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HomeMy WebLinkAboutItem BAGENDA REPORT DATE: April 22, 2002 TO: Chairperson and Members of the Redevelopment Agency THRU: John B. Bahorski, Executive Director FROM: Lee Whittenberg, Director of Development Services SUBJECT: STATUS REPORT - RENOVATION/RENTAL ASSISTANCE AT A 4 -UNIT APARTMENT AT 1119 OCEAN AVENUE SUMMARY OF REOUEST: Direct staff as to the desire of the Agency to proceed with negotiations regarding rehabilitation and rental assistance of the subject property, if the future property owner desires to pursue such assistance from the Agency. The Agency may direct staff as follows: • Discontinue negotiation process; • Continue negotiation process; • Investigate alternative site locations. BACKGROUND: At the April 8, 2002 City Council meeting several citizens spoke concerning the proposed rehabilitation/rental assistance project at 1119 Ocean Avenue. The Redevelopment Agency on March 25, 2002 had authorized staff to negotiate project terms and conditions for rehabilitation assistance of not to exceed $150,000 and rental assistance of not to exceed $250,000 for a maximum of 25 years to provide assistance for 3 of the 4 units in the existing apartment structure. The public expressed concerns regarding the following major issues, and staff has provided a response to those concerns as requested by the City Council: ❑ Public Concern: Low cost housing should not be provided in the most expensive area of the City; the resident's of Old Town don't deserve this type of program. ❑ Staff Comment: The provision of low- and moderate- income housing should be provided in those areas where low -and moderate- income persons and families reside currently, and where the appropriate type of housing currently exists to meet those needs. RVA AGENDA ITEM V C:NAy Mcummts A \11190cean Avenue Pmjocl.R AStaff Report2.doc \LW -18 -02 Status Report - 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency Staff Report April 22, 2002 Many residents of the City meet the income criteria as either low- or moderate - income persons or families. 2000 Census income information is not available at this time to provide detailed information on this issue. 1998 estimates based on the 1990 Census indicates the following estimated distribution of household income levels: Income Group Households % of Households Very Low ( <50 %) 4,064 30.5% Low (51 -80 %) 1,677 12.6% Moderate (81 -120 %) 2,241 16.8% Above Moderate (120 % +) 5335 40_1% Total 13,317 100.0% Approximately 6,500 household reside within Leisure World, indicating that approximately 1,482 households that resided within the City and outside of Leisure World in 1998 would have qualified as low- or moderate- income families or persons. Those 1,482 households represent approximately 21% of all households in the City not residing within Leisure World; or 1 in 5 households outside of Leisure World. A recent article in the April 17, 2002 issue of the Orange County Register indicates that 446 residents in Seal Beach pay more than 50% of their income in rent; the recognized standard for income/rent ration is between 30 -35 %. Due to the development pattern of Seal Beach, many apartment units still exist within "Old Town' and are believed to provide a majority of the existing housing opportunities for low- and moderate- income persons and families. Based on 1990 Census information, there were 1,011 owner- occupied residences and 2,359 renter - occupied residences in "Old Town" (Census Tract 995.05). 2000 Census information at the Census Tract level is not available at this time. The Center for Demographic Research has provided income estimates for Census Tract 995.02 (Old Town) for 1997, and in comparing to the 1997 income limits for low- and moderate- income housing established by the State of California, the following numbers of low- and moderate -income residents are estimated to have been residing within Old Town in 1997: • Lower income (2- person household) — $34,800 ❑ households below $34,999 — 1,107 (33% of households in Old Town) • Moderate income (2- person household) — $34,801 to $60,700 ❑ Households — between $35,000 to 59,999 — 936 (28% of households in Old Town) ❑ Above Moderate income (2- person household) - $ 60,700+ ❑ Households above $60,000 — 1,294 (39% of households in Old Town) 1119 Oc.. Avmue Pmj=.RDA SretrRepon 2 Stains Repair - 1119 Ocean Aw ... e Rehabilitation Project Redevelopment Agency Staff Report April 22, 1001 Many residents of the City meet the income criteria as either low- or moderate - income persons or families. 2000 Census income information is not available at this time to provide detailed information on this issue. 1998 estimates based on the 1990 Census indicates the following estimated distribution of household income levels: Income Croup Households % of Households Very Low (< 50n /o) 4,064 30.5% Low (51 -80 %) 1,677 12.6% Moderate (81 -120 %) 2,241 16.8% Above Moderate (120 % +) 5 335 4 Total 13,317 100.0% Approximately 6,500 household reside within Leisure World, indicating that approximately 1,482 households that resided within the City and outside of Leisure World in 1998 would have qualified as low- or moderate - income families or persons. Those 1,482 households represent approximately 21% of all households in the City not residing within Leisure World; or I in 5 households outside of Leisure World. A recent article in the April 17, 2002 issue of the Orange County Register indicates that 446 residents in Seal Beach pay more than 50% of their income in rent; the recognized standard for income/rent ration is between 30 -35 %. Due to the development pattern of Seal Beach, many apartment units still exist within "Old Town' and are believed to provide a majority of the existing housing opportunities for low- and moderate - income persons and families. Based on 1990 Census information, there were 1,011 owner - occupied residences and 2,359 renter- occupied residences in "Old Town" (Census Tract 995.05). 2000 Census information at the Census Tract level is not available at this time. The Center for Demographic Research has provided income estimates for Census Tract 995.02 (Old Town) for 1997, and in comparing to the 1997 income limits for low- and moderate - income housing established by the State of California, the following numbers of low- and moderate- income residents are estimated to have been residing within Old Town in 1997: o Lower income (2- person household) — $34,800 ❑ households below $34,999 — 1,107 (33% of households in Old Town) ❑ Moderate income (2- person household) — $34,801 to $60,700 ❑ Households — between $35,000 to 59,999 — 936 (28°% of households in Old Town) 3 Above Moderate income (2- person household) - $ 60,700+ ❑ Households above $60,000 — 1,294 (39% of households in Old Town) 1119 Ocean Avmue PmjaLRDA 91nfi Rc it Status Report - 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency Sniff Report April 22, 2002 If these same general trends are still applicable today, approximately 2,000 households within Old Town out of a total of approximately 3,300 households would currently be considered low- or moderate- income. Many families currently residing within Old Town are believed to be eligible for rental assistance under the current income guidelines, and it is the opinion of staff that those residents do deserve to be assisted by the City if qualified, and in particular if their current housing unit requires upgrading and rehabilitation that can be assisted by the Agency rehabilitation programs. The first priority of the community should be to ensure that existing residents throughout the community are served to the greatest extent possible with whatever assistance programs the Agency determines are appropriate. To say that current renters within the City should not be assisted is unreasonable and probably discriminatory. Due to the development pattern of Seal Beach, many apartment units still exist within "Old Town' and are believed to provide a majority of the existing housing opportunities for low- and moderate- income persons and families. As discussed above, the City has specific zoning provisions in place to allow the continual maintenance of these existing non - conforming residential developments and in certain situations will permit those units to be expanded. Public Concern: This is public housing. ❑ Staff Comment: This assertion is incorrect. Public housing is housing that is owned and managed by a public entity, a City, Redevelopment Agency or Housing Authority. Any participation by the Agency in assisting this particular project would not be in an ownership or management capacity. A potential purchaser of the subject property presented a proposal to the City and the Agency, after deliberation, authorized staff to continue to negotiate the particular rehabilitation and rental assistance aspects of the proposal. The Agency has not imposed a mandate on this property or on any other property to participate in any sort of housing assistance program, and will not. Any participation between the Agency and a property owner is at the desire of the property owner. The Agency cannot force participation in any housing assistance programs made available to the community. Public Concern: This project is mandating "rent control" within the City. ❑ Staff Comment: This assertion is incorrect. "Rent Control" is a formally adopted program by a City that limits the ability of landlords to increase the rent of rental housing units they own, unless the City has approved an increase to the "tent controlled" units. No formal `tent control" program has been contemplated within the City. The `rental assistance" program envisioned as a component of this project would allow the landlord to continue to receive market rent based on the rental rates of similar housing units within similar locations. "Fair market rent" would be determined yearly and adjusted accordingly. 1119 Ocean Avenue Pmjmt nA Sun Report2 Status Report- 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency Staff Report April 22, 1001 The "rental assistance" is an amount of money that would be paid to the landlord by the Agency to bridge the gap between what the market rent is and what a low - or moderate- income person or family would be expected to pay, based on their" particular income situation. As an example, if the "fair market rent' were determined to be $1,500 per month and the rent that the low- or moderate - income person or family would be determined to pay is $1,300 per month, the tenant would pay that rental amount of $1,300 to the landlord and the Agency would pay the difference, $200, to the landlord. The landlord would continue to receive market rent and the tenant may actually see their monthly rental cost decrease, with the difference being made up by the Agency. Public Concern: Redevelopment funds cannot be utilized outside of the Redevelopment Project Area. Staff Comment: Specific provisions of California Redevelopment Law allow for the use of redevelopment agency funds outside of the project area for affordable housing. Pursuant to California Health and Safety Code Section 33334.2(8), an agency may use monies from its Low and Moderate Income Housing Fund outside the redevelopment project area if the Agency and the City Council adopt resolutions with certain findings. In considering the proposal for 1119 Ocean Avenue, the Agency and City Council made those required findings in adopting Agency Resolution No. 02 -1 and City Council Resolution No. 4992. The Agency has undertaken other projects outside of the Project Area boundaries and made similar findings. These other projects were: ❑ acquisition of land and the development of the City Yazd and Police Station facilities at Adolfo Lopez Drive. ❑ Acquisition of master lease for Zoeter School and the conversion to Zoeter Field, the day care facilities, and the rehabilitation of the original school facilities along Pacific Coast Highway to the existing retail center at Pacific Coast Highway and 12th Street. Public Concern: No notification provided regarding the proposed project. ❑ Staff Comment: The matter that was before the Redevelopment Agency and City Council was fully noticed in full compliance with the Brown Act. At the discretion of the Agency board, staff may provide additional notice beyond what the law requires to adjoining property owners of any future project proposals of a similar nature. Staff would suggest adoption of a Policy Statement to address this concern for any future project considerations of a similar nature. Public Concern: This program _ will extend the life of existing non- conforming multiple family residential properties within the City. ❑ Staff Comment: Approval of this type of project would extend the life of a multiple - family residential property. However, without any assistance from the Agency, existing non - conforming, multiple family properties may undertake several types of improvements to those structures, which would also extend the life of a building. Section 28 -2407 of the Code of the City of Seal Beach sets 1119 ncwn Avenue PMiMt.RDA Sean Report 2 Stains Report - 1119 Ocean Avenue Rehabilitation Project Redeveloprnent Agencv Staff Report April 22. 2007 The "rental assistance" is an amount of money that would be paid to the landlord by the Agency to bridge the gap between what the market rent is and what a low - or moderate- income person or family would be expected to pay, based on their particular income situation. As an example, if the "fair market rent' were determined to be $1,500 per month and the rent that the low- or moderate - income person or family would be determined to pay is $1,300 per month, the tenant would pay that rental amount of $1,300 to the landlord and the Agency would pay the difference, $200, to the landlord. The landlord would continue to receive market rent and the tenant may actually see their monthly rental cost decrease, with the difference being made up by the Agency. Public Concern: Redevelopment funds cannot be utilized outside of the Redevelopment Project Area. Staff Comment: Specific provisions of California Redevelopment Law allow for the use of redevelopment agency funds outside of the project area for affordable housing. Pursuant to California Health and Safety Code Section 33334.2(g), an agency may use monies from its Low and Moderate Income Housing Fund outside the redevelopment project area if the Agency and the City Council adopt resolutions with certain findings. In considering the proposal for 1119 Ocean Avenue, the Agency and City Council made those required findings in adopting Agency Resolution No. 02.1 and City Council Resolution No. 4992. The Agency has undertaken other projects outside of the Project Area boundaries and made similar findings. These other projects were: • acquisition of land and the development of the City Yard and Police Station facilities at Adolfo Lopez Drive. • Acquisition of master lease for Zoeter School and the conversion to Zoeter Field, the day care facilities, and the rehabilitation of the original school facilities along Pacific Coast Highway to the existing retail center at Pacific Coast Highway and 12th Street. Public Concern: No notification provided regarding the proposed project. ❑ Staff Comment: The matter that was before the Redevelopment Agency and City Council was fully noticed in full compliance with the Brown Act. At the discretion of the Agency board, staff may provide additional notice beyond what the law requires to adjoining property owners of any future project proposals of a similar nature. Staff would suggest adoption of a Policy Statement to address this concern for any future project considerations of a similar nature. Public Concern: This program will extend the life of existing non- conforming multiple family residential properties within the City. ❑ Staff Comment: Approval of this type of project would extend the life of a multiple - family residential property. However, without any assistance from the Agency, existing non - conforming, multiple family properties may undertake several types of improvements to those structures, which would also extend the life of a building. Section 28 -2407 of the Code of the City of Seal Beach sets 11190=n Aveme PmicaaDA Smlr Report 2 4 Status Report - 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency StaffReport April 22, 2002 forth the types of improvements that can approved for existing non - conforming residential buildings. These provisions of the Code were adopted by the City Council after extensive public hearings before the Planning Commission and City Council. The major thrust of these provisions was to establish guidelines for the maintenance, improvement, and under specific conditions, the expansion of the existing multiple -unit housing inventory within the community. These provisions were determined appropriate to encourage the retention of the existing multiple - unit housing inventory within the community to provide a diverse base of available housing opportunities. The following activities can occur just through approval of a building permit: • Building maintenance • Decorative exterior improvements • Additional windows • Skylights ❑ Solar Systems. The following activities can occur after approval of a "Consent Calendar Plan Review" by the Planning Commission: ❑ Additional balconies and porches; • Additional garages and carports, including tandem garages and carports; • Interior wall modifications and remodeling involving less than 25% of the .interior walls. Additional bathrooms can be added under certain conditions; ❑ Minor enlargements and expansions to single family dwellings and duplexes; ❑ If property is nonconforming due to parking — maximum 288 square foot addition per unit subject to conditions; ❑ Additional bathrooms allowed subject to certain standards • Number of bedrooms may not be increased • Porch or balcony enclosures count as part of the 288 square foot allowable expansion • Planning Commission must make a determination that all feasible parking, given site constraints imposed by the existing building, is provided • Tandem parking spaces may be allowed provided all required setbacks are provided. ❑ Minor enlargements and expansions to three or more units; ❑ Additions which increase the floor area less than 10% of the allowable floor area if property meetings parking standards; ❑ Maximum of 144 square foot addition per unit, up to a maximum of 400 square feet per property if, • Property is non - conforming due to parking and; • A minimum of -1 open and accessible covered space is provided per unit; ❑ Additional bathrooms allowed subject to certain standards ❑ Number of bedrooms may not be increased 1119 Ocean Avmue Projmt.RDA Staff Repoit 2 Status Report - 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency StajjReport April 22, 2002 Porch or balcony enclosures count as part of the 288 square foot allowable expansion Planning Commission must make a determination that all feasible parking, given site constraints imposed by the existing building, is provided Tandem parking spaces may be allowed provided all required setbacks are provided. The following activities can occur after approval of a "Conditional Use Permit" by the Planning Commission: ❑ Additions greater than 10% of the allowable floor ratio if required parking is provided; ❑ Additions greater than 10% of the allowable floor ratio if required parking is provided by tandem parking spaces; ❑ Planning Commission must make a determination that all feasible parking, given site constraints imposed by the existing building, is provided. Public Concern: This proposal would require the City to allow the same structure to be rebuilt if it were destroyed by fire, eta Otherwise the same structure could not be rebuilt. ❑ Staff Comment: Depending on particular parking and density situations on a non - conforming multiple -unit property at the time of damage or destruction, the existing provisions of the Code would allow the same type of structure to be rebuilt. Section 28 -2406 of the Code of the City of Seal Beach sets forth the provisions regarding reconstruction of damaged or destroyed existing non - conforming residential buildings. These provisions of the Code were adopted by the City Council after extensive public hearings before the Planning Commission and City Council. Structures damaged less than 50% of replacement cost may be rebuilt to its previously existing condition. For structures damaged more than 50% of replacement cost the following reconstruction activities can occur just through approval of a building permit: ❑ Number of units that can be reconstructed are the number of legally existing units at the time of the damage or 1 unit per 950 square feet of lot, whichever is less; ❑ Minimum of 2 open parking spaces must be provided per unit reconstructed; u Minimum setback and height standards must be met. For structures damaged more than 50% of replacement cost the following reconstruction activities can occur after approval of a "Consent Calendar Plan Review" by the Planning Commission: 1119 Ocean Avenue Pnnect.RDA Staff Report 2 Status Report - 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency StafReporr Apri111, 1002 Porch or balcony enclosures count as part of the 288 square foot allowable expansion Planning Commission must make a determination that all feasible - parking, given site constraints imposed by the existing building, is provided Tandem parking spaces may be allowed provided all required setbacks are provided. The following activities can occur after approval of a "Conditional Use Permit' by the Planning Commission: • Additions greater than 10% of the allowable floor ratio if required parking is provided; • Additions greater than 10% of the allowable floor ratio if required parking is provided by tandem parking spaces; • Planning Commission must make a determination that all feasible parking, given site constraints imposed by the existing building, is provided. Public Concern: This proposal would require the City to allow the same structure to be rebuilt if it were destroyed by fire, eta Otherwise the same structure could not be rebuilt. ❑ Staff Comment: Depending on particular parking and density situations on a non - conforming multiple -unit property at the time of damage or destruction, the existing provisions of the Code would allow the same type of structure to be rebuilt. Section 28 -2406 of the Code of the City of Seal Beach sets forth the provisions regarding reconstruction of damaged or destroyed existing non - conforming residential buildings. These provisions of the Code were adopted by the City Council after extensive public hearings before the Planning Commission and City Council. Structures damaged less than 50% of replacement cost may be rebuilt to its previously existing condition. For structures damaged more than 50% of replacement cost the following reconstruction activities can occur just through approval of a building permit: ❑ Number of units that can be reconstructed are the number of legally existing units at the time of the damage or 1 unit per 950 square feet of lot, whichever is less; • Minimum of 2 open parking spaces must be provided per unit reconstructed; • Minimum setback and height standards must be met. For structures damaged more than 50% of replacement cost the following reconstruction activities can occur after approval of a "Consent Calendar Plan Review" by the Planning Commission: 11190ec.,n Avenue PmjeLRDA Staff Re o2 Status Report - 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency StafRepon April 22, 2002 Number of units that can be reconstructed are the number of legally existing units at the time of the damage or I unit per 950 square feet of lot, whichever is less; ❑ Minimum of 1 open parking space must be provided per unit reconstructed; ❑ Minimum setback and height standards must be met. ❑ Public Concern: The existing debts of the Redevelopment Agency should be paid and the Agency abolished. ❑ Staff Comment: The issues raised are too complex to be adequately addressed here. If so directed by the Agency, staff can address these complex issues after the new council member is seated. ❑ Public Concern: Pay the penalty" and provide no housing assistance programs. a Staff Comment: The issues raised concerning "penalties" are too complex to be adequately addressed here. We presume the "penalty" referred to is the additional amount of tax increment that must be spent on housing where an Agency accumulates excess affordable housing funds and does not spend them in a timely fashion. State law does not allow an Agency to merely pay such penalty and thereby relieve such Agency of its state - mandated responsibilities to provide assistance to low- and moderate- income persons and families. If so directed by the. Agency, staff can further address these complex issues after the new council member is seated. Public Concern: The proposed project would impact the property rights of adjoiningproperties. ❑ Staff Comment: Staff can see no situation arising where the property rights of an adjoining property would be impacted. The apartment building is available for sale, and the future owner will determine what land use is appropriate, not an adjoining neighbor. A neighbor's property rights do not extend to the point of being able to determine if 1119 Ocean is to remain an apartment building or be demolished to develop in accordance with current zoning standards of the City, which would allow a single family home. As indicated above, various zoning standards of the City encourage the maintenance of the existing multi- family residential properties within the City, and in some situations allow for additions to the living space of those units. If the Agency were to continue in the provision of rehabilitation assistance and rental assistance to the subject property, the neighbors would still have the same building next door, with it being upgraded and rehabilitated, which would presumably increase adjoining property values also. Overview of Previous Agency Actions /Direction to Staff: 1119 Ocean Avenue Pmjat.RDA Stan' Report 2 Slates Report - 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency Staff Report April 22, 2002 On January 28, 2002, the Redevelopment Agency authorized staff to work with housing providers to address the lack of low - moderate income housing opportunities within Seal Beach. That authorization allows the Agency Executive Director and other staff to work' with various persons and organizations that wish to explore opportunities and develop relationships with the Redevelopment Agency in regards to the utilization of the Agency "housing set - aside" funds as a financing mechanism to encourage the provision and retention of low- moderate income housing within the City in compliance with state law. It is the understanding of staff that three of the units at 1119 Ocean are currently occupied. Although it has not been determined as of this time, it is anticipated that the occupants of these units will be in the moderate- income category. If that is the case, up to two of the existing tenants could qualify for the rental assistance provisions and remain within their existing living units. Compliance with Provisions of Redevelopment Law: Pursuant to the Community Redevelopment Law, specifically Section 33334.2(a) of the California Health and Safety Code, a redevelopment agency is required to use a minimum of twenty percent (20 %) of all taxes which are allocated to the agency pursuant to Section 33670 for the purposes of increasing, improving, and preserving the community's supply of low- and moderate - income housing available at affordable housing cost to persons and families of very low, lower and moderate income, as those terms me defined in the California Health and Safety Code. Therefore, the Agency is obligated, by law, to spend at least 20% of its tax increment monies to increase, improve, and preserve the supply of affordable housing within its community. RECOMMENDATION: Direct staff as to the desire of the Agency to proceed with negotiations regarding rehabilitation and rental assistance of the subject property, if the future property owner desires to pursue such assistance from the Agency. The Agency may direct staff as follows: ❑ Discontinue negotiation process; ❑ Continue negotiation process; ❑ Investigate alternative site locations. ee Whittenberg Director of Development Servi 1119 Ocean Avenue PmjwLRDA Staff Report 2 NOTED AND APPROVED: John B. Bahorski Executive Director Status Report - 11I9 Ocean Avenge Rehabilifarton Project Redevelopment Agency Staffkeport April 22, 1001 On January 28, 2002, the Redevelopment Agency authorized staff to work with housing providers to address the lack of low- moderate income housing opportunities within Seal Beach. That authorization allows the Agency Executive Director and other staff to work with various persons and organizations that wish to explore opportunities and develop relationships with the Redevelopment Agency in regards to the utilization of the Agency "housing set - aside" funds as a financing mechanism to encourage the provision and retention of low- moderate income housing within the City in compliance with state law. It is the understanding of staff that three of the units at It 19 Ocean are currently occupied. Although it has not been determined as of this time, it is anticipated that the occupants of these units will be in the moderate - income category. If that is the case, up to two of the existing tenants could qualify for the rental assistance provisions and remain within their existing living units. Compliance with Provisions of Redevelopment Law Pursuant to the Community Redevelopment Law, specifically Section 33334.2(a) of the California Health and Safety Code, a redevelopment agency is required to use a minimum of twenty percent (20 %) of all taxes which are allocated to the agency pursuant to Section 33670 for the purposes of increasing, improving, and preserving the community's supply of low- and moderate- income housing available at affordable housing cost to persons and families of very low, lower and moderate income, as those terms are defined in the California Health and Safety Code. Therefore, the Agency is obligated, by law, to spend at least 20% of its tax increment monies to increase, improve, and preserve the supply of affordable housing within its community. RECOMMENDATION: Direct staff as to the desire of the Agency to proceed with negotiations regarding rehabilitation and rental assistance of the subject property, if the future property owner desires to pursue such assistance from the Agency. The Agency may direct staff as follows: • Discontinue negotiation process; • Continue negotiation process; • Investigate alternative site locations. L e Whittenberg Director of Development Servir 1119 Ocean Avenue emits. RDA SMUR W112 NOTED AND APPROVED: John B. Bahorski Executive Director Sex Status Report - 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency Staff Report April 2Z 7002 Attachments: (2) Attachment 1: California Health and Safety Code Sections Attachment 2: 2002 Orange County Income Guidelines i I19 Ocmn Avmue PmjmLRDA SmR Report 2 Status Report - 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency Staff Report April 22, 2001 ATTACHMENT 1 CALIFORNIA HEALTH AND SAFETY CODE SECTIONS "Section 33334.2. (a) Not less than 20 percent of all taxes that are allocated to the agency pursuant to Section 33670 shall be used by the agency for the purposes of increasing, improving, and preserving the community's supply of low- and moderate - income housing available at affordable housing cost, as defined by Section 50052.5, to persons and families of low or moderate income, as defined in Section 50093, and very low income households, as defined in Section 50105, that is occupied by these persons and families, unless one of the following findings is made annually by resolution:" (Remainder of section language not applicable to Riverfront Redevelopment Project) "Siction 33334.2(8) (1) The agency may use these funds inside or outside the project area. The agency may only use these funds outside the project area upon a resolution of the agency and the legislative body that the use will be of benefit to the project. The determination by the agency and the legislative body shall be final and conclusive as to the issue of benefit to the project area. The Legislature finds and declares that the provision of replacement housing . pursuant to Section 33413 is always of benefit to a project. Unless the legislative body finds, before the redevelopment plan is adopted, that the provision of low- and moderate - income housing outside the project area will be of benefit to the project, the project area shall include property suitable for low- and moderate- income housing." "Section 33334.3(t)(1) The requirements of this subdivision apply to all new or substantially rehabilitated housing units developed or otherwise assisted, with moneys from the Low and Moderate Income Housing Fund, pursuant to an agreement approved by an agency on or after January 1, 1988. Except to the extent a longer period of time may be required by other provisions of law, the agency shall require that housing units subject to this subdivision shall remain available at affordable housing costs to, and are occupied by, persons and families of low or moderate income and very low income households for the longest feasible time, but for not less than the following periods of time: 1119 Ocean Avenue Pvjmt.RDA Staff Report 2 10 Status Report - 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency Staff Report April 12, 1002 (A) Fifty -five years for rental units. However, the agency may replace rental units with equally affordable and comparable rental units in another location within the community if (A) the replacement units are available for occupancy prior to the displacement of any persons and families of low or moderate income residing in the units to be replaced and (B) the comparable replacement units are not developed with moneys from the Low and Moderate Income Housing Food. (B) Forty-five years for owner - occupied units. However, the agency may permit sales of owner - occupied units prior to the expiration of the 45 -year period for a price in excess of that otherwise permitted under this subdivision pursuant to an adopted program which protects the agency's investment of moneys from the Low and Moderate Income Housing Fund, including, but not limited to, an equity sharing program which establishes a schedule of equity sharing that permits retention by the seller of a portion of those excess proceeds based on the length of occupancy. The remainder of the excess proceeds of the sale shall be allocated to the agency and deposited in the Low and Moderate Income Housing Fund. Only the units originally assisted by the agency shall be counted towards the agency's obligations under Section 33413. (C) 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. (2) The agency shall require the recording in the office of the county recorder of covenants or restrictions implementing this subdivision for each parcel or unit of real property subject to this subdivision. Notwithstanding any other provision of law, the covenants or restrictions shall run with the land and shall be enforceable, against the original owner and successors in interest, by the agency or the community.,, e a • t 1119 ncean Avenue PaiMLRDA Staff Repon 2 11 Staau Report - 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency Staff Report April 22, 2002 (A) Fifty -five years for rental units. However, the agency may replace rental units with equally affordable and comparable rental units in another location within the community if (A) the replacement units are available for occupancy prior to the displacement of any persons and families of low or moderate income residing in the units to be replaced and (B) the comparable replacement units are not developed with moneys from the Low and Moderate Income Housing Fund. (B) Forty-five years for owner- occupied units. However, the agency may permit sales of owner - occupied units prior to the expiration of the 45 -year period for a price in excess of that otherwise permitted under this subdivision pursuant to an adopted program which protects the agency's investment of moneys from the Low and Moderate Income Housing Fund, including, but not limited to, an equity sharing program which establishes a schedule of equity sharing that permits retention by the seller of a portion of those excess proceeds based on the length of occupancy. The remainder of the excess proceeds of the sale shall be allocated to the agency and deposited in the Low and Moderate Income Housing Fund. Only the units originally assisted by the agency shall be counted towards the agency's obligations under Section 33413. (C) 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. (2) The agency shall require the recording in the office of the county recorder of covenants or restrictions implementing this subdivision for each parcel or unit of real property subject to this subdivision. Notwithstanding any other provision of law, the covenants or restrictions shall run with the land and shall be enforceable, against the original owner and successors in interest, by the agency or the community." ♦ t ♦ 4 1119 Ocean Avenue Pmlect. RDA Smtr Report 2 11 Slatus Report- 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency SlafReport April 22, 2002 ATTACHMENT 2 2002 ORANGE COUNTY INCOME GUIDELINES Provided below for the information of the Agency are the current income limits for Orange County that define very low, lower, median, and moderate income: Number of Persons In Family Income Limits Very Low Lower Median Moderate Income Income Income Income 1 26,450 38,100 52,900 63,500 2 30,250 43,500 60,500 72,550 3 34,000 48,950 68,050 81,650 4 37,800 54,400 75,600 90,700 5 40,800 58,750 81,650 97,950 6 43,850 63,100 87,700 105,200 7 46,850 67,450 93,750 112,450 8 49,900 71,800 99,800 119,700 • • : a 1119 O .. M.. Pmiecl.aDA Staf lte d 2 12 Status Report- 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency Staff Report April 22, 1001 On January 28, 2002, the Redevelopment Agency authorized staff to work with housing providers to address the lack of low- moderate income housing opportunities within Seal Beach. That authorization allows the Agency Executive Director and other staff to work with various persons and organizations that wish to explore opportunities and develop relationships with the Redevelopment Agency in regards to the utilization of the Agency "housing set - aside" funds as a financing mechanism to encourage the provision and retention of low- moderate income housing within the City in compliance with state law. It is the understanding of staff that three of the units at 1119 Ocean are currently occupied. Although it has not been determined as of this time, it is anticipated that the occupants of these units will be in the moderate income category. If that is the case, up to two of the existing tenants could qualify for the rental assistance provisions and remain within their existing living units. Compliance with Provisions of Redevelopment Law: Pursuant to the Community Redevelopment Law, specifically Section 33334.2(a) of the California Health and Safety Code, a redevelopment agency is required to use a minimum of twenty percent (20 %) of all taxes which are allocated to the agency pursuant to Section 33670 for the purposes of increasing, improving, and preserving the community's supply of low- and moderate - income housing available at affordable housing cost to persons and families of very low, lower and moderate income, as those terms are defined in the California Health and Safety Code. Therefore, the Agency is obligated, by law, to spend at least 20% of its tax increment monies to increase, improve, and preserve the supply of affordable housing within its community. RECOMMENDATION: Direct staff as to the desire of the Agency to proceed with negotiations regarding rehabilitation and rental assistance of the subject property, if the future property owner desires to pursue such assistance from the Agency. The Agency may direct staff as follows: ❑ Discontinue negotiation process; ❑ Continue negotiation process; ❑ Investigate alternative site locations. NOTED AND APPROVED: ee Whittenberg John B. Bahorski Director of Development Servi Executive Director 1119 D .n Avenue Pmj.t.RDA Staff Report 2 Stags Report - 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency Staff Repo rt April 22, 2002 (A) Fifty -five years for rental units. However, the agency may replace rental units with equally affordable and comparable rental units in another location within the community if (A) the replacement units are available for occupancy prior to the displacement of any persons and families of low or moderate income residing in the units to be replaced and (B) the comparable replacement units are not developed with moneys from the Low and Moderate Income Housing Fund. (B) Forty-five years for owner- occupied units. However, the agency may permit sales of owner- occupied units prior to the expiration of the 45 -year period for a price in excess of that otherwise permitted under this subdivision pursuant to an adopted program which protects the agency's investment of moneys from the Low and Moderate Income Housing Fund, including, but not limited to, an equity sharing program which establishes a schedule of equity sharing that permits retention by the seller of a portion of those excess proceeds based on the length of occupancy. The remainder of the excess proceeds of the sale shall be allocated to the agency and deposited in the Low and Moderate Income Housing Fund. Only the units originally assisted by the agency shall be counted towards the agency's obligations under Section 33413. (C) 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. (2) The agency shall require the recording in the office of the county recorder of covenants or restrictions implementing this subdivision for each parcel or unit of real property subject to this subdivision. Notwithstanding any other provision of law, the covenants or restrictions shall run with the land and shall be enforceable, against the original owner and successors in interest, by the agency or the community." s s s 11190 .AV. P, q.LRDA Smff RepeA2 I I Status Report -1119 Ocean Avenue Rehabilitation Project Redevelopment Agency Staff Report April 22, 2002 Porch or balcony enclosures count as part of the 288 square foot allowable expansion Planning Commission must make a determination that all feasible parking, given site constraints imposed by the existing building, is provided Tandem parking spaces may be allowed provided all required setbacks are provided. The following activities can occur after approval of a "Conditional Use Permit' by the Planning Commission: • Additions greater than 10% of the allowable floor ratio if required puking is provided; • Additions greater than 10% of the allowable floor ratio if required parking is provided by tandem parking spaces; • Planning Commission must make a determination that all feasible parking, given site constraints imposed by the existing building, is provided. Public Concern: This proposal would require the City to allow the same structure to be rebuilt if it were destroyed by fire, etc Otherwise the same structure could not be rebuilt. ❑ Staff Comment: Depending on particular puking and density situations on a non - conforming multiple -unit property at the time of damage or destruction, the existing provisions of the Code would allow the same type of structure to be rebuilt. Section 28 -2406 of the Code of the City of Seal Beach sets forth the provisions regarding reconstruction of damaged or destroyed existing non - conforming residential buildings. These provisions of the Code were adopted by the City Council after extensive public hearings before the Planning Commission and City Council. Structures damaged less than 50% of replacement cost may be rebuilt to its previously existing condition. For structures damaged more than 50% of replacement cost the following reconstruction activities can occur just through approval of a building permit: ❑ Number of units that can be reconstructed are the number of legally existing units at the time of the damage or 1 unit per 950 square feet of lot, whichever is less; • Minimum of 2 open puking spaces must be provided per unit reconstructed; • Minimum setback and height standards must be met. For structures damaged more than 50% of replacement cost the following reconstruction activities can occur after approval of a "Consent Calendar Plan Review" by the Planning Commission: 1119 Ocean Avenue Pmic LRDA Stiff Report 2 Staw Report - 1119 Ocean Avenue Rehabilitation Project RedevelopmentAgency Staff Report April 22, 1002 The `rental assistance" is an amount of money that would be paid to the landlord by the Agency to bridge the gap between what the market rent is and what a low - or moderate- income person or family would be expected to pay, based on their particular income situation. As an example, if the "fair market rent' were determined to be $1,500 per month and the rent that the low- or moderate - income person or family would be determined to pay is $1,300 per month, the tenant would pay that rental amount of $1,300 to the landlord and the Agency would pay the difference, $200, to the landlord. The landlord would continue to receive market rent and the tenant may actually see their monthly rental cost decrease, with the difference being made up by the Agency. Public Concern: Redevelopment funds cannot be utilized outside of the Redevelopment Project Area. Staff Comment: Specific provisions of California Redevelopment Law allow for the use of redevelopment agency funds outside of the project area for affordable housing. Pursuant to California Health and Safety Code Section 33334.2(8), an agency may use monies from its Low and Moderate Income Housing Fund outside the redevelopment project area if the Agency and the City Council adopt resolutions with certain findings. In considering the proposal for 1119 Ocean Avenue, the Agency and City Council made those required findings in adopting Agency Resolution No. 02 -1 and City Council Resolution No. 4992. The Agency has undertaken other projects outside of the Project Area boundaries and made similar findings. These other projects were: ❑ acquisition of land and the development of the City Yard and Police Station facilities at Adolfo Lopez Drive. ❑ Acquisition of master lease for Zoeter School and the conversion to Zoeter Field, the day care facilities, and the rehabilitation of the original school facilities along Pacific Coast Highway to the existing retail center at Pacific Coast Highway and 12th Street. Public Concern: No notification provided regarding the proposed project. ❑ Staff Comment: The matter that was before the Redevelopment Agency and City Council was fully noticed in full compliance with the Brown Act. At the discretion of the Agency board, staff may provide additional notice beyond what the law requires to adjoining property owners of any future project proposals of a similar nature. Staff would suggest adoption of a Policy Statement to address this concern for any future project considerations of a similar nature. Public Concern: This program _ will extend the life of existing non- conforming multiple family residential properties within the City. ❑ Staff Comment: Approval of this type of project would extend the life of a multiple - family residential property. However, without any assistance from the Agency, existing non - conforming, multiple family properties may undertake several types of improvements to those structures, which would also extend the life of a building. Section 28 -2407 of the Code of the City of Seal Beach sets 1119 Ocean Avenue PmjmtR A Staff Report 2 Slow Report - 1119 Ocean Avenue Rehabilitation Project Redevelopment Agency Staff Report April 22, 2001 Many residents of the City meet the income criteria as either low- or moderate - income persons or families. 2000 Census income information is not available at this time to provide detailed information on this issue. 1998 estimates based on the 1990 Census indicates the following estimated distribution of household income levels: Income Group Households % of Households Very Low (< 50 %) 4,064 30.5% Low (51 -80 %) 1,677 12.6% Moderate (81 -120 %) 2,241 16.8% Above Moderate (120 % +) 5335 40_1% Total 13,317 100.0% Approximately 6,500 household reside within Leisure World, indicating that approximately 1,482 households that resided within the City and outside of Leisure World in 1998 would have qualified as low- or moderate - income families or persons. Those 1,482 households represent approximately 21% of all households in the City not residing within Leisure World; or I in 5 households outside of Leisure World. A recent article in the April 17, 2002 issue of the Orange County Register indicates that 446 residents in Seal Beach pay more than 50% of their income in rent; the recognized standard for income/rent ration is between 30 -35 %. Due to the development pattern of Seal Beach, many apartment units still exist within "Old Town' and are believed to provide a majority of the existing housing opportunities for low- and moderate - income persons and families. Based on 1990 Census information, there were 1,011 owner - occupied residences and 2,359 renter - occupied residences in "Old Town" (Census Tract 995.05). 2000 Census information at the Census Tract level is not available at this time. The Center for Demographic Research has provided income estimates for Census Tract 995.02 (Old Town) for 1997, and in comparing to the 1997 income limits for low- and moderate- income housing established by the State of California, the following numbers of low- and moderate - income residents are estimated to have been residing within Old Town in 1997: • Lower income (2- person household) — $34,800 ❑ households below $34,999 — 1,107 (33% of households in Old Town) • Moderate income (2- person household) — $34,801 to $60,700 ❑ Households — between $35,000 to 59,999 — 936 (28% of households in Old Town) • Above Moderate income (2- person household) - $ 60,700+ ❑ Households above $60,000 — 1,294 (39% of households in Old Town) 1119&c n Avenue PmjxLRDA Smfr R,on2 Ct N -4 N O N O ct c N N ,�N W .. 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