CC - Item 5B - Presentation on Affordable Housing - Tools, Programs, and OptionsROSEMEAD CITY COUNCIL
STAFF REPORT
TO: THE HONORABLE MAYOR AND CITY COUNCIL
FROM: BEN KIM, CITY MANAGER
DATE: MARCH 14, 2023
SUBJECT: PRESENTATION ON AFFORDABLE HOUSING -TOOLS, PROGRAMS,
AND OPTIONS
SUMMARY
At the request of Mayor Pro Tem Ly, this presentation item is to discuss affordable housing, the
current tools, programs, and possible options.
STAFF RECOMMENDATION
It is recommended that the City Council discuss and provide direction to Staff.
ENVIRONMENTAL ANALYSIS
The proposed action does not constitute a project under the California Environmental Quality
Act ("CEQA"), and it can be seen with certainty that it will have no impact on the environment.
As such, this matter is exempt under CEQA.
FISCAL IMPACT
None.
STRATEGIC PLAN IMPACT
Prom
PUBLIC NOTICE PROCESS
This item has been noticed through the regular agenda notification process.
Attachment A: Power Point Presentation
AGENDA ITEM 5B
Presentation on
Affordable Housing
TOOLS - OPTIONS - PROGRAMS
A. What is affordable housing?
HUD: Affordable housing is generally defined as
housing on which the occupant is paying no
more than 30 percent of gross income for housing
costs, including utilities.
hf f ps:/ /arch ives. h ud.aov/loca I/nv/aoodstories/2006-04-06alos.cf m
U.S. OEEARTMENT OF HOD
STATE:CALIFRHIA -- - -- - - - - - -- 2022 NJUSTM EOl2 INCOME LIMITS
PROGN.3N 1 PEN60N 2 P6N8pN 3 PERSON 4 EERSON 5 PERSON 6 PEP 7 PERSOR 5 68RBON
30% LTMIT9
25050
26600
32200
35750
30650
41500
44350
49200
R2 LOW
41700
47650
53600
$9550
6435D
69100
7385D
76650
603 L1M7TS
50040
57190
64320
7146D
77220
U92D
98620
94380
i iNCOM
66730
76230
83600
95300
102950
110530
11830D
123800
Section 6932. 2022 Income Limits
Number of Persons in Household: 1 2 3 4 5 6 7 8
Last page instructs how to use income limits to determine applicant eligibility and calculate affordable housing cost and rent
B. Who Qualifies for Affordable Housing?
Example: Rental / Ownership 0
Assumptions:
► HUD -No more than 30% of gross income for hous, costs.
An
Calculator
► 4 persons household.
► $95,300 max income.
► 30%= $28,590 annual orMW2 monthly.
Monthly payrna d Purchase budget
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- Loan lend
Interest
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Market Summary
22
Market Rent
The median rent for all bedrooms and all
pmFerty types in Rosemead, CA is $3,100.
rent per unit
Median Rent
Month -Over -MaMM1 Change
Year Oser-Year Change
$39100
+$200
+$500
Shrine'. Allow Rentals Data
AVallable Rentals
22
Market Rent
Affordable Rent
rent per unit
$
3,100
$
2,182 $
- Revenue 70 -unit property
$
217,000
$
152,740 $
AVallable Rentals
22
Difference
(918
Month
(64,260
Month
(771.1201
Annual
Q
O MIi El
ome
Anemias
Rosemead Key Takeaways
Typical Home Values: $786,372
1 -year Value Change:+5.3%
(DdW[hrougM1 January 31, 20231
Market Sales Price I Affordable Household Loan City Affordable Subsidy (HOME)
$ 786,372 $ 230,000 $ 283,0C
Total (Loan +SubsIdl $ 518,OC
Dlfforonco Waroot—Affordablel A (96837'
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Rosemead Key Takeaways
Typical Home Values: $786,372
1 -year Value Change:+5.3%
(DdW[hrougM1 January 31, 20231
Market Sales Price I Affordable Household Loan City Affordable Subsidy (HOME)
$ 786,372 $ 230,000 $ 283,0C
Total (Loan +SubsIdl $ 518,OC
Dlfforonco Waroot—Affordablel A (96837'
D. Tools = Programs = Options
► City Tools -Funds:
► HUD HOME Funds
► HUD CDBG Funds
Annual -Approximately $700,000
Current availability for housing related - $500,000
► State Permanent Local Housing Allocation (PLHA) Funds
Current allocation of $1.4M
Allocation plan (Years 2019, 2020, 2021) submitted to State HCD for approval
Two additional years (2022 & 2023) of approximately $500K annual
anticipated
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Annual
-Approximately $300,000
Current
availability for housing related
- $1.6M entitlement funds
► HUD CDBG Funds
Annual -Approximately $700,000
Current availability for housing related - $500,000
► State Permanent Local Housing Allocation (PLHA) Funds
Current allocation of $1.4M
Allocation plan (Years 2019, 2020, 2021) submitted to State HCD for approval
Two additional years (2022 & 2023) of approximately $500K annual
anticipated
7
D. Tools = Programs = Options
► City Tools - Programs:
► Homeownership Assistance Program - Silent second loan with zero percent
interest and no monthly payment for 30 -years. With 30 -year term
occupancy compliance by the qualifying owner, the loan becomes
forgivable. If the term is not met (sale, death, refinance for cash -out, or no
longer lives on the property), share of the appreciation and loan becomes
due.
► City purchase property with HUD and State funds for affordable housing
production. Would require joint venture with an affordable housing
developer.
► City purchase existing residential unit(s) with HUD and State funds and either
rent at affordable price (e.g., housing voucher) or sale to an affordable
buyer.
► Density Bonus (Chapter 17.84) - Pursuant to State Law.
► Very Low -Income - Density bonus of 20% to 35%
► Low -Income - Density bonus of 20% to 35%
► Moderate -Income - Density bonus of 5% to 35%
► Small Lot Ordinance - Lower sales price from lot size efficiency.
D. Tools = Programs = Options
► City Tools -Programs (cont.).:
► Freeway Corridor Mixed -Use Overlay Community Benefits Program - 25
points for each veteran unit, which would be used to increase dwelling
units per acre.
► 6th Cycle Housing Element - Approved by State HCD, updates to the
zoning code will be implement to facilitate affordable housing.
Reduce R-3 parking standards to mitigate development costs and maximize
densities.
MUDO and R-3 zones to minimize time and costs in the permitting process.
Allow manufactured housing in the R-1 zone by -right in compliance with
State law.
Adopt SB 35 (Streamlining Provisions) to allow streamlined ministerial approval
for development Wth at least 10% affordability.
D. Tools = Programs = Options
No. City Tools -Programs (cont.).:
► AB 2011 - CEQA exemption and ministerial approval process for
multifamily housing developments on sites within a zone where office,
retail or parking are the principally permitted use with the requirement
of paying prevailing wages. The law provides different qualifying
criteria: (1) for 100% affordable projects, and (2) for mixed -income
projects (15% below market rate) located in "commercial corridors."
► SB 6 - Residential development on sites currently zoned and designated
for commercial or retail uses with all projects required to either be, (1)
100% residential projects, or (2) mixed-use projects where at least 50% of
the square footage is dedicated to residential uses. SB 6 projects are
not exempt from CEQA and have no affordability requirement but are
required to pay prevailing wages and utilize a "skilled and trained
workforce."
► AB 1551 - Grant concessions to mixed-use developments within a half
mile of public transit if the commercial development provides a
minimum of 30% low income or 15% very low-income units.
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D. Tools = Programs = Options
No. Possible New Options:
► Inclusionary Housing
Ordinance
- Require
new residential
projects to set
aside a percentage
of units for
affordable
housing.
► General Plan Amendment and Rezoning to increase residential
densities. Currently:
Low Density Residential - 0-6 du/ac
Medium Density Residential - 0-12 du/ac
High Density Residential -0-30 du/ac
Mixed Use Residential/Commercial - 30 du/ac; 3 stories
Mixed Use Residential/Commercial - 60 du/ac; 4 stories
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D. Tools = Programs = Options
► Possible New Options (cont.):
► Join Regional Housing Trust / SGVRHT - Join Powers authority to fund and
finance the planning construction of homeless housing, and extremely low,
very low, and low-income housing projects.
► Affordable Multifamily Housing Bonds (CaIPFA) - Provides for-profit
developers access to tax-exempt bonds to finance low-income multifamily
and senior housing projects. A qualified developer can finance a project at
a lower interest rate than available through conventional financing because
the interest paid to bondholders is exempt from federal income tax. In
addition, the use of tax-exempt bonds also facilitates eligibility for the
federal government's 4% Low Income Housing Tax Credit Program. 20% to
40% affordable units required.
► Section 108 HUD Loan - Provides CDBG recipients with the ability to leverage
their annual grant allocation to access low-cost, flexible financing for
economic development, housing, public facility, and infrastructure projects.
Pledge current and future CDBG allocations and additional security to
repay the loan. Rosemead's Loan Authority is $3,544,905 (2022).
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Questions?
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