SR 07-27-2021 3I
City Council Report
City Council Meeting: July 27, 2021
Agenda Item: 3.I
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To: Mayor and City Council
From: Andy Agle, Director, Community Services Department, Housing and Human
Services
Subject: Adoption of Resolution for Matching Grant Funding for Federal and State
Affordable Housing Opportunities
Recommended Action
Staff recommends that the City Council:
1. Authorize the City Manager to negotiate and execute a Memorandum of
Understanding with the Los Angeles Homeless Services Authority to
coordinate referrals and local prioritization for Emergency Housing Vouchers;
2. Approve proposed revisions to the Housing Trust Fund Guidelines regarding
loan underwriting criteria for California’s Local Housing Trust Fund program,
to satisfy conditions of the 2020 funding award of $5 million for affordable
housing development (Attachment A); and
3. Adopt the attached resolution authorizing the submission of an application for
the 2021 round of Local Housing Trust Fund Program Matching Grant
Funding (Attachment B).
Summary
To advance the City’s strategies to address and prevent homelessness in Santa
Monica, staff seek authorization to enter into a Memorandum of Understanding with the
Los Angeles Homeless Services Authority (LAHSA) to allow the 104 Emergency
Housing Vouchers (EHV) for people experiencing homelessness received by Santa
Monica under the American Rescue Plan to be prioritized to meet local needs.
By creating more opportunities for affordable, permanent housing, people can quickly
exit local shelters, freeing up existing bed capacity that can then be offered to
unsheltered individuals currently experiencing homelessness in Santa Monica. In
addition, staff seeks authorization to take steps necessary to apply for a $5 million grant
from the Local Housing Trust Fund (LHTF). The California Department of Housing and
Community Development offers an annual opportunity for local public agencies to apply
for matching grant funding to finance affordable housing development. The Local
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Housing Trust Fund (LHTF) program offers awards not to exceed $5 million through a
competitive application process. Santa Monica was awarded $5 million from the LHTF
program’s 2020 application round, pending proposed revisions to the City’s Housing
Trust Fund (HTF) Guidelines. The City is also eligible to apply for a 2021 LHTF award
for another $5 million, which would be used to produce affordable housing, in
accordance with the City’s Housing Trust Fund Guidelines and Plan, as well as the
LHTF program’s guidelines.
Discussion
EHV Program MOU
On June 10th, 2021, the Santa Monica Housing Authority was awarded 104 rental
housing vouchers under the new, federally funded Emergency Housing Voucher (EHV)
program. The emergency vouchers are narrowly targeted to persons experiencing
homelessness or at-risk of homelessness; persons fleeing domestic violence, dating
violence, sexual assault, stalking or human trafficking; and recently homeless persons
for whom providing rental assistance will prevent further homelessness and decrease
housing instability.
The EHV program requires that the local entity awarded the emergency vouchers draw
from the Coordinated Entry System waitlist administered by the county-wide Continuum
of Care agency, LAHSA. In conjunction with this requirement and an associated
July 31, 2021 EHV program implementation deadline, the City would enter into a MOU
with LAHSA to establish expectations regarding respective responsibilities, such as
coordinating applicant referrals, voucher application processing, and housing location
services, as well as target population. The MOU would ensure that Santa Monica’s
emergency vouchers are prioritized for people experiencing homelessness in
Santa Monica. Staff recommends that the Interim City Manager be authorized to
execute the MOU. In order to meet imminent federal deadlines, existing staff would
implement the program’s initial phase. Staff would return to Council at a later meeting
with a staffing recommendation and the associated budget actions to support full
implementation.
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LHTF Funding Conditions for 2020 Award
At its May 26, 2020 meeting, Council authorized staff to apply for funding from the
State’s LHTF program for the development of affordable housing. In 2021, the State
notified the City that its application for $5 million in affordable housing development
funding was successful, subject to minor modifications to the HTF Guidelines to satisfy
LHTF program underwriting requirements. The required modifications involve the loan
interest rate, debt coverage ratio, and reserves requirements for affordable housing
developments funded with the LHTF, as follows:
1. Loan Interest rate should not exceed 3 percent
• Interest rate is the amount charged on the loan balance, expressed as an
annual percentage
2. Debt coverage ratio (DCR) should range from 1.1 to 1.2
• DCR is a ratio of a property’s estimated net cash flow to loan payment
3. Replacement reserves should be $300 per apartment per year ($250 for senior
apartments) and operating reserves should equal three months of estimated
operating expenses, debt service, and reserve deposits
• Replacement reserves – an account to fund new building materials and
systems as older materials and systems wear out
• Operating reserves - an account to cover any potential deficit in the
property’s operation
Staff recommends revising the HTF Guidelines by including a new LHTF Funding
Source reference page (see Attachment A) to address the three LHTF loan underwriting
requirements. Doing so would secure the 2020 award of $5 million. The State LHTF
award would supplement existing Housing Trust Funds to finance affordable housing
developments. The proposed modifications are generally consistent with existing
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underwriting standards used in City Housing Trust Fund loans and are not expected to
have a material impact on providing future loans.
2021 LHTF Application
On May 3, 2021, the California State Department of Housing and Community
Development (HCD) again issued a Notice of Funding Availability (NOFA) for the LHTF
program. The LHTF NOFA makes available approximately $57 million in matching
grants to local housing trust funds, such as Santa Monica’s. The City is eligible to apply
for up to $5 million in matching grant funds in the 2021 application round.
The timeframe for submitting 2021 applications is between July 19th and August 3rd.
With Council authorization (Attachment B), staff would apply for $5 million in LHTF
program funding. If the City is successful, funds would be used to supplement existing
amounts in the City’s Housing Trust Fund to finance future affordable housing
developments. All funds would be used in accordance with the City’s Housing Trust
Fund Plan and Housing Trust Fund Guidelines, as well as in accordance with the LHTF
program guidelines.
Past Council Actions
Meeting Date Description
07/24/2018 (Attachment C) Housing Trust Fund Plan
07/25/2017 (Attachment D) Housing Trust Fund Guidelines
05/26/2020 (Attachment E) Authorization to Apply for LHTF 2020 Round
Financial Impacts and Budget Actions
There are no immediate financial impacts associated with the execution of a
Memorandum of Understanding with the Los Angeles Homeless Services Authority for
the implementation of the EHV program. Staff will return to Council with a staffing
recommendation and the financial and budget impacts associated with the EHV
program, which includes funds for administrative costs such as staff. There are no
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financial impacts associated with the proposed minor modifications to the Housing Trust
Fund Guidelines. The 2021 application for LHTF funding would allow the City to apply
for, and if successful, to receive up to $5 million in State funding that would be used to
supplement existing funding in the Housing Trust Fund to increase the supply of
affordable housing in Santa Monica. If awarded, staff would return to Council for specific
budget actions.
Prepared By: Jim Kemper, Housing Program Manager
Approved
Forwarded to Council
Attachments:
A. Proposed Modifications to HTF Guidelines
B. Housing Trust Fund Plan
C. Resolution Authorizing LHTF Grant Application
D. Housing Trust Fund Guidelines
E. May 26, 2020 Council Staff Report
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Proposed Addition to the Housing Trust Fund Guidelines July 27, 2021
ATTACHMENT A
This page is proposed to be added to the Housing Trust Fund Guidelines to comply with
loan underwriting standards, required by the State of California Local Housing Trust
Fund program, as a condition for receiving the $5 million grant.
Local Housing Trust Fund
Source of Funds
Funding for this program is provided through the California Department of Housing and
Community Development (HCD). Approximately $57 million in funding for the Local
Housing Trust Fund (LHTF) Program is provided by the Veterans and Affordable Housing
Bond Act of 2018 (Proposition 1), adopted by voters on November 6, 2018.
Matching Funds
All program funds provided pursuant to this section shall be matched on a dollar for dollar
basis with dedicated sources of funding.
Underwriting Requirements
1.Loan Interest Rate - Interest rate is the amount charged on the loan balance,
expressed as an annual percentage.
•Not to exceed three percent (3%)
2.Debt coverage ratio (DCR) - The ratio of a property’s estimated net cash flow to
loan payment.
•DCR ranges from 1.1 to 1.2
3. Reserves – California Code of Regulations Title 4, Division 17, Chapter 1, Section10327(c)(7)(A) and (B) - commonly referenced as TCAC
•Replacement reserves – An account to fund new building materials andsystems as older materials and systems wear out.
•The minimum replacement reserve deposit for projects shall be three
hundred dollars ($300) per unit per year, or for new construction or
senior projects, two hundred fifty dollars ($250) per unit per year.
•Operating reserves - An account to cover a deficit in the property’soperation.
•An operating reserve shall be funded in an amount equal to threemonths of estimated operating expenses, debt service, and reservedeposits under stabilized occupancy.
3.I.a
Packet Pg. 177 Attachment: Proposed Modifications to HTF Guidelines (4648 : Affordable Housing Funding Opportunities)
City of Santa Monica Housing Division
Housing Trust Fund Plan
(effective through 2021)
1
On July 24, 2018, the Santa Monica City Council approved the following initial Housing
Trust Fund Plan (Plan) effective concurrently with the 2013-2021 Housing Element
cycle:
1. The City should endeavor to enter into Housing Trust Fund (HTF) spending
commitments for affordable housing production and preservation totaling at least $15
million to $18 million during each fiscal year. The City should endeavor to further
increase HTF spending commitments when there are opportunities to maximize the use
of HTF resources by leveraging non-City funding (such as tax credits), implementing
construction technologies to achieve significant cost savings, or developing affordable
housing on City-owned land. In evaluating the cost efficiency of prospective HTF
investments, the City should consider the number of bedrooms produced (i.e., number
of people served) in addition to the number of residences produced.
2. A priority goal of the Plan is to ramp up the Preserving Our Diversity (“POD”)
local rent subsidy program to a range that requires a commitment of no more than $2
million per fiscal year in HTF funds. No actual expansion of the POD program will occur
unless and until a detailed plan for doing so is proposed by City staff, vetted by the
Housing Commission, and approved by the City Council. Any portion of the potential $2
million in annual HTF funding that is not actually used for the POD program in any
particular fiscal year shall remain available for commitment in future fiscal years to other
Plan priorities.
3. A priority goal of the Plan is to provide permanent housing in Santa Monica for
those among the population of homeless persons that the City Council determines the
City should take responsibility to permanently house in the City. This should include
“Santa Monicans” who are homeless. Subject to further refinement, this group is
deemed to include those persons on the Santa Monica Homeless Registry as of the
3.I.b
Packet Pg. 178 Attachment: Housing Trust Fund Plan (4648 : Affordable Housing Funding Opportunities)
City of Santa Monica Housing Division
Housing Trust Fund Plan
(effective through 2021)
2
date the Plan is adopted who are not already in permanent housing. The City should
look to leverage as much as possible federal funds, State funds, County funds, other
City funds, or private funds, to accomplish this goal.
4. The remainder of the HTF funds spent each fiscal year should be used to create
new affordable housing units for seniors, for physically and mentally challenged
persons, for large families, and for small families (including individuals). Unless one or
more unusually advantageous opportunities dictate a different result, a goal of the Plan
is to provide roughly equal HTF funding support for affordable housing targeted to each
of these four populations over the life of the Plan. The equal funding support
determination shall take into account HTF funding committed during the entire lifetime of
the 2013-2021 Housing Element, even if it occurred prior to the adoption of the Plan.
The equal funding support determination also shall take into account HTF funding
committed to the POD program (which is for senior housing) and to permanently
housing Santa Monicans who are homeless (who may be members of any of the four
populations).
5. The City’s existing affordable housing programs generally provide the highest
preference to persons displaced without fault from their existing homes in Santa
Monica, and provide the next highest preference to persons who either already live in
Santa Monica or who work full-time in Santa Monica. The two goals of the Plan
identified in paragraphs #2 and #3 above, however, only serve persons who already live
in Santa Monica. The City recognizes that the daily efforts of low income workers are
particularly critical to the businesses (including hotels, restaurants, and retail stores)
that generate the sales and use taxes supporting the HTF through Measures GS and
GSH, as well as the sales and use taxes and transit occupancy taxes that fund a
substantial portion of the City’s budget. City staff therefore is directed to develop, in
3.I.b
Packet Pg. 179 Attachment: Housing Trust Fund Plan (4648 : Affordable Housing Funding Opportunities)
City of Santa Monica Housing Division
Housing Trust Fund Plan
(effective through 2021)
3
consultation with the Housing Commission, a proposal to increase—to the extent it is
necessary and feasible to do so in order to maintain an overall equal preference for
affordable housing opportunities in the City—the preference in other HTF funded
projects for low-income Santa Monica workers.
6. City staff is directed to develop as soon as possible, in consultation with the
Planning and Housing Commissions, a proposal to adjust the AHPP program that
applies outside of the Downtown Community Plan. The proposal shall be based on a
feasibility study, and shall take into account past and projected future production of
housing through inclusionary zoning and HTF funded projects, as well as the quantified
objectives in the Housing Element and the requirements of Proposition R.
3.I.b
Packet Pg. 180 Attachment: Housing Trust Fund Plan (4648 : Affordable Housing Funding Opportunities)
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City Council Meeting: July 27, 2021 Santa Monica, California
RESOLUTION NUMBER (CCS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL FOR THE CITY OF SANTA MONICA
AUTHORIZING THE SUBMISSION OF AN APPLICATION FOR LOCAL HOUSING TRUST
FUND PROGRAM MATCHING GRANT FUNDING
WHEREAS, the State of California (the “State”), Department of Housing and
Community Development (the “Department”) is authorized to provide up to $57 million
under the Local Housing Trust Fund (“LHTF”) Program from the Veterans and Affordable
Housing Bond Act of 2018 (Proposition 1) (as described in Health and Safety Code section
50842.2 et seq. (Chapter 365, Statutes of 2017 (SB 3)) (“Program”);
WHEREAS, the Department issued a Notice of Funding Availability (“NOFA”) dated
May 3, 2021, under the LHTF Program;
WHEREAS, the City is an eligible Local or Regional Housing Trust Fund applying to
the Program to administer one or more eligible activities using Program Funds;
WHEREAS, the Department may approve funding allocations for the LHTF Program,
subject to the terms and conditions of Health and Safety Code Section 50842.2, the LHTF
Program Guidelines, NOFA, Program requirements, the Standard Agreement and other
related contracts between the Department and LHTF award recipients;
NOW, THEREFORE, BE IT RESOLVED THAT:
SECTION 1. If the City of Santa Monica (“City”) receives an award of LHTF funds from
the Department pursuant to the above referenced LHTF NOFA, it represents and certifies
that it will use all such funds on Eligible Projects in a manner consistent and in compliance
with all applicable state and federal statutes, rules, regulations, and laws, including, without
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Packet Pg. 181 Attachment: Resolution Authorizing LHTF Grant Application (4648 : Affordable Housing Funding Opportunities)
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limitation, all rules and laws regarding the LHTF Program, as well as any and all contracts
City may have with the Department.
SECTION 2. The City is hereby authorized to act as the manager in connection with the
Department’s funds to Eligible Projects pursuant to the above-described Notice of Funding
Availability in an amount not to exceed $5,000,000 (the “LHTF Award”).
SECTION 3. The City hereby agrees to match on a dollar-for-dollar basis the LHTF
Award pursuant to Guidelines Section 104, and the City hereby agrees to utilize matching
funds on a dollar-for-dollar basis for the same Eligible Project for which Program Funds are
used, as required by Health and Safety Code Section 50843.5(c).
SECTION 4. Pursuant to the City of Santa Monica Housing Division Local Housing
Trust Fund Expenditure Plan (Attachment 1) and the City’s certification in this resolution, the
LHTF funds will be expended only for Eligible Projects and consistent with all program
requirements.
SECTION 5. The City shall be subject to the terms and conditions as specified in the
Standard Agreement, Health and Safety Code Section 50842.2, and LHTF Program
Guidelines.
SECTION 6. The City Manager is authorized to execute the LHTF Program
Application, the LHTF Standard Agreement and any subsequent amendments or
modifications thereto, as well as any other documents which are related to the Program or
the LHTF Award to City, as the Department may deem appropriate.
///
///
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Packet Pg. 182 Attachment: Resolution Authorizing LHTF Grant Application (4648 : Affordable Housing Funding Opportunities)
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SECTION 7. The City Clerk shall certify to the adoption of this Resolution, and
thenceforth and thereafter the same shall be in full force and effect.
APPROVED AS TO FORM:
GEORGE S. CARDONA
Interim City Attorney
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Packet Pg. 183 Attachment: Resolution Authorizing LHTF Grant Application (4648 : Affordable Housing Funding Opportunities)
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City of Santa Monica
Housing Division Local
Housing Trust Fund
Expenditure Plan
(Attachment 1)
The City of Santa Monica (“City”) commits to use Local Housing Trust Fund (“LHTF”)
Program Funds and Matching Funds as follows:
• 100% of Program Funds and Matching Funds received will be spent to provide
construction/permanent financing loans at simple interest rates of no higher than
three percent per annum with deferred payments based on residual receipts, for
payment of predevelopment costs, acquisition, construction, or rehabilitation of
multifamily rental housing serving Lower-Income (80% of Area Median Income
(“AMI”)), Very Low-Income (50% of AMI), and Extremely Low-Income Households
(30% of AMI).
• At least 30% of Program Funds and Matching Funds received will be spent on
assistance to Extremely Low-Income Households.
• 100% of Program Funds and Matching Funds received will be spent on loans for
the new construction of multifamily rental housing developments with average
household income restrictions of no more than 60% of AMI.
• No more than 5% of Program Funds and Matching Funds received will be spent on
administrative expenses.
All activities and projects funded by Santa Monica’s LHTF Program Funds and Matching
Funds will be located within the City. Matching Funds will be taken from the
Redevelopment Replacement Housing Trust Fund, for which the funding sources are:
a) transaction and use taxes approved by Measure GSH and
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Packet Pg. 184 Attachment: Resolution Authorizing LHTF Grant Application (4648 : Affordable Housing Funding Opportunities)
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b) 80% of the loan repayments owed by the former Santa Monica Redevelopment Agency
to the City, which are dedicated and restricted for housing use solely by City action and
not by state or federal law.
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Packet Pg. 185 Attachment: Resolution Authorizing LHTF Grant Application (4648 : Affordable Housing Funding Opportunities)
Adopted 11-24-1998 Amended 5-2-2000 Amended 4-24-2001 Amended 1-11-2005 Amended 6-19-2007 Amended 2-25-2014 Amended 7-25-2017 (* Loan/Grant Limits and Developer Fee Limits have been updated for the FY2017-2018 period)
Housing Trust Fund Guidelines
City of Santa Monica
Housing Division
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Packet Pg. 186 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
SUMMARY OF HOUSING TRUST FUND GUIDELINES
Citywide Housing Trust Fund
Low-Moderate Income Housing Asset Trust Fund HOME Housing Trust Fund
CDBG Housing Trust Fund
TORCA Housing Trust Fund
Redevelopment Replacement Housing Trust Fund
Taxable Proceeds (Loans)
Tax Exempt Proceeds (Grants)
Funding source In-lieu fees, development agreements, commercial linkage fees, proceeds from sale of City-owned property
Proceeds from the sale of former RDA housing assets and 20% of the loan repayments owed by the former RDA to the City
Redevelop- ment tax exempt bond proceeds
Federally-funded HOME Program Federally-funded CDBG Program TORCA conversion tax, proceeds from repayment of TORCA shared-appreciation loans
Voter Approved Measure GSH and City Council matching funds including 80% of the loan repayments owed by the former RDA to the City
Residual receipts loan payments
Eligible Borrowers Nonprofits, limited partner-ship w/nonprofit general partner
Nonprofits, for profits, and limited partnerships with nonprofit general partner
Nonprofits, for profits & limited partnerships; may not be provided to primarily religious organizations
Nonprofits and limited partnerships with nonprofit general partner
Eligible Projects Rental housing, 4 or more units, SRO housing, congregate housing. Acquisition and rehabilitation projects with at least 51% of the units occupied by tenants whose incomes do not exceed 80% of median income, except when waived by the City Manager unless otherwise prohibited by state or federal law. New construction with exceptions.
If in-lieu fees, only new construction and average 2 bedrooms
Mixed use if residential area equals 51% or more of space New Construction allowed only if with CHDO. Rental subsidy programs with City Council approval
Eligible Uses Rental housing development: land lease/purchase, acquisition rehabilitation, new construction. Site acquisition & preparation, new construction & rehabilitation, carrying fees & charges, architecture, legal, organizational; relocation. Predevelopment loans, bridge loans. Working Capital for Citywide, CDBG, TORCA, Low-Moderate Income Housing Asset and Redevelopment Replacement. If using in-lieu fees, new construction only (average 2 bedrooms).
Ineligible Uses Preliminary feasibility studies, organizational operating expenses. Housing acquisition and rehabilitation if using in-lieu fees. Reserves, impact fees, operating subsidies; land banking, temporary shelters, project-based rental assist-ance, commercial properties
New construction unless by CHDO; rental assistance payments
Loan Term Development loans and grants: 55 years, with automatic 25-year extension upon determination by City of full compliance with loan terms.
Interest Rate Freddie Mac Rate for 30-year loans; may be lower for tax credit projects, HUD 202/811, or when required to meet other lender/ subsidy layering guidelines
Payments Loans may be deferred for up to 2 yrs.; 3 yrs. with City Manager waiver. Thereafter, payments to be made from residual receipts. Grant balance reduced by 1/80th each year.
Maximum Loans New construction*: 0 & 1 bedroom: $469,379; 2 or more bedroom: $493,679; Acquisition and Rehabilitation*: 0 & 1 bedroom: $584,486; 2 or more bedroom: $615,181;
* figures updated for the FY2016-2017 period. **HOME subsidy shall not exceed the maximum allowed by HUD under the HOME program (24 CFR 92.250), or that provided for under Section IV, Loan Terms, of these Guidelines, whichever is less. ***Individual Loans which exceed $25 million shall be presented as an Information Item to City Council before issuance of a commitment letter.
Affordability Requirements All assisted units must be affordable to households whose incomes do not exceed 60% of median income.
All assisted units shall be affordable to households whose incomes do not exceed 80% of median income. New construction units shall be affordable to households whose incomes do not exceed 80% of median income.
For 4 or fewer HOME-assisted units, household income cannot exceed 60% of median income (use High HOME rents); for 5 or more HOME-assisted units, 20% of the HOME units, household must be at/below 50% of median income (use Low HOME rents). (Refer to HOME Final Rule, 24 CFR 92.252.)
For new construction, at least 20% of the units in the project must be affordable to households whose incomes do not exceed 80% of median income. Rents for all assisted units should be affordable to households whose incomes do not exceed 80% of median income.
All assisted units shall be affordable to households whose incomes do not exceed 80% of median income.
Rent restrictions Based on 30% of applicable income category, adjusted for unit size (i.e., # of bedrooms) Maximum rents are determined by HUD Based on 30% of applicable income category, adjusted for unit size (i.e., # of bedrooms)
Prevailing wage and Labor requirements
City code provides that State prevailing wage requirements are applicable to rehabilitation projects over $15,000 and new construction projects over $25,000.
Davis-Bacon does not apply to these funds. Davis-Bacon is applicable for projects where 12 units or more are assisted with HOME funds.
Davis-Bacon is applicable for projects of 8 units or more.
Davis-Bacon does not apply to these funds.
Local Preference Yes Yes, with 1st preference to persons displaced by redevelopment projects
Only if permitted by HUD Only if permitted by HUD Yes Yes
Note: For complete details about the information contained on this summary sheet, please refer to the appropriate section of these Guidelines.
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Packet Pg. 187 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
TABLE OF CONTENTS
I. INTRODUCTION 1
II. TYPES OF LOANS AND GRANTS 2
III. LOAN TERMS 4
IV. APPLICATION SUBMITTAL AND REVIEW PROCEDURES 7
Application Submittal 7
Application Review 8
Competitive Selection Criteria 15
V. LOAN COMMITMENT AND CLOSING PROCEDURES 15
Loan Commitment 15
Loan Closing 16
VI. PROJECT MONITORING AND REPORTING 17
VII. FUNDING SOURCES 20
HOME Trust Fund 20
CDBG Housing Trust Fund 24
Citywide Housing Trust Fund 27
Low-Moderate Income Housing Asset Trust Fund 29
TORCA Housing Trust Fund 32
Redevelopment Replacement Housing Trust Fund 34
VIII. EXHIBITS 36
Exhibit A Definitions
Exhibit B HOME Program Subsidy Limits
Exhibit C Rental Housing Loan Application (with checklist)
Exhibit D Green Affordable Housing Checklist
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Packet Pg. 188 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
Housing Trust Fund Guidelines (July 2017) Page 1
I. INTRODUCTION
The City of Santa Monica provide financial assistance to support the acquisition, rehabilitation,
and new construction of properties to preserve and increase affordable rental housing opportunities
for lower income households through the following Programs:
• HOME Housing Trust Fund (HHTF)
• CDBG Housing Trust Fund (CDBGHTF)
• Citywide Housing Trust Fund (CHTF)
• Low-Moderate Income Housing Asset Trust Fund (LMIHATF)
• TORCA Housing Trust Fund (THTF)
• Redevelopment Replacement Housing Trust Fund (RRHTF). Under these Programs, the City provides deferred payment loans and/or grants to bridge the financial gap between available resources - including the borrower's/grantee’s equity and private
financing - and the costs of developing affordable multi-family housing. The purpose of the Housing Trust Fund Guidelines (“Guidelines”) is to provide an overview of the types and terms of loans which are available, application requirements, review procedures, selection criteria, loan commitment and closing procedures, and project monitoring and reporting requirements of these varied Programs within one comprehensive source of reference. Throughout this document, loans and grants may be referred to collectively as “loans” except when the terms are unique to a loan or to a grant. These requirements are minimum requirements for participation in City Programs and are subject to change at any time. Meeting these requirements is not a guarantee of participation in any Program. The City reserves the right to require additional qualifications for individual projects. The City reserves the right to reject any and all applications and to accept applications which in its judgment best serve the interests of the City. On a case by case basis, City Council may also modify or waive provisions of these Guidelines.
These Programs are administered by the Housing Division of the City of Santa Monica (under the direct supervision of the Housing Manager, the direction of the Director of Housing and Economic Development, and the general supervision of the City Manager) on behalf of the City of Santa Monica.
These Guidelines should be interpreted in conjunction with Federal, State, and City statutes and regulations governing use of these funds; in the event of a conflict between these Guidelines and such statutes and regulations, the requirements of those statutes and regulations shall prevail. Leveraging of City dollars (to the extent possible) with outside funding sources will continue to
be a priority.
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Packet Pg. 189 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
Housing Trust Fund Guidelines (July 2017) Page 2
II. TYPES OF LOANS AND GRANTS
Acquisition & Predevelopment Loans and Grants
Acquisition & Predevelopment loans may be made to private, nonprofit corporations with a proven
capacity to develop, own, and operate housing, and that have a valid 501(c)(3) or (4) designation from the IRS, and in limited circumstances described in the foregoing individual trust fund sections, to for-profit entities. Funds may be used for acquisition and pre-development expenses for projects for which there is site control and which have received a preliminary funding
commitment from the City. Expenses shall be limited to services that cannot be obtained on a
contingency basis and may include (but are not limited to) architectural and engineering fees, title reports, legal and organizational fees, mortgage application fees, environmental analysis, and permits and fees for public agencies. Predevelopment funds may also be used for purchase options or deposits for the purchase of buildings or land to be rehabilitated or developed with assistance
from one or more of the Programs, or purchase options or deposits on properties that will not
receive further subsidies under the Program, but that will be used for housing developments that meet the same requirements. Such funds may be provided as part of a predevelopment loan or through a separate contract with a nonprofit corporation as discussed below. Predevelopment loans may also be made to a nonprofit corporation for the purpose of acquiring real property for future
affordable housing development, including but not limited to vacant property, and properties with
existing residential or commercial improvements. These predevelopment funds shall be disbursed to an eligible borrower at the time of the City's preliminary approval of a specific project. The amount of predevelopment funds disbursed to each
project shall be included in the calculation of the maximum loan from a Program and shall be
considered as part of the principal. Development Loans and Grants Program funds may be used for development loans for the following eligible purposes:
(1) The purchase of existing multifamily or other buildings for rent to low- and moderate-income households and for the development of congregate housing for rent to low- and moderate-income persons with special needs. Except for congregate housing, existing buildings shall consist of four or more units, unless the City Manager finds that a substantial public benefit will be provided by a project consisting of less than 4
units. (2) The purchase or lease of land, buildings; or air rights for new construction or rehabilitation of housing that may utilize available State and Federal housing assistance programs such as the Section 202 Supportive Housing for the Elderly Program, tax-exempt bond financing, Section 811 Supportive Housing Program, and
low-income housing tax credits.
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Packet Pg. 190 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
Housing Trust Fund Guidelines (July 2017) Page 3
(3) The development of limited-equity housing cooperatives through either conversion or new construction.
(4) The provision of interim loan funds for any of the above purposes prior to the funding of a public or private loan. Eligible development costs for the above uses include but are not necessarily limited to: (A) site acquisition and preparation; (B) rehabilitation of dwelling units, common areas and related structures;
(C) new construction; (D) carrying charges and financing fees; (E) architectural, legal, and organizational fees; (F) temporary or permanent tenant relocation costs; and (G) a developer fee consistent with guidelines described in Section IV below.
(5) Prepayment of certain financing fees, such as bond issuance fees as necessary to make favorable financing available. Working Capital Loans and Grants
Up to five percent (5%) of the total funds available to Housing Development Corporations (HDCs)
under the CDBG Housing Trust Fund, the TORCA Housing Trust Fund and the Low-Moderate Income Housing Asset Trust Fund may be available for Working Capital Loans. A Working Capital Loan may be made to an HDC under contract with the City of Santa Monica for the development and management of affordable housing. Loan funds shall be held in a separate, interest-bearing account by the HDC for use as “working capital” to fund early costs for securing
site control and expenses related to feasibility studies prior to approval of a site-specific predevelopment loan or other loan from the City. Loan funds may be used for reimbursable development expenses that have received prior written approval from the Housing Manager in connection with the acquisition, rehabilitation or
construction of housing units that will meet the criteria of low- or moderate-income household benefit as established by the Guidelines. Eligible uses include but are not necessarily limited to: (1) Site control costs through deposits to escrow for purchase of buildings or sites within the City of Santa Monica, or options to purchase property;
(2) Non-refundable option payments, in order to assist the HDC to secure property in a competitive real estate market. (3) Development expenses that cannot be funded on a contingency basis, including architectural and engineering fees, environmental studies, appraisals and inspection fees.
The total of such expenses shall not exceed $25,000 per project.
Upon receipt of an acquisition & predevelopment loan, or development loan for the project, the HDC shall promptly reimburse the Working Capital account for the amount advanced from the fund for such purpose. In the event that the HDC does not receive an acquisition &
predevelopment loan or development loan for the project or is unable to complete the project, the
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City may forgive 90% of the total funds expended by the HDC upon repayment by the HDC of 10% of the amount of the expenditure.
No later than thirty calendar days after the termination date of the Working Capital Loan Agreement, the HDC shall provide a full accounting of the amount of funds available in the account, including all accrued interest, and a list of projects, if any, for which funds have been used and have not been repaid, along with a schedule of projected repayment dates. In the event
the Working Capital Loan Agreement is not renewed, these funds shall be returned to the City. III. LOAN TERMS
Term
Permanent loans that are not grants shall be due and payable in fifty-five (55) years subject to the terms of the applicable Regulatory Agreement or recorded Covenants. Such loans may be extended for up to twenty-five (25) additional years, provided that the Borrower is in compliance
with the loan documents. Where necessary in order to meet the requirements for other project
funding or enhance project feasibility, the Housing Manager may approve a shorter loan term. However, in no case shall a Regulatory Agreement or recorded Covenant remain in effect for fewer than 55 years.
Acquisition & Predevelopment Loans that are not grants shall be due and payable in twenty-four
(24) months subject to the terms of the applicable Memorandum of Agreement or recorded Covenants. Such loans may be extended for up to eighteen (18) months with an additional twelve (12) month extension option. Where necessary in order to meet the requirements for other project funding or enhance project feasibility, the Director of Housing and Economic Development
Department may approve a shorter loan term.
Purchase Option At the end of the permanent loan term, the City will have the option to take title to the property in accordance with the terms of an option agreement.
Interest Rates for Loans
The interest rate shall be set at either: (1) the rate established by the Federal Home Loan Mortgage Corporation for the average conventional commitment of a fixed rate, thirty-year (30) mortgage, and shall be
compounded annually; or
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(2) when necessary to secure investor equity, interest rates of affordable housing projects that include tax credits or conventional lenders, at 3% simple interest; or
(3) when the City loan is in a second position to a first trust deed capital advance/loan made under the U.S. Department of Housing and Urban Development (HUD) Section 202 or Section 811 Programs, the interest rate shall not exceed the highest permissible rate on the applicable HUD Section 202 or Section 811 Program mortgages, under authority of Chapter 24 of the Code of Federal Regulations (CFR), Subpart 885.410(g); or
(4) when required in order to meet federal subsidy layering guidelines, at the Applicable Federal Rate (that rate established by the Internal Revenue Service pursuant to Section 1274(d)(1) of the Internal Revenue Code). The City Manager may waive or reduce the interest rate as needed to ensure the feasibility of
projects. Loan Payments Payments on permanent loans shall be made as follows:
(1) Payments of principal and interest may be deferred for up to two (2) years from the date of execution of the loan, and up to three (3) years from the date of execution of the loan with approval of the City Manager. After the expiration of the deferral period, payments of principal and interest shall be made annually to the City in an amount equal to 50% of project Residual Receipts, if any. However, this 50% of Residual Receipts may be split
among all the public lenders (including the City) on a pro rata (of funding) basis. Payments shall be applied first to accrued interest, and then to principal. (2) The Borrower may elect to prepay the loan prior to the end of the term. However, the Regulatory Agreement or recorded Covenants shall remain in full force and effect for its term regardless of any prepayment.
(3) If the Borrower violates the terms of the Regulatory Agreement or recorded Covenants such that the City declares the loan in default, the entire amount of unpaid principal plus accrued interest at the rate established at the time of closing shall be due. (4) Unless paid in full earlier, the remaining principal balance of the loan and accrued interest shall be due and payable at the end of the term of the Promissory Note. Where necessary
to meet requirements of third party investors and with approval of the City Manager, the City may allow the remaining principal and accrued but unpaid interest to be payable only to the extent that the fair market value of the Project exceeds the principal balance of the existing indebtedness secured by the property.
(5) For loans for projects not financed by federal Low Income Housing Tax Credits, upon
determination by the City that the borrower is in full compliance with the terms and conditions of the Regulatory Agreement, Deed of Trust, and Program Loan Agreement (collectively referred to as “Loan Documents”), the City shall extend the terms of the existing Regulatory Agreement, Deed of Trust, and Program Loan Agreement for a
minimum period of twenty-five (25) years ("Extension Period"). If borrower fully
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complies with all terms and conditions of the Loan Documents during the Extension Period, then any remaining principal and accrued but unpaid interest shall be forgiven at
the end of the Extension Period. Payments on acquisition & predevelopment loans shall be made as follows: (1) Payments of principal and interest are deferred until maturity. Upon maturity, the
City/Agency may extend the term for up to eighteen (18) months with an additional twelve (12) month extension option. (2) The Borrower may elect to prepay the loan prior to the end of the term. However, the Memorandum of Agreement or recorded Covenants shall remain in full force and effect for its term regardless of any prepayment.
(3) If the Borrower violates the terms of the Memorandum of Agreement or recorded Covenants such that the City declares the loan in default, the entire amount of unpaid principal plus accrued interest at the rate established at the time of closing shall be due. Grant Balance Reduction
(1) For grants for projects not financed by Low Income Housing Tax Credits, as long as
Grantee is in full compliance with the Regulatory Agreement, the City shall reduce the amount of the balance of the grant by 1/80th of the total grant amount each year. If the Grantee is in full compliance with the Regulatory Agreement, the Conditional Grant Note, or the Conditional Grant Deed of Trust, at the end of the initial 55-year term, the Grantor
shall accept a twenty-five (25) year extension of the term of the Regulatory Agreement, the Conditional Grant Note, and the Conditional Grant Deed of Trust. Thereafter, as long as the Grantee is in full compliance with the Regulatory Agreement, the Conditional Grant Note, and the Conditional Grant Deed of Trust, Grantor shall continue to reduce the remaining balance of the Grant by 1/80th of the Grant amount each year for an additional
25 years or until the balance of the Grant reaches zero. Security The loan shall be secured as follows:
(1) The loan shall be secured by a Deed of Trust and Promissory Note which may be
subordinated to Deeds of Trust securing other Federal, State, City loans, or loans from conventional financing institutions used in conjunction with the Trust Fund loan on the same property. The City must approve all requests for subordination. (2) The loan shall be further secured by a Regulatory Agreement, Memorandum of Agreement,
or recorded Covenants to assure that Program funds are used to provide long-term
affordable rental housing opportunities for low- and moderate-income households. The Borrower and the City shall execute the Regulatory Agreement, Memorandum of Agreement, or recorded Covenants regulating project rents, tenant selection procedures,
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use of project income, management and maintenance, transfer of property, and permitted forms of ownership and use. The Regulatory Agreement, Memorandum of Agreement, or
recorded Covenants shall be recorded with the Deed of Trust. Maximum loan and grant amounts Except as restricted by State or Federal law, the maximum Trust Fund Loan/Grant per-unit shall not exceed the following:
Original Base Amount Fiscal Year 2007-08* Updated Amount Fiscal Year 2017-18*
New Construction
Acquisition & Rehabilitation
New Construction
Acquisition & Rehabilitation Zero and 1-Bedroom Units
$367, 000 $457,000 $492,848 $613,710
2 or more Bedroom Units
$386,000 $481,000 $518,363 $645,940
* Maximum loan/grant to be adjusted in July of each year utilizing the annual adjustment methodology for the City’s Affordable Housing Fee pursuant to Santa Monica Municipal Code Section 9.56.070(b) Actual loan/grant amounts will be based on the project’s need and the level of affordability that is
provided. Program loan/grants in excess of maximum amounts above must be approved by the City Council. Loans for projects in excess of fifty (50) units and any pending loan for a project in excess of $25 million must be presented to City Council as an Information Item.
IV. APPLICATION SUBMITTAL AND REVIEW PROCEDURES Application Submittal
All applications for Program funds shall be submitted to the Housing Division and shall be reviewed and approved through an administrative review process as established in these
Guidelines. The Applicant shall complete and submit to the Housing Division the Application for Program Funds (see Exhibit C) and prepare all required attachments, including the management plan, tenant
selection and marketing plan, relocation plan if necessary, signed purchase agreement and escrow
instructions, preliminary title report, and limited partnership documents, if necessary, at least sixty
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(60) days prior to the scheduled close of escrow. Applications may be submitted at any time during the program year and will be considered in the order submitted to the Housing Division.
Application Review
The Housing Division staff shall review the application to: (1) determine that the minimum Program requirements are met; (2) ensure that the estimated development costs are reasonable and in conformance with
the City’s underwriting guidelines and
(3) review the estimated mortgage amount and Borrower equity contribution in accordance with the City’s underwriting guidelines and the requirements of the proposed source of City funding.
Within seventy-five (75) days of the submission of the application, the Housing Division shall
determine whether the proposal is approvable for commitment, with or without conditions. If the City determines, in its discretion, that the application is complete and meets all of the Program criteria, the City may issue a commitment letter. If the application has deficiencies, the City staff will identify the problem areas and notify the Applicant.
Staff shall review the design of the proposed project for appropriateness for the proposed target
group, compatibility with surrounding uses, cost effectiveness of construction, and appropriateness of proposed materials for low maintenance and long term durability. Design Review
Applicants proposing new construction or change of use of projects, including the moving of
buildings onto vacant sites, will be responsible for notifying the neighbors of the proposed project
plans for the site at the time the project is submitted to the Architectural Review Board (ARB) for approval. Applicants will invite neighbors to review the project design and comment on the plans at the ARB meeting. The Applicant will notify the neighbors at least seven (7) days prior to the ARB meeting at which the project is scheduled to be reviewed.
Determination of Reasonable Costs and Financial Feasibility Housing Division staff shall review the Applicant's estimates and projections of rents, expenses, reserves and development costs in accordance with the City’s underwriting guidelines. The Applicant shall provide background documentation on all costs as requested by the City. The City
may adjust cost and expense amounts as appropriate to conform to current market and industry
standards. The total amount of the Program loan and all private loans shall not exceed the total development costs approved by the City.
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The maximum allowable purchase price shall not exceed the appraised value as evidenced by an appraisal prepared by a California State Certified General Appraiser and approved by the Housing
Division, which is dated not more than six (6) months prior to the date of the application. The appraisal may not determine property value based solely on sales of properties financed by public agencies. The maximum affordable mortgage amount shall be calculated using the rent schedule proposed
by the Applicant as approved by the City, the proposed interest rate and terms of the primary loan(s), and reasonable operating allowances and reserves including a reserve to amortize a mortgage as needed. The requested City loan for a project shall not exceed the total amount of the gap between the
maximum affordable mortgage amount available from non-City sources plus funds available from other sources of public subsidy, and the total development costs plus any on-going annuity necessary to maintain affordable rent levels as defined in the Program application. The maximum City loan shall not exceed the maximum per-unit limits described in these Guidelines.
All assisted units must maintain rents that do not exceed the Maximum Affordable Rent, as defined in these Guidelines, for the life of the loan in accordance with the terms of the loan or other recorded Covenants. Syndicated projects must be structured such that ownership can feasibly be acquired by the nonprofit General Partner at the end of the term of the limited partnership
agreement, when appropriate. When determining the maximum City loan, Housing Division staff
will scrutinize the rent schedule and annual cash flows in order to determine whether long-term affordability is maintained. In cases where a rent subsidy program is utilized and the mortgage is calculated on the basis of the subsidized rents, an "affordability reserve" may be required, where the amount of the reserve shall be sufficient to cover the difference between affordable rents and
the subsidized rents.
Developer Fee For new construction projects, the developer fee shall not exceed the following per unit amounts,
based on the size of the project:
Original Base Amount Fiscal Year 2007-08* Updated Amount Fiscal Year 2017-18*
For 1 – 20 units $16,240 $21,809 For 21 – 30 units $15,080 $19,042
For 31 – 50 units $13,920 $17,577 For 51 or more units Negotiated Negotiated
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For acquisition and rehabilitation projects of 7 units or less, the developer fee shall not exceed $12,868 (updated for FY 2017-2018; original base amount for FY2007-2008 was $10,900) per unit. For acquisition and rehabilitation projects of 8 or more units, the developer fee shall not exceed the greater of $55,000 per project or the sum of 5% of the depreciable acquisition basis and
15% of the rehabilitation basis. With the exception of those fees for acquisition and rehabilitation projects of 8 or more units, developer fees will be adjusted in July of each year utilizing the annual adjustment methodology for the City’s Affordable Housing Fee pursuant to Santa Monica Municipal Code Section 9.56.070(b). At the discretion of the City Manager a higher fee may be allowed.
The development fee for new construction projects will be released in three stages: (1) one-third upon receipt of the necessary building permits, (2) one-third upon issuance of the certificate of occupancy, and (3) one-third upon the later of permanent loan closing or full lease-up of the
project. For projects involving acquisition and rehabilitation, the development fee may be released in two stages: (1) twenty-five percent at the time of issuance of the building permit, and (2) 75% at the time of conversion of interim financing to permanent financing, or full lease-up of the project, whichever is later. Where the project does not utilize interim financing or involves acquisition only, the schedule for release of the developer fee will be reviewed on a case by case
basis. Changes to the above schedules for the release of fees may be approved by the Housing Manager. Developer Capacity Applicants must demonstrate the capacity to successfully develop the proposed project. The City
shall evaluate capacity on the basis of the Applicant’s track record in developing and managing affordable housing, or inclusion of development team members with a successful record in developing such housing. In addition, Applicants must demonstrate the financial and legal capacity to undertake the proposed project.
Clear Title The Applicant shall have the responsibility to obtain clear title to the property. As soon as feasible, the Applicant will submit a preliminary title report for City review and written approval. Staff shall review the state of title, including the conditions, covenants, restrictions and legal description of
the property and the rent control registration and removal permit issues. The Applicant shall correct
the state of title and remove all exceptions to the title not consented to by the City before the City closes the loan.
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Senior Financing
The Applicant shall secure other resources such as equity from syndication proceeds, tax exempt
financing, federal and state housing rental and development subsidies and available private financing to minimize the amount of the City loan. The Applicant will submit to the City for review the terms and conditions of all non-City financing as well as equity contributions. The Applicant must submit projected cash flows for the term of the loan, showing the maximum
possible increases (i.e., worst case scenario) in debt service per year, the projected rent and expense
increases, the means of making up any deficits, and projected payments of Residual Receipts. The City shall analyze the feasibility of the project to carry the loan, and if feasible will approve the terms of the non-City financing.
The City may, at its sole discretion, calculate the mortgage amount at the terms and rates of
available financing programs other than that proposed by the Borrower, if alternative terms and rates are available that would reduce the amount of City subsidy required, and would otherwise conform to the City/Agency requirements.
Management and Affirmative Marketing Plan
Except in the case of projects funded under the federal Section 202 Supportive Housing Program and Section 811 Supportive Housing Program, the Applicant shall prepare a Project Management Plan for City review and approval. The Plan shall describe the Applicant's policies and procedures concerning:
(1) Affirmative marketing and tenant selection procedures including application procedures, prioritization of Santa Monica residents and workers (see Local Preference section below) where possible; waiting lists, and lease agreements; and marketing efforts and tenant selection procedures that will be used to attract eligible
persons from all racial, ethnic and gender groups, as well as persons living with disabilities, in the housing market area to the available housing; the Plan should describe the protocols for keeping records of affirmative marketing activities and for keeping records of requests (from applicants and existing tenants) for accessible units;
(2) Procedures for determining tenant eligibility and certifying incomes; the Plan should demonstrate sufficient outreach to disability-related groups to ensure that accessible units are occupied to the extent possible by those households who need the accessibility features due to disability;
(3) Management/tenant relations and assistance to tenant organizations, including the
training and use of tenants to perform maintenance and management functions as appropriate; (4) Maintenance and repair services; (5) On-site management facilities;
(6) Rent collection;
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(7) Records and reporting requirements; (8) Personnel and staffing;
(9) Compliance with all tenant protection laws, including rent control law and Building and Health and Safety Codes; (10) Fee schedule. No person shall on the grounds of race, marital status, sex, color, age, religion, national origin,
ancestry, physical disability, AIDS, or sexual orientation be excluded from participating in, be denied the benefits of, or be subjected to discrimination under any program or activity funded in whole or in part with these funds. Local Preference
Local preference for Santa Monica residents and workers in tenant selection has been established by the City as policy. Local preference shall be a requirement of the Citywide Housing Trust Fund, Low-Moderate Income Housing Asset Trust Fund the TORCA Trust Fund, and the Redevelopment Replacement Housing Trust Fund. Local preference shall be a requirement of the HOME and CDBG Trust Funds only if permitted by the federal government.
In evaluating a loan request, staff shall evaluate a loan applicant’s effectiveness in achieving the City’s local preference goals and give priority to those loan applicants who administer their wait lists using sorting protocols which result in outcomes where households who live or work in Santa Monica are beneficiaries of City-funding affordable housing.
Subject to applicable tenant income limits and any preferences required by the laws of the United States or the State of California (including but not limited to laws and regulations governing nondiscrimination and preferences in housing occupancy), the Borrower shall give preference in leasing units in the following order of priority.
(1) First priority shall be given to persons who have been permanently displaced or face permanent displacement from housing in Santa Monica as a result of any of the following: (a) A redevelopment project undertaken pursuant to California’s Community
Redevelopment Law (Health & Safety Code Sections 33000, et seq.) -- applicable only to projects funded by the Low-Moderate Income Housing Asset Trust Fund. (b) Ellis Act, owner-occupancy, or removal permit eviction;
(c) Earthquake, fire, flood, or other natural disaster; (d) Cancellation of Section 8 contract by property owner; or (e) Governmental Action, such as Code enforcement.
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(2) Second priority shall be given to persons who are either:
(a) Residents of Santa Monica and/or (b) Working in Santa Monica at least 36 hours per week for at least 6 months. Regarding any “accessible units” that are required as part of a multifamily development, such
accessible units should be first offered to existing occupants of the building (if applicable) who are not occupying an accessible unit and who have indicated a need for the features of an accessible unit. If no existing occupants of the building have indicated the need for the features of an accessible unit, or if the building is being leased for the initial occupancy, then such accessible units should first be offered to applicants who have indicated the need for the features of an
accessible unit, inclusive of the preferences above. The application of preferences may not conflict with Section 504 of the Rehabilitation Act of 1973, 24 C.F.R. §100.202, and any other preemptive laws that may be enacted regarding fair housing for persons living with disabilities. “Accessible units” refers to those units which were originally approved by the City
specifically as accessible units and which provide specific features to address the needs of persons living with mobility impairments or persons living with sensory impairments.
Environmental Review
Project sites must be free from adverse environmental impacts, e.g., noise, or the proposed project must successfully mitigate these impacts. The City shall assess the environmental effects of each activity proposed to be carried out with City funding in accordance with the provisions of the National Environmental Policy Act of 1969 (NEPA) and the California Environmental Quality
Act (CEQA), as applicable. The Housing Division staff will commence the assessment as part of the initial review of the application. For projects subject to NEPA review, no loan funds (except for activities normally exempted from the environmental clearance requirements in 24 CFR Part 58.34) shall be released until the environmental review is completed, the notice of finding and environmental assessment results are published, and the 15 day public comment period expires.
Prevailing Wages Any contract for construction (rehabilitation or new construction) of affordable housing with 12 or more units assisted with HOME funds, or 8 or more units if the project is assisted with CDBG
funds, must contain a provision requiring that not less than the prevailing wages paid in the locality,
as determined by the Secretary of Labor pursuant to the Davis-Bacon Act, will be paid to all laborers and mechanics employed in the development of the project. Contractors and subcontractors must comply with regulations issued under this Act and pertaining to labor standards and HUD Handbook 1344.1.
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For all funding programs, the following prevailing wage requirements apply. Pursuant to Chapter 7.28 of Article VII of the Santa Monica Municipal Code, any rehabilitation or new construction
project receiving City financial assistance shall comply with State prevailing wage requirements if the following minimum thresholds are met: (1) For a rehabilitation project over $15,000. (2) For a new construction project over $25,000
"Minimum total construction contract" shall not include expenses associated with site acquisition, architectural and other pre-construction development costs, financing charges, bonding and insurance requirements, and fees, permits or licenses required in connection with the project. The minimum thresholds stated above are adjusted each July 1st by the percentage change in the
Consumer Price Index for the previous calendar year. Current minimum thresholds and prevailing wage levels can be obtained from the Office of the City Engineer. Relocation
The Applicant shall develop a plan for temporary relocation or permanent voluntary relocation,
where necessary, for review by the City. The relocation plan shall be in accord with the City's Relocation and Tenant Assistance Plan, and the requirements of the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, and the implementing regulations at 24 CFR Part 42, and the California Relocation Assistance Law, where applicable, copies of
which may be obtained from the Housing Division. There shall be no permanent involuntary tenant
displacement. In cases where tenants will be voluntarily displaced, the Applicant must submit a copy of a letter to each tenant which (1) details the tenant’s rights to relocation assistance, and (2) has been signed by the tenant indicating the tenant’s voluntary waiver of any relocation payments.
Contracting Requirements
All Applicants will be required to submit an affirmative action/equal employment opportunity plan indicating the methods that they will use to encourage the participation of certified Minority Business Enterprise/Women Owned Business Enterprise (MBE/WBEs) in their development project. City staff will review the plan and competitive bid and selection process to ensure that
required procedures have been followed. City staff will also monitor construction to ensure that MBE/WBEs are participating in the project as indicated in the construction contract. In accordance with the City's Women and Minority Business Enterprise Program approved by City
Council on March 8, 1983, all Borrowers are required to consider the City's Women and Minority
Business Enterprise Program Library of Directories and Minority and Women Vendors' listing the procurement of equipment, material, supplies and professional services. All work shall be completed by State-licensed contractors which shall have Santa Monica business
licenses. All contracts must comply with competitive bidding requirements. Contracts over
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$10,000 must be in accordance with City's Women and Minority Business Enterprise Program. All efforts shall be made by the private owner or the Borrower to provide equal opportunity for
employment without discrimination as to race, marital status, sex, color, age, religion, national origin, ancestry, physical disability, AIDS, or sexual orientation, in seeking contractors and subcontractors. Competitive Selection Criteria
In selecting among competing project applications, unless otherwise determined for a particular
project, priority shall be given to projects that: (1) Significantly increase affordable housing opportunities for households who have difficulty finding housing including the homeless, large families, the disabled,
seniors, and persons traditionally served by Single Room Occupancy housing.
(2) Are cost effective or achieve the lowest possible subsidy per unit for City resources. (3) Benefit a high percentage of very low- and low-income households by ensuring deeper affordability. (4) Are located in areas currently underserved by affordable housing developments.
(5) Address an area of need identified in the Housing Element of the City of Santa
Monica; (6) Addresses a particular need identified in the Council-approved Housing Trust Funds Plan; (7) Applicant’s past and projected effectiveness implementing the City-established local
preferences (i.e., households which live or work in Santa Monica).
V. LOAN COMMITMENT AND CLOSING PROCEDURES
Loan Commitment A commitment letter shall be prepared by the Housing Division, reviewed and approved by signature by the Manager of the Division and the Director of Housing and Economic Development,
and signed by the City Manager. The letter shall state the maximum amount of Program funds
reserved for the project and list all of the additional conditions, documents and steps that must be taken by the Borrower prior to loan closing. All loans which exceed the maximum loan and grant amounts in Section III shall require City Council approval. Notice of the issuance of the commitment shall be posted publicly, and a copy of such notice shall be published in a newspaper
of general circulation, no later than 21 days after the commitment is issued.
Staff will prepare and make public a written statement explaining the reasons for approving or denying a loan request. The written statement should address the merits of the loan application evaluated under the criteria, including:
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- Whether the loan request significantly increases affordable housing opportunities for households who have difficulty finding housing including the homeless, large families, the
disabled, seniors, and persons traditionally served by Single-Room Occupancy housing; - Cost-effective or achieve the lowest possible subsidy per unit for City resources; - Benefit a high percentage of very low- and low-income households by ensuring deeper affordability; - Located in areas currently underserved by affordable housing developments
- Addresses an area of need identified in the Housing Element of the City of Santa Monica; - Addresses a particular need identified in the Council-approved Housing Trust Funds Plan; - Loan Applicant’s past and projected effectiveness implementing the City-established local preferences (i.e., households which live or work in Santa Monica).
The Borrower shall conduct a public meeting for the proposed project within 30 days of the delivery of the loan commitment letter. The Borrower must provide a written notice which provides the date, time and location of the public meeting to the Housing Division at least 15 days prior the public meeting date. The written notice shall be made public on the Housing Division’s
website. In addition, staff will provide the written notice to the neighborhood association in which the proposed project is located and the notice shall be published in a newspaper of general circulation. This publication may be combined with the notice of issuance of the commitment.
Upon issuance of a commitment letter, the Housing Division shall prepare draft loan documents,
including a draft Loan Agreement, Promissory Note, Deed of Trust (or other appropriate security as determined by the Housing Manager), and Regulatory Agreement or recorded Covenants, and submit them to the City Attorney’s office for review and approval as to form. The submission shall include copies of the preliminary title report, instructions to escrow concerning the items that
may appear on the title upon closing, and may include the purchase agreement, long term lease
agreement, or air-rights agreement, as applicable. Requirements for a Regulatory Agreement or recorded Covenants may be waived in the case of a project which is funded under the HUD Section 202 or Section 811 Program.
Loan Closing
Funds may be disbursed following execution of the loan documents by the Borrower and the City Manager, and compliance with all commitment conditions. Staff shall submit a request for release of funds required for loan closing to the Finance Director. The Finance Director may then authorize release of loan funds into an escrow account established for the loan closing with instructions for
disbursement. The City will wire funds to escrow twenty-four hours prior to the scheduled close
of escrow.
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VI. PROJECT MONITORING AND REPORTING
The Housing Division shall monitor the project during rehabilitation or construction as needed for
compliance with any loan documents and applicable City, State and/or Federal regulations. The
Housing Division shall request notification of the final inspection and final construction release from the primary lender, and shall review management practices and reporting procedures with the Borrower and project management agent at that time for full compliance with Program requirements. A copy of the Notice of Completion for the project shall be submitted to the Housing
Division at the time the Notice is recorded.
Borrowers shall be required to certify annually that they have complied with affirmative marketing and tenant selection procedures, and shall submit an annual report to the Housing Division in the form specified by the Division. The Housing Division shall monitor compliance with any
Regulatory Agreement or recorded Covenants, the loan documents, and applicable City, State
and/or Federal regulations on an annual basis. For projects funded under the federal Section 202 Supportive Housing Program and Section 811 Supportive Housing Program, during the term of the HUD Capital Advance documents,
compliance with the HUD documents will constitute compliance with the provisions of these
Guidelines. Fair Housing and Equal Opportunity
Borrower shall post notices stating that a housing project is subject to Fair Housing and Equal
Employment Opportunity requirements of 24 CFR 92.350 and 351 at each project site. The name
and telephone number of the Fair Housing Officer of the City of Santa Monica will be included on the notices. Fair Housing complaints are referred to the City Attorney's office for investigation. If, after
investigation, it is determined that discrimination in the rental or sale of housing has occurred, the
City Attorney may attempt to mediate a settlement between the owner/seller and the complaining party. Mediation is usually successful. However, if it is not, the party with the complaint may proceed to file against the owner/seller. If a pattern of discrimination has occurred, the City may file suit for unfair business practices or other applicable violations.
Establishment and Use of Reserve Funds
Upon completion of project construction, the Borrower will be required to capitalize a Reserve Fund in an amount determined by the City and make annual contributions to the Fund. The Reserve Fund can be utilized for expenditures related to necessary structural and equipment replacements and improvements of a capital nature, and is not intended to be used for ordinary
maintenance items. Any expenditure by the Borrower from the Reserve Fund in excess of $5,000 must be approved in advance by the City in writing. Expenditures of $1,000 to $5,000 must be
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documented by paid invoices submitted to the City within 30 days of disbursement from the Reserve Fund.
Annual Reporting by the Housing Division The City Manager shall prepare an initial proposed plan, called Housing Trust Funds Plan (“Plan”), for affordable housing development in the City for the remaining period covered by the current Housing Element (i.e., through 2021). The Plan shall be made available online and the Housing
Division shall conduct a 45-day public comment period. A public meeting hosted by the Housing
Commission shall be held by the Housing Division between the 30th and 45th day of the public comment period. Once the public comment period is completed, the Plan with any public comments shall be submitted to the Housing Commission for review and recommendation to the City Council for review and its approval. A Housing Trust Funds Plan shall be prepared and
adopted for each Housing Element cycle.
Thereafter, on an annual basis, the Housing Division shall prepare a report to the Housing Commission for its review and recommendation for City Council approval. The annual report shall include details on the following items:
(1) The source and amounts of funding for each Housing Trust Fund received during the prior year; (2) The amount and uses of funds, including the amount and source of funding commitments issued, from each Housing Trust Fund during the prior year; (3) The quantity and type of affordable housing made available for occupancy during the prior year; (4) The quantity and type of housing which exceeded or fell below the annual production mandate of Proposition R during the prior year; (5) Cumulative figures of source/amount of Housing Trust Funds, quantity/type of affordable housing made available, and exceeded/missed Proposition R requirement, covering the Housing Element period, as well as comparison with the Quantified Objectives set forth in the Housing Element; and (6) A comparison of the actual cumulative affordable housing production covering the period of the adopted Housing Trust Funds Plan with the goals set forth in that plan.
Once approved by City Council, both reports shall be posted on the Housing Division’s website.
Public Information on the Housing Division’s Website Within one week of becoming public, the following items shall be posted to the “Housing Trust Funds” location on the Housing Division’s website:
(1) the current Housing Trust Fund Guidelines;
(2) all documents generated and made public by the City Manager, the Housing Division, the
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Housing Commission, and the City Council pursuant to the affordable housing planning and reporting process;
(3) written explanation of the City’s decisions to approve or deny loan applications; (4) all loan commitment letters issued; (5) all notices of the required public meeting following a loan commitment; and (6) all annual reports provided by the Housing Trust Fund recipients. Staff shall ensure that the annual reports posted publicly shall redact any confidential or personal information.
The City also shall provide—at the same location on its website—a mechanism whereby interested members of the public can sign-up to receive an automatic email with a link to the document every time a new document is posted to this section of the City’s website.
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VII. FUNDING SOURCES
HOME Trust Fund
Source of Funds
Funding for this Program is provided through the U.S. Department of Housing and Urban
Development (HUD) HOME Program (including program income and residual receipts), and therefore is subject to the federal rules and regulations found in 24 CFR Part 92, as amended from time to time.
Eligible Borrowers/Grantees
Eligible borrowers are non-profit Housing Development Corporations (HDCs) with proven capacity to develop, own and operate affordable housing, and which have a valid 501(c)(3) or (4) designation from the IRS, and private owners of multi-family and SRO rental buildings with proven capacity to develop, own and operate affordable housing. Limited partnerships whose general partner is otherwise eligible are also eligible to borrow Program funds.
Eligible Projects Projects eligible for HOME funding shall: (1) be rental projects located in the City of Santa Monica; (2) contribute to the achievement of the City's fair housing goals; (3) involve 4 or more apartments or Single-Room-Occupancy (SRO) units which will be
rented to eligible lower income households at rents that do not exceed rents as defined by 24 CFR 92.252, dated September 16, 1996, as amended from time to time. Projects serving persons with special needs, or where the City Manager finds that the project will provide a substantial public benefit, may have fewer than four apartment or SRO
units. Transitional or permanent housing may be provided (but not temporary shelters).
(4) have at least 20% of the HOME assisted units rented to very low income families (50% of median income) under the terms and conditions set forth in 24 CFR 92.252 (2)(b); (5) demonstrate financial feasibility -- including the ability to maintain rents for the subsidized units at affordable levels for the periods specified in 24 CFR 92.252;
(6) be free of significant adverse environmental impacts, except those that can be mitigated
through the project itself; (7) minimize tenant displacement; (8) comply with all local building and zoning codes and standards, including energy efficiency and water conservation standards, meet housing quality standards in Section
882.109 of Title 24. Newly constructed housing must meet the current edition Model
Energy Code of the Council of American Building Officials; (9) make efficient use of public funds and avoid "layering" of subsidies beyond those necessary to achieve a financially feasible project; (10) have at least 51% of the project space be residential, if in a mixed use project.
(11) Acquisition or Acquisition and Rehabilitation projects shall have at least 51% of the
units occupied by households with incomes that do not exceed 80% of median income,
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adjusted for household size, at the time of acquisition (except as approved by the City Manager). Eligible Uses and Activities HOME funds may only be used to finance new construction or acquisition and/or rehabilitation of rental housing which is affordable to very low and low-income households as defined by 24 CFR 92.2. Fifteen percent (15%) of the annual HOME fund allocation shall be set aside for certified community housing development organizations (CHDO’s).
New construction costs eligible for HOME funding shall be as specified in 24 CFR Part 92, including: 1. site acquisition; 2. cost of demolishing existing structures only if construction is commenced within 12
months of demolition; 3. site preparation costs (grading, filling, etc.); 4. financing costs as described in 24 CFR 92.206; 5. architectural, engineering, and other related soft costs; 6. the cost of extending or upgrading utilities to the site to support the proposed project;
7. construction costs; 8. relocation costs; and, 9. affirmative marketing and audit costs related to HOME program requirements. 10. predevelopment loans up to a period of 24 months for site acquisition, predevelopment activities, including professional services which cannot be obtained on a contingency
basis, and construction. Such loans may be extended for up to 18 months with an additional 12 month extension option at the discretion of the Housing Manager. Rehabilitation costs eligible for HOME funding include: 1. project acquisition with or without rehabilitation;
2. costs of temporary or permanent relocation for existing tenants; 3. financing costs, as described in 24 CFR 92.206; 4. architectural, engineering, or other design costs; 5. utility upgrade or extension costs; 6. costs associated with demolition (where necessary) only if rehabilitation is commenced
within 12 months of demolition; 7. construction costs; 8. project audit costs; and, 9. affirmative marketing costs.
Ineligible Uses and Activities
The following costs are not eligible for HOME funding: 1. project reserve accounts for replacement or operating reserves, and operating subsidies; 2. payment of impact fees; 3. land banking;
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4. emergency repair or weatherization programs; 5. commercial properties;
6. temporary shelters; or 7. project-based rental assistance. Affordability Requirements
A housing project qualifies as a HOME assisted affordable housing project if rents are limited as
follows:
1. At least 20 % of the HOME assisted units are: a) Occupied by very low-income families who pay toward rent not more than 30% of the family adjusted income, or b) Occupied by very low-income families and bear rents not greater than 30% of the
gross income of a family whose income equals 50% of the median income, as
determined by HUD. In determining the maximum monthly rent, the landlord must subtract a monthly allowance for any utilities and services (excluding telephone) to be paid by the tenant. 2. All remaining HOME assisted units must bear rents not greater than the lesser of:
a) The fair market value for existing comparable units in the area as established by
HUD, less the monthly allowance for utilities and services to be paid by the tenant; or b) A rent that does not exceed 30% of the adjusted income of a family whose income equals 65% of the median income for the area as determined by HUD. In determining the maximum monthly rent, the owner must subtract a monthly allowance for utilities
and services to be paid by the tenant.
3. Is occupied only by households that qualify as lower income (80% of median income) families; 4. Will remain affordable, pursuant to deed restriction, covenants running with the land, or other mechanisms that ensure that the property will remain affordable without regard
to the term of the mortgage or transfer of ownership for not less than 55 years. Other Requirements Minimum Loan: All HOME investments must total not less than $1,000 multiplied by the number of HOME assisted units in the project.
Maximum Loan: The maximum amount of subsidy per unit shall not exceed the maximum allowed by HUD under the HOME program (24 CFR 92.250), or that provided for under Section IV, Loan Terms, of these Guidelines, whichever is less. The City will avoid unnecessary layering of subsidies from different federal, state and local programs and seek to maximize the benefit to
target households from the investment of HOME funds in a project. See Exhibits (in Section VIII
of this report) for Home Program Subsidy Limits. Property Standards: Housing that is assisted with HOME funds must meet, at a minimum, the housing quality standards of all local codes, rehabilitation standards and zoning codes. Newly
constructed housing must meet the current edition of the Model Energy Code published by the
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Council of American Building Officials. Substantially rehabilitated housing must meet the cost-effective energy conservation and effectiveness standards in 24 CFR 39.
Labor Standards/Construction Contracts: Any contract for construction (whether it is for rehabilitation or for new construction) of affordable housing with 12 or more units assisted with HOME funds must contain a provision requiring that not less than the prevailing wages paid in the locality, as determined by the Secretary of Labor pursuant to the Davis-Bacon Act, will be paid to
all laborers and mechanics employed in the development of the project. Contractors and subcontractors must comply with regulations issued under this Act and pertaining to labor standards and HUD Handbook 1344.1. These provisions apply whether HOME funds are used for construction or non-construction costs.
Lead-based Paint: Housing assisted with HOME funds constitutes HUD-associated housing for the purpose of the Lead-Based Paint Poisoning Prevention Act and is therefore subject to 24 CFR Part 35. Unless otherwise provided, borrowers are responsible for testing and abatement. Conflict of Interest: No person who is an employee, agent, consultant, officer, or elected official
or appointed official of the City who exercises or has exercised any function or responsibility with respect to activities assisted with HOME funds or who is in a position to participate in a decision making process or gain inside information with regard to these activities, may obtain a financial interest or benefit from a HOME assisted activity, or have an interest in any contract, subcontract
or agreement with respect thereto, or the proceeds thereunder, either for themselves or those with
whom they have family or business ties, during their tenure or for one year thereafter. Religious organizations: HOME funds may not be provided to primarily religious organizations, such as churches, for any activity including secular activities. In addition, HOME funds may not
be used to rehabilitate or construct housing owned by primarily religious organizations or to assist
primarily religious organizations in acquiring housing. However, HOME funds may be used by a secular entity to acquire housing from a primarily religious organization, and a primarily religious organization may transfer title to property to a wholly secular entity and the entity may participate in the HOME program in accordance with the requirements of this part. The entity may be an
existing or newly established entity (which may be an entity established, but not controlled, by the
religious organization). The completed housing project must be used exclusively by the owner entity for secular purposes, available to all persons regardless of religion. In particular, there must be no religious or membership criteria for tenants of the property.
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CDBG Housing Trust Fund
Source of Funds
Funding for this program is provided through the U.S. Department of Housing and Urban
Development (HUD) Community Development Block Grant (CDBG) program (including program income and residual receipts), and therefore is subject to the federal rules and regulation found in 24 CFR Part 570, as amended from time to time.
Eligible Borrowers/Grantees
Eligible borrowers are community-based nonprofit housing development corporations (CBDO’s)
duly organized or with capacity to promote and undertake community development activities on a not-for-profit basis, with proven capacity to develop, own and operate affordable housing, within a neighborhood identified in the Community Development plan. Such organizations are defined in CDBG regulations (24 CFR 570.204(a)(2)(c)(1)). Nonprofit Housing Development Corporations
(HDC’s) and social service agencies with proven capacity to develop, own, and operate affordable
housing, and limited partnerships whose general partner(s) is otherwise eligible under the above provisions are also eligible to borrow Program funds if the nonprofit partner is the managing general partner throughout the term of the loan and will receive at least 51% of the developer fee. Nonprofit corporations must have a valid 501(c)(3) or (4) designation from the Internal Revenue
Service.
Eligible Projects Eligible projects will: (1) have four or more apartment units, Single Room Occupancy (SRO) units, or fewer than four units in the case of congregate housing, mobile home units or where the City Manager finds that the project will provide a substantial public benefit; (2) if acquisition or
rehabilitation, have at least 51% of the units occupied by low and moderate income tenants at the time of acquisition (except as approved by the City Manager); (3) if new construction, have 20% of the units occupied by low income tenants; (4) be free from significant adverse environmental impacts except those that can be mitigated; and, (5) avoid permanent involuntary tenant displacement to the greatest degree feasible in order to carry out the program. Transitional or
permanent housing may be provided. Rents of assisted units shall be affordable to households whose incomes do not exceed 80% of the area median income. Eligible Uses and Activities Funds can be used to make loans to eligible borrowers to provide affordable housing, principally for low and moderate income households, including but not limited to:
(1) acquisition and/or rehabilitation of eligible rental properties; (2) new construction of rental or limited equity cooperative housing by a CBDO is eligible, provided the construction activity is carried out as part of a neighborhood revitalization, community economic development or energy conservation project;
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(3) predevelopment loans up to a period of 24 months for site acquisition or construction. Such loans may be extended for up to 18 months with an additional 12 month extension
option at the discretion of the Housing Manager. (4) acquisition of short-term occupancy rental housing. Funds may also be used for related predevelopment activities, including professional services which cannot be obtained on a contingency basis. Ineligible Uses and Activities Funds may not be used for the following activities: (1) the construction of new rental housing or for any program to subsidize or assist such housing except when carried out by a CBDO.
(2) to provide income payments for rent or utilities, except in emergency situations for a period not longer than three months. (3) to assist rental housing properties if less than 51% of the units will be occupied by low and moderate income households. However, such housing may be assisted where (a) The assistance is for the purpose of reducing the development cost of new
construction; (b) The project is not designed for/occupied by elderly households; (c) At least 20% of the units will be occupied by low- and moderate-income households (households with incomes which do not exceed 80% of median income); and
(d) The proportion of the total cost of developing the project (to be borne by the CDBG funds) is less than or equal to the proportion of the units in the project which will be occupied by low to moderate income households. Compliance with Federal and Local Regulations
All projects must comply with all applicable federal requirements contained in 24 CFR Part 570
Subpart K, including but not limited to standards of financial management, environmental review, labor and wage requirements, debarred contractors, lead-based paint and equal opportunity. Borrowers should note:
Contract Requirements: All work shall be completed by licensed contractors. All contracts must
comply with competitive bidding requirements. Labor Standards: A property with eight or more residential units must comply with the Federal Labor Standards, including the Davis-Bacon Act requirements, as promulgated by HUD, and set
forth in 24 CFR Part 570, Subpart K in the performance of the rehabilitation or construction work
financed by the loan. Contracts over $10,000 must comply with Equal Opportunity Affirmative Action requirements of Section 3 of the Housing Urban Development Act of 1968 and be in accord with the City's Women and Minority Business Enterprise Program. All efforts shall be made to provide equal opportunity for employment without discrimination as to race, marital status, sex,
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color, age, religion, national origin or ancestry, and to seek out qualified local tradespeople for contracting and subcontracting bids.
Lead Based Paint: All projects must comply with the federal Lead-Based Paint Hazard Abatement regulations contained in Subpart K, 24 CFR 570. Accessibility: All projects must comply with the federal Section 504 Disabled Accessibility
regulations contained in Sections 8.22 and 8.23 of Subpart C, 24 CFR Part 8. Religious Organizations: All projects must be used exclusively for secular purposes, and must be available to all persons regardless of religion. The housing may not be used for worship or religious instruction.
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Citywide Housing Trust Fund
Source of Funds
Funding for this program is provided using revenues generated through (i) Development
Agreements with for-profit development firms doing business in the City of Santa Monica, (ii) in-lieu fees from the Affordable Housing Production Program established by Ordinance 1918, (iii) the Affordable Housing Commercial Linkage Fee Program, and (iv) proceeds from the sale of City-owned property.
Eligible Borrowers/Grantees
Eligible borrowers are nonprofit Housing Development Corporations (HDCs) with proven capacity to develop, own, and operate affordable housing and whose Articles of Incorporation and Bylaws irrevocably dedicate residential property owned by the corporation to the charitable purpose of providing affordable housing to low and moderate income households. Limited
partnerships with such a nonprofit housing development corporation as the general partner are also
eligible borrowers if the nonprofit partner is the managing general partner throughout the term of the loan and will receive at least 51% of the developer fee. Nonprofit corporations must have a valid 501(c)(3) or (4) designation from the Internal Revenue Service.
Eligible Projects
Funds can be used to make deferred loans to eligible borrowers to provide affordable housing, for low- and very low-income households through acquisition and/or rehabilitation or new construction. Eligible rehabilitation projects will:
(1) be in need of rehabilitation as defined herein; (2) be located in the City of Santa Monica; (3) be free from significant adverse environmental impacts except those that can be mitigated through rehabilitation; and
(4) avoid permanent involuntary tenant displacement to the greatest degree feasible in order to carry out the program. Eligible projects which involve new construction or conversion of an existing non-residential use will conform to items (2), (3), and (4) above.
Eligible acquisition and rehabilitation projects shall have at least 51% of the units occupied by households whose incomes do not exceed 80% of median income, adjusted for household size, at the time of acquisition (except as approved by the City Manager). Any units vacated subsequent to the acquisition date shall be affordable to households whose incomes do not exceed 60% of
median income, and (except for households in occupancy at the time of acquisition) shall be occupied by households whose incomes do not exceed 60% of median income.
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For new construction projects, any unit assisted under this program shall be affordable to and occupied by households whose incomes do not exceed 60% of median income as adjusted for
household size. Eligible Uses and Activities Funds can be used to make loans to eligible borrowers to provide affordable housing, for low- and very low-income households, including but not limited to the following:
(1) acquisition and rehabilitation of eligible rental properties; (2) acquisition and conversion of non-residential property to multifamily or Single-Room Occupancy rental housing units; (3) new construction of rental housing units;
(4) acquisition and rehabilitation or construction of Single-Room Occupancy housing
units; and (5) predevelopment loans up to a period of 24 months for site acquisition, predevelopment activities, including professional services which cannot be obtained on a contingency basis, and construction. Such loans may be extended for up to 18 months with an
additional 12 month extension option at the discretion of the Housing Manager.
Other Requirements Funds derived from the Affordable Housing Production Program may only be used for (i) new construction expenses, or for (ii) acquisition expenses incurred in conjunction with new construction of projects. Units assisted with Affordable Housing Production Program funds shall
be primarily units for families with an average of two bedrooms. Religious Organizations All projects must be used exclusively for secular purposes, and must be available to all persons regardless of religion. The housing may not be used for worship or religious instruction.
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Low-Moderate Income Housing Asset Trust Fund
Source of Funds
Funding sources for this program are generated from proceeds from the sale of former
Redevelopment Agency housing assets, residual receipts from former Redevelopment Agency assets (i.e., loans), as well as a portion of the loan repayments from the former Redevelopment Agency to the City. Sources are set aside for the purpose of increasing, improving and preserving the community’s supply of low and moderate income housing as stipulated by California Health
and Safety Code Section 34176. (Further information on grant terms provided in Section III).
Eligible Borrowers/Grantees Eligible borrowers are nonprofit Housing Development Corporations (HDC’s) duly organized to promote and undertake community development activities on a not-for-profit basis, or for-profit housing developers or development corporations, with proven capacities to develop, own, and
operate affordable housing. Limited partnerships whose general partners are otherwise eligible
under the above are also eligible to borrow Program funds. Eligible Projects All new construction projects shall be affordable to households whose income, as adjusted for household size, does not exceed 80% of median income.
Eligible acquisition and/or rehabilitation projects will: (1) have four or more apartment or SRO units or be congregate housing or mobile home units, except where the City Manager finds that the project will provide a substantial
public benefit; (2) be in need of rehabilitation as defined herein; (3) be located in the City of Santa Monica; (4) be free from significant adverse environmental conditions except those that can be mitigated at a reasonable cost through rehabilitation; and
(5) minimize tenant displacement. Eligible Uses and Activities Program funds can be used to make loans or grants to eligible borrowers who will provide affordable housing, principally for low- and moderate-income households. Eligible uses of deferred payment loan funds or grants include, but are not limited to, the following:
(1) acquisition and/or rehabilitation of eligible properties for rental or transitional housing; (2) acquisition and conversion of non-residential property to multifamily or Single-Room Occupancy rental housing units; (3) new construction of housing units for rental or transitional housing;
(4) acquisition and rehabilitation of Single-Room Occupancy housing units; and
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(5) predevelopment loans or grants up to a period of 24 months for site acquisition, predevelopment activities, including professional services which cannot be obtained on
a contingency basis, and construction. Such loans or grants may be extended for up to 18 months with an additional 12 month extension option at the discretion of the Housing Manager. Affordability Requirements
As required by State law, all projects shall be targeted to households earning 80% or less of the area median income, based on the State of California Housing and Community Development income and rent limits. State law also requires that at least thirty percent (30%) shall be expended for rental housing affordable to and occupied by “low-income” households does not exceed thirty percent (30%) of the area median income and no more than twenty percent (20%) affordable to
and occupied by households between 60% of the area median income and 80% of the area median income. Units are considered affordable when the rent, less a deduction for a utility allowance, for a “very low-income” household does not exceed thirty percent (30%) of 50% of the area median income;
for a “low-income” household does not exceed thirty percent (30%) of 60% of the area median income. Very low-income households are households whose incomes do not exceed 50% of the area median. Low-income households are households whose income does not exceed 80% of the area
median. The median income as referenced above is the Los Angeles County median income figure, adjusted for household size, as published by the California Department of Housing and Community Development (HCD) from time to time. Project Monitoring
The City shall monitor annually any housing affordable to households of low- or moderate-income
funded with these trust funds. The City will require owners or managers of the housing
developments to submit an annual report to the City. The annual report will include information on rental rates, family income, and family size of occupants. Security
The loan or grant shall be secured by a Deed of Trust and Promissory Note which may be
subordinated to deeds of trust securing other Federal, State, or City loans, or loans from conventional financing institutions used in conjunction with the Low-Moderate Income Housing Asset Trust Fund Loan on the same property. The City must obtain written commitments to protect the City’s investment in the event of a default. The City must approve all requests for
subordination.
The loan or grant shall be further secured by recorded Covenants and Restrictions, running with the land, to assure that Program funds are used to provide long-term affordable rental housing opportunities for low and moderate income households. The Borrower and the City shall execute
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and record Covenants and Restrictions regulating project rents, tenant selection procedures, use of project income, management and maintenance, transfer of property, and permitted forms of
ownership and use, including a prohibition on conversion of the project to condominium or stock cooperative ownership for the term of the recorded Covenants and Restrictions. The recorded Covenants and Restrictions shall provide for the longest feasible time. Notwithstanding the above, the Covenants and Restrictions would in no event, be shorter than any other term of a Regulatory Agreement or Covenant recorded concurrently with the City’s Covenants and Restrictions. The
Covenants and Restrictions shall be recorded with the Deed of Trust. In some circumstances, these Covenants and Restrictions may be subordinated by the City, pursuant to Section 33334.14 of California Health and Safety Code, to liens, encumbrances, or regulatory agreements of other federal or state agencies or lenders providing financing for the
project, subject to assurances by senior lenders that the City’s lien rights will be protected. Religious Organizations All projects must be used exclusively for secular purposes, and must be available to all persons regardless of religion. The housing may not be used for worship or religious instruction.
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TORCA Housing Trust Fund
Source of Funds
Funding for this Program is provided using revenues generated pursuant to the Tenant Ownership
Rights Charter Amendment, as amended by Proposition K (including the repayment of shared-appreciation loans made pursuant to this Program. Eligible Borrowers* Eligible borrowers are nonprofit Housing Development Corporations (HDCs) with proven
capacity to develop, own, and operate affordable housing, and whose Articles of Incorporation and
Bylaws irrevocably dedicate residential property owned by the corporation to the charitable purpose of providing affordable housing to low- and moderate-income households. Limited partnerships with such a nonprofit housing development corporation as the general partner are also eligible borrowers if the nonprofit partner is the managing general partner throughout the term of
the loan and will receive at least 51% of the developer fee. Nonprofit corporations must have a
valid 501(c)(3) or (4) designation from the Internal Revenue Service. Eligible Projects Eligible projects include acquisition, rehabilitation, or new construction of rental or ownership housing projects which:
(1) consist of mobile home unit(s), congregate housing, Single-Room Occupancy units, or have four or more apartments, except where the City Manager finds that the project will provide a substantial public benefit; (2) are located in the City of Santa Monica; (3) are free from significant adverse environmental impacts except those that can be
mitigated through rehabilitation; (4) avoid permanent involuntary tenant displacement to the greatest degree feasible in order to carry out the program and (5) have at least 51% of the units occupied by households whose incomes do not exceed 80% of median income, adjusted for household size, at time of acquisition (except as
approved by the City Manager). Projects which involve conversion of an existing nonresidential use to residential use are eligible. Transitional or permanent housing may be provided. Projects which involve the conversion of mobile home units to limited equity housing cooperative ownership are also permitted.
Eligible Uses and Activities Program funds can be used to make loans to eligible borrowers who will provide affordable
housing, principally for low and moderate income households. Eligible uses of TORCA funds
include, but are not limited to, the following:
*While the City may not act as a borrower itself, the City Charter provides that the City may also utilize TORCA funds for the development of housing projects which meet TORCA requirements.
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(1) acquisition and/or rehabilitation of eligible rental properties; (2) acquisition and conversion of nonresidential property to multifamily or Single Room
Occupancy rental housing units; (3) new construction of rental housing units; (4) acquisition and rehabilitation of Single-Room Occupancy housing units; (5) predevelopment loans up to a period of 24 months for site acquisition, predevelopment activities, including professional services which cannot be obtained on a contingency
basis, and construction. Such loans may be extended for up to 18 months with an additional 12 month extension option at the discretion of the Housing Manager; and (7) provide rental subsidies for temporary or permanent housing for low-income house-holds. Affordability Requirements All units assisted under this program shall be affordable to households with incomes that do not exceed 80% of median income, and (except for households in occupancy at time of acquisition) shall be occupied by households with incomes that do not exceed 80% of median income.
Other Requirements
Labor Standards: State prevailing wage requirements apply to projects in which project costs exceed $25,000 for new construction or $15,000 for rehabilitation. Religious Organizations All projects must be used exclusively for secular purposes, and must be available to all persons
regardless of religion. The housing may not be used for worship or religious instruction.
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Redevelopment Replacement Housing Trust Fund
Source of Funds Funding for this program is provided using revenues generated through (i) the voter-approved Measure GSH tax revenues and (ii) any other funds dedicated by the City Council. Eligible Borrowers/Grantees
Eligible borrowers are nonprofit Housing Development Corporations (HDCs) with proven
capacity to develop, own, and operate affordable housing and whose Articles of Incorporation and
Bylaws irrevocably dedicate residential property owned by the corporation to the charitable purpose of providing affordable housing to low- and moderate-income households. Limited partnerships with such a nonprofit housing development corporation as the general partner are also eligible borrowers if the nonprofit partner is the managing general partner throughout the term of
the loan and will receive at least 51% of the developer fee. Nonprofit corporations must have a
valid 501(c)(3) or (4) designation from the Internal Revenue Service. Eligible Projects Funds can be used to make deferred loans to eligible borrowers to provide affordable housing, for
low- and very low-income households through acquisition and/or rehabilitation or new
construction. Eligible rehabilitation projects will:
(1) be in need of rehabilitation as defined herein;
(2) be located in the City of Santa Monica; (3) be free from significant adverse environmental impacts except those that can be mitigated through rehabilitation; and (4) avoid permanent involuntary tenant displacement to the greatest degree feasible in
order to carry out the program.
Eligible projects which involve new construction or conversion of an existing non-residential use will conform to items (2), (3), and (4) above.
Eligible acquisition and rehabilitation projects shall have at least 51% of the units occupied by
households whose incomes do not exceed 80% of median income, adjusted for household size, at the time of acquisition (except as approved by the City Manager). Any units vacated subsequent to the acquisition date shall be affordable to households whose incomes do not exceed 80% of median income, and (except for households in occupancy at the time of acquisition) shall be
occupied by households whose incomes do not exceed 80% of median income.
Affordability Requirements All assisted units shall be affordable to households whose incomes do not exceed 80% of median income, and (except for households in occupancy at the time of acquisition) shall be occupied by
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Housing Trust Fund Guidelines (July 2017) Page 35
households whose incomes do not exceed 80% of median income. The City may require the Borrower to pay to the City residual receipts resulting from rents associated with tenant(s) existing
prior to the acquisition which exceed the rent limits pursuant to the Regulatory Agreement. For new construction projects, any unit assisted under this program shall be affordable to and occupied by households whose incomes do not exceed 80% of median income as adjusted for household size.
All eligible projects assisted under this program will not be required to meet a minimum average number of bedrooms per unit requirement.
Eligible Uses and Activities
Funds can be used to make loans to eligible borrowers to provide affordable housing, for low- and very low-income households, including but not limited to the following: (1) acquisition and rehabilitation of eligible rental properties; (2) acquisition and conversion of non-residential property to multifamily or Single-Room
Occupancy rental housing units; (3) new construction of rental housing units; (4) acquisition and rehabilitation or construction of Single-Room Occupancy housing units; (5) predevelopment loans up to a period of 24 months for site acquisition, predevelopment
activities, including professional services which cannot be obtained on a contingency basis, and construction. Such loans may be extended for up to 18 months with an additional 12 month extension option at the discretion of the Housing Manager; and (6) Rental subsidy or other affordable housing programs with City Council approval.
Religious Organizations
All projects must be used exclusively for secular purposes, and must be available to all persons regardless of religion. The housing may not be used for worship or religious instruction.
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Housing Trust Fund Guidelines (July 2017) Page 36
VIII. EXHIBITS
Exhibit A Definitions Exhibit B HOME Program Subsidy Limits
Exhibit C Rental Housing Loan Application (with check list and including Green
Affordable Housing Checklist)
Exhibit D Green Affordable Housing Checklist
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Housing Trust Fund Guidelines
EXHIBIT A Definitions
Acquisition Basis: Owner’s basis for acquisition of the property as determined by Standard Accounting Procedures. Capitalized Reserve Account: An account established with funds from capital funding sources
available at the time of completion of development for the purpose of funding future project costs.
Community Housing Development Corporation (CHDO): A private nonprofit housing development corporation which meets a series of HUD qualifications prescribed in the HOME Regulations, including the requirement that it is duly organized to provide decent housing that is
affordable to low- and moderate-income persons; maintains at least one-third of its governing
board’s membership for residents of low-income neighborhoods, other low-income residents, or elected representatives of low-income neighborhood organizations; and, provides a formal process for low-income program beneficiaries to advise the organization in its decisions regarding the design, siting, development, and management of affordable housing.
Community Based Development Organization (CBDO): A Housing Development Corporation which meets the requirements of CDBG regulations as defined in 24 CFR 570.204(a)(2)(c)(1), as amended from time to time.
Congregate Housing: A multi-family residential facility with shared kitchen facilities, deed-
restricted or restricted by an agreement approved by the City for occupancy by low or moderate income households, designed for occupancy for periods of six months or longer, providing services which may include meals, housekeeping and personal care assistance as well as common areas for residents of the facility.
Depreciable Basis: Owner’s basis for depreciable costs of the project as determined by Standard Accounting Procedures, not including developer fees. Fair Market Rents: Maximum rents as published by HUD for the Section 8 programs for the Los
Angeles Area, adjusted for unit size.
Grant: Transfer of trust funds for purposes of financing the development of affordable housing, on the condition that grantee remains in full compliance with the Regulatory Agreement. Unlike a loan, the grant only becomes due and payable in the event that grantee is in default of the
Regulatory Agreement.
HED: Housing and Economic Development Department, City of Santa Monica. This Department will administer the Program for the City under the direction of the City Manager/Executive Director.
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Housing Trust Fund Guidelines
Nonprofit Housing Development Corporation (HDC): A private, nonprofit corporation with
proven capacity to develop, own and operate housing, and which has a valid 501(c)(3) or (4)
designation from the IRS. Limited Equity Cooperative: A form of ownership whereby the residents form a cooperative corporation which owns and manages the property, and where the return on residents' original
equity is limited to no more than 10%, as defined in the California Health and Safety Code, Section
33007.5. Loan: Advance of trust funds for purposes of developing affordable housing with promise to repay.
Qualified Developer: A non-profit corporation with proven capacity to develop, own and operate housing which has a 501(C) (3) or (4) designation from the I.R.S. Low and Moderate Income Households:
For Home Trust Fund, CDBG Housing Trust Fund and TORCA Housing Trust Fund: Households with incomes that do not exceed 80% of Los Angeles County median income, adjusted for household size, as published by the U.S. Department of Housing and Urban Development (HUD) from time to time.
For Citywide Housing Trust Fund: Households with incomes that do not exceed 60% of the Los Angeles County median income, adjusted for household size, as published by the U.S. Department of Housing and Urban Development (HUD) from time to time are considered low income. Within this group of households, those with incomes that do not exceed 50% of the median are considered
very low income.
For Low-Moderate Income Housing Asset Trust Fund: Households with incomes that do not exceed 120% of the Los Angeles County median income, adjusted for household size, as published by the U.S. Department of Housing and Urban Development (HUD) from time to time.
Maximum Affordable Rent: A rent which does not exceed thirty percent (30%) of the maximum income level of the income group being served (see "Low and Moderate Income Households"), adjusted for unit size and utility costs.
For Low-Moderate Income Housing Asset Trust Fund: the Maximum Affordable Rent for
households with incomes that do not exceed 120% of median income for Los Angeles County shall be 30% of 110% of such median income. Maximum Allowable Rent: The legal rent for the unit under Santa Monica Rent Control Charter Amendment, with allowable adjustments by the Rent Control Board for annual expense increases
or for capital improvements.
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Housing Trust Fund Guidelines
New Construction: The construction of new housing including, but not limited to assembly of
factory-built modular housing, or conventional on-site construction.
Operating Reserve Account: An account established for the purpose of funding a deficit in the project’s operation.
Rehabilitation: Correction of local code violations and removal of health and safety hazards;
upgrading of housing units to decent, safe and sanitary conditions to comply with the Housing Quality Standards promulgated by HUD and with local standards; repair or replacement of major building systems or components in danger of failure; and alterations, additions and improvements to expand the number of affordable units, or needed to improve the basic livability, energy
efficiency, accessibility for the disabled, or security of the property, and to reduce overcrowding.
Rehabilitation Basis: Owner’s basis for rehabilitation costs incurred for the property, as determined by Standard Accounting Procedures, not including developer fees.
Replacement Reserve Account: An account established for the purpose of funding major
repairs or replacement of capital components of a building which reach the end of their economic life and require replacement. Residual Receipts: The gross receipts from the property, less actual costs of operation,
administration, maintenance, taxes, insurance, utilities, management, approved replacement and
operating reserves, payments of principal and interest on loans senior to the City loan, and required debt service coverage. The amount of Residual Receipts shall be calculated based on the actual income and expenses set forth in the Annual Operating Budget required under the Regulatory Agreement or recorded Covenants, as approved by the City.
Single Room Occupancy Housing: Multifamily residential buildings containing housing units with a minimum floor area of one hundred fifty square feet and a maximum floor area of three hundred seventy-five square feet which may have kitchen and/or bathroom facilities, and where each housing unit is restricted to occupancy by no more than two persons and is offered on a monthly
rental basis or longer.
Transitional Housing: A type of supportive housing used to facilitate the movement of homeless individuals and families to permanent housing. Typically, transitional housing is housing in which homeless people live for up to 24 months and receive supportive services that enable them to live
more independently. The supportive services may be provided by the organization managing the
housing or coordinated by them and provided by other public or private social service agencies.
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EXHIBIT B
HOME PROGRAM SUBSIDY LIMITS
UNIT SIZE SUBSIDY LIMIT 0 Bedroom $141,088 One Bedroom $161,738 Two Bedroom $196,672 Three Bedroom $254,431 Four Bedroom or larger $279,285
Limits are for 2017
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EXHIBIT C Housing Trust Fund Loan Application (includes Checklist)
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City of Santa Monica
Housing and Economic Development Department
Housing Division
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Santa Monica Housing Division
Rental Housing Loan Application
Loan Request: $ _____________________ Term (in years): ___________
Purpose of Loan (Circle one):
Acquisition & Rehabilitation New Construction Rehabilitation
Proposed City Funding Source (Circle one):
Predevelopment Construction Permanent Interim/Bridge
Applicant
Name of Organization ________________________________________________________
Street Address ________________________________________________________________
City, State & Zip Code ________________________________________________________
Contact/Title _________________________________________________________________
Phone/Fax ___________________________________________________________________
Legal Status of Applicant (Circle one): nonprofit corporation for-profit corporation
general partnership limited partnership individual joint venture other
Names and Addresses of Principals (if firm, not individual)
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
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City of Santa Monica
Housing and Economic Development Department
Housing Division
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Santa Monica Housing Division
____________________________________________________________________________
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Santa Monica Housing Division
Proposed Project
Name of Project ________________________________________________________________
Street Address __________________________________________________________________
City, State & Zip Code __________________________________________________________
Total Number of Units ___________________________________________________________
Description of Proposed Project
Please provide a brief description of the proposed physical project, including proposed (or current if an
existing property) resident income levels, number and size of units, special amenities, on-site services, etc.
Description should be at least several paragraphs in length.
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Santa Monica Housing Division
(Please circle the appropriate categories)
Building Type Row Detached Semi-Detached Walk-up Elevator Mixed-Use
Foundation Type Full Basement Partial Basement Crawl Space Slab/Grade
Parking Type Subterranean Semi-Subterranean Tuck-under On-Grade
Existing Proposed Stories: Units: Buildings: Parking Spaces: Gross Building Sq/Footage
(excluding parking):
Parking Square Footage: Residential Area: Commercial Area: Year Built: __________ Units Demolished: __________
Amenities
Pool Laundry Other: __________________________
Type of Social Services, if any __________________________________________________
Accessory Buildings(i.e. Rec Halls, Garage or Shed Structures, etc.):
No., type, size ________________________________________________________________
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Santa Monica Housing Division
Unit Mix Existing Proposed Sq/Ft
Rents Existing Proposed studio one bedroom two bedrooms three bedrooms four bedrooms Total
Site information Lot Size: Sq. Ft. Lot Dimensions: X Ft. Zoning: Variances/conditional use permits/
other planning approvals required? Is the project located in the Coastal Zone?
Equipment and Services to be included in Rent Ranges (gas/electric) Refrigerator (gas/elec) Air Conditioner Kitchen Exhaust Fan Dishwasher Garbage Disposal Laundry Facility Drapes Carpet Gas Heat Hot Water Water Electricity Other:
Do you have a Rent Control Removal Permit? Yes No
If yes, please provide the permit number and date of issue ___________________________
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Santa Monica Housing Division
Financing
Will this project seek to utilize low income housing tax credits? Yes No
If yes, estimated federal credits ___________ 9% ____________ 4% ____________
estimated State credits ___________
Will the project seek to utilize tax exempt financing? Yes No
If yes, proposed issuer and form of credit enhancement ______________________________
____________________________________________________________________________________
Development Team Name Contact/Title Phone/Facsimile Address Developer
Architect
Consultant
Attorney
General Contractor
Construction Manager
Relocation Consultant
Other
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Santa Monica Housing Division
Certification Statement
Please provide the following information. Leave no blanks. If not applicable, type N/A. (Please attach additional sheets, if necessary).
1. Applicant's Name:
2. List any additional names or aliases, exercise of power of attorney and/or fiduciary trust capacities that you are currently using or have used in the past. If any,
please explain.
3. List all partnerships, corporations, joint ventures, and/or limited partnership
entities, (including applicant, if applicable), which you are currently or have been
associated with, and designate whether you are/were a principal and list your title
and responsibilities, the purpose of the organization and its current status.
3a. Have any of the entities listed above been either suspended, revoked, lapsed
and/or terminated for any reason? If so, please explain.
3b. Has the applicant or its partners or principals filed for bankruptcy? If so, please
state the case number and whether the case was dismissed, discharged or is current.
3c. Has the applicant or its partners or principals defaulted on a financial obligation?
If so, please explain.
3d. Is there, or has there ever been, a settlement and/or judgement filed or a case
pending against the applicant or its partners or principals? If so, please explain.
3e. Has a lien ever been filed against real property owned by the applicant or its
partners or principals listed above as a result of a judgment, etc.? If so, please explain.
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Santa Monica Housing Division
4. Has the applicant or its partners or principals ever been convicted of a felony or
misdemeanor other than minor traffic violations and/or placed on probation, fined or
given a suspended sentence in court? If so, please explain.
5. Has the applicant or its partners or principals ever been cited and/or convicted
of a misdemeanor, including but not limited to a conviction under local health, fire,
environmental and/or building and safety laws, relating to the ownership and/or
management of real property? If so, please explain.
6. Does the applicant have any employees or relatives who have close
associations with current or former employees of the Santa Monica City Council, City
Manager’s Office, or the Housing and Economic Development Department? If so,
please explain.
7. Are any current or former employees of the Santa Monica Housing Division currently employed by the applicant? Any relatives of any Housing Division
employees? If so, please state the individual=s name and dates of employment.
8. Are there any Housing Division current or former employees that have a financial
interest in this project? If so, state name, dates of employment and interest.
9. List all residential income properties which are owned by the applicant or its
partners or in which principals have a vested interest.
10. Does the applicant or its partners or principals have any income and/or real
property taxes or assessments that are past due? If so, please explain.
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Santa Monica Housing Division
PRIVACY NOTIFICATION. The information requested above is to be used by the Santa
Monica Housing Division to assess the applicants creditworthiness. Information provided
that is contained in public records cannot be withheld from disclosure under the
California Public Records Act, Government Code, Sections 6250 and 6254. All other
information may be required to be disclosed outside the agency by state and/or
federal law.
Furnishing all information requested on this form is mandatory. Failure to provide such
information may result in disqualification or a withdrawal of Housing Division’s
commitment.
CRIMINAL PENALTIES. Any person who shall knowingly make or cause to be made,
either directly or indirectly, any false statement in writing, with the intent that it shall be
relied upon, for the purpose of procuring the loan secured by real property shall be
guilty of a criminal offense, punishable by a fine not exceeding ten thousand dollars
($10,000.00) or by imprisonment in a county jail not exceeding six months, or by both the
fine and imprisonment. (California Penal code sections 532(a) and 532)). CONTINUING OBLIGATION. I understand that I have a continuing obligation to provide the Housing Division with current and accurate information. Applicant must provide to
Housing Division all requested information with an Applicant’s Certification Statement for any individual or entity that Housing Division in its sole discretion believes is necessary
to evaluate the application (reasonably related to the applicant).
I, the undersigned, certify that the information provided to the City of Santa Monica, Housing Division, is true and correct as of the date set forth opposite my signature on
this application package and acknowledge that any false or misleading statements of the information contained may result in civil liability and liability for monetary damages
to the lender, its agents, successors, and assigns, insurers and any other person who may suffer any loss due to reliance upon any false or misleading statements which I
have made on this Certification Statement.
_____________________________ ____________________________________________
Date Applicant’s Name
____________________________________________
Certified By (Print Name) ____________________________________________
Signature
____________________________________________
Title
____________________________________________
Federal Tax ID#
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Santa Monica Housing Division
Special Supplement for Environmental Review
In addition to the following information, please attach 1 copy each of application exhibits (1c)
Construction and Design Description and (1e) current photos of site, and Assessor Parcel Map(s) with parcels indicated. These materials will be forwarded separately to the parties responsible for environmental review.
Applicant: ____________________________________________________________________
Project Address: ______________________________________________________________
Site information Assessor’s Parcel #(s): Lot Size: Sq. Ft. Lot Dimensions: X Ft. Zoning: Uses on adjacent sites: Variances/conditional use permits/
other planning approvals required? Is the project located in the Coastal Zone? Present Property Use: Prior Property Use:
Number of: Existing Proposed Stories: Units: Buildings: Parking Spaces: Gross Building Square Footage (excluding parking):
Parking Square Footage: Year Built:
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Santa Monica Housing Division
Units Demolished:
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Santa Monica Housing Division
Special Supplement for Environmental Review Part II. Questions
1. Please describe adjacent uses and neighborhood characteristics.
2. Is the property designated or determined eligible for historic register designation
at the local, state or national level? Has it been determined ineligible?
3. Please identify the source of information used to determine the exact or
approximate year of building construction.
4. Will financing for this project include the Historic Rehabilitation Tax Credit?
5. Provide the name and address of any person who has commented or may wish
to comment on this project.
6. Provide the names and telephone numbers of the project applicant, project monitor, and project architect and/or contractor.
7. Please provide a copy of a building permit for each building, if applicable.
8. Are there any other environmental studies available for the site (i.e.
Archaeological, Hazardous Materials, Phase I or II)?
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Rental Housing Loan Application Attachment A Santa Monica Housing Division Page 1
Attachment A Tenant Profile
Please list characteristics of resident households and identify where each household falls on the income spectrum.
Unit Number Name of Tenant
# of persons in household
actual income, if known
Income* Low Moderate Above Moderate
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Rental Housing Loan Application Attachment A Santa Monica Housing Division Page 2
Unit Number Name of Tenant
# of persons in household
actual income, if known
Income* Low Moderate Above Moderate
Totals
Percent of Units Low Income ____________________
Percent of Units Moderate Income ________________
Percent of Units Above Moderate Income __________
*See attached chart for maximum income by household size for each income category.
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Checklist Rental Housing Loan Application Santa Monica Housing Division
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S t M i H i Di i i
_______ # Application
_______ # Attachment A - Tenant Profile
_______ # Special Supplement for Environmental Review
_______ # Site and Project Information
Survey of site, if available
Legal Description of the Property
Construction and Design Description
For Acquisition or Rehabilitation Projects - Property Inspection Report and/or Detailed Work Write-Up on a unit by unit basis
Schematic designs, if available
Current Photos of Site
Evidence of Site Control
Preliminary Title Report
Appraisal, if available
Current Rent Roll for existing tenants of acquisition and rehabilitation projects,
and estoppel certificates when available
Verification of Zoning, if available
Phase I Environmental Report and any other Environmental Reports (e.g. lead
and asbestos assessments)
Termite Report
Construction Cost Estimate
Proposed Project Timetable
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Checklist Rental Housing Loan Application Santa Monica Housing Division
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S t M i H i Di i i
Analysis of replacement reserve requirements, showing remaining economic life and projected replacement cost for building systems
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Checklist, cont.
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S t M i H i Di i i
# Financial Feasibility Project development and operating pro formas in format shown. A diskette with these forms prepared using Excel software is available from the City for your use. Notes and assumptions explaining the basis of all projected costs development and operating costs must be provided. Required exhibits include: _____ Project Summary
_____ Exhibit 1, Development Costs
_____ Exhibit 2, Rent Schedule
_____ Exhibit 3, Operating Expenses
_____ Exhibit 4, 30 Year Cash Flow Analysis
_____ Exhibit 5, Financing
_____ Exhibit 6, Tax Credit Analysis (where applicable)
_____ Exhibit 7, Bond Fees Worksheet (where applicable)
_____ Exhibit 8, Sources and Uses Through Construction (when available)
# Organizational Documents
Project Team Resumes
Resumes of Principals of sponsor
For nonprofit developers,
List of Board of Directors and Organizational Chart
501(c)(3) exemption determination letter from the IRS
By-Laws, Articles of Incorporation, Partnership Agreements
Current Financial Statements (Audited statements should be no more than 1 year old. Unaudited statements should be no more than 6 months old.)
Ownership Plan, if applicant will not be owner.
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Checklist, cont.
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S t M i H i Di i i
# Financing
Evidence of other Financing Approvals, Summary of Terms and Status, Contact
Persons and phone numbers.
Ground Lease, if applicable
Loan Documents for Existing or Proposed Subordinate Financing, if available Tax credit reservation, if available
# Property Management
Resume of Firm
Management Plan, if available
# Tenant Information
Tenant Profile, existing if available and proposed, showing number of persons in each household and income level. Relocation Plan, if applicable
# Tax Credit Projects Only
Evidence of Tax Credit Allocation, if available
Commitment of Tax Credit Investor, if available
Partnership Agreement, if available
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EXHIBIT D Green Affordable Housing Checklist
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6
GREEN AFFORDABLE HOUSING CHECKLIST Purpose and Use of the Green Affordable Housing Checklist
The City of Santa Monica Housing Division strongly encourages the use of environmentally sensitive ("green") building materials and
systems in affordable housing developments.
This checklist is intended to encourage developers to consider green building methods and practices in the earliest stages of project
planning. On the checklist are a number of recommended green practices, including practices related to energy efficiency;
landscaping; framing and carpentry; indoor air quality; and other building systems and materials. Keeping in mind the intended
scope of each project, budgetary constraints, availability of materials, and other factors, our goal is that as many of these practices
as possible be incorporated into each project.
It should be noted that many green building systems and materials are evolving and becoming increasingly available. Therefore, this
checklist is a living document, to be updated as technology and construction practices change.
Costs
Some of these practices involve no additional costs. Others may involve marginally or significantly higher initial costs. Please do not
dismiss some items just because they may cost more, as the City may be willing to fund the increased cost in the interest of
promoting a healthy environment. Contractor Bid Packages If you do not have, or cannot obtain, current costs for certain items on the checklist, please include these as alternatives as part of the contractor
bid package in order to determine the cost. Completing the Checklist
Please complete this checklist to show which green building practices will be included in the project. If you do not intend to include certain practices, or if the practice is not applicable to the project, please provide an explanation on the checklist. Also, please indicate which items will be included as alternatives in the contractor bid package. To facilitate completion of the checklist, the City’s Project Analyst is available to assist you.
3.I.d
Packet Pg. 249 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
City of Santa Monica Housing Division
- Green Affordable Housing Checklist -
Item and Santa Monica Green Building Design and Construction Guideline
(SMGBD&CG) reference Description Benefit
Included in Project
Yes No Not Sure--Will Include in Bid Package to
Determine Cost
N/A
7
Energy Efficiency
Energy
Efficient
Lighting SM GBD&CG-ES2
Energy efficient exterior
lighting, such as high-pressure sodium. Should be appropriately sized for the location. Interior fluorescent bulbs and
(where practical and appropriate) fixtures produce light quantity and quality that is comparable to
incandescents, while expending less energy.
Energy efficient lighting reduces
energy consumption and lowers utility bills. One compact florescent bulb will pay itself back over ten times over the course of its life through reduced energy use.
If included, please describe how the item will be used in the project.
If not included, please describe why.
Resource Efficient Appliances
SM GBD&CG-WS1
Refrigerators, water heaters, stoves, dishwashers, and washing machines that are designed to use less energy and water. Most efficient appliances qualify for Energy Star designation.
Appliances, particularly refrigerators and water heaters, are some of the major sources of residential energy use. Reducing energy and water use lowers utility bills while benefiting the environment.
If included, please describe how the item will be used in the project.
If not included, please describe why.
3.I.d
Packet Pg. 250 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
City of Santa Monica Housing Division
- Green Affordable Housing Checklist -
Item and Santa Monica Green Building Design and Construction Guideline
(SMGBD&CG) reference Description Benefit
Included in Project
Yes No Not Sure--Will Include in Bid Package to
Determine Cost
N/A
8
Combined Hydronic Heating
SM GBD&CG-HS8
This system uses hot water from the water heater for space heating. Applicable for new
construction and major rehab only.
Using the water heater for two purposes uses energy more efficiently.
If included, please describe how the item will be used in the project.
If not included, please describe why.
Landscaping
Low-Water Landscape
Designs SM GBD&CG-LA3 See Zoning Ordinance
Section 9.04.010.04.110
Water Conservation
Landscaping
Low-water landscape designs, such as xeriscape, reduce water use by emphasizing native and/or drought tolerant plants, elimination of turf areas, and minimizing maintenance.
Low-water designs reduce water and maintenance bills and impacts on local water supply infrastructure.
If included, please describe how the item will be used in the project.
If not included, please describe why.
3.I.d
Packet Pg. 251 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
City of Santa Monica Housing Division
- Green Affordable Housing Checklist -
Item and Santa Monica Green Building Design and Construction Guideline
(SMGBD&CG) reference Description Benefit
Included in Project
Yes No Not Sure--Will Include in Bid Package to
Determine Cost
N/A
9
Water-Efficient Irrigation
SM GBD&CG-LAb
Water efficient systems, such as drip irrigation, place the correct amount of water
directly at the base of each plant thus reducing water use
and waste from overwatering.
Water efficient systems help plant growth and overall health by eliminating over watering or
excessive drying. They also lower water bills and reduce
impacts on water supply infrastructure.
If included, please describe how the item will be used in the project.
If not included, please describe why.
Engineered Lumber and Wood Alternatives
Oriented Strand Board (OSB)
SM GBD&CG-MA3
OSB is an alternative to plywood for sheathing, flooring, and roofing.
Plywood requires the use of large-size, typically old growth trees. OSB is made from small pieces of wood, thus eliminating or reducing impacts to forests.
If included, please describe how the item will be used in the project.
If not included, please describe why.
Wood I-Beam SM GBD&CG-MA3 Wood I-Beams are an alternative to 2x6s or 2x8s used for floor and roof joists.
Wood I-Beams are engineered to use less wood to perform the same function and are often straighter, thus minimizing wood waste.
If included, please describe how the item will be used in the project.
3.I.d
Packet Pg. 252 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
City of Santa Monica Housing Division
- Green Affordable Housing Checklist -
Item and Santa Monica Green Building Design and Construction Guideline
(SMGBD&CG) reference Description Benefit
Included in Project
Yes No Not Sure--Will Include in Bid Package to
Determine Cost
N/A
10
If not included, please describe why.
Laminated Wood Fiber Products SM GBD&CG-MA3 Gluelam, parlam, microlam, etc. are alternatives to large dimension lumber for trusses, beams, and headers.
Laminate products provide the same strength while eliminating the need to use large-dimension lumber from old-growth sources.
If included, please describe how the item will be used in the project.
If not included, please describe why.
Certified Wood SM GBD&CG-MA6 Certified wood is used like conventional lumber for framing, etc. Based on 2001 availability, may be appropriate for new construction and major rehab projects only.
Wood certified by the Forest Stewardship Council has been monitored from the forest to the local supplier to ensure that the wood is harvested, milled, and delivered under environmentally, and socially responsible conditions.
If included, please describe how the item will be used in the project.
If not included, please describe why.
3.I.d
Packet Pg. 253 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
City of Santa Monica Housing Division
- Green Affordable Housing Checklist -
Item and Santa Monica Green Building Design and Construction Guideline
(SMGBD&CG) reference Description Benefit
Included in Project
Yes No Not Sure--Will Include in Bid Package to
Determine Cost
N/A
11
Plastic Lumber
SM GBD&CG-Mab SM GBD&CG-LA7
Plastic lumber is made from recycled plastic products. It can be used as an alternative
to wood in non-structural applications such as decking
and fencing, depending on field conditions.
Plastic lumber is highly durable and is not susceptible to rot or termite damage. It is also an
excellent use of recycled plastics.
If included, please describe how the item will be used in the project.
If not included, please describe why.
Fiber-Cement Siding SM GBD&CG-Mab
SM GBD&CG-MA4
Fiber cement siding can be used as an alternative to
redwood or other types of siding.
Fiber cement siding is not susceptible to rot or termites and
is fire resistant.
If included, please describe how the item will be used in the project.
If not included, please describe why.
3.I.d
Packet Pg. 254 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
City of Santa Monica Housing Division
- Green Affordable Housing Checklist -
Item and Santa Monica Green Building Design and Construction Guideline
(SMGBD&CG) reference Description Benefit
Included in Project
Yes No Not Sure--Will Include in Bid Package to
Determine Cost
N/A
12
Indoor Air Quality
No-VOC (volatile organic compound) Paint
SM GBD&CG-MA7
No-VOC paint is used exactly like conventional paint. Current no-VOC paints are suitable for indoor use only, subject to ongoing maintenance viability.
No-VOC paint does not emit odors related to VOCs. Organic chemicals are widely used as ingredients in household products like paint, adhesives, cleaning supplies, etc. VOCs can cause eye, nose, and throat irritation, loss of coordination, and potentially damage the liver and central nervous system. Outside, VOCs can bond with other pollutants and create ground-level ozone.
If included, please describe how the item will be used in the project.
If not included, please describe why.
Carbon Monoxide Detector Carbon monoxide detectors monitor the level of this gas in individual dwelling units.
Carbon monoxide is a common indoor air pollutant created by the combustion of natural gas from stoves and heaters and is harmful to human health.
If included, please describe how the item will be used in the project.
If not included, please describe why.
3.I.d
Packet Pg. 255 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
City of Santa Monica Housing Division
- Green Affordable Housing Checklist -
Item and Santa Monica Green Building Design and Construction Guideline
(SMGBD&CG) reference Description Benefit
Included in Project
Yes No Not Sure--Will Include in Bid Package to
Determine Cost
N/A
13
Seal Exposed Particle Board
SM GBD&CG-MA7
Particleboard typically includes formaldehyde. Sealing with a flat, latex-based
primer or other suitable material can prevent the off
gassing of formaldehyde.
EPA ranks formaldehyde as a probable human carcinogen. Exposure to formaldehyde can
cause eye, nose and throat irritation, skin rashes, headaches,
nosebleeds, and nausea.
If included, please describe how the item will be used in the project.
If not included, please describe why.
Formaldehyde-Free Cabinets and Counters
SM GBD&CG-MA7
Particleboard or medium
density fiberboard (MDF) in cabinets and counters can be
substituted with formaldehyde-free MDF alternatives or products such as strawboard and wheatboard made from
agricultural waste.
Cabinets and counters are
typically made of particleboard that uses formaldehyde as the
binding agent. Minimizing or eliminating formaldehyde-based materials has a positive impact on indoor air quality.
If included, please describe how the item will be used in the project.
If not included, please describe why.
Building Materials
3.I.d
Packet Pg. 256 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
City of Santa Monica Housing Division
- Green Affordable Housing Checklist -
Item and Santa Monica Green Building Design and Construction Guideline
(SMGBD&CG) reference Description Benefit
Included in Project
Yes No Not Sure--Will Include in Bid Package to
Determine Cost
N/A
14
Ceramic Tile
SM GBD&CG-MA4
Ceramic tile can be used in kitchen and bathroom and counter tops. May be applicable to new
construction and major rehab only.
Ceramic tile is long lasting and does not off gas.
If included, please describe how the item will be used in the project.
If not included, please describe why.
Linoleum Flooring
SM GBD&CG-MA4
Linoleum flooring is made of natural, renewable substances
such as amber, chalk, cork, and jute. It can be used as an
alternative to sheet vinyl, vinyl composite tiles, or carpet.
Most flooring products such as sheet vinyl and carpet off gas
volatile organic compounds (VOCs) and are made from non-
renewable petroleum-based products. In contrast, linoleum minimizes off gassing and is made from renewable substances.
If included, please describe how the item will be used in the project.
If not included, please describe why.
3.I.d
Packet Pg. 257 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
City of Santa Monica Housing Division
- Green Affordable Housing Checklist -
Item and Santa Monica Green Building Design and Construction Guideline
(SMGBD&CG) reference Description Benefit
Included in Project
Yes No Not Sure--Will Include in Bid Package to
Determine Cost
N/A
15
Recycled Content Insulation
SM GBD&CG-MAb
Both fiberglass and blown cellulose insulation have recycled content. Fiberglass products are
used identically to standard products. Blown cellulose (made
of recycled newsprint) requires a special installer.
Recycled-content products support Statewide solid waste diversion goals. Cellulose
insulation provides a tighter enclosure than fiberglass.
If included, please describe how the item will be used in the project.
If not included, please describe why.
3.I.d
Packet Pg. 258 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
City of Santa Monica Housing Division
- Green Affordable Housing Checklist -
Item and Santa Monica Green Building Design and Construction Guideline
(SMGBD&CG) reference Description Benefit
Included in Project
Yes No Not Sure--Will Include in Bid Package to
Determine Cost
N/A
16
Green Affordable Housing Bid Checklist This checklist is to be completed upon conclusion of the bidding process. This information will be used to determine how any remaining project contingencies will be allocated.
Please list below those items that were identified in the Green Affordable Housing Checklist for inclusion in the bid package along with the bid price and the price for the comparable conventional item.
City of Santa Monica Housing Division
- Green Affordable Housing Bid Checklist -
Green Item Bid Cost Standard Item Bid Cost
3.I.d
Packet Pg. 259 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
City of Santa Monica Housing Division
- Green Affordable Housing Checklist -
Item and Santa Monica Green Building Design and Construction Guideline
(SMGBD&CG) reference Description Benefit
Included in Project
Yes No Not Sure--Will Include in Bid Package to
Determine Cost
N/A
17
3.I.d
Packet Pg. 260 Attachment: Housing Trust Fund Guidelines (4648 : Affordable Housing Funding Opportunities)
City Council Report
City Council Meeting: May 26, 2020
Agenda Item: 3.B
1 of 4
To: Mayor and City Council
From: Andy Agle, Director, Housing and Economic Development, Housing Division
Subject: Affordable Housing Funding Opportunities from the State
Recommended Action
Staff recommends that the City Council adopt the attached resolutions:
1. Authorizing and adopting the 302(c)(4) plan for the Permanent Local Housing
Allocation Program for Funding Allocation Years 2019-2023 (Attachment A); and
2. Authorizing the submission of an application for Permanent Local Housing
Allocation Program Funding (Attachment B); and
3. Authorizing the submission of an application for Local Housing Trust Fund
Program Matching Grant Funding (Attachment C).
Summary
Two opportunities for State grant funding are available to local public agencies to
finance affordable housing development and preservation. One program, the
Permanent Local Housing Allocation (PLHA) Program, allocates a share of funding to
each jurisdiction based on the formula prescribed under federal law for the Community
Development Block Grant program. To receive a share of funding, the City must meet
the threshold requirements, which include Council’s adoption of a plan for use of the
funds. The other opportunity, the Local Housing Trust Fund (LHTF) Program, involves a
competitive application process. Both sources of grant funding would be used for the
production and preservation of affordable housing, in accordance with the City’s
Housing Trust Fund Guidelines and Plan, as well as with each program’s guidelines.
The California Department of Housing and Community Development (HCD) estimates
that the City’s share of PLHA funding could be up to $3,285,096 over five years. Under
the LHTF Program, the City can apply for a one-time award not to exceed $5 million.
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Packet Pg. 261 Attachment: May 26, 2020 Council Staff Report (4648 : Affordable Housing Funding Opportunities)
2 of 4
Discussion
Permanent Local Housing Allocation Program
On February 26, 2020, HCD issued a Notice of Funding Availability (NOFA) for the
Permanent Local Housing Allocation (PLHA) program. The PLHA NOFA makes
immediately available approximately $195 million to California jurisdictions on a formula
basis. The City of Santa Monica is allocated $547,516 of the available funding. In
addition, funding will be available in future years based on the PLHA revenue source.
HCD estimates that the City may be allocated up to $3,285,096 over five years.
PLHA funding is allocated non-competitively to entitlement and non-entitlement
jurisdictions that meet the threshold requirements. The requirements include
preparation and adoption of a spending plan for the funds (302(c)(4) Plan,
Attachment A) and authorization to submit the application (Attachment B). The other
threshold requirements include a compliant Housing Element and the submission of the
most recent Housing Element Annual Progress Report. As identified in the 302(c)(4)
Plan, the City will use the first year’s funding for a 58-residence, permanent supportive,
multifamily rental housing development. The development would include 57 residences
for households at or below 30 percent of Area Median Income (AMI) and a manager’s
residence for a household at or below 80 percent AMI. The City has four other
affordable housing developments in the predevelopment phase and plans to allocate
future years’ PLHA funding to multi-family rental housing developments proposed by
non-profit affordable housing developers requesting Housing Trust Fund loans. All funds
would be used in accordance with the City’s Housing Trust Fund Plan and Housing
Trust Fund Guidelines, as well as in accordance with the PLHA Final Guidelines.
Local Housing Trust Fund Program
On April 30, 2020, HCD issued a NOFA for the Local Housing Trust Fund program. The
LHTF NOFA makes available approximately $57 million in matching grants to Local
Housing Trust Funds. The City is eligible to apply for up to $5 million in matching grant
funds. Due to the scope of the City’s commitment of funds for affordable housing in
recent years from both the Measure GSH sales taxes and repayment of City loans by
3.I.e
Packet Pg. 262 Attachment: May 26, 2020 Council Staff Report (4648 : Affordable Housing Funding Opportunities)
3 of 4
the Redevelopment Successor Agency, the City’s application would likely be
competitive for the funding source.
Application forms are expected to be made available by HCD by the end of May.
With Council authorization (Attachment C), staff would complete and submit
an application. If the City is successful, funds would be used to supplement existing
amounts in the City’s Housing Trust Fund to finance affordable housing developments
in the predevelopment phase that are requesting or will request construction financing.
The City currently has five affordable housing developments in the predevelopment
phase. All funds would be used in accordance with the City’s Housing Trust Fund Plan
and Housing Trust Fund Guidelines, as well as in accordance with the LHTF Final
Guidelines.
Past Council Actions
Meeting Date Description
07/25/2017 (Attachment D) Housing Trust Fund Guidelines
07/24/2018 (Attachment E) Housing Trust Fund Plan
Financial Impacts and Budget Actions
The application for PLHA funding would allow the City to receive $547,516 in the current
calendar year and up to $3,285,096 over the next five fiscal years in State funding that
would be dedicated to increasing the supply of affordable housing in Santa Monica.
The application for LHTF funding would allow the City to apply for—and if successful, to
receive—up to $5 million in State funding that would be used to supplement existing
funding in the Housing Trust Fund to increase the supply of affordable housing in Santa
Monica. If awarded, staff would return to Council for specific budget actions.
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Packet Pg. 263 Attachment: May 26, 2020 Council Staff Report (4648 : Affordable Housing Funding Opportunities)
4 of 4
Prepared By: Dmitry Galkin, Senior Development Analyst
Approved
Forwarded to Council
Attachments:
A. Resolution Authorizing and Adopting the 302(c)(4) Plan
B. Resolution Authorizing PLHA Application
C. Resolution Authorizing LHTF Application
D. Housing Trust Fund Guidelines
E. Housing Trust Fund Plan
F. Written Communications
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Packet Pg. 264 Attachment: May 26, 2020 Council Staff Report (4648 : Affordable Housing Funding Opportunities)