City of Gonzales
CITY MANAGER DEPARTMENT
STAFF REPORT
TO: Honorable Mayor Rios and City Council
DATE: May 2, 2022
FROM: Rene Mendez, City Manager
SUBJECT: Update on Affordable Senior Housing at 498 S. Alta Street
RECOMMENDATION
Staff recommends the City Council consider an update on the proposed use of the property located at 498 S. Alta Street, Gonzales CA (APN 020-041-016) to inform of the Agreement with CHISPA for the development of affordable senior housing and provide direction accordingly.
BACKGROUND
On October 18, 2021, your Council authorized staff to move forward with the purchase of the property located at 498 S. Alta Street, Gonzales CA (APN 020-041-016) for the future development of affordable senior housing. Staff is pleased to report that the property has been acquired by the City and is in the final stages with CHISPA Housing on the agreement to develop the affordable senior housing, which will be brought forward to your Council for consideration.
As has been well documented and frequently discussed by your City Council, the City is in dire need of more housing opportunities. While housing of all types is needed, there are few opportunities for seniors, which is also a critical need. In fact, the City only has one senior housing project which currently has a significant wait list.
REVIEW AND ANALYSIS
Agreement with CHISPA
In working on finalizing the agreement to present to your Council, CHISPA is requesting that while they are very committed to building 36-40 one-bedroom apartments, that consideration be provided for an alternative project of 15 small single-family homes that would be rented to seniors. As mentioned in the attached letter from CHISPA, the reason for requesting the alternative project is that there is:
AGENDA
ITEM
9 1. Some concern with ability to obtain Tax Credit financing because it is highly competitive;
2. Uncertainty whether this project would score high enough to obtain the Tax Credit because after years of maintaining the same criteria (scoring matrix) for deciding the projects, there have been some recent changes to the criteria that may continue.
It also important to note that any other affordable housing developer like CHISPA would have the same concern. Therefore, as clearly articulated in the attached letter, while CHISPA remains committed to the larger project, there is a good case for allowing for the alternative smaller project should it become necessary.
Explain Recommendation and How it Supports the Vision
Gonzales will continue to be a safe, clean, family-friendly community, diverse in its heritage, and committed to working collaboratively to preserve and retain its small-town charm.
Explain: As listed above and documented, there is a clear need for additional housing of all types in order to continue to support being a safe, clean, and family-friendly community.
Explain how the Recommendation Directly Implements the Mission The City Council and Staff of the City of Gonzales will realize our Vision by providing the leadership, commitment, and resources necessary to provide excellent services that enhance the quality of life of our diverse community.
Explain: By taking advantage of an opportunity to develop additional Senior Housing through a partnership with CHISPA, the City is able to move forward in a cost-effective way to construct additional housing needed to enhance the quality of life of our community.
City services will be delivered in a cost-effective, respectful, and friendly manner to insure the safety and well-being of the residents and the promotion of business, recreational, housing and employment opportunities in an environmentally sustainable manner.
Explain: Staff believes the partnership with CHISPA is a cost-effective way of developing additional housing opportunities.
Strong fiscal policies allow us to provide appropriate infrastructure for:
• Public Safety X Yes No N/A
• Housing X Yes No N/A
• Recreation X Yes No N/A
• Environment X Yes No N/A
• Education X Yes No N/A
Explain: Please see above.
ALTERNATIVES
Your Council has the following options:
• Not authorize the alternative smaller project and to direct staff to negotiate accordingly with CHISPA. While this is not recommended, an agreement could be structured that would likely reflect the City taking on more financial responsibility should the funding for the larger project not materialize, which is not recommended;
• Find another affordable housing development partner, who would likely have the same concerns; or
• Direct staff to undertake the project internally, which is not recommended because staff does not have the expertise necessary and would likely need to find a consultant to develop, oversee a bidding process, and manage the project overall. While this is certainly doable, this would result in more costs to the City.
BUDGET IMPACT
Depending on the direction provided by your Council, this project would have a $50,000 positive benefit to the City’s housing fund, have no budget impact, or result in future costs.
CONCLUSION
Staff recommends the City Council consider an update on the proposed use of the property located at 498 S. Alta Street, Gonzales CA (APN 020-041-016) to inform of the Agreement with CHISPA for the development of affordable senior housing and provide direction accordingly.
Attachments:
1. CHISPA Letter