AGENDA ITEM NO. 13
CITY OF HAWTHORNE
City Council
AGENDA BILL
For the meeting of March 26, 2024
Originating Department: Housing
City Manager: __________
Vontray Norris
Dir. of Housing: ___________
Kimberly Mack
SUBJECT:
Receive and file Housing Successor Agency Reports for Fiscal Year Ending 2022-23.
RECOMMENDED MOTION:
Staff recommends that the City Council receive and file the City of Hawthorne Housing Successor Agency Annual Report for Fiscal Year 2022-23 (Attachment #1).
DISCUSSION:
Background:
The City of Hawthorne (“City”) serves as the Housing Successor Agency to the former Hawthorne Redevelopment Agency (“Agency”), which was dissolved on February 1, 2012. Each Housing Successor Agency is required to prepare an annual report documenting its assets, revenues, expenditures, and how it is meeting requirements imposed by Health and Safety Code Section 34176.1.
The annual report is required to contain the following:
1) A summary of housing successor agency duties;
2) The balance of the Low- and Moderate-Income Housing Asset Fund (“Housing Asset Fund”);
3) An inventory of properties held in the Housing Asset Fund; and 4) Reports on the City’s performance thus far in meeting the income and age proportionality requirements of Health and Safety Code (“HSC”) Section 34176.1.
The report is due to the California Department of Housing and Community Development by April 1 each year and must be posted on the City’s website. The report for Fiscal Year 2022-23 is being presented to the City Council to receive and file.
Analysis:
The City’s progress on major requirements in the Fiscal Year 2022-23 is summarized below.
Housing Asset Fund Activity
The City deposited $480,171 into the Housing Asset Fund during Fiscal Year 2022-23. Revenues were from investment earnings and rental property income (security deposits, rents, and machine income).
Real Property Assets and Loans Receivables
As the Housing Successor Agency, the City inherited six (6) real properties, one (1) loan, and two (2) deferrals from the former Agency when it dissolved on February 1, 2012. The value of real properties and loans receivable was $5 million as of June 30, 2020. Of the six (6) properties, five (5) are developed and operating as affordable housing, and one (1) is in the process of being sold/developed.
Expenditure Proportionality Requirements
Expenditures from the Housing Asset Fund must meet specific proportionality requirements by income level and age:
• Administrative and monitoring expenses are capped at $200,000 annually, adjusted for inflation, or five (5) percent of the value of real properties and loans receivable, whichever is higher.
• Up to $250,000 may be spent annually on rapid re-housing solutions for homelessness. • If Housing Asset Funds are spent on housing projects and programs, within each five-year compliance period:
o At least 30% must be spent on extremely low-income households (earning up to 30% of the Area Median Income);
o No more than 20% may be spent on low-income households (earning 60-80% of the Area Median Income); and
o No monies may be spent on moderate or above moderate-income households (earning more than 80% of the Area Median Income).
• No more than 50% of rental housing units assisted by the City or the former Redevelopment Agency in the prior 10 years may be restricted to seniors.
The City only incurred administrative expenses during Fiscal Year 2022-23 and is meeting all requirements for rapid rehousing, projects and programs, and senior expenditures. However, the $254,500 limit for administrative expenditures was exceeded with a total of $304,542 spent. Staff is working to reduce annual administrative expenditures to ensure requirements are met in the future.
Steps Following Approval:
City Staff will post the Fiscal Year 2022-23 Housing Successor Annual Report on the City’s website.
ECONOMIC DEVELOPMENT STRATEGIC PLAN:
None
FISCAL IMPACT:
None
NOTICING PROCEDURES:
72 hours posted notice pursuant to the Ralph M. Brown Act ATTACHMENT(S):
1. Hawthorne Housing Successor Agency Annual Report for Fiscal Year 2022-23