CC 2017-12-12_12a HomeShareSLO Housing Program
MEMORANDUM
TO: CITY COUNCIL
FROM: TERESA MCCLISH, COMMUNITY DEVELOPMENT DIRECTOR
BY: KELLY HEFFERNON, ASSOCIATE PLANNER
SUBJECT: CONSIDERATION OF A REQUEST TO ALLOCATE $10,000 FROM THE
CITY’S IN-LIEU AFFORDABLE HOUSING FUND TO THE
HOMESHARESLO HOUSING PROGRAM
DATE: DECEMBER 12, 2017
SUMMARY OF ACTION:
Consideration of a request of $10,000 from the City’s In-Lieu Affordable Housing Fund
by HomeShareSLO.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The City’s In-Lieu Affordable Housing Fund has an approximate fund balance of
$338,000. The City has committed $175,000 of that fund balance toward the Courtland
Street Apartments complex over the next three (3) years, and $70,000 to the East
Grand Avenue Master Plan, providing a fund balance of approximately $93,000. There
are no other encumbrances from this fund at this time.
RECOMMENDATION:
It is recommended the City Council not appropriate $10,000 from the City’s In-Lieu
Affordable Housing Fund for the HomeShareSLO program.
BACKGROUND:
During the October 24, 2017 City Council meeting under Community Comments and
Suggestions, HomeShareSLO Board Member Marcia Alter provided an overview of the
non-profit organization and requested that Council schedule consideration of a $10,000
allocation from the City’s In-Lieu Affordable Housing Fund to this organization at a
future meeting.
The HomeShareSLO program is modeled after over sixty (60) programs nationwide,
with the purpose of increasing housing through the use of existing unused bedrooms.
The program provides the following services:
Intake/screening services
o Description of the program including requirements and history.
o Description of the program process, perceptions and expectations.
Item 12.a. - Page 1
CITY COUNCIL
CONSIDERATION OF ALLOCATING $10,000 FROM THE CITY’S IN-LIEU
AFFORDABLE HOUSING FUND TO THE HOMESHARE SLO HOUSING PROGRAM
DECEMBER 12, 2017
PAGE 2
Reference checking
o Criminal record background check.
o Personal background check.
Home inspections and initial interview
o Visit to examine safety of home and neighborhood.
o Visit home to assess applicant’s needs, expectations, preferences, and
concerns.
Facilitation of introduction between potential homesharers
o Maintain communications with all parties to assure a level of comfort with
preliminary interviews and telephone conversations.
o Arrange home visits with potential roommates.
o Attend interview(s) to review particulars of both parties and to assist with
discussing outstanding issues or concerns.
Assistance in the Negotiation of Homesharing Contracts
o Introduce and maintain temporary (short-term) contracts.
o Introduce and maintain long-term contracts.
Follow-up Assistance
o Monitor arrangement for satisfaction.
o Mediate and arbitrate differences or conflicts.
HomeShareSLO received its non-profit status in April 2016, and officially started its
operations in January 2017. To date, the program has made the following
accomplishments:
Enrolled approximately thirty-five (35) home providers countywide.
Accepted forty (40) home-seekers.
Provided housing mentoring to about 220 persons.
Provided home share training to over 800 persons.
Facilitated twelve (12) housing matches (24 clients, most of which are senior,
low-income women).
To date, five (5) local jurisdictions have contributed funds to HomeShareSLO as shown
in Table 1 below:
Table 1: Local Jurisdiction Funding for HomeShareSLO
Jurisdiction Allocation Amount Fund Source
City of Morro Bay $6,000 Inclusionary Housing Fund
City of Pismo Beach $2,000 Inclusionary Housing Fund
City of Grover Beach $10,000 Other funds
City of San Luis Obispo $6,300 Other funds
County of San Luis Obispo $13,000 Other funds
Total: $37,300
Item 12.a. - Page 2
CITY COUNCIL
CONSIDERATION OF ALLOCATING $10,000 FROM THE CITY’S IN-LIEU
AFFORDABLE HOUSING FUND TO THE HOMESHARE SLO HOUSING PROGRAM
DECEMBER 12, 2017
PAGE 3
ANALYSIS OF ISSUES:
HomeShareSLO requests that $10,000 be allocated from the City’s In-Lieu Affordable
Housing Fund to provide training, outreach and services during the 2018 calendar year
to match three (3) low-income renters with available empty bedrooms in Arroyo Grande
homes owned by seniors (see Attachment 1 for more information regarding
HomeShareSLO).
The City’s demographics outlined in the 2016 Arroyo Grande Housing Element indicate
that there are 253 households with single senior men living alone, and 764 household
with single senior women living alone. Most of these households are on a fixed income,
making it more difficult to manage finances as the cost of living increases.
As described in Attachment 1, HomeShareSLO proposes to increase the supply of
affordable housing units within existing homes at a low cost compared to new
construction. The program provides a service that helps to match a person who has an
extra room or separate unit available (a provider) with a seeker who is looking for a
place to live. Benefits of this program include:
Increasing the City’s affordable housing stock at a low cost by using existing
housing more efficiently.
Creating more affordable room rental options through matching room providers
with those seeking a place to live.
Utilizing existing resources instead of constructing new housing on limited vacant
land.
Providing additional revenue to low-income persons on a fixed income.
Providing companionship to isolated individuals.
Providing minimal assistance around the house for the homeowner (not care
giving).
HomeShareSLO proposes to use the funds as follows:
Provide assistance for three (3) matches, serving six (6) residents (homeowner
and renter).
o Benefit: Increases the number of affordable housing units, and brings
approximately $21,000 of added income to residents (home provider
receives $7,200 per year, times three (3) matches, equals $21,600).
o Estimated Cost: $1,000 per client matched; six (6) times $1,000 equals
$6,000.
Facilitate a minimum of three (3) training and outreach events in 2018.
o Benefit: 50-100 resident participants receive home share skills.
o Estimated Cost: $1,000 per training event times three (3) trainings equals
$3,000.
Item 12.a. - Page 3
CITY COUNCIL
CONSIDERATION OF ALLOCATING $10,000 FROM THE CITY’S IN-LIEU
AFFORDABLE HOUSING FUND TO THE HOMESHARE SLO HOUSING PROGRAM
DECEMBER 12, 2017
PAGE 4
Provide housing mentoring skills to Arroyo Grande residents who contact
HomeShareSLO program staff.
o Benefit: Serve 15-30 residents in 2018 to mentor on-going financial
literacy skills, and provide referrals to other programs.
o Estimated Cost: $1,000 for staff time and materials.
Inclusionary Affordable Housing Regulations
The City’s inclusionary affordable housing requirements are described in Arroyo Grande
Municipal Code (AGMC) Chapter 16.80. The purpose of this Chapter is to “provide a
continuing supply of affordable housing units to meet the needs of existing and future
Arroyo Grande residents in all income categories pursuant to the requirements of
California state law, and as outlined in the City's adopted housing element.”
Inclusionary housing regulations apply to: 1) the construction of any new residential
project of two or more housing units; 2) the substantial rehabilitation of two or more
housing units; or 3) the conversion of two or more existing rental housing units to
ownership units. Depending on the circumstances, a developer must meet affordable
housing requirements by either providing on-site affordable housing units, paying an in-
lieu fee, or dedicating land for the future development of affordable housing.
During the early 2000s when most of the country experienced a rapid increase in the
market price of housing, the City approved numerous residential developments that
resulted in over fifty (50) deed restricted affordable housing units at various income
levels through the City’s inclusionary housing regulations (see Attachment 2 for status
of the City’s affordable housing units). When housing prices started to drop dramatically
in 2008, a credit crisis ensued and many homes went into foreclosure. The City lost
several affordable housing units due to foreclosures, as well as to the formulas used to
calculate the maximum affordable sales price. Under these formulas (which differed
depending on the subdivision), the maximum sales price for moderate rate units
exceeded the market value of the home. The City released the affordable housing deed
restrictions for property owners either in foreclosure or trying to avoid foreclosure.
Given the large number of homes that lost their affordability restriction under these
circumstances, and the considerable staff time required to manage the overall
affordable housing program, the City now requires fees in-lieu of constructing on-site
affordable housing units for market rate subdivisions. These in-lieu fees are used
primarily to support non-profit agency development of affordable rental housing projects.
These agencies are better equipped to manage the affordable housing units than City
staff. Because of the restrictions attached to the various funding sources necessary for
financial feasibility, such as state low-income housing tax credits, the projects have
stricter affordability requirements. For example, these units generally must remain
affordable for a period of fifty (50) years to ensure that the affordable housing supply is
well maintained and operated, and to prevent losses to the supply of affordable housing.
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CITY COUNCIL
CONSIDERATION OF ALLOCATING $10,000 FROM THE CITY’S IN-LIEU
AFFORDABLE HOUSING FUND TO THE HOMESHARE SLO HOUSING PROGRAM
DECEMBER 12, 2017
PAGE 5
The City’s current in-lieu fee for projects that require an amendment to the General Plan
and/or zoning designation of a property is 2.5% of the value of new construction for
each unit within the development. In all other cases, the in-lieu fee is 1% of the value of
new construction for each unit within the development. The City has invested its
affordable housing in-lieu funds into several affordable housing projects and programs
over the past twelve (12) years as indicated in Table 2.
Table 2: Allocation of the City’s Affordable Housing In-Lieu Fund
Year Amount Project/Vendor Units Secured
(Status)
2016-17 $150,000
Peoples’ Self Help Housing (Courtland Street
Apartments)*
36
(constructed)
$70,000 East Grand Avenue Master Plan
2015-16 $0
2014-15 $75,000 Peoples’ Self Help Housing (Courtland Street
Apartments)
2013-14
$100,000 Housing Authority of San Luis Obispo (224
South Halcyon Road)
20
(entitlement
pending)
$5,000 SLO County Housing Trust Fund
2012-13 $0
2011-12 $5,000 SLO County Housing Trust Fund
2010-11 $0
2009-10 $4,105 Homeless Services Oversight Council
2008-09 $0
2007-08 $0
2006-07 $5,000 SLO County Housing Trust Fund
2005-06 $206,424 Meta Housing - Cortina d’Arroyo Grande
Senior Apartments (North Courtland Street)
108
(constructed)
Total: $620,529 164
*Total committed is $400,000. Disbursed $225,000 to date. Additional RDA funding was also
provided.
Based on information provided in Table 2, and considering only the line items for
housing construction (using the $400,000 total committed to the Courtland Apartments
as indicated with the asterisk), the City has allocated a total of $706,424 to the
construction of 164 affordable units, or roughly $4,307 per unit. HomeShareSLO’s
request aims to match three units at a cost of $3,333 per match. Although the cost per
match is less than the City’s contribution for constructing a new affordable housing unit,
the duration of the match is unclear, while units constructed by non-profit housing
builders secure long-term affordable housing in the City.
Item 12.a. - Page 5
CITY COUNCIL
CONSIDERATION OF ALLOCATING $10,000 FROM THE CITY’S IN-LIEU
AFFORDABLE HOUSING FUND TO THE HOMESHARE SLO HOUSING PROGRAM
DECEMBER 12, 2017
PAGE 6
Other issues regarding the HomeShareSLO program include no requirement for income
verification of the home providers and home seekers, and it is unknown if the City will
receive credit for these matches as part of the Regional Housing Needs Allocation
(RHNA) of the General Plan Housing Element. Conversely, affordable housing
construction projects, such as those depicted in Table 2, provide clear information
regarding their level of affordability and count towards the City’s RHNA goals.
Section 16.80.070 of the AGMC provides that affordable housing in-lieu fees received
by the City may be “used solely to increase the supply of affordable housing units.
Funds in the affordable housing trust fund may be used to better facilitate the
improvement of the City’s affordable housing stock as well as the provision of new
affordable units.” “Affordable housing units” are defined as those units that are governed
by a legal covenant or restriction enforceable by the City restricting the availability of the
units to lower-income and very low-income residents. The units must then be rented or
sold to lower-income or very low-income households. As discussed above, it is unclear
what type of legal restrictions, if any, are placed on the housing unit by
HomeShareSLO.
There are several policies in the City’s General Plan Housing Element that would
support the HomeShareSLO program, including:
A.9. The City shall continue to enable and encourage multiple-family, rental
apartments, senior, mobile home, and special needs housing in appropriate
locations and densities. These multiple family residential alternative housing
types tend to be more affordable than prevailing single-family residential low and
medium density developments.
B.5. Affordable housing shall not be concentrated into a condensed, identifiable
portion of a development or subdivision but rather dispersed throughout and
integrated into the development as determined acceptable considering site
constraints, size and design.
J.1. The City shall encourage and shall seek funding to assist in the development of
low and moderate-income senior rentals.
J.3. The City shall continue to allow small-scale group housing (less than seven
persons) in multiple-family residential districts, in accordance with applicable
State laws.
J.6. Co-housing and similar unconventional housing arrangements shall be
considered in appropriate locations subject to review and approval on a case-by-
case basis.
Item 12.a. - Page 6
CITY COUNCIL
CONSIDERATION OF ALLOCATING $10,000 FROM THE CITY’S IN-LIEU
AFFORDABLE HOUSING FUND TO THE HOMESHARE SLO HOUSING PROGRAM
DECEMBER 12, 2017
PAGE 7
However, there are four Housing Element policies that are inconsistent with the
HomeShare program given that the matches are temporary and not permanent, are
highly unlikely to count toward meeting the City’s RHNA numbers, and do not include
income level verification. These policies include:
A.1. The City shall adopt policies, programs, and procedures to attempt to meet the
present and future needs of residents of the City, and to aim at providing their fair
share regional housing need allocated for each income classification, within
identified governmental, market, economic and natural constraints.
B.1. All residential projects that receive additional densities or other City incentives to
include affordable housing shall be placed into a City-approved program to
maintain the affordability for at least 45 (owner-occupied) or 55 years (rental
units). Any sale or change of ownership of these affordable units prior to
satisfying the year restriction shall be “rolled over” for same amount of years to
protect “at risk” units. For rental housing, affordability shall be maintained through
recorded agreements between a property owner and the City, its Housing
Authority, or another housing provider approved by the City. For owner-occupied
units, long-term affordability can be maintained through property owner
agreements to maintain the designated unit as affordable for the specified period,
utilizing a promissory note and deed of trust recorded on the property.
B.2. The City shall continue monitoring affordable units to ensure ongoing compliance
with the sales limits or rental rates established by agreement between the City
and the developer. The City shall continue to take the necessary steps to assure
compliance with the regulatory agreement, including consideration of contracting
with a housing authority or joining a regional monitoring agency if one is
developed.
C.1. The City shall establish criterion for allocating financial resources from its In-Lieu
Affordable Housing Fund to augment extremely, very low, and low-income
housing development.
ADVANTAGES:
Not appropriating $10,000 from the City’s In-Lieu Affordable Housing Fund to the
HomeShareSLO program allows the City to instead utilize these funds to secure
additional permanent affordable housing.
DISADVANTAGES:
The HomeShareSLO program helps to provide affordable housing by utilizing existing
resources instead of constructing new affordable housing on vacant land. There are
many advantages to this program, including providing additional revenue for seniors on
a fixed income and companionship to isolated individuals. By not financially supporting
Item 12.a. - Page 7
CITY COUNCIL
CONSIDERATION OF ALLOCATING $10,000 FROM THE CITY’S IN-LIEU
AFFORDABLE HOUSING FUND TO THE HOMESHARE SLO HOUSING PROGRAM
DECEMBER 12, 2017
PAGE 8
this program, there will likely be fewer matches within the City. However,
HomeShareSLO is eligible to apply for funding through the City’s Jim Guthrie
Community Service Grant Program, which has an annual budget of $20,000.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Do not approve a $10,000 appropriation from the City’s In-Lieu Affordable
Housing Fund to the HomeShareSLO program for the 2018 calendar year;
2. Do not approve a $10,000 appropriation from the City at this time, but direct staff
to work with HomeShareSLO to determine whether measures could be taken to
ensure HomeShareSLO’s housing creation complies with the City’s allowable
use of its in-lieu fees; or
3. Provide other direction to staff.
ENVIRONMENTAL REVIEW:
The allocation of City affordable housing in-lieu funds is not considered a project under
the California Environmental Quality Act (CEQA).
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2.
ATTACHMENTS:
1. Information regarding HomeShareSLO
2. City of Arroyo Grande status of affordable housing units
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