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HomeMy WebLinkAboutRes HA-51 - PDHA Rental Rates AnnuallyPALM DESERT HOUSING AUTHORITY STAFF REPORT REQUEST: ADOPT RESOLUTION NO. HA- 51 RESCINDING RESOLUTION NO. HA-32, AND AMENDING THE PROCEDURE FOR SETTING AND IMPLEMENTING RENTAL RATES SUBMITTED BY: Janet M. Moore, Director of Housing Jessica Gonzales, Management Analyst DATE: March 14, 2013 CONTENTS: Resolution HA- 51 Resolution HA-32, adopted on August 24, 2006 Recommendation By Minute Motion that the Housing Authority: 1. Waive further reading and Adopt Resolution No. HA - 51 rescinding Resolution HA-32 amending the procedure for setting and implementing rental rates annually; and 2. Authorize the Executive Director to take any other action which he deems necessary to facilitate, establish and implement annual rent increases so long as such action is not inconsistent with the procedures in said Resolution. Executive Summary Approval of this request will amend the procedure for setting and implementing rental rates annually for Palm Desert Housing Authority ("Authority") owned and operated affordable rental units as well as eliminates the references to the former Palm Desert Redevelopment Agency ("Agency"). The Maximum Rent will now coincide with those published by the U.S. Department of Housing and Community Development ("HUD") for Riverside County and rent increases will now be implemented at vacancy or at lease renewal. Background On August 24, 2006, the Palm Desert Housing Authority Board adopted the Procedure for Setting Rental Rates ("Rent Policy") by Resolution No. HA-32. When adopted, the Rent Policy referenced the Agency owned units. On February 9, 2012, the City adopted Resolution No. 2012-07 designating the Authority as the successor housing entity for all housing activities formerly completed by the Agency. On October 11, 2012, the Palm Desert Housing Authority Board accepted the housing functions and assets transferred pursuant to Resolution No. HA-47. With the elimination of redevelopment and the designation of the Authority as successor housing entity, the Rental Staff Report Approval of the Procedure for Setting Rental Rates, Resolution HA- 51 March 14, 2013 Page 2 of 2 Policy has been amended to allow the procedure and implementation for setting rental rates annually to be adjusted as follows: 1. References to the Agency and its officers have been changed accordingly to the Authority and its officers. 2. With the Assets being transferred to the Authority, there are no longer any Agency owned rental units and the reference to such units has been amended to reference the Authority. 3. Maximum Rent has been amended to be set in accordance with the fair market rents in effect at the time for each unit type as published by the U.S. Department of Housing and Community Development ("HUD") for Riverside County. Rents were previously increased bi-annually in accordance with a survey of market rental rates and in the intermediate year between surveys, in accordance with the annual increase in area median income. This change will save approximately $8,000.00 every two years. 4. Implementation of Rental Increases has been amended to allow the full amount of the rental increase to be effective upon vacancy or at lease renewal. This change will provide consistency with the leasing of units. Staff recommends the Authority adopt the attached resolution rescinding Resolution HA-32, amending the procedure for setting and implementing rental rates annually for owned and operated affordable rental units and authorize the Executive Director to take any other action which he deems necessary to facilitate, establish and implement annual rent increases as long as it is not inconsistent with the procedures in said Resolution. Fiscal Impact There is a savings of approximately $8,000.00 every two years with this request. Submitted by: nzales, NMana)ement Analyst Paul S. Gibson, Director of Finance approval: M. Wohlmuth, Executive Director .anejM. Moore, Director of Housing tdY HOUSG AUTH ON MO /�. 0100 VERIFIED BY: IQO Original on file with CityJerk's Office G:\HOUSINGUESSICA GONZALES\HOUSING AUTHORITY\RENTAL RATES\SR- HA - AMENDING RESOL HA-32 RENTAL RATE POLICYV2 DOC RESOLUTION NO. HA - A RESOLUTION OF THE PALM DESERT HOUSING AUTHORITY RESCINDING RESOLUTION NO. HA-32, AND AMENDING THE PROCEDURE FOR SETTING RENTAL RATES AND THE IMPLEMENTATION THEREOF WHEREAS, the Palm Desert Housing Authority (the "Housing Authority") wishes to amend the procedure, 1) to set and implement annual rental rates and maximum rent for residential rental units owned and/or operated as affordable by the Palm Desert Housing Authority ("Authority Unit(s)") for the purpose of providing affordable housing to persons and families of low or moderate income and 2) to increase rents charged for Authority Units in accordance with such rates; NOW, THEREFORE, THE PALM DESERT HOUSING AUTHORITY HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. Setting Annual Rental Rates and Maximum Rent A. The Executive Director shall set annual rental rate amounts for Authority Units to be effective each year on July 1st or 30 days from the date that the area median income limits are published by the California Department of Housing and Community Development ("HCD"), whichever is later, in the following manner. For Authority Units acquired, developed, rehabilitated, or otherwise assisted, which are required to be available to and occupied by (a) persons and families whose income is between 20 percent and 65 percent of the area median income, or (b) by persons and families of low or moderate income, annual rental rates shall be set in accordance with the terms of that certain Stipulation for Entry of Judgment in Case No. Indio 51143, as subsequently amended (the "Stipulation") to adhere with state regulations adopted pursuant to California Health and Safety Code section 50052.5, 50053, 50079.5, 50093 and 50105 as they existed prior to 1990 and as interpreted at that time by Title 25 California code of Regulations, 6900 et seq., and any amendments made thereto. B. In no event shall the annual rental rate for any Authority Unit exceed the affordable rent for that unit as calculated in accordance with Health and Safety Code Section 50053 and as interpreted by Title 25 California code of Regulations, 6900 et seq., or exceed affordable rent as determined by any state, federal, or other public agency guidelines that provide supplemental rental assistance to the persons of that unit or on behalf of that unit. C. The Executive Director shall set maximum rent concurrently with the annual rental rates each year in the following manner: i. For all Authority Units acquired, developed, rehabilitated, or otherwise RESOLUTION NO. HA - assisted, which are required to be available at affordable housing cost to persons and families of low or moderate income, maximum rent shall be set in accordance with the fair market rents in effect at the time for each unit type as published by the U.S. Department of Housing and Community Development ("HUD") for Riverside County. ii. The Executive Director may conduct at any time, not to exceed more than once every other year, a survey of area market rental rates for rental units similar in size and unit mix to the Authority Units and at its discretion may adjust and set maximum rental rates in accordance with the survey results for the local area. For example, the market rental rate for a two -bedroom unit in a duplex may be established as the maximum rental rate for a two -bedroom Authority Unit in a duplex. iii. The Executive Director may establish maximum rental rates at an amount that is less than the market rental rate to compensate for an unusual property condition. Section 2. Implementation of Rental Increases A. For all Authority Units, after proper notice is given; i. The full amount of the rental rate increase shall be implemented upon vacancy or at lease renewal, except if the unit or the property on which the unit is located is in need of renovations, the rental rate increase may be deferred by the Executive Director until completion of the renovations or the increase(s) may be less than otherwise provided for pursuant to this Section. ii. Where the implementation affects public, federal or local rental assistance, or in instances where 12-month leases are required for other purposes, the full amount of the rental rate increase shall be implemented at lease renewal or as may otherwise be required in connection with such rental assistance. Section 3. Tenant income shall be calculated pursuant Title 25 California Code of Regulations, Section 6900 et seq. and adjusted for family size. Tenant income shall be sufficient to pay affordable rent as determined for that unit in accordance with Title 25 California Code of Regulations, Section 6900 et seq., the Stipulation or Health and Safety Code Section 50053. Section 4. Utility Allowances as prescribed in Health and Safety Code Section 50053, shall be set in accordance with the utility allowances in effect at the time the annual rental rates are established in accordance with Section 1 for each unit type as published by the Housing Authority of the County of Riverside ("HARivCO") P6402\0001\869149.6 G:\HOUSING\Jessica Gonzales\HOUSING AUTHORITY\ RENTAL RATES\Res - HA -Amending Resol HA-32 Rental Rate Policy.doc 2 RESOLUTION NO. HA - Section 5. The Executive Director may take any other action which he believes is necessary or desirable to implement the intent of this resolution so long as such action is not inconsistent with the terms hereof. PASSED, APPROVED, and ADOPTED by the Palm Desert Housing Authority, this 14th day of March, 2013, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Jan C. Harnik, Chairman PALM DESERT HOUSING AUTHORITY ATTEST: Rachelle D. Klassen, Secretary PALM DESERT HOUSING AUTHORITY P6402\0001\869149.6 G:\HOUSING\Jessica Gonzales\HOUSING AUTHORITY\ RENTAL RATES \Res - HA - Amending Resol HA-32 Rental Rate Policy.doc 3 RESOLUTION NO. HA-32 A RESOLUTION OF THE PALM DESERT HOUSING AUTHORITY RESCINDING RESOLUTION NO. HA-30, AND AMENDING THE PROCEDURE FOR SETTING RENTAL RATES AND THE IMPLEMENTATION THEREOF WHEREAS, the Palm Desert Housing Authority (the "Housing Authority") wishes to set forth a procedure for the Chief Administrative Officer or his designee (the "Chief Administrative Officer") to set and implement rental rates annually for units owned by the Palm Desert Redevelopment Agency ("Agency Units") and to increase rents charged for Agency Units in accordance with such rates; NOW, THEREFORE, THE PALM DESERT HOUSING AUTHORITY HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1. The Chief Administrative Officer shall set maximum rental rate amounts for Agency Units to be effective each year on July 1st in the following manner: A. For Agency Units acquired, developed, rehabilitated, or otherwise assisted, which are required to be available to and occupied by persons and families whose income is between 20 percent and 65 percent of the area median income, maximum rental rates shall be established in accordance with the terms of that certain Stipulation for Entry of Judgment in Case No. Indio 51143, as subsequently amended (the "Stipulation"). B. For all other Agency Units, (i) Immediately upon adoption of this Resolution, the Chief Administrative Officer shall set maximum rental rates as recommended by the appraisal analysis conducted by Sweet & Associates dated December 31, 2004 and on file in the office of the Housing Authority Secretary. (ii) Beginning in April of 2006, the Chief Administrative Officer shall cause to be conducted a bi-annual survey of area market rental rates for rental units similar in size and unit mix to the Agency Units and shall set maximum rental rates in accordance with the survey results. For example, the market rental rate for a two -bedroom unit in a duplex may be established as the maximum rental rate for a two -bedroom Agency Unit in a duplex. (iii) In the intermediate year between surveys, the Chief Administrative Officer may increase maximum rental rates by the same percentage as the percentage increase from the previous year to the current year in area median income. RESOLUTION NO. HA-32 (Iv) The Chief Administrative Officer may establish maximum rental rates at an amount that is less than the market rental rate to compensate for an unusual property condition. (v) In no event shall the maximum rental rate for any Agency Unit exceed the affordable rent for that unit as calculated in accordance with Health and Safety Code Section 50053. Section 2. Implementation A. For those Agency Units described in Section 1.A. hereof, after proper notice has been given, the Chief Administrative Officer shall set the rental rate for each unit determined pursuant to Section 1.A. B. For all other Agency Units, after proper notice is given, the Chief Administrative Officer shall set the rental rate for each unit at the maximum rental rate determined for that unit. Any rental rate increase shall be implemented in the following manner. (I) For vacant units, the full amount of the rental rate increase shall be implemented Immediately. (ii) For occupied units, (a) if the increase to the amount the tenant will pay per month is less than or equal to $50, the full amount of the rental rate increase shall be implemented at lease renewal, and (b) if the increase to the amount the tenant will pay per month is more than $50, the rental rate shall be Increased by $50 at lease renewal and by $50 every six months thereafter until the rental rate equals maximum rental rate, or at the two-year anniversary of the original implementation of the rental rate the balance of the entire rental rate increased will be paid, and (c) if the unit or the property on which the unit is located is in need of renovations, the rental rate increase may be deferred until completion of the renovations or the increase(s) may be less than otherwise provided for pursuant to subparagraphs (I) and (ii) of this paragraph B. RESOLUTION NO. HA-32 (d) Where the implementation affects public, federal, or local assistance, or in instances where 12-month leases are required for other purposes, and the increase to the amount the tenant will pay is less than $50 per month, the balance of the entire rental rate increase will be paid. Section 3. Tenant income In all cases shall be adjusted for family size and shall be sufficient to pay affordable rent as determined for that unit in accordance with the Stipulation or Health and Safety Code Section 50053, Section 4. The Chief Administrative Officer may take any other action, which he believes is necessary or desirable to implement this resolution so long as such action is not Inconsistent with the intent hereof. PASSED, APPROVED and ADOPTED by the Palm Desert Housing Authority, this 24th day of August, 2006, by the following vote, to wit: AYES: BENSON, KELLY, SPIEGEL, and FERGUSON NOES: NONE ABSENT: NONE ABSTAIN: NONE ATTEST: JIM F, CHAIRMAN CH LLE D: KLASSE1I, SECRETARI�' PALM DESERT HOUSING AUTHORITY