COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Housing

DATE:

February 29, 2008

BOARD MEETING DATE:

April 8, 2008

SPECIAL NOTICE/HEARING

None

VOTE REQUIRED

Majority

TO:

Honorable Board of Supervisors

FROM:

Duane Bay, Director, Department of Housing

SUBJECT:

Approve an Agreement with EPA CAN DO to assist with the acquisition of a single family house in East Palo Alto for use as affordable housing

Recommendation

Adopt a Resolution:

1.

Authorizing execution of an Agreement with EPA CAN DO in the amount of $125,000 to assist with the acquisition of a single family house for use as affordable rental housing for the term of February 20, 2008 through December 31, 2008; and

2.

Authorizing the Director of the Department of Housing or the Director's designee to execute contract amendments which modify the County's maximum fiscal obligation by no more than $25,000 (in aggregate), and/or modify the contract term and/or services so long as the modified term or services is/are within the current or revised fiscal provisions.

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 adding an additional unit to the stock of affordable housing.

Performance Measures:

Measure

FY 2006-07
Actual

FY 2007-08
Target

Number of County-supported affordable housing units completed and occupied

321

400

Background

In 2005 we assisted EPA CAN DO with the acquisition of two properties containing four rental units on University avenue across from their Nugent Square development. The plan is to eventually assemble enough parcels to do another 40-50 unit development similar to Nugent Square. EPA CAN DO is in contact with the various property owners and is actively negotiating with them to acquire the sites. In the mean time, the properties will continue to be rented out as affordable housing.

Discussion

EPA CAN DO has negotiated the acquisition of a single family house on the same block of University Avenue. The purchase price is $400,000; they have obtained a conventional loan for $275,000 and will pay all closing costs and other purchase expenses from their own funds. Our funds will be placed on the property as a second mortgage with a term of 30 years.

Although we have been informed by HUD of the amount of our new HOME program allocation, the funds will not be available before the start of the next fiscal year, July 1, 2008. The CHDO set-aside from these HOME funds which can only be awarded to a Community Housing Development Organization is $242,628. EPA CAN DO qualifies as a CHDO and this project is eligible for HOME CHDO expenditure. Because these funds will not be available until July 1, EPA CAN DO has made arrangements with Bay Area LISC for a bridge loan to cover the period between the sellers required close of escrow and the availability of our funding. This parcel makes the third parcel out of six that will eventually be assembled to create a larger affordable housing development. In the mean time this house will continue to be used as affordable rental housing for the term of the loan.

The contractor has assured compliance with all contract provisions that are required by County ordinance and administrative memoranda, including but not limited to insurance, hold harmless, non-discrimination and equal benefits, and the County's Contractor Employee Jury Service Ordinance.

Real Property Services has reviewed the agreement and County Counsel has reviewed and approved the Resolution and Agreement as to form. Risk Management has reviewed and approved the insurance coverage provided by the Contractor.

A complete electronic copy of this report and all referenced resolutions and agreements are available online and complete paper versions are available for review in the Clerk of the Board’s office.

Fiscal Impact

The County’s total obligation under this Agreement is $125,000, from 2008 HOME funds. There is no Net County Cost.