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Item 10 - Consideration of Comprehensive Affordable Housing Strategy - ,GENDA REPORT SUMMARY - - ~#~.....",,~~ TO: Honorable Mayor and Members of the City Council Honorable Chairman and Members of the Redevelopment Agency FROM: James L. Bowersox, City Manager/Executive Dir~ INITIATED BY: John D. Fitch, Assistant City Manager/Assistant Exe~rector Warren H. Shafer, Director of Redevelopment Service I~J~S Pamela R. Colby, Redevelopment Project Administrator ~ DATE: July 11, 1995 SUBJECT: Consideration of Process and Schedule for the Comprehensive Affordable Housing Strategy Development Pursuant to the JUdgement Entered in Smith V All Persons ABSTRACT The Redevelopment Agency approved a contract on April IB, 1995 with David Paul Rosen & Associates for the preparation of an affordable housing needs assessment and affordability gap analysis. This study is one component of the City/Agency obligations pursuant to the Judgment entered by the Court in Smith v All Persons. The result of this analysis will be the preparation of a five year capital plan for the Agency's affordable housing program, an updated Comprehensive Affordable Housing Strategy. The Redevelopment and Housing Advisory Committee has reviewed, and recommends that the City - Council/ Redevelopment Agency approve, the proposed process and schedule for this study. ENVIRONMENTAL REVIEW This item is not subject to CEQA review. FISCAL IMPACT There is no fiscal impact resulting from this action. Funds were previously appropriated to cover the $83,500 cost of the contract with David Paul Rosen & Associates. ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE A copy of this report was sent to the Legal Aid Society. RECOMMENDATION It is recommended that the City Council/Redevelopment Agency approve the process and schedule set forth in Attachment A, and charge the Redevelopment and Housing Advisory Committee with their respective responsibilities outlined therein. ACTION ~ \ of \3 JUL 11 1995 ITEM 10 ~ AGENDA REPOR_ CITY OF POW A Y TO: Honorable Mayor and Members of the City Council Honorable Chairman and Members of the Redevelopment Agency FROM: James L. Bowersox, City Manager/Executive Director INITIATED BY: John D. Fitch, Assistant City Manager/Assistant Executi i rector Warren H. Shafer, Director of Redevelopment Servic ~~ Pamela R. Colby, Redevelopment Project Administrator DATE: July 11, 1995 SUBJECT: Consideration of Process and Schedule for the Comprehensive Affordable Housing Strategy Development Pursuant to the Judgement Entered in Smith v All Persons BACKGROUND On April 18, 1995, the Redevelopment Agency approved a contract with David Paul Rosen & Associates for the completion of an updated affordable housing needs assessment and an affordability gap analysis. This analysis will provide the information needed to prepare a five year capital plan for the development of the maximum feasible number of affordable housing units, also to be prepared by David Paul Rosen & Associates (DRA) as part of the subject contract. This study and the resulting Comprehensive Affordable Housing Strategy are required pursuant to the Judgement entered by the Court in Smith v All Persons. FINDINGS On June 12, 1995, David Rosen attended the meeting of the Redevelopment and Housing Advisory Committee to review the purpose and scope of the subject study and the development of an updated Comprehensive Affordable Housing Strategy, and to obtain input on the proposed role of the Committee and a schedule for completion. The materials provided to the Committee regarding this process are found as Attachment "A" to this report. Briefly, steps #1-5 of the study, the housing needs assessment, affordability gap analysis, review of local resources, review of leverage opportunities, and review of legal requirements, involve the collection and analysis of data. The sources of this data are outlined on Attachment 2 of the materials from DRA (Attachment "A"). ACTION: 2 of 13 JUL 11 1995 - - Agenda Report July 11, 1995 Page 3 As proposed, the Redevelopment and Housing Advisory Committee would host a community forum to provide the public with the opportunity to comment on the data sources and the study approach. It was felt that this process would ensure that all data sources are identified and encourage community "buy-in" for the study process. Steps #6 and 7, housing policies and priorities and program and project opportunities, involve policy choices for addressing local affordable housing needs and legal requirements. The proposed process would involve the Redevelopment and Housing Advisory Committee in establishing recommended priorities for local affordable housing programs based upon the needs identified in the data collected. This would involve the Committee formulating recommended "guiding principles." The Committee would prepare a report to the City Council/ Redevelopment Agency to seek their input and guidance on these guiding principles which will ultimately be used to develop the Comprehensive Affordable Housing Strategy. With this Council/Agency direction, the Committee would return to the task of applying the guiding principles, in recommending priorities and evaluating programs to meet these priority needs. The staff of DRA would present a variety of program and project options for addressing these priority needs. Once the Committee evaluated and made recommendations from these program/ project options, the staff of DRA would develop a draft Strategy document. This document would include a five year capital program which would quantify the number and type of households to be assisted and the number and type of housing units to be provided through the Redevelopment Agency's affordable housing program. Once completed, this document would be forwarded by the Redevelopment and Housing Committee Advisory to the City Council/ Redevelopment Agency for consideration and action. The affordable housing needs assessment and gap analysis are requirements of the Judgement entered by the Court in Smith v All Persons. In consideration of this fact, City/Agency staff and David Rosen met with Catherine Rodman and Richard Steiner of the Legal Aid Society on June 20, 1995. The effort was undertaken in an attempt to validate the study process and schedule with Legal Aid. David Rosen recommended the meeting and staff concurred that there could be a benefit to identify and, where possible, address any specific areas of concern that Legal Aid might have with respect to the study process and information sources. The meeting held on June 20, 1995 was productive, with Legal Aid providing additional information sources, and both parties reaching a clear understanding of the process. Attachment 3 to the materials from DRA provides a summary of the proposed process and schedule. The Redevelopment & Housing Advisory Committee approved this document, with the caveat that a completion date of March 1996 be inserted in the "Target Date" column for task #7. .- JUL 11 1995 ITEM 10 4 3 of \3 Agenda Report July 11, 1995 Page 4 ENVIRONMENTAL REVIEW This item is not subject to CEQA review. FISCAL IMPACT There is no fiscal impact resulting from the recommended action. Funds were previously appropriated to cover the $83,500 cost of the contract with David Paul Rosen & Associates. ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE A copy of this report was forwarded to the Legal Aid Society. RECOMMENDATION It is recommended that the City Council/Redevelopment Agency approve the process and schedule set forth in Attachment A, and charge the Redevelopment and Housing Advisory Committee with their respective responsibilities outlined therein. Attachment: "A" - Memo from David Paul Rosen & Associates. C:\STRAT\71195.RPT JUL 11 1995 ITEM 10 i 4 of \3 - ATTACHMENT A - ~ - - DA,Vi D PAw _ RCS=N & ,A,SSJCiAiES - J _ S \i,3 :::: M ',I _', - v - E:C:\iC'JI:: :'=\/=_:='A=';- 3;';' "::'j~;: ^ 5 :-;:::::::- 1J:l'J:.'l: :';'I-;:C~NI.. :1:.'''; ~-::- -=_ -'':' ::;.5c:J :.;. X -''; ~:: 3. 5 ~ :: 6 June 6, 1995 To: Mr. Warren Shafer, Ms. Pamela Colby From: Mr. David Rosen, Ms. Nora Lake-Brown Subject: June 12, 1995 Redevelopment and Housing Advisory Committee Meeting Affordable Housing Strategy Purpose, Scope, Process, Schedule and Committee Role Agenda Item 5 ..- On(> agenda topic for the June 12, 1995 Redevelopment and Hou,'"g '\dvisory Committee meeting is a review or the Comprehensive Affordable Housing Strategy to be prepared by ORA. This review will provide the Committee an introduction to the scope, purpose, process and schedule or the Strate!,"! as developed by ORA in cOvper.:.tion with staff and the Council/Agency. I. Purpose The purpose of the Comprehensive Affordable Housing Strategy is to develop a sound affordable housing strategic plan for the City of Poway and Poway Redevelopment Agency in the context of the Poway community and the Smith settlement, with a particular emphasis on the use of the Agency's Low and Moderate Income Housing Fund. II. Scope Attachment 1 summarizes the scope of work of the Comprehensive Affordable Housing Strategy. The first five tasks will develop the backg,round information and analysis necessary to derive informed policy and programmatic ecisions. The last three tasks will. develop affordable housing policies, programs, projects and a five-year capital plan for use of Poway's affordable housing resources. - JUL 11 1995 ITEM 10 4 5 of 13 '" - DAVID PAUL ROSEN & ASSOCIATES To: Mr. Warren Shafer, Ms. Pamela Colby Date: June 6, 1995 Page: 2 1. Housing Needs Assessment The housing needs assessment will evaluate housing needs in the community through the use of secondary data sources and selective interviews with community providers and resources. DRA will also project future affordable housing needs over the next five years and at build out based on published employment projections by occupation, the current General Plan and local development trends. Attachment 2 summarizes the data sources and draft interview list for the housing needs assessment and projections. 2. Affordability Gap Analysis DRA will analyze the "affordability gap" between the cost of new rental housing construction and the amount that low income households of varying family sizes can afford to pay for housing. DRA will model developments reasonably expected to be built on the Gateway, Bowron Road, Briehan, Brookview sites and possibly a fifth site (e.g. Monte Vista, Brighton Ave.). DRA will analyze the gap for families earning no more than 50 percent of area median income, consistent with Affordable Housing Overlay zone restrictions, and will work with staff to identify other income levels to be analyzed (e.g. 35 percent, 80 percent). The gap analysis will be 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 and Agency's capacity to assist in the development and preservation of affordable housing under alternative targeting strategies given its resources and market conditions. 3. Review of Local Resources DRA will collect information from City staff and other sources on existing programs and current and projected resources for affordable housing from all resources, including the Poway Redevelopment Agency's Low and Moderate Income Housing Fund, County Community Development Block Grant funds, County HOME funds and other local housing moneys. These will include housing funds from tax increment bond issues. DRA will also look at other local resources such as land or air rights, as appropriate. JUL 11 1995 ITEM 10 4 6 of \3 -- - ----.. - - DAVID PAUL ROSEN & ASSOCIATES To: Mr. Warren Shafer, Ms. Pamela Colby Date: June 6, 1995 Page: 3 4. Review of 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 Po way, associated program requirements, and remaining available funding levels. DRA will assist the City and the Agency in identifying leverage opportunities consistent with the program and project opportunities in Poway. 5. Review of Legal Requirements DRA's legal associate, Goldfarb & Lipman, will review the City's legal requirements under California Housing Element law as administered by HCD. We will also address the Agency's obligations regarding funding and expenditure of the Low and Moderate Income Housing Fund, replacement housing, inclusionary housing and state relocation benefits to eligible lower income displacees. We will review restrictions pertaining to tax-exempt and taxable bonds financed using Agency Housing Set-Aside revenues. We will review, and assure the strategy complies with, legal requirements of the City and Agency under the Smith judgement. A summary of strategies available to preserve at-risk subsidized units (i.e. Poway Villas) will be provided. In addition, we will review the City and Agency's obligations under State and federal fair housing law, and the City's obligations under Article 34 of the State Constitution. 6. Housing Policies and Priorities The strategy must be founded on 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, as appropriate. We will distin~uish between the City's obligations under Housing Element Law and the Agency's 0 ligations under Community Redevelopment Law. - JUL 11 1995 ITEM 10 I 7 of 13 ~ - DAV 10 PAU L ROSEN & A.SSOCIATES To: Mr. Warren Shafer, Ms. Pamela Colby Date: June 6, 1995 Page: 4 7. 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. 8. Five- Year Capitall'lan Once the housing assistance policies, programs and projects described above are established, a five-year capital plan will be prepared which describes the maximum feasible number of units achievable over a five-year period given the City and Agency's anticipated housing resources and leverage opportunities. The plan will include housing assistance goals specifying the number of households to be assisted by tenure, family income, family size and special needs population. III. Process Attachment 3 summarizes DRA's recommended process and schedule for completion of the Comprehensive Affordable Housing Strategy. The Committee will initially conduct a meeting to review the purpose, scope, process and schedule of the Strategy. DRA will also solicit input from the Committee and members of the public on local resources and interview contacts for the housing needs assessment. Following DRA analysis, the Committee will conduct a second meeting to review the findings of Tasks 1 through 5 of DRA's scope of services as described in Attachment 1. At this meeting, DRA will present the draft research findings and solicit comments from the Committee and interested members of the public. The Committee will conduct a third meeting to deliberate on guiding principles for the Strategy, These are broad policy statements to guide evaluation of alternative policy and program options for the Strategy. The goal of the meeting is Committee adoption of recommended Principles to be forwarded to the Council/Agency for approval. JUL 11 1995 ITEM 10 t 8 of 13 - - "- - - DAVID PAUL ROSEN & ASSOCIATES To: Mr. Warren Shafer, Ms. Pamela Colby Date: June 6, 1995 Page: 5 Following these three Committee meetings will be a Council/Agency workshop. DRA will review findings of Tasks 1 through 5, and the Committee will recommend Principles. The goal of the workshop is Council/Agency adoption and/or revision of the Principles. DRA will develop, in consultation with staff, policy and program options consistent with Poway's housing needs, resources, constraints and the Principles as adopted by the Council/Agency. One or more additional Committee meetings will be held to review these options and develop a recommended Strategy to be forwarded to the Council/Agency. DRA will complete a five-year Capital Plan for the recommended Strategy and determine the maximum number of units the Agency can feasibly assist over this time period. .- The process will be completed with a Council/Agency workshop to review the recommended Strategy and Capital Plan. The goal of the workshop is Council/Agency adoption and/or revision of the Strategy. - JUl11 1995 ITEM 10 9 of \3 Attachment 1 POWAY AFFORDABLE HOUSING STRATEGY SCOPI: OF WORK 1. Housing Needs Assessment . Housing needs (overpayment, overcrowding) . Housing stock (unit types, age, vacancy, condition) . Housing prices and rents . Jobs/housing balance . Housi ng site assessment . Affordable housing preservation (i.e. Poway Villas) 2. Affordability Gap Analysis . Define income level targets . Calculate affordable housing expense . Develop housing prototypes (by site) . Estimate prototype development costs . Calculate affordability gap/subsidy requirements 3. Local resources . RDA Low and Moderate Income Housing Fund . CDBG . HOME 4. Leverage opportunities . California Tax Credit Allocation Committee (TCAC), . Calif. Department of Housing and Community Development (HCD) . California Housing Finance Agency (CHFA) . U.S. Department of Housing and Urban Development (HUD) . RTC, FDIC 5. Legal requirements . Housing Element Law . RDA Low and Moderate Income Housing Fund . RDA Inclusionary Requirement . RDA Replacement Housing . Use of Tax-Exempt Bond Proceeds . Smith Judgement . Purchase Option, Haley Ranch Estates . Affordable Housing Overlay Zone JUL 11 1995 ITEII 10 , 10 of 13 - - Attachment 1 (Continued) POWAY AFFORDABLE HOUSING STRATEGY SCOPE OF WORK 6. Housing Policies and Priorities . Geographic targeting . Income targeti~ of City financial resources . Definition of a ordable housing expense . Term of affordability . Housing type and tenure . Periodic review of housing strategy 7. Program and Project Opportunities . Affordable housing sites (new construction) . Preservation of at-risk units (Poway Villas) . Acqu isition/rehabi I itation 8. Five-Year Capital Plan . Maximum feasible number of units - JUL 11 1995 ITEM 10 II of 13 Attachment 2 POWAY AFFORDABLE HOUSING STRATEGY DATA SOURCES AND RESOURCE LIST Secondary Data Sources . 1 990 U.S. Census data by census tract . Urban Decision Systems 1995 update of Census data . State Employment Development Department (EDD) . Department of Housing and Urban Development (HUD) . San Diego Area Association of Governments (SANDAG) . Construction Industry Research Board . On-line computerized databases (Data Quick, COMPS) Local Resources/Contacts/Documents . Telephone survey of existing rental housing projects . Chamber of Commerce . Senior Issues Task Force . Po way Valley Senior Citizens, Inc. . Local transporation providers (e.g. Dial-A-Ride) . Local housing developers and real estate brokers . Local schools . Local churches . Local health practitioners . Local residential care providers . City code enforcement . Singh family farm, San Marcos . Oceanside and Encinitas studies on day laborers . Lifeline Community Services, Vista and Poway . North County Interfaith, Escondido . Project Motivate . Harmonium . South Poway Specific Plan . Poway Road Specific Plan . Old Poway Specific Plan . Economic projections for Poway industrial park . City Planning Department commercial survey JUL 11 1995 ITEM 10 12 of 13 - - Attachment 3 POWAY AFFORDABLE HOUSING STRATEGY RECOMMENDED PROCESS AND SCHEDULE Meetin2 Purpose/Goal of Meetinl! Tar2et Date 1. Council/Agency Council/Agency approves July, 1995 Meeting recommended process and schedule; Council/Agency directs R&H Advisory Committee to carry out the process. 2. R&H Advisory Committee leads community forum to Aug., 1995 Committee review Strategy purpose, scope, process, schedule, data sources and proposed interview list. 3. R&H Advisory Committee reviews consultant findings Sept., 1995 Committee (Tasks 1 through 5, Background -- Notebook). 4. R&H Advisory Committee adopts recommended To Be Determined Committee guiding principles to be forwarded to Council/Agency. 5. Council/Agency Consultant presents findings (Tasks 1 To Be Determined Workshop through 5); Committee presents recommended guiding principles; Council/Agency adopts guiding principles. 6. R&H Advisory Committee reviews policy and program To Be Determined Committee options developed by ORA in (one or two consultation with staff; Committee meetings) adopts recommended Strategy and forwards to Council/Agency. 7. Council/Agency Council/Agency adopts a Strategy and To Be Determined Workshop Capital Plan 13 of 13 JUlll 1995 ITEM 10