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14 Desk Item - Affordable Housing Production Plan DATE: TO: FROM: SUBJECT: REMARKS: MEETINGDATE: 11/1/04 ITEM NO. /4 DESK ITEM REDEVELOPMENT AGENCY AGENDA REPORT November 1,2004 CHAIR AND MEMBERS 0 EXECUTIVE DIRECTO CONSIDER AND ADOPT THE REDEVELOPMENT AGENCY FIVE YEAR IMPLEMENTATIONPLANANDAFFORDABLEHOUSINGPRODUCTION PLAN FOR THE CENTRAL LOS GATOS REDEVELOPMENT PROJECT FOR THE PERIOD OF mLY 1, 2004 TO JUNE 30, 2009. Staffwas informed that an error occurred during the photocopying of the Five Year Implementation Plan (Attachment 2, previously submitted). A corrected copy of the Five Year Implementation Plan is attached and should be referenced in any motion that is considered by the Redevelopment Agency. ATTACHMENTS: Five Year Implementation Plan FY 2004/05 to FY 2008/09 (Corrected copy) N:\DEV\JOEL\RDA\RDA5YRImplementationPlan2004Desk.wpd PREPARED BY: 􀁾􀁾 BOON. LORTZ DEPUTY EXECUTIVE DIRECTOR Reviewed by: 􀁾􀁁􀁳􀁳􀁩􀁳􀁴􀁡􀁮􀁴 Town Manager __Attorney __Clerk Finance . 􀁾􀁃􀁯􀁲􀁮􀁲􀁮􀁵􀁮􀁩􀁴􀁹 Development Revised: 11/1/04 3:57 pm /Refo=atted: 5/30/01 Five-Year Implementation Plan FY 2004/05 toFY 2008/09 October 2004 Prepared by Los Gatos Redevelopment Agency 110 E. Main Street Los Gatos, CA 95030 ATTACHMENT 2 Central Los Gatos Redevelopment Project Five-Year Implementation Plan FY 2004/05 -FY 2008/09 I. Introduction 1-1 A. Organization I-I B. Interpretation 1-2 C. Description of the Redevelopment Plan and Project Area 1-2 D. Agency Accomplishments, FY 1999/00 -FY 2003/04 1-3 E. Five-Year Goals and Objectives 1-5 II. Non-Housing Implementation Plan II-I A. Redevelopment Program FY 2004/05 -FY 2008/09 II-I B. Linkage Between Proposed Redevelopment Program and Elimination ofBlighting Influences II-2 C. Five-Year Implementation Plan Resources II-5 D. Five-Year Implementation Plan Expenditures II-7 III. Housing Component 111-1 A. Overview of Agency Affordable Housing Responsibilities III-l B. Statutory Requirements for Housing III-2 C. Housing Production Plan III-IO D. Replacement Housing III-l 3 E. Housing Fund III-l 3 F. Housing Progran1 III-l 6 G. Fulfillment ofHousing Obligations III-20 Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project Five-Year Implementation Plan October 2004 Central Los Gatos Redevelopment Proj ect Five-Year Implementation Plan FY 2004/05 -FY 2008/09 . Lists of Figures and Tables Tables Table I-I Summary of Central Los Gatos Redevelopment Plan Time and Fiscal Limits 1-3 Table II-I Matrix Summarizing How Five-Year Programs and Activities Will Eliminate Blight II-3 Table II-2 Agency Revenue Available for Non-Housing Redevelopment Activities FY 2004/05 -FY 2008/09 II-6 Table II-3 Projected Five-Year Non-Housing Redevelopment Program Expenditures FY 2004/05 -FY 2008/09 II-8 Table III-I 2004 Santa Clara COlmty Maximum Incomes by Income Category and Household Size III-6 Table 1II-2 Affordable Housing Cost. .III-7 Table III-3 ABAG Regional Fair Share Allocations 1999-2006 III-8 Table III-4 Housing Fund Expenditures Requirement Non-Age Restricted Housing III-9 Table III-5 Summary ofHistorical and Projected Housing Production in Project Area III-II Table III-6 Housing Production and Affordable Obligation III-14 Table III-7 Agency Revenue Available for Affordable Housing Housing Activities, FY 2004/04 -FY 2008/09 III-15 Table III-8 Housing to be Produced with Agency AssistancelHousing Fund Expenditures III-I 8 Figures Figure I-I Los Gatos Redevelopment Project Area 1-4 Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project 11 Five-Year Implementation Plan October 2004 Central Los Gatos Redevelopment Project Five-Year Implementation Plan FY 2004/05 -FY 2008/09 I. Introduction Section 33490 of the Califomia Community Redevelopment Law (the "CRL") requires that a redevelopment agency administering a redevelopment plan prepare and adopt a five-year implementation plan for its project areas. The principal goal of the implementation plan is to guide an agency in implementing its redevelopment program to help eliminate blighting influences. In addition, the affordable housing component of the implementation plan provides a mechanism for a redevelopment agency to monitor its progress in meeting both its affordable housing obligations under the CRL and the affordable housing needs of the community. In effect, the implementation plan is a guide, incorporating the goals, objectives and potential programs of art agency for the five-year Implementation Plan period, while providing flexibility so the agency may adjust to changing circumstances and new oppoltunities. This document constitutes the FY 2004/05 through FY 2008/09 Implementation Plan for the Central Los Gatos Redevelopment Project Area (the "Project Area"), which was established in November 1991. This Implementation Plan outlines the program of revitalization, economic development, and affordable housing activities of the Los Gatos Redevelopment Agency (the "Agency") for FY 2004/05 through FY 2008/09, the required five-year planning period. In addition, information for later years is provided in the housing component of this Implementation Plan, as required by tlle CRL. The Affordable Housing Production Plan is included in Chapter III, and covers historical and projected housing production in the Project Area, the Agency's affordable housing production obligation, and the Agency's plans to meet its obligation. A. Organization Generally, the implementation plan must contain the following information: • Specific goals and objectives for the next five years for both housing and non-housing activities. • Specific programs and expenditures for the next five years for both housing and non-housing activities. • An explanation ofhow the goals, objectives, programs and expenditures will assist in the elimination ofblight and in meeting affordable housing obligations. • Other information related to the provision of affordable housing. Chapter I provides a basic discussion of the CRL requirements, Project Area description, Agency accomplishments to date, and goals and objectives for the Project Area. Chapter II summarizes the proposed Non-Housing activities and related revenues and expenditures for the five years, and a description of the blighting conditions and how they will be alleviated by the activities. Chapter III addresses affordable housing activities and expenditures, and charts Agency progress in meeting its affordable housing obligations. Chapter III also includes the Affordable Housing Production Plan and Housing Program. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project I-I Five-Year Implementation Plan October 2004 • B. Interpretation The Implementation Plan is intended to provide general guidance for the implementation ofthe Agency's programs and activities. The Agency expects that particular constraints and opportunities, not fully predictable at this time, will arise in the course of undertaking the projects and activities described in this Implementation Plan over the next five years. Therefore, the Agency intends to use and interpret this Implementation Plan as a flexible guide. The Agency acknowledges that specific projects and activities as achlally implemented over the next five years may vary in their precise timing, location, cost, expenditure, scope and content from those set forth in this document. In developing its affordable Housing Program, the Agency has been guided by the goals and objectives of the Town's Housing Element of the General Plan, incorporated into this Implementation Plan by this reference. Through its affordable housing activities, the Agency will support and advance the overall Housing Element programs as well as contribute to the implementation of the policies and strategies identified in the Town's General Plan, as presented in Chapter III. I c. Description of the Redevelopment Plan and Project Area The Central Los Gatos Redevelopment Plan (the "Redevelopment Plan") was adopted by the Los Gatos Town Council by Ordinance 1882 on November 25, 1991. The Central Los Gatos Redevelopment Project Area consists of 441 acres including the Central Business District, the Civic Center and the Historic Downtown residential neighborhoods. Figure I-I details the Project Area. The purpose of establishing the Redevelopment Plan was to provide a fmancing tool to assist the Town and its residents to repair damage from the Loma Prieta earthquake and complete seismic strengthening and safety programs to ensure the public safety and welfare. The Redevelopment Project was also intended to be a financing mechanism to assist in alleviating blighting conditions, revitalizing the downtown commercial area and reconstructing deteriorated infrastructure. All rehabilitation and development activities outlined in the Redevelopment Plan must conform to the Town's existing and future planning programs including the General Plan. The Redevelopment Plan identified categories of public infrastructure, commercial rehabilitation and housing improvement projects to be funded by the Agency, which are listed below: • Street reconstruction Alley improvements Improvements to the Downtown a Streetscape improvements a Loans for seismic strengthening a Loans/assistance for geologic investigations and structural analysis a Facade improvements a Parking facilities a Hazardous waste removal Improvements to community facilities a Structural analysis J The parts of the Implementation Plan that address the affordable hqusing requirements must be adopted every five years either in conjunction with the community'S housing element cycle or the implementation plan cycle. (Section 33490(a)(1)(A)) Los Gatos Redevelopment Agency 1-2 Five-Year Implementation Plan Central Los Gatos Redevelopment Project October 2004 o Seismic strengthening and repair • Public transit facilities • Assistance to increase and improve the supply of low and moderate income housing Table I-I provides a summary of the time and financial limits of the Redevelopment Plan for the Project Area. Table 1-1 Summary of Central Los Gatos Redevelopment Plan Time and Fiscal Limits Background Information Total Acres Time Limits Incurring Debt Plan Effectiveness (project Activities) TI CollectionJRepaymentofDebt Eminent Domain Financial Limits Tax Increment Ca Bond Limit Source: Town ofLos Gatos Redevelopment Agency. Central Los Gatos Project Area $250 million $52 million D. Agency Accomplishments, FY 1999/00 -FY 2003/04 The Agency first received tax increment revenues in FY 1992/93. The small amount of revenue received from FY 1992/93 through 1998/99 precluded the Agency from formally initiating any large scale redevelopment projects. The revenues received during this time period were predominately used to fund required administrative activities, planning activities, model capital improvements in the Downtown and interest payments on the start up loan from the Town. The Agency achieved several Non-Housing projects and activities in the Project Area during the last five-year Implementation Plan period, FY 1999/00 through 2003/04, including the following: Began to implement a Downtown Commercial Revitalization Plan, which included street improvements, parking reconfigurations, development of a Parking Management Program and renovation of the Town Plaza. • Implemented projects to reconstruct substandard alleys and deteriorated public improvements, facilities and utilities, including repair and reconstruction of the MassollTait storm drain. Petformed streetscape improvements along Santa Cruz Avenue. • Completed key components of the Parking Management Plan, including construction of the South Side Lot and Montebello Lot. • Implemented first phase of parking zones. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project 1-3 Five-Year Implementation Plan October 2004 Central Los Gatos Redevelopment Project Scale y {';;>-lJ:--f...,VIII 0' 100' 1500' 100Q" 1lS00' 􀁾􀁾􀁾􀀡􀀽􀀼 􀁾􀀻􀀿􀀢􀁦􀁾􀀴􀀡􀁬 Los Gatos Planning November 21,1994 DWG: K.J. Thornton During the last five-year Implementation Plan period, the Agency implemented several Housing projects and activities in the Project Area. All projects were targeted to very low income households. They included a 12-unit project on Miles Avenue and a one lll1it Habitat for Humanity project on Charles Street. The Agency also provided assistance to the Blossom Hill project, which is located outside the Project Area. The project provided one very low income senior housing unit. E. Five-Year Goals and Objectives The implementation plan provisions of the CRL require the Agency to establish goals and objectives for the Project Area fot the five-year planning period. The following major goals and objectives will be pursued by the Agency, which are the same as those for the overall Redevelopment Program: • The elimination ofblighting influences and the correction of environmental deficiencies in the Project Area, including among others, obsolete and aged building types, substandard alleys and inadequate or deteriorated public improvements, facilities and utilities. • The assembly ofland into parcels suitable for modem, integrated development with improved pedestrian and vehicular circulation in the Project Area. • The replanning, redesign and development of lll1developed areas which are stagnant or improperly utilized. • The provision of opportlll1ities for owner and tenant participation in the revitalization of their properties. • The strengthening of retail and other commercial flll1ctions in the downtown area. • The strengthening of the economic base of the Project Area and the communityby the installation of needed site improvements to stimulate new commercial/light industrial expansion, employment and economic growth. • The provision of adequate land for parking and open spaces. • The establishment and implementation ofperformance criteria to assure high site design standards and environmental quality and other deSign elements which provide unity and integrity to the entire Project. • The expansion and improvement improvement of the community's supply oflow and moderate income housing. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project 1-5 Five-Year Implementation Plan October 2004 •• II. Non-Housing Implementation Plan This section describes the five-year Non-Housing Redevelopment Program, including a summary ofthe project and activity descriptions, deficiencies to be conected, and estimated revenues and expenditures. As they are implemented, the projects and activities may be modifiedover time to better serve the purposes of redevelopment. The cost estimates are preliminary and subject to refinement as the Redevelopment Program planning and implementation proceed. Some of these projects and activities may not be completed within the next five years ofthe Redevelopment Program, and thus, related costs may not be incuned in the next five years. A. Redevelopment Program FY 2004/05 -FY200S/09 The Agency will undertake projects and activities in the Project Area over the next five years to alleviate blighting conditions and attain the Redevelopment Program goals and objectives. The projects and activities can be categorized into four basic program categories, as described below. 1. Downtown Commercial Revitalization Plan A goal of the Redevelopment Program for FY 2004/05 through FY 2008/09 is to continue to implement a Downtown Commercial Revitalization Plan. Projects and activities include the following: Construct street improvements in Downtown, including new sidewalks and bulb outs on Santa Cruz Avenue and Main Street. Reconfigure parking to provide additional parking spaces in the Downtown Core. Continue to implement the Parking Management Program to make better use of existing parking, identifynew parking opportunities and methods of financing new parking facilities. Implement a fayade grant program. 2. Public Improvements, Facilities and Utilities • The Agency will continue to repair or reconstruct the substandard alleys and damaged, inadequate or deteriorated public improvements, facilities and utilities in the Project Area through the following: Develop a list of capital projects, estimated cost and projected revenues for the Agency and present to Town Council to help establish priorities. Reconstruct parking lot surface on parking lots 1,2,5 and 6. Reconstruct deteriorated streets within the Project Area. • Beautify Main Street Bridge. Provide gateway projects at Highway 9 and North Santa Cruz Avenue. Provide gateway projects at Wood Road and South Santa Cruz Avenue. Pave Main Street. Provide alley improvements. Provide multi-use fountain at Highway 17 and Main Street Trail Head. Improve curbs, gutters and sidewalks. Underground utilities. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project II-I Five-Year Implementation Plan October 2004 • Make Americans with Disabilities Act (ADA) accessibility improvements. 3. Affordable Housing The Affordable Housing Program promotes residential development on vacant and lmderutilized sites in the Project Area. Through this program the Agency will increase and preserve housing affordable to velY low, low and moderate income households. Components of this program include assistance for the construction of affordable housing and a loan program to assist in the development of secondary dwelling units for velY low, low and moderate income households. Chapter III describes plmmed housing activities in more detail. 4. Agency Administration The Agency will continue to have various administration and operational requirements associated with implementing the above projects and activities. These will include program staff, planning functions and legal and other technical assistance. B. Linkage Between Proposed Redevelopment Program and Elimination of Blighting Influences An implementation plan must provide an explm1ation ofhow the goals, objectives, programs and expenditures for the five-year planning period will serve to eliminate blighting conditions in a project area. The five-year Redevelopment Program described above will continue the process of improving the Project Area and alleviating blighting conditions. Table II-Ion the following page provides a matrix smnmarizing the relationship between proposed goals, objectives, projects and activities and how they will eliminate blight. Section B.2 further describes how deficiencies will be corrected by the projects and activities proposed for the next five years. 1. Blighting Conditions in the Project Area a. Unsafe Buildings -Age, obsolescence, deterioration, faulty interior arrangement, seismic and exterior spacing The Project Area contains numerous public, commercial and residential buildings that do not meet current public safety codes due to lack of seismic reinforcement and age. A survey conducted in 1991 showed that 30 percent of the 1,200 buildings in the Project Area had significant deficiencies, and a minimum of 280 homes in the Project Area were constructed prior to 1900. In addition, areas exist within the Project Area that have poorly maintained commercial and residential buildings, some of which camlot be used and necessitate significant code enforcement oversight. b. Physically Obsolete Buildings/Lots -Lack of Parking The Central Business District, which forms the core of the Project Area, is primarily characterized by small lots under separate ownership. These small lots are of inadequate size to meet current retail standards. Further, the majority of businesses located in this area do not have adequate on-site parking. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project II-2 Five-Year Implementation Plan October 2004 Table II-I Linkage of Five-Year Programs and Activities With Elimination of Blight Los Gatos Redevelopment Agency Blighting Conditions Physically Depreciated or Deficient & Obsolete Deteriorated Stagnant Inadequate Deteriorated Buildings/and/or Property Values/Public Buildings Lack of Inadequate Economically Utilities Obsolete Improvements Program Categories and Activities Parking Buildings Downtown Commercial Revitalization Plan Construct street improvements in Downtown, including new sidewalks II II and bulb out on Santa Cruz Avenue and Main Street. Reconfigure parking to provide additional parking spaces in the II Downtown Core. __􀁾􀁯􀁮􀁴􀁩􀁮􀁵􀁥 to implement the Parking Management Program. II Implement a fayade grant program. II II })ublic Improvements, Facilities and Utilities Develop a list of capital projects, estimated costs and projected revenues for the Agency and present to Town Council to help establish priorities. II II II II II Reconstruct parking lot surface on parking lots 1,2,5 and 6. II II Reconstruct deteriorated streets within the Project Area. II Beautify Main Street Bridge. II Provide gateway projects at Highway 9 and North Santa Cruz Avenue. II Provide gateway projects at Wood Road and South Santa Cruz Avenue. II Pave Main Street. II II 􀁾􀀧􀁯􀁶􀁩􀁤􀁥 alley improvements. II Provide multi-use fountain at Highway 17 and Main Street Trail Head. II Improve curbs, gutters and sidewalks. II __lInderground utilities. II Make ADA accessibility improvements. II II Source: Los Gatos Redevelopment Agency, Seifel Consulting. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project II-3 Five-Year Implementation Plan October 2004 c. Deteriorated and/or Inadequate Utilities The 1989 Loma Prieta earthquake caused significant damage to streets, sidewalks, water lines and storm drains. The heaviest damage in the Town occurred in the Project Area. For example, the Almond Grove neighborhood requires substantial street reconstruction due to earthquake damage and age. The Project Area also contains many alleys which are inadequately paved and require drainage improvements to prevent flooding. In addition, the Project Area has facilities that do not comply with the ADA, creating unsafe conditions for physically challenged persons. The storm drains in the Project Area also require reconstruction to prevent flooding. d. Depreciated or Stagnant Property Values/Economically Obsolete Buildings/Lots The Project Area contains ilTegularly shaped lots with limited access. These lots prevent viable commercial or residential uses, thus stagnating property values and development opportunities e. Inadequate Public Improvements The Project Area contains a a significant amount of inadequate infrastructure resulting fi.·om deterioration, insufficient capacity, and earthquake damage. The deficiencies necessitate improvement and reconstruction ofstreets, sidewalks, storm drains, water lines, sewer lines, undergrounding utilities, electrical upgrades and conduit upgrades. Furthermore, the Main Street Bridge is in need of improvements. The Project Area also suffers from inadequate community facilities. For example, there is no performing arts center, and the library, police department and neighborhood center are too small to meet the needs of Town residents. Although progress has been made in the Project Area, it is clear that blighting conditions remain. Neither the private nor public sectors acting alone are able to surmount all of these conditions. A relatively high proportion ofboth residential and commercial buildings in the area need redevelopment attention and show evidence ofphysical deterioration. Further redevelopment activity continues to present the most realistic fwancing vehicle for removing remaining blighting conditions in the Project Area. 2. How the Agency's Proposed Goals, Objectives, Programs and Expenditures Will Eliminate Blighting Conditions The Agency's proposed five-year goals, objectives, programs and expenditures, as outlined in Chapter I, Section E and Chapter II, Sections A and D, will help eliminate blighting influences in the Project Area. The Downtown Commercial Revitalization Plan projects and activities remove existing impediments to the development and expansion ofDowntown commercial facilities. The projects and activities will improve the deteriorated conditions of streets, sidewalks and curbs in the Downtown, creating safer and more pleasant conditions for both vehicular and pedestrian traffic. The projects and activities will also address the CUlTent lack of parking through the implementation of the Parking Management Program. The beautification projects and activities will complement the private sector commercial rehabilitation of the Project Area by alleviating blighting conditions in areas that have suffered economic decline and demonstrating public sector cOlwnitment to overall revitalization. The ongoing improvements of public facilities and utilities will signal to the private sector the Town's commitment to improving the Project Area. These improvements will enhance the competitiveness of the businesses they serve. The public improvements will have a significant positive impact on the residents and businesses of the Project Area. This program makes evident the Town's continuing interest in making Los Gatos a better place to live, work and conduct business. It creates an environment where property Los Gatos Redevelopment Agency II-4 Five-Year Implementation Plan Central Los Gatos Redevelopment Project October 2004 owners, businesses and outside developers have the incentive to make and carry out long range plans. The Agency is committed to enhancing the economic vitality of the Project Area by identifying the needs of existing businesses and attracting new ones. These activities will assist in reversing economic decline. The expansion of the affordable housing program will allow the Agency to continue to provide increased affordable housing opportunities for Los Gatos residents through the assistance for newly constructed units and the provision of a loan program for secondary dwelling units. The Agency's Housing Fund will be utilized throughout the Project Area and the Town. Chapter III presents the Housing Program in more detail. c. Five-Year Implementation Plan Resources The Agency has two primary potential revenue sources: annual tax increment revenues and remaining debt issuance proceeds. The Agency also receives additional income from interest income. The FY 2004/05 starting fund balance equals $7.6 million of net tax increment and remaining debt issuance proceeds, and the total available resources for Non-Housing programs for the five-year period equal approximately $7.9 million. Agency resources available for Non-Housing projects and activities are summarized in Table II-2. 1. Debt Issuance Proceeds The Town issued a Certificate of Participation (COP) in 2002 in the amount of $10.7 million, all of which was earmarked for the Redevelopment Fund. No proceeds were earmarked for the Housing Fund. The remaining balance ofCOP proceeds will be available for Non-Housing programs for the FY 2004/05 through FY 2008/09 Implementation Plan period and no debt service on the 2002 COP is funded from the Agency's Housing Fund. 2. Annual Tax Increment Revenues Tax increment revenues generated in the Project Area during the five-year Implementation Plan period will be used for the payment of pass-through payments, Agency administration, Educational Revenue Augmentation Fund (ERAF) payments mandated to be made by the Agency to address the State budget crisis, debt service and Housing Fund obligations. 3. Other Agency Income The Agency receives additional revenues from interest income. Approximately $0.9 million in other Agency income is projected during the five-year Implementation Plan period. 4. Non-Agency Financial Resources Wherever possible, the Agency has been and will continue to leverage other funds in connection with its redevelopment efforts. The Agency has targeted local, state and federal funding sources to assist in financing eligible projects. As permitted by law, possible funding sources include government grants and assistance programs, as well as private sector sources. To a limited extent, the Town's development impact fees generated from new development may be a source of public infrastructure and facilities funding when feasible. The Agency will also pursue funds from federal programs including CDBG and HOME Funds, in addition to state and county funds. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Proj ect II-5 Five-Year Implementation Plan October 2004 Table II-2 Agency Revenue Available for Non-Housing Redevelopment Activities, FY 2004/05 -FY 2008/09 Los Gatos Redevelopment Agency 2 3 4 5 6 7 8 9 10 Net Tax Less: Less: Less: Less: Net Other Net Total Funds Increment Pass-through ERAF Housing Non-Housing Tax Agency Debt Available for Year Revenues Payments & Payments' Set-Aside Debt Increment Income' Non-Housing ToA ency" A enc Admin.b Obli ationsd Projects' Fund Ba]ance $7,615,000 throuah FY 2003/04 FY 2004/05 $4,43],000 $2,515,000 $303,000 $894,000 $],069,000 ($350,000) $]5],000 $0 ($199,000) FY2005106 $4,626,000 $2,616,000 $303,000 $934,000 $1,080,000 ($307,000) $150,000 $0 ($157,000) FY2006/07 $4,828,000 $2,721,000 $0 $975,000 $1,090,000 $42,000 $171,000 $0 $213,000 FY2007/08 $5,037,000 $2,829,000 $0 $1,017,000 $1,089,000 $102,000 $203,000 $0 $305,000 FY200S/09 $5,252,000 $3,147,000 $0 $1,060,000 $1,098,000 ($53,000) $209,000 $0 $156,000 Total $24,174,000 $13,828,000 $606,000 $4,SSO,000 $5,426,000 ($566,000) $S84,000 $0 $7,933,000 a. Figures equal the the amount remitted to the Agency, which includes the gross tax increment revenues and supplemental AV revenue (80% portion) less Section 33676 Base Year Adjustment Values, or 2% allocation, and County admin fee. Includes a revenue growth rate of4%. b. This figure includes Agency non-housing admin costs and pass through payments. c. Based on California Redevelopment Association estimated FY 2004/05 ERAF Redevelopment Agency deposit Estimates for FY 2005/06 nre currently not published, but are assumed to be the same as tlle prior year; d. Includes 1992 COP, 2002 COP and Town Loan interest payments. e. Includes interest income from RDA debt service and RDA capital projects accounts. f. Figures equal the sum ofnet tax increment, otller agency income and net debt issuance proceeds. Fund balance includes funds from RDA debt service and RDA capital projects accounts. Source: Los Gatos Redevelopment Agency, Urban Analytics, Seifel Consulting. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project Il-6 Five-Year Implementation Plan October 2004 D. Five-Year Implementation Plan Expenditures 1. Proposed Program Expenditures 􀁾 Five-Year Period The Agency has developed programs to implement its goals and objectives for the current five-year Implementation Plan period as described in Chapter I, Section E above. The estimated cost ofthe FY 2004/05 through FY 2008/09 program ofNon-Housing activities is approximately $7.9 million, as summarized in Table II-3. The $7.9 million in Non-Housing program costs over the five-year implementation period matches the estimated Agency resources for Non-Housing activities of approximately $7.9 million, as summarized in Table II-2. Thus, the Agency has no programmed surplus after undertaking its Non-Housing programs and activities over the next five years. 2. Proposed Programs and Expenditures -Project Life It is possible that some program activities proposed by the Agency for this Implementation Plan period may not necessarily occur as planned in the five-year period or may not occur at all. It is also possible that other programs not listed in this Implementation Plan may instead be pursued. Further, some of the activities to be undertaken beyond the five-year planning period of this Implementation Plan may actually take place within the five-year planning period if development needs or opportunities warrant undertaking the activities. The projects, activities and expenditures contained in this Implementation Plan are in part based on certain assumptions made by the Agency relating to revenues, ERAF payments, market conditions, community needs and priorities, and resident and developer interest. Consequently, should Agency assumptions not be realized or unforeseen circumstances arise, further mid-course modifications in programs and this Implementation Plan may be required. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project II-7 Five-Year Implementation Plan October 2004 Table 11-3 Projected Five Year Non-Housing Redevelopment Program Expenditures FY 2004/05 -FY 2008/09 Los Gatos Redevelopment Agency Proposed Agency Non-Housing Program Category and Project Description Expenditures FY 2004/05 -FY 2008/09" Downtown Commercial Revitalization Plan Constmct street improvements in Downtown, including new sidewalks and bulb out on Santa Cmz Avenue and Main Street. $1,500,000 Reconfigure parking to provide additional parking spaces in the Downtown Core. $50,000 Continue to implement the Parking Management Program. $500,000 Implement a fayade grant program. $10,000 Public Improvements, Facilities and Utilities Develop a list of capital projects, estimated costs and projected revenues for the Agency and present to Town Council to help establish priorities. $40,000 Reconstruct parking lot surface on parking lots 1, 2, 5 and 6. $500,000 Reconstmct deteriorated streets within the Proj ect Area. $1,000,000 Beautify Main Street Bridge. $100,000 Provide gateway projects at Highway 9 and North Santa Cruz Avenue.b $150,000 Provide gateway projects at Wood Road and South Santa Cruz Avenue. $495,000 Pave Main Street. $600,000 Provide alley improvements. $200,000 Provide multi-use fountain at Highway 17 and Main Street Trail Head. $10,000 Improve curbs, gutters and sidewalks. $750,000 UndergrOlmd utilities. $1,000,000 Make ADA accessibility improvements. $200,000 Subtotal $7,105,000 Unanticipated Opportunities (at approx. 12% of subtotal) $828,000 Total $7,933,000 a. These listed expenditures do not represent the complete fundmg for each of these proJects. The Agency will seek to leverage its resources with additional funding opportunities including local, state and federal grants and assistance programs, as well as private sector sources. b. The proposed expenditure for gateway projects at Highway 9 is predicated on securing grants to complete this project. Source: Town ofLos Gatos. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project 11-8 Five-Year Implementation Plan October 20 04III. Housing Component This chapter comprises the housing component of the Implementation Plan, summarizing the Agency's housing obligations pursuant to the legal requirements of the Cll and providing an overall framework for the Agency's Housing Program goals and expenditures. The Agency is guided by the Town's adopted and certified Housing Element of its General Plan. The Agency intends to implement all relevant goals, policies, strategies and programs from the Housing Element, as generally described in this chapter. This chapter is organized as follows: Section A presents an overview of the Agency's affordable housing responsibilities. Section B presents more detailed statutory requirements, including requirements for affordable housing production, replacement housing, and the Housing Program Requirement, Low and Moderate Income Housing Fund (Housing FlUld) revenues and expenditures. Section C includes the Housing Production Plan. Section D describes performance of the Replacement Housing Plan requirement. Section E details the five year Housing Fund status and deposits. Section F includes the Agency's five year Housing Program, annual expenditures, the Housing Fund assisted affordable housing production annual estimates, and expenditure targeting requirements. Section G describes the completion of housing obligations. Please note, Chapter I summarizes the Agency's overall accomplishments for the previous five-year Implementation Plan period (FY 1999/2000 through FY 2003/2004), including both the non-housing and housing accomplishments. Chapter III provides a more detailed description of housing program performance. A. Overview of Agency Affordable Housing Responsibilities This section presents an overview of the Agency's Cll obligations related to the provision of affordable housing. The housing portion of the Implementation Plan is required to set forth specific goals and objectives for the five-year Implementation Plan period (FY 2004/05 through FY 2008/09), present estimates of specific Housing Fund deposits, projects and expenditures planned for the five year implementation period, and explain how the stated goals, objectives, deposits, programs, projects and expenditures will produce affordable housing units to meet these obligations. The Cll requires an implementation plan to include the following affordable housing planning components: The Housing Production Plan, which includes the total number of housing units to be produced and the number of affordable housing units to be produced for two different time periods: For the ten year compliance period (FY 2004/05 through FY 2013/2014), and For the life of the Redevelopment Plan (through FY 2031/32). If a planned project will result in the destruction of existing affordable housing, identificationof proposed locations for replacement housing that the Agency would be required to produce. Amount available in the Housing Fund, estimates of aromal deposits into the Housing Fund during the five-year Implementation Plan period, and the Agency's plans for using the annual deposits to the Housing Fund. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project III-I Five-Year Implementation Plan October 2004 The Housing Program with estimates of the number of new, rehabilitated or price restricted affordable housing units to be assisted by the Housing Fund during each ofthe five years, and estimates of the expenditures ofmoneys from the Housing Fund during each of the five years. A description of how the Housing Program will implement the Housing Fund expenditure targeting and other requirements. B. Statutory Requirements for Housing This section summarizes the Agency's affordable housing requirements Lmder the CRL and provides backgr01md information and analysis regarding affordable housing needs and conditions in the Project Area and the overall community. Relevant section references to the CRL are included in parentheses. The major statutOly requirements for affordable housing imposed on redevelopment agencies by the CRL may be categorized generally as: Affordable Housing Production Requirement (Section 33413): Agencies must cause specified minimum percentages ofnew or substantially rehabilitated housing units in project areas subject to this requirement to be available to very low, low and moderate income households at a legally defined affordable housing cost. 1 Replacement Housing Requirement (Section 33413): Agencies must replace within four years housing units removed from the housing stock as a result ofredevelopment activities. Housing Fund Requirement (Sections 33334.2, 33334.4 and 33334.6): Agencies are required to deposit specified percentages of tax increment revenue for the provision of affordable housing into the Housing Fund. The CRL also imposes various limits on the use ofHousing Fund moneys. Housing Program (Section 33490(a)(2)(A)): Agencies are required to prepare a Housing Program with estimates of the number of affordable housing units to be assisted'during each ofthe five years, estimates ofannual expenditures and a description ofhow the Housing Program will implement expenditure requirements. The sections of the Housing Component that address Housing Fund expenditure requirements must be reviewed every five years in conjllllction with updating the Housing Element or preparing the next fiveyear Implementation Plan. The CRL requiJ:ements are described in greater detail in the following sections. 1. Affordable Housing Production Requirement Redevelopment agencies administering project areas created by redevelopment plans adopted on or after January 1,1976 and territory added to project areas by amendments adopted on or after January 1, 1976 must meet an affordable housing production requirement. Thus, this requirement applies to the Project Area. As part of an irnplementation plan, an agency must adopt the Housing Production Plan, a plan showing how the agency intends to meet its affordable housing production requirements. The plan must be consistent with the community's housing element and must cover the following: Production over a ten year compliance period (FY 2004/05 through FY 2013/14). Production through the life of the Redevelopment Plan (through FY 2031/32). I The CRL currently defines substantially rehabilitated units as all units substantially rehabilitated with Agency assistance. Substantial rehabilitation means rehabilitation, the value of which constitutes at least 25 percent of the after-rehabilitation value of the dwelling, inclusive ofland value. (33416(b)(2)(A)(iii)) Los Gatos Redevelopment Agency III-2 Central Los Gatos Redevelopment Project Five-Year Implementation Plan October 2004 The Housing Production Plan must include estimates of the number of residential units to be produced within project areas. It also must include the number of units available at an affordable housing cost to very low, low and moderate income households to be developed or substantially rehabilitated in order to meet the affordable housing obligation. (Section 33413) Units produced outside of a project area after January 1, 1994 COlmt one for two towards meeting an agency's affordable production obligation. (Section 33413(b)(2)(A)(ii» Refer to Section 3.a below for definitions of income categories and affordable housing costs. Additionally, the plan must include estimates of the number of units the agency itself will produce or provide assistance to produce during the time period of the plan, including the number of units available at an affordable housing cost to very low, low and moderate income households. Section C of this chapter contains the Agency's Housing Production Plan. a. Agency Developed Housing The CRL inclusionary housing obligation requires at least 30 percent of all new or substantially rehabilitated dwelling units developed directly by an agency to be available at affordable housing cost to persons and families of very low, low or moderate income. Ofthose units, at least 50 percent must be affordable to very low income households. The 50 percent requirement translates to 15 percent of the total number of units developed or rehabilitated by an agency (50 percent ono percent equals 15 percent). This requirement applies only to units developed by an agency and does not apply to units developed by housing developers pursuant to agreements with an agency. (Section 33413(b)(I» This production requirement would apply if the Agency develops units in the Project Area. b. Housing Not Developed by the Agency When new dwelling units are developed in a project area by public or private entities other than the agency or when housing is substantially rehabilitated in a project area by public or private entities with agency assistance, at least 15 percent of these units must be affordable to very low, low or moderate income households.2 The income definitions are included in Section 3.a. below. Ofthose units, at least 40 percent must be affordable to very low income households. This 40 percent requirement for very low income households translates to 6 percent of the total number of units (40 percent of 15 percent equals 6 percent). (Section 33413(b)(2» This affordable housing production requirement applies to the Project Area. c. Duration and Enforceability of Affordability Covenants As of January 1, 2002, rental units must be subject to affordability covenants of the longest feasible time, but not less than 55 years for rental units and 45 years for owner occupied units to meet the affordable housing production requirement.3 (Section 33413(c)(I» An agency may permit sales of owner occupied units prior to the expiration of the 45 year period for a sales price in excess of affordable cost pursuant to a program that that protects the agency's investment ofHousing Fund monies, including, but not limited to, a program that establishes a schedule of equity sharing that permits retention by the seller of a portion of the excess proceeds, based on the length of occupancy. The remainder of the excess proceeds of the sale must be allocated to the agency and deposited in the Housing Fund. Within three years from the sale of the units, the agency must expend funds to make affordable an equal number of units at the same income 2 Prior to 1994, the rehabilitation of any unit, whether substantial or not, triggered affordable housing production requirements. After 1993 and until January 1,2002, housing production requirements were triggered by (a) the substantial rehabilitation ofa multifamily residential project with three or more units regardless of whether an agency provided financial assistance and (b) the substantial rehabilitation of a one or two unit residential project if the project received Agency assistance. AB 637 and SB 701, effective January 1,2002, impose the affordable housing production requirement on substantial rehabilitation projects that receive agency assistance. 3 Prior to AB 637 and SB 701 in 2002, in order for units to count towards fulfilling affordable housing production requirements, units had to be subject to affordability covenants of at least the duration of the Redevelopment Plan's land use controls. Los Gatos Redevelopment Agency III-3 Five-Year Implementation Plan Central Los Gatos Redevelopment Project October 2004 level as the lU1its sold. Only the units originally assisted by the agency can COlmt towards the agency's affordable housing replacement and production obligations. (Section 33413(c)(2)) An agency must require the recording of affordability covenants or restrictions for each parcel unit with the office of the county recorder of covenants or restrictions. Covenants and resh'ictions must run with the land and are enforceable by the agency or community. (Section 33413(c)(3)) d. Agency Acquisition of Affordability Covenants To satisfy the affordable housing production requitements, an agency may purchase or otherwise acquire affordability covenants on existing multifamily housing units that are not presently available at affordable housing cost, or are affordable to households of low or very low incomes but are lmits that the agency finds, based upon substantial evidence after a public hearing, cannot reasonably be expected to remain affordable to the same group of persons or families. Affordable lU1its made available by an agency's acquisition oflong term affordability covenants may COllilt towards the agency's affordable housing obligation. The covenants must be for at least 55 years for rental units and 45 years for owner occupied units. However, no more than 50 percent of an agency's housing obligation can consist of units made available by the acquisition of long term affordability covenants, and not less than 50 percent of lmits made available by the acquisition of long term affotdability covenants shall be available at an affordable housing cost to, and occupied by, very low income households. (Sections 33413(b)(2)(B) and (C)) 2. Replacement Housing Requirement The replacement housing requirement applies to project areas established by redevelopment plans (or areas added by amendments) adopted on or after January 1, 1976, and merged project areas regardless of the date of establishment of the individual project areas subsequently merged. Thus, this requirement applies to the Project Area. When residential units sheltering very low, low and moderate income households are destroyed or removed, or are no longer affordable due to agency action or assistance, an agency must cause the replacement of the units within four years. Each replacement unit must include at least the same number of bedrooms as the units that were removed. The units may be replaced with fewer units if an equal or greater number ofbedrooms are provided. For example, four two bedroom units may be replaced with two four bedroom units. (Section 33413) At least thirty days prior to acquiring property or adopting an agreement that will lead to the destruction or removal of low and moderate income housing units, an agency must adopt by resolution a Replacement Housing Plan that generally describes the location, timing and method by which replacement housing will be provided. (Section 33413.5) Replacement tUlits may be located anywhere within the territorial jurisdiction of the agency.4 (Section 33413(a)) An agency may either construct replacement housing, or assist with the development ofreplacement housing through agreements with housing developers.5 a. Income and Affordability Requirements The basic income and affordability standards for replacement housing are the same as those for the affordable housing production requirement and for use of Housing Fund moneys, as described below in Section 3. The tUlits must be available at affordable housing cost to households of very low, low and moderate income. As of January 1,2002, the CRL requires 100 percent of replacement units to be 4 For city agencies, replacement units can be located anywhere within the city and for county agencies, replacement housing can be located anywhere within the unincorporated portion of the county. 5 Replacement housing units located inside a project area count towards the housing production requirement on a 1:1 basis. Replacement units located outside a project area count on a 1:2 basis. Los Gatos Redevelopment Agency IlI-4 Central Los Gatos Redevelopment Project Five-Year Implementation Plan October 2004 available at affordable housing cost to the same income level of households as the households displaced. For dwelling units destroyed or removed after September 1, 1989 and before January 1,2002, the CRL required that 75 percent ofthe replacement units be available at affordable housing cost to the same income level of households (very low, low or moderate income) as were displaced from the units removed or destroyed. (Section 33413(a» Replacement units do not have to match the tenure (rental versus ownership) or tenancy (age restricted or non-age restricted) of the units that were destroyed. b. Duration and Enforceability of Affordability Covenants The affordability duration and enforceability requirements for replacement housing are the same as those required for affordable housing production. (Section 33413(c» Refer to Subsection l.c. above for a description of the requirements. c. Priority Households An agency must give priority in renting or buying housing developed as part of a redevelopment project to households displaced by an agency regardless of whether the units are inside or outside of a project area. As of January 1,2002, AB 637 requires an agency to maintain a list of displaced households who are to be given priority. An agency may establish rules to detennine priority among households. The Agency does not anticipate that any of its current or planned redevelopment activities would require the relocation of households. However, if future redevelopment activities were to require relocation, the Agency would make every effort to minimize the extent of relocation in the Project Area. All affected households would be eligible for the Agency's relocation program. Furthermore, the Agency would meet its replacement housing obligations, as described above. 3. Housing Fund Requirement The CRL requires an agency to set aside in a separate Low and Moderate Income Housing Fund (the Housing Fund) at least 20 percent of all tax increment revenue generated from its project areas. The funds must be used for the purpose of increasing, improving and preserving the community's supply of affordable housing. Such housing must be available at affordable housing cost and occupied by households of very low, low or moderate income. (Sections 33334.2 and 33334.3) Accordingly, the Project Area contributes tax increment revenues to a Housing Fund. The Agency's deposits into the Housing Fund are described in Section E. The CRL imposes Housing Fund expenditure requirements based on the proportion of unmet need for housing affordable to households of very low, low and moderate incomes.6 (Section 33334.4(a» It also requires a minimum percentage of Housing Fund expenditures be spent on non-age restricted housing. (Section 33334.4) The CRL also places other limits on the use of Housing Fund moneys, as described below. Section F describes the Agency's compliance with meeting the expenditure requirements. a. Income Levels and Affordable Housing Cost Agencies are specifically required to expend their Housing Fund to assist very low, low and moderate income households, generally defined as:7 Very Low Income households do not exceed 50 percent of area median income, adjusted for family SIze. Low Income households do not exceed 80 percent of area median income, adjusted for family size. 6 As provided by AB 637 and SB 701. 7 The Health and Safety Code defines low and moderate income in Section 50093, low income in Section 50079.5, and very low income in Section 50 I 05. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project III-5 Five-Year Implementation Plan October 2004 • Moderate Income are from 80 percent up to 120 percent of area median income, adjusted for family size. Table III-I shows the maximmn income limits for each income level by household size, as published by the State of California Department of Housing and COlTI1mmity Development (HCD) utilizing income limits prepared by the U.S. Department of Housing and Urban Development (HUD) for Santa Clara County. Table 111-1 2004 Santa Clara County Maximum Incomes by Income Category and Household Size Los Gatos Redevelopment Agency Household 1 2 3 4 5 6 7 8 Size Very Low $37,150 $42,450 $47,750 $53,050 $57,300 $61,550 $65,800 $70,050 Income Low $59,400 $67,900 $76,400 $84,900 $91,650 $98,450 $105,250 $112,050 Income Median $73,850 $84,400 $94,950 $105,500 $113,950 $122,400 $130,800 $139,250 Income Source: State ofCahfoffila, Department ofRCD, Febmary 2004. Housing assisted by Housing Fund moneys must be 􀁡􀁶􀁡􀁩􀁬􀁡􀁢􀁬􀁾 to low and moderate income households at an affordable housing cost in accordance with the CRL.8 For housing assisted by Housing Fund moneys after January 1, 1991, the affordable housing cost definitions presented in Table 1lI-2 apply. For housing assisted by Housing Fund moneys prior to January 1, 1991, affordable housing cost is defined as rent or cost for rental or ownership housing that does not exceed 25 percent of the household's gross income. 8 CRL Section 50052.5 includes the definition of affordable housing cost. AB 637 added the words "occupied by" to all referellces in the CRL that refer to the requirement that housing units be "affordable to" low and moderate income households in order to clarify the existing law that the units required to be "available" at affordable housing cost to qualifying households are also required to be "occupied by" such households. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project III-6 Five-Year Implementation Plan October 2004 Table III-2 Affordable Housing Cost Los Gatos Redevelopment Agency Rental Housinga Ownership Housing Income % Income Spent % of Area % Income Spent % of Area Level on Housing Median Income on Housing Median Income Very Low 30% 50% 30% 50% Low 30% 60% 30% 70%b Moderate 30% 110% 35%c 110% .. a Rental housmg costs mclude rent and utIlIty allowance. Affordable housmg costs are adjusted by number of persons in household. bIf the gross income of the low income household is between 70% and 80% of Area Median Income, the Agency may optionally require that housing cost not exceed 30% ofthe actual gross income ofthe household. cBut not less than 28 percent of actual income. Source: CRL Section 50052.5. b. Targeting According to Income Need Housing Fund moneys must be used to assist housing for persons of very low and low income in at least the same proportion as the total number of housing units needed for each of these income groups in the community bears to the total number ofunits needed for very low, low, and moderate income groups within the community. The proportion is calculated based on the number of housing units needed for very low income and low income households divided by the total number of units needed for all three income levels within the community. (Section 33334.4) This income targeting obligation must be met over the ten year compliance period.9 However, the initial period for meeting this requirement will be January 1, 2002, the date AB 637 became effective, through the ten year compliance period ending in 2014. (Section 33490(a)(2)(A)(iii)) The Association ofBay Area Governments (ABAG) has determined the affordable housing need for the Town of Los Gatos in its regional fair share allocation for 1999 through 2006. Table III-3 shows the fair share allocation applicable to the Agency for housing affordable to persons at or below 120 percent of median income. 9 The Agency's first compliance period commenced with the adoption of the Agency's first Implementation Plan and extended for a ten year period through FY 2003/04, which is concurrent with the Agency's first two five-year Implementation Plan periods (July 1, 1994 through June 30, 2004). To the extent the Agency has affordable housing production deficits or surpluses from the first compliance period, such obligations must be taken into account in the Agency's current ten-year compliance period (July 1, 2004 through June 30, 2014). Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project III-7 Five-Year Implementation Plan October 2004 Table III-3 ABAG Regional Fair Share Allocations 1999-2006 Affordable Housing Need by Income Category Town of Los Gatos Income Group and Relation to Total Housing Expenditure Percentage County Median Income Units Needed Need by Income Levela Very Low (0-50%) 72 At least 35% Very Low and Low (0-80%) 107 At least 52% Modetate (81-120%) 97 No more than 48% Total 204 100% Source: ABAG RegIOnal Housmg Needs DetermmatlOns, Town of Los Gatos, March 15, 200l. aSee paragraph below for further explanations. As Table III-3 indicates, to supply its regional fair share ofhousing, the Agency is required to expend Housing Fund moneys in the following proportions: at least 35 percent for units affordable to very low income households, at least 52 percent for milts affordable to low and very low income households, and no more than 48 percent on housing affordable to moderate income households. The Agency is entitled to expend a disproportionate amount of the funds for very low income households, and to subtract a commensurate amount from the low and/or moderate income thresholds. Similarly, the Agency can provide a dispropOltionate amount offtmding for low income housing by reducing the amount of flmds allocated to housing affordable to moderate income households. But in no event can the expenditures on housing affordable to moderate income households exceed the threshold amount (48 percent). Under the CRL, an agency is allowed to reduce its income targeting requirement if other locally controlled funding is producing newly constructed housing for the targeted incomes, so long as such units are produced without any agency assistance and their continued affordability is ensured through long tenn affordability covenants (at least 45 years for owner occupied and 55 years for rental). An agency may adjust the income targeting proportion by subtracting from the need identified for each income category the number of units for persons of that income category that are newly constructed with other locally controlled government assistance over the duration of the implementation plan. However, an agency cannot subtract units developed pursuant to a replacement housing obligation under federal or state law. (Section 33334.4(a» Locally controlled means government assistance where the local government entity has discretion and authority to detennine the recipient and the amount of assistance. (Section 33334.4) Examples of such ftmding are CDBG, HOME Investment Partnership Program, and fees received by a city or town pursuant to a city or town authorized program. c. Targeting to Non-Age Restricted Housing In addition to the requirement outlined above, a defined minimum percentage ofHousing Fund moneys must be spent on housing available to all persons regardless of age. (Sectism 33334.4(b» This minimum is equal to the percentage of Los Gatos' population under age 65, as reported in the most recent U.S. Census. As shown in Table III-4, the 2000 Census indicates that 84.7 percent of the Town's population is under 65 years of age. Thus, the Agency must expend at least 84.7 percent of its funds on housing that does not impose age restrictions on residents. This requirement must be achieved over the period between January 1,2002 and the ten year compliance period ending in 2014. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project III-8 Five-Year Implementation Plan October 2004 Table 1II-4 Housing Fund Expenditures Requirement Non-Age Restricted Housing Town of Los Gatos Age Targeting Less than 65 65 and over Total Source: 2000 U.S. Census Population Expenditure Percentage 24,208 84.7% minimum expenditures 4,384 15.3% maximum expenditures 28,592 100% total expenditures d. Duration and Enforceability of Affordability Covenants The affordability duration and enforceability requirements for units assisted by Housing Fund moneys are the same as those required for affordable housing production and replacement housing. Refer to Section lc above for a description of the requirements. ((Sections 33334.3(£)(1) and (2)) e. CRL Restrictions on Use of Funds Housing Fund Leveraging The CRL prohibits agencies from using Housing Fund moneys to the extent that other reasonable means ofprivate or commercial fmancing are available. Whenever possible, Housing Fund moneys should leverage other funding resources and not be used when private or commercial funding is available. (Section 33334.30)) When more than 50 percent of an affordable housing development's funding is provided solely from the Housing Fund, an agency must make a fmding that no other private or commercial funding sources could be reasonably obtained. Use ofFunds outside ofProject Area An Agency can use funds outside a project area upon resolution by the agency and legislative body that the use can benefit the project. (Section 33334.2(g)) If an agency has more than one project area, it can spend housing funds from one project area in other areas, pursuant to a resolution by the agency and legislative body that such use of the funds will benefit the project. (Section 33334.2(i)) For merged project areas, Housing Fund moneys may be spent outside the merged areas upon resolution of the agency and the legislative body that the use will be ofbenefit to the projects. (Section 33487(b)) Other Limitations on Use of Housing Fund Moneys The CRL imposes limits on the use of Housing Fund moneys for the construction of infrastructure and public improvements. (Section 33334.2(e)(2)) The conditions under which Housing Fund moneys may be used to fund these costs are: The improvements must be a reasonable and fundamental component of the new construction or rehabilitation of income restricted housing units that are directly benefited by the improvements. Affordability controls of not less than 55 years must be imposed on rental units and affordability controls of not less than 45 years must be imposed on owner occupied units. Covenant and deed restrictions must be recorded with the redevelopment agency. lfthe newly constructed or rehabilitated affordable units are part of a larger project such as a mixed income or mixed use project, Housing Fund moneys may only be utilized for a pro rata share of the cost of the improvements benefiting the affordable housing. For mixed income residential developments, the maximum amount is based on the ratio of the number of affordable units to the Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project III-9 9 Five-Year Implementation Plan October 2004 total number of housing units. For mixed use projects, the maximum is based on the ratio of total cost of the affordable units to the total cost of the project. 4. Housing Program Requirement Agencies are required to prepare a Housing Program with estimates of the number of new, rehabilitated, or price restricted affordable housing units to be assisted during each ofthe five years. The Housing Program must also include estimates of expenditures of moneys from the Housing Fund during each of the five years. Finally, it must include a description of how it will implement the expenditure requirements over the ten year compliance period. Section F includes the Agency's Housing Program. 5. Requirement to Fulfill Housing Obligations CRL Section 33333.8, as amended by SB 211, requires that an agency comply with and fulfill its affordable housing responsibilities, including housing fimd, replacement housing, and affordable housing production responsibilities, prior to the expiration of the time limit on redevelopment plan effectiveness. Alternatively, a redevelopment plan may be extended lmtil the Agency's housing obligations are met. A redevelopment project cannot be telminated if an agency has not complied with its affordable housing obligations. The law further requires that for a Redevelopment Project that is within six years of reaching its limit on plan effectiveness, an implementation plan needs to address the ability of the agency to comply with its housing responsibilities. The affordable housing obligations to be fulfilled prior to the expiration ofplan effectiveness are: Make deposits to and expenditures from the Low and Moderate Income Housing Fund. Eliminate project deficits. Expend or transfer excess surplus fimds. Provide relocation assistance. Provide replacement housing. Provide inclusionary housing. The Agency's plan for fulfilling its obligations within its time limits is addressed further in Section G. C. Housing Production Plan This section constitutes the Housing Production Plan of the Agency's FY 2004/05 through FY 2008/09 Implementation Plan. It includes estimates of housing production in the Project Area and the Agency's strategy for meeting its affordable housing production obligation. The Agency has met, and expects to continue to meet, its housing production obligations. 1. Housing Production The Agency projects that approximately 165 housing units will be produced in the Project Area during the life ofthe Redevelopment Plan. For purposes ofthe Housing Production Plan, the number of units produced includes newly constructed units, as well as units substantially rehabilitated with Agency assistance. Table III-5 shows historical and projected housing production. a. Historical Production (through FY 2003/04) The Agency reports that 120 units have been produced in the Project Area through FY 2003/04. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project III-lO Five-Year Implementation Plan October 2004 b. Projected Housing Production The Agency has evaluated the potential for future housing production in the Project Area through the end of the Redevelopment Plan. Based on the Agency's analysis of the potential for new development on existing vacant residential parcels, the opportunity for substantial rehabilitation with Agency assistance, the possibility for federal and state funding, and the anticipated date of development, the Agency has projected the number of units likely to be produced in the Project Area over the next ten years and through the life of the Redevelopment Plan. Ten Year Production (FY 2004/05 through FY 2013114) During the next five years, the Agencyestimates 25 housing units would be produced in the Project Area. During the following five-year period from FY 2009/10 through FY 2013/14, the Agency estimates 10 housing units will be produced in the Project Area. Thus, a total of35 units are estimated to be produced in the next ten year compliance period.. Production over Life of Redevelopment Plan (through 2031/32) Based on historical production and an analysis of remaining developable residential land, the potential for substantial rehabilitation with Agency assistance, and other opportunities, the Agency projects that a total of 165 units could potentially be produced within the Project Area prior to the end ofthe Redevelopment Plan in 2031. Table III-5 summarizes the units projected to be produced through the end of the Redevelopment Plan. 2. Affordable Housing Production Obligation a. Historical Obligation (Through FY 2003/04) Through FY 2003/04, 120 housing units were produced in the Project Area, creating housing production obligations for 18 affordable units (15 percent), of which 8 units (40 percent of the affordable units) had to be affordable to very low income households.Table III-S Summary of Historical and Projected Housing Production in Project Area Los Gatos Redevelopment Agency Total Units Produced Year New Substantially Total Rehabilitateda Historical through FY 2003/04 120 0 120 FY 2004/05-2008/09 25 0 25 FY 2009/10-2013/14 10 0 10 FY 2014/15-End 10 0 10 Total Ten Year Compliance Period 35 0 35 (FY 2004/05-2013/14) Total over Life of Plan 165 0 165 a'Prior to 1994, the rehabilitation -substantial or not-of any residential unit, triggered the housing production requirement. (Refer to footnote 2 on page III-3.) Source: Los Gatos Redevelopment Agency, Los Gatos 2000-2004 Implementation Plan. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project III-ll Five-Year Implementation Plan October 2004 b. Obligation for Ten Year Compliance Period (FY 2004/05 through 2013/14) Based upon the forecast of35 housing units to be produced in the Project Area between FY 2004/05 and FY 2013/14, the Agency will have an obligation to ensure 5 units (15percent) are affordable to very low, low and moderate income households. Ofthese, 2 units (40 percent) must be available at affordable housing cost to very low income households. c. Obligation for the Life of Redevelopment Plan A total of 165 housing units are projected to be produced in the Project Area over the life of the Redevelopment Plan. Based upon these projections, the Agency will have an obligation to ensure 25 units (15 percent) are affordable to very low, low and moderate income households. Of these, 11 units (40 percent) must be available at affordable housing cost to very low income households. 3. Agency's Plan to Meet the Affordable Housing Production Obligation The Agency has supported, and plans to continue to support, the development of affordable housing both inside and outside its Project Area. The Agency has met, and plans to continue to meet, its obligation through Agency assistance for affordable housing development and substantial rehabilitation. Anticipated future projects will continue the Agency's compliance over the next ten years and through the remaining life of the Redevelopment Plan. The Agency will continue to provide assistance to units outside of the Project Area as well as units within the Project Area. The Agency itself has not directly developed any housing in the past, nor does it have plans to do so in the future. The Agency has found it more cost effective and administratively efficient to provide financial assistance, as necessary, to private developers (both for-profit and nonprofit) and homeowners to construct and rehabilitate affordable housing, than to act as a housing developer. Since it is riot directly developing housing, the Agency does not have an affordable housing production requirement with respect to Agency-developed housing. Thus, the relevant affordable housing production requirement is that 15 percent of units must be affordable to very low, low and moderate income households, and of those units, at least 40 percent must be affordable to low income households (6 percent ofthe total). a. Historical Affordable Housing Production (Through FY 2003/04) The Agency has met its affordable housing production requirements through FY 2063/04. To date, 55 affordable units have been produced, of which 27 are affordable to very low income households. 1O The Agency exceeded the requirements for the production of units affordable to very low income households and milts available to very low, low and moderate income households. Thus, the Agency will exceed its affordable housing production obligation for the first ten year compliance period, FY 1994/95 through FY 2003/04. b. Affordable Housing PrOduction Ten Year Compliance Period (FY 2004/05 -FY 2013/14) During the next five years (FY 2004/05 through FY 2008/09), the Agency estimates estimates that 20 housing units affordable to very low, low and moderate income households will be produced. Ofthese, 17 units will be affordable to very low income households. During the following five years (FY 2009/10 through FY 2013114), the Agency estimates 5 housing units affordable to very low, low and moderate income households will be produced. Ofthese, 3 lU1its will be affordable to very low income households. For the next ten year compliance period from FY 2004/05 through FY 2013/14, 25 units of affordable housing will be produced, ofwhich 20 will be affordable to very low income households. Thus, the ten year 10 Units produced outside Project Areas have been included on a one for two basis. Los Gatos Redevelopment Agency III-12 Central Los Gatos Redevelopment Project Five-Year Implementation Plan October 2004 housing obligation of5 units affordable to very low, low and moderate income households, of which 2 units must be affordable to households of very low income, will be exceeded. II c. Affordable Housing Production for the Life of Plans The Agency anticipates that from FY 2004/05 through the end of the Redevelopment Plan, 30 housing units affordable to very low, low and moderate income households will be produced and, of these, 23 will be affordable to very low income households.]2 Thus, given that the Agency has exceeded its obligations through FY 2003/04 and expects to exceed future obligations, it anticipates that it will exceed. its affordable housing production obligations over the life of the Redevelopment Plan. Table III-6 shows housing production, the affordable housing obligation, and the Agency's progress toward meeting the obligation. D. Replacement Housing The Agency did not have any replacement obligation during the last five-year Implementation Plan period and has no plans to destroy or remove any residential units. As the Agency does not expect the displacement of any households in the next ten years, it does not expect to incur an obligation to replace any units. In the event that the removal of housing were to become a necessity in the future, the Town and Agency would follow all state requirements for replacement housing and relocation, and make every effort to relocate persons as close as possible to their current place of residence. E. Housing Fund The primary funding source for the Agency's affordable housing activities during the five-year Implementation Plan period will be the 20 percent portion of annual tax increment revenue deposited by the Agency into its Housing Fund. A secondary funding source may be interest income, and CDBG, HO:ME and other funds. The history, status'and estimated future level of deposits into the Housing Fund are described below, and shown on Table III-7. 1. History and Status The Agency first deposited moneys into its Housing Fund in the first year it received tax increment, in FY 1992/93. In succeeding years, the Agency has made Housing Set-Aside deposits to the Housing Fund in an amount not less than 20percent of the cumulative tax increment revenue allocated to the Agency during that period. The Agency begins the five-year Implementation Plan period with an accumulated Housing Fund balance of approximately $3.5 million that is available for Housing projects and activities. 2. Deposits During the Implementation Plan Period The Agency plans to continue to deposit funds from its Project Area into the Housing Fund. Based on the Agency's projections, the Agency estimates that the total five-year deposit of tax increment revenue into the Housing Fund will be approximately $4.9 million between FY 2004/05 and FY 2008/09. The Agency estimates receiving additional income from interest income of approximately $400,000. After deducting debt obligations and housing administration costs, and including the beginning Housing Fund balance, the Agency will have approximately $7.4 million available for its Housing Program over the next five years. J1 Units produced outside Project Areas have been included on a one for two basis. 12 Units produced outside Project Areas have been included on a one for two basis. Los Gatos Redevelopment Agency III-13 Central Los Gatos Redevelopment Project Five-Year Implementation Plan October 2004 TableHI-6 Historical and Projected Housing Production and Affordable Requirement Los Gatos Redevelopment Agency Year Affordable Requirement' Affordable Production' Surplus (Deficit)d Total New Units' Ve Low Low and Moderate Total Affordable Ve Low Low and Moderate Total Affordable Ve Low Low and Moderate Total Affordable Historical FY 1991/92 -FY 2003/04 120 8 10 18 27 28 Subtotal (%) 100% 7% 8% 15% 23% 23% Projected Totals FY 2004/05 -FY 2013114' 35 2 3 5 20 5 FY 2014115 -End of Plan .ill 1 1 Z J 􀁾 Subtotal 45 3 4 7 23 7 Subtotal (%) 100% 7% 9% 16% 51% 16% Totalf 165 11 14 25 50 35 Total (percentaue) 100% 7% 9% 15% 30% 21% 55 46%25 67%85 52% Note: Percentages may not add exactly due to rounding. CRL affordable housing production requirements are rounded up to the nearest whole unit. a. Total units produced in the Project Area during tbe specified time period. b. Number of affordable units required based on units produced. Affordable housing production obligation for non-Agency developed housing requires 15% of total units to be available at affordable cost. Of those units, at least 40% must be affordable to very low income households (6% ofthe total units). Agency developed bousing bas bigher inclusionary requirements. However, the Agency has 􀁮􀁯􀁾 and does not anticipate, directly developing units. c. Number of units satisfying CRL affordable bousing production obligation. Affordable units produced outside Project Area counted on a one for two basis. d. Remaning affordable surplus or obligation at the end ofthe period. e. As required by CRL, total units over ten year compliance period (Section 33490(a)(2)(B». f. As required by the CRL, total units over the life of the Redevelopment Plan (Section 33490(a)(2)(B». Source: Los Gatos FY 1999100 -2003/04 Implementation Plan, Los Gatos Redevelopment Agency, Seifel Consulting. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project I1I-14 Five-Year Implementation Plan Octobcr 2004 Table 111-7 Agency Revenue Available for Affordable Housing Activities, FY 2004/05 -FY 2008/09 Los Gatos Redevelopment Agency 2 3 4 5 6 7 Less: Net Other Net Total Funds Fiscal Housing Agency Admin Housing Housing Debt Available for Year Set-Aside Costs' Set-Aside Income" Issuance Affordable Proceeds HousingC Fund Balance $3,483,000 through FY 2003/04 FY 2004/05 $894,000 $262,000 􀀤􀀶􀀳􀀲􀀬􀀰􀁾 $61,000 $0 􀀤􀀶􀀹􀀳􀀬􀀰􀀰􀁾 --FY 2005/06 $934,000 $270,000 $664,000 $6q,000 . $0 $724,000 -FY 2006/07 $975,000 $278,000 $697,000 $77,000 $0 $774,000 --FY 2007/08 $1,017,000 $286,000 $731,000 $101,000 $0 $832,000 -FY 2008/09 $1,060,000 $294,000 $766,000 $104,000 $0 $870,000 Total $4,880,000 $1,390,000 $3,490,000 $403,000 $0 $7,376,000 a. Agency admin costs are based on FY 2004/05 budget and will be reevaluated at the beginning of each budget cycle. b. Includes interest income. c. Figures equal the sum of net housing set aside, other agency income and net bond proceeds. Source: Town of Los Gatos Redevelopment Agency; Urban Analytics, Seifel Consulting. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project III-IS Five-Year Implementation Plan October 2004 As in the past, the Agency will seek to combine its Housing Fund revenue with other funding somces devoted to the provision of affordable housing to maximize the number of affordable units that can be developed or rehabilitated with the limited amount of available Housing Funds. These other funding somces include Community Development Block Grants ("CDBG") and HOME Investment Partnership funds from the u.s. Department of Housing and Urban Development ("HUD"), California Housing Finance Agency ("CHFA") and Department on-lousing and Community Development ("HCD") program funds at the state level, and low income housing tax credit equity funds. F. Housing Program Dming the five-year Implementation Plan period, the Agency will concentrate on housing activities that are most applicable to the Agency's goals and objectives. In developing its affordable Housing Program, the Agency has been guided by the goals and objectives of the Town's Housing Element of the General Plan. Through its affordable housing activities, the Agency will support and advance the overall Housing Element programs as well as contribute to the implementation of the policies and strategies identified in the Town's General Plan. 13 The Agency is committed to assisting the Town in achieving the goals and objectives and policies presented in the Housing Element including: To improve the choice of housing opportunities for senior citizens, families and singles and for all income groups through a variety of housing types and sizes, including a mixture of ownership and rental housing. To preserve existing moderately priced and historically significant housing. To eliminate racial discrimination, lack of disabled accessibility and all other forms of discrimination that prevent free choice in housing. To make infrastructure projects and residential and nomesidential developments be compatible with environmental quality and energy conservation. To reduce the homeless population. To provide housing affordable to people who work in the Town. 1. Housing Program Components The Agency recognizes the important role of the Housing Program and its activities in its overall Redevelopment Program. Consequently, the proposed Housing Program should be viewed not simply as the means of implementing the Agency's stated goals and objectives related to affordable housing, but as a key element in its overall blight alleviation revitalization efforts. The Agency's Housing Program has two primary affordable housing components. a. Initiate Affordable Housing Projects within the Project Area. The Agency will initiate affordable housing projects in the Project Area dming this five-year Implementation Plan period. The Agency will work with local non profit developers to produce affordable housing units to help address the needs of the community. The Agency is considering assisting the production of approximately 15 units affordable to very low income households from FY 2004/05 through FY 2008/09. b. Provide Zero Interest Loans for Secondary Dwelling Units in the Project Area. The Agency is plaill1ing to utilize a loan program dming this five-year Implementation Plan period. The Agency will provide zero interest loans for the production of secondary dwelling units in the Project Area. Secondary dwelling units, often called "in-law" units, typically refer to small one-bedroom or 13 The parts of the Implementation Plan that address the affordable housing requirements must be adopted every five years either in conjunction with the community's housing element cycle or the implementation plan cycle. (Section 33490(a)(l )(A)) Los Gatos Redevelopment Agency III-I 6 Five-Year Implementation Plan Central Los Gatos Redevelopment Project October 2004 studio units located in existing single-family homes or as detached units. Approximately one affordable unit per year will be assisted from FY 2004/05 through FY 2008/09, for a total offive units. 2. Proposed Housing Activities and Expenditures The Agency's Housing Fund revenues will be used in a flexible manner to respond to favorable· development opportunities. The Town Council and Agency have approved resolutions determining that the use of its Housing Fund moneys to assist housing activities located outside the Project Area is of benefit to the Project Area. Accordingly, Housing Fund moneys may be spent both inside and outside the Project Area. The type of financial assistance to be provided may include cost write-down and gap financing for projects utilizing federal and state funds, as well as loans for property acquisition, development renovation, on-and off-site improvements, acquisition ofeasements, predevelopment costs and development fees. In carrying out its purpose to preserve, improve and increase the affordable housing supply, the Agency may use the following methods: Acquire land or building sites. Improve land or building sites with on-site or off-site improvements. Donate land to private or public persons or entities. Finance insurance premiums pursuant to CRL Section 33136. Construct buildings or structures. Provide subsidies to, or for the benefit of, persons or families of very low, low, or moderate income. Develop plans, pay principal and interest on bonds, loans, advances or other indebtedness, or pay fmancing or carrying charges. Require the integration of affordable housing sites with sites developed for market rate housing. Assist the development of housing by developers. Acquisition of easements. The Agency plans to target its Housing Fund expenditures for specific income groups as required by the CRL. The Agency will make every effort to encourage the preservation and development of housing affordable to a variety ofincome levels combining various funding sources, and partnering and collaborating with other entities dedicated to the preservation and development of affordable housing, the Agency is confident it will be able to meet its affordable housing production obligations and expenditure requirements within the ten year compliance period, as well as over the life of the Redevelopment Plan. It should be noted, however, that several factors may result in expenditures and unit production for given years being either less than or greater than what is projected. These factors include fluctuations in the timing of the development process, the levels of Housing Fund revenue and other public assistance, the need to amass sufficient funds for an efficiently-sized development, and development opportunities. 3. Housing Fund Assisted Affordable Housing Production The Agency expects to take advantage of various opportunities as they are presented and to initiate actions as necessary, consistent with the CRL and the Town's Housing Element, to preserve and facilitate the development of housing affordable to households whose basic needs are not met by the private housing market. Table III-8 presents the housing units to be assisted by the Housing Fund over the five-year Implementation Plan period. In summary, from FY 2004/05 through FY 2008/09, the Agency plans to assist in the production of 17 housing units affordable to very low income households, and 3 housing units affordable to low income households, totaling 20 Agency-assisted affordable units. Los Gatos Redevelopment Agency III-I7 Five-Year Implementation Plan Central Los Gatos Redevelopment Project October 2004 TableIll-8 Affordable Housingto be Produced with Agency AssistancelHousing Fund Expenditures FY 2004/05 to FY 2008/09 Los Gatos Redevelopment Agency Affordable Housing Programh Initiate Affordable Housing Projects' Future roject(s) to be identified' Zero Interest Loan Program for Secondary Units' Future project(s) to be identified' Subtotal Unautici Total Total $3.900 000 a. The total number ofhousing units produced with Housing Fund assistance, as shown in this table, differs from the number of housing-units counted toward the affordable housing production requirement, as shown in Table ill-6. Table 111-6 includes affordable housing produced with and without Housing Fund assistance. It also includes affordable housing produced outside of the Project Area ana one for two basis. b. Housing Program costs do not include Agency administration costs. c. Since all expenditures are designed to assist very low income household units, the expenditures for each individual year of the 􀁦􀁩􀁶􀁥􀁾􀁹􀁥􀁡􀁲 period will be be for assistance to very low income household units. d. Projects are still in the planning stages. The number and income mix'ofunits is estimated by the Agency. Actual number of units and income mix may differ. e. \Vhile it is difficult to predict, efforts will be made to expend funds for the'two very low income units during two of the first four years of the five-year period, and for the three low income units in the other three years of the five-year period. Source: Los Gatos Redevelopment Agency. Seifel Consulting Inc. Los Gatos Redevelopment Agency Los Gatos Redevelopment Project 11I-18 Five-Year Implementation Plan October 2004 Please note the number of affordable housing units in Table III-8 does not correspond to the number of affordable housing units in Table III-6 for several reasons. Table III-6, which addresses housing production and affordable housing obligations and production, presents affordable housing units produced with and without Agency assistance. In addition, affordable units produced outside the Project Area are counted on a one for two basis for purposes of calculating the affordable housing produced to meet the affordable housing production obligation presented in Table III-6. Table III-8, which addresses Housing Fund expenditure requirements, includes affordable housing units produced with Agency assistance. These numbers include units located both inside and outside the Project Area. All units are counted on a one for one basis; in other words, the number of units located outside the Project Area has not been adjusted. 4. Estimated Housing Fund Expenditures FY 2004/05 through 2008/09 The Agency estimates expenditures for housing activities of approximately $4.6 million and Housing Fund resources of approximately $7.4 million during the next five years, leaving a surplus of approximately $2.8 million. Thus, projected tax increment revenues will be sufficient to cover the Agency's planned expenditures for housing projects and activities over the next five years. The Agency will continue to pursue additional affordable housing projects and activities with the remaining funds throughout the five-year Implementation Plan period. Table III-8 presents the Agency's estimated Housing Fund expenditures for the five years of the Implementation Plan period, in addition to the number of housing units to be assisted by the Housing Fund. The Agency plans to target its Housing Fund for specific income groups and non-age restricted housing as required by the eRL. The Agency will make every effort to encourage the development of housing affordable to a variety of income levels and needs. By combining various funding sources, and in partnership and collaboration with others dedicated to the development of affordable housing, the Agency is confident it will be able to meet its housing expenditure requirements. a. Housing Fund Income Targeting The Agency plans to target its Housing Fund moneys to specific income groups based on its fair share of regional housing needs as determined by ABAG. From January 1, 2002 through the end of the ten year compliance period in 2014, the Agency plans to target Housing Fund moneys in the following proportions: at least 35 percent on units affordable to very low income households, at least 52 percent on units affordable to low and very low income households, and no more than 48 percent on units to moderate income households. Since January 1,2002, Housing Fund moneys in the amount of approximately $558,000 have been spent to produce very low income housing as shown in Table III-9. Thus, the Agency exceeded its expenditure requirement threshold for the first two years of the current compliance period ending in 2014. The Agency will continue to monitor its Housing Fund expenditures in conformance with the relative percentages of need demonstrated by each income category, and anticipates that it will meet its very low, low and moderate income targeting requirements for the ten year compliance period ending in 2014. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project III-I 9 Five-Year Implementation Plan October 2004 Table III-9 Housing Fund Expenditures Targeting by Income Los Gatos Redevelopment Agency Income Targeting Expenditures 11112002-6/30/2004 Very Low $557,920 100% Low $0 0% Moderate $0 0% Total $557,920 100% Source: Los Gatos Redevelopment Agency b. Housing Fund Assistance for Non-Age Restricted Housing The Agency plans to target Housing Fund expenditures to provide affordable housing that is not restricted by age. Specifically, at least 84.7 percent of Housing Fund moneys is plalmed to be spent on non-age restricted housing over the period between January 1,2002 and the ten year compliance period ending in 2014. The Agency has expended a total of $307,920 on non-age restricted housing since January 1, 2002, as shown in Table III-IO. The Agency has expended $250,000 on age restricted housing. Although the percentage of Housing Funds spent to date on non-age restricted housing is not adequate to satisfy the CRL requirement regarding a minimum expenditure offunds on non-age restricted housing, the Agency anticipates expending the majority .0fHousing Fund moneys on non-age restricted housing during the five-year Implementation Plan period. The Agency will monitor Housing Fund expenditures in order to comply with this requirement by the end of the compliance period in 2014. Table III-10 Housing Fund Expenditures Targeting Non Age Restricted Housing Los Gatos Redevelopment Agency Age Targeting Expenditures 11112002-6/30/2004 Non-age restricted Housing $307,920 55% Age restricted Housing $250,000 45% Total $557,920 100% Source: Los Gatos Redevelopment Agency G. Fulfillment of Housing Obligations The time limit for plan effectiveness for the Project Area is 2031. Therefore, the FY 2024/25 through FY 2028/29 Implementation Plan, which will be within six years of the time limit, will address the ability of the Agency to comply with all of its affordable housing obligations under the CRL by the expiration of the effectiveness of the Redevelopment Plan. This FY 2004/05 through FY2008/09 Implementation Plan is not required to address this issue. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project III-20 Five-Year Implementation Plan October 2004