HomeMy WebLinkAbout2010-07-14 e-packetSo~T11 SAN A?
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AGENDA
REDEVELOPMENT AGENCY
CITY OF SOUTH SAN FRANCISCO
REGULAR MEETING
MUNICII'AL SERVICES BUILDING
COMMUNITY ROOM
WEDNESDAY, JULY 14, 2010
6:30 P.M.
PEOPLE OF SOUTH SAN FR~iNCISCO
You are invited to offer your suggestions. In order that you may know our method of conducting Agency
business, we proceed as follows:
The regular meeting of the Redevelopment Agency is held on the second Wednesday of each month at
6:30 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco,
California.
Public Comment: For those wishing to address the Board on any Agenda or non-Agendized item, please
complete a Speaker Card located at the entrance to the Community Room and submit it to the Clerk.
Please be sure to indicate the Agenda Item # you wish to address or the topic of your public comment.
California law prevents Redevelopment Agency from taking action on any item not on the Agenda
(except in emergency circumstances). Your question or problem may be referred to staff for investigation
andior action where appropriate or the matter may be placed on a future Agenda for more comprehensive
action or a report. When your name is called, please come to the podium, state your name and address for
the Minutes. COivlivlENTS ARE LIMITED TO THREE (3) MINUTES PER SPEAKER. Thank you for
your cooperation.
The Clerk vxrill read successively the items of business appearing on the Agenda. As she completes
reading an item, it will be ready for Board action.
MARK N. ADDIEGO
Chair
KEVIN MULLIN
Vice Chair
RICHARD A. GARBARINO
Boardmember
RICHARD BATTAGLIA
Investment Officer
BARRY M. NAGEL
Executive Director
PEDRO GONZALEZ
Boardmember
KARYL MATSUMOTO
Boardmember
KRISTA MARTINELLI-CARSON
Clerk
STEVEN T. MATTAS
Counsel
PLEASE SILENCE CELL PHONES AND PAGERS
I I1:ARING ASSISTANCE EQUIPMENT IS AVAILABLE FOR USE BY THE HEARING-IMPAIRED AT REDEVELOPMENT AGENCY MEETINGS
In accordance with California Government Code Section 54957.5, any writing or document that is a public record, relates to an opera
session agenda item, and is distributed less than 72 hours prior to a regular meeting will be made available for public inspection in the
City Clerk's Office located at Ciry Hall. If, however, the document or writing is not distributed until the regular meeting to which it
a~elates, then the document or writing will be made available to the public at the location of the meeting, as listed on this agenda. The
address of City Hall is 400 Crand Avenue, Soacth San Francisco, California 94080.
CALL TO ORDER
ROLL CALL
AGENDA REVIEW
PUBLIC COMMENTS
CONSENT CALENDAR
Motion to approve the minutes of June 9, 2010.
2. Motion to approve expense claims of July 14, 2010.
PUBLIC HEARING
3. Resolution adopting the South San Francisco Redevelopment Agency's Five-Year
Implementation Plan for the Downtown Central., Gateway, El Camino Corridor and US
Steel/Shearwater Project Areas for FY 2009/10 - 2013/14.
ADMINISTRATIVE BUSINESS
4. Resolution authorizing the expenditure of up to $300,000 from the Low -and Moderate -
Income Housing Fund to subsidize the purchase of Below Market Rate ("BMR") units at
City Lights, adopting findings in connection therewith, and aYproving an amendment to
the Agency's Low -and Moderate -Income Housing Fund Operating Budget.
ADJOU'~~TTMENT
REGULAR REDEVELOPMENT AGENCY MEETING NLY 14, 2010
AGENDA PAGE 2
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M~I~~JTE~ D~FTy;
REDEVELOPMENT AGENCY ~A AGENDA ITEM
CITY OF SOUTH SAN FRANCISCO
REGUZ,AR MEETING
i~1UNICIPAL SERVICES BUILDING
COMMUNITY ROOM
WEDNESDAY, JUNE 9, 2010
CALLED TO ORDER:
ROLL CALL:
AGENDA REVIEW
6:32 p.m.
Present: Boardmembers Garbarino, Gonzalez and
Matsumoto, Vice Chairman Mullin and
Criainnan Addiego.
Absent: None.
Ttem No. 4 was pealed from the Agenda.
PUBLIC COMMENTS
Nome.
CONSENT CALENDAR
1. Motion to approve the minutes of May 12, 2010 and May 26, 2010.
2. Motion to approve expense claims of June 9, 2010.
3. Resolution No. 8-2010 approving a contract and budget amendment with Dyett and
Bhatia to prepare a Program EIR for El Camino Real/Chestnut Area Plan Project in
the amount of $137,277.
Motion-Boardmember Gonzalez/Second-Boardmember Garbarino: to approve Consent
Calendar Items Nos. 1 and 2. Unanimously approved by voice vote.
Item 3: Boardmember Matsumoto noted the EIR was comparing thresholds today with
those of 1999 when the original General Plan was done.
1
Director of Economic and Community Development Van Duyn advised the base 1999
document was being used as a reference point and not for flexibility purposes. He
confirmed the 1999 EIR still had validity.
Motion- Boardmenlber Matsumoto/Second- Boardmember Garbarino: to approve
Resolution No. 8-2010. Unanimously approved by voice vote.
ADMINISTRANT IVE BUSINESS
4. Resolution approving an Owner Participation and Loan Agreement with Giffra
Enterprises, LLC, for the provision of a loan for the rehabilitation of the property
located at 226-2~8 Grand Avenue, in an amount not to exceed. $2.5 million, and
authorizing the execution of all documents in connection with such financing.
Item ~~ot heard.
CLOSED SESSION
5. Pursuant to Government CodE; Section 54956.8
Real property negotiation related to 166 Harbor Road SSF.
Company Negotiator: Caltrans
Agency Negotiator: Marty Van D~ayn.
Time entered Closed Session: 6:36 p.m.
Gpen Session resumed: 6:55 p.m.
Report out of Closed Session by Chairman Addiego: Direction given.
ADJOURNMENT
Being no further business, Chairman Addiego adjo~:rned the meeting at 6:56 p.m.
tted b~:
sta artinelli-parson, Cler
v of South San Francisco
Approved:
Mark N. Addiego, Chairman
City of South San Francisco
REGULAR REDEVELOPMENT AGENCY MEETING
MIN'tJTES
JUNE 9, 2010
PAGE 2
Listing of RDA Payments for Council Review
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c~LIFOR~~~
I certify that the payments shown on this payment register are
accurate and sufficient funds were available for payment.*
DATED; ~~-Gl -/p
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~=
INANCE DIRECTOR
*Note: Items below do not include payroll related payments
Checks:
Date
06/04/10
06/09/10
06/16/10
06/18/10
06/23/10
06/25/10
06/30/10
07/07/10
Electronic Payments:
Date
06/04/10
Total Payments $
Amount
5,418.75
7,596.23
674,466.44
1,000.00
2,712.05
5, 787.48
208.75
3,989.81
Amount To
48,402.08 Deutsche Bank
749,581.59
RDA AGENDA ITEM # 2
Description
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'~LIF RlylA p RDA A GENDA ITEM # 3
0
DATE: July 14, 2010
TO: Redevelopment Agf;ncy Board
FROM: Marty Van Duyn, Assistant Executive Director
SUBJECT: PUBLIC HEARING ON RESOLUTION ADOPTING THE SOUTH SAN
FRANCISCO REDEVELOPMENT AGENCY'S FIVE YEAR
IMPLEMENTATION PLAN FOR THE DOWNTOWN CENTRAL,
GATEWAY, EL CAMINO CORRIDOR AND US STEEL/SHEARWATER
PROJECT AREAS FOR FY 2009/10 - 2013/14
RECOMMENDATION
It is recommended that the Redevelopment Agency Board hold a public hearing and adopt
a resolution approving the proposed Implementation Plan for the Downtown Central, El
Camino Corridor, Gateway and U.S. SteeUShearwater project areas for fiscal years 2009/10
- 2013/14
BACKGROND/DISCUSSION
The proposed Implementation Plan transmitted with this Staff Report provides a guide for the
Agency in implementing its redevelopment programs over the next five years while providing
flexibility so it may adjust to changing circumstance and new opportunities. The Plan outlines
programs for revitalization, economic development and affordable housing activities during the
period from FY 2009/10 through FY 2013/14. It includes goals, activities, estimates of revenues
and expenditures, and a description of how the activities will alleviate blight and meet affordable
housing requirements.
By Law, 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 of how the goals, objectives, programs and expenditures will assist in the
elimination of blight and in meeting affordable housing obligations.
• Other information related to the provision of affordable housing.
Staff Report
Subject: RDA Five-Year Implementation Plan for FY 2009/10 - 2013/14
Page 2
The Plan is organized as follows:
• Chapter I provides an overview of the California Redevelopment Law (CRL) requirements,
a description of the Project Area and a summary of Agency accomplishments to date.
• Chapter II describes five-year goals and objectives for the Project Area, the activities and
related revenues and expenditures for the next five-years, and a description of the blighting
conditions and how they will be alleviated by the activities.
• Chapter III, the Housing Component, addresses affordable housing activities and
expenditures and charts the Agency's progress in meeting its affordable housing
obligations. Chapter III also includes the Affordable Housing Production Plan and a
description of actions the Agency will undertake to fulfill its affordable housing
obligations.
As required by CRL, a public notice appeared four times in the San Mateo Times announcing the
availability of the Plan and the public hearing on July 14, 2010. Notices were also posted in four
locations in each project area for four weeks prior to the public hearing.
FUNDING
The Five-Year Implementation Plan serves as guide for future activities and no funding is being
committed at this time. The Agency Board must individually approve the funding for any of the
proposed projects identified in the Plan that move forward.
CONCLUSION
It is recommended that the Redevelopment Agency Board hear public comments on the proposed
Five-Year Implementation Plan and adopt a Resolution adopting the Five-Year Implementation
Plan for the Downtown Central, El Camino Corridor, Gateway and U.S. Steel/Shearwater project
areas for fiscal years 2009/10 - 2013/14.
By: (/~-_ Approved• ~ '7
Marty Van Duyn a M. agel
Assistant Executive Director Executive Director
Attachment: Resolution
Five-Year Implementation Plan for FY 2009/10 - 2013/14
RESOLUTION NO.
REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO,
STATE OF CALIFORNIA
A RESOLUTION ADOPTING AFIVE-YEAR IMPLEMENTATION PLAN FOR
THE DOWNTOWN/CENTRAL, GATEWAY, EL CAMINO CORRIDOR AND
U.S. STEEL/SHEARWATER REDEVELOPMENT PROJECT AREAS FOR
FISCAL YEARS 2009/10 THROUGH 2013/14
WHEREAS, pursuant to California Community Redevelopment Law, each
redevelopment agency administering a redevelopment plan must adopt afive-year
implementation plan setting forth specific redevelopment agency goals and objectives,
outlining specific projects and expenditures for the coming five years, and explaining
how the stated goals, objectives, projects and expenditures will eliminate blight and meet
the affordable housing needs of the community;
WHEREAS, Agency staff have prepared a proposed Five-Year Implementation
Plan for the Downtown/Central Project Area, the El Camino Corridor Redevelopment
Project Area, the Gateway Redevelopment Project Area and the U.S. Steel/Shearwater
Redevelopment Project Area (collectively, the "Project Areas") for fiscal years 2009/10
through 2013/14 (the "Implementation Plan"};
WHEREAS, in accordance with Health and Safety Code Section 33490, the
adoption of an implementation plan does not constitute a project within the meaning of
the California Environmental Quality Act, and therefore, no environmental analysis was
required or prepared for the Implementation Plan; and
WHEREAS, following publication of notice as required by law, the Agency held
a public hearing on July 14, 2010 to receive public comment on the proposed
Implementation Plan.
NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the
City of South San Francisco that the Implementation Plan presented to the Agency Board
and on file with the City Clerk, is hereby accepted and adopted as the Implementation
Plan to be used by the Agency for fiscal years 2009/10 through 2013/14.
* * ~
I hereby certify that the foregoing Resolution was regularly introduced and
adopted by the Redevelopment Agency of the City of South San Francisco at a
meeting held on the day of , 2010 by the following vote:
1477044.1
AYES:
NOES:
ABSTAIN:
ABSENT:
ATTEST:
Agency Secretary
1477044. l
FINAL
Five-Year Implementation Plan
FY 2009/10-FY 2013/14
PREPARED FOR:
South San Francisco
Redevelopment Agency
JUNE 18, 2010
^
e~ e
CONSULTING INC.
221 Main Street
Suite 420
San Francisco CA
94105
415.618.0700
faz 415.618.0107
www.seifel.com
Table of Contents
South San Francisco Redevelopment Agency
Five-Year Implementation Plan FY 2009110-FY 2013114
I. Introduction ...................................................................................I-1
A. Organization .......................................................................................................................................... I-]
B. Interpretation .........................................................................................................................................1-1
C. Description of Project Areas ................................................................................................................1-2
D. Agency Accomplishments FY 2004/OS-FY 2008/09 .........................................................................1-5
E. Five-Year Goals and Objectives .......................................................................................................... I-5
II. Non-Housing Redevelopment Program ...................................... II-1
A. Non-Housing Redevelopment Program FY 2009/]0-FY 2013/14 ...................................................II-l
B. Linkage Between Program and Elimination of Blighting Influences ....................... .........................11-4
C. Five-Year Implementation Plan Revenues ............................................................... .........................II-6
III. Housing Component ...................................................... .............III-1
A. Overview of Affordable Housing and Agency Responsibilities ............................... ........................I11-]
B. Affordable Housing Program ..................................................................................... ........................III-2
C. Low and Moderate Income Housing Fund ................................................................ ........................111-4
D. Affordable Housing Production Plan ......................................................................... ........................Ill-9
E. Replacement Housing ................................................................................................. ..................... 111-l4
F. Completion of Housing Obligations ......................................................................... ...................... Ill-14
South San Francisco Redevelopment Agency i Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
Table of Contents
South San Francisco Redevelopment Agency
Five-Year Implementation Plan FY 2009110-FY 2013114
Table of Figures
Figure I-l Boundaries of the Merged Project Areas .......................................................................................... I-4
Table of Tables
Table 1-1 Time and Financial Limits .................................................................................................................. l-3
Table II-] Five-Year Implementation Plan Non-Housing Projects. Activities and
Projected Expenditures .........................................................................................................11-3
Table II-2 Projected Resources Available for Non-Housing Programs ........................................................ ...ll-8
Table III-l Projected Revenues Available for Housing Program FY 2009/]0 to FY 2013/]4
(Future Dollars) .................................................................................................................. ..Ill-6
Table II1-2 Affordable Housing to be Produced with Agency Assistance/Housing Fund
Expenditures FY 2009/l0 to FY 2013/14 (Future Dollars) ............................................. ..I11-7
Table III-3 Low and Moderate-income Housing Fund Expenditures Targeted by ]ncome
1 / 1 /2002-6/30/2014 ....................................................•------....-•------..........................-----..... ..111-8
Table Ill-4 Low and Moderate-Income Housing Fund Expenditures Targeted by Non-Age
Restricted Housing 1/l/2002-b/30/2014 .......................................................................... ..ill-8
Table Ill-5 Housing Production and Affordable Housing Obligation, Historical and Projected
Agency Developed ............................................................................................................ Ill-1 I
Table 111-6 Housing Production and Affordable Housing Obligation. Historical and Projected
Non-Agency Developed ................................................................................................... 111-I3
Table ]li-7 Replacement Housing Obligation ............................................................................................... 111-15
Appendices
Appendix A. CRL Requirements for Affordable Housing
Appendix B. Detailed Expenditure Tables
South San Francisco Redevelopment Agency ii Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
I. Introduction
This document is the Five-Year Implementation Plan for the Project Areas administered by the
South San Francisco Redevelopment Agency (Agency). The California Community
Redevelopment Law (CRL) requires each redevelopment agency administering a redevelopment
plan to prepare and adopt a Five Year Implementation Plan. A public hearing must be held on the
lmplementation Plan prior to its adoption by the Agency. The principal goal of this document is
to guide the Agency in implementing its redevelopment programs over the next five-years while
providing flexibility so it may adjust to changing circumstances and new opportunities. This
document outlines the proposed program for revitalization, economic development and affordable
housing activities of the Agency for the Implementation Plan period from FY 2009/10 through
FY 2013/] 4. It includes goals, activities, estimates of revenues and expenditures, and a
description of how the activities will alleviate blight and meet affordable housing requirements.
A. Organization
Generally, the lmplementation 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 of how the goals, objectives, programs and expenditures will assist in the
elimination of blight and in meeting affordable housing obligations.
• Other information related. to the provision of affordable housing.
Chapter 1 provides an overview of the CRL requirements, a description of the Project Area and a
summary of Agency accomplishments to date. Chapter I1 includes five-year goals and objectives
for the Project Area, the activities and related revenues and expenditures for the next five-years,
and a description of the blighting conditions and how they will be alleviated by the activities.
Chapter Ill, the Housing Component, addresses affordable housing activities and expenditures
and charts the Agency's progress in meeting its affordable housing obligations. Chapter ]ll also
includes the Affordable Housing Production Plan and a description of actions the Agency will
undertake to fulfill its affordable housing obligations. Appendix A presents detailed information
on the CRL affordable housing requirements and Appendix B contains detailed tables reporting
on Agency housing activities for reference.
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 over the next five-years. Therefore, the
Agency intends to use and interpret this lmplementation 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.
South San Francisco Redevelopment Agency I-1 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013114 June 2010
C. Description of Project Areas
The South San Francisco Redevelopment Agency manages the following four Project Areas:
• Downtown/Central (adopted duly l 2, 1989, amended to add area May 25, 2005)
• El Camino Corridor (adopted July 14, 1993, amended to add area June 28, 2000)
• Gateway (adopted June l 7, ] 981)
• Shearwater (adopted January 8, 1986)
Together these Project Areas consist of approximately 1,260 acres of commercial, industrial and
residential uses. Figure I-l shows boundaries of the Project Areas.
In 2005, the Project Areas were fiscally merged. This fiscal merger provides the flexibility to
combine revenues from the respective Project Areas to focus on the needs of a particular Project
Area, and to adjust that focus over time, so that the community's overall redevelopment needs
can be addressed in a more efficient and effective manner. Table I-1 summarizes the time and
fiscal limits of the Merged Project Areas.
South San Francisco Redevelopment Agency I-2 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009!10-FY 2013114 June 2010
Table I-1
Time and Financial Limits
South San Francisco Redevelopment Project Areas
Downtown/Central" El Camino Corridor` Gateway Shearwater
Added Area Original Area Added Area Original Area
Acres 97.1 558 79.6 175 176.2 174.5
Adopted 5/25/05 7/12/89 6/28/00 7/14/93 6/17/81 1/8/86
Eminent Domain 5125/17 5/25/2017' 6/28/12 5/25/2017' Expired Expired
Base Year FY 2004/05 FY 1988/89 FY 1999/00 FY 1992/93r FY 1980/81 FY 1985/86
Time Limit for Incurring Debt" 5/25/25 Repealed 6/28/20 Repealed Repealed Repealed
Time Limit for Project Activities" 5/25/35 7/12/30 6/28/31 7/14/34 6/17/22 1/8/27
Time Limit for Tax Increment Recei t'' 5/25/50 7/12/40 6/28/46 7/14/44 6/30/20'' 1/8/37
Fiscal Limit for Tax Increment Collection` None $796,000.000
Outstandin ]ndebtedness Limit` $15 000 000 $232 650 000
a 1n March 2004, the City repealed the original time limit for incurring debt in Gateway and Shearwater, as provided by SB 21 1. As a result. the obligation for statutory
pass through payments began in FY 2004/05 in Gateway and will begin in FY 2006/07 in Shearwater (for Gateway. the year following the year of repeal and,
in Shearwater, after the original time limit would have been reached) for taxing entities without contractual pass through payments. Actual payments will begin in
Gateway if and when assessed value levels exceed those in the year that the time limit was repealed. ]n the summer of 2009. the Agency repealed these limits for the original
Downtown/Central and EI Camino areas, pursuant to SB 211.
b 1n March 2004, the City extended the redevelopment activity and tax increment collection deadline by one year in all four Project Areas. as authorized by SB 1045.
Statutory pass through payments are not triggered by SB 1045 amendments.
c ]n May 2005, the City passed a fiscal merger that combined the fiscal limit for tax increment collection and the amount of outstanding indebtedness for the existing
Gateway. Shearwafer, EI Camino Corridor and Downtown/Central Project Areas. 'The definitions of these fiscal limits difTer in the individual redevelopment plans.
d. In the original Downtown/Central Project Area, statutory pass through payments will begin for taxing entities without contractual pass through payments in the fiscal year
following the fiscal year when the tax increment collection for the Project Area exceeds $248 million.
e ]n the EI Camino Corridor Original Project Area, statutory pass through payments will begin for affected taxing entities without contractual pass through payments in the
fiscal year following the fiscal year when the tax increment collection for both the original EI Camino Corridor Project Area and the EI Camino Corridor Added Area exceeds
$300 m Ilion.
f In May 2005. the City extended the timeframe for eminent domain in the Downtown/Central Original and EI Camino Corridor Original Protect Areas through June 24. 2017.
twelve vears from the effective date of the May 25, 2005 ordinance.
g Although the Downtown/Central Original and EI Camino Corridor Original plans were adopted in fiscal years 1989/90 and 1993/94 respectively, the plans became effective
before August 20th, qualifying them for the prior year base year and base year assessed value.
h Per agreement made with the County of San Mateo before the 2005 Amendment and Fiscal Merger, the Gateway Project Area will stop receiving tax increment at the
end of FY 2019/20_
Source: South San Francisco Redevelopment Agency, Meyers Nave Riback Silver R Wilson.
South San Francisco Redevelopment Agency I-3 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
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D. Agency Accomplishments FY 2004105-FY 2008109
This section describes the Agency's accomplishments over the previous five-years
(FY 2004/OS-FY 2008/09). The Agency undertook many projects and activities in the Project
Areas over the last Implementation Plan period. Agency efforts focused on the alleviation of
blight through the following activities:
• Infrastructure improvements to facilitate transportation and improve parking, along with
improvements to the City's water quality plan and the Bay Trail. These activities included
landscaping, street, circulation and public utility improvements:, parking development and
meter upgrades.
• Business attraction and retention activities to eliminate blighting conditions and provide
additional employment opportunities for South San Francisco residents. Projects and
programs included facade improvement, seismic retrofit and other building rehabilitation to
support new and existing businesses in the Project Areas.
• Construction and rehabilitation of public facilities such as parks and recreational facilities.
Agency projects created new parks and improved existing parks and supported the
development of the Historical Society Museum and other facilities.
• Redevelopment of existing vacant and underutilized land to eliminate blighting conditions
and provide South San Francisco residents with additional housing, employment and
recreational opportunities. Agency activities included property acquisition and disposition,
site preparation, and development assistance.
• Housing activities to provide new affordable housing opportunities for households at all
income levels and to improve the City's existing housing stock, including both rental housing
and affordable homeownership opportunities for low and moderate-income households. The
Agency's housing activities are discussed in detail in Chapter 111.
E. Five-Year Goals and Objectives
The CRL requires the Agency to establish goals and objectives for the Project Areas for the
five-year implementation Plan period. The following goals and objectives, intended to eliminate
physical and economic blighting conditions, were established when the existing Redevelopment
Plans were adopted and amended, and have been refined to reflect the Agency's specific goals
and objectives for the current five-year Implementation Plan period. These goals and objectives
will to guide the direction of future development within the Project Areas.
1. DowntownlCentral
The Agency will pursue the following goals and objectives in the Downtown/Central Project
Area:
Expand the retail component of the Downtown, provide diversification of offerings and
encourage major outlets as a draw to new shoppers.
Continue support of the various cultural and civic uses that provide major anchors, stressing
special events that draw new attendees.
South San Francisco Redevelopment Agency I-5 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013114 June 2010
• Promote the Downtown area as the financial hub of South San Francisco, encouraging
existing institutions to expand both physically and with related services.
• Eliminate blight through abatement or code compliance, reconstruction and assembly of
parcels into developable sites for desirable uses.
• Improve public parking, other public facilities, services, utility lines, lighting, public safety
and public transportation.
• Create a pedestrian environment to encourage multiple stops by visitors and more frequent
visits to the Downtown.
• Emphasize and highlight the existing architectural style and scale through rehabilitation and
renovation of historic structures and encouraging infill development that relates to existing
structures.
• Expand and upgrade the housing opportunities in the community to eliminate blight and
improve housing stock and standards for the present population.
• Promote new and continuing private sector investment within the Project Area to prevent the
loss of and to facilitate commercial and industrial activity.
• Achieve an environment reflecting a high level of concern for architectural, landscape, and
urban design and land use principles appropriate to attainment of the objectives of the
Redevelopment Plan.
• Retain and expand as many existing businesses as possible by means of redevelopment and
rehabilitation activities and by encouraging and assisting the cooperation and participation of
owners, businesses and public agencies in the revitalization of the Project Area.
• Provide for increased sales. business license, and other fees, taxes and revenues to the City of
South San Francisco.
• Encourage maximum participation of residents, business persons, property owners, and
community organizations in the redevelopment of the Project Area.
• Create and develop local job opportunities and preserve the area's existing employment base.
• Replan, redesign and develop areas that are stagnant or improperly used.
• Reduce the City's annual costs of providing local services to and within the Project Area.
• Promote Downtown's vitality and economic well being, and its presence as the City's center.
• Encourage development of Downtown as a mixed use activity center with retail and visitor-
oriented uses, business and personal services, government and professional offices, civic
uses, and a variety of residential types and densities.
• Provide incentives for infill development, intensification and reuse of currently underutilized
sites.
• Enhance linkages between Downtown and transit centers, and increase street connectivity
with the surrounding neighborhoods.
• Promote infill development and the intensification and reuse of underutilized sites.
• Provide new or improved parks, open spaces, and recreational facilities.
• Facilitate development of the Ferry Terminal at Oyster Point.
South San Francisco Redevelopment Agency I-6 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013!14 June 2010
2. EI Camino Corridor
The Agency will pursue the following major goals and objectives in the E1 Camino Corridor
Project Area:
• Eliminate and prevent the spread of blight, non-conforming uses and deterioration and
conserve, rehabilitate and redevelop the Project Area in accordance with the General Plan,
future specific plans, the Plan and local codes and ordinances.
• Achieve an environment reflecting a higher level of concern for architectural, landscape,
urban design and land use principles appropriate for attainment of the objectives of the Plan
and the General Plan.
• Control unplanned growth by guiding revitalization, rehabilitation and new development in
such fashion as to meet the needs of the Project, the City and its citizens.
• Reduce the City's annual costs for the' provision of local services to and within the
Project Area.
• Increase sales tax, business licenses and other fees, taxes and revenues for the City.
• Promote new and continuing private sector investment within the Project Area to prevent the
loss of and to facilitate the increase of commercial sales activity.
• Create and develop local job opportunities and preserve the area's existing employment base.
• Develop a spectrum of housing types affordable to various segments of the community in a
manner consistent with the Housing Element of the General Plan and the provisions of the
Redevelopment Law.
• Eliminate or ameliorate existing substandard conditions, including substandard vehicular
circulation and parking systems, inadequate infrastructure, insufficient off-street parking, and
other similar public deficiencies adversely affecting the Project Area.
• Present and create civic, cultural and educational facilities and amenities as catalysts for area
revitalization.
• Upgrade and expand recreational areas and open space.
• Assist in the revitalization of the Willow Gardens neighborhood.
• Develop more east-west crossings on E1 Camino Real that connect the City's neighborhoods,
and a continuous parallel street on the eastside to provide alternative travel routes.
• Develop El Camino Real as a boulevard that accommodates its role as a regional corridor but
with streetscape and development that provide identity to the street.
• Encourage development of a mix of uses, with pockets of concentrated activity that provide
focus and identity to the different parts of EI Camino Real.
• Develop the South San Francisco BART station area as a vital pedestrian-oriented center,
with an intensity and mix of uses that complement the area's new role as a regional center.
• Complete the E1 Camino Real/Chestnut Area Plan to help guide development of the area.
• Ensure the E1 Camino Real streetscape improvements are consistent with the Grand
Boulevard Initiative.
• Identify possible location for a public library that builds on synergies with other public uses.
• Explore opportunities to provide one major grocery store
• Increase opportunities for regional and neighborhood commercial uses
South San Francisco Redevelopment Agency I-7 Seitel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
• Extend Centennial Way along BART alignment and create east-west connections between
El Camino and the neighborhoods.
• Enhance pedestrian and Bicycle connectivity around existing facilities such as Kaiser, Orange
Memorial Park and the Municipal Services Building as well as new public facilities such as a
new library.
• Make improvements along Colma Creek Canal, including bank improvements, landscaping
and removal of chain link fencing.
3. Gateway
The Agency will pursue the following major goals and objectives in the Gateway Project Area:
• Eliminate blight and blighting influences.
• Replan, redesign and develop a large area suffering from obsolete plant facilities.
• Establish and implement performance criteria to assure high site design standards and
envirommental quality so as to provide unity and integrity to the entire site.
• Strengthen the economic base of the Project Area. and the community by installing public
improvements needed to stimulate new office/hotel and commercial development,
employment and economic growth.
4. Shearwater
The Agency will pursue the following major goals and objectives in the Shearwater Project Area:
• Eliminate and prevent blight and deterioration and redevelop the Project Area in accordance
with the General Plan, specific plans, the Redevelopment Plan and local codes and
ordinances.
• Eliminate or ameliorate certain environmental deficiencies, including substandard vehicular
circulation systems; disposal or handling of hazardous materials; inadequate water, sewer and
storm drainage systems; and other similar public improvements, facilities and utilities
deficiencies adversely affecting the Project Area.
• Achieve an enviromnent reflecting a high level of concern for architectural, open space,
landscape, and urban design and land use principles appropriate for the attaimnent of the
objectives of the Redevelopment Plan.
• Replan, redesign and develop undeveloped/vacant areas that are stagnant or improperly
utilized.
• Encourage investment by the private sector in the development and redevelopment of the
Project Area by eliminating impediments to such development and redevelopment.
• Create and develop local job opportunities to replace the Project Area's defunct employment
base.
• Provide for increased sales, business license, hotel occupancy and other fees, taxes and
revenues to the City.
• Establish a conference center to serve the needs of San Mateo County and the surrounding
areas.
South San Francisco Redevelopment Agency I-8 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
Create increased cultural and recreation opportunities for visitors as well as area residents,
particularly maximizing the potential offered by the waterfront. ;
South San Francisco Redevelopment Agency I-9 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
II.Non-Housing Redevelopment Program
This chapter describes the Agency's five-year Non-Housing Redevelopment Program of projects
and activities, deficiencies to be corrected, and estimated expenditures; linkages between the
Redevelopment Program and the elimination of blighting conditions; and five-year
Implementation Plan revenues available for the Non-Housing Program. As they are implemented,
the Agency's projects and activities may be modified to better serve the purposes of
redevelopment. The cost estimates are preliminary and subject to refinement as redevelopment
planning and implementation proceed. Moreover, some of these projects and activities may not be
completed within the next five-years, and thus, related costs may not be incurred during the
implementation Plan period.
A. Non-Housing Redevelopment Program FY 2009110-FY 2013114
The Agency will undertake projects and activities in the Project Areas over the next five-years to
alleviate blighting conditions and attain the Redevelopment Program goals and objectives. These
projects and activities can be categorized into five basic program categories. Table 11-1 lists
specific projects and activities along with projected expenditures planned for the Implementation
Plan period (FY 2009/l0-FY 2013/]4).
The nature and scope of the projects, activities and expenditures have been shaped primarily by
Agency goals and objectives for the Project Areas, available revenues for funding projects and
activities, and blighting factors to be eliminated. The projected expenditures on Agency
non-housing projects and activities included in Table II-] represent an estimate based on
reasonable assumptions regarding potential tax increment revenues and other resources available
to the Agency over the next five-years.
1. Public Infrastructure, Circulation and Parking
Public infrastructure, circulation and parking projects and activities will involve the construction
and installation of public i~nprove~nents to upgrade the existing aged and deteriorated
infrastructure systems and support private sector development efforts.
Projects to improve the public infrastructure in the Project Areas may include improvements to
transportation, circulation, streets, parking., gateways, public transportation facilities, sewer and
water systems, utilities and parks. The Agency will assist in funding the construction of new and
rehabilitated public facilities within or serving the Project Areas. Projects are intended to improve
circulation by separating local and residential traffic from interurban and commercial traffic,
facilitate pedestrian access, provide visual linkages and a unified look for the community, provide
for a broader range of transportation options and stimulate the growth of existing and new
businesses to reduce stagnant economic conditions.
This program category will serve all of the Project Areas.
Public Facilities
Public facility i~nprove~nents will support the construction, rehabilitation and improvement of
community facilities; the redesign and improvement of sidewalks and lanes; and improved
South San Francisco Redevelopment Agency II-1 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009110-FY 2013114 June 2010
accessibility and circulation. Activities include streetscape improvements to Grand Avenue, the
construction of the CalTrain plaza and other pedestrian plazas, planning for a new public library,
creation of infill parks in the Downtown/Central Area, support for the Harbor District and
improvements to maritime facilities, development of new parks, and reconfiguration of
landscaping and playfields to meet the current needs of residents.
Activities will mostly be undertaken in the Downtown/Central and E1 Camino Corridor
Project Areas.
Economic Development
The goal of this program is to develop incentives that address specific needs of existing
businesses and enhance the City's ability to attract new businesses. One component of this
program involves working with existing businesses that are seen as assets to the City of South
San Francisco in order to find ways of enhancing their opportunities.
The projects and activities will be designed to promote economic development in the Project
Areas and include the following: continued support of Downtown businesses through property
improvement loans, Agency development of new housing in the Downtown/Central Project Area,
support for mixed-use development in the Downtown/Central and E1 Camino Corridor Project
Areas, and support for hotel and retail development at Oyster Point.
Activities in this program category will be focused primarily in the Downtown/Central and
El Camino Corridor Project Areas.
4. Property Acquisition, Demolition and Site Preparation
This program will provide funding and other assistance to aid in property acquisition, demolition
and site preparation and will be utilized in conjunction with the commercial/industrial attraction
and retention activities.
Major land improvement activities will include the Chestnut Avenue/CalWater site, lands
acquired from the PUC in the El Camino Corridor, scattered site acquisitions in the
Downtown/Central Project Area, and landfill remediation activities near the Oyster Point Marina.
The program category will be utilized primarily in the Downtown/Central and E1 Camino
Corridor Project Areas.
5. Affordable Housing Program
The Housing Program promotes residential and mixed-use development on vacant and
underutilized sites. Through this program the Agency will increase and preserve the low and
moderate-income housing stock. Components of this program include assistance for the
construction of new rental and ownership units, loans and grants for rehabilitation, and first-time
homebuyer assistance. This program will be utilized in all Project Areas except Gateway and
Shearwater given their non-residential land use profile, as well as outside the Project Areas.
Chapter III describes planned housing activities in more detail.
South San Francisco Redevelopment Agency II-2 Seitel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
6. Agency Administration
The Agency will continue to have various administration and operational requirements associated
with carrying out the above projects and activities. These will include program staff, panning
functions and legal and other technical assistance. The Agency is currently working with a team
of consultants to evaluate the necessity and feasibility of redevelopment plan amendments to
enhance the Agency's resources and bonding capacity in order to fulfill its blight elimination
objectives.
Table II-1
Five-Year Implementation Plan Non-Housing Projects, Activities and Projected
Expenditures
FY 2009110-FY 2013114 (Future Dollars)
Pro'ect and Activities Projected
Ez enditures
Public Infrastructure Circulation and Parkin`
Miller Avenue Parkin Gara e $ l0 000 000
Oak Avenue Extension $ 6 000 000
Gatewa Infrastructure Im rovements $ 1 250 000
Shearwater Infrastructure lm rovements $ 1 250 000
Fourth Lane Im rovements $ 2 000 000
O ster Point Phase 1 Im rovements $ 17 481 000
O ster Point Phase 2 Im rovements $ ] 3.514 000
Public Facilities
Train Station Site Develo ment Assistance $ 500 000
CalTrain Pedestrian Plaza/Station $ 5 000 000
Oran e Avenue Park Ex ansion $ 4 000 000
Main Libra Plannin and Predevelo ment $ 1 000 000
Downtown Park Develo ment $ 2 000 000
Grand Boulevard Initiative $ 1 250 000
Assistance to Harbor District $ 3 500 000
:Economic Develo went
418 Linden Avenue Housin Develo ment $ 25 000 000
Downtown Revitalization Pro ert lm rovement Loans $ 2,000 000
Grand Avenue Mixed-Use Develo ment $ 10 000 000
Baden Avenue Develo ment $ 5 000 000
Su ort for O ster Point Hotel/Retail Develo ment $ 5 000 000
Pro a Ac uisition Demolition and,SiitePre aration
Train Station Site Ac uisition and Cleanu $ 2 000 000
Grand Avenue Site Ac uisition $ 2 300 000
Linden Avenue Site Ac uisition $ 1 500 000
Chestnut Avenue/CalWater Site Ac uistion $ 10 000 000
SF PUC Site Infrastructure Develo ment $ 14,500 000
Downtown Land Ac uisition $ 5 000 000
El Camino/PUC Housin Site Ac uistion $ 4 000 000
Total Estimated Ez enditures $ 155 045 000
Note: Amounts rounded to nearest $1,000.
Source: South San Francisco Redevelopment Agency.
South San Francisco Redevelopment Agency II-3 Seitel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
B. Linkage Between Program and Elimination of Blighting
Influences
The CRL requires that the Implementation Plan provide an explanation of how the goals,
objectives, programs and expenditures for the next five-years will serve to eliminate blight in a
project area. The five-year Redevelopment Program will continue the process of improving the
Project Areas and alleviating blighting conditions. This section describes how deficiencies will be
corrected by the projects and activities proposed for the next five-years.
1. Blighting Conditions in the Project Areas
The following sections summarize the blighting conditions remaining in each Project Area.
Although progress has been made in many of the Project Areas, blighting conditions remain, as
documented in the 2005 Report to Council for the Plan Amendments and Fiscal Merger. Many
existing commercial and other uses that have not yet been redeveloped continue to be marginal
and are highly unlikely to have the resources required to make the necessary upgrades to
modernize and become competitive. In reviewing the existing conditions in the Project Areas, it is
clear that redevelopment continues to present the most realistic long-term financing vehicle for
alleviating blighting conditions.
DowntownlCentral
• Deterioration and dilapidation due to a lack of maintenance of structures.
• Unreinforced masonry buildings.
• Earthquake and flooding hazards.
• Parcels contaminated with hazardous materials.
• Incompatible land uses.
• Stagnant and declining businesses.
• Indicators of economically distressed properties.
• Residential overcrowding and problem businesses.
• Crime and gang-related activity including graffiti.
• Inadequate infrastructure, utilities and public facilities.
EI Camino Corridor
• Deterioration and dilapidation due to a lack of maintenance of structures.
• Flooding hazards.
• Parcels contaminated with hazardous materials.
• Incompatible land uses.
• Irregularly shaped and/or inadequately sized parcels.
• Residential overcrowding and problem businesses.
• Circulation, infrastructure and public facility deficiencies.
South San Francisco Redevelopment Agency II-4 Seitel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
Gateway
• Poor soil conditions with associated development hazards.
• Earthquake hazards.
• Parcels contaminated with hazardous materials.
• Irregular street patterns, inadequate circulation and presence of deteriorating defunct rail
lines.
Shearwater
• Poor soil conditions with associated development hazards.
• Earthquake and flooding hazards.
• Parcels contaminated with hazardous materials.
• ]nadequate circulation and public improvements.
2. How the Agency's Proposed Goals, Objectives, Programs and
Expenditures Will Eliminate Blighting Influences
The Agency's proposed five-year goals, objectives, programs and expenditures will help
eliminate the remaining blighting influences in the Project Areas by improving economic
conditions, stimulating private development, improving public infrastructure, circulation, parking
and facilities, and meeting the Agency's affordable housing obligations.
Public Infrastructure, Circulation and Parking
The Agency's public infrastructure, circulation and parking projects and activities will ameliorate
parking and circulation problems throughout the Project Areas that deter revitalization, making
both pedestrian and vehicular traffic safer and smoother. Remediation of circulation and street
deficiencies will reduce traffic congestion and hazards and reduce the risk of motor vehicle
accidents. l~nprovements to lanes, sidewalks and other pedestrian walkways in addition to
installation and repair of missing or deteriorated curbs and sidewalks will lessen pedestrian
hazards and increase pedestrian movement and accessibility.
Public Facilities
The Agency's public facility projects and programs will support the construction, rehabilitation
and improvement of community facilities in the Downtown/Central and E1 Camino Corridor
Project Areas in order to address the lack of adequate public facilities that currently impacts the
physical and economic well-being of the Project Areas. The Agency plans to undertake projects
and activities addressing deficiencies in transit facilities, parks and open space, public library
facilities, and maritime facilities.
Economic Development
Incentives that address the specific needs of existing businesses and enhance the City's ability to
attract new businesses will result in the development of high quality and appropriately located
residential, commercial and industrial uses in the Downtown/Central and E1 Camino Corridor
Project Areas. Public and private investment will lead to the improvement of substandard and
underutilized lots and buildings, as well as deteriorated and dilapidated buildings. The Agency's
South San Francisco Redevelopment Agency II-5 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009J10-FY 2013/14 June 2010
Economic Development activities will also reduce the perception of crime that hinders the
economic vitality of portions of the Project Areas.
Property Acquisition, Demolition and Site Preparation
Agency funding and other assistance to aid in property acquisition, demolition and site
preparation in the Downtown/Central and El Camino Corridor Project Areas will encourage
development on properties that appear on environmental monitoring lists and/or contain leaking
underground fuel tanks, and on large tracts of vacant and underutilized land. A reduction in
parcels characterized by adjacent or nearby incompatible uses and concentrations of problem
businesses will spur economic development and reduce crime.
Affordable Housing Program
The affordable housing program will allow the Agency to continue to provide increased
affordable housing opportunities for South San Francisco residents. The Agency's Low and
Moderate Income Housing Fund (Housing Fund) will be utilized in the original Downtown
Central Project Area, the E1 Camino Corridor Project Area and throughout the City. Provision of
assistance for the construction of new rental and ownership units, loans and grants for
rehabilitation, and support for first-time homebuyers will help alleviate blighting conditions,
including deteriorated buildings and overcrowding. Chapter Ill describes planned housing
activities in more detail.
C. Five-Year Implementation Plan Revenues
Over the next five-years, the Agency will undertake those activities that can be financially
supported by its revenue stream. The Agency has three basic revenue sources:
• Annual tax increment revenues,
• Bond issuance proceeds, and
• Other revenues including repayment of Agency loans and advances.
1. Projected Tax Increment Funds for Non-Housing Program
The Agency projects that approximately $155 million in funds will be available during the
five-year Implementation Plan period. Table ll-2 details the Agency resources available to the
Agency for non-housing projects during the next five-years of the Redevelopment Program.
As indicated in Table H-2, the Agency is projected to receive approximately $194 million in gross
tax increment revenues.' After deducting obligations including Housing Fund deposits,
pass-through payments, County and Agency Administration, and debt service payments,
~ The projections in this report are based upon an understanding of the general assessment and apportionment practices
of San Mateo County. These practices are subject to policy changes, legislative changes and the individual
appraiser's judgment. While the Agency believes its estimates are reasonable; taxable values resulting from actual
appraisals and adjustments are likely to vary from the amount assumed in the projections. The tax increment
projections are intended only as estimates, which are based on the best available information at the present time.
Actual tax increments may be higher or lower than indicated in the model. The projections in this report are not
intended to predict future tax increment growth resulting from the increase in assessed value.
South San Francisco Redevelopment Agency II-6 Seitel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
approximately $43 million in net tax increment revenue is available for non-housing
expenditures.
2. Projected Bond Issuance Proceeds
Bond proceeds are expected to be an essential supplement to the tax increment revenues needed
to accomplish the Agency's Redevelopment Program activities over the five-year period. The
Agency has a maximum bonded indebtedness for the Fiscally Merged Project Areas of
$232.65 million, except for the Downtown/Central Added Area, which has a maximum bonded
indebtedness of $l 5 million. The Agency is currently exploring the feasibility of combining the
Downtown/Central Added Area indebtedness limit with that of the Merged Project Areas. or of
combining and raising the limit.
Assuming that the current limits remain in place, the Agency estimates that approximately
$65 million in new bond proceeds will be available in the next five-years to supplement the
available tax increment revenues for non-housing activities.
Other Agency and Non-Agency Financial Resources
The Agency projects the receipt of approximately $26 million in other revenues over the five-year
Implementation Plan period. These other sources of funds include the repayment of advances
made to the City's Sewer Fund, land sales, and other payments connected with planned
development at Oyster Point.
Wherever possible, the Agency will continue to leverage other Agency and non-Agency funds in
connection with its redevelopment efforts. If more funds are received, the Agency could
potentially undertake additional activities. The Agency has targeted local, state and federal
funding sources to assist with financing eligible projects, including the following: the City of
South San Francisco or other local entities, San Mateo County, the State of California, the federal
government and private developers; proceeds from the sale or lease of Agency-owned property;
repayment of Agency loans and advances; financing proceeds based upon revenues from special
assessment or special tax districts; and developer fees.
4. Total Resources Available for Non-Housing Program
As indicated on Table 11-2, the Agency projects the receipt of approximately $43 million in net
tax increment available for non-housing expenditures during the five-year Implementation Plan
period. The Agency also projects receiving $65 million in bond proceeds and $26 million in other
revenues. After taking into account the Agency's year-end balance of $2l million in cash for
FY 2008/09, the total funds available for non-housing projects and activities over the five-year
period is $155 million.
South San Francisco Redevelopment Agency II-7 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009110-FY 2013/14 June 2010
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Housing Component
This Chapter contains information on the Agency's Affordable Housing Program and progress
towards meeting CRL housing requirements. It is organized as follows:
A. Overview of Affordable Housing and Agency Responsibilities
B. Affordable Housing Program
C. Low and Moderate Income F[ousing Fund
D. Affordable Housing Production Plan
E. Replacement Housing
F. Completion of Housing Obligations
Appendix A includes a summary of the CRL affordable housing requirements and Appendix B
contains details on Agency housing programs and expenditures.
A. Overview of Affordable Housing and Agency Responsibilities
This section provides background regarding required contents of the Implementation Plan's
housing component. Refer to Appendix A for detailed requirements and definitions of affordable
housing levels and permissible affordable housing costs in South San Francisco.
1. Required Portions of the Housing Component
According to the CRL, the housing component of the Implementation Plan is required to set forth
housing goals and objectives for the five-year Implementation Plan period
(FY 2009// 0-FY 2013/] 4), present estimates of Low and Moderate-Income Housing Fund
(Housing Fund) deposits and describe potential projects and estimated expenditures planned for
the five-year Implementation Plan period. The CRL also requires the housing portion to explain
how the stated goals, objectives, deposits, programs, projects, and expenditures will produce
affordable housing units to meet CRL obligations. In addition, the Implementation Plan must
include the following affordable housing planning components:
• The Affordable Housing Program, with a description of how the Agency will implement the
Housing Fund expenditure targeting and other requirements.
• The amount available in the Housing Fund, estimates of annual deposits into the Housing
Fund during the five-year Implementation Plan period, the Agency's plans for using the
annual deposits to the Housing Fund, and the number of new or rehabilitated price-restricted
affordable housing units to be assisted by the Housing Fund during each of the five-years.
• A description of the Agency's affordable housing expenditures and activities over the
previous five-year Implementation Plan period.
• The Housing Production Plan, including the number of affordable and total housing units
estimated to be produced for two time periods:
- Ten year compliance period, and
- Over the life of the Redevelopment Plan.
South San Francisco Redevelopment Agency III-1 Seifel Consulting tnc.
Five-Year Implementation Plan FY 2009/10-FY 2013114 June 2010
• Identification of proposed locations for replacement housing that the Agency would be
required to produce if a planned project results in the destruction of existing
affordable housing.
• For plans that are within six years of completion of project activities, a detailed description of
how the Agency will meet its affordable housing production and expenditure targeting
obligations prior to termination of the plan.
B. Affordable 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, policies and programs of
the City's Housing Element (adopted by the City and certified by the California Department of
Housing and Community Development in 2010) and the housing goals in its
Redevelopment Plan.
The proposed goals stated in the (:ity's Housing Element are:
• Promote the provision of housing by both the private and public sectors for all income groups
in the community.
• Take necessary steps to remove government and public infrastructure constraints to housing
development through administrative support, intergovernmental cooperation, public-private
partnerships, and permit streamlining.
• Strive to maintain and preserve existing housing resources, including both affordable and
market-rate units.
• Maintain and improve the quality of life, safety and historic integrity of existing
neighborhoods as a high priority for the City.
• Support the development of an adequate supply of safe, decent, and affordable housing for
groups with special housing needs.
• Ensure that all households have equal access to the City's housing resources.
• Promote energy efficiency in residential development within the City, including reduction of
energy use through better design and construction in individual homes, and also through
energy-efficient urban design.
Redevelopment Plan housing goals are listed along with non-housing goals in Chapter 1.
1. Affordable Housing Program Components
The Agency recognizes the important role of the Affordable Housing Program in its overall
Redevelopment Program. Consequently, the proposed Affordable Housing Program should be
viewed not only as the means of implementing the Agency's stated goals and objectives related to
affordable housing and meeting CRL housing obligations, but as a key element in its overall
blight alleviation and revitalization efforts.
As part of the Affordable Housing Program, the Agency will undertake the following types of
affordable housing projects and activities:
South San Francisco Redevelopment Agency III-2 Seitel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
• Encourage the development, preservation and/or substantial rehabilitation of affordable
housing.
• Provide housing opportunities for very low-income renters and persons with special needs.
• Provide homeownership opportunities for first-time homebuyers earning less than
l20 percent of median income.
2. Proposed Housing Activities and Expenditures
The Agency will respond to favorable opportunities for development and substantial
rehabilitation and will target Housing Fund monies to specific groups identified in the CRL.
Housing Fund monies will be spent both inside and outside the Project Areas.' In carrying out its
purpose to preserve, improve and increase the affordable housing supply. the Agency tnay use the
following methods:
• Provide assistance from all departments within the bounds of local ordinances to stimulate
affordable housing production.
• Provide technical, financial and other redevelopment assistance to nonprofit developers to
stimulate affordable housing production.
• Help implement the City's Inclusionary Zoning Ordinance.
• Undertake programs to provide financial assistance for acquisition and/or physical
improvements to existing boarding rooms, single room occupancies and other existing rental
UmtS.
• Increase the supply of affordable rental units by providing financial assistance to developers
for the creation of new multifamily rental units.
• Provide financing or incentives to preserve affordable housing at risk of reverting to market
rate as subsidies expire.
• Undertake housing rehabilitation to promote health, sustainability and code compliance.
• Streamline the permit process.
• Provide density bonuses and other forms of assistance within the bounds of local ordinances
and policies.
• Provide assistance or incentives to stimulate the creation of new homeownership
opportunities, including funds to subsidize the purchase of new housing by qualified low and
moderate-income buyers.
• Support efforts to provide first-time homebuyer opportunities by working with other agencies
and housing programs, including the Mortgage Credit Certificate and corporate homebuyer
programs.
These programs and the Agency's overall Affordable Housing Program are designed to direct
funding towards households at various affordability levels and regardless of age, as required by
the CRL. Detailed expenditures for these programs and the expected number of units to be
assisted during the Implementation Plan period can be found in Appendix B. The Agency will
make every effort to encourage the preservation and development of housing affordable to a
' The City Council and Agency anticipate approving resolutions detern~ining that the use of its Housing Fund monies to
assist housing activities located outside the Merged Project Area is of benefit to the Project Areas. Such a resolution
is required for merged project areas b}~ the CRL (33487(b)).
South San Francisco Redevelopment Agency III-3 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013!14 June 2010
variety of income levels and age groups. By combining various funding sources and partnering
with other entities dedicated to the' preservation and development of affordable housing, the
Agency is confident it will be abler 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 Plans.
C. Low and Moderate Income Housing Fund
The CRL requires an agency to deposit 20 percent of its annual tax increment revenues into the
Housing Fund for the purpose of increasing, improving and preserving the community's supply of
affordable housing.z The Housing Fund will be the primary funding source for the Agency's
affordable housing activities during the Implementation Plan period.
This section describes the history and status of the Housing Fund, planned deposits, expenditures
and units to be assisted during the Implementation Plan period, and the targeting of funds for
housing affordable to specific income groups identified in the CRL and non-age restricted
housing. It also contains a report on use of the Housing Fund during the previous Lnplementation
Plan period.
The Agency will also seek to combine Housing Fund revenues 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 revenues available from the Housing Fund. These other
sources may include discretionary advances by the Agency from non-housing funds, CDBG and
HOME Investment Partnership fiords from HUD, Ca1HFA, HCD programs, and Low-Income
Housing Tax Credit equity funds..
1. History and Status
The Agency has deposited at least 20 percent of the tax increment revenue allocated to the
Agency into the Housing Fund. The Housing Fund balance at the end of FY 2008/09 was
approximately $22 million.
2. Housing Fund Deposits, Expenditures and Housing Assisted in the
Current Implementation Plan Period
This section estimates the Agency's deposits into the Housing Fund, expenditures from it, and the
housing units those expenditures will assist during the current ltnpletnentation Plan period.
a. Deposits During the Implementation Plan Period
The Agency plans to continue to deposit funds from its fiscally-merged Project Areas into the
Housing Fund. Based on the Agency's projections, the Agency estimates that the cumulative
deposit of tax increment revenue into the Housing Fund between FY 2009/10 and FY 2013/14
~' The CRL requires the placement and recordation of affordability controls on any new or substantially rehabilitated
housing assisted by Housing Fund monies. As of January 1, 2002; the controls are as follows: for rental housing, the
assisted housing must remain affordable for 55 years, and for owner-occupied housing; the units must remain
affordable for 45 years.
South San Francisco Redevelopment Agency III-4 Seitel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
will be $39 million, as shown in Table III-] .After accounting for other revenues and deducting
debt obligations, the Agency will have approximately $65 million available for its Housing
Program through FY 2013/14, including the balance in the Housing Fund as of July 1, 2009. The
Agency plans to use most of its available Housing Fund revenues in the next five-years.
The Agency anticipates issuing roughly $4.4 million in tax allocation bonds (yielding
$3.9 million in bond proceeds) secured by future Housing Fund deposits in order to fund the
projects and activities identified in Table III-2 below.
Expenditures and Affordable Housing Units Assisted During the Implementation
Plan Period
During the current Implementation Plan period, the Agency plans to spend its Housing Fund
resources to preserve, improve and facilitate the development of housing affordable to households
whose basic needs are not met by the private housing market. These expenditures and the units
they support will be consistent with the CRL and the City's Housing Element.
Table 111-2 presents estimated Housing Fund expenditures and the affordable housing units to be
assisted during each of the five-years in the Implementation Plan period. In summary, from
FY 2009/10-FY 2013/] 4, the Agency estimates housing activity expenditures of approximately
$65 million and plans to assist in the production of 316 housing units affordable to very low, low
and moderate-income households.3
Several factors may result in expenditures and unit production being either less than or greater
than what is projected for given years. These factors include the tax credit market and general
availability of credit, the timing of the development process, the levels of Housing Fund revenue
and other public assistance, the need to amass sufficient funds for efficiently-sized development,
and development opportunities.
3 The number of affordable housing units in Table III-2 does not correspond to the number of affordable housing units
in Tables 111-5 and 111-6. Tables 111-5 and III-6 address general housing production and affordable housing obligations
and production. These two tables separately present affordable housing units produced by the Agency and non-
Agency units produced with Agency assistance over various time periods for the purpose of compliance with CRL
production obligations. In Table Ill-6, affordable units produced outside the Project Areas are counted on a one for
two basis for purposes of calculating the affordable housing produced to meet the affordable housing production
requirement. Table 111-2 addresses Housing Fund expenditure requirements; and includes both Agency and non-
Agency developed housing. Table III;Z includes units located both inside and outside the Project Areas, and all units
are counted on a one for one basis, i.e., the number of units located outside the Project Areas has not been adjusted.
South San Francisco Redevelopment Ayency III-5 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
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Table III-2
Affordable Housing to be Produced with Agency AssistancelHousing Fund Expenditures
FY 2009110 to FY 2013114 (Future Dollars)
Income Cate or FY 2009/10 FY 2010/11 FY 2011/12 FY 2010/13 FY 20]3/14 Total
Ea enditures
Ver Low $510 000 $52] 000 $15 53] 000 $542.000 $43,553.000 $60.657,000
Low $157 000 $157 000 $157.000 $157.000 $157.000 $785.000
Moderate $179,000 $179,000 $2,680,000 $180,000 $181.000 $3,399,000
Total $846 000 $857 000 $18 368 000 $879 000 $43.891.000 $64 841.000
Units Assisted
Ver Low 0 0 109 0 177 286
Low 2 2 2 2 2 ]0
Moderate 2 2 12 2 2 20
Total 4 4 123 4 181 316
Note: Dollar figures rounded to the nearest thousand. Totals may not add up correctly due to rounding.
Source: South San Francisco Redevelopment Agency, Seifel Consulting Inc.
3. Housing Fund Targeting Requirements
The CRL imposes Housing Fund expenditure requirements based on the proportion of unmet
need for housing affordable to households of very low, low and moderate-incomes. It also limits
the percentage of Housing Fund expenditures that can be spent on age-restricted housing. This
section describes the Agency's plans to meet these obligations. Please refer to Appendix A for
details on the expenditure requirements.
The Agency's specific housing projects and activities are designed to meet these targeting
requirements over the compliance period.
Housing Fund Income Targeting
The Agency plans to target its Housing Fund monies to specific income groups based on its fair
share of regional housing needs as determined by the Association of Bay Area Governments
(ABAG). Based on current Regional Housing Needs Allocation (RHNA) figures, the Agency is
required to expend Housing Fund monies in the following proportions: at least 39 percent on
units affordable to very low-income households, at least 28 percent on units affordable to
low-income households, and no more than 33 percent on units to moderate-income households.
Please see Appendix A for calculations.
As shown in Table HI-3, the Agency will target most of its Housing Fund money to assist in the
development of very low-income housing in the Project Areas. Over the compliance period
ending in 2014, the Agency will have targeted 89.1 percent of its Housing Fund expenditures to
assist very low-income households and 6.2 percent to assist low-income households. Thus. the
Agency expects to exceed income expenditure targeting requirements.
South San Francisco Redevelopment Agency III-7 Seifel Consulting Inc.
Five-Year Implementation Plan FY 20041/10-FY 2013/14 June 2010
Table III-3
Low and Moderate-Income Housing Fund Expenditures
Targeted by Income 111/2002-613012014
South San Francisco Redevelopment Agency
1/1/2002-6/30/2009 7/1/2009-6/30/2014 Over Com Hance Period
Income Ta etin LM1HF
Ea enditures' Percent
Ta eted LM1HF
Ex enditures" Percent
Ta eted LMIHF
Ea enditures Percent
Ta eted CRL Required
Ta et
Ve Low $14,720,000 74.5% $60,656,000 93.5% $75,376,000 89.1% At least 39.0%
Low $4,465,000 22.6% $784,000 1.2% $5 249,000 6.2% Al least 28.0%
Moderate $566 000 2.9% $3 399,000 5.2% $3,965 000 4.7% No more than 33.0%
Total Sl9 752 000 100% $64 839 000 100% 884 591 000 100% 100%
a. Includes Agency actual expenditures as shown in Appendix B.
b. ]ncludes Agency projected expenditures as shown in Table 111-2.
Source: South San Francisco Redevelopment Agency, Seifel Consulting Inc.
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. As detailed in ,Appendix A, the Agency must expend at least 60 percent of its
funds on housing that does not irnpose age restrictions on residents.
The Agency plans to spend at least 79.7 percent of Housing Fund monies on non-age restricted
housing over the ten year compliance period between January 1, 2002 and June 30, 2014, as
shown in Table III-4. To date, the Agency has expended more than $ l 6 million on non-age
restricted housing and $3.6 million on age-restricted housing since January 1, 2002. The Agency
will continue to monitor Housinf; Fund expenditures in order to comply with the requirement for
minimum Housing Fund expenditures on non-age restricted housing. The Agency anticipates it
will exceed its non-age restricted targeting requirements for the compliance period ending in
2014.
Table III-4
Low and Moderate-Income Housing Fund Expenditures
Targeted by Non-Age Restricted housing 11112002-613012014
South San Francisco Redevelopment Agency
1/1/2002-6/30/2009 7/1/2009/30/2014 Over Com Hance Period
A e Tar etin LMIHF
Ea enditures' Percent
Tar eted LMIHF
Ex endituresb Percent
Tar eted LMIHF
Ea enditures Percent
Tar eted CRL Required
Ta et
A e Restricted $3 594 000 18.2% $13.595 000 21.0% $17 189 000 20.3% No more than 40.0%
Non-A e Restricted $16 158,000 81.8% $51,244 000 79.0% $67 402 000 79.7% At least 60.0%
Total 819 752 000 100% S64 839 000 100% 884 591 000 100% 100%
a. ]ncludes Agency actual expenditures as shown in Appendix B.
b_ Includes Agency projected expenditures as shown in Table ]ll-2.
Source: South San Francisco Redevelopment Aeency_ Seifel Consulting ]nc.
South San Francisco Redevelopment Agency III-8 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
Report on Targeting for Previous Implementation Plan Period
During the previous Implementation Plan period the Agency spent roughly $l5 million for very
low-income households and approximately $4 million for low-income households a The Agency
expended approximately $570,000 to assist units affordable to extremely low-income households,
although some very low-income 'units are occupied by extremely low-income households. The
number, location and level of affi~rdability of units constructed with Housing Fund assistance
during the previous Implementation Period are shown in Appendix B.
Roughly $ l 6 million was spent during the previous Implementation Plan period to support
non-age restricted housing, as shown in Appendix B. The number, location, and level of
affordability of those units are shown in Appendix B.
D. Affordable Housing Production Plan
This section constitutes the Housing Production Plan for the Agency's ten year housing
compliance period and over the life of the Project Areas. ]t includes estimates of housing
production subject to the affordable housing production requirement and the Agency's strategy
for meeting its affordable housing production obligation.
All of the Project Areas are subject to the affordable housing production requirement. Only the
original Downtown/Central and E1 Camino Project Areas have residential units. Rather than
present the production obligation individually by Project Area or Added Area, this plan presents
the Agency's housing production. obligation in aggregate for all of the Project Areas.
The Agency's affordable housin€; production requirement must be satisfied in the aggregate for
the ten year compliance period as well as over the life of the Redevelopment Plan. Consequently,
the Housing Production Plan is organized to keep track of both historical and projected housing
production for the following times periods:
• Through FY 2003/04,
• FY 2004/05 through FY 20l 3/14, and
• Over the life of the Redevelopment Plan.
1. Agency-developed Housing Production, Obligation and Compliance
Housing developed or substantially rehabilitated directly by the Agency is subject to affordability
requirements under the CRL. Historical and projected housing production by the Agency is
shown in Table III-5.
Through FY 2003/04, the Agency substantially rehabilitated four housing units at
339-341 Commercial Avenue outside of the Project Areas, creating an affordable housing
obligation of two affordable units (30 percent), of which one unit (50 percent of the affordable
units) had to be affordable to very low-income households. All four units at 339-341 Commercial
a As income and age-restricted targeting; requirements went into effect on January 1, 2002 and the first ten year
compliance period begins on this date, figures reported here for the past Implementation Plan period include 2002
through the end of FY 2008/09.
South San Francisco Redevelopment Agency III-9 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
Avenue are affordable to very low-income households, and the Agency also acquired four units at
312 Miller Avenue. Thus, the Al;ency exceeded its obligation.
From FY 2004/OS-FY 2008/09, the Agency substantially rehabilitated 3 units at 714-718 Linden
Avenue and one unit at 380 Alta Vista Drive, creating an affordable housing obligation of two
affordable units (30 percent), of which one unit (50 percent of the affordable units) had to be
affordable to very low-income households. All four units are affordable to low or very low-
income households, and the Agency also acquired three units at 3 ] 0 Miller Avenue and one unit
at 3l4 Miller Avenue. Thus, the Agency exceeded its obligation for the previous Implementation
Plan period.
From FY 2009/]0-FY 2013/14, the Agency anticipates developing 25 market rate units at
418 Linden Avenue in the Down~town/Central Project Area, creating an affordable housing
obligation of 8 units (30 percent;l, 4 of which (50 percent of the affordable units) must be
affordable to very low-income households. The Agency anticipates acquiring and rehabilitating
housing in the future, including at least two units during the current l~nplementation Plan period.
These units would be affordable to very low-income households. Thus, the Agency anticipates it
will continue to meet its future obligations.
South San Francisco Redevelopment Agency III-10 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
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2. Non-Agency Developed Housing Production, Obligation and
Compliance
In addition to obligations derived from its own housing development activities, the Agency has
also incurred affordable housing obligations as a result of housing not directly developed by the
Agency. Non-Agency housing production includes some projects with Agency financial or
technical assistance. This section describes the Agency's progress toward meeting these housing
production obligations for non-Agency developed housing.
a. Historical Housing Production, Obligation and Compliance (Through FY 2003104)
The Agency has met and exceeded its affordable housing production requirements through
FY 2003/04. The Agency reports that 670 housing units were developed or substantially
rehabilitated in the Project Areas through FY 2003/04, as shown in Table Ill-6. The housing
obligation, as defined by the CRL, requires that of the 670 housing units produced through
FY 2003/04, 101 must be affordable units (15 percent), of which 41 units (40 percent) must be
affordable to very low-income households. Through FY 2003/04, 329 affordable units were
developed, of which 328 were made affordable to very low-income households.5
b. Ten year Production, Obligation and Compliance (FY 2004105 through FY 2013114)
The Agency anticipates that it will meet its affordable housing production requirement for the ten
year compliance period. As shown in Table Ill-6, the Agency estimates that 808 housing units
will be developed (or substantially rehabilitated with Agency assistance) in the Project Areas
during the current compliance period. Based upon this forecast, the Agency will have an
obligation to ensure production oi' 122 affordable units, of which 50 must be affordable to very
low-income households. The Agency estimates that 442 housing units affordable to very low, low
or moderate-income households will be produced. Of these, 338 units are anticipated to be
affordable to very low-income households. Therefore, the Agency is expected to exceed its
affordable housing production obligation during the current compliance period.
c. Production, Obligation and Compliance over the Life of the Redevelopment Plan
The Agency has evaluated the potential for future housing production in the Project Areas
through the end of the Redevelopment Plans. Based on historical housing development and trends
in the Project Areas along with an analysis of development capacity from the City's Housing
Element, the Agency estimates that a total of 2, 160 units will be constructed within the Project
Areas over the life of the Redevelopment Plans. Table ll]-6 summarizes the units projected to be
produced through the end of the Redevelopment Plans.
Based on the projection of 2,160 ',housing units, the Agency will have an obligation to ensure 326
units (15 percent) are affordable to very low, low and moderate-income households. Of these, 130
units (40 percent) must be availat>le at affordable housing cost to very low-income households, as
shown in Table III-6.
Affordable units developed inside the Project Area count on aone-for-one basis: affordable units developed outside
the Project Area count on atwo-for-one basis.
South San Francisco Redevelopment Agency III-12 Seitel Consulting Inc.
Five-Year Implementation Plan FY 2009110-FY 2013/14 June 2010
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The Agency anticipates that over the life of the Redevelopment Plans, 874 housing units
affordable to very ]ow, low and moderate-income households will have been developed, and of
these, 707 units will be affordable to very low-income households. Thus, the Agency expects that
it will meet and exceed its affordable housing production obligations over the life of the
Redevelopment Plans.
E. Replacement Housing
In 2008, the Agency removed two housing units at 323 Miller Avenue in the Downtown/Central
Project Area, and adopted a replacement plan. The units have not yet been replaced, but the
Agency plans to provide replacement units within four years of the original units' demolition.
The Agency has no plans to destroy or remove any additional residential units housing low or
moderate-income persons in the Future. As the Agency does not expect the displacement of any
additional households in the next: ten years, it will not be obligated to plan to replace any units
beyond the two currently planned for replacement. In the event that the removal of housing were
to become a necessity in the future, the City and Agency would follow all state requirements for
replacement housing and relocatiion, and make every effort to relocate persons as close as
possible to their current place of residence. Refer to Table ]II-7 for historical information on
housing replacement in South San Francisco.
F. Completion of Housing Obligations
As the Agency has no Project Areas that will reach their time limit on plan effectiveness in the
next six years, this Implementation Plan does not need to address the requirements of CRL
Section 33333.8.
South San Francisco Redevelopment Agency III-14 Seitel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
Table III-7
Replacement Housing Obligation
Years Units
Removed Units
Produced Cumulative Production
Balance Sur lus (Deficit
Historical
Before 9/1 /1989a 22 l 1 (1 ] )
9/1/1989-12/31/20016 3d l4 0
1/1/2002-6/31/2004` 0 0 0
07/01/05-6/31/2009 2e 0 (2)
Total 27 25 (2)
a. The replacement-housing obligation must be met within four years of the removal of the original units
b. For dwelling units destroyed or removed after 9/]/1989 and before l/1 /2002; the CRL required that 75% of the
replacement units be available at affordable housing cost to the same income level of households (very low, low
ormoderate-income) as were displaced from the units removed or destroyed. The three very low-income units
removed between 9/1/1989 and 12/31/200] were replaced by three very low-income units.
c. As of 1/]/2002, the CRL requires 100% of replacement units to be available at affordable housing cost to the
same income level of households its the households displaced.
d. Units were located on Baden Avenue. Two units were removed in 1998/99; and one unit was removed in 2000.
e. Two units were removed at 323 Miller Avenue and a replacement plan has been adopted.
Source: South San Francisco Redevelopment Agency.
South San Francisco Redevelopment P~gency III-15 Seitel Consulting Inc.
Five-Year Implementation Plan FY 200'9110-FY 2013/14 June 2010
Appendices
South `.>an Francisco Redevelopment Agency
Five-Year Implementation Plan FY 2009110-FY 2013114
Appendix A. CRL Requirements for Affordable Housing
Appendix B. Detailed Expencliture Tables
South San Francisco Redevelopment ~4gency i Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009110-FY 2013/14 June 2010
Appendix A:
CRL Requirements for Affordable Housing
Appendix A
CRL Requirements for Affordable Housing
This appendix defines key affordable housing terms and summarizes the Agency's affordable
housing requirements under the CRL. 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 generally categorized as:
• Housing Program (Section 33490(a)(2)(A)): Agencies are required to prepare a Housing
Program with estimates of the number affordable housing units to be assisted during each of
the five years, estimates of annual expenditures and a description of how the Housing
Program will implement expenditure requirements.
• Housing_Fund Reguiretnent (Sections 33334.2 33334.4 and 33334.6): Agencies must 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.
• Affordable Housing Production Requirement (Section 33413): Agencies must cause specified
minimum percentages of new or substantially rehabilitated housing units in project areas
subject to this requirement to be available to very low, low and moderate-income households
at a legally defined affordable housing cost.'
• Replacement Housing Requirement (Section 334 ] 3): Agencies must replace within four years
housing units removed from /the housing stock as a result of redevelopment activities.
• Completion of Housing Obligation (Section 33333.8): A redevelopment project cannot be
terminated if an agency has not fulfilled its affordable housing obligations, including housing
fund, replacement housing, and affordable housing production responsibilities, prior to the
expiration of the time limit on redevelopment plan effectiveness.
The sections of the Housing Component that address Housing Fund expenditure requirements
must be reviewed every five years in conjunction with updating the Housing Element or
preparing the next five-year Implementation Plan. The CRL requirements are described in greater
detail in the following sections.
A. Affordable Housing Definitions
1. Income Levels
The CRL defines affordable hou:>ing as that which is affordable to households of:Z
• Very Low Incomes up to 50 percent of~ area median income, adjusted for family size.
' The CRL defines substantially rehabiliitated 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 of land value (33416(b)(2)(A)(iii)).
2 The Health and Safety Code defines law and moderate-income in Section 50093, low-income in Section 50079.5; and
very low-income in Section 50105.
City of South San Francisco A_1 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
Low Incomes from 50 percent up to 80 percent of area median income, adjusted for family
size.
Moderate Incomes from 80 percent up to 120 percent of area median income, adjusted for
family size.
Table A-1 shows the maximum income limits for each income level by household size, published
in 2009 by the State of California Department of Housing and Community Development (HCD)
uti]izing income limits prepared by the U.S, Department of Housing and Urban Development
(HUD) for San Mateo County.
Table A-1
2009 San Mateo County Maximum Incomes
by Income Category and Household Size
Persons per Honsehold
Income Cate o 1 2 3 4 5 6 7 8
VeryLo~vlncome $ 39,600 $ 45,250 $ 50,900 $ 56.550 $ 61;050 $ 65, 600 $ 70,100 $ 74;650
Lowerlncome $ 63,350 $ 72,400 $ 8] 450 $ 90,500 $ 97.700 $ 104, 950 $ 112,200 $ 119.450
Median Income $ 67,750 $ 77,450 $ 87,100 $ 96,800 $ 104,550 $ 112, 300 $ 120;050 $ 127;800
Moderate Income $ 8] 300 $ 92 900 $ 104 550 $ 116,150 $ 125 450 $ 134 .750 $ ]44 050 $ 153,300
Source: California Department of Housing and Community Development; 2009
2. Affordable Housing Cost
Affordable housing must be avaiaable to and occupied by very low, low and moderate-income
households at an affordable housing cost in accordance with the CRL. The affordable housing
cost definitions presented below in Table A-2 apply.3
~' For housing assisted by Housing Fund moneys after January 1; 1991, the affordable housing cost definitions presented
in Table 2 apply. For housing assisted by Housing Fund moneys prior to January 1, 1991, affordable housing cost is
defined as rent or cost for rental or ownership housing that does not exceed 25 percent of the household's gross
income.
City of South San Francisco A_2 Seifel Consulting Inc.
Five-Year Implementation Plan FY 200'9110-FY 2013/14 June 2010
Table A-2
Affordable Housing Cost
Rental Housin Ownershi Housin
Income Level Income Spent
on Housin
g % of Area
b
Median lncome % Income Spent
on Housin
g % of Area
b
Median Income
Very Low 30% 50% 30% 50%
Low 30% 60 % 30%` 70%`
Moderate 30% ll0% 35%` 110%
a. Rental housing costs include rent and utility allowance. Affordable housing
costs are adjusted by number of persons in household.
b. The CRL requires HCD median income figures published by HCD, and not HUD,
to be utilized. In many instances, this causes CRL-restricted rents to be lower
than HOME rents and low-income housing tax credit rents. In the instance a
project receives Housing ]Fund and HOME or tax credit assistance, the owner
must comply with all applicable legal requirements and the lower
CRL-restricted rents will ;prevail.
c. With optional higher housing cost linked to actual income at upper end of
income category.
Source: CRL Sections 50052.5 and 50053(b).
3. Duration and Enforceability of Affordability Covenants
The CRL requires the placement and recordation of affordability controls on any new or
substantially rehabilitated housing assisted by Housing Fund moneys and/or counted towards
Housing Production or Replacement Housing obligations. For rental housing, controls must be
placed on the assisted housing units requiring them to remain affordable for 55 years. For owner
occupied housing, the units tnusl: remain affordable for the 45 years.4 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, an equity sharing program that establishes a schedule of
equity sharing that permits retention by the seller of a portion of the excess proceeds, based on the
length of occupancy. The retnairtder of the excess proceeds of the sale must be allocated to the
agency and deposited in the Housing Fund. Within three years from the sale of the units, the
agency must expend funds to make affordable an equal number of units as the same income level
as the units sold. Only the units originally assisted by the agency can count towards the agency's
housing affordable housing replacement and production obligations (Sections 33334.3(f)(1),
33413(c)(2)).
a Prior to .lanuary 1; 2002 and the effectiveness of AB 637; the income and affordability covenants for Housing Fund
assisted projects were required to be imposed for the longest feasible time but not less than 15 years for rental
housing, l0 years for owner occupant. housing, and 30 years in merged areas. Prior to AB 637 and SB 701, in order
for units to count towards fulfilling alffordable housing production requirements; units had to be subject to
affordability covenants of at least the duration of the Redevelopment Plan's land use controls.
City of South San Francisco A_3 Seitel Consulting Inc.
Five-Year Implementation Plan FY 200'9110-FY 2013/14 June 2010
An agency must require the recording of affordability covenants or restrictions with the office of
the county recorder of covenants or restrictions for each parcel or unit. Covenants and restrictions
must run with the land and are enlForceable by the agency or community (Sections 33334.3(f)(2),
33413(c)(3)).
B. Implementation Plan Affordable Housing Requirements
1. Affordable Housing Program
Agencies are required to prepare an Affordable 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 Affordable Housing Program must also include estimates of expenditures of
moneys from the Housing Fund during each of the five years. Finally, it must include a
description of how it will implement the expenditure requirements over the ten year compliance
period. Section lll.B of the Implementation Plan includes the Agency's Affordable Housing
Program.
2. Low and Moderate Income Housing Fund
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).
The CRL imposes Housing Fund expenditure requirements based on the proportion of unmet
need for housing affordable to households of very low, low and moderate-incomes
(Section 33334.4(a)).5 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.
a. Housing Fund Targeting Requirements
The CRL imposes Housing Fund expenditure requirements based on the proportion of unmet
need for housing affordable to households of very low, low and moderate-incomes. It also limits
the percentage of Housing Fund expenditures that can be spent on age-restricted housing. These
targeting obligations must be met over the ten year compliance period. However, the initial period
for meeting this requirement is January 1, 2002, the date the targeting requirement became
effective, through the ten year compliance period. The following sections describe in greater
detail the Agency's requirements to target the Housing Fund expenditures by income need and
non-age restricted housing.
5 As provided by AB 6 37 and SB 701.
City of South San Francisco A_4 Seitel Consulting Inc.
Five-Year Implementation Plan FY 20051/10-FY 2013114 June 2010
Targeting According to Income Need
Agencies must target the use of Hlousing Fund monies to specific income levels in proportion
with the community's need for very low, low and moderate-income housing. The Association of
Bay Area Governments (ABAG) has determined the affordable housing need for the City of
South San Francisco in its regional fair share allocation for 2007 through 2014. This regional fair
share housing need allocation must be used to determine the targeting obligation. Table A-3
shows the fair share allocation applicable to the Agency for housing affordable to persons at or
below 120 percent of median income.
Table A-3
ABAG Regional Fair Share Allocations 2007-2014
Affordable Housing Need by Income Category
City of South San Francisco
Expenditure
Total Housing Units Percentage need by
Income Grou Needed Income Level
Very Low (0-50% AMI) 373 At least 39%
Low (51-80%AMI) 268 At least 28%
Moderate 81-120% AMI 315 No more than 33%
Total 956 100%
Source: ABAG Adopted Regional Housing Needs Assessment, 2008.
As Table A-3 indicates, the Agency is required to expend Housing Fund moneys in the following
proportions: at least 39 percent for units affordable to very low-income households, at least
28 percent for units affordable to low-income households, and no more than 33 percent on
housing affordable to moderate-income households. However, 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 funds allocated to housing affordable to moderate-income households. In no event can
the expenditures targeted to housing affordable to moderate-income households exceed the
threshold amount (33 percent).
Under the CRL, an agency is allowed to reduce its income targeting requirement if other locally
controlled funding produces newly constructed housing for the targeted income groups, so long as
such units are produced without any agency assistance and their continued affordability is
ensured through long term affordability covenants (at least 45 years for owner occupied and
55 years for rental). An agency ~inay 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 over the duration of the implementation plan with other
locally controlled government assistance. However, an agency cannot subtract units developed
pursuant to a replacement housing obligation under federal or state law (Section 33334.4(a)).
Locally controlled means government assistance where the local government entity has discretion
and authority to determine the recipient and the amount of assistance (Section 33334.4).
Examples of such funding are C'I)BG, HOME Investment Partnership Program, and fees received
by a city pursuant to a city authorized program.
City of South San Francisco A-5 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009110-FY 2013114 June 2010
Targeting to Non-Age Restricted Housing
In addition to the requirement outlined above, as of January l , 2002, a defined minimum
percentage of Housing Fund moneys must be spent on housing available to all persons regardless
of age. This minimum was originally defined as the share of a community's population under the
age of 65 compared to the total population, and the CRL still requires that agencies report this
figure in their Implementation Plan. In South San Francisco, this was 87.4 percent, as 52,922 of
South San Francisco's 60,552 residents were under 65 according to the 2000 U.S. Census.
In 2005, the CRI, was amended to modify the method of determining the minimum percentage of
Housing Fund moneys spent on non-age restricted housing. This minimum is equal to the
percentage of South San Francisco's low-income households with a member under age 65, as
reported in the most recent US Census as compared to all low-income households. The 2000
Census indicates that 60 percent of the Town's low-income households have a householder under
65 years of age.b (Refer to Table ,A-4.) Thus, the Agency must expend at least 60 percent of its
funds on housing that does not irrtpose age restrictions on residents. This targeting obligation
must be met over the compliance period.
Table A-4
Housing Fund Expenditures Requirement
Non-Age Restricted Housing
City of South San Francisco
A e Tar etin e Low Income
Householdsb
Ez enditure Percenta e
With Householder under 6:5 4,897 60% minimum ex enditures
With Householder 65 and over 3 240 40% maximum ex enditures
Total 8 137 100%
a. Based on Census data shovving low-income households by householder age.
Data is not available for lovv-income households by household members ages.
b. Three-person households with incomes of less than $52,250 (HCD limit published in
2000 defined as "lower income").
Source: 2000 US Census, HC'D Income Limits 2000, Seifel Consulting Inc.
b. Housing Fund Revenues and Expenditures During the Previous Implementation Plan
Period
CRL Section 33490(a)(2)(C)(iv) requires that agencies report the amounts of Housing Fund
moneys utilized to assist units affordable to, and occupied by, extremely low-incotme, very low-
income and low-income households during the previous Implementation Plan period. In addition,
agencies tmust indicate the number, location and level of affordability of units newly constructed
6 The Census does not report lo~~~-income household information according to the age of household members; but rather
identifies households by the age of the householder.
City of South San Francisco A_6 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010
with other locally controlled governmental assistance (but without Agency assistance). Finally,
agencies must also report on the amount of Housing Fund moneys utilized to assist housing units
not restricted to seniors (non-age restricted housing), and the number, location, and level of
affordability of those units.
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 financing are available. Whenever possible, Housing Fund moneys should leverage
other funding resources and not be used when private or commercial funding is obtainable
(Section 33334.3(j)). When more than 50 percent of an affordable housing development's funding
is provided solely from the Housing Fund, an agency must make a finding that no other private or
commercial funding sources could be reasonably obtained.
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 nay 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 total number of housing units. For mixed use projects, the maximum is
based on the ratio of total cost of the affordable units to the total cost of the project.
d. Use of Funds outside of Project Area
An Agency can use Housing Fund moneys outside a project area upon resolution by the agency
and legislative body that the use can benefit the project (Section 33334.2(g)).
If an agency has more than one project area, it can spend housing funds from one project area in
other areas, pursuant to a resolution by the agency and legislative body that such use of the funds
will benefit the project (Section 33334.2(1)).
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)).
City of South San Francisco A_7 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009110-FY 2013/14 June 2010
The Agency must meet these legal requirements for the expenditure of Noosing Funds.
Section III.C of the Implementation Plan describes the Agency's compliance with meeting the
expenditure requirements.
3. 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. As part of an
implementation plan, an agency rnust adopt a Housing Production 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 cover the following time periods:
• Production over the ten year compliance period (FY 2004/05 through FY 20l 3/l4).
• Production through the life of the Redevelopment Plans (through FY 2034/2035).
The Housing Production Plan must include estimates of the number of residential units produced
or 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 developed or
substantially rehabilitated in orde;r to meet the affordable housing obligation (Section 33413).
Units produced outside of a project area count one for two towards meeting an agency's
affordable production obligation (Section 33413(b)(2)(A)(ii)).
The Plan must also include estimates of the number of units the agency itself will produce or
provide assistance to produce during the Implementation Plan period, including the number of
units available at an affordable housing cost to very low, low and moderate-income households.
Section 111.D of the Implementation Plan 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 ormoderate-income. Of those units, at least
50 percent must be affordable to very low-income households. The 50 percent requirement
translates to l 5 percent of the to1:a1 number of units developed or rehabilitated by an agency. 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)(1)).
City of South San Francisco q_g Seitel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013114 June 2010
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.' Of those 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 (Section 33413(b)(2)).
c. Agency Acquisition of Affordability Covenants
To satisfy the affordable housing production requirements, an agency may purchase or otherwise
acquire affordability covenants on existing multifamily housing units that: l) are not presently
available at affordable housing cc-st or 2) are affordable to households of ]ow or very low-
incomes but are units that an agency finds, based upon substantial evidence after a public hearing,
cannot reasonably be expected to remain affordable to the same group of persons or families.
Affordable units made available by an agency's acquisition of long term affordability covenants
may count towards the agency's affordable housing obligation. As described in Section A.3
above, the covenants must be for at least 55 years for rental units and 45 years for owner
occupied units. I-lowever, no more than 50 percent of an agency's housing obligation can consist
of units made available by the ac~auisition 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 housin€; cost to, and occupied by, very low-income households
(Sections 33413(b)(2)(B) and (C;1). The Agency has utilized the acquisition of affordability
covenants as discussed in Section III.D.I of the Implementation Plan.
d. Aggregation of Units
The CRL permits an agency with more than one project area to meet its affordable housing
production requirements in the aggregate in one or more project areas if the agency finds, based
on substantial evidence, after a public hearing, that the aggregation will not cause or exacerbate
racial, ethnic, or economic segrel;ation (Section 33413(b)(2)(A)(v)). The Agency has aggregated
its production in this manner, as discussed in Section llI.D of the Implementation Plan.
e. Fulfillment of Housing Production Obligation
The affordable housing production obligation must be fulfilled prior to the time limit on a
redevelopment plan's effectiveness. Alternatively, a redevelopment plan may be extended until
the Agency's housing obligations are rnet. Under the CRL, a redevelopment project cannot be
terminated if the agency has not met its affordable housing production requirements. Refer to
Section 5 below for further detail.
~ 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 of a multifamily residential project with three or more units regardless of whether an agency
provided financial assistance and (b) the substantial rehabilitation of a one or two unit residential project if the project
received Agency assistance. AB 637 and SB 701, effective January l; 2002, impose the affordable housing
production requirement on substantial rehabilitation projects that receive agency assistance.
City of South San Francisco q_g Seifel Consulting Inc.
Five-Year Implementation Plan FY 200'9/10-FY 2013/14 June 2010
4. Replacement Housing Requirement
The replacement housing requirement applies to project areas established by redevelopment plans
(or areas added by amendments) adopted on or after January ], 1976.
When residential units sheltering very ]ow, 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. As of January 1, 2002. each replacement unit must
include at least the same number of bedrooms as the units that were removed. The units may be
replaced with fewer units if an equal or greater number of bedrooms are provided. For example,
four two bedroom units may be replaced with two four bedroom units (Section 33413).
At least thirty days prior to acquiring property or adopting an agreement that will lead to the
destruction or removal of low and moderate-income housing units, an agency must adopt by
resolution a Replacement Housing Plan that generally describes the location, timing and method
by which replacement housing will be provided (Section 33413.5).
Replacement units may be located anywhere within the territorial jurisdiction of the agency
(Section 33413(a)).g An agency rrray either construct replacement housing, or assist with the
development of replacement housing through agreements with housing developers.9 Replacement
housing is discussed in Section III.E of the Implementation Plan.
a. Income and Affordability Requirements
The basic income and affordabilitty standards for replacement housing are the same as those for
the affordable housing production requirement and for use of Housing Fund moneys, as described
in Section A above. The units rnu~st 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 available at affordable housing cost to the same income level of
households as the households displaced. For dwelling units destroyed or removed after
September l , l 989 and before January l , 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) of the units that were destroyed.
b. Duration and Enforceability of Affordability Covenants
The affordability duration and enforceability requirements for replacement housing are the same
as those required for affordable }rousing production (Section 33413(c)). Refer to Section A above
for these requirements.
g 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.
9 Replacement housing units located inside a project area count towards the housing production requirement on a ] : ]
basis. Replacement units located outside a project area count on a 1:2 basis.
City of South San Francisco A-10 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009110-FY 2013/14 June 2010
c. Priority Households
An agency must give priority in renting or buying housing developed as part of a redevelopment
project to households displaced by an agency regardless of whether the units are inside or outside
of a project area. As of January ] , 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 determine priority.
5. Completion of Housing Obligations
CRL Section 33333.8, as amended) by SB 2l 1, 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. A redevelopment project cannot 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 surplus funds.
• Provide relocation assistance.
• Provide replacement housing.
• Provide inclusionary housing,.
City of South San Francisco A-11 Seifel Consulting Inc.
Five-Year Implementation Plan FY 2009/10-FY 2013114 June 2010
Appendix B:
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'9ZIFOR~IA
RDA AGENDA ITEM # 4
DATE: July 14, 2010
TO: Redevelopment Agency Board
FROM: Marty Van Duyn, Assistant Executive Director
SUBJECT: ADOPT A RESOLUTION AUTHORIZING THE EXPENDITURE OF
UP TO $300,000 FROM THE LOW- AND MODERATE-INCOME
HOUSING FUND 'TO SUBSIDIZE THE PURCHASE OF BELOW
MARKET RATE 1.JNITS AT CITY LIGHTS, ADOPTING FINDINGS IN
CONNECTION THEREWITH, AND APPROVING AN AMENDMENT
TO THE AGENCY'S LOW- AND MODERATE-INCOME HOUSING
FUND OPERATING BUDGET
RECOMMENDATION
It is recommended that the Redevelopment Agency Board adopt a Resolution 1)
authorizing the expenditure of up to $300,000 from the Low- and Moderate-Income
Housing Fund to subsidize the purchase of lower-income units at City Lights by providing a
subsidy of up to $50,000 to qualified buyers to preserve each unit; 2) adopting findings that
such expenditure will be of benefit to the El Camino Corridor Project Area; and 3)
approving a budget amendment to the Redevelopment Agency's Low- and Moderate
Income Housing Fund Operating Budget.
BACKGROND/DISCUSSION
On .lanuary 9, 2002, the City Council adopted ordinance l 306-2002 approving a Development
Agreement for the Marbella Housing Development, now known as South City Lights. The
Development Agreement required the developer to sell 70 below market rate ("BMR") units to
families of low-, median-, and moderate°-incomes.
The BMR units in the first three City Lights buildings successfully sold out. In 2007, the housing
market began to slow and it became increasingly difficult to sell the moderate-income (] 20%
Area Median Income) units in the development. Consequently on August 8, 2007; the City
Council adopted a resolution that resulted in the release of six moderate-income units in return
for redesignating eight moderate-income units as 80% low-income units in the remaining three
buildings. Following the redesignation, BMR units once again began to sell in the fourth and fifth
buildings. However, the housing market: continued to deteriorate and the affordability restrictions
expired on four median-income (100%) units in the sixth building.
When BMR buyers purchase an inclusionary BMR unit, they are required to sign a Resale
Restriction Agreement with the City that imposes occupancy and resale restrictions and gives the
City the option to purchase the unit, or transfer the right to a new low- to moderate-income
Staff Report
Subject: Below Market Rate Units at City Lights
Page 2
buyer. In a typical year, the City receives two to five resale notices which result in the transfer of
BMR units to new eligible buyers. Unfortunately, in two cases this past year, the affordable
prices were too high to attract new BMR buyers. As a result, the City did not exercise its
purchase options and two City Lights units were sold at market-rate prices. The City, however,
did capture the price difference between the affordable sales price and the market-rate price
resulting in the City receiving $23,664 from the sale of one unit and $28,554 from the other unit
(total $52,218, the "Excess Proceeds")..
Recently, the City has received notices of intent to sell from two more BMR owners at City
Lights. The allowed resale prices are once again too high to attract new BMR buyers, and the
units are at risk of being lost from the City's affordable housing stock. The reason it is difficult to
resell the City Lights BMR units is that: the price difference between the restricted BMR units
and the market-rate units is very small, so Buyers would rather purchase market-rate units that
are not subject to resale restrictions than purchase BMR units that are subject to such restrictions.
The City and Redevelopment Agency have three options for addressing the affordable units at risk of
converting to market-rate units:
A. The City's First Time Homebuyer Administrator has determined that BMR units need to be
priced 20% below market-rate unit:> in order to attract new buyers. Therefore, the City and
Agency could preserve the BMR units by providing a subsidy to the buyer that would reduce
the price of the units to that level. F'or example, the two units currently being sold are alow-
income two-bedroom unit and median-income two-bedroom unit. As shown on the table
below, the low-income unit could be preserved by providing a $14,533 subsidy to the buyer
and the median-income unit could be preserved by providing a $35,200 subsidy to the buyer.
In this scenario both units would bE; restricted as low-income units going forward.
Low-Income Median Income
Market Price $ 435,000 $ 435,000
20% Reduction $ 89,019 $ 89,019
Proposed Resale Price $ 345,981 $ 345,981
Allowed Resale Price $ 360,514 $ 381,181
City/Agency Subsidy
Necessary to Reach
Proposed Resale Price $ 14,533 $ 35,200
B. The Agency and City could assist a~ nonprofit agency to purchase the units and rent them. The
nonprofit would obtain a conventional loan for up to the amount supported by the rents less
operating expenses. Unfortunately, the free cash flow from the affordable rents would only be
about $1,000 to $1,300 and would only support bank loans of about $160,000 to $220,000. The
Agency would have to provide a subsidy of $140,000 and. $221,000 per unit in order to make this
option feasible.
C. The City and Agency could allow the units be sold as market-rate units and collect the difference
between the market-rate price and the restricted resale price. Based on past experience, the City
would receive an average of $25,000 per unit sold.
Staff Report
Subject: Below Market Rate Units at City Lights
Page 3
The loss of BMR units eliminates affordable housing opportunities for low- to moderate-income
residents and affects the City's affordable housing production credit. Staff, therefore, is
requesting that the City Council and Redevelopment Agency Board authorize the use of
$300,000 in Low- and Moderate Incorrie Housing Funds and $52,218 in Excess Funds from the
Affordable Housing Trust Fund to pursue Option B as the most economical means to preserve
units at risk of losing their affordability. These funds will allow the City to preserve a minimum
of 8 units and potentially as many as 1(units. It is much less expensive to preserve an existing
affordable unit created under the City's Inclusionary Housing Ordinance than it is to create a new
affordable unit. Preserving BMR units at City Lights also meets the City Council's desire to
blend affordable units into mixed-income developments.
With Option B, BMR buyers would be required to enter into an agreement with the City and/or
Agency that restricts the resale price to an affordable level for 55 years. Staff will also require
buyers and all subsequent buyers to pa:y the City and/or Agency a small percentage of the
appreciation upon the sale of the home. The shared appreciation would. be based on the size of the
subsidy provided to the buyer. For example, the low-income unit buyer would be required to
provide the City and/or Agency 4% of the appreciation upon resale of the unit and the median-
income unit buyer would be required to provide the City and/or Agency 9.2% of the appreciation.
However, if the shared appreciation requirement proves to be a hindrance to selling the units, the
Executive Director should be given they discretion to eliminate this requirement from the program.
FT TNT~TN(;
Funds in the amount of up to $300,000 are available for the proposed subsidy upon Agency Board
approval of a budget amendment to the Agency's Low- and Moderate Income Housing Fund
("Low/Mod Fund") Operating Budget.
CONCLUSION
It is recommended that the Redevelopment Agency Board adopt a resolution 1 }authorizing the
expenditure of up to $300,000 from thc; Low- and Moderate-Income Housing Fund to subsidize
the purchase oflower-income units at City Lights by providing a subsidy of up to $50,000 to
eligible buyers to preserve each unit; 2) adopting findings that such expenditure will be of benefit
to the El Camino Corridor Project Area; 3) approving a budget amendment to the Redevelopment
Agency Low- and Moderate Income Housing Fund Operating Budget. In return for the subsidy,
buyers will be required to enter into an agreement with the Agency that restricts the resale price
to an affordable level for 55 years and :requires the buyer and subsequent buyers to pay the
Agency a small percentage of the appreciation upon the sale of the home; and 4) authorizing the
Executive Director to eliminate the thc; shared appreciation requirement if it proves to be a
hindrance to selling the units.
Staff Report
Subject: Below Market Rate Units at City Lights
Page 4
By: Approved: ~ ~-~
Marty Van Duyn Barry .Nagel
Assistant Executive Director Executive Director
Exhibits: Resolution
1478430.1
RESOLUTION NO
REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO,
STATE OF CALIFORNIA
A RESOLUTION AUTHORIZING THE EXPENDITURE
OF UP TO $300,000 FROM THE LOW- AND
MODERATE-INCOI`~1E HOUSING FUND TO
PRESERVE THE AFFORDABILITY OF BELOW
MARKET RATE UNI"TS AT CITY LIGHTS, ADOPTING
FINDINGS IN CONNECTION THEREWITH, AND
APPROVING AN AMENDMENT TO THE A_GENCY'S
LOW- AND MODERATE-INCOME HOUSING FUND
OPERATING BUDGF;T
WHEREAS, the Redevelopment Agency of the City of South San Francisco ("Agency")
is a redevelopment agency existing pursuant to the Community Redevelopment Law, California
Health and Safety Code Section 33000, et seq. (the "CRL"), and pursuant to the authority
granted thereunder, has the responsibility to carry out the Redevelopment Plan
("Redevelopment Plan") for the El Camino Corridor Redevelopment Project Area ("Project
Area "); and
WHEREAS, two owners of inclusionary below market rate units ("nMR Units") in the
South City Lights development located outside the Project Area at 2200 Gellert Court desire to
sell their BMR Units; and
WHEREAS, the owners of the BMR Units are having difficulty finding buyers to
purchase the BMR Units at the affordable price because the affordable price is so close to market
rate; and
WHEREAS, if the owners cannot find buyers to purchase the BMR Units at the
affordable price, the BMR Units will lbe sold at market rate, and the City will lose the
affordability of the units; and
WHEREAS, to preserve the affordability of the two BMR Units and facilitate the sale of
the units to eligible buyers, the Agency and City intend to provide a subsidy to the buyers of the
two BMR Units; and
WHEREAS, the Agency intends to finance its portion of the subsidy with funds from the
Agency's Low- and Moderate-Income Housing Fund ("Low/Mod Housing Fund"); and
WHEREAS, to recoup the Age°ncy's anal City's investment and ensure the continued
affordability of the BMR Units, the buyers will be required to execute an agreement with the
Agency and/or City which restricts the affordability of the BMR Units for 55 years and requires
the buyer and subsequent buyers to pay the Agency and/or City a percentage of the appreciation.
upon the resale of the unit ("Resale R~:striction AgrEement"); and
WHEREAS, pursuant to Section 33334.2 of the CRL, the Agency may use Low/Mod
Housing Fund monies outside of the Project Area provided that the Agency Board and the City
Council find that the use will be of benefit to the Project Area; and
WHEREAS, the City Council has adopted a resolution finding that use of Low/Mod
Housing Fund monies to subsidize the purchase of two BMR units in City Lights will be of
benefit to the Project Area by providing affordable housing.
NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of
South San Francisco that it hereby:
1. Finds that the expenditure of monies from the Low/Mod Housing Fund to
subsidize the purchase of two BMR Units in South City Lights will benefit the Project
Area by providing affordable housing.
2. Authorizes the expenditure of up to $300,000 from the Low/Mod Housing Fund
to subsidize the purchase of two BMR Units in South City Lights.
3. Approves an amendment to the Agency's Low/]~1od Housing Fund operating
budget.
4. Authorizes the Executive Director of the Agency (or his designee) to execute
Resale Restriction Agreements with the buyers of the subsidized BMR Units, to eliminate
the shared appreciation requirement from the Resale Restriction Agreements if the
Executive Director determines that such requirement adversely affects the marketability
of the BMR Units, to sign all documents, make all approvals and take all actions
necessary or appropriate to carry out and implement the intent of this Resolution.
I hereby certify that the foregoing Resolution was regularly introduced and
adopted by the Redevelopment Agency of the City of South San Francisco at a meeting
held on the 14th day of July, 2010 by 'the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
.ATTEST:
Agency Secretary
1478696.1