Item 16 - RDA Consideration of Agreement with David Paul Rosen Affordable Housing AGENDA REPORT SUMMARY
: Honorable Chairman and Members of the Redevelopment Agen
FROM: James L. Bowersox, Executive Oirec~
INITIATED BY: ~ohn D. Fitch, Assistant Executive~rector~
warren H. Sharer, Director of Redevelopmen~ ~ervice L~_~
DATE: April 4, 1995
SUBJECT: Redevelopment Agency Consideration of an Agreement with David Paul Rosen
and Associates to Provide a New Affordable Housing Needs Assessment and
an Affordability Gap Analysis as Ordered in the Judgement Entered in
Smith v All Persons
ABSTRACT
Under the Judgement entered in Smith v All Persons, the Redevelopment Agency is
required to conduct several studies and to use the services of Oavid Rosen to perform
these studies. This action is to comply with the Court Order.
ENVIRONMENTAL REVIEW
This action is not subject to CEQA review.
FISCAL IMPACT
The cost of the work is $83,500. These funds are available in the Housing Fund and will
be transferred from account 471-8912 to account 5970-1726.
ADDITIONAL PUBLIC NOTIFICATION ANO CORRESPONDENCF
a copy of this staff report is being sent to Catherine Rodman, Legal Aid Society of
San Diego, Inc.
RECOMMENDATION
It is recommended that the Redevelopment Agency authorize the Executive Director to
execute a contract with David Paul Rosen and Associates to complete a Needs Assessment
and an Affordability Gap Analysis, in a form approved by the City Attorney, and to
appropriate the contract cost of $83,500 from account 471-8912 to account 5970-1726.
ACTION
c: \data\agenda\rosenjdg. COy
::APR4 1995 rrF. J,I
AGENDA REPORT
CITY OF POWAY
This re~ is included on the Con~ Calendar. T~re ~ll ~ no ~rate di~ussion ~ me ~ prior to approvaJ ~ me
Ci~ Councd unless mem~rs of the Council, staff or public r~u~t ~ to ~ removed ~om the Con~nt Cale~a~ and
discussed se~ratel~ If you wish to h~e this re~ pulled for di~ussion, ~ase fill out · slip indica~ng me ~ nurrd~er
and give it to the Ci~ Clerk prior to me )~ginning d me C~ Council m~t~ng.
of~d
TO: Honorable Chairman and Members evelopment Agency
FROM: James L. Bowersox, Executive Direr.~
ZNITIATEO BY: John D.. Fitch, Assistant Executive Oirector~q ~-~-~
~arren H. Sharer, Director of Redevelopment S~rvice~
DATE: April 4, 1995
SUBJECT: Redevelopment Agency Consideration of an Agreement with David
Paul Rosen and Associates to Provide a New Affordable Housing
Needs Assessment and an Affordability Gap Analysis as Ordered
in the Judgement Entered in Smith v All Persons
~ACKGROUNO
As part of the Court Judgement in Smith v All Persons, the Redevelopment Agency
is required to retain David Paul Rosen and Associates to complete a Needs
Assessment and an Affordability Gap Analysis to determine the maximum feasible
amount of affordable housing for the next five years, based on conditions in the
Court Judgement.
FINDINGS
Based on the time requirement in the Judgement to produce the affordable housing,
it is critical that the Redevelopment Agency authorize the work required by Mr.
Rosen as expeditiously as possible. To that end, staff has requested from and
has received a proposal to complete the work required under the Court Order. The
proposal for services is attached as Attachment 1. Staff has reviewed the
proposal and finds it to be in conformance with the Judgement.
ENVIRONMENTAL REVIEW
This action is not subject to CEQA review.
FISCAL IMPACT
The cost of the work is $83,500. These funds are available in the Housing Fund
and will be transferred from account 471-8912 to account 5970-17~6.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
A copy of this staff report is being sent to Catherine Rodman, Legal Aid Society
of San Diego, Inc.
~CTION:
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RdA Consideration of an Agreement with David Paul Rosen and Associates
April 4, 1995
Page 2
It is recoranended that the Redevelopment Agency authorize the Executive Director
to execute a contract with David Paul Rosen and Associates to complete a Needs
Assessment and an Affordability Gap Analysis, in a form approved by the City
Attorney, and to appropriate the contract cost of $83,500 from account 471-8912
to account 5970-1726.
Attachment: (1) Proposal from David Paul Rosen & Associates
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3 of 13 APR 4 1995 rrEM 16 ~,
'., DAVID PAUL ROSEN & ASSOCIATES HOUSING, COMMUNITY &
ECONOMIC DEVELOPMENT
1330 BROADWAY, SUITE 1035
OAKLAND. CALIFORNIA 94612-250g
TEL: 510/451-2552
FAX: 510/451-2554
PROPOSED CONSULTANT SERVICES
City of Poway
Comprehensive Affordable Housing Strategy
Scope of Work and Budget
Submitted by:
David Paul Rosen & Associates
1330 Broadway, Suite 1035
Oakland, California 94612
3941 Hendrix Street
Irvine, California 92714
March 3, 1995
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w DAV D PAUL ROSEN & ASSOCIATES
Table of Contents
Scope of Work ..............................................................................
Introduction ............................................................................
1. Prepare Housing Needs Assessment ............................. 2
2. Prepare Housing Affordability Gap Analysis ................ 3
3. Review Local Resources, Leverage
Opportunities and Legal Requirements ......................... 4
4. Develop Housing Policies and Priorities ....................... 5
- 5. Identify Program and Project Opportunities .................. 5
6. Prepare Five-Year Capital Plan ....................................... 6
7. Meetings and Presentations ............................................ 7
Budget ........................................................................................... 7
Schedule ........................................................................................ 8
Consultant Team .......................................................................... 8
Attachment: DRA 1995 Fee Schedule
APR 4, 1995 Ii'EM 16 ~,
DAVID PAUL ROSEN & ASSOCIATES
Scope of Work and Budget
Introduction
David Paul Rosen & Associates (DRA) is pleased to present the following scope of
work to prepare a Comprehensive Affordable Housing Strategy (Strategy) for the City of
Poway, together with providing Affordable Housing Development Consulting Services
for specific projects assisted by the City's Redevelopment Agency (Agency).
Attached to this scope of work are DRA's firm qualifications and summary of recent
achievements, as well as the vita for DRA Principals who will manage this project on
behalf of the City.
DRA is a nationally noted consulting firm specializing in comprehensive affordable
housing strategic development and capital planning. In the mid-1980% DRA devised a
comprehensive approach to affordable housing strategic planning for California
redevelopment agencies. Much of this approach is now codified in AB 1290
requirements and CHAS requirements for HOME funds.
The Strategy which DRA will prepare for Poway will provide the City and Agency with
a precise understanding of affordable housing needs and financing gaps in Poway, as
well as a specific set of programs and policies to address those needs within the
constraints of local market economics, funds available from the Agency's Low and
Moderate Income Housing Fund (Fund) and other sources.
The Strategy will specify affordable housing production goals by household income,
size and tenure for the next five years. Additionally, the Strategy will lay a strategic
foundation for affordable housing development, finance, management and planning
throughout the life of the Project Area.
The Strategy will also be designed to fulfill the requirements of the judgment rendered
in Smith v. All People.
This scope of work specifies the services needed to develop the Strategy.
"' DAVID PAUL ROSEN & ASSOCIATES
Scope of Work
1. Prepare Housing Needs Assessment
DRA will analyze the most recent available data on current and future housing needs
from the 1990 Census, the San Diego Association of Governments (SANDAG) and
other available sources, including non-profit service agencies in Poway and
surrounding areas. Data analyzed from the 1990 Census will include:
· population and household characteristics
· housing tenure
· income distribution
· housing inventory characteristics
· rental and owner-occupied housing vacancy rates
· current housing needs including overpayment, overcrowding,
substandard housing, and special housing needs populations
DRA will review estimates and projections of Iow and moderate income housing
needs from the 1990 SANDAG Regional Housing Needs Statement (RHNS), and any
new RHNS figures as they become available. We will report current U.S. Department
of Housing and Urban Development (HUD) income limits and maximum affordable
housing costs for renters and owners by family size and income level for the San Diego
MSA.
DRA will also examine the jobs/housing balance in Poway and will estimate the
current and projected future housing needs of those who work in Poway. We will
examine employment data and forecasts by occupational category and will project the
income of Poway's current and future employees using occupational wage data. The
resulting income distribution of Poway employees will be evaluated to determine the
associated affordable housing needs, incorporating trends and projections in
household formation and workers per household.
DRA will correlate household size and income in San Diego County to best
approximate the distribution of household sizes by income and employment data. In
this manner the needs assessment will inform the Ci~ of the distribution of current and
projected households by income and household size.
DRA will review available data on housing prices and rents from the 1990 Census, on-
line computer services, and local market sources.
Scope of Work and Budget March 3, 1995
Poway Comprehensive Affordable Housing Strategy Page
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:--'"' DAVID PAUL ROSEN & ASSOCIATES
DRA will work with staff to identify potential locations for affordable housing
development and preservation to meet Poway's affordable housing needs. This will
include an assessment of the five sites identified in City's Housing Element: Haley I
(constructed), Breihan (approximately 50 units of housing), Bowrun (approximately
110 units of housing), Gateway (approximately 84 units of housing), andBrookview
(approximately 138 units of housing). The inventory of potential sites will not be limited
to those contained in Poway's Housing Element (affordable housing overlay sites). We
will identify possible sites and discuss the means by which these sites may be most
appropriately developed given planning and zoning constraints and opportunities.
2. Prepare Housing Affordability Gap Analysis
DRAw IIana yze the "affordability gap" between the cost of building housing at
various densities and the amount that households at different income levels and family
sizes can afford to pay for housing based on a review of market and income data in
Poway, as well as our own considerable experience in San Diego County and
throughout Southern California. The affordability gap analysis provides an
understanding of the City's capacity to assist in the development and preservation of
affordable housing under alternative targeting strategies given its resources and market
conditions.
The following steps would be followed:
1. Define target income levels;
2. Calculate maximum affordable monthly housing costs (renter and owner, by
income level):
We will define affordable housing expense (e.g. rent plus utilities for renters;
mortgage principal and interest, taxes, insurance and potentially homeowners
association/maintenance costs for owners);
3. Develop housing prototypes:
DRA will analyze up to three renter and three owner prototypes representing
different types and densities of housing that could be developed or acquired
and rehabilitated in Poway. Development cost estimates will be prepared for
the prototypes after compiling and reviewing housing development cost data
(including land acquisition, construction, fees and soft costs);
4. Calculate affordability gap between the amount households can afford to pay
versus housing costs for each prototype; and
5. Calculate subsidy needs for each prototype.
Scope of Work and Budget March 3, 199b
Poway Comprehensive Affordable Housing Strategy Page 3
1995 ITEM 16
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DAVID PAUL ROSEN & ASSOCIATES
Target income levels and prototypes will be selected in consultation with staff,
consistent with the terms of ti~e settlement agreement with the Legal Aid Society of San
Diego, Inc. Housing costs will be estimated through analysis of market data, interviews
with local housing developers in Poway and neighboring communities. To the extent
comparable market data on multi-family land costs are not available or available only
to a limited extent in Poway, DRA will use market prices for land appropriately zoned
in surrounding jurisdictions.
3. Review Local Resources, Leverage Opportunities and Legal Requirements
The purpose of these activities is to assure that DRA will appropriately advise the
Agency and City in developing its Strategy within the context of its housing needs
obligations, current and projected local and leveraged revenue resources available for
affordable housing, current and proposed land use policies.
a. Local Resources
City staff will provide information to DRA on existing programs and current and
projected resources for affordable housing from all resources, including the
Agency's Fund, Community Development Block Grant funds, City and Agency
- general funds and other local housing monies. These will include funds from
tax allocation bond issues.
b. Leverage Opportunities
Consultants will conduct a comprehensive review and description of currently
available leverage opportunities for affordable housing subsidies from non-City
sources. Leverage opportunities will be comprehensively surveyed among state,
federal and private sector sources. This review will describe programs available
to Poway, associated program requirements, and remaining available funding
levels.
The following non-local sources will be among those analyzed: State
Department of Housing and Community Development, California Housing
Finance Agency, Federal and State Low Income Housing Tax Credits, U.S.
Department of Housing and Urban Development, San Diego County Housing
Authority, community reinvestment loan commitments from private lenders,
non-profit intermediaries, Fannie Mae, Freddie Mac and FHA loan and
insurance programs, and other private sector resources.
DRA will assist the Agency and the City in identifying leverage opportunities
consistent with the program and project opportunities in Poway.
Scope of Work and Budget March 3, 1995
Poway Comprehensive Affordable Housing Strategy Page 4
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DAVID PAUL ROSEN & ASSOCIATES
c. Legal Requirements
The Consultant will identify how the City can best comply with the Federal and
5tare regulations governing its housing efforts. DRA will address compliance
under the recently stiffened requirements pursuant to the California Housing
Element law, as administered by HCD, and as applied in Poway's approved
Housing Element. DRA will also address the Agency's obligations regarding
funding and expenditures of the Fund, replacement housing and inclusionary
housing, both under State law and under the settlement agreement. We will
review restrictions pertaining to tax-exempt and taxable bonds financed using
Agency tax increment revenues. The City's and Agency's obligations to provide
state relocation benefits to eligible lower income displacees will also be
addressed, as will the application of Article 34 of the State Constitution.
DRA will be assisted in this task by a special housing legal counsel, Goldfarb &
Lipman, noted affordable housing counsel in California and a frequent DRA
partner.
4. Develop Housing Policies and Priorities
The Strategy must be informed by policies which provide clear guidance for the
targeting of limited City, Agency and leveraged resources. DRA will clarify and
recommend modifications to current City and Agency priorities, goals and policies.
Policy guidelines may include but will not be limited to such issues as income
targeting, housing type and tenure, definition of affordable housing expense, mix of
unit sizes, compliance with state and federal legal requirements, as well as those of the
settlement agreement, affordability term, location, public/private partnerships and other
factors. We will distinguish between the City's obligations under Housing Element Law
and the Agency's obligations under Community Redevelopment Law and the
settlement agreement.
5. Identify Program and Project Opportunities
DRA will review available program and project opportunities in Poway and will
provide recommendations for a variety of program elements consistent with Poway's
housing needs and resources.
Program elements to be considered may include the following, as well as others:
· New affordable housing construction;
· Acquisition of existing housing;
· Preservation of existing affordable housing at-risk of conversion to
market rate;
Scope of Work and Budget March 3, 1995
Poway Comprehensive Affordable Housing Strategy Page $
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DAVID PAUL ROSEN & ASSOCIATES
Syndications using Federal and State Low Income Housing and Federal
Historic Rehabilitation Tax Credits;
· Negotiations with developers for inclusionary components to overall
development plans;
· Housing rehabilitation grants or loans;
· Ventures with existing non-profit and for-profit housing development
corporations;
· Creation of a local non-profit development and/or management
corporation;
· Mortgage "buy-down" and "second loan" programs to assist qualified
home purchasers in obtaining financing for the acquisition of housing
units;
· Emergency relief to prevent foreclosures and rental evictions;
· Community lending partnerships with financial institutions under the
Community Reinvestment Act (CRA) and the Financial Institutions
Reform, Responsibility and Enforcement Act (FIRREA).
DRA will design program elements so that they are consistent with the City's affordable
housing needs, fulfill the City's and Agency's housing obligations, and feasible within
the City's current and potential financial resources. Careful attention will be paid to
appropriate integration of program and project opportunities with City planning,
zoning and design opportunities and constraints.
6. Prepare Five-Year Capital Plan
Once the housing assistance policies described above are established, housing
assistance goals specifying the number of households to be assisted by tenure, family
income, family size and special needs populations will be established. These will
describe achievable objectives over a five-year period, with a five-year implementation
plan as required under AB 1290 (Health and Safety Code Section 33490).
DRA will detail the affordable housing capital requirements needed to achieve these
assistance goals. These capital requirements will be categorized by:
· Subsidy capital;
· Debt capital;
· Equity capital.
Scope of Work and Budget March 3, 199.5
Poway Comprehensive Affordable Housing Strategy Page 6
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DAVID PAUL ROSEN & ASSOCIATES
The capital plan will explicitly state assumptions regarding interest rates and leverage
opportunities. In this way, performance under the five-year plan may be gauged against
changes in interest rates and affordable housing leverage opportunities as they actually
occur. Thus, the City will be assured that its performance under the Strategy and capital
plan may be tracked accurately in the context of changing circumstances and
conditions.
7. Meetings and Presentations
DR^ will be present at meetings as required by research, and as desired and requested
by City and Agency staff. Meetings and presentations may include sessions with the
Redevelopment and Housing Advisory Committee, the Affordable Housing
Commission and the City Council. Meetings will be paid on a time and expense basis
according to the attached fee and expense reimbursement schedule, allowing for on-
site and preparation time, and the following reimbursable expenses, as needed: coach
round-trip air travel, lodging, meals, ground transportation and parking expenses.
Budget
The not-to-exceed fixed price for preparation of the above scope of services for the
Strategy is $83,500. DRA will bill on a percent completion basis against the contract
maximum, which in no event may be exceeded without the mutual written consent of
the City and DRA. However, meetings and presentations (Task 7) will be billed on a
time and expense basis, against the line item maximum of $15,000. Billing rates for
professional fees and expense reimbursement will be per the attached 1995 fee and
expense reimbursement schedule. The following is an estimated breakdown of costs
by task. Actual costs by task may vary based on staff direction and emphasis.
1. Prepare Housing Needs Assessment $17,000
2. Conduct Housing Affordability Gap Analysis 8,500
3. a. Review Local Resources 3,000
b. Review Leverage Opportunities 7,000
c. Review Legal Requirements 7,500
4. Develop Housing Policies and Priorities 8,000
5. Identify Program and Project Opportunities 7,000
6. Prepare Five-Year Capital Plan 10,500
7. Meetings 15,000
TOTAL $ 83,500
Scope of Work and Budget March 3, 1995
Poway Comprehensive Affordable Housing Strategy Page 7
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DAVID PAUL ROSEN & ASSOCIATES
Schedule
DRA will work with City/Agency staff to develop a mutually agreed upon schedule for
completing the above scope of services. We estimate completion in four to six months,
depending upon the City/Agency participation and review process, including
workshops with the Redevelopment and Housing Advisory Committee, Affordable
Housing Commission and City Council as appropriate.
Consultant Team
The DRA team will consist of Mr. David Rosen, Principal, David Paul Rosen &
Associates; Nora Lake-Brown, Principal, David Paul Rosen & Associates Southern
California Office; and Mr. Roger Clay, Partner, Goldfarb & Lipman. Mr. David Rosen
will serve as project manager. Contacts are:
Mr. David Rosen
David Paul Rosen & Associates
1330 Broadway, Suite 1035
Oakland, California 94612-2509
- (510) 451-2552
Fax (510) 451-2554
Ms. Nora Lake-Brown
David Paul Rosen & Associates
Southern California Office
3941 Hendrix St.
Irvine, California 92714
(714) 559-5650
Fax (714) 559-5706
Mr. Roger Clay
Go[dfarb & Lipman
One Montgomery St.
West Tower, 23rd Floor
San Francisco, California 94104
(415) 788-6336
Fax (415) 788-0999
Attachment: · DRA 1995 Fee Schedule
Scope of Work and Budget March 3, 1995
Poway Comprehensive Affordable Housing Strategy Page 8
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