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HomeMy WebLinkAboutItem HAGENDA REPORT DATE: August 27, 2001 TO: Honorable Mayor and City Council THRU: John B. Bahorski, City Manager FROM: Lee Whittenberg, Director of Development Services SUBJECT: Approval of Response Letter re: Findings and Recommendations — "Affordable Housing, Light One Candle', 2000 -2001 Orange County Grand Jury Report SUMMARY OF REOUEST: Authorize Mayor to sign response letter. Instruct staff to forward to the Judge C. Robert Jameson, the Orange County Grand Jury, and the Planning Commission. BACKGROUND: On June 14, 2001 the Orange County Grand Jury issued a report titled "Affordable Housing, Light One Candle'. Pursuant Penal Code § 933 and 933.05, a copy of the report has been provided to the City for responses, which are due by September 14, 2001. The responses have been prepared by staff to respond to the identified "findings" and "recommendations" of the Grand Jury in the manner required by the Penal Code. Staff has prepared a response letter with an attachment that directly responds to each "finding" and "recommendation" of the Grand Jury. A copy of the proposed response document is provided as Attachment 1. A copy of the Grand Jury Report and transmittal letter is provided as Attachment 2. FISCAL IMPACT: None; no direct actions are required by the City in response to the Grand Jury Report RECOMMENDATION: Authorize Mayor to sign response letter. Instruct staff to forward to the Judge C. Robert Jameson, the Orange County Grand Jury, and the Planning Commission. Agenda Item C:W,n .mmw City Cauzil Gard Jury K.,o .n Anbnfabi a fi..ms.CC.do \LWM -14 -01 Wluttenberg Director of Development Servi es Attachments: (2) Ciry Council StafReport Response to 2000 -2001 Orange County Grand Jury Report "Affordable Housing Light One Candle' August 27, 2001 Attachment 1: Draft City of Seal Beach Response Letter re: "Affordable Housing, Light One Candle", 2000 -2001 Orange County Grand Jury Report Attachment 2: "Affordable Housing, Light One Candle ", 2000 -2001 Orange County Grand Jury Report, June 14, 2001 0C Gmnd Jury Report oa Affordable Housing CC City Council Staff Report Response to 2000 -2001 Orange County Grand Jury Report "Affordable Housing, Light One Candle' August 27, 2001 ATTACHMENT 1 DRAFT CITY OF SEAL BEACH RESPONSE LETTER RE: "AFFORDABLE HOUSING, LIGHT ONE CANDLE ", 2000 -2001 ORANGE COUNTY GRAND JURY REPORT GC Grand lury Report on Affordable Ho in &CC August 27, 2001 The Honorable C. Robert Jameson Presiding Judge, Orange County Superior Court 700 Civic Center Drive West Santa Ana, CA 92701 SUBJECT: RESPONSE TO FINDINGS AND RECOMMENDATIONS ASSOCIATED WITH THE ORANGE COUNTY GRAND JURY REPORT ON AFFORDABLE HOUSING Dear Judge Jameson: This correspondence is forwarded in response to the request by the Orange County Grand Jury to respond to the findings and recommendations outlined in their report addressing affordable housing concerns. Attached please find the City of Seal Beach' responses to the seven findings and six recommendations posed in the report. As noted in the responses, the City is in general agreement with the report's findings and recommendations and has outlined the steps taken toward implementation of the recommendations. The City Council considered and reviewed the 2000 -2001 Orange County Grand Jury Report "Affordable Housing, Light One Candle ", a staff report, and a response letter at its regular meeting on August 27, 2001. The City Council approved this response letter and has authorized this letter and attached response to the findings and recommendations of the Grand Jury. Thank you for allowing the City of Seal Beach the opportunity to respond to the issues examined in the Grand Jury report on affordable housing within the County. If you have any questions regarding the attached responses, please contact Mr. Lee Whittenberg, Director of Development Services, by telephone at (562) 431 -2527 or by e-mail at lwittenberg @ci.seal- beach.ca.us. C:Wy Documents \City CoumMmnd Jury Rcspoase Letwr.AffoMkie Hewing.dmc WM8 -27 -01 City of Seal Beach Response Letter re: 2000 -2001 Orange County Grand Jury Report "Affordable Housing, Light One Candle' August 27, 2001 Sincerely, WJ iam J. ane Mayor, City of Seal Beach Attachment: City of Seal Beach Responses to Grand Jury Report Findings and Recommendations cc: Orange County Grand Jury Grand Jury Response Le[ueGAPfordable Housing City of Seal Beach Response Letter re: 2000 -2001 Orange County Grand Jury Report "Affordable Housing, Light One Candle' August 27, 2001 CITY OF SEAL BEACH RESPONSES TO REPORT FINDINGS AND RECOMMENDATIONS ORANGE COUNTY GRAND JURY REPORT ON AFFORDABLE HOUSING GRAND JURY FINDINGS/RECOMMENDATIONS: ❑ Finding 1: Government financial assistance and innovative financial packages are essential for the production of very -low income housing for residents of Orange County. ❑ Recommendation 5: The County and cities should make a concentrated effort to create innovative financial packages with private, non -profit and public sectors to produce additional affordable housing for the working poor, large families, elderly and disabled. Response of City of Seal Beach: The City of Seal Beach agrees with the finding and recommendation. Based on the current costs of development and market rate rents, substantial public subsidy is required to make development of housing affordable to low and very-low income residents economically viable. The City of Seal Beach is in the process of evaluating various programs to utilize the Redevelopment Agency "housing set - aside" funds to encourage the retention of existing very-low, low -, and moderate - income housing units within the community. Programs to subsidize rents for existing units or to obtain "affordability covenants" are being considered by the City currently. The land costs within Seal Beach generally preclude the provision of new construction, very-low and low- income housing development. Other possible sources of funding include combining available funds with programs from agencies such as the California Housing Finance Agency (CHFA), Housing Opportunities for Persons with AIDS (HOPWA) and Tax Credit Allocation Committee (TCAC), and the Federal National Mortgage Association (Fannie Mae) to further leverage available funds to promote affordable housing. We will continue to pursue all these sources as opportunities to develop affordable housing arise. ❑ Finding 2: The County does not have a consolidated document or map to illustrate available land for affordable housing units. The County and individual cities create their own separate documents depicting land available to meet affordable housing needs. Greed Jury Response Ulter.AffoNabie Housing City of Seal Beach Response Letter re: 2000 -2001 Orange County Grand Jury Report "Affordable Housing, Light One Candle' August 27, 2001 ❑ Recommendation 1: The Orange County Housing and Community Development Department (HCD) and the Orange County Planning and Developmental Services Department should take the lead with cities in the County to create a consolidated Geographic Information System (GIS) map or other instrument designating available land for affordable housing units. This map should be made available to public and private entities. Response of City of Seal Beach The City of Seal Beach agrees with the finding and recommendation. As noted in Finding 2, each city and the County identify sites for affordable housing in their respective General Plan housing elements; this is a requirement of State law. The mapping system capabilities such as GIS vary from city to city; some cities do not have this capability at all. While it may be possible for the County to consolidate the site information in the various housing elements into one map, funding for such a project would have to be identified and a method developed for keeping the information up to date. Although a consolidated map could identify vacant land available for the construction of new affordable housing units; it would not be able to identify sites where existing market rate units can be converted to affordable units through rent subsidies, mortgage write- downs, etc., or where a complete redevelopment or change of use could occur, e.g., from commercial to affordable housing. The City of Seal Beach would support a GIS effort to the extent possible; at this time the City is still developing its GIS system and the information that would necessary for this type of mapping effort is not currently available on our system. ❑ Finding 3: The City — County Housing Roundtable brings together local government housing experts to discuss mutual programs and plans from a regional perspective. ❑ Recommendation 2: A regional approach to provide affordable housing in the County should be continued. Response of City of Seal Beach We concur that affordable housing is a regional issue, and that it is beneficial to use a regional approach to provide affordable housing in the County. We also believe that there is potential for an even stronger regional approach, if new State legislation and policies were adopted. For example, State housing element law now requires each city and county to plan for providing its regional "fair share" of housing need within its own jurisdiction. High land costs and the lack of available sites of a size sufficient to provide an appropriately sized multiple family residential development that could provide very-low or low - income new construction units are major constraints within Seal Beach. Legislation that allows cities to count units they have assisted, even if outside Greed Jury Response UMIAMMWb Housing City of Seal Beach Response Letter re: 2000 -2001 Orange County Grand Jury Report "Affordable Housing, Light One Candle' August 27, 2001 their boundaries, would facilitate sharing resources within the region. Perhaps a regional approach of providing affordable housing opportunities based upon the cheapest land prices and access to jobs and public transportation, rather than requiring that individual cities provide affordable units, regardless of the economic obstacles, might make more sense than the current system. The League of California Cities, of which the City of Seal Beach is a member, is currently working with legislators to reform the housing element process. Likewise, Community Redevelopment Law could be changed to make it more feasible to transfer housing set aside funds from one jurisdiction to another. In this way, a jurisdiction with an abundance of housing set aside funds, but one with a shortage of available sites for affordable housing, could fund affordable housing in a jurisdiction with an abundance of appropriate sites but insufficient housing funds. ❑ Finding 4: Production of affordable housing is most successful when the County and cities cooperate with all stakeholders to provide land, zoning and financing. ❑ Recommendation 3: Orange County HCD should continue to bring stakeholders (business, labor, local elected officials, government staff, lenders, housing developers, and non -profit service providers) together to accomplish the task to produce more affordable housing units in the County. Response of City of Seal Beach The City of Seal Beach concurs with this finding and recommendation. As indicated in response to finding #1, the current economic environment for the development of affordable housing requires the utilization of innovative financial and public entitlement processing solutions to ensure successful project implementation. The Redevelopment Agency of the City of Seat Beach has recently provided approximately $2,000,000.00 in long- and short-term financing to assist a non- profit housing corporation in the acquisition of a 125 -space trailer park within the community. In addition to the direct financial assistance, the City helped in obtaining a State of California "Mobilehome Park Resident Ownership Program" (MPROP) loan from the State of California and bond financing to complete the necessary transactions to accomplish this innovative project. The goal of the acquisition was to preserve an existing pool of very-low, low -, and moderate - income housing units within the community that were being threatened for conversion and/or demolition. Unfortunately, current housing element law does not allow full acknowledgement of these efforts. Retention projects do not count towards satisfaction of a city's regional housing needs unless they add to the overall housing stock. This is Greed Jury Response Lttw.Affoolat us Housing City of Seal Beach Response Letter re: 2000 -2001 Orange County Grand Jury Report "Affordable Housing, Light One Candle' August 27, 2001 unfortunate, as the most economical way of providing housing units for the very low, low -, and moderate- income families is to first ensure the preservation of those existing units within a community that serve those needs. We believe that the State Legislature and the Governor should enact legislation and policies that address this deficiency in the law. The League of California Cities, of which the City of Seal Beach is a member, is currently working with legislators to reform the housing element process. a Finding 5: The County and cities have a great challenge to provide needed affordable housing for extremely low and very low people including the working poor, large families, seniors on fixed incomes and the disabled. Response of City of Seal Beach: The City of Seal Beach concurs with this finding. Rising housing costs have placed an undue financial burden on these individuals. As housing costs escalate, local governments are faced with an even greater challenge to meet these needs. The Orange County Register recently reported the median cost of a home in Orange County is $301,000 requiring an income of over $90,000 per year to qualify to purchase such a home. The median rent is reported to be over $1,200 per month. Households at low or very low income cannot afford these prices, and very deep subsidies are required to make housing in Orange County affordable ❑ Finding 6: The County's and cities' Housing Authorities have been provided with the opportunity for additional Federal Section 8 Housing Assistance Vouchers. ❑ Recommendation 4: Each time the Federal Government allows applications for additional Federal Section 8 Housing Assistance Vouchers the Housing Authorities of Orange County and the Cities of Anaheim, Garden Grove and Santa Ana should vigorously pursue them. Response of City of Seal Beach: The City of Seal Beach concurs with this finding and recommendation. The Orange County Housing Authority administers the Section 8 vouchers allocated to the City of Seal Beach. The City supported the County Housing Authority's recent application for additional Section 8 vouchers because we believe that any additional housing resources that become available will benefit the entire County. With the additional vouchers approved, the County was able to serve all those on the waiting list for rental assistance and new applications were accepted. The City made applications available at City Hall and local libraries, and City staff was available to answer questions and assist people in completing their applications. Grand Jury Response Utter.Affordable Housing City of Seal Beach Response Letter re: 2000 -2001 Orange County Grand Jury Report "Affordable Housing, Light One Candle' August 27, 2001 However, the level of Federal support for the Section 8 Housing Assistance Voucher program is entirely inadequate to meet the demand for this assistance. The County, the various housing authorities, and local governments should develop a comprehensive program of making the necessity of the expansion of the Section 8 Housing Assistance Voucher program more important to the Orange County congressional delegation. The City wholeheartedly agrees that the Orange County Housing Authority should vigorously pursue additional vouchers, whenever a Notice of Funding Availability is issued. The City has consistently supported past applications by the County in obtaining Section 8 vouchers, and will continue to support future applications and assist the public when additional vouchers become available. ❑ Finding 7: The County has participated in cooperative efforts with some cities by providing financial support to develop affordable housing. u Recommendation 6: The Orange County Board of Supervisors should continue to support a regional approach to affordable housing including financial support to cities in their efforts to create additional units. Response of City of Seal Beach: The City of Seal Beach concurs with this finding and recommendation. We acknowledge that the County has worked cooperatively with some cities to assist in developing affordable housing. Our cooperative efforts with the County have been in relation to the rehabilitation of existing low- and moderate - income housing units. There are some funding inequities in the existing system, e. g., the current Community Development Block Grant program does not provide much funding for cities such as Seal Beach, which is a built -out, non - entitlement community and must compete for funding. The City of Seat Beach has identified County funding programs in its updated Housing Element, which the City intends to pursue over the next five years. These include tax - exempt mortgage revenue bonds; the Housing Authority's Senior/Disabled or Limited Income Repair Loan and Grant Program and the Federal Home program. The City of Seal Beach supports the County's efforts toward the provision of financial support, on a regional level, for the development of affordable housing units. Grand Ivry Response Leaer.Affordable Housing City Council Staff Report Response to 2000 -2001 Orange County Grand Jury Report "Affordable Housing, Light One Candle' August 27, 2001 ATTACHMENT 2 AFFORDABLE HOUSING, LIGHT ONE CANDLE", 2000 -2001 ORANGE COUNTY GRAND JURY REPORT, JUNE 14, 2001 GC Grad Jury Report on Affordable linuaingCC ] 1 ORANGE COUNTY GRAND JURY 700 CIVIC CENTER DRIVE WM- SANTA ANA, CALIFORNIA 92701-7141834-3320 FAX 714/834 -5555 June 8,2001 John Bahorski, City Manager City of Seal Beach 21 18m Street Seal Beach, CA 90740 Dear Mr. Bahorski: Attached is a copy of the 2000 -2001 Orange County Grand Jury report, "Affordable Housing, Light One Candle ". Pursuant to Penal Code 933.05(f), a copy of the report is being provided to you two working days prior to its public release. Please note that `No officer, agency, department, or governing body of a public agency shall disclose any contents of the report prior to the public release of the final report " Emphasis added. (Public release date —June 14, 2001). It is requested that you provide a response to each of the findings and recommendations of this report directed to your office in compliance with Penal Code 933.05(a) and (b), copy attached. For each Grand Jury recommendation, be sure to describe the implementation status, as well as provide a schedule for future implementation. It is requested that the response to the recommendations be mailed to C. Robert Jameson, Presiding Judge Of the Superior Court, 700 Civic Center Drive West, Santa Ana, CA 92701, with a separate copy mailed to the Orange County Grand Jury, 700 Civic Center Drive West, Santa Ana, CA 92701, no later than 90 days after the public release date, June 14, 2001, in compliance with Penal Code 933, copy attached. The due date then is September 14, 2001. Should additional time for responding to this report be necessary for further analysis, Penal Code 933.05(b)(3) permits an extension of time up to six months from the public release date. Such extensions should be advised in writing, with the information required in Penal Code 933.05(b)(3), to the Presiding Judge of the Superior Court, with a separate copy of the request to the Grand Jury (address above). very truly yours, 2000 — 2001 ORANGE COUNTY GRAND JURY �r �_ JG:mlh f'- � Attachments Joseph Gatlin, Foreman Grand Jury Report Penal Code 933, 933.05 PENAL COVE SECTION 933 AND SECTION 933.05 4 933. Findings and recommendations; copies of 0.1 report: mmmmt of governing bodiq elective olfittrs, or agency heeds definition (a) Bach grand jury shall submit to the presiding judge of the superior court a final report of in findings and rcmmmcrabou m that pertain to county swemmsen matters chosen the fiscal or calendar year. Foal reports an any appropriate wbjm may be submmed to the prmding judge of the superior court at airy sine during the term of service of a grand jury. A final report may be submmed for comment to relideable offimn -Fee= or dopdrtducam including the mmrry board of wpc,,ona , when applicable upon finding of the prmding judge that the report u in compliance with this due. For 45 days after the coal of the terns the fompcmn and his or her designees shall. upon reasonable noun, be available to clarify the recommcndmions of the report. (b) One copy of each final report. wgmher wish the responses themo. found to be in compliance with this title shall be placed on file with the wunry desk and remain an file in the office of the county dent The county clerk Nall immediately forward a one Copy of the report and the responses to the Smtc Archivist. who Nall main that repo. and all responses in perpetuity. (e) No later than W dins after the grand jury submim a final report on the uperations of urry, public agency subjen to in ev riewing authority, the governing body of the public agenry, shall comment to the presiding judge of the superior court on the finding and recommendatium pertaining to minters under the control of the goveming body, and every claimed county officer or agency head for which the grand jury has responsibility pursuant to Section 914.1 shall summer within 60 drys to the presiding judge Of the superior court. wish an infurmmin. copy sum m the haord Of supmviwa on the finding and remrnmrndaduas perndning m maters under the control of that counts, officer or agcmy head and env agency or agencies which Ws officer or agenry hcad supervixcaar connoh. In am dry and wunry. the mayor Nall also wmmesit on the findings and recommend.0 na All of dues, wmmcan and reports shall forthwith be wbmtuast to We presid. Ing judge of the mpenor court who impaneled the grand jury. A copy of all mpooses so grand jury reports shall be placed on fde wish the clerk of the public agenry and the office of the county clerk, or the mayor when applicabl,% and shall remain an file in tone offices. One cop shall be plated m file with the applimblc grand jury final report h,, and in the coneml of the cirri imp:meled grand jury, where it shall be mainnirmd for a minimum of foe yeas (d) As used in this anion 'agenry' includes a department (Addad b• Sadgl961. a 1284, g JEAN. 1 1. Amendd by Sass 1963. c 674, p 1678 1 1: Ssam.1974. c 393, p 977, g 6: Sian.1974. c 1.396. p 3053. 13; Sma1977, c 107, p 539, 1 6: Smo.1977. ,. 187. p. 709, / l: Srmal9W. c. 543. p. MW. 1 7: Sacra l9B1, c M. p 112A 1 1: Saina 1982 c 14001. P. 5365. 1 % Saes 1985, c "1.1 1, cogency. cif. Jaly 12 1985. Sms.1987, c. 696. f 7: Sm4.1988 c 1197, 1 S. SonalW7, c 44J (A.B.829), 1 4: Scan. 199& c. 230 (A.B.1907).1 1) 4 933X5. Responses to findings (a) For purpom of subdivision (b) of Senion 933, as to each grand jury finding, the responding pawn or entiry soul indicate one of the following: (1) The respondent agrees with the finding. (2) The respondent deci wholly or pamally with the finding, to which case she .,a. shall spedfy the portion of the finding that u disputed and shall include an cepoidedon of the reason therefor. (b) For purposes of subdi mean (b) of Semion 933. as to each grand jury recommendations the responding person or emery shall report me of the following anion: (1) The recommendation has been implemented. with a sum. mary, regarding rise implemented arum (Z) The retvnsmendatian has vin yet been implemented bra will be implemented in the future. with a timefmme for implemcn. aa.R (3) The recommendation requires further amlytia wish an explanation and the scope and pammcmrs of an analysis or study. said a timefnme for the minter to be prepared for discussion by the officer or head of the agency or deparonent behm un',nimed or reviewed. including the gmeming body of the public agency when applicable. This timcfrsme shall not caceed an munch from the case of publication of the grand jury report (4) The reco .daton wtll or be implamswmd bemuse it as man warranted or is ram reasonable. with an explanaiun thmefor. (c) However. if a finding or recommendation of the grand jury addresses budgetary or personnel mucus of a omnm agency or alepartmcnt handed by on elected officer. both the agency or dcpartmcvs hand awl the bo:ud of wperviwrs shall respond if rsyuesmd by the grand jury, but the response of the bound of supervisors shall address only in= budgetary err persocnd matters aver which it has come dectu .making authority. The respome of the elected agency or deparunend head Nall address all aspens of the finding or rewmmeMations affecting his or her agency or department. (d) A grandjury may request a subject person or entiry to Marc before the grand jury for the purpose of madine and discussing the finding of the grand jury report that rebates to that person or entity in order-to verify the accuracy of the findings prior to their rdc; . (e) During an imcnlcarlon, the grand jury shall meet with the Whiem of that imesugation regarding the imcaulcoun. unless the court. cube, on its own detcrminadon or upon rerpnt of the foreperson of the grand jury. detemines that such a .,..a would be detrimentm. (f) A grand jury shall provide to the affected agency it cop of the portion of the grand jury report tainting m char person or entity two working days prior to in public releose and after the approvd of the presiding judge. No officer, agency, deparuncnr. Our governing body of a public ugeary shall disclus , any commna of the report prior to the public release of the final rcpum (A"-d br Sadm IM. a 1170 (58.1457A 1 7. Aniemled fps Ssaa1997. s. 443 (AB.829).1 J.) AFFORDABLE HOUSING LIGHT ONE CANDLE SUMMARY 'It is better to light one candle than to curse the darkness." Ancient Chinese Proverb Orange County faces a serious shortage of affordable housing today and projections for the future suggest an even more acute problem. Some call it a crisis! Orange County's economy is vibrant and growing but most business executives now recognize housing costs as the primary barrier to locating or expanding their companies in the County. The ratio of job formation to housing units created is three times above normal, putting a strain on people of all income levels. More and more of the workforce are establishing residences in adjacent counties, which stresses our transportation infrastructure and air quality, and increases commute time. To address this problem, the Board of Supervisors has now ranked affordable housing as one of the two top priorities for the County. While affordable housing needs in Orange County are pressing in several income levels, they are most acute for the very-low income family. Only a small fraction ( <10 %) of their housing needs have been met in the last several years. There are financial and government constraints such as land scarcity, cost and zoning. Some elected officials lack the political will to overcome a fear that low- income housing will affect local property values. The County and all cities within the County are in the final stages of updates to the Housing Element of their General Plan as required by California State law. This provides a challenge and opportunity to seriously follow through in meeting goals and objectives in their plans. The 2000 -2001 Orange County Grand Jury recommends the creation of a Countywide map to assist all public and private entities to develop affordable housing units. The Grand Jury strongly recommends all stakeholders cooperate in a regional approach to diffuse this crisis. The Grand Jury recognizes that production of sufficient affordable housing is a daunting challenge. The recommendations alone will not accomplish the task. This study is one step in the process to raise the awareness and political will of policy makers and our communities. PURPOSE /INTRODUCTION The economy of Orange County depends upon providing housing availability and opportunities for its workforce. As additional jobs are created in the County's vibrant economy, the necessity for affordable housing becomes more apparent. As Orange County continues to be one of the nation's destinations for fulfillment of the American Dream, many large companies are scrambling to find not just affordable housing for their workers but any housing at all. The purpose of this study was to assess the processes, methods and procedures to accomplish affordable housing goals in the County's and its cities' individual Housing Elements, a part of their General Plans. Cooperative and collaborative efforts of the private, non - profit and governmental sectors will be encouraged. HISTORY/BACKGROUND Housing is considered affordable when a household pays no more than 30-40% of its gross monthly income for housing, including utilities. Affordability is further categorized by income level as shown in the table below. The area median family income is determined by a survey of household incomes conducted by the County or its cities, adjusted by household size. In absence of such a survey, it is based on the latest available eligibility limits established by the U.S. Department of Housing and Urban Development for the Federal Section 8 Housing Assistance Program. This program is part of the Housing and Community Development Act (HCDA), 88 Stat. 633, passed by Congress in 1974. Affordable Housing Annual Income Categories Cateoo Annual Income' Max. Affordable Max, Affordable Purchase Price Rent Payment" Very-Low (0- 50%AMI) $34,800 $870 $113,000 Low (51- 80%AMI) $55,680 $1,392 $184,000 Moderate (81- 120%AMI ) $83,520 $2,088 $279,000 Above Mod. IN 016AMI) $83,520+ Over $2,088 Over $279,000 'Income limits establisheE by Huu. Based on 2000 A 1 of $69.500 far orange County -Based on 30% of income " Aassumes 10% dawn payment, 7.5% interest rate, 1.25% fm property tax and $40lmonth homeowners insurance, and 30% debt redo booms: noussng element at orange o my (Graft) The following authoritative published reports clearly demonstrate the critical need for more affordable housing. In a survey report' of business respondents, 71 % named housing costs as the top barrier to doing business in the County. A shortage of skilled workers can prompt employers to move away, or simply not locate in Orange County. ' University of California Irvine Graduate School of Management's Executive Survey Report for the Year 2000 A 2000 UCLA economic forecast2 notes that there will be an increase in jobs in California and Orange County but "... the big question is: Where will and how will we house them ?" The building pace of new housing units has slowed down in the 90's. The forecast continues, "...the mismatch between demand and supply will not only manifest itself in home appreciation but also crowding in existing housing.' In Orange County, the ratio of job formation and housing units created is 4.67 to 1. The standard ratio for a healthy jobs/housing balance is 1.5 to 1.3 A Chapman University economic forecast report' projects a widening gap between job growth and the availability of affordable housing in Orange County. A Federal Department of Housing and Urban Development (HUD) reports lists Orange County as one of the areas in the country with major affordable housing problems. Orange County's different zoning processes, high cost of land and insufficient vacant suburban land make it difficult to meet the affordable housing needs for much of its population. 8 In the past year, home prices in Orange County rose 12 %, to an average of $292,000. Condominiums rose 9.5% to $175,000.7 Average rents for two bedroom apartments increased 10% to $1,1758. Newspaper articles almost every month from July 2000 to the present describe the acute need for additional affordable housing units in the County and highlight the increase in housing and rental costs in the County. Workers' lack of ability to pay these prices was emphasized. Orange County's 2000 census data indicates a growing population of senior citizens. Currently seniors make up 14% of the County's population, but by 2020 they will make up 23% as the Baby Boomer generation reaches retirement age.10 ' University of California Los Angeles (UCLA) Anderson School of Management's Economic Forecast of September 2000 ' California Budget Project, Locked Out. California's Affordable Housing Crisis, May 2000 'Chapman University, Economic and Business Review, December 2000 'Department of Housing and Urban Development, Opting In: Renewing America's Commitment to Affordable Housing, April 1999 `California Department of Housing and Community Development, 2000 DataQuick Information Systems, a private company that tracks and publishes statistics on home and condominiums sales ' The Los Angeles Times, May 5, 2001 'The Los Angeles Times and The Orange County Register "The County of Orange, Orange County Community Indicators, 2001 Providing senior citizens with affordable housing is crucial. Many seniors live on fixed incomes so when the cost of housing goes up their ability to pay the increase is affected. The California Housing Element Law, Government Code §65580, et seq., places seniors in a special needs category. This is substantiated by the fact that seniors make up 30% of those receiving Federal Section 8 Housing Assistance Program.' In November 2000 the Orange County Board of Supervisors responded to these important needs by ranking affordable housing as one of the two top priorities for the County. Subsequent Board of Supervisors' action allocated $34.8 million over the next five years toward this effort. Housing Needs Assessment The Southern California Association of Governments (SCAG) is responsible for a Regional Housing Needs Assessment (RHNA) and subsequent allocation to the County and cities. This represents total projected housing needs based on anticipated population growth with adjustments for replacement housing due to demolitions and conversions, and for variations in local vacancy rates. Total allocation for the 1998 -2005 planning period represent an 8% increase over current Orange County housing units. Allocation for New Housing for Orange County, 1998 -2005 Income Level RHNA Fair Share of Housing Units Very Low 15,046 Low 9,725 Moderate 16,237 Above Moderate 34,506 Total 75,502 Souma: Soumem Califomia A ...tio of Go emme.% State Housing Element Law does not explicitly require local government jurisdictions to establish separate objectives for extremely low- income households, i.e., those with incomes less than 30% of the county median or about $20,000 per year. This income group has been the priority for organizations such as the Kennedy Commission, an advocacy group. The Grand Jury believes the County and cities should recognize that it is important to address the needs of all economic segments of the County's population, including the extremely low category. The Federal Section 8 Housing Assistance Program of HUD has been the primary means for counties and cities to serve this group in the past. This program is administered through the Housing Authorities of counties and cities. The Orange County Housing Authority operates the " Orange County Housing Authority, Annual Plan, 2001 program for unincorporated areas and 30 cities in the County. The cities of Anaheim, Garden Grove, and Santa Ana have their own Housing Authorities. The total number of assistance vouchers available to tenants is: • 8,169 for the Orange County Housing Authority • 5,400 for the Anaheim Housing Authority • 1,988 for the Garden Grove Housing Authority • 2,033 for the Santa Ana Housing Authority The Federal Housing and Urban Development Department has allocated additional Section 8 vouchers to California. The Orange County Housing Authority has applied for 820 of these additional vouchers. Housing Authorities of the cities have applied as follows: Anaheim -700, Garden Grove -350, and Santa Ana -500. Federal and State funds for new construction and rehabilitation have also been appropriated. The County and cities are currently pursuing these vouchers and funds. Affordable housing is extremely difficult for those workers who make $7 to $10 an hour. Occupations in this wage range include construction trade workers, nursing aides, cashiers, mail clerks, childcare workers, elder caregivers and cooks. Major amusement parks, healthcare institutions and fast food restaurants are significant job producers in the minimum and near minimum wage category. Success in providing affordable housing for these workers is sorely inadequate. A negative impact on the transportation infrastructure occurs as more of the workforce of Orange County must find housing in adjacent counties. Air pollution and freeway - commute time increase, affecting quality of life for all County residents. The Housing Element Process California State Housing Element law requires counties and cities to have a Housing Element as part of their General Plan. The State of California has declared that "... availability of housing is of vital statewide importance and the early attainment of decent housing and a suitable living environment for every California family is a priority of highest order" (§ 65580 of Government Code). Further, State Housing Element law requires "... an assessment of housing needs and an inventory of resources and constraints relevant to the meeting of these needs,' (Government Code § 65583(a)). The Housing Element spells out the present condition of housing stock in a particular city or county. The element projects into the future how a city or county will address the need to provide affordable housing for residents of that community. The County of Orange and its cities are creating updated Housing Elements for the 1998 -2005 time period. In this process, SCAG has the responsibility to allocate the number of affordable housing units based on income levels for each governmental jurisdiction. When establishing affordable housing needs, SCAG attempts to arrive at a fair share allocation. The County and its cities used the Orange County Council of Governments (COG) as the entity to negotiate the fair share numbers among Orange County cities. All Housing Elements are sent to the State of California's Department of Housing and Community Development for review and approval. The Housing Elements must also consider the constraints and limitations in local communities for providing affordable housing. These can be grouped in the following categories: Financial • Land scarcity and cost Construction costs • Mortgage interest rates • Availability of mortgage and rehabilitation financing • Labor costs • Time required to process developments Government • Restrictive zoning • Building codes • Land use controls • Government fees and improvement costs • State and local tax and fiscal policies • Environmental concerns • Complicated government procedures for processing housing projects Political will and the leadership of elected officials and local governmental staff are essential for any successful program to generate additional affordable housing units. An attitude called NIMBYism (Not In My Back Yard) exists in many communities. There is a fear that creating affordable housing will cause property values to go down. The processes and procedures used by local governments to create these housing elements are intentionally extensive. It requires local entities to look closely at land use, zoning, regulations, fees and development resources. This provides a challenge and opportunity to follow through with creative plans and programs to implement the goals and objectives. Although the sanctions for not producing the affordable housing are not severe, the mandate to fulfill the allocations should be taken seriously. Development Resources No single map for the County and cities identifies the land available for affordable housing. The County's Housing Element Draft has proposed an Overlay Zone that would identify affordable housing land sites. The County and some cities have maps of affordable housing site locations in their Housing Elements while other cities have it in narrative form. Countywide information is therefore somewhat fragmented. Technology called Geographic Information Systems (GIS) is available but the GIS mapping process requires computer hardware, software, data, people and training. Layers of information are created and can be superimposed. Land appropriate for higher density housing development can be depicted in a consolidated form and be made available to private and public entities. Numerous private and public resources are available to develop affordable housing in the County. Resources can be used in a single program or in combinations to accomplish the goal to build new housing or rehabilitate existing units. A compilation of available resources prepared by the City of Huntington Beach in their Housing Element document is shown as an example in Appendix B. The County and other cities have comparable documents. Assessment of Progress The County appears to be meeting the affordable housing needs of the low and moderate - income levels but is falling far short in number of units built for the very-low income group. Less than 2% of new housing needs established by SCAG for the County unincorporated area for very-low income people have been met for the 1998 -2000 period. Progress Toward Meeting New Housing Needs Orange County Unincorporated Area 1998 -2005 ..w•w. �wuye wunry riamm�g a i:eve,opment Servlc°° DCpariment City progress for the very-low income category is similar to the County's unincorporated area. Some cities have made zero progress and others have made as much as 40 %. Overall average for the county is still less than 10 %. Very Low Moderate Above Total Low Moderate Total needs 1998 -2005 4,084 2,950 4,992 10,661 - 22,687 Units built 1998 -2000' 67 2,694 3,484 3,106 9,351 %of needs met 2% 91% 70% 29% 41% Remaining needs 2000 -05 4,017 256 1,508 7,555 13,336 % of needs remaining 98% 9% 30% 71% 59% `Includes production through September 30,'2000 ..w•w. �wuye wunry riamm�g a i:eve,opment Servlc°° DCpariment City progress for the very-low income category is similar to the County's unincorporated area. Some cities have made zero progress and others have made as much as 40 %. Overall average for the county is still less than 10 %. Cooperation and Collaboration A variety of affordable housing types can be developed or rehabilitated to provide housing choices for very-low income people: • Single- family homes • Attached condominiums • Rental apartment units • Senior housing • Single residence occupancy units (SRO) Recently, the most successful very-low income affordable housing programs use a cooperative and collaborative model. The County and city Housing Elements include examples of partnerships among for - profit, non - profit and local government sectors in producing affordable housing. Innovative financial packages can be put together so government at all levels (federal, state and local) can join with for- profit and non - profit organizations to successfully create affordable housing for very-low income people in the County. The County's earmarked Affordable Housing Fund includes provision to provide financial resources to cities to develop affordable housing. The Board of Supervisors has approved funding for nine projects consisting of 665 units of affordable rental housing in Orange County during the past year. Three projects are within the unincorporated areas and six projects are within the cities of Orange, Stanton, Anaheim, Tustin and San Clemente. The County requires all projects be marketed to residents throughout the County. In addition, cities are expected to contribute financially to the support of the project. The Orange County HCD Department facilitated the establishment of the City— County Housing Roundtable in September 1999. The membership of this organization includes local government housing and redevelopment staff. The purpose of the Roundtable is to provide a forum for discussion and coordination of Countywide housing issues, procedures and processes. The Orange County Affordable Housing Home Ownership Alliance ( OCAHOA) is an example of a private collaborative that assists the County and cities to meet the affordable housing goals in their Housing Elements. OCAHOA has the following partners: Merrill Lynch, The Enterprise Foundation, Fannie Mae, Wells Fargo Bank and the Building Industry Association of Orange County. This partnership of private and non - profit sectors is aimed at the development of targeted solutions that will increase the availability and supply of quality affordable housing for working families. An affordable housing trust fund is a key component of the Alliance. This fund provides low interest loans to affordable housing builders for pre - development, site acquisition, and /or rehabilitation. Merrill Lynch committed the initial one million dollars to establish the fund. The first project is affordable housing in Buena Park for entry-level professors at California State University, Fullerton. The Orange County Affordable Housing Collaboration is another example of an organization that uses a cooperative approach. It emerged from the Future Search Conference on affordable housing held in October of 1999. Participating are a broad range of stakeholders including: business, labor, local elected officials, government staff, lenders, affordable housing developers and non -profit service providers. A new affordable housing program called The Extra Credit Teacher Home Purchase Program has been created for first -time buyers who are credentialed teachers, assistant principals or principals. Orange County and the Southern California Home Finance Authority have teamed up to establish this opportunity for home buying. Eligible educators must commit to work at a designated low. performing school in the County for five years. The assistance package includes a $7,500 down payment grant as well as a low fixed -rate interest mortgage for a single family home. In summary, the Grand Jury is encouraged by the progress and accomplishments that are occurring. All information from housing literature and from recognized private, non -profit and government leaders indicate that government assistance is essential to provide affordable housing for very-low income residents of the County. Collaboration and cooperation give hope that one candle lighted in darkness can create light at the end of the tunnel. METHOD OF STUDY The Orange County Grand Jury interviewed housing officials of the County and the cities. Also interviewed were the Orange County Business Council, Building Industry Association of Southern California and non - profit organizations involved in affordable housing construction and management. In addition, the Grand Jury conferred with several large employers, local university academicians, SCAG officials and housing consultants for Orange County. Site visits were made to affordable single - family homes, single resident occupancy units and multi - family units in several locations within the County. The Grand Jury also interviewed occupants of these residences. The Grand Jury attended committee and taskforce meetings of several organizations: • The Orange County Area Agency on Aging • The City — County Housing Roundtable where local government housing specialists gather to discuss common issues • The Orange County Housing Element Resource Team which includes government, advocacy groups, for - profit and non -profit members These committees and taskforces include the major stakeholders who discuss crucial issues involving policy, process and procedures to accomplish the goal to provide affordable housing for the residents of Orange County. FINDINGS Under California Penal Code § 933 and § 933.05, responses are required to all findings. The 2000 -2001 Orange County Grand Jury has arrived at the following seven findings: 1. Government financial assistance and innovative financial packages are essential for the production of very-low income housing for residents of Orange County. 2. The County does not have a consolidated document or map to illustrate available land for affordable housing units. The County and individual cities create their own separate documents depicting the land available to meet .affordable housing needs. 3. The City — County Housing Roundtable brings together local government housing experts to discuss mutual programs and plans from a regional perspective. 4. Production of affordable housing is most successful when the County and cities cooperate with all stakeholders to provide land, zoning and financing. 5. The County and cities have a great challenge to provide needed affordable housing for the extremely -low and very-low income people including the working poor, large families, seniors on fixed incomes and the disabled. 6. The County's and cities' Housing Authorities have been provided with the opportunity for additional Federal Section 8 Housing Assistance Vouchers. 7. The County has participated in cooperative efforts with some cities by providing financial support to develop affordable housing. Responses to all Findings are required from the Orange County Board of Supervisors and the City Councils of: Anaheim Costa Mesa Fountain Valley Huntington Beach La Palma Laguna Niguel Los Alamitos Orange San Clemente Seal Beach Villa Park Brea Cypress Fullerton Irvine Laguna Beach Laguna Woods Mission Viejo Placentia San Juan Capistrano Stanton Westminster 10 Buena Park Dana Point Garden Grove La Habra Laguna Hills Lake Forest Newport Beach Rancho Santa Margarita Santa Ana Tustin Yorba Linda Responses to Findings 1 -5 are requested from the Orange County Housing and Community Development Department. Responses to Findings 2 and 4 are requested from the Orange County Planning and Development Services Department. A Response to Finding 6 is requested from the Orange County Housing Authority and the Housing Authorities of the cities of Anaheim, Garden Grove and Santa Ana. RECOMMENDATIONS In accordance with California Penal Code § 933 and § 933.05, each recommendation requires a response from the government entity to which it is addressed. These responses are submitted to the Presiding Judge of the Superior Court. Based upon the findings, the 2000 -2001 Orange County Grand Jury recommends that: 1. The Orange County Housing and Community Development Department (HCD) and the Orange County Planning and Development Services Department should take the lead with cities in the County to create a consolidated Geographic Information System (GIS) map or other instrument designating available land for affordable housing units. This map should be made available to private and public entities. (Finding 2) 2. A regional approach to provide affordable housing in the County should be continued. (Finding 3) 3. Orange County HCD should continue to bring stakeholders (business, labor, local elected officials, government staff, lenders, housing developers, and non - profit service providers) together to accomplish the task to produce more affordable housing units in the County. (Finding 4) 4. Each time the Federal Government allows applications for additional Federal Section 8 Housing Assistance Vouchers the Housing Authorities of Orange County and the cities of Anaheim, Garden Grove and Santa Ana should vigorously pursue them. (Finding 6) 5. The County and cities should make a concerted effort to create innovative financial packages with private, non -profit and public sectors to produce additional affordable housing for the working poor, large families, elderly and disabled. (Finding 1) 6. The Orange County Board of Supervisors should continue to support a regional approach to affordable housing including financial support to cities in their efforts to create additional units. (Finding 7) Responses to all Recommendations are required from the Orange County Board of Supervisors and the City Councils of: Anaheim Costa Mesa Fountain Valley Huntington Beach La Palma Laguna Niguel Los Alamitos Orange San Clemente Seal Beach Villa Park Brea Cypress Fullerton Irvine Laguna Beach Laguna Woods Mission Viejo Placentia San Juan Capistrano Stanton Westminster Buena Park Dana Point Garden Grove La Habra Laguna Hills Lake Forest Newport Beach Rancho Santa Margarita Santa Ana Tustin Yorba Linda Responses to Recommendations 1 -5 are requested from the Orange County Housing and Community Development Department. A Response to Recommendation 1 is requested from the Orange County Planning and Development Services Department. A Response to Recommendation 4 is requested from the Orange County Housing Authority and the Housing Authorities of the cities of Anaheim, Garden Grove and Santa Ana. COMMENDATIONS The Grand Jury commends the Orange County Board of Supervisors for placing the need to create more affordable housing units as one of the two top priorities for the County. The Orange County Housing and Community Development Department is commended for its initial efforts to bring together County and city housing staffs to coordinate the regional efforts to produce more affordable units. HCD also brought together major stakeholders in an effort to create more affordable housing units for profit corporations, non - profits and the local government representatives. Orange County Community Housing Corporation, Jamboree Housing, Mercy Housing of California, Habitat for Humanity, Orange Housing Development Corporation and Neighborhood Housing Services of Orange County are commended for their dedication and accomplishments in the field of affordable housing for Orange County residents in spite of many obstacles. 12 Appendix A The Orange County Housing Element (Draft) 2001 City Housing Element, (Available Drafts) 2000, 2001 California's Department of Housing and Community Development, Raising the Roof.- California Housing Development Projections and Constraints, 2000 California Budget Project, Locked Out: California's Affordable Housing Crisis, 2000 County of Orange, Proposed Affordable Housing Strategy, March 2, 1999 County of Orange Housing and Community Development Department, Annual Action Plan Fiscal Year 1999 -2000 The Urban Institute, Section 8, Mobility and Neighborhood Health, October 1999 Southern California Studies Center, University of Southern California, Sprawl Hits The Walk Confronting the Realities of Metropolitan Los Angeles, 2001 Orange County Council of Governments, Smart Growth Strategies to Accommodate Orange Counties Future, 1999 13 Appendix B Example of Financial Resources Available for Housing Activities Program Type Program Name Description Eligible Activities Grants awarded to the olty on a Acquisition 1. Federal Community formula basis for housing and Rehabilitation Programs Development community development activities. Home buyer assistance Block Grant (COB@ Recipients must be low to moderate Economic development a. Fomulal income (up to 80% MFI), or reside Homeless assistance Enfifiements in a low and moderate-Income Public services (15% rap) target area. Neighborhood revitalization Home Investment Flezible grant program awarded to Nev, construction Partnership (HOME) City on formula basis for housing Acquisition activities Rehabilitation Home Buyer Assistance Tenant -based assistance Planning Section 8 Rental Rental Assistance payments to Rental Assistance Assistance Program owners of private market rate unit (certificates), or directly to tenants (vouchers). Section 8 tenants must be low income (up W 50% MFI). Administered by the Orange County Housing Authority Section 202 Grants W non -profit developers of Acquisition b. Competitive supportive housing for the elderly. Rehabi0talion Programs Rental assistance is available b New construction very lovl- income elderly persons (up Rental assistance W 50% MFI). Support services Section 811 Grants W con -profits developers of Acquisition supportive housing for persons with Rehabilitation disabilities, including group homes. New construction independent living facilities and Rental assistance intermediate a. faclides. Section 203 (k) Provides single long -tern, taw• Acquisifion — dwellings and interest loan at fixed rate to finance land both We acquisition and Rehabilitation rehabilitation of residential property. Relowtion of unit to another site on new foundation on the mortgage property Refinance existing indebtedness 2. State Programs Mortgage Credit Income tax credits available W first - Home Buyer Assistance Certifirata (MCC) time hwnebuyers for the purchase Program of new or existing single-family Musing. Loral agencies (County) make certificates available. 14 Program Type Program Name Description Eligible Activities 2. Slate Programs Callfomia Housing Finance Agency Below Market rate financing offered New Construction (cont) (CHFA) Rental to builders and developers of multiple family and senior rental Rehabilitation Acquisition of properties Housing Progrema housing. Tax exempt bonds provide from 20 to 150 units below- market mortgages. Low Income Housing Tax Credit Tax credits available to individuals New construction and Corporations that invest in low - Rehablition income rental housing. Tax credits Acquisition antl to people high tax liability, and re proceeds are used m create housing i 3. Local Programs Redeve[Gpmenf Housing 20 Percent of Agency tax increment New construction Set -Aside Funds. funds are set -asitle for affordable housing activities govemed by stale Rehabilitation Acquisition Law. Tax Exempt Housing The city can support low income New construction Revenue Bonds housing by issuing housing Acquisition Rehabilitation mortgage revenue bonds requiring the developer to lease a Toed percentage of rite units in low Income households and maintain Me rents at a specified rate. 4. Private Federal National Loan applicants apply to Resources, Mortgage Association participating lenders for the Financing (Fannie Mae) following programs programs - a. Community Hone Mortgage Mortgages which fund the Home buyer assistance Improvement purchase and rehabilitation of Rehabilitation a home. Program b. Community Seconds Fixed rate second mortgages Home buyer assistance issued by pmale mortgage Mortgage Loans insurers. c. Fannie Neighbors Law Down Payment Home buyer assistance Mortgages for single- Family Hate in under server) low - income and minority communities d. Fannie 97 3% down payment mortgage Down payment assistance loans for low income home buyers 3% [Gana for noproffrs, go comment agencies to pay for owing cosh Federal Home Loan Bank Affordable Direct Subsidies to non-profit and New COttSiNCtion tar -profit developers and Wblic Housing Program agencies for affordable low-income ownership and rental projects. Applicants respond lo NOFAS, with funds awarded on competitive basis. l5