Title
HUD Rental Assistance Demonstration Portfolio Award Implementation at Nine Public Housing Communities (Ordinance S-45290)
Description
Request to authorize the City Manager, or his designee, to implement the U.S. Department of Housing and Urban Development's (HUD) Rental Assistance Demonstration (RAD) Program at the Washington Manor, Pine Towers, Maryvale Parkway Terrace, Aeroterra Senior Village, McCarty on Monroe, The Summit Apartments, A.L. Krohn Homes, Frank Luke Homes and Sidney P. Osborn public housing communities. Further request authorization for the City Treasurer to accept, and the City Controller to disburse, all funds related to this item. There is no impact to the General Fund.
Report
Summary
In February 2016 and May 2017, the City Council approved application to the RAD Program for a portfolio of nine public housing communities: Maryvale Parkway Terrace, Washington Manor, Pine Towers, McCarty on Monroe, Aeroterra Senior Village, The Summit Apartments, A.L. Krohn Homes, Frank Luke Homes and Sidney P. Osborn. HUD awarded a RAD Program Portfolio Award for these nine communities, allowing the Housing Department to convert the public housing units from a public housing operating subsidy to a long-term, renewable, project-based Section 8 contract. Participation in RAD will: (1) increase the self-sufficiency of property operations through more stable Section 8 funding; (2) provide for property reserves, not subject to HUD recapture, to address on-going capital needs; and (3) allow for the use of Low Income Housing Tax Credits as well as private sources of funding to make capital improvements.
The properties proposed for RAD Program implementation under the Portfolio Award are:
Maryvale Parkway Terrace, 4545 N. Maryvale Pkwy. (108 units).
Washington Manor, 1123 E. Monroe St. (112 units).
Pine Towers, 2936 N. 36th St. (156 units).
McCarty on Monroe, 1130 E. Monroe St. (34 units).
Aeroterra Senior Village, 675 N. 16th St. (60 units).
The Summit Apartments, 12830 N. Paradise Village Pkwy. (50 units).
A.L. Krohn Homes, 1940 1/2 E. Villa St. (202 units).
Frank Luke Homes, 500 N. 20th St. (230 units).
Sidney P. Osborn, 1720 E. Adams St. (145 units).
The RAD Program will help provide for future financial sustainability and continued affordability at these nine public housing properties. Five of the nine properties provide housing for seniors, which would not change under the RAD Program.
RAD is a central part of HUD's affordable rental housing preservation strategy and allows Public Housing Authorities, such as the City's Housing Department, to leverage private and public debt and equity in order to reinvest in its public housing stock.
Under RAD, residents continue to pay 30 percent of their income for rent and maintain the same basic rights as they possess in the public housing program. The Housing Department does not anticipate permanently relocating residents of these properties as a result of the RAD conversion.
The Housing Department seeks authorization to proceed with all actions necessary or appropriate to implement the RAD Program at the nine properties mentioned above including the following:
Pursue substantial rehabilitation of existing buildings, demolition and new construction, and relocation of resident households per RAD requirements, as needed.
Form new city-controlled non-profit corporations with the Housing Director to serve as sole incorporator, with names and governance documents as approved by the City Manager or his designee.
Form a new corporate entity or entities, of which one of these will be a member and developer, to serve as the ownership entities for the sites.
Procure and/or engage in funding transactions to finance capital needs, including submitting applications and accepting awards of Low Income Housing Tax Credits (LIHTC), seeking a LIHTC equity investor, and obtaining other grants and/or loans.
Provide financial guarantees to investors or lenders to assure completion and loan repayment if necessary to obtain financing, provided that any guaranty may only be paid from any developer fees to be paid to the new corporation.
Appropriate and expend up to $5 million in Housing Department public housing and/or affordable housing funds to provide predevelopment, reserve and gap funding.
Allocate Section 8 project-based vouchers and/or public housing units, amend HUD Annual Plan(s), and enter into associated contracts or agreements, as necessary to facilitate financing, rehabilitation, and operations.
Convey or grant fee title or a lesser interest in all or any portion of the site to the Corporations, LLCs, public utilities, and other third parties as necessary to facilitate financing, rehabilitation, and operations.
Procure, execute, and submit or deliver all contracts, documents and instruments necessary to facilitate financing, rehabilitation, and operations.
Use and expend the proceeds of any grants, loans, and other financing and funding sources to carry out rehabilitation and operations.
Take other action necessary or appropriate to rehabilitate, construct, implement, and operate all phases of the RAD Program implementation.
Financial Impact
Funding is available in the Housing Capital Improvement Program budget. There is no impact to the General Fund.
Location
Multiple addresses listed above.
Council Districts: 3, 5 and 8.
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Housing Department.