2013-10-23 (Report) CITY OF ENCINITAS
t - CITY COUNCIL
r
HOUSING AUTHORITY OF THE
CITY OF ENCINITAS
BOARD OF COMMISSIONERS
AGENDA REPORT
Meeting Date: October 23, 2013
TO: Mayor and City Council
Chairperson and Board of Commissioners
VIA: Gus Vina, City Manager/Executive Director
Tim Nash, Director of Finance
FROM: Jeff Murphy, Planning&Building Director
Diane S.Langager,Principal Planner
Kathy Noel,Financial Management Analyst
SUBJECT:
An overview of the affordable housing and community development programs of the City of
Encinitas and Housing Authority of the City of Encinitas and direction for continued funding for
program administration and Housing Authority Payment costs.
BACKGROUND:
The City of Encinitas has a varied approach in providing assistance to lower-income households
in need of affordable housing. These approaches contribute to the creation and sustainment of a
diverse population and housing affordability within the community.
To achieve this diversity and affordability, the City relies on federal, State, and local funds. The
federal assistance is provided through the Community Development Block Grant (CDBG),
HOME Investment Partnership (HOME) programs, and the Section 8 Housing Choice Voucher
(HCV) program. The State provides affordability through its density bonus regulations. The
City's Inclusionary Ordinance and Affordable Unit Policy are the two primary forces in creating
and sustaining affordability. A brief summary of these programs are provided below with
additional information provided in Attachment"CC-1".
A. Federal Pro rg ams
1. Community Development Block Grant(CDBG)Program
Since 1990, the City has been a CDBG entitlement jurisdiction, which allows the
City to develop programs and funding priorities that carry out a wide range of
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community development activities directed toward revitalizing neighborhoods,
economic development, and providing improved community facilities and
services. The funds for this program are provided and administered through the
federal Department of Housing and Urban Development(HUD).
Over the last five years, the annual grant to the City has averaged approximately
$375,000, of which 20% can be applied to program administration. The balance
of the grant must be applied to services and improvements that benefit lower-
income persons.
Roughly $1.3M has been allocated to capital improvements over the past five
years (e.g., curbs, gutters, sidewalk improvements). Additionally, over the same
time period, a total of approximately $405,000 has been expended on other
beneficial activities, such as the CDBG Residential Rehabilitation Program that
benefited fifteen lower income household owners with essential repairs and
improvements to their homes.
2. HOME Program
The City has been a member of the San Diego County HOME Consortium since
1994. These grant funds can be used for affordable housing activities for lower-
income households relative to new construction, acquisition and/or rehabilitation,
rental assistance, and homebuyer programs.
The funds are provided and administered by HUD through the County of San
Diego. As a consortium member, the City has received an annual average of
approximately $194,000 over the last five years. Additionally, the City receives
administrative funds as part of the program funding, which over the last five years
has averaged approximately$6,100.
Over the last five years, a total of $1.8M has been expended on HOME eligible
activities, which benefited 112 households through rental assistance and
residential repairs and improvements. HOME funding has also contributed to the
development of the his Apartments, where all 20 units are affordable to tenants at
a range of 30— 60% percent or less of area median income. Additionally, HOME
funding contributed to the purchase of four of the City's 16 affordable housing
units at Pacific Pines.
3. Section 8 Housing Choice Voucher(HCV)Program
The Housing Choice Voucher program (HCV) is a Federal grant program for
assisting very low-income families, the elderly, and the disabled to afford decent,
safe, and sanitary housing in the private market. Essentially, the program is
structured where the family pays the difference between the actual rent charged
by the landlord and the amount subsidized (Housing Assistance Payment, or
HAP) by the program. The housing assistance payment (HAP) amount varies
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depending upon the family's income. The City has received Section 8 HCV funds
through its Housing Authority since 1995.
While HUD has awarded 136 rental assistance vouchers to the City Housing
Authority, for several years, they have not fully funded the maximum allocation
(136 vouchers). Currently, 113 vouchers are leased.
Over the last five years, roughly $4.7M has been expended on rental assistance,
which is an annual average of about $948,000.
B. State Programs
Currently, the only State program is the Density Bonus Law, which requires a local
jurisdiction to grant a density increase if requested by the developer. The requested
density increase is to provide affordable housing within the proposed development. The
number of required affordable units varies depending on the number of incentives or
concessions requested and the affordability range provided.
Typically, the affordable units are restricted to households at or less than 50 percent to 80
percent of area median income and the restricted affordability period is 30 years.
Currently, 43 units have been created from this program and 26 constructed. The
developer can choose to rent or sale the affordable units.
C. Local Programs
1. Inclusionary Ordinance
The City's Inclusionary Ordinance requires developers to reserve one affordable
unit at 50 percent of area median income (for a minimum of 55 years) for every
ten lots in a proposed development. The ordinance provides an option for the
developer to pay a fee in lieu of constructing the affordable unit.
Currently, the City Council considers a developer's request to pay a fee on a case-
by-case basis, since a standard in-lieu fee has not been formally established. If
the developer constructs the affordable unit, the affordable unit can be rented or
sold. To date, 33 units have been created under this program, of which, 23 units
are rented, four sold, and six will or have paid an in-lieu fee. Over the past five
years, the City has collected approximately $781,000 in in-lieu fees. During this
same five year period, approximately $155,000 of these in-lieu fees were utilized
as part of the development of the Iris Apartments. In-lieu fees were also
previously used towards the purchase and rehabilitation of the Boathouses.
2. Affordable Housing Fund Program
The Affordable Housing Fund Program provides funding for lower income rental
housing developments (construction, acquisition and rehabilitation). The majority
of the revenue for this program is derived from the inclusionary in-lieu fees paid
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by developers. The qualifying households for developments resulting from this
fund must be at or below 50 to 80 percent of the area median income and the
restricted affordability period is 55 years.
This program allowed the City (through the City Housing Authority) to purchase
16 units at Pacific Pines Condominiums. All units are affordable to tenants at 80
percent or less of area median income. The rent collected covers management
and maintenance costs of the units. Any remaining revenue is held in reserve
which can be utilized for future affordable housing efforts. To date, the Pacific
Pines has a total of roughly$385,000 in reserves.
ANALYSIS:
A. Funding Allocation Overview
Funding for the CDBG, HOME and Section 8 programs are subject to annual
Congressional appropriations. The CDBG and HOME programs are funded on the City's
fiscal year, while the Section 8 program is funded on a calendar year. Due to Congress
and the President's desire to reduce the federal deficit, the funding for domestic
programs, such as the CDBG, HOME, and Section 8 programs have been reduced and
most likely will be subject to further reductions in the future. As funding is reduced for
these programs, the General Fund has been depended upon more and more for support of
the administrative costs to run the program.
In early 2000, these programs were well funded and were able to cover both the City's
administrative and program costs. However, over recent years, all of the federal
programs have experienced significant declines in program funding allocations. In fact,
over the past five years, there has been an overall funding reduction for the programs
(CDBG 36%, HOME 52%, Section 8 HAP 18%) which directly or indirectly affects the
funding for program costs.
While the City continues to receive fewer funds to cover both program and administrative
expenses, the associated costs and staff resources needed to continue program oversight
and management including quality customer service to program recipients remains the
same, if not more.
Staffing for the CDBG, HOME, Section 8, and other City housing and community
development programs and activities are budgeted at 2.4 full-time equivalent (FTE) staff.
The staff positions are: (1.0 FTE) Housing Administrator, (1.0 FTE) Program
Coordinator, and (0.40 FTE) Program Assistant. Additionally, over the last four years, a
(0.50 FTE) Planning/Housing Management Intern, who primarily performs housing and
community development activities, has been utilized. The Housing Administrator
recently retired and the Department is holding off filling that vacancy pending the actions
taken by the Council relative to this item.
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B. Program Administrative Cost Shortfall
The Federal housing programs discussed in the Background Section of this report limit
the amount of funding that can be applied to a jurisdiction's actual administrative costs
(i.e., program oversight and management). The administrative funding varies depending
on the program; the funds are allocated and available on an annual basis.
The following charts summarize the administrative costs required to manage the various
programs and the current revenue shortfall. This shortfall is not unique to the current
fiscal year; a shortfall was realized in the past two fiscal years. There was a push by the
Federal Government to spend program reserves; therefore, the Department opted to use
these reserves to cover program deficits as opposed to utilizing City General Funds. The
administrative reserves in the Section 8 HCV program were depleted effective this fiscal
year. In order to continue the program oversight and management at its current level of
service, additional funds are required to cover the costs for this fiscal year(13/14).
Table A and B below summarize the administrative costs required to manage the various
programs and the current revenue shortfall.
TABLE A
SHORTFALL AFTER GRANT FUNDING APPLIED Grant Funding Actual
Housing Program for Admin. Admin. Delta
Costs Costs
CDBG $61,000 $71,000 < =$10,000 >
HOME $4,000 $10,000 < =$6,000 >
Section 8 $94,000 $159,000 < =$65,000 >
Local Programs $7,0001 $57,000 < =$50,000 >
Revenues from Pac Pines allocated to the Affordable Housing Fund for admin costs.
TABLE B
SHORTFALL AFTER CURRENT GENERAL FUND ALLOCATION)
Housing Delta from Outstanding
Program i Allocation Balance
CDBG < =$10,000 > =$10,000 $0
HOME <=$6,000 > =$6,000 $0
Section 8 < =$65,000 > =$33,000 <=$32,000 >
Local Programs I < =$50,000 > =$50,000 $0
'The General Fund allocation was anticipated with the annual FY2013/14 budget.
C. Section 8 HAP Revenue Shortfall
The section above discussed the shortfall in program administration; this section
addresses the program funding shortfall relative to the HAP of the Section 8 HCV
program.
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Over time, HUD has moved from fully funding a housing authority's voucher allocation
to a budget-based allocation. That is to say, HUD provides funding based on the
previous year's expenditure with a small annual inflation adjustment factor.
Unfortunately, this funding methodology tends to create a downward spiral of the
available funds for maintaining level voucher utilization. Over the last five years as HAP
funding has decreased, the number of vouchers being funded has decreased from 132 to
113. There are many variables in attempting to sustain the highest voucher funding, such
as local fair market rents, local rent levels, quantity and availability of affordable rental
units, participant income fluctuations, landlord participation, and rent subsidy and
occupancy standards all of which can require HAP to be expended. It is also important to
keep in mind that unknown landlord and tenant events can occur during the program year
that further impact expenditures such as rent increases and tenant income reductions, both
requiring more HAP to be expended from the program.
The sustainment of the current Section 8 program level is the result of using HAP
reserves to address the funding gap. However, it is anticipated that the HAP reserve will
be exhausted by February 2014.
Table 3 below summarizes the program shortfall. These are estimated numbers given the
current number of vouchers, rent levels, and tenant incomes, which can change month to
month.
TABLE C
SECTION 8 PROGRAM SHORTFALL
Housing 1gram Program Outstanding
Program 1 sts Funding Balance
Section 8 $931,000 $898,000 < =$33,000 >
D. Short and Long-term Solutions
As previously mentioned, the City's Pacific Pines Fund currently has a reserve of
approximately $385,000. Staff proposes to use this funding to cover the need to address
the current shortfall for this fiscal year in program funding for both administrative and
HAP costs. This is a short-term solution to address an immediate need.
With Council direction, staff also proposes to work with the City Finance Department in
the next months to find ongoing program administration and HAP funding solutions and
to present those solutions to the Council as part of the FY2014/15 budget process,
assuming that the Council wishes to continue the various housing programs at their
current levels.
FISCAL IMPACTS:
A transfer from the Pacific Pines Fund to both the Section 8 administrative and HAP accounts
will reduce the reserve in that program; however, this transfer will enable the programs to be
staffed and serviced throughout the end of the 2013/2014 fiscal year.
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RECOMMENDATION:
A. Staff recommends that the Housing Authority of the City of Encinitas Board of
Commissioners take the following actions:
1. Affirm that the City's affordable housing and community development programs
maintain current staffing and service levels; and,
2. Direct staff to find efficiencies in the process in order to minimize administrative
and HAP program costs without sacrificing services.
B. Staff recommends the City Council take the following actions:
1. Transfer funding from the Pacific Pines Affordable Housing Fund Program reserves
to cover both current fiscal year administrative and HAP costs associated with the
City's affordable housing and community development programs; and,
2. Direct the City Manager, Finance Director and Planning & Building Director to fund
the ongoing program administration and HAP costs that are not covered under
Federal grants and further address the issue and present solutions to the Council as
part of the FY2014/15 budget process.
ATTACHMENTS:
Attachment A—Summary Program Sheets
Attachment B —Affordable Housing Summary
Attachment C—Power Point Presentation
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ATTACHMENT A
SUMMARY PROGRAM SHEETS
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Community Development Block Grant Program
Purpose: The Community Development Block Grant (CDBG) Program is a federal housing and
community development program administered by the Department of Housing and Urban
Development (HUD). The annual grant is provided to eligible local and state governments to
ensure that needed affordable housing and community development activities are implemented
within communities. Unlike categorical grants for specific purposes, this block grant allows the
local jurisdiction flexibility in selecting and funding eligible activities under the program
regulations. While there are many eligible activities, an activity must meet a national objective,
which the most often objective is to provide assistance to a lower income household or lower
income area. The local jurisdiction determines the community needs, its goals, priorities, and
activities for the use of CDBG funds through a five-year plan (the Consolidated Plan). During
the five-year period, annual Action Plans implement those identified goals, priorities and
activities. The City has been a CDBG entitlement jurisdiction since 1990.
Benefits:
- Eligible activities are: public services, acquisition, rehabilitation, facility improvements,
and infrastructure projects.
- Over five years, the annual grant has averaged approximately$375,000 (current year
approximately$306,000).
- 20 percent of the annual funds can be used for program administration ... over last five
years has averaged approximately$75,000 (current year approximately$61,000)
- Over last five years, an approximate 36 percent funding reduction
- Over the last five years, the average annual assisted has been 3,645 persons
- Over the last five years, a total of approximately$1,300,000 has been expended on
capital improvement activities, such as curb, gutter and sidewalks along K Street, Melba
Road, and Balour Drive.
Administrative Cost: Program staffing: .70 FTE (Housing Administrator—45% /Housing Intern
—25% - Based on a full-time Intern position.)
Fiscal Year 2009 2010 2011 2012 2013 2014
Grant Fund* $396,456 $401,614 $434,190 $363,571 $276,701 $305,694
Admin. Revenue** $79,291 $80,322 $86,838 $72,714 $55,340 $61,139
Admin. Cost $62,787 $66,292 $68,454 $69,187 $66,683 $69,615
*Dollar amount is total grant—includes program&administrative funds.
**Based on 20%of the grant fund.
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HOME Investment Partnership Program
Purpose: The HOME Investment Partnership (HOME) Program is a federal housing program
administered by the Department of Housing and Urban Development (HUD). The annual grant
is provided to eligible local and state governments for the purpose of affordable housing
assistance to lower income households. The four basic affordable housing eligible activities are:
new construction; acquisition and/or rehabilitation; homeownership; and, rental assistance.
Since 1994, the City has been a member of the San Diego County HOME Consortium, which is
comprised of the County and six cities. The County is the entitlement jurisdiction lead and
distributes funding to the member jurisdictions based on an agreed formula.
Benefits:
- City has provided assistance to new construction, acquisition, rehabilitation,
homeownership, and rental assistance.
- Over five years, the annual grant has averaged approximately$194,000 (current year
approximately$113,000).
- In addition to the annual activity funds, additional program administration revenue is
provided ... over last five years has averaged approximately$6,000 (current year
approximately$3,600)
- Over last five years, an approximate 52 percent funding reduction
- Over the last five years, the total assisted has been 112 persons
- Over the last five years, a total of approximately$1,750,000 has been expended on new
construction (Iris Apartments), rehabilitation(Residential Rehabilitation Program, which
provides grants/loans for lower income homeowners), and rental assistance (Tenant-
Based Rental Assistance Program, which provides rental assistance payments to lower
income households).
Administrative Cost: Program staffing: .25 FTE (Housing Administrator— 10%/Housing Intern
— 15% - Based on a full-time Intern position.)
Fiscal Year 2009 2010 2011 2012 2013 2014
Grant Fund $199,356 $230,294 $227,944 $200,707 $111,318 $112,997
Admin. Revenue* $6,398 $7,164 $7,088 $6,241 $3,573 $3,626
Admin. Cost $17,292 $18,554 $19,168 $18,686 $18,128 $19,376
*Flat amount in addition to program grant.
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Section 8 Housing Choice Voucher Program
Purpose: The Section 8 Housing Choice Voucher (Section 8) Program is federal rental
assistance program administered by the Department of Housing and Urban Development (HUD).
The annual grant is provided to qualifying housing authorities that have been allocated vouchers
from HUD for the purpose of providing a rental housing assistance payment (HAP)to very low
income household participants. The Section 8 participant pays approximately 30—40 percent of
their income toward the rent and the housing authority pays the difference to participating
landlords. Since 1995,the City, through its Housing Authority, has received Section 8 program
funds.
Benefits:
- Over five years, the annual HAP grant has averaged approximately $950,000 (current
year approximately $900,000). Over last five years, an approximate 18 percent HAP
funding reduction. Current program level requires use of additional revenue from
Section 8 reserves.
- In addition to the HAP grant funds, the Housing Authority receives a program
administrative fee for every voucher(i.e., unit)under lease at the first of each month.
The administrative fee over last five years has averaged approximately$125,000 (current
year estimate is approximately $89,000). As the program size is reduced, the
administrative fee revenue is reduced. Currently, administrative costs are supported with
revenue from Section 8 reserves. Additional revenue fees for administering another
housing authority participants (i.e., port-ins) contributes to administrative revenue.
- Over the last five years, the annual average assisted has been 123 households (currently
109 households assisted).
- Over the last five years, a total of approximately$4,750,000 has been expended on rental
assistance.
- Program staffing: 1.55 FTE (Housing Administrator— 15%/Program Coordinator—
100%/Program Assistant—40%)
Fiscal Year 2009 2010 2011 2012 2013 2014
Grant Fund $1,171,950 $1,031,204 $966,101 $959,718 $959,718 $898,629
Admin. Revenue $123,433* $129,176* $134,700* $119,700* $119,700* $94,234*
Admin. Cost $129,519 $134,464 $139,353 $147,102 $142,302 $143,115
*Includes Port-in Administrative Revenue—FY2014 estimated at$6,274
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Non-Federal Housing Programs and Activities
Purpose: In addition to federal housing programs, staff administers a variety of affordable
housing programs and activities. These programs and activities are: the Inclusionary Housing
Program, the Density Bonus Program, the Housing Authority Affordable Housing Program, the
Affordable Housing Fund Program, the Affordable Dwelling Unit Program, the Affordable
Homebuyer Program, the Affordable Housing Monitoring Program, and Customer Service
activities. All, except the Housing Authority Affordable Housing Program do not have non-
general fund revenue to offset the administrative cost.
Benefits:
- Inclusionary Housing Program has created 94 affordable units for rental or
homeownership.
- Density Bonus Program has created 26 affordable units for rental or homeownership.
- Housing Authority Affordable Housing Program has acquired and manages 16 affordable
units for rental. The program generates positive annual cash flow and currently has
approximately$385,000 in reserves.
- Affordable Housing Fund Program has created 93 affordable units for rental.
- Affordable Dwelling Unit Program has legalized 35 affordable units for rental.
- The Affordable Homeownership Program assisted 18 homebuyers purchase an affordable
home.
- Affordable Housing Program annually monitors 285 affordable units to ensure
compliance.
- Customer Service activities include counter and phone assistance for individuals seeking
affordable housing, developer assistance, lender related activities, fair housing assistance,
etc.
Administrative Cost: Program staffing: .40 FTE (Housing Administrator— 30%/Housing Intern
— 10% - Based on a full-time Intern position.)
Fiscal Year 2009 2010 2011 2012 2013 2014
Grant Fund $0 $0 $0 $0 $0 $0
Admin. Revenue* $4,437 $6,241 $6,714 $6,435 $6,435 $6,586
Admin. Cost $39,506 $41,496 $42,842 $43,787 $42,117 $43,653
*Revenue from Housing Authority Affordable Housing Program—Pacific Pines
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ATTACHMENT B
AFFORDABLE HOUSING SUMMARY
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The City of Encinitas
Affordable Housing Summary
Density Bonus
In the state of California,Density Bonus law requires that subdivisions requesting certain density increases provide
affordable housing units for rent or sale to lower-income households. Density bonus units are typically restricted at
50%-80%of area median income and are restricted for a period of 30 years. These units are monitored on an
annual basis.
The following table shows the number of Density Bonus units in each of the five communities.
Cardiff Old Encinitas New Encinitas Olivenhain TOTAL
25 2 3 12 1 43
The following table shows the status of the past and currently planned Density Bonus projects.
Transferred to Iris Built and Sold=Built and Rented Planned—not built TOTAL
10 1 13 17 43
***Number of built Density Bonus units that are monitored 26
Inclusionary
The City's Inclusionary Ordinance requires that subdivisions of ten or more units reserve at least ten percent of the
housing units as affordable.Inclusionary units may be rented,sold to a lower-income household or an in-lieu fee
may be paid.Typically,inclusionary units are restricted at 50%of Area Median Income and remain affordable for a
period of 55 years. These units are monitored on an annual basis.
The following table shows the number of inclusionary units in each of the five communities.
Leucadia---= Cardiff IF Old Encinitas New Encinitas Olivenhain TOTAL
13 1 6 12 1 33
The following table shows the status of past and currently planned Inclusionary projects. Some of the planned units
may not be built,as the developer has the choice to pay an in-lieu fee.
Transferred to m Built and Sold Built and Rented Planned—not In-Lieu Fee TOTAL
Iris built Paid
10 4 13 3 3 33
***Number of built inclusionary units that are monitored 27
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Inclusionary Accessory Unit
The Inclusionary Accessory unit policy allowed affordable accessory units to satisfy the inclusionary requirement
for subdivisions of ten or more.The accessory unit is affordable only if the owner of the property selects to rent to a
lower-income household.Typically,inclusionary accessory units are restricted at 50%of Area Median Income for a
period of 55 years.The City does not currently allow accessory units to satisfy the inclusionary requirement.These
units are monitored on an annual basis.
The following table shows the number of inclusionary accessory units in each of the five communities.
Cardiff Old Encinitas New Encinitas TOTAL
31 4 22 3 7 67
Homebuyer Assistance Program
These units were made available through the City's Inclusionary Ordinance and purchased by lower-income first-
time homebuyer households.Federal funds were also leveraged to provide `gap' funding assistance to some of the
homebuyers.A deed of trust and affordable housing agreement was recorded for each unit.Currently,the
agreements allow the homeowner to rent the home to another low-income family.Typically,these units are
affordable for a period of 55 years and are monitored on an annual basis.
The following table shows the number of homebuyer units in each of the five communities.
Leucadia--= Cardiff Old Encinitas New Encinitas Olivenhain TOTAL
4 0 14 0 0 18
Affordable Housing Program
Developments funded through the City of Encinitas and units are typically restricted at 50 or 80 percent of Area
Median Income for a period of 55 years. These units are monitored on an annual basis.
Old Encinitas New Encinitas Olivenhain TOTAL
1 4 44 44 0 93
Housing Authority Owned
The Housing Authority owns 16 condominiums(one-and two-bedroom)at Pacific Pines in New Encinitas.One of
the primary motivations to purchase the units was to provide Section 8 Housing Choice Voucher tenants an option
for an affordable rental unit.As a result,many of the units are currently occupied by Section 8 tenants,and four of
the units are currently restricted by the HOME program. These units are restricted in perpetuity.Currently,the
Housing Authority utilizes the property management services of Hunter Properties to manage all 16 of the units.
These units are monitored on an annual basis.
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Affordable Dwelling Unit
Homeowners with existing illegal units are given an opportunity to bring the unit to conformity with building code
requirements and restrict the unit to lower-income households.Affordable Dwelling Units are typically restricted in
perpetuity and are monitored on an annual basis.
The following table shows the number of Affordable Dwelling Units in each of the communities.
Leucadia Cardiff 0 Old Encinitas New Encinitas Olivenhain TOTAL
8 8 19 0 0 35
Illegal Dwelling Unit
Homeowners with existing illegal units are given an opportunity to bring the unit to conformity with building code
requirements and restrict the unit to lower-income households.This program is now the Affordable Dwelling Unit
program.These units are typically restricted in perpetuity and are monitored on an annual basis.
The following table shows the number of Illegal Dwelling units in each of the five communities.
Leucadia Cardiff JW Old Encinitas New Encinitas Olivenhain TOTAL
1 0 2 0 0 3
HOME Program
The HOME Investment Partnership is a federally funded program for the creation of new affordable housing,first-
time homebuyer,acquisition and rehabilitation,tenant-based rental assistance,and residential rehabilitation.The
City of Encinitas receives HOME funds through its participation in the HOME Consortium,which is administered
by the County of San Diego.The City typically receives about$100,000 in HOME funds annually.The City
currently uses the HOME funds for a Tenant-based Rental Assistance program,Residential Rehabilitation Program,
and program administration.When opportunities arise,HOME funds have been used to fund new construction of
affordable units. In such cases,HOME funds are leveraged with other funding sources and/or policy requirements,
such as Density Bonus and Inclusionary.Therefore,HOME units are not stand-alone units,meaning;they are not in
addition to the affordable units already discussed in previous sections.
For new construction,the HOME program has a unique set of requirements(income and rent restrictions,for
example)which typically remain in effect for 20 years.These units are monitored on an annual basis.
The following table shows the units restricted by the HOME program in each of the five communities.
ardiff ew ncnnta TOTAL
11 0 2 25 0 38
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TOTAL OF ALL AFFORDABLE HOUSING UNITS
Leucadia Cardiff Old Encinitas New Encinitas Olivenhain TOTAL
Policy
Density Bonus 13 3 10 0 26
Inclusionary 10 5 12 27
Inclusionary Accessory 31 4 22 3 7 67
Homebuyer 4 14 18
Affordable Housing 1 4 44 44 93
Housing Authority Owned 16 16
ADU 8 8 19 35
IDU 1 2 3
TOTAL 68 16 125 69 7 285
TOTAL OF ALL AFFORDABLE HOUSING UNITS INCLUDING
PLANNED - NOT BUILT
Leucadia Cardiff Old Encinitas New Encinitas Olivenhain TOTAL
Policy
Density Bonus 25 2 3 12 1 43
Inclusionary 12 5 12 1 30
Inclusionary Accessory 31 4 22 3 7 67
Homebuyer 4 14 18
Affordable Housing 1 4 44 44 93
Housing Authority Owned 16 16
ADU s s 19 35
IDU 1 2 3
TOTAL 82 18 125 71 9 305
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ATTACHMENT C
POWER POINT PRESENTATION
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October 23, 2011,
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Presentation Overview
• Overview of the Programs
• Funding Issues and Opportunities
• Recommendations
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•
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v - the bgra
S
10/23/2013 Item #1 Page 21
Program Overview
• Community Development Block Grant
✓ Grant program to revitalize
neighborhoods
✓ Participant since 1990
✓ Roughly $1 .3M spent on capital
improvements and low income
housing rehab/repair
Program Overview
• HOME Program W W W
✓ Unit acquisition , construction ,
rental assistance, res rehab/repair
✓ Participant since 1994
✓ $1 .8M spent over past 5 years
✓ 112 households benefited
Program Overview
• Section 8
✓ Rental assistance program for low-
income families, elderly and
disabled
✓ Participant since 1995
✓ $4.7M over the past 5 years
Currently, 110 vouchers
(participants)
Program Overview
• Density Bonus Law (State)
✓ Increase a project's density if
certain units are set aside as
affordable
v/ Restricted for 30 years
✓ To date, 43 units approved ; 26
constructed
Program Overview
0
Iq
Inclusionary Ordinance
✓ Requires one affordable unit for
every ten lots
✓ Allows in-lieu fee
✓ $781 k over the past 5 years ; used
to develop Iris Apartments
Program Overview
IF W �
• Affordable Housing Fund Program
✓ Construction , acquisition and 61
rehabilitation
✓ Comes from in-lieu fees from
Inclusionary Housing Requirement
Purchased 16 units in Pacific Pines
✓ Affordable rents to tenants at 80%
or less of AMI
Program Overview
• Current Staffing Levels
Iq
✓ 1 .0 FTE - Housing Administrator
✓ 1 .0 FTE - Program Coordinator
✓ .4 FTE - Program Assistant
✓ 0.5 FTE - Adv. Planning Intern
11
10/23/2013 Item #1 Page 29
Admin . Funding
• Portion of grant funding can apply
towards admin costs
• Funding has steadily decreased
over past 5 years
Anticipate that funding will
� continue to decrease in
foreseeable future
�re
• » 1r. IIre
611116
• 1101•
DB
� 1.000
! 1 .000
< 1 10.000
ROME
� 4.000
� 1 0.000
< 4600 �s
Section 8
x$94.000
S 15 9.000
< -$65!000 r:}
Local Programs
�VmOOO1
. .000
< - 0.000 }
'Re-venues from Fac Fines allocated to the Affordable Housing Fund for admin costs
13
10/23/2013 Item #1 Page 31
lkclmin - Funding rM
0
F-I
;7C:HTIC
10/23/2013 Item #1 Page 32
Program Funding
• Housing Assistance Payment
( HAP) program is underfunded
F-I
• Many variables to sustaining
highest voucher funding
• Change in how program is funded
• Push from HUD to use up reserves
Program Funding
� ww
• Shortfall
Housing
Bropram
1 �
Program
Costs
Program
Funding
Outstanding
Balance
Funding Solution
qw
• Currently have .~--.$385k in reserves
( Pacific Pines)
• Funding is not allocated - must be
used for affordable housing
efff o rts
• Can be applied to cover current
deficit (short-term solution)
' • 11111 � •
.A
W
10/23/2013 Item #1 Page 36
Recommendation
r VqP" � ww
• Housing Authority Board
✓ Confirm that the City should maintain
existing programs at current staffing
and service levels
✓ Direct staff to find efficiencies that
help minimize and reduce
administrative costs
Recommendation
• City Council
✓ Transfer funding from the Pacific
Pines reserves to cover current year
shortfalls
✓ Direct City Manager to ensure
programs are adequately funded as
part of the budget process.
Mi
JAAA h*.:!l.a
J 5, INLi PHUCl
� Item 1 �
October 23, 2011,
A Joint Hearing of th
.
.
10/23/2013 Item #1 Page 39
Claudia Bingham
From: Diane Langager
Sent: Wednesday, October 23, 2013 3:32 PM
To: Kathy Hollywood; Claudia Bingham; Brandi Lewis
Cc: Stephanie Kaufmann;Jeff Murphy, Gus Vina; lace Schwarm; Glenn Sabine
Subject: Agenda Report Addendum for tonight's Special Meeting Item #1
Attachments: CC 10232013 Revised Recommendation.doc
Please find an Agenda Report Addendum for Item 1 of the joint Council/Housing Authority meeting. Please distribute to
Council, public and others as appropriate. I will get a copy to the Housing Authority tenant commissioners.
Thanks.
Diane S. Langager
Principal Planner
City of Encinitas
505 S. Vulcan Avenue
Encinitas, CA 92024
P 760 633-2714
F 760 633-2818
dlanaaa(a),encinitasca.aov
f>
1
Agenda Report Addendum
Special City Council & Housing Authority Joint Meeting
October 23, 2013
Agenda Item #1
Based on further consideration and consultation with the City Attorney, there is a potential
conflict of interest related to actions involving the Section 8 program and the two appointed
Housing Authority Commissioners. As such, those Commissioners will need to recuse
themselves from the discussion, deliberation and vote related to the Section 8 program.
Therefore, the recommendation section of the staff report has been revised as follows:
A. Staff recommends that the full Housing Authority of the City of Encinitas Board of
Commissioners take the following actions:
1. Affirm that the City's affordable housing and community development
programs for CDBG, HOME and other local programs maintain current
staffing and service levels; and,
2. Direct staff to find efficiencies in the process in order to minimize
administrative program costs without sacrificing services.
B. Staff recommends that the Housing Authority of the City of Encinitas Board of
Commissioners (Housing Authority Commissioners recused) take the following
actions:
1. Affirm that the City's affordable housing and community development
programs for Section 8 Housing Choice Voucher program maintain current
staffing and service levels; and,
2. Direct staff to find efficiencies in the process in order to minimize
administrative and HAP program costs without sacrificing services, and
3. Transfer funding from the Pacific Pines Affordable Housing Fund Program
reserves to cover both current fiscal year administrative and HAP costs
associated with the City's affordable housing and community development
programs.
C. Staff recommends the City Council take the following actions:
1. Direct the City Manager, Finance Director and Planning & Building Director
to fund the ongoing program administration and HAP costs that are not
covered under Federal grants and further address the issue and present
solutions to the Council as part of the FY2014/15 budget process.
Brandi Lewis
�rom: Diane Langager
Sent: Wednesday, October 23, 2013 3:32 PM
To: Kathy Hollywood; Claudia Bingham; Brandi Lewis
Cc: Stephanie Kaufmann; Jeff Murphy; Gus Vina; lace Schwarm; Glenn Sabine
Subject: Agenda Report Addendum for tonight's Special Meeting Item #1
Attachments: CC 10232013 Revised Recommendation.doc
Please find an Agenda Report Addendum for Item 1 of the joint Council/Housing Authority meeting. Please distribute to
Council, public and others as appropriate. I will get a copy to the Housing Authority tenant commissioners.
Thanks.
Diane S. Langager
Principal Planner
City of Encinitas
505 S. Vulcan Avenue
Encinitas, CA 92024
P 760 633-2714
F 760 633-2818
d lanaag(0)encinitasca.gov
1
Agenda Report Addendum
Special City Council & Housing Authority Joint Meeting
• October 23, 2013
Agenda Item #1
Based on further consideration and consultation with the City Attorney, there is a potential
conflict of interest related to actions involving the Section 8 program and the two appointed
Housing Authority Commissioners. As such, those Commissioners will need to recuse
themselves from the discussion, deliberation and vote related to the Section 8 program.
Therefore, the recommendation section of the staff report has been revised as follows:
A. Staff recommends that the full Housing Authority of the City of Encinitas Board of
Commissioners take the following actions:
1. Affirm that the City's affordable housing and community development
programs for CDBG, HOME and other local programs maintain current
staffing and service levels; and,
2. Direct staff to find efficiencies in the process in order to minimize
administrative program costs without sacrificing services.
B. Staff recommends that the Housing Authority of the City of Encinitas Board of
Commissioners (Housing Authority Commissioners recused) take the following
actions:
1. Affirm that the City's affordable housing and community development
programs for Section 8 Housing Choice Voucher program maintain current
staffing and service levels; and,
2. Direct staff to find efficiencies in the process in order to minimize
administrative and HAP program costs without sacrificing services, and
3. Transfer funding from the Pacific Pines Affordable Housing Fund Program
reserves to cover both current fiscal year administrative and HAP costs
associated with the City's affordable housing and community development
programs.
C. Staff recommends the City Council take the following actions:
1. Direct the City Manager, Finance Director and Planning & Building Director
to fund the ongoing program administration and HAP costs that are not
covered under Federal grants and further address the issue and present
solutions to the Council as part of the FY2014/15 budget process.
•
Brandi Lewis
*rom: Julie Graboi <serjgraboi @hotmail.com>
Sent: Wednesday, October 23, 2013 10:26 AM
To: Council Members; Kathy Hollywood
Subject: Whitley Case, Closed Session Item
Attachments: WhitleyCase.docx
Dear Encinitas Council,
Please accept the attached letter into the record as it pertains to the Whitley case for tonight's closed session.
Thank you,
Julie Graboi
•
i
• Topic: Whitley Case
Dear Mayor Barth, Deputy Mayor Shaffer and Council Members Gaspar, Kranz, and Muir;
I am writing to ask you to end the City's involvement with the Whitley case. I ask that you not pursue an
appeal for a case that the City has already lost. Below, I provide a list of reasons that I ask for you to
consider as to why you should drop this case and take no further action.
1. The decision to sue does not support the City's position to provide low income housing.
Council has unanimously stated that you strongly support affordable housing in Encinitas. I understand
that Mark Whitley had offered to negotiate with the City, so that up to 3 affordable housing units could
have been garnered by the City to be counted for its low-income housing inventory. Instead of
accepting this win/win solution to a complaint and avoiding legal costs charged to taxpayers, the City
decided to sue Mr.Whitley and subsequently lost the case and the units. Shouldn't the actions that you
take as Council members support the philosophies and values that you espouse?
2.This case appears to be treated differently than cases involving former mayors and council
members.
There is a rumor that former mayors and council members either own or have lived in properties with
similar issues of nonconformance to City codes. As a person with no first-hand knowledge of the truth
of these allegations, I am only reporting what I have heard. However, please keep in mind that
perception can become a reality in the minds of voters. If there is a feeling of unfairness and hypocrisy
in the application of rules, voters are not going to forget about it. If you vote to pursue this case, even
after losing, and when it is said that rules are being applied inconsistently, this issue may come back to
bite this Council at a later time. Since it appears that this issue began in 2007, 1 am concerned that our
current council does not have complete nor accurate staff information for a basis to make decisions.
3.The City has already lost. Why put good money after bad?
It seems that the City has already spent hundreds of thousands of dollars in pursuit of a case that
contradicts the stated values and philosophy of the City and of our sitting Council, all of whom support
affordable housing. Please use your leadership and your power of the purse to do something
constructive with funds slated for an appeal. Don't waste more taxpayer dollars on this futile effort.
4. A long-term resident and his family have been emotionally and financially harmed by these actions.
Mark Whitley and his family have lived in Encinitas for over 40 years, and Mr. Whitley has done positive
things for the City like working to preserve the Boat Houses. As an Encinitas citizen myself for over 20
years, I would like to see our City focus on constructive issues and not use our money and staff time to
pursue negative and ultimately failed agendas that harm individual citizens.
Sincerely,
Julie Graboi