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SR-120908-1B~® City Council and ~~tY of Redevelopment Agency Report Santa Monica' - Redevelopment Agency Meeting:~e~.^.*b~... _, _ ~8- Agenda Item:°=~- _ ~ To: Chairperson and Redevelopment Agency From: Andy Agle, Director of Housing and Economic Development Subject: Replacement. Housing Plan for 430-508 Pico Boulevard Recommended Action This report requests that the Redevelopment Agency ("Agency') approve the proposed Resolution adopting the Replacement Housing Plan for 430-508 Pico Boulevard. Executive Summary Community Corporation of Santa Monica (CCSM) has predevelopment loan from City housing trust funds to property located at 430-508 Pico Boulevard and perform future affordable housing development on the site. The with fourteen (14) residential units, of which seven commercial unit which is vacant. applied for an acquisition and finance the acquisition of the predevelopment activities for a property is currently improved (7) are .occupied, and one Under. California Redevelopment Law, Section 33413.5 (Health and Safety Code, Section 33000 et seq.), the Agency must adopt a replacement housing plan when existing units, occupied by low and moderate income households, will be removed as a result of an Agency-assisted project. A replacement housing plan describes the measures the Agency will undertake to provide comparable replacement housing within four years following removal of the original units. The proposed Replacement Housing Plan for the 430-508 Pico. Boulevard. property has been made available to the public for review as required by Community Redevelopment Law. Background The Redevelopment Agency has previously approved replacement housing plans for two Agency-assisted affordable housing developments at 2411 Centinela Avenue and 1943 High Place. in 2005. Since that time, the replacement units for the 2411 Centinela Avenue project have been completed. 2D0~ .~ Discussion In accordance with California Redevelopment Law, Section 33143 (a) the Agency will meet its replacement housing obligation by implementing the following measures: • Replacing the removed units with comparable housing within four years of demolition Ensuring the affordability of the replacement housing units and the occupancy by households whose incomes are commensurate with those households previously occupying the demolished units. Demolition of the units at 430-508 Pico Boulevard is anticipated to commence in November 2010. The new construction project is anticipated to be completed in May 2012, well within the requirement to replace the removed units within four years of removal of the existing units. The replacement units are to be affordable to households at very low, low or moderate income levels, which levels shall be commensurate with the current households occupying the units to be removed. Because the income levels of the current households are not known at this time, the assumption has been made that all households in the units to be removed are of the lowest income category, very low income. The table below summarizes the seven occupied units to be removed. It should be noted that the zero-bedroom units are counted as one-bedroom units, as required by the Health and Safety Code, for the purpose of determining the total number of bedrooms to be removed. Housina Units to be Removed # of existing units Unit type Total # of bedrooms # of very low ' income'bedroorns, 2 0-bedroom 2 2 3 1-bedroom 3 3 1 2-bedroom 2 2 1 3-bedroom 3 3 Total 7 10 10 2 California Redevelopment Law, Section 33413(f), allows the Agency to replace housing units with a fewer number than removed housing units if the total number of bedrooms in the replacement housing units equals or exceeds the number of bedrooms in the removed units. Accordingly, CCSM will be required by the Agency to replace the 7 units containing 10 bedrooms with at least 4 units containing 10 bedrooms. It is important to note that the future development is anticipated to provide more, than the 4 replacement units. The zoning for the site allows approximately 32 affordable units. Financial Impacts & Budget Actions The recommendation does not have any budgetary or financial impacts. Prepared by: Melissa Lindley, Senior Administrative Ahalyst Forwarded to Council: Andy Agle v 1,,,/ n Director, Housing and Economic ' y M Development Attachments: Attachment A; Replacement Housing Plan for 430-508 Pico Boulevard Attachment B: Agency Resolution Approving the Replacement Housing Plan for 430- 508 Pico Boulevard 3 REPLACEMENT HOUSING PLAN For the 430-508 Pico Boulevard Project INTRODUCTION AND STATEMENT OF PURPOSE The City of Santa Monica Redevelopment Agency (the "Agency") is proposing to provide financial assistance to the Community Corporation of Santa Monica ("CCSM") for the acquisition and predevelopment costs associated with 430-508 Pico Boulevard. CCSM is currently exploring the options for development of the site, which would entail the demolition of 14 existing rental housing units, 7 of which are not offered for rent to low or moderate income households due to the current owner's use of these units for storage purposes. New construction on the site is expected to include up to a maximum of 32 affordable housing units but at this time the number and type of units is not known." Section 33413.5 of California's Community Redevelopment Law (Health and Safety Code, Section 33000 et seq.) requires the Agency to adopt a replacement housing plan when it enters into certain agreements that would lead to the destruction or removal of dwelling units from the low and moderate income housing market. Section 33413(a) requires that whenever dwelling units occupied by low and moderate income households are destroyed or removed from the low and moderate income housing market as part of a redevelopment project, the Agency shall within four years of the destruction or removal, rehabilitate, develop, construct or cause to be rehabilitated, developed or constructed, for rental or sale to persons and families of low or moderate income at an affordable housing cost an equal number of replacement dwelling units containing an equal or greater number of bedrooms as the destroyed units. Section 33413(f) permits the Agency to satisfy its replacement housing obligation with fewer units so long as (i) the total number of bedrooms in the replacement units equals or exceeds the number of bedrooms in the destroyed units, and (ii) the replacement units are affordable to and occupied by the same income level of households as the destroyed units. Replacement housing units can be developed anywhere within the Agency's jurisdiction. Per Section 33413(f)(1) of the California Community Redevelopment Law, "destroyed or removed units having one or no bedroom are deemed for this purpose to have one bedroom. This Plan has been prepared to satisfy the requirements for replacement housing under California Health and Safety Code Sections 33413 and 33413.5 This Plan describes the following: 1. Site location 2. Development of the replacement housing 3. Financing the replacement housing 4. Schedule for the construction of the replacement housing 5. Period for which the replacement units will remain affordable 6. Article 34 Compliance 7. Availability of the Plan for public review DEFINITIONS Very-Low-Income Household Persons and families whose gross household income does not exceed the qualifying limits for very low income families as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937. Very Low income generally is 50 percent of the area median income adjusted for family size, as more specifically defined in Section 50105 of the California Health and Safety Code. Low-Income Household Persons and families whose gross household income does not exceed the qualifying limits for lower income families as established and amended from time to time pursuant to Section 8 of the United States Housing Act of 1937. The low income limit generally is 80 percent of the area mediah income adjusted for family size, as more specifically defined in Section 50079.5 of the California Health and Safety Code: UNITS TO BE REMOVED If the site is developed with affordable housing, six multi-unit housing structures containing 5zero-bedroom (studio), 6one-bedroom, 2two-bedroom and 1 three- bedroom rental units would be demolished. The 7 units that are currently occupied contain a total of 10 bedrooms. Because the remaining 7 units do not currently house or are not available for occupancy by low and moderate income households, the Community Redevelopment Law does not require their replacement. SITE LOCATION The site is located at 430-508 Pico Boulevard in the City of Santa Monica. Exhibit 1 provides a map of the project location. REPLACEMENT HOUSING UNITS This Replacement Housing Plan describes the measures that the Agency will take to ensure the production of 10 replacement bedrooms within four years of the removal of those bedrooms from the low and moderate income housing market. One hundred percent (100%) of the replacement bedrooms must be available at affordable housing cost to, and occupied by, persons in the same or lower income category as the very low and low income persons displaced from the 10 original bedrooms. 2 If the existing units on the site are demolished it is expected that the site will be developed with affordable housing consisting of a sufficient number of units. to replace the 10 bedrooms demolished. Any development on the site will be required to include affordable housing restricted in accordance with Health and Safety Code Section 33413 in order to meet the obligation to provide replacement housing, including units affordable at the income levels of the households displaced. Construction of housing on the site will occur within four years of the demolition of any existing units. The replacement housing units will provide affordable units to meet the replacement obligations triggered by the demolition activity, if any. FUNDING SOURCES The financing for the replacement housing units, if required, may include Redevelopment Housing Trust Funds; Tax Exempt Bonds, Tax Credit Equity, Multifamily Housing Program (State funds) and Multifamily Housing Program - Nonresidential Space for Supportive Services (MHP NSSS) funds: The Agency will require that CCSM may not proceed with demolition of the existing units until it has secured the necessary funding for development of the replacement units. TIMELINE FOR REPLACEMENT HOUSING All of the replacement units will be available for occupancy within four years of commencement of demolition. The anticipated project timeline includes demolition of existing structures and commencement of new construction in 2011 and construction completion in 2012. LOW/MODERATE INCOME ASSURANCE The Agency will require the recordation of a covenant against any replacement housing units requiring at least 55 years of very low and low income affordability, as required by Community Redevelopment Law. Moreover, the Agency, in accordance with California Health and Safety Code Section 33418, monitors on an ongoing basis, any housing affordable to persons and families of low or moderate income developed or otherwise made available pursuant to agreements with the Agency. ARTICLE 34 COMPLIANCE Authority to develop new affordable. housing units under Article XXXIV is found in a Santa Monica voter-approved initiative adopted on November 3, 1998 known as Proposition I which grants annual (fiscal year) authority to the City to develop, construct or acquire low rent housing projects. AVAILABILITY OF PLAN FOR REVIEW In accordance with Community Redevelopment Law, a copy of this Replacement Housing Plan will be available for review and comment by other public agencies and the general public at the City of Santa Monica Redevelopment Agency, 1901 Main Street, Suite.D, Santa Monica, CA 90405. Publication of a notice of the Plan's availability will be given in a newspaper of general circulation a reasonable time prior to the Redevelopment Agency's adoption of the Plan. EXHIBIT 1 Map ~ Svc `~' ,,~ ~~ ~y v r ' ~~. sr . f ~'Q ~~ ~' ~ ~~ ,~ p 9~x ~SJ ~ l'l~r S yr kr J ~ C ~1 Y ynT i>Njv `p Q V~ ~ eN ~~ r ~~ er, s,- SK s„ y9j y1 r Q~~P ~ L s' ~ St2 S y~ 54~y ~.,N v p Y~~ S e~ s ~ ~, c~'~t~ ~~~~~ '~ - 51.. CaPYn3fit!~CitY alSanla hAonica 5 Reference Resolution No. 513 (RAS).