RESPONSE TO COUNCIL QUESTIONS RE: 5/2/23 AGENDA
Agenda Item 1: Consideration and Possible Actions on a Proposed 30-Unit Homekey Interim Housing Development on County-Owned Land Located at Lawrence Expressway and Benton Street, Including City Sponsorship and Partial Funding of Project Operations (CEQA: Statutory Exemption under Government Code Section 65913.4, SB 35 Affordable Housing Projects) - Continued from the April 25, 2023 Council Meeting
Council Question:
Some people have claimed that it would be more effective to just give the money to support rents. What programs (TBRA, Section 8) are there to support rents and what is the amount that is being spent by the City and the County?
Staff Response:
Rent subsidies are a helpful tool to address some housing needs within the community, but they don’t meet the needs of every family. The City’s rental assistance program (TBRA) does not provide the same level of support for residents as would an interim housing project. It may take long enough for a family to be placed through the TBRA program that interim housing is needed while they are in the process. The capacity of rental assistance programs is limited in that there can be challenges with finding enough market rate landlords who are willing to accept vouchers or tenant based rental assistance. In some cases, tenants must move out when market rents exceed fair market rents. Also, rental assistance does not address the overall housing shortage. The primary rental assistance programs in this area are:
City of Santa Clara Tenant Based Rental Assistance
FY 23/24:
$643,830: 2023 TBRA Administration (30 HH)
$160,697 of CAHF and $140,000 of CHSF.
$318,186 HOME ARP Rental (15 HH)
$208,559 HOME ARP Support Services
Total: $962,016 for rents (~45 HH)
FY22/23:
HOME: $536,402 ($520,000 for subsidies, etc. and $16,402 for admin.) (20 HH) CAHF: $80,349 (for administration)
CHSF: $70,000 (for administration)
County Rapid Rehousing
Housing Authority Section 8 Vouchers
VASH Vouchers
Council Question:
How does the need for rent support compare with the demand?
Staff Response:
Demand for rental assistance is greater than supply.
Council Question:
Could Homekey money be used to support rents in affordable or at-market apartments?
Staff Response:
Rental assistance alone is not an eligible use under Homekey as Homekey is a project-based program intended for adding new affordable housing capacity. Homekey can be used to master lease properties or to purchase affordability covenants and restrictions on units that are not already income restricted. 2 Council Question:
Why is the construction cost so high for 30 units?
Staff Response:
Construction costs are not particularly high for this project given that it is publicly subsidized affordable housing subject to prevailing wage requirements. (See comparison below in response to Question #7.) Construction cost vary across projects based on many factors including building design, site conditions, cost of labor (prevailing wage), unit sizes, the inclusion of kitchenettes, economy of scale, etc. The proposed project has larger unit sizes compared to the Palo Alto interim project to accommodate kitchenettes. According to LifeMoves the total cost for the Palo Alto project is now ~$35M/108 beds = $324,074 per client served The Benton proposal has fewer larger units and costs $34M/90 beds = $377,778 per client.
Council Question:
Why is the O&M cost so high per person/family?
Staff Response:
Interim housing is staff intensive because a variety of services are provided on-site and staff are present 24-7.
Council Question:
Do you have numbers for the wait lists for any 100% affordable housing projects (e.g. Agrihood, 1601 Civic Center Drive)?
Staff Response:
Agrihood = 293 on the waitlist
Monroe Commons = 250 on the waitlist
St. Anton Studios= still accepting applications
Civic Center Drive = still in pre-development
Council Question:
I see that Monroe Commons (2330 Monroe Street, Santa Clara, CA 95050) is now taking applications. Can we get financials for the total cost of construction?
Staff Response:
Projects have different factors driving development cost. Also, larger projects can realize economies of scale bringing down per unit cost. Staff has included both per unit and per bedroom cost comparisons. The Benton project has the highest per unit cost among the comparisons (this is likely due to economies of scale, as the other projects have significantly more units). However, when you look at cost per bedroom or client served, the Benton site is relatively lower in cost.
• Agrihood
o Total Dev Cost: $104,837
o Total Units: 165
o Per Unit Cost: $635,381
o Per Bedroom cost: 177 bedrooms = $592,304/bdrm
• Mainline
o Total Dev Cost: $87,549,308
o Total Units: 151
o Per Unit Cost: $579,797
o Per Bedroom cost: 181 bedrooms =$483,698/bdrm
• Monroe Commons
3 o Total Dev Cost: $50M
o Total Units: 65
o Per unit cost = $769,230
o Per Bedroom cost: 106 bedrooms =$471,698/bdrm
• Benton/Lawrence Proposal
o Total Dev Cost: $34M
o Total Units: 30
o Per unit cost = $1.13M
o Per Bedroom cost: 90 bedrooms =$377,777/bdrm
Council Question:
Did the City put any money in this project (GF, in-lieu fees, or grants)?
Staff Response:
Yes, for the 2330 Monroe Street project, the City funded $6.5M for project development and $3M for a water main extension to serve the project. The City also provided the land for the development through a $5.2 M seller takeback (gradual repayment for the City’s land).
Council Question:
What is the current waiting list for the 40 units? I realize that the application period goes until May 5th
Staff Response:
Freebird is only marketing 40 of 64 units because 16 of the units are IDD (Intellectual or Developmental Disability) units and 8 are PBV (Project Based Voucher) units. The IDD units are filled by referrals through San Andreas Regional Center. There is also $3.2 million in County funds for those units. The 8 PBV units are filled by referrals from the Housing Authority. There is also 1 on-site manager unit. One week into the developer’s two- week marketing period the developer has received 250 applications with a target of 400 for the 40 units.
Council Question:
What kind of screening is done for the 25% of people with intellectual or development disabilities?
Staff Response:
Clients are referred by San Andreas regional center so in addition to the typical income, credit, background screening, they are also active clients of the regional center who are receiving services and determined to be able to live independently.
Council Question:
What is the support staffing (FTE) for this project? Where does the O&M for this come from?
Staff Response:
This information has been requested but not yet received.
Council Question:
There was some debate about what the county might charge to lease the land to the Benton/Lawrence project.
Staff Response:
The County would charge a nominal fee (i.e. $1 per year) to lease the property to LifeMoves.
Council Question:
Who is the “owner” of the structure when it gets constructed? State? Lifemoves? County? City?
4 Staff Response:
This could be similar to a ground lease where the improvements are owned by Lifemoves but revert back to the county after an agreed upon term.
Council Question:
If the county leases the land, how much would that be and who is paying the lease?
Staff Response:
The County representative indicated that similar to other ground leases they have for affordable housing they would be looking for a $1 a year lease.
Council Question:
If after 7 years the project becomes permanent housing, who would manage that housing? OSH?
Staff Response:
There currently isn’t a plan to convert the project to permanent housing after 7 years. However, if at year 6 the parties to the Letter of Intent (County, City and LifeMoves) collectively determine that there was no longer a need for interim housing the three parties would work together to consider the future use of the buildings (i.e. land use approvals, building modifications if any). If the City is a partner to the development, a change in land use would require City approval per the anticipated terms of the Letter of Intent.