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05-0315_HABITAT FOR HUMANITY_D1_Agenda Report CRA 3/15/2005 D1 AGENDA REPORT To: David F. Adams, Executive Director Q \ From: Molly Bogh, Deputy Director Subject: Consideration of Concept Proposal for Affordable Housing Project for Acquisition of Property from Community Redevelopment Agency Located at the Terminus of Calle Rolando - APN 650-121-03 & 04 (Habitat for Humanity) RECOMMENDATION: 1. Consider an offer from Habitat for Humanity to acquire a 2.7 acre parcel from the Community Redevelopment Agency to develop a 27-unit owner-occupied affordable housing project on the property located at the terminus of Calle Rolando; 2. By motion, provide direction to staff to work with the applicant to finalize the project plans and schedule, file and process land use applications for zoning and other land use approvals, and bring this item back to the City Council for final action. SUMMARY: Habitat for Humanity (Habitat), a local non-prdit corporation, has made an offer to develop 27 owner-occupied affordable homes on the Community Redevelopment Agency's 2.7 acre property located at the terminus of Calle Rolando. Habitat proposes to covenant the homes for a minimum of 55 years to help satisfy the City's Regional Housing Needs Assessment (RHNA) requirements for low and very-low income housing. In exchange for developing the 27 units Habitat is requesting that the Community Redevelopment Agency (Agency) contribute the land and approximately $1 million in financial aid in the form of a Community Development Block (CDBG) Grant. The State of California awarded a $1 million CDBG grant to the City for development of an affordable housing project on this site. In order to keep the grant award, the City needs to identify a project for the site, conduct a public hearing, obtain all funding commitments, and complete an environmental assessment by April 27, 2005. If unable to meet the April 27 deadline, the City may request an additional 90 days to complete the above conditions for the grant. The City has determined that Habitat's offer would be an eligible project for this grant. Habitat is prepared to proceed with the development review process immediately if the City Council finds their offer acceptable in concept. Attached is Habitat for Humanity's letter of interest, a conceptual site plan, sample elevations, and development pro forma for the Agenda Report -2 - March 15, 2005 Proposed 27 units (Attachment 1). Habitat's proposal consists of 13 duplexes and one single-family dwelling unit. The proposal meets the density requirements of the City's General Plan and the zoning requirements for height, parking, and setbacks. A rezone would be required for any type of residential because the existing IP (Industrial Park)zoning is for an interim use. The future zoning district is shown as medium high density residential. The City's Housing Element identifies a need for 280 new housing units for very-low and low-income households from 1998 through June 30, 2006. The City has provided affordability covenants for 79 low and very-low income units to date, leaving 201 units remaining to be constructed. To meet the Housing Element goal, the City also needs to provide 151 moderate income units. Please see the attached Housing Element RHNA table (Attachment 2) documenting the City's progress in meeting these goals. Staff has scheduled this offer for City Council review as a public hearing in order to allow members of the public to provide input prior to a significant expenditure of time and money on the project by Habitat or the Agency. In the past, neighborhood concerns have been voiced about affordable housing on this site. However, Habitat's offer is different from the prior proposal because they are proposing an ownership project and a lower density. Habitat has already held one neighborhood meeting and has indicated a willingness to listen and respond to public input on the project designs. COMMISSION/BOARD REVIEW AND RECOMMENDATIONS: The City's Housing Advisory Committee heard a presentation by Habitat for Humanity under Orel Communications at their July 7, 2004 meeting. On July 21, 2004,the Housing Advisory Committee unanimously recommended consideration of an affordable project for the Calle Rolando site, including Habitat for Humanity(see Attachment 3). If the Agency authorizes staff to enter into negotiations with Habitat,the preliminary proposal will be scheduled for Housing Advisory Committee to obtain their feedback and input at the beginning of the process. Upon formal submittal of a development application,the proposed project would be scheduled for consideration by the applicable boards and commissions as part of the City's normal development review process. FINANCIAL CONSIDERATIONS: There is no fiscal impact to the Agency from allowing Habitat for Humanity to prepare and submit land use and zoning applications. Any future action to sell the property will be subject to Agency board review. NOTIFICATION: This item has been scheduled as a public hearing with appropriate notification published in the Orange County Register (Attachment 4) and posted at City Hall, the Library, and the Community Center. Public hearing notices were mailed to all property owners within 500 feet, including all property owners in the Kaufman Broad Homes (Village Alipaz) and San Juan Mobile Estates. Additional public hearing notices were mailed to: Agenda Report - 3 - March 15, 2005 Alipaz Community Association Lois Huddlestone Donald Miller Christine Folgmann Bryan Samuelson The Kennedy Commission Public Law Center Mark Korando, Habitat for Humanity' Agenda Report Included RECOMMENDATION: 1. Consider an offer from Habitat for Humanity to acquire a 2.7 acre parcel from the Community Redevelopment Agency to develop a 27-unit owner-occupied affordable housing project on the property located at the terminus of Calle Rolando; 2. By motion, provide direction to staff to work with the applicant to finalize the project plans and schedule, file and process land use applications for zoning and other land use approvals, and bring this item back to the City Council for final action. Respectfully submitted, Prepared by, ,•• '' '' � 7t� GcadYL' Molly Boh, Lynnette Adolphson Planning Director Management Analyst If Attachments: (1) Proposal by Habitat for Humanity (2) Regional Housing Needs Assessment Table (3) July 21, 2004 Housing Advisory Committee minutes excerpt (4) Public Hearing Notice Sena By: HABITAT FOR HUMANITY; • 7144341222; Ja0-31 11b 4:39HM; rage eue for 2165 S. Grand Avenue PN ka, Santa Ana,CA 92705 (714) 434-6200 Fax(714)434.1222 Website: hahitatoc.org COIAJNGE TY "�4tpagy6 January 31, 2005 Mayor& City Council Members/ Redevelopment Agency Members City of San Juan Capistrano 32400 Paseo Adelanto San Juan Capistrano CA 92675 Subject: Request for Real Property Negotiations Dear Mr. Mayor&Council Members: I am writing you to declare Habitat for Humanity of Orangc County's intention to propose an affordable housing development on the property you current own at the terminus of Calle Rolando. Habitat would propose a development of 27 "For Sale"affordable paired homes to people earning less than 80%of the Area Median Income in Orange County. Attached for your use is a project pro-firma explaining the partnership for funding the development. Our terms for acquiring the property are generally that the Redevelopment Agency provide the land and approximately one million dollars to financial assistance. The City has already secured a million dollar CDBG grant for infrastructure development that could be used to meet our assistance request. In return for such consideration Habitat would produce 27, affordable income restricted homes. The homes would remain atlbrdabfc through Resale and Restrictive Covenants for a term of SS years which meets the City's RHNA requirements. Thank you in advance for your consideration. Should you have any questions I am available at 714-434-6200 xt 214. Sincerely, Mu, ar Sr. Vice President of Site Development &Construction ATTACHMENT 1 Calle Rolando Date 1/24/2005 Sources and Uses Property Details Expenses'' Address: Calle Rolando City: San Juan Capistanw Acctg# Type Normal ExtraordinaryTotal Cross streets: Alipaz Topography: sloping/needs fill 1000 Land Costs $2,1100,00.0 (2) $2,100,000.0 Utilities: End of culdesac Zoning: residential 2060 Architect $137,166.8 $0.0 $137,166.8 Cost Drivers 2130 Legal $135,000.0 0.0 $135,000.0 #of lots 27.0 DesignrOther 311,946.7 0.0 $311,946.7 Lot Size 116,471.0 2000 Total Pro Services $584,113.5 $0.0 $584,113.5 #units/lot 27.0 3000 Fees 437,400.0 0.0 437,400.0 Unit Sf 1,158$ 1,282 4000 Offsftes 557,269.8 0.0 557,269.8 • Total Unit Sf 32,878.0 5000 Onsites 602,426.2 0.0 602,426.2 #Unit Designs 2.0 6000 Construction 2,351,105.8 200,000.0 2,551,105.8 House style 3-br attached,4-br attached Project Duration 140.0 7120 Supervision 287,000.0 0.0 287,000.0 Asking Price $2,100,000 Other Indirects 66,956.5 0.0 66,956.5 Cost/Sf $18.03 7000 Total Indirect Costs $353,956.5 $0.0 $353,956.5 Funding 8040 COH 810,000,0 0.0 810,000.0 San Juan Capistamo Funds $3,094,670 8050 Admin OH 270,000.0 0.0 270,000.0 Habitat Funds $4,720,000 Volunteer OH 32,564.4 0.0 32,564.4 SUBTOTAL $7,814,670 8000 Overhead $1,112,564.4 $0.0 $1,112,564.4 9000 Contingency 671,220.0 0.0 671,220.0 San Juan Caplatamo Funds Developer Funds Recluired Land $2,100,000 Total Pro Service: $584,113 Total Expenses $8,770,056.1 $200,000.0 $8,970,056.1 Fees 437,400 Onsites 602,426 TotalExpenses/Unft $324,816.9 $7,407.4 $332,224.3 Offshes - 557,270 Fees 0 Total Expenses/Unit ex-Land $247,039.1 $254,446.5 Contingency 671,220 • Construction 2,551,106 Total Indirect Cosi 353,956.5 Estimated Sales Price/3-Br Unit $170,000 Overhead 1,112,564.4 Estimated Sales Price/4-Br Unit $180,000 TOTAL $3,094,670 TOTAL $5,875,386 Total Sales Price $4,720,000 Funding Sources Cost/Unit San Juan Capistarno as%Total 34.5% $114,617.40 Total Expenses $8,970,056 Habitat Funds as%Total 52.6% $174,814.81 Less Available Funding $7,814,670 Gap Funding 12.9% $42,792.09 Gap Funding Required $1,155,386 100.0% I'I Costs based on historicals ►fl� ION i .f�. _.__ :�' _ .,1 _�.rw � �r.- - - - �i . , i -_ .. -� �._- - � �' � u �. 1 � _ ' x� r M i 7 ,�'K'R ✓P�� wi �',t�4 �s 4 _ y �}y',�5' ; '� v, i ££wy.�4� �.:" n h} 'ws"�� { '��'�y � ; �r���a �Q SCG"+,: ktsr � +�cw ".Tb'a#�tk -4..d 8 ,�. � tit `,�� .ev . �. atir �.. CITY OF SAN JUAN CAPISTRANO HOUSING ELEMENT REGIONAL HOUSING NEEDS ASSESSMENT FOR THE PERIOD FROM 1998-2004 2004 Orange County Median Income Based on 4 Person Household: $75,600 RHNA %OF TOTAL %OF REMAINING INCOME CATEGORY UNITS TOTAL UNITS REQ'D RHNA UNITS REQ'D. (For 4-Person Household) REQ'D. UNITS PROVIDED• UNITS BY 2006 Very Low Income(0%30%) 164 19.5% 35 21.3% 129 $22,700-$37,800 Low Income(51%-80116) 116 13.8% 44 37.9% 72 • $37,801 -$57,500 Moderate Income(81%-120%) 167 19.9% 16 9.6% 151 $57,501 -$90,700 Above Moderate(>120X) 393 46.8% 399 101.5% 0 >$90,701 840 0% The number of abovemoderate units provided only includes new tract construction units FORDABLE PROJECTS Lengtho Project Name Very Low Low Moderate Total Afford. Expires C of O Status 55 years from Req'd.to submit annual Villa Paloma Senior Apts. 31 37 16 84 December 14, 12/14/55 January, report by April 15 each 2000 2003 year to City Casa de Amma Assisted Living 4 7 0 11 33 years from 03/04/36 Req'd to submit annual D March 4,2003 April,2004 report by April 15 each --� r to C' • TOTAL RHNA PROVIDED: 44 16 95 DADDITIONAL AFFORDABLE UNITS: Afford.Covenants to be 55 years from December, completed by April 1, Little Hollywood Rentals 10 4 0 14 agreement 4/5/2060 2000 2005. Upon approval, m execution date units may be counted Z towards RHNA —"� 57 years from C of O City has right to inspect N Seasons Senior Apts. 18 74 0 92 Certificate of 2053.2054 issued in Irecords any time with 24 Completion date 19%&1997 1hours prior notice. Housing Advisory Committee Minutes July 21, 2004 Page 2 of 3 (2) Should the City use a housing expert to assist staff and the Committee in developing strategies to meet the City's Housing Element goals? (3) Should the City integrate affordable units into market rate projects throughout the community rather than concentrating affordable units into one area? How can the City best achieve this objective? Mr. Justin Bauman addressed the Committee. He stated that he resides in the Kaufman Broad homes and that KB Homes is willing to purchase the Calle Rolando site to construct 18 additional homes. The Committee expressed concern that the City educates the public regarding funding sources for affordable housing. The Committee encouraged use of Community Redevelopment Agency housing set aside funds for an educational campaign. The Housing Advisory Committee unanimously concurred with the following direction regarding meeting the City's affordable housing goals within the next two years: • Concentrate on multiple projects rather than one single project; • Focus efforts on construction of affordable family rentals; • Consider Calle Rolando and Little Hollywood sites for affordable housing projects, including a Habitat for Humanity ownership project, duplexes, manufactured housing, or condominiums; • Integrate affordable units with market rate units whenever possible. However, the Committee concurred with allowing non-integrated projects for the Calle Rolando and Little Hollywood sites; • Restrict affordable units to residents currently living in San Juan Capistrano; • Provide education to community groups regarding affordable housing; • Educate the public on why we need to provide affordable housing; • Advertise in local newspapers, including pictures of families that might reside in affordable units; • Provide for a mixed use of affordable residential and industrial on the Lower Rosan site; and • Work with a housing consultant to help develop a City housing strategy. 2. 03 CDBG PITA — Community Develooment Block Grant Planning and Technical Assistance Multi-Family Housing New Construction Project Feasibility Study — Staff advised that the site feasibility study prepared by Mercy Housing California for the planning and technical assistance grant I ATTACHMENT 3 NOTICE OF PUBLIC HEARING m a„u, nct me ' CITY OF SAN JUAN CAPISTRANO NOTICE IS HEREBY GIVEN, that on the 15th day of March, 2005, at 7:00 P.M. in the City Council Chamber, 32400 Paseo Adelanto, San Juan Capistrano, California, the City Council will hold a public hearing on the following: Consideration of a Conceptual Proposal To Develop An Affordable Housing Project Consisting of 27 Dwelling Units on 2.7 Acres Located at the Terminus of Calle Rolando (Habitat for Humanity) —APN 650-121-03&04 The San Juan Capistrano Community Redevelopment Agency will consider a proposal from Habitat for Humanity to develop 27 owner-occupied affordable homes on the Community Redevelopment Agency's property at the terminus of Calle Rolando. Habitat for Humanity,a local non-profit corporation, proposes to covenant the homes for a minimum of 55 years to help satisfy the City's Regional Housing Needs Assessment (RHNA) requirements for low and very-low income housing. The project is proposed to consist of 13 duplexes, one single-family dwelling, and a private recreation area. Those desiring to be heard on this item will be given an opportunity to do so during such hearing. Written information pertaining to this item must be submitted to the City Clerk by 5:00 p.m., on Monday, March 14,2005,at 32400 Paseo Adelanto, San Juan Capistrano, CA 92675. Individuals desiring to submit late written information at the meeting must orally request such action. For further information you may contact project manager,Lynnette Adolphson,Management Analyst II,at (949)443-6324. —{ MAG ET R. MONA CITY CLERK d' ATTACHMENT 4