HOUSING SUCCESSOR ANNUAL REPORT
REGARDING THE
LOW AND MODERATE INCOME HOUSING ASSET FUND
FOR FISCAL YEAR 2023/2024
PURSUANT TO
CALIFORNIA HEALTH AND SAFETY CODE SECTION 34176.1(F)
FOR THE
CITY OF SIGNAL HILL
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). This Report sets forth certain details of the Signal Hill Housing Authority (Housing Successor) activities during Fiscal Year 2023/2024 (Fiscal Year). 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 (Annual Comprehensive Financial Report, or ‘ACFR’) for Fiscal Year 2023/2024 (Fiscal Year) as prepared by Rogers, Anderson, Malody & Scott, LLP (Auditor), which Audit is separate from this annual summary Report; further, this Report conforms with and is organized into sections I. through XI., inclusive, pursuant to Section 34176.1(f) of the Dissolution Law:
Amounts Received and Deposited Pursuant to 34191.4(b)(3)(A): This section provides the total amount of funds paid to the City and the amount deposited into the LMIHAF allocable to 20% of the repayments on reinstated City/Agency loans per Section 34191.4.
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.
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.
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.
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.
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.
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.
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, provide a status update on the project.
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.
Income Test: This section provides the information required by Section 34176.1(a)(3)(B), or a description of expenditures by income restriction for every five year period, with the first time period beginning January 1, 2014 and whether the statutory thresholds have been met. This report contains the information required to be reported for the five-year period starting FY 2019/20 and ending FY 2023/24.
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 ten-year period reviewed is July 1, 2014 to June 30, 2024.
Excess Surplus Test: This section provides the amount of excess surplus in the LMIHAF, if any, and the length of time that the Housing Successor has had excess surplus, and the Housing Successor’s plan for eliminating the excess surplus.
Inventory of Homeownership Units: This section provides a summary of covenanted homeownership units assisted by the former redevelopment agency or the housing successor that include an equity sharing and repayment provisions, including (a) number of units; (b) number of units lost to the portfolio in the last fiscal year and the reason for those losses, and (c) any funds returned to the housing successor pursuant to losses or repayments.
This Report is to be provided to the Housing Successor’s governing body. In addition, this Report, ACFR and the former redevelopment agency’s pre-dissolution Implementation Plans are to be made available to the public on the City’s website.
AMOUNTS RECEIVED AND DEPOSITED PURSUANT TO 34191.4(B)(3)(A) A total of $375,777 was deposited into the LMIHAF during Fiscal Year 2023/24 pursuant to Section 34191.4(B)(3)(A). This amount is equal to 20% of a loan repayment between the City and the Successor Agency pursuant to ROPS item #21.
AMOUNT DEPOSITED INTO LMIHAF
A total of $743,754 was deposited into the LMIHAF during the Fiscal Year, of which $375,777 was for items listed on the ROPS. The deposits are allocated as follows:
FY 2023/24 Totals
% of Total
Loan Payments
$0
0%
Interest Income
317,532
43%
Rental Income
50,445
7%
Misc. Income
0 0%
Loan Payments for item listed on the ROPS (#21)
375,777
50%
Total LMIHAF Deposits
$743,754
100%
ENDING BALANCE OF LMIHAF
At the close of the Fiscal Year, the ending balance in the LMIHAF was $13,615,370, of which $6,693,856 is available. No remaining items in the ending balance are listed on the ROPS.
DESCRIPTION OF EXPENDITURES FROM LMIHAF
The following is a description of expenditures from the LMIHAF by category:
FY 2023/24
Monitoring & Administration Expenditures
$4,520
Homeless Prevention & Rapid Rehousing Services Expenditures $0
Housing Development Expenditures
Expenditures on Moderate Income Units
$0
Expenditures on Low Income Units
0 Expenditures on Very-Low Income Units
0 Expenditures on Extremely-Low Income Units
0 Total Housing Development Expenditures
$0
Total LMIHAF Expenditures
$4,520
The Housing Successor is allowed to spend up to the greater of $263,100 or 5% of the value of the Housing Assets Portfolio (defined and calculated in Section V), which totals $6,603,982, on Monitoring and Administration Expenditures. Therefore, the Housing Successor is using less than 1% of the maximum allowable $330,199 for Monitoring and Administration Expenditures.
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 value of assets owned by the Housing Successor.
As of End of FY 2023/24
Statutory Value of Real Property Owned by Housing Successor $615,641
Value of Loans and Grants Receivables
5,988,341
Total Value of Housing Assets
6,603,982
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.
PROJECT DESCRIPTIONS
The Housing Successor does not receive or hold property tax revenue pursuant to the ROPS for projects.
STATUS OF COMPLIANCE WITH SECTION 33334.16
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 presents a status update on the project related to such real property.
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 Department of Finance 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.
The following provides a status update on the real property or housing asset(s) that were acquired prior to February 1, 2012 and compliance with the five-year period:
Address
Date Approved by DOF as Housing Asset
Deadline to Initiate Development Activity
Status of Activity
967 Las Brisas Way
8/2012
8/2017
The Housing Successor is working with housing developer Abode Communities to transfer the duplex once the developer has secured funding.
The following provides a status update on the real property or properties that have been acquired using affordable housing funds on or after February 1, 2012, and for which the five- year activity deadline does not apply:
Address
Date of Acquisition
Deadline to Initiate Development Activity
Status of Activity
2200 Block of Gaviota Ave
8/2012
N/A
Property is subject to Surplus Land Act. Site has some financial feasibility challenges due to the presence of an abandoned oil well on the property.
DESCRIPTION OF OUTSTANDING OBLIGATIONS PURSUANT TO SECTION 33413 Replacement Housing: According to the 2010 – 2014 Implementation Plan for the former redevelopment agency, no Section 33413(a) replacement housing obligations were transferred to the Housing Successor.
Inclusionary / Production Housing. According to the 2010 – 2014 Implementation Plan for the former redevelopment agency, no Section 33413(b) inclusionary/production housing obligations were transferred to the Housing Successor.
The former redevelopment agency’s Implementation Plans are posted on the City’s website.
INCOME TARGETING TEST
Section 34176.1(a)(3)(B) requires that the Housing Successor must require at least 30% of the LMIHAF to be expended for development of rental housing affordable to and occupied by households earning 30% or less of the AMI. If the Housing Successor fails to comply with the Extremely-Low Income requirement in any five-year period, 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 the AMI until the Housing Successor demonstrates compliance with the Extremely-Low Income requirement.
If the Housing Successor exceeds the expenditure limit for households earning between 60% and 80% of the AMI in any five year report, the Housing Successor shall not expend any of the remaining funds for households earning between 60% and 80% of the AMI until the Housing Successor demonstrates compliance with this limitation in an annual report.
For purposes of this calculation, “development” means new construction, acquisition and rehabilitation, substantial rehabilitation as defined in Section 33413, acquisition of long-term affordability covenants on multifamily units as described in Section 33413, or the preservation of an assisted housing development that is eligible for prepayment or termination or for which within the expiration of rental restrictions is scheduled to occur within five years.
The following table provides the Housing Successor’s Income Targeting Test as of June 30, 2024 for the period of FY 2019/20 through FY 2023/24 (Current Reporting Period):
Extremely-Low Income (≤30% AMI) LMIHAF Expenditures
31% - 59% AMI LMIHAF Expenditures
60% - 80% AMI LMIHAF Expenditures
Total LMIHAF Spent
FY 2019/2020
0 0
0 0
FY 2020/2021
0 0
0 0
FY 2021/2022
0 0
0 0
FY 2022/2023
0 0
0 0
FY 2023/2024
0 0
0 0
Total July 1, 2019 – June 30, 2024
$0
$0
$0
$0
The following table provides a summary of the Income Targeting Test for the Current Reporting Period:
For the Period: 7/1/2019 – 6/30/2024
Extremely-Low Income Targeting Test
60% to 80% AMI Income Targeting Test
Expenditures as a % of Total Expenditures
0%
0%
Requirements
At least 30% of Total Expenditures
At most 20% of Total Expenditures
As illustrated above, no LMIHAF funds were expended between FY 2018/19 and FY 2023/24; thus, the Housing Successor is in compliance with the Income Targeting Test.
SENIOR HOUSING TEST
The Housing Successor is to calculate the percentage of units of deed-restricted rental housing 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 summarizes the number of deed-restricted rental housing units produced by the former redevelopment agency and the Housing Successor over the past 10 years (July 1, 2014 to June 30, 2024):
Project Name
Year Built
# of Senior Units
# of Non-Senior Units
Total # of Units
Zinnia Apartments
2017
0 71
71 Totals
0 71
71 The following provides the Housing Successor’s Senior Housing Test for the 10 year period of July 1, 2014 to June 30, 2024:
FY 2023/2024
# of Assisted Senior Rental Units
0 # of Total Assisted Rental Units
71 Senior Housing Percentage
0%
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:
Available Housing Funds – FY 2023/24
Available Housing Funds – FY 2023/24
$6,693,856
Limitation on Available Housing Funds FY 2023/24
Greater of:
Base Amount
$1,000,000
Four Years of Deposits
FY 2019/20
$1,396,584
FY 2020/21
228,570
FY 2021/22
306,300
FY 2022/23
433,374
Total Deposits
$2,364,828
Limitation on Available Housing Funds
$2,364,828
The ending cash balance of $6,693,856 is $4,329,029 greater than the $2,364,828 limitation on available housing funds. Therefore, the LMIHAF has an Excess Surplus.
The City of Signal Hill selected sites for the 6th Cycle Housing Element during Fiscal Year 2020/21, which includes sites for 329 affordable housing units and 517 units for all income levels. The Housing Element was certified by the state in October 2022, and the Housing Authority has issued a NOFA making the surplus funds available for the development of affordable housing on these sites.
HOMEOWNERSHIP
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 LMIHAF pursuant to Section 33334.3(f). The inventory for the Housing Successor is as follows:
The following summarizes the current inventory of the Housing Successor’s homeownership portfolio:
# of Units
Restricted homeownership units as of June 30, 2024
3 There were no losses of homeownership units in the portfolio during FY 2023/24.
The Housing Successor has not contracted with an outside entity for the management of the ownership portfolio.
Expressed as cash and does not include accrued interest income, unrealized gain on investment, and accrued interest on notes receivables.
Refers only to cash available and excludes nonspendable portion of fund balance such as accounts payable, deposits payable, land and improvements held for resale.
The expenditure cap is subject to annual Consumer Price Index (CPI) changes. In FY 2023-24 HCD increased the expenditure cap to $263,100 based on changes to the CPI.
For purposes of this report, the Value of Loans and Grants includes the Zinnia Apartments Residual Receipts loan of $5,950,000. Note that the Finance Department typically records this loan with a corresponding allowance for doubtful accounts of $5,950,000, which causes the loan to have a net effect of zero on the LMIHAF fund balance. Therefore, in the FY 2023/24 ACFR the value of this loan is not shown in the LMIHAF fund balance.
The FY 2018/19 Annual Report found the Housing Successor to be in compliance with the Income Targeting Test for the previous 5-year period of January 1, 2014 through June 30, 2019.
Zinnia Apartments, a 72-unit affordable housing rental project, was placed in service on November 30, 2017. One unit is set aside for an on-site manager’s unit and thus not included in this report’s analysis.
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