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Housing Authonty Meeting' November 24,1998 Santa MOnica, California To Housing Authority From City Staff Su bJect Recommendation to Incorporate County of Los Angeles SectIon 8 Tenants INTRODUCTION > ThiS staff report transmits Information to the Housing Authonty concerning the status of the Tenant Assistance Rental Program (TARP) and a recommendation to Incorporate 93 County of Los Angeles Section 8 tenants who are Santa MOnica reSidents Into the Santa MOnica Section 8 program BACKGROUND On June 9. 1998 the City Council authonzed the creation of the Tenant Assistance Rental Program (TARP) The program was created in response to the large number of Sectron 8 contract cancellations that had pnmarlly affected elderly and disabled tenants At that time, 63 Section 8 tenants had been affected by the cancellation of Section 8 contracts City staff developed program regulations In June and began proViding rental assistance to the first three TARP partiCipants on July 1, 1998 Currently, nine tenants receive TARP assistance TARP proVides up to two years of City-funded rental assistance to Section 8 tenants whose landlords have canceled their Section 8 contracts The program also proVides assistance with moving costs and secunty depOSits for tenants who relocate to other apartments To date, 79 tenants have been affected by the cancellation of Section 8 contracts Of these, 29 are semors, 9 are disabled seniors, 23 are disabled and 18 are tenants with children Staff works very closely with affected tenants and coordinates with Santa 1 HA-J IIOV 2 It .. - -~ -~- ...::::Iloo.... _ _ _ ___ _ ---- -- --- - --- Monica-based social service agenCies that provide case management and other needed services on an as-needed basIs In addition, Westslde Rental Connection, a Santa MOnica business, donates its weekly rental listing to affected tenants The status of the 79 tenants IS summarized In the following table: TENANT STATUS NUMBER ReceiVing T ARP ASSistance 9 Relocated In Santa MOnica 19 Relocated outSide of Santa Monica 8 Dropped from Section 8 program and stayed In their units 9 EVicted from their apartments 6 Pending the outcome of a court case 3 Contract cancellation in progress 14 Owner canceled contract termlnatlon 4 Opt out on hold 6 Tenant died 1 TOTAL 79 DISCUSSION DUring the public testimony at the June 9, 1998 City CounCil meeting, the Issue of County of Los Angeles SectIon 8 tenants who reside In Santa Monica was discussed CounCil members expressed concerns about the Impact of Section 8 contract cancellations on the County's Section 8 tenants In Santa Monica CounCil members directed staff to research the status of these reSidents and to report back to City CounCil with recommendations for their conSideration 2 - Staff has contacted the County of Los Angeles and determined that 93 Santa MOnica residents currently receive Section 8 assistance from the County Of the 93 County Section 8 tenants, 45 live In bUildings owned by Community Corporation of Santa Monica (CCSM) and 3 live In bUildings owned by other non-profit organizations The County IS Willing to enter Into a wrrtten agreement with the City of Santa Monica which Will allow the City to Incorporate the 93 Santa MOnica reSidents Into ItS Section 8 program Because the Santa MOnica HOUSing Authority has an 88% lease-up rate, there are a suffiCient number of unused certificates and vouchers available to Incorporate the 93 Santa MOnica tenants The low lease up rate results from the Section 8 program's current inability to remain competitive In the rental market place HUD conSiders 95% to be the minimum acceptable lease-up rate An 88% lease-up rate IS conSidered problematiC by HUD and could result In the permanent loss of certificates and vouchers Staff has been informed that HUD policy generally requires the transfer of unused certificates and vouchers from under-leased agencies to fully-leased agencies IncorporatIng the Santa MOnica reSidents WIll Immediately Increase our lease up rate to 96% and Will Increase administrative fees earned by $65,765 annually ISSUIng 93 certIficates and vouchers to replace County certificates and vouchers Will temporarily limit the number of currently unserved reSidents who can be aSSisted In the future However, the Section 8 program "turns over" an average of 96 certificates and vouchers a year PartiCipants become IneligIble, die or move to another community Over time the Section 8 program will bUild up a reserve of newly unused certificates and vouchers In the normal course of bUSiness 3 -- - - - --- FINANCIAL/BUDGETARY IMPACTS Because of the Impact of Costa-Hawkins, a low Fair Market Rent (FMR) standard and landlords canceling Section 8 contracts, the Section 8 program IS currently 88% leased up Because the current lease up rate IS below the program's FY 98-99 approved budget levels, It IS antiCIpated that the additional revenue and expenses Involved In Incorporating the County SectIon 8 tenants will not require a budget adjustment It IS antiCipated that there IS sufficient budget authority currently avaIlable within the current FY 98-99 approved budget Recommendations Staff recommends that the HOUSing Authority direct the Secretary to enter mto an agreement with the County of Los Angeles to Incorporate the 93 County of Los Angeles SectIon 8 tenants who are resIdents of Santa MOnica Prepared by Jeff Mathieu, Director, Resource Management Department Bob Moncrief, Housing and Redevelopment Manager Peter Mezza, HOUSing Coordinator 4