sr-102274-7arecommendation was thaw under thz existing arrangzment, the City is limited
to the .number of units-.made available by tnz Housing Authority of the County
Page 2
of Las Angeles. The City is therefore. competing with other cities under
contract with-the County for those number of units aLiocated to the County
.Housing Authority oy HUD::, We felt also that if Santa Nan4ca had its :own
housing authority, rt wou.ld..be competing with.alt other housing autho~itles
based on the merits of the application-and cauid therefore get a higher
portion of the total-number of obits avai}abie-for lease in- the Los Acsgeles
metropolitan areaw Husther, there is the issue that greater local control
... ~, -
of`housing programs to solve local housing prob.}ems can 6e achieved through
a local housing authority.
Several meetings with HUD to review the City's position and the
possibility of funding Section 23 for Santa iNonica ensued. In addition, HUD
officials conducted a one-day seminar on Guidelines for Revised Section 23
Housing Assistance Payrertts Program. Fallowing this series of meetings, the
staff changed its position. The July report to the City Council stated. very
clearly that funding of a Section 23 Leased Program by HUD would not cost the-
. City o? Santa Monica any money. The report indicated approximately $54,400
for• administrative, management and maintenance of the units if Santa Non's ca
received an initial allocation of 2y0 units at an annual Federal rent subsidy
of $404,.000. "REVISED SECTION 23 GUIDELINES" clearly stipulate a maximum ofi
3'/~ or the total aJiocation for administrative and management costs, The new
guidelines would then provide $12,000 rather than $50,400 and this would
indicate an additional expenditure of City funds to effectively operate the
program,
Ali of the cities participating in the seminar felt that they could note
continue to operate effectively wittl the 3ro. Participants were assured that
this is a ;:irm figure. Obviously, the move is to eler~~inate this type of
program. it makes the costs to cities creating new housing authorities
prohibitive.
Subsequent to the change in the staff position, President Ford signed
t1:e Housing and Community. Development Act of'1974. The new }egislation provides
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signrficaitt cha~tges~rn itous~ng; that are-not compatible=i~ith Revised. Section :;^ :__
~ .rts verbnature„ 4t wrJl-ichange,the REV45ED SECTfOss.23 HOUSl+t6:.
~~ ~ ,-
PROGRAPS to b~zkaouu~a~~r'SEGTfQFt 8 OF THE; NEk~ taUS fNG AGC OF 197" ,~, <.~
~~~r*~~
The,Houscng~anGOmnuaity Development~Act''of 1y74 deals more adequately
-z'~'~
with Housing for tFretiEFderty "There is a growing need in "Housing forthe
'~ , ~~
Eiderly!t~in ther~Ety of~Santa-Monica beoause~of the high percentage al' elderly._,:
In addition, ttre~eYare a Number. of `Pubiic`Housing Amendments.
The new measure- revises-the law governing 'the low-rent Public Housing
Program:{eliminating some provisions and altering others}, provides additional
annual contributions contract authority; and authorizes a new Lower-income
Housing Assistance Program under the revised law. Among the many changes from
prior law era the following:
Contract authority... Additional annual contributions contract authority
of $1,225 billion per annum is made available in the current fiscal year. At
feast'$i50 million ot" the additional authority is to be reserved for the
development of housing owhzd by public housing agencies, with a lease 50 percent
of the LniTS assisted with reserved funds required to ~e other than under the
new program.
Also, at least $15 million per annum of the aggregate subsidy authorization
available in FY 197$. (increased to at least $30 million in FY 1976} is to be .set
aside For Indians`other than under the new program, and operating subsidies are
required to cover "approved" operating cost deficits of projects financed with
set-aside funds.
Operating subsidies. Operating subsidies are separately authorized, but
are limited to $500:. million per annum of the aggregate FY 1975 contract
authorization, increased 6y $00 million in FY 1970.
Operating subsidies are to be provided for in annual contributions contracts,
subject to the availability of funds. For purposes of paying Such subsidies,
-the Secretary is directed to establish costs of project operation and reasonable
Page 4
prajections of income, based either on actual project characteristics or on
prototype well-managed peojectsperformance criteria.
e3igibiFi y and occupancq':.'.The measure continues the provision
authorizing public Rousing agencies to fix, subject to approva} by the
Secretary, income-limits for occupancy .and rents in treditional public pausing.
;lowever, it deletes the re4uirements fof {1} a gap of at'}east 20 percent
between the highest income }imits for admission and the lowest unassisted
rents and {2) income limits for continued occupancy in ,projects.
..Definition of income.. Family income is redefined. For families in Lnits
assisted under the new lower-income housing assistance program, details of
which are out}fined below, income is defined as total family income, por
families in re aular public housing; income, far purposes of the 8r•aoke 1
limitation, continues to be adjusted in accordance L~rith a statutorily prescribed
fcrmu?a ~.ahich has been .revised by eliminating double deductions for secondary
o:ace earner spouses, clarifying deductions for dependents, e?iminating
deductions for heads of households or their spouses and adding a deduction for
.foster child care payments made to a family. (The Brooke Amendment is a
determination of total workable income
cross income by the following factors.
Gross income is reduced to adjusted
1, 5% cost of living for heads of household under o2. Thin
figu;a may be reduced by lG% for heads of household over 52 or handicapped.
Z $300.00 per dependentchild.
After consideration of these factors, rent is determined by 25°; of
this adjusted gross income. One of the negative aspects-of the Brooke is
`that it does not allow the authority to cover expanses if the rent is
allawed the ?andiord. In determining rent to the a~mer, the }oca] vacancy.
factor is a consideration, as we!i as the overhead rate which includes.
administrative and management costs per unit.
Page 5``
The City,. if it wishes to relinquish the idea of stronger local control
over low-cost housing because of the prohibitive cost to new housing
.authorities operating under revised Section 23, may elect to continu2 the
existing arrangement with .the Housing Authority of the County of Los Angeles.-
The only change, if this is the Council's position, would be a request to thz
County ;,,- an additional 250 units and a new resolution of agreement. City
staff would provide. supporting data in the -'orm of a "needs assessment" to the
Housing Authority of the County of Los Angeles, who would then include. the
request for an increase. in the County's revised submission to HU~J.
Alternative 2.
Staff revew of the new Hcusing and Community Developmenx Legislation;
recantly signed by President Pord indicates that substantial change will
ultimately take place in housing: The advantages of local control as reported
earlier still prevail. ;ne prohibitive cost factor ~.,ihich staff has reiterated
can be eliminated as a negative .for the City of Santa Monica, if, in fact,
the City Ccuncil does create a Housing Authcrity of the City of Santa Monica
and contract for services with the Housing Authority of the County of Los
Angeles. Under such an arrangement, the Country Housing Authority would
continue to lease in behalf of the City of Santa Monica.. This would allow
the City to build up its ewn volume io eventually go it alone: This type
" Pages fx t
of arrangement will allow the Ci,ty:of Santa Monica to dictate policy,
determine where:-to:'}ease,,, type of tenant'selection, etc.. We may wish to
request that a.leastrtgr;office be established by the County authority within.
:,_.,.
~_he City of Santa Monica ar request abet the County authority hire a Sahta
~!onica 7esident.' Staff'assessment'leads us to believe that once the. County
knows there exTsts'a Housing Authority of the City of Santa Monica, they may
.provide better service. This local,autonomy can provide same positive spin-offs
in the future-with the implementation of the Housing and. Community
Development Act of 1974. Of particular significance, is the requirement; to
secure funding under the Act, of a Housing Assistance Plan +Nhich:
"accur~te',y surveys the condition of the community housing stock and
assesses the housing assistance needs or' lower income persons residing
or expected to resfde in the community..
Specifies a realistic annual goal for thr number of persons to be
assisted, including the mix of nesa, existing and rehabilitated .units and. the
size and types of projects and assistance bzst suited to the needs cf area
lower Income persons.
indicates the general locations of proposed io+~~er income housing with
a view to furthering revitalization, promoting greatzr housing choice and
avoiding undue concentration of low-income persons, and assuring availability
o` adequate public facilities and services for such housing.
Alternativz 3.
if the City is desirous of creating a Housing Au*_hority of the City
of Santa Monica and administering the program in-house, it may elect to
do so. However, it should 'be noted tha± administrative and management
costs will run far above the 3% of projzct cost allorrabie by HUD. This
option ~rould necessitate a financial commitment on the part of the City.
Federal funds may be available from the Housing and Commuhity Development
Act, if the City CounciP determines low to moderate income housing a
City,,staff recomme,that he :City Council'consider alternatives #2;
the creation of a Local Housing Authority is desirable.
2. Following the public hearing, consider a resolution declaring
t~~e need for a Housing Authority and endorsing the use of the
Section 23, Leased Housing Program, in the City of Santa Monica:
3. .,.e City Council authorize staff to up-date statistical data
o.: housing needs-for the elderly and low-income families and
submit such pertinent data as .may be necessary to the Housing
Authority of the County of Los Angeles to enable such data to
be incorporated into the County Authoritys application to HUD.
There is a Housing Element Study undei^way.
4. Thy City Council authorize staff to prepare a contract for
execution between the Housing Authority of the City of Santa
Monica and the Housing Authority of the County of Los Angeles,
designating a request for 500 housing units.
5. !f the above is adopted by majority vote of the C'rty Council,
the creation of the Housing Authority offers two options:
a Councij may aoppint itself as-the Local Housing Authority
by adopting a resolution to that effect.
b. Creation of a separate authority ,which will require adoption
of an ordinance by-the City Council:
°rapared by: .Martha R. Srcwn, Administrative Assistant, Grants Liaison`
iu.A B/ j g