|
|
|
|
|
|
|
|
COUNTY OF SAN MATEO
Inter-Departmental Correspondence
|
Department of Housing
|
|
|
DATE:
|
April 12, 2006
|
BOARD MEETING DATE:
|
May 2, 2006
|
SPECIAL NOTICE/HEARING
|
10-Day Publication, Public Hearing
|
VOTE REQUIRED
|
Majority
|
|
|
TO:
|
Honorable Board of Supervisors
|
FROM:
|
Duane Bay, Director, Department of Housing
|
SUBJECT:
|
Submission of Application to the U.S. Department of Housing and Urban Development for a Section 108 Loan to Assist the Development of the Colma Transit Village Apartments
|
|
|
Recommendation
|
A.
|
Conduct a public hearing; and
|
|
|
B.
|
Adopt a Resolution:
|
|
|
1.
|
Amending the FY 2005-2006 Action Plan to the San Mateo County Community Development Block Grant Program; and
|
|
|
2.
|
Authorizing submission of an application to the U.S. Department of Housing and Urban Development for Section 108 loan guarantee funds for the development of the Colma Transit Village Apartments; and
|
|
|
3.
|
Designating the Director of the Department of Housing to execute documents with HUD in connection with the Section 108 Loan.
|
|
|
Vision Alignment
|
Commitment: Offer a full range of housing choices.
Goal 9: Housing exists for people at all income levels and for all generations of families.
|
|
|
The action contributes to this commitment and goal by increasing the affordable housing stock in this County in that the funding would allow the housing to serve a much lower income group. As shown on the following table, the County has been proactive in moving projects along the housing pipeline.
|
|
|
Performance Measures:
|
Measure
|
FY 2004-05
Actual
|
FY 2005-06
Projected
|
Number of County-supported units under development during the Fiscal Year
|
667
|
960
|
|
|
Background
|
BRIDGE Housing Corporation, through its affiliate nonprofit, BRIDGE Regional Partners, is developing 130 units of family housing on a parcel of triangular property adjacent to the Colma BART Station. The project is in conformance with the Colma Area Specific Plan for higher density housing on this site. In FY 05-06, the County approved $500,000 of Community Development Block Grant (CDBG) funds to assist in predevelopment. At that time, BRIDGE, indicated it would request additional funding over the next two years to further project development.
In November 2005, the County Board of Supervisors approved an application to compete for a HELP loan on behalf of the project in the amount of $1.5 million provided by the California Housing Finance Agency (CalHFA). In March 2006, CalHFA announced that the project was successful in winning this loan.
|
|
|
Discussion
|
On February 23, 2006, the Housing and Community Development Committee (HCDC), the public advisory body to the Board of Supervisors on CDBG matters, met to review BRIDGE’s request for a HUD Section 108 loan for up to $7.145 million support the project. Section 108 is a loan guarantee program that provides local communities with augmented funding for housing and community development activities. The HCDC recommends that the Board of Supervisors approve the Section 108 loan. The HCDC also wishes to convey to the Board that it considered serious concerns regarding the long-term impact of loan repayments on the CDBG Program, delineated below
.
HCDC Support
The HCDC supports the project. The project meets both the CDBG/HOME NOFA and the County workforce housing priorities. The project’s transit-orientation and anchor location at the northern stretch of El Camino would help transform El Camino Real into the Grand Corridor envisioned by County planners. Even as all 130 units will be affordable to very low income households earning between 30 and 50% of median, the site will serve a wider income range as a slice of land will be sold to a market rate developer for townhomes. As such, the site will offer opportunities for both rental and ownership housing types.
HCDC Concern
Two related issues were raised: (1) the impact of Section 108 loan repayments on the County’s future CDBG stream, and (2) the impact of another $3 million of direct CDBG and HOME Investment Partnerships (HOME) dollars to be invested in the project. While the project is requesting $7.145 million of Section 108 funds, it is also depending on an additional $3 million of CDBG and HOME dollars, for a total County subsidy of $10.145 million. (All of these funds will be structured as loans, to be repaid out of surplus cash generated by project operations.)
The Section 108 loan will be executed between HUD and the County of San Mateo. The Section 108 Loan Program requires that a local jurisdiction pledge or set aside future CDBG allocations to guarantee the Section 108 loan repayments for up to 20 years. Revenues generated from the project can be used to offset this payment requirement. In the case of Colma Transit Village, the project is expected to repay the County over a much longer 74-year term.
In particular, the Subcommittee recommended that future CDBG funds pledged for Section 108 loan repayments be limited to the annual 45% portion allocated for housing, consistent with current County allocation guidelines, and not be allowed to impact other categories. Current County policy dictates that the annual CDBG allocation be divided as follows: 45% for housing production and housing rehabilitation programs; 15% for public services; and up to 20% for public facilities. Another 20% is used for program management. (It should be noted that the 15% for public services is the most competitive category for funding, but CDBG Program rules cap this category to only 15% of the annual CDBG allocation.) The Subcommittee’s concern comes amidst the federal trend towards continued reductions in the CDBG Program.
Staff Response
To evaluate the impact of Section 108 loan payments on the CDBG Program, staff prepared a 20-year projection, with various predictions for federal funding cuts over the years. Based on these projections, the impact will only be felt by the housing portion. The CDBG portions for public services and public facilities would not be touched at any point in the 20-year period.
Adding HOME dollars to the County’s net CDBG housing allocation portion (after deducting for the Section 108 loan payments), the County’s housing pool would still be sufficient to fund worthy projects. Including direct CDBG and HOME dollars of $3 million invested in the project, it is projected that over the first eight years of project assistance with CDBG and HOME dollars, the project will impact the County’s CDBG/HOME Housing Fund by an average of 34.5% during this period.
|
|
|
Fiscal Impact
|
Neither the actions in themselves of inclusion of the project in the Action Plan nor the application to HUD for Section 108 funds will create any fiscal impacts or involve net County Cost. Upon HUD approval of a Section 108 loan, the Department of Housing will structure its payback to come only from future CDBG funds and project revenues.
|
|
|