Section 65585(h)). OUr review ... ·as facilitated by several telephone conversations with Sarah cheney, the City's Senior Planner~ Palo Alto's adopted housing elem""nt addresses most of the co:rnments in our June 7 ~ 1990 review letter regarding the draft ele:!lent, including a clarification of the city's land inventory. Based on explanation by the City and demonstration in the element of Palo Alto's previous rates of redeveloprner,t, the elemeT'.t no-wi" identifies adequate sites to accommodate the City's regional share of ne-", construction need. However, ... ·!'lile · ... e cO!:"Jt'len1 the city for its efforts in addressing oL!.r comments, in o-...;.r opinion, cE:rtain revisions are still needed for the element to comply ... ·i th State Law (Article 10.6 of the Gcv.ermr.ent Code). A listing of our recommended changes is included in the attached Appendix. We continue to note that the City ~ill not be responding to the potential conversion of e~isting assisted housing developments (Government Code S2ctions 5.5583 fa) ca J and Ie) (6» until it updates its Comprehensive Plan, scheduled for completion in January 1992. We look forward to receiving the City's responses at that tilI'.e. InfoI"ll1ation to assist the City ~ith the necessary analyses Cind progrars has been sent under sepa~ate cover. We hope our comments are helpful to the city and we appreciate the assistance of Ms. Cheney during the course of our review. If you have any questions about our cO!lmlents, or if "We ca.n be of assistance in ·any other way ~ please contact Jeff Spano of our staff at (;16) 323-6174. \ !" Mr. William Zaner page Two '. ~.-"~,~ . ." ... ""'-.;.,-..;..-:.. In accordance ~ith requests pursuant to the are forwarding copies of this letter organizations listed below. Publi~ Records Act, ~e to the persons and Sincerely. Linda A. POwell Deputy Director LAP:.JS:bt Attach."tlent cc: Sarah Cheney, Se~ior Planner, city of Palo Alto Beverly Lawrence, Midpe!"lirlsula citizens for Fair Housing Antonio Estremera, Community Leg~l Services David Booher, california HOllsing Council Sue Hestor, Attorney at Law Gary Hambly, Building Industry Association Tom Cook, Bay Area Council Revan ~.F. Tranter, Association of Bay Area Governments ·Kathleen Mikkelson, Deputy Attorney General Bob cervantes, Governor1s Office of Planning and Research Richard Lron, california Building Industry Association Kerry Harrington Morrison, California Association of Realtors Marc Bro~n, california Rural Legal Assistance Foundat~on Christine D. Reed, crange County Building Industry Association Reb Wiener, California Coalition for Rural Housing APPENDr]: city of Palo Alto The follDwing changes would, in our opinion .. bring Palo Alto's housing eleltent into compliance ... ith Article 10.6 of the Government Code. Following' each recol!llllended change or addition, 'W'e refer to the applicable provision of the Government Code. Where particular program examples or data sources are listed, these are suggestions for your information only. We recognize that Palo Alto may choose other means of complying ... ith the la~. A. Quantifie~ Objectives Establish the maximwn number of housing units which can be rehabilitated and conserved during the planning period of the element (Section 65583 (b~). The r~habilitation obje.;:tive includes the number of units expected to be rebabilitated during the time frame of the element. The conservation objective refers to the preservation of the ~xistlng affordable housing stock. Include a five-year schedule of actions to implement the policies and achieve the goals and objectives of the housing element (£ection 65583(c)). ~bile it may be appropriate for some programs to be on-going, the :t'ollo ..... ing program 'descriptions should include specific time frames for implementation: Program 20: When ..,ill the City begin to "","aive application fees and assist local agencies and nonprofit organizations in obtaining funding and cO!1ditional use permits to operate em~rgency sbelters and transitional housing?~ Program 28: .. 'hen loli11 the city begin to e:A-plore l!leans to preserve the Buena Vista Mobile Home park? L,lnTrp $" 1 '"'------------_ ..... ~ 1 I I ! September 20, 1991 PlANNING COMMISSION Pila ATto, C2lifornia Mjnor Hgusir.g Uement Amendments Members of the Commission: Report in Brief ._-----,,.-,.----_ ... ....;; ... , AllACHMENT 4 This report iddresses f1~e .inor ,mendments to the Housing Element of t~e PaTo Alto Comprehensive Phn. One amendment is f"!eCEssary to comply with a state mand3te to the City to address potential l~ss of federally S~b5idiled affordable housing U",ts in a mere det~jled manner ~y January 1, 1992. The ether amendments incl~de a minor correction identified by City staff and t~ree minor revisions reQuest~d by the State Department of Housing and Community ~ve1~pment (HCD) after their review of the updated Housing Element adopted by the City Councll on June, 25, IS90. Attached is a draft resolution which includes the text amendments to the Housing Element proposed for adoption to comply with the above requirements (see Attachment I). Tne proposed amendments have also been submitted for revie~ and acceptance by the State HeD prior to your review and City Council adoption. Preservation of AS$isted Housi~S State Housing Element Law (tovernment Code Settien 65583) requires that each City ind CGanty amend the Housing Element of their General Plan to address the potential loss of assfsted housing within the next ten years and actions to be taken to preserve su~h units. 1n complianr.e Yith Chapter 1451 (Section 65583 of tilt! {ioverr:ment Code)~ the text amendments on pages 41 to 43 of the Housing Element proposed for adoption loclude: 1. an inventory of the ~nits at risk; 2. updated information on state and federal 1eqislation directed at preserving such units; 3. potentia1 tosts of preser~ing such units; 4. funding sources 1'1aiilab1ej h.gamend . pc , . 5. the number of at-risk units to be preservedj and ~. specific actions to be taken by the City to assure preservation of s!.Jch unHs. As described in the attached ~ousing e1ement text amendments. there ar€ three projects considered at risk of conversion to market rate housing; ?alo Alto &ardens (156 units); Arastradero Park (66 units)jand the Sheridan Apartrne~ts (57 units). Only one of the projects (the Sheridan Apartments) is currentl,y up for sale, but this project ;s subject to deed restrictfons which require it to remain as affordable housing until 1998. The proje~! is subject to a further restriction that requires it t~ remain is affordable housing for an additional 20 years (to 2018), if subsidies are available. The City also has r1g~t of first refusal to purchase the project. A separate City Manager's report dated May 16, 1991, fs att!ched for additional information. Federal legislation, Tht Low Income Housing Preservatlon and Homeowners~ip Act of 1990 [llHPRH.lI.J, adapted to preserve certain units at ri st, provides incer.tives for owners to continu~ the units as aff3rdable, and shouid the owner wish to sell, requires puhlic notice of proposed sale. Resident assoclat1ons and non-profit agencies are to be offered right of first refusal for a one-year period to pi.wchase such units at market rates. Federal funds have also been establjshed to provide financing mechanisms to assist in preservation efforts. However~ in high cost areas like Palo Alto, llJcal funds may also be required in the efforts toward Tang-term preservation. Though there is no irrrned1ate need to irlitiate action to plJrchase-sud'! Ui1~ts, staff does recOJTmend that iii: new Progrill!! 25A be added to the Housing Element for Hi! City to assist in efforts tc preserve units at risk should they be offered for sale. Staff will continue to monitor the status of such projects and ~dvise the City of the ~eed for preservation actions. A summary of specific preservation measures cDntained in LI~~RHA prepared by the Palo Alta Housing Corporation is provided as Attachment 5. Amendments Requested by State Hous; n9 and CCIITITlunHy Development The three Housing £lement amendments requested by the state and the proposed titl r~sponse are described below 'see also attached letter from State ~CD, Attachment 3). 1. Establishment of QUintified Rehabilitation and Conservation GoaTs The state has requested that the City establish a quantified objective for the number of housin; un;ts to be rfhabilitated and/or conserved during the next fjve years. As stated in th~ Housing flement, the City's Housing Improvement Program, flmded by Conmunity Dt!velopment 810ek Srant (WBG) funds? WiiS a success, bl.Jt had a diminishing number of participants in recent years mainly because of the inability of applicants to meet the income/asset limitations estab11sh~d by the federal Department of Housing and Urban Dev~'opment (HUD) for eligibtlity. As a result the City modified the progra~ to use only the approximately hsgamend'.pc • \ '-,-' " .-, .;.., , . . , $50,000 received annually as repayment of previous loans. This amount of mcney is expected to be used fer Bu'ilding Code rel ated improvemenh for approximately 20 residences over the next five }'ears, illtiln beheen three and four loans approved every year. These figures are incorporated into the new Q~antifjed objectives. Most of the housing acquired under the Rental Houstng Acquisition Program (RHAP) requires rehabil~tatfcn. Tne Clty pro¥ides grants or loan~ to enable t~is h~using to be rehabilitated and turned from mar~et units to Jow-and ver.)-low-income units. . The City also allocates (BOG funds to the Senior Home Repa1f Progrdm. This program resulted in repairs for 300 senior househ~lds in the last ye~r, including 150 households with very~low~ or low-income~. it is expected that this program can continue to aSSist a comparable number of seniors in futur! years. Quant~fied goals of senior home repair; for 1.S~O househo1ds for the 1990-1995 period, "'ith approxImately 300 per year (150 subsidized) are proposed. Proposed L~ndments to page 17 of t~e Housing fJempnt and to Table J -1990- 1395 tow/~derlte Income Housing G~als~, on page 57, reflect these changes. The number of aSSisted housing units at risk of conyers ion to market rate status and thus to be conserved are discussed above. T~ough these 279 units at risk are 1150 fncluded as a conservation goal in the propo;ed amendments to Table J, t~ey are not included in the total~ on the table because it is not known whetner they ~ill be offered for sale for co"~ers;on to market rate housing and in need of being ~conserv~d· witnfn the next five years. 2. Time Frame for Adoption of Ordinance Amendments to Waive fees The state has requested that the City adopt i specific time frame within which the City will enact Program 20 to ·waive application fees and assist l~<al agencies and nonprofit organizations in obtaining funding and conditional use permits to operate emergency shelters and transitional housir.g-(page 38 of the Housing flemont). Staff proposes to schedule revie~ and adcpti~n of an ordinance amending tne City's fee schedule to allow such exemptions by July of ]992, as part of Hie approval of the next Ctty budget. In addition. as a result of Council action 0" the recommendations of the Single-Room Occupancy ~SROl Committee, the City ~ill a1so pursue adoption of State autnori.o::ed amendments to tfle Uniform Buildin.g Code to assist in reducing construction costs of SRO projects. Suc~ amendments are to be scheduled for review and adoption prior to July 1992. 3. Preservation of Buena ~ista MobiTe Home Park Tne state has asked ~hen the City will begin exploring means to preserve the Buena Vista Mobile Home Park, in reference to Program 28, ~Reco9nile the Buena hsgamend.pc .1 \, .,,-.. -,- ,'ista l10bile Home Park is an important rtsource for 1ew-ind m{)derate-incom~ nous;ng oppartunities· (page 44 of Housing Element). Staff proposes to pursue such an exploration within thr~e years after completic.n of the scheduled t.omprehensive Plan update. In the meantime, staff ~ecommends that the City continu~ to K~ep informed on federal and state funding sources that ire i\la11ab'!" to assist mobile home parle. residents or non-profit groups fn purchasing the site~ should it be available for sale, and offer to assist such groups to pursue purchase if so desired. AmeDdments/Correct1ons~osed by Stiff After adoption Df the Hal/slng Element i~ June 1990, staff be:ame aware that certain acreage figures in Table D "lands Zoned Residential· on page 53 of the Housing tlement were incorrect. The necessary corrections ~nd reiated text references to such figures are included in the proposed amendments. EnyirQnmental Assessment The adoption of the proposed text changes to the Housing Element will have no dfrect 'p~ysicil environmental lmpacts. An e~vironmental asses:;ment w.?s prepared and a negative declaration was a~opted for the recent update of t~e Housing Element that encompassed the current amen~ments being proposed (~~e Attachment 2). Therefore, no further environmental assessment is required. RecolT'lTlendation Stoff recommends that the adopt the Housing Element (Attachment I). Planning COlT'lTlission recommend t~it the City Council Amendments as identified 1n the attached Resolution Respectf~lly s~bmitted, 11 ", / (),'", /1 It] ,--Jf II. _, /) 4~ /)l~~Y J( ,cvr~ A '<1<-<'7 AllAH CHENEY Senior Planner JAIIES GILLILAND ·Planning Administrator Attad",ments: 1. Resolution Amending tne HO~5ing Eleme~t 2. Negative Declaration 3. letter from Stat. HCD dated March II, 1991 4. CMR and attachments dated May 16, 1991 on Preservation of Affordable Housing in Pa10 Alto S. Summary of LIHPAAA prepared by Palo Alto Housing Corporation 6. Housing Element of the Comprehensive Plan 1990·2000 (Colmlissioners or.l}) cc: Palo Alto Housing Corporation Human Relations Commission hsgamend.pc Seplember 25. 1991 Honorable Planning: Commission PaIo AHo) California .- Sabjecl: I. CRAS IT. Housing Element Members of the Commis.ston: AnACHME~l S The Palo Alto Housi.,g Corpcration herewith submllS its recommendatiOl"i5 and comments on the subject documents. I. CRAS A~ a non-profit housing c.,;:poratlon sL",ving to address affordable housing needs in P410 Alto, and sealchii1g for scarce money to de so, we recognize the lmportarlCe of the CtlAS. We look fOn,\'ard to bringlng to this c.::>rnmunity the new hOllsing f'Jnds created by the :Sational Affordable Housing Act of 1m, and accordingly have ,given particular --atter.tion to the eRAS which must be approved to access future HUD fuflds. We wish to commend Sar-.J1 Cheney of the Planning ~parunent for her excellent work in creating the document before you in the limited time frame imposed by HUD. We offer two principal recommendations. First, we believe t.iere is undue stress in the CHAS on tying Palo Alto's needs for affordabie housing to the special needs of those people who reqUire services L'1 add1:.ion to affordable housing. The purposes of the National AffordabLe Housing A~t {Sec 103) are to: 1) to he!p faJT',Dies not owning a home to save for a down p3.iment for me purchase of a home; 2) to retain wherever feasible as housing afforda.ble to low"!ncome fa.mllies those dwel~ng units produced for such purpos.e with Federal assis.tance; 3) to extend and strengthen partne.rsh~ps among an levels of government and the private sector, including for-profit and nonprofli organizations, in the pmduction and operation of housing afforda.ble to iow-if'come and mooerate-income families; \ -~"'--.... - i I ~ J j I I I I I ! .... 1. ') !o expand and im~rcve Fer:ler.l ,rent.1l asslst.J1lce for very ~ow·tnc0rr.e families; and 5) to increase the supply of supportive hou;ing, which combines sm.ctural features and services needed to enable persons v.ith special needs to live v, .. ith dignity and i..rl\.!ependence. Certainly any way in which s?CCiaI services;:an be brought to bear to help those in need or them should be pursued. Vle beheve it should be dear, however, as it is in the purposes of the Act descnbed above, tha.t affordable housi.,g, with or ..... ithout services, ~s the primary priority for Palo Alto. Accordingly, we urge that the SL~tegies to ~'feet Housing NeeC:i-sectiOf". (page 32) have two ad.ditional strategies added to it and prioritized a; numbers J and 2 respecti ..... ely: 1) !ncre<i.se the supply 0: new hOLlsing for very-low arl.d low-income individuals, small ar:d large families and the elderly. and be sure these units v.ill remain perman.ently 1.i1 t"e stock 2) Continue to purslJe acquisition a..'1d rehabilitation of market-rate hOl.1sir.g by non-pro.fi~ who v.ill convert them to very-1m\" and low-mcome housing as resources permit and will keep them !n the stock. permanently. \Ve then suggest renumbering the remainrng strategies from 3 to 11 and cha'-'ging the language of the newly numbered 8, next to the last line I to read "i!Cq~iSltiOni rehabilitation of SROs. transitional housi:1g or group homes fa::: the disab~ed.· Also on ti.1at page, we propose changing the language of newly numbered 9 to read "Continue and Seek New Assistance to Agencies/Non-profits prO';ridlng housir.g and support services -to contnue C\t)· support and seek increa.sed funding for support of" local non-profit prc'g:'am:; pH.")V:d~ng affordable housirz.and supPOrt ~r,:ices to resider.ts v.'ith special needs.· We have noted several other areas ..vr.ere we bel:eve t.~(:re is un<!ue emphasis on the concept of support serv~ces as intriHSic to affordabte: houstng atld have marked those placdi in the copy of t. ... e eRAS presented to City staff. Om'-second major po!nt 15 th3~ we believe there needs to be more emphasis in the eRAS to ex:press Palo Alto's cammitm=:r:t to serving those of very low, low and moderate income who work in Lle ~omti .. un~t,y but cannot afford to live here. For at l(2St the past 20 years Palo Alto has recognized that tt has ajobslhousLog imbalance 2I1d bas tried to address Lt. The S1Jr:lmary of Housing Needs Or"! page 2 of the eHAS notes Lie problem, bur ~r,e rest of Li.e docU"ment does not focus on il.-We 2 • ;~: \ : i ~ :'l :j ) 1 I I / understa.;.,d lhiH in the limited time permit!ed this year for preparation of the CHAS, it woui.d lo.ave beer. im,?Osslble to obtain ne.ec!s. and res,!)urces data for employees, since it is not 3nilablc: from the C~n.s\J:S and other recosoized da':.a sowrces. v.,'e believe, however, tl-.at there are additional places in the text where such emphasis ca.., be added. As we underSL1nd it, the most immediate reason to prC<luc"! a eRAS is tllat all kinds of money are tied up ..... ilh it. As stated in A...Qti:zen's .b..ctivQ...QillQ.e to CE'AS, t."e tie is to va...';ous federal programs, both old a.'1C new, to state and local money, and to money available tr,~ough private resources. Accordingry, we think it is esse:1tiallhat the true needs of our conJmunitj. both for residents and those employed t!-.ere, be documented and prioritized. F..xamples W0u.ld include: (1) on page 4, last paragraph headed -Numbers Eligib!e for Rental Assist4nce", we suggest that the paragraph be rewrinen. as follows: "'The 1988-91 HAP documented that the 2,673 very jow and !ow-i:1come rentir.g households were eligible for rental assistance progralLls. However, these figures do not reflect the need:; (If those ofver.'--IClw and 19.w-income who live elsewhere but · ..... 'ork in the Citv because recoc.,iz~ data sources do not provide such infDJm;niQJJ .... J19I do they reflect the c:urrent estimates of b.Dmek.'s. Given be ~ncreasii1g degree Ix-aIly, ar.d throughout the nation, i.t 1S expected that the pendi:1g 1990 census figures will reflect an increas.<! in (he numbers of .households qualifying for priority asS!sta..'l.ce.· (Note t~:a~ we have deleted fle references to "priority admission-II] federal ren~ assistance programs because there is no data source to document the numbers qua.!.ify~ng in some of those categories.) (2) on page 16, first paragraph, we s;Jggest addtr.g a se:-1:ence at t"1e end, "In addition, the work force U1 Pale A:to ~s cOJ.]po::.ed of mar.y ve0'-low lr,d lo· ... r-income employees." (3) on page 33, th1rd paragraph headed "Re:1tal Assistai1ce Funds" in the third line, after stating "to redlJce the rent bl.:.rden for ve:)'-low tncome residents· add the words "and workers~. (4) on page 34, last paragraph, headed ~Priva[e Resources' add a new second paragraph to read, "Encourage employers. inch.lding Stanford University, to invest Ln very'·!ow and low-income housing." II. Housi.ng Element AmendmenLS We also reviewed '.he document -AmenJr.lerHS to ~he HOL.:sir.g Element" arid found it satis.factory, We offer onI), lhes.e corr.r:lt"::l;S for cJ~--jflC3.tlon -:--...,..-_· .. ·~.'-"t.!;l'!!l;_!""1:2m ...... 7 ,,' ............ ___ - "'. ./. ,- 1) Page 4~ Last line of the first paragrnph -after t.h.e war::! -location'" add the words, "'and if no other .resources are ava.!:able" 2) Pag:!! 5, third line of !.h.e fl(st pa..ooagraph --after the wc-rd "Ienants" add the words ·who ':lay then sell '¥Ii',h no rest.licti01"l5" 3) Page 7, second line of the second parzgraph --after the word ·provide'" add th~ words "r.:pair servic~ .at nominal cost to aJl.seruors with financial a.s.sistance provided on a sliding scale basis to senior homeowners with limited incomes ... A member of :he corporation VrriU attend your meeting to respond to any queshons you may have. Sincerely, PALO ALTO HOUSING CORFORA TION Enclosures 4 . - , ! ,. Modifications to Hoosing Element Amendments ~tOmenderl by the Palo Alto Hoysing Co~ Page references 10 the Draft Resolution: L Page 4, last line of the fIrst paragraph -after the word "location" add the words, -and if no other resources arc available" 2. Page S, third line of the tint panigraph --aJ'ter the word" tenants" add the words "who may then seil with no ~trlc.tion5· 3. Page 7, second line of the second paragraph -after the word "pro .. "ide'" add the words "~r services at nominal cost to a!l seniors ",ith finam:ial assistance provided on a stidatg scale basis to senior homeolNners with llmited incomes." ,'nt' ", ...... "\ , GOtDRICH; "EST ~ ASSOCIATES ATTACHME~T 5 • ZliVn..05:fIiI8 ANO OE,VEt,.OPE,,;e ISlao OY~I..ANO ~VEN'.JC !!Y'!-!.~~R'" __ ...JONA <3 O<.OA.~Jo.I O~ M:C"Y AO"~" • ~A &¢J-f WA1'lJllEN eRE6L.OW ~I.,. 0.. ~1I[ROIJ'f eV' • .'o'f:R C;"!'V, C:::AI.~-ORNI"" .,0230 ":'£\..E:F'HONE t:ol;31 2&0-5061 _~AX '~\:lo) e'="-'GlI2 September 4, 1991 .Me~ Sylvia Serr.lol'l Executive Director 1",,1.0 Alto Housing Corpor .... tion 540 Cowper street, Suite G Pato Alto, California 94301 Fe, Palo Alto Gardons f'repaymellt Plan By OWners Dear Sylvia, VI». FAX 415/J21-4341 'l'his letter is intcnde1! to .gi ... ·c your Soard Ana the City Council an idea of the OwllC'I'8 (:urrent think:l.ng, with reqard to the KIlO Plan of Frep~yment tor subject project. Firstly, the word ·prcpa~ntM is problbly the worst end most fri<Jht.ehinq word tnat m.JD could have \l5ed, as it creates the wrong understarl.ding pearticul.arly \.dth tet1ants .. OUT options at this juncture would be to elect to continue th~ ownership for an aCld1tional l 5lJbstant1al period. 'Of time. as lO'or{cr income hOlJsin.q, or sell tl'.e projeet {unc1er ,friendlY_ COI\d_~_~D __ ~!:ior.) ~ But t)Cst likelYI .... ·e would elect to continuo the or.-rt\crship and t.ek.e .a.dYar,tage of a new l'1.UD-In8ured second mortoage, which is allo .... ·ed under tWO's. Plan of Action and base~. 01\ a fait' I!Lerket appraIsal. This daveloprnent has rIot had a Plan of .".ction filed yet, afid ~e arc eligible for the 20-year term from final (!lndorser.'.ent in Ml'Irch~ 1994. "1'hat means~ ""'0 c&n fill:!: ~ur Plan of Action in M~rchl 1992. With very best wi'5hes. Yo~r' very truly, PALO )'LTO G.'ROENS BY,~i!8 ,.. vcnec.al Partne:r RHJln cc: Carole Glodney ~ ~ " .' 'f • \ -' ------------- May 16, 1991 HONORABLE CITY COUNCIL Pil~ Alto, California Att~ntion: Policy and Procedures Committee PRESE~VATION OF AFFORDABLE HOUSING IN PALO ALTa Members of the Council: Report in Brief A TT ACHltENT 7 This Ti!port and attachments provide background information on 1) the use of deed restrictions in repurchas! optfons for i specific property; and 2) the mechanisms being pursued by the City and the ParD Alto Hou5in~ Corporation (PAHCJ to ensure the pres!rvation of federally subsidiz2~ housing in Palo Alto. Background On September 10, 1990~ the City Council, as recommended by PAH(, decided not to exercise a repurchase opticn en the fe~erally subsidized Sheridan Apartments at 360 Sheridan Avenue. This complex is built on land originally owned by the City. When the City sold tne land for construction of the apartment comp'e~: deed restrictions were included that lJ require the prop~rt, to be used for low· and moderate-income residential rental purposes for 4G Y2ars~ with the first 20 years as housing for th~ e1derly ~nder the federal Section 8 rental assistance program; and 2) provide the City with a fjrst right to repurc~ase jf tn~ property is put on the market for sale. The use restrictions were also included in the Planned Community zon1ng of the prcperty~ under O~dinance No. 302a. The discussion that led to th~ decision not ta repurchase Sheridan Apartments hrought cp two issues that were referred to Policy and Procedures (ommittee for consideration: L The issues a~.d comple~itie.s associated with deed restrlctions in repurchase options; and 2. The broader question of the mechanisms necessary to !nsure t~at existin9 affordable ~ousin9 can be m~intained on an ongoing basis. ~eed Restrictions The City Attorney's Office has reviewed the use rest~ictions and the repurchase Dption in favor of the City, contained in the deed i~d the loning for t~e Sheridan Apartments, and determined t~at they ire generally CMR:173:91 .. '- enforc4!able. Under the: use rEstrictions, the pt'operiy must be tJsed for l!lw and moderate-income residential refltai purposf:S for 40 years after its conlleyance on June 30, 1978. During t~e first 20 years of the period, until 1998, the property must be used as elder1~ housing under Secti~n 8. However. after 1998, if there are no available rental subsidy programs existing, or if t~e tnen owner has applied for rental subsidies and beer. denied, the owner may !..Ise the site for any lawful reSidential purpO!:OE. ne rents char9~d may not be nigher than necessary to keep the project -financially self-supporting" and to a110w the owner a ·reasona~le rite of return,-The deed doe~ not define 'What the rei!.sonable rate of return wouid be. Under the: City's option to repurchase, before the owner sells the pr~perty to any buyer, the owr.er must first off!r it to the (lty on the same terms and conditions_ The City has 30 days to determine whether to accept such an offer. The City's right to repurchase continues for the full 4D-yp.ar period or until actual repurcr.ase of the property by the City or tnt-new buyer, whichever OCCurs first. It should be ~oted that the Sheridan Apartme~ts did not sell at the previous offering and is back on the market at this ti~e. Ther~fore, th~ City's first right ta repurchase the property is still in effect. The staff and PAHC are continuing to monitor the property. but do not reco~~end a changE in the Council deciSion to not exercise the City's option to repurchase at tnls time. Preservat ion of F~deraJJY Subsidized Housing Palo Alto currently hds 16 subsidized or affordable rental housing complexes. Of these sixteen, seven were acquired under t~e City's Renta~ Housing Acquisition Program and are Dw~ed and tperated by PAHC. Six are either owned or (ontrJlled by other nonprofit corporations~ These 13 complexes are not at risk. .. Three (omplexes --ATastradero Pirk Apartm~nt~. Palo Alto bardens, and Sheridan Apartments --are it some risk of being lost as affordable housing. Tile recently c:dopted "lolfi-Income Housing PreserYation and Resident Homeownership Act of 1990 (LlHPF.HA),· provides some incentive for maintenance of existing affordabTe housing ur.its and establ ishes a mandatc-ry preservation program for "el1g1ble· low income housing; however, the legislation is new and regulations and fu~din9 having not been completed. The attached letter frem PAHC provides a definition of ·eligible" and more specific infarmation on UHPRHA and efforts by PAHC to retain the e.xisting stock of affer'dable housing in Palo Alta. Arastradero Park falls into tne category of "eligible· low-income housing under LIHPRHA and is protected by provisions t11at allow the present owners tv abtain an S percent annual return on a ~ faiT market appraisa1 provided that the units are kept affordable to low-income te~a~ts. If the owner cannot obtain a fair rate of return as above, the property must be offered for sale to nonprofit entities. tenants and public bodies for a 12-month period. The CMR:li3:~1 " \CHR\HOU~F 5/l6/91 'og_ 1 • , . • concern with Arastradero Park is the p~esent owner's desire to sell, the expected high cost of the property and the status of a¥ailabl~ federal. state and 10cll funds for pu~chas! at the time it may be placed fer s~'e. PAHC h., been .~vis.d that P.l, Alto •• rdens probably f.ll, into tn. c.tegory of -eligible-low-income housing and will receive the same protection as Aristrider~ Park. Since this complex fs not as large as ArastradeiQ P~rk, the concern over the cost of the property is not is great if it were to be made aViil1able to nonprDfit entities, tenants and public bodies far purcnas-e. She-ridan Apartments does not fal' into tfle category of ·eliglb1e· low-income housing. However, as stated above, the use restrictions and the Clty~S right ~f first refusal to r~purchase t~e property r2main in effect. RecolTITI!'ndation Staff r~commends that the Policy and Pr~te~ures Committee retcmmend to Council that staff and the Housing Corporation contin!.!e to mClnitor the progress and implementation of the new federal legislation with the intent of retaining as much as possible of the available affordable housing stock. In addition, shDuld a bo~a fide offer be made for purcnase of the Sheridan Apartments, staff will return to the Council with a recommendation based on t~e circumstances at the time of the proposa1. Respectfu1ly submitted, ~ ,-{I C/ . .;.. 1 . \i~L· /1<.ULf".".L /~ JAMES E. GILLILAND Manager, Planning Projects // 1 /',. ~" I JUNE fLEMING .r-/"~ Assistant City Manager~ I i ~chm.nt': M,y Ie, 1991 l,(t.r from cc: Palo Alto Housing Corporation CMR:27l:91 P;\CMR\HOUAF (ENNtTH R. SCHREIBER Director of Planning and Community Enviro"ment Pa10 Alto Housing Corporation 5/16/91 Page 3 , , • ~ " , . , i ;1 I , I ! I I ! Palo Alto Housing Corporation M.y 10, 1991 HonQrable City Council Palo Ai to. Californ; a Attn: Policy ar.d Se;¥1ces Committee Subject: PTe5erv~tion of Federally Subsidized Housing in Palo Alto Members of the Council: On September lOt 1990. the Council considered and supported t~e recommenda tions of the PaTo Alto Housing Corporation (PAM') tnat the City not exercise its option to p~~,hase the Sheridan Apartme~ts at 360 Sheridan --- Ave""'e. During the ~ourse of that discussion. the Council decided to refer to Committee the general topic of ~ow to ensure that the City's existing affordable housing can be maintained on an ongoing basiS. and the specific topic of deed restrictfons and rep'Jrchase options as mechanfsms to preserve such ho,",sfng. To help us e~p1ore and evaluate the fssu~s leading to the SherIdan Apartments recommendation, we retained the services of Helen Dunlap, Chief Execut'fve Officer of tne California Housing Partnership Corpnration (CHPC), a ~onprofit enttty created by state legislatior. to preser\le affordable housing fDr 1011{ and very low income households~ Helen has gp.oe'i"ousTy offered her senic~s at no cost to ad~ise on the matters b~fore the Committ~e. ~uch of the information fo11oll1ing, relating to feder-ai legislation, is from material that has been prepar~d by CHPC~ and she will attend your me~ting of May 21, 1991 to respon~ to your questions. Bad9rOund The Concerns e.llpressed by tne COlJncil in September are part of the national concern that approximately 600,000 ~nits of federally assisted housing Qligible for mortgage prepayment. mark~t rate conversion, and expiration of rent and occupdncy restrictl0ns (1ncludtng near1y 117,000 units in Cal ifor-nia) would be 10st from t~.e stoct of housing affordable to those of low and very low income. 540 Cowper Stree~ Suite G. Pdio Alto. California 94301. (415) 321·9709 • - , , • . ; ___ ._----.._~ . .,.. ___ ...t._.:.:~ T,"-:e buH of U1es~ projects we're built tJsfng the Section Z,l(d}(3) and Section 236 financing programs and the Section 8 rentaT as.sistance prog"'arn. Th.e financing pro9rams provided to for-profit and nonprofit owners very attractive ~ow-1tlterest loans which were available between 1961 and 1983. Hey wer~ typically it an effecti .... oe interest rate o{ 1 or 3 percent and provided borro .... ers wit" at least 90% of the cost of de"Yelopment. Many far· profit b<Jrrowers were able to take tu benefits ·.;~ich provided them with a "H'Y attractive rfturn on their 10% equity contribution. Ma!1Y owr.erS also receh'ed a restricted annual cash flow of up to 6: of original equity a~d also rec~ived comper.sation in the form of management and partnersnip fees. me mortgages WHe for terms of 40 years. Howeiler. at the times the programs were conceived. it was believed that new rental hOl.lsing ..... ou1d cor;tinue to be buiTt and tnat owners mig~t wiSh to prepay the mortga9~s so as to SEek other investment opportuflities. It is a Il'lonumentcl understatement to say ti"1at owners. the government J tena~ts and communiti~s in genera1 did not e~pect tne ~ous1n9 crisis tnat exists today nor the ~stronomicaT increas.es in value tnat nave occurred. particularly in 5tates suct; as Caiitor-nia, Herefore the original programs provided for loan repayment in y€ar 20 and elimination of the reguiatory restrictions on botn rents and occupancy, (Palo Alto Gardens and Arastradero Park ere e~ampl~s of projects built by for-profit entities under the Section 221(d)(3) financing programs.) In addition to the prob7ertt ijf mortgage prep.cyment t many projects ~1,iVe Section a rental subs1d~es attached' to the units \IIr1 ich ~n('bTe vt!ry poor households to afford the restr10cted rent that the Jo ... ·interest·rate·finaficing provided. In many cases. these subsidies ~ere written to allow owners the ~ption of rene ... ing or opting out of the contrAct every 5 years. Further. many Section 8 contrbcts are a1$0 due to e~pire in th~ n~xt few years. There is concern that the federa1 governm~nt ~ay not reauthorlze the funds for these subsidies. These project-bas!d Section 8 contracts ar~ f~und in projects with lo~- 1nterest HULl loani and restricted rents. as well as in projects tr:at are otherwise unregulated. (Sheridan ~partments is an example of tne latter. It does not utilize the federaT Sectron 221(d){3) nor Section 236 fina!"1cing. but it does utilize different federal financing. and the Section a r€ntal assistance program. In August, ]999. the 20·year authorization of Section 8 subsidies will expire.) The low-Income HOlJsing Preservatio!'1 and R",sident Home-ownership Act of ]990 l1HPRHA-------- After years of debate. a temporary prepayment mo,.atorium. three emergency extensions. and a prolonged legislatfve battTe, Congress. on October 27~ 1990. passed permanent legislation to regulate tne conversion of properties with HUD-subsidized mortgages to market-rate usage. The bill was signed intc Taw by the President on November 28. ]990. as Title ~I of the Cranstcn·Gonzales National Affordable Housing Act of 1990~ an omnib .. s piece of legisTation that also creates a fell' ne.., housing programs and changes many existing on.es. The n~.., law. lrHPRHA~ co~ers only projects eligible for prepayment of tnose fede-ral iy 5ubsidized mortgages assisted under th.e SEction 22l(d){3) and Section 236 Programs. 2 t' I' • ·._ ... _--_._- Essentfa11y. LIHPRHA eshbl (shes I mandatory preservat~on pro9r~m for lIeli9ib1f!-Tow income housing. (As described Ibo'lle. Palo ~Ho Gardcl"1s and Arastradero Park with earliest subsidy retirement dates of June 13. 1993 and August 21, 1994 respectively, are the kind of projects ifl.cluded under the TIe ..... ]eg1:;latian.) Under the Act. an owner Ifll.lst first fi it a -not; ce of intent-up to h", years prior to the sc~eduied prepayment date. After the owner files the p~tice, both HUn and the owner commhsion separate sppraisa1s. (A third appraisal Il'lI!lY be necessary if HUDls e.nd the owner's dhdgree.) The apprais1!Il deterlTtine.s the fafr market (unrestricted) value of the project 2S residential rental property. IS w~11 3$ the highest and best use value of the property. if different. The appraisal discounts only for the re~sonable costs of con¥ersion to market rate housing or other uses. Based or. th~ appriised value, HUD calcu1!tes the rents necessary to provide owners ... 1th an 81. annual retl..'rn on their re:alcuh.ted eq.uity. If fWD car, provide tne owner w1th this return without exceeding the federal cost limits, the owner cannot prepay the mortgage. The ow~er may then file a Pian of Action seeking incentives to provide the 81 r~turn. or offer the project for sa1e to nonprofit entities, tenants a~d public bodies for I 12 month neg~ttatiQn period, and other purchasers for an additionai 3 months. Th~ owr;er must accept a bona fide offer to purchase at the appraised value. If.'!£. bone fici-= offer II madc within ~ l1egoUat'on period~ the ~ ~ subsequent]y prepay. If HUn cannot provide the owner with the as retJrn, the owner may prepay only after cffering the property for sale to a nonprofit entity, teMnts or publ1c body for a perjo~ of 12 months. This provision may be critical to projects i~ Pal~ Alto. because d~pend;ng on value determination and other program r~7es. t.he propert~!'! may extaed the HUD high cost limHs. InclUded in the 1egislation are important issues relat~d to the iength of time the property ;5 to be preserved (a minimum of 50 yurs. after the Phn of Action is approved). federal finaf1cial ass.fstanc~ in the form of fncenti¥es if the property is retained by the owner or a federal mortgage insur:lnce program or grants if s01l1 to Q:ua11 tied p·-.rrdasers. af1d tenant ;Jrotet:t~o/1s. Proposed regulations implementing UHPRHA required by statute to be published by late February. ha~~ just been published for pu~'ic comme~t. The release of tt':e interim or final regulat1ol':-s is then MOt likely to occur before August. thereby delaying HUO's ability to begin processing of owner incentive or transfer plans until late summer or ear1y fall. A prE-released 235 page draft of the proposed regulations is available ~hich raises many issues of critical concern to tenants. nonprofit organizations and local gnvernments interested in purchasing the ~UD~subsidized developments at r15K of mortgage prepayment. CHPC is actively participating in a national cialogue ~ith other organizatio0s to \lork out mutua1ly agraeable positions on the many issues of concern. The City of Pale Alto rna.,)" W15h to partiC:ipa';e ~I'l this diaTogue by submission of ccmments on tl1e reg\Jlatfons. 3 "-.... " --...... -_ ..... _----- '. Palo .Alto Stock of Federally Suhs'fd1zed Rental Housing There are nin! federally subsidized re~tai ho~sing ,ompl~xes in Palo Alto {not counting ti1e 82 units iM 1 complexes in the ReMal HoU'sing Acquisition Program that are not at risk): Arastradero Park Apartments Colorado Park Apartments Webster Wood Apartments Te~n Apartments Cal1for~ia Park Apartments Pale Altc; Gard~l1s Sheridan Apartments St!''1ens(ln House lytton Gardens I lytton Gardens II TOTAL No. of Units 66 60 68 92 45 156 57 128 218 100 m Of these comp1e.xes Colorado Park Apd.rtments, Ste''1er1son House and lytton Gardens I and IIi!. ' owned by nonprofH corporat;ons ::Ifid are not at risk. Webster Wood Apartments, Terman Apartltlents and California Perk Apartments are owned by lim1ted equity for-profit e~tities in whic~ a ge~eral partne~ is the Palo Alto Housin9 Corp.orat1on or its subsidiary. They also have City controls. and ar.e not at risk. Sneridan Apartments has CHy controls as well. -these contro1s VHy. They are f!valuated Tater in this report by the City Attorney's Office. Arastradero Park Apartments, Pa10 Alto Gardens and Sheriaa" Apartments are owned' by Hmited eqljity for-profit entHies and may ~ at risk:. LIHPRHA wi 11 regulate Arastradero Park and Palo Alto Gardens, but n~t Sheridan. hs was discussed in September, 199D. there is some risk continuing with conversion of Sheridan Apartments to IT'arket rate hClJsi~9. However. the City's right of first refusa1 to purchase the property ;s currently in ~ffect. The Housing Corporation ilnd the California Housing PartnerShip Corporation look forward to-tne P & S Comm!ttf!e meeting, and will be sharing ou; thoughts on the next steps and potential policies f~r prese~vation at that time. [f the Council members ~ave any questions or wish more information prior to the meetfng, please call our office. Sincere1y yours. PALO ALTO HOUIIN" CORPORATlON /, I --L tic: ;/z,j ".,J7 Joe Martignet.(\. Jr. President S:P , --_.'.-_ ... --,-_._-----_. .. j i 1 , t __ -.--. ___ ~, _______ • ______ , c:.. __ _ A TT A{ HHENT 8 5(llof...HARY OF THE -LOW INCOMI BOCSING PRi:SEllVA'I'ION AND RESIDENT BOM:t!:QWNE'RS:a:P AC'l' OP 1990 (LIRPil.BA} Prepared by the Palo A1to H::tusing CorpOl'ation en Octl;lber 17. 1990. C<:>nqress pa.S8eo~ penU"1H!~'Dt le~i$latiot\ t.Q requlate 'tbe Ce.nVUSiQD ot prope;rtiee vith BOD-subsidized lIIortqaq~1 to lIuliri:;et-rate useq~. r~pl&~inq an 6a~qeney l&v enacted in 1988. Th@ bill was aiqned into lev by the P::=-!.II!dent on )/¢vellber 2B, 1990, as pan: ot thl!!! Cranston-GQn:a:ale.s lIation~l Affor~.bl. Bouainq Act, an omnib~. piece of leqi.l.ti~n ~h6t cr~~t~$ new proqr~ aDd ehanqes .. ny existrnq ones. Bseetlt1al1y. LIBPRBA establ1.hea a 11.llnd:atory preservation program f"r -l!Iliqible-lov ir.eolle ho",sirtq. (Palo Alto Cardells and Araatraderl) Park vith earliest subsidy ret.trIDent dates of JUlie Il. 1993 and A:;zqust 21 .. 1994 r~8pectively. fit th1. defin1t:ion ot eliqibilit!. Sheridan Apartment:s doea not.) Preservat.ion can Qeeur in onl!: of tvo way:!ll: ~ ~ Qwner's onti.:Jr:! to remain in the program in ~ch.nqe for B';;Ibstantially increased tederal ti~.ncial benefits or to sell th~ project to a p'Q.reha.SI!::r who '111.111 keep the pre ject in t.he subsid:r;;d bousleq proqram vith the aid: of .t.iIar federal fill.ancial .... istance. The owner mar also opt to 8ee~ HOD's approval to ter~inate the m~rtqaqe if it can be de~on8tr.ted that luch ter.ination wIll not mate~ially inerease eeonomic hard .. hip for the current tenanta. {Because few ovners .r~ likely to pur.e thi. optiet:l; beeaUM of the .tatute's rc!s":rictive lanqu4q.." this optlon vill ~et be. 4i.cU3.~ furtl'leor in thi. u:port..l LIEP]t.aA repre.s.e.r.ts .. &ubstaut.i&l fe.(!,eral ce1Ji,~it.er.t tQ preser'9inq exi&tinq lew-income b.:lusinq --a comllitment that i. surl!! to be tellted: over the ne:xt aever&l ya&ra by th~ eno%m~u. !ede%&l re$~urces ~eq~ire~ t~ finance the proqraa r HOD's 6bility eo admlnist~r it properly. and the &UCC~'II ot the nonprofit., public: aqencles and other preservatic~ pnrcha~ers in ~tilizing the statutory opportunitie. to ae~ire properties oftere~ fer .al~ The process for pre_.rvat!on ia very involved beqinninq with the o~ner tiling a aotice of illtetlt:. wlth Bon ar.d the chief I!:xeeutiva officer of the state or local qovernaent. The notice must also infcrm the tenants of the filinq. 1 il !.! , , V ~ " , . i' PRESERVA~ION ~ O:lee HUD :receives the C\oI%'lI!,r-'. notice. it lilt/It cQlllm'~H'~c::e t.he proces!I of appr.!.in~ the ~roj~~t.. Two pr~servation valu~s are dp.ter~in~d r~Gardles. of the taet that the oYner has sele-cted one 'pIef~r:re" course of act! Oll in the notice. Both values deterll.ine the fair market valll~ of the pxoje-::t. end i!'l mQlt casel will be the 5a~e v.lue~ but if the o~ner seeks to extend aftarc!ablity rest.rictionR in ell:chlllnqe for incentives:, the appraisal m'lJst. value the prPJperty baled 00. ita bJ,.qhest an"-best use.!.!. .,!'eside::ltial ~ hou.,inct. It the owner ",ishe.! to sell, thli! property ia v,a!lled simply at its hiqheat and best '\JS~. Once the appra1s.fIl determines the project's 'preservation value"', the ·prese~~tioD equity· {preservation value min~s the Qotstandin9 balance of the l~derally assisted mortqaqe) eAn be detarmined. PRESERVATION ~ There are two eateq.ories here: the ·e:z:tensicl'l. pr-p-servation r"!;nt-where. the owner retahUI thll!. projElct with lQW' ineolllle affordability restric:tiol'l.l and '"transfer pres.ervation ::ent-w!Jere it's: sold to a qualified btlyer. III eit.he.r ease, the qrO!s petential incom~ mast s~p~~tt debt servie~ on any rehabilitati.ob loan and federally assfsted mortqaqe. operatinq expenses and ade..,.-nate reserv8-III. Exte.nsion preservation rerJt .... il1 also pr.ovide the owr.er with an 8' an~~al retorno FE!.lE.R...U, £.921. !d!Y1! LIBPRBA established ~a tipper 1.1:lIdt. if: the torm of -federal ccat. limits· on the amount of .. oney that the federal government ia ~enerallY "'i1linq to pay to preserve the prajecta. If the pree.ervat1.oD rents are -wit.bin t.hat cost. limiitat.ton. the~ the: owner lIIay proeaec! as 1'lann~a to stay in t.he proqra'lll in exchan9~ fo: incentives or voln~tarily to sell the project to e preaerva~ion parchaser. ~ LIn RESTRICTIONS An owner accept.ing ine~ntive~ to remain in the pr.ogr&m~ as veIl as & pnrchaser wbo utilizes incentives, mUEt aqree t.o Ilaintain the: project's !lff.ordabilit.y restrictions for the re:maininq uset~l life of the ho~sinq. Th~se incl~de the oriqinal fe~eral restrictions O~ tenant eli~ibilit,. re"ts~ charqes and lIeth~ds .of operation. 'the term -remalninq ~!",I!"flll life:· 1l1 .... .ilns the physical life 6f a bt::ildi .. q~ aSBtlminq n.ormal tnaintf!,r.ance and repairs and replaeement of major ::Iystem& and capit.al eCdJl~ODe!lt.s as necessary. The .!!i.~.!'~ amonnt..of years before .~ .owner can petition BUD t.hat the project's nsef~l life has ende~ is 50 years after the date on vhieh the plan of action is approved. At that t.ime~ tlle oW"ll:er mtlst prove that the usef~l life has ended for reasons other than its failur~ to reqular1y repair and r~pla~e its systems. T~nAnts , • \ .--. ...._ .. ___ ......... = .... :.". "'MM ••• 6r.d local 9'0vernlllenta must k p.erlllitted to partJeipll.toe 11'0 the detecmination proce ••• Project must be offered to -qualified purchaaer5-. R~sident counc115 have the ri~bt of fir.t refusal. It not ~7.erciaed~ the project 1s the~ offered to oth~ -prJ~rit7· b~yer. for 12 mQ~ths. Com~unity-be5ed Donprotita th~n ha~e priQrity over .tate/loc ... l agencies~ tJ'len other nonprofit.a. ... aonpt"ofit. that ia &ftiliat~d wlt~ a tor-profit entity i. n~t a priority purcta.er~ but could be a -qualified-bu,er. Takinq into account the f~eral coat limi~s describe~ hrtefly above. BUD must provide incent.ivea to a priorty p!;achaser s\:Jfficient to pay the negotiated sale price. whicb ~ay not exceed t.he p~eservation ~alue of t~e project.. This obliqati~n i. qualifi~ only by the avallability of .~fficient appropriations to £~nd th~ preserv.tion proqr&m. Dnrinq this 12-montb period, priority p~rcba8era ~.Y 5u~~it written notice to BOD of their ifl.terellt in purcha!li1"lC;~ incllldinq tMdr qu$lifica.tions. Within 30 days of r~ceipt~ BUD ~ust provide ~he purchaser with infor~atic~ on available federal 6asi.tallce tor the transfer, and to require the !')vaer to provide appropriate intermation en the project~ Once the owner accept. a ~ ~ efter from th~ priority purchaser, a pla~ at action must be subll.itt~d requelltinq any assi!!tance necessary 'i:Q cOlPplete the ~ale-Ie .addition~ the 110&1 .. & cor-tract with earne!!t lZIoney of at least l' of. the offer IDDst be: sul;lmit'ted to BUD tor Ilpproval. Shou1d nc bone tide .offer to purchase be made and Accepted wl'thin the 12-IDQnth period. 'then durinq the aext 3 monthe t.he o"ner must otfer to sell ac..! may sell the hQc.inq to -qualified porchasers·~ defined ~s any ~ntity~ incl~dinq prefit-activate4 e:nt.itie., tha't. aqreea to lDairl.tain lew-incolDe .affordability for t~e r,.,maitlinq usefDl life of the projeet. (Related parties are prohibited.) As with priority porchallers, the sale price may Dot ex-c~ed the preaervatioD value of t~e heu~in9 and a plan of actio~ requellting incantiv~1I lI">lst be submitted to B01J. Priority purch.aers have access to assl.tanC'e that ia unavailable to other qualified porcha.eral (11 insurance fer financinq up to 95' ef the yreserv.e.ticn equity under the Sectio::\ 241{f} pro.;ralll; (2) qrants ~p te the present value of the total ef projected Fair Market Rent5 (FY.~.) for the Section B !xistinq Bou.i~9 Program tor the next 10 yeaI'II or lonqer, if necessary; and (3) rei~b\lrsement for tran5action$ e~penses relating to I!.cquisition~ such as ordinary transAct.ion cost!l, finan..::ir.q f~e!l. and operatin9 deficit coverage. Qualified purchaser" receive the same incentives as those ~val1able to an OWher v~o stays in4 For any voluntary sale, residual receipts in the project that e.re 'tran&fer-red to the sellinq owner mtlst be deducted from the sale price. 3 .,," ,..:---"---- AANDATORY lli!! Once BUD provide$ notice to the owner t.hat the ~g9reqate pr€lserv.a:tleu'! rent!; ex~~~ the feder.l co.t limit., the owner may file a second nctice of intent t~ p~y the aort9aqe or vol~t.zily ter~i~Ate the in~ur~nc~ con~ract wi~hin 30 days att~r receivi~g the celt enaly.ie frea BUD. ~his ~otice trigqers the .en~.tory sale pr~vi.ione. Bow~~er, s~ch proj~ct& ~re not automatically relea~ (rom t"he lov-incolle hOllsin'1 e~~ek. An owner cou.ld oIIqree to remain in the ~roqra. and. recelve inceo.tives at the federal C03t. limits. or it could eell to a qu~lif!ed purchaser vith incentives at the feder.l CQBt limits. The owner ~ atill ofter the project fOr Bale to • p~iority p~rchaser. The reat of the p~~cedore •• re similar to th~ voluntary Bales deserib~~ pr~viocsly. Bowever. ~like ~he voluntary sale l the BOD-gre~~ asaiatance m~y be made to any qualified porCh.aer. bot just a prl~rlty purcha8~r !!2!!!!! P:aOT1!:C'I' IONS B!.Q! CO)"VERS I ON LIBPRSA ma~dates certain protectiona !or ~enants. BUO must provide a Se~tion S Cerelficate or Vouchar fer eacb di~placed low-income ~a.!ly. subject to the a.ailability ot appropriations. BOD .~.t coordinate with public housing authorities to enstlre-that. 6isplaced famillee can be relocated: to s'J!t&ble ar.~ affordable units withi~ ~e-B~~ area. Tbe o-wner -must pay 50' of the lroVill-IJ expense! for any family relOcated, or .ore if r~ired by atate or local laws of general applicability. OWners mus~ a1ae extend pro'tec't~ t.enancy t:iCjbta t.o e:~iat.1n9 tenen.t..a for 3. years. if t.he hauainq ia located in • lew-vacancy area as determined by BUD. o~ if the ternants have speeial ~eed. or disabilities. Owner_ 0-1 projeets tbat do -:cllvert to market-rete rl!l~tal hO';l;sinq may not 4iscrimin~te against Section a Bub.idy recipi~nts. OWDer. ma]' prepay c:.-r texaS-r.ate the i-n." .... :rance CQr.t."t".ac't only if on@, of ce.rt.ain ~vent. occur. Br1eflYI these eventB inclod~ lack of fe~er.l f~ndi~q. ne offe.r .. to b'.lY under the prevl()u.ly d.esc.ribed cOll.dltiQne, tbe project has exceeded its 'Q&ef:ll lite according to BUO and future EWD-ascribed changes i~ the prQ<3"ram. • • \ / Mt!'aon.U.UONS ~h. ~t .uthcrize~ t~~ apprQpri&t{cn of $425 .lllien fer fl.c&l Y~Br 1991 and $858 .111i¢3 tor fj .... c.l ye.sr 1992 to tllIlr! the I!lllat ... nee II.H! ince.ntives authQrh:eC1 by it. l\ovever. itl crdcr for thia :f'\ln<!inq tf;l b@!. acttlally available, COIll.qre .. s lIust al.e p.aSIlI appropriations legialation pr.cvidinq the -aaey.. That .ppo;;cprhtioDs ,prQeeas 1, cv.r:n:ntly tl.l'ld~rvIlY. ~h. affie. of Manaqellent and Blldget (OMS) estill_tea that t.he eost of pre_e..rv1D9 batV&eD 341),000 and 4::10.000 apart.ent:a in up to f,OO\) proje-:::ts in ~e aubaidized hooainq inventQry el191hle for prepayment o~er 15 year. to be $21 bill!(lr!. BUt! h ... $ZOO !lillion tor illcentl'Vea ill. lise .. l 1991~ })ut it_ doe.D~t exp6ct to approve any ·plan. of action-this year bec.u~e of ~he latene •• in settinq effective rules ar.d pr~cedures. The m¢ney yill be rol1~d over irlto fiseal year 1992. The adIll1:ailltr .. 't1~a'. fiscal year 1992 budget :r~eJ!It f.o~ 'Preservation is $71S 111111101'\.. 'The 215 'Paqe propost:d 'Pr~~ .. yment. r'Q;lea h.'Ve bee'n drafted and ~ent. tQ CMB. Opon pabli.hing. SUD viII allo~ a 60-day co •• ent period, th.~ the lav qives an a5ditiQtlal. ~5 d.ay. for effective rtzles to be l:!11s'J.e6. Indications are th .. t t.he draft indieates .~r~nq BUD effort. to be even-h~nded and prevent aham d~~ls by either owners or potential bayer •• SBCTIOI ! OPT-OUTS Althoaqh LIHPRBA d~. ~ot cover Section 8 opt-outs And expirations (Sheridafi Apart •• At. would fit this cateqory). there are some provi&iana in bther a.~tiQn. of the Cr.n.ton-Gonzale~ National Aftordable Hogsinq Act that ad4re: •• the 1 ...... cmevhat. UZlIl.1ke the ovnerlS affected by LIBPlI:HA, this will not be a .~d&tory pr~ra.: owner. vl11 retain the ~ecision vhether or not to re •• in i~ tbe ~rQgr •• ~ft~r recei~in~ an offer froa 8UO to tncrease the C'ontraet. r ... ..llt. up to the SectiO:l 8 existinq PM]l levels. , '- ., :-:..."