Community Development Agency
santa-ana.org/cd
Item # 9
City of Santa Ana
20 Civic Center Plaza, Santa Ana, CA 92701
Staff Report
November 7, 2023
TOPIC: Housing Division Quarterly Report
AGENDA TITLE
Quarterly Report for Housing Division Projects and Activities for the period of July 1, 2023 to September 30, 2023
RECOMMENDED ACTION
Receive and file the Quarterly Report for Housing Division projects and activities for the period of July 1, 2023 to September 30, 2023.
GOVERNMENT CODE §84308 APPLIES: No
DISCUSSION
This report for the quarter ending on September 30, 2023 provides information for all of the affordable housing projects and activities for the City’s Housing Division. The report is divided into seven sections: Loan Activity, Loan Portfolio Management & Monitoring, Density Bonus Housing Agreements, Development Impact Fee Deferral Agreements, Rent Stabilization Program, Affordable Housing Opportunity & Creation Ordinance, and Development Projects.
Loan Activity
Applications
The Housing Division offers several different programs including down payment assistance for first-time homebuyers and rehabilitation grants for mobile homes and single-family homes. Inquiries are received from the public and applications are mailed out, received and approved for these programs on a continual basis. Table 1 shows the number of inquiries, applications sent out, received, and approved by type for the quarter and for the total fiscal year:
Table 1: Applications Sent Out, Received & Approved
Inquiries Applications
Sent Out
Applications
Received
Applications
ApprovedProgram
Q1 Total
FY Q1 Total
FY Q1 Total
FY Q1 Total
FY
Residential Rehabilitation
Grant Program 15 15 15 15 15 15 10 10
Housing Division Quarterly Report
November 7, 2023
3 8
3 6
Down Payment
Assistance Program 73 73 61 61 4 4 3 3
Loan Subordinations 0 0 0 0 0 0 0 0
The number of applications received is typically lower than the number of applications sent out in any given period due to the stringent program guidelines for eligibility regulated by the federal government, which makes it difficult for most applicants to qualify.
The City of Santa Ana’s Residential Rehabilitation Grant Program is designed to, improve and preserve affordable housing through the use of federal Community Development Block Grant (CDBG) funds. The Program is administered by Habitat for Humanity of Orange County on behalf of the City. The Program provides grants of up to $25,000 for eligible home repairs for low-income homeowners at or below 80% of the Area Median Income (AMI) as defined by the U.S. Department of Housing and Urban Development (HUD). Eligible activities include the repair, replacement, and/or installation of major systems including plumbing, heating, electrical, windows, roof, paint, and handicap accessibility. The Fiscal Year 2023-24 funding for this program was renewed by City Council on May 2, 2023 and applications are currently being accepted. As of September 30, 2023, the city has received 15 applications and 10 of those applications have been approved for a rehabilitation project.
Emergency Solutions Grant Program
The City of Santa Ana’s Emergency Solutions Grant program provides funding to engage homeless individuals and families living on the street, to improve the number and quality of emergency shelters for homeless individuals and families, provide essential services to shelter residents, rapidly rehouse homeless individuals and families, and prevent families/individuals from becoming homeless. As of July 1, 2023, the City has entered into agreements with the Santa Ana Police Department and four nonprofits to deliver the above mention services. During this first quarter, organizations have worked diligently to enroll and deliver services to our residents. Quantitative data will be submitted before October 31 and will be reported on the second quarterly report.
Down Payment Assistance Loan Program Progress
For the Down Payment Assistance Loan Program (DPAP), staff evaluates applicant eligibility and oversees underwriting to ensure compliance with program guidelines and requirements established by HUD. During this quarter, staff conducted the following outreach and education on the program:
•Staff conducted two (2) virtual workshops via Zoom together with NeighborWorks of Orange County with a total of 12 attendees. These workshops are conducted every second Tuesday of the month.
•On July 15 staff participated in the Vietnamese National Association of Real Estate Professional Southern California’s Homeownership OC event at the Salgado Community Center. Staff had the opportunity to be a panelist presenting information on the program and set up a resource table outside the Housing Division Quarterly Report
November 7, 2023
3 8
3 6
Community Center engaging, informing, and answering questions regarding the program.
•On August 19, staff participated in the Housing Authority Forum that took place in the City of Garden Grove. Staff had the opportunity to provide information to a large audience on the Housing Choice Voucher Program (Section 8) and the City’s affordable housing resources. In addition, we had a resource table providing information on all of our programs, including our Down Payment Assistance Program.
As a result of these efforts, three (3) down payment assistance loan applications were approved and three (3) closed escrow.
Loan Portfolio Management & Monitoring
The Housing Division is responsible for managing the residential loan portfolio, which includes all of the loans entered into by the City and Housing Authority acting as the Housing Successor Agency. As of the end of the first quarter, the principal balance was $150,443,210.58. This portfolio is comprised of 351 loans of which 329 are deferred or residual receipt payment loans. As shown in Table 2, the loan portfolio generated $458,929.23 in payments of principal and interest during the first quarter. The amount of residual receipts payments changes every quarter.
Table 2: Portfolio Revenue
HOME CDBG Redevelopment CalHome
Loan Payoffs $141,520.14 $0 $0 $48,000.00
Residual Receipts
Payments $122,443.00 $0 $122,443.00 0
Amortized Loan
Payments $1,184.07 $2,852.13 $20,486.89 0
Total for Q1 $265,147.21 $2,852.13 $142,929.89 $48,000.00 Monitoring
As part of the requirements for these loans, staff must monitor the owner-occupancy of single-family homes that have received loans, and the building code compliance of units in rental projects with long-term affordability covenants. During this quarter, 67 owner- occupancy recertification letters were mailed and 49 were returned and processed. This number includes letters sent from previous months. Staff also conducted a total of 105 inspections during this quarter.
Density Bonus Agreements
The California Density Bonus law allows developers proposing five or more residential units to seek increases in base density for providing on-site housing units in exchange for providing affordable units on site. To help make constructing on-site affordable units feasible, the law allows developers to seek up to three incentives/concessions and an unlimited number of waivers, which are variances from development standards that would help the project be built without significant burden and without detriment to public health. The first version of the Density Bonus Law was adopted in 1979 and has since been amended at various times. Recent revisions allow affordable housing developers Housing Division Quarterly Report
November 7, 2023
3 8
3 6
to request incentives/concessions and/or waivers for 100-percent affordable developments, even if they do not require a numerical density bonus. Moreover, in early 2017, the law was amended to restrict the ability of local jurisdictions to require studies to “justify” the density bonus and requested incentives/waivers and places the onus on local jurisdictions to prove that the incentives/concessions or waivers are not financially warranted.
As of the date of this report, the City of Santa Ana has entered into the following Density Bonus Agreements:
Date of
Agreement Housing Development Address Affordable Units
October 2018 Metro East Senior Park 2222 E. First St.
415 rental units restricted
for very low income and
low income or senior
tenants
August 2018 First Point I & II Apartments 2110, 2114 and 2020 E.
First St.
547 rental units restricted
for very low income and
low income tenants
February 2019 Legacy Square 609 North Spurgeon St.
92 rental units restricted
for very low income and
low income tenants
November 2019 The Rafferty 114 & 117 E. Fifth St.
11 rental units restricted
for very low income
tenants
December 2021 FX Residences
801, 807, 809
and 809 ½
East Santa Ana Blvd
16 permanent supportive
housing units
June 2022 WISEPlace 1411 N. Broadway 47 permanent supportive housing units
August 2022 Brandywine Acquisition
Group 1814 & 1818 E. First St.
4 townhomes restricted for
sale to moderate-income
buyers
Development Impact Fee Deferral Agreements
Development impact fees are a one-time charge to new developments imposed under the Mitigation Fee Act. These fees are charged to new developments to mitigate impacts resulting from the development activity and cannot be used to fund existing deficiencies. This means that for improvements that benefit existing as well as new development, impact fees can only pay for the portion of the improvement that benefits the new uses. Impact fees must be adopted based on findings of a reasonable relationship between the development paying the fee, the size of the fee, and the use of fee revenues. Development impact fees do not require voter approval and are commonly used by cities to address the impact of new development on schools, parks, transportation, etc.
Prior to issuance of any building permits, the City currently requires the payment of various development impact fees. However, affordable housing developers may submit a request to defer specific development impact fees for their property pursuant to California Government Code section 66007. The City and owner then execute a Housing Division Quarterly Report
November 7, 2023
3 8
3 6
Development Impact Fee Deferral Agreement to defer certain development impact fees applicable to the property and place a lien on the property to secure payment of these fees, which are due before the issuance of the certificate of occupancy or the final building check. As of the date of this report, the City has entered into the following outstanding Development Impact Fee Deferral Agreements that are pending payment:
Date of
Agreement Developer Housing Development
Address
Estimated Total Fees
Due
December 2021 Shelter Providers of
Orange County
802, 809, 809 ½ East
Santa Ana Blvd. $510,000
July 2022 Washington Santa Ana
Housing Partners
1126 &1146 E.
Washington Ave. $652,717
Rent Stabilization Program
Effective November 18, 2022, the City Council adopted an amended Rent Stabilization and Just Cause Eviction Ordinance (Ordinance) that included a number of changes.
The amended Ordinance expands the administration and enforcement of renter protections for Santa Ana residents by establishing a rental housing board and a rental registry program. The amended Ordinance also includes additional petitions for tenants and landlords, voluntary mediation services, and other enhancements.
The City has prepared user-friendly information on the Ordinance for both tenants and landlords on the City’s webpage, including the full Ordinance and answers to Frequently Asked Questions in English, Spanish and Vietnamese. Tenants and landlords are encouraged to sign up to receive the latest updates.
Program Updates:
The City of Santa Ana continues to work with RSG, Inc. on the long-term implementation of the Ordinance. This project has met many critical milestones over the course of Quarter 1 (Q1).
Staff, in partnership with 3Di, Inc. worked to implement the City’s Rental Registry to support the Ordinance. In Q1, staff conducted an extensive user acceptance testing process of the Rental Registry in coordination with the City Attorney’s Office as well as a pilot test with seven (7) landlords. On August 15, 2023, the City of Santa Ana launched the Rental Registry portal where property owners are required to register rental units, update rental unit information, update tenancy information, submit notices, and pay the City’s rental registry fee if applicable. Staff also continued to work with the Finance and Management Services Agency to ensure the City will be able to collect, allocate, process and utilize rental registry fees for the administration of the Ordinance.
Staff conducted a series of virtual workshops to assist landlords with completing the registration process in the Rental Registry. In Q1, staff conducted seven (7) informational workshops for property owners.
Housing Division Quarterly Report
November 7, 2023
3 8
3 6
In addition to the progress made towards the long-term implementation of the Rent Stabilization Program, staff has continued to serve the community in the following ways throughout Q1:
•Reviewed and made continuous improvements to the layout, content, and forms on the Renter Protections webpage for easier access and understanding. •Created a new webpage for the City’s Rental Registry, which includes helpful resources including a User Guide, FAQs, and video demonstrations. •Fielded calls and emails from the public and provided information, referrals and education to renters and property owners on the City’s Ordinance. •Provided walk-in assistance to answer questions from property owners and assist with the Rental Registry at the Santa Ana WORK Center at 801 W Civic Center Drive, Suite 200, Santa Ana, CA 92701.
•Began accepting applications for appointment of the Rental Housing Board.
Residents Served:
During this quarter, staff and RSG fielded calls from the public and provided information and education to renters and property owners on the Ordinance. A breakdown of the number of inquiries is as follows:
Staff also conducted seven (7) workshops for property owners to assist with navigating the Rental Registry:
The City regularly distributes important updates and information to Santa Ana residents.
During this quarter, staff informed the public of programmatic updates via social media, newsletters, and email distribution lists, reaching a total of 47,180 Santa Ana residents.
In previous Quarterly Reports, staff shared a data point titled "Rent Increase and Eviction Notices Received from Landlords". Now that the City's Rental Registry was launched on August 15, 2023, landlords are required to upload their documents in the Month # of Inquiries
July 2023 82
August2023 1,708
September 2023 1,837
Total 3,627
Month # of Registrants
August 22, 2023 24
August 24, 2023 47
August 31, 2023 103
September 7, 2023 64
September 14, 2023 58
September 21, 2023 59
September 28, 2023 49
Total 404
Housing Division Quarterly Report
November 7, 2023
3 8
3 6
Rental Registry. Specifically, "Any notices or documents required to be provided from a Landlord to a Tenant by this Article or any other federal, state, or local law, including, but not limited to, notice of Rent Increase and notice of eviction, shall be provided to the City through the Rental Registry portal." Staff will research how this information can continue to be shared in the future but for now, this table is no longer available.
Available Funds and Land Assets for Affordable Housing Development Projects The City of Santa Ana and the Housing Authority acting as the Housing Successor Agency manages multiple sources of local, state and federal funds to develop affordable housing. Exhibit 1 provides a summary of the funds available as of September 30, 2023.
Affordable Housing Opportunity and Creation Ordinance
On-Site Development:
Since 2011, a total of 33 units have been developed on-site as a result of the Affordable Housing Opportunity and Creation Ordinance, including 23 ownership units for-sale and 10 rental units:
Units Built On-Site
Ownership Rental Total
23 10 33
In-Lieu Fees Generated:
All in-lieu fees, penalties and other monies collected pursuant to the Ordinance, including interest, are deposited into the Inclusionary Housing Fund. Since inception, the Inclusionary Housing Fund has generated $28,443,446 to be used for the development of housing affordable to low- and moderate-income households, with a reasonable amount spent on administrative or related expenses associated with the administration of the Ordinance.
Inclusionary Housing In-lieu Fees Received per Fiscal Year FYs
2009-2017
FY
17/18
FY
18/19
FY
19/20
FY
20/21
FY
21/22
FY
22/23
$7,851,002 $2,712,304 $7,236,945 $0 $3,709,875 $6,933,320 $0 In-lieu fees generated have been used to develop new affordable homeownership and rental housing opportunities as well as provide emergency shelter. Below is a summary of how in-lieu fees have been used by the City:
Project or Program Inclusionary Housing
Funds SPENT # of Units Address
Santa Ana Arts
Collective $4,775,000 57 1666 N. Main Street
La Placita Cinco $1,300,000 50 2239 West 5th Street
Housing Division Quarterly Report
November 7, 2023
3 8
3 6
The Link Interim
Emergency Shelter $7,893,866 N/A 2320 S Redhill Avenue
Westview House $1,514,113 84 2530 and 2534
Westminster Avenue
Habitat for Humanity
“Lacy & Vance” $565,271 2 826 N. Lacy Street &
830 N. Lacy Street
WISEPlace Steps to
Independence Public
Service Program
$90,000 N/A N/A
Down Payment
Assistance Program $800,000 9 N/A
TOTAL $16,938,250 202
Project Inclusionary Housing
Funds COMMITTED # of Units Address
Habitat for Humanity
“Washington Street” $2,200,000 6 1921 W. Washington
Ave.
Down Payment
Assistance $1,250,000 N/A N/A
TOTAL $3,450,000 6
Affordable Housing Development Projects
There are six (6) affordable housing projects under construction, and two (2) affordable housing projects in pre-development. Below is a brief summary and status-update for each project. Exhibit 2 provides a development timeline for each project. The most recent RFP for Affordable Housing Development was issued on December 8, 2021 and closed on February 28, 2022. WISEPlace Permanent Supportive Housing and Habitat for Humanity of Orange County were awarded pre-commitment letters.
Projects under Construction
Estrella Springs (1108 N. Harbor) (Formerly called North Harbor Village) Developer Jamboree Housing Corporation
Description Acquisition and rehabilitation of a former motel yielding 89 units of permanent supportive housing.
City / Authority
Funds
CDBG ($1,687,047); Eight-nine (89) PBVs consisting of 34 HUD-VASH PBVs and 55 regular PBVs.
Update
Construction is currently underway. They had to update the plans and resubmit to the City for plan check. This allowed the project to finish the framing and continue with other work including insulation and drywall. Fire sprinklers were also completed. Now that everything is approved, the project will be able to move full speed ahead on other building systems. Completion is anticipated for March 2024.
Housing Division Quarterly Report
November 7, 2023
3 8
3 6
Westview House (2530 Westminster Avenue)
Developer Community Development Partners with Mercy House as the service provider Description
New construction of an affordable multifamily apartment development consisting of 84 units of both large family and PSH units and one (1) manager’s unit. Twenty-six of the units will be funded by Mainstream Program PBVs and Mental Health Services Act (MHSA) funds through the No Place Like Home (NPLH) program.
City / Authority
Funds
Inclusionary Housing ($1,514,113), HOME Investment Partnerships Program ($2,003,705), Rental Rehabilitation Program ($386,523), and twenty-six (26) Mainstream Program PBVs
Update
Exterior finishes and color on building A is complete, with building B at 95% for exterior color. The past two months Westview House staff have been working with AT&T and Spectrum-Charter to provide services to the buildings and install phone and television cabling throughout the units. They signed off on a preliminary plan from SCE in mid-September and are awaiting the final plan from SCE regarding energizing the building. They are pushing to receive it in time to implement the final work order before the Santa Ana moratorium takes place between Thanksgiving and New Year’s; however this may be pushed to January. If it is pushed out, other work is expected to be able to continue and it should not have a drastic effect on the completion date. Interior drywall is almost complete with City inspections ongoing and interior painting is expected to begin next week.
Construction is expected to be complete at the end of February 2024 or early March 2024.
Crossroads at Washington (1126, 1136 and 1146 E. Washington Avenue) Developer The Related Companies of California with A Community of Friends as co- developer and lead service provider
Description
New construction of a 100% affordable multifamily apartment complex consisting of 85 units of rental housing and one (1) manager’s unit. All units will be affordable to households earning less than 30% AMI of which 43 units will be set-aside for permanent supportive housing.
City / Authority
Funds
HOME Investment Partnerships Program (HOME) ($3,007,489), Neighborhood Stabilization Program ($1,637,420), sixty-five (65) year ground lease agreement for 1126, 1136 and 1146 E. Washington Avenue (Appraised Value as of September 22, 2019: $4,108,136) and fifteen (15) PBVs
Update
The developer is working on interiors, installing cabinets, and doors for building 1136 and installing the insulation and hanging drywall on building 1146. The developer continues to work with the Corporation for Supportive Housing, Orange County staff, and the Santa Ana Housing Authority to begin the marketing and lease up process.
Habitat for Humanity (826 N. Lacy & 830 N. Lacy Street) Developer Habitat for Humanity of Orange County (Habitat) Housing Division Quarterly Report
November 7, 2023
3 8
3 6
Description New construction of two single-family detached homes for homeownership serving households up to 120% AMI.
City / Authority
Funds
Inclusionary Housing ($565,271) and a 99-year ground lease agreement for 416 Vance Street and 826 N. Lacy Street (Appraised Value as of Oct 25, 2018: $578,000)
Update
Late July, and through August of 2023, interior finish carpentry work was started and completed, including installation of doors, cabinets, countertops and sinks. Also in July, the two-story Victorian style home was repainted to address concerns of the French Park Historic Association and community members that the initial color was too bright. The color was approved by the French Park Historic Association and the City of Santa Ana.
On September 30, Habitat held a Dedication Day and warmly welcomed the families for Lacy Street to their new homes. The event was attended by donors, volunteers, and supporters who helped make these homes affordable. The Mayor of Santa Ana Valerie Amezcua addressed the attendees, as well as Councilmember David Penaloza. Senator Tom Umberg, Orange County Supervisor Vicente Sarmiento, and Orange County Supervisor Katrina Foley were also in attendance.
Two families from the City of Santa Ana were selected as the homebuyers.
The families were income qualified as moderate-income families.
Volunteer opportunities continue to be offered Wednesday through Saturday throughout the duration of the build. During the first quarter, there were 358 unique volunteers with a total of 5,250 volunteer hours. From the beginning of the project to date, there have been 1,266 unique volunteers with a total of 22,000 hours.
WISEPlace Permanent Supportive Housing (1411 N. Broadway) Developer Jamboree Housing Corporation with WISEPlace as the co-developer and lead service provider
Description Adaptive reuse and new construction of the WISEPlace building to provide 47 permanent supportive housing units, and one (1) manager’s unit.
City / Authority
Funds HOME-American Rescue Plan ($5,256,327); Twenty-five (25) PBVs Update
The developer closed on their construction loan financing and began construction in March 2023. The Concrete footings & columns were completed in August 2023 and the slab will be poured on October 13, 2023.
The expected construction completion date is November 2024.
FX Residences (801, 809, 809 ½ East Santa Ana Boulevard) Developer HomeAid Orange County, Inc. with Mercy House as the service provider Description New construction of an affordable multifamily apartment complex consisting of 16 units of permanent supportive housing, and one (1) manager’s unit.
Authority
Funds
Housing Successor Agency ($1,656,947), three (3) PBVs, 99-year ground lease agreement for 801 E. Santa Ana Blvd. (Appraised Value as of Oct 25, 2018: $788,000)
Housing Division Quarterly Report
November 7, 2023
3 8
3 6
Update
July was the start of construction for FX Residences. The grading, trenching and preparation for foundation were completed. The developer experienced small set back due to Hurricane Hillary where it took a few days to pump out the water and dry out the ground. The foundation was poured the week of September 18th. The block wall was started the week of September 25th and will be completed by 10/6. The developer is working with OCFA and the City’s Public Work Agency on relocation of the underground water pump to ensure best access. The 2nd floor framing is going to begin the week of 10/10. The developer is working to have the site waterproofed by the end of November to avoid rain delays during the potential rainy season. Completion of the project is estimated by the 1st quarter of 2024.
Projects in Pre-Development
Habitat for Humanity (1921 W. Washington Avenue)
Developer Habitat for Humanity of Orange County
Description New construction of three (3) duplexes / six (6) homes for homeownership serving households up to 80% AMI.
City Funds Inclusionary Housing Funds ($2,200,000)
Update
In July 2023, the City’s Planning and Building Agency provided comments on the resubmittal. July through September 2023, the Habitat development team has held meetings with various points of contact with Public Works to work through responses and clarify density bonus waiver requests. The density bonus waivers are necessary for the project to comply with the request to add two additional housing units on the lot. Responses to comments will be submitted in October 2023 with request to submit CDs at- risk to mitigate further delays to the project.
Bewley Street Intergenerational Housing Project (918 N. Bewley Street) Developer Illumination Foundation
Description Rehabilitation of 2 two-story residential buildings into eleven (11) rental units for homeless transitional age youth and senior citizens.
City Funds Homeless Housing, Assistance and Prevention (HHAP) ($2,021,319); Eight (8) PBVs
Update
The first of two Sunshine Ordinance meetings were held in September with a second meeting scheduled for October. The developer has provided all the follow-up information requested by the City’s Planning and Building Agency and currently waiting on a response. The developer is also working with the City’s consultant on their NEPA environmental review.
FISCAL IMPACT
There is no fiscal impact associated with this action.
EXHIBIT(S)
1. Available Funds for Affordable Housing Development Projects
2. Project Timelines
Housing Division Quarterly Report
November 7, 2023
3 8
3 6
Submitted By: Michael L. Garcia, Executive Director of Community Development Approved By: Steven A. Mendoza, Acting City Manager