Cities Index.
Exhibit 1

Santa Ana City Council
May 7, 2024

Document
Exhibit 1
Meeting
May 7, 2024
Body
Santa Ana City Council
Pages
14
Original file
1.0 MB
Text extracted from the city's file for reading and search. Open the original on santa-ana.primegov.com. That file is the official record.

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City of Santa Ana – Quarterly Report
Third Quarter of FY 2023-24
JANUARY – MARCH 2024
Housing Division Quarterly Report
Each quarter, the City of Santa Ana (City) provides a detailed summary of the different projects and activities undertaken the previous quarter. This Housing Division Quarterly Report (Quarterly Report) for the quarter ending on March 31, 2024 (Q3), 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 Agreements
• Development Impact Fee Deferral Agreements
• Rent Stabilization and Just Cause Eviction Ordinance
• Affordable Housing Opportunity & Creation Ordinance
• Affordable Housing 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 publ ic 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 2023-24 fiscal year (FY 2023-24):

Table 1: Applications Sent Out, Received, & Approved
Program
Inquiries Applications
Sent Out
Applications
Received
Applications
Approved
Q3 Total
FY Q3 Total
FY Q3 Total
FY Q3 Total
FY
Residential Rehabilitation
Grant Program 0 21 0 21 0 15 0 10
Down Payment
Assistance Program 110 213 25 122 5 9 4 11
As illustrated in Table 1, the number of applications received typically falls below the number sent out during any given period. This is primarily due to the stringent program EXHIBIT 1

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City of Santa Ana – Quarterly Report
Third Quarter of FY 2023-24
JANUARY – MARCH 2024
guidelines mandated by the federal government for eligibility , as well as a shortage of properties for sale at affordable prices. As a result, many applicants find it challenging to meet the qualifications.

Residential Rehabilitation Grant Program
The City’s Residential Rehabilitation Grant Program (Residential Rehabilitation Program) is designed to improve and preserve affordable housing through the use of federal Community Development Block Grant (CDBG) funds. The Residential Rehabilitation Program is administered by Habitat for Humanity of Orange County (Habitat for Humanity) on behalf of the City. The Residential Rehabilitation 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 program's funding for FY 2023-24 was reauthorized by the City Council on May 2, 2023. Unfortunately, the City currently lacks available funds to process further applications. As depicted in Table 1, there have been no inquiries or applications sent, received, or approved. As of March 31, 2024, the City has received a total of 15 applications, with 10 granted approval for rehabilitation projects, and 1 project has been completed.

Down Payment Assistance Program
The City evaluates applicant eligibility and oversees the underwriting process for its Down Payment Assistance Program (DPAP), ensuring compliance with program guidelines and requirements. Throughout this quarter, staff conducted various outreach and educational activities on the program, including:
• Participated in NeighborWorks Orange County ’s (NeighborWorks OC) “Homebuyer 101 + City DPA ” monthly meeting on January 9, February 13, and March 12, 2024. These 1.5-hour sessions, held from 5:45 PM to 7:00 PM, provided essential guidance for entry-level homebuyers, covering topics such as budgeting, credit, lending, and other homeownership-related matters. • Involved in NeighborWorks OC's 8-hour, HUD-approved, “Homebuyer Education” courses on January 20, February 10, and March 9, 2024.

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City of Santa Ana – Quarterly Report
Third Quarter of FY 2023-24
JANUARY – MARCH 2024
• Hosted three workshops at the Salgado Community Center on February 2, Delhi Center on February 25, and Lawn Bowling Center on March 27, 2024. • Presented information on the program at the Salvador Community Center on January 25, at the invitation of Mayor Amezcua.
• Participated in the “Tet Festival” on Centennial Park on February 3 and the Shalom Center's “First Time Home Buying Fair ” in the City of Anaheim on February 17, extending our outreach efforts to diverse community events.

As a result of these efforts, four (4) down payment assistance loan applications were approved and four (4) closed escrow . Staff also received five (5) “My First Home” applications towards the end of March 2024, which will close escrow by the end of Q4, if approved.

Emergency Solutions Grant Program
The City’s Emergency Solutions Grant program assists individuals and families experiencing homelessness by enhancing emergency shelters , providing essential services, and administering rapid rehousing to prevent homelessness. As of July 1, 2023, the City entered into agreements with the Santa Ana Police Department and four nonprofits to administer these services. Throughout this second quarter, these organizations have been actively engaged in enrolling and delivering vital services to our residents. Table 2 provides quantitative data for Q3:

Table 2: Emergency Solutions Grant Program
Organization Name Estimated # in
Scope of Work
Clients Served
(Jan-March 2024)
SAPD Heart 50* 7
WISEPlace 1 3
Illumination Foundation RRH 3 3
Illumination Foundation HPP 1 0
2-1-1/United Way ** 11
Interval House 37 37
* Number reported is according to the original agreement. However, as a result of increased funding, this number is likely to be higher. ** Number is unavailable on the original agreement and has not been reported by 2-1-1.

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City of Santa Ana – Quarterly Report
Third Quarter of FY 2023-24
JANUARY – MARCH 2024
Loan Portfolio Management & Monitoring
Portfolio Management
The Housing Division oversees the management of the residential loan portfolio, encompassing all loans provided by the City and the Santa Ana Housing Authority (Housing Authority), acting as the Housing Successor Agency. As of the end of this quarter, the principal balance is $149,661,396. This portfolio is comprised of 343 loans, of which 322 are deferred or residual receipt payment loans. Table 3 illustrates that the loan portfolio yielded $211,910.06 in principal and interest payments during the third quarter. The amount of revenue fluctuates each quarter.

Table 3: Portfolio Revenue
HOME CDBG Redevelopment CalHome
Loan Payoffs $136,123.78 $0 $50,625.29 $0
Residual Receipts
Payments $0 $0 $0 $0
Amortized Loan
Payments $1,158.32 $2,673.84 $21,328.83 $0
Total for Q3 $137,282.10 $2,673.84 $71,954.12 $0
Compliance 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, 30 owner- occupancy recertification letters were mailed and 1 6 were returned and processed. This number includes lett ers sent from previous months. Staff also conducted a total of 242 inspections during this quarter.

Density Bonus Agreements
Under the California Density Bonus law, developers proposing five or more residential units can seek incentives or concessions in exchange for providing on- site affordable units. To facilitate the feasibility of constructing these on- site affordable units, the law permits developers to request up to three incentives/concessions and an unlimited number of waivers. These waivers entail variances from development standards aimed at ensuring project feasibility without imposing an undue burden or compromising public health. As shown in Table 4, the City of Santa Ana has entered into the following Density Bonus Agreements as of the end of this quarter:

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City of Santa Ana – Quarterly Report
Third Quarter of FY 2023-24
JANUARY – MARCH 2024
Table 4: 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 N. 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
E. 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
October 2023 Unison Real Estate
Group 1212 E. 4th St. 1 rental unit for very low-
income
November 2023 P & P Bros 322 N. Harbor Blvd. 2 rental units for very low- income
Development Impact Fee Deferral Agreements
Development impact fees, mandated by the Mitigation Fee Act, are one- time charges levied on new developments to offset the impacts they generate, in compliance with California law. These fees are not intended to address pre-existing deficiencies but rather to mitigate the effects of development activities. They can only finance improvements benefiting new developments, with fees allocated based on a reasonable correlation between the development, fee size, and revenue use. Unlike taxes, development impact fees do not require voter approval and are commonly utilized by cities to address the impacts of new developments on infrastructure like schools, parks, and transportation.

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City of Santa Ana – Quarterly Report
Third Quarter of FY 2023-24
JANUARY – MARCH 2024
Before issuing building permits, the City currently mandates the payment of various development impact fees. However, affordable housing developers have the option to request deferral of specific fees under California Government Code section 66007. Upon approval by City Council, the City and property owner enter into a Development Impact Fee Deferral Agreement, deferring applicable fees and placing a lien on the property to secure payment. These deferred fees must be paid before the issuance of a certificate of occupancy or final building inspection. As shown in Table 5, the City has entered into the following outstanding Development Impact Fee Deferral Agreements awaiting payment as of the reporting date:

Table 5: Development Impact Fee Deferral Agreements
Date of Agreement Developer Housing Development
Address
Estimated Total Fees
Due
December 2021 Shelter Providers of
Orange County
801, 807, 809 and 809
½ E. Santa Ana Blvd. $510,000
July 2022 Washington Santa Ana
Housing Partners
1126 &1146 E.

Washington Ave. $652,717
Rent Stabilization and Just Cause Eviction Ordinance
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. The amended Ordinance also includes additional petitions for tenants and landlords, voluntary mediation services, and other enhancements.

To ensure accessibility, the City has provided user -friendly information about the Rent Stabilization Ordinance on its webpage, including the full text of the Ordinance and Frequently Asked Questions in English, Spanish, and Vietnamese. Both tenants and landlords are encouraged to sign up for updates.

Program Updates
The Ordinance ensures the enforcement of renter protections in Santa Ana by establishing a Rental Housing Board. In Q3, the Rental Housing Board welcomed a new member representing Ward 5, marking the second addition to the Rental Housing Board.

Applications remain open until seven board members are approved by the City Council.

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City of Santa Ana – Quarterly Report
Third Quarter of FY 2023-24
JANUARY – MARCH 2024
Throughout Q3, significant milestones were achieved in the Rent Stabilization Program.

The Rent Stabilization Division hired two Housing Programs Analysts to bolster program operations and serve the community. Furthermore, collaboration with RSG, Inc. (RSG) continues for the long-term implementation of the Ordinance, alongside efforts to recruit additional staff and build a team to serve the community.

Under the Ordinance, landlords are required to register their rental units with the City’s Rental Registry and pay rental registry fees, with the payment deadline set for February 29, 2024. Staff provided comprehensive support to landlords throughout the registration process, offering assistance both in- person and over the phone. Property owners were also given the opportunity to file property exemptions under Section 8- 3147 of the Ordinance, with staff processing 654 exemptions before March 30, 2024. Additionally, staff reviewed and addressed 18 petitions received from tenants and landlords during this quarter.

Staff conducted a series of virtual workshops to assist landlords with completing the registration process in the Rental Registry. In Q3, staff conducted the last workshop of the series by providing one informational workshop for property owners.

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 during Q3:
• Reviewed and revised the rental registry portal by improving features for ease of use.
• Reviewed and made continuous improvements to the layout, content, and forms on the Renter Protections webpage for easier access and understanding. • 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 Dr., Suite 200, Santa Ana, CA 92701.
• Welcomed two new board members to serve on the Rental Housing Board, bolstering its composition.

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City of Santa Ana – Quarterly Report
Third Quarter of FY 2023-24
JANUARY – MARCH 2024
Residents Served
Throughout this quarter, staff and RSG engaged with the public by fielding calls and offering information and education to both renters and property owners regarding the Ordinance. Table 6 presents a breakdown of the number of inquiries as follows:

Table 6: Resident Inquiries
Month # of Inquiries
January 2024 681
February 2024 541
March 2024 350
Total 1,572
Throughout this quarter, staff also disseminated updates and information to Santa Ana residents. Staff utilized various channels including social media, newsletters, and email distribution lists to inform the public about programmatic updates, reaching a total of 38,238 Santa Ana residents.

Affordable Funds and Land Assets for Affordable Housing Development Projects
The City, along with the Housing Authority serving as the Housing Successor Agency, manages multiple sources of local, state, and federal funds to develop affordable housing.

Exhibit 2 provides a summary of the funds available as of March 31, 2024.

Affordable Housing Opportunity and Creation Ordinance
On-Site Development
Since 2011, the Affordable Housing Opportunity and Creation Ordinance (Ordinance) has facilitated the development of a total of 34 on- site units, consisting of 24 units available for ownership and 10 units designated for rental purposes. During this quarter , one (1) family successfully closed escrow on the purchase of an inclusionary unit at Park Place:

Table 7: Units Built On-Site
Ownership Rental Total
24 10 34
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City of Santa Ana – Quarterly Report
Third Quarter of FY 2023-24
JANUARY – MARCH 2024
In-Lieu Fees Generated
All in -lieu fees, penalties, and other funds collected under the Ordinance, along with accrued interest, are deposited into the Inclusionary Housing Fund. Since its inception, the Inclusionary Housing Fund has generated $29,277,446, to be used for the development of housing affordable to low - and moderate- income households.

Additionally, a reasonable portion of these funds is allocated to cover administrative or related expenses associated with the administration of the Ordinance. Table 8 shows the in-lieu fees received per fiscal year since the Ordinance’s inception:

Table 8: In-Lieu Fees Received per Fiscal Year
FYs
2009-2018
FY
18/19
FY
19/20
FY
20/21
FY
21/22
FY
22/23
FY
23/24
$10,563,306 $7,236,945 $0 $3,709,875 $6,933,320 $0 *$834,000 * Number reported represents the total fees received and not the current fund balance.

The in-lieu fees generated have been used to create new affordable homeownership and rental housing opportunities, as well as to establish emergency shelter facilities. Table 9 and Table 10 below provides a summary of how in-lieu fees have been used by the City, separated between expenditures and commitments:

Table 9: Inclusionary Housing Fund Expenditures
Project or Program Inclusionary Housing
Funds Expended # of Units Address
Santa Ana Arts
Collective $4,775,000 57 1666 N. Main St.

La Placita Cinco $1,300,000 50 2239 W. 5th St.

The Link Interim
Emergency Shelter $7,893,866 N/A 2320 S Redhill Ave.

Archways Santa Ana
(formerly called
Westview House)
$1,514,113 84 2530 and 2534
Westminster Ave.

Habitat for Humanity
“Lacy & Vance” $565,271 2 826 N. Lacy St. & 830
N. Lacy St.

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City of Santa Ana – Quarterly Report
Third Quarter of FY 2023-24
JANUARY – MARCH 2024
WISEPlace Steps to
Independence Public
Service Program
$90,000 N/A N/A
Down Payment
Assistance Program $1,400,000 15 N/A
TOTAL $17,538,250 208
Table 10: Inclusionary Housing Fund Commitments
Project Inclusionary Housing
Funds Committed # of Units Address
Habitat for Humanity
“Washington Street” $2,200,000 6 1921 W. Washington
Ave.

Down Payment
Assistance Program $1,377,021 N/A N/A
TOTAL $3,577,021 6
Affordable Housing Development Projects
Currently, there are six (6) affordable housing projects under construction, and two (2) affordable projects in pre-development. Below is a concise overview and status update for each project. Exhibit 3 provides a development timeline for each project . The most recent Request for Proposals (RFP) for Affordable Homeownership Opportunities was issued on October 19, 2023. Initially, the review deadline was set for December 15, 2023, but the deadline was extended to May 1, 2024 following City Council approval.

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 s
upportive housing.

City / Authority
Funds
CDBG ($1,687,047); Eight-ni ne (89) Project-Based Vouchers (PBVs) consisting of 34 HUD-VASH PBVs and 55 regular PBVs.

Update
During this quarter, construction activities included insulation, drywall, paint cabinets completion and appliances and fixtures installation in Building C. Building A drywall and insulation completed with cabinets, appliances, and fixtures started. Landscape installation started. Electrical trim is underway in units. Flatwork is nearing EXHIBIT 1

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completion. Stucco work and mural are completed. All plans are approved by City.

Completion is anticipated for April 2024 for Building C followed by Building A and then Building B with Temporary Certificates of Occupancy (TCO) requested in phases in April/May and COO by June/July 2024.

Archways Santa Ana (2530 Westminster Ave.) (Formerly called Westview House) Developer Community Development Partners with Mercy House as the service provider Description
New construction of an affordable multifamily apartment development consisting of 84 u
nits 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
Southern California Edison’s (SCE) i nitial power design for the building contained errors, requiring a redesign. This process lasted eight (8) weeks and delayed SCE's ability to energize the building, consequently pushing the expected Temporary Certificate of Occupancy (TCO) to July. The development team is actively pressuring SCE to expedite the power provision process, as construction of both the buildings and site will be completed by the end of April, pending power availability.

Although there is optimism regarding an earlier TCO, this will only be confirmed once SCE initiates their work in the coming weeks. Despite the delays, lease-up and marketing activities were initially halted but have since resumed.

Crossroads at Washington (1126, 1136 and 1146 E. Washington Ave.) Developer The Related Companies of California with A Community of Friends as co-de veloper and lead service provider
Description
New construction of a 100% affordable multifamily apartment complex consisting of 85 u
nits 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 S
tabilization Program ($1,637,420), sixty-five (65) year ground lease agreement for 1126, 1136 and 1146 E. Washington Ave. (Appraised Value as of September 22, 2019: $4,108,136) and fifteen (15) PBVs
Update
The interior work for the majority of units in both buildings has been finalized.

However, outstanding tasks remain, including exterior finishes, site work, energizing, off-sites, and inspections. Delays have occurred due to issues with SCE.

The project is anticipated to receive TCOs by mid-June and Certificates of Occupancy (COO) by the end of June. Property management is actively reaching EXHIBIT 1

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City of Santa Ana – Quarterly Report
Third Quarter of FY 2023-24
JANUARY – MARCH 2024
out to applicants to arrange interviews and facilitate the tenant selection process.

Additionally, the Corporation for Supportive Housing and Orange County Housing Authority staff are continuing with the referral and matching process for the permanent supportive housing units.

Habitat for Humanity (826 N. Lacy & 830 N. Lacy St.)
Developer Habitat for Humanity
Description New construction of two (2) s ingle-family detached homes for homeownership serving households up to 120% AMI.

City / Authority
Funds
Inclusionary Housing ($565,271) and a 99-y ear ground lease agreement for 416 Vance St. and 826 N. Lacy St. (Appraised Value as of Oct 25, 2018: $578,000) Update
All inspections for the one-s tory Craftsman home (formerly located at 416 Vance St., now 830 Lacy St.) have been successfully completed. The family purchased the home and moved in on March 29, 2024. The installation of the street light post for this project is scheduled for late July 2024. Delays have arisen due to SCE's demand for concrete light posts impacting the supply chain. Habitat for Humanity maintained volunteer engagement throughout Q2, with a total of 1,304 unique volunteers contributing 24,000 hours since the project's inception.

WISEPlace Permanent Supportive Housing (1411 N. Broadway) Developer Jamboree Housing Corporation with WISEPlace as the co-de veloper and lead service provider
Description Adaptive reuse and new construction of the WISEPlace building to provide 47 per
manent supportive housing units, and one (1) manager’s unit.

City / Authority
Funds HOME-A merican Rescue Plan ($5,256,327); Twenty -five (25) PBVs Update
The developer secured construction loan financing and commenced construction in Mar
ch 2023. The foundation slab was poured on October 13, 2023. Currently, Walton is engaged in various tasks including window installation, historical preservation of windows, roof tile installation, sidewalk and curb paving on Sycamore St., MEP rough installation completion, and initial lath and plaster work.

The project is 97% procured, with submittals in progress. Anticipated construction completion is slated for November 2024.

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City of Santa Ana – Quarterly Report
Third Quarter of FY 2023-24
JANUARY – MARCH 2024
FX Residences (801, 807, 809, and 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 uni
ts of permanent supportive housing, and one (1) manager’s unit.

Authority
Funds
Housing Successor Agency ($1,656,947), three (3) PBVs, 99-y ear ground lease agreement for 801 E. Santa Ana Blvd. (Appraised Value as of Oct 25, 2018:
$788,000)
Update
Collaborating with OCFA and the City’s Public Work Agency, the relocation of the under
ground water pump was completed by the first week of January 2024. Window installation took place in December. By the end of December, the developer waterproofed the site to mitigate potential rain delays during the rainy season.

Plumbing and electrical work are currently underway, with rough inspections in progress. Solar approvals and installations are slated to commence in April. Upon completion of all MEP inspections, drywall installation will commence. Stucco work is expected to begin in May. Project completion is estimated for August 2024.

Projects in Pre-Development
Habitat for Humanity (192 1 W. Washington Ave.)
Developer Habitat for Humanity
Description New construction of three (3) duplexes / six (6) homes for homeownership serving hous
eholds up to 80% AMI.

City Funds Inclusionary Housing Funds ($2,200,000)
Update
A demolition permit was obtained, and demolition was successfully completed in J
anuary 2024. Prior to demolition, volunteers contributed to a pre-demolition cleanup effort. Habitat secured construction financing through NeighborWorks of Orange County. Habitat is currently conducting New Home Buyer Orientations as part of its initiative to engage with families and select six eligible families for the six townhomes slated for construction. Additionally, Habitat has developed and is implementing a strategy to ensure its outreach efforts attract qualified homebuyers in accordance with the City’s local preference policy. Throughout Q3, Habitat has maintained volunteer engagement. Since the project's inception, a total of 26 unique volunteers have contributed a combined total of 208 hours.

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Richard Lehn Intergenerational Housing (918 N. Bewley St.) (Formerly called Bewley St.

Intergenerational Housing Project)
Developer Illumination Foundation
Description Rehabilitation of t wo (2) two-story residential buildings into 11 rental units for homeless transitional-age youth and senior citizens.

City Funds Homeless Housing, Assistance and Prevention (HHAP) ($2,021,319); Eight (8) PB
Vs
Update
The developer received comments from the Planning and Building Agency and is w
orking to respond. The developer is also working with the City on PBV approval and the NEPA environmental review.

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