Own National City
City Council Workshop
March 18, 2025
A GRANT-FUNDED STUDY ON HOMEOWNERSHIP
& RFP FOR SIX CITY-OWNED PROPERTIES
Linnie Gavino, Senior Principal
Julie Romey, Senior Principal
Angelita Palma, Comm Diego Velasco, Principal-in-Charge unity Dev. Manager David McEachern, Community Dev. Specialist II
Agenda
RFP Overview
& Next Steps
Homeownership Program Assessment
& Discussion (10 minutes)
Site Assessments
& Discussion (10 minutes)
Introduction: Own National City Study
A Study to provide National City residents priority, homeownership opportunities, and a range of unit sizes
Background
Housing and homeownership in National City and how we got to this point.
Background
Housing in National City
• Majority of City-owned property in National City has been allocated for affordable rental housing. • Homeownership opportunities have primarily been created through First-Time Homebuyer Programs and infill development.
Focused General Plan Update – Together We Plan!
• Five-year Housing Strategic Plan (August 2021)
• 6th Cycle Housing Element (August 2021)
• Municipal Code Title 18 Zoning Updates (April 2024)
• Land Use Element Update (April 2024)
Support for Homeownership
• City Council Policy # 901 Management of Real Property Amendment (August 2023) • Homeownership Training Office located at Paradise Creek Apartments (2140 Hoover Ave.) • HUD-approved homebuyer education classes are offered in person and virtually – the next class is scheduled for April 25, 2025.
3 National City Housing Overview Owner-Occupied 6.0%
Rental-Occupied 94.0%
571 Total
Housing Units Permitted
in the Last 3 Years
4 Rental units reflected the vast majority of
units approved to be built in National City
between 2022 and 2024
National City Housing Tenure
Total Units 18,154
Owner-Occupied Households 34%
Renter-Occupied Households 66%
Background Continued
4 National City
Median Income*
*Compared with HUD AMI levels for the San
Diego County region
Household
Size
National City
Median
Income(1)
Very Low
Income
(50% of AMI)
Low Income
(80% of AMI)
Moderate
Income
(120% AMI)
1 $47,600 $53,050 $84,900 $100,400
2 $54,400 $60,600 $97,000 $114,700
3 $61,200 $68,200 $109,150 $129,050
4 $68,000 $75,750 $121,250 $143,400
5 $73,400 $81,850 $130,950 $154,850
6 $78,800 $87,900 $140,650 $166,350
7 $84,300 $93,950 $150,350 $177,800
8 $89,700 $100,000 $160,050 $189,300
(1) KMA estimate based on median income of $62,513 for an average household size of 3.2 persons. Source: Esri, Business Analyst Online.
National City’s median income
falls below 50% of the region’s
Area Median Income (AMI)
Background Continued
5 Own National City Study
Funded with $450,000 SANDAG Housing Acceleration Program (HAP) 2.0 Grant Homeownership Program
Assessment
Research best practices for affordable
homeownership programs
Site Assessments
Analysis of six (6) City-owned sites to
support homeownership opportunities
Market Assessment
Assess current market factors
affecting homeownership
Financial Feasibility Analysis
Prepare financial pro formas modeling
various homeownership prototypes on
the six (6) City-owned properties
6 Site 1: Highland & Eta St.
(“Purple Cow”)
Key Opportunities & Constraints:
+ Potential for detached single-family
residential development
+ Strong frontage along N Highland Avenue
+ ±15-foot grade difference presents
topographical challenges
+ The private street (Soltura Lane) presents
access and circulation challenges
Site & Zoning MXC-1 Zone
Lot Area (SF) 67,910
Density 48 DU/AC
# of Units 74 (allowable)
F.A.R. (Mixed-Use) 2
F.A.R. (Single-Use) 1
Height 50' & 3 Stories Max.
Height (Adjacent to
Residential Zone)
Same as adjacent
zone (within 50 feet)
Building Format
# of Stories 3 (allowable)
Construction Type Type 5 - Wood
Development Standards
Street Wall 75% Min.
Building Setbacks
Street Wall 0' Min., 15' - 1st and
2nd story Max.
Other None
Other, Adjacent to
Residential Zone
Same as the
equivalent setback in
the adjacent
residential zone
Building Stepbacks
3rd story stepback
(from 2nd story street
wall)
8' Min., No Max.
3rd story stepback
(from 2nd story walls
adjacent to RS zone)
15' Min., No Max.
Site 1: Highland & Eta Site Assessments
7 Key Opportunities & Constraints:
+ Proximity to public transit and freeway access
+ ±10-foot grade difference from the street
presents topographical challenges
+ Site access from this street would be
challenging
+ Front and rear setbacks restrict development on
small lot
+ Division St and the freeway cause high noise
levels and fast-moving traffic
+ Access to utilities severely constrained due to
limited frontage and potential obstructions
+ Single family and Duplex (approx. 3 units)
Site 2: Division St. & R Ave
(“Division St”)
Site & Zoning RS-2 Zone
Lot Area (SF) 6,400
Density 1 DU/Lot
# of Units 1
Lot Coverage 75%
Height 35'
Building Format
# of Stories 2 (allowable)
Construction Type Type 5 - Wood
Development Standards
Minimum Setbacks
(Primary Structure)
Front 20'
Side-Interior 5'
Side-Exterior 10'
Rear 25'
Minimum Setbacks
(Accessory
Structure)
Front 20'
Side-Interior 5'
Side-Corner 5'
Rear 5'
Detatched Building
Separation
5'
# of Detatched
Buildings
3 per full 5,000 SF of lot
area
Maximum Area Total
for Accessory
10% of lot size
Minimum Usable Open
Space
N/A
Site 2: Division Street & R Ave
8 Key Opportunities & Constraints:
+ Easy driveway access
+ Potential views to the bay
+ Ground floor activation potential
+ Corner lot
+ Walkable neighborhood
+ Small lot area (50’ parcel width)
+ Heavy adjacent auto/industrial use
+ Approx. 2’ of fill across the site, may require
re-compaction or export of soil
Site 3: Roosevelt Ave &
W 11th Street
(“Roosevelt Lot”)
Site & Zoning DSPD-6 Zone
Lot Area (SF) 4,791
Density 75 DU/AC Max.
# of Units 35 Max., 17 Min.
F.A.R. 6:1 Max., 3:1 Min.
Height 250' (allowed)
Height (Adjacent to
Residential Zone
Same as adjacent zone
(within 50 feet)
Building Format
# of Stories 6 Max., 3 Min.
Construction Type Type 5 - Wood
Development Standards
Street Wall 75% Min.
Building Setbacks
Street 0' Min., 10' - 1st and 2nd
story Max.
Other None
Other, Adjacent to
Residential Zone
Same as equivalent
setback in the adjacent
residential zone
Building Stepbacks
5th story stepback
from 4th story street
ll
8' Min., No Max.
3rd, 4th, and 5th story
stepback from 2nd
story walls adjacent to
RS Zone
15' Min., No Max.
Site 3: Roosevelt Ave & W 11th St
9 Key Opportunities & Constraints:
+ Positive street frontage on A Ave
+ Mostly graded site
+ Historical character & preservation
+ Walkable neighborhood
+ Small lot area (50’ parcel width)
+ Potential access issues due to limited
frontage
+ High noise levels
+ Integrating new row-homes with existing
architectural style and scale may pose
design challenges
Site 4: A Avenue & E 11th St
(“A Avenue Property”)
Site & Zoning DSPD-5A Zone
Lot Area (SF) 3,911
Density 75 DU/AC Max.
# of Units 38 Max. (allowed)
F.A.R. 3:1 Max.
Height 50' (allowed)
Height (Adjacent to
Residential Zone
Same as adjacent zone
(within 50 feet)
Building Format
# of Stories 5 Max.
Construction Type Type 5 - Wood
Development Standards
Street Wall 75% Min.
Building Setbacks
Street 0' Min., 10' - 1st and 2nd
story Max.
Other None
Other, Adjacent to
Residential Zone
Same as equivalent
setback in the adjacent
residential zone
Building Stepbacks
5th story stepback
from 4th story street
wall
8' Min., No Max.
3rd, 4th, and 5th story
stepback from 2nd
story walls adjacent to
RS Zone
15' Min., No Max.
Site 4: E Plaza Blvd & A Avenue
10 Key Opportunities & Constraints:
+ Proximity to Central Elementary School
+ Proximity to public transit
+ Reduced car reliance
+ Corner lot with positive frontage
+ ±15-foot grade difference presents topographical
challenges
+ Potential access issues
+ Urban-scale and mixed-use requirements may
increase project complexity and costs
+ E Plaza Blvd experiences high noise levels and
fast-moving traffic
Site 5: E Plaza Blvd & E Ave
(“Lambs’ Theater”)
Site & Zoning MXD-2 Zone
Lot Area (SF) 16,990
Density 75 DU/AC Max.
# of Units 29 Max. (allowed)
F.A.R. (Mixed-Use) 3.5 Max.
F.A.R. (Single-Use) 2.5 Max.
Height 65' (allowed)
Height (Adjacent to
Residential Zone
Same as adjacent
zone (within 50 feet)
Building Format
# of Stories 5 Max.
Construction Type Type 5 - Wood
Development Standards
Street Wall 75% Min.
Building Setbacks
Street 0' Min., 10' - 1st and
2nd story Max.
Other None
Other, Adjacent to
Residential Zone
Same as equivalent
setback in the
adjacent residential
zone
Building Stepbacks
5th story stepback
from 4th story street
wall
8' Min., No Max.
3rd, 4th, and 5th
story stepback from
2nd story walls
adjacent to RS Zone
15' Min., No Max.
Site 5: E Plaza Blvd & E Ave
11 Key Opportunities & Constraints:
+ Near Sweetwater Heights Park
+ Potential views
+ ±50-foot grade difference presents
topographical challenges
+ Significant access/circulation constraints due
to high-speed and high-volume traffic coming
from SR-54 offramp on Plaza Bonita Center
Way
+ Potential fire access challenges
Site 6: Plaza Bonita
Center-Way (“Plaza Bonita”)
Site & Zoning RS-2 Zone
Lot Area (SF) 144,490
Density 9 DU/AC
# of Units 29
Lot Coverage 75%
Height 35'
Building Format
# of Stories 2 (allowable)
Construction Type Type 5 - Wood
Development Standards
Minimum Setbacks
(Primary Structure)
Front 20'
Side-Interior 5'
Side-Exterior 10'
Rear 25'
Minimum Setbacks
(Accessory
Structure)
Front 20'
Side-Interior 5'
Side-Corner 5'
Rear 5'
Detatched Building
Separation
5'
# of Detatched
Buildings
3 per full 5,000 SF of lot
area
Maximum Area Total
for Accessory
Structures
10% of lot size
Minimum Usable
Open Space
N/A
Site 6: Plaza Bonita Center-Way
12 Discussion
13 10 minutes
13 Homeownership Program Assessment
Researched Shared Equity Ownership Models
Casa Familiar CLT Case Study (Rental to Ownership Conversion) Conducted 16 Stakeholder Interviews
Researched Construction Defect Litigation (CDL) issue
• Deed Restrictions (DR)
• Community Land Trusts (CLT)
• Limited Equity Housing Cooperatives (LEHC)
14 Shared Equity Ownership Models
Involve entities or properties in which residents and community members lead in both governance and ownership
Self-sustaining models that require a one-time public investment Resident and community benefits
There are still initial financial feasibility gaps associated with developing affordable ownership units.
• Long-term affordability
• Subsidy retention
• Improved stability
• Community control
15 Limited Equity Models
Deed Restrictions Community Land Trusts (CLT) Limited Equity Housing Cooperatives (LEHC)
How it Works
Legal covenants placed on
property that limits how
property can be used for a
period of time
Nonprofit acquires land and leases
it to homeowners through low-cost,
long-term ground leases
A group of residents collectively
own a building. Each household
owns a share representing their
unit
Land Ownership Homeowner owns the land
outright
Nonprofit owns land and ground
leases it to homeowners
Residents collectively own land
Resident Control Direct control except for
restrictions in the deed
restrictions
Least amount of control through
Tripartite Board structure
Direct control through
membership in Co-op
Resale
Restrictions Restricted equity for a set
period of time
Restricted equity into perpetuity * Restricted equity into perpetuity* * Unless the CLT/LEHC entity is dissolved.
16 Deed Restrictions
Local Jurisdiction Benefiting From Restrictions
Responsibilities
• Qualifies New Buyers
• Sets Sales Prices
• Refinancing Approvals/ Subordinations
• Improvement Approvals
• Monitors Primary Residence Status
CLTs
CLT Board of Directors or Outside Management
Responsibilities
• Support Homeowners
• Maintain Affordability
• Oversight of sales and transfers with a
vested interest in the property
LEHCs
Resident Elected Board of Directors/Outside Management
Responsibilities
• Board enforces restrictions
• Offers technical assistance
• Empowers residents to become effective stewards
Stewardship
An entity shares responsibility as a
steward and representative of the
broader community’s interest.
Stewardship
DR
CLT LEHC
Limited Equity Models Continued
Ongoing Stewardship is Key to the Sustainability
17 2042
End of TCAC compliance period. The
condominiumized units can be sold to residents at
low-income sales prices.
2025
Construction on the 103-unit Project to commence.
2027
Project to be completed and 15 year TCAC
compliance period to commence
2025
Casa previously purchased the Site and will
donate it to the CLT. CLT will ground lease Site to
Project for 99 years.
2024
Project received Affordable Housing and
Sustainable Communities (AHSC) & California Tax
Credit Allocation Committee (CTCAC)
Rental to Ownership Conversion
Case Study: Avanzando San Ysidro Development
Casa Familiar is the developer and has established the Avanzando San Ysidro Community Land Trust (CLT)
The project will have a condo map and individual meters but will initially be run as an apartment project for 15 years for Tax Credit purposes. The board for the Community Land Trust (CLT) has already been established:
(3) Residents from San Ysidro Zip Code
(3) CLT Residents (Employees from Casa Familiar during the interim period) (3) Casa Familiar Board Seats
18 19
Condominium projects
usually are larger projects
than other residential
developments, making it
easier for plaintiff’s attorneys
to track, canvass, and
organize for class action
lawsuits.
The construction types
usually utilized by
condominiums typically have
more expensive issues.
A number of studies have found
that CA’s Construction Defect
Liability environment results in
higher insurance costs and
reduced condominium
development rates.
However, Developers note that
Construction Defect Liability is
not the only reason condos are
not being developed:
Typical construction type is more
expensive
Insurance in general is more
expensive
Projects cannot be phased
High capital costs
CD litigation costs are an
increasing concern, as they
are doing more townhomes/
attached product types.
Insurance for Years 1-2,
then in-house repairs
after Year 2.
Larger/denser projects
draw more attention
from plaintiff’s attorneys
hoping to file a class
action lawsuit.
The Olson Company
stopped developing
condominiums because of
construction defect issues.
Self-insurance is
becoming more common,
as insurers will not often
cover substantive repairs.
Insurance rates seem to
be rising at a faster rate
now than before.
Stakeholder Interview Feedback
Construction Defect Litigation
Reasons Why
Condominiums Attract
More CD Litigation
Findings From Studies
Construction Defect (“CD”) 19
Discussion
20 10 minutes
20 Request for Proposals: March 19-June 6
• Six (6) City-owned sites for affordable to market rate homeownership opportunities.
• Proposals can be for all six (6) sites or individual sites • KMA will assist City staff in evaluating proposals
• The RFP will be available for download on PlanetBids. • All updates, addenda, questions, answers, and changes to the RFP will be distributed through the PlanetBids portal.
Own National City
21 Where to find the Own National City RFP
1. National City Website: www.nationalcityca.gov/business/contract-consulting-bid-opportunities/
2. PlanetBids: https://vendors.planetbids.com/portal/24103/portal-home 22 Own National City
Workshop
March 18 March 19-
June 6
Request for Proposals Released
Presentation on Own
National City and Information
on the RFP Process
RFP Released on PlanetBids for
Six (6) City-owned properties
Evaluation of RFP
Proposals
Kyser Marston & Associates will review
the the development proposals received,
financial pro formas, developers
experience, etc. and will estimate the
overall feasibility, reasonableness,
financial transaction, etc.
RFP Findings &
Technical Analysis
Based on the evaluation of the developer
proposals and detailed financial
analyses, interviews with some or all of
the developers will be conducted.
Publication of
Homeownership Study
Homeownership Study “Own
National City” will be published
for public review.
RFP Presentation
Own National City RFP
Recommendations to City Council
60-days 36-days October 7 October 7
Next Steps
23 Stay up-to-date with the homeownership study
& RFP process on the
Own National City Project Webpage:
www.nationalcityca.gov/ownnatcity
Fun Fact: The background picture is a six-unit homeownership development by Habitat for Humanity in partnership with the City of National City (2022) 24 • The analysis contained in this document is based, in part, on data from secondary sources such as state and local government, planning agencies, real estate brokers, and other third parties. While KMA believes that these sources are reliable, we cannot guarantee their accuracy. • The analysis assumes that neither the local nor national economy will experience a major recession. If an unforeseen change occurs in the economy, the conclusions contained herein may no longer be valid.
• The findings are based on economic rather than political considerations. Therefore, they should be construed neither as a representation nor opinion that government approvals for development can be secured.
• Development opportunities are assumed to be achievable during the specified time frame. A change in development schedule requires that the conclusions contained herein be reviewed for validity. • The analysis, opinions, recommendations and conclusions of this document are KMA's informed judgment based on market and economic conditions as of the date of this report. Due to the volatility of market conditions and complex dynamics influencing the economic conditions of the building and development industry, conclusions and recommended actions contained herein should not be relied upon as sole input for final business decisions regarding current and future development and planning. • Any estimates of development costs, capitalization rates, income and/or expense projections are based on the best available project-specific data as well as the experiences of similar projects. They are not intended to be projections of the future for the specific project. No warranty or representation is made that any of the estimates or projections will actually materialize. • KMA is not advising or recommending any action be taken by City with respect to any prospective, new, or existing municipal financial products or issuance of municipal securities (including with respect to the structure, timing, terms, and other similar matters concerning such financial products or issues). • KMA is not acting as a Municipal Advisor to the City and does not assume any fiduciary duty hereunder, including, without limitation, a fiduciary duty to the City pursuant to Section 15B of the Exchange Act with respect to the services provided hereunder and any information and material contained in KMA’s work product. • The City shall discuss any such information and material contained in KMA’s work product with any and all internal and/or external advisors and experts, including its own Municipal Advisors, that it deems appropriate before acting on the information and material.
KMA Team Limiting Conditions
25