HomeMy WebLinkAboutReport Final Placement Housing Plan for Sagecrest ApartmentsPALM DESERT REDEVELOPMENT AGENCY
REQUEST:
SUBMITTED BY:
DATE:
CONTENTS:
Recommendation
STAFF REPORT
on
RECEIVE AND FILE THE FINAL REPLACEMENT HOUSING PLAN FOR
SAGECREST APARTMENTS
Jessica Gonzales, Management Analyst - Housing (�
January 27, 2011
Final Sagecrest Apartments Replacement Housing Plan
By Minute Motion, that the Agency Board receive and file the
Housing Plan for the Sagecrest Apartments.
Background
Final Replacement
v z
0
Pursuant to Health and Safety Code Section 33413, the Agency adopted, substantially as to
form, Resolution No. 575 approving a Replacement Housing Plan ("RHP") for Sagecrest
Apartments. The RHP adopted includes: (1) the general location of housing to be rehabilitated,
developed, or constructed; (2) an adequate means of financing such rehabilitation,
development, or construction; (3) a finding that the replacement housing does not require the
approval of the voters pursuant to Article XXXIV of the California Constitution, or that such
approval has been obtained; (4) the number of dwelling units housing persons and families of
low or moderate income planned for construction or rehabilitation; and (5) the timetable for
meeting the Plan's relocation, rehabilitation, and replacement housing objectives.
At the time the RHP was prepared, two of the fourteen units at Sagecrest were occupied by
households of low and moderate income. The tenants occupying these two units vacated the
units on May 7, 2010 and June 3, 2010 and the incomes were reevaluated at that time.
After the RHP was adopted, staff received the final income eligibility from the households.
Based on the final household income eligibility, it was necessary to amend one of the unit
income category replacements from low to moderate. Staff therefore recommends that the
Agency Board receive and file the Final RHP for Sagecrest as presented herein to comply with
the requirements of Health and Safety Code Section 33413.
Fiscal Analvsis
There is no further fiscal impact anticipated at this time with the exception of the previously
approved consultant costs for the development of the Plans.
Submitted b Department Head:
es is Gonzales, M nag ent Analyst — Housing 4anet oore, Director of Housing`
Approval:
\A2to- l
J in cCarthy, ACM Re velopment J M. Wohlmuth, Executive Director
Garda SfNG\RENTAUSagecrest Apts\Staff Report Replacement Plan\Sakecrest Replacement Housing Plan -Staff ReDort.doc
m
t a
FINAL Replacement Housing
Plan
for the Property Located at
73-775 Santa Rosa Way in
the City of Palm Desert
Prepared for:
City of Palm Desert Redevelopment Agency
73510 Fred Waring Drive
Palm Desert, CA 92260-2524
Repared by:
PMC.4'
1590 D Rvv AvE, Su iTE 120
Dw,s CA 95618
J%NUARY 2011
TABLE OF CONTENTS
Introduction........................................................................................................................................................1
Unitsto Be Replaced........................................................................................................................................2
AnnualIncome Restrictions.............................................................................................................................3
Location Of Replacement Housing...............................................................................................................3
Financing the Replacement Housing............................................................................................................4
Non -Applicability of Article XXXIV of the California Constitution............................................................4
Time Table for Replacement Housing...........................................................................................................4
Summary.............................................................................................................................................................5
Addendum 1 - Expected Location of income -Restricted Replacement Units.....................................6
Li ST O F TABLES
Table 1: Replacement Housing Requirements by Bedroom Size & Income Level ...........................2
Table 2: Housing Eligibility by Annual Income Level...............................................................................3
Table 3: Affordable Housing Projects/Banked Units & Bedrooms........................................................4
S%waest Apartments City of Palm Desert
Re#acement Housing Flan ..nary 2011
INTRODUCTION
This Replacement Housing Plan ("Replacement Housing Plan") is being prepared on behalf of the
Palm Desert Redevelopment Agency ("Agency") in conjunction with the demolition of fourteen
multi -family unit property and redevelopment of the property currently known as the Sagecrest
Apartments (the "Project"). The Project is located at 73-775 Santa Rosa Way (also known as 44200
San Pascual Avenue) in Palm Desert, California. Attachment 1 shows the location of the Project. The
Agency owns the property.
This Replacement Housing Plan (the 'Plan") has been prepared by the Agency as a result of the
planned removal of the 14 units described above and in'order to satisfy the requirements for
replacement housing contemplated under the Community Redevelopment Law. The Agency
intends to make this Replacement Housing Plan available for review and comment.
This Plan describes the following, per Community Redevelopment Law ("CRL"):
• The general location of the replacement housing (see Section D below);
• An adequate means of financing the replacement housing (see Section E below);
• A finding that the replacement housing is in compliance with Article XXXIV of the California
Constitution (see Section G below);
• The number of replacement housing units planned for construction and rehabilitation (see
Section D below); and
• The timetable for meeting the replacement housing objectives (see Section F below).
The Agency's goal in preparing this Replacement Housing Plan is to demonstrate that providing
replacement housing in accordance with the requirements of federal law and the CRL is
feasible.
Section 33413(a) of the Community Redevelopment Law (Health and Safety Code Section 33000, et sea.)
requires that whenever dwelling units housing persons and families of low or moderate income are
destroyed or removed from the low and moderate income housing market as part of a
redevelopment project, which is subject to a written agreement with a redevelopment agency
or where financial assistance has been provided, the agency shall within four years of the
destruction or removal, rehabilitate, develop, construct, or cause to be rehabilitated,
developed, or constructed, for rental or sale to persons and families of low or moderate income, an
equal number of replacement dwelling units that have an equal or greater number of bedrooms as
those destroyed or removed units at affordable housing costs within the territorial jurisdiction of the
agency. When dwelling units are removed after January 1, 2002, 100% of the replacement dwelling
units shall be available at affordable housing cost to persons in the same or a lower income category,
as the persons displaced from those destroyed or removed units.
Section 33413.5 of the Community Redevelopment Law requires an agency to adopt a
replacement housing plan whenever the agency executes an agreement for acquisition of real
property, or an agreement for the disposition and development of property or an owner
participation agreement which would lead to the destruction or removal of dwelling units from the
low and moderate income housing market. The plan shall identify the impacts that a particular
redevelopment project will have on the community's supply of low and moderate income housing
Sagecrest Apartments City of Palm Desert
Replacement Housing Plan .bnuary 2011
and detail the measures that the agency will take to ensure that the appropriate replacement
housing is produced within the four year time limit.
Replacement Units must have an equal or greater number of bedrooms as the removed units. The
replacement units must be within the agency's jurisdiction and in standard condition, and must be
affordable to low and moderate income households, for the longest feasible time, as determined by
the agency, but for not less than 45 years for ownership units and 55 years for rental units.
U N I TS TO BE REPLACED
Two of the fourteen units to be removed have been identified as affordable, low to moderate -
income households. These units were occupied by low and moderate income tenants at the
time of property acquisition and vacated on May 7, 2010 and June 3, 2010. Further, at the time
of property acquisition, two units were vacant and determined to be not habitable. Ten units
were vacated following property acquisition and were not re -rented, as they were also
determined to be not habitable. Two of the 14 dwelling units to be removed have been
determined to be affordable units and, per the Community Redevelopment Law, both units shall
be replaced with dwelling units having an equal or greater number of bedrooms. Both units to be
replaced are two -bedroom units. As a result, the replacement units must consist of at least four
bedrooms. Based on the income levels of the persons displaced from the units, one of the
replacement units must be available at affordable housing cost to a very -low income household
and one of the replacement units must be available at affordable housing cost to a moderate
income household.
The units are anticipated to be removed in the year 2010. Therefore, all replacement units must
be available by 2014, within 4 years after removal of the units.
Table 1 defines the replacement housing obligation by income level. The numbers under each
household income category indicate the total units to be replaced and the numbers in parenthesis
indicate the total number of bedrooms destroyed for each income level.
TABLE 1:
PIWLACEM ENT HOUSING Ftmi mENTSBy BEDROOM SIZE& INCOME LEVEL
Unit Size
Two Bedroom
Sagecrest Apartments
ReWacement HousfngPfan
Very -low I ncome Low I ncome Moderate I name
1 0 1
(2) (0) (2)
Totals
(4)
City of Palm Desert
.hnuary 2011
AN N UAL INCOME RJESrFICTIO NS
California Health and Safety Code Sections 50079.5 and 50105 provide that the moderate, low
and very -low income limits established by the U. S. Department of Housing and Urban Development
("HUD") are the state limits for those income categories. Sections 50079.5 and 50105 direct the
Department of Housing and Community Development ("HCD") to publish the income limits. The
following figures, shown in Table 2, are approved for use in the County of Riverside to define and
determine housing eligibility by income level:
TABLE 2:
HOUSNG EUGIBILITYBYANNUAL INCOME LEvEL
Income Category 11 Person 12 Person 3 Person 4 Person 5 Person 6 Person 7 Person 18 Person
Extremely Low
(30% of Median)
14,000
16,000
18,000
20,000
21,600
23,200
24,800
I 26,400
e
(50%Very
of median)
23,300
26,650 I
29,950
33,300
35,950
38,650
41,300
I 43,950
Lower
37,300
I 42,650 I
47,950
53,300
57,550
I 61,850
66,100
I 70,350
Median
45,150
51,600 I
58,050
64,500
69,650
I 74,800
80,000
I 85,150
Moderate I
54,200
I 61,900 I
69,650
77,400 I
83,600
I 89,800
96,000
1102,150
Area Median Income: $64,500
SOURCE HCD, April 2009.
LOCATION OF RffLAcEmENT HOUSING
The Agency has several options available to provide replacement housing, including acquisition,
rehabilitation, new construction, and the allocation of "banked" dwelling units from prior
development activity. The Agency has previously funded or caused to be developed, affordable
housing projects that provide surplus dwelling units and bedrooms that can be allocated by the
Agency for future housing obligations. The Agency has a number of "banked" dwelling
units/bedrooms to satisfy the replacement housing obligation. Such units together with the
approved units that have not yet been constructed, (identified in Table 3 and Addendum 1)
constitute a sufficient number of replacement units.
As described in Table 3, the following affordable housing units/bedrooms have been developed, or
are planned to be developed by 2010, within the Agency's jurisdiction. All such units are/will be
available at an affordable housing cost to low or moderate income households and subject to a
restrictive covenant ensuring such affordability for not less than 55 years for rental units and 45 years
for owner occupied units. Addendum 1, at the end of the Plan, outlines the locations or
proposed locations of these affordable units.
Sagecrest Apartments City of Palm Desert
Rleptacement Housng Ran .hnuary2011
3
TABLE 3:
AFFORDABLEHou9NG PRoiErTSIBANKED UNITS& BIDRooMS
Very Low Moderate
Unit Size Income Low I ncome Income
Net Banked (Existing) Units/ No. of Bedrooms 3/9 0/0 10/20
Projects U nits/Bedrooms to be provided 010
0/0 23l32
(Approved but not yet constructed)
Required Replacement Units/ No. of Bedrooms 1/1 0/0 1/2
FINANCING THE RsPLAcEm ENT HOUSING
The Agency is authorized to finance its activities with moneys from various sources, including the
City of Palm Desert, State of California, United States Government, property tax increment funds,
interest income; Agency bonds, or other available sources.
The existing units to be used for replacement units, have been acquired, constructed or
rehabilitated with various funding sources including tax increment funds; below market rate
financing through the sale of tax exempt mortgage revenue bonds; redevelopment twenty percent
set -aside funds; and developer funds. Funding for the development of affordable housing units
identified in the preceding section as 'approved but not yet constructed' may utilize a variety of
sources including: State or Federal grants and loans, tax increment funds; below market rate
financing through the sale of tax exempt mortgage revenue bonds; redevelopment twenty percent
set -aside funds; and developer funds. Specific funding for future replacement housing units may be
through the use of any combination of the above described methods and sources. As replacement
units, the Agency may count units developed by private developers pursuant to the City's Density
Bonus program provided that units are subject to a restrictive affordable housing covenant
enforceable by the Agency.
(VON APPUCABILITYOFARTICLE)OMVOFTHECAUFORNIACONsnTUTION
It is hereby found and determined that the replacement housing identified in this replacement
housing plan does not require approval of the voters of the City of Palm Desert pursuant to
Article XXXIV of the California Constitution. A portion of the housing identified in this replacement
housing plan is not subject to the voter approval requirements of Article XXXIV because such housing
is or will be privately owned, not exempt from real property taxes by reason of public ownership, and
not financed with direct long term financing from a public body. In addition, the Agency will not
"develop, construct, or acquire" housing as described in Section 1 of Article XXXIV of the California
Constitution because in providing assistance to developers, the Agency will only monitor
construction or rehabilitation of the project and compliance with conditions of the assistance to
the extent of carrying out routine governmental functions, performing conventional activities of a
lender, and imposing constitutionally mandated or statutorily authorized conditions.
Sagecrest Apartments City of Palm Desert
RRlep/acernent Housing Fran „hnuary 2011
Ti M E TABLE FO R REPLAam EN T H O US N G
The Agency has provided a considerable degree of continuing support in the construction
and/or rehabilitation of replacement housing units sufficient to address the replacement
requirements of affordable housing discussed in this Plan. It is the intent of the Agency to use
"banked" previously developed housing units as well as housing units that have been approved
but not yet constructed to fulfill its replacement housing requirement.
The Agency acknowledges that replacement housing units must be affordable in the same, or
lower income categories than those being removed from the low and moderate income
housing market and will ensure that this result is realized.
Further, any units developed as replacement housing units will be completed within four years and will
remain income -restricted for the appropriate period as required by law.
SUMMARY
In summary, a total of 28 bedrooms in 14 dwelling units will be removed; four bedrooms in two
affordable dwelling units will be replaced.
Based on the 100% replacement criteria by income level, the Agency through a variety of
replacement housing options will replace the four bedrooms affordable to low to moderate
income households by using previously developed housing units as well as units that have been
approved but not yet constructed. The result of the above actions will yield the required number
of replacement dwelling units as mandated under Community Redevelopment Law.
The Agency recognizes its legal and community responsibilities in this matter and will make a sincere,
good -faith effort to accomplish these goals. The Agency retains its option to use other approaches and
strategies not discussed herein to fulfill its replacement housing obligations in a timely manner.
Sagea'est Apartments
R o/acermnt HousingPfan
5
City of Palm Desert
.hnuary 2011
ADDENDUM 1 -EXPECTED L.o CATI O N O F I N CO M E-REsT I CTED REPLAam ENT UNITS
The following are the actual and expected locations of income -restricted units which will be
used to meet the Agency's replacement obligation of two units with not less than four bedrooms.
Bedrooms & Income: Replacement Scheduled
Location: Completion:
Very Low Income: Lee Corel and Sandra Corel Completed
73-735 Santa Rosa Way
And
Sores Regis
35-751 Gateway Drive Completed
It is the adopted policy of the Agency to promote the assimilation of affordable housing
throughout the City to the maximum extent possible in order to avoid concentrations of lower -
income housing in certain neighborhoods.
SaWaest Apartments
itplacement Housing Plan
M.
City of Fbim Desert
.,nary 2011