April 7, 2026
Mr. Andrew Powers
City Manager
(805) 449-2121
[email protected]
RE: Hillcrest Homes Disposition and Development Agreement (DDA), approved March 19, 2024 via Resolution No. 2024-003. Project Address: 382 and 384 N. Erbes Road, Thousand Oaks, California 91362 (APNS 670-0-250-290 AND 670-0-250-210)
Dear Mr. Powers,
-Help Housing ( ) respectfully requests consideration of certain modifications to the conditions of approval and Disposition and Development Agreement (DDA) for Hillcrest Homes, a 78-unit for-sale affordable condo community. The intent of this letter is to provide a project update and to request certain modifications that will support the project.
Project Progress to Date
Since approval of the DDA, has been working diligently to secure building permits and finalize project financing to advance Hillcrest Homes into construction as expeditiously as possible. Building plans have been submitted for review and approval and PSHH has successfully secured $12.5 million to date, including a $10 million-dollar CalHome award from the California Department of Housing and Community Development. A complete list of all secured funding sources to date, and their associated affordability requirements are as follows:
o City Housing Successor funding of $1,200,000 requires 10 LMIHAF units at 80% area median income (AMI) under Health and Safety Code 50052.5). o Due to Surplus Land Act designation, 75% of homes must sell to 80% AMI or below households and up to 25% of homes can sell to 120% AMI or below households. o HCD CalHOME $10,000,000 award requires 40 units at 80% AMI or below. o FHLB SF Affordable Housing Program (AHP) award of $1,475,000 requires 59 units at 80% AMI or below.
FHLB AHP grants require construction completion within 4 years of award. current award, we will need to demonstrate that all funding sources are secured in order to obtain an extension. PSHHC will reapply to the FHLB AHP competition in case the prior award expires.
o County of Ventura awarded $1,002,343 in HOME and PLHA funding. However, the HOME award may increase costs further due to Buy America Build America (BABA) requirements.
Project Costs and the Anticipated Financing Gap
ATTACHMENT #3
1060 Kendall Road, San Luis Obispo, CA 93401 Phone: (805) [email protected] Total home sales, assuming affordability restrictions, are estimated to be up to $34 million. Therefore, the total financing gap is approximately $4,678,345. The projected financing gap may change as final assumption that the final financing gap will be between $3-6m. To address this shortfallis pursuing multiple strategies including cost mitigation, a potential phasing plan and securing additional funding sources.(PLHA) funding and $5 million of County General Fund Allocation. Unfortunately, the for a General Fund allocation was not selected because the County was prioritizing extremely low-income populations. The County of Ventura has not yet announced PLHA funding recommendations but the funding will likely be oversubscribed oNotably, the PLHA program provides formula grants to local governments, specifically prioritizing affordable owner-occupied workforce housing (AOWH). The State has determined that 20% of the fund should be designated for AOWH for low-and moderate-income housing (up to 150% AMI, area median income) and funds can be used for accessibility modifications, rehabilitation and down payment assistance. While the PLHA program is a great opportunity for Hillcrest Homes, available funding has been limited because it takes time to accrue funding.Additionally, the pace of funding has been slowed due to state timelines.is exploring New Market Tax Credit (NMTC) potential for the project however NMTC financing structures may conflict with HCD CalHome regulations.in order to apply for additional HCD CalHome on the balance of unassisted units, as the current award only assists 40 homes.design professionals to explore the best ways to reduce project costs. We concluded that it would best serve the project to remove the private balconies. a density bonus amendment to add an additional concession to remove private balconies from the project. Balconies are subject to CA SB326 compliance. SB 326 or Civil Code 5551 load bearing. By removing balconies, the project will be able to reduce the monthly HOA burden for homeowners by $25 per month, or $23,400 per year across all of the homes.Affordable For-Sale Homes and the Inherent GapThe financing gap for the Hillcrest Homes project is due to the gap between the total development costs per home and the maximum mortgage a low- or moderate-income buyer can support without exceeding 30-40% of gross household income. Based on the DDA-approved occupancy standards and themonthly housing costs or PITIA (principal, interest, taxes, insurance and association fees) are estimated as follows:(8 1bd and 2 2bd) are subject to Health & Safety code affordability parameters which cap housing costs at 30% for low- 1060 Kendall Road, San Luis Obispo, CA 93401 Phone: (805) [email protected] income and 35% for moderate-income households. Based on health and safety code affordability parameters, a 2-person 80% AMI household can afford up to $1,835 PITIA for a 1bd townhome. Excluding interest, taxes, interest and association fees, the maximum monthly mortgage is $1,038 per month. The maximum first mortgage based on this amount is $189,000 (Plan 1 and 2). The maximum mortgage for the 2bd townhome is approximately$213,000 (Plan 3).Of the remaining 68 homes, 19 homes can sell to households earning up to 120% AMI and 49 homes will sell to households earning up to 80% AMI. Due to the land trust exemption in the Surplus Land Act, these 68 homes are not subject to the same LMIHAF parameters that require a 30% and 35% maximum housing cost. Assuming a 40% housing cost ratio, the maximum first mortgage for an 80% AMI low-income household will not exceed approximately:o$340,000 to $388,000 - 2bd (Plan 3 and 4)o$432,000 3bd (Plan 5)o$470,000 3bd plus bonus room (Plan 6)o$504,000 4bd (Plan 7)The moderate-income homes assume a maximum first mortgage as follows:o$608,000 3bd (Plan 5)o$659,000 3bd plus bonus room (Plan 6)o$709,000 4bd (Plan 7)Depending on final underwriting, the 78 Hillcrest townhomes could generate up to approximately $34 million in home sale revenue. The total development and construction cost, however,will range between approximately $510,435 to $813,049 by plan type.Therefore, depending on the required afffunding for each home subsidizing the difference between the housing cost affordable to the buyer and the cost to construct.Requested City Actions in Support of Hillcrest Homes, we request certain City actions and approvals including:1. Support Ordinance providing impact fee relief.2. Authorize City staff to implement DDA Modifications.3. Authorize modifications to project conditions of approval. 1. Impact Fee Relief:recommends that the City adopt an ordinance that would provide impact fee relief for affordable for-sale homes. There is precedent for other ordinances locally such as the City of Venturaordinance that provides impact fee relief for 100% affordable housing. fee relief for for-sale units serving up to 120% AM households. In the case of Hillcrest Homes, the majority of homes will serve 80% AMI households and below, which will spur long-term community benefits to working scope of the exemption include Quimby Fees as it represents nearly 40% of the $2,590,380 estimate. Impact fee relief would significantly help projects like Hillcrest Homes by reducing the financing gap between the total 1060 Kendall Road, San Luis Obispo, CA 93401 Phone: (805) [email protected] cost for each home and the housing cost affordable to low- and moderate-income buyers. The estimated impact fee burden is described further below:a) Based on an estimate provided by City staff, Hillcrest Homestotal impact fee obligation is $2,590,380. This figure includes approximately $1 million Quimby fee but the total excludes school impact fees, which are estimated to be $370,117, and plan check, inspection and permit fees, which are estimated to be $927,564. All inclusive of the above, total estimated fee obligation is $3,888,062or approximately$50,000 per unit. This cost directly translates to the purchase price; lower fees directly support lower costs for buyers and greater affordability. 2. DDA Modifications:designee to make modifications to the DDA now and as required in the future. To align with current project assumptions, the following DDA modifications subject to final Staff review and approval:a) Remove references to Housing Trust Fund Ventura County (HTFVC). The HTFVCwill be deleted from the DDA as it no longer needs to hold the land as a match for Prop 1 funds. Other than that, there is no change to the DDA as it relates to land transfer. The land will be conveyed to the HLTVC. The HLTVC will enter into a 5-year ground lease, with fair market ground rent considering affordability restrictions as determined by an appraiser, with PSHH to develop the for-sale condo units and, upon completion and sale of each unit, the PSHH ground lease will be terminated and the HLTVC will enter into a 99-year ground lease with the homebuyer, with fair market ground rent considering affordability restrictions as determined by an appraiser.b) Insert language in Exhibit 12to allow future HCD CalHome financing or Surplus Land Act changes as they apply, and to prevent future misalignment if guidelines or laws change. We propose adding language in the section that describes the standards that shall control underwriting onpage 3 of 7, such as:Act and project financing as required or amended. Any exceptions will be approved by City Manager or delegated City representative if compliant with applicable laws and c) Amend Exhibit 12to clarify that DDA Exhibit 12 sets limits for the buyers maximum first mortgage, not the initial maximum sales price.d) Amend Exhibit 12 to allow a maximum housing cost ratio of 40% for non-LMIHAF units. We believe this is acceptable due to the land trust exemption from the Surplus Land Act. As the final financing for the project takes form, further refinements may be necessary to ensure final underwriting aligns with financing requirements.3. Project Modifications:a)PSHH requests removal of Conditions of Approval #23 & 78 via the DDA amendment as these two utility poles will be undergrounded via a City project. suggests that this 1060 Kendall Road, San Luis Obispo, CA 93401
Phone: (805) 781- -1901
[email protected]
change to scope can be captured in Exhibit 5 of the DDA subject to City approval. We provide more background to this request below:
o Conditions of Approval #COAs 23 & 78 require that the Hillcrest Homes project underground two electrical poles on Hillcrest Drive.
o These two utility poles will now be undergrounded via a City project, separate from the Hillcrest Homes project.
o To reflect this change, we request that Conditions #23 and #78 be removed. we deeply value
our partnership with the City of Thousand Oaks to bring the Hillcrest Homes project to fruition as a much-needed housing type.
Sincerely,
Kenneth Triguerio
Chief Executive Officer & President
-Help Housing Corporation
[email protected]
cdd:670-80/H:COMMON:City Council/CC Agenda items/2026/04142026/PSJHJ/ PSHH Letter 04 07 2026.pdf