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HOUSING SUCCESSOR ANNUAL REPORT
REGARDING THE
LOW AND MODERATE INCOME HOUSING ASSET FUND
FOR FISCAL YEAR 2024/2025
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 2024/2025 (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 2024/2025 (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:
I. 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.
II. 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.
III. 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.
IV. 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.
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V. 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.
VI. 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.
VII. 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.
VIII. 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.
IX. 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.
X. 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 information is not required to be reported until 2029 for the 5-year period of FY 2024/25 through FY 2028/29.
XI. 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, 2015 to June 30, 2025.
XII. 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.
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XIII. 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.
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I. AMOUNTS RECEIVED AND DEPOSITED PURSUANT TO 34191.4(B)(3)(A) A total of $414,461 was deposited into the LMIHAF during Fiscal Year 2024/25 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.
II. AMOUNT DEPOSITED INTO LMIHAF
A total of $788,486 was deposited into the LMIHAF during the Fiscal Year., of which $414,461 was for items listed on the ROPS. The deposits are allocated as follows:
FY 2024/25 Totals % of Total
Loan Payments1 $ 0%
Interest Income 354,071 45%
Rental Income 19,953 2%
Misc. Income 0 0%
Loan Payments for item listed on the ROPS (#21) 414,461 53% Total LMIHAF Deposits2 $788,486 100%
III. ENDING BALANCE OF LMIHAF
At the close of the Fiscal Year, the ending balance in the LMIHAF was $12,500,3483, of which $7,369,487 is available.4 No remaining items in the ending balance are listed on the ROPS.
IV. DESCRIPTION OF EXPENDITURES FROM LMIHAF
The following is a description of expenditures from the LMIHAF by category:
FY 2024/25
Monitoring & Administration Expenditures $9,894
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
1 $44,163 payment on Zinnia loan was reported as a reduction of Notes & Loans Receivable. 2 Expressed as cash and does not include accrued interest income, unrealized gain on investment, and accrued interest on notes receivables. The $414,461 deposit for ROPS item #21 is reported as a “Transfer In to Fund” in the FY 24/25 ACFR, which accounts for the difference between Total Deposits as reported in this report and Total Revenues as reported in the ACFR. 3 For purposes of this report the LMIHAF fund balance includes $5,950,000 as the recorded value of the Zinnia Residual Receipts loan. The ACFR reports the value of this loan as $1,596,527 after an allowance for doubtful accounts of $8,154,454, resulting in a lower reported fund balance in the ACFR of $7,993,469.
4 Refers only to cash available and excludes nonspendable portion of fund balance such as accounts payable, deposits payable, land and improvements held for resale.
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Total Housing Development Expenditures $0
Total LMIHAF Expenditures $9,894
The Housing Successor is allowed to spend up to the greater of $263,1005 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.
V. 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 2024/25
Statutory Value of Real Property Owned by Housing Successor $615,641 Value of Loans and Grants Receivables6 5,988,341
Total Value of Housing Assets 6,603,982
VI. 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.
VII. PROJECT DESCRIPTIONS
The Housing Successor does not receive or hold property tax revenue pursuant to the ROPS for projects.
5 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. 6 Includes $38,341 in First-Time Homebuyer Loan Receivables and the $5,950,000 Zinnia Apartments Residual Receipts loan (the value of the loan as recorded by Finance). In the FY 24/25 ACFR, the Zinnia loan is recorded with a value (including accrued interest) of $9,750,981, with an allowance for doubtful accounts of $8,154,454, resulting in a lower overall fund balance as compared with this report.
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VIII. 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 property was transferred from the Housing Successor to the
Housing Authority and is currently
managed by Abode Communities.
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 fiveyear 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.
IX. 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.
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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.
X. 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 FY 2023/24 Annual Report found the Housing Successor to be in compliance with the Income Targeting Test for the period of July 1, 2019 through June 30, 2024 (Prior Reporting Period). This information is not required to be reported again until 2029 for the 5-year period of FY 2024/25 through FY 2028/29.
XI. 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.
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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, 2015 to June 30, 2025):
Project Name
Year
Built
# of Senior
Units
# of NonSenior
Units
Total #
of Units
Zinnia Apartments7 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, 2015 to June 30, 2025:
FY 2024/2025
# of Assisted Senior Rental Units 0
# of Total Assisted Rental Units 71
Senior Housing Percentage 0%
XII. 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 2024/25
Available Housing Funds (Section III) $7,369,487
(Less) Funding Commitments8 $1,750,000
Available Housing Funds – FY 24/25 $5,619,487
Limitation on Available Housing Funds FY 2024/25
Greater of:
Base Amount $1,000,000
Four Years of Deposits
FY 2020/21 $228,570
FY 2021/22 306,300
FY 2022/23 433,374
FY 2023/24 794,199
Total Deposits $1,762,442
Limitation on Available Housing Funds $1,762,442
7 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. 8 $1,750,000 was committed to the Walnut Bluff Project (National CORE) to be used for acquisition and development expenses per an Exclusive Negotiation Agreement (ENA) executed in April 2024.
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The available cash balance of $5,619,487 is $3,857,045 greater than the $1,762,442 limitation on available housing funds. Therefore, the LMIHAF has an Excess Surplus.
The City’s 6th Cycle Housing Element was certified by the state in 2022; subsequently, the Housing Authority issued a NOFA making the surplus funds available for the development of affordable housing on these sites. As of FY 24/25, the City and Housing Authority are in the process of executing an Affordable Housing Agreement and Loan Agreement with National Community Renaissance of California (National CORE) for the Walnut Bluff Workforce Housing Project, providing for a $6,550,000 loan to include $1,750,000 in LMIHAF. The Housing Successor will continue to make efforts to expend the surplus through allowable monitoring, administration, and housing development activities.
XIII. 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, 2025 3
There were no losses of homeownership units in the portfolio during FY 2024/25. The Housing Successor has not contracted with an outside entity for the management of the ownership portfolio.