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15 Desk Item - Annual Update on Affordable Housing ActivitiesMEETING DATE: 1/20/03 °wN o~ ITEM NO. DESK ITEM SOS Gh COUNCIL AGENDA REPORT DATE: JANUARY 20, 2004 TO: MAYOR AND TOWN COUNCIL FROM: DEBRA J. FIGONE, TOWN MANAGER SUBJECT: ANNUAL UPDATE ON AFFORDABLE HOUSING ACTIVITIES DISCUSSION: Council Member McNutt raised an issue concerning the report entitled Annual Update on Affordable Housing Activities noting that on the second page of the report it indicates that should the property at 20 Dittos Lane be acquired, that staff would issue an RFP to non-profit housing developers for an affordable housing development on this property. Council Member McNutt has indicated that such an RFP should not be restricted solely to non-profit developers, but also should include for-profit developers. Staff stands corrected, and concurs that such an RFP should also be send to for-profit developers. PREPARED BY: Marty Woodworth P''C Redevelopment Manager N:\DEV\Marty\Forms\affordablehousingdeskitemj an2004.wpd Reviewed by: a Assistant Town Manager !`)V- Town Attorney Clerk Finance `~ommunity Development Revised: 1/20/04 12:40 pm Reformatted: 5/30/02 MEETING DATE: 1/20/04 t°wN of ITEM NO. j COUNCIL AGENDA REPORT !ps GAt°9 DATE: JANUARY 13, 2004 TO: MAYOR AND TOWN COUNCIL C. FROM: DEBRA J. FIGONE, TOWN MANAGER SUBJECT: ANNUAL UPDATE ON AFFORDABLE HOUSING ACTIVITIES RECOMMENDATION: Accept report on affordable housing activities. BACKGROUND: On September 16, 2002, the Town Council held a Study Session to discuss the Town's affordable housing activities. Staff prepared a detailed report (Attachment 1) for the Study Session that discussed the Town's affordable housing activities. In addition, staff prepared a detailed Draft Redevelopment Agency Affordable Housing Strategy that outlined a number of potential affordable housing activities to pursue. Annually, staff would like to update the Council on the current affordable housing activities being undertaken by the Redevelopment Agency ("Agency") and by the Town. In this manner Council can be informed of activities and provide comments to staff. DISCUSSION: New affordable housing units in Los Gatos are generally provided in two ways: 1) using Redevelopment Agency Low and Moderate Income Housing Funds, and; 2) through the Town's Below Market Price program and with CDBG funds. Listed below are the affordable housing activities currently being pursued in each of these two categories. PREPARED BY: Marty Woodwortl Redevelopment and Economic Vitality Director Reviewed by: Assistant Town Manager Attorney Clerk Finance IEL-~iommunity Development Revised: 1/13/04 8:57 am Reformatted: 5/30/02 PAGE 2 MAYOR AND TOWN COUNCIL SUBJECT: ANNUAL UPDATE ON AFFORDABLE HOUSING ACTIVITIES January 13, 2004 Redevelopment Agency Low and Moderate Income Housing Fund Under Redevelopment Law, 20 percent of all tax increment revenue collected by a redevelopment agency must be spent on affordable housing. The Agency currently has approximately $2.6 million in its Low and Moderate Income Housing Funds ("LMIHF") with annual revenues of approximately $800,000. This annual income stream is generally unencumbered (there are no bonds or other debt service payments required of it). The Agency has undertaken two projects over the past year. The first is the Habitat for Humanity house on Charles St. that was completed in September, 2003. The Agency contributed $310,000 to make this project a reality. The second project, which was completed in early December, 2003, is the Project Match five unit very low income senior group residence on Blossom Hill Rd. The Agency contributed $262,000 in LMIHF and the Town contributed $126,801 in CDBG funds to this project. The Agency is currently working with the owners of 20 Dittos Lane regarding a potential purchase of this 1.5 acre property. Should the Agency be able to acquire this property it would then issue a Request for Proposals (RFP) to non-profit housing developers for an affordable housing development on this property. Staff, at a later date, will need to get direction from the Council regarding the type of affordable housing project desired and an idea of the density that might be suitable for the site. 2. Below Market Price Affordable Housing Program Under the Town Code, new housing developments of five or more units must either provide a certain number of Below Market Price units (BMP) or pay an in-lieu fee to the Town. The Town has approximately $1 million in its BMP in-lieu fund available for affordable housing projects. These funds can be combined with Agency funds in order to finance a project such as Dittos Lane or could be used on a separate Town initiated project. During the first half of 2004, staff will be focused on revising the BMP Guidelines. The goals of this revision are to maximize the program's benefit to the community, and to facilitate more effective administration. Issues to be addressed include: Demographics: What is the typical household size, income, and composition of the local households who could most benefit from the BMP Program? How should these household characteristics affect unit size or price? Community Benefit Units: How should the program address proposed community benefit units? (i.e., - units which the developer wishes to reserve for certain populations, such as teachers or public safety employees. To date approximately three of these types of units have been proposed).