sr-012412-3uCity Council Meeting: January 24, 2012
Agenda Item:
To: Mayor and City Council
Housing Authority Chair and Board
From: Andy Agle, Director of Housing and Economic Development
Subject: Agreement to Perform Affordable Housing Operations
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute an agreement with the Housing Authority to:
1. Assign responsibility and funding for affordable housing compliance monitoring,
inspections, waiting list management, enrollment, reporting, and related activities
from the City to the Housing Authority;
2. Assign responsibility and funding for affordable housing production and
preservation activities from the City to the Housing Authority;
3. Assign responsibility and funding for implementation and continuing oversight of
the Senior Homeless Prevention and Rental Assistance Program from the City to
the Housing Authority;
4. Assign the stream of payments associated with Cooperation Agreement No.
8180, an amount not to exceed $20,282,771 and future payments pursuant to
Cooperation Agreement No. 9267, and available housing set -aside funds from
the City to the Housing Authority (collectively, the Housing Obligation Funds);
and,
5. Assign responsibility to perform the affordable housing administrative
responsibilities and funding functions to the Housing Authority using proceeds
from the Housing Obligation Funds.
Staff recommends that the Housing Authority authorize the Housing Authority Board
Chair to execute an agreement with the City of Santa Monica to:
1. Accept responsibility and funding for affordable housing monitoring activities from
the City;
2. Accept responsibility and funding for affordable housing production and
preservation activities from the City;
3. Accept responsibility and funding for the Senior Homeless Prevention and Rental
Assistance Program from the City;
4. Accept the assignment from the City of the stream of payments associated with
Cooperation Agreement No. 8180, an amount not to exceed $20,282,771 and
future payments pursuant to Cooperation Agreement No. 9267, and available
housing set -aside funds from the City to the Housing Authority (the Housing
Obligation Funds); and,
5. Accept responsibility to perform the affordable housing administrative
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responsibilities and funding functions using proceeds from the Housing
Obligation Funds.
Executive Summary
On December 29, 2011, a decision from the California Supreme Court called for the
dissolution of all redevelopment agencies in California by February 1, 2012. It is critical
that affordable housing production and preservation activities, as well as housing
assistance programs, continue in Santa Monica. The proposed agreement (Agreement)
would assign responsibility and funding for affordable housing monitoring, affordable
housing production and the senior homeless assistance program to the Housing
Authority to help ensure the continuation of such activities.
Background
For several decades, the City of Santa Monica and the Santa Monica Redevelopment
Agency have conducted an aggressive affordable housing program that has resulted in
the production and preservation of over 2,900 apartments that are affordable to very
low, low and moderate - income families. The primary funding source for Santa Monica's
affordable housing programs has been redevelopment tax - increment funds.
Historically, Council has prioritized redevelopment funds for the purpose of increasing,
improving and preserving the City's supply of low and moderate housing. On
January 9, 2003, Council authorized Cooperation Agreement No. 8180 and adopted
Resolution No. 9827 (CCS) to assist the City in achieving its affordable housing goals.
Additionally, given extensive community input received during the preparation of the
Agency's Five -Year Implementation Plan, Council, on August 10, 2010, approved
Cooperation Agreement No. 9267 (CCS /RAS) and adopted Resolutions 10519 (CCS)
and 527 (RAS) to ensure timely implementation and completion of redevelopment
priority projects, including affordable housing.
In addition to the production and preservation of affordable housing, redevelopment
funds have supported a Senior Homelessness Prevention and Rental Assistance
Program, approved by the City Council on November 14, 2006. The program currently
provides rental housing vouchers to 82 very low- income, formerly homeless seniors.
On December 29, 2011, the California Supreme Court issued a final decision in the
case of California Redevelopment Association v. Matosantos, issuing a decision to
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uphold AB 26 which dissolves redevelopment agencies by February 1. 2012. On
January 10. 2012, in accordance with Section 34176 of Part 1.85 of the Health and
Safety Code (Section 34176), the City Council approved the transfer of the Agency's
housing assets and functions to the City. Staff recommends that the City enter into an
Agreement with the Authority so that the Authority may implement the City's obligations
under Section 34176 and assume the City's obligations under the Cooperation
Agreements and Implementing Agreements, pertaining to affordable housing
production, preservation and assistance activities, and managing all housing assets
transferred to the City.
Affordable housing programs in Santa Monica are of local and regional significance. At
the local level, Santa Monica voters have consistently confirmed that the preservation
and promotion of a diverse local community is of paramount importance through voter
adoption of rent control, extended affordable housing production authority, and flexible
requirements to create opportunities for affordable housing as part of the requirement
for market -rate housing. Council has adopted many policies and plans to support a
diverse local community, ranging from the Housing, Land Use, and Circulation Elements
of the General Plan to the Affordable Housing Production Program Ordinance. At the
regional level, Santa Monica is an important job center and visitor destination. The
provision of housing for families with a range of incomes helps address the needs of
low- income families in the region and supports regional jobs and housing goals, thereby
reducing commuting pressures throughout the region. As a regional leader in
combatting homelessness, Santa Monica's housing programs and "housing first"
approach is critical to reducing homelessness.
Discussion
Given the local and regional importance of continuing affordable housing production and
preservation programs, as well as housing assistance programs in Santa Monica, staff
recommends that the City and Housing Authority enter into an agreement assigning
proceeds from the Housing Obligation Funds to the Housing Authority so that it can
ensure that these critical programs continue to support low- income families. Staff
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recommends that the agreement address three critical elements of Santa Monica's
efforts.
Housing Loan Monitoring and Custodial Services
Santa Monica has loaned over $303 million for the production and preservation of over
2,900 affordable apartments. Ongoing custodial responsibilities provided by staff
include: monitoring affordability covenants, reviewing affordable housing operations for
compliance with loan agreements, determining eligibility, maintaining a waiting list, and
providing technical assistance. Pursuant to the funding committed to the City under the
terms of Cooperation Agreements with the Agency, staff recommends that these
responsibilities and associated funding be transferred and committed to the Housing
Authority.
Housing Production and Preservation
The Cooperation Agreements between the Agency and City provide funding for the City
to implement affordable housing production and preservation activities, including new
housing for seniors, families, and people with special needs, as well as the acquisition,
rehabilitation, and deed restriction of 1,219 existing apartments for low and moderate -
income households. To help ensure that these activities can continue pursuant to the
Cooperation Agreements, staff recommends that these responsibilities and associated
funding be transferred and committed to the Housing Authority.
Senior Homelessness Prevention and Rental Assistance Program
Currently, 82 very low- income, formerly homeless seniors receive monthly rental
assistance pursuant to this program. In order to ensure that this extremely vulnerable
population does not lose its housing, staff recommends that the these responsibilities
and associated funding be transferred and committed to the Housing Authority.
Under the recommended terms of the proposed agreement with the Housing Authority,
the City agrees to provide the Housing Authority with proceeds from the Housing
Obligation Funds for administration and implementation of these three affordable
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housing efforts. The Housing Obligation Funds would come from housing set - aside,
existing bond and loan proceeds, as well as fund balances, available to the City as a
result of the Agency's payment of funds pursuant to the Cooperation Agreements.
Financial Impacts & Budget Actions
Assigning the affordable housing responsibilities and funding functions to the Housing
Authority helps ensure that the critical programs to support low and moderate - income
families will continue. To implement the transfer, staff is requesting the following budget
appropriations and changes:
Account Name
Transfer from RDA
Transfer to Housing Fund
Decrease Low /Mod Housing Fund accounts
Affordable Housing Operations
Account Amount
12695.570290 - $20,282,711
01695.570290 $20,282,711
Various - $20,282,711
R125005.589000 ' $20,282,711
Prepared by: Barbara Collins, Housing Manager
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Forwarded to Council:
Rod Gould
City Manager
Reference Contract No.
9542 (CCS /HAS).