Inter-Departmental Correspondence

Department of Housing



June 22, 2011


July 12, 2011







Honorable Board of Supervisors (Sitting as the Board of Commissioners of the Housing Authority)


Duane Bay, Director, Department of Housing

William Lowell, Executive Director, Housing Authority


Resolution Authorizing the Execution and Recordation of a Declaration of Trust for Midway Village



Adopt Resolution No. 2011-05 authorizing the execution and recordation of a Declaration of Trust for Midway Village.



The Housing Authority of County of San Mateo (HACSM) acquired surplus real property in Daly City from the U.S. Navy and in 1975 redeveloped the site with the construction of Midway Village Public Housing. As public housing agency (PHA) inventory, Midway Village was being negatively impacted operationally by dwindling HUD subsidies for operations and modernization. Because disposition out of public housing status would qualify the project to receive 100% project-based vouchers (i.e., Section 8 vouchers), thereby offering healthy project cash flow relief, HACSM “converted” Midway Village operationally from receiving PHA subsidies to project-based vouchers as of May 1, 2011.

This conversion to a project-based funding model was effectuated by two Board actions considered and approved May 11, 2010: (1) Resolution No. 2010-04, which authorized HACSM to submit an application to HUD for disposition of Midway Village to an HACSM-affiliated nonprofit to own and operate as affordable housing; and (2) Resolution No. 2010-05, which authorized the Department of Housing to establish SAMCHAI, the HACSM-affiliated nonprofit, to be the receiving entity of Midway Village. Then on January 27, 2011, HUD formally approved disposition of Midway Village. Consummation of the disposition process requires removal of a recorded Declaration of Trust (DOT).

HUD requires that a DOT be recorded against all property acquired, developed, maintained or assisted with funds under the U.S. Housing Act of 1937, the federal law governing public housing agency units. The DOT includes an affordability covenant that grants HUD an interest in the associated property, and specifically requires the property to be operated in accordance with all public housing federal requirements, including the requirement not to convey or otherwise encumber the property unless expressly authorized by federal law and/or HUD. DOTs have minimum terms of 10, 20, or 30 years depending on the type of HUD funding associated with the DOT. PHA properties that continue to receive on-going HUD funding for operations, maintenance or physical improvements must ensure that the DOT is current.



Staff’s recent review of Midway Village’s property title report revealed that the DOT was never recorded when the development was constructed in the mid-1970s. In order for Midway Village to comply with the PHA disposition process, HUD requires that the Housing Authority first record a DOT against the property, so that HUD can then approve its removal. HUD has advised that the DOT associated with modernization funding be recorded, acknowledging that the 20-year term will subsequently be truncated when the DOT is removed.


The Resolution and Agreement have been reviewed and approved by County Counsel as to form.


This action contributes to the Shared Vision 2025 outcome of a Livable Community by allowing affordable housing to be financially sustainable over the long term.



There is no Net County Cost associated with this action.