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SR-407-006 (4) I WIll. e . )J A-3 ftJ?-t/or; JUl 2 A J990 C/ED:HD:SW:ds Housing Authority Meeting: 7 /24 / 90 Santa Monica, California TO: Housing Authority FROM: City staff SUBJECT: Resolution Approving Revised section 8 Housing Certificate Program Annual Contributions Contract INTRODUCTION This report recommends that the Housing Authority adopt a resolution approving the amended Consolidated Annual Contributions Contract (CACC) for the section 8 certificate program, and authorizing the Executive Director of the Housing Authority to execute the CACC. BACKGROUND The Santa Monica Housing Authority administers two types of federal rental assistance programs: (1) the section 8 Certificate program and (2) the Section 8 Housing Voucher program. Both programs provide assistance to participating households. As families move, the assistance moves with them rather than being dedicated to the units. Both are based on the tenant paying 30% of their adjusted income as their portion of the rent. HA-3 JUL 2 ,1 1990 . . On the Certificate program an eligible tenant w~ll always pay 30% of their income towards the rent regardless of the total rent on the unit. The maX1mum rent for the unit is set by the Federal Government and the Housing Authority is required to perform a rent reasonableness test for the area. Maximum annual increases are also set by the Federal Government. with a Voucher, an eligible tenant is entitled to a rental subsidy that is the difference between 30% of their adjusted income and a payment standard set by the Housing Authority. The tenant can pay more or less than 30% of their income depending on the actual rent for the unit. The payment standards are usually adjusted annually to provide increased tenant subsidies to offset rent increases. The Vouchers are transferrable to any City with an active Housing Authority to insure the greatest mobility for Section 8 applicants. In the previous 5 years, the Federal Government, through HUD has made more Vouchers available than certificates. The Santa Monica Housing Authority currently has an allocation of 559 certificates and 167 Vouchers. The Housing Authority entered into an Annual Contributions Contract (ACC) with the D.S Department of Housing and Urban Development in March, 1976. The ACC governs the operations of the section 8 Housing Certificate Program and details the budget authority available from MUD. The original ACC was for a term of fifteen years. The Ace is amended from time to time as required by MUD. wa e e DISCUSSION The original ACC is due to expire on March 29, 1991. Federal regulations prohibit housing authorities from entering into any new contracts if there is less than one full year remaining on the Ace. In order to allow the Santa Monica Housing Authority to continue to put units under contract without violating federal regulations, HUD has split the ACC into two components. Exhibit I lists those "projects" for which federal funds had been appropriated prior to fiscal year 1988. (HUD classifies individual allocations as "projects", even though the Santa Monica program emphasizes scattered site leasing of units throughout the City). The proJects listed in Exhibit I expire on December 28, 1993. Exhibit II contains those projects which have 1991 expiration dates (as well as an additional project which does not expire until 1994). HUD has verbally notified staff that project CA16-E111-901, 001, and 002 (all three of which expire in 1991) will be renewed once Congress approves the federal budget authority. This technical contract modification will serve the purpose of extending seven of our nine projects on the current CACC. It will also allow BUD to easily replace the projects that expire in 1991 without necessitating renewal of all 559 units at one time. The total amount of contract authority is not changed by this contract ,,.. . . modiflcation. BUDGET/FINANCIAL IMPACT Payments to Santa Monica Housing Authority I s Section 8 Program certlficate and voucher holders are budgeted at account number 12- 700-695-00000-7734-00000. The proposed amendments to the Certificate Program Consolidated Annual Contributions Contract separate those projects which requlre reauthorization of Federal funding in 1990-91 from those which do not, to facilitate the reauthorization process. Therefore, there is no need to modify the Housing Authorlty's 1990-91 Adopted Budget at this time. RECOMMENDATION It is recommended that the Housing Authority adopt the attached resolution approving the Consolidated Annual contributions Contract and authorizing the Executive Director to execute the CACC. Prepared by: Nancy West, Housing Program Manager steve Wagner, Housing Coordinator Department of community and Economic Development Attachments: Exhibit I Exhibit II Resolution . . IfA-Y tftJ-:r-OCJ0 JUL 2 4 199D CE/D:HD:SW:SC Housing Authority Meeting: 7/24/90 Santa Monica, California TO: Housing Authority FROM: City staff SUBJECT: Resolution Approving the Submission of an Application for 72 Houslng Assistance Vouchers and certificates. INTRODUCTION The Department of Housing and Urban Development (HUD) thru a Notice of Funding Availability (NOFA) appearing in the June 11, 1990 Federal Register has informed housing authorities regarding the availabillty of new Vouchers and Certificates for the section 8 Program. This report transmits for adoption a resolution authorizing the submission of an application for 36 certiflcates and 36 Vouchers. BACKGROUND The Santa Monica Housing Authority administers two types of federal rental assistance programs: (1) the Section 8 Housing certificates Program and (2) the Section 8 Housing Voucher program, Both programs provide assistance to participating households. As families move, the assistance moves with them rather than being dedicated to the units. Both are based on the tenant paying 30% of their adjusted income as their portion of the rent. /J IJ--'f JUL 2 1 1990 . . On the certificate program an eligible tenant will always pay 30% of their income towards the rent irregardless of the total rent on the unit. The maximum rent for the unit is set by the Federal Government and the Housing Authority is required to perform a rent reasonableness test for the area. Maximum annual increases are also set by the Federal Government. With a Voucher, an eligible tenant is entitled to a rental subsidy that is the difference between 30% of their adjusted income and a payment standard set by the Housing Authority. The tenant can pay more or less than 30% of their income depending on the actual rent for the unit. The payment standards are usually adjusted annually to provide increased tenant subsidies to offset rent increases. The Vouchers are transferrable to any City with an active Housing Authority to insure the greatest mobility for Section 8 applicants. In the previous 5 years, the Federal Government, through HOD has made more Vouchers available than Certificates. The Santa Monica Housing Authority currently has an allocation of 559 Certificates and 167 Vouchers. BUD has changed the method in which applications for Section 8 certificates/Vouchers are processed. All housing authorities can apply for Certificates and Vouchers. There are 3,600 Certificates/Vouchers available in the Los Angeles area office of HUD. Previously, HUD had 1nvited only certain housing author1ties to apply. . . The Santa Monica Housing Authority currently has 708 units leased. This represents over 97% of our allocation of 726 units. The current waiting list for available subsidies exceeds 6,000 households. Under the section 8 Program and local ordinances, participants pay 30% of their adjusted income as their share of the rent. The Housing Authority executes a Housing Assistance payments Contract with the owner after approving the lease and determining by inspection that the unit complies with housing quality standards. DISCUSSION The maximum number of Vouchers and Certificates that can be app11ed for are 10% of an authority's current allocation. santa Monica currently has an allocation of 726 units; therefore, 72 is the maximum we can apply for at this time. The award of these Vouchers and certificates is based on a competitive criteria including: 1. Housing Authority administrative capability; 2. Previous funding level~ 3. Percentage of persons below the poverty level according to the 1980 census; 4. Participation in an Operation Bootstrap program which includes career and personal counseling; 5. Policies that target the homeless population; and 6. Local initiatives that increase housing opportunities. . . Initial applications are due on July 26, 1990. The attached resolution must be forwarded to HUD with the formal application. staff believes that the Housing Authority has a good opportunity to receive additional Vouchers and Certificates. The Authority should score high on crlteria 1, 5 and 6. Contingent upon receipt of an allocation, the Housing Authority will need to enter lnto an Annual Contract with HUD. The ACC governs the use of the new allocation. This item has been scheduled for action at the July 19, 1990 Housing Commission meeting. FINANCIAL/BUDGETARY IMPACT Payments to Santa Monica Housing Authority Section 8 program certificates and Voucher holders are budgeted at account number 12- 700-695-00000-7734-00000. The adopted budget for FY 1990-91 includes an anticipated 54 unit increase. Further, at any time, only about 98% of currently allocated un1ts are leased. Due to these budget factors and given the lead time necessary to secure final federal approval and to implement leasing of the additional units, staff believes that there is sufficient existing appropriation authority to accommodate the requested additional 72 units. RECOMMENDATION It is recommended that the Housing Authority adopt the attached resolution authorizing the submission of the application for . . additional Vouchers and Certificates. Prepared by: Nancy West, Housing Program Manager Steve Wagner, Housing Coordinator Department of Commun1ty and EconomlC Development Attachments: Resolution