DATE: December 5, 2023
TO: Justin Hess, Executive Director
FROM: Patrick Prescott, Assistant Executive Director
VIA: Simone McFarland, Assistant Community Development Director BY: Maribel Leyland, Housing Authority Manager
SUBJECT: Approval of Housing Successor Annual Report for Fiscal Year 2022-2023
RECOMMENDATION
Approve the Fiscal Year (FY) 2022-2023 Housing Successor Annual Report (Attachment 1).
BACKGROUND
Each year, the Burbank Housing Authority ( BHA) must submit an Annual Report in accordance with redevelopment unwind law, and more specifically Health and Safety Code Section 34176.1(f).
1 The purpose of the report is to provide information to the governing body on the housing assets and activities of the BHA , specifically for the use of the Low - and Moderate-Income Housing Asset Fund ( Low Mod Fund) for FY 20 22- 2023.
DISCUSSION
The Annual Report is based on housing activities for the fiscal year and information related to the Low Mod Fund. In addition to the Annual Report, an independent financial audit of the Low Mod Fund is conducted and submitted to the governing body within six months after the end of the fiscal year, and will be included in the independent financial audit of Burbank ( the host jurisdiction).
2 Finally, the Annual Report is posted on the
housing successor’s website as required - https://www.burbankca.gov/web/community- development/housing/burbank-housing-authority.
AFFORDABLE HOUSING DEVELOPMENT
During the reporting period, July 1, 202 2, to June 30, 2023 , there was one affordable housing project under construction financed with Low Mod Funds. On December 7, 2021, the Council and BHA approved an Affordable Housing A greement (AHA) and financing to the Burbank Housing Corporation ( BHC) to create four new affordable Accessory Dwelling Units (ADUs) on existing properties (BHC ADU Project). There is no obligation to repay the Low Mod Fund forgivable loan unless BHC commits a material default of the
1 On January 31, 2012, the City Council and Housing Authority of the City of Burbank (BHA) adopted resolutions designating the BHA as the entity to retain without limitation, all of the housing assets, rights, powers, duties, obligations, liabilities and functions previously performed by the former Redevelopment Agency. 2 As of the writing of this report, the Comprehensive Annual Financial Report (CAFR) is scheduled for presentation to the City Council on January 23, 2024. The CAFR will be posted on-line after submission to the City Council.
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executed agreements, and fails to cure the default within the time periods provided in those documents. Construction is expected to be completed by December 2023 and a Grand Opening ceremony is tentatively scheduled for early 2024.
In addition, BHC has submitted a Development Review application to construct an apartment style multi-family residential building with sixty (60) units on existing properties they own at 2321, 2325, 2331, and 2335 N Fairview Street. That project is still undergoing the entitlement process and staff’s review of the financial proposal. The proposed project is expected to be presented to the Council in early 2024 for financing consideration to utilize available Low Mod funds if approved. Finally, staff has continued to meet with affordable housing developers with the goal of utilizing Low Mod funds to create additional affordable housing units for extremely-low, very-low, and lower-Income households.
LOW MOD FUND REPORTING REQUIREMENTS
The required Successor Agency Annual report contains 13 sections to provide information to the governing body on the housing assets and activities related to the Low Mod Fund for the prior fiscal year. The Annual Report (Attachment 1) includes the following information:
1. Amounts received in City/Agency debt reimbursement payments
2. Amounts deposited into the Low Mod Fund
3. Ending balance of the Low Mod Fund
4. Description of expenditures from the Low Mod Fund
5. Value of assets owned by the BHA
6. Description of transfers
7. Project descriptions
8. Status of affordable housing development activities
9. Description of outstanding obligations
10. Description of expenditures by income type
11. Number of senior units produced
12. Amount of excess surplus – Described further below
13. Information on home ownership units
The area to highlight in the Successor Agency Annual R eport is Number 12 related to excess surplus. Excess surplus is defined as the unencumbered Low Mod funds that exceed the greater of $1,000,000 or the total deposits in the L ow Mod Fund during the proceeding four years. If there is an excess surplus balanc e, housing law states the Housing Successor must:
1) Encumber the funds for a project or t ransfer that amount to another jurisdiction within three years; or
2) Transfer that amount to the California Department of Housing and Community Development (HCD) to use pursuant to the Multifamily Housing Program or the Joe Serna Jr. Farmworker Housing Grant Program within 90 days of the end of the aforementioned three-year period.
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In addition to reporting the amount of any excess surplus, the law also requires a successor agency to note how long the agency has had excess surplus, and the housing successor’s plan for eliminating the excess surplus.
In FY 2020-2021, the Low Mod Fund had an excess surplus amount for the first time in the amount of $695,623.22. This amount must be encumbered for a project or transferred to another jurisdiction within three years, or else these funds must be transferred to HCD.
The excess surplus amount was reduced to $499,927.05 in FY 2021-2022 with the BHC ADU Project approved in December 2021 and currently under construction. The excess surplus amount for FY 2022-2023 is $2,893,760.32.
As mentioned earlier in this report, st aff is reviewing a proposed development proposal submitted by BHC . Staff is currently reviewing and analyzing the proposal and may present the proposed project to the Council and BHA Board for consideration in early 2024 for utilization of available Low Mod funds. The BHC proposal could utilize between $3.5 million and $5.5 million of available funds to be determined once review is complete, if approved by the Council and BHA Board. If approved, financing to the project would eliminate the excess surplus currently noted. Furthermore, s taff will continue to seek affordable housing opportunities with other affordable housing developers by leveraging other funding sources with Low Mod funds such as the Burbank -Glendale-Pasadena Regional Housing Trust funds to finance additional affordable housing units to meet the three-year expenditure requirement for excess surplus as noted in the law.
MONITORING OF AFFORDABLE HOUSING UNITS AND PROGRAMS
Once Low Mod funds and other restricted housing funds (including federal HOME funds) are approved to fund affordable housing projects and programs and units have been leased to eligible households, staff conducts annual monitoring of the units to ensure the units remain affordable in the long-term. In addition, staff monitors outstanding loans and grants, and the repayment of funds (if any) as program income to the Low Mod Fund as outlined in approved agreements . Finally, housing staff manages several Council approved housing programs (funded via various local and state resources) to e nsure there is a diverse mix of housing opportunities in the community including:
• a rapid rehousing program to provide short -term rental assistance for homeless households and households at risk of homelessness;
• the Lifting People Up financial planning and case management program that is now available city-wide; and
• programs to assist homeless households including the navigation center at the SAFE.
3 AFFORDABLE HOUSING VOUCHER PROGRAMS
Another critical component to affordable housing in the community are the various voucher programs administered by housing staff including:
3 The SAFE is a self-storage program where homeless community members can safely store personal items and receive case management and referrals to housing resources.
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• The Section 8 Housing Choice Vouchers (HCV) program that assists extremely-low and very-low income households . Currently 894 of the 1, 027 vouchers are utilized based on available funding. This total includes an additional 13 vouchers that were allocated to the BHA in October 2022. S taff continues to select applicants from the waiting list to utilize available HCV vouchers within HUD’s approved budget. • The Veterans Affairs Supportive Housing (VASH) vouchers to assist homeless veterans. Staff applied for and received 15 VASH vouchers, and will continue to seek additional voucher s to serve the city’s homeless veteran population. All VASH vouchers are currently utilized.
• Permanent Supportive Housing (PSH) voucher s that assist veteran and other homeless households in the community . The BHA continues to renew 20 PSH vouchers allocated, and will seek to apply for additional vouchers as available. All PSH vouchers are currently utilized.
• In July 2021, the BHA received 67 Emergency Housing Vouchers (EHV). EHVs are available for homeless, at-risk of homelessness , those fleeing or attempting to flee domestic violence, dating violence, sexual assault, stalking or human trafficking, and recently homeless households as determined by HUD. As of the writing of this report, all 67 vouchers have been issued. Of the total, 59 households have leased a unit, and the balance of eight voucher holders are actively searching for a unit.
Staff will continue to apply for new vouchers as opportunities arise and as appropriate for the Burbank community.
ENVIRONMENTAL REVIEW
This Staff Report has no potential for resulting in a direct or reasonably foreseeable indirect physical change to the environment and falls outside the definition of a “project” under the California Environmental Quality Act (CEQA), and is therefore not subject to CEQA pursuant to Section 15378 of Title 14 of the California Code of Regulations. This Staff Report is for in formational purposes only regarding the submittal of an A nnual Report for the Successor Housing Agency as required by HCD.
FISCAL IMPACT
There is no fiscal impact associated with the approval of the Annual Report.
CONCLUSION
California Health and Safety Code Section 34176.1(f) requires housing successor agencies to prepare Annual Reports providing the requested information on housing assets and activities. An Annual Report for FY 20 22-2023 has been prepared. Staff has continued to seek opportunities to utilize Low Mod F unds to create additional housing units and fund programs to assist lower income households, homeless households, and those at risk of homelessness. During the reporting year, the Council and BHA board approved the BHC ADU Project, which is financed with Low Mod funds and is currently under construction. In addition, BHC is proposing a 60-unit project that is currently going through the entitlement process and financial review for possible financing from available Low Mod funds. Staff will continue to seek similar opportunities in future years to utilize available Low Mod funds. Staff recommends that the BHA Board approve the FY 2022-
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2023 Annual Report . Once approved by the BHA Board , the Annual Report will be transmitted to HCD.
ATTACHMENTS
Attachment 1 – Housing Successor FY 2022-2023 Annual Report