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RDA RES 1999-020RESOLUTION NO. RDA 99 -20 A RESOLUTION OF THE RANCHO PALOS VERDES REDEVELOPMENT AGENCY ADOPTING AN IMPLEMENTATION PLAN FOR PROJECT AREA NO. 1 THE RANCHO PALOS VERDES REDEVELOPMENT AGENCY HEREBY FINDS, DETERMINES, RESOLVES AND ORDERS AS FOLLOWS: Section 1: The Redevelopment Plan for Project Area No. 1 of the Rancho Palos Verdes Redevelopment Agency (the "Project Area ") was approved and adopted by Ordinance No. 190 of the City Council of the City of Rancho Palos Verdes on November 27, 1984. Section 2: Health and Safety Code Section 33490 requires that each redevelopment agency that has adopted a redevelopment plan prior to December 31, 1993, adopt, after a public hearing, an implementation plan on or before December 31, 1994 and each five years thereafter, containing the specific goals and objectives of the agency for the project area, the specific programs (including potential projects), and estimated expenditures proposed to be made during the next five years, and an explanation of how the goals and objectives, programs and expenditures will eliminate blight within the project area and implement the low and moderate income housing requirements of the Community Redevelopment Law (Health and Safety Code Section 33000, et seq.). Section 3: The Agency adopted an initial implementation plan for the Project Area on December 6, 1994, which implementation plan is on file in the office of the City Clerk. Section 4: The Agency has prepared a new implementation plan for the Project Area, attached hereto as Exhibit A and incorporated herein by reference (the "Implementation Plan "), in accordance with the requirements of Health and Safety Code Section 33490. Section 5: On December 7, 1999, the Agency held a duly noticed public hearing on the proposed adoption of the Implementation Plan at which time all persons desiring to comment on or ask questions concerning the Implementation Plan were given the opportunity to do so. Prior to the public hearing on the Implementation Plan, copies of the Implementation Plan were available for public inspection in the office of the City Clerk. Section 6: The Agency has reviewed and considered all written and oral comments, questions and concerns regarding the Implementation Plan received prior to and at the public hearing on the Implementation Plan. Section 7: The Agency hereby adopts the Implementation Plan as the implementation plan for the Project Area pursuant to the requirements of Health and Safety Code Section 33490. Section 8: The Implementation Plan may be amended from time to time after a public hearing on the proposed amendment. Section 9: Adoption of the Implementation Plan does not constitute an approval of any specific program, project or expenditure and does not constitute a project within the meaning of Section 21000 of the Public Resources Code. Section 10: The Agency hereby directs that the Implementation Plan remain on file in the office of the City Clerk and be open to public inspection. PASSED, APPROVED AND ADOPTED this 7th day of December, 1999. ATTEST: 4A,LoiL, RETARY STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss CITY OF RANCHO PALOS VERDES ) 1, Jo Purcell, Secretary to the Rancho Palos Verdes Redevelopment Agency, hereby certify that the above Resolution No. RDA 99 -20 was duly and regularly passed and adopted by the said Agency at a regular meeting held on December 7, 1999. to 1_ Jo Purcell, ecretary Rancho P . os Verdes Redevelopment Agency Resolution No. RDA 99 -20 Page 2 of 2 Exhibit "A" IMPLEMENTATION PLAN For The RANCHO PALOS VERDES REDEVELOPMENT AGENCY January 1, 2000 through December 31, 2004 Resolution No. RDA 99 -20, Adopted on December 7, 1999 Prepared for: Rancho Palos Verdes Redevelopment Agency 30940 Hawthorne Boulevard Rancho Palos Verdes, CA 90275 Prepared by: PMW Associates 232 W. Avenida Gaviota San Clemente, CA 92672 www.pmwassociates.com TABLE OF CONTENTS I. Legislative Requirements 1 11. Background 2 III. Identified Conditions of Blight 3 IV. Long Term Objectives of the Redevelopment Plan 3 V. Five Year Goals for the Project Area 3 VI. Implementation Activities to Achieve Five Year Goals 4 VII. Relationship Between Implementation Activities and Redevelopment Plan Findings of Blight 5 VIII. Inclusionary & Replacement Housing Requirements 5 IX. Replacement Housing Plan 10 X. Inclusionary Housing Plan 11 XI. Housing Set -Aside Requirements 11 XII. Long Term Housing Goals and Policies 13 XIII. Five -Year Housing Goals 14 XIV. Financial Assistance /Developer Participation 17 Appendix A Attachment 1 -A List of Specific Programs and Estimated Expenditures Attachment 1 -B Map of Project Area Exhibit "A" Resolution No. RDA 99 -20 IMPLEMENTATION PLAN FOR THE RANCHO PALOS VERDES REDEVELOPMENT AGENCY I. LEGISLATIVE REQUIREMENTS Assembly Bill 1290, also known as the Community Redevelopment Law Reform Act of 1993, effective January 1, 1994, enacted numerous revisions to the California Community Redevelopment Law including a requirement for the adoption of an implementation plan. The California Community Redevelopment Law, Health and Safety Code Section 33490 now requires that each redevelopment agency adopt an implementation plan prior to December 31, 1994 and each five years thereafter for each redevelopment project area. The implementation plan must contain the specific goals and objectives of the redevelopment agency for each project area; the specific programs including potential programs and estimated expenditures proposed to be made during the five year period of the plan; and an explanation of how the goals and objectives, potential projects and estimated expenditures will eliminate blight within the project area. The plan must also describe the agency's plans to implement the housing related requirements of Code Sections 33334.2, 33334.4, and 33413. The implementation plan must contain, for each year of the five -year period, an annual housing program, including estimates of the number of housing units destroyed and /or removed, and the number of units developed, rehabilitated, price restricted and /or otherwise assisted. Further, the implementation plan must describe the agency's plans for the use of the annual deposits in the low and moderate income housing fund during each of the next five years. Additionally, if the implementation plan contains a project or projects for which the redevelopment agency is providing financial assistance, and which will result in the destruction or removal of dwelling units housing persons and families of low or moderate income, the implementation plan must identify proposed locations suitable for replacement housing units. In accordance with Code Section 33490(c), the agency must conduct a public hearing and hear testimony of all interested parties relative to the redevelopment plan and the implementation plan at least once within the five -year term of the implementation plan. The hearing must take place no earlier than two years and no later than three years after adoption of the implementation plan. Exhibit "A" Resolution No. RDA 99 -20 1 Notice of public hearings conducted regarding the adoption of the implementation plan must be published pursuant to Code Section 6063 of the Government Code and posted in at least four permanent places within the project area for a period of three weeks. Publication and posting must be completed not less than 10 days prior to the date set for hearing. 11. BACKGROUND Redevelopment Plan Adoption On November 27, 1984, the Rancho Palos Verdes Redevelopment Agency adopted a Redevelopment Plan for Project Area Number One. Project Area Description The Project Area includes 1,240 acres, predominantly in single - family residential use with small amounts of institutional, recreational and agricultural uses. The majority of the development within the Project Area occurred prior to 1962. The Project Area includes the Abalone Cove, Portuguese Bend, and Klondike Canyon landslides and adjoining areas and roughly corresponds to the City's Landslide Moratorium Area. Implementation Plan This Implementation Plan will meet the legislative requirements described in Section I as they relate to the Rancho Palos Verdes Redevelopment Plan. Specifically, the Implementation Plan will: • Describe the specific goals and objectives of the Redevelopment Agency for the project area. • Identify the programs including potential projects and estimated expenditures proposed to be made during the five -year period of the Implementation Plan. • Explain that the goals and objectives will eliminate blight from within the project area; and • Describe the Redevelopment Agency's plans to implement the housing related requirements of Community Redevelopment Law Code Sections 33334.2, 33334.4, and 33413. Exhibit "A" Resolution No. RDA 99 -20 2 III. IDENTIFIED CONDITIONS OF BLIGHT The Redevelopment Agency adopted the "Redevelopment Plan for Project Area Number One" on November 27, 1984 after identifying blighted conditions within the project area generally described as follows: Continuous earth movement has resulted in blighted conditions in the Project Area. Palos Verdes Drive South, the major circulation element in the area, is in perpetual need of repair, as are other infrastructure in the Project Area. The land formation in the Project Area is fractured with steep scarps and rifts, and homes are set at odd angles. IV. LONG TERM OBJECTIVES OF THE REDEVELOPMENT PLAN The Project Area includes a number of conditions that are defined in the California Community Redevelopment Law as characteristics of blight. The objective of the Redevelopment Plan is to eliminate such conditions of blight by providing needed public improvements, controlling excessive moisture in the slide area, stabilizing earth movement and repairing damage resulting from landslides in the Project Area. The Redevelopment Plan contains the following general objectives: (1) Eliminate physical and economic blight in the Project Area through the stabilization of soils conditions leading to hazardous landslides. (2) Prevent the recurrence of blighting conditions in the Project Area V. FIVE YEAR GOALS FOR THE PROJECT AREA The priority short term (five year) goals for the Project Area that are intended to guide the City's redevelopment program from January 1, 2000, through December 31, 2004, are shown below. It is anticipated that the projects and activities undertaken by the Redevelopment Agency (except those resulting from emergency situations) will meet these goals. (1) Provide a broad range of public infrastructure improvements to ameliorate effects of unstable geologic conditions and to abate the geologic hazards, which currently exist in the Project Area. Exhibit "A" Resolution No. RDA 99 -20 3 (2) Enhance the public safety and welfare by providing improved community services. This goal will be achieved through the design and construction of needed public facilities and utilities. (3) Preserve, improve and expand housing opportunities for low and moderate income residents. This goal will be achieved either through the rehabilitation, repair, and replacement of currently marginal or substandard residential units, providing subsidies or other support to qualified low- and moderate - income households utilizing suitable existing housing resources and /or encouraging the development of new affordable housing resources. VI. IMPLEMENTATION ACTIVITIES TO ACHIEVE FIVE YEAR GOALS To achieve the five -year redevelopment goals, the Redevelopment Agency proposes to undertake the following blight elimination, community improvement, and affordable housing programs. • Design and construct needed public improvements. Typical examples include, but are not limited to dewatering wells, construction of pipelines, storm drains, breakwaters, jetties, culverts, pipes and channels, revetments, relocation and /or reconstruction of public streets serving the Project Area and installation or relocation of utilities including debris basins, channel lining and storm drain improvements. • Provide improved community services. Typical examples include, but are not limited to the improvement of public streets, utilities, parks and open spaces and the control of excessive moisture in the Project Area that creates destabilization of soils leading to hazardous landslides. • Preserve, improve and expand housing opportunities for low and moderate income residents. Typical examples include, but are not limited to: the replacement or repair of marginal or substandard dwelling units, providing financial subsidies to qualified low and moderate income households, and the implementation of financial assistance programs to reduce land, site development and /or construction costs to facilitate the development of low and moderate income housing. Specific projects proposed for the next five years to fulfill the goals expressed above are described in Attachment 1 -A Exhibit "A" Resolution No. RDA 99 -20 4 VII. RELATIONSHIP BETWEEN IMPLEMENTATION ACTIVITIES AND THE FINDINGS OF BLIGHT The preliminary list of redevelopment program activities scheduled for the next five years are shown in Attachment 1 -A. All of the program activities scheduled will eliminate blighting conditions by: (1) Stabilizing soils conditions in the area preventing further erosion and instability; (2) Improving infrastructure that will prevent the recurrence of blighting conditions; and (3) Improving public streets, utilities, parks and open spaces. VIII. INCLUSIONARY AND REPLACEMENT HOUSING REQUIREMENTS Legislative Requirements The Community Redevelopment Law requires that an annual housing program be adopted as a part of the mandated implementation plan. The implementation plan must include the number of housing units developed, substantially rehabilitated, price- restricted, otherwise assisted, or destroyed. The implementation plan must also describe the Agency's plans for using annual deposits in the low and moderate income housing fund. If the implementation plan contains a project that will result in the destruction or removal of dwelling units that will have to be replaced pursuant to Community Redevelopment Law (CRL) Code Section 33413, the implementation plan shall identify proposed locations suitable for those replacement dwelling units. CRL Code Section 33413 states: (a) 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 the agency or where financial assistance has been provided by the agency, the agency shall, within four years of the destruction or removal, substantially rehabilitate, develop, or construct, or cause to be substantially rehabilitated, developed, or constructed, for rental or sale to persons and Exhibit "A" Resolution No. RDA 99 -20 5 families of low or moderate income, replacement dwelling units which have an equal or greater number of bedrooms as those destroyed or removed units at affordable housing cost within the territorial jurisdiction of the agency. When dwelling units are destroyed or removed after September 1, 1989, 75 percent of the replacement dwelling units shall replace dwelling units available at affordable housing cost in the same income level of very low income households, lower income households, and persons and families of low and moderate income, as the persons displaced from those destroyed or removed units. (b) (1) At least 30 percent of all new and substantially rehabilitated dwelling units developed by an agency shall be available at affordable housing cost to persons and families of low or moderate income. Not Tess than 50 percent of the dwelling units required to be available at affordable housing cost to persons and families of low or moderate income shall be available at affordable housing cost to, and occupied by, very low income households. (2) At least 15 percent of all new and substantially rehabilitated dwelling units developed within a project area under the jurisdiction of an agency by public or private entities or persons other than the agency shall be available at affordable housing cost to persons and families of low or moderate income. Not less than 40 percent of the dwelling units required to be available at affordable housing cost to persons and families of low or moderate income shall be available at affordable housing cost to very low income households. Additional Inclusionary Housing Requirements The agency's inclusionary housing requirements are required to be met every ten years. If the requirements are not met within the applicable ten -year period, the agency must fulfill its inclusionary housing requirements on an annual basis until the requirements for the ten year period are met. Further, if the agency exceeds its inclusionary housing goals during a given ten year period, the excess housing units can be counted towards inclusionary housing goals in the subsequent ten year period. For example, if 100 new housing units are developed or substantially rehabilitated in a project area within ten years of the initial implementation plan by entities other than the redevelopment agency, 15 of those units must Exhibit "A" Resolution No. RDA 99 -20 6 be affordable to low or moderate income households (of which 6 must be affordable to very low income households). If more than 15 units are developed or substantially rehabilitated as units affordable to low and moderate income households during this ten -year period, the affordable units in excess of 15 may be counted toward the agency's requirements for the next ten -year period. However, if fewer than 15 units are affordable to low or moderate income households at the end of the ten -year period, the agency must meet its production goals on an annual basis until the requirements for the ten -year period are met. Affordability Requirements Housing costs for low and moderate income housing developed pursuant to CRL Section 33413 must be affordable to persons and households whose income do not exceed 120 percent of the area median family income. For purposes of the Implementation Plan, the following income limits are used: • Very Low Income (0 -50 percent of area median family income) • Low Income (51 -80 percent of area median family income) • Moderate Income (81 -120 percent of area median family income) The area median family income limits are adjusted for household size, with smaller households having lower income limits. The 1999 HUD median family income adjusted for a four - person household in Los Angeles County is $51,300. Thus by definition, 1999 maximum income is $25,650 for a very low income four - person household, $41,050 for a lower income four - person family and $61,550 for a four - person moderate income family for jurisdictions in Los Angeles County. TABLE 2 DEPARTMENT OF HOUSING & COMMUNITY DEVELOPMENT - INCOME LIMITS Standard 1 2 3 4 5 6 7 8 Very Low Income 17950 20500 23100 25650 27700 29750 31800 33850 Lower Income 28750 32850 36950 41050 44300 47600 50900 54150 Median Income 35900 41050 46150 51300 55400 59500 63600 67700 Moderate Income 43100 49250 55400 61550 66450 71400 76300 81250 Exhibit "A" Resolution No. RDA 99 -20 7 TABLE 3 AFFORDABLE HOUSING COSTS The second step in determining compliance with affordable housing requirements is determining whether the total housing costs payable by the household are within allowable amounts. The following table illustrates the Community Redevelopment Law affordable housing costs requirements. Income Levels (1) Owner Costs Renter Costs Very Low (0 -50 %) 30% of 50% of adj. AMI(2) 30% of 50% of adj. AMI(2) Low (51 -70 %) (70 -80 %) (61 -80 %) 30% of 70% of adj. AMI(2) Option: Max: 30% of gross hh inc.(,) 30% of 60% of adj. AMI(2) Option: Max: 30% of gross hh inc.(l) Moderate (81 -120 %) (111 -120 %) Min: 28% of gross hh inc.(,) Max: 35% of 110% of adj. AMI Option: Max: 35% of gross hh inc.(1) 30% of 110% of adj. AMI(2) Option: Max: 30% of gross hh inc.(,) (1) Household income (hh inc.) levels relative to area median income. (2) Area Median Income (AMI) adjusted for family size appropriate for the unit. Following are examples of the application of affordable housing cost requirements: AFFORDABLE HOUSING EXAMPLE FOR A VERY LOW INCOME FAMILY PURCHASING A 3- BEDROOM HOUSE A very low income family buying a 3- bedroom house could not have monthly housing payments exceeding $641.25. The Community Redevelopment Law requires that the following be included as estimates for purposes of determining what the monthly housing payment is: • Principal and interest payments on the mortgage loan, including rehabilitation loans. • Mortgage loan insurance fees. • Property taxes and assessments. • Fire and casualty insurance. • Property maintenance and repairs. • A reasonable allowance for utilities (including garbage collection, sewer, water, electricity, gas and other fuels, but not telephone service). Such an Exhibit "A" Resolution No. RDA 99 -20 8 allowance shall take into consideration the cost of an adequate level of service. • Homeowner association fees. • Space rent, if the housing unit is on rented land. AFFORDABLE HOUSING EXAMPLE FOR A VERY Low INCOME FAMILY RENTING A 3- BEDROOM UNIT A very low income family renting a 3- bedroom house could not have monthly rental payments exceeding $641.25. The Community Redevelopment Law requires that the following be included as estimates for purposes of determining what the monthly rental payment is: • Use and occupancy of a housing unit and land and facilities associated therewith. • Any separately charged fees or service charges assessed by the lessor which are required of all tenants, other than security deposits. • A reasonable allowance for utilities not included in the above costs, including garbage collection, sewer, water, electricity, gas and other heating, cooking, and refrigeration fuels. Utilities do not include telephone service. Such an allowance shall take into consideration the cost of an adequate level of service. • Possessory interest taxes or other fees or charges assessed for use of the land and facilities associated therewith by a public or private entity other than the lessor. Duration of Affordability CRL Code Section 33413(c) states, in part, "The agency shall require that the aggregate number of dwelling units rehabilitated, developed, constructed or price- restricted pursuant to subdivision (a) or (b) remain available at affordable housing cost to persons and families of low income, moderate income, and very low income households, respectively, for the longest feasible time, as determined by the agency, but for not less than the period of the land use controls established in the redevelopment plan, except... [if] a longer period of time may be required by other provisions of law. The agency may permit sales of owner - occupied units prior to the expiration of the period of the land use controls established by the agency for a price in excess of that otherwise permitted under this subdivision pursuant to an adopted program that protects the agency's investment of moneys from the Low and Moderate Income Housing Fund. If land on which those dwelling units are located is deleted from the project area, the agency shall continue to require that those units remain affordable as specified in this subdivision." CRL Code Section 33413(g) adds that "Longest feasible time as used in this section, includes but is not limited to, unlimited duration." Exhibit "A" Resolution No. RDA 99 -20 9 CRL Code Section 33413 (c) and (g) are somewhat Tess flexible than the general affordability criteria for agency- assisted units set forth in CRL Code Section 33334.3(f). The latter requires that all new or substantially rehabilitated housing units developed or otherwise assisted with monies from the low and moderate income housing fund pursuant to an agreement approved by the agency on or after January 1, 1988, shall remain affordable for the longest feasible time but not less than fifteen years for rental units and ten years for owner - occupied units. This potentially lesser standard only applies to agency- assisted units which are not counted as contributing to the agency's obligations under CRL Code Section 33413(a) or (b). CRL Code Section 33413(b)(2)(C) adds that "long -term affordability covenants purchased or otherwise acquired pursuant to subparagraph (B) shall be required to be maintained on dwelling units at affordable housing costs for not less than 30 years." IX. REPLACEMENT HOUSING PLAN 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 the agency or where financial assistance has been provided by the agency, the agency shall, within four years of the destruction or removal, substantially rehabilitate, develop, or construct, or cause to be substantially rehabilitated, developed, or constructed, for rental or sale to persons and families of low or moderate income, replacement dwelling units which have an equal or greater number of bedrooms as those destroyed or removed units at affordable housing cost within the territorial jurisdiction of the agency. When dwelling units are destroyed or removed after September 1, 1989, 75 percent of the replacement dwelling units shall replace dwelling units available at affordable housing cost in the same income level of very low income households, lower income households, and persons and families of low and moderate income, as the persons displaced from those destroyed or removed units. The Redevelopment Agency of the City of Rancho Palos Verdes does not contemplate the removal or destruction of housing units existing within the Project Area during the period of this Implementation Plan. Thus, there is no need for a replacement housing plan. Exhibit "A" Resolution No. RDA 99 -20 10 X. INCLUSIONARY HOUSING PLAN Since the adoption of the Redevelopment Plan, there have been no Agency assisted housing units developed or substantially rehabilitated within the Project Area. Nor has there been any privately developed or substantially rehabilitated housing units constructed within the project area. Therefore, the Rancho Palos Verdes Redevelopment Agency has no current inclusionary housing requirements. No development of new housing or the substantial rehabilitation of existing housing within the project area is anticipated within the next ten years or over the life of the redevelopment plan. XI. HOUSING SET -ASIDE REQUIREMENTS The Agency is required to set -aside twenty percent (20 %) of the gross annual tax increment into the Low and Moderate Income Housing Fund. The purpose of the housing set -aside fund is to increase, improve and preserve the city's supply of low and moderate income housing. In carrying out the annual housing set -aside requirements, the Agency may exercise any or all of its powers, including the following: • Acquire real property or building sites subject to the provisions of CRL Code Section 33334.16. • Improve real property or building sites with onsite improvements but only if either (A) the improvements are made as part of a program which results in the new construction or rehabilitation of affordable housing units for low or moderate income persons who are directly benefited by the improvements or (B) the agency finds that the improvements are necessary to eliminate a specific condition that jeopardizes the health or safety of existing low or moderate income residents. • Donate real property to private or public persons or entities. • Finance insurance premiums subject to CRL Section 33136. • Construct buildings or structures. • Acquire buildings or structures. • Rehabilitate buildings or structures. Exhibit "A" Resolution No. RDA 99 -20 11 . Provide subsidies to, or for the benefit of, very low- income households, as defined by Health and Safety (H &S) Code Section 50105, lower income households, as defined by H &S Code Section 50079.5 or persons and families or low or moderate income, as defined by H &S Code Section 50093, to the extent those households cannot obtain housing at affordable costs on the open market. Housing units available on the open market are those units developed without direct government subsidies. • Develop plans, pay principal and interest on bonds, loans, advances, or other indebtedness, or pay financing or carrying charges. • Maintain the community's supply of mobile homes. . Preserve the availability to lower income households of affordable housing units in housing developments which are assisted or subsidized by public entities and which are threatened with imminent conversion to market rates. The twenty percent housing set -aside fund monies can also be used for planning and general administrative costs, when directly related to programs and activities associated with CRL Code Section 33334.2(e). This includes the following activities: . Costs incurred for salaries, wages, and related costs of the Agency's staff or for services provided through inter - agency agreements, and agreements with contractors, including usual indirect related costs. • Costs incurred by a non - profit corporation that are not directly attributable to a specific project. . Legal, architectural, and engineering costs and other salaries, wages, and costs directly related to the planning and execution of a specific project which are authorized under subdivision (3) of CRL Code Section 33334.2 and which are incurred by a non - profit housing sponsor and are not planning and administrative costs for the purpose of this section, but are, instead, project costs. The Agency is entitled to spend its twenty percent housing set -aside funds both within the Project Area and outside of the Project Area (but within the jurisdictional boundary of the City of Rancho Palos Verdes). Exhibit "A" Resolution No. RDA 99 -20 12 Housing Set -Aside Fund Estimate In order for the Agency to estimate the number of units it could assist in the next five years, a projection of twenty percent (20 %) of the tax increment revenue was developed for the period FY 1999 -2000 through FY 2004 -2005. As of December 31, 1999, it is estimated that the Redevelopment Agency will have accumulated approximately $980,000 in the Housing Fund. These monies will be allocated towards the preservation, development and /or rehabilitation of very low, low and moderate income housing units. It is expected that these funds will be leveraged in concert with one of the housing programs cited in Section XIII. TABLE 6 PROJECTED HOUSING SET -ASIDE Fiscal Years Estimated 20% Tax Increment Estimated Housing Expenditures As of 12/31/99 980,000 1999 — 2000 92,000 100,000 2000 — 2001 94,000 972,000 2001 — 2002 96,000 94,000 2002 — 2003 98,000 96,000 2003 — 2004 100,000 98,000 2004 — 2005 100,000 Total $1,460,000 $1,460,000 XII. LONG TERM HOUSING GOALS AND POLICIES The General Plan Housing Element for the City of Rancho Palos Verdes has five separate and distinct goals developed to address the various housing needs of the City. These are explicitly stated in order to give latitude and authority to design and address the implementation of the housing program. They are as follows: Goal 1 MEET THE CITY'S DESIGNATED REGIONAL HOUSING NEEDS ASSESSMENT FOR VERY LOW, LOW AND MODERATE INCOME HOUSEHOLDS. GoaI 2 PROVIDE AFFORDABLE HOUSING FOR THE CITY'S DESIGNATED VERY LOW, LOW AND MODERATE INCOME HOUSEHOLDS. Goal 3 IMPROVE EXISTING AFFORDABLE HOUSING STOCK. Exhibit "A" Resolution No. RDA 99 -20 13 Goal 4 PRESERVE THE CITY'S EXISTING HOUSING STOCK. Goal 5 PROMOTE A RANGE OF HOUSING TYPES. The preliminary 1999 Regional Housing Needs assessment provided by the Southern California Council of Governments (SCAG) for the next five years calls for 8 very low income housing units, 5 low income housing units, 8 moderate income housing units and 31 high income housing units for a total of 53 new housing units. The fulfillment of the Redevelopment Agency's obligation to utilize 20% of its tax increment income for low to moderate income housing preservation, improvement and /or development will support the General Plan Housing Element Goals and assist in meeting the Regional Housing Needs allocated to the City of Rancho Palos Verdes. XIII. FIVE -YEAR HOUSING GOALS During the five -year period of the implementation plan, the Redevelopment Agency of the City of Rancho Palos Verdes will facilitate the preservation, new construction and /or rehabilitation of affordable housing projects that will support the following goals: Satisfy the replacement housing requirements of the Community Redevelopment Law as they relate to any housing units, if any, displaced by Redevelopment Agency activities. Satisfy the inclusionary housing requirements of the Community Redevelopment Law as they relate to the provision of affordable housing as a percentage of any new or substantially rehabilitated housing which may be constructed within the Redevelopment Project Area. Meet the fair share regional affordable housing goals for the City of Rancho Palos Verdes by improving public improvements and community facilities, removing and preventing blighting conditions and providing and /or preserving affordable housing resources. Support overall community development, economic development, and redevelopment/revitalization efforts within the City of Rancho Palos Verdes by improving public improvements and community facilities, removing and preventing blighting conditions and providing and /or preserving affordable housing resources. Exhibit "A" Resolution No. RDA 99 -20 14 It is anticipated that the Redevelopment Agency will couple housing set aside funds with other public and private funding sources as described below. The Redevelopment Agency will seek to generate the construction, substantial rehabilitation, and /or purchase of affordability covenants through public and /or nonprofit sponsors. The City of Rancho Palos Verdes has no Article 34 authority and it is not anticipated that the Redevelopment Agency or the City of Rancho Palos Verdes will directly own and manage affordable housing projects. Project Selection Criteria Projects seeking financial assistance from the Redevelopment Agency's Low and Moderate Income Housing Fund will be evaluated on a case -by -case basis based on the following criteria: • Ability of the project to generate other public /private funding in support of housing set aside funds. Degree to which the proposed project meets multiple community goals in addition to affordable housing goals. These goals include but are not limited to the following: a. Replacement housing requirements. b. Inclusionary housing requirements. c. Fair share regional housing requirements. d. Community goals for redevelopment, neighborhood revitalization and economic development. The cost benefit of the proposed affordable housing program as defined by the level of affordable housing assistance requested as it relates to the number of affordable housing units provided. • The financial track record, management and development experience of the proposing sponsor. Annual Targets The number of affordable housing units to be developed over the five year implementation plan period will depend in large part on market conditions, availability of funding to supplement housing set aside funds and the degree to which proposals are submitted which satisfy the stated goals and Exhibit "A" Resolution No. RDA 99 -20 15 objectives. Subject to these limiting factors, the following are the production goals for the five -year implementation plan: TABLE 7 ANNUAL HOUSING GOALS Limiting Factors The estimates of housing units noted above may include very low, low and /or moderate income units constructed or rehabilitated by developers or nonprofit organizations with the financial assistance of the Agency, and /or units produced or rehabilitated with the direct assistance of the Agency through the purchase of affordability covenants. A number of conditions may limit the ability of the Redevelopment Agency to meet Implementation Plan goals. Among them are the existing land uses and socioeconomic characteristics of the project area, limited funds available from the Agency's low and moderate income housing funds and other funding sources, and changing market conditions. Following are examples of some specific programs that could be used by the Redevelopment Agency of the City of Rancho Palos Verdes to fulfill their housing goals. Deed- Restrict Existing Projects Within the City of Rancho Palos Verdes are a number of multi - family projects. The Agency may negotiate deed restrictions with owners of these existing projects to restrict rental rates to levels affordable to low and moderate income households. Low and moderate income housing funds for rehabilitation of the buildings may be offered as an incentive in exchange for deed restrictions. Assistance to the existing rental stock may be publicly advertised to solicit applications from existing property owners. Exhibit "A" Resolution No. RDA 99 -20 16 Year Units 2000 0 2001 20 2002 5 2003 5 2004 5 TOTAL: 35 Limiting Factors The estimates of housing units noted above may include very low, low and /or moderate income units constructed or rehabilitated by developers or nonprofit organizations with the financial assistance of the Agency, and /or units produced or rehabilitated with the direct assistance of the Agency through the purchase of affordability covenants. A number of conditions may limit the ability of the Redevelopment Agency to meet Implementation Plan goals. Among them are the existing land uses and socioeconomic characteristics of the project area, limited funds available from the Agency's low and moderate income housing funds and other funding sources, and changing market conditions. Following are examples of some specific programs that could be used by the Redevelopment Agency of the City of Rancho Palos Verdes to fulfill their housing goals. Deed- Restrict Existing Projects Within the City of Rancho Palos Verdes are a number of multi - family projects. The Agency may negotiate deed restrictions with owners of these existing projects to restrict rental rates to levels affordable to low and moderate income households. Low and moderate income housing funds for rehabilitation of the buildings may be offered as an incentive in exchange for deed restrictions. Assistance to the existing rental stock may be publicly advertised to solicit applications from existing property owners. Exhibit "A" Resolution No. RDA 99 -20 16 Subsidized New Construction /Purchase of Existing Housing New construction of rental housing for low and moderate income households traditionally represents one of a redevelopment agency's primary options to meet its housing production goals. However, the gap between market rents and rents affordable to very low and low income households within the City of Rancho Palos Verdes will typically require significant subsidies to achieve affordability for new construction or the purchase of existing market rate housing. Given the amount of subsidy that would be required, a more cost effective option may be to purchase affordability covenants in existing multi - family buildings. Substantial Rehabilitation Rehabilitation of existing rental properties is a cost effective program option to fulfill the Agency's affordable housing production requirements. The Agency may use Housing Fund monies to provide financial assistance for the rehabilitation of private, non - profit and for - profit rental properties. The City /Agency may establish its own rehabilitation program or may contract with the Los Angeles County Housing Authority to carry out a rehabilitation program. First -Time Homebuvers Program The First -Time Homebuyers Program (FTHB) is a down payment assistance program for low and very low income homebuyers. Qualified buyers are eligible to receive down payment assistance for the purchase of a primary residence. Typically, a second mortgage is held by the Redevelopment Agency and repaid from the proceeds of a sale or refinance. Alternatively, the Redevelopment Agency may elect to allow the sale of the home to a second qualified buyer and transfer the mortgage for the down payment assistance to the second qualified owner. As previously discussed, the high cost of housing in the City of Rancho Palos Verdes could make this program less than cost effective. Mortgage Credit Certificate Program The Mortgage Credit Certificate Program (MCC) is available for first -time homebuyers who have not had an ownership interest in a principal residence within the previous three years. Buyers interested in participating in the program make application through their lender at the time they apply for a home loan. The MCC provides a tax credit, which allows the borrower to qualify for a larger mortgage. This tax credit is calculated as 20% of the annual interest paid on the primary mortgage and can be no greater than $2,000 per year. IV. FINANCIAL ASSISTANCE /DEVELOPER PARTICIPATION The Agency's philosophy with regard to providing financial assistance in the development of affordable housing will be to leverage low and moderate income funds with other sources of funds. There are numerous federal, state, county or city programs in which an agency Exhibit "A" Resolution No. RDA 99 -20 17 or developer may participate. In addition, the Agency may establish local programs to assist in the establishment and preservation of low and moderate income housing. Appendix A. contains a brief description of these various programs. Exhibit "A" Resolution No. RDA 99 -20 18 APPENDIX A LIST OF FUNDING PROGRAMS HOME Program The HOME Program is a federally funded grant program for housing. Funds are allocated by formula to participating jurisdictions that are allowed great flexibility with respect to the types of properties to be assisted, the types of development (new construction, modest or major rehab, etc.) to be undertaken, the forms and amounts of financing to be offered, the quality and type of housing provided, the households assisted and procedures for running programs. The intent of HOME is: • To expand the supply of decent, safe, sanitary and affordable housing. • To strengthen the abilities of state and local governments to provide housing. • To assure that federal housing services, financing, and other investments are provided to state and local governments in a coordinated and supportive fashion. Low Income Housing Tax Credit (LIHTC) As part of the Tax Reform act of 1986, Congress created the Low Income Housing Tax Credit (LIHTC), which provides a tax shelter for limited partners in low income housing projects. This program or its successor could represent an important financial resource for affordable housing development by the private sector. Private Institutions Under the Community Reinvestment Act (CRA), private lending institutions such as banks, thrifts, and their affiliated mortgage banking subsidiaries are required to annually assess the credit needs of the communities in which they operate. The City has and will continue to hold meetings with lenders to discuss local needs and potential programs that may be within the guidelines of community reinvestment. Savings Association Mortgage Company (SAMCO) SAMCO is a statewide organization supported by stockholder savings institutions that assists in the development and financing of socially oriented affordable housing projects. SAMCO's Board of Directors reviews and selects projects to be offered in loan pools for participation purchase by its members. The pooling process has enabled SAMCO and its members to invest funds in low and moderate income communities. SAMCO has worked extensively with non - profit developers and financed a variety of housing projects that utilitize joint public /private resources. Exhibit "A" Resolution No. RDA 99 -20 19 California Community Reinvestment Corporation (CCRC) CCRC is a non - profit mortgage banking consortium specifically designed to provide long- term debt financing for affordable housing developments. Created in 1989, the CCRC is comprised of 56 banks representing all areas of the State. The CCRC finances loans by pooling funds from each of its member banks. CCRC has its own staff, which screens applications and provides technical assistance to developers. A loan committee, consisting of senior credit officers from members' banks, approves all loans on behalf of member banks. When the loan committee approves a loan, CCRC draws funds from each bank in proportion to their size. CCRC enters into "partnership" with cities to leverage public monies (redevelopment low and moderate income housing funds, CDBG, etc.) with CCRC private funds to construct low and moderate income housing. Five different 30 -year fixed rate loans products are offered, with affordability required to be maintained for the life of the loan. Below market interest rates are provided to both non - profit and for - profit sponsors (Treasury bonds of comparable maturities plus 100 basis points for non - profits, plus 200 basis points for profits.) Federal Home Loan Bank The affordable housing programs mandated by the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989 and the Community Reinvestment Act are now being implemented through the 12 Federal Home Loan Banks. By law, the affordable housing provisions call for, among other things, a requirement for interest - subsidized loans to be extended to low income homebuyers, as well as a variety of lending activities that fall under the "community investment" heading. Through the Affordable Housing Program, the FHLB provides interest rate subsidies on advances to member banks that engage intending to long -term low to moderate income owner - occupied or affordable rental housing. Loans that qualify for the program include those used to finance homeownership by low income families, and loans that finance the purchase, construction or rehabilitation of rental housing, of which at least 20 percent will be occupied by very low income households. In addition to the Affordable Housing Programs, the FHLB also implements a Community Investment Program. Through this program, each district bank appoints a community investment officer and provides "community- oriented" mortgage loans to members at its own cost of funds. Loans that qualify for the program include those used to finance the purchase or rehabilitation of homes by borrowers earning 115% or less of the area median income, and those that finance commercial or economic development projects that benefit low and moderate income families. Exhibit "A" Resolution No. RDA 99 -20 20 Single Family Mortgage Revenue Bond Program Los Angeles County coordinates interested lenders and developers who wish to participate in a single - family, tax exempt bond program. The County issues tax exempt bonds to generate a pool of funds from which mortgages will be drawn. The developers and /or lenders pay the costs of the financing and reserve a portion of the pool to originate mortgages in their projects. The individuals purchasing the homes must be first time homebuyers and fall within certain income parameters. Ultimately, the first time homebuyer can qualify for a larger mortgage because the interest rate is lower than market rate. The developer /lender can use the mortgage pool to more effectively market their homes. Multi - Family Bond Program The Multi - Family Bond Program provides long -term financing for multi - family projects at tax exempt rates. The program requires that 20% of the units be reserved for low and moderate income residents. Project owners are required to provide a letter of credit, insurance or other credit, insurance or other credit enhancement for the financing. Exhibit "A" Resolution No. RDA 99 -20 21 ATTACHMENT 1 -A List of Specific Programs and Estimated Expenditures Abalone Cove Sewer Improvements The majority of homes in the project area are not connected to a sanitary sewer system and are served by private septic systems. Using septic systems provide a source of water to the slide plane. This project will construct a new sewer system in Abalone Cove to eliminate the use of septic systems. Estimate Expenditure: $3,200,000 FY 2000 — 01 Abalone Cove Storm Drain Improvements A significant source of water to the slide plane results from an inadequate drainage system in the project area. This project will construct a new storm drain system of underground pipes and catch basins. Estimated Expenditure $2,200,000 FY 2000 — 01 Alta Mira Canvon Channel Improvements A significant source of water entering the slide plane is drainage from the Alta Mira Canyon Channel that enters through fissures. This project will construct channel improvements in Alta Mira Canyon to reduce this source of water to the slide. Estimated Expenditure: $1,500,000 FY 2001 — 02 De — waterina Wells Dewatering wells have proven to be an efficient and effective method of removing water that has entered the slide plan. This project will develop new de- watering wells as directed by the Agency's geologic and geotechnical experts. Estimated Expenditure $500,000 FY 2000 —01, through FY 2004 — 05 Observation Wells Monitoring the level of ground water provides important information to the Agency's geologic and geotechnical experts. This project will construct new monitoring wells as directed by the Agency's geologic and geotechnical experts. Estimate Expenditure: $250,000 FY 2000 —1 through 2004 — 05 Shoreline Protection Feasibility Study This project is an engineering study by the Army Corps of Engineers and will assist in the development of strategies for stabilization of the landslide area. Estimated Expenditures: $ 100,000 FY 2000 — 01 Agencv Administration and Maintenance, Administrative and Maintenance Activities in the landslide consist of various engineering and legal activities on on -going agency projects undertaken by agency staff. Estimated Expenditures: $75,000 annually FY 2000 — 01 through 2004 - 05 Exhibit "A" Resolution No. RDA 99 -20 22 N A W E s ATTACHMENT 1 -B RANCHO PALOS VERDES REDEVELOPMENT AGENCY PROJECT AREA CITY OF RANCHO PALOS VERDES • CITY LIMITS CITY OF ROLLING HILLS r • CITY LIMITS N•1•: The 1•ald• •d • •l Ike 11e• marks Ike k•rrada►T KEY N•1•: The ••a• high 11d• lla• w•►k• Ike **elk b••ad•►T. /4CIFIC IC1411 Rancho Palos Verdes Redevelopment Agency Rancho Palos Verdes Landslide Moratorium Abalone Cow Landslide Portuguese Bend Landslide Klondike Canyon Landslide 23 24 e 1• SCALE 1' • 800' APPROX. AREA — 1100 ACRES DATE 8 -17 -84 Exhibit "A" Resolution No. RDA 99 -20