Item 4a Staff Report Status of Town Housing ProgramsMEETING DATE: 1-6-96
ITEM NO.
COUNCIL / AGENCY JOINT AGENDA REPORT
DATE: December 27, 1995
TO: MAYOR AND TOWN COUNCIL/CHAIRAND MBERS OF THE REDEVELOPMENT AGENCY
FROM: TOWN MANAGER/EXECUTIVE DIRECTOR
SUBJECT: STATUS OF TOWN HOUSING PROGRAMS
RECOMMENDATION:
For information only.
BACKGROUND:
The Town's housing goal is to provide adequate housing for Town citizens, regardless of age, income, race or ethnic
background. The Town encourages conservation and construction of housing adequate for future populations and
replacement needs, consistent with environmental limitations and in proper relationship to community facilities, open
space and transportation.
The Town takes pride in the diversity of its housing stock. The variety of housing opportunities afforded Los Gatos
residents is one of the community's most important attributes and plays a major role in defining the Town's character.
It enables us to offer a choice of housing opportunities for seniors, families and singles and for all income groups. It
also enables people to work and live in the same community and it enables young adults to continue to live in the
community where they were raised.
The Town's General Plan Housing Element includes numerous policies and implementation measures which reflect both
the State's and the Town's housing goals. The State considers the lack of affordable housing to be one of the California's
most critical issues. "A decent home and suitable living environment for all" has been identified as a goal of the highest
priority by the California Legislature. Recognizing that local planning programs play a significant role in the pursuit
of this statewide goal; and to assure that local planning effectively implements statewide housing policy, the Legislature
has mandated that all local jurisdictions and counties include a housing element as part of their General Plan. The
Town's Housing Element is used to extensively to guide the administration and development of the Town's affordable
housing programs. Other planning tools are the County Consolidated Housing Plan (required to receive Community
Development Block Grant funds) and the Town's Affordable Housing Plan (required to meet Redevelopment
requirements).
Section 65588 of the Government Code requires each local government to review its housing element as frequently as
appropriate, but not less than every five years, to evaluate the following:
1. Appropriateness of the housing goals, objectives, and policies in contributing to the attainment of the State
housing goal;
PREPARED BY: Regina A. Falkner Lee Bowman
Commun. Services Director Planning Director/Deputy Executive Director
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Reviewed by: Attorney/Counsel Finance Revised: 12/27/95 10:39 am
Reformatted: 10/23/95
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MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: STATUS OF TOWN HOUSING PROGRAMS
December 27, 1995
2. Effectiveness of the housing element in attaining the community's housing goals and objectives;
3. Progress in implementation of the housing element.
During 1990 and 1991, the Town worked with the State in an attempt to get our Housing Element certified and prepared
three drafts for the State's review. The Town therefore prepared the final element and adopted Resolution 1991-175
indicating how and why the Housing Element complies with State certification requirements. The State's list of
deficiencies and the Town's responses are listed in Attachment 4.
The State did not certify the Town's final Housing Element. Although State law requires submittal of the Housing
Element to the State's Housing and Community Development Department, it does not require certification. Certification
simply ensures that Housing Elements comply with State law. However, a certified Housing Element is essential when
competing with other communities for State or Federal housing funds. In addition, lack of certification is used by
housing groups to determine which agencies to go after for failing to provide their share of affordable housing.
Other State and Federal requirements affect revenues received by the Town. For example, RDA funds are received on
the condition that a portion of revenues be set aside to develop affordable housing. If funds are not expended for
affordable housing , the State may require the funds to be transferred to a nonprofit housing developer. For these
reasons and because the Town wants to have affordable housing, it is in our best interests to maintain a comprehensive
housing program.
The Redevelopment Agency's Affordable Housing Plan (AHP) was prepared last year as required by the State. The
AHP indicates that the Agency will develop specific housing programs or use the Town's existing housing programs
to satisfy the State's requirements. The Agency needs to consider these issues during 1996, establish or refine the
preferred housing programs, and start funding specific housing projects. The Council/Agency discussion of the Town's
housing programs is the first step in this process.
DISCUSSION:
The Town takes a multi -faceted approach to meeting our housing goals. This allows us to take advantage of
opportunities as they arise and de-emphasize programs when market or funding conditions are not favorable. A full
listing of housing programs and efforts are listed in Attachment 1.
The Planning Department:
► prepares and monitors the Housing Element and the Affordable Housing Plan;
► works with developers to designate BMP units or obtain in -lieu fees to provide density bonuses for housing
developments;
► works with developers to provide other concessions to the Town's density, traffic, and parking regulations for
mixed -use projects;
► reviews applications to legalize existing secondary dwelling units and to construct new ones; and,
► with the Building Engineering Services Department, ensures that all new residential developments are useable by
physically disabled persons and meets the Town's handicapped requirements.
The Community Services Department manages most of the Town's Housing Programs:
► Housing Conservation Program: This program preserves the existing housing stock, and provides safe housing for
our residents by providing CDBG funded low interest loans and grants to income eligible property owners to
rehabilitate their homes. Low interest loans are also available to property owners to rehabilitate qualifying rental
units. Approximately 325 clients have been assisted through this Program since its inception in 1976;
approximately $1.8 million has been disbursed. After the Loma Prieta earthquake, the program became the vehicle
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MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: STATUS OF TOWN HOUSING PROGRAMS
December 27, 1995
for claiming and distributing over $3,000,000 in State and $300,000 in private funds for housing rehabilitation.
Client loan payments are collected and loaned to other income eligible applicants. CDBG funds also cover Staff
costs associated with managing the program.
Despite comprehensive marketing, few applications have been received during the past two years. Staff is chairing
a committee to expand the Urban County housing rehabilitation programs to include a Safety Grant. A report will
be forwarded to Council in March recommending that the HCP Guidelines be amended to incorporate the Safety
Grant component (Attachment 2). The project objectives are:
save lives and property;
save tax dollars through proactive efforts;
use the opportunity to market housing conservation programs; and,
effectively use Housing Rehabilitation allocated funds
► Below Market Price Housing Program: The Town Code outlines the elements of the Town's inclusionary zoning
ordinance. The ordinance is implemented through the Below Market Price Housing Program which is guided by
Town resolutions. Through the Program, new residential units are made available to income eligible households
for purchase or rent at below market rate prices. The program includes 15 owner occupied units; 11 units are due
to be constructed within the next year. Also included in the program are 33 rental units (29 are part of The
Terraces, a senior continuing care retirement facility).
► CDBG Funded Affordable Housing Development: CDBG funds are used to develop affordable units. Examples
include a fourplex on Fairview Plaza, a fourplex for seniors on Nicolson Avenue, Villa Vasona, and the Open
Doors Housing Development. CDBG funds have been used to purchase land or provide loans or grants for 187
housing units (171 new construction) throughout the Town. Without the Town's commitment of funds, these units
would not have been constructed.
Information and Referral: Staff keeps a current listing of local housing resources and is currently working with
Housing Authority Staff to develop a county -wide listing.
County Housing Bond Advisory Committee: Community Services Staff represents the Town on this Committee
which makes policy recommendations regarding County issued housing bonds, the Mortgage Credit Certificate
Program, and the Housing Bond Trust Fund.
On November 20, 1995, Council postponed taking action on Bill Hirshman's request to develop a mixed use project with
BMP units on Los Gatos Boulevard at the former West Valley Dodge property. Mr. Hirshman proposed including BMP
units in the project to satisfy the requirements imposed on his Kennedy Road project (Kennedy Estates). Council
indicated that this type of concept should be discussed in conjunction with the status report on the Town's housing
programs. The Council Report on Mr. Hirshman's request is included as Attachment 5.
CONCLUSION:
To establish Los Gatos' share of future housing needs over a five year period, the Association of Bay Area Governments
(ABAG) determined the projected housing needs for the Town for the 1988-1995 period to be 553 dwelling units.
Between 1988 and 1994, 255 housing units were added to the Towns' housing stock. While the Town does not
necessarily buy into the ABAG numbers, this leaves a projected need of 298 units. Data for 1995 is not yet available.
However, the additional units which were added in 1995 were all in the above moderate category. Based on the number
of housing developments recently approved, it is anticipated that by 1997 the Town will have added approximately 11
more BMP units.
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MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: STATUS OF TOWN HOUSING PROGRAMS
December 27, 1995
Listed below is the Town's status of meeting its housing share through the year 1994, broken down by income
group categories:
Required by ABAG Housing Provided Current Housing
1988-1995 1988-1994 Required 1994-1995
Very Low 105 units 31 units
Low 83 units 33 units
Moderate 111 units 19 units
Above Moderate 254 units 172 units
Total 553 units 255 units
74 units
50 units
92 units
82 units
298 units
The Town has met 46 percent of its total housing need. In addition, the Town has met 34 percent of its need for
low\very low income housing. The Town has also approved several Below Market Price Rate units which have
not yet received building permits and are not included in these figures.
The next primary objective is to take necessary steps to meet State mandates:
► Set aside money in the 1996-97 budget for consultant assistance in obtaining State certification;
► Establish the Redevelopment Agency's housing program; and,
► Allocate affordable housing fund balances to an appropriate housing program(s).
ENVIRONMENTAL ASSESSMENTS:
This report is not a project defined under CEQA, and no further action is required.
FISCAL IMPACT:
CDBG funds are used to manage and implement the Housing Conservation Program. These federal funds are also used
to develop affordable housing in the community. Unobligated HCP funds total $280,000. A portion of these are
intended for the Safety Grant Program, a portion will remain for other program efforts, and the balance will be
reallocated to the CDBG Affordable Housing pool which currently contains only $20,000.
BMP In -lieu funds are used to cover contract costs associated with the BMP program. The Fund is estimated to have
$115,000 at the end of FY 1995-96. These funds will continue to be used to implement the program. Re -allocating
funds specifically to the Affordable Housing Pool will be evaluated as part of the 1996/97 Operating Budget. It is
estimated that an additional $400,000 will be provided to the Town as homes are developed at the Kennedy Estates.
These homes will be developed over the next several years. Item 4B, following, provides more information on this
program.
Redevelopment Housing Set -Aside funds: California Redevelopment Law requires that 20 percent of the property tax
allocated to the Agency shall be used to improve the quality and/or quantity of housing for very low, low, and moderate
income families and persons. Salaries, benefits and materials/supplies are budgeted to administer this program and
provide staff support for the Affordable Housing Plan. The Fund is estimated to have $212,500 at the end of FY 1995-
96.
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MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: STATUS OF TOWN HOUSING PROGRAMS
December 27, 1995
Attachments:
1. CSD Housing Programs
2. Housing Summary Sheet
3. Draft Safety Grant Proposal
4. List of State Identified Housing Element Deficiencies
5. Council Report dated November 17, 1995
Distribution:
Community Services Commission
Planning Department
Towle OF Los GATOS
CIVIC CENTER
110 E. MAIN STREET
P.O. Box 949
Los Gyros, CA 95031
COMMUNITY SERVICES DEPARTMENT
HOUSING PROGRAMS
The Town of Los Gatos has a commitment to and takes an active role in developing
low/moderate income housing in our community.
There are multiple affordable housing units scattered throughout the Town.
RENTAL:
1. Beckwith Apartments
31 East Main Street
Two Below Market Price studio rental units.
For more information, call Steven Ho, 399-5180 or 446-0118
2. Los Gatos Oaks Apartments
517 Blossom Hill Road
Two Below Market Price rental units.
For more information, call William Errico at 354-0569
3. Los Gatos Fourplex
221 - 227 Nicholson
Owned by Mid -Peninsula Housing Coalition.
This fourplex consists of one -bedroom apartments for low and moderate income
seniors. For further information call, Mid -Peninsula at (415) 299-8050 or (415)
965-1060.
4. Hartin House
221 Los Gatos Blvd.
Owned and managed by Community Housing Developers.
This group home houses eight senior women. Each resident has a private bedroom
and shares other rooms and facilities. Eligible applicants must meet Section 8
income limits. Rents are subsidized by the Santa Clara County Housing Authority.
If you have questions or would like to get on the waiting list, call Community
Housing Developers at 279-7676.
5. 95 Fairview Plaza
Owned and managed by Community Housing Developers.
This fourplex consists of one studio, two one -bedroom, and one two -bedroom
apartments. For further information, call Community Housing Developers at
279-7676.
ATTACHMENT 1
INCORPORATED AUGUST 10,1887
TOWN OF LOS GATOS
SUBSIDIZED HOUSING UNITS
RENTAL OWNER
OCCUPIED
TOTAL
Nonprofit Housing Developers
221 - 227 Nicholson 4 0 4
Hartin House 8 0 8
95 Fairview 4 0 4
Open Doors 64 0 64
Villa Vasona 107 0 107
SUBTOTAL 187 0 187
Housing Conservation Program
Loans/Grants 16 325 341
SUBTOTAL 16 325 341
Below Market Price
Beckwith Apts. 2 0 2
Los Gatos Oaks Apts. 2 0 2
The Terraces 29 0 29
Forbes Mill 0 3 3
Arroyo Rinconada 0 4 4
Courtstyle 0 5 5
Pollard Oaks 0 2 2
Fountain Lane 0 1 1
Town Court 0 1 1
Vasona Hills 0 5 5
Bella Vista 0 5 5
SUBTOTAL 33 26 59
TOTAL 236 351 587
587 Units Assisted
csdEXCELTUA:\SUBHSING.TOL 1 2/95
ATTACHMENT
SAFETY GRANT PR
We recommend that the municipalities and the COiinty .consider expanding their Housing
Rehabilitation Programs to include a Safety Gra : v)mponent with the following elements:
► earthquake retrofitting
► smoke alarms and fire related safety improvements
► security improvements
► streamlined bidding process
► group marketing
Costs per home are estimated at $200 to $2,000. Apartment and other qualifying residential units
could also be served at an estimated cost of $200 per unit.
Each participating municipality must decide:
► whether or not to participate
► to loan or grant funds (loan terms, grant and loan limits)
► dollar amount allocated to the project
No other cooperative agreements need to be developed as one is already in place. Overhead costs
including staff costs) can be absorbed within budgeted Housing Rehablitation Program budgets.
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ATTACHMENT 3
STATE IDENTIFIED HOUSING ELEMENT DEFICIENCIES
1. Include an analysis of the Town's building code and enforcement procedures as actual and
potential government constraints.
The element specifically states that "the UBC is necessary for the proper construction and
maintenance of residential units and is not considered a constraint to housing production." Other
cities which have a certified element have included this statement.
2. Limitation of expansion of single family housing appears to limit development not to preserve
affordable housing.
The State does not understand the rationale behind the Town's regulations, specifically that
preserving smaller houses could keep the properties more affordable.
3. What and when will innovative ideas be incorporated to promote rental housing?
There is no answer to this question until the opportunity arises.
4. Provide additional incentives to facilitate the development of second units.
The Town's secondary unit regulations were recently amended and the Town does not want to
make any changes until we have more experience with the regulations.
5. Provide a complete land inventory identifying adequate sites which will be made available for a
variety of types of housing for all income levels.
The Town's land use inventory is over 10 years old. The Town has neither the resources nor the
desire to update it at this time because of more pressing issues, namely earthquake and economic
recovery. A land use inventory is not critical in a community which is fully developed where the
inventory of vacant land is commonly know and in the case of Los Gatos rezoning of residentially
zoned properties to a non-residential zone is inconsistent with the General Plan. Also, Los Gatos
permits residential units in all commercial zones. As far as identifying "underdeveloped land",
this is impractical in a community which is intent on preservation of the character of the
community and where densities are variable based in the location and design of a housing
development. In addition, staff does not support the idea of identifying specific sites in the
element where land is underdeveloped since it could invite land speculation resulting in inflated
land prices which would prevent the development of affordable housing. The Town has adopted a
density bonus program for low income housing as part of the Housing Element Update. This
program will result in the construction of more low income units than designating individual sites
and will disperse these units throughout the Town rather than constructing all the units on specific
sites.
6. Identify adequate sites to accommodate the need for homeless persons and families.
If a site is identified, who provides the housing? Identification of a site will not solve the
problem.
7. Include additional programs to assist development of housing for low and moderate income
households.
At this time there are no additional programs.
ATTACHMENT 4.
8. It would be appropriate for the Town to support the shared housinyprogram.
Due to the Town's current budget problem, and the number of programs the Town currently
supports, it would be difficult to provide a grant to this program.
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