14 Staff Report - Affordable Housing Production Plan
:MEETINGDATE: 1111104 ITEM NO. DATE: TO: REDEVELOPMENT AGENCY AGENDA REPORT October 21, 2004 CHAIR AND J\1EJ\1BERS OF THE REDEVELOPJ\1ENT AGENCY 14 FROM: SUBJECT: EXECUTIVE DIRECTOR
CONSIDER AND ADOPT THE REDEVELOPJ\1ENT AGENCYFIVE YEAR IMPLEJ\1ENTATIONPLANAND AFFORDABLEHOUSINGPRODUCTION PLAN FOR THE CENTRAL LOS GATOS REDEVELOPJ\1ENT PROJECT FOR THE PERIOD OF JULY
1,2004 TO JUNE 30,2009. RECOMJ\1ENDATION: 1. Open and hold the public hearing and receive public testimony. 2. Close the public hearing. 3. j Adopt the attached resolution adopting the
Five Year Implementation Plan and Affordable Housing Production Plan for the Central Los Gatos Redevelopment Project for the period of July 1, 2004 to June 30,2009. BACKGROUND: The Los
Gatos Redevelopment Agency originally adopted its Implementation Plan in 1994. In 1997, the Plan was reviewed and amended to add public parking as one of the activities contemplated
in the plan. Beginning in 1999, the Agency was developing detailed capital improvement programs for the the Project Area, and these were adopted and used as the Agency's Implementation
Plan. In February 2000, the Agency approved a resolution adopting a new Redevelopment Affordable Housing Production Plan. This plan supplemented the CIP programs that were adopted in
1999, 2000 and 2001 by specifically addressing affordable housing issues. After discussions with Agency Legal Council, a single document was produced that combined the housing and non-housing
activities which was adopted by the Agency on March 4, 2002 to serve as the Agency's Implementation Plan for the remainder of the five-year period from July 1, 1999 to June 30,2004.
(Continued on Page 2) PREPARED BY: BUD N. LOR/i7P DEPUTY DIRECTOR Reviewed by: .Town Manager -Q!L:Attomey __Clerk 1!fe# Finance _-----_;;rCommumty Development
. Revised: 10/21/04 2:52 pm Refo=atted: 5/30/01
PAGE 2 REDEVELOPMENT AGENCY SUBJECT: FNE YEAR IMPLEMENTATION PLAN FOR CENTRAL LOS GATOS REDEVELOPMENT PROJECT AREA October 27,2004 DISCUSSION: Section 33490 of the California Community
Redevelopment Law (CRL) requires a redevelopment agency administering a redevelopment plan to prepare and adopt a five-year implementation plan for its project areas. The principal goal
of an implementation plan is to guide an agency in implementing its redevelopment program to help eliminate blighting influences. Additionally, the required 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. Generally, the law states that an Implementation Plan must contain the following: • Specific goals and objectives for the next five years for both housing
and non-housing activities; and • Specific projects and expenditures planned for the next five years for both housing and nonhousing activities; and • An explanation of how the goals,
objectives, programs and expenditures will assist in the elimination of blight and in meeting affordable housing obligations; and • Other information related to the provisions of affordable
housing. The Town hired Seifel Consulting to work with staff and prepare the required five-year implementation plan. Seifel was chosen due to their extensive background and expertise
in the preparation of implementation plans. Seifel has consulted on more than 90 redevelopment project areas in California and has prepared over 40 implementation plans. Additionally,
Jack Nagle of Goldfarb and Lipman (Redevelopment Agency legal counsel) has reviewed the proposed Implementation Plan to ensure that the statutory requirements of the CRLhave been met.
All of the recommendations from Mr. Nagle have been addressed and/or incorporated into the Implementation Plan, where appropriate. In reviewing the Implementation Plan, the Agency should
be aware that the proposed Implementation Plan is a guide, incorporating the goals, objectives and potential programs of an agency for the five-year implementation plan period (July
1, 2004 to June 30, 2009), while providing flexibility so the agency may adjust to changing circumstances and new opportunities. The Implementation Plan itself is not "cast in concrete",
but is intended to serve as a planning tool to look forward over a five-year period and contemplate potential activities. Additionally, the Implementation Plan does not "approve" projects.
The normal budgetary process and other approvals will require more detailed information, which will be returned to the Town Council and/or Agency for review. In general terms, the proposed
Implementation Plan reflects potential activities for the period from July 1, 2004 to June 30,2009. Available funding and Staff resources will determine the ability to fund a number
of the projects listed below. Staff will forward information to the Agency detailing funding for potential capital projects and affordable housing opportunities. This will be an
PAGE 3 REDEVELOP:rvIENT AGENCY SUBJECT: FNE YEAR IMPLE:rvIENTATION PLAN FOR CENTRAL LOS GATOS REDEVELOP:rvIENT PROJECT AREA October 27, 2004 opportunity for the Agency to establish more
specific priorities for projects over the next five years. For several projects, the proposed expenditures listed below are not intended to fully fund each of the projects, but are an
indication of the amount of RDA funds that could be allocated to each project. Staff will explore opportunities for other funding sources where appropriate. The following is a brief
summary of the major projects called out in the proposed Implementation Plan: • Construct street improvements Downtown, including new sidewalks and bulbouts on Santa Cruz Avenue and
Main Street -$1.5 million • Reconfigure parking to provide additional parking in the Downtown core -$50,000 • Continue to implement the Parking Management Program -$500,000 • Reconstruct
parking lot surface on parking lots 1,2,5, and 6 -$500,000 • Reconstruct deteriorated streets within the Project Area -$1 million • Beautify Main Street bridge -$100,000 • Provide gateway
projects at Highway 9 and North Santa Cruz Avenue -$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 • Improve Curbs, gutters, and sidewalks -$750,000 • Underground utilities -$1 million • Make ADA accessibility improvements -$200,000 • Administer zero interest
loan program for secondary dwelling units -$250,000 • Partner with a non-profit to construct approximately 15 very low, low or moderate income units -$3.9 million The Agency currently
has approximately $7.6 million in the Fund with the total available resources in the Non-Housing Fund increasing to a total of approximately $7.9 million by FY
2008-09. The available non-housing resources over the next five years are sufficient to undertake the projects listed above, if the projects required only the proposed expenditures listed
above. The Agency currently has approximately $3.5 million in the Affordable Housing Fund with an estimated $693,000 to be received for FY 2004-05 with increased amounts in future years.
The Agency will need to begin to spend down this fund in the next few years in order to be in compliance with Redevelopment Law. Consequently, the last project listed above would utilize
these funds as staff works with the Agency board to create affordable housing. Again, it should be noted that the potential projects listed above and the proposed expenditures are not
intended to fully fund each of these projects and Staff will explore opportunities for other funding sources where appropriate. Staff will work with the Agencyboard to establish priorities
and will seek to leverage its resources with additional funding opportunities including local, state and federal grant and assistance programs, as well as private sector sources. The
final opportunity to bond for projects will occur after 2008 and the next Five-Year Implementation Plan will address that opportunity and possible projects.
PAGE 4 REDEVELOPMENT AGENCY SUBJECT: FIVE YEAR IMPLEMENTATION PLAN FOR CENTRAL LOS GATOS REDEVELOPMENT PROJECT AREA October 27,2004 CONCLUSION: The Agency should adopt the attached resolution
(Attachment 1) approving the Five Year Implementation Plan and Affordable Housing Production Plan for the Central Los Gatos Redevelopment Project for the period of July 1, 2004 to June
30, 2009 (Attachment 2). As noted above, the proposed Implementation Plan is a guide, incorporating the goals, objectives and potential programs of the Agency for the five-year implementation
plan period (July 1, 2004 to June 30, 2009), while providing flexibility so the Agency may adjust to changing circumstances and new opportunities. Additionally, The Implementation Plan
itself is not "cast in concrete", but is intended to serve as a planning tool to look forward over a five-year period and contemplate potential activities. The Implementation Plan will
be reviewed 2-3 years after its adoption as requiredbyRedevelopment Law. Additional Additional review and/or amendments may be contemplated at other intervals, if the Town Council and/or
Agency would like to explore an opportunity for a project not currently listed in the Implementation Plan. FISCAL IMPACT: The Implementation Plan itself has no direct fiscal impact.
Projects will be brought forward for funding through the normal budgetary process. ENVIRONMENTAL IMPACT: The Implementation Plan is not a project as defined under CEQA, and no action
is required. ATTACHMENTS: 1. Resolution 2. Five Year Implementation Plan FY 2004/05 to FY 2008/09 N:\DEV\JOEL\RDA\RDA5YRImplementationPlan2004.wpd
RESOLUTION RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE TOWN OF LOS GATOS APPROVING AN IMPLEMENTATION PLAN AND AFFORDABLE HOUSING PRODUCTION PLAN FOR THE CENTRAL LOS GATOS REDEVELOPMENT
PROJECT AREA FOR THE PERIOD OF JULY 1, 2004 TO JUNE 30, 2009 WHEREAS, the Town Council of the Town of Los Gatos has approved and adopted the Redevelopment Plan for the Central Los Gatos
Project Area (the "Project Area"); and WHEREAS, pursuant to Health and Safety Code Section 33490, the Redevelopment Agency of the Town of Los Gatos (the "Agency") is required to conduct
a noticed public hearing to adopt, amend, and review an Implementation Plan for the Project Area (the "Implementation Plan"); and WHEREAS, Agency staff has prepared and presented to
the Agency a proposed Implementation Plan for the five year period covering July 1, 2004 to June 30, 2009, a copy of which is on file with the Agency Secretary; and WHEREAS, on the date
of this resolution, the Agency has conducted and concluded a duly noticed public hearing on the the Implementation Plan in accordance with Health and Safety Code Section 33490; and WHEREAS,
the Agency finds that the Implementation Plan, with any modifications as considered and approved in connection with the public hearing, constitutes a statement of the Agency's goals
and objectives for the Project Area, a summary of specific programs and proposed expenditures proposed to be made by the Agency for the redevelopment of the Project Area for the five
year period stated, and an explanation ofhow the goals and objectives, projects and expenditures will eliminate blight within the Project Area and implement the affordable housing regulations
of the Community Redevelopment Law; and Attachment 1
WHEREAS, pursuant to Health and Safety Code Section 33490, approval of an Implementation Plan does not constitute a project for purposes of the California Environmental Quality Act ("CEQA"),
and therefore no environmental documentation is required pursuant to CEQA.RESOLVED, that the Agency hereby approves and adopts the Implementation Plan for the Central Los Gatos Project
Area and orders that a copy of the Implementation Plan be maintained on file with the Agency Secretary. FURTHERRESOLVED, thatthe Agencyhereby authorized the AgencyExecutive Director
to take such other actions as are appropriate to effectuate the intent of the Implementation Plan. FURTHERRESOLVED THAT, that this Resolution shall take immediate effect from and after
its passage. PASSED AND ADOPTED at a regular meeting of the Town of Los Gatos Redevelopment Agency held on the __ day of , 2004, by the following vote: REDEVELOP:MENT AGENCY :MEMBERS:
AYES: NAYS: ABSENT: ABSTAIN: SIGNED: /s/RANDY ATTAWAY CHAIR OF THE REDEVELOP:MENT AGENCY TOWN OF LOS GATOS, CALIFORNIA 2
ATTEST: /s/Marian V. Cosgrove SECRETARY OF THE REDEVELOPMENT AGENCY TOWN OF LOS GATOS, CALIFORNIA N:\DEV\JOEL\RDA\RDARESOImplementationPlan2004.wpd 3
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 1-1 B. Interpretation 1-2 C. Description ofthe 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-l B. Linkage Between Proposed Redevelopment Program and Elimination of Blighting Influences II-2 C. Five-Year Implementation Plan Resources II-5 D. Five-Year
Implementation Plan Expendihlres II-7 III. Housing Component 111-1 A. Overview of Agency Affordable Housing Responsibilities III-I B. Statutory Requirements for Housing III-2 C. Housing
Production Plan III-lO D. Replacement Housing III-l 3 E. Housing Fund III-13 F. HousingProgranl III-l6 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 TabIe II-3 Proj ected Five-Year Non-Housing Redevelopment Program Expenditures FY 2004/05 -FY 2008/09 II-8 Table III-I 2004 Santa Clara County
Maximum Incomes by Income Category and Household Size III-6 Table IIT-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 Activities, FY 2004/04 -FY 2008/09 III-15 Table III-8 Housing to be Produced with Agency
AssistanceIHousing 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 California COlmmmity 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 ofthe 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 an agency for the five-year Implementation Plan period, while providing flexibility
so the agency may adjust to changing circumstances and new opportunities. 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 the CRL. The Affordable Housing Production Plan is included in Chapter ill, 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 of blight
and in meeting affordable housing obligations. • Other infonnation 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 ill 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 1-1 Five-Year Implementation Plan October 2004
B. Interpretation The Implementation Plan is intended to provide general guidance for the implementation of the Agency's programs and activities. The Agency expects that particular constraints
and opportunities, not fully predictable at this time, will arise in the course ohmdertaking 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 actually 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 IIL l 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 financing 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 o Streetscape improvements o Loans for seismic strengthening o Loans/assistance for
geologic investigations and structural analysis o Facade improvements o Parking facilities o Hazardous waste removal Improvements to community facilities o Structural analysis 1 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 Iwl provides a summary of the time
and financial limits of the Redevelopment Plan for the Project Area. Table 1"'1 Summary of Centt·al Los Gatos Redevelopment Plan Time and Fiscal Limits Background Information Total Acres
Date Limits Incurring Debt Plan Effecti:veness (pro'ect Activities) TI Collection/Repayment of Debt Eminent Domain Central Los Gatos Project Area 11/25/2011 11/25/2031 11/25/2041
12/25/2015 Fin,ancial Limits Tax Increment Cap Bond Limit Source: Town ofLos Gatos Redevelopment Agency. $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, plmming activities, model capital improvements
in the Downtown and interest payments on the stmi 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 Massol/Tait storm drain. • Performed streetscape improvements along Santa Cruz Avenue. • Completed key components
of the Parking Management Plan, including construction ofthe 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 I 0" 100' l5OO' 1000" 11500 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 unit 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 ofthe CRL
require the Agency to establish goals and objectives for the Project Area for the five-year plmming 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 conection 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 replmming, redesign and development of undeveloped areas which are stagnant
or improperly utilized. • The provision of opportunities for owner and tenant participation in the revitalization of their properties. • The strengthening of retail and other commercial
functions in the downtown area. • The strengthening of the economic base of the Project Area and the community by 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 of performance 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 ofthe 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 of the 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, identify new 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 proj ects 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 lll1derutilized
sites in the Project Area. Through this program the Agency will increase and preserve housing affordable to very 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 very low, low and moderate income households. Chapter
III describes plamled housing activities in more detail. 4. Agency Administration The Agency will continue to have various admillistration and operational requirements associated with
implementing the above projects and activities. These will include program staff, planning flll1ctions and legal and other technical assistance. B. Linkage Between Proposed Redevelopment
Program and Elimination of Blighting Influences An implementation plan must provide an explanation ofhow the goals, objectives, programs and expenditures for the five-year plamling period
will serve to eliminate blighting conditions in a project area. The five-year Redevelopment Program described above will continue the process of ilnproving the Project Area and alleviating
blighting conditions. Table II-Ion the following page provides a matrix summarizing the relationship between proposed goals, objectives, projects and activities and how they will elilninate
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
cormnercial 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 prilnarily characterized by small lots under separate ownership. These small lots are of inadequate size to meet
cuuent 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-YearImplementation 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 Cmz Avenue and Main
Street. Reconfigure parking to provide additional parking spaces in the II Downtown Core. Continue to implement the Parking Management Program. II Implement a fayade grant program. II
II 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. II II .. II III Reconstmct parking lot surface on parking lots 1,2, 5 and 6. II II Reconstruct deteriorated streets within the Project Area. .. Beautify Main Street Bridge.
.. Provide gateway projects at Highway 9 and North Santa Cmz Avenue. .. Provide gateway projects at Wood Road and South Santa Cmz Avenue. II Pave Main Street. II II Provide alley improvements.
II Provide multi-use fountain at Highway 17 and Main Street Trail Head. II Improve curbs, gutters and sidewalks. II Underground 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 occUlTed 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 irregularly 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 :5:om deterioration, insufficient
capacity, and earthquake damage. The deficiencies necessitate improvement and reconstruction of streets, 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 libraly, 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 financing 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 current lack of parking through the implementation of the Parking Management Program. The
beautification projects and activities will complement the private sector c0111111ercial rehabilitation of the Project Area by alleviating blighting conditions in areas that have suffered
economic decline and demonstrating public sector commitment 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 Central Los Gatos Redevelopment Project II-4 Five-Year Implementation Plan 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 ll-2. 1.
Debt Issuance Proceeds The Town issued a Certificate of Participation (COP) in 2002 in the amount of $10.7 million, all ofwhich was earmarked for the Redevelopment Fund. No proceeds
were eannarked for the Housing Fund. The remaining balance of COP 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 peJ.1llitted
by law, possiblefunding 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 ofpublic 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 Project II-5 Five-Year Implementation Plan October 2004
Table 11-2 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 & PaymentsC Set-Aside Debt Increment Incomec Non-Housing
To Agency' Agency Admin.b Obli ationsd Projects' Fund Balance $7,615,000 throuah FY 2003/04 FY 2004/05 $4,431,000 $2,515,000 $303,000 $894,000 $1,069,000 ($350,000) $151,000 $0 ($199,000)
FY2005106 $4,626,000 $2,616,000 $303,000 $934,000 $1,080,000 ($307,000) $150,000 $0 ($157,000) FY2006107 $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 FY 2008/09 $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 $4,880,000 $5,426,000 ($566,000) $884,000 $0 $7,933,000 a. Figures equal 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 are currently
not pUblished, but are assumed to be the same as the 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, other agency income and net debt issuance proceeds. Fund balance includes funds from RDAdebt service and
RDA capital projects accounts. Source: Los Gatos Redevelopment Agency, Urban Analytics, Seifel Consulting. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project II-6
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 of the 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 II-3 Projected 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 Reconstmct 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 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 Underground 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 funding 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 of Los Gatos. Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project IJ-8 Five-Year Implementation
Plan October 2004
III. 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
CRL 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 otganized
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 Fund) 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 CRL 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 CRL requires an implementation plan to include the following affordable housing planning components: The Housing Production Plan, which includes
the total number ofhousing 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 201312014), and For the life of the Redevelopment Plan (through FY 2031/32). If a planned proj ect will result in the destruction of existing affordable housing, identification
of proposed locations for replacement housing that the Agency would be required to produce. Amount available in the Housing Fund, estimates of ammal 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 dm-ing each of the five years,
and estimates of the expenditures ofmoneys from the Housing Fund during each of the five years. A description ofhow the Housing Program will implement the Housing Fund expenditm-e targeting
and other requirements. B. Statutory Requirements for Housing This section summarizes the Agency's affordable housing requirements tmder the CRL and provides background infonnation 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
statutory 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 vety low, low and
moderate income households at a legally defined affordable housing cost. 1 Replacement Housing Requirement (Section 33413): Agencies must replace within fom-years housing units removed
from the housing stock as a result of redevelopment 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 of Housing 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 dm-ing each ofthe five years, estimates of
annual 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 be reviewed every five years in conjunction with updating the Housing Element or preparing the next fiveyear Implementation Plan. The CRL requirements 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 irilplementation 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). 1 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. (334l6(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 count 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 ofunits 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 oBO 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)(l)) 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 protects the agency's investment of Housing Fund monies, including, but not limited to,
a program that establishes a schedule of equity sharing that perinits 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 ofunits 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 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
lUlits 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 restTictions
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
requirements, an agency may purchase or otherwise acquire affordability covenants on existing multifamily housillg units that are not presently available at affordable housing cost,
or are affordable to households of low or very low incomes but are units that the agency finds, based upon substantial evidence after a public hearing, cmmbt reasonably be expected to
remain affordable to the same group of persons or families. Affordable lUlits made available by an agency's acquisition oflong term affordability covenants may count 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 agellcy's housillg
obligation can consist of units made available by the acquisition of long term affordability covenants, and not less than 50 percent of units made available by the acquisition of long
term affordability 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 housmg 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
sheltermg very lbW, 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 SCime number ofbedrooms 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 ot adopting an agreement that will lead to the destruction or removal of low and moderate mcome housing units, an agency must adopt by resolution a Replacement Housing Plan
that generally describes the location, timmg and method by which replacement housmg will be provided. (Section 33413.5) Replacement units may be located anywhere within the territorial
jurisdiction of the agency.4 (Section 334l3(a)) An agency may either construct replacement housing, housing, or assist with the development of replacement housing through agreements
with housing deve1opers.5 a. Income and Mfordability Requirements The basic inco.me 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 units 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 III-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 of the 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) ofthe 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 1.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 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. H'ousing 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 unrnet 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 assist very low, low and moderate income households, generally defined as:? • 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. ? 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
50105. 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 maxitmlln itlcome limits for each income level by household
size, as published by the State of California Department of Housing and Community Development (HCD) utilizing income limits prepared by the U.S. Department of Housing and Urban Development
(HUD) for Santa Clara County. Table III-l 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 ofCahforma, Department ofRCD, Febmary 2004. Housitlg assisted by Housing Fund moneys must be available to low and moderate
income households at an affordable housing cost in accordance with the CRL.8 For housmg assisted by Housing Fund moneys after January 1, 1991, the affordable housing cost definitions
presented m Table 1lI-2 apply. For housing assisted by Housing Fund moneys prior to January 1, 1991, affordable housmg cost is defined as rent or cost for rental or ownership housmg
that does not exceed 25 percent of the hqusehold's gross mcome. 8 CRL Section 50052.5 includes the definition of affordable housing cost. AB 637 added the words "occupied by" to all
references 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 Housing" Ownershin Housing Income % Income Spent % of Area % Income Spent % of Area Level on Housing Median
Income on Housinl!: Median Income Very Low 30% 50% 30% 50% Low 30% 60% 30% 70%b Moderate 30% 110% 35%c 110% "Rental housmg costs mclude rent and .. utlhty allowance. Affordable housmg
costs are adjusted by number of persons in household. bIf the gross income ofthe 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 of the 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 of units needed for very low, low, and moderate income groups within the community. The proportion is calculated based
on the number ofholising units needed for very low income and low income households divided by the total number ofunits 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 IIJ,come Group and Relation to Total Housing Expenditure Percentage
County Median Income Units Needed Need by Income Level" Very Low (0-50%) 72 At least 35% Very Low and Low (0-80%) 107 At least 52% Moderate (81-120%) 97 No more than 48% Total 204 100%
Source: ABAG RegIOnal Housmg Needs DetermmatlOns, Town of Los Gatos, March 15, 200l. "See paragraph below for further explanations. As Table III-3 indicates, to supply its regional fair
share of housing, 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 units 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 disproportionate amount of funding 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 fup.ding 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 ensure.d through long term 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
over the duration of the implementation plan. However, an agency Calmot 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 determine the recipient and the amount of assistance.
(Section 33334.4) Examples of such funding 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 ofRousing Fund moneys must be spent on housing available to all persons regardless
of age. (Section 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 IIIA, the 2000
Census indicates that 84.7 percent ofthe 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
resh'ictions 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 expenditmes 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(f)(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 of private or commercial financing are available. Whenever possible, Housing Fund moneys should leverage other funding
resomces and not be used when private or commercial funding is available. (Section 33334.3G)) 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 somces could be reasonably obtained. Use of Funds outside of Project 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)) Ifan agency has more than one project area,
it can spend housing funds from one project area in other areas, pmsuant 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 of benefit
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. If the 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 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 proj ect. 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 of the
five years. The Housing Program must also include estimates of expenditures ofmoneys from the Housing Fund during each of the five years. Finally, it must include a description ofhow
it will implement the expendihrre requirements over the ten year compliance period. Section F includes the Agency's Housing Program. 5. Requirement to FulfillHollsing Obligations CRL
Section 33333.8, as amended by SB 211, requires that an agency comply with and fulfill its affordable housing responsibilities, including housing fund, 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 until the Agency's
housing obligations are met. A redevelopment project cmmot be terminated 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 of plan effectiveness are: Make deposits to and expenditures from the Low and Moderate Income Housing Fund.
Eliminate project deficits. Expend or transfer excess smplus funds. 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 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 pmposes of the 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-I 0 Five-Year Implementation Plan October
2004
b. Proj ected 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 2013/14) During the next five years, the Agency estimates 25 housing units would be produced in the Project
Area. During the following five-year period from FY 2009/1 0 through FY 2013/14, the Agency estimates 10 housing lUlits will be produced in the Project Area. Thus, a total of 35 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 lUlits could potentially
be produced within the Project Area prior to the end ofthe Redevelopment Plan in 2031. Table i11-5 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 1II-5 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 2013114,
the Agency will have an obligation to ensure 5 l.mits (15 percent) are affordable to very low, low and moderate income hOl.lseholds. Ofthese, 2 units (40 percent) must be available at
affordable housing cost to very low income houseil0lds. 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. Ofthese, 11 units (40 percent) must be available at affordable housi.ug cost to velY low income hous.eholds. 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 not 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 ofthose units,
at least 40 percent must be affordable to low income households (6 percent of the total). a. Historical Affordable Housing Production (Through FY 2003/04) The Agency has met its affordable
housing production requirements through FY 2003/04. To date, 55 affordable units have been produced, of which 27 are affordable to very low income households. 10 The Agency exceeded
the requirements for the production of units affordable to very low income households and mrits 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 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 2009110 through FY 2013114), the Agency estimates 5 housing
units affordable to velY low, low and moderate income households will be produced. Ofthese, 3 units will be affordable to very low income households. For the next ten year compliance
period from FY 2004/05 through FY 2013114, 25 lUlits of affordable housing will be produced, of which 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.ll 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 velY 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 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,
HOME 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 7.4 million available
for its Housing Program over the next five years. 11 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
Tablem-6 Historical and Projected Housing Production and Affordable Requirement Los Gatos Redevelopment Agency Year Affordable Requirementb Affordable Production' Surplus (Defieit)d
Total New Low and Total Low and Total Low and Total Units" Ve Low Moderate Affordable Ve Low Moderate Affordable Ve Low Moderate Affordable Historical FY 1991/92 -FY 2003/04 120 8 10
18 27 28 55 Subtotal (%) 100% 7% 8% 15% 23% 23% 46% Projected Totals FY 2004/05 -FY 2013114' 35 2 3 5 20 5 FY 2014/15 -End of Plan lQ. 1 1 2 l 2 Subtotal 45 3 4 7 23 7 30 Subtotal (%)
100% 7% 9% 16% 51% 16% 67% Totalr 165 11 14 25 50 35 85 Total (Percenta e) 100% 7% 9% 15% 30% 21% 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 tlle Project Area during the specified time period. b. Number of affordable units required based on
units produced. Affordable housing production obligation for non"Agency developed housingTequires 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% of the total units). Agency developed housing has higher inclusionary requirements. However, the Agency has not, and does not anticipate,
directly developing units. c. Number ofunits satisfying CRL affordable housing 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, totalnnits over ten year compliance period (Section 33490(a)(2)(B)). f. As required by the eRL,
total units over the life of the RedevelopmentPlan (Section 33490(a)(2)(B)). Sonrce: Los Gatos FY 1999100 -2003/04 Implementation Plan, Los Gatos Redevelopment Agency, SeifelConsulting.
Los Gatos Redevelopment Agency Central Los Gatos Redevelopment Project III-14 Five-Year Implementation Plan October 2004
Table III-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 Incomeb Issuance Affordable Proceeds HousingC Fund Balance $3,483,000 through FY 2003/04 FY 2004/05 $894,000
$262,000 $632,000 $61,000 $0 $693,000 FY 2005/06 $934,000 $270,000 $664,000 $60,000 $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 sources 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 sources include Community Development Block Grants ("CDBG") and HOME
Investment Partnership funds from the U.S. Department on-lousing and Urban Development ("HUD"), Califomia Housing Finance Agency ("CHFA") and Department of Housing and COlmnunity Development
("HCD") program funds at the state level, and low income housing tax credit equity funds. F. Housing Program During 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 Bousing Element programs as well as contribute
to the implementation of the policies and strategies identified in the Town's General Plml. 13 The Agency is cOltlmitted 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, fmnilies 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 nonresidential 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 ofthe Housing Progrmn and its activities in its overall Redevelopment Program. Consequently, the proposed Housing Progrmn should be
viewed not simply as the memlS 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 Progrmn 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 during 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 cOlTIllllmity. 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 plamling to utilize a loan program during this five-yem-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)(I )(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
of five 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 of easements,
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 financing 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 of income 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-17 Five-Year Imp1ementation Plan Central Los Gatos Redevelopment Project October 2004
Table III-8 Affordable Housing tobe Produced with Agency AssistancelHousing Fund Expenditures FY 2004/05 to FY 2008/09 Los Gatos Redevelopment Agency Affordable Housing Program" Initiate
Affordable Housing Projects' Future rojeet(s) to be identifiedd Zero Interest Loan Program for Secondary Units' Future ro· eet(s) to be identifiedd Total $3900,000 $4,150,000 $420,000
54,570,000 u. The total number ofhollsing 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 111-6. Table includes affordable housing produced with and without Housing Fund assistance. It also includes affordable housing
produced outside of the Project Area all a one for two basis. b. Housing Program costs do not include Agency administration costs. c. Since all expendihlres are designed to assist very
low income household units, the expenditures for each individu.al year of the five-year period period wiII be for assistance to very low-income household units. d. Projects ilre still
in the planning stages. The number and income mix of units 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 nVo very low income units during nvo of the first four years of the five-year 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 III-IS 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
plalmed 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 CRL. 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 IIl-9 Housing Fund Expenditures Targeting by Income Los Gatos Redevelopment Agency Income Targeting Expenditures 1/1/2002-6/30/2004 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 planned 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 restr'icted housing since January 1,2002, as shown in Table
IIIH 10. The Agency has expended $250,000 on age restricted housing. Although the percentage of Rousing Funds spent to date on non-age restricted housing is not adequate to satisfy the
CRL requirement regarding a minimum expenditure of funds annan-age restricted housing, the Agency anticipates expending the majority of Rousing Fund moneys on non-age restricted housing
during the five-year Implementation Plan period. The Agency will monitor Rousing Fund expenditures in order to comply with this requirement by the end of the compliance period in 2014.
Table IlI-lO Housing Fund Expenditures Targeting Non Age RestriCted Housing Los Gatos Redevelopment Agency Age Targeting Expenditures 1/1/2002-6/30/i004 Non-age restricted Housing $307,920
55% Age restricted Rousing $2S0iOUO 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