Title
Request to Add Federal Community Development Block Grant Funding for Pine Towers Affordable Housing Rehabilitation (Ordinance S-48955)
Description
Request to authorize the City Manager, or his designee, to add up to $3 million in federal Community Development Block Grant (CDBG) funding, and take all necessary actions and execute all documents with Pine Towers Housing Corporation, for the rehabilitation of the Pine Towers affordable housing community, which is converting through the U.S. Department of Housing and Urban Development's (HUD) Rental Assistance Demonstration (RAD) Program from Public Housing to Section 8 rental assistance. Further request to authorize the City Controller to disburse all funds related to this item. There is no impact to the General Fund.
Report
Summary
On Jan. 9, 2019, the City Council approved the implementation and rehabilitation of Pine Towers, a senior Public Housing community, through the HUD RAD Program. Pine Towers, which sits on approximately 2.7 acres, is located at 2936 N. 36th St., and consists of 156 units with studios and one-bedrooms. The RAD Program helps revitalize aging Public Housing properties and address the backlog of deferred maintenance and capital improvements, as well as provide future financial sustainability and continued affordability. Converting Pine Towers to RAD and providing renovations to the property also benefits residents as outdated units will be upgraded to include modern appliances and unit amenities.
In March 2020, HUD awarded a RAD program commitment for Pine Towers, allowing the Housing Department to convert the property's 156 Public Housing units from a Public Housing operating subsidy to a long-term, renewable, project-based Section 8 contract. As part of the RAD conversion process, the Housing Department has created a non-profit entity, Pine Towers Housing Corporation, that will be the ownership entity for the project.
To date, 92 units of the 156 Pine Towers units have been renovated. The final phase consists of renovating the remaining 64 outdated units, replacing major systems and upgrading exterior paint and asphalt. All 156 units will remain affordable under a Section 8 rental assistance contract. The total development budget for the final phase is estimated at approximately $7 million. The Housing Department is utilizing $4,057,495 from its federal Capital Fund Program allocation. To address the funding gap to complete this phase, CDBG funds are being requested to assist with hard construction costs due to increasing prices as well as upgrades for safety and code compliance purposes. Construction is anticipated to commence in December 2022 and be completed in June 2024.
Financial Impact
Funding is available in the Neighborhood Services Department’s HUD CDBG program. There is no impact to the General Fund.
Concurrence/Previous Council Action
Original project implementation authority was granted on Jan. 9, 2019, by City Council through Ordinance S-45290.
Location
2936 N. 36th St.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Managers Gina Montes and Alan Stephenson and the Housing and Neighborhood Services departments.