Homelessness Prevention and Affordable Housing
Fund (Measure GS) Housing Trust Fund
Source of Funds
Funding for this program is provided using revenues generated through (i) the voter-approved Measure GS tax revenues, known as the Homelessness Prevention and Affordable Housing Fund and (ii) any other funds dedicated by the City Council.
No less than fifty percent of all funds deposited into the Homelessness Prevention and Affordable Housing Fund annually that are not used pursuant to 4. 90.030(a), shall be used to acquire and rehabilitate existing rental properties as deed-restricted affordable housing or to create new deed-restricted affordable housing for Extremely Low-Income Households, Very Low-Income Households, Low Income Households or Moderate-Income Households.
The description below pertains to any portion of Measure GS funds that City Council, consistent with the terms of Measure GS, directs to be spent subject to these guidelines.
Eligible Borrowers
Eligible borrowers are qualified affordable housing developers with proven capacity to develop, own, and operate affordable housing and whose Articles of Incorporation and Bylaws irrevocably dedicate residential property owned by the corporation to the charitable purpose of providing affordable housing to low- and moderate-income households. Limited partnerships with such a nonprofit housing development corporation as the general partner are also eligible borrowers if the nonprofit partner is the managing general partner throughout the term of the loan and will receive at least 51% of the developer fee. Nonprofit corporations must have a valid 501(c)(3) or (4) designation from the Internal Revenue Service.
Eligible Projects
Funds can be used to make deferred loans to eligible borrowers to provide affordable housing, for very low, low- and moderate-income households through acquisition and/or rehabilitation or new construction.
Eligible rehabilitation projects will:
(1) be in need of rehabilitation as defined herein;
(2) be located in the City of Santa Monica;
(3) be free from significant adverse environmental impacts except those that can be mitigated through rehabilitation; and
(4) avoid permanent involuntary tenant displacement to the greatest degree feasible in order to carry out the program.
Eligible projects which involve new construction or conversion of an existing non-residential use will conform to items (2), (3), and (4) above.
Affordability Requirements
All assisted units shall be affordable to households whose incomes do not exceed 120% of median income, and (except for households in occupancy at the time of acquisition) shall be occupied by households whose incomes do not exceed 120% of median income. The City may require the Borrower to pay to the City residual receipts resulting from rents associated with tenant(s) existing prior to the acquisition which exceed the rent limits pursuant to the Regulatory Agreement.
For new construction projects, any unit assisted under this program shall be affordable to and occupied by households whose incomes do not exceed 120% of median income as adjusted for household size.
Eligible projects assisted under this program will not be subject to a minimum average number of bedrooms per unit requirement.
Eligible Uses and Activities
Funds can be used to make loans to eligible borrowers to provide affordable housing for moderate, low- and very low-income households, including but not limited to the following:
(1) acquisition and rehabilitation of eligible rental properties; (2) acquisition and conversion of non-residential property to multifamily or Single-Room Occupancy rental housing units;
(3) new construction of rental housing units;
(4) acquisition and rehabilitation or construction of Single-Room Occupancy housing units and/or transitional housing;
(5) predevelopment loans up to a period of 24 months for site acquisition, predevelopment activities, including professional services which cannot be obtained on a contingency basis, and construction. Such loans may be extended for up to 18 months with an additional 12-month extension option at the discretion of the Housing Manager; and
Religious Organizations
All projects must be used exclusively for secular purposes, and must be available to all persons regardless of religion. The housing may not be used for worship or religious instruction.
Project Monitoring
The City shall monitor annually any housing affordable to households of very-low, low- or moderate-income funded with these trust funds. The City will require owners or managers of the housing developments to submit an annual report to the City.
The annual report will include information on rental rates, family income, and family size of occupants.
Security
The loan or grant shall be secured by a Deed of Trust and Promissory Note which may be subordinated to deeds of trust securing other Federal, State, or City loans, or loans from conventional financing institutions used in conjunction with a City Housing Trust Fund Loan on the same property. The City must obtain written commitments to protect the City’s investment in the event of a default. The City must approve all requests for subordination.
The loan or grant shall be further secured by recorded Covenants and Restrictions, running with the land, to ensure that Program funds are used to provide long-term affordable rental housing opportunities for very-low, low- and moderate-income households. The Borrower and the City shall execute and record Covenants and Restrictions regulating project rents, tenant selection procedures, use of project income, management and maintenance, transfer of property, and permitted forms of ownership and use, including a prohibition on conversion of the project to condominium or stock cooperative ownership for the term of the recorded Covenants and Restrictions. The recorded Covenants and Restrictions shall provide for the longest feasible time. Notwithstanding the above, the Covenants and Restrictions would in no event be shorter than any other term of a Regulatory Agreement or Covenant recorded concurrently with the City’s Covenants and Restrictions. The Covenants and Restrictions shall be recorded with the Deed of Trust, but shall remain senior to all third-party financing sources to ensure that the Covenants and Restrictions survive a foreclosure sale or deed in lieu of transfer.