HOUSING SUCCESSOR ANNUAL REPORT
Murrieta Housing Authority
Fiscal Year 2023-24
TABLE OF CONTENTS
TABLE OF CONTENTS ..................................................................................................................... 1 INTRODUCTION ............................................................................................................................... 1 HOUSING SUCCESSOR REQUIREMENTS........................................................................................ 1 ASSETS TRANSFERRED TO HOUSING SUCCESSOR ...................................................................... 2 HOUSING ASSET FUND ACTIVITY ................................................................................................... 3 EXPENDITURE LIMIT COMPLIANCE................................................................................................. 4 SENIOR HOUSING LIMIT COMPLIANCE ........................................................................................... 5 DEPOSITS AND FUND BALANCE ..................................................................................................... 6 EXCESS SURPLUS........................................................................................................................... 6 TRANSFERS TO OTHER HOUSING SUCCESSORS .......................................................................... 7 HOUSING SUCCESSOR PORTFOLIO ............................................................................................... 7 LOANS RECEIVABLE........................................................................................................................ 8 PROPERTY DESCRIPTIONS AND DISPOSITION STATUS ................................................................ 9 HOMEOWNERSHIP UNIT INVENTORY ........................................................................................... 11 APPENDIX 1 - HOUSING SUCCESSOR ANNUAL REPORT REQUIREMENTS ................................. 13 APPENDIX 2 – HOUSING ASSET TRANSFER FORM ...................................................................... 14 APPENDIX 3 – HOUSING ASSET FUND EXPENDITURE REQUIREMENTS ..................................... 15 Murrieta Housing Successor Annual Report 2023-24 1
INTRODUCTION
The Murrieta Housing Authority (“Housing Authority”) is the Housing Successor Agency to the former Murrieta Redevelopment Agency (“Agency”). The Housing Authority is responsible for maintaining housing assets transferred from the former Agency. Its main goal is to provide affordable housing for City of Murrieta (“City”) residents.
This Housing Successor Agency Annual Report (“Annual Report”) contains information on Fiscal Year (“FY”) 2023-24 finances and activities as required by Health and Safety Code (“HSC”) Section 34176.1(f).
FY 2018-19 marked the end of the first five-year compliance period for income proportionality. This Annual Report details how the Housing Authority met all requirements for expenditures by income level since the beginning of the second five-year compliance period, which runs from July 1, 2019 through June 30, 2024.
The Annual Report is due to the California Department of Housing and Community Development (“HCD”) by December 31 annually and must be accompanied by an independent financial audit. The City’s audited financial statements will be posted on the City’s website when available. This report is an addendum to the Housing Authority Annual Report required by HSC Section 34328, which is submitted to HCD by October 1 annually.
HOUSING SUCCESSOR REQUIREMENTS
Senate Bill (“SB”) 3411 and subsequent legislation enacted several requirements for housing successor agencies. Housing successors must comply with three major requirements pursuant to HSC Section 34176.1:
1. Expenditures and housing production are subject to income and age targets.
2. Housing successors may not accumulate an “excess surplus,” or a high balance based on certain thresholds.
1 2013-14 legislative session
Murrieta Housing Successor Annual Report 2023-24 2
3. Properties must be developed with affordable housing within five to ten years of the California Department of Finance approving the Housing Asset Transfer Form.
The requirements are designed to ensure that housing successors are actively utilizing former Agency housing assets to produce affordable housing. Appendix 1 provides a detailed summary of the reporting requirements that are addressed in this Annual Report.
ASSETS TRANSFERRED TO HOUSING SUCCESSOR
Upon the statewide dissolution of redevelopment in 2012, all rights, powers, committed assets, liabilities, duties, and obligations associated with the housing activities of the Agency were transferred to the Housing Authority. The Housing Authority prepared a Housing Asset Transfer Form (“HAT”) that provided an inventory of all housing assets transferred from the Agency to the Housing Authority. This included:
1. Real properties;
2. Low and Moderate Income Housing Fund (“LMIHF”) encumbrances; and
3. Loan receivables.
All items on HAT were approved by the California Department of Finance (“DOF”) on September 5, 2012.
It is important to distinguish that Housing Authority assets that were not transferred from the former Agency, or generated by or purchased with assets from the former Agency, are not subject to HSC Section 34176.1. A copy of the HAT is provided as Appendix 2.
Murrieta Housing Successor Annual Report 2023-24 3
HOUSING ASSET FUND ACTIVITY
Former Agency assets, and the revenues generated by those assets, are maintained in a Low and Moderate Income Housing Asset Fund (“Housing Asset Fund”).2 Housing Asset Funds may be spent on:
• Administrative costs up to $200,000 per year adjusted for inflation, or 5% of the statutory value of real property owned by the housing successor and the value of loans and grants receivable from the HAT (“Portfolio”), whichever is greater. The FY 2023-24 limit for the Housing Authority was $727,478 (5% of the Portfolio value of $14,549,554). • Homeless prevention and rapid rehousing services up to $250,000 per year if the former Agency did not have any outstanding housing inclusionary or replacement housing production requirements. The Housing Authority qualifies because the former Agency had a surplus of affordable housing production units upon dissolution.
• Affordable housing development assisting households up to 80 percent of the Area Median Income (“AMI”), subject to specific income and age targets.
Five-Year Income Proportionality: If any Housing Asset Funds are spent on affordable housing development, it triggers a requirement to spend at least 30 percent of such expenses assisting extremely low income households (30% AMI) and no more than 20 percent on low income households (between 60-80% AMI) per five-year compliance period. The current fiveyear compliance period runs from July 1, 2019 through June 30, 2024.
Note that housing successors must report expenditures by category each year, but compliance with income proportionality limits is measured every five years. For example, a housing successor could spend all its funds in a single year on households earning between 60-80% AMI, as long as it was 20 percent or less of the total expenditures during the five-year compliance period.
Ten-Year Age Proportionality: If more than 50% of the total aggregate number of rental units produced by the City, Housing Authority, or former Agency during the past 10 years are 2 The Housing Asset Fund replaced the former Agency’s Low and Moderate Income Housing Fund.
Murrieta Housing Successor Annual Report 2023-24 4
restricted to seniors, the Housing Authority may not spend more Housing Asset Funds on senior rental housing.
Appendix 3 describes Housing Asset Fund expenditure requirements in more detail, including the types of costs eligible in each category.
EXPENDITURE LIMIT COMPLIANCE
The Housing Authority complied with all Housing Asset Fund spending restrictions in FY 2023-24, including five-year compliance period income targeting requirements:
3 • Administrative costs of $34,802 did not exceed the $727,478 maximum amount for FY 2023-24. • No homeless prevention or rapid rehousing expenses were made in FY 2023-24. • No affordable housing development-related expenditures were made in FY 2023-24. However, during the 5 year compliance period the Housing Authority has spent a total of $6,142,807 on affordable housing development-related expenditures. Of this amount, 31 percent assisted extremely low income households and 20 percent assisted low income households. 3 The Housing Asset Fund figures in this Annual Report are based on unaudited numbers that were available at the time this report was prepared. They might vary slightly from audited numbers once the Housing Authority’s annual audit is complete.
Murrieta Housing Successor Annual Report 2023-24 5
The Housing Authority met all expenditure requirements throughout the current five-year compliance period of July 1, 2019 through June 30, 2024.
Failure to comply with the extremely low income requirement in any five-year compliance period will result in the Housing Authority having to ensure that 50 percent of remaining funds be spent on extremely low income rental units until in compliance. Exceeding the expenditure limit for low income households earning between 60-80% AMI in any five-year reporting period will result in the Housing Authority not being able to expend any funds on these income categories until in compliance.
SENIOR HOUSING LIMIT COMPLIANCE
The Housing Authority complies with the limit allowing no more than 50 percent of the total aggregate number of rental units produced within the preceding ten years to be restricted to seniors. The Housing Authority, City, and former Agency assisted 118 deed-restricted rental units in the last ten years, none of which are restricted to seniors. Table 1 details units assisted by project.
Murrieta Housing Successor Annual Report 2023-24 6
DEPOSITS AND FUND BALANCE
The Housing Authority deposited $114,847 into the Housing Asset Fund during FY 2023-24. The deposits made in FY 2023-24 include $37,167 in interest revenue, $18,052 from repayment on the Monte Vista I residual receipts loan, $53,128 on the Monte Vista II residual receipts loan, and $6,500 Monte Vista I audit and maintenance fee revenue.
The Housing Asset Fund balance as of June 30, 2024 was $299,997 as summarized in Table 2.
EXCESS SURPLUS
The Housing Asset Fund may not accumulate an “excess surplus”, or an unencumbered amount that exceeds the greater of $1 million, or the sum of deposits in the prior four fiscal years. This requirement Property
1 Senior Units %
Non-Senior
Units
% Total Units
24960 Adams Ave (APN 906-080-018) 0 0% 118 100% 118
Total 0 118 118
Total Deed-Restricted Senior Units: 0%
1 This list only includes units that had a regulatory agreement executed within the last 10 years.
Table 1
Deed-Restricted Senior Units Assisted Prior Ten Years
Murrieta Housing Successor Annual Report 2023-24 7
ensures that housing successors are actively spending available Housing Asset Funds on affordable housing.
The Housing Authority did not have an excess surplus as of FY 2023-24, as shown in Table 3.
The Housing Authority will continue monitoring its deposits and fund balance to avoid an excess surplus.
TRANSFERS TO OTHER HOUSING SUCCESSORS
There were no transfers to another housing successor entity for a joint project pursuant to HSC Section 34176.1.
HOUSING SUCCESSOR PORTFOLIO
The Housing Successor Portfolio includes two properties and five loans receivable transferred from the former Agency. The Portfolio had a value of $14,549,554 as of June 30, 2024, as detailed in Table 4.
Table 3
Excess Surplus Calculation
Fiscal Year 2019-20 2020-21 2021-22 2022-23 2023-24
Deposits $ 71,896 $ 321,341 $ 829,241 $ 161,399 $ 114,847 FY 2023-24 Beginning Balance $ 244,756
Less: Encumbered Funds $ -
Unencumbered Amount
1 $ 244,756
Step 1
$1 Million, or $ 1,000,000
Last 4 Deposits $ 1,383,877
Result: Larger Number $ 1,383,877
Step 2
Unencumbered Amount $ 244,756
Larger Number From Step 1 $ 1,383,877
Excess Surplus $ -
1 As of July 1, 2023.
Murrieta Housing Successor Annual Report 2023-24 8
LOANS RECEIVABLE
Six loan agreements were transferred from the former Agency to the Housing Authority as part of the Housing Asset List approved by DOF on September 5, 2012, one of which one was paid off in FY 2018- 19 and another in FY 2023-24. The four remaining loans and an additional loan issued in FY 2022-23 are described below, including the outstanding loan balances as of June 30, 2024. ▪ Three First-Time Homebuyer Down Payment Assistance Loans for $20,000 each ($60,000 total) with a 3 percent annual interest rate. Loan repayments are due upon the sale, transfer, or failure to occupy the property. One loan was paid off in FY 2018-19 and a second was paid off in FY 2023-24. There is one remaining loan with an outstanding balance of $30,616 as of June 30, 2024.
▪ A Participation Agreement with Murrieta Family Housing Partners, LP was issued in 2003 to construct 64 residential units at Monte Vista I. The principal amount was $610,046 with a 3 percent annual interest rate. The outstanding balance as of June 30, 2024 was $532,663. ▪ A Development Cost Gap Assistance Loan issued in 2010 to Monte Vista II Family Housing LLC to construct 40 units at Monte Vista II. The principal amount was $2.2 million with a 3 percent annual interest rate. The outstanding balance as of June 30, 2024 was $2,793,069.
Asset Amount
Real Properties
Monte Vista I Land, 24740 Jefferson Ave (APN 949-600-031) 1 1,321,594
24960 Adams Ave (APN 906-080-018) 3,515,665
Subtotal 4,837,259
Loans Receivable
First-Time Homebuyer Loan (1) 30,616
CFD Special Assessment District Payoff Program 14,214
Murrieta Family Housing Partners, LP 532,663
Monte Vista II Family Housing, LLC 2,793,069
National Community Renaissance of California 6,341,733
Subtotal $9,712,295
Total Portfolio Value $14,549,554
Table 4
Portfolio Value of Real Properties and Loans Receivable 1 This property was transferred on the Housing Asset Form but its value is not in the General Ledger
Murrieta Housing Successor Annual Report 2023-24 9
▪ A deferred loan issued in 2009 as part of a CFD Special Assessment Districts Payoff Program.
The outstanding amount due is $14,214 with a zero percent interest rate. • A Development Loan issued in 2023 to National Community Renaissance of California to construct 118 affordable units and one manager's unit at Oak View Ranch. The principal amount was $6.1 million with a 3% interest rate. The outstanding balance as of June 30, 2024 was $6,341,733.
PROPERTY DESCRIPTIONS AND DISPOSITION STATUS
The Agency transferred five properties to the Housing Authority, consisting of one multi-family affordable housing property and four lots of vacant land:
• Monte Vista I, 24740 Jefferson Avenue (APN 949-600-031) – Multi-family Residential • Jefferson South (APN 909-030-032 & 909-030-033) – Vacant Land Sold November 30, 2021 • 24960 Adams Ave. (APN 906-080-018) – Multi-family Residential • 42310 B Street (APNs listed below)
4– Vacant Land Sold February 18, 2022
• Vacant Lot (APN 910-140-044) – Vacant Land Sold September 2015 HSC Section 34176.1(e) requires all real properties acquired by the Agency prior to February 1, 2012 and transferred to the Housing Authority to be developed pursuant to the requirements detailed in HSC Section 33334.16. All property that falls within in these parameters must be developed for affordable housing purposes or sold within five years from the date DOF approved the Housing Asset Transfer Form, or September 5, 2017. If the Authority is unable to develop or dispose of these properties within the five-year period, the law allows for a five-year extension via adoption of a resolution.
The Housing Authority adopted a resolution for a five-year extension, September 5, 2022, due to the difficulty of initiating development on the remaining three properties consisting of vacant land (42310 B St, Jefferson South, and 24960 Adams Ave). In FY 2018-19, the Housing Authority prepared a Property Disposition Strategy to evaluate options that best maximize and leverage the remaining housing assets. 4 APNs associated with 42310 B Street: 906-193-001, 906-200-001, 906-200-002, 906-212-001, 906-221-001, and 906-221-002.
Murrieta Housing Successor Annual Report 2023-24 10
As part of the Housing Authority’s strategy implementation efforts, the Housing Authority disposed of two properties comprised of eight parcels (42310 B St and Jefferson South) in 2021-22. The Housing Authority has also entered into a Disposition and Development Agreement with a developer to ground lease 24960 Adams Ave and construct an affordable housing rental project on the parcel. Proceeds from the sale of 42310 B St and Jefferson South were contributed towards the 24960 Adams Ave development in accordance with LMIHF requirements in FY 2022-23.
Descriptions of the properties and their disposition statuses are below.
MONTE VISTA I, 24740 JEFFERSON AVENUE (APN 949-600-041) The Housing Authority owns the land under Monte Vista I, a 64-unit apartment building restricted to families earning 30 to 100% of the Area Median Income (“AMI”) (including one manager’s unit). The Authority leases the land to the owner of the apartment complex. Monte Vista I is adjacent to the affordable community known as Monte Vista II. Built to seamlessly blend, the communities share a swimming pool, on site management, free Wi-Fi, on site laundry facilities, and covered parking. Additional on-site amenities available to the tenants include garden plots, a covered tot lot, computer room, and residential services such as computer skills workshops, after school programs and more. The apartment complexes are conveniently located within walking distance to a public park, a school, public transit, and numerous other amenities. The property has a 55-year affordability covenant that expires in 2059. In 2020, the owner of Monte Vista I refinanced the permanent loan used to finance the project.
JEFFERSON SOUTH (APN 909-030-032 & 909-030-033)
This site includes two contiguous vacant parcels totaling approximately 2 acres. The Authority sold the Jefferson South site on November 30, 2021 for $1.1 million. Housing will be developed on the subject property.
42310 B STREET (APN 906-193-001)5
5 There are 5 additional APNs associated with 42310 B Street: 906-200-001, 906-200-002, 906-212-001, 906- 221-001, and 906-221-002.
Murrieta Housing Successor Annual Report 2023-24 11
This site consists of 6 parcels totaling approximately 21 acres of vacant land. The Authority sold the 42310 B Street site on February 18, 2022 for $1.7 million. Housing will be developed on the subject property.
24960 ADAMS AVE (APN 906-080-018)
This 6-acre parcel is in the western half of the City in the Historic Murrieta Specific Plan area. The former Agency purchased the site with the intention of developing affordable housing. The Authority issued a Request for Proposals (“RFP”) to develop an affordable housing rental project on 24960 Adams Ave in October 2019. The Authority entered into a DDA with a Developer on June 7, 2022 to construct the affordable housing rental project and issued a $6,142,807 loan to facilitate the development in accordance with housing successor law in FY 2022-23. Construction of the project’s first phase, consisting of 120 units, commenced in FY 2023-24 and is expected to be completed by late 2024 or early 2025. Construction of the second phase, consisting of 80 senior units, is expected to commence in 2025.
VACANT LOT (APN 910-140-044)
This 10-acre lot of vacant land was sold in September 2015 for $2.1 million to be developed for nonhousing purposes.
HOMEOWNERSHIP UNIT INVENTORY
Table 5 presents an inventory of homeownership units assisted by the Housing Authority that require restrictions, covenants, or an adopted program that protects Housing Asset Fund monies.
Murrieta Housing Successor Annual Report 2023-24 12
Project Name / Address
Unit
No.
Bedroom
Size
Year Built/
Rehab
Covenant
Expiration
Affordability
Period (Yrs)
41543 King Palm Ave 2 3 2006 1/26/51 45
41536 Blue Canyon Ave 5 3 2006 5/31/51 45
25031 Quince Hill St 2 3 2006 3/29/51 45
25039 Quince Hill St 2 3 2006 4/6/51 45
25039 Quince Hill St 5 3 2006 2051 45
41410 Juniper St 624 2 2005 8/15/51 45
41410 Juniper St 1213 2 2005 5/11/51 45
41410 Juniper St 1614 1 2005 7/13/50 45
41410 Juniper St 1623 1 2005 7/22/50 45
41410 Juniper St 1713 2 2005 3/24/51 45
41410 Juniper St 1722 2 2005 3/15/51 45
41410 Juniper St 2313 1 2005 2/6/51 45
41410 Juniper St 2423 2 2005 5/16/51 45
41410 Juniper St 2424 2 2005 6/27/51 45
41410 Juniper St 2514 2 2005 9/1/51 45
41410 Juniper St 2613 1 2005 11/9/50 45
41410 Juniper St 2614 1 2005 10/21/50 45
41410 Juniper St 2623 1 2005 10/28/52 45
41410 Juniper St 3013 2 2005 5/4/51 45
41410 Juniper St 3113 1 2005 8/31/51 45
41410 Juniper St 3114 1 2005 8/31/51 45
41410 Juniper St 3123 1 2005 8/30/51 45
41410 Juniper St 3124 1 2005 8/31/51 45
Source: AB 987 database dated 11-12-13
Amberwalk
Reserves at Madison Park
Table 5
Homeownership Unit Inventory
Murrieta Housing Successor Annual Report 2023-24 13
APPENDIX 1 - HOUSING SUCCESSOR ANNUAL REPORT
REQUIREMENTS
Housing Successor Reporting Requirements
Health and Safety Code Section 34176.1(f)
Housing Asset Fund
Revenues & Expenditures
Other Assets and Active
Projects Obligations & Proportionality
Total amount deposited in the
Housing Asset Fund for the fiscal
year
Amount of deposits funded by a
Recognized Obligation Payment
Schedule (“ROPS”)
Description of any project(s)
funded through the ROPS
Description of any outstanding
production obligations of the
former Agency that were
inherited by the Housing
Authority
Statement of balance at the
close of the fiscal year
Update on property
disposition efforts (note that
housing successors may only
hold property for up to five
years, unless it is already
developed with affordable
housing)
Compliance with proportionality
requirements (income group
targets), which must be upheld
on a five year cycle
Description of Expenditures for
the fiscal year, broken out as
follows:
• Homeless prevention and
rapid rehousing
• Administrative and
monitoring
• Housing development
expenses by income level
assisted
Other “portfolio” balances,
including:
• Statutory value of any
real property either
transferred from the
former Agency or
purchased by the
Housing Asset Fund
• Value of loans and
grants receivable
Percentage of deed-restricted
rental housing restricted to
seniors and assisted by the
former Agency, the Housing
Authority, or the City within the
past ten years compared to the
total number of units assisted by
any of those three agencies
Description of any transfers to
another housing successor for a
joint project
Inventory of homeownership
units assisted by the former
Agency or the housing
successor that are subject to
covenants or restrictions or to
an adopted program that
protects the former Agency’s
investment of monies from the
Low and Moderate Income
Housing Fund
Amount of any excess surplus,
and, if any, the plan for
eliminating it
Murrieta Housing Successor Annual Report 2023-24 14
APPENDIX 2 – HOUSING ASSET TRANSFER FORM
The Housing Asset Transfer Form is attached as a separate document.
Murrieta Housing Successor Annual Report 2023-24 15
APPENDIX 3 – HOUSING ASSET FUND EXPENDITURE
REQUIREMENTS
Housing Asset Fund Expenditure Requirements
Health and Safety Code Section 34176.1
Expense
Category Limits Allowable Uses
Administration
and
Compliance
Monitoring
$727,478
maximum for
FY 2023-24
(limit varies
each year)
Administrative activities such as:
• Professional services (consultant fees, auditor fees, etc.) • Staff salaries, benefits, and overhead for time spent on Housing Successor administration
• Compliance monitoring to ensure compliance with affordable housing and loan agreements
• Property maintenance at Housing Successor-owned
properties
Capped at $200,000 adjusted annually for inflation or 5% of the statutory value of real property owned by the housing successor and the value of loans and grants receivable from the HAT (“Portfolio”), whichever is greater.
Homeless
Prevention
and
Rapid
Rehousing
Solutions
$250,000
maximum per
fiscal year
Services for individuals and families who are homeless or would be homeless but for this assistance, including:
• Contributions toward the construction of local or regional homeless shelters
• Housing relocation and stabilization services including housing search, mediation, or outreach to property owners • Short-term or medium-term rental assistance
• Security or utility deposits
• Utility payments
• Moving cost assistance
• Credit repair
• Case management
• Other appropriate activities for homelessness prevention and rapid rehousing of persons who have become homeless.
Affordable
Housing
Development
No spending
limit, but must
comply with
income and
age targets
“Development” includes:
• New construction
• Acquisition and rehabilitation
• Substantial rehabilitation
• Acquisition of long-term affordability covenants on multifamily units
• Preservation of at-risk units whose affordable rent restrictions would otherwise expire over the next five years
Murrieta Housing Successor Annual Report 2023-24 16
Housing Asset Fund Expenditure Requirements
Health and Safety Code Section 34176.1
Expense
Category Limits Allowable Uses
Income
Targets
Every five years (currently FY 2020-2024), Housing Asset Funds must meet income targets:
• At least 30% on extremely low income rental households (up to 30% AMI or “Area Median Income”)
• No more than 20% on low income households (60-80% AMI) Moderate and above moderate income households may not be assisted (above 80% AMI).
Failure to comply with the extremely low income requirement in any five-year compliance period will result in having to ensure that 50 percent of remaining funds be spent on extremely low income rental units until in compliance.
Exceeding the expenditure limit for low households earning between 60-80% AMI in any five-year reporting period will result in not being able to expend any funds on these income
categories until in compliance.
Age Targets For the prior ten years (resets every year), a maximum of 50% of deed-restricted rental housing units assisted by the Housing Successor or its host jurisdiction may be restricted to seniors.
If a housing successor fails to comply, Housing Asset Funds may not be spent on deed-restricted rental housing restricted to seniors until in compliance.