SR 05-09-2023 5G 407-000-03 / 407-000-11
City Council
Report
City Council Meeting: May 9, 2023
Agenda Item: 5.G
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To: Mayor and City Council
From: Danielle Noble, Acting Director, Community Services Department, Housing
and Human Services
Subject: Adoption of a Resolution Authorizing Application for Grant Funds for State
Affordable Housing Funding Opportunity
Recommended Action
Staff recommends that the City Council:
1. Adopt the attached resolution authorizing the application for grant funds in
an amount not to exceed $5,000,000 from the California State Department
of Housing and Community Development for the 2023 round of Local
Housing Trust Fund Program Matching Grant Funding (Attachment A).
2. Authorize the City Manager to execute all necessary documents to apply
for the grant, accept the grant, if awarded, and accept all grant renewals, if
awarded.
3. Adopt a finding of no possibility of significant effect pursuant to Section
15061(b)(3) (Common Sense Exemption) of the California Environmental
Quality Act (CEQA) Guidelines.
Summary
The California Department of Housing and Community Development (HCD) offers
an annual opportunity for local public agencies to apply for matching grant funding to
finance affordable housing development. The Local Housing Trust Fund (LHTF)
program offers awards not to exceed $5 million through a competitive application
process. Santa Monica was awarded $5 million in two of the LHTF program’s prior
application rounds which took place in 2020 and 2021. Staff seeks Council
authorization to apply for a 2023 LHTF award for an additional $5 million. The LHTF
program requires the City to match LHTF awards on a dollar-for-dollar basis. Thus, a $5
million LHTF award would be matched with either City-owned land, available City
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Housing Trust Funds, or a combination of both. The LHTF award and City match 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
On March 7, 2023, HCD again issued a Notice of Funding Availability (NOFA) for the
LHTF program. The LHTF NOFA makes available approximately $53 million in
matching grants to local housing trust funds, such as Santa Monica’s. The timeframe
for submitting 2023 applications is between April 19 and May 17, 2023. With Council
authorization (Attachment A), staff would apply. If the City is successful, funds would
be used to finance future affordable housing developments. The City would fulfill the
LHTF program requirement to match LHTF awards on a dollar-for-dollar basis by
either contributing City-owned land, providing matching City Housing Trust Funds, or
a combination of both, depending on the funding needs of future developments. All
funds would be used in accordance with the City’s Housing Trust Fund Plan
(Attachment B) and Housing Trust Fund Guidelines (Attachment C), as well as in
accordance with the LHTF program guidelines.
Environmental Review
Authorization of the application for LHTF grant funding would have no possibility of
significant effect on the environment, and therefore, is exempt pursuant to Section
15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act
(CEQA) Guidelines. If awarded, the use of LHTF grant funding for future affordable
housing developments would be subject to environmental review at the time they are
proposed.
Past Council Actions
Meeting Date Description
07/24/2018 (Attachment B) Housing Trust Fund Plan
07/25/2017 (Attachment C) Housing Trust Fund Guidelines
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Financial Impacts and Budget Actions
The 2023 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. The LHTF program requires the City to match LHTF awards on
a dollar-for-dollar basis. The City will meet the Matching Funds requirement of the
LHTF Program by contributing either City-owned land with of a value of at least $5
million, by using $5 million in funds that already exist in the Redevelopment
Replacement Housing Trust Fund, or a combination of land and Housing Trust
Funds valued at $5 million.
Prepared By: Ayala Scott, Senior Development Analyst
Approved
Forwarded to Council
Attachments:
A. Draft 2023 LHTF Resolution
B. Housing Trust Fund Guidelines
C. Housing Trust Fund Plan
D. ITEM.5.G.Written Comments
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City Council Meeting: May 9, 2023 Santa Monica, California
RESOLUTION NUMBER _______ (CCS)
(City Council Series)
A RESOLUTION OF THE CITY COUNCIL OF 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 $53 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
March 7, 2023, 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; and
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 limitation,
all rules and laws regarding the LHTF Program, as well as any and all contracts City may have
with the Department.
5.G.a
Packet Pg. 421 Attachment: Draft 2023 LHTF Resolution [Revision 7] (5689 : Resolution for Local Housing Trust Funds)
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 (Exhibit A) 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.
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:
DOUGLAS SLOAN
City Attorney
5.G.a
Packet Pg. 422 Attachment: Draft 2023 LHTF Resolution [Revision 7] (5689 : Resolution for Local Housing Trust Funds)
Adopted and approved this 9th day of May 2023.
Gleam Davis, Mayor
I, Denise Anderson-Warren, City Clerk of the City of Santa Monica, do hereby certify that
Resolution No. _______(CCS) was duly adopted at a meeting of the Santa Monica City
Council held on the 9th day of May 2023, by the following vote:
AYES:
NOES:
ABSENT:
ATTEST:
Denise Anderson-Warren, City Clerk
5.G.a
Packet Pg. 423 Attachment: Draft 2023 LHTF Resolution [Revision 7] (5689 : Resolution for Local Housing Trust Funds)
Exhibit A
City of Santa Monica Housing and Human Services Division
Local Housing Trust Fund
Expenditure Plan
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. To meet the Matching Funds requirement of the LHTF Program,
the City will contribute City-owned land and/or matching funds from the Redevelopment
Replacement Housing Trust Fund, for which the funding sources are:
1) transaction and use taxes approved by Measure GSH and
2) 80% of the loan repayments owed by the former Santa Monica Redevelopment Agency to the
City, or other locally-generated funds, which are dedicated and restricted for housing use solely
by City action and not by state or federal law.
5.G.a
Packet Pg. 424 Attachment: Draft 2023 LHTF Resolution [Revision 7] (5689 : Resolution for Local Housing Trust Funds)
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
Amended 7-27-2021
(* 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
5.G.b
Packet Pg. 425 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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
20
24
27
29
32
HOME Trust Fund
CDBG Housing Trust Fund
Citywide Housing Trust Fund
Low-Moderate Income Housing Asset Trust Fund
TORCA Housing Trust Fund
Redevelopment Replacement Housing Trust Fund
Local Housing Trust Fund
34
VIII.EXHIBITS 37
Exhibit A Definitions
Exhibit B HOME Program Subsidy Limits
Exhibit C Rental Housing Loan Application (with checklist)
Exhibit D Green Affordable Housing Checklist
36
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Packet Pg. 426 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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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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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(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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Packet Pg. 429 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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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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Packet Pg. 430 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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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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Packet Pg. 431 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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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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Packet Pg. 432 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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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 C ouncil 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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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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Packet Pg. 461 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
Addition to the Housing Trust Fund Guidelines
July 27, 2021
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, Section
10327(c)(7)(A) and (B) - commonly referenced as TCAC
•Replacement reserves – An account to fund new building materials and
systems 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’s
operation.
•An operating reserve shall be funded in an amount equal to three
months of estimated operating expenses, debt service, and reserve
deposits under stabilized occupancy.
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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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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.
5.G.b
Packet Pg. 465 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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.
5.G.b
Packet Pg. 466 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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
5.G.b
Packet Pg. 467 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
EXHIBIT C
Housing Trust Fund Loan Application
(includes Checklist)
5.G.b
Packet Pg. 468 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
City of Santa Monica
Housing and Economic Development Department
Housing Division
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Rental Housing Loan Application Page 1
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)
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
5.G.b
Packet Pg. 469 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
City of Santa Monica
Housing and Economic Development Department
Housing Division
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Rental Housing Loan Application Page 2
Santa Monica Housing Division
____________________________________________________________________________
5.G.b
Packet Pg. 470 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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Rental Housing Loan Application Page 3
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.
5.G.b
Packet Pg. 471 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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Rental Housing Loan Application Page 4
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 ________________________________________________________________
5.G.b
Packet Pg. 472 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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Rental Housing Loan Application Page 5
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 ___________________________
5.G.b
Packet Pg. 473 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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Rental Housing Loan Application Page 6
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
5.G.b
Packet Pg. 474 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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Rental Housing Loan Application Page 7
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.
5.G.b
Packet Pg. 475 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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Rental Housing Loan Application Page 8
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.
5.G.b
Packet Pg. 476 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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Rental Housing Loan Application Page 9
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#
5.G.b
Packet Pg. 477 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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18.docx Rental Housing Loan Application - Special Supplement Page 1
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:
5.G.b
Packet Pg. 478 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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Santa Monica Housing Division
Units Demolished:
5.G.b
Packet Pg. 479 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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18.docx Rental Housing Loan Application - Special Supplement Page 3
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)?
5.G.b
Packet Pg. 480 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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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
5.G.b
Packet Pg. 481 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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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.
5.G.b
Packet Pg. 482 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
Checklist
Rental Housing Loan Application
Santa Monica Housing Division
Page 1
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Rental Housing Loan Application Checklist
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
5.G.b
Packet Pg. 483 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
Checklist
Rental Housing Loan Application
Santa Monica Housing Division
Page 2
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Rental Housing Loan Application Checklist
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
5.G.b
Packet Pg. 484 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
Checklist, cont.
Page 3
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Rental Housing Loan Application Checklist
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.
5.G.b
Packet Pg. 485 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
Checklist, cont.
Page 4
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Rental Housing Loan Application Checklist
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
5.G.b
Packet Pg. 486 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
EXHIBIT D
Green Affordable Housing Checklist
5.G.b
Packet Pg. 487 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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.
5.G.b
Packet Pg. 488 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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.
5.G.b
Packet Pg. 489 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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.
5.G.b
Packet Pg. 490 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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.
5.G.b
Packet Pg. 491 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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.
5.G.b
Packet Pg. 492 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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.
5.G.b
Packet Pg. 493 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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.
5.G.b
Packet Pg. 494 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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
5.G.b
Packet Pg. 495 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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.
5.G.b
Packet Pg. 496 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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.
5.G.b
Packet Pg. 497 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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
5.G.b
Packet Pg. 498 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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
5.G.b
Packet Pg. 499 Attachment: Housing Trust Fund Guidelines (5689 : Resolution for Local Housing Trust Funds)
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
5.G.c
Packet Pg. 500 Attachment: Housing Trust Fund Plan (5689 : Resolution for Local Housing Trust Funds)
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
5.G.c
Packet Pg. 501 Attachment: Housing Trust Fund Plan (5689 : Resolution for Local Housing Trust Funds)
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.
5.G.c
Packet Pg. 502 Attachment: Housing Trust Fund Plan (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 503 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 504 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 505 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 506 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 507 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 508 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 509 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 510 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 511 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 512 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 513 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 514 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 515 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 516 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)
ITEM.5.G
May 9, 2023
ITEM.5.G
May 9, 2023
5.G.d
Packet Pg. 517 Attachment: ITEM.5.G.Written Comments (5689 : Resolution for Local Housing Trust Funds)