ANNUAL REPORT
OF THE HOUSING SUCCESSOR TO THE SAN JOSÉ REDEVELOPMENT AGENCY
REGARDING THE
LOW- AND MODERATE-INCOME HOUSING ASSET FUND
FOR FISCAL YEAR 2020-21
PURSUANT TO CALIFORNIA HEALTH AND SAFETY CODE SECTION 34176.1(f)
FOR THE CITY OF SAN JOSE
This Housing Successor Annual Report (Report) regarding the Low- and Moderate-Income Housing Asset Fund (LMIHAF) has been prepared pursuant to California Health and Safety Code Section 34176.1(f) and reflects data through June 30, 2021.
This Report sets forth certain details of the housing activities of the City of San José, Housing Successor to the former Redevelopment Agency of the City of San José, during Fiscal Year 2020-21. The purpose of this Report is to provide the governing body of the Housing Successor an annual report on the housing assets and activities of the Housing Successor under Part 1.85, Division 24 of the California Health and Safety Code, in particular sections 34176 and 34176.1 (Dissolution Law).
The following Report is based upon information prepared by Housing Successor staff and information contained within the independent financial audit of the Low and Moderate Income Housing Asset Fund CITY OF SAN JOSÉ COMPREHENSIVE ANNUAL FINANCIAL AUDIT for Fiscal Year 2020-21 as prepared by Macias Gini and O’Connell LLP, which Audit is separate from this annual summary Report; further, this Report conforms with and is organized into Sections I through XIII, inclusive, pursuant to Section 34176.1(f) of the Dissolution Law, as follows:
I. Loan Repayments: This section provides the amount the City received pursuant to subparagraph (A) of paragraph (3) of subdivision (b) of Section 34191.4.
II. Amount Deposited into LMIHAF: This section provides the total amount of funds deposited into the LMIHAF during the Fiscal Year. Any amounts deposited for items listed on the Recognized Obligation Payment Schedule (ROPS) must be distinguished from the other amounts deposited.
III. Ending Balance of LMIHAF: This section provides a statement of the balance in the LMIHAF as of the close of the Fiscal Year. Any amounts deposited for items listed on the ROPS must be distinguished from the other amounts deposited.
IV. Description of Expenditures from LMIHAF: This section provides a description of the expenditures made from the LMIHAF during the Fiscal Year. The expenditures are to be categorized.
Attachment B
V. Statutory Value of Assets Owned by Housing Successor: This section provides the statutory value of real property owned by the Housing Successor, the value of loans and grants receivables, and the sum of these two amounts.
VI. Description of Transfers: This section describes transfers, if any, to another housing successor agency made in previous Fiscal Year(s), including whether the funds are unencumbered and the status of projects, if any, for which the transferred LMIHAF will be used. The sole purpose of the transfers must be for the development of transit priority projects, permanent supportive housing, housing for agricultural employees or special needs housing.
VII. Project Descriptions: This section describes any project for which the Housing Successor receives or holds property tax revenue pursuant to the ROPS and the status of that project.
VIII. Status of Compliance with Section 33334.16: This section provides a status update on compliance with Section 33334.16 for interests in real property acquired by the former Redevelopment Agency prior to February 1, 2012. For interests in real property acquired on or after February 1, 2012, it provides a status update on the project.
IX. Description of Outstanding Obligations under Section 33413: This section describes the outstanding inclusionary and replacement housing obligations, if any, under Section 33413 that remained outstanding prior to dissolution of the former Redevelopment Agency as of February 1, 2012 along with the Housing Successor’s progress in meeting those prior obligations, if any, of the former Redevelopment Agency and how the Housing Successor’s plans to meet unmet obligations, if any.
X. Income Test: This section provides the information required by Section 34176.1(a)(3)(B), or a description of expenditures by income restriction, beginning in 2019 and every five years thereafter, for a cumulative time period, beginning January 1, 2014 through the end of the latest fiscal year covered in the report, as to whether the statutory thresholds have been met.
XI. Senior Housing Test: This section provides the percentage of units of deed-restricted rental housing restricted to seniors and assisted individually or jointly by the Housing Successor, its former Redevelopment Agency, and its host jurisdiction within the previous 10 years in relation to the aggregate number of units of deed-restricted rental housing assisted individually or jointly by the Housing Successor, its former Redevelopment Agency, and its host jurisdiction within the same time period. For this Report, the 10-year reviewed period is July 1, 2011 to June 30, 2021.
XII. Excess Surplus Test: This section provides the amount of excess surplus in the LMIHAF, if any, the length of time that the Housing Successor has had excess surplus, and the Housing Successor’s plan for eliminating the excess surplus.
XIII. Homeownership Units:
An inventory of homeownership units assisted by the former Redevelopment Agency or the Housing Successor that are subject to covenants or restrictions or to an adopted program that protects the former Redevelopment Agency’s investment of moneys from the Low and Moderate Income Housing
Fund pursuant to subdivision (f) of Section 33334.3. This inventory shall include all of the following information:
(A) The number of those units.
(B) The number of the units lost to the portfolio in the last fiscal year and the reason for those losses. (C) Any funds returned to the Housing Successor as part of an adopted program that protects the former Redevelopment Agency’s investment of moneys from the Low and Moderate Income Housing Fund. (D) Whether the Housing Successor has contracted with any outside entity for the management of the units and, if so, the identity of the entity.
This Report is to be provided to the Housing Successor’s governing body by April 1, 2022. In addition, this Report and the former Redevelopment Agency’s pre-dissolution Implementation Plans are made available to the public on the City’s website at https://www.sanjoseca.gov/your- government/departments/housing/memos-reports-plans/housing-element I. LOAN REPAYMENTS
The City received a repayment of $0 of Supplemental Educational Revenue Augmentation Fund (SERAF) funds pursuant to subparagraph (A) of paragraph (3) of subdivision (b) of Section 34191.4.
II. AMOUNT DEPOSITED IN TO LMIHAF
A total of $47,369,364was deposited into the LMIHAF during the Fiscal Year which includes program income from loan repayments, SERAF repayments, and interest earnings. Of the total funds deposited into the LMIHAF, $0 (zero) dollars were held for items listed on the ROPS.
III. ENDING BALANCE OF LMIHAF
At the close of the Fiscal Year, the ending balance in the LMIHAF was $165,111,485, of which $0 (zero) dollars are held for items listed on the ROPS.
IV. DESCRIPTION OF EXPENDITURES FROM LMIHAF
The following is a description of expenditures from the LMIHAF by category:
Expenditures Amount Spent in FY
Monitoring & Administration Expenditures
$11,000,427
Homeless Prevention and Rapid Rehousing Services Expenditures
$0
Housing Development Expenditures
- Expenditures on Extremely Low-Income Units (0-30% AMI) - Expenditures on Very Low-Income Units (31-50% AMI)
- Expenditures on Low-Income Units (51-60% AMI)
- Expenditures on Unrestricted Units (Manager’s unit)
$12,400,406
$8,152,028
$9,280,198
$109,753
Expenditures Amount Spent in FY
- Expenditures on Acquisition and Predevelopment
Total Housing Development Expenditures
$0
$29,942,385
Total LMIHAF Expenditures in Fiscal Year
$40,942,812
California Health and Safety Code Section 34176.1 allows for 5% of the total $698,695,890 gross value of Housing Successor assets, or $34,934,795, to be used on monitoring and administrative expenditures.
As the Housing Successor’s expenditure for monitoring and administrative expenditures of $11.0 million is well under the allowable cap, that requirement is met.
The Housing Successor continues to make LMIHAF funding commitments from its 2018 Notice of Funding Availability, which made available $100 million for new affordable housing developments.
Eleven developments were selected for award from the 2018 NOFA applicants, and will be brought forward to City Council for funding commitments once they meet all readiness requirements. These 11 commitments total over $98 million in funding from the Housing Successor, with approximately $60 million to be funded from LMIHAF. As of February 2021, the City Council has made funding commitments to eight of these developments totaling $86 million in commitments. As this pipeline of NOFA commitments progresses, the developments close construction and draw funds, LMIHAF expenditures will increase.
V. STATUTORY VALUE OF ASSETS OWNED BY HOUSING SUCCESSOR IN LMIHAF Under the Dissolution Law and for purposes of this Report, the “statutory value of real property” means the value of properties formerly held by the former Redevelopment Agency as listed on the housing asset transfer schedule approved by the Department of Finance as listed in such schedule under Section 34176(a)(2), the value of the properties transferred to the Housing Successor pursuant to Section 34181(f), and the purchase price of property(ies) purchased by the Housing Successor. Further, the value of loans and grants receivable is included in these reported assets held in the LMIHAF.
The following provides the statutory book value of assets owned by the Housing Successor.
Assets of Housing Successor Value as of End of Fiscal Year Statutory Value of Real Property Owned by Housing Successor $70,701,308 Value of Loans and Grants Receivable $462,883,097
Cash Balance $165,111,485
Total Value of Housing Successor Assets $698,695,890
VI. DESCRIPTION OF TRANSFERS
The Housing Successor did not make any LMIHAF transfers to other Housing Successor(s) under Section 34176.1(c)(2) during the Fiscal Year.
VII. PROJECT DESCRIPTIONS
The Housing Successor does not receive or hold property tax revenue pursuant to the ROPS.
VIII. STATUS OF COMPLIANCE WITH SECTION 33334.16
With respect to interests in real property acquired by the former Redevelopment Agency prior to February 1, 2012, the time periods described in Section 33334.16 shall be deemed to have commenced on the date that the Finance Department approved the property as a housing asset in the LMIHAF; thus, as to real property acquired by the former Redevelopment Agency now held by the Housing Successor in the LMIHAF, the Housing Successor must initiate activities consistent with the development of the real property for the purpose for which it was acquired within five years of the date the DOF approved such property as a housing asset. For San José, the date of Finance’s approval was March 14, 2013.
Therefore, for all properties acquired by the former Redevelopment Agency prior to February 1, 2012, the Deadline to Initiate Development Activity was March 13, 2018.
Below is the list of properties acquired by the former Redevelopment Agency prior to February 1, 2012.
All met the statutory requirements.
PROPERTIES ACQUIRED PRIOR TO FEBRUARY 1, 2012
Address/Name
of Property
Date of
Acquisition
Deadline to
Initiate
Development
Activity
Status of Housing Successor Activity
North Fourth
Street
05/21/2010 3/13/2018 Construction on this 100-unit development started in July 2010 and completed in June 2012. The City owns
the site fee simple and has a ground lease to the
development. It is in its permanent financing phase
and units are occupied by income-eligible residents.
Japantown
Seniors
05/03/2010 3/13/2018 Construction on this 75-unit seniors’ development completed in late 2015, and it converted to its
permanent financing phase in August 2016. All
apartments are occupied by income-eligible residents.
The City holds the site fee simple and has a ground
lease to the development.
Vermont House 06/30/2009 3/13/2018 In June 2016, City staff closed a Conditional Grant for rehabilitation and a Lease of this City-owned property
to Abode Services, an owner and developer of
supportive housing. Construction was completed in
November 2018 providing 16 permanent supportive
housing units. The City holds the fee interest in the
site.
Brookwood
Terrace
03/01/2009 3/13/2018 Construction on this 84-unit family development started in March 2010 and completed in January 2012.
The City Financing Authority holds the site fee simple
and has a ground lease to the development. The
development is in its permanent financing phase and
units are occupied by income-eligible residents.
Orvieto Family 03/01/2009 3/13/2018 Construction on this 92-unit family development started in September 2010 and completed in August
2012. The City Financing Authority owns the site fee
simple and has a ground lease to the development.
The development is in its permanent financing phase
and its units are occupied by income-eligible residents.
The Haven 06/30/2008 3/13/2018 On November 27, 2018, the San José City Council approved a 15-year lease agreement with the County
of Santa Clara to transition the use of the Haven from sheltering fire and other disaster survivors to
temporarily house income-eligible homeless adults .
The existing three-unit apartment building has
continued to house 3 low-income households.
Ford &
Monterey
10/25/2006 3/13/2018 Two affordable housing developments completed construction on this site—one 20-unit development
and one 75-unit development. The City owns the site
fee simple and has a ground lease to both projects.
The projects are in their permanent financing phase
and units are occupied by income-eligible residents.
E side Evans
Lane (aka
Willow Glen
Woods)
06/30/2005 03/18/2018 See Evans Lane VTA description.
Evans VTA (aka
Willow Glen
Woods)
12/31/2002 3/13/2018 After anticipating and identifying developers for a mixed-use affordable apartment and for-sale
development after the site was purchased, the original
development plan fell through during the Great
Recession and was no longer feasible. In 2016, after a
new competitive process for development of
permanent affordable housing including units for the
homeless, the City selected nonprofit Allied Housing to develop the Evans Lane site for permanent affordable
housing. Allied Housing planned to develop a site using modular constructed units for up to 61 households,
including previously homeless households. The City
Council approved a General Plan amendment in June
2016 permitting the proposed land use for affordable
housing. In August 2016, the City Council approved
findings, a ground lease to Allied Housing, and a
conditional predevelopment grant commitment for the
affordable housing project. In early 2017, the City and Allied executed A Right of Entry Agreement and the
Predevelopment Grant Agreement needed to
complete preparation for its final land use
entitlements, which the City awarded on January 8,
2019. However, as the project design progressed, the
developer encountered several design and cost
challenges with developing the proposed modular
design. In mid-2019, the City and Allied Housing
mutually agreed to discontinue the proposed
development and proceed with a new affordable
development plan.
With the dual crisis of increased homelessness in the
region and the COVID-19 pandemic in early 2020, the
City took urgent action to develop new emergency
shelter and temporary housing opportunities to allow
the City’s unhoused residents to safely shelter in place, protecting those residents and the larger community.
In early April 2020, the San José City Council directed the City’s administration to expeditiously construct
three temporary Emergency Interim Housing (EIH)
communities modeled from earlier Bridge Housing
Communities also known as “tiny homes.” One of the
three new EIH communities is located on the City’s
Evans Lane site. Approximately 2.5 acres of the 5.5-
acre site has been developed to accommodate 49
modular sleeping units along with two common
buildings to support resident services and daily needs.
The Evans Lane property is being operated by PATH
serving 48 low-income families exiting from
homelessness. Construction was completed in Summer
2021.
Concurrent to the development of the EIH, City staff
has been moving forward with plans to develop
permanent affordable apartments. This site was
included in the Request for Proposals released in
December 2021. A developer for the site will be
identified by Summer 2022.
Playa Almaden
(aka Sycamore
Terrace)
02/16/1996 3/13/2018 The Housing Department obtained City Council approval to sell the property to the City’s Parks
Department. In May 2018, the City Council passed a
Section 34176.1 provides that Section 33334.16 does not apply to interests in real property acquired by the Housing Successor on or after February 1, 2012; however, this Report also presents a status update on the projects related to such real property acquired after that date in an effort to be transparent to the public.
resolution authorizing the sale and the property was
sold per authority under Health and Safety Code
Section 33334.16 for appraised value. Sale proceeds
were deposited into the LMIHAF fund.
PROPERTIES ACQUIRED AFTER FEBRUARY 1, 2012
Address/Name
of Property
Date of
Acquisition
Deadline to
Initiate
Development
Status of Housing Successor Activity
1749 Mount
Pleasant Road
01/26/2021
01/26/2026 The City purchased the 0.48-acre site in January 2021.
This site was included in a Request for Proposals
released by the Housing Department in December
2021 to identify a developer partner for this site.
3707 East
Williams Road
01/26/2021 01/26/2026 The City purchased the 0.47-acre site in January 2021.
This site was included in a Request for Proposals
released by the Housing Department in December
2021 to identify a developer partner for this site.
430 Park
Avenue
01/26/2021 01/26/2026 The City purchased the 0.12-acre site in January 2021.
This site will be included in an upcoming Request for
Proposals to be issued by the Housing Department to
identify a developer partner for this site.
Vista Montana
06/29/2020 6/29/2025 The City purchased the 4.2-acre site in June 2020 and entered into an Exclusive Negotiating Agreement with
Charities Housing to serve as the affordable housing
developer for the site. Initial site plans were submitted for the site in fall 2021. Charities Housing is working with Planning Department staff to address preliminary
comments.
Villas on the
Park
03/27/2017 3/27/2022 The City lent $7.7 million and entered into a ground lease on March 1, 2018, to support construction of this development of 84 affordable apartments .
Construction was completed in November 2019 and
the property is fully occupied. The City holds the fee
interest in the site.
IX. DESCRIPTION OF OUTSTANDING OBLIGATIONS PURSUANT TO SECTION 33413 Replacement Housing. No Section 33413(a) replacement housing obligations were transferred to the Housing Successor in the fiscal year.
Inclusionary/Production Housing. No Section 33413(b) inclusionary/production housing obligations were transferred to the Housing Successor in the past fiscal year.
X. INCOME TESTS
Extremely Low-income Test
Section 34176.1(a)(3)(B) requires that the Housing Successor expends at least 30% of the LMIHAF for the development of rental housing affordable to and occupied by households earning 30% or less of AMI If the Housing Successor fails to comply with the Extremely Low-Income requirement in any five-year report, then the Housing Successor must ensure that at least 50% of the funds remaining in the LMIHAF be expended in each fiscal year following the latest fiscal year (following the report on households earning 30% or less of AMI) until the Housing Successor demonstrates compliance with the Extremely Low-Income requirement.
Compliance with this test was last required in 2019. Per California Health & Safety Code Section 34176.1(a)(3)(B), compliance needs to be demonstrated every five years – next in 2024. In 2019, the City satisfied the extremely low-income test per Section 34176.1(a)(3)(B).
60-80% AMI Test
Section 34176.1(a)(3)(B) requires that the Housing Successor spend no more than 20% of the LMIHAF for the development of rental housing affordable to and occupied by households earning between 60% and 80% AMI.
226 Balbach
Street
08/26/2016 08/26/2021
On January 30, 2019, the project received its planning
permits and on September 19, 2020, was awarded
funding from TCAC and received funding commitments
from all parties. The project received its building
permit on October 31, 2020, and is under construction
of 87 income-restricted apartments. Construction is
estimated to complete in early 2023.
If the Housing Successor exceeds the expenditure limit for households earning between 60% and 80% AMI in any five-year report, the Housing Successor shall not expend any of the remaining funds for this income cohort until the Housing Successor demonstrates compliance with this limit.
Compliance with this test was last required in 2019. Per California Health & Safety Code Section 34176.1(a)(3)(C), compliance needs to be demonstrated every five years – next in 2024.
The total housing development expenditures from July 1, 2016 through June 30, 2021 were $75,018,203.21. Of the total amount, $0 was spent on households earning between 60% and 80% AMI.
This is due to a City of San José policy that restricts the initial income of households for all rental units funded with LMIHAF to no more than 60% of AMI. In addition, no housing development expenditures of LMIHAF were spent for this income cohort prior to this period. This satisfies the 60-80% AMI income test per Section 34176.1(a)(3)(C).
XI. SENIOR HOUSING TEST
The Housing Successor is to calculate the percentage of deed-restricted rental housing units restricted to seniors and assisted by the Housing Successor, the former Redevelopment Agency, and/or the City within the previous 10 years in relation to the aggregate number of units of deed-restricted rental housing assisted by the Housing Successor, the former Redevelopment Agency, and/or City within the same time period. If this percentage exceeds 50%, then the Housing Successor cannot expend future funds in the LMIHAF to assist additional senior housing units until the Housing Successor or City assists and construction has commenced on a number of restricted rental units that is equal to 50% of the total amount of deed-restricted rental units.
The following provides the Housing Successor’s Senior Housing Test for the 10-year period of July 1, 2011 to June 30, 2021.
Senior Housing Test July 1, 2011 – June 30, 2021
# of Assisted Senior Rental Units 621
# of Total Assisted Rental Units 4,461
Senior Housing Percentage in Past 10 Years 14%
Maximum Allowable Percentage 50%
Test Outcome Met
The percentage of assisted affordable rental units for seniors constituted only 14% of all assisted affordable rental units in the past 10 years. This is far under the 50% threshold test, so the test is met.
XII. EXCESS SURPLUS TEST
Excess Surplus is defined in Section 34176.1(d) as an unencumbered amount in the account that exceeds the greater of one million dollars ($1,000,000) or the aggregate amount deposited into the account during the Housing Successor’s preceding four Fiscal Years, whichever is greater.
The following provides the Excess Surplus test for the preceding four Fiscal Years (in millions):
FY 17-18 FY 18-19 FY 19-20 FY 20-21
Total deposited
in preceding 4
years (FY 17/18
– 20/21)
Beginning Balance $92.8 $121.1 $148.8 $152.7
Add: Deposits 44.3 41.0 42.4 52.0 $179.7
(Less) Expenditures (16.0) (13.3) (38.6) (39.6)
(Less)
Encumbrances
(22.5)
Unencumbered
Balance
$92.8 $121.1 $152.7 $142.6
The LMIHAF does not have an Excess Surplus. The aggregate amount deposited into the account during the four Fiscal Years is $179.7 million. The current fiscal year cash balance is $165.1 million with $22.5 million in encumbrances. The unencumbered amount of $142.6 million does not exceed the aggregate amount deposited in the preceding four fiscal years of $179.7 million; therefore, the test is met.
XIII. HOMEOWNERSHIP UNITS
The Housing Successor is to provide an inventory of homeownership units assisted by the former Redevelopment Agency or the Housing Successor that are subject to covenants or restrictions or to an adopted program that protects the former Redevelopment Agency’s investment of moneys from the Low and Moderate Income Housing Fund pursuant to subdivision (f) of Section 33334.3.
A. Number of Assisted Homeownership Units as of 6/30/21 Number of Homeownership Units 396
B. Number of Assisted Homeownership Units Lost in Fiscal Year Reason for Loss Units Lost
Loans paid off 43
Loans written off due to foreclosure or short sale 0
C. $2,928,843 in single family loan funds were returned to the Housing Successor in this fiscal year as part of an adopted program that protects the former Redevelopment Agency’s investment of moneys from the Low and Moderate Income Housing Fund.
D. The Housing Successor has contracted with an outside entity for the management of the single family homeownership loans. The name of the entity is AmeriNat Loan Servicing. 1 Attachment C
Costar Multi-family Class Definitions
Class A: In general, a class A building is an extremely desirable investment-grade property with the highest quality construction and workmanship, materials and systems, significant architectural features, the highest quality/expensive finish and trim, abundant amenities, first rate maintenance and management; usually occupied by prestigious tenants with above average rental rates and in an excellent location with exceptional accessibility.
It may have been built within the last 5-10 years, but if it is older, it has been renovated to maintain its status and provide it many amenities.
Class B: In general, a class B building offers more utilitarian space without special attractions. It will typically have ordinary architectural design and structural features, with average interior finish, systems, and floor plans, adequate systems and overall condition. It will typically not have the abundant amenities and location that a class A building will have.
Class C: In general, a class C building is a no-frills, older building that offers basic space. The property has below-average maintenance and management, a mixed or low tenant prestige, and inferior elevators and mechanical/electrical systems.
Class C: In general, a class C building is a no-frills, older building that offers basic space. The property has below-average maintenance and management, a mixed or low tenant prestige, and inferior elevators and mechanical/electrical systems.
Class F: A functionally or economically obsolete building is one that does not offer a viable alternative for space and does not "compete" with others of similar type for occupancy by businesses seeking a location for operations. These buildings will usually have externally visible physical or structural features as well as internal ones that render it undesirable to be leased and therefore not competitive with any other properties in the market. The property may even be tagged as "Condemned" by the local authorities.
2 Costar Multi-family Star Rating Definitions
RATING GROUP DEFINITION
A 5-Star building represents the luxury end of multi-family buildings defined by finishes, amenities, the overall interior/exterior design and the highest level of specifications for its style (garden, low-rise, mid-rise, or high-rise).
Architectural
Design
Exterior Materials/Façade
High-quality durable materials – natural stone, glass, well detailed and constructed metal panel, wood veneer, or
terracotta cladding; accentuating lighting.
Fenestration/Glazing/Views Large windows, abundant natural day lighting, generally available exterior views, high efficient glazing specification.
Overall Aesthetics
Representing current trends and standards in design and/or of a timeless, perhaps a historic quality. Aesthetically exceptional arrangement of forms, massing and materials. Possibly
designed by a notable or signature architect.
Structure/Systems High ceilings; modern energy-efficient, central HVAC, individually controlled systems, high- speed elevators, likely new or newly renovated.
Amenities
Unit Amenities/Design
Requires numerous high quality finishes such as hardwood floors, granite countertops, stainless steel appliances, bay window(s), crown molding, a balcony/patio and in-unit
washer/dryers. Also typically has an open floor plan and high/vaulted ceilings of 9’+
Site Amenities
Requires plentiful on-site shared facilities including a clubhouse/party room, fitness center, business center, pool, concierge, etc.
Site/Landscaping Continually maintained landscaping where applicable; exterior gathering spaces, roof terrace or courtyard.
Certifications Possibly a certified/labeled green and energy efficient building.
4-Star buildings are constructed with higher end finishes and specifications, providing desirable amenities to residents and designed/built to competitive and contemporary standards.
Architectural
Design
Exterior Materials/Façade
Durable materials, well-detailed and constructed metal panel, wood veneer or terracotta cladding; possibly exhibiting minor signs of weathering and wear.
Fenestration/Glazing/Views Large windows, great natural day lighting and views.
Overall Aesthetics Representing recent trends and standards in design and/or of a timeless, perhaps an historic quality.
Structure/Systems Likely to have some 5 Star qualities, or of a prior generation of buildings.
Amenities
Unit Amenities/Design
Includes some high quality finishes such as hardwood floors, granite countertops, stainless steel appliances, bay window(s), crown molding, a balcony/patio and in-unit washer/dryers. Also may have an open floor plan and high/vaulted ceilings.
Site Amenities Several on-site shared facilities such as a Clubhouse/Party Room, Fitness Center, Business Center, Pool, Concierge, etc.
Site/Landscaping Well maintained landscaping where applicable; likely to have exterior gathering spaces, roof terrace or courtyard.
Certifications Possibly a certified/labeled green and energy efficient building.
Architectural
Design
Exterior Materials/Façade Brick, stucco, EIFS, precast concrete, vinyl or fiber cement siding, possibly 4 Star materials with signs of age.
Fenestration/Glazing/Views Punched windows, fair mix of glazed and opaque surfaces that provide adequate natural light.
Overall Aesthetics Average with respect to background buildings, contextually appropriate.
Structure/Systems Likely smaller and older with less energy-efficient and controllable systems.
Amenities Unit Amenities/Design Average quality finishes, layout conducive to compact lifestyle 3 RATING GROUP DEFINITION
but not necessarily an open floor plan.
Site Amenities
A few on-site shared facilities and spaces such as a
Clubhouse/Party Room, Fitness Center, Business Center, Pool, Laundry Facilities, etc.
Site/Landscaping Modest landscaping and likely small or no exterior spaces.
Certifications Possibly a certified/labeled green and energy efficient building.
Architectural
Design
Exterior Materials/Façade Brick, stucco, EIFS, precast concrete, siding with noticeable aging.
Fenestration/Glazing/Views Small, seemingly inadequate windows.
Overall Aesthetics Average, functional.
Structure/Systems Purely functional.
Amenities Unit Amenities/Design Below average finishes, inefficient use of space.
Site Amenities Likely only one or no on-site shared facilities.
Site/Landscaping Minimal or no landscaping, no exterior spaces.
Certifications Unlikely a certified/labeled green and energy efficient building. Practically uncompetitive with respect to typical multi-family investors, may require significant renovation, possibly functionally obsolete.
ATTACHMENT D
Methodology for Counting Non Deed Restricted Moderate-Income Units – 2021 Housing Element Annual Report
The purpose of this analysis is to determine if market rate apartments can reasonably be categorized as moderate income for RHNA reporting purposes. Our hypothesis is that some class A rental units that pulled building permits in 2021 will be affordable to moderate-income households in approximately 2023, when they are completed and occupied. The analysis consists of the following steps:
Method A: Trending
1. Determine what rent ranges will be affordable to 110% AMI households when buildings are completed:
a. Calculate rent ranges that would be affordable to moderate-income households using current (2021) City of San Jose published rent limits for 110% of Area Median Income as the affordability standard for rent plus a reasonable utility allowance, per the California Health and Safety Code.
b. Convert rent range from household size to rents by # bedrooms, using HCD Occupancy Guidelines of one per bedroom plus one. Assign rent maximum by unit type (studio, 1BR, 2 BR etc.)
c. Based on a 2019 survey of a small number of new apartment buildings in a variety of zip codes, we determined set of utilities typically paid by tenants. Using the Santa Clara County Housing Authority current (2021) utility allowance schedule for multifamily buildings, determine the cost of the typical set of utilities for each unit size by bedroom, and deduct it from the allowable maximum rent plus utility payments for each unit size determined in step 1b, per HCD guidance, to get the maximum rent payment for each unit size.
d. Adjust these rent ranges to approximate what they would be in 2 years when these units are built and occupied by applying the average % change that HCD Income limits have experienced over the last 2 annual cycles (2019 to 2020 and 2020 to 2021).
2. Id
entify 2021 Permitted Housing Projects > = 10 units:
a. Obtain CY2021 Residential Building Permits Issued for projects with 10 or more units.
Exclude potential ownership projects and affordable projects. b. Identify Zip Codes of the projects.
3. Id
entify Zip Codes where average effective rents (by unit size) are at/below the moderate- income rent range:
a. Use Costar to identify Q4 2021 Class A average effective rents (by bedroom size) for market-rate projects in SJ, for the zip codes identified in #2 above. b. Adjust average effective market rate rents to approximate what they will be in 2 years when these units are occupied by applying the % change in average effective rent observed in each zip code over the last 2 years.
c. Identify target zip codes where adjusted average effective rents, by bedroom count, are at or below the rent ranges calculated in step 1.
4. Collect unit mix data and identify the units affordable to moderate income households:
a. Identify the # of units by bedroom size, in each of the qualifying projects in the qualifying zip codes, per 3 above.
b. Count only those units, by bedroom size, that are equal to or less than the HCD rent ranges calculated and extrapolated in step 1.
Method B: Current Rents & Incomes
Method B is similar to Method A, but without the use of any rent or income trending. Developments that would meet moderate-income rent definitions today are counted.
1. Determine rent ranges affordable to 110% AMI households:
a. Calculate ent ranges that would be affordable to moderate-income households using current (2021) City of San Jose published rent limits for 110% of Area Median Income as the affordability standard for rent plus a reasonable utility allowance, per the California Health and Safety Code.
b. Convert rent range from household size to rents by # bedrooms, using HCD Occupancy Guidelines of one per bedroom plus one. Assign rent maximum by unit type (studio, 1BR, 2 BR etc.)
c. Based on a 2019 survey of a small number of new apartment buildings in a variety of zip codes, we determined set of utilities typically paid by tenants. Using the Santa Clara County Housing Authority current (2021) utility allowance schedule for multifamily buildings, determine the cost of the typical set of utilities for each unit size by bedroom, and deduct it from the allowable maximum rent payments for each unit size determined in step 1b, per HCD guidance.
2. Id
entify 2021 Permitted Housing Projects > = 10 units:
a. Obtain CY2021 Residential Building Permits Issued for projects with 10 or more units.
Exclude potential ownership projects and affordable projects. b. Identify Zip Codes of the projects.
3. Id
entify Zip Codes where average effective rents (by unit size) are at/below the moderate- income rent range:
a. Use Costar to identify Q4 2021 Class A average effective rents (by bedroom size) for market-rate projects in SJ, for the zip codes identified in #2 above.
4. Co
llect unit mix data and identify the units affordable to moderate-income households:
a. Identify the # of units by bedroom size, in each of the qualifying projects, per 3 above. b. Count only those units, by bedroom size, that are equal to or less than the HCD rent ranges calculated and extrapolated in step 1.
Final Step: To be more conservative, select the lower number of units from Method A or Method B.
10 1
2 3
4 5
6 7
89 City Council District
City Council District
GP 2040 Growth Areas
Downtown
Employment Area
Employment Area (Former Village)
Specific Plan Area
Urban Village
CY 2021 BP Issued Unit Category
5+
2 to 4
SFA
SFD
ADU
CY2021 BP Issued: Affordable
New Residential Building Permits Issued in San José - Calendar Year 2021 Attachment E
County of Santa Clara, California State Parks, Esri, HERE, Garmin, SafeGraph, METI/NASA, USGS, Bureau of Land Management, EPA, NPS, USDA